My Beauty Best Teacher

Frank Gyamfi-Yeboah &Nicholas Addai Boamah write about strengthening the mortgage market:

The main aim of a housing finance system is to provide funds to the producers and purchasers of housing both rental and owner-occupied. This simple description has spawned a broad array of institutional arrangements, ranging from contractual savings scheme, to depository institutions specializing in mortgage finance, to the issuance, sale and trading of mortgage securities. All of these arrangements have been created with the same purpose in mind, to channel funds from savers to borrowers. As economies develop, provision of housing finance often moves away from extensive reliance on special circuits towards integration of housing finance into broader financial markets. As populations continue to grow and urbanization accelerates, the necessity of providing adequate housing also mounts.

via GhanaWeb

Okay, so to be honest, I didn't watch the infomercial last night. But I read all about it and heard about it, and my post is actually going to not even be about what was said in it- I want to talk about how much it cost to put this thing together, and if any campaign finance laws were broken.

There are estimates that he spent somewhere around 4 million dollars for this infomercial... but how is that number arrived at? At NBC, he will pay $891,250 for the privilege, and at CBS he will spend $961,000. His program also aired on FOX, BET, Univision, MSNBC and TV One. I'm guessing he charged similar prices for those venues. That's the 4 million "cost."

But like any good liberal production, that's not the end of the story. First off, does it really only cost 4 million to get 30 minutes of prime-time coverage on TV? Consider this- NBC will charge advertisers $3 million per 30 seconds during the Super Bowl next year. Obama will only bring in 1/3 the audience of the Super Bowl, to be fair, so let's say it only costs him $1 million for 30 seconds of ad time. Feel free to double check my math, but that is about $60 million dollars (30 minutes X 60 second / 30 seconds). Let's say there is a discount for bulk ad buys like this- we'll give him 1/3 discount. That's $20 million dollars for NBC alone, not $900K. Huh. Must be something going on here.

Turns out there is. Under federal law, television networks charge political campaigns a different rate called "lowest unit cost"- which I'm honestly struggling to find information on. What I could come up with though is that I think there are two components to the "lowest unit cost" deal. The first is that they are not charging for 30 minutes as if it were 60 30 second commercials, but rather as if it were however many 30 second commercials normally are allotted for 30 minutes of prime time (16 per 30 minute show?) The second component is the commercial time which is being billed has to be at the lowest unit cost: what the highest volume year-round advertisers would be charged. Or, put a different way by this site "The lowest unit charge is the rate the station charges its most favored commercial advertiser for the same class and amount of time during the same time period or program."

Interestingly enough on this website is this blurb:

Political File.
Stations must keep a file containing records of all requests for broadcast time made by or for a candidate for public office. The file must identify how the station responded to such requests and (if the request was granted) the charges made, a schedule of the time purchased, the times the spots actually aired, the rates charged, and the classes of time purchased. The file must also reflect any free time provided to a candidate. The station must keep the political records for two years after the spot airs. You can find the political broadcasting rules elsewhere in this manual.

If you're a lawyer reading this blog right now, please email me on how we can do a freedom of information request on these ad buys, and find out the details on all of them, and then evaluate whether they complied with campaign finance laws.

Another important point to make- the "cost" of the ad is the cost of the spot buy on these networks, and does not include the cost to produce the film, which apparently was very slick. How much did that cost?

It apparently was filmed by Davis Guggenheim. As a renowned filmmaker, how much did he charge for his services? Or were they donated? Is that covered under campaign finance laws? Guggenheim has done a lot of work for Democrats over the years- His credits as a producer and director include Training Day, ER, Deadwood, and Party of Five. He directed and produced An Inconvenient Truth, which won an Academy Award for Best Documentary Feature. He also directed Obama's biographical film, which aired during the Democratic Convention.

How much did the set cost? Apparently there was a copy of the Oval Office, and other fancy sets- what was the price tag for those?

I don't have a lot of these answers, but that "$4 million" price tag probably underestimates considerably the cost of this infomercial.

