Who do You Trust to Handle Inflation?

Nobel Prize winner in economics, Friedrich Hayek or President [can I possibly look any more 'progressive'] Obama.

Read more!

Frances Robles and the Power of Omission

The written word can obviously influence, but what is left unsaid can influence as well. In a way, what is omitted can be more even effective, since the reader is unaware of how they were influenced. I will use a couple of recent articles by the Miami Herald's Frances Robles on the U.S. policy towards Cuba to make my point.

Portions of her Miami Herald article posted on Thursday:

The Brookings Institution think-tank in Washington, D.C., assembled a group of 19 academics, diplomats and ''thinkers'' to chart out a road map for Obama to take action on Cuba.

''Let's forget the hostile regime-change strategy and begin a policy of critical engagement,'' said Vicki Huddleston, the former head of the U.S. Interests Section in Havana who co-chaired the report.

Obama, many conservatives believe, would lose bargaining power and leverage over Cuba if he starts offering Cuba perks before it makes any changes.

Huddleston, who has long urged normalization of relations, said many of the group's members were more conservative in their Cuba policies, but they agreed on all the recommendations.

My observations:

• The Brookings Institution is a liberal think tank. Ms Robles does not ascribe a political point of view to the organization. See below for how the Heritage Foundation--a conservative think-tank-- is typically described in the Miami Herald below.
• There are two references to what conservatives believe.
• Huddleston claims that 'many of the group's members were more conservative in their Cuba policies.' If true, this would add weight to the notion that the think-tank's findings are non-partisan. But Ms Robles leaves that key assertion unchallenged and undocumented.
• I would love to know which persons, 'conservative in their Cuba policies,' the Brookings Institution would have put on a committee whose findings would be released as part of a coordinated strategy to reexamine the U.S. policy towards Cuba with an incoming Democratic Administration. If a liberal think tank would have returned with anything other than ideas for easing restrictions, that would have been an upset worthy a Jimmy Valvano led team.
• The word liberal is not used in the article. Even though Robles 'admits' [an example within an example: I could have used the term 'described' here. By using 'admits', I make Robles seem like a partisan] that Huddleston has 'long urged normalization of relations.' However, even that does not earn her the liberal label, in an article which clearly points out that conservatives have a point of view on this issue.
• Why is this important? Because when people or organizations are described as liberal or conservative, that indicates that they are predisposed to a certain point of view. Which makes their conclusions less influential that if a non-partisan had come to the same conclusion. Think-tanks dream of having their views presented as non-partisan.

Portions of her Miami Herald article posted on Wednesday:

A group of well-known diplomats and academics at The Brookings Institute think tank is expected to issue a report Thursday that also calls for more dialogue with Cuba.

Conservative Cuban-American lobbyist Mauricio Claver-Carone said if anything, momentum for more restrictions is increasing.

''All of a sudden, everyone is paying attention,'' said Sarah Stephens, director of the Center for Democracy in the Americas, which advocates more normalized relations with Cuba. ``Things seems to be changing a little bit in Cuba, and that feeds off itself.''

Most conservative advocates believe it is unfathomable to offer Cuba anything, such as increased travel to the island or the ability to make purchases on credit, without a real show of change on the island.

My observations:

• The views of the Center for Democracy in Americas--a group who sympathizes with Castro and Chavez--are not characterized.
• Again, the Brookings Institution's views are not characterized.
• Again, two more references to conservatives - total for the two articles is four.
• Again, zero references to liberals.
• Again, Ms Robles declines to characterize the views of someone as liberal, Ms Stephens, even though the article acknowledges that there is a conservative position on the issue and that Ms Stephens is the director of a group which 'advocates more normalized relations with Cuba.'
• After reading both her articles, it would be fair to ask; What would it take for Ms Robles to describe anyone as a liberal on this issue?

Examples of how the Heritage Foundation has been described in the Miami Herald recently:

• Feb 13 - Economic stimulus plan called 'unfocused' -

  ''All this is 25 years of government expansion jammed into one bill and sold as stimulus,'' said Brian Riedl, the director of budget analysis for the Heritage Foundation, a conservative policy research group.

• Feb 18 - Analysis: Obama offers carrots for mortgage firms -

  "You still have the very serious question of what kind of incentives you're providing for what's essentially bad behavior," said David C. John, an analyst at the conservative Heritage Foundation.

All articles referenced are copied in full at end of post, because no one, and we mean no one, pays for the Miami Herald's archive services.

----------------------------------------------------------------------------
Think tank urges Obama to ease U.S. policy on Cuba

Posted on Thu, Feb. 26, 2009

BY FRANCES ROBLES

President Barack Obama should not wait for Congress to begin making key changes in Cuba policy and should start by using his presidential authority to make adjustments to the U.S. trade embargo, a new report issued Thursday said.

The Brookings Institution think-tank in Washington, D.C., assembled a group of 19 academics, diplomats and ''thinkers'' to chart out a road map for Obama to take action on Cuba. The panel -- led by a former top U.S. diplomat in Havana -- argues that Washington's hostile rhetoric has failed to make changes in Cuba and needs to stop.

''Let's forget the hostile regime-change strategy and begin a policy of critical engagement,'' said Vicki Huddleston, the former head of the U.S. Interests Section in Havana who co-chaired the report. ``This means no shouting across the street at each other.''

The report, unveiled in Miami, comes on the heels of a series of moves that signal what some Cuba experts consider serious momentum to change Cuba policy. On Wednesday, the U.S. House of Representatives passed a budget bill that defunded enforcement of the Cuban family travel ban and, among other things, offered more licenses to travel to Cuba. The Senate Foreign Relations committee released a report Monday making many of the same recommendations that the Brookings panel came up with.

Among the Brookings' U.S. Policy Toward A Cuba in Transition group's suggestions:

• Allow more ''purposeful travel'' to Cuba for American academics, artists and such.

• Review Cuba's inclusion on the U.S. terrorist nation list.

• License the sale of radios and TVs.

• Once the Cuban government begins responding with serious human rights improvements, license more imports from Cuba and goods to be sold to the island.

''The president can do this himself,'' Huddleston said. ``It would be a big win in terms of his image and a big win in terms of getting away from failures of the past.''

Many Cuban exile leaders -- and South Florida's Cuban-American delegation in Congress -- oppose such measures, because they believe Cuba should release political prisoners and make other human rights improvements before Washington makes any concessions. Obama, many conservatives believe, would lose bargaining power and leverage over Cuba if he starts offering Cuba perks before it makes any changes.

The report urges the president not to set ''tit for tat'' conditions for any changes he makes.

Huddleston, who has long urged normalization of relations, said many of the group's members were more conservative in their Cuba policies, but they agreed on all the recommendations. They did not agree, she said, on whether to lift the travel ban altogether.

They did agree that authority should be put back in the president's hands.

''Engagement does not mean approval of the Cuban government's policies, nor should it indicate a wish to micromanage internal developments in Cuba,'' the report said. ``Legitimate changes in Cuba will only be made by Cubans.''
---------------------------------------------------------------------------------
House to cut Cuba travel enforcement

Posted on Wed, Feb. 25, 2009

BY FRANCES ROBLES

The U.S. House of Representatives passed a huge spending bill Wednesday that tweaked U.S.-Cuba policy, making it easier for Cuban Americans to get away with illegally traveling to the communist country.

The bill, which is likely to face some opposition in the Senate, cuts off funding for enforcement of the rules that limit how often Cubans living here can visit home.

The 2009 budget also contains several revisions to Cuba policy that signal a trend toward further engagement with Cuba -- a momentum that could lead to the end of more sanctions, Cuba-watchers said. The budget bill passed the House days after the Senate Foreign Relations committee and a senior Republican on the panel issued a strongly worded report that said the embargo's isolation of Cuba wasn't working.

Indiana Sen. Richard Lugar recommended increased engagement in drug trafficking and migration but fell short of advocating a wholesale lifting of the U.S. trade embargo against Cuba. A group of well-known diplomats and academics at The Brookings Institute think tank is expected to issue a report Thursday that also calls for more dialogue with Cuba.

A few black representatives in Congress and aide groups were scheduled to meet Wednesday night with Cuban diplomats in Washington to discuss the state of U.S.-Cuba relations.

''All of these pieces have to be viewed in the aggregate: it's clearly a trend,'' said Rep. Bill Delahunt, D-Mass., who sponsored a bill that would allow Americans to travel to Cuba. ``The trend is to engage incrementally, and travel is a centerpiece of that. There is a momentum that's evolving here.''

Cuban-American lawmakers scoffed at the suggestion that the recent flurry might signal a significant change on Cuba.

BATTLE AHEAD

The budget bill, which passed the House on a 245-178 vote, was hatched behind closed doors, they say, and it faces a tough battle in the Senate.

Sen. Robert Menendez, D-NJ, and Sen. Mel Martinez, R-FL, have told the Senate that they oppose any change in the U.S.-Cuba policy.

''There is nothing new here,'' said Rep. Lincoln Diaz-Balart, a South Florida Republican. ``I'm fascinated when the press thinks all this is new, when all it is is a restatement of people's long-held positions.''

Conservative Cuban-American lobbyist Mauricio Claver-Carone said if anything, momentum for more restrictions is increasing.

''I'll begin to worry when members that formerly supported current Cuba policy switch their position,'' he said. ``Thus far, the only true momentum is the other way, as the number of supporters of current policy has dramatically increased every single Congress in the last six years, not vice versa.''

The latest movement toward freer travel to Cuba is an offshoot of President Barack Obama's campaign promise to allow Cuban-Americans to visit their families on the island more frequently. Former President George W. Bush changed the rules that allowed people to visit once a year, limiting those visits to every three years.

