Miscellany: 2/28/13

Quote of the Day
It is customary these days to ignore what should be done
 in favour of what pleases us.
Plautus

Viva Il Papa

From the Cardinal Newman Society:

Almighty God and Father,
Who have revealed Yourself through Your Eternal Word,
and have blessed Your Church with Pope Benedict XVI,
our teacher in both faith and reason;
receive our prayers of thanksgiving
for his witness to the beauty of truth,
for his example of hopefulness,
for his humble service of Christ's Bride.
As he blessed our apostolate in his care for the Church's teaching office,
so now may he receive the benefit of our prayers.
Grant him, in his time of retirement,
the reward of study and prayer as he continues to seek, find, and love you in truth.
We ask this through Christ our Lord.

Taking on Political Correctness:
The Challenge to the Voting Rights Act of 2006 Section 5

As a self-described libertarian-conservative, I take individual rights (including the right to vote) as well as the the historical principles of federalism and equal protection very seriously. I have worked with a number of professional woman, people of color, Asian immigrants (especially Indians, a few from Pakistan and one from Bangladesh (at NASA-Clear Lake City: he had family issues because he was the only one in his family to stop his education with an MS--everyone else had an MD and/or PhD), and Latinos. I attended a high school in south Texas with many Latino students and faculty. OLL is situated in a barrio in southwest San Antonio; I didn't have wheels: my very first date involved visiting a popular taco stand off campus. One client manager (at a prominent management consulting company) observed Ramadan during the project tenure; I also worked closely with a Jewish project manager, a good friend.

If you looked at my family, we seemed like any other white family: 3 of my sisters are natural blondes; we are all blue-eyed (except one sister has green eyes). (A number of Franco-Americans have brown-eyes and are less fair-skinned, probably more southern than northern European origin.) But my mom still remembers being teased in early school over her "accented" English. And an influx of job-taking French Catholic immigrants whom allegedly didn't know how to control their breeding made a number of Northeast WASPs very unhappy; the KKK in particular terrorized New England Franco-Americans early in the twentieth century.(Immigration of course on both borders tapered off by the Depression; my ancestors immigrated during the nineteenth century.)

I don't speak for all Franco-Americans; but I don't think you saw comparable initiatives designed to allocate a quota of Franco American lawmakers or establish bilingual education in the public schools. When I started kindergarten, French was my dominant language; the public school system didn't teach me English; my mom did, and I quickly picked it up to keep on track in school.

Most Catholics have a keen moral sense of equal protection; what some Southern states were doing wasn't simply a matter of federalism (states' rights); states were violating individual rights. Majoritarian abuses of power are no more acceptable at the state level than at the federal level, i.e., the Ninth Amendment. The ultimate defense of individual liberties is the courts, not the legislature. However, voting, like many government-sponsored operations is implemented on the local level. The problem with section 5 of the Voting Rights Act is that it arbitrarily subordinates local administration of elections to the Feds; for example, the Feds could veto a local change allowing more at-large officeholders or making certain elections non-partisan if the Feds believe it could result in fewer minority lawmakers, a de facto quota system. It seems odd this is necessary at a time a man of color won a majority of votes in 2 consecutive elections. By all accounts, minority groups heavily voted, if not disproportionately overperformed in those elections. CATO Institute has a good discussion of the clause 5 issue here. In brief, the original section 5 was upheld decades ago as an extraordinary mechanism in dealing with regionally pervasive issues that no longer exist. The 2006 Act extended this Federal oversight for another 25 years

What set me off on this rant was a snarky, amateurish, provocative Washpo op-ed  published yesterday where the author seemed to praise the bullying behavior of Obama-nominated Sotomayor ("Sotomayor is blunt and caustic, repeatedly interrupting. In an opinion this week, she harshly criticized a Texas prosecutor for a racist line of questioning.") and Kagan. whom is portrayed more like an elitist sniper, eager to mock allegedly hypocritical conservative "activists", on the bench with her or the lawyer for the Alabama county wanting section 5 struck. The author's scathing regard of "Nino the Terrible" Scalia is transparent, and she all but does a "you go, girls" over tag-teaming and putting Scalia and conservative attorneys in their place.

The funny thing, though, is the author doesn't make her point. It's clear she disagrees with Scalia's point of view, but he is not presented as engaging in boorish behavior, like Kagan and Sotomayor. I found even her presentation of him as funny, not judgmental and sarcastic, e.g., “Even the name of it is wonderful,” he said. “The Voting Rights Act: Who is going to vote against that?” SPOT ON, SCALIA! I have in recent posts spoofed the attempts of elitist progressives focusing more on gimmick names than serious public policy; I've said, "What's next? The I Love Moms, Babies, and Puppy Dogs Act?"

But my ultimate scorn is for this piece of nonsense: "Surprisingly, the five conservative justices seemed willing to strike down a landmark civil rights law (the provision that gives extra scrutiny to states with past discrimination) that was renewed with near-unanimous votes in Congress. Conservative jurists usually claim deference to the elected branches, but in this case they look an awful lot like activist judges legislating from the bench,"

Let me first deal with the disingenuous point of the Congressional Votes to renew the Voting Rights Act (98 to 0 in the Senate and 390 to 33 in the House). Sotomayor's suggestion that the Congress made a determination that ongoing discrimination exists, hence renewal is totally without foundation and I submit a departure from reality. First, the GOP was in control of Congress. A near-unanimous vote means that a measure wasn't seriously considered--like meaningless proclamations. Why? 2006 was going to be a challenging year for the GOP; they had to do do something on the issue and they didn't want to explain why they voted against the Voting Rights Act. Sotomayor knows well enough that the opinion of a majority is not relevant when it comes to violations of individual rights; that's what the courts are for. Scalia is right in his response to Kagan, as well. The GOP clearly concluded it was easier to go with the flow. don't sweat the small stuff, even at the expense of throwing local/state government in the South under the bus. When I hear the disingenuous solicitor general push back on Scalia's speculating on the motives of lawmakers, this is simply a matter of common sense and the nature of unanimous votes in a real democratic republic.

I especially despise Kagan's pointing out Alabama has no statewide elected blacks; it's a judicial cheap shot. Blacks make up about a quarter of the population of Alabama. Apparently the Kagan test is until a black is elected statewide local elections in a state are presumed defective. The success of Gov. Haley and Sen. Scott of SC prove that racially/ethnically diverse candidates with the right political message can win in the Old South.

But let me return to the ideological nonsense, the allegation that the conservative judges are hypocritical "activists"; first, the Supreme Court earlier specifically noted the extraordinary nature of Section 5; second, there is a question of whether certain states or regions are being discriminated against on arbitrary grounds; third, there's the Constitutional principle of federalism. Stare decisis is not a religion; just because past courts hadn't recognized that for-profit organizations have a right to free speech or the people have a right to defend themselves against violence, doesn't mean those rights don't exist. Here, the issue is whether localities are empowered to make electoral reforms without getting a sign-off from the Feds. If localities implement defective controls, those still can be challenged in court. It's unconscionable to tell people in Alabama, yes, you live in a democracy, but control over your own elections is ultimately held by the federal government. That is TYRANNY. The Court has been signaling for a while in other matters (e.g., affirmative action) that extraordinary measures have a limited shelf life. A good first step is for SCOTUS to strike section 5 of the Voting Rights Act.  

Political Cartoon

Courtesy of Michael Ramirez & IBD

Political Humor

President Obama said this week that after four years as president, "you realize all the mistakes you've made." so apparently he DOES watch Fox News. - Jay Leno

[Obama promises all-new mistakes this term of Presidential Apprentice.]

A lot of Americans can't believe how crazy the politics are in Italy. A comedian might become prime minister. We would never do that in America. A pro wrestler? [Jesse Ventura, I-MN gov] Sure. Stuart Smalley from "Saturday Night Live"? [Sen. Al Franken, D-MN] Yeah. - Craig Ferguson

[Something in the water in Minnesota... Not to mention an actor whom played a professor trying to teach morals to a chimp. Or a Democrat.]

Americans are bracing for this thing called the sequester — when $85 billion will be cut from almost every part of the budget. So teachers, meat inspectors, and TSA workers will all be affected. So if you're someone who teaches people how to keep bad meat off airplanes, this is a tough weekend. - Jimmy Fallon

[Rumor has it some meat inspectors in Europe are looking for work...]

