Coyote Blog

The voting is closed and here are the results in Wizbang's "best of the rest" category.  Overall results in all those much more trivial categories, like best blog, are here.   Thanks very much to those who ran the awards - they had to deal with a lot of foolishness as various groups tried to game the voting, but their response seemed quick and fair.

Coyote Blog finished just out of the medals in fourth place, which I choose to view optimistically --  Once they announce the top three finishers, Coyote Blog is then the best of the rest of the Best of the Rest category.  Hmm, anyway, yeah for us.

The Carnival of those selfish, greedy, evil capitalists are up this week at Samablog.  You can find our post called Progressives are too Conservative to Like Capitalism.

Welcome!  Thanks to Elise Bauer for ways to make this post sticky in TypePad.  Please, have a look around.  Here are some examples of what I do here:

Real-life small business experiences:  Buying a company;  Working with the Department of Labor

Economics:  Taxes and Class Warfare;  The Harvard MBA indicator

Libertarian political commentary:  Post election wrap-up;  Thougts on Kyoto

Frustration with runaway torts:  Jackpot Litigation; Coyote vs. ACME

Camping (my business):  New American nomads;  This RV is just wrong

Attempts at humor:  Replacements for Dan Rather;  Meyer's Law

ACME Products:  Instant Girl; Ultimatum Gun; Earthquake Pills

Enjoy.  And, don't forget to support small blogs by voting in the "best of the rest" category -- you can go vote here.  Coyote Blog (hint, hint) is in the middle of the list.

Yesterday, my kids and I set out to buy ourselves a Christmas tree.  Instead of going to Home Depot first, like we usually do, we stopped at one of those tent places that grow up this time of year on vacant lots, mainly because the tent was closer.  We soon left the tent, though, moving on to Home Depot, but not before the tree sales person made sure to tell my kids that he thought their dad was a jerk.  Here is how we got there:

I walked around the lot - there were only about 20 trees up, which is kindof a small selection, but they were all sitting in a pan of water, which can be a good sign that they are trying to keep the trees fresh.  I immediately saw a couple of trees that would work fine, so I walked up to them, looking for a price tag -- no price.  I looked around to see a posted price list, or a list of prices per foot - no price list.  I asked the guy working there where the prices were - he said just pick the one I liked, bring the tag to the register, and they would tell me there how much it costs.

At this point, I turned to my kids and said "lets go someplace else".  In my book, businesses can operate and price most any way they like, but I can also decide if I want to do business with them.  I don't like doing business with companies that have no posted prices (similarly I hate doing business with people like car dealers whose posted prices aren't the real prices, but that's another story).

The guy asked me why I was leaving.  I should have known better.  I should have just said something like I don't see one I like.  But I actually tried to explain what I was thinking.  I said, "What would be your reaction if you went into a Walmart and none of the items had prices - if the only way you could find out what the prices were was when they rang you up at the register.  Would you shop there?"  What I left unsaid, because I didn't want to discuss it in front of my kids, was that I didn't want to be put in the position of having my kids fall in love with a tree (they get very emotional about this choice) and then having to tell them a few minutes later that sorry, it was too expensive.  I much prefer the Home Depot approach, where each set of trees is clearly marked, so I can steer them away from even looking at the $100+ trees.

Anyway, I confess I probably was huffy about it, because this is one of my hot buttons, and as I called my kids to me the guy told them their dad was a jerk.

I probably am.  I know this guy is trying to make a living.  He may well not have had prices posted just out of lack of sophistication rather than any sinister desire to trap me into buying more tree than I wanted.  So I probably need to be publicly chastised -- feel free to use the comment section to do so.

Many in the left to far-left eschew the liberal title nowadays (since they consider liberals now to be wimps and too moderate, like that Clinton guy) in favor of the term "progressive".  This term has gone in and out of favor for over a century, from the populists of the early 1900's to the socialists of the more modern era.

Most "progressives" (meaning those on the left to far left who prefer that term) would freak if they were called conservative, but what I mean by conservative in this context is not donate-to-Jesse-Helms capital-C Conservative but fearful of change and uncomfortable with uncertainty conservative. 

OK, most of you are looking at this askance - aren't progressives always trying to overthrow the government or something?  Aren't they out starting riots at G7 talks?  The answer is yes, sure, but what motivates many of them, at least where it comes to capitalism, is a deep-seated conservatism. 

Before I continue to support this argument, I must say that on a number of issues, particularly related to civil liberties and social issues, I call progressives my allies.  On social issues, progressives, like I do, generally support an individual's right to make decisions for themselves, as long as those decisions don't harm others. 

However, when we move to fields such as commerce, progressives stop trusting individual decision-making.  Progressives who support the right to a person making unfettered choices in sexual partners don't trust people to make their own choice on seat belt use.  Progressives who support the right of fifteen year old girls to make decisions about abortion without parental notification do not trust these same girls later in life to make their own investment choices with their Social Security funds.  And, Progressives who support the right of third worlders to strap on a backpack of TNT and explode themselves in the public market don't trust these same third worlders to make the right decision in choosing to work in the local Nike shoe plant.

Beyond just the concept of individual decision-making, progressives are hugely uncomfortable with capitalism.  Ironically, though progressives want to posture as being "dynamic", the fact is that capitalism is in fact too dynamic for them.  Industries rise and fall, jobs are won and lost, recessions give way to booms.  Progressives want comfort and certainty.  They want to lock things down the way they are. They want to know that such and such job will be there tomorrow and next decade, and will always pay at least X amount.  That is why, in the end, progressives are all statists, because, to paraphrase Hayek, only a government with totalitarian powers can bring the order and certainty and control of individual decision-making that they crave.

