The 38 Studios Bond Debate and RI’s Rip Van Winkles

In watching the ongoing debate over repaying the controversial 38 Studios bonds, I’m getting more and more disgusted over the efforts to frame this discussion a matter of intellect/common sense vs. emotion/unchecked anger. It’s the kind of insulting and condescending nonsense that got us into trouble in the first place.

After all, when the initial 38 Studios deal was rammed through the legislature, the self-appointed adults in the room (legislative leaders, the Governor, lawyers and financial experts) all argued that the responsible thing to do was make this strong investment in Rhode Island’s economic future, to be bold and visionary and do what was needed to create jobs. Those who dared raise concerns about handing over $75M in loan guarantees to one company, in an industry with a high failure rate being run by a CEO with no business experience, were dismissed as engaging in hysterical political attacks. They were holding our state back because of their unwillingness to trust the state’s political leadership.

You’d think just four years later, we might be a little more careful about trusting the people pushing for repayment of the 38 Studios bonds when their argument can best be boiled down to “trust what the rating agencies are telling us to do.”

I don’t know where these Rip Van Winkles were in late 2008, early 2009 when the global economy was on the brink of a financial meltdown. But those of us who were awake and paying attention can’t help but remember the central role those rating agencies played in that financial crisis. Standard & Poor’s, Moody’s and Fitch all managed to give great ratings to some of the worst financial products the financial marketplace had ever seen. I’m talking about the mortgage-backed securities products–the SIVs, CDOs and other vehicles–which they happily advised state pension funds and other investors to go whole hog on.

Guess what happened? When the housing market collapsed, a range of institutional investors were left holding worthless products because the underlying mortgages weren’t worth the paper they were printed on. Banks were issuing mortgages to anyone with a pulse so they could turn around and feed Wall Street’s demand for more crap mortgages to shovel into bad financial products.

But it was more than just bad judgment. The Big Three rating agencies were also exposed as having cozy relationships with the firms whose products they were rating. They came out of the 2008-2009 debacle bruised, bloodied and having all the credibility of a con artist running a boardwalk Three Card Monte table.

(And let’s not forget, those same rating agencies happily gave their blue ribbon seal of approval to the 38 Studios bonds in 2010, essentially telling their marks to pay no attention to the company’s lack of capital and the fact that 3 out of 4 candidates for Governor in Rhode Island that year were threatening to scrap or revisit the state’s investment.)

Despite their horrific track record, the Big Three are now being treated as the voices of reason by the pro-bond repayment crowd. Rhode Islanders are being told to take their threats seriously and to dutifully shout “How high?” when these guys with red noses and big floppy shoes order our state to jump.

I’ve got some advice for anyone who wants to play “serious thinker” and insist that we must listen to people with a track record of abject failure. Go pick up a copy of Matt Taibbi’s “Griftopia” or watch “Inside Job”. Understand that the rap you are running now was discredited by the reality of the 2008-09 financial crisis. Worshipping at the altar of Wall Street credibility may get politicians some nice campaign contributions and it might give consultants and pundits the chance to act like they are the voice of reason. But those of us who weren’t taking nap during the financial crisis know that you are either being played or are playing us.

And I think Rhode Islanders are tired of being treated like easy marks.

Chris Christie’s Doing the Best He Can

There’s been a great deal of discussion the last few days among PR people about the impact of New Jersey Governor Chris Christie’s dramatic press conference on Thursday.  It went on for nearly two hours, with the Governor and potential 2016 GOP Presidential candidate standing behind the podium and taking on all comers, answering every question about the shutdown of several lanes of traffic on the George Washington bridge which seemingly targeted the City of Fort Lee and its Democratic Mayor, who didn’t endorse Christie’s re-election bid last year.

Christie certainly earned points for coming forward, withstanding the heat and responding to every question thrown at him.  There’s no question that wins him respect from the journalistic community, which is an important target audience.  

It also marked a welcome shift from his previous approach to dealing with the matter, which involved making some statements that didn’t quite square with the known facts and trying to laugh off the controversy by suggesting he “worked the cones” at the bridge closure site.  Once the emails hit the fan talking about causing a traffic jam and joking about kids being stuck on school buses, stock denials and mocking the seriousness of the issue weren’t going to cut it.   

