Ring out the old

After fifty years of failure, it would be fitting to say adios:

[Fidel] Castro's younger brother Raul, 77, who replaced the veteran dictator as president in February, will lead the main celebrations in the eastern city of Santiago, addressing a crowd from the same balcony where Fidel proclaimed victory on Jan 1, 1959.

....despite the triumphant slogans displayed in store windows, the new leader has scaled back plans for more lavish festivities after three back-to-back hurricanes in 2008 hammered the already enfeebled centralised economy.

Fidel, 82, will not make an appearance at the anniversary party – he has not been seen in public since undergoing emergency intestinal surgery in July 2006. But he still remains an imposing presence and few Cubans expect significant political or economic reforms while he is alive.

At the weekend, his brother was forced to announce fresh austerity measures, including a 50 per cent cut in overseas government travel, after officials admitted the economy had suffered its worse year since the collapse of their old Soviet benefactors in 1991.

The regime fears tougher times ahead this year as the collapse in world oil prices is likely to undermine the petrodollar fuelled largesse of firebrand Venezuelan President Hugo Chavez. Cuba's main financial backer currently supports Havana with subsidised oil supplies worth up to $3 billion (£2.1 billion) a year.

Many Cubans, tired of half a century of hostility with Washington, have pinned their hopes for change on the election of Barack Obama. Indeed, the US President-elect has promised to ease tough restrictions on Cuban-Americans visiting their relatives and sending cash remittances to the island.

Havana for its part this autumn quietly removed a prominent billboard near the US Interests Sections depicting George W. Bush as a bloody-fanged vampire in what was regarded as a goodwill gesture towards its long-time foes.

The Company He Keeps

It's a clash of civilizations:

[Jimmy] Buffett, who turned 62 on Christmas Day, long ago became an icon of certain baby boomers — perhaps the least-hip demographic in the country — by offering the dream of throwing off their responsibilities for his tropical-party vibe.

But in the past decade, this chronicler of Margaritaville has really cashed in on his image.

....With his estimated annual income of more than $40 million, you might mistake his portfolio for that of Warren Buffett (not a relative). He's done it by sailing beyond most musicians' ticket, T-shirt and poster revenue stream.

The title of his most popular song shows up on restaurants, clothing, booze and casinos. Among the products he's involved with are Landshark Lager, the Margaritaville and Cheeseburger in Paradise restaurant chains, clothing and footwear, household items and drink blenders.

The Margaritaville cafe on the Las Vegas strip is said to be the top-grossing restaurant in the nation.

....In October, Buffett was chosen by Vanity Fair as No. 97 on a list of the 100 most influential people. In the world. He's nestled between Universal Music Group CEO Doug Morris and anti-poverty crusader [Columbia economist] Jeffrey Sachs.

Broken Crockery Fallacy

Help end the recession; break some stuff:

Stressed workers are flocking to The Venting Place in Tokyo where they pay to hurl crockery against a concrete wall in a bid to ease recession-related angst.

Katsuya Hara, who leads a team of chiropractors operating the therapy, said: "To break something, as all of us know from experience, is something extremely exhilarating and it helps bring down pent-up anger. We hope to become the new way businessmen and women relieve their stress."

Anxious visitors choose the crockery they would like to destroy, ranging from 200 yen (£1.40) for a small cup to 1,000 yen (£7.40) for a larger plate-smashing dish.

Marx was right

First it's tragedy, then comes the farce:

Just in time for Christmas, Karl Marx is finding a new audience among Japanese comic-book fans.

The manga edition of his masterpiece, "Das Kapital," hit Japanese bookstores this month and sold about 6,000 copies in its first few days, said Yusuke Maruo of EastPress.

"I think people are looking to Marx for answers to the problems with the capitalist society," Maruo said. "Obviously, the recent global crisis suggests that the system isn't working properly."

Maruo said he hoped the comic version would provide an enjoyable introduction to the German socialist's original work, written in 1867. The targeted readers are office workers in their 30s.

Hockey Moms to the Rescue

Doing their part for the economy:

'Lipstick effect' in full swing, economists say

....Economists believe that during hard times people forego extravagant purchases like cars, holidays and kitchens and instead spend their money on small luxuries like make-up.

Recent sales figures from some of the world's big cosmetic companies - L'Oréal, Beiersdorf and Shiseido - bear out the theory. In the first half of the year L'Oréal sales were up 5.3 per cent.

The theory was first identified in the Great Depression. Between 1929 and 1933 industrial production in the US halved but sales of cosmetics rose.

