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The Minor Fall, The Major Lift


It’s always hard to watch when politicians and business people collide – and they almost always collide – because their frames of reference are so, well, far apart. Wall Street punishes to the maximum, as my friend Andy Kessler likes to remind us. And it usually does so quickly. In Washington, well, punishment is often meted out slowly, sometimes years after the initial offense. And politicians reinvent themselves all the time – without any ticker to display a record.

But whenever there’s a collision, there are winners and losers; the windshield, the bug and all that. It’s always sort of fun to sort the sides out. And, just for today, we’re going to leave President George Bush out of this. At this stage, reciting the faults of this administration isn’t just beating a dead horse, it’s kicking a long-dead nag to the glue factory with steel-tipped boots.

So let’s get started.

Big losers: Anyone who espouses “pay-as-you-go” as a mantra for sound fiscal management regardless of the undertaking. Most people who know – really know – how financial markets work know that the idea that businesses live strictly within their means – that they never, ever, ever spend more than they bring in – is a lot of nonsense.

Overnight borrowing – in one way or another – keeps things humming along and has for a while. No one really pays as they go – that’s why you and I borrow money to buy houses and cars. And it’s about time we all recognized this as a fact of economic life.

Loser: John McCain. He was supposed to call the Republican Party rank and file to a deal; getting the folks who wanted to disassociate themselves from President Bush. McCain didn’t get the job done. And oh, yeah, he blew off David Letterman. That’s worse than picking a fight with Murphy Brown. And would someone please call Katie Couric up and ask America’s perkiest interviewer what Sarah Palin said – or didn’t say – to call forth a look that can only be described as thinly disguised disgust on Couric’s face?

Really Big Loser: Chris Cox, head of the Securities and Exchange Commission who’s had to acknowledged that lax regulation – again – by his agency contributed to Wall Street’s woes. If they’d been actually doing their jobs real disaster might have been avoided. Anyone working in Silicon Valley since the tech market crashed knows the commission hasn’t been up to its job in for the past 10 years but it was Cox – a big fan of minimal government regulation – to oversee it being proven without any ambiguity.

Sure to be Sore Losers: The TV business press. Covering the stock market as though it were a football game isn’t going to be as much fun – or as popular with shareholders – as covering a market that grows slowly. If you’re name is Jim Cramer you might wanna think about a new outlet for your energies.

Which brings us to winners.

Long-term Winner: The buy-and-hold crowd. That’s right, buying stock, holding on to it and watching it appreciate over oh, the life of your child, is coming back in a big way. Why do you think Warren Buffet’s on a shopping spree? A market where transactions are overseen by the government is one that will more more slowly, more deliberately. And yes, I do want to say I told you so.

Winning Politiician: Rep. Barney Frank gets big time points for his negotiating skills, so much so that’s probably a safe bet that he’ll be the next Senator from Massachusetts. Frank’s no diplomat – he’s got a hair-trigger temper, particularly at 2 a.m. which is when he once took my head off – but he’s determined, he’s smart and he’s been worried about the shadow banking system created on Wall Street since earlier this summer. He’ll lead the re-regulation of financial markets next year and it’ll be a set of hearings and investigations – and legislative drafting – worth watching.

Another winner: Barack Obama. A long career watching politics teaches that there are two things never worth second-guessing. One, the result of Supreme Court cases. Oral arguments are clues to what the justices may do but clues aren’t decisions. The other are the results – the final take away – that voters have of debates. On Friday, I thought it was tied. Today, it’s pretty clear that Obama’s stateliness and calm was more impressive than McCain’s short-hand Senate speak.

Possible huge winner: The U.S. Congress which, after eight years – and I’m being generous – of dithering, has finally grown a spine. They didn’t do everything the Bush Administration to fix the mess that’s Wall Street and they took their time about it. You might disagree with the outcome – this deal is taking way too long to get sorted out – but they’re moving. Which bodes well. The SEC isn’t the only thing that needs fixing (two words: health care) and now that Congress has got the hang of this decision-making stuff they’re supposed to do, well, we might actually have a government. You know, back and forth, balance of power and all that.

You get a sense Congress thinks so, too. Why? They’re pushing back. Go find the clip of Rep. Marcy Kaptur chastising a CNBC reporter as he accuse her of voting to bring down the U.S. economy: “You’re very anxious, I can hear your voice there,’ says Kaptur who gave one of the better speeches – as a Democrat – for why she voted against the Wall Street rescue plan. “For the sake of the country and even the sake of the markets I think you should operate prudently and with a little bit of calm in your voice today. What we want to do is be responsible not just for what happens on Wall Street but what happens to the American tax payer generations hence.”

Which is, in the end, what we pay them to do.

Posted by Chris Nolan at 9:17 AM | Permalink

Sows’ Purses, Pigs’ Ears


When they attend tomorrow’s ceremony for the 9/11 bombings, it’s a safe bet it will be the last time Presidential nominees Barack Obama and John McCain behave decently toward one another. This election year is starting to feel like it’s going to be one of the nastier campaigns on record.

