Friday, September 30, 2011

On counterproductive laws

I came across this post last week on the Marginal Revolution blog, and I was completely intrigued. It has to do with highway speed limits, and the tension between what's best for safety and road design and what's best for police department coffers. In blogger Alex Tabarrok's words,
The 55 mph speed limit was a vain attempt by the Federal government to reduce gasoline consumption; initially passed in the 1974 Emergency Highway Energy Conservation Act the law was relaxed in 1987 and finally repealed in 1995 allowing states to choose their speed limits. Highways and cars are safer today than in the 1970s and on many highways speed limits were increased to 65 mph. Higher speed limits are often safer because what is worse than speed is variable speed, some people driving fast and some driving slow. When the speed limit is set too low you get lots of people who safely break the law and a few law-abiders who make the roads more dangerous.
That's a fair point by Tabarrok, and it's got empirical evidence to support it. Unfortunately, cash-strapped police departments typically don't like higher speed limits, because they often depend on ticket-writing to fund their operations. Tabarrok cites a specific example on Massachusetts' Route 3, a road I've driven on frequently (emphasis mine).
The speed limit on Route 3 is 55. The speed limit used to be 60... It was reduced by executive order in 1973 to comply with the national speed limit. When the national speed limit was repealed in 1995 the highway commissioner ordered the low limit retained because he was afraid the state would be sued or otherwise embarrassed...
It gets better. Route 3 was completely rebuilt a decade ago. The design speed for the project was 110 km/h (68 mph). The design speed is like a warranty: nothing in the road design requires a driver to go slower than 68 mph, not even on a wet road at night (the design conditions).
The average speed is not far from the design speed. The 85th percentile speed, which is supposed to be used for setting speed limits, is around 75 mph. A little over by my measurement, which found 1% compliance with the speed limit.
Eventually the absurdity of the 55 mph speed limit sunk in and in 2006 MassHighway traffic engineers recommended a speed limit increase. State Police vetoed the change, preferring the 99% violation rate that let them write tickets at will. Police have no legal role in setting speed limits. Somebody in the Romney administration weighed the risk of losing ticket revenue against the risk of being blamed for accidents. Police won.
After engineers lost that fight people began to worry about the high accident rate on Route 3. The state hired a consultant to do a Road Safety Audit. The consultant’s report blamed the low speed limit, among other factors, for the high crash rate. The report explicitly recommended raising the speed limit.
Three years later, state officials have not followed the advice of their engineers, their consultant, or 100,000 drivers per day. State police are still out there running speed traps and helping keep the road as dangerous and profitable as they can.
So when the state sign says obey the speed limit for safety, that is not just a lie but a malicious lie. It is a statement made with knowledge that it is false and with reckless disregard for the consequences after being warned of those consequences.
Yeah... that's not good. You'll often hear the line uttered that "speed kills", and to a point it's certainly true--excessive speed is absolutely not safe, under any circumstances. But it's also true that artificially low speed limits kill, whether or not anyone wants to officially admit it. There are many roads down here in rural Virginia where the speed limit is almost comically low, and the clear reason is to line the coffers of counties with otherwise very small tax bases. Safety is a secondary concern, and sometimes in fact a casualty of the low-speed-limit policy.

It's one thing to sell a policy (or a speed limit) based on "safety" when your real reasons lie elsewhere. It's quite another when that policy actually exacerbates the problem that it purports to solve. This is not government at its best...

[Marginal Revolution]
[National Motorists Association]

Clip of the Week

Alright. Yeah, I haven't been writing much this week, since I'm still trying to process exactly what happened on Wednesday night. But the good news is, there was a whole lot to choose from this week for Clip of the Week (unlike last week, which I tried to rectify).

I initially wanted to give Clip of the Week to this Mariano Rivera clip, where he shows how his first baseball glove was made out of a cardboard box. Despite his playing for the Yankees, I respect and admire Mariano. Like many other Dominican ballplayers, he came from almost literally nothing and therefore has a terrific attitude about the game. His utter lack of a sense of entitlement is refreshing, and it comes across in every interview that he conducts (like this one, which is a personal favorite). He truly seems to appreciate how lucky he is to get paid his huge salary to do what he does, and I wish there were more athletes like him. BUT... I'm still pissed at the Yankees for lying down against the Rays this week, and therefore there will be no celebration of Mariano in this space.

Other candidates included this compilation of bugs from the soon-to-be-released FIFA '12 soccer video game, this crazy soccer goal, this impressive Rube Goldberg machine car commercial (and this making-of video) that I somehow missed a couple years ago, and this singing routine by Family Guy creator Seth MacFarlane (he has a surprisingly impressive voice, and he's apparently a recording artist now... who knew?).

But the most mesmerizing clip I watched all week was definitely this dubstep dance performance, to go along with a remixed version of Foster the People's "Pumped Up Kicks". I can't move like that.

(h/t The Feed)

Thursday, September 29, 2011

Extraordinary picture

There's so much to take in here. So much awesomeness packed into such a small space. I'm like a kid in a candy store with this picture. Come, join me.

(h/t Michael)


Not only is this a hilarious little cartoon, it's also a pretty perfect summary of how I'm feeling this morning.

(h/t Barry Ritholtz)

Wednesday, September 28, 2011

I really hope this is a joke

It's too bad that Quote of the Week was yesterday, because this morning I stumbled across a doozy.
As a way to solve the national debt crisis, North Carolina Democratic Gov. Beverly Perdue recommends suspending congressional elections for the next couple of years.
“I think we ought to suspend, perhaps, elections for Congress for two years and just tell them we won’t hold it against them, whatever decisions they make, to just let them help this country recover,” Perdue said at a rotary club event in Cary, N.C., according to the Raleigh News & Observer. “I really hope that someone can agree with me on that.”
Perdue said she thinks that temporarily halting elections would allow members of Congress to focus on the economy. “You have to have more ability from Congress, I think, to work together and to get over the partisan bickering and focus on fixing things,” Perdue said.
Um... yikes. Perdue's supporters are of course scrambling to suggest that her comments were meant in jest, but that sure doesn't sound to me like a comment where there's much room for interpretation.

