Yahoo's Shareholder Meeting (2012)

[Editor's note: this post was originally published on July 12, 2012.]

Yahoo’s shareholder meeting was bland.  No slides, no video, no new trinkets—just the basic CEO pep talk plus business jargon.  Apparently, Yahoo’s new catchphrase is “technology-powered media company,” which is short for, “Please stop asking us if we’re a tech company or a media company.”  At this point, the only job with more turnover than Yahoo’s CEO might be your local fast food joint, but interim CEO Ross Levinsohn seems nice enough, so that’s a plus.  Of course, he spewed the same pablum as every other CEO from Yahoo, but what do you expect?  It must be difficult getting respect from the troops when the company won’t remove the "interim" label before the annual meeting.  Still, it’s not about the CEO or whether Yahoo wants to become a media or tech company—it’s about execution.  As another person wrote, “[I]t’s increasingly hard to see what Yahoo uniquely offers to its audience.”  Combine a failure to execute with a failure to produce unique content or services, and you have a recipe for extinction. 

Levinsohn’s short speech highlighted Yahoo’s many partners, including NBC, ABC, and Spotify.  I may have misheard him, but Levinsohn said that more than half of the videos viewed online came from Yahoo, which prompted a surprised look from one employee.  Yahoo believes its election and Olympics coverage will attract traffic.  Levinsohn also mentioned the consumer several times, stating, “Consumers want interesting and informative online experiences,” and “It [all] has to start with the consumer experience.”  In other words, he said nothing new or unique.  Of course a public company that seeks consumers and viewers has to satisfy them.  Which is why Yahoo’s conduct over the last five years has been so comically tragic: Yahoo bungled its transition to a new email format (also botching its calendar feature); entered and promptly left the social media space via Yahoo Pulse; couldn’t provide a consistent selection of online media content, ceding that audience to Hulu and YouTube; couldn’t properly manage copyright infringement claims to prevent viewers from clicking on unplayable videos; and made the term “quality assurance” MIA.  In addition, Yahoo’s videos lack captions, whereas both YouTube and Hulu have some form of online captioning.  It could be worse—just two years ago, Yahoo’s homepage seemed to resemble the National Enquirer or TMZ, prompting some viewers to wonder whether Yahoo’s latest strategy relied on Kim Kardashian, Octomom, Justin Bieber, and hordes of lobotomized or low-IQ viewers.  Thankfully, Yahoo has reversed its descent into becoming the world’s largest online tabloid.  However, it now seems to be aiming for the “World’s Largest Linkfest of Content Already Seen by Everyone under 40 on YouTube and Facebook,” but as I said, things could be worse.   

Today, the CEO focused on Yahoo’s various partnerships with other media companies as well as its access to “700 million viewers,” but Yahoo doesn’t seem to understand that a) it doesn’t matter how many viewers you have if none of them are particularly loyal; and b) relying on content and partnerships from other companies with their own websites isn't a viable long-term strategy.  As I told the CEO during the meeting, “Think about it.”  If Company A--which has a vested interest in promoting its own websites and content--decides to partner with Company B, which is a mere portal for Company A’s content, what will happen?  Company A won’t license its best content to Company B and will use its leverage as a content provider to take as many users from Company B as possible and make them loyal to their own website(s).  It’s as if CNBC decided to partner with Bloomberg by linking to Bloomberg articles, thinking, “Well, if I got Bloomberg, Fox Business and a bunch of other business content, then people are sure to come here instead of going to those websites instead.” But of course, CNBC focuses on creating its own unique content and attracting its own viewers.  To the extent CNBC thinks Bloomberg, Fox Business, or the Motley Fool has an interesting idea, they do a story themselves instead of just linking or deferring to their competitors’ websites or channels.  In essence, Yahoo’s business strategy seems to be “As many eyeballs as possible, regardless of user time spent on the page or the quality of content displayed” (see Kardashian/Octomom reference above).  It’s a sad state to be in for a company that was once a top Silicon Valley innovator  (Speaking of which, am I the only one who remembers Yahoo’s funny commercials for its personal ad service?)  

Yahoo’s latest mis-step?  Hackers from “d33ds” disclosed about 400,000 user passwords, including many from Yahoo.  I downloaded the file to see if my emails were hacked, too.  They weren’t.  It looks like almost all the passwords taken are from deactivated accounts, so Yahoo got lucky this time.  And it wasn’t just Yahoo emails on the list—I saw hotmail and even gmail accounts apparently compromised. Besides, few of the exposed passwords had any capitalized letters, which violates Online User Security 101.  The hackers are definitely cheeky, though—they ended their email/password list with the following quote: “Growth begins when we begin to accept our own weakness.” -- Jean Vanier 

The Q&A session was short.  One shareholder asked about Yahoo’s role: was it a TV station, TV studio, or ad agency?  The CEO said Yahoo wanted to create a good overall consumer experience.  A CalPERS representative said the state’s pension fund supported the Board but not the way Yahoo was awarding compensation to its executives.  Another shareholder rightfully criticized former Yahoo CEO Terry Semel’s compensation of $ 600 million, which seems grossly high given Yahoo’s current stock price.  

Some final notes: Julia Boorstin from CNBC was there.  I didn’t like her, but her cameraman was nice.  Cory Johnson from Bloomberg was also there and looked like his usual professional self (did you know he founded the hip hop basketball magazine SLAM?).  I prefer Bloomberg, which has a more serious outlook than CNBC.  Maybe the “eyeballs at any cost” strategy works on TV, which is more visual and less interactive.  It might explain the mismanagement of Yahoo all these years by big-media executives. Boorstin asked me about the interim CEO issue (yawn) and the Facebook/Yahoo deal.  According to TechCrunch, the deal occurred “without money changing hands,” so I responded to her question with another question she should have been asking: “How much money is involved?”  She didn't seem to catch my point.  So much for television media as an enlightening Fourth Estate.  

Disclosure: I own shares of Yahoo, but my positions may change at any time.  My hunch is that a private equity fund will buy Yahoo at some point or the company will increase shareholder value by splitting up or selling off its various parts.  

Keith Ellison and Common Sense

"The best defense against extremist ideologies is social inclusion and civic engagement." Shameful that some people smeared Mohammed Salman Hamdani and recanted only when confronted with his dead, heroic body. More from Rep. Keith Ellison here: Ellison's transcript of prepared remarks for March 10, 2011 Congressional hearings.

Every generation has its Joseph McCarthy, and it appears ours will be Rep. Peter King. Kudos to Rep. Ellison for his common sense.

Ralph Ellison on Finding Himself

The journey of self-realization is long, windy, but worthy:

"All my life I had been looking for something, and everywhere I turned someone tried to tell me what it was. I accepted their answers too, though they were often in contradiction and even self-contradictory. I was naïve. I was looking for myself and asking everyone except myself questions which I, and only I, could answer. It took me a long time and much painful boomeranging of my expectations to achieve a realization everyone else appears to have been born with: that I am nobody but myself." -- Ralph Ellison

Czesław Miłosz

From Czesław Miłosz's "Hymn": "The most beautiful bodies are like transparent glass."

I don't know why, but that line from his poem strikes me as indelibly beautiful.

NBA 2012 Finals: OKC v. Miami

[Note: this post was written and published on June 27, 2012. It has been backdated.]

I saw the best players of my generation destroyed, yelling fans hysterical, dragging themselves through the wooden streets at night looking for an angry fix...

This was supposed to be the year. You know, the year K.D. excised the demons of the Lakers, kissed his mother’s cheek, and stood tall as the NBA’s golden child holding the golden trophy. Instead, the Big Three--Shane “Charges and Treys” Battier, Mario “Wannabe Thug” Chalmers, and the corpse of Mike Miller--took down K.D.’s dream. Making matters worse, Chalmers actually tried to incite K.D. into getting a technical, which wasn’t as bad as Bynum’s clothes-lining of Barea, but still stunningly audacious--and not in a good way.

I hate Miami. Not because they colluded. (Bill Simmons explained it best: “Isn't loyalty a two-way street? When a team does what's best for itself, we call it smart. When a player does the same, we call him selfish. We never think about what a double standard it is.”) Not because Erik Spoelstra and Pat Riley seem to have a Bush/Cheney thing going on. Not because the words “Eddy Curry” and “champion” can now be put in the same sentence without immediate peals of laughter. No, I hate the Heat because they don’t play basketball.

Basketball used to be beautiful.  All the players constantly moved, each team seemed capable of running the fast break, players passed the ball, and all of them--down to the bench players--were expected to hit the open jumper.  I'm not yet 35 years old, but I remember when players made more jump shots and swung the ball around several times to give someone a clean look.  And like most fans, I remember first seeing Jeff Hornacek and thinking, "Is that an accountant?" only to eat my words after seeing him play.  Some basketball fans may even remember when centers were expected to be good shooters and decent passers. (Woe to the fan who doesn't know the name Sabonis or Smits.)

