Monday, March 28, 2005

April 7

At the end of this week is April Fools Day. Near the end of the next is opening day for the Sacramento River Cats - the AAA franchise of the Oakland A's that has won the PCL twice in the last two years. AAA ball is fun - about 15,000 seats - with more than 10,000 fans coming each night. Sacramento nights are cool enough to enjoy baseball. Player come here before they go to the bigs or when the are coming down - but they are here mostly without the attitude of the bigs. In July we have the allstar game for the Pacific Coast League. Then eight more days is income tax day - but after that diversion we then have several months of baseball. Can things get any better?

Saturday, March 26, 2005

The Zedillo Contributions

On the flight back from Mexico I sat next to a businessman in his late 30s who was on his way to China and then to Israel. We spoke a bit about the discussion I had had the night before and the morning of the flight (in Si, Entonces) and then he made a couple of comments with which I agree. First, he said that Fox's predecessor should get more credit than he does. Zedillo had all the personality of a cold dish of oatmeal - but in several key spots he took the right decision. For example, when the Federal Elections Commission had the chance to mess with the election - through a PRI plot - he said no. In essence - let a real election take place. While the stability of the peso was nothing close to what it has been in this administration - at several places he took the long term view of what was right to do. Thus, you got an unexciting politician - a technocrat - who had an unexciting but appropriate long term view of his role. Zedillo made some brave decisions when he had to - I remember on New Year's 2000 watching him and his family on Univision waving to the crowd in the plaza in Mexico City and thinking how boring a guy could this be. But in this case the boring guy was the right person for the job. Second, he said he thought the country might be ready and sophisticated enough to take a serious look at another boring candidate. That might be Creel or it might be someone else among the secondary contenders.

The Reformation in Higher Education

Over at Arnold Kling posted an interesting essay on whether higher education should have or is in a reformation. There are some interesting comments in the posts. But there is also a lot of skepticism about the role and contributions of higher education. The comments may be satisfying but I am not sure they get at the broader issue.
His site is often interesting in a broad range of economic issues.
The comparison of President Summers to Martin Luther is funny but a bit over the top.
The URL is

Bro. Vito

The friend who I went down to Mexico to help through his operation is a priest. Over the last decade he has become a very good friend. He is a member of a Catholic order called the Legionnaires of Christ. I am not a Catholic. But as I have gotten to know him I have also become acquainted with many in his order. They are smart and resourceful. Their mission is the evangelization of leadership. This is a Mexican order but with a lot of people from outside Mexico.

One person, who is still in formation, is named Bro. Vito. He was assigned to help care for my friend as he worked through this set of problems. Bro. Vito has a certain innocence that is wonderful. He comes from Brooklyn and you would never be confused about where he comes from. But he is intensely committed to becoming a real minister.

His ministry, to this point, has been with kids. His genuiness and his honesty must be an inspiration to parents and kids. We've talked in the past about his kid's clubs. One afternoon, I took him out to lunch, in part because I wanted my friend to get some rest. I found in his briefcase, a Dummy's book on Magic. He thought it would be a good idea to learn some magic. So I bought him a couple of decks of cards. There are three kinds of card tricks - counting ones (based on some mathematical principle), mechanical ones (where you set up the deck) and slight of hand. In slight of hand there are some fairly simple moves that can be quite amazing to the unitiated. So I spent some time teaching him about the three kinds of tricks and some of the moves in slight of hand.

For the next couple of days, he worked to perfect his technique - I am sure some kids in Xalapa will be amazed when he gets back to work at meeting the Amazing Bro. Vito.

Si, Entonces

Last night I had dinner with a friend and a friend of a friend and we discussed the 2006 election. In a Seinfeldesque comment, the third person at dinner replied to my question about what might happen in the 2006 election, “Nothing”. His argument was that since Mexico is so close to the US that it was unlikely that they would let anything silly happen to the country, so whoever is elected would be proscribed from doing real harm by their neighbor to the north.

In Spanish I am working with a construction of if, then – si, entonces – and as I thought about my new friend's comments, I kept coming back to si,entonces. OK, so the US will not let something bad happen - but what are the consequences of that stopgap.

When I started working in Mexico, there were a lot of indignities for travelers. For example, one always drank bottled water. A second problem, even in the best hotels was the lack of a consistent shower – you either froze or boiled – but no matter how hard you tried you could not get a consistent or temperate shower. That is no longer true. The hotel I stayed at while caring for my friend has a note in the rooms that says our water is fine – but we have bottled water if you want it (for 19 pesos). They have a good business center and a passable fitness center (as good as most in the US) – in short, the hotel is a competing for a world class traveler. Mexico is different than it was when I started coming here. It is not the US (even with Dunkin Donuts and KFC and McDonalds) - nor should it be.