This is a year where the sexist and racist stereotypes we all share are going to get folded, bent and mutilated in ways that will offend each and every one of us at one point or another. Americans discuss their differences in code and this may well be the year when the code get deciphered in some new ways for new audiences.

It’s not just the pit bull in lipstick as Republican Vice Presidential contender Sarah Palin calls herself. And it’s not Obama’s use of that timeworn phrase “lipstick on a pig”. Hey, Barry, Iowa was last year. We’re past pigs now. Or we were until Alaska’s governor decided to crack wise about how tough she is. Oh, wait, Palin was joking – no offense meant, governor. No, you’re not pig-like at all. If I were going to insult you, I’d probably have used the gender-specific “sow.”

The real problem here is the seeming closeness in the campaign’s goals and the ways in which they are articulating their messages for large groups of voters.

That’s not to say that Obama and McCain have the same ideas for how to run the country. They don’t. But their campaigns are pitching very similar messages to a very small group of voters: Vote for change. Change in health care, change in the economy, change in how the nation does business – at home and abroad.

That’s not exactly a hugely original strategy for either party. Voter disgust with the way Washington claims to “work” is high. So high that the largest political party in the country is “none of the above,” a group that in four years has gone from about 7 percent of registered voters to just about 20 percent.

“None of the above” are often called “independent” voters and this year they’ve got the election in their hands. And, of that group of independent voters, women are considered a key voting block, making up about 60 percent of the “none of the above” faction. And women decide late. Which is campaign-speak for “they change their minds. dammit.”

So why does that mean things will get nasty?

Lots of politicians think the best way to get women to vote one way or another is to scare them then offer them the welcoming broad shoulder of security and authority. It worked for George Bush. You may not have thought you were a “security Mom” until you took one look at John Kerry on a windsurfer.

Other girl-baiting tactics include hiring women and making a big fuss about it. The Republicans are very, very good at this. Two examples: Sandra Day O’Connor, first women to sit on the Supreme Court, and, today, Sarah Palin. Of course, Sarah Palin couldn’t shine O’Conner’s shoes but that could easily devolve into a trivial argument about, “qualifications” and, well, a lot of women – paging Hillary Rodham Clinton – find that conversation offensive.

But “qualifications” is a word that often sums up our ideas about race. For years, the white folk who run corporate America have bemoaned the absence of “qualified” black applicants. They’d love to hire more African-Americans, they’d say, but none who are qualified apply. This while they hire their best friends’ sons – white kids – for the mailroom and other entry-level jobs.

“Qualified” is a word that many white folks use to say “well, he’s not like us” and that’s very much the subtext of the talk about Obama’s ability to lead. It’s not lost on the candidate or his family.The fashion rags have already noted Michelle Obama’s dress – conservative, stylish and Jackie-Kennedy like – and it’s comfort factor. Tall, lanky and dark-skinned, Michelle Obama is dressing to reassure people that she’s not Angela Davis. It’s only kinda of working as The New Yorker slyly observed.

Which brings us to the last subtext: race. Using a black man to scare white voters, particularly women (Security Moms!) is a tried and true tactic. It’s kept the South Republican for a generation. It got George H.W. Bush elected. And it may well work for McCain’s campaign. The tactic backfired on Clinton, mostly because she was sloppy in her language and a little too-straightforward about her appeal to white men who don’t wanna take orders from a black man. But it may well work – with a chilling effectiveness – for some talented McCain surrogate.

Which begs a question: Where is Ann Coulter? And why has she been so quiet so long?

Posted by Chris Nolan at 5:00 AM | Permalink

Sarah Smile


Normally in a political race, vice presidential nominees are compared to one another. So it was Dick Cheney v. John Edwards or, earlier, Cheney v. Joe Lieberman. But this year, even though there will be debates (assuming her name stays on the ticket) between the two veeps it doesn’t feel as though Alaska Gov. Sarah Palin‘s been picked as a contrast with Sen. Joe Biden.

Barely Democratic Sen. Joe Lieberman is the contrast to Biden, on the important area of foreign affairs, it seems. Lieberman who can probably count on the Secretary of State job in the McCain administration, is a flatly pro-Israel hawk who approves of the Bush Administration’s Middle East policy. Biden, a bit more of a rationalist in these matters – and a mouthy one – and probably can’t be relied on to toe that same line. Nor can Obama who has all but suggested a Middle East policy that would reduce the influence of Israel and the Saudi Arabia.

No, it seems as though Sarah Palin is meant to provide a contrast to Michelle Obama. And that’s not a race thing. It’s a class thing.

With her demur designer dresses, her Princeton degree, her pearl chokers and her long, lean good looks, Michelle Obama looks pretty much like every other career woman you’d meet in any big city in the U.S. – the kind who make a lot of men, white and black, nervous. Two kids – well behaved and almost professional nurtured – a husband she ruefully admires who’s just as well-educated, a nice house and a couple of good jobs, Obama is clearly smart, focused and on-the-ball. And, oh yeah, you better do what she says ’cause she’s almost six-feet tall.