To be fair, I can (sort of) understand where she might be coming from here. Far too many of our elected officials are too worried about pandering to their party and their base that they forget to govern, forget to lead. But removing accountability from the equation entirely is absolutely no panacea for what ails us. The fact is, accountability is the only thing that ensures that our elected officials are looking out for the interests of the citizenry--many politicians ignore that fact, and find themselves in trouble because of it.

Perdue's suggestion, ultimately, is that politicians would do what was right for the country, if only those pesky voters would get out of the way. I think that's distasteful, and it's very close to the same kind of self-justifying behavior that bankers so often display--"yes, we got you into this mess, but we're the only ones who can save you from the mess that we created". Oooooookay.

We've got problems, and those problems need to be solved and solved quickly. It violates basic logic to think that removing accountability would lead to better results--when in history has that ever been the case?

[Daily Caller]

Tuesday, September 27, 2011

Just awesome

I love Calvin & Hobbes. Props to the Red Cowboy for an awesome find of a great C&H cartoon from back in the day.

Quote of the Week

I've been suspiciously silent here on the "Rogue Trader" issue that erupted at UBS two weeks ago, mostly because I've spent the majority of my time since then just rolling my eyes. My mom always warned me they'd get stuck like that if I didn't stop rolling them, and you know what? She may be right--I can't seem to make them un-roll.

At any rate, now that just about everyone else in the world has weighed in on this issue (including the Red Cowboy, who even assumed I'd be writing about this), I figure I might as well jump on the pile. Relegating this discussion into Quote of the Week territory seems like a reasonable choice, because it will prevent me from launching into a long-form tirade that would otherwise inevitably arise.

To summarize my own feelings on the matter, it's probably best to just rely on my knee-jerk response the morning that the news first broke. As I wrote to a friend,
I’m not convinced this UBS thing was really an “unauthorized trade” at all... My guess is it was either a) a completely authorized (wink-and-nod) trade that went bad on high leverage, and they left the trader out to dry when it got bad enough, or b) a kinda-sorta authorized trade that started to go bad, then engulfed risk managers etc. as the trade went further and further against them. It is basically impossible to hide losses of that amount without at least 2 or 3 guys being involved in the hiding.
Banks are PR masters, and they probably assume that it’s easier to tell someone “oh crap, we had a rogue trader, we’ll overhaul our risk management procedures that none of you can actually see operating anyway, this’ll all be fixed” than to tell them “yeah, there are serious structural flaws in the way we go about trading and assessing risk, and this sort of thing is likely to happen fairly frequently in turbulent times”. So they took a shot. Maybe people will buy it, maybe they won’t, but it’s worth a shot.
That about sums it up from my point of view. Banks regularly hire these types of "loose cannon" traders, and they knowingly allow their risk management protocol to be violated on a regular basis. When they make big gains, they reward their traders with huge bonuses, and when the trades go bad, they try to make the trader fall on his sword. It's just another version of the "privatized gain, socialized loss" dynamic that seems to be dominating matters here in the U.S. in recent years.

Banks always want full credit for their profits, but attempt to abdicate responsibility for any losses or sub-optimal outcomes. Unfortunately, that's not how it works--or, at least, that's not how it's supposed to work. But that doesn't stop them from trying. Hey wait a minute, didn't I say I wasn't going to erupt into a long-form tirade? My bad.

With apologies to Barry Ritholtz (who wrote the single best piece I've read on the topic--if you read nothing else, read this) and Matt Stoller, this week's Quote of the Week goes to Matt Taibbi, who's made a name for himself as the go-to guy when banks blow themselves up.


"In the financial press you're called a "rogue trader" if you're some overperspired 28 year-old newbie who bypasses internal audits and quality control to make a disastrous trade that could sink the company. But if you're a well-groomed 60 year-old CEO who uses his authority to ignore quality control and internal audits in order to make disastrous trades that could sink the company, you get a bailout, a bonus, and heroic treatment in an Andrew Ross Sorkin book."
                  - Matt Taibbi, Rolling Stone

Well said as always, Matt. For what it's worth, UBS didn't escape culpability by trying to isolate this problem to a single trader. Their CEO was ousted and the bank's stock has been under extreme pressure. Will that stop other banks from trying the same trick? I sure doubt it.

[Rolling Stone]

Monday, September 26, 2011

Great concept from Japan

Is there anything smart phones can't do? In Japan, they're revolutionizing the alarm clock.
OKITE is a Japanese alarm clock app. It's designed to help users wake up, but with a twist: it sends embarrassing messages to the user's Twitter account every time they hit snooze. 
Tofugu, a blog covering Japanese culture, points out that this type of public shaming is uniquely punishing in Japan:
The interesting cultural thing about this app is the whole public shaming thing. In America when you do something shameful it’s all about the person doing the shameful thing. “What’s wrong with you?” “Why would you do that?” etc. In Japan, it’s kind of the opposite. When someone does something shameful, it’s always “What will the neighbors think?” and “What will your classmates think?” Public shame is the most terrifying motivator of all in Japan, and this app plays right in to that.
The app sends out a wide variety of Tweets, some silly and some downright odd.
"From today on I'm going to head to work via unicycle."
"I want to buy a fast red Ferrari and a horse!"
"Just as I thought, I want to become a stewardess."
Those Tweets are gonna need some work if this app is going to fly in the U.S., where the bar for embarrassing oneself seems to be set significantly higher, but that's not the point. I love the concept, and I'd totally use this app if there was an English-language version (and if I actually used Twitter). I'm sure there will be one soon.


