EconOpinion

Is the Cause of Global Warming in the Stars?

2006-03-18T00:23:00.000-08:00

Global warming seems to be one of the most significant long-term problems (along with terrorism) the world faces today. Thus, I always keep my eyes peeled for new insights into the issue. There are ultimately three questions we must answer:

Is the current global warming in fact a long-term trend or a short-term blip in millions of years of temperature swings the earth has experienced?
Is the current global warming caused by human behavior?
Are there positive externalities (to use an economic term) to global warming? In other words, are there benefits to global warming that no one mentions?

The linked news article addresses only the second issue, suggesting that cosmic rays are the cause of today's global warming:

University of Ottawa science professor Jan Veizer says high-energy cosmic rays, originating from stars across the expanse of space, are hitting Earth's atmosphere in ways that cause the planet to cycle through warm and cold periods.

Dr. Veizer goes on to say:

"Empirical observations on all time scales point to celestial phenomena as the principal driver of climate," Veizer wrote in his paper, "with greenhouse gases acting only as potential amplifiers."

The cost of assuming that people create global warming when that assumption is mistaken could be enormous. Billions of dollars of new government programs, new restrictions on economic growth, population control programs, ... . Where it would all stop is difficult to say.

Imagine everyone's standard of living in steep decline as job #1 worldwide becomes stopping global warming. Then picture the world as an overcooked french fry even after all those frantic efforts to send a "chill out" message to the planet.

I'm old enough to remember the predictions by scientists in the 1970s: a new ice age. Will global warming eventually fade from memory the way those predictions have?

QuickTake: I Wish I Had a Billion Dollars

2006-03-17T02:24:00.000-08:00

Maybe I could just print a few billion dollar bills, like the guy in the linked article.

Too bad there's no pictures of the billion dollar bill in the story. Of course, if I print my own, then they can look however I want them to look. Maybe I'll put my picture on the front. Would a bank teller notice? Nah.

QuickTake: Senate Votes to Raise Debt Limit

2006-03-17T02:22:00.000-08:00

The news media had a field day alarming Americans with the news that the U.S. debt limit was raised by Congress tp $9 trillion. The idea that everyone--man, woman, and child--owes $30,000 to someone else when the overall federal debt is alloted proportionally seemed to catch the fancy of reporters.

The fact is that the debt finances both government consumption, some of it worthy and some of it wasteful, plus government investment. People are getting something for their money, although it may not always be what they want. Most importantly, however, realize that the debt is not $30,000 per year. The $30,000 represents the accumulated per capita debt. I seem to recall that this number was about $26,000 five or six years ago.

Maybe stories on debt should also mention the increase in private debt, such as mortgage and credit card debt, when they bring up the public debt. Oh, and another thing, it would make sense to state the debt in real terms, meaning adjusted for inflation.

I guess it's too easy just to write an alarming headline and dash off a story.

QuickTake: Anybody Can Be Beautiful!

2006-03-16T00:56:00.000-08:00

This post comes under the heading of "Is it fraud?" Beauty sells, but what if that beauty is enhanced? There's deception going on, even if it doesn't rise to the level of fraud.

First, take a look at the linked web site. Click on a thumbnail of any of the beautiful ladies (and a few guys). Once you see your selected picture full size, run your cursor across the photo to see what the lady looked like before the photo was retouched. Alicia Keyes is a good one. See Alicia glowing in perfection, then see Alicia complete with a mild case of acne.

Now I know why some celebrities exhibit an unreal, almost unimaginable beauty. I hope the folks who doctor the photos are well paid. They deserve it.

QuickTake: Picture of a Ticking Time Bomb: The Hayward Fault Line

2006-03-11T22:06:00.000-08:00

This picture of the Hayward fault line is one of three pictures of Bay Area fault lines in the linked story. When the big quake comes, scientists predict 155,000 housing units will be destroyed. I don't have my New Orleans statistics in front of me, but I do know that the Bay Area is more heavily populated than the Big Easy. A big quake could make the Katrina disaster look like small potatoes. Can FEMA come up with 155,000 trailers overnight?

Much devastation and misery await. Of course, there's a good reason to build a city on the fault line. That reason is also clearly seen in the picture. The large, safe harbor is a world leader in shipping.

What I want to know is how will the bloggers on the left blame George Bush for the quake! They'll try. And one other question: We name hurricanes, why not earthquakes?

Just asking.

Iceland Gives Up Gasoline!

2006-01-26T03:14:00.000-08:00

Iceland is a picturesque country, judging from the picture above. It's also a country whose government has decided to totally eliminate dependence on oil. Picturesque, and a leader in the transition to an oil-free future.

Heating? The whole country is one boiling cauldron of hot water. You see, Iceland was formed by volcanoes and those volcanoes are still at work heating vast amounts of water. Low-cost hot water heating for homes and businesses keeps the people toasty warm during the long, cold winter. That same water turns giant turbines that supply the country with electricity. That only leaves gasoline.

Now the Icelanders (Icelandics?) get creative. They're turning water into hydrogen to be used as a fuel to run the country's vehicles. Hydrogen fuel is three times as expensive as gasoline, but vehicles get three times the mileage, so the cost balances out.

The timetable for creating this oil-free society? Mid-century.

Heck, by that time, the world may have run out of oil anyway. That's the peak oil argument that's made its way into debates over energy policy. Click here if you want to read an apocalyptic vision of life without oil. Warning: The author doesn't paint a pretty picture of life in the future. Bear in mind, though, that 30 some odd years ago the scientists making up the Club of Rome predicted the world would be out of everything by now. Wrong!

Then again, if you like apocalyptic visions of the future, there's always a TV preacher or a science fiction writer to scare the pants off everyone. Economists, you know those devils practicing "the dismal science," would paradoxically keep their wits and smile a cheerful smile even if it could absolutely be proved that the world was running out of resources. The ability of science to find and develop substitutes, the incentives provided by profit, and a resilient market economy have proven effective in the past in promoting ever higher standards of living. Thus, the post-oil era might not be so bad after all.

Of course, a happy ending isn't what the apocalypse crowd is selling. Will Iceland show the way to a happy energy future? Time will tell.

Bush: U. S. Government to Go Out of Business

2006-01-26T02:40:00.000-08:00

President George W. Bush gives the finger to Wal-Mart. "Better prices and a better selection," said the President about the government's going out of business sale.

President Bush has announced that the federal government is going out of business.

"The U.S. government, America's place for law and order since 1776, has lost its lease, and everything must go, go, go," Bush said. "But our loss is your gain, and make no mistake: You, the people, would be crazy to miss out on these amazing closeout bargains."

The Washington-based government, which hasn't shown a profit in five years and carries the highest debt in its history, was ultimately driven out of business by costly overhead and cheap foreign competitors. As a result, Bush said, everything—from flag stands and Capitol cafeteria flatware to legislation dating from the early days of the republic—will be marked down 30 to 90 percent.

"Get yourself a piece of history, or just stock up on your favorite items—whatever it is, chances are we've got it," said Bush, wearing a 10-gallon hat and standing before a chroma-key background of the National Mall as a list of federal items and their discounted prices scrolled down the screen. "But act fast, because deals like these will not last."

According to surveys, the American people, by a 2 to 1 margin, report that they will not miss the government. The same survey reports that close to half of all Americans would like to see China as their next government. As one citizen put it, "Our old government was always getting into wars and taxes were too high. If the Chinese can produce a government as good as their electronics, then I think most Americans would welcome another Chinese import--government by China. Of course, that assumes the price is right."

Let Them Eat Cake--The French Soup Nazi Says Soup is Racist

2006-01-26T00:51:00.000-08:00

I never knew that soup could be racist. But France has decided that pork soup is, so it's been banned. That's right, banned. If you were hoping to taste a delicious bowl of pork soup (ugh!) on your next vacation in France, better think again and settle for crepe suzettes or that other gourmet delicacy, french fries! What's going on here?

It seems some charities were feeding France's hungry homeless and poor, offering them a tasty bowl of pork soup at no cost. The problem?

Protesters have accused the groups of deliberate discrimination against Jews and Muslims, who do not eat the meat.

Thus, local governments in some parts of France have banned pork soup.

My comment: Nobody was being forced to eat anything, right? So, think about where we are going with this line of thought. The Hindus of India don't eat the cow, so let's ban hamburgers. And of course, hot dogs are made of pork, so let's ban those. Pork sausage for breakfast? Fuggidaboutit!

Am I the only one who thinks a government that has the power to ban pork soup is a government with too much power? "Laissez faire forever," Adam Smith might say.

Buy an American Car and Save an American Job?

2006-01-25T21:44:00.000-08:00

We traditionalists wish only the best for Ford and GM. Competition is good, providing consumers with more choices and lower prices, other things equal.

These American car brands have fallen upon hard times recently, though. With high-cost labor and older, less productive factories, compared to their Japanese counterparts, the American companies have struggled to earn a profit. There's even talk that they could go under, like venerable old Studebaker did in 1966.

It's gratifying to see that American cars do pretty well in the J. D. Power quality ratings. There's Lincoln, Buick, and Cadillac ahead of Infiniti, and not too far behind Lexus. And, it looks like Nissan, Suzuki, Mitsubishi, and Isuzu, Japanese brands all, have a bit of catching up to do with the iron that Detroit pumps out.

Since a lot of the Japanese companies now build their vehicles in the USA, I don't know how many, if any, jobs a person might save by buying an American brand. What a person would save by buying a Ford or Chevy is tradition. If that has any value to you, then act accordingly.

Official Web Site: NORAD Tracks Santa 2005

2005-12-24T19:58:00.000-08:00

Keeping up with Santa Claus on Christmas Eve is a tough job, but our government's up to the task. Check out Santa's progress this year by clicking on the link in the title of this post.

Merry Christmas to all!

Liberals Demand Santa Take the Bus!

2005-12-24T01:18:00.000-08:00

In what has to be the most ridiculous news item this Christmas season, Mr. S. Claus of the North Pole has come under fire by the British government for the pollution caused by his annual Christmas eve deliveries.

It has been calculated that Santa's team of nine reindeer would emit methane with a global warming impact equivalent to more than 40,600 tonnes of greenhouse gases ...

A lump of coal in the Christmas stockings to all who support moving Santa out of his sleigh and into public transportation. Says Britain's Liberal Democrat transport spokesman:

... the best Christmas present for the environment would be if Santa took the bus, which would keep his total emissions output down to just 10,980 tonnes ...

Answer me this, Mr. Government Bureaucrat: Do you also want to slaughter Vixen, Blixen, Rudolph, and the rest? After all, they keep emitting that methane gas even when not pulling Santa's sleigh.

WAIT! I'm not sure I want an answer to that question. After all, you're a government bureaucrat, which means you haven't an ounce of common sense.

And a Merry Christmas to ya!

CD Baby, Keep the Music Coming

2005-12-24T00:53:00.000-08:00

I've been reading a lot lately about the changing economics of the music business. While I still buy the big, black plastic, two-sided CDs sold at thrift stores, which I play on one of my vintage record players (aka, my stereo), downloads off the Internet appear to be killing off CDs, just as cassette tapes killed the mass production of vinyl records, and in turn CDs killed cassettes. I'm hopeful, for the sake of music lovers, that the outcome will be more choices for the consumer.

Which brings me to CD Baby. That's their logo above. While looking for more information on who did the vocals on the original version of All I Want for Christmas is You, one of the best Christmas songs ever, I discovered that independent recording artists have a way of getting their music out to their fans.

The artists supply the CDs, which are then marketed by CD Baby. Instead of a dollar or so a copy sold by major labels, the artist receives $5 or $6 per sale from CD Baby. Looking over the web site, I see a lot of help being offered to new artists and to older artists who are unable to get a recording contract these days. Oh, if only John Denver were alive to get on board.

With over 116,000 artists to pick from, CB Baby is capitalism at its finest--an endeavor worth supporting. Check it out. Oh, I should add that CD Baby is keeping up with the changes in the technology of music delivery. They can help get an artist on the music download sites. By the time I wear out my collection of "albums," it won't matter. There'll be another technology that'll have replaced downloads. A possible candidate? Check out Mercora.

Blogging Helps Reduce Information Overload?

2005-12-07T22:33:00.000-08:00

Here's a different take on blogging. On the one hand we know that blogging has exploded in popularity, with millions of new blogs to discover, bookmark, and keep up with. OK, so blogging offers intriguing glimpses into the day's events, filtered through the minds of bloggers, but at the cost of investing the time to read them.

On the other hand, bloggers tend to specialize their interests, thus breaking the massive information flows generated in today's world into manageable bite size chunks:

"Bloggers actually act like filters for the day's news, for the day's gossip and commentary," researcher Darren Sharp says.

"They actually tailor the mass of information that is out there into a scale that's really fit for human consumption."

Still feeling the effects of information overload?

Darren Sharp's final words of advice are perhaps among the simplest to adopt. "Sometimes, it pays to switch off the computer and go for a walk on the beach," he says.

Now, if only I had a beach to go for a walk on. Oh well, the backyard will just have to do.

Man's Best Friend--Fidocam to Combat Crime

2005-12-05T02:41:00.000-08:00

I've often thought that if I were sent to Iraq to serve in a combat zone, I'd just as soon have my pit bull, Pup, as a partner as to have a human backing me up. Dogs aren't called man's best friend for no reason, right?

The dog in the picture illustrates the job assigned to Sammy and Zara, German Shepherds in the service of the Northumbria Police in Britain. Cops in Britain are unarmed, even four-legged ones. However, the tool strapped to the dog's head is a camera and transmitter. This dog's "mission impossible"? Enter a building and scope out the situation, sending pictures back to the police.

Police Chief Jim Soutar reports the following qualifications are sought in these canine recruits:

We're looking for dogs with above average drive who can operate under stressful conditions.

Two-legged cops probably need the same qualifications.

No mention is made in the linked article about the cost of hiring these canine crimefighters. One can only surmise that dog biscuits are cheaper than human wages and that the dogs don't demand two weeks of paid vacation every year.

Proof of Global Warming?

2005-11-21T22:46:00.000-08:00

The upper picture shows the Boulder glacier in 1988. The lower picture is the exact same scene as it appeared in 1932.

Where'd the ice go? This example may or may not constitute proof of global warming since it's only one spot on a very big earth. We also can't conclude that man caused the ice to melt, either.

Something caused the ice to melt, though. I'd like conclusive evidence of just exactly what. Maybe the scientists will come up with the evidence in the future. I'll pay attention to the news.

In the meantime, economists are also thinking about the economic, as opposed to ecological, effects of global warming. Remember the Oklahoma Dust Bowl in the 1930s? You've seen pictures in the history books of the effects of the prolonged drought and the human misery that climate change created. But humans are resilient. And Mother Earth has a way of healing herself. Today's Oklahoma landscape and economy is nothing like its 1930s version. That's a good thing for the land and people of Oklahoma.

I wonder if there's anything good about a warmer earth. Higher crop yields and a longer growing season to feed hungry mouths? Just wondering. One thing we don't have to wonder about is whether humans will adapt to climate change. They've been doing that for thousands of years. So, maybe I won't lose sleep over global warming. At least not tonight, when the low here in south Texas is going to plunge into the 20s. Brrr!

Bigger Vehicle, Bigger Tax Credit--Does It Make Sense?

