Currently browsing the archives for September 2008
help is on the way!
(Duck Soup 1933. The last of the five pix for Paramount before going to MGM. Groucho is Rufus T Firefly, Contains the mirror scene with Harpo. “Help is on the way” is another famous scene. These notes since no reader seems to over 40 except for Frank, Henry and me)
Vanity Fair has a piece in its October issue looking at Maria Bartiromo and Erin Burnett (cue drooling and panting by geeky econ boys). While I’m glad there is an article about women reporters who actually know something about their subjects (rather than being Fox newsreaders), the tone of the article is rather insulting even as it tries to dispell the myth of the bitchfight. If it were two attractive men, would we have the term “money honey” (which I know Bartiromo has now claimed for the branding) or “street sweetie”? Would there EVER be an entire article discussing who is the “Queen B” and making the whole damn thing seem like a stupid high school catfight? God forbid these just happen to be two intelligent people reporting the news. Yes, all news personalities have to be attractive or they wouldn’t be on tv, but male anchors are not subjected to this kind of inane overlay to stories about them. It is perhaps acknowledged briefly that they are “distinguished” or “handsome” and the article moves on. Nobody assumes that two men are backbiting or threatened by one another – perhaps because nobody questions that there can be several prominent men reporting business whereas women have to fight for the one designated female financial reporter slot? Hmmm…
With sultry blue eyes, sharp, almost perfect features, dimples, and a lazy, bedroomy smile, Burnett not only was knowledgeable about financial issues but had a knack for translating them into plain English, and in contrast to Maria, who was more singularly focused on corporate news, Burnett was interested in broader policy issues—education, health care, how to pay for the repair of America’s crumbling infrastructure. She had a casual, breezy on-air persona. She was also a bit irreverent—and spontaneous.
Seriously, a “lazy, bedroomy smile”? Are you f-ing kidding me? The rest of that quote is fine – it talks about her style of reporting, her interests, also known as her qualifications for the job. Don’t even get me started on the photo that is half-way down the page:
Again, Burnett is a savvy woman who knows how to promote herself and she is playing off of it. But male reporters don’t have to go there, no photo shoot would even propose to have a man pose like that. She agreed to it, but why was she even asked?
Frankly, I think Bartiromo says it best in the article (and note the total LACK of cattiness):
“I think it’s a disservice to us as women and as businesspeople, by the way, to compare what you’re seeing from a handful of situations to women who are really trying to make it in business. You could look at CNBC and see women who are beautiful and smart and they’re not showing all this skin: Becky Quick, Erin Burnett, Michelle Caruso-Cabrera—[all] beautiful successful women doing great,” she says. “It’s more than prancing around the Stock Exchange with little dresses on. We’re covering business and it doesn’t matter what you look like if you don’t know your stuff. If you don’t have the goods, you will not last.”
And from Burnett at the end of the article:
“I think that when people see strong, successful women, they love to imagine that there is a rivalry,” says Burnett. “Maybe it’s because there are not as many women. And maybe, I don’t know,” she says, rolling her eyes, “it’s a male-fantasy thing.”
I worried about the College’s borrowing two years ago. The College had, at that time, $1.5 billion in the bank. Why would/should it borrow money (by selling bonds) rather than just spend some of the endowment? A commentator responded with:
Because Williams’ cost of equity is higher (i.e. return on the endowment) than its cost of debt. Especially if the interest paid is tax exempt.
Come on Kane, don’t you work in finance?
This is the logic of the condo-flipper in Fort Myers. As long as the endowment keeps on going up by more than the interest we pay on the bonds, Williams has a money machine! Why not just borrow $100 million and invest it in the endowment itself? We pay 3% in interest but make 10% in returns. Presto! The 7% spread means that Williams has made $7 million, and at no risk! Even better would be to borrow $1 billion and invest in the endowment. Then we make $70 million a year, enough extra to make tuition free for all!
The problem, obviously, is that endowment returns aren’t always positive, as folks with more than a year or two in finance realize. Leverage is a dangerous thing, for both hedge funds and small liberal arts colleges.