Friday, September 23, 2011

Clip of the Week, revisited (plus, a bonus rant)

Alright, this week I've been bested. While I was busy scraping the bottom of the internet barrel for this week's Clip of the Week, the Red Cowboy over there was killing it with an amazing Lewis Black rant from The Daily Show. Yeah, I said that Jon Stewart/Stephen Colbert clips made for "lazy" Clip of the Week fodder, but this is only technically a Jon Stewart clip. Really, it's Lewis Black doing what he does best--ranting. And that's something I can always get behind.

Good stuff.

(If you don't want to read my long-winded, super bitter, Lewis Black-inspired rant, you can stop reading now. Otherwise, come along for the ride...)

As the nurturing husband to a pregnant wife, I'm particularly aware of the absolutely amazingly awful "science" that ill-meaning quacks like Dr. Oz distort, overreport, and abuse for profit. Pregnant women (generally speaking) are hormonally unequipped to properly deal with the fear-mongering that these clowns spew out on a regular basis, and this changes only slightly when those same women become mothers of small children. It's the absolute lowest form of dirty business, and these "scientists" should be ashamed of themselves.

Time after time, I've been confronted with flawed scientific "studies" that either dramatically exaggerate a risk or, in some cases, completely fabricate one. If you boil down soy sauce into a concentrated syrup, then inject it into a pregnant mouse's heart in a massive dose, you shouldn't be surprised when you find out that hey, holy shit, that pregnant mouse's kid is seriously messed up--and you definitely shouldn't tell pregnant women to avoid soy sauce due to your "study results".

But that's essentially what a lot of these "scientists" are doing, and that's just disgusting. When their messages then get skewed and misreported by media outlets, these things of course often take on a life of their own. It's a dynamic that I'm harping on all the time here on the blog, and lately the effects of this bad journalism have become much more personal.

My recently deceased grandfather always used to tell me, "everything in moderation, pal"--for him, it was the highest form of sage advice. Well, Grandpa didn't always follow his own advice--he smoked for many years, he ate a high-fat, high-cholesterol diet, and he was overweight--but he did live to be 88, despite doing battle with several of the top-10 killers of man (including cancer, strokes, and emphysema). And these days, I'm increasingly convinced that there's a lot more wisdom coming from old Boston police officers like him than from scummy yet heavily-credentialed assholes like Dr. Oz.

Sorry--I had to get that off my chest. Thanks, Lewis Black, for the inspiration.

Bobby Bonilla, interest rate trader

Last night, in a particularly bitter rant over the Red Sox' pathetic September performance, I may or may not have mentioned to my wife that I'd rather pay John Lackey to pitch for the Yankees this weekend than see him toe the rubber for my team ever again. She, a Yankee fan (yeah, this is the time of the year where we tend to have a little... friction), replied that it would be fine, so long as we'd take A.J. Burnett--who has an identically awful contract--in return.

It was a fun little conversation about mediocre pitchers and the massive contracts they nevertheless command, but it brought to mind what has come to be known as one of the worst contract negotiations in history--the Bobby Bonilla buyout by the Mets.

For those who are unfamiliar, Bobby Bonilla was once a very talented outfielder. As a Pittsburgh Pirate, Bonilla teamed with Andy Van Slyke and pre-steroid Barry Bonds to form one of the game's best outfields, leading the Pirates to consecutive division titles in 1990 and 1991 (yeah, it was a long time ago). Bonilla was a big part of the team's success--he was an All-Star every year from 1988 to 1991, and he finished in the top 3 of MVP voting in both 1990 and 1991 (2nd in 1990 behind Bonds, 3rd in 1991 behind Bonds and Terry Pendleton).

After his second MVP-caliber season, the Mets rewarded him with an enormous (by 1991 standards) free agent contract, luring him away from the Pirates with a 5-year, $29 million deal. It didn't work out. His performance was adequate (though not meeting his previous level), and he even earned two All-Star nods during the first four years of the contract. But Bonilla wilted under the New York lights, clashing constantly with reporters and ultimately "earning" a trade to Baltimore in 1995.

That could have (and should have) been the end of it, but of course that's not the Mets way. After his original Mets contract expired in 1996, Bonilla signed a four-year, $23.3 million contract with the Florida Marlins, and he immediately helped lead them to the 1997 World Series title. When the Marlins dismantled their roster in 1998, Bonilla landed in Los Angeles, and for reasons still unknown (maybe trying to atone for past sins), the Mets decided to re-acquire Bonilla via trade in 1999. Again, shockingly, it didn't work out.

With his relationship with his teammates, manager, and the media rapidly deteriorating, Bonilla and the Mets mutually agreed to a buyout of the final year of his Marlins contract, worth $5.9 million. Therein lies the problem.

The Mets at the time were a bit cash-poor (some things never change), and they decided that they didn't have the cash to both pay Bonilla and sign free agents to build their team for 2000. So they deferred Bonilla's compensation, arranging to not have to pay Bonilla a dime until 2011. Initially, this arrangement worked out--the Bonilla-free Mets made it to the World Series in 2000, and Bonilla would retire after two mediocre seasons in Atlanta and St. Louis.

But there's a bit of a problem here--interest rates. When the Mets deferred Bonilla's $5.9 million contract, the parties agreed to an interest rate of 8% (go ahead, try getting that rate today--no, not from Greece, that's cheating), with annual payments of $1.19 million a year for 25 years, beginning in 2011 (yes, the math works out--compounding is a powerful tool, which is why Bonilla will collect nearly $30 million in present-day money instead of $5.9 million in 1999 money).

Clearly, Bonilla got the better end of this deal, essentially lending money at a fixed 8% rate in a steadily declining interest rate environment. Had Bonilla instead taken the $5.9 million at the time and invested it in the stock market... yeah, he wouldn't be happy.

To be fair to the Mets, at the time, 8% was a completely fair interest rate at which to effectively "borrow" money from Bonilla. In January of 2000, a 30-year fixed rate mortgage would have run about 8.3%, and the average rate throughout the year 2000 was about 8.05%. Furthermore, recent history suggested that long-term rates were more likely to go higher rather than lower--rates had exceeded 10% throughout the entire decade of the 1980s, and they were nearing multi-decade lows (thanks, Alan Greenspan).

