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November 30, 2006
The Committee on Capital Markets Regulation Report
As expected, the report of the Committee on Capital Market Regulation issued today is calling for represents arguably the most high-profile effort to date to present in the public forum the case that excessive business regulation -- much of it an overreaction to the corporate scandals of the post-stock market bubble period earlier this decade -- is stifling public securities markets and causing the U.S. markets to lose business to foreign competitors. A copy of the 148-page report can be downloaded here.
Most notably, as Larry Ribstein explains in more detail here, the report suggests that the premium for listing on both United States and a foreign market for foreign companies has dropped dramatically since 2002. Shares of a foreign company are generally worth more if they are listed both on U.S. markets as well as their home markets because -- at least in theory -- investors will pay more for the stock due to the additional confidence provided under the United States regulatory system. The report finds that the cross-listing premium has declined for companies also listed in countries with sophisticated markets and less onerous corporate governance controls, such as Hong Kong, Japan, and England, and that the premium has remained steady or increased only in regard to companies cross-listing from countries with questionable controls, such as Italy, Brazil and Turkey. Thus, the clear implication is that the U.S. is losing its previous competitive edge in securities markets to countries with sophisticated securities markets and less onerous corporate governance regulations.
The committee is directed by Harvard law professor Hal Scott and is co-chaired by former White House adviser Glenn Hubbard, now dean of Columbia University's business school, and John Thornton, former president at Goldman Sachs Group Inc. and now chairman of the Brookings Institution. Treasury Secretary Henry Paulson is expected to welcome the report as he is already publicly advocating many of its recommendations and recently called for a broad re-examination of business regulations and laws.
The report's theme is that a change in regulatory philosophy is necessary to preserve the viability of U.S. securities markets. The revised philosophy is one based more on general principles than rules, similar to England's Financial Services Authority, which uses principles-based regulation and oversees all British financial firms, in comparison with the U.S.'s web of federal and state banking and securities regulators. The report recommends generally that the SEC act more like federal banking regulators and concentrate more on the underlying soundness of the financial markets and less on individual acts of wrongdoing "with less publicity surrounding enforcement actions," a clear jab at the public relations campaigns that prosecutors have mounted over the past several years to demonize businesspersons.
The report makes 32 specific recommendations, six or which pertain to easing the application of Section 404 of the Sarbanes-Oxley Act governing internal company-financial controls that are absurdly expensive for most businesses to implement. Other recommendations call for setting a higher bar for regulators or private litigants to sue outside auditors, independent directors and company employees, and also recommends that Congress cap auditors' liabilities.
Posted by Tom at 4:50 AM | Comments (0) | TrackBack (1)
Hugo Chavez's odd charitable venture
This OpinionJournal editorial reviews the rather odd arrangement under which Houston-based energy company Citgo -- which is controlled by the Socialist Venezuelan government of Hugo Chavez -- supplies home heating oil to former Democratic Congressman Joseph P. Kennedy, II's Citizens Energy Corporation at a 40% discount. The nonprofit Citizens passes the savings onto the poor and contends that it helps 400,000 homes in 16 states that would otherwise have trouble heating their homes.
The OpinionJournal piece scours Kennedy for playing nice with Chavez, but the article fails to mention the oddest aspect of this supposed charitable venture. The poorest of the U.S. citizens who will receive the discounted price on the home heating fuel that Citgo sells to Citizens are far wealthier than the poor people of Venezuela, four out of 10 of whom survive on $2 a day or less. How does it make sense for Chavez and Kennedy to sell oil at a 40% discount to people in the U.S. who are far richer than Chavez's constituents in Venezuela? Sort of sounds like taking from the poor to give to the not-as-poor to me.
By the way, as noted in this earlier post, don't worry too much about Chavez cutting off Venezuelan energy supplies to the U.S. We'll be just fine without them.
Posted by Tom at 4:29 AM | Comments (0) | TrackBack (0)
It's Texas high school football playoff time
The Texas High School Football Playoffs are taking place all across Texas right now, and there is no better way to get a good dose of Texas culture than to take in a game or two.
The video below is an example of what can happen in the Texas high school playoffs as Plano East mounts a furious comeback from a 42-17 deficit with 2:42 left in a 1994 playoff game against John Tyler High School. It's an incredible video, spiced by the absolutely hilarious commentary from a couple of good ol' boy announcers. Make sure you watch the entire video, though, because there is a surprise ending.
By the way, the town of Refugio (see name on the jersey in the picture above) is pronounced "Ruh-fur-rio" in Texas.
Posted by Tom at 4:10 AM | Comments (3) | TrackBack (0)
November 29, 2006
Teasip Bingo!
Football during autumn is an indelible part of Texas culture, and the University of Texas Longhorns tend to dominate the state's college football scene, particularly coming off of a national championship season.
So, when the Texas Aggies rise up and achieve one of their relatively rare wins over the Horns, the Aggies really enjoy it. This year, the Aggies have developed the Teasip Bingo game below (pdf here) in which "each time a 'friend' throws out one of those ridiculous excuses for A&M's victory over UT in Austin, mark it off your list. Get the most marks and you can say Teasip Bingo!"
We play hard down there in Texas.
Posted by Tom at 4:43 AM | Comments (2) | TrackBack (0)
Epstein on the deferred adjudication racket
Richard Epstein of the University of Chicago and the Hoover Institution authors this WSJ ($) op-ed that takes up a common topic on this blog over the past couple of years (see also here) -- the improper use of deferred prosecution agreements by prosecutors to blackmail companies into agreeing to absurd fines and "corrective" measures to avoid a deabilitating indictment. Professor Epstein notes one particularly egregious such arrangement:
In one such notable agreement, the U.S. attorney for New Jersey, Christopher J. Christie, put the screws to Bristol-Myers Squibb, which got into hot water because of a potential securities violation for inflating its quarterly earnings by a business practice known as channel stuffing. BMS told its distributors that they had to take into inventory large amounts of BMS products immediately, with the understanding that down the road they could return the excess for a refund. The alleged securities violation arises from the overstated earnings quarterly reports, without indication of any expected future write-offs.The naïve reader might think that a DPA should prohibit the firm from engaging in future conduct of the sort that got it into hot water in the first place. But Mr. Christie had larger ambitions. The most striking evidence of the abuse of power is paragraph 20 of the agreement, which requires BMS to "endow a chair at Seton Hall University School of Law," Mr. Christie's alma mater, for teaching business ethics, a course that he himself could stand to take.
And Professor Epstein understands precisely what needs to be done to correct this prosecutorial misconduct:
[T]he Department of Justice should engage in unilateral disarmament by disavowing the odious Thompson memo, and rethinking why it ever needs to threaten the nuclear option of a corporate indictment. For its part, our new Congress should repeal by statute the doctrines of vicarious liability for criminal conduct in a corporate context -- because these give the government unwarranted and arbitrary power over corporations.At bottom, corporations are just individuals tied together by an elaborate network of contracts; and we don't need yet another sorry reminder of how mindless government policies harm the innocent shareholders whom they are supposed to protect. The government has a vital role in criminal enforcement. So let it go after real, i.e., human, criminals the old-fashioned way, by careful investigation and skilled prosecution.
Epstein makes his point without even mentioning the Enron Task Force's irresponsible destruction of wealth in connection with prosecuting Arthur Andersen out of business. As Geoffrey Manne asked awhile back -- Where's the outage?
Posted by Tom at 4:30 AM | Comments (0) | TrackBack (0)
NFL Network draws a big yawn
This earlier post noted that the dispute between the fledgling NFL Network and various cable companies has kept the network off of most the nation's homes that are wired for cable or satellite television.
Now, this NY Times article indicates that the inability to see the NFL Network's first game on Thanksgiving Day evening was met with a huge collective yawn by viewers.
As noted in the earlier post, the Los Angeles area gets along just fine without its own NFL team. This WSJ ($) article notes that that there is a buyer's market for advertising time to this year's Super Bowl. There is no need for regulatory action in regard to the NFL Network's petulant stance with the cable companies. Just let the markets give the NFL owners the message that there are other things to do on weekends and holidays than watch NFL games.
Posted by Tom at 4:08 AM | Comments (0) | TrackBack (0)
November 28, 2006
More Friedman anecdotes
The fine remembrances of the late Milton Friedman continue unabated.
In this post, Professor Friedman's son, David Friedman, explains how Time Magazine came to misquote Professor Friedman's comment that “We are all Keynesians now.”
Then, in this WSJ ($) letter to the editor, Professor Marina v.N. Whitman of the University of Michigan passes along a fun story about cocktail party chatter with Mr. Friedman:
Nearly 30 years ago, my husband and I were guests at a dinner party . . . Among the other guests were Milton Friedman and his wife, Rose. Milton was having a fine time baiting the wife of the dean of the Business School, a feminist whose conviction was unleavened by any sense of humor, by proclaiming the foolishness of affirmative action."If businesses are forced to hire and train young women, many of whom will leave for marriage and family," he proclaimed, "they should at least be allowed to discriminate in favor of homely women, whose opportunities for marriage are below average." As the dean's wife reddened with fury, I leaned over and said softly, "Thank you, Milton. I've always wondered what accounted for my professional success. Now I know." Milton, always the courtly gentleman where women were concerned, was speechless.
By the way, Professor Friedman's class television show -- Free to Choose -- can be viewed here.
Posted by Tom at 4:45 AM | Comments (0) | TrackBack (0)
Chizik leaves Austin for Ames
Let me see if I've got this straight.
Iowa State University has hired former University of Texas defensive coordinator, Gene Chizik, as its new head football coach to replace my old friend Dan McCarney, who resigned under pressure a couple of weeks ago despite being the most successful coach in Cyclone football history.
Chizik is essentially the same age as McCarney was when ISU hired him in 1995. Moreover, Chizik's background is basically the same as McCarney's was at the time that ISU hired him, except that McCarney had far superior experience to Chizik in the Midwestern recruiting areas that are key to the ISU program.
Chizik’s deal is worth a guaranteed $6.75 million over six years — with incentives that could increase that to as much as $10 million over those years — while McCarney's contract was worth about $4.4 million, but only $780,000 guaranteed, through 2010.
More notably, however, is that ISU is guaranteeing Chizik $1.5 million annual budget for compensating his assistant coaches, which is one of the highest of such budgets among Big 12 Conference members. On the other hand, McCarney constantly requested ISU throughout his 12-year tenure for a budget sufficient to pay for the best assistants available on the market, but he was continually rebuffed by ISU's athletic administration. As a result, McCarney's budget for paying his assistants was in the lower tier of such budgets among Big 12 Conference members.
My question is this — why didn't ISU simply increase McCarney's assistant coach compensation budget, and then avoid the extra money and risk involved in hiring Chizik? Maybe this all works out, but it sure looks to me as if ISU has taken a huge risk where a much smaller one would have been more likely to continue the most successful era in ISU football history.
By the way, UT's defense gave its two most uninspired defensive performances of Chizik's two seasons in Austin during losses to Kansas State and the Texas Aggies in its final two games of this season. Did Chizik's distraction with negotiating a deal with ISU have anything to do with that? Mark Wangrin of the San Antonio Express-News observes:
Chizik has been more careful in his choice of destinations. Now, though, with the shine off his reputation, he may not have much of a choice. He must decide whether to jump toward a more mediocre program or stay at least another year and try to rehabilitate his reputation as a defensive mind. He must prove this season hasn't exposed his thinking as only working when he has exceptional talent at safety. He must show he can adjust.
Posted by Tom at 4:34 AM | Comments (2) | TrackBack (0)
Bainbridge Cubed!
A month or so ago, Clear Thinkers favorite Stephen Bainbridge took some time off from blogging while revamping his blog site.
Now, he's back. And he's tripled!:
Professor Bainbridge's Business Associations BlogProfessor Bainbridge's Journal (Politics, Religion, Culture, Photography, and Dogs)
Posted by Tom at 4:16 AM | Comments (0) | TrackBack (0)
November 27, 2006
The UH Memorial Service for Ross M. Lence
In a fitting tribute on the final day of classes for the fall semester, the University of Houston will host a memorial service for its late and beloved Professor, Ross M. Lence, at 1:30 p.m., this Friday, December 1 in the AD Bruce Religion Center on the UH campus. Dr. Lence died this past July after a year-long battle with pancreatic cancer.
UH Honors College Dean Ted Estess and several of Ross' colleagues, former students and friends (including me) will give short remembrances of Ross during the service, which will also include music performed by Honors College students. A reception will follow the service at the Commons of the the Honors College, which is a short walk from the Religion Center. Later that day at 7 p.m., the University of Houston football team will play Southern Mississippi in the Conference USA Championship game at Robertson Stadium on the UH campus, a game that Dr. Lence would not have missed.
Ross Lence was one of the most gifted teachers of our time and a selfless mentor to hundreds of students and colleagues. If you were touched by Ross or simply want to pay tribute to a treasure of our community, then come by the service and reception on Friday afternoon. You will be inspired.
Posted by Tom at 4:45 AM | Comments (0) | TrackBack (0)
Houston's Mr. Fix-It returns to Washington
This NY Sunday Times article reviews Former White House Chief of Staff, Secretary of State and Secretary of Treasury James Baker, III co-chairmanship of the Iraq Study Group, which is currently scheduled to deliver its report to the President by mid-December. Mr. Baker, who spends most of his time these days at the Baker Institute at Houston's Rice University, is described in the article as wanting the chairmanship of the Iraq Group to be the template for his role as an elder statesman in the coming years:
Now, at 76, Mr. Baker is in high diplomat mode, on a mission, friends and supporters say, to aid his country and his president — and, while he is at it, seal his legacy in the realm of statesmen, a sphere he cares about far more than politics.“I think he’d like to be remembered as a 21st-century Disraeli,” said Leon Panetta, a Democratic member of the group, referring to the 19th-century British statesman and prime minister. “I think deep down he is someone who believes that his diplomatic career, in many ways, helped change the world.”
Read the entire article.
Posted by Tom at 4:26 AM | Comments (0) | TrackBack (0)
2006 Weekly local football review
Texas Aggies 12 Texas Longhorns 7
In the signature moment of Dennis Franchione's mostly rocky tenure at A&M, the Aggies (9-3, 5-3) rode a magnificent defensive performance and an already legendary 16-play, almost 9 minute, 88-yard fourth quarter TD drive to hand the Longhorns (9-3, 6-2) a BCS bowl-bashing loss. The Aggies surprisingly battered the Horns nation-leading run defense with almost 250 yards rushing, while the Aggie defense gave up only about 160 yards after the Horns came up empty on their initial 75 yard drive to open the game. Horns QB Colt McCoy did not look sharp coming off his injury in the Horns' previous loss to KSU, and Horns coach Mack Brown's decision to go with McCoy in the game re-triggered discussion of Brown's often dubious QB decisions during the pre-Vince Young era. Both the Ags and the Horns will be going to top-flight bowl games, but it won't be determined which ones until after the Oklahoma-Nebraska Big 12 championship game next week.
Placing an exclamation point on the one of the best stories of the college football season, the Owls (7-5,6-2) pulled out another come-from-behind win to qualify for a post-season bowl game for the first time since the 1961 season. The win was particularly impressive given that the Owls played without star QB Chase Clement, who sat out the game (except for one pass) with an injury. The win also prompted the Chronicle to notice the Owls by finally giving them a headline and a couple of well-deserved front page stories. Heck, the Chronicle even ran a story on another remarkable story that it has ignored for most of the season, Houston RB/WR Anthony Alridge. Better late than never, I guess. The Owls now wait a week or so for their bowl assignment, which quite likely will be in Ft. Worth.
