Author Archives: Jon Lowder

Writing Goodly

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By almost any measure I'm not a good writer.  I don't remember any of the grammar I learned in 10th grade, thus I regularly break the rules.  I know, I know, ignorance is no defense but I'm just too lazy to re-learn all that crap and as long as people can understand the point I'm trying to make I'm fine with breaking the rules.

Now I'm not fishing for false praise here. After four years of college and more years than I'd like to think about in the working world I can safely say that I'm a better writer than the vast majority of people I've come across.  I'm also an avaricious reader so I'm pretty confident I know good writing when I see it and I'm equally confident that my writing doesn't come close to what I'd consider strong.  Still, I'm happy that I'm able to communicate effectively with my writing and I know that it's largely because I grew up with a very strong editor in the person of my Mom.

What caused me to think of this is this post by Fred Wilson in which he writes about how he came to writing late in life and how he wants to help his children realize the gift that is effective writing:

But I still struggle to help my children with their written work. I find it easy to help with Math and Science homework. I know how to ask them the questions that lead to the insights that help them answer the questions themselves. But when I read a draft paper that isn't the best they can do, I struggle to help them. I certainly don't want to edit the paper. I want them to edit it. But it's hard to find the words, the strategies, and the ways to inspire them to improve it. I've noticed that the best english and history teachers usually ask their students to hand in a draft, which they mark up, and then the students are asked to write a final version. I think that's a great way to go. I guess I suffer from never having had an editor or an editor's job. I'm just a self taught writer. (Emphasis mine: Jon)

Communication skills are so important in life. The investment I've made in my communication skills over the past eight years is paying huge dividends for me now. I want to help my kids make the same investment, just much earlier in life. I know it will come in handy and I know it will be a great source of pleasure for them thoughout their life.

Believe me, when I was in high school and my Mom reviewed my papers and returned them with more red than black on the page, I didn't feel lucky.  But when I got to college and had papers returned with comments from my professors that said things like, "Your argument probably doesn't merit an 'A', but I was so relieved to get something intelligible that I just couldn't resist giving it to you," I knew that I'd truly lucked out having my toughest editor raise me. 

Fred's right in saying that communication is more important than ever, and while you'd think that the rise of Youtube and other DIY multimedia tools would reduce the importance of the written word I think it has, and will continue to have, the opposite effect. Being able to write means being able to think logically and to organize your thoughts in such a way that you enable others to understand them. Those skills are just as important, maybe more so, in today's multimedia age and I think we do our children a great disservice if we don't give them the tools to communicate effectively.

Mom, if you're reading this, thanks for the gift!

Not Exactly the 1099EZ

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According to the this if you printed out GE's tax return it would be 57,000 pages:

In a November 28 letter to IRS Commissioner Douglas Shulman, Congressman Frank Wolf, a Republican from Virginia, wants to know how many hours IRS employees spent reviewing General Electric’s massive 2010 tax return and what it cost the taxpayers.

Wolf says that, according to an article on the Weekly Standard’s website, if printed out, GE’s 2010 electronic tax filing “would be the equivalent to 57,000 printed pages.” If those pages were stacked, they would stand more than 19 feet tall – 19 feet! (Now that’s a monster if ever I’ve heard of one.)

According to Wolf, “A return of this magnitude was clearly necessary to take advantage of every loophole and earmark in the tax code to avoid paying federal taxes.” (May I note that “every loophole and earmark” in the tax code was put there by the United States Congress.)

BTW, Rep. Wolf has one of the all time great lazy-man signatures. See it here.  Basically it looks like a hastily written "8".  I'm thinking of making mine "9" which should save me many hours over my remaining years…oh wait, I rarely sign anything.  Never mind.

Smitty Gets Well Deserved Award

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I've been fortunate to have had the opportunity to rub elbows with Jeff "Smitty" Smith, he of Smitty's Notes fame, on several occasions and I can tell you that he's one of the nicest, most generous people you'll ever meet.  Yesterday he received the Duke Energy Citizenship and Service Award at the Winston-Salem Chamber of Commerce's annual meeting, and I can't think of anyone more deserving. 

Congrats to Smitty and if you aren't already I highly recommend you become one of his regular readers. 

Reasons to Be Kind of Angry and Scared

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Today's reading brought several stories that have me shaking my head:

From Bloomberg Business Week comes the revelation that in 2008 then Treasury Secretary Henry Paulson gave hedge fund managers advance warning of the rescue of Fannie:

William Black, associate professor of economics and law at the University of Missouri-Kansas City, can't understand why Paulson felt impelled to share the Treasury Department's plan with the fund managers.