Whether or not the Mets were making a bet on rising interest rates (it's possible, but we'll never know), they certainly wouldn't have been alone in their analysis. Institutions like the Port Authority of New York/New Jersey have lost millions of dollars after entering into swaps that would protect them from rising rates, and it would have been difficult for anyone--let alone a baseball franchise--to predict the low-interest rate environment that we've experienced over the past decade.

But that won't keep people from laughing at the Mets, and wondering whether Bobby Bonilla (or his agent) was the greatest interest rate trader of all time. Either way, because of their poor interest rate bet, the Mets this year began paying Bonilla more than several of their current (contributing) players currently earn.

Bonilla, for his part, seems humble--as he told the Wall Street Journal, "hey, a blind squirrel can find an acorn". Indeed. Especially when that blind squirrel plays for the Mets.

Clip of the Week

With yesterday turning into a(nother) turbulent day for the markets, I elected to give myself a(nother) "useful holiday" from the blog. So for those of you who were counting on Clip of the Week to brighten up your Thursday, I send my deepest apologies.

Unfortunately, this wasn't exactly the strongest week for internet clips, so I don't have much to show. Yeah, I could always go back to Comedy Central for a Jon Stewart or Stephen Colbert clip, but that's just lazy. So, I guess this clip is mildly amusing, but... meh. There's also this somewhat mesmerizing clip, but again... meh. This guy does a pretty impressive Freddie Mercury impression (actually incredibly impressive, he should be a lock to win this), but... yeah.

Clearly, I'm grasping at straws here. So rather than caving in and show you all the mariachi-loving beluga whale again (you know he's coming back some time, it's just not today), I'll just admit that this isn't my best effort, and show you this juggling lady. Hey, it's at least impressive. Maybe next time she can tidy up her room a little bit before turning on the camera.

Wednesday, September 21, 2011

Useful holidays

Thanks to the awesome "MLB At Bat" mobile app, I'm able to indulge my baseball fan-ness daily by listening to or watching any MLB game I want live on my phone. It's a pretty useful tool to have, and given that I'm an out-of-market fan, it's essential in order to follow every moment of my hometown team's epic collapse.

It's also a wildly entertaining exercise to listen to all of the radio broadcasts from around the country, with each station boasting its own unique set of awesome low-budget local commercials. It's great fun to listen to the old ads I remember from growing up in the Boston area (Cumberland Farms, Giant Glass, Bernie & Phyl's, all the usual suspects), but it's even more entertaining to laugh at some of the more tragic commercials from some of the relative backwaters that have MLB teams (I'm a huge fan of Tampa Bay and Kansas City in particular... great stuff down there).

Since it's September and a pennant race, I've been listening to these out-of-market broadcasts even more than usual lately. On one such occasion, I heard an ad on Seattle radio for a financial planning company that caught my interest. Jokingly, the voice-over guy rhetorically asked why we don't have a national "retirement planning" holiday, so that everyone could take a day to consider whether or not they were well-prepared for their retirement years. Since we don't have those holidays, of course, we need this guy's company, so that they can show you the way.

As radio commercials go, this one was pretty much standard fare, and yet it got me thinking. Why don't we have national holidays for useful purposes? We've got all manner of different federal holidays, many of which are seemingly arbitrary in nature (I'm a particular fan of Columbus Day for its arbitrariness, but that's a rant for a different day). And yet, when it comes to certain holidays that would actually be useful and serve a societal purpose besides a scheduled day off, we've basically got nothing.

There have been a lot of pleas in recent years to make Election Day an annual holiday, and I think there's definitely something to that argument (although lately the politics seem to be leaning in the opposite direction in that arena, which I think is a shame). On the other end of the spectrum, some people have begged for Post-Super Bowl Monday to be made a national holiday, using dramatically lower worker productivity as justification. (Of course, if we're just gonna reward people's laziness in advance by giving them holidays from work, we might as well just make every day a holiday, amirite??? See, it's funny because Americans are already lazy and... meh.)

Anyway, I think it's food for thought. Why are we so quick to declare national holidays to posthumously honor people's contributions, but so reluctant to declare national holidays that would actually benefit society or serve a broader purpose (or enable future contributions by current citizens)? Politics, probably. But for me, that's a hollow answer.

Tuesday, September 20, 2011

Quote of the Week

I really wanted to give Quote of the Week to this quote, regarding Greece and the difference between a "controlled default" and an "uncontrolled default". But then, this weekend, I was listening to "Wait, Wait, Don't Tell Me" on NPR, and I heard them do a bit about Vladimir Putin.

Why Putin? Because last week, The Atlantic posted an absolutely epic photo gallery of Putin's staged photo shoots over the past couple of years. (Putin drives a Formula One car! Putin goes on an archaeological dive! Putin stares down a leopard! Putin feeds a baby moose! Putin bends a frying pan with his bare hands!) These photo shoots stand in stark contrast to the photo shoots that our Presidents tend to have, but I digress.

The point is, the folks on NPR had a field day with this one, and I almost died laughing when host Peter Sagal dropped this gem.


"The Dos Equis guy may be the most interesting man in the world, but when Vladimir Putin drinks beer, he does it with that guy's mom." 
                            - NPR host Peter Sagal

Monday, September 19, 2011

Interesting employment graphic

This is basically just an interesting little "did you know?" graphic, courtesy of The Economist. In this case, I'll admit that I did not know exactly how large our DoD was. The USPS, incidentally, is the 2nd-largest employer of domestic civilians in the U.S., but its ~575k full-time employees don't hold a match to some of our country's multinational corporate giants.

Walmart vs. Chinese People's Liberation Army... who ya got?

Friday, September 16, 2011

Early Internet Nostalgia

Hat tip to Barry Ritholtz. These are awesome... it's throwback day here on the Crimson Cavalier. Yahoo is my favorite by far. Happy weekend, people.

