Dave Friedman's Soul of Wit

Buffett

The Wall St. Journal editorial board on Buffett:

In explaining his charitable motivations this week, Mr. Buffett also went out of his way to say that he is "not an enthusiast for dynastic wealth." This is fair enough, and is also one of Mr. Buffett's arguments for so vocally defending federal death tax rates of 50% or more. But we can't help but point out that Mr. Buffett's gift will itself be shielded from Uncle Sam because it is going to a foundation. So in practice he is in favor of death taxes only for those whose estates are too small to hide in foundation tax shelters.

We'd also note that the foundations he is donating to may well become "dynasties" in their own right. In addition to his Gates Foundation gift, Mr. Buffett also said he will give major donations well north of $1 billion each to separate foundations run by his three children and another in the name of his late wife. These gifts, too, will be shielded from taxation and will allow his heirs to wield power and influence long after the 75-year-old has gone to his just reward. With their tax-sheltered assets, modern foundations have no expiration date and have become hugely important players in policy debates, the culture and even politics.

Which is all the more reason to watch how well the two men now deploy their gifts. We can't think of two people less in need of our two cents than Messrs. Buffett and Gates. But since giving free advice is our business, we'd suggest that they put at least a smidgen of their money back into strengthening the foundations of the free-market system that has allowed them to become so fabulously rich. There's something to be said for reinvesting in the moral capital of a free society and trying to sustain and export free-enterprise policies.

Capitalism has done very well not just by Mr. Buffett but also by the world's poor, as several hundred million Chinese and Indians might attest. African nations in particular need property rights and a rule of law as badly as they need vaccines. On that score we were encouraged by a report this week that the Gateses thanked Mr. Buffett for his gift by presenting him with a book from their personal library: Adam Smith's "The Wealth of Nations."

Buffett is a paradox. On the one hand, he is a moral giant, for he has created billions in wealth. On the other hand, he is a moral coward who should be condemned in the harshest possible terms, for his irresponsible and naive belief that government ought to confiscate a large portion of the spoils of the wealthy upon death. His irresponsible attitude toward the estate tax will forever mar his reputation.

He should repudiate his estate tax views in no uncertain way.

Friends

Apparently, there has been concern of late that Americans do not have as many friends as they once had in some mythical, halcyon past.

Original article here, Dr. Helen's take here, and Stuart Buck's take here

Various reasons and excuses are given: family demands, job demands, commuting demands.

The solution to all this seems rather simple: if having friends is something that is important to you, then (1) don't have many kids, (2) live in a dense urban core, in which your commute time is negligible and entertainment options abundant, and (3) structure your life so that you have time for friends.

Else, quit the complaining and enjoy the life you have chosen to live. If your priority is having four or six or ten kids, then so be it. I consider that a waste of resources (in cash and time terms) but if you don't then you made the right choice. But you can't at once expect to have a whole slew of kids and have an abundance of friends. Likewise, if you commute an hour or two to work every day, you ain't gonna have a lot of time for friends.

Time is finite, and if having friends is an important part of your life then you need to structure your life in such a way that you allow sufficient time for said friends.

Else, as the saying goes, quit the bitching.

In Which I Repudiate Environmentalist Dogma

Jason Fry, a Wall St. Journal columnist, writes in his "Real Time" column about the environmental impact of e-commerce:

A not very intensive week of e-commerce had generated perhaps 50 square feet worth of cardboard. Wrestling twine around the stack, I wondered: Were significantly more boxes going back and forth across the country, or was it just that more boxes were getting to customers like me? Once you start digging for answers, those boxes raise a bigger question: Is the surge in e-commerce a boon to the environment, or does it just make the consumer feel more virtuous?

This is all rather silly and irrelevant, as I explained in an email:

I'll admit my biases up front: I'm no environmentalist, skeptical as I am about all manner of environmental dogma from Gore to the kid on the street begging for signatures.

That having been said, the reasoning you display here seems faulty:

One big variable is how goods get from a company's warehouse to the consumer. Part of e-commerce's appeal is speed -- but that speed has an energy cost, and it can be considerable. Consider a hypothetical product that arrives in the U.S. by boat and is trucked to a warehouse and then to a retail store, where you buy it and take it home by car. Now, imagine the same product, only it's ordered online -- and since you expect it to arrive in three or four days, it goes from the warehouse to your house via a shipping company's jet and truck. You didn't drive to the store, and that jet and truck should be bringing lots of other orders for people who also didn't drive. But it takes a lot of energy to move freight by jet -- more than 14,000 BTUs per ton-mile, to lapse into energy-efficiency talk, compared with more than 2,000 BTUs per ton-mile for a truck. And what if the jet or truck isn't full? The transportation costs haven't magically gone away -- they've just been hidden from consumers at the end of the chain.

While it's true that e-commerce entails, for the most part, energy costs that are either unseen by the consumer or else folded into basic utilities such as electricity and internet access, it is nonetheless not the case that it is more energy-efficient for one to drive to the store or stores rather than buy goods online and have them shipped.

Consider:

(1) UPS and FedEx do not deliver only to your address, but to all addresses within a given radius of your home. Those are deliveries that would otherwise be spread over hundreds or thousands of households. Your argument implies that it is more energy-efficient for those hundreds or thousands of households to get in their cars, drive to the mall, and drive back, than it is for one UPS or FedEx truck to deliver all these packages.