Progressive elements in this country have always tried to freeze commerce, to lock this country's economy down in its then-current patterns.  Progressives in the late 19th century were terrified the American economy was shifting from agriculture to industry.  They wanted to stop this, to cement in place patterns where 80-90% of Americans worked on farms.  I, for one, am glad they failed, since for all of the soft glow we have in this country around our description of the family farmer, farming was and can still be a brutal, dawn to dusk endeavor that never really rewards the work people put into it. 

This story of progressives trying to stop history has continued to repeat itself through the generations.  In the seventies and eighties, progressives tried to maintain the traditional dominance of heavy industry like steel and automotive, and to prevent the shift of these industries overseas in favor of more service-oriented industries.  Just like the passing of agriculture to industry a century ago inflamed progressives, so too does the current passing of heavy industry to services.

In fact, here is a sure fire test for a progressive.  If given a choice between two worlds:

1. A capitalist society where the overall levels of wealth and technology continue to increase, though in a pattern that is dynamic, chaotic, generally unpredictable, and whose rewards are unevenly distributed, or...
2. A "progressive" society where everyone is poorer, but income is generally more evenly distributed.  In this society, jobs and pay and industries change only very slowly, and people have good assurances that they will continue to have what they have today, with little downside but also with very little upside.

Progressives will choose #2.  Even if it means everyone is poorer.  Even if it cuts off any future improvements we might gain in technology or wealth or lifespan or whatever.  They want to take what we have today, divide it up more equally, and then live to eternity with just that.   Progressives want #2 today, and they wanted it just as much in 1900 (just think about if they had been successful -- as just one example, if you are over 44, you would have a 50/50 chance of being dead now). 

Don't believe that this is what they would answer?  Well, first, this question has been asked and answered a number of times in surveys, and it always comes out this way.  Second, just look at any policy issue today.  Take prescription drugs in the US - isn't it pretty clear that the progressive position is that they would be willing to pretty much gut incentives for any future drug innovations in trade for having a system in place that guaranteed everyone minimum access to what exists today?  Or take the welfare state in Continental Europe -- isn't it clear that a generation of workers/voters chose certainty over growth and improvement?  That workers 30 years ago voted themselves jobs for life, but at the cost of tremendous unemployment amongst the succeeding generations?

More recently, progressives have turned their economic attention to lesser developed nations.  Progressives go nuts on the topic of Globalization.  Without tight security, G7 and IMF conferences have and would devolve into riots and destruction at the hands of progressives, as happened famously in Seattle.  Analyzing the Globalization movement is a bit hard, as rational discourse is not always a huge part of the "scene", and what is said is not always logical or internally consistent.  The one thing I can make of this is that progressives intensely dislike the change that is occurring rapidly in third world economies, particularly since these changes are often driven by commerce and capitalists.

Progressives do not like American factories appearing in third world countries, paying locals wages progressives feel are too low, and disrupting agrarian economies with which progressives were more comfortable.  But these changes are all the sum of actions by individuals, so it is illustrative to think about what is going on in these countries at the individual level. 

One morning, a rice farmer in southeast Asia might faces a choice.  He can continue a life of brutal, back-breaking labor from dawn to dusk for what is essentially subsistence earnings.  He can continue to see a large number of his children die young from malnutrition and disease.  He can continue a lifestyle so static, so devoid of opportunity for advancement, that it is nearly identical to the life led by his ancestors in the same spot a thousand years ago.

Or, he can go to the local Nike factory, work long hours (but certainly no longer than he worked in the field) for low pay (but certainly more than he was making subsistence farming) and take a shot at changing his life.  And you know what, many men (and women) in his position choose the Nike factory.  And progressives hate this.  They distrust this choice.  They distrust the change.  And, at its heart, that is what the opposition to globalization is all about - a deep seated conservatism that distrusts the decision-making of individuals and fears change, change that ironically might finally pull people out of untold generations of utter poverty.

In fact, over the last 20 or so years, progressives have become surprisingly mute on repression and totalitarianism the world over.  In the 1970's, progressives criticized the US (rightly, I think) for not doing more to challenge the totalitarian impulses of its allies (the Shah of Iran comes to mind in particular) and not doing enough to end totalitarianism and repression in other nations (e.g. South Africa, Guatemala, El Salvador, etc etc) 

Today, progressives have become oddly conservative about challenging totalitarian nations.  By embracing the "peace at any cost" mantra, they have essentially said that they can live with anything, reconcile anything, as long as things remain nominally peaceful (ie, no battles show up on the network news).  Beyond just a strong anti-Americanism, the peace movement today reflects a strong conservatism -- they want to just leave everyone alone, no matter how horrible or repressive, and hope that they will in turn leave us alone.  They fear any change that would stir things up.

There are any number of other examples of the strong conservative streak in the progressive movement.  Here are a few more that come to mind:

• Despite at least 40 years of failure in the public schools, progressives vociferously oppose any radical changes to the public education system.  In particular, they resist any program involving school choice, as they are totally condescending in their utter lack of faith in the average parent's ability to make the right choice for their family.
• Progressives refuse to even consider the possibility that individuals should be trusted to make their own decisions regarding some portion of their Social Security retirement funds.  They can couch their opposition in a lot of fear talk about benefit cuts, but at the end of the day (and take this from someone who has had this argument with numerous liberals and progressives)  the argument always boils down to "we don't trust people to make investment decisions that are as good as the ones we would make for them".

