Coyote Blog

This post actually takes me back to the roots of this blog, roots that most new readers probably have not seen much of.  I originally started this blog as place to share my lessons learned in starting, running, and growing a small business.  I still do some of that, but not nearly as much as I would like.

My company has about 25 line managers who each run the operations for one recreation area (these are spread over 13 states).  I give these managers nearly complete P&L authority.  I set base labor rates and most fee levels, and we have a very clear management process everyone follows.  However, line managers have the responsibility to do all the hiring for their area, as well as most purchasing.   One issue that comes up a lot for us as we grow is how much we should centralize some of these functions for efficiency, most significantly HR and purchasing.  In general, I have resisted efforts to centralize.  Here is why.

Human Resources

Several of my competitors, even ones smaller than I am, have centralized their hiring functions.  They have one person (or more) at central HQ who does all the hiring for the company's operations.  My managers often come to me and say "wouldn't it be more efficient to do this hiring in one place?" 
I say no.  The reason is one of accountability.  I want my managers fully accountable for their operations, and poor-performance excuse #1 is always "well, we're struggling because you saddled us with some bad employees."  No one uses this excuse in my company.  If you have an employee that sucks, you hired him/her and you have to deal with it. 

What I did instead was centralize the Human Resource support for our managers, making their lives easier without relieving them of accountability.  So I invested in some new web sites that capture potential workers and drive them to an application database that collects 10 resumes a day  (I am results 1,3, 4 &8 on Google for camp host jobs and results 5, 6, & 7 for campground jobs).  Then I built a system where all my managers can access these resumes.  I also centralized the HR record keeping and payroll processing.

Purchasing

Centralized purchasing has been a harder impulse to resist, but I still do so.  We order a lot of the same supplies in our various locations, and with more and more stores, many of the same goods for resale.  But I still have my local managers buy most of that stuff for themselves.

Am I crazy?  Well, I would have thought so when I was in business school.  After all, its fairly easy to demonstrate that vendors will give better rates for larger orders, and surely it's inefficient from a labor standpoint to disperse purchasing and to duplicate efforts.

First and foremost, though, I am still a stickler for accountability.  Much of my thinking was shaped by Chuck Knight at Emerson Electric, who was nearly always willing to trade centralized cost savings for accountability.  I would much rather my managers have no excuses than save a few pennies on toilet paper purchases.

However, there are a few things we can do.  We are starting to build a shared supplier database, where managers can share particularly good supplier deals with their peers.  We also have centralized purchasing of uniforms and forms, but even here we have been burned.  In the past, we assigned this task to a central person, who eventually built up a huge warehouse of crap it has taken us years to clean out.  Though we don't get quite as good of a deal, we now have printing and uniform contracts with negotiated corporate rates based on our combined corporate usage, but where managers place their own orders and shipping is directly to the field (rather to a central location for reshipment).  Net, we saved thousands in labor, shipping, and inventory getting out of the central break-bulk business.

For our resale items, I get a lot of presure from individual store managers to let them do purchasing of so-and-so product for the whole company in order to get quantity discounts.   I have allowed this in a few cases, but it may cause more problems than it is worth.  I immediately started getting complaints from manager A that manager B was buying all the wrong stuff, or whatever.  Soon, the folks doing the central purchasing started demanding that they needed more and better information, and started asking for written inventory reports from various store managers each month.  Eek! 

I think instead that I am going to mostly stick with the approach of negotiating corporate deals, and having local managers continue to do their own ordering using these deals.  I also work hard to make sure managers understand that in most cases the corporate negotiated products are optional, and that they may buy other products if they think those are better for their locations (I can guarantee that visitors in Northern California, Nogales Arizona, and Central Florida want different things).

I have written numerous times about how most anti-trust actions are initiated for the benefit not of consumers but of industry competitors.  The incredible claim that Microsoft's giving away free applications with its OS somehow hurts consumers is just the most famous such example. 

Now we face the specter of anti-trust review of the XM-Sirius satellite radio deal.  All you need to know is that the National Association of Broadcasters, who represent the terrestrial competitors of satellite radio, are lobbying hard for the deal to be rejected.  Nearly every line of the statement is hilarious, but this one caught me:

When
the FCC authorized satellite radio, it specifically found that
the public
would be served best by two competitive nationwide systems. Now,

with  their stock prices at rock bottom and their business model in
disarray
because of profligate spending practices, they seek a government

bail-out to avoid competing in the marketplace.

First, I am sure that the NAB is deeply, deeply concerned about satellite radio serving the public well -- NOT.  Customers gained by satellite radio are customers lost by the NAB**.  In fact, if they really believed the merger would hurt the consumer experience with satellite radio, their statement would instead be "we are thrilled by this merger because it means that customers will be served poorly in the future by the new company and that means customers will defect back to us."

Second, I love the term "government bailout."  What they mean by government bailout is the prospect that the government might not block this merger.  Which, given the white-hot merger activity between NAB members over the past 5 years, means that most NAB members have received the same "bailout."

(HT: Hit and Run)

** In the TV market, terrestrial broadcasters, particularly their local affiliates, got the government to cover their butts by passing a "Must Carry" law, which basically requires that cable companies have to include all the local broadcasters in their feed.  In practice, this and similar laws have forced satellite providers to give you your network feed only through your local affiliate.  This means that instead of DirecTV being able to just give me the NBC national feed, they have to give me the NBC Phoenix affiliate.  As a result, DirecTV has whole satellites that carry forty, fifty, sixty or more identical feeds.  What a screaming waste, and it only gets worse with HDTV.  Anyway, in radio, there is no similar law, so satellite growth is more of a zero-sum loss for terrestrial competitors.  I think the NAB is just huffy they did not get their own must-carry subsidy law passed.