The more petite Palin with her cracks about breast pumps and tales of in-flight labor, her beauty pageant past and her sloppy parenting seems, by contrast, warm and wacky, a little bit like the Mom who makes you wonder – not always in a good way – how or why she does it. Which isn’t to say that Palin isn’t competent. It’s just that she’s someone with a lot of ragged edges. And there’s a sneaking temptation to think of the Palin family – and you can hear the kids shouting, the door slamming, the off-kilterness of it all – as what is described through clenched teeth by the residents of “better” neighborhoods – neighborhoods like the one where the Obamas live – as “those people down the street…..”, folks who don’t quite have it together because they’re just barely making it.

Palin’s lack of national political savvy makes her, in a word, girlish. And girlish, for a lot of men – men like John McCain – often means more game than prudent, a little rough around the edges. Fun. For some, that’s charm. For others – mostly the very voters McCain’s trying to attract – it’s sexist because it’s clear we don’t have to take Palin seriously. Unlike Michelle Obama.

Which is why Paln’s selection – if it lasts past this week – is a horrible miscalculation.

A lot of the right-of-center voices are suggesting that Palin’s candidacy is a way to draw Hillary Clinton supporters away from the Democrats. This is nonsense. Clinton’s supporters – those older women in their 60s – are going to take one look at Sarah Palin and sigh. This – this girl – is not qualified to answer HRC’s Senate office phone.

Others are suggesting that Palin’s youth will serve as a contrast to Barack Obama and therefore draw young (and by young they mean young male) voters to the Republican Party. The thinking here is that they’ll vote for Palin who is, as various gossip website observed, very attractive. But most of the young folks who are fired up about Obama are more interested in his cool, hipness. They want to be him; they don’t want to do him. And shotgun weddings like the one Palin’s daughter’s about to have are never hip for young men.

The professional women who have been on the fence between Obama and McCain see the desparation in this move, the miscalculation, the condescension to their particular point of view by getting a girl to do a woman’s job. It’s one thing to have a daughter you’re proud of, give her a job in your office and nurture her career – as, say Hugh Hefner did with his daughter, Christine. It’s something else again to have a pretty young thing with not much experience get the second slot in a White House run by a man with serious and chronic health problems. Even Hef took his time teaching daughter Christine the publishing business and these days, when he wants to hang out with young girls, he does it in L.A., not at corporate headquarters in Chicago.

Posted by Chris Nolan at 3:06 PM | Permalink

Thugs in the Newroom


A few weeks ago, I said that it was time that women in various professions – politics and journalism – start pointing out sexist behavior and demanding that it stop. Well, Jessica DaSilva, a young woman in Tampa, Florida, and Clark Hoyt, a man in New York City, have given me an excuse to do just that. If you want to know why there are few women writing solid opinion journalism a look at DaSilva and Hoyt is a pretty good snapshot.

A post on DaSilva’s personal blog detailing a recent staff meeting at the Tampa Tribune announcing – again – lay-offs was the talk of the web this slow news weekend mostly because of the reactions DaSilva got from her colleagues. They offer an insightful look at how the mostly male news establishment goes about silencing enthusiasm and optimism.

“Wow, you really are young and naive, aren’t you?” “Jamie” writes on DaSilva’s site. “Someone sent me the link to your blog, and I almost had to laugh, it was so ridiculous. I’m truly amazed that in one of your other posts, you can tell reporters to stop whining and do something about their situation. What, praytell, young lady, would you like them to do? Let’s say you were at the Trib for 10 years and had a family to support; what would you do if you were laid off? (By the way, it’s laid off, not layed off. If you can read this, thank a copy editor.)” Jamie – who doesn’t submit his last name – finishes with a flourish: “Unfortunately, I would say that if most of the Trib staff (or any other newspaper’s staff, for that matter) reads some of your posts, you will make some serious enemies. That’s something you don’t want to do in this business; it’s WAY too small, and with the climate as it is now, you don’t want people against you. Give that some serious thought.”

And this post wasn’t a one-time event. Jamie repeats his threats in another comment. He – or perhaps “Jamie” is a she, the charge of sexism still stands – has a fellow-traveler in “Michael”: “I’m an editor at a medium-sized paper and I’m sending your name around to everyone I know in the business to make sure that you are never hired anywhere.”

Why is this an example of sexism? There’s the use of the “praytell young lady” for starters. Then, there’s the assumption that DaSilva doesn’t have – and won’t expect to have – a family to support. It would be nice if DaSilva’s case were isolated. But every woman in every newsroom knows it’s not; this is just a case of the threat made overt. And it’s why there’s precious little opinion writing by women.

Which brings us to one of the few doing the job, Maureen Dowd, and comments made by New York Times Public Editor Clark Hoyt. Hoyt’s since retracted any sort of intention that he meant to tell Dowd to “tone it down.” But that’s exactly what he was doing. But he then fell for one of the oldest dodges on the planet practiced by a woman well-versed in the sort of nonsense that came DaSilva’s way.

When she started covered politics there was a lot of “how dare she?” around Dowd’s writing and what was described by the male political press corps as her “feminine” style of reporting. These days, she placates that crowd, indulging in cheap shots that meld pop culture and paperback psychology in columns that read like nonsense to you and me by play well with the working political press corps who are in on all the inside jokes.