2005-11-16T23:48:00.000-08:00

The Honda Insight: 57 mpg, but a relatively meager $1,450 tax credit for purchasers

Tax credits are intended to encourage specific kinds of behavior by subsidizing them. The linked article in Wired poses an interesting economic issue, one deeply intertwined with politics. It seems that tax breaks designed to reward purchasers of fuel efficient vehicles fail to correlate exactly with a vehicle's miles per gallon. Thus, consumers who purchase some SUVs will receive larger tax credits than purchasers of hybrids, according to a study done by the American Council for an Energy Efficient Economy.

The amount of each tax credit is computed according to a formula, which takes into account a vehicle's improved fuel economy, measured against competitors in its class. Thus, the 57 mpg Honda Insight hybrid automobile offers a $1,450 tax credit, while buyers of the 36 mpg Ford Escape hybrid SUV receive a $2,600 credit.

The ACEEE's own research shows that the correlation between miles per gallon and the size of the tax credit is in general positive. The logic for a greater credit of the Escape is also well grounded, since the Escape will save more gallons of gas each year for its purchasers than will the Insight. What's the problem?

Gay Gene or Gay Germ?--Is Homosexuality an Infection?

2005-11-16T00:01:00.000-08:00

When I was a kid my father came down with stomach ulcers. In those days, the doctors believed that ulcers were caused by worry and spicy foods. Thus, a good part of his medical treatment involved instructions to "Relax, be happy, don't worry," and "Avoid spicy foods." Today, we know that the advice he was given was worthless, at least as it relates to treating ulcers. The reason is that it is now known with certainty that stomach ulcers are caused by a germ.

The courageous scientist who battled the medical establishment to prove that ulcers are caused by a germ was Gregory Cochran. For years his theory was ridiculed until the proof that he was right was so overwhelming that it couldn't be ignored. Now, we treat stomach ulcers with antibiotics and other medicines targeted at the causitive germ.

Well, Mr. Cochran, an independent physicist, is at it again. And taking a lot of heat.

While conventional science seems hell-bent on proving the existence of a gay gene, Mr. Cochran theorizes that such a gene would have been bred out of existence, had it ever existed. His hypothesis, so far untested, is that homosexuality is the result of an infection of some sort, possibly viral in origin. Biology professor Paul W. Ewald has teamed with Mr. Cochran to make something of the hypothesis.

What Cochran suspected about homosexuality, he and his colleague now believe to be true for a large number of conditions—namely, that microbes, not genes, are responsible for them. Ewald and Cochran’s innovation is to consider disease from the perspective of human evolution. If your mother is obsessed with knowing when you are going to give her some grandchildren, then you are more or less familiar with the traditional perspective of human evolution: You were put on this earth to reproduce. Anything that gets in the way of reproduction is a problem that you better be prepared to explain. To judge the size of such a problem, evolutionary biologists assess its "fitness cost"—that is, the damage it does to your chances of procreating.

Genes with a substantial fitness cost do appear from time to time. Every so often a cell makes a mistake while copying its DNA—a mistake known as a random mutation—and this mutation may give rise to a gene harmful to the person carrying it. But in such a case, according to evolutionary theory, the new disease-causing gene would vanish after a hundred generations or so, gradually but inexorably, because damaged organisms reproduce less often and less prolifically than healthy ones. (There is an exception: Some disease-causing genes simultaneously provide a protective benefit—such as the gene for sickle-cell anemia, which also happens to ward off malaria.) The higher its fitness cost, the faster a gene disappears.

The math is unforgiving. If a genetic trait has a fitness cost of just 1 percent, it will sink to the very low rate of a random mutation after only 100 generations. Over the course of human evolution—roughly 800,000 generations so far—a trait would vanish even if its fitness cost were as low as 0.001 percent. According to the best available estimates, however, 3 to 4 percent of men and 1 to 2 percent of women in the United States are exclusively homosexual. That’s a lot of homosexuals. Too many, Cochran and Ewald believe, for the condition to be genetic.

This web site shows the results of an opinion poll about the cause of sexual orientation. Poll results show that most people believe sexual orientation results from a person's environment or some aspect of his or her upbringing. The gay gene theory has been gaining ground, however, because of publicity given to papers that suggest the existence of a gay gene.

One question for Cochran and Ewald is that even if it is eventually proved that gayness is caused by a germ, would gays welcome a cure for that infection? The web site linked in the previous paragraph mentions the Bible's explanation for homosexual conduct, which is Satanic demons that enter the body and cause people to "sin." Perhaps gays would welcome proof of the cause of homosexuality, so long as the scientists prescription doesn't involve exorcism. That burden of "sin" that is laid on gays by the Bible must be a tough burden to carry around all your life!

JC's GirlsGirlsGirls--Three Beauties Stand Up for Jesus

2005-11-13T00:58:00.000-08:00

Tanya

Lori

Heather

They say that God works in mysterious ways. Porn surfers might agree.

JC's GirlsGirlsGirls, Tanya, Lori, and Heather have a trick or two up their collective sleeves, no pun intended. The sight of the glamour shots above, taken from jcsgirls.com, might lead a body to think that more revealing sights await those who click deeper into the web site. No way! What is there are the personal stories of three lovlies who've found Jesus.

These beautiful women are on a mission to minister to those enslaved by sexual addiction. From the women of porn to the males who thrive on consuming it, these girls say, "Jesus loves you. Repent."

They're not exactly what you expect when you think of Christians on a mission. You'll never mistake them for Pat Robertson or Jerry Falwell. However, they offer a Christian message. Let's hear it in their own words. From the pen of Lori we learn:

Our whole goal when we began was simply to get the message out to people in the sex industry that when they are ready to come to God, he will not turn his back on them. This is still our goal…so this means that even if a girl never enters the door of a church, a huge accomplishment has been achieved in helping her get the message that God forgives no matter what she has done! God is using us to get this message out way faster than we anticipated.

Heather adds:

As a successful Vegas stripper, I lived life to the extreme. I partied with celebrities, traveled, and found pleasure in the lifestyle that stripping provided. However, deep down inside I was terrified to die. Feeling like I would eventually pay the price for the life I lived, I began “bargaining” with God. Unfortunately, no one ever reached out to me, so I started seeking God on my own. I found a local church but went not telling anyone of my past, afraid that people would judge me. I learned slowly that God does not want Christians to judge others but calls them to love. Knowing this, I began to open up and share even though I knew I was being judged. I began to help my Christian friends realize that judging others is wrong, and God doesn’t like it.

My hope is to open the doors of churches to make room for all people including porn stars, strippers, and men addicted to strippers or porn.

JC's Girls is the second-highest rated video at Craveonline. Again, don't expect a skin show. The video is a profile of the ministering by JC's GirlsGirlsGirls shown on the TV program, A Current Affair.

Sex appeal is used to sell everything from new cars to toilet paper. Why not Jesus?

QuickTake: Survey--One in Five Teens Have Own Blog

2005-11-09T00:55:00.000-08:00

We have a gender gap here, folks. Females are more likely to blog than males. Do I sense a government affirmative action initiative coming to assist the males? Nah. The blogging gap will remain a fact of life, I fear. Males are playing video games while females are blogging. Maybe that's just nature taking its course.

From my own experience, blogging keeps my writing skills honed. Thus, I predict that young women's writing skills will outpace those of young men. If writing skills matter in today's economy (and I think they do), then look for young women to have a leg up in the job market.

Blondes--Going the Way of the Dinosaur?

2005-11-09T00:24:00.000-08:00

A rather Freudian view of blondness, I would say.

The Village Voice is young, hip, and multicultural. Michael Musto, who is one of their more thought-provoking regular contributors, has this to say about a certain type of young, blonde celebrity:

A surfeit of pesky peroxide addicts who had face-lifts at age 12 and turned their abortions into handbags has made things so oppressively dumb-tastic that Charlize Theron has to wear boils and a modified babushka to elevate herself from the tragically superficial morass into respectability (though ever a trouper, she bravely still sports luscious blond locks).

I swear on my obsolete Uggs that dumb blonds are, like, officially over. It's just not cute anymore to watch people who, thanks to raging insecurity issues, insist on being both stick-thin (because they want to look "good") and camera-hoggingly self-humiliating. The spectacle of boobs popping out, drug dribble leaking out, and vaginas wearing out, all in the name of career advancement, was extremely amusing for a while, but everyone's too smart to stand by and applaud this sideshow any longer, especially if they can't get close enough to grab some.

You can't say the man minces words, can you?

Invitation to a Divorce

2005-11-09T00:13:00.000-08:00

Marriage is a bedrock institution of society. Yet, about half of American marriages fail to last a lifetime. It seems inevitable in that light that a book like How to Throw a Divorce Party would come along. Here's the skinny on what's going on:

The parties seem mostly designed for women, particularly since the author of the book on the trend, Los Angeles writer Christine Gallagher, has been selling it through her website revengelady.com.

Women spend thousands on bands and play games like "Pin the Blame on the Spouse". There's also often a divorce party cake and of course the cocktail: Marriage on the Rocks.

My reaction? How many other failures in life could we celebrate? Let's see: Getting kicked out of college, getting thrown in jail, getting fired from a good job, running over the neighbor's cat, ...

The list of party opportunities is endless, right? Pardon me, though, if I don't feel like celebrating any of the above with you.

In a rejoinder to her critics, the author says,

It's the one sort of life-changing event we have no help with. We need a ritual. We need to surround ourselves with our friends and family and say, 'Hey, it's OK. We support you. We still love you.

OK, maybe she has a point, but a revamped Irish wake might not be the best venue to provide that support. Thus, if any of my friends come looking for a shoulder to cry on after a divorce, I think I'll refrain from suggesting a party.

Negative Real Interest Rates--A Sign of the Inflationary Times

2005-11-08T22:31:00.000-08:00

Can you identify with my dilemma? I was tired of my bank accounts paying as little as 0.75 percent interest. What to do? Hit the Internet, of course, and search for a safe alternative that offered a more appealing interest rate.

The real interest rate is computed as: nominal interest rate minus inflation rate. With inflation recently running at about 5 percent as measured by the CPI, and the nominal rates (the rates as stated by the bank) on my accounts at about one percent on average, then the real interest rate I've been receiving has been about minus 4 percent.

Inflation is like a thief, robbing a person's savings of its purchasing power. How to foil the thief was the question to which I needed a solution.

After looking high and low at various mutual funds and other alternatives, I found the Series I savings bond page on the Internet. These bonds absolutely guarantee the purchaser that the real rate of interest will be positive (although modestly so). How can that guarantee be made? The government adjusts the nominal interest rate on the series I bonds by adding the inflation rate over the last six months to a modest real interest rate. From November 1, 2005 until April 1, 2006 the I bonds will pay 6.73 percent interest. I couldn't find a secure investment with a better return.

The interest rate will be reset next April 1. If the inflation rate is lower, then the interest on my bonds will be lower. If the inflation rate is higher, then the interest rate on my bonds will be higher. I wish I could lock in the 6.73 interest rate for several years, but that's not the way these bonds work.

I bonds are an example of indexing for inflation. The U.S. Treasury also offers individuals another indexed bond called TIPS (Treasury Inflation Protected Security). You can read about the differences between TIPs bonds and I bonds on the TreasuryDirect web page. In a nutshell, the TIPS is a marketable bond whose price might be higher or lower than the price you paid for it when you bought it. That price will be higher if interest rates turn lower in the future, but will be lower if interest rates go higher. Changes in the price of the bond compensate bond purchasers for changes in interest rates. There are also differences in the tax treatment of interest earnings between TIPs bonds and I bonds that made the I bonds more attractive to me.

Bottom line question: How much longer will banks get away with paying negative real interest rates to savers?

QuickTake: This Woman Up for Bids

2005-11-07T16:57:00.000-08:00

Deborah can be had for $600,000, house included.

Clever gal is Deborah. She's reaped a lot of attention by offering her house and herself on eBay for $600,000. As she puts it, the house is worth approximately that much in the Denver housing market, but she herself is "priceless."

This scheme is another in the long line of creative, attention-getting uses of eBay. Deborah (no last name is given on her web site) is looking for a good relationship with a good man, but her efforts to find that man in more conventional ways have proven fruitless.

If you're a man between 40 and 60, well educated, and like animals, maybe you'll want to submit a bid. I've shown you Deborah, but you'll have to visit her web site to see the house.

QuickTake: A New Use for Superglue?

2005-11-01T21:34:00.000-08:00

Will the company use this incident in its advertising?

According to this story, Gail O'Toole of Murrysville, Pennsylvania should be on every man's "Do Not Date, Do Not Call, Avoid at All Costs" list. When her boyfriend, Kenneth Slaby, broke up with her she extracted revenge by supergluing his genitals to his abdomen while he slept. O'Toole pleaded guilty to a misdemenor and served six months probabation. Presumably Slaby received attention from a hospital sufficient to make his genitals operational again.

Wasn't it Shakespeare who wrote, "Hell hath no fury like a woman scorned"? As for O'Toole, I suggest she write a book called "One Hundred and One Uses for Superglue You Never Thought of Before."

QuickTake: Squirrels Hooked on Crack?

2005-11-01T02:46:00.000-08:00

Squirrels should stick to nuts and avoid crack!

You know that drugs are epidemic when charming little park squirrels become hooked on the hidden rocks of crack cocaine stashed away by crackheads. Such is the case in parks in Washington, D.C. and New York City. Now, the unfortunate squirrels of London appear to be the next victims.

Let's hope that gangs of dope-addicted squirrels don't start carrying signs that say "Will work for food" in order to raise money to buy more of the stuff!

QuickTake: Honda's Going to the Dogs

2005-10-19T11:28:00.000-07:00

Product differentiation--Honda style

A car designed for the dog lover. Honda's got it, as you can see in the picture. That glove compartment doesn't contain gloves, but a dachshund. The glove compartment is designed to hold your pet in safety. So is the popup crate by the back seat.

The W.O.W. Concept vehicle, which stands for wonderful, openhearted wagon, isn't for sale yet. But, we know that carmakers test the public's interest by showing their latest concepts at car shows. To take a look at the W.O.W in person get yourself over to the Tokyo Auto Show.

QuickTake: The Unofficial Bill Gates Website

2005-10-19T00:27:00.000-07:00

Watch Out When You Drive Through Albuquerque or the Police'll Get Ya

When you're the richest man in the world, it stands to reason you'll be the target of unwanted attention. That's part of the price of celebrity. Case in point: The "Unofficial" Bill Gates Website. In his mugshot photos, Bill was clearly a lot younger and I'll bet a lot less wealthy than he is now. I wonder if he'd be treated the same today as he was then if he were pulled over for speeding.

Enough idle speculation. The point of this post? If you want to know more about Bill Gates or Microsoft, the Unofficial web site is a good place to start.

Stop the Cruelty--Boycott France Now!

2005-10-11T19:07:00.000-07:00

The dogs and puppies in the picture were used as live shark bait. The practice is common on Reunion Island, which is controlled by France. Kittens are also used for this purpose.

The Sea Island Conservation Society is trying to stop the barbaric practice you're seeing in this post. Would you like to help stop this cruelty? This page has the addresses of public officials who have the power to stop it.

In the meantime, my advice is "Boycott all things French."

Melissa Says: Firemen Suck!