Musical Interlude: My Favorite Groups

Aerosmith, "I Don't Want to Miss a Thing".  The group's only #1 (Hot 100) hit. I'm a huge fan of songwriter Diane Warren whom has written big hits not only for the likes of LeeAnn Rimes, Cher and Laura Branigan, and Gloria Estefan but memorable power ballads for the likes of Chicago and Bad English. No group does power ballads better than Aerosmith; Steven Tyler has some of the best pipes in the business, and what can you say about the musicianship of the band (Joe Perry et al.)? The single debuted at #1 (a rare achievement) and stayed there for a month.

This marks the end of my Aerosmith retrospective: next up: Journey.

Miscellany: 2/27/13

Quote of the Day
A room without books is like 
a body without a soul.
Marcus Tullius Cicero

News Quotes of the Day

In Woodward's recent Washpo op-ed;

In fact, the final deal reached between Vice President Biden and Senate Minority Leader Mitch McConnell (R-Ky.) in 2011 included an agreement that there would be no tax increases in the sequester in exchange for what the president was insisting on: an agreement that the nation’s debt ceiling would be increased for 18 months, so Obama would not have to go through another such negotiation in 2012, when he was running for reelection. So when the president asks that a substitute for the sequester include not just spending cuts but also new revenue, he is moving the goal posts. 

So we now have the president going out (saying) 'Because of this piece of paper and this agreement, I can't do what I need to do to protect the country.' That's a kind of madness that I haven't seen in a long time." -Bob Woodward

According to  Politico

Woodward — first in “The Price of Politics,” his bestseller on the failed quest for a grand budget bargain, and later with his opinion piece in The Post — makes plain that sequestration was an idea crafted by the White House. Obama personally approved the plan and later signed it into law. Woodward was right, several congressional officials involved in the talks told us.

From CNN via RealClearPolitics:

WOLF BLITZER, CNN: You're used to this kind of stuff, but share with our viewers what's going on between you and the White House.
BOB WOODWARD: Well, they're not happy at all and some people kind of, you know, said, look, 'we don't see eye to eye on this.' They never really said, though, afterwards, they've said that this is factually wrong, and they -- and it was said to me in an e-mail by a top --
BLITZER: What was said?
WOODWARD: It was said very clearly, you will regret doing this. 
BLITZER: Was it a senior person at the White House?
WOODWARD: A very senior person. And just as a matter -- I mean, it makes me very uncomfortable to have the White House telling reporters, 'you're going to regret doing something that you believe in, and even though we don't look at it that way, you do look at it that way.' I think if Barack Obama knew that was part of the communication's strategy, let's hope it's not a strategy, that it's a tactic that somebody's employed, and said, 'Look, we don't go around trying to say to reporters, if you, in an honest way, present something we don't like, that, you know, you're going to regret this.' It's Mickey Mouse. (The Situation Room, February 27, 2013)

Sigh,  I've tried to stay out of the partisan sniping over sequester. I've been pointing out Democratic budget games for a long time in this blog. Let me give a very simple example. Take government employee pay scales. A lot of these have time in service components. This means your pay automatically goes up every job anniversary. It doesn't mean the government employee has actually improved productivity; the government doesn't add widgets to the economy. Quite often when they talk about raising government pay, they may be referencing the full pay matrix. In other words employees might get two types of an increase.

There are some basic facts most business-literate people know. Managers are scared of ending a year with a budget in surplus (there could be a variety of reasons, e.g., an unfilled position). Heaven forbid corporate finds out they can make do with less budget when they are fighting the bureaucrat's good fight for annual budget increases. I've given personal examples from past experience; I once worked for computer timesharers, i.e., selling premium-priced, value-added mainframe computer time. Say, an energy company manager told my boss Brian, "Look, I have $3000 left in my budget, use it or lose it. Can you provide me programs in 3 months if I give you the money now?" We actually had "dollar-burn" utilities that would stop after it chewed up $3000 in computer time. Brian loved claiming the bonus accruing from dollar-burn, but less enthusiastic about carrying out his end of the bargain, he was now working on this month's bonus: what have you done for me lately?

Stupid budget games play out wherever bureaucracy exists, but government is a monopoly which uses force to guarantee its funding. Obama has been playing the same old same old games. First, the Democrats often play the baseline budget games. Basically  many government budgets have funding increases baked in. In other words. all existing inefficiencies within and across agencies. I remember supporting Jimmy Carter whom promoted zero-based budgeting. Basically you drill down on specifics and ask, e.g., does it make sense for us to be doing this anymore? If so, can we do it better/cheaper? No doubt Congressional leaders probably had a good chuckle over Carter's naivete. So now what passes for budget cuts is not the equivalent  of a family on lower income canceling Suzy's voice lessons but allowing  the allocated amount for Suzy's lessons over the coming year to go up only 2% versus a planned  5%.

Second, the Democrats want to make budget cuts as politically painful as possible on the GOP. There are 1001 ways businesses handle tough times--they may layoff employees, freeze or cut training and travel costs; postpone hiring, projects, purchases; reduce operating hours; close down unprofitable locations, cut dividends, declare a 401K match holiday; etc. Obama  has fought such savings tooth and nail. Recall for instance when it came to compensation, Obama made a trivial accommodation of freezing compensation for political appointees, not, say, on government employees with at least  $100K salary/benefits. Getting Obama to be financially responsible is like pulling teeth.

So what we get is pathetic, predictable variations of fear-mongering based on popular government benefits. We don't hear, say, putting off new PC's for SSA employees and contractors or shrinking relevant managing bureaucracy: it boils down to cutting benefits on Granny whom is forced to live on cat food. It doesn't take a genius to figure out how to translate that into attacking Big Defense, Big INS conservatives: you send out token Republicans in the Administration out in their Chicken Little suits; Janet Napolitano warns she might have to cut Border Patrol staffing (not say, on that porous Canadian border, but Arizona); we have Pentagon officials complaining they don't have fuel for ships to run their missions.

These are, of course, contrived, false choices. McCain is not for these types of cuts. Obama doesn't really care about Border Patrol or fueling carriers. He wants to control the money in the Pentagon budget, and he has very different priorities than McCain.

As for Woodward, I've found him a straight shooter with gold standard credentials and highly ethical. My shift in position towards a non-interventionist foreign policy was largely inspired by Woodward's The War Within. We see an untrustworthy Obama reneging on a deal with Republicans (as if that's going to improve partisan gridlock in Washington!) Why? I think Obama has been emboldened by finally getting the Clinton class warfare tax hikes reinstated and he hopes he can get the GOP to capitulate on spending cuts if he can define spending cuts as politically unpopular as possible.

Picking on Mark Perry/Carpe Diem

I am generally a huge fan of Mark's blog (in my blogroll). There are a couple of themes where I plainly disagree with him and other economists. (Mark tends to be libertarian, e.g., on misguided wage policies, crony licensing practices, the war on drugs, bloated state universities, etc.)

First, Mark and others have been hyping good news in the economy as much if not more than the Obama Administration. I've even heard one economist claim there is no problem in the college-educated segment with unemployment there under 5%. Some of this is just common sense--if we extrapolate long-term growth rate of 3%, which we haven't seen in some time, how can even college graduates do well? In fact, let me quote this 2009 post from the liberal Economic Policy Institute (yes, things have modestly improved since 2009, but the general observation is relevant):

Nobody can seriously believe that if colleges made graduates more attractive job candidates, this would cause the unemployment rate for college graduates to fall. If employers are now filling vacancies for recent college graduates in a number equal to only 20% of their class, surely this is not because graduates are insufficiently attractive as candidates. The unemployment rate for those with a college degree (including both mature workers and recent graduates) was 4.8% in May, up from 2.1% at the start of the recession, and higher than at any time since 1979. These unemployment numbers are probably understated. 

From my own anecdotal experience in the IT industry, I have seen postings for phantom positions, e.g., for staffing a project if they win a contract (they don't mention this until the face-to-face); duplicate postings from competing agencies, many times assigned a candidate quota; gold-plated job requirements impossible to fill, positions canceled, filled internally, redefined or put on hold. Employers fret you are overqualified and worry you are a flight risk in an improving economy.