Thursday, September 15, 2011

Clip of the Week

Well, last week we didn't have a whole lot of options for Clip of the Week, so I recycled an old NFL clip. This week was a different story.

First of all, we had a bunch of entertaining clips from random sources, like this one (good if you like cats), this one (good if you like monkeys), and this one (good if you like surfing and/or Kelly Slater). But it was in the world of sports that this week really delivered the goods.

If you hate soccer (or at least hate lame European soccer players who take dives all day long), you'll appreciate this clip. Hell, I like soccer and I even get a kick out of that one. There's also this clip of a guy making an insane catch of a foul ball at a Rangers game (yeah, I know, old guys shouldn't bring their gloves to the park, but whatever--great snag).

And while we're on the topic of great catches and baseball, there's no way I can overlook this clip of the Indians' Shelley Duncan making three consecutive amazing leaping catches--it's impressive to make three catches like that in one week, let alone three batters. The look on his face after the third one is priceless.

But last week I promised NFL highlights from Week 1, and I'm a man of my word. Besides, how can I overlook my hometown team pulling off the kind of play that only happens once or twice in a decade? That's right, I'm talking about Tom Brady, Wes Welker, and 99.5 yards of awesomeness. Go Pats.

More great NCAA-related journalism

There must be something in the water in NCAA Journalism Land, because suddenly there's a whole raft of well-reasoned and well-written treatises coming out as the 2011 season gets underway. It started with Spencer Hall from the EDSBS blog, with a great piece that I excerpted here, and now Pulitzer Prize-winning author Taylor Branch has chimed in with a long-form journalism piece for The Atlantic that is exceptionally well-crafted and incredibly damning, even if it sheds little new light on the topic.

Yes, Branch's piece is essentially an example of the very journalism that Hall railed against in his EDSBS piece ("We know this. This is not news. Please stop acting like it is. That's very ingenious that in the bombed-out church of football, you have figured out that there is no God, and someone is running out the door with the coffers."), but that doesn't make it any less a brilliant piece of writing. Read the Branch piece, then go back and read the Hall piece, and consider yourself fully versed on the world of collegiate athletics. What you choose to do from there is, of course, up to you--I just think it's valuable to be well-informed.

Yes, the Branch piece is long (if you don't like Grantland, you won't like this piece), but I insist that it's worth a read. At the very least, you can read the Deadspin Cliff Notes of it, if you're feeling lazy. But know that if you skip the real thing, you're missing out on gems like this (which, incidentally, is the article's lead):
“I'm not hiding,” Sonny Vaccaro told a closed hearing at the Willard Hotel in Washington, D.C., in 2001. “We want to put our materials on the bodies of your athletes, and the best way to do that is buy your school. Or buy your coach.”
Vaccaro’s audience, the members of the Knight Commission on Intercollegiate Athletics, bristled. These were eminent reformers—among them the president of the National Collegiate Athletic Association, two former heads of the U.S. Olympic Committee, and several university presidents and chancellors. The Knight Foundation, a nonprofit that takes an interest in college athletics as part of its concern with civic life, had tasked them with saving college sports from runaway commercialism as embodied by the likes of Vaccaro, who, since signing his pioneering shoe contract with Michael Jordan in 1984, had built sponsorship empires successively at Nike, Adidas, and Reebok. Not all the members could hide their scorn for the “sneaker pimp” of schoolyard hustle, who boasted of writing checks for millions to everybody in higher education.
“Why,” asked Bryce Jordan, the president emeritus of Penn State, “should a university be an advertising medium for your industry?”
Vaccaro did not blink. “They shouldn’t, sir,” he replied. “You sold your souls, and you’re going to continue selling them. You can be very moral and righteous in asking me that question, sir,” Vaccaro added with irrepressible good cheer, “but there’s not one of you in this room that’s going to turn down any of our money. You’re going to take it. I can only offer it.”
William Friday, a former president of North Carolina’s university system, still winces at the memory. “Boy, the silence that fell in that room,” he recalled recently. “I never will forget it.”
Yikes. That's one of the greatest takedowns in history, and it takes huge balls to look a group of powerful people in the eye and call them out like that. But then, it's easy to talk tough when you know you're right.

[The Atlantic]
(h/t Deadspin)

Wednesday, September 14, 2011

Entrepreneurship and the American Jobs Act

It's a really slow news day (meaning that nothing's gone ka-BOOM in Europe yet), so I thought I'd share what I think is one of the more interesting proposals within Obama's recently revealed jobs plan. Surprise! It involves entrepreneurship, which I'm always talking about here.

