Tuesday, September 25, 2007

Quote of the day

"For most voters, they're voting for the brand," Sullivan said. "When I go to the grocery store and I buy Dr Pepper, I expect it to taste like DrPepper. If it tastes like Pepsi, it's going to bug me."
Michael Sullivan, president of Texans for Fiscal Responsibility, talking about people of one party too often vote with the other - and vote against their party's identification as the smaller government party.

Thursday, September 20, 2007

Call a spade a spade

Mitt Romney breaks the 11th commandment and takes a swing at the Republican party in a new campaign ad set to air in Iowa. The ad is called "Change Begins With Us," and here's the heart of it:

"If we're going to change Washington, Republicans have to put our own house in
order," Romney says, speaking directly to the camera. "We can't be like Democrats -- a party of big spending. We can't pretend our borders are secure from illegal immigration. We can't have ethical standards that are a punch line for Jay Leno."

This is an exciting turn for the Romney campaign to come out strong like this. As the CNN article notes, the Democratic candidates have gained a lot of traction by focusing on change, but the GOP leadership has stubbornly (for two+ years now) refused to believe that the GOP needs to do any changing. They didn't even get the joke when the party's control of both chambers of Congress went down in flames in Nov 2006.

Republicans are upset, and they're upset about a lot of different things. Democrats are upset, too, but they do upset different - they get loud about it, rile others up, and that will lead them all out to the polls next November. We Republicans put up the silent treatment, so no one else knows if we're mad or just don't want to argue or are supportive of the way things are. People don't get riled up, but instead they will stay home on Election Day, which spells disaster for the GOP.

Romney's ad should get people talking, openly and honestly, about the disappointment the Republican base feels in current leadership. Romney's right - it's time for change. More and more, Romney's looking like the one to lead it.

PS: Here's the ad. I think the music's a little much, but the message is good.

Sunday, September 16, 2007

Thank You, Metro

It seems like a small change, particularly to people who don't ride the yellow and blue lines on DC's Metro, but starting soon, those two lines will no longer be plagued with 4-car trains during rush hour. Knowing there will always be 6 cars in the train means less cramming into the first and last cars, less running to catch a train that pulls up far short of where you expect it to be, less being a few minutes late to work as you stand dejectedly outside a crammed door through which you cannot squeeze. Now we get to be just like all the folks on all the other three lines with standard six-car trains.

Thank you, Metro, for this very valuable fix.

Wednesday, September 12, 2007

The real solution to outsourcing

I implore anyone of the mind that we are destroying our country and our future through out-sourcing, free trade, or mechanization of industries to read this blog post by Russ Roberts, economics professor at George Mason University. The super-abbreviated conclusion:

Preserving manufacturing jobs for their own sake is the road to stagnation.

The natural forces of competition and self-interest are encouraging manufacturing workers to get more education and find new work.


Russ really brings to life a lot of the benefits of outsourcing and trade. Yes, there are short-term pains, but those are exponentially off-set by the long-term gains - gains not just for the economy, but for Real People. (and Russ is one of the best in the business at connecting the abstract ideas of free-market thought to the lives of Real People)

How do we continue to grow the economy through free trade? First, let's agree that freer trade will lead to significant benefits for the next generation, and in many cases the current one after a number of years.

Second, let's be honest about the near-term challenges (and near-term could be months as easily as it could be years) such as job loses and shrinking towns, creatively exploring both temporary fixes like unemployment payments, continuing education grants as well as longer-term changes, such as moving away from defined benefit pensions and more towards ownership of our retirement through defined contribution plans.

Finally, let new industries grow organically while old ones fall away without intervention from government. If government tries to pick winners in the new economy or to save the losers by subsidizing their diminished existence, we are all the worse for it.

