Last week the [Chicago] City Council voted 35-14 to impose a hyper-minimum wage on "big-box" retail stores with more than $1 billion of sales. The new law will require the likes of Wal-Mart, Target, Costco, and Home Depot to pay every worker -- regardless of experience, education or skill -- a minimum wage of $13 an hour by 2010 ($10 in salary and $3 in health benefits). At least another dozen cities, including Washington, D.C., are considering copy-cat laws.
No less a global journalistic authority than The Economist recently called Chicago a success story: "a city buzzing with life, humming with prosperity, sparkling with new buildings, new sculptures, new parks, and generally exuding vitality."
"The only issue is how many jobs Chicago will lose," opines the Journal. Chicago will lose some of the shit jobs like Wal-Mart greeter, no doubt, but higher-end jobs will fill the void. That's the point. Chicago's quality of life is rising, so that makes it more in demand and therefore it is a more expensive place to live and work (and staff) than your typical Wal-Mart red state exurban hellhole.
The economic evidence speaks for itself. Old-school business editorialists, take note — you are the dying dinosaurs.
Halliburton Co. posted a $591 million second-quarter profit... profit increased 51% from $392 million in the same period a year earlier.
ConocoPhillips said second-quarter profit rose 65% to $5.2 billion, bolstered by high oil prices.
BP posted second-quarter net income of $7.27 billion.
Exxon Mobil Corp.'s second-quarter profit jumped 36%, ... reported net income of $10.36 billion. It was the second-largest quarterly profit ever recorded by a publicly traded U.S. company.
Privately held corporations, which include some of the most lucrative operations such as Bechtel, have no obligation to report profits so what they siphon from US taxpayers is a closely guarded secret.
All links except Bechtel's are from the past seven days and go to the subscriber-only Wall Street Journal.
Dean LeBaron is founder of Batterymarch Financial Management, one of the inventors of index funds and a pioneer of quantitative and emerging market investing. He is also getting gloomy (Sandra Ward in Barron's, sub, req'd):
Is the geopolitical scene among the bearish factors [affecting the economy]?
Yes. I've always said that investment managers should not have a political view, but individual investors were allowed the luxury. The U.S. has done incredible damage to itself. I see this in Switzerland. The Swiss people are pretty tolerant of anyone in the world, but they really have an attitude about the United States.
My impression is, most of the world would like to get as far away from the U.S. as possible, be neither friend nor enemy.
Russia goes its own way now. Who would have imagined 10 years ago that Russia would have paid down $22 billon of international debt to the G7 countries and pay a premium of a billion dollars in order to prepay? It is phenomenal. From a financial standpoint, it makes sense if the dollar is declining in value to leave the debt there and pay it off more cheaply. But I think it is just a matter of: Let's just get it away from the United States, let's distance ourselves.
Even China, which does an enormous amount of trade with the U.S., doesn't particularly care what we do anymore. They are concerned with their own domestic market, which is growing at a very rapid rate. If there is some export business on top of that, that's fine. The Chinese will buy up a nickel company in Cuba, or an energy company in the Canadian oil sands. They'll dance around the U.S., and what we do doesn't really affect them too much. [...]
More and more people are voicing concerns about the big gap between the rich and the poor.
It will lead to trouble. The response to it seems to be building bigger fences. The U.S. is going to build a fence on the border of Mexico and the Israelis want a fence between themselves and the Palestinians. A Swiss friend pointed out Americans spend a million dollars to kill one Iraqi when they could hire that person for $10,000. It is such a bargain.
You make it sound simple to end poverty and hunger. Where do you start?
With clean water. Half the world doesn't have clean water. It is not terribly difficult to get clean water to everybody.
Solving the world's real problems is good for business. Solving the world's imaginary problems (Iraqi WMDs, gay marriage, flag burning, tort reform, etc.) is bad for business. It's that simple.
These issues pose a real problem not just for rich capitalists but for any working American who participates in a 401(k) retirement plan: Where should you invest your wages when the world's financial superpower is an Orwellian hornet's nest of corruption?
During the [memorial] service, family members eulogized Lay as a loving husband, father, stepfather and grandfather. One stepson, Beau Herrold, read four pages of fond childhood reminiscences of Lay, going back to the days when Lay was courting his mother, who was then a single mother of three. Lay embraced him and his siblings as though they were his own children, Herrold said.
Another stepson, David Herrold, said he was saddened by Lay's death and "angry because of the way he was treated the last five years of his life. I'll leave it at that."
Such indignant outrage from David! Such fluffy nostalgia from Beau!
Lay left his previous wife and kids to court his secretary, who happened to be their mother. This is what Republican family values look like in practice.
As far as embracing people as though they were his own children, Lay's loving largesse did not extend to those he was legally responsible to — his employees and most especially the participants in his 401(k) plan. He was a fiduciary to the plan, meaning that he must manage it, by law, in their best interests and not in his own. Not only did he not live up to his duty, he abdicated in the most spectacular way possible: by personally siphoning hundreds of millions of dollars in cash while encouraging his employees to put their life savings in soon-to-be-worthless Enron securities. So much for being a loving "stepfather" to his employees.
