More on Online Hell in WAMU land

On Tuesday night I discovered that WAMU had charged me for a periodic debit on my account as a result of their inability to transfer the charge to our new account. When we first began to encounter a problem more than two weeks ago, we were advised to close our two joint accounts and to set up a new account which could then be secure but which would for a transitional period accept debits and credits from the two prior accounts. I was assured by a branch manager that this could happen. That did not happen.

I called the 800 number and spoke to a person named Brian (Team 400) who said, he would do all of the following: First, he said they would as a courtesy (even though this seems to be their fault) reverse the debit on our account which was generated because they were unable to discover that the periodic debit on the earlier account should have been transfered to our new joint account. (which has plenty of funds in it) I thanked him. Second, he said that after a periodic deposit that I was expecting on July 10 had been deposited that he would transfer the funds from the deposit and then close the legacy (or penny) account.

On Wednesday I tried to access my account (to make sure that what I had been promised would actually come true) and found it had again been locked. I asked my wife to call the 800 number to reset the password and she was told that after the reset that we would be able to log in. That was also false, a lie. Late this afternoon, I logged in using my user name and my temporary password.(Copied from the original email) The system would not accept it. I was again found the account was locked. The screen which said it was locked also says "You can unlock your profile online or you can call customer service for help at (800) 788-7000." That is not true. See how helpful the people at the 800 number are below.

I got back from an all day meeting and called the WAMU 800 line to see if I could get the account unlocked. I first spoke to a customer service agent named Melissa. I asked if we could either reset our password or if there was a way that I could verify whether the deposit had been received and properly transfered. She indicated the account had been locked. She was either unwilling or unable to verify that my instructions with Brian the night before had been carried out. I asked to speak with her supervisor, a person named Laurie, I made the same request and she indicated that the "risk operations" department was only open during "normal" business hours and that I could call them in the morning. I told her that I wanted to solve the problem now. I have already spent an inordinate amount of time trying to correct a set of problems that for the most part were created by an inane set of rules. She was unable and unwilling to help me and so I asked to speak to her supervisor. Laurie told me that the supervisor was "unavailable" and that if I wanted the person could call me back in 24-48 hours. She repeatedly advised me to call risk operations during normal business hours. As you may remember from the earlier post, I fell for that one two weeks ago and after 48 hours was called by a senior person in that division who said basically "I can't help you."

Interestingly on Thursday morning I went online and discovered that the 800 number screen on the website clearly states that one should call that number (not risk operations) to get an account unlocked. So what Laurie told me was incorrect, I spent more than 30 minutes on the phone with her last night. On Thursday I called and spoke to a person named Pat who was able to get the account unlocked (without going to risk operations) and then talked to her supervisor named Wendy who was able to get the erroneous charge reversed.

Ultimately any customer service business, and that is the business that WAMU should be in, has a responsibility to allow their telephone service people to be able to have some ability to solve problems. My job is not to try to figure out how to navigate their bureaucratic rules. (In the last three weeks I have probably spent more than two full work days trying to resolve the issues on my WAMU accounts.) Neither Melissa nor Laurie seemed to be willing to try to work through this problem which was (and should have been) frustrating. I was prepared to present any information about the accounts (including all of the security passwords, social security numbers, account numbers and other linked information) but this supervisor (without any seeming authority) continued to ask me to either call risk operations in the morning or to have her supervisor call me back in the next few days. Based on my previous experience, I was skeptical.

I am not sure whether I have had a unique experience with WAMU or not. I suspect I am not alone. I work with a number of financial institutions including brokerage houses and other banks and at this point have not found any organization that has less attention to trying to solve consumer problems than WAMU. They set a series of rules and seem unable or unwilling to try to work with the customer. In each of the other accounts, I have been able to find someone in the organization who is able to solve my issue (none have been as prolonged as this one). I realize I can be a demanding customer but I also realize that when the system works reasonably well that compared to other customers (who do not use online deposits, who rarely interact with branches and who do not need statements or checks) that if the system can be made to work reasonably efficiently that I represent a cost savings to the company (no mailing costs, no check processing costs, etc.) But WAMU seems unable or unwilling to understand the economics of our relationship. If you want to use online banking at WAMU, based on my experience from the last few weeks, I would recommend against it.

One of the realities of online services is the necessity to provide service in a reasonable manner - often 24/7 - evidently someone on the WAMU management team does not understand that basic principle. But without it, the service part of online banking is worthless. In this case "FREE CHECKING" based on my experiences over the last several weeks, is not free.

Sultry but Superb

The Cats came to play tonight. They ended up after a couple of terrific hits (including Danny Putnam's Grand Slam) and catches with 14 hits and 11 runs. That was part of a 7 inning fourth. Dan Meyer had a two hit game and eight strikeouts. He had to be taken out because of 109 pitches. But it was a superb game. This is a photo of Dan from last season's team lunch. The only difference is that he is a year older and tonight was about a zillion degrees. But he and the team had a great game against the Sky Sox.

One final comment on Gulliver

The concluding chapter in Gulliver's Travels is an interesting one. He recounts how he left the land of the Houyhnhnms and then recounts he he got home through the kindness of strangers. Gulliver makes two points in this chapter which are interesting. First he comments that he would prefer to live in the land of the Houyhnhnms but because of the politics there and his comparison to the Yahoos (which the Houyhnhnms see as inferior beings) he is forced to leave. He spends a lot of time explaining why he would have preferred not to re-associate with humans which he now sees as Yahoos. The captain who rescues him is incredibly charitable to him but in the end when he returns to England he lives his life as a recluse separated from his wife and family and willing to spend hours in a day talking to horses, who he believes to be related to the Houyhnhnms.

Second he makes some biting comments about how other travel books have a tendency to exaggerate and how he told nothing but the truth. Obviously he was making a point here. The commentaries on the book suggest that he wrote the book as an Anti-Whig commentary but also as a spoof at the genre of writing. The political part of the manuscript is partially lost because some of his characterizations are lost on people who are not completely up on the politics of the time. Regardless of its intent - the book was an instant classic, and as I said in the first post according to some sources it has never been out of print since the first edition in 1726.

Merit Goods Usually Do Not Have, Nor Produce Any

Representative Louise Slaughter seems to have renewed a cause which I find odd - she wants to reintroduce the "fairness" doctrine. When the broadcast spectrum was limited to a couple of stations the argument was made that the government had the obligation to regulate content to assure it was balanced. The argument was that if this limited resource was not regulated that one side of opinion would predominate and somehow stifle the public discourse. This nonsense did not apply to print media - because the bar to entry into the realm was pretty low - there were lots of options and if you choose a paper with narrow views, so be it.

In economics the arguments for things like the fairness doctrine are called Merit Goods. Public Goods are those things which are produced for all of us and which cannot exclude consumers - our defense system is a good example. If you live in the US, whether you want to be or not, you are protected by our level of military preparedness. But then some economists like Paul Samuelson argued that there are also a group of social activities where we don't do enough of something so all of us should participate. Sounds a lot like your mother's explanation for castor oil. The fairness doctrine is a Merit Good. If the government does not regulate content in the broadcast spectrum there will not be balance.

The trouble with Representative Slaughter's commentary about balance is technology. When we had three channels of TV or only a few radio channels it could possibly have made sense. But now we have hundreds of TV channels and with satellite radio and the internet possibly thousands of radio channels. The wealth of options is mind-boggling. Ms. Slaughter, if you don't like Rush Limbaugh, turn to another channel. I don't watch CNN because I dislike its bias (but then I don't watch Fox either, same reason). As the title suggests there are two problems with Merit Goods. Most of the ideas under this category have little merit and ultimately don't produce any good.

Surviving Online Banking Hell - Two weeks with WAMU

About two weeks ago I began to have a problem with my bank of many years. I am, as you would not be surprised to find out, an electronic kind of guy. I have not written a check for more than seven years. I also travel a lot, so being able to access my bills and pay them from anywhere is important to me.