Cal Ripken It

Show up for work, says the PGA Comish:

According to a story in the Sports Business Journal, [Tim] Finchem said ...: "We're asking every player to add a tournament or two to their historical schedule to assist the tournaments that historically have weak fields. We have a lot of title sponsors this year that are up for renewal. We have to put our best foot forward in terms of presenting our competitions."

He also asked players to be visible in corporate hospitality areas and to communicate that to the leaders of Tour sponsoring companies, according to the Sports Business Journal. He also asked players to avoid being publicly negative about the Tour.

....The PGA Tour isn't immune to the economic slowdown worldwide. Several of its sponsors are financial institutions or car companies, both of which are having significant economic troubles.

It's Only Make Believe

Say the Scot scholars about Chick Flicks:

Watching romantic comedies can spoil your love life, a study by a university in Edinburgh has claimed.

Rom-coms have been blamed by relationship experts at Heriot Watt University for promoting unrealistic expectations when it comes to love.

They found fans of films such as Runaway Bride and Notting Hill often fail to communicate with their partner.

Many held the view if someone is meant to be with you, then they should know what you want without you telling them.

Psychologists at the family and personal relationships laboratory at the university studied 40 top box office hits between 1995 and 2005, and identified common themes which they believed were unrealistic.

'Honey, the academics think it would be better if we catch the Steven Seagall picture.'

Stop us if you've heard this one before

A Muslim walks into a bar and says, 'How about a job?':

A Muslim cocktail waitress who claims she was sacked for refusing to wearing an 'indecent' red dress is suing a bar for £20,000.

Fata Lemes, 33, said the figure-hugging scarlet dress made her look like a nightclub hostess and was 'physically revealing and openly sexual'.

....She is suing for sexual harassment and sex discrimination.

She said she was fired when she refused to wear the dress and is claiming £20,000 for injury to her feelings and lost earnings.

What's a nice girl like you doing in....?

The Big 7 Oh

Dave Leonhardt says it includes legacy costs:

...the Big Three really does spend about $73 [per hour] on compensation. So the number isn’t made up. But it is the combination of three very different categories.

The first category is simply cash payments.... It includes wages, overtime and vacation pay, and comes to about $40 an hour. ....

The second category is fringe benefits, like health insurance and pensions. ... the benefits amount to $15 an hour or so.

Add the two together, and you get the true hourly compensation of Detroit’s unionized work force: roughly $55 an hour. ....

The third category is the cost of benefits for retirees. These are essentially fixed costs that have no relation to how many vehicles the companies make. But they are a real cost, so the companies add them into the mix — dividing those costs by the total hours of the current work force, to get a figure of $15 or so — and end up at roughly $70 an hour.

Not so fast, says Heritage's James Sherk:

These figures are based upon calculations by the Detroit automakers themselves as published in SEC filings, their annual reports, and other materials. According to briefing materials prepared by General Motors, "The total of both cash compensation and benefits provided to GM hourly workers in 2006 amounted to approximately $73.26 per active hour worked."

....General Motors reports that it pays base wages of roughly $30 an hour.

....Other provisions raise cash earnings above this base pay. For example, workers at Ford earn 10 percent premium payments for taking midnight shifts and double time for overtime hours worked on Sundays.

Autoworkers put in substantial overtime hours at higher rates, raising earnings above their base pay. GM reported that its average hourly employee worked 315 overtime hours in 2006. Including all monetary payments--base wages, shift premiums, overtime pay, as well as vacation and holiday pay--GM reported an average hourly pay of $39.68 an hour in 2006.

To recap, Leonhardt thinks $40/hour is explained by cash wages plus fringe benefits. Sherk says it's cash only, and fringe benefits are extra:

The remaining $33.58 an hour of hourly labor costs that GM reports--46 percent of total compensation--was paid as benefits. These benefits include...:

Hospital, surgical, and prescription drug benefits;
Dental and vision benefits;
Group life insurance;
Disability benefits;
Supplemental Unemployment Benefits (SUB);
Pension payments to workers pensions accounts to be paid out at retirement;
Unemployment compensation; and
Payroll taxes (employer's share).

These benefits cost the Detroit automakers significant amounts of money. Critics contend that these benefit figures include the cost of providing retirement and health benefits to currently retired workers, not just benefits for current workers. Since there are more retired than active employees this makes it appear that GM employees earn far more than they actually do.

This contention contradicts the plain meaning of what the automakers have reported in SEC filings and in their public statements and would be contrary to generally accepted accounting principles.

