Monday, May 2, 2016

The Month That Was - April 2016

Sydney M. Williams

The Month That Was – April 2016

                                                                                                                                          May 2, 2016

“The first of April is the day we remember who we are the other 364 days of the year”
                                                                                                            Mark Twain (1835 – 1910)

What have we come to? Consider April. Alexander Hamilton was allowed to remain on the ten-dollar bill because of a Broadway musical. Curt Schilling was fired from his job at ESPN because he had the audacity to say: “A man is a man no matter what they call themselves.” Harvard College deemed single sex “final clubs” dens of iniquity, but a “sex fair” made brighter an already “enlightened” university? Facing charges of child molestation, but, even so, named ambassador for President Obama’s Latino and Black youth programs, rapper Rick Ross was invited to the White House. Virginia Governor Terry McAuliffe signed an executive order giving the right-to-vote to 206,000 ex-cons. In a muddled statement regarding the desperate financial situation facing New York City hospital’s, Mayor William de Blasio asserted: “There will be no lay-offs, but there will be staff reductions.” Overseas, Norwegian extremist Anders Behring Breivik, who killed 77 people in a 2012 shooting rampage, claimed that isolation in his three-room suite, which includes windows, a treadmill, fridge, TV and Sony PlayStation, violated his human rights and posed a threat to his mental well-being.

Andrew Jackson was never on my short list of great Presidents; so Harriet Tubman, in my opinion, is a good replacement. But the initial instinct of Treasury Secretary Jack Lew was to toss Alexander Hamilton into the distaff sea. That showed either a remarkable ignorance of history, or a deliberate attempt to sabotage the man who first held the office he now holds. It is ironic that the left, which claims that Republican religious and social orthodoxies deprive them of believing in science, should condemn a man whose observation was based on the definitive science of chromosomes. Despite a study she had commissioned that found 87% of campus sexual assaults occurred in University-owned and operated dorms, Harvard’s president Drew Faust found fault with clubs that are independent of the College. She expressed no concern that a University-sponsored fair displaying vibrators, dildos and other sex toys will have any effect on the male libido. During his White House visit Mr. Ross had his ankle bracelet alarm go off, which presumably amused any youths that were present. As for Governor McAuliffe, he later denied to reporters that his motivation was political – the possibility that the almost 4% extra votes might help Mrs. Clinton never crossed his mind! There is nothing I can add to Mr. de Blasio’s verbal contortions. As for the cold-blooded killer Breivik who certainly had mental health problems before going to jail, the Norwegian judge decided his rights were being violated, that he should not be held in isolation…and that the Norwegian people should pay his legal bills. The moral in Aesop’s fable of the frog and the scorpion: real, embedded evil cannot be countered by benevolence.

The planet is out of control. Perhaps it is not greenhouse gasses that is the cause of climate change, but the verbal bovine faeces that vents from Washington, Brussels and other places of political power? Mark Twain must feel a sense of omniscience. Freedom of speech continues to be denied conservatives on campuses. Will it now be denied by Congress? Rhode Island Senator Sheldon Whitehouse has asked the Justice Department to bring civil cases against “climate dissenters,” using RICO statutes. We live in a world that condemns Israelis as racists for their treatment of Palestinians, but condone misogynist Muslim men for treating women as slaves. In Luddite-like fashion, Vermont decided that advancements in biotechnology should not apply to food eaten by “Green Mountaineers.” Up seems to be down; right is wrong; east is west. I am reminded of Roberto Binigni in Down by Law: “It’s a sad and beautiful world.” (Maybe “strange” and “crazy” would be better?) Will we right this ship that is foundering in a sea of dissembled ignorance and moral and cultural relativism, or are we doomed to another dark age?

April may not be, as T.S. Eliot once claimed, the cruelest month, but last month had its share of tragedies. The month saw two earthquakes in Japan and one in Ecuador. Dozens died in Japan and more than 480 in Ecuador. Five hundred refugees from Africa drowned, as their over-crowded boat sank in the Mediterranean. Through the 26th of April, according to Wikipedia, 478 people were killed during the month in dozens of terrorist acts in twenty-five countries on four continents. Hundreds more were wounded. Iran, trying to appear noble in Western eyes, announced that it may send Hamas, a designated terrorist organization, to help fight ISIS, another terrorist group. Vladimir Putin, a progenitor of terror and crime, announced plans for a “several-hundred-thousand strong national guard” to fight terrorism and organized crime! It smacks of Mussolini’s “Black Shirts,” the paramilitary wing of Italy’s National Fascist Party.

Speaking of Mr. Putin, two Russian SU-24 fighters and a Ka-27 military helicopter buzzed the American destroyer, the USS Donald Cook, in the Baltic Sea. Allegedly, they came within 250 feet of the vessel. President Obama conducted a nuclear security summit in Washington that Russia, which has the largest store of nuclear warheads, chose not to attend. The Paris Accord on Climate was signed on Earth Day. The agreement allows countries to set their own targets for reductions in emissions of carbon dioxide and other greenhouse gasses. The targets, of course, are not legally binding. Nevertheless, the deal was applauded by those who had spent millions of dollars (and thousands of tons in carbon dioxide emissions) in achieving this nebulous and unenforceable agreement. Its principal legacy is that it made its participants feel good. Mr. Obama sent an additional 250 troops to Syria to join the 50 already there. They will be stretched – one would think quite thinly – along the three-hundred-mile ISIS front. The trembling of the world’s political classes, when the “Panama Papers” surfaced, reminded one of the fear engendered when Sir Galahad Threepwood, a memorable Wodehouse character, decided to publish his memoirs!