It began with a deposit of a cashier’s check from a joint investment account to a bank account, which happened to be with WAMU. Both accounts have the same name on them but the check was pretty large. The bank put a 10 day hold on the check. I wrote them and asked why that was necessary. But in the next day two more things happened. First, they disallowed the signature on the check – I had endorsed it but my wife had not. Most banks, because it was a known customer with a check going from a joint account to a joint account would have honored the endorsement or sought a clarification. But WAMU simply disallowed the check.

Second, they claimed that my account had been invaded or phished. There was only one incident but when I discovered it I spoke with their “consumer” service (more on how inapt that title is later) and was informed that the only way we could unlock the account was to a) create a new account and close that one or b) have me ask to unlock the account and then take full responsibility for ANY future invasion of the account. Obviously, I was unwilling to do the latter, especially when I re-read their online banking guarantee.

WAMU is pretty explicit about their online banking guarantee – the first sentence in the website explanation (displayed prominently) says “For any fraudulent or unauthorized transaction that has been initiated during an online banking session at wamu.com, WAMU will provide 100% reimbursement of the transaction amount plus any related account charges imposed by WAMU or lost account interest resulting from such transaction.” The guarantee also requires customers to take some responsibility. You have to create a password which would be “hard for others to detect.” (Although their level of security is alphanumeric and does not include the possibilities for control characters AND has no periodic suggestions to change your password, as many other financial institutions do. Thus, the level of security for the password is not very stringent and they don't take the notion of changing passwords to stop intrusions seriously. Both of those things tell me WAMU is not serious enough about that “hard for others to detect” standard. You also have to report suspected fraudulent transactions “within 60 days.” The “guarantee” then says that WAMU will provide a full reimbursement for the amount of any fraudulent or unauthorized transaction which occurs on your account during an online banking session at wamu.com. That means $0 liability for fraudulent or unauthorized activity on your account.” That sure does not seem to be what they said to me.

I soon discovered that WAMU had locked down all of our accounts including ones which do not use online bill pay. That meant that not only could I not get into the specific account which had been allegedly compromised but I could not use my ATM card nor my wife’s account (because her and my accounts are linked) was also locked down. I went to a nearby branch bank and asked how we could fix the problem. The young manager advised me to keep the account (s) locked and start a new account. I specifically asked if all of my payees would transfer over to the new account and I was assured that would be done. I soon discovered that was false.

One of the other key assertions made by that manager was that, after I had called my wife, all of the uncleared checks on her account would be honored. At the end of this week we discovered that even that was false. They returned a check to our market. Since then several others of the listed checks have been returned. That has required my wife to go into the branch and got that corrected and the bank did that but the inconvenience was still annoying.

When I discovered the online banking profile was locked and seemingly immovable I called the online banking help desk and was told two different things. First, I was told that nothing could be done to get my “profile” and at the same time I was told that it could be gotten to me by speaking with the fraud department. (Which I did.) For a couple of days, nothing happened.

On about the third day of this travesty, I wrote a friend of my daughter’s who works for another division of WAMU, explained my situation and asked if she knew who the right person to call was. She graciously offered to help with the “excellence” team. I was then contacted a day or so later by a team member from that group who left a number for me to call and despite four or five calls and voicemails I was never able to get the problem solver to call me back. So much for excellence.

I tried again to use their electronic comment section. But the responses I got from those people show they are very poorly trained. For example, I asked in an email on June 22 “Could you please restore my payee list or give me a printout of the billers?” The response I got said in part “Thank you for your email. I apologize for any inconvenience that caused to you. Please be advised, you may not change the account number.” The email went on to say that I could change the account which I designated as my primary account for bill paying. I did that, but still could not retrieve my payees. The quality of the online help was either inaccurate or off the mark.

Three days later I went into another branch and spoke to another manager, who like my daughter’s friend, was very gracious. She looked at the account and said “let me escalate this” and immediately called somebody in the technical part of the online banking group and I then spoke to a guy who said he would resolve my problem with two business days. On the third day he called me near the close of the day to inform me that it was not possible to get my list of payees. That wasted another two days and I am reasonably sure he did little to look into whether it was possible to generate a printout of the billers. WAMU truncates the information about the payees (presumably as a security measure (although other banks I deal with do not do this). So even if I went through the transaction history (which did) I could not restore the information on my payees. The locked account allows me to see transactions, I just cannot get into my payee list or transfer it.

I have a several comments. First, although they were not able help solve the problems, I am appreciative of the efforts by the second manager and my daughter’s friend to try to help. They did their best but the WAMU organization was not up to trying to serve their customers. It is too bad that WAMU does not have more people like that. Second, it seems to me that an entrepreneur could produce something very useful for those of us who use electronic banking to keep all of our payees in a secure environment so that in the event we move from one bank to another or in the event that an account gets compromised we are not forced to re-enter all the account information. Third, from my dozen or more calls to the 1-800 number, I would conclude that the staff for that operation runs between incompetent and surly. WAMU’s service training lacks both the appropriate level of consumer attention and a decent understanding of their products. That has not been my wife’s experience with the telephone bankers but it certainly was reinforced by my attempts to work with the online banking people. Fourth, if WAMU were really concerned about security they would increase the complexity of their passwords. Most of the other financial institutions that I work with take two precautions. They remind users to periodically change their passwords and they offer a security indicator which shows how secure the potential password will be. To my knowledge security is enhanced by increasing the number and type of characters (alpha is less secure than alpha-numeric and alpha-numeric with control characters(#$%&) is even more secure. Fifth, in the end I took the large check back and had it wired to them. That resulted in a $10 charge. The bank seems inclined to ignore that as an electronic client once my systems are set up they send me no statements, they process no checks - all transactions on this account are in 1s and 0s. That saves them a boatload of dough. Ditto for the wire transfer. Until this transaction, compared to their average customer, the costs I generated from my use of their services were minimal. I took care of establishing and verifying the payee list. I hooked in on a periodic basis to do bills - most of which are sent electronically and none of which are processed back to me. But this bank seems to have treated me as a nuisance.

Ultimately, I realize I am a demanding customer. But there is a tradeoff. When an electronic account works well and can actually solve problems, I have reduced the net cost of servicing me as a customer. Since it has been available, I have not had a statement sent to me (Postage Savings), all of my transactions including most deposits and all withdrawals have been electronic (reducing staff time and demands on branch personnel).

Changing banks is annoying, but I was left with no other choice. In the next few day I will close my account with WAMU (after all the remaining EFTs have cleared.) We are still considered whether to completely sever our relationship with WAMU. My wife likes the convenience of the branch (she is completely non-electronic and writes a number of small checks). She also frequently uses the telephone banker. Both of those choices generate costs for WAMU that are undoubtedly greater than for an account that uses electronic deposit and electronic transactions and ATMs. WAMU talks about its commitment to to service - indeed one of the mottos is "Making you happy makes us happy." I guess that is not true either.

Find Him Under the Definition of Opportunist

In 2004 John Kerry pursued John McCain as his Vice Presidential selection. Yesterday Kerry described McCain's judgment as "dangerous." Kerry was quick to add that McCain has changed. Kerry has not. With the exception of his quest to find a VP who could shore up his failing candidacy, Kerry's judgment has always been flawed and even a bit dangerous.

Was Gulliver an Innocent Abroad?

One of my projects this summer has been to read Gulliver's Travels. It is one of those pieces of English literature that is quoted frequently and referred to more often. I had not read it but have seen the references to it for most of my life. I have also seen the couple of movies based on it (none of them capture the book).

The book was originally published in 1726 and tells the story of one Lemuel Gulliver who is a ship's surgeon (but also a captain) who goes to a bunch of places, unknown in the modern world of the time. Swift starts the story by going to the land of very small people (Lilliput) and very large ones (Brobdingnag). One commentary suggests that the book has not been out of print since it was originally published and has been published in many languages. That suggests the depth of his satire.

In each land he visits Gulliver acquires the language and then makes some generalized comments about the human condition from a lens of the characteristics of the people he is visiting. LIke the first two parts each of his travels the succeeding stories are mirrors of the preceding (small, large, stupid, smart) archetype. In his visit with the Houyhnhnms he lays out some stunning commentary on the role of lawyers and of precedent (perhaps Dickens in Bleak House extended the joke a bit by telling the story of a lawsuit that continues until the entire legacy is spent on lawyer's fees). He is also skeptical of the role of reason. The Houyhnhnms are bound by reason and Gulliver has a tough time in explaining lying and deceit to them.