In a game that was unwatchable, the Texans (3-8) rode the incessant mediocrity of QB David Carr to yet another loss in the weak portion of their schedule. As usual, Carr -- who appears to be a very nice young man with almost no leadership skills whatsoever -- was 39 for 54 for 321 yards with a late TD, one interception, and four sacks, but that included a 19-of-24 performance for 162 yards in the final 8 minutes when the game was largely out of reach. That works out to around a 4.63 yards per pass (YPA), which is horrible and not close to a rate that is required to win consistently in the NFL. In this Weekend Journal article from over the weekend, Allen St. John explores YPA, a simple statistic that is a far better measure of a QB's true effectiveness than the NFL's arcane and misleading QB rating. Carr's YPA is pedestrian this season, as it has been for his entire career. Even more revealing, though, is that Carr's offensive teammates simply do not respond positively to Carr. It's time for the Texans to make the change at QB and let Carr attempt to create a productive NFL career for himself elsewhere. It is not going to happen here. The Texans go to Oakland next week to play the equally hapless Raiders (2-9) before returning home the following week to play Vince Young Bowl II against the Titans (4-7).
Posted by Tom at 4:06 AM | Comments (5) | TrackBack (0)
November 26, 2006
Does anyone have a radio?
Unless you are among the very small percentage of citizens who thinks that there are not enough National Football League games on television already, you may not have noticed that the NFL owners have started their own network to televise certain NFL games. And as if on cue, a dispute has arisen between two particularly distasteful business interests -- the NFL owners and some of the country's biggest television cable companies. The two sides are effectively playing a high-stakes game of chicken over whether the NFL Network is going to be available to a large part of the country.
The NFL reportedly left about a half-billion on the bargaining table in its last round of television-rights negotiations to reserve for the NFL Network eight late-season prime-time games featuring attractive teams with wide followings. The first took place on Thanksgiving night between the Kansas City Chiefs and the Denver Broncos, but it was available in less than half of the 90 million or so homes wired for cable or satellite.
Indeed, in an absolutely appropriate bit of fate, ailing Chiefs owner Lamar Hunt -- who has lobbied his fellow NFL owners for 37 years to put a Thanksgiving Day game in Kansas City -- had to listen to his Chiefs beat Denver on this past Thanksgiving Day night over the phone in his hospital bed. As with most NFL fans, Hunt was unable to view the game because the hospital he had been admitted to is not hooked into the NFL Network. So, his daughter held the phone near her television while he listened on the other end.
Cable operators such as Cablevision Systems Corp. and Time Warner Inc. are balking at carrying the network because the league wants to boost what it charges them each month to carry the network to a reported 70 cents per subscriber. The NFL currently charges those companies a the fee of about 20 cents per subsciber to carry its non-NFL Network games. Moreover, NFL owners are not only insisting on a high price for the NFL Network, but they are also pushing to have the network included as a part of each company's standard cable package, which doesn't charge subscribers premium fees to get the network. Cable companies are contending that customers who do not watch the NFL should not be required to foot the bill to indulge those who want those games.
The NFL owners are banking on cable company customers pitching such a fit that there companies will give in to the NFL owners' demands. On the other hand, some publicity-seeking politicians are already using the spat as a reason to attempt to extend the government's regulatory power over the "key" issue of whether a few NFL games will be televised. From my viewpoint, I hope the cable companies hold firm, the NFL owners put even more games on their little network and that market forces inform NFL owners what millions in the Los Angeles area have already discovered with regard to live NFL games -- that life without the NFL is not all that bad.
Posted by Tom at 7:36 AM | Comments (1) | TrackBack (0)
November 25, 2006
The Lee and Williams deals
The Stros jumped into the super-charged 2006 free agent market in a big way yesterday by signing former Brewers slugger Carlos Lee and, in a lesser deal, former Padres starter Woody Williams. Although there is always a certain amount of giddiness whenever the hometown club opens up the bank vault to attract a couple of star players who might propel the Stros back into the playoffs, the stark reality is that these two deals are highly risky and do little to solve the Stros' main problem.
The Lee contract is the bigger of the two deals by far, $100 million spread over 6 seasons with a no-trade clause for the first four, which makes Lee the highest-paid Stro player this side of Roger Clemens. Lee is a 30 year old, 6'2", 235 lbs Panamanian leftfielder who reached the majors in the White Sox organization at the age of 23 and basically showed little potential during his first three seasons. He had his first good season with Sox in 2002 as a 26 year old, hitting 17 RCAA/.359 OBA/.484 SLG/.843 OPS. After falling off some in 2003, Lee had his best season in the majors in 2004 when he hit 26/.366/.525/.891, including 31 taters. After falling off a bit again in 2005 when he was traded to the Brewers, Lee had another solid season in 2006 with the Brewers and the Rangers, hitting 24/.355/.540/.895, including 37 yaks. His career statistics over eight seasons are 78/.340/.495/.835 with 221 homers, although it should be noted that he has been substantially more productive during his past four seasons than he was in his first three.
Thus, although he becomes the highest-paid Stros hitter, Lee has been nowhere near as productive a hitter over his career as Stros 1B Lance Berkman (353/.420/.621/1.041). Perhaps Lee is a late-bloomer and will continue his productivity surge of the past four seasons over the next six seasons. However, Lee doesn't walk much, so there is a higher than normal risk that his on-base average will decline as he gets older, and he is neither fast nor a good fielder. Accordingly, the Stros bought high and long on a hitter who has been roughly 20% as productive as Berkman during his career to date. Maybe it works out, but nobody should be deluding themselves that the Stros got a steal.
The two-year, $12.5 million Williams deal is not as risky as the Lee deal, although any type of deal on a 40 year-old pitcher not named Clemens has to be viewed with at least one raised eyebrow. The good news is that Williams has been a consistently productive pitcher over his 14 year career, rarely magnificent but just as rarely bad. He has had only one really good season, from midway thought the 2001 season through midway through the 2002 season when he pitcher 32 RSAA/2.40 ERA, but he was shelved midway through the 2002 season with arm trouble. On the other hand, his only really bad season was in 2004 with the Padres (-19 RSAA/4.85 ERA), but he bounced back last season to post a respectable 9 RSAA/3.65 ERA, which was about the the same as Andy Pettitte posted last season with the Stros. Williams' career numbers are 41 RSAA/ 4.09 ERA.
So, the Stros clearly strengthen their club with these signings, but the question looms whether they overpaid for what they are likely to receive. I would have preferred J.D. Drew to Lee among free agent sluggers, but Lee is clearly more durable than Drew and there is that whole Scott Boras thing with regard to dealing with Drew. Williams appears to be a reasonable risk, but without Clemens and Pettitte, the Stros are still in need of several of their young pitchers to step up to fill out their starting rotation next season.
But more importantly, neither of these deals addresses the Stros' main problem, which is having unproductive hitters such as Taveras, Everett, Ausmus and Bidg last season in the Stros' everyday lineup. If Luke Scott can continue his productive hitting and takeover in right field, then the Stros could take care of one of those problems by repacing Taveras in centerfield with either Chris Burke or a hopefully rebounding Jason Lane. But even with that move, given the Stros' indulgence of Bidg's quest for 3,000 hits and Everett's superlative defense at short, something needs to be done to replace Ausmus at catcher or else the Stros will continue to have three far-below National League-average hitters in their everyday lineup. The Stros got to a World Series in 2005 with such a lineup, but it took one of the best pitching performances by three starting pitchers on one team in Major League Baseball history to accomplish that. Inasmuch as that is not likely to happen again, here's hoping that the Stros aren't finished dealing this off-season to plug at least another of those holes in their lineup.
Lee and Williams' career statistics are below.
A pdf of Lee's statistics is here and of Williams' statistics is here. The abbreviations for the hitting stats are defined here and the same for the pitching stats are here.
Posted by Tom at 7:25 AM | Comments (0) | TrackBack (0)
November 24, 2006
An NY Times snit fuels Gretchen Morgenson's nightmare
It's not every day that a newspaper editor's defense of one of the newspaper's star columnists ends up fueling the cause to expose the vacuity of the columnist's work.
As noted earlier here and here, Clear Thinkers favorite Larry Ribstein has written a series of posts over the past year or so in which he uses the weekly columns of NY Times business columnist Gretchen Morgenson as examples of the mainstream media's misrepresention and misinterpretion of business issues to further a generally anti-big wealth agenda. That anti-big wealth agenda was in full bloom during the Enron criminal trials, which I noted on several occasions, most recently here.
Well, along those same lines, the Wall Street Journal's Holman Jenkins recently wrote this column ($) (described here in length in an earlier Ribstein post) in which he exposes an interesting fact about this earlier Times story (Times Select-$) on a supposedly virtuous CEO who turned down stock options because his father told him "'don't ever feel that you are worth it.' I don't want him to say that to me again."
Turns out that Jenkins had been offered the story before it ended up in the Times, but passed on it when he discovered facts the largely undermined the excessive compensation slant that the Times ultimately put on the story -- the CEO owned a big stake in a privately held company and so didn't need the options as an incentive and the CEO's doting father was a former Tyco board member and mentor of Dennis Kozlowski who suffered as a result of Kozlowski's excesses in that case. Neither of those salient facts made it into the Times story, which was written by Morgenson, a fact that Jenkins didn't even mention in his column.
At any rate, it didn't take long for the Times long to spring to Morgenson's defense. In this WSJ letter to the editor ($) entitled "Misrepresented, Insulted and Belittled." Times executive editor Bill Keller lashes out at Jenkins:
Mr. Jenkins misrepresented my paper's reporting, casually insulted one of the best journalists in the business, denounced our editors for dereliction of duty, and, in conclusion, belittled the corporate structure that prevents the New York Times from being owned by a hedge fund.
The rest of Keller's letter is long on similar bombast but short on substance, a point that Professor Ribstein makes in this post disassembling Keller's letter. In a wonderful twist of fate, Professor Ribstein reveals at the end of his post that Keller's letter has actually had the effect of facilitating the cause of exposing Morgenson's agenda:
I confess that after seven months of Morgenson I was tempted to go onto other subjects. I've got articles and books to write, classes to teach, papers to grade. The blog basically comes out of my sleep time. So I have to make sure that what I write about has some sort of payoff (after all, I don't even sell ads). I was starting to wonder whether I should continue to cast my stones into the darkness.But the NYT's editor's odd and completely unjustified attack on Jenkins (who, by the way, didn't even mention Morgenson by name in his column) convinced me that the problem here runs very deep. So I'm going to keep slogging.
Can someone please get Ms. Morgenson another stiff drink?
By the way, Keller's piece also contains a curious defense of the Times' anti-takeover mechanism that is contrary to Morgenson's usual position regarding shareholder supremacy. Keller contends that the family trust that controls a majority of the voting shares (but not a majority of the equity) is committed to serious journalism, while the majority owners (you know, which could be those devious and profit-fixated hedge funds) would not be. In other words, shareholder power is good for those bad companies that allow their executives to make too much money, but it is bad for news media companies, which have no such problems.
Got that?
Posted by Tom at 7:16 AM | Comments (0) | TrackBack (0)
November 23, 2006
Giving thanks to Milton Friedman's bookie
One of the underappreciated contributions of the late Milton Friedman is the impact of his market theories on the explosive development of derivative financial markets, particularly after the Nixon Administration abandoned in 1971 the fixed exchange rates that the Allies had established under the Bretton Woods Accords of 1944.
As Jim Johnston of the Heartland Institute notes here, Nixon Administration Treasury Secretary George Shultz -- a close friend of Professor Friedman's -- led the campaign to remove the fixed exchange rates. As the story goes, part of Secretary Schultz's motivation for removing the fixed exchange rates was Professor Friedman's disappointment that he could not place a bet against the British pound in the financial markets of the late 1960s. As we all know now, replacing regulation of fixed exchange rates by central bankers with markets for foreign exchange futures such as FOREX derivative contracts substantially improved the ability of business interests to hedge risk in currencies. Johnston explains:
Banks initially opposed the [Forex derivative] contracts, calling them the creation of Chicago "crapshooters." Later the banks used the FOREX contracts to hedge the tailored currency guarantees they sold to their customers. The move from regulation to markets was to pave the way for derivative contracts in heating oil, gasoline, crude oil, and natural gas in the order that they were deregulated.
The growth in financial and other derivatives, where speculators meet hedgers, continues even today. Indeed, so much so that the daily volume of trading exceeds trillions of dollars. It would not be unfair to say financial derivative trading is one of the largest institutions in the world.
Just think, it started out by being Milton Friedman's bookie.
Posted by Tom at 4:02 AM
November 22, 2006
The story of the open road
As many of us get ready to hit the road over the holiday weekend, Ralph Bennett in this TCS Daily article provides an excellent overview of the birth of the nation's Interstate Highway System during the Eisenhower Administration. We tend to take the system for granted these days, but it is truly an engineering and economic marvel that is one of our many blessings for which we will give thanks this holiday weekend.
Posted by Tom at 7:35 AM | Comments (0) | TrackBack (0)
A dream golf round
Sounds as if Jack Kendall, who owns a couple of Lexus dealerships in the Houston area, had the round of a lifetime recently at Pebble Beach Golf Club:
Kendall, 63, . . . made Pebble Beach history when he became the first golfer, amateur or professional, to ace two holes in the same round on the first nine holes of the 86-year-old course. His holes-in-one came on the par-3 5th and 7th holes.
To put this accomplishment in perspective, many very good golfers go a lifetime without ever making a hole in one. To it twice in a round is almost unheard of. To do it twice in a round while playing one of the most revered golf courses in the US? Now, that's going to be rather difficult to top.
Posted by Tom at 7:24 AM | Comments (0) | TrackBack (0)
While the Weary case is dismissed, the SWAT danger continues
In the right move, Texans' offensive lineman Fred Weary's criminal case was dismissed yesterday by Harris County Court at Law Judge Pam Derbyshire, who commented from the bench that Weary did not use enough force against police officers during the Nov. 14 incident to justify either the charge or, presumably, being Tasered.
Meanwhile on the police overreaction front, this Pokerati series of posts chronicles the latest Dallas SWAT team "success" -- breaking into and destroying several of the city's underground poker rooms. Pokerati has firsthand accounts of Dallas SWAT teams swooping into the poker rooms, breaking windows, kicking down doors, and charging with assault weapons drawn into peaceful gatherings of "dangerous" Texas Hold 'Em enthusiasts. I'm sure everyone in the Metroplex is sleeping more restfully now that these evil card sharpies are behind bars.
As former Cato Institute policy analyst Radley Balko shows in this Cato study, small municipalities frequently misuse SWAT squads for routine police work, which has led to an increasing number of botched raids resulting in injury or even death to innocent citizens. The Dallas poker raids were only the most recent example of unnecessary and dangerous SWAT unit deployments; this earlier post reported on one in a Houston suburb. Police overreaction is dangerous enough when it occurs in the spur of the moment as in the Weary case. But the risk of innocent citizens being harmed goes off the charts when SWAT teams are unnecessarily deployed to break up peaceful gatherings of people engaging in harmless activities.
Posted by Tom at 6:31 AM | Comments (0) | TrackBack (0)
November 21, 2006
Is the Big 12 Conference really viable?
As noted earlier here, the Big 12 Conference was formed as a money grab rather than because of any meaningful allegiances between most of the conference members. And, as noted here, football programs of the institutions in the Big 12 North Division have a difficult time competing with their better-funded and located (at least in terms of attracting good football players) brethen in the Big 12 South Division.
Well, Mark Kiszla of the Denver Post has been noticing the same thing. In this column entitled Divided, Big 12 bound to fall, he observes that the Big 12 is a poorly-structured alliance of convenience based almost entirely on money. As such, Kiszla predicts that the conference is destined to fail:
A football conference divided cannot stand.There's a feud in the Big 12 Conference between the North and South. It's a civil war in which nobody wins and Colorado too often loses.
This league - held together by little except greed and a championship game that's regularly as flat as a too-long-open can of Dr Pepper - is a clash of cultures as different as the Birkenstocks in Boulder and the ten-gallon hats of Texas.
