Watching the gyrations in the stock markets is ugly. Uglier still is watching my net worth decline! With the announcement of each piece of bad news comes a precipitous drop, followed by an unjustifiable spike as sentiment changes. The overall trend, unfortunately, has been down for a year.
All too frequently this thought comes to mind: "so what else is new?" Conditions have been parlous for a year so casualties could have been expected. It is only the identity of the casualties that should have been news.
This level of irrationality, demonstrated by market movements in the past few weeks, suggests panic, followed by euphoria, followed by more panic, as money managers rush around in ever diminishing circles and finally disappear up their own fundamental orifices.
The late Benjamin Graham, doyen of value investors, wrote the classic Security Analysis, first published in 1934. Mr. Graham proposed the idea of "Mr. Market", a manic depressive whose daily offers to buy your share of a business, or sell his share to you, were largely irrational. The good news is that there is no cost to ignoring Mr. Market: a decision to buy or sell can wait on the difference between the fundamentals and Mr. Market's offer. If Mr. Market is manic and offering far too much, then sell. Buy if he is depressive and asking far too little.
Competently executed, this style of investing can work really well. There is, however, one critical condition: value investors must have sufficient cash on hand to take advantage of Mr. Market's depressive phases. Unfortunately, the general market model has changed for the worse.
Most investments are now managed by institutions and the majority of those institutions offer mutual or exchange traded funds. This is the vehicle for the smaller investor - including 401(k) plan participants and IRA owners - to own the market or, allegedly, to benefit from the highly skilled efforts of professional money managers.
The first problem is the total reluctance of mutual fund managers to hold cash. Anything more than needed to cover the normal level of redemptions appears to be effectively prohibited. So, when panic strikes, the managers are forced to raise cash by selling into a declining market. When everyone is trying to get out at the same time, the result is a rapid decline in share prices.
The converse is that, when markets are rising, a flood of new money arrives and the culture forces mutual fund managers to buy high. "Buy high, sell higher" is known as "momentum investing" and can be very profitable if an investor can consistently and accurately call the top. Once at the top, the strategy is to sell like crazy, but a requirement to stay fully invested prohibits that.
The second major problem is that mutual funds simply do not hold enough cash to take advantage of the times when Mr. Market is severely depressed.
The mutual fund model is broken. Without the ability - or even the will - to sell and then hold very substantial cash balances when share prices are far higher than the fundamentals justify, the market is trapped in a positive feedback loop. The result is increased volatility and, depending on the direction of prices, euphoria or panic - often succeeding each other in rapid succession.
I am a limited partner in a small private equity (leveraged buyout or LBO) fund. So far, in a little over two years, the managers have drawn 40% of our capital commitments while returning capital and dividends equal to nearly half of that. They are in no rush to spend the rest of our money but, on a day when Mr. Market is more than usually depressed, there is plenty of cash available to take advantage of the opportunity.
The biggest difference between LBO and mutual funds is that we, the LBO fund investors, are along for the ride. We have no exit until the fund's life comes to a natural end: no matter how much we panic, we are unable to force the manager to sell into a declining market.
The incentives of private equity fund managers are well aligned with those of the investors. The model is functional and all that the investors need is a manager with a proper understanding of value - and the discipline to refrain from either overpaying or burdening the portfolio companies with excesive debt. While private equity carries higher than average risk, the returns are also likely to be higher than average. More important is the fact that returns are primarily linked to the skills, and discipline, of the manager and less affected by a mutual fund manager's inability to ignore the day to day irrationality of Mr. Market.
To say that the current investment model is irrational and dysfunctional is one thing. It is very likely an accurate statement but investors are well advised to consider this thought from the late economist Maynard Keynes:
"The market can stay irrational longer than you can stay solvent."
Thursday, September 18, 2008
Wednesday, September 17, 2008
Too clever by half
When used by the British, the phrase 'too clever by half' is a serious insult.
It is used to describe a person or scheme that has failed - often after a promising start - because of complexity and overreaching. 'Too sure of one's intelligence in a way that causes displeasure or damage to people' is another definition. The opposite of 'too clever by half' is the person who knows that 'keep it simple stupid' is often the safest and, in the long run, the most profitable course of action.
The current financial crisis came about because the grossly overpaid "geniuses" on Wall Street were too clever by half. While they "only" did three things wrong, those three things were sufficient to land us all in trouble. Excessive leverage, fees layered upon fees, and gross self deception are clearly classifiable as "big wrongs".
Leverage, in ordinary terms, means borrowing - lots of borrowing. A homeowner who makes a 20% down payment is leveraged 4:1. There is some risk for the lender but it is not excessive and the interest rate charged normally provides adequate cover. When the bank packages those mortgages into bonds, there is little addition to the risk.
It is the Wall Street "genius" who buys these bonds using 9:1 leverage (i.e. making only a 10% down payment on the bond and borrowing the rest) who raises the level of risk to what has now proved to be an intolerable level. Combine 4:1 leverage with 9:1 leverage and the total rises to 36:1 with respect to the underlying value. It is not rocket science to see that it doesn't take much in the way of losses, on the underlying mortgages, for the buyer of the bonds to be left with precisely and exactly zero money if he tries to sell them.
Worse yet, in the world of hedge funds, 36:1 leverage is considered modest!
On top of that, when the seller lends the buyer money to buy the bonds, using the bonds themselves as collateral (which has happened all too frequently), the level of risk becomes - at least for any ordinary person - incalculable. If risk managers ever bothered to calculate the potential damage, it seems that they were overruled by overconfident investment bankers and traders.
See also self deception!
Buying long term debt using short term borrowing is known as the "carry trade". It's profitable work if you can keep rolling over the debt, which is not easy in hard times, and if short term interest rates do not spike above that paid on the bonds.
Engaging in the carry trade is a very high risk activity. While it is very similar to the business model used by commercial banks, where demand deposits in checking and savings accounts fund medium and long term loans, they are heavily regulated and statutory capital requirements do not permit leverage much beyond 10:1. Except, to our cost, no small number of them got too clever by half and started finding ways to keep speculative activity, using highly leveraged instruments, off their balance sheets and, until the system blew up in their faces, concealed from their regulators.
Add self deception to the mix. Just a few companies have insured trillions (not a typo - trillions - and the fancy term for this form of speculation is a Credit Default Swap) of dollars of debt, too much of which is now nearly worthless. Those who bought this so-called insurance thought that they were in a nearly risk free position but are now finding themselves badly exposed. There was never a chance that the insurers could ever deliver on their promises if the bet was called, but Wall Street went merrily on its way taking unconscionable risks for a few extra basis points (hundredths of a percentage point) of yield which was further eroded by supercharged fees.
High risk should be accompanied by high reward: that is the position of a well managed Venture Capital Fund but both the managers and the investors recognize and accept that ahead of time. Very high risk, accompanied by only very modestly higher returns, does not constitute good management nor justify supercharged fees. That, not jealousy, is the basis for my description of the Wall Street "geniuses" as grossly overpaid.
Warren Buffet said it well: "You only learn who has been swimming naked when the tide goes out" .
The tide is a long way out now - and a lot of people have been swimming naked.
Let us hope that the impact on the Main Street economy, focused on delivering goods and services rather than speculating with borrowed money, will be limited. Federal Reserve Chairman Ben Bernanke is a expert on the Great Depression. Perhaps he has learned the right lessons.
It is used to describe a person or scheme that has failed - often after a promising start - because of complexity and overreaching. 'Too sure of one's intelligence in a way that causes displeasure or damage to people' is another definition. The opposite of 'too clever by half' is the person who knows that 'keep it simple stupid' is often the safest and, in the long run, the most profitable course of action.
The current financial crisis came about because the grossly overpaid "geniuses" on Wall Street were too clever by half. While they "only" did three things wrong, those three things were sufficient to land us all in trouble. Excessive leverage, fees layered upon fees, and gross self deception are clearly classifiable as "big wrongs".
Leverage, in ordinary terms, means borrowing - lots of borrowing. A homeowner who makes a 20% down payment is leveraged 4:1. There is some risk for the lender but it is not excessive and the interest rate charged normally provides adequate cover. When the bank packages those mortgages into bonds, there is little addition to the risk.
It is the Wall Street "genius" who buys these bonds using 9:1 leverage (i.e. making only a 10% down payment on the bond and borrowing the rest) who raises the level of risk to what has now proved to be an intolerable level. Combine 4:1 leverage with 9:1 leverage and the total rises to 36:1 with respect to the underlying value. It is not rocket science to see that it doesn't take much in the way of losses, on the underlying mortgages, for the buyer of the bonds to be left with precisely and exactly zero money if he tries to sell them.
Worse yet, in the world of hedge funds, 36:1 leverage is considered modest!
On top of that, when the seller lends the buyer money to buy the bonds, using the bonds themselves as collateral (which has happened all too frequently), the level of risk becomes - at least for any ordinary person - incalculable. If risk managers ever bothered to calculate the potential damage, it seems that they were overruled by overconfident investment bankers and traders.
See also self deception!
Buying long term debt using short term borrowing is known as the "carry trade". It's profitable work if you can keep rolling over the debt, which is not easy in hard times, and if short term interest rates do not spike above that paid on the bonds.
Engaging in the carry trade is a very high risk activity. While it is very similar to the business model used by commercial banks, where demand deposits in checking and savings accounts fund medium and long term loans, they are heavily regulated and statutory capital requirements do not permit leverage much beyond 10:1. Except, to our cost, no small number of them got too clever by half and started finding ways to keep speculative activity, using highly leveraged instruments, off their balance sheets and, until the system blew up in their faces, concealed from their regulators.
Add self deception to the mix. Just a few companies have insured trillions (not a typo - trillions - and the fancy term for this form of speculation is a Credit Default Swap) of dollars of debt, too much of which is now nearly worthless. Those who bought this so-called insurance thought that they were in a nearly risk free position but are now finding themselves badly exposed. There was never a chance that the insurers could ever deliver on their promises if the bet was called, but Wall Street went merrily on its way taking unconscionable risks for a few extra basis points (hundredths of a percentage point) of yield which was further eroded by supercharged fees.
High risk should be accompanied by high reward: that is the position of a well managed Venture Capital Fund but both the managers and the investors recognize and accept that ahead of time. Very high risk, accompanied by only very modestly higher returns, does not constitute good management nor justify supercharged fees. That, not jealousy, is the basis for my description of the Wall Street "geniuses" as grossly overpaid.
Warren Buffet said it well: "You only learn who has been swimming naked when the tide goes out" .
The tide is a long way out now - and a lot of people have been swimming naked.
Let us hope that the impact on the Main Street economy, focused on delivering goods and services rather than speculating with borrowed money, will be limited. Federal Reserve Chairman Ben Bernanke is a expert on the Great Depression. Perhaps he has learned the right lessons.
Tuesday, September 16, 2008
Corrupt or Incompetent?
Congressman Charles Rangel (D-NY) is Chairman of the House Ways and Means Committee. As such, he has as much, if not more, influence over our tax laws than anyone else.
Rep. Rangel, in spite of being a tax expert, has neglected to declare, and pay taxes on, income received from twenty years of renting out his Dominican Republic vacation home. On top of that insult to the taxpayers, his vacation home was financed by a no-interest loan from the developer.
Further, his required financial disclosure reports have been shown to be more than a little inaccurate. That the value of some relatively inexpensive Florida property was reported inaccurately is not a major matter. Failure, however, to properly disclose records of privately sponsored overseas trips is more serious.