Swift was born in 1667, in Dublin, and was a prolific writer. He received degrees from Trinity College and Oxford. His doctor of divinity was received from TCD in 1702. During the early part of his adult life he was a priest in the Church of Ireland but he found his real forte in being something akin to a talking head of his day - close to power and sometimes a part of it. He became a publicist for the Tories and was involved in a number of key roles including trying to bind factions of the Tories together. He moved back to Ireland when the Tories were thrown out. He took up the Irish cause when he returned to Dublin.

In each of his visits, Gulliver becomes a courtier and thus can make comments about the form of human organization. He finds no organizational structure perfect. Thus, he makes a larger point about the inability of man to find a perfect system.

As I was reading the book I was struck with the similarities of Twain and Swift. Both are master story tellers who use satire to explain the human condition. In Innocents Abroad, Twain used a real trip through Europe and the Holy Land in 1869 to explain many of the same kinds of things that Swift used in his imaginary journey. There are a couple of direct structural features in each that are similar. Both books use transitions (I won't recount this part of the trip) to skip over humdrum parts of the voyage. Both make very large points about the human condition from seemingly small issues. But Swift seems a lot more attached to power. All of his stories come from being attached to a particular court in each of the lands he visits. That may be attributed to the differences between 18th Century England and 19th Century US or it may be related to the differences in the two writers. From what I have read both seemed to enjoy their celebrityhood.

In his visit to the Houyhnhnms he encounters a human like species called the Yahoos - whose behavior is in almost every way despicable. Before I read the book I had not understood the derivation of the word. His hosts in that country are intelligent horses and the Yahoos are a lesser kind.

I am sure that some of the allusions in the book are lost on me. I am not that well read in that period of history. But his commentary on the foibles of human behavior come shining through - almost 400 years since they were set to paper.

The Link between the World's Best Phone(iPhone) and the World's Best Beer (Guinness)

In a little less than a week (July 11) the new version of the iPhone will be introduced. The tagline for the new product is "twice as fast, half the price." I've had my original iphone since it came out and have been a very satisfied customer. So I will be one of the first customers because the changes are significant. The network goes from EDGE to 3G (for the non-technos that means moving from about 125K character downloads to something approaching slow broadband) - although the 3G network looks to be mostly in urban areas in the US (and much better deployed outside the US). But the new phone also has a bit more capacity and GPS (although the current map system which uses triangulation off cell towers is pretty slick) and some improvements in searchability. The new feature that I am most interested in is called MobileMe which is an exchange server for the phone and all your other devices (Laptop, Desktop). As I said in an earlier post being able to keep all your contacts and emails and calendars in alignment is an important function. The new phone will also allow third party applications - and some of those look pretty good. So all in all this looks like a good upgrade - well worth the price (which as they say has been reduced).

But the press has begun to cover the start of a line at the Manhattan Apple store. The first five in line are there for other purposes - not just buying a new tech device. They call themselves the WhoFarm. Their leader admits “We’re here to restore the edible landscape. We want to bring seeds of change back to the White House.” It seems the group's objectives include asking the 44th president to plant an organic farm on the White House grounds. They freely admit that their real goal is to break the Guinness record for standing in line to buy something.

Apple is very good at building hype for their new products. And as I said, I will be one of the first to buy the new phone. In honor of these fools who want to have their name in a book, I will also probably host a toast to my new phone with a Guinness.

Followup on the Colombian Rescue

Robert Menard, who is the founder and general secretary of Reporters Without Borders said “I have to recognize that the strong hand has prevailed. Our insistence on the need to negotiate with the FARC, hoping they would release their most valuable card, was foolish.” Menard had previously argued that there should be negotiations with the FARC forces.

In the past Menard has said some pretty outrageous things including at least a partial nod to the correctness of torture. But the results from Wednesday's raid seem to have gotten him to come to his senses. Perhaps his revelation could induce others to think a bit more clearly.

Jesse Helms

Jesse Helms died today in North Carolina. He was a lightening rod for the left as a member of the US Senate. But what is also important is he was an embarrassment for the right.

One of my favorite things for my aunts (both of whom lived in North Carolina) was to send them cards for various holidays which said "Happy Easter, from (then naming all the members of my family) and Jesse Helms. Helms was one of those evanescent characters in the political scene generating a lot of heat and not much light during his terms in the Congress. Although he served as a marvelous fund raiser for the democrats (he was a great target) I suspect his contributions to American political life will soon be forgotten.

On this Independence Day it is good to remember someone like him - a good part of our history should be the ability of public figures to have the ability to look like jackasses. Helms used that right to its fullest. But then so did (do) many of his detractors.

Thinking about other meanings of Independence Day

On Wednesday the government of Colombian President Alvaro Uribe staged a dramatic raid on a FARC camp and rescued 14 hostages including Ingrid Betancourt (the former presidential candidate that was kidnapped by the FARC several years ago) and three Americans. They tricked the FARC people into believing that the helicopters were another leftist group (perhaps members of the US Congress) and they were simply moving the hostages to another safe location. FARC is a Marxist group that has caused disruptions in Colombia for a long time. Some of the morons in Congress call FARC a legitimate group and have supported them. Hugo Chavez, the Venezuelan dictator, was a big supporter of FARC. And at least indirectly, Nancy Pelosi, by her intransigence in getting a vote on the Columbian free trade pact, has also supported these thugs. Uribe's father was murdered by the FARC.

One would hope that the Congress would come to its senses on FARC and on the Columbian Free Trade Pact. But that is not likely. Senate Majority Leader Harry Reid called the pact "a continuation of failed policies" that "have already cost countless American workers their jobs and have done profound harm to U.S. foreign policy." Reid and his kind have argued that Uribe's administration has been hostile to "human and worker rights" - what a crock. The reality is that the Colombian pact would only open their markets to our products - Colombian goods can already enter the US duty free as a result of the Andean trade pact. I guess Reid does not think that kidnapping and murdering people (FARC has done both) is a violation of human rights.

Understanding the Proximate Causes of Legislative Sclerosis

California continues to drift in its policy directions. We have a gaping budget hole and a number of issues where resolution at even the most basic levels is unattainable. Many observers look at this chaos and attribute it to term limits and indeed a case can be made that with more experience members might be able to work together a bit more productively. They at least would understand their own rules.

But the term limits explanation is ultimately a false one. A look at other bodies, where there are no term limits but are equally dysfunctional would suggest that there must be other causes. Congress is the obvious candidate with similar signs of inaction. I would first look to the way our representatives choose themselves - redistricting. The safety that most members of legislative bodies enjoy can cause them to look at the world in very personal terms. A second possible explanation might be the perquisites of office - it is easy to slow the process down when you are treated as a minor potentate. A third explanation might be staff. As Mancur Olson pointed out in his last book, democratic processes tend to slow down when more layers are added - the inter-negotiations among staff and interest groups make a good deal of the process seem like a legislative Kabuki.

There might be a saving grace in all this sludge - think what an efficient legislative body could do.

Two variations of truth

This morning I was in North Carolina and while I am not a big fan of NPR was listening to two programs while I was going to and from some family business. The first was the Diane Rehm program. Rehm is a long time Washingtonian who seems to reflect the city pretty well. This morning she interviewed a retired professor of religion from New York University. James Carse has written a new book (The Religious Case Against Belief) attempting to harangue about the parts of religion that he does not like. It was hard to listen to this guy. He began by saying he became a professor of religion because he did not want to join a family business. He said he did not grow up in a particularly religious household. There was little evidence that he has done much serious involvement with religion - although I am sure he has read lots of books. Carse made some absurd points. For example, he argued that the Nicene Creed, which is a fundamental affirmation of Christian belief, is really an attempt to stamp out false beliefs among Christians. I grew up with the creed and have seen it vary slightly in a lot of places, but the fundamental truths of Christian belief are summarized quite neatly in the creed.