In a conference in which the haves and have-nots are divided by geography, what has gone wrong? [. . .]
Can't we all get along here?
I'm afraid not.
For a league in which almost half the football teams have trouble putting up a good fight, there's way too much bad blood.
The Big 12 is a conference split by a Red River of tears, as the bullies from the south have won 13 of 16 games this season against the 98-pound weaklings from the northern plains.
Although the Big 12 boasts of three squads ranked among the top 25 (Longhorns, Sooners, Aggies), you again hear barely any noise from the north, other than the wind blowing through towns from Lawrence, Kan., to Ames, Iowa, as the Jayhawks and Cyclones get blown away by real football teams.
If something does not change, the Big 12 will be slowly ripped asunder, and I fear as the imbalance of power grows worse, the league as we know it will not exist 10 years down the road.
Just another example of the pressures arising from the increasing gap between the haves and the have-nots in big-time minor league -- er, I mean -- college football.
Posted by Tom at 4:28 AM | Comments (3) | TrackBack (0)
Does anyone take John Edwards seriously anymore?
As noted in this post from late 2004, a decent case can be made that former Democratic vice-presidential candidate was the difference in costing John Kerry the close 2004 Presidential election, particularly after his Benny Hinn imitation on the campaign trail.
But now as Edwards postures toward a run for the Democratic Party presidential nomination in 2008, he provided us an exhibition of hypocrisy that is brazen even by Washington, D.C. standards. On the same day that Edwards was bashing Wal-Mart on a conference call with labor leaders, an Edwards "aide" was requesting that the local Wal-Mart bump the former senator to the front of the line to get a Playstation 3 for his son. Reason's Jeff Taylor wryly observes:
The alternative to a Democratic presidential campaign marked by a downward spiral of Pythonseque depravation one-upsmanship might actually address issues like the federal entitlement explosion or comprehensive income tax reform, two areas where Republicans have failed miserably to advance any coherent solution. Should Edwards or Hillary Clinton or someone find away to talk about these things without class-warfare cant, they'll have a head start on the general election.In any event, maybe the best thing for Wal-Mart to do is stop chortling and go ahead and give John Edwards a PS3 and a couple games. Throw in a flat-panel too. Maybe that way he'll reacquaint himself with American prosperity and abundance and be a better candidate for the experience.
Is Hillary Clinton even going to have any competition for the 2008 Democratic Party presidential nomination?
Posted by Tom at 4:06 AM | Comments (5) | TrackBack (1)
Piling on in the Slade case
This Chronicle article reports that the criminal case of former Texas Southern University president Priscilla Slade does not appear to be moving toward an amicable resolution:
The Harris County District Attorney's Office is investigating suspicions that former Texas Southern University President Priscilla Slade may have lied to the grand jury.Prosecutor Donna Goode sought today to unseal Slade's grand jury testimony so that Slade's former assistant could review it for inconsistencies.
If conflicts are found, Slade could be charged with aggravated perjury.
Slade already faces an effective life prison sentence if convicted on felony charges of misapplication of fiduciary property, so why seek an additional ten years on an aggravated perjury charge? Slade attorney Mike DeGeurin suggests that the prosecution wants to use the grand jury testimony in preparing witnesses who would not otherwise have access to the secret testimony.
Meanwhile, Slade faces a possible February 16, 2007 trial date in what is shaping up to be one of the ugliest white collar criminal cases to take place in Harris County District Court in a long while.
Posted by Tom at 4:04 AM | Comments (1) | TrackBack (0)
November 20, 2006
Politics and the Evangelicals
This NY Times article reports on the how Ted Haggard's evangelical church dealt with the termination and succession issues in the large Colorado church that Haggard had started and had become identified with him. The article concludes that the church ultimately handled the termination and succession reasonably well, although it appears that warning signs regarding Haggard's behaviour went largely unheeded among church leaders before his public meltdown.
But the more interesting analysis of the current state of the Evangelical movement is contained in this Ben Witherington post, which includes these following observations regarding the dubious political allegiance between Evangelicals and certain elements of the Republican Party:
[T]he alliance between Evangelicals and the hard line conservatives in the Republican party has made it difficult for many Evangelicals to see the difference in our time between being a Christian and being an American, and in particular being a certain kind of an American—namely a Republican. The problem is that this reflects a certain kind of mental ghettoizing of the Gospel, a blunting of its prophetic voice on issues ranging from war to poverty, and sometimes this even comes with the not so subtle suggestion that to be un-American (defined as being opposed to certain key Republican credo items) is to be un-Christian. But Christianity must and does transcend any particular cultural expression of itself, otherwise we have the cultural captivity of the Gospel which leads to a form of idolatry. It is one thing to sing ‘my country tis of Thee’, its another thing to have a bunker mentality which makes our countries ills hard to define and our flaws even harder to critique and correct. [. . .]
Christians should never be making their major decisions in life chiefly based on fear or a desire for revenge, or both. Nor should we support politicians who do so, whether they go to church or not. They are part of the problem, not part of the solution. If the question is WWJD, for sure its not what we’ve been mostly doing as a nation in the last six years.So its time to wake up and smell the coffee. Does it smell like the aroma of Christ and his Gospel, or does it smell like dirt, like grounds, like mud? I hope someone out there in the Evangelical Church is listening. We need a whole new approach to ethics and ministry in the years to come in the 21rst century. It's time for a year of Jubilee. It's time to mend fences with our neighbors and the neutral. It's time to stop sticking sticks in hornet’s nests and wondering why we keep getting stung. May God help us overcome our American and Evangelical myopia.
Read Dr. Witherington's entire post. It's well worth it.
Posted by Tom at 4:54 AM | Comments (0) | TrackBack (0)
Liberty and Justice for all?
The chronically overcrowded and abysmal condition of the Harris County Jail has been a frequent topic on this blog (most recently here), so this Bill Murphy/Houston Chronicle article from over the weekend caught my eye because it concerned the changing views of one of the formerly toughest sentencing judges in the Harris County District Courts:
State District Judge Michael McSpadden once believed that long sentences would deter drug sales and drug use.But after more than two decades hearing felony cases in Harris County, the former prosecutor is calling on the governor and Legislature to reduce sentences for low-level drug possession.
"These minor offenses are now overwhelming every felony docket, and the courts necessarily spend less time on the more important, violent crimes," he recently wrote to Gov. Rick Perry.
Nearly twice as many defendants in Harris County were sent to state jails last year for possessing less than 1 gram of a drug than in Dallas, Tarrant and Bexar counties combined.McSpadden recommended making delivering or possessing a small amount of drugs a Class A misdemeanor carrying no more than a year in county jail. [. . .]
The judge said the Houston Police Department and District Attorney's Office are clogging court dockets and causing crowding in the county jail and state jails by bringing so many drug-possession cases against those found with pipe residue or a sugar packet's worth of cocaine.
Scott Henson over at Grits for Breakfast recently touched on the overcrowding issue and the related waste of resources issue in connection with the arrest in the Houston area of Doug Supernaw, the Bryan-born Texas country and western music star, for possession of a roach clip with a small amount of marijuana. Scott also blogged a post on the McSpadden story, and he has compiled a valuable series of posts on why Texas prisons are overcrowded, what counties can do about it, and the particular reasons why the Harris County jails remain such a mess.
Meanwhile, Doug Berman over at the Sentencing Law and Policy blog posted this piece on this Fact Sheet from the National Council on Crime and Delinquency that compares United States incarceration rates with those of other countries around the world. The data does not reflect well on the U.S.:
The U.S. has less than 5% of the world’s population but over 23% of the world’s incarcerated people.
The U.S. incarcerates the largest number of people in the world.
Some individual US states imprison up to six times as many people as do nations of comparable population.
The incarceration rate in the U.S. is four times the world average.
Crime rates do not account for incarceration rates.
The U.S. imprisons the most women in the world.
Professor Berman observes: “And we are supposedly a country founded on freedom? We may talk the talk about liberty, but we certainly do not walk the walk in the way we approach and apply our criminal justice system.”
The overly-harsh and wasteful sentences handed down to businessmen such as Jamie Olis and Jeff Skilling tend to receive the most publicity, but the equally harsh sentences meted out in Texas and much of the rest of the US over minor drug offenses and the like is a national disgrace. As the late Milton Friedman observed in this letter to former drug czar Bill Bennett, we all should be "revolted . . . by the prospect of turning the United States into an armed camp, by the vision of jails filled with casual drug users and of an army of enforcers empowered to invade the liberty of citizens on slight evidence."
Posted by Tom at 4:17 AM | Comments (6) | TrackBack (0)
2006 Weekly local football review
Key note to first year Texans' coach Gary Kubiak -- the Texans (3-7) are not yet good enough to put the offense in a phone booth while trying to milk the clock with a narrow 4th quarter lead. It's pretty hard for the Texans to lose a game in which their generally anemic offense generates almost 400 yards, but giving up over 200 yards passing and two long TD passes to the eminently forgettable Bills QB J.P. Losman in the 1st quarter is a good way to start to do it. And then making only four first downs in the second half (the Bills had as many in the game-winning drive) and just one in the fourth quarter is the way to finish it off. By the way, does anyone else think that John McClain's entry into the world of blogging has actually improved his analysis of Texans football (blog post on yesterday's game is here)? The Texans go on the road the next two weeks to meet the Jets (5-5) and the Raiders (2-8) before returning home the following week to meet the Titans (3-7).
Houston Cougars 23 Memphis 20 OT
In another example of what can go wrong when a team quits taking measured risks with its offense while sitting on a 4th quarter lead, the Coogs (9-3, 7-2) survived a blocked field goal returned for a Memphis (1-10, 0-7) TD in the last two minutes to win the game in overtime. Houston has an extremely difficult offense to defend when they are clicking on all cylinders, but their defense is simply not good enough for the offense to play conservatively after building a lead. The Cougars now get Thanksgiving week off before hosting the C-USA championship game on Friday evening, December 1 against probably Southern Miss (6-4, 5-2).
The Owls (6-5, 5-2) continue to make me look prescient for my early season prediction that they were going to surprise quite a few people this season so long as they could avoid decimating injuries during their brutal early season schedule. This win was particularly impressive in that the Owls pulled it off after losing stellar QB Chase Clement over the final quarter and a half. If the Owls can get Clement back next week and beat SMU (6-5, 4-3) at home, then they will likely be C-USA's representative in the Ft. Worth Bowl, the Owls first bowl appearance in 45 years. First year Rice coach Todd Graham is the coach of the year in my book.
The Texas Longhorns and the Texas Aggies were off this week in preparation for their annual day-after-Thanksgiving showdown in Austin.
Posted by Tom at 4:11 AM | Comments (2) | TrackBack (0)
November 19, 2006
The Friedman influence
Several clever recent posts reflect the tremendous influence that Milton Friedman has had on economics and politics.
First, Larry Ribstein -- who doesn't touch on politics much but always provides keen insight when he does -- reflects Friedman's view on government interference in markets with this observation about the current political scene:
Senate Democrats, who need 60 votes to anything, have 51, and that includes some diverse agendas (e.g., Joe Lieberman). The House Speaker-to-be got thoroughly trampled by her own party on her first move. The WP quotes Jim Moran as threatening revenge on people who voted against Murtha (who, by the way, thinks ethics rules are "crap"). Meanwhile, the last time I checked, GWB was still President, a lame duck thinking about the history books.In short, the U.S. government appears to be totally paralyzed for the next two years, incapable of doing much more than impotently holding hearings.
I guess the fact that the stock market has been setting records every day must be just a coincidence.
Meanwhile, the Wall Street Journal's ($) Washington Wire blog passes along this anecdote about Friedman from none other than John Kenneth Galbraith:
[A]t a lunch in Geneva in 1955, India’s statistician mentioned to [Galbraith] that the Indian government had asked several economists, including Milton Friedman, to visit and comment on Indian’s next five-year plan. [Galbraith] replied:“Asking Milton Friedman to comment on a five year plan is like asking the Pope to comment on the running of a birth control clinic.”
Over at Cafe Hayek, Don Boudreaux recounts Professor Friedman's legendary debating skill:
Mr. Friedman also was a virtuoso debater. When, to endorse conscription over the volunteer military, Gen. William Westmorland said that he did not want to command "an army of mercenaries," Mr. Friedman piped up and asked, "General, would you rather command an army of slaves?"Mr. Westmoreland replied, "I don't like to hear our patriotic draftees referred to as slaves." To which Mr. Friedman then retorted, "I don't like to hear our patriotic volunteers referred to as mercenaries. If they are mercenaries, then I, sir, am a mercenary professor, and you, sir, are a mercenary general; we are served by mercenary physicians, we use a mercenary lawyer, and we get our meat from a mercenary butcher."
Finally, Lawrence Summers does a fine job of placing Professor Friedman's impact on the worlds of economics and politics in perspective in this NY Sunday Times op-ed.
Posted by Tom at 7:39 AM | Comments (0) | TrackBack (0)
November 18, 2006
Bo Schembechler, R.I.P.
Former University of Michigan
I never had the opportunity to meet Coach Schembechler, but I have long felt connected to him. Many of my friends in the coaching profession knew and enjoyed him, particularly how he loved to compete. Even though my family was from Iowa, we always suffered with Schembechler during Michigan's long drought in the Rose Bowl when it seemed as if the Pac-10 teams were always flying by Bo's Michigan teams. Although Schembechler was 12 years younger than my father, the two of them were both active and highly-motivated men who had heart attacks and by-pass surgery at a time when that surgery was still a somewhat iffy proposition. They both then returned to their respective professions and worked productively for many years, representing two good examples of the value of that surgical procedure. Schembechler even died in the same manner as my father, suddenly of a heart attack while enjoying what he loved to do. These were two men who were not about to let a little health problem interfere with enjoying the fullness of life.
Schembechler was also indirectly responsible for a funny story from my modest athletic career. Soon-to-be former Iowa State coach Dan McCarney and I were two of the better players on a championship high school football team in Iowa City in 1970, which was during a long drought in University of Iowa football fortunes that lasted from the early 1960's until Hayden Fry resurrected the Iowa program in 1979. Frank Lauterbur, a mostly forgettable figure who had just been hired as the new Iowa coach at the time, was recruiting McCarney, who was a much better college football prospect than me. However, because Mac and I were buddies, Lauterbur allowed me to tag along during Mac's recruitment, probably because he figured that Mac would be more likely to attend Iowa if I decided to walk-on as a non-scholarship player on the Hawkeye football team.
At any rate, one winter night at the home of Mac's family in Iowa City during early 1971, Lauterbur and two of his assistant coaches were talking to Mac and me on how they planned to turn around the struggling Iowa program. Iowa had just finished the 1970 season 3-6-1, including a 55-0 pasting at the hands of Bo's Michigan team in Ann Arbor. Lauterbur made clear to Mac and me that such disasters were no longer going to be allowed under his new regime:
"Sons," Lauterbur declared confidently. "I can assure you of one thing if you come to Iowa. Michigan is not going to beat Iowa by 55 points any longer!"
Lauterbur was right, although not in the way he meant. The next season, Bo's Michigan team beat Lauterbur's first Iowa team by 56 points, 63-7.
Posted by Tom at 8:02 AM | Comments (0) | TrackBack (0)
November 17, 2006
Kopper and Koenig step up to the plate
Two more former Enron executives who copped pleas will be sentenced this morning, former Andy Fastow confidant, Michael Kopper, and former Enron investor relations chief, Mark Koenig.
Both men will likely be presented today as paragons of virtue who simply had a lapse of judgment while embroiled in the corruption of Enron. The truth is far different, as explained in this earlier post about Kopper and this previous one about Koenig. Kopper is one of the relatively few real criminals in the entire Enron affair and should be receiving a sentence on par with that of Fastow, although that is unlikely to occur. On the other hand, Koenig is not a criminal and probably should be doing what Chris Calger is attempting to do, but that doesn't make his dubious testimony after copping a plea any less despicable.
