Archive for September 2007

Is NASA The Largest Source of Global Warming?

Cars made by GM and fuel produce by Exxon may be responsible for a lot of CO2, but no one is creating as much global warming as James Hansen and NASA do just sitting at their computers.  An example, showing a cooling trend in New Zealand before their adjustments, but a strong warming trend after NASA is through with the data, is posted at Climate Skeptic.

Congrats to Milton Bradley...

...for getting the dumbest sports injury of all time, tearing his ACL when his manager was restraining him from attacking the first base umpire.  Video here, if you missed it.  We Diamondback fans are becoming big supporters of your, Milton.

Eagle Travesty

What I know:  The Philadelphia Eagles' jerseys this weekend were a travesty.  But that is OK, because I can't stand the Eagles, since their name is a tribute to Mussolini-style fascism.

When Did We Start to Fear Speech?

I feel like it is time for one of those unpopular libertarian rants that piss everyone off.   As with the last time this issue came up, I just don't understand what we fear so much letting Iranian dictator Amadinejad speak on American soil.  I am absolutely all for letting people put themselves on the record in the clearest possible way.  McQ over at Q&O is a smart guy I often agree with, but his core assumption seems to be that an invitation from Columbia University somehow confers some legitimacy on an otherwise egregious world leader.  How?  I am not sure the Columbia name even confers much legitimacy on its faculty.  The only thing the decision communicates to me is that Columbia, the university that didn't allow presentation of the Mohammad cartoons and that allows speakers to be manhandled off the stage, is deeply confused about speech issues on campus.

Information is always useful.  Would I have allowed Hitler to speak in the US in the 1930's?  Hell yes!  I wish he had gone on a 20-city speaking tour.  Hitler couldn't help but telegraph his true intentions every time he spoke.  Hell, he wrote it all down in a book if people would have paid attention.  But what if he didn't?  What if he convinced all America he was peaceful?  Even then it would have been useful.  Intelligent media (if there are any left) could then compare and contrast what he said at home vs. what he said in the US, much like a few folks do with Muslim clerics, comparing their English and Arabic speeches.  Further, folks would have immediately seen Hitler was lying in September of 1939, and, knowing Americans, they would have been more pissed off at him for being lied to.  Further, it would be fabulous to have quotes form Mussolini, touring eastern US cities, praising the New Deal and the NRA, much of which was modeled on his program in Italy.

What about, as Roger Simon asks:

I have a question for the Columbia crowd, since Holocaust deniers are
welcome, would you allow a speaker in favor of a return to black
slavery? I hope not. Well, that's how I feel about Holocaust deniers.

Absolutely I would.  If there was a prominent person who advocated the return to black slavery, I would want that person on the record in public.  I would love to listen to see what kind of supporters he thought he had, and, perhaps more importantly, to see who reacted favorably to him.   You have to pull these guys up into the sunlight and show the world how distasteful they are.


During the 1930s, "one of the things we really lacked in this country
was sufficient contact with Nazis to realize what they are up to," said
Harvey Silverglate, a prominent civil rights attorney who has sharply
criticized higher education for failing to support free speech on
campus. The notion "that you're going to take really awful people and
not listen to them is really suicidal for any society."

You Know You Have Been In Government Too Long When... equate the government choosing not to provide a service with that service being banned.  Michael Cannon quotes our Speaker of the House:

House Speaker Nancy Pelosi's understanding of government's role in a
liberal democracy (and of the veto power) may be worse than I thought. A reporter sends a transcript of a press conference that Pelosi held yesterday, where she made the following remarks:

Oh, [President Bush] used the veto pen to veto the stem
cell research bill.  That was a major disappointment. . . . I remember
that veto very well because he was saying, "I forbid science to proceed
to improve the health of the American people."

Regarding Bush's threatened veto of the Democrats' expansion of the State Children's Health Insurance Program:

The President is saying, "I forbid 10 million children
in America to have health care." You know from your Latin that is what
"veto" means.

Pelosi should know that there is a difference between the government not funding something and forbidding it.

Too Many Insured

I have written on a number of occasions that the real problem in American health care is the insulation between the person who receives the services and the true cost of the services.  Other than a few folks like me with high deductible policies, there is no incentive to shop around and no incentive to eschew certain avoidable and high cost procedures.

