AIG Bonuses

News that AIG, which received taxpayer bailout money, is giving over a hundred million dollars in bonuses has caused quite a ruckus.   Some are crying foul that taxpayer money is being used to give out bonuses to a company whose crappy decisions caused it to go broke.  Others are saying that the Government cannot simply "abrogate" contracts.

Maybe I'm missing something here or maybe my view is too simplistic... but if the Government didn't bail out AIG and the company basically went busto, then they wouldn't have been able to pay out those bonuses in the first place (instead, all of those bonus receiving folks would be standing on the unemployment line right now).

So, all of this talk about "abrograting contracts" seems like hogwash.  

Compensation packages in the financial sector are based on a broken model; namely if you make succesful investment (i.e., place the right bets) then you will be rewarded handsomely with your bonuses.  On the other hand, if you make moronic choices and bet the farm on the wrong set of horses, you basically lose your job, but you don't have to pay back any of those bonuses.

In any company, you'll have people who are betting on heads and people who are betting on tails.  If heads wins, not only do you give bonuses to those people, but you might lose a lot of money on those people who bet tails.  And vice versa if tails wins.

So, that encourages traders to take investment positions that generally provide positive returns when things are going well, but which have the risk of blowing up beyond recognition.  For all those years when things are going well, traders are making a boatload in bonuses.  But when the doomsday switch is flipped, and the traders lose more in one month than they cumulatively earned up until that point, they just lose their jobs, but don't actually have to pay those bonuses back.

For example, imagine that you are betting on the outcome of a roll of a ten thousand sided die.  If the die comes up between 1-9,999 you win a thousand dollars each time.  If it comes up 10,000 then you lose fifteen million dollars.   It won't come up 10,000 very often and for a long time you are coasting on the thousand bucks you get almost every time.  Until one day, out of nowhere, WHAM -- you get stung.  

And of course, when you consider that a lot of these traders take heavily leveraged positions so that they earn big, but could blow-up even bigger, the damage could easily become catastrophic.

Comments, Criticisms, Flames, Words of Encouragement, etc., always Welcome!

Why the nationalization of banks should and is happening

Paul Krugman has a nice editorial in today's New York Times regarding the nationalization of banks.  Somehow terms like "nationalization" have taken on a negative meaning in today's parlance - when in reality it's partly what we are doing anyway.  There is a tendency for people to get so emotionally attached to certain words and phrases that they will often have completely contradictory opinions about same concept presented using different labels.  I think we're looking at situation like this. 

 I'm presently not a big fan of using stimulus money to "bail" out banks, because all that seems to be happening right now is that the bank's shareholders and executive management seem to be getting bailed out.  It's a win for them, but a loss for taxpayers.  Furthermore, I don't think anyone has a grip on exactly how much money will be needed to really repair the situation.   No one knows what these banks are worth.  

Normally, when you want to determine how much a business is worth, you look at the value of its assets and subtract that from the value of it's liabilities (i.e., take the difference between what the business has and what it owes).   If the liabilities exceed the assets, then the business is considered insolvent.  

Unfortunately, right now banks have a fair number "toxic" assets on their balance sheets.   These are assets that are likely worth far less now than what the bank might have paid for them. For example, if the bank gave out a loan to someone, then it would have a fixed-income asset since the person would be expected to pay the bank some fixed amount of money, say each month, to repay the loan.  If the person to whom the loan was given is no longer in a position to pay it back, then the fixed-income asset associated with the loan is worth a lot less.  

Now, when you give out a loan, there's always a chance that someone won't be able to pay it back.  They way you deal with that is to determine what that risk is, and alter the terms of the loan accordingly.   You would look, for example, at the loan size, the income of the borrower, their credit score, how much money they have in the bank, the collateral they are putting up (e.g., if it's a mortgage, the house being bought is the collateral), and various other factors.   These factors would help you determine how to structure the loan -- for example, a riskier loan might be associated with a higher interest rate.   