What impact has this sort of stuff had on our finances? I don’t know. Here is a listing of outstanding bonds and here are recent ones. Would all Williams debt be listed here? Is there an easy way to aggregate the total amount? Consider two bonds (the largest?):
Williams College $36,000,000 Bond Issue 01/04/2007
Williams College $71,160,000 Bond Issue 01/04/2007
How much interest does Williams pay on these bonds? If it is 3%, and the endowment lost 5% in the year through June 30, 2008, then this magical bit of financial engineering has cost the College $8 million. Well played, Collette Chilton!
Now, that is not fair. Williams was borrowing money long before Collette Chilton showed up. She almost certainly does not set policy on her own. The Trustees (along with the Investment Committee) sign off on any new debt. Yet the central fact remains that borrowing money when you have $1+ billion in the bank is a suspect exercise. In a bull market, leverage makes you look like a genius. In a bear market, it blows you up.
So, for starters, how about some transparency from the College? How large is Williams’ debt? What interest rate does it pay? What are the plans for reducing/increasing it?
It seems that, as of June 30, 2005, the College had $170 million in debt, at various interest rates. Has this debt been (partly) paid off via recent debt issues? Note that 2005 debt includes Series E through I. The two bond issues above are Series L and M. Looking again at the listing of outstanding debt, it looks like some of the previous debt was retired and some new added. Consider:
Williams College E 5/18/1993 22,000 13,800
Williams College G 6/29/1999 9,255 9,255
Williams College H 4/1/2003 42,850 39,630
Williams College J 4/3/2006 33,065 32,783
Williams College K 4/3/2006 39,700 39,700
Williams College M 1/7/2007 36,000 36,000
Williams College L 1/7/2007 71,160 71,160
We have the Series, the issue date, the issued amount and the amount outstanding (both in millions). Call it $240 million in debt. Assume the interest rate is 3%. (Is that reasonable?) Since the endowment lost 5% last year (and is almost certainly down again since June 30), we are looking at a $19 million loss.
Time to pay-off the debt or double down?
UPDATE II: Thanks to HWC for this link to the College’s financial statements.
A few quick Williams mentions over the weekend in the NYTimes:
First, Williams is noted as one of three “top flight colleges” Eliot Spitzer’s daughter was accepted to last Spring (I believe she ended up attending Harvard).
Second, the Times published a nice biographical piece on Susan Schwab ’76.
but it was so much easier in analog.
I spent the weekend without internet (and it was glorious). I came back and saw the same tired electoral crap I read on political sites. The same back and forth with the same five or six people. The same (arguably) racist arguments used, the same people plagiarizing other sites, the same emotional spillover and calming down. The same stuff that got one alum to e-mail me and ask for ephblog to talk more about Williams than the presidential campaign. Perhaps eph pundit could be a sub-page or something so those who only want Williams things on Ephblog don’t get overwhelmed by it?
I can’t believe I pine for the days of affirmative action debates and alcohol policy planning from us alumni years removed from college, but that was much better. Can we slow down eph pundit so as to allow ephblog to become more…well…eph-y?
Your former president (and pen winner!),
Nice article about lacrosse goalie Michael Gerbush ’09. Read the whole thing but note this section on admissions.
Lacking prep success and with a 5-foot-8 frame, Gerbush didn’t get a lot of attention on the recruiting trail. But McCormack received a tip that there was a kid on the Island who was taking his lumps, but could contribute at the collegiate level. The fact that he could get into Williams on his academics alone certainly did not hurt.
“I got a phone call from a coach who said there is a really good goalie. If you saw him in person, you might not think much of him because he’s a little guy, but you should take a look at him,” said McCormack. “So he didn’t come in with a lot of [hype], but once he got here, we were really impressed with him. And we certainly felt as though, with his consistency and demeanor of being calm and cool regardless of the situation, he was someone who could lead us to more victories than losses.”
1) Smart observers do not trust completely a coach’s claim about who could have gotten into Williams on “academics alone,” but, with a double major in computer science and physics, it is almost impossible to believe that Gerbush is a “tip” or even a “protect.” (Useful background on terminology in this thread.)
