The same old bullshit, for 2 hundred years. First it was the Catholics - German, Italian and Irish - and then Asians, and then Jews. Whose next?


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Friday, June 20, 2008


I heard about a guy who came up with a brilliant idea, convinced some money to invest in his dream and made a billion dollars. He built himself a huge mansion and lived happily ever after. But you never hear about the fifty or sixty guys who came up with exactly the same idea and then went broke. I call this the “Savannah Effect” that being the name of the first ship to cross the Atlantic using steam power. And if you were wondering why Detroit doesn’t have an electric car ready for sale or why the U.S. spent billions on a Space Shuttle that is now considered a white elephant the answer is the “Savannah Effect”. It happened in 1819 and if you check the history books you will discover that the first steam ship to cross the Atlantic was the “Great Western” or the “Cape Breton” in 1833, or the “Siruis” in 1838. But you will not hear about the “Savannah” because, well, because it never made a dime.
Everybody now knows that sailing ships can cross the ocean powered by the free fuel of the wind: except the wind is not free. It requires masts and sails and a lot of rope and a large crew to handle it all. And even then you can only move when the wind is blowing. By the beginning of the nineteenth century the world had five thousand years invested in sailing technology. But living with that technology meant that the advantages of steam power were obvious. A steam ship could leave port when it wanted to, and even travel against the wind. The crew could be a tenth of the size needed on a sailing ship, which meant more of the power was used for moving cargo and less for moving the ship and crew. The ship and crew are expenses. The cargo is the profit. And the new nation of America had a shortage of manpower, meaning a shortage of sailors. Steam ships were the obvious way to increase profits.
Which is why, in 1818, the successful cotton merchant William Scarbrough of Savannah, Georgia paid $50,000 for a 319 ton packet ship then under construction at the Fickett and Crockett shipyard, on the East River, in New York City. Scarbrough was convinced that the future of naval commerce was in steam, and he was president of (and principle investor in) the newly formed Savannah Steamship Company. He was intent upon establishing regular steam ship service between America and Europe. And to shepherd that dream into reality Scarbough sought out Captain Moses Rogers.
Moses Rogers seemed to have grown up in almost the perfect time and place for a young man with a maritime heritage, a mechanical bearing of mind and an adventurous spirit. He was pure Yankee, born in New London, Connecticut. He had been one of the first captains of Robert Fulton’s “North River Steamboat” (Later called the “Claremont”) and in June of 1808 had shared command of John C. Steven’s steamboat “The Phoenix”. Stevens had missed beating Fulton to the honor of first steamboat in America by just a month, and missed profitability by not having the Governor of New York as a partner.
While Governor Livingston granted Fulton and himself the sole right to operate steamboats on the Hudson River, Steven’s designs were used on runs between New York and Philadelphia. And it was on such runs in costal waters that Rogers built his reputation as a navigator and an engineer. It was, at the time, a relatively rare combination of skills. Also, Captain Rogers had already discussed the idea of oceanic steamships with Stephen Vail. He owned an iron works in Moorestown, New Jersey. Vail employed engineers who had worked with Watson Watt, the developer of the steam engine. Vail’s engineers not only had personal experience at building steam engines but a few had also managed to smuggle out of England vital data on them. It seemed like a partnership of these three men was made in heaven. How could they fail?
On August 22, 1818 the newly named “Savannah”, 98’6” long by 25’10” wide, with three masts and a man’s bust for a figurehead , slid off the ways in upper Manhatten and immediately sailed to Vail’s Speedwell Iron Works, at Mooristown, New Jersey where a 90 horsepower 30 ton steam engine, removable side paddlewheels and a 17’ bent smokestack were installed . The work took six months. On March 29th 1819 the Savannah sailed on her shakedown cruise to her namesake port. Then on May 22nd, she set sail for Liverpool, England.
The correct word here is “sailed” as the Savannah’s double boiler engine gobbled up 10 tons of coal a day, and she could only carry 75 tons (with about another 5 cords of wood as a backup). Besides, under sail, the Savannah could make 10 knots an hour, while under steam alone she could only average about 5 knots. So the steam power was used only when the winds failed, less than 80 hours in total during her crossing. So the Savannah broke no records in making her crossing, covering the 3,000 miles in a mediocre 22 days, and running out of coal in the process. The boilers had to be fed the wood so the Savannah could make her "grand entrance” into Liverpool under steam.
The British were not impressed. It seemed to them the limited power of the steam engine was not worth the loss in cargo space. Given the cold shoulder in England the Savannah sailed for Copenhagen, where the King of Sweden offered to buy the ship for $100,000. But not having been authorized to sell, Captain Rogers said no. Ah, if he had only said yes, this story might have had a happier ending, because back home in America, the nation was being rocked by the Panic if 1819.
