PRIVATE EQUITY FIRMS BORROW TO PAY THEMSELVES DIVIDENDS: “BUDDY, CAN YOU SPARE ME A (BILLION OR SO)”?

8/7/13

One of the latest crazes among private equity investors is, as it has been from time to time since the advent of the leveraged buyout (“LBO”) and junk financing, to have the companies they own borrow more money to pay dividends to their owners, i.e., the private equity investors.  This, of course, not only returns cash to the private equity investors but reduces their net investments in the firms they own, reducing their downside and enhancing, at least on a percentage basis, their upside.

As I intimated in the first sentence, this is nothing new.   Even back in the bygone days of the ‘80s and early ‘90s, when I was a professional investor in junk bonds, what we then called LBO firms, but which since have acquired the seemingly more respectable moniker of “private equity firms,” borrowed money against the firms they controlled to pay themselves dividends.  The catalyst for the current bout of such activity was the sudden uptick in interest rates of the last few months, from which junk bonds certainly did not escape.  Private equity firms adopted a “last chance” mentality, rushing to borrow money while it was still relatively cheap but perhaps headed much higher.

A natural reaction to private equity guys saddling the companies they own with more debt in order to make themselves, and their clients, even wealthier is abhorrence.  Yours truly has to admit that was my first reaction.  But upon a few seconds of reflection, a far less sinister motive can be ascribed to borrowing money relatively cheaply to pay one’s self a dividend. 

Such activity is a simple financial restructuring, a decision on the part of a firm’s owners to employ more debt, relative to equity, in the firm’s capital structure in response to a change in the cost of that debt and, perhaps, in the cost of the firm’s equity.   When debt is cheap relative to equity, it makes sense to employ a capital structure more heavily weighted toward debt.   Doing so reduces a firm’s overall cost of capital.  This is straight out of the financial management courses that I teach at NIU, Columbia College, and Elmhurst College and that thousands of my colleagues teach at universities and colleges throughout the world.  Of course, I have to stifle my debtaphobic instincts when teaching this concept, but it remains one of the basic principles of financial management.

That having been said, if I were still running junk bond funds, would I be buying debt issued to pay the owners a dividend, further levering up an already highly leveraged balance sheet, and thus increasing a firm’s financial risk?   While it would depend on the circumstances, the most important of which are the existing level of debt at the issuer, the borrower’s ability to generate cash on an ongoing basis, and a logical exit strategy for the buyout firm, my inclination would be to pass on such deals.  In other words, all things being, my inclination would be to avoid deals in which the use of funds is to pay the owners a dividend, even if such a recapitalization might make sense from a pure cost of capital point of view.

PRICE REDUCTIONS ON THE VOLT: THE CARMAKERS DOUBLE DOWN ON PLUG-IN TECHNOLOGY

8/6/13

As long time readers know, I have not always written favorably of the Chevy Volt and its kindred cars.   However, my problem with the Volt had little to do with the car itself, which is both relatively fun to drive and a technological marvel.  My problems with the Volt had just about everything to do with the inability of the numbers to work at anything like the car’s $40,000 sticker price, thus limiting its appeal to ostentatious greenies, a very limited market.

However…

Apparently, no one in the Volt’s short life has ever paid sticker price for the car, as far as I can tell.  A good buddy of mine leased one when they were relatively new at a monthly payment that reflected a sale price nowhere near its sticker price; in fact, if you played with the numbers, the lease had to be based on a price at which one could buy a similarly equipped conventional, mainstream mid-sized car.  At those numbers, the Volt makes a lot of sense, provided one drives more than a modest number of miles per year. 

GM has finally acknowledged reality, but not completely, by reducing the sticker price of the Volt by $5,000 to $35,000.  This is in line with a general trend of automakers’ reducing the prices, through very attractive lease deals and outright reductions of sticker prices, of their plug-in hybrids and pure electrics due to a very slow market for these cars.   GM says that reductions in the cost of manufacturing the Volt contributed to the decision to reduce its price.   This may be true, but Economics 101 tells us that it is weak demand at current prices, not falling costs, that leads to reduced prices.  If GM didn’t have roughly twice the normal inventory of this car sitting on dealer lots, it wouldn’t be reducing prices in response to a reduction in its costs of production; it would be maintaining prices and pocketing the reduction in costs.

So GM, Ford, Honda, and Nissan have reduced the prices of their plug-in offerings, making it easier for people to get into these cars.  However, these reductions in prices have trashed the resale value of these cars.  The Wall Street Journal reports this (Tuesday, 8/6/13, pages B1 and B2) morning that the trade-in value of a one year old Nissan Leaf is down 25% from a year ago; the trade in value of a one year old Volt is down 21%.   This cratering in trade-in values will have two effects.

First, it will, or should, infuriate those who bought plug-in vehicles, increasing their  overall costs of ownership and thus incurring ill-will for the car companies while providing another reason for people to sour on hybrids or electrics.

