Category Archives: Politics

Private Equity is the Problem

Here are the scariest words for a company in the United States: “I am from a private equity firm and I am here to help.”

The truth is that these firms are not here to help anyone.  The entire goal of a private equity firm is to make a large amount of money in a short amount of time.  Anything that gets in the way of making a lot of money or extending the time frame for making a lot of money will get jettisoned despite any assurances from the practitioners of private equity.

Consider the retail landscape as it is in the United States.  Brick and mortar retail, which is what most of us think of as retail, has been in trouble for a long time in the U.S.  Online companies, led by Amazon, have cannibalized sales and have been considered the prime culprit in the rash of bankruptcies that have plagued the sector over the last decade.  What if the problem was not so much Amazon and the Internet, but private equity?

Payless ShoeSource, a staple of U.S. malls for decades, is expected to file for bankruptcy and prepare for liquidation.  The closure will result in 3,600 stores closing and more than 18,000 people losing their jobs.  The company had declared bankruptcy in 2017, but this appears to be the end of the road.  Why?  In 2012 the company was bought by Golden Gate Capital and Blum Capital Partners in a leveraged buyout that saddled the company with debt from which it could not recover.

Toy R Us, the category killer toy retailer led by an anthropomorphic giraffe, closed for good in 2018 taking with it a lot of childhood memories.  A lot of things changed across the retail toy landscape in the decades since Toys R Us was founded including online sales, shifting play habits, etc. but a lot of the blame can be laid at the feet of private equity.  Toy R Us was taken private in 2005 by a group led by Bain Capital, the same guys in the picture with Mitt Romney looking like villains from Trading Places, in a move that saddled the company with a lot of debt.  As the company was approaching bankruptcy for the final time the $5 billion dollar noose of debt was too much to handle.  Sound familiar?

Gymboree, a retailer of children’s clothing, bought by Bain Capital in 2010 declared bankruptcy this year.  Radio Shack, the venerable retailer of all things electronics, had the final nail driven into its coffin due to onerous conditions imposed upon it by private equity firms Salus Capital Partners and Cerberus Capital Management.  Sound familier?  What company have these firms “taken over” and brought out of dire financial straits into a sustainable business model?

Here is the punch line, private equity firms know that this is the business model and intend to bankrupt these firms all along.  It is how they make money on these deals.  The goal is not to “turn a company around” or “return to profitability.”  The goal is to use a distressed company as a vehicle for debt to extract maximum value over a short time horizon and get the hell out of Dodge in terms of financial exposure.  The legal entity left holding the bag, so to speak, for the financial obligations is a shell of a company denuded of any real value.  Private equity strip mines American businesses and leaves the scene no better than corrupt coal companies across Appalachia.

If you want to know what bedevils the American economy look no further than private equity.

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Something is Missing from the Green New Deal

The Green New Deal is the shiny new thing in the 116th Congress.  This an unalloyed good thing.  We need to be talking about the big ideas that can move this country forward instead of always arguing about small ball politics.

However, I fear that something is missing from every discussion about the contents of the Green New Deal.  Trees.  Rather, forests.  Forests?  You know, those mass groupings of trees.

What about forests?

Forests are the unsung hero of our fight against climate change.  Decidedly analog, forests do not get any of the hype afforded to electric vehicles, solar panels, wind turbines, or even god damned nuclear fusion.  Why?  It is probably because people’s eyes glaze over when someone talks about forests and stereotypes of treehugging hippies run through their minds.

However, before we can deploy enough renewable energy or replace enough automobiles with EVs forests can help us combat the coming climate apocalypse.  Trees absorb carbon dioxide and capture it in their wood fibers.  Trees help to slow down the rainfall preventing erosion, top soil runoff, and even filter rainwater as it falls from the sky through the canopy to the ground.  Trees help to cool the surrounding area.  Trees provide habitat for animals.  Unless you are the most Trumpian right wing reactionary there is no denying the enviable service record of trees.

The key is not to just save the forests that we currently have, but to recover the forests that we have lost.  I propose a nationwide effort to recover as many acres of forest covered land as possible.  There are literally tens of millions, if not hundreds of millions, of acres of land that were once covered with forests that could become verdant again.