Yes, the NBA has become more athletic, placing a premium on innate physical gifts, but Shawn Kemp's dunks didn't mean the end of the jump shot or actual strategy.  Of course, some athleticism and sleight of hand are always present when seeing world-class competitors, but the Heat seem to rely on it completely. Whether it’s Dwyane Wade’s extra-second dribble (which, like Chris Paul’s dribble, should be called for a carry), LeBron’s usual, “I’m gonna put my head down, run into the paint, throw something up, and then scream if I don’t get a foul call,” or Bosh’s continuation of the ritual of kicking Toronto basketball fans in the groin, the Heat can’t do what every decent youth basketball coach tries to instill in his team: shoot free throws consistently (though to be fair, LeBron improved his FTA in the last few games); use the pick and roll when you want a jump shot; set screens while standing straight up; keep moving even though you don’t have the ball; pass the ball to your open teammates; and take the open shot. And yet, somehow, the Heat have managed to win while ignoring fundamental basketball rules.

It wasn’t always this way. I used to love seeing Rony Seikaly and Glen Rice play, and ‘Zo seemed like a cool guy, notwithstanding his feud with Larry Johnson. But that’s back when games were decided by the players and not the wide discretion of the referees. So when LeBron charges into the paint and extends his elbow into Ibaka’s body to push away Ibaka’s inconveniently located hand, apparently that’s no longer considered a foul. Except when it is. When Westbrook does his usual DC Comics Flash impersonation and goes one against four, getting hit in the body all over, if just one person blocks his shot, apparently that’s not a foul. Except when it is. In a world where jump and hook shots have seemingly disappeared, how does an NBA referee keep up when calling contact on a drive would result in 50+ FTA per game? Correctly called, NBA games would be gruelingly slow, and LeBron alone would probably get 15+ FTAs a game as well as another 15+ offensive fouls--you know, if refs actually allowed star players to foul out more. It’s different when Blake Griffin uses his body--he’s actually elevating above other players, often from a stand-still position, and using his position to create an open dunk. I have no problem with that, because Blake doesn’t usually use his non-shooting arm to clear a path to the basket, and an opponent can try to counter by boxing him out. (By the way, would it kill modern NBA centers to study up on Kareem and Olajuwon? Did anyone think that an NBA Finals with Perkins, Ibaka, Collison, Joel Anthony, Turiaf, and Haslem in the middle had the potential to make basketball fans worldwide completely jaded?)

The problem with the 2012 Finals was calling fouls inconsistently. I still remember Harden getting called for all kinds of cheap fouls when he was just trying to maintain position against the larger LeBron. And it went both ways, too. Who can forget the insane foul call against Wade when an OKC player dove for a loose ball and fell on top of Wade? Apparently, getting squished by another player while prostrate qualifies as a foul against the player lying face down on the floor (though you have to admit, Wade deserves all the bad karma he can get with the ticky-tack foul calls he’s received over the years, especially against Dallas.) And what about the charges that weren’t called against Westbrook when he barged into Battier for the umpteenth time? Listen, I get that it goes both ways, and home court advantage isn’t just a myth. But in this series, OKC had no real bench outside of Harden, and the refs’ inconsistent calls, especially the bogus foul calls against Durant, may have given the series to Miami. Call enough ticky-tack or just plain incorrect fouls against Durant and Westbrook, and the team’s ability to score (and therefore win) disappears. Don’t ask me why Scott Brooks decided to bench both Westbrook and Durant for a prolonged period in one game, but when you don’t know how the refs are going to call the game, as a coach, you have to try to protect your players for the 4th quarter. What that really means is that coaches have to decide whether to play a game of chicken with the refs--do they keep their star players in the game after they pick up their third foul, daring the refs to foul them out of the game (hello, Paul Westhead and Bo Kimble)? Or do they avoid a situation where a player soon picks up a fourth foul and “Help Wanted” signs begin flashing before the coaches’ eyes?

I know we can’t have a perfect or perfectly called game, but would it be too much to ask that an NBA series gets decided on the best basketball players--the ones comfortable taking and making open jumpers, the ones who set proper screens, the ones follow their shot for the rebound (c’mon, Durant), the ones who don’t start trouble or flop, (yes, I’m looking at you, Mario Chalmers), and the ones who don’t carry the ball?  Must we be subjected to seeing football players masquerade as basketball players?  OKC lost this year because they were less physical and because the refs seemed to let Miami get away with more aggression.  In short, the team that relied less on basketball fundamentals and more on brute force won.  Maybe I don't know as much as David Stern about running a professional NBA league, but I do know this: there's got to be a better way.

© Matthew Rafat

Ken Does It Again

Over at Popehat, Ken has delivered yet another awe-inspiring post: A Day in the Life of a Defense Lawyer. Enjoy.

Bonus: http://militaryunderdog.com/

Kevin Poulsen on Credit Card Companies

This month's Metro quotes Kevin Poulsen, who discusses the most pressing credit card issue of our time:

"The financial institutions made a decision that the cost of fraud is acceptable. They decided against replacing the magnetic strip with a chip and a PIN because it would be too expensive."

If you go to Europe, most credit cards have the superior chip-based technology. If you're an American, you ought to be upset--your American credit card companies are treating Europeans better than you.

Social Network: Battle of the Sexes, Modern Version

Dating is so difficult. A man usually thinks about exactly how he will be able to support a family. He realizes big city society favors two income couples and wonders whether a woman will continue to work after she has children and/or if he will be able to provide as the sole breadwinner. Women tend to believe the aforementioned issues will resolve themselves.

Bonus I: Jack Gilbert, from "Tear It Down": "We find out the heart only by dismantling what the heart knows...By insisting on love we spoil it, get beyond affection and wade mouth-deep into love...We must unlearn the constellations to see the stars."

Bonus II, Random Stats Edition: according to National Geographic (March 2011),

1) Worldwide, 33% are Christian; 21% Muslim; and 13% Hindu; and

2) Worldwide, nationality-wise, 19% are Chinese; 17% are Indian; and 4% American.

My friend commented that the religious numbers would change significantly if we accounted for just practicing members. That's actually an interesting question--at what point is it irrational to call yourself a member of a religious group if your beliefs differ significantly from the majority's? And who decides the norm or the majority? If you're a Muslim in Indonesia, you will have a much different norm than a Muslim in Saudi Arabia. Same thing if you're an Orthodox Jew or a Reform Jew, or an Evangelical Southern Christian vs. an Italian Catholic. Perhaps that's the beauty of religion--it brings people together who would otherwise have no reason to mix or mingle.

President Eisenhower on Unions

Some people are quoting President Eisenhower to express their support of public sector unions. As I've said over and over again, there are major differences between public and private sector unions. To compare them together as a unified, single entity is foolish, and quoting President Eisenhower in support of public sector unions is beyond foolish. Why? It wasn't until John F. Kennedy was president that government workers were allowed to organize--which is after President Eisenhower's presidency.

In any case, here are some interesting excerpts from President Eisenhower's 1955 speech to the AFL/CIO:

The second principle of this American labor philosophy is this: the economic interest of employer and employee is a mutual prosperity. Their economic future is inseparable... The American worker strives for betterment not by destroying his employer and his employer's business, but by understanding his employer's problems of competition, prices, markets. And the American employer can never forget that, since mass production assumes a mass market, good wages and progressive employment practices for his employee are good business...

The Class Struggle Doctrine of Marx was the invention of a lonely refugee scribbling in a dark recess of the British Museum. He abhorred and detested the middle class...[L]abor relations will be managed best when worked out in honest negotiation between employers and unions, without Government's unwarranted interference.

More from President Eisenhower's December 5, 1955 speech here.

Motto of an American

I am against unchecked, concentrated power in all forms and permutations. In other words, I am an American who understands the Constitution and Declaration of Independence.

California's Finances, a Retrospective

Below is a snippet from an old November 2009 LAO report--but boy, does it have amazing data. Here is one particularly juicy excerpt:

In General, the Legislature Retains Power Over the Budget. Some observers of the California budget process have asserted that—due to voter–approved propositions, federal law, and court decisions—the state’s budget is unmanageable and basically impossible to balance. In reality, however, the Legislature remains in control of the vast majority of state spending. This is particularly true over the longer term when there is enough time to allow major decisions by the Legislature to be fully implemented. Even in the shorter term, the Legislature generally holds a considerable degree of freedom to adjust state spending. Such decisions are often more restricted by the lack of political consensus as opposed to any structural budgetary constraint.

More here. Voters must realize that almost everything they read from CNN, Fox, or any major media outlet contains some element of bias. In contrast, all states have finance departments that will provide you with the (mostly) unvarnished truth. In California, we have the LAO. For the feds, we have the CBO. Turn off your television, and go forth and read.

Emerson on Trade

Ralph Waldo Emerson, from his 1844 lecture, "The Young American":

Trade was the strong man that broke it [feudalism] down, and raised a new and unknown power in its place. It is a new agent in the world, and one of great function; it is a very intellectual force. This displaces physical strength, and installs computation, combination, information, science, in its room. It calls out all force of a certain kind that slumbered in the former dynasties...

