Thursday, November 05, 2009

What Jim Himes is Thinking Right Now

Democrats Confront Coalition Strains

Elections this week left Democrats scrambling to renew the coalition that elected President Barack Obama after independent voters, whose power to determine U.S. elections is rising with their numbers, broke heavily toward Republicans.
—The Wall Street Journal, November 5, 2009

First, who is Jim Himes, and why does he matter?

Himes is a freshman Congressman from the 4th Connecticut district, who defeated a moderate Republican incumbent in last year’s Obama sweep.

He is also an ex-Goldman banker—hey, who in Washington isn’t an ex-Goldman banker?—and he matters to investors because he is your basic party-line freshman Congressman, and a staunch supporter of health care reform.

A friend of ours who happens to be a doctor traded emails with Himes recently, and while you’d think an ex-Goldman banker would be more thoughtful than your average Congressperson—and solicitous of the real-world views of an actual doctor, as opposed to a lobbyist for Big Pharm or Big Hospital or Big Ambulance Chasers—Himes dismissed our doctor-friend’s views as being the product of watching “cable TV.”

But that was then, and this is now.

However the Talking Heads and party hacks—whatever their party—are spinning yesterday’s election results, what Jim Himes is thinking right now is this: “Holy cow. It’s not just cable TV.”

The reason Himes is thinking this—at least, he ought to be—is that in his 4th Congressional District, the voting was so anti-incumbent—not just anti-Democrat, mind you: anti-incumbent—that anybody with a suit and tie and a web site at has to be looking at the numbers and worrying about next year.

The numbers are these. Twelve months ago, Himes beat the Republican incumbent by 2,500 votes, out of a few hundred thousand cast. Himes did this by winning big the three cities in his district—Bridgeport, Norwalk and Stamford—while the Republican won the suburbs.

But yesterday—lost in the feeding frenzy over the New Jersey and Virginia governor races, and Mayor Bloomberg’s $110 million squeaker against a no-name in New York City—the city of Stamford, Connecticut, which Himes won by 6,300 votes, elected a Republican mayor.

It hasn’t happened there in 14 years.

And it wasn’t just Stamford where the discontent was expressed.

Leafy Trumbull kicked out a popular, competent, moderate Democrat, longtime First Selectman, for a first-time 29 year old—and the vote wasn’t even close.

Meanwhile, the Representative Town Meeting in Fairfield, a quiet suburb of 50,000 souls, went, overnight, from 28 Democrats/22 Republicans to 38 Republicans, 12 Democrats.

Politicians don’t know how to count money, but they do know how to count votes.

And Jim Himes—not to mention Chris Dodd, the state’s “Senator from Countrywide”—is surely counting yesterday’s votes.

For the record, we care not a bit who gets elected as far as these virtual pages go. Being investors, we must take the world as it is, not as we wish it to be.

And that world just changed, as today’s Wall Street Journal accurately reports.

Healthcare reform may not be dead—something will be passed. But it will be different, and it won’t be what the House has proposed.

Jim Himes, and his fellow ex-Goldman bankers, will see to that.

Let’s just hope they start listening to real docs and real nurses, instead of lobbyists, and cable TV.

Jeff Matthews
I Am Not Making This Up

© 2009 NotMakingThisUp, LLC

The content contained in this blog represents only the opinions of Mr. Matthews.
Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever. Also, this blog is not a solicitation of business by Mr. Matthews: all inquiries will be ignored. The content herein is intended solely for the entertainment of the reader, and the author.


Anonymous said...

Listening to doctors and nurses is all well and good, but part of the long term answer to health care has to be expanding the supply in a way that doctors who had to put in 4 years of college, 4 years of med school and at least 3 years of residency won't like.

John said...

I have emphysema cause i was a smoker. I had hepatitis twice cause i was a drug user. My lungs and liver aren't all that bad cause i stopped the smoking and drugs long ago. I take meds for high blood pressure cause i used to eat pizza and ice cream and was 60 lbs over weight. I stopped the pizza and lost 30 lbs. A few more months and i will no longer be taking meds for the high blood pressure and calestral.. Unlike many who's problems aren't self-inflicked, i was a fool . Best think for health care is a clean mirror.

PhillipCharles said...