As most people know, the NFL doesn't want you to use the word "Superbowl" when hosting a party, sale, event, etc, and they aggressively enforce their trademark on this term.  In response, since all the country does in fact have parties, sales, events, etc. associated with the Superbowl, folks have adopted the euphemism 'the big game" in their communications. 

I observed that this not only pointed out some of the silliness in our intellectual property laws, but also was counter-productive for the NFL -- shouldn't they want people talking about and holding events for the Superbowl?  I suggested a simple licensing program that would raise a little money and probably work better for everyone:

The NFL needs to offer a one time use license each year for a bar or
other establishment to hold a Superbowl party and actually use
Superbowl in the promotion.  The license would of course be
non-exclusive, and would carry a myriad of restrictions on how you use
the name, etc.   The license could be purchased for a price that would
be cheap for a business, maybe $200, and could be purchased right over
the web.  It would actually be easier, I think, to go after violators
because the NFL could point to the existence of a legal licensing
program the violator could easily have participated in.  I would think
they could easily bring in a couple of million dollars, not to mention
saving them enforcement money and PR headaches.

The NFL has decided to go in a different direction.  It is trying to trademark the term "the big game" so that term can't be used either (HT Overlawyered).  I particularly liked this from the application:

Disclaimer NO CLAIM IS MADE TO THE EXCLUSIVE RIGHT TO USE "GAME" APART FROM THE MARK AS SHOWN

Jeez, why not?  Who at the NFL is sleeping on the job here?

Well, that's what I get as a libertarian for trying to work within the system to make things incrementally better rather than going on one of my usual idealistic rants.  So I officially withdraw my previous suggestion in favor of a new one:  Trademarks should, at most, only give one the protection from someone else labeling a similar product with the trademarked name.  By trademarking Jif, P&G gets protection from another company selling peanut butter under the same name in the US.  However, any other use of Jif in communication should be entirely legal.  If I communicate to people that I am having Jif party, that communication is protected under the first amendment and P&G can't shut down my party.  If I want to put out a poster and sell it with Jif peanut butter labels and how they have changed over the past 100 years, I should have the right to do so.   Ditto if I want to print bumper stickers that say "Jif sucks."

Similarly, the NFL can be legally protected from having another group host a football game (and if I am in a generous mood, maybe any type of sporting event) and calling it the Superbowl.  And that is it.  They should not be granted an exclusive government monopoly to use the word Superbowl, or more ludicrously, "the big game":

posters, calendars, trading cards, series
of non-fiction books relating to football; magazines relating to
football, newsletters relating to football,notepads, stickers, bumper
stickers, paper pennants; greeting cards; printed tickets to sports
games and events; pens and pencils, note paper, wrapping paper, paper
table cloths, paper napkins, printed paper party invitations, paper
gift cards; paper party decorations, collectible cards; collectible
card and memorabilia holders, souvenir programs for sports events,...toys and sporting goods, namely, plush toys, stuffed toy
animals, play figures, golf balls, footballs, sport balls, toy banks,
playing cards, Christmas tree ornaments...Men's, women's and children's apparel, namely T-shirts, fleece tops, caps, headwear

And don't even get me started on Pat Riley's "Threepeat."

For several years, I have been wondering why punitive damage awards like this one, that punish a company for various misdeeds, don't create a double jeapardy situation where defendents must pay over and over for the same "crime" (since the next individual suing also gets punitive damages).

Here's the problem:  A jury in Texas already hit Merck with $259
million in punitive damages*.  This number was based on a lot of
testimony about Merck's sales and profits from Vioxx, so it was
presumably aimed at punishing Merck for "errors" in their whole Vioxx
program.  So if that is the case, how can Merck end up facing a jury
again coming up with a separate punitive damage award for the same
"crime"?  Sure, it makes sense that Merck can owe actual damages to
individual claimants in trial after trial.  But how can they owe
punitive damages for the whole Vioxx program over and over again?
Aren't they being punished over and over for the same misdeed,
violating their Constitutional protection against double jeopardy?

In the recent Supreme Court decision involving a judgment against Philip Morris, the SCOTUS didn't really take this issue on, but did take on a related issue, arguing that punitive damage awards that take into account damages against more than just the defendant violate due process, since these other damages were not tried on the facts in that case.

Today, in a decision involving an astonishing $79.5 million punitive
damage award to the widow of an Oregon man who died of lung cancer
after smoking Marlboros for 42 years, the U.S. Supreme Court ruled
that a jury in a civil case may not punish a defendant for harm to
people who are not parties to the case. To do so, the five-justice
majority said,
violates the defendant's right to due process because he cannot defend
against hypothetical damage claims by people who are not involved in
the lawsuit. Furthermore, the Court said, "to permit punishment for
injuring a nonparty victim would add a near standardless dimension to
the punitive damages equation." Although this makes sense to me, the
Court's proposed solution"”that juries may consider harm to nonparties
in judging the "reprehensibility" of a defendant's conduct but not to
"punish a defendant directly" for that harm"”seems untenable.

Tom Kirkendall has an update on the various Enron cases, starting with the Nigerian barge case where  the conviction of four Merrill Lynch executives was vacated by the Fifth Circuit.  In fact, the appeals court ruling was so damning that the DOJ has decided not to retry the executives, and the case may well be a leading indicator that other Enron-related prosecutions are in jeopardy.