Sherk follows with a tutorial on accrual accounting practices that make it clear that benefits for current retirees would not show up in these current year expenses (but would be on the balance sheet as liabilities).

Further, that GM, with almost 300,000 retirees receiving almost $5 billion in retirement benefits in 2006 (nearly $17,000 per retiree), couldn't possibly have only $15 (per current worker hour) as Leonhardt is claiming.

(Thanks to NC State's Craig Newmark)

Isn't It Legal?

In the land of Obama--where domestic terrorists go to launch second careers as ghost writers--you can't sell something as insignificant as a U.S Senate seat:

Federal authorities arrested Illinois Gov. Rod Blagojevich Tuesday on charges that he brazenly conspired to sell or trade the U.S. Senate seat left vacant by President-elect Barack Obama to the highest bidder.

Blagojevich also was charged with illegally threatening to withhold state assistance to Tribune Co., the owner of the Chicago Tribune, in the sale of Wrigley Field, according to a federal criminal complaint. In return for state assistance, Blagojevich allegedly wanted members of the paper's editorial board who had been critical of him fired.

A 76-page FBI affidavit said the 51-year-old Democratic governor was intercepted on court-authorized wiretaps over the last month conspiring to sell or trade the vacant Senate seat for personal benefits for himself and his wife, Patti.

Otherwise, Blagojevich considered appointing himself. The affidavit said that as late as Nov. 3, he told his deputy governor that if "they're not going to offer me anything of value I might as well take it."

"I'm going to keep this Senate option for me a real possibility, you know, and therefore I can drive a hard bargain," Blagojevich allegedly said later that day, according to the affidavit, which also quoted him as saying in a remark punctuated by profanity that the seat was "a valuable thing - you just don't give it away for nothing."

Hard Times

Life imitates Woody Allen, all over Europe and the U.S:

Sex is free at Big Sister, but that is not cheap enough for some men. Customers get the cut rate in return for signing a release form that allows the brothel to film their sexual exploits.

Even with this financial incentive, Big Sister's marketing manager, Carl Borowitz, 26, a Moravian computer engineer, lamented that the global financial crisis had diminished the number of sex tourists in Prague.

....Big Sister is not the only brothel suffering the effects of a battered global economy. While the world's oldest profession may also be one of its most recession-proof businesses, brothel owners in Europe and the United States say belt-tightening caused by the global financial crisis is undermining a once-lucrative industry.

Egbert Krumeich, manager of Artemis, the largest brothel in Berlin, said that the recession had helped dent revenue by 20 percent in November, which is usually peak season for the sex trade. Meanwhile, in Reno, Nevada, the multimillion-dollar Mustang Ranch recently laid off 30 percent of its staff, citing a decline in high-spending clients.

Big Sister is not struggling as much as some of its more traditional rivals; its revenue is largely derived from the €30, or $40 monthly fee each of the company's 10,000 clients pay to gain access to its Web site.

But Borowitz said Big Sister hoped to offset a 15 percent drop in revenue over the past quarter by expanding into the United States. Big Sister also produces cable TV shows that air on Sky Italia and Television X in Britain, as well as DVDs like "World Cup Love Truck" and "Extremely Perverted."

Ester, an 18-year-old prostitute at Big Sister who declined to give her last name, said that big-spending clients had diminished, but noted that she was still earning nearly €3,000 a month, enough to pay rent and to pay for her favorite Louis Vuitton purses.

"The reason I do this is for the money," she said, after gyrating half-naked around a pole. Being filmed, she added, made her feel more like an actress than a sex object.

A Little Dab'll Do Ya

Today's lesson in Public Choice Economics finds the usual suspects at work to put our soldiers lives at risk:

Scientists have discovered a lotion that can save the lives of U.S. soldiers exposed to chemical weapons — a product vastly superior to the standard-issue decontamination powder.

Naturally, the Defense Department wants to scrap the powder and switch to the more-effective lotion.

But there's a problem: After being lobbied by the companies making the powder, several members of Congress pushed through two earmarks worth $7.6 million that forced the military for the past two years to keep buying the inferior product.

The product, known as M291, is made from a resin sold exclusively by a Pennsylvania chemical company, which is then processed into powder by a New York company, then assembled into individual kits at a facility in Arkansas.

Among the lawmakers who championed the earmarks are Sens. Hillary Rodham Clinton, D-N.Y.; Arlen Specter, R-Pa.; and Charles Schumer, D-N.Y.

Clinton, who is poised to become secretary of state, received nearly $7,000 in campaign donations from the beneficiaries of these earmarks in recent years. Specter got more than $47,000.