Early this morning as I was leaving Mexico, I raised the question with my friend in whose apartment I was staying - and who had a typical Mexican shower. He said two insightful things. First, he commented that at some point people have been willing to accept the perversities of life. In his opinion - that may no longer be true. Indeed, if you look around the economy there are numerous changes where the prior indignities are gone - based on consumer choice.

The second insight was on change. The political system is continuing to change in spite of the relative ineffectiveness of President Fox. Part of the message of the 2000 election was enough! (Basta!) A good portion of the electorate had had enough of 70 years of the PRI, of cold showers and non-potable water and all the other indignities of life. Fox and his administration have not been successful - when we did a workshop for them at the start of their administration I found a lot of smart and idealistic people but not a lot with deep political experience. Running a political system is not like running a business. My ultimate faith in the electorate is that they will not settle for a silly choice.

I think the question facing Mexico is does the country revert or does it keep going forward? This morning as I was leaving my friend’s apartment, I remarked about the shower problem and he said – one of the things he will change first in his new apartment is the shower – so that he can have consistent temperature. The if, then for this Mexican is clearly understood.

Friday, March 25, 2005


Part of the reason I have been in Mexico this week was to visit a friend who was having a heart procedure. Originally he thought he was going in to have pacemaker installed and to do some other minor corrective activity. But as with many other things in life this did not go as planned. They were not able to use a pacemaker with his particular problem and recovery has been slower. So each day I intend to move out of the hotel near the hospital and each day he is not ready so we re-up - the hotel staff must think us bonkers.

He seems to be on the mend a bit - last night we got down to discussions about our next set of projects - I have enjoyed working with him because he has energy and a wide range of interests. He is inventive in a situation (Mexico and Universities) where that is often lacking. In the places we have worked together he has developed some interesting programs with almost minimal resources (at least economic).

Yesterday I took a young associate of his to the Trotsky museum so my friend could rest a bit - that is a wonderful testimony to Socialism. Trotsky was a virtual prisoner in his own house and was finally done in by one of Stalin´s henchmen with an ice pick. The museum has been refurbished - when I went there first it was shabby with no real barriers. Now it even has alarms.

One of the highlights of this trip was bringing this friend an iShuffle fully loaded with music of my tastes but his also. Watching him listen to the mix was a true joy indeed

Thursday, March 24, 2005


This week I have been in Mexico with a good friend. I am always relaxed here. The country is in the beginnings of a Presidential campaign that will become real in the next few months (for a July 2006 election). AT the present point there are three candidates - the mayor of Mexico City (the left PRD party) Lopez Obrador, a former Governor of Tobasco (the PRI) candidate Madrazo and a cabinet secretary Creel.

In the 2000 election people used the phrase BASTA - enough! for getting rid of the PRI - but this time the leading candidate seems to be Lopez Obrador. That would be a tragedy for Mexico. He is a demgogue and certainly a bit shady. But he offers what many on the left here have offered a free lunch.

Fox has not been as successful as one would hope. His people were idealistic in their goals but not practical in their politics. The peso has been relatively stable for most of the term.

But we should hope that the voters will think carefully on their options. The ones I know (which is probably not a good sample) will be that.

Monday, March 21, 2005

The Tragedy of Terri Schaivo

For the past couple of weeks we have been subjected to a circus with a human being in the center ring. The fight over Terri Schaivo is an embarrassment. Her husband, after receiving a settlement of almost a million dollars for her care, has hooked up with another woman and fathered two children with her; not exactly the perfect example of a loving husband. But even if you do not ascribe base motives to his behavior - it seems a bit strange. Why not release her to her parents who seem to want to care for her? He comments that she had made protestations about her desires although her parents, to whom she seems to have been close never heard them. Some news reports suggest that his quest came only after the financial settlement.

Politicians have glommed on to this issue like bees to honey. They have referred to a woman they have never met as an old friend. Thankfully, this morning’s Wall Street Journal had a piece that sets the issue as clearly as it can be from James Q. Wilson. Wilson is often able to separate the wheat from the chaff, and in this case he does it with clarity. Is Terry Schaivo brain dead or in a constant vegetative state? In a constant vegetative state, there is the possibility, however remote, of recovery. If she is the former, then disconnecting her apparatus is merely speeding up an inevitable process. If she is the latter, then disconnecting her from sustenance is murder.

But the real story here is that with new technologies come new ways of doing things. Mrs. Schaivo should have made her wishes clear in a document. That is the price we pay today.

What is Social Security?