2) Note the second order effects that Morty’s increase in admissions standards for athletes has on the process. In the old days, the unnamed high school coach might never have mentioned Gerbush to men’s lacrosse coach George McCormack. Why bother when McCormack is just going to use his large number of tips and extensive leeway to just find the best possible goalie, without worrying too much about high school academics? But McCormack no longer has as much freedom as he did in the pre-Morty era. He has fewer tips/protects and the standards for them are higher. So, he is desperate to find at least a few players who don’t require admissions help. The tipster knows this (and, I assume that McCormack tells everyone what he is looking for, like any good college coach) and so mentions Gerbush. Presto! Williams now has one more varsity athlete with academic credentials in the mainstream of the rest of the student body.
3) Note, again, how former baseball coach Dave Barnard predicted that high profile mens sports like lacrosse would never win another NESCAC championship because of the rise in admissions standards. Turns out, he was wrong. Baseball, basketball and lacrosse have all won championships in an era when their athletes include more students like Gerbush and fewer (what is the polite term?) lunkheads. Good stuff! It is still unclear (to me) why this is happening. Isn’t it almost tautological to predict that, if Morty raises admissions standards for Williams athletes, then Williams sports teams will do less well? And, yet, that does not seem to have happened.
Possible explanations: First, it could be that other schools have raised their standards as well. (Contrary opinion on the “Nesbitt Net” here.) Second, this could just be some random luck. Third, it could be that Williams coaches are not that good at identifying athletic talent, at least within narrow bounds. So, back in the day, Coach McCormack looked at a few goalies and picked the one that he thought best, even if that goalie had suspect academics (or, at least, what Morty would consider suspect academics). Now, McCormack is “stuck” with someone like Gerbush, but, it turns out, Gerbush is just about as good as the lunkhead that McCormack would have picked if Morty had not raised the standards. Fourth, it could be that the sort of second-order effects that have brought applicants like Gerbush to Williams (when, in the pre-Morty era, coaches weren’t even aware of them) have allowed Williams to maintain its athletic standards, on average, while raising the academic profile of its athletes.
Your thoughts? And, yes, there is a great senior thesis to be written on this topic.
My opinion on the bailout? What Nouriel Roubini says.
The Treasury plan also does not explicitly include an HOLC-style program to reduce across the board the debt burden of the distressed household sector; without such a component the debt overhang of the household sector will continue to depress consumption spending and will exacerbate the current economic recession.
Thus, the Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown. It is pathetic that Congress did not consult any of the many professional economists that have presented – many on the RGE Monitor Finance blog forum – alternative plans that were more fair and efficient and less costly ways to resolve this crisis. This is again a case of privatizing the gains and socializing the losses; a bailout and socialism for the rich, the well-connected and Wall Street. And it is a scandal that even Congressional Democrats have fallen for this Treasury scam that does little to resolve the debt burden of millions of distressed home owners.
Indeed. If I were Obama, I would avoid voting on the bailout or even expressing a strong opinion on the topic. McCain’s best (albeit slim) chance for winning the election is to come out strongly against the bill (whatever his actual opinions on the topic). Previous discussions here and here.
The Record featured an interesting roundtable with three Economics professors on the credit crisis.
What do you think about Henry Paulson’s $700 billion bailout plan? Do you think it will help ease the crisis?
Kuttner: Paulson’s plan is basically a carte blanche: it is basically Paulson saying to Congress, “Look, give me 700 billion dollars and I will just buy up these securities that are backed by the bad debt.”
Will that help? Surely it will. It’ll get all this bad debt off the balance sheets of financial institutions. The question is, are there smarter ways to do it? This is really just throwing money at the problem. A lot of the criticism of Paulson’s plan has come under is those who say, “Well, this is going to have a lot of unintended consequences that may be undesirable.”
Caprio: The plan can be far more expensive because it removes any accountability for the Treasury department so we don’t know how much they’ll really pay for the bad assets they are going to buy.