Of twenty (20) trips listed on his annual disclosure forms, he reported only seven (7) on the separate travel disclosure forms that members must file to provide a more detailed accounting of the cost and purpose of the trips. Destinations included Taiwan, Singapore and the Caribbean Islands.
Were these barely disguised vacations? Or was there significant legislative business conducted on these trips?
The real scandal is that legislators may accept private funds to travel around the world. If a trip is official business, the government should pay: if it is a vacation, the Congressman should have paid. Private sponsorship just reeks of corruption.
Rep. Rangel has stated that, once all of the records are straightened out, he will refer the matter to the House Ethics Committee. That is the right thing to do. On the other hand, he declines to step down as Chairman and, in that, he is supported by Speaker of the House Nancy Pelosi. They are both wrong!
While it is too early to decide whether the Congressman is corrupt or merely incompetent, he should not be the principal person responsible for shaping our tax law. Resignation - sooner rather than later - is the only correct course of action.
Sadly, it is increasingly rare for politicians to accept responsibility for their actions. Doing the right thing, however, should not be an old fashioned curiosity.
Congressman, your duty is to resign.
Rep. Rangel, in spite of being a tax expert, has neglected to declare, and pay taxes on, income received from twenty years of renting out his Dominican Republic vacation home. On top of that insult to the taxpayers, his vacation home was financed by a no-interest loan from the developer.
Further, his required financial disclosure reports have been shown to be more than a little inaccurate. That the value of some relatively inexpensive Florida property was reported inaccurately is not a major matter. Failure, however, to properly disclose records of privately sponsored overseas trips is more serious.
Of twenty (20) trips listed on his annual disclosure forms, he reported only seven (7) on the separate travel disclosure forms that members must file to provide a more detailed accounting of the cost and purpose of the trips. Destinations included Taiwan, Singapore and the Caribbean Islands.
Were these barely disguised vacations? Or was there significant legislative business conducted on these trips?
The real scandal is that legislators may accept private funds to travel around the world. If a trip is official business, the government should pay: if it is a vacation, the Congressman should have paid. Private sponsorship just reeks of corruption.
Rep. Rangel has stated that, once all of the records are straightened out, he will refer the matter to the House Ethics Committee. That is the right thing to do. On the other hand, he declines to step down as Chairman and, in that, he is supported by Speaker of the House Nancy Pelosi. They are both wrong!
While it is too early to decide whether the Congressman is corrupt or merely incompetent, he should not be the principal person responsible for shaping our tax law. Resignation - sooner rather than later - is the only correct course of action.
Sadly, it is increasingly rare for politicians to accept responsibility for their actions. Doing the right thing, however, should not be an old fashioned curiosity.
Congressman, your duty is to resign.
Monday, September 15, 2008
Wall Street's one way bets
For the past 20 years, the practice of senior Wall Street executives, with board and shareholder acquiescence - if not complicity, has been to construct high risk one way bets for their own benefit.
When they win, they profit enormously: gigantic bonuses and option grants are scattered promiscuously while the shareholders do OK - but not much more. When these bets really blow up in their faces, and the executives are fired, they depart with fat severance packages. The current euphemism is "Golden Parachute", but the reality is that they are being greatly rewarded, at shareholder expense, for failure.
The Chapter 11 (Reorganization) Bankruptcy filing by Lehman Brothers which will likely become Chapter 7 (Liquidation), statements by the regulator of Fannie Mae and Freddie Mac, and the abrupt takeover of Merrill Lynch by Bank of America may, with luck, signal the end of some of these one way bets. The best of the ugly news is a statement by the Federal Housing Finance Agency stating that severance payments will not be made to Daniel Mudd (CEO of Fannie Mae) and Richard Syron (Chairman and CEO of Freddie Mac) despite such provisions in their contracts.
I suspect that the top Executives, and many second echelon ones as well, at Merrill Lynch will find the culture and attitude to risk taking at Bank of America, which is to acquire them, to be radically different from that to which they are accustomed. Given the impending demise of Lehman Brothers, and the expected loss of jobs there, pay scales will be less generous. The supply of investment bankers will likely exceed demand for a few years to come.
It is time for shareholders to restrain the excesses of management. Actively managed mutual funds are notorious for the speed at which they churn (I use the word deliberately) their portfolios: they are speculators not owners. With the rise of Mutual and Exchange Traded Funds that mirror the market's indices, we can hope to find a new generation of money managers who are willing to be owners rather than gamblers.
Money managers should take a lesson from Berkshire Hathaway and its CEO Warren Buffet. Aside from its 100% ownership of a large stable of companies, Berkshire Hathaway is a major player in the stock markets. Acting like an owner, not a speculator, is Berkshire Hathaway's investment philosophy and it is rare to find management, at companies where it is a significant shareholder, with hands too obviously in the cookie jar .
Shareholders of the world unite. (Apologies to Karl Marx!)
Many will blame the current financial crisis on the sub-prime mortgage mess. The reality is that the financial sector, over a twenty year period and with the complicity of former Federal Reserve Chairman Alan Greenspan (Bubblespan?), has constructed a gigantic pyramid scheme, built on sand, which is now collapsing on us.
Shareholders, and the Boards of Directors that are supposed to represent us, acquiesced in this horror show. While management deserves the greatest punishment, we too will suffer but we must accept our share of the blame.
When they win, they profit enormously: gigantic bonuses and option grants are scattered promiscuously while the shareholders do OK - but not much more. When these bets really blow up in their faces, and the executives are fired, they depart with fat severance packages. The current euphemism is "Golden Parachute", but the reality is that they are being greatly rewarded, at shareholder expense, for failure.
The Chapter 11 (Reorganization) Bankruptcy filing by Lehman Brothers which will likely become Chapter 7 (Liquidation), statements by the regulator of Fannie Mae and Freddie Mac, and the abrupt takeover of Merrill Lynch by Bank of America may, with luck, signal the end of some of these one way bets. The best of the ugly news is a statement by the Federal Housing Finance Agency stating that severance payments will not be made to Daniel Mudd (CEO of Fannie Mae) and Richard Syron (Chairman and CEO of Freddie Mac) despite such provisions in their contracts.
I suspect that the top Executives, and many second echelon ones as well, at Merrill Lynch will find the culture and attitude to risk taking at Bank of America, which is to acquire them, to be radically different from that to which they are accustomed. Given the impending demise of Lehman Brothers, and the expected loss of jobs there, pay scales will be less generous. The supply of investment bankers will likely exceed demand for a few years to come.
It is time for shareholders to restrain the excesses of management. Actively managed mutual funds are notorious for the speed at which they churn (I use the word deliberately) their portfolios: they are speculators not owners. With the rise of Mutual and Exchange Traded Funds that mirror the market's indices, we can hope to find a new generation of money managers who are willing to be owners rather than gamblers.
Money managers should take a lesson from Berkshire Hathaway and its CEO Warren Buffet. Aside from its 100% ownership of a large stable of companies, Berkshire Hathaway is a major player in the stock markets. Acting like an owner, not a speculator, is Berkshire Hathaway's investment philosophy and it is rare to find management, at companies where it is a significant shareholder, with hands too obviously in the cookie jar .
Shareholders of the world unite. (Apologies to Karl Marx!)
Many will blame the current financial crisis on the sub-prime mortgage mess. The reality is that the financial sector, over a twenty year period and with the complicity of former Federal Reserve Chairman Alan Greenspan (Bubblespan?), has constructed a gigantic pyramid scheme, built on sand, which is now collapsing on us.
Shareholders, and the Boards of Directors that are supposed to represent us, acquiesced in this horror show. While management deserves the greatest punishment, we too will suffer but we must accept our share of the blame.
Sunday, September 14, 2008
A thought for the weekend
"Never play cards with any man named 'Doc,' never eat at anyplace called "Mom's' and never, never, no matter what else you do in your whole life, sleep with anyone whose troubles are worse than your own."
Nelson Algren (Rules for life)
Nelson Algren (Rules for life)
Saturday, September 13, 2008
Entrepreneurs: Debt or Equity?
One of the great strengths of the American economy is the constant creation of new companies and the acquisition of existing small businesses. Since most entrepreneurs lack sufficient personal resources to fully fund these new companies, they are faced with the need to raise capital.
Without getting complicated, the choice comes down to debt or equity - and there is good news and bad news associated with each.
The bad news about equity capital is that it is the most expensive form of capital in existence: the good news is that the money never has to be returned, and dividends never have to be paid, unless the company can afford it. When it comes to debt, the good news is that no form of capital is cheaper (even though using high interest credit cards is not all that cheap) but the bad news is that the money has to be given back, and the interest paid, when promised.
Risk and reward are in balance. The rich rewards reaped by successful entrepreneurs reflect the substantial financial risk that every small business owner must take as well as the skill and hard work that are needed to ensure that the business survives and prospers.
Senator Obama please take note!
Without getting complicated, the choice comes down to debt or equity - and there is good news and bad news associated with each.
The bad news about equity capital is that it is the most expensive form of capital in existence: the good news is that the money never has to be returned, and dividends never have to be paid, unless the company can afford it. When it comes to debt, the good news is that no form of capital is cheaper (even though using high interest credit cards is not all that cheap) but the bad news is that the money has to be given back, and the interest paid, when promised.
Risk and reward are in balance. The rich rewards reaped by successful entrepreneurs reflect the substantial financial risk that every small business owner must take as well as the skill and hard work that are needed to ensure that the business survives and prospers.
Senator Obama please take note!
Friday, September 12, 2008
NATO, Russia and Governor Palin
Speaking in an interview with Charles Gibson of ABC News, Governor Palin seems to believe that both the Ukraine and Georgia should become members of NATO. In the same interview, she suggests that we may have to go to war with Russia in case of an invasion of a "democracy".
NATO memberships for Georgia and Ukraine are opposed by Russia in defense of its right to control her "near abroad". That, however, is not a good reason why we should flinch from supporting democracies that are under threat from a large and bullying neighbor. On the other hand, the question of whether Georgia and Ukraine will remain democracies is not yet settled.
By admitting Eastern European countries - or, harder, those in the Caucasus - to NATO, the first problem is that, under the North Atlantic Treaty, an attack on one is an attack on all. Thus, all signatories are obligated to come to the defense of the attacked.
Granting NATO membership so freely may be a good thing on moral grounds: the more cynical may ask what is in it for us. It does, however, raises the question of how the alliance will, or even can, respond if Russia attacks a NATO member.
The issue is NATO's ability, lacking resources or even much [European] will to go to war, to deliver on its commitments. America is the only significant military power in the alliance, and there are only two other NATO members (UK and France) with even modest expeditionary capabilities. A reasonable conclusion is that NATO (i.e. America) has been grossly promiscuous in accepting new members and promising membership to other countries.
Would, as during the Cold War, the use of nuclear weapons be considered if we were losing?
Our forces in Europe have been greatly reduced since the end of the Cold War. The bulk of our remaining military will be involved in Iraq and Afghanistan for at least the next three years and, once those wars end, will need a lengthy period to reconstitute personnel and equipment in order to respond to a European crisis.
Then, there are the problems posed by Iran and North Korea, two wannabe nuclear powers, which may require a military response but with few allies or available military assets - other than, perhaps, the Air Force. A China - Taiwan crisis is not impossible either.
Governor Palin (and the McCain campaign) would have been well advised to have taken a lesson from a well known saying of President Theodore Roosevelt:
"Speak softly and carry a big stick."
Worth noting is the fact that President Roosevelt had little more experience (but, perhaps, much greater wisdom) than Governor Palin when he took office in 1901 after the assassination of President William McKinley.