That's a simple case, and even there the pooch was screwed since Banks did a bad job of determining the risk correctly (hence the unexpectedly large numbers of people who can't pay back their loans).  Unfortunately, many of the bank's assets are more complex for several reasons.  First, they often involve an amalgamation of different fixed-income assets.  Second, those assets might themselves be more complex -- e.g., having their value derived from other assets.  Third, and perhaps the most important, the underlying risks associated with those assets are not well understood.  If I don't know anything about you, then it's hard for me to determine how risky it would be to give you a loan.   (And many mortgages were given out with dubious information, forged documents, and blatantly false statements about the borrower's financial situation.)

The result is a mess.  

Some of these assets might have value.  After all, despite the record number of foreclosures, there are still many people out their who are able to make their monthly mortgage payments.  There may be others who have hit a temporary rough patch (e.g., getting laid off), but who may be able to begin payments again.   Also, if the collateral on the loan was a house, it's not like the house has zero value should it be seized by the bank in a foreclosure.  It's worth something.   

At the end of the day, though, trying to value these assets is complex.  Without being able to value them, there's no real way to tell what the bank's financial position is.   Now, would you "invest" money in a venture if you don't know what its financial position is?  Probably not.  If you did, you'd better get some damn good terms on that investment (much like a bank would demand higher interest rates from riskier loan applicants).

Getting back to the original message, the fact is that trying to keep these banks private and invest money in them, without having a sense of their financial picture and without getting some amazing terms on the investment, is a risky proposition.  For the reasons I described above, trying to get a clear sense of the financial picture is likely not going to happen.  So, all you can do is demand great terms.  

However, think about that for a moment - what kinds of terms can we demand for our investment?   Typical terms include increased ownership (e.g., owning a larger stake for your investment), control over decision making (so that funds are being spent in a way that you believe is appropriate rather than being spent on corporate jets and executive bonuses), and so on.  Now, think about that one step further.  The investor here is the government.  So what we are talking about is ultimately, the Government getting a larger ownership stake in a bank and being allowed to guide the bank's operations.  Yes, folks, it's nationalization.  

So, when I hear some random senator (GOP or otherwise) balk at the idea of nationalization of banks, I can't help but to think that they are either stupid or that they have a hidden agenda.  We can sugarcoat the language and call it something else like pre-privatization or whatever makes people feel better.  But let's not kid ourselves here.   I think the situation is bleak, and we need to stop beating around bush, and call it what it is so that we can deal with it.

As bleak as it is, the situation is still not hopeless.  America is still a propserous country.  Lots of people still have jobs and most people are still able to make their monthly payments.  The toxic assets on a bank's balance sheet still have value.  But I don't think we are doing ourselves any favors by allowing superficial concerns to get in the way of the rather treacherous road to recovery.

Comments, Criticisms, Flames, Words of Encouragement, etc., always Welcome!

The Bush Recession

Steve Rosenbaum at the Huffington Post wrote a nice piece that explains the policies of the Bush administration that led to our current recession.

I've pasted the text below. My take is that is that the last eight years promoted an environment of unchecked greed. I believe there is plenty of blame to pass around. I blame not only the bankers, loan agents, and CEOs, but also those citizens who took out loans they couldn't afford or who took out home equity lines of credit to buy plasma screen TVs rather than investing more in their own education. Granted there was a lot of misleading going on.

The thing is that greed begets greed. When you have a CEO who takes out more than his fair share of th pie, then that prompts those under him to do the same - for fear that they'll be left out. So, things don't trickle down. Instead, there's a clog. And you end up with a deeper division of wealth in which those at the upper end of the spectrum have an even greater proportion of wealth and a greater number of people find themselves at the lower end, having an even harder time trying to make ends meet.

Don't get me wrong. The US is not the country with the greatest division of wealth out there. Countries like India are worse. So too are places like Africa and Latin America. But therein lies the problem. Countries with the greatest divisions of wealth coincide with those that are considered third world.

I mean do we really want to have the US become a third-world country?? Is that what the end goal is of our government? Sometimes I feel it is. There has been too much focus on bailing out the rich and giving them a greater share of the pie than they deserve, while squeezing out the rest of the population. Finally, we've reached a critical breaking point. One too many straws, and the camel's back has gone "crack"...