Trade goes to make the governments insignificant, and to bring every kind of faculty of every individual that can in any manner serve any person, _on sale_. Instead of a huge Army and Navy, and Executive Departments, it converts Government into an Intelligence-Office, where every man may find what he wishes to buy, and expose what he has to sell, not only produce and manufactures, but art, skill, and intellectual and moral values. This is the good and this the evil of trade, that it would put everything into market, talent, beauty, virtue, and man himself...

The `opposition' papers, so called, are on the same side. They attack the great capitalist, but with the aim to make a capitalist of the poor man. The opposition is against those who have money, from those who wish to have money.

Isn't it fascinating to see the great transcendentalist speak so eloquently about trade?

Rumi, the Romantic Alchemist: Copper over Gold

Rumi: There's courage involved if you want to become truth. There is a broken / open place in a lover...What's the use of old and frozen thought? I want / a howling hurt. This is not a treasury where gold is stored; this is for copper. / We alchemists look for talent that can heat up and change. Lukewarm / won't do. Halfhearted holding back, well-enough getting by? Not here.

Fiscally Responsible? Follow These Resolutions

An oldie from 2010, but still a goodie:

Don’t vote for any ballot measure that creates an unfunded obligation on the state budget or “locks in” more of the budget.

Constitutional provisions that limit the use of certain tax revenues or impose spending requirements on the budget without providing the resources to fulfill those obligations exacerbate California’s fiscal problems. These provisions range from dedication of sales taxes collected on gasoline to transportation to the “Three Strikes” law establishing minimum sentencing requirements.

Why don't we teach these civics concepts to kids in high school? More here.

Law Quote of the Day

Dean Roscoe Pound: "The law must be stable and yet cannot stand still."

Netflix Finally Agrees to Caption 80% of Streaming Content!

Netflix has announced that 80% of its streaming content will be captioned by the end of 2011. It's about time. The issue of online captioning didn't appear to be on CEO Reed Hasting's radar at all in May 2009. That all changed with this May 2009 post.

Thank you so much to everyone who supported the online captioning campaign. We couldn't have done it without you!

Also, thank you to Netflix and CEO Reed Hastings for rising up to the challenge. We know it's not over yet--some people doubt that Netflix can meet its own goal of captioning 80% of its streaming content by the end of 2011--but at least the company finally appears to recognize captioning issue is an important issue.

Disclosure: I have either no shares or an insignificant number of shares in Netflix (NFLX). I continue to be a Netflix member, but have not watched more than a handful of movies online because of the captioning issue.

Update in January 2017: Reading Netflixed (2013), it appears Blockbuster's John Antioco had Netflix on the ropes when investor Carl Icahn disputed 5.6 million of Antioco's deserved bonus. The dispute led Antioco to leave Blockbuster, essentially bankrupting the company's online business (now Sling) and giving Netflix a clear path ahead.

Even more interesting is the "loss leader" strategy employed by Antioco to drive subscribers to switch from NFLX to Blockbuster Online. Having bricks-and-mortar stores once gave Blockbuster advantages--it could sell ancillary products to increase cash flow, and allow customers to return mailed DVDs to physical stores--while Netflix relied completely on online distribution. More importantly, the revenue from existing Blockbuster customers could allow it to create "loss leader" strategies to bankrupt the smaller Netflix--as long as franchisees were onboard. Such new strategies present fascinating anti-trust issues, because once a new competitor is vanquished, what prevents the sole winner of a complex, costly business model to drive up prices? 

Movie Recommendation: Gideon's Trumpet

It's actually a made-for-television film starring Henry Fonda, but it is beautifully done and a must-see. Gideon's Trumpet has everything--great acting and a look behind the scenes of the Supreme Court and our legal system. If you're a high school teacher, please show this film to your students.

Bonus: list of the best movies you've never heard of here.

Retired California Teachers Receive Lump Sums of $500,000

Oh, those poor, poor California teachers. They only get lump sums of $500,000 when they retire. Wait, what? Oh, you didn't know that? Keep reading.

"Of the 12,568 California educators who retired in fiscal year 2007-08, the median number of years on the job was 29 years. The average CalSTRS pension was $48,180 per year, which was about 62 percent of the average highest salary." See here [Update: link no longer works.]

Assuming a 6% rate of return and 29 years of retirement, you and I would have to save up almost $17,200 every single year for 29 years straight to get the same level of retirement income as an average California teacher. Why? Because most of us would have to buy an annuity on the open market to get something similar to a pension.

To give you an idea of how expensive these pensions are, let's do the math: to get $48K a year for 17 years, we would have to generate a nest egg worth about $500,000. Basically, California taxpayers provide the average California teacher with a nest egg of $500,000 upon retirement--the market cost of paying someone about $48K a year for 17 years of retirement. (Note: Hypothetical assumes you start teaching at the age of 31 and work 29 years, which means you're 60 years old. You then retire and then expire at 77.)

Will most Californians have at least $500,000 when they retire? If not, why are they responsible for guaranteeing the average teacher an annuity worth about $500,000? Also, how many of us can afford to save $17,200 a year? Even if private sector employees maxed out their 401(k)s, they couldn't put $17,200 a year in the account [as of 2011]. And people still think teachers, on average, are underpaid. Perhaps the newer and younger ones are--but that's not the taxpayers' fault. It's the union's fault for creating and enforcing a compensation system that shoves so many available taxpayer dollars in the back-end of a teacher's career rather than in the front.

P.S. Want to do the annuity calculations yourself? Here is one version of an annuity calculator.

Bonus: It looks like I may have underestimated the value of the pension. More here. The Money Blog calculates that as of 3/2011, a $300,000 lump sum would would get you just $1300/mo in annuity payments.

Also, see Margaret Collins, July 1, 2011, “Delay Taking Social Security, Add Annuity to Survive Retirement”: “For example, a contract [annuity] purchased for $95,500 by a 66-year-old couple in Florida may provide $4,262 a year until the death of the surviving spouse and include increases for inflation."

Bonus II: from Joel Klein, The Atlantic, June 2011:

[C]onsider the financial burden that comes with providing lifetime benefits. Given the time between first putting aside the money to fund such a “long-tail exposure” and having to begin paying it, the amount “reserved” by the employer necessarily depends on a host of imprecise assumptions—about the rate of return that the money invested in the pension fund will earn, about how long employees will live, and even about how much overtime employees will work during their last few years, which is normally included in calculations of the amount of the pension. Each dollar set aside this year to cover the ultimate pension exposure must be taken from what would otherwise be current operating dollars.

Consequently, elected officials have had every incentive to make extraordinarily optimistic assumptions about the pension plan—or to simply underfund it—so they can put as little as possible into the reserve. Unfortunately, but predictably, that’s exactly what has happened: most states “assumed” they would get an average 8 percent return on their pension reserves, when in fact they were getting significantly less. Over the past 10 years, for example, New York City’s pension funds earned an average of just 2.5 percent. Now virtually every pension plan in America that covers teachers has huge unfunded liabilities. A recent study by the Manhattan Institute estimated the total current shortfall at close to $1 trillion. There’s only one way to pay for that: take the money from current and future operating budgets, robbing today’s children to pay tomorrow’s pensions.

LeBron James: Justified in Leaving Cleveland?

Bill Simmons wrote an article unrelated to LeBron James, but it includes the best defense of "The Decision" I've seen so far:

Isn't loyalty a two-way street? When a team does what's best for itself, we call it smart. When a player does the same, we call him selfish. We never think about what a double standard it is.

I'd never thought of it that way before.

Government Unions: Hoodwinking the Public, One Voter at a Time

If you're a California voter, you've been the victim of a scam perpetuated by the state's public sector unions:

[Actual] CalPERS data shows the average career public employee, who put in at least 30 years of service and retired in the 2008-09 fiscal year, collected a starting pension of $67,000 a year, or 2.5 times the advertised figure [by CalPERS]...

The pension numbers are even higher for the separate local retirement systems that cover employees of the two East Bay county governments. The average was $85,500 for career workers who retired in 2009 from the Contra Costa system, and $83,000 from Alameda County. A majority of these workers also receive Social Security, which could add, very roughly, about another $19,000 to the annual pension.

More here. 1) think California doesn't spend enough on education? 55% of California's general fund will be spent on education (43% on K-12; and 12% on higher education); and 2) think we should tax people more? Think harder. If you're a company and want to expand, are you going to expand someplace where you and your workers have access to cheaper housing, reasonable wages, and lower taxes, or someplace with higher housing costs, higher salaries, and higher taxes?

What about taxing corporations instead of individuals, you ask? From David Walker's book, Comeback America (hardcover, page 121): "we must realize that corporations don't really pay taxes. Rather, they pass along any tax, in the form of higher prices to consumers, lower wages to workers, and/or lower returns to shareholders." It turns out trickle down economics exists--at least when it comes to taxes.

