Just another word for nothin' left to lose

Mike Bloomberg grew up in Boston, but he pretends to be a New Yorker.

The mayor of New York lives in a ritzy townhouse on the upper east side of Manhattan, but he pretends to be a man of the people and rides the subway down to City Hall every day.

Bloomberg pretended to put his financial information empire into a blind trust when he became mayor, but then he put a deputy mayor in charge of it so he could keep a close eye on his billions.

The mayor told us that maintaining law and order in the nation's largest city was one of his biggest priorities, then he financed a clumsy amendment to the city charter so he could run for a third term. Most of the people who were planning to run for the position dropped out when Mike started rattling his awesome money belt.

Mike has palatial estates in several countries, including Bermuda and Switzerland, but as far as we know he still is an American citizen.

Last week, Bloomberg put his imprimatur on the city's latest scheme to bail out the embarrassing mess it has made of the rebuilding of the World Trade Center site.

For almost eight years now, since Osama bin Laden dispatched his suicide pilots to murder nearly 3,000 people in New York City, the 16-acre site in lower Manhattan has been an empty hole, a gaping wound in the national psyche.

Within a few months after the attack on September 11, 2001, Bloomberg unveiled a grand design for the rebuilding of the World Trade Center site. It included a bevy of modern skyscrapers, a soaring billion-dollar train station designed by Santiago Calatrava, and a somber memorial to the victims of the terrorist attack.

The centerpiece of the planned WTC rebirth was a majestic, gleaming spire of a building that would rise a symbolic 1,776 feet, making it the tallest structure in New York. We were told it would be called the Freedom Tower.

Last week, the city announced it finally has found a primary tenant for the Freedom Tower, for which about 10 stories of steel foundation work has been completed thus far.

Some business entities controlled by the People's Republic of China will move into the new skyscraper, assuming it is completed on schedule on or about the tenth anniversary of the September 11 atrocities.

An outfit called the Beijing Vantone Real Estate Company plans to build the ''China Center'', a combination chamber of commerce and cultural center, on floors 64 through 69 of the Freedom Tower, at the southeast corner of West and Vesey Streets.

''The China Center will be a gateway for Chinese corporations doing business in the U.S. or U.S. companies that want to understand the Chinese culture and do business there,'' said Xue Ya, project director for the China Center.

At the same time that it announced the deal for the China Center, the Freedom Tower's landlord -- the Port Authority of New York and New Jersey -- also declared that the new building will not be called the Freedom Tower.

Henceforth, the property will be known by its legal address, One World Trade Center, the Port Authority said.

Of course, this is strictly a coincidence.

Bloomberg and other city officials insist that erasing the word ''freedom'' from the name of the tower has nothing to do with the fact that its newest tenant represents an entity that continues to steadfastly deny any semblence of freedom to 1.3 billion people on this planet.

They were applauded by The New York Times, which suggested on its editorial page that suitable tenants at the building formerly known as the Freedom Tower ''might balk at a name with such potent ideological symbolism.''

Besides, Bloomberg said, New Yorkers will call the building whatever they want. ''They don't call Sixth Avenue the Avenue of the Americas, do they?'' he helpfully pointed out.

Is that a faint smile we see on the face of the wax dummy in the glass case in Lenin's Tomb? After he murdered the czarÕs family, Lenin famously said ''the capitalists will sell us the rope we hang them with.''

Since Mike says we can call the new building whatever we want, we're going to tip our hat to Chinese culture and the courageous city officials who felt free to desecrate the place in New York where so many people took their last breath of freedom.

We'll call it ''The Kowtower.''

As in kowtow, an ancient Chinese word that, according to Mr. Webster, means:

''To kneel and touch the forehead to the ground in expression of submission, as formerly done in China.''

''To show servile deference.''

''An obsequious act.''

That about says it all.