Academics when they are trying to sound erudite often revert to Latin. And Carse made the point that religious expression can fall into two modes - Comunitas - which is a bottom up version of social organization and Civitas which the professor described as a top down imposition of order. The bottom up kind of religious expression is OK but the top down - which he described in mostly political terms is not. As one who spent part of his doctoral work on the formation of civic organization in both economics and political theory, it is not clear that the professor has spent much time understanding these two concepts. From the interview I found most of his definitions tautological. He was trying to prove a point that the interaction of religious or perhaps even ethical belief in the political system was somehow always oppressive. I wondered how he could be a professor of religion for so long without seeming to understand much about what motivates religious belief or practice. From my own experience he used fairly sloppily a definition of both forces and then tried to wrap them around his beliefs - which were probably formed before he began his book. Admittedly, he may have a much more thoughtful view of religious expression in his book, I have not read it. But from the interview, I doubt it.

In the afternoon I listened to another NPR program with a young Captain from the Marines named Seth Milton. He has seen four tours in Iraq, the last one working directly for General Petreaus. What struck me about Captain MIlton was his honesty and introspection. His questioner asked some telling questions about our presence in Iraq and unlike Professor Carse, he seemed to grapple with more than just stylized responses. One might expect that a person who had worked directly with the General would have a uniform and un-nuanced perspective. Yet, he gave something which is very rare in the discussions of Iraq, an interesting perspective which suggested both the positive and negative aspects of our policy. In this case he argued that the political solutions in Iraq are much more complex than the military. We've done pretty well with the latter but not the former. I was struck with how this young man, who is only a few years out of college, and who has committed the first five to six years of his career to a very unpopular war, could think carefully and intelligently about what we could do in that area of the world to positively affect people's lives. Again, I only caught a glimpse of his thinking (He has not written a book) but unlike professor Carse I found myself thinking I would love to spend some more time hearing his thoughts about the appropriate set of policies we should pursue in the Middle East. One of his key points was that as our presence in Iraq has worked itself in that it has by its nature become more bureaucratic and that ultimately reduces our effectiveness in counterinsurgency.

The contrasts between Carse and Milton were stunning.

A follow up on Ethical Dilemmas

One thing which was not clear in the post yesterday. Bud never, as most of the rest of the crowd in Watergate did, tried to step away from his personal responsibility for his mis-deeds. He did say that being in the Oval Office when young is an imposing situation but he did not say - "It is not my fault." That was one thing which my wife found refreshing - especially in light of the later disclosures by the likes of John Dean and others who tried to evade their responsibility for this sorry episode in our history.

Ethical Dilemmas

Soon after we returned to California we went to a party for Egil Krogh. Bud Krogh is a bit older than I am and worked in a more responsible position than I did in the Nixon White House. One of his tasks was to advance the Elvis visit to the White House but he also had a number of roles with the plumbers in Watergate. Bud had just gotten out of prison for his role in the scandal. My wife, who is considerably less political, was intrigued to meet Bud. She also was quite impressed. When someone asked about his involvement in Watergate, he said, when you are young and the President of the United States asks you to do something you may not think as carefully as you should about whether the thing is the right thing to do. Bud went on to get readmitted to the bar and have a good career in the law and in lecturing on ethical issues. He and his son actually wrote a book about the issues in 2007 called Integrity: Good People, Bad Choices, and Life Lessons from the White House.

I bring this up because a friend who is a rector of a public university in Mexico wrote me this morning to tell me cryptically that he was resigning his position. In the state he is in, they are going into elections in the next year and evidently a couple of the key aides to the Governor have asked him to do a couple of things which he thought to be unethical. My friend in Mexico is a bit older than Bud was when he was asked to work on the projects he was convicted for, and also he is a person of enormous faith. Thus, he was able to look power in the face and say, No.

C.S. Lewis has a great essay about the ethical dilemmas that each of us face. He said for the most part we don't get confronted with momentous ethical dilemmas rather they are things that simply do not pass the "scratch and sniff" test (my words not his) but the sum total of those small decisions eventually moves you into a very different position in life. My friend in Mexico, when confronted with one of those seemingly minor decisions, made the right choice. I admire him for that decision.

Smoke gets in your eyes

When I was in Denver on Monday, giving a speech, someone asked me about the smoke from the fires. I explained it was pretty bad. But when I flew back on Tuesday morning as we came over the crest of the Sierra, the smoke was so bad in the valley that it looked as it sometimes does in the winter when there is a fog bank against the mountains. There was this thick white cloud that extended from the coastal mountains to the Sierra. The picture does not convey the situation at all. (The Photo is from Wundeground.com)

As we descended into the stuff we could not see the ground until we were on second approach. The sun has been muted for the last several days - that has kept temperatures down but destroyed sinuses. I was at a Rivercats game last night and the lights were on before the game. By the end, because of the smoke I was very thirsty.

The Governor created some controversy yesterday by asking people not to buy fireworks. In several counties people can buy "safe and sane" fireworks to help celebrate the Fourth. Several people were quoted in the paper about how terrible this was for their charity. They said the fireworks sale was their major fund-raiser. And that is true. But I thought the Governor was right - with one exception. He could well have added don't buy fireworks this year but make a contribution to the charity that you would have bought from.

Grandstanding rather than policy making

An obscure (who deserves to remain so)congressman from Vermont would like to tax endowments of universities. His initial target has been "wealthy" endowments but his purpose is broader. He has, at various times, proposed to tax all endowments over $1 billion at another he proposed to withdraw the exempt status of donations which go to colleges which are not spending in a way that the congressman thinks is appropriate.

Ultimately someone should buy this guy a copy of DeTocqueville's Democracy in America. One of the key principles of that classic was DeTocqueville's recognition that all public institutions do not have to be governmental. Welch seems to have a very limited idea of how endowments function and a determined unwillingness to learn more. Part of this should lay at the doors of colleges and universities who have not been very adept at explaining how endowments function. But one would expect that a Member of Congress would have at least a basic understanding of the institutions in society which make our country unique.

What is the purpose of endowments and who should decide? Mr. Welch thinks he or the federal government can do a better job than the trustees whose responsibility it is to manage these resources for the future. Take a look at the Social Security trust fund to judge the correctness of his assumption. Welch should be reminded of the Dartmouth College case which happened in the early 19th century when some idiotic state legislators thought it would be a good idea to manage Dartmouth College. The courts then wisely rejected that power grab just as Congress should reject this current day incarnation of idiocy.

Get Smart doesn't need to....

The reviews have not been great for the new rendition of Get Smart - with Steve Carrell and Ann Hathaway. For example, Newsweek said the filmmakers were "clueless." The Seattle Times said that the film misses the things that made the original series with Don Adams and Barbara Feldon. Others have commented that Hathaway is too young for Carrell and there is no "chemistry." Ken Turan of the LA times said "you'd think being funny would be its main goal. But you would be wrong. Very, very wrong." Well they are the ones who have i wrong. The movie is well worth seeing.

If you want to see Don Adams, find the original series on video. But if you want to see a light, very funny movie based in some measure on the original series and one where the characters work quite well together - see Get Smart. Anytime a filmmaker does a reprise of a former series or movie there is a risk of becoming the original only lighter. Carrell clearly understands what Don Adams did as Agent 86 - but he does not try to copy or parody it. He brings his own style to the role. As to Hathaway, she is no Barbara Feldon - but the chemistry between the two is as good as the original. They play off each other quite well.

So what is not to like about the movie? IMHO, nothing. It is fun. It is light hearted. The plot has a good mix of witty dialogue, funny bits and even a great performance by Alan Arkin. It catches all of the inventiveness of the original series without trying to copy either another pair of actors nor another time.

Steve Ballmer's One Hand Clapping

According to CNET, fewer than 10% of the developers are working on applications for Vista. Contrast that with the recent WWDC in San Francisco (for iPhone and Mac applications) where the conference actually sold out, and you can understand the sound of one hand clapping.

