Posted by Marc Hodak on May 22, 2008 under Economics | Comments are off for this article
Buffet says he likes Obama. Icahn says he doesn’t trust him on the economics.
“I personally think he would be a terrible president,” Icahn said, arguing that Obama would probably go on a “huge spending spree” that “the country can’t afford right now.”
It’s always difficult to comment on political opinions about economics because politics is so opposed to economics. Economics is about decision-making at the margin, where trade-offs are easy to discern, and decisions about trade-offs are easy to evaluate. Politics is about bundling decisions with the express purpose of making such trade-offs impossible. You don’t want that extra tax dollar to fund the war rather than children’s health care? Tough. Your taxes pay for the bundle, and you don’t have any choice about the bundle or about paying for it.
So, the economic bundle that goes with Republicans versus Democrats is too unwieldy to provide any clear comparison between the two. For example, Icahn presumably would have felt more comfortable about Bush than he does about Obama on economics (so would I), yet Bush oversaw a huge spending spree that this government couldn’t afford. That’s not damning to either Bush or Icahn; the spending spree is a built-in fact of life for any president given the powerful incentives toward irresponsibility that drive Congress.
On the other hand, if Buffet is so sanguine about the higher taxes and the capabilities of his Democratic buddies promising to bring them on, then he has a choice at the margin about that. So, why isn’t he giving any of his surplus wealth to the government instead of to a place like the Gates Foundation? Another billionaire offers a good answer to that.
Posted by Marc Hodak on May 21, 2008 under Self-promotion | Comments are off for this article
I was explaining to my Russian audience why their oligarchs deserved their billions, when someone decided to launch a pointed comment…
I hear they found something that looked like a controller in the bag of an attendee representing the AFL-CIO. Or maybe one of those Towers Perrin hecklers.
Posted by Marc Hodak on May 20, 2008 under Scandal | Comments are off for this article
It’s becoming increasingly clear that this was the approach taken by Texas CPS in the FLDS raid that took over 460 children away from their mothers. What reason was there for this?
Joseph and Lori Jessop…said they didn’t know where the state had sent their 4-year-old daughter and 2 1/2 -year-old son, but as a nursing mother Lori Jessop has been allowed to care for her infant son, who is in a foster care facility in San Antonio, during the day.
Joseph Jessop is 27, and Lori Jessop is 25, according to court documents. They’re not in a plural marriage and lived in a single-family unit at the Yearning For Zion Ranch.
So, why are their children still stripped from them? Why they still forbidden to return to their home under the threat of not being able to see their kids at all?
Update: A Texas court of appeals has spanked CPS, and restored a sense of semblance to this travesty.
The debate between scientists and theologians continues. Actually, the link mostly recounts the surprisingly diverse opinions about God held by scientists. Here are the most common answers to the question: Does science make belief in God obsolete?
— Science has failed to find natural evidence of God. Natural evidence is all there is. No God. Case closed.
— Slightly softer is this line of reasoning: Science erases the “need” for God as an explanation of our experiences, and God either doesn’t exist or is at best a hypothesis (to the agnostic).
— And then there’s the view expressed in the title of University of Hawaii physicist and astronomer Victor Stenger’s new book, “God: The Failed Hypothesis — How Science Shows that God Does Not Exist.”
Then, we get into the more tortuous explanations attempting to reconcile science and religious belief. These are variations on common fallacies about science:
1. Science hasn’t proved that God doesn’t exist, so He might.
Weak. One can’t prove a negative assertion. Resting one’s case on the lack of proof negates reason. In fact, most serious theologians have long since given up on reason as a basis for God; they stipulate that it’s purely a matter of faith.
2. We can redefine “God” as the ‘wonders of science’–viola, no contradiction.
Super weak. I can define my shoe as your watermelon. It doesn’t make my shoe any more appetizing.
3. Biggest reach of all: “It is this claim to a monopoly of meaning … that makes science and religion look like competitors today.” The implication is that they don’t have to be, i.e., it’s just semantics.
Weaker than the gravitational field around a King James Bible. Science is not about meaning. It’s about relating X to Y. That relationship doesn’t mean anything, until someone invents that meaning, which is separate from the theories, hypotheses, tests, and conclusions that comprise the scientific process.
Inventing meaning is practically all we humans do, besides maybe grow food and make toys. Religionists must consider that science can be meaning-free. The debate is ultimately between a belief in meaning and an acceptance of meaninglessness.
In a way, the fallacy of science as a different kind of meaning is the most difficult to dispel in a debate about God. People who believe in God cannot imagine that anyone truly can’t. People who don’t believe in God cannot fathom that anyone really can. That’s the unconquerable divide.
I will finish by paraphrasing a believer who is also a skeptic: I am not one of those people who believes that God is involved in the world. On the contrary. Observe the world around us. Observe the world through history. Does it look like God’s involved?
ABC News answers the question: How divergent can a headline be from the content of a story? When it comes to CEOs, the headline and story apparently don’t have to have anything more than the flimsiest connection. Here’s a recent headline and lede (and accompanying ‘fat-cat’ photo):
Hard-Charging CEO Rakes in Millions
Blankenship Earned More Than $23 Million in 2007
The CEO of the country’s fourth largest coal company raked in more than $23 million in 2007.