Early in 1818 the First National Bank of the United States in Boston began to call in its outstanding debts. And like falling dominos State banks were forced to follow suit. And as credit dried up jobs in state after state evaporated, and salaries collapsed. (Sound familar?) Record numbers of people in Boston were sent to debtors’ prison. In Richmond, Virginia property values fell by half. Farm workers, making $1.50 a day in 1818, were only earning fifty-three cents a day a year later; wood cutters were being paid thirty-three cents for a cord of wood in 1818, but only ten cents for a cord by 1821. And one of the bigger victims of the panic was William Scarbrough, of the Savannah Steamship Company.
On June 5, 1819 Scarborough had to take out a mortgage on his new mansion to secure his debts, which then totaled $87,534.50. A year later, May 13, 1820, Scarborough was forced to sell his beautiful home to Robert Isaac, his brother-in-law, for $20,000. Isaac allowed William to continue to live in the house. But the very next day Lowe & Company laid claim to everything else that Scarborough still owned, including his shares of the steamship Savannah.
The Savannah was stripped of her boilers and put back into service as a standard packet ship. In November 1821, in a gale, she ran aground and brole up off of Long Island, New York. Stephen Vail, whose Speedwell Iron Works had installed the engine on the Savannah, was still owed $3,527.84 for his work. He never got paid. Moses Rogers went back to work commanding a coastal steamer, the “Pee Dee”. He died of yellow fever at Georgetown, South Carolina., November 15, 1821, at the age of 42.
And William Scarborough, the inspiration for this noble attempt and misadventure, lived out the rest of his life in his own home, (thanks to his brother-in-law) leaving it to his daughter in his will. He died in 1838, at the ripe old age of 62 and is buried in the Colonial Park Cemetary in Savannah. His home is still standing at 42 Martin Luther King Jr. Boulevard. It now houses the Savannah “Ships of the Sea” Maritime Museum, featuring a model of that amazing failure, the steamship Savannah.
The steamship Savannah was a good idea. But like most ideas, good and bad, it was judged a failure. Nobody got rich off the Savannah and most people associated with her went broke. And that is why they should be remembered. It's the way history moves forward; not in a great sweep of historic successes followed by success, but in fits and false starts and at least half the time when humanity does succeed it is almost by accident and in spite of ourselves. At no time in history was anybody any smarter or more talented or luckier than anybody alive right now. And I think it helps to be reminded of that, every so often. The Savannah is such a reminder.
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Tuesday, June 17, 2008


I swear; I am not making any of this up. The hero of this story was born Buffalo Bill Hawkins (his legal name) in 1934, in the tiny town of Purcell, Oklahoma. He was the sixth of eight children. His father was an honest hard working sharecropper and his mother was a devoutly religious woman, one third Cherokee.

In 1952 Bill married Rosa Bell Boulding in Muskogee, Oklahoma, and they then moved to Enid. A year later Rosa moved out, and a woman named Darlene moved in. In 1954 Bill followed his older brother, J.G. Hawkins, to a Christian bible college, but Bill dropped out after just two months. He made his living selling bibles and “ice makers” door-to-door. The ice makers did not work. One relative later told Robert Draper for “Texas Magazine” that Bill, “…could charm a rattler”. A brother-in-law told Draper, “…there isn’t a bigger liar in the world than Bill Hawkins”. The brothers (and Darlene) now moved to Graham, Texas and formed a rockabilly band, “Buffalo Bill and His Whippoorwills”. Bill sang out front and kept track of the money, and according to one of the members, “he always kept the biggest part for himself.”
In the early sixties the brothers went their separate ways. J.G. moved to Romney, Texas and founded a church. Bill moved to Cross Plains, Texas, and raised coonhounds and opened a welding shop. He also convinced Darlene to use a settlement she had received to invest in a pair of Laundromats. Then, in 1967, he joined the Abilene, Texas police department and moved Darlene and their four children to that city. In 1969 J.G. had a vision and moved to Israel. He began calling himself “Jacob” or sometimes “Yaagob”.
In 1972 one of Bill’s children found him in bed with another woman and shortly thereafter Darlene left with the children (although she might have forced Bill to leave, the details are in dispute.) That was also the same year that Bill’s father fell ill. Bill raced back to Oklahoma where he sold his father’s pigs and his truck, before returning (with the cash) to Texas. In 1975 Yaagob (J.G.) Hawkins returned from Israel with another vision. He opened a new church in Odessa, Texas, which he called “The House of Yahweh, Odessa”. He preached a doctrine that celebrated the Jewish holidays and following the 613 laws contained in the Torah. It also relied heavily on the doomsday predictions in the New Testament Book of Revelations. Most importantly the theology preached the importance of tithing, with 1/3 of all a convert’s earnings going to the House of Yahweh. That part of Texas was fertile ground for church start-ups in the 1970’s and Yaagob’s church quickly grew.
