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10 Sep 18:47

What Destiny Tells Us About the Future of Video Games

by Peter Suderman

Destiny, the new first-person shooter from Bungie, the company that until recently was behind the enduringly popular Halo series, just had the biggest first day of any new video game ever, with more than $500 million in retailer orders during its first 24 hours. A few other video games, like last year’s Grand Theft Auto V (which sold a whopping $800 million worth of games on opening day), have posted better single-day numbers, but they have all been sequels to existing franchises. This is the best start for a new series in video game history.

It’s also a game that suggests where the future of gaming is headed: customizable single-player experiences in the context of a massive social universe, with narratives that sprawl across years and continents of virtual space.

Destiny is essentially a mashup of the massively multiplayer online role playing game (MMORPG) and the traditional first-person shooter (FPS). Just as in most RPGs, players customize the look and capabilities of their characters, but then embark on more traditional FPS-style missions. We’ve seen RPG/FPS hybrids before, of course, with games like Borderlands, but Destiny adds a larger social aspect to the game: Even when you’re playing single-player missions, you’re playing online, on servers populated by other players. They can play with you, co-op style, but often they’ll just be nearby, pursuing their own interests. Maybe you’ll join up for a moment to crush a massive boss, or maybe you’ll just do a little dance and move on (yes, Destiny characters have dance moves).

There’s an overarching story and mythology involving planetary conquest in a post-Utopian inner solar system, but unlike in a traditional single-player adventure, there's no clear end point. Instead, Bungie says the plan is to tell a universe-wide story, with literally game-changing events and new installments, over the course of a decade. Destiny is an attempt to create an expansive virtual universe, and allow each player to experience it in their own way—as whoever they want to be, and whoever they want to be with.

The result of this unique hybrid game design is a dual emphasis on personalization, in which players make choices that determine how they want to play and who they want to be within the game, as well as on player-driven social experience, in which players exist in large part in the context of their relationships to others in the world around them, determining for themselves what sort of social unit they want to be part of.

After finishing up with The Independents last night, I played for a few hours, and my early impression was pretty good. It’s a great looking game, with solid shooting mechanics and a surprisingly deep character upgrade system, a lot of which I haven’t even cracked yet. If you liked playing Halo, you’ll like the gameplay here.

But what struck me most was the social aspect. It’s not nearly as crowded as most of the traditional massively multiplayer games I’ve looked at, and since I was playing solo, there wasn’t the same kind of tight, team-based interaction of typical team-based shooters and co-ops. Instead, there was the unusual sensation of being in the middle of some familiar single-player shooter mission—and then, unexpectedly, running into another player. Usually the encounters were brief; sometimes they lasted for several minutes. But each was a brief reminder that games—even the sort of video games that have long been thought of as strictly for anti-social loners—are social experiences, and that there was, in fact, someone else out there, doing his or her own thing, just as I was doing mine. Judging by yesterday’s revenue figures, there seem to be a lot of them. 

Here's Reason's Nick Gillespie on why Grand Theft Auto V is the new Great Expectations. 

10 Sep 18:03

5 Million Gmail User Accounts, Passwords Hacked...


5 Million Gmail User Accounts, Passwords Hacked...


(First column, 9th story, link)

10 Sep 17:56

Markets in everything: High-tech, sensor-based trash collection saves up to 50% compared to the traditional system

by Mark J. Perry

Here’s a good example of both creative destruction and the invisible hand – Enevo ONe, a Finnish startup, is disrupting the waste management industry with a new, innovative sensor-based trash management system. Here’s how it works (from the company’s website):

Enevo ONe is a comprehensive logistics solution that saves time, money and the environment. It uses wireless sensors to measure and forecast the fill-level of waste containers and generates smart collection plans using the most efficient schedules and routes. The solution provides up to 50% in direct cost savings.

Until now collecting waste has been done using static routes and schedules where containers are collected every day or every week regardless if they are full or not. Enevo ONe changes all this by using smart wireless sensors to gather fill-level data from waste containers. The service then automatically generates schedules and optimized routes which take into account an extensive set of parameters (future fill-level projections, truck availability, traffic information, road restrictions etc.). New schedules and routes are planned not only looking at the current situation, but considering the future outlook as well.

Here’s a Forbes article with some background on how the company got started — the same way most successful companies get started — when Finnish entrepreneur Fredrik Kekalainen had a “eureka moment.”  And most of those “eureka moments” are perfect examples of Adam Smith’s “invisible hand” concept, because entrepreneurs only become successful and rich in the marketplace by figuring out ways to make other people better off through better products or services, cheaper products or services, or new products and services that improve the lives of others. If things work out, entrepreneurs like Fredrik Kekalainen get rich, but their personal wealth is usually only a fraction of the social benefits that they generate collectively for the rest of society. By pursuing their own self-interest (and their desire to become wealthy) entrepreneurs like Fredrik are led by an “invisible hand” to make the rest of us better off. And that’s the miracle of the marketplace that Steven Landsburg described Armchair Economist - the amazing phenomenon that individually selfish behavior leads to collectively efficient outcomes.

HT: Jon Murphy

10 Sep 13:18

UBER accused of discriminating against blind passengers, slamming service dog in trunk...

Jts5665

The taxi cartel is attacking from another angle.


UBER accused of discriminating against blind passengers, slamming service dog in trunk...


(Third column, 23rd story, link)

09 Sep 16:30

School Bureaucracy and the Death of Common Sense

by Jason Bedrick

Jason Bedrick

If you needed more proof that bureaucracy induces the sacrifice of common sense to rigid rules, there’s this forehead-slapping story from the Washington Post’s Petula Dvorak:

Avery Gagliano is a commanding young pianist who attacks Chopin with the focused diligence of a master craftsman and the grace of a ballet dancer.

The prodigy, who just turned 13, was one of 12 musicians selected from across the globe to play at a prestigious event in Munich last year and has won competitions and headlined with orchestras nationwide.

One would expect that she’d be the pride of her school. Unfortunately, little Miss Avery attended a government-run school in Washington D.C.

But to the D.C. public school system, the eighth-grader from Mount Pleasant is also a truant. Yes, you read that right. Avery’s amazing talent and straight-A grades at Alice Deal Middle School earned her no slack from school officials, despite her parents begging and pleading for an exception.

“As I shared during our phone conversation this morning, DCPS is unable to excuse Avery’s absences due to her piano travels, performances, rehearsals, etc.,” Jemea Goso, attendance specialist with the school system’s Office of Youth Engagement, wrote in an e-mail to Avery’s parents, Drew Gagliano and Ying Lam, last year before she left to perform in Munich.

Although administrators at Deal were supportive of Avery’s budding career and her new role as an ambassador for an international music foundation, the question of whether her absences violated the District’s truancy rules and law had to be kicked up to the main office. And despite requests, no one from the school system wanted to go on the record explaining its refusal to consider her performance-related absences as excused instead of unexcused.

The decision might be understandable if her piano-playing came at the expense of her literacy and numeracy, but Avery earned straight-A’s and her parents went above and beyond to ensure that her that she continued to make academic progress.

Avery’s parents say they did everything they could to persuade the school system. They created a portfolio of her musical achievements and academic record and drafted an independent study plan for the days she’d miss while touring the world as one of the star pianists selected by a prestigious Lang Lang Music Foundation, run by Chinese pianist Lang Lang, who handpicked Avery to be an international music ambassador.

But the school officials wouldn’t budge, even though the truancy law gives them the option to decide what an unexcused absence is. The law states that an excused absence can be “an emergency or other circumstances approved by an educational institution.”

Too bad, so sad. After 10 unexcused absences, it doesn’t matter whether a child was playing hooky to hang at the mall or charming audiences in Hong Kong with her mastery of Mozart. D.C. bureaucrats will label the kid a truant, will mar her transcript with that assessment and will assign a truancy officer to the case.