Bonus I: from Calvin Massey:

In the private sector a union bargains for a greater share of the entity’s revenue and profits. What it can provide in return is greater productivity, accomplished perhaps by work force stability, higher morale, and the belief that the common fate of employer and employee will be enhanced by productivity gains. If this happy event ensues, at the next round of collective bargaining, union workers can and should receive their fair share of the resulting gains.

In the public sector, by contrast, a union is not bargaining for a greater share of the revenue produced by economic activity; it is bargaining for a greater share of revenue that is obtained by force of law – taxation – or, if not a greater share, at least for a constant share of those revenues extracted from the citizens. What a public sector union can and does provide in return is political support for the faction that chooses to increase taxes or the union’s share of existing taxes. If public sector unions deliver on their support, they will be rewarded by ever more generous payments. There is no market that acts as an external monitor of worker compensation; there is only a steady repetition of a corrosive bargain – tax the public ever more in order to maintain political power. That is inimical to responsible government.

It appears Calvin Massey is a law professor at UC Hastings. Bravo!

Bonus II: Christopher Caldwell, FT, 2/25/11:

Public-sector unions have long posed a problem of what the economist Mancur Olson called the “logic of collective action”. Democracy tends to offer benefits to small, well-organised groups (who defend them vigilantly) while spreading the costs among the broader public (in doses that are too small to rally resistance around). The result is a hardening of privilege. What is new in Wisconsin is that those who do not belong to public-employee unions see this logic as clearly as those who do.

Ralph Waldo Emerson on Despotism

Ralph Waldo Emerson, from his 1844 lecture, "The Young American":

Fathers wish to be the fathers of the minds of their children, and behold with impatience a new character and way of thinking presuming to show itself in their own son or daughter. This feeling, which all their love and pride in the powers of their children cannot subdue, becomes petulance and tyranny when the head of the clan, the emperor of an empire, deals with the same difference of opinion in his subjects. Difference of opinion is the one crime which kings never forgive. An empire is an immense egotism. "I am the State," said the French Louis. When a French ambassador mentioned to Paul of Russia, that a man of consequence in St. Petersburg was interesting himself in some matter, the Czar interrupted him, -- "There is no man of consequence in this empire, but he with whom I am actually speaking; and so long only as I am speaking to him, is he of any consequence." And Nicholas, the present emperor, is reported to have said to his council, "The age is embarrassed with new opinions; rely on me, gentlemen, I shall oppose an iron will to the progress of liberal opinions."

The last line is hilarious, isn't it?

Got Enemies?

He has no enemy, you say;
My friend, your boast is poor,
He who hath mingled in the fray
Of duty that the brave endure
Must have made foes. If he has none
Small is the work that he has done.
He has hit no traitor on the hip;
Has cast no cup from perjured lip;
Has never turned the wrong to right;
Has been a coward in the fight.

- Alexander Anton von Auersperg

Unintended Consquences: Meredith Menden on Teacher Pay

Meredith Menden wrote a sarcastic Facebook note titled, "Are you sick of highly paid teachers?" proposing to pay teachers directly like babysitters, i.e., $19.50 a day. $19.50 x 30 kids x 180 days a year = $105,300 a year. Let's take Ms. Menden's idea further and actually consider paying teachers directly. First, we have to figure out how much each of us are paying teachers now.

In 2009, Californians filed about 12.8 million tax returns. (http://www.ftb.ca.gov/aboutFTB/Tax_Statistics/2009_Filing_Season_Statistics.shtml)

California's annual budget is about $89 billion. The annual budget number is different from the amount available in the general fund. The general fund is basically the state's operating budget and includes money that covers the day-to-day activities of various state programs. The state's annual budget number includes expenses outside the general day-to-day activities of various state agencies and is therefore higher than the amount available for its general fund.

About 40% to 50% of the general fund usually goes to K-12 education. For 2011-2012, when including college funding, about 55% of the general fund will be spent on all education (DOF link here), with about 42.8% spent on K-12 education (see Governor's eBudget summary).

In 2011-2012, Jerry Brown is proposing that we spend $37.7 billion on K-12 education: http://www.ebudget.ca.gov/StateAgencyBudgets/6010/agency.html

So California plans on spending about $38 billion on K-12 education in 2011-2012--and that only includes the amount received from the state. (K-12 schools receive more funding from other sources, but we'll ignore those sources for now.) Each state tax filer is paying about 3K a year on K-12 education. Instead of giving that money to the government each year, why not return it to each taxpayer and add another 1K, even to people who do NOT generally file tax returns (i.e., poor people)?

Under this system, a poor parent would get an additional 4K a year to spend on his or her child's education. A married couple with two children would have 4K to spend on each child's tuition. A married couple with only one child could receive up to 8K. If parents don't spend the full amount on schooling costs, they would be required to spend any excess money in the county where they live. All recipients with K-12 children must spend at least 2K of their 4K on K-12 tuition. Payments and purchases would be tracked using something similar to our current EBT card system.

Adults who have no desire to attend school or who have no children would receive 2K in tax credits but must spend the money within their county of residence. Depending on the state's finances, this proposal could be extended to college students to help them pay for tuition. (Instead of increasing college tuition costs as we're doing now, we might be able to help college students reduce higher education costs).

Taxpayers who earn more than 125K a year in adjusted gross income would not be eligible for the 2K tax credit or 4K tuition credit. Once again, any tax credit not used on tuition or reducing a person's tax liability will be loaded on a card that must be spent on a business physically located in the taxpayer's county of residence.

More ideas: teachers would be hired based on one year contracts. A month before the end of the school year, a majority vote of the parents by secret ballot could remove the teacher. Requiring that all recipients with school-age children must spend at least 2K of their 4K on K-12 tuition gives teachers a *minimum* salary of 60K a year (assuming 30 kids--2 x 30). Parents who have only one child would have to pay 4K a year (2K each is required to be used for school), which would increase the teacher's salary beyond 60K in many cases. The money would go into a common pool and be divided among the different teachers in science, math, English, etc. In exchange for higher pay, teachers would be responsible for their own health care and retirement, just like many people in the private sector. With so many more people buying individual health and dental care plans, the overall cost of individual insurance plans would fall, creating an indirect benefit for poor people, the uninsured, and the self-employed.

If parents want to spend more on teachers, they can give them up to 120K (4 x 30) or more. If you're concerned about poor people in California, many poor people live in the Central Valley and way up north. 60K a year--the minimum salary--is good money in places like Fresno, Bakersfield, outskirts of Sacramento, etc. Of course, millions of poor people live outside of the Central Valley and in more expensive places like L.A., San Jose, etc. Most likely, these parents would have to spend their entire 4K voucher on a local school (if we assume more affluent neighborhoods will vote in higher salaries for teachers). However, poor parents will still have more choices and more of a voice in their children's education because teachers would have to cater directly to them to get their votes at the end of the year. In any case, under this proposal, all poor adults, even those without children, would receive 2K more every single year.

One issue is factoring in the increase in expected tax returns. Obviously, there will be more than 13 million people filing taxes if they know they will get between 2K to 4K. Also, we would have to create a new agency to investigate fraud/kickbacks, supervise the annual secret ballot vote, verify residency, prosecute parents who don't send their kids to school, etc. But if existing funding sources are inadequate, let's assume we could implement at least two measures to cover any expected shortfall: one, raise sales taxes (that's what we're doing now when we have a shortfall); and two, force all government employees making over 100K to take a 15% pay cut down to a minimum of 100K. We may not have to implement either of those measures if we handle additional sources of funding wisely. Lest we forget, we haven't even included federal money and local property taxes, which are around 11% and 21% of K-12 school funding (See here). Those are tens of billions of dollars of existing funding we have not yet discussed or included in our calculations.

Another note: we would have to cut P.E., which means we would teach five subjects instead of six subjects (e.g., English, math, science, social studies, and one elective, e.g., a foreign language, logic, music, etc.). The ambitious high school students could enroll at the local community college if they wanted more classes.

There are some important factors I haven't considered (e.g., what if parents have more than two kids? how do we best count the votes of divorced and/or single parents?), but we can see that existing funding is enough to improve the education system and also assist low-income parents. Whatever we're doing now is not assisting the children of low-income parents, so we ought to be open to all ideas. Why not consider a plan that would help increase accountability, pay teachers more, and help poor people? Most studies show that academic success tends to be influenced most by levels of parental income, parental education, and parental involvement. The proposed idea addresses all three aforementioned factors.

Update:

1) Complaint: not all poor people live in the Central Valley, and private schools are expensive.

Response: the poor people in the larger cities would probably have to use the full amount of their 4K vouchers to attend public schools, but they would still have more choices. Remember that under our current system, poor people must currently enroll their children in a pre-determined school, regardless of whether it is failing or dangerous. Giving parents a voucher for 4K allows them to consider charter schools and to demand more accountability.