Mr Matthews,

I enjoy reading your blog and make it a point to read each post as they are made available. I rarely come away not feeling like I have been enriched in some way or have received valuable, and sometimes entertaining, insight on relevant topics of the day. Lately, however this site seems to be populated by the thoughts of an intelligent man over-exposed to the rubbish that comes across the cleverly-disguised show business animal that is Fox News. It is as if Karl Rove has hijacked your keyboard. Please say it ain't so!

The WSJ, which you and I read daily and from which you frequently post smart and objective critiques has, since its change in ownership, become less and less relevant to those of us seeking learned investment news and commentary. The editorial page, once a bastion of New England republicanism, is now a crude caricature of something I cannot identify. It seems as if Mr. Murdoch somehow wants to appeal to both the capitalist bourgeois and the Tea Party crowd. This is a journalistic model I find rather indigestible.

All of that being said, I have learned much here in the past 3+ years and look forward to learning much more in the years to come.

Thank You,

Jeff Matthews said...

Prince Charles: I didn't understand your Karl Rove comment until I noticed tonight while reading my print version of the WSJ that Rove wrote a piece on this suburban vote issue in the WSJ.

Frankly, I don't read Karl Rove, except to occassionally marvel at how a guy who spent 8 years justifying the biggest ramp-up in government since LBJ now has the nerve to complain about the lack of fiscal responsibility under his boss's successor. In short, I think he's full of it.

So I didn't get this your-blog-has-been-taken-over-by-Karl-Rove thing, until noticing the Rove Op-Ed.

But that said, I still don't get your problem, actually. If you don't want to learn something that apparently is somewhat offensive to your political point of view, that's okay unless you're trying to be a successful investor, in which case you had better get out beyond your own comfort zone once in a while.

The fact is, what happened yesterday is quite stunning, whatever way you vote.

And it will likely make a gigundo healthcare bill harder to pass, in my opinion.

Which has implications for healthcare stocks.

Period, end of story.

I couldn't care less what Rove has to say about it, or Fox News, or MSNBC, or Obama's press secretary: the facts are what the facts are.

Glad you've learned something here, but also hope you'll strive to learn something outside what you seem to think you want to know!


But What do I Know? said...

Why do you think this has to do with healthcare? Wouldn't it be more obvious to say it's about the economy?

Jeff Matthews said...

But What Do I Know? Good question, and who really knows what the vote was about. Regardless, when votes go against politicians, they cut and run. And healthcare is the big agenda item.


outlaw josey wales said...


Governors do not vote on federal bills. Lost in the speculation on whether this is a referendum on Obama is the actual fact that D's gained 2 seats (and thus potentially 2 votes) in Congress (CA-10 and NY-23).

Voters are in a foul mood, and rightfully so. It's the perfect environment for throw the bums out voting. Sadly, even if you replace 100 D's in the House with 100 R's, it will not make a damn bit of difference because government has become fundamentally uninterested in what's good for the vast majority (i.e. middle class) of Americans.

Read Mancur Olson. As currently constituted and regulated, our government will almost always be more susceptible to grant the desires of small and focused lobbying groups than the sincere wishes of the vast swathe of the poor and ignorant electorate.

Jeff Matthews said...

Outlaw: A. Those congressional votes were one-offs. The underlying shift in sentiment was huge--talk to your local state rep about it, Dem or Rep, and ask 'em. B. Congressional elections are in 12 short months. C. Campaigning starts now.

As for Governors not voting on Federal bills, well, yes, that is true...but I'm not sure why you're making that point: the post was not about what Governors are doing.

Finally, the post was not about "a referendum on Obama." He is not even mentioned in the post.

Why is everybody so touchy about him?


But What do I Know? said...

Agreed, Jeff--it's not like I have a better handle on the election that you or anyone else. In my own analysis of Bucks County, PA elections it seems that the swing voters who were inclined to vote Democratic/for change in 2008 were voting for Republicans/no change in 2009. Hard to interpret, but it does seem to me that support for Obama in the apolitical upper-middle class white people is eroding but not gone.

But when interpreting elections, I think it is always better to assume it's the economy, unless the economy is good (fickle bunch, aren't we?)

Anonymous said...

"Finally, the post was not about "a referendum on Obama." He is not even mentioned in the post.

Why is everybody so touchy about him?"

I can understand your sentiment, but if you are to read your own blog about political topics, you would have to also tell us why are you so passive-aggressive about him?

