When I learned that Ohio Republicans had (cough) “invested” $50 million of public funds in rare coins and collectables controlled by a highly connected Republican fundraiser, I thought, this doesn’t look good. When it turned out that $10 to $12 million was missing from the rare-coin kitty, I had similar thoughts. Then, when I saw that the Ohio Bureau of Workers’ Compensation had agreed to turn their long-bond fund into a highly-leveraged hedge fund, which ended up losing $225 million out of $350 million, I thought, this is a real problem. The fact that Governor Taft’s office had been informed in October, and was apparently waiting for the $225 Million Fairy to fill the hole, didn’t help. I found myself agreeing with Atrios that it was maybe time for some new leadership in Ohio.
Luckily, I caught myself in time. What was I doing wallowing in this kind of negativity? Heck, I might as wear a “Party of No” T-shirt and march down Main Street! After all, my guys lost. The voters of Ohio supported the positive Republican agenda of pissing away hundreds of millions of dollars of taxpayer funds. What ideas do Democrats have? Just leaving the money in secure investments? Wow, guys, way to fire up the electorate. I must record new-age music for Windham Hill, cause I’m getting all yawny.
If there’s one thing that I’ve learned from the helpful Democratic strategists at the GOP, it’s that America hates negativity. So I’m hoping that the brain trust here can help come up with a positive agenda about how the Democrats should deal with this. A Democratic proposal for bake sales and bikini car washes will do a lot more to turn those frowns upside down than loose talk of “resignations” and “basic oversight”. I’m going to get started on my self-esteem boosting pamphlet, “So You’ve Lost $235 Million of Other People’s Money”, right after I deal with this crack in my desk that I somehow caused with my forehead.
{ 44 comments }
jet 06.09.05 at 12:42 pm
Just like when the Democrats opposed the Civil Rights Act, or when the Democrats pushed through the 1994 CIA neutering bill, or when the Republicans blew a bunch of money on good ol boy scams, sometimes our political parties just let us down as morally bankrupt, retarded, or just plain corrupt.
jet 06.09.05 at 12:44 pm
For the record, I voted straight Republican at the federal level and straight Democrat at the state level. Fuck Taft and his sorry gang of scavengers.
Rob 06.09.05 at 12:45 pm
See jet comes through with “everbody does it so why worry?” apoproach. Yep, that’s out jet excusing misdeeds by those wearing his colors for years!
abb1 06.09.05 at 12:48 pm
OKay, he lost $225 million, but he could win up to a billion. What would you naysayers be bitching about then? Oh, you’d have found something, no doubt. You just hate American entrepreneurial spirit, don’t you?
Cryptic Ned 06.09.05 at 12:50 pm
Imagine if the Ohio Bureau of Worker’s Compensation invested $225 million in Powerball tickets! They could be sitting on a cool $40 trillion now, and Taft’s approval rating would be at least twice what it is now (18%).
Andrew Edwards 06.09.05 at 12:58 pm
I say we come up with a list of POSITIVE investment strategies that offer better returns than the -65% that the Republicans got on their hedge fund.
1) Buy 200 million $1 lottery tickets. Invest all winnings in more lottery tickets, until you hit the big jackpot. Estimated return: -$200 million or -57%.
2) Sell 17,500 $20,000 cars for $10,000 each. This will yield net topline revenues of $175 million. (And net profits of -$175 million, or a -50% return).
3) A faith-based initiative: Give $100,000 gifts to 1000 different churches, synagogues, mosques, covens, and temples. Pray really hard for money to fall from heaven. Estimated return: anywhere from -$100 million (-29%) to inifinity, which is, of course, the scope of god’s love for puppies and small children.
…
P ONeill 06.09.05 at 1:25 pm
Democrats should also see why the Ohio scandals make private social security accounts imperative. With the country in effective one party rule, the geniuses behind these investments can’t be trusted to leave that famous filing cabinet of IOUs in West Virginia alone. People must have private accounts so that the rich Ohio Republican dream of collectables and hedge funds is accessible to every American.
Daniel 06.09.05 at 1:29 pm
There was actually quite a lot of good music recorded on the Windham Hill label (I’m listening to a Michael Hedges compilation right now) and it is probably overdue for a re-appraisal.
Alan 06.09.05 at 1:43 pm
Having Diebold on your side means never having to say sorry.
Barry 06.09.05 at 1:43 pm
“See jet comes through with “everbody does it so why worry?†apoproach. Yep, that’s out jet excusing misdeeds by those wearing his colors for years!”