I don't know what the solution is to this mess. I suspect that it will involve both near term and long term measures. It won't be easy. Ultimately, though, we need to create a fundamental shift in the consciousness of society. We need to move away from unabashed greed. We need to focus more effort on fundamentally improving education. We need to get back to a mentality of striving to be the best rather than being "content" with being second best. Ultimately, we live in a meritocracy - and that's something that the information age has brought about. No longer are people going to be content buying US products because they were made here -- especially when better products can be bought abroad. Have you looked around you in a parking lot lately? Ever wonder why you see so many foreign cars?

One of the first signs that the world has shifted should have been clear in the story of Google. Here was a company that entered the search engine space, which was already crowded, with only a modicum of capital and no real effort spent on marketing. What they offered was a simple interface and what was at the time the best technology out there. That won out. They are now the dominant players in their space. In contrast, a while back that would never have happened. For example, Microsoft has long peddled inferior products, and have used their market share and essentially monopoly-like muscle to gain profits. The tables have largely turned.

In the information age, people are no longer dazzled by fancy graphics. They are no longer victim to one company's dominance. Instead, they are interested in buying the best possible products. And that's what our economy ultimately needs to do to garner success. Economics is, at its heart, a simple matter of balancing production with consumption. If one is out of whack, then the see-saw will come crashing down. We've exceeded production - but only of crap - and now have a "liquidity" crisis since people aren't interested in consuming it.

It's time we get back on track. Towards not accepting mediocrity. Towards producing worthwhile products, and not consuming more than we actually produce.

... OK, that was a real tangent. As you can see, I have a lot of thoughts on the issue. So, without further adieu, here's the HuffPo article I mentioned earlier. Ultimately, I think it's important to keep in mind that the effects of the last eight years will take at least as long to deal with. Rebuilding after a catastrophe takes a long time. I hope President Obama has the courage to make decisions that lead to longer-term benefits, even if it won't be clear to the average American that those benefits stemmed from his policy choices.

When Barack Obama took office, it was clearly with a vision of a bi-partisan (or in his mind - 'post partisan') administration. This was clearly naive. Perhaps voters want it, and perhaps there are some enlightened politicians who can see the forest for the trees, but for the large majority - the Democratic win in 2008 is little more than a call for the Republicans to regroup and prepare for a full frontal assault in 2012.

If this wasn't clear before the vote on the Stimulus package, it should be clear now.

Already Republican operatives are drafting commercials for the midterm elections. They'll play like this: "Since Barack Obama took office, XX Americans have lost their jobs, XX Americans have lost their homes, and XX Americans have filed for bankruptcy. In light of the failed programs of the Obama administration, it's time to re-elect Republicans on a platform of tax reform, smaller government, and less handouts to the poor and underprivileged."

These commercials will work, because we all know that however successful the stimulus package is, there will be months, or years of economic pain before we start to see the positive effects of these investments.



So, what to do about this?

The answer is, we must name our pain. We must begin to refer to the current recession as the "Bush Recession." We must talk about the difficult, complex, long-term efforts we'll need to all engage in order to reverse the toxic economic environment created by the "Bush Recession."

The Bush Recession didn't happen overnight -- it took 8 years of careful, purposeful, willful actions to create this cycle of economic devastation.

I understand why Obama isn't focused on blaming the Bush administration. He's right to look forward, rather than back. There's way too much to do to spend any cycles placing blame. At the same time, if we don't name our pain, then we're likely to find ourselves fighting off right wing pundits in 2 years, and 4, who try to re-write history and hold the Obama administration responsible for the very things they're trying to fix.

So, with that in mind, let's catalog the drivers that have created the Bush Recession, and make sure we agree that these collective actions happened long before the Obama administration was in the White House.

First, the sub-prime mortgage meltdown. During the 8 years the Bush administration was in charge, we saw a dramatic expansion in available credit to borrowers who where not able to quality for conventional mortgages. This boom in new buyers drove up housing prices, creating a bubble of newfound wealth in the equity of homes, and creating a cycle of borrowing against newly inflated home equity. This bubble was evident to economists and consumers alike, yet in the absence of any legislation or government controls - the trend continued to balloon.