Marc Cooper complained that he went to the hospital for a day and it ended up costing the insurance company over $100,000.  His take-away form this is that the government needs to step in.  My take-away was different:

Did he ask for a price estimate in advance? Did he ask, as most of
us do with all of our large purchases, for a written estimate or
quotation? Did he get such estimates from two or three competitors? Did
he shop around?

Of course not! Because in a system where someone else is paying the
bills, we have no incentive to shop around. So providers have no
incentive to compete on price or to worry about productivity and cost

Sure, this looks like a rip-off.  But if you went in to buy a car,
concerned only with the quality of the
car, and never asked the price and then got a bill for $100,000 a few
weeks later, would you be surprised?  Would anyone give you sympathy if
you complained you paid $100,000 for the car but admitted you never
asked what the price was?

So I was very pleased to see this from John Stossel:

America's health-care problem is not that some people lack insurance, it is that 250 million Americans do have it.

You have to understand something right from the start. We Americans
got hooked on health insurance because the government did the insurance
companies a favor during World War II. Wartime wage controls prohibited
cash raises, so employers started giving noncash benefits like health
insurance to attract workers. The tax code helped this along by
treating employer-based health insurance more favorably than coverage
you buy yourself. And state governments have made things worse by
mandating coverage many people would never buy for themselves.

Competition also pushed companies to offer ever-more attractive
policies, such as first-dollar coverage for routine ailments like ear
infections and colds, and coverage for things that are not even
illnesses, like pregnancy. We came to expect insurance to cover

He concludes:

Imagine if your car
insurance covered oil changes and gasoline. You wouldn't care how much
gas you used, and you wouldn't care what it cost. Mechanics would sell
you $100 oil changes. Prices would skyrocket.

That's how it works in health care. Patients don't ask how much a
test or treatment will cost. They ask if their insurance covers it.
They don't compare prices from different doctors and hospitals. (Prices
do vary.) Why should they? They're not paying. (Although they do in
hidden, indirect ways.)

Ken Burns Disappoints?

I had eagerly awaited the first installment of Ken Burns documentary on WWII.  While it was fine, it undershot my expectations.  My expectations may be affected by the fact that, unlike the Civil War or other topics he has addressed, WWII has been done to death by documentaries.  It may also be that WWII is so sprawling, its hard to get a handle on in his timeframe.  After all, his series will be much shorter than the classic World at War and even than his own series on Baseball.

As with the Civil War, I thought the focus on a few American cities and the impact of the war worked pretty well.  However, I found the narrator (Keith David) for this particular series sleep inducing, particularly after David McCullough in the Civil War did such an outstanding job (and he was not even a professional "voice") and after the incredible cast of voice-overs in that same series.  Also, the organization seemed bizarre.  Around the 2 hour mark, they seemed to be clearly wrapping up the first episode, with summaries of dead and injured in the first part of the war.  But then all of a sudden they grafted on a short segment about Latinos and the marine raider battalion on Guadalcanal, and even a little snippet about Bougainville.  And then it just ended suddenly.  Made zero sense to me.

Public Relations Suicide by Essent Healthcare

Here they go again.  Another company is attempting to commit public relations suicide by blowing up the negative commentary of a small, low-traffic blogger into a national story.

An unlikely Internet frontier is Paris, Texas, population 26,490,
where a defamation lawsuit filed by the local hospital against a
critical anonymous blogger is testing the bounds of Internet privacy,
First Amendment freedom of speech and whistle-blower rights.

A state district judge has told lawyers for the hospital and the
blogger that he plans within a week to order a Dallas Internet service
provider to release the blogger's name. The blogger's lawyer, James
Rodgers of Paris, said Tuesday he will appeal to preserve the man's
anonymity and right to speak without fear of retaliation.

Rodgers said the core question in the legal battle is whether a
plaintiff in a lawsuit can "strip" a blogger of anonymity merely by
filing a lawsuit. Without some higher standard to prove a lawsuit has
merit, he said, defamation lawsuits could have a chilling effect on
Internet free speech.