Although expected, the DOJ's decision in the Nigerian Barge case
reverberates through several other pending Enron-related cases. The DOJ
can retry three of the four former Merrill Lynch executives, but that
would be petty by even the DOJ's standards given the eviscerated nature
of the original charges and the fact that each of the defendants has
already spent a year of their lives in prison based on a prosecution
that was based more on resentment than on true criminal conduct. The
Fifth Circuit's now final decision in the barge case casts doubt (see also here) on a substantial number of the charges upon which former Enron CEO Jeff Skilling was convicted, and dispositively blows away over 80% of the case against former Enron Broadband executive Kevin Howard. In addition, the re-trials of Howard's former co-defendants from the disaster that was the first Enron Broadband case are now in various states of disarray, as is the pressured plea deal of former mid-level Enron executive, Chris Calger. And don't forget the mess that is the DOJ's case against the NatWest Three (see also here).

First, Mississippi regulated flood insurance rates down to a level that it was impossible to make money, so State Farm's property coverage on the coast did not cover flood/storm damage.  Then, after Katrina, Dickie Scruggs and company sued State Farm, and others, forcing them to cover storm damage from Katrina that their policies explicitly did not cover and were not priced to cover.  So, facing a state government that, by fiat, forces their fees lower and their coverage higher, State Farm is trying to exit the property insurance business in Mississippi, and the state legislature is considering legislation to prevent them from leaving.

Mississippi Attorney General Jim Hood said Friday he will seek
legislation aimed at blocking State Farm Insurance Cos. from refusing
to write new homeowners and commercial policies in the
hurricane-battered state.

Hood's plan would require any company
that writes automobile insurance in Mississippi and also writes
homeowners policies in other states to offer homeowners and commercial
properties throughout Mississippi....

Hood also said he his urging Gov. Haley Barbour to issue an executive
order that would force the insurer to continue writing new policies
until the Mississippi Legislature can deal with the issue.

Quoting from directive 10-289 (Atlas Shrugged):

Point Two: All industrial, commercial, manufacturing, and business
establishments of any nature whatsoever shall henceforth remain in
operation, and the owners of such establishments shall not quit, nor
leave, nor retire, nor close, sell or transfer their business, under
penalty of the nationalization of their establishment and of any or all
their property.

So I ask you, is the following statement ridiculous  over-the-top regulator-speak from Atlas Shrugged, or was it actually made by a US state AG?

"We're looking at a robber baron in the face that is trying to make an example of Mississippi," Hood said of State Farm.

OK, so lets see:  The state government decides what rates you can charge.  The state government decides what your policy has to cover.  The state government decides if you will be allowed to go out of business.  But State Farm is the robber baron.  LOL.

Hat tip:  Tom Kirkendall

The Bush administration is in the unenviable but not historically unprecedented position of not really being able to accomplish much of anything over the next two years.  Bush's credibility is such that a solid majority in Congress may oppose any plan he suggests, just because he suggested it.  Also, it is unlikely that any third-rail-type reforms will be considered in a presidential election cycle.  And I am generally OK with government legislative inaction.  In fact, it would be great if the Democrats chose to pursue impeachment hearings, not because Bush is any more or less a lying sack of shit than other politicians, but because it would divert Congress onto an enforced lassaiz faire path on every other issue.

However, one thing Bush could productively accomplish is to open up relations with Cuba.  If we are ready to pull out of Iraq after five years, even at the cost of being seen as "losing," we should be ready to reconsider our cold war with Cuba after over 46 years.  After all, our cold war with Russia, if dated from the end of WWII, only lasted 44 years.  We trade freely with communist China, and even with communist Vietnam, despite the fact that we were in a shooting war with them more recently than the Castro takeover.  And what have we accomplished?  Cuba is nowhere close to an anti-communist revolution, and its people suffer.  In fact, I think the embargo on Cuba, by turning Cuba's attention away from its natural trading partner the US, causes it to look for allies in places like Venezuela.

I think history has proven time and time again the power of open commerce and interchange in bringing closed, unfree societies into the modern age.  I can't for the life of me figure out why we still pursue the proven-pointless embargoes against Cuba except:

• The sugar lobby like it that way
• The Cuban expat community, operating on wounded latin pride, have stubbornly made it clear that anyone who suggests opening up to Cuba will lose the typically tight vote for Florida's key electoral votes.

With GWB's lame-duckracy and his brother moving on from the Florida governor's mansion, no Bush has to run for election in Florida again. With Castro's death (I'm not dead yet - yes you are, you'll be stone dead in a moment) the anti-Castro movement in the expat community loses focus, and might be reshaped into what it should be, that is pro-Cuba rather than anti-Castro.  I think these two stars are lining up to provide a unique opportunity to do something about Cuba, and in fact might be a useful step in counterpoint to Hugo Chavez's recent actions. 

I took my daughter on a day trip to Magic Mountain, one of the better parks around for roller coasters (it's it still not Cedar Point, IMHO, though if you like inversions, Magic Mountain is the place).  We went on Friday because she had a special day off from school, and there was no one at the park.  In the first 30 minutes, we rode several of the top coasters all alone.  The only problem is that I am more used to getting a bit of a break between rides, waiting in line and such.  Anyway, we had a blast.

For those not up on their amusement park trivia, Magic Mountain was "Wallyworld" in the movie Vacation and is home to the first ever looping rollercoaster, the Revolution, which was featured in the movie Rollercoaster.  Since that first inversion, coaster designers have gone nuts.  The first roller coaster we rode on Friday, called Scream, had seven inversions in one ride.  It was also cool because it had no car.  When we were in the front, we were just strapped into chairs with nothing around us but the track below our feet - really cool.  Picture being the front guys in this photo. Through the day, we probably survived 50 inversions. 