Update: Kopper gets 3 years a month in prison and Koenig receives 18 months (Chronicle story here).
Posted by Tom at 5:36 AM | Comments (3) | TrackBack (0)
The Enron Task Force's next loss
This earlier post highlighted the Enron Task Force's extraordinary concession regarding the invalidity of four of five counts upon which the the conviction of former Enron Broadband executive Kevin Howard was based. As noted in that post, the Task Force made a half-hearted argument that the fifth count -- falsifying Enron's books and records -- should not be vacated, but this response from Howard exposes the vacuity of the Task Force's position:
The key principle here is that when the basis for the conviction cannot be determined by examining the verdict form, and a ground exists which cannot be legally support such a conviction, the conviction must be set aside. One just cannot guess that the jury chose a proper basis instead of the improper basis.This has been the law for almost half a century: [. . .]
The consistent teaching of the cases cited by the Government is that when a reviewing court reverses a conspiracy conviction for legal error, a reversal is also required for an offense which is the object of the conspiracy unless the Government proves beyond a reasonable doubt that there was no Pinkerton connection -- that is, the defendant was convicted solely on his own direct conduct, and not because of the conduct of a co-conspirator acting in furtherance of the conspiracy.
The very heavy burden cannot be met by the Government . . . No impartial observer could find that Kevin Howard personally made any entry in the books and records of Enron Corporation, false or otherwise, or was responsible for any other person doing so. Most importantly, on this record, no reviewing court could find beyond a reasonable doubt that no co-conspirator from the common plan alleged in [the conspiracy to commit honest services wire fraud count] made such entry.
Howard's conviction is almost certain to be vacated, just as the convictions of the four Merrill Lynch executives were vacated in the Nigerian Barge case. The Task Force prosecuted the case against Howard in the same manner as the case against the Merrill Four -- assert an unwarranted expansion of a criminal law intended to punish kickbacks and bribes against defendants who did no such thing, and then blatantly appeal to the strong juror resentment (see also here) against anyone having anything to do with Enron to obtain a conviction.
Christine Hurt is currently working on a paper regarding the disparate burdens on civil and criminal defendants in business misconduct cases, and she notes here that many of the Enron Task Force prosecutors who promoted these failed prosecutions have gone on to lucrative careers in private practice. Professor Hurt observes that a defendant in a civil business misconduct lawsuit has protections against another party's vexatious litigation tactics, but those protections do not exist in a criminal business misconduct case against an unpopular and usually wealthy defendant. As a result, justice and the rule of law is easily compromised in such cases, and the damaged lives, ruined careers, and destroyed wealth that lie in the wake of the Enron Task Force is tangible evidence of the enormous cost of such spurious prosecutions. As Professor Hurt wryly asks, are the now-wealthy former Enron Task Force prosecutors going to be held responsible for that cost?
Posted by Tom at 4:22 AM | Comments (0) | TrackBack (0)
Maybe this will make the Longhorns feel better
As noted in this earlier post, Las Vegas Sports Consultants publishes their OddsMakers Top 25 each week in which they rank major college football teams based on injuries, performance, skill and game location, not on won-loss record and not on which teams will draw the greatest or least betting action (they leave that for the bookies). The poll is becoming quite popular with the betting markets and is currently published every Monday in the Las Vegas Review-Journal.
Inasmuch as this ranking is based on the profit motive (LVSC is attempting to attract betting customers through the accuracy of its research), my sense is that the OddsMakers Top 25 ends up being a more accurate ranking than the traditional polls, which tend to be plagued by the subjective bias of its voters. For your weekend football viewing pleasure, The following is this week's Oddsmakers Top 25 poll with the team record and BCS ranking in parentheses:
1. Ohio State (11-0, 1)
2t. LSU (8-2, 11)
2t. Southern Cal (8-1, 3)
4. Michigan (11-0, 2)
5. Texas (9-2, 13)
6. Notre Dame (9-1, 5)
7. Florida (9-1, 4)
8. Cal (8-2, 15)
9t. Louisville (8-1, 10)
9t. Oklahoma (8-2, 17)
11. Wisconsin (10-1, 9)
12. West Virginia (8-1, 8)
13t. Arkansas (9-1, 7)
13t. BYU (8-2, 25)
15. Oregon (7-3, 24)
16. Clemson (8-3, NR)
17. Rutgers (9-0, 6)
18. Nebraska (8-3, 23)
19t. Auburn (9-2, 14)
19t. Tennessee (7-3, 22)
21. Hawaii (8-2, NR)
22. Georgia Tech (8-2, 18)
23. Virginia Tech (8-2, 21)
24. Penn State (7-4, NR)
25. Boise State (10-0, 12)
Not ranked by Oddsmaker Top 25: Wake Forest (16th in BCS), Maryland (19th), Boston College (20th).
And in the college head coaching carousel, check out the YouTube video below by a Michigan State fan who is, might we say, quite supportive of LSU defensive coordinator Bo Pelini's candidacy for the MSU head coaching position:
Posted by Tom at 4:15 AM
November 16, 2006
Milton Friedman, R.I.P.
I cannot improve on the brilliant simplicity of the lead sentence in the Wall Street Journal's article on the death earlier today of Milton Friedman:
Nobel prize winner Milton Friedman, one of the most influential economists of the last century, died today.
OpinionJournal chimes in with this fine tribute to Professor Friedman and the NY Times articles on Professor Friedman's death are here and here, the latter of which is by Austan Goolsbee, a University of Chicago economics professor. The Cato Institute also has posted this excellent online tribute to Professor Friedman from his 90th birthday, and the Hoover Institution's news release on his death is here. The Financial Times' excellent obituary is here, and Professor Friedman's student, Thomas Sowell, has a heartfelt tribute here.
Professor Friedman's writings are one of the primary reasons that I studied economics in undergraduate school and his wisdom and wit frequently blessed this blog over the past three years. Here are a few examples of Professor Friedman's remarkable ability to communicate complex principles with engaging simplicity:
On the progress of free markets in the world after World War II:
"After World War II, opinion was socialist while practice was free market; currently, opinion is free market while practice is heavily socialist. We have largely won the battle of ideas (though no such battle is ever won permanently); we have succeeded in stalling the progress of socialism, but we have not succeeded in reversing its course. We are still far from bringing practice into conformity with opinion."
On the fundamental problem with government spending:
"There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you're doing, and you try to get the most for your money.Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I'm not so careful about the content of the present, but I'm very careful about the cost.
Then, I can spend somebody else's money on myself. And if I spend somebody else's money on myself, then I'm sure going to have a good lunch!
Finally, I can spend somebody else's money on somebody else. And if I spend somebody else's money on somebody else, I'm not concerned about how much it is, and I'm not concerned about what I get. And that's government. And that's close to 40% of our national income."
Answering a couple of questions on Social Security:
Q: If Social Security is such a terrible program, why is it the most popular government program in American history?Friedman: "Well, because why does a Ponzi game work? It's easy to understand why it's popular. So far, on the average, retirees have gotten more out of the system than they put into it. "
Q: What about the fact that Social Security has reduced poverty among the elderly?
Friedman "Well, what it has done is transfer a lot of income from the young to the old. It is certainly true it has made the old people of the United States the best treated old people in the world."
Q: But why is that a bad thing?
Friedman: "Oh, it's not a bad thing for them, but what about the young?"
On rent controls and his influence in local political debates:
When Professor Friedman moved to San Francisco in the 1970's, the city was debating rent control. So he wrote a letter to The San Francisco Chronicle declaring: "Anybody who has examined the evidence about the effects of rent control, and still votes for it, is either a knave or a fool."In a subsequent San Francisco Chronicle article, Professor Friedman was asked what happened after he sent his letter?
"They immediately passed it," Friedman laughed.
On a key difference between private firms and government:
"[A] private firm that makes a serious blunder may go out of business. A government agency is likely to get a bigger budget."
On competition from foreign companies that are subsidized by their government:
"Another source of "unfair competition" is said to be subsidies by foreign governments to their producers that enable them to sell in the United States below cost. Suppose a foreign government gives such subsidies, as no doubt some do. Who is hurt and who benefits? To pay for the subsidies the foreign government must tax its citizens. They are the ones who pay for the subsidies. US consumers benefit. They get cheap TV sets or automobiles or whatever is that is subsidized. Should we complain about such a program of reverse foreign aid?"
On government health care systems:
"Two major arguments are offered for introducing socialized medicine in the United States: first, that medical costs are beyond the means of most Americans; second, that socialization will somehow reduce costs. The second can be dismissed out of hand -- at least until someone can find some example of an activity that is conducted more economically by government than by private enterprise. As to the first, the people of the country must pay their costs one way or another; the only question is whether they pay them directly on their own behalf, or indirectly through the mediation of government bureaucrats who will subtract a substantial slice for their own salaries and expenses."
On the best protection for workers:
"The most reliable and effective protection for most workers is provided by the existence of many employers. As we have seen, a person who has only one possible employer has little or no protection. The employers who protect a worker are those who would like to hire him. Their demand for his services makes it in the self-interest of his own employer to pay him the full value of his work. If his own employer doesn't, someone else may be ready to do so. Competition for his services -- that is the worker's real protection."
On free markets and international relations:
"The great virtue of a free market is that it enables people who hate each other, or who are from vastly different religious or ethnic backgrounds, to cooperate economically. Government intervention can’t do that. Politics exacerbates and magnifies differences."
On conservative versus liberal economists:
"I never characterize myself as a conservative economist. As I understand the English language, conservative means conserving, keeping things as they are. I don't want to keep things as they are. The true conservatives today are the people who are in favor of ever bigger government. The people who call themselves liberals today -- the New Dealers -- they are the true conservatives, because they want to keep going on the same path we're going on. I would like to dismantle that. I call myself a liberal in the true sense of liberal, in the sense in which it means pertains to freedom."
On evaluating governmental policies:
"One of the great mistakes is to judge policies and programs by their intentions rather than their results. We all know a famous road that is paved with good intentions. The people who go around talking about their soft heart -- I share their -- I admire them for the softness of their heart, but unfortunately, it very often extends to their head as well, because the fact is that the programs that are labeled as being for the poor, for the needy, almost always have effects exactly the opposite of those which their well-intentioned sponsors intend them to have."
This OpinionJournal post also includes a number of Professor Friedman's thoughts on a variety of issues.
Finally, when you have a few minutes, take a moment to watch this remarkable Open Mind video (other videos of Professor Friedman are here and here) from over 30 years ago of Professor Friedman discussing principles of economics and limited government. The entire video is about a half hour, but if you watch nothing else, take a moment to watch the beginning of the interview in which Professor Friedman brilliantly responds to a somewhat inflammatory opening question from the interviewer, who suggests that Professor Friedman lacks compassion for his fellow man. Professor Friedman calmly refuses to take the bait and turns the question around to question the motives of those who advocate the cure-all of government intervention.
Now, that's an expert witness I would have liked to have put in front of any jury!
Posted by Tom at 1:42 PM | Comments (1) | TrackBack (1)
Fred Weary's adventure
H'mm, now let me get this one straight.
As Stephanie Stradley reports in detail (John McClain's comments are here), Texans offensive guard Fred Weary left work at Reliant Park a little after noon on Tuesday. Weary, who is 6'4", 308 lbs., was followed by a couple of Houston policemen in a squad car as he drove through the Reliant Park area to get on the South Loop and head home.
The officers followed Weary for about six miles and determined that he was "acting suspiciously" and "looking at (them) on several occasions." After seeing him commit the heinous offense of making a bad lane change, the crack team of officers swooped into action and pulled Weary over on the shoulder of the West Loop, which just happens to be the busiest freeway in Houston. After stopping Weary, the officers ramped up their investigation and determined that the front license plate on Weary's car was missing.
Weary was understandably irritated that the officiers had pulled him over in one of the most dangerous locations in Houston for doing something that occurs probably a million times in Houston each day. One thing led to another and, before you know it, the officers had Tasered Weary, arrested him and hauled him down to city jail. Verifying once again that it is virtually impossible to get someone processed out of jail in Houston in less than seven hours regardless of the offense, Weary was finally bailed out and able to head home at around 9:30 p.m. Quite a day off, eh?
As usual, HPD is contending that the officers acted reasonably in Tasering and arresting Weary. Count me as highly skeptical about that.
Update: The criminal case against Weary was dismissed in short order. Stay tuned.
Posted by Tom at 4:50 AM | Comments (5) | TrackBack (0)
Re-thinking angioplasty in certain situations
Following on a trend noted in previous posts here and here, this NY Times article (see also here) reports that findings from a major new study suggest that noninvasive treatment with beta-blockers and other heart drugs turns out to be at least as good as angioplasty for patients whose arteries remain blocked at least three days after a heart attack. The findings -- which were presented earlier this week at the annual scientific meeting of the American Heart Association and published simultaneously online by the New England Journal of Medicine -- supplement an increasing body of research that is indicating that heart-attack patients whose disease is stable and whose symptoms are under control should be wary of taking the risk of invasive treatment, which can result in infection and bleeding.
Over the past 20 years or so, treatment of heart attacks has been transformed by the ability of doctors to break up blood clots that cause the heart attacks with clot-busting drugs and angioplasty procedures. By quickly restoring blood flow to the heart muscle following an attack, doctors have been able to save lives and minimize damage that can lead to total heart failure. However, a nagging problem has been that about a third of the million or so Amerians who suffer a heart attack each year do not arrive at a hospital within the 12-hour window after the attack during which the patients are most likely to benefit from these techniques. In those patients who stabilize on their own after an attack and then are not diagnosed with blocked arteries until days after the attack, the conventional wisdom has been to go ahead and perform the angioplasty, anyway.
The trial, which was funded by the National Heart, Lung and Blood Institute, involved about 2,200 men and women who had a totally blocked artery three to 28 days after suffering a heart attack. They were assigned randomly to receive either just the best-available drug therapy or drug therapy plus angioplasty and stent treatment. Blocked arteries were opened successfully in about 90% of the angioplasty patients and they opened spontaneously in about 25% of the patients taking just medication.
After four years, 17.2% of patients in the angioplasty group had died, suffered another heart attack or developed serious heart failure. In comparison, 15.6% in the group on medication alone had the same results. Although the relatively small difference could have resulted from mere chance, researchers suggest that the findings do not support the the higher risk of aggressive intervention in such patients.
The bottom line: People with chest pains should get to the hospital as soon as possible because quick application of clot-busting drugs and angioplasty remains the best way to preserve the heart muscle. But if the patient fails to do so and stabilizes on their own, then the benefit of an angioplasty later may not be worth the risk.
Posted by Tom at 4:46 AM | Comments (0) | TrackBack (0)
Handicapping the competition for the Texas Fifth Circuit Judgeships
David Lat of AbovetheLaw.com does a good job here of analyzing the various candidates for the two "Texas" Fifth Circuit Court of Appeals judgeships that will be opening soon with Judges Patrick Higginbotham and Harold DeMoss taking senior status. Houston judges George C. Hanks, Jr. (First Court of Appeals), Jennifer W. Elrod (190th District Court), Jane Bland (First Court of Appeals) and U.S. District Judge Lee Rosenthal are on the short list, as is former Houstonian, Texas Supreme Court Chief Justice Wallace Jefferson. This should be quite a competition, so stay tuned.
Posted by Tom at 4:30 AM | Comments (0) | TrackBack (0)
November 15, 2006
It's all Flutie's fault?
Geez, and I thought Texas Aggie fans were taking their team's losses hard. But Aggie angst is nothing compared to what boiled over in Longhorn land after Texas' upset loss to Kansas State last Saturday night that doomed the Horns' BCS championship hopes:
An unhinged Texas Longhorn fan who blames Doug Flutie’s televised analysis for the team’s upset Saturday threatened the former football star and his family in an electronic mail message, police said.The threat, which was not detailed by police, was sent to the Doug Flutie Jr. Foundation for Autism early Sunday, police Lt. Paul Shastany said.