"Anybody could file a lawsuit and say, 'I feel like I've been defamed. Give me the name,' " Rodgers said.

The blog about problems at Essent Healthcare is here, called The-Paris-Site.

Interestingly, the hospital, owned by a company called Essent Healthcare, appears to be using the medical privacy act HIPPA as a bludgeon to try to stifle criticism.  To make a case against the hospital, general criticisms about poor care and medical mistakes are best backed up with real stories.  But the hospital is in effect saying that real stories can't be used, since doing so violates HIPPA.  I don't know if this is or is not a correct application of HIPPA, but it is a danger of HIPPA that I and others warned about years ago.  The hospital goes on hilariously about how they are not really worried about the damage to their reputation, but for the poor patients whose medical details ended up in the blogger's hands.  Memo to health care workers in the future:  If you think the hospital screwed up my care, you have my blanket permission to release the details of said screw-up.

Before starting my own company, I have worked in a number of senior jobs at publicly traded companies and a few soon-to-be-f*cked Internet ventures.  In several of these cases, I and my fellow managers came in for pretty rough and profane criticism.  In many cases the posts were hilarious, positing well-oiled multi-year conspiracies from a management team that was just trying to survive the day.  Most of us were pretty rational about these sites - the more you try to respond to them, the more attention you give them.  The best response is to ignore them except maybe on Friday night when you can drink some beers and laugh out loud reading the commentary.  But there were always a few folks whose ego just got inflamed by the comments, even though they were seen by maybe 12 people worldwide.  They wanted to put a stop to the commenters.

I am sure that this is what is happening here.  Because any good PR person who has been in the business for more than 5 minutes would tell you that the worst thing you could do for a critic with a small audience is to a) turn them into a martyr and b) increase their audience about a million-fold.  These guys at Essent are just nuts, and in the heat of ego preservation are in the process of making a massive mistake.

I am reminded of TJIC's response when a lawyer threatened to file a BS copyright suit against him:

With regards to your statement that you've been "looking forward for a
class action lawsuit on a case like this", I, too, would enjoy such a
lawsuit. The publicity that we would derive from defeating your firm in
court over a baseless allegation of copyright infringement, brought
about by a law firm and a lawyer that does not understand the First
Sale doctrine, and which are entirely ignorant of the Supreme Court
case law on the topic, would be of incalculable value to us, and would
be a very cost efficient way to further publicize our service.

Hat Tip to Overlawyered for the link.

Update: The blogger appears to have been around since 2005.  The article said that as of June, or after about 2 years of operation, he had 170,000-ish page views.  He now appears to be at about 230,000 just three months later and only a few weeks after the story went public.  Q.E.D.

Update #2:  I forgot to include my opinion on the case.  There has got to be some higher legal bar to be cleared to strip the anonymity of a blogger than just asking for it to happen during discovery on a lawsuit.  If the legislature is not going to establish this bar, then a higher court is going to have to do so. 

I Wondered About This: China as Scapegoat

I haven't really blogged about the Chinese toy recalls, not knowing much about them.  However, my first thought on hearing the problems described was, "aren't those design defects, not manufacturing issues?"  I had a strong sense that populist distrust of trade with China was being used as a fig leaf to cover Mattel's screw-ups.  Several of the recalls were for parts such as magnets that were small and could be swallowed.  There was no implication that the magnets fell off because they were attached or manufactured poorly, they were just a bad design.

I have worked in a number of large manufacturing companies that have plants and suppliers in China.  It was out responsibility to make sure the product that got to the customer was correct.  There is no way we would source a product from an independent foreign company, and have the product delivered straight to stores without inspection, unless we were absolutely damn certain about the company's processes, up to and including having full-time manufacturing people at their plant.