And she gets away with it. Why? Because, as Hoyt notes somewhat ruefully as he fell for her line, Dowd’s got a good defense: she’s a girl she can’t – as someone suggested in regard to “Jamie” be sexist. She – or perhaps they – can say these things the boys can only think. And no one can lay a hand on them – they’re girls talking about girls. It’s a particularly cynical ploy on Dowd’s part but it’s masterfully executed.

But it’s hollow. When Dowd uses female gender images to talk about male candidates – as she does with Obama and did with Al Gore – she’s associating them with weakness. And just because no one’s complained – as she told Hoyt – doesn’t mean it’s not sexist. It is. That’s not playing with gender stereotyping, as Dowd maintains, it’s playing into gender stereotyping. Hoyt’s failure to think through his critique – from all sides – does as well. He treats Dowd with kid gloves and fails to examine one of her great failings as a columnist.

So you can see why it’s hard to know what will become of Jessica DaSilva, a young and clearly ambitious women. Perhaps, in 10 years or so, we’ll be able to read her observations about Chelsea Clinton’s presidential campaign and we’ll get insight, not cringe-inducing snipes about Daddy’s girlfriends and Mommy’s ambition that parade as the “woman’s” voice on politics. Maybe.

But maybe DaSilva will, instead, end up working for Michael and Jaime’s associates and this is the last we’ll hear of her clear, smart voice. Maybe she’ll figure if she has to spend half her time placating the boys on the bus just to have a little peace in the newsroom, she’ll quit or – despite her inclinations – content herself with soft features, not breaking news and strong opinion.

So next time you wonder why there aren’t any women writing opinion journalism or op-eds, consider Dowd and DaSilva and the obstructions – self-made and otherwise – that lie in front of both.

Posted by Chris Nolan at 7:18 AM | Permalink

What Do Women Want?


If Hillary Rodham Clinton had given the speech she gave Saturday conceding the Democratic nomination to Sen. Barack Obama at any point in her campaign – an enthusiastic, honest talk that, finally, told us that she was indeed running to shatter the glass ceiling in American politics – I might have actually paid a lot more attention.

I might have even voted for her.

But Clinton and her campaign spent their time trying to play by rules set down by the men who run television news. And like most big American businesses, television has a basic precept when it comes to women: No matter what, do not complain about sexism because complaining about sexism means you’re a whiner who hates men. Whining is unattractive and hating men, well, that’s just dumb.

Clinton did the old “personal note” dodge (code for “I know this might make you uncomfortable….”) but her speech finally gave an authorative voice to what pretty much every woman working in and around politics knows: It’s a boy’s game. “I am a woman and like millions of women I know there are barriers and biases out there – often unconscious,” she said.

Ya think?

Now, let’s be clear, Clinton lost not because of sexism. She lost for many reasons, among them her husband’s mouthy showboating, her tin ear for racial politics, her lousy get-out-the-vote efforts and, above all, her failure to understand that this really was not the year when a female candidate could build a lawyerly case for her moving back into the White House.

There was and is a need for dramatic change in American politics today. And the Clintons missed it.

They missed in large part because they played a 1992 game and 1992 politics was dominated by television and other mass media outlets who have long barred women from talking about politics. In that environment, the dirty tricks and sex role stereotyping that the Clintons employed to discredit women like Gennifer Flowers worked effectively because they played to the sexism of those covering politics. But that day is fading away. And one of the frustrations that many women had about Hillary Clinton was her inability to see that sexual freedoms and feminism are fused in the minds of many young women.

That’s not a change that’s been reflected in the national conversation about politics, however.

Women working on-line have long been aware of this disconnect and frustrated by its effects. For the most part, “blogger” means “young white man”; they’ve been able to dominate political talk on-line because their popularity is supported and encouraged by Big Media producers, op-ed page editors and the political establishment. Meanwhile, we girls get Glam and “MommyBlogging” and Shine where the bad news is about calories and sexually transmitted diseases, not about economic discrimination against women or the lousy state of prenatal health care for most mothers.

In the past few months, the conversation about who – and how – political discourse is conducted in this country has moved past the “oh, interesting” stage and moved on to something more substantive. Just last month, the Washington Post’s omsbudsperson Deborah Howell noticed – gasp! – that her newspaper’s editorial pages are dominated by older white men. The New York Times’ Nicholas Kristof followed up with a blog post on the subject that’s generated more than 500 comments – five times more than anything else he’s done recently.

Right now, it’s just talk. Progress is going to be slow and painful. Take a look at MSNBC’s self-styled “liberal” Countdown’s lineup of “friends” and you’ll find two women, one of whom is charged with “covering” American Idol. This, of course, is cousin to the network that the Clintons – with reason – singled out for Chris Matthew’s inane questions and observations. (An aside: If Chris Matthews were a woman would she be on TV? With that hair?) CNN’s no better and you really don’t want to rehash Katie Couric’s status at CBS, do you? Me neither.