If you look at other countries that have been through this for good and bad practices, as well as U.S. history and the depression, the programs that were really careful with taxpayer money, that were very transparent, forced very hard conditions on banks. If they were going to get any money from the government, they had to accept a lot of tough conditions – limits on salaries and no dividends for shareholders – until the government got its money out. And the taxpayers got all the upside, and what I think we’re worried about is that American taxpayers may be getting the downside which will then really make the consequences dangerous for the dollar.
So last question. Can each of you say how you think the crisis will play out?
Caprio: There are going to be major changes in regulation in the financial sector. That’s a relatively easy forecast. Which way it’s going to go is harder to know. There are a lot of people who are saying that this represents the failure of deregulation, and I just think that’s fundamentally misleading.
… than the odor of mendacity…You can smell it. It smells like death”.
(Screen shot from Tennessee Williams’ ‘Cat on a Hot Tin Roof’ 1958. Burl Ives and Paul Newman.)
Close readers will see I have changed the head on this post from ‘1st debate’ to ‘politics’, a more general, if fish (not Stanley) -in-a-barrel truism. My motivation was to connect this classic scene and one of Williams (Tennessee, not Ephriam’s) best quotes and a memorable young Newman role to the current scene to emphasize their timelessness. Nor can Burl Ives as Big Daddy be seen as anything other than monumental.
A July Bloggingheads.tv interview with Dan Drezner ’90 on the current financial turmoil.
What’s interesting here is not so much the quality of the discussion as the power of the technology. Students at Tufts pay thousands of dollars to listen to Dan’s thoughts on the financial crisis. We can listen for free. Is that a stable equilibrium?
Who says that there aren’t intellectual discussions on WSO? Not me! Extra credit for turning David Moore’s Python code into R.
The Globe is reporting that Bascom Lodge on the summit of Mt. Greylock is among a number of State-owned properties that Massachusetts is putting out for long-term lease in exchange for upkeep commitments. Bascom, which offered hikers (and those who drove up) hostel-style lodging and meals, has been closed during the two-year repair (rebuilding?) of the Greylock summit road. Other properties profiled in the Globe article seem to be in terrible shape, but Bascom had seemed to me to be in decent shape when I was up there several years ago – of course, it would quickly deteriorate while not used. I hope someone will step forward to reopen it.
Does anyone know anything about this?
Neighborhoods CC Reps
- Currier: Ifiok Inyang ’11
- Dodd: Andrew Goldston ’09
- Spencer: Keith Butts ’09
- Wood: Jenny Danzi ’09
Freshmen House Reps
- Armstrong: Tim Goggins
- Dennett: Zach Evans
- Mills: Runoff between Sam Jonynas and Mustafa Saadi
- Pratt: Austin Davis
- Sage: Newton Davis
- Williams: Elizabeth Jimenez
- Andres Lopez ’09, Student Chair
- Wes Johnson ’09
- Charlie Crawford ’10
- Mia DeSimone ’10
- Cecelia Davis-Hayes ’11
- Will Slack ’11
- Matiullah Amin ’12
- William Su ’12
Committee on Priorities and Resources
- Jia Cui ’09
$35,000 (to be split between top 2)
- First: 1914 Library
- Second: ACE Concerts
This looks to be an interesting talk.
For nearly three decades Dr. Robert Sternberg, Provost and Professor of Psychology at Tufts University, has been recognized as one of the world’s leading authorities on human intelligence and intelligence testing. He is an outspoken critic of some of the most widely used, traditional measures and definitions of intelligence, and his papers, books, interviews, and lectures on these topics have sparked much controversy and debate. During his lecture, will discuss not only his unique theories and research on intelligence, but also the specific issue of college admission testing and some of the innovations he has been promoting at Tufts.
Good stuff. Comments:
2) The more that competitor schools like Tufts use worse standards for selecting students than Williams uses, the better off we are. The more that Amherst lets in (slightly) poorer but less intelligent students, the more smarter but (slightly) richer students are left for Williams.
3) It would be fun to know more about what is going on at Tufts. Consider:
During the last year, Tufts University started a pilot project that represents one of the most significant shifts in undergraduate admissions policies for a competitive research university. The experiment involves additional essays used to identify applicants who are creative, who possess practical skills, or who have wisdom about how to promote the common good — characteristics Tufts says are consistent with its vision of higher education, but which may not be reflected in SAT scores or high school grade point averages.