(2) As to the issue of planes or trucks ferrying goods to not be full: well, UPS' and FedEx's stock price are likely good proxies for the extent to which these companies' logistics systems avoid empty trucks or jets because those are costs that those companies would have to eat. Last time I checked, both companies' stocks were doing quite well. I don't think the energy or capital costs associated with empty planes or trucks are as big a concern as you seem to imply.

Finally, your reference to recycling the cardboard boxes in which your goods are shipped is itself environmentally unfriendly. Recycling paper consumes more energy than does logging trees, shredding the wood to pulp and creating paper thereby. It also does not recoup the capital invested to establish and maintain such programs, and, therefore, in addition to being environmentally irresponsible, is also fiscally irresponsible (a greater sin, in my view). It is feel-good environmentalism (and ignorance) that induces politicians, activists, and clueless suburbanites to embrace recycling programs, costs be damned. It would be far more environmentally friendly to take cardboard and make compost out of it.

A good book to read on the subject of cost-benefit analyses of environmentalist propaganda (and, indeed, the whole environmentalist movement itself) is Bjorn Lomborg's Skeptical Environmentalist, which, natch, you can buy via Amazon. Just don't recycle the cardboard box it comes in, because then you would be hurting the environment.

Hedge Funds and the SEC

If you were skilled enough to understand hedge funds' trading strategies, why would you work for the SEC?

Therein lies the obvious question that arises in light of the SEC's attempts to regulate the hedge fund business.

The theory is that by opening up funds' books to regulators, regulators can spot trouble before it starts, and the financial markets (and, by implication, investors) can avoid the blow-ups that occasionally occur, such as happened with Long Term Capital Management.

But being able to divine risks in complex trading strategies requires, well, a large degree of quantitative skill and market knowledge. One would think that those who have the requisite math skills would rather be earning money than playing market regulator.

Now, one can debate the merits of hedge funds, and one can even contemplate the idea that government ought to ban them outright. But arguing that hedge funds ought to open their books to regulators so that regulators can spot trouble before it starts implies that, were Long Term Capital's books open, regulators could have spotted trouble where Nobel laureates could not.

That is simply absurd.

UPDATE: The Wall St. Journal's Jesse Eisinger writes of such regulation:

Another benefit is that a hedge-fund census would give the SEC improved perspective. Hedge funds are diverse entities, engaged in sophisticated strategies. It is clearly to the rest of the market's benefit if the chief market regulator knows generally who and what is out there to better anticipate potential problem areas and crises.

What hedge funds should realize is that registration is good for them. The industry is attacked for being secretive, under-regulated and engaged in risky behavior. The reality is much more benign, especially since most hedge funds take fewer risks than typical, long-only mutual funds. Their name derives from the fact that they hedge their bets -- often by betting on declines in stocks and indexes by selling them short -- to avoid volatility. Registration would make hedge funds loom less ominously in the public consciousness.

I responded, via email:

Seems to me that most of the people who argue for hedge fund registration do so on the basis of the idea that the SEC would be able to spot trouble where hedge fund managers cannot.

This presupposes that poorly paid, ill-educated SEC bureaucrats will be able to divine portents of trouble in complex trading strategies where Nobel Laureates (i.e., Long Term Capital Management) cannot.

I'm dubious about that proposition, to say the least.

One can argue against hedge funds, and claim that government should ban them outright (an argument I don't support) and one can argue that they should be free of regulatory oversight (caveat emptor, essentially). But to argue that hedge funds should have to register, so that their trading strategies can be monitored, lest another Long Term Capital Management creep up is to assert that bureaucrats are prepared to make intelligent decisions on trading strategies that fewer thna 1% of Americans can discern. The idea that bureaucrats can react in real time to anything, especially something as complex and fast-paced as trading strategies, is to imbue bureaucrats with an alacrity and intelligence utterly missing from their job description.

I don't see how hedge fund registration will do anything but create more paperwork for more people and waste yet more tax money.

MSFT Excel 2007 Screenshot

I get to be a beta tester of MSFT Office 2007.

Here's a screen shot of Excel 2007:

16000+ columns and over 1 million rows.

A lot of changes from previous version of Excel.

Life Imitates Showtime?

The news reports coming out of Miami about the alleged terrorist cell bear an uncanny resemblance to Showtimes' series Sleeper Cell, in which a group of all-American immigrants comprise a sleeper cell of terrorists waiting to strike in Los Angeles. For what it's worth, the show has its characters refer to each other as "brother" and these idiots seem to have referred to themselves as "brother" as well, in some pathetic attempt at homocidal fraternity.

Let's hope the government prosecutes them and executes them. Or at the very least send them to jail for life.

One could say that it is rather pathetic to get one's inspiration from television.

In Which Canadian Politicians are Stupid

Why would sexual predators obey laws? Further, why would victims of sexual predation be less victimized if they were older rather than younger?

Those are the questions that one asks when one considers the reasons given for Canada's movement to raise its age of consent from 14 to 16:

Justice Minister Vic Toews said changing the law will bring Canada's standards into line with those in several other countries, and he complained Canada's relatively low age of consent has attracted sexual criminals from more restrictive countries.

This is like arguing that drinking ages deter drunks from drinking until, well, they're old enough to...drink.