It was at that point that Avery’s parents decided she would no longer perform in the school’s theater of the absurd. Unable to afford private school, they decided to home-school their daughter.

“We decided to home-school her because of all the issues, because it was like a punch in the gut to have to face the fight again this year,” said Gagliano, who works at Hertz Car Rental. “We didn’t want to do this. We want to be part of the public school system. Avery has been in public school since kindergarten. She’s a great success story for the schools.”

Yet maddeningly, the government-run school doesn’t see it that way—a fact that Dvorak contrasts with a local Catholic school that not only allowed a student to take time off to win Olympic gold medals in swimming, but also proudly displays her achievements on their website.

What explains the difference in treatment?  Ludwig von Mises observed in Bureaucracy that government agencies exert powerful pressure on even the most well-meaning bureaucrats to follow predetermined rules, even to the point of absurity (like, say, a school district banning chapstick as “over-the-counter medicine”). Von Mises wrote:

Public administration, the handling of the government apparatus of coercion and compulsion, must necessarily be formalistic and bureaucratic. […] It is useless to blame them for their slowness and slackness. It is vain to lament over the fact that the assiduity, carefulness, and painstaking work of the average bureau clerk are, as a rule, below those of the average worker in private business. (There are, after all, many civil servants whose enthusiastic fervor amounts to unselfish sacrifice.) In the absence of an unquestionable yardstick of success and failure it is almost impossible for the vast majority of men to find that incentive to utmost exertion that the money calculus of profit-seeking business easily provides. It is of no use to criticize the bureaucrat’s pedantic observance of rigid rules and regulations.

When parents have the ability to remove their children from a school that isn’t meeting their needs and send them somewhere else, the schools must be responsive to their needs. By contrast, assigned district schools in lower-income areas have a captive audience, so there is no incentive to meet parental and student needs beyond the bureaucrat’s goodwill. But as Avery’s parents sadly learned, when that goodwill conflicts with some rule or regulation, it’s the latter that tend to win out.

09 Sep 15:57

Matt Ridley on the historical roots of government

by Mark J. Perry

From Matt Ridley’s latest post “Government begins as a monopoly on violence.”

Nobody seems to agree whether Islamic State is best described as a gang of criminals, a terrorist organization or a religious movement. It clearly has a bit of all three. But don’t forget that it aspires, for better or worse, to be a government. A brutal, bigoted and murderous government, its appeal is at least partly that it seems capable of imposing its version of “order” on the territory it controls, however briefly. It reminds us that the origin and defining characteristic of all government is that it is an organization with a monopoly on violence.

One of the great peculiarities of the United States is that it never quite managed to impose a state monopoly on powerful weaponry. The right to bear arms was a reaction to the presence of redcoats as an occupying army before 1783. The government got to own the tanks and aircraft carriers, but never pointed them at its own people, who were allowed to own guns much more freely than in other countries.

This is what makes the kit that the police displayed in Ferguson, Missouri, this month so alarming. With their camouflage uniforms, armored vehicles and heavy-caliber machine guns, “law enforcement” cops looked less like a constabulary and more like an occupying army. In recent years, largely by exploiting the “war” on terror and the “war” on drugs, the American police have indeed been radically militarized.

09 Sep 15:37

Could The Alibaba Model Undo The Wal-Mart Model?

by Tyler Durden

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

These are questions that arise as a consequence of the digitization of the global/local supply chain in the peer-to-peer model.

Longtime correspondent Bill M. reckoned I missed the longer-term story in my piece on the Alibaba IPO: namely, that the Alibaba Model of makers selling directly to buyers could undo the Wal-Mart Model of super-stores dependent on massive inventory. My essay The China Boom Story: Alibaba and the 40 Thieves addressed the China Boom rather than the Alibaba model, so let's compare and contrast the Alibaba model and the Wal-Mart model.

We all know the Wal-Mart Model: squeeze suppliers until they're gasping for air ("sure, you're losing money on every unit you sell us, but you'll make it up on volume") and then transport all this stuff across the Pacific to a vast warehousing and shipping operation that must keep hundreds of sprawling (and costly) superstores stocked with hundreds of different items.
 
This model gained supremacy because it lowered costs to consumers by outsourcing the production of most of the inventory. Generally built outside of towns, the superstores thrived in an era of low gasoline costs and cheap credit, i.e. the past few decades.
 
Competition was held at bay by the sheer size of the superstores' purchasing might: nobody ordering small lots could buy stuff at the same price as someone ordering a million units.
 
The Alibaba Model is a peer-to-peer system that enables makers/suppliers and buyers to link up supply and demand in real time. Let's say I want 100 bicycle wheels of various sizes for my bicycle repair shop, to replace all the wheels stolen from unsecured bikes with quick-release hubs.
 
In the peer-to-peer market (the Alibaba Model), my bid for the 100 bicycle wheels is visible to a universe of makers/suppliers. Maybe some supplier has an overstock, or a manufacturer has piled up some extras or has a slack day to fill on the production line. There are any number of reasons why a maker/supplier might be able to get close to Wal-Mart's price for a small batch order.
 
Depending on my own distribution network, the 100 wheels might not even be inventoried in a warehouse: the day they arrive, I might ship them to others who already ordered wheels from me--from individuals to institutions to other repair shops.
 
The digital overhead of the transaction is near-zero, and managing the logistical supply chain is low-cost as well. There is very little overhead compared to the vast hierarchy of corporate controls and management of the superstore model.
 
This enables both the maker and the buyer to offer better prices with higher margins than either could get in the Superstore Model. In essence, the profit and overhead skimmed by the Superstore Corporation can be split between buyer and seller.
 
The Alibaba Model is not limited to China. After reading Shenzhen trip report - visiting the world's manufacturing ecosystem, Correspondent Mark G. observed: The injection mold making they discuss as a strength in Shenzhen is precisely what Phil Kerner teaches at hisThe Tool And Die Guy website. Resurrecting that supporting skill community ecology is why I regard such teaching materials from Kerner and Tubal Cain on Youtube as so vital: Index of Tubal Cain "Machine Shop Tips" videos on YouTube.
 
Toss in the ongoing revolution in affordable desktop 3-D fabrication machines, and it's not too hard to discern the price advantages of the Superstore Model eroding fast, especially if consumers wise up that "low prices" are not low if the quality is so poor the product must soon be replaced.
 
How much would I pay to avoid the weeks-long shipping delay from Asia? Does that premium enable local shops to compete with Asian workshops, despite the lower wages paid in China, Vietnam, and other emerging economies?
 
How much would I pay to have the item I want delivered to me rather than have to drive miles to the Superstore? if I add up the maintenance costs, fuel and other expenses of operating my car, and the time wasted in traffic, standing in line, etc., how much cheaper is the Superstore price?
 
How much would I pay to direct my money went to a local worker/shop owner I know and trust rather than to some supplier in a distant city?
 

These are questions that arise as a consequence of the digitization of the global/local supply chain in the peer-to-peer model. Just as we have reached Peak Central Planning and Peak Central Banking, we may have reached Peak Centralization not just in government and finance but in the corporate-cartel model of "low quality at high margins."

09 Sep 15:34

Government Agencies Can Come After Your Paycheck If You Don't Pay Your FOIA Fees

by Tim Cushing
The struggle to force the government to behave in a transparent fashion often runs through the FOIA process. When the government responds, it often takes out meaningful information by abusing FOIA exemptions. When the government doesn't respond, the "free" request becomes a rather expensive trip through the nation's courts.