The Tufts program is known as Kaleidoscope and it is based on the work of Robert Sternberg, a psychologist who specializes in measuring intelligence and promoting creativity, and who is dean of the School of Arts and Sciences at Tufts. Sternberg has worked for years to demonstrate that there are many factors — not just grades or test scores — that can predict the success of students in various academic settings. Many admissions reforms these days are based on the idea of “holistic admissions,” in which committees attempt to take a more in depth, and less numbers-driven look at applicants. But Kaleidoscope responds to the concerns of some that such approaches may be too impressionistic and subjective.
“From an outside perspective, it seems capricious,” Coffin said of admissions to competitive institutions, since students with similar grades and test scores have no way of expecting that they will have the same outcome in the process. While Kaleidoscope makes the process consider more factors, he said, it also makes it less subjective, as admissions committees are relying on something real, not just an impression, when they argue that an applicant has creativity, for example. “What we’ve done has another level of information in the process,” he said.
In an interview Tuesday, Coffin described how the process worked in its first year and some minor adjustments for the coming admissions cycle.
What Kaleidoscope does on the application is give the prospective student the chance to write a short additional essay selected among eight prompts. But the topics are not standard, and are designed to demonstrate the presence (or absence) of certain qualities in an applicant. The topics for next year illustrate the idea of moving beyond the “name a person you admire” or “name a book that influenced you” approach to essays. One prompt is simply “What is more interesting: Gorillas or guerrillas?” Another invites students to do as follows: “Use an 8.5 x 11 inch sheet of paper to create something. You can blueprint your future home, create a new product, design a costume or a theatrical set, compose a score or do something entirely different. Let your imagination wander.” Another says: “Thomas Edison believed invention required ‘a good imagination and a pile of junk.’ What inspires your original thinking? How might you apply your ingenuity to serve the common good and make a difference in society?”
The essay prompts are designed so that students may demonstrate one or more of the qualities being sought.
Call me a cynic, but this seems like total dreck. (Note that requiring extra essays as a means of weeding out applicants who aren’t that interested in a school and/or who are unlikely to go if admitted is a different topic altogether.)
But who cares what I think? It is an empirical question whether or not the students admitted using Kaleidoscope are better (or, harder question, make Tufts a better place) than the students admitted using the traditional approach. See here for an explanation of how to test such a claim.
Do you think that Tufts will make the necessary data available to any critics of the approach, either internal or external? I doubt it. See the somewhat related controversy over UCLA admissions. If Sternberg declares, five years from now, that Kaleidoscope is a big success but does not make the data (with names removed) public, will you believe him? I won’t.
UPDATE: Just to be more clear, this is dreck for three reasons. First, anytime you change the admissions rules to favor X, all the applicants from fancy high schools will start having thing X, if at all possible. Now, if you start favoring people over 6′ 3”, it will be tough for applicants to fake that. But if you start to favor essays that show creativity, you will see a lot of essays that look like what you want from places like Choate. College counselors from Choate et al give the colleges what they want. Second, the generally unstated motivation, for at least some colleges, is to increase diversity of various sorts while maintaining an apparently “fair” system. Tufts would like at least Y% of its class to be, say, from “poor” families. But the current admissions system, with so much weight on high school grades and standardized tests, produces much less than Y%. Perhaps a different metric will, objectively and fairly, produce Y%. Third, there is no evidence that admissions officers (or anyone else) can actually evaluate non-academic abilities. See Jen Doleac’s thesis for more discussion.
Dave Kane has done a great of creating and continuing interest in this blog, increasing participation, and in preserving ‘for the record, Williams issues of interest past and present!
My hat is off to David Kane.
Although he has relieved himself of board responsibilities, I don’t believe he wiill ever be a silent reader of his ‘Williams Conversation’ in spite of his demurrer. I certainly hope not!
Remember, Richard Nixon said on November 7, 1962 “You won’t have Nixon to kick around any more”. So much for self-prognostication.