I talked to an anonymous recruiter whom has been making his living in the profession since the 1980's; he says it has never been this bad and he's seen recessions come and go over the past 30-odd years. He volunteered one word to describe it: (client) arrogance. He gave one telling example: one candidate did an interview and it took a full month before getting feedback: the client concluded that he was not a fit (keep in mind the client selected him to interview based on his resume).

I know of several experienced college graduates making a fraction of their pre-recession income, e.g., shifts as a Home Depot cashier. A college graduate counts as employed in national statistics even if he or she is filling coffee orders at Starbucks. You still have to find a way to pay rent.

One final note: I've looked at unsolicited direct employer  queries  over the past few months. Universities or IT positions? No--three were in commission sales (insurance or investments), and one was a franchised eatery. I am not your typical college graduate, and if a former senior principal for Oracle Consulting who has also worked for IBM,  another highly selective employer, finds landing the next gig challenging,  just imagine the candidate with less than 18 years of experience and marginal communication skills.

Second, Perry waxed enthusiasm over Bernanke's inflation fighting performance. I'm not impressed by relatively low inflation in a low-growth economy with the lowest labor force participation in decades over 3 years into the Obama recovery. After all, Japan has been doing this for 2 decades running. Ask John Williams of shadowstats what he thinks of CPI. Food and energy inflation are particularly corrosive of purchasing power, an implicit tax of bad monetary policy, while the Fed caps interest rates near zero. Every monetarist and Austrian free market economist I know pans the Fed (even the market monetarists want to automate or rule-base money supply, not manipulate interest rates).

Political Cartoon

Courtesy Gary Varvel and Townhall

Political Humor

Doesn't sequestration sound like some kind of side effect from a bad medicine? - Jay Leno

[Like what happens to your finances under ObamaCare.]

The Pope does not earn a nickel. No paycheck, no money coming in, nothing. That must drive his wife crazy. - David Letterman

[He'll retire to live in a monastery on Vatican grounds. Many men his age are living the lifestyle.]

Anybody see the Academy Awards last night? The show last night was so long that by the middle of the show the audience was begging Daniel Day-Lewis to free them. - David Letterman

[Day-Lewis found playing Lincoln to be very natural. For example, Lincoln as President kept forgetting things like habeas corpus and didn't like his reviews in the local newspapers.]

Musical Interlude: My Favorite Groups

Aerosmith, "Angel". Hands down, my favorite Aerosmith single and one of my all-time favorite songs. I dare you to resist your inner yodeler in the shower. Pity my poor neighbors... No, that horrible noise is not the building plumbing run amok...

Miscellany: 2/26/13

Quote of the Day
When a person can no longer laugh at himself, 
it is time for others to laugh at him.
Thomas Szasz

No, Mr. Bernanke: Making the Government Sustainable
DOES NOT HARM THE ECONOMY:
How About Rebuking "All Hat, No Cattle" Obama?
"All-Tax, No-Spending-Cut"

Courtesy of Cafe Press and rightwingstuff

I'm tired of superficial statements by an allegedly conservative economist. Yes, he pays lip service to massive unfunded liabilities, but this nonsense about  minor spending cuts being damaging to a $15T economy is utterly ludicrous. Tell us, Ben, once you have to raise interest rates, what happens to debt service? What happens when the bond market corrects? What happens when nobody shows up at Treasury auctions?

You know as well as I do that money is fungible, that almost $2T in regulations on our economy is like carrying a 500-lb man on your back, we have the highest business tax rates among the major economies, there's over a trillion in waste in government spending that doesn't add one widget to this economy; retaining bloated budgets, massive redundancy, etc. serves no useful purpose beyond lining the pockets of unproductive government employees and contractors and crony business parasites, volunteering the utilization of future tax receipts.

You're pathetic, Mr. Bernanke. Are you so desperate for reappointment by a spendthrift that you would sell your very soul?

Entertainment Potpourri

• WWE, Jack Swagger, and Glenn Beck. I wrote a recent commentary over the Colter/Swagger angle.  Swagger (Hager) was arrested (as reported by TMZ) after a recent Mississippi event based on erratic driving; he was charged with DUI and possession of marijuana. The Mississippi event was in the aftermath of Swagger, an unexpected scripted victor in a recent PPV, winning the right to face babyface (good guy) Mexican aristocrat champion  Alberto Del Rio (a former heel/bad guy). Now, to be honest, WWE, a once regional (Northeast) promotion,  has featured a number of Canadian-born wrestlers/characters (the Hart brothers, Jericho, Edge, Christian, Benoit, and the Mounties, for example), although I don't remember WWE playing a job-stealing immigrant storyline, which I think is playing with fire. I read rumors that WWE Creative was scrambling in the aftermath of the Hager arrest; Hager had lost his push, in part to his limited promo talent (which explains the Colter character), a former champion whom had been booked into a long string of losses and basically off television recently. But when I saw the latest two television shows (Smackdown and Raw), it was clear that WWE was doubling down on the angle, even looking to make Beck's public attacks on WWE an angle. 

Beck feels it's making the Tea Party out to be racist; I disagree: The immigration debate stems from at least 2007, not 2009-2010, when the Tea Party movement caught fire; it is true that scapegoating immigrants for job stealing is a right-wing populist theme, not just in the US but France and elsewhere. The Tea Party is more of a response to the tyranny of Big Government; the right wing is not necessarily against the "right" Big Government (e.g., Big Defense and Big INS). The only "Tea Party" thing about the promo is the prominent display of the Gadsden flag.  I was listening for the crowd reaction yesterday, and the crowd seemed largely indifferent. Del Rio cut an "America: Land of Opportunity" promo to a flat response; I think Del Rio is not a convincing babyface. Swagger has put wrestling icon Hulk Hogan's "Real American" persona  on its head. The "We the People" tagline works better when you're a babyface character.

The reason I'm embedding the video below is because it's probably the most unusual wrestling promo I've ever seen. The two characters break kayfabe  (go out of character to assume their real identities in the middle of the promo, e.g., look, I'm not a real doctor: I just play one on TV.) As for the scripted nonsense, it's like fingernails scratching the blackboard: it makes me  cringe. I now think they've committed to the storyline building to their upcoming signature Wrestlemania PPV. Will they simply have Swagger job (lose) to Del Rio? I don't see this storyline going beyond 3 or 4 other Latino characters. I think a more plausible angle is getting them to join forces with the vigilante group the Shield, also getting a monster push. A generalized Minutemen gimmick would make for a good storyline convergence. I could easily see a Sheriff Jack and his deputies roaming the WWE to establish justice. But that would need to be booked before Wrestlemania, and they would then have to book Swagger to beat Del Rio. A lot depends on WWE Chairman McMahon. The marijuana thing flies in the face of their wellness policy. But given a first offense, McMahon could protect his investment in Swagger and  keep him on a short leash. I think in a different gimmick the Colter and Swagger angle can work. I think if they put Swagger over Del Rio they need to broaden his character now, building future feuds (e.g., having Colter guest commentate on a US champ Cesaro match and trash-talk the condescending Swiss character).

• Off the Wall Offensive. I have not tuned in to SNL for years. There have been a few inspired bits over the years--I remember one spoofing some wealthy liberal lenders whom had offered gimmick terms during the housing bubble. But this one imagining a vengeful Rambo-like resurrected Christ is wildly offensive. We believe in a forgiving Jesus, one Whom argued that let only he without sin cast the first stone, Whom rebuked Peter for drawing his sword during the Passion, Whom taught His followers to love one's enemies, Whom preached "Blessed are the peacemakers"... Of course, this is hypocrisy of the first order; fundamentalist Muslims would have issued fatwas if the comedy spoofed the Prophet in a similar fashion. (I believe civility requires a respectful depiction of religious figures.) I hesitate to give oxygen to such pathetic contrived, unoriginal, cheap pops,  vulgar humor. I know: these sophomoric "humorists" get off on overreactions, yanking the chains of social conservatives; I'm not going to scream about blasphemy here--that's a given; I'm here to say that you NY writers  are a bunch of untalented hacks whom, like other overrated comics,  have to resort to vulgarities because you lack any genuine creative spark. What your next skit: Resurrection 3.0? 

