Sunday, April 27, 2008

Opening Day of Trout Season

Fishing on the Lower Truckee
Original photograph by drtaxsacto
This year's opening was rather sparse. There were not as many fishermen as last. Our group caught the same number of fish (0). This early in the year they are often reluctant to bite at just anything. The weather on the Lower Truckee was magnificent. Snow has mostly gone from the Sierra - although there are still patches. The water was cool and clear. The food was great. And in the space of about two nights of conversation I think we solved all but six of the world's problems. Unfortunately, none of us was taking notes.

Saturday, April 26, 2008

The Sad State of Public Policy

Over the last couple of weeks, I have thought a lot about what is wrong with the legislative process. Perhaps more than at any time in my career, I think the way we make policy is broken. There are three examples that I think would illustrate the problem.

#1 - The federal process for the Reauthorization of the Higher Education Act has gone on longer than any one in the history of that law. In the early part of the process both houses went through a series of hearings which were at least partially expository about the problems and benefits of the current act. But that was a long time ago. In the intervening time, they passed a reconciliation bill which reduced margins in the FELP loan programs , and thus changed the dynamics of the program. The current bill is large and complex. Many of the parts do not fit together. One example, a main focus is on college costs (actually a crude set of attempts to regulate prices) but both bills impose a ton of new reporting requirements which are undoubtedly likely to raise costs (and also ultimately prices). For the last several weeks both sets of staffs have been working in secret to craft a bill which will undoubtedly not solve the basic issues of what is the appropriate role for the federal government in higher education.

#2 - The Speaker's role in delaying the discussion of the Colombian Free Trade Agreement (discussed in more detail in a previous post.

#3 - The California budget process is in shambles. The state faces a coming deficit in the range of $10 billion. Yet, each of the subcommittees considering parts of the budget are working through it like a normal year. In the end the legislature has chosen to disregard the voter passed mandate that the budget be the only item on the agenda in times like this. In the end some collection of leaders from the Administration and both houses will jerry-rig a budget that will carry us through another year but with little hope that any of the fundamental issues that need to be examined will be looked at with care. How much revenue is enough? If we do not want to raise revenues, what do we want to cut? This is not confined to California - 34 of the 50 states have varying states of budget disrepair.

If the examples are representative, then how did this come about? The easiest response, is reapportionment. In most cases as we have gotten more sophisticated in our process to determine how districts are drawn the people responsible have reduced the number of competitive districts. I think there might be another possible explanation. In his last book (before he died) Mancur Olson, the University of Maryland economist argued that as democratic systems elaborate, they begin to encounter increasing transaction costs. More "cooks" want to "spoil the stew." What would happen to the process if the number of legislative staff (in legislative offices) were reduced by 50%? Like many other idealized potential solutions, this one would be circumvented in some way (that indeed was one of the ideas in California's proposition 140 and it did not seem to have the desired effect).

But without some significant changes, two things are likely to happen. First, trust in the political system will continue to erode. Second, we will have an increasing number of complex and ultimately non-useful laws passed. Neither is a good result.

Friday, April 25, 2008

Nancy Pelosi and the Interests of California

The Speaker's refusal to put the Colombia Free trade agreement up for a vote is costing the state's businesses real money. 20% of California's manufacturing workers depend on export related jobs. The state actually ranks second to Texas in terms of exports of merchandise to Colombia and fourth in terms of total exports. Currently all of those exports are burdened with tariffs, which would be eliminated with the FTA. The state is also the second largest exporter of agricultural products to Colombia. Thanks for your support of California's workforce Madam Speaker.

Thursday, April 24, 2008

Intellectual Honesty

I was in Philadelphia for the last couple of days and whilst on the trip read a new book that I found compelling. History Lesson, a Race Odyssey is story of a Wellesley Professor of Classics (now emerita) attempt to pursue the truth.

Professor Lefkowitz is not someone I would normally seek out. After a short introduction to Latin before I went to college, I chose to avoid the fields in Classics as an undergraduate. But I do know good scholarship when I see it. Her odyssey began as a result of a movement that has infested a lot of colleges and universities across the country called "post-modernism." Postmodernism is an attempt to argue that objective reality or truth cannot be known. Postmodernists suggest that knowledge is subjective. In the particular instance that Professor Lefkowitz discusses, a fellow professor at Wellesley argued that the Greeks stole major ideas in their philosophy from the Egyptians, including stealing ideas from the library at Alexandria. The same professor argued that the Jews were in large part responsible for the slave trade. Unfortunately for the supporters of these absurd ideas, historical evidence, which on both points is unequivocally clear, is irrelevant. For example, the library at Alexandria, according to historical record, was not constructed until after Aristotle's death, so it would be a bit hard for the Greek philosopher to appropriate ideas from a library that was not extant. But the post-modernists don't want to deal with those kinds of details.

The antagonist in this narrative is a (now) retired professor at Wellesley in Afrocentric studies, named Anthony Martin. he and others made the claims evidently to promote the idea of the primacy of African civilization. But as Lefkowitz so clearly points out the unsubstantiated claims do not accomplish that. Professor Martin seems to think that bullying tactics can be substituted for scholarship.

There are two conclusions I found from the book. First, Professor Lefkowitz is a careful scholar. She is a dedicated researcher who understands the social nature of knowledge in a university. She expects colleagues to engage in civil discussion and debate. She comments "The best argument is not the one we like, or the one that is argued most persuasively,but the one that offers the best account of all the available facts." As was cited in an Honorary Doctorate of Letters that she received from Trinity College, she has a deep commitment to "intellectual integrity."

Second, the performance of the Wellesley administration in the incidents described by Dr. Lefkowitz, leave a lot to be desired. Several of the College's senior administrators seem too ready to ignore the absolute demand for civil interactions on a college campus and sacrifice those ideals for political correctness.