Obama is expected to allow Cuban Americans to visit annually, but he has yet to move on the campaign promise.

Cuba watchers say it's unclear whether he will lift restrictions not just for Cuban Americans, but for American academics, church groups and others as well. Key administration posts in charge of such decisions have yet to be filled.

When Bush created the rule in 2004, it was immediately controversial. Cuban immigrants with a dying parent were forced to choose: visit your loved one alive now -- or attend the funeral later.

''All of a sudden, everyone is paying attention,'' said Sarah Stephens, director of the Center for Democracy in the Americas, which advocates more normalized relations with Cuba. ``Things seems to be changing a little bit in Cuba, and that feeds off itself.''

Jaime Suchlicki, director of the University of Miami's Institute for Cuban and Cuban American Studies, said the bills moving through Congress are like ''oncoming trains'' destined to derail.

''There is a rush to put pressure on [Secretary of State Hillary] Clinton and Obama on Cuba,'' he said.

WAITING GAME

Obama should not bow to pressure, he said, and should instead wait for serious concessions from the Cuban government.

The debate over changing Cuba policy is largely over who should make the first move. Most conservative advocates believe it is unfathomable to offer Cuba anything, such as increased travel to the island or the ability to make purchases on credit, without a real show of change on the island. For the United States to make the first move, Suchlicki said, would be ``giving away its foreign policy.''
---------------------------------------------------------------------

Read more!

The Government on Steroids Era

Finally, I found a silver lining. A downsized one, of course. Here goes; Unlike in MLB, we know when exactly when the Government on Steroids Era began, September 2008. It began under Bush, crushed McCain and then found it's anabolic legs under Obama. It even came with a motto: Buy HGH, sell Lowe's [and everything else in the private sector].

David Brooks points the fickle finger of fate at the challenges facing the Obama administration, and I almost wish I hadn't read it.

All in all, I can see why the markets are nervous and dropping. And it’s also clear that we’re on the cusp of the biggest political experiment of our lifetimes. If Obama is mostly successful, then the epistemological skepticism natural to conservatives will have been discredited. We will know that highly trained government experts are capable of quickly designing and executing top-down transformational change. If they mostly fail, then liberalism will suffer a grievous blow, and conservatives will be called upon to restore order and sanity.

Not only do I think they can't do it--neither does Brooks obviously--I don't think any new Administration is capable of doing anything quickly and well, let alone 'top-down transformational change.' But it's worse than that, Brooks is being polite--just like I'm being polite by not saying he's sucking up--when he refers to 'highly trained government experts.' This Administration, like all others, are staffed based on a combination of job skills and political necessity.

Mrs Clinton is not whom Obama would prefer to represent his foreign policy, the lady who called her a monster is, but he can't have her because she said it on video. Biden is VP partly because he is male and thoroughly white. Geithner is a compromised political liability, but the learning curve would be too steep for anyone else in these circumstances. [Noting the Commerce Secretary trial and error appointment technique is, like the actor Alan Swann, beneath me]. All these people are new to their roles and bring with them other new people, not because of their expertise, but because they are trusted by their political benefactors. Trust in this case means they would go to jail for them. Finally, our president is one month into his first executive job [the campaign banter about how running a campaign is comparable to the demands of the presidency having mercifully subsided].

It's one thing to say that we hope the changes contemplated work out for our sake. It is another to view these circumstances objectively and have reasonable expectations as to their success.

Nationalizing Banks -
An Example of The Government on Steroids Era

Incredibly, in just the last few weeks, the nationalization of the banking system has seemingly become a done deal. It will take a few weeks to work its way through the political classes. The Administration's denials of plans to nationalize are very specific so as to allow room for the subsequent backpedaling. Here is what Bernanke said:

... nationalization is when the government seizes the bank and zeros out the shareholders and begins to manage and run the bank. And, we don't plan anything like that.

So when they do nationalize, we know it won't be 'like THAT.'

Check out the who's who of those in favor of that policy. Everyone stresses that it should only be a short-term solution--the economist's version of the Seinfeldian 'not that there's anything wrong with that.'

The roundtable on the ABC political show, This Week, on Feb 22 was instructive. George Will, Nouriel Roubini and Paul Krugman all agreed that nationalization would happen. Even George Will could not muster an argument against it. I was surprised that Will did not raise any concerns that the nationalization would be temporary or short-term.

But then Tyler Cowen comes along and raises a rather elementary issue which incredibly has been under-addressed. Who or what are we bailing out? Banks or their holding companies?

Turns out that there is a reason that a lot of the initial TARP money never made it to the actual banks and therefore could not have achieved their initially stated purpose; to inject liquidity into the banking system. Their parent holding companies won't give it to them. An excerpt from a NY Times Op-Ed piece:

While TARP has been generous with bank holding companies, these companies have not been so generous with their banks. Four large holding companies — JP Morgan, Citigroup, Bank of America and Wells Fargo — initially received a total of $90 billion in TARP money in the fall, but by the end of 2008 they had contributed less than $15 billion in equity capital to their subsidiary banks.

The holding companies seem to have invested most of their TARP money in their other businesses or else retained the option to do so by keeping it in deposit accounts, even as the capital of their banks decreased. At the same time the banks, which provide the majority of loans to large corporate borrowers, drastically reduced lending to new borrowers.

It’s easy to see why holding companies would withhold capital from their troubled banks. If a bank is insolvent — as many are now believed to be — and the government has to take it over, the holding company loses any capital it gave to the bank. Rather than take that risk, the holding company can opt to spend its money elsewhere, perhaps on trading of its own.

But this is not a good use of scarce capital. We might end up with too much of this proprietary trading and too little lending. It also means that when it comes time to recapitalize banks there is a bigger hole to fill, and when banks fail there is less capital available to meet the government’s obligations to insured depositors and other creditors. Keeping money at the holding company may benefit its shareholders, but it is costly for taxpayers.

Oh well, maybe the rookie--I mean Obama, not Cameron Maybin, in whom we do not doubt--will work out. But honestly, do you think the people who voted for Obama fully contemplated the 'biggest political experiment of our lifetimes.'

Articles referenced are copied in full at end of post.

---------------------------------------------------------------------------------
The Big Test - By DAVID BROOKS

February 24, 2009 - Op-Ed Columnist

“We cannot successfully address any of our problems without addressing all of them.”

Barack Obama, Feb. 21, 2009

When I was a freshman in college, I was assigned “Reflections on the Revolution in France” by Edmund Burke. I loathed the book. Burke argued that each individual’s private stock of reason is small and that political decisions should be guided by the accumulated wisdom of the ages. Change is necessary, Burke continued, but it should be gradual, not disruptive. For a young democratic socialist, hoping to help begin the world anew, this seemed like a reactionary retreat into passivity.

Over the years, I have come to see that Burke had a point. The political history of the 20th century is the history of social-engineering projects executed by well-intentioned people that began well and ended badly. There were big errors like communism, but also lesser ones, like a Vietnam War designed by the best and the brightest, urban renewal efforts that decimated neighborhoods, welfare policies that had the unintended effect of weakening families and development programs that left a string of white elephant projects across the world.

These experiences drove me toward the crooked timber school of public philosophy: Michael Oakeshott, Isaiah Berlin, Edward Banfield, Reinhold Niebuhr, Friedrich Hayek, Clinton Rossiter and George Orwell. These writers — some left, some right — had a sense of epistemological modesty. They knew how little we can know. They understood that we are strangers to ourselves and society is an immeasurably complex organism. They tended to be skeptical of technocratic, rationalist planning and suspicious of schemes to reorganize society from the top down.

Before long, I was no longer a liberal. Liberals are more optimistic about the capacity of individual reason and the government’s ability to execute transformational change. They have more faith in the power of social science, macroeconomic models and 10-point programs.

Readers of this column know that I am a great admirer of Barack Obama and those around him. And yet the gap between my epistemological modesty and their liberal worldviews has been evident over the past few weeks. The people in the administration are surrounded by a galaxy of unknowns, and yet they see this economic crisis as an opportunity to expand their reach, to take bigger risks and, as Obama said on Saturday, to tackle every major problem at once.

President Obama has concentrated enormous power on a few aides in the West Wing of the White House. These aides are unrolling a rapid string of plans: to create three million jobs, to redesign the health care system, to save the auto industry, to revive the housing industry, to reinvent the energy sector, to revitalize the banks, to reform the schools — and to do it all while cutting the deficit in half.

If ever this kind of domestic revolution were possible, this is the time and these are the people to do it. The crisis demands a large response. The people around Obama are smart and sober. Their plans are bold but seem supple and chastened by a realistic sensibility.

Yet they set off my Burkean alarm bells. I fear that in trying to do everything at once, they will do nothing well. I fear that we have a group of people who haven’t even learned to use their new phone system trying to redesign half the U.S. economy. I fear they are going to try to undertake the biggest administrative challenge in American history while refusing to hire the people who can help the most: agency veterans who are registered lobbyists.

I worry that we’re operating far beyond our economic knowledge. Every time the administration releases an initiative, I read 20 different economists with 20 different opinions. I worry that we lack the political structures to regain fiscal control. Deficits are exploding, and the president clearly wants to restrain them. But there’s no evidence that Democrats and Republicans in Congress have the courage or the mutual trust required to share the blame when taxes have to rise and benefits have to be cut.

All in all, I can see why the markets are nervous and dropping. And it’s also clear that we’re on the cusp of the biggest political experiment of our lifetimes. If Obama is mostly successful, then the epistemological skepticism natural to conservatives will have been discredited. We will know that highly trained government experts are capable of quickly designing and executing top-down transformational change. If they mostly fail, then liberalism will suffer a grievous blow, and conservatives will be called upon to restore order and sanity.