In the region known as Appalachia it is estimated that more than 1.5 million acres of mountain top land has been reduced to bare earth and rubble by coal mining over the last fifty years.  Reforestation of these degraded lands is an opportunity to provide much needed jobs in the region, improve the environment, and build a legacy for future generations.  All by planting some trees.

In 2018 California saw almost 1.9 million acres burned in wildfires.  Reforestation of these lands is an opportunity to reduce the ecological impact of wildfires in that state and ameliorate some of the secondary impacts like mudslides in subsequent years.

In Colorado, as a result of the invasive mountain pine beetle, one in 14 trees in the state is dead and almost three quarters of the state’s lodgepole pine stands are impacted.  In the end the infestation and resulting tree die off may leave an area the size of Rhode Island deforested.  Reforestation is an opportunity to reverse some of this damage and restore Colorado’s forests to their majestic beauty.

These are just a few examples, but I could have chosen examples in the Pacific Northwest or northern Minnesota or Arizona.  Almost every state in the United States could benefit from reforestation.

Here is the best part.  Reforestation does not require any new technology or industries to be created.  Reforestation does not require any new government agencies to be created.  We possess the knowledge, organizations, and infrastructure to implement a nationwide reforestation plan.  We just lack the money.

Ahhhh, money.  How much money exactly?  Who knows?  How much land do you want to cover in trees?  Piedmont Land and Timber, a timber management company in Georgia, publishes a very concise breakdown of the costs to reforest an acre:

  • Herbicide application: $125/acre
  • Controlled burn: $60/acre
  • Planting @ 500 seedlings per acre: $74/acre
  • Landowner cost: $45/acre

The total to plant an acre of trees, albeit for timber production, is ~$300 according to a private company.  The largest part of that expense is the application of herbicides which could be eliminated in many cases where the goal is not to develop a stand for logging at a later date.  Regardless, I will use $300 per acre as a baseline for cost.

Let’s use the lands degraded by coal mining in Appalachia as a model.  So, we are working with ~1.5 million acres over several years.  Total cost, assuming $300 per acre, would be $450 million.  Over five years the annual cost would be $90 million.  That is about the cost of a single F-35A fighter plane per year.  Imagine what restoring 1.5 million acres of land would look like from an environmental standpoint.

The money is large when it is looked at in isolation, but it is paltry when compared with so many things in Washington D.C.  Just consider our current president’s pet border wall.  Each mile is estimated to cost $25 million dollars.  We could trade four miles of border wall per year for a restoration of Appalachian forests.  I am willing to make that trade.

Will anyone in Washington D.C. speak for the trees?

Iowa’s Election Post Mortem

Iowa did its part in providing a check on the Trumping of America by flipping two Republican held seats in the House of Representatives.

Abby Finkenauer defeated Rod Blum in the 1st district race.  The result was largely expected nationally and locally as Rod Blum was just about the worst caricature of Washington D.C. you could imagine.  I am no fan of Rod Blum and look forward to being represented by someone who is not as ethically challenged as Iowa’s Splenda version of Donald Trump.

A little less expected was Cindy Axne’s defeat of David Young in the 3rd district.  Polling was kind of all over the place—which has to be considered the new normal in U.S. politics—but Axne ended up winning by a comfortable margin.

The most surprising result of the night, in my opinion, was Kim Reynolds’ victory over Fred Hubbell.  The margin was not large–~33,000 votes—and if I add up the vote totals for the four house races the Democrats’ total was within less than 1,000 votes of Reynolds’ total.  So, there was some serious ticket splitting going on somewhere in Iowa.  It looks like we get a few more years of tax giveaways to multi-national corporations, health care privatization that costs more money, and budget shenanigans in the name of tax cuts for the wealthy.  Welcome to the Republican Party in 2018!

Iowa has become a messy state politically.  It was a harbinger of Barack Obama’s two victories, but it swung hard for Trump in 2016.  Now it appears as if the state is swinging back toward something resembling sanity.  It is my opinion that this bodes well for the election in 2020 as Iowa will be one of the states that is hotly contested despite its low number of electoral votes.  Combine that with the first in the nation caucus for presidential hopefuls and it adds up to an eventful two years ahead of the Hawkeye State.