Wednesday, April 23, 2008

Quoting Bill Clinton

The WSJ has a funny story this morning about Bill Clinton's exchange in Pennsylvania yesterday. Clinton tried to get a dig in on Senator Obama by claiming that Obama had played "the race card" earlier in the week but on Tuesday he was asked by an NBC reporter about his comment and he responded testily -

"No,no, no. That's not what I said. You always follow me around and play these little games, and I am not going to play your games today. This is a day about Election Day. Go back and see what the question was, and what my answer was. You have mischaracterized it to get another cheap story to divert the American people from the real urgent issues before us, and I choose not to play your game today. Have a nice day."

While the former president's comments seem clear, it might be helpful to annotate what he said. "No,no, no. That's not what I said. I was not that direct. You always follow me around and play these little games, like quoting me accurately, and I am not going to play your games today, because I already scored the points yesterday. This is a day about Election Day. (Don't you know about Scarlett O'Hara - this is today and that was yesterday and "tomorrow is another day.") Go back and see what the question was, and what my answer was I know you have the tape and the transcript but the rest of the people do not. You have mischaracterized it (my underhanded attack on Obama) to get another cheap story (which is different from the cheap shot I attempted) to divert the American people from the real urgent issues before us (like whether or not I can get back to running the country), and I choose not to play your game today (of course when I think it will advantage the campaign I will bring the concept of parsing to new levels. Have you no knowledge of the nuances in meanings that I have attempted to foist on the American people?). Have a nice day(stuff it!)."

Monday, April 21, 2008

Powerpoint and Policy

On Friday I went to a seminar on how to close the "Achievement Gap" - which is educational speak for the low level of college attendance (and K-12 performance) that is particularly troubling for some groups based on income and ethnicity. California's achievement gap is compounded because even our highest performing students are not as good as they should be - scoring in middling ranges for the best students. There are lots of ideas about what causes this problem and even more about how to solve it. One of the annoying problems in any academic seminar like this is the need for everyone to speak in a special language. There were a ton of special definitions which were then translated into acronyms. I guess the presenters thought that would formalize some of their observations, but I find such devices tedious and unnecessary.

As in any profession there are a lot of silly notions that continue to get perpetuated. The "crisis" in the schools or universities is something that public policy types love to hype. For the last couple of years, we've heard an incessant drumbeat about the number of Chinese engineers that are turned out every year compared to American universities. Jay Mathews, the education writer for the Washington Post, has an excellent article in the Wilson Quarterly called "Bad Rap on the Schools" which debunks the numbers (actually on a per capita basis we produce more real engineers than China) but also suggests some alternative ways for us to think about how to get the most out of our schools. But from my perspective, we continue to do an inadequate job in assuring that every student is developed to their best potential.

The morning session was taken up by a series of research papers. As is normal now each presenter had a powerpoint presentation. The photo is from one presentation (which was one of the best slides) explains something which I believe is critical for presenters today. My concern here came on many levels - first, there is too much text on the slide - these things should supplement what the speaker is saying. Most of the presenters thought they would duplicate their comments from their speech on the slide. Second, and again, this is one of the best, many of the slides had terms which may have meant something to the researcher but which sounded like jargon to me. What are "mathematical habits of mind?" Most presenters who use the technology seem to give little thought about how it can aid in conveying their point.

The best paper of the morning was one presenter who argued, in my mind quite clearly, that the best performing schools were generally smaller (or divided into more manageable units) and had leaders who had a set of clear ideas about what was trying to be accomplished at the school. That argues against standardization efforts like No Child Left Behind. It also argues that when training administrators we need to think more about a clearer understanding of management issues. The best schools of education are doing that these days - but many still emphasize the bureaucratic secrets of schools.

The final concern about Friday, was translation. With about ten papers, I came away with one very good idea (leadership counts with some good demonstration of how that happens) and a lot of jargon. I also came away with the continued recognition that we need to do better both on policy and powerpoint.

Friday, April 18, 2008

Mason and the Ballgame

Tonight we took Mason to his first Rivercats game of the season. The differences between a grandpa and a fan are tremendous. In the middle of the ball game I took Mason up to the kids area to run around. That was of course the inning that the Cats scored three runs to go ahead of the Sidewinders. As we were going up they had just fallen behind.

Mason has a great time in the kids area - he did two five minute stints in the bounce house as well as a couple of times up and down the slide.

Had there been a choice to have been sitting in my seat to see the three runs of being with Mason while he frolicked. I would again choose the frolick. Some things are more important than three runs.

Rhetoric and Reality Part II

This video goes with the earlier one. Obama decries the negative politics of Washington but then engages in it himself. The Center for Responsive Politics has found that Obama is raising PAC money for his presidential run at twice the rate of Clinton. He should not be able to have it both ways. This video is a compilation of a couple of things. First, Hillary's now famous Beer and Back and then some of Obama's rhetoric on the issue and then comments from Jon Stewart. Obviously, Hillary was pandering in her Indiana stunt. But to a certain extent, Obama's hypocrisy is even more troubling and disingenuous.

Rhetoric and Reality Part I

Last night in North Carolina Senator Obama made a speech explaining why he thought the terms of the debate the night before in Pennsylvania were wrong. His rhetoric is often lofty, but when you examine the substance of what he has to say, it falls far short. He seems prone to criticize the debate format. He is also able to get in some real digs at Senator Clinton and wrap them in a rhetorical sandwich which seems to say this is not the usual politics, all they while getting his digs in.

Last night he said the following after criticizing the format of the debate which he argued spent too much time on personal stuff he said "How we are going to solve the real problems that face the American people? The problems that matter in their lives. How are they going to pay the mortgage? How are they going to save for their child’s college education? How are they going to make sure that they can pay those health care premiums? How are they going to make sure that they don’t lose their job? How can they save for retirement? How can we make sure that Social Security is there so we can count on it? How can we make sure that their loved one doesn’t get sent on the third of fourth rotation to Iraq? How can we make sure that that loved one is properly cared for when they come home? Those are the questions that the American people are asking."

As I read through the list I saw many issues which I believe the federal government either cannot or should not address and many (like college savings) where the federal response is fundamentally pretty good and to which Senator Obama has not offered any new and substantive proposals.

