You know what the economy needs? More Grateful Dead!

Back in August, on the 14th anniversary of his death, I did a post titled: RIP Jerry Garcia: The Godfather of social networking

In today speak, Garcia and the Grateful Dead launched multiple, synergistic initiatives to leverage their installed base. He was a visionary leader who understood social networks, marketing and monetization. I’m making him sound like a dot-com CEO! Have I completely lost my marbles? I don’t think so and here’s why…

Seems like I wasn’t that far off after all, as both The Atlantic Magazine and CNBC, the business news network, have done extended pieces looking at the Dead and their business success.

The Atlantic: Management Secrets of the Grateful Dead

The Grateful Dead Archive, scheduled to open soon at the University of California at Santa Cruz, will be a mecca for academics of all stripes: from ethno­musicologists to philosophers, sociologists to historians. But the biggest beneficiaries may prove to be business scholars and management theorists, who are discovering that the Dead were visionary geniuses in the way they created “customer value,” promoted social networking, and did strategic business planning.

Dead Right on Business

The Dead Business Model

Timothy P. Carney on Obamanomics

Timothy P. Carney is the lobbying editor for the Washington Examiner and he joined me last night to talk about his thought provoking new book “Obamanomics“.

Before talking about the book, I had to ask Tim about his amazing experience as a young journalist in Washington DC, working as a protege of the legendary reporter and columnist Robert Novak.

The book itself stands conventional wisdom on its head. Carney argues that Obamanomics is actually good for Big Business, at the expense of almost everybody else.

Just as President George W. Bush, with his bailouts, spending sprees, and new entitlements, abandoned the free market at the behest of Wall Street and drug makers, Barack Obama’s vision of bigger government is also the dream of corporate lobbyists.

Obama’s healthcare reform, stimulus spending, global warming legislation, and auto industry bailouts are ambitious packages of regulations, taxes, mandates, and spending that benefit Big Business — what corporation wouldn't welcome more taxpayer-funded subsidies, regulation that crowds out competition, and government mandates that drive more business to them?

There are other big beneficiaries as well: Politicians, who gain more power; and lobbyists, who gain more influence.

The victims are small businesses crushed by regulations and taxes, taxpayers — especially future taxpayers who will be burdened by the debt financing today’s spending sprees — and consumers, who face higher prices and fewer choices.

What should we call this Big Business-Big Government agenda pursued by President Obama? Although robust corporate-government collusion was hardly invented by the current administration, the U.S. has not seen such a consistent practitioner of corporatism in more than half a century. It's fitting then to name this Big Business-Big Government practice Obamanomics.

What is Pundit Review Radio?

On Boston’s Talk Station WRKO since 2005, Pundit Review Radio is where the old media meets the new. Each week we give voice to the work of the most influential leaders in the new media/citizen journalist revolution. Called “groundbreaking” by Talkers Magazine, this unique show brings the best of the blogs to the radio every Sunday evening from 8-10pm on AM680 WRKO, Boston’s Talk Station.

Two charts, one cup

Much has been written about the motley crue of left wing radicals in President Obama’s administration. The most infamous example is perhaps Van Jones, once so proudly touted as an asset by Valerie Jarrett, he was ousted within days when the American people got wind of what he said and believed. Not much has been said or written, yet, about private sector experience of those surrounding President Obama. These are supposed to be the best and brightest that America has to offer. Looks more like the left and brightest that government has to offer.

Nick Schulz shares this great chart from JP Morgan,

The chart examines the prior private sector experience of the cabinet officials since 1900 that one might expect a president to turn to in seeking advice about helping the economy. It includes secretaries of State, Commerce, Treasury, Agriculture, Interior, Labor, Transportation, Energy, and Housing & Urban Development, and excludes Postmaster General, Navy, War, Health, Education & Welfare, Veterans Affairs, and Homeland Security—432 cabinet members in all.

Schulz observes,

When one considers that public sector employment has ranged since the 1950s at between 15 percent and 19 percent of the population, the makeup of the current cabinet—over 90 percent of its prior experience was in the public sector—is remarkable.