2005-10-03T21:59:00.000-07:00

I'm presenting this story verbatim from the NOLA web site. It tells one woman's horrific encounter with a group of firemen during the worst of Hurricane Katrina. While this story played out in St. Bernard parish, the lessons about the lying, cheating, stealing, and worse by so called "public servants" could apply anywhere in America. Just because someone wears a uniform doesn't make them a "hero," contrary to the crap dispensed to delude unthinking, gullible Americans after 9/11.

Melissa's story: Escape from Arabi

Melissa Sass of Arabi writes:
My husband and I stayed behind in our home in Arabi with 3 dogs. We were fine until the final hours of the storm. That's when the water came in. We went up in the attic, hacked a hole in the roof, and hoisted the dogs out first due to the fact that the water would saturate the ceiling and they would fall through.After the storm, we went out on the roof and waited to be rescued. About 9 hours later, a man named Jigger in a boat came by and saved us. We saved several other families that night. He brought us to the levee and told us to go to the Domino Sugar Refinery, they are using it as a shelter.

It was too dark to go to the refinery and they had standing water. I knocked on a door and a man let my husband and I sleep on his balcony on the second floor. The next day, we walked to the refinery and waited several hours to get in. An employee of the refinery brought us in by bulldozer through the water. Once in, we saw there was about 100 people there, pets and people.

There was about 25 firemen from the St. Bernard Fire Department. They were awful. The fought all the time, they yelled about how they didn't want to share the food and water with us. It wasn't until the chief came in that they changed their tunes. He calmed them down and rationalized.

But still, some firemen were still horrible to the survivors. They were taking showers and not telling people where the showers were. They kept all the food and water by them, so if you was thirsty or hungry, you needed to go and ask them for something, and when you did, they acted so mean. People started to leave to the Superdome and to the West Bank on buses and boats.

About four days there, the firemen left. They took ALL the food and water with them. In order to get any food/water, while they were loading up, you had to go and take the food and water from them! They didn't even offer to take anyone with them. People asked to go, but they stated that there was no more room for anyone.

After the firemen left, it was peaceful. No one fought, no one was on edge. A day later, some firemen came back for the food and water that was left behind. People at the refinery fought for it and won the battle. Nothing physical, but very verbal. The firemen had guns, but that didn't change the way others felt, that was our livelihood!

On Saturday, my husband and I (with one dog left, one jumped out the boat as we were being taken off the roof, and one ran away) boarded a tug boat and was brought to St. Charles Parish where we were greated by the nicest police officers ever! We met our family there and now we are trying to get our lives together.

QuickTake: Will Gothic Lolitas Catch On in the USA?

2005-10-01T21:46:00.000-07:00

It's called the gothic lolita look. It's supposedly big in Japan. Will it catch on elsewhere?

Fashion is pretty unpredictable, so I won't venture a guess. What I can say is that if the look does catch on, lots of money is going to spent updating wardrobes.

Isn't that what Keynesian economics is about? More consumption spending is good for the economy. Since fashion changes so often, the world of fashion helps to keep that marginal propensity to consume high.

The downside? Critics of fashion point to the social waste associated with planned obsolescence. Would it be better to spend to solve social problems or spend on a new look? Ultimately, it's consumers who will decide.

Imagine Life and Love 27,000 Years Ago

2005-09-29T18:46:00.000-07:00

Twins interred 27,000 years ago

Sometimes it's pretty easy to empathize with the pain and joy of earlier generations. We have written records of suffering and happiness, going back several thousands years. Through the written word, we can stand beside Socrates in ancient Athens as he defended himself against trumped up charges of corrupting the youth. We can feel his pain as he drank the hemlock to comply with his death sentence. Technology makes it even easier to feel the pain of others. Through television, we can see for ourselves the sadness of Americans as they said goodbye to a fallen president in November of 1963.

It's a lot harder to turn back the hands of time 27,000 years and understand the feelings of people of that era. We have no written records of them. Nothing to tell us who they were. Of course, in a basic sense, we know who they were. Our ancestors!

The picture in this post might make it a tad easier to realize that pre-historic people had feelings too. Twenty-seven thousand years ago, when Neanderthals were giving way to modern homo sapiens, these twin newborns were lovingly buried on a beautiful hillside overlooking the Danube River in what is today Austria.

Their tiny bodies were covered with the shoulder blade of a wooly mammoth to protect them as they journeyed into eternity. Beads were placed in their graves. Someone loved them very much.

Who was their mother? What became of her? Did she have other children? We'll never know much more than that somebody cared. Maybe that's enough.

History Does Repeat Itself, So What's the Lesson?

2005-09-22T23:02:00.000-07:00

The top picture shows a tiny slice of the aftermath of Hurricane Katrina in St. Bernard Parish, Louisiana. The bottom picture was taken 40 years earlier in the same parish, after 1965's Hurricane Betsy roared through the area. Two hurricanes, 40 years apart, but the same result. Why?

To make the parish and neighboring New Orleans flood-proof might or might not be possible. That's up to the engineers to determine. What the pictures should be reminding us of is that sooner or later, no matter the precautions taken by man, another great flood will spill across the swamps and pour into the neighborhoods of Arabi, Chalmette, Meraux, and Violet, laying waste to people's lives and dreams.

Hurricane Betsy should have been a wake up call, but as human nature would have it, the people of St. Bernard drifted back into complaceny after the putrid waters receded and their homes had been restored. Life was too good to worry about what might not happen. Why tax yourself to protect yourself from the "big one," that mythical killer hurricane that would drown cars, houses, and people like proverbial rats in a rain barrel?

And so everybody went back to the old habits. A Friday night beer and oyster sandwich at Rocky and Carlos. High school football. A weekly trip to "make groceries" at Schwegmann's. Whatever the amusement, it made it easy to forget the risk. Even Mother Nature seemed forgiving. St. Bernard dodged a bullet when 1969's Hurricane Camille veered eastward to smash the Mississippi Gulf Coast. As the years passed, good luck held as gulf hurricanes took one path or another away from the parish. Until Katrina.

As one old timer put it, life in St. Bernard was more a habit than anything else. Or maybe it was an addiction. Habits can be broken, but addictions ...? The people of St. Bernard are now as scattered as the children of ancient Israel. Will a Moses appear to lead them back to their promised land?

Economically, there are reasons to return. The sugar refinery, the oil refinereries, the easy-going charm of next-door New Orleans. But as former residents of St. Bernard are allowed to return in the next few months, it will not be hard-nosed economic calculations that drive them to return. They will be lead by their hearts.

The Lesson? It may be silly to some, but "home is where the heart is" is more than a saying. It's a living emotion that makes people come together to rebuild, even when to the outside world it makes no sense because of the risk.

Happy Dogs, I'm Sure

2005-09-05T22:34:00.000-07:00

Dogs rescued from the devastation of New Orleans. (Source: LA Times)

These dogs, being evacuated from New Orleans by bus, sure look happy to be leaving the flood-devasted city behind. I'll bet they'll be even happier when they're reunited with their loved ones.

Many Americans wonder why more New Orleanians did not evacuate the city before Hurricane Katrina struck. Well, lots of people would NEVER leave their dog or cat behind. Unfortunately, the shelters refuse to take our canine and feline friends. That's got to change, if they really want people to leave their homes.

In Honor of Sirius as 9/11 Approaches

2005-09-04T04:01:00.000-07:00

The beautiful Labrador Retriever in the pictures is Sirius, who died on 9/11. Going about his duties as a bomb-sniffer, Sirius was killed in the collapse of the twin towers. When Sirius' feeding bowl was found in the rubble of the World Trade Center, it was silverplated and engraved with the following: “I GAVE MY LIFE SO THAT YOU MAY SAVE OTHERS.” You can read tributes to Sirius and even see another tribute painting here.

If you pause this September 11 to honor those Americans killed in the terrorist attacks, don't forget Sirius.

Who's Responsible?

2005-09-04T03:16:00.000-07:00

Copied and pasted from the Federal government's national response web site:

As a State’s chief executive, the Governor is responsible
for the public safety and welfare of the people of that
State or territory. The Governor:
■ Is responsible for coordinating State resources to
address the full spectrum of actions to prevent,
prepare for, respond to, and recover from incidents in
an all-hazards context to include terrorism, natural
disasters, accidents, and other contingencies;
■ Under certain emergency conditions, typically has
police powers to make, amend, and rescind orders
and regulations;
■ Provides leadership and plays a key role in
communicating to the public and in helping people,
businesses, and organizations cope with the
consequences of any type of declared emergency
within State jurisdiction;
■ Encourages participation in mutual aid and
implements authorities for the State to enter into
mutual aid agreements with other States, tribes, and
territories to facilitate resource-sharing;
■ Is the Commander-in-Chief of State military forces
(National Guard when in State Active Duty or Title 32
Status and the authorized State militias); and
■ Requests Federal assistance when it becomes clear
that State or tribal capabilities will be insufficient or
have been exceeded or exhausted.

A mayor or city or county manager, as a jurisdiction’s
chief executive, is responsible for the public safety and
welfare of the people of that jurisdiction. The Local
Chief Executive Officer:
■ Is responsible for coordinating local resources to
address the full spectrum of actions to prevent,
prepare for, respond to, and recover from incidents
involving all hazards including terrorism, natural
disasters, accidents, and other contingencies;
■ Dependent upon State and local law, has
extraordinary powers to suspend local laws and
ordinances, such as to establish a curfew, direct
evacuations, and, in coordination with the local
health authority, to order a quarantine;
■ Provides leadership and plays a key role in communicating
to the public, and in helping people, businesses,
and organizations cope with the consequences of
any type of domestic incident within the jurisdiction;
■ Negotiates and enters into mutual aid agreements with
other jurisdictions to facilitate resource-sharing; and
■ Requests State and, if necessary, Federal assistance
through the Governor of the State when the jurisdiction’s
capabilities have been exceeded or exhausted.
Tribal Chief Executive Officer
The Tribal Chief Executive Officer is responsible for the
public safety and welfare of the people of that tribe.
The Tribal Chief Executive Officer, as authorized by
tribal government:
■ Is responsible for coordinating tribal resources to
address the full spectrum of actions to prevent,
prepare for, respond to, and recover from incidents
involving all hazards including terrorism, natural
disasters, accidents, and other contingencies;
■ Has extraordinary powers to suspend tribal laws and
ordinances, such as to establish a curfew, direct
evacuations, and order a quarantine;
■ Provides leadership and plays a key role in
communicating to the tribal nation, and in helping
people, businesses, and organizations cope with the
consequences of any type of domestic incident
within the jurisdiction;
■ Negotiates and enters into mutual aid agreements with
other tribes/jurisdictions to facilitate resource-sharing;
■ Can request State and Federal assistance through the
Governor of the State when the tribe’s capabilities
have been exceeded or exhausted; and
■ Can elect to deal directly with the Federal Government.
(Although a State Governor must request a Presidential
disaster declaration on behalf of a tribe under the
Stafford Act, Federal agencies can work directly with
the tribe within existing authorities and resources.)

Did Anyone Bother to Read the Plan?

2005-09-04T02:42:00.000-07:00

Consider these sections of the City of New Orleans emergency plan, which you can read in its entirety by clicking on the title of this post:

Conduct of an actual evacuation will be the responsibility of the Mayor of New Orleans ...

The City of New Orleans will utilize all available resources to quickly and safely evacuate threatened areas.

D. Regional Transit Authority
* Supply transportation as needed in accordance with the current Standard Operating Procedures.
* Place special vehicles on alert to be utilized if needed.* Position supervisors and dispatch evacuation buses.
* If warranted by scope of evacuation, implement additional service.

E. Louisiana National Guard
* Provide assistance as needed in accordance with current State guidelines.

Emergency shelter operations are the responsibility of the Office of Emergency Preparedness Shelter Coordinator.

The plan raises three questions:

Were "all available resources" used in the evacuation?
Why weren't food and water stockpiled at the Superdome?
Was the Louisiana National Guard utilized from the git go?

Notice that the plan makes the Mayor responsible, not the President of the United States. Final question: Did Mayor Nagin blow it?

When Hurricanes Strike: Forgotten Saint Bernard Parish

2005-09-03T23:34:00.000-07:00

They say that history repeats itself. That's true, at least for Saint Bernard Parish, Louisiana.

I grew up in the mostly white "bedroom community" located just east of the City of New Orleans. Most of the time when middle-class Americans think of white flight and bedroom communities they think of affluence. Bad thinking in this case. Think poor whites, working hard at low paying industrial jobs, living smack in the middle of a semi-rural swamp. The nice thing about the swamp was that when you suffered one of those periodic spells of unemployment you knew would come sooner or later, the swamp would feed you. Fish, shrimp, crawfish, oysters, rabbits, nutria, and more were to be had free from the bayous and wet muck that passed for land. Not bad when you literally have no money, as so many people did when I was growing up.

None of the major retailers had stores in St. Bernard when I was growing up. But, like every other bedroom community in America, St. Bernard has grown more prosperous over the years. Today the good people in Arabi, Chalmette, Meraux, Violet, and other communities making up St. Bernard know first hand Wal-Mart, McDonald's, and other retailers American babies can name before they can say their ABCs. That parish slogan from my childhood, "Buy, Build, Boost, Beautiful St. Bernard" must have worked.

I haven't been back for more years than I can count, but I know there's a lot that's new. Besides the major retail chains having moved in, the swamps have been drained so that subdivisions could sprout along with schools and other infracstructure to serve a growing population.

One thing that isn't new is how the national media ignores St. Bernard in covering hurricanes. Most of St. Bernard was covered in water in 1965 after Hurricane Betsy. The picture in this post shows the flooding caused by Katrina, but the scene in 1965 didn't look a bit different. To see the damage to St. Bernard, you'll have to check the blogs, like the one linked in this post.

When you read the accounts of devastation from Katrina in the national news media, they'll tell you that things in New Orleans would have been worse except that Katrina's eye veered eastward at the last moment. Eastward, right over St. Bernard Parish. One hundred fifty mile an hour winds pushing and pulling anything not nailed down, turning everyday objects into deadly projectiles.

What I learned from Hurricane Betsy is that most of the damage from Hurricanes is not wind related. Sure, shingles will get peeled off, unprotected glass broken, trees downed, and such. But houses that are built with any attention to detail tend to hold up pretty well unless a tornado (one of the side effects of hurricanes) strikes. The damage to homes you're seeing in Mississippi on the news is from the tidal surge of water, not wind effects.

Just as in 1965, St. Bernard Parish is not seen much in news coverage of the hurricane. I don't know if that's good or bad for the folks in St. Bernard. What I do know is that unless the people have changed in ways I can't fathom, they won't be sitting around waiting for the government to solve their problems. As soon as the water recedes, they'll be cleaning up their streets and properties themselves. They'll be feeding themselves, too. Mr. Alligator better watch himself, or he'll be on the menu!

Molly Kiely--Artist, Writer, Entrepreneur, Adventuress, ...

2005-07-05T13:58:00.000-07:00

Self portrait by Molly Kiely

I don't know if "met" is the right word, but if we agree that the word gets the job done, then I met Molly Kiely online several years ago. Probably in 2003. I had been surfing the web for several hours, reveling in pictures and stories about ancient travel trailers brought back from the dead. When I clicked on a now forgotten link and ended up at her web site, I hit pay dirt.

Back then, she was the parent-restorer-big sister-nurse to a 1950 travel trailer. A mid-century trailer is not really ancient, but is old enough to show some character. And need a lot of work. A Roadmaestra. I was jealous until I visualized all the sweat needed to put an old-timer like the Roadmaestra in shape.

