Monday, June 01, 2009

Yugo, Guy

Ask the man who's owned one in the collective sense:
When the Romanian dictator Nicolae Ceausescu decided in the mid-1960s that he wanted to have a car industry, he chose me to start the project rolling. In the land of the blind, the one-eyed man is king. I knew nothing about manufacturing cars, but neither did anyone else among Ceausescu's top men. However, my father had spent most of his life running the service department of the General Motors affiliate in Bucharest.

My job at the time was as head of the Romanian industrial espionage program. Ceausescu tasked me to mediate the purchase of a minimum, basic license for a small car from a major Western manufacturer, and then to steal everything else needed to produce the car.

Three Western companies competed for the honor. Ceausescu decided on Renault, because it was owned by the French government (all Soviet bloc rulers distrusted private companies). We ended up with a license for an antiquated and about-to-be-discontinued Renault-12 car, because it was the cheapest. "Good enough for the idiots," Ceausescu decided....

"Too luxurious for the idiots," Ceausescu decreed when he saw the first Dacia car made in Romania. Immediately, the radio, right side mirror and backseat heating were dropped. Other "unnecessary luxuries" were soon eliminated by the bureaucrats and their workers' union that were running the factory. The car that finally hit the market was a stripped-down version of the old, stripped-down Renault 12. "Perfect for the idiots," Ceausescu approved. Indeed, the Romanian people, who had never before had any car, came to cherish the Dacia.

....Ceausescu was an extreme case, but automobile manufacturing and government were never a good mix in any socialist/communist country. In the late 1950s, when I headed Romania's foreign intelligence station in West Germany, I worked closely with the foreign branch of the East German Stasi. Its chief, Markus Wolf, rewarded me with a Trabant car -- the pride of East Germany -- when I left to return to Romania.

That ugly little car became famous in 1989 when thousands of East Germans used it to cross to the West. The Trabant originally derived from a well regarded West German car (the DKW) made by Audi, which today produces some of the most prestigious cars in the world. In the hands of the East German government, the unfortunate DKW became a farce of a car. The bureaucrats and the union that ran the Trabant factory made the car smaller and boxier, to give it a more proletarian look. To reduce production costs, they cut down on the size of the original, already small DKW engine, and they replaced the metal body with one made of plastic-covered cardboard. What rolled off the assembly line was a kind of horseless carriage that roared like a lawn mower and polluted the air worse than a whole city block full of big Western cars.

After German reunification, the plucky little "Trabi" that East Germans used to wait 10 years to buy became an embarrassment, and its production was stopped. Germany's junkyards are now piled high with Trabants, which cannot be recycled because burning their plastic-covered cardboard bodies would release poisonous dioxins. German scientists are now trying to develop a bacterium to devour the cardboard-and-plastic body.

The FLUBA awaits the Obami.

Never trust anyone over 30

Especially with the future of the auto industry:
It is not every 31-year-old who, in a first government job, finds himself dismantlingGeneral Motors and rewriting the rules of American capitalism.

But that, in short, is the job description for Brian Deese, a not-quite graduate of Yale Law School who had never set foot in an automotive assembly plant until he took on his nearly unseen role in remaking the American automotive industry.

....A month ago, when the administration was divided over whether to support Fiat’s bid to take over much of Chrysler, it was Mr. Deese who spoke out strongly against simply letting the company go into liquidation, according to several people who were present for the debate.

“Brian grasps both the economics and the politics about as quickly as I’ve seen anyone do this,” said Lawrence H. Summers, the head of the National Economic Council who is not known for being patient whenever he believes an analysis is sub-par — or disagrees with his own. “And there he was in the Roosevelt Room, speaking up vigorously to make the point that the costs we were going to incur giving Fiat a chance were no greater than some of the hidden costs of liquidation.”

Mr. Deese was not the only one favoring the Fiat deal, but his lengthy memorandum on how liquidation would increase Medicaid costs, unemployment insurance and municipal bankruptcies ended the debate.

That last sentence would seem to have let the cat out of the bag. This policy isn't about saving GM as much as it is about continuing to hide the insolvency of the agencies that politicians have touted as the 'social safety net' lo these many decades.

The Trouble With Larry

Irwin Stelzer thinks none of this would be happening if Larry Summers was still alive:
The administration, led by GM and Chrysler CEO Barack Obama, also decided to lay hands on the auto industry. First it shortchanged the companies' creditors--pension funds and investors who had lent the -companies money on terms that gave them preferential access to the companies' assets should there be a bankruptcy. What matter contractual obligations when the United Auto Workers is awaiting payback for its support of Obama in the primary and general election campaigns? Surely Summers knows that such a move will make investors more reluctant to lend in the future and inclined to charge higher interest rates to any companies they do finance. Some say Summers sat in on these meetings and either lost the argument--implausible, in the view of those who have jousted with him in the past--or remained silent. Say it ain't so, Larry.

The administration has also promised to lower health care costs by introducing new IT systems and expanding insurance coverage. Virtually every expert says that information technology might be a nice thing--automated records, easily accessible--but at best will have only a trivial effect on costs. And just how expanding coverage can lower costs remains a mystery to most economists. Unless, of course, the administration is planning to ration health care, a nightmarish system that until recently led the National Health Service in Britain to deny treatment to patients suffering from macular degeneration until they were blind in one eye. Summers knows all about these cost figures and the inefficiencies of rationing. Did he decide to go along to get along? Say it ain't so, Larry.

Then there is energy policy. The president says he can make us independent of foreign oil. Summers knows he can't. He knows too that many economists contend fuel efficiency standards are more likely to deny consumers the cars they want than to have any effect on global climate, given the developing countries' plans to build thousands of new coal-fired generating stations. .... Say it ain't so, Larry.

....There's more, but you get the idea. When Barack Obama won the election and began to staff up, those of us who worried that the administration's policies would lean so far in the direction of political pandering as to create serious economic problems took heart when we learned that Larry Summers was to be at the center of policy-making. His fearless intelligence and debating skills would certainly prevent the administration from making terrible, irrevocable policy errors. Christina Romer, chosen by Obama to chair his Council of Economic Advisers, might prefer that appointment to fidelity to her academic research findings--tax cuts are more effective in stimulating an economy than is spending--but surely Larry Summers would not. So great is his reputation that Obama's chief political adviser, David Axelrod, told the press, "I'm not sure we would have gotten him but for the fact that we have a crisis that is equal to his talents."

Many of us joined Axelrod in praising Obama for landing Summers. And those who know him even slightly had no doubt that he has the good sense to treat fools slightly more kindly than his reputation would lead one to expect. So he could be heard. But we wonder if his voice of sanity has gone the way of Paul Volcker's, stifled and ignored. Say it ain't so, Larry.

Sunday, May 10, 2009

Home on the Deranged

Steven Malanga details the decades long obsession American politicians have had with home ownership, and its unintended consequences. Predictably, no one seems to have learned:

...before we’ve even worked our way through this crisis, elected officials and policymakers are busy readying the next. Barney Frank, the Massachusetts congressman who serves as chair of the House Financial Services Committee, has balked at proposals to privatize Fannie Mae and Freddie Mac, which would eliminate their risk to taxpayers and their susceptibility to political machinations.


