Thursday, September 24, 2015

Yogi Berra R.I.P. 9/22/2015

New York Yankee baseball legend Yogi Berra died yesterday at the age of ninety. The internet and other media are already full of accolades and memorials of the great star who despite his stats and awards always seemed to be the most humble of men. I would like to offer a few personal recollections that might not appear in the mainstream stories.

I became a devoted baseball fan in 1947 at the age of eight. Actually, I recall listening to the 1946 World Series where the St. Louis Cardinals beat the Boston Red Sox, but by next season I had become an avid listener to the radio broadcasts of the Yankee games. There were some Yankee fans in my family but I suspect the great influence was the three great Italian American stars, DiMaggio, Rizzuto, and Berra, that made up the core of the Yankee team.

It is a baseball truism that a team must be strong up the middle and the three great Italian American stars were the Yankee middle. Berra was the catcher, Rizzuto the shortstop, and DiMaggio, the center fielder. The Yankees won the World Series in 1947 but lost in 1948 to a great Cleveland Indian team that won a record 120 games. However, in 1949 the Yankees began an incredible streak of five consecutive World Series championships. By that time the great DiMaggio was at the end of his career but Berra was coming into his own. In 1951 he won the first of his three Most Valuable Player awards.

At that time the games were only beginning to be televised but since we had no TV, I listened every day on the radio after school. Most of the games were still played during the day. I have never forgotten turning on the radio one day to discover that Allie Reynolds, the hard throwing Yankee pitching ace, was one out away from pitching a no-hitter. It was especially dramatic because the Yankees were playing the Boston Red Sox and Ted Williams, one of the greatest hitters of all time, was at bat.

Williams hit a high pop foul that Berra circled under for what seemed an eternity. It is a very difficult play but a catcher will rarely miss it, but Berra did to the shock of the announcer and everyone else in the Stadium. Reynolds would have to try again to get Williams out. Incredibly, Williams hit another towering pop fly behind the plate but this time Berra caught it to save the no-hitter.

More than his feats on the field, I think it was Berra's innocence and humility that endeared him to people whether they were baseball fans or not. I remember reading that after enlisting in the navy while still a teenager during World War II, he volunteered for duty on a "rocket" ship. Berra thought it was a kind of Buck Rogers futuristic vessel but it turned out to be a ship that launched rockets to soften up enemy beach defenses before a naval invasion. That is why he found himself with a front row seat at the famous D-Day invasion of Normandy on June 6, 1944 at the age of nineteen.

Of course, people have their favorite Berra stories, and his Berraisms have become famous. My favorite is the one about the lady he met one day on a hot spring training day in Florida. The woman complimented him on his Bermuda shorts and said, "Mr. Berra, you look very cool." He replied, "Thanks, lady, you don't look so hot yourself."

Toward the end of my own long career as a financial advisor, I finally qualified for my company's Hall of Fame. A colleague from Mississippi who was already a member sent me a letter of congratulations and included Yogi Berra's remarks on his election to baseball's famous Hall of Fame. When Berra was asked what it meant to be inducted into the Hall of Fame, he replied, "It doesn't mean much unless you're a baseball player. Then, it means a lot."

What a man!


Monday, September 14, 2015

Republican Tsunami

Carly Fiorina
I believe that there is a Republican tsunami sweeping over the country. It began when Republicans took  over the House of Representatives despite the re-election of President Obama in 2012. It increased in intensity in 2014 when Republicans took control of the Senate. This political upheaval only mirrored what has happened on the state and local level in the past few years. In the past few years Republicans have gained control of almost two thirds of the govenorships and state legislatures.

The Republican surge is illustrated this year in the run-up to the 2016 Presidential election. No matter what one thinks of individual Republican candidates, it is obvious that the Republican party has put up an unprecedented array of talented experienced candidates. The youth, vitality, and new ideas of the Republican candidates contrasts with the age and old fashioned ideas on the Democrat side, where Hillary Clinton seems so yesterday, and the Socialism of Bernie Sanders harks back even further. The Democrats seem so desperate that many are calling on old Joe Biden, a man who has never had an original idea, to run.

I did not watch the first Republican debate but here is my initial impression of the Republican field.

Donald Trump has taken the early lead in what promises to be a long race for the Republican nomination. So far, Trump seems impervious to criticism. He is the "bad boy" in the campaign and voters love a "bad boy." Just look at the continued popularity of Bill Clinton. Nevertheless, I suspect that like most front runners, Trump will run out of gas. His insulting comments about Carly Fiorina's face may be the beginning of the end for him

Speaking of Carly Fiorina, Trump's criticism has only helped her candidacy. Her response demonstrated that she is a candidate that must be taken seriously. She argued that the upcoming election is not entertainment but is about issues that will really matter. She also gained stature when she said that there are no "women's issues" but only issues that pertain to all of us. She is intelligent and experienced and even her ouster as CEO of Hewlett Packard will not work against her, since the Directors of the company have admitted that she was right and they were wrong.

If Trump is the "bad boy" in the campaign, I think that Ben Carson is too good a man to go the distance. In fact, in TV appearances he appears to lack the fight and aggressiveness that is so important not only in gaining votes, but also in dealing with the terrible enemies that we face all over the world. Also, he has never been elected to any position of power. One of the great things about America is that there are thousands of men and women like Dr. Carson but they are best suited for the private sector.