In a letter to the editor this morning in the Sacramento Bee, a writer asked whether Social Security is an insurance or a retirement program. In reality, one of the problems with the program, is that according to who is describing it, it is both. The program is called Old Age Survivors and Disability Insurance. Although both elements require some fiscal planning, the assumptions between a retirement program and an insurance program are different. In an insurance program, especially one with welfare elements in it (and the S and DI parts are clearly welfare allocations to compensate citizens for unforeseen events) the payouts are not entirely predictable. But the retirement part of the program is entirely predictable – people pay in until a pre-determined age and then begin to draw funds from the program. Obviously, a retirement program can include equity considerations. And an insurance program can (and should) include some actuarial considerations to make the program solvent over time. Until the distinctions of retirement versus insurance and the desired quantities of equity are made clearer, we will not make much progress on either the president’s proposals or on any that will come from the democrats.

Saturday, March 19, 2005

Still in Full Regalia Posted by Hello

This one is also not exactly recent - but again, it is an accurate image. I also chose this one for my profile shot. Less formal - but that is what Californians are.

In Full Regalia Posted by Hello
This is a photo of me. Not exactly recent but you get the idea of what is important in life.

Friday, March 18, 2005

Instapundit Strikes again!

Over at Instapundit he says it all

WAR CRITICS want to mark the anniversary of the war -- there will be an "antiwar protest" at my local mall tomorrow and there are all sorts of events planned worldwide -- but a proper way of marking the date would be with a mass apology to the Iraqi people, and to George W. Bush, for taking the wrong side at a crucial moment in history.


I'm not expecting that. But at least some people are marking the occasion in suitable fashion. It may be premature to gloat, but it's not premature to point out the moral and intellectual bankruptcy of the "peace" movement, which has been apparent since the very beginning.

Fifth Amendment Capitalists

My friend in Nashville also talked about a Studs Terkel book he is reading about hope. As I got on the plane he gave me two of the interviews from the book – John Kenneth Galbraith and Wallace Rasmussen.

Galbraith is not an economist that I ever put much stock in. One of my most polemic papers in a public finance course I did leading to my doctorate was one about the manifold falsehoods in the Affluent Society. But Galbraith used a catchy phrase in the interview – which following the (Former University of California President Jack) Peltason rule I will use once more and then take as my own. He suggested that when he was a young man there were a lot of 5th Amendment Communists. Today there are a lot of 5th Amendment Capitalists.

Rasmussen, the retired head of Beatrice foods has some interesting comments about finding honesty in corporate activity. “In God we trust, everything else we audit.”

Both interviews suggest we need to continue to work on clarity in financial reporting. Rasmussen worried in the interview that corporate managers seem only to be out for themselves – how much can I get out of it? Clearly, a misreading of Adam Smith (in reality most of the corporate leaders who adopt what they think Smith was writing about probably have never read anything but the title of An Inquiry into the Wealth of Nations and surely have never encountered the second book – the Theory of Moral Sentiments.) The Terkel book is about hope – and indeed with some additions of things like Sarbanes Oxley – there is reason for hope.

What divides us.

Last night I was in Nashville working on a project with a vendor. One of the partners met us at the airport and took us out to dinner. The conversation soon devolved to a discussion of the current political environment.

The vendor has long experience in the politics of Tennessee. He also has long experience in higher education. Not surprisingly, he does not share my political beliefs. His last direct involvement in politics was as an unsuccessful candidate for congress – in 1974 when democrats did not lose. He is a thoughtful guy. We have compared values and grandchildren.

We started the discussion as a result of my inherent distrust of the probity of the legacy media. The conversation got around to Iraq and Social Security. In both cases he believes, I think, that a) the president has at best misrepresented his position and that b) the position he is advancing will not aid the nation. I disagree.

Our discussion about Iraq was interesting. I argued that WMDs were part of the rationale for invading Iraq but not the entire rationale and that, at the time, everyone’s intelligence suggested that Iraq held some WMDs. I also argued that the news media had substantially and conscientiously misrepresented what has happened in the middle east – often ignoring stories that would disprove their bias and emphasizing those stories that reinforced their point of view. My friend came back to two questions – first, is the effort there worth the human and economic cost – I think yes – but the discussions about the priorities could probably have been done better. I am convinced that had we waited for the Europeans to act in concert we would have never moved. But the second question was equally important. My friend lives in Brentwood, Tennessee – a place of wealth. There he argued, in his second point, that there is little, if any evidence of sacrifice. He remembers the time in WWII and soon after where the nation was pulled together by its common purpose and sacrifice. Obviously, this effort, to date, has not involved a significant percentage of the GDP that WWII did – but even with that difference, the question is worth asking.

The second area we discussed related to the President’s attempt to partially privatize Social Security. I am bothered that the President has not been more successful here. In graduate school I did a couple of major papers on alternatives for Social Security – this was a few years before the “fix” that was done in the early 1980s – I’ve always thought of that as not a fix but as a prolonging. There are three elements to Social Security – and the democrats to date have lumped them together. The first is the OA part of OASDI – that is a pensioning system that is funded with budgetary kerfluffle and not much more. A trust fund without any real trust. The second part is the SDI – survivors and disability. Fundamentally it is a mix between welfare system and social insurance system to take care of predictable but unforeseen events in life that happen. Finally, there is an old age health insurance program.