Anyway, I leaned a little closer to the computer screen when I saw the pictures of the trailer and read about how Molly was going it alone with the restoration. Extraordinary woman, my mind whispered to itself. Going it alone takes guts.

How did Molly come to buy the old trailer? What I seem to remember is that she and the Arizona desert are kindred spirits. First she bought a couple of acres of heat, sand, and scrubby vegetation just outside of Tucson. Some time later, she happened upon the old priced-just-right trailer that was in need of tender loving care. Maybe the trailer came before the land. I don't remember for sure. But for Molly, trailer plus land equaled a soul-soothing getaway from a less-than-satisfying 9-to-5 life anchored by a high-tech job in California's Silicon Valley.

I emailed her that night with a few rambling comments about the trailer. Since then, I've probably emailed her two or three more times. In one message, I sent her links to some web sites I thought she would like. In another, my condolences when her homeless buddy, Buster, passed away.

Has the trailer passed away, too? Or just been passed on to another owner? There haven't been any recent mentions of the Roadmaestra. No wonder. Molly's traded in that California to Arizona commute to put down roots in the desert. She's got herself a home in the Avra Valley now. Attached securely to the ground. Not just a trailer that a strong wind might push to California in a weird dream following a night of too much tequila, but a real house.

I love the washing machine on the front porch. Molly says it's an Arizona thing.

I also like Molly's writing, photography and art. She's sort of a paradigm for the "modern woman," or at least what I imagine the modern woman to be. She's still got a day job to pay the bills, but her nights (and weekends) are made for better things. Writing, painting, photography, illustrations, pinup art (WARNING: Adult content; Molly says, "There's nothing wrong with pretty girls."), comics ("comics that are not for kids," as Molly puts it on her comic web page), and art shows.

I've read that if you type in "home-based business opportunities" in the Google search engine, Google will come back at you with 69,000,000 hits. I suspect a lot of those home based businesses are scams. Molly's the real deal. She's the real home-based business woman. Except that tag doesn't fit exactly.

Purists would have a fit if Picasso were called a home-based business man. Rightly so. So scratch the previous paragraph. I'll just say that today's economy gives people the opportunity to pursue higher interests--art, religion, philosophy--and make a living at the same time. As an economist, I can say, "Three cheers for capitalism." As a person, I'll add, "Three cheers for Molly Kiely for making the world a more interesting place."

Two ID Cards--One Straight and One in Drag

2005-07-05T12:55:00.000-07:00

Jay Abraham's consulting fee is $5,000 an hour. When you're a marketing genius, you can charge that much and some businesspeople will gladly pay it. Why not? If that $5,000 expense puts, let's say $100,000 in profit in your pocket, then it's an expense easily justified.

From Chapter 1 of Jay's book, Getting Everything You Can Out of All You've Got comes this example of proactive, client friendly service:

The Royal Bank of Scotland issues two high-security check cashing cards to its transvestite clients — one with a photo of them dressed as a man, and the other as a woman. A bankspokesman said: If any cross-dressing clients go shopping dressed as a woman, it s possible for them to have a second card so they can avoid embarrassment or difficulties when paying by check.

If more businesses put this kind of thought into their customer relations, there would be fewer business failures. That would be good for the owners and the workers they employ. And good for the economy, too.

I wish Jay Abraham would put more of his wisdom down in the form of the written word. He's recently started his own blog, but I'd like to see more of his ideas in book form. Books are the cheapest way to get knowledge. Jay does personal appearances, but I can't afford the $25,000 he charges each attendee for those. His other materials are also pretty pricey. Jay may or may not have ever taken an economics course (I don't know for sure), but he has an intuitive grasp of price discrimination. Indeed, if I were a businessperson, I'd be impressed with the many techniques that Jay Abraham utilizes to earn money. Perhaps the most important technique is summed up in Jay's philosophy:

You must understand and appreciate exactly what your clients need when they do business with you — even if they are unable to articulate that exact result themselves. Once you know what final outcome they need, you lead them to that outcome — you become a trusted advisor who protects them. And they have reason to remain your client for a lifetime.

Marketing 101, The Gospel According to Jay. Amen!

The Bottom Line on These Jeans Could be Your Bottom!

2005-07-01T01:30:00.000-07:00

How low cut can jeans go? This low, for now.

Fashions in clothing come and go. Will the look you see in the picture catch on?

That depends on whether you and I are willing to throw to the winds what's left of modesty, and actually wear the Zoomp jeans shown at a recent fashion show in Brazil. I can't tell, but I guess you put these "I'm too sexy for my clothes" denims on one leg at a time.

I wonder what they look like from the back. ...

Hmm. ...

Maybe I don't want to know.

The fashion industry is driven by planned obsolesence. Perfectly good clothing draped on hangers in millions of closets gathers dust because it is no longer stylish. In the meantime, designers stich together even more outrageous garb to appeal to fickle consumers. It keeps the dollars circulating and employs a lot of people. And benefits charities as the old clothing is cleaned out of those closets and donated to charitable thrift stores.

Advice to America's youth: Don't wear these unless you want to see your parents and teachers in similar garb.

Prediction: If they do catch on, the makers of complementary products will experience a surge of demand. In particular, shops offering bikini waxes will have more business than they can handle!

You'd Be Crying Too If You Were Born $150,000 in Debt

2005-06-30T17:40:00.000-07:00

Why is this baby crying?

$150,000 will be each person's share of the national debt in the year 2040 if present trends continue. The baby in the picture will be about 35 years old by then. I wonder how the baby will feel about being so deep in debt? Maybe a better question is, "Will the baby and everyone else have enough money to pay off their share of the national debt?"

How could the national debt be so large? Simple. The federal government spends more than it receives in taxes. And it's been living beyond its means for a long time.

The solution? Either cut government spending by 60 percent (fat chance!) or increase taxes by a factor of 2.5 (also, fat chance!).

The 300 year hypothesis: No republic in the history of the world has lasted three hundred years. The 300 year hypothesis was raised by the U.S. governments's head accountant, David Walker, the Comptroller General of the United States. For the U.S. that 300-year threshold will occur in 2076. Will the U.S. still be around then?

Something must be done, but the political will to take decisive action is lacking:

In his fiscal 2006 budget request, President Bush attempted to reign in unnecessary spending by cutting or eliminating 150 government programs to save about $20 billion next year. As reserved as these cuts are within a $2.6 trillion budget, members of Congress in both parties demeaned the President’s recommendations. If this struggle is any barometer for the future of our government, the United States may not have the chance to disprove David Walker’s 300 year hypothesis.

Experimental Economics--Monkeys Go On A Spending Spree

2005-06-29T01:26:00.000-07:00

A capuchin monkey

Did the monkeys you saw on your last trip to the zoo act almost human? If you answered yes, it could be that you're not too far wrong. When given "money," their spending decisions are just like those made by humans.

Keith Chen and his fellow Yale researchers have conducted an amazing economic experiment. First, they showed that monkeys follow the law of demand, just as it is taught in Economics 101. But that's just part of their results. Even more amazing is that monkeys are like most people in that, other things equal, they prefer to avoid risk.

Capuchin monkeys were given shiny metal disks--money--that they could trade for tasty morsels of food, such as pieces of apples. Researchers adjusted the "price" by changing the amount of food a disk would purchase. Sure enough, when the price decreased, the monkeys increased the amount of food consumed. Just like the law of demand predicts!

More complicated were the experiments in risk aversion. In the simplest terms, these experiments involved first offering the monkey consumers an unchanging amount of food for their money. Then the monkeys were offered an uncertain amount of food for their money, which might be more or less than amount of food offered in the first experiment. Like human consumers the monkeys preferred the sure thing to the uncertain alternative.

The lesson learned from this experiment? We now have a better understanding of why humans are risk averse. It appears that risk aversion is a built in response. Why would this be?

One possibility is that in nature, with a food supply that is often barely adequate, losses that lead to the pangs of hunger are felt more keenly than gains that lead to the comfort of satiety. Agriculture has changed that calculus, but people still have the attitudes of the hunter-gatherer wired into them.

This experiment just goes to show that the old saying, "Well, I'll be a monkey's uncle" just might be true!!!

$9,899 Tuition for a Worthless Degree?

2005-06-26T01:25:00.000-07:00

Dr. Morton Middlefart, Rushmore University graduate

I have to choose my words carefully since I would prefer not to be sued by Rushmore University. If you've never visited the campus of Rushmore, that's understandable. There is none. Rushmore, you see, is a totally online, totally unaccredited "university." Some people call businesses like Rushmore diploma mills, but I wouldn't do that.

Rushmore is certainly different from the more widely known, accredited online universities, such as the University of Phoenix. You can enroll in Rushmore's MBA (Master of Business Administration) program for a one-time payment of $5,499. No Bachelor's degree, the normal prerequisite for an MBA? No problem, because Rushmore doesn't require a Bachelor's degree. Don't waste your time studying for the usual admissions test either. There is none. Speed is of the essence at Rushmore, though. Because there are no admissions tests and no transcripts required, your application will be processed in a mere three days.

Rushmore also offers a Ph.D. Don't forget to send $9,899 payable to Rushmore if you're applying for the doctoral program. I'm not quite sure why the doctorate costs almost twice as much as the MBA, but completion of a doctorate allows one to claim the title of Dr.

One of the advantages of being a student at Rushmore is that there are no tests to take. From what I can tell from the school's website the curriculum consists of reading a series of books, most of which I read when I was 13 or 14 years old, and writing a short book report on each. Dale Carnegie's How to Win Friends and Influence People is one example of a book that some Rushmore students have read in fulfillment of a course requirement. It looks like a Rushmore student can earn a doctorate by reading and reviewing 10 or so books of this sort, and then writing a thesis. Dr. Middlefart's thesis has been turned into a published book, which Rushmore encourages.

If only Rushmore had been around when I was a teen. I could have sent my check, written my book reviews and a thesis, and subsequently strutted around with the title Dr. in front of my name. To be honest, being on the football team would have been more prestigious than calling myself "Dr.," so I guess it doesn't matter that my doctorate came years later, after reading a lot of technical books that make the Dale Carnegie classic look like kindergarten stuff.

The question Rushmore graduates must ask, and I would've asked even as a teen, is whether the degree is worth the tuition. You see, universities, the accredited kind, try to make sure that their graduates are able to perform on the job once they graduate. They do this by imparting some degree of rigor to the curriculum, requiring admissions tests, and assessing students' progress (by testing them). Rushmore, in my opinion, is lacking all of these characteristics. That's not to say that it's a diploma mill. Diploma mills require no work of their students. Rushmore does. It's just not very rigorous work that Rushmore requires.

There is a free rider issue in accredited universities, however, that sometimes weakens rigor, leads to a watering down of courses, and results in grade inflation. The downhill slide starts when student "consumers" raise a ruckus because standards are too high, at least in their opinions. In other words, students love an easy A. Ok, that's human nature--the something for nothing mentality. But if all students receive easy As, then the reputation of the university giving those easy As is going to hit the skids pretty fast.

A university whose graduates are found lacking by employers will find that employers won't hire more of those graduates. Then, the chickens come home to roost, as my grandmother used to say. The degree becomes worthless in the marketplace. A university that passes everybody on with high grades confers a degree that's devalued in the market place. The degree depreciates quicker than a '83 Yugo sold by Honest John's Used Auto Sales.

Thus, individually, students would like an easy course, easy grade, and easy degree. But collectively, it's in their interests to maintain rigor. In the case of unaccredited "universities" like Rushmore, the all-too-apparent lack of rigor is going to mean that most of its graduates will never teach at an accredited college or be viewed in the same light as someone with a degree from an accredited institution. Still, the degree may not be totally worthless. A diploma hanging on a wall is worth something as a status symbol. So is the right to call yourself Dr.

From what I've seen on his web site, Rushmore graduate Dr. Morton Middlefart is a cool guy from Denmark with a less than cool name. Like Dr. Middlefart, Rushmore graduates seem to be all male and already in the business world. If Rushmore can give them a boost in their careers, then who am I to criticize? I'm just not sure how much of a boost they're going to receive. Ultimately, unaccredited universities like Rushmore will have to pass the market test and demonstrate to prospective students that they're worth the cost of their tuition. That's the way of the free market.

University of London Study: How to Lower Your I.Q. by 10 Points

2005-06-26T00:30:00.000-07:00

Have you been feeling a little stupid lately? It may not be your imagination. A University of London study concludes: Emails, text messages, and phone messages can be hazardous to your ability to reason.

Respondents' minds were all over the place as they faced new questions and challenges every time an email dropped into their inbox.

The most damage was done, according to the survey, by the almost complete lack of discipline in handling emails. Dr Wilson [Dr. Glenn Wilson, who carried out the research] and his colleagues found a compulsion to reply to each new message, leading to constant changes of direction which inevitably tired and slowed down the brain.

The solution? Get a grip. Don't feel compelled to interrupt current projects to answer emails or text messages immediately unless they require an immediate response. You might just start feeling a little smarter again. Dr. Wilson offers his advice to employers: "Companies should encourage a more balanced and appropriate way of working."

"There is No Knowledge That is Not Power."

2005-06-21T13:36:00.000-07:00

Donald Trump

The quote from Emerson in the title of this post comes courtesy of Donald J. Trump. Yep, that Donald Trump. I signed on to the Trump University Inside Trump Tower Newsletter a few weeks ago. It's a good read. In the latest issue, Mr. Trump's article, "Use Knowledge to Your Advantage," offers several engaging vignettes illustrating how knowledge has worked to his advantage.

When I was waiting to buy 40 Wall Street (home of Trump University), it was advantageous for me to know a lot about the building and the troubles the owners were having with it. I spent time studying the building and the area, and kept informed about the latest developments. When the opportunity finally came to purchase it, I was ready and knew what I was getting into. The tallest building in lower Manhattan, 40 Wall Street is a 1.3 million square foot landmark. I bought it for $1 million. You can imagine what it’s worth now, considering it’s hard to find a one-bedroom apartment for under $1 million these days. When I say knowledge is power, I mean it. Use it to your advantage.

Another example is how I develop golf courses. I get the best experts in the world, and I ask them literally hundreds of questions. I go over every detail, every tree, every hole, every idea with them. Fortunately they love what they do, so they don’t find this tedious. By the time construction is underway, I know everything that’s being done and can keep an informed eye on the progress. There is no reason not to be thorough, whether you are the golf course architect or the developer. Teamwork really works when both sides put their knowledge together and aim for the best. Because of this approach, my golf courses are spectacular.

The lesson for students, whether taking courses at Trump University or elsewhere, is to make learning your priority. Don't let anything get in the way of learning. And remember, the details are important. I get the feeling that Donald Trump could do a pretty good job of designing a golf course without the experts, just because he pays attention to the details. He credits this idea from Kipling for his success:

Rudyard Kipling wrote something I read in college and have never forgotten: “I keep six honest serving men, they taught me all I knew—their names are What and Why and When—and How and Where and Who.” Finding the answers to those questions will ensure that your information is comprehensive and correct. There’s really no such thing as knowing too much about what you’re doing.

The best and the brightest people I've ever met sure fit the mold expressed in the previous sentence: There's no such thing as knowing too much about what you're doing. Especially when what you're doing involves the lives or livelihoods of people.