“You just never ever do that as a government regulator — transmit nonpublic market information to market participants,” says Black, who's a former general counsel at the Federal Home Loan Bank of San Francisco. “There were no legitimate reasons for those disclosures.”

Janet Tavakoli, founder of Chicago-based financial consulting firm Tavakoli Structured Finance Inc., says the meeting fits a pattern.

“What is this but crony capitalism?” she asks. “Most people have had their fill of it.”

Then there's this story about mortgage servicers getting away with the "perfect crime":

Here’s New Orleans Bankruptcy Judge Elizabeth Magner discussing problems at Lender Processing Services, the company that handles 80 percent of foreclosures on behalf of large banks (emphasis added):

In Jones v. Wells Fargo, this Court discovered that a highly automated software package owned by LPS and identified as MSP administered loans for servicers and note holders but was programed to apply payments contrary to the terms of the notes and mortgages.

The bad behavior is so rampant that banks think nothing of a contractorprogramming fraud into the software. This is shocking behavior and has led to untold numbers of foreclosures, as well as the theft of huge sums of money from mortgage-backed securities investors.

Here’s how the fraud works: Mortgage loan notes are very clear on the schedule of how payments are to be applied. First, the money goes to interest, then principal, then all other fees. That means that investors get paid first and servicers, who collect late fees for themselves, get paid either when they collect the late fee from the debtor or from the liquidation of the foreclosure. And fees are supposed to be capitalized into the overall mortgage amount. If you are late one month, it isn’t supposed to push you into being late on all subsequent months.

The software, however, prioritizes servicer fees above the contractually required interest and principal to investors. This isn’t a one-off; it’s programmed. It’s the very definition of a conspiracy! Who knows how many people paid late and then were pushed into a spiral of fees that led into a foreclosure? It’s the perfect crime, and many of the victims had paid every single mortgage payment.

(h/t to Fec for pointers to those two stories

While those stories are infuriating the next one is downright scary.  Let me say up front that I realize the source for this one is the ACLU blog, but please disregard your personal feelings about the organization and pay attention to the story:

The Senate is going to vote on whether Congress will give this president—and every future president — the power to order the military to pick up and imprison without charge or trial civilians anywhere in the world. Even Rep. Ron Paul (R-Texas) raised his concerns about the NDAA detention provisions during last night’s Republican debate. The power is so broad that even U.S. citizens could be swept up by the military and the military could be used far from any battlefield, even within the United States itself…

In support of this harmful bill, Sen. Lindsey Graham (R-S.C.) explained that the bill will “basically say in law for the first time that the homeland is part of the battlefield” and people can be imprisoned without charge or trial “American citizen or not.” Another supporter, Sen. Kelly Ayotte (R-N.H.) also declared that the bill is needed because “America is part of the battlefield.”

The solution is the Udall Amendment; a way for the Senate to say no to indefinite detention without charge or trial anywhere in the world where any president decides to use the military. Instead of simply going along with a bill that was drafted in secret and is being jammed through the Senate, the Udall Amendment deletes the provisions and sets up an orderly review of detention power. It tries to take the politics out and put American values back in.

UPDATE: Don’t be confused by anyone claiming that the indefinite detention legislation does not apply to American citizens. It does. There is an exemption for American citizens from the mandatory detention requirement (section 1032 of the bill), but no exemption for American citizens from the authorization to use the military to indefinitely detain people without charge or trial (section 1031 of the bill). So, the result is that, under the bill, the military has the power to indefinitely imprison American citizens, but it does not have to use its power unless ordered to do so.

But you don’t have to believe us. Instead, read what one of the bill’s sponsors,Sen. Lindsey Graham said about it on the Senate floor: “1031, the statement of authority to detain, does apply to American citizens and it designates the world as the battlefield, including the homeland.”

There you have it — indefinite military detention of American citizens without charge or trial. And the Senate is likely to vote on it Monday or Tuesday.

If what the piece asserts can happen even comes close to actually happening then I honestly think it's the one action Congress could take that might cause the NRA and ACLU to get in bed together.  Okay that's just plain creepy, but we do live in strange times my friends.

Virtual Education

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My Mom sent me a link to an interesting article in the Washington Post about a company that is partnering with local school systems to set up online learning for kids who don't want the bricks and mortar experience.  There's a lot of info to digest there (graduation rates, varying experiences around the country, etc.) but to me what's of particular note is that while the classes are part of one county or municipality's offerings students from anywhere in the state can be enrolled.  The company appears to target systems from impoverished areas because they get more state money per pupil than if they partnered with more affluent systems.  From the article:

The Virginia venture was a partnership between the traditional schools of Carroll County — a rural county bordering North Carolina — and K12. Children who enrolled in the Virtual Virginia Academy were counted as Carroll County students no matter where they lived.

That was no accident.