The OA part of the system is an increasingly set of false promises. It is a defined benefit program with an increasingly adverse financing mechanism. The reasons for this deterioration are IMHO twofold – demography and political grandstanding. The formulas for the program are overly generous and the coverage of workers to beneficiaries is increasingly narrow. A second problem with the existing OA system is that it is a classic Ponzi design – the early players got paid off handsomely while current and future “beneficiaries” are making an increasingly lousy investment. The president’s idea of private accounts would correct those problems – but even with those changes there probably need to be more changes. The benefits of creating private accounts are obvious – people would own an asset that could help to build both national and personal wealth.

The S,DI program is fundamentally something different. Fundamentally, decisions here are conditioned on how much we should mandate these kinds of costs. These are decisions that our political system makes pretty intelligently.

Finally there is the senior citizens health program. Here both the democrats and the republicans sold all of us a bill of goods. Sure seniors are living longer. Sure new drugs cost a lot. But is increasing an already underfunded program the way to make it better? Does the federal government have any proven expertise in managing costs?

What we came down to is a wish from both of us that the level of public discourse on issues like Iraq and Social Security would be elevated a bit. Politicians often believe they must treat us like children. In the short term that wins elections but in the long term that lowers trust in our civil and political systems. My friend commented that many of the organizations he grew up with – his church, his political party, and other things that were important to him are places where he is no longer comfortable. On that we could agree.

Thursday, March 17, 2005

Larry Summers and academic freedom

So the Harvard faculty voted no confidence in the President. Does it show how insensitive the President is to gender issues? Does it suggest that the faculty believe in civil discourse? Does it show that the current state of the professoriate is vibrant or even mildy thoughtful? None of the above. It most of the 200 + faculty who voted against him probably had not even bothered to read the transcript of his remarks. What he said was not at all outrageous and was appropriately qualified. There are differences between men and women. They do result in differences in performance in some areas. They are not entirely uniform so that there are plenty of examples of brilliant women in math and the hard sciences. But there indeed may be some inate wiring differences that we should be aware of. Did Summers make the next connection that women should be excluded from the sciences and math? Of course not.

What the vote ultimately suggests is a much more profound point - the poverty of riches. If the richest university in the world can become embroiled in this kind of political pandering - then it may have a lot of dough but the really exciting things happening in academia may be happening somewhere else.

Wednesday, March 16, 2005

iTunes Dangers

One of the benefits and dangers of iTunes is the amount of music on the site. Buddy Guy is one of the true American innovators. He and Junior Wells (another innovator in the blues) did a series of sides that are true classics. Many of their works were covered by people like Clapton and Ray Charles and all sorts of traditional rockers. If you search the iTunes site there are lots of cuts to choose from. Once you get there it is easy to say - oh. for 99¢ that is ok - let's get that too.

But I finally found one cut that I would like to have that is not there. Wells and Junior Mance and Guy did a long cut at one point called Talking Women Obviously. It is a sly tune. The three tried to be as minimalist as possible - harmonica, guitar, and piano - but very few notes to convey a depth of feeling. I got it from a Best of Buddy Guy album but iTunes does not have it.

So on the one hand there is tons of music on the other - there is more that is not there. OK that is how markets work - but if you really like to hear masters at their craft - that cut is a must.

Rambling toward corrections - 2 to be exact

In an earlier post, I argued that an earlier version of the Governor's redisticting proposal contained what I thought was a big error. The version would have given a partisan advantage in the structure of how voters were placed into districts - I commented that was a bad idea - but the proposal as it has come out does not have that twist. Regardless, the new one allows, as Tony Quinn suggested in a Bee Editorial on Sunday, for a group of retired judges of the stature of some of the bright lights that have given us ideas from the 9th Circus. (Indeed, it should not be referred to as a circuit - most of their synapses no longer connect) As noted in the earlier post, the idea of creating a partisan neutral redistricting plan is a good one.

#2 - There were press reports that Carly Fiorinna was about to be appointed as head of the World Bank. I speculated with her record at HP - that might not be a bad idea - after all she successfully reduced HPs capital by about 30%. But it turns out that POTUS 43 has nominated Paul Wolfowitz. The neo-con libs love to hate. He is a bright guy and he might be able to do something - to the extent that the World Bank should be encouraged.

Tuesday, March 15, 2005

Hardball and Sense of Message

Last evening I was a part of the audience when Hardball came to Stanford University and Chris Matthews took on the Governor of California. The score at the end of the hour, to the extent that anyone was keeping it was Arnold 1, Chris 0. Possibly the score was even wider than that.