Posted by Rob
Rob, Rob, Rob, whatever are we going to do with you? Jet did far, far better than that (from a GOPslime point of view, of course). He invoked Dixiecrats!
By now, of course, they are either dead, or they’re repentant Democrats, or unrepentant Republicans.
Steve LaBonne 06.09.05 at 1:57 pm
Don’t even get me started on the putrid politics of my beloved adoptive state…
Under normal circumstances the slimy, theocrat-dominated Republicans (who own all statewide offices and completely dominate the legislature) would be overdue for a fall after this scandal. But our Democratic Party is so effing useless it’ll probably do something really clever like nominate Jerry Springer for governor, and get clobbered as usual. Excuse me while I go slit my wrists…
roger 06.09.05 at 2:25 pm
Was that the Civil Rights bill Goldwater tried to craft? The one that Nixon said was worth losing the presidency about? Those were the days, man. Remember Ronald Reagan, standing tall with his felow freedom riders in Birmingham under attack from Bull Connor? Remember Everett Dirkson’s impassioned letter to Malcolm X, saying you are damn right! Remember how the GOP platform of 64 said that even if it meant overturning capitalism, civil rights was the first priority of the Party, and they would block any segregationist from being a member? They were so stirring back then, George Romney joshing with the Black Panthers, Spiro Agnew denouncing J.Edgar Hoover as a pig. GOP radical chic, where has it gone to?
jet 06.09.05 at 2:47 pm
p oneil,
What about the Thrift Savings Plan? Good enough for federal employees, but not good enough for the peasants? The TSP has been averaging over 4% a year while social security only averages whatever inflation is able to kill off of the principle.
BigMacAttack 06.09.05 at 2:55 pm
Actually this an example of the problem.
See this just doesn’t convince me that some how Democrats are naturally less corrupt or better people.
I don’t think there is anything wrong with Ailes and Atrios ginning up the base. But if you are looking to expand I think you need more than the words crooked fucktards.
Uncle Kvetch 06.09.05 at 3:09 pm
Remember Ronald Reagan, standing tall with his felow freedom riders in Birmingham under attack from Bull Connor?
Almost as soul-stirring as the time he steadfastly refused to lay a wreath at the graves of SS officers at Bitburg, because that would have been an affront to common decency.
save_the_rustbelt 06.09.05 at 3:10 pm
The real scandal here is that our economy, thanks to NAFTA and related crap, is still headed down hill.
Taft has the same mental abilities as Terry Schiavo did, except he is kept alive and still gets a paycheck.
When the Dems ran the state they were corrupt, now the GOPers have had a turn, maybe the pendelum swings back.
JW 06.09.05 at 3:15 pm
Um, jet, I get my TSP in addition to Social Security — not instead of Social Security. And I get it because I work for the federal government — not merely because I am a taxpayer.
Those are significant differences.
ogmb 06.09.05 at 3:20 pm
The voters of Ohio supported the positive Republican agenda of pissing away hundreds of millions of dollars of taxpayer funds. What ideas do Democrats have? Just leaving the money in secure investments?
Is Ted the Medium Lobster?
Ted 06.09.05 at 3:47 pm
If only.
Barry 06.09.05 at 3:52 pm
Oh no, no mortal could be the lobster! Only the lobster can look GOPicy in the face, and not be blasted into shreds! (it’s the shell, especially after the kevlar infusion).
Daniel 06.09.05 at 4:01 pm
Update: the Michael Hedges album has now finished, and to be honest it did get a bit monotonous toward the end.
Thomas 06.09.05 at 4:04 pm
It needs to be said, but hasn’t yet:
–The state made money on the crazy coin investment scheme. Made money. Good rate of return, too. Doesn’t make it less a crazy scheme, but it didn’t cost anyone anything.
–The $225 million lost out of $350 million isn’t a total for the whole fund, of course, but a total for the investment placed with one firm. A firm chosen in an “affirmative action” program, it should be said, and at the behest of a Democrat (though one might point out, as the paper does, that he was a Democrat who “worked closely with” the previous Republican governor, whatever that means). It isn’t clear at all what role Governor Taft has in this at all (though that doesn’t change the fact that he’s an awful governor and probably a rat bastard as well). Finally, it seems to me that a broad array of investments is an appropriate choice for a public fund portfolio, and the fact that some investments don’t turn out doesn’t mean they were bad investments (though it is quite possible that this was a bad investment from the beginning, given the “qualifications” of the firm, and their track record). So, maybe a hedge fund investment is fine with a portion of the funds available for investment, but not this hedge fund investment with this firm, which was chosen on this basis.
