Dispatches from District 48
Archive for June 2015
In honor of an anniversary of sorts for the book, I have done a substantial edit on both the printed and Kindle editions of my first novel "BMOC" and it is now on sale through Monday for the low, low price of $0.
Go and grab a copy. As John Belushi says in Animal House, Don't cost nothin'
Even if you don't want it, grab a copy for free and pump up my stats so I can impress my kids.
For years I have excoriated the City of Glendale, AZ (a western suburb of Phoenix) for its myriad subsidies of the Coyotes NHL hockey team. When Glendale finally had the chance to walk away several years ago, I (and many others) begged the town not to throw good taxpayer money after bad and re-sign some sort of subsidy agreement with the team. For you see, even after getting a stadium at taxpayer expense, the team still demands millions of dollars a year in operating subsidies to stay in town.
But the town insisted on throwing more taxpayer money at the group buying the Coyotes from the NHL out of bankruptcy. The problem was that there was a gap between the NHL's asking price ($200 million) and the team's value in AZ ($100 million). First, they tried to give them a direct subsidy, but the Goldwater Institute sued to stop that and won. So instead, the city buried the subsidy in a stadium management contract. Here is how I described this contract at the time it was signed:
The NHL came down to a price of $175 million, still $75 million or so above what the team is worth. The City had already sought arms-length bids for the stadium management contract, and knew that a fair market price for that contract would be $6 million per year. It ended up paying the buying group $15 million per year for the 15-year contract, representing a subsidy of $9 million a year for 15 years. By the way, the present value of $9 million over 15 years at 8% is... $75 million, exactly what was needed to make up the bid-ask gap. Again, I think the city almost had to do it, because the revenue stream it was protecting is likely higher than $9 million. But this is the kind of bad choices they saddled themselves with by building the stadium in the first place.
So only now that they have signed the contract and a private party has taken over the Coyotes based on the city's contract, Glendale is trying to unilaterally tear up the contract. They have some thin reed of a "conflict of interest" claim that is based on the overlap of payrolls for one guy between the City and the Coyotes by a couple of days. This seems like an absurd claim gen'd up just to try to solve Glendale's buyer's remorse. My gut feel is that it is never going to fly in court.
What a bunch of losers. You should never have signed the contract, but now that it is signed, you actually have an obligation to live by it, particularly since a private party paid $100 million extra for the team mainly on the strength of this contract.c If you want out, declare bankruptcy (which actually might not be too far away for the city).
Patrick Everson has the first of a two-part series of editorials in the Las Vegas Review-Journal on light rail. In this first part, he is nice enough to refer to much of what I have written here about the problems with Phoenix Light Rail. You can find his editorial here.
Steve Chapman's article in Reason on police accountability is good throughout, but these stats are amazing:
Consider Cleveland. The ClevelandPlain Dealer reported that the police department looked into 4,427 uses of force by cops over four years and gave its blessing to each one. In Houston, every shooting over six years was found by the internal affairs department to be absolutely necessary. ...
The feds also assume that law enforcement officers are less fallible than the pope. From January 2010 to October 2013, the Los Angeles Times reported, Border Patrol agents shot 67 people, killing 19. Three of the agents are still being investigated. Of the remaining 64, 62 were absolved. The other two got a stern lecture.
It's all part of a national pattern. Bowling Green State University criminologist Philip Stinson has done extensive research on killings by cops. His conclusion? "It's very rare that an officer gets charged with a homicide offense resulting from their on-duty conduct even though people are killed on a fairly regular basis," he told The Wall Street Journal.
I have already given my cynical take on why this problem exists and why it is likely to persist. Specifically, Conservatives fetishize the police and refuse to believe any shooting was unjustified and Liberals are suspicious of the police but refuse to challenge the powerful public employees unions that protect police from accountability.
One can build a very good predictive model of government agency behavior if one assumes the main purpose of the agency is to maximize its budget and staff count. Yes, many in the organization are there because they support the agency's public mission (e.g. protecting the environment at the EPA), but I can tell you from long experience that preservation of their staff and budget will almost always come ahead of their public mission if push comes to shove.
The way, then, to punish an agency is to take away some staff and budget. Nothing else will get their attention. Unfortunately, in most scandals where an agency proves itself to be incompetent or corrupt or both (e.g. IRS, the VA, more recently with OPM and their data breaches) the tendency is to believe the "fix" involves sending the agency more resources. Certainly the agency and its supporters will scream "lack of resources" as an excuse for any problem.