Second, Iraq. The cost of our dramatic increase in military spending provided a huge drain on the Federal Budget, as services that were heretofore part of the military budget became privatized and outsourced. Companies like Blackwater and Halliburton received huge military contracts to provide services - often without bids or oversight. Now, seven years later, we're uncovering fraud, waste, and violations of human rights that reflect both the size of the contracts and the Government's basic lack of ability to oversee or administer these programs. The elixir of privatization and deregulation created an environment that was ripe for fraud and misuse. In hindsight, is this any surprise?

Third, abandonment of a US economic vision. For 8 years the Bush administration focused on security and fear, while any vision of our economic future got put on hold. Gasoline taxes, emission standards or innovation in our core sectors were all either ignored or frowned upon.

Fourth, the environment. As George Bush dragged his heals on any environmental science, things like Kyoto were left unsigned. As former Vice President Al Gore raised the nation's awareness of Global Warming, the Bush Administration sought to minimize and obfuscate the science around climate change. As a result, government funding for new energy was back-burnered, and industries that count on the Government to legislate change and create a level playing field continued to build and produce gas guzzling trucks and automobiles. While world governments have used gas taxes to drive both conservation and innovation, the Bush administration essentially subsidized fossil fuel burning automobiles. The result, our energy industries are desperately behind, and our automotive industry is almost a decade behind in thinking about alternative energy.

Fifth, Wall Street and Banking. For 8 years there has been a dramatic expansion in the services and fast consolidation of what had been separate and in some cases regulated industries. As banking, brokerage, insurance, and financial services companies acquired and merged - the speed of these transactions far exceeded the regulatory ability or resources (not by accident) resulting in such things as credit default swaps that now even seasoned wall-streeters say were hard to understand.

The Bush Recession isn't the result of a single bad decision, or even actions out of our control. For 8 years we've allowed a handful of private industries to operate without oversight or review, with a focus on short term gains, as environmental and world economic issues have loomed large.

The Obama administration will face all the known issues that were the underpinning of the Bush Recession, as well as the need to manage and respond to the emerging crisis. So to suggest that a mere 24 months from the start of his administration, Obama and his Cabinet should be able to show enough progress to push back a full on frontal assault from the Republicans is beyond optimistic, it is impossible. The Republicans have made it clear by voting en-mass against the Stimulus Plan that they are positioning their party to run against Obama - and to essentially do what they can to blunt any potential progress or improvement in the conditions for average Americans that might be held up as a success for the Administration. This kind of partisan politics comes at the expense of average Americans and the country itself. To suggest that after spending 8 years building the largest government, the least oversight, and the largest deficit in history, they will run in 2010 on a platform that is against Stimulus and 'small government' is a clue about just how short a memory the Republican's think average Americans have for the condition of the economy.

We shouldn't let this happen.

It is the Bush Recession. We're deep in the teeth of it now. And we'll need to fight to regain economic stability and future prosperity that once seemed like an American birthright. The Bush Recession didn't happen overnight, and it won't be fixed overnight either.

Republicans should take responsibility for the economic conditions they brought on the country. And that means being part of the solution, rather than standing on the sidelines and looking for a 'Rovian' way to misdirect American anger in a cynical attempt to regain power.
Let's call it what it is -- "The Bush Recession."
!

Comments, Criticisms, Flames, Words of Encouragement, etc., always Welcome!

Bipartisanship Shmipartisanship

I think President Obama got a major reality check during his experience with passing the stimulus package. I don't think he realized just how small-minded and petty the GOP faction of the congress could be.

And to that I say... screw them. Don't elect any of these morons to office again. They are all generally well off, and so they don't really care about the major problems this country is facing. PROBLEMS THEY CAUSED! Problems that resulted from fictitious wars that ate our budget, from business deregulation that fueled greed, from excessive tax cuts that didn't quite trickle down, and from lack of spending on critical needs like education that has resulted in a society of morons -- who can't understand why someone on a $50,000 a year salary shouldn't be taking out a $500,000 a year mortgage, no matter how attractive the loan broker claims the terms are.