State aid varies by school district and follows a formula based on poverty, among other factors. Affluent Fairfax County receives $2,716 per pupil from Richmond, whereas relatively poor Carroll County receives $5,421, according to the state Education Department.

This year, 66 Fairfax students are enrolled in the virtual school. Richmond is paying the virtual school twice as much for those students as it would if they attended neighborhood schools in their own county.

“Clearly, it’s not a logical or equitable system,” said state Sen. George L. Barker (D-Fairfax). “It’s a horrible deal for taxpayers.”

I'm a big believer in modernizing our education system to take advantage of what technology has to offer, and I think anything we can do to shake things up and get people serious about education reform is a good thing, but I think we need to think long and hard about the appropriate role of businesses in delivering that reform.  As a teacher once pointed out to me a business can "fire" a difficult client, but schools don't have that luxury except in the most extreme circumstances.  Education, much like health care, isn't a normal industry.  The consequences of failure are much more dire than they are in the real estate, retail, restaurant, etc. industries and so we have to be very careful to manage the role of private enterprise in delivering those services. I think we've all seen how imperfect our current system is and I think we can all agree there's vast room for improvement, but there's no guarantee that companies like K12 will succeed where public schools have failed and we would be doing ourselves a disservice if we didn't monitor them closely.

Oh, and for what it's worth, I think the single most effective thing we can do to reform our educational system is to fix the broken homes that are feeding broken kids into the schools.  If a child doesn't have someone at home holding them accountable and stressing the value of education then the odds are pretty good that the kid will have negligible success at school.  There just isn't an app for that.

$7.7 Trillion

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If you've wondered exactly how big the bank bailout was during the height of the financial crisis you can now get a much better idea of the scale thanks to details being reported by Bloomberg as a result of its FOIA request. In a word: stunning.

The size of the bailout came to light after Bloomberg LP, the parent of Bloomberg News, won a court case against the Fed and a group of the biggest U.S. banks called Clearing House Association LLC to force lending details into the open.

The Fed, headed by Chairman Ben S. Bernanke, argued that revealing borrower details would create a stigma — investors and counterparties would shun firms that used the central bank as lender of last resort — and that needy institutions would be reluctant to borrow in the next crisis. Clearing House Association fought Bloomberg’s lawsuit up to the U.S. Supreme Court, which declined to hear the banks’ appeal in March 2011.

$7.77 Trillion

The amount of money the central bank parceled out was surprising even to Gary H. Stern, president of the Federal Reserve Bank of Minneapolis from 1985 to 2009, who says he “wasn’t aware of the magnitude.” It dwarfed the Treasury Department’s better-known $700 billion Troubled Asset Relief Program, or TARP. Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year.

“TARP at least had some strings attached,” says Brad Miller, a North Carolina Democrat on the House Financial Services Committee, referring to the program’s executive-pay ceiling. “With the Fed programs, there was nothing.”

And then there's this:

The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue…

…the Fed and its secret financing helped America’s biggest financial firms get bigger and go on to pay employees as much as they did at the height of the housing bubble.

Total assets held by the six biggest U.S. banks increased 39 percent to $9.5 trillion on Sept. 30, 2011, from $6.8 trillion on the same day in 2006, according to Fed data…

Employees at the six biggest banks made twice the average for all U.S. workers in 2010, based on Bureau of Labor Statistics hourly compensation cost data. The banks spent $146.3 billion on compensation in 2010, or an average of $126,342 per worker, according to data compiled by Bloomberg. That’s up almost 20 percent from five years earlier compared with less than 15 percent for the average worker. Average pay at the banks in 2010 was about the same as in 2007, before the bailouts.

There's plenty more to be learned in the article. You really should take the time to read it.

In Praise of Women With Some Mileage

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I found this piece by Andy Rooney via a co-worker's sharing of it on Facebook.  In it he explains why women over 40 are the shizz:

As I grow in age, I value women who are over forty most of all. Here are just a few reasons why: A woman over forty will never wake you in the middle of the night to ask, “What are you thinking?” She doesn’t care what you think…

A woman over forty looks good wearing bright red lipstick. This is not true of younger women. Once you get past a wrinkle or two, a woman over forty is far sexier than her younger counterpart…

Yes, we praise women over forty for a multitude of reasons. Unfortunately, it’s not reciprocal. For every stunning, smart, well-coiffed hot woman of forty-plus, there is a bald, paunchy relic in yellow pants making a fool of himself with some twenty-two-year-old waitress.

Ladies, I apologize.

For all those men who say, “Why buy the cow when you can get the milk for free,” here’s an update for you. Now 80 percent of women are against marriage, why? Because women realize it’s not worth buying an entire pig, just to get a little sausage.

Agreed.