David Leonhardt of the New York Times has an explanation of the financial crisis and the reaction to the bailout bill in Washington that is so clear, one wonders why it took a week for someone to write one.
Could the current crisis lift -- could banks decide they really are missing out on profitable investing opportunities -- without a $700 billion government fund to relieve Wall Street of its scariest holdings? Sure. And is Congress right to fight for a workable program that's as inexpensive and as tough on Wall Street as possible? Absolutely.
But in the end, this really isn't about Wall Street. It's about reducing the risk that something really bad happens. It's about limiting the damage from the past decade's financial excesses. Unfortunately, there is no way to accomplish that without also extending a helping hand to Wall Street. That is where our credit markets are, and we need them to start working again.
The fear and anger that led to people jamming the phone lines of Congress (and crashing its Web site) is certainly understandable. But it also lacks a logical alternative unless one believes the economic forces that affect our wallets don't really exist.
As for the politics of it all, Dan Balz in the Washington Post cuts through the talk show chatter with a scalpel.
The voters will sort out the blame on all this in November. Anger at Washington will feed a hunger for change, and it's likely to fall harder on the GOP as the party that holds the White House. But for the next president and the next Congress, whatever its makeup, Monday's performance should be looked at as an example of what it was, a performance designed to undermine the public's confidence in its elected leadership.
Update 8:41 a.m. Let's add Thomas Friedman to the mix, even if it's just because of this paragraph:
I've always believed that America's government was a unique political system -- one designed by geniuses so that it could be run by idiots. I was wrong. No system can be smart enough to survive this level of incompetence and recklessness by the people charged to run it.
By way of Ohioan Corrie Bergeron, we're alerted to a little national publicity for our fair state that doesn't involve an anemic baseball offense.
Popular Mechanics is out with a feature story today on the new I-35W bridge.
The story behind the story of this 10-lane, 504-ft bridge is one of the most impressive infrastructure projects of the decade--the complete replacement of a major bridge in little more than a year, months before a deadline that was considered incredibly ambitious. When the team of FIGG Engineering, Flatiron Constructors and Manson Construction won the bid for the project, the date for reopening was set for December 24th of this year. During a visit to the construction site in February, we at Popular Mechanics asked everyone we came across, from taxi drivers to sandwich-shop waiters, whether it seemed like a realistic goal. No one was buying it. Minneapolis winters are too cold for construction, we were told. And why should anyone have faith in U.S. infrastructure when the I-35W had been deemed structurally deficient for years--one of more than 100,000 such bridges scheduled for major overhauls or complete reconstruction?
If only getting righthanded power hitter for the Twins were so easy.(1 Comments)
Barack Obama's trip to La Crosse, Wisconsin today counts as a trip to Minnesota in our "We Matter Index." It has now been updated.
On the economy, Obama used the stump speech for a few specifics. (Here's the transcript of the speech)
** He said he'll stop giving federal money to banks to lend to students for college loans and have the government lend it directly.
** He said he'd go over the budget line item by line item and get rid of programs that don't work "starting with the war in Iraq." He noted Iraq has a budget surplus while the U.S. is checking the couch cushions (my characterization, not his) for quarters.
** He said he'd cut Medicare and Medicaid fraud and eliminate overpayments.
** He called on Democrats to vote for the bailout package (is that directed to Rep. Tim Walz?)
Generally, it seemed like the "old Obama", the 'feel-good' Obama with a few more specifics. It did not focus on McCain-Palin at all.
"There's been a backlash on the negative campaigning on both sides and he's trying to take the campaign to a different level," said David Canon, a professor of political science at the University of Wisconsin-Madison on MPR's Midmorning.
There were also references from Obama's 2004 speech at the Democratic National Convention in Boston, which you can hear here.
Audio from today's speech coming soon. Listen
On the poll front, a Quinnipiac poll finds Obama gaining traction in three key states.(1 Comments)
The remnants of Hurricane Ike hit Minnesota today. Fifty-nine dogs who were abandoned or otherwise made homeless by the hurricane along the Gulf Coast arrived in the Twin Cities this morning and will be put up for adoption in a few weeks. Another 60 will probably arrive next week. Northwest Airlines has donated the space to fly them here.
Laurie Brickley, a spokeswoman for the Animal Humane Society, told me this afternoon that a few weeks ago a team from the Society headed to Texas to help with wildlife in the aftermath of the hurricane. "They were approached by a woman who runs a shelter who said, 'I've got 200 dogs and I'm at my wit's end. There's no power and we're living in tents.'"
Thus, the airlift was born. Minnesota has one of the five largest Human Societies in the country.
"They (the Gulf Coast) don't have the cat overpopulation in that area that we do here," according to Brickley. "They have a dog overpopulation and we don't."
The dogs will be checked for temperament, sterilized, and microchips will be implanted. "They look really healthy," she said.
"Is the clock ticking on these dogs?" I asked.
"Absolutely not," Brickley said. "It's one of the biggest misnomers out there." The Humane Society keeps the dogs until they're adopted. They're not euthanized.
When the dogs are ready for adoption, pictures of the dogs will be posted on the Society's Web site and it'll be noted that they're "Hurricane Ike dogs."
Not directly related but still interesting: This video of a rescue crew during Hurricane Ike, rescuing a dog.