Well, I might have been on to something (WSJ$)

Toymaker Mattel
issued an extraordinary apology to China on Friday over the recall of
Chinese-made toys, saying most of the items were defective because of
Mattel's design flaws rather than faulty manufacturing. The company
added that it had recalled more lead-tainted Chinese toys than was

Mattel ordered three high-profile recalls this summer
of millions of Chinese-made toys, including Barbie doll accessories and
toy cars, because of concerns about lead paint and tiny magnets that
could be swallowed. The "vast majority of those products that were
recalled were the result of a design flaw in Mattel's design, not
through a manufacturing flaw in China's manufacturers," Mr. Debrowski
said. Lead-tainted toys accounted for only a small percentage of all
toys recalled, he said. "We understand and appreciate deeply the issues
that this has caused for the reputation of Chinese manufacturers," he

Mattel said in a statement its lead-related recalls
were "overly inclusive, including toys that may not have had lead in
paint in excess of the U.S. standards. The follow-up inspections also
confirmed that part of the recalled toys complied with the U.S.

The other interesting thing here is just how important Mattel's relationship with China is, to have even issued this apology at all.  For such a massive and high-profile recall, Mattel came off very well through the succesful strategy of blaming China.  I know that parents I have heard talk about the recall blame China and have increased fear of Chinese products.  So it is interesting to see that Mattel feels the need to abandon this so far winning PR strategy.

New iPod Warning and Update

A few days ago I wrote that there were a lot of bad reviews of the new iPod Classics.  The form factor and increased storage seem enticing, but people complained about the user interface.

Today I went to Best Buy and tried them out.  Yuk!!  Scrolling through the menu, even with the album cover flip thing off, is really bad.  All sense of precision is lost, and the speed is much slower.  Just to get "artist" in the top menu was hard -- I kept scrolling past it.  There is just no sense of precise control.

I urge all of you to go try one before you buy, particularly if you are like me and are upgrading from a gen 5.5 classic.  Do not just buy it online sight unseen assuming it is just like the 5.5 but with more storage and a thinner form factor.  I am also told, but can't attest to the fact, that it is much harder to get video out to a TV, say in a hotel room, and takes new adapters and cradles to do so. 

This may get fixed in a software patch, but I an not entirely sure.  I have heard that new hardware on the touchpad is partially to blame, and there is no patch for that.  I can confirm that it did not feel like the old touch pad. 

This is Congress's Job, Why?

I am not at all clear why the Congress needs to take a formal vote on a resolution condemning a legal act of free speech by American citizens.  Yeah, I get the politics of this move.  But can't they focus on more important issues, like approving official national days for obscure vegetables.

From the Comments

From the comments to my iPod post:

Apple Computer announced today that it has developed a computer chip
that can store and play music in women's breasts as implants.

The IBoob will cost $499 or $599 depending on size.

This is considered to be a major breakthrough because women are
always complaining about men staring at their breasts and not listening
to them.

And who doesn't enjoy unclear pronoun reference humor?  Of course the greatest grammar joke of all time has to be this classic:

New Harvard Student:  Can you tell me where the library is at?

Other Harvard Student, with snobby accent:  At Haaahvaaard, we do not end our sentences in prepositions.

New Harvard Student:  OK.  Can you tell me where the library is at, Asshole?

Update:  Yes, I know, before the commenters come after me, I am not one to throw stones about grammatical mistakes.  But I can get it right when I try, I just make mistakes in the heat of battle.

Prosecutorial Misconduct

Some good news today in the annals of prosecutorial misconduct and overzealousness:  The Governor of Florida has pardoned Richard Paey, the man who was sent to prison for 25 years for trying to do something about his pain.

Richard Paey, a victim in the war on
drugs, was granted a full, immediate and unexpected pardon by Gov.
Charlie Crist and the Cabinet Thursday morning, allowing him to get out
of prison and be reunited with his family later in the day.

Paey, 49,
has spent the last 3 ½ years in prison after he was convicted on drug
trafficking charges in a 1997 arrest for filling out fake prescriptions
and possessing about 700 Percocet narcotic painkillers. He was to be
imprisoned for 25 years.

The catch: Everyone, including judges,
acknowledged the traffic accident victim was using the pills for
debilitating pain. Since his incarceration, prison doctors have hooked
him up to a morphine drip, which delivers more pain medication daily
than he was convicted of trafficking.

Good.  I am cautiously optimistic that after the Duke non-rape case, there is increasing focus on the issue of prosecutorial over-zealousness.  Along these same lines, the ACLU is coming to the defense of Larry Craig.  As is the plight of the Jena 6.