It's clear that you are no fan of most politicos either side of the isle, but in your strange way, you try to make it seem like you are not passing a judgment in politics while you clearly do. May be if you were outright about your feelings, people would not read between the lines so much.

Jeff Matthews said...

Anonymous says: "I can understand your sentiment, but if you are to read your own blog about political topics, you would have to also tell us why are you so passive-aggressive about him?"

Excuse me for asking, but why would I "have to tell you" anything?

This is not a political blog pushing a political agenda. Politics does comes into it when whatever is being done in Washington is going to affect business, because business affects stocks, which is generally what we care about here.

The piece on Thomas Frank certainly wasn't about stocks, but it was not about Obama, either. It was about a really dumb political move that, taken to its logical conclusion, I found frightening...which was being defended by a columnist who, I think, couldn't see the forest for the trees.

Sorry for that subject-creep, but we do write about whatever strikes our fancy, not just about quarterly earnings calls.

As for Obama, or Bush, or any of them, I can be "passive-aggressive"--whatever that means in this instance-- or anything else I want, unless there's some sort of rule against pointing out misguided policy mistakes.

I mean no offense to Democrats pointing out that the trillion-dollar healthcare reform package is not based on analysis but on lobbyists, or that the $878 billion "stimulus" plan had almost no stimulus to speak of.

Nor did I mean offense to Republicans when I wrote about Bush's silly $168 billion tax rebate, which was so ill-timed they might as well have put the money into the landfill directly.

Must I choose one side or the other?

I know Cramer used to say he was a "Rubin Democrat" (back before the crisis brought down Rubin's bank), and I heard Cramer say more recently "I voted for Obama, not Nancy Pelosi," but I don't particularly care about Cramer's politics, and I don't know why anyone cares about mine.

We are, as I have said before, equal-opportunity skeptics here. Somebody recently asked why we called out Paul Krugman on healthcare reform rather than Karl Rove, and I told him that Rove doesn't matter--he's simply a retired political hack; Krugman matters because he's helping shape economic policy.

At the end of the day, investors need to keep their ideology out of the trading room.

If some readers feel a threat to their own ideology because we come down hard on the side of facts, well, nothing I can do about that except suggest keeping an open mind.


BuzzP said...

You say -

"Rove doesn't matter--he's simply a retired political hack; Krugman matters because he's helping shape economic policy."

Now take that a step further - Fox is just a political hack, interested not in journalism (also true with nearly all Murdoch publications) but in profit through the exploitation of fear and falsification. You are smart enough to be aware of the research that indicates that the Fox News audience is far less aware of objective reality than the viewers of any other TV news source (broadcast & cable), even less aware than the viewers with no steady news viewership. (Lest we forget, far into last Tuesday night Fox was not only predicting but claiming a victory for Hoffman in NY-23. Nor should we forget FCN's hyping of the Tea Parties, with organizational, financial, and promotional aid.)

So, on one hand you have a clear and consistent implementation of the "Big Lie" that permeates not ony opinion shows but supposedly fatual/news shows; on the other hand, you have news operations that follow the news (not perfectly) and have some opinion shows in what is now referred to as the "Entertainment Block" - weekday prime time. If it were just O'Rielly against Obermann against Dobbs, etc., I would agree with you "that's what a democracy is." However, that is not it.

OTOH, you are right about it being a bad time to be an incumbent - but that has nothing to do with Obama or Himes or Bloomberg or Corzine - it has to do with the state of the union: permanent war, lousy economy, fear of losing one's house, etc.

You should also not forget that Himes has some bravery points for voting against the insurance companies - or do you think Joe Lieberman (Independent senator for the insurance industry) is right?

I too have long enjoyed your blog posts, especially for your sense of humor and your converage of Omaha.

Jeff Matthews said...

BuzzP: I'm glad you read and glad you've enjoyed the humor we find in Wall Street's Finest...although admittedly it doesn't take much to find humor in that.

Still, I found this sentence appalling, frankly:

"You are smart enough to be aware of the research that indicates that the Fox News audience is far less aware of objective reality than the viewers of any other TV news source (broadcast & cable)."

'Objective reality' defined by who? You talk about taking things 'a step further'--well, you take this kind of attitude a step further and you are talking about very scary stuff, in my view.

I have extremely liberal friends--and I mean extremely liberal friends--who are as much out of touch with what you call 'objective reality' as I think my extremely conservative friends are.

