MARCH 2017

MARCH  2017
The Last Time a Republican Reigned in Big Business - 1903

Translate

Amazon Contextual Product Ads

Thursday, December 25, 2008

THE LEGACY OF MR RANDOLPH

I agree with William Plummer’s 1803 assessment of John Randolph of Roanoke, Virginia; “I admire his ingenuity and address, but I dislike his politics.” John Randolph represents the mother root of two great branches in American conservative politics, patrician conservatives and gay conservatives; because if John Randolph wasn’t gay, then neither was Roy Cohen. Some biographies of Randolph insist that he suffered from a condition called “Klinefelter’s syndrome”, but that condition occurs in only 1 out of every 500 males, or 0.02% of the general population, while homosexuality is a genetic variation that occurs in (conservatively) 5 – 6% of the population, making it much more likely that Randolph was gay. And in any case both conditions are genetic variations, having nothing to do with sin, intelligence, choice or morality. So, from a purely practical standpoint, it is just simpler to concede that Randolph was gay and move on.

Randolph was a slave-owning elegantly dressed ‘fashionista’, described by one author as “The most notorious American political curmudgeon of his time”. That may be putting it kindly. John Randolph specialized in what the Romans called the “Argumentum Ad Hominem” or the ‘argument against the man’. As a verbal tool it allows the speaker to change the subject by tarring a political position with the alleged sins of its advocates, and forcing the advocates to defend themselves. And if that method of attack sounds familiar, it is confirmation of the connection between Randolph’s ideological bloodline and its present practitioners, like Karl Rove. John Quincy Adams borrowed from Ovid to describe John Randolph; “His face is ashen, gaunt his whole body, His breath is green with gall; His tongue drips poison.” It is a fair description of the “…abusive eloquence which he possessed in such abundance”. Either description could have been used for Mr. Rove by his opponents.

It is a shame that both of those distinguished blood lines are now being excised from the Republican Party in preference to the “Joe the Plumber” template. The idea that a dumb, uneducated heterosexual conservative is preferable to a smart homosexual conservative is akin to abandoning a talking dog because you don’t like the way he pronounces “BĂ©arnaise sauce”. “Joe” and his supporters remind me of the words of British Prime Minster Lloyd George who said of one opponent; “He has a retail mind in a wholesale business.” Or, to paraphrase John Selden, ignorance of the law may be no excuse, but ignorance in general is inexcusable.

Randolph’s first biographer, Lemuel Sawyer, described him this way; “As an orator he was more splendid than solid; as a politician he (lacked) the profound views of a great statesman, and a larger stock of patience, gentleness, and pliability…he was too intolerant…” But John Randolph admitted to enjoying “That most delicious of all privileges – spending other people’s money.” He was elected to congress at 26 years of age in 1799 and served off and on in both houses (as well as in the Virginia State legislature) until his death. He never married, and admitted “I am an aristocrat. I love liberty, I hate equality." And in describing his chosen career Randolph observed that “If electioneering were allowed in heaven, it would corrupt the angels.” As if to prove his point, in 1824 Randolph turned his cutting tongue loose on Speaker of the House, Henry Clay of Kentucky, and then Secretary of State John Quincy Adams (below). Randolph gave the most important speech of his life on the floor of the U.S. Senate which was described by one author as “rambling, sometimes incoherent, funny, insulting and devastating….filled with literary and classical allusions, among other odds and ends, and delivered with a delightful insouciance.”
Randolph attacked the Federalist position and said any compromise with Clay or Adams, was anathema; “…their friendship is a deadly distinction, their touch pollution”. And as to the very idea of a strong central government, Randolph called it “That spirit which considers the many, as made only for a few, which sees in government nothing but a job, which is never so true to itself as when false to the nation.” I’ve read that speech at least ten times and each time it makes less sense to me than it did before. At the time, however, it had a great effect on its audience. Then Randolph got down to the most troublesome part of his attack. He described Henry Clay as “…so brilliant yet so corrupt, like a rotten mackerel by moonlight, he shines and stinks.” Amongst southern aristocrats, being called a ‘stinking mackerel’ were fighting words. Henry Clay (above) was willing to overlook the insult until, in 1826, the insult was repeated in print, in the United States Telegraph newspaper. Clay could no longer pretend Randolph had not said the words, and after a properly stiff exchange of notes, Clay issued Randolph a challenge to what one witness described as the “…the last high-toned duel I ever saw”. They met at about 4:30 p.m. on April 8th 1826, just over the Little Falls Bridge from Georgetown. Randolph was resplendent in a bright yellow coat. Clay was coldly determined. The night before Thomas Hart Benton had paid Randolph a visit and pleaded with him not to go through with the duel, saying Clay had a young son and wife who would be left destitute if Clay were killed or seriously injured. Randolph had replied ““I shall do nothing to disturb the sleep of that child or the repose of the mother.” But I don’t think anybody told Clay he had nothing to worry about.The men paced off ten steps apart (about 30 feet), and then as the countdown began Randolph’s gun misfired. The gun was reloaded and the countdown began again; “Ready, aim, fire.” Clay’s shot hit the dirt in front of Randolph, whose shot struck a stump behind Clay. The men then reloaded and the insanity began again. This time Clay got off the first shot, sending a ball through the hem of Randolph’s expensive yellow coat. Randolph held his fire, and then dramatically fired his shot into the air. Then he strode forward with his hand extended. The men shook hands in the center of the “field of honor”, and Randolph dryly said, “You owe me a coat, Mr. Clay.”I don’t think Clay ever paid for the coat, because when John Randolph died in May of 1833, his will instructed that his slaves be transported to Ohio and freed, his body was to buried in Virginia and he was to be planted facing west, so he could keep an eye on Kentucky’s Henry Clay. It could be said of John Randolph that he had opposed most if not all of the famous men of his time, that he gave as good as he got and that he made the most of the talents that God gave him; not a bad legacy.