The polls for Tuesday seem to point to a Clinton victory in Indiana and Pennsylvania and an Obama one in North Carolina. Neither candidate showed well in these exchanges.

A Fun Game

Last night the Cats played Tucson in the third of their current series. It was an interesting game from many perspectives. First, among the eight pitchers in the game, they had 25 strikeouts. There were only two home runs but Wes Bankston's bottom of the seventh turned the tide, we had fallen behind and his never in doubt HR, brought us back into the game. We got the go ahead run in the bottom of the eighth.

But there were also some odd things. Two groups of people thought it would be funny to run across the Tucson dugout, which is right in front of our section. The first were two young women, who got cheered. Then some middle aged guy with a beer in his hand did it and spilled a lot of his beer - he was booed. All three were ejected from the game.

Two groups tried to whip up the crowd. First, a guy got up with a plastic pink flamingo and tried to get us into the game, he was largely unsuccessful. But a group immediately in front of us began to do a cat squeal and then move their arm in a cat like gesture that may actually catch on. Attendance was about 7500.

Wednesday, April 16, 2008

The Silly Season

Senator Obama was endorsed by a group today called the American Hunters and Shooters Association. Its "president" (a failed democrat candidate for Governor of Maryland and advocate of handgun control measures, said "Sen. Obama will be a strong voice an unabashed voice for America's hunters and shooters and it is with great pleasure that we endorse his candidacy,"

People will immediately see through this nonsense. Even if the group does have a) a website and b) a mouthpiece.

Watch next for the endorsement from the AABD (American Association of Boilermaker Drinkers).

A disturbing poll

Globescan does a periodic poll of support for free markets. The most recent one in April has two disturbing trends. First, support for free markets seems to be in a fairly precipitous decline in most places in the world. Even in the US there is a decline in support. From my perspective, the second trend is even more troubling(although certainly related to the first). There also seems to be increasing support for strong governmental regulation. A plurality in each of the countries (and in some cases a strong majority agree with the notion that "the free enterprise system and the free market system work best in society's interest when accompanied by strong government regulation." A lot of course depends on how people interpret the definitions but the trend is none-the-less bothersome. The lessons from Public Choice economics seem to have faded a bit - indeed, there are public goods but there is, as Gordon Tullock so rightly pointed out, public bads.

Tuesday, April 15, 2008

Nancy Pelosi should have read Bastiat

Speaker Pelosi has determined that the House should violate Fast Track authority legislation and prevent the Colombian Free Trade Agreement from being considered by the Congress. Under existing Fast Track standards trade agreements are submitted to the Congress after being negotiated by the administration and are then required to be voted up of down in 60 days or less. (45 days plus 15) One of the gifts of the new congress in 2007 was it allowing this important authority to lapse last July. But since the Colombia agreement (along with a couple of others) was negotiated before last July, it should get considered under the old rules. For my money the Speaker sounds a lot like the Queen in Alice in Wonderland - defining reality in any way she wants.

The AFL doesn't want the Colombian Free Trade agreement voted on, indeed its leaders would love to have NAFTA and all the other liberalizations of trade to be abrogated. It seems they believe that the "deindustrialization" of the US has happened as a result of all this free trade. Presumably, the slide experienced by the AFL in promoting membership over the last couple of decades has been brought about because of all this free trade and by eliminating trade with anyone but us. That is, of course, nonsense. Again as one labor leader told me at one point John Sweeney is no Lane Kirkland.

The oddity of the AFL position comes from the realization of what the FTA would actually do. Colombian imports come into the US tariff free under another trade pact. But key US exports face a fairly heavy tariff when entering Colombia. Thus, Pelosi by stopping the FTA is actually hurting the prospects for American workers who rely on exporting their goods. (Computers in California, consumer durables in Ohio and Michigan for example)

Part of this comes from myths in labor. A year ago or so some union types argued that 60 million workers would join a union "if they could." While the percentage of workers in the private sector continues to decline (despite the idiocy of the argument above - workers are choosing not to join unions) the percentage of public sector employees with union contracts is almost 40%. The linkage between public policy and public sector unionism is not a coincidence.

Last week a group of labor leaders from Colombia came to D.C. to plead their case. One Gustavo Palacio, who leads the miners union, said he supports the FTA. SeƱor Palacio also supports the creation of a union that would be "independent, democratic and pluralistic." The schlerotic leaders of the American labor movement see the world in yesterday's terms. They don't give a hoot about being independent or democratic (at least in the non-party sense) or pluralistic. Witness their attempts to force new kinds of voting procedures for union elections which they cannot seem to win, when workers are given minimal procedural safeguards.

Ultimately the problems with American industrial unions are related to what they offer their members. Instead of spending time on improving conditions of their workers they pursue a massive agenda that mostly means more government. When given the opportunity most non-governmental workers choose not to join. The unions may be partially victims of their own success in the legislative process. A good example is the eight hour rule. At the end of the Wilson administration in California our industrial welfare commission adopted a change in the way overtime pay is assessed. Previously a worker would be eligible for overtime when working more than eight hours in a day. Under the Wilson rules, a worker could collect only for more than forty hours in a week. The Wilson commission thought that many workers wanted to be able to have more flexibility in their scheduling. So for example, a worker could choose to work four ten hour days and have a permanent three day weekend. There was no evidence that under the new rules that employees were being tied to their workplaces. But the unions would have none of it. They rushed through a very restrictive set of rules which mandate an eight hour rule for overtime with only very limited exceptions.

But as one astute labor leader told me at the time, that was a dumb quest. Bastiat, the French Nineteenth Century economist argued that there was the "seen" and the "unseen" in policies. In this case, labor scored a big "victory" (seen) with the move back to the old rules (and even a bit farther). But they undoubtedly reduced their opportunity to negotiate specific rules in places they were seeking to organize which would attract more potential members. (the unseen) Labor membership in California continues to decline except among governmental workers.

Where are they now?