The man who saw the future

Ten years ago, before the collapse of the tech bubble and the inflation of the housing bubble, nearly everyone in Washington was convinced that Wall Street could do no wrong. The movers and shakers believed that if the government would just get out of the way of the men with the Midas touch, America's domination of the global economy would continue uninterrupted well into the new century.

So said Sen. Phil Gramm of Texas, who authored a sweeping deregulation of the banking industry in 1999 that tore down the wall between banks and non-bank investment outfits that specialized in exotic speculative instruments.

Gramm's bill was enthusiastically endorsed by the Clinton Administration, with then-Treasury Secretary Lawrence Summers leading the cheerleading. It passed the Senate by an overwhelming 92-8 vote and was signed into law by President Bill Clinton in a celebration of the ''freedom'' embodied by an open-ended commitment to an unfettered financial marketplace.

The 1999 bill put the government's stamp of approval on the creation of monstrous financial entities like AIG and a shadow banking system built on a hollow foundation of speculative greed. It eviscerated the protections of the 1933 Glass-Steagall Act, written at the nadir of the Great Depression. Glass-Steagall was designed to prevent such an economic catastrophe from ever afflicting us again; it created the FDIC and host of other agencies and regulations to keep the greedmeisters from running the banks into the ground.

In the forefront of the lonely opposition to Gramm's bill stood Sen. Byron Dorgan, a plain-spoken and little-known lawmaker from North Dakota. Dorgan warned that deregulation would spur bank consolidation and facilitate greed-driven derivatives trading.

''What does it mean if we have all this concentration?'' Dorgan asked in his 1999 floor speech opposing bank deregulation. ''The bigger they are, the less likely this government can allow them to fail.''

Dorgan also raised a red flag about a coming surge in high-risk derivatives: ''Federally insured banks in this country are trading in derivatives out of their own proprietary accounts. You could just as well put a roulette wheel in the bank lobby,'' he said.

Dorgan introduced an amendment to ban banks from using proprietary accounts for derivative speculation and a plan to regulate hedge funds under the Investment Company Act of 1940.

''Those who cannot remember the past are condemned to repeat it,'' Dorgan said at the conclusion of his eerily prescient 1999 speech in front of the Senate. ''With respect to the regulation of risky hedge funds and derivatives in this country -- $33 trillion, a substantial amount of it held by the 25 largest banks in this country -- we must do something to address those issues. That kind of risk overhanging the financial institutions of this country one day, with a thud, will wake everyone up and lead them to ask the question: Why didn't we understand that we had to do something about that? How on earth could we have thought that would continue to exist without a massive problem for the American people and for its financial system?''

Dorgan was literally laughed off the floor by his colleagues. The Senate tossed out his amendments with a voice vote, exempting senators from taking public stances on the protections he proposed. Within a few days, Gramm's bill became law. The rest, as they say, is history.

Nobody is laughing now.

Dorgan, still a senator, recently visited the White House and told the new president what urgently needs to be done:

-- Appoint a blue-ribbon commission to investigate and identify the causes of the collapse of the global financial system.

-- Create a Financial Crimes Division at the Justice Department and unleash a squad of federal prosecutors to round up the swindlers who destroyed our economy.

-- Restore the provisions of the Glass-Steagall Act.

Thus far, Dorgan's recommendations have not been acted on by the Obama Administration. Perhaps this is because the man who was sitting next to President Obama at his meeting with Dorgan was the president's chief economic advisor, the primary architect of the administration's plan to cure the fiscal calamity.

The president's chief economic advisor is Larry Summers, the former Treasury chief who in 1999 thought it was a great idea to repeal the Depression-era protections of the Glass-Steagall Act.

Memo to President Obama: Fire Summers and hire Dorgan.

Edelweiss doctrine

Ben Bernanke is a renaissance man. He was the class valedictorian at Dillon High School in the small South Carolina town where he grew up. He taught himself calculus, edited the school newspaper, achieved a near-perfect SAT score, and was an All-State saxophonist.