Coaster designers have really gotten creative.  We rode sitting, standing, and lying on our stomach (what is called a flying roller coaster, you are sort of in the same position as in a hang-glider).  We rode on top of the track and hanging from the track.  One of the challenges of ride designers is to push the gees, both positive and negative, without making it downright painful.  Millennium Force at Sandusky Park is rightly considered perhaps the best roller coaster in the world because it plays with the gees without torturing you (the negative-G hills are great).  I thought several of the rides at Magic Mountain went over the line, in particular the Batman hanging coaster and the Tatsu flying coaster, when there were a few turns when I thought my head was going to explode.  Overall, we liked Scream the best - smooth, fun, scary without being painful.

Update: I said Millennium Force is the best coaster out there.  This one, also at Cedar Point, which I have not ridden, is the most elemental --  No  subtlety here  (go to the POV gallery on the right and watch the video).

I saw this e-ink screen technology on a Sony e-book reader at Fry's Electronics the other day.  It is gorgeous.  Give me one of these with Linux and a web browser, and it will be very close to the device I have been looking for (something like the form factor of a Nokia 770 and the capability of the small sony handeld computer)

Steven Pearlstein has a column on the American health care system based on a recent study by the McKinsey Global Institute.  As Mr. Pearlstein reads it, the problem with the American medical system is all about the profit - it's all about the doctor profit stacked on the drug profit stacked on the insurance profit.  If the government would just take over and get rid of all that profit, the system would run smoothly and be much cheaper.  I am flabbergasted that anyone at Cato would remark on such an article with approval.

First, while I worked at McKinsey & Co, I never worked for the global institute.  However, though I have not yet read the study, it would be unusual to the point of uniqueness if their recommendation for the industry was more government control and less profit motive, but I guess it is possible.  More likely, Mr. Pearlstein is reading the study through his own progressive lens.  Anyway, let me deal with a few parts of the article:

Even after adjusting for wealth, population mix and higher levels of
some diseases, McKinsey calculated that we spend $477 billion a year
more on health care than would be expected if the United States fit the
spending pattern of 13 other advanced countries. That staggering waste
of money works out to 3.6 percent of the nation's entire economic
output, or $1,645 per person, every year.

I will agree that for a variety of reasons, there is a lot of waste in the medical system.  We will get to "why" in a minute.  However, note that the author is taking a leap from "we spend more per capita than Europeans" to "staggering waste."  The US spends more per capita on a lot of things than the Europeans, in large part because we are wealthier (by a lot, and more every day).  One man's waste is another man's preference.  However, I would agree that health care is unique, in that it is the one industry where the decision maker(s) on whether to purchase a service is not the same person who is paying the bills.  I think we will find, though, that I and Mr. Pearlstein differ on who the person should be who should do both simultaneously (I say each person for himself, he says Nancy Pelosi and George Bush for everyone).

But let's get into all that money-grubbing.  Mr. Pearlstein reads the study as saying the problem is all that profit.  Because we have layers of profit in the distribution channel, our health care costs more than it does in Europe, where you have the efficiency [sic!] of government management.  Before we get into detail, I would observe that this fails a pretty basic smell test right off:  Nearly every single product and service we Americans buy, all of which are rife with layers of nasty profits in the supply chain, are cheaper than their counterpart services and products in Europe.  If this layering of profit without government management is a problem, why is it only a problem in health care but not a problem in thousands of other industries.  But anyway, to details:

Let's start with one the American Medical Association hopes no one
will notice, which is that American doctors make a lot more money than
doctors elsewhere -- roughly twice as much. The average incomes of
$274,000 for specialists and $173,000 for general practitioners are,
respectively, 6.6 and 4.2 times those of the average patient. The rate
in the other countries is 4 and 3.2.

According to McKinsey, the
difference works out to $58 billion a year. What drives it is not how
much doctors charge per procedure, but how many procedures they perform
and how many patients they see -- a volume of business 60 percent
higher here than elsewhere.

Ooh, those greedy doctors.  They are the problem!  But read carefully, especially the last sentence.  He makes clear doctors in the US are not making more because they charge more, they make more because they see more patients --- ie, they work harder than their European counterparts.  Where have I heard this before?  Again, in every other industry you can name, the fact that our workers work harder than their European counterparts is a good thing, leading to lower costs and higher productivity.  So why is it suddenly bad in medicine?  For this I would instead draw the conclusion that their are perhaps too many procedures (an expected outcome of the screwy incentives in the system) and thus too many doctors.  Doctors, whom Mr. Pearlstein paints as enemy number one in the health care system, are actually its greatest asset, being 60% more productive than their European counterparts, certainly something to build on.

Don't be distracted by arguments that American doctors need to make
more because they have to pay $20 billion a year in malpractice
insurance premiums forced on them by a hostile legal system, or an
equal amount for all the paperwork required by our private insurance
system. The $58 billion in what the study defines as excess physician
income is calculated after those expenses are paid.

Walter Olson, are you listening?  Since Walter is not here, I will say it for him.  Malpractice insurance premiums themselves are only a part of the cost of runaway malpractice.  Defensive medicine, including the overuse of tests, is another big cost.  Malpractice is one big reason doctors prescribe so many more tests and procedures than their European peers.

Proponents of a government-run "single-payer" system will certainly
home in on the $84 billion a year that McKinsey found that Americans
spend to administer the private sector portion of its health system --
a cost that national health plans largely avoid. But as long as
Americans continue to reject a government-run health system, a private
system will require something close to the $30 billion a year in
after-tax profits earned by health insurance companies. What may not be
necessary, McKinsey suggests, is the $32 billion that the industry
spends each year on marketing and figuring out the premium for each
individual or group customer in each state. Insurance-market reform
could eliminate much of that expense.