In the early part of the season one of the discussions in our section of Raley Field is where are the players from last year. I previously discussed Dan Johnson, who was released from the A's. But there are also some less prominent players. For example, for the last couple of years, Jeremy Brown was one of the Cat's catchers. Jeremy had a OK bat but his base speed was pretty slow. The joke was he could turn a home run into a double. Jeremy does not seem to have been picked up this year.

Lou Merlino was the inspiration of the Cats last year. He had had a good run, mostly in the minors but with some limited experience in the bigs. Last season looked like his last not because he was not inspirational but because he was past 35. I argued that when Tony D'Francesco retired that Lou should have been given the shot to manage. But the A's organization chose someone else. He retired.

Then there is Lloyd Turner. We sat with Lloyd at the team breakfast last year and profiled him. He was a soft spoken modest kid. He was stunning in the outfield. The night before we had breakfast with him, he had made one of the most spectacular catches I have ever seen. But he could not hit AAA pitchers. On the Cats he had a short run and then settled into a .170 range. Soon after the breakfast he was demoted to the Stockton Ports. There he also hit about .170. He seems to not be playing this year either.

We have followed a couple of careers, I have mentioned Ron Flores, who is now a reliever in the Cardinals organization. I hope he makes it back to the bigs this year. We actually saw the debut and finale of one player, John Jaha, who was a star for the Ports and then had a robust career in the majors. He announced his retirement at the end of June in 2001 and drew an ovation from the fans.

Over the time that the team has been in Sacramento we have seen a number of interesting players who simply drop off the radar. The simple answer here is that there are a lot of players who want to play professional baseball and only a limited number of spots. You get attached to some of these players. Some have appealing personalities on the field. Others have quirks in their playing style. In the end each is trying to make it in a very competitive business.

Monday, April 14, 2008

30° and change

Tonight's Rivercats game was a real change from the first three home games. Yesterday it was 90° - today it was about 60°. We had pretty good bats tonight - Both Linden and Gonzalez got homers but more importantly we had 12 hits. Finally, we also won the game. It is early in the season so there is still a lot to see where this team will come out. But tonight they showed some flare.

It was cold enough so that my wife decided to go back to the car in the top of the sixth. I said I wanted to stay through the sixth and I am glad I did. Garciaparra went out after going 3-3 (with a walk). But then things started to happen. Rogowski led off with a double. Petit came up and eventually walked but not before Rogowski was able to advance to third on a wild pitch. Knoedler hit into a fielder's choice and Rogowski was out at home, but Petit advanced to third and Knoedler got to second. Blasi hit a long single,and then advanced to second on a throwing error. Then Putnam singled. Linden walked. Baisley hit a solid double and scored two - five runs total.

At the end of the sixth I went back to join my wife and we listened to the rest of the game on the way home. One disappointment about this season, the Cats are now on 92.1 FM - the fans in our section wonder whether that designation covers both where the station is on the dial and the total watts of power. The signal is very uncertain. We hope that gets better.

This is where it gets interesting

Obama's response to the attacks on his "guns and religion" comments from the weekend evidence a bit of desperation

"She’s running around talking about how this is an insult to sportsmen, how she values the Second Amendment, she's talking like she's Annie Oakley! Hillary Clinton's out there like she's on the duck blind every Sunday, she's packin' a six shooter! C'mon! She knows better. That's some politics being played by Hillary Clinton. I want to see that picture of her out there in the duck blinds."

Mr. Obama should not underestimate the senator from New York, over the weekend Senator Clinton went into a Pennsylvania bar and downed a boilermaker.

Sunday, April 13, 2008

The Rivercats are back

We missed opening night for the Sacramento Rivercats but went to the last two home games. None was much to write about. Because both are on rehab we got to see Nomar Garciaparra and Jason Repko play for the Las Vegas 51s - neither did much in the games we watched. That is one of the benefits of minor league ball you get to see some real stars up close.

Prices are up a bit at the ballpark. But not by much and ticket prices have remained the same for the club.

One of the clear differences between the minors and the majors is when the team begins to jell - in the minors you may not have a good idea about how the team will play together until June or July. The heart of last year's team actually did not show itself until late July. Today's game was more like June than April - in terms of temperature. The Cat's bats for the last three games have been relatively quiet. Most of the team is new.

We found that Ron Flores (the reliever for the last couple of years) was traded to the Cardinal organization (Memphis Redbirds) and that the A's Dan Johnson was put up for assignment. The A's are long on talented first basemen. Dan was a real star in Sacramento and had a couple of good seasons in Oakland - but with Barton and others he had not played much during this Spring. We wish him good luck. Finally, the inspiration from last year's team (Lou Merlino) seems to have retired. I thought he would have made a great manager. But that was not to be.

The underlying problem for the Democrats

Senator Obama put his foot in it over the weekend, but the issue raised by the controversy is more about the mindset of many in the democratic party than just a simple misstatement. Obama is quoted (in the LA times) as saying in Muncie, Indiana that
"You go into some of these small towns in Pennsylvania, and like a lot of small towns in the Midwest, the jobs have been gone now for 25 years and nothing's replaced them. And they fell through the Clinton administration, and the Bush administration, and each successive administration has said that somehow these communities are going to regenerate and they have not. So it's not surprising, then, that they get bitter , they cling to guns or religion or antipathy to people who aren't like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations." The assumptions in the original statement are mind-boggling. He seems to assume that middle America clings to religious beliefs or support for guns based on bitterness. He tried several times to clean up his mess. For example he said "Lately there has been a little typical sort of political flare-up, because I said something that everybody knows is true, which is that there are a whole bunch of folks in small towns in Pennsylvania, in towns right here in Indiana, in my hometown in Illinois, who are bitter." Indeed there might well be bitter people in those states, but is a belief in religion or guns based on bitterness?

Later he said "They are angry. They feel like they have been left behind. They feel like nobody is paying attention to what they're going through. So I said, well you know, when you're bitter you turn to what you can count on. So people, they vote about guns, or they take comfort from their faith and their family and their community. And they get mad about illegal immigrants who are coming over to this country, or they get frustrated about how things are changing. That's a natural response.

"And now, I didn't say it as well as I should have, because you know the truth is that these traditions that are passed on from generation to generation, those are important."