Yeah, I'd Fire 'Em, Too!

2005-06-21T12:00:00.000-07:00

From the Sydney Morning Herald comes the story of three former waiters (Larry, Moe, and Curly?) who claim they were fired by New York's posh 21 Club for being French. They've backed up their claim by filing a $5 million lawsuit claiming discrimination.

Not to give anyone the idea that I'd be in favor of discrimination, but I think I know the French. Rude, obnoxious, boastful, prideful, lazy. Oh, and anti-American. Shall I go on?

Wake up, guys! You weren't fired for being French. You were fired for acting French. You don't drink on the job and you don't get into arguments with the chef over a hamburger, even if the hamburger costs $39. You can hurl insults at Americans when you're a waiter in a restaurant in France, and maybe wine is so ubiquitous in France that drinking on the job is part of the culture, but this is America. Maybe nobody ever gets fired in France, either. But this is America. People can lose their jobs here. It's part of the reason our unemployment rate is 5 percent while yours is 12 percent. American businesses hire and they fire. From what I've read about France, once hired, never fired is the rule. That's why your companies won't hire anybody. Get it?

If the case of the French waiters goes before a jury, I'd bet on the 21 Club coming out a winner. And their customers, too!

There's Gold in Them Thar Meals!

2005-06-20T11:17:00.000-07:00

The headline caused me to do a double take: Restaurant to Stop Putting Gold in Food. I wouldn't exactly call what I've sometimes found in my Happy Meals gold, so on reading further I discovered that to get my daily dose of gold I'll have to go to Vietnam.

Hanoi's Kim Ngan Thien, or Golden Feast restaurant, serves up its dishes embellished with a unique seasoning--gold. In some Asian nations, gold is considered to have restorative and therapeutic value. You might think of the Golden Feast as something like a health food restaurant. In Economics 101, students are taught that product differentiation--the art of creating a unique product that consumers will desire--is one of the keys to business success. Maybe the Golden Feast will end up as a Harvard MBA case study of successful product differentiation. The restaurant has been serving about 100 diners daily since its opening last January.

Unfortunately for hungry customers with an appetite for gold dust, the government has ordered the restaurant to hold back that sparkly sprinkle for now. The effects on consumer health from consuming gold, even the small amounts served by the Golden Feast, needs to be established. Until then, diners will have to be satisfied with soy sauce. And the Golden Feast will have to give up the 15 percent surcharge on gold. As we say in economics, there's no such thing as a free lunch.

$40,000,000 or 40,000,000 Credit Cards? I'd Take the Credit Cards!

2005-06-18T23:47:00.000-07:00

In the old days, it was simple. You looked money over carefully to make sure it wasn't counterfeit BEFORE you accepted it. You safeguarded it in your purse or wallet, or tucked it under your mattress. You watched it like a hawk, where ever you put it. Money was a tangible thing. You could see it, feel it, smell it if you wanted to. No more.

Today, money is represented by electronic notations in a computer somewhere. Hackers, who could be staring at the dim glow of a computer screen anywhere in the world, can luck out and steal your credit card number. You might not lose any money, but you sure could be put through an emotional wringer until the charges against your card are forgiven.

The enormity of this week's compromise of 40,000,000 credit card numbers is hard to fathom.

"There's no excuse for this," said Avivah Litan, a Gartner Inc. expert on the security of financial data. "This takes the cake."

It didn't take long for the politicians to begin weighing in, too, hoping to curry favor with worried cardholders.

"Hardly a week goes by without startling new examples of breaches of sensitive personal data reminding us how important it is to pass a comprehensive identity-theft prevention bill in Congress quickly," said Sen. Charles E. Schumer (D-N.Y.), who has sponsored a consumer data protection law.

As for me, I'm listening to the advice of the experts and will watch my statement very carefully for fraudulent charges. Even if money isn't always tangible today, those electronic notations that represent money are just as spendable as the green paper and shiny coins of yesteryear!

QuickTake: The Case of the $6,000 Shower Curtain

2005-06-18T22:49:00.000-07:00

Dennis Kozlowski

Dennis Kozlowski, disgraced ex-CEO of Tyco International Ltd., had to have been a tough sell to the jury hearing charges the he and fellow Tyco executive Mark Swartz looted the company's treasury for over $500 million. Who would be willing to cut some slack to guy living in a $31 million apartment, complete with a $6,000 shower curtain. I, for one, would sure like to see that shower curtain!

QuickTake: S.O.P.--Stupid on Purpose

2005-06-16T02:27:00.000-07:00

From John Carlton's Rant comes this tidbit:

Most airlines are still giving out peanuts during flights. Do you know what the number one food to cause lifethreatening allergic reactions is? Yep. Peanuts. But it’s just been S.O.P. for the airlines for so long, they can’t break out of it. I’m watching for someone to sue the guts out of them. I know at least two people who clog up dangerously just breathing peanut dust. This allergy stuff is not secret.

John's take? Standard Operating Procedure (S.O.P.) sometimes stands for Stupid on Purpose!

QuickTake: A Housing Bubble? Chairman Greenspan is Dubious

2005-06-10T19:55:00.000-07:00

Don't look for significantly cheaper housing prices, said Federal Reserve Chairman Alan Greenspan in his June 9th testimony before Congress:

Because of the degree of customization of homes, it is difficult to achieve significant productivity gains in residential building despite the ongoing technological advances in other areas of our economy. As a result, productivity gains in residential construction have lagged behind the average productivity increases in the United States for many decades. This shortfall has been one of the reasons that house prices have consistently outpaced the general price level for many decades.

Although we certainly cannot rule out home price declines, especially in some local markets, these declines, were they to occur, likely would not have substantial macroeconomic implications.

The Corporate Blog Heats Up!

2005-06-10T19:10:00.000-07:00

I've mentioned in this blog on several occassions that I'm an admirer of GM and its Fastlane Blog. CNN reports that GM is just one of about 100 companies that now have their own blogs. Watch out, though, hundreds more are on the way. Why would a corporation decide to blog?

The Internet journal format, they find, lets businesses expand their reach, generate product buzz and encourage consumer loyalty while bypassing traditional media.

"When we feel that we need to get a direct response out there, we've certainly got this bully pulpit to some extent," said Michael Wiley, GM's director of new media. "It's a place where we can talk directly to people unfiltered." ...

... Done well, corporate blogs can create good word-of-mouth among consumers who aren't reading business pages or thumbing through trade magazines.

There are dangers, though.

But bad blogging can easily backfire. Readers will pick up insincerity instantly.

"Don't go toward fake blogs. Don't launch character blogs. Use a blog for what it's for, transparency," said Steve Rubel, vice president of client services at CooperKatz & Co., a New York PR firm.

Rubel follows blog news on his blog, Micro Persuasion, and runs his company's unit of the same name, advising clients on blogging and on podcasting, the suddenly fashionable creation of downloadable person-to-person broadcasts.

He and other PR professionals can rattle off blogs gone wrong -- usually "fake blogs" that stir up the ire of bloggers by hiding the fact that they are really ad campaigns, such as one McDonald's posted in advance of a Super Bowl campaign about a Lincoln-shaped french fry.

Blogs that smack of press releases won't do the job, Rubel said. He tells clients to see what's out there about their company or industry, then decide whether they want to engage bloggers or even start their own blogs.

The explosive growth of corporate blogs is just another example of competition in action in our economy. When one firm finds success at doing something new, others follow. Customers benefit from the competition. The next time, you're in the market for a new car, check out the GM Fastlane blog and ask yourself if GM is a company you'd like to do business with. Remember, if you do become a customer of GM and you're not satisfied, you can always create your own anti-GM blog. The GM Breakdown Blog, anyone?

Bono--An Economist/Statesman in the Making?

2005-06-10T18:52:00.000-07:00

Irish rocker, Bono

Bono's at it again. Lobbying, that is. For the world's poor. In Congress.

Yes, Irish singer Bono walks the walk on behalf of the poorest of the poor around the globe, especially those living a subsistence existence in Africa. And he's winning accolades for that effort.

Said former House Majority Leader Dick Armey, R-Texas: "I don't assume that a rock star is going to be lucid on the esoterics of economics." He gave Bono an "A-plus" for being well-informed and intensely devoted to the issues.

"I told him he's my favorite pest. He keeps coming back," said Senate Minority Whip Dick Durbin, D-Ill. "It's not unusual for members of Congress to be lobbied by stars and starlets. Usually it's a one-time stand. He's different. He clearly cares. He's clearly committed."

"He's transcended music," said former Rep. John Kasich, R-Ohio, who met Bono through Arnold Schwarzenegger and later introduced the musician to Helms and Sen. Rick Santorum, R-Pa. "He's gone from a rock band to a rock band with a purpose."

Said Santorum: "He knows the importance of 302b allocations," the arcane congressional terminology that refers to amount of money the appropriations committee doles out to each department and agency.

Bono is one smart cookie. He knows how to be taken seriously, even going so far as to study under Jeffrey Sachs, Professor of Economics at Columbia University. No one man show is Bono, either. DATA (Debt, Aids, Trade Africa) is the name of the nonprofit organization Bono founded in 2002. Record sales are not the only measure of a rock star. Not when his name is Bono.

I Love GM!

2005-06-10T18:20:00.000-07:00

2006 Chevrolet HHR

There aren't many companies that would create a blog that allows readers to criticize the company and its products. And criticize they do. I've never seen any other web site where the readers slam the company. I wish more companies were as diligent in their efforts to establish an honest online relationship with their customers as is GM.

Think for a moment about how conflicted the besieged company's management must have been about setting up the GM Fastlane Blog. The easy thing to have done would have been to turn off comments and use the blog as a typical sales promotion. Yet, GM had the guts to take the bouquets with the brickbats.

GM Vice Chairman is the author of the Fastlane blog. In today's post he wrote,

There are fundamental changes taking place in our product development organization that add up to a winning formula. These changes are largely cultural, and as most of you know, cultural change often takes time. I’m sure some of you may have read Malcolm Gladwell’s book The Tipping Point, in which he identifies how minor trends become blockbuster phenomena. Well, I firmly believe we have reached a tipping point in our organization.

A few years ago, planners would sift through reams of data, segment the market, analyze and deconstruct the data until they discovered a niche in which we needed a new product. Once the need for the vehicle was determined, the designers were given a formula to work with. Not a blank canvas, more like a paint-by-numbers scenario.

Today, we’re operating on a much more emotional, creative level and our designers have been empowered to express themselves. Our winning products will not be determined by careful analysis; they will captivate and enthrall through imaginative design and flawless execution.

We’ll be introducing a lot of new products that reflect another new philosophy of General Motors, which is not to introduce vehicles that are merely competitive, but to really target being the best. This has, frankly, also required some recalibration of the internal culture, especially in the United States. And it’s taken some time to lift ourselves to the best international standard in sheet metal fits.

That 2006 Chevy HHR (Heritage High Roof) in the picture says a lot about the progress GM is making in reclaiming its role as the world leader in automobile styling. There' s been a lot of negative news about GM coming out lately. Maybe I'll comment on that another time. For now, I'd rather say thanks to GM for having the vision to create a real blog and the courage to revamp its corporate culture. With folks like Bob Lutz at the top, I have a feeling that the bad news about GM is going to be just another pothole on the highway to success.

Before There Were Trucks, There Were Railroads, ... Before There Were Railroads, There Were ...

2005-06-07T14:49:00.000-07:00

A picturesque canal

... canals. I once had the opportunity to take a flatboat ride along a section of restored canal in central Ohio. Horses on the bank of the canal, the towpath, pulled a merry band of sightseers and history buffs along for a mile or so before turning around and returning us to our point of departure. Reliving history for a pleasant hour or so was enjoyable and educational. For people living in the pre-Civil War era, however, canals boosted economic development by providing a cheap transportation route for selling their goods over a wide area.

When I think of canals, I think of the northeastern states, like New York. It's good to know that some of the old canals are still around, even if their economic significance is diminished. Down south, where I grew up, canals weren't necessary because of navigable rivers, and because the iron horse was a more economical delivery system for goods by the time population levels reached critical mass in the south.

In Europe, the old canals seem to be alive and well. According to this information, several canals are still classed as working canals in Scotland. There seem to be a lot of canals in Britain.

Canal digging goes back a long way in history. In fact, economic historian Robert Fogel recognized the importance of canals in pre-civil war America:

Had the railroads not been invented, shipments would have taken place via canals, rivers, and wagons. Wagons being expensive and inefficient, they would have been useful only for short hauls to rivers or canals. Fogel concluded that the costs of wagon transport would have made agriculture economically feasible no more than roughly forty miles from any navigable waterway. Based on the system of canals in 1890, both in use and previously abandoned, Fogel was able to include 76 percent of all contemporary agricultural land within forty-mile buffer zones adjacent to the system of waterways. Nearly all of the agricultural land that fell outside the buffer zones, and hence would have been lost to the economy, were concentrated in the four states of Illinois, Iowa, Nebraska, and Kansas, meaning that the railroad's impact was felt most in the intraregional trade between farms in those states and the great primary markets of the Midwest.

One thing that hasn't changed in 200 years is that goods have to be transported from producers to consumers. Today, most goods are transported by truck or rail. I doubt that 200 years from now people will consider highways and railroad tracks to be as picturesque as the old canals.

Stop the Revolution--I Want to Get Off

2005-06-02T00:55:00.000-07:00

From New Scientist comes a frightening vision of our technology-enhanced future. Frightening that is if you care to spend time with an animal companion.

OK, to be fair, "Animals and Us: Forward to the Revolution" is primarily an intellectual discourse on the diverse relationships between humans and animals. On the one hand, we eat cows, chickens, and fish. On the other, we treat Pup and Kit just like members of the family. It can be hard to reconcile these divergent behaviors.

Suppose in a not-so-distant future that the glass domes that enclose human existence exclude the animals--all of them. Picture that future in your mind:

Beef steaks are grown from cell cultures, and robotic pets are good at everything from minding the kids to caring for the elderly. And we have supercomputers to simulate all the drugs and medical advances anyone could ever dream of.

So what happened? The "Animals have Intrinsic Worth" lobby won out, that's what happened. After a century of gently running down the stock, all animals were left outside the glass dome to find their own level: survive, evolve or die.

What brings about animal apartheid in the future? Partlly, its the way we're thinking about animals today. Animals, at least some of them, have come to be seen as more than just a commodity to be bought and sold:

Science has provided us with compelling evidence that animals are more like humans than we previously thought - at the very least, they are sentient. Where animals were seen as "agricultural products", now they are seen as creatures with feelings. This has been accepted by the European Union, which has put a definition of sentience in its animal welfare legislation: "A sentient animal is one for whom feelings matter." In deciding that they are sentient and have feelings, science has blurred the line between "them" and "us" even more.

Why all the fuss? What's wrong with the way we interact with animals at the moment? Nothing, if you don't accept that animals have their own feelings and emotions, or accept it but still don't care. But if you do care, then you will realise that the moral relationship we have with animals is deeply troubled. It becomes impossible to maintain moral blindness to the way we treat them.

When you consider that there are about 50 million dogs and another 50+ million cats in the U.S. alone, the cost of caring for pets must be enormous. Then consider that while most people do chow down with a side order of veggies, it's the meat--the animal--that's the main course. Add in the leather for shoes and belts, the fur used to make coats, and all the other economic contributions made by animals, and you probably have at least 15 percent of GDP.