Sven 06.09.05 at 4:17 pm
Damn, I shoudda known this was all about affirmative action. When will I ever learn?
RSL 06.09.05 at 5:11 pm
If it turns out that Noe stole some of the money invested in his funds, shouldn’t all the Republicans and Republican organizations who received campaign contributions from Noe be charged with receiving stolen property. If I were a citizen of Ohio being ripped off, I’d insist these guys get some jail time.
Steve LaBonne 06.09.05 at 5:42 pm
_If I were a citizen of Ohio being ripped off, I’d insist these guys get some jail time._
Works for me. Start with our lamebrain governor and work down the hierarchy. I wouldn’t mind if for good measure you also threw in our senior US Senator who talks a great “moderate” game and then votes the Tom DeLay line.
Jon H 06.09.05 at 6:34 pm
daniel writes: “Update: the Michael Hedges album has now finished, and to be honest it did get a bit monotonous toward the end.”
Windham Hill music is destined to provide public radio bumper music for the rest of eternity.
Hm. Actually, Massive Attack is getting kinda popular for that purpose, which could be trouble for Windham Hill’s legacy.
I mean, come on. Who would you bet on to win? Windham Hill? Or Massive Attack?
It’s kinda fore-ordained, isn’t it?
Jon H 06.09.05 at 6:35 pm
“But our Democratic Party is so effing useless it’ll probably do something really clever like nominate Jerry Springer for governor, and get clobbered as usual.”
They could try something new – they could nominate his hooker.
Brian 06.09.05 at 8:17 pm
I dunno why exactly, but Ohio is turning into Alabama but with nasty weathers, and more corrupt politicians.
Republicans run pretty much everything but a few cities and, as was noted above, the democrats are so lame they couldn’t organize a picnic. I can’t imagine a scenario where we won’t be stuck with these losers for decades at least.
ChrisPer 06.10.05 at 3:23 am
So remind me fellas, what exactly should you do in opposition? We once had a whole political party in Australia with the slogan ‘Keep the Bastards Honest.’
dsquared 06.10.05 at 4:14 am
Wasn’t John Fahey on Windham Hill records at one point?
Barry 06.10.05 at 5:47 am
crisper, I’m beginning to believe that the answer to many such questions posed by foreigners is “you wouldn’t understand, you live in a free country”.
The USA is rapidly changing into a one-party kleptocracy, with the only choice between corporate looters and whack-job corrupt theocrats. Most of what you might have thought is simply obsolete, and refers to a USA which exists only in history.
Itea 06.10.05 at 6:28 am
thomas –
This _shouldn’t_ need to be said, but…
– The shitty thing about the coin deal was that the investment was rather clearly a quid pro quo in exchange for Noe’s investments (I mean, campaign contributions).
– Whether the fund’s $350 MM investment was a good idea is perhaps up for debate. What should not be up for debate is that this was known many, many months ago, but the governor’s office kept it very quiet.
jet 06.10.05 at 7:24 am
Thomas,
Where do you see that the fund made a good return this year in spite of the crazy investments? If all the GOP’ers are guilty of is callow recklessness, then that is quite different than simple looting.
SamChevre 06.10.05 at 7:50 am
I am a finance geek—I have to point something out. Investing a small portion of your investments in a high-risk, counter-cyclical investment is prudent; every competent financial adviser will advise it. Whether the hedge fund was a good hedge fund I don’t know, but the fact that it lost a lot this year DOES NOT mean it wasn’t a prudent investment.
Marc 06.10.05 at 7:56 am
Thomas is repeating the previous republican talking points, from well before the STOLEN 12 million dollars were discovered.
Jesus Christ. We have a dubious investment given to a huge campaign contributor to one party; another enormous scheme involving hundreds of millions of dollars lost in a disastrous investment, with no public knowledge or notification…
And we have people either defending The Party or saying they’re all the same. Never mind that these sorts of things only seem to happen under conditions of one-party rule; The Republican Party is always right.
For those who are saying “they’re all the same”:
GUESS WHAT. Because of term limits ALL of the GOP candidates for governors are current statewide officials…e.g. part of this corrupt system.
The Democrats have two very good statewide candidates: Mike Coleman (popular mayor of Columbus) and Ted Strickland (congressman from SE Ohio). Neither is part of the current system; both have reputations for integrity.
Marc 06.10.05 at 8:00 am
Samchevre: it was highly leveraged and they invested a large fraction of their funds in it. When they lost the money they then tried to hide it for as long as they could.
We’ve seen a whole lot of commentary on this here in Ohio; suffice it to say that the financial community seems to be unanimous in saying that neither of these investments should ever have been made by any pension fund or public system.