Well, I have again written too long, and I'm tired.  If you are not ready to rush to defend the barricades of capitalism, you might read my post from last week called "60 Second Refutation of Socialism, while Sitting at the Beach".  Most of what I have written here has been said far more eloquently by others.  Of recent writers, Virginia Postrel, in the Future and its Enemies, has written a whole book on not just capitalism but dynamism and progress in general, and why people of all political persuasions tend to be scared by it.  Brink Lindsey addressed many of these same issues as well in his book Against the Dead Hand.  Of course, the Godfather of individual choice and societal dynamism is Friedrich Hayek.

Many people have seen the Steve McQueen movie "the Great Escape", about a group of 60 or so prisoners who cleverly dug a tunnel out of a German POW camp and escaped in various directions across Europe, many of whom where eventually recaptured.

I don't know if such an event occurred in Europe, but an almost identical real-life POW escape (tunnel and all) occurred right here in Phoenix, Arizona almost exactly 60 years ago.

Like many isolated western towns in WWII, Phoenix played host to a number of German POW's, in our case about 1700 in Papago Park.  Phoenix, and in particular Papago Park, with its arid climate and red rocks, must have been quite a culture shock to the Germans.

Anyway, I won't tell the whole story, but it is fascinating and you can read it all here.  A short excerpt:

The German prisoners asked their guards for permission to create a volleyball courtyard. Innocently obliging, the guards provided them with digging tools. From that point on, two men were digging at all times during night hours. A cart was rigged up to travel along tracks to take the dirt out. The men stuffed the dirt in their pants pockets which had holes in the bottoms, and they shuffled the dirt out along the ground as they walked around. In addition, they flushed a huge amount of dirt down the toilets. They labeled their escape route Der Faustball Tunnel (The Volleyball Tunnel).

They dug a 178 foot tunnel with a diameter of 3 feet. The tunnel went 8 to 14 feet beneath the surface, under the two prison camp fences, a drainage ditch and a road. The exit was near a power pole in a clump of brush about 15 feet from the Cross Cut Canal. To disguise their plans, the men built a square box, filled it with dirt and planted native weeds in it for the lid to cover the exit. When the lid was on the tunnel exit, the area looked like undisturbed desert.

There is some dispute about how many people actually escaped -- official records say 25.  Others argue that as many as 60 escaped, but since only 25 were recaptured, 25 was used as the official number to cover up the fact that German POW's might be roaming about Arizona.

The prisoners who led this escape were clearly daring and inventive, but unfortunately in Arizona lore they are better known for their one mistake.  Coming from wet Northern European climes, the prisoners assumed that the "rivers" marked on their map would actually have flowing water in them.  Their map showed what looked like the very substantial Salt River flowing down to the Colorado River and eventual escape in Mexico.  Unfortunately, the Salt River most of the year (at least in the Phoenix area) is pretty much a really wide flat body of dirt.  The German expressions as they carried their stolen canoes up to its banks must have been priceless.

It never occurred to the Germans that in dry Arizona a blue line marked "river" on a map might be filled with water only occasionally. The three men with the canoe were disappointed to find the Salt River bed merely a mud bog from recent rains. Not to be discouraged, they carried their canoe pieces twenty miles to the confluence with the Gila river, only to find a series of large puddles. They sat on the river bank, put their heads in their hands and cried out their frustration.

I know how they feel every summer when we go to Lake Powell and find the water lower than the previous year.  Anyway, we shouldn't just make light of the escapees.  Apparently the prison guards made Sargent Schultz look like Sherlock Holmes:

Although the men left in the wee hours of Christmas Eve, the camp officials were blissfully unaware of anything amiss until the escapees began to show up that evening. The first to return was an enlisted man, Herbert Fuchs, who decided he had been cold, wet and hungry long enough by Christmas Eve evening. Thinking about his dry, warm bed and hot meal that the men in the prison camp were enjoying, he decided his attempt at freedom had come to an end. The 22-year old U-boat crewman hitched a ride on East Van Buren Street and asked the driver to take him to the sheriff's office where he surrendered. Much to the surprise of the officers at the camp, the sheriff called and told them he had a prisoner who wanted to return to camp.

One of the last to be re-captured was U-boat Commander Jürgen Wattenberg, the leader of the breakout.  Interestingly, Captain Wattenberg hid out in the hills just a few hundred yards from my current home.

UPDATE

One reason I thought of this story, beyond being close to the anniversary, was this story about new Harvard Law professor Jack Goldsmith.  Though I am not necesarily a supporter of Mr. Goldsmith's views, the article is a good insight into where campuses are today in terms of academic freedoms.  His conservative views and opinions are treated like some hidden scandal that was missed in his hiring and would surely have disqualified him for the position if known.  I am sympathetic not because I am conservative, but as a libertarian and defender of free markets, I was thought to be an odd duck on campus as well.

The part of the article that got me thinking about the Great Escape was this:

Before he stepped down from his post as a U.S. assistant attorney general this summer, Goldsmith penned a March draft memo arguing that Central Intelligence Agency officials could transfer Iraqi detainees out of their native country for interrogation without violating the Geneva Convention.