Ken Lay was at best criminally negligent as a CEO and as a steward of his employees' money, crimes for which he will never pay. And neither will David, whose purloined inheritance was guaranteed by his stepfather's death, and whose indignant outrage is totally misplaced.
David, if you want to understand the anger of the rest of the world at your stepfather, get a mirror, you little shit.
Some with no social or business connection also paid their respects [at his memorial]. Geraldine Zillions said she came to know Lay a year ago when she was at Bering's, buying $80 worth of gardening equipment. When she realized she had left her wallet at home, Lay, who was in line behind her, paid for her purchase and refused to let her reimburse him.
Carpenter Jon Bothager, who worked on one of the Lays' River Oaks homes, tearfully recalled their generosity: His son was a top graduate of Stratford High School but could not get scholarship money. When he asked how he might find a way to get his son into the University of Texas, the Lays paid his tuition until Enron fell apart.
Behold the Houstonian God, Ken Lay. Geraldine Zillions [!] got to touch the hem of His garment, and received the celestial gift of gardening equipment &mdash procured with earthly gold pieces from Enron employees' 401(k) plan, verily.
Jon Bothager built Lay's humble River Oaks manger and polished His holy halo, and lo, Jon's child receives the fullness of the wisdom of the University of Texas. Such magnanimity! Such holy mercy! Such divine kindness!
As heaven opens its pearly gates to receive Him, let us sing Lay's praises! How mighty is His bounty! How brilliant His sacred visage! How lowly and pitiful the mere mortals who desire but a crust of bread from his holy purse!
Former President George Bush and his wife, Barbara, sat in the second row. Also present were former Secretary of State James Baker and former Secretary of Commerce Rob Mosbacher.
Hmm. The father of the man who denied he was supported by the man who supported him the most, and the man who engineered that man's 2000 non-election.
Move along, nothing to see here.
Also in keeping with recent comparisons of Ken Lay to Jesus Christ and Martin Luther King Jr: "The Rev. Bill Lawson, pastor of Wheeler Avenue Baptist Church, likened Lay to James Byrd, an African-American man who was dragged to death in a racially motivated murder near Jasper eight years ago. 'Ken Lay was neither black nor poor as James Byrd was,' Rev. Bill Lawson said. 'But I'm angry because he was the victim of a lynching.'"
Yeah, I know it's a funeral and the speakers feel the need to really pour it on — but this is Ken Grandma-Millie-Fucking Lay we're talking about. Ken Lay is no James Byrd, not even remotely close. Not even in the same universe.
The public sycophants can wring the crocodile tears from their handkerchiefs all day, but not one among them is weeping for the people Lay deceived and defrauded.
Citgo Petroleum Corp., the Venezuelan state-owned company, said it will stop selling gasoline to hundreds of stations in 14 states over the next year.
The move stems from a decision by the Houston-based company, a subsidiary of state-owned Petroleos de Venezuela SA, to stop buying gasoline from other refiners to serve the 13,000 U.S. stations it services. Instead, the company will sell just the fuel produced from its three U.S. refineries, which together can process up to 750,000 barrels of crude oil a day. [...]
Because of their proximity, the U.S. and Venezuela rely on each other in the oil market. Venezuela supplies 14% of the U.S. oil supply, and the U.S. buys half of Venezuela's oil exports. Venezuela has reserves of about 80 billion barrels of conventional oil and as many as 270 billion barrels of extra-heavy oil that must be substantially upgraded before it can be refined.
But the Venezuelan oil company has become highly politicized under the country's president, Hugo Chavez, a vocal critic of the U.S. Because of poor field management and political choices, Venezuela has reduced its oil production since Mr. Chavez took power in 1998 to about 2.6 million barrels a day from a peak of 3.1 million barrels a day.
In Washington, Larry Neal, deputy staff director for the House Energy and Commerce Committee, criticized the move. "It is not unreasonable to wonder if politics instead of economics are at work when the man behind the company routinely uses it to dabble in American politics," Mr. Neal said.
Such bogus bravado and blustering bullshit. The men behind energy economics have been dabbling in American politics for at least decades. Do the names Dick Cheney, Ken Lay, and George Bush (pick one, it doesn't matter) mean anything to a global warming politicker like Larry Neal?
Thousands of demonstrators are expected to protest on Thursday against the US president, George Bush, who arrives in eastern Germany tomorrow night for a three-day bonding session with Germany's leader, Angela Merkel.
The president is dropping into Mrs Merkel's picturesque Baltic coast constituency before flying on Friday to the G8 summit in St Petersburg. But the trip has already provoked opposition from residents. Officials in the north-eastern state of Mecklenburg-Western Pomerania have invited 1,000 carefully selected guests to meet Mr Bush on tomorrow in the seaside town of Stralsund. The stage-managed reception for the US president is being wryly compared to the treatment once afforded East Germany's communist party.