And that is how nearly every failing government agency is rewarded for their failure, rather than punished. Which is why our agencies fail so much.
Note that organizations in the private world are not immune to similar incentives. A company's marketing staff will work hard to get more people and resources for marketing, and in good times their staff and budget may balloon. The difference is that in the private world, there is competition. Other companies are trying to sell similar products and services. And if the marketing department is screwing up a lot, or those resources spent on it are not being used productively, the company is going to lose sales and thus resources. To survive, massive changes will be made, including likely some deep cuts and large restructurings in marketing.
It is frustrating to work in corporations that seem to lurch from growth periods to cutbacks in an endless cycle. But it beats the alternative where the organization always grows and never is forced to confront the value of how it spends its resources.
Here is a very telling paragraph from the HUD's new proposed fair housing rule
Despite the existing obligation to AFFH, in too many communities, the Fair Housing Act has not had the impact it intended — housing choices continue to be constrained through housing discrimination, the operation of housing markets, investment choices by holders of capital, the history and geography of regions, and patterns of development and the built environment.
So, they list "discrimination" as a problem, but then look at the other four items they list as problems. These can all be summarized as "the normal operation of free markets, property rights, and individual choice."
Oddly missing from this list of causes is what many historians consider to be the #1 cause of lack of neighborhood diversity and ghetto-ization: The Federal Government and the New Deal. New Deal rules essentially forced the concentration of blacks into just a few neighborhoods. The biggest unmixing of races in New York can be seen between 1930 and 1950. Blacks in Brooklyn went from fairly evenly mixed to concentrated in Bed-Stuy, all directly attributable to New Deal rules. Basically, ever since then, we have just been living with the consequences. Via NPR in an interview with Richard Rothstein
On how the New Deal's Public Works Administration led to the creation of segregated ghettos
Its policy was that public housing could be used only to house people of the same race as the neighborhood in which it was located, but, in fact, most of the public housing that was built in the early years was built in integrated neighborhoods, which they razed and then built segregated public housing in those neighborhoods. So public housing created racial segregation where none existed before. That was one of the chief policies.
On the Federal Housing Administration's overtly racist policies in the 1930s, '40s and '50s
The second policy, which was probably even more effective in segregating metropolitan areas, was the Federal Housing Administration, which financed mass production builders of subdivisions starting in the '30s and then going on to the '40s and '50s in which those mass production builders, places like Levittown [New York] for example, and Nassau County in New York and in every metropolitan area in the country, the Federal Housing Administration gave builders like Levitt concessionary loans through banks because they guaranteed loans at lower interest rates for banks that the developers could use to build these subdivisions on the condition that no homes in those subdivisions be sold to African-Americans.
Postscript: Here is how the Ken Burns New York documentary series explained it, though the source page is no longer available:
Government policies began in the 1930s with the New Deal's Federal Mortgage and Loans Program. The government, along with banks and insurance programs, undertook a policy to lower the value of urban housing in order to create a market for the single-family residences they built outside the city.
The Home Owners' Loan Corporation, a federal government initiative established during the early years of the New Deal went into Brooklyn and mapped the population of all 66 neighborhoods in the Borough, block by block, noting on their maps the location of the residence of every black, Latino, Jewish, Italian, Irish, and Polish family they could find. Then they assigned ratings to each neighborhood based on its ethnic makeup. They distributed the demographic maps to banks and held the banks to a certain standard when loaning money for homes and rental. If the ratings went down, the value of housing property went down.
From the perspective of a white city dweller, nothing that you had done personally had altered the value of your home, and your neighborhood had not changed either. The decline in your property's value came simply because, unless the people who wanted to move to your neighborhood were black, the banks would no longer lend people the money needed to move there. And, because of this government initiative, the more black people moved into your neighborhood, the more the value of your property fell.
The Home Owners' Loan Corporation finished their work in the 1940s. In the 1930s when it started, black Brooklynites were the least physically segregated group in the borough. By 1950 they were the most segregated group; all were concentrated in the Bedford-Stuyvesant neighborhood, which became the largest black ghetto in the United States. After the Home Owners Loan Corp began working with local banks in Brooklyn, it worked with them in Manhattan, the Bronx, and Queens.