The memo said that detainees would still have to be treated in accordance with international humanitarian norms. But Goldsmith's position has drawn fire from human rights activists and some scholars who argue that the memo marks a dramatic reinterpretation of the 1949 treaty, which safeguards the rights of prisoners of war.

I know nothing about the 1949 treaty, but it seems odd that holding POW's in other countries would be outlawed so soon after we did so much of it ourselves in WWII.  Generally, my understanding is that detention of German prisoners in the US went very well for all concerned - in fact, the biggest problem I have ever heard about is that many Germans did not want to leave and be sent back to Germany after the war (see also here).  My guess is that such a ban may have resulted from Soviet actions in the later stages of WWII.  The Soviets sent many, many German prisoners back east, never ever to return, living out a life of slavery in Siberia and other happy locations long after the war was over.  Anyone have any other background on this?

Our bathroom has a pocket door to save space - that's one of those doors that slide on a hidden rail in and out of the wall.  From time to time, usually because my kids go slamming into it, the door comes off its rails and gets jammed, which is a problem as it can bottleneck some very critical facilities.

The first time this happened, I tried to get it back on its track, but I just could not.  The track is up in the wall and it is almost impossible due to the lack of clearance to do anything with it.  I checked in the Yellow Pages and saw there was actually a company that specialized in pocket door repairs, so I called them out.  Well, Joe (or whoever) shows up with his little tool kit, looks at the door for a second, grabbed it in a certain way, and then gave it a quick jerk - kabam - and it was back in its tracks.  It took him like 5 seconds. 

Well, there I stood, completely unmanned, right in front of my laughing wife and family, by Joe the visible butt-crack guy.  Bummer.

Since that time, I have had the door come untracked two or three times.  Thinking to save me further embarrassment, my wife tends to ask any passing stranger to come in and fix it.  I can sit there for hours fighting the thing, and then my wife brings in the guy painting the house - kabam - fixed.  Next time she brought in the 60+ year old sales guy who happened to be there - kabam - fixed.  I swear, if Paris Hilton was dropping by for a visit she could probably fix that damn door.  It is humiliating.

Well, this time I would not allow my wife get someone else to fix it.  Every night, for about 10 minutes, I would take my innings with the door, struggling to do what everyone else seemed to have learned at birth.  I actually suggested to my wife that we should call out a contractor and tear the thing out and install a real door.  She suggested instead that she could have our 13-year-old baby sitter come in from the other room to fix it.  Finally, tonight, when I was about to give up, I tried holding it in a slightly different way and - Kabam - fixed.  God I feel great.  My manhood is restored and I am at the top of the world.

WELCOME Carnival of the Vanities!  My post this week is a little more whimsical than usual.  If you need to chew on something more serious, check out a 60 second refutation of socialism while sitting at the beach.

This weekend, another Heisman Trophy will be awarded, nominally for the "most outstanding college football player".  This is a joke.  The Heisman is in fact the award for "best college football player at an offensive skill position, preferably running back or quarterback, who plays for a nationally ranked program and has gotten plenty of TV exposure".

In the nearly 70 year history of the award, only 1 defensive player (Charles Woodson) ever won the award, and I think Woodson won only because he was a three-way player and scored a couple of dramatic special teams and receiving touchdowns in the last couple of games of the season.  In fact, of the nearly 350 finalists (the top five vote getters each year) only 20 have ever been defensive players.  In the ESPN highlight era (ie the last decade) no defensive player other than Woodson has cracked the top five in any year.  This belies the "best college football player" facade, since, last I checked, defense was about half the football game, and in many cases the more important half.  Heck, more Princeton and Yale players have won the Heisman (3) than defensive players (1).  And don't even ask about Offensive linemen or tight ends.  Even wide receiver is a bit iffy, with only two wins, so really you need to be a quarterback or a running back.

It seems like a huge percentage of the people we fire for cause, even after warnings and write-ups, etc, immediately threaten to sue us or report us to the Department of Labor or both.  Several times a year, I get contacted by an employee's lawyer, though generally nothing comes of it except wasting a lot of my time.  Ditto the Department of Labor.  According to George's Employment Blawg, we are not alone:

In many Federal district courts, employment-related litigation represents 50% or more of all court filings, and approximately 98% of lawsuits are resolved outside of court.

Small businesses (i.e., businesses with fewer than 50 employees) are not exempt either. This newsletter notes that it is not uncommon for such businesses to have 3 or 4 claims of employment discrimination annually!

In many cases, I think the need to do this is psychological - a kind of face saving to convince themselves that their job failure was due to someone else's shortcomings rather than their own.  This article has some more advice on terminations to help cut down on suits.

Beyond this explanation, there are also people out there who want to deal with all problems through litigation.  I have had people send lawyers after the company when they never once brought their concerns to a manager -- they just went straight to a lawyer, either because that is the modern way or because they are looking for an opportunity for an easy pay-off.

Something I would love to see, but will never happen, is a list of "serial litigators" to avoid.  I know a couple of people tried this but got shut down.  Too bad.  We had one such person seek employment at one of our establishments.  This is all this person does for a "living" - seek employment, show up at the job interview limping with a cane, and then suing people for discrimination if he is not hired.  Apparently this person has nearly a hundred different lawsuits going. 

For this post, I will leave aside for a moment the unfairness of monetary penalties for ridiculous claims or the incredible erosion of individual responsibility that is being created by jackpot litigation.