Jerome Booth writes in Yahoo finance:

Africa's lack of globalization is evident in its unbalanced financing structure. State-controlled aid money dominates public finance in Africa in spite of improvements in macroeconomic policies, spreading democracy, and supportive commodity prices. Recent growth in local currency debt issuance is welcome, but foreign demand is rapidly exhausting local capacity to absorb selling, with potential destabilizing macro­economic implications if issuance continues unabated. Meanwhile, Sub-Saharan Africa remains the last great region of the world not to issue external sovereign bonds at all...Potential corporate bond issuance in Africa is maybe 10 times the sovereign (government) financing needs, but – and here is the rub – without a sovereign bond curve, the potential corporate issuers cannot issue as they cannot price sovereign risk. The bond market has far more capacity to finance Africa's development needs than aid, but bond markets need to lend to governments first. A balanced financing structure would replace aid-financed central government budget support with global bonds to sit alongside moderate local currency issuance and conventional aid flows.

Abdul Jabbar writes

"...Remittances from the recent migrants are emerging as an important source of external development finance. These inward flows of money have been growing in both absolute volumes, as well as relative to other sources of external finance. Perhaps even more important, remittances are the most stable source of external finance and are providing crucial social insurance in many countries afflicted by economic and political crises..."

Although Michigan's US House of Representatives 9th District has historically been a Republican district, in 2008 it elected a Democrat named Gary Peters. According to CQ Politics, in order to defend his seat, Peters has raised a whopping $2 million in receipts through the first quarter of 2010, which is considerably more than any of his GOP challengers (Raczkowski, Welday, Goodman).

People give money to candidates for two main reasons. One reason that people, businesses, and organizations give money to candidates because they believe in the candidate personally or support their policies. The second major reason that people, businesses, and organizations give money to candidates is because they feel that by giving the candidate money it buys them access to power or control over the candidate.

Although Gary Peters is one of the few elected officials who refused to take the Project Vote Smart Political Courage test (a test where a candidate makes known where they stand on important issues), and he has sponsored very little legislation in Congress, and has refused to meet with constituents or hold town halls, we do know some things about his positions on the issues.

As I discussed in my post Gary Peters Scores a 90% On the Pelsoi Index- A Vote by Vote Analysis of Peters Liberal Record in Congress, Peters has voted in favor of the stimulus bill, cap and tax, Obamacare, bloated budget bills, increased taxes, and raising the debt ceiling. He voted against Stupak's Anti-Abortion Amendment. With this information, we can now begin to look at who is supporting Peters in the 2010 election and think about what sort of policies they might be supporting or what sort of influence over the Congressman they might be buying.

According to OpenSecrets.org, the top industries that have currently donated to Michigan Democratic Congressman Gary Peters to support his re-election bid are (in order): Lawyers/Law Firms, Democratic/Liberal Groups, Industrial Unions, Real Estate Firms, Health Professionals, Building Trade Unions, Insurance Companies, Securities and Investment firms, Retired People, Public Sector Unions, Hospitals/Nursing Homes, Transportation Unions, Finance Companies, Lobbyists, Automotive Companies, Commercial Banks, and Finance/Credit Companies.

You make your own decisions, but my rough take on that is that Peters has consistently voted to support 'too big to fail' in a range of industries, and is getting paid back for that. Peters has voted to support government/industry/union partnerships in banking, healthcare, and automotive industries, throwing billions of dollars at the big politically connected firms to bail them out and protect them from competition from smaller, less connected companies.

That's wrong- Peters has got to go.

J Mawuli Ababio of the AVCA discusses the widening range of financing tools available to businesses in an AfricaNews interview:

‘There has always been a recognition of the lack of long term funding in Africa. There is no question about that. A lot of the African private businesses have traditionally been run by short term loans from banks. Today Venture Capital and Private Equity is assuming increasing prominence as a financing tool in emerging market economies, (including those in Africa), to finance private and public sector requirements on the continent.

