Perhaps That Guy Was Onto Something…

Dodd-Frank-Info

Yesterday in the Examiner, Joel Gehrke wrote about the horrifying prospect that Senator Sherrod Brown (D-OH) could chair the Senate Banking Committee if Democrats retain control of the Senate after the 2014 elections.

Brown’s views on economics (especially banking and international trade) are decidedly backwards and appeal to the misguided economic populists in Ohio that elect him and keep Ohio in an economic homeostasis that’s not as bad as Detroit, not as good as Pittsburgh, and far behind Texas.

One paragraph that Joel wrote jumped out at me:

Brown is working with Sen. David Vitter, R-La., to craft legislation that would shrink the biggest banks in the country, and they have 10 other Republican allies, according to Business Insider. The Dodd-Frank bill was supposed to solve the problem of some banks being “too big to fail,” but it didn’t.

OccupyWallStreetNYC (which apparently still exists) tweeted this about Gehrke’s story:

Perhaps the folks operating their twitter account aren’t very familiar with the Dodd-Frank law (RAFSA), but Brown already sold them out by voting for it.

When Dodd-Frank was being considered, my former boss — Senator Jon Kyl (R-AZ) — was among the few who claimed that Dodd-Frank didn’t solve “too big to fail” or TBTF as it’s known among banking policy wonks.

Kyl’s view was that Dodd-Frank perpetuated TBTF. (Disclosure: I worked for him at the time and worked on these very issues.)

In May of 2010, Sen. Boxer (D-CA) proposed a 106 word feel-good amendment (#3737) the stated purpose of which was to “prohibit taxpayers from ever having to bail out the financial sector.”

It passed 96 to 1.

Senator Kyl was the only Senator to vote no.

Here are Kyl’s floor remarks before the vote, explaining why, with emphasis and comments added by me, in bold.

Mr. KYL. Mr. President, let me address the amendment which we are going to be taking up first, I gather, on the so-called financial regulatory reform bill, the Boxer amendment.

The Boxer amendment, as I understand it, is a declarative statement that taxpayers will not be responsible for any Wall Street bailouts. My understanding is that it is not a provision that would enforce itself or would in any way be enforceable in the legislation, but it certainly expresses a sentiment I assume every Senator would share. The problem, however, is not just the fact that we are concerned that taxpayers will be responsible for bailouts but the fact that bailouts will exist in any event and how that might affect people who have invested in or lent to an institution, what authority it would give the U.S. Government, and whether such a provision would apply as well to perhaps the biggest miscreants here: Fannie and Freddie, the two government-sponsored enterprises that hold the vast majority of the mortgages that are unsound or on less than strong financial footing–I will put it that way. So the question is not so much whether taxpayers’ dollars will be used–though this amendment, while expressing a good sentiment, doesn’t operatively prevent that–but just as much whether Wall Street will still be bailed out but in a different way. Will the appropriate policies and institutions that should be in place to prevent this be amended into the legislation?

If all we want to do is ensure failing institutions are liquidated, then of course we can have a bankruptcy regime, and many people believe that is the appropriate regime because it is a tradition of law. Everyone knows exactly how it works, where you stand, and it ordinarily has been successful in liquidating firms that cannot pay their obligations.

After the Lehman bankruptcy and the contagion effects which surrounded that, some believe bankruptcy wasn’t really well suited to these kinds of large financial institutions, and it may well be that traditional bankruptcy would have to be modified in some respects in order to easily apply to the liquidation of a financial institution that large.

One of the things, though, we need to do in figuring out exactly what the right process should be is to make sure creditors aren’t receiving special treatment–for example, the way they did when the auto companies were bailed out and when other firms were bailed out. Otherwise, we will actually be increasing moral hazard rather than decreasing it, which is, of course, part of the exercise here.

A government-compelled fund that takes money from successful firms and transfers it to a failed firm, for example, regardless of how you seek to justify it–as an assessment or a recruitment or a tax or whatever you might call it–is still a bailout. Ultimately, the question is not only who will pay for it but also, how does it scramble the obligations and the prioritization of obligations compared to what bankruptcy would do? (Author’s Note: Details on the liquidation fund.)