Why? Simple: the government uses them to subsidize the affordable-housing programs that Frank supports. California congressman Joe Baca, head of the Congressional Hispanic Caucus, also opposes reining in affordable housing lending. “We need to keep credit easily accessible to our minority communities,” he asserts.

Republicans and Democrats, meanwhile, have scrambled to reignite the housing market through ill-conceived tax credits and renewed federal subsidies for mortgages, including the Obama administration’s mortgage bailout plan, which recalls the New Deal’s H[ome]O[wner's]L[oan]C[orp].

As Harvard economist and City Journal contributing editor Edward Glaeser has observed, mortgage lenders have finally “recovered their sanity”—only to have government dangling subsidized low interest rates and tax credits in front of them and their potential customers all over again. Behind these efforts is a fundamental misconception among politicians that housing drives the American economy and therefore demands subsidy at virtually any cost.

Wednesday, May 06, 2009

Emperor...No Clothes

We think Joe the Plumber and Cliff Asness would get along just fine:
Here's a shock. When hedge funds, pension funds, mutual funds, and individuals, including very sweet grandmothers, lend their money they expect to get it back. However, they know, or should know, they take the risk of not being paid back. But if such a bad event happens it usually does not result in a complete loss. A firm in bankruptcy still has assets. It’s not always a pretty process.

Bankruptcy court is about figuring out how to most fairly divvy up the remaining assets based on who is owed what and whose contracts come first. The process already has built-in partial protections for employees and pensions, and can set lenders' contracts aside in order to help the company survive, all of which are the rules of the game lenders know before they lend. But, without this recovery process nobody would lend to risky borrowers. Essentially, lenders accept less than shareholders (means bonds return less than stocks) in good times only because they get more than shareholders in bad times.

The above is how it works in America, or how it’s supposed to work. The President and his team sought to avoid having Chrysler go through this process, proposing their own plan for re-organizing the company and partially paying off Chrysler’s creditors. Some bond holders thought this plan unfair. Specifically, they thought it unfairly favored the United Auto Workers, and unfairly paid bondholders less than they would get in bankruptcy court. So, they said no to the plan and decided, as is their right, to take their chances in the bankruptcy process. But, as his quotes above show, the President thought they were being unpatriotic or worse.

Let’s be clear, it is the job and obligation of all investment managers, including hedge fund managers, to get their clients the most return they can. They are allowed to be charitable with their own money, and many are spectacularly so, but if they give away their clients’ money to share in the “sacrifice”, they are stealing.

Clients of hedge funds include, among others, pension funds of all kinds of workers, unionized and not. The managers have a fiduciary obligation to look after their clients’ money as best they can, not to support the President, nor to oppose him, nor otherwise advance their personal political views. That’s how the system works. If you hired an investment professional and he could preserve more of your money in a financial disaster, but instead he decided to spend it on the UAW so you could “share in the sacrifice”, you would not be happy.

....Let’s also mention only in passing the irony of this same President begging hedge funds to borrow more to purchase other troubled securities. That he expects them to do so when he has already shown what happens if they ask for their money to be repaid fairly would be amusing if not so dangerous. That hedge funds might not participate in these programs because of fear of getting sucked into some toxic demagoguery that ends in arbitrary punishment for trying to work with the Treasury is distressing. Some useful programs, like those designed to help finance consumer loans, won't work because of this irresponsible hectoring.

Careful what you wish for, UAW

NYU's Thomas Cooley says, you'll be sorry:
Government interference in the normal conduct of business has had a chilling effect on financial markets and threatens the progress of the recovery.

....Investors, other than the banks who desperately needed TARP funds for survival, are leery of any program that uses them. Anyone who took TARP funds has been subject to government interference in managerial decisions. The restrictions on bonuses and executive pay have been widely discussed in the media. Less well known are restrictions on the banks' ability to hire foreigners, and the constant harassment by Congress over internal management decisions on everything from the use of private aircraft to the locations of conferences. Some of these concerns are well justified, of course, but it wasn't clear ex-ante what all of the rules were and it isn't clear ex-post either.

....The Obama administration has shown repeatedly that it is willing to change the rules and even challenge the sanctity of contracts in the interests of its political agenda. The best, most recent example is the Chrysler restructuring.

The administration decided to tilt the restructuring in favor of the unions. The government proposed giving the United Auto Workers' retiree health fund a 55% equity stake in Chrysler--more than the combined stakes of Chrysler's merger partner, Fiat, or the other secured creditors that are owed roughly $7 billion. When some of the secured creditors, who were offered 30 cents on the dollar, balked, they were attacked by Obama as speculators.

....Citi, JP Morgan Chase, Goldman Sachs and Morgan Stanley, all major recipients of TARP Funds, all deep in the pocket of the Treasury, agreed to the administration's plan. So it looks like bankruptcy law will take a back seat to social policy.

There is at least some poetic justice in this outcome. The unions, whose years of work rules, and pension and health care deals helped sink the company, will have to eat their own cooking from now on. But their future success needs not only labor but capital.

Why would private capital get involved when the rules of the game are so capricious? No one would take that gamble when it is clear that, in dealing with the government, private capital will always take a back seat to politically powerful entities.

Sunday, May 03, 2009

Cheaters Never Prosper?

It seems their enablers do:
At the Ashley Madison agency, which revels in the motto, "Life is short. Have an affair," the global economic downturn is proving a boon for business.

....the message is hitting home as the economy reels, according to Noel Biderman, the company's founder and chief executive.

Membership has soared from one million to 3.6 million in just 12 months, and he expects another surge after the company launched a service allowing members to access the site from their mobile phones. The innovation is aimed at would-be cheaters who are nervous about leaving evidence of their infidelity on their computer at home or work.

Mr Biderman said that many couples who would otherwise have divorced were seeking affairs at the moment because of the cost of hiring lawyers and the difficulty of selling the marital home.

....It is free to register with Ashley Madison, but members pay with purchased credits to send messages to other users. The agency charges $49 (£33) for 100 credits or $249 for 1,000 credits and 50 credits buys 60 minutes of instant messaging time or 10 emails to different users.

They shoot horses, don't they?

If, they don't, they might start, in Indian country:
WARM SPRINGS INDIAN RESERVATION —
Here on this reservation in north-central Oregon, horses are woven deeply into daily life. They are traditionally used by tribal members in their work and their culture, whether it be for rodeos or horse parades.

Gathering, breaking and selling wild horses has long been part of the tribe's economy. Horses that don't make the grade are sold for slaughter.

But the nation's final three slaughterhouses were shuttered two years ago, and a perfect storm has formed with a glut of horses, lack of a market and economic recession.

Tribal rangeland managers now estimate 20,000 wild horses are overrunning Indian Country in Washington, Idaho and Oregon, with an annual foal crop raising the population by some 20 percent a year.