In 1976 Bill filed for divorce from his first wife Rosa Bell. Why he chose just then to finally make this move is unclear, as he does not appear to have ever been legally married to Darlene. The next year Bill legally married a woman named Kay, with whom he bought a trailer park, although she now contends he told her he only managed it. Bill resigned from the police department and was ordained as a priest in his brother’s church. He also invested in a Dale Carnegie Course in public speaking. But the brothers soon fell out over theology. Yaagob preached that God’s true name was Elohim. Bill preached that it was Yahweh. In addition Bill opened his own church in his trailer park, “The House of Yahweh, Abilene”. And on December 2, 1980, Buffalo Bill Hawkins dedicated a new church building outside of Abilene. And in 1982 Bill legally changed his name to “Yisrayl (pronounced Yis-Ireal) Hawkins”.
Bill’s church quickly outstripped his brother’s in growth. The House (Abilene) built a world wide following with newsletters, a fancy web site, tapes of all Yisrayl’s pronouncements and the careful crafting of Yisrayl’s message by Kay and the support of her son., Justin. And the tithes poured in, including money from ex-members of the white supremacist Posse Comitatus. By 1990 the tithing for the House of Yahweh allowed High Priest Ysrayl Hawkins to buy 44 acres surrounding his church, where he established a gated compound. The 1-200 members who had “bought” a share of the property (actually it was a lease) were also allowed to buy trailers from a company owned by Yisrayl. And after the House began to preach the end of the world was coming in the year 2000, they also began buying survival supplies in vast quantities, from Life Nutrition Products, a company owned by Yisrayl. By this time converts where divesting themselves of all worldly property and turning it all over to the House. There were also cutting themselves off from all family and friends. The House, by any definition, had now become a cult.
In 1991 Yaagob (J.T.) died if cancer. It was reported that at the funeral Yisrayl fell on Yaagob’s coffin and bid him to rise from the grave. Yaagob refused. In 1994 Kay confronted Yisrayl (Bill) with irrefutable proof that he was sleeping with another woman. He informed her that God had told him in a revelation that all men should practice polygamy. When Kay then filed for divorce from Yisrayl both she and her son Justin were excommunicated from the church and escorted off the property. By 1994 some 300 members of the House had legally changed their names to Yisrayl, to make it easier for God to recognize them on the coming doomsday, October, 2000.
As we all know (now) the world did not end in October 2000. This lack of disaster was explained by Yisrayl as a mis-reading of the pronouncements of Yisrayl by his followers (Yisrayl did not make mistakes!). What he had actually said was that October 2000 was the beginning of a period of trial for humanity, culminating on July 12, 2006 with a nuclear holocaust, when the “nuclear baby” is born and “…a third of man (is) dead in a fourth part of the earth.” On July 12, 2006 several hundred followers in Kenya put on gas masks and retired to bomb shelters. But unfortunately, again, the nuclear baby was either still born or had miscarried at some point. However Yisrayl now claimed his followers had once again mis-read his statements, and the new date for doomsday was Thursday June 12, 2008. Alas, if you can believe it, that date also passed sans the wraith of God.
However, in a possible note of hope, in May of 2008, Yisrayl (Bill) was arrested and charged with bigamy and child labor law violations. His trial is set to begin in September. So, with any luck, come September 2008 Yisrayl (aka Buffalo Bill) Hawkins may yet face his own personal doomsday, as we all eventually do. And then God can figure out what the hell to do with him. But can you believe this guy got away with all of this stuff for this long?

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Sunday, June 15, 2008


I don’t like being gamed and I don’t like being lied to. And I don’t like being “served” by a “mainstream” media who seem obsessed with their own navels. George Bush is out to lunch, again and both of our Presidential candidates are in mumble mode, repeating platitudes (so much for Obama’s “new” politics.) All of which means that the best friend the American middle class has in the entire world is the Saudi Arabian Oil Minister, Ali al-Nami, who said publicly that the current price of crude oil is “unjustified” and just that simple statement forced a drop of $1.88 in the price of a barrel of crude on the N.Y. Mercantile Exchange. It’s now at $134.86 a barrel. When a bureaucrat from an autocratic theocratic monarchy is the best friend the citizens of a democracy have, we are well on our way to hell.
Are we running out of oil? According to U.S. government sources, we have burned over 875 billion barrels of oil over the last 75 years. There are 42 gallons in every barrel of oil, so we burn about 9 billion gallons of oil every day in the United States. But there are 1,000 billion barrels of proven and probable reserves still in the ground. No, we are not running out of oil in the near future. It is clearly time to start conserving and moving to other energy sources, but despite what the mainstream media would have you believe, the experts can find no logical explanation for the current price run-up. Even after the 9/11 terrorist attacks in New York oil was selling for just $17.45 a barrel. Michael Lynch, President of Strategic Energy & Economic Research believes that “…at about $80 a barrel the market crossed into the irrational exuberance level…It’s hard to find a rational explanation for the gain of the last six months.” Unless of course, the explanation has nothing to do the true value of oil, but with market gaming. The price of oil has risen 697%, that is six hundred ninety-seven percent, since November 2001, and on June 6, 2008 it hit $139 a barrel. Why?