For Immediate Release
‘Rory’ Resigns as ephblog Prexy.
At a special board meeting held in Boston yesterday, Mr Rory tendered his resignation to board members, citing his desire for more time to pursue other personal and business interests.
Under the leadership of Mr Rory, ephblog has increased its base of ‘hits’ and references to and from the ephblog url such that tender offers to the blog have been made by Microsoft, google, and Jigglebabes-r-us. In this period of market upset, Mr Rory declined to enter into negotiations with the interested parties and set a course of editorial revitalization, circulation augmentation, and asset management to assure ephblog’s claim to independence.
Speaking for the board, publisher Mr David Kane thanked Mr Rory for his many contributions in both management and editorial insight and concluded “He has left his mark upon us in the same way that feral animals mark their territory and we are the better for it”.
The publisher also appointed Mr “99 Not Out” Ronit and Mr Rechtal Turgidley, Jr to serve on the board. Mr Turgidley, Jr has also been named as President.
Both Mr Ronit and Mr Turgidley, Jr accepted their respective appointments.
An Eph connection to the bailout?
Republican Sen. John McCain said he would suspend campaigning to help tackle a $700 billion bailout proposal and called on Democratic rival Sen. Barack Obama to postpone their debate Friday, as the roiling U.S. financial crisis took center stage in the presidential campaign.
Another key event that aides said prompted Sen. McCain’s actions: a roundtable Wednesday morning with some of Wall Street’s biggest names, financial titans who told him that the rescue legislation must be passed soon. “We urged John to get all over it, that this is a national-security crisis,” one financial executive said.
The financial executives, who were told on Tuesday that Sen. McCain wanted to meet with them the next day, included Merrill Lynch & Co. CEO John Thain, J.P. Morgan Chase & Co. Vice Chairman James Lee and private-equity fund owner Henry Kravis.
For Sen. McCain, figuring out how to handle the bailout bill presented a particular challenge because much of the resistance to the plan has come from conservatives alarmed at the cost of bailout and the scope of powers that would be granted to the Treasury secretary.
Sen. McCain, who has never been close to conservatives, has worked hard during the election season to earn their trust. But that could be at risk if he were to support a package that former House Speaker Newt Gingrich called “a dead loser on Election Day.”
Why are so many Democrats in favor of this bail out?
1) A “national-security crisis?” Give me a break! We are already in a recession. Obviously, we all hope that the recession will be brief, but there is no good evidence that this particular plan will do any good. All the smartest observers (e.g., here, here and here) are against it. Haven’t Democrats learned that “national-security crisis” is a smokescreen for policies that they ought to oppose? Just because rates on short term commercial paper are high does not mean that alien invasion is nigh.
2) As much as all good Ephs like Jimmy Lee ’75, don’t Democrats read EphBlog?
Someone at Chase once said, Jimmy is like a crocodile: He sits there with his eyes just a bit above the water saying, “Oh yeah, come just a little bit closer.”
Come a little close John McCain (and the rest of the Washington establishment). Just a little closer.
Jimmy Lee (and John Thain and Henry Kravis and most of Wall Street) have hundreds of billions of dollars of lousy assets, stuff that they value at 50 cents on the dollar but which is actually worth only 25 cents (or whatever). They want the US Government (which means you, future taxpayers) to buy it from them at 50 cents, or even more. I can imagine plutocrat-worshiping Republicans doing that, those shameless lick-spittles, but why would any Democrat be in favor of making Jimmy Lee richer?
Perhaps my Democratic friends can explain this to me. (And don’t even start with “No bailout means financial Armageddon.” That is just bunk, designed to stampede the rubes into action.)
3) And aren’t the politics interesting? Unless something dramatic happens, I don’t see how McCain can beat Obama. But what if McCain demagogued the bailout, as I previously urged Obama to do? Doing so would allow him to be against both Bush and the Washington consensus. He, not Obama, would become the candidate of change. Perhaps such a gambit wouldn’t be enough to win, but it is the only plausible hope as far as I can see.
The CCI minutes should be up on our website by Monday. The website can be found here.