Mary Kimani writing in African Renewal:

According to the World Bank’s International Finance Corporation (IFC), women own about 48 per cent of all enterprises in Africa. But they have the hardest time gaining access to finance...According to IFC Operations Officer Mary Njoroge, “by focusing on established small and medium enterprises that are looking to expand,” the organizations hope to “increase the share of women’s enterprises that actually make it to middle and large scale.”...[continue reading]

via African Loft

Rob Katz reviews Tom Friedman's recent article about patient capital otherwise known as meso finance:

Friedman writes about mesofinance, the missing middle of investment that comprises the gap between microfinance and formal finance. He notes that there's a huge opportunity to support bottom-up development in Africa by providing patient capital: longer-term, lower-interest loans and investments (versus venture capital).

The successful KenGen IPO has strenghthened Kenya's ability to domestically finance projects, Peter Munaita writes about the spillover effects across their fixed income markets:

In April investors put down Ksh26 billion ($361 million) for the initial public offer by the Kenya Electricity Generating Company (KenGen) which was oversubscribed by Ksh18 million ($250,000)..."this"...opened the door for corporations like the Kenya Pipeline Company, Kenya Airports Authority, the Kenya Ports Authority, the Kenya Roads Board and the Kenya Railways Corporation to sell their creditworthiness to investors...The optimism about the success of infrastructure bonds follows the successful flotation of similar instruments by cash-rich corporates, the latest being the second tranche of Shelter Afrique's Ksh500 million ($6.9 million) medium term note arranged by Stanbic Bank. Shelter Afrique raised Ksh200 million ($2.8 million) from the market in January on a floating rate basis to finance housing development in the country. The company finances developers with medium term loans to build housing, creating a vital link between individual borrowers and mortgage lenders.

via The East African

Rina Okonkwo writes about the genesis of corruption in Nigeria:

When did corruption in Nigeria begin? In the words of a colonial government report of 1947, “The African’s background and outlook on public morality is very different from the present day Briton. The African in the public service seeks to further his own financial interest.” The colonial report concluded that only public opinion could deal with corruption. The problem was that there was no responsible public opinion to check corruption in Nigeria.1

From as early as 1947, commissions of inquiry were held to investigate cases of corruption. The purpose of the inquiries was to expose wrong -doing and to punish the culprits.

Today, we hear much of the rampant corruption at the local government level. As early as 1955, just seventeen months after the inception of Igbo-Etiti District Council in May 1954, the colonial government held an inquiry into the affairs of the Council. The inquiry judged that the “conduct of the Council’s affairs had become a public scandal.” The colonial officer who conducted the inquiry, FP Cobb, noted, “public indignation was widespread and strong.” 2 The public was outraged at the corrupt behaviour of their representatives.

The report on Igbo-Etiti District Council revealed that there was ‘systematic corruption” in the appointment and promotion of staff and in the awarding of contracts. Bribes of L80 to L100 were demanded for unnecessary appointments. The brother of the Secretary to the District Council was hired above a more qualified applicant. In one case, a man paid a L400 bribe to secure a post and was never refunded his money when he did not get the job.

Contractors routinely paid ten percent of the value of the contract as bribe. The contracts were not awarded to the lowest bidder or to the most experienced or competent persons. At the end of its first seventeen months of existence, the Igbo-Etiti District Council was L6000 in debt. There was great wasting of public money due to “gross dishonesty in handling council affairs.”3

The local government councils have continued to be notorious for corruption. Why do such grassroots organizations attract such widespread graft? The people are often not prepared to undertake public office. They have no training in the procedures and ethics of public service. They have minimal education. There is poor supervision of the affairs 9of the Local Government Councils. The history of corruption in local government councils can show no change for the better.

In 1956, the Foster-Sutton Tribunal investigated the Premier of the Eastern Region, Nnamdi Azikiwe for his involvement in the affairs of African Continental Bank (ACB). Under the code of conduct for ministers, a government officer was required to relinquish his holdings in private business when he assumed public office. The Foster-Sutton Tribunal felt that Zik did not severe his connections to the bank when he became a Minister. The Tribunal believed that Zik continued to use his influence to further the interests of ACB.