Political Cartoon

Courtesy of Steve Breen and Townhall

Musical Interlude: My Favorite Groups

Aerosmith, "Remember Walking in the Sand"

Miscellany: 2/25/13

Quote of the Day
Let the American youth never forget, 
that they possess a noble inheritance,
bought by the toils, and sufferings, and blood of their ancestors; 
and capacity, if wisely improved, and faithfully guarded, 
of transmitting to their latest posterity all the substantial blessings of life, 
the peaceful enjoyment of liberty, property, religion, and independence.
Justice Joseph Story

Tax Policies, Compensation and Unintended Consequences

I often write little anecdotes about work or other experiences. I was working for a San Jose suburb consulting company which went belly-up after the Nasdaq meltdown. I worked an eclectic schedule; the sales guys weren't landing big projects. Some companies (e.g., KRON-TV) didn't need to book a DBA 40 hours a week; I sometimes worked at 4 different clients a week. The company hoped by keeping our foot in the door of the smaller clients, we would win bigger billing down the line (say, upgrade projects).

One of the longer gigs was a San Jose computer display manufacturer. where we were doing an Oracle EBS installation. Unfortunately, the client gave an inexperienced internal resource certain tech supervision responsibility. At one point this guy caught me staging installation CD's to the database server file system. . He told me, "We are not paying you guys to copy CD's. We have people who can do that. You need to go off the clock right now, and come back this afternoon." I called my boss; he said, "Okay, if they're going to do that, just go to Metalink and download the latest patches; you know we have to do that sooner or later." "I know that, but he's demanding I leave the building now." Our account people had not set expectations; it's not like I had another client down the street to book 2 hours in the interim..

The point is later in the project I had to work late in the evening; I think it was a Friday. Many companies would have something brought in for Friday breakfast--like when I worked at the Japanese chip tester, we usually had some sort of gooey treat like a huge blueberry cobbler. My client probably brought in hundreds of Krispy Kreme doughnuts, and even we lowly contractors were invited to share in the bounty. I was stuck on site late that afternoon working the install; if I left for dinner, I had no way back in the building. Luckily (?) there were still a few dozen doughnuts left before the janitors disposed of them. (No, I didn't eat them all--but I probably never ate more doughnuts in my life. Granted, they were no longer fresh.)

I was working a different client site in Sunnyvale when I found myself invited to their weekly Friday after-work beer keg social. I once worked for a well-known insurance company which had  a compressed 4-day workweek, a fitness center and jogging trails on campus and 3 different subsidized cafeterias, including one offering freshly carved meats--but not these Silicon Valley perks of free gourmet meals, car washes and routine maintenance, concierge services (e.g., find a babysitter), housekeeping, take-home or delivered dinners, spending money for new parents, etc. Some perks make a lot of sense, of course; I've worked a lot of maintenance and upgrades where free  pizza (including at least one veggie for ubiquitous Indian colleagues) is all but a universal staple (we don't have to spend time in traffic, waiting for food; we can grab a bite while a patch is running, etc.)

Here's the point: the company can shift dollars to the largely untaxed benefit side of compensation. We otherwise would have to pay them out of after-tax dollars

Haven't we seen this game before? Of course. Recall the economically-illiterate FDR Administration imposed wage-price controls. With millions serving in WWII, we had very low unemployment numbers; we should have seen wages strengthening: health insurance became a way to work around wage controls. That's how we ended up with unions trying to protect gold-plated policies of over $20K a year.

We need to stop the madness of trying to work around dysfunctional marginal tax policies. If a household doesn't needed twice monthly housecleaning, let them take it in cash taxed at a lower rate to be used as they prefer. This blog prefers tax policy that minimizes the bite on economic productivity (wages, savings, investment)--the flatter and broader the better. Goodman has a progressive version here.  (I'm still convinced everyone, including lower-income people, needs to be vested in efficient, effective government spending).

The REAL Gun Nuts

It seems over the past month Drudge has carried a few items about government agencies (even the social security administration) acquiring weapons and/or ammunition for "training", with some 7000 assault riffles and up to 2 billion rounds for DHS alone. For what purpose? Not on foreign land--fellow American citizens?

In the past I've mentioned raids on stores selling or farms supplying raw milk products. Ron Paul, early in his Congressional retirement, points out force has been used for a promoter of barter currency. For the record, I've never heard of snipers in health food stores, farms or coin dealerships.

An Older Story: Scapegoating Scientists: Thumbs DOWN!

Due to blog formatting issues the segment video is embedded at the end of the post (below).

"To predict a large quake on the basis of a relatively commonplace sequence of small earthquakes and to advise the local population to flee" would constitute "both bad science and bad public policy," said David Oglesby, an associate professor in the Earth sciences faculty of the University of California, Riverside.

Also from last October :

Two scientists resigned their posts with the government's disaster preparedness agency Tuesday after a court in L'Aquila sentenced six scientists and a government official to six years in prison. The court ruled Monday that the scientists failed to accurately communicate the risk of the 2009 quake, which killed more than 300 people

 Prosecutors in the case had requested 4-year prison sentences. In going beyond that term, Billi says that "the guilt of the defendants is certainly severe" and adds that their guilt is accentuated by what he describes as the "conscious and uncritical adherence to the will of the head of the civil protection department."

The judge claims not to be anti-science but the  judge is clearly incompetent on scientific issues. To scapegoat scientists and engineers for circumstances beyond their knowledge or control, beyond the bounds of professional training and ethics  is unconscionable. As I have commented elsewhere;

A lot of [people's reactions to the verdicts] deals with scientific illiteracy among the populace; they have no concept of the limitations of modeling. Since they can't indict God, they go after the scientists. Morally outrageous--governments throwing scientists under the bus..

Musical Interlude: My Favorite Groups

Aerosmith, "Come Together". Remember the Sgt Pepper tribute project in the late 70's, with the BeeGees, Frampton, et al. Here are two charting remakes from the project.






Italian-Verdict Clip

Miscellany: 2/24/13

Quote of the Day
I always felt that the great high privilege, relief and comfort of friendship was that 
one had to explain nothing.
Katherine Mansfield

IRS: Rigging the Tax Preparer Market

I  think my baby sister, a CPA, in the past has prepared some returns on her own, like my parents'.  The CPA profession has had rigorous certification requirements, including academic coursework, experience, exams and continuing education. Apparently things have changed since my sister sat for the exam: one of my nephews graduated last spring, with an accounting degree from her alma mater. I recently asked him whether he had sat for the CPA exam yet, and he glumly explained it requires additional coursework so he is now pursuing his Master's degree.

So I wouldn't say that I was surprised to read of these exemptions from the IRS' pushing-on-a-string preparer regulations:

The IRS’s program was an effort to regulate independent tax preparers that it feared were not properly trained.  It required that independent preparers pass a competency test, receive continuing education and pay annual fees, among other things. Attorneys, certified public accountants and IRS enrolled agents were exempt from the requirements.

A postscript to this video:  on Jan 18 a federal district judge issued an injunction blocking enforcement this tax season. The IRS responded with a motion to stay the injunction, which the judge ruled against Feb. 1.

Let me point out that my first priority is tax simplification which would attenuate the need for tax preparers (I would also like to eat pizza and ice cream while losing weight, but it's not going to happen). I have little doubt that the crony interests of tax attorneys and  CPAs are represented at the IRS. For many preparers with a limited number of clients, there's a huge commitment of time and resources required to meet these new standards, and the result is an artificially smaller supply of preparers, pushing up prices.



The Fair Academic Standards Act

Both Don Boudreaux of Cafe Hayek and his former student Mark Perry of Carpe Diem have been fighting the good fight over one of the worst anti-jobs policies ever conceived: the minimum wage. The issue is not whether one thinks the wage affords a high standard of living; It has more to do with the the demand for low-skill, low-experience labor. I remember working for minimum wage through college work-study (earning money to cover non-tuition expenses), working as a dishwasher and in the library. I know I would have worked more hours at a lower rate; I made more in one hour than I cleared each day in high school delivering 90 daily afternoon newspapers under a hot Texas sun. I was a teenager; like most teens, I was not  supporting a family on part-time work; I used to book whatever extra hours I could get. I remember in one case the librarian early in the spring semester was seeking a volunteer one Sunday. I didn't realize it was Super Bowl Sunday and my beloved Minnesota Vikings were playing. (I ended up working--the librarian wouldn't let me off the hook; I did manage to catch the end of the game; the Vikes were hopelessly behind.)