President Bush's two terms have been marked by bluster and empty threats. The "change" promised by both Senators McCain and Obama might have included modesty to go along with strength but Governor Palin has, regrettably, started down an ill-starred path all too well trodden by President Bush and his advisers.
NATO memberships for Georgia and Ukraine are opposed by Russia in defense of its right to control her "near abroad". That, however, is not a good reason why we should flinch from supporting democracies that are under threat from a large and bullying neighbor. On the other hand, the question of whether Georgia and Ukraine will remain democracies is not yet settled.
By admitting Eastern European countries - or, harder, those in the Caucasus - to NATO, the first problem is that, under the North Atlantic Treaty, an attack on one is an attack on all. Thus, all signatories are obligated to come to the defense of the attacked.
Granting NATO membership so freely may be a good thing on moral grounds: the more cynical may ask what is in it for us. It does, however, raises the question of how the alliance will, or even can, respond if Russia attacks a NATO member.
The issue is NATO's ability, lacking resources or even much [European] will to go to war, to deliver on its commitments. America is the only significant military power in the alliance, and there are only two other NATO members (UK and France) with even modest expeditionary capabilities. A reasonable conclusion is that NATO (i.e. America) has been grossly promiscuous in accepting new members and promising membership to other countries.
Would, as during the Cold War, the use of nuclear weapons be considered if we were losing?
Our forces in Europe have been greatly reduced since the end of the Cold War. The bulk of our remaining military will be involved in Iraq and Afghanistan for at least the next three years and, once those wars end, will need a lengthy period to reconstitute personnel and equipment in order to respond to a European crisis.
Then, there are the problems posed by Iran and North Korea, two wannabe nuclear powers, which may require a military response but with few allies or available military assets - other than, perhaps, the Air Force. A China - Taiwan crisis is not impossible either.
Governor Palin (and the McCain campaign) would have been well advised to have taken a lesson from a well known saying of President Theodore Roosevelt:
"Speak softly and carry a big stick."
Worth noting is the fact that President Roosevelt had little more experience (but, perhaps, much greater wisdom) than Governor Palin when he took office in 1901 after the assassination of President William McKinley.
President Bush's two terms have been marked by bluster and empty threats. The "change" promised by both Senators McCain and Obama might have included modesty to go along with strength but Governor Palin has, regrettably, started down an ill-starred path all too well trodden by President Bush and his advisers.
Tuesday, September 9, 2008
It's been said before...
A long time ago, comedian Will Rogers succinctly identified the causes of our current economic problem. When he spoke these words, however, he was referring to the excesses of the Roaring Twenties:
Too many people spend money they haven't earned, to buy things they don't want, to impress people they don't like.
As so often, there is little new under the sun!
Too many people spend money they haven't earned, to buy things they don't want, to impress people they don't like.
As so often, there is little new under the sun!
Sunday, September 7, 2008
Airline Baggage Handling
The gold standard for quality assurance is known as 6 Sigma. Without going into detail, 6 Sigma translates into approximately 3.4 defects per million items.
When it comes to baggage, there isn't an airline in the world that comes close to performing at that quality level.
Since the 6 Sigma defect rate is measured in relation to the number of opportunities to foul up, a reasonable estimate of the "mishandled" (a squishy word for lost, damaged or destroyed) bag rate, under a 6 Sigma system, would be around 6.5 per million travellers. The reason that it is higher than 3.4 is that many bags have to make connections, and some travellers check more than one bag, so the average number of opportunities for loss, damage or destruction is significantly greater than one per trip.
The actual ten year average of "mishandled" baggage reports, for the eight largest airlines in the USA, ranges from 4.25 (Continental) to 5.49 (United) per THOUSAND passengers. It is not too hard to do the math which shows a defect rate that is at least six hundred and fifty times worse than the 6 Sigma standard.
That airline executives can, with a straight face, charge extra for checked bags, while delivering wholly inadequate service, must be considered a marvel of modern business. Adding insult to injury, we hear only excuses and see not very creative efforts to assign blame to someone else.
That is just not good enough. It also brings to mind a thought that crossed my mind some thirty years ago, when I was relatively new in the consulting business: the only reason that any given company is not bankrupt is because the competition is as incompetent or worse.
In the past eight years, all of the major airlines, except American and Southwest, have taken a trip through Chapter 11 of the bankruptcy code. Although Southwest hasn't gone bankrupt, it doesn't count because it is really a single focus hedge fund, speculating in jet fuel futures, that happens to own and fly airplanes. How much profit would Southwest have made for its shareholders if it hadn't bothered to be in the airline business?
It is time for management and unions, whose incompetence (and shortsighted greed) has created this situation, to suffer the consequences. So, too, should the shareholders who have invested (speculated?) without performing a proper analysis of the industry's dysfunctional economics and incompetent management.
The next airline to file under Chapter 11 of the Bankruptcy Code should be refused protection from its creditors and be liquidated under Chapter 7. That is the nature of capitalism: the risk of failure is the other side of the potential for reward. Penalty free "do overs" are for kids in kindergarten, not business people whose salaries are in the millions of dollars.
When it comes to baggage, there isn't an airline in the world that comes close to performing at that quality level.
Since the 6 Sigma defect rate is measured in relation to the number of opportunities to foul up, a reasonable estimate of the "mishandled" (a squishy word for lost, damaged or destroyed) bag rate, under a 6 Sigma system, would be around 6.5 per million travellers. The reason that it is higher than 3.4 is that many bags have to make connections, and some travellers check more than one bag, so the average number of opportunities for loss, damage or destruction is significantly greater than one per trip.
The actual ten year average of "mishandled" baggage reports, for the eight largest airlines in the USA, ranges from 4.25 (Continental) to 5.49 (United) per THOUSAND passengers. It is not too hard to do the math which shows a defect rate that is at least six hundred and fifty times worse than the 6 Sigma standard.
That airline executives can, with a straight face, charge extra for checked bags, while delivering wholly inadequate service, must be considered a marvel of modern business. Adding insult to injury, we hear only excuses and see not very creative efforts to assign blame to someone else.
That is just not good enough. It also brings to mind a thought that crossed my mind some thirty years ago, when I was relatively new in the consulting business: the only reason that any given company is not bankrupt is because the competition is as incompetent or worse.
In the past eight years, all of the major airlines, except American and Southwest, have taken a trip through Chapter 11 of the bankruptcy code. Although Southwest hasn't gone bankrupt, it doesn't count because it is really a single focus hedge fund, speculating in jet fuel futures, that happens to own and fly airplanes. How much profit would Southwest have made for its shareholders if it hadn't bothered to be in the airline business?
It is time for management and unions, whose incompetence (and shortsighted greed) has created this situation, to suffer the consequences. So, too, should the shareholders who have invested (speculated?) without performing a proper analysis of the industry's dysfunctional economics and incompetent management.
The next airline to file under Chapter 11 of the Bankruptcy Code should be refused protection from its creditors and be liquidated under Chapter 7. That is the nature of capitalism: the risk of failure is the other side of the potential for reward. Penalty free "do overs" are for kids in kindergarten, not business people whose salaries are in the millions of dollars.
Saturday, September 6, 2008
Books or bytes?
In 2005, Dennis Lyons of the Daily Record http://www.dailyrecord.com quoted Walter Isaacson, President of the Aspen Institute, on the subject of print:
Print. If for the past 400 years we'd been getting all of our information electronically, and somebody invented a way to put it on paper and deliver it to our doorsteps so we could read it in the back yard or bath or bus, people would say this new print technology is so wonderful it will replace the Internet.
Mr. Isaacson was discussing newspapers. There are even greater advantages to print when it comes to books: the fact that no batteries required and they don't break expensively when you drop them are only two. And, remembering my childhood, it would have been hard to read electronic books under the covers after lights out. (OK, OK, flashlights have batteries).
Although I am not a survivalist or a rabid environmentalist, I am a firm believer in avoiding the use of electricity - so long as my comfort is not compromised - whenever possible. Supply is not always available, dead batteries are hazardous waste, and it costs money. There is merit to the [slightly] simpler life.
I don't think that I will be buying a Kindle (R) from Amazon http://www.amazon.com any time soon. The reason is that books are simple, efficient and, in the long run, inexpensive.
Print. If for the past 400 years we'd been getting all of our information electronically, and somebody invented a way to put it on paper and deliver it to our doorsteps so we could read it in the back yard or bath or bus, people would say this new print technology is so wonderful it will replace the Internet.
Mr. Isaacson was discussing newspapers. There are even greater advantages to print when it comes to books: the fact that no batteries required and they don't break expensively when you drop them are only two. And, remembering my childhood, it would have been hard to read electronic books under the covers after lights out. (OK, OK, flashlights have batteries).
Although I am not a survivalist or a rabid environmentalist, I am a firm believer in avoiding the use of electricity - so long as my comfort is not compromised - whenever possible. Supply is not always available, dead batteries are hazardous waste, and it costs money. There is merit to the [slightly] simpler life.
I don't think that I will be buying a Kindle (R) from Amazon http://www.amazon.com any time soon. The reason is that books are simple, efficient and, in the long run, inexpensive.
Friday, September 5, 2008
No press conferences?
A week has now passed since the announcement of Governor Palin's selection as the Republican Party's choice for Vice Presidential Nominee. At no time since then has Governor Palin appeared in an unscripted environment: no press conference, no interviews with individual reporters.
So, start with former British Prime Minister Harold Wilson's insightful remark: "a week is a long time in politics." If that is true - and it is - then conspiracy theorists will be sure that there is something to hide while the more thoughtful of us merely wonder.
At some stage, the McCain campaign will have to take the risk of letting her speak for herself in the company of probing, if not hostile, questioners. Sooner is better than later, particularly if there are ugly secrets lurking in the background.
One of my mentors - who later became a very high government official - once told me that there are no secrets in Washington DC. He went on to tell me that while there are those who believe that political and personal secrets can be kept, they are engaging in self deception of the worst kind.
If Senator McCain's campaign doesn't yet understand this simple concept, it may be about to learn the lesson the hard way.
So, start with former British Prime Minister Harold Wilson's insightful remark: "a week is a long time in politics." If that is true - and it is - then conspiracy theorists will be sure that there is something to hide while the more thoughtful of us merely wonder.
At some stage, the McCain campaign will have to take the risk of letting her speak for herself in the company of probing, if not hostile, questioners. Sooner is better than later, particularly if there are ugly secrets lurking in the background.
One of my mentors - who later became a very high government official - once told me that there are no secrets in Washington DC. He went on to tell me that while there are those who believe that political and personal secrets can be kept, they are engaging in self deception of the worst kind.
If Senator McCain's campaign doesn't yet understand this simple concept, it may be about to learn the lesson the hard way.
Thursday, September 4, 2008
A malicious thought...
To liven up the Presidential campaign further, I propose a debate between Senator Obama's former pastor, the Rev. Jeremiah ("God damn America") Wright, and Governor Palin's former Pentecostal pastor, the Rev. Ed Kalnins, whose remarks, as quoted in the Wall Street Journal today, include such gems as:
"I don't think it's God's will to have a war, but in Iraq, America is fighting an enemy that has made it a war over beliefs. I really think it is a holy war. It's a war of gods. ... When someone fights in the name of God, that becomes a holy war."
Would someone tell me how a Christian, who is supposed to believe in one God, can refer to "gods" in the plural? And isn't Allah also the God of Abraham and, therefore, the same God worshipped by Jews, Christians and Muslims?