What freaking planet does this guy live on?  Does he really think administrative costs are going to go down in a single payer system?  That's insane.  I am willing to believe that the number of procedures will go way down, as Congress starts to ration care in favor of building bridges for their constituents  (a savings likely offset as America's world-leading doctor productivity discussed above takes a nosedive).  Does he really think that administrative costs will go down?  Most administrative costs today are for satisfying government paperwork requirements - how is having the government run everything going to reduce these?   I would argue exactly the opposite -- that eliminating government from the equation would reduce private administrative costs substantially.

I won't bore you with any more, but he doesn't miss the chance to blame health care costs on drug and hospital company profits as well.  Just for entertainment value, I urge the reader to look up a few P&L's of some of these companies.  The profit as a percent of sales for Humana is 2.3% of sales.  So if you wiped out all that egregious profit at Humana, you would save all its customers a whopping 2.3% (before, of course, the incentives problems take over and costs bloat for the lack of a profit incentive to manage them). Insurer CIGNA's profit is a bit under 10%.   Merck's profit is a more comfortable 19% of sales, which means that by cutting their profit to zero we could get nearly a 20% discount on drugs.  Of course, new drug development would cease, but the AARP doesn't care about drugs that won't be on the market after their current constituency is dead.

Isn't it more reasonable, as I am sure the McKinsey study actually concludes, that the problem is not in companies making profits or doctors working hard, it is in having a health care system, built the way it is through distortive tax law, that gives neither patient nor doctor any reason to consider costs when deciding on care?  Can you imagine such a screwed up system in any other industry?  How inefficient would retail be in the US, for example, if we all had a "shopping policy" that paid for all our purchases.  Would you give a crap about the price of anything?  Would you hesitate one second buying something you may not need but is covered by your "policy"?

Mr. Pearlstein sortof agrees, but its hard to find this incentives point in the middle of all his blame-it-on-the-profits progressive rhetoric.  Here is our one hint that Mr. Pearlstein understands that the true problem is this mismatch between payer and decision-maker.  Unfortunately (emphasis added) he has a really destructive perspective on the issue:

What we have here is pretty good circumstantial evidence of
Pearlstein's First Law of Health Economics, which holds that if you pay
doctors on the basis of how many procedures they do, and you leave it
to doctors and their insured patients to decide how much health care
they get, consumption of health services will rise to whatever level is
necessary for doctors to earn as much as the lawyers who sue them.

Mr. medico-fascist Pearlstein thinks the big system problem is leaving it to you, the patient, to decide what health care you get.  The solution for him is to have the person spending the money, preferably the US Congress, decide how much health care you get.  I think a much saner solution, and the only one consistent with a free society, is to get back to a system where the same person who gets the care, pays for the care.  If its a good enough system for 9,999 things we purchase each year, its good enough for health care too.

A cool animated map showing the ebb and flow of empires in the Middle East.  Like watching a Civilization game replay at high speed.

Hat tip:  Mises

Harvard has a new president.  Good freaking luck.  That job chewed up someone I respected (Neal Rudenstine) and someone who tried to reform the institution (Larry Sommers).  I would rather try to bring good government to Haiti than try to run that dysfunctional organization in Cambridge.  Premiers of the Soviet Union had less power than the Harvard faculty wields.  I am one of many Harvard graduate students I know who appreciate the education we got but hate the institution.  My Princeton roomie Brink Lindsey helped start the NOPE campaign - Not One Penny Ever (to Harvard).

If you want a taste of why, below the fold I have included an excerpt of a chapter from my book BMOC (still at Amazon for those who have not used up their Christmas gift certificates yet).  This chapter is pretty autobiographical, except for the part where the character is, you know, a girl.

From the end of Chapter 8 of BMOC:

Susan looked around her small apartment in the nightmare that was the Peabody Terrace apartments, a pair of Harvard-owned hi-rise apartments located across the river from the business school.  Susan was convinced that these apartments were part of a 1950's Soviet plot to undermine America's youth.  The building design was right out of East Berlin, with its all cast concrete construction.  Even the interior walls were concrete, giving it the warmth and ambiance of a World War II German pillbox.  Her tower had an elevator, but it only stopped on every third floor, a cost saving measure also borrowed from the East Germans.  Of course, her floor was not one of the stops.  

She had dithered about whether even to apply to Harvard, and had applied in the last application group, after most of the spots in the school had already been filled.  She was not actually accepted into the school until well into June, leaving her just about dead last in the housing lottery.  Only a few foreign students from strange, lesser developed countries she had barely heard of were so far back in the room queue, which helped to explain why her entryway was always choked with the smell of bizarre foods cooking using unfamiliar spices.  Her walk to and from school involved crossing a lonely and poorly lighted footbridge, which was, coincidently, the coldest spot in New England on most winter days.

Whenever she walked into her building, she had difficulty fighting off a sense of despair and loneliness, even despite her generally sunny disposition.  The building was that depressing.  To make matters worse, she had spent most of the winter fighting with the Harvard administrative departments over the temperature in her room. She had complained nearly every day about the cold, and knew things were bad when frost started to form on the inside of her windows.  A worker from building services had finally come by, but instead of a toolbox he brought a thermometer, which he placed in the center of the room and just stared at for five minutes.  Then he picked it up, looked at it, and declared that the room was fine.

"Fine?" she had screamed.  "How can it be fine?  It's freezing in here!"

"Mam, the thermometer says 54 degrees.  State law says we don't have to do anything unless it falls below 50 degrees," observed the housing guy.