This afternoon I was working out and listened to a podcast from the National Constitutional Center where Dinesh DeSouza discussed discussed his recent book (The Enemy at Home) in which he argues that the cultural left's linkage of cultural values and political ones has helped to create problems for US foreign policy by linking political values (our support for democratic systems) with cultural ones (our support for things like abortion rights in all countries). DeSouza argues that much of our problems in the middle east lie not in our support for democratic reforms but our support for looser culture. He makes the very strong point that Bin Laden purposefully tried to argue that we are not a Christian nation.

Obama's comments are a part of what DeSouza is trying to point out. The listening issue that Obama discussed in one of his responses is something that he himself should try. Most democrats in the country have a deaf ear to those who hold differing cultural beliefs or who support a reasonable standard for the Second Amendment. The examples are too numerous to list.

DeSouza argues that US foreign policy would be stronger were we to be a bit less dogmatic about linking cultural and political beliefs. He suggests that many cultures around the world could support democratic values without necessarily buying into the other values that many in our society want to promote. That does not mean we should repress the diversity of cultural approaches we have in this country, merely that we should be respectful of values in other countries. For Obama, it would also be good if he were a bit more respectful of differing values in this country.

Saturday, April 12, 2008

Moderating Comments on This Blog

This morning, an anonymous reader made a comment on one of my posts which I thought was inappropriate. I do not reject comments that are contrary to the opinions I express, indeed, I welcome them. But I do reject comments which are inappropriate in tone. I probably would have published the comment, had the person not hid behind the veil of anonymous. But if a reader wants to both make inappropriate comments and hide (this was simply a sophomoric reference to one of the people I wrote about in the last week) then let the comment also remain anonymous.

The cowardly commentator was on a Charter Communications ISP.

Thursday, April 10, 2008

Joe Shell

An important political figure in California politics died earlier in the week, his name was Joe Shell. I met him when I first came to Sacramento. Joe had the reputation for being reasonably gruff. He represented the independent oil producers after he left elected office and he did a pretty good job of representing them. That group is a pretty independent group and Joe's demeanor was a pretty fair representation of his clients. He had a strong respect for the process but not so much that he was caught up in it. He died at 89. Joe's political career was mostly in the state Assembly as a member from LA. He founded a volunteer group called United Republicans of California. He became the minority leader of the Assembly before his run for Governor in the primary. But it was his independence that always impressed me. Four short stories about him.

#1 - He ran against Richard Nixon for Governor in the GOP primary in 1962, as a conservative. He lost and was grumpy almost evermore because the LA leaders who eventually supported Reagan four years later did not support him in that run. He later backed George Deukmejian for Governor. As a favor Joe was then appointed to the Agricultural Labor Relations Board by Deuk - one of a number of commissions that old politicians can draw a stipend for minimal work. He soon resigned because, as he said at the time, there is not enough work here for five full time commissioners to draw a salary.

#2 - Joe had a pretty clear sense of both who he was and who his opponents were. At one point he quipped "I've gotten sick and tired of calling people liberals when they're basically socialists."

#3 - In one of my first years as a lobbyist I was fighting a bill by then first term Assemblymember Maxine Waters. We fought her through the Assembly and finally got the amendment we needed in the Senate Judiciary. At the next hearing I found that she had not put the amendment demanded by the committee. She simply told me, "I decided not to" - I saw Joe in the halls and he said go get the chair of the Judiciary committee who was a liberal democrat from LA but who also had a sense of the process. I found him, told him what had happened and then he and I went to the Appropriations Committee, when the bill came up the Chair stepped up, said Waters had ignored a committee amendment and the chair of Approps said Mrs. Waters your bill is dead. She protested but the bill was dead. Joe understood the process well.

#4 - Joe was not much for theory. He was a very practical guy. The first time I met him, I asked him what constitutes a good lobbyist? Joe replied, enigmatically (especially for him), "footprints in the snow." It took me a while but I soon understood his reference. It is still good advice.

An inability to count

Those attached to the political class, both elected and in the commentary subgroup seem to consistently demonstrate an inability to count. Witness two examples:

#1 - The manufacturing decline - some Washington pundits yammered about the "decline" in manufacturing in the country. Indeed the share of workers employed in manufacturing in the US has declined. At the same time productivity has increased. A third factor which might be considered were anyone listening would be what has happened to other parts of the economy. (And growth in non-manufacturing jobs has grown pretty vigorously.) A normal person would look at all that data and conclude a) we have a pretty dynamic economy and b) think about ways to focus on the positive. But people like Kevin Phillips and Pat Buchanan can't seem to do that. Presumably, we will soon hear from these wits that we should soon worry about shortages in food because the share of the workforce dedicated to agriculture has declined. After all, less than a century ago more than half the population worked in agriculture.

#2 - The Columbia trade pact - Speaker Pelosi delayed, perhaps permanently, the Columbia trade pact by refusing to calendar a vote on it. Under fast track authority when an agreement is submitted to the Congress it has to be voted up or down in 90 days. Pelosi is claiming that labor activists in Columbia are in "danger." The real reason for this extraordinary maneuver is Pelosi's slavish devotion to less than 7% of the workforce - the labor luddites. In the short and long term, we benefit from increased trade, from small pacts like the Columbia one, and from larger ones. We here is the entire economy not the declining percentage of workers who belong to unions.

Wednesday, April 09, 2008

Breaking the Narrow Bounds

This morning in Slate there is a story about John McCain and his relationship to Morris Udall, the former Democrat congressman from Arizona. Udall, who died in 1998, was a liberal icon. But as the story relates, he took a young McCain under his wing. Not because he was trying to move his ideas but because it was the right thing to do. The Slate story goes on to suggest that McCain, during the last years of Udall's battle with Parkinsons, repaid the favor by visiting the former congressman in the hospital. He did that not for the publicity but because it was the right thing to do.