And one other benefit of the press conference–it allows Christie’s supporters to say he’s taken action and is in command, answering questions and taking charge of the situation.  

That’s all good.  Now let’s look at the downside.

When you spend that much time in front of the media, tackling a range of questions on a growing scandal, you are going to meander into dangerous waters and Christie did that when making several references to a non-existent traffic study which was initially tossed out as a justification for the disputed lane closures.  If there was such a study, it would certainly have come to light by now and even if it did exist, the tone of the emails makes clear that Christie’s people didn’t give a rat’s behind about mitigating traffic problems.  They were interested in causing some problems for Fort Lee and its apparently less than cooperative Mayor.

The Governor also made a point of attacking the notion that his people were seeking retribution for the Mayor’s refusal to endorse Christie’s re-election bid, pointing out the Mayor himself had said no one from the Christie camp had even sought his endorsement.  That led one TV commentator, MSNBC’s Rachael Maddow, to posit an alternative theory of the scandal–that it meant to target the Democratic State Senator who represents the Fort Lee area who is in the middle of an ongoing testy dispute with the Governor about State Supreme Court appointments.  This won’t be the last of efforts to scrutinize the motives behind the anger driving Christie’s team to cause trouble in Fort Lee.  

Also, when you lay out a timeline of what you knew and when you knew it, as Christie did, you provide the media with an opportunity to go back and see if your past comments square with your latest words.  Josh Micah Marshall’s Talking Points Memo rightly points to a Wall Street Journal story from December 12, 2013 which detailed a Governor-to-Governor phone call between Christie and NY’s Andrew Cuomo.  In it, Christie complained that Cuomo’s appointee to the Port Authority (the agency which oversees the bridge and is at the heart of the scandal) was causing trouble for him by pressing to find out why the toll lanes to Fort Lee were blocked. Why make that call unless you knew there was good reason to rein in the guy?  It suggests that maybe Christie knew a lot more about this a lot sooner than just after his workout last Wednesday morning.

Finally, when you look at the overall tenor of the press conference (which Jon Stewart described as “F-U Sharp”), it seemed to be about Christie dismissing the notion that he was a bully leading an organization that was all about seeking retribution from anyone who pissed him off.  Instead, he basically offered up what Steven Colbert called a “someone else-a culpa”, essentially painting himself as a disengaged manager who had the poor judgement to hire people who were content to run rogue operations and then lie to him about it.  That’s not exactly the kind of management style that is going to resonate with voters in a Presidential campaign, is it?    

At the end of the day, I tend to think Christie made the best of a bad situation.  I don’t know what the outcome of this scandal is going to be, but if things get worse, I suspect Thursday’s presser will at least turn out to something of a temporary respite for Christie.  And when you are in the middle of a media firestorm, that’s not such a bad thing.  I doubt anyone will be able to point to it and say it was the beginning of the end.  

The bottom line is that Christie had to do something and make some effort to get a grip on the situation.  He’s done that for now, which is the kind of minor victory you need in the midst of a mess like this.


Rob Ford and A-Rod: A Couple of Guys Who Don’t Know When to Shut Up

UnknownimageI took part in a Linked in discussion recently that was launched by someone asking if PR could save Rob Ford, the crack-smoking Mayor of Toronto (hilariously dubbed “the human Spring Break” by Charlie Pierce).

The fact is, there are always going to be some people in public life who just can’t get out of their own way.  Mayor Ford is clearly one of them with his ongoing fiasco up north.  Another is Alex Rodriguez, who went all Al Pacino as Arthur Kirkland in “…And Justice For All” on us Wednesday.

A-Rod’s act reminded us why the steroid-using/can’t get his denials straight/arrogant narcissistic superstar who exemplifies all that is wrong with big-time sports is just another public figure who can’t resist trying to make a big splash when he’d be better off simply going home and shutting the hell up for a while.