"State law?!  Who gives a shit about state law?  What about customer service?  What about the sixty grand I pay to this university?"

But she had gotten nowhere, at least until she started putting the oven on broil with the door open to try to keep the room warm.  Once the building services folks saw that, with all the implicit fire and liability dangers, her radiator had finally been fixed.

Looking around the cold and depressing room, she decided she definitely did not want to be here now.  She wanted to celebrate her new job, not stare at four bare condensate-dampened concrete walls.

Short version: avoid Vista.  Longer version:  I wrote previously about Vista writing a new chapter in fair use: 

Because, having killed fair use for multiple copies, believe it or
not, the media companies are attempting to kill fair use even for the
original media by the original buyer!  I know this sounds crazy, but in
Windows Vista, media companies are given the opportunity to, in
software, study your system, and if they feel that your system is not
secure enough, they can downgrade the quality of the media you
purchased or simply refuse to have it play.  In other words, you may
buy an HD DVD and find that the media refuses to play on your system,
not because you tried to copy it, but because it feels like your system
*might* be too open.  The burden of proof is effect on the user to prove to the media companies that their system is piracy-proof before the media they paid for will play...

Back to the book
analogy, it's as if the book will not open and let itself be read unless
you can prove to the publisher that you are keeping the book in a
locked room so no one else will ever read it.  And it is Microsoft who
has enabled this, by providing the the tools to do so in their
operating system.  Remember the fallout from Sony putting spyware, err copy protection, in their CD's -- turns out that that event was just a dress rehearsal for Windows Vista.

Via Instapundit, Bruce Schneier concurs:

Windows Vista includes an array of "features" that you don't want.
These features will make your computer less reliable and less secure.
They'll make your computer less stable and run slower. They will cause
technical support problems. They may even require you to upgrade some
of your peripheral hardware and existing software. And these features
won't do anything useful. In fact, they're working against you. They're
digital rights management (DRM) features built into Vista at the behest
of the entertainment industry.

And you don't get to refuse them.

The details are pretty geeky, but basically

Microsoft

has reworked a lot of the core operating system to add copy protection
technology for new media formats like HD-DVD and Blu-ray disks. Certain
high-quality output paths--audio and video--are reserved for protected
peripheral devices. Sometimes output quality is artificially degraded;
sometimes output is prevented entirely. And Vista continuously spends
CPU time monitoring itself, trying to figure out if you're doing
something that it thinks you shouldn't. If it does, it limits
functionality and in extreme cases restarts just the video subsystem.
We still don't know the exact details of all this, and how far-reaching
it is, but it doesn't look good....

Unfortunately, we users are caught in the crossfire. We are not only
stuck with DRM systems that interfere with our legitimate fair-use
rights for the content we buy, we're stuck with DRM systems that
interfere with all of our computer use--even the uses that have nothing
to do with copyright....

In the meantime, the only advice I can offer you is to not upgrade
to Vista.

We have about 50 computers in the company and I have banned everyone from upgrading to Vista.  I have studied Vista and there is nothing there that helps my business, and a lot that hurts it (e.g. higher initial price and much higher system requirements.)  If we upgraded, we might have to replace half our old ink jet printers just because the manufacturers are really unlikely to write Vista drivers for them.  We have 4 Dell's in the closet with XP loaded.  After those are used up, I will build all the future computers myself.  I have several OEM copies of XP on the shelf (less than 1/2 price of the Vista retail upgrade) and I will buy more if it looks like they are going to stop selling it.  I would switch everyone to Linux, except most of my employees are not very computer savvy and its just too hard to get them all trained.  I will probably only buy Vista for one box, which is my gaming machine at home, and even that is at least a year away before anyone has a killer DirectX 10 game I have to have.

Via Volokh:

Richard Branson is offering a $25 million prize for the development of a technology capable of removing carbon dioxide from the atmosphere.

I Win!

OK, I get that he is actually looking for some solar-powered device that plates out carbon from the air on a cathode, or whatever.  Or maybe a big nuclear-powered Air Products plant pumping liquid CO2 down an old oil well. 

By the way, I wonder if it will occur to anyone that if you really want to offset carbon, you probably need to clear cut old growth forests, bury the logs, and plant new trees.  I would guess that a newly growing forest absorbs a lot more CO2 than old-growth redwoods (anyone know?)  And no, I am not really suggesting it.  I got in enough email hot water a year ago when I suggested that if global warming was really to become a problem, we could reverse it pretty quickly with about 30 man-made Krakatoa's, made from the creative use of some of those H-bombs still lying around.  Maybe we could even use them to dig a new canal across Nicaragua, killing two birds with one stone.

Anyway, I like Branson's idea.  This kind of price approach has yielded some interesting results in other fields.

Google is a private company and can have whatever rules it wants for taking down videos at YouTube.  However, I finally watched the banned "anti-Muslim" video and boy was it a letdown, more so even than finally seeing the Mohammad cartoons.  It's literally a 9-1/2 minute video of music playing over text quotes from the Koran.  Period.  No voice over, no criticism.  Just the Koran in its own words, so to speak.  As I said, Google can do as it pleases with its posting policies, but it really looks like an ass for banning a user over this.  Particularly if it is true that similar videos profiling other religions in similar ways did not trigger a ban.

I would like to help Google by suggesting terms of use that are consistent and easily understandable and appear to reflect their current policies:

No video may be posted on YouTube that might result in a Middle Eastern man showing up at our headquarters building with a couple of pounds of C-4 strapped to his chest.