Bad Writing, or, Why Academics Shouldn't Write

This is an awkward construction, found during reading for the CFA test:

An important consideration for domestic or international financial statements is to read the footnotes to ensure that you understand how the GAAP was applied and the accounting philosophy of the firm.

A better construction would be:

An important consideration for domestic or international financial statements is to read the footnotes to ensure that you understand the firm's accounting philosophy, as well as how GAAP was applied.

But what do I know? I only have a bachelor's degree. Clearly, the Piled Higher and Deeper folk are smarter than I and therefore are better writers. Right?

Light Blogging

Apologies for the light blogging as of late.

Been busy looking for a new job, studying for the CFA test in December and socializing in this great city.

More to come later in the week.

I promise!

Populist Pustules

Rich Karlgaard, publisher of Forbes, writes of populists:

The newer generation of leftist populists, whose attitudes were formed in the 1960s, are a comical lot. They are college-educated--usually with multiple degrees--and live in blue-state enclaves like Boston, New York, Silicon Valley and Hollywood. Picture John Kerry duck hunting or Howard Dean at a Nascar race--populism as a pose. The newest and richest category of populist lefty is the Gulfstream Green. Think of Arianna Huffington jetting to Michigan to lecture factory workers on the evils of SUV ownership. Or Al Gore jetting to Cannes to warn of carbon emissions-caused global warming. (Personally, if I ever reach the point of owning a Gulfstream, I'll proudly tattoo its tail number on both arms.)

Scratch a political populist and you'll find a phony, every time. The very word, populist, implies trusting the people with their decisions. But, in practice, every political populist advocates the opposite: More, not less, control over your life. They must be defeated.

Go Nuclear

Paul Johnson, eminent British historian, writes in the most recent issue of Forbes:

Russia, a nearly third-rate economic power a decade ago, has leapt back into the race through its large-scale export of natural gas and oil. The U.S. could consolidate its superpower status with a Global Nuclear Energy Supply System, which, in time, would not only solve the world's energy problems but would also generate unimaginably vast export earnings, thereby providing a permanent solution to America's balance-of-payments deficit.

It's worth remembering that the U.S. has not entirely ne-glected the potential of large-scale use of nuclear energy. Its fleets of aircraft carriers and submarines, which form the core of its capacity as the world's only superpower and are the means of making its global military outreach a reality, are almost entirely powered by nuclear reactors. These have performed over many decades with spectacular efficiency and superb safety records.

It's already clear that the U.S. will have to take to the nuclear road again. I hope that President Bush and Congress will have the intellectual gallantry and long-term willpower to do so on a gigantic scale, one that will once again put the U.S. a generation ahead of others in what is perhaps the single most important field of economic activity.

Given a decisive lead from the White House and Capitol Hill, the American people can be trusted to respond with energy and enthusiasm.

I agree. Kill the environmentalists.

Is Lou Dobbs Serious?

Anyone who wonders why journalists aren't very often taken seriously would do well to read Dobbs' latest screed on immigration, illegal and otherwise:

"The will of the people," Thomas Jefferson said, "is the only legitimate foundation of any government." But if President Bush and the Senate prevail, it will be a clear victory for corporate supremacists, advocacy groups and dominant special interests and a historical defeat for our middle-class working men and women and their families.

To repeat the obvious: the economy is not a zero sum game with a fixed number of jobs available. Rather as the economy grows so do the amount of jobs. If America's "middle class families" can't find employment, well, then that suggests they need to educate themselves and hone skills which are in demand.

Dobbs is worse than Darryl Hannah.

Cigarettes

Here's a question: what is the greater public health problem, exposing kids to cigarette smoke from their parents' cigarettes or the violence attendant in black markets?

Those who want to outlaw cigarettes, often under the rubric of kids' health, fail to consider the negative effects of outlawing things: those things become more valuable, and therefore, more profitable, than when they were legal. Consequently, black markets for those products appear, violence and criminal activity (i.e., trafficking) occurs, and, well, the public health effects of criminalization far outweigh the public health effects of asthmatic kids.

I mention this because an irresponsible doctor, writing in the Wall St. Journal claims, ignorantly:

We have emissions standards for automobiles but we don't have clean-air quality standards for the air that children breathe.

As much as I'd like to see it, I don't expect anyone to outlaw cigarettes or tax them out of existence anytime soon.

If we had the courage to do that, I'd be making fewer late-night trips to the emergency department and my littlest patients would be breathing easier.

Of course, when it's about the kids, the first reaction is: do anything to protect them. But "doing anytihng" often has adverse negative consequences, as we have seen both during Prohibition and the current drug war.

Another Example in Which Economists State the Intuitively Obvious

Having the fortune of not being a cloistered academic, and actually having wandered around many of the cities of this great land, I could have told you the following:

Existing research has found an inverse relationship between urban density and the degree of income inequality within metropolitan areas, suggesting that, as cities spread out, they become increasingly segregated by income.

Here's a quick test that you, too, can perform: drive from Bel Air to South Central Los Angeles and see how integrated those communities are. Then, come back to New York City, and walk from Mayor Bloomberg's townhouse to Spanish Harlem.

Then come back to me and let me know what you find.