Also this morning Dennis Prager had John McWhorter, who is a distinguished author, who is Black, and a fellow at the Manhattan Institute, who told the audience that he is prepared to vote for Barrack Obama because he believes that if Obama wins it might have a long term positive effect on young Blacks. McWhorter undoubtedly disagrees with many of Obama's policy positions.

There is a common thread here which I think is important. In both cases, these are demonstrations of our continued attraction to civility. Ultimately our political system is dependent on discourse which is founded on fundamental disagreements about philosophy. At the same time the thread which binds us together needs to be done with respect. In both of these instances we seem to be revaluing something which has been largely absent from our political debates in recent years.

What's Wrong with the Legislative Process

On Tuesday, I spent a couple of hours in a hearing of the Senate Judiciary Committee of the California Senate. Before the bill that I was waiting for came up two other bills were considered and passed, one dealing with the re-sale of motion picture and television programs and one with catered food. Both issues involve contracts. Remember from those of you who are not lawyers (and I am in that group) that a contract is "An agreement between two or more competent parties in which an offer is made and accepted, and each party benefits." In both cases the legislators wanted to violate that simple but important principle.

The short title of the bill by Senator Oropeza (SB 1443) "require every written contract entered into by a retail food facility , as described, to prepare or serve food for immediate human consumption to include language that provides the purchaser of the food with the option of authorizing the food facility to donate any leftover food, as defined, to a nonprofit food bank or to provide all leftover food to the purchaser." The author tried to defend her bill as a way to "encourage" buyers and sellers not to waste food and also to help provision food banks. Caterers are mostly small businesses. Some supply food by the plate, others by the person. In other words, if you want a catered party you might pay for 100 guests to get chicken or you might pay to serve 100 guests to get hamburgers or hot dogs. In the first case, most catering contracts have an overage provision, which states that the caterer will prepare some amount over the guarantee in case your uncle Fred shows up unexpectedly. In the second case the caterer does not know at the beginning of the event how many hot dogs or hamburgers will be consumed. At many events in recent years that I have attended, if there is overage, the two parties to the contract agree to donate the overage after the event to a local food kitchen. Oropeza would like to limit the options for caterers in the way they write contracts. Ultimately, the bill could have two effects. First, it might increase the cost of catering because the caterers would charge for those informal extras that are inherent in the current contracts. But it might also make events less fun because conceivably caterers could also make their guarantees even less flexible. If cousin Joe shows up unexpectedly, tough beans, no food. In either case the willing exchange between customer and caterer is limited to try to get a noble idea accomplished. (Which is already being done in a lot of cases.)

The second bill is even more silly. The short title of SB 1765 by Senator Kuehl states "this bill would additionally prohibit the holder of rights in a motion picture, television program or series, or radio program from selling or licensing those rights for less than their fair market value, as defined, where a third party is entitled to receive payment based on the proceeds from the sale or licensure." Kuehl tried to make the case that the entertainment industry is more "vertically" integrated than in the past. (i.e. that there are actually only a few entertainment companies who own TV,Motion Pictures and the like) She claimed that those companies sell their old TV and Movie shows to themselves at below "fair market value." The complainants here are the writers and other people who own a piece of the old content. Never mind that every contract for this medium is hovered over by a ton of lawyers. Never mind that even with the integration of the entertainment industry (Disney does own TV outlets for example) that the moment a self dealing transaction takes place the other side would bring the company into court. And never mind that even with the integration of some companies, the variety of outlets is increasing not decreasing. (Think of Apple's iTunes as a distributor, for just one example.) What Kuehl's bill comes down to is a do over, the writers and other creative personnel, think they can squeeze a bit more out of their residual payments by creating yet another definition (in this case "fair market value") to litigate.

In both cases, the authors could not demonstrate reliably that the existing system of contracts was not assuring a reasonable exchange between willing buyer and seller. And in both, the committee, even the sympathetic members, had a hard time discerning the meaning of the language in the bills. Yet, both bills were passed out of the committee. The California legislature adopts thousands of bills in a year, yesterday one committee chose to spend several hours trying to change a basic principle of contract law, without a serious demonstration that either issue needed more fixing.

Tuesday, April 08, 2008

Sacramento Makes the Top 10

Popular Mechanics released the 10 pieces of infrastructure we must fix now. The usual list included some things that everyone would put at the top. There are three on the west coast - a viaduct in Seattle, a bridge in Idaho and the levees in Sacramento. It is wonderful to make the top 10!

Monday, April 07, 2008

Can we take the guy who gave us "monkey boy" seriously?

Steve Ballmer told the folks at Yahoo they have three weeks to take his offer or else. One wonders what he was thinking. But then that is a frequent question.

Think of other Ballmer quotes:

1) Monkey Boy - He came to a Microsoft meeting and acted like he has had a bit too much coffee that morning. (Or that he might just be a moron.) This is a classic on the web. Were it only one instance one might think it was an unreasonable portrayal. But it is not.

2) Zune sales figures. Ballmer thought the company would have a hit with Zune. About a year ago the Zune was projected to hit 1 million units in sales. It seems to be lagging a bit.

3) iPhone sales - Ballmer argued a couple of months before the iPhone went on sale - ""There's no chance that the iPhone is going to get any significant market share. No chance."

Ultimately, the Yahoo people have said they will not reject an offer out of hand but it has to be at the right price. Perhaps they might offer to take over Microsoft. No they have some pretty good and innovative projects and their development cycle is about one tenth the time it took to develop Vista.

Charlie, your five minutes are up!

More than a year ago, Secretary of Education Margaret Spellings created a National Commission to study higher education. In politics most commissions are like Roman circuses - offered up when the political class wants to make some hay but has no idea how to solve the issues that people are concerned about. I served on one such commission in 1997 - we worked for 90 days (the limit of the congressional mandate) and came up with a complex but pretty credible report which did not say what the politicians wanted us to say.