Zik, his family, and the Zik Group of Companies were the principal shareholders of the African Continental Bank. ACB loaned over L163, 000 to the Zik Group of Companies at low interest. The Zik group did not have to repay the loans until 1971. ACB was a distressed bank. The new registrar of banks in 1952 refused to grant ACB a license. Attempts to find partners for the bank in Britain failed because of the insolvency of the bank.
In the words of a colonial government official, “Were a UK minister to be involved in a series of transactions the result of which public funds were used to support an otherwise shaky institution in which he was directly interested, he would be forced to leave public life.”4 Why did not the colonial government prosecute Zik for his failure to observe the code of conduct for government officers? The colonial correspondence revealed that the government supported the NCNC as the only party to embrace national unity. Without Zik, the NCNC would collapse. The national interest of the country demanded that Zik continue as leader of the party.5

The Governor of the Eastern Region Sir Clement Pleass further observed, “The exercise of public power for private profit is established in the East.” “The aim of the colonial government was not to establish a standard of honesty in public life. Only time and education can do that.” “A number of sensible people realized that Zik had done harm in the East in the last two years, but the mass of the people, ignorant and uneducated, voted him back to power.”6

When Zik called for a general election in 1957, as an alternative to resigning in the face of the findings of the Foster-Sutton Tribunal, the people gave him their support. The Economist observed that Nigerians had a “sunny and tolerant mentality” towards corruption.7 The colonial officer hoped that “Eventually sufficiently honest and enlightened people will be thrown up to rebuild the prosperity and good government of the region.”8

Obafemi Awolowo, the first premier of the Western Region, was found guilty of corruption by the Coker Commission in 1962. In 1954, the Western Region Marketing Board had L6.2 million. By May 1962, it had to exist on overdrafts amounting to over L2.5 million. A loan of L6.7 million was made to the National Investment and Properties Co., Ltd. for building projects out of which only L500, 000 was ever re-paid. The Western Region Finance Corporation and the West Nigeria Development Corporation also received loans of millions of pounds, which were never re-paid. The Coker Commission found Awolowo responsible for the all the ills of the Western Region Marketing Board, and Awolowo “without a doubt has failed to adhere to the standards of conduct which are required for persons holding such a post.”9

The First Republic, with Zik as the President, was marked by widespread corruption. Government officials looted public funds with impunity. Federal Representative and Minister of Aviation, KO Mbadiwe, flaunted his wealth by building a palace in his hometown. When asked where he had gotten the money to build such a mansion, KO replied, ”From sources known and unknown.” Minister of Finance Chief FS Okotie- Eboh responded to charges of accumulation of wealth by government officers by quoting from the Bible, “To those that have, more shall be given. From those that do not have, shall be taken even the little they have.”10

Azikiwe did not surround himself with men of good character. Chinua Achebe maintained that the political thought of both Awolowo and Azikiwe was based on politics for material gain. Achebe quoted from the autobiographies of the two men to show that making money and living well were primary goals in life for both our nationalist leaders. “If we were a more discerning people, we should not have trusted them with our lives even in the fifties and sixties.”11


The popular acceptance and even admiration for corruption was highlighted in Chinua Achebe’s novel about the politicians of the First Republic, A Man of the People. “The people had become even more cynical than their leaders and were apathetic into the bargain. “Let them eat,’ was the people’s opinion . . . It may be your turn to eat tomorrow.” 12

To be continued.

Michigan's current State Attorney General, Republican Mike Cox, is barred by state term limit laws from running for a third consecutive term in office, and so the position is going to be open. Cox did a fantastic job as AG for our state, and one can only hope that our next AG continues fighting for Michigan citizens. The Michigan Attorney General election of 2010 will be held on November 2, 2010, along with all of the other races. In Michigan, candidates for Attorney General are nominated by the respective political parties at their fall state convention, which will occur this weekend.

The Democratic Candidate will be Genesee County Prosecutor David Leyton, who won (as usual with most Democratic races) with no opposition, vetting, or primary election. He is a solid liberal lawyer who (according to his website) will 'fight for you' by fighting for more environmentalism, will push for more government control over your children, and will try to make the public safety in Michigan more like Flint's. Special interests are funding his campaign, and as AG, he'll attack citizens, the Constitution, and businesses in our state. So I think I'll suggest you don't vote for him.