....Agricultural and rangeland experts from five tribes have been meeting quietly since last winter to explore options to manage horse populations on reservation lands. Their ideas, still in discussion, run the gamut.

The most controversial: opening a slaughter plant at the Warm Springs reservation, and maybe someday packing the meat for human consumption overseas, if the regulatory hurdles can be cleared and economics pencil out.

....There used to be a thriving horse market in this country, with buyers bidding on horses for processing plants in Stanwood; Maytown, Thurston County; and more than 20 other plants across the country, supplying an eager trade, particularly in Europe.

But the country's remaining three horse slaughterhouses, in Illinois and Texas, closed in 2007 after a sustained campaign by animal-rights activists that resulted in Congress forbidding USDA inspection of horse meat for human consumption. That ended any legal commercial packing industry for horse meat in this country.

Still, there is a demand for horse meat, particularly in Europe. But with no packer competition in the U.S. to supply it, and a glut of horses, foreign packers can set their price.

Trucking the animals long distances to slaughterhouses in Canada and Mexico also means buyers will take only the fattest, biggest animals.

For the sick, the old, and the skinny, today there is often no market at any price. Buyers who remember paying 70 cents a pound at auction are today paying as little as 6 cents a pound — if the packers will even take the animal.

....The bottom has fallen out of the horse market just as the recession is driving even owners of pedigreed, suburban stock to unload animals they can't afford to care for, overwhelming rescue and shelter operators.

It's the same story for the U.S. Bureau of Land Management, which is struggling to feed and care for some 30,000 wild mustangs gathered from public rangelands and put out to pasture in the Midwest in deference to opponents of slaughter.

The BLM is paying $27 million this year alone to feed and care for wild horses living out their days at taxpayer expense. With another 30,000 or so more wild mustangs still roaming the range, multiplying every year, the costs are growing. So far, the BLM has no solution to the problem.

Hold the Phone!

At the University of Washington, the PhDs are in...but their telephones are out:
"I think we're all aware that we're living through events that in 10 or 20 years we'll be talking about in our classes," he said.

He's referring to the day they took his telephone away.

[Richard] Kielbowicz, whom I had to reach by e-mail, is a professor at the University of Washington's Department of Communication. These are lean times at the UW, so to save money this department that specializes in how society exchanges information has gotten rid of its landline phones.

....Most professors have personal cellphones, so they're hardly shut off from the world. Still there are some who feel the demise of the landline phone is sad.

....On the other hand, the relics never rang anymore.

Kielbowicz, who teaches a course in the history of communication technology from the Gutenberg press to the World Wide Web, says his office phone would ring maybe once every two weeks. Calls became so rare that he began to view any that did come in with trepidation.

"Students no longer call on the phone, ever," he said.

Friday, May 01, 2009

Republican Optimist, Thy Name Is...

Mitch Daniels, governor of Indiana:
In Indiana, Republicans are the party of change and reform; ask anybody -- our opponents, the press, everybody. In the rhythm of life here, four years ago we replaced a 16-year regime that had gone stale.

And so we are the party that restored fiscal integrity. We are the party that addressed health care for the uninsured. We are the party that rebuilt an attractive business environment. We are the party that cleaned up the ethics issues in government -- that and much more. We attacked our infrastructure problem in a novel and taxpayer-friendly way.

....you know, the results are in -- and incidentally, we just won with the largest vote total in the history of elections in our state for any office any year.

....I guess what I'm saying is that when Indiana Republicans meet, I always tell them we cannot control what the party looks like in other places or nationally, but here in Indiana if we don't remain the party always defining the agenda, bringing the new ideas and standing for constructive change, then people will excuse us from duty. And they should. ...

People want to know first of all that you hear them and understand what's going on in their lives. I work at this incessantly -- I was riding all over Salden, Indiana, on my motorcycle Saturday -- and that you have some thoughts about how you make life better, more secure for them. Now, those thoughts can be animated by what we consider Republican principles, and that's fine. In other words, I don't think fiscal prudence went out of style; in fact, people are rediscovering it themselves, right? Save more, spend less -- and I think they expect government to emulate that.

When we addressed health care for the uninsured, or insurance for those without, it's a very free-market solution -- it's basically HSA's for poor people -- and it's extraordinarily popular. I had a lady hugging me and crying down in a coffee shop in Connorsville Saturday morning because she got coverage -- I've had this experience a thousand times -- she got coverage and she couldn't possibly have had it any other way. I just think that the image problems we have are very real, but also addressable, by a Republican Party that goes out of its way to show that it cares about average people and the least advantaged.

Let me just go off on another one my little sermons I always give. Here's a political fact of life: You can be a blue-blood, silver spoon, coastal elitist, and if you have the Democratic label, you start with the presumption that you are connected to average folks. And the Republicans start with the negative presumption. So don't whine about it being unfair, just recognize it and go work on it.

Thursday, April 23, 2009

Fat So?

Life is like a box of chocolates, except you do know what you're getting in this case:
Consumers appear to be comfort eating their way through the recession if the surge in profits of U.S. chocolate giant Hershey is anything to go by.

The firm, which makes Hershey's Kisses and Kit Kat, today posted results for the first quarter of the year, revealing profits had jumped 20per cent annually.

Consumer psychologists are suggesting people could be using chocolate bars as a relatively cheap pick-me-up during the economic downturn.

Tuesday, April 21, 2009

No Mas

Britain expects every gardener to do her duty:
Householder Sandra Smith has been ordered to cover up her garden gnomes after complaints that the naked ornaments were upsetting local children.

The gnomes, one male and two female, have stood in Mrs Smith's front garden for around 15 years in Hunnington in the West Midlands.

The grandmother has been forced to put clothes on the ornaments after a neighbour complained to Bromsgrove District Council and an officer phoned her.

Monday, April 20, 2009

Growth Industry

The ghost of Eleanor Roosevelt makes a comeback in Seattle:
There's a bumper crop of new gardeners out there.

Business is booming at nurseries all [over] the Puget Sound [area], "It's easily been a 25 percent increase, if not more, this year in seed sales. Seed sales have been definitely huge for us," said Joe Abken of Sky Nursery in Shoreline.

And it's not just the brick and mortar stores. Gardening expert Ed Hume says his online seed sales in February were up 40 percent. Something he attributes to the current economic situation, "When you get a downturn in the economy, then the vegetable seeds start to sell."

....Gardening advocates, who have long struggled to get America grubby, have dubbed the newly planted tracts "recession gardens" and hope to shape the interest into a movement similar to the victory gardens of World War II.

Those gardens, modeled after a White House patch planted by Eleanor Roosevelt in 1943, were intended to inspire self-sufficiency, and at their peak supplied 40 percent of the nation's fresh produce, said Roger Doiron, founding director of Kitchen Gardeners International.

The National Gardening Association estimates that a well- maintained vegetable garden yields a $500 average return per year. A study by Burpee Seeds claims that $50 spent on gardening supplies can multiply into $1,250 worth of produce annually.