The people who bear the cost of propping up a failed firm, for example, have nothing to do with the fact that firm failed or with the poor decisions of that firm. So if, instead of the American people, you are going to make other entities in its area–for example, a bank begins to fail, so you are going to make the other banks prop that bank back up. How is that fair to the shareholders or investors in the bank that has to do the propping up, or the groups of banks? They didn’t have anything to do with the poor decisions made by the management of the failed firm, whereas you can argue that the lenders to the failed firm, the people who invested in the failed firm, and certainly the managers of the failed firm all had something to do with the direction the failed firm took. Because of that fact, the bankruptcy laws have set out priorities as to who ends up bearing the risk of the failure of that firm. The lenders and the investors in failing companies lose control of the money they invested, and whatever resources remain are channeled by the bankruptcy court into productive endeavors or to pay the people who have lent the money to the firm. That is exactly the opposite of what a government-sponsored fund does in transferring resources from a productive to unproductive purpose. Here, if it is not the taxpayers who fund it, then it is fellow banks, let’s say, or fellow financial institutions–again, people who had nothing to do with the failure of the entity that is being acted upon.

Fortunately, there is a process that can address the problem of failing firms, that does move resources into more productive areas and at the same time holds those directly responsible for the mistakes accountable. There are different names for this and it can take different forms. One of them is called speed bankruptcy–in other words, a form of bankruptcy that recognizes that in certain institutions you are going to need to quickly take hold of them and, in order to prevent contagion in the market, shore up their financial situation so they cannot infect others and therefore cause a larger failure than just relates to that particular company.

We should describe bankruptcy, first of all, to appreciate what this does. A firm becomes insolvent when its liabilities–which could be payments to bondholders, it could be payments to suppliers, it could be repaying loans–are worth more than the assets the company has, assets such as land, capital, accounts, the value of intangibles, and even things like reputation.

Over the last couple of years, we have seen the collapse or near collapse of several well-known firms–for example, the GM and Chrysler auto companies, as I mentioned, Bear Stearns, AIG, the big insurance companies. We have also seen Fannie Mae and Freddie Mac, which are projected to be dependent on government assistance for the foreseeable future–and by government assistance, of course, ultimately we mean the taxpayers of this country. In the examples I cited above, the government response was in effect to prop up the failed firm with taxpayer funds.

This so-called speed bankruptcy and iterations of the idea would instead convert a portion of the existing longer term debt of the company into equity. There are a lot of benefits, as you can see, to
such a proposal. For example, with a large, complex firm that is in financial trouble, a lengthy process could create the kind of uncertainty that would otherwise undermine the ability of the company to continue once it exits the resolution process and, as I said, could also infect others in these areas. A speed bankruptcy, on the other hand, would permit the firm to remain in operation, to keep running.

There is a paper that has been written on this that I think is very interesting. Garret Jones at the George Mason University Mercatus Center writes that this kind of proposal actually leaves bondholders with something of value so they are not entirely wiped out and retain the potential to make up for some of their losses if the equity shares they receive in lieu of their bonds once again gain value. Here is what he writes in this recent paper:

Friday’s bondholders become Monday’s new shareholders, and the banking conglomerate can continue borrowing and lending much as before, with little possibility of a short-run crisis.

It is a little bit like debtor-in-possession financing in a bankruptcy, but it matters where you get the financing, and in this case creditors of one kind become creditors of a different kind, trading, in this case, bond for equity in the firm.

Second, unlike government-sponsored bailouts, investors directly tied to the troubled firm bear the financial costs of the restructuring of the firm.

Third, since many of the bonds are publicly traded and are therefore liquid, the process would be entirely transparent, and the reason the process could occur so quickly is because of that conversion.

Fourth, a debt-to-equity conversion leaves deposits untouched, avoiding a potential run on the bank in the case of banks and financial institutions.