No hired hands

J Bradford DeLong isn't whining like Joe Stiglitz, he's making it clear he has no interest in working in the Obama Administration:

Why oh why can't we have a better press corps? We all ask this question. There is something that some of you all can do today. And I beg you to please do so.

If you subscribe to the National Journal, pick up the phone and cancel your subscription, telling whoever you speak to that you will not resume until Stuart Taylor, Jr., is fired from the National Journal's staff.

Hip to be Square

At the bowling alley, emulating The Dude:

..."The Big Lebowski," the Coen Brothers movie about an aging slacker who calls himself the Dude, and who, after a thug urinates on his prized rug, becomes caught up in a Chandleresque mystery.

Played with slouchy brio by Jeff Bridges, the Dude's chief pursuits involve bowling, avoiding work and drinking White Russians, the sweet cocktail made with vodka, Kahlúa and cream or milk.

The movie was a flop when it was released, but in the decade since, "The Big Lebowski" has attracted a cult following, and as the film's renown has grown, so has the renown of the White Russian, or, as the Dude calls them, "Caucasians." The drink is the subject of experimentation at cutting-edge bars like Tailor, in SoHo, which serves a crunchy dehydrated version — a sort of White Russian cereal.

....To see the White Russian renaissance in full bloom, it is instructive to attend a Lebowski Fest, the semiannual gatherings where fans of the movie revel in the Dude's deeply casual approach to life. There, the White Russian is consumed in oil-tanker quantities.

This was much in evidence at a fest held last month in New York, where 1,000 or so "achievers," as the movie's buffs call themselves, took over Lucky Strike Lanes, a bowling alley in New York. The White Russian demand was such that, in addition to two bars, a White Russian satellite station had been set up and bartenders were in back mixing vats of reinforcements.

It turned out that management was following a directive from the event's organizers. "When we line up a venue, we always have the White Russian talk," said Will Russell, a founder of the Lebowski Fest.

Russell has learned from experience to lay in provisions. He recalled an incident at an early festival in his hometown of Louisville, Kentucky

"Milk sold out within a one-mile radius of the bowling alley" where the event was held, he said.

"We had to go to every local mini-market and gas station to satisfy the requirements of the achievers."

Not So NIHCE

If you're dying of cancer in Britain:

When Bruce Hardy's kidney cancer spread to his lung, his doctor recommended an expensive new pill from Pfizer. But Hardy is British, and the British health authorities refused to buy the medicine.

....A clinical trial showed that the pill, called Sutent, delays cancer progression for six months at an estimated treatment cost of $54,000.

But at that price, Bruce Hardy's life is not worth prolonging, according to a British government agency, the National Institute for Health and Clinical Excellence. The institute, known as NICE, has decided that Britain, except in rare cases, can afford only £15,000, or about $22,750, to save six months of a citizen's life.

Madness...Method to it

John Muellbauer thinks Bernanke has his Batmobile fuelled and ready to go:

It is time for unorthodox policy – one far more effective than Milton Friedman’s helicopter drops of money – because it is reversible. Indeed it is akin to ‘stabilising speculation’ by central banks.

The world’s main central banks should collectively buy mainstream securities (not the obscure assets as initially proposed under TARP). This is the best way to put liquidity into the pockets of consumers and companies. But these securities must be targeted to relieve the critical credit blockages impeding recovery. Many of the assets discussed below are now at the lowest real prices seen in decades. The influx of cash and credit will stabilise global activity, eventually increasing the real value of most of these assets. In due course, the central banks will be able to sell back the assets to the private sector. Assuming the stimulus works, this operation will be profitable for the central banks – a important difference when comparing this to fiscal measures that raise national debts.

The financial accelerator

A key part of the economic logic behind this unconventional monetary policy is provided by what economists call the financial accelerator, well explained by Bernanke (1983), building on Irving Fisher’s 1933 theory of debt deflation.

Running with the Big Macs

Welcome to the club:

In a note posted on its support site in late November, Apple said it wanted to "encourage" people to use anti-virus to stay safe online.

The move is widely seen as a response to the growing trend among cyber criminals of booby-trapping webpages that can catch out Mac users.

Before now Mac users have been largely free of the security problems that plague Microsoft's Windows.

....in recent months, hi-tech criminals have signalled a change in tactics away from e-mail borne viruses. Instead, many are infiltrating popular webpages in a bid to infect the machine of any and every visitor.

Many seek to steal valuable information such as login names, passwords or game accounts instead of trying to install themselves on a machine.