Referring to President George W. Bush, he also said: "I believe criticisms come from hell. God has placed this man in authority. ... You criticize the authority, you're literally bringing in hell with the criticism."
Neither Rev. Wright or Rev. Kalnins can be described as mainstream, or even well educated, in matters of religion. One can only wonder what malign influences they continue to exert over Senator Obama and Governor Palin.
A debate would be interesting - even if a bit strange. Perhaps Senator Lieberman, being barely a Democrat, hardly a Republican, and a practising Orthodox Jew to boot, might be a suitable nearly neutral party to moderate such a debate!
"I don't think it's God's will to have a war, but in Iraq, America is fighting an enemy that has made it a war over beliefs. I really think it is a holy war. It's a war of gods. ... When someone fights in the name of God, that becomes a holy war."
Would someone tell me how a Christian, who is supposed to believe in one God, can refer to "gods" in the plural? And isn't Allah also the God of Abraham and, therefore, the same God worshipped by Jews, Christians and Muslims?
Referring to President George W. Bush, he also said: "I believe criticisms come from hell. God has placed this man in authority. ... You criticize the authority, you're literally bringing in hell with the criticism."
Neither Rev. Wright or Rev. Kalnins can be described as mainstream, or even well educated, in matters of religion. One can only wonder what malign influences they continue to exert over Senator Obama and Governor Palin.
A debate would be interesting - even if a bit strange. Perhaps Senator Lieberman, being barely a Democrat, hardly a Republican, and a practising Orthodox Jew to boot, might be a suitable nearly neutral party to moderate such a debate!
Wednesday, September 3, 2008
The Erosion of Freedom
The not-so-slow erosion of freedom continues. It appears that governments - and particularly police officers - consider that We, The People, are the problem. They forget that the authors of the U.S. Constitution firmly believed that the power of government is conditional on the consent of the government.
"Unt ve have vays of making you do the zings ve vant you to do" is UnAmerican - conjuring up images of a police state.
An article in the Pittsburgh Post-Gazette describes the ugly reality of modern day police attitudes to citizens http://www.post-gazette.com/pg/08246/908652-85.stm The topic of the article is the issuance of nearly two hundred citations, by Pittsburgh police in the past twenty months, for the crimes of disorderly conduct relating to swearing, making profane gestures, or just generally acting like a jerk.
While rudeness and bad manners should be decried, it is an abuse of power to consider such actions and words to be criminal offenses. Decisions of the courts are quite clear that that the First Amendment protects speech - albeit not absolutely - up until the level that such speech becomes "fighting words".
While my concern for free speech may seem excessive, it is worth remembering these thoughts (although no written record of the exact words exists) from Pastor Martin Niemoller, referring in 1946 to the Nazi dictatorship:
"First they came for the communists, and I did not speak out--because I was not a communist;
Then they came for the socialists, and I did not speak out--because I was not a socialist;
Then they came for the trade unionists, and I did not speak out--because I was not a trade unionist;
Then they came for the Jews, and I did not speak out--because I was not a Jew;
Then they came for me--and there was no one left to speak out for me."
Freedom is precious and we must constantly be on guard for assaults on our liberty. Those who would take it away from us, whether out of malice or simply for their own convenience, will succeed most easily if they remove it one tiny slice at a time.
"Unt ve have vays of making you do the zings ve vant you to do" is UnAmerican - conjuring up images of a police state.
An article in the Pittsburgh Post-Gazette describes the ugly reality of modern day police attitudes to citizens http://www.post-gazette.com/pg/08246/908652-85.stm The topic of the article is the issuance of nearly two hundred citations, by Pittsburgh police in the past twenty months, for the crimes of disorderly conduct relating to swearing, making profane gestures, or just generally acting like a jerk.
While rudeness and bad manners should be decried, it is an abuse of power to consider such actions and words to be criminal offenses. Decisions of the courts are quite clear that that the First Amendment protects speech - albeit not absolutely - up until the level that such speech becomes "fighting words".
While my concern for free speech may seem excessive, it is worth remembering these thoughts (although no written record of the exact words exists) from Pastor Martin Niemoller, referring in 1946 to the Nazi dictatorship:
"First they came for the communists, and I did not speak out--because I was not a communist;
Then they came for the socialists, and I did not speak out--because I was not a socialist;
Then they came for the trade unionists, and I did not speak out--because I was not a trade unionist;
Then they came for the Jews, and I did not speak out--because I was not a Jew;
Then they came for me--and there was no one left to speak out for me."
Freedom is precious and we must constantly be on guard for assaults on our liberty. Those who would take it away from us, whether out of malice or simply for their own convenience, will succeed most easily if they remove it one tiny slice at a time.
Tuesday, September 2, 2008
Senator McCain and Governor Palin
Senator McCain has selected, as his Vice Presidential running mate, a socially intolerant and religiously extreme Governor who doesn't seem to understand that the First Amendment requires that Church and State be separate. While her selection has energized the conservative (perhaps better described as extreme right wing) base of the Republican party, it is likely to turn off many of the Independents and old style Republicans that Senator McCain also needs to win.
I am one.
I had hoped, this year, that I would be able to vote FOR a candidate and believed that Senator McCain would be that candidate. I regret to say that his selection of Governor Palin, around whom there is also the smell of trimming - on earmarks among other things, hypocrisy, and abuse of power, has removed me from the ranks of enthusiastic supporters of Senator McCain.
I still believe that Senator Obama is unqualified and that his likely policies - as much as we have seen them - will harm our country. While I almost certainly will vote against him, staying home on Election Day is no longer totally out of the question.
I am one.
I had hoped, this year, that I would be able to vote FOR a candidate and believed that Senator McCain would be that candidate. I regret to say that his selection of Governor Palin, around whom there is also the smell of trimming - on earmarks among other things, hypocrisy, and abuse of power, has removed me from the ranks of enthusiastic supporters of Senator McCain.
I still believe that Senator Obama is unqualified and that his likely policies - as much as we have seen them - will harm our country. While I almost certainly will vote against him, staying home on Election Day is no longer totally out of the question.
Monday, September 1, 2008
Labor Day
As most of us enjoy a day off from paid work, let us remember the words of country singer Tom T. Hall listing the things that will keep most guys happy for a while:
Faster horses,
Younger women,
Older whiskey,
And more money.
As an average guy, I am not too sure what women want but the appeal of more money is certainly sexless.
Faster horses,
Younger women,
Older whiskey,
And more money.
As an average guy, I am not too sure what women want but the appeal of more money is certainly sexless.
Sunday, August 31, 2008
More on bicycles as transportation.
There is an article in today's Washington Post http://www.washingtonpost.com about commuting by bicycle.
While the article is quite long, it can be summarized quite simply: bicycle lanes and secure parking are two of the keys to getting commuters out of their cars and onto bicycles. Bicycle lanes, as opposed to bicycle "trails", separate bicyclists from pedestrians and runners as well as from cars, buses and trucks. By reducing speed and weight differences, safety is greatly enhanced.
Unfortunately, in the USA, few cities have made a serious effort to make commuting by bicycle safe and attractive. Admittedly, dedicated bicycle lanes and secure parking are not cheap but the potential savings, in terms of reduced traffic congestion and pollution (including greenhouse gas emissions), seem to make this a worthwhile investment.
In addition to the public infrastructure investment, help will be needed from employers. Secure parking is a part of it but employees are simply not going to commute by bicycle if, having arrived hot and sweaty, they must spend the rest of the day in significant discomfort. Their colleagues may find the smell somewhat distressing too! Showers and locker rooms will have to be provided to compensate for the high heat and humidity of summers in most of the USA but the return on investment from a reduction in employer paid parking will offset much, if not all, of this cost.
Given the cost of gasoline, and the time wasted in rush hour traffic, a serious effort to encourage commuting by bicycle is a worthwhile component of a rational transportation plan that combines private vehicles with public transportation.
Read the full article here: http://tinyurl.com/5j2n67
While the article is quite long, it can be summarized quite simply: bicycle lanes and secure parking are two of the keys to getting commuters out of their cars and onto bicycles. Bicycle lanes, as opposed to bicycle "trails", separate bicyclists from pedestrians and runners as well as from cars, buses and trucks. By reducing speed and weight differences, safety is greatly enhanced.
Unfortunately, in the USA, few cities have made a serious effort to make commuting by bicycle safe and attractive. Admittedly, dedicated bicycle lanes and secure parking are not cheap but the potential savings, in terms of reduced traffic congestion and pollution (including greenhouse gas emissions), seem to make this a worthwhile investment.
In addition to the public infrastructure investment, help will be needed from employers. Secure parking is a part of it but employees are simply not going to commute by bicycle if, having arrived hot and sweaty, they must spend the rest of the day in significant discomfort. Their colleagues may find the smell somewhat distressing too! Showers and locker rooms will have to be provided to compensate for the high heat and humidity of summers in most of the USA but the return on investment from a reduction in employer paid parking will offset much, if not all, of this cost.
Given the cost of gasoline, and the time wasted in rush hour traffic, a serious effort to encourage commuting by bicycle is a worthwhile component of a rational transportation plan that combines private vehicles with public transportation.
Read the full article here: http://tinyurl.com/5j2n67
Saturday, August 30, 2008
Senator McCain picks a running mate
Senator McCain has announced that Alaska Governor Sarah Palin is his choice to be the Republican Party's Vice Presidential nominee.
If his selection is designed to energize the so-called Christian Right and help him get elected, it may be good news for him. Unfortunately, it smells like very bad news for our country.
Here is the good news about Governor Palin. She is a Governor and former Mayor which means that she has executive experience. Criticizing her for limited time in office is hypocritical since, compared to the Democratic Party ticket, she is the expert.
More good news is that she has shown herself willing to challenge vested interests and entrenched bureaucracies. In general, she has succeeded. She has also been willing to stand up to major corporations.
In the neutral column is the fact that she is an Evangelical Christian with some fairly antediluvian positions on social issues. I consider myself to be a Goldwater Republican, which includes social tolerance - as well as a strong defense and fiscal conservatism, but I am willing to respect, and debate, other views.
Also in the neutral column is that Senator McCain's selection of a woman as his running mate could be described as 'too clever by half'. More so, when her experience does not compared to that of, say, Christine Todd Whitman who served two terms as Governor of New Jersey and, also, as Administrator of the Environmental Protection Agency. To be fair, however, the only executive position held by Margaret Thatcher prior to becoming Prime Minister was that of Secretary of Education.
There are, however, two negatives: one relatively minor and the other of major proportions. The minor problem involves some unproven allegations of corruptly attempting to influence the Alaskan State Police to fire her brother-in-law who is involved in an unpleasant custody dispute with Governor Palin's sister.
While relatively trivial, since no firing took place, the incident speaks poorly of the competence of those in Senator McCain's campaign who are responsible for vetting candidates for selection as running mate.
The major problem is that Governor Palin is a creationist and supports the teaching of creationism in public schools.
The first issue is that 'Creationism' is a religious doctrine. While some may consider the First Amendment to the Constitution to be irrelevant, obsolete and quaint when it comes to religious matters, it states: "...Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof;". Given the clarity of those words, how can teaching 'Creationism' in public schools be anything other than unconstitutional.
Even more importantly, Governor Palin's believes in a concept that is supported by no evidence. It is impossible to claim, at least with a straight face, that "revealed truth", written in Hebrew by a great poet then translated into beautiful 17th century English poetry in the King James Bible, qualifies as evidence. Further, creationism is contradicted by a vast body of evidence, developed by geologists, astronomers, physicists, biologists and other scientists, so her position suggests that she is in the grip of an irrational delusion that, not so incidentally, is only supported by a minority of the Christian communion.