What steps and operations would be necessary to make this work?

First, an insolvent firm would be able to convert an amount of its long-term debt specified in advance into stock in order to recapitalize and strengthen the institution. Under such a proposal, regulators would first need to declare that the institution is the risk.

Second, the firm would need to breach a certain specified capital level to actually trigger the conversion. Once this process occurred, the restructured firm would emerge healthier, with less debt, with more equity, without any taxpayer money being used and without any money being used from other banks or other financial institutions.

For example, Pershing Square Capital Management released a proposal to convert $75 billion of Fannie Mae’s $750 billion senior unsecured debt into equity. For every dollar of senior unsecured debt, the bondholder would receive 90 cents in new senior unsecured debt and 10 cents in value of new, common equity. As a result, the new Fannie could take advantage of its new capital. It has a dollar to expand its underwriting. It can utilize increased cash flow to absorb expected losses and, in the future, once conditions improve, to reduce its balance sheet by gradually selling some of the mortgage assets on its books.

John B. Taylor writes today in the Wall Street Journal how to avoid a bailout bill:

You do not prevent bailouts by giving the government more power to intervene in a discretionary manner. You prevent bailouts by . . . making it possible for failing firms to go through bankruptcy without causing disruption to the financial system and the economy.

Here is the summary of what I am saying. Most of us here do not want to see taxpayer bailouts of these firms that have made poor management decisions, have invested poorly, and have made mistakes for which taxpayers should not be responsible.

That is the genesis of the Boxer amendment. But for the Boxer amendment to be effective, two things will have to be done, and perhaps we will have suggestions on how to change it. It would have to be operational and enforceable. As I said, the amendment is oratory language–taxpayer funds should not be used for bailouts. We know that a sense-of-the-Senate resolution is nothing more than that, a sense of the Senate. It needs to have operational and enforcement language to have meaning. It is my understanding that this language doesn’t. (Author’s Note: The Boxer amendment was 106 words long.)

Second, the real question is whether instead of a bailout, where government–I don’t want to use the word bureaucrats–officials representing the U.S. Government in one, two, or three different entities could, on their own, with little direction in congressional legislation, determine that a firm now needs to be taken over or bailed out, and without very much legislative criteria to direct them as to how to do it, or the circumstances under which it should be done, could begin to unwind that firm, using taxpayer money that is later recouped or perhaps funding from a tax or an assessment on other banks, for example, to infuse capital to keep it from going out of business. This is a way in which bankruptcy would ordinarily work, except that bankruptcy works according to a set of rules and traditions that have been developed over a couple hundred years that everybody is familiar with, and which people took into account before they made investments in or lent money to a company in the first place. If they became a bondholder, they knew where the bondholders would be in the order of priority in the case of a bankruptcy. If it is secured, they would have one level of security, and if it is unsecured, they are going to be at the bottom of the totem pole when it comes to distributing the assets of the bankruptcy. Lending is predicated upon their understanding of these well-known rules and principles.

Moreover, they understand that a judge will be in charge, and he will put people under oath and cause them to testify so that you know exactly what the assets are, and you can understand what it would take to keep the company running or, in the event it does have to be liquidated, how the funds would be disbursed. A trustee is appointed, who has a fiduciary responsibility, under the court rules, to manage how the company comes out of bankruptcy, or to ensure that the rules of bankruptcy and the judgment are carried out. That is the way a bankruptcy works. It is a proper way to unwind or liquidate most businesses in this country.

I think those who say these financial institutions are different, we need a different set of rules, first, have an obligation to tell us why. What is different about these entities that the bankruptcy laws simply don’t work? What would cause them to have a different set of treatments? If there are some things–and I can think of a couple things that distinguish them–then how can we modify the bankruptcy rules in effect to take into account those differences? One deficit, one could posit, is the fact that a large financial firm could easily have an effect on others invested in or who they invest in and, therefore, in effect cause a domino effect in markets. That could happen very quickly. Therefore, when you see signs of a problem, you need to deal with that very quickly. That is where this idea of bankruptcy comes from. It doesn’t take a government bureaucrat or a government entity set up for this purpose to figure out that is what needs to be done and how to do it. It can be done within the context of bankruptcy today or with relatively modest modifications in the Bankruptcy Code, we could make those changes.