Second, and perhaps more insidiously, the incentive to lease, rather than buy, these cars will increase.  Even before these price reductions, as my friend who leased the Volt pointed out, it made little sense to buy a car in a period of rapidly advancing technology; better to lease and let the lessor take the risk of obsolescence.  (Yes, my buddy is a very smart guy.)  Now with the carmakers reducing prices in response to slack demand, the near absurdity of owning these cars has been exacerbated.   Unless the terms are heavily skewed away from leasing (They run in the other direction currently.), any thinking person will lease his or her plug-in hybrid or pure electric.   Thus, the ultimate lessors (the car companies, either through captive finance companies or the heavy subsidies they pay to third party lenders) will bear the risk, either of rapidly advancing technology and attendant obsolescence or of simply a cool reception in the market place, of owning these cars.

Not only, then, are the car companies taking a gamble by making and marketing these cars; by making leasing the only logical way for people to get into these automobiles, the companies are doubling down on their bets by making themselves the second owners, the receptacles, if you will, of these vehicles that may very well be obsolete or simply unwanted in the marketplace.

The impact on the stocks of these companies should be miniscule; electrics and plug-in hybrids are a very small part of their business.  But the implications for the technology of such vehicles, which still looks transitional, and perhaps for the company that specializes in such cars, Tesla (TSLA; See my 5/30/13 and 5/23/13 pieces, IF YOU WANT TO GET PEOPLE CHARGED UP, WRITE ABOUT TESLA (TSLA) and TESLA (TSLA):  THEGREENIES ARE CHARGED UP, BUT…), could be profound.

REPLACING FANNIE AND FREDDIE: “I’LL BE HERE WHEN THE MORNIN’ COMES; I’LL BE RIGHT HERE AND I AIN’T GONNA RUN…”

8/6/13

President Obama reportedly will propose today a revamped system of guaranteeing residential mortgage loans in this country.   The previous system, in which Fannie Mae and Freddie Mac, strange hybrids of private profit, public risk, and federal patronage, guaranteed mortgage loans with the implicit guarantee of the taxpayers, has obviously been a failure.  Mr. Obama proposes replacing them with private sector guarantors backstopped by a government guarantee, which sounds strangely like, well, Fannie Mae and Freddie Mac.

The Republicans are not quite clear on what they would replace Fannie and Freddie with but are paying their usual lip service to the private sector.   But a purely private mortgage loan guarantee system is a pipe dream.  Why?  Because there is no substantial market for the types of loans that have supported real estate in this country for just about as long as most people can remember—long term (usually 30 year), fixed rate loans with no call protection for the lender—without federal guarantees.  As long as we insist that borrowers are entitled to loans that feature almost incredibly juicy terms to them and just as incredibly lousy terms to the lenders, the government has to play a big role in the mortgage lending.

The obvious answer, it seems, to avoiding a repeat of the Fannie/Freddie debacle is to move away from the 30 year fixed rate loan model on which the real estate market has been built.   Remove the guarantees and let lenders make loans that make sense from an investment perspective, loans that they would be willing to hold on their books rather than sell to a government backed entity.   Variable rates would clearly be a big part of such a mix, but the cleverness and innovation of the free markets would make all sorts of loans, probably including equity participation loans, available to consumers.  But the 30 year fixed rate loan, ridiculously skewed in favor of the borrower, would probably become a museum piece.

Such a logical transition will probably never take place, even though it works in most other advanced economies.   The real estate industry would scream bloody murder.   Homeowners, largely at the inducement of the real estate industry, would complain that the value of their homes, previously inflated by government guarantees, would be hurt.  Potential home buyers would whine that their entitlement…the 30 year fixed rate loan…had been taken away from them.   And so Fannie and Freddie, or, more likely, something very much like them with a different name, will be around more or less forever.

Long ago, we decided, for whatever reason, that we would heavily subsidize homeownership, and thus investment in residential real estate, in this country.   The largest components of that subsidy are the deductibility of mortgage loan interest and the 30 year fixed rate loan made possible through the intercession of the government.  Neither makes much sense, but neither will be going anywhere soon.  As usual, politics trumps finance, economics, and common sense…and we live with the consequences.

LOW INTEREST RATE POLICIES: WHAT’S BAD FOR CHINA IS BAD FOR AMERICA

8/5/13

This morning’s (i.e., Monday, 8/5/13, page A2) Wall Street Journal features an article by Tom Orlik, “Murky Data Complicate China’s Policy Choices” that addresses the possible undercounting of Chinese consumption in calculating that nation’s GDP.

While Mr. Orlik’s main argument was, as usual, insightful bordering on intriguing, yours truly was especially struck by an observation made late in the article, to wit…

“Critics say low interest rates have crimped income for households by reducing returns on savings, denting consumption growth.  The International Monetary Fund estimates that low interest rates transfer about 4% of GDP a year out of the pockets of household savers and into the coffers of state-owned firms that borrow at preferential rates.”

I have been arguing for years that what I call “Ben Bernanke’s War on the Elderly,” or the continuing low interest rate policy that is by no means uniquely American, is in effect a huge tax on those with the prudence to save imposed in order to reward those who spend.   But never have I seen it put so succinctly, outside my blogs, as Mr. Orlik puts it in this morning’s WSJ article.   Unfortunately, Mr. Orlik is writing about China, so the comparison to the United States might escape some readers.  Further, the comparison is not as perfect as one would want; for example, in this country, the low interest rates transfer money out of the pockets of savers to the government and other prodigious spenders rather than to state owned enterprises, as in China. 