The GOP jokers are going around talking about further tax cuts -- and then they claim that the stimulus plan is robbing a generation? Come on now...

Now having said that, I still believe that action (even sub-optimal action) is superior to inaction in this case. The country is in the midst of a shitstorm, and we need to take bold measures to address it. It is sad - truly sad - that GOP'ers would rather see the country go down in flames just so that they could hold on to their empty ideals.

At the same time, I've always believed that when someone's back is to a wall, when they have lost sense of reason, and when they have absolutely nothing to lose -- that's when you should be concerned about what they'll do. And when those people believe that they are standing up for fundamental principles (whether justified or not), then their actions can be downright scary and devastating. Let's think about that -- who else do we know with those characteristics? Remember the Iraq war? We went in there thinking we were going to shock and awe them -- and in the end, only we were shocked and awed. When someone has nothing to lose, then they fight with a fiercefulness that is powerful.

That's today's GOP also. They were damaged during the last election. They are feeling the pressure of losing even more seats next election. They have "principles" they are trying to uphold. So make no mistake - they will take any steps they can to regain footing.

So, I suggest taking an approach that tries to engage them in the debate - but taking the polite and firm stance that this is a courtesy you don't need to extend. Ultimately, this country does not need half solutions just like Sarah Palin's daughter was not half pregnant. We need to act boldly, swiftly, and optimally. We need to spend every taxpayer dollar in a way that can generate economic growth, especially in the medium to long term.

Mr. Obama - I believe in you and your ability to address the problems in this country. I'm sure you realize just how deep those problems are and how much effort will be required to fix them. In the process of trying to take the higher road - in the process of trying to fuel bipartisanship - all I ask is that you don't sacrifice the betterment of this country and its people through policy choices that are suboptimal. More than ever, this country needs you (even though a little less than half the country may not realize it) - so don't let us down!





Comments, Criticisms, Flames, Words of Encouragement, etc., always Welcome!

GOP Opposes Pay Limits On Bailed-Out Bankers

Well - it has been a really long time since I last posted. Things have been really busy - and it was time to make up for all the procrastinating and blogging I did during the campaign. It was certainly nice to revel in the profound and transformational victory of President Obama. Now that the dust is settling, he is perhaps getting a full glimpse of the clusterf*ck that he has walked into. I mean the Bush administration messed up big, real big.

I just saw an article on Huffpo: http://www.huffingtonpost.com/2009/02/06/gop-opposes-pay-limits-on_n_164544.html

It says that the GOP opposes pay limits to bailed out bankers. They claim that it is "un-American" to tell a business how to run. WTF?? I'm not sure what planet they're from or maybe they've taken one-too-many hits from Michael Phelps's bong. When you are giving a business some serious cash -- really throwing it a lifeline - then you have every right to demand that the money be spent appropriately. The purpose of stimulus money is to actually stimulate the economy. And for that to happen, banks need to stop hoarding cash and start making investments in projects that can provide longer-term positive returns on investment (for example, investing in business that a compelling value proposition or lending money to homeowners or potential homeowners who are actually capable of paying it back). The last thing these executives deserve is a fat paycheck after making a slew of moronic decisions that ultimately ran their business into the ground.

One thing I'm sick of is when someone makes a fallacious argument to support a cause - knowing full well that their arguments are nonsense. Lawyers often do this when they are defend clients who they know full well are guilty of some wrongdoing. Politicians do this when they support a particular choice not for the reasons they give, but rather because they were "subsidized" by some lobbyist group or because they are simply looking out for a friend. It would refreshing if the GOP simply said "You know what? I'm against bailout-mandated pay limits on executives because that executive is a friend of mine. I'm just looking out for his best interest not yours." They'd still assh*les in my opinion, but at least they'd be honest.


