Post of the Day
November 9, 2000

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l'union fait la force

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Subject:  This is Capitalism?
Author:  dashmuir

Paytient wrote:

Florida puts Bush over the top. Republicans would control government for first time in 48 years. Bush supporters celebrate Wednesday morning in Austin, Texas, after Bush was proclaimed the winner.

YES... There is a God.

I guess God moves in mysterious ways. It's good to hear from you again, Robert. Any thoughts on ARCC?

As to that bit about God and Dubya:

For a board interested in capitalism, it's worth noting how George Bush made his money. First he lost a bundle for his investors in Arbusto. Then he got bought out by Harken energy as he was going under and, lo and behold, Harken gets a contract to explore for oil in Bahrain. Normally, international exploration goes to firms with lots of experience in international exploration. Harken had barely anything, but they did have an ace in the hole--the son of the president as part of the company. Then Dubya sold his shares as an insider a short time before the stock cratered, but somehow the SEC didn't get the notice until eight months later. Dubya claims that this was because they "lost" it. As a teacher, I am familiar with the "Dog ate my homework" response, but I would think that as a major shareholder in an oil company that owed its lifeblood to the fact that my dad was the President, I would have made sure that the SEC had the information. But then again, this was just after the 80s when the SEC was being gutted by Ronald Reagan, so I'm sure that evading them seemed like fair sport--hey, everyone's doing it!

Essentially, Mr. Bush's first fortune came from being politically connected and then selling out without notifying the SEC. I'm not sure that God would want him for a CEO, but I can't imagine L'Union would be checking off on his management's stellar abilities if he was the CEO of a robustly researched L'Union portfolio choice. In a MarcusOwl report, he gets 0 points on the management team.

Act II. Mr. Bush buys into the Texas Rangers with $600,000. Shortly thereafter, the Texas Rangers pull the sports team shakedown: build us a new stadium or we'll move. Compassionate Conservatism at work, I suppose. So, the voters are cajoled into raising taxes to buy a new stadium--yup, raising taxes. The tax money built the Rangers a new stadium, which massively inflated the price of the Rangers. It's worth noting that the key revenue driver wasn't that they sold more seats with the new stadium, but that they sold more luxury seats, which corporations use to entertain clients and then write off the costs in their taxes. In effect, the Arlington citizens subsidized a stadium which gave corporate entities a whole 'nother write-off at their expense. Oh yes, and Mr. Bush: he netted a cool $14 million on his 600, 000 dollar investment. By the way, the Rangers continued to be an underachieving overpaid bunch, ticket prices soared, and the George W. got his most important foreign policy experience yet in trading Sammy Sosa.

Meanwhile, the Governor who would later run on property rights had no problem using eminent domain in 1991 to drive out unwilling sellers at a lowball price, apparently the first and last time that eminent domain was used in Texas for a private entity. The Rangers' were so predatory in this gambit that a court awarded $4.2 million to the plaintiff ex-landowners. But instead of that coming out of Bush or the Rangers' paycheck, the Rangers were civic-minded enough to pass this cost on to the taxpayers. Compassionate? Hardly. Wealth building? Not unless you were George W. and a close group of friends.

Somehow I'm not convinced that God's hand was involved in selecting George W. Bush. Look, Al Gore will do practically anything to become president--this isn't an argument for him--and you won't get any argument from me that most corporations will do better under a Republican administration, although I do think that deficit reduction and attendant drops in interest rates would be a prudent course.

But let's be perfectly clear about what kind of capitalism Mr. Bush represents. This is the equivalent to making money in early 1990s China--yep, Red-bleeping China--where it's not about creating wealth or efficiency, but about using family influence, government resources, and avoiding transparency in one's actions to enrich oneself. Like brother Neil Bush with his failed S and L, George Bush's business career has nothing to do with the benefits of the free market, but about using "big government" for personal gain. He ain't L'Union material as a businessman, and I have no doubt that each and every one of you would compare wonderfully on an ethical basis.

Maybe he will make a swell president. I have no doubt that our portfolios will like him, but I can't say that he represents anything I find savory about capitalism, if that's even a representative term for his wealth-gathering.

Ok, rant over. I fully respect you guys and expect that I might have a missile launched in my direction. Too bad that $50 billion dollar missile defense system can't hit the broad side of a barn yet, darn.

On another note, Scott, I enjoyed your post on voting. A lot of people did vote yesterday. I myself voted six or seven times (just kidding :)) I invented voting. Wait, I've been up too long, forty hours. You see, I really AM Al Gore. No seriously, in a lot of countries, we never would have gotten this fair of a vote, and we might expect massive bloodshed in a contest over the election. We are fortunate to live in a democracy with all its flaws (like over-representing those pesky Alaskans in the Electoral College :)), and I'm glad that we get to lob e-missives of a civilized sort rather than take the lives of the other side as so many people have experienced, including our ancestors in the Civil War, and the hundreds of people who died fighting for the vote in the postbellum South.

God bless that!


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