Trying to Hold Up the Ivy League's Honor

Scored 58 of 60 on the Civic's Quiz that apparently 40% of Ivy Leaguer students don't seem able to pass.  Missed the Jamestown founding date and Just War Theory.   Now I can be the crotchety old Princeton alum:  "Well in my day..."

Obama's Tax Mess

Like most of the Democratic presidential candidates, Obama has proposed a real mess in the place of coherent tax policy.   Chris Edwards has a first look.  No real surprises - more taxes on the productive, more handouts to key Democratic voting blocks.

A La Carte Pricing Will Hurt Niche Cable Channels

I see that the drive to force cable companies to offer their basic cable package a la carte rather than as a bundle is gaining steam again.  This is the dumbest regulatory step imaginable, and will reduce the number of interesting niche choices on cable.

For some reason, it is terribly hard to convince people of this.  In fact, supporters of this regulation argue just the opposite.  They argue that this is a better plan for folks who only are passionate about, say, the kite-flying channel, because they only have to pay for the channel they want rather than all of basic cable to get this one station.   This is a fine theory, but it only works if the kite-flying channel still exists in the new regulatory regime.  Let me explain.

Clearly the kite-flying channel serves a niche market.  Not that many people are going to be interested enough in kite flying alone to pay $5 a month for it.  But despite this niche status, it may well make sense for the cable companies to add it to their basic package.  Remember that the basic package already attracts the heart of the market.  Between CNN and ESPN and the Discovery Channel and the History Channel, etc., the majority of the market already sees enough value in the package to sign on.

Let's say the cable company wants to add a channel to their basic package, and they have two choices.  They have a sports channel they could add (let's say there are already 5 other sports channels in the package) or they can add the Kite-flying channel.  Far more people are likely to watch the sports channel than the kite flying channel.  But in the current pricing regime, this is not necessarily what matters to the cable company.  Their concern is to get more people to sign up for the cable TV.  And it may be that everyone who could possibly be attracted to sports is already a subscriber, and a sixth sports channel would not attract any new subscribers.  It is entirely possible that a niche channel like the kite-flying channel will actually bring more incremental subscribers to the basic package than another sports channel, and thus be a more attractive addition to the basic package for the cable company. 

But now let's look at the situation if a la carte pricing was required.  In this situation, individual channels don't support the package, but must stand on their own and earn revenue.  The cable company's decision-making on adding an extra channel is going to be very different in this world.  In this scenario, they are going to compare the new sports channel with the Kite-flying channel based on how many people will sign up and pay for that standalone channel.  And in this case, a sixth (and probably seventh and eighth and ninth) sports channel is going to look better to them than the Kite-flying channel.   Niche channels that were added to bring greater reach to their basic cable package are going to be dropped in favor of more of what appeals to the majority. 

I think about this all the time when I scan the dial on Sirius radio, which sells its services as one package rather than a la carte.  There are several stations that I always wonder, "does anyone listen to that?"  But Sirius doesn't need another channel for the majority out at #300 -- they need channels that will bring new niche audiences to the package.  So an Egyptian reggae channel may be more valuable as the 301st offering than a 20th sports channel.  This is what we may very likely be giving up if we continue down this road of regulating away cable package pricing.  Yeah, in a la carte pricing people who want just the kite-flying channel will pay less for it, but will it still be available?

Disclosure: The Government Poses a Huge Threat to This Business Plan

At a recent meeting of the National Associate of State Treasurers
(Yawn), John Podesta, after stating hilariously that what the world
really needed was continued leadership by state treasurers on the
global warming issue, argued: 

"Climate change is a threat to the long-term value of the economy and
failure to calculate its impacts or manage or reduce its harm mean that
our assets are being over valued, and the risks we face are being under

I have a lot of interest in global warming, which is why I created a second blog Climate Skeptic to deal with these issues.  There is a lot about anthropogenic warming we do not understand.  But what is nearly a total 100% lock is that, at least for the United States, the cost to our economy of regulations to limit CO2 will be far higher than the likely net-negative effects of warming (Al Gore's 20 foot sea level rises and other anti-rational claims notwithstanding).  At its heart, isn't the risk really of damage from government regulation, rather than the climate?

