The Great Depression Online

Great Depression Online Archive Issue:

"This is to Make an Ass of Me"

Great Depression Online
Long Beach, CA
April 13, 2010

Inside This Issue You Will Discover…

*** Los Angeles, Explained
*** Chasing Affairs
*** “This is to Make an Ass of Me”
*** And More

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Now for today’s GDO…

Los Angeles, Explained

Fantasy, as everyone knows, is infinitely more captivating and satisfying to the vast majority of men than facts.  Facts are callous, ultimate, and irrevocable.  Fantasy is fantastic, romantic…it’s out of this world.

This very insight explains Los Angeles.  If you’ve ever been to the place you know it overestimates itself in everyway.  Elegance, sophistication, culture, and substance are more fantasy in the City of Angeles than reality.

Several years back, for example, we stayed at the Biltmore Hotel.  The Hotel was grand, luxurious, and classically stylish in every way except one…the people working there. 

~~~~~~Understanding the Fed~~~~~~

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Understanding the Fed


When the bellhop took our bag up to the room he barged in like a barbarous blockhead and stood there with a dumb look on his face.  We didn’t quite know what to make of this; we tipped him not for his fine service, but rather, so he’d leave.

Fantasy, nonetheless, is the City’s highest appeal.  It’s a place where hucksters, chiropractors, metaphysicians, hungry midwesterners, and undocumented immigrants go about their business like a scene out of Shakespeare’s A Midsummer Night’s Dream.

The City government, it just so happens, is acting out the fantasy too…

Chasing Affairs

The current cast has Mayor Antonio Villaraigosa in the role of Nick Bottom – the guy with the ass’s head.  If you don’t remember the story, Bottom is an arrogant, over-confident, self-centered fool who’s used as a pawn in the rivalry between Oberon and Titania…much like Villaraigosa in the ongoing clash between the Los Angeles Department of Water and Power and the City Council.

Before the housing meltdown, when the city coffers overflowed with money, Villaraigosa was the City Council’s number one man.  They loved him…and so did the labor unions.  For he always did what they wanted.

Villaraigosa, on the other hand, didn’t really know what he was doing when it came to governing the City.  He was far too busy running around town.  When he wasn’t chasing the next photo op he was chasing extramarital affairs with Mirthala Salinas – a political reporter for the local Spanish-language television network.

How times have changed…

The City’s now running out of money and the City Council doesn’t trust Villaraigosa any more than his now ex-wife.  Here’s a brief rundown of the standoff…

“This is to Make an Ass of Me”

Villaraigosa wants the City Council to approve electric rate increases for the Department of Water and Power to fund his pet renewable energy programs.  Yet the City Council won’t approve the rate increases because too many of the renewable energy contracts are from Oregon and Wyoming.  They want more jobs in California

At the same time, the City Council wants the Department of Water and Power to transfer $73 million to the City’s general fund so they can pay some bills.  However, the Department of Water and Power won’t transfer the money until the City Council approves the rate increases.  What’s more, the City Council doesn’t trust the Department of Water and Power would follow through with the $73 million transfer even if they do approve the rate increases.

Last week City Controller Wendy Gruel reported the City will run out of cash on May 5.  “The question I have been asked most often during the budget crisis is, ‘When will the city run out of money?’” said Gruel.  “Unfortunately, we finally have an answer.”

“This is to make an ass of me,” unwittingly proclaimed Nick Bottom, before his head was changed to that of an ass’s.

“The fact is, we have to act, and we have to act quickly,” Villaraigosa told reporters at a news conference at City Hall.  “We are running out of cash.  The facts don’t lie.”

If you can believe it, even in la-la land, the facts subvert fantasy from time to time, and the Mayor makes an ass of himself.


M.N. Gordon
Great Depression Online

P.S.  It is finally becoming obvious to everyone that the Fed is failing in extending its bag of tricks to stop deflation.  The Fed’s balance sheet now contains more than 50 percent mortgage and other bank debt.  Perhaps the Fed is willing to blow the rest of its AAA assets in the form of Treasury bonds, but somewhere between now and then is the Fed's uncle point.  The markets, however, are not so dumb as to wait for it.  They can already see the end of that road, and they are moving now, ahead of it.

This is a must read


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