The state also got involved in redlining. (Initially, redlining literally meant the physical process of drawing on maps red lines through neighborhoods that were to be refused loans and insurance policies based on income or race. Redlining has come to mean, more generally, refusing to serve a particular neighborhood because of income or race.) State officials created their own map of Brooklyn. They too mapped out the city block by block. But this time they looked for only black and Latino individuals.
This site has some redlining maps, including one of Brooklyn, prepared by the Feds. Remember, this is not some evil Conservative business CABAL, these are Roosevelt Democrats making these maps. This site adds:
While the HOLC was a fairly short-lived New Deal agency, the influence of its security maps lived on in the Federal Housing Authority (FHA) and the GI Bill dispensing Veteran’s Administration (VA). Both of these government organizations, which set the standard that private lenders followed, refused to back bank mortgages that did not adhere to HOLC’s security maps. On the one hand FHA and VA backed loans were an enormous boon to those who qualified for them. Millions of Americans received mortgages that they otherwise would not have qualified for. But FHA-backed mortgages were not available to all. Racial minorities could not get loans for property improvements in their own neighborhoods—seen as credit risks—and were denied mortgages to purchase property in other areas for fear that their presence would extend the red line into a new community. Levittown, the poster-child of the new suburban America, only allowed whites to purchase homes. Thus HOLC policies and private developers increased home ownership and stability for white Americans while simultaneously creating and enforcing racial segregation.
The exclusionary structures of the postwar economy pushed African Americans and other minorities to protest. Over time the federal government attempted to rectify the racial segregation created, or at least facilitated, in part by its own policies. In 1948, the U.S. Supreme Court case Shelley v. Kraemer struck down explicitly racial neighborhood housing covenants, making it illegal to explicitly consider race when selling a house. It would be years, however, until housing acts passed in the 1960s could provide some federal muscle to complement grassroots attempts to ensure equal access.
The Left seems to be wasting its legitimate outrage about surveillance on the wrong targets.
“At a base minimum, people should be able to walk down a public street without fear that companies they’ve never heard of are tracking their every movement — and identifying them by name — using facial recognition technology,” the privacy advocates wrote in a joint statement....
“People simply do not expect companies they’ve never heard of to secretly track them using this powerful technology. Despite all of this, industry associations have pushed for a world where companies can use facial recognition on you whenever they want — no matter what you say. This position is well outside the mainstream.”
Look, I am all for these folks campaigning for better privacy protections on businesses, but really, isn't this the wrong target. Seriously, Target is tracking me in order to ... what? Make me a targeted discount offers and rearrange their stores to better match my shopping habits?
Look, the government has guns and prisons. They can take my money and my assets. What the government can do to me makes the fear of being in Pepsi's marketing data base seem like a pure joke.
Every day I leave my house I have to pass this damn government surveillance cactus not a hundred yards from my home, tracking my face and license plate.
There are at least two more of these in walking distance of my house.
I have news for you folks on the Left -- the government doesn't give a crap about your privacy, but is willing to beat on private corporations for a while (which really pose you zero harm) to divert you from the real threat, which is them. And in the end, despite all their rhetoric, they will likely let private corporations do whatever they want as long as the government gets a backdoor into the data.
It is the latter that worries me the most. I couldn't care less what Wal-Mart knows about my shopping habits. But I do care that data they gather could be funneled into Uncle Sam's greedy hands.
Our Overwrought language award this week comes from Kevin Drum of Mother Jones, writing about Paul Ryan's budget plan. Drum calls Ryan's budget a "Vision of a Dickensian Hellhole". He quotes Jonathon Chait as saying, "Its enactment would amount to the most dramatic rollback of government since the New Deal."
All this for a budget that proposes to reduce government spending to about 19% of GDP, a level that we have not seen since the Dickensian Hellhole of ... the Bill Clinton Presidency. During the New Deal, spending hovered around 10% of GDP.
This is the ratchet effect that big government lovers are so adept at employing. Under President Obama (with a lot of help from George Bush and a Democratic Congress) spending has skyrocketed to an unprecedented-except-in-WWII level of over 25% of GDP. But suddenly Drum and Chait and company want to define that level as the new baseline, below which any drop is now "Dickensian." Which is another reason that we should never, ever create a new government spending program because once established they are impossible to eliminate, no matter how stupid and wasteful.
There is this a sort of enviro-socialist vision that everything would be better if everyone owned the world's natural resources. Here is what happens when "everyone" owns something, in this case underground water (via the Washington Post)
I am actually surprised some are doing as well as they are. I had always heard anecdotally that the Ogallala was falling steadily, but by this map it appears stable.