The chair, a friend of the Secretary, ran the group like he was a king and the rest of the members were vassals. And he came to the job with some pre-established notions, based on his service with the Texas Board of Regents. His career in Texas also included a stint at developing an "accountability" model for K-12 which, according to his bio, became the basis for the federal statute No Child Left Behind. (Based on the results of NCLB, I am not sure I would claim that as a win - but that is another story) The success of the Texas model are arguably mixed. No Child Left Behind has been (rightly) criticized as a) federalizing education (not a constitutional function) and b) setting a series of standards which may not measure anything but the test results. One research study from Texas argued that "NO statistical study, or any other type of study purporting “adequacy,” should be interpreted as a final answer to the question of how much or in what way taxpayer money should be spent on public education." (In essence, reinforcing the notion that Hayek offered six decades ago that merely counting something may not tell you what you want to know.)

Miller's notion was that a) higher education is not performing to the level it should (graduation rates are lower than they should be, costs are not well understood or controlled, the relationship between what goes on in higher education and the world of work may be a bit attenuated) and b) therefore the best way to solve the problem is to federalize higher education. While many critics have written a lot about what Mr. Miller discovered, few would argue that the second conclusion has any relationship to the first. Indeed, if the performance of the federal intervention into K-12 is any indicator, the opposite conclusion should be considered.

So this week Miller shot his mouth off again by criticizing the College Board about their claim that a college education is worth $1 million over a lifetime. Admittedly the $1 million number is soft research. Inarguably the value of a college education over a high school diploma has paid handsomely in the last generation. (There are reasons why that may not be as true in the future - although surprisingly Miller's letter does not address those issues.) In his letter Miller comments "While the statistical analysis in this report is done by first-rate academicians and the sources of data are sound, there are serious questions about the assumptions used. " He then goes on to suggest that the present value of a college education is $280,000 rather than $1 million over a lifetime. He bases his conclusions on the two additional years that many students take to go to college (six years instead of four). He then goes on to question some other theories including the issue of whether the cost of the high number of dropouts from higher education actually provides a nominal discount to the lifetime earnings concept.

I am pretty sure (based on who the letter copies) that Mr. Miller did not write the letter. I am also not a big fan of economic impact studies. Individual cases tend to change individual results. For example, a student who attends prestigious private or public institution can be expected to have a higher lifetime earnings stream than one who attends a non-prestigious university. It could also be assumed that a student who attends the first is more likely to graduate in four years than the student who attends the second. Any fair analysis would address the net present value created by encouraging more students to go to their limits - with a percentage of people failing. Those are real interesting questions about the range of opportunity we offer but also could raise some issues of the relationship of costs to benefits to society. If Mr. Miller were serious about this question, rather than trying to make his political point, he might think a bit more carefully about how all of the factors fit together. But at least for him, those kinds of nuances are unimportant, making the political point is more important than trying to think about the issues.

Thankfully, Mr. Miller will soon fade into the veil of obscurity. The issues about costs and values should be something that those of us interested in higher education should continue to try to address. But Mr. Miller's absurd bottom line, to federalize education, is an idea that like its author, should quickly fade away.

Saturday, April 05, 2008

Shine a light

Martin Scorsese's new film is interesting. I am not a big fan of the Stones, although my wife is. So we went tonight to see it.
The movie is a performance video from a concert done to benefit the Clinton Foundation at the Beacon Theater in 2006. The movie (in 70 MM) is entertaining. You get a good feeling of the energy of a live Stones concert. If you have never seen the Stones live - this is a way to do it vicariously. Jagger is truly amazing. He works very hard for the time he is on stage. Richards comments in one interview that when they get on stage they become different people. You also get a better idea about the two quieter members of the band (Watts and Wood). Scorsese interplays some old interviews of the Stones with the concert and used a lot of cameras to capture the action. The concert includes some additional musicians including Buddy Guy. When I last saw the Stones in concert (at the Concert for New York after 9/11 - Guy was with them and Guy and Keith Richards did a wonderful duet where they played off each other on some amazing rifts.

There is one truly odd moment in the picture. Clinton, in the footage before the concert describes the Stones in the following manner - "They understand the issue of global warming better than the scientists." The mind boggles at the absurdity of the comment whether you agree with global warming or not. But then Slick Willie's ad libs have not been on point much this year.

Friday, April 04, 2008

The Clinton Tax Returns

I said in an earlier post that I mostly avoided the disclosures of politician's tax returns but since I did Obama's returns when he released them, I thought it would be interesting to look at the other two candidates for president when they released theirs. Today the Clintons released their returns.

There are a couple of differences with the Obama family. First and foremost the Clintons made a combined income that was much larger than the Obamas. Second, partially as a result of the amount of income both Clintons have generated (Bill's book sold much more than Hillary's) they have established a family foundation and a substantial portion of their charitable donations have gone into that. That is a fine tax planning device, which among other things reduces estate taxes (one wonders how candidate Clinton who has been opposed to the Bush tax cuts, which include elimination of the estate tax would reconcile with citizen Clinton who established this family foundation). In 2006, the Clinton Foundation had Total Assets of $4,383,401 and Total Giving of $1,274,900.

Ultimately the tax system should be a way for the government to collect the money it needs to operate. But Clinton, and I suspect Obama, see it as a tool of social policy. In the case of her use of a family foundation it is probably done for two reasons, tax planning and as a way to shield, at least a bit, where their donations go. Both are legitimate within the existing tax law. But for someone who has advocated increasing the capital gains rate (like her democrat opponent) and ending the "Bush tax cuts" one might expect a higher standard of behavior.

In order to discover how the Clinton's funded charitable institutions you need to go to their tax return (990) for the Foundation. I would make two comments about their charitable activities. First, the Clintons have been generous to their alma maters (Georgetown, Wellesley and Yale) and to other institutions of higher education including Bennett College in North Carolina (The current president is Dr. Julianne Malveaux but one former one worked with Mrs. Clinton in the Children's Defense Fund) and Dakota Wesleyan (to help fund the McGovern library) and the University of Arkansas Foundation. There are also donations to Baptist churches and even one to a United Church of Christ parish. The Clintons have also been generous with things like the Peres Center (in honor of Shimon Peres) and a center in honor of Bishop Tutu. Also, the Clintons put funding behind Bill's (with GHW Bush's) exhortations to encourage giving for the victims of Hurricane Katrina and the Tsunami Relief project.