Even when the government responds, it may decide not to waive fees, leaving the requester to come up with anything from several hundred to several thousand dollars in order to see documents created with taxpayer funds by federal employees. Entities like MuckRock deal with this obstacle through crowdfunding. But not every requester has access to this sort of support. If the documents are delivered without full payment (some just require a first installment of a certain percentage), the government can come after you for the uncollected fees.

But the government's collection efforts go beyond series of increasingly angry letters. According to information compiled by indispensable blog Unredacted, the government has the option to start docking your paycheck.

In a letter to the FOIA Advisory Committee, Michael Ravnitzky points to an article at Washington-focused blog The Hill that indicates that some government agencies are willing to use this method to collect unpaid FOIA fees. [pdf link]
I would like to bring the following issue to the Committee’s attention: application of Administrative Wage Garnishment to fees assessed for Freedom of Information Act requests.

Federal agencies have begun exploring and instituting a new weapon to use against FOIA requesters: wage garnishment. Here is a link to an article that mentions two agencies: one that is implementing wage garnishment and one that has decided not to do so after receiving some unfavorable feedback.

http://tinyurl.com/FeeGarnishment

In this case, two agencies have already sought permission to use wage garnishment in FOIA cases for unpaid fees. A number of other agencies have established rules implementing the Administrative Wage Garnishment - AWG - provisions of the Debt Collection Improvement Act of 1996 - DCIA, but do not mention FOIA specifically. Other agencies are in the process of such rules, or are planning to add such rules.
As he cautions, the use of this collection method will only further encourage onerous and abusive fees.
Agencies often impose disproportionate fees that have the effect of deterring certain types of requests. For example, requesters frequently receive large fee letters without benefit of a preliminary call or note from the agency to discuss the possibility of a narrowed or more specified request, or to help clarify fee status.

Agency staff often charge review fees to noncommercial requesters, despite the fact that such fees are inapplicable. Agency staff frequently seek to charge search fees to newsmedia requesters, again despite the fact that such fees are inapplicable.

Noncommercial requesters are subject to search and review fees when responses are not provided within the statutory deadlines, even though the law precludes such fees, agencies asserting that all or nearly all the records requests they receive are subject to unusual and exceptional circumstances. Agencies even have imposed large page by page duplication fees, even when supplying electronic copies of records that already exist in electronic form.
As Ravnitzky notes, this form of collection is particularly intrusive and can have adverse effects on requesters. For the citizen on the receiving end, this can adversely affect current and future employment, as well as possibly prevent them from obtaining housing or vehicles. For those already employed, it informs employers of little more than the fact that their employee owes the government money -- which implies all sorts of unseen dishonesty.

Ravnitzky calls it the "nuclear option," one which certain agencies might deploy as further discouragement for future FOIA requests. Every government agency has many other options to resolve this issue (blocking of further requests and withholding of remaining responsive documents, to name a few) that this fee extraction method shouldn't even be on the table.

The most disgusting aspect of this is that certain agencies (and I imagine there will be more who warm to the idea) feel entitled to take funds (well, additional funds) right out of citizens' paychecks to pay for documents created, stored and distributed by taxpayer-funded agencies and taxpayer-funded employees. This isn't like a federally-funded school loan where the government has spotted a member of the public the money to finish their education. This is the government extracting fees for information it won't release until asked and charging ridiculous amounts for it. The fact that this method is available to government agencies is its own chilling effect, running directly contrary to the spirit of the Freedom of Information Act.

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09 Sep 14:09

Americans Say: Curb Election Spending, But Absolutely No Curbs on Speech

by Emily Ekins

On Monday, Senate Democrats voted to advance a constitutional amendment that would allow Congress to regulate money raised and spent by candidates. It would also effectively overturn the Citizens United ruling and allow Congress the ability to restrict individuals, groups, corporations, and unions from using their resources in ways that Congress believes will influence elections:

"Congress and the States may regulate and set reasonable limits on the raising and spending of money by candidates and others to influence elections."

Background is useful here: The Citizens United case determined whether it was constitutional for the McCain-Feingold campaign finance law to prohibit—with threats of fine and imprisonment—a small non-profit group from airing a critical documentary about Hillary Clinton within 30 days before a Democratic presidential primary. Ultimately, the court ruled such bans on independent expenditures by corporations, labor unions, nonprofits, and associations violated the First Amendment.

In oral arguments before the U.S. Supreme Court, the Obama administration lawyer arguing the case conceded that in order to regulate money and electioneering, this necessarily gave Congress the power to also ban Internet videos, political pamphlets and books if businesses, unions, or non-profit interest groups paid for them.

The logic behind this argument is clearly troubling since the First Amendment of the U.S. Constitution explicitly protects against this very thing: "Congress shall make no law…abridging the freedom of speech, or of the press."

One might reasonably ask why the act of regulating independent spending during elections could infringe on free speech. Sen. Ted Cruz (TX-R) provides some explanation as for why:

"Speech is more than just standing on a soap box yelling on a street corner. For centuries the Supreme Court has rightly concluded that free speech includes writing and distributing pamphlets, putting up billboards, displaying yard signs, launching a website, and running radio and television ads. Every one of those activities requires money. Distributing the Federalist Papers or Thomas Paine's "Common Sense" required money. If you can prohibit spending money, you can prohibit virtually any form of effective speech." [emphasis added]

To combat concerns that the proposed measure could infringe upon speech, its sponsors added Section 3 stating that the amendment should not be allowed to "abridge the freedom of the press."

Notice that speech is not mentioned. This suggests that only those who Congress confers the status of "press" receive protection. It's worth remembering that recently Congress has defined the press as only those meeting very specific criteria. For instance, Sen. Chuck Schumer's media-shield law explicitly did not cover bloggers or anyone not considered a "covered journalist." He even admitted a "covered journalist" might not even include journalist Glenn Greenwald who reported Edward Snowden's revelations about the NSA's domestic surveillance programs.

Cruz has provided a list of potential activities the proposed constitutional amendment could potentially allow Congress to ban:

  • Congress could prohibit the National Rifle Association from distributing voter guides letting citizens know politicians' records on the Second Amendment.
  • Congress could prohibit the Sierra Club from running political ads criticizing politicians for their environmental policies.
  • Congress could penalize pro-life (or pro-choice) groups for spending money to urge their views of abortion.
  • Congress could prohibit labor unions from organizing workers (an in-kind expenditure) to go door to door urging voters to turn out.
  • Congress could criminalize pastors making efforts to get their parishioners to vote.
  • Congress could punish bloggers expending any resources to criticize the president.
  • Congress could ban books, movies (watch out, Michael Moore) and radio programs—anything not deemed "the press"—that might influence upcoming elections.

While today no one is arguing to ban the aforementioned activities, it still remains unclear how the amendment would ensure the law couldn't be used to prohibit them.

Section 2 of the proposed amendment does say that Congress "may" distinguish between regular people and corporations, but it certainly doesn't guarantee to individuals, nonprofits, and other groups that their First Amendment rights won't be infringed.

Therefore, the burden of proof stands squarely on the shoulders of Congressional Democrats to explain why giving Congress this expanded authority could not lead to banning political books and pamphlets as the Obama administration's own lawyer once said campaign finance laws could.

In a Politico op-ed, Sen. Chuck Schumer and Rep. Ted Deutch argue Cruz is wrong and promise their proposed constitutional amendment "will not infringe on citizens' First Amendment rights." But they don't provide any evidence or explanation for why it won't. Instead, they argue that efforts to curb the power of rich people spending in elections will offset costs to the average individual created by their proposed amendment. Their op-ed gives the impression to readers that perhaps the only check on Congressional authority would be a promise of goodwill, and voters are asked to trust their political leaders to know what's best.