The I-35W bridge "viewing area" is being dismantled. The "sidewalk" on the 10th Avenue Bridge was created shortly after the bridge collapse in August 2007 to accommodate the thousands of people who wanted a look at the site of the tragedy.
Now that the new bridge is built, there's nothing more to see.
According to a city news release:
On Oct. 5, that pedestrian area will be removed and the fourth traffic lane and bicycle lane will be restored. After that time, the only pedestrian access to the bridge will be the sidewalk on the downstream side of the bridge, as it was in the past.
For the next several weeks, drivers on the 10th Avenue Bridge may encounter some temporary lane restrictions as crews carry out additional bridge inspection work. Once that work is finished, full traffic access will be restored.
The city says one of the best places to view the new bridge is along West River Parkway, which is now open in the bridge area. MnDOT is also planning to open "viewing platforms" on both ends of the new bridge.
The 10th Avenue Bridge will close to traffic at 6 a.m. on Sunday through late afternoon.(3 Comments)
Is this fallout from the Northwest-Delta merger and all the associated flight cutbacks? Maybe.
The Dallas Morning News is reporting that Southwest Airlines is to begin service in Minneapolis-St. Paul.
Update 3:45 p.m. - The company has now issued a news release, which says:
"One of the most frequent questions I have been asked over the years is, 'When is Southwest Airlines coming to Minneapolis-St. Paul International Airport?' Today, I can finally give people the answer we have been working toward: 'Very, very soon.' I am confident Southwest will receive overwhelming community support for its new service to the Twin Cities," said Executive Director of Metropolitan Airport Commission Jeff Hamiel. "The Metropolitan Airports Commission stands ready to assist the airline in establishing and growing service to Minnesota."
Initially, flights from here will go only to Chicago Midway, a route that AirTran flew before
it went out of business. (Correction: Dropped route. Not out of business.)
It marks Southwest's first new city since it re-entered the San Francisco market in August 2007. Upstart airlines have had a difficult time making inroads into the market because Northwest Airlines has passenger loyalty and is the hometown airline. But by March, Northwest Airlines will be gone, and the airline that replaces it will be based in Atlanta.
I wrote about the possibility of Southwest coming into the market when the Northwest-Delta merger was announced, via an interview with aviation industry expert Dan Petree at Embry-Riddle. He didn't think it would happen and he sized up the Southwest business strategy:
They don't take on people just for the sake of competing. They take people head-on because they think they can get market share and sustain it. They look for available gates at underserved airports, the right mix of business and leisure travel, they look to establish brands in markets where the existing airline appears to have a weakness. The last head-to-head competition was AirTran's entry into Milwaukee. It was resisted by Midwest but at the end of the day it looks to have been successful by AirTran, capturing a large share of the Milwaukee market. They did that because it made sense for them and they perceived a weakness. And Milwaukee is close enough to Chicago that it wasn't considered a major market anyway. Southwest doesn't go head-to-head against major established networked carriers in heavily utilized airports.
What does this do to fares for Twin Cities travelers? They should go down. While AirTran was flying the route in March, a roundtrip ticket to the same destination was $114. Today Northwest charges $395 for the same flight.
In addition, a recent survey, as reported by the Associated Press, showed fares in the Twin Cities have jumped 17 percent in the last year. There were exceptions to the trend nationwide. Cities served by Southwest had lower overall fares. Take Denver, for instance:
Yet fares in Denver are up only 4 percent over the past year. The reason? Southwest Airlines has been adding flights as United Airlines and Frontier Airlines pull back. By Nov. 2 Southwest plans to have 115 daily flights out of Denver, a nine-fold increase from mid-2007.
Southwest Airlines has already been taking on Northwest head-to-head with some success. In Detroit, a Northwest hub, the airline has flown 19 flights a day. While other carriers are bleeding dollars, Southwest has been making money by locking in fuel prices. It makes a profit and has almost $6 billion in cash.
Says the Detroit Free Press:
With a hedge, the airline enters into a contract with a bank or other financial services firm. The airline bets oil prices will go up; the other side bets they will go down. The loser must pay the difference to the other party.
With oil hovering about around $100 a barrel, Southwest has come out on top. For 2008, it has locked in the price for about 70% of its jet fuel based on oil priced at $51 per barrel. For 2009, it has locked in 55% of its jet fuel based on that same price.
Southwest is "more protected" than any other airline if oil prices remain around where they are now, according to Stuart Klaskin, an aviation analyst at KKC Aviation Consulting in Coral Gables, Fla.
I suppose in the long run this is bad news for St. Cloud, an airport that's been getting big enough -- coupled with a metropolitan area that's spreading far enough -- to be a typical Southwest-type location.
As long as we're on the subject of Midway, a fairly significant development was lost in the news hubbub on Tuesday. Midway Airport is on track to become the first privatized big-city airport.(7 Comments)
Few allegations of plagiarism are as damning as this one, produced by researchers for Canada's Liberal Party against Conservative Prime Minister Stephen Harper. According to a video posted on YouTube this week, a speech Harper made, urging Canadian involvement in the war on Iraq on the eve of the 2003 invasion had sections of it lifted from one made in Australia.
An official with the Liberal Party in Canada says the discovery was made while researchers were looking for "similarities" between Harper and President George Bush.(1 Comments)