The View from Right Field

John C. Bogle, RIP

John Bogle, the man who essentially invented the idea of index fund investing for individual investors, passed away yesterday at the age of 89.¹

In 1976, the Vanguard Group, the company which was formed by Mr. Bogle in 1974, established First Index Investment Trust, the first index mutual fund for individual investors.  The fund only collected $11 million during its initial underwriting, but today, the fund, now known as Vanguard 500 Index Fund, has more than $400 billion in assets. 

Illinois Faces Hard Choices – But the Solution Is Simple

In his inaugural speech, new Illinois Governor J.B. Pritzker said that Illinois must make “hard choices” and that “[o]ur abdication of responsibility must end.”  I agree.  But while the problems Illinois faces may be hard, the solution to those problems is quite simple.  As I have said before, for too many years (many more than just four), Illinois has spent more money and promised more money to its employees in pensions than it was willing to collect in taxes.  What Illinois now must do is tax more than it spends – until it catches up.

While the solution is simple, the politics is hard.  Are Governor Pritzker and the members of the legislature willing to tax more than they spend, by increasing taxes and/or cutting spending, until Illinois pays its bills and fund its pensions?  And are they willing to explain to the people of Illinois that cutting spending will hurt and that increased taxes can’t just come from somebody else; that everybody is going to have to pay more?

More importantly, though, are the citizens of Illinois willing to support politicians who are willing to tell them truth and do what is necessary to make Illinois something other than a national joke for financial mismanagement?

A Few More Comments on the Stupid Shutdown

A few comments on the federal government shutdown, though I am not sure they add all that much to what I wrote back on January 3.  In any case, it is all the news, so here goes.

1. As I understand the shutdown, it boils down to this:  President Trump thinks that it is better to have a government shutdown than it is to not build the wall he wants to build.  The Democrats in Congress, on the other hand, think it is better to have a government shutdown than it is to let President Trump build the wall he wants to build.  Or, at least, that is how they are acting.

Illinois Gets a New Governor. And Keeps the Same Legislative Leaders.

Last week I asked who would cause Illinois Governor-elect J.B. Pritzker more problems, his supporters or his opponents.  My guess was that it would be his supporters.  Well, Governor-elect Pritzker takes office on Monday, and he will find out over the next few months.  In any case, this week, the new legislature was sworn in, and the same old legislative leaders were re-elected.  In the Senate, Senate President John Cullerton had some nice things to say to outgoing Republican Governor Bruce Rauner:

“We may have had our differences, from time to time, but you took on a challenge when others merely complain from the sidelines.  Thank you, and I wish you and your family the best.”

Standard Chicago Political Practice Gets Indicted – Again

The big story in Chicago, other than the Bears (until yesterday, unfortunately, is the indictment of long-time Chicago alderman Edward Burke,¹ chairman of the City Council Finance Committee (he has now said he will step down as chairman), among other things.²  Alderman Burke was charged with attempted extortion for using his position as alderman to get business for his private law firm from a company wanting to renovate a Burger King restaurant in his ward and needing permits, etc.  A few comments:

1. If Alderman Burke did what is alleged, that is just stupid.  The company involved here apparently owns 100+ Burger King franchises.  This is a big company that very possibly has obligations under the Foreign Corrupt Practices Act.³  If it is covered, it will have policies and controls in place to comply with it.  Trying to extort money from companies like that is dumb.

Comments on Special Counsel Robert Mueller’s Investigation

A few comments on Special Counsel Robert Mueller’s investigation, not in any particular order.

1.  First, I have no idea when Mr. Mueller will be completing his investigation and/or issuing a report. While there have been reports in the press that it might be soon, nobody knows – or at least nobody who is talking about it in the media knows.

2.  While the original impetus for Mr. Mueller’s investigation was the alleged collusion between Russia, or Russians of one sort or another, and the Trump campaign,1 what has come out of the investigation so far does not have anything to do with that question. Obviously, nobody knows what might be coming or will be in the final report, but while we have seen some things involving Russia/Russians, we haven’t seen anything about collusion between Russia/Russians and the Trump campaign.

Who Is Going to Cause More Problems for New Illinois Governor J.B. Pritzker? His Opponents – Or His Supporters?

The question for new Illinois Governor J.B. Pritzker is who is going to cause him more trouble in the upcoming legislative session: the people who supported him last November or those who didn’t.  While it may not be logical, I’m going to go with the former: the people who supported him. 

Lots of state programs, state agencies, and groups funded by the state have had a tough four years.  The fighting, during the last four years, between Republican Governor Bruce Rauner and the Democrats in the state legislature, especially House Speaker Michael Madigan, resulted in long periods with no budget and other periods with limited funding.  Many of the people affected by these cutbacks supported J.B. Pritzker last November, and now they are looking for him to deliver the things they supported him for.