A world without animals? Talk to the Native Americans, who saw the sacred buffalo driven to near extinction as the iron horse thundered across the prairies bringing a tidal wave of settlers who held no respect for the life of the grand beast. The legend of the buffalo dance offered the Blackfoot a promise that the lives of the buffalo killed for food would be restored to life. Where are the buffalo dancers today?

Who's Missing? CNN's Top 25 Business Leaders

2005-06-01T23:32:00.000-07:00

CNN's Top 25 business leaders:

1. Bill Gates, co-founder of Microsoft
2. Sam Walton, former CEO of Wal-Mart
3. Jack Welch, former CEO of General Electric
4. Warren Buffett, CEO of Berkshire Hathaway
5. Lee Iacocca, former CEO of Chrysler
6. Steve Jobs, CEO of Apple
7. Herb Kelleher, chairman of Southwest Airlines
8. Michael Dell, founder of Dell Computer
9. Alan Greenspan, chairman of the Federal Reserve
10. Carl Icahn, 1980s corporate raider
11. Andy Grove, former CEO of Intel
12. Michael Milken, former junk-bond wizard
13. John Reed, former CEO of Citigroup
14. Ted Turner, founder of CNN
15. Jim Clark, former CEO of Netscape
16. Meg Whitman, CEO of eBay
17. Jeff Bezos, founder of Amazon.com
18. Michael Eisner, CEO of Disney
19. Peter Lynch, manager of Fidelity's Magellan Fund
20. Phil Knight, CEO of Nike
21. Katharine Graham, late CEO of Washington Post Co.
22. W. Edwards Deming, influential business consultant
23. Ken Lay, former CEO of Enron
24. Shawn Fanning, founder of Napster
25. Lou Gerstner, former CEO of IBM

EconOpinion would like to note for the record that Ted Turner, the founder of CNN is on the list, but out of the top 10 at #14. Conflict of interest? The list clearly emphasizes contemporary people of prominence in business, but on the other hand, the #2 person on the list, Sam Walton, is deceased. CNN, what were the parameters for eligibility for inclusion on the list?

Biblical Economics--The Parable of the Talents

2005-06-01T22:46:00.000-07:00

The Wall Street Journal's Opinion Journal decided to tout some Biblical economics yesterday in response to comments from John Kerry: "I went back and reread the whole New Testament the other day. Nowhere in the three-year ministry of Jesus Christ did I find a suggestion at all, ever, anywhere, in any way whatsoever, that you ought to take the money from the poor, the opportunities from the poor and give them to the rich people."--John Kerry *

I thus give you the Parable of the Talents, which appears in Matthew 25:14-30 (a "talent" was a measure of both weight and money, analogous to the British pound):

"Again, it will be like a man going on a journey, who called his servants and entrusted his property to them. To one he gave five talents of money, to another two talents, and to another one talent, each according to his ability. Then he went on his journey. The man who had received the five talents went at once and put his money to work and gained five more. So also, the one with the two talents gained two more. But the man who had received the one talent went off, dug a hole in the ground and hid his master's money.
"After a long time the master of those servants returned and settled accounts with them. The man who had received the five talents brought the other five. 'Master,' he said, 'you entrusted me with five talents. See, I have gained five more.'
"His master replied, 'Well done, good and faithful servant! You have been faithful with a few things; I will put you in charge of many things. Come and share your master's happiness!'
"The man with the two talents also came. 'Master,' he said, 'you entrusted me with two talents; see, I have gained two more.'
"His master replied, 'Well done, good and faithful servant! You have been faithful with a few things; I will put you in charge of many things. Come and share your master's happiness!'
"Then the man who had received the one talent came. 'Master,' he said, 'I knew that you are a hard man, harvesting where you have not sown and gathering where you have not scattered seed. So I was afraid and went out and hid your talent in the ground. See, here is what belongs to you.'
"His master replied, 'You wicked, lazy servant! So you knew that I harvest where I have not sown and gather where I have not scattered seed? Well then, you should have put my money on deposit with the bankers, so that when I returned I would have received it back with interest.
" 'Take the talent from him and give it to the one who has the ten talents. For everyone who has will be given more, and he will have an abundance. Whoever does not have, even what he has will be taken from him. And throw that worthless servant outside, into the darkness, where there will be weeping and gnashing of teeth.' . . ."

Another version of this parable appears in Luke 19:11-27. Also relevant is the story of Jesus' anoiting at Bethany (John 12:1-8):

Six days before the Passover, Jesus arrived at Bethany, where Lazarus lived, whom Jesus had raised from the dead. Here a dinner was given in Jesus' honor. Martha served, while Lazarus was among those reclining at the table with him. Then Mary took about a pint of pure nard, an expensive perfume; she poured it on Jesus' feet and wiped his feet with her hair. And the house was filled with the fragrance of the perfume.
But one of his disciples, Judas Iscariot, who was later to betray him, objected, "Why wasn't this perfume sold and the money given to the poor? It was worth a year's wages." He did not say this because he cared about the poor but because he was a thief; as keeper of the money bag, he used to help himself to what was put into it.
"Leave her alone," Jesus replied. "It was intended that she should save this perfume for the day of my burial. You will always have the poor among you, but you will not always have me."
Another version of this story is in Matthew 26:7-12.

OK. I'm convinced that anyone can find something somewhere in the Bible to support his views, whatever those views are. But then again I already knew that from watching Pastor Robert Tilton on late night cable!

I Wish I Could Understand Japanese

2005-06-01T17:58:00.000-07:00

Japanese mystery singer

Web surfing is a wonderful hobby. I get the same enjoyment out of it as I did shortwave listening as a kid. You know, sitting in the dark with the light from the tubes to keep me company, delicately turning the dial of a shortwave radio, listening for signals bouncing thousands of miles through the atmosphere to my little listening post. Then trying to deciper the language. German, Austrian, Russian? Chinese, Japanese, or something else? If I was able to figure out the source of the signal, I could look up at the big world map pinned to wall and search for Hiversum, Holland or Quito, Ecuador, or other exotic locales.

The Internet is a lot like that. I found a video of the Japanese mystery singer on an Excite web page populated with artistic strokes making up an exotic font, apparently Japanese. If you like an edgy look and style, the singer in the picture is not for you. I liked her, though. Kind of a Japanese 70s Brady girl. I wish I knew a little more about her. Is she a popular singer in Japan? Does she have her own TV show?

It's just like shortwave listening. Sometimes I never was able to figure out anything much about the station that penetrated the static in a whisper. I have a feeling the same will be true about the Japanese mystery singer.

QuickTake: How to Pass a Drug Test

2005-06-01T17:49:00.000-07:00

The product is called the Whizzinator. You use it to pass a drug test. At least one athlete has apparently used it. An endorsement opportunity?

QuickTake: Don't Forget to Turn Out the Lights

2005-06-01T17:41:00.000-07:00

While exploring several news sources in Thailand, I came across this story about the government's campaign to reduce the country's oil import bill. Turn off your air conditioner during the lunch hour and turn off a light for five minutes in the evening and you'll have done your civic duty as a citizen of Thailand. Just in case doing your civic duty isn't motivation enough, the government announced discounts on electric bills for people who reduce their energy use compared to the same month a year ago.

Queer News, Indeed!

2005-06-01T17:12:00.000-07:00

Thailand's Phuket Gazette newspaper calls itself "The local paper with an international audience." It offers some tasty tidbits to readers in a featured page called Queer News. The flavor of the stories offered is captured by three sample opening sentences:

NAKHON SRI THAMMARAT: A man in Srichon District put a shotgun in his mouth and blew his brains out after his wife refused to let him attend a neighbor’s funeral with her.

NAKHON NAYOK: The recent spate of incidents involving insects laying their eggs in human orifices took a new and disturbing turn on May 8, when the mother of a newborn found 10 maggots living inside the bellybutton of her two-day-old son.

SURAT THANI: Tourists arriving on the island of Pha-ngan in Surat Thani Province are to be issued with stickers reminding them that “free sex” is illegal, following government concern over visitors having sexual intercourse in public places.

You can read the rest of each story by following the link provided in this post.

I'm not sure but I think the purpose of stories like these is to remind readers of the Gazette that no matter how bad their problems are, there are plenty of other people facing even worse situations. That's a valuable service in today's stressed-out world. One that draws an audience of readers. In turn, the readership creates a market for advertising on the pages of the Gazette. Another win-win outcome for the economy of Phuket and for that international audience the Gazette boasts of having.

The Book as Blog

2005-05-28T22:38:00.000-07:00

Harvey Mackey's Beware the Naked Man Who Offers You His Shirt sat tantilizingly on the thrift store shelf. For a mere 75 cents I could have a copy of the book that followed on the heels of Mackey's 1988 bestseller, Swim with the Sharks Without Being Eaten Alive. Naturally, I grabbed the book, took a seat, and began turning pages randomly.

Surprise! Mackey is, for want of a better term, a print blogger. In other words the book reads like a series of posts on a business blog. Mackey's format anticipated web logs by a half dozen years or more! If the Internet had been then what it is now, perhaps Mackey would have been a blogger before becoming a published author. Here's a sample:

Spend some time in the trenches.There is no dirty work in your business. One way to prove how important every job is and everyone is, is to take on the job yourself. If you believe there is no such thing as a good job with a shovel, then so does the guy who has the job. You can't expect his attitude to be any better than yours. At least once a year, I'll spend a day at one of the jobs at my company generally regarded as menial. It's not a stunt; I don't announce it in advance or announce it afterward, either. I don't hire a photographer to record it; the house organ does not carry a story about it. I just do it. Believe me, that's enough. Word gets around. And more than once a year, I will go out with a salesperson on his or her calls. That works, too.

The thrift store economy keeps classic books like this one circulating. Anyone can easily find out the New York Times and Amazon.com best sellers. But for a lot of Americans, some living on a limited income and some not, the thrift stores offer a source of affordable reading. And a few surprises, too!

QuickTake: The AARP's Tearin' Down the House

2005-05-28T22:30:00.000-07:00

I happened to catch an American Association of Retired Persons (AARP) TV spot last night. Picture Social Security as a surburban ranch and personal accounts as a wrecking ball. Watch the wrecking ball destroy the house. Associate the destruction of Social Security with adoption of personal accounts and the commercial's done its job.

Outrageous exaggeration like this doesn't help shape a rational public debate on Social Security reform. But maybe that's the AARP's intent.

Getting and Keeping a Job Through KM Expertise

2005-05-26T16:21:00.000-07:00

How to get and keep a good job ... that's an issue in the minds of many Americans today. In this post I'll introduce you to KM--Knowledge Management--a skill that everyone must have to prosper in the 21st century economy.

Every Economics 101 course at some point brings up the significance of human capital--skills, knowledge, and abilities--to an economy. Human capital in today's world is more important than physical capital as a generator of wealth. The right human capital can also enhance individual job security.

As mentioned in my previous post, information hoarding is destructive to an organization, and hinders economic efficiency. As workers in the information economy, we must know how to beat information hoarders by making use of technology to access information and effectively utilize it.

Organizations are increasingly utilizing KM experts to break down information bottlenecks. However, to a certain extent each individual must be his or her own KM expert, fighting information overload on the one hand and information hoarders on the other.

KM consultant Edward Truch proposes the 5 Es of successful knowledge management:

1. Engagement: top management teams must engage and persuade across the company.
2. Empowerment: empowering people to act effectively and with authority.
3. Entitlement: opening access to information across the organisation.
4. Enablement: providing specific support systems across the company (e.g., Intranets and knowledge tools)
5. Environment: creating work environments conducive to meeting and sharing knowledge.

Truch speculates that as people become more aware of the significance of KM to their own success, the success of their organization, and to the economy, he or she who masters the technology associated with effective KM will possess essential intellectual capital. It could be the difference between having a job and a place in the unemployment line.

Information Hoarding--Building Personal Empires at the Expense of Others

2005-05-24T21:13:00.000-07:00

Quick, what's the I in IT stand for? If you said information, go to the head of the class. In the days when computers were mainframe rather than personal, the IT office would have had the initials DP, which stands for data processing. Processing data is not enough in today's economy, however. For an organization to function efficiently requires that people have information.

Because information confers power on those who have it, there are likely to be many information bottlenecks in an organization. Some people build empires by hoarding information. It's a way to ensure job security. It's a way to increase a budget. It's also a way to ensure that an organization remains backward and inefficient. But for information hoarders, what's good for the organization doesn't matter.

If EconOpinion had a magic bullet to cure organizations of information hoarding, EconOpinion would be out on the lecture circuit rubbing shoulders with Zig Ziglar, Tom Peters, and Tony Robbins. One obstacle to joining the lecture circuit is that information hoarding is invisible. It's not obvious, nor are its effects on the bottom line. To be interested in a cure for a disease, you have to be aware that you've got the disease.

There are a couple of steps that organizations can take to reduce information hoarding. One is to create a culture of collaboration. When people are working in teams, all striving to achieve a common goal, information that bears upon the reaching of that goal is less likely to be kept secret. The second involves the leadership style of top management. When the group at the top freely shares information, it sets an example.

Perhaps the best way to strike down information hoarding is to flowchart the ideal flow of information. The technique, which you should be warned is EconOpinion's untested innovation, starts with identifying the ideal set of information that a group of people within an organization should have in order to do their jobs well. Survey them to test their actual information against the ideal. Then investigate why they lack the vital information that they do not have. Track the flow of information backward to identify bottlenecks.

Information hoarders are a drag on economic efficiency. They are thieves just as much as the burglars and shoplifters who sit in our jails. They need to be rooted out and counseled to change. If change is not forthcoming, they should be shown the exit. The others in the organization--those who strive to make it better--deserve no less.

Sacramento's Needy Pets Get Meals on Wheels Too

2005-05-24T19:55:00.000-07:00

I love this story from the Sacramento Bee. While the social safety net provides for needy humans, too often their animal companions are left out. In Sacramento, California, that's no longer the case since the launch of Meals on Wheels/Pets Eat Too.

The motivation behind this innovation is simple. Needy clients of the human Meals on Wheels program were sharing their meals with their pets. And who wouldn't share with a family member? That's the way many folks see their dogs and cats--as family members.

Now Pup and Kitty can eat their own delivered-to-their-doorstep meals. But it wouldn't surprise EconOpinion a bit if the lucky canines and felines who benefit from Pets Eat Too are still offered a little treat from their owners' plates once in a while.

QuickTake: FOMC Sees Uncertainty

2005-05-24T19:34:00.000-07:00

From the Federal Open Market Committee minutes of May 3, 2005 (bolding by EconOpinion):

In their discussion of current conditions and the economic outlook, meeting participants observed that incoming data over the intermeeting period hinted at possible upside risks for inflation and downside risks for economic growth. Earlier increases in energy prices seemed to be an important factor contributing to an uptick in core inflation and a slower pace of economic activity. With energy prices leveling out more recently, however, and the behavior of compensation suggesting a lack of pressure in labor markets, underlying inflation appeared to remain contained. The weakness in spending was widespread and could not be completely dismissed, but it had appeared only very recently and could be a product of the inherent noisiness of high-frequency economic data. On balance, economic fundamentals including low interest rates, robust underlying productivity growth, and strengthened business balance sheets were expected to support economic growth at a pace sufficient to gradually eliminate remaining slack in resource utilization. Although the economic outlook generally seemed favorable, there was also broad recognition of greater uncertainty attending the outlook for both inflation and output growth.

