Wild Is Esperanza

Esperanza Spalding live in San Sebastian July 23, 2009 playing Wild is The Wind. Some of my other favorite versions of this song were done by Ahmad Jamal (here), Barbara Streisand (here) and Nina Simone (here).

What I particularly like about Esperanza's version is the lengthy bowed introduction. If you don't know the song really well, it's hard to hear what she's doing. Just relax, listen and let her surprise you when the song starts. I love this approach to Jazz (the standard Jazz format, play the song, improvise, play the song and out) is pretty confining. I'm glad she's breaking the mold.

What Do Jazz Musicians Play At Nobel Ceremonies?

On the video above, the bass player is Esperanza Spalding, the drummer is Lyndon Rochelle, the Pianist is Leo Genovese, who is currently touring with Esperanza. This is a live performance in Norway at the Nobel Peace Prize Ceremony. She was selected to play in the ceremony in 2009 by Laureate Barrack Obama. This song is "Espera" from her Esperanza release.

Esperanza Spalding at Austin City Limits

Watch Esperanza Spalding / Madeleine Peyroux on PBS. See more from Austin City Limits.

Last night, Esperanza Spalding made an appearance on Austin City Limits, televised on our local PBS channel (WHA-TV). If you missed it, get a sample in the video clip above. Then you'll be taken to the PBS site, after another commerical (I guess it's not commercial-free TV anymore--who cares, if we get to see Esperanza), for the entire performance! Even if Jazz isn't your music, the visuals at Austin City Limits are great!

Esperanza also played at the 2009 Nobel Peace Prize ceremonies and was selected by Laureate Barack Obama. I'll follow up with that performance in a future post.

Paul Ryan Did It Again!

In an earlier post (here), I pointed out that Paul Ryan, R-WI, was the premier philosopher of the right wing and to anoint presidential candidate Newt Gingrich with this title was a great disservice to Rep. Ryan and to my home state. And, to prove my point, in the video above Mr. Gingrich comes out in support of the new Wyden-Ryan Medicare Plan (here). The video and Rep. Ryan's intellectual achievements should make clear who is the real intellectual power behind the porcelain throne.

Not to pick at details here, but Rep. Ryan's original plan for Medicare (in his brilliant Roadmap for America's Future 2.0) was surely the best way to destroy the only existing form of single-payer health insurance in the U.S. and rid the country of any European or Canadian predispositions to socialized medicine. The original analysis convincingly argued that the real reason Medicare is in trouble is not because Seniors are getting something they don't deserve (a sly sop to the left wing) but because health care costs are rising faster than anyone would have thought back in 1965 when Medicare was founded (read the history here).

From this brutally honest analysis, Rep. Ryan concludes that the simple answer is to shift the costs back to Seniors who have plenty of slack left in their over-generous Social Security checks to cover the rising cost of health care. With one intellectual flourish, the problem was solved.

Unfortunately, the howls of protest from the AARP forced Rep. Ryan to bastardize the intellectual edifice of the Roadmap and convince (here's that power behind the throne again) Rep . Ron Wyden, D-OR, to endorse the bastard child (a softer version that allowed Seniors to stay in Single Payer and, foolishly, not subject their golden years to the whims of the health care market).

Honestly, can't anyone appreciate intellectual elegance? Simple solutions such as Single Payer where payments are capped and health care providers are required to take Medicare patients without discrimination, are simply too ugly when compared to the elegance of invisible-hand solutions. At least Rep. Ryan can take pride in his intellectual achievements.

Neoliberal Crisis, Globalization, Austerity and the Transfer of Debt from Private to Public Sector

A great Italian economists and colleague of mine, Ricardo Fiorito (Ricardo spent a few years in residence at the University of Wisconsin) has suggested (here) that we think about the work of Stephen D. King who wrote a recent article in the Financial Times (here) and also wrote the book Loosing Control. The article in the FT was entitled "The eurozone deal will fail".

King's basic point is that Austerity is no guarantee of lasting economic and financial stability. Much more is at stake and it has to do with the positive and negative aspects of Globalization. There are severe imbalances in the World economy. Current account surpluses in Asia (think China) and the EU (think excess German savings) are having the effect of fueling speculation (hot money moving quickly in and out of countries and the financial fuel for excess debt). Another Wisconsin alumnus, Calla Wiemer has made the same point in a Wall Street Journal Editorial Don't Revalue the Yuan yet. King points out that the West has borrowed too much and now the debt has been transferred to the Public Sector. The consequence will be a long period of austerity that will damage the West.