Still, the point is the same; low interest rates are having an insidious effect on our economy.   The immediate effects are to deter consumption and to make the lives of those who depend on their savings more difficult.  The effects will only intensify over the years as savers are pillaged in order to reward spenders with the predictable effect on our already miniscule savings rate.   One hopes that more people would make this point about the United States.

THE REAL DANGER OF THE SNOWDEN SITUATION

8/4/13

Having been away for some time (See my already seminal CLARK GRISWOLD, MR. PEABODY, AND ME, 8/2/13), I haven’t had the chance to comment on national politics.   So, to get back in the groove, a comment on l’affaire Snowden is in order.

There are those who think Edward Snowden is a hero or better.  There are more who think that Edward Snowden is a scoundrel, a traitor, or worse.  But regardless of what one thinks of Mr. Snowden, one should remain alert to the real danger Edward Snowden presents.  This danger was best illustrated by the reaction of Senator John McCain to the Russians’ granting temporary asylum to Mr. Snowden.  Mr. McCain called Russia’s action

“…a disgrace and deliberate effort to embarrass the United States.”

He went on to call for

--an increase in U.S. advocacy for human rights and civil liberties in Russia (as if such things are our business),

--a build-up of European missile defense programs, and

--a further expansion of NATO to include Georgia.

Therein lies the real danger of the Snowden affair…it gives people like John McCain, who never saw a conflict he didn’t want us to get involved in and never missed an opportunity to press for military conflict, an excuse to rekindle the Cold War and thus reward the “defense” contractors who underwrite the lifelong sinecures such politicians call careers.

And why did the Russians grant asylum to Mr. Snowden?   Surely to stick it in our eye, but also because they could.   America isn’t what it was in the post-war hegemonic world, unchallenged economically, diplomatically, industrially, financially, and militarily, the last despite the fervent efforts of the likes of Mr. McCain to set up Potemkin threats like the hapless Soviet Union, which couldn’t produce a decent car or washing machine, let alone threaten world domination or destruction.  We are still the world’s preeminent power, but our trajectory is clearly a downward one.

Some would like to blame our diminished status on Barack Obama.   Mr. Obama is surely complicit, largely through his pursuit of roughly the same policies as his predecessor, especially on in foreign affairs.  But Mr. Obama, and even Mr. Bush, has little to do with it.   Our decline is a reflection of the tides of history.  And those tides have surely been exacerbated by some bone-headed, and self-absorbed, moves by our politicians and large swaths of our population.   For example, we have long forgotten how to delay gratification and save money, to educate ourselves in things that matter, and generally assume the responsibilities of citizens of a great world power.  Instead, we have chosen to indulge our desires for general silliness in vain attempts at filling the holes in our lives that result from the abandonment of duty, honor, and responsibility.   And, buying the notion peddled by the likes of Mr. McCain that patriotism equates with militarism, we have gotten involved militarily and otherwise in places in which we had no interests or rights to intervene, further sapping our rapidly depleting resources.   Sounds a lot like ancient Rome, but I digress.  

We can blame Obama.  We can blame Bush.  We can blame the government and the politicians.  But we should also blame ourselves; we elected these people because they flattered us, telling us how wonderful we were as we submerged ourselves into decadence and silliness.

And so Vladimir Putin can stick it to us while we helplessly flail for ways to retaliate.  We’d better get used to such treatment.

WHO WOULD WANT TO BE ON THE METRA BOARD? WELL…

8/4/13

Having been away for awhile (See what has already become one of my most read posts, 8/2/13’s CLARK GRISWOLD, MR. PEABODY, AND ME.), I have had the chance to neither read nor comment on local news.  As much as anything, in an effort to get back up to speed, I have come up with the following hopefully short observations on the situation at Metra, the subject about which I last wrote before our departure (See 7/18/13’s post “METRA…THE WAY TO REALLY (MAKE PEOPLE WANT TO) FLY” and the posts to which it will refer you.)

The resignations of Metra Chairman Brad O’Halloran, vice-chairman Larry Huggins (to call Mr. Huggins’ resignation a resignation is laughable; he was told to go by Mayor Rahm Emanuel and, like the rest of the petrified lap dogs around this town, dutifully obeyed the Mayor’s orders, but I digress.), and board members Paul Darley and Mike McCoy, the latter of whom seemingly had little to do with the immediate problems at Metra, seem to confirm yours truly’s characterization of the Metra Board back on 4/21/13 (THE METRA BOARD:   PARADISE FOR POLTROONS,POPINJAYS, AND PATRONAGE PARASITES), before this latest episode surfaced, to wit

“…what you hear is true; the Metra board is a repository for hacks, hangers-on, suck-ups, toadies, lackeys, and other virtually unemployables.”

These guys are among the worst of the hacks that putrefy the politics of the Chicagoland area, indeed, the entire state of Illinois.  All of them, even those who try to portray themselves as heroes in what is only this latest debacle at Metra, have to go.

But what is the solution?  Some have proposed electing the Metra board.  But such an answer is laughable.   Even those of us who pay close attention to politics don’t have the time to follow the qualifications of those who would aspire to such an office as Metra Board member.  Getting nominated for such a position would require proving fealty to the people who control ballot access, i.e., the politicians.  Those citizens who for some reason feel compelled to vote for offices and/or people about whom they know nothing will just be checking the boxes put in place by the pols.  So electing the Metra board would be tantamount to the current system of political appointment.  Those on an elected board would be the same as those on an appointed board, to wit…

“…hacks, hangers-on, suck-ups, toadies, lackeys, and other virtually unemployables.”