“We have intentions of finding this person and speaking to this person,” said Shastany. “As threats go, it’s a pretty serious incident.”
Although the exact nature of the threat was not disclosed, the man, who investigators believe lives in California, wrote, “You jinxed the Longhorn faithful and a chance at the national title,” Shastany said.“He was upset, wishing bad will and speaking badly about his family,” said Shastany. “At this point, the information is disconcerting enough to follow this up the best we can.”
Police spoke with Flutie, and he is aware of the threat, Shastany said, but there was no imminent danger and Flutie went ahead with a foundation fund-raiser last night at the Hyatt Regency in Boston.
Flutie is a college football analyst for ABC and ESPN. His playing career included winning a Heisman Trophy with Boston College in 1984, two stints with the Patriots and several championships in Canada. The Texas Longhorns were upset Saturday, when Kansas State beat them 45-42.
Posted by Tom at 4:27 AM | Comments (1) | TrackBack (0)
A Sonic boom fizzles in Seattle
I read this NY Times article over the weekend and found it rather refreshing:
Empowered by a wave of venture capital, a hiring boom and pride in its homegrown billionaires, this city has decided it no longer needs a mediocre professional basketball team to feel good about itself.On Election Day, residents rebuffed their once-beloved Seattle SuperSonics, voting overwhelmingly for a ballot measure ending public subsidies for professional sports teams. [. . .]
The vote last week guarantees that the Sonics will leave their current home, KeyArena, in 2010, he said. The team may move to the Seattle suburbs and plans to talk to the State Legislature about that in coming weeks, but most people here think [the Sonics' owners] will move the team to Oklahoma City.
In short, the cost of subsidizing an NBA team has finally exceeded the benefits that most Seattle residents believe they derive from having an NBA team. The same thing has already occurred in Los Angeles with regard to the NFL. As professional sports franchises test the upper limit of what consumers are willing to pay for their product, several other cities will likely follow LA and Seattle's lead. That's not a bad development. Warren Meyer agrees.
Posted by Tom at 4:13 AM | Comments (0) | TrackBack (0)
The super-heated free agent market
Dodgers rightfielder J.D. Drew opted out of the final three years of his $11 million per year contract last week, passing up the remaining three years and $33 million on his deal to test what he could draw on the free agent market. The conventional wisdom is that Drew made a mistake.
However, based on the first week or so of free agent transactions this off-season, not only did Drew not make a mistake, it looks to me as if his decision to opt-out was a no-brainer. Drew (28 RCAA/.393 OBA/.498 SLG/.891 OPS for 2006; 146/.393/.512/.904 career) is probably the best outfielder in this year's free agent pool and maybe even the position player overall. With the upper end of of this year's market looking like 5 years and $80 million or so for a player of his caliber, the 31 year-old Drew will probably earn an additional $20-30 million of guaranteed money and almost certainly do much better than $33 million over 3 years. Yeah, he's not the most popular guy in the clubhouse and he has had injury problems, but he's coming off a solid season in which he played a career-high 146 games. Some team needing solid production from the left side of the plate (which team doesn't) will probably pay him the premium over his prior contract that prompted the opt-out.
Drew's opt-out reflects the reason why the Stros probably won't be much of a factor on the free agent market this off-season. Drew is good, but he's not as good as the Stros' Lance Berkman, who is entering the third season of his six year deal that pays him about $14 million a year. There is no way the Stros are going to pay someone like Drew more than Berkman, even though Drew probably will end up making more than Berkman from some other team.
That's why retooling a Major League Baseball club on the free agent market is really not a practical approach except for a few big-market clubs -- it's prohibitively expensive. Better to maintain the farm (and fiscal sanity) with good prospects and then tap the free agent market only when it is likely to produce a player who will propel the club into playoff contention.
Posted by Tom at 4:10 AM | Comments (0) | TrackBack (0)
November 14, 2006
Another dirty secret of the Enron Task Force
Former Enron chief accountant Richard Causey will be sentenced tomorrow by U.S. District Judge Sim Lake, and Causey's sentencing hearing highlights another of the Enron Task Force's dirty secrets that the mainstream media has largely ignored in favor of demonizing former Enron executives.
When Causey entered into his plea deal on the eve of the Lay-Skilling trial (see also here), most folks figured that the Task Force would use him as a key witness against his former co-defendant Skilling. The Task Force needed Causey to corroborate former Enron CFO Andrew Fastow's testimony regarding the Global Galactic agreement, the alleged secret handwritten agreement between Fastow and Causey under which Causey supposedly provided Enron's assurance -- allegedly with Skilling's blessing -- that Fastow's various special purpose entities would receive a guaranteed rate of return for investing in Enron assets. Inasmuch as those SPE transactions removed a substantial amount of debt and underperforming assets from Enron's balance sheet, a key contention in the Task Force's charges against Skilling and Lay was that Global Galactic proved that Enron's SPE transactions were shams that helped Skilling and Lay illegally disguise the company's deteriorating financial condition. So, Global Galactic was a pretty important element in the Task Force's case against Skilling and Lay.
During his Lay-Skilling testimony, Fastow sang like a canary about the Global Galactic agreement, although the existence of the agreement became more suspect the more Fastow talked about it. Meanwhile, the Task Force never called Causey to testify during the Lay-Skilling trial, probably because Causey would not corroborate Fastow's testimony regarding Global Galactic. And that's not the only dirty secret of the Task Force (see here and here), nor the only lie that Fastow told during his testimony.
Thus, Fastow -- who stole millions and then lied to help convict Skilling and Lay -- is doing a six-year sentence and will be out in about five. On the other hand, Causey -- who didn't steal a dime and refused to corroborate Fastow's lies -- will probably serve more time in prison than Fastow.
Is this how we want to go about learning the truth about what really happened at Enron? Ellen Podgor has more here.
Update: Judge Lake sentenced Causey to five and a half years in prison.
Posted by Tom at 4:55 AM | Comments (2) | TrackBack (0)
The indiscriminate Hammer
Ben Witherington is a noted New Testament scholar at Asbury Theological Institute in Wilmore, Kentucky near Lexington, which is not the typical place that former House Majority Leader Tom DeLay would normally have been trolling for money during his heyday in Congress. In this post explaining the danger for Evangelical Christians in aligning themselves with either major political party, Dr. Witherington passes along the following anecdote about DeLay:
Several years ago I was contacted by Tom DeLay. He figured since I was a well known white Evangelical I must be on his side on a host of things. I was invited to the White House, and I was named Kentucky Business Man of the Year. I have the plaque sitting in my office framed to prove it. Now, I am no businessman. Just ask my wife. For five years I ran a little coffee shop in Wilmore for our Christian students as a ministry to them-- its called Solomon's Porch, and its still up and running, employing and feeding students and helping them work their way through college and seminary. Its a good ministry, but its not a business that made money. In fact I lost $40,000 helping those students during that time. I was definitely not a Kentucky Businessman of the Year! There were many who did better than I, and I could talk at length about the plight of small businesses which are taxed right out of existence. Several previous restaurants in that spot had not lasted more than about six months. Wilmore is only a town of some 5,000 souls.
You see Delay was running a scam on Evangelical Protestants. It worked like this--- you call someone, and send them an award, whether they deserve it or not. You invite them to D.C. to meet influential people. Delay gets the photo-op with small business persons, but the real purpose of all this is raising money. I got endless calls out of Delay's office to send money to this, that or the other fund running out of his office to further his causes etc.In other words, I wasn't given an award for anything. Obviously they were oblivious to the fact that my business was failing from an economic point of view, though not from a ministry point of view. What I was given was a carrot, hoping for a whole bunch of carrots in return. It was purely a quid pro quo deal. What I won was endless phone calls about races, and causes etc. some of it more or less connected to Delay's office directly. It is not a surprise to me that the man was drummed out of office. It is also not a surprise to me that he was a major player in that party and a close ally of George Bush from way back in Texas. "All power corrupts, and ultimate power corrupts uiltimately" is a wise saying.
Posted by Tom at 4:32 AM | Comments (6) | TrackBack (0)
It's lonely being a Texans fan in Austin
The Houston Texans recent improved play is not being noticed yet in Austin, at least according to this letter from a local Austin television programing director to Texans fan Brian over at Longhorn Law:
The last Texans game we aired (last Sunday) was tuned-in by just 21,000 households in Austin (a city with 589,000 households). By comparison, the Titans game we aired on Oct 8th (after Vince Young became quarterback) was watched by over 53,000 households (152% more football fan’s homes). At one point during that game there were as many as 68,000 households tuned in. It was the most-watched “early” game we’ve aired all season. Actually, that game was watched by more Austin fans than any Texans game we’ve aired going all the way back to October of last season - with two notable exceptions. The first is when the Texans played the Cowboys on October 15th (which you could expect to be highly watched) and the other, honestly, was when the Texans played the Titans on October 29th. [. . .]
So, where does all this leave us now? To try and answer that, we need to go back to the start. In the Texans’ first season KEYE aired every Texans game we could get our hands on. In the second season we did the same thing, no matter how bad the actual football games were, and in the third season we did it yet again. (No one could claim that KEYE hadn’t done its best to put Texans games on the air in Austin).In the fourth season, last year, we aired every Texans game we could - even after it was abundantly clear they would have their worst season to date. What was once just a steady flow of email to the station (questioning why the heck we were airing Texans games when there was much better competition) had become a roar that we simply could no longer ignore. In that season we aired every Texans game we could in August, September, October, and November. Our last Texans game was December 4th with just 15,000 households watching, and then we moved on to other games that had actual play-off implications. The very next non-Texans game we aired that year was tuned-in by almost 75,000 homes. In other words, we did the best we could do.
Hang in there, KEYE!
Posted by Tom at 4:05 AM | Comments (0) | TrackBack (0)
November 13, 2006
Gearing up already for the 2008 Ryder Cup
Paul Azinger was the choice earlier in the month to be the captain of the U.S. Ryder Cup team for the 2008 matches at Valhalla in Louisville, and Golf World's John Hawkins thinks it's a great choice:
In his prime as a player, Azinger was fiery but focused, a natural leader with the talent and disposition to excel in the Ryder Cup’s high-intensity atmosphere. In his second life as a TV analyst, the 1993 PGA champion has proven to be an independent thinker whose insights and observations are accentuated with a touch of redneck bravado. Azinger has long been one of my go-to guys in my years covering the PGA Tour. He speaks from the heart, doesn’t compromise his thoughts, and he shares anecdotes. He’s a fabulous source.
But Hawkins doesn't think choosing Azinger will make much of a difference in the outcome:
You’d have thought the ’04 rout at Oakland Hills would have brought the ’06 squad together, motivating them to perform at a level close to their potential. And with Lehman in charge, there was unity and camaraderie. There just wasn’t any chemistry—it’s a component that can’t be manufactured. I hope I’m wrong, but things are likely to get worse before they get better. European squads have gotten younger and deeper, and passion has become their most valuable weapon. Azinger is the perfect man to lead the Yanks, which leads me to wonder: Are certain groups, for whatever reasons, averse to being led?
Meanwhile, on the other side of the pond, it's good to see that the Scotsman's John Huggan is already getting the juices flowing:
Over the course of four Ryder Cups, the 46-year-old [Azinger] all but covered the playing and behavioural spectrum, from sublime to distasteful. Indeed, Azinger's whole career has been regularly blighted by doubts over his character amid accusations that his adherence to golf's rule-book is sometimes less than exemplary.
Hoo boy! Read the entire article. Then get ready to rumble.
Speaking of remarkable feats under intense pressure, Craig Kanada chipped in on each of the final two holes yesterday to win the Nationwide Championship held at the Houstonian Golf Club in the far southwest part of the Houston area and, in so doing, earning his PGA Tour card for 2007. Melanie Hauser provides this interesting story on Kanada's long quest to regain his Tour card.
Posted by Tom at 4:50 AM | Comments (1) | TrackBack (0)
The Blind Side of big-time college football
Last week, the resignation of my friend, Iowa State head football coach Dan McCarney, prompted this post reflecting on how the pressures of big-time college football prompted a resignation that is quite likely contrary to the long term ability of Iowa State to remain competitive in big-time college football. As if on cue, George Will, in this NY Times book review, provides his view on the new book by Michael Lewis of Moneyball fame, The Blind Side: Evolution of a Game.
In Moneyball, Lewis explored how the small-market Oakland Athletics were able to remain competitive against far richer clubs in Major League Baseball by emphasizing objective evaluation of players and, in so doing, introduced sabremetric statistical analysis to the general public. As Will notes, Lewis “is advancing a new genre of journalism that shows how market forces and economic reasoning shape the evolution of sports.” Lewis’s latest book involves big-time college football, which -- as noted earlier here -- has long been a means by which universities in the U.S. have compromised academic integrity to rent athletically-gifted young men to serve as cash cows for the institutions. As noted in my earlier post, the National Football League reaps the fruits (as if those teams really needed it) of an effectively free farm system that college football provides, while the vast majority of the universities -- including Iowa State -- either lose money or barely eke out a profit in their football programs.
Moreover, Lewis examines how the winds of change ripple down from the NFL to big-time college football and dictate the course of the college game. One case in point is Lawrence Taylor, who singlehandedly changed the nature of professional football by becoming the prototype of the huge, athletic and extraordinarily fast outside linebacker who could increase the pressure on the quarterback. At about the same time as Taylor was wreaking havoc on QB's, Bill Walsh's West Coast offense was spreading the field, which made it even more important for teams to find agile offensive linemen to block the likes of Taylor. Most important was to protect the QB's blind side, so the position of left offensive tackle increased in importance and, as a result, the position's economic value skyrocketed.
As demand increased in the NFL for the colleges to produce another kind of freak of nature to play what had been an obscure position but now was now one of the most important positions on the field, Lewis explains that the colleges were more than willing to compromise any notion of academic integrity to admit athletes who project to have the physical stature and talent to play the demanding left tackle position. In short, it's not just the star QB or running back who gets the royal treatment from the institutions in this day and age -- potential left tackles are now included, too. Lewis' book describes one of those freaks of nature, a freshman tackle at the University of Mississippi with an I.Q. of 80 who bounced from foster home to foster home as a youth.
Just as we should not be surprised that many folks enjoy betting illegally on college football, neither should we be shocked with the corruption in college football that Lewis examines in his book. One of my uncles who played SEC football during the late 1920's used to tell me how much money he was paid under the table even in those days. Moreover, there is no question that big-time college football -- even as corrupt as it is -- is a pretty darn entertaining form of corruption. As noted in my previous post, there is a model that would likely minimize the corruptive elements while not affecting the entertainment value of college football much, but it's going to take leadership and courage from the top of the educational institutions to promote and implement such reform.
Unfortunately, those considerations were not on the minds of the Iowa State administrators last week as they began figuring out how to replace a very good football coach who had just left one of the most difficult jobs in his profession. Similarly, my sense is University of Miami president Donna Shalala will not be contemplating those matters when she begins her search to replace Larry Coker later this month as head coach of one of the most storied programs in all of big-time college football. That seems to be the tunnel vision that is generated from the sponsorship of professional football by U.S. academic institutions.
Posted by Tom at 4:35 AM | Comments (0) | TrackBack (0)
2006 Weekly local football review
If I didn't know better, I'd think that the Texans (3-6) have the Jaguars' (5-4) number.