In the meantime, I will answer some of the questions that David posed to us in regards to the last few posts.
CCI and Committee on Diversity and Community (CDC) are two separate organizations, as David mentioned in his comment. CDC is a permanent advisory committee to the president of Williams. It is comprised of faculty, students, and staff. They deal much more with improving the general community standards and look at a much broader scope of things. CCI is a student-generated and student-directed temporary committee formed by College Council. We are looking at the specific, and possibly systemic problems, among our student body. We talked a bit at this last meeting about working with CDC, but that is all speculation at this point.
As for Claiming Williams, we are not directly involved with that. We are a committee without bias one way or the other (i.e. we aren’t going to claim there are systemic problems until we have evidence that says it is so). Therefore, I highly doubt that we will be involved with the planning of C.W. day.
I will put up another post as soon as the minutes are officially up on the website.
Have a great weekend!
(This gets at the argument started by Frank here. One of the perils of a Williams education is that you can never convincingly be one of those mythic “real people”. You will end up looking like a giant phony if you even try.)
There are many, many topics right now that I would like to discuss on EB, but I only have so much mental space. Living in Washington, DC and working for a federal agency that is a *little* bit busy during this current, ahem, situation, I’m about up to <i>here</i> with the attempted campaign hijacking of the bailout package. This situation is already bad, stressful, partisan, etc. etc. etc. without the additional bs. I’m going to stop now before I go off the rails about this “suspending” nonsense.
What this post is actually about is lobbyists, mostly one particular (former?) lobbyist. Much has been made this year about campaigns not being beholden to lobbyists or not being run by lobbyists or not taking contributions to lobbyists, etc. I’ll be honest that I’m not sure how giving up your lobbying status the week before you work on a campaign makes some kind of difference. You’d need a pretty extensive break to really shake that influence. Anyway, we’ve also heard a lot about campaign folks that have ties to the mortgage giants and failing investment banks. We all know that Jim Johnson was kicked off Obama’s veep search team because of his mortage ties. McCain’s campaign tried to tie Obama to Raines (obviously false, but didn’t stop the commercial). And now, we have a bit of drama about Rick Davis and the payments from Freddie Mac to his lobbying firm, Davis Manafort.
The McCain campaign, and Davis himself, tell the story that he severed his relationship with the firm in 2006. There may have been payments to the firm after that date (indeed, until the takeover), they say, but that is irrelevant as Davis is now a part of Davis Manafort in name only. So I was willing to buy that this had been kind of blown out of proportion…it looks bad, but other than Freddie paying money for work Davis was apparently not doing anymore, I didn’t see a big problem other than appearances.
Then this evening I read a Newsweek article about the whole situation. I still don’t think there really is anything untoward going on, but it feels an awful lot more like Davis and the McCain campaign blithely lied to the American public. That campaign has “misstated” aka lied to our faces about a lot of silly things this year, and I suppose this is just another case.
First the McCain version of events:
In its initial statements to reporters this week, the McCain campaign said that the disclosure of the payments from Freddie Mac was irrelevant because Davis, who was never a registered lobbyist for the troubled housing corporation, had severed his relationship with Davis Manafort in 2006, and was no longer drawing any income from it. Jill Hazelbaker, the campaign’s communications director, said in an e-mail Tuesday that Davis “left” Davis Manafort in 2006. In a statement attacking The New York Times, posted on the campaign’s Web site on Wednesday, campaign spokesman Michael Goldfarb said that Davis “separated from his consulting firm, Davis Manafort, in 2006.” (A senior campaign official, in an e-mail statement to NEWSWEEK that was not for attribution on Tuesday night, said “Rick is no longer affiliated with the firm.”)
Sounds good, right? Except…
But those statements appear to have overstated the extent to which Davis had severed his relationship with his lobbying firm. Filings made by “Davis Manafort Partners” with the Virginia Corporation Commission as recently as April 1, 2008, show that Davis was still listed as one of only two corporate officers and directors of the firm, according to records on the commission’s Web site reviewed by NEWSWEEK. That filing records Davis as the “treas/clerk” of the firm; his business partner, Paul Manafort is listed as the president and chief executive officer.
