Thing One: No More Teacher's Dirty Looks: Everybody in America hates unions and teachers all of the time, and even more so today, thanks to Chicago.
The Chicago Teachers Union this morning continued its first strike in 25 years, in a battle with Mayor Rahm Emanuel mainly over non-financial stuff like teacher evaluation and the ability to get first dibs on open jobs. In the third-largest city in America, a strike by teachers was hardly going to stay quiet, and sure enough it quickly went national, with Willard Mittens Romney, who likes being able to fire people who perform services for him, declaring that he stood with the Democrat Emanuel in bringing teachers to heel. Emanuel, after unleashing a string of private obscenities and chewing the stuffing out of a swivel chair, publicly announced he did not give "two hoots" about Romney's opinion. But the strike threatens to be a massive headache for his old boss, President Obama, who needs enthusiastic unions to help him get re-elected.
Most everybody commenting on this story is giving the stinkeye to the teachers, who arguably have had it way too easy despite poor results, as Joe Nocera writes in The New York Times. But this fight is about more than just America's pathetic education system. It is also the latest watershed event in a decades-long war that America seems to be waging all the time against organized labor, including Scott Walker's battles against public-sector unions in Wisconsin.
Unions are widely seen as an anachronism that make labor more expensive and America less competitive, and there are ways that is occasionally true, including in education. But this view is also at least partly the result of a years-long, successful propaganda campaign by the right, which wants to hamstring organized labor's ability to raise money to help candidates that are occasionally unfriendly to businesses -- businesses that include for-profit schools. It also sort of ignores the role organized labor played in helping to raise living standards and expand the middle class in the last century. Maybe it's just a coincidence that both living standards and the middle class are under assault at the same time as organized labor, but on the other hand maybe we just might miss unions when they're gone.
Thing Two: Great Success For Glorious Peoples Republic: The U.S. government's bailout of American International Group was either a tear-jerking success story or one of the greatest disasters in history. It all depends on who you ask. Shocking no one, the U.S. government declared the bailout to be a great triumph, resulting in a profit for the American people, if you do the math right. Andrew Ross Sorkin of The New York Times totes agrees with the government and uses his column to ritually humiliate former TARP inspector general Neil Barofsky, who still insists that the government is using fuzzy math. But others, including the current TARP inspector general, point out that, math aside, bailing out AIG and its creditors like Goldman Sachs created a huge honking moral hazard that will mean more risky financial behavior and bailouts in the future, the Washington Post writes. So, not such a win, then?
Thing Three: The Bank of Mr. Magoo: Remember the Libor scandal? Anybody? Maybe the biggest scandal in the history of forevs? Anyway, it will be coming back soon, whenever the Royal Bank of Scotland has to pay a huge fine, and no one will continue to care. But remember this, when that happens: According to a report in the Wall Street Journal, back in 2008, the British Bankers Association, which is responsible for the care and watering of Libor, an interest rate that only affects every other interest rate in the known universe, once pleaded with the Bank of England for help, saying it could no longer control the monstrosity that Libor had become. And the Bank of England said, "Oh dear, yes, my my my. Libor, you say? Well, that is something. Well, we'll get back to you on that, of course, yes, right away." And of course they didn't, and Libor was manipulated to within an inch of its life, costing everybody untold billions of dollars, the end. The Bank of England: Making US regulators look competent since 2008.
Thing Four: We Don't Need No Stinking Collateral: If there is one thing that banks absolutely hate, it is regulation, and the Dodd-Frank financial-reform act in particular. But don't worry, guys, banks will always find a way around these regulations because that is just what they do. Take, for example, a Dodd-Frank requirement that risky derivatives trades get passed through a central clearinghouse, where the banks will have to post collateral, just in case their derivatives bets go horribly wrong. The trouble with this requirement is that most traders don't have a whole bunch of super-safe Treasury debt lying around to put up as security for their insane derivatives bets. Bloomberg reports that big banks have come up with a nifty work-around: You can simply leave any toxic debt you have with them, they'll lend you Treasury bonds to post as collateral, and you can go on about your way, making insane bets on derivatives. What could possibly go wrong?
Thing Five: iPhone To Rescue U.S. Economy, So Get Back To Work, Cheap Labor: We have good news and bad news about the new iPhone, which will be unveiled tomorrow. You want the good news first? OK, the good news is that so many of these stupid things are going to get sold in the fourth quarter that they could possibly raise U.S. annualized GDP growth by a half a percentage point, according to a JPMorgan Chase economist. Hooray! So now, the bad news: According to the New York Times, the Foxconn plant in China where iPhones are assembled is once again under scrutiny for its labor practices, this time involving accusations of forced labor by students, a/k/a "interns."
Thing Six: Even Danica Patrick Could Not Help GoDaddy Yesterday: A hacker claiming affiliation with the group Anonymous shut down the web-hosting service GoDaddy for several hours yesterday. This is a huge problem for the Interwebs because somehow GoDaddy has become the biggest web-hosting service in the world, on the strength of its advertisements that make men want to drop the nachos and do sex things.
Thing Seven: Let's Please Make A Stupid Deal Already: The latest -- and, we can only pray to whatever dear God we believe in, hopefully the last -- chapter in the interminable effort by commodities trading goliath Glencore to buy all of commodities mining goliath Xstrata unfolded yesterday, as Glencore revealed what it says is its final offer. According to the Wall Street Journal, Glencore raised its offer price ever so slightly and agreed to let Xstrata's CEO hang around the office for six months instead of zero months, so whoopee doo. If the deal ever goes through, it will create a $75 billion trading-and-mining behemoth that will rule the world.
Thing Seven And One Half: On the 11th anniversary of 9/11 -- on a beautiful Tuesday morning in New York, no less -- here is a time-lapse video of the construction of One World Trade Center.
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Calendar Du Jour:
Economic Data:
8:30 a.m. ET: International Trade for July
Corporate Earnings:
None.
Heard On The Tweets:
@michaelsderby: Again and again I hear fiscal cliff cited as major cause of weak growth pace. Put another way, economy's biggest wound is self inflicted.
@JeffreyKleintop: Fed likely to do QE, but if we go over the fiscal cliff this is like getting a flu shot before storming the beach at Normandy.
@ThemisSal: By the way what does "plucky" mean? Cuz im a lilliputian plucky embittered relic. I think I am ok with this?
@pourmecoffee: GoDaddy sites are down. Maybe you shouldn't buy domains based on boobs in commercials next time. Just a thought.
@kellyoxford: Kris Jenner says Honey Boo-Boo's Mom is exploiting her daughter because you get to be judgmental when you live off your daughter's sex tape.
You can follow me on Twitter, too: @markgongloff