The Yankees slugger and target of Major League Baseball’s wrath showed up for his grievance hearing Wednesday only to storm out in a huff in a well-orchestrated huff when the arbitrator surprised exactly no one on the planet by denying A-Rod’s demand that MLB Commissioner Bud Selig should be compelled to testify.  He then issued a statement through “his people” and stopped in to talk to WFAN’s Mike Francesa, only after his lawyer appeared on another NYC sports talk show to take umbrage at the absurdity and injustice of this hearing process.  A hearing process collectively bargained for by the MLB Player’s Association on behalf of its members—including A-Rod.

In January of this year, when the allegations about his association with Tony Bosch and his Florida-based clinic called Biogenesis came to light, A-Rod denied knowing Bosch.  Not a bad play, given the guy was a known huckster, with a phony medical degree and a track record of selling Performance Enhancing Drugs to baseball players.  But Wednesday, A-Rod changed his tune with Francesa and admitted going to Bosch for help obtaining legal nutritional supplements and assistance.  Right.  Because going to a shady guy with a fake medical degree and a bad reputation for selling illegal substances is so much easier and safer than going to the local GNC.

Wednesday’s act was all about A-Rod taking his ego for a spin.  Unfortunately, instead of coming off like Pacino’s crusading lawyer, fighting corrupt officials on behalf of his client, A-Rod came off like Jack Nicholson’s Colonel Jessup—“YOU’RE DAMNED RIGHT I ORDERED THE CODE RED AND I’D DO IT AGAIN!!!!”

More shifting stories aren’t going to look good when this thing gets to court.  And it sure doesn’t help build any public sympathy for a guy who appears to be more interested in taking shots at Selig and reminding everyone about how he’s a dad—even though his paternal instinct seemed to abandon him when he was engaging in the extramarital affairs which seemed to have led his wife to file for divorce back in 2008.

And then, there’s Ford.  Is there anyone left in his camp with the ability to shut this guy down?  I know his family is supposed to be a little unusual, but earlier this week, when Ford apparently imagined seeing someone “confronting” his brother on the City Council floor, Ford did his best rampaging hippo imitation and almost ran a female Councillor.  I would think Councillor Ford might find it in the Ford clan’s best interest to tell the guy who somehow stumbled and bumbled his way into the top spot in Toronto government to chill out for a while before he makes them all look like buffoons.

Haven’t we gone well past the point of this story where it’s obvious to anyone that a rehab stint is a much better option for the Mayor than getting within a country mile of a camera or a live mic again?

There are some cases where the best PR is no PR.  If you obviously can’t relate to the public, and Ford and A-Rod have proven to be superstars in that regard, then your best play is to get out of the public eye.  Fast.  But we seem to be getting a painfully clear reminder that an oversized ego or a rampaging id can get in the way of a sensible PR strategy.

The Mongers of Elite Opinion—from Providence to DC—Are Damaging our Democracy.


I’m a big fan of the Providence Journal’s Ed Fitzpatrick.  But his column yesterday left me shaking my head, wondering if our democracy is going to survive.   

Unfortunately, Ed’s not alone. 

Newspapers across the country were festooned with painfully inept headlines that portray this shutdown as some sort of blame game exercise.  It’s enough to make you want to go Lewis Black on the nearest street corner.

Whenever I read one of these pieces, or hear a commentator wring his or her hands about how both sides are to blame for the current government shutdown, I can’t help but feel we’re a little closer to seeing this grand two hundred and thirty-seven year experiment in self-rule collapse under the weight of its own mediocrity.

Let’s think about it this way.  How would you advise a child to handle a bully?  You wouldn’t tell some poor kid to give the bully whatever he wants or some portion of what he wants in the hopes that it will make everything OK.  Because as grown-ups, we know it doesn’t work that way.

Or, as Jon Stewart so eloquently put it the other night, 

I offer a pox on both their houses when appropriate. But this is not a game of chicken. This is when someone is driving to work and there’s a car coming directly at them in their lane. That’s not a game of chicken — that’s an as*hole causing a head-on collision.

How are the Democrats to blame for this shutdown?  What have they done to bring us to this point?  Well, let’s see…they failed to give in to the demands of a wing of the Republican Party which is willing to hold the Congress and the country hostage to get a do-over on legislation that was enacted fair and square, using the tools of our democracy, back in 2010.

The President spoke this fundamental truth yesterday.  Sadly, it is a truth which many members of the media seem unwilling or unable to acknowledge.