Mere election to office does not necessarily qualify someone for the duties of President of the USA. Senators like Ted Cruz, Marco Rubio, and Rand Paul should have established themselves in the Senate before seeking the Presidency. They are intelligent thinkers and good vote getters but do not have the necessary experience as yet. President Obama is a good example of a first term Senator who attained the Presidency on charisma but turned out to be not ready for the job.

Governors seem to be more qualified than Senators for the Presidency, and the Republican field contains a number of present and former Governors. Of these, I think that Jeb Bush, the former Governor of Florida, and John Kasich, the current Governor of Ohio, have the experience and qualifications. I think a Bush/Kasich ticket would be very electable since both Florida and Ohio are key states in any Presidential contest. Bush lags in the early polls but he should not be counted out.

Governors like Bobby Jindal of Louisiana, Scott Walker of Wisconsin, and Chris Christie of New Jersey do not appear to have enough experience as yet.  It is doubtful if Christie could even
carry his home state of New Jersey. In general I question the ethics of sitting Governors running for the Presidency. They promised a lot to the people who elected them, and it doesn't seem right for them to turn their attention away from their home states. Scott Walker still has a long way to go in Wisconsin so why doesn't he want to stay and complete the job.

Politicians would do well to follow the example of Ronald Reagan who after two successful terms as Governor of California retired and proceeded to groom himself to become a national figure. Jeb Bush has followed the Reagan example. It will be interesting to see how he fares in the race once the front runners come back to the pack.


Saturday, September 5, 2015

The Pope, Poverty, and the USA

I suppose that it’s natural for Pope Francis to call upon the wealthy to assist the poor. Charity, especially for the poor, is an integral part of the Christian message. However, on his upcoming visit to the United States the Pope will have an opportunity to examine one of the greatest anti-poverty programs in all of human history. 

If we remove ourselves from current political rhetoric and disputes, and take a longer view of what has happened in the USA in the 150 years that have elapsed since the end of the American Civil War to the current day, we will see the greatest advance in human well being in the history of the world.

Although politicians and activists like to complain about modern income inequality, there can be no doubt that in the past 150 years the USA has become the wealthiest nation in history, and that the wealth has been spread over a greater number of people than ever before in history.
Sure, from the time of the “robber barons” in the late nineteenth century to our own time, there have been wealthy fat cats at the top of the economic pyramid, but just consider the fate of the immigrants of the nineteenth and early twentieth centuries. Irish, Jewish, Italian and other immigrants came to this country fleeing starvation and oppression, and with nothing to sustain them but their religious and cultural heritage.

In each case the first generation of immigrants took the most menial of jobs and lived in wretched slums. The second generation, however, found jobs with large American corporations in the expanding American industrial and transportation sectors. Many also became upwardly mobile as teachers, policemen, firemen, or other civil servants.

 However, members of the third generation did not just work for these corporations, they became part owners through a variety of means. Corporate pension plans expanded dramatically after the Second World War, and these plans were largely invested in the American economy. Even government employees became capitalists since their pension plans were primarily invested in stocks and corporate bonds.

In addition, the proliferation of mutual funds, and tax qualified retirement plans like IRAs made stock ownership easy and affordable for a larger and larger percentage of the population. Just the other day I heard of a study by some economists that claimed that Employee Stock Ownership plans (ESOPs) were the best thing since sliced bread.

In 1920 when nativist sentiment and outright religious prejudice imposed quotas and effectively put a stop to immigration, the population of the country was about 100 Million. I’m sure many at the time thought that America could not handle any more people. Today, there are over 300 Million people living in the USA and the great majority enjoys a standard of living unique in history.

There were no poverty statistics back in the 1920s but if 10 percent of the population was considered to be in poverty that would amount to 10 Million people with 90 Million above the poverty level. But today, if we use the same percentage, 10 percent of the population or 30 Million people would have incomes below the poverty level. Still, there would be 90 percent or 270 Million people who live above the poverty level.

Even the poor in the USA would be considered well to do in other parts of the world. Here, the poor own cell phones, TVs, refrigerators, cars, and most have access to a variety of government subsidies for housing, medical care, and food.

It is not just the children of impoverished immigrants who benefited from the enormous growth of the American economy in the past 150 years. The American South was impoverished and devastated by the Civil War that raged in the 1860s. Today the South is booming with states like Texas and North Carolina attracting people and industries away from other parts of the country. From a poor agricultural backwater, the South has entered the industrial age and created an unprecedented degree of prosperity that should be an example to the rest of the world.

It is the job of economists and sociologists to explain the great increase in American prosperity over the past 150 years. Yet, no one can deny that it has happened. I would just point out that the increase in wealth coincided with the legalization of the corporation in the nineteenth century.

When a corporation became recognized as a legal entity with the same rights as a person, it opened the way for the tremendous expansion of American industry. The corporation became a limited liability company meaning that only the corporate assets of stockholders were at risk in any business venture. Private, personal assets of stockholders could not be lost if a corporation failed. This single provision protects pensioners as well as CEOs.

You can complain about corporate greed all you want but please don’t do it on the iphones that corporate giant Apple created. How many jobs did Steve Jobs create?

It seems to me that instead of criticism directed against corporations and business, the Pope and others should encourage the study of what these corporations have done to create the wealthiest nation in the history of the world. They should be models for others to follow, rather than an evil to be abolished.