There is nothing uncommon about making a stipulation regarding an investment. When a venture capital firm makes an investment in a start-up, they often have a long list of requirements for the allocation of those funds, and usually seed the board of directors with principals from the firm to ensure that the funds are being spent appropriately. And so when the company wants to purchase a slew of Aeron chairs, it thinks twice about making that request.

I don't think it's unreasonable for us to expect the same for these banks. Hell, if executives are complaining that they are not getting paid enough, then I suggest we scrap the whole "bailout" plan. Let these banks fail. They deserve it. Now that's capitalism, baby! And that's the most "American" solution.

If anything the bailout money should be used towards better aims and more useful economic stimulus that can bring sustained rewards. For example, it would probably cost less to recapitalize a new set of banks with clean balance sheets. Because these banks's balance sheets are clean, they would be able to figure out the net-worth of their assets, compare that to their liabilities, and actually invest the money that's coming towards projects that can bring positive returns and longer-term economic growth.

Alternatively, stimulus money can be used to increase tax credits for energy-saving initiatives. For example, arrange for the installation of solar panels for any home owner with no up-front cost - and reap a percentage of the savings. The returns on such an investment would be positive in the long run and it would reduce our dependence on foreign energy sources.

In general, I think the problem with this whole stimulus notion as it is currently being promulgated is that we are addressing the symptoms rather than the cause. Investment banks engendered a culture of greed that has resulted in them losing their shirts. We can give them new shirts, but that doesn't mean they'll be less greedy. American automakers mostly make crappier cars compared to their foreign counterparts, and given how much we rely on our automobiles, no dose of patriotism would cause me to consider getting a less reliable car. We can subsidize the automaker's operations so they have a few more months to live, but that doesn't mean they'll start making better cars.

Now I realize that there are a vast number of complexities, and that I'm largely oversimplifying matters. Be that as it may, I think it should be clear that not a single dime of the stimulus money should go to any one person or entity without a plan that the return on the investment will be positive and that it will lead to a longer-term fixing of our economy.








Comments, Criticisms, Flames, Words of Encouragement, etc., always Welcome!

Something "Fishy" in Alaska?

Shannyn Moore from the Huffington post wrote an interesting article today. I don't know if it will get much mainstream media attention considering Obama's pending press conference and the national interest in his cabinet choices, but this story definitely deserves to be heard.

Basically, there are two serious issuess:

(1) The percentage turnout in Alaska was way lower this year than in 2004 -- which is bizarre considering the historic nature of the election, and the fact that one of Alaska's own on the VP ticket. (Note that voter turnout in across the rest of America was up across the board.)

(2) There was a serious discrepancy between the polls and final outcome (not only in the Presidential race, but also in the other races -- which is really why this issue is important).

With a hotly contested senate race and house race that are still too close to call, this matter is a serious one. If Republican Senator Stevens, who officially became a convicted felon in the midst of the campaign, retains his seat, and then is then expelled by Congress (which will almost certainly happen), there will be a special election -- and you betcha that Sarah Palin will likely grab the chance to run for Senator (and given her overwhelming popularity in her home state, is the odds on favorite to take it down).

Having her catapulted back on the national stage would, in my opinion, be terrible. We are hearing increasing reports of her lack of awareness and readiness. Further, she demonstrated a knack for inciting hatred and division -- and that's the last thing this country needs.

Ultimately, though, the core issue here is Democracy. Every legitimately casted vote should be counted. Voters waited in long lines to have their say, and their voices should be heard.

Without further adieu, here's the article:

Something stinks. Not just an ordinary low tide smell. Not like something you'd blame on the dog. It smells like an infection. For me to plug my nose, I'd have to overlook some curious facts.