I don’t know what the solution is.  There are many people who would serve honorably and effectively as Metra Board members (Yours truly comes immediately to mind.) but who stand no chance of getting either appointed or elected to a reconstituted Metra board; we don’t know the right people.  Further, we are not in a position, through owning (fronting for, really) or working for businesses that would benefit from our board membership, to gain monetarily from board membership; our motivations would stem nearly solely from an interest in public service.   While the pols around here pay lip service to such motivation, in practice pure public service is an almost unheard of reason for seeking office in these parts.

So Metra’s problems will continue; they come with the territory in the Land of Lincoln.   This is really a shame; Metra used to be the country’s premier rail line, providing, for the most part, efficient, timely, and relatively inexpensive transportation downtown from virtually anywhere in the six county area.   Other commuter systems, such as the Long Island Railroad, which I know from personal experience, couldn’t match it.   The problems at the top of Metra have to be affecting the level of service for the average commuter, providing yet another reason for those who pay the bills around here to look for other states in which to live.

See my two books, The Chairman, A Novel of Big City Politics and The Chairman’s Challenge, A Continuing Novel of Big City Politics, for further illumination on how things work in Chicago and Illinois politics. 

CLARK GRISWOLD, MR. PEABODY, AND ME

8/2/13

Travel:   A series of annoyances, major and minor (albeit occasionally interrupted by times of  joy), the major effect of which is to cause one to develop a profound appreciation for, and a nearly obsessive desire to return, home.

                                    Mark Quinn, 8/2/13

“No sane man will (travel overseas voluntarily.)”

                                    A paraphrase of Marcus Tullius Cicero by Mark Quinn, 8/2/13

Many of my readers consider my classic 7/11/11 piece on the Insightful Pontificator, ODYSSEUS, AENEAS, AND ME, which documented our travels to the eastern Mediterranean, to be the best post in my long history of blogging, and I wouldn’t argue with those who make this contention.   So when I told a few people that the Quinns were off on another of our expeditions, this time to Ireland and France, I was asked, or told, really, to write such a screed upon my return from this odyssey.   Even approaching the caliber of my 7/11/11 masterpiece will be a challenge, but I will do my best. 

At the risk of sounding braggadocious, the reason that my comments on our travels are so popular and/or infuriating is that I am blessed with a gift I inherited from my father, i.e., the ability to see things as they are rather than as we would wish them to be or, more to the point for pieces such as this one, as we are told they are.

(Allusions to comparable sites in Chicago are followed by explanatory parenthetical remarks, by the way.)

THE TWO MAJOR THEMES

I come back from any travel overseas with two enormous, all prevailing impressions. 

First, something I have known my whole life but which is confirmed, indeed, fortified, whenever I leave these shores:  nobody, but NOBODY, lives as well as we do in the United States of America.   You will periodically hear of some study from some institute with its head up its anal cavity that some country or other has a better standard of living than that which we enjoy in this country.   These people are not crazy; they are merely misinformed, have an axe to grind, and/or are trying to impress people, and probably themselves, with the importance they put on such things as high brow culture, “a lively arts scene,” or the omnipresence of cafes and bistros at which similarly self-attuned types can sit around and brood about the uncouthness of those around them.  Average people, and, if they were honest with themselves, even those who write of how much better the, say, French have it than we do, don’t care much about such piffles as a “lively arts scene” or “world class chefs” preparing smaller and smaller portions for higher and higher prices.   The average Joe or Jane, however, is concerned about such things as relatively cheap food and gasoline, housing that does not share walls, ceilings, or floors with its neighbors, wide open yet private spaces, and such simple pleasures as, say, iced tea and unlimited refills on fountain drinks with plenty of ICE, a commodity that is treated very much akin to gold in Europe.

Second, it never ceases to amaze me how many things people will tolerate in Europe that would appall them over here and/or how much people consider things somehow superior simply because they are found in Europe.   Tiny hotel rooms, impossibly narrow streets, absolutely insane driving, omnipresent cigarette smoke, outrageous prices for even the most basic necessities of daily life, lack of attention to personal or public hygiene, and other annoyances that would raise hackles, if not outright revulsion, here are embraced because they are in Europe.   Examples will follow.

BACKGROUND, OR WHENCE I COME

To give you and idea of my motivations, or lack thereof, in coming up with the keen insights you will find in this post, I want to clear up a few things.

First, I am not a reflexive hater of the French or of France.   I am not one to launch into tirades about “freedom fries” or “cheese eating surrender monkeys.”  While those who mistake sycophancy for friendship may argue otherwise, I contend that France has, since the inception of this country, which may have not been possible without help from Louis XVI, been a good and loyal ally.   Further, I have great admiration for French culture, history, and diplomacy and the pride its people have in their country.