When he was 11 years old, long before he turned into a dour replica of one of the Smith Bros. of cough-drop fame, the future Fed Chief had a brush with national prominence when he won the state spelling bee and a place at the national competition in Washington.

According to Wikipedia, Bernanke finished 26th after tripping up on the word ''edelweiss.'' Edelweiss, the national flower of Switzerland, was immortalized in The Sound of Music when Julie Andrews sang ''blossom of snow, may you bloom and grow, bloom and grow, forever Edelweiss.''

Four decades later, the chairman of the Federal Reserve is getting another chance to show us all that he now understands what it takes to make something bloom and grow in a frozen wasteland.

Invoking the Bernanke Doctrine, the nation's top banker activated the nuclear printing presses at Treasury last week and created $1 trillion that did not exist before. He said he would use the new coin to buy long-term Treasury bonds and a big piece of the glut of mortgage-backed securities now held by government wards Fannie and Freddie.

What, you never heard of the Bernanke Doctrine? It's Ben's special seven-step cure for a deep deflationary cycle, first enunciated in a little-noted speech seven years ago. It calls for a massive increase in the money supply, zero interest rates and the deliberate depreciation of the dollar.

Regarding the money supply, Bernanke noted in his 2002 speech that ''the U.S. government has a technology, called a printing press, that allows it to produce as many dollars as it wishes at essentially no cost. Under a paper-money system, a determined government can always generate higher spending and, hence, positive inflation.''

Positive inflation. Sounds perfectly harmless, doesn't it? A little background radiation, perhaps, like that radon seeping up through your basement. Why, you'd have to stand in the same spot for 20 years to get the equivalent of a chest X-ray. Nothing to worry about, right?

Besides, Dr. Bernanke told us in 2002, there is a fail-safe protection against this wild experiment in fake money spinning out of control. ''The U.S. government is not going to print money and distribute it willy-nilly, although there are policies that approximate this behavior,'' he said.

Fans of 1950s science-fiction B-movies already have guessed what happens next. The esteemed scientist's crazy young apprentice gets hold of his experiment and unleashes a catastrophe.

Dr. Bernanke, meet Mr. Geithner. Economic theory, meet chaos theory.

''Willy-nilly'' does not begin to describe the nonsense that has been coming out of the Treasury Department since the bottom dropped out of the global financial system in September.

We now know that the $182 billion that was funneled into AIG by the government went right back out the back door and into the hands of Hank Paulson's pals at Goldman Sachs and other allegedly solvent Wall Street casinos to cover their exposure to AIG's bad bets at exactly 100 cents on the dollar. No write-downs, no negotiated value. In the underworld, they call this money laundering.

We also know that Treasury gave Bank of America $20 billion and ordered it to proceed with the ingestion of over-leveraged basket case Merrill Lynch in January even after it was discovered that Merrill had concealed $15 billion in fourth-quarter losses and rushed out $3 billion in bonus payments to its in-house swindlers. John Dillinger, take a seat, there's a new bank robbery king.

But this is just tip-of-the-iceberg stuff compared to Geithner's scheme to restart the mortgage-backed securities merry-go-round with a $1-trillion slush fund for private investors. If everything goes according to Timmy the tax fugitive's plan, the vultures will make a killing. If not, the government -- meaning American taxpayers -- will absorb the losses.

The only policies we know of that approximate that behavior are enforced by guys with crooked noses who wear track suits and hang out in Brooklyn social clubs.

President Barack Obama took a moment during his recent star turns on Leno and 60 Minutes to let us in on ''a dirty little secret.'' The banking shenanigans are ''all perfectly legal,'' he said with a shrug and a disarming grin.

Here's the dirty little secret, Mr. President:

The swindlers on Wall Street bought the U.S. government with almost $5 billion in campaign contributions and lobbying fees. They wiped out all the banking regulations and turned the financial system into a high-rolling casino. They went bust, but they knew their hired hands in Washington would make them whole again and stick the taxpayers with the bill.