Well, here, allow me to save you the trouble of actually having to travel to La-la land: You will find that New York is relatively integrated; that is, you can go from a billionaire's townhouse to a coterie of welfare mothers and crack whores inside of a thirty minute walk. An hour's drive in L.A. (across, obviously, a much longer distance, as the crow flies) will yield the same result.

Via Stuart Buck.

Oh, and if you want evidence that the idiots out in L.A. need to get over themselves, then have a look at this story wherein Darryl Hannah decides to sit in a tree to protest...a private property owner wanting to build a warehouse on his property! The horror!

Fuckin' celebrities. They're even worse than the economists.

UPDATE ON HANNAH: Volokh blogger Ilya Somin injects some legal analysis into this story, which, while obvious, is nonetheless important (obviousness seems to be a theme with this post, no?):

I think that Hannah and the other celebrity protesters have not thought the issue through as well as they should have. If they get their way, they might be able to save this particular garden. But if landowners such as Ralph Horowitz learn that once you let people garden on your property, you in effect lose your rights and can never remove the garden, they are likely to refuse to allow the creation of urban gardens on their land in the first place. This is especially likely if the government forces the owners to allow such gardens to stay in place permanently, once established. But even if the authorities merely let protesters such as Hannah & Co. usurp the owner's rights through private action, the same results might occur. Whatever one thinks of Mr. Horowitz, he did permit the garden to stay on his property for over a decade. It is unlikely that he and other similarly situated owners would do so if they had thought that it would lead to the permanent loss of their property rights.

To be sure, the government could (setting aside Takings Clause considerations) simply require owners to allow the establishment of urban gardens on any urban properties where local activists would like to plant them. But in addition to being a serious violation of property rights, this approach would severely undercut incentives to invest in urban property, thus imposing major economic costs on urban areas.

Good Perspective on Outsourcing

Consider, if you will, the following: most people in the United States are not adequately educated for high-paying, white collar jobs.

Why then does the specter of outsourcing lead many to conclude that India and China, with their largely ill-educated, non-English speaking populations will take away professional jobs from Americans?

The following makes a lot of sense:

Diana Farrell, director of the McKinsey Global Institute, the consulting firm's in-house think-tank, was one of the first to take the heat out of the issue. Initially, she pointed out how limited is the data on the phenomenon. In a report last year, the institute said that “the debate about offshoring has been fuelled by anecdote rather than fact.” It then set about gathering data which, in turn, suggested some limits to offshoring.

It estimated, for instance, that only “13% of the potential talent supply in low-wage nations is suitable to work for multinational companies”, and it cited three main reasons for this: the lack of language skills; the limited capacity of the educational systems of the offshoring hosts to impart practical skills; and the lack of cultural fit. Other evidence of limits—this time to the demand for offshoring rather than the supply—comes from a recent survey by Proudfoot, another firm of consultants. It found that over three-quarters of the companies it surveyed had no business functions carried out offshore; just over one-third had no business functions outsourced at all, neither at home nor abroad.

There are two observations I have about India and China:

1) The quality of their education matters less than the quantity of their people being educated in Western management and accounting practices;

2) The ability to speak and write English fluently is critical, as there are two $12 trillion economies for which English is the business lingua franca.

Those economies, of course, are the United States and the E.U. Say what you will about the E.U. and its inability to ratify its constitution, and France, Italy, and Germany's intransigent attitudes toward flexible labor laws and the creation of wealth. Most of Europe's economic growth occurs at its margins, and when an Icelander meets with an Estonian to propose a business deal, they speak neither French (the language of diplomacy) nor Latin (the language of the Catholic Church) nor Icelandic nor Estonian. They speak English. (Not for nothing do Turkey's edcuated families require that their children become fluent in English.)

The point being, of course, that exposure to western management and accounting practices and English fluency are requirements to compete in today's international economy, and those are two counts on which the vast majority of India and China's populations are woefully unprepared.

Ron Gettlefinger Doesn't Get It

He's the head of the United Auto Workers Union

He claims, correctly:

United Auto Workers President Ron Gettelfinger said the decline of the Big Three auto makers and the rise of their Japanese competitors means the union must accept big changes in its approach to health insurance and other contract issues.

Mr. Gettelfinger made the comment Monday in a report to the UAW's constitutional convention, which was opening in Las Vegas.

The challenges facing General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group are greater than earlier crises, including Chrysler's escape from bankruptcy in the 1970s, the recession of the early 1980s and GM's record losses in 1992, Mr. Gettelfinger said.
[Ron Gettelfinger]

"The challenges we face aren't the kind that can be ridden out. They're structural challenges, and they require new and farsighted solutions," he said.

Among those challenges is that nonunion U.S.-based auto assembly plants made 1.1 million more vehicles in 2005 than they did in 2001, while production at unionized plants fell by 1.1 million, he said. Mr. Gettelfinger said U.S. labor laws heavily favor management and allow employers, such as Japanese auto makers that have opened plants in this country, to intimidate workers seeking to unionize.

All well and good. Labor laws, properly, favor management over employees because, well, management operates at the behest of owners, not employees.

But then he blames Detroit's probalem solely on management:

Mr. Gettelfinger said company executives share responsibility for the problems faced by the Big Three and by auto parts suppliers such as Delphi Corp., GM's former parts division that now is under Chapter 11 bankruptcy protection.