The fear a lot of us have is that the people who are not elected or constrained by any particular power, except the limitations Congress imposes upon them–and in this bill those limitations are very general–those people could make decisions and put somebody into this process to decide who gets paid how much, without any reference necessarily, for example, to the Bankruptcy Code, who gets privileged and who isn’t, and with whose money.

If you look at the example of the two auto companies, you find that labor unions were substantially privileged to the exclusion of other investors. A lot of people thought this was wrong. It was contrary to the way it would have evolved had they been in bankruptcy court. So what most folks would like to see is a process you can count on, that you have rules of law established over time in the bankruptcy law that enable you to rely upon them, and not some unspecified, unclear process
that is run by some agency of the U.S. Government. While it is certainly a step forward to say that taxpayers should not be on the hook for this, it is not enough to say that, A, because that is not operational or enforced, but, B, because there are other ways to do it that represent a closer adherence to the rule of law that would be better at promoting investment or lending in the first instance, because of the clarity and predictability of the way the situation would be treated in the event of a bankruptcy; and finally, that people who are not responsible for the bad management decisions would not have any liability when that company is liquidated or comes out of bankruptcy operating again. Rather, the people who had been involved in the company in the first instance would bear that obligation.

This is just one idea–one of many–as an alternative to the specific provisions in the legislation. It is my hope that as we continue debate about this portion of the bill, we can come together on a set of principles that would adhere more closely to the rule of law established in the Bankruptcy Code to the concept that those responsible should be the ones who end up bearing the burden and that, in any event, as it appears most of us would agree, taxpayers should not be responsible for the decisions made by the management of a failing firm.

Call me crazy, but perhaps Kyl was onto something.

Always Use BCC

There was a bit of a kerfuffle this morning on the Netflix PR list, which was promoting the new “epic” Netflix original series “Marco Polo.”

What started out as a PR email turned into a digital game of Marco Polo of sorts, as people replied to Netflix — not realizing that one of the addresses was a list server for members of the media. Others didn’t take kindly to their inboxes being spammed, compounding the problem by replying to inform people of what they already knew — not to “reply all.” An age-old problem with any failure to BCC to be sure.

Screen grab below:

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Honda Trolls DIY Movement in New April Fool’s Ad

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It’s just… Perfect.

The Economics of House of Cards

Friend of the blog and former roommate Andrew Heaton kills it in the second episode of the new web series he’s hosting called EconPop.

If Darren Rovell Were Good At His Job…

… he’d probably do a little more research before tweeting this:

stay classy

I took a few seconds to google “Jordair Jett” with quotes and terms associated with majors and degrees, and easily found proof that SLU’s website hadn’t been updated.

But what do I know? I don’t work at ESPN and have a Twitter verified checkmark.

Stay classy, Rovell.

KTLA Anchor Feels Earthquake On-Air

KTLA was on the air this morning in California when an earthquake hit. The anchor’s reaction is priceless:

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Thankfully, it appears there was no major damage.

Here’s the full video:

Inaugural Ballin’

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In January of 2013, I attended President Obama’s second Inauguration and the official ball. A longer story I had written on the hilarity of the Inaugural Ball was cut down for space constraints into a much shorter item.

I came across it today on my desktop and figured I would share it with you:

Walking from THE WEEKLY STANDARD offices to the Walter Washington Convention Center should have been an easy task; it’s just a few blocks down M Street.

But, seeing as the convention center was housing the official inaugural ball, a quick straight walk became a little more cumbersome, which tends to happen when government gets involved. Directed elsewhere by police officers from North Carolina, I paired up with a nice couple from California to find my way in.