Among those attending the private memorial was Jeff Skilling, Lay's co-defendant, who quickly slipped into the chapel with his wife and his defense attorney Daniel Petrocelli.
Security was tight at the chapel. Access was granted only to those whose names appeared on the guest list, and when the Lay family arrived in a caravan of black sport utility vehicles, security personnel surrounded the group with umbrellas, obstructing photographers.
The Rev. Bill Lawson, pastor emeritus of Houston's Wheeler Avenue Baptist Church, officiated the 90-minute memorial. Joining Lawson in eulogizing the former Enron chairman were longtime family friend and former Enron executive Mick Seidl, Linda Lay's brother Ray Phillips and the five Lay children.
The portrait they painted of the man who once ran the nation's seventh largest company was that of philanthropist, father, grandfather and friend. Little mention was made of Enron, guests said. [...]
While Lay had numerous detractors, many in Aspen remained his friends and fans. Lawson told the gathering of almost 200 that those who are vilified in life — John F. Kennedy, Martin Luther King Jr. and even Jesus — often become heroes in death.
Lawson recited the Lord's Prayer.
Then he read Psalm 18:1-3 and read from the New Testament's Second Corinthians. [...]
Family members coming in from Houston for the service included Ken Lay's children — Elizabeth Vittor with her husband, José Luis Vittor, and Mark Lay with his wife, Natalie — and Linda Lay's children — Beau Herrold with his wife, Heather, Robyn Vermeil and David Herrold. The service was followed by a catered reception on the chapel deck and in the garden.
The catered reception (with an open bar [!], according to the Chronicle's video clip) was involuntarily paid for by Enron's 401(k) plan participants as an unfortunate and unwelcome side effect of their employment.
The writer of the article, Shelby Hodge, is not the Chronicle's business or political reporter, but its society columnist. At the core of the story, Ken Lay was newsworthy not because he was smart or ethical because he was rich and famous.
Here's a guy who had an affair with his secretary (Linda Lay nee Herrold) and screwed his employees. I am baffled why people find such cads as Lay so fascinating when their crimes are about as interesting as convenience store holdups, albeit on a much bigger scale.
The only reason I have followed this story for five long years is not because Lay is intrinsically fascinating in the least, but because this commonplace piece of shit played a pivotal role in delivering the Bush administration into the White House — one of the biggest frauds in the world's formerly great democracy, the USA.
Meanwhile, you can read this interview with the author, Lawrence Wright: "It is a mystery to me that people in the CIA have not been held accountable. The office of the inspector general in the Justice Department did two internal investigations, one of the FBI and one of the CIA. The report on the FBI was declassified and released to the public, and the FBI took a lot of heat for the revelations about its pre-9/11 missteps. The report on the CIA has not been released to the public."
Under the Fifth Circuit's law of abatement of a criminal conviction when a defendant dies before appellate review of the conviction, "It is well established in this circuit that the death of a criminal defendant pending an appeal of his or her case abates, ab initio, the entire criminal proceeding." United States v. Asset, 990 F.2d 208 (5th Cir. 1993). In a recent Fifth Circuit decision, United States v. Estate of Parsons, 367 F.3d 409 (5th Cir. 2004), the court explained that "the appeal does not just disappear, and the case is not merely dismissed. Instead, everything associated with the case is extinguished, leaving the defendant as if he had never been indicted or convicted." In Parsons, the court vacated a forfeiture order, which means that the government's forfeiture claim against Lay for $43.5 million (see earlier post here) will be dismissed. The Fifth Circuit explained the rationale for the rule: "The finality principle reasons that the state should not label one as guilty until he has exhausted his opportunity to appeal. The punishment principle asserts that the state should not punish a dead person or his estate." An interesting question is whether one can still describe Lay as having been convicted of a crime, at least in a technical sense, because the law no longer recognizes there having been any criminal case initiated against him.
Unlike the criminal case, civil claims against Lay, such as the SEC's case and the securities class action, will continue against his estate. However, because the criminal conviction is wiped out, the plaintiffs cannot rely on it as proof in their case, if my dim memory of collateral estoppel serves me right. [emphasis mine]
Of course Lay knew all of this in advance. He had the most expensive legal talent stolen money could buy.
Another compelling argument for his suicide is the date: the fourth of July (the ambulance was called at 1 a.m. on the 5th), America's birthday. Suicide notes are generally addressed to those perceived to have hurt the suicidee. In this case, Lay has said that since the collapse of his company he was living the "American nightmare," and so wanted to take out his revenge against who he thought hurt him the most — America itself.
With his suicide &mdash designed to clear his name, enrich his family, and shame the country all in one fell swoop — Lay proved he was an egomaniac until the very end. But there are still many people among those he hurt who think even his death is doubtful.
More on the postmortem clearing of Lay's name at the Houston Chronicle, which conveniently reminds us of another Enron suicide and its possible rationale: "When former Enron executive Cliff Baxter killed himself in early 2002, attorneys representing the shareholders decided to drop his estate from the case."