"Dig into the reasons behind this, and there's no getting away from the fact that bad management decisions have played a role," Mr. Gettelfinger said. "Missed market opportunities. Bland designs. Money that could have been invested in new products and plant improvements squandered in ill-conceived international ventures."

Mr. Gettelfinger said the U.S. health care system "imposes an unfair burden on older, established employers' such as the Big Three. He called for universal health care to level the playing field between U.S. and foreign automakers, which do not yet have significant retiree health costs.

Today, the relatively generous health care benefits that unionized autoworkers get are "unsustainable" in the face of declining Big Three sales, he said. Mr. Gettelfinger defended the union's decision to accept benefit cuts in talks with automakers this year.

"We can be proud that our union doesn't shy away from making tough calls and even prouder of our members" willingness to make sacrifices for those who preceded them and those who will follow," he said.

The unions tied Detroit's hands through their collective bargaining demands. Japan merely exploited an opportunity, just as Google has decimated newspapers' local advertising business by exploiting an opportunity. Laying the blame for American auto manufactuers' demise at the hands of management is akin to blaming parents for the woeful education their kids receive.

Kill unions. Create wealth.

More thoughts at The Liberal Order.

I Do Petty

The Journal needs a better editor.

In a story about how Zarqarwi met his end, they write:

The military released the autopsy results in an effort to respond to lingering questions about the al Qaeda in Iraq leader died.

"about the al Qaeda in Iraq leader died" is perhaps one of the most mangled sentences I have ever seen, even if its meaning is immediately clear.

Stupid Hippies!

Stupid hippies:

Michael Pollan, author of "The Omnivore's Dilemma," calls industrial organic food a "contradiction in terms." Of Wal-Mart's promise to sell organics at a relatively small markup he has written: "To say you can sell organic food for 10 percent more than you sell irresponsibly priced food suggests that you don't really get it."

As the ethical-eating movement falls apart, old allies are fast becoming new enemies. They're competing for customers, market share and legitimacy. Small farmers, their marketers and food gurus have started exhorting ethical eaters to "eat local," "eat seasonal" or to get "beyond organic."

Ground zero for the struggle to decide who owns ethical eating in Manhattan is the shiny new 50,000 square-foot Whole Foods staring across 14th street at the Union Square Greenmarket Farmers Market. The food fight is just starting, with trash talk by both sides recently reported, and it's only a matter of time before the Greenmarket farmers start lobbing locally grown vine-ripened tomatoes and balls of fresh Hudson Valley mozzarella across the street at the new megastore. Hundreds of Whole Foods employees (perhaps with support from nearby Trader Joe's) will retaliate by tossing frozen organic pizzas like ninja death stars and smashing bottles of organic Chilean wine to use the fragments as shivs. Their battle cries will ring out in the early morning air: "Eat Local!" vs. "Eat Organic!"

How did we get here? Early in the organic movement, participants wanted to opt out of the modern capitalist food supply and try something more, well, groovy. But as the movement grew, more justifications were added. Some eaters got onboard because they were concerned about health -- they feared that pesticides, hormones and mercury were taking a toll on our physical well-being. Others liked the idea of supporting family farms and the picturesque landscape they create. Still others decided that food tasted better and fresher when it wasn't part of the culinary-industrial complex.

But as justifications for eating ethically proliferated, so did the modes of ethical consumption, creating all sorts of new allegiances, not to mention more chances for sanctimony from certain elitist ethical eaters. For those worried about the effect of chemical pesticides and hormones on their children's development, organic TV dinners are a quick, easy way to do the right thing for their kids. But for consumers who fret about over-reliance on fossil fuels, those same meals -- assembled from ingredients grown in a dozen countries, heavily packaged and shipped in freezer trucks -- miss the point entirely. Free-range cows don't appease vegetarians concerned about the sustainability of our food supply. And people who campaign for humane treatment of farm animals don't care much about the vast amounts of energy required to import grapes from Chile.

Gay Marriage Elsewhere

The Economist reports on the state of gay marriage in Canada and other places. As always, the Catholic Church isn't made to look especially good:

Federalism has also been trumped in another country trying to come to grips with the issue. Australia’s federal government under its prime minister, John Howard, had passed legislation limiting marriage to that between a man and a woman. But the Australian Capital Territory (in effect, Canberra, the capital) recently passed a law that stated: “a civil union is different to a marriage but is to be treated for all purposes under territory law in the same way as a marriage”" Seeing a bid to allow gay marriage with a linguistic trick, Mr Howard said on Tuesday June 6th that the government would nullify Canberra’s move. Four days earlier Stephen Harper, Canada's Conservative leader, said that he would give MPs a free vote on whether to re-examine a law giving gays the right to marry in that country.

Western countries are divided on the issue. South Africa, Canada, Spain, Belgium and the Netherlands allow full gay marriage, and many countries in Europe have recognised rights enshrined in civil partnerships. The United Kingdom last year, for example, granted gay couples extensive rights of inheritance, tax benefits and more. But Pope Benedict XVI fears an assault on traditional marriage, not least in Catholic countries like Spain and Belgium. Even in Italy the government is looking at creating some sort of nationwide rights for gay couples. On Tuesday the Pope said he worried that there is an “eclipse of God” happening in places where gay marriage, artificial insemination and the like replace traditional nuclear families and procreation.