It’ll be interesting to see who’s right. But I can’t even root for my own vindication. The costs are too high. I have to go to the keyboard each morning hoping Barack Obama is going to prove me wrong.
-----------------------------------------------------------------------------------
Banks vs. bank holding companies - Tyler Cowen

I continue to see many bloggers suggesting that bank nationalization is a fait accompli and that anyone who isn't on board right now is in denial. It is far less common that bloggers give serious consideration to the difference between a bank and a bank holding company. In fact I usually don't see that critical distinction mentioned at all.

If the government nationalized (or "pre-privatized"...whatever) Citibank, Citicorp would go bankrupt and we would be back at a Lehman Brothers scenario again. So the government would have to take over Citicorp too. That goes way, way beyond anything the Swedes did or for that matter it goes well beyond WaMu. Shall I turn the mike over to Wikipedia?

Citigroup was formed from one of the world's largest mergers in history by combining the banking giant Citicorp and financial conglomerate Travelers Group on April 7, 1998. Citigroup Inc. has the world's largest financial services network, spanning 107 countries with approximately 12,000 offices worldwide. The company employs approximately 300,000 staff around the world, and holds over 200 million customer accounts in more than 100 countries. It is the world's largest bank by revenues as of 2008.

Thinking through the implications of said nationalization for the counterparty positions of a bank holding company, or its role in the commercial paper market, is mind-boggling. Neither the FDIC (which generally does an OK job) nor any other government agency is in any way prepared for this kind of management task. It has very little to do with standard FDIC procedures. All I hear about is "bank" this, "bank" that, etc. but again little or no talk of the bank holding company.

Of course this is only a problem for the five or six biggest financial institutions but those are precisely the issue at hand.

On nationalization, Bernanke is very much on the ball. He said this:

Federal Reserve Chairman Ben Bernanke said this week, is “that you tend to lose the franchise value, that the counterparties and others don’t want to deal with you because they don’t know your future.”

I usually don't like to speak so negatively, but it's the advocates of nationalization who are in denial. There is a belief that Obama, Bernanke, and/or Geithner are somehow spineless or in the pocket of the banking lobby. The sadder truth is that they understand just how ill-prepared the U.S. government, or the Fed, would be to run such an enterprise.

I do understand that if all the water runs out of the sink, as it may, nationalization will come in some form or another, however disastrous that may be. But the desire to postpone it until the last possible moment, and the desire to pursue even a small chance of avoiding nationalization, are signs of wisdom, not cowardice.

When you read about nationalization, and see only the word "bank," and not "bank holding company," be very afraid of the advice on tap.

Addendum: Here is a different but related piece on banks vs. bank holding companies.
------------------------------------------------------------------------------------
The Bailout Is Robbing the Banks - By JOHN C. COATES and DAVID S. SCHARFSTEIN

February 18, 2009

MANY Americans are angry at banks for taking bailout money while still cutting back on lending. But the government is also to blame. For reasons that remain unclear, the Troubled Asset Relief Program has channeled aid to bank holding companies rather than banks. The Obama administration’s new Financial Stability Plan will have more influence on bank lending if it actually directs its support to banks.

To see why, it’s important to understand the distinction between banks and bank holding companies. Banks take deposits and make loans to consumers and corporations. Bank holding companies own or control these banks. The big holding companies also own other businesses, including ones that execute trades both on their clients’ behalf and for themselves.

It would seem obvious that helping banks, not holding companies, would be the most direct way to stimulate bank lending. But when TARP purchased preferred stock and warrants, it bought them from holding companies, not their bank subsidiaries.

While TARP has been generous with bank holding companies, these companies have not been so generous with their banks. Four large holding companies — JP Morgan, Citigroup, Bank of America and Wells Fargo — initially received a total of $90 billion in TARP money in the fall, but by the end of 2008 they had contributed less than $15 billion in equity capital to their subsidiary banks.

The holding companies seem to have invested most of their TARP money in their other businesses or else retained the option to do so by keeping it in deposit accounts, even as the capital of their banks decreased. At the same time the banks, which provide the majority of loans to large corporate borrowers, drastically reduced lending to new borrowers.

It’s easy to see why holding companies would withhold capital from their troubled banks. If a bank is insolvent — as many are now believed to be — and the government has to take it over, the holding company loses any capital it gave to the bank. Rather than take that risk, the holding company can opt to spend its money elsewhere, perhaps on trading of its own.

But this is not a good use of scarce capital. We might end up with too much of this proprietary trading and too little lending. It also means that when it comes time to recapitalize banks there is a bigger hole to fill, and when banks fail there is less capital available to meet the government’s obligations to insured depositors and other creditors. Keeping money at the holding company may benefit its shareholders, but it is costly for taxpayers.

Bailouts, at the very least, should reach their target. When Washington wanted to help Chrysler, it gave money to Chrysler. It did not write a blank check to Cerberus, the private equity firm that owns Chrysler, in the hope that the money would somehow find its way to the carmaker and not to the other companies Cerberus owns.

Some politicians, frustrated that the government’s costly interventions have not had their desired effect, have wanted to mandate higher levels of bank lending. Others have tried shaming chief executives of financial institutions into lending more, as when Representative Mike Capuano of Massachusetts admonished eight of them who came before the House Financial Services Committee: “Start loaning the money that we gave you. Get it on the street!”

It would be more effective to simply ensure that the Financial Stability Plan is directed at banks. When the government buys stock, it should buy bank stock. And if it chooses to buy stock in holding companies, it should at least require that the new capital reaches the bank and non-bank subsidiaries that the government wishes to support. If the government chooses to help private investors buy toxic bank assets, as the planned Public-Private Investment Fund is supposed to do, it should not allow the banks to send those investments to their holding companies. And if the government decides to guarantee debt, it should guarantee the debt of banks, not of holding companies.

The Obama administration seems to understand that reviving bank lending is key to economic recovery. Now it needs to make sure that the banks get the money.

John C. Coates is a professor at Harvard Law School. David S. Scharfstein is a professor of finance at Harvard Business School.
-------------------------------------------------------------------------------
Aside from myself, here are the folks who are in favor of temporarily Nationalizing the banks, and then spinning them back out:

Alan Greenspan
Gordon Brown, UK PM
Senate Banking Committee Chairman Christopher Dodd
Senator Chuck Schumer
Sen. Lindsey Graham
House Speaker Nancy Pelosi
Republicans (some)
Joseph Stiglitz
Paul Krugman
Alan S. Blinder, Princeton
Nassim Taleb
Nouriel Roubini
Greg Mankiw
J. Bradford DeLong
Elizabeth Warren, TARP Oversight Panel
Dennis Gartman
Chris Whalen
Josh Rosner
Jeff Matthews
John Mauldin
Jack McHugh
Bill King
Matthew Richardson
Dylan Ratigan (CNBC, Daily Beast)
Jesse Eisinger, Conde Nast Portfolio
Martin Wolf, FT
Aaron Task (Yahoo Tech Ticker)
Paul Kedrosky (Infectious Greed, CNBC)
Nicholas Kristof (New York Times)
Mark Gongloff (WSJ)
Richard Parker (Newsweek)
Michael Hirsh (Newsweek)
David Reilly (Bloomberg)
Paul Vigna (Dow Jones)
Henry Blodget (Silicon Alley)
Willem Buiter (FT)
Adam Posen (Peterson Institute for International Economics)
Jeff Macke
Todd Harrison
Calculated Risk (Preprivatize the Banks)
Mark Thoma (Economistsview)
Karl Denninger
naked capitalism
Eddy Elfenbein (Crossing Wall Street)
Bronte Capital
Aaron Krowne Mortgage Lender Implode-O-Meter
Prieur du Plessis (investmentpostcards)
Roger Ehrenberg, Information Arbitrage
Felix Salmon
Interfluidity (Nationalize Like Real Capitalists)
Urban Digs

And those opposed:

Ben Bernanke
President Obama
Tim Geithner
Lawrence H. Summers
Financial Services Committee Chairman Barney Frank
Republican Senator Jon Kyl
George Soros
Meredith Whitney, Oppenheimer
Deroy Murdock (NRO)
Larry Kudlow
James Cramer
Hale Stewart
Tyler Cowen
---------------------------------------------------------------------

Read more!

Ash Wednesday -- Slowing the Process of Rot

Slowing the process of rot may not seem like a worthy goal, but give Fr Vallee a chance to explain.

I know that I usually have jokes, songs and stories for you. But today we deal with a topic which is not so funny or entertaining. Today, alas we deal with sin and ashes. We will get to the ashes later.

As for sin, sin is so abidingly odd. I dare to preach to you young girls today on the topic of sin. I know you do not think of yourselves as young, but even the juniors among you, without your rings, or the seniors among you, with your rings, are so young – too young to know what real sin is or might be. Nonetheless, the Church tells me that I must speak to you of sin today ... so odd and so useless -- no matter how eloquent I might be or how smart you might be! You cannot know what sin really is until it has entangled you in its wormy windings. Most of you do not, and cannot, know the true nature of sin, at least not yet. Sin is not to be found in the simple transgressions of your aberrant actions – those things are laughably trivial. Sin will be found in the tortured lies of your hearts. The first time you lie to someone you love, even for good reasons, or compromise on what you really believe, then you will begin to understand sin, then sin will sink softly into your hearts and your souls like a too-sharp knife, which will trouble your sleep and haunt your dreams. If you have never lain awake at night, afraid and anxious, you have no clue as to what the terrible and terrifying meaning of a conscience is.