In Alaska, more people voted for George W. Bush in 2004 than for Sarah Palin on Tuesday despite an identical 61-36 margin of victory. Yes. Only four years ago 54,304 Alaskans got off their sofas and voted for Bush, but decided to sit home and not vote for Palin in 2008. In turn, I have to ignore the 30,520 Alaskans who felt progressive enough in 2004 to vote for John Kerry, but weren't inspired to vote for Barack Obama. I would have to glance past the 1,700% increase in the Democratic caucus in February, the 20,991 newly registered voters, and the three largest political rallies in Alaska's history. I would also have to forget the people I stood in a long line with to early vote. It would be helpful not to know every other presidential election since Alaska began keeping records has had a larger turn out than the one we just had with our own Governor on the ticket. Try not to remember 12.4% more Alaskans showed up for the August primary as compared to four years ago, before the Palin nomination. Don't think about the Lower 49's record voter turn out this year either. Try to delete the memory file, though difficult, that 80% of us approved of Sarah Palin just two months ago.

Something stinks. You don't care? Obama won. Yes. He. Did! Free at Last! Wait. Democracy demands all of the votes be counted...if you can find them.

In the balance hangs the fate of Alaska's Senate and House seats. We still don't know if we have elected the now convicted felon Ted Stevens, or Anchorage Mayor Mark Begich. We still don't know if Don Young and his million dollar legal problems will defeat former State Representative Ethan Berkowitz and his dreams of Washington DC. Alaska hasn't had Democrat representation in Congress since Mike Gravel lost his senate seat in 1980.

Four years ago, 313,592 out of 474,740 registered voters in Alaska participated in the election-a 66% turnout. Taking into account 49,000 outstanding ballots, on Tuesday 272,633 out of 495,731 registered Alaskans showed up at the polls; a turnout of 54.9%. That's a decrease of more than 11% in voter turnout even though passions ran high for and against Barack Obama, as well as for and against Sarah Palin! This year, early voters set a new record. As of last Thursday, with 4 days left to vote early, 15,000 Alaskans showed up-shattering the old record set in 2004 by 28%! Consider the most popular governor in history-and now the most polarizing-was on the Republican ticket. Consider the historic nature of this race; the first African American presidential candidate EVER! The second woman to ever make a presidential ticket; and she's one of our own. Despite that, we're supposed to believe that overall participation DECREASED by 11%. Not only that, but this historic election both nationally and for Alaska HAD THE LOWEST ALASKA TURNOUT FOR A PRESIDENTIAL RACE EVER!!! That makes sense. REALLY??? Something stinks.

But wait, there's more...

Pre election polls had both Mark Begich-D and Ethan Berkowitz-D solidly beating incumbents Senator Ted Stevens and Congressman Don Young by at least 6-10 points. Stevens is currently ahead by 3,353 votes with 49,000 ballots left to count. Berkowitz, however, is behind by 16,887 votes; a 51-43 margin.

Are we to believe Don Young came from an 8 point average polling deficit to win by 8 points-a whopping 16 point turnaround??? Remember how historic the pundits thought Hillary Clinton's come from behind New Hampshire Primary victory was? She trailed Barack Obama by 9% in the pre primary polls and ended up winning by 2 points. It was called the most "stunning comeback in political history." On Election Night, Don Young topped Hillary Clinton's startling and unprecedented comeback.

Furthermore, there were nearly three thousand Alaskans, (2,783) that voted yet left the hotly contested congressional race blank. In the highly publicized senate race, complete with a nationally covered trial that ended with seven felony convictions for the incumbent, 1,392 Alaskans submitted a ballot and failed to register a vote in the senate race. I'm not sure statistically what that means, but it strikes me as odd that well over a thousand Alaskans would wait in long lines and not cast a vote in either the senate race or the congressional race-especially since there was only one ballot measure. In addition, this particular election had an extra high degree of local interest with Governor Palin on the national stage.

McCain-Palin was ahead in Alaska pre election polling by as much as 55-40. The Haysresearch Poll that came out Sunday indicated that gap had closed to 2.7 points! That poll was certainly consistent with Palin's reverse meteoric fall in popularity within the state of Alaska. In that same Haysresearch Poll released on November 2, Question 2 addressed Governor Palin's positive-negative rating. 11% of Alaskans surveyed said their opinion of Palin had become more positive while 37% indicated they were more negative towards Palin. Yesterday's vote contradicts those polls. McCain-Palin won Alaska 61-36! A 25 POINT SPREAD!!! An identical point spread as the 2004 Election.