The Jawa Report links a pretty fun episode of Bullshit! that takes a poke at the environmental movement.  Don't expect to get a lot of new facts, but it is funny, particularly the classic "Ban di-hydrogen monoxide" petition.  But the real thing I took away from the video was just how anti-capitalistic the environmental movement is.  Listen to the slogans -- its much more about "anti-corporate greed" than anything about the, you know, environment.  Listen carefully for the part where environmentalists take personal responsibility for using computers and cars that the evil corporations produce.  That admission comes right after Teller's dialog.

I like reading about the history of science, and one of its more famous chapters is the debate between the Neptunists and the Vulcanists in early 19th century Great Britain.  At the risk of oversimplifying, the debate was over whether the earth's features (and life on it) were formed slowly over long periods, or relatively quickly through catastrophes.  Secondarily, it was about heat and fire vs. water as forces shaping the Earth (thus the names).  Eventually a consensus  (an actual consensus, not a declared one) developed that they were both right in some ways and both wrong in others. 

What struck me reading about this again over the weekend was that it took decades, and sometimes centuries, for this to sort out.  Take the part of this debate over extinction.  The initial consensus was that extinction was due to catastrophes, ala the Biblical flood.  Then Darwin came along and shifted the consensus away from catastrophes, showing that extinctions occurred in the normal order of species action-reaction to threats and opportunities.  And then in the 20th century, revisiting the K-T geologic layer we have come around to dinosaur extinction being catastrophic as a result of a big meteor.  Except nowadays there are scientists who think this is too simplistic.  Geology, in turn, made it all the way until the 1960's before anyone was even talking about plate tectonics, something that was still being derided in the 1970's but is fundamental to our understanding of numerous aspects of the earth today.

And so it goes in normal scientific inquiry.   Scientists expect it to take decades and generations to really shake out new theories and areas of inquiry.  Sometimes, as with Newton's laws of motion, we still accept the theory, though even here we have tweaked at the edges (e.g. relativity when things are moving fast) and exempted certain regions (e.g. quantum mechanics and the very small).  Other times, we have thrown theories that were cherished for decades completely away (e.g phlogistan).   After decades of work, string theory in physics could easily be thrown out completely and looked upon as the 20th century's phlogistan, or it could really be the theory of everything Einstein searched for in vain.

Which is all fine and expected, except when governments are standing by to make trillion-dollar choices, as they are in global warming, a scientific body of inquiry that is barely 20 years old.  Go back to any new scientific theory in its first 20-years, and think about the governments of the world betting the entire global economy on scientific understanding of that theory at that point in time.  It's pretty scary.  We'd probably have a 5-trillion dollar government controlled medical leach industry.

Q&O has a nice roundup on the science around the Sun and the Sun's well documented increase in intensity and its potential affect on global warming.  As I have mentioned before, there is a growing body of evidence that some warming has to be laid at the Sun's doorstep.

The best measurements of global air temperatures come from American
weather satellites, and they show wobbles but no overall change since
1999.

That levelling off is just what is expected by the chief
rival hypothesis, which says that the sun drives climate changes more
emphatically than greenhouse gases do. After becoming much more active
during the 20th century, the sun now stands at a high but roughly level
state of activity. Solar physicists warn of possible global cooling,
should the sun revert to the lazier mood it was in during the Little
Ice Age 300 years ago.

Climate history and related archeology
give solid support to the solar hypothesis. The 20th-century episode,
or Modern Warming, was just the latest in a long string of similar
events produced by a hyperactive sun, of which the last was the
Medieval Warming.

There is a lot more.  I am not ready to say, though, that the substantial increases we have seen in atmospheric CO2 levels are not also having an impact.  That impact is just a lot less than warming-panic-spreaders like Al Gore would like to acknowledge  After all, it is much easier to demagogue your way through an election beating up Exxon and GM than by beating up the Sun.  And, after failing to take over the economy under the banner of socialism, statists want to use global warming to take a second shot at world domination. 

Why the CO2 contribution to warming exists but is greatly overstated is explained here.

The EU has an odd definition of the term "free trade."  Apparently, low taxes, in the EU's world, are irreconcilable with free trade.

In a move that is both remarkable and disturbing, the European
Commission plans to file a complaint - and threaten protectionist trade
barriers - because attractive Swiss tax policies are supposedly a
violation of a free-trade accord. The bureaucrats in Brussels are not
arguing that Switzerland is imposing barriers against EU products.
Instead, the Commission actually is taking the position that low taxes
are attracting businesses that might otherwise operate in high-tax
nations. The implications of this radical assertion are
breathtaking. It certainly is true that a nation with more
laissez-faire policy will attract economic activity from neighbors with
more burdensome levels of government. But if this migration of jobs and
investment is a "distortion" or trade, then the only "solution" is
complete and total harmonization of all taxes (and regulations,
spending, etc). If the Euro-crats succeed with this argument at the
European level, it will be just a matter of time before similar cases
are filed at the World Trade Organization.

New SEC rules being drafted by the Bush administration are set to declare that Paris Hilton is a fully "accredited investor" with full freedom to invest in any way she likes.  I, who graduated near the top of my class at Harvard Business School, shall likewise be declared not capable of investing and the government will limit my options "for my own good"

The U.S. Securities and Exchange Commission (SEC) has just proposed
that the amount of liquid net worth an individual must have before
investing in hedge funds and other so-called risky investments be
raised to as much as $2.5 million.

The largest program the government has for protecting us from our own investing incompetence is called Social Security, which takes retirement savings from us by force and has the government invest it for us.   As I showed in previous posts, Social Security is returning -0.8% a year on our savings.  Thank god the government is investing this money for us - no way I could have beaten a -0.8% a year return during the greatest 20-year bull market of all time.