Some people have said that private schools cost more than 4K a year. Well, some do, and some don't. Right now, we don't have much competition in schooling, and rich people are the ones with options. However, once we establish a voucher system, it is likely that new charter and new private schools that cost between 2K and 4K annually would crop up and be available to everyone, not just rich people.

And remember: we're not eliminating public schools or forcing anyone to attend a charter school. All we're doing is demonstrating that we can double teacher pay using existing resources (and still have plenty of money left over). All public schools would be required to enroll students with 4K vouchers. The true debate centers around the process the parents would use to determine whether they would have to use 2K or the full 4K amount of their vouchers, i.e., is it a majority vote of the class, school, county, etc.?

2) Complaint: healthcare coverage would be difficult on the private market, because you are switching tens of thousands of teachers from group coverage to individual coverage.

Isn't it true that under Obamacare, insurers must cover all individuals regardless of pre-existing conditions? In any case, the health insurance issue is a separate topic that can be addressed via state or federal legislation.

3) Complaint: the proposed idea eliminates administrators and other non-teaching staff.

The proposed idea eliminates administrators and other non-teaching staff so we can pay most teachers more money. We can modify the plan to add more money for basic maintenance costs, which are not a large portion of California's existing education budget. About 80 to 85% of California's K-12 budget currently goes directly in the pockets of school employees. (http://www.ed-data.k12.ca.us/articles/article.asp?title=teachers+in+california) If we can resolve the school employee funding issue, which is about 85% of the battle, we can easily deal with the remaining 15%.

To the extent we cannot replace the remaining funding needs by increasing sales taxes or decreasing the salaries of high earning government employees, remember that we have not included additional sources of funding. Only 61% of K-12 school funding comes from the state. As discussed above, the federal government provides an additional 11% and local property taxes provide another 21%. (See here.) In short, our calculations above have not included tens of billions of dollars of existing funding. Even without including the additional sources of funding, we have devised a system that could potentially double the average teacher salary in California.

4) Complaint: poor kids sometimes receive their only meal of the day at school. What about cafeteria staff?

An additional 2K a year gives parents over eleven dollars a day to replace any missed school lunches (assuming 180 school days). In schools that require the full 4K voucher, we can require the schools to feed children at least once a day. See response to number 3 above. Again, we have not considered other sources of funding from the state, local property taxes, lotto sales, etc.

5) Complaint: what about the existing pension and medical benefit obligations we owe to retired teachers?

The proposed plan eliminates unpredictable, unsustainable liabilities for incoming teachers in exchange for higher pay. Basically, teachers get paid more and taxpayers get more budget flexibility and predictability.

What about existing and retired teachers? The studies I've seen indicate that existing plans to cover such liabilities are underfunded by around $30 to $50 billion. We can apportion a set amount each year from federal or local property taxes to cover existing liabilities owed to retired teachers. If we spread out the funding over thirty years, we should be able to cover existing liabilities. We could also change the way benefits are calculated for existing teachers, such as increasing their contributions to pension and medical plans.

6) Complaint: what about making sure that all students, nationwide, are learning the same basic skills?

Remember: we haven't touched sources of federal money in the above calculations. The federal government usually provides about 11% of education funding in California.

In exchange for accepting federal money, the federal government can require schools to fail students who do not pass a basic competency test at the end of the year. Results would be released before parents vote on whether to retain their child's teacher. Under this method, parents would have a nationwide standard to measure both student and teacher performance while also giving teachers more flexibility in how to teach.

Bonus: Did you know the average California teacher receives the equivalent--at least as of 2011--of about $500,000 when s/he retires? Never heard that before, huh? Funny how the teachers' unions don't mention that. More here.

Judge Ward Has a Blog!

One of the most fair, diligent, and personable trial judges in Santa Clara County recently retired. Judge Gregory Ward, a Harvard Law graduate, has blessed the blogosphere with his musings on case law and legislation related to California trials. For more, see here: http://www.caltrialpractice.com/

I particularly like this post--"Hey! Keep It Down In There!": http://www.caltrialpractice.com/2011/02/hey-keep-it-down-in-there.html. If you do employment law, you'll really like it.

By the way, Human Resources and corporate in-house counsel are usually not an employee's friend. They typically exist to protect the corporation, not the employee. I'm just sayin'.

Amazing Song by Asobi Seksu

Collective Bargaining as a Strong-Arm Technique

More on Wisconsin's labor issues, as seen on Facebook by Robert B:

Collective bargaining is not a right. It is a strong-arm technique utilized by unions to intimidate and force business owners to make concessions. There was a time when unethical business owners needed to be forced to act ethically [because civil laws were weak]. Those times are long past. Ever hear of OSHA?

Your grandfather, after a prolonged strike, ultimately had to cross the picket line and it ruined long term friendships and really hurt him personally. However, he ultimately felt the well being of his family outweighed the pressure from the union. Union leaders today now serve to garner the greatest income and benefits for themselves and members without consideration of the greater needs of the city, state, country, or other non-union neighbors. New hires are forced to join unions and pay union dues that fund lobbyists representing the extreme positions of the union. So your argument that unions stand for fairness is an anachronism that carries little weight in the United States today.

And finally, if I may share my experiences relating to my brief stint as a member of the AFL-CIO, the concept of a fair days pay for a fair days work did not exist in the mind of the union members I worked beside. They took their days pay but worked as little as they could get away with and constantly required supervision to do their fair day's work. It is time for the pendulum to come to rest in the middle where employees work hard to help maximize profitability of their employer and the employer demonstrates appreciation with a fair pay and benefits.

Businesses still have to be forced to act ethically, but Robert's point seems to be that civil laws already do the trick, and adding collective bargaining has swung the balance of political power too far in one direction. Private sector unions do not present the same problems as government unions; however, any unchecked power causes problems. When you add political kickbacks to unchecked power, the public at large usually suffers.

Wisconsin Showdown: Private Sector v. Gov Unions

People supporting Wisconsin's government workers don't seem to understand they are actually supporting fiscal suicide.

Part 1: Wisconsin is not proposing anything unusual. Almost half the states have already outlawed government unions (i.e., right-to-work states). In all right-to-work states, a family can buy a 4/2 house in a safe neighborhood for less than $180K (at least as of 2011).

While correlation does not equal causation, higher government employment costs generally require higher taxes. Higher taxes tend to favor government workers, not private sector workers. In an ideal system, the private sector does not work to provide an ever-increasing share of resources to government workers; instead, the private sector maximizes the income of non-government workers while minimizing inflation and government costs that do not benefit the public at large.

It appears, however, that government unions tend to do too well in compensation negotiations, especially with Democratic politicians, which means that wherever they exist, they have over-reached. Voters don't usually notice the government's generous compensation schemes until there's a recession, which suddenly exposes the actual costs of government. Indeed, recent data shows that public sector unions lack real checks and balances and tend to work against the interests of the public at large. (See Economist articles cited at the end of this post, showing government workers have negotiated trillions of dollars of benefits for themselves--yes, I said "trillions," with a "t.")

Generally, the more powerful government unions become, the easier it is for them to use non-unionized workers (the general public) to benefit unionized government workers. (Imagine a government-sponsored snowball gaining more and more traction, sucking up compliant politicians along the way.) During a recession, when revenues decline, states that have allowed government unions tend to drive out all but very high earners and union members. This is because politically-connected and politically-protected employees (government unions) and people with unique skills usually have high job security.

Thus, as long as recessions and layoffs exist, if someone wants to own a home in a state with government unions, s/he must either join a union; have sources of income unrelated to the job market (inheritance, a trust); or make a very high income in the private sector. Since not everyone can make a very high income in the private sector, government unions appear to drive out non-unionized middle class and poor residents. Furthermore, as we will see in the second part of this post, not only do government unions tend to work against the interests of the public at large, they drive out jobs and increase unemployment by imposing higher costs on corporations and businesses.

Do you support home ownership for the poor and middle class? Then you ought to figure out whose side you're on--the government unions, who drive up taxes and costs for everyone else, or the middle class and poor, who deserve a shot at buying a home even if they're not in a union.

________________

Part 2: Let's assume we have two states, X and Y. In state X, gov workers must negotiate benefits that are reasonable, because the absence of gov unions forces them to accept reasonable, predictable compensation. In Y, gov unions exist, and they demand and receive millions more annually than in state X. During a recession, State X can more easily cut costs than State Y, which must cut services and raise taxes to pay gov unions. State X's financial flexibility is directly related with its refusal to allow collective bargaining for its government workers.

You are someone who wants to buy a home, an entrepreneur, or a business that is considering expansion. You realize that State X can offer you lower taxes and costs and therefore a better environment to grow your employees and business b/c it has fewer long term fiscal obligations and more financial flexibility.

You also realize that State Y has no choice but to come after businesses and/or potential customers (i.e., taxpayers) to pay off gov unions during a recession. In other words, state Y must raise taxes if its gov unions refuse to agree to substantial pay and benefit cuts. State X, on the other hand, can ask the highest earning members of its government workers to accept lower benefits and salaries, thereby avoiding higher taxes, which reduces the burden on the private sector. State X's ability to demand that its highest earners in the gov workforce accept pay cuts also allows the state to avoid laying off its newer or lower-earning members. Avoiding layoffs allows State X to maintain its services, whereas State Y must cut services or create disincentives for private sector expansion.