So ultimately the debate rests on this fundamental question: Can Congress actually regulate money in politics without necessarily infringing on speech, or does speech often require money be spent in order to actually disseminate the communication to a mass audience? The public's support for such an amendment ultimately hinges on the answer to this question.

The latest Reason-Rupe poll sheds some light on this question, finding that 57 percent of Americans would support a constitutional amendment that "allows Congress and state governments to regulate campaign contributions to and spending by candidates for office," while 36 percent would oppose. This is actually a bipartisan affair—59 percent of Democrats, 58 percent of Independents, and 54 percent of Republicans would all support such an amendment—including 57 percent of tea party supporters.

However, fully 75 percent of all Americans would oppose such an amendment if it "also allowed Congress and states to regulate activities by individuals and groups, such as blogging or publishing a book that support or oppose a political candidate." Only 15 percent would continue to favor such legislation.

In sum, the public supports efforts to reduce the effect of money in elections, but will not tolerate costs to speech if those are required.

Schumer and Deutsch ask the public to conduct a "balancing test" when considering the costs and benefits of the First Amendment. But they fail to explain how their amendment's benefits will offset the costs to free speech.

It is clearly troubling to think that "nefarious" roving billionaires are buying elections and crowding out the voices of average Americans. But if it were so easy, then why didn't Republican billionaires succeed in 2012 after committing hundreds of millions to defeat Democrats? Why despite billionaire Tom Steyer's commitment of $100 million to elect members to combat climate change, has there not been significant legislation to that end? Why despite Meg Whitman's $1.4 billion net worth and spending $140 million of her own money in 2010 did she handily lose California's gubernatorial election?

The answer seems to be that money cannot buy people's hearts and minds; the American people are not sheep. Voters may favor efforts to reduce the effect of money in elections, but when it comes down to it, Americans value their speech over iterative attempts to control the flow of money.

08 Sep 19:19

[via]



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08 Sep 18:34

The Ten Richest Americans in History

by Don Boudreaux
(Don Boudreaux)

Adjusted for inflation, who are the richest Americans in history measured in money?  CNNMoney has the scoop.  (HT Rob Wilson)

I’ve looked so far at only the first ten.  Of them, only one – Stephen Van Rensselaer (#6 on the list) – inherited a large fortune.  All of the others began life either modestly or, like #1, J.D. Rockefeller, began life downright, hard-scrabble poor.

These facts are powerful evidence against Thomas Piketty’s thesis.  (It’s interesting to note that Van Rensselaer apparently didn’t collect all of the literal rents that were owed on his property.  He did, however, found the great polytechnic school that is near the top of my son’s list of colleges to attend.)

Had I more time now, I’d repeat here one of my favorite themes – one that I’ll only hint at by asking any middle-class American now reading my words if he or she would trade places with the J.D. Rockefeller of, say, 1890 (or, for that matter, of whatever year the man was alive).  I wouldn’t trade places with him – and it’s not even close to being a close call.  So this fact means that I’m materially richer than was J.D. Rockefeller.  My guess is that most of you who are reading these words now are the same as me in this regard – which means that we are all wealthier than is the American who in history owned the largest inflation-adjusted stock of money and financial assets.

08 Sep 15:05

Quotations of the day from Alan Greenspan

by Mark J. Perry

1. “Capitalism is based on self-interest and self-esteem; it holds integrity and trustworthiness as cardinal virtues and makes them pay off in the marketplace, thus demanding that men survive by means of virtue, not vices. It is this superlatively moral system that the welfare statists propose to improve upon by means of preventative law, snooping bureaucrats, and the chronic goad of fear.”

The Assault on Integrity“, 1963 (HT: Dennis Gartman in today’s The Gartman Letter)

2. “The world of antitrust is reminiscent of Alice’s Wonderland: everything seemingly is, yet apparently isn’t, simultaneously. It is a world in which competition is lauded as the basic axiom and guiding principle, yet “too much” competition is condemned as “cutthroat.” It is a world in which actions designed to limit competition are branded as criminal when taken by businessmen, yet praised as “enlightened” when initiated by the government. It is a world in which the law is so vague that businessmen have no way of knowing whether specific actions will be declared illegal until they hear the judge’s verdict—after the fact.”

“Antitrust,” essay at the National Association of Business Economists (September 25, 1961); published in Capitalism: The Unknown Ideal.

08 Sep 13:15

Feds to Spend $500K for New Art at Border Patrol office...


Feds to Spend $500K for New Art at Border Patrol office...


(First column, 5th story, link)
Related stories:
05 Sep 18:52

Is John Kerry mentally ill? ‘Scriptures Commands America To Protect Muslims From Global Warming ‘

by Anthony Watts
At first, I thought this had to be a joke in the style of “The Onion”. Sadly, no. I have video of this dolt saying this on C-Span. I don’t know who’s more dangerous to humanity, Kerry or ISIS. The video: Here is some history leading up to this epic inanity. In February, Kerry said…
05 Sep 18:43

Argentina Goes Full-Venezuela - Plans To Regulate Prices, Profits, & Production

by Tyler Durden

Just weeks after defaulting (yet again) on its debt (whether technically or not), and shortly after raising the minimum wage by 31% (to $523 a month) amid runaway inflation, it appears Argentina has gone full-Venezuela. As WSJ reports, the great minds that 'run' Argentina have decided to pass legislation (dubbed "the supply law") letting the government regulate private-sector prices, profit margins and production levels. The opposition is up in arms, "this is absolutely ridiculous. It's part of a very primitive ideology that says government officials should decide what people should make, how much they should make and how much they should charge," adding that "we already know exactly what it is like to suffer from these kind of interventionist economic policies," in Venezuela.

 

As The Wall Street Journal reports,

A month after Argentina defaulted on its debt, big companies here say they fear that something else could do much more damage to the economy - legislation letting the government regulate private-sector prices, profit margins and production levels.

 

On Thursday, Argentina's senate passed a bill to do just that. The bill is expected to pass the lower house within weeks.

 

As written, the bill would allow the government to "establish, at any stage of the economic process, profit margins, reference prices, maximum and minimum prices, or all or any of these measures."

 

Critics say the bill, informally dubbed the supply law, would bring Argentine regulations in line with those of Venezuela, where inflation hovers around 60% and goods like sugar and toilet paper can be scarce.

 

...

 

"This is absolutely ridiculous. It's part of a very primitive ideology that says government officials should decide what people should make, how much they should make and how much they should charge," said Congressman Federico Pinedo of the opposition Pro party.

 

...

 

"We already know exactly what it is like to suffer from these kind of interventionist economic policies," said Luis Etchevehere, president of the Argentine Rural Society, the country's top farm group. "This will lead to divestment and possibly even supply shortages of some products like is now happening in Venezuela."

 

"If this kind of thing failed in Venezuela, why would you want to try it again here?" asked San Juan Province Senator Roberto Basualdo, himself a businessman. "Nobody will invest in this context."

But Argentine officials say it's different this time...

Nicolás Maduro Jr., the 20-something son of Venezuela's president, met with Argentine legislators here last week, reportedly to discuss the bill and Venezuela's experience with its own version of a supply law.

 

Argentine officials say the criticism and comparisons to Venezuela are misguided.

 

"We can require companies to produce things only if they're essential and necessary for people, and could create scarcity problems without them," Mr. Costa said in an interview. "They have to be goods that meet basic and essential needs of the population or there has to be a situation that very clearly distorts the market."

*  *  *

Economists, some of whom expect the economy to shrink by anywhere from 1% to 3% this year, say the timing of the bill is worsening an already bad business climate.

"You won't find any logic in this if you're looking at the economy and the need to attract investment," said Nicolas Solari, a political analyst at Poliarquia. "The supply law is a weapon that lets the government keeps businessmen in line during a period of economic and political adversity."

And businessmen (unsurprisingly) are not happy...