In issuing her “personal note” on the frustrations of being a working woman in American, Clinton has given voice – finally – to an enormous amount of frustration and outrage. She has, one can hope, set the stage for women to note the presence of discrimination in their workplace and in their profession. She has, one can hope, made it acceptable to ask men – and women, while we’re on the subject – to stop being satisfied with one voice representing the various points of view held by women in America today and to look past gender when hiring and recruiting. And she’s done so with a new tone – and 18 million people behind her.

Clinton’s most fervent supporters are and were right when they note that sexism is an acceptable part of our culture. But their comments about the patriarchy are dated notions of what constitutes acceptable behavior today. They are strident, they do whine and many, many of them do hate men. It keeps them from seeing the gains that have been made.

Clinton did a nice job of sending that sort of rhetoric on its way to the dust bin of history Saturday. Too bad it’s too late to put her in the White House.

Posted by Chris Nolan at 9:00 AM | Permalink

The Bigger Loser


It may seem hard to believe, but the animosity, the vitriolic name-calling, the camera-ready public protests and the massive self-pity that characterized much of San Francisco’s politics throughout the 1990s is going national.

The keystone of this aggrieved campaign style is the idea that virtue should triumph and that all who stand in its way are somehow morally bankrupt or worse. Here in San Francisco, when Green Party candidate Matt Gonzalez ran against San Francisco Mayor Gavin Newsom, his campaign boiled down to one idea: Progressives like me are good, everyone else is bad. You’re good, you should vote for me.

Sounds familiar, doesn’t it? On the national stage, oddly enough, it’s not the long-suffering Progressives who are ratcheting up the volume. It’s the more conservative, corporate wing of the party, led by Sen. Hillary Rodham Clinton.

The theater that passed for public debate over the weekend when the Democratic National Committee met to split its primary baby and allow convention delegates from the rogue states of Michigan and Florida a half-vote each in Denver was familiar to observers of San Francisco politics.

There’s the self-justifying: Sen. Hillary Rodham Clinton has served her country well – she deserves to be president! There was the self-pity: As a female candidate, Clinton’s had to face more scrutiny than Obama! And there were the scare tactics: Clinton, rather than Obama, can beat McCain. Oh, and let’s not forget the wallowing as Clinton supporters rolled their eyes and murmured little asides like, “I wonder what democracy looks like,” in reference to the DNC’s decision. It was all articulated – for better or worse – by the card-carrying protestors, the booing and shouting that punctuated Saturday’s meeting.

What’s really galling – and gall is a key element in this sort of politics – is that Hillary Clinton is trying to position herself as the candidate of “the people.” She can say this because she’s won more popular votes than her rival Sen. Barack Obama and because she may continue – using her campaign’s odd math (caucuses aren’t counted, ballots cast are) – to do so. This is a ham-handed way to position Clinton as the Al Gore of this contest – the person who will get screwed by crooked back-room tactics.

But Hillary Clinton isn’t a woman of the people by any stretch of the imagination. Her husband, the poor boy born in Hope, Ark., who realized the American dream and rose to become president through hard-work, intelligence and and no shortage of political chicanery, used to be “the people’s” representative. Sen. Clinton, born in a respectable Chicago suburb, once a Barry Goldwater supporter, a graduate of Wellesley and Yale, has the populist touch of, well, of a moderate Republican.

The real issue here isn’t that Hillary Clinton is being treated badly because she’s a woman. To paraphrase Geraldine Ferraro: If Hillary Clinton were a white man running the campaign she’s run, he’d have been drummed out of this contest back in March. Clinton’s gender is keeping her in the race, not pushing her out.

The Clintons have simply run a lousy campaign. It would have been a perfectly fine effort in 1992. Today it falls short because it’s a corporate-driven 90’s-style effort to out-spend and out-spin its rivals. Obama’s more embracing style is working much better. And voters are responding.

Those are the mechanics. The Clinton campaign falls short for other, more traditional reasons: the screw-ups by the two candidates involved. Sen. Clinton started her campaign against Obama by dissing the Rev. Martin Luther King. Her husband followed up, equating Obama’s efforts with that of the corrupt and almost universally distrusted Jesse Jackson. She’s ending it by reminding folks that presidential candidates are sometimes assassinated and asserting her popularity among uneducated white folks who aren’t going to vote for a black president. He’s offered to talk her into taking the vice presidency, a trial balloon that only brought – out into the open – the question of what he’ll be doing once the family’s back in Washington.

In the end, it’s hard to avoid a second conclusion, one that undercuts pretty much every statement Clinton’s made about her historic run for the White House. This isn’t about her. It’s about them. If Obama becomes the nominee – with the money-making machinery he’s built, with his support among black voters, with his grace and, oh yeah, the support of the Kennedy family – it’s Bill Clinton, not his wife, who’s the loser. He will no longer be the Big Dog of the Democratic Party. He’ll be another ex-president. Just like Jimmy Carter.

And that undercuts pretty much every other assertion the Clintons are attempting to make. Because if it were really all about her, we wouldn’t be talking to – or about – him.

Posted by Chris Nolan at 9:07 PM | Permalink

No More Bubbles


Finally, they’re talking regulation on Wall Street. And with straight – well, as straight as you can get in an election year – faces. Amazing. And, if you’re a tech investor – or start-up CEO – pretty worrisome.

