"Happy Days Are Here Again" Again

On April 6, I noted the McLaughlin Group was guilty of anachronism, playing "Happy Days Are Here Again" in relation to the brokered 1924 Democratic convention:

The problem with McLaughlin's "home video" (as guest Mort Zuckerman described it with a touch of sarcasm) of the 1924 convention is that the background music is the "Happy Days" theme. It couldn't have happened. The music for this song was not written by Milton Ager until 1929. The lyrics by Jack Yellen start: "Happy days are here again, The skies above are clear again, So let's sing a song of cheer again, Happy days are here again."

Now it's August 30, after the Denver Democratic convention gave us the Obama-Biden ticket. I get this nice note from WS in Colorado:

I enjoyed reading your piece about "Happy Days Are Here Again." I'm old enough to remember hearing it when FDR ran against my friend Alf Landon in 1936. I read recently that use of that tune for FDR's campaigning against Hoover was a fluke... selected by accident. FDR, it is reported, didn't like it at all. I'm unable to find the source of that now however. (Like Harry Truman couldn't stand "The Missouri Waltz." Nixon didn't know this when he visited him in Independence and played it on the Steinway that Truman had brought from the White House.)

Steven Neal's book, "Happy Days Are Here Again" confirms the FDR campaign theme song - now used as a theme song for the Democratic Party - was a substitute for "Anchor's Away", originally selected because FDR had been Assistant Secretary of the Navy but then deemed insufficiently stirring for the Chicago conventioneers.

Obama Speech on 45th Anniversary of I Have a Dream Speech

Barack Obama gives his acceptance speech this evening in the 8-9 pm slot Mountain time, i.e., 10-11 pm Eastern. The program starts seriously in the 6-7 pm time slot, 8-9 pm Eastern, with Al Gore and Steveie Wonder .

It will be historic in part because it is the 45th anniversary of Martin Luther King Jr.'s historic "I Have a Dream" speech. He will be the first black man to be the nominee of a major political party.

I was in Washington that day in the summer of 1963. I was then working for the Federal Reserve Board as an economist. The crowds were enormous - Washington was a smaller place then.

"This is a monumental moment in our nation's history," Martin Luther King III, the civil rights icon's oldest son, told The Associated Press on Wednesday. "And it becomes obviously an even greater moment in November if he's elected."

Obama was just 2 years old when King addressed a sea of people on the National Mall in Washington on Aug. 28, 1963.

Obama, known for his stirring oratory, has been trying to lower expectations for his acceptance speech.

At the convention's final night, singers Sheryl Crow, Stevie Wonder and will.i.am are scheduled to perform, with Academy Award-winner Jennifer Hudson singing the national anthem.

Former Vice President Al Gore will add his voice to the lineup of Democratic luminaries trying to motivate party members for the fall.

Flashback - King gives I have a dream speech

More than 200,000 people took part in a civil rights rally today at the Lincoln Memorial in Washington, D.C. The rally marked a significant moment in the American Civil Rights Movement. From the steps of the Lincoln Memorial, Martin Luther King, Jr. gave his famous "I have a dream" speech.

Rev. King, head of the Southern Christian Leadership Conference, said: "I still have a dream, a dream deeply rooted in the American dream - one day this nation will rise up and live up to its creed, 'We hold these truths to be self-evident, that all men are created equal,'" said King.

"King's Plea - 'Let Freedom Ring'" Oakland Tribune, August 29, 1963

CO-BRANDING | Sportswear and Deodorant

I picked up a copy of Women’s Wear Daily dated August 14, left by someone who got off the Hampton Jitney earlier than me. On page 2 is a story about the spread of women’s sports apparel into other daily activities. Of women surveyed, 82 percent say they wear their sports kit around the house, 65 percent running errands, 40 percent shopping, 21 percent when having lunch or going to a movie, 10 percent to school. The research was done by Cotton Incorporated’s Lifestyle Monitor (it’s not clear whether the story was written by WWD or was a paid ad or both).

The story got me thinking about co-branding possibilities. Right now we have these:

•  Budweiser and Old Spice, connected by a movie. 
• Axe deodorant (a.k.a. Lynx) and Coke Zero.

How about a sample deodorant stick with every sports outfit?

• TENNIS WITH NIKE IN THE MORNING
• LUNCH WITH AXE AT NOON
• "Wear Nike apparel as long as you want with 24-hour protection from Brand X (sample enclosed FREE)."
• "Only your partners will know how long you played."

Metro Area Incomes Show Impact of Higher Oil Prices

The Bureau of Economic Analysis has released data on 2007 personal income by metro area.

The big story is told in the middle section of the country. Around the Gulf of Mexico, incomes are up - partly because of aid to Katrina-hit areas, but more broadly because of the higher incomes that have accompanied higher oil prices.