You could probably create the same map that looks even more dire for the stability of ocean fish populations, another resource with no property rights.
A while back I wrote a long article about all the ways the government is making it nearly impossible to employ low-skilled labor. I worried that because it is getting harder and harder to profitably employ low-skill labor, the country would soon sort itself into those with skills and jobs and those on government assistance, with little or no opportunity for people in the second category to move to the first.
As part of that article, I observed that much of the capital in this country is flowing to new business models that use minimal numbers of employees. I wrote:
Is it any surprise that most entrepreneurs are pursuing business models where they leverage revenues via technology and a relatively small, high-skill workforce? Uber and Lyft at first seem to buck this trend, with their thousands of drivers. But in fact they prove the rule. Uber and Lyft are very very careful to define themselves and their service in a way that all those drivers don't work for them. I would go so far to say that if Uber were forced to actually put all of those drivers on their payroll, and deal with they myriad of labor compliance issues, their model would fall apart.
Well, we are going to find out if my last statement is true.
The California labor commission has ruled that an Uber driver qualifies as an employee, not a contractor, of the company. As a result Uber will have to reimburse a driver for expenses accumulated in the line of duty. That includes $256 in tolls and the IRS rate of $0.56 per mile for use of a personal vehicle for business purposes.
The actual issue in this case of reimbursement of expenses is pretty narrow, and actually kind of stupid. Uber is already paying drivers effectively by the mile by giving them a percentage of the mileage-based fee customers pay. All this will do is cause Uber to reduce the share of revenues drivers get by something like 56 cents a mile and then hand the $0.56 to them in a separate check. Its an extra accounting and paperwork hassle, but business people deal with mitigating such government-imposed stupidity 10 times a day.
No, the real danger of this ruling lies far beyond expense reimbursement. A few top of head thoughts
I grew up in the Deep South (in Houston -- for outsiders, Texas acts like the South when one is east of I-35 and then is more like the West). Though my immediate family was fairly open-minded, I was surround by a scolding Southern Baptist culture that seemed deeply offended by everything -- dancing, drugs, drinking, youth behavior, movies, TV, games -- you name it. I remember visiting aunts and uncles and cousins who were in a perpetual state of being offended. And it carried over into the whole political culture of the place -- it seemed there was always some debate about book or textbook passage that needed to be banned to save the delicate eyes and impressionable brains of the children.
Going to college in the Ivy League was a breath of fresh air. I never cottoned much to the authoritarian command and control favored by many at college, but I loved the liberal atmosphere of tolerance for most any speech or behavior.
Little would I have believed it, but college students today now sound exactly like my Southern Baptist aunt. They are humorless and scolding and offended by virtually everything. Many of the same pieces of literature those good Texas Baptists were trying to censor from school curricula in my day because they conflicted with religious doctrine are now being censored by good campus Progressives because they might be triggering. What a bizarre turn of events.
Ian McEwan had a nice line in his graduation speech at Dickinson: "“being offended is not to be confused with a state of grace — it’s the occasional price we all pay for living in an open society.”
As I have written before, Phoenix has seen its total transit ridership flat to down since it built its light rail line. This after years of 6-10% a year increases in ridership. Most cities, even the oft-worshipped Portland, have seen the same thing. Here is the chart for Phoenix (if you look closely, you can see how they fudged the bar scaling to make light rail ridership increases look better).
The reason is that per passenger, or per mile, or per route, or whatever way you want to look at it, rail systems are 1-2 orders of magnitude more expensive than buses. Since most cities are reluctant to increase their spending on transit 10-100x when they build trains (and to be fair, proponents of rail projects frequently make this worse by fibbing about future costs and revenue expectations), what happens is that bus routes are cut to fund rail lines. But since buses are so much cheaper, 10 units of bus capacity, or more, must be cut for each one unit of rail capacity.
The Anti-planner shows us an example in Honolulu. No, the line is not finished so this effect has not happened yet, but you can see it from a mile away:
The city and state officials who promoted construction of Honolulu’s rail transit line now admitthat they don’t know how they are going to pay for the cost of operating that line. Between 2019, when the first part of the line is expected to open for business, and 2031, those costs are expected to be $1.7 billion, or about $140 million per year. In 2011, the annual operating cost was estimated to be $126 million a year.
Honolulu has about a hundred bus routes, which cost about $183 million to operate in 2013, or less than $2 million per route. The rail line will therefore cost about 70 times as much to operate as the average bus route.