Battery Up

The Chinese expect their executives to take one for the team:
Chinese companies, such as BYD, have been lauded for developing advanced batteries that could power a revolution in motoring.

BYD, a former battery maker, was the first company in the world to start selling a heavily-electrified hybrid car last December, easily beating larger rivals such as Toyota to the market.

....The Chinese government has also committed to funding new technologies, such as BYD's iron-phosphate-based lithium ion batteries, with £1bn of research subsidies.

In a bid to demonstrate the safety of his batteries to the environment, Wang Chuan-Fu, BYD's chief executive, has actually drunk a vial of his own battery fluid.

Wednesday, April 15, 2009

Not easy being green

King County, Washington learns the cost of good intentions:
King County has agreed to pay $3.5 million to a former Seattle man and his wife after the man suffered a permanent brain injury when he was thrown from his bicycle on a road east of Redmond.

Lawyers for Jeffrey Totten and his wife Danielle Leavell said the county was at fault because it promoted Novelty Hill Road as a bike route but failed to maintain it in a safe condition.

....Physically, emotionally and cognitively disabled, Totten will never be able to work again. A Navy veteran, he bicycled daily from his home in Seattle's Fremont district to the energy firm where he worked in Issaquah.

The accident occurred while on a longer training ride with friends.

....John Christensen, an attorney for Totten and Leavell, said the family would have asked for more money if the case had gone to a jury.

....Christensen said Totten was put in danger because of a lack of communication between the county Parks and Recreation Division, which promoted Novelty Hill Road in online and printed maps as a bike route, and the Road Services Division, which allowed a hole around the survey marker to grow deeper with successive paving jobs.

Leavell said her husband was training for the 700-mile Paris-Brest-Paris bike event when the accident occurred.

Friday, April 10, 2009

Eliminate the Negative

Then, accentuate the positive, with a little help from a future POTUS, and go on to direct some pretty good movies:
Mr. [Edward] Dmytryk's story was a searing indictment of the [Communist] party. He described being part of a conspiracy to break up the American Federation of Labor in Hollywood and to replacing it with unions controlled by communists. He revealed that the party bullied filmmakers into molding the editorial content of pictures in keeping with the party line.

He also said that the party had twisted his legal battle into a First Amendment issue so as to demonize congressional investigations. "It was like everything else the communists do," he told the Saturday Evening Post. "They would go into a lynching case, but instead of trying to help the Negroes, what they are really after is to use the incident to stir up still more trouble. The Negroes don't matter -- they're just a means to an end."

[Ronald] Reagan was emphatic that Mr. Dmytryk go public. When Mr. Dmytryk agreed, Reagan built a coalition of liberals and conservatives to champion him. The team purchased a full-page ad in the Hollywood Reporter. "The Communist Party is now trying to destroy Edward Dmytryk," it read. "We will be surprised if there are not other attacks by the Party on other former communists who have the guts to stand up and be counted and to tell the truth."

Reagan argued to friends and colleagues that Mr. Dmytryk ought to be embraced for breaking with the Stalinists. The Reagan team even vouched for Mr. Dmytryk when he applied for life insurance.

Monday, April 06, 2009

The Coase File

Green power, the salvation of the Obamanation, has a few problems of its own:
Wind turbines may supply power without pollution but they are also generating complaints about noise and even possible health effects for people who live near them.

Dan Williams says the 240-foot-tall turbines he can see from his hilltop home near Boardman in Eastern Oregon make so much noise they keep him awake at night.

Williams is among neighbors along Highway 74 demanding that Morrow County enforce state noise regulations on the Willow Creek Wind Energy Project or revoke its land-use permit.

The 40-year-old construction contractor told The Oregonian newspaper in Portland that wind-energy companies downplay the noise.

"They said this is going to be about as loud as your refrigerator in your house, which is a crock," he said.

....Other critics, including some in Oregon, cite work by a New York doctor who coined the term "wind turbine syndrome" to describe effects such as headaches, dizziness and memory loss of living near the machines.

"This thing is not rare," Dr. Nina Pierpont of Malone, N.Y., said of the syndrome.

....another resident of the area, Mike Eaton, agrees with Williams and other neighbors who complain about the noise and vibrations from the turbines.

The retired 61-year-old furniture maker said the turbines give him nausea by aggravating inner-ear and balance problems he's had since a 1966-67 tour in Vietnam subjected him to the constant pounding of an Army 155-mm artillery piece.

"I cannot live where I'm living now with these decibels and vibrations," he said.

Thursday, April 02, 2009

France: Danny Devito no genius!

The star of Other People's Money probably wouldn't do too well in this environment:
PARIS — When negotiations over the revamping ofCaterpillar’s operations in the French city of Grenoble broke down this week, the workers did what more and more of their countrymen are doing these days: They took their bosses hostage.

It was the fourth such incident in France in the last month.

This week, Fran├žois-Henri Pinault, the chief executive of PPR, the group that owns Gucci, was trapped by a group of employees who surrounded his car and blocked the road with garbage cans.

In two other incidents last month, workers at a 3M plant held their boss for more than 24 hours in a labor dispute, and workers at a Sonyplant held their boss overnight to gain better severance packages.

While detaining company executives against their will is not new in France, the tactic has been used only sparingly. But French labor policy experts say they expect more such actions because the despair and anxiety that drive employees to such acts is increasing as the labor market worsens.

“The traditional way of holding a strike is to occupy the workplace, showing that ‘it’s our company, too,’ ” said Antoine Lyon-Caen, a professor of comparative labor law at the University of Paris-Nanterre. “It’s not unheard-of that the managers get taken hostage, but it has been very rare.”

Wednesday, April 01, 2009

When Bernie Went Ponzi

Former head of the NYSE, Richard Grasso, speculates it was when the investment world went penny wise instead of 1/8 foolish in the late 90s. Which eliminated a very lucrative anomaly in trading, which Bernie Madoff had been exploiting:
How would you describe it to a layman?

His broker-dealer, Bernard Madoff [Investment] Securities, executed orders in Big Board-listed stocks away from the Big Board that were given to that broker-dealer by other broker-dealers in return for payment from order flow. He would pay a penny a share to many of the regional broker-dealers in the U.S. to effectively buy their order flow. And in return, he would execute those orders in-house, at Madoff [Securities], and take the risk of the offset—meaning that when he had an inventory, he would lay that inventory or sell that inventory back to the primary markets, principally to the NYSE. And when he had an exposure as a result of being short, he would cover, or buy shares to cover his risk on the primary markets. The broker-dealers who gave him that order flow effectively got a penny a share.

....When you saw what he was doing, did it seem to be profitable to you?

Extraordinarily profitable, because remember during the period of time when he was doing it, the minimum price variation was 12.5 cents—meaning the tightest the spread could be was separated by an eighth of a dollar, which meant that if he paid a penny coming in and paid a penny going out—meaning a penny to the buyer and a penny to the seller—it was potentially 10.5 cents of profit for the Madoff organization.

