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Adams Dreams, City TumblesExcerpt from The Portland Tribune - 2008-05-08
Is Sam Adams serious? Unfortunately, yes, he is.
The Portland Metro area is at a point where:
* One bridge (Interstate) is the major chokepoint in a continental system, causing increased costs and pollution for Portlanders.
* A second - Sellwood Bridge - litterally is falling apart.
* Areas within the city limits have unpaved streets, no side walks and deadly crosswalks.
* MAX, crown jewel of the mass-transit system here, is more and more seen by its ligitimate users as a rolling crime scene.
The issues are not unrelated in the big picture - the total assessment of Portland’s transportation present and future.
Now here comes Sam Adams with the innovative idea to “recycle” the condemned span from the old Sauvie Island Bridge, when the span pretty much has reached the end of its useful service life.
The purpose is to create an exclusive link from tony areas west of Interstate 405 with Pearl District addresses to the east. Recently, Adams garnered support by graciously opening the process up to bid.
The old span should be truly recycled - cut up and hauled away for scrap, Portland has real-world transportation issues that for too long have been back-burnered in favor of “visionary” and “alternative” programs.
Too often, it seems, “visions” is a synonym for “hallucinations.” Moreover, alternatives typically are what one seeks when what one needs most is unavailable.
If there is to be any more transportation spent in the city core while other areas suffer, reality and logic dictate “ugly” concrete and steel.
Patrick Millius - Northeast Portland
FDR ‘Just Guessed’ About How to Fight the DepressionExcerpt from The Wall Street Journal - 2007-06-10; Page A10
In an otherwise commendable commentary about the connection between property rights and the gold clause (”Contracts as Good as Gold,” June 5), Amity Shlaes is wrong in suggesting that there was a deflation in the 1930s. A deflation is technically defined as a change in the value of money itself, the numeraire, that reduces the number of dollars to buy a given weight of gold. Ms. Shlaes correctly asserts that the dollar value of gold stayed constant at $20.67. It remained so until Franklin Roosevelt devalued its price to $35 in 1934. In other words, the value of the dollar and its associated value of interest-bearing debts remained constant from the 1920s through 1934, as required by the Federal Reserve Act.
The falling farm prices are more properly described as the result of a contraction in the real economy that forced owners of goods to dump inventory onto the marketplace. This economic contraction was itself the result of two policy blunders of the Hoover administration: first, the passage of the Smoot Hawley Tariff Act, and second, the increased marginal tax rates that took the tax rate on upper incomes from 25% to 68% in 1931.
It is important to highlight the distinction so that the causes of the Depression and Roosevelt’s own subsequent errors are put in proper perspective.
Stephen W. Shipman, CFA Los Angeles
Those author/economists who are now brimming with great ideas for curtailing the Great Depression obviously didn’t live through it. They create intricate models using economic data that didn’t exist during the Depression. There wasn’t even a system in place to collect unemployment data. President Roosevelt was just guessing when he posited that “I see one-third of a nation ill-housed, ill-clad, and ill-nourished.” He didn’t really know. Amity Shlaes is just guessing that her economic theory about the Depression is valid. She cannot recreate all the factors that led to the Depression or account for the utter despair that engulfed us. Unfortunately, FDR didn’t have the luxury of do-overs. He had one chance to act and the fate of a nation hung in the balance.
Kenneth Lee Raytown, Mo.
Conditioning access to credit on access to gold is akin to granting spoils to the victor — those businesses that possess the most capital would then enjoy even lower rates in their borrowing. Certainly gold clauses may reduce the cost of capital for those who can afford them.
However, the same entities are best positioned to pay their lenders market rates of interest, and it is arguably fair that they do so in order to contribute to the liquidity of lenders and the availability of credit for others. Especially when credit is scarce, lending practices should not restrict fledgling entrepreneurs from accessing credit, to the advantage of established competitors. Such a policy contradicts traditional free market principles and stifles innovation when it is most needed.
Fortunately, gold clauses have fallen out of use. They are an anticapitalist’s dream come true.
by Narissa Webber
Upper Class: Why the Rich Are Heading Back to SchoolExcerpt from The Wall Street Journal - 2007-01-17
As investing and estate planning grow ever more complex -- with labyrinthine trusts, derivatives, hedge funds, structured products, complex philanthropic options and ever-changing tax laws -- wealthy individuals increasingly want to get a better handle on what to do with their money.
Often, the students are successful business owners who have recently sold out and are struggling with how to invest their windfall. In other cases, they are women who have been widowed or divorced and may not have handled tough financial decisions before. And a growing number of fortunes are passing into the hands of baby boomers, who are more apt than their parents to reach out for help in understanding how to manage their finances.
To that end, they are signing up for courses offered by universities and business schools, financial-services companies and independent firms that focus solely on wealth education. In addition, peer-education groups are sprouting up, allowing wealthy individuals to meet regularly and learn from each other and from guest speakers.