So they have budgeted no money for operations, and are probably underestimating net operating costs as their revenue projections, as discussed later in the article, are transparently over-optimistic (this is always a good bet, since 99% of rail projects under-estimate their costs and over-estimate their ridership). The rail line will cost as much to operate as 2/3 of their city's entire bus system, which is extensive and well-used. So how many bus routes will be cut to fund this one route? 10? 30? 70?
By the way, beyond the obvious harm to taxpayers, the other people hurt by this are the poor who are disporportionately bus users. Rail systems almost always go from middle/upper class suburbs to business districts and seldom mirror the transit patterns of the poor. Middle class folks who wouldn't be caught dead on a bus love the trains, but these same folks already have transportation alternatives. The bus lines that get cut to fund the trains almost always serve much lower income folks with fewer alternatives.
I am serious about this. We saw in an earlier story that the government is trying to tighten regulations on private company cyber security practices at the same time its own network security practices have been shown to be a joke. In finance, it can never balance a budget and uses accounting techniques that would get most companies thrown in jail. It almost never fully funds its pensions. Anything it does is generally done more expensively than would be the same task undertaken privately. Its various sites are among the worst superfund environmental messes. Almost all the current threats to water quality in rivers and oceans comes from municipal sewage plants. The government's Philadelphia naval yard single-handedly accounts for a huge number of the worst asbestos exposure cases to date.
By what alchemy does such a failing organization suddenly become such a good regulator?
Update: On the topic of cyber security competence or lack thereof, there is this:
In mid-May, the Federal Bureau of Investigations lost control over seized domains, including Megaupload.com, when the agency failed to renew a key domain name of its own. That domain, which hosted the name servers that redirected requests for seized sites to an FBI Web page, was purchased at auction—and then used to redirect traffic from Megaupload.com and other sites to a malicious site serving porn ads and malware. Weeks later, those sites are still in limbo because somehow, despite a law enforcement freeze on the domain name, the name servers associated with Megaupload.com and those other seized sites were changed to point at hosts associated with a domain registered in China.
Yep, that is the lead government agency tasked with investigating hacking and cyber security breaches.
We have about 20 retail locations with credit card terminals. Typically, I have always bought the terminals because leasing is such a crazy bad deal. For example, Transfirst will lease you (via their partner First Data Global Leasing, or FDGL) a Hypercom 4220 for about $32 a month on a 48-month lease. That is about $1536 in payments total. Right now you can buy the same Hypercom 4220 invthis lease for about $179.
But despite this, I actually found myself talked into leasing a few of these Hypercom 4220 terminals. I was told by Transfirst (the merchant company) that a technology transformation was coming (this was true) and that the advantage of leasing was that if the terminals become obsolete, they will be upgraded automatically (this turned out to be a lie).
Note that this was stupid, stupid, stupid on my part. I admit it. I could have still bought them and have been better off after 6 months, even if it became obsolete, than leasing. Mea culpa. My only excuse is that I had developed a lot of trust in my old processor Solveras and didn't realize how much their customer service would change for the worse when they got bought by Transfirst.
However, the really irritating part occurred when I got an email from Transfirst saying that my Hypercom 4220's would essentially be obsolete after October, 2015 because these terminals can't handle the new chip cards (technically I could still use them, but at a serious liability risk, which is not acceptable). So I called Transfirst and asked them what was going to happen on my equipment they leased me that they now have told me is obsolete. They said that I could upgrade the Hypercom's on my lease to Ingenico ICT220's for a $189 fee.
Well, it turns out that Ingenico ICT220's retail for about $160. So here was the upgrade option they offered on my lease -- I could pay more than the retail price of a new terminal in order to substitute that new terminal on my account, and having just paid for the terminal, the terminal then would become property of the leasing company and must be returned at the end of the lease, which all the while is still charging me $32 a month.
I called my sales agent, the customer support staff, the equipment transition team -- they all said the same thing. I could not believe it. The deal was so bad that even one of their competitors, whom I had started talking to, urged me to check with Transfirst more carefully because they could not believe Transfirst were offering such an awful arrangement. But they were.
So I am switching merchant companies and buying all new terminals. I will return to Transfirst all their equipment and pay off the remaining months on the lease. It is not often that a vendor of mine is so bad that I pay substantial money to get away from them, but getting away from Transfirst justified the cost.