This explains why the government now has an ''ownership'' stake in a huge swath of the financial system without any ownership rights. It explains why the same buccaneers who engineered the fiscal disaster are still on board for the ''solution.'' It explains why the Justice Department and the FBI have been silent during the biggest heist in history, the looting of the U.S. Treasury.

And it explains why the money supply is going to bloom and grow, bloom and grow, until ''positive inflation'' devours what is left of the net worth of the United States.

Sitting in clover

Ever since Patrick chased the snakes out of Ireland and became St. Patrick, March 17 has been a good day to look for miracles.

Well, here's a small one: United Airlines is charging $236 for a round-trip, first class ticket between Boston and Miami.

The current economic calamity has clobbered the airline industry, and nowhere is this more apparent than in those plush sections up front behind the curtains -- that promised land where happy flight attendants hang up your coat, thrust a drink into your hand and usher you into a human-sized lounge chair before the cattle call for coach has commenced.

Since the bottom dropped out of the global economy in September, first- and business-class seats on most carriers have been emptier than the upper deck during an average Florida Marlins home game.

In a time of fiscal distress, even the well-heeled among us apparently are having second thoughts about the wisdom of ponying up an extra grand or two just for the privilege of boarding the plane first and getting an unlimited supply of peanuts.

To make matters worse for the airlines, the epidemic of empty premium seats is highly contagious: nobody wants to be the only greedmeister on display in the front section as the downtrodden masses crawl aboard the aircraft, most of them carrying tattered newspapers bearing headlines about obscene bailout bonuses.

So the airlines are quietly filling their front sections with regular people.

According to reports, British Airways has slashed the price of its round-trip business-class fare between New York and London by 84%, to $1,800. Upgrades from coach to first- and business-class are being sold at ticket counters for $50 to $250 for domestic flights, with upgrades on international flights going for $500.

Like everybody else, we're hoping for a quick economic upturn.

But as we raise a toast to St. Paddy today, we have to admit that we wouldn't mind seeing the airlines grovel for a little bit longer Ð just long enough to take down their stupid curtains and treat all of their passengers like human beings.

Now that would truly be a miracle.

Delaware Takes a Risk, Announces Shift

With former Gov. Ruth Ann Minner no longer in office, the state of Delaware is shifting its economic focus, due to an unemployment rate at a 25-year high and an estimated $431-million budget shortfall.

Newly elected Gov. Jack Markell and members of his economic team say they will focus on attracting and retaining smaller companies as they try to lift Delaware out of the economic doldrums.

Markell, a Democrat, has given jobs in his administration to several people with business experience, including Republican Alan Levin, the former CEO of the Happy Harry's drugstore chain. Levin now runs the Delaware Economic Development Office.

Some Delaware business leaders are optimistic about Markell's leadership. Bob Prybutok, president of Newark-based Polymer Technologies Inc., says a lot of small businesses felt the economic development office was working against them under former governor Ruth Ann Minner. Her administration worked aggressively to lure large, out-of-state businesses.

This economic development strategic shift is an interesting one, I think. The biggest headlines always seem to tout multi-million dollar corporate investments, a spice rack of incentives and abatements, and leases of hundreds of thousands of square footage. But in today's recessed economy, how many of these gob smacking headings will we continue to see? Perhaps Delaware is astute in recognizing that collecting a net full of small fish may be a better game plan than waiting on a turbulent sea for the elusive catch of the day--particularly for states with smaller economies.

We'll have to wait and see if Delaware's new focus will prove fruitful, but I certainly have to respect the state's courage to alter its course while drifting on dangerous waters.

Colossus of roads

In September, General Motors launched a Web site it called ''General Motors -- Fact or Fiction?'' The purpose of this site, GM said, was to help defend the company against the ''rumor factories'' predicting its demise.

Well, it's beginning to look like the Web site will outlive General Motors.