Pithy Comments

There is a controversy in the tech world about a set of theories called the Sigularity. A self proclaimed (to be fair some others also believe him to be pretty smart) guy named Ray Kurzweil has argued that the linkage of biological and computer evolution is inevitable and ultimately when computing power gets fast enough (and he thinks that will come soon) it will be impossible to tell human from machine.

In last month's wired Kurzweil was profiled. In the letters section in this month the following letter just about expresses my sentiments about the theory.

My IQ is probably lower than Ray Kurzweil's (Staying Alive Issue 16.04). Maybe that's why I can't follow his reasoning on achieving immortality. He seems to be saying that once a computer can cycle quickly enough, it will stop being an adding machine and become a sentient being. Does Kurzweil also believe that once a knitting machine makes enough mittens, it will turn into his grandmother?

Peter K. Sampson
Portland Maine

My thanks to Mr. Sampson

A new definition for getting "homered"

In the second inning of tonight's game against the Grizzlies, after a Richie Robnett double, Cliff Pennington came into home. The Grizzlies' left fielder threw the long ball to the shortstop who pegged it to the catcher. Since there was a possible play at third the home plate umpire moved to third and the first base umpire moved to home to cover the action. The first base umpire moved beyond home plate, somewhat behind the play. As the play came down Pennington ran around the catcher and then deftly moved his hand on to the plate. He was clearly safe. The catcher who was busy trying to corral the ball coming from the infield missed the tag until well after Pennington had touched the base. Since we watch it from the first base line we were in the perfect position to see the play. Getting homered in this case was more like Bart's father (do'oh) than a call in our favor.

We got it back in the fifth with a homer from Brooks Conrad and then two innings later added a run. We won it 4-0 but the call in the second was among the worst calls I have ever seen in baseball. The Cats are now 13 over .500 but our last 10 have been 4-6. You expect these kinds of ups and downs during the season. So it was gratifying to see them come back.

Last night, although I missed the game because of a dinner in the Bay Area, I read that they blew a 6 run lead. They still look pretty good so far this season.

The Baggage Surcharges

There has been a certain about of resignation about the announcements by major airlines imposing a fee for every bag checked to one's destination. I am a very frequent flyer. On two airlines I have been the most frequent flyer type for almost two decades. A lot of what I do for a living relies on the ability to travel efficiently. So the decline in airline service is something that I am concerned about. The baggage changes, although I am not a bag checker, is but one more indignity.

In recent days there have been some renewed calls for re-regulation of the industry with some even calling for re-establishing the Civil Aeronautics Board, which was abolished during the Carter years. Interestingly, when you Google the issue, you find that these things come in cycles. (For example, there were a raft of stories about the need to re-regulate in 1999.) Part of that call comes from the natural propensity of some, including many in DC, to think about regulation as a positive force. But there is also a natural desire to make things a little less messy when things are uncertain. The clear research is that we have benefitted immensely from de-regulation, even with the uncertainties.

Part of the uncertainty is self inflicted by the industry. Airlines have been caught up by the magic of algorithms. Their pricing formulas are designed to maximize revenue but with the advent of a bit more transparency (though the internet) those algorithms may not be serving their intended use. Unfortunately many airlines would love to go back into the less competitive world. Adam Smith was right.

I suspect that if one airline were to be a bit more transparent on their pricing (which said, we will charge you based on the following formula - per mile with some discount for heavily traveled routes) that a lot of people would flock to their door. The current system produces schedules like one I am flying next week where I am trying to get from DC to North Carolina but being routed through Chicago.

The Chicken Dance at Raley Field

Today's game was one of the last of the season that will be on a weekend and during the day. There are still some "business person's" games at 11:35 but the Sunday at 1:05 become brutal in June - today was no exception. It was over 90° and a bit humid. Our seats are directly in the sun.

What made the game even worse was the lack of energy in the Cats. Tacoma went out early and we simply looked sloppy - our hitting was lackluster and so was our fielding. Tacoma is playing barely .500 ball but you could not tell it from the last three games. Let's hope they close out this series with a rouser tomorrow. In today's game there were 5 homers (two for us - both singles) but theirs brought in three in the first. The rest of the game went like that. At least tomorrow it will be baseball bingo.

In the bottom of the sixth they had the Chicken Dance break - which I think is rather silly. We did our own variation of the dance by chickening out on the heat.

The Irish Referendum

The Irish rejected the proposed Treaty of Lisbon drafted by Eurocrats and their vote is causing a lot of kerfluffles. For example the German interior minister commented "Of course we have to take the Irish referendum seriously," Wolfgang Schäuble said in an interview with the German newspaper, Welt am Sonntag. "But a few million Irish cannot decide on behalf of 495 million Europeans." The plain truth is that they cannot but virtually every time the politicians have allowed this complex, confusing document to be reviewed by the people who will live under it, it has been rejected. Some have suggested that they create a two tiered European community - those that have accepted the document and those that have not.

You will remember that Constitution that was so soundly rejected - thousands of pages and tons of detail. No one probably read that nonsense. When the Constitution acquired the stench of day old garbage the eurocrats developed the treaty which is a mere 260 pages. The eurocrats evidently thought since this is a treaty and not a constitution we do not need to engage the people. But the Irish, in their original adoption, required these types of things to be submitted to the voters. That was wise.

Ultimately, what the Irish vote suggests is that the inevitability of a Eurocratic system which tries to unite by dictate will not work and those nations with a strongly developed sense of democratic debate and discussion (and also those not cowered by the eurocrats) will be resistant to these types of orderings. One voter summed up the sentiments of those voting no "We're told we can vote no, that the system requires unanimity. But when (a `no' vote) actually happens, every time, the EU tells us: You really only have a right to vote yes," said Dublin travel agent Paul Brady, who voted against the treaty. "You know, I love traveling through Europe, but I don't really want to live there all the time. I'd like to stay as close to America as Europe."

The treaty divides responsibilities into three areas - those where the EU has exclusive competence, those with shared and those areas of mutual support. From my reading of the third area, the mutual support offers a great deal of additional possible powers to the central EU when the officials in Brussels think they want to do more or where they think the individual states have not done enough. Those are awfully slippery slopes which the Irish chose to reject. Hooray!

The California Budget Deficit

The Constitutional deadline for passing a budget by the legislature comes on Sunday, and the legislature is unlikely to complete its task. But two articles in this morning's Bee struck me. On the front page was an article about hiring in the state government.

In January of 2007 there were 194,982 state employees. In a time of multiple year deficits one would think that the number of employees would decrease. But a year later there were 202,113. Even more surprisingly, in May (after the revised budget estimates by the Administration which projected an even larger deficit - we now have 206,130 employees. Can you think of any other enterprise where they face a short fall in double digits where the number of employees would increase almost 6%? Neither can I.

Then comes the head of the California Federation of Teachers, one Marty Hittleman. Presumably Mr. Hittleman, as a teacher and a person who engages in public policy debate would bother to check his facts when writing a plea for more taxes. Well the presumption is wrong. In his plea for even more taxes, Hittleman comments (rather gratuitously) "Many are angry that a larger proportion of the federal budget is spent on the military than anything else." The two attached charts explain how wrong Mr. Hittleman is. The first shows that Social Security takes a substantial portion of the budget. The second shows that our military spending is about the level it has always been in terms of GDP share. One wonders why Mr. Hittleman would even bring up military spending in a rant about state taxes but that is another story.

The state's budget deficit is real and large. But that does not mean our policy makers are taking it seriously.

The Washington Post as a §527 Committee

In an A4 article in the Post, McCain Camp Distorts Obama's Tax Policies, Exaggerates Their Adverse Impact, the Washington paper continues its shilling for democrat candidates. It purports to "analyze" the tax proposals of Senator Obama and review the criticisms offered by Senator McCain. He are two key paragraphs from the story to show the balanced coverage (with annotations) and (added emphasis from the original article).