Secretary of the Treasury Hank Paulson was right when he noted on Monday that the reforms he or anyone else envisions will take years to enact. But, don’t worry, there will be legislation. Anyone who thinks that investment banks, hedge funds and their cousins, private equity firms are going to somehow escape federal government scrutiny is flat wrong. Their time has come. Again.

The preferred vehicle for savings in the U.S. moved from the nice little bank down the street to the brokerage outlet on the corner about 20 years ago. And for the past 10, it’s been pretty clear to anyone who looked closely that rules about how those stock-based outfits ran their business were long over-due. The problem is that no one noticed until things went really bad. Twice.

Here in California, we got a front row seat to all this with the Internet stock bubble. The press releases said it was a period of enormous innovation during which fabulously intelligent people took massive risks with new technology and were reward in keeping with the size of that risk. That’s one way to look at the five years that minted billionaires like, well, Countrywide used to write $1 million mortgages to folks with shaky credit: By the minute.

Here’s another view: The late 1990s were a time when the investment portfolios of large institutions – colleges and universities, for instance, pension funds and charities – expanded in value as so-called average Americans put their savings into stocks (mostly via 401-K and other IRA-like plans) and as a result of good old supply-and-demand, stock prices rose. Richer than they’d ever been, these institutions put lots of money into venture capital funds. The venture capital funds spent like drunken sailors on an extended shore leave. As long as the stock market stayed up, they could reap the rewards of their investments at ridiculous rates of return – 20 and 30 times initial outlays wasn’t uncommon.

Venture capitalist – like mortgage companies – relied on investment bankers who buy and sell stock for a living to help them reap those rewards. And like mortgage brokers, the VCs laid off some risk by selling their wares to someone else, in this case, IPO stock to the public, a price much higher than what they initially paid. As long as the market headed up, up, up – again, because folks were putting money in and buying – the i-bankers were able to aggressively selling stocks of all kinds to all kinds of buyers, some less informed than they should have been.

If all this reminds you, expect for the terms of art, of the U.S. mortgage crisis – a time where anyone could get a loan because it was assumed that the price of real estate would go up, up, up – you are not alone. Everyone understands a mortgage – loan for a house – but not so many people understand the intricate financial arrangement that make today’s equity markets function. A lot of folks on Wall Street don’t understand the mathematical models used to buy and sell credit (or loans) on the street just as a lot of brokers didn’t understand what – exactly did even as they were hawking its wares to middle-aged school teachers with IRAs hoping to retire to Hawaii.

In both cases, those who profited the most were pretty left to oversee the quaility of the products they sold and – at the same time – look out for their customers.

During the stock bubble, the Securities and Exchange Commission made no bones about its inability to keep up with the number of filings it had to process, review and approve. As long as the appropriate statements about risk were included in the paperwork, the stock got sold. Something similar happened at the mortgage banks. As long as everyone signed a piece of paper saying they knew risk was involved – your mortgage rate could increase at any time – the loans got written. If there’s a difference it’s that many of those on Wall Street and in financial institutions around the world, didn’t take a lot of tech companies seriously. Too bad they didn’t feel that way about the bad mortgages that got written.

The end result of all this is going to be something that no one – particularly not tech investors here in California – likes to think about. Can you imagine a Netscape public offering – the company’s main product was given away – sponsored by a financial institution supervised by the Federal Deposit Insurance Corp.? Me neither. So get ready for a more cautious and more prudent system of underwriting risk for sale in the public stock market. From now on, the growth curves for the creation, development and sale of companies – in all industries but particularly in the tech business – are going to get longer and more moderate.

So, if you’re a Silicon Valley VC, the time to think about retiring is right about now. Maybe you should consider a career in politics.

Posted by Chris Nolan at 8:43 AM | Permalink

Female Trouble


Why is it that women in politics present the people who write about politics with such difficulty?

Sadly, I’m not talking about Sen. Hillary Clinton’s run for the White House. No, I’m talking about the New York Times, Sen. John McCain and a lobbyist you hadn’t heard “boo” about until last week and the silliness with which many of those writing about politics descend to whenever they have to deal with s-e-x.

The paper has come under attack for “hinting” at an improper relationship between McCain and a very pretty blond lobbyist named Vicki Iseman. It helpfully ran her photo so we could judge – cynically, for ourselves – if she was someone we’d sleep with. The sad thing here is that if the editors at the Times weren’t as willing engage in the sort of sex-role stereotyping that makes Washington the source of constant ridicule for those of us in the real world, they could have avoided this whole mess.

Here’s what the Times could have said in its story:

“Aides to the Senator became concerned about his relationship with Ms. Iseman, not because they suspected he was having a sexual relationship with her but because they worried others might draw that conclusion – fairly or not – and that speculation could cripple his political ambitions. Ms. Iseman, tall and blond, with an engaging smile bears a resemblance to Cindy McCain, the Senator’s wife.