In a game that stands for the proposition that you don't have to play great offensively to win when the other team's QB plays poorly, the Texans took advantage of four Jaguar QB David Garrard interceptions and a stout defensive effort to win their third game of the season, two of which have been over the Jags. The win was the Texans' first road in almost two years and ended an NFL-leading 12 game losing streak in road games, The Texans mostly stunk offensively (306 yds total offense) , but they were at least well-balanced (148 yds rushing/158 yds passing) and most importantly, protected the football. Texans QB David Carr was knocked out with a sprained shoulder in the 4th quarter, but it did not look like a serious injury. The Texans now actually have a chance of stringing some wins together as their next four games are at home against the Bills (3-6), at the Jets (5-4) and Raiders (2-7), and at home against the Titans (2-7).
By the way, Chronicle sportswriter Richard Justice -- who is presumably paid to notice such things -- is just noticing that Texans kicker Kris Brown is not very good:
"K Kris Brown is becoming something of a concern. His miss of a 32-yard field goal late in the first half was his third miss in four games. He missed a more difficult kick, a 52-yarder, later in the game."
Uh, Earth to Richard, Earth to Richard -- Brown has been a concern for the past several seasons!
That huge sigh of exasperation that you hear is coming from the Bryan-College Station area.
After last week's frustrating one-point loss to Oklahoma, the Aggies (8-3, 4-3) lost this one on a short TD pass with 20 seconds left in the game after having a field goal attempt blocked just a minute earlier and after a stupid roughing-the-passer penalty helped extend the Cornhusker scoring drive. Inasmuch as the Ags had almost 450 yards of total offense on 288 yards passing and 155 yards rushing with no turnovers, they really should have won this one, but a generally uninspired first half performance put the Aggies in a 21-10 hole. Given the developments in Manhattan, KN on Saturday night, the Aggies final game against Texas looks more winnable than before, but the Aggies will need to win that one to avoid the ignominious invitation to a minor bowl game. As Kevin Sherrington reports, it's getting harder with each passing week to defend Coach Fran.
Kansas State 45 Texas Longhorns 42
The Horns (9-2, 6-1) run of good luck ran out in Manhattan on Saturday night as star QB Colt McCoy was injured and inexperienced backup QB Jevan Sneed was forced to play from a deep hole that was dug mostly by a leaky Horns defensive secondary. Two fumbles by the Horns' running backs and a blocked punt in a disastrous three minute stretch of the 3rd quarter didn't help, either. If McCoy's banged up shoulder does not heal in time for the Horns regular season finale against the Aggies, then a season that was headed for a BCS bowl game could end up in a cold Cotton Bowl in Dallas in January.
The Cougars (8-3, 6-1) clinched the Conference USA West Division championship with the win over the Ponies (5-5, 3-3) and can wrap up hosting the C-USA championship game on December 1 with a win at Memphis (1-9, 0-6) next Saturday. As usual, nothing comes easy for the Coogs, who went up 14-0 in the 1st quarter, only to go to sleep for the next quarter and a half to find themselves behind 24-14 at the half. However, behind the incomparable Anthony Alridge (225 yds on 14 carries; two 77 yd TD runs!) and resourceful senior QB Kevin Kolb, the Cougars outscored the Mustangs 23-3 in the 2nd half to put this one away. As noted last week, Alridge's phenomenal performance this season -- he is currently averaging 12.5 yds per carry (797 yards on 64 carries) -- is one of highlights of this college football season. Alridge has 8 TD runs this year the following yardages: 87, 77 (twice), 44, 29, 15, 14, and 3. Thus, one out of every eight carries is a TD and he averages taking it to the house from 46 yards. Too bad that his effort is utterly underpublicized because of the local media's abysmal coverage of the Cougar football program.
In another of the most remarkable stories of this college football season that the local media has largely ignored, the Rice Owls (5-5, 4-2) came within a game of bowl eligibility with a stirring double overtime victory over Tulsa (7-3, 5-2), which has had its once-promising season undermined by losses over the past two weeks to the Owls and the Houston Cougars. Although he probably has no chance because of the lack of publicity that the Owl program draws, first-year Rice head coach Todd Graham should be in the running for Coach of the Year honors for converting in less than a year a team based on an option-oriented ground game into an effective spread formation, pass-oriented team that has a chance of becoming the first Rice team to finish with a winning record since the 2001 team finished 8-4. The Owls conclude their season with home games the next two weekends against East Carolina (6-4, 5-2) and SMU (5-5, 3-3).
Posted by Tom at 4:09 AM | Comments (1) | TrackBack (0)
November 12, 2006
Re-evaluating the kickers
As noted in earlier posts here and here, Aaron Schatz is the lead author of Pro Football Prospectus 2006, which is an innovative effort to develop the same type of objective statistical framework for evaluating professional football players that Bill James and other sabermetricians have developed and refined for evaluation of Major League Baseball players.
In this provocative NY Sunday Times op-ed, Schatz suggests that NFL teams are using the wrong criteria when they pay a large amount to acquire or retain a field goal kicker who has made almost of all of his field goal attempts in the previous season. Schatz's argument is that a field goal kicker may have a "hot" season from time-to-time, but will almost always regress in the following season to his career success rate for field goals. On the other hand, Schatz notes that another key kicking statistic -- average kickoff distance -- shows far more consistency from season-to-season than field goal percentage. Kickoff distance is important because longer kickoffs generally give the team kicking off a better chance of pinning their opposition deep in their own territory, which reduces the risk of giving up touchdowns and field goals. A case in point is the Cardinals' Neil Rackers:
No kicker reflects the difference between field goals and kickoffs better than Neil Rackers of the Arizona Cardinals. Last season, Rackers set an N.F.L. record with 40 field goals, and led the league by converting 95 percent of his attempts. But in 2004, he connected on 76 percent of his attempts. This year, Rackers is even worse, making just 67 percent of his tries. His high-profile misses include a 40-yard attempt that probably would have completed an upset and handed the Chicago Bears their first loss of the season.Nonetheless, while his field-goal percentages have swung up and down over the past three seasons, Rackers has consistently ranked as one of the league’s premier kickoff men. He led the N.F.L. in average kickoff distance in 2004 and 2005, and is fifth in the league this year.
This disparity in consistency between field goals and kickoffs means that N.F.L. teams are generally signing and drafting kickers based on the wrong skills.
Posted by Tom at 7:42 AM | Comments (2) | TrackBack (0)
November 11, 2006
Saves you money!
In this column, Chronicle business columnist Loren Steffy profiles Gallery Furniture owner "Mattress Mac" Jim McIngvale, who transformed a run-down location on Houston's near northside over the past 20 years into a furniture sale and distribution center that generates over $100 million in annual revenues.
Everyone in Houston knows Mattress Mac because of the idiosyncratic television commercials in which he frenetically hawks his store's furniture and immediate delivery service, punctuated by his trademark "Gallery Furniture saves you money!" declaration. But under that playful exterior is a savvy businessman who has built an extraordinary business based on simple principles -- a broad selection, easy access, quick service and same-day delivery. In many ways, Mattress Mac's business success reflects why the Houston area is such a good incubator of new business. With low barriers to entry, no zoning, relatively few regulations and a public that prefers low prices and quick service to allegiance to brand name stores, Houston provided the perfect launching pad for Gallery Furniture's success.
Some folks look down their noses at Gallery Furniture, but I've always admired Mac's operation as an utterly unpretentious business that delivers its product and service in a remarkably efficient manner. Here is a case in point. On a Sunday evening late last summer, my wife mentioned to me that she had spent the previous Saturday afternoon trudging around furniture stores near our home with one of our sons unsuccessfully looking for an easy chair for one of our son's college apartment. Inasmuch as wandering around furniture stores is not how most young college-age men prefer to spend their Saturday afternoons, our son was a bit discouraged because they had not found anything within the price range that my wife and I had set.
It was about only 7 p.m., so I suggested that we make the half-hour drive down to Gallery Furniture to check out its selection. We arrived there at 7:45 p.m. and, immediately after we walked into the store, a salesperson was helping us browse through the huge selection of easy chairs. In less than a half hour, we had found a nice chair and it took us less then 10 minutes to pay for it and arrange for delivery of the chair to our home later than evening. We returned home by 9 p.m. and, promptly at 10:15 p.m., a van pulled up to deliver the chair. Thus, by the time our son returned home later that evening from a movie, he found his new chair sitting in our living room. He could not have been more pleased, particularly that he was not going to have to shop any further for a chair.
Although a broad selection and quick service are important components of Gallery Furniture's appeal, my wife and I caught a glimpse of the primary reason for the company's success as we were leaving the store that evening. At 8:30 p.m. on a late August Sunday evening, Jim McIngvale was at his store's front desk, helping customers and directing his sales staff. Regardless of what you think about Mac's style, it's hard not to admire that type of dedication to his company, even well after it has become a business juggernaut. Sometimes success in business is complicated, but Mattress Mac reminds us that, most of the time, it is quite simple.
Posted by Tom at 7:01 AM | Comments (2) | TrackBack (0)
November 10, 2006
Fastow singing like a canary
The NY Times' Alexei Barrionuevo provides this entertaining article on former Enron CFO Andrew Fastow's deposition in connection with the various civil lawsuits involving the demise of Enron.
Frankly, it's rather remarkable that anyone would be particularly interested in what Fastow might have to say or so gullible to believe anything that might come out of his mouth, but you know how such lawsuits go.
Posted by Tom at 7:37 AM | Comments (0) | TrackBack (1)
The Enron Task Force's extraordinary admission
Flying somewhat beneath the radar screen of the lynch mob that is fascinated with watching former Enron CEO Jeff Skilling imprisoned for the rest of his life is the case of former Enron Broadband executive, Kevin Howard. As you may recall, Howard was tried and convicted of five counts of conspiracy, wire fraud, and falsifying the books and records under extremely prejudicial circumstances at the end of the Lay-Skilling trial. Subsequent to Howard's conviction, however, the Fifth Circuit issued its decision in the Nigerian Barge case (see also here), which formed the basis of Howard's motion to vacate his conviction on all charges.
The Enron Task Force put off responding to Howard's motion to vacate for several weeks hoping that the Fifth Circuit might reconsider its Nigerian Barge decision. However, the Fifth Circuit recently declined to do so, so the Task Force was required to buck up and finally respond to Howard's motion. In an uncharacteristic moment of clarity, the Task Force essentially admits in its response that Howard's entire conviction must be vacated:
The United States concedes that under [the Fifth Circuit's Nigerian Barge decision] the conduct that forms the basis for Howard’s convictions on Counts One through Four does not fall within the honest services provision. Because a reviewing court cannot determine whether the jury relied on the honest services theory to convict Howard, his convictions on those counts must be vacated.
The Task Force's response goes on to argue unpersuasively that Howard's conviction on one count of falsifying Enron's books and records should not be vacated, but it's clear that the Task Force does not have much confidence in its position on that count. I will be surprised if U.S. District Judge Vanessa Gilmore does not throw out Howard's conviction on all counts.
Thus, the Task Force's response underscores what I have been saying for almost three years now. The true criminal activity in regard to the Enron was limited to former CFO Andrew Fastow and a few of his close associates -- such as Ben Glisan and Michael Kopper -- who effectively embezzled millions from Enron. As with Jeff Skilling, Kevin Howard didn't embezzle a dime from Enron and was simply trying to do the best job he could of preserving value in Enron Broadband under difficult market conditions. Violation of honest services charges are supposed to address the situation where an executive takes a kickback or a bribe from a third party in violation of his fiduciary duty to his company. In Howard's case -- as with the case agaisnt Jeff Skilling -- the Task Force simply used those inapplicable charges as a means to appeal to juror resentment against anything having to do with Enron to obtain a conviction.
As the Fifth Circuit panel observed in its decision in the Nigerian Barge case, if you start from the premise that a defendant is guilty of a crime, then it's far easier to conclude that the defendant is guilty of the crime. It's far tougher to prove it honestly.
Posted by Tom at 5:24 AM | Comments (1) | TrackBack (0)
A good football coach steps down
Dan McCarney, the "dean" of the Big 12 Conference football coaches, resigned under pressure on Wednesday as head football coach at Iowa State University after 12 seasons. The announcement barely made a blip in the local Houston media, but Coach Mac's resignation highlighted many aspects of the troubling direction of major college football, a topic that has also been touched on here, here, here and here.
I am biased about Coach McCarney, who is called Coach Mac by most everyone. As regular readers of this blog know (see here and here), Coach Mac and I have been friends since growing up together in Iowa City, Iowa, where we played together on City High School's championship football team in 1970. I moved to Houston with my family shortly after finishing high school and Mac went on to play football at the University of Iowa in Iowa City, but we remained in contact over the years as I went to law school and began a legal career in Houston and Mac went on to the Iowa coaching staff after graduating from undergraduate school. When Hayden Fry was hired to revive the downtrodden Iowa program in 1979, Coach Mac was one of the only coaches who Coach Fry retained from the previous coaching staff. As with most of Coach Fry's personnel decisions, retaining Coach Mac was a good one.
For the following decade, Coach Mac was a part of an extraordinary Iowa coaching staff that not only revived Iowa's football fortunes, but also produced such outstanding head coaches as Wisconsin's Barry Alvarez, Oklahoma's Bob Stoops, Kansas State's Bill Snyder, Iowa's Kirk Ferentz and South Florida's Jim Leavitt. In 1990, Coach Mac followed Alvarez to Wisconsin, where they took over a 2-9 Badger program and, by 1993, had the team winning the Big Ten Conference championship with a 10-1-1 record, which included a Rose Bowl victory over UCLA. The next year, Iowa State came calling for Coach Mac and the native Iowan was off to Ames for his first head coaching job.
Over the years, Mac and I have laughed many times about the fact that neither of us really had a clue of what he was getting into at Iowa State. We both knew that the university had long been a coaching graveyard and had eeked out a barely-winning record only a couple of times in the previous 15 years. Ames is nice little college town, but it is in north central Iowa, pretty much in the middle of nowhere in the opinion of most good college football players. As a result, the football program has always struggled to attract good football prospects, who usually have sexier alternatives to living in central Iowa for four years. The physical facilities of Iowa State's football program were poor and the entire football budget at the time was just over $3 million, which was by far the smallest of any public school in the then newly-constituted Big 12 Conference that included such far better-funded programs as Texas, Texas A&M, Oklahoma, and Nebraska, just to name a few. To make matters worse, Iowa State was a clear second fiddle in the state of Iowa to the University of Iowa, which has a far superior football tradition and an athletic budget more than twice as large as Iowa State's. Most folks assume that Kansas State was the toughest head coaching job in the United States before Bill Snyder resurrected it in the 1990's, but I think a good case can be made that the Iowa State job was even more difficult before Coach Mac took over.
To Mac and Iowa State's credit, they agreed at the outset that turning Iowa State's program around was going to be a long-term project. As he did at Iowa and Wisconsin, Mac literally threw himself into the job of rebuilding the Cyclone football program, taking on any speaking engagement and going anywhere to promote Iowa State and its athletic teams. An outstanding recruiter, Mac and his coaching staff began to expand Iowa State's traditional Midwestern recruiting base to such football hotbeds as Texas, Florida and California. Mac began to challenge Iowa's traditional toehold on the best recruits in the state of Iowa. The progress was slow, though -- Mac's teams lost 42 or their 57 games during his first five seasons.
However, by the 2000 season, Mac and his staff had built a solid foundation for the program. Behind QB Sage Rosenfels (yes, the Texans' backup QB), Iowa State went 9-3 during that season and won the university's first post-season bowl game in the university's 108-year football history (over Pitt in the Insight.com Bowl in Tucson). That started a 40 game run where Mac's teams were 25-15, a remarkable feat considering that Iowa State was competing in the brutally-tough Big 12 Conference and playing tough Iowa each season (Mac's teams won six of their last nine games against their in-state rival). By the 2004 and 2005 seasons, Coach Mac had his teams on the cusp of the Big 12 North Division title both seasons only to lose them in an excrutiatingly close final game in each season. Nevertheless, after Iowa State had gone to only four bowl games in its history before Coach Mac's tenure, Mac took the Cyclones to five bowl games in six years, winning two of them. Coming into the 2006 season, optimism was high that the Cyclones would again contend for the Big 12 North Division championship and go to yet another bowl game.