- 30 -

Monday, December 22, 2008

CAN YOU SAY PONZI SCHEME, TOO?

(I wrote the following column in October of 2008, and thought it might make interesting reading in light of the Bernie Madoff scandal which broke in December, with an update at the end.) I doubt that you have ever heard of 67 year old Robert Dean White, but you really ought to hear what he has to say. Federal prosecutors have an extensive library of the imparted wisdom of Mr. White, and my personally favorite “cut” is his description of the parent firm he worked for, “The Petters Group Worldwide”, as “…a Ponzi scheme.” They have recently been replaying that little tune in every hedge fund board room in Greenwich, Connecticut. It has been the Musak of the Bush era Neo-con dead-end investment club we have all recently become investors in. This is what becomes of people who actually start to believe that there isn’t a dime’s worth of difference between the people running for public office. There is always a difference, even if it’s just their price tag.

Charles Ponzi (above -AKA Charles Ponei, AKA Charles P. Bianchi) was far from the first to invent this kind of scheme. He just put his name on it. He was an Italian immigrant who stumbled upon the International Postal Reply Coupon, a now defunct system of international postage. The price of IPRC stamps varied from nation to nation, and Ponzi convinced investors that he was buying the stamps cheaply in Italy, in huge bulk, and selling them for a profit in America. He promised a 400% return on investments and seemed to be making good on that promise. People actually paid him to take their money. Ponzi went from a penniless ex-con in 1919 to a millionaire in 1920: in July alone he made $420,000. And that was in 1920.

Then in August the Boston Post asked the U.S. Post Office how many IPRC’s Ponzi had actually exchanged and found out the number was zero. Ponzi was using new investments to pay off old investors, and pocketing a substantial profit. By September of 1920 Ponzi was in jail. The vast majority of his investors lost everything. A team of accountants searched valiantly for months but were never able to reconstruct where all the money had disappeared to. After serving his sentence and being deported Ponzi told an Italian reporter not to feel sorry for his victims, “Even if they never got anything for it, it was cheap at that price,” he said. “It was easily worth fifteen million bucks to watch me put the thing over.”

Tom Petters, the 51 year old High School graduate behind The Petters Group World Wide (“Partnership Defined”), a self described $2.3 billion investment group with 3,200 employees, founded his first company when he was just sixteen. He leased an office in downtown St. Cloud, Minnesota, out of which he sold stereo equipment to college students. When his father found out about the venture the budding entrepreneur was pulled up by his short hairs and forced to close it all down. But Tom was just starting slow.

In 1988 he formed The Petters Group. In June of 2002 Tom and Ted Deikel bought the name and inventory of “Fingerhut” from Federated Department Stores. A year later he bought s"eBid.com". Two years later he shelled out $246 million for "Polaroid". In October 2006 he joined with Whitebox Advisors to buy "Sun Country Airlines". In February 2007 he bought the marketing company "Juice Media Worldwide", and in November he became sole owner of "Sun Country". In 2008 his acquisitions accelerated. He bought "EducAsian" in January, the magazine conglomerate "Metropolitan Media Group" in July and the charter airline "Southwest Aviation" and "Enable Holdings, Inc.", both in August. And in September of 2008 the F.B.I. raided John’s offices, his home, and the home of Mr. Robert Dean White. Tom’s entire house of cards folded like…well, like a house of cards.

Just a month prior to his personal Goetterdaemerung, Tom explained to the fawning students of the Carlson School of Management, “You’ve got to figure out how to leverage and move things forward and not backwards. Sometimes sideways and left and not always how you had anticipated.” But evidently Tom did anticipate what was coming because he is heard on one of the F.B.I tapes admitting that he cheated on his taxes, and used an employee to create false documents for investors, but that he “didn’t know what choice” he had. I guess honesty was not a viable choice.

The Feds allege that for ten years Tom has been showing investors purchase orders to prove he was selling merchandise to Walmart. But when one investor finally checked with Walmart, the discount chain said the P.O. numbers were fake and they had never bought anything from any of Tom’s many, many companies. This revelation led to a Federal audit of PGW that showed $1.9 billion in the “in” drawer and $3.5 billion in bills, the “out” drawer. And since the Feds lack the imagination of the Wall Street types, owing more than you own equals bankruptcy. Ah, if they only had the imagination of Tom Petters, or of Charles Ponzi, they would know that being in debt was just another opportunity. Have you ever noticed that none of these wise guys have any interest in history? To me that explains a lot.PS: December 24, 2008 Page One ;"The Minniapolis Star Tribune";
"The man accused of trying to swindle Tom Petters' defense attorney out of $250,000 received a sentence Wednesday of nearly three years in prison Before sentencing, Derrick Riddle simply said to the judge, "Give me what you got." Hennepin County District Court Judge Mark Wernick sentenced him to 34 months with credit for two months served since his arrest in October....Riddle initially contacted lawyer Jon Hopeman, saying he could help influence a judge in Petters' favor in exchange for $250,000. ...Petters, once a high-flying Twin Cities businessman, is in federal prison awaiting trial on multiple fraud charges alleging that he ran a $3.5 billion Ponzi scheme for more than a decade."

- 30 -

Blog Archive

Amazon Deals