The statement that Obama would "enact" the largest tax increase since World War II is also overblown. Bush's cuts will expire automatically at the end of 2010, so it is hardly a question of "enacting" a new tax increase. Pardon me but if rates are raised (from one day to the next) as is currently projected in the sunsets in the existing policy, isn't that a tax increase? According to Obama economics adviser Jason Furman, the revenue raised from letting the tax cuts expire would be returned to middle- and lower-income taxpayers in the form of tax credits to pay for health insurance, so the overall effect would be revenue-neutral. At least in the static revenue models that pass for analysis in Washington.

McCain spokesman Brian Rogers pointed to an analysis by the nonpartisan Annenberg Political Fact Check that found that the gross tax increase would amount to $103.3 billion in 2011, the largest single-year tax increase since World War II. The Annenberg study pointed out, however, that "most economists" prefer to measure tax changes as a percentage of gross national product, in which case it would be the fifth-largest increase since 1943. When the Post has analyzed the Bush tax cuts they have frequently argued that they were "the largest in history" using the raw numbers. Obviously, the better analysis is of GDP, but were the Post to do that, the Bush Tax "Cuts" have actually raised taxes a bit. As a pecentage of GDP, just between 2003 and 2006, the take has increased. According to a letter to Senator Kent Conrad from the Congressional Budget Office,personal income tax collections went up in that short time by a nominal amount of about $250 billion, but as a percentage of GDP increased from 7.3% to 8%. Total revenues went from 16.5% to 18.4%. I have not seen the Post congratulating the Bush administration for their tax increases. Over the last several decades taxes as a percentage of GDP have fluctuated from mid-16% to just under 19%. The real question here about tax policy should be the distribution of burden and the underlying structure.

Outrageous Hero, Indeed

B.T. Collins was one of those political figures who was a mass of contradictions that worked together. During the time I knew him in Sacramento, he worked for an amazingly disparate group of politicians - Jerry Brown, George Deukmejian and Pete Wilson (and a few minor ones like Tom Hayes). While there are a lot of political types who claim to be able to do that, all the time that he did, he kept his integrity. That is rare. His older sister Maureen, has written an excellent biography which captures him in a wonderful way. B.T. was a Vietnam veteran who had lost an arm and a leg there. He was inordinately irreverent but had an underlying deep respect for the political process.

For a period of about 15 years he was ubiquitous - and then suddenly he died. Outrageous Hero; The B.T. Collins Story tells his story from the end - it begins with his funeral, he died in 1993 of a heart attack. I worked with him when he first came to Sacramento and then as he moved through jobs, finally agreeing to run in the Assembly district where I lived, I kept working with him.

Two short stories about him that are not in the book - both about his too short career in the legislature. Surprisingly, he did not introduce many legislative proposals. But he cared about issues. In one particularly difficult fight he was on the committee that would hear the bill. I went to see him to explain our position, he listened intently. He then said "The opponents tell a very different story." I explained why they were wrong. When the bill came up in committee, he asked a couple of key questions - showing he had thought about both sides, and then (fortunately) voted the right way. About two weeks later I was sitting in the gallery of the Assembly and B.T. ever the showman, looked up at me and yelled my name and then said- " how am I supposed to vote on this one?" He cared enough about the process to try to get it to work. But I sensed, and the book confirms, that the silly games in the process annoyed him.

The second story is even more typical. In his first campaign he was running in a tight situation. He had moved into the district at the request of the Governor (Wilson). His major opponent was one of those types in politics who could have benefitted from a bit less talk and a lot more listening. I decided to do calling for him. That is not an especially fun job - you go through voter lists and call to ask how people plan to vote - it helps in getting out the vote. A few days after I did that I got a note from him (he was big on personal notes) which said in effect - why in the world would you waste you time calling for me - obviously you have too much time on your hands. In his last campaign, one of his campaign buttons was of a hook - his prothesis was a hook - and he signed the letter "Captain Hook."

Few books about politics these days are inspiring, accurate and funny. This one fits that bill.

The WWDC

I was not there yesterday, at the Apple Worldwide Developer's Conference, but I did see the keynote on the net. Not much of it was a surprise. The company introduced their long anticipated 3G (Third Generation) phone. It has GPS and a search capability and the developer's kit looks simple enough so that when it actually is released there will be lots of native applications for it. Some of those were demoed and they look interesting. The new phone is half the price ($199 for an 8 GIG model and $299 for 16 GIG). I am sure there will be some criticism about not having a larger memory but I have found in the year I have had the 8 GIG model that I only use about half the space. The new phone also has some other tweaks including a search capability.

What was most interesting to me was the rebranding of the .Mac service. When I purchased my AIR, I began to use the service more intensely, which is a backup disk and some other services bundled to hold some of my materials. It became part of my "cloud." The new service is going to be called MobileME (or simply Me.com). It is an interesting implementation of a way to coordinate among all your devices - Phone, Laptop,Desktop. The service is a bit pricey compared to other backup services ($99 per year for 20 Gigs). One of the original criticisms of the phone was no exchange server technology which many businesses use - now that is no longer a problem.

Don't get me wrong, the new phone is great. But MobileMe looks like the most innovative announcement. One of the defects of the integrated applications of the Mac has been the calendar. My administrative assistant and I have had a very frustrating experience of matching my calendar. The existing one is set up to work off the desktop - now all of the features of the Applications (Mail, Calendar, Contacts) can be worked off a Web Application - which means that anyone with account access - anywhere - can keep my calendar up to date. All this comes out on July 11.

Washington's Constant View - Raise Taxes

Roger Lowenstein, writing in the Washington Post on Sunday, argued for 5 Steps to a Better Tax System) His steps are as follows:
1. End preferential treatment for private equity fund managers.
2. Raise the cap on the payroll tax.
3. Reinstate a meaningful inheritance tax.
4. End unfair deductions. First, the mortgage deduction. ... A similarly unfair deduction, which McCain favors repealing,
involves corporate health-care plans.
5. (best for last): Repeal the Bush cuts in income and capital gains taxes

He starts out this exploration into raising taxes with a speech he wishes some politician would say "My fellow Americans, I have a plan to raise taxes so that the budget will be closer to balance and future Americans won't have to worry about their retirement security." That is a speech only a Washintonian could love.

There are some decent ideas in his proposal but there are also some absolutely awful ones and the awful outweigh the good. First the good (it is a shorter list) - it might be appropriate to look at the carried interest treatment. It might be good to look at restructuring both the health care deduction and the mortgage interest deduction. The evidence (you can go back to President Reagan's 1986 Tax Panel for a start) on both of those provisions is that they are fundamentally distortive.

But then comes the nonsense. Why would you think that perpetuating the Ponzi Scheme of Social Security will improve it. The system is bankrupt, or will be soon, because of the constant desire of politicians to give away other people's money. If Lowenstein were a bit more thoughtful here he would suggest separating Social Security into two pots - the first a welfare transfer which could be financed with something less than the existing tax (which is both on employers and employees). But then a system to offer workers real security using private accounts that would add to their net worth rather than enlarging the pool that politicians can prey on. As other nations have shown, that approach build the national capital pool.

Lowenstein repeats the shibboleths about the inheritance tax "The justification for this tax is that while the country allows -- and encourages -- citizens to accumulate great wealth on Earth, some of that fortune should be redirected to society once they enter the hereafter. The practical argument is also important: Repeal of the estate tax would be a death knell to charitable contributions and to this country's unique network of private foundations." There are a lot of assumption in his quote. Here he suggests in one breath to raise tax rates, thus discouraging the accumulation of wealth, and on the other hand proposes that when people die great fortunes should be redirected. I guess it depends on the definition of great and on who should do the redirecting.

Lowenstein's article also raises an unresolved argument about charitable contributions and the tax code started by Duke's Charles Clotfelter. He argued that there is a direct relationship between giving and tax rates. I believe the relationship is a bit more oblique. The deduction does encourage giving but raising tax rates does not increase charitable donations. For the last year they released a report, Giving USA found that charitable giving increased by all measures (including as a percent of GDP) even at a time when the inheritance tax was being phased out. Thus as inheritance taxes were being decreased giving went up. The Bush Tax Act treatment of inheritance taxes was silly - there should be some modest taxes on estates at very high levels. And the tax policy should be consistent. But Lowenstein goes way too far here.