Second, despite my ethnic origins, I am not a reflexive lover of all things Irish.  In fact, I find the proverbial “professional Irishman” an especially annoying sort and I do my best to avoid such people.  I am proud to be Irish-American, but I am deeply grateful that someone made the decision to get on the boat bound for the New World, enabling me, my father, his father, and his mother to be born on this side of the Atlantic.   Being of Irish extraction has many benefits and is usually a source of great pride, but it doesn’t have as profound an impact on my life or approach to it as many of my fellow Irish-Americans pretend it has on their lives.   

I love Irish music and occasionally feel more than a stir in my soul and a tear in my eye upon hearing it.  As a young man, I drank far more than my share of Guinness and Bushmills.  I have a passing knowledge of Irish history and politics.   But being of Irish descent doesn’t define me and there is more to life than being of Irish extraction.   As an Irish-American, I found the crowds of grown, doubtless American, men and women lining up on the streets of Dublin to have  their pictures taken with some idiot dressed as what we imagine St. Francis to have looked like or to (and I could barely believe me eyes when I saw this) put their heads though a hole in the face of a picture of leprechaun, complete with pipe and red hair, appalling and embarrassing …as did, I am quite sure, most of the residents of Dublin, even those directly profiting from such insulting silliness.

A NOTE ON THE PEOPLE

The French people we met and interacted with were, until the last day we were there, beyond lovely.   They were helpful, kind, funny, polite, and attentive.   Based on my limited experience (This is the second time we have been to France.  The first time were only there a day; this time we were there five days.), I have no idea whence the popular notion that the French are rude, snide and defensive arises.   We very much enjoyed the French and they appeared to enjoy us and, believe me, we don’t spend the kind of money that would inspire mercenary ersatz kindness.

So why did I say “until the last day”?   My wife was practically arrested and/or thrown bodily out of a store by a guy who told her to “leave my store and never return” when she tried to return something she had found cheaper elsewhere.   She was also shortchanged, and she is quite confident not at all unwittingly, by a crepe purveyor on the Montparnasse, if I have spelled that street name correctly.   You can see both incidents involved money and my wife’s frugality.   Remember this; while many of you may detect a sharp area of disagreement between the world’s most wonderful woman and her husband on such things as travel and what constitutes an attraction worth seeing, we profoundly agree on more important things…such as money and getting the most from it.

And what of the Irish?   I can best describe them, or at least those we met, as Iowans with brogues, which, given my deep and abiding love for our neighbors across the Mississippi, is about as great a compliment as I can deliver.   The Irish were beautiful…friendly, helpful, funny, full of mirth, merriment, and wisecrackery, seemingly genuinely happy to see us…etc.   The way we were treated in Ireland made me especially proud of my heritage.

NEWS JUNKY IN WITHDRAWAL

One of the especially annoying aspects of the trip was that our only news sources were BBC World, SkyNews, and CNN (either Europe or International; I can’t remember which one if indeed there are two.  In any case, it wasn’t CNN’s American manifestation).

So what’s so bad about that?

First, the initial five or do days of our trip coincided with the birth of the royal baby and, according to our news sources, his appearance was the ONLY thing going on in the world at the time.  I was long of the belief that we fought a revolution about 240 or so years ago at least partially so that we wouldn’t have to be concerned with such nonsense as the latest goings-on with the royals, but I suppose I was misinformed.   And even if I gave the slightest hair on my hindquarters about this latest batch of historical curiosities, I would still remain suspicious of the idea that the entire world had somehow stopped at the time of the new kid’s birth.  Watching our news sources, though, one would be thoroughly disabused of the notion that anything else anywhere in the world was worthy of the merest mention.

Second, even when we got away from reports on the newest of the British tourist trade’s loss leaders, both of our sources (By the time we got to France, we lost SkyNews.) have the annoying habit of repeating the same story over and over again.  And by the same story, I mean the SAME STORY, not a different telling of the same event.   For days, we saw the same clip of a correspondent telling us of the train wreck in Spain or the shootout in Florida.   We saw the same interview with Dominique Strauss-Kahn by a self-consumed BBC interviewer.  We heard the same debate on Myanmar and the same documentary on South Africa or the forced adoptions in Australia, circa 1955.  Over and over and over again. 

And I heard just about nothing of the financial markets, which struck me as very strange.  But we heard plenty of, say, African dancing in England, the latest pop singer in France, and developments on the trade front in the soccer world.

Agghhh!!!!!

PARIS

I wish I had Paris’s press agent.

Don’t get me wrong; I am not even going to try to argue that Paris is some kind of hell-hole (like that open sewer on the Adriatic, Venice; again, see my seminal 7/11/11 piece on the Insightful Pontificator, ODYSSEUS, AENEAS, AND ME.  I still have nightmares about the putrid odors and general filth that pervade Venice).   Paris is a somewhat pretty, historic, and, by European standards, clean city.   The people are kind (See above.) and the food is good, though overrated.  As you can doubtless tell, I am not an arts maven, but the Louvre is one of the most impressive places I have ever seen, as is Notre Dame.  The architecture of Paris in general is impressive, bordering on the other worldly.