But that good thing came to a halt:
And how long did he get away with this?

Oh, I would say 20-plus years. You see, what killed that business was when we went to pennies. Because you crush the spread and you crush costs. And there’s no more opportunity for him to pay a penny coming in if the market is a penny bid offered at two cents.

Right. What year was that?

We started that process in 1997 by going from an eighth to a sixteenth, which, you know, took 50 percent of the profitability opportunity out. And then, by 1999, we went to a penny.

So could that have been the first problem he had?

Yes, I don’t think there’s any doubt that the economics of his primary business evaporated.

Monday, March 30, 2009

But everyone knew her as Nancy

It's adults only in some libraries, thanks to the Speaker of the House of Representatives:
In February, an overzealous law governing lead in products resulted in toys going from store shelves to the trash heap. Now, confusion over how the rules affect children's books has led some libraries to rope off kids' sections.

....Older books pose hardly any danger, according to safety experts at the Centers for Disease Control. The problem is the ambiguity in a law that leaves businesses facing lawsuits if they can't prove their products are safe. In addition to libraries, thrift stores, church bazaars and small batch toymakers are also unclear what they can and can not sell. Makers of bicycles and ATVs have pulled youth models -- designed to increase safety -- off the showroom floor at a cost of hundreds of millions of dollars.

Nancy Pelosi boasted last summer that the toy safety law would mean products weren't merely made differently in the future but would be removed from the shelves today. That's the real source of this mayhem, as she was amply warned at the time by Democrat John Dingell, among others. Ms. Pelosi prevailed, and now the harm to thousands of businesses, charities and even public libraries is manifest. Since the House Speaker won't admit a mistake and fix the law, the [Consumer Products Safety Commission] must do what it can to prevent more damage to the already challenging economy.

Sunday, March 29, 2009

Burma Shave

There's nothing new under the road that meets the rubber:
Don't be surprised if you see Col. Sanders out filling potholes. In an unusual cause-marketing push, KFC is tackling the pothole problem in Louisville, Ky. in exchange for stamping the fresh pavement with "Re-freshed by KFC," a chalky stencil likely to fade away in the next downpour.

"This program is a perfect example of that rare and optimal occurrence when a company can creatively market itself and help local governments and everyday Americans across the country," said Javier Benito, exec VP-marketing and food innovation at KFC.

Louisville Mayor Jerry Abramson noted in a statement that budgets are tight for cities across the country, and finding funding for road repairs is a dirty job. "It's great to have a concerned corporation like KFC create innovative private/public partnerships like this pothole refresh program."

The KFC program appears to be part of a growing body of consumer-service marketing that connects in a meaningful way. This past holiday season, Charmin provided a public restroom in Times Square for the third year running. The company has also developed anapplication for iPhone and BlackBerry that helps consumers find toilets when the need arises.Samsung has installed electrical charging stations in many major airports to help travelers stay connected while in limbo.

Perhaps most importantly, while KFC seems more suited to pot pies than potholes and efforts like these are unlikely to sell chicken sandwiches in the short term, the company is likely to build a reservoir of goodwill among the general population -- particularly when they arrive at the pothole they've gotten used to swerving around.

Wednesday, March 25, 2009

The Barack Obama Doll

When you pull its string, it says, 'Math is hard'.
In that sense, what it would do is it would equalize -- when I give $100, I'd get the same amount of deduction as when some -- a bus driver who's making $50,000 a year, or $40,000 a year, gives that same $100. Right now, he gets 28 percent -- he gets to write off 28 percent. I get to write off 39 percent. I don't think that's fair.

That is, of course, the flip side of progressive income tax schemes. High income people pay higher marginal tax rates and thus have higher incentives to donate to charity as a result. Obama seems to be decrying the unfairness of higher tax rates to people who pay lower rates.

But, it gets worse for Obama as the questioner follows up:
QUESTION: It's not the well-to-do people. It's the charities. Given what you've just said, are you confident the charities are wrong when they contend that this would discourage giving?

OBAMA: Yes, I am. I mean, if you look at the evidence, there's very little evidence that this has a significant impact on charitable giving.

About the evidence, Obama is wrong--as Tom Maguire has noted--there is such evidence.

However, this morning in the NY Times, carries an open letter that says that ain't Jake:
...I have decided to donate 100 percent of the effective after-tax proceeds of my retention payment directly to organizations that are helping people who are suffering from the global downturn. This is not a tax-deduction gimmick; I simply believe that I at least deserve to dictate how my earnings are spent, and do not want to see them disappear back into the obscurity of A.I.G.’s or the federal government’s budget.

....On March 16 I received a payment from A.I.G. amounting to $742,006.40, after taxes. In light of the uncertainty over the ultimate taxation and legal status of this payment, the actual amount I donate may be less — in fact, it may end up being far less if the recent House bill raising the tax on the retention payments to 90 percent stands. Once all the money is donated, you will immediately receive a list of all recipients.

It would only be far less if Obama gets his way and reduces the deduction for charitable deductions, because Mr DeSantis can, as of the law now, donate the entire amount of the bonus prior to taxes. But, it seems that confiscatory taxes do have the expected incentive, contrary to what the President said in his news conference.




Happy as a Pig in Slop

Barack Obama backer and financial supporter of the Democrats squeals in delight:
A hedge fund manager who predicted the global credit crunch has said the financial crisis has been 'stimulating' and the culmination of his life's work.

George Soros, who predicted the global financial crisis twice before, was one of the few people to anticipate and prepare for the current economic collapse.

Mr Soros said his...decision to come out of retirement in 2007 to manage the [Quantum] fund made him $US2.9 billion.

And while the financial crisis continued to deepen across the globe, the 78-year-old still managed to make $1.1 billion last year.

'It is, in a way, the culminating point of my life’s work,' he told national newspaper The Australian.

Soros is one of 25, top hedge fund managers from across Wall Street who have defied the credit crunch crisis to reap a total of $11.6billion (£7.9bn) last year.

It shall be a crime...

...not to drink small wine:
Pubs will be forced to sell wine in smaller glasses as part of a new Government crackdown on binge drinking.

No word yet on how many hoops the three hoop pot will need to have:
Be brave, then; for your captain is brave, and vows reformation. There shall be in England seven halfpenny loaves sold for a penny: the three-hooped pot; shall have ten hoops and I will make it felony to drink small beer: all the realm shall be in common; and in Cheapside shall my palfrey go to grass: and when I am king, as king I will be,—

Tuesday, March 24, 2009

Well, Do you feel lucky?

Do, ya, Mr. Yamaguchi:
A man of 93 has become the first person certified as a survivor of both the U.S. atomic bombs dropped on Japan at the end of the Second World War.

Tsutomu Yamaguchi appears to be the only person in history to have survived not one, but two atomic bomb blasts.

....Yamaguchi was in Hiroshima on a business trip on August 6, 1945, when a U.S. B-29 dropped an atomic bomb on the city.

He suffered serious burns to his upper body and spent the night in the city.
Traumatised, he then sought the refuge of his hometown - Nagasaki.