Tinfoil Hat Observation:  I use Google search to find old posts on my site.  Usually it is flawless.  For some reason, though, my post titled Social Security Ripoff is not indexed by Google.  A follow-up post on the same day is indexed, as you can see from this search, but not the original.  I have never failed to pull up a post before, even with inexact search words, and have never failed with the exact title in the search.  Weird.   Maybe something in the comments, I will have to check.

It is always worth reinforcing this distinction, Via Cato-at-Liberty:

Representatives of the business community frequently are the worst
enemies of freedom. They often seek special subsidies and handouts, and
commonly conspire with politicians to thwart competition (conveniently,
they want competition among their suppliers, just not for their own
products). Fortunately, most business organizations still tend to be -
on balance - supporters of limited government. But as the Wall Street Journal notes, some state and local chambers of commerce have become relentless enemies of good policy

I'm not sure this one even needs comment, via Tom Kirkendall

A volunteer waitress and a widowed great-grandmother who tends bar at
the Lake Elsinore Elks Lodge are due in court later this month after
pleading not guilty to misdemeanor charges of operating an illegal
gambling operation.

Margaret Hamblin, 73, and 39-year-old Cari Gardner, who donates her
time as a waitress at the lodge, face up to one year in jail and a
$5,000 fine for allegedly running a $50 football pool [ed: yes, fifty whole dollars] at the facility,
the Press-Enterprise reported.

The charges stem from a Nov. 20 investigation by state Department of
Alcoholic Beverage Control agents into an anonymous tip that lodge
members bet on NFL games.

Behind the bar, the armed agents found an envelope with $5 from each
of the 10 members taking part in the pool. The person who came closest
to guessing the combined score of the Jacksonville Jaguars and the New
York Giants was to pocket the contents, according to the
Press-Enterprise.

"It was just regular 'Monday Night Football,' " said Hamblin, who
has tended bar for 40 years, six of them at the lodge. "We were sitting
at the bar, and the gang wanted to do something," she said, according
to the newspaper.

Timothy Clark, who heads the department's Riverside district, which
issued the citations, said football pools "are a violation of the law,
and we will take whatever we feel is appropriate action to ensure
compliance by our licensees," the newspaper reported.

Every day, the government makes it a little bit harder to run a business.  Today's water drop in the ongoing Chinese water torture comes from TJIC up in Massachusetts

Governor Deval Patrick, returning to one of the more contentious
issues of his campaign, has begun quietly putting together a plan to
limit employers' access to the criminal records of potential employees.

Aides have been meeting with lawmakers and advocates working
to limit the scope of the Criminal Offender Record Information law,
which gives many employers broad access to criminal records. Activists
argue that many applicants are rejected for jobs based on minor
criminal convictions, crimes unrelated to the post"¦

Somehow, they are going to do this:

Patrick has not yet settled on specific legislation, an aide said, but
wants to give employers access only to criminal information that is
relevant to the job being sought.

Let me ask you readers a question:  If a company hires an employee with a criminal background who then does harm to someone (say a customer or another employee) in the workplace, who get's sued:

1. The employee, who is held individually responsible for his own actions
2. The employer, who hired the employee in good faith but was not able to get a reference (because lawsuits have pretty much ended the practice of giving honest information about ex-employees) and was not able to do a background check (because the government would no longer share criminal records)

If you answered "1", then you either have been in cryogenic sleep for 30 years or you have never run a business.  No hope, I suppose, of tying liability protection for employers to this legislation, I guess.

By the way, the 800 pound gorilla in the room is the war on drugs.  I am sure the concern here is that more and more white collar workers are saddled with petty drug convictions that are hurting their ability to get jobs.  I would have not problem wiping all the drug possession offenses off the record, particularly since I don't think these possession offenses should be crimes anyway.

Update: From the indispensable Overlawyered.com

So can I assume from all the angst over this that no scientist who is a strong proponent of anthropomorphic global warming has ever accepted money or an honorarium for their research or publication?  May I assume that no environmental group has ever screened who they were going to give research grants to based on the scientist's prior writings and outlook on the topic?

No?   I can't assume those things?  Then what the hell is all the fuss about?  Paraphrasing Casablanca, its like being shocked  (shocked!)  that planned parenthood gives most of their political money to Democrats.  Science today runs on money.  Ask a professor.  It is no longer "publish or perish" it's "get grant money or perish."  Isn't this whole brouhaha really a subset of the free speech debates that are going on today?  In the latter, folks of one ilk or another argue that some speech or position (e.g. holocaust denial) is so outrageous as not to be covered by free speech rights.  Isn't that what this whole debate is about -- ie, are we going to label global warming skepticism as so outrageous and untenable that we are not going to allow money to be spent or speech to be allowed from its proponents?

In that light, it sure raises the stakes on trying to hold onto political power, if politicians are allowed to define what speech, and scientific inquiry, is allowed.

Update:  Whoops, I just saw this.  I think I am on to something.  James Taranto quotes the Boston Globe's Ellen Goodman:

I would like to say we're at a point where global warming is impossible to deny. Let's just say that global warming deniers are now on a par with Holocaust deniers, though one denies the past and the other denies the present and future.

Can you imagine any other product or service you buy for which you would have to sign this release, which was part of my health insurance application (emphasis added):

You understand and agree that you are applying for individual health
insurance for you (and your family).  You further understand that this
application for health insurance will be fully medically underwritten
and that coverage is not guaranteed. You are personally paying the
entire premium for this health insurance coverage.  Your employer is
not contributing in any way to the payment of premium, either directly
or indirectly.

Do you agree with these statements?

You mean my company is not paying for my new Taurus?