For what it's worth, in general I don't think the new jobs plan is a particularly good one--it seems to be mostly window-dressing to save Obama's job next year, and it does little to solve the significant structural problems in our current job market--but this specific recommendation seems to be a step in the right direction. (This guy takes a comically long time to get to the point, so skip down a bit if you're impatient like I am. Seriously, this guy is killing's like reading Dickens. Skip ahead.)
It’s no big secret that young Americans are hurting. Youth unemployment is double the national average, college debt loads and defaults are the highest in history, and only 25% of young people had traditional jobs lined up upon graduation this year.
Thankfully, alongside these chronic epidemics, another trend has emerged: the growth of entrepreneurship as a viable career path for young people.
However, the vast majority of recent college graduates and twenty-somethings face significant hurdles when it comes to starting a business, especially when it comes to obtaining startup capital. Mind you, I’m not talking about hundreds of thousands or millions of dollars — or in most cases even tens of thousands. It takes just the few thousand dollars to start the most basic service-based businesses. But banks require collateral and credit history, a rare combination for eager upstarts. Micro-loan programs (that work as intended) are few and far between. And, in many instances, “friends and family” have their own financial woes to deal with. Bottom line: None of these sources is a reliable or scalable solutions for the vast majority of young Americans looking to join the entrepreneurial ranks.
But it seems the president’s American Jobs Act may have just the solution young people need to transition from unemployed to self-employed...
The provision I’m talking about is reform to federal unemployment insurance. (Yes, I’m serious. Hold the skepticism, please.)
Traditionally, unemployment insurance has only been made available to unemployed individuals who were actively seeking a traditional job. These funds could only be accessed for personal use; all other uses — such as starting a business — were strictly prohibited, and only job seekers qualified for these funds. Individuals with a desire to seek self-employment opportunities were ineligible for any unemployment money.
Now, imagine if aspiring entrepreneurs — individuals whose main priority is to hire themselves, build revenues and hire others to grow — had access to this sort of guaranteed startup capital. Well, under the American Jobs Act, they will.
According to Obama’s plan, all 50 states would be able to establish Self-Employment Assistance (SEA) programs, enabling aspiring entrepreneurs to utilize unemployment insurance money to fund their businesses for up to 26 weeks —providing roughly $10,000 to $13,000 in assistance, or what I would refer to as “seed funding.” Not a bad deal when you consider that the cost of most startups, especially most service-based businesses and tech ventures, have relatively low startup and operating costs. In essence, the president’s plan will create a guaranteed source of startup capital for businesses without any of the traditional credit and collateral requirements as barriers — or the need to give away equity to investors. Someone pinch me...
SEA has a proven track record of success in states that are both red and blue. According to a Department of Labor study of state self-employment assistance programs, SEA participants were 19 times more likely than eligible non-participants to be self-employed. In a handful of states where SEA programs are active, such as Arizona and Maryland, hundreds of businesses and new jobs have been created as a result. In Oregon, nearly half of the successful SEA entrepreneurs have each created an average of 2.63 new jobs.
Though this program is geared toward people of all ages who wish to start their own businesses, I would argue that young people are the best suited to maximize its advantages. Members of older generations tend to have families and other financial obligations, making it more difficult for them to transition into the roles of entrepreneurs. Young people who have fewer commitments, and therefore more flexibility, can more easily adapt to less expensive lifestyles.
You guys still with me here? No, our guy put you to sleep? Okay, sorry about that. But I really am excited about the fact that the federal government finally seems to be appreciating the need for entrepreneurship and innovation to get us out of our now decade-long economic malaise.

Now if they could just double or triple the size of this program, and cut back on all of the thousands of programs that are basically just handouts to large corporations, that'd be great. Good talk.


Tuesday, September 13, 2011

Quote of the Week

Alright, reverse jinx time. You may all be aware that my Red Sox are currently intent on finishing the season in the same devastatingly pathetic way that they began it, coming uncomfortably close to giving away what seemed to be an assured berth in October's playoffs. I'm trying not to think about it, and so far Tom Brady's helping.

So since I don't know what else to do, I'll just try the reverse jinx here. Plus, it's a great Yogi Berra-esque line anyway, and I think it's a useful one to refer back to later.

This week's QUOTE OF THE WEEK 

“There’s nobody to blame but everybody.”
                                - Red Sox DH David Ortiz

Well said, Papi. Now please, win some games.  

(h/t Freakonomics)

21st Century Priorities

Oh, boy. Here's a fun study from the London Science Museum (I don't know exactly what their methodology was, so I don't know how much statistical validity to place on the results, but I digress) that speaks volumes about where we're placing our priorities these days.
If you had to start life all over again today, what would be the things you'd need the most?
A roof over your brains, surely. A bed, perhaps. Running water, too. How about a toilet that worked?
I ask this perhaps unnecessary question because of a survey conducted by London's Science Museum. Scientists always care about people, so they asked 3,000 of them what things in this fair world they couldn't live without.
Because people are insane optimists, the one thing that these respondents claimed they couldn't live without was sunshine.
Because people are merely insane, the fifth thing these respondents claimed they couldn't live without was Facebook.
You'll be wondering, through your self-aware haze, what other things were more important than Facebook.
Well, second came Internet connection, closely followed by clean drinking water. (Yes, I have that the right way 'round.) Fourth was a fridge. Yes, you might wonder where, say, shoes came. Twentieth. You might also consider how highly people ranked fresh vegetables. Sixteenth...
But it's ninth place that is, perhaps, most worthy of note. In that rather sad position sat a flushing toilet. This most certainly conjures a troubling view of humanity's future, as everyone socially networks amid a deadly stench.
Good times. Clearly this study reveals a whole host of oddities of the human mind--among others, we consider most dear those things that we've most recently been without--and while it's tempting to dismiss the whole thing with a "the whole world is screwed" head-smack (which I definitely considered), I think it's more meaningful to consider what it says about how we judge our priorities.

If we were to take away all plumbing from the city of London and plunge it back into medieval times with chamber pots and pattens (watch this video for some more fun history), and then conduct this study again, I think they'd have a decidedly different ranking of the importance of flushing toilets. But we're all so far removed from those days now that we don't fully appreciate what it was like before toilets--therefore, we take them for granted.

Of course, maybe this should be taken as a somewhat uplifting study--people value Facebook because they value relationships, and people, and being part of a community. That's a good thing, right? So then, why does it feel so wrong?


Monday, September 12, 2011

More on banks....

My prior post today referenced banks and their seeming arrogance in assuming that they're the only ones who can provide financing to small businesses and individuals. Maybe their arrogance stems simply from their ever-increasing size, which Barry Ritholtz was so kind to point out in this infographic originally posted by Mother Jones.

It shows an amazing accumulation of financial power in just the last 20 years, a consolidation that was completely unslowed (and in fact accelerated) by the financial crisis of 2007-08 and neverending cries of "Too Big To Fail".

Take that dynamic for what it's worth, but yes, we really do only have four American banks left of any real import. As Mother Jones points out, in 1990, the nation's 10 largest financial institutions held only 20% of our nation's total financial assets. They now hold 54%. The total number of banks has dropped precipitously in that period, from roughly 12,500 to fewer than 8,000. Too big to fail, indeed.