I have worked around politicians for most of my career. In an opening question, Arnold was asked what he thought about gay marriage. He did an elegant dance without answering the question. Asked if he supported gay marriage - he said he did if the people did or the courts - yes he did support domestic partnerships but the voters should decide but they had decided on a previous initiative. And so he danced around this without ever offering something that any political opponent could nail him on. But then in a series of questions the Gov was able to get his message out clearly. Is he against nurses or teachers - no he is against unions.

There was one thing that bothered me. The Governor is remarkably flexible on who should make the decisions. The voters, OK. The court, OK. If we live in a Constitutional system, shouldn't there be some types of limits on how much the courts can do? Are there some questions that are outside of the realm of the courts. Justice Scalia in a speech to the Wilson Center took a slightly different tack when he suggested that the contract of the Constitution is just that - not moveable, not living. If the people want to amend the contract either through their elected representatives or through the ballot box, they can. But the job of justices is to look at the contract and see if an issue fits within those bounds. That view, while many would think it narrow, seems to be a better one. Were one to take the more living view of the Constitution, then why do you need yet another group (unelected) to make decisions?

The Governor's four issues - redistricting, budget control, pension reform, and education reform - got explained clearly and starkly. Matthews tried to bring all of the things you would expect him to bring up with a GOP governor. Special interests. Out sourcing. Girlie men (actually asked by a student). Even Steroids - you name it. But in each case he came back to the message - are you against teachers or nurses or seniors, asked Matthews? The Gov replied no teachers and nurses unions. He created a bunch of excellent soundbites that could be used in lots of ways.

He retold the story of passing through Soviet checkpoints in one of the breaks - and it was as compelling as it had been in the GOP convention.

He was asked a question I suspect he gets a lot - the inevitable question that has "Hail to the Chief" somewhere in the body - and unlike most of his recent predecessors - he did not look for ruffles and flourishes but rather completing his job he holds now. That response was refreshing. With the exception of George Deukmejian - the current incumbent is the only one in a long time not succumbing to the allure of Washington.

This was a worthwhile hour to watch a master of the political craft, even one who stoutly declines to be called a politician. If it is rebroadcast - it is worth seeing.

Friday, March 11, 2005

Ward Churchill and Academic Freedom

The newswires have begun to suggest that Ward Churchill is going to leave UC Boulder with a bunch of dough in his pocket. There is some argument that the money will come from private funds but even that should raise eyebrows.

Academic freedom is not without some reasonable limits. We should not go back to the era of Levering oaths. But there should always be an out for a university to adjudge a person like Churchill as no longer being eligible to stay in the club. His remarks about "little Eichmans" were offensive - but they should be protected to a point. But his inflated claims about scholarship (his educational record is suspect.

The CU academic handbook states "With the conferral of tenure, the faculty member holds a continuing appointment, and the burden shifts to the institution to show why the faculty member should be dismissed. Tenure presumes the continuing fitness of, and need for, the faculty member. The presumption is rebuttable, but only by the administration's demonstrating in a hearing of record before a body of academic peers, as required by the university's and Board of Regents' official policies, that adequate cause exists for taking action against the faculty member.   " That is a tough standard, as it should be. But it should not prevent the administration or even the faculty from reexamining the performance and even the decision about tenure.

In this case Churchill, without a legitimate terminal degree seems to have been fast tracked to tenure. As the Chanellor has suggested a panel will be convened to "determine whether Professor Churchill may have overstepped his bounds as a faculty member, showing cause for dismissal as outlined in the Laws of the Regents. Two primary questions will be examined in this review: (1) Does Professor Churchill's conduct, including his speech, provide any grounds for dismissal for cause, as described in the Regents' Laws? And (2) if so, is this conduct or speech protected by the First Amendment against University action? " But the real question should go a bit deeper.

Clearly Mr. Churchill, a graduate (according to his webpage) of Sangamon State (on Churchill's page he even spells the name of the place wrong) - now the University of Illinois at Springfield has a half a dozen publications from mediocre presses. His last listed was in 1996. What a productive scholar.

IMHO the group making the review should go back and look at the tenure decision - was it legitimate or was it a fraud. Did Churchill obtain his position by claiming Native American heritage? If he did the decision should probably have been rescinded at the point that people began to see his true background and skills. It looks a lot like CU hired him to fill a quota. The people of Colorado and the donors to the university should not be forced to pay off a fraud or to continue to pay a fraud.

His scholarly work from all appearances seems to be shoddy, and his credentials are mediocre. Both of those factors should go into any review of whether or not there are grounds for revoking his tenure. The CU site gives a bit more creedence to First Amendment rights than I might - but that is a bit less dodgy in a public institution - free (political) speech is generally protected in a public instiution regardless of tenure.