I remember, when I was 12 and my parents divorced, I laid awake on my top bunk-bed in North Miami Beach thinking it was my fault. Absurd! It was not my fault. It was theirs. Yet, I blamed myself. The fact that my conscience was too-tender did not make me a saint; it made me a neurotic little boy. In some ways, that is what I still tend to be. There is such a fine line between sanctity and masochistic self-flagellation. True humility is to see yourself as you are seen in the eyes of God, not more than you are and not less than you are. Too often, on either score, we get it wrong – so horribly and tortuously wrong. Lent is the time to try – though we will probably fail – to get it right. Maybe this year we will get wrong. But, if we try to move toward it, even just a bit this year, we may eventually begin to get it right. Those ashes you will wear on your foreheads are not decorative, mine are not either. They are an outward signs of inward hurt. And make no mistake, it is through the doorway of unhealed hurt that sin slips into our hearts and begins the slow and inexorable process of rot.

----------------------------------------------------------------------------
We have not built up a number of Fr Vallee's homilies on this blog - just search 'Vallee' in the box found in the upper left hand corner.

The email address to request to be put on Vallee's email distribution list is Cioran262@aol.com
---------------------------------------------------------------------

Read more!

Life: Imagine the Potential

There is a Catholic ad which lasts 41 seconds, has no spoken words, just sonogram images of an unborn child accompanied with text and music, no mention of abortion in the text and concludes with a narrative which celebrates Barack Obama's life story. It is everything the secular world pretends to support; it is positive, uplifting in tone and non-judgmental. Please check out the ad by Catholic Vote.

The ad has been deemed either too political or offensive for a number of programming venues, including NBC's Super Bowl and most recently by CNN. After watching the ad, if you doubt the cultural battle we are in, just remember that there are people in our country--people who decide what is acceptable and moral for public consumption--who believe that this ad is not fit for polite company.

At times I have disbelief over the nature of their unbelief. But I respect them because, unlike many ostensibly on our side, they display an unyielding commitment to their causes; unrestricted abortion on demand, full acceptance--not just tolerance--of homosexual activities and the marginalization of people of faith [see Rick Warren]. Culturally, they are our enemies. We can either fight them, the right way, or capitulate.

Articles referenced are copied in full at end of post.

----------------------------------------------------------------------------------
CNN Punts Pro-Life Obama Ad -- BY Tom McFeely

Friday, February 20, 2009 1:38 PM

Why is this life-affirming ad too hot for network TV to handle?

Last month, NBC sacked plans by CatholicVote.org, the producers of the ad, to air it during the Super Bowl broadcast.

Now CNN has rejected CatholicVote.org’s request to purchase a slot to air it during CNN’s coverage of President Barack Obama’s State of the Union address.

According to this press release from Fidelis, the parent organization of CatholicVote.org, a CNN official said the network is refusing to broadcast of the ad because it “suggests a position in favor of the advocacy message, without having permission of the persons involved.”

Since the ad celebrates the life of Barack Obama, and doesn’t even mention the dreaded “A” word — abortion — CNN’s response is puzzling.

“This is absurd,” Fidelis president Brian Burch said in the press release. “Our ad does not suggest that Barack Obama is pro-life. Instead, we make the obvious point that Obama’s mother gave birth to a child that ultimately became the 1st African American President. This is a fact, not an opinion.”

CNN’s stated reason for rejected the pro-life ad is all the more dubious given the network’s willingness in the past to air a pro-abortion ad sponsored by NARAL.

In 2005, CNN aired a NARAL ad “that suggested that then Judge John Roberts supported violence against abortion clinics,” Fidelis says in its press release. “FactCheck.org described the NARAL ad: ‘An abortion-rights group is running an attack ad accusing Supreme Court nominee John Roberts of filing legal papers ‘supporting . . . a convicted clinic bomber’ and of having an ideology that ‘leads him to excuse violence against other Americans’ It shows images of a bombed clinic in Birmingham, Alabama. The ad is false.’”

Said Burch, “CNN is willing to run ads insinuating that a federal judge supports violent criminal activity, but it won’t allow an ad celebrating the life of Barack Obama. It’s a double standard from bizarro world.”
-----------------------------------------------------------------------------------
Obama’s Selection of Evangelical Pastor Rick Warren for Inauguration Sparks Gay Outrage - The LGBT community is questioning Obama's commitment to gay rights - By Dan Gilgoff

Posted December 18, 2008

The selection of megachurch pastor Rick Warren to deliver the invocation at Barack Obama's inauguration has fueled outrage and protests from the gay community, who take issue with Warren's statements of disapproval for homosexuality and his support of Proposition 8, the gay marriage ban that passed in California on Election Day.

Gay rights activists said the Warren announcement came at time when the movement is already apprehensive about how forcefully the Obama administration will embrace their issues.

"The Obama team has sent a very uplifting message that positive change is coming for LGBT [lesbian, gay, bisexual, and transgender] Americans, but we haven't seen it yet," says David Smith, vice president of the Human Rights Campaign, the nation's largest gay rights group "There has been no concrete evidence of inclusion. That's the environment in which this Warren announcement happened—it exacerbates the level of disappointment that exists."

Leaders in the gay rights movement said that they were impressed with the degree to which the Obama transition team was including issues of concerns to the LGBT community in drawing up a policy agenda, but that such outreach didn't make them more willing to accept the news of Warren's high-profile role at the inauguration.

The inauguration represents the dawn of his presidency, so the symbolism is unmistakable," says Smith. "To have a man who so vociferously opposes LGBT equality... it almost gives license that the Reverend's views are somehow tolerable or acceptable."

"The president-elect has set up a transition team that is clearly engaging our community about policies, but we can't ignore Warren," adds Darlene Nipper, executive director of the National Gay and Lesbian Task Force. "But when people sit down and listen to an inauguration, they are looking to see themselves reflected."

Warren, author of the bestselling Purpose-Driven Life and pastor of the Saddleback Church in Orange County, Calif., has sought to distance himself from Christian right leaders who frame evangelical political concerns mostly around fighting abortion rights and gay rights. At the same time, Warren opposes gay marriage and gay civil unions and has said that he objects to the homosexual lifestyle.

Responding to questions about Warren at a press conference in Chicago today, Obama said that America needs to "come together," even when there's disagreement on social issues, according to the Associated Press. "That dialogue is part of what my campaign is all about," he said.

In an interview today, Obama spokeswoman Linda Douglass defended the Warren selection. "It would be a mistake to assume that there were a lot of political considerations made here," she says. "This was a decision that was based on President-elect Obama's commitment to finding common ground with people with conflicting and divergent news."

"The important thing here," Douglass continued, "is that the President-elect clearly disagrees with those views and is a strong proponent of gay and lesbian rights and has a long record of championing those rights... It's his views on LGBT issues that are the views that matter."

A handful of gay rights organizations have released letters and statements calling for Obama to rescind his invitation to Warren.

"Your invitation to Reverend Rick Warren to deliver the invocation at your inauguration is a genuine blow to LGBT Americans," read a letter from the Human Rights Campaign to the President-elect. "...[B ]y inviting Rick Warren to your inauguration, you have tarnished the view that gay, lesbian, bisexual, and transgender Americans have a place at your table."
---------------------------------------------------------------------

Read more!

MLB Luxury Tax

The New York Yankees own the luxury tax - they have paid:

• 2008 - $26.9 million
• 2007 - $23.9 million
• 2005 - $34.0 million
• $148.5 million in the six seasons since it began - 90% of the total
• Luxury taxes are paid on Jan 31st of the following year.
• Luxury tax = 40% rate for the amount over $155 million, the Tigers paid at a 22.5% rate [their tax was $1.3 million] because they exceeded the specified threshold for the first time.

------------------------------------------------------------------------
Yanks have $26.9 million luxury tax

APNewsBreak: By RONALD BLUM

The New York Yankees not only failed to make the playoffs, they were hit with their highest luxury tax in three years.

The Yankees were assessed a $26.9 million tax by the commissioner's office on Monday, up from $23.9 million last year and their biggest bill since paying nearly $34 million for 2005.

The Detroit Tigers, who also failed to qualify for the postseason, are the only other team that must pay tax and owe $1.3 million to the commissioner's office.

Checks are due by Jan. 31.

Both teams got little for what they spent. The Yankees' streak of 13 consecutive playoff appearances ended, and they finished third in the AL East at 89-73, prompting them to spend nearly a quarter-billion dollars to sign pitchers CC Sabathia and A.J. Burnett.

Detroit entered the year with lofty expectations after acquiring Miguel Cabrera and Dontrelle Willis but went 74-88 and finished last in the AL Central.

While the Yankees pay at a 40 percent rate for the amount over $155 million, the Tigers pay at a 22.5 percent rate because they exceeded the specified threshold for the first time.

This year's figure brings the Yankees' total tax to $148.5 million in the six seasons since it began - 90 percent of the total.

Before this year, the only other teams to pay were the Boston Red Sox, who owed $13.9 million for exceeding the threshold in four seasons, and the Los Angeles Angels, who paid $927,000 in 2004.

New York's payroll was $222.2 million and Detroit was second at $160.8 million for the purpose of the luxury tax. To computer it, Major League Baseball uses the average annual values of contracts for players on 40-man rosters and adds benefits.

The threshold rose from $148 million last year to $155 million this season. It goes up to $162 million next year and rises by $8 million in each of the following two seasons.
-----------------------------------------------------------------------------

Read more!

War on Drugs

WSJ article - The War on Drugs Is a Failure - We should focus instead on reducing harm to users and on tackling organized crime.

FEBRUARY 23, 2009

By FERNANDO HENRIQUE CARDOSO, CéSAR GAVIRIA and ERNESTO ZEDILLO

The war on drugs has failed. And it's high time to replace an ineffective strategy with more humane and efficient drug policies. This is the central message of the report by the Latin American Commission on Drugs and Democracy we presented to the public recently in Rio de Janeiro.