And here is the last paragraph:
Blankenship receives the lavish perks that many CEOs are accustomed to, such as the use of the Massey corporate jet, which cost the company and its shareholders more than $180,000 in 2007.
So, this story is clearly about how much money a CEO made, right?
Well, the entire rest of the story, completely sandwiched between the first and last paragraphs, was about this CEO funding a lavish trip and election campaign for a state supreme court justice. The actual lede, buried two-thirds of the way into this story is this:
Fellow justice Larry Starcher told ABCNews.com he believes Blankenship has effectively bought himself a seat on the Supreme Court of West Virginia.
Apparently, the media, and presumably their readers, are more concerned with the raw amount that a CEO legally earns than about a possible corrupt relationship between that CEO and a state court judge.
Should CEOs make a lot when their workers wages are rising only modestly, if at all?
Let’s say that you’re CEO of an electronics company. You have always gotten those electrical components from a domestic supplier that is a government-protected monopoly. One day, you cleverly figure out how to sidestep that monopoly by sourcing from abroad. Your company saves a lot of money, and profits go up. The shareholders would like to reward, not punish this behavior. That’s how markets work.
Now, as certain compensation critics would have it, you have injured the earnings of the domestic producer. Your pay should be proportionately lower, to reflect their reduced earnings. Make sense? I didn’t think so. But if you replace “government-protected monopoly supplier of materials” with “government-protected monopoly supplier of labor,” then you arrive at the same illogical endpoint; the wages of managers linked with the cost of inputs. That, of course, is a recipe for bleeding the firm with a managerial bias toward uncompetitively high labor costs.
Insisting on a linkage between CEO pay and the wages of their employees is what I’m calling the Wage Link fallacy. It’s based on a primciple that is central to communism: An Individual’s wages should be unconnected to their productivity. Most purveyors of the Wage Link Fallacy, besides outright communists, are unions and their fellow-traveling politicians, most recently including EU officials from yesterday’s FT.
Excessive pay awards for company executives came under fire yesterday from the European Union’s senior economic policymakers, who condemned them as “scandalous” at a time when ordinary employees are under pressure to accept modest wage deals.
Notice how pay is prejudged as “excessive” against the standard of wages of “ordinary employees.”
Those pressing the Wage Link Fallacy invariably are pushing for government to trump the verdict of the market in assigning a small portion of productivity gains to those who create them. They wish, instead, to punish the managers who create those gains, the domestic consumers who benefit from them, and the employees outside of the unions’ sphere of influence who help make them possible.
David Chun made a great find among an early filer this proxy season.
Many companies are under increasing pressure by the SEC to disclose specific metrics and targets. Issuers (companies) are resisting, claiming that their metrics and targets are confidential information, which disclosure might compromise their competitive position. This is often (but not always) a difficult proposition to defend, especially if your company is allegedly paying bonuses based on EPS targets and is already providing earnings guidance to the investor community.
Well, Equilar, David’s firm, turned up the proxy of AEP, where they provide an explicit EPS guidance range, and disclose how their senior executive bonuses are tied to that very same range. That seems pretty straightforward.
Unfortunately, when the SEC asked for more disclosure, they were thinking that all comp plans would be as simple as AEP’s. But tying senior executive bonuses only to EPS, while simple, is not necessarily optimal. Many companies have more involved bonus plans. Some of this complexity is functional and value-enhancing, some of it is simply obscurantism. Who is going to decide which is which? The SEC’s enforcement division? Developing.
A steep descent brings Clinton’s plane to Charleston’s hilltop airport. After an appropriate wait, she steps from the plane and pretends to wave to a crowd of supporters; in fact, she is waving to 10 photographers underneath the airplane’s wing. She pretends to spot an old friend in the crowd, points and gives another wave; in fact, she is waving at an aide she had been talking with on the plane minutes earlier.
What most people don’t consider is the fact that this is normal, not exceptional, presidential politics. She didn’t learn to be this kind of an actor just after Indiana.
BTW, we all know where she learned the “point and wave” trick. Some people can pull it off brilliantly.
Some can’t.
Don Boudreaux had the best depiction of the what drives a person to such ignominy.
Posted by Marc Hodak on May 13, 2008 under Collectivist instinct | Comments are off for this article
Over 100 officials burst into the plant. These were the same officials who had been known, in previous similar raids, to have “used humiliation, opposite-sex searches and long periods of secrecy.” Here is how it went down:
Larson said the agents told workers to stay in place then separated them by asking those with identification to stand to the right and those with other papers, to stand to the left.
“There was plenty of hollering,” Larson said. “You couldn’t go anywhere.”
When asked who was separated, Larson said those standing in the group with other papers were all Hispanic.
In America.
I remember when we didn’t live in a society where hundreds of people could be rounded up and asked for their papers.
So it’s kind of refreshing (in a pointy-headed, academic way) to see a regime where their thirst for power is completely out in the open, where those in power don’t pretend to give a rat’s *ss about anything other than keeping it. The Burmese junta is completely open like that. Amazing. Dissent or challenges of any kind? Not tolerated. Democracy? Out of the question.
In democracies, politicians disguise the fact that in a choice between their stated ideals versus getting power, most of them consider ideals expendable. In Burma, they are completely open to everyone (but their own people, if they can manage it) that in that in a choice between helping millions of their fellow citizens versus risking losing any part of their grip on power, their fellow citizens are expendable.
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