Alas, the 2006 season did not turn out as planned. First, the Cyclones faced one of the toughest schedules in the country, including an initial stretch of Big 12 games at Texas, at home against Nebraska, at Oklahoma and at home against Texas Tech. Iowa State lost all four and were battered in the process, losing six senior starters to season-ending injury. Lack of depth is a chronic Achille's Heel at a place such as Iowa State, so a thin and deflated Cyclone team was smoked over the past two weeks by mediocre Kansas State and Kansas teams. That brought out the "what have you done for me lately" crowd in full force, many of whom were calling on Iowa State to fire Coach Mac despite the fact that few of them have any idea how difficult it is to win consistently at the top levels of major college football.
Suddenly, a little over a year after one of Mac's best wins as a coach, Mac concluded it was not right for him to become a divisive issue for the university. Understanding Spike Dykes' advice that "you lose 10% of your support each season" as a college football coach, Mac understood that he was 20% in the hole at Iowa State based on that formula. So, he elected to resign as head football coach at Iowa State, a difficult job that he would have gladly continued to perform for the rest of his coaching days. Take a moment to watch his performance during the press conference (click the video camera icon on the left side of the page) to announce his resignation -- Mac exudes the class and passion with which he handled all of his duties at Iowa State. In this age of cold-hearted and businesslike coaches who are constantly posturing for the "better" job, it is refreshing to watch someone such as Mac, who wears his big heart and humanity on his sleeve.
Thus, 12 years after arriving at Iowa State, Mac leaves the football program in far better shape than he found it. The football budget has quadrupled in size under Mac, but it remains the smallest of any public institution in the Big 12 Conference (Texas and A&M's football budgets are at least 4 to 5 times larger than Iowa State's). Mac worked behind the scenes continually to improve Iowa State's facilities and they have improved substantially during his time there. However, Cyclone athletic department officials are now attempting to raise another $135 million for facilities upgrades in an effort to keep up with the seemingly endless arms race of major college football. In one of the more bizarre aspects of Mac's resignation, that imminent capital funds campaign was one of the key pressure points that prompted the resignation of the best fundraiser in the history of the Cyclone football program. So it goes in trying to keep up with the Joneses in the wacky world of college football.
After coaching the Iowa State team in its final two games this season, Mac will kick back for a few days, but then I suspect that he will back out looking for another opportunity. His motor is always running and he has a passionate love for coaching. Inasmuch as Mac is widely popular among his fellow coaches, I am confident that he will land on his feet.
However, I am not so sure about Iowa State. The institution is caught in the proverbial rat race of attempting to compete with far-better funded programs and the gap between Iowa State's resources and those of programs such as Texas and A&M are likely to get even larger. The pressure of that competition has now prompted Iowa State's administration to take what appears to be a huge risk that the program will decline from the solid foundation that Mac painstakingly built over the past 12 years.
Does Iowa State think that it is going to hire someone who will magically recruit better athletes to Ames than Mac? That's highly doubtful as Mac is one of the best recruiters in the business and Ames is always going to be a difficult sell to all but a few of the best football prospects. Does the institution think that it is going to hire someone who will coach better than Mac? Maybe, but Mac is a pretty darn good coach and how many more wins does Iowa State really believe it can achieve through slightly better coaching methods? And even Iowa State officials readily concede that it is highly unlikely that they will ever be able to find someone who can match Mac's tireless enthusiasm for promoting the institution and the football program.
The bottom line is that seasons such as the one that the Cyclones and Mac are enduring this season are inevitable at a program such as Iowa State's. That is one of the costs of attempting to compete with limited resources at the highest level of major college football. That's not a particularly pleasant reality, but it's dubious decision-making to take big risks based on an emotional reaction to a disappointing result that is inevitable. That appears to be precisely what Iowa State is doing in letting Mac get away. Wouldn't embracing a good coach who understands the institution's limitations and has competed effectively in spite of them be far less risky and much more likely to result in continued success?
Ironically, the Cyclone family now finds itself looking for a new head coach who has the depth and characteristics of . . . well, Dan McCarney. Iowa State will be extremely fortunate if they find one.
Posted by Tom at 4:44 AM | Comments (4) | TrackBack (0)
November 9, 2006
Why it's not a good idea to soak the energy companies
When you meet someone who doesn't quite get the correlation between high energy company profits and the capital-intensive nature of oil and gas production, pass along this NY Times article to them:
As oil consumption grows and access to most oil-rich regions becomes increasingly restricted, companies are venturing farther out to sea, drilling deeper than ever in their quest for energy. The next oil frontier — and the next great challenge for oil explorers — lies below 10,000 feet of water, through five miles of hard rock, thick salt and tightly packed sands.“It’s not a place for the timid,” said Paul K. Siegele, the vice president for deepwater exploration at Chevron, which commissioned a survey by the Neptune. “It’s a place where a lot of people have lost their shirts.”
To picture the challenge, imagine flying above New York City at 30,000 feet and aiming a drill tip the size of a coffee can at the pitcher’s mound in Yankee Stadium. Then imagine doing it in the dark, at $100 million a go.
Even after hitting pay dirt, it will take another decade and billions of dollars to transform oil from these ultra-deep reserves into gasoline. Some of the technology to pump the sludge from these depths, at these pressures and temperatures, has not yet been developed; only about a dozen ships can drill wells that deep, and no one knows for sure how much oil is down there.
While most people regard affordable and abundant supplies as an essential element of the nation’s prosperity, few realize how complex and costly the quest has become, even in the nation’s own backyard. At the same time, some experts argue that the industry is nearing the limits of what it can do to maintain a growing supply of fossil fuels.
Amen. Read the entire article.
Posted by Tom at 4:53 AM | Comments (0) | TrackBack (0)
The Best Vegas Sports Book
In late 1980, I helped my friend, prominent criminal defense lawyer David Chesnoff, move to Las Vegas. Inasmuch as it was the first trip to Vegas for either of us, Dave and I ventured on to the Strip and quickly discovered the Stardust Casino's venerable Sports Book. For a couple of single young lawyers with a little bit of money and a lifelong interest in sports and betting, Dave and I thought we had died and gone to Heaven.
Over the years, the Stardust's Sports Book has been surpassed by bigger and glitzier sports books at the newer Vegas hotels and casinos. Nevertheless, it was with a touch of sadness that I read this fine Jeff Haney/Las Vegas Sun article on the closing of the Stardust's Sports Book last week. Interestingly, the success of the Stardust's Sports Book was based on a fundamentally sound business principle -- hire the most competent people available and then let'em rip:
The secret of the Stardust's success, [Scotty Schettler, the boss of the Stardust sports book from 1983 to 1991] said, lay in the skill of its oddsmakers. They not only could create point spreads with uncanny accuracy, but also set betting limits - higher than most, but not unmanageable - with precision."We were a true 'book joint,' " Schettler said. "We knew the limits we could get away with that would give us the maximum amount of action laying 11-10 both ways." [. . .]
For six years in a row, the book never sustained a losing month, Schettler said.
"The other guys said the Stardust was lucky," Schettler said. "I say it was skill."
A bookmaker in his native western Pennsylvania as a teen, Schettler held others from that part of the nation in high esteem.
"I hired all guys from back East," he said. "Kansas City was the furthest west I ever hired anybody from. They were bookmakers - no suits and ties."
What a place. There is nothing quite like the feeling of nailing and collecting on a three-game parley for the first time. Thank you, Stardust. Rest in peace.
Posted by Tom at 4:34 AM | Comments (1) | TrackBack (0)
Rumblings from Aggieland
It's not been a pleasant week in Aggieland.
As noted in Monday's weekly local football report, Aggie head coach Dennis Franchione made several dubious decisions late in last Saturday night's 17-16 loss to the Oklahoma Sooners. In particular, Aggies everywhere are wondering why Coach Fran decided to have Aggie QB Stephen McGee -- who was passing poorly in the game anyway -- throw a pass on 3rd and goal at the Sooners 2 yard line late in the game down 17-10 rather than simply hand the ball to the Aggies 275 lbs RB, Javorskie Lane on 3rd down and even 4th down, if necessary. After McGee was forced to throw the ball away under heavy pressure on the 3rd down play, Coach Fran settled for one of the most unpopular field goals in the history of Aggieland on 4th down.
Well, all of that went over about like the proverbial turd in the punch bowl in Aggieland and reopened the lingering doubts that many Aggie fans have about Coach Fran from last year's disastrous season (see here and here). It was in that volatile environment that Coach Fran faced media questions on Tuesday about his decision, and this is what he had to say:
"Hindsight is always easy, and you certainly rethink everything that you do in situations. We wouldn't have called the play on third down that we called if we didn't think it was going to work.""Well, a lot of those [short yardage plays in which Lane has been successful] are not on the 2-yard line where defenses are bunched down as close as they are. A lot of them are in the field in a little bit different situations."
Apparently, Coach Fran was unaware of the fact that Lane had previously carried the ball on 3rd & 4th downs this season 27 times, resulting in 18 first downs and 6 TD's. In other words, an 89% success rate. Moreover, Lane has not been stopped short of a 1st down on 3rd or 4th down in the Ags' last seven games, including all six of the Aggies' Big 12 conference games. On 16 of his 18 successful 1st down conversions, Lane has run for more yardage than needed to make the 1st down.
In light of these facts, the rabid Aggie fans -- who were not pleased with the call to begin with -- are livid now.
With tough games looming at home against Nebraska and at Austin against Texas, the Aggies are squarely facing a potential three game losing streak to close the regular season and a minor bowl game, which will not sit well with most of the Aggie fan base. Win one of the next two games and the Ags will finish 9-3 and probably head to San Diego's Holiday Bowl, which most Aggies would consider a reasonably successful season given last year's disastrous season. Win both games and the Ags would finish 10-2 and head to the Cotton Bowl, which no one could complain about. Regardless of whether the Aggies win either of their next two games, my sense is that Coach Fran is safe for at least one more season. However, if the Aggies get blown out in both of those games -- not likely for a team that is only five points away from being undefeated -- then all bets are off.
Posted by Tom at 4:24 AM | Comments (0) | TrackBack (0)
November 8, 2006
They play for keeps at the Country Music Awards Show
One does get the impression from the video below that country-music singer Faith Hill does not believe that former American Idol Carrie Underwood should have received the Best Female Country Singer Award at Monday Night's Country Music Awards Show in Nashville.
The Hill-McGraw public relations machine was in full gear afterward.
Posted by Tom at 5:30 AM | Comments (0) | TrackBack (0)
Checking in down at the Stros farm
The all-consuming football season in Texas tends to blot out news on virtually any other sporting front, but the fall is also an important period for development purposes in professional baseball. And with the Stros currently trolling the expensive free agent market for some desperately-needed hitting and better left-handed relief pitching, a couple of top prospects are turning heads this fall.
Baseball Prospectus' Joe Sheehan likes what he sees ($) in the Arizona Fall League from Stros pitching prospect Troy Patton, who played last season at A Lexington and AA Corpus Christi:
The Astros’ Troy Patton looked very good in two shutout innings. He has been a starter his whole career, but he looks like he could be a lefty reliever for the ‘Stros—who have struggled to find one over the years—as early as this spring. He's not just a specialist; he has four pitches, including a very effective change-up according to [Jason Grey, author of the AFL Scouting Guide] Grey. His size—a slight 6-1—and his slider may doom him to a limited role, but he’s capable of much more. Ron Villone comes to mind.
Goodness knows that it's high time that the Stros quit rolling the dice on situational lefties out of the bullpen such as Mike Gallo and Trevor Miller.
But even more importantly, Sheehan reports that one of the most impressive players in the Arizona Fall League was Stros OF prospect Hunter Pence, who tore up the Texas League last season at AA Corpus:
[Brewers No. #1 prospect Ryan] Braun was the #2 name on everyone’s lips over the weekend. The guy at #1 is Hunter Pence, the Astros’ outfield prospect who left the league just before I arrived. Even with his short stay, Pence impressed everyone who saw him, being named the top position player by Jason Grey of fantasybaseball.com in his AFL Scouting Guide. Pence is an older prospect—he was 23 last year in the Texas League—and given the Astros’ fluid corner outfield situation, he could push for a job in Houston as early as this spring. Eric Byrnes was a popular comp, but I think a right-handed Rusty Greer works better.
If Pence could perform as well as Rusty Greer (149 RCAA/.387 OBA/.478 SLG/.865 OPS), the Stros would take that in a minute and rejoice. Baseball America's Chris Kline has more on Pence ($):
"A lot of people look at the guy and have no idea this guy hit 60 home runs over the last two years," a scout from an American League said. "He's ridiculous. There are plenty of (scouts) that look at him, see his approach and break him down negatively because he's anything but textbook, but the guy gets it done . . . with big-time power."And above-average speed as well. In addition to those 59 homers, Pence stole a career-high 17 bags in 21 attempts for the Hooks. His approach might not be prototypical, but really, there is nothing prototypical about his game.
As he waits in the on-deck circle, he swings--non-stop. But the swing itself is the interesting thing. Pence wears only one batting glove in an era when it's hip to wear both and becoming more and more rare to wear none. He croutches down in his 6-foot-4 frame and uses a low, compact swing he repeats over and over, swinging at least four times before stepping into the batter’s box.
The bottom line is Pence might look just plain strange--and even he knows it. He wears his socks high, and is slightly bowlegged. But again, he gets it done.
"Like everyone says that I choke up and it's weird--everybody makes fun of me, even my mom," Pence said. "It's comfortable for me and that's the way I've always played. I'm not Captain Cool by any means. I just try to go out and play hard, do my job, have fun and help the team win."
So far this fall, Pence is hitting .362 AVG/.403 OBA/.603 SLG with three homers and 11 RBIs in 58 at-bats for Mesa. But everyone knew he could hit--it's his defense that has opened a lot of eyes this fall.
"He's the best guy out here right now," Solar Sox manager Pat Listach said. "There is nothing that screams fundamentals as far as hitting goes, but his defense has been outstanding." [. . .]
. . . Pence is playing strictly center and right field in the Arizona Fall League, getting good jumps, taking good routes to balls and turning in the occasional highlight-reel play. [. . .]
One scout compares Pence to major league outfielder Eric Byrnes for his unorthodox approach at the plate, his speed and the way he plays from day-to-day.
"This is a guy who has that undeniable energy," the scout said. "He's got that different approach, but to me, he's a bigger, stronger version of Byrnes who will hit for more power and give you some defensive versatility in the outfield.
"For me, he can play all three spots, with enough arm strength and power to be a legitimate everyday right fielder. But he's also showed enough burst and range to play center if you need him there. He's proven he can do a little bit of everything defensively--he's no longer a liability. He's a big league quality outfielder."
Making the jump from AA to the Major Leagues is an iffy proposition (see Willy Taveras), so don't expect Pence to make the Stros' this coming season. But based on his performance in the fall league, the Stros will now give him every opportunity to make the big league club in spring training. And regardless of whether he makes it onto the Stros' roster this fall, Pence's development is a big deal for the Stros, whose farm system has not produced an above-average Major League hitter since Morgan Ensberg in 2003 and not generated a really good hitter since Lance Berkman in 2000. Trying to find good hitters on the Major League free agent market is expensive, so Pence may just be the Stros' best alternative as they try to find that elusive, hard-hitting corner outfielder who can push them back into the MLB playoffs next season.