In addition to these problems, runaway litigation is causing people and organizations everywhere to take defensive postures to protect themselves from suits, and many of these defensive tactics are generally not in the public's interest.  Here are some examples:

• College forces depressed students out of school to avoid potential liability if the student commits suicide.
• Swings are disappearing from playgrounds, subject first to liability suits and more recently to ADA suits
• Doctors spend billions on tests and drugs that are not necessary but prescribe anyway to cover their butt in lawsuits  (and here and here and here)

One area that bothers me a lot is the area of safety engineering, whether it be for cars or whatever.  I was a mechanical engineer at an oil refinery for several years.  A big part of my job was assessing if a certain condition was "safe" or "unsafe".  Very often, I was working with shades of gray - safety is never absolute.  In fact, the only real way to make a refinery 100% safe is the same way you make cars 100% safe:  you don't have any. 

The way we dealt with the gray was to have a lot of discussion.  I might observe that I was concerned with a certain situation, and my colleagues and I would discuss it.  With some additional research, we would generally reach a consensus on the best approach.  Because we usually made these trade-offs with an inherent bias to err towards safety, I can't think of a decision we made that led to a problem.  We did have several fires/explosions, and one man was killed in one of these, but each and every one was generally caused by some combination of factors we never anticipated, e.g:

there was a steam leak under the insulation of that pipe, and since the pipe was running at a lower temperature than expected, the water condensed, and it turned out the water had an unexpected contaminant such that when it came in contact with the flange bolts it caused an unusual crack propagation mode, made worse by the fact that the flange bolt material was not the kind specced because the vendor had made a mistake on delivery, and the flange eventually gave way and a fire started.

Yeah, this really happened- I include it to say that the situation is never like on the TV mini-series -- evil corporation skimps on 30 cent part knowing it created an unsafe situation.  Safety engineering means tough trade-offs, and, after a ton of work, problems usually occur in an area no one imagined.

Anyway, this is the type of thing I used to do, and doing it well relied mainly on open, honest dialog about safety problems.  Nowadays, however, my sense is that this open dialog in corporations may soon be over.  Corporations are legitimately worried that some young engineer like myself might have written a memo about a potential hazard, and that this memo will end up being exhibit A in some plaintiffs case that the company "knew about" some hazard and did nothing about it.  Think about all the cases you hear about, even the recent Vioxx case -- the center piece of every plaintiffs argument is often that the company "was warned" and is therefore truly evil, because it knew of the problem and did nothing.  The words "smoking gun memo" are practically attached to these lawsuits, but I have always asked myself - are these smoking guns that point to culpability, or are they in fact pointing to a robust safety engineering process?

So, if we have gotten to the point where having internal people asking questions and challenging the company's product and process safety makes companies more vulnerable to lawsuits rather than less, then companies are going to start clamping down on the open internal dialog about safety.  And then the world really will be a less safe place.

UPDATE

Having written this post, I had a flashback to a training video I was shown early on at Exxon.  The video was anti-trust training, and the only message I remember is "don't write it down".  The message was mainly aimed at sales people, who tend to be gung ho and competitive and say things like "lets go out there and crush the competition this week".  This is all fine and good for Joe's Auto Body, but written on an Exxon letterhead, it becomes the central exhibit of some anti-trust trial.  Thus the don't write it down advice.  Anyway, I will be very sad, but not surprised, if they are now showing this video to the engineers as well.

I am reading Olaf Gersemann's book Cowboy Capitalism and enjoying it immensely.  He points out that of the top 20 largest publicly traded companies in the US in 1967, only 11 are even in the top 60 today, much less the top 20.  In contrast, he points out that of the 20 largest German companies in 1967, today, thirty-five years and nearly two generations later, 19 are still in the top 60 and 15 are still in the top 20.

We think of European fascism as having been defeated in 1945, but, at least in terms of fascist economic ideas like the corporate state, it is alive and well in old Europe.  Take France for example.  France is run by an elite group from a couple of universities who circulate and criss-cross paths between government, large corporations, unions, and the military.  This group is loyal to each other first, and to ideology second.  What the US Government stands accused of doing to support Haliburton (forget what actually happened - just take the wildest accusations) happens routinely and as a matter of policy between the French Government and their largest corporations.

Though the US has from time to time made mistakes in this regard (e.g. Chrysler bailout), their actions are nothing compared to the total support that French and German corporations get.  In many industries, the government has gone so far as to fix current business models in place by law, effectively outlawing alternative business approaches (e.g. discounting is illegal in German retailing).  In addition, these countries make entrepreneurship extraordinarily difficult, helping to prevent competition from new upstarts.  For example, Gersemann points out that the cost of organizing a new business entity in the US costs an entrepreneur about a week's pay;  In France and Germany, it costs 4 months pay or over 20x more.

In my article "60 Second Refutation of Socialism, While Sitting on a Beach", I pointed out that wealth is created when people are free to use their mind to envision new things, AND free to pursue this vision without undue barriers.  Europe, in killing entrepreneurship and dynamism, is killing this second criteria for wealth creation.  Propping up aging basic industries, four day work weeks, 8 week vacations, immense public sector employment, and unlimited unemployment benefits may feel good for a while, but they destroy wealth.  Old Europe is like a retired person spending their investment principle:  Quality of life may be good today, but future income and wealth is at risk.

UPDATE

Marginal Revolution has been running a series on some small steps Germany may be taking to change itself.

Football Outsiders has their week 13 football rankings up here.  Previously, I explained why I like Football Outsiders here.

