Random Musings

First up: the confirmation of Justice Gorsuch.  I'm glad he's on the court.  By all accounts, he's a brilliant jurist, he understands the Constitution and the context of original intent (even if the interpretation of that context must occur in the present - an important distinction from originalist thought), and he performed admirably in his confirmation hearings.  How could any reasonable person who understands the law and the Constitution not like the man given his thoughtful, intelligent answers to what were too often inane questions?

Dianne Feinstein tried - and failed - to pin him down on how he'd rule on specific cases.  No judge up for confirmation to the highest court in the land ever has been thus pinned down, and for good reason: how can one know how one would rule without having the specifics of that particular case before them?  If, for example, there is an attempt to overturn Roe v. Wade (Feinstein's greatest fear), the challenge would come from some lower court ruling, the specifics of which could only be speculated upon at this juncture.

And once again Al Franken proved that he's nothing more than a washed-up comedian.  During Franken's questioning, he quipped, “I had a career in identifying absurdity, and I know it when I see it.”  Wrong, Al.  Your career was in performing absurdity.  We the audience were charged with identifying it, and we certainly do that every time you open your partisan mouth.

However, while I'm happy to see Gorsuch on the court, I don't like the nuclear option, for a simple procedural reason.  Presumably, any Senate decision that was set up to require a super-majority was set up that way intentionally.  So it seems illogical, and wrong, that a simple majority vote can remove the rule that required that decision be made by a super-majority.  In other words, it doesn't make sense to me that 51 Senators can decide that a rule requiring approval of 60 or 67 Senators now only requires 51.  It renders any super-majority requirement irrelevant.

Don't get me wrong, I'm glad the option was exercised to put Gorsuch on the court.  Otherwise we'd never have gotten a ninth justice, and Lord knows the Dems would have done the same thing under the circumstances.  But I don't like the procedural mechanics of the option itself.  It is proof positive that the real problem is our partisan divide.

(Note that three Dems broke ranks to vote in favor of Gorsuch's confirmation.  All three are from red states and facing re-election in 2018.  The prosecution rests.)

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The next item is Treasury Secretary Steven Mnuchin, whom I believe was a very good choice for the role.  Mnuchin hails from Goldman Sachs, so the tantrum-throwers naturally waved signs saying such intelligent things as, "Don't put Goldman Sachs in charge of the Treasury!"  As if Mnuchin remains beholden to a former employer.

A little history is in order:

• Jack Lew, President Obama's second Treasury Secretary, came to that role from Citigroup's Alternative Investments unit, which ran a hedge fund that profited from the housing collapse (the importance of this fact will be revealed later).  He also oversaw many of Citi's offshore operations - you know, tax havens.
• Neal Wolin, an interim Obama appointee, previously worked for The Hartford Financial Services Group, an insurance and investment firm.  He was responsible for government affairs and taxes, among other things.
• Hank Paulson, a Bush II appointee who oversaw the financial bailouts, was another Goldman alum.
• John Snow, a prior Bush II appointee, was previously Chairman of Cerberus Capital Management, a private equity firm.
• Don Regan, a Reagan appointee, had been CEO of Merrill Lynch.
• David Kennedy, a Nixon appointee who had served in other roles under the JFK (no relation) and LBJ administrations, had previously been CEO of Continental Illinois Bank, which in 1984 became the then-largest bank to become insolvent.  It was bailed out by the FDIC.
• C. Douglas Dillon, a Kennedy appointee who also served in the role under LBJ, was an executive with Dillon Read, another Wall Street firm.

That's far enough back for us to travel.  The point is obvious: numerous Treasury Secretaries have come from Wall Street and financial services firms, including appointees of both Democrat and Republican Presidents.

And why not?  Why not cherry-pick the brightest minds in the highly complex financial world to run the world's largest Treasury?  Timothy Geithner, President Obama's first Treasury Secretary, had been President of the New York Fed, and his early career was spent entirely in government service.  He was also an unmitigated disaster as Treasury Secretary during the financial crisis.  Oh, and he cheated on his taxes.  Give me a Goldman mind any day.

So why do I bring all this up?  Well, I was recently asked what I thought of President Trump's "financial people" (by someone who clearly is not enamored of Team Trump - a lifelong Democrat voter).  I replied that it was a great team, and noted that Mnuchin in particular was a brilliant choice.

The response was, "Yeah, well, he got rich off the housing bust."  (I won't go into the details - you can google them for yourself.)  However, when I replied that I also made money on the housing bust (details below), the response was, "Well, he made billions."

Actually, he only made - reportedly - about $200 million off the sale of a subprime mortgage lender that he and some fellow Goldman alums bought at the depths of the housing crisis.  Okay, that's still a lot of money, but it ain't billions, and it just goes to show how partisanship leads to playing fast and loose with the facts (and I'm guessing that this Mnuchin detractor couldn't cite the specifics of his dealings if pressed - I'm sure he was just reciting something that Rachel Maddow said).

However, I replied that if I'd started out with the stake Mnuchin started with, I might have made billions too.  Here's the Cliff's Notes version of how I personally profited from the crisis (I may tell the tale in more detail in a future, pure economics post, because the lessons learned could prove valuable, but the story's too long to go into here).

Around February of 2007, I saw the housing crisis coming, to make the story short (how I foresaw it is not important at this point).  So I began carefully watching the markets for signs of distress.

Between October of that year (when the market peaked) and March 2008 (by which time the S&P was down about 15%) I pulled all of my money - retirement accounts, discretionary funds and my daughter's college fund - out of the stock market.

Then, in March 2008, I invested 100% of my discretionary funds in a leveraged bet against the stock market, in which my return would be two times the percentage decline in the market.  By March 2009, my return was 55%.

I don't recount this to boast, but merely to illustrate that there were probably a lot of people savvy to the machinations of all things economic to profit from the housing decline and the resulting market meltdown.  Those of us who did so are not nefarious characters, we just saw things that pretty much nobody else saw.

That brings us back to Steve Mnuchin.  He was smart enough to invest in a troubled subprime lender at its lowest point, and build that investment up to the point that he was able to pocket a nine-figure payout.

And isn't that exactly the kind of mind you want running the Treasury, especially given our current debt load - a guy who can take a troubled investment and turn it into a success story?

'Nuff said.

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Quick take on the Sean Spicer "Hitler Brouhaha."

Media, get over it.

The guy pointed out that he was thinking in terms of dropping gas from a plane, not porting it into a "shower" in a concentration camp.  Okay, granted, he misspoke, and it got a lot of folks' knickers in a right twist.  But it's not like he's a Holocaust denier.

Was it stupid?  Yes.  It's always stupid for a conservative to invoke Hitler comparisons, no matter how they're applied.  Why do I add the qualifier "for a conservative?"  Because Hitler comparisons are the favored tool of the left.  So let them compare away.  Conservatives should take the higher ground.

Nancy Pelosi asserted that Spicer should resign.  If people lost their jobs every time they said something stupid, Nancy would have been unemployed a long time ago.