Month: November 2003

SILLY STRING THEORY: SERIOUSLY,, FOLKS!

Over the past few years, quantum physics has recognized something called “string theory,” which boils down to a sub-atomic model that unifies other theories, explains gravity, and describes tiny strands of wiggling energy at the heart of all existence. Fascinating stuff, in a Moebius-strip kind of way, but does it explain the full-on weirdness of Our World Today?

I’ve been working on a variation that skips the complicated trigonometry. I call it “Silly-String theory.” With Silly-String theory, the contradictions and senselessness that pervade so-called Western “civilization” are completely bypassed — just like Kenny Rogers’ stomach. For example, using this theory, one can finally solve that age-old riddle, “Which came first, the chicken or the egg?” (Answer: Doesn’t matter. The foxes are guarding the hen-house.)

Or, how about this one: “Why can’t the U.S. government locate Osama bin Laden or Saddam Hussein? (Answer: Doesn’t matter. Now hand over that $87.5 billion. Yes, with Silly-String theory, even the California wildfires may be fully addressed. In fact, the California wildfires were what drove me to begin the complex imaginings that have resulted in this ultimate postulation, big enough to cover any event, case, conundrum, and/or ontological query: It Just Doesn’t Matter.

Because when I watched California burn all last week, switching from CNN to MSNBC to Fox News and back again like a pyro with ADD, I kept waiting for somebody, anybody, to sing out, “Reinforcements have arrived!” complete with trumpets and kettledrums. It never happened. There were not enough firefighters, obviously, but nobody was shipping them in from around the country, either. Neither did there appear to be National Guardsmen on hand. A coworker’s sister out in San Diego said the Guard was gone to the War-front (see question, above, about Bin Laden and Hussein.)

I kept waiting for a newscaster or talking head to hammer the point that many of the fires (suspected arson) began on the same day. Nada, zip, nothing. I yearned for an analyst to blast Schwarzenegger for bee-lining it to D.C. and asking for big bucks, not firetrucks. And then came my breakthrough: Silly-String theory was born.

It happened in a cool restaurant/bar in Midtown’s Cooper-Young neighborhood. We were munching on chips and dip and I was halfway into a Tecate when I noticed that the bar’s two televisions were tuned to different stations, yet somehow seemed synchronistically connected: One TV was running a barrage of scenes from that day’s fiery disaster in southern California; the other was on some sports channel. Across the top of the sports statistics graph was the headline “ROME IS BURNING.” Juxtaposed with the scenes from the firestorm and with the sound turned off, the effect was one of delicious weirdness (or maybe the combination of salty dip and icy beer accounted for the delicious part — that’s all included in the theory somewhere, I’m sure.)

Elemental aspects of Silly-String theory range from Fire (Who started it? Doesn’t matter. Ship those new 20s over, pronto.) to Wind (Why are the politicians posing and shaking hands while California goes up in smoke? Doesn’t matter. Where are we heading for lunch?) to Water (Why are those little water-baskets so small and ineffective? Doesn’t ma–oh, shut up.) And just when you thought it was safe to unify all theories, an anomaly arises within the context of Global Warming. Oh, dear, Silly-String Theory is stretched to the breaking point when it comes to a threat of this unprecedented magnitude.

Recently, Congress took up a bill, introduced by Senator John McCain, confronting the challenge of Global Warming. The bill would have recognized Global Warming’s effects (melting glaciers, temperature fluctuations, catastrophic wildfires) and sought action to slow emissions that contribute to Global Warming.

Alas, Congress can only seem to agree to disagree these days: The bill was defeated, with one congressman even pronouncing Global Warming “a hoax.” Ironically, the day of the vote saw record-high temperatures in the South and early snow in the West.

Congress can agree on one thing, however: They want money. For the fifth year in a row, Congress has voted “Yes” to pay raises. So as to the question: How come our elected representatives in Washington can’t recognize Global Warming and act in a cohesive way to address the threat? Answer: Doesn’t matter — not as long as they’re getting their piece of the plunder-pie. Call this variation of quantum mechanics “String Cheese Theory.”

The Tennessee Department of Children’s Services (DCS) received another blow to its already tattered reputation when a report released Tuesday found that the agency was failing to improve the care of children in its care.