“This Republican shutdown did not have to happen. But I want every American to understand why it did happen,” Obama said during remarks in the Rose Garden. “They’ve shut down the government over an ideological crusade to deny affordable health insurance to millions of Americans.”

Why not just call this hostage-taking what it is—a sign of a deeply dysfunctional Republican Party that is incapable of governing itself, much less helping to govern a country?  Is it really that hard?  Are folks in the media that scared of getting mail from Tea Partiers?  (Hint: pay it no mind.  They’re only watching Fox News anyway!)

Even Rhode Island’s own Joe Nocera fell into the “pox on both your houses” trap, when, in a Monday column about the shutdown mess entitled “Those Banana Republicans”, he feels compelled to wrap up his blistering attack on the current GOP leadership with this ridiculous bit of Bad Analogy Theater:

A party controlled by its most extreme faction will ultimately be forced back to the center. The Democrats learned that when Walter Mondale was losing to Ronald Reagan, and Michael Dukakis to George H.W. Bush. Now it is the Republicans who don’t seem to understand that their extreme tactics are pleasing a small percentage of their countrymen but alienating everyone else.

Damn, my head hurts just seeing that again.  I mean, you can call Walter Mondale and Mike Dukakis a lot of things, but extremists?  They were the Ted Cruz and Michelle Bachman of their age?  Please.

Mondale was Jimmy Carter’s Vice President, an old-fashioned New Deal Democrat.  Dukakis was a dull technocrat who ran a Presidential campaign that bordered on being criminally inept.  (Oh, and by the way, when Jesse Jackson is in your party and running in a primary against you, you are not the most extreme faction.  Not be a long shot.)  Neither of them did anything to damage this country that even comes close to the lunacy we are now seeing from the GOP.

They never called Ronnie Reagan a Muslim.  They never questioned his right to serve as Commander in Chief.  They never called a law that got passed on their watch unconstitutional, even after it had been declared the opposite of that by the Supreme Court.

And none of them ever beat the living daylights out of reality on regular basis the way some of these Tea Party crazies do.  Just get a load of these comments from Senator Rand (son of Crazy Uncle Liberty) Paul yesterday regarding Cruz’s recent faux filibuster on Obamacare:

You know, I think it was helpful to talk more about it.  We haven’t had a big debate about Obamacare really since it passed in Congress. And so I think it was helpful to have the debate.

Hmm…I guess he missed those 46 House votes to defund, repeal or dismantle the law.   

Lord, sometimes there just isn’t enough Guinness and Jameson’s to enable a thinking man to make sense of this crazy world.


Gina Raimondo’s Uniquely Rhode Island Sixth Sense–“I see teachers who love me.”


Who can forget Haley Joel Osment in “The Sixth Sense” and the classic scene where he admits to Bruce Willis that “I see dead people.”?

It has become clear that Rhode Island General Treasurer and would-be gubernatorial candidate Gina Raimondo is afflicted with a similar gift/curse of seeing things the rest of us don’t see. What Gina sees is school teachers and public employees who secretly love her for pushing through a pension reform law which has allowed her to cut retiree COLAs and transfer the savings to hedge fund grifters on Wall Street who then turn around and fill her campaign coffers.

Last year, Raimondo shared a (tall? apocryphal?) tale with the Washington Post’s Fred Hiatt. It became the centerpiece of Hiatt’s glowing review of the Treasurer’s work in Rhode Island.  Here’s the story, as apparently fed to Hiatt by Team Raimondo:

At the Democratic convention in Charlotte last week, a delegate from Rhode Island walked up toGina Raimondo and said, “You cost me $300,000.”

Raimondo, the state treasurer who had quarterbacked a major pension reform, steeled herself for abuse. Instead, the delegate, a retired schoolteacher and wife of another retired schoolteacher, thanked Raimondo and gave her a big hug.

“This system was going to blow up,” she said. “Thank God you fixed it.”