Prohibitionist policies based on eradication, interdiction and criminalization of consumption simply haven't worked. Violence and the organized crime associated with the narcotics trade remain critical problems in our countries. Latin America remains the world's largest exporter of cocaine and cannabis, and is fast becoming a major supplier of opium and heroin. Today, we are further than ever from the goal of eradicating drugs.

Over the last 30 years, Colombia implemented all conceivable measures to fight the drug trade in a massive effort where the benefits were not proportional to the resources invested. Despite the country's achievements in lowering levels of violence and crime, the areas of illegal cultivation are again expanding. In Mexico -- another epicenter of drug trafficking -- narcotics-related violence has claimed more than 5,000 lives in the past year alone.

The revision of U.S.-inspired drug policies is urgent in light of the rising levels of violence and corruption associated with narcotics. The alarming power of the drug cartels is leading to a criminalization of politics and a politicization of crime. And the corruption of the judicial and political system is undermining the foundations of democracy in several Latin American countries.

The first step in the search for alternative solutions is to acknowledge the disastrous consequences of current policies. Next, we must shatter the taboos that inhibit public debate about drugs in our societies. Antinarcotic policies are firmly rooted in prejudices and fears that sometimes bear little relation to reality. The association of drugs with crime segregates addicts in closed circles where they become even more exposed to organized crime.

In order to drastically reduce the harm caused by narcotics, the long-term solution is to reduce demand for drugs in the main consumer countries. To move in this direction, it is essential to differentiate among illicit substances according to the harm they inflict on people's health, and the harm drugs cause to the social fabric.

In this spirit, we propose a paradigm shift in drug policies based on three guiding principles: Reduce the harm caused by drugs, decrease drug consumption through education, and aggressively combat organized crime. To translate this new paradigm into action we must start by changing the status of addicts from drug buyers in the illegal market to patients cared for by the public-health system.

We also propose the careful evaluation, from a public-health standpoint, of the possibility of decriminalizing the possession of cannabis for personal use. Cannabis is by far the most widely used drug in Latin America, and we acknowledge that its consumption has an adverse impact on health. But the available empirical evidence shows that the hazards caused by cannabis are similar to the harm caused by alcohol or tobacco.

If we want to effectively curb drug use, we should look to the campaign against tobacco consumption. The success of this campaign illustrates the effectiveness of prevention campaigns based on clear language and arguments consistent with individual experience. Likewise, statements by former addicts about the dangers of drugs will be far more compelling to current users than threats of repression or virtuous exhortations against drug use.

Such educational campaigns must be targeted at youth, by far the largest contingent of users and of those killed in the drug wars. The campaigns should also stress each person's responsibility toward the rising violence and corruption associated with the narcotics trade. By treating consumption as a matter of public health, we will enable police to focus their efforts on the critical issue: the fight against organized crime.

A growing number of political, civic and cultural leaders, mindful of the failure of our current drug policy, have publicly called for a major policy shift. Creating alternative policies is the task of many: educators, health professionals, spiritual leaders and policy makers. Each country's search for new policies must be consistent with its history and culture. But to be effective, the new paradigm must focus on health and education -- not repression.

Drugs are a threat that cuts across borders, which is why Latin America must establish dialogue with the United States and the European Union to develop workable alternatives to the war on drugs. Both the U.S. and the EU share responsibility for the problems faced by our countries, since their domestic markets are the main consumers of the drugs produced in Latin America.

The inauguration of President Barack Obama presents a unique opportunity for Latin America and the U.S. to engage in a substantive dialogue on issues of common concern, such as the reduction of domestic consumption and the control of arms sales, especially across the U.S.-Mexico border. Latin America should also pursue dialogue with the EU, asking European countries to renew their commitment to the reduction of domestic consumption and learning from their experiences with reducing the health hazards caused by drugs.

The time to act is now, and the way forward lies in strengthening partnerships to deal with a global problem that affects us all.

Mr. Cardoso is the former president of Brazil. Mr. Gaviria is a former president of Colombia. Mr. Zedillo is a former president of Mexico.

Read more!

Eric Holder - Whining Virtuecrat

Nothing in politics can match the sting of the opposition turning on each other. So it was with great pleasure and some respect that I read Maureen Dowd's column which attacked Eric Holder.

Yet Obama is oozing empathy compared with his attorney general, who last week called us “a nation of cowards” about race.

Eric Holder, who showed precious little bravery in standing up to Clinton on a pardon for the scoundrel Marc Rich, is wrong. We have just inaugurated a black president who installed a black attorney general.

We need leaders to help us through our crises, not provide us with crude evaluations of our character. And we don’t need sermons from liberal virtuecrats, anymore than from conservative virtuecrats.

In the middle of all the Heimlich maneuvers required now — for the economy, Iran, Pakistan, Afghanistan, health care, the environment and education — we don’t need a Jackson/Sharpton-style lecture on race. Barack Obama’s election was supposed to get us past that.

Holder's problem may be that whining and victimization was never just a tactic, it long ago turned into a way of life. To paraphrase Dennis Green, Holder, and his fellow leftists, are who we thought they were. Weak.

Article referenced is copied in full at end of post.

----------------------------------------------------------------------------
Dark Dark Dark --By MAUREEN DOWD

February 22, 2009

Barack Obama’s grandmother told him to smile more. Bill Clinton tells the new president to strut more.

As the country takes a bullet train to bankruptcy, the last Democratic president urged the current one to “embody” that old American spunk. That spirit of — as they sing in “Oklahoma” — “We know we belong to the land and the land we belong to is grand! A-YIP-I-O-EE-AY!”

“It’s worth reminding the American people that for more than 230 years everyone who bet against America lost money,” Clinton told Chris Cuomo on “Good Morning America.” “I just want him to embody that and to share that.”

It’s rich. The Man from Hope whose Missus castigated Candidate Obama for raising “false hopes” is now criticizing President Obama for not peddling more gauzy hope.

Instead, he implies, the president’s warnings of calamity, designed to gin up support for borrowing and printing trillions to shore up the sagging economy, might actually be dragging down our already sagging self-esteem.

Says the ever-helpful Bill: “I just want the American people to know that he’s confident that we are going to get out of this and he feels good about the long run.”

It’s hard to muster moxie with stocks shriveling, Chris Dodd talking nationalization, and Paul Volcker making Chicken Little sound cheery — “I don’t remember any time, maybe even in the Great Depression,” he said, “when things went down quite so fast, quite so uniformly around the world.”

With this economy, as William Goldman famously said of Hollywood, “Nobody knows anything.” The only thing to fear is ... everything.

We dutifully cut back on Starbucks macchiatos, designer water and even Girl Scout cookies, but we keep hurtling down.

While W. and Dick conjured an alternative reality about Iraq, our avaricious bankers created an alternative reality about our financial system. Now our busted trust is not so easily fixed.

In an Associated Press article headlined “Obama Plans Eclipsing New Deal Spending,” the Rutgers University political science professor Ross Baker notes, “Not surprisingly, people are wary of some very expensive proposals with no guarantee of success or even a high probability of how well they’ll work.”

In The Times, Eric Dash reported that Wall Street is losing confidence in Washington’s vague and shifting plans, sending shares of bank companies plunging to new lows on Friday.

President Obama disdains sound bites, and he does not have Bill Clinton’s talent for reducing the abstruse to aperçus. We wanted someone smart to gather a bunch of smart people around him to get us out of this fix. But Mr. Obama’s egghead manner has failed to soothe a nation with the jits. Maybe he has been so intent on avoiding the stereotype of the Angry Black Man, as he wrote in his memoir, that it’s hard for him to connect with and articulate public anger about our diminishment.

Though he demonstrated in the campaign that he has a rare gift for inspiring the country with new belief in itself, Mr. Obama has not yet captured either the grit the moment requires or the fury it provokes. He has not explained in a compelling way why Americans who followed the rules need to sacrifice more to help those who flouted the rules.

That is why the CNBC reporter Rick Santelli struck a populist nerve with his screed about the unfairness of responsible homeowners picking up the tab for irresponsible homeowners — following the unfairness of taxpayers who are losing jobs, homes and savings propping up the exact same bankers and carmakers whose greed and myopia caused the economy to crash.

He spoke for those who want a pound of flesh. With the Wall Street bailout, Mr. Obama at least gave bankers a bit of the belt, and capped their pay. But homebuyers who wanted more than they could afford seem to be getting a free ride.

Yet Obama is oozing empathy compared with his attorney general, who last week called us “a nation of cowards” about race.

Eric Holder, who showed precious little bravery in standing up to Clinton on a pardon for the scoundrel Marc Rich, is wrong. We have just inaugurated a black president who installed a black attorney general.

We need leaders to help us through our crises, not provide us with crude evaluations of our character. And we don’t need sermons from liberal virtuecrats, anymore than from conservative virtuecrats.

In the middle of all the Heimlich maneuvers required now — for the economy, Iran, Pakistan, Afghanistan, health care, the environment and education — we don’t need a Jackson/Sharpton-style lecture on race. Barack Obama’s election was supposed to get us past that.

Besides, the president has other issues that demand his passion.
---------------------------------------------------------------------

Read more!

Are You a Family Guy?

So, are you a Family Guy? I have a friend who is who you would never imagine he was. I am referring of course to the animated Fox TV show created by Seth MacFarlane. When my friend recommended the show--it was as though Neil Armstrong was raving about the latest Jimi Hendrix riff--I had to check it out.

Family Guy is hilarious. Think of Jon Stewart and Stephen Colbert bringing you the news through animated characters. It is that kind of topical, current events driven wit. It's funny in ways that SNL wishes it still were. It is also a catechism of sorts for the politically correct class. If you wonder what the MSNBC crowd watches after hours, you're wondering is over. Family Guy is a consistently funny political attack on dumb right-wing people [fans of Family Guy would question if the 'dumb' qualifier was necessary], people who have ANY problem with ANY homosexual behavior and the favorite whipping boy of the left, religion.