Thus, we can see that gov unions are capable of driving investment and private sector jobs to states that lack gov unions, creating a death spiral for states with gov unions (absent a quick economic recovery). In short, if gov unions negotiate unreasonable compensation or refuse to reduce current and long-term compensation during a recession, the state's private sector has an incentive to disfavor expansion in the state.

Bonus: more here, from The Economist ("Three Trillion Dollar Hole," October 14, 2010) and also here, from The Economist ("A Gold-Plated Burden," October 14, 2010):

CHUCK REED is the Democratic mayor of San Jose, California. You might expect him to be an ally of public-sector workers, a powerful lobby in the Golden State. But last month, at a hearing on pension reform held by the Little Hoover Commission, which monitors the state’s government, Mr Reed lamented his crippling public-pensions bill. “City payments for retirement benefits have tripled over the last ten years even though our workforce has declined dramatically, and we have billions of dollars in unfunded liabilities that the taxpayers must pay,” he said. Mr Reed estimated that the average cost to his city of employing a police officer or firefighter was $180,000 a year. Not only can such workers retire at 50, but some enjoy annual pension payments greater than their salaries. They are also entitled to cost-of-living increases of 3% a year, health and dental insurance for life and lump-sum payments for unused sick leave that could reach hundreds of thousands of dollars.

More here, on one particular difference between the private sector and government sector (data from 2008-2009).

22 states refuse to allow collective bargaining: http://en.wikipedia.org/wiki/Right-to-work_law

Was Emerson a Capitalist?

Ralph Waldo Emerson, from his 1844 lecture, "The Young American":

The philosopher and lover of man have much harm to say of trade; but the historian will see that trade was the principle of Liberty; that trade planted America and destroyed Feudalism; that it makes peace and keeps peace, and it will abolish slavery.

Was Mr. Emerson a proponent of the Keynesian school of economics? Keep reading.

Bonus: We devise sumptuary and relief laws, but the principle of population is always reducing wages to the lowest pittance on which human life can be sustained. We legislate against forestalling and monopoly; we would have a common granary for the poor; but the selfishness which hoards the corn for high prices, is the preventive of famine; and the law of self-preservation is surer policy than any legislation can be. We concoct eleemosynary systems, and it turns out that our charity increases pauperism. We inflate our paper currency, we repair commerce with unlimited credit, and are presently visited with unlimited bankruptcy.

I'm going to go out on a limb and say Emerson was no Keynesian :-)

Iron Man 2: the Real Tony Stark?

I just saw Iron Man 2 (3/5 stars). The first one was much better, but I liked seeing Oracle co-founder and CEO Larry Ellison make a brief appearance in the second film. I suppose if anyone is the real-life version of Tony Stark, it's Larry Ellison. Or does Steve Jobs have a better claim to the title of dashing, outspoken entrepreneur?

Disclaimer: The views expressed on this blog are my own and do not necessarily reflect the views of any company or entity.

Race Relations

I see a lot of interesting debates on Facebook. This one's about race relations, which is always an interesting and controversial topic.

Controversial Person: For every race, tribe, color, and religious person, his/her fate starts and ends with jobs, the economy, adequate purchasing power, and a way to earn that purchasing power without being dependent on the kindness of persons who are of a different tribe, race, religion, or color. If a black man has to be dependent on a white man or welfare for his income, how far removed is he from slavery?

Cool Blue-Collar White Guy: This race subject has always bewildered me--shoot, most of the black people I know are more successful than I. I do not know what it is like to be a minority, however I grew up dirt poor and under-educated, and like most I did not go to the ends of the earth to get an education either....so my point is, it is up to the individual.

The Philosopher: I think it is a mistake to look at the African-American issue as a separate entity in the way Malcolm X makes it sound; it would be natural for him to mount his argument in the tone and rhetoric that he has - he is/was, after all, a black man himself. But the problem is a larger one – one that ‘I grew up dirt poor, under educated…’ comment of the comrade above illustrates rather well: it’s a problem of social construction as a whole. No doubt about it – race does matter, especially in a heterogeneous society like ours. But if you read books by intellectuals like Cornel West and/or Michael Eric Dyson, you’ll see how Malcolm’s message is put in perspective: we must (society at large, dominated by rich, white establishment) stop promoting the myth that a black man is either distant to a gang, or music or sports lifestyle. One may say those are merely stereotypes, but stereotypes, too, are constructed and have purpose. It’s the view of an African-American, permeating as a stereotype, that needs to be demolished (left behind – choose your own metaphor), which in turn will have the constructive and positive effect of better financial understanding, home ownership etc, etc… though not much mentioned, America very much operates on the basis of an unspoken caste system, and that unfortunately is true not just for African Americans, but whites and other races.

I also reject that success in a society is entirely dependent on the individual, but then I also disagree with a society that is merely concerned with equality of opportunity (and not equality of condition).

Cool Blue Collar White Guy: Books and scholars will not solve the problem. Friendships, Strong morals and family will. Furthermore I honestly believe the younger generations are doing this at a much greater rate than anytime in human history. I am 47 and can look you in the eye and honestly say that race or religion has not mattered to me.

Controversial Guy: @Philosopher: one reason African-Americans are stereotyped as athletes is because it is one area where they have been successful on their own and against the majority race.

@Blue Collar Guy: the last Fed Reserve study I read indicated that the only racial group (tracked by the Fed) that had a negative savings/wealth rate were African-Americans. Why is that? African immigrants from Africa tend to do very well in America and save money, so it's not a racial issue. One answer might be that African-Americans in this country have not found their niche outside of sports, which means that in every other category, they compete at a disadvantage with the majority race. As I've said before, never in the history of mankind (outside of apartheid or dictatorships) has the majority race ever allowed minority races to do well to an extent where they displace the majority race. The only way the minority races are able to succeed is by finding a place where they can outperform, based on merit, the majority race. For example, Christians wouldn't or couldn't handle money/interest in the old days, allowing others to handle that area for them. Muslims and Middle Easterners in America have done well because native born majority Americans have been unable to excel in math and science to the same extent as foreign Muslims, Hindus, Indians, Iranians, etc.

As a member of the majority race, Blue Collar Guy, you don't get to be automatically successful--but you get a default head start over racial minorities b/c the number of potentially available jobs is based on your skill set, not the color of your skin. With minority races, as I've posited here, the majority will never allow them to rise too high up in the ranks of government or union jobs and will defer charges of racism by hiring a few visible, compliant and perhaps not very exceptionally smart people (like Michael Steele, etc.). Having said that, so what? We can never dissolve all jobs based on political connections and limited accountability, i.e., union and government jobs, so all we can do is understand certain dynamics and work within those dynamics.

One contention is that political solutions to resolve racial wealth imbalances don't work (see President Johnson's War on Poverty), so we should look at solutions that allow minorities to gain independence and financial stability without relying on the kindness of the majority race. Assuming we want to assist minority communities specifically (rather than assisting all poor people regardless of race), any aid should come in the form of direct money into minority/poor communities, small business grants with someone vetting business plans, and assistance with teaching marketable skills (i.e., almost nothing that is taught in public schools today by unionized teachers).

There's another issue involved here. By attaching their fate to the majority race, minority races might be restricting women's mating choices. This is because only a limited percentage of minority men are allowed to get a part of the majority pie--in other words, the majority's pie will always be at least 51% in terms of gov and union jobs, and anything else that allows the majority to pass laws protecting themselves. This usually means the majority of minority men, at least those who cannot open their own businesses or find a niche, are unable to fully integrate into society on the same level as the majority race. It also means that the successful minority women who do successfully integrate and get a piece of the majority pie end up with fewer same-race men to marry who are on the same level, academically, financially, and geographically.

Cool Blue Collar White Guy: you know this feed is above my simple mind...I will just say that I have many "minority" friends and I am the minority in my neighborhood. I am cool with that...I know most my neighbors have my back, as I do them. I don't need my goverment to tell me whom to hire or to be friends with. That decision is best left with me. I have made the right choices. My "friends" list is a smorgasbord of personalities....all with their own qualities, and I dine there often :)

If our government is a reflection of the people why the disparity ? Or perceived disparity ? Shoot you have to be an attorney just to understand the tax code, let alone the civil rights stuff...and with 2300 pages of healthcare reform with more pork than a Jerry Springer show, I am definitely confused.

Controversial Guy: I totally agree with you when it comes to the ever-increasing laws and complexity of our political process. This phenomena makes it difficult for the average person/voter to stay interested. It has also led to dangerous apathy that will one day mutant into contempt, not just ridicule, name-calling, and Nazi references. We are not there yet, thank goodness. But if we do not move the debate back to realistic, fact-based, and data-driven solutions, we will get there soon enough.