With devastating timing, he arrived just in time for the second attack, city officials said.

The Side Walk to Nowhere

Coming to a neighborhood near you, paid for by you, if you live in Seattle:
Jesus Barajas wanted granite countertops and hardwood floors but is settling for Formica and carpet. Instead of hiring professional house painters and landscapers, he now plans to do the work himself.

The soured economy is part of the reason Barajas is downsizing his dreams for the new, 2,400-square-foot home he's building on property he's owned for nearly 30 years. Mostly, though, he's cutting back on amenities to pay for construction of a sidewalk outside his front door.

The price tag: nearly $15,000 for a 60-foot strip of asphalt.

Seattle officials admit Barajas is an unintended target of a year-old city ordinance meant to force developers to provide infrastructure improvements in the city's 22 designated urban villages.

....Barajas, a janitor for King County Metro since 1990, and his wife, Maria, a housekeeper at a downtown hotel, have saved for 12 years to afford the down payment on their $250,000 construction loan.

"I just want something to live comfortable after I retire," said Barajas, 61, adding that the new house will be his teenage daughter's inheritance.

The financial sting of building a sidewalk is all the more painful because Barajas wouldn't need one if he lived on the west side of 32nd Avenue South, instead of the east side. That's because the western boundary of the MLK at Holly Street urban village is the center line of Barajas' narrow residential street.

....Homebuilder Olivier Prock has spent countless hours trying to negotiate with city staffers on Barajas' behalf. ....

...he...has to pay for an engineer, a surveyor and an excavator. He also has to pay for a transportation-department review and inspection, along with traffic control while the sidewalk is built and street cleaning after it's done. By Prock's estimate, the sidewalk — measuring 60 feet long and 6 feet wide with a 5-foot-wide planting strip and curb abutting the road — will cost $13,920 to $14,420.

"At first I thought they were joking, I thought they misread the code," Prock said,....

The last new home on Barajas' street was built 10 years ago, he said. At that rate, Prock figures it could take 100 years or longer for a continuous sidewalk to be built.

"We'll all be dead and buried, and by that time, Mr. Barajas' sidewalk would have outlived its useful life," he said.

Monday, March 23, 2009

Sweden to Trollhattan; Drop Dead

General Motors will soon abandon Saab to its fate, which doesn't appear to be socialism:
...the Swedish government has responded to Saab's desperate financial situation by saying, essentially, tough luck. Or, as the enterprise minister, Maud Olofsson, put it recently, "The Swedish state is not prepared to own car factories."

Such a view might seem jarring, coming as it does from a country with a reputation for a paternalistic view of workers and companies. The "Swedish model" for dealing with a banking crisis — nationalizing the banks, recapitalizing them and selling them — has been much debated lately in the United States, with free-market defenders warning of a slippery slope of Nordic socialism.

But Sweden has a right-leaning government, elected in 2006 after a long period of Social Democratic rule, that prefers market forces to state intervention and ownership. That fact has made the workers of Trollhattan wish the old socialist model were more in evidence.

....Swedish officials have condemned what they see as protectionism by other European countries that have pledged to prop up their own failing car industries. They have also been scathing about General Motors, Saab's owner, and the last thing they want is to seem to be bailing out a despised foreign company.

Struggling for its own survival, G.M. has said it will completely pull out of Saab by the end of 2009, a course that Ms. Olofsson, the enterprise minister, described as tantamount to declaring "that they wash their hands of Saab and drop it into the laps of the Swedish taxpayers."
She said: "We are very disappointed in G.M., but we are not prepared to risk taxpayers' money. This is not a game of Monopoly."

Saab lost about $343 million last year. It is now going through a Swedish process known as reorganization, a step short of bankruptcy, as it tries to persuade its creditors to prop it up while it looks for a buyer. Joe Oliver, a spokesman, said in an interview that "around six serious investors," from Sweden and abroad, had expressed interest.

Sunday, March 22, 2009

Beginning to see the light

And, it's not at the end of the tunnel:
Obama seems incapable of balancing the need to be a national leader and his childish desire to retain his image as the uber cool dude he so clearly believes that he is.

....Obama has never run anything other than his presidential campaign. He doesn't know the difference between governing and campaigning and he's sticking with what he knows.

....The most striking aspect of the Leno appearance is that while he's all smiles and self-regard, Obama is flat out not funny.

....He speaks like the kind of lecturer who puts their students to sleep. His first prime time press conference (there is another coming this week) was colossally dull, with rambling ten minute answers.

Still don't believe that Obama is the new [Jimmy] Carter? Michael Wolff writes: "It's instructive and humorous to remember that Carter ran a brilliant campaign that succeeded largely because his voice was new. Simple, direct, basic, human. And then, of course, he turned into a sad-sack twit."

Sound familiar? That sums up Obama rather well right now.

Not over til...


It's over, RIP:
As her performance on Big Brother made clear, her years of formal education had left Jade Goody with little knowledge. She thought that a ferret was a bird and abscess a green French drink; that Pistachio painted the Mona Lisa; that Sherlock Holmes invented the flush lavatory; that East Anglia ("East Angular" in Jade-speak) was abroad; and that Rio de Janeiro was "a bloke, innit?"


She eventually attended Bacon's College in Rotherhithe – one of Britain's first City Technology colleges. Following her first appearance on Big Brother, the college felt constrained to emphasise that its exam results had improved since Jade left. ....

After leaving school, Jade eventually found employment as a dental nurse. When she applied for a place in the Big Brother house, however, she was up to her ears in debt, had recently been evicted from a flat in Rotherhithe over £3,000 of unpaid rent and was facing jail over an unpaid council tax bill.

....Given Jade Goody's status as a media creation, it was perhaps inevitable that when stories began to circulate of a "cancer scare", some assumed it was just another tasteless publicity stunt. That did not prove to be the case. After her initial diagnosis last year, it quickly became clear that her cancer was at an advanced stage. Radical surgery failed to stem its progress and early last month she was told it was terminal.

There was time for one more twist however, as, on February 22, in a blaze of publicity which was said to have earned her close to £1 million, Jade Goody married a 21-year-old carpet fitter, Jack Tweed. In order that the couple could spend their wedding night together, he was allowed to ignore the 7pm curfew which was a condition of his early release from an 18-month prison sentence imposed for assaulting a 16-year-old boy with a golf club.

Her husband survives her with her two sons.

Thursday, March 12, 2009

Better left unsaid

The policy of organized labor in Washington State, appears to be: Millions for defense of our perks, but not one dime for hypocritical tribute to virtue:
Lawmakers would not release the e-mail, but a copy was obtained by The Seattle Times. It apparently was from a staff member of the Washington State Labor Council to several members of labor organizations as well as a small number of state lawmakers.

It reads in part:

"Brothers and Sisters, Just a quick update on where we are on the Worker Privacy Act:

• "Great leadership call yesterday where folks agreed that we would push for passage in the House this week and then call for a union president meeting with the Governor and the Majority Leader of the Senate to move the bill through the rest of the process.