By the way, for merchant companies reading this, please do not add yourself, based on this post, to the 3-4 calls a day I get trying to sell me credit card processing. I have a good deal for half my business with Bank of American, have always been happy with their service, and am moving my Transfirst business to them.
Postscript: One piece of advice on choosing a merchant account. When I ask for quotes on merchant services, I ask now that the bid be quoted as a spread. Basically MC/Visa have a set of rates they charge, sort of wholesale rates everyone must pay. There are zillions of rates for various types of cards (for example those rewards cards you love can pay you because they get a higher fee from merchants for the same transaction). If you just get a rate quote, you will get zillions of rates and it will be almost impossible to compare against another quote, particularly if you don't know your typical mix of card types. If you ask for a spread, e.g. 10 basis points over wholesale on all cards, you know exactly what you are getting and that there are not any bad deals buried in that rate list. It is also really easy to compare to other quotes.
The other advantage of this is that when MC/Visa change their rates (always up) your rates just go up by the amount of the rate increase. Without a spread deal, merchant processors can take advantage of MC/Visa rate changes to slip in a few more basis points for themselves. How would you ever know?
Statists believe in a kind of alchemy. They will say that individual citizens cannot be trusted with, say, selecting their own health plan. This must be entrusted to a government official who gained such lofty powers by ... being selected by the self-same citizens that couldn't be trusted to choose a health plan. How is it that schlubs who cannot be trusted can be elected by the mass of schlubs who cannot be trusted, placed into a monopoly with guns and no competition, and miraculously suddenly be trusted?
As you probably know, the institution that demands ever more power because of external threats to our security and constantly bashes private companies for not being careful enough with privacy had most of its employee data stolen by a group of Chinese hackers. After the hack was made public, the government claimed the hack was discovered due to their diligent internal security efforts. This turns out not to be the case, and the reality is pretty damn funny:
At the time, OPM said the breach was discovered as the agency “has undertaken an aggressive effort to update its cybersecurity posture, adding numerous tools and capabilities to its networks.”
But four people familiar with the investigation said the breach was actually discovered during a mid-April sales demonstration at OPM by a Virginia company called CyTech Services, which has a networks forensics platform called CyFIR. CyTech, trying to show OPM how its cybersecurity product worked, ran a diagnostics study on OPM’s network and discovered malware was embedded on the network. Investigators believe the hackers had been in the network for a year or more.
Update: Extra points for this one:
The breach has expedited plans by the Senate to vote on cybersecurity legislation, with Majority Leader Mitch McConnell (R., Ky.) saying Tuesday a vote now could be held in the coming days.
Mr. McConnell said he planned to use an annual defense policy bill currently on the Senate floor to advance the cybersecurity measure, which is aimed at responding to a growing prevalence of data breaches at large U.S. companies.
So the government gets breached because it is using outdated software major private companies have long-ago replaced or patched, and the reaction is to...place new demands on private companies?
We've been pretty happy with the education and experience at Amherst College but it is scary as hell to think anyone at school can ruin your kid's life by basically just pointing a finger at them. Amherst's version of Kafka's 'The Trial".
Because we say y'all, not you guys.
Thank the stars that we don't have gendered nouns (and thus adjectives and articles) as do Spanish, Italian, and German, among others. Beyond the extra memorization hassles (the frickin' Germans have 3 genders to remember), what would the modern American Left do with that mess?
Roger Goodell is the President of the NFL, and despite huge love for the NFL itself, Goodell is hated by many, even most, fans. At the NFL draft, which attacts arguably the biggest fans of the NFL, Goodell gets booed every time he walks on stage. One reason for this is the decision Goodell made a number of years ago to "police" player behavior. Tired of bad headlines about this or that player being involved in some sort of (alleged) criminal activity, Goodell decided to crack down. No longer was it enough that the criminal justice system had a process for punishing people who break the law, Goodell wanted the NFL to be seen to be layering on extra punishment.
I said from the very beginning that this policy was fraught with problems. If the NFL wanted a conduct policy, it should establish simple mechanical rules tied to outcomes in the justice system. For example, a rule that says that if convicted of a misdemeanor a player would get a standard X game suspension. Goodell's role should be limited to correcting the inevitable unfair situation where mechanical rules lead to poor outcomes.