In the case of homosexuality, to say that the show is obsessed with that topic would be an understatement. There seems to be more than one reference in every show. The sub-text to the jokes seems to be the following; Can you believe there are people in society who may have an issue with this behavior? Here is the episode summary of an upcoming show:

To make money and pay off his debts, Peter participates in medical experiments, including one that makes him gay. He winds up in a relationship with another man and leaves Lois and the family brokenhearted, however, they realize the important thing is that Peter is happy.

That was my first impression. But, maybe I was reading too much into the 5 or 6 shows I had seen. So I googled a bit about MacFarlane. I learned that politically he's a lefty [yawn], an atheist [only Captain Renault could have been shocked!] and that my perceptions of the homosexuality issue on the show were not wrong. This from an interview from Feb 2008 in the Advocate--"an award winning LGBT news site."

Advocate: The Parents Television Council voted the episode, along with many others, “Worst TV Show of the Week.” Do you appreciate that honor?
SM: Oh, yeah. That’s like getting hate mail from Hitler. They’re literally terrible human beings. I’ve read their newsletter, I’ve visited their website, and they’re just rotten to the core. For an organization that prides itself on Christian values—I mean, I’m an atheist, so what do I know?—they spend their entire day hating people. They can all suck my dick as far as I’m concerned.

Advocate: Using the news anchor couple Greg and Terry you’ve also tackled LGBT issues on American Dad, most recently in the adoption episode “Surro-Gate.” Do you think you’re influencing viewer opinion?
SM: I certainly hope that we’re doing a small part to advance progress in that area. But there are some bits that we do on Family Guy and American Dad that are just pure comedy which I hope are not influencing people.

You've got to give MacFarlane credit, he's advocating his beliefs while making $100 million [see article at end of post]. But as a viewer, this highlights an ongoing issue for me regarding entertainment. How much do I allow my beliefs, religious and/or political, to influence or constrict my viewing choices? Multi-cinemas have solved my problem at the movies. On TV, it's been an uncomfortable compromise. For example, I know HBO runs some programming which I don't approve of, but many which I do enjoy, so I subscribe. But my general dissatisfaction with the attack on my politics and religion [I'm Catholic] has brought me to the point where my regular TV viewing consists of some sports [ok, all Heat and Marlins games on DVR], Fox cable politics, HBO comedies and 24. I rarely watch anything live anymore--I consider it to be a logistical failure.

So I am not a Family Guy. Not because they can't make me laugh, but because in the course of making me laugh, they advocate ideas which I am opposed to. But since I still believe the marketplace is a beautiful place, I fully expect that a 'Stewie' more palatable to my views will emerge anytime now. Hurry please.

Articles referenced is copied in full at end of post.

----------------------------------------------------------------------------
Seth MacFarlane’s $2 Billion Family Guy Empire

Saturday, November 01, 2008

Josh Dean - Fast Company

It's not hard to find someone who delights in attacking the show Family Guy. Which isn't a criticism, per se. Much of the animated sitcom's purpose seems to be to stoke the opposition, to offend the easily offended. But that's not the only reason it annoys people. There is a school of thought that says the show is hackish -- crudely drawn and derivative of its cartoon forebears. Members of this school would include, most prominently, Ren & Stimpy creator John Kricfalusi, and Trey Parker and Matt Stone, the fathers of South Park, which is probably the only show on television that rivals Family Guy for objectionable content per half hour. South Park has devoted entire episodes to attacking Family Guy, portraying the show's writers as manatees who push "idea balls" with random jokes down tubes to generate plotlines. Kricfalusi has said, "You can draw Family Guy when you're 10 years old."

What does Family Guy creator Seth MacFarlane -- who earlier this year inked a $100 million -- plus contract with Fox, followed by a breakthrough deal involving Google -- have to say about that?

"I would say, 'How many violas do you have?' "

MacFarlane is hovering over the soundboard in the control room of the Newman Soundstage on the 20th Century Fox lot in Los Angeles. Various engineers twiddle knobs and adjust levels as he looks out on a gymnasium-size room full of classically trained musicians tuning their instruments. Every piece of music on every episode of Family Guy is recorded live by an orchestra that on this day numbers 56. The only music that ever repeats, even once, are the opening and closing themes, and those too are frequently updated, just because. Now, it is not unprecedented to use a live orchestra in today's TV world. But it is highly unusual. "All the shows used to do it," laments Walter Murphy, one of Family Guy's two composers. "It's mostly electronic now -- to save money." The Simpsons, he says, still uses an orchestra, as does Lost. King of the Hill has a small band. And, of course, there's an orchestra on American Dad, the other show created by MacFarlane, who is now the highest-paid writer-producer in the history of TV.

MacFarlane, despite being 35 and looking like an average dude, possesses the musical inclinations of a septuagenarian drag queen. A significant percentage of Family Guy episodes feature extravagant Broadway-inspired song-and-dance numbers (because, really, why have the cartoon doctor tell his patient he has end-stage AIDS when a barbershop quintet can break the news via song?), and only some of them are sacrilegious or scatological. Among the features of his new contract with Fox is a Family Guy movie he imagines as "an old-style musical with dialogue" in the vein of The Sound of Music, a poster of which hangs above his desk. "We'd really be trying to capture, musically, that feel," says MacFarlane, whose father moonlighted as a folk singer. "Nothing today feels like it'll play 50 years from now, like Cole Porter or Rodgers and Hart."

If you're waiting for the punch line here, there isn't one. Critics may dismiss MacFarlane's show for being vulgar, but when he writes a song, it's going to be lush and jazzy and, at least musically, exactly as you might hear in something by Irving Berlin. It's all part of a manic attention to detail that not only gives the show its layered humor but also has made MacFarlane a massive multiplatform success.

MacFarlane is more than just an eclectic entertainer. Stripped of its crude facade, Family Guy -- indeed, all of MacFarlane Inc. -- exposes itself as a quintessentially modern business with lessons that extend far beyond TV land. MacFarlane has divined how to connect with next-generation consumers, not simply through the subject of his jokes but by embracing a flexibility in both format and distribution. He has also stepped outside the siloed definitions of a single industry (Hollywood) and exploited opportunity wherever he could find it (Silicon Valley). And perhaps most instructive, his success is not predicated on his product being all things to all people. He has bred allegiance from his core customers precisely because he's been willing to turn his back on (and even offend) others -- a model of sorts for how to create a mass-market-size niche business in our increasingly atomized culture.

MacFarlane is a fairly unassuming young man. He is partial to long-sleeve T-shirts, fraying jeans, and laceless black Chuck Taylors. Various stories have described him as prematurely graying, but today his hair is convincingly black and lightly gelled, and he's wearing wire-rimmed glasses. Beard stubble is a staple. The net effect is the look of a full-grown, thinking man's frat boy, which also pretty well sums up the target of his comedy (minus, perhaps, the full-grown part).

His show concerns the Griffins of Quahog, Rhode Island, whose patriarch is Peter, voiced by MacFarlane. Like Homer Simpson, he is lovable but bumbling, overweight, and a little slow-witted (a recent plot development is that he's mentally retarded, but just barely). His wife is Lois, cartoon sexy and much sharper; she adores him despite his flaws. They have three children: Chris, overweight and dim, in so many ways his father's son; Meg, smart but underappreciated and ever the butt of jokes about her homeliness; and Stewie, the infant pedant with the football-shape head who secretly wishes to murder his mother. Rounding out the clan is Brian the talking dog. He lusts after Lois, drinks martinis, and has been known to snort the occasional line of blow. (MacFarlane also voices both Brian and Stewie.)

Back in the soundstage control room, with the orchestra on the other side of the glass, a bank of flat screens are frozen on an image of Stewie staring out a window, forlorn. MacFarlane tells me that in this future episode, Stewie has been left home alone while the family goes on vacation.

"Let's try it once with the dialogue," Murphy says to his musicians. Stewie's quasi-British voice -- inspired by Rex Harrison, MacFarlane says -- booms through the control room. "Oh, Mommy! Thank God you're home! I promise with all my heart that I'll never say or do anything bad to you for the rest of the evening." Comedic pause. "By the way, I disabled the V-chip and watched so much porn."

Out in the orchestra room, trombonists erupt in laughter.

It is a violent collision of high and low -- classical musicians accustomed to the Hollywood Bowl recording music for a show heavy on poop jokes -- and a perfect lens for examining why this man sipping coffee from a paper cup emblazoned with the Fox logo has such an enormous and perpetual grin.

*****

It would be fair, at this point, to call Family Guy a juggernaut. If you're looking to get acquainted, it airs Sunday evenings at 9, just after The Simpsons, which it has surpassed as the most-popular animated show on TV. Among males 18 to 34, often cited as the most desirable demographic in advertising, Family Guy is the highest-rated scripted program in all of television (American Dad ranks sixth). It is the second-highest-rated show among males 18 to 49. It is among the most-downloaded shows on iTunes and the most-watched programs on Hulu, and it was the eighth most-pirated show of 2007 on BitTorrent sites.

Next spring, MacFarlane will introduce The Cleveland Show, a spin-off starring the Griffins' African-American neighbor. The show will be MacFarlane's third in prime time and the first new product of his megadeal with Fox. (He is also prepping a live-action movie, but no title or dates have been announced.)

A common complaint about MacFarlane's shows is that they are random and disjointed, with episodes that veer wildly off course for no apparent purpose. A human-size chicken, for example, has been known to show up and battle Peter, apropos of nothing, in elaborate fight scenes that mimic movies like Raiders of the Lost Ark and stretch for more than a minute.