REPOST OF MY FAVORITE STORY: This Dog is a Blogger ...

2005-05-23T23:53:00.000-07:00

Shrek, the blogging dog. I'm repeating this story from its original Saturday post because it's such a great story. Enjoy.

... and for proof, click on the title of this post and be transported to Shrek's DogBlog.

Shrek lives in Australia, which EconOpinon thinks of as a law-abiding country. But some neer-do-well "kidnapped" the handsome German Shepherd pup when he became lost after he slipped his collar while playing in the park. Shrek's reckless romp and poor sense of direction set off the long chain of events that turned him into the world's first dog blogger.

In his own barks, er ... words, Shrek blogs about the loneliness and distress that he experienced while separated from his mum and dad. This is one dog tale (pun intended) that has a happy ending, though. Shrek is ultimately reunited with his two-legged parents, but not without the help of some nice policemen. Shrek's story isn't quite over yet since he and his mum and dad will be walking to benefit animals in Australia's million paw march. Celebrity hasn't gone to his head, but the big shepherd does promise to give each of his admirers along the march route a pawtograph if they would like one.

EconOpinion is impressed by Shrek's cleverness in using the power of blogging to make his way safely back home. Other clever canines and even clever felines might utilize the resources provided by the blogosphere to achieve that same happy ending should they become lost.

(P.S. to all novice blog readers: You read blog posts from the bottom up because the most recent posts appear at the top. Shrek's first post was on April 22, which is the one that should be read first on Shrek's DogBlog even though it starts toward the bottom of his Web page.)

Yes, Dr. Greenspan, But What About the Price at the Pump?

2005-05-23T23:45:00.000-07:00

This quote was selected from Federal Reserve Chairman Alan Greenspan's speech on energy, given May 20, 2005 before the Economic Club of New York:

But if history is any guide, should higher prices persist, energy use over time will continue to decline relative to gross domestic product (GDP). In the wake of sharply higher prices, the energy intensity of the United States economy has been reduced about half since the early 1970s. Much of that displacement was achieved by 1985. Progress in reducing energy intensity has continued since then, but at a lessened pace.

This more-modest rate of decline in energy intensity should not be surprising, given the generally lower level of real oil prices that prevailed between 1985 and 2000. With real energy prices again on the rise, more-rapid decreases in the intensity of use in the years ahead seem virtually inevitable. As would be expected, long-term demand elasticities have proved noticeably higher than those evident in the short term.

EconOpinion understands, but still would like to know if the price at the pump will be higher or lower the next time Americans fill up their tanks.

Just When You Thought It Was Safe to Listen to the Radio Again

2005-05-23T20:08:00.000-07:00

A Spice Girls reunion? Believe it!

Unlikely as it may seem, the Spice Girls are seriously considering a reunion. Out of sight and out of mind after their breakup, the girls just might be tempted back into the spotlight by the promise of a $24 million payday. That's $24 million each!

Rumors have it that their first get together in five or six years will happen sometime next year at the new Wembley Stadium in Britain. Will they tour again? Will anybody care?

It's rare for fads to be successfully resurrected. The pet rock is probably still waiting for a second chance. Maybe the promoters who are working to put together the Spice Girls for a second run at fame and fortune have rocks in their head. Time will tell.

QuickTake: Statutory Rape Among Fletcher Christian's Descendants

2005-05-23T19:53:00.000-07:00

Pitcairn Island, population 47. And now six of them are convicted sex offenders. EconOpinion ventures to say that if these men had committed their crimes in Texas, the home of EconOpinion, that they would be serving 60 year sentences, not three years. Either there's something screwy with the statutory rape laws in other countries or in Texas. I'll let you decide.

QuickTake: A $20,000 Bra--What an Uplifting Story!

2005-05-23T19:22:00.000-07:00

I can't resist blogging another story from the always informative HBS Working Knowledge e-newsletter. It seems that there's a Business Plan Contest at the Harvard B-school that offers $10,000 in cash plus another $10,000 in in-kind services to the winner. This year's winner, Karen Grajwer, reflected on her own full figure and dashed off a plan for Uplift, a venture that will cater to women who need larger-size bras and who want a bit of fashion to go with the support. Who would have guessed that the bra market is worth almost $5 billion, and that larger sizes account for nearly $800 million? Ms. Grajwer offers the following advice to other entrepreneurs: Surround yourself with a good team and know your market.

Sinking Globalization: What's The World Coming To?

2005-05-23T18:25:00.000-07:00

Harvard Professor Niall Ferguson predicts possible de-globalization of the world economy

The HBS Working Knowledge e-newsletter features an interview with Dr. Niall Ferguson in which he identifies scenarios that could lead to the de-globalization of the economy. He warns that the precarious state of international relations today could bring an end to the world as we know it. As an historian, the basis for his fears is in the similarities between current world conditions and those that prevailed in 1914, which year marked the end of the first great era of globalization and the start of World War I.

The professor identifies tensions between the U.S. and China as a source of trouble. The post on EconOpinion on May 19 identifies one of many specific causes of that tension (see Textile Imports from China--A Quota Without Teeth?). There are many others, including the status of Taiwan.

It's easy to see the stresses created by the effects of globalism. Here in the U.S., the issue of illegal border crossings recently came to a head with the Minutemen controversy. In Europe, the upcoming vote on the EU constitution is causing some leaders to wonder whether the EU will hold together.

As nations turn inward, globalism could end with a whimper rather than a bang. Alternatively, Dr. Ferguson notes a worst-case scenario:

There is a real danger that Taiwan could be what Belgium was in 1914: the small state over which two great powers went to war without either quite meaning to.

For the sake of us all, if globalism needs to be cut down somewhat, let it be through peaceful means. Of course, that's probably what they were saying in 1914, too.

This Dog is a Blogger ...

2005-05-21T02:55:00.000-07:00

Shrek, the blogging dog

... and for proof, click on the title of this post and be transported to Shrek's DogBlog.

Shrek lives in Australia, which EconOpinon thinks of as a law-abiding country. But some neer-do-well "kidnapped" the handsome German Shepherd pup when he became lost after he slipped his collar while playing in the park. Shrek's reckless romp and poor sense of direction set off the long chain of events that turned him into the world's first dog blogger.

In his own barks, er ... words, Shrek blogs about the loneliness and distress that he experienced while separated from his mum and dad. This is one dog tale (pun intended) that has a happy ending, though. Shrek is ultimately reunited with his two-legged parents, but not without the help of some nice policemen. Shrek's story isn't quite over yet since he and his mum and dad will be walking to benefit animals in Australia's million paw march. Celebrity hasn't gone to his head, but the big shepherd does promise to give each of his admirers along the march route a pawtograph if they would like one.

EconOpinion is impressed by Shrek's cleverness in using the power of blogging to make his way safely back home. Other clever canines and even clever felines might utilize the resources provided by the blogosphere to achieve that same happy ending should they become lost.

(P.S. to all novice blog readers: You read blog posts from the bottom up because the most recent posts appear at the top. Shrek's first post was on April 22, which is the one that should be read first on Shrek's DogBlog even though it starts toward the bottom of his Web page.)

An Angel Sayeth: Be Grateful for the Free Market

2005-05-21T01:16:00.000-07:00

Who says that spiritual values can't flourish in the free market? That ultimate free market resource, the Internet, shows us otherwise. The linked web page in this post is just one of many examples of the free market at its best--providing opportunities for nonmaterialistic values to be heard above the din of soul-deadening claptrap put out by hundreds of thousands of Internet pitchmen.

Gratefulness.org is devoted to . . . you guessed it, making people feel GRATEFUL. Here's what one visitor to the web site had to say:

Gratefulness.org reminds us that in the use of technology, we can choose to do good, bringing people of the world closer together. I am grateful to the connection I feel to all of you, no matter where you live. — Leslie, Ohio

I found this feature on the web site, too:

WORD FOR THE DAY
Saturday, May. 21

Prosperity depends more on wanting what you have than having what you want.
Geoffrey F. Abert

There's a lot more to explore at Brother David's Gratefulness web site. Angels, animals, grief, and joy are just of few of the things you'll be gratefully thinking about long after you've left the attractively designed pages.

EconOpinion recognizes that the economy is made up of more than just demanders, suppliers, and policy wonks. It's made up of people whose needs go beyond a BMW in every garage and chicken mole in every pot. Brother David is a soldier in the army of servant-leaders who are quietly nourishing our spiritual appetites.

QuickTake: A Leader Looks Inward

2005-05-20T22:21:00.000-07:00

An economy can't thrive without leadership. Joe Jaworski, founder of the American Leadership Institute, offers this definition:

Most leadership programs begin with a description of the attributes of the leader -- a leader has vision, a leader has courage, a leader inspires others. All of that's fine; it's very important. But what's leadership really all about? To me, leadership is a journey toward wholeness. A leader's journey starts by looking inward to understand, Why am I here? What is it that I'm here to do?

Here's a link to his book, The Inner Path of Leadership.

QuickTake: This Forehead for Sale

2005-05-20T22:12:00.000-07:00

Talk about immediate confirmation of a point. A few seconds after posting the previous item, I found the humanadspace.com web site, which offers to provide body advertising. There I learned that the female college student in the previous post was not the first to auction off body billboards. The creator of Human Ad Space auctioned off his forehead space earlier this year, earning a high bid of $37,000.

There's something wacky about this. Once was enough. Twice is too much. EconOpinion hopes we've seen the last of it.

QuickTake: Sex Sells? So What Else is New?

2005-05-20T21:48:00.000-07:00

Advertising space for sale here.

The pretty college student in the picture has sold advertising space on her body through an e-bay auction. The winning bid was $11,300. In economics we call this outcome first mover advantage. I predict that the next body up for auction will command far less than $11,300 and generate far less publicity. Just as in a horse race, sometimes it pays to be first!

The Gender Gap--More Than Just Pay

2005-05-19T20:36:00.000-07:00

Gender differences manifest themselves in diverse ways, including in preferences toward entertainment. I don't want to become the subject of criticism similar to that received by Larry Summers, so I'll not speculate on whether these differences are innate or the result of nurture. All I know for sure is that when I was growing up all the boys loved Larry, Curly, and Moe, and the girls couldn't stand them.

If women today were adventurous enough to pick up and read some of the books found on a man's bookshelf, they would react about the same as the girls of my youth did toward the Stooges. Ditto for the man brave enough to venture into the reading territory women have staked out for themselves. Whether it's books, TV shows, movies, or video games, women tend to prefer one genre and men another.

The books of Erica James and Chris Ryan exemplify the gender divide in pleasure reading. Ms. James' heroine, Harriet, lives her life in striking contrast to that of Mr. Ryan's hero, Matt:

Matt, generally to be found spraying the room with bullets, would not fit in well to the world of Love and Devotion; nor would Harriet cope impressively with the deadly assassins of The Increment, despite her cute beret. These worlds can never meet. Somehow their readers must, though, as they lie side by side on the beach. Or more likely back to back.

Yes, men and women must meet, and not just on the beach. And not back to back either. Shared values bring men and women together to raise children, work side-by-side, . . . to create civilization. If one sex brings pepper to the table at dinner time, then is the world worse off because the other brings salt?

QuickTake: U.S. Says al Qaeda Hurting for Funds

2005-05-19T19:57:00.000-07:00

Even terrorists have to worry about their own personal economies. Economic sanctions against countries have a long history, although they haven't been very successful. Applying sanctions against terrorists is even more difficult since there is no obvious target.

Starving the beast won't kill it, but it might slow it down.

QuickTake: Kudzu Cuts Alcohol Consumption

2005-05-19T19:49:00.000-07:00

I've seen kudzu cover just about everything in the south. In fact, I was warned by one old timer not to stand still too long or I'd be covered in it too. It grows pretty fast, but I think the old timer was pulling my leg.

The news that kudzu reduces the consumption of alcohol is good for people who'd like to cut back but can't. It's also a positive for the economy since the overconsumption of alcohol is costly in terms of sick days, accidents, and inefficiency. I wonder if we'll soon be seeing kudzu farms, with the price of kudzu right up there with the price of soybeans.

QuickTake: All the Persuasive Power In the World for a Mere $1.48

2005-05-19T02:36:00.000-07:00

Dr. Robert Cialdini's Power of Persuasion is available as an audio file for the bargain price of $1.48. Just click on the title and head over to audible.com. You can listen to a sample that just might convince you that Dr. Cialdini is a genius.

QuickTake: Mandated Moonshine in Your Tank?

2005-05-19T01:16:00.000-07:00

Ethanol comes from corn, which means the big farm lobby is for it. So is Senator Pete Domenici (R-New Mexico). The Senator proposes that the U.S. use 6 to 8 billion barrels of ethanol in fueling our automobiles. What do the automakers and petroleum refiners say? Look for a lively debate on this proposal in the near future.

QuickTake: Good News for Toyota and GM

2005-05-19T01:07:00.000-07:00

The J.D. Power survey shows that Toyota and GM had the best initial build quality in 18 categories. GM Vice Chairman Bob Lutz gives a nice response to the good news on the GM FastLane Blog.

QuickTake: Red--The Color of Winners

2005-05-19T00:31:00.000-07:00

This story about the association between wearing red and winning in sports was linked on the Drudge Report today. I immediately thought of the allegations that wearing a red "power tie" can help make a man a winner in the business world.

No one taught me these things in school. I'm so angry about it that I'm seeing red. . . Now I've cooled off, but I'm embarrassed at my anger and my face is turning red. How can I possibly keep up with all the things I need to know to get through life. Oh well, I'd better add some red to my wardrobe instead of my face.

Textile Imports from China--A Quota Without Teeth?

2005-05-19T00:04:00.000-07:00

As an economics teacher, it's easy to go into the classroom and say that import restrictions are bad. And in fact, I do my duty and say exactly that. Convincingly, I would judge. When I'm a consumer, things are not always so cut and dried. The problem I have is that I've found so many Chinese-made goods to be of absymal quality--so much so that I'd rather run around in my tattered old clothes looking like a young Jed Clampett than buy new ones made in China. With that opinion of Chinese goods in mind, I took a look at the import quotas announced today by the Department of Commerce's International Trade Administration (ITA). You can read the news release yourself by clicking on the title to this post.

The purpose of a quota is to reduce the amount imported. These quotas, which apply to several specific categories of textiles, have been set 7.5 percent above the level of imports last year. Unless Chinese imports of the products in question were expected to be more than 7.5 percent greater than last year, then these quotas were set with the realization that they would not actually reduce imports. Why would the government impose a quota with no effect? The U.S. has fired the proverbial warning shot across the bow at China. Talks between the two governments are to begin shortly to try to settle the issue amicably. As Theordore Roosevelt put it, "Walk softly, but carry a big stick." The threat of serious import quotas is that big stick.

U.S. consumers might have to pay a little more for their clothing, depending on how the negotiations turn out. As for me, I just hope the Chinese figure out how to do cheap AND good instead of just cheap!
______________________________________________________
Larry Kudlow's Money Politic$ blog has a post today about China's currency that complements this post nicely.

When I Was a Kid . . .

2005-05-18T18:36:00.000-07:00

. . . cars used to look like this.

I wish they still did. The economics of car production and ownership changed it all.