But giving gay couples the chance to inherit, to share workplace benefits, receive hospital visits and enjoy other mundane but important rights that heterosexual couples take for granted should not cause great alarm in democracies. Even in America the popularity of gay marriage and civil unions is now beginning to rise. Some may fight to stop it being called marriage, but, despite this week's grumbling, the trend seems to be in the direction of giving gay couples nearly everything but that magic word.

Calcium Gas

Who knew that one of the gases ejected by the sun was the gaseous form of the element which is the main ingredient of animals' bones?

I get light-headed when I read that the surface of the sun "is really a thousand times more vacuous than a candle-flame on Earth, and even the concentrated moiling gases hidden a thousand miles below it are a hundred times thinner than earthly air." Indeed, some stars, such as E Aurigae I – a star so huge that it could "contain most of our solar system, including the 5.5-billion-mile circumference of Saturn's orbit" – "are sometimes described as 'red-hot vacuums' because their material, though hot, averages thousands of times thinner than earthly air and is normally invisible, so that you might fly through them for days in your insulated space ship without even realizing you were inside a star." Meanwhile, in the sun's whirling interior, "the highly compressed gassy matter is ten times as dense as steel." Then, of course, there are "magnetic hurricanes thousands of miles in diameter" – which would be a lot more exciting if those magnetic hurricanes were not "commonly known on Earth as sunspots." As the sun unceasingly explodes in arching structures of storm and prominence, "glowing veils of gaseous calcium" escape. In others words, the same mineral responsible for animal bones bursts outward from the sun in astrophysical shells that "look like gnarled trees with blazing rain pouring downward from their branches in beautiful magnetic curves that have been clocked at speeds up to 400 miles a second."

From BLDGBLOG.

Science literacy test: do you understand all the science in this Wikipedia entry on the sun? I doubt most people do; it is written at a very introductory level, which level ought to be sufficient for a high school graduate. If you don't understand it do yourself a favor and get yourself an education.

Google Spreadsheet Screen Shot

Color me underwhelmed*:

I'm a pretty heavy Excel user, and this interpretation of a spreadsheet doesn't seem to offer much other than the ability to create data tables, simple calculations, etc.

I suppose it may have utility for people looking to share simple data via a spreadsheet, and not have to pay MSFT's licensing fees. This offering will have to become much more robust before I would consider using it regularly.

See some of my other questions about the offering here.

*Please note I don't have any special connections at Google and so I can't get you an invite to this offering. I just sent them an email asking to be a beta tester and they granted me access.

"“Sorry, but nowadays, left to their own devices, the girls would look like sluts.”

A prep school kid speaks out on wearing pants at Spence:

A group of seniors at Spence, the Upper East Side girls’ school, is aiming to disrupt the June 14 commencement by refusing to wear the required graduation garb: a below-the-knee white dress (and no visible bra straps). Instead, the girls will wear white pantsuits in protest. “It’s not a finishing school anymore, it’s a college-prep school that has strong academics, so do we really need to wear dresses?” asks Cordelia Chansler, Spence ’05 (other alumnae include Gwyneth Paltrow, Jade Jagger, and Mike Bloomberg’s girls). But most alums are less than incensed by the dress policy. “I think it’s nice to have everyone look uniform,” says one recent graduate. “Sorry, but nowadays, left to their own devices, the girls would look like sluts.” And even Chansler doesn’t regret going along in the end. “I’m glad that I went through with it and wore a dress. I think these girls will be sad they wore pants afterward, but, whatever, they’re 18,” says the 19-year-old. Spence had no comment on the looming controversy.

Lesson Learned?

So some jackasses are setting off firecrackers in the park across the street from my apartment.

One of them just yelled "Oh shit! My hand! Help."

Hopefully this moron learned his lesson. Though it is doubtful.

Stupidity knows no bounds.

GOOG vs MSFT

Google has announced plans to offer a web-based spreadsheet program.

Being a so-called power-user of Excel (VBA, pivot tables, financial modeling, the whole nine yards) I will be curious to see if (1) the software offered by Google is as deep and functional as that offered by Microsoft Excel; (2) what advantages, if any, Google's offering has over Microsoft's; and (3) how well their spreadsheet program integrates with various database packages (MySQL, Access, etc.)

Bad Marketing

I've been identified as a member of the LGBT community, presumably because I have been supportive of gays and gay marriage on this blog.

Someone ought to tell my (female) date tonight that I've been tagged as gay.

In any event, the email:

Please check out a new website recently launched by UNITE HERE and activist Cleve Jones, Founder, the NAMES Project AIDS Memorial Quilt: www.sleepwiththerightpeople.org. As part of UNITE HERE’s Hotel Workers Raising Campaign, this website continues the long and positive relationship between UNITE HERE and the Lesbian, Gay, Bi-Sexual and Transgender community. Once you get to the website, be sure to read what Congressman Barney Frank has to say about the campaign.

In addition to valuable information surrounding the LGBT community and the Hotel Workers Rising campaign, there are free downloads, a video, relevant news stories, and a link to a Forum where you can meet, greet, and connect. There’s even an online game called “Hardship Hotel” that will get you hooked if you’re not careful!

One would think that a marketing campaign predicated on the sexuality of the people for whom the campaign is being undertaken would have as one of its primary objectives identifying gays correctly.