Finally we come to the raising of rates and eliminating the capital gains preference. Many in Washington claim that the Clinton tax bill proved that raising rates on the wealthy does not harm incentives. An objective review of the effects of the Clinton tax bill which did not account for the stimulative effects of the fall of the Berlin Wall and increased productivity caused by technology (much of which was spurred on by the Reagan tax cuts) is missing a lot. It could be argued that the economy would have grown even further had not the tax bill been passed.

We need to look at the tax system, carefully, but going back to the old time religion of simply raising taxes is not the way to do it.

Adam Smith and Senator Obama

In doing an earlier post today I was reminded of a key early part of The Wealth of Nations. Smith discusses the Act of Union which established a free trade area between England and Scotland at the beginning of the 18th Century. Smith's insight about this Act was relevant to Senator Obama's discussion of NAFTA.

Before the Act of Union, England and Scotland were separate both politically and economically. Scotland suffered from limited access to trade. Smith concluded that after the Act, Scotland was able to develop economically and as importantly intellectually because of its access to both kinds of markets.

NAFTA and the Act of Union are not entirely similar because NAFTA does not include political union, however, the economic benefits to both countries are no less clear. It is unfortunate that Senator Obama does not recognize either that long ago history or some much closer to today.

The life of a blog

In March of 2005 I did a post about the need for corporate financial disclosures. I quoted John Kenneth Galbraith, whose economics works I think are mostly forgettable, but who had a great turn of phrase - he argued that when he was a young man there were a lot of 5th Amendment Communists (meaning they took the 5th Amendment rather than reveal their political beliefs) and that today there are a lot of 5th Amendment Capitalists (meaning that many corporate leaders refuse to make accurate or meaningful financial disclosures). I also quoted an interview I had read with the retired CEO of Beatrice Foods, Wallace Rasmussen who had said “In God we trust, everything else we audit.” The theme was the notion of a requirement that publicly traded corporations have a responsibility for reasonable levels of financial disclosures. A reader found that post and asked about the books I quoted in the post.

At the end of the post I argued that Adam Smith, who many of the most vocal supporters of the free market, is often misquoted. Indeed, in An Inquiry Into The Wealth of Nations, Smith argues for self interest. But the depth of his writing, especially in his lesser known book (which he actually re-wrote late in life) calledA Theory of Moral Sentiments , he argues that there are appropriate boundaries for economic activity. My suspicion is that Smith would be a great fan of the efforts to improve financial disclosures.

One of the odd things about Adam Smith is how often he is quoted and how rarely he is read. Last summer I re-read the Wealth of Nations. There are some odd parts to the book - for example, there is a lot of description of 18th Century practices which do not seem relevant to today. But by going through the book you get some basic principles of capitalism. Not the caricature that the most greedy (who have probably never read Smith) offer but to use a phrase coined later by DeTocqueville an understanding of "self interest rightly understood."

The Opposite of Progress

An old joke suggests that the opposite of progress is congress. Taxpayers for Common Sense did a release yesterday which verifies the nostrom. When the democrats took control of the body in 2007 they promised to reduce earmarks by 50%.

Last year there were 11,234 identified earmarks (valued at just under $15 billion) and another 1600 in non-attributed earmarks.The total for these gifts of funds is about $18.3 billion. That is a 23% reduction compared to 2005 but less than half of what was promised.

In case you are interested Taxpayers for Common Sense has the database of all earmarks on an Excel Spreadsheet. When you look at the list some things seem quite mundane. But a majority of these look like simple rent seeking by politicians of all stripes. There is a whole lot of money to increase advocacy. Does that really make sense? $423,000 to the California Innocence Project? There are several projects, each of a couple of hundred thousand dollars, to study obesity in children. There are also a veritable Christmas tree of projects to fund various efforts to enhance DARE (Drug Abuse Resistence Education) - whose demonstrated success is rather qualified. There is $141,000 for wireless modems for police vehicles in Escondido, CA. (Does that mean the federal government should buy these devices for every city in the country?) We're spending almost half a million dollars for new ferry boats in Puget Sound.

Some of these projects may even be good ideas. But are all of them the responsibility of the federal government? The Associated Press did an interactive map by state which can show who gets the most in gross terms and who gets the most per capita. California gets $25.44 per capita from these remembrances. If I did not know who was actually paying for these things, it might even be amusing. But the next time your member of congress brags about "bringing home the bacon" don't forget where the bacon actually came from.

More on the conundrum

The news this week about the May Jobs Report primarily from the Bureau of Labor Statistics was carried as scary. Business Week trumpeted that unemployment jumped by the highest rate in a long time from 5% to 5.5%. ADP, the payroll services company also does an employment report, which in many ways supplements the Bureau of Labor Statistics reports. The BLS reports gave a couple of interesting numbers. First, civilian labor force between first quarter and May - lost jobs, although the drop between April and May was more substantial. But service producing jobs actually went up according to the BLS. Education and health services and hospitality jobs and of course government jobs actually went up.

The ADP numbers break out the stats a bit differently. First, they compare small businesses (50 or fewer employees) to medium and larger ones. Small businesses had a gain while the other two suffered a decline. Goods and manufacturing declined while service producing jobs actually increased.

What this says is that the simplified employment numbers that we all heard earlier in the week are a bit more complex. Not everything in the economy is bleak.

Neither of these posts was written to claim that there are not problems in the economy at this point. We are living through some significant fluctuations in prices (oil and some parts of the food chain) which at least some economists believe were self inflicted. At the same time the construction industry is going through a significant decline in some areas - again some of those wounds were self inflicted. The appropriate response to these trends may not be traditional even numbered year things like raising unemployment and extending benefits. This is probably not the first time that is true.

Hanging on in the Eighth

The Rivercats came back to town for a four game stand against the Portland Beavers last night. They produced an enjoyable game that actually took place in two innings. (actually four half innings) In the bottom of the third, Ryan Sweeney started off with a stand up double,but stretched it to third by a fielding error. Cliff Pennington then came up with a single which scored Sweeney. Rogowski then singled but Pennington stretched his position to third. Then Baisley doubled and scored Pennington and Rogowski moved to third. Brooks Conrad doubled to score Baisley. After Putnam struck out, Conrad got caught stealing - in what some fans thought was a close call (he was out). Landon Powell then singled but moved to second on a throwing error of the guy who had just gotten Conrad. Robnett singled. Massaro singled. Sweeney singled but before they got Massaro out at third Robnett scored.

The next two half innings happened in the top of the fifth when the Beavers scored 4, followed by the top of the sixth when they scored another two. I was out in the kids playland with my grandson Mason to I did not get to see all that. So when I got back to our seats the game was tied. Nobody in our section was talking about how it happened. The Bee's report of the game was no help in that it spent most of the coverage on the number of Maple bats that splintered in the game. (4)

In the bottom of the eighth Powell singled, Robnett moved him along and then Massaro doubled to score Powell.

Blevins came in for the save and the game was over. Kirk Saarloos pitched a solid eight innings with 71 strikes on 107 pitches.

Arnold Kling on Parsing Senator McCain

Arnold Kling is an economist who runs something called Econlog. In a post on June 4 Kling expressed an interesting concern about Senator McCain. He goes through a speech which I did not see and parses the good and bad things that McCain brought to the speech. In the good, the Senator brings a great deal of humility. In the bad, he worries about McCain's belief in working together. He comments "Senator McCain notes that his critics fear that a vote for him is a vote for a third term of the Bush Administration. Not all of that fear comes from the left. Some of it comes from those of us who remember the spirit of bipartisanship and compromise that gave us No Child Left Behind, the unfunded prescription drug benefit for Medicare, ethanol mandates, and zilch on reforming Social Security." That is a point of view that you will not see in the Mainstream Media - but it is certainly a worry shared by many who think about the risks of politics. Sometimes bipartisan agreements are not the best solution.

An economic conundrum

This evening we took our older grandson to a local restaurant called Red Robin. We've heard about all the terrors of the current economic situation - the subprime meltdown, the Bear Stearns demise, all sorts of other issues in the credit markets, outrageous gas prices - and yadayadayada.