Since then, the Treasurer has given interviews talking about hearing similar words of support from what is apparently a “silent majority” of public employees who are actually grateful to her for cutting their benefits.  Most recently, these interactions appear to have become almost a daily occurrence, with the Treasurer offering the following comments to WJAR’s Bill Rappleye:

School teachers stop me every day and say, ‘Don’t give in to the pressure.  We need our pensions.’  It’s not a joke for these people.  It’s not politics for these people.  It’s not a joke, it’s their retirement, and they deserve honesty, they deserve integrity, the deserve sound investment decisions.

Here’s the thing with all of this…it sounds too good to be true, so it’s probably not.  It conveniently confirms the Treasurer’s narrative without actually providing any real evidence.  Yet the Treasurer gets to spout this nonsense with no pushback.  I guess we’re  all supposed to believe these teachers and other public officials are bucking their unions and their own self-interest, almost taking their lives in their hands by surreptitiously tracking Gina Raimondo down to give her the secret thumbs up for looting the pension system.  (And of course, we’re supposed to believe that in laying out a significant critique of her decision to ramp up the pension fund’s hedge fund exposure, Matt Taibbi is being a joker and making a political attack.)

But maybe I’ve got it wrong.  After all, one can imagine how it works in the Treasurer’s world.    

  • A Narragansett history teacher (we’ll call her Roberta S. to protect her identity), leaves work right after the end of the school day, gets in her car, and heads to Providence, taking a circuitous route to make sure she’s not being followed.  She arrives at the State House, dons a raincoat, a large hat, and sunglasses and mulls about the parking lot.  When she sees the Treasurer emerging from the building, she walks toward her and bumps into her, scurrying off after putting a note in her hand that reads, “Thank you for everything you’ve done on pension reform.  I’ll be in danger if they see me talking to you, but you are our salvation.”
  • Or a Providence teacher, let’s call him Gil D., takes a day off and infiltrates the yard maintenance crew doing the fall cleanup at the Raimondo home.  He is raking a bed in the front yard, when the door opens and Raimondo emerges.  He rushes over and says, “I’m actually a teacher in disguise.  I had to take these precautions to make sure I wasn’t seen, but thank you for cutting our benefits.  Thank you for ramping up the pension’s exposure to hedge funds and giving our COLAs to Wall Street.  It’s the approach we needed, no matter what the unions and the critics say.  Keep up the good work.  I’m going to go back and water the petunias now.”

Yeah.  I’m sure that’s how it’s going down.  Or not.  

I can’t help of the famous Bill Cosby bit, where he describes God talking to Noah, and when God identifies himself, Noah says “Rrrriiiiggggghhhhhhttttttt.”

But don’t take my word for it when it comes to the credibility of these legions of public employees secretly cheering the Treasurer on.  Let’s look at Gina Raimondo’s own words.  While she’s telling reporters about the support she’s receiving from public employees for gutting their pension system, she’s sending out fundraising pieces talking of the vicious attacks, the terrible public employees who dared to exercise their First Amendment rights by protesting outside her recent fundraising event.  

Which world is reality and which is the fantasy?  Here’s a hint…there’s actual evidence of the  public employees protesting the Treasurer, captured on video and in photographs for everyone to see.  The evidence of all the public employees who support Gina Raimondo’s actions?  It’s all in her head.


Dean Starkman gets to the heart of the matter regarding the ProJo’s decline

Dean Starkman’s analysis of the dangerously out of whack priorities of the ownership of the Providence Journal and the connection to the paper’s decline is spot on.  Back in the late 1980’s/early 1990’s, I worked for the Mayor’s office in Pawtucket.  When I started there, the ProJo’s Blackstone Valley Bureau was staffed by three reporters who covered Pawtucket and Central Falls.  Within a couple of years, the ProJo had its first round of cutbacks/consolidations and the bureau’s coverage map was expanded to include Woonsocket, Cumberland and Lincoln.    (And before it was shuttered as part of the big cutbacks which eliminated all the local bureaus, the Blackstone Valley Bureau also included North Providence, North Smithfield, Smithfield and Johnston.)

That change had an immediate impact.  Three reporters could easily attend City Council and School Committee meetings in Pawtucket and CF.  There was no way there were going to do that with three other communities thrown into the mix.  So they were left to work off press releases sent in to them from Mayor’s offices, school departments, council members and school committee members.  In many cases, they would simply run those releases.  So readers went from having a daily dose of well-reported stories based on the news in their particular community to a mixture that included fewer of those stories and more one-sided press statements from a particular office-holder.

