Posted by Marc Hodak on April 27, 2008 under Movie reviews | 
OK, I accidentally took my wife to a Holocaust film. She would have been perfectly happy never to have seen one; she can’t stomach the violence. So, to prevent any similar misunderstandings out there, let’s be clear this is not a heist flick.
Instead, it’s a very well done film about a master counterfeiter, Salomon Sorowitsch, whose particular genius was put to use by the Nazis in a massive, desperate scheme to undermine the Allied economy. The film was “based on a true story” which, of course, means everything in it was made up except for the basic premise. The German’s Operation Bernhard, for real, created a lot of fake money–over 130 million British pounds in small denominations. But, like all good stories, this is mainly about relationships, which are revealed through the emotional and verbal content of the script. This script relied on the recollections of one of the survivors, Adolph Burger.
In the end, the interactions are stylized and organized in a sensible and powerful manner. That’s probably the best one can do for an event that evokes as much senselessness and powerlessness as the Holocaust. That Burger’s character is neither central nor particularly sympathetic, lends authenticity to the author’s recollections. Burger was willing to sacrifice himself and his fellow prisoners to deny the Germans the fruits of their talent, while Sorowitsch stood against him to preserve their lives for as long as possible. Both goals in a sense represented a blow to their enemy. In the end, via a delicate, somewhat accidental balance of sabotage and achievement, the counterfeiters sufficiently delayed their work so as to preserve their lives, while limiting the amount of cash that the Nazis could use.
The era was beautifully evoked with a photochrom feel and vintage tango music done slow. Sorowitsch was well-acted by Karl Markovics, whose face would do justice to a broken boxer. That the other prisoners and the Nazis were portrayed as two-dimensional characters is not a criticism of the film so much as a commentary of the extreme constraints under which all of these characters existed in that place and time. The film certainly deserved its Oscar. If you and your date can deal with the intensity of institutionalized violence, then you won’t be disappointed.
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Posted by Marc Hodak on April 26, 2008 under Politics |
Peggy Noonan, among the finest writers alive, laments the treatment of middle-aged women by the TSA.
All the frisking, beeping and patting down is demoralizing to our society. It breeds resentment, encourages a sense that the normal are not in control, that common sense is yesterday.
Having just spent another week on the road, I will add only this: The president and his fear hawks will say “Noonan doesn’t get it. (Or, Hodak doesn’t get it.) This is a war against terrorism.”
It isn’t, Mr. President. It’s a war against your own people. Osama bin Laden created only few hundred criminals. You created a nation of criminals. As Noonan points out:
But America knows not to ask. America is guilty until proved innocent, and no one wants to draw undue attention.
Posted by Marc Hodak on April 19, 2008 under Scandal |
What began as a story about an abusive Mormon sect is quickly turning into a one about abusive Texas authorities. So far, 416 children have been shorn from their mothers on the rationale, or perhaps pretense, of protecting them. The state says the children were abused; the adults and the children say they weren’t. The judge, in a court proceeding that unflatteringly evoked the Wild West, ordered the children be placed into foster care.
Here is what a psychiatrist testifying on behalf of the state had to say:
He also conceded that the children, taught from birth to believe that contact with the outside world will lead to eternal damnation, would suffer if placed in traditional foster care.
“If these children are kept in the custody of the state, there would have to be exceptional and innovative programmatic elements for these children and their families,” he said. “The traditional foster care system would be destructive for these children.”
CPS (Child Protective Services) spokeswoman Marleigh Meisner said the department was pleased with the judge’s ruling and believes that the children will now be safe.
This kind of self-satisfaction is what gives fuel to CPS critics, undermining public confidence in the whole system.
BTW, as soon as the story broke, I was skeptical about “Sarah,” the 16 year-old girl who made the call from the ranch triggering the Texas raid. The size and scope of the raid seemed disproportionate to the nature of the call, even as bad as that was. Once the raid was completed and they claimed not to have found “Sarah,” it began to smell like the WMD justification for Iraq. At this point, it’s becoming ever clearer that “Sarah” was a hoax. My bias against conspiracy theories tells me it’s unlikely that the hoax was perpetrated by the state, but I wouldn’t be surprised if, like the WMD justification, neglect combined with an itchy trigger finger such that proper skepticism–or any sense of restraint–failed the authorities.
Finally, I tend to give more credence to reports about the action from people close to the action:
Local opinion on this is kind of mixed. By and large, people are in support of breaking up a group that was engaged in the systematic sexual abuse of teenage girls. People also have some real qualms that the state went too far in taking all the kids.
I can’t imagine why the state took all the boys. I haven’t heard anything indicating any boys were abused, but the state argues that they were being raised to be abusers. I’m not sold that this meets the legal standard for “harm or imminent risk of harm.”
I don’t know why the state separated the kids from their mothers. I haven’t heard anything indicating the mothers were abusing anyone.