Arizona is almost there, in its traditional spot!  It is second from the bottom, but unfortunately San Francisco has the bottom spot nailed down pretty solidly.  I find the Outsiders rankings particularly useful when they diverge from a team's record.  One case in point is the Rams, or Les Mouflons as the Tuesday Morning Quarterback calls them.  Their 6-6 record seems to hide the fact that they are a pretty bad team.  This makes sense, as they have won a couple, like the game with Seattle, that they should have lost.

On the other ends of the scale, its still Philly-NE-IND-PITT at the top.  I like the NE and PIT stats the best, as they have both nice defense and nice offense.  Philly's #1 ranking still worries me - its defense is a bit soft and a lot of their ranking comes from special teams, which are notoriously fickle.  People have jumped off the NE bandwagon a bit, but I still think they are the team to beat.

Its back.  The original blog carnival, now in its third year.  Find this week's edition here at The Big Picture.

The "news" today is that Eliot Spitzer has announced he is running for governor of New York.  This is about as surprising as the "revelation" that Barry Bonds took steroids.  Duh.  The "AG" job is not nicknamed "Aspiring Governor" for nothing.  Also, Spitzer represents the worst of a new trend of AG's using their prosecutor role to engage in lawsuits more for their media and publicity value rather than an sense of public service.  Why else would Spitzer involve himself and the AG office in a compensation dispute between two private parties, except for the fact that the two private parties are very high profile in NY.

OK, but what is this Antarctica thing?  Back when I was an undergrad at Princeton, one of my fondest memories was of a bizarre Student Body Governing Council (USG) election.  The previous USG administration, headed by none other than fellow Princetonian Eliot Spitzer, had so irritated the student body that, for the first time in memory, the usually apathetic voting population who generally couldn't care less who their class president was actually produced an energetic opposition party.  Even in his formative years, Spitzer was expert in using his office to generate publicity, in this case frequent mentions in the student newspaper that finally drove several students over the edge.

The result was the incredibly funny and entertaining Antarctic Liberation Front.  I wish I had saved their brochures, but their proposals included things like imposing a dawn to dusk curfew on the school and funding school parties by annexing the mineral rights between the double yellow lines of the US highways.  All of this was under the banner of starting jihad to free Antarctica.  The ALF swept the USG election.  This immensely annoyed Spitzer and other USG stalwarts, who decried the trivialization of such an august body.  The pained and pompous wailing from the traditional student council weenies (sounding actually a lot like liberals after the last presidential election) only amused the general student population even further.  After a few student-council-meetings-as-performance-art, the ALF resigned en mass and life went back to being just a little bit more boring.

If you think I am exaggerating in saying that the Spitzer-led student council types had a whiny reaction to this bit of fun, you should know that Spitzer was still whining about it 20 years later to the New Yorker magazine.  Virginia Postrel, also a Princetonian at the time, had a similar reaction to mine here, and fisks the New Yorker article.

In my previous post, I took a look at the absurdity of the metrics in the NEA's recent schools report.  In that post, I ran out of room to Fisk the NEA's suggested areas of improvement for better school performance (keep scrolling).

Here are their improvement areas with my comments.  I always try to differentiate the NEA as a group from teachers individually.  The rants in this post are aimed at the NEA as a group.  Many teachers as individuals have my fondest regards.  Note I have helpfully put a big green dollar sign by every recommendation that boils down to "spend more money":

Continue reading ‘Fisking the NEA's Improvement Ideas’ »

For years, any of the network news programs would love to have been referred to as the "Cadillac" network, implying high-class quality in a similar way that the "Tiffany" Network always did.

However, it appears that NBC, ABC, and CBS news have something else in common with Buick, Cadillac and Lincoln:  Their customers base is aging. Rapidly.

The median age of the average Buick owner is 67, for Cadillac is 65 and Lincoln is 63.  Excepting Escalades and Navigators, when was the last time you saw anyone in one of these cards who did not have gray hair (and perhaps a handicapped tag)?  This aging has the auto makers panicked.  Unless it is reversed, in 20 years these brands will be history.

It turns out that the network news programs have exactly the same problem, though none of them profess to be worried, despite the fact that the networks are losing share to competitors at a much faster clip than are US auto makers.  Journalism.org reports that the median age of an ABC News viewer is about 59, of an NBC News viewer is 60 and of a CBS News viewer is over 61.  Everyone who is younger has switched to cable, switched to the Internet, or switched off altogether.

In some sense, the network news problem is worse than the auto makers'.  If the auto makers can find compelling new designs to appeal to younger folks, younger buyers will come back - the brands are tarnished, but the basic business model is OK.  In the case of the networks, not only are their brands tarnished, but it is not clear that the business model of 30 minute evening news broadcasts can ever be revived in the face of a huge proliferation in news sources.

But, it is still entertaining to see who will replace the current anchors, the single best tool the networks have to reposition their broadcasts.  I wrote about Dan Rather's potential replacements here.

UPDATE:

What is it about the previous generations and the number 3?  Three big networks, three major automakers, Avis-Hertz-National, McDonalds-Burger King-Wendy's, etc.  Has there been a technology change to break up these oligarchies and provide more choices, or was there an inability by a couple of generations overwhelmed with change to digest more than 3 choices?  Update to the Update:  Virginia Postrel actually has a related post here about choice.

Good news for our business (I run a campground management company), the AP reports via our Arizona Republic that RV sales continue to surge, despite high gas prices.