The two Republican candidates are former judge Bill Schuette and current State Senator Mike Bishop.

Bill Schuette has a lot of endorsements and campaign finances, and as AG would be a solid, reliable AG, but he strikes me as a career politician who is better at getting endorsements and campaign finance than he is fighting for the Constitution of the United States and the Constitution of Michigan. Whenever he talks, he talks about why you should vote for him, about who is on his team, about who likes him, about how he is the best man for the job, about how great he is- but he never gives any evidence, reasons, or backing for these claims. I don't care who likes him and how popular he is, and he rarely talks about the issues or what he would do as AG. He looks through you when he talks to you, looking to what you represent and who you've got backing you, and I don't like that. Oh, he's a lot better than the Democratic candidate- he's conservative and understands the nature of federalism, something the Dem doesn't- and if he gets the nomination I'll pull the lever for him, but I'm not going to recommend him now.

A Conservative Teacher strongly and without hesitation endorses Mike Bishop for Michigan Attorney General. Mike strikes me as strong leader who isn't afraid to make tough decisions. He brings up the US Constitution quicker than anyone whenever you talk to him, and is quick to reflect everything back on it when he talks about the proper roles of state and national government. As AG, he'll fight for letting Michigan residents and citizens decide how Michigan runs, and push back against the encroachments by our national government in our local affairs. He will fight to expose corruption in various government agencies, and will continue to push for greater transparency in all of Michigan's government corrupt venture capital groups (Film Office and MEDC as examples). He's a solid conservative who is willing to risk the media's wrath to get things done in our state. Above all of that though Mike is a good guy- he's personable, he takes the time to care about your issues, and he is a solid family man. He's exactly the type of guy our Founding Fathers would have endorsed for Michigan AG were they around today- a real citizen/politician.

I strongly suggest that you vote for Mike Bishop at the convention and make him our next AG.

Alex Burger writes about the criticality of information for businesses in Chad (and everywhere else) where he runs an enterprise center. It is:

Based on the idea that small firms need four things to grow: access to information, access to training, access to finance, and a strong business enabling environment...The theory makes sense: businesses need information, training, money, and a good context to thrive.

Jeffery Sachs contends that:

Proper risk management is critical to the farmers' well-being and their financial viability since it increases their creditworthiness and thus allows them to make investments in high-yield activities such as higher value-added farming (using fertilizer to plant their crops). Engaging in these activities greatly diminishes the likelihood that a farmer will fall into poverty.
Citing the success of other financial schemes like micro-finance in boosting the lives of destitute farmers, Sachs raises the concept of micro-insurance as an instrument to further the progress already made. Micro-insurance as he envisions it, unlike traditional crop insurance, would have the effect of improving the fortunes of both the farmers and the companies involved and carry little risk.

via TreeHugger

Sanou Mbaye writing in Project Syndicate:

He speaks on the need to liberalize the remittance channels:

The effects of banks’ hijacking of national payment systems to service only the modern economy are compounded by the exclusive agreements that banks and money-transfer companies such as Western Union have signed with most African countries. These agreements lock out non-banking entities from the highly lucrative market for migrant remittances from the African diaspora, which remain a key engine of growth

Furthermore on how key it is to nourish the informal economies:

African states must now recognize that modernizing their informal sectors by integrating them into the modern economy can be a major development tool. Yet only a few countries have started moving in that direction. Nigeria has refrained from signing any exclusive agreements with Western Union and others, and its newly consolidated banking industry is making significant inroads across the region...

Arguing for the broader inclusion of more financial actors in national payment systems

Giving micro-finance institutions access to national and regional payments systems and electronic retail facilities will go a long way toward meeting the requirements of the retail and business sector in terms of banking facilities. It will also help facilitate access by the poorest to financial services, thus helping to reduce the high proportion of the un-banked population.

All of this will invariably spur development and integration of national financial systems and intra-regional trade. This will be a welcome development, because a large proportion of intra-regional trade is carried out by informal operators and small and medium enterprises that do not have access to the banking system. Moreover, economic integration and increased intra-regional trade are the best entry point into global markets for all countries.