Making small talk, the gentleman praised my spiffy Secret Service credentials and inquired as to their purpose. “I’m a journalist,” I told him, “but with a small j.” He asked where I worked, and I obliged him. “Oh, so you’re the enemy,” he joked, but I’m not entirely sure he was joking.

As we made our eight-block walk around the convention center to security screening, I casually asked how much one would pay to attend a ball like this. Conveniently, the man had to stop to tie his shoe. With reports that the price to attend the ball was slashed, maybe I made it awkward. Then again, I was “the enemy,” so I wished them well and pressed onward.

With interest waning, lots of the inaugural balls were slashing prices. I had hoped to attend the National Wildlife Federation’s “green” inaugural ball so I could mingle with the likes of Al Gore, Van Jones, John Cusack, and Bill Nye the Science Guy. Sadly, their progressive PR firm told me: “Going to be honest with you,” (an age-old PR trick to let us in the media down gently) “we are currently at capacity with media due to an overwhelming amount of interest in the Green Ball.”

The interest was, allegedly, “overwhelming” on the media side, but not so on the “green” side— that is those willing to part with paper that depicts deceased presidents—since Groupon was selling tickets to the ball at a steep discount. I guess $400 for a normal ticket and $1,950 for a VIP ticket might be too much to ask, especially when the media is getting in for free. No wonder the media interest was overwhelming.

Hurt feelings aside, I was happy to attend the “official” ball.

Media were instructed to arrive early, by 5:30 at the latest. Alone now and fighting the clock, I raced through the labyrinth of barricades and metal fences, eventually making it to the checkpoint with a few minutes to spare.

Famished as I was, not having eaten since the morning’s wee hours, I briefly considered ducking into the local Subway to satiate my need for food. But, as a man of my word and someone who respects timeliness, I got in line.

Security was tight. We had to put our bag(s) down, go through security, and wait in another line to go back out and retrieve our bags. It’s almost as if Rube Goldberg moonlighted as an adviser to the Secret Service. When it came to our bags, only a bomb-sniffing dog was on the line of defense to find contraband. No x-ray machines, only metal detectors. And Fido.

Once I was through security, I was ushered to the special “press” line. How great, I thought, that our esteemed president and his compatriots have seen fit to rid us journalists from the scourge of the long lines of bourgeois!

Minutes later, I discovered that was naïve.

At the end of the long special line awaited an escort, ready to take us to the special press section. It’s a similar realization that pigs have before their lives are taken to create delicious bacon and pork rinds. My father—a former pig slaughterer—once told me that the contagious panic among the pigs is what alerts them to their impending demise.

To be sure, the Washington press has its share of pigs, but that night at President Obama’s inaugural ball, there wasn’t any panic—we all found out after it was too late.

The majestic press area was, well, like a low-security prison. Once safely in its confines, you’re told the ugly truth: You’re not allowed to leave on your own. Kind of like the Hotel California.

Then there was panic. How will I eat? How will I get drinks? Talk to ball-goers? Relieve myself?

However, should you need to use the facilities, the Presidential Inaugural Committee allotted volunteers to escort you to and from the bathroom. Just as if I were visiting, say, North Korea.

To immediately test this theory, I set my bag down, made some quick friends, and went off to the bathroom. Mind you, it was only 200 feet away, but there the escort waited patiently while you did your business.

This was before most of the many thousands of attendees arrived, and the dance floor was about as empty as a mixer at a Catholic grade school. Leaving the bathroom, I bluntly told my escort: “I need a drink.”

My escort, a retired businesswoman living in northern Maryland, said she knew just the person and took me past the closest bar to meet her drink-slinging connection.

On the way, I quickly realized that I did not have any cash. Not wanting to blow my chances of acquiring precious libations, I asked if the bar took credit cards. “Yes,” my escort told me, “you can buy drink tickets with a credit card.”

I purchased my drink tickets, and even for D.C., the drinks were expensive. The prices would probably even make a strip-club owner blush: $10 for a small “premium” drink, like whiskey or vodka, $7 for an imported beer, and $6 for a domestic.