But here we were in a relatively upscale hamburger joint (three people for dinner and a check of about $40) and the place was packed on a Wednesday night. All kinds of people, families included, were there munching on their burgers and other kinds of sandwiches. If we are in such a terrible problem, how can all those people afford to go there for dinner?

Mindrot

Steve Ballmer, whose over the top performance at a Microsoft event several years ago earned him the nickname of Monkey Boy made a unique offer to those few people who are still buying Microsoft operating system Vista. Speaking at a meeting yesterday Ballmer said that customers can buy the new operating plague and for the same price as XP downgrade to the (somewhat) more stable predecessor operating system, XP. Ballmer said "Customers get both, I don't know how you can do better than getting both."

In order to assist Mr. Ballmer, the following suggestions might be helpful.

Suggestions for how (Microsoft users) can "do better than getting both."-----

1) By purchasing an operating system which offers more net security than less.
2) By purchasing an operating system which actually works.
3) By purchasing an operating system, whose major operating principle is not a blue screen freeze.
4) By purchasing a Mac, OS X and (if you really think you need it) Parallels (or simply using Boot Camp) for those three instances a year where you think you might possibly want to use Vista or XP.

Election Results

The races in California went pretty much to expectations. The more extreme eminent domain measure went down 2:1, while the phony alternative posed by local governments passed. Tom McClintock won the congressional district being vacated by John Doolittle - he was running against Doug Ose - I would have preferred Ose but McClintock is an improvement over Doolittle. I am bothered by McClintock's rigid stances but Doolittle was both rigid and corrupt. Mark Leno won the SF senate district, Christopher Cabaldon seems to have lost in a Yolo Assembly district, Loni Hancock won in her race against Wilma Chan and Rod Wright seems to have won in an LA Senate district (I always thought he was the best choice) over Mervyn Dymally.

The best news of the day was the victory of Jim Neilsen - the former state senator ran in a north state Assembly district against a couple of other opponents. This is a Republican district so he should win in the fall. Jim will bring something sadly lacking in the legislature at this time - perspective and a commitment to building sound policy. Both houses could use about a half dozen each of those types of members. The Senate gets one like Jim with Carol Liu's victory in the Jack Scott district - so we only need about 5 each.

Bo Diddley

One of my most distinct memories of my introduction to music was the first time I heard Bo Diddley in the middle 1950s. I was eleven or 12 and I first head "I'm a man." Diddley, at that time recorded for Chess and Checker. He was born in Mississippi but made his career in Chicago. Bo Diddley died today after suffering a stroke in 2007

There were a lot of things that were unique about him. First and foremost was he was the first musician that I remember who who used his name in a lot of his songs. Second, was his unrelenting beat. He was one of the definers of rock and roll guitar. Of course he influenced a couple of generations of musicians.

My wife and I saw him in concert twice. First, in Washington DC in a Rock and Roll revival show. But where he really showed himself was in a concert about 25 years ago in Sacramento, where he was the attraction. He came on stage and brought down the house for about an hour and a half. He took a short break and then did a second act of about the same length.

A follow up on the Democrat's Dilemma

Doc Opp corrected my assertion about Clinton's number of voters - - please see the original post and the comment. Clinton's claim of voter superiority is based on inclusion of the two disputed states,in one of those Obama chose not to compete. What brings me back to this issue so clearly is the underlying purpose of the nominations process. One could argue that the primaries and caucuses have two purposes - to nominate the best candidate in the eyes of the activists of the party (which the caucus system seems to do) or to nominate the candidate with beliefs closest to the party but who is also the strongest candidate in the November election. The first purpose satisfies the activists but may not win elections - which is after all why parties are organized.

As I noted in the original post, in this election, because of the disarray of the GOP, that may not be a distinction with a difference. But it is pretty clear that the GOP system for selecting their candidate avoided the extremes.

I have not made a final choice in the November elections. As I have noted in a number of previous posts, my vote will depend on four issues - the candidate's positions on Trade (where Obama has, IMHO, pandered and McCain seems more committed to continuing our regime of advancing free trade), Taxes (where Obama seems to have ignored the data on the need to keep tax rates low and systems simple but where McCain has pandered a bit on issues like the gas tax), Immigration (where McCain's position and Obama's are almost exactly the same, although McCain has shown genuine leadership in advancing a sensible approach, even to the peril of some in his party), and finally their selection of Vice President. Quite conceivably, the selection of Vice President becomes the most important of the four.

The Democrat's Problem

Tomorrow, if all goes as planned the Democrats will confirm Barrack Obama for their nominee. Yet, the loser in this race received significantly more popular votes than the eventual winner. The result came from rules that the party designed to balance out electoral needs. The party has vacillated between involving too many party activists and too few.

The nominating process should serve two purposes, it should energize your base of voters, and the caucus system seems to have done that partially. At the same time it needs to introduce, presumably favorably, the candidate to the wider electorate. In those states where there were primaries, that seems to have been done, but in major other parts of the country, that did not happen. In this cycle, IMHO, the democrats have relied a bit too much on caucuses. Senator Clinton can make the accurate claim that she won more voters even if Senator Obama won more delegates.

I am not sure who will win the general election, based on polling across the country voters are in a nasty mood. So whether the nomination system works or not may not make any difference in this election cycle. But that does not mean that the process creates more problems than it solves.

As I see the reliance on caucuses it has numerous problems. First, it over-emphasizes the role of party activists. Second, the caucuses reduce the possibility that some potential voters - even democratic voters - will participate. The elderly and low income people may have a lower propensity to participate in these events than upper middle income members of the party. That is where a good part of the liberal wing of the party resides and that is who is supporting Senator Obama.

To his credit, Obama recognized the constraints of the current cycle more clearly than Clinton did. In the general election, if his inexperience begins to show, and there are signs that it could well, the democrats will only have their own rules to blame for his loss.

An Unexpected Surprise

Anyone who knows me well would be surprised to have me be interested in a book about building a cathedral in 12th Century England. My wife and I are in a reading group that chose the book for the summer and so read it together. The book the group chose for this summer is The Pillars of the Earth written by Ken Follett. There is an Audible (Unabridged)
version of the novel read by John Lee - who is perfect for the role. (The illustration is from Follett's website. The book has a number of illustrations - although his descriptions are so vivid that I actually found them a distraction.)

The story is interesting in at least three ways. First, Follett, who is known for his thrillers, wrote this book because he was interested in how cathedrals were built. HIs publisher was skeptical of the change in genre. And in the first few years of the book it did not sell very well - but it has maintained steady sales for a couple of decades. He began this book in the early 1970s and it was not released until 1989. It now sells about 100,000 copies a year in the US. That is remarkable for any novel but especially good for a long book about a time long ago. Second, Follett weaves together a couple of stories that involve the confrontation of good and evil in both the political and religious realms which makes the themes of the book fascinating. The interlocking stories and the scope of the story makes it a wonderful mix of part wonder with the construction techniques, part explanation of life in the middle ages, and part exposition of universal themes which is hard to put down. HIs description of the challenges of construction also are very good. Many of the greatest cathedrals were constructed using relatively primitive technology - but they have stood the test of time. Follett makes two important points - first the role of the commerce of ideas helped advance the technology. Second, because of the relatively unsure political situation and the complexity of the task - these projects took generations to create. That required a set of commitments that had to be sustained over many individuals - religious and political leaders as well as the construction leaders. I had never thought of the scope of those projects. Finally, there is the character development. Each of the main characters is drawn out well and works off the others. So there are a couple of religious figures, a couple of political ones and a couple of builders - each with their own traits.

I am reluctant to retell the story, Follett does such a good job in doing that. But I was interested to see how he linked the rules of 12th Century England with broader themes. I was also interested in his descriptions of the life of monks. Over the last fifteen years I have worked closely with a priest, who has become a good friend, I have seen him struggle with the sometimes tough roles that he is presented with. Follett's description of the Prior's challenges reminded me a lot of my friend's. Although the story is fictional and the cathedral in question is a blend of a couple, in the end he also brings in some historical events, including the murder of Thomas Becket.