Now to provide some context Mark Perry has published a number of posts on grade inflation (e.g, here and here). As soon as I read "Washington (CH)", I knew it wasn't a news item from the Associated Press: "Minimum Grade"  (the next thing I thought is it must be April Fools...) It doesn't take long  to see Don is spoofing minimum wage proponents. Paula Krueger,columnist/economist, I think is a cross between Krueger/Card whom liberals always cite on minimum wage, and Keynesian Nobel Laureate Paul Krugman whom many believe tweaks his economics to fit a pedestrian progressive point of view. Bernie Franken of Elitia (elitist progressives) seens to be another composite character: Barney Frank is the recently retired liberal Congressman who failed to convince Gov. Patrick to name him as former Sen (now Secretary of State)John Kerry's interim successor; there's also socialist Bernie Saunders of Vermont and Al Franken of Minnesota. Rand Paul (along with Utah's Mike Lee) is probably the most libertarian/free market Senator. Notice how similar the arguments are to the minimum wage debate..

It's interesting to read the post comments. The first is 'is this for real?' and a couple correctly note it's a satire. However,given the absurd interventions in the economy. I did do due diligence and do a Google search. Not to criticize Don for writing a brilliant satire, but if I had written a satire, it probably have been in the context of an executive order directing the Dept. of Education to promulgate grade standards, threaten to cut off funding to schools not implementing the standards, and noting that college loans resulting in D and F work likely wouldn't be repaid.

Mark Perry adds to the satire by inserting an alleged Maxine Waters' speech in support of the act. Very funny; I could easily see any elitist progressive legislator actually giving a speech just like that.

Political Humor



Political Cartoon

Courtesy of Henry Payne and Townhall

Musical Interlude: My Favorite Groups

Aerosmith, "Walk This Way"

Miscellany:2/23/13

Quote of the Day
In work, the greatest satisfaction lies
the satisfaction of stretching yourself, 
using your abilities and making them expand, 
and knowing that you have accomplished something that could have been done
only by your unique apparatus. 
This is really the center of life, 
and those who never orient themselves in this direction are missing 
more than they ever know.
Kenneth Alsop

A Brief Follow-Up Rant
on Moss' The Myth of Persecution

Yesterday I commented on the promotion video for a new provocative book suggesting that the Church claims of persecution and martyrdom during the initial centuries under Roman authority are revisionist and unreliable.

In fact, Christianity was outlawed in Rome during the early centuries of the Church; pagans spread rumors of cannibalism (i.e., the sacrament of the Eucharist), a well-known graffito mocking the worship of Jesus given a donkey's head on a cross. Other claims were the Christians were worshiping a mere man as a God. One of the first independent references to the young, growing Christian movement was a series of letters of an early second-century Roman governor Pliny the Younger (in modern-day Turkey) whom sent Roman Emperor Trajan a letter describing his treatment of those anonymously accused of being Christians; Pliny was concerned because the new religion was rapidly spreading throughout the province (no doubt dead Christians pay no taxes).  Pliny was more interested in creating an apostate than a martyr, and gave accused Christians a way out, but if they persisted in their beliefs, he did execute them.  Trajan wrote back, approving Pliny's handling of the problem, as a matter of advice discouraging the practice of accepting anonymous lists. However, prosecution of Christians was unevenly practiced; for example, prolific late second-century theologian Tertullian claimed no African martyrs up to his lifetime.

Here is a fairly concise discussion:

In its first three centuries, the Christian church endured periods of persecution at the hands of Roman authorities. Christians were persecuted by local authorities on an intermittent and ad-hoc basis. In addition, there were several periods of empire-wide persecution which was directed from the seat of government in Rome.

Christians were the targets of persecution because they refused to worship the Roman gods or to pay homage to the emperor as divine. In the Roman empire, refusing to sacrifice to the Emperor or the empire's gods was tantamount to refusing to swear an oath of allegiance to one's country.

Historically, since the fifth century, scholars have identified 10 early noncontinuous persecutions of the early Christian Church in the Roman Empire, staring with Nero's scapegoating of Christians for the great fire of Rome; it was during this persecution that St. Peter was crucified upside down and St. Paul beheaded.

The number of martyred saints is limited; for example, this list includes 15 first-century saints including 11 of the 12 Apostles (St. John died of natural causes) and over the next 3 centuries 16 individual martyrs and two groups of martyrs (the first African martyrs (12) and  Lesser Armenia (40)). It's not clear from context that the Church is exaggerating the early Church martyrs; for example, Roman Catholics recognize over 10,000 saints; there are non-Christian sources corroborating events. It's unclear Ms. Moss' point by context: that there are unusual problems (beyond the usual ones of limited records and their accessibility in validating historical events), that some Christian writers  may have embellished the life stories of martyrs (not unlike flattering biographies of Roman emperors) over and beyond the accounts of their martyrdom, that many or most Catholics have a superficial understanding of the early history of the Church?

I don't know of many Catholics who come to the faith because of the martyrs; we may be inspired by the examples of their faith and courage.

I hope that I'm wrong, but I think Ms. Moss has a much more insidious goal: I think that what she is doing to do is undermine the Church's authority by challenging its credibility; e.g., if you can't believe what the Church teaches about the early Church, what can you trust about what it teaches today on matters of faith and morals? If so, I think she fails. Most people are not reliant on the tools and techniques of Biblical criticism.  

A Retired Democrat Governor a Fiscal Hawk?

Courtesy of Truth in Accounting

Via Hawaii Reporter and Galllup:

Nearly three out of every 10 employees – or 27.8 percent of employed adults in Hawaii work in a government agency. Hawaii falls just behind the District of Columbia (29 percent) and Alaska (28 percent). The annual survey shows the average number of government workers is going down. In 2009, 17.3 of adult employees worked for the government and in 2010, the number was 17.2. In 2011, that number decreased to 16.3 percent and in 2012, dropped further to 16.2 percent.

Maryland, Virginia, New Mexico, West Virginia, Louisiana, Mississippi and Washington round off the top 10 states with the highest percentage of government employees. That compares with Indiana (11.5 percent), Pennsylvania (11.7 percent) and Missouri (12.4 percent) that have the lowest percentage of government workers. Not surprisingly, Washington DC has the highest number of federal workers, with Maryland coming in second and Hawaii third.

Hawaii currently has some $20 billion in unfunded liabilities including the State's Employee Retirement System and healthcare costs for workers and retirees

This interview  is refreshing, because it's one of the first times where I've heard a former Dem governor take on an overbudget train boondoggle, public sector unfunded liabilities, etc. Still, when he compares the state of Hawaii's airports compared to state of the art ones across the Pacific. I can almost hear Obama's Politics of Envy with Obama's obsession with Chinese or Japanese money-losing supertrains or green-energy subsidies. Why are we not discussing privatizing public infrastructure, including airports?



MAV's: Not Just Science Fiction:
Will Technology Outstrip Inadequate Privacy Protections?

I'm a business technology professor, not a Luddite. I can easily see how small mobile devices might be able to augment search-and-rescue operations, monitor dangerous neighborhoods, assist in tracking fugitives from justice or border protection, provide more comprehensive intelligence, say on the nature and extent of an alleged threat allowing for  more efficient, effective deployment of personnel and resources. But we must ensure that such devices don't infringe on privacy, that the judicial system not authorize fishing expeditions, etc.



Political Cartoon

Courtesy of Gary Varvel and Townhall

Musical Interlude: My Favorite Groups

Aerosmith, "Last Child"

Miscellany: 2/22/13

Quote of the Day
All profoundly original work looks ugly at first.
Clement Greenberg

Is Early Christian Church History of Repression 
Right-Wing Revisionism?

The short answer is 'no'; Christianity wasn't legalized in the Roman Empire until the fourth century reign of Constantine I. It wasn't until the later reign of Theodosius I (whom also banned the ancient Olympics) that Christianity became the official state religion.

This is not to say that martyrdom solely came at the hands of Roman authorities; some deaths were the result of religious rivalries, and even before Christianity was legalized, certain emperors cracked down more than others, and crackdowns were sometimes unevenly distributed among regions of the empire. Other emperors saw Christians as more of a provocative nuisance, eager to earn their way into heaven through blood of martyrdom, and didn't want to give them the attention they sought, perhaps exacerbating  the  reach of Christianity in the Empire, more conflicts with pagans, etc.