Remarkable is one word for it. Horrifying is another. Clarifying is a third. Why clarifying? Because it brings into relief why every solution coming out of the administration seems to expand the roles and responsibilities of the government at the expense of the private sector. It’s no wonder that the so-called stimulus bill was anything but. A couple of days before signing the bill President Obama said,

“I will sign this legislation into law shortly, and we’ll begin making the immediate investments necessary to put people back to work doing the work America needs done.”

Sen. Mitch McConnell disagreed by saying,

“A stimulus bill that was supposed to be timely, targeted and temporary is none of the above. And this means Congress is about to approve a stimulus that’s unlikely to have much stimulative effect.”

Nine months later, the unemployment rate is 17% higher than the administration’s predictions ( with stimulus passed unemployment would top off at 8.5%, currently it’s 10.2%) and 49 out of 50 states have higher unemployment. The number of jobs created “or saved” by the stimulus bill has become a running joke across the country.

To their credit, President Obama and his team of career bureaucrats have had some successes. For example, when it comes to unemployed per job posting in the top 50 U.S. metro areas, one city stands out above all others. That city, all the way to the left of the chart, is Washington DC. Given who is coming up with the solutons to our economic woes, it is not surprising that the home of government benefits first and most.

And for the dreaded private sector?

Too Big To Fail is too good to ignore

New York Times merger and acquisitions reporter Andrew Ross Sorkin has written the insiders account of what was going on in board rooms and the highest levels of government during the worst of the Wall Street meltdown.

He was supposed to be my guest tonight on WRKO’s Pundit Review Radio but we are bumped for playoff baseball because of the rainout last night. I hope to have him on next weekend because I very much enjoyed the book. Here’s my review.

The access Sorkin has is truly impressive, as is the level of detail in the book. Just how connected Sorkin is became evident at the book’s release party, which included Wall Street’s A-List CEOs and dealmakers. Business Insider’s John Carney wrote,

The party was thrown last night at the Monkey Bar in midtown Manhattan, hosted by Vanity Fair editor Graydon Carter. It was overflowing with Wall Street’s biggest movers and shakers. More than one person remarked that it reminded them of Blackstone chief Steve Schwarzman’s over-the-top birthday party in early 2007. It sure seemed like it is okay for Wall Street to party again.

I couldn’t help but think of a line at the very end of the book, on the final page in fact. Talking about Wall Street a year later, Sorkin observed,

Still missing in the current system is a genuine sense of humility.

Given how connected he is, nobody would know better than him.

The book is written in short bursts of detail about a specific aspect of the crisis, a few pages on Lehman folllowed by a few about Paulson, Geithner and Bernanke, Goldman Sachs, JP Morgan, etc. Each change requires the reader to refocus, think about the big picture and interconnectedness of the problem itself. I’ve read reviews where they found it distracting, I found it just the opposite.

Given his beat at the NY Times, I expected Sorkin to have a gold-plated Wall Street rolodex. What surprised me, and was truly impressive, was the level of detail he had about the frantic meetings that were happening at the highest levels of government. The reader gets a real sense of the problems facing Paulson, Geithner and Bernanke. Given how fast things were happening, and how things ultimately turned out, it is hard for me to be too critical of them. No question, mistakes were made, but I came away feeling that this trio were true public servants doing everything they possibly could to prevent catastrophy.

The Wall Street crowd is a different story entirely. Everyone cites greed as the driving factor behind the meltdown. I got the sense reading the book that the real emotion driving this train was jealousy. Jealously of Goldman Sachs profit machine. Bear, Lehman, Morgan and Merrill all adopted riskier and riskier positions trying to play catch up. They leveraged their balance sheets 30-1. When Sorkin writes about Merrill making $2.6 B in profit “trading its own book” in 2002, making risky investments with the firms money rather than client money, the implication was clear. Short term gains would lead to long term pain.