"This bill constitutes a grave intrusion into the decisions made by private sector companies and is clearly unconstitutional," the Argentine Business Association said a recent statement.

05 Sep 13:31

Missed This When It Came Out, But Very Cool

by admin
04 Sep 21:38

The Educrats

by John Stossel

The current debate over Common Core makes this proposed "reform" sound like something new and unique. But it's not. As Andrew Ferguson points out in this Weekly Standard cover story (which I borrow from liberally in this blog post and on my show tonight), Common Core happened just eight years after President George W. Bush and Ted Kennedy offered us another "revolutionary" approach to learning: No Child Left Behind.

No Child Left Behind came eight years after President Clinton thought up Goals 2000, a nation-wide school reform. But Goals 2000 was a reworking of another plan called America 2000 pushed by the first President Bush. He wanted to be called "the education president".

Only seven years before President Bush's national education strategy, President Reagan released something similar.

I wonder why that was needed. Didn't President Carter restore excellence with the creation of the federal Department of Education?

No. 40 years of "new" ideas. It is like an itch that reformers just can't scratch. And why should they?

A new education reform brings them money. And since the reforms never work, the last reform creates the need for more reform and more money. America now spends three times what we spent when President Carter "fixed" the problem by creating the Department of Education.

Triple the money, but no improvement. Well, improvement for professional education researchers! Money pours in from government and foundations. An army of these "educrats" found work as lobbyists, psychologists, and education theorists at graduate schools of education, foundations, and government education departments.

But our government schools still stink.

More about the history of the reform failure and how a little market competition would be a much better solution this Sunday my show "Back to School" at 10 PM ET on Fox News.

04 Sep 14:46

School bans 'unsupervised cartwheels' on playground...


School bans 'unsupervised cartwheels' on playground...


(First column, 14th story, link)

03 Sep 19:51

Lone Armed Woman Corners Home Invader: 'I'll Blow Your 'Bleeping' Head Off'

On September 2 an armed Omaha, Nebraska woman cornered an intruder in her house and told him not to move or she'd "blow his 'bleeping' head off."

The intruder complied.

According to Omaha.com, 52-year-old Barbara Haley was home alone when she heard a noise around 3 am. She grabbed her gun, walked through her house, and found nothing. She went back to bed and heard a "huge crash," after which she grabbed her gun again and went looking.

Her dog led her to a bedroom closet where she found the intruder. She pointed her gun at him and said, "Don't move or I'll blow your 'bleeping' head off."

The suspect began "begging her to ease off" and she told him to "shut up." She then "cocked the gun so he could hear it," called 911, and held the suspect at gunpoint until police arrived. 

Haley's husband was out of town when the home invasion took place. Before leaving town, he showed her how to take the handgun out of the holster in case she needed it. He told her: "If you have to use it, you want to use it right."

Follow AWR Hawkins on Twitter: @AWRHawkins. Reach him directly at awrhawkins@breitbart.com.


 








03 Sep 18:00

Anarchy in Kurdistan?

by Jesse Walker

Possibly Bookchin's best text; definitely his best cover.The Kurdistan Workers' Party, or PKK, has been active in the Kurdish parts of Turkey since the '70s. It has a sometimes sordid history: Its politics were Marxist-Leninist, and its willingness to kill prisoners and civilians earned a rebuke from Amnesty International. Its leader, Abdullah Öcalan, has been under arrest since 1999, but its armed struggle with the Turkish state continued until a ceasefire was reached last year.

I was vaguely aware of all that, and I may even have read at some point that Öcalan had recently rejected his old Leninist outlook and terrorist tactics, proclaiming a newfound devotion to democracy. What I did not realize was what brand of democracy had attracted Öcalan's interest. Somehow, he became smitten with the American left-anarchist Murray Bookchin. He appears to be particularly interested in Bookchin's idea of devolving power to cities governed by neighborhood assemblies.

I just called Bookchin an anarchist, but by the time he died Bookchin had rejected that label, calling himself a "Communalist" instead. But I'm not writing this post to discuss Bookchin's ideas—the curious reader can check out my obit for him here and Reason's interview with him here—so much as just to express my astonishment to see Bookchinism bubbling up in the PKK, of all places.

ROAR has more on Öcalan's evolution here. Bookchin's partner Janet Biehl discusses these developments here. Some left-anarchists greet the PKK's conversion with a mixture of interest and skepticism here. Kevin Carson is enthusiastic here. The most blistering critique of Bookchin ever written is here. A latebreaking correction to my Bookchin obit is here.

02 Sep 15:55

Yes, the Government Can Turn Even the Grand Canyon Into a Money Pit

by J.D. Tuccille

Grand CanyonGrand Canyon National Park has unrivaled views, and a steady flood of tourists eager for a look, and for a place to get a bite and sleep while they're visiting. So why can't the National Park Service (NPS) get companies to bid on taking over the hotels and restaurants at the rim—facilities that you think would be gold mines for anybody with a bit of business sense?

Could it be because the NPS wants the new concessioner to assume tens of millions of dollars of debt to the last vendor, while keeping less of the proceeds than its predecessor? You bet.

"We were ignoring a debt that was accruing in the park," Grand Canyon Superintendant Dave Uberuaga told Fronteras. The NPS currently owes Xanterra, a longtime concessioner descended from the old Fred Harvey company, $157 million. That's actually an improvement. When the park started unsuccessfully soliciting bids, the amount of the Leashold Surrender Interest—the sum owed to Xanterra for capital improvements it made to aging facilities—was actually $198 million. DNC Parks & Resorts picked up $41 million of that as part of a smaller contract at the park, leaving the NPS to figure out what to do with the rest of the debt it had allowed to accumulate.

Under a 1998 law, contracts must now (with some exceptions) be put out to bid every ten years. But if a concessioner loses a contract, it's owed the value of capital improvements to be paid by the United States government or the successor company.

Grand CanyonXanterra has managed facilities at the park for decades, paying the government 3.8 percent of gross revenues for the privilege. But it also shouldered the cost for improving the facilities in anticipation of being compensated...eventually. The contract is now up for rebidding, and the company doesn't seem very interested in continuing its relationship with the NPS (neither Xanterra nor the National Park Service responded to questions by press time). In fact, nobody seems interested in the current terms—none of the bids received adhered to the NPS's specified conditions.

So Grand Canyon National Park sweetened the deal by paying $100 million of the money owed, with much borrowed from other parks so that the new concessioner would "only" have to pay $57 million. But the new solicitation also specifies that the lucky "winner" will have to pay a minimum franchise fee of 14 percent for the 15 year life of the contract, making the arrangement rather less lucrative than the one Xanterra had for so long, unpaid debt aside.

And there just might be some concern that the NPS won't be any better in the future about paying debts owed to concessioners—especially since it just ran up a hefty tab to other parks that want their money back. The park estimates annual gross revenue for the contract at $66.1 million, which you'd think would mean a chance at healthy profits. But if 14 percent of that goes to the government, the properties have to be maintained and improved, and you're starting off with a big bucket of red ink...

The Grand Canyon may be the biggest damn hole in the world, and a popular one at that. But the federal government has managed to make a huge tourist draw into a money-loser.

02 Sep 13:53

Past 6 years have been a laboratory experiment in Keynesian economic theory. Result? It failed and is now officially dead

by Mark J. Perry

At his Calafia Beach Pundit blog, Scott Grannis recently posted a pretty devastating critique of Keynesian economic theory and the abject failure of Keynesian fiscal stimulus in the period following the Great Recession (“the most expensive such failure in the history of the world”), here’s an excerpt below and I encourage you to read the entire post (with charts) here – “What Happened to the Profits?“:

Despite assurances from politicians and most economists of Keynesian persuasion, not only did the biggest and most rapid increase in our federal debt burden [in the six years ending June 2014] since WW II fail to boost the economy, it coincided with the weakest recovery in history—growth of only 2.2% per year on average. This is not a problem of not spending enough, it is a failure of ideology, and arguably the most expensive such failure in the history of the world.