As I was buying my tickets, I joked with the cashier that I was “investing in alcohol futures.”

While not the same as buying Frozen Concentrated Orange Juice futures like in Trading Places, there do come advantages to buying your tickets early—mainly avoiding lines.

My escort took me over to her friend, and I ordered a Jack Daniel’s on the rocks, straight. As someone who appreciates good service, I felt bad not having any cash because I prefer to tip for good service. I explained/apologized for not having any money for tips and promised, if my escort were kind enough—that I’d go to the ATM later to get some money to tip her for her services.

The bartender gleamed. “I appreciate that honey,” she said. And, like many bartenders, if the tip was good she said would “hook me up.”

I told her I’d see her soon; after all, I bought eight nonrefundable drink tickets. I went back and my new friends in the Washington press were surprised I was gone for so long. While there were hundreds of press, there were not very many escorts.

As I sipped my whiskey, I chatted with a nice gal from NPR who had two cups (made of corn, for the environment’s sake) filled with water. She, too, managed to get out of our media playpen to acquire them. They cost her $6, three dollars for each bottle.

I asked why she couldn’t have just used the bottle and she informed me the bartender wouldn’t let her keep them. Such waste would have never occurred at the “green” inaugural ball, I mused.

Our little cadre was comprised of: a writer for NPR, two Elon college journalists, a gal whose affiliation I forget, a Russian writer for Komsomolskaya Pravda, and me.

We quickly realized that we were, in effect, quarantined, and agreed to a credo: “We won’t turn on each other.”

I finished my drink in short order and sought out my escort. I told her that I’d like to go to the ATM to make sure I had cash to take care of her bartender friend, and that it made more sense to go before it got busy. She agreed.

I elected to withdraw $60, keeping $20 in reserve for emergency drinks and petty cash, and put the remainder towards tips. We went back to our bartender and I proffered my remaining “super premium” ticket, asking for another Jack Daniel’s on the rocks.

“Would you like two?” she asked. “Of course!” I said, and who wouldn’t? Before she got to the business of pouring my drinks, she poured a red wine for my escort and gave it to her. It was promptly consumed.

The bartender grabbed the big cups, the 16 ounce ones, and poured me two straight whiskey drinks on the rocks (totaling a pint between them). She asked if I needed anything else. I said, “Sure, a beer would be nice.”

As it turns out, a big tip and a solitary drink ticket can grease the skids for good access to booze in Obama’s Washington.

Off I went, effectively triple-fisting liquor as the attendees were just beginning to pour in to the tune of “Everybody, Everybody” by Black Box. It was as if I were transported to a mixer in the 1990’s, and yes, it was that awkward.

Back in the media playpen, I offered the excess of the fruits of my labor to Alexey the Russian and Linda from NPR. Linda happily accepted the free beer and Alexey thanked me, but dryly responded in his Russian accent that he preferred vodka. To his credit, he offered to take me to Brighton Beach to experience real Russian-American life next time I’m in New York.

A moment later, my friend Mike came over to the media demarcation fence and yelled out to me. I brought over my extra whiskey and offered it to him while we waited for his girlfriend to return from the long line to check overcoats. Mike is never one to reject a free drink, which shows why we’ve been friends for 26 years.

That night, such a drink would have probably cost $30, so my investment was wise. We hung out for a short while and commiserated over the plight of my minimum security imprisonment. Hopping the fence would have been easy, but it also would have been obvious. I told Mike to go have some fun with his girlfriend so I could plot my escape and hopefully meet up with them later.

A few minutes later, Alicia Keys took the stage to perform a short set. I went around the large pipe and drape riser to get a better view. Alicia belted out “OBAMA’S ON FIRRRRRRRE!!”and nobody, not even the Secret Service, seemed to take her claim about the president’s conflagration seriously.

I felt like I was in that Citi “private pass” commercial where the recently single guy gets to meet Marilyn Monroe, Giada De Laurentiis, and Alicia Keys because he spends a lot of money. After Alicia Keys’s performance, I was stopped by a middle aged woman in the press playpen who assumed that—based on my age—I would know how to spell the performer’s last name.