Thomas 06.10.05 at 8:34 am
I should correct my previous statement on the coin investment, because it is no longer clear to me that the state did receive a good rate of return on the investment. Many news accounts are referring to a loss of $12 million from the fund. Many of those refer to fund as being $55 million. Others note that Ohio placed $50 million with the fund. Still others note that Ohio had received, prior to the scandal, more than $15 million in profits from the fund. How that math works out, I don’t know–it isn’t clear where the $55 million comes from (as opposed to the $50 million), or whether the $15 million in profits were reinvested, etc. Until I see a full explanation of those pieces–presumably in court documents, since most journalists won’t bother with numbers–I’ll withdraw my prior statement. Whether others should refrain from commenting if they can’t answer these questions, I’ll leave to them.
marc–it’s a what? $14 billion fund?, for godssakes. This wasn’t a huge part of the portfolio. And if private pension funds didn’t invest in such schemes, most of these schemes wouldn’t be funded. It’s quite ordinary and common to make such investments for pension funds.
Manly Republican 06.10.05 at 9:01 am
Why are all you liberals bitching?
After all, the Republicans invested $350 million dollars in $1 JFK jr commemorative coins from the soveriegn state of Liberia.
I bet you’ll be bitching in a couple of months when Taft invests the remaining $125 million in the sure thing of Iraqi Dinar currency futures currently being advertized on many respected media outlets such as Men’s News Daily.
save_the_rustbelt 06.10.05 at 9:26 am
Taft’s press conference yesterday was emabarassing. He looked like a beaten dog trying to get some small act of compassion from his owner.
Taft is too lame to be dishonest, but apparently he is too lame to control his own Chief of Staff, let alone a state government.
There is about $12 million “misappropriated” from the coin fund, and Noe’s lawyer made that statement. Good Grief! (Look for Noe to use the “my partners did it” defense, which will be a spectacular flop). The only question for Noe will be state prison then federal, or federal then state?
Matt Weiner 06.10.05 at 11:07 am
Dsquared–IIRC Windham Hill bought Fahey’s Takoma label, or something like that.
After 30 seconds googling, all I’m willing to put in, I am unable to confirm that. But Takoma (when under Fahey’s control) did put out George Winston’s first solo album, which may be a bit disturbing to all us hipsters who go round saying “There’s no freakin way Fahey is new age, dude. Those things are totally different.”
Itea 06.10.05 at 1:18 pm
Thomas –
Do you think it is good for the community when public officials choose to invest public funds in monetary instruments that are controlled by large campaign contributors who stand to make large personal financial gains from said investments?
I’ll be very clear. This investment would have been a sorry deal for the citizens of Ohio even if the fund had appreciated 1000% in five years. Giving huge financial rewards to political contributors is practically the definition of a corrupt government.
Daniel 06.11.05 at 11:43 am
I am also a finance geek, and I would like to make the point that if you give someone $350m and he gives you back $125m, the correct response is to rip his bloody throat out. I think Robert Merton has a proof of this somewhere.
natasha 06.12.05 at 2:15 am
p oneill – “Democrats should also see why the Ohio scandals make private social security accounts imperative. With the country in effective one party rule, the geniuses behind these investments can’t be trusted to leave that famous filing cabinet of IOUs in West Virginia alone. People must have private accounts so that the rich Ohio Republican dream of collectables and hedge funds is accessible to every American.”
IOUs? Are you telling us that the fiscal full faith and credit of the US government isn’t worth a bucket of warm spit? Because if that’s what you’re saying, then absolutely no one in their right mind would either accept our currency or buy US Treasury Bonds. Yet for some reason, when I take my money to the store, backed up as it is by nothing but the say-so of the US government, people always take it in trade for goods and services.
And I don’t see why we should trust corporate America (Enron, WorldCom, Global Crossing & etc.) any better. Even in cases that don’t involve outright graft, the market goes through boom and bust cycles all by itself. What happens when a bunch of people retire in the years following a big bubble burst, like the one in 2001, when millions of private investment accounts have been reduced to pennies on the dollar of their former value?
I’ll tell you what will happen: There will be an enormous public outcry for a defined benefit program that provides a floor on the income of … oh, wait a minute, we already have that. It’s called Social Security.
Bush has created a multi-trillion dollar black hole in our budget here today, but he thinks he’s competent enough to deal with a possible budget gap 40 years from now. Bullpuckey.
PhilK 06.12.05 at 5:01 pm
Natasha, I think p oneill was being snarcastic.
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