Do California Goverment Unions Hurt Taxpayers?

Most California local school workers--everyone from gardeners to teachers--are eligible for pensions after just 5 years, as well as lifetime medical benefits after 15 yrs. Meanwhile, most corporate employees must wait until 67 years old to get benefits that are worth much less than those provided to California government employees.

In S.F., without changes, around $500 million a year will be spent paying city employees who no longer work. That means the City will not have $500 million a year to spend on new jobs, welfare, parks and recreation, community programs, or attracting small businesses to S.F.

Using taxes to favor gov workers, especially people who no longer work, has severe consequences for any state that wants to remain competitive. For instance, in 2007, 6% of California's population moved out of state, according to the Pew Center. Many CEOs will not expand in California, citing ABC: "Anywhere But California."

At the end of the day, corporations must be responsive to you and me; otherwise, they will not be able to sell their products and will go bankrupt. Government unions, in contrast, do not need us. Given low voter turnout, unions can effectively deliver 20%+ of votes in local elections to the politician of their choice. Then, unions can use their politicians to increase their benefits on the back end--i.e., pensions, lifetime medical benefits, etc.--where the bill doesn't come due for many decades and becomes another politician's and perhaps even another generation's problem.

The backending of gov employee compensation destroys accountability, because it allows politicians to make ironclad promises that do not activate during their term. For gov unions, the advantage of back-ending gov employee compensation is twofold: first, voters do not see any immediate consequences and think everything is fine; and second, unions can continue to pursue a deliberate strategy of keeping younger, newer employees underpaid so they can use them as propaganda tools, even as their retirees receive unpredictably high and unsustainable compensation. Who suffers the most? Newer and younger people, whom politicians usually ignore because of their low voter turnout and naivete in supporting teachers, police officers, firefighters and other gov employees at any cost.

More on union influence here: http://volokh.com/2010/01/25/californias-public-employee-pension-problem/

Bonus: Will Wilkinson writes an excellent piece on government unions--see here ("Bad Bargain").

Interesting Website on Captioning

The NIH has some excellent webpages. Here's one on captioning:

http://www.nidcd.nih.gov/health/hearing/caption.asp

Please support online captioning so all of us, including the hearing-impaired, can participate on the internet. Thank you.

Religion and Death

Below is a very controversial debate on Facebook regarding religion. Of course, correlation does not equal causation. Remember that when you hear anyone call a particular religion violent or peaceful. 

AC: In the last 250 years, has anyone who openly subscribed to a religion caused more deaths than the Christian-majority British, the Christian-majority Americans, or the Christian-majority Germans? And isn't it interesting that the only group that comes close to the number of killings as Christians are atheists? 

Count 'em: African slaves, the Holocaust, Korean War, Vietnam, WWI, WWII, Sabra and Shatila, Iraq, Afghanistan, Rwandan genocide (the Hutus are primarily Christians), Iraq (again), Abu Ghraib, Pakistan, etc. 

CB: Your whole hypothesis is one big logical fallacy. "correlation does not prove causation". You are saying that most wars in the 20th centuries involved Christian governments and therefore you state you are looking for reasons why "one particular religion has been so much more voluminous in killing people than other religions". That is a huge logical jump...you can't just make it and look for reasons. Who knows if there is even a connection. To say that Christianity "caused" WWII or WWI or the Vietnam war is absurd. Therefore to look for reasons why Christians "cause" more wars is just as absurd. Your argument might just as well be why do democracies cause more wars or why do white people cause more wars. 

In addition, your history is all messed up on Afghanistan. You are flat wrong on the facts about why we attacked Afghanistan. The war started less than a month after 9/11 and way before any war with Iraq. The stated goal was to defeat Al Qaeda and to demand the Taliban stop allowing Al Qaeda use the country as a base for terrorist operations. It had everything to do with 9/11 and zero to do with Iraq. You must have missed the whole state of the Union when Bush demanded the Taliban stop letting Al Qaeda use their country for that.It was Again, it had zero to do with some kind of base for Iraq. And I'm "surprised' that you are "surprised" about me stating that. In any event, you missed the point of my argument. You argued that Afghanistan was a "Christian" war. That's silly on it's face given the circumstances that lead up to the war. 

AC: 1) I never said any religion "caused" more deaths. I fully understand I was arguing correlation rather than causation. Thus, your entire argument involves knocking down something I never said. Let me leave you with the question you and everyone else continues to ignore: 

"In any case, no one here has provided any evidence that Christian-majority countries or atheist-majority countries have not killed the most number of people compared to other religions in the last 250 years. Therefore, my original point stands." 

The question is why is there such an unusual correlation. No one has been able to answer this question. 

2) re: Afghanistan, you completely ignored the potential link between short-sighted Soviet-era policies and modern day problems in Afghanistan. 

Even so, let's address the issue you raised: that "It [the war in Afghanistan] had everything to do with 9/11 and zero to do with Iraq." It depends on which part of the war we're discussing, and the answer depends on whether we're discussing the initial 2001 campaign, or the second, more extensive 2003 campaign. 

First, we basically captured Kabul and Kandahar in the initial invasion. For whatever reason, we neglected to secure other parts of the country. That meant that two years later, in 2003, the Taliban had returned and continued to destabilize Afghanistan. 2003 was the same year we invaded Iraq. You're assuming that is a coincidence--I do not believe it is. Just like we used Cambodia to prevent further escalation within Vietnam (i.e., Operation Menu), we may have used Iraq in 2003 to prevent further escalation in Afghanistan. In other words, it's possible the accusation of WMDs in Iraq had secondary practical purposes, i.e., preventing further escalation within Afghanistan. 

Second, I personally heard General Wesley Clark say that about two weeks after 9/11, he saw plans to invade mostly Muslim countries, including Iraq. 

Third, to the extent I called Afghanistan a Christian/atheist war, you missed my point--I said the country destabilized after atheist-majority (USSR) and Christian-majority (U.S.) countries interfered with it decades ago. (I notice you never disputed the aforementioned statement.) My point was that it is possible that our failure to have a Marshall Plan in Afghanistan post-Cold War led to a power void that allowed terrorists to increase their power within a destabilized country. You never disputed that point, either. 

In short, our military seems to rely on short-term strategies and alliances when faced with a greater potential perceived threat, and it's not clear if we understand the problems this strategy has caused long term. (By the way, we can apply the same line of questioning to our initial support for Saddam Hussein and then our eventual ouster of him.) 

Fourth, we're back at square one, b/c you've ignored my original statement: "In any case, no one here has provided any evidence that Christian-majority countries or atheist-majority countries have not killed the most number of people compared to other religions in the last 250 years." The question is, "What is the reason for this high correlation?" 

You should be able to figure out that I'm trying to teach you and everyone else a lesson so the next time you hear someone call Islam a violent religion, or, in your case, casually associate terrorism with "Islamic radicals," perhaps you'll think twice before associating religion with violence. Because it's quite clear which religion has the #1 death count, religiously-speaking, in the last 250 years. 

We're left with my more interesting question: if, absent religious and racial similarities, history shows that power tends only to understand power, are smaller countries justified in seeking nuclear weapons? Should we stop worrying and learn to love the nuclear bomb, which will force everyone to cooperate by raising the stakes of war? 

Bonus: "A controversial new history of the Indian Mutiny, which broke out 150 years ago and is acknowledged to have been the greatest challenge to any European power in the 19th century, claims that the British pursued a murderous decade-long campaign to wipe out millions of people who dared rise up against them." More here.

Coaching Basketball

In this dribbling drill, the kids have to go around sitting teammates in a weaving fashion. It's fun, especially when the kids try all kinds of "modifications" to stymie the ballhandler. One kid sitting on the edge actually moved next to the wall to prevent anyone from passing him. I thought of the line from Lord of the Rings: "You shall not pass!" :-)

Update: if we apply a legal perspective to the dribbling drill, we can see that some people will always try to game the rules, which is why laws ought to be as narrowly-defined as possible. In other words, the key issue in drafting a law isn't the potential good it can cause, but the potential harm "gamers" can cause.

Also, I just realized I posted this on Valentine's Day. I suppose I like the practice of law, but I love coaching basketball. It's so much fun being able to correct a kid's shooting form or defensive stance and see the player improve within a few hours. Even the advanced players benefit from coaching. I had one kid who is amazing on offense, but not so much on defense (he's smaller compared to others at his grade level). I taught him to immediately go back on defense and try to steal the ball from behind if he gets beat. He did it on Saturday, getting back on defense, stealing the ball, and changing the momentum of a very close game.

Just out of curiosity, if anyone reading this in 2011 has an available job coaching 2nd to 6th graders in basketball anywhere in the world, please let me know. Why 2nd to 6th? I don't have experience coaching 7th to 10th graders, and beyond the 10th grade, coaching is more about physical conditioning, adopting the correct style of play to maximize your players' skill sets, and teamwork than fundamental skills.