• "Union leaders would send a message to the State Democratic party and to the Truman and Roosevelt funds from the House and Senate that 'not another dime from labor' until the Governor signs the Worker Privacy Act."

[Emphasis, the FLUBA's]

Tuesday, March 10, 2009

So Easy Even Cave Dwellers Can Do It: Sleepers in Missouri

Where getting the shaft means one mortgage loan by the private sector saves a homeowner:
An eastern Missouri family expects they'll be able to stay in their home built inside a cave after accepting an offer of a private mortgage contract. Curt Sleeper said Tuesday that a New Jersey-based business offered a 15-year loan with a low interest rate that should allow the family to keep their home in Festus, about 30 miles south of St. Louis.

"We're excited about it." To celebrate: "We're throwing a party at a friend's cave," he said.

Curt and Deborah Sleeper fell in love with the unique geography of an old mining cave in 2004 and figured out how to build a house inside of it. But they were having trouble making a large payment that was coming due on the property, prompting them to put their home up for auction on eBay.

They no longer plan to auction the home through the Web site, but Sleeper says the house will remain there until paperwork is completed on the loan.

Jon Demarest, owner of Logical Source Inc., confirmed that his the Fairfield, N.J.-based archiving and medical record company offered the Sleepers a mortgage.

Where Everybody Knows You're Gone

The recession claims a victim; a famous bartender:
Eddie Doyle was the guy who really did know everybody's name, at least when he started working at the tavern that inspired the television show "Cheers."

To the tens of thousands of tourists that later passed through, Doyle remained behind the bar to offer a smile, a beer and tips about where to find the Boston that wasn't shown on TV.

Now Doyle is out of a job, laid off from "Cheers" after 35 years. The bar's owner has said a tough economy and sagging business forced the move, which was one of several layoffs.
Doyle said he's not bitter, just surprised and a little sad.

....Doyle, who was laid off in February, has spent the past few weeks cleaning out his office and reflecting on what he considered a great run.

....Doyle was nothing like his TV counterpart, the womanizing barkeep Sam Malone. He's married to the same woman he met at the bar when he was a regular there in the early 1970s.

Lights are on...

...but, no one is answering:
The British Government is finding it "unbelievably difficult" to prepare for the G20 summit because no one in the US Treasury department is answering their calls, Britain's top civil servant Gus O'Donnell has said.

....Amid the worst global economic crisis in decades, the Cabinet Secretary said Number 10 was having trouble even getting in touch with key personnel at the US Treasury.

"There is nobody there," he told a civil service conference in Gateshead. "You cannot believe how difficult it is."

The reported comments come after Downing Street aides were left frustrated by the White House's chaotic handling of arrangements for Gordon Brown's visit last week.

Wednesday, March 04, 2009

Bank Failure

The gang that couldn't drill straight:

The thieves hoped to steal thousands from the Royal Bank of Scotland branch in Poynton, near Macclesfield, Cheshire, but clearly had not done their homework.

Having forced their way into the wrong property, they tried – and failed – again to get into the bank before running out of time and fleeing.
....Insp Gareth Woods of Cheshire police said: "This offence seemed organised to a certain extent but was clearly not the slickest and best executed crimes we have ever seen.
"It looks like they've broken into a flat above the bank and pulled some carpet up and made a hole in the floor only to end up in the space below.
"They clambered back up and went to another room to drill a hole in the ceiling of the bank but couldn't gain access.
"We can only assume they must have taken a long time to do it and they probably fled because they ran out of time or were disturbed."

Tuesday, March 03, 2009

No Pressure Cooker

Onc French chef prefers no heat in his kitchen:
A young French chef awarded his first Michelin star on Monday said he fought to stay out of the revered guide, afraid that joining the star system would be a poisoned chalice.

Cedric Bechade, 32, said he asked Michelin's reviewers to leave his Auberge Basque eatery in the foothills of the Pyrenees out of the 2009 guide for France, but that they "did not respect my wishes as a businessman."

Now he holds a star, Bechade said the need to hold on to the make-or-break ranking - or be seen as losing his edge - was an unwelcome diversion from the business of making good food.

What goes up

Must come down...of its own accord, or it's pay the Piker:
Hikers who reach the summit of Pikes Peak but are daunted by the descent have reason to find a second wind — calling rescuers will cost a hefty fee.

The city council of Colorado Springs set a fee of $100 or more if uninjured hikers call 911 for help because they're not up to walking down the 14,000-foot peak.

The fee could increase if snow has to be plowed from Pikes Peak Highway for rescuers to fetch a stranded hiker.

Rather be in Philadelphia

Where the doughnuts are:
British Transport Police (BTP) officers are currently in the States to share railroad security and counter-terrorism practices with officers from Amtrak Police Department (APD), which looks after America's railways.

But first things first - the day began with the all-important visit to Dunkin Donuts.

Officers from BTP then jointly patrolled Philadelphia's 30th Street Station where they observed Amtrak's security operations onboard trains and around the station.

Monday, March 02, 2009

Cash for the barrelheads

Italy's growth industry:
The Mafia and its loan sharks, nearly everyone agrees, smell blood in the troubled waters.

"It's a fantastic time for the Mafia. They have the cash," said Antonio Roccuzzo, the author of books on organized crime. "The Mafia has enormous liquidity. It may be the only Italian 'company' without any cash problem."

At a time when businesses most need loans as they struggle with falling sales, rising debt and impending bankruptcy, Italian banks have "absolutely closed the purse strings," said Gian Maria Fara, the president of Eurispes, a private research institute.

That is great news for loan sharks. Confesercenti, the national shopkeepers association, estimates 180,000 businesses recently have turned to them in desperation.

Saturday, February 28, 2009

New Kid on the Blog

And everyone wants to play with him--but does he really teach in an English luxury car?:
Yesterday the Boston Herald interviewed Brad Delong. Brad said he thought I was a right winger, and that he didn’t agree with many of my views. Nonetheless I appreciate that despite ideological differences Brad called me “thoughtful.” I thought his paper on monetarism was very good, and cite it frequently. I am not a big fan of FDR, but given Brad’s remarks about me being right wing it is fun to be able to get to the left of many of his admirers in this particular post. (Now if only Paul Krugman would use the phrase ‘thoughtful right winger’ more often.)

Of course, he won't really have arrived until his comments are deleted by the host at Semi-Daily Journal.

Friday, February 27, 2009

As Seen on TV

What the Boston Fed hath wrought:
Christopher Brooks, 39, pleaded guilty last fall to conspiring to commit wire fraud in connection with fraudulent loan applications on 18 Puget Sound-area homes that went into foreclosure and were sold by banks at a loss of more than $2 million.

....Brooks' mortgage-fraud scheme and the fallout spotlight an intensifying debate over how to deal with millions of loan defaults and foreclosures that are crippling the nation's housing and credit markets. ....

The FBI received more than 66,000 reports from banks last year, compared with fewer than 7,000 in 2003. Those suspected-fraud reports capture a fraction of the problem. Only banks — not other types of lenders or real-estate professionals — are required to report suspicious activity.