Here are some of the questions King goes on to ask in Loosing Control:

• We are entering a period of competition for scare resources (think commodities such as oil and grain), a competition between the developing world (Brazil, Russia, India, and China the BRICS) and the West, a competition the West has not had to face in the past. What will be the result? Resource access and ability to rig markets has been essential historically to Western development.
• Why have financial markets become unstable? Has the pursuit of inflation targeting by Western monetary policies become a source of instability?
• If globalization is a triumph of market forces, why are we seeing a resurgence of state capitalism (think China)?
• Economic success in the past owed much to mass migrations. What will the affect of Western anti-immigration policies be especially when free flow of capital is allowed? Economic theory requires that all factors of production move freely for comparative advantage to work.
• Does reform of the international monetary system along the lines of the Eurozone offer a blueprint for monetary reform or a lesson in neoliberal catastrophe?
• Why has inequality increased substantially in the West? What does it have to do with Globalization and unequal income distribution between countries?
• We have reached an unprecedented level of sophistication in economic analysis. Why did economists miss the financial crisis?

As Ricardo has noted, there is a lot to think about in Stephen King's work. A first step would be to step back and view what's happening right now in the world system from the standpoint of globalization.

Santelli's Bad Math: Is The Household Really Bankrupt?

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Today on CNBC, commentator Rick Santelli presented the US Federal Budget as if it was your average American household. The conclusion was that the household is bankrupt. What's wrong with this math?

Family Income $ 23,100

Money Spent $ 36,140

New C.C. Debt $ 13,030

Outstanding Debt $151,140

Total Budget Cuts $ 385

The figures come from the US Debt Clock (here) and are taken from, in order, US Federal Tax Revenue, US Federal Spending, US Federal Budget Deficit, and US National Debt. Total Budget Cuts must have come from some other source.

Now, take a minute and ask yourself "What's missing from these numbers?" Think back to the last time you took out a loan. Unless you had a liar loan (stated income loan), the bank asked for a listing of your assets. On anything but Credit Card (C.C.) loans, you put those assets up as collateral to secure the loan.

Deficit Hawks such as Rick Santelli conveniently forget to include the assets of the United States when evaluating the country's credit worthiness. Think about the National Parks, the Federal highway System, all the buildings, property and vehicles owned by the Federal government, etc. Attempts to estimate that figure have been made (here) and the asset number is usually larger than the outstanding debt, meaning the country is solvent.

Current solvency does not mean that our country's debt level or it's projected growth rate is not problematic. It does mean that Santelli has left something important out of his presentation.

Karrin Allyson Moanin'

I recently heard Karrin Allyson sing Coventry Carol on DirecTV's Sonic Tap Music Channel 815. The cut is from the Concord Jazz Christmas CD. What caught my attention was Karrin's vocals and the guitar player (not sure, might be Howard Alden). She seems to like to work with guitarists, as in the clip above, and the musicianship of the entire ensemble always seems great.

Honorable Jon Corzine Granted Papal Title, becomes Count du Monet

Under Italian law, noble titles can still be given by the Pope (here). Unfortunately, papal titles have not been granted since Pius XII granted titles to John McCormack and Rose Kennedy. However, it is rumored that the practice will be revived for Jon Corzine given his strong support for European Sovereign debt and his heroic performance before a Congressional inquisition (video above). It's also expected that Corzine might be able to make the 2.4 trillion Euro Debt of Italy disappear in the same way he made $1.2 billion in investor funds disappear at MF Global (here). Even though the scale of the Italian debt makes the MF Global shortfall seem small, Corzine is rumored to have said that he was "...up for the challenge".



The noble title to be conferred on Corzine, Count du Monet, was derived from the Mel Brooks movie History of the World Part I (video clip above). Corzine has always been a Mel Brooks fan.

Paul Ryan, Man of Ideas

Republican Presidential candidate Newt Gingrich is typically labelled as a "man of ideas" within right-wing circles. Gingrich, however, can only be considered a second-rate thinker when compared with Paul Ryan, R-Wisconsin. The depth, subtlety and audacity, I hope you will see, of Ryan's thinking has no equal.