By the time you read this, the biggest of Detroit's fabled Big Three automakers may already have filed for bankruptcy protection. The company began preparing the public for this -- and jittery investors, who have driven GM's share price down below the price of a gallon of gasoline -- in the annual report it filed this week with the SEC.

GMÕs auditors, Deloitte & Touche, delicately stated in the annual report that the auto giant ''may not have the resources to continue as a going concern.'' This red flag was followed by a statement from GM that it ''could potentially be forced to seek relief through a filing under the U.S. Bankruptcy Code.''

At this point, a bankruptcy filing is merely a formality. Even Helen Keller can see that GM is belly up, like those rusting Cadillacs an avant garde artist buried in the desert all those years ago.

According to reports, the only thing holding GM back from its date at the bankruptcy court is its concern that car buyers might not purchase vehicles from a bankrupt carmaker.

Memo to GM: car buyers are not buying cars from solvent carmakers right now.

While we wait for the formalities, let's ponder how the management of General Motors managed to destroy the greatest car company on a planet in which every human being aspires to own a motor vehicle. This was not an easy thing to do. It is quite an accomplishment.

GM established a commanding position of dominance in the post-WWII world by focusing on market share and marketing. It overwhelmed the competition by creating redundant brands, redundant assembly lines, and a vast universe of local dealerships that put a GM outpost within walking distance of just about every American.

For 30 years, the company was fat and happy. Production lines were geared to produce at least a million vehicles per model, and new models were unveiled like Sports Illustrated swimsuit divas every fall.

GM's marketing gurus managed to finesse the obvious fact that most of the nameplates were simply higher-priced knockoffs of its cheapest model, Chevrolet. Any nosy customer who pointed out that an Oldsmobile was just a Chevy with a bit more chrome was silenced with some free undercoating and $20 off on the air-conditioning option.

GM's notorious pricing policies introduced the term ''sticker shock'' to the lexicon: its vehicles were tagged with fake base prices to lure in the masses, who were then whacked with add-ons as they requested basics like power steering and power brakes.

GM for decades didn't guarantee the quality of its products for more than three years -- and that was only the engines and drivetrains -- and was not concerned that its cars turned into rust buckets after five years, because planned obsolescence was part of its business model. It assumed that the lemmings who bought the cars would keep bringing their junk heaps back to its dealers, who would then pressure them to ''trade up'' to the ''new'' model, the only element of which that was really new was a slightly modified grille.

Then the world changed, and GM didn't change with it.

Our friends from Asia arrived on the scene and offered fully loaded, fuel-efficient vehicles with galvanized rust-proof steel, 10-year warranties and one-size-fits-all non-negotiable pricing.

The Japanese started building cars in America in efficient plants outside of the realm of the United Auto Workers union that had relentlessly driven up GM's costs. They geared their assembly lines to produce 50,000 units at a time, so they could quickly retool and offer fully upgraded new models at any time during the model year.

GM had ample opportunity to see what was coming and either adapt to it or even head it off. In the late 1970s, when Honda was still primarily a motorcyle producer, it could have purchased the emerging Japanese company for a song.

But, like U.S. Steel and the British Empire before it, General Motors was blinded by an imperial arrogance that refused to concede that it might ever do anything less than rule the world.

Sure, it repeatedly told us it was changing, that we would soon see a new, lean GM that would reclaim its rightful place at the top of the automotive pecking order. Any doubt that this was pure fiction imploded last fall with the revelation that GM's financial arm, GMAC, had taken huge positions in toxic sub-prime mortgages in a desperate effort to pump money into the failing behemoth.

By the time GM realized that the game was up, it was too late. Now, even a massive, government-funded Heimlich maneuver cannot disgorge the overcapacity and larded contracts that are choking GM to death.

When the corporate obituaries are written, no doubt we will hear GM's failed executives crying in their soup that they were done in by unfair foreign competition.

It says here that the Japanese transplants didn't cause the demise of the King Kong of U.S. automakers.

It was hubris killed the beast.