That was a mistaken assumption; since I told her I didn’t know. For what it was worth, I replied that I thought it was “Keys.” A twenty-something behind me incorrectly assured her it was spelled “Keyes.”

That wasn’t all for entertainment—the Mexican band Mana played, as well as Brad Paisley. But the capstone for most attendees was the band “fun.”—whom you might know from their songs “Some Nights” or “We Are Young.”

At this point my stomach was running quite literally on fumes. Alcohol fumes. I needed food. I sought out my escort and made another trip to the bar and stopped at a food station on the way back.

For all of the money people spent on tickets, the only food they were given was pretzels, Cheez Its and trail mix. Beggars can’t be choosers, so I scooped up what I could carry and brought it back to the media playpen.

Others tried going to the bar or out to get snacks, but found their requests denied by the escorts. As the crowds swelled, the escorts were increasingly unlikely to grant requests to go anywhere but the bathroom. Except mine, of course. My arrangement was paying dividends, kind of like paying “insurance” to organized crime does.

My greasing of the skids got her some free drinks on the side, too. I scratch your back, you scratch mine, they always say.

Mike returned with girlfriend in tow to say hello. Then, it dawned on me. Being part of the media elite, we had spiffy Secret Service credentials complete with mugshot-like photos. Guests, like my friend Mike, had a tux and no credentials, just a ticket. I asked him if they had to wear credentials too.

They did not. It was time to blow this Popsicle stand. My opportunity to escape had arrived.

I would take off my credentials, put them in my bag, hand the bag to Mike and simply waltz out past the other escorts into a sea of thousands of similarly dressed people, pretending not to hear them—“Sir! Excuse me, sir!”

It worked.

I went around to the other side to meet Mike and reacquire my bag and enjoy my new-found freedom. While I wasn’t there to celebrate four more years like he was, it was nice to spend the remainder of that historic day with my best friend.

It’s sort of ironic—to have any real fun as a member of the press at Obama’s inaugural ball, I had to essentially bribe my way out of our playpen to get access to the booze. Crony capitalism is the Chicago way, they say, and for the next four years, it will also be the Washington way.

Heaton & The Economics of the Dallas Buyer’s Club

Good friend, former roommate, and all around good guy Andrew Heaton hosts the new show EconPop. Check it out:

VIDEO: Happy Hour While Ukraine Burns

960 LinkedIn Connections Down the Drain

Meet Kelly Blazek. Well, you’ll have a hard time doing that these days because her internet presence has gone from “nearly 1,000 personally-known LinkedIn contacts” to none.

The Cleveland Scene reports:

If you’re not one of Kelly Blazek’s 960+ LinkedIn connections or have not been granted approval to subscribe to her bi-monthly, hand-selected Cleveland Job Bank House emails, perhaps you, dear job seeker, know her from a scathing email she sent you after you reached out in hopes of connecting with the self-described job listings “mother” of northeast Ohio.

Turns out, you may not be the only one who’s been subjected to Blazek’s— uh— professional advice.

Last week, an email response Blazek, a 2013 IABC Communicator of the Year, sent to a job seeker made its way to BuzzFeed Community Forum, another to Imgur, and today, Scene received a third fiery email interaction between Blazek and a native Cleveland jobseeker…

You should read the whole story because this meltdown is basically a case study in how not to act professionally in any setting.

Today, her blog is zeroed out, twitter account in suspension/deleted, and not available on precious, precious LinkedIn — or facebook for old people. The best line, I think, is this one:

“Please learn that a LinkedIn connection is the equivalent of a personal recommendation”

A friend responds via twitter: “A Linkedin connection is the equivalent of absolutely nothing.” And he’s correct.

Turns out one of my friends had a run in with her five years ago, and she apparently was acting similarly but was only recently called out now.

Either way, good job today, internet. Good job.

UPDATE:

blazek link

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