Unfortunately, Iowa is still stuck with the stain on humanity that is Steve King.  The 4th district came within 8,000 votes of sending Steve King to the speaking circuit of white nationalists and neo-Nazis.  He won, but not by a lot, and I hope that the Democratic Party works hard over the next two years to build up both a candidate and ground game to unseat that racist clown.

Is Rod Blum Desperate?

Some pundits are saying that Rod Blum is cooked in the 1st district midterm election.  Polls are not favorable.  Republicans are pulling support.  He has a pesky ethics investigation to deal with now.  And, never mind, he is basically a facsimile of Trump’s worldview. 

This does not bode well in a midterm election that is seen as a referendum on everything Trump.  What else tells me that Rod Blum is cooked?  His supporters, namely the Republican Party of Iowa, is desperate to paint his opponent as a younger version of Nancy Pelosi.  This is the mailer that I received in the mail earlier this week:

Rod Blum Mailer Page 1.jpg

The Golden Gate Bridge and the dollars floating down are really subtle.  Like Trump mocking people subtle.  I am half surprised that this mailer does not include some mid-90s melded picture of Nancy Pelosi and Abby Finkenauer under the heading “Finkenauer is the Evil Love Child of San Francisco Liberal Nancy Pelosi.”  Hold on, I should not give Republicans any ideas for their next mailer.  By the way, my address is home to two registered Democrats so sending this mailer is a real waste of money.  Not my money, but it is still a waste.

The Republican Party of Iowa is treading a fine line here lambasting anyone for taking political contributions from questionable sources.  In 2016 the Republican Party of Iowa received $9000 from the Trump Organization and $5000 from Koch Industries.  Hmmm, that sounds like about the same amount of money that they are harping on Blum’s opponent for receiving.

Rod Blum and his allies are cooked because their entire strategy is to just say the world “liberal” over and over again.  This is what your college Republicans did when they got too drunk on Goldschlager and wanted to sound like the editorial page of the Wall Street Journal.  The problem is that people actually like progressive ideas if candidates are willing to run in support of them.  It is tough to run on a platform of giving more money to the rich and making everyone else pay by taking stuff away.

Rod Blum Speaks, Sort Of

Over the course of the past few weeks I have been unrelenting in my correspondence with Rod Blum, who happens to be my representative for the 1st District of Iowa in the U.S. House of Representative.  Over the same period of time I have been critical of Rod Blum, in general, due to his relative lack of transparency with voters and his imperial attitude when it came to his own ethical standards.  Granted, when you are living in the world of Trump nothing is beyond the pale.

Well, Rod Blum finally got back to me in writing and it was not a formulaic email thanking me for my interest in whatever topic.  It is as underwhelming as you would imagine:

Thank you for contacting me directly and sharing your concerns regarding the impeachment of President Trump.  It is an honor to serve you in Congress and I appreciate your input on topics such as this.  [NOTE: I did not call for the impeachment of President Trump.  I called for investigations into President Trump’s potentially illegal activity.]

I take any allegations of unethical or illegal activity by public officials very seriously.  Similarly, as a staunch defender of your Constitutionally-guaranteed rights, I believe strongly in the unalienable right to due process.  Our President deserves the same Constitutional rights as every other Americans, and it is unacceptable to deny such rights.  [NOTE: No one is asking to deny the President of the United States his right to due process.  We are asking that Congress do its job and investigate.]

If credible evidence is presented that the President was involved in criminal behavior related to his time in office, I will join my colleagues in denouncing that action and calling for the appropriate proceedings.  My commitment to ethical behavior does not exempt the oval office [sic]

At this point, President Trump has not been even accused of charges by our completely independent judicial branch and I decline to participate in speculation.  I have full faith and confidence in the legal process of this country and I am grateful for the department’s work.  [NOTE: The Judicial Branch is not the same as the Department of Justice, which would be tasked with investigating a crime.  The Department of Justice is headed by someone appointed by the President, thus it is of questionable independence.]

The White House and witnesses have cooperated with the Special Counsel and have turned over more than one million pages of documents.  I am confident that they will continue to cooperate.  [NOTE: There is much more to the potential illegal activity that occurs under the aegis of President Trump than the allegations of collusion with Russia.  My concern runs to a whole host of issues besides potential collusion.]

Thank you again for taking your time to share your opinion on this matter.