The food is good and not as expensive as we thought, but bear in mind that, when traveling with the Quinns, you don’t exactly seek out the big ticket places.  We followed the sage advice of a great friend of mine who told us to seek out the Italian restaurants in Paris to get good food while not getting screwed too badly on the prices.   And he was right…on the first night there, we selected one of the bafflingly many Italian restaurants in town and I got a plate of calamari and linguine almost as good as I could have gotten at Bacchanalia on 24^th and Oakley on Chicago’s west side or at Clara’s in Woodridge in Chicago’s western suburbs.   I was also able to get some great beef carpaccio (thin slices of raw beef) and a really good steak cooked like I like it (kicking back) with a generous side of spaghetti at another Italian restaurant for 16.9 euro, less than $20 at quoted exchange rates but just short of $23 at the retail exchange rates you and I would get on our small amounts of spending currency…not bad at all.   And, of course, we were (or at least I was; the family is not as gastronomically adventurous as yours truly) able to get our snails, mussels, oysters, skate wing, calf's liver, and crepes of various kinds at quite reasonable, at least compared to expectations, prices.   The butter and the potatoes were especially good.  And I didn’t even know that French fries originated in France; I thought it was a name made up on these shores for deep fried strings of potatoes.   French fries were seemingly served with everything and were the best I’ve ever had.  (Bear in mind , however, that I am not a big fan of fries.)  Even the mashed potatoes, which I normally don’t like at all, were great in Paris. 

And, mirabile dictu, the restaurants would provide tap water (no ice, of course) upon request…AND NOT CHARGE US FOR IT!!!  (Think of the last sentence, by the way, when considering the arguments I made previously about how much better we live in America or how much people will excuse in Europe.)

But…

The city is crowded and shows its age, the latter not always in a good way.  It is infested with pickpockets and other petty thieves.  While generally clean, it does have its pockets of putridity.   The Seine is dirty and malodorous.  People are smoking everywhere outside.   This is especially bothersome in cafes because, even though there is no smoking permitted inside, the windows are open so that fellow patrons can blow their malodorous poison right into the faces of those seeking refuge in the lackadaisically enforced inside smoking bans.   While this doesn’t bother me all that much, I am amazed at how much it didn’t seem to bother people who cringe when smokers get within twenty feet of them, and wretch when a smoker gets within ten feet of them, in the United States.  They laugh if off… “After all, this is Paris!”  Huh?

Likewise, some of the city’s supposedly foremost attractions baffle me.  Take the Luxembourg Gardens, a few blocks from our hotel and supposedly a “must see.”  While the very center, if not geographically, then focally, of the gardens is genuinely beautiful, I can best describe the rest of the gardens as Lincoln Park on a very bad day.  (Lincoln Park is the largest of Chicago’s lake front parks…and the largest urban park in the United States, larger than Central Park.  I’ll bet you didn’t know that, but now you do.)  Perhaps I am giving the outer reaches of the Luxembourg Gardens too much credit…think Marquette Park on a very bad day.  (Marquette is a large park, complete with a nine hole golf course and a lagoon for fishing, that once provided recreation for that corner of the city’s working class bungalow belt.  Now it is a haven for drug dealer, pimps, prostitutes, gang-bangers, etc.)   As loyal readers know, I am no fan of Rahm Emanuel, but if our mayor found one of our showplace parks in as bad a shape as is most of Luxembourg Gardens, heads would roll and, of course, money that we don’t have would be spent, probably by “seeking the help of the private sector,” but I digress.   Gravel and dirt are everywhere; grass is barely to be seen.   The landscaping needs work, etc.  But, after all, this is Paris!

The Eiffel Tower?   What could be more fun than wandering around in the filth and the searing heat while being accosted by pickpockets and con men in order to wait in line for hours with people who place a very low priority on personal hygiene in order to see a view almost as good as the view from the apartment my wife and I rented just north of the Chicago River off Michigan Avenue when we were childless?   But, after all, this is Paris!

To get to these supposed marvelous, must see attractions, one must obviously get to central Paris from the airport, in our case DeGaulle.   This trip takes one through what looks like a never ending Englewood.  (Englewood, back in the ‘50s and ‘60s, was perhaps the very center of south side Irish Catholicism both geographically and socioeconomically…a step up from Canaryville and a step away from Beverly, it was, and is, geographically almost smack dab between those two other bastions of the South Side Irish.  But Englewood is very different now.   The South Side Irish are long gone, having moved to Beverly, Mount Greenwood, or Orland Park.   Englewood is now the neighborhood at the epicenter of our city’s world famous crime problems.)   But no one seems to mind; they somehow find areas in Paris that would make them hide under the seat of the cab back home somehow quaint, or at least interesting…after all, this is Paris!

Simply put, people will put up with a lot of things in Europe that they would find absolutely intolerable in the United States, and this is especially true in Paris because, after all, this is Paris.   This baffles those of us who see things as we are rather than believe the bullroar that has everyone believing that all things Parisian, or, more broadly, European, are innately superior to anything American.

Further, as loyal readers know, I am genuinely bothered when I hear the likes of Rahm Emanuel or Richard M. Daley yammer on about how Chicago has to become a “world class city,” whatever that is.  The implication, of course, is that Chicago is not a world class city.  But Paris is?   How does that work?   Who made that decision?  Is no one sober?  Is everyone blind?   Yours truly could make plenty of objective arguments that Chicago is a more “world class” city if anyone knew what that term meant.  But what would be the point?  It would only make an already long post even longer and every argument would be brushed aside, both by the Parisians and the legions of the brainwashed, with “After all, this is Paris!”

