The Rich Playing With Their Money

From today’s Herald-Leader, the global economy gets local.

Lexington-based Fasig-Tipton Co., North America's oldest thoroughbred auction company, announced Thursday it had reached an agreement to be acquired by Synergy Investments Ltd., a Dubai-based company headed by Abdulla Al Habbai, a close associate of Sheikh Mohammed bin Rashid al-Maktoum.

I can already hear the panic; the whole horse industry is going to die. Life as we know it in the Bluegrass is coming to an end.

Here are my questions:

How many people does this really touch?
How many people deal with Fasig-Tipton or Synergy Investments or Sheikh Mohammed bin Rashid al-Maktoum?
What does this mean to the horse industry?
What does this mean in a wider sense of global economic issues?
How many of you have ever been on a horse farm?

Keep the panic down, it’s just the rich playing with their money and below is a little homework if you care to do some reading.

From DollarsandSense.org - The ABCs of the Global Economy

In the 1960s, U.S. corporations changed the way they went after profits in the international economy. Instead of producing goods in the U.S. to export, they moved more and more toward producing goods overseas to sell to consumers in those countries and at home. They had done some of this in the 1950s, but really sped up the process in the '60s.

Before the mid-1960s, free trade probably helped workers and consumers in the United States while disadvantaging workers in poorer countries. Exporters invested their profits at home in the United States, creating new jobs and boosting incomes. The AFL-CIO thought this was a good deal and backed free trade.


From the Federal Reserve Bank of New York - Financial Globalization and the U.S. Current Account Deficit

Despite heavy borrowing in recent years, the United States has financed its large current account deficits without experiencing an unusual buildup in foreign investors’ holdings of U.S. assets. A new analysis suggests that this somewhat surprising development is attributable largely to rapid financial globalization, with cross-border flows worldwide rising as fast as flows into the United States. However, it could be harder for the country to sustain large deficits on favorable terms if the current wave of globalization subsided or the rate at which U.S. investors buy foreign assets increased.

And a little bit about Sheikh Mohammed Bin Rashid Al Maktoum and oil profits.

Who Gets Hurt

The sub-head of an Editorial from the Herald-Leader has me wondering if the editor actually looked at the editorial before writing the headline on Lexington’s proposed budget.

Ensure fees, taxes add up to good policy

The opinion piece included the following paragraphs.

Cuts include zeroing out the city contribution to the Day Treatment Center for at-risk teenagers. That comes after eliminating the Mayor's Training Center in the current year. In both cases, the mayor made the argument that those services could be provided elsewhere. The Day Treatment Center, the administration says, is better operated by the Fayette County Public Schools, but there's no agreement on that yet.

The proposed budget also zeroes out city contributions to legal aid, which defends poor people faced with criminal charges. That was planned after an agreement last year that Lexington's office would be folded into the state public defender system. But serious cuts at the state level are threatening the level of service in Lexington.

The cuts also include reductions in building inspection and code enforcement. Any guesses who suffers most when code enforcement can't do its job?

This is good policy?

This mayor appears to be taking care of his constituents. Any guesses who they aren’t?

Money Talks

Money talks, and right now it’s saying that we are going to get a big, ugly hotel whether we need one or not.

But that’s OK this little project will line the pockets of the Donald and Dudley Webb and give us even more empty hotel rooms to go with those at the Horse Park.

From the Herald-Leader:

It doesn't come as a terrible surprise, but the popular downtown music venue The Dame will close on the downtown block targeted for a $250 million hotel and condominium complex.

Joe Rosenberg, who owns the building, last night called it "an agreed separation for a sum of money." The Dame has 90 days to move out once the check has been delivered, Rosenberg said.

Note to Beverly Fortune and the Editors at the Herald-Leader:

What doesn’t come as a terrible surprise? What is the antecedent of “it”. Mr. Mac would have withered you with a look for that lead.

What's Your Vision?

Sometimes two different stories tell you a lot about a community, its’ people and the way they view the world. Take for example these stories from the Herald-Leader.

First, need for greed in downtown Lexington:

Business owner Joe Rosenberg has filed for demolition permits for four buildings on South Limestone, in the block where a 40-story hotel and condominium complex have been proposed, while activity among preservationists has increased to save the historic structures on the block…….

About a dozen historic structures are in the block bounded by Vine, Main, Upper and Limestone streets.

Then there is the story of one woman’s vision in Frankfort:

The look and feel of a nostalgic older neighborhood is what Kathy Carter wanted to create. She owns and has renovated eight of the homes along the historic street.

”I knew I wanted a neighborhood where people could sit on the porch and talk to each other,“ said Carter, who also is a city commissioner. ”It's not just a rental place; it's a home.“

Think about it.

Amateur Night

This has to be one of the dumbest political moves I seen lately. What was Jim Newberry thinking? Who told him this was a good idea?

If you are going try to do this sort of thing then you better have a majority of the Council behind you and the police and firefighters should at least be neutral to the idea.

You are never going to get our elected representatives to step out in front of an issue like this unless you have all the other ducks lined up.

Jim, I sorry Bud, but this was a dumb idea and makes you look like a political amateur.

Members of the Fayette County legislative delegation on Monday appeared opposed to Lexington Mayor Jim Newberry's proposal for the city to take control of the retirement benefits for police officers and firefighters hired after July 1.

Before a packed room of more than 110 current and retired Lexington police officers and firefighters, the lawmakers questioned the effect such a change would have on current employees and retirees, whether the Urban County Council supported the measure and whether police officers and firefighters were involved in the decision.

Legislators were most critical about the timing of the proposal -- brought to them with just eight days left in the session -- and the opposition of both the Fraternal Order of Police and the International Association of Fire Fighters.

Just Smile Jim

Watching Lexington Mayor Jim Newberry at a distance it has seemed, particularly when dealing with the gang activity, that he just doesn’t have a firm grasp of how to get things done. But now we seem to have proof that Newberry either believes he is the master of state legislative politics or a totally politically clueless.

Lexington is seeking state approval to take control of the retirement benefits for police officers and firefighters hired after July 1……

Mayor Jim Newberry plans to meet with the members of the Fayette County legislative delegation on Monday to discuss the proposed change. There are only nine days left in the legislative session.

Nine days left in the legislative session and Newberry trots out this blatant grab for political control. Sen. Ernesto Scorsone sums up the political landscape.

The legislature should "proceed very cautiously on something like this," Scorsone said. "We can't deal with this issue without talking to the employees and allowing them to have a say in how we structure the program."

So the questions are these:

Does Jim Newberry, who harbors ambitions of living in the Governor’s Mansion, really have the political skills to pull this off?

Was Newberry too ignorant to realize the response from the Fraternal Order of Police (FOP) was going to be “No way in Hell”?

The FOP is vehemently against this legislation as written," said Mike Sweeney, president of the Bluegrass Lodge No. 4 of the Fraternal Order of Police.

Did Newberry not realize the only thing the leadership of the FOP hates more than a liberal politician is a politician messing with their pay and benefits?

Is this just Newberry’s way of getting his name in the paper?

Regardless of the answer this strikes me as one of the dumber political moves I’ve seen lately.

Maybe Newberry should just stick with welcoming visiting VIPs.