Let me say that first of all, I am not a trained historian, and I have not read Ms. Moss' new book, but the promo she cuts for the book speaks for itself. There is no doubt that the Church honors the memory of the saints, including a number of whom were martyred for the faith; many are cited in the Mass itself, there are feast days ("The earliest feast days of saints were those of martyrs, venerated as having shown for Christ the greatest form of love, in accordance with the teaching: "Greater love has no one than this, that someone lay down his life for his friends." Saint Martin of Tours is said to be the first or at least one of the first non-martyrs to be venerated as a saint. The title "confessor"  was used for such saints, who had confessed their faith in Christ by their lives rather than by their deaths.")

Contrary to traditional Church teaching, and popular belief, Christians were not systematically tortured and killed by the Romans merely because they refused to deny Christ.

Rather, these stories were exaggerated, revised, and forged, often centuries later, and the history of the Church was reshaped in order to combat heresy, to inspire and educate the faithful, and to fund Churches.

Let's be clear: I was never taught what Ms. Moss claims. Most early Christians did not worship openly for obvious reasons: many suspected Christians were turned in by others--the accused Christian was given an opportunity to show that he was not a Christian; we have the historical facts of the catacombs, not just for Christians but Jews. Granted, there were internal disagreements whether people of faith should hide, but priests weren't leading the faithful after Mass to the nearest  Roman authority to turn themselves in...

Were some accounts embellished? The devil is in the details, and Ms. Moss makes too broad a claim. Did George Washington chop down that cherry tree? Whether little George told his father the truth actually happened is not evidence against the facts of Washington's performance and leadership during the Revolutionary War and as President. To portray Church leaders as little more than propagandists is an unconscionable smear and fundamentally unjust and dishonest. Recall, for instance, in the process of His healing miracles, Jesus routinely advised the cured to show themselves to the priests of the Temple (see, e.g., Luke 17:14). The current Church has high standards for sainthood, recognition of miracles, apparitions, etc. Heresies were combated by apologetics and Church councils, not by appeal to the blood of martyrs.

Since the book is relatively new I haven't seen historian or traditionalist responses yet (I was tipped off by an email item by the Cardinal Newman Society which summarized but did not respond to it), but here's a post by Daniel Larison, whom suggests that Moss has created a straw man (and I agree):

 I doubt that anyone seriously defends or teaches the idea that there was a constant, universal Roman policy of persecution that never let up, The persecutions tended to be relatively brief, sporadic, ad hoc, and reactionary moves by specific emperors, and they were irregularly enforced and the length and severity of enforcement typically depended on the attitudes of the local officials. The persecutions created deep divisions within the Christian communities affected by them, which split along the lines of those that were seen as having compromised with the persecutors and those that resisted. Of course there were people killed for their Christian faith during these persecutions. Are martyrological texts stylized and not always reliable historical sources? Well, yes, but then this is hardly news to anyone who works with or reads ancient historical materials. It doesn’t mean that most of the martyrs around whom these stories were being made never existed or that they didn’t suffer persecution and death.

Why would I bring this up in a political blog? "Moss is delivering a lecture on the topic on March 21 at the Washington National Cathedral. The description of that talk says that "there is the troubling use of this heritage to silence the voice of those who act outside the perceived orthodoxies of the day."" Hmmm. Is she attempting to suggest that the Church is a vast right-wing conspiracy which arbitrarily abuses Her authority on matters of faith and morals to suppress the views of culturally-accommodating progressive Catholics? Say, for instance, on alternative lifestyles?



Public Sector Pensions: Chicago

I'm not a lawyer but what I don't understand is how it is legally possible for legislatures to make sweetheart pension deals that shift funding burdens to future years. Let me be more explicit. Suppose the pension fund is able to fund today's pension obligation  of $100M. Maybe it uses $80M from a state contribution for employees and the other $20M from interest, dividends, capital gains, etc. on invested funds. In flush years (good stock market returns, tax collections, etc.), let's say that $20M goes to $40M. Do you think a legislature thinks it needs to spend that same $80M, to save for a rainy day (say, recessions)? Or do you think the legislature thinks, hey, they only need $60M to make payments; we can take that extra $20M and let me think really hard here, spend it on raises for and new hires of teachers and safety officers: I bet my constituents would really like that. Now flash foward. The pension payroll is now $120M. The economy sucks: tax collections are down, the pension only has $10M in earnings. Somehow the legislature has to come up with not only the $80M but another $30M.

Of course, it's more complicated than that. But in the shrinking private sector of pension/defined benefit plans, the level of expected fund returns is maybe half of a typical public sector fund target return of 8%. Remember there's a zero sum relationship; so private sector companies will pay more into their pension fund to make up for the more realistic returns.

In the meanwhile, sweetheart pension deals have employees earning up to 3% of their final salary base per year of service, with eligibility for some by the mid-50's, with retiree life expectancy maybe a good 3 decades or more. For many local or state budgets, the pension line item is rapidly becoming the biggest item in the budget leaving policymakers with a choice between raising taxes or cutting essential services.

From what I understand in California, the justice system is basically saying, I don't care about your budget problems, the deal the corrupt Democratic legislature made in flush times to public employees is binding on future legislatures: a deal is a deal.

Let's keep in mind Baby Boomers, born starting in 1945, started retiring from a social security standpoint, as early as 2007 at 62; for government pensioners, it started a few years earlier. This means we won't see new Baby Boomers entrants stop until 2027 or so, with government benefits tapering off around mid-century.

So Jerry Brown announced a reform, which basically grandfathers all Baby Boomers, and tweaks the system for new state employees (whom are NOT Baby Boomers) instead of putting them into a defined contribution (401K-like) plan. So, from my perspective, two major failures: (1) it doesn't do squat for the unsustainable Baby Boomer obligations, which is the real issue to address; (2) it doesn't stop the madness, e.g., why my employers (including state universities) have offered defined contribution, not defined benefit programs.

What led to this rant was a recent Chicago news story about Chicago public schools which will see its pension obligation more than triple next year due to an expiring partial pension contribution holiday and mediocre fund returns:

Presented to the board of the $9.4 billion agency today, the report discloses that on a market-value basis, the fund had a return of minus 0.4 percent on investment for the year ended June 30.  But [whatever return rate is used, including up to 1%]  is well short of the 8 percent return on investments that the retirement system assumes. The combination of the end of the holiday and the negative investment return means that CPS will have to come up with $600 million for pensions in the next school year — much more than the $195 million it's paying this year, and $70 million more than the $534 million that had been expected.

Take a wild guess where teacher unions stand on the issue (can you say, "let the taxpayers eat cake"?):

Ginger Ostro, CPS' budget director, said the shortfall underlines the system's need for help in Springfield, meaning more state cash or, more likely, reforms that would reduce benefits to retirees.

CTU Vice President Jesse Sharkey said the union is “willing to have conversations,” but only if more revenue is on the table, too. “The conversations can't be just about how we cut benefits for people in their sunset years,” he said

Pension fund executive director Kevin Huber has said the fund indeed needs a steady stream of contributions to remain solvent. But he also confirmed that money that should have gone toward pensions was spent on other things, including a regular stream of annual 3 to 4 percent teacher raises in the past two decades.

Expletive deleted. Note to Sharkey: your members already got part of their pension in advance: those annual 3 to 4 percent raises.

Hinz does a backup piece on how CPS got itself in this mess. It used to be teachers contributed more into the pension fund:

 But the stage for future trouble was set in 1981. That's when the Chicago Board of Education, in one of its dumber moves, cut a deal in which, in exchange for no salary hikes, it agreed to begin picking up the 7 percent of salary that teachers and other members were then contributing each year toward their pension. (Teachers still put in an additional 2 percent of salary themselves.)

In 1995 at the request of the board, the General Assembly agreed to let CPS quit paying anything into the pension fund for 10 years and, instead, use the money for other things.

But when the market dropped, so did the funded ratio. By 2005, it was down to 79 percent — due not only to the market decline but to the absence of a cumulative $2 billion that the board would have had to contribute under the old policy but didn't under the 10-year payment holiday. 