Its rather odd that we now have the purported victims suffering and/or in custody (mothers and kids) while the perpertators (the men) are still walking around free.
There are almost certainly severe due process problems going on in the hearing on all this. The kids aren’t getting individualized hearings and the hearing itself are a total clusterfuck.
The gossip is that the judge is pretty much taking the state’s side in all this.
Posted by Marc Hodak on under Executive compensation |
That sounds like a silly argument, but it’s basically what the State of New York is telling a couple of HMOs. Here’s the line of argument:
Two of the largest HMOs are seeking approval for a merger, which would make them the largest HMO in the state. Each of CEOs had performance-based incentive plans last year–plans that put a significant amount of their pay at risk. It worked. Their firms performed well, and they doubled what they took home the year before.
“We are very concerned about HIP’s announcement that it has doubled the salaries of its top 10 executives at a time when the company has not been performing well,” a spokesman for the department, David Neustadt, wrote in an e-mail message. “As we consider its pending merger with GHI and conversion to a stock company, we will be asking the executives tough questions about this decision.”
So, in one statement, this state official makes three errors, two of fact and one of logic.
Fact #1, their salaries didn’t budge over the two years; what increased were their bonuses, which was pay they had at risk. Fact #2, against what standard had this HMO not performed well? Apparently against some standard that doesn’t account for revenue and profit, the two metrics upon which the bonus plans were based. In fact, the state offers no argument whatsoever that the incentive plans were not reasonably designed. (I personally don’t like rewarding managers for buying revenue, but I wouldn’t call that unreasonable.) They only object that these plans actually paid out more money to the top executives, and call it a “salary” increase.
Logically what does performance-based pay for the executives have to do with any rationale for approving or disapproving a merger? I’ll admit my eyesight isn’t as good as it used to be, but I don’t remember seeing “CEO pay” as a criterion in the antitrust statutes. In fact, the state offers no logic; they only promise to “ask tough questions,” once the cameras are in place.
It’s a shame that we can’t ask these tough questions of the State Inquisitors…er, state officials.
Posted by Marc Hodak on April 18, 2008 under Unintended consequences |
That wasn’t the intent. A number of states (a.k.a. laboratories of democracy) have mandated diabetes coverage in insurance contracts. The idea, of course, was to help diabetics by improving their access to treatment. However, economics tells us that such a law has two likely, secondary consequences:
1) Price increases: This would be the economic result of constraining the right of insurance companies to freely contract with their customers
2) Moral hazard: If the likelihood of disease is partly driven by lifestyle, and people know treatment for the disease will be covered, they might be less conscientious about prevention.
Price increases as a response to mandates has been well-documented. The moral hazard question has been much less settled. Would a diabetic actually get lax about controlling risk factors, like their weight, if there were no marginal cost to treatment?
Well, a study of the moral hazard effect is in: it appears that mandating coverage for diabetes treatments increases incidence of obesity in diabetics. Here is what researchers Jonathan Klick and Thomas Stratmann concluded:
we employ a triple-differences methodology comparing the change in the gap in body mass index (BMI) between diabetics and nondiabetics in mandate and nonmandate states. We find that mandates do generate a moral hazard problem, with diabetics exhibiting higher BMIs after the adoption of these mandates.
The politicians who created these mandates were surely trying to help (thanks guys!). Now we have evidence supporting economic theory that these mandates may actually be counterproductive as well as costly. Now we just have to get politicians to pay attention to economics. After all, what’s the point of running these policy experiments if they are simply ignored?
(HT: Truth on the Market)
Posted by Marc Hodak on April 14, 2008 under Unintended consequences |
By Big Corn, I mean U.S. policy supporting corn growers.
By “policy,” I mean the accumulated, incoherent hodgepodge of subsidies and mandates around growing and selling corn.
If corn policy were debated in an open and thoughtful manner…well, that’s just crazy talk when referring to Congress. But if it were possible, one doubts it would look anything like what we have now, because it would be clear that what we have now creates incentives for environmental destruction and mass starvation, not to mention higher domestic prices, in exchange for financial appeasement of certain special interests.
Corn subsidies significantly contribute to accelerating the burning of the Amazonian rainforest.
“American taxpayers are spending $11 billion a year to subsidize corn producers—and this is having some surprising global consequences,” said Laurance. “Amazon fires and forest destruction have spiked over the last several months, especially in the main soy-producing states in Brazil. Just about everyone there attributes this to rising soy and beef prices.”
So, where were the environmentalists when these subsidies were being announced? Oh yea, most of them don’t believe in economics.
Ethanol mandates promote rising food prices in the U.S. and hunger in the third world.
Our policy makers currently don’t foresee these consequences, partly because they result from interaction among disparate laws that individually make sense to their supporters, and partly from a lack of imagination or concern about secondary consequences of government intervention in the marketplace.