Posted by Tom at 4:46 AM | Comments (0) | TrackBack (0)
Perverting Justice
An organization called Perverted Justice -- a so-called "Internet Watch" group -- goes around the country and induces men to correspond with what they think are minor boys via email, instant messenging and chat rooms. However, the minor boys are really Perverted Justice operatives, who then turn over the evidence of solicitation to police authorities while notifying the news media about the impending arrest of the men for soliciting sex over the Internet with people they thought were underage boys. In turn, the police enjoy the publicity and allow the news media to tag along to video the arrest for the 10 o'clock news.
This past Sunday, a well-regarded 56-year old prosecutor, Louis Conradt, Jr.. of the North Texas town of Terrell killed himself as the police were knocking on his door to arrest him in a Perverted Justice-inspired sting operation. Of course, a Dateline NBC camera crew was outside Conradt's house when Conradt killed himself.
Although there is forensic computer evidence that Conradt had communicated over the Internet with other minor boys, there is no evidence that he had ever actually met any of the boys. Conradt clearly needed help for a personal problem, but that therapy did not include having a camera crew show up on his front porch to film the most humiliating moment of his life. What Conradt did is shameful, but what Perverted Justice, the police and the Dateline NBC reporters did to Conradt is much worse than the crime that they contend that their actions are attempting to deter.
Posted by Tom at 4:09 AM | Comments (3) | TrackBack (0)
November 7, 2006
The Accidental AG
GQ interviews former Attorney General John Ashcroft and it's an interesting read. For example, the following is Ashcroft's explanation on how he got into politics:
The way my life unfolded would have required the kind of vision that could make a man rich overnight. I mean, look at my career. I started out as a teacher. After five and a half years, the congressman from my district decides he’s resigning, so I decide to go and sign up. I couldn’t even name the counties in the district, but I said, “Well, I’m going to make an American election out of this.” So I go out with more naïveté than you could get in two dump trucks and a coal train. And it turns out that there are two other kooks—I put myself in the category—who also sign up. So it becomes a four-man primary, and I lose. But little did I know that in losing, I’d get the attention of the man who was being elected governor, Kit Bond, and his election would mean he vacated his position as state auditor, so he would appoint me to replace him. Now, if I had figured that out in advance, you would think that this is a guy whose counsel I should seek, because he can see around corners. But that’s the story of my life.
In another part of the interview, Ashcroft talks about one of his weaknesses:
You mentioned public outreach as a failure. What other failures did you have?Oh, my gosh. How much time do you have? One thing, I’m too hasty to make decisions. Sometimes I think that I’m so right that I don’t need to consider things carefully. That’s when I have to be very careful. One good thing about the Justice Department is that there are lots of bright people. I mean, where they’re used to flyspecking: “Not so fast there.” “And on the other hand.” “Have you thought about this?” I staged meetings just for that purpose—to guard against my own propensity to make a snap judgment.
H'mm. Looks as if someone missed the "have you thought this through" meeting on the Justice Department's decision to prosecute Arthur Andersen out of business.
Posted by Tom at 4:46 AM | Comments (2) | TrackBack (0)
Houston's hot real estate market
While many U.S. real estate markets are cooling off, this Wall Street Journal ($) article reports that the Houston real estate market continues to march forward:
This sprawling city missed the real-estate boom that sent home prices soaring on the East and West coasts. Now, with much of the nation's housing market in retreat, it has yet to feel even a tremor.In September, local sales of single-family homes and condominiums were up 17.7% from a year earlier, logging their 32nd straight month of increase, according to the Houston Association of Realtors. The median price of an existing single-family home: $143,400, up 3%.
By contrast, nationwide sales of residential real estate fell 14.2% in September, according to the National Association of Realtors. Home prices nationally were down 2.2%, retreating in such former hot spots such as Washington, Boston and San Francisco. The national median sales price for September for existing single-family homes was $219,800, according to the Houston Association of Realtors.
Houston's gains are nothing like those seen in the past decade in the Northeast and California, but that may be the secret to Houston's success and the reason a bubble is unlikely to develop here. Land here is abundant, and the city has some of the least-restrictive land-use and construction rules in the nation. Those factors help supply to keep pace with demand and keep prices within reach of a broad range of potential buyers."We haven't had a bad year in the past decade," says Lorraine Abercrombie, chairwoman of the local Realtors group and marketing director for Greenwood King Properties.
Houston's model is in stark contrast to cities such as Boston and San Francisco, which have strict zoning, exacting building codes and laws governing historical preservation. Some economists, including Edward Glaeser of Harvard University, say excessive regulation in such cities has slowed construction to the point where demand has outstripped supply, fueling a run-up in home prices.
In the once-sizzling markets where home prices are falling, housing costs are double, triple or even quadruple those of Houston. The danger, says Dr. Glaeser, is such places have priced out today's highly skilled "knowledge workers," forcing them to live in a more affordable locale where their contribution to the economy might not be as great. "These are places where only the elite can live," Dr. Glaeser says.
Not so Houston. Confined by neither oceans nor mountains, the Houston metropolitan area has plenty of room to spread out. What is more, the city has no zoning, weak historical-preservation rules and few tools to preserve open space.
University of Houston economics professor Bart Smith is Houston's leading expert on the local economy, and he has made the point for years that Houston's energy-based economy has traditionally been countercyclical to the national economy. This characteristic has lessened over the past 20 years or so as the local economy diversified in light of the relatively low energy prices over much of that period. But the the continued strong local real estate market indicates that at least certain Houston markets remain countercyclical to U.S. markets generally even though Houston's overall economy now tends to track the national economy to a much greater extend than in the past.
Posted by Tom at 4:32 AM | Comments (1) | TrackBack (0)
To vote or not to vote
It's Election Day 2006, and Houston's foremost political Charles Kuffner passes along that the Texas Secretary of State is predicting that only 36 percent of the registered voters in Texas will cast ballots.
On first impression, such a small turnout seems pretty pathetic.
But on second thought, Greg Mankiw explains why maybe that's not such a bad thing.
Nonetheless, I hope you vote in the election.
Posted by Tom at 4:30 AM | Comments (0) | TrackBack (0)
November 6, 2006
Finally, a plaintiff's case that tort reformers can love
Turnabout is fair play as this Third Circuit decision holds that the plaintiffs in a settled asbestos class action can pursue a class action against their lawyers for breach of fiduciary duty. The theory of the plaintiffs' case is that their former class action attorneys did not disclose to the plaintiffs fee arrangements that the lawyers routinely made with local counsel that allegedly led to lower settlement payments for the plaintiffs. Not the greatest theory in the world, but what the heck.
At any rate, a U.S. District Court declined to certify the class and granted summary judgment for the defendant plaintiff's lawyers, but a divided Third Circuit panel reversed and remanded on the grounds that the District Court used the wrong standard in evaluating the plaintiffs' claims. Thus, under applicable Texas law, the appellate court ruled that the plaintiffs' are entitled to proceed with their claims. As a result, a legal theory based on Texas law that tort reformers probably oppose is being used to pursue taking money out of the pockets of plaintiff's lawyers, which is certainly something that the tort reformers support. This is a great state, isn't it?
Hat tip to Robert Loblaw for the link to the Third Circuit decision.
Posted by Tom at 4:46 AM | Comments (0) | TrackBack (0)
Troubles in the pulpit
It was not a good week in the church business last week.
First, as this Findlaw article reports, the Baptist General Convention of Texas is trying to figure out what happened to $1.3 million that was raised to help start hundreds of churches in the Rio Grande Valley of Texas. Apparently, three pastors reported that they had started 258 churches in the Valley over the past decade, but only "five to 10" of those churches actually exist. Yup, those things happen even in the pulpit, folks.
Meanwhile, the Ted Haggard affair moved into the mainstream of the pre-election gamesmanship while distracting most from the real issue, which is the risk of elevating personality over worship within the megachurch movement in the U.S. (Ben Witherington has insightful comments on that issue here). The Richard Dawkins interview of Haggard below reveals that Haggard is indeed wound pretty tight, but my sense is that Dawkins does not come off looking any better than Haggard. I mean really. Why should Dawkins care that Haggard or his ilk talks to people about what Dawkins considers to be myths? Nobody is forcing these folks to go to church and it's not as if Dawkins suffers from a lack of forums in which to express his views. In that regard, here are the letters that Haggard and his wife Gayle wrote to the New Life Church congregation upon his removal from the church and which were read to the congregation yesterday. Gayle's letter includes the following observation, which is pretty remarkable under the circumstances:
For those of you who have been concerned that my marriage was so perfect I could not possibly relate to the women who are facing great difficulties, know that this will never again be the case.
Finally, from a far different and more civil time, Ann Althouse brings us this very clever interview between Woody Allen and Billy Graham. I particularly enjoyed Allen's answer to the question from the audience on his worst sin. Don't miss it.
Posted by Tom at 4:40 AM | Comments (3) | TrackBack (0)
2006 Weekly local football review
In a game that set offense back to the days prior to development of the T formation, the Giants (6-2) hung on to beat the Texans (2-6) as neither team could muster 300 yards total offense. About the only good thing about Texans QB David Carr's 5.7 yds per pass was that it was better than Giants QB Eli Manning's 5.6 yds per pass. The Texans actually had a shot at winning the game late in the 4th quarter when FB Jameel Cook coughed up a fumble after catching a short pass at the Giants' 35 yard line. That was the Texans' only turnover in the game, but the margin of error is pretty thin when the offense can only muster 250 total offense. The Texans travel to Jacksonville next Sunday for what could be an ugly revenge game with the Jaguars (5-3) before returning home for a winnable game the following Sunday against the Bills (3-5).
There was good news and bad news about Texas A&M's (8-2, 4-2) loss in its big game on Saturday night against the Oklahoma Sooners (7-2, 4-1). The good news is that the Aggies generated over 200 yards rushing against a solid OU defense in almost beating the Sooners.
I'll leave the bad news to Mike Finger's column about the game in the San Antonio Express-News, which begins with the following:
Bob Stoops smiled as he approached his adversary at midfield, then put his arm around Dennis Franchione and whispered a few words of encouragement into his ear.This is what all good gamblers do.
They always make sure the suckers keep coming back for more.
If Saturday night's showdown at Kyle Field was a poker game, Stoops was the seasoned card shark who knew exactly when to take the risk that would make his opponent flinch. And Fran was the sweaty-palmed mark who came so close to going all-in before losing his nerve.
Coach Fran's teams are now 1-11 in games against key Big 12 rivals Texas, Texas Tech, Oklahoma, and Nebraska, 14-16 in Big 12 play, and 4-14 against ranked opponents (wins coming against #25 Clemson ('04), #15 Okie State ('04), #25 Texas Tech ('04), & #19 Mizzou ('06)). The Cornhuskers (7-3, 4-2) invade College Station this Saturday and, if the Ags can't figure out how to throw the ball effectively against a top flight defense, then it's likely they will be 1-12 against the above-mentioned Big 12 rivals going into their day after Thanksgiving game against the Longhorns (9-1, 6-0) in Austin.
Suffice it to say that's not what Aggie boosters thought they were buying when they bought out Coach Fran's Alabama contract back in 2003.
In a battle for the Conference USA West Division lead, the Cougars (7-3, 5-1) utilized their usual balanced and difficult-to-defend offense while coming up with an unusually inspired defensive performance in cruising to victory before a raucous Homecoming crowd of 23,500 at Robertson Stadium. The Coogs put this one away by taking the lead with a long scoring drive immediately before halftime and then by coming out and tacking on another TD with the opening drive of the 3rd quarter. Although not well-known because of the Cougars' somewhat neglected stature on the local sports scene, Houston's Anthony Alridge -- a 5'9", 170 lbs. WR/RB sprinter -- is currently averaging 11.2 yards per carry on his 51 carries this season and is the most exciting Cougar player that I've seen since bowling ball RB Chuck Weatherspoon averaged over 9 yards a carry during the Run 'N Shoot days of the late 1980's and early 90's. The Coogs now go on the road at SMU (4-4, 2-2) and Memphis (0-4,1-7) to finish the regular season and, if the Coogs' defense can hold together for those two games, Houston has a good chance to host the C-USA championship game in early December.
Texas Longhorns 36 Oklahoma State 10
Perfectly-named Colt McCoy threw for a career-high 346 yards and three TD's in setting a Texas single-season record for touchdown passes with 27 and keeping the Longhorns in the middle of the race to meet either Michigan or Ohio State in the BCS championship game. The Horns go on the road next Saturday night to meet Kansas State (6-4, 3-3) before taking a week off before their big game against the Aggies on the day after Thanksgiving.
The Owls (4-5, 3-2) continue to make my early season optimism about their prospects look good as they broke out to a 30-10 halftime lead against UTEP (4-5, 2-3) and held on for another win in Head Coach Todd Graham's increasingly successful first season. The bottom line on the Owls is that QB Chase Clement, RB Quinton Smith and WR Jarett Dillard are really good and give the Owls a decent shot of winning games in which their defense is not overwhelmed by the opposition's offense. The Owls have a tough game next week at Tulsa (7-2, 4-2), and then close the season at home against East Carolina (5-4, 4-2) and SMU (5-4, 3-2).
Posted by Tom at 4:36 AM | Comments (0) | TrackBack (0)
November 5, 2006
The Hubble Telescope Picture Archive
After more than a decade of fascinating discoveries and pictures, the Hubble Space Telescope got some good news last week -- NASA announced a Space Shuttle mission to repair and upgrade the observatory, which will be the fifth servicing mission for the Hubble.
Take a moment to review this fascinating archive of 100 of the best Hubble pictures and marvel at this wonderful conduit to viewing the universe.
Posted by Tom at 4:35 AM | Comments (0) | TrackBack (0)
November 4, 2006
The 2006-07 Houston Rockets
After a rather uninspiring effort against Utah on the road to start the season, the Houston Rockets open their 2006-07 home schedule tonight at Toyota Center against the Dallas Mavericks.
As noted here and here, the Rockets have performed poorly for the better part of a decade now and have been far surpassed during that time by Texas' two other NBA teams, the San Antonio Spurs and the Dallas Mavericks. After waiting too long to do so, Rockets' owner Les Alexander finally hired some new blood earlier this year for the Rockets' front office in the person of Daryl Morey, who is effectively taking over this year for longtime Rockets GM, Carroll Dawson. As this Wall Street Journal ($) profile explains, Morey represents a new wave of NBA executives who base their player evaluations primarily on statistical analysis of a player's contributions to his team's performance.
The early indications of Morey's effect on the Rockets are positive. The roster has been re-tooled since last season's disappointing 34-48 record, and such NBA experts as the Wages of Wins bloggers believe that the Rockets are primed for a good season, albeit still below the Spurs and the Mavs. Given the Rockets' decade of deterioration, I remain skeptical that the team will be much better than a .500 club this season -- the team still has glaring holes at power forward and point guard, which will result in rebounding and turnover problems. However, there is no doubt that Yao Ming, Tracy McGrady, Bonzi Wells and Shane Battier are a solid core of key players that is capable of turning the Rockets into a playoff-caliber team once the latter two players are integrated into the team's style of play. I will take the under on the current over/under of 46 wins, but it will not be shocking if this Rockets team surpasses 50 wins if Yao and McGrady are reasonably healthy and can play for 70 games or so.
Just don't expect the Rockets to have a better record than either the Spurs or the Mavs.
Posted by Tom at 4:38 AM | Comments (2) | TrackBack (0)
November 3, 2006
Berkowitz cashes in
So, as Peter Lattman reports, most recent Enron Task Force director Sean Berkowitz is the latest in a long line of former Task Force prosecutors who parleyed prosecuting unpopular Enron executives into a more lucrative career than government work. Berkowitz led the team that obtained convictions against Jeff Skilling and Ken Lay, but his main attribute as the Task Force director is that he was not as bad as his predecessor, Andrew Weissmann, who was primarily responsible for the economic and human carnage of putting Arthur Andersen out of business and of sending four Merrill Lynch executives to prison for over a year before their utterly unjust convictions were vacated and, in one case, reversed.
However, one interