pnArt

(Disclaimer:  I’m not in an artist’s co-op and I have no position on House 3686 – “AN ACT RELATIVE TO ELIGIBILITY FOR COOPERATIVE HOUSING CORPORATIONS” )

Recently Arts League of Lowell members received a missive from Artists Under The Dome (AUD) regarding a piece of state legislation deemed by them to be a threat to artists’ co-ops, exhorting Massachusetts artists to take a stand against this legislation. But the message didn’t explain what the threat was; instead it provided a link to the bill. I read the bill but couldn’t figure out the issue so I emailed AUD.

I told them they should have spelled it out for those of us not following this topic or who are not skilled at reading legislative language. I suggested that they should have had the message reviewed by someone familiar with communicating with the general public.

I received a response from the organization assuring me that it had been reviewed by their lawyer and political advisor. I pointed out that those people were, no doubt, familiar with the issue and with reading legislatese so they were not good choices for assessing whether the rest of us could “get it”.

In response the AUD contact said the most remarkable thing I’ve ever heard in a political discussion: “Again thank you for taking the time to email - if you gave me your phone number I would tell you WHY we sent out what we did due to legal reasons- which can not be put in writing.”

Now, silly me, I was under the impression that one reason why we have free speech in the US is so we can discuss political matters. And that opinions about the merits or lack thereof of legislation is not only protected speech, but encouraged. Yet here we have an organization allegedly representing Massachusetts artists in the rough and tumble world of Beacon Hill politics that doesn’t even have the courage of their convictions to put in writing why they object to a bill! They say they’re going to bat for us but apparently their attorney has advised them to take a base on balls because if they swing the bat they might hit something!

Imagine if historical figures felt that way -   “We don’t like the Stamp Act but on the advice of our attorneys we can’t say why” or “Slavery doesn’t agree with me but my lawyer says I shouldn’t get too specific about it”.

The Cowardly Lion reflected:

What makes a King out of a slave?

What makes the flag on the mast to wave?

What makes the elephant charge his tusk in the misty mist or the dusky dusk?

What makes the muskrat guard his musk?

. . . Good questions. Just don’t ask Artists Under The Dome.

It’s never easy to guess what what “the last straw” will be in corporate governance. Boards of directors and American shareholders are a compliant lot and they would rather lose millions, or even billions, of dollars, than vote out a sitting CEO.

Many reasons have been suggested for this. Frequently-cited is the “Costly Firing” explanation – finding a good CEO is hard; interruptions in leadership, especially during a crisis, can exact serious penalties; the new person might be worse - better the devil you know that the devil you don’t; firing a CEO could give the wrong signal to the market and send the stock plummeting, plus there will probably be a big severance package to pay and even the risk of legal action.

An alternative explanation for CEO entrenchment is the old-boy network - executives and fat cats looking out for each other, often with the knowledge that the board is complicit in the various decisions that drove a company into a wall.

But either way, sometimes enough is enough and tomorrow’s Bank of America shareholder’s meeting will be interesting.

I started buying Bank of America about a year ago when it was around $40/sh and paying a fat dividend. Over the years I’ve done well buying strong companies in wounded industries. On the day the markets opened after 9/11 I bought Southwest Airlines, for instance. And Bank of America was a pretty strong bank, and well-positioned, so I bought more as it fell.

But then a funny thing happened. Last September, with Wall Street firms falling to the ground like autumn leaves, Bank Of America acquired Merril Lynch, virtually overnight. An article in the January 28, 2009 issue of Business Week reported that BofA had only 24 hours to review Merrill’s books - and this with a staff called in at 2AM after working a 14-hour day on another crisis.

Last week the reason for this became clear. In testimony to investigators from the New York Attorney General’s office looking into fishy bonus payments, BofA CEO Ken Lewis said that he was pressured by Hank Paulson and Ben Bernanke to make the purchase - and to keep quiet about his reservations.

Let’s reflect on that for a moment. Under law, a CEO is required to disclose to shareholders any information that might materially affect the value or prospects of the company. Not only did Lewis break the law, but according to his testimony he was urged to do so by the two most senior government officials involved in the US economy - the heads of Treasury and the Fed. For the record, both deny that they urged Lewis to cover-up.

But now that Lewis has admitted in sworn testimony that he failed to meet his legal obligations and that he bought a company that he suspected would drag down shareholder value, I cannot fathom why we should keep him on. I proxy-voted my shares against him for the chair a month ago, before the latest news,  and several major institutional shareholders have since indicated their intention to vote against him tomorrow. If he survives tomorrow it’s likely the lawyers and prosecutors will get him before long anyway, but the sooner BofA starts its spring cleaning the sooner it can get its house in order.