That sexy 1957 Nash Ambassador Custom in the picture bespoke the exuberance of the 1950s. From the white-on-red paint to the gleaming chrome grille and bumpers, this is a car that reflected 1950s post-war prosperity. Let a two-tone paint scheme replace the old-fashioned single color. And forget Henry Ford's earlier admonition that you could have your car in any color you wanted, so long as it was black. If one headlight per side was necessary, then let's do the unnecessary and double the number. And if airpower helped win the war, then let's make our cars look as if they stand ready to take off and fly at our command. What a driveway decoration!

Today's bland, boring, look-a-like cars speak of not much other than decades of government safety regulation and fuel economy standards. Chrome is out because it weighs down a car. Plastic is in because it's light, and the weight saved marginally improves fuel economy.

Because of preservationists we can still see the old beauties. On special weekends, they're trotted out of the suburban three-car garages where they slumber most days. Their engines are fired to life as they get the chance to once again travel the open road. Today's cars should be so lucky 50 years from now.

Superblog: The Huffington Post Celebrates Its First Anniversary

2005-05-16T19:19:00.000-07:00

It's a week old now and I don't care about all these negative reviews. The Huffington Post rocks. This is one addicting web page. Let's see why.

The selection of news content: Excellent, a combination of the top stories of the day and little offbeat items.
The two column look in which the news is presented: Excellent, easy to read.
The "in brief" link that allows me to spend 10 seconds absorbing the gist of a story and deciding whether to click and read the whole thing. Excellent, and a big improvement over Drudge.
The "click to comment" on each news item. Great innovation.
The use of color on the front page. Outstanding, with the teal graphics, combining beautifully with the red and black fonts on a white background.
The lack of ads. Great, none of those annoying popups like on Drudge.
The sign up box for email updates. Nice touch.
The contact box for reporting scoops. Nice, but I wonder how many they've had.

This baby's like a sexy new car that makes last year's model look like a peacock stripped of its feathers . But how does she perform on the road?

The attention to detail continues with the wider left hand column that gathers Arianna's intro and all the previews of the blogs of the day together. That little bit of extra column width is important. The blog previews are set off subtlety but clearly from the news because of it. And what blogs. Before I actually read The Huffington Post the comments I'd seen had made me believe I'd better brace myself for airhead, wacko-vegetarian, new-age, far-left, blogger lite. It hasn't been that way at all. Why would it surprise anyone that Walter Cronkite and mystery writer Roger Simon can think clearly and write well? Why would the blogging community tar and feather the 250-strong stable of bloggers that Arianna has put together? Jealousy? Until The Huffinton Post features Paris Hilton mouthing off about how cute her feet are, let's show some appreciation for the work it took to get these folks into the blogosphere.

There's one improvement that would make this superblog perfect. It's obvious that readers would like to weigh in with comments on the blogs. That's not allowed. At least not yet. Arianna, do it. That change would make The Huffington Post the closest thing to a true town meeting on the Internet. And make for one heck of a read!

Quotations from Chairman Greenspan

2005-05-15T18:56:00.000-07:00

From Alan Greenspan's Wharton address on Sunday, May, 15, 2005:

The principles governing business behavior are an essential support to voluntary exchange, the defining characteristic of free markets. Voluntary exchange, in turn, implies trust in the word of those with whom we do business. To be sure, all market economies require a rule of law to function--laws of contracts, rights to property, and a general protection of citizens from arbitrary actions of the state. Yet, if even a small fraction of legally binding transactions required adjudication, our court systems would be swamped into immobility, and a rule of law would be unenforceable.
Of necessity, therefore, in virtually all our transactions, whether with customers or with colleagues, with friends or with strangers, we rely on the word of those with whom we do business. If we could not do so, goods and services could not be exchanged efficiently.

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Moreover, even when followed to the letter, laws guide only a few of the day-to-day decisions required of business and financial managers. The rest are governed by whatever personal code of values market participants bring to the table.

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Trust as the necessary condition for commerce was particularly evident in freewheeling nineteenth-century America, where reputation became a valued asset. Throughout much of that century, laissez-faire reigned in the United States as elsewhere, and caveat emptor was the prevailing prescription for guarding against wide-open trading practices. In such an environment, a reputation for honest dealing, which many feared was in short supply, was particularly valued. Even those inclined to be less than scrupulous in their personal dealings had to adhere to a more ethical standard in their market transactions, or they risked being driven out of business.

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But material success is possible in this world, and far more satisfying, when it comes without exploiting others. The true measure of a career is to be able to be content, even proud, that you succeeded through your own endeavors without leaving a trail of casualties in your wake.

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Prejudice of whatever stripe is unworthy of a society built on individual merit. A free market capitalist system cannot operate fully effectively unless all participants in the economy are given opportunities to achieve their best. If we succeed in opening up opportunities to everyone, our national affluence will almost surely become more widespread. Of even greater import is that all Americans recognize that they are part of a system that is fair and worthy of support.

Wal-Mart To Apologize--Is the Point Being Overlooked?

2005-05-14T00:53:00.000-07:00

Maybe Wal-Mart needs better public relations. Or maybe the retailing giant needs to fight back. I'll let you decide.

OK, so the ad was a little over the top. A Nazi book burning was presented as analogous to a proposed ordinance that would have forbidden the company from expanding its store in Flagstaff, Arizona. Now we learn that Wal-Mart has caved to its critics and will run another ad apologizing for the first ad.

The point that the company was trying to make has apparently been lost. Private property means just that. It's private, not public. My opinion is that ordinances that change the rules after the fact violate Wal-Mart's freedom to use its property as it sees fit. If the ordinance had already been on the books when Wal-Mart bought the property, maybe that's a different story. I think I see a coalition of Wal-Mart haters and competitors using the government to accomplish what they can't achieve through persuasion, which is to get people to stop shopping at Wal-Mart.

Perhaps the ad was tasteless, as critics charge, but the nerve of those who would impose their will through government instead of the market is beyond tasteless. Let's hope the voters reject on principle the ordinance and let shoppers decide whether that store expansion was a good idea.

Sex Tourists--Solicit Them and They Will Come

2005-05-13T21:25:00.000-07:00

After reading Alex Renton's eyewitness account of prostitution in Thailand, I would advise sex tourists, pedophiles, and perverts headed that way to rethink their summer vacation plans.

Renton's sifting through the numbers suggests nearly a million men a year hop a plane to Thailand with images of nubile, compliant nymphettes dancing in their heads. Sex tourists are a diverse bunch--American, European, Japanese, and Australian. These are men eager to get down-and-dirty with one or more of the 2-million-strong army of Thai prostitutes. Highly coveted by pedophiles are the childen, who it is said offer "yum-yum" or "boom-boom" for a few dollars a sordid act.

Although the true facts are hard to come by, Renton's investigation of the oldest profession concludes that the number of prostitutes in Thailand is lower and their ages higher than is commonly reported. The actual number of prostitutes is closer to 150,000 than to 2 million. Likewise, reports of children involved in prostitution are difficult to verify and the numbers are probably inflated significantly.

Make no mistake, though, prostitution flourishes in Thailand, even though it is illegal. If reports of its extent are exaggerated and that brings in more free-spending sex tourists, then who's going to complain? Not the prostitutes, the pimps, the bar owners, the cabbies, the airlines, the hotels--everyone who makes money from tourism. Neither will the 21 international agencies based in Thailand to fight the sexual enslavement of women and children. If the true dimensions of the sex industry are overstated, it's easier for them to get money to fight it.

If some pedophiles return from Thailand unable to find what they wanted, then good! They might complain, but I have the feeling no one's going to have much sympathy for them.

QuickTake: A Sin Tax the Sinners Asked For

2005-05-12T17:11:00.000-07:00

The Tax Foundation's Tax Policy Blog features a story about Nevada brothel owners promoting a state tax on prostitution. Haven't brothel owners heard the saying, "Don't tax you, don't tax me, tax that fellow behind the tree"?

As you might guess, brothel owners have an ulterior motive in this case. They expect that taxing prostitution would help legitimize it. Get the state's politicians accustomed to the idea that prostitution enriches state government coffers, and then away we go. More brothels, bigger brothels, better locations, advertising. The sky's the limit.

States used to be officially opposed to gambling. No more. Will the same hold true for prostitution? Time will tell.

QuickTake: Dog Crate Hotel

2005-05-11T23:30:00.000-07:00

I understand that it's expensive to be a tourist in Japan. I'll probably never go there, but if I did I might be willing to save money by spending the night in a dog crate. Well, not actually a dog crate. The Japanese are ingenious. They've come up with the idea of a capsule hotel. The capsules remind me of the kennel area in a vet's office. They are little sleeping compartments, one stacked on top of another.

If Elvis were alive to see this, he might change the lyrics of that big hit song of his to

Since my baby left me, I've found a new place to dwell,
It's down at the end of lonely street at the dog crate hotel . . .

QuickTake: Yahoo! Chases Big-Spending Neos

2005-05-11T19:03:00.000-07:00

From the Sydney Morning Herald in Australia comes this story about the tribe of free-spending "neos:"

Neos were first identified in Australia nearly three years ago and are rapidly igniting international interest as a group of consumption leaders who represent 24 per cent of the population but account for 54 per cent of discretionary spending.

I think we had a similar group in America some years ago. We called them yuppies. Where have all the yuppies gone? Perhaps they immigrated to Australia to lose that label. It wasn't good to be identified as a yuppie. I wonder how the neos of Australia feel about being so labeled.

2005-05-11T17:58:00.000-07:00

Bill Gates is in the lower left corner of the picture.

The Fed and Monetary Policy

2005-05-10T15:23:00.000-07:00

The Fed Uses This Letterhead

Most people have never seen a Federal Reserve Press Release. Instead, they rely on newspapers, TV, and the Internet to keep them informed and to interpret the Fed's monetary policy actions. Because of the Internet, you can do it yourself.

Copied and pasted below is the latest press release, indicating a tightening of monetary policy by the Fed. I've read that this is the eighth time in a row that the Fed has announced an increase in the federal funds rate target. The federal funds rate is the interest rate than banks charge on funds they loan to each other. You might think that the interest rate on savings would increase in lockstep with the federal funds rate, but I haven't seen any upward movement in the interest rate I earn on my savings account. Savings rates usually respond to Fed actions, but with a lag.

You'll notice that the vote to raise the federal funds rate target was unanimous. That's typically the case since the Fed wouldn't want to appear divided. It might upset the financial markets if they were. The related decision to raise the discount rate, which is the interest rate on funds banks borrow from the Fed, sends a uniform message: "We're tightening!"

Release Date: May 3, 2005
For immediate release
The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 3 percent.

The Committee believes that, even after this action, the stance of monetary policy remains accommodative and, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity. Recent data suggest that the solid pace of spending growth has slowed somewhat, partly in response to the earlier increases in energy prices. Labor market conditions, however, apparently continue to improve gradually. Pressures on inflation have picked up in recent months and pricing power is more evident. Longer-term inflation expectations remain well contained.

The Committee perceives that, with appropriate monetary policy action, the upside and downside risks to the attainment of both sustainable growth and price stability should be kept roughly equal. With underlying inflation expected to be contained, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured. Nonetheless, the Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability.

Voting for the FOMC monetary policy action were: Alan Greenspan, Chairman; Timothy F. Geithner, Vice Chairman; Susan S. Bies; Roger W. Ferguson, Jr.; Richard W. Fisher; Edward M. Gramlich; Donald L. Kohn; Michael H. Moskow; Mark W. Olson; Anthony M. Santomero; and Gary H. Stern.

In a related action, the Board of Governors unanimously approved a 25-basis-point increase in the discount rate to 4 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco.
2005 Monetary policy

But Can Kitty Climb the Pole?

2005-05-09T20:55:00.000-07:00

From the BBC comes this priceless item about the British government providing funding for a woman to take up a new occupation--pole dancing. I may be wrong, but I think we call it stripping here in the colonies. Anyway, the cost to the taxpayers was 2,100 pounds. According to the currency converter at itools.com, that amounts to $3,970.47 at today's exchange rate. It seems the lady in question had served five years of military duty and was thus eligible to be funded for the job training of her choice.

The woman is now dancing under the name Kitty. Even Kitty didn't think her request for funding would be approved, but a spokesman for the Ministry of Defense defended the expenditure by noting that the only requirement for funding is that the occupation be legal. I hope the MoD knows what it's doing. Pole dancing is an occupation that chews up and spits out dancers pretty quickly. It may not be long before Kitty is back looking for funding for another occupation. Hmm. Firemen slide down poles when the fire alarm goes off. We might just look at Kitty's current occupation as an apprenticeship for duty in the fire department.

Ten For the Road--And Five Are Trucks or SUVs

2005-05-09T20:15:00.000-07:00

The list of the top 10 bestselling vehicles for calendar year 2004 provides an interesting look at America's taste in motorized transportation (unit sales are in parenthesis):

Ford F-Series (939,511)
Chevrolet Silverado (680,768)
Toyota Camry (426,990)
Dodge Ram (426,289)
Honda Accord (386,770)
Ford Explorer (339,333)
Honda Civic (309,196)
Chevrolet Impala (290,259)
Chevrolet TrailBlazer (283,484)
Ford Taurus (248,148)
Source: Automotive News Data Center

Will these rankings still prevail after all 2005 sales are accounted for? I think most of the rankings will stay as is, at least if gas prices don't rise much more than they already have. What surprised me is that Nissan is nowhere on the list. And if it weren't for the big Dodge Ram, DaimlerChrysler wouldn't be represented either. Whatever happened to the popularity of minivans?

It will be interesting to see if the new retro-style 2005 Ford Mustang can sneak onto the list. If I were a betting man, I'd place a little money on the pony car. I'm seeing a lot of new Mustangs, some driven by college students and some driven by people who were in college when the original Mustang first came out in 1964. A car that can attract buyers of all ages has a good shot at the list. Even so, the new model won't push the original's sales record. That first model took the country by storm and sold over 400,000 units. At less than $3,000 the car was a steal. Especially compared to the price of a nice, original 1964 Mustang today. I wish I still had my 1965 convertible. I'd be rich!

The Glass Ceiling in the Granite State: Women's Earnings and Jobs

2005-05-09T15:21:00.000-07:00

American women earn less than American men. Thus, it's not a surprise that women in New Hampshire earn less than men in that state. That's according to a report of the New Hampshire Women's Policy Institute. The report offers a lot of common sense insights and solutions, perhaps because it was written by an economist, Ross Gittell, an economics professor at the University of New Hampshire's Whittemore School of Business.

Rather than calling for tougher enforcement of anti-discrimination laws or the passage of new ones, the report zeros in on reducing occupational segregation. When more college women major in the same subjects as men and choose careers in currently male dominated occupations, that male/female earnings differential should shrink.

One issue that remains a bit murky revovles around the following facts:

Among the state's 25 public companies, only 13 percent of the executive officers are women and nearly 9 percent of the corporate board members are women. Sixteen, or 64 percent of the companies have no women among the top five paid executive officers. And 12, or 48 percent, have no women on the board of directors.

Smart New Hampshire stockholders should make sure that "the glass ceiling" isn't the explanation for these statistics. If I were a stockholder in any of these companies, my only concern would be with making money. In my experience when women are turned loose and given the power to excel, they do. Have these companies looked hard enough for women executives and board members? If you're a stockholder, that would be a good question to bring up at the next meeting.