The report, conducted by an independent court-appointed monitor as required by the May 2001 Children’s Rights reform lawsuit Brian A. v. Sundquist, found the state in full compliance with only 24 of 136 different provisions. Of these, the monitor reported outright “non-compliance” on 84 of the requirements.

“We’re very disappointed as to the findings,” said Children’s Rights lawyer Doug Gray. “And not only are the findings disappointing, but the fact that DCS doesn’t seem to have a plan to get in compliance. It’s been 27 months and DCS has very little to show for those 27 months.”

The report is the first federally required report of the agency’s efforts to implement changes mandated in the case. The report was based on a review of more than 1,000 individual children in state custody.

Key non-compliance findings include:

DCS completed timely investigations of abuse or neglect of foster children in only 37 percent of complaints reported between July 2002 and May 2003;

Case workers made required “face-to-face” visits with foster children in less than 40 percent of cases reviewed; and,

Only half the number of foster children being reunited with their families were provided with services to promote safe reunification, and families were only provided these services a third of the time.

Gray said his agency is currently in a 30-day negotiation period with DCS and the need to return to court may be necessary due to the findings.

In a statement released by Children’s Rights, co-counsel in the Brian A. lawsuit, David Raybin, said, “This department has a long way to go toward meeting their legal obligations to these children. It’s disturbing that helping vulnerable kids by getting into compliance with this settlement has not been the state’s priority.”

DCS Commissioner Mike Miller recently appointed a 12-member search committee to replace Juanita White, former regional director in the Shelby County office. White was fired for oversight in a review of several child deaths when child abuse had been reported.

WEALTH INDEX

From all the publicity about the loss of manufacturing jobs, layoffs, dire government budget deficits, and the need for tax incentives and other forms of corporate welfare, you might think former executives are out on the street selling apples.

Relax, they’re still buying bigger Bentleys. By one unofficial but revealing index, the Memphis economy is as healthy as it’s ever been.

Memphis has two locally based Fortune 500 companies– FedEx and AutoZone. Within the last week, the stock of both companies hit an all-time high. That’s all-time high, not a 52-week high, signified by a little “u” in the stock market tables. FedEx sold for $76.38, while AutoZone topped out at $103.53. This at a time when the Dow Jones Industrial Average is still 2,000 points away from its all-time high.

If you play the market but don’t own either of these stocks, you might want to skip the next paragraph.

A little over a year ago you could have bought FedEx for $43. And in the spring of 2001 you could have bought all the AutoZone you wanted for $24.

These corporate giants aren’t the only Memphis companies enjoying a stock market boom. First Tennessee is selling for around $47, only $1 off its all-time high. Mid-America Apartment Communities is going for $32, within a buck of its all-time high. Same for Fred’s Discount Stores at $38. Other companies of local interest hitting all-time highs last week include Wright Medical and E.W. Scripps.

All in all, a pretty diverse slice of the economy– shipping, auto parts, banking and finance, real estate, budget retail, surgical supplies, and media.

The point is that executives aren’t the only ones doing well. Tens of thousands of Memphis-area employees of these companies own stock in them through their retirement plans or in ordinary brokerage accounts. Thousands more Memphians invest in them just because they are local sentimental favorites. This rising tide has not lifted all boats but it has lifted a lot of them.

Of course executives and big institutional investors have profited the most. They take the biggest risks and make the toughest decisions.

According to proxy statements, FedEx CEO Fred Smith owns 19.5 million shares worth $1.48 billion. AutoZone founder J.R. Hyde III owns 797,000 shares worth $78 million. Fred’s CEO Michael Hayes owns 1.9 million shares worth $72 million (and pays himself a mere $200,000 a year, far and away the lowest salary of local CEOs).

For anyone interested in stocks or ownership of Memphis companies, it’s well worth taking a closer look at proxy statements, an annual disclosure listing such things as executive salaries, stock ownership, and stock performance versus industry peers. Thanks to pressure from shareholder advocates and the Securities and Exchange Commission to make corporate disclosure more useful and understandable, this is far easier to do than it was five or ten years ago.

On the Internet, use Edgar Online or the stocks service on your browser. The proxy is sometimes listed as DEF 14A under “SEC Documents”. Don’t make the mistake of looking only at the annual report. It includes balance sheets, but the text is apt to include a lot of corporate puffery and optimistic “forward-looking statements.”