Shutdowns and Walls. How Will It End?

Cutting through all of the tweets, press conferences, and claims of outrage, the current partial government shutdown boils down to a simple problem.  President Trump would rather have a partial government shutdown than approve spending bills that do not include money for his “wall.”  He has promised his supporters that he would build a wall.  It was one of the main themes of his campaign, and he hasn’t been able to get it done.  From his viewpoint, he needs to do it.  He promised.

Democrats, on the other hand, would rather have a partial government shutdown than approve money to build President Trump’s wall.  They have pretty much promised their supporters that they will never approve money for a wall.  They feel they need to keep their promise.  Plus, they don’t want to give President Trump the political victory of getting money for his wall.

Farewell to Paul Ryan. And “Auf Wiedersehen.”

I wrote about Paul Ryan retiring back in April, when he announced he would not be running for reelection to the House of Representatives.  With Speaker Ryan’s term ending January 2, let me add a few final thoughts. 

If you want to know why Paul Ryan is leaving, I would refer you to two things.  First, a column by Megan McArdle at the end of November:

“‘It’s such a depressing time for people like you and me,’ said my dinner companion on Thursday. I raised a querying eyebrow.

‘We’re policy people,’ he explained. ‘And policy is dead.’

What Christmas Is All About

My annual Christmas Eve post:

Charlie Brown:  "Isn’t there anyone who knows what Christmas is all about?"

Linus: "Sure, Charlie Brown, I can tell you what Christmas is all about.  Lights, please?

"And there were in the same country shepherds abiding in the field, keeping watch over their flock by night.  And, lo, the angel of the Lord came upon them, and the glory of the Lord shone round about them.  And they were sore afraid.  And the angel said unto them, ‘Fear not, for behold, I bring you good tidings of great joy, which shall be to all people.  For unto you is born this day in the city of David a savior, which is Christ the Lord.  And this shall be a sign unto you.  Ye shall find the babe wrapped in swaddling clothes, lying in a manger.’  And suddenly there was with the angel a multitude of the heavenly host, praising God, and saying, ‘Glory to God in the highest, and on Earth peace, good will toward men.’

"That’s what Christmas is all about, Charlie Brown.”

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PS: "A Charlie Brown Christmas" is also to be treasured because it is one of the few places today where you can hear the story of our Savior's birth in the King James Version, which has a magnificence to its language that is timeless. 

My annual Christmas Eve post:

Charlie Brown:  "Isn’t there anyone who knows what Christmas is all about?"

Linus: "Sure, Charlie Brown, I can tell you what Christmas is all about.  Lights, please?

President Trump Fires Defense Secretary Mattis, Even Though He Already Resigned. And a Comment on Isolationism.

President Donald Trump has moved up Defense Secretary James Mattis’s termination date from February 28 to January 1.  In other words, he fired a man who has already quit.  And President Trump did it in his own, very classy and dignified, way.¹ 

President Trump concluded his tweet about Secretary Mattis with a response to the Secretary’s comment, in his resignation statement, on the importance of our allies: “Allies are very important – but not when they take advantage of U.S.”

While President Trump’s phrasing was more crass than the way most people would probably say it, the fact is isolationism is a legitimate approach to U.S. foreign policy.  I think it is wrong, and it is not an approach that has had as much support since World War II as it did before.  But staying out of the world’s problems is something America did for a long time.  It was, for example, why we stayed out of both World War I and World War II for over two years. 

When the Nixons Joined the Eisenhowers - for Life

Today is the 50th wedding anniversary of Julie and David Eisenhower.  The grandson of a President marrying the daughter of a President (President-elect, at that point).  They were married on December 22, 1968, at Marble Collegiate Church in New York City, the Rev. Norman Vincent Peale presiding.  The Richard Nixon Foundation has a special on-line exhibit on the courtship and wedding of Julie and David Eisenhower here.

Donald Trump. Barack Obama. James Mattis. Syria and Afghanistan.

Donald Trump has unilaterally, and apparently without consultation with our local allies, decided to pull all of our forces out of Syria, where they were helping local Kurdish forces fight ISIS.  And to do so almost immediately.  We are doing this, President Trump says, because ISIS has been defeated in Syria, but then people say lots of things 

There are also reports that President Trump has decided to cut our presence in Afghanistan by up to half and, once again, to do so quickly.  This will take a little longer because Afghanistan is a NATO fight and we have to do some consultation with our NATO allies before pulling our troops out – unlike Syria where we can leave our Kurdish allies high and dry and tough luck on them.

How to Lose Allies and Influence Almost No One

I have pretty much stopped commenting on Donald Trump’s foreign policy mess-ups for a couple of reasons.  One, it was becoming a full-time job and there are other things to do in life.  Two, I wasn’t sure complaining about yet another mess-up was really adding anything to the point that President Trump doesn’t know what he is doing.  But President Trump has perhaps topped himself last week, so let me comment one more time.