And since I see no sign that MSNBC is more aware of 'objective reality' than Fox, I think banning one and not the other is nonsense. They're both cheerleaders, not play-by-play commentators.

As for Fox calling elections early--well, Bush didn't ban ABC because it called Florida early for Gore, did he? And Truman didn't ban the Chicago Daily Tribune after "Dewey Defeats Truman," did he?

I concluded long ago that extremism is extremism, whatever side it's on. That's my approach to this whole deal, and I hope you respect that as I respect your approach.



BuzzP said...

"Appalling" - high praise, indeed.

Objective reality is what happens - here in lower Manhattan, it's hazy; in Pakistan, a car bomb killed 34; somewhere in the US, a house is being foreclosed as I write this. Those are all objective facts. They are all covered by various news outlets, with different levels of detail. There might be some little hints within the coverage of an opinion on the causes (the "why"), but the who, what, where, and how in most cases will be roughly the same.

That is not true of the news coverage on Fox, no matter how much you wish otherwise. Fox not only opines on the why, but the who, what, where and how.

You may want to accuse me and other readers of unremitting bias, but I hope you will not do the same with the Pew Center, which found that Fox news viewers were nearly the lowest scorers in 2004 on a 4 question quiz (party control of House?; name of leading terrorist group?; was Martha convicted? [most correct answers overall for all respondents]; number of troops dead in Iraq? [the war was barely 1 year old when asked]) I know those are not objective facts to some, but they sure look like it to me. Do you disagree?

In fact, they sure look more objective than the fall in VRAD, in which case there was no witness, only a machine that could have been hacked.

As someone who has some experience in the news biz, I would also like to mention that no place I ever worked instructed me as to what the day's "angle on the news" was to be - suggestions of stories to cover, yes, but a daily briefing on what opinion line to follow in covering news stories, no - but Fox News does it every day, right down to the catchphrases which somehow seem to be the same ones Republicans are repeating all over town. (Remember "Terrorist Fist Bump"?) Coincidence? You tell me.

As much as I dislike Fox, I dislike them for their distortion, not their views. I am a believer in the press, and I read much of it - right as well as left. I have voted Libertarian, Republican, Democratic, and Green in the past, and do so depending on the issues and the person. I believe that all citizens should be informed, not just coddled by bias they favor. That is why Fox News is an abomination: the Big Lie denies reality to those who view it.

Jeff Matthews said...

And MSNBC is not distorted? Please. You're reading as much into Fox as Fox reads into MSNBC.

As for the 'objective reality,' well, if those are the 4 questions that determine 'objective reality,' then you really have something.


BuzzP said...

Do you have a better metric for objective? Those were 4 major news bits back in 2004; perhaps you'd rather they asked about the price of VRAD?

And what is this thing for MSNBC? Bill Gates did something you don't like?

I never would've thought you're part of the "angry old male" demo - perhaps I'll have to rethink.

Oh, and in case you didn't hear about it, Rupert labelled Obama a racist on Sky News Australia. But I guess you'd call that an objective fact.

Jeff Matthews said...

BuzzP: Ah, the personal insults begin!

Maybe we should give you an 'objective reality test' to determine if your voice should still be heard...

Nah, we don't censor here. Insult away. Just keep the language clean.


BuzzP said...

Perhaps you didn't mean to insult me first, or you consider "appalling" to be a compliment.

I appreciate your views too much to engage in ad hominem tirades, so I will end this string of rants with a quote I saw on the subway this morning:

Every man takes the limits of his own field of vision for the limits of the world.
Arthur Schopenhauer

Jeff Matthews said...

As this drifts into nothingness, I can only point out that I said the sentence was appalling.

I made no remarks about you being part of an angry old lefty demo, or anything else about you.

A man hears what he wants to hear, and disregards the rest...Paul Simon.


Anonymous said...

You went way over the top in attacking Jeff (not that Jeff can't defend himself because he already did, but to just throw in the humble opinion of a largely disinterested third party.) Jeff opined that your sentence was appalling. From my experience, almost everyone says or does something appalling from time to time (and that certainly includes me--there are a few things from time to time that I would like to take back.) I can't see anything that he personally directed at you or your character--just a comment on that one sentence. Frankly, I view your reaction to Jeff to be bordering on appalling, especially if you actually are a largely unbiased journalist as you claim to be.