( artwork copyright © Peter Nelson )

When my car registration renewal arrived yesterday from the Massachusetts Registry of Motor Vehicles it came with sponsorship. Seven 3.5 by 6.5 inch advertisements - perfect for a business envelope – fluttered out along with my registration form. Known as “buckslips”, these advertising inserts promoted car insurance, oil-change services, a local gym and other businesses trying to reach an audience of automobile owners still in a spending mood despite the economy and the State’s $41 registration fee.

My wife and I take pains to avoid being advertised-to. We keep a recycling bin on the way from the mailbox to the house and junk mail never gets past it. We have strong spam-blocking on our email and ad-blockers on our browsers and we don’t watch TV. But how do you block out the government?

According to the Tax Foundation, Massachusetts has the highest per capita total state debt in the country at over $10,000 per citizen – about three times the national average. Years of political fiscal mismanagement have put the “Commonwealth” into a hole deeper than the Big Dig – one of the major contributors to the problem. In the case of the Registry of Motor Vehicles this has resulted in commercial sponsorship, cutbacks in hours of operation, elimination of license-renewal reminders, and such desperation-measures as printing registrations on cheap paper instead of the traditional card stock at a savings of about 2 cents per driver.

Any revenues gained or money saved do not go to the Registry, but instead are directed to the State’s general funds, which virtually eliminates any incentive for Registry staff or managers to look seriously at cost-saving ideas.

Times are tough all over, and the Registry’s travails are only a small slice of the Commonwealth’s shrinking fiscal pie. But when you’re in hock as deep as Massachusetts, your fiscal wiggle-room is more limited because debt-service is one part of your budget you can’t cut, so everything else must absorb deeper cuts. Programs all over the state are being chopped and local aid has been slashed, so local governments are also cutting and pink-slipping. It’s hard to see the light at the end of the tunnel when the tunnel is closed because its maintenance workers have been laid-off.

After Tony Blair announced his enthusiastic support for the invasion of Iraq he was widely castigated as George Bush’s “poodle”, his “lap dog”, his “puppy”. But it took George Michael’s 2002 music video for “Shoot the Dog” to cement this image in people’s minds. It shows Blair chasing a ball across the White House lawn and then rolling over on his back while Bush rubs his tummy.

So this week when Tony Blair visited Washington on his farewell tour, Bush held a press conference with him in the Rose Garden. And trying to choose just the right adjective to describe the quality he admired most about Blair, Bush praised him, without the slightest hint of irony,  for being so “dogged”.

Many people believe that we might never have invaded Iraq had it not been for Tony Blair’s support. Just yesterday Jimmy Carter, speaking to the BBC added his voice to the long list. (Carter Interview on BBC)

Prior to the invasion Bush desperately needed to add legitimacy to his “coalition of the willing”. Small or token contributions by Spain, Poland, Australia, Costa Rica, and others just didn’t cut it. Blair’s contribution of 43,000 troops for the invasion made it seem like a real coalition and helped sell it to the American public.

But more important than an armored division, several brigades and substantial Royal Navy and Royal Air Force assets was Blair himself. Intelligent and articulate, he was a mover and shaker. He had already transformed the Labour Party, even renaming it New Labour, moving it to the center, marginalizing its old lefties, and gaining a huge majority in Parliament. His policies had streamlined and invigorated the British economy, giving it a growth rate and job generating power that left Germany and France behind.

And in 2002 he was the darling of the American Clintonistas. Not only was he a centrist progressive like Clinton, but his intelligence and eloquence seemed like a tonic for the bizarre policies and statements issuing almost daily from the Bush White House. In December 2002 Thomas Friedman wrote an article in the New York Times entitled “Blair for President”, expressing the admiration of many American liberals: “He’s tough on national security, he has an alternative global vision, people like him and he is a beautiful, reassuring speaker. He’s Bill Clinton without baggage. I’d say he’s a natural.”

Friedman famously supported the invasion of Iraq, a position he has defended, like Blair himself, with ever more tortuous rationalizations. And many other American centrists and liberals did so too, but have since regretted it. I’ll never understand why so many of my fellows supported the invasion but in my conversations with them, Blair and his support for the project were almost always mentioned. (for the record: in 2003 I sent a posting to BBC’s “Talking Point” website saying that “if we invade Iraq we had better learn what the Arabic word for ‘quagmire’ is.”)

We’ll never know whether this tragedy would have occurred if Blair had witheld his support. But all his other accomplishments, most recently an historical agreement in Northern Ireland, will forever be overshadowed by his terrible decision to help America invade Iraq.