Not many Wall Street players come away looking very good. However, Sorkin has such detail on the collapse of Lehman Brothers that even Dick Fuld becomes a somewhat sympathetic figure. The one man who deserves calling out for his behavior under pressure was John Mack of Morgan Stanley. With the future of his firm very much in doubt, literally days left perhaps, he received a call from NY Fed president Geithner and Fed Reserve chairman Ben Bernanke. The governments message was blunt, “Market’s can’t open Monday without a resolution of Morgan Stanley.” They were basically ordering Mack to sell the firm to JP Morgan immediately. Mack’s reply was impressive. I made a notation in the margin, “stud”,

“Let me ask you a question: Do you think this is good public policy? There are thirty-five thousand jobs that have been lost in this city between AIG, Lehman, Bear Sterns, and just layoffs. And you’re telling me that the right thing to do is to take forty-five thousand to fifty-thousand people, put them in play, and to have twenty thousand jobs disappear? I don’t see how that’s good public policy.”

For a moment there was silence on the phone. “It’s about soundness,” Geithner said impassively.

Mack closed by saying, “Well, look. I have the utmost respect for the three of you and what you’re doing. You are patriots, and no one in our country can thank you enough for that. But I won’t do it. I just won’t do it. I won’t do it to the forty-five thousand people who work here.”

With that, he hung up the phone.

By contrast, there is John Thain. Moments after the CEOs of the Big 9 firms were told they would be accepting TARP money whether they wanted to or not, Thain raised his hand with a question about how this would impact executive compensation.

The book is loaded with anecdotes and behind the scenes detail. One of best was a classic example of Harry Reid being a partisan jerk. Upon hearing Paulson’s dire request for immediate approval, as in days, for $700 billion dollars, Reid spoke up and said,

“It takes me forty-eight hours to get Republicans to agree to flush the toilets around here.” “Harry,” Mitch McConnell (R: Kentucky), who was deeply frightened by Paulson and Bernanke’s presentation, interjected, ” I think we need to do this, we should try to do this, and we can do this.”

Glad there were some grown-ups in the room representing Congress.

Too Big To Fail really gives the reader a sense of the players, their personalities and the rational behind their decsion making. Sorkin does a great job of describing the stress and tension that these firms, these people, were under.

One final note that demonstrates Sorkin knows how to play hardball himself, were the repeated digs at CNBC blowhard Charlie Gasperino, who also happens to have an insiders account on the way to book stores. I very much enjoyed those digs.

Barney Frank, one arrogant SOB

The excellent financial blog Crossing Wall Street nails it,

Barney Frank was just on CNBC. I’ve started a game of watching at what point Frank goes into his overly dramatic routine that he’s being interrupted and not allowed to answer the question. He does this all the time.

Fortunately, this time he was up against Mark Haines who doesn’t put up with his nonsense. I hope CNBC posts the video. I don’t think Congressman Frank understands that he’s not the chairman everywhere in the world. It’s pretty sad: You put a gavel in some people’s hands and it goes to their heads.

Haines asked a perfectly reasonable question. In Frank’s response, he asked Haines a question to which the anchor responded. This set Frank off. Instead of engaging in the back and forth of a conversation, Frank wastes even more time with his “I can’t answer routine.”

Congressman Frank is bully pure and simple and today he was put in his place.

Learning made easy: Political Math

These days you would think political math involved numbers in the billions, if not trillions. A really cool blog called Political Math is here to make things easy to understand. Obama was all about change afterall, so here they go explaining his promises about the Stimulus Plan versus The Reality.

Jim Pethokoukis on the move to Reuters and Obamanomics

Jim Pethokoukis returned last night to talk about his move from US News & World Report to Reuters and the big initiatives that make up Obamanomics. Jim’s Political Risk blog can be found here. Jim was on a roll tonight, he managed to get off a great line that could only come from a former Jeopardy! champion,

Jim: The federal government is so optimized for effeciency.

Producer Rob: Lean and mean

Jim: You’d be cutting into muscle. Uncle Sam is like one of those ripped body builders, no subcutaneous fat.

What is Pundit Review Radio?
Pundit Review Radio is where the old media meets the new. Each week we give voice to the work of the most influential leaders in the new media/citizen journalist revolution. Called “groundbreaking” by Talkers Magazine, this unique show brings the best of the blogs to your radio every Sunday evening from 8-10 pm EST on AM680 WRKO, Boston’s Talk Station.