Here’s the failure in a nutshell: The government can’t stimulate the economy by borrowing from Peter and sending a check to Paul, because that doesn’t create any new demand—it’s like taking a bucket of water from one end of the pool and pouring it into the other end; the level of the water doesn’t change. And the government can’t stimulate the economy by spending more, because the government is notoriously inefficient (not to mention the fraud, waste, and incompetence that surround most major public initiatives); the private sector is far more likely to spend its money wisely and productively than the government is. Growth only happens when an economy produces more from a given amount of resources—when productivity rises. And productivity only rises when people work more, smarter, and more efficiently, and that takes hard work and risk. You can’t just dial up productivity, you have to work for it. We can’t “spend our way to prosperity,” as the late and great Jude Wanniski told us.

Here’s my interpretation of what really happened in a nutshell: the private sector generated $8.9 trillion of profits in the past six years, and the federal government borrowed 83% of those profits to fund a massive increase in transfer payments, income redistribution, bailouts, subsidies, and a modest increase in infrastructure spending (only 8% of the 2009 American Recovery and Reinvestment Act went to transportation and infrastructure).

What happened to all the profits? Almost all of the most incredible surge in profits in modern times was squandered by our government, flushed down the Keynesian drain.

The past six years in effect have been a laboratory experiment to determine whether Keynesian economic theory is valid. The result? Keynesian economic theory is (or should be) officially dead. It doesn’t work. Government can’t boost the economy by borrowing or spending more money. Politicians will be unhappy to hear this, of course, since they would prefer that we think they can dispense growth and prosperity on demand. Those who insist in perpetrating this myth should be voted out of office.

HT: Dwight Oglesby

02 Sep 04:08

Homeschool surpasses private school

by noreply@blogger.com (Vox)
In North Carolina:
North Carolina officials say there has been a huge increase over the past two years in the number of Tar Heel families who have pulled their kids out of public schools and begun educating them at home. The number of homeschools has jumped 27 percent since the 2011-12 school year, NewsObserver.com reports.

As of last year, 98,172 North Carolinian children were homeschooled; that’s 2,400 students more than the number who attended a private school.

While the sputtering economy is the reason families are choosing homeschooling over private schooling, the nationalized learning experiment (Common Core) is the main reason families are leaving the public schools in the first place. “Common Core is a big factor that I hear people talk about,” Beth Herbert, founder of Lighthouse Christian Homeschool Association, told NewsObserver.com. “They’re not happy with the work their kids are coming home with. They’ve decided to take their children home.”
One number they omit to mention is 1,443,998. That's the number of public schooled children in North Carolina. Which means that more than six percent of school-age children there are being homeschooled, considerably up from the national average of two percent a few years ago.

Sometimes it's nice to be able to report a positive trend for a change. And it sounds as if the numbers of homeschoolers will continue to grow.

Posted by Vox Day.
30 Aug 02:17

Britain Would Be Second Poorest U.S. State - Below Alabama: Euro Zone GDP Per Capita Ranks Below West Virginia

by Ronald Bailey

USUK FlagFraser Nelson over at The Spectator has crunched the numbers and finds that if Britain were somehow to become the 51st state (OK by me) it would the second poorest state in terms of GDP per capita, ranking below Alabama and just above Mississippi.

Would-be Europhiles might also want to consider that the oil state of Norway would rank 8th, Switzerland 21st, Germany and Sweden would vie for 40th place (below Michigan), and the entire Euro area would rank 45th just below West Virginia's per capita GDP. Ah, such are the glories of welfare statism.

Nelson was apparently prompted to make these calculations in response to the smug condescenion of anti-American commentators about U.S. economic inequality in the wake of the events in Ferguson, MO. As Nelson notes:

No one beats up America better than Americans. They openly debate their inequality, conduct rigorous studies about it, argue about economics vs culture as causes. Their universities study it, with a calibre of analysis not found in Britain. Americans get so angry about educational inequality that they make films like Waiting for Superman. And the debate is so fierce that the rest of the world looks on, and joins in lamenting America’s problems. A shame: we’d do better to get a little angrier at our own.

Speaking of smug condescension, it is well worth your time to click over The Spectator and scroll down Nelson's rankings.

Addendum: Tim Worstall points out over at Forbes, if you apply purchasing power parity adjustments on a state-by-state basis, Britain would actually be the poorest state in the U.S., ranking even below Mississippi.

29 Aug 03:47

Federal Appeals Court Endorses a Heckler's Veto of Provocative Preaching

by Jacob Sullum

Two years ago, Ruben Chavez, Arthur Fisher, and Joshua DeLosSantos, members of a Christian evangelical group known as Bible Believers, attracted a hostile crowd while preaching hellfire and damnation at the Arab International Festival in Dearborn, Michigan. The crowd, which consisted mostly of children, pelted the three evangelists with water bottles and other trash. Police responded by threatening to arrest Chavez and his friends for disorderly conduct unless they left the festival. According to the U.S. Court of Appeals for the 6th Circuit, banishing the provocative preachers from the public festival was perfectly appropriate and did not violate their First Amendment rights.

In a ruling issued yesterday, the appeals court says video of the incident "demonstrates that [the Bible Believers'] speech and conduct intended to incite the crowd to turn violent." How so? "Within minutes after their arrival," Judge Bernice Donald writes in an opinion joined by Judge Samuel Mays, Chavez and his associates "began espousing extremely aggressive and offensive messages—e.g., that the bystanders would 'burn in hell' or 'in a lake of fire' because they were 'wicked, filthy, and sick'—and accused the crowd of fixating on 'murder, violence, and hate' because that was 'all [they] ha[d] in [their] hearts.' These words induced a violent reaction in short order; the crowd soon began to throw bottles, garbage, and eventually rocks and chunks of concrete. Moreover, members of the crowd can be heard to shout 'get them' and 'beat the s*** out of them'; one Bible Believer was pushed to the ground. Chavez's face was cut open and bleeding from where he had been struck by debris."

Because bystanders reacted violently, in other words, that must have been the reaction Chavez and his friends aimed to elicit. The implication is that they were deliberately inciting a riot, meaning their speech was not protected by the First Amendment. But the majority opinion is ambiguous on this point. It also suggests that the the Bible Believers' preaching was constitutionally protected but that making them do it elsewhere amounted to a reasonable "time, place, and manner" restriction in light of the crowd's hostility. "The threat of violence had grown too great to permit them to continue proselytizing," Donald writes. She explains that Dennis Richardson, deputy chief of the Wayne County Sheriff's Office, "had a reasonable good faith belief that the threat of violence was too high because the Bible Believers had already been subjected to actual violence." 

In a powerful dissent, Judge Eric Clay rebukes his colleagues for endorsing a "heckler's veto," as reflected in Richardson's words to Chavez: "What you are saying to them and they are saying back to you is creating danger." Richardson and the other defendants conceded that the Bible Believers' speech was constitutionally protected, Clay notes, and for good reason: It did not qualify as incitement, which requires an intent to provoke "imminent lawless action," or as "fighting words," i.e., "those personally abusive epithets which, when addressed to the ordinary citizen, are, as a matter of common knowledge, inherently likely to provoke violent reaction." Clay observes that "fighting words are defined solely by their impact on the 'average person,'" not the "average Muslim child." The fact that the vast majority of people at the festival did not respond violently to the evangelists shows that their preaching, however obnoxious, did not qualify for this (dubious) exception to the First Amendment.