I have a group of friends who meet periodically to discuss politics. The original members all had this in common - they once ran campaigns, they all have an advanced degree and they have agreed to listen to each others. OFPG stands for the Old Farts Political Group. The group is a diverse one. It includes people who have worked for conservatives and liberals. It is a good place to understand what is happening in California and National politics.

Today we discussed two issues - the mayor's race in LA - where the city seems likely to elect its first Latino mayor since the 19th century. We had a couple of good rememberances of Kennth Hahn - the father of the current mayor who stayed in the position of county supervisor for many decades. The dad began his political career in the Western part of the city but stayed through it long after the neighborhood had gone from white to black. But the son - who looks like a loser in this race - lacks a lot of the skills of the father.

We also discussed whether the Governor's strategy made any political sense. There could be a couple of ways to deal with the issues the Governor chooses to pursue. One could have gone to the legislature - lost the issues and then drop them into the initiative process. The second alternative would be to do what the Gov has done. He drafted a series of proposals - many of which could have benefitted from a bit more vetting - for example the pension proposal seems to cut out widows and orphans of officers who died in the line of duty. The redistricting initiative seems to allow the appointment of a particular brand of retired judge - for example like the dunce who found that God does not belong in the pledge.

The third alternative seems much better - create a citizens commission - do some public meetings and discussion of each of the issues then vet some proposals and put em on the ballot. But it seems that some of his advisors are more interested in reaping the rewards of running a campaign than in achieving long term changes in the system.

There is a lot of grumpiness about the political system in California. Pick almost any area and you will find two things - discontent with the present a and a series of major issues where the public would want the appearance of positive change. Getting things right would seem to be better than getting things active.

Thursday, March 10, 2005

Is political capital something to spend?

One of the big discussions in Sacramento is whether the Governor has a set of ideas that will make sense to the voters or whether he has bit off more than he can chew. In creating his initiatives he has taken on a number of important interest groups - including the nurses (on mandated staffing ratios), teachers (on merit pay and an appropriate definition of the school funding guarantee - Proposition 98), public employees in general (on significantly generous pension policies) and even the culture of spending/budgeting in the capitol (on creating an expenditure limitation stronger than the one adopted last year) and then finally the political establishment (on how districts are drawn for the legislature and other district based offices).

Conventional wisdom suggests that the combination of forces will ultimately become too much to bear for him and that he will be unsuccessful. You can't take on all of those forces - they call the shots.

But conventional wisdom, as it often is in politics, may be wrong. The combined resentments of voters may be enough to overturn conventional wisdom. Most, if not all voters, do not have a defined benefit pension that allows you to retire with benefits for life. Most parents and even general citizens think the schools have not made enough progress - even though the schools are dealing with a diverse crowd of students. Most drivers are grumpy that their transportation system in the state is increasingly disfunctional - money has been diverted for several years and yet here we have thousands of state engineers. Finally, most observers - whatever their stripe are skeptical that we've got the brightest and the best representing us - although indeed the legislature is in reality often a reflection of the society we live in.

In the end a lot of these issues will come down to who do you trust. And in that category the interests, no matter how special, will have a hard time appealing to the average voter. The Governor moved voters in a short time on a couple of issues in the last election - and there is little indication that he has lost his touch in this area.

Ultimately, this set of issues is about how resources are allocated. The state process for making choices is ponderous and often ignores alternatives that are common in other places - mandated staffing ratios or assuring a standard of care, defined benefit or defined contribution plans, figuring out a logical way to measure performance in schools and even establishing a procedure for choosing our representatives where those directly affected do not have a role in determining who will be elected - are all examples of resource allocation - in essence of the state's political capital. And in each the public perception and the political establishment's perception may be substantially different.

Wednesday, March 09, 2005

Carly to the World Bank

Carly is being considered for a job in the World Bank - presumably not as a teller. I wonder where the story came from. Should it become true we might want to reconsider whether the World Bank should continue. Come to think of it, that is not a bad idea.

Tuesday, March 08, 2005

The Three Rules of Legislative Practice

About five years ago I began to formulate the three rules of legislative practice. For me they are about as complete as it is possible to be. So I thought you might enjoy them. They are a) the Lord Palmerston Rule, b) the Otto von Bismark Rule, and c) the Scarlett O' Hara Rule.

Lord Palmerston - the 19th Century British political person - who worked in and around Disraeli - said Great Britain has "no permanent friends, no permanent enemies, only permanent interests." Indeed, the legislative process requires one to be rigorous about knowing what is important. That means ignoring the fact that someone is almost consistently on the other side of things you care about. Treat people well and it will be returned.