But no, Goodell, like many smart people, fell into the trap of thinking he was smart enough to mete out punishments himself. This has led to a real mess. The public compares each punishment (and non-punishment) to all other such decisions and immediately get upset about perceived inconsistencies. Worse, having established the precedent of policing conduct, he is being pushed by various vocal constituencies to police even non-crimes, like unwelcome speech. On average day in sports talk radio, you are as likely to hear a discussion of Goodell's conduct rulings as you are about anything on the field.
In taking over Reddit, Ellen Pao is heading into the same technocratic trap. She has begun to ban certain forums and types of speech on the platform, but she has not established any consistent public rules for doing so other than her own judgement. She appears to be deleting things that offend her personally (and early mass deletions of content critical of herself personally seems a really bad way to start). And as with Goodell, two bad things are already happening (even beyond the more fundamental Reddit user issue that she is violating a core ethic of Reddit by censoring). First, she is being called out for lack of consistency with folks saying "how can you ban X and not Y." And second, she is apparently already getting pushed by various constituencies to be more and more aggressive at censoring certain classes of speech. Once she established herself as censor in chief, she became an immediate lobbying target for many, many groups, and that is going to just get worse. Just look at how much of Goodell's time is now sucked up into personal conduct issues.
Deborah Vollmer appears to be a nightmare neighbor in this story from the Washington Post (via Maggie's Farm). She is absolutely hell-bent on preventing her neighbor from doing anything to their house that she would not do to it. If her neighbor's aesthetics don't match hers, she takes them to court.
“Some people may question my motives,” Vollmer said. “But what’s happening in this town, these developers, tearing down old homes. I’m standing up for my rights. . . . And then this whole thing just kind of evolved” from that...
What could possibly be driving this woman? Friend and Chevy Chase resident John Fitzgerald said that her stubborn streak has roots deep in her past. Vollmer forged her career defending the rights of those without means. And that, he said, inculcated in her a desire to protect principles until the bitter end.
What right or principle is she fighting for? The right to micro-manage her neighbor's property. Read the article, this woman seems to be a total nightmare, all because she wants everyone else's house to look exactly like hers.
She should move to California. She would fit right in. She would be a perfect candidate to sit on the California Coastal Commission, for example.
We have a sort-of similar fight brewing here in Phoenix where a few local residents were trying to prevent another resident from tearing down and rebuilding his tired old house, which happened to have been designed by Frank Lloyd Wright's studios. I appreciate Mr. Wright's work, but also know he designed some unlivable crap. He was an artist, experimenting, and sometimes the experiments were not great. He was also a businessman, always short of money, and sometimes his projects did not get his full artistic attention. In my view, this was such a house.
I have the same answer for Ms. Vollmer that I do for those Wright house enthusiasts -- if you want to control a piece of property, buy it. If you don't have the money, encourage other people to chip in. But if you can't get enough people who similarly value your vision for the property to fund its acquisition, don't take the shortcut of using your influence with the government to impose the cost on taxpayers, or worse, on the individual property holder.
Just when we thought the absurdity that marks every single day of Obama's reign could not possibly be surpassed, we learned that 4 hours (3 hours and 47 minutes to be precise) after the US president vowed to sign a new law banning bulk data collection by the NSA (named, for purely grotesque reasons, the "USA Freedom Act"), the Obama administration asked the secret Fisa surveillance court to ignore a federal court that found bulk surveillance illegal and to once again grant the National Security Agency the power to collect the phone records of millions of Americans for six months.
Or, as the Guardian's Spencer Ackerman, who spotted this glaring page out of Josef Stalin's playbook, summarized it:
June 2, 6:03pm: Obama says he'll sign law banning bulk collection. June 2 9:50pm: DOJ asks secret court for 180 more days of bulk collection
— Spencer Ackerman (@attackerman) June 8, 2015
According to Ackerman, this latest travesty by the administration "suggests that the administration may not necessarily comply with any potential court order demanding that the collection stop."
Kevin Drum featured this really interesting Pew poll.
This is pretty amazing. Few European citizens support their country fulfilling its NATO treaty obligations to their neighbors, perhaps because most expect the US to do it for them.
The title of this post is my alternative to Politico's headline which reads, "Barack Obama poised to hike wages for millions." What is actually happening is that Obama is proposing to raise the threshold for how much money an employee can make before he or she can be considered exempt from overtime rules (and thus exempt from filling in a time sheet).
As early as this week, the Labor Department could propose a rule that would raise the current overtime threshold — $23,660 – to as much as $52,000, extending time and a half overtime pay to millions of American workers.