Apparently, not.

The Rational Consumer

Economists tell us that man is rational. (At least Consumer Man.)

Consider: I can stand on line for three hours and buy a $40 ticket or I can buy the same ticket online for $55.

If my time is worth more than $5 per hour then it is cheaper for me to buy the $55 ticket online than it is for me to stand on line for three hours and save $15. That is Rational Man.

And yet, irrationality persists.

Clearly the assumption that man is rational is faulty.

Detroit & Bangalore

Detroit is compared and contrasted with Bangalore:

To be sure, Detroit has many of the trappings of wealth that come from sitting in the lap of the richest country in the world: an excellent freeway system, a sparkling riverfront, good sanitation. Bangalore, in turn, has many of the afflictions of a poor country: pollution, open sewers, slums. But there is a palpable buzz in Bangalore’s air that comes when industrious people are engaged in creating wealth. That’s missing in Detroit, where a big chunk of the population lives off welfare.

While Bangalore grows, Detroit continues to lead the United States in population decline. Every week, on average, 370 residents leave its crime-ridden, economically depressed neighborhoods for a better life in the suburbs or elsewhere in the country. The city’s population, close to 2 million in the late 1950s, has shrunk to less than 900,000. Formerly the fifth largest city in the country—bigger even than Chicago—Detroit is now smaller than San Jose.

This is not to deny that some economic movement has occurred in Detroit in the last decade: The city in February pulled off the Super Bowl at the new state-of-art Ford Field Stadium without a hitch—no mean feat given that, until a few years ago, it could not even plow its streets after an evening snowstorm for kids to walk to school in the morning. General Motors has sunk $500 million to renovate the Renaissance Center, a complex of glass office towers that sat nearly vacant on the Detroit River for about two decades. In part due to generous tax subsidies, Detroit got its first significant new office building in a decade with the opening of the Compuware Center. Three new casinos have opened, including one in the thriving Greek Town area—one of Detroit’s few bright spots, where pedestrians actually can walk at night without fearing for their lives. And in a burst of government largesse, some old rococo gems such as the Fox Theater and Detroit Opera House have been restored, along with Campus Martius, once the busiest public square in America.

But these grand projects haven’t jump-started Detroit’s economic engine. While stores like Esprit, Nike, and Adidas open showrooms by the dozen in Bangalore, not a single major national retailer has expressed interest in Detroit since the closing of Hudson’s department store in 1982. The opening of a Ben & Jerry’s ice cream parlor in the Compuware building last year was cause for celebration.

In fact, Detroit’s landscape has barely changed since I first peered out the window of a friend’s upper-floor apartment at Wayne State University in 1987, into a hauntingly beautiful abandoned building across the street. Its rooms were stripped bare, every piece of cabinetry likely sold for firewood by local junkies. And its brick facade was marred by row after row of shattered windows—like a lovely face ravaged by pockmarks.

Entire blocks of such buildings have been razed in recent years. But with few new investors stepping forward to redevelop the sites, many have reverted to urban prairies. The 10,000 or so abandoned buildings that have escaped the bulldozers serve as both a reminder of the city’s lost glory and a taunt to its hopes of a renaissance.

Detroit is a dead city.

Kill it off.

Go read the whole thing, as they say.

UPDATE: See this previous post of mine for more about Detroit.

In Which I Rant

Numbers can increase at a decreasing rate.

Example: 5, 10, 15, 20, 22, 23, 23.5, 24, 24.1, 24.2

And yet the concept of a sequence of numbers increasing in value at a decreasing rate confuses some people.

For no apparent reason.

Because the math is quite simple.

Winner Take All?

The Eclectecon asks if we are moving away from a "winner takes all" society in which a few large firms dominante a given market for goods or services.

My comment:

My (non-economist) take on this issue: as technology allows more and more people to become their own publishing house (blogs), video production staff (commoditized consumer electronics plus YouTube), and filters (RSS news aggregators), the idea that any one company should be able to win "all" of a market seems rather ludicrous.

Of course, implicit in my argument is the assumption that people will take advantage of the freedoms new technologies afford them. History has shown, of course, that many people do not adopt new technologies, either because they are intimidated by them or don't understand their impact.

So, I would hedge my argument: to the extent that a well educated person can take advantage of new technologies to free himself from the dictates of corproate America, corporate America will not be successful at dictating that person's experience. To the extent that a person is either uneducated or unwilling to learn about new technologies and apply them to his personal circumstance, a company will be able to control the market in which the consumer consumes.

Braindead

Posted without comment:

Two college students were found dead inside a large, deflated helium balloon after apparently pulling it down and crawling inside it, officials said.

The deaths of Jason Ackerman and Sara Rydman, both 21, appear to be accidental, Hillsborough County Sheriff's Maj. Bob Schrader said.

Their bodies were found Saturday partially inside a deflated helium balloon at the entrance of a condominium complex a few miles north of Tampa.

The 8-foot-diameter balloon was used to advertise the complex.

"It was more a fun thing they thought they were doing," said Linda Rydman, whose daughter was found dead. "You know how you blow up the balloon and suck the helium."

The county medical examiner said Sunday that the cause of death won't be released for six weeks, until toxicology results come back.

Inhaling helium can quickly lead to brain damage and death from lack of oxygen, according to the Compressed Gas Association, which develops safety standards in the gas industry.