The Pope, a serious Christian scholar, accepts evolution even if most American Evangelicals do not.
The implication of creationism is that the loving God of the New Testament has deliberately perpetrated a grotesque hoax on everyone. One of Albert Einstein's observations is worth considering: "God is subtle but He is not malicious."
Since Creationists reject science - although perhaps not the technologies, such as electricity and the internal combustion engine, made possible by science - what then of the National Science Foundation and the U.S. Geological Survey as well as the sciences of cosmology, astronomy, evolutionary biology and ecology? Should we fear for the future of publicly funded scientific research - one of the foundations of our prosperity - if Senator McCain were to die or become disabled in office and she becomes President?
My support for Senator McCain has been greatly lessened by his selection of a religious extremist and his implicit endorsement of her beliefs. One small hope is that, if Senator McCain is elected, the office of the Vice President will - in the words of John Nance Garner (Vice President from 1933 - 1941) - once again become: "not worth a bucket of warm piss."
I wish Senator McCain long life and very good health!
If his selection is designed to energize the so-called Christian Right and help him get elected, it may be good news for him. Unfortunately, it smells like very bad news for our country.
Here is the good news about Governor Palin. She is a Governor and former Mayor which means that she has executive experience. Criticizing her for limited time in office is hypocritical since, compared to the Democratic Party ticket, she is the expert.
More good news is that she has shown herself willing to challenge vested interests and entrenched bureaucracies. In general, she has succeeded. She has also been willing to stand up to major corporations.
In the neutral column is the fact that she is an Evangelical Christian with some fairly antediluvian positions on social issues. I consider myself to be a Goldwater Republican, which includes social tolerance - as well as a strong defense and fiscal conservatism, but I am willing to respect, and debate, other views.
Also in the neutral column is that Senator McCain's selection of a woman as his running mate could be described as 'too clever by half'. More so, when her experience does not compared to that of, say, Christine Todd Whitman who served two terms as Governor of New Jersey and, also, as Administrator of the Environmental Protection Agency. To be fair, however, the only executive position held by Margaret Thatcher prior to becoming Prime Minister was that of Secretary of Education.
There are, however, two negatives: one relatively minor and the other of major proportions. The minor problem involves some unproven allegations of corruptly attempting to influence the Alaskan State Police to fire her brother-in-law who is involved in an unpleasant custody dispute with Governor Palin's sister.
While relatively trivial, since no firing took place, the incident speaks poorly of the competence of those in Senator McCain's campaign who are responsible for vetting candidates for selection as running mate.
The major problem is that Governor Palin is a creationist and supports the teaching of creationism in public schools.
The first issue is that 'Creationism' is a religious doctrine. While some may consider the First Amendment to the Constitution to be irrelevant, obsolete and quaint when it comes to religious matters, it states: "...Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof;". Given the clarity of those words, how can teaching 'Creationism' in public schools be anything other than unconstitutional.
Even more importantly, Governor Palin's believes in a concept that is supported by no evidence. It is impossible to claim, at least with a straight face, that "revealed truth", written in Hebrew by a great poet then translated into beautiful 17th century English poetry in the King James Bible, qualifies as evidence. Further, creationism is contradicted by a vast body of evidence, developed by geologists, astronomers, physicists, biologists and other scientists, so her position suggests that she is in the grip of an irrational delusion that, not so incidentally, is only supported by a minority of the Christian communion.
The Pope, a serious Christian scholar, accepts evolution even if most American Evangelicals do not.
The implication of creationism is that the loving God of the New Testament has deliberately perpetrated a grotesque hoax on everyone. One of Albert Einstein's observations is worth considering: "God is subtle but He is not malicious."
Since Creationists reject science - although perhaps not the technologies, such as electricity and the internal combustion engine, made possible by science - what then of the National Science Foundation and the U.S. Geological Survey as well as the sciences of cosmology, astronomy, evolutionary biology and ecology? Should we fear for the future of publicly funded scientific research - one of the foundations of our prosperity - if Senator McCain were to die or become disabled in office and she becomes President?
My support for Senator McCain has been greatly lessened by his selection of a religious extremist and his implicit endorsement of her beliefs. One small hope is that, if Senator McCain is elected, the office of the Vice President will - in the words of John Nance Garner (Vice President from 1933 - 1941) - once again become: "not worth a bucket of warm piss."
I wish Senator McCain long life and very good health!
Friday, August 29, 2008
Senator Obama's acceptance speech.
Referring to Senator McCain, the presumptive Republican Party nominee for President, Senator Obama, in his acceptance speech at the Democratic Party Convention last night, said:
"If you don't have a record to run on, then you paint your opponent as someone people should run from. You make big elections about small things."
What am I missing here? Senator McCain has a substantial legislative record and a proven ability to work with members of the other party. Sherlock Holmes - even with his highest powered magnifying glass - would be hard pressed to find much of a record in Senator Obama's political career.
Then, pandering shamelessly to the irresponsible:
"More of you have cars you can't afford to drive, credit-card bills you can't afford to pay and tuition that is beyond your reach."
Whose fault is that? For most - admittedly not all but certainly the great majority - the fault lies with those for whom spending is a priority rather than the old fashioned virtues of earning and saving.
Further compounding the hypocrisy, he went on to say:
"These challenges are not all of government's making, but the failure to respond is a direct result of a broken politics in Washington and the failed presidency of George W. Bush."
There is little doubt that George W. Bush has been one of the worst Presidents in the history of our country. The "broken politics of Washington", however, involves both ends of Pennsylvania Avenue - and, last time I looked, Senator Obama is a member of the Democratic Party which controls both the Senate and the House of Representatives.
"If you don't have a record to run on, then you paint your opponent as someone people should run from. You make big elections about small things."
What am I missing here? Senator McCain has a substantial legislative record and a proven ability to work with members of the other party. Sherlock Holmes - even with his highest powered magnifying glass - would be hard pressed to find much of a record in Senator Obama's political career.
Then, pandering shamelessly to the irresponsible:
"More of you have cars you can't afford to drive, credit-card bills you can't afford to pay and tuition that is beyond your reach."
Whose fault is that? For most - admittedly not all but certainly the great majority - the fault lies with those for whom spending is a priority rather than the old fashioned virtues of earning and saving.
Further compounding the hypocrisy, he went on to say:
"These challenges are not all of government's making, but the failure to respond is a direct result of a broken politics in Washington and the failed presidency of George W. Bush."
There is little doubt that George W. Bush has been one of the worst Presidents in the history of our country. The "broken politics of Washington", however, involves both ends of Pennsylvania Avenue - and, last time I looked, Senator Obama is a member of the Democratic Party which controls both the Senate and the House of Representatives.
Tuesday, August 26, 2008
On being disabled.
Although I am considered disabled (I am a double leg amputee) I have not yet written about disability issues. The reason is that this blog is about issues rather than about me.
I raise the subject, now, because the way that our society treats too many disabled people is just plain wrong. More importantly, there are many members of the military who are returning from Iraq, Afghanistan, and other hellholes, with wounds that will result in lifelong disabilities. The assumption that, because they are disabled, they can no longer contribute is grotesquely wrong.
The result of our ill treatment of disabled people, too often, is a monumental waste of talent and energy which, to quote Talleyrand, "... is worse than a crime, it is a mistake."
Meanwhile, my readers are entitled to know how I view myself as a person with disabilities.
Being disabled is:
I raise the subject, now, because the way that our society treats too many disabled people is just plain wrong. More importantly, there are many members of the military who are returning from Iraq, Afghanistan, and other hellholes, with wounds that will result in lifelong disabilities. The assumption that, because they are disabled, they can no longer contribute is grotesquely wrong.
The result of our ill treatment of disabled people, too often, is a monumental waste of talent and energy which, to quote Talleyrand, "... is worse than a crime, it is a mistake."
Meanwhile, my readers are entitled to know how I view myself as a person with disabilities.
Being disabled is:
- always hard work,
- usually time consuming,
- often painful, and
- frequently expensive.
The choices are 'get used to it' or 'give up and complain'. With a lot of help from friends - both able-bodied and disabled - I chose the former.
Enough said.
Monday, August 25, 2008
Obama and Biden. Warning - hypocrites at work!
After Senator Biden's remarks during his very brief Presidential campaign, Senator Obama's choice of him as Vice Presidential nominee must leave more than a few of us speechless.
The video should be required viewing:
http://www.youtube.com:80/watch?v=RDVUPqoowf8
As usual, in the long running contest between ambition and honesty, ambition wins again.
The video should be required viewing:
http://www.youtube.com:80/watch?v=RDVUPqoowf8
As usual, in the long running contest between ambition and honesty, ambition wins again.
Sunday, August 24, 2008
Senator Obama wants the rich to pay their fair share of taxes!
Senator Obama wants the rich to pay their fair share of taxes and, if elected, intends to make sure that they do. Given the likelihood of increased Democratic majorities in both the House of Representatives and the Senate, we should expect some serious tax increases if he becomes President.
I, too, think that the rich (I am not one of them although I am "comfortable") should pay their fair share. By any standards, except the Orwellian beliefs of those who believe that citizens work for the government rather than the government deriving its [limited] powers from the consent of the people, that fair share is considerably less than they are paying now.
The first problem with Senator Obama's plan is his definition of rich. A couple making $250,000 per year (or a single person making $200,000) can be very comfortable in Arkansas or North Dakota, but may be quite stretched - particularly with kids of College age - in the New York, San Francisco, Los Angeles, or Washington DC metropolitan areas.
The second problem is the corruption of language: the term rich, at least to someone like myself who is of a certain age, refers to assets not income. A person or family with $10 million in assets could reasonably be considered "rich" but below that is somewhere between well off and poor.
These first two problems are, however, irrelevant except to point out the intellectual dishonesty of the argument being made by Senator Obama.
The real issue is the definition of fair share. Certainly it sounds reasonable, but we have a tax system that is manifestly unfair. To say "the more you make, the more you pay" is fair but "the more you make, the higher the percentage of your income that you pay" doesn't seem to meet any reasonable test of fairness.
Then, to further consider "fair share", we must look at income distribution and the payment of income taxes.
According to a study by the Cato Institute http://www.cato.org the top 1% received 16% of all income in 2004. They paid, however, nearly 40% of all income taxes -- the highest level in 40 years. The top 10% of income earners pay 71 % of the taxes. Somewhere there is a gross inequity that will only be exacerbated by Senator Obama's plans. That 90% of the population only pays 29% of all income taxes can not be equitable either.
It is also worth noting that the total tax burden imposed by the Federal Government comes to a little under 18% of the National Income but the top rate of income tax is 35%. Those numbers clearly indicate that someone is paying far more than his fair share!
Senator OBama believes that the top rate of income tax should be raised to 39.6% as it was during the Clinton Administration. His attitude reminds me of a very ugly remark by Denis Healy (British Chancellor of the Exchequer in the Labor Government) in 1978: "It will squeeze the rich until the pips squeak".
Is it what he thinks he can get away with cramming down our throats? Is it the politics of jealousy which used to be so rare in America? Senator Obama, with his message of hope, should do much better.
If we are to have a true democracy, the burden of paying for our government must be fairly - that means much more evenly - spread. A single rate of income tax is fair ("the more you make the more you pay") with no deductions for favored groups. The only acceptable exception to a true flat tax might be an exemption equal to the poverty line income.