These higher oil prices have devastated the Mid-West metro areas around the Great Lakes that live by manufacturing and are linked to the automobile industry or to other products that use energy.

We see a vivid picture of the massive economic shift away from manufacturing and toward energy. The next U.S. President will be the person who can offer hope to the depressed economies of the Mid-West.

Take More Risk to Cover Losses?

Yesterday's NY Times story reports that the NY State Comptroller is worried about two stresses on the state pension fund - more state workers are retiring as the baby boomer cohort gets to their 60s, and the fund took a 6.4 percent loss on its domestic equity investments. The fund fell by $600 million in nominal dollars for an overall 2.6 percent return (after adjustment for payouts), which is well below the 8 percent return that is built into the pension fund's projections. The NY State fiscal year ends March 31, so the equity loss was before the steep drop in June.

The bright spots in the Comptroller's report are high reported returns of 24.8 percent in private equity and a 14.8 percent return in real estate. The Comptroller is asking the State Legislature to let him raise his bets in this area, the riskier "alternative investments" that also include commodities and hedge funds. Comptroller Thomas P. DiNapoli is now allowed to invest 25 percent of the state pension fund assets in these riskier areas - an increase of 10 percentage points was agreed to by the Legislature in 2006.

DiNapoli is essentially saying that the 8 percent target will be hard to meet in traditional debt and equity investments and is saying that he will need to take more risk.

But there are two problems with raising the allocation again:

1. Alternative investments are notoriously less liquid and are harder to value than listed equities.
2. As yesterday's NY Sun notes, alternative investments "increase opportunities for investment managers to make politically motivated decisions," because lobbying can be fierce over these types of investments, both by managers of alternative investments and beneficiaries of the investments.

In considering the request to raise the allocation, the Legislature might pay heed to investment adviser Daniel R. Solin, who describes as a dumb money move "Taking Extra Risk With Your Investments to Make Up for Recent Losses." He says: "Many investors are tempted to take more risk with their portfolios to make up for their losses. This is a bad idea. The fact that you may have lost money in the current markets does not mean that you are able to take more risk. In fact, it may mean the opposite: Your ability to withstand market losses has diminished." More on Dumb Money Move No. 11.

NYC BUDGET | Cuts to Meet Emergency

In connection with the fiscal emergency announcement by NY State Governor David Paterson, who has called for a $600 million cut in State spending, the following article from ten months ago is worth resurrecting. It is reprinted in full from the NY Sun.

NY State's budget problems are especially acute because the State does not receive property-tax revenues, which act as a fiscal stabilizer for the City. However, NYC will be affected by NY State budget cuts and by the shortfall in investment returns for the NYC pension funds below the required return of 8 percent – which means another hit to the City's budget because the City makes up the shortfall.

City Council To Oppose Any Midyear Budget Cuts
By GRACE RAUH, Staff Reporter of the Sun October 29, 2007

If Mayor Bloomberg proposes midyear budget cuts to soften the blow of lower than expected tax revenues, he may face stiff opposition in the City Council. The chair of the council's Finance Committee, David Weprin, said yesterday that he would object to layoffs or midyear cuts now, but he added that individual agencies should always be looking for ways to be more efficient. "I think we should be looking at ways to save money, but I don't think we should be looking at any kind of panic scenarios," he said. "At this point, I would just sit back and just look for savings, but not look for any midyear budget cuts of layoffs." In September, Mr. Bloomberg sent a memo to top city officials saying the city's budget director, Mark Page, would be in charge of closely scrutinizing all future hires to ensure that the only positions filled were those deemed "critically necessary." The mayor noted that the city's economy depends on the profitability and success of Wall Street and said "recent events in the financial markets are, therefore, a subject of deep concern."

A report in the New York Post yesterday, citing an unnamed source, said Mr. Bloomberg is instructing city agencies to list potential budget cuts and that a public announcement is expected this week.

On Friday, Mr. Page reported to the state's Financial Control Board that tax revenues for the current fiscal year and future ones are less than had been anticipated in June. Tax revenues are down $238 million for the current fiscal year and predicted to be down $577 million in fiscal year 2009 and down $638 million in fiscal year 2010.

A former chief economist in the city comptroller's office until 2006, John Tepper Marlin, said that if he were at City Hall, he would act quickly to address the lower tax revenue projections by holding a press conference today to announce an official hiring freeze.

"There is absolutely no point in waiting. You want to act immediately," he said. Mr. Marlin said he agreed with Mr. Page's projections and added that if anything, "it could be worse." Unlike past mayors, Mr. Bloomberg is not afraid to deliver bad news, he said.

A spokesman for the mayor, Stuart Loeser, wrote in an e-mail message that when Mr. Bloomberg has a budget announcement to make, he will make it.

"We don't announce that we're announcing them and then announce them at a later date," he said.