Politick

Breaking News from the Vast Right-Wing Conspiracy

Rumor: Cheney to Resign; Rice as V.P.    Hmm, I wonder who floated this? 

After a Washington Post story suggesting that Vice President Dick Cheney’s office is involved in the Plame-CIA investigation, rumors are flying around Washington that Cheney might step aside – and be replaced by Secretary of State Condoleezza Rice. "If that should happen, there will undoubtedly be those who believe the whole thing was orchestrated, another brilliant Machiavellian move by the VP,"” a White House insider told Paul Bedard of U.S. News & World Report. Some observers are whispering that the driving force behind the Rice-for-Cheney scenario is political pundit Dick Morris’ new book Condi vs. Hillary: The Next Great Presidential Race.”  In the book, Morris and co-author Eileen McGann warn that Hillary Clinton will be the next president of the U.S. unless she can be stopped.

GM's Delphi Gambit is Working

In chess, a gambit is the sacrifice of a pawn or piece to gain the initiative and attack. Delphi was until recently a part of GM, and the spinning off of Delphi in 1999 followed by it first going into bankruptcy can be seen as a gambit by GM to test Labor. As they say, Labor blinked, and has now offered a deal to cute wages and benefits, primarily by changing from a defined benefits program to a defined contribution. In a sense, this is karma, as Labor stiffed GM back in 1999 by a lengthy strike at Delphi, and GM blinked. Market reaction to GM's moves today is mixed. GM will still have to sell a controlling part of its cash cow, GMAC, in order to lower GMAC's costs of borrowing. This unwinding of the social compact will continue. The news today should inspire other old-line companies to begin their chess moves, while Labor is compliant.

View From The LA Coliseum During Football Season

After enjoying 111,000 of our closest friends at the Big House in Ann Arbor, we had the pleasure of the company of 90,000 screaming fans in the place you could drop the Big House into: The LA Coliseum, home of the USC Trojans. The Coliseum was build for USC football in the 1920s, and improved for the 1932 Olympics, and recently the 1984 Olympics (noteworthy for turning a profit). It has been used for pro football, pro baseball, and a variety of events in between. Sitting on the 50-yard line, with waitress service - ok, it is still only for hot dogs, popcorn and peanuts - is quite the experience.  It is a hall of champions, and a new one was borne on a Saturday in October. 

Postscript to The End of GM

We noted how GM was in its endgame, and would soon follow the airlines into bankruptcy to remove the burden of high wages, generous pensions and layers of medical benefits. The first shot across the bow of Labor is the bankruptcy of its parts supplier, Delphi. Until a few years ago, Delphi was part of GM. Now it will serve as the stalking horse for the bigger bankruptcies to follow: GM, Ford and other old-line industrial powerhouses. A flood of analysis has noted how this is the end of the unskilled middle class in America. It reflects the unwinding of the social compact since the New Deal, where Government and Labor would layer benefits, wage increases and pensions onto the great engines of American prosperity. In a global economy, with the loss to China and India of the comparative advantage from the Industrial Revolution, the First World will now have to retool. Look for a tumultuous ten years. And for the Democratic Party, the friend of Labor, to remain on the defensive. At least they have an issue to fight for, even if it puts them on the wrong side of history.

Postscript to "War of the Worlds"

We noted how "War of the Worlds" has been a prescient social indicator, each time presaging the major event to come. The book - WWI. The radio show - Pearl Harbor. The first movie - Sputnik and the Space Race. So what does the Spielberg movie presage? The most telling moments in the movie are how quickly order breaks down, and it becomes everyone for themselves. There is no heroism, no sacrifice, other than for one's family. At the time of the post (July), it looked like it was preparing us for another terrorist attack. After the hurricane hit New Orleans, it is now clear what the movie portends: how quickly civil order can break down, even in the US. So what does it presage? Katrina. And the next breakdown.

Peak Oil Redux

Katrina and Rita have changed the dynamics of Peak Oil.  Before the two hurricanes, Yelnick posted a summary of the Peak Oil risk, and said it was at least a few years away.   Tonight at the Commonwealth Club in SF, longtime oil Cassandra Richard Heinberg (author of The Party's Over: Oil, War and the Fate of Industrial Societies) explained why this window until the peak has now seriously shrunk.