Confronted by citizens lawfully exercising their First Amendment rights and bystanders lawlessly punishing them for it, the police sided with the violent hecklers. Clay argues that they should instead have tried a little harder to calm the crowd (which, again, consisted mostly of rowdy children), because their first duty in this situation was to protect the peaceful party:

In my view, the video tape shows that Defendants did just about nothing to control the crowd as it grew and became agitated. Defendants only stepped in to inform Plaintiffs that the police were powerless and that Plaintiffs needed to leave under threat of arrest. This is not good faith—it is manufacturing a crisis as an excuse to crack down on those exercising their First Amendment rights.

By validating such police work, Clay warns, the court is inviting more violence and more censorship: 

Law enforcement is principally required to protect lawful speakers over and above law-breakers. If a different rule prevailed, this would simply allow for a heckler's veto under more extreme conditions. Indeed, hecklers would be incentivized to get really rowdy, because at that point the target of their ire could be silenced. More perniciously, a contrary rule would allow police to manufacture a situation to chill speech. Police officers could simply sit by as a crowd formed and became agitated. Once the crowd's agitation became extreme, the police could swoop in and silence the speaker. The First Amendment does not contain this large a loophole.

Cathy Young discussed an earlier case involving evangelists at the Arab International Festival in her 2011 essay "Fear of a Muslim America."

29 Aug 03:38

So In The End, The VA Was Rewarded, Not Punished

by admin
Jts5665

Once again the need for a "that's depressing" button arises...

Remember the whole VA thing?  It has mostly been forgotten, though we will all remember it again, or more accurately get to experience it ourselves, once the Democrats manage to get single payer passed.

People talk about government employees being motivated by "public service" but in fact very few government agencies have any tangible performance metrics linked to public service, and when they do (as in the case of the VA wait times) they just game them.   At the end of the day, nothing enforces fidelity to the public good like competition and consumer choice, two things no government agency allows.

I will admit that government employees in agencies may have some interest in public welfare, but in the hierarchy of needs, the following three things dominate above any concerns for the public:

  • Keeping the agency in existence
  • Maintaining employment levels, and if that is achieved, increasing employment levels
  • Getting more budget

But look at the VA response in this context:

  • The agency remains in existence and most proposals to privatize certain parts were beaten back
  • No one was fired and employment levels remain the same
  • The agency was rewarded with a big bump in its budget

The VA won!  Whereas a private company with that kind of negative publicity about how customers were treated would have as a minimum seen a huge revenue and market share loss, and might have faced bankruptcy, the VA was given more money.

Murry Rothbard via Bryan Caplan:

On the free market, in short, the consumer is king, and any business firm that wants to make profits and avoid losses tries its best to serve the consumer as efficiently and at as low a cost as possible. In a government operation, in contrast, everything changes. Inherent in all government operation is a grave and fatal split between service and payment, between the providing of a service and the payment for receiving it. The government bureau does not get its income as does the private firm, from serving the consumer well or from consumer purchases of its products exceeding its costs of operation. No, the government bureau acquires its income from mulcting the long-suffering taxpayer. Its operations therefore become inefficient, and costs zoom, since government bureaus need not worry about losses or bankruptcy; they can make up their losses by additional extractions from the public till. Furthermore, the consumer, instead of being courted and wooed for his favor, becomes a mere annoyance to the government someone who is "wasting" the government's scarce resources. In government operations, the consumer is treated like an unwelcome intruder, an interference in the quiet enjoyment by the bureaucrat of his steady income.

28 Aug 19:42

Apparently, Corporations Are Not Investing Because They Are Not "Socially Engaged"

by admin

Paul Roberts has an editorial in the LA Times that sortof, kindof mirrors my post the other day that observed that corporate stock buybacks (and investments to reduce tax rates) were likely signs of a bad investment climate.  Until he starts talking about solutions

Roberts begins in a similar manner

Here's a depressing statistic: Last year, U.S. companies spent a whopping $598 billion — not to develop new technologies, open new markets or to hire new workers but to buy up their own shares. By removing shares from circulation, companies made remaining shares pricier, thus creating the impression of a healthier business without the risks of actual business activity.

Share buybacks aren't illegal, and, to be fair, they make sense when companies truly don't have something better to reinvest their profits in. But U.S. companies do have something better: They could be reinvesting in the U.S. economy in ways that spur growth and generate jobs. The fact that they're not explains a lot about the weakness of the job market and the sliding prospects of the American middle class.

I suppose I would dispute him in his implication that there is something unseemly about buybacks.  They are actually a great mechanism for economic efficiency.  If companies do not have good investment prospects, we WANT them returning the cash to their shareholders, rather than doing things like the boneheaded diversification of the 1960's and 1970's (that made investment bankers so rich unwinding in the 1980's).  That way, individuals can redeploy capital in more promising places.  The lack of investment opportunities and return of capital to shareholders is a bad sign for investment prospects of large companies, but it is not at all a bad sign for the ethics of corporate management.   I would argue this is the most ethical possible thing for corporations to do if they honestly do not feel they have a productive use for their cash.

The bigger story here is what might be called the Great Narrowing of the Corporate Mind: the growing willingness by business to pursue an agenda separate from, and even entirely at odds with, the broader goals of society. We saw this before the 2008 crash, when top U.S. banks used dodgy financial tools to score quick profits while shoving the risk onto taxpayers. We're seeing it again as U.S. companies reincorporate overseas to avoid paying U.S. taxes. This narrow mind-set is also evident in the way companies slash spending, not just on staffing but also on socially essential activities, such as long-term research or maintenance, to hit earnings targets and to keep share prices up....

It wasn't always like this. From the 1920s to the early 1970s, American business was far more in step with the larger social enterprise. Corporations were just as hungry for profits, but more of those profits were reinvested in new plants, new technologies and new, better-trained workers — "assets" whose returns benefited not only corporations but the broader society.

Yes, much of that corporate oblige was coerced: After the excesses of the Roaring '20s, regulators kept a rein on business, even as powerful unions exploited tight labor markets to win concessions. But companies also saw that investing in workers, communities and other stakeholders was key to sustainable profits. That such enlightened corporate self-interest corresponds with the long postwar period of broadly based prosperity is hardly a coincidence....

Without a more socially engaged corporate culture, the U.S. economy will continue to lose the capacity to generate long-term prosperity, compete globally or solve complicated economic challenges, such as climate change. We need to restore a broader sense of the corporation as a social citizen — no less focused on profit but far more cognizant of the fact that, in an interconnected economic world, there is no such thing as narrow self-interest.

There is so much crap here it is hard to know where to start.  Since I work for a living rather than write editorials, I will just pound out some quick thoughts