Ron Huberman, CPS chief at the time, went to Springfield and got another, partial pension-payment holiday. This one lasts from 2011-13 and allows the board to put in only $200 million a year — not the $600 million it was supposed to contribute.

Between 1995 and 2011, the board agreed to annual pay increases of between 3 percent and 4 percent every year. And, I stress, those were across-the-board raises, above and beyond the "step" hikes for experience, obtaining a higher college degree, etc

The funded ratio, predictably, has kept dropping and was down to a miserable 59.76 percent in 2011.

Political Cartoon

Courtesy Michael Ramirez, IBD, and Townhall

Political Humor

It was just announced that President Obama will speak at Ohio State’s graduation in May. The president has a lot in common with those students. He’s currently in his fifth year and swamped with debt. - Jimmy Fallon

[And they'll find employers thinking what they've done over the past 4 years hasn't adequately prepared them to deal with today's economy.]

The U.S. Postal Service is launching a fashion line. Some people think it is a bad idea. But I think if the post office gets behind something, it'll eventually turn out to be a good idea. Just look at sponsoring Lance Armstrong. - Craig Ferguson

[Order now to get it in time for Christmas. Closed Saturdays. Delivery unavailable in some areas.]

Musical Interlude: My Favorite Groups

Aerosmith, "Sweet Emotion"

Miscellany: 2/21/13

Quote of the Day
Practice is the best of all instructors.
Publilius Syrus

The Need for Intellectual Property Reform

A patent troll is basically a rent-seeker.  Something like 100 software patents a day are granted, many broad and vague. A software developer could independently implement something that a prior developer filed on and not even realize until he launches a successful product and gets a visit from a lawyer demanding a cut of revenues although the developer is unaware of the patent-holder's work. This can lead to analysis paralysis and lower innovation through legal barriers to entry: Big corporations like Microsoft can staff legal departments to scrutinize patents and deal with trolls; small developers don't have Microsoft's scale and revenues.



3 Reasons for Conservatives to Cut Defense

This clip was initially published over a year ago but holds true today as we review the sequestration. I would put manpower cuts back on the table and reduce spending by a small flat percentage across the board, empowering more local managers, say, to find operational savings, say, in staffing, training, etc., consolidating bases, including some foreign bases (say, in Europe and Asia).



Entertainment Potpourri

• The Jack Swagger/Zeb Colter Kerfuffle. In the scripted world of professional wrestling entertainment, the object is to vest the crowd in the match, and regional/national personalities or symbols have often played a role. The good guys (babyfaces) might might come out wearing local sports team gear while the bad guys (heels) may characterize the local team and their fans as losers. This also spreads to national pride with all-American flag-bearing Hacksaw Jim Duggan, Sgt. Slaughter or former Olympic Greco-Roman wrestling champion Kurt Angel, while Russian-anthem singing Nikolai Volkoff, the US-hating Iranian Iron Sheik, the current Swiss US champion, Antonio Cesaro, and various Nazi characters have played despicable heels.

Jake Hager aka Jack Swagger is a former All-American University of Oklahoma (Greco-Roman) wrestler WWE recruited after graduation. The Swagger character, the All-American American, despite winning a couple of titles, was never presented in a babyface patriot character; he comes across as aloof and self-superior with passably marginal mike/promo skills. For whatever reason, since losing one of the two major WWE titles, his star seemed to be on the decline over the past year or so, jobbing (losing) to less impressive talents and finally dropping off TV just to return for the last PPV where he won the right to challenge for his old championship belt. The current character comes across  as more angry, less cocky. They've assigned a heel manager, Zeb Colter (I never noticed it 'Colter' vs, e.g., 'Ann Coulter' until recently). At a time when the Congress is seriously pondering immigration reform since the 2007 crash-and-burn, the Colter character is a clear incindiary, scapegoating  immigrants as the source of the nation's problems,  non-English speaking net taxpayer beneficiaries of social support programs.  I know it's all a work--scripted lines, no doubt to build a championship bout with Mexican aristocrat babyface  champion Alberto Del Rio. I find the rants unlistenable and offensive--and way off base. An aristocrat isn't dependent on poverty-level support. Perhaps they are building to feuds against Latino stars Rey Mysterio and Sin Cara. Oddly enough, WWE has had to deal with temporary real immigration issues for its top Irish and Scottish stars.

You have to wonder what stunt the writers come up with next. Del Rio has a gimmick of driving to the stage in an expensive auto. Are they thinking of having an "Arizona cop" pull him over and ask to see his (unavailable) papers? 

 When the conservative website Breitbart complained to WWE about the gimmick as being anti-Tea Party, I was confused. I agree some conservative populists (including Ann Coulter) went ballistic in 2007 and probably took credit when the compromise failed, but the failure had more to do with compromise killing amendments, including killing temporary visiting worker reforms. I think it has more to do with the props in Zeb Colter's "State of the Union" address on Raw (here): in particular, the Gadsden (don't tread on me) flag on the podium and and standing flag in the background. Many in the Tea Party do identify with the Gadsden flag--but they are referring to the tyranny of government, not immigrants. A lot of Tea Party supporters, like me, are strongly pro-immigrant; we don't like trade or immigration policy manipulating access to markets or resources. A number of populist conservatives allied themselves with the Tea Party, but the Tea Party mostly stood against unlimited government, not on a laundry list of other issues: abortion, immigration, etc. We have significant differences with populists, e.g., on Big Defense, the Patriot Act, interventionist policy, the drug war, etc.

All of this may have just become a moot point, because Hager/Swagger was recently stopped for speeding and charged with possession of marijuana and DUI. This is a bonehead move by someone whom is right in the middle of getting a monster push with a possible lucrative title run.  After having  the former champ run a humiliating gauntlet of jobbing (losing) to other, less talented wrestlers over the recent past, WWE CEO McMahon is reportedly furious over the arrest. Angry enough to make an example of Hager by stripping him of the opportunity of a big Wrestlemania paycheck? Could they work the arrest into the story line? Not sure. I know they are trying to build heat on Swagger, but I would lay off the political rhetoric which probably confuses the audience. I could see an angle where Colter pays off the vigilante Shield to take out Del Rio, and Swagger rival Ziggler cashes in MITB to take the title.

Political Humor

This is sort of a man on the street's version of Jaywalking. Nobody reading this blog, knowing how I feel about fiat currency,  would have picked the $5 bill. I mentioned that the US had to suspend selling eagles early this year because of silver inventories:

Above all, as legal tender, [American Eagle Silver Bullion Coins are] the only silver bullion coins whose weight and purity are guaranteed by the United States Government.  They're also the only silver coins allowed in an IRA. Prices are based on the market price of silver, plus a small premium to cover minting and distribution costs. 

The market price for an ouncle of silver is available, e.g., here. Novices, below, confuse denomination with market value. The value of a particular coin, of course,  varies by supply and demand, condition (a premium for uncirculated or proof-quality), and commodity value. For example, the melt value of a 1964 dime is about $2.07 at today's prices.



Political Cartoon

Courtesy of Gary Varvel and Townhall

Musical Interlude: My Favorite Groups

Aerosmith, "Dream On". I was surprised to see this single didn't chart better. I consider it a rock classic, like Led Zeppelin's "Stairway to Heaven". Brilliant songwriting, arrangement, musicianship and vocals. Those last high notes will challenge your falsetto in the shower.

Miscellany: 2/20/13

Quote of the Day
Growth demands a temporary surrender of security.
Gail Sheehy


Crackpot Quote of the Day

As the saying goes, a new-born puppy knows no fear of a tiger. South Korea's erratic behavior would only herald its final destruction. - North Korean diplomat Jon Yong Ryong

As if the Chinese high maintenance problem child repressive Communist monarchy has any standing to call any other country "erratic"! I wish the Chinese would offer the North Koran leadership asylum and allow for the peaceful reunification of Korea. What's it afraid of --commerce breaking out across the border?

What Is Wrong With Some People?

From the NY Daily News:

Isaiah Aguilar, 2, was playing with his sister outside his home in Sabinal, Texas, shortly before the attack. The girl blew up a balloon for her younger brother, but it blew into their neighbor's backyard. Little Isaiah chased after it toward a tied-up female pit bull. He was mauled to death  as the canine's owner watched the bloodshed from his doorway and did nothing to stop it, according to the child's parents.