Otto von Bismark - Bismark, the founder of the modern social security system (now there's a claim to fame) once said "Politics is the art of the possible." One of the defects of many political thinkers is that they ignore Bismark. What seems the limits of today's system can be substantially redefined almost overnight. Just ask Howard Dean. Or Assad. Or Gray Davis. This is not a suggestion to go chasing after foolish ideas - but it is also foolish to define the terms in conventional wisdom, exclusively.

Scarlett O'Hara - her insight comes from her great line in Gone with the Wind - she said "Tomorrow is another day." There is a reason it is called the legislative process and not the legislative event. The best players look for the long term and remember the first two rules. Just like Allen Funt - some time, some place, you may be surprised at the possibilities if you are on the lookout for them. But if you play each issue like a death struggle, you will eventually die.

Spring Days

For the last 35 years I have worked in and around the political process starting with the Nixon White House (twice) and the US Senate and the Congress then the California legislature. For the last 30 years, as of March 1, I have worked for the independent colleges of California. The legislative process can be a lot of things. It can be slow, maddening, cruel, fun, exuberant, bizarre, elevating and depressing - in short everything human experience can bring. But one day each Spring, there comes a time when the seasons take over. Like the first day of Baseball (April 7 for the Rivercats).

Today was such a day. For the last year or so I have worked on two somewhat related issues - caused in part by who I represent and in part by what I represent. I will not go into those issues now. But today I started with a key staffer in the Assembly and a senior Senator - talking about both issues. What I found was that the tales of immediate collapse and degredation, spread by one of my antagonists in the issues, were, as I suspected complete fabrications. In both cases these key players argued reasonableness and thought - exactly what the process should be.

It wasn't the weather - but it sure helped.

Rethinking an earlier post

In a post on February 24, I speculated whether the WSJ as a closed network was limiting its effectiveness. (See the WSJ in February archives). The original post was based on an article in WIRED. This morning I was updating some of my settings for the WSJ and think the original direction may have been wrong.

As you browse the electronic edition - there are a number of direct feeds of the WSJ to subscribers and a more limited number for non-subscribers. Opinon - interestingly enough - goes to both. The feeds can go to a desktop, to an RSS feed, or a mobile device. Thus, for the people who actually consume the news that the WSJ offers the ultimate network is created.

That suggests the ultimate individualized market, which is what Kevin Kelly and others have been writing about for years. Does it work in the news business like it does in other commodities? Why would it not?

Monday, March 07, 2005

Ethics - Public and Private

This evening as I was driving back from the airport, I was listening to Dennis Prager - who is often a thoughtful guy. But tonight he missed. He was upset that Boeing had fired their CEO - Harry Stonecipher. He kept referring to "corporate fascists."

Stonecipher and a senior executive were having a consensual affair and the board disapproved. Prager was bothered that a) the board took the action and b) the unnamed female was not also terminated. As someone who has served on several boards I understood the action immediately. To understand the situation one needs to understand at least three things. First, Boeing's previous CEO (Phil Condit) was terminated, in part, for some ethical issues. Second, there is a difference between the CEO and every other position in a company - the CEO to be successful needs to operate on a higher level. Third, transparency demands some things of companies that were not demanded even a couple of years ago - and that is ultimately positive.

Let me explain. First, Boeing's last CEO was terminated and two others were sent to prison for some serious ethical lapses less than 18 months ago. Image here is important and the board understood that. For a company that operates on many public contracts, this kind of breach needed to be responded to clearly and without equivocation. Stonecipher was hired as the company's chief ethics enforcer. He admitted he had screwed up. But the board had to take action. Not acting would have further jeopardized the fortunes of the company.

Second, the CEO position requires different standards of behavior. Prager decried that a CEO whose success was reasonably clear (stock price and profits up) could be fired for private (and consensual) acts. Unfortunately the CEO needs to operate in a way that does not call into question either his company or his team. Indeed, the female did not report directly to him - but his relationship with any senior employee brought into question his judgment in other areas. My suspicion is that if this had been between the CEO and a woman outside the company the board would not have acted. But this kind of breach was just too much to bear.

Third, the examples of Adelphia, Enron, and a raft of others has brought us to higher standards of disclosure and to establishing some penalties for behavior which might have been accepted in earlier times. Last Fall I attended a Price Waterhouse Coopers seminar for board members of public and private company audit committees. There were lots of discussions about the higher standards of disclosure required under law (Sarbanes Oxley or SOX or SARBOX for example) - but even more important was the standard for key personnel to operate on a higher ethical standard. There is still a lot of confusion about how to work in the new world - reporting is perhaps too onerous for the cost benefit of what society gets. But remember the example of Benjamin Graham - who began to call for higher levels of disclosure while still at Columbia in the 1920s and 1930s. Those accounting standards - which ultimately evolved with the development of standards boards like FASB and government agencies like the SEC - encouraged the democratization of investing. Firing a CEO who has such poor judgement as Stonecipher seems to have had is not "corporate fascism" it is more a recognition of current standards of behavior and sound judgment by a board.