[Mother Jones]
(h/t Barry Ritholtz)

The Mini-Bond Revolution

I hope you all had yourselves a fun and relaxing weekend. I'm personally glad to have football back, and I'm looking forward to the Patriots-Dolphins MNF game tonight to distract me from what's going on with my baseball team lately.

But in a weekend that otherwise could have been dominated by football, the most entertaining bit of sports I watched this weekend was the 5th set of the Novak Djokovic-Roger Federer semifinal match at the U.S. Open on Saturday. It was a nice reminder for me that tennis, at its best, can be wildly entertaining to watch. No other sport pits two individuals against each other so directly, and the resulting dynamics (including those between the players and the fans) can be absolutely fascinating.

So with tennis fresh in my mind, I was drawn to this old article from the Wall Street Journal, which was referenced over at the Marginal Revolution blog. It's about Wimbledon, and a pretty creative business idea that they've come up with in response to increasingly skittish global debt markets.
In England, no ticket is hotter than the men's final at Wimbledon. Even a mediocre match is an occasion. And there is always the chance to witness history.
Think Federer vs. Nadal. Or, if you are old enough, McEnroe vs. Borg.
So how do you get in? Most seats go to members of the exclusive All England Lawn Tennis and Croquet Club, which hosts the event, to other associated tennis clubs and organizations or to winners of an annual public ballot.
But there is a backdoor onto Centre Court. About 2,500 seats are reserved for investors in the club's so-called debentures, or bonds.
The club has issued these since the 1920s to finance development. But instead of paying cash coupons, like regular bonds, Wimbledon debentures pay interest in something much more valuable: tickets.
Holders get one ticket for each day of the Wimbledon tournaments during the five-year life of the bond. And here is the kicker: If you don't feel like going on any given day, you can sell it—legally.
"They're the only tickets that are freely tradable on the open market," says All England Finance Director Richard Atkinson. "You are free to sell them to anyone you like."
Okay, so the bonds weren't exactly a response to the European debt crisis--Wimbledon's been doing them since the 1920s. But as Marginal Revolution points out, similar mini-bond programs have become something of a trend over in the U.K. in recent years, somewhat mirroring the explosion of microfinance loans in the previous decade.

Regardless of what government talking heads might like to tell you, we don't need the banks to lend to us in order for commerce to operate freely. They certainly make things easier, but when banks aren't lending (and they aren't, particularly not to small businesses, despite trillions in government bailouts and backing), people will find other ways to finance their operations. These sorts of mini-bonds are a perfect example, and they underscore the ceaselessly amazing adaptability and ingenuity of people in difficult (or changing) circumstances.

Banks, beware. You're not the only lender in town, as much as you might like us to believe that you are.

[Wall Street Journal]  
(h/t Marginal Revolution)

Friday, September 9, 2011

Well this is weird

There are certain stories that catch my attention as what I refer to as "time-capsule stories", tales that tell something about our modern society that previous generations just couldn't possibly have imagined. This New York Times article is one of those stories.
Cynthia Daily and her partner used a sperm donor to conceive a baby seven years ago, and they hoped that one day their son would get to know some of his half siblings — an extended family of sorts for modern times.
So Ms. Daily searched a Web-based registry for other children fathered by the same donor and helped to create an online group to track them. Over the years, she watched the number of children in her son’s group grow.
And grow.
Today there are 150 children, all conceived with sperm from one donor, in this group of half siblings, and more are on the way. “It’s wild when we see them all together — they all look alike,” said Ms. Daily, 48, a social worker in the Washington area who sometimes vacations with other families in her son’s group.
As more women choose to have babies on their own, and the number of children born through artificial insemination increases, outsize groups of donor siblings are starting to appear. While Ms. Daily’s group is among the largest, many others comprising 50 or more half siblings are cropping up on Web sites and in chat groups, where sperm donors are tagged with unique identifying numbers.
Of course, this story is far from just a cultural curiosity. This type of one-father, many-children dynamic could have serious broader implications.
Now, there is growing concern among parents, donors and medical experts about potential negative consequences of having so many children fathered by the same donors, including the possibility that genes for rare diseases could be spread more widely through the population. Some experts are even calling attention to the increased odds of accidental incest between half sisters and half brothers, who often live close to one another.
“My daughter knows her donor’s number for this very reason,” said the mother of a teenager conceived via sperm donation in California who asked that her name be withheld to protect her daughter’s privacy. “She’s been in school with numerous kids who were born through donors. She’s had crushes on boys who are donor children. It’s become part of sex education” for her.
Ah, yes, "accidental incest". What was once the domain of Shakespearean fantasy has now become a strange reality in a world that Shakespeare himself could never have imagined.

This of course casts doubt on whether sperm banks should be more closely regulated (probably, even though I generally despise business regulation), and more generally how we should determine who can and cannot be the recipient of donated sperm (you tell me). Clearly, it's not a good thing for 150 half-brothers and half-sisters to be unknowingly running around, all of them by definition sharing an age group and a general location. In this kind of world, "accidental incest" is more an inevitability than a vague possibility, and that alone should be enough to give us chills (it certainly freaks me out a little bit).

But these are the times we live in, for better or worse. Every new technology brings with it a world of opportunity, but also a whole host of unintended consequences. If we're not always looking out for those consequences, we could find ourselves in quite the odd little Shakespearean world. What an odd article.

[New York Times]

Thursday, September 8, 2011

Clip of the Week

Unfortunately, there's not much to work with this week as far as clips go. We had this little history-of-fashion video (includes only the last 100 years), which was at least sort of interesting to watch. And we had this lunatic going for a dive in a flying squirrel outfit and nearly killing himself (lucky or great planning? You decide)...

But besides that, there wasn't much. Hopefully that will change this week with the beginning of the NFL season (it kicks off tonight, with a matchup of the last two Super Bowl champs, the Saints and the Packers). So, in the spirit of football season, and in hoping that we'll have some good highlights to post up here next week, I'm giving Clip of the Week to a clip from last year's NFL Playoffs.