The Obama Administration and its supporters (and apparently Politico, by how they wrote the headline) are smoking something if they think employers are going to react by raising salaries of current exempt employees being paid 23,660 or 30,000 or 40,000 to $52,000. Absolutely no way. There may be a few just under the $52,000 threshold that get a bump, but that will be a minor effect.
Everyone else is going to suddenly find themselves converted from a junior manager back to a wage earner. Companies are not going to allow these newly minted wage earners to earn overtime, and so I suppose one good outcome is that we may see a new boost in productivity as companies find ways to automate or eliminate junior management tasks to get all these folks down to 40 hours a week.
Five years ago, I might have really been in a panic over this in my company, but fortunately our experience with Obamacare has given me confidence we'll figure it out. With Obamacare we were facing enormous costs which we (like many service and retail companies) managed to eliminate by converting almost all of our full-time employees to part-time. Compared to that effort, figuring out how to get all of our managers down to 40 hours seems like child's play.
As usual, most of the costs of this regulation will be born by workers. As with other minimum wage-type laws, some will be better off, actually getting the "raise" promised by Politico, while some will be worse off, dropped to straight 40-hour work which does not pay as well, or out of work entirely.
However, this law has an even bigger impact-- it changes the relationship between the worker and their employer. There are important differences between hourly and salaried work in the relationship with employers. Some are psychological -- for better or worse, management things of salaried workers differently than hourly workers. And some are real -- salaried workers can try to demonstrate that they are worthy of promotion by working extra hours and taking on extra tasks, things that hourly workers really can't do.
As a final note, I have to give the Coyote Academic Arrogance Award to Daniel Hamermesh of UT Austin who is quoted as follows:
“It’s hard to believe that somebody making $30,000 is a supervisor,”
He knows this, how? We have supervisors who do a fabulous job for $2500 a month and are happy to be making that.
But that is actually not the Hamermesh statement that I would rank most ignorant of reality. This is:
But Hamermesh said that to whatever extent employers reduced hours to avoid overtime the result would be more job creation, not less, since someone else must [be] hired to perform that work. Jared Bernstein, an economic adviser to Vice President Joe Biden during President Barack Obama’s first term, added that for many workers reduced hours would be a plus: “Their salary is the same but they have more time with their families.”
Are these guys for real? Employers are not going to give employees the same salary for fewer hours. They are going to try pay them less if they are getting fewer hours of work (of course their ability to do so depends on the labor supply). But the change is worse than this. They are not only getting fewer hours, but they are getting a different person and a different relationship. Before, say for a junior manager job, employers could get go-getters who worked 60 hours a week to impress management with their diligence and dedication, signaling they were ready for promotion. Now, employers will get time-clock punchers.
The last time we visited the formerly great state of Connecticut, Democrats were preparing to raise taxes again after promising not to when they ran for re-election in 2014. This week they did the deed, and the politicians seem shocked that the business community is in revolt.
The blue-state paragon’s two-year budget of $40.3 billion includes a $1.5 billion net increase in taxes and fees. The top marginal individual tax rate rises to 6.99% from 6.7%. But the biggest blow is making permanent a 20% surtax on a company’s annual tax liability—a tax on a tax—and for the first time taxing Connecticut companies on their world-wide income, rather than what they earn in the state.
The high marginal rates are bad enough, but it is an astonishing overreach to tax corporations headquartered in your state based on their worldwide income. This leads to a huge double taxation problem for any company dumb enough to stay. Paraphrasing Keith Richards, that is the equivalent of being told to leave the state.
I just encountered my second major piece of software used by Bank of America for my business accounts that will only work with Internet Explorer and most definitely will not work with Chrome. Their ACH/Treasury/Direct Payments system has to run on Internet Explorer (only) and now I find their secure email system that sends me all my merchant account notices does not work on Chrome and only works on IE.
I am just waiting for the moment that a Bank of America tech support person tells me I have to use Netscape.
The WSJ, like many other media sites, has a headline today that says "U.S. Suspects China in Huge Data Breach of Government Computers." Then, when you read the article, it says "Chinese hackers" or "hackers in China".
There is an enormous difference between saying China is responsible and saying hackers in China are responsible. The first would be a very serious affair, implying the Chinese government was engaged in hacking of US Government records. The latter is virtually meaningless. It simply means that the hackers happened to be Chinese. They could have easily been Russian or American.
The media claims to be largely pacifist, but has anyone else noticed that they sure seem to be trying to stir up Americans in some sort of anti-China fever of late?