  • As is so typical with Leftist nostalgia for the 1950's, his view is entirely focused on large corporations.  But the innovation model has changed in a lot of industries.  Small companies and entrepreneurs are doing innovation, then get bought by large corporations with access to markets and capital needed to expanded (the drug industry increasingly works this way).  Corporate buybacks return capital to the hands of individuals and potential entrepreneurs and funding angels.
  • But the Left is working hard to kill innovation and entrepreneurship and solidify the position of large corporations.  Large corporations increasingly have the scale to manage regulatory compliance that chokes smaller companies.  And for areas that Mr. Roberts mentions, like climate and green energy, the government manages that whole sector as a crony enterprise, giving capital to political donors and people who can afford lobbyists and ignoring everyone else.  "Socially engaged" investing is nearly always managed like this, as cronyism where the politician you held a fundraiser for is more important than your technology or business plan.  *cough* Solyndra *cough*
  • One enormous reason that companies are buying back their own stock is the Federal Reserve's quantitative easing program, which I would bet anything Mr. Roberts fully supports.  This program concentrates capital in the hands of a few large banks and corporations, and encourages low-risk financial investments of capital over operational investments
  • All those "Social engagement" folks on the Left seem to spend more time stopping investment rather than encouraging it.  They fight tooth and nail the single most productive investment area in the US right now (fracking), they fight new construction in many places (e.g. most all places in California), they fight for workers in entrenched competitors against new business models like Lyft and Uber, they fight every urban Wal-Mart that attempts to get built.  I would argue one large reason for the lack of operational investment is that the Left blocks and/or makes more expensive the investments corporations want to make, offering for alternatives only crap like green energy which doesn't work as an investment unless it is subsidized and you can't count on the subsidies unless you held an Obama fundraiser lately.
  • If corporations make bad investments and tick off their workers and do all the things he suggests, they get run out of business.  And incredibly, he even acknowledges this:  "And here is the paradox. Companies are so obsessed with short-term performance that they are undermining their long-term self-interest. Employees have been demoralized by constant cutbacks. Investment in equipment upgrades, worker training and research — all essential to long-term profitability and competitiveness — is falling."  So fine, the problem corrects itself over time.  
  • He even acknowledges that corporations that are following his preferred investment strategy exist and are prospering -- he points to Google.   Google is a great example of exactly what he is missing. Search engines and Internet functionality that Google thrives on were not developed in corporate R&D departments.  I don't get how he can write so fondly about Google and simultaneously write that he wishes, say, US Steel, were investing more in R&D.  I would think having dinosaur corporations eschew trying to invest in these new areas, and having them return the money to their shareholders, and then having those individuals invest the money in startups like Google would be a good thing.  But like many Leftists he just can't get around the 1950's model.  At the end of the day, entrepreneurship is too chaotic -- the Left wants large corporations that it can easily see and control.
28 Aug 18:05

New Technology Could End The Debate Over Pipeline Safety

by Tyler Durden

Submitted by James Stafford via OilPrice.com,

Who could have ever imagined that North America would surpass Saudi Arabia as the world’s largest producer of oil and natural gas liquids? A decade ago, that would have seemed laughable.

Yet that’s exactly what has happened; and it’s not just Saudi Arabia that has been left in North America’s dust -- Russia has, too.

The surge in North American oil and gas production is arguably the most important development in energy over the last decade. That’s the good news. The not so good news is that North America doesn’t have nearly enough oil and gas pipelines to accommodate its 11-million-barrel-a-day output level.

The famously unresolved proposed Keystone XL pipeline would carry oil from Canada to the U.S. Gulf Coast, but its future is in legal and political limbo. The controversial Northern Gateway pipeline, proposed as an alternative to Keystone XL, would connect Canada’s oil sands to the Pacific Coast, allowing greater volumes of oil to be shipped to Asia, but it, too, is still on the drawing board.

Both are good examples of how pipelines – considered the safest way to move oil and gas – have become politicized and scrutinized, and not without reason. Despite their reliability, pipelines still lead to an unacceptable rate of safety mishaps. They corrode and rupture, which threatens workers and nearby communities. In 2013 alone, over 119,000 barrels of oil were spilled in 623 incidents.

America’s existing pipelines are getting older and more prone to corrosion, and over the next five to 10 years, there will be a significant increase in the number of new pipelines.

And that is creating a huge opportunity for better pipeline safety technology.

Monitoring and detecting corrosion in pipelines is still a crude affair (no pun intended). Pipeline companies tend to underspend on safety, concerned only with meeting the minimum regulatory requirements.

One of the major ways pipeline operators detect corrosion is with a “pig,” a machine that travels down the inside of a pipeline looking for problems.

Pigs are not new -- the industry has long relied heavily on them—and the newest generation of pigs, known as “smart pigs,” is considered an improvement over the pigs of yesterday. Smart pigs give a read on the state of the pipeline, such as cracks, corrosion, and metal loss. Operators receive this information in a control room and can then dispatch crews to fix the problem. As of 2012, 93 percent of pipeline inspections were conducted using smart pigs.

But smart pigs might not be enough. Enbridge (NYSE: ENB), a major Canadian pipeline company, has spent over $4.4 billion to upgrade pipeline safety. It is spending big bucks after one of its pipelines spilled oil into the Kalamazoo River in 2010 – a corrosion breach that Enbridge’s smart pigs failed to detect ahead of time.

And that’s the problem: despite recent advances, smart pigs aren’t terribly accurate. They also require pipeline operations to shut down (you can’t pump oil through a pipeline if there is a machine in the way), and analyzing the data smart pigs gather can take some time. The Wall Street Journal ran an article last year that talked about the pitfalls of smart pigs, even as pipeline companies continue to depend heavily on them.

So alternative methods to detect trouble spots are needed. One method for detecting corrosion uses a device from outside the pipeline. A series of sensors placed on the outside of the pipeline can search for corrosion without interfering in operations.

Pipeline safety company Fox-Tek, a subsidiary of Augusta Industries (CVE: AAO), uses such a system to detect corrosion, as well as a fiber optic system to detect bends, strains and stress in pipelines.

But the real innovation in Fox-Tek’s system is its data analytics package. Companies that use smart pigs usually need to spend months doing post-inspection analysis, but Fox-Tek has developed proprietary software that does continuous and automatic analysis.

Fox-Tek’s sensors gather information and automatically send back confidential reports on everything the company needs to know – temperature, pressure, strain, rates of corrosion, etc. in the form of handy graphs, charts and diagrams. It eliminates the need for an army of people to go out and inspect pipelines and then come back to do the analysis.

The pipeline safety market is massive and growing, but one of the major hurdles for new technologies like advanced sensors and software will be reluctance by pipeline companies to proactively invest in corrosion management and maintenance. In the past, they have largely focused on the bare minimum and viewed safety as a regulatory requirement.

However, there seems to be a sea change in the pipeline industry, particularly since operators are running into an environmental backlash. The blocking of several high-profile pipelines may have finally gotten the attention of the industry. Bringing local communities onboard and acquiring permits from regulators will require pipeline operators to demonstrate improved safety throughout their networks.

But above all, pipeline companies will see dollars saved by using cost-effective monitoring systems to reduce pipeline leaks. Enbridge has been forced to spend around $1 billion to clean up its mess in the Kalamazoo River, which was the result of a corrosion breach. It could spend a fraction of that to have better information on pipeline corrosion to prevent a growing problem from getting worse. That could reduce the frequency of future pipeline spills.

This could be a game changer in terms of how oil and gas pipelines are viewed in North America. If operators use smart software to catch small problems before they can turn into big ones, the common view of pipelines as accidents waiting to happen could be erased. Instead of seeing them as an environmental risk, the public may grow to see them as just another piece of modern infrastructure that facilitates commerce.

28 Aug 17:56

Death Valley's sailing stones mystery solved

A team of researchers has finally managed to explain how such large boulders can move all by themselves. The phenomenon, which was discovered in the 1...
28 Aug 13:14

Quotation of the Day…

by Don Boudreaux
(Don Boudreaux)

is from Roger Meiners’s October 2012 review of Pierre Desrochers and Hiroko Shimizu’s 2012 book, The Locovore’s Dilemma:

Locavore restaurants are sprinkled around the country.  Adherents worry about how far it is to go to get acceptable food; is 100 miles fair?  This hobby may voluntarily generate a bit of income for high-cost banana growers in Montana rather than greedy low-cost Guatemalan banana farmers, but what does it do for food efficiency and the environment as a whole?

The agricultural market is already shot through with subsidies, such as the one for uncompetitive American sugar growers in a few states who make campaign contributions in each and every election.  Don’t be surprised if locavores manage to get in on the act, tying together misguided economic and environmental beliefs that Desrochers and Shimizu dissect in scholarly, but readable fashion.