And, after all, why should they care if the worst effects are unlikely to impact their own voters, or at least the ones who write campaign checks?
Posted by Marc Hodak on April 11, 2008 under Executive compensation |
Whenever I’m debating the merits of “Say on Pay” with an earnest advocate, they invariably contend that they are not against CEOs making a lot of money per se, they are only concerned that CEOs make it fairly. They contend that the current system unfairly rewards CEOs due to the laxity or corruption of directors who set their pay, and that giving investors some say over executive compensation will remedy that problem.
One can dispute both of those premises without attacking the motives of those in favor of “Say on Pay,” and I have done so here and here. But I have not been above attacking their true motives, too, here and here. Alas, nothing makes it easier to attack their motives than simply listening to the political supporters of “Say on Pay” on the campaign trail.
Obama, gunning for blue collar votes in Pennsylvania, has been highlighting his support for this regulation, saying that “CEOs make more in one day than their workers make in one year.” Politically speaking, it certainly makes more sense to attack the rich with a subtle conspiracy theory than to expect voters in middle America to digest the subtle governance issues actually being debated in this bill. Obama can conclude that if well-regarded Harvard academics are in favor of it, it’s safe to exploit his support for the bill by any means necessary.
“Say on Pay” proponents may contend that just because most of its supporters are appealing to envy, out of more concern with social issues than governance issues, it doesn’t mean that advocacy on the governance issues is inappropriate or insincere. True enough. But these same advocates generally hold the trump card of politics over rationality: even if there is no evidence that “Say on Pay” will actually help the shareholders, they will tell you, “If we don’t pass this, Congress will come up with something worse”–a veiled threat of substantive regulation of pay. Which is just saying that one should accept a poisoned slice instead of a poisoned loaf.
Thanks.
Posted by Marc Hodak on April 10, 2008 under Invisible trade-offs |
We’ve continually seen cases of a government agency that has failed using that failure as an excuse for more money and more power. I should name this the MM/MP phenomenon as a short-cut, since it’s the most common thing heard from government agencies. The current example is Congress considering expanding the budget and mandate of a Federal Airline Administration that is already largely ineffective and unnecessary.
The main premise of the FAA is that the government cares more about your safety than the airlines that serve you, as if the airlines were indifferent to the prospect of killing some of its customers and frightening the rest away. For anyone who thinks the FAA can do as good a job as the airlines themselves in monitoring safety, consider this comment from someone in a position to compare government versus private airline inspectors:
As a company that is a supplier and maintenance provider to airlines we are frequently audited by both the FAA and the QC departments of airlines. In general the airlines auditors are better, more thorough, and stricter, but at the same time more fair and consistent. Not being restricted to the “letter of the law” they can be flexible in areas where it makes sense and putative on issues that may not be technical failings but would cause problems. The airlines QC departments also act pretty independently and don’t seem to mind calling attention to an issue even if they know it will cause delays or hassles on the operations side. The FAA provides more of a bureaucratic hurdle, and from what I see makes decisions as seemingly arbitrary as that traffic cop. We recently had new inspectors for our district rotate in, and now we are enduring shut down threats over procedures that were fine for the previous 4 years under our old inspectors.”
I think most people would prefer dealing with a private company rather than the government, and would trust private companies to do better job than government. Unfortunately, the ones who don’t tend to run for office.
Posted by Marc Hodak on under Unintended consequences |
The idea behind traffic tickets is to improve public safety. The theory is that tickets create disincentives for things like speeding or running red lights, thereby reducing the incidence and severity of traffic accidents. The fact that these tickets generate revenue for the city or state is supposed to be incidental. But money is never incidental.
An ironic side effect of municipalities handing out tickets for unsafe driving is the incentive of municipal agents to root for this dangerous behavior.
Of course, rooting for dangerous behavior is not the same as facilitating it, right? I mean, would municipalities actually create dangerous situations just to boost their income? For example, would a township reduce the duration of yellow lights in order to increase the number of tickets that it hands out for running those lights when they (quickly) turn red? Would they do that despite the fact that shortening yellow lights increases the accident rate, thus resulting in more property damage and personal injuries? The unfortunate answer is YES, more often than you’d expect.
(HT: Alex T at MR)
Posted by Marc Hodak on April 9, 2008 under Politics |
I’m always amazed by the naivete of people willing to concentrate more power into the hands of politicians for “altruistic” reasons. This is always coupled with the expectation that the “right person” will wield that power in the “right way.”
But look at the evidence. Politicians use their power for reasons they and their supporters believe in, and sometimes for parochial, petty, and sometimes nefarious reasons. But they almost always exercise their power in such a way as to keep it, or get more. Power is a kind of currency that is rarely wasted or left unspent.
So, if a political leader’s choice were to (a) give up power versus (b) keep it, even after 28 years of rule, even if keeping it caused widespread pain, suffering or bloodshed, what do you think the choice would be?