Via Michael Giberson of Knowledge Problem, the NY Attorney General is concerned that certain companies are not disclosing global warming-related risks, but he is at least more honest about what those risks are:

Last Friday, New York Attorney General Andrew Cuomo sent subpoenas
to five power generating companies seeking to find out if the companies
had properly disclosed financial risks associated with proposed new
coal-fired power plants.

All five of the letters accompanying the subpoenas are available from the NYAG's website.  Here is the opening paragraph of the letter to Dominion Resources, Inc.:

We are aware that Dominion Resources, Inc., ("Dominion")
has plans to build a coal-fired electric generating unit that would
generate 585 megawatts of electricity without current plans to capture
and sequester the resulting carbon dioxide (CO2) emissions. The
increase in CO2 emissions from the operating of this unit, in
combination with Dominion's other coal-fired plants, will subject
Dominion to increased financial, regulatory, and litigation risks. We
are concerned that Dominion has not adequately disclosed these risks to
its shareholders, including the New York State Common Retirement Fund,
which is a significant holder of Dominion stock. Pursuant to the
Attorney General's investigatory authority under New York General
Business Law § 352, and New York Executive Law § 63(12), accompanying
this letter is a subpoena seeking information regarding Dominion's
analysis of its climate risks and its disclosures of such risks to

A little later, the letter gets more specific: "For example, any one
of the several new or likely regulatory initiatives for CO2 emissions
from power plants "“ including state carbon controls, EPA's regulations
under the Clean Air Act, or the enactment of federal global warming
legislation "“ would add a significant cost to carbon-intensive coal
generation, such as the new coal plant planned by Dominion." In
addition to Dominion, the NYAG's office sent subpoenas to AES, Dynegy,
Peabody, and Xcel. Here is the story from the New York Times.

The letter doesn't say so explicitly, but I'm sure the message was
clear, that in addition to new or likely legislative actions and
substantive regulatory initiatives, the companies also faced the risks
and costs associated with being harassed by swarms of officers from the
NYAG's office.

You can see what is going on here -- following in the rich tradition established by the egregious Eliot Spitzer, the NY AG is again overreaching his office's authority and attempting to set regulatory policy rather than enforce it.  But at least he is honest in portraying the main risk to be a government regulatory backlash on these companies.

Thinking about this, couldn't every company put this in their boilerplate?  I mean, for most of us, the number one risk we face all the time is that the government will either do something to us specifically or the economy in general to hurt results.  Let's just have everyone add the line "the government poses a huge risk to our business plan" and be done with it.

Beware the New Ipods

A little while ago I wrote a post to say I was excited by the new generation of IPods.  I was ready to replace my 30GB v5.5 iPod classic with an 80GB that has the same form factor.  I am still hoping the iPod Touch (think iPhone without the phone) will turn out to be great, but there is a LOT of bitching out there about the new IPod classics.  Apparently, in a bid to make the interface prettier, it has become a lot slower (kindof like Vista).  Also, apparently some of the video functionality has been nerfed.  Research before you buy!  For example, check out the Amazon reviews.

What if the Wage Isn't Required for Living?

For those who are new to my blog, I run recreation sites like campgrounds, mostly with retired people as labor.  Retired people love these jobs, because they are looking for a nice place to live for the summer in their RV.  Often they are willing to work just for their site and utilities, though as a private entity I must pay them minimum wage as well (when they work for the government, they don't get paid).  We sometimes get into odd situations -- for example, because of a disability payment or Social Security limits, it is not unusual I have employees that ask me if I could not pay them or pay them below minimum wage, and I have to tell them no (minimum wage is absolutely required, even if the worker begs to be paid less).

This relationship works out well.  The retired persons bring conscientious and low-cost management to the campgrounds.  Our employees, who usually are living comfortably off their retirement savings or pension, get a few extra bucks and a nice place to live for the summer.  These folks may work a bit slow, but I can afford that at $6 an hour.