RV sales are definitely riding the front end of the demographic wave, as new retirees look for more flexibility and mobility in their retirement years.   RV businesses are also benefiting from a post 9/11 reluctance to travel overseas or vacation at high-profile resorts or cities that might be targets.  I wrote on some of these trends in my post "the New American Nomads".

The new Carnival of the Capitalists is already up at The Entrepeneurial Mind.  Don't miss our article here.

The new Carnival of the Capitalists is already up at The Entrepeneurial Mind.  Don't miss our article here.

Last night I watched the 20/20 Interview with Victor Conte, the man at the center of the BALCO steroids scandal.  I can't tell you how tired I got of hearing him say "if everyone else is doing it, it's not cheating."

Let me tell you Vic - it is cheating.  Cheating is breaking the rules.  We could actually have a pretty good discussion as to whether steroid use should be illegal, but the fact is that steroid use is currently banned in track and field (the main focus of the piece).  You knew it was banned, else you and the athletes would not have gone through so many hoops to hide what you were doing.  If everyone is breaking the rules, it is still cheating.  Go try to sell your point of view to Andy Fastow and his wife over in the Enron section of the federal pen.

Don't know why his lawyers put this guy on TV - he sure did not gain my sympathy.

By the way, I am still upset that everyone is so busy being titillated by this scandal that no one can spare any indignation for the press yet again putting a dagger in the grand jury process.

From Overlawyered:  Another lawsuit where customers get the coupon, and lawyers get the cash.  I would love to see the use rate on the coupons out of these suits. I have gotten a few for like $1.24 off something that I threw away.  I mean, in several cases, the company was offering better coupons in the Sunday circular.

Though I thought it was kind of silly at first, I am coming around to supporting legislation that attorneys should get paid in the same currency as customers.

Also from Overlawyered is this good news about courts finally taking legal action against people who file fraudulent suits and claims:

A Fayette minister and a teacher are going to prison for their role in submitting phony Fen-Phen drug settlement claims in Jefferson County

Good, though we might have to have a massive amnesty in Mississippi or half the state could end up in jail.

I have written a number of times that our health care system will never work right until the person making the choices about health care is the same one bearing the costs of those choices.  Today, individuals and doctors make choices but insurance and employers pay the cost.  As a result, neither individuals nor doctors are very price sensitive, and have every incentive to sign up for every expensive diagnostic imaginable, particularly given whats going on in malpractice law.   Insurers who pay the bills are trying to control more of the decision making, but this just pisses everyone off.  Unfortunately, many want to fix this by putting both selection and payment in the governments hands - ughh.  My preference is of course to find a way to let individuals continue to make choices for themselves, but bear more of the cost.  MSA's are one such approach, I am sure there are others.

Marginal Revolution has an interesting post pointing out that the market for college textbooks has a similar disconnect -- professors choose the book but students pay for them, resulting in rapidly rising textbook costs.

Today, on NPR, I heard my state of Arizona getting bashed by some young reporter at the local affiliate based on Arizona's rankings in the latest NEA state rankings.  So, I thought I would check the report out myself.  The cover of the report tells us what we should expect to find:

This report is an update of data from NEA Research's report, Rankings & Estimates: Rankings of the States 2003 and Estimates of School Statistics 2004, based on the latest information provided from state departments of education. NEA Research collects, analyzes, and maintains data on issues and trends affecting the nation's public education systems and their employees.

OK, so lets open the report and see what statistics the NEA thinks are the best measures of public education.  Here are all the stats in the report, in the order they are reported (presumably their importance):

1. How much, on average, did teachers in each state earn per year?
2. How many students were enrolled in each state?
3. How many teachers were working in each state?
4. What was the student"“teacher ratio in each state?
5. How much money, on average, did each state spend per student?
6. How much money did each state spend for operating schools, including salaries, books, heating buildings, and so on?
7. How much money did each state spend in total for schools, including operating expenses, capital outlay, and interest on school debt?
8. How much revenue did school districts receive from state governments?
9. How much revenue did school districts receive from local governments?
10. What were school districts' total revenues?

Thats it.  That is the entire sum total of performance metrics they have for states and their schools.  So, what's missing?  How about any dang measure of student learning or performance!  I know that the NEA wants to criticize every test out there, and in fact resists standardized testing at every turn, but is it too much to think that we might measure the quality of education by the, um, quality of education, and not by how much the employees make? 

To be fair, the NEA does talk about NAEP test data on their web site, to the extent that they point out that some test scores are improving (they don't mention that this is improving off a disastrously low base).  This NEA web site section on student performance reminds me a lot of the environmental protection section on the Dow Chemical web site -- it's there because it's important to public relations but its not really a topic that dominates their priorities. I have a related post here that fisks the ideas for improvement on this NEA page, but if you don't want to read that post suffice it to say that they boil down to 1) spending more money; 2) hiring more teachers; 3) paying teachers more money ; 4) testing less or putting less emphasis on tests and measurable performance; and 5) more certification and protecting the guild.

Look, I don't begrudge the NEA's role as the union and collective-bargaining agent of the teachers, and as such, they should be very concerned with salary levels (more on that in a minute).  However, the NEA and their supporters constantly try to piously position the NEA as not a union - oh no - but as a group primarily interested in the quality of education.  I hope this report and its contents effectively dispels that myth once and for all.  The NEA today as an institution cares no more about the quality of education than the UAW cared about the quality of GM cars in the 70's (by the way, I am careful to say the NEA as an institution-- many individual teachers care a lot).