Admittedly the Charitable and Mortgage Interest deductions can not be abolished overnight: they will have to be phased out to avoid major economic disruptions but, with some political courage, that can be achieved. It is likely, however, that it will be necessary to create the political will through swift kicks, administered by the people, to the rear ends of recalcitrant politicians.
Ayn Rand - a ferociously right wing and Libertarian author - writing in her most famous novel Atlas Shrugged, described what happened when the leaders of industry effectively went on strike. The consequences were an economic meltdown - and it could happen in real life. It certainly did in England - an economic basket case in the 1960s and 1970s where no senior managers bothered to work hard and few entrepreneurs existed - because the top tax rate, on even the not very highly paid, was 83% on earned income with an additional 15% surcharge on investment income.
The difference between those rates and confiscation is hard to distinguish. George Harrison of The Beatles put it well in the song Taxman:
Let me tell you how it will be;
There's one for you, nineteen for me.
'Cause I’m the taxman,
Yeah, I’m the taxman.
Should five per cent appear too small,
Be thankful I don't take it all.
'Cause I’m the taxman,
Yeah, I’m the taxman.
We haven't got there yet but we could: the famous Kennedy tax cut reduced the top marginal rate of income tax to only (only?) 70%!
One of the major causes of the American Revolution was the perceived unfairness of taxes levied on the 13 colonies - and their citizens - by an autocratic and uncontrollable government, located 3,000 miles away and not in the slightest answerable to the people. Our government, in Washington DC, is equally isolated from the real world for much of the year, and certainly appears uncontrollable and verging on autocratic.
We don't have to start a new American Revolution, but we should reject all politicians who believe that success - even the modest success of Senator Obama's so-called rich - should be punished.
I, too, think that the rich (I am not one of them although I am "comfortable") should pay their fair share. By any standards, except the Orwellian beliefs of those who believe that citizens work for the government rather than the government deriving its [limited] powers from the consent of the people, that fair share is considerably less than they are paying now.
The first problem with Senator Obama's plan is his definition of rich. A couple making $250,000 per year (or a single person making $200,000) can be very comfortable in Arkansas or North Dakota, but may be quite stretched - particularly with kids of College age - in the New York, San Francisco, Los Angeles, or Washington DC metropolitan areas.
The second problem is the corruption of language: the term rich, at least to someone like myself who is of a certain age, refers to assets not income. A person or family with $10 million in assets could reasonably be considered "rich" but below that is somewhere between well off and poor.
These first two problems are, however, irrelevant except to point out the intellectual dishonesty of the argument being made by Senator Obama.
The real issue is the definition of fair share. Certainly it sounds reasonable, but we have a tax system that is manifestly unfair. To say "the more you make, the more you pay" is fair but "the more you make, the higher the percentage of your income that you pay" doesn't seem to meet any reasonable test of fairness.
Then, to further consider "fair share", we must look at income distribution and the payment of income taxes.
According to a study by the Cato Institute http://www.cato.org the top 1% received 16% of all income in 2004. They paid, however, nearly 40% of all income taxes -- the highest level in 40 years. The top 10% of income earners pay 71 % of the taxes. Somewhere there is a gross inequity that will only be exacerbated by Senator Obama's plans. That 90% of the population only pays 29% of all income taxes can not be equitable either.
It is also worth noting that the total tax burden imposed by the Federal Government comes to a little under 18% of the National Income but the top rate of income tax is 35%. Those numbers clearly indicate that someone is paying far more than his fair share!
Senator OBama believes that the top rate of income tax should be raised to 39.6% as it was during the Clinton Administration. His attitude reminds me of a very ugly remark by Denis Healy (British Chancellor of the Exchequer in the Labor Government) in 1978: "It will squeeze the rich until the pips squeak".
Is it what he thinks he can get away with cramming down our throats? Is it the politics of jealousy which used to be so rare in America? Senator Obama, with his message of hope, should do much better.
If we are to have a true democracy, the burden of paying for our government must be fairly - that means much more evenly - spread. A single rate of income tax is fair ("the more you make the more you pay") with no deductions for favored groups. The only acceptable exception to a true flat tax might be an exemption equal to the poverty line income.
Admittedly the Charitable and Mortgage Interest deductions can not be abolished overnight: they will have to be phased out to avoid major economic disruptions but, with some political courage, that can be achieved. It is likely, however, that it will be necessary to create the political will through swift kicks, administered by the people, to the rear ends of recalcitrant politicians.
Ayn Rand - a ferociously right wing and Libertarian author - writing in her most famous novel Atlas Shrugged, described what happened when the leaders of industry effectively went on strike. The consequences were an economic meltdown - and it could happen in real life. It certainly did in England - an economic basket case in the 1960s and 1970s where no senior managers bothered to work hard and few entrepreneurs existed - because the top tax rate, on even the not very highly paid, was 83% on earned income with an additional 15% surcharge on investment income.
The difference between those rates and confiscation is hard to distinguish. George Harrison of The Beatles put it well in the song Taxman:
Let me tell you how it will be;
There's one for you, nineteen for me.
'Cause I’m the taxman,
Yeah, I’m the taxman.
Should five per cent appear too small,
Be thankful I don't take it all.
'Cause I’m the taxman,
Yeah, I’m the taxman.
We haven't got there yet but we could: the famous Kennedy tax cut reduced the top marginal rate of income tax to only (only?) 70%!
One of the major causes of the American Revolution was the perceived unfairness of taxes levied on the 13 colonies - and their citizens - by an autocratic and uncontrollable government, located 3,000 miles away and not in the slightest answerable to the people. Our government, in Washington DC, is equally isolated from the real world for much of the year, and certainly appears uncontrollable and verging on autocratic.
We don't have to start a new American Revolution, but we should reject all politicians who believe that success - even the modest success of Senator Obama's so-called rich - should be punished.
Saturday, August 23, 2008
Obama and Biden
A successful President is one who is able to assemble, lead, and inspire a team that can achieve his vision. Leadership and inspiration, while necessary, are not sufficient; experience in the management of a large and slow moving enterprise is also critical.
Of course, it is useful to have a vision - and the last President of the United States to have one was Ronald Reagan. His vision included winning the Cold War and reducing tax rates from the confiscatory levels - only modestly reduced by the 1964 Kennedy Tax Cut which took effect after his 1963 death - that had been introduced during World War II.
President Reagan achieved both of these objectives - not least because he had all the necessary personal talents.
I don't see that sort of ability in Senator Obama. He has never held a job where he had to run anything. Nor does he have any significant foreign policy expertise. Given that we live in a world which is as unsettled (and as dangerous) as at any time in the past twenty five years, such experience is essential. He has moved to shore up his foreign policy failings by announcing that he has selected Senator Joe Biden as his choice to be the democratic Party's Vice Presidential nominee. Given the changes in the real - as opposed to Constitutional - powers of the Vice President over the past 16 years, the choice of a running mate should matter greatly to all American citizens.
Senator Biden was elected to the Senate in 1972 at the age of 29. He reached the Constitutionally required minimum age of 30 before he took office in January 1973. His time in the Senate has been marked by competent, albeit not particularly distinguished, service as Chairman of the Senate Judiciary Committee and, also, of the Senate Committee on Foreign Relations. Neither of these posts has required the ability to run a large enterprise - nor have they equipped him with the tools to understand and help the President develop and implement domestic and economic policy.
Foreign policy expertise is readily available for hire. Former Secretaries of State are a dime a dozen, as are Ambassadors to the UN - some of whom are actually knowledgeable and competent, while there are many National Security Advisors and their Deputies who would be happy to return to government. In addition, since the Congress generally leaves foreign policy to the Executive Branch, a former Senator turned Vice President - no matter how distinguished - is of only marginal use in this area.
Notwithstanding the availability of foreign policy talent, the boss still needs the ability and knowledge to set the direction. Senator Obama is not that person.
In addition, many of Senator Obama's problems will be in the areas of domestic (social) and economic policy. The economy is going through a difficult period at the moment and public opinion is whining (former Senator Phil Gramm made a valid point) that a recession - sorely needed to wring out the economic imbalances caused by too many years of Federal Reserve Chairman Alan Bubblespan's cheap money policies - should not be allowed to occur. We should well remember that, without the recession of 1981 - 1982, an 18 year period of growth with low inflation, and only one short recession, would likely not have occurred.
If, as predicted, we see an overwhelming Democratic majority in the House, and a near filibuster-proof majority in the Senate, we can expect some highly populist - and idiotic - legislation that will involve handing out money, that the government does not have or will have to raise in new taxes, to all sorts of noisy but undeserving characters. Expect, too, unfunded mandates to be imposed on States and Municipalities as well as employers. If so, then those of us who have lived within our means will be the ones to suffer.
We can also expect some class warfare style tax increases, on the grounds that the rich should 'pay their fair share'. Such tax increases are unlikely to improve the state of the economy but more on that another day.
Neither Senator Obama nor Senator Biden has any great knowledge of domestic and economic policy. Even highly competent hired hands, whether Treasury Secretaries or Domestic Policy Advisors, rarely have an office in the West Wing and the ability to drop in on the President to give their advice and opinions when it really matters. Expect a White House whose ignorance of economic policy is dangerous to our well being.
President Obama has made his choice. Unfortunately, while it may be the right choice to get him elected, he could have made few worse choices when it comes to governing our great nation.
Of course, it is useful to have a vision - and the last President of the United States to have one was Ronald Reagan. His vision included winning the Cold War and reducing tax rates from the confiscatory levels - only modestly reduced by the 1964 Kennedy Tax Cut which took effect after his 1963 death - that had been introduced during World War II.
President Reagan achieved both of these objectives - not least because he had all the necessary personal talents.
I don't see that sort of ability in Senator Obama. He has never held a job where he had to run anything. Nor does he have any significant foreign policy expertise. Given that we live in a world which is as unsettled (and as dangerous) as at any time in the past twenty five years, such experience is essential. He has moved to shore up his foreign policy failings by announcing that he has selected Senator Joe Biden as his choice to be the democratic Party's Vice Presidential nominee. Given the changes in the real - as opposed to Constitutional - powers of the Vice President over the past 16 years, the choice of a running mate should matter greatly to all American citizens.
Senator Biden was elected to the Senate in 1972 at the age of 29. He reached the Constitutionally required minimum age of 30 before he took office in January 1973. His time in the Senate has been marked by competent, albeit not particularly distinguished, service as Chairman of the Senate Judiciary Committee and, also, of the Senate Committee on Foreign Relations. Neither of these posts has required the ability to run a large enterprise - nor have they equipped him with the tools to understand and help the President develop and implement domestic and economic policy.
Foreign policy expertise is readily available for hire. Former Secretaries of State are a dime a dozen, as are Ambassadors to the UN - some of whom are actually knowledgeable and competent, while there are many National Security Advisors and their Deputies who would be happy to return to government. In addition, since the Congress generally leaves foreign policy to the Executive Branch, a former Senator turned Vice President - no matter how distinguished - is of only marginal use in this area.
Notwithstanding the availability of foreign policy talent, the boss still needs the ability and knowledge to set the direction. Senator Obama is not that person.
In addition, many of Senator Obama's problems will be in the areas of domestic (social) and economic policy. The economy is going through a difficult period at the moment and public opinion is whining (former Senator Phil Gramm made a valid point) that a recession - sorely needed to wring out the economic imbalances caused by too many years of Federal Reserve Chairman Alan Bubblespan's cheap money policies - should not be allowed to occur. We should well remember that, without the recession of 1981 - 1982, an 18 year period of growth with low inflation, and only one short recession, would likely not have occurred.