Sandra Fox attended a wealth-management course at the University of Pennsylvania's Wharton School this past November with her two adult daughters, one of whom has an M.B.A. and oversees the family's investment portfolio. Ms. Fox's husband had operated a large real-estate brokerage business but had sold the firm several years ago.
"The nature of our wealth had changed," says Ms. Fox, 65, of Medford, N.J., who had worked as an interior designer and holistic health teacher. "Suddenly we had liquid assets. Although we knew how to manage a real-estate business, I did not have the background to know what to do with liquid assets."
The five-day course, which is organized by Wharton and the Institute for Private Investors, a networking group for wealthy families, has enrolled 352 wealthy investors from 21 countries since its launch in 1999. Offered twice a year, the course focuses on investing and family governance, and is so popular among wealthy families that it consistently has a waiting list.
This June, the University of Chicago's Graduate School of Business is launching a four-day private wealth-management course for high-net-worth individuals and families. The curriculum addresses topics such as selecting advisers, estate planning for multiple generations and effective philanthropy. (Participants must sign a confidentiality agreement before joining the course.)
Financial-services companies, meanwhile, are turning to education in order to cement relationships with clients and their heirs. Most private-banking divisions of major firms, such as J.P. Morgan Chase & Co., Citigroup Inc. and Merrill Lynch & Co., now offer extensive "next generation" financial-training programs for adult children of their wealthy clients, with sessions on investing basics and trusts.
At the same time, some family offices -- small companies built solely to manage the fortunes of super-rich families -- are hiring specialized educational directors, in charge of orchestrating how the family learns about investing, estate planning, philanthropy and responsible stewardship of wealth.
Private firms, such as IFF Advisors, that offer wealth-management education say business is booming as clients find themselves overwhelmed with the variety and complexity of financial-services products. And peer-education groups, such as Tiger 21 and CCC Alliance, report having no trouble attracting members. Tiger 21, for instance, whose members must be self-made and have at least $10 million in investable assets, now has 109 members in New York, San Francisco and Los Angeles, up from 63 members in New York alone a year ago.
The cost for the educational programs varies. Wharton's five-day residential program costs $8,755 per person, for tuition, room and board, while the shorter University of Chicago course will cost $6,975, which includes course materials and meals. An evening wealth-management course at the University of Miami's Division of Continuing and International Education costs just $99 for tuition and course materials, while the wealth-management certificate program at New York University charges $295 to $695 per course. Seminars offered by private banks are generally free for clients and their families.
Often, people turn to wealth-education courses after having been coddled for years, without having to make substantial financial decisions. Elizabeth P. Anderson, who runs her own boutique wealth-management firm in New York -- Beekman Wealth Advisory -- recently led a private seminar for three generations of a client's family. The senior generation consisted of two brothers who had founded a family business, but their wives and offspring "had always been taken care of," says Ms. Anderson. The second generation "was really frustrated -- they didn't know what was going on."
Some of Ms. Anderson's clients say they are frustrated with their experiences at larger private banks. "One thing that Wall Street sometimes does is deliberately talk over people's heads to make their financial consultants sound smart," she says. "Much of what is called education is actually disguised product sales."
Banks, for their part, say they offer a wide range of educational seminars, including estate planning and alternative investments. Northern Trust Corp., for instance, recently held programs on such subjects as family limited partnerships and surviving an Internal Revenue Service audit, and even one on investing in pearls. Still, some banks say their wealthiest clients prefer customized educational programs -- often held in fancy retreats or at the client's vacation home -- rather than group seminars, which can be time-consuming and less private.
The classes and seminars don't teach the secrets of how to become rich; instead they focus on how to handle the money that the participants already have. As a result, they are all geared to those who anticipate having taxable estates and who can afford to invest in hedge funds, private equity and other investments generally open to accredited investors. Although none of the courses have hard and fast wealth thresholds, the University of Miami course, for instance, is targeted toward individuals whose family holdings are at least $4 million, while many students at the Wharton program have at least $25 million in family assets.
Those who teach wealthy clients say the topics most in demand are some of the most basic, such as choosing a financial adviser and deciphering cryptic bank and trust statements. "The biggest question we get is, 'How do I know if my adviser is doing any good?'" says Douglas Freeman, chairman of IFF Advisors, which offers a variety of wealth-education programs. (A customized educational program for a family would cost about $10,000 for a weekend course.) "We teach them how to monitor and measure performance."
Andrew Menachem, who teaches the Miami class, says that many of his students this year were major South Florida real-estate developers who have recently sold some of their holdings. "Even though they have been very successful in real estate, they don't really know the public capital markets," says Mr. Menachem, who is also a financial adviser with Morgan Stanley.
Lawrence S. Forman, who runs a successful health-care management firm, recently took the Miami class. He wanted to make sure that his wealth lasts after he retires and to communicate more articulately with his financial adviser.
"When I see terminology I don't understand or I look at a prospectus for a hedge fund that he wants me to invest in, I want to be able to talk at the same level that he does," says Mr. Forman, 59.