The show's tangents are intentional, but in no way intended to advance plot. MacFarlane admits that sometimes vignettes are inserted into an episode just to fill time, or just because they're good for a laugh, regardless of plot relevance. As a result, Family Guy is easily digested in bite-size portions -- the breakout gags, like the musical numbers, can be watched in isolation, at any time, and still work. This makes MacFarlane's show especially well suited to the Internet and mobile devices -- perfect for viewing during a boring history lecture or on the dreary commute home on the 5:07 to Ronkonkoma.

Easily masticated comedy -- plus a fervent audience of college kids in baggy cargo shorts bursting with disposable income and electronics -- also made MacFarlane a natural fit for Google. In September, the first of 50 bizarro animated shorts by MacFarlane appeared online. Seth MacFarlane's "Cavalcade of Cartoon Comedy," distributed by Google via its AdSense network, is a series of Webisodes that MacFarlane describes as edgier versions of New Yorker cartoons come to life. Running from 30 seconds to just over two minutes, the shorts are sponsored by advertisers and noteworthy for a host of reasons. For fans, they are MacFarlane's first non-TV venture and so exist outside the reach of censors and network suits and introduce a universe of entirely new characters. For the entertainment industry, they mark the first experiments with a bold new method of content distribution (and the entry of the beast Google into its world). This purportedly unsophisticated hack comic now finds himself, in some ways by accident, at the intersection of advertising, television, and the Web -- all of which are blurring together.

Perhaps it's not surprising, then, that while a MacFarlane product like Family Guy may seem slapdash when you're watching it, the creative process behind it is decidedly sophisticated. "He's kind of a modern-day cross between George Lucas and Norman Lear," says his manager, John Jacobs. "He thinks on a big canvas."

Says Norman Lear himself, a man who was once also the highest-paid creator on TV: "I'm crazy about him and his work. I can't think of anybody doing a better job right now of mining the foolishness of the human condition."

*****

A Family Guy episode is more or less a nine-month undertaking, from first script to finished animation. All episodes take shape in the writers room on the third floor of an unremarkable office building on Wilshire Boulevard, home to MacFarlane's Fuzzy Door Productions. It's pretty much as you'd imagine: a conference table surrounded by rolling chairs and covered in computer monitors, action figures, and the assorted detritus of the comedy writer's diet: soft-drink cans, candy wrappers, half-finished bags of beef jerky. MacFarlane takes a chair in front of a dry-erase board as his 16 writers stagger in drinking coffee and stabbing at cups of fruit. One of them asks the boss how a concert he'd seen the night before had gone, and when MacFarlane complains about the bathroom lines, the guy suggests he stick to "lesbian shows, like the Indigo Girls."

The typical episode begins with a single writer producing a script, but then the whole team gets involved, dissecting each scene and line to decide if a) it's actually funny and b) it can be made funnier. In a loose but laborious process, each gag gets chewed over ad infinitum in this peanut-gallery forum. The goal is to produce an episode overstuffed with jokes -- something that gives fans plenty to discuss late at night on bulletin boards. "I think we're the most joke-per-minute show on television," asserts executive producer David Goodman.

This late-summer afternoon, the challenge is to fill out a scene in which Stewie and some friends are at nursery school. Ideas are tossed out in various impressions of Stewie's voice: There's a molestation joke, some poop jokes, a joke about a rogue chicken because, according to the writer who pitches it, "chickens just wander around the yard at some schools."

"Is that safe?" MacFarlane asks. "Aren't chickens aggressive and, like, poke your eyes out?"

Anyone can speak, and jokes are called out with no introduction. MacFarlane sits up front, along with Goodman, reclining in his seat and appearing in no way dictatorial. He'll chime in, but his input seems no more or less important than anyone else's. "If the writers in that room don't laugh -- it's not going on," says Goodman. "That's a tough room. If we laugh, it's probably funny."

The prevailing meta-joke about Stewie is that, despite being an infant, he is the most intellectual character on the show, even if the only family member who can hear him speak is Brian the dog.

"Stewie could wear a cop hat and go up to a white girl standing with a black kid and say, 'Are you okay, miss?' " one writer suggests.

Awkward, almost embarrassed laughs break out around the table. It's a joke that could be viewed as offensive, or as fairly pointed social criticism. A digression on race follows, before everyone moves on to another idea, about toddlers as obnoxious art critics picking apart one another's finger paintings.

There isn't a comedy writers room in America where the banter doesn't often veer toward extreme subjects. The difference with this crew is that the extremes are the goal. Watch enough Family Guy and you'll almost certainly see something that makes you cringe; it might not offend you personally, but you can imagine how someone won't find it funny. Family Guy savages politicians and celebrities, and is more than willing to tackle all manner of touchy subjects in the name of comedy -- race, Islam, Christianity (Jesus is a recurring character, because FCC rules stipulate you cannot use "Jesus Christ" as an exclamation unless the deity himself is present), homosexuality, bestiality, pedophilia, the physically impaired. A favorite example tossed out by opponents is a sight gag that involved a JFK Pez dispenser in which the candy emerged from a hole in the president's head. (MacFarlane later admitted that maybe, just maybe, that one crossed the line.)

MacFarlane doesn't argue with the notion that many of his jokes border on offensive, but the notion that the content is actually offensive irks him. Each episode is vetted by a team of Fox censors editing with the FCC in mind. But beyond that, he contends, "There's an enormous amount of self-policing that goes on and a lot of intelligent conversations about whether a show is worth doing. I would stack the ethics of one of my writers up against the average Washington bureaucrat on censorship any day." MacFarlane is mystified in particular by the two things that most upset the FCC -- two basic elements of human life that, in his view, are far less sensitive than, say, religion. "For the FCC, it's sexual references," he says. "But even more than that, shit jokes. Any time we even show somebody on a toilet, we get in trouble."

MacFarlane doesn’t argue with the notion that his jokes border on offensive. But the notion that they are actually offensive irks him.

Which brings us back to the writers room. A source of ongoing consternation is Stewie's inability to master the commode. MacFarlane assumes the child's erudite voice and says, speaking in character to his fellow children, "I'd like to make an announcement: It's the elephant in the room. I made a stool. Now let's just all go about our business as if nothing happened, and it'll take care of itself in due time."

Most everyone in the room laughs. The joke is in.

*****

Seth MacFarlane was basically fated to this life. His middle name, Woodbury, was chosen by his mother as an homage to the town drunk back in Kent, Connecticut. "Some of the foulest jokes I've ever heard," he has said, "came from my mother." MacFarlane started drawing at 2 and published his first cartoon, "Walter Crouton," in a local paper at the age of 8. At 18, he left for the Rhode Island School of Design and, after his adviser sent his thesis film, "Life of Larry" (starring a lovable schlub with a tolerant wife and a talking dog), off to Hanna-Barbera, he was hired to work as an animator and writer on shows like Dexter's Laboratory and Johnny Bravo. In 1996, he created a sequel to "Life of Larry" that aired in prime time on the Cartoon Network. Fox development executives took notice and hired him away to work on interstitials to run between sketches on Mad TV.

A few years later, Fox asked MacFarlane, then 25, to develop an animated pilot, giving him a scant $50,000 to do it. MacFarlane emerged three months later with a nearly completed pilot, for which he had drawn every frame and voiced every character.

Fox bought the show, gave MacFarlane a reported $2-million-per-season contract, and premiered Family Guy in the highest-profile slot possible, following the 1999 Super Bowl. He was the youngest person ever to be given his own primetime network show.

It drew 22 million viewers but then became a sort of network foster child. For the next two years, Fox execs moved the show all over the schedule, trying it in 11 time slots, including in the death zone opposite Friends. Despite the fact that Family Guy tracked well with young men, the show's ratings were low. Fox canceled it in 2000, revived it briefly the next year, then canceled it again.

But a funny thing happened. The show lived on over at the Cartoon Network, with even edgier versions specially edited by MacFarlane. Regard for the show was so low that Fox essentially gave the Cartoon Network the first 50 episodes for free; Fox simply asked for promotion of the show's DVD in exchange. (They were having trouble persuading retailers to stock it -- another in a list of miscalculations that seems inconceivable in retrospect.) Family Guy's audience, ignored at every turn, followed the show to the Cartoon Network, dug in, and swelled, regularly beating both Letterman and Leno in the desirable young-male demographic. When Fox released the first 28 episodes on a series of DVDs in 2003, it sold more than 2.5 million copies. (In 2005, a straight-to-DVD movie called Stewie Griffin: The Untold Story sold about 3.5 million copies, bringing in almost $80 million.)

Twentieth Century Fox TV president Gary Newman (now chairman) summoned MacFarlane to his office in 2004 and did the unthinkable: He asked him to restart production. "I had gone into the meeting not knowing why I was going in there," MacFarlane recalls. "He said, 'We'd like to put this back into production,' and I almost fell out of my chair."

David Goodman says that when Family Guy was initially canceled, MacFarlane told him Goodman's job would be safe if it ever returned. "I'd been on 14 canceled TV shows," Goodman recalls. "They never come back. It's never happened before -- ever."

Fox brought the show back in a big way, ordering 35 episodes (22 is typical) and handing over the Sunday-at-9 slot, where it boomed. The 100th episode aired in November of 2007, pushing the show into syndication. Though schedules vary, Family Guy airs up to 27 times a week in a single market, with reruns on Fox, TBS, the Cartoon Network, and in 20 major markets on channels owned by Tribune Broadcasting.