If, as predicted, we see an overwhelming Democratic majority in the House, and a near filibuster-proof majority in the Senate, we can expect some highly populist - and idiotic - legislation that will involve handing out money, that the government does not have or will have to raise in new taxes, to all sorts of noisy but undeserving characters. Expect, too, unfunded mandates to be imposed on States and Municipalities as well as employers. If so, then those of us who have lived within our means will be the ones to suffer.
We can also expect some class warfare style tax increases, on the grounds that the rich should 'pay their fair share'. Such tax increases are unlikely to improve the state of the economy but more on that another day.
Neither Senator Obama nor Senator Biden has any great knowledge of domestic and economic policy. Even highly competent hired hands, whether Treasury Secretaries or Domestic Policy Advisors, rarely have an office in the West Wing and the ability to drop in on the President to give their advice and opinions when it really matters. Expect a White House whose ignorance of economic policy is dangerous to our well being.
President Obama has made his choice. Unfortunately, while it may be the right choice to get him elected, he could have made few worse choices when it comes to governing our great nation.
Thursday, August 21, 2008
Obama's Dilemma
The problem with being elected President of the Untied States is that you then have to do the job. For that, experience helps - a lot.
During the past twelve years, two Vice Presidents (Gore and Cheney) have become extremely powerful figures because they were able to fill significant gaps in their Presidents' experience.
Senator Obama's experience is vanishingly close to zero in two critical areas.
First, he has never had a job where he had to run anything. The jobs of Community Organizer, Senior Lecturer at the University of Chicago Law School, State Legislator and United States Senator are hardly positions requiring management skills and talent. Second, his foreign policy knowledge is lacking. Although he has been the Chair of the European Sub-Committee of the Senate Committee on Foreign Relations, he is not known for any major legislative or oversight achievements.
The gaps in his resume, then, lead to speculation in the press about possible running mates. Senator Joe Biden and former Senator Sam Nunn are the most frequently mentioned Vice Presidential candidates who can shore up his foreign policy weaknesses. Several State Governors have been mentioned to help him supplement his lack of executive experience.
The problem is that neither Senator Nunn nor Senator Biden have ever run anything. Nor do any of the much touted Governors have any significant foreign policy experience.
The missing player - rarely mentioned as a possible Vice President but eminently qualified - is Governor Bill Richardson of New Mexico. His executive experience also includes service as Secretary of Energy in the Clinton administration and he has foreign policy credentials as Ambassador to the United Nations as well as legislative experience as a Congressman. Then, given that he is of Hispanic descent (through his mother), his selection would seem to be not only obvious but might well attract some non-traditional voters to Obama's cause.
We shall see next week at the Democratic Party Convention beginning on Sunday August 24.
During the past twelve years, two Vice Presidents (Gore and Cheney) have become extremely powerful figures because they were able to fill significant gaps in their Presidents' experience.
Senator Obama's experience is vanishingly close to zero in two critical areas.
First, he has never had a job where he had to run anything. The jobs of Community Organizer, Senior Lecturer at the University of Chicago Law School, State Legislator and United States Senator are hardly positions requiring management skills and talent. Second, his foreign policy knowledge is lacking. Although he has been the Chair of the European Sub-Committee of the Senate Committee on Foreign Relations, he is not known for any major legislative or oversight achievements.
The gaps in his resume, then, lead to speculation in the press about possible running mates. Senator Joe Biden and former Senator Sam Nunn are the most frequently mentioned Vice Presidential candidates who can shore up his foreign policy weaknesses. Several State Governors have been mentioned to help him supplement his lack of executive experience.
The problem is that neither Senator Nunn nor Senator Biden have ever run anything. Nor do any of the much touted Governors have any significant foreign policy experience.
The missing player - rarely mentioned as a possible Vice President but eminently qualified - is Governor Bill Richardson of New Mexico. His executive experience also includes service as Secretary of Energy in the Clinton administration and he has foreign policy credentials as Ambassador to the United Nations as well as legislative experience as a Congressman. Then, given that he is of Hispanic descent (through his mother), his selection would seem to be not only obvious but might well attract some non-traditional voters to Obama's cause.
We shall see next week at the Democratic Party Convention beginning on Sunday August 24.
Wednesday, August 20, 2008
Bicycles as transport rather than as toys.
From the age of eight until the age of nineteen, a bicycle was my primary means of transport. As a result of that experience, I am quite willing to "share the road". I spent those years in England where, at quitting time, it was not unusual for the factory gates to open and allow two thousand workers on bicycles to depart.
Learning to drive in England (early 1960s) involved looking out for bicycles - there were a lot of them - as an automatic part of the process. Riding a bicycle then, also involved strict obedience to traffic laws: lack of such obedience involved swift punishment, usually by parents (it's amazing how they found out so quickly but that was village life) and occasionally by police.
As an aside, my last encounter with the constabulary involved being dragged off to court and convicted of: riding a bicycle with no lights (it was 11 p.m.), riding a bicycle with no brakes, drunk in charge of a bicycle, and conduct liable to be hazardous to other road users (riding drunkenly with my hands in my pockets - but it was a cold night).
In the USA, the situation is really ugly. As a result of high (at least by our standards) fuel prices, there are now more bicycles on the road - or the same number of bicycles making more trips - and the danger increases by the day.
Too many automobile drivers entirely lack situational awareness when it comes to bicycles. Worse, many seem think that it is their right and duty to scare the living daylights out of any bicyclist who is unwise enough to ride at, according to the driver, a ridiculously slow speed.
On the other side of the argument, too many bicyclists seem to believe that traffic laws do not apply to them. They run red lights and stop signs while weaving through traffic without the least consideration of the only law that really matters which is the Gross Tonnage Rule. That you actually have right of way is little consolation when you are on the wrong end of a collision between 5,000 lbs of pickup truck travelling at 45 mph (in a 35 mph zone) and 200 lbs of bicycle and rider travelling at 12 mph.
While bicyclists are entitled to their share of the road, they should remember that the despised drivers of automobiles are the ones who, through registration fees, fuel taxes, and other levies, actually pay for the construction and upkeep of the roads. They should also remember that speed differentials are intrinsically dangerous and that riding at 15 mph on a road posted for 35 mph is a risky activity. Unfortunately, there seems to be a culture among bicyclists that riding on a bike path is a low status activity although, curiously, riding on the sidewalk and scaring the living daylights out of pedestrians is OK.
Aggressive driving is a general problem not just limited to virtual assaults on bicyclists. Bicyclists, however, could seize some of the moral high ground if they were more willing to obey the law and, when possible, take the bike path rather than insisting on their rights to the road.
Perhaps I am old fashioned in hoping for a return of good manners and consideration but it would be nice if both sides of the argument would contribute. Instead we must suffer aggressive drivers and suicidal bicyclists - all of whom consider a middle finger salute to be a normal form of greeting when they meet.
Learning to drive in England (early 1960s) involved looking out for bicycles - there were a lot of them - as an automatic part of the process. Riding a bicycle then, also involved strict obedience to traffic laws: lack of such obedience involved swift punishment, usually by parents (it's amazing how they found out so quickly but that was village life) and occasionally by police.
As an aside, my last encounter with the constabulary involved being dragged off to court and convicted of: riding a bicycle with no lights (it was 11 p.m.), riding a bicycle with no brakes, drunk in charge of a bicycle, and conduct liable to be hazardous to other road users (riding drunkenly with my hands in my pockets - but it was a cold night).
In the USA, the situation is really ugly. As a result of high (at least by our standards) fuel prices, there are now more bicycles on the road - or the same number of bicycles making more trips - and the danger increases by the day.
Too many automobile drivers entirely lack situational awareness when it comes to bicycles. Worse, many seem think that it is their right and duty to scare the living daylights out of any bicyclist who is unwise enough to ride at, according to the driver, a ridiculously slow speed.
On the other side of the argument, too many bicyclists seem to believe that traffic laws do not apply to them. They run red lights and stop signs while weaving through traffic without the least consideration of the only law that really matters which is the Gross Tonnage Rule. That you actually have right of way is little consolation when you are on the wrong end of a collision between 5,000 lbs of pickup truck travelling at 45 mph (in a 35 mph zone) and 200 lbs of bicycle and rider travelling at 12 mph.
While bicyclists are entitled to their share of the road, they should remember that the despised drivers of automobiles are the ones who, through registration fees, fuel taxes, and other levies, actually pay for the construction and upkeep of the roads. They should also remember that speed differentials are intrinsically dangerous and that riding at 15 mph on a road posted for 35 mph is a risky activity. Unfortunately, there seems to be a culture among bicyclists that riding on a bike path is a low status activity although, curiously, riding on the sidewalk and scaring the living daylights out of pedestrians is OK.
Aggressive driving is a general problem not just limited to virtual assaults on bicyclists. Bicyclists, however, could seize some of the moral high ground if they were more willing to obey the law and, when possible, take the bike path rather than insisting on their rights to the road.
Perhaps I am old fashioned in hoping for a return of good manners and consideration but it would be nice if both sides of the argument would contribute. Instead we must suffer aggressive drivers and suicidal bicyclists - all of whom consider a middle finger salute to be a normal form of greeting when they meet.
Sunday, August 17, 2008
Empires - and their collapse
It is my contention that it takes between 100 and 150 years for the political fallout to settle after the collapse of an Empire. If I am right, that would explain many things about the disorder in the World
We are not yet 100 years from the collapse of the Ottoman and Austro-Hungarian Empires following the Great War. The turmoil in the Middle East and the Balkans strongly suggests that the aftereffects still linger.
Next to collapse was the British Empire - beginning with the partition of India in 1948. The death of the British Empire took place in relatively slow motion, unlike the sudden demise of previous Empires, but the consequences are still being felt in many African countries (Zimbabwe, Kenya, Uganda, Nigeria and others), Myanmar (Burma for the traditionalists), India, Pakistan, and several Pacific island nations.
The situation in the Middle East is further exacerbated by the collapse of the [minor] French Lebanon and Syria) and British (Egypt, Palestine, Iraq) Empires which attempted to fill the vacuum during the period between the two World Wars.
Now we have the collapse of the Russian Empire which, as seen in Georgia, will cause ructions throughout the Caucasus and is likely to cause problems in other countries that are former members of the Soviet Union. Since almost all of the countries that are attempting to assert their independence from Russia are significant oil and gas producers, countries through which critical oil and gas pipelines pass, or members of NATO, we must expect that there will be interesting events in the near future and for years to come.
Unfortunately, we have little military ability to influence the outcome and a great need for Russia's assistance in dealing with Iran and North Korea. Instead of bellicose and grandiose posturing, the Bush administration should heed Theodore Roosevelt's adage: "Speak softly and carry a big stick."
Our stick urgently needs to be strengthened and enlarged; speaking softly can be done immediately.
We are not yet 100 years from the collapse of the Ottoman and Austro-Hungarian Empires following the Great War. The turmoil in the Middle East and the Balkans strongly suggests that the aftereffects still linger.
Next to collapse was the British Empire - beginning with the partition of India in 1948. The death of the British Empire took place in relatively slow motion, unlike the sudden demise of previous Empires, but the consequences are still being felt in many African countries (Zimbabwe, Kenya, Uganda, Nigeria and others), Myanmar (Burma for the traditionalists), India, Pakistan, and several Pacific island nations.
The situation in the Middle East is further exacerbated by the collapse of the [minor] French Lebanon and Syria) and British (Egypt, Palestine, Iraq) Empires which attempted to fill the vacuum during the period between the two World Wars.