Continue reading ‘Latest NEA School Report is Absurd’ »

Last week, there were several comments in Carnival of the Capitalists that people would like to see more articles highlighting the benefits of capitalism.  This got me thinking about a conversation I had years ago at the beach:

Hanging out at the beach one day with a distant family member, we got into a discussion about capitalism and socialism.  In particular, we were arguing about whether brute labor, as socialism teaches, is the source of all wealth (which, socialism further argues, is in turn stolen by the capitalist masters).  The young woman, as were most people her age, was taught mainly by the socialists who dominate college academia nowadays.  I was trying to find a way to connect with her, to get her to question her assumptions, but was struggling because she really had not been taught many of the fundamental building blocks of either philosophy or economics, but rather a mish-mash of politically correct points of view that seem to substitute nowadays for both.

One of the reasons I took up writing a blog is that I have never been as snappy or witty in real-time discussions as I would like to be, and I generally think of the perfect comeback or argument minutes or hours too late.  I have always done better with writing, where I have time to think.  However, on this day, I had inspiration from a half-remembered story I had heard before.  I am sure I stole the following argument from someone, but to this day I still can't remember from whom.

I picked up a handful of sand, and said "this is almost pure silicon, virtually identical to what powers a computer.  Take as much labor as you want, and build me a computer with it -- the only limitation is you can only have true manual laborers - no engineers or managers or other capitalist lackeys".

Yeah, I know what you're thinking - beach sand is not pure silicon - it is actually silicon dioxide, SiO2, but if she didn't take any economics she certainly didn't take any chemistry or geology.

She replied that my request was BS, that it took a lot of money to build an electronics plant, and her group of laborers didn't have any and bankers would never lend them any.

All too many defenders of capitalism would have stopped here, and said aha!  So you admit you need more than labor - you need capital too.  But Marx would not have disagreed - he would have said it was the separation of labor and capital that was bad - only when laborers owned the capital, rather than being slaves to the ruling class that now controls the capital, would the world reach nirvana.  So I offered her just that:

I told her - assume for our discussion that I have tons of money, and I will give you and your laborers as much as you need.  The only restriction I put on it is that you may only buy raw materials - steel, land, silicon - in their crudest forms.  It is up to you to assemble these raw materials, with your laborers, to build the factory and make me my computer.

She thought for a few seconds, and responded "but I can't - I don't know how.  I need someone to tell me how to do it"

And that is the heart of socialism's failure.  For the true source of wealth is not brute labor, or even what you might call brute capital, but the mind.  The mind creates new technologies, new products, new business models, new productivity enhancements, in short, everything that creates wealth.  Labor or capital without a mind behind it is useless.

From the year 1000 to the year 1700, the world's wealth, measured as GDP per capita, was virtually unchanged.  Since 1700, the GDP per capita in places like the US has risen, in real terms, over 40 fold.  This is a real increase in total wealth - it is not money stolen or looted or exploited.  Wealthy nations like the US didn't "take" the wealth from somewhere else - it never even existed before.  It was created by the minds of human beings.

How?  What changed?  Historians who really study this stuff would probably point to a jillion things, but in my mind two are important:

1. There was a philosophical and intellectual change where questioning established beliefs and social patterns went from being heresy and unthinkable to being acceptable, and even in vogue.  In other words, men, at first just the elite but soon everyone, were urged to use their mind rather than just relying on established beliefs
2. There were social and political changes that greatly increased the number of people capable of entrepreneurship.  Before this time, the vast vast majority of people were locked into social positions that allowed them no flexibility to act on a good idea, even if they had one.  By starting to create a large and free middle class, first in the Netherlands and England and then in the US, more people had the ability to use their mind to create new wealth.  Whereas before, perhaps 1% or less of any population really had the freedom to truly act on their ideas, after 1700 many more people began to have this freedom. 

So today's wealth, and everything that goes with it (from shorter work hours to longer life spans) is the result of more people using their minds more freely.

Look around the world - for any country, ask yourself if the average person in that country has the open intellectual climate that encourages people to think for themselves, and the open political and economic climate that allows people to act on the insights their minds provide and to keep the fruits of their effort.  Where you can answer yes to both, you will find wealth and growth.  Where you answer no to both, you will find poverty and misery. 

UPDATE

While it is not exactly a direct follow-on to this article, see my post Progressives are too Conservative to Like Capitalism for an analysis of some of capitalism's detractors.  For yet another way to explain capitalism, at least libertarian philosophy, here is a new-agy approach that is actually pretty good.  Finally, Spontaneous Order has an interesting post comparing religious creationism in the physical world with progressives' statism in the economic/social realms.

Update #2:  Here is my more recent statement covering similar ground, focusing on the mistaken assumption that economics are all zero-sum.

Virginia Postrel has an article begging for repeal of the Wright Amendment.

What is this law?  Years ago, when they built the D/FW airport, they wanted to make sure they routed all local traffic through that airport and strangled all the competitive airports.  The Wright Amendment says that other local airports, particularly Dallas Love Field, can only have flights to Texas and adjoining states.

Well, this sounds just like a bit of municipal priority setting, until one other fact is thrown in.  Love Field is Southwest Airlines home field.  By placing this limitation on Love field, and keeping it that way, American Airlines and Delta get an effective subsidy, ensuring that they have no low-cost competition on their longer routes. 

I lived in Dallas for years and trevelled far and wide by air.  The Wright Ammendment cost me and my company at least $10,000 over that time in higher air fares.