But what happens when a state like Maryland, because it's got its blood up against Wal-Mart, passes a $11.30 "living" wage?  A number of problems result.  First, a camping night generally consumes, on average, about an hour of labor.  At $6 an hour with 22% burden for payroll taxes and workers comp, this totals to $7.32  per night of camping in labor.  At $11.30 an hour, this totals $13.79 per night of camping.  Most of our campsites are tent camping sites and more primitive natural campgrounds (see here) and a typical price for a night of camping is $16.  This is a very low price for camping when compared to large RV parks, and makes our sites particularly popular with lower income people.  The Marlyland minimum wage would add at least $6.50 to this price, or increase prices by 41% in one swoop.  And this is before considering second order cost increases in other purchased goods and utilities due to the minimum wage increase.

The other problem is one I would have thought so obvious that it is amazing to me that no one seems to talk about it -- not everyone earning minimum wage is trying to live on it.  Certainly people new to the work force are one example, as they are often willing to trade lower initial wages for training and experience and a work record and other valuable but non-quantifiable benefits.  In my case, while I am perfectly happy to tolerate lower productivity from older, retired workers at $6 an hour (the average age of my employees is over 70), when wages are forced arbitrarily to over $11, then I have to think about changing my business model, substituting younger workers for older folks.  As any economist would predict, lower productivity workers get pushed out of the market.

For more on this topic, I discussed four case studies in my business dealing with the minimum wage.

American Middle Class Snobbery

I could probably fill this blog with absurd examples of American middle class snobbery, but I thought this one from TJIC was particularly good:

"¦Eleven tonnes of papayas were dumped outside the Agriculture and
Cooperatives Ministry yesterday by Greenpeace in protest at "¦
open-field trials of genetically-modified crops.

"¦people flocked to load up on the free papayas, ignoring the environmental organisation's campaign against "¦ GM fruit"¦

Many passers-by, who mostly knew nothing about transgenic fruit, said they did not care about any health risks.

They were just thinking about how hungry they were"¦

A while back I wrote about this same phenomenon:

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.

Much of the opposition to factory wages in Asia can be boiled down to members of the American middle class saying "I would never accept that job at that rate, so they should not either."

Congressmen doing What Congressmen Do

Not surprising, but certainly sickening:

They [the PMA GROUP]  sank $1,333,074 into the campaigns last year of 3
Democratic members of the House defense appropriations subcommittee and
walked away with $100.5 million in defense earmarks for PMA clients,
Roll Call reported.

That means for every buck they spent, their clients got back $75.39. In less than 1 year.

The 3 Democratic rent-to-own congressmen are John
Murtha, Jim Moran and Peter Visclosky. These antiwar Democrats see
nothing wrong with steering military money to PMA clients.

And why not? PMA money made up 20% of Murtha's war
chest, 18% of the Moran money and 33% of the Visclosky dough. For 2008,
PMA already has steered $542,500 to the 3 amigos.

Related thoughts from Radley Balko:

So I guess once you're elected to Congress, you're immune from drunk driving laws; you can stash the evidence that you've committed a crime in your office, because investigators aren't allowed to search it; if you kill someone because you've got a lead foot and blew a stop sign, the taxpayers will cover your financial liability; and, we learn today, you can commit whatever Internet-related crimes you please, because the police aren't allowed to search your computer.   

Meanwhile, the same  Congress that has immunized itself from much of the law is also responsible for the ever-expanding federal criminal code, which we can thank for our shamefully enormous and still-soaring prison population, which is by far and away the largest in the world. 

have lawmakers who feel they're above the law. And who at the same time
are criminalizing anything and everything they find tacky, repugnant,
or immoral.

More Anti-Consumer Regulation

We seem to be getting these stories in batches lately (others here and here) but leave it to the EU to trump even San Francisco in anti-consumer stupidity:

Microsoft lost its appeal of a European antitrust order Monday
that obliges the technology giant to share communications code with
rivals, sell a copy of Windows without Media Player and pay a $613
million fine - the largest ever by EU regulators.

The EU
Court of First Instance ruled against Microsoft on both parts of the
case, saying the European Commission was correct in concluding that
Microsoft was guilty of monopoly abuse in trying to use its power over
desktop computers to muscle into server software.

It also said regulators had clearly demonstrated that selling media software with Windows had damaged rivals.

court observes that it is beyond dispute that in consequence of the
tying consumers are unable to acquire the Windows operating system
without simultaneously acquiring Windows Media Player," it said.

that regard, the court considers that neither the fact that Microsoft
does not charge a separate price for Windows Media Player nor the fact
that consumers are not obliged to use that Media Player is irrelevant."