Another filing by “Davis Manafort, Inc.” (with the same Alexandria, Va. address, and recorded on Oct. 17, 2007) also lists Davis as an officer and director of the firm, reporting his position as “T/Clerk,” a reference to his formal title as corporate treasurer and clerk.
So you can draw whatever conclusions you’d like from this. I don’t think that the Freddie payments were necessarily a big deal, except the holier than thou tenor of both campaigns makes anything like this seem hypocritical.
I’m interested in anyone sharing thoughts about the whole anti-lobbyist theme to this campaign. Lobbying in and of itself, in my opinion, is not a bad thing. It becomes bad when any elected official takes so many handouts, etc. that s/he feels beholden to the big money behind a particular breed of lobbyists. Do others think that Davis and the McCain campaign really lied about this? Did they tell the truth, and the rest of us are reading too much into a board position?
EphBlog author Will Slack ’11 on the lying land of politics.
The past few weeks have seen McCain ads accuse Barack Obama of comparing Sarah Palin to a pig and liberal bloggers argue that Sarah Palin’s five-month son is actually the child of her teenage daughter, Bristol Palin.
Granted, McCain later disavowed his earlier accusations, and the bloggers were embarrassed when it came out that Trig couldn’t be Bristol’s baby since she was pregnant with another child at the time of Trig’s birth. Still, there’s an underlying problem that exists and has always existed in politics.
Elections aren’t about the truth. They are about what people perceive as truth.
Indeed. Normally, I don’t like it when the Record devotes scarce op-ed space to non-Williams topics, but, in Will’s case, I’ll make an exception. Read the whole thing.
At the end of our previous discussion over whether or not the town of Wasilla had billed victims for rape kits used to gather evidence, I had (generously?) conceded that the issue was not “nonsense.” Care to revisit the topic?
No hubris here.
Is it time yet to start pulling together books about last week’s catastrophe on Wall Street? Publishers are uneasy about making plans too soon, but the city’s finest financial journalists—and their literary agents—are eager to get moving.
“There’s a lot to be said for a timely book, but we don’t know what the book is yet,” said Simon & Schuster publisher David Rosenthal, noting that there are nevertheless writers out there whom he would agree to publish immediately just because he knows they’d do a good job with whatever ends up happening.
At any rate, proposals have started making the rounds.
One comes from Times business columnist Joe Nocera and former Fortune reporter Bethany McLean, who decided to write a book together the day Lehman Brothers declared bankruptcy and Merrill Lynch sold itself to Bank of America. Mr. Nocera was visiting Ms. McLean (co-writer of the Enron book The Smartest Guys in the Room) in Chicago at the time—he was there to attend a science conference, what kind he wouldn’t say—and over some white wine, the two of them decided that a definitive chronicle of the stunning financial crisis was in order, and that they were the team best equipped to produce it.
“We want to write the big book, and I’m not afraid of saying that,” Mr. Nocera said. “It will be a book for the ages and—I know this is going to sound egomaniacal, but—between our contacts and our reporting skills and our writing skills, I think we’ll be pretty tough to beat.”
The agency representing the Nocera-McLean book to publishers, Darhansoff, Verrill and Feldman is said to be asking more than $1 million (No one there picked up the phone when Pub Crawl sought comment).
McLean’s Smartest Guys in the Room is a great read but $1 million seems like a big advance. How many copies would need to be sold for this to make sense to a publisher?
President Bush is speaking on the bailout. Your comments welcome! I am too lazy to watch, but isn’t this bearish for the passage of the plan? (Intrade has the odds at 75%.) It is one thing for Democrats to support a (relatively) non-partisan plan proposed by respected figures like Bernanke and Paulson. But how many Democrats want to vote for something championed by Bush, especially when their Republican opponents are likely to run (effective?) campaign commercials against them if they vote Yes? If, say, Congressman Chris Murphy ’96 votes for the bailout, you can be sure that his opponent will accuse him (fairly?) of spending taxpayer money to bailout Wall Street fat cats.