You can learn, for example, how family trusts and investment firms with board representation to match own huge chunks of companies like AutoZone, Scripps, and Wright Medical. Edward Lampert, head of an investment firm for wealthy investors, owns 25 million shares of AutoZone worth roughly $2.5 billion. The five-year chart shows that AutoZone’s stock languished between $20 and $30 for years until Lampert and new CEO Steve Odland began asserting themselves in 2001.

E. W. Scripps , owner of The Commercial Appeal, is headquartered in Cincinnati and has lucrative cable television stations in markets across the country. A Scripps family trust owns 29 million shares, or 87 percent of the stock. But little guys get a shot, too. When I worked there several years ago, employees were offered stock at $15. No, I didn’t.

Wright Medical, headquartered in Arlington, makes surgical devices including artificial joints. CEO F. Barry Bays owns 845,000 shares worth $25 million, but the biggest owner is Elizabeth Weatherman. Turns out she is a director and head of medical technology investments for the New York firm Warburg Pincus. They own 14.3 million shares worth $425 million. Quit your griping. You could have jumped in yourself in February for $14.

Certainly, not everyone shares the wealth. There are thousands of night workers laboring on the sorting line at FedEx for $11 an hour who don’t own stock. Hundreds more took the buyout offer and face an uncertain future. The AutoZone clerk who hooks up your new battery isn’t getting rich. Fred’s has serious union labor issues. And all stock market investors are in trouble if the market tanks the way it did from 2001-2003– or worse.

But stock market wealth in Memphis is good news for everything from philanthropy to luxury homes to bass boats, and it should not be overlooked.

Apparently, the old phrase “tantamount to election”– which in antique times applied to all local Democratic primary contests– can be taken out of mothballs and applied to the forthcoming special election to succeed Carol Chumney in District 89 of the state House of Representatives.

Chumney, a Democrat who opposes Republican George Flinn in next week’s nominally bi-partisan runoff election, recently resigned her legislative seat just before a cutoff date that would have required the GOP-dominated Shelby County commission to appoint a successor.

It is no secret that Democrats, at both local and state levels, were importuning Chumney to do so in order to facilitate their chances of holding on to the seat.

And, with several Democrats in the running and with Thursday’s filing deadline looming, it now appears that Republicans won’t even contest the issue. At least temporarily, that became the case when Republican Jim Jamieson, who had been the earliest declared candidate for the seat, even before Chumney’s resignation, said Tuesday he was withdrawing from the campaign.

In a news release, Jamieson took Chumney to task for timing her resignation so as to force the special election. “Had Ms. Chumney resigned the seat in August, the special election could have been placed on the October and November ballot and would have saved the taxpayers about $100,000. Instead, she resigned just before the November 4th deadline that would have prevented the County Commission from naming a replacement. Her reasoning for this was to make sure a Republican would not get the appointment. She followed the Governor’s office suggestions and is now costing the taxpayers another $100,000.”

Jamieson continued: “After long and emotional discussions with various citizens of District 89 and advisors of mine, I cannot with good conscience be a part of this wasteful spending Ms. Chumney has caused the citizens she claims to be so concerned about. I therefore announce that I will not be a candidate for the Tennessee State House of Representatives, District 89 in the upcoming special election.”

Although such other Republicans as Henry Loeb Jr. and former state Representative Tim Joyce had talked up a race, there have been no GOP filings yet to match those of Democrats Jeff Sullivan and Kevin Gallagher, with one from Beverly Robison Marrero and, potentially, filings from toher Democrats expected Thursday.

Jamieson’s explanation for his departure may be stretching a point, but, as local GOP chairman Kemp Conrad pointed out, District 89 is not an ideal venue for a Republican candidate. Al Gore defeated George W. Bush there by a margin of two-to-one in 2000 and Democrat Bob Clement prevailed over Lamar Alexander, the eventual winner, in last year’s U.S. Senate race.

Moreover, despite the state Republican Party’s proclaimed emphasis on gaining control of the Tennessee legislature, the party hierarchy in Nashville has not designated the District 89 position as a “target” seat. No funds have been set aside to support a Republican aspirant in 89, and the local party, which has concentrated on city election contests, also has a limited to non-existent budget for the purpose.