Monday, September 10, 2007

Cyber-tax

On November 1 of this year, the moratorium on taxation of the Internet will expire. Congress has the opportunity to renew this and avoid losing the (largely) untaxed free market that the Internet is today. The benefits of such a move are easy to see, as Phil Kerpin explains:

The Internet has been a remarkable engine of economic growth and innovation over the past decade, in large part because it has operated as a free market without undue taxes or regulation. A federal moratorium first put in place in 1998, and subsequently extended, has protected the Internet from access taxes and discriminatory or multiple taxation. That moratorium prevents state and local governments (with a handful of exceptions where taxes have been grandfathered in) from imposing a list of taxes and fees that would appear on the Internet portion of your cable and telephone bills.

If the moratorium is allowed to expire, states will likely impose new taxes on Internet access fees, bit-taxes on downloads, and perhaps even e-mail taxes. There would be unlimited potential for taxation, which would only impede the flow of commerce and information on the Internet and slow a great engine of economic growth.


Drop your representative a note and ask them to make sure to extend the moratorium - even to make it permanent.

Friday, September 7, 2007

Tidbits on global warming

Two interesting things I stumbled on re: global warming today.

First, an interesting article by Christopher Horner about the uneven and sometimes misleading results drawn from global temperature stations. I've heard him speak before about how the sudden rise in global temperatures around 1990 may have less to do with dramatic shifts in climate than it does with the fact that about half of the world's temperature recording stations went out of commission then with the collapse of the Soviet Union. Many of those recording were in cold-weather climates, leaving the recorded data to skew warmer.

The other piece is from Americans for Prosperity's blog and reminds us that everything - everything - is caused by global warming.

Freddie-come-lately

Fred Thompson is officially a candidate for president, despite the fact that the other top candidates (from which most reports now eliminate McCain and mention only Giuliani and Romney, whereas on the D side, John Edwards has done a good job of clawing his way back into the "top candidate" ring over the past month or so) have been out there for most of 2007, if not before. Rich Galen, Mullings author and paid consultant to the Thompson campaign, gives an honest assessment of what being a latecomer in this environment is like:

If we don't do this [the Thompson campaign's first bus tour in Iowa] well, we can't explain that we haven't done one of these before and therefore we should get a pass. We chose to wait until after Labor Day so it's like skipping spring training and stepping into the batter's box against major league pitching a third of the way into the season.

The Lexington article in last week's Economist takes this blog's view, which is that Mr. Thompson missed his opportunity to really be a powerhouse candidate by not getting in when his stock was at its peak earlier in the summer.

Will he be a top candidate? Yes. Will he influence decisions and tactics chosen by the other candidates? Yes. Will he be able to raise the funds and build the ground game necessary to win any of the early states except maybe South Carolina? I'm not convinced.

Forced innovation

Though it seems a little forced, I really like this idea. A Siberian mayor has found a way to force bureaucrats to think creatively and find ways to solve problems instead of skirting them all together:

The mayor of a Siberian oil town has ordered his bureaucrats to stop using expressions such as "I don't know" and "I can't." Or look for another job.

Alexander Kuzmin, the 33-year-old mayor of Megion, has banned these and 25 other phrases as a way to make his administration more efficient, his spokeswoman said Tuesday.

"It's a suggestion to the staff that they should think before saying something," Oksana Shestakova said by telephone. "To say `I don't know' is the same as admitting your helplessness."

Some of the other prohibited phrases are "What can we do?" "It's not my job," "It's impossible," "I'm having lunch," "There is no money," and "I was away/sick/on
vacation."


It seems to be working.

Anna Borovikova, the mayor's chief of staff, said the novel approach has improved discipline.

"Before, it was so easy to say `I don't know.' Now before reporting to the mayor we prepare several proposals on how one or another problem can be solved," Borovikova said.


I'd love to see a follow-up report a year from now to see how much progress has been made. If it's working, let's see about testing the same rules at our local DMV...

Thursday, September 6, 2007

Apply it to everyone and there's no more crime!

My friend Catherine shared an article from Newsmax talking about how the Larry Craig case is indicative of the above-the-law sense of entitlement that lawmakers have developed. It talks about an interesting tool used by the diligent Capitol Police - the "unarrest."