The oddest thing about this affair (pun intended) is that it seems that a higher standard was applied to Stonecipher than to Clinton. But what else is new. Think of all the laws that Congress exempts itself from.

Saturday, March 05, 2005

The Shuffle

Since it first came out I have had an iPod. I started with a 10GIG one and now use that for books on tape when I am working out. I then moved to a 40 GIG one which I have used for about the last year - I have yet to fill it up. But when the shuffle came out in January, I bought one just to see how it works. Indeed, if you think of it as a 1 GIG pen drive, it is reasonably priced even if it did not hold music.

The shuffle has two modes - shuffle and straight through. I created a file in Itunes called Shuffle which I use to load it - I have about 120 songs on it - which means I could hold a lot more. The shuffle feature mixes and matches all of the songs in the file - which means for me you can switch between bluegrass and rock and roll and opera. That creates some interesting mixes but when you are traveling it is wonderful to just sit and listen. It has helped redefine how I listen to music. Plus the compact size is great to just throw in a pocket.

iTunes has a lot of the characteristics of Tivo - so the rips that one can create are unique and the combinations are almost limitless. The Shuffle allows you to do that on a smaller scale. But all of this can be done almost on the fly - that flexibility is great.

There are a couple of problems with the whole iTunes thing. First, is disk size . If you have, as I do, more than 3000 legal songs - that eats about 12 GIG on my laptop's hard disk. One solution would be to move all of the iTunes files to another computer - like a mini. And I may do that. But with an 80 gig drive on my laptop - between iTunes and iPhoto I am limited on the other things I can keep on my laptop. The second problem is the addictive nature of iTunes Music Store. When my wife and I saw Ray - I immediately went home and searched for Ray Charles and then downloaded a bunch of his songs. I play them a lot (he was an innovative musician in many genres). But that can become expensive if you do not watch yourself. The library keeps getting more and more interesting.

These are consumerist dilemmas but ultimately good ones to have.

Thursday, March 03, 2005

The H in HP is not Hungarian

Technology Review is a wonderful magazine produced at MIT which includes a lot of timely and interesting articles on a raft of technology based subjects. In the electronic edition of TR there was a post today by a former HP engineer who was an emigre from Hungary. He describes in great detail how poorly Carly Fiorina understood how a technology company advances. The engineer described HP as a place that examplified "a spirit of adventure and a belief in unlimited possibilities." But with the ascension of Carly that spirit was sapped. He suggests that the new management team was scared of nervous investors - indeed that was probably true - but as one who invested in HP - I was nervous because the new management team had little or no understanding of the things that made HP a great company.

Interestingly enough I was with the president of the University of California on Tuesday evening and he (who spent most of his career at Bell Labs) lamented the demise of that outfit. In both cases the researchers were allowed to do what if problems rather than solving for the mundane. I wonder what our long term prospects for continued advances are if we do not adequately appreciate the people who can ask - what if.

The address for the article titled Carly's Way is - but if you have any interest in technology issues you should subscribe to the magazine.

Wednesday, March 02, 2005

How not to succeed in the new era

The RIAA (Recording Industry Association of America) is at it again. This time in a series of suits designed more for harassment than any legitimate purpose (what else is new) they have sued a dead person, several people who haven't a clue about file sharing and a bunch of universities - who seem to be included because they have the audacity of maintaining a network for their students and faculty.

It should be a requirement that any member of the RIAA wear wooden shoes because these yahoos are really like their counterparts over several centuries who are not bright enough to look to the future. The claim made by the RIAA is that millions (billions, trillions) of dollars are being lost to illegal downloads of music. The data does not support the contention but that has not seemed to stop these buzzards.

Professor Lessig at Stanford, who has done some of the most interesting thinking about the relationship of technology to copyright - tells the story in one of his books about the first videotape producers who came to Disney and said - we have this great idea for a new technology. The Disney people were having none of it. Ultimately, the increase in market created by these new forms of home viewing of movies have transformed the industry and enlarged profits.

I have about 3000 songs on my laptop - to help fill my iPod - and all of them are legal - either from my own collection of from the iTunes site. Indeed, at one point I used Napster and Limewire to search for music which was no longer available. But I soon discovered that the free sites had a lot of problems. They rarely offered the full cut of a song. Quality was uneven. Connections were also uneven. The iTunes alternative became a quick and wonderful alternative to the lousy quality of the alternative services.

Markets will always figure out a way to price things reasonably. Were the RIAA even minimally adept they would try to lead the trend in the direction that would be helpful to artists and consumers. But of course that is not who they really care about.