Ackerman was an advertising major at the University of South Florida and Rydman was a student at Hillsborough Community College.

Being Your Father's Father-in-Law

Bill Wyman, of Rolling Stones fame, married the daughter of the woman to whom his son was engaged:

At age 47, Bill Wyman, began a relationship with 13-year old Mandy Smith, with her mother's blessing. Six years later, they were married, but the marriage only lasted a year. Not long after, Bill's 30-year-old son Stephen married Mandy's mother, age 46. That made Stephen a stepfather to his former stepmother. If Bill and Mandy had remained married, Stephen would have been his father's father-in-law and his own grandpa.

The Media is the Message

NOTE: This post originally was intended to be a post about doing business in China, but it seems to have evolved into a more general discussion of the P.R. problems that China, Yahoo!, and the Catholic Church are getting themselves into by, well, engaging with one another. All in all, a very odd dynamic.

And away we go!

Never forget.

In related news, Terry Semel, Yahoo's clueless chief responded thusly to a hypothetical question:

Terry Semel was being interviewed at the D Conference. I was in the audience. The subject was censorship in China and Yahoo!'s willingness to look the other way in order to do business there. Semel stated Yahoo!'s position that it was better to engage with China and push them at every opportunity to become more open than to leave the country entirely. It was a good position, in my opinion, and he made it well.

But then someone from the audience got up and asked a question. The question was what would Yahoo!'s position be if it was the Nazi Germany and Hitler instead of China. Semel said something to the effect that "I wasn't even alive then, I don't honestly know what we would do".

Wrong answer. As Joe at Techdirt explains, when Hitler [and] the Nazis come up, the best thing to do is end the discussion. Semel was clearly annoyed with the question but he should have refused the answer it instead of saying anything.

...

This brings me to a larger point. Running a technology company in the Internet age requires a lot more political skills than it used to. The Internet is way more than a technology and companies that participate in its commercial development are in the political space as much as the tech space.

Two observations are quite clear to me:

(1) Companies that do business in China need to contend with the fact the Chinese governmnet is a Communist government and is therefore neither respectful of human rights nor moral.

(2) Companies that do business in China can ill afford to have as the head of their companies people who respond to questions as Semel did.

Companies, as I have argued before, are in the business of risk mitigation. Companies have communications and P.R. departments precisely so that they can mitigate risks; for Semel not to anticipate such a question as that posed is evidence that he is not fit to lead the company. Semel should be canned; Yahoo can't afford the bad publicity it gets.

This is how Semel's response plays out in the press, whether it is an accurate depiction or not.

Can the fool.

Finally, from the pot calling the kettle black department, the Catholic Church is calling for a full inquiry into Tiananmen Square, despite never having conducted a full accounting of its priests predilection for young boys:

The highest official of the Roman Catholic church in China marked the 17th anniversary of the Tiananmen Square killings today by strongly criticizing the Chinese government and calling on it to hold a full and open review of the killings.

The criticism by Cardinal Joseph Zen is the latest sign that the Vatican may not be willing to compromise on human rights in order to establish diplomatic relations with mainland China.

So, the Catholic Church is not willing to "compromise" on human rights but when it comes to compromising its parishioners own bodies, well, the Church really doesn't seem to care.

Neither China, Yahoo, nor the Catholic Church looks good right now.

Any bets on the next P.R. gaffe?

I bet Senator Clinton will say something stupid in the coming months. That's where my money is.

My Take on Enron

Two observations:

1) Sentencing Lay and Skilling to life seems to equate their crimes with those of murder and treason. That seems ludicrous.

2) Regarding those who lost "everything" in the wake of the Enron bankruptcy: financial prudence suggests that one's assets be diversified. Why should Skilling and Lay be punished for people's failure to properly manage their assets?

The obvious rejoinder to point #2 is "Lay and Skilling lied to their employees about the health of their company" but this is entirely unconvincing. No company is so immune from the vagaries of competiton or other unpredictable events that its financial health is reason to have all of one's eggs in one basket.

Finally, doubtless someone will read my comments and reply "well, that is not how the law works." Of course, I care little how "the law" works. What I care about is the apparent notion that high-level executives are suddenly deemed responsible for the prudence of their employees' personal finances.

Must Be a Tree Hugging New Yorker

Volokh Conspirator Dale Carpenter quotes a student's evaluation of him:

"Coming in to this class, I thought all people with his 'lifestyle' were morally depraved. Now I recognize that Republicans aren't all bad."

Only a left-winger suffering from Pauline Kael-style myopia** could conceive of Republicans as leading a lifestyle* distinct from non-Republicans.

*Lifestyle could also be an allusion to Dale Carpenter's homosexuality and the view common on the left that all Republicans want gays to burn in hell.

**To be fair to Kael (who, after all, can't defend herself as she is desceased), some claim that the Nixon quote attributed to her is misquoted. I have no idea one way or the other but it is nonetheless a good way of illustrating the myopia with which people with preconceived views of the world demonstrate their own folly. The world is too complex a place to pigeonhole people.

WTF?

The Yankees have suddenly won five in a row, and are now eleven games above .500.

I repeat: WTF?

The team against whom they have won their last two games, the Detroit Tigers, nonetheless still have the best record in baseball, at around .660.