Now we have the collapse of the Russian Empire which, as seen in Georgia, will cause ructions throughout the Caucasus and is likely to cause problems in other countries that are former members of the Soviet Union. Since almost all of the countries that are attempting to assert their independence from Russia are significant oil and gas producers, countries through which critical oil and gas pipelines pass, or members of NATO, we must expect that there will be interesting events in the near future and for years to come.
Unfortunately, we have little military ability to influence the outcome and a great need for Russia's assistance in dealing with Iran and North Korea. Instead of bellicose and grandiose posturing, the Bush administration should heed Theodore Roosevelt's adage: "Speak softly and carry a big stick."
Our stick urgently needs to be strengthened and enlarged; speaking softly can be done immediately.
Friday, August 15, 2008
Zero Tolerance
One of the worst ideas in recent history is the concept of zero tolerance.
Zero tolerance, when applied to minor crimes and vandalism, has some merit although tagging a rowdy kid with a criminal record may well wreck his future entirely.
In a zero tolerance world, I am not sure that I would have graduated from High School but, if I did, my teenage years would have included a lengthy detour through the criminal justice system.
A belt, applied to a naked rear end by a father, is now considered to be child abuse but has saved quite a few unruly kids from contact with the courts. The bruises on my rear end (Malacca canes and sneakers) have long ago faded but I still remember the lessons taught by them. I didn't like it at the time but now recognize the value.
In the military, the zero tolerance culture results in really poor promotion prospects for those found responsible for mistakes and errors - even by subordinates. That results in Majors doing Captain's jobs and Captains doing Lieutenant's jobs, and so on down the chain of command, lest a subordinate's mistake penalize the supervisor. The same problem exists in many businesses.
The big problem is that most people learn best from their mistakes. Without mistakes, there is little personal growth and minimal innovation.
The zero tolerance culture needs to be opposed and there are two really powerful statements that, if said sincerely and accepted by the boss, will contribute mightily to the greater good. They are:
“I don’t know but I will find out” and “I’m sorry. I was wrong; it won't happen again"
Both of these statements are a sign of strength - not weakness - and they need to be said and accepted more often.
Zero tolerance, when applied to minor crimes and vandalism, has some merit although tagging a rowdy kid with a criminal record may well wreck his future entirely.
In a zero tolerance world, I am not sure that I would have graduated from High School but, if I did, my teenage years would have included a lengthy detour through the criminal justice system.
A belt, applied to a naked rear end by a father, is now considered to be child abuse but has saved quite a few unruly kids from contact with the courts. The bruises on my rear end (Malacca canes and sneakers) have long ago faded but I still remember the lessons taught by them. I didn't like it at the time but now recognize the value.
In the military, the zero tolerance culture results in really poor promotion prospects for those found responsible for mistakes and errors - even by subordinates. That results in Majors doing Captain's jobs and Captains doing Lieutenant's jobs, and so on down the chain of command, lest a subordinate's mistake penalize the supervisor. The same problem exists in many businesses.
The big problem is that most people learn best from their mistakes. Without mistakes, there is little personal growth and minimal innovation.
The zero tolerance culture needs to be opposed and there are two really powerful statements that, if said sincerely and accepted by the boss, will contribute mightily to the greater good. They are:
“I don’t know but I will find out” and “I’m sorry. I was wrong; it won't happen again"
Both of these statements are a sign of strength - not weakness - and they need to be said and accepted more often.
Thursday, August 14, 2008
Are we alone in the Universe?
Science fiction writer Arthur C. Clarke - the man who, in 1948, first conceived of the communications satellite - addressed the question of whether we are alone in the Universe. In the book Visions : How Science Will Revolutionize the Twenty-First Century (1999) by Michio Kaku, he is quoted as saying:
Two possibilities exist: either we are alone in the Universe or we are not. Both are equally terrifying.
I agree.
Two possibilities exist: either we are alone in the Universe or we are not. Both are equally terrifying.
I agree.
Wednesday, August 13, 2008
Russian foreign policy and the invasion of Georgia
Russian Foreign Policy has not changed for five hundred years. Its three critical issues are year round warm water ports, control of the "near abroad", and preventing any single power from dominating Europe.
With respect to the near abroad, Russian objectives include the need for a buffer that, at worst, is friendly and, at best, is totally controlled. In the Soviet era, the expansion of the almost totally controlled "near abroad" provided one of the most substantial buffers ever experienced by Russia.
NATO's purpose, according to Churchill's military adviser Lord Ismay, was to keep the Americans in, the Russians out, and the Germans down.
During the Cold War, Russia's "near abroad" provided reasonably adequate defense from any ground based threat that NATO might pose. Since the fall of the Soviet Union, the liberation of almost all of the countries that comprise the "near abroad", Russia believes that its security is threatened by the fact that a substantial portion of the "near abroad" includes countries that are now NATO members or, like Ukraine and Georgia, are potential candidates for NATO membership.
The current purpose of NATO is unclear and it is not easy for the Russians to regard it as anything other than a threat. It looks suspiciously like the dominant power controlling Europe that Russia wants to avoid at all costs.
Russia is not being entirely irrational here. During the Soviet era, St. Petersburg was 1,200 miles from the nearest NATO territory: now it is only 60 miles.
That brings us to Georgia - a NATO wannabe - which, last week, indulged in an ill-judged and provocative invasion of a breakaway province that is under Russian protection. With America overstretched in Iraq and Afghanistan, NATO is in no position to do anything serious. No one, then, should be surprised that Russia has slapped down a tiresome and uncooperative member of the "near abroad".
The Russian message is clear - and aimed at other members of the near abroad: understand that any commitments on the part of America and NATO are largely worthless. We (Russia) are the regional power; your recognition of of our power and your prompt acquiescence to our desires, as well as compliance with our instructions, is expected.
With respect to the near abroad, Russian objectives include the need for a buffer that, at worst, is friendly and, at best, is totally controlled. In the Soviet era, the expansion of the almost totally controlled "near abroad" provided one of the most substantial buffers ever experienced by Russia.
NATO's purpose, according to Churchill's military adviser Lord Ismay, was to keep the Americans in, the Russians out, and the Germans down.
During the Cold War, Russia's "near abroad" provided reasonably adequate defense from any ground based threat that NATO might pose. Since the fall of the Soviet Union, the liberation of almost all of the countries that comprise the "near abroad", Russia believes that its security is threatened by the fact that a substantial portion of the "near abroad" includes countries that are now NATO members or, like Ukraine and Georgia, are potential candidates for NATO membership.
The current purpose of NATO is unclear and it is not easy for the Russians to regard it as anything other than a threat. It looks suspiciously like the dominant power controlling Europe that Russia wants to avoid at all costs.
Russia is not being entirely irrational here. During the Soviet era, St. Petersburg was 1,200 miles from the nearest NATO territory: now it is only 60 miles.
That brings us to Georgia - a NATO wannabe - which, last week, indulged in an ill-judged and provocative invasion of a breakaway province that is under Russian protection. With America overstretched in Iraq and Afghanistan, NATO is in no position to do anything serious. No one, then, should be surprised that Russia has slapped down a tiresome and uncooperative member of the "near abroad".
The Russian message is clear - and aimed at other members of the near abroad: understand that any commitments on the part of America and NATO are largely worthless. We (Russia) are the regional power; your recognition of of our power and your prompt acquiescence to our desires, as well as compliance with our instructions, is expected.
Tuesday, August 12, 2008
Oil Prices and Speculators
The mainly Liberal Democrats who are excoriating speculators for the high price of oil are notorious for their diligence in the search for scapegoats rather than solutions.
While it is possible to explain the movement in oil prices, from under $70 per barrel at the end of September 2007 to over $113 today, as the market's belated reaction to the reality of supply and demand, it is hard to see the recent price spike - from $110 in early May to $146 in July and, within a month, back to $113 - as anything other than speculative froth. Supply and demand simply do not change that rapidly in the real world - absent an earth shaking event such as a [new and major] war or natural disaster.
Speculators generally perform a useful function. They provide liquidity to markets - allowing both producers and buyers to take out insurance on prices. That service, however, comes at the cost of speculative excess. The result is that prices consistently overshoot - on both the high and low sides - before settling down to the level dictated by supply and demand.
Although the cost of speculative excess is particularly noticeable, the services provided by speculators are valuable enough that we should be cautious in our attempts to regulate them. Chastising them is certainly useful - thank you Liberal Democrats.
Ill considered - even well considered - regulation, however, is likely to run up against one of the guiding principles of the Universe: The Law of Unintended Consequences.
Caution should be our watchword but the almost irresistible need for politicians to be seen to be doing something is a danger. If we are lucky, the election year urge to leave Washington in order to ensure re-election will keep then from hasty action. If we are not lucky, that same imperative will result in poorly crafted legislation which will only result in further economic dysfunction.
While it is possible to explain the movement in oil prices, from under $70 per barrel at the end of September 2007 to over $113 today, as the market's belated reaction to the reality of supply and demand, it is hard to see the recent price spike - from $110 in early May to $146 in July and, within a month, back to $113 - as anything other than speculative froth. Supply and demand simply do not change that rapidly in the real world - absent an earth shaking event such as a [new and major] war or natural disaster.
Speculators generally perform a useful function. They provide liquidity to markets - allowing both producers and buyers to take out insurance on prices. That service, however, comes at the cost of speculative excess. The result is that prices consistently overshoot - on both the high and low sides - before settling down to the level dictated by supply and demand.
Although the cost of speculative excess is particularly noticeable, the services provided by speculators are valuable enough that we should be cautious in our attempts to regulate them. Chastising them is certainly useful - thank you Liberal Democrats.
Ill considered - even well considered - regulation, however, is likely to run up against one of the guiding principles of the Universe: The Law of Unintended Consequences.
Caution should be our watchword but the almost irresistible need for politicians to be seen to be doing something is a danger. If we are lucky, the election year urge to leave Washington in order to ensure re-election will keep then from hasty action. If we are not lucky, that same imperative will result in poorly crafted legislation which will only result in further economic dysfunction.
Sunday, August 3, 2008
Immigration - Legal and Illegal
The situation with respect to immigration - both legal and illegal - across the USA-Mexican border could, perhaps be described in these terms:
"A slow motion, generally non-violent, re-run of the war of 1846 - 1848. This time, however, Mexico is winning."
While the nativists are appalled, we may well not lose. In the late 19th and early 20th centuries, the flood of poor and uneducated immigrants - few of whom spoke English - generated many of the same sentiments and prejudices. Our country benefited greatly then from this influx and, even though politically incorrect multi-culturism will slow down the process, I believe that this new group of immigrants will become the great Americans of tomorrow.
For those with doubts, please re-read these words, written by Emma Lazarus and engraved on the Statue of Liberty:
"Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tost to me,
I lift my lamp beside the golden door!"
"A slow motion, generally non-violent, re-run of the war of 1846 - 1848. This time, however, Mexico is winning."
While the nativists are appalled, we may well not lose. In the late 19th and early 20th centuries, the flood of poor and uneducated immigrants - few of whom spoke English - generated many of the same sentiments and prejudices. Our country benefited greatly then from this influx and, even though politically incorrect multi-culturism will slow down the process, I believe that this new group of immigrants will become the great Americans of tomorrow.
For those with doubts, please re-read these words, written by Emma Lazarus and engraved on the Statue of Liberty:
"Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tost to me,
I lift my lamp beside the golden door!"
Subscribe to:
Posts (Atom)
Posts