Unarresting is what happens when a Capitol Police officer has the misfortune to learn, after having made an arrest, that the person charged is a member of Congress. In that case, a supervisor is called, and he drives the member of Congress home. No record is made of the arrest. In other words, it is covered up.

Of course, if a Capitol Police officer learns before an arrest that the suspect is a member of Congress, the process is much simpler: He never makes the arrest in the first place.

Simple, isn't it? See the article for a nice snapshot into the life of Ted "The Bridge" Kennedy.
“The ego and the arrogance of some of the members had an impact on me,” John R. Niston, a former Capitol Police officer, told me. “They get to the point where they think the people in the country exist to serve them instead of the other way around.”

I could be wrong, but I don't think that is the idea the Founders had in mind...

Wednesday, September 5, 2007

Hard work

Seth Godin has a really great Labor Day post about what hard work really means today:

Richard Branson doesn't work more hours than you do. Neither does Steve Ballmer or Carly Fiorina. Robyn Waters, the woman who revolutionized what Target sells -- and helped the company trounce Kmart -- probably worked fewer hours than you do in an average week.

None of the people who are racking up amazing success stories and creating cool stuff are doing it just by working more hours than you are. And I hate to say it, but they're not smarter than you either. They're succeeding by doing hard work.


There's a new book out there that I thumbed through at the bookstore recently (and I'll put in the name when I remember it). I enjoyed a particular passage that argued that the biggest different between those in the middle class and those in upper class is that most of us in the middle class are risk-averse. We don't want to take big risks because, even though there could be pots of gold at the end, it's really hard to get to there. Most of us will give up before we get to the reward, which means most of us will fail, which means why bother in the first place.

I'm as guilty of this as anyone. I keep hoping for the "right" idea to come along, and I keep pushing off big ideas that aren't quite "right enough." I'm slowly waking up to the fact that it can't be "right enough" without a lot of effort.

Starting this blog was a risk that I easily could have not taken. I'm still not working hard enough on it to make it a product people really want to read regularly, but I've done the hard part, which was committing publicly to do something. If I'm going to own a domain name, I better keep putting new stuff up there. And (I think) it gets better over time, so even if it stinks now, I'm in a position to continually improve. Remember, even today's favorite swans started out ugly.

If you have a big idea you're hedging on, start with committing publicly. Get the idea out of your head and tell someone who can hold you accountable, "I'm going to do this." When you've told people that you're in the game, your incentive strongly biases success.

Friday, August 31, 2007

A slick play of law and order

Fred Thompson is really going to run for president. Good for him. Jim Galloway over at the Atlanta Journal-Constitution's Political Insider blog puts together some interesting pieces, largely drawing from a comment on Daily Kos, noting that by announcing his candidacy publicly on September 6th, he doesn't have to "officially" declare with the FEC until September 21st, meaning he doesn't have to form his campaign committee until after the October 1 filing deadline for fundraising.

[From Daily Kos] By delaying the filing of his organizational papers until books have closed on the third quarter of 2007, Thompson arguably will not have to file any disclosure reports with the FEC until January 31, 2008, after the Republican primaries/caucuses in WY, IA, NH, NV, FL …..

[From Political Insider] That poor financial showing that Thompson made this summer — the one where his goal was $5 million and he showed $3 million? Doesn’t look like it’ll happen again.

Clever clever.

My own assessment of the Fred campaign is that he hurt himself by not jumping in when his popularity was really at its peak about a month ago. As Galloway describes it:
His candidacy, or non-candidacy, had been taking on the feeling of a bad anxiety dream — the one where you’re trying to punch out an emergency phone number, but you keep hitting the wrong buttons.
An apt description. Had he announced right before - or even after - the Iowa straw poll, he would have stolen the thunder from Romney and Huckabee, and probably pushed some of the lower-tier folks out of the race, who had to be holding out hope that all the "will he, won't he" would lean to the latter.

Despite that assessment, taking his questionable fundraising off the table is a slick move of taking full advantage of the law, and I give credit to that. We'll see how it works out.

Commuter rail

When it comes to public rail transportation, I'm a bit like an agnostic who attends church every Sunday. In DC, having rail to get me around - particularly as I both live and work near rail lines - is exceptionally convenient and costs about the same for me as a tank of gas a month, all with the added benefit of not having to worry about parking. In New York, of course, rail is ubiquitous. In Boston, the T is cheap and relatively convenient.

But then there's Atlanta. And Miami. And now Charlotte's trying. And there are plenty of other metro rail systems that I have never been on but I understand are just as miserable, inconvenient, expensive, or poorly run. So my sense has been that for high-density places, particularly on the East Coast that developed before cars made distance negligible, rail is super. For everywhere else it probably isn't the way to go and generally wastes taxpayer money.

A new paper by a lead economist from the left-leaning Brookings Institute challenges the notion that any of the systems are truly adding much to the public good. As transportation expert Robert Poole explains, the paper looks at a number of factors and finds that the burden to the taxpayers for funding rail simply out weights the intrinsic benefits of having it:

Winston and Maheshri construct an elaborate econometric model to estimate the “consumer surplus” of 25 rail transit systems. This is economists’ term for the benefits to users, over and above the fares they pay. The large systems (New York, Washington, D.C., San Francisco’s BART, etc.) all produce significant consumer surpluses. But most of the smaller ones do not.

Next, the authors compare the consumer surplus of each system with its net taxpayer cost. On this measure, every single one of the 25 systems has negative net benefits, i.e., the annual value of the benefits to users is much less than the annual cost to taxpayers. Surprisingly, this is true even for the massive New York City rail transit system, which by itself accounts for two-thirds of the nation's rail transit passenger miles.

But what about larger benefits to the metro area? Rail systems are advocated not just to benefit their riders, but because they are expected to reduce traffic congestion, reduce air pollution, save energy, etc. So the final step in Winston and Maheshri’s analysis was to estimate the value of these “externality” benefits. They first conclude that the only one of these purported benefits large enough to make any difference is congestion relief. Adding the congestion savings to road users to the consumer surplus gives the total benefits of rail transit.

When this total is compared with the net taxpayer costs, only San Francisco’s BART produces net social benefits. Each year the system improves social welfare by an estimated $36 million. All 23 [sic] other U.S. rail transit systems are net losers. This means that each of those urban areas is made poorer by many millions of dollars each year.

Here's one of the most interesting things from Poole's commentary:

And there is also the claim that rail systems increase the mobility of low-income residents. But the authors point out that the median annual income of rail users in 2001 exceeded $50,000, which was greater than the median income of the general population in that year. So rail’s primary market is not the poor (unlike bus transit).

Politicians love rail transit because it's so tangible and looks so clean and polished. Plus they get to break ground on it - a photo op holding a shovel is much more exciting than sticking a Bus Stop in the ground. Yet bussing seems to be a far more economical and flexible choice. Perhaps the politicians could just spend some of that rail money into make bussing sexier - or better yet, put a piece of that money to infrastructure, privatize public transit, and give the rest back to the taxpayers to grow the economy - which would increase demand for public transit.

Tuesday, August 28, 2007

Ringing endorsement

Fidel Castro called a possible Clinton-Obama ticket "invincible," reports CNN's political ticker blog. He was pouty about their lack of support for a continued undemocratic Cuba, but nobody's perfect, even St. Albert. This is an important endorsement for the possible future Democratic ticket - the first from a leader of a Red state.

For more on Fidel's leadership, you can review his strong application of the rule of law.

Monday, August 27, 2007

A $20 Million Idea

We have a neighbor who owns more than her fair share of Crocs - to the point that on the Fourth of July she was wearing one blue one and one red one. My wife pondered, as we sat on the porch sipping wine, whether she had any Jibbitz, which apparently are little plastic charms that can go on your Crocs. All the kids have them, she said.

What a brilliant idea, I said. How come we're not thinking of an idea like that? As Don Boudreaux points out:

Note that this invention isn't high-tech -- it's about as simple as simple can be. Yet it is indeed something that enough consumers choose to buy at prices that make the product profitable to produce.

And then I heard that he sold the company for $20 million. Now I really wish I had thought of it - and I've spent lots of time since then trying to come up with my own little big idea.

We all have $20 million ideas in us. Step one is to identify them, and step two - and this is the hard part - we have to make big risks to capitalize on them. Start with step one...

Sunday, August 26, 2007

Quote of the day

The Democrats believe in government when they have a choice. Republicans believe in people when we have a choice...The Republican Party is the part of the people. The Democratic Party is the party of the government.
That's from Rudy Giuliani, in a speech he gave this week. He may be the most morally questionable candidate and I know there are some questions regarding his fiscal disciple towards the end of his tenure as mayor, but none of the other candidates are anywhere close to articulating the message above as well as he is doing.

Republicans can't win the White House again by talking about unsexy issues like tax cuts or by being against all the government-expanding ideas the Democrats throw out. Republicans have to offer a bold vision of a better tomorrow and inspire Real People to believe that a better future isn't given by government, it's made by the people, the communities, the businesses, and the families of this nation.

Saturday, August 25, 2007

Hopefully they track bird flu this well

I came across an interesting article on Wall Street Journal's website about the cost of weddings, which argues the real cost of weddings is much lower than the reported $28,000 cost reported in a recent survey (which was financed by the crazy wedding industry). There was a most curious source of statistics in the article, however:

Roughly 2.2 million weddings took place last year, according to the Centers for Disease Control and Prevention.

So somehow keeping tabs on marriage numbers falls within the CDC's mission of "to promote health and quality of life by preventing and controlling disease, injury, and disability."

Interesting. Maybe my single friends that think one must be sick to get married are right!


(NB: The author notes for his own health and well-being that he disagrees with this last statement)

Fair deal?

In principle, I really like the Fair Tax, not least because it theoretically eliminates the IRS, or at least significantly reduces its size and scope. The Fair Tax also eliminates many of the tax perks that reward government-approved behavior or government-approved friends. Such simplification of the tax process would be real nice and probably a net-positive for liberty.

However, the more I hear about the Fair Tax, the more questions come to my mind. A recent commentary ($) by Reagan/Bush deputy assistant secretary of Treasury Bruce Bartlett in the Wall Street Journal calls several facets of the Fair Tax into question, particularly the tax rate. (for an ungated version of most of the article, go to the Economist's View blog)

While the Fair Tax bill, authored and promoted by Georgia Representative John Linder (R), would add a sales tax of 23% to all items sold, you may have heard opponents argue that the tax is really an effective rate of 30%. Not being an economics major, I've never really understood this discrepancy, but Bartlett gives the clearest explanation I've ever seen:

In reality, the FairTax rate is not 23%. Messrs. Linder and Chambliss get this figure by calculating the tax as if it were already incorporated into the price of goods and services. (This is known as the tax-inclusive rate.) Calculating it the conventional way that every other sales tax is calculated, with the tax on top of the price, yields a rate of 30%. (This is called the tax-exclusive rate.)

The distinction is confusing, but think of it this way. If a product costs $1 at retail, the FairTax adds 30%, for a total of $1.30. Since the 30-cent tax is 23% of $1.30, FairTax supporters say the rate is 23% rather than 30%.


Hum....

Other criticisms are also raised in the commentary, such as the quirky facet of the bill that reimburses households below the poverty line for a piece of the tax to make it less regressive. Read the article for all valuable points. For some rebuttal, check out the comments at the Economist's View's post on the article.

More on the Fair Tax: http://www.fairtax.org/site/PageServer
More on the Flat Tax: http://www.ncpa.org/pi/taxes/tax7.html

Friday, August 24, 2007

Unexpected Opportunities

Truett Cathy has some useful advice to budding entrepreneurs - or to anyone, really: Work hard, never give up, be true to your values, and take advantage of unexpected opportunities. These virtues have taken him from near-penniless restaurateur to the billionaire owner of Chick-fil-A that he is today. His most recent autobiography, Eat More Chickin, Inspire More People: Doing Business the Chick-fil-A Way tells his incredible life story. He credits much of his success with taking advantage opportunities that suddenly appear.

The history of Chick-fil-A, in fact, is a series of unexpected opportunities. When we responded to them, we often found ourselves richly blessed.

Sometimes these unexpected opportunities are happy blessings that grow out of your our own doing, such as how Kids Meals "offered the opportunity to influence children...with a positive message." Sometimes its seeing a trend and choosing to capitalize on it rather than keep doing what you're doing, such as the way Cathy took advantage of the mall boom in the '70s and '80s to grow his restaurant chain. And sometimes, opportunity knocks in the midst of adversity:
The Chick-fil-A Chicken Sandwich itself was born in the wake of an unexpected opportunity. When one of my first two restaurants burned to the ground, I found myself with time on my hands and the availability to develop a new recipe.

Truett Cathy is a natural born marketer and entrepreneur, and the book features plenty of ideas on continually improving the value and service we offer to customers, no matter what industry we're in. He is doubly inspirational through his genuine commitment to core values. His very interesting story challenged me find ways to work harder but also to look at my life and double check my priorities. It will do the same for you.

One warning, though - it will make you hungry for a juicy Chick-fil-A sandwich with every page!

Thursday, August 16, 2007

A victory for African farmers

Humanitarian aid group CARE has opted not to accept $45 million in government aid. Repeating that, a non-profit group has turned down $45,000,000 from the U.S. government to supply food from Africa. The reason? The "heavily subsidized American farm products" drive down the cost of African-produced crops, which negatively affects African farmers.

Under the current system, the money raised through selling the American crops is redistributed in Africa into anti-poverty programs. The Government Accountability Office has already declared that this program is inherently inefficient, but little has been done to stop the program because of all the special interests involved - farmers, shipping companies who move the food to Africa, and particularly the non-profits whose existence is financed by the plan (yes, that's right, a "special interest group" is more than just Big Oil and lobbyists).

Other groups who work in tandem with CARE are not pleased with CARE's decision, but Progressively Right applauds the effort. Even Jimmy Carter, who I rarely find myself on common ground with, agrees:

Former President Jimmy Carter, whose Atlanta-based Carter Center uses private money to help African farmers be more productive, said in an interview that it was a flawed system that had survived partly because the charities that received money from it defended it.

But doesn't the competition of the American food with the African food promote innovation? Isn't that what a market economy wants? Normally, yes. However, this program sells subsidized food at below market value. African farmers can't make an honest living because they are forced into dishonest competition.

This case proves once again that just because government has the best of intentions does not mean it will get the best of results. Congratulations to CARE for standing up to this program and, really, to its own mission. I hope this will force a more robust of both foreign aid and of our own domestic farm subsidies.

Tuesday, August 14, 2007

Hope continues

More news of progress being made in Iraq from an unlikely source, this time from German uber-magazine, Der Spiegel. The lengthy and well-written article gives a balanced look at the situation in Iraq at the moment, which essentially is not great but is on the mend and certainly full of hope.

Ramadi is an irritating contradiction of almost everything the world thinks it knows about Iraq -- it is proof that the US military is more successful than the world wants to believe. Ramadi demonstrates that large parts of Iraq -- not just Anbar Province, but also many other rural areas along the Tigris and Euphrates Rivers -- are essentially pacified today. This is news the world doesn't hear: Ramadi, long a hotbed of unrest, a city that once formed the southwestern tip of the notorious "Sunni Triangle," is now telling a different story, a story of Americans who came here as liberators, became hated occupiers and are now the protectors of Iraqi reconstruction.
What I would love would be for President Bush to go before Congress when he brings General Petraeus to give an assessment of the current situation in September. Let Bush admit that he made serious mistakes in the early conduct of the war (or at least after the first two months), reach out his hand a bit and thank the Congress for its continued vigilance in seeking what some might call a "strong finish" to this war, and say that now that this strategy is working let's all move forward together and work towards a free Iraq.