On December 1, Canada, acting on a U.S. extradition warrant, arrested Meng Wanzhou, the chief financial officer of Huawei corporation (and daughter of the company’s founder, Ren Zhengfei), on charges that she had lied to banks about Huawei’s ownership of a Hong Kong company that violated U.S. sanctions on Iran by selling U.S. technology to Iran.  To say the least, China was upset.  They demanded Ms. Meng’s release, claiming it was a political act, and in retaliation detained two Canadians on bogus charges.

Will Joe Maddon Be Back With the Cubs in 2020?

I would say probably not – unless the Cubs make it to the World Series in 2019.  I say “make” it to the World Series because winning the National League pennant is probably enough to get Maddon re-hired, unless the Cubs lose the World Series because Maddon has another Aroldis Chapman-like brain cramp.  (Note I should have said “because Maddon has what some people see as another Aroldis Chapman-like brain cramp” because I think Joe Maddon made the right moves in Game 7 {see here}.  Game 6 is another question.)

Consider what has happened since the end of the 2018 season:

Increasing Gasoline Taxes to Save the Planet. I Wonder How Emmanuel Macron Feels About That Now.

I think I can say, without needing to provide a link, that the consensus among Democratic (and many Republican) politicians, most scientists, and the almost all of the media is that Donald Trump’s views, and the views and policies of his Administration, on climate change are beyond being just wrong.  They are almost maliciously wrong.  The facts are clear, the consequences are grave, and we need to start doing something now.

One question, though.  Even if the facts are clear and the consequences grave, what do you do if the voters won’t approve “what needs to be done”?  While the protests of the gilets jaunes, or yellow vests, in France seem to have morphed into all-around protests against French President Emmanuel Macron, it is important to remember the issue that ignited them: an increase in fuel taxes that was part of France’s plan to reduce its carbon emissions.

Did Barack Obama Really Make America the Biggest Oil and Gas Producer?

In a speech at the Baker Institute at Rice University in Houston last week, former President Barack Obama said:

“You wouldn’t always know it, but it [oil production] went up every year I was president. … [S]uddenly America’s like the biggest oil producer and the biggest gas [producer] — that was me, people."

Two comments.  First, separate from whether it’s true (it’s not, see below), could you imagine George H.W. Bush ever bragging about himself like this?  I can’t either.

Instead of More Politicians Like George H.W. Bush, We Need More People Like George H.W. Bush

On Tuesday, the Chicago Tribune had an editorial entitled “Humility and civility: More pols, please, like George H.W. Bush.”  The editorial concluded:

“If enough politicians and others in the public sphere would take a lesson from the former president’s honorable conduct, Americans would have more respect for their governments – and for each other.”

While I agree that our politicians should take a decency lesson from George H.W. Bush, it would be even better if all of us took a lesson from former President Bush.  If we would act honorably.  If we would have more respect for those who disagree with us.  If we would post on social media, only things that we are willing to say to somebody in person.

If we want our politicians to be more decent and more honorable (which is something to keep in mind when we go to the polls), the first thing we need is to be more decent and more honorable ourselves.

George H.W. Bush, RIP

I have written a lot about George Herbert Walker Bush over the years, and while I am saddened by his passing, I am sure that he, and his family, are glad he is with Barbara once again.  Our longest presidential marriage is an example for us all.  As was his sense of duty, honor, and decency, something that is too often missing in politics today.

But George H.W. Bush was more than a good man.  He was a good president.  Many of the obituaries talk about how President Bush went back on his pledge at the 1988 Republican Convention: “Read my lips, no new taxes.”  What they didn’t mention is why President Bush felt he needed to agree to a tax increase in the fall of 1990.  In October of 1990, there was a short government shutdown over the Columbus Day weekend.  By then, however, and following on President Bush’s statement of August of 1990 that Iraq’s invasion of Kuwait “will not stand,” U.S. troops were already beginning to deploy to the Middle East.  President Bush explained his decision to agree to a tax increase in order to avoid a further government shutdown as follows: “When push came to shove and our troops were moving overseas, we needed a fully functioning government.  I simply had to hammer out a compromise to keep the government open ….”¹  This is obviously an approach to government, and responsibility, that not many people in Washington, at either end of Pennsylvania Avenue, seem to have today.

The @Cubs Are Taking Away Our Future Memories

I’m away, but I wanted to comment on my Cubs season ticket invoice, which I received yesterday.  It came with a note that we won’t be getting real tickets for the games this year.  Everything will be on our so-called smart phones.

Which is sad.  I have ticket stubs from when I went with my dad to games 60 years ago and ticket stubs from when my then-fiancé, now-wife, and I went to a doubleheader on Billy Williams Day 50 years.  I also have the ticket stubs from the first games my daughter and son went to in the 1980s.