Recently, Ryan suggested (here) that the President of the United States be given line-item veto authority. Now, some critics have called this "fakery" (here) because the US Supreme Court in 1998 has already ruled that only a constitutional amendment, not Congressional action, would be able to give such power to the US President (read the entire history here). However, Ryan's ability to out-think and even seduce his intellectual inferiors is really remarkable. Even Russ Feingold, ex-senator, D-WI, has endorsed Ryan's proposal (in the video above). I honestly can't imagine Russ Feingold agreeing with anything that Newt Gingrich would say, but Ryan presents a whole different level of persuasive reasoning.

The Governor of the State of Wisconsin (currently, Republican Scott Walker who realizes that the Wisconsin veto is his secret weapon) enjoys a "quirky" form of the line item veto which has been called the "Frankenstein" veto (here) since it allows the entire intention of legislation to be rewritten with creative editing. So, Wisconsin's experience (here) is quite revealing:

[The Wisconsin line item-veto]... has been used primarily as a tool of policy choice and partisan advantage rather than of fiscal restraint. Based on the Wisconsin experience, the author suggests that a presidential item veto could well be used largely as a resource to gain partisan leverage in pursuit of the President's policy agenda.

Paul Ryan has the intellectual subtlety to reason away his home State's experience with the item veto and bamboozle his intellectual inferiors into drinking the Kool-Aid of fiscal restraint. Gingrich simply does not have this level of intellectual fire power.

Gifts Not To Get Golfers

Since the holiday season is coming and the golfing season is over (at least in Wisconsin), one of my correspondents suggested I pass along an article from the Wall Street Journal titled What to get a Golfer for the Holidays: And What Not To--Stores Are Full of Dumb Gifts He or She Will Never Use; Why a Sweater is Better. For example, pictured above are gifts not to get: Exploding Golf Balls, Golf Club Cooler Caddies, Old Golfer's Towel, Lucky Strike Golf Bowling Game (?), Morning Putt Coffee Mug and Pens shaped like golf clubs. Who buys this stuff anyway? Read the article for better ideas...

Conditionality, Corporate Welfare, and Compensation

Spectrum Brands (stock symbol SPB) recently received a $4M forgivable loan from the Wisconsin Economic Development Corporation. WEDC is a public-private partnership that promotes governor Scott Walker's "Wisconsin is Open For Business Message." The question for this post is whether the $4M was a good investment of taxpayer money?

SPB is a highly leveraged holding company that picks up orphaned consumer brands and tries to bring them back to life. SPB hasn't had a great track record and recently emerged from bankruptcy in 2009. An old video above tells the story. None of the CNBC anchors are with the network anymore and neither is Chairman and CEO Kent Hussey. To emerge from bankruptcy, Hussey noted that the restructuring took out 42% of the population of the company (does this mean jobs?). They still had $800 M in debt out of an initial $1.8 B. Mr. Hussey retired from the company in June 2010. My analysis of their common stock price history (here) doesn't suggest a very bright future.

One interesting aspect of the deal is that the $4M forgivable loan is actually less than the yearly salary of the current CEO, Dave Lumley, who took home total compensation in 2010 of $7.3M (here). Now here's my suggestion for the WEDC: follow the IMF's lead (here) and, instead of offering forgivable loans, provide contingent credit lines, the contingency being that loan amounts are matched by commitments of executive compensation. So, if SPB wants a $4M loan, Mr. Lumley would match that $4M out of his compensation leaving him $3.3M as his yearly compensation.

Now maybe this is an impractical suggestions and maybe $3.3M is not enough salary for a top executive of a highly leveraged holding company. I'm not sure exactly what the senior executives of SPB do to deserve multi-million dollar compensation but this statement from Anthony L. Genito's, SPB's CFO, in the Nov 16 Q4 2011 Earnings Call (here) provides some idea:

As I've said previously, based on the level of NOLs [Net Operating Losses] we expect to be able to utilize, we do not anticipate being a U.S. federal taxpayer for at least the next 5 years. We will, however, continue to incur foreign and a very small amount of state taxes. Cash taxes are expected to approximate $45 million to $50 million for fiscal 2012.

Evidently, evading state and federal corporate taxation in addition to pilling up NOLs is one of the ways senior executives earn their compensation. Another contingency might be that the company pay substantial State taxes during the period they obtain the loan.