There is no mystery here. There is a long history of people “gaming” isolated unregulated or under regulated markets. In 1979-80 the Hunt brothers pushed the price of silver from $11 an ounce to $50 an ounce in 5 months by controlling just 100 ounces out of a world supply estimated at more than 400 million ounces. That bubble collapsed by April of 1980 but the same thing is happening now with essential commodities, including oil and food, because we are talking about a tiny market, relative to the global economy: the futures market. The commodity futures can be manipulated by buying on “margin”, which means that with access to a few million dollars, usually in unregulated “hedge funds,” speculators can leverage hundreds of billions of dollars in profit for themselves with the connivance of bureaucrats blinded by ideology.
You might call it the revenge of the unregulated economy, or maybe “Enron, risen from the grave”, because that is the most recent philosophical base of the current market mess. Wikipedia most succinctly describes the process in the California electricity market in 2000, in which Enron was a central player; “Deregulating the producers …did not encourage new producers to create more power and drive down prices. Instead,…The producers used moments of spike energy production to inflate the price of energy… Manipulation strategies were known to energy traders under names such as "Fat Boy", "Death Star”, "Forney Perpetual Loop", "Ricochet", "Ping Pong", "Black Widow", "Big Foot", "Red Congo", "Cong Catcher" and "Get Shorty"…. On December 15, 2000…California was paying a wholesale price. .of over $1400 per megawatt, compared to $45 per megawatt average one year earlier.” In 2002 S. David Freeman, who ran California’s Power Authority during the so called energy crises, could have been describing the current (2008) oil price spikes when he testified before a Senate Subcommittee; “…a market approach for electricity (or commodity trading) is inherently gameable….Never again can we allow private interest to create artificial or even real shortages and to be in control.”
"Never again" under Bush and the true believers in the nobility of market managers proved a horribly short time. Der Spiegel, the German news magazine, describes the current futures market this way, “…the transactions concluded in this sector no longer have anything to do with real goods…They trade in pieces of information that mean nothing until they are in possession of one of them….When a pipeline bursts in Canada, “the price immediately jumps by $4”, says Fadel Gheit, an oil analyst with Oppenheimer in New York with 20 years experience in the industry. Gheit, also an engineer, knows how pipelines are repaired. “This isn’t heart surgery. It’s a plumber’s job, child’s play, finished in three days,” he says. “The traders use every excuse in the book to drive up prices”.” Sound familiar?
Because they are risking so little (and in any case it is OPM, Other People’s Money) they take huge risks, driving prices in huge swings up and then down. And it isn’t just oil. Again, from Der Spiegal: “In Chicago, the home of the world’s largest commodities futures exchange, the volume of futures being traded is already 30 times as high as the annual grain production in the United States…”Real Trading”, says Hubert Gabrisch of the Institute for Economic Research…has “become the exception on the exchanges”. Prices are now determined by speculators, financial jugglers with no interest whatsoever in having any contact with or physically delivering the vast amounts of grain they own.”
Hedge fund manager, Micheal Masters, told congress last month that speculators had purchased 1.1 billion barrels of oil futures, 8 times the amount in the national strategic oil reserve. They certainly never expect to actually deliver that oil to a customer, or even get within smelling distance of it. And speculators have now bought enough corn futures to fuel the entire U.S. ethanol program for a year. The closest these traders ever get to corn is if it shows up on their dinner plate. Trading House Morgan Stanley now owns agricultural land in the Ukraine. A New York fund owns 2,700 acres of farmland in Britain. And the British Emergent Asset Management company is buying African farms south of the Sahara Desert. What the hell are these brokers going to do with that property? This is not trading commodity futures, it is fantasy trading like a fantasy baseball or a fantasy football league. And it desperately needs to be brought under control
How did we get in this mess? It was easy. Step one was the historically low interest rates, which meant that cash was plentiful and at the same time you couldn’t make much money lending money. That drove investors to look elsewhere for large profits, at places they had never bothered to look at before. Couple this with the “free market” fanatics, and the “deregulation” craze, and a “bubble” was inevitable. In fact, we have now suffered through a dozen bubbles, each one bigger than the last and all fueled by the deregulation craze. And investment guru George Soros believes we are approaching a “Super Bubble” that could pop and throw us into another worldwide “Great Depression”. And that is why the Saudi oil minister is our new best friend. A world wide depression might mean a revolution in his nation: and ours.
We need to return to a real market economy. We need to do that while we still have a choice, before a complete economic collapse forces us to do it.
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