“She’s an attractive woman and he’s a powerful Senator and you know how that’s often translated,” said John Weaver, the former McCain aide who says he talked with Ms. Iseman, warning her away from increasing contact with Sen. McCain.

Matter raised, matter addressed directly. Matter considered. You know, like grown-ups.

Instead, because of sensibilities of its editors or, even worse, what its editors (wrongly) think of as the delicate sensibility of its female readership, the Times had to twitter around like a bunch of high school cheerleaders, stepping all over a decent story about the role that lobbyist have played in the political career of a man who has sworn to opposed “special interests”. Ya gotta wonder if any of those guys have ever been to a college mixer. And then you gotta wonder: Just how dumb do they think we women are when it comes to men, politics, power and sex?

The issue, of course, isn’t that McCain was having an affair with a pretty blonde lobbyist (for the record, he probably did). The issue the larger story attempted to address is actually an interesting one having to do with the role that money and lobbyists – which go together like chocolate and peanut butter – play in American politics. McCain, as the story does a wonderful job of describing, may be the sworn enemy of lobbyists but, like pretty much anyone in the U.S. Senate, he can’t really defend that position as well as he’d like us to think.

And the Times has in its story muddied the water in McCain favor. The story is now about the story of allegations of hanky-panky, not the ways in which McCain may have let his actions contradict his rhetoric. No wonder the Republicans ares having a field day: This is a fight they know how to win. My God! My God! There’s VIRTUE at stake!!!!

So who do we blame for this nonsense? Well, it pains me to say it but we gotta blame the feminist prudes who clutter up America’s conversation about gender. You, Maureen Dowd, I’m talking to you (again!). You, too, Caitlin Flanagan and, of course just this month The Atlantic Monthly found us a new wet-blanket for girlie fun Lori Gottlieb, who wants us to all marry, pronto. The prudes want to be wanted for their brains, not their looks, even if that’s an impossible ideal that, honestly given their unrealistic ideas of what constitutes male companionship, can never be achieved. So we must all tread gently whenever we near their desks. You never know what can set a girl off…..

The problem isn’t Sen. McCain and Vicki – with an “i”! – Iseman, it’s that there are no women’s voices raised consistently in the conversations we have about American politics. And when we do have these conversations, we retreat into some odd version of high school where people are concerned that the “wrong” kind of underwear brands you a slut, where blondes really do have more fun (or claim to) and where nonsense, not clear thinking and direct talk, replaces dialog and conversation.

Posted by Chris Nolan at 4:02 PM | Permalink

WayBack Politics


When they write the history of the 2008 Election, there’s a good chance that Tuesday’s for-the-cameras-only performance by Sen. Hillary Rodham Clinton will be the one used to demonstrate how much things are changing in electoral politics with this election.

Clinton’s rush to Florida to stand in front of a rally clearly orchestrated to display a crowd of happy Democrats for the television news cameras is old school politics of the highest order. There’s the happy candidate, the enthusiastic crowd and the flat-out coded pandering.

In other words, politics as we know it: scripted, televised, aimed mostly at press perceptions and inside baseball.

Still, there was a lot going on in that Davie, Fla. gathering. So let’s break it down.

But what was really interesting was Clinton’s promise to see that Florida’s Democratic ballot counted at the convention in Denver. That’s not what the party has decided. In fact, Florida’s being punished – like Michigan – for moving its primary up early. So why was she making that promise and making it so publicly?


Clinton’s rival, Sen. Barack Obama, didn’t just win South Carolina. He won South Carolina with a healthy margin. He drew black voters and he got lots of support from women. Even better, Bill Clinton’s attempts to turn back the clock to the mid-1980s and bait white voters with not-so-subtle references to the much-despised Rev. Jesse Jackson were solidly rebuffed.

Two days later, Obama turned and said that he thought drivers’ licenses should and could be given to the 7 million or so “illegal aliens” residing in this country. His campaign followed up on that with an endorsement from Sen. Ted Kennedy and one from Caroline Kennedy Schlossberg.

The drivers’ license question is the one that Clinton bollixed up Philadelphia and it means a lot – it’s a formal piece of identification that lets you open a bank account, insure a car, get on a plane – to those folks who have been in this country with out proper credentials. And it wouldn’t surprise me in the least to hear that news was receiving big, big play on Spanish language news outlets and radio stations.

Which means Barack Obama might do a whole lot better in California that the polls currently show.

The Caroline Kennedy endorsement is coming from someone who should be Hillary Clinton’s natural constituent, a wealthy, well-educated women supporting the idea of a woman in the White House. Those women aren’t supporting Clinton, however. In addition Schlossberg’s endorsement comes with the tactic understanding that, were things a bit different, she might be standing next to her late brother who, it was once rumored, wanted to be a New York Senator, following in his uncle Bobby’s footsteps.

The whole thing is a straight off slap in the face to the Clintons.

So is Ted Kennedy’s endorsement. Having the party’s senior statesmen offer support is cover – think large, shady oak, hot summer day – for any elected Democrat in the country to break party ranks and support Obama. This is very important for the so-called “super delegates” – elected officials within the party who have for reasons too numerous, too valid and too complicated to outline here – a series of beefs, large and small with Bill and Hillary Clinton.