The boy's father himself almost came under attack trying to retrieve his dying son.

Some Notable Quotes on the Minimum Wage Kerfuffle

The "grumpy economist" has written one of my favorite posts on the topic. (Great essay. Very readable and highly recommended.) A few excerpts [Cochran is referencing White House spin in advocating raising the minimum wage]:

And even then, the modern Scrooge ("are there no workhouses?") might ask, "Is there no earned-income tax credit? Is there no home heating subsidy? Are there no food stamps? Is there no schip or medicaid? Have they not applied for social security disability? Are there no section 8 housing vouchers?"

The point is not to be heartless -- government programs or not, life on the lower end of America's economic and social spectrum is pretty awful. For example in zip code 60619, just south of the University [of Chicago], there are "4,967 married couples with children, and 12,745 single-parent households (2,655 men, 10,090 women)."  The point is, if we seriously want to address the problems of the "working poor," if we want policies that actually work rather than spew a lot of TV time and make us feel good, let us paint a vaguely realistic picture of what their life is like. Absolutely nobody (except perhaps illegal aliens) is trying to support a family on $14,500 from a full time minimum wage job, period.  The actual economic life of the "working poor" is a welter of government programs, transitory employment, and a lot of illegal activity

Yes indeed, let us help families to "finally get ahead!" Let us talk about lousy schools, incentive-destroying social programs, horrendous violence, life-destroying incarceration, and the war on drugs run amok. The minimum wage may slightly help the few who can get such jobs, and put such entry-level jobs slightly more out of reach for many others. But it's just irrelevant to the real, first-order problems such families face.

 Even if the Administration's theory works, it is exactly the same as a tax on sales of local businesses (i.e. cost passed on as higher prices) to subsidize employment. Back to Greg Mankiw's question about how much the wage should be: on this theory there is no limit! Now we really have crossed the line, from serious economics, to fiddling while Rome burns, to believing in magic.

From Greg Mankiw's textbook on economics (my edits):

The minimum wage has its greatest impact on the market for teenage labor. The equilibrium wages of teenagers are low because teenagers are among the least skilled and least experienced members of the labor force. In addition, teenagers are often willing to accept a lower wage in exchange for on‑the‑job training. Many economists have studied how minimum-wage laws affect the teenage labor market. The typical study finds that a 10 percent increase in the minimum wage depresses teenage employment between 1 and 3 percent. Because the minimum wage raises the wage that teenagers can earn, it increases the number of teenagers who choose to look for jobs. Studies have found that a higher minimum wage influences which teenagers are employed. When the minimum wage rises, some teenagers who are still attending school choose to drop out and take jobs.

Advocates of the minimum wage view the policy as one way to raise the income of the working poor. They correctly point out that workers who earn the minimum wage can afford only a meager standard of living. Opponents of the minimum wage contend that it is not the best way to combat poverty. They note that a high minimum wage causes unemployment, encourages teenagers to drop out of school, and prevents some unskilled workers from getting the on-the-job training they need. Moreover, opponents of the minimum wage point out that the minimum wage is a poorly targeted policy. Not all minimum-wage workers are heads of households trying to help their families escape poverty. In fact, fewer than a third of minimum-wage earners are in families with incomes below the poverty line. Many are teenagers from middle‑class homes working at part-time jobs for extra spending money.

From a 2001 Mankiw column on the so-called living wage:

Like most other prices, wages are set by the market forces of supply and demand. The major difference between high-wage workers and low-wage workers is not that the former are better organized or better liked by their employers -- it's that their higher productivity enhances the demand for their services. The living wage campaign wants to repeal the law of supply and demand and raise wages by fiat. The goal is to help low-wage workers. Unfortunately, it wouldn't work out that way. One effect of a higher wage is a reduction in the amount of labor that employers demand.

Living wage advocates often point to a study by economists David Card and Alan Krueger, which claims that raising the minimum wage does not reduce employment. [FYI: Krueger served under Clinton.] Emphasizing the Card-Krueger evidence is like a doctor prescribing a drug relying on a single controversial study that finds no adverse side effects, while ignoring the many reports of debilitating results. In addition to reducing the amount of labor demanded, a high minimum wage compounds the problem by increasing the amount of labor supplied. In other words, not only are there fewer jobs available for unskilled workers, but more people apply for those jobs. A better weapon to fight poverty is the Earned Income Tax Credit, a provision of the income tax system that supplements the income of low-wage workers. Like any spending program, this policy has the cost of higher taxes on everyone else.

Let me expand on the Card-Krueger topic: I have discussed some of the limitations in past posts--for example, the reliance on fast food restaurant samples from a small number of states, the reliability and validity of the minimum wage questionnaire used, etc. But from a theoretical perspective there should be a compelling theoretical explanation why minimum wage floors are a specialized exception from general supply/demand considerations. It is an implicit government tax that only effects employers that utilize low skill/experience labor.

Here's another Mankiw nugget:

An ec 10 student recently asked me why some economists, including some prominent ones, favor an increase in the minimum wage, in light of the standard economic analysis of price floors. (Mankiw asked one of 600 economists signing a petition in support.) He would prefer increased cash payments to the poor, such as a much-expanded earned income tax credit (EITC) or a more general negative income tax. But if his first-best policy was politically impossible, a minimum-wage increase was, in his view, an improvement over the status quo. He admitted that the minimum wage had adverse effects on employment, but he judged those to be modest in size.

The minimum wage is not well targeted to poor families. Many minimum-wage earners are like I was in the summer of 1976: teenagers from middle-class homes with minimal skill and experience, getting their first taste of working. [According to Richard Burkhauser (Cornell University) and Joseph Sabia (University of Georgia)]:

•  Only 12.7 percent of the benefits from a federal minimum wage increase ...would go to poor families. In contrast, 63 percent of benefits would go to families earning more than twice the poverty line and 42 percent would go to families earning more than three times the poverty line. 

Political Cartoon

Courtesy of Eric Allie and Townhall.com

Political Humor

[After Tiger Woods/Obama golf joke] Actually, you know what the president's handicap is? He doesn't understand economics. - Jay Leno

 [We can also add Joe Biden, Harry Reid and Nancy Pelosi.]

You knew this was going to happen. Dozens and dozens of lawsuits have already been filed against Carnival Cruise Lines. Well, if you thought the ship was filthy, slimy, and disgusting, wait until these lawyers get involved. - Jay Leno

[Or the Congress holds hearings, and committee members go on fact-finding missions...Did the lawyers get to the clause in the passenger contract that "stuff happens"?]

Lawmakers in Montana are considering a bill that would make it legal for people to take road kill home and use it as food. When Montana residents heard that, they were like, “Wait, that was illegal?” - Jimmy Fallon

[Montana is trying to save highway maintenance money in disposing of dead animals. More seriously, libertarians aren't amused by the need to legalize something that should already be legal; recall the argument against the Bill of Rights was that the enumeration is unnecessary, that an enumeration would eventually be viewed by courts as exceptions FOR liberty against the otherwise prevailing presumption of government discretion (which I believe most libertarians would agree the status quo has become). But remember the story in Kentucky over a Chinese restaurant temporarily shut down down after customers reported to be a (road kill) white-tailed deer wheeled into the back of the restaurant. (The owner said the deer was being stored temporarily at the restaurant, not to be used for restaurant dishes.) The restaurant was cited over health reasons and for possession of an untagged deer. I never hunted as a boy so I wasn't familiar with tagging laws (e.g., here) and/or their relevance to roadkill deer. I think the charge related to deer tagging is questionable unless there was evidence the deer had been shot.  I would say that I wouldn't expect a restaurant to be also operating an on-site butchery or meat processing service with its own relevant licensing.]

Musical Interlude: My Favorite Groups

The Supremes, "Someday We'll Be Together". The final #1 hit, as lead singer Diana Ross would leave the group to launch a successful solo singing career. (I still think Diana Ross should have won the Oscar for 'Theme from Mahogany'.  I remember I bought a Diana Ross hits compilation, and Mom approved, saying she is a good singer. I was very impressed Mom knew who she was.) It was a sad period of time for pop music fans--Diana Ross leaving, the Beatles disbanding, Simon and Garfunkel splitting up. This is the end of my Supremes' retrospective. Next up: Aerosmith.