The Daily Parker

Of course I'm going to blog about these three articles.

First, former George W. Bush speechwriter and lifelong Republican Michael Gerson looks at the culture of celebrity that surrounds the President and says "our republic will never be the same:"

The founders generally believed that the survival and success of a republic required leaders and citizens with certain virtues: moderation, self-restraint and concern for the common good. They were convinced that respect for a moral order made ordered liberty possible.

The culture of celebrity is the complete negation of this approach to politics. It represents a kind of corrupt, decaying capitalism in which wealth is measured in exposure. It elevates appearance over accomplishment. Because rivalries and feuds are essential to the story line, it encourages theatrical bitterness. Instead of pursuing a policy vision, the first calling of the celebrity is to maintain a brand.

Is the skill set of the celebrity suited to the reality of governing? On the evidence, not really.

Second, Crain's business columnist Joe Cahill calls out Eddie Lampert's offer to buy Kenmore for $400m as a call to put Sears into hospice care:

There's plenty to worry about in the latest letter from Lampert's ESL Investments. First, Lampert is offering just $400 million for Kenmore, supposedly the company's crown jewel. When he first floated the idea of buying the household appliance brand in April, estimates pegged the likely selling price at $500 million or more. Maybe the lower bid is intended to elicit higher offers from potential third-party acquirers. Or it may signal that nobody else is interested and ESL is angling for a bargain.

Second, the offer is both nonbinding and contingent on ESL finding a third-party equity backer to finance the purchase. The letter says ESL is "confident" it can find such a backer. In other words, billionaire Lampert isn't willing to risk his own money buying Kenmore. This is consistent with his recent reluctance to raise his bet on Sears Holdings as a whole. As I've written before, he could easily take the company private—at the current market capitalization, the 46 percent he doesn't already own would cost less than $100 million—and capture the full upside of a turnaround. He's shown no interest in doing so.

And finally, on a happier note, the Chicago Tribune lists eight bars where people can go to read:

After living in the United Kingdom, freelance book publicist Jonathan Maunder turned to Chicago’s literary greats to connect to his adopted city. He remembered a night last year visiting Rainbo Club, the bar favored by “Chicago, City on the Make” author Nelson Algren.

“As I stepped out of the bar, a little drunk on both a couple of pints and Algren’s beautiful writing, I stood for a moment under the red neon of the Rainbo Club sign, which was reflected on the just rained on street, and felt a powerful connection to the place I was in and its history,” he said.

[He recommends] Kopi, A Traveler’s Cafe
5317 N. Clark St., 773-989-5674

A friendly, relaxed cafe/bar, which always has people and a good atmosphere (and sometimes accordion players) but never feels overly busy and hectic, in a way that might be distracting from reading.

Given that Kopi is a 20-minute walk from my house, I may just stop in this weekend.

I was a little bummed that the Duke of Perth didn't make the list, though.

Eddie Lampert's hedge fund, ESL, is making a bid to buy the only remaining viable piece of Sears from, well, ESL:

ESL’s proposal valued Kenmore at $400 million, excluding the impact of cash or debt, according to a letter from ESL to a Sears board committee that was filed Tuesday with the Securities and Exchange Commission. A separate proposal valued the Sears Home Services division’s home improvement business at $70 million, with a potential extra $10 million if the company met certain financial benchmarks.

Lampert’s fund’s initial letter offering to buy certain Sears assets and break up the company also included the Sears Home Services Parts Direct business and certain Sears real estate assets. According to the letter, ESL is still considering Parts Direct and plans to work with outside investors on a real estate deal, but wanted to move ahead with the proposal for Kenmore and the home improvement division.

Sears declined to comment.

He murdered Sears and is selling the parts off. Tragic.

I despise Eddie Lampert. The harm he has caused Sears and the people who work for the company should be criminal. But he's going to continue to get rich driving it into the ground selling the real estate from its carcass.

Tomorrow, the last store in the company's home town will close, just shy of its 80th anniversary:

The Six Corners store, on the edge of Chicago’s Portage Park neighborhood, will shut its doors for the last time Sunday, two months shy of its 80th anniversary. The closure is part of Sears effort to turn around its business after years of losses and declining sales, but when the store rings up its final sale, the city will lose one more link to a hometown company that used to be the world’s largest retailer.

Plans to redevelop the site already have been announced, but neighbors have seen a redevelopment across the street drag on. They’re waiting to see whether Six Corners, at the intersection of Milwaukee and Cicero avenues and Irving Park Road, can regain its status as a bustling retail district.