Again, if I ever become successful at anything, I would really like to have Paris’s press agent.

NORMANDY WITH A VERY FRENCH WOMAN

We went to Normandy to see the D-Day beaches and the American military cemetery.  We had a private tour guide, an amazing woman who was highly educated and cultured  and very French.   By the latter, I mean that, in her mind, France was number one in everything.  Yet we liked her.  (Though those who know me only through reading my blogs might not believe it, yours truly likes just about everyone.)  Not only was she quite personable and funny, but she also knew her stuff…culture, history, languages, etc. and thus made a terrific tour guide.  It was immensely interesting, at least to me, to get her take on European and world politics.

We encountered a few things we didn’t expect.  The first was the Norman countryside, which is almost incomprehensibly beautiful.   A tiny village, wheat, corn, and linen fields, cows grazing, another tiny village, another round of fields and cows, a field of sheep and then repeat…again and again and again.   Sort of like Iowa  (again, my supreme compliment), only with water as a backdrop and pre-Gothic churches and buildings.  It was beautiful.

The second thing we didn’t expect was what has become of the invasion beaches.  As we sat at lunch in the town of Arromanches which sits right on Gold (the British invasion) Beach (and what a lunch it was…a heaping plate of mussels, a bowl of fish soup, a few oysters, a skate wing, and apple pie with cream, which is a lot better than it sounds…all for about 16 euros.   And the bread…oh, the bread and the fresh French butter…wow!), I wondered if people actually swam at the beaches.   As much as I love to swim, I would have a hard time swimming at what are nearly sacred places.  But after lunch, we walked over to the beach and discovered that, yes, people do use the beaches as they would use any beach…swimming, sunning, relaxing, etc.   And I suppose that is what the guys who died there would have wanted…a return to normalcy.

However…

When we got over to Omaha (the American invasion) Beach, we discovered that a sizable portion of it has been claimed by a sailing club.  A portion of the beach is a launch rap for the sailboats of the well-to-do.  A sailing club?   On Omaha Beach?   There is something wrong with that.

Speaking of something wrong….

The book I brought with me on the trip was (and yes, I am 20 years behind on my reading of books; my near obsession with periodicals gets in the way of the books I’d like to read) was Dino:  Living High in the Dirty Business of Dreams, by Nick Tosches, which I highly recommend.   Since this was a biography of the King of Cool, it dealt extensively with his erstwhile partner, Jerry Lewis.   Though the book didn’t deal extensively with this aspect of Mr. Lewis, you doubtless know that Jerry Lewis was, and remains, a huge hit in France.  It is hard to imagine anything more incongruous.

So I asked our highly cultured, educated, and sophisticated tour guide whether it is true that the French love Jerry Lewis.  She replied, with as straight a face as you can imagine

Yes, of course.  I love Jerry Lewis.  We all love him in France.   He is so funny and clever.   Don’t you think he’s funny?

I left it at that, and remain dumbfounded at the very notion of Jerry Lewis’s being the cat’s pajamas in a country that considers itself such a cradle of high culture.

AND NOW…IRELAND

As hard as it sometimes is for me to say such a thing about any place I have traveled overseas, Ireland is a very interesting and pleasant place.  Besides the aforementioned people, I think what makes Ireland so delightful (too strong a word… “tolerable,” or maybe even “special,” which is about as complimentary as I get when discussing vacation destinations outside a day’s drive from Chicago, are better words than “delightful”) is that is the right distance, and not so much geographically.   You know you are in a foreign country when you are in Ireland, but it’s not THAT foreign, especially for those of us of Irish background.

An example might help explain this nebulous feeling of proper distance.  This is the year of The Gathering, a call for Irish from around the world to come to Ireland.   As part of the Gathering, various festivities are being held throughout the island.  On the first night we arrived in Dublin, our hotel gave us tickets to an outdoor celebration of River Dance, held a few blocks down the street.  The idea was to have some of the original band members play while video tapes of the River Dance played.  As it turned out, the technicals got bollixed up and the tapes, when they could be shown at all, could not be properly synched with the music.  But it didn’t matter; the music, both of the River Dance band members and of the warm up singer, a guy whom everyone in Ireland seems to know but none of us had ever heard of, was very good.   And the crowd was wonderful, a mix of families and young kids, old people and children, native Irish and visitors, primarily from the U.S. and Canada.   We felt like we could have been on Western Avenue…well, maybe Western Avenue with a smaller number of drunks.  And yet we knew we weren’t home.  It’s hard to describe, but it was just a great place to be.

Perhaps the highlight of the trip for me took place in Sandy Cove, a beach town just outside Dublin.  I got to swim in the Irish Sea in water that was very cold…just like I like it.  The natives (The place is unknown to non-locals; we only knew about it because our daughter, who had been studying in Ireland this summer, had been there with Irish friends.) told me the water was 10 degrees Celsius which, by my calculations is 50 degrees Fahrenheit.  It maybe wasn’t that cold, but it did take my breath away.   And, at the expense of sounding like the typical brainwashed tourist in Paris that I’ve cited so many times, it was the Irish Sea and I was the only American in the small number of people swimming at the Forty Foot, as they call it, after the rocks and the small cliffs surrounding this swimming site.   People were surprised that an American could take, and actually enjoy, swimming in this far from touristy and very cold patch of water.  As one of my new friends said “You must be swimmin’ in ice water back in the states.”  They invited me to join them on Christmas, New Year’s Eve, and, strangely, American Thanksgiving Day, days on which they always take a dip in the near icy waters.  While I won’t be back for any of those days any time soon, I did love it and could have stayed in and around the water all day, but my family does not share my enthusiasm for swimming in water so cold it turns one very blue.  I loved it.