"Animation is something that, if it works, it's more profitable for a studio than any other show," MacFarlane says. People don't buy Everybody Loves Raymond T-shirts, but they do buy shirts bearing the devious visage of Stewie, as well as action figures, stickers, posters, and video games. Increasingly, they also buy song clips and ring tones. And Fox, which owns the show, also owns the intellectual property (but kicks a percentage of sales back to MacFarlane). Reports have valued the Family Guy franchise at as much as $1 billion. Though neither Fox nor MacFarlane's team would confirm that number, a little back-of-the-envelope math indicates that it is overly conservative. At a reported $2 million per episode, Family Guy has garnered at least $400 million up front from syndication. DVD sales have totaled almost another $400 million, while 80 licensees have contributed at least $200 million from sales of various clothing and baubles, actual and digital. Fox's ad revenue off Family Guy can be estimated at at least $500 million over the years. "Suffice it to say, with it being a studio-owned show, and being on the Fox network, it's of substantial value," Newman told me. And none of this figures in revenue from MacFarlane's other hit product, American Dad.

Team MacFarlane, of course, also recognized the value of what MacFarlane has brought to the network. By the time negotiations on a new contract began more than two years ago, the challenge for both sides was how to put a number on MacFarlane's worth, considering that he isn't just a writer-producer but also an animator and actor. MacFarlane's team felt the need to let his contract expire, "to have him on the open market," explains one of his representatives. For more than two years, MacFarlane worked on Family Guy in good faith, without a contract. "There were a couple days when I was 'sick,' " MacFarlane says. "At times, that helps bring the negotiations back when they're stalled."

When the writers strike broke out last year, he sided with the guild and walked off the set. Fox decided to go forward and edit episodes without MacFarlane's participation -- they did own them, after all. MacFarlane called it a "colossal dick move." When asked about it now, he says it's a sore that's been salved ($100 million has a way of doing that). "They gave us money to go back and edit the shows the way we wanted, and we made nice."

One Fox-inflicted bruise that has yet to fade involves shots taken at Family Guy by The Simpsons, a show that MacFarlane says he admires greatly. Most famously, in an episode called "Treehouse of Horror," Homer creates a sea of clones even dumber and more dim-witted than himself. One of these is Family Guy's Peter Griffin. MacFarlane decided to return fire. He wrote a joke in which Peter's perverted friend Quagmire attacks and molests Marge Simpson. Fox, he says, nixed the idea. "They said, 'We want the feuds to end.' I thought it was very conspicuous that this came about only when we decided to hit them back."

What did he do? He left it in anyway, and delivered the edit to Fox, which then edited it out. "It's still a sore point," MacFarlane says. "It's still this wound that has never quite healed that says, 'We don't value you quite as much,' which I can't imagine is true, but ..." The thought trails off and, perhaps realizing that it's best not to follow this logic, he turns a corner. "To be fair to Fox -- for the most part, creatively they have been a very easy company to work with. This was kind of a rare lapse in judgment."

*****

MacFarlane's contract hiatus didn't just buy him leverage with Fox; it was an expansion opportunity. While the studio was noodling on the deal, MacFarlane's management team went out and signed him up with Google. The resulting "Cavalcade of Cartoon Comedy" is outside the bounds of the Fox relationship. "In a completely perfect world," Dana Walden, chairman of 20th Century Fox Television, has said, "he wouldn't be able to do that."

He did. The idea stemmed from conversations between MacFarlane's lawyer and agent and representatives of Media Rights Capital, an L.A.-based multimedia financier. Loosely tied to the talent agency Endeavor (which reps MacFarlane, naturally), MRC partners with content creators -- whether that's director Alejandro González Iñárritu on Babel; or Sacha Baron Cohen on his next film, Bruno; or MacFarlane -- giving them funding and a share in ownership, plus creative control.

MacFarlane produced the Cavalcade shorts with a team of six writers. The animation is instantly recognizable as his, as is the humor. The shorts lean heavily on pop culture (say, "Fred and Barney Try to Get Into a Club," which is fairly self-explanatory); they're rude (in one, Tara Reid's grotesque belly flab talks); and of course, they're crude (a boy is told he is adopted by two parents with nipples that stick out of their chests like javelins; his name, they tell him, is not Michael Sticknipples but rather Albert Horsefeet Turdsneeze -- whereupon the boy sneezes a turd that sprouts horse feet and gallops off).

The Cavalcade shorts are also distributed in an innovative way: targeting young males where they lurk by popping up in ad windows on sites such as Maxim.com and Fandango.com (while simultaneously appearing on YouTube). "The idea is not to drive someone to a Web site but to make content available wherever the audience will be," explains Dan Goodman, president of digital at MRC.

Also unprecedented is the way MacFarlane is being paid. MRC is not Fox; it can't just write him a nine-figure check. Instead, MacFarlane's status as an equity partner in the deal entitles him to split the ad revenue with Google and MRC. Because the whole idea is new, it's hard to draw parallels to current entertainment and marketing models but, essentially, MRC provides the funding and sells the ad partnerships, MacFarlane provides the content, and Google serves as distribution outlet, providing the "broadcast" via its AdSense network. Then all three split the proceeds. It can, and will, be replicated with other content providers. Already, MRC is working with the Disney Channel's Raven-Symoné on kids-targeted programming. You could easily imagine it with, say, Rachael Ray.

Each Cavalcade short carries a single advertiser. The first 10 were bought by Burger King, and -- in yet another unprecedented move -- MacFarlane animated the company's ads for them. It's an option available to any of the sponsors if they choose to pay extra for it.

For Burger King, the appeal was obvious. "Seth's fan base intersects squarely with our audience of young men and women," says Brian Gies, vice president of marketing impact for Burger King. In other words, MacFarlane's comedy provides a very powerful and friendly connection to a very targeted audience, one that tends to get the munchies. Says Google's Levy: "We know where to find them, and we're putting the advertising in an environment they're comfortable in."

"The idea is to take the TV experience and provide it on the Web," says Alex Levy, Google's director of branded entertainment. "But brought to the people you want to reach, when, where, and how you want to reach them." For a company that likes to say it's not in the content business, that's a remarkable statement. Google, in essence, is trying to use its ad-distribution network to turn content distribution upside down. (Google calls it the Content Network.)

There's no guarantee the new model is going to stick, of course -- advertisers could decide they get as much value by just buying regular Web ads and avoid paying extra. But early returns showed viewers were responding well to the shorts. In its first days, Cavalcade was the most-watched channel on YouTube, and the videos racked up 5.5 million views across the various sites running them. And MacFarlane wins no matter what. Unlike his Family Guy characters, every horny frog and lusty princess and sarcastic talking bear created for Cavalcade is owned by him, and can be deployed for future revenue. And for all this, he has zero financial risk.

*****

A couple of years ago, MacFarlane nearly worked himself to death. He collapsed at his desk and was rushed to the hospital. He was sick, he says, and "didn't have the time to stop." So he passed out right there under the Sound of Music poster. He ended up spending, as he tells it, "a lovely afternoon at the emergency room."

"We've been behind schedule on Family Guy since day one," he explains. "In reality, you can't do a prime-time animated show in the time allotted, so that always puts a glaze of stress over the whole process." He takes a breath. "I refuse to let that control my life. I did that in my twenties. Now I insist on a balance."

MacFarlane has handed off the day-to-day control of both American Dad and The Cleveland Show, and he is increasingly delegating on Family Guy. He reviews all the drawings and obsesses more than a little over the music -- there is some stuff he just can't give up. And what's easy to forget is that MacFarlane is also the star of Family Guy. Actually, several stars of Family Guy. He voices three of the six main characters, and is in virtually every scene, sometimes playing several parts at once. He's also the voice of Quagmire, a major secondary player, and hundreds of ancillary characters and one-timers. And, of course, he's the voice of Stan, the lead on American Dad, and almost certain to guest-star often on The Cleveland Show. This summer, he showed up as a voice actor in Guillermo del Toro's Hellboy II and is very soon planning to step in front of the camera in live-action projects. He also intends to direct movies.

One afternoon in August, MacFarlane and two sound engineers are in the tiny control room outside the recording booths in the Family Guy offices. In strolls the actor Gary Cole wearing shorts and sunglasses. For a show that likes to pick on celebrities, Family Guy has little trouble attracting them, especially those whose résumés include the kind of wonderfully awful performances that ultimately get embraced as cult in-jokes: Drew Barrymore, Haley Joel Osment, Gene Simmons, Bob Costas, Phyllis Diller ... Michael Clarke Duncan was in earlier this morning. Richard Dreyfuss is due to arrive this evening.

Cole has done the show 23 times. Today, he's doing Mike Brady, reprising a role he played in The Brady Bunch Movie. In this script, Mr. Brady is verbally abusing Mrs. Brady in one of those trademark pop-culture tangents.

"You know, you can really go as loud as you want," MacFarlane says in director mode. "We've never heard Mike Brady yell before, so this is new territory." He then assumes the role of Carol Brady.

"Huh, I don't remember asking for a warm beer," Cole says, his voice quiet but seething.

MacFarlane, as Carol, flips out: "I didn't want to quit working -- you made me!"

Five minutes later, Cole exits and MacFarlane is off to the next thing, laying down lines in furious fashion, typically in three or four takes, which he then selects from on the fly. His sound engineers tag his favorite takes and move on. He swaps from voicing Stewie to Peter to Quagmire to various odd parts, including a bit as Paul McCartney and another as Vince Vaughn.

Next up: A writer is doing Patrick Swayze, who is not, as you might expect, the butt of a cancer joke, but rather a tight-jeans joke followed by repeated takes of the writer growling, as throaty redneck Swayze, "Roadhouse!" It's another one of those cult jokes, a little snippet of Dada theater.

"Even a hair more badass," MacFarlane directs, and over and over they go until that one simple word becomes absurd in its own right. You can already hear it as a ring tone.
---------------------------------------------------------------------

Read more!