Highland Park-based Tucker Development and Seritage Growth Properties announced in May that they were partnering to redevelop the Six Corners Sears and another in the Galewood neighborhood that closed last year. Both stores were among the more than 250 properties Sears sold to Seritage, a real estate investment trust, when it was spun off in 2015. Sears CEO Edward Lampert is an investor in Seritage and chairman of its board.

I hope Lampert gets careless, gets caught, and gets thrown in jail. But so far he hasn't done anything illegal, just immoral.

I've had a lot of things going on at work the past couple of weeks, and not many free evenings, leading to these link round-up posts that add nothing to the conversation.

But there should be a conversation, and here are some topics:

• President Trump and Jeff Sessions have shifted US immigration enforcement policy such that cruel, unfair, and harmful treatment of immigrants is no longer an unintended consequence—it's now the point.
• Let's not forget that Dinesh D'Souza, who Trump just pardoned, didn't just mess up some campaign finance paperwork. No, this guy funneled tens of thousands through his mistress and his assistant. Trump's pardon seems to be all about rewarding his racist trolling.
• Sears will close another 100 stores in the next couple of months, continuing Eddie Lampert's slow strangulation of the company.
• Roseanne Barr's sacking from ABC could be a learning moment for the right, but it probably won't be.
• Meanwhile, bluish-purple Illinois yesterday became the 36th state to ratify the Equal Rights Amendment, first proposed in 1977. If one more state ratifies it, then it could become law—though there is enough ambiguity in Article V of the U.S. Constitution to stop us counting chickens just yet.

Finally, on Monday Parker will have his final check-out by his surgeon, which should clear him to go back to day camp on Tuesday. The poor fuzzy dude has spent way too much time home alone since his injury. I'm looking forward to him getting back into his pack.

Longtime readers know how much I loathe Eddie Lampert for what he did to Sears and for how perfectly he demonstrates the dangers of slavishly following a philosophy that owes a lot to the thought processes of adolescent boys.

Well, my longtime predictions seem to be coming true. Lampert has offered to buy the best bits of Sears (i.e., its real estate and Kenmore brand), which would quickly kill the company. Crain's Joe Cahill outlines some of the offal in this awful person's proposal:

It's not clear, however, just what Lampert is willing to pay. The offer letter indicates the transaction should reflect an enterprise value of $500 million for the home improvement and parts businesses, but doesn't put a price on Kenmore or the real estate, beyond confirming Lampert would assume $1.2 billion in real estate debt. The letter further proposes that the asset sale take place in conjunction with offers by Sears to convert some of its debt into equity and buy back or exchange for equity another slug of outstanding debt. Lampert indicates a willingness to "consider participating in such exchange offer and tender offer," which might increase his equity interest in Sears.

The complex and somewhat vague proposal raises questions about Lampert's many hats at Sears—he's the controlling shareholder, CEO, a major creditor, and—if this transaction goes through—a buyer of key company assets. Let's focus on his role as CEO, where his job is to generate maximum returns on company assets, either through business operations or by selling them for the highest possible price. His offer letter implicitly confirms that he's been unable to do either with Kenmore. Yet he evidently believes he could squeeze strong returns out of the brand if he owned it separately from Sears. Otherwise, buying it would make no financial sense for Lampert and any fellow investors in the proposed asset purchase.

Understandably, this disconnect fuels a growing perception that Lampert is cherry-picking company assets ahead of a potential bankruptcy filing that likely would leave Sears shareholders with little or nothing. Already, a real estate investment trust formed by Lampert has acquired many of Sears' store locations with the intention of remarketing them to higher-paying tenants. "There's a very legitimate case to say he's screwed up the company and now he's trying to take the crown jewels," says Nell Minow, a corporate governance expert with Value Edge Advisors.

No kidding. Thanks, Eddie.

Longtime readers know how much I loathe Eddie Lampert, who represents to me everything that is wrong with the adolescent philosophy emitted years ago by Ayn Rand.

Well, in next month's Vanity Fair, William Cohan sits down with the child king of hedge funds and hears him out:

[Lampert's] triumphs are largely obscured by his worst mistake: the 2005 merging of Sears, the iconic retailer whose doorstop mail-order catalogue was once a fixture in nearly every American home, with the downmarket Kmart chain, which he had brought out of bankruptcy in 2003. Twelve years on, this blundering into retail has made him a poster boy for what some people think is wrong with Wall Street and, in particular, hedge funds. Under his management the number of Sears and Kmart stores nationwide has shrunk to 1,207 from 5,670 at its peak, in the 2000s, and at least 200,000 Sears and Kmart employees have been thrown out of work. The pension fund, for retired Sears employees, is underfunded by around $1.6 billion, and both Lampert and Sears are being sued for investing employees’ retirement money in Sears stock, when the top brass allegedly knew it was a terrible investment.