More here

In The Inside Deal: Obama's Economic Program I wrote:

The Inside Deal is Democratic President Barack Obama's domestic economic program and is characterized by extensive government spending for politically connected groups within American society. It is aimed to reward those groups that supported Obama's campaign for the Presidency in 2010, such as labor unions, public employee unions, teachers unions, environmentalists, anti-war protesters, Wall Street, and big businesses. Some of the programs that were passed by the Democratic Congress at the time to reward these groups include the stimulus bill, the healthcare bill, and massive annual budgets. Increasingly during the height of the Inside Deal, there is a link between who receives taxpayer money from the federal government and their political connections. Called by some crony capitalism.

The Inside Deal continues to pay off for some groups and those companies and individuals and special interest groups recognize that in order for them to continue to be provided with political and economic support, they need to keep in power a group of politicians who will continue to steer money to them in spite of whether they deserve it or produce anything of value. That group of politicians in the Democratic Party, and so it is not surprising that the Inside Deal is creating a tight relationship between those groups that the Democrats steer money to and those groups rewarding Democratic politicians in the form of campaign finance.

One such group that has benefited from the Inside Deal is the Big Green Machine. Via theblogprof comes this story from the Washington Examiner did a little bit of journalism and reported on the suspected corruption between Democrats and Big Green Machine:

Officials of a dozen top Big Green environmental groups contributed more than $14.5 million to congressional and presidential candidates in 2008 and through the second quarter of 2010 with 96 percent of the total going to Democrats, according to an Examiner analysis of federal campaign data.


...Six of the dozen collectively received more than $160 million in federal grants and contracts, according to their 2008 or 2007 IRS tax returns, with the Nature Conservancy's $110.6 million being the highest, followed by the Trust for Public Land ($28 million), Audubon Society ($17.5 million), the Environmental Defense Fund (parent of the EDF Action Fund) with $3.6 million, Natural Resources Defense Council ($358,072) and Defenders of Wildlife ($205,021).

President Obama was the biggest recipient by far of contributions with a total of more than $2.4 million. Secretary of State Hillary Clinton, who was Obama's main 2008 primary rival, got $86,500. ...Obama's biggest groups of environmental supporters came from the Sierra Club ($917,965) and Defenders of Wildlife ($905,375).

This is the definition of corruption- they give campaign money to candidates who then support their companies and interests with tax money for 'research' or 'oversight' or 'awareness' or some sort of garbage. The relationship is one that use my labor and your labor to strengthen relationships between politicians and those who are politically connected, and that is not what America was about. Republicans do it too, especially with Big Oil and Big Defense, but it appears to be worse under Democrats since they pass bigger spending budgets and spend more money on discretionary items and appear to be a little less ethical about it all. That means anyone with a "D" in front of their name this election should be thrown out- it'll lessen the corruption, although then we need to go after "R"'s that are corrupt too.

Tempers flared Wednesday as several hundred people who were doing last minute campaigning for Obama have not been paid yet. Police were called to the Obama campaign office on North Meridian Street downtown to control the crowd. "I want my money today! It's my money. I want it right now!" yelled one former campaign worker.

I suspect that what happened is that the money that they were promised to be paid were paid instead to other less deserving people- that Obama spread the wealth around.

A spokesman for the Obama campaign said 375 people were hired as part of the Vote Corps program and said people were promised a $30 pre-paid Visa card to get people to vote for Obama. The article did not make clear where the Visa cards came from or how they were tracked with regards to campaign finance, but I suspect that terrorists operating out of Kenya provided these cards to rubes to get more rubes to vote for the One, and then decided to keep the cards. This is all pure conjecture on my part though. Read the story yourself here.

Finance Asia reports:

The overall African economy is expected to grow at 6.2% in 2007, compared with 5.5% in 2006. Countries such as Ghana, Botswana, Uganda, Zambia, Mozambique, Namibia and Nigeria are showing gross domestic product growth rates that are three- to four-times faster than those of the developed economies in the Euro zone. The Ghana Stock Exchange is one of the world’s best performing stock markets, while Botswana boasts one of the highest per capita government savings rates in the world