Also, pre-hormones, from a teaching perspective, kids are wonderful. By the third grade, they start to get their own personalities and quirks, which is fun to see. After the sixth grade, however, most teenagers tend to immediately rebel against authority, making teaching fundamental skills more difficult. The lesson? Teach 'em when they're young, because after elementary school, if they haven't learned the basic skills, it might very difficult to play catch-up.

Is Christianity a Peaceful Religion?

Is Christianity the religion of peace? Christianity's founder is on record as saying, "Do not think that I came to bring peace on the earth; I did not come to bring peace, but a sword."

Even if Jesus Christ meant an ideological conflict, Christian-majority countries have been the undisputed volume leaders in killing human beings over the last 250 years--at least compared to every other religion. Think WWI, WWII, Vietnam (including My Lai), Iraq (including "The Kill Team"), the Holocaust, etc.

The Old Testament is even more brutal:

Deuteronomy, Ch 7: "and when the LORD, your God, delivers them up to you and you defeat them, you shall doom them. Make no covenant with them and show them no mercy...But this is how you must deal with them: Tear down their altars, smash their sacred pillars, chop down their sacred poles, and destroy their idols by fire. For you are a people sacred to the LORD, your God; he has chosen you from all the nations on the face of the earth to be a people peculiarly his own...The LORD will remove all sickness from you; he will not afflict you with any of the malignant diseases that you know from Egypt, but will leave them with all your enemies...The images of their gods you shall destroy by fire. Do not covet the silver or gold on them, nor take it for yourselves, lest you be ensnared by it; for it is an abomination to the LORD, your God."  (See also Psalm 137.)

From Jesus Christ, full quote: "Do not think that I came to bring peace on the earth; I did not come to bring peace, but a sword. For I came to set a man against his father, and a daughter against her mother, and a daughter-in-law against her mother-in-law; and a man’s enemies will be the members of his household. He who loves father or mother more than Me is not worthy of Me; and he who loves son or daughter more than Me is not worthy of Me. And he who does not take his cross and follow after Me is not worthy of Me. He who has found his life will lose it, and he who has lost his life for My sake will find it." (Matthew 10:34-39 NASB)

Obviously, being related somehow to the most number of killings in the last 250 years doesn't mean Christianity or Christians are more violent in general. Everyone should know the difference between causation and correlation. This is why I find it interesting when Americans and American media outlets associate violence with Islam. I saw a more substantial "conversation" on the issue of religion and violence on Facebook, which I am copying below. The first person is responding to a comment about why Americans sometimes associate Islam with violence.

Facebook Debate

MNA: Some random thoughts... I'm generalizing, and "us" does not necessarily include "me." Radical Islamic fundamentalists have said "Death to America" and some people have chosen to take that personally and as a threat to their very well-being. When threatened, people don't always act rationally or accurately judge how serious that threat may really be. Some of it might be the media coverage - much as we are made to believe that things that kill 10 children a year are "dangerous" it's hard to not perceive the Islamic world as dangerous when we see stories of stonings of women accused of adultery, of honor killings and acid attacks. I think we like to believe that we have moved on and become more experienced and civilized... that confronted with the same situations, we would not behave in the same way. Seeing Muslims acting in vengeful ways straight out of the Bible doesn't make us view Muslims as equally "enlightened."

AC: "You" seem to be saying that it is reasonable for Christians and atheists to feel threatened by the actions of a small minority of Muslims acting barbarically. You then argue that Christians would not act the same way when confronted with the same situations, citing acid attacks and capital punishment. You allege that Christians have "moved on" and become more "civilized."

Acid attacks have happened in America, too--look up Bethany Storro, who, according to various reports, covered her face in acid and blamed it on a black person. I've also heard of acid attacks happening in several high schools in America. Is it rational to believe that America is an evil place because of isolated incidents? Of course not, but your words reveal a certain kind of bias based on selective application of general principles.

Also, America, like Middle Eastern countries, has capital punishment. It's hard to see electrocution as somehow better than stoning, but to the extent there is a difference, it is one of degree, not substance. Your comments seem to prove that human beings tend to think in terms of "us vs. them"--even when substantively, there is little difference between us and them. As a result, realists believe that only power convinces stronger nations to be "civilized." This might be what leads leads Iran and other countries to desire nuclear weapons, i.e., a realistic, rational policy of preservation.

But I'm not done yet. I have two words for you and anyone else who thinks Christian nations are civilized or somehow more civilized than other countries and nationalities: Abu Ghraib.

Let me now flip your statements as an academic exercise: Muslims would like to think that Christians are civilized and enlightened people, but when faced with Abu Ghraib, are Muslims and Muslim-majority countries justified in feeling threatened by Christians? The statistical record does indicate that Christian-majority countries have been highly predisposed to war and mass killings in the last 200 years. Taken together with Abu Ghraib and the 2003 invasion of Iraq based on a false allegation involving WMDs, are Muslim nations not justified in being concerned about their survival?

Overall, your comments indicate a selective memory and a willingness to attribute terrible things to Muslims but not to Christians. But my intent is not to single you out. My point is that human beings have a natural tendency to make people who look and act different from them into "The Other." Realists recognize this innate tendency to believe one's own people are more civilized than "the Other," which can sometimes cause tension and major misunderstandings.

MNA: Umm, I said "I think we like to believe" - I did not say we were right in thinking so, or that it is true. I think almost everyone thinks themselves morally superior to others, until put in a position where they have to make hard choices. Then it has nothing to do with race, color, creed or religion - only content of character as to how we rise to the occasion (or don't). There is no bias here, except yours perhaps ;) I think your entire argument was based around Muslims being somehow morally superior, their values leading them to be more peaceable. Speaking of peaceable...it's merely for "protection" that Iran seeks nuclear weapons? That might seem more plausible if they would stop denying the Holocaust and praying for Israel to be wiped off the map.

AC: Iran's president is a moron--let's agree on that right off the bat. However, his point seems to be that Israel emphasizes the Holocaust as a way of making its country's citizens into victims, which then allows them to victimize Palestinians and Muslims in the Gaza Strip and elsewhere (i.e., 2006 Lebanon War). (Most people intuitively believe that if you're a victim, you cannot be an oppressor or aggressor--see battered wife self-defense theory, etc.)

Thus, Iran's president's goal is to de-legitimize the Holocaust so he can paint Israel as an oppressor of Muslims, which is a stupid, grotesque, and ignorant way of approaching the situation. Even so, statements denying the number of deaths in the Holocaust--though unbelievably stupid and grotesque--say nothing about the likelihood of future attacks against Israel. (You seem to be forgetting that it was Christians that killed the Jews in the Holocaust, not Muslims.) Also, an isolated comment about wiping Israel off the map was stated in the passive voice, i.e., similar to saying that you hope that jerk across the street who's been beating up your brother dies soon. So you still lack objective evidence of any intent by Iran to attack Israel, which would be suicide for Iran, a country that's existed for 3000+ years. In other words, you seem to believe that a 3,000 years old civilization led by a Ph.D. civil engineer wants to commit suicide, even though Iran has a record of protecting Jews (see the story of Esther).

Also, Iran has never done to the Jews what America did to Muslims in Abu Ghraib. Based on your line of reasoning, we should believe that America's nuclear weapons are not for self-defense or peaceful purposes post-Abu-Ghraib and Iraq. If Iran ever rounded up the Jews in Iran and tortured them, your line of reasoning might make more sense, but in the absence of widespread human rights abuses against Jews within Iran, your line of reasoning appears based on prejudice and isolated statements rather than facts. Again, it was mostly Christians who rounded up the Jews in Germany and the Muslims in Iraq and Afghanistan.

It is also interesting that you fail to mention that in the last 200 years, Israelis have killed more Muslims than Iranians have killed Jews--and yet, despite the historical record, you believe Iran has less credibility than Israel when it comes to wanting protection, even though Israel has nuclear weapons and subjects Muslims in the Gaza Strip to daily human rights abuses, while Iran does not yet have nuclear weapons and does not commit daily human rights abuses against its Jewish residents.

In any case, hasn't your selective memory and reasoning proven my point? That no matter how educated or intelligent a person, he or she is a product of his/her environment and is easily led to accept theories based more on prejudice of the "Other" than facts, logic, and history? We are the country that invaded Iraq for no justifiable reason. Modern history shows that countries, especially Muslim-majority countries, not part of the elite or that do not share a sufficient number of characteristics with the power elite should seek the strongest protection possible as a means of self-defense. Is that not a reasonable conclusion based on the record post-Iraq and post-Abu Ghraib? Or do you think it's illogical for Iran to want protection when it sees what a Christian-majority nation did to Iraq and in Abu Ghraib?

Bonus: according Jewish journalist Roger Cohen, "Perhaps I have a bias toward facts over words, but I say the reality of Iranian civility toward Jews tells us more about Iran -- its sophistication and culture -- than all the inflammatory rhetoric. That may be because I'm a Jew and have seldom been treated with such consistent warmth as in Iran." More here.