At the end of the day, the product was diminished.  And we saw a similar phenomena happen again a few years after the bureaus were shuttered, with the A section of the paper (which contained most of the state generated news) and the B section of the paper (with the national/international news) being merged into one, in what struck me as a move intended to make sure we didn’t notice that state coverage was getting the short of end of the stick.

It’s been sad to watch.  But at least we have someone like Dean Starkman who’s not afraid to pull any punches in examining what has gone wrong.  Looking forward to seeing what he has to say about about the likelihood of the current ProJo ownership following the path of “investing in the product” to turn around the papers fortunes.  My guess is the news won’t be good there…

Why I’m a Pynchon fan…


It’s not just the grand, sweeping stories and themes.  It’s not just the staggering mix of  high ideas and sophomoric humor, the sometimes absurdly-monikered characters, the wild places and occasionally improbable events.

V-thomas-pynchon-290It’s the humanity.  Even in a novel like “V.”, which swings between historical epochs, jumps from one continent to another, poking at grand conspiracies and dangerous plots, all while detailing the picaresque adventures of Benny Profane and The Whole Sick Crew, you get some wonderfully simple moments.  Like the coda of jazzman McClintic Sphere:

“There came to McClintic something it was time he got around to seeing: that the only way clear of the cool/crazy flipflop was obviously slow, frustrating hard work.  Love with your mouth shut, help without breaking your ass or publicizing it: keep cool, but care.

I’m getting ready to read Pynchon’s new novel “Bleeding Edge” by reading two of his more recent novels which I somehow missed–“Against the Day” and “Inherent Vice”.

“Inherent Vice” is pretty low-key compared to “V” and “Gravity’s Rainbow” and even “The Crying of Lot 49″.  The action is pretty much limited to Southern California–no visits to Malta, Egypt, Africa or any other exotic spots.  It revolves around a stoner gumshoe with a fondness for John Garvey movies named Doc Sportello.

But there are plenty of the Pynchon-esque elements we are used to–a dazzling cast of characters with some pretty wacky backstories and the strong sense of a lingering conspiracy which may envelope our hero at anytime.  It’s a book that didn’t get a lot of love when it first came out, but I really enjoyed it.

And here’s why…it’s rollicking good fun.  I’ve got to share this one little tidbit, a throw-away bit of fluff that comes after Doc has travelled to Vegas looking for a guy named Puck Beaverton, who just might know something about the case Doc is working.  Doc makes his way to Sin City with Tito, a limo-driver who happens to be a recovering gambling addict who wants to go there to test his will.  Doc expects Puck to be in the company of his pal Einar, who has a talent for working the gears and levers on slot machines and roulette wheels to manipulate the results, which predictably makes him persona non-grata at most casinos, which is why they are hitting a place in North Vegas called the Nine of Diamonds.

The scam involves Einar working a machine until it gives up its jackpot, with the lesser-known Puck stepping in to grab the winnings.  But when Tito and Doc arrive, just in time to see Einar hit the jackpot on his half dollar slot, the improbable and unexpected happens–Puck’s nickel machine hits at the same time and he is so stunned and unsure of what to do, that he just takes off, leaving Doc and Tito to grab the winnings from the two machines.

Doc retires to his hotel room and we get this classic bit from out of the blue:

When he got back, he flipped on the TV and watched Monkees reruns till the local news came on.  The guest today was a visiting Marxist economist from one of the Warsaw Pact nations, who appeared to be in the middle of a nervous breakdown.  “Las Vegas,” he tried to explain, “it sits out here in the middle of the desert, produces no tangible goods, money flows in, money flows out, nothing is produced.  This place should not, according to theory, even exist, let alone prosper as it does.  I feel my whole life has been based on illusory premises.  I have lost reality.  Can you tell me, please, where is reality?”  The interviewer looked uncomfortable and tried to change the subject to Elvis Presley.

A Marxist economist melting down when confronted by the unique lunacy of Vegas.  That’s just priceless.  And a reminder of the fun that lies at the heart of Pynchon’s best work.