Another highlight was the Cliffs of Moher, on the Atlantic in County Claire.  They, too, are breathtaking, but in an entirely different way from the water at Sandy Cove.   There was also the town of Quin, also in County Claire and of obvious attractiveness to yours truly, though it is a town that time has both forgotten and passed by.   Haunting and sad in many ways…very Irish in that sense.   Even Blarney Castle, which I didn’t want to visit due to my perception of it as a tourist trap, was wonderful, at least as much for the grounds as for the castle itself.  And driving on the wrong side of the road gives one perspective.

One more thing, and probably one of the reasons I love Ireland and the Irish…

Everyone in Ireland, it seems, goes to “America” on “holiday,” and most have been to Chicago, many on several occasions.   One of our cab drivers told us he has been from, as he put it, Alaska to Key West, has seen more of America than we have, and considers himself an alcoholic, but not on drink…on travel.  He has family in Jefferson Park on the northwest side and near Gaelic Park in the southwest suburbs.  One of our waitresses worked one year at a bar a few blocks from Wonderburger, one of the Quinn families favorite eating spots about two miles from my boyhood home.  She talked about how much she enjoyed living in Oak Lawn, an inner southwest suburb that is teeming with Irish of both the American and native variety. Several people besides our cab driver mentioned Gaelic Park, which is about two miles from my sister and brother-in-law’s home.  Boston, New York, California, and Florida are also, and obviously, favorite destinations of the people we talked to.   These Irish are no fools…when they get the time and money together, they go to America to live like Americans for as long as they can.  

In all, Ireland was a great place.  If I took any pleasure from traveling, I would go again.  And regardless of my general curmudgeonliness and disdain for travel, I suspect I will be back again; our second daughter is planning on doing her student teaching in the land of her forefathers and the world’s most wonderful woman will doubtless insist on a visit.

FINALLY…CONCLUDING

As anyone can tell, travel bothers me.  Why?   The crowds; I hate crowds, especially of slow walkers who care little for basic hygiene or manners.  (At the expense of sounding truly tasteless, I think I smelled more flatus on this trip than I have in my entire life.)  The airports.  Modern air travel, which has been called the Flying Greyhound in an expression that is perhaps not fair to Greyhound.   Not being in our own bed.  Not being in familiar and comfortable surroundings.  The havoc travel wreaks on one’s sleeping patterns.  The piles of work, mail, and e-mail that confront me on return.  And the pervasive feeling that I am someplace I shouldn’t be…or that I am not someplace I should be.  I should be at my desk at work, doing my writing and thinking and investing, not halfway around the world getting nothing done.

And yet…

On this trip, I got to swim in the Irish Sea, see the Cliffs of Moher, and visit the town that very well may my family’s ancestral home.  I got to drive a diesel for the first time.  Even though it was a van, I could sense and feel the torque…and got well over 30 miles per gallon, by my calculations, again, in a van.  I get the sense my next car will be a diesel.  I got to drive on the wrong side of the road.  We went to Mass at St. Andrew, a large and beautiful but largely unknown parish church in Dublin.  I went to mass, in French, at St. Sulpice in Paris, which I am told is featured prominently in the DaVinci Code.  I got to go to confession at Notre Dame, to Father Michalski from St. Louis, Missouri who told me that, coming from Polish heritage, he can’t explain what sounds a lot like his Irish brogue.

And mostly…

We got to spend time together as a family, time which is getting rarer as the kids get older and less interested in activities involving their parents.  We got to go to the French military museum in Paris, the World War II museum in Caen, and the American cemetery in Normandy, and I got to act as something of a guide at each of those places to our son, who is starting to develop an interest in the history that his dad so dearly loves.   We got to have our daughters, one of whom spent a week in Paris and the other of whom spent a few months in Dublin, act as our tour guides.  We got to share gazes at some of the world’s most beautiful religious art in the Louvre.  And, again and most importantly, we got to spend time together as a family…precious, fleeting, and increasingly rare time as a family. 

Though there were times during this trip, especially the day we spent playing “evade the pickpockets” on the filthy, putrid, and squalid grounds of the Eiffel Tower for God knows what reason, that I just wanted to go home.   I still hope that I will never have to travel abroad again.  But, as I said back in my 7/11/11 post, the world’s most wonderful woman loves to travel, and, while I continue to work on it, I have not yet gotten quite obnoxious enough on these trips to persuade her that traveling without yours truly would be a better deal for her.  Further, we still might have a few more years of traveling as a family left in the Quinns and no one in my family shares my enthusiasm for, say, Door County, the North Woods, Lake Geneva (Wisconsin, not Switzerland), virtually anywhere along the Lake Michigan shoreline, or, my favorite…our own backyard and Centennial Beach in Naperville.

So I guess I can’t yet burn the old passport.