The vultures are circling, waiting for Lampert to throw in the towel so they can try to make money by buying Sears’s discounted debt. But Lampert continues to claim that’s not going to happen if he can help it.

Treasury secretary Steven Mnuchin “has been a shareholder and a member of the board of directors of Sears Holdings from the day that the combined company was formed [until becoming Treasury secretary], so he spent 11 years at Eddie’s side. . . . [With] all of Trump’s focus on jobs, job preservation, job creation, somebody ought to ask his secretary of the Treasury what his involvement has been for 11 years in the destruction of well over 100,000 jobs at Sears.” (A spokesman for Mnuchin declined to comment.)

Cohan treats Lampert fairly, I think. I didn't learn a lot, though. And Lampert still runs Sears, and still will find some way to make back most of the money he, personally, has invested in it. Too bad not enough of the right people think what he did to Sears and its employees is criminal.

The Tribune has two sad stories this evening.

First, the FCC has taken steps to end the main-studio rule—apparently to allow the Sinclair/Tribune deal to go through:

The regulation, which was first adopted almost 80 years ago, requires broadcasters to have a physical studio in or near the areas where they have a license to transmit TV or radio signals. Known as the "main studio rule," the regulation ensured that residents of a community could have a say in their local broadcast station's operations.

"At a time when broadcast conglomerates like Sinclair are gobbling up more stations," the consumer advocacy group Free Press said in a regulatory filing on the matter in July, "the Commission's proposal would allow these conglomerates to move even more resources away from struggling communities and further centralize broadcasting facilities and staff in wealthier metropolitan areas."

Sinclair, the right-wing broadcaster, is currently trying to buy up Tribune Media in a $3.9 billion deal. The consolidation of the media industry has become a political flashpoint amid wider concerns about fake news and the polarization of news consumption. Even some conservatives have opposed the merger, on the grounds that it could limit the number of voices on the airwaves.

Meanwhile, with Whirlpool and Sears ending a century-old relationship, event the blind can see Sears is nearly dead:

Sears contends Whirlpool sought to “use its dominant position in the marketplace,” which would have “prohibited” the retailer from selling the appliances at a reasonable price, according to a memo addressed to Sears employees and sent to me by the company.

In response, Whirlpool CEO Marc Bitzer told investors on a conference call Tuesday that losing Sears is no biggie —only 3 percent of its global revenue.

“The entire Sears business declined over time,” he asserted.

It's 1895 all over again. Or 1885. I hope the latter, because then we only have to wait 20 years for the trusts to get busted.

I'm about to fly to San Antonio for another round of researching how the military tracks recruits from the time they get to the processing center to the time they leave for boot camp (officially "Military Basic Training" or MBT).

I have some stuff to read on the plane:

• WPA, which is probably securing your WiFi, has been hacked after 14 years. Great. At least SSL is still secure.
• The New Republic claims that Republicans are ignoring the will of the people by tossing out ballot initiatives. (This is not new.)
• Chicago saw record rainfall Saturday. I know; I was in it.
• The Navy Pier bicycle flyover will take another two years and more money, because Chicago.
• President Trump made some remarks about Obamacare with the sensitivity and coherence we've come to expect from the man.
• Speaking of, the Washington Post has a view into the Adult Day Care facility at 1600 Pennsylvania Ave NW.
• Deeply Trivial name-checked The Daily Parker in a post about Sears.

OK, off to K20. Or K18. Or wherever my plane has got to.

The Sears death watch continues. Eddie Lampert's combination of incompetence and narcissism has now officially destroyed Sears Canada:

Sears Canada plans to liquidate its remaining stores with the loss of about 12,000 jobs, unable to fend off the march to online shopping after operating in malls and towns across the country for 65 years.

The Toronto-based chain will seek court approval for the filing on Friday and begin liquidation sales at its remaining 150 stores on Oct. 19 at the earliest, according to a statement Tuesday. The move follows a last-minute attempt by Executive Chairman Brandon Stranzl, backed by Blackstone Group, to put together an offer to save the retailer.

But the company said it didn't receive a viable bid to keep the stores operating as a going concern. Sears Canada filed for creditor protection in June with liabilities of $880 million in U.S. currency and had been gradually closing its 225 stores.

This comes just five days after Lampert invested $100m more of his own money in keeping Sears Holdings afloat. Good luck with that.

I think the only justifiable outcome here is for Lampert to become destitute, and then not die or become homeless because of government aid.

This past Sunday's New York Times magazine summed up the decline and imminent death of Sears. It's worth a read, though long-time readers of this blog know it's an old story.