Yes, you are reading it correctly.  Microsoft is being penalized for giving the consumer too much value by bundling in additional features and programs for free into its OS.  And just to make sure that you understand that this has nothing to do with the consumer, but is purely a complaint of large competitors that can't keep up, they make it clear that they want the bundling stopped even if it does not change the price of the OS one penny (pfennig or whatever the Euro equivalent is).  They want the product stripped down and are deliberately trying to reduce its value to customers.

Gwynnie at Maggie's Farm has a funny comment, saying, "Microsoft is guilty of succeeding while American."

Killing Entrepeneurship

Regulation is a frequent topic on this blog, and one of the points I try to make over and over is that most supposedly pro-consumer regulation is in fact put in place to protect incumbents from competition and new entrants.   It's worth repeating this Milton Friedman quote:

The justification offered is always the same: to protect the consumer. However, the reason
is demonstrated by observing who lobbies at the state legislature for
the imposition or strengthening of licensure. The lobbyists are
invariably representatives of the occupation in question rather than of
the customers. True enough, plumbers presumably know better than anyone
else what their customers need to be protected against. However, it is
hard to regard altruistic concern for their customers as the primary
motive behind their determined efforts to get legal power to decide who
may be a plumber.

Apparently, the NY Times has discovered the phenomenon, and argues that it is accelerating under the Bush administration.  I have no evidence to refute this claim, though I note that the NY Times offers no evidence in support of it either.

Never-the-less, it certainly is a feature of most governments to try to protect politically powerful businesses against competitors, foreign and domestic.  Basically, the entire German and French economy is built on this practice, which is why the top corporations in these countries in 1960 are still the top companies today, whereas the list has completely turned over in the US.  Our economy thrives because of entrepreneurship.  New entrants replace senescent competitors, or at least keep the pressure on them so they stay sharp and focused.

This is an enormous issue in my business.  My industry is characterized by about 4-5 larger companies that operate many recreation facilities, of which we are one, and hundreds or perhaps thousands of individual operators.  Over the last five years, the US and state governments have passes a myriad of rules and regulations that are making it virtually impossible for smaller companies to compete.  I don't know if these are being suggested by any of the larger players (they certainly aren't coming from me) but these regulations are serving the purpose of strangling smaller competitors and making it nearly impossible for new entrants to compete.

Help, Help! We're All Getting Poorer!

Or not.  Via Cafe Hayek and the WSJ, the median new home is 40% bigger than just a generation ago.


Atlas Shrugged at 50

Apparently Ayn Rand's novel Atlas Shrugged is turning 50, a fact I know only because my fairly libertarian-tilted feed reading list has been deluged of late with retrospectives. 

One of the oddities of posts on Ayn Rand is that every author seems to feel required to say something like "I like her work but I am not in total agreement with everything she says."  Uh, OK.  I'm not clear why this proviso seems so necessary.  I have never heard someone saying "I am a big fan of Mozart" and then following up with "but I don't like all of his works."  I am sure that is true, but they don't bother saying so.   I am a big fan of Ayn Rand, in particular with her non-fiction essays, but of course there are parts of her writing I don't agree with.  For example, I would be less likely to take her advice on managing my love life than I would to eat out of Hannibal Lecter's cookbook.

What Rand did so well in Atlas Shrugged was to take collectivist and anti-rational philosophy and play it forward in practice in a very compelling way. She demonstrated with almost mathematical precision the end results of collectivist philosophy.   The entropic United States in Atlas Shrugged, running down under the weight of socialism, has turned out to be repeatedly prescient.  For this reason, I find her anti-heros to be more memorable.  I see analog's to the Jim Taggerts and Lee Hunsackers and Starnes children nearly every day in the news.  Through these analogs, Rand still helps me place current events in their philosophical context. 

By the way, if you enjoyed her novels but have never read her essays, I encourage you to do so.  The Virtue of Selfishness is a reasonable place to start.  She was not the first person to voice many of these messages (Hayek and others were saying many of the same things) but because of her novels, I, like many others, heard them first from her.