Dick Durbin's 'Insider Trading'
Illinois Democrat Dick Durbin got a lot of bad press last week when Bloomberg publicized stock trades the senator revealed in his 2008 disclosure forms. On September 19, after participating in a closed meeting with Treasury boss Hank Paulson and Federal Reserve Chairman Ben Bernanke--this was when Paulson was trying to scare the bejesus out of lawmakers so they would pass his original TARP plan--Durbin sold off $42,696 of mutual fund holdings, and bought a like amount of Berkshire Hath-away--the hold-ing company of famed investor (and Democrat) Warren Buffett.
According to Bloomberg, "Over four days from Sept. 16 through Sept. 19, Durbin sold $83,156 worth of shares in mutual funds that invested in China and Latin America and in the RS Global Natural Resources Fund, which invests in mining, oil and other natural resources companies. Durbin sold shares in the Fidelity Southeast Asia Fund, the Matthews China Fund, the T. Rowe Price Latin America Fund, and Janus Overseas Fund, and the Aberdeen Natural Resources Fund." By October 2, "he had invested $98,046 in Omaha, Nebraska-based Berkshire Hathaway." (Durbin and his wife sold a third of their Berkshire shares by the end of 2008, taking a loss of $10,419.)
The stories sparked by the Bloomberg report portrayed a Washington insider with access to high-level information, acting quickly to protect his nest-egg. "Durbin cashed out during big stock collapse," ran a typical headline in the hometown Chicago Sun-Times.
But of course Durbin didn't "cash out." And almost all the reporters who ran with this story just seemed to assume that it was an astute move on Durbin's part to move the proceeds from his mutual fund sales into Buffett's stock. But as the "Oracle of Omaha" would probably be the first to say, past performance is no guarantee of future results. Berkshire Hathaway has mostly been gliding downward ever since Durbin bought it--when it was close to its 52-week high.
Indeed, every one of the funds Durbin sold has performed better than Berkshire Hathaway since last September 19. The chart here, which THE SCRAPBOOK cobbled together in five minutes at BigCharts.com, may be a little hard to read. But it shows the prices of the mutual funds Durbin sold and the Buffett stock he bought starting last September 19, and continuing to June 19. Just know that the little black line that ends up at the bottom of the heap--at minus 40 percent--represents the Berkshire stock Durbin bought. This may or may not have been "insider trading," but it certainly was inept trading.
Senatorial Entitlement
Being an officer in the Army Corps of Engineers is no easy task, and rising to the rank of brigadier general is evidence of character, brainpower, and intestinal fortitude. Brigadier General Michael Walsh, fresh from a tour in Iraq, has been dealing with (among other things) the restoration of the Louisiana coastline in the wake of Hurricane Katrina, and by all accounts, has done an exemplary job.
But until last week, when he was testifying before the Senate Committee on Environment and Public Works, he could hardly have expected that his reward for hard work and devotion to duty would be public humiliation at the hands of a politician.
Responding to a question from the junior senator from California, who is female, General Walsh prefaced his answer with the word "Ma'am"--assuming, no doubt, that he was expressing the customary deference and courtesy that politicians expect under such circumstances--but was swiftly, and unexpectedly, interrupted by his questioner. Barbara Boxer, the committee chairman who is famous on Capitol Hill for her hair-trigger temper, personal sense of entitlement, and arrogance--impressive even by Senate standards--addressed General Walsh.
"You know, do me a favor," she said, glowering at the general and adopting the tone of condescension one might use to rebuke a child. "Could you say 'senator' instead of 'ma'am.' I worked so hard to get that title, so I'd appreciate it."
"Yes, senator," replied a chastened General Walsh.
Video of this astonishing exchange can be seen to be believed on YouTube, and on innumerable websites.
THE SCRAPBOOK could spend the next few paragraphs explaining to readers that witnesses frequently (and appropriately) address members of Congress as "ma'am" or "sir," that military protocol demands such usage, that the Queen of England is customarily called "Ma'am" and not "Queen," that generals themselves are addressed by their subordinates as "sir" (or "ma'am"), that General Walsh was clearly endeavoring to be polite and respectful to Ms. Boxer, and that not all members of the World's Greatest Deliberative Body insist on being referred to by their job title.
But THE SCRAPBOOK won't bother with that, all of which is obvious. Instead, we will meditate for a moment on the extraordinary gall of Babs Boxer, on Barbie Boxer's gratuitous public insult of a distinguished soldier, on the culture of swollen egotism in Congress that gives noxious politicians like Mrs. Stewart Boxer the freedom to demean and insult individuals who have labored immensely harder than she--and accomplished considerably more over longer duration--in public service.
If Boxer demands to be addressed as "senator" in recognition of her official status, there is no doubt that nervous witnesses, frightened staffers, and anyone unlucky enough to share an elevator with her, will do so. THE SCRAPBOOK, for its part, can think of other titles she's earned.
Honoring Those Who Deserve to Be Honored
Kudos to Lexington Books for publishing within the last year two well-deserved festschriften honoring our occasional contributors Werner Dannhauser and Harvey Mansfield
Reason, Faith, and Politics (edited by Arthur M. Melzer and Robert P. Kraynak) gathers 11 essays by former students or colleagues of Dannhauser. The book reflects something of the scope of Dannhauser's interests and his learning, with topics ranging from the political predicament of Israel to Nietzsche's relation to the Pre-Socratics. Among our favorites are Ralph Lerner's wry look at wry authors, "Dispersal by Design," and Jeremy Rabkin's liberal case (of a sort) for a practice infrequently defended these days: "Liberalism Before Disenchantment: Why Jean Bodin Advocated Witch-Hunting." But they're all worth reading. They don't equal the experience enjoyed by those fortunate enough to have been taught by the witty and worldly Dannhauser, but they'll make you wish you had had a chance to enjoy that experience.
The Arts of Rule (edited by Sharon B. Krause and Mary Ann McGrail) consists of 19 essays by students of Harvey Mansfield. Wait a minute, you say! Wasn't there already a collection of essays honoring Mansfield-- Educating the Prince--edited by Mark Blitz and our own William Kristol? Yup. But there were so many more grateful Mansfield students than could fit into the first volume that a second was needed. These younger Mansfield students also do their teacher proud, with essays ranging from Adam Schulman on Xenophon to McGrail on Hamlet, Krause on Hume, and Steven Lenzner on Leo Strauss's Burke.