Which means that Barack Obama is going to start picking up endorsements from politicians who can help him with on-the-ground campaign logistics.

The bigger problem with Clinton’s Florida appearance, however, is how mechanical it feels. Swooping in to claim a half-hearted victory that, when you get down to it, wasn’t much more than a name recognition contest so the television cameras can show you with a win? The problem is that whole idea is so transparently obvious that, well, it looks half-contrived, half-silly. No one’s fooled.

Which is why Obama might be picking up points with real voters. As the Washington Post’s main press scold Howie Kurtz observed yesterday, Obama doesn’t much care about what the press thinks. Contrast that to former President Bill Clinton’s oft-recording diatribes about how the press is kowtowing to Obama.

All of this means Democrats should brace for a big fight if Clinton decides – if she hasn’t already – to get the convention’s rule-makers to let her count the delegates she won in Florida and Michigan to claim the nomination. That’s the kind of backroom battle at which Bill Clinton excels and that may mean, in the end, that the Democrats support his wife.

Because when it comes to dealing with Bill and Hillary you can never be too cynical. And that’s the real problem with the Clinton’s campaign.

Posted by Chris Nolan at 8:12 AM | Permalink

Move On – Please


If you’re what’s sometimes known as a “woman of a certain age” it’s easy enough to support Sen. Hillary Rodham Clinton’s campaign for president. Or it used to be before she started actually running and discovered – lo and behold – there were others in the race.

These days, the former first lady and her husband are doing a bang-up job of reminding me – since I’m old enough to remember – how annoyingly imperious the two of them are when someone stands in their way. Only these days, the craven campaigning isn’t being played out against a reasonably peaceful background of domestic policy issues. It’s a campaign for a job that really matters at a time when the stakes have not been higher, national and internationally.

In its campaign to regain the White House the Clinton family in the full-on version of its semi-permanent campaign mode is anxious to blame any and every Republican in sight – even one they’ve had to bring back from the dead – for the problems this country has right now.

The problem with this strategy is that Bill Clinton was not a great president. He was a perfectly capable leader. He remains a stunningly gifted politician. But his eight years in Washington weren”t exactly breathtaking. And seeds of some of what’s so very wrong today were planted and took root in those eight years.

Let’s take the crisis one melt-down at a time. We have a war in the Middle East that’s created a constant state of crisis moving from one slightly stable nation – Lebanon – to another – Pakistan. Hillary Clinton voted to give President Bush the authority to invade Iraq. Why? Because, like her husband, notes Christopher Hitchens, she believed that a confrontation with the Baathist regime of Saddam Hussien was “inevitable.” And, like President Bush, she thought that the U.S. power to hold sway in the region would remain unquestioned.

Other Clinton habits – a faith in free markets usually at home in the Republican party – play a role in our current mess as well. The reality is that global markets need global regulation and oversight and the U.S. inability to oversee its own house – from the tech-bubble shenanigans of the late 1990s to the mortgage free-for-all of the past few years – are rooted in a blind and naive faith in the market to police itself. That thinking – free of any serious discussion of consequences – was welcomed into the Democratic party by Bill Clinton.

That’s really the issue at the heart of my renewed disenchantment with the Clinton’s. They won’t try anything too new and they hate to be associated with anything terribly unpopular. Hillary Clinton is a smart and thorough policy wonk. But wonks don’t lead – they implement. And what’s needed now is a daring kind of leadership that’s focused a little less on winning re-election and a little more on innovative solutions to pressing problems.

A few years ago, those of us who opposed the U.S invasion of Iraq needed leadership, rhetoric and speechifying to oppose the administration’s plans. We didn’t get it. Today, what’s needed now is some smart economic rhetoric that assures international markets that the U.S. has its financial house in order and that the nation’s future leader understands global financial markets. Hear any?

Me neither. Instead, Clinton’s offering is criticism of Barack Obama for his observation that Ronald Reagan was good at leading the country and talk about global economic task forces. Listening to her, you’d think it was 1992. She’ll be saying “it’s the economy, stupid” in a few minutes – watch.

The irony here is that Ronald Reagan was good at leading the country – people followed and liked him. If he were alive today he’d have managed to get off one smart quip designed to set the markets at ease. Or watching U.S. banks and corporations take investments from foreign governments he’d have stood up and demanded the same access – tear down those walls – to foreign government banks as those nations enjoy here.

Sadly that sort of thinking isn’t coming from Clinton. No, she’s focused on jobs – which may as Republican candidate John McCain recently suggested in Michigan – never coming back. Or she’s prattling on about voting records and slumlords, hoping – and she will probably succeed – in putting Barack Obama in his place.

Obama, of course, isn’t doing a whole lot better when it comes to ideas about economic policy. But here’s something he has done well on the foreign policy front: Promise something that looks like hope because he’s talking about new and innovative solutions to problems. And while it may not be morning in America – that famous Reagan ad that reassured American voters there were better days ahead – it sure looks better than another eight years of finger-pointing, backbiting, and bickering.

Posted by Chris Nolan at 8:18 AM | Permalink

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