Complete and utter garbage.  Rod Blum, or some staffer, regurgitated Fox News approved word salad that in some cases does not even make sense.  This is what you get when your member of Congress is more concerned with pandering to Trump supporters than actually doing his job.

I would ask Rod Blum, who is supposed to do the investigative work to determine if President Trump or anyone in his administration has acted illegally?  During President Obama’s time in office Congress took glee in bringing officials before its committees to “investigate” even the slightest whiff of malfeasance.  Never mind that most charges were little more than Alex Jones approved conspiracy theories fanned by the bloviating of Sean Hannity.

Rod Blum and the rest of the Republican party in control of Congress has abdicated their duty to act as a check and balance on the power of the executive.  It is their marching orders to ignore any damage done to the fabric of this country as long as the judiciary is packed with judges that hew to their partisan line and tax cuts keep going to the wealthy.

Two Approaches to the Environment on the Ballot this Midterm Election

In November we will be given a choice to change the direction of the United States politically.  As is the case every two years the entirety of the U.S. House of Representatives is up for election.  Many of the House districts in the United States are drawn in such a way that partisan incumbents face little challenge to their reelection bids.

In Iowa, however, relatively fairly drawn House districts mean that we have an actually competitive race between incumbent Rod Blum, no friend of this blog, and Democratic challenger Abby Finkenauer.

As an environmentalist I think comparing the candidates’ views on climate change to be instructive as it serves as a point of departure from the Trump wing of America and the rest of the country.

Rod Blum is a climate change denier.  As a member of the arch-conservative and downright wacky House Freedom Caucus Blum has not met an environmental rule or agreement that he did not want to gut like a catfish.  In 2014 he went on the record as a skeptic of climate change.  He supported Trump’s move to withdraw from the Paris Climate Accord.  While in office he has continued to financially benefit from oil and gas stocks while moving to open up public lands to more oil and gas drilling.

The League of Conservation voters nailed it by giving Rod Blum a 2% lifetime score when it comes to national environmental issues.  Honestly, I am quite surprised he managed to drum up 2% given his voting record.  He’s basically Scott Pruitt, but from Dubuque, Iowa.

Contrast that with Abby Finkenauer, who has an entire section of her campaign website dedicated to the environment and clean energy.  Entitled “Growing our Clean Energy Economy and Protecting our Environment” it states that:

I’ll play a similar watchdog role in Congress, and will just as firmly stand up to attempts to weaken key programs and measures that fight climate change, grow our clean energy economy, and protect our environment. Ultimately it’s time we had a representative who fights for Iowa families – ensuring they can live in healthy environments supported by good jobs – rather than standing with corporate polluters and those opposed to science.

A-freaking-men!

I believe that the choice of what is right for Iowa’s 1st district and, thus, the United States is to vote for Abby Finkenauer this November.  It’s just the planet that is counting on you.

What Does Rob Blum Have to Say for Himself?

Iowa’s incumbent 1st District Congressman Rod Blum does not want to answer for his record or, rather, his lack of a record on any issues of substance during his two terms in Congress.

As a member of the arch conservative House Freedom Caucus, Blum has been a rubber stamp for some of the worst impulses of the modern right wing in America.

Tax cuts that bankrupt the Treasury, but enrich the wealthiest Americans?  Check.

Attempting to repeal the entirety of the Affordable Care Act without offering anything in the way of a replacement that would protect average Americans?  Check.

Allowing corruption to run rampant through his own caucus with nary a word of protest?  Check.

Providing no oversight or investigations into the corrupt and unethical Trump administration because a notionally Republican president is a good thing for their own agenda?  Check.

Well, what do you expect from a member of Congress embroiled in his own ethical scandal who trots out the well-worn Trump line that any investigation into a Republican is a “witch hunt?”

Furthermore, Rod Blum will not answer to his own constituents about these and many more issues.  In the past two weeks I have contacted his office on ten separate occasions regarding questions of revocation of U.S. citizens passports, general corruption in the Trump administration, breaches of security protocols at all levels of government, and unethical behavior on the part of the president without a single response beyond a form email acknowledging my contact.

It is time for Rod Blum to do something for the people of Iowa and walk away.  I am sure that the money he secured for himself by cutting his own tax bill will provide enough succor on those cold winter nights in Dubuque.