....The deluge of mortgage-fraud cases that is straining law-enforcement agencies now, experts say, could have been prevented if all lenders had followed traditional underwriting standards and been required to report fraudulent activity.

....At his sentencing today, Brooks was apologetic. "My intent going into this was not to take money from people, just flip houses, like they show in infomercials," he said.

Sunday, February 22, 2009

Other People's Money

The city of Seattle taxpayers are paying the price for their politicians' green delusions:
You may have seen the city's cars around town, painted with an eye-catching claim on the rear bumper: "This plug-in hybrid gets 100+mpg."

Also, a greener boast: "150+City MPG!"

Not exactly, it turns out. Not even close.

Try 51 miles per gallon, city and highway combined. Not counting the cost of the electricity.
It's what 14 plug-in Priuses averaged after driving a total of 17,636 miles. The pilot project is one of the few in the nation to subject plug-in hybrid cars to regular motor-pool duty, as opposed to being driven by hypermilers or alt-energy enthusiasts.

"We're not putting these cars on a test track," said Scott Thomsen, a spokesman for Seattle City Light, which has three of the plug-ins. "We've got them on hills and wet streets, in the cold and the hot, on short trips and long — all the conditions that real people deal with every day."

Getting 51 miles per gallon sounds fine compared to most gas cars. But it's a black eye for a technology that trumpets it will get twice that. And which doesn't pencil financially unless it hits at least 80 miles per gallon.

....The problem is the extra battery costs $10,000. At 51 mpg, the plug-in saves only about $200 in gas costs annually compared to a regular Prius in the city's fleet (and that's at $4 a gallon.) It would take 50 years to make back the cost of the extra battery.

Saturday, February 21, 2009

Arabic Numbers

They don't add up says the founder of Al Qaeda:
Sayyid Imam al-Sharif, who goes by the nom de guerre Dr Fadl, helped bin Laden create al-Qaeda and then led an Islamist insurgency in Egypt in the 1990s.

But in a book written from inside an Egyptian prison, he has launched a frontal attack on al-Qaeda's ideology and the personal failings of bin Laden and particularly his Egyptian deputy, Ayman al-Zawahiri.

....Today, however, he believes the murder of innocent people is both contrary to Islam and a strategic error. "Every drop of blood that was shed or is being shed in Afghanistan and Iraq is the responsibility of bin Laden and Zawahiri and their followers," writes Dr Fadl.

The terrorist attacks on September 11 were both immoral and counterproductive, he writes. "Ramming America has become the shortest road to fame and leadership among the Arabs and Muslims. But what good is it if you destroy one of your enemy's buildings, and he destroys one of your countries? What good is it if you kill one of his people, and he kills a thousand of yours?" asks Dr Fadl. "That, in short, is my evaluation of 9/11."

He is equally unsparing about Muslims who move to the West and then take up terrorism. "If they gave you permission to enter their homes and live with them, and if they gave you security for yourself and your money, and if they gave you the opportunity to work or study, or they granted you political asylum," writes Dr Fadl, then it is "not honourable" to "betray them, through killing and destruction".

Friday, February 20, 2009

Bring it on

Heather MacDonald--no coward she--responds to Eric Holder:
...if Attorney General Holder is really sincere about wanting a “frank” conversation about race, he should put the following items on the agenda:

The American electorate. The country just elected its first black president. ....

Crime. .... the homicide rate for black men between the ages of 18 and 24 is well over ten times that of whites. And disparities in other violent-crime rates are just as startling. In New York City, one of the nation’s safest large cities, 83 percent of all gun assailants were black during the first six months of 2008, according to victims and witnesses, though blacks make up only 24 percent of the city’s population. Add Hispanic perps, and you account for 98 percent of all shootings in New York City. ....

Education. .... The black high school drop-out rate approaches 50 percent. On the 2006 SAT, the average score in the critical-reading section was 434 for blacks, 527 for whites, and 510 for Asians; in the math section, 429 for blacks, 536 for whites, and 587 for Asians; and in the writing section, 428 for blacks, 519 for whites, and 512 for Asians. America’s lousy showing in international math, science, and reading tests compared with Japan and Western Europe is influenced in large part by the low scores of blacks and Hispanics. If blacks and Hispanics performed at the level that whites do, the U.S. would lead all industrialized nations in reading and would lead Europe in math and science, according to a study published in the Phi Delta Kappan in 2005.

.... Perhaps Holder could confront the stigma against academic achievement among many black youth, who deride studying and staying out of trouble as “acting white.”

The family. Closing the educational achievement gap will be difficult as long as the black illegitimacy rate is nearly 71 percent, compared with a white rate of 26 percent. Taxpayers foot the bill for this family breakdown—when fatherless children who never learned self-control and self-discipline disrupt classrooms and prevent other children from learning, and when the same fatherless children get sucked up into gang life and fail to connect with the world of work and responsibility. Many poor single mothers work heroically to raise law-abiding sons, but the odds are against them.

....If inner-city blacks behaved like Asians—cramming as much knowledge into their kids as they can possibly fit into their skulls—the lingering wariness towards lower-income blacks that many Americans unquestionably harbor would disappear. ....If Eric Holder wants to crank up our racial preoccupations even further, let him at least do so with a full airing of the facts.

Tuesday, February 17, 2009

It All Worked Out in the End

The global financial crisis has no fury like a Chinese woman scorned:
The businessman, named as Mr Fan and said to be from the city of Qingdao on the east coast, invited the five mistresses, who had all previously learned of each others' existence, to dinner, according to a local newspaper, the Peninsula Metropolitan News.

Along with a friend, who worked for a model agency, and inspired by reality television shows, he then laid on a competition for them, according to the report.

One woman was eliminated during a "looks round" and two more, who worked as clerical officers in his company, during a speech round. The final round was a drinking competition.

The story came to light after the first loser, to show no hard feelings, took all four other women and the businessman out for a drive – upon which she drove over a cliff in the hope of taking revenge on all of them. As it turned out, she was the only one who died.

Monday, February 16, 2009

They've Gotta Beef With You

Eat your vegetables, and save the planet, say some scientists:
[Nathan] Pelletier is one of a growing number of scientists studying the environmental costs of food from field to plate.

By looking at everything from how much grain a cow eats before it is ready for slaughter to the emissions released by manure, they are getting a clearer idea of the true costs of food.

The livestock sector is estimated to account for 18 percent of global greenhouse gas emissions and beef is the biggest culprit.

Even though beef only accounts for 30 percent of meat consumption in the developed world it's responsible for 78 percent of the emissions, Pelletier said Sunday at a meeting of the American Association for the Advancement of Science.

That's because a single kilogram of beef produces 16 kilograms carbon dioxide equivalent emissions: four times higher than pork and more than ten times as much as a kilogram of poultry, Pelletier said.

If people were to simply switch from beef to chicken, emissions would be cut by 70 percent, Pelletier said.