Second, there are some gifts that I might raise questions about including significant ones to the Wellstone Action Fund. Which is a charity that looks a lot like a political action committee. The Fund describes itself in these terms - the Fund "supports the strictly educational and charitable work of Wellstone Action, including all activities of the Sheila Wellstone Institute, Voter Engagement Schools, Campus Camp Wellstone, and activities that provide education and information about the life and work of Paul and Sheila Wellstone, including the archiving of speeches and writings." Undoubtedly all of those activities are legitimate charitable activities albeit with a strong political purpose.

One should not be surprised that the returns of the candidates are done with some care. It is pretty clear that the Clintons, like the Obamas (and undoubtedly when the McCains release their return on April 15), prepared their return with the expectation that others would review their calculations with a fine tooth comb.

I was also struck by some of the macro numbers for the release. The average federal tax burden over the period amounts to 31.28% but it ranges from a low of 13.95% to a high of 38.17%. On $108 million in income they paid just under $34 million in federal taxes. Last year's 25% rate is certainly lower than the level advocated by Mrs. Clinton as appropriate for a wealthy family. That does not imply anything but the certain knowledge that tax policy is a lot more complex than most political candidates would make it.

Checking back on Kukiaio (in Xalapa, Veracruz)

As Kukiaio(in Xalapa, Veracruz, Mexico) was being thought out I had the opportunity to hear how its owner was thinking about how his project would be different. The owner has some very specific ideas about how a restaurant should function. When I visited the restaurant soon after it opened I was excited about the menu and concerned about the size of the place. But you go to a restaurant for the food and the service - so a small place can be quite good. And as we found (and the New York Times also found) the food was very good and an interesting mix of flavors.

Kukiaio has moved to a new location down the street. From my view, I think the size is about doubled. The new location is much more spacious but with the same attention to detail and ambience that was in the original place. The first floor is now a lounge with a quaint bar that highlights the owner's grandmother - who was a grand lady. The second floor becomes a larger dining space (although you can also eat on the first floor). What is most interesting in the new location is the third level which is a covered terrace. On Wednesday I had a wonderful lunch on that level - it was a bit breezy and very comfortable.

What is different about the new Kukiaio is the space - it has a much more roomy feel to it. What is not different is the innovative cuisine. Were Kukiaio in any other city in the world you would seek it out. On that premise, when you are in the region near Xalapa you should seek it out. You will not be disappointed.

Modern Wonders

We have some friends who are in Luxembourg for a couple of years. She is working for a company there and her husband, now retired, is doing what he does.

This morning the trade's paper on higher education had an interesting story on the college she attended in Washington, DC. At the same time I wanted to notify him (he comes back to the states more often than she) that the Rivercats' season begins on April 11 and he could get the entire schedule by going to their website. All of that is very normal in today's world. But it still is very exciting to me.

Thursday, April 03, 2008

The Real Cost of Elections and the Scourge

For the last couple of days I have been giving conferences in a university in Mexico. The Rector is a long time friend (I refuse to use the word old). Last night I spent about two hours with some community people and students and members of the state's electoral commission discussing the American electoral system and analyzing what might happen if....

I surprised myself in one instance - one member of the electoral commission asked why American elections are cheaper to run than Mexican elections. I am not sure that number is correct. But my immediate response was the "real cost of elections comes after them not before." I thought that was a pretty quick retort but it also reflects a deep seated belief.

Later a question was raised by a respected judge in the area. He asked whether legalization of drugs would lessen the negative societal effects and whether any American politician had recognized that. The drug issue is not one that I have given much thought to but his comment raised a question in my mind. If the costs of drug interventions are as high as they are (and between the social, criminal and enforcement costs they are very high (they are certainly in the billions of dollars) then what would we gain by legalizing? Of course, some in society would be stuck with addiction - but as I thought about it I am not sure the numbers from current policies would increase. I have heard the case for legalization but until the question last night had never thought about the consequences. In this case, as in many, less governmental action might be more effective.

In the end, that was a revelation. But I added that no American politician who has a chance of being elected is likely to go against the common wisdom. The revelation I had from the question is that our common wisdom is common but not wisdom.

Wednesday, April 02, 2008

Election Year Pandering #2

As if it were not enough to have a stimulus package of rebates to some taxpayers. According to the NYT the Congress is now rushing to pass a housing relief package which could include "up to $200 million to expand counseling programs for homeowners at risk of foreclosure, $10 billion in tax-exempt bonds for local housing authorities to refinance subprime loans, $4 billion in grants for local governments to buy foreclosed properties and a $15,000 tax credit for purchasers of foreclosed homes or newly built homes that have been sitting vacant."

The leader of the Senate, Harry Reid, captured the spirit of the moment “This is not April Fool’s,this is serious business.”

One wonders whether any of these bozos, be they democrat or republican, actually believes that any of those tired proposals will do anything to respond to the issues that might have been raised by the housing situation. As discussed earlier, this "crisis" came about in part because of shady dealings of some brokers, loosening of traditional mortgage standards by the Congress and by borrowers misrepresenting their income. Why should the taxpayer bail out the third group? How will conditions improve for the first two groups because of the spending in this bill? Will adding to the deficit improve the credit markets?

Movement and Progress are not the same.

Tuesday, April 01, 2008

Lawyers without enough to do

WIred reported that a Texas resident, one Chandra Sanders, is suing Apple because her iMac only displays 262,144 colors instead of "millions of colors" which the Apple control panels claim. The suit was filed in the US Northen District of California. The Apple monitors, according to Ms. Sanders claim " use technological tricks that involve showing many similar shades at high speeds to create the illusion of the desired shade." Oh, horrors, Ms. Sanders. The plaintiff (To my knowledge she is not a plain TIFF - pun intended) says those things can cause "crippling" problems for people editing video content because the colors don't always appear smooth. News of this broke on March 31 or it would be a great April Fool's joke.

Apple does not normally comment on pending legislation but on this one they should respond like the court should respond and laugh this nonsense out of court.