Alaska has certainly had our share of election hanky panky. Check out this link to our 2004 election results. There are 40 districts in Alaska. The Anchorage area districts run from District 17-District 32. Scroll down to the bottom of the page and pick any district from 17-32. Pay particular attention to the 3rd column labeled % turnout. Hit the back arrow and select another district. There are more precincts with voter turnout over 100% than under 100%. In other words, many more people voted in Anchorage area precincts than there were registered voters. Clearly, this is not possible.

In 2006, the Democrats filed a lawsuit against the Alaska Division of Elections to release public records needed to verify the 2004 election results. The Democrats also sought to have the Alaska Division of Elections release the raw data for the 2006 election. The State requested several deadline extensions and eventually refused to release the "central tabulator data file" taken from the Diebold-supplied computer used to run the "GEMS" (Global Election Management Software) application. A lawsuit was filed in Superior Court seeking release of the records. The Court eventually forced the State to release the 2004 database. The software was found to contain hundreds of edits after the 2004 election, including as late as July of 2006, prior to the release of the data.

With all that history, and the bizarre anomalies in polling and voting and reports from the field of ballots not being scanned on-site due to broken machines, could this election have been stolen?

The world is watching Alaska's US Senate race. When President-Elect Barack Obama is sworn in on January 20, he will be greeted by a Senate with at least 57 Democrats-three shy of a filibuster-proof majority. And, there are still three hotly contested US Senate races that are too close to call; Georgia, Minnesota and Alaska. Just when we thought we were out of the national spotlight...

I've always said if Democracy was a religion, voting would be the sacrament. I'm wondering if someone stole the body and blood of this election. I'm wondering if the wine isn't poisoned. Take a few whiffs. Breathe deeply. See if you don't come to the same conclusion. Where are the votes? Something stinks at the Alaska Division of Elections.

Comments, Criticisms, Flames, Words of Encouragement, etc., always Welcome!

Oh What a Night

It is hard to believe that we are finally here. That senator Obama is now President Elect Obama. That the same country, which voted in George W. Bush, has now chosen to vote in a skinny black man, with a funny name, and a truly unique story into the Oval Office.

Tonight will go down as a defining moment in history. A moment when we can all be proud of what our country has achieved, and of what it can achieve.

There are those who probably never thought they'd see such a moment in their lives. And there are others who not only kept the hope alive at the right times, but let that hope thrive. What started out as a spark has emerged into a wildfire, and I for one am thrilled to be a part of it.

Members of the Democratic party scored great victories tonight. A few Republicans did the same. But ultimately, the greatest victory falls within the hands of the American people. It is inspiring to be able to look at a President who is truly a roll model, and someone you can tell your children to aspire to be like.

All of that aside, now is not the time to rest on our laurels. The hardest part of the battle is just beginning. We have a short time to prove that the change we hoped for can indeed pay dividends, and that it will take the country in the direction it needs to go. This task will not be easy. Our country is in a far weaker state than we were eight years ago. Not many comprehend the extent of this weakness, but it is profound.

We need to lay the foundations for America's recovery. To set the expectations that no matter how great the person who occupies the Oval office, the overall burden to fix this country's ailments also falls on each one of us; whether we're on Wall Street or Main Street.

To President Elect Obama, I'm proud not only of what you've accomplished, but of the spark you've managed to light in so many of us. I am personally eager to be one more element in your quest to change the way Washington works.

After two years of tireless campaigning on your part, and just a couple of months of my screaming out to get my voice heard, I feel a sense of hope and inspiration that I haven't felt in so long. That sentiment was one I was unsure I'd ever feel again -- and just like it was hard to imagine that we would have been in a society where those hopes were dashed for eight years, it is now a little hard to come to the realization that a terrible era in this country's history his come to an end.

Tonight has been a long night for so many of us. But we will be able to close our eyes and drift off to sleep with a sense of peace and well being that we have not felt in so long. And waking up sufficiently rested, we will forge ahead and play our respective roles in making America great again.


Comments, Criticisms, Flames, Words of Encouragement, etc., always Welcome!