Domestically, the endless election consumed our media: TV’s airtime, bloggers blogs and printer’s ink. Twelve states held caucuses or primaries during the month. Donald Trump and Hillary Clinton lead their respective races; both have more ‘dislikes’ than ‘likes’. Ted Cruz, whose chances for the nomination are slim, named Carly Fiorina as his Vice Presidential choice. One wag suggested, when he loses Indiana he will name his entire cabinet! Mr. Obama released a few Yemeni terrorists from Guantanamo, into the arms of Saudi Arabia – a country that appears to have provided at least some support to the 9/11 hijackers. The Treasury Department put the kibosh on corporate inversions. Mr. Obama called them “one of the most insidious tax loopholes out there.” While he called on Congress to put an end to this practice “once and for all,” his administration, in seven years, has never proposed tax reform that would simplify and lower the world’s highest corporate tax rate. The President has begun the long process of choreographing his legacy, a task made easier by a host of compliant media-types. He has emphasized the killing of bin Laden, but glossed over the rise of ISIS, the devastation in Libya, and he does cartwheels to justify doing nothing in Syria. He speaks of the 14 million jobs created, but never mentions the 10 million that had been lost. Nor does he reference the 15.8 million people who have entered the workforce in the past seven years. He does not mention the two percent annualized GDP growth in the economy over the past seven years – the slowest recovery in the post-War period. Still, in his usual self-effacing manner, he told Andrew Ross Sorkin of the The New York Times: “…we probably managed this better than any large economy on Earth in modern history.” FDR and Reagan might beg to differ. The difference between Reagan and Obama – for that is the comparison, even if not explicitly stated – is that the former believed principally in the individual, while the latter believes primarily in government.   

The Fed, after its April meeting, left key interest rates unchanged. No surprise there. Europe’s economy rebounded, up 0.6%, while preliminary U.S. GDP growth for the first quarter showed a disappointing 0.5% gain, the lowest since the first quarter of 2014. Domestic stock markets continued quiet in terms of volatility, with only a nominal gain for the month. We have now gone 43 days without the Dow Jones Industrial Averages moving up or down more than one and a half percent, the longest stretch in two years. No one should read into that apparent complacency that all is well in “this best of all possible worlds,” as Dr. Pangloss might put it. It is not. The threat of unfulfilled promises in entitlements looms before us. 

Speaking of which, it was announced during the month that four hundred thousand retirees, beneficiaries of the Central States Pension Fund, may soon face drastic pension cuts. The fund is projected to be insolvent in ten years. An attachment to an end-of-year spending bill that passed in December 2014 is cited as the cause. Members of Congress have pled ignorance – they did not have time to read the bill, or they didn’t understand its ramifications! Of course, their own retirement is assured. The real reason has to do with unrealistic promises and an accounting system that overestimates investment returns and underestimates life expectations. As for the Affordable Care Act, United Health, the nation’s largest health insurer, said it would exit Arkansas, Georgia and Michigan and that it would stop selling policies in states where it is losing money. Last year losses associated with ACA were $475 million. Are we headed, like Great Britain, to a single-payer system and the long wait times for medical care they enjoy? To understand the folly of what we face, read “The Road to Confetti,” the lead article in Jim Grant’s latest Interest Rate Observer.

In women’s college basketball, UConn won for the fourth straight season. They blew out Syracuse 82-51. In men’s, Villanova slipped by UNC, in the final three seconds of the game. Englishman Danny Willett won the Masters, when Jason Spieth bogeyed two holes on the back nine of the final round. The Golden State Warriors set an NBA record with 73 wins for the season. For the first time, Ethiopia won both the men’s and women’s Boston Marathon. Also running in the race were two victims from the 2013 Islamic jihadist bombing. In freezing weather, the Yankees lost their home opener to the Houston Astros.

April is filled with historical references. It was on April 18, 1775, that Paul Revere took his famous ride, a ride made famous by Henry Wadsworth Longfellow in 1860. Shakespeare died on the 23rd of April four hundred years ago. His language may be dated, but his characters display behavior patterns, as familiar and relevant today as they were when written. It was on April 14th, 1828, Noah Webster (my four-greats grandfather) published his eponymous dictionary, one copy of which sits on my shelves. April 24th marked the 101st anniversary of the start of the Armenian genocide, the “forgotten genocide,” as it is sometimes called. Five days after Robert E. Lee surrendered at Appomattox on April 9th, 1865 (and four years after the Civil War had begun), Abraham Lincoln was assassinated at Ford’s theater in Washington on April 14th. One hundred and three years later, on April 4th, 1968, Martin Luther King was shot and killed in Memphis. In April 1916, as war raged in Europe and government coffers needed re-filling, Congress passed the first estate tax. What was meant to be temporary became permanent. No surprise there either.

‘Prince,’ born Prince Rogers Nelson, died on April 21 at age 57. Another musician and song writer, Merle Haggard, died on his 79th birthday. Seth Glickenhaus, an iconic investor who toiled in those vineyards for eighty years and who worked on his investments the day he died, passed away at home at age 102. Daniel Berrigan, Catholic priest and Vietnam protester (one of the “Catonsville Nine”) died at age 94, on April 30. As happens with increase frequency, I lost two friends during the month: Dr. Wayne Southwick who died at age 93, and, far too young, John Bent who died at age 79.

April has faded into May. The showers – a hallmark of April – are supposed to bring May’s flowers. They will, I am sure, but if I were a bud I would be looking for the weather to warm a little more before making my appearance, at least in this part of Connecticut!

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