The Super Bowl was frankly pretty boring, so I'm just gonna go and give this honor to the Seattle Seahawks' Marshawn Lynch, who in last year's Wild Card round busted off one of the craziest runs I've ever seen. Get off me!

Welcome back, football.

Wednesday, September 7, 2011

Quote of the Week

Well, a busy day at work yesterday meant that my long weekend away from the blog was extended by a day, and for that I apologize. But in a sense it's a good thing, because it wasn't until this morning that I came across the perfect candidate for this week's Quote of the Week.

Thanks to Jon Stewart for inviting former Louisiana Governor Buddy Roemer onto his show to discuss his bid for the presidency (bet you didn't know he was running... imagine that). That gave Roemer the platform he needed to launch an epic anti-corporate rant that would make Matt Taibbi and Eric Schneiderman proud.

Of course, as Stewart pointed out, Roemer's view isn't likely to gain any real traction given the current state of affairs in American politics, but it's still nice to see somebody out there calling a spade a spade.


"You can't tackle the jobs problem, the budget problem, the tax problem, or America rising without tackling the first problem, money in politics... Corporations have never made more money than they are right now, they wrote the tax code, and they really don't give a damn about the rest of America."
                          - Republican Presidential candidate Buddy Roemer

(h/t Barry Ritholtz)

Friday, September 2, 2011

Excellent journalism

Since I'm always harping on bad journalism, I try my best to also salute good journalism when I see it. Enter Spencer Hall from the Every Day Should Be Saturday blog, with one of the most level-headed views on collegiate football that I've ever read.

I, like many others, spend a lot of time harping on what's wrong with college sports, which frankly isn't hard to notice. It's not exactly a well-kept secret that the NCAA is largely built on a lie of "amateurism", and Hall asks so what? Does it make watching college football any less enjoyable, or does it add anything valuable to the experience to recognize that it's at least in part a fraud? If anything, it cheapens it. But I'll step away here and leave the rest to Spencer. I'll excerpt it in part, but I highly suggest you take the time to read the whole thing. I found it to be somewhat uplifting in a strange, counter-intuitive way.
People like to say this is a fraud. They like to say it a lot. It's easy, because there is a fine, solid skein of truth to it. The world is filled with misdirected companies, banana stands that took a wrong turn, countries demarcated with borders drawn by tipsy colonials thousands of miles away. The entire state of Florida is a real estate scam no one ever bothered to stop. Georgia was and possibly still is a debtor's colony. The United States' largest and most populous state sits between wildfires and a fault line capable of cracking the state's inhabitable land into its own island in a matter of hours. Large tracts of the Western United States came from Mexico's attic. We hope they don't want it back any time soon.
There are people--con artists, visionaries, frauds, hucksters, geniuses, the mad, the clueless and monied--who leave in their wake elaborate, ambitious fakes. You call the aftermath "home," or your town, or your nation. A large chunk of your experience as a person involves elements created with the worst of intentions: fraud, the peculiar delusions of power, or desperate tax evasion writ large on the landscape in the form of homes, shops, and a long flight from the responsibilities of abandoned lives.
Sometimes they leave you with a state. Sometimes they leave you with a sport.
He continues:
There is no one in charge in college football. There likely never will be. One lie leading to another forms the bridge the present takes to the future, and your steps don't lie: it feels as solid as truth, and holds up for far longer in some cases.
The editing matters so much here. You can say the sport is rife with filth, and you would be right. The negligent policemen of the sport strike intermittently at thieves. One side makes up the law as they go while the other politiely ignores it. Bowl games grease the palms of venal public officials. Television networks buy off longtime allies and reconstruct the map as they fit, as drunken in their excesses as the mustachioed cartographers of any careless empire. Players steal what they can when they can. Coaches do the same, but to much greater effect.
We know this. This is not news. Please stop acting like it is. That's very ingenious that in the bombed-out church of football, you have figured out that there is no God, and someone is running out the door with the coffers. The only intrigue is in the variation, not in the repeated exaggerated reminders that this is a sport of charlatans, sweathouse labor conditions, and a thousand dodges behind the shield of amateurism.
It's somewhat strange to be (indirectly) called out in this manner, and yet by the end of Hall's article I'm left feeling oddly liberated. That's the true genius of Hall's piece--that it finds hope in desolation, and entertainment amid corruption.

Yes, college sports are largely built on fraud, and we all ultimately know this. We similarly all knew that Mark McGwire was on performance-enhancing drugs as he chased Roger Maris' record, but we really didn't care. It wasn't the point. In a world full of bad news, sports can always be an escape--we need them to be an escape. We don't want or celebrate anyone pulling back the curtain to show us that it, too, is a fraud. Most of us would rather go along enjoying the lie, and as a result we can either join the lie or just look elsewhere for our entertainment and escapes.

Excellent writing, Spencer. Go 'Hoos.

[Every Day Should Be Saturday]  
(h/t Deadspin)

Thursday, September 1, 2011

Clip of the Week

We had a few contenders for Clip of the Week this week, including yesterday's home price roller coaster, which I decided deserved its own post.

There was also some fantastic coverage of's "Fantasy 411" crew trying to comprehend last week's earthquake in real time. I can obviously easily laugh at the guys for their doltish reactions, but all I can really say is thank God nobody had a camera on me when the earthquake hit, because that would've been YouTube gold... humiliating, emasculating, Blair Witch-esque YouTube gold.

Moving along, this week I also got a kick out of this "animated sheet music" of an old Miles Davis hit, and this 3-D view of the "known universe", which is along the lines of this nerdy post from way back when.

But this week, I got the most amusement out of an old childhood throwback--it's an outtake reel from The Lion King (the original movie, not the Broadway show), and it's terrific. I will now try not to think about the fact that The Lion King came out almost 20 years ago, and exactly how old that makes me. If that doesn't make you feel old, then look at this. That oughta do the trick.

Either way, enjoy the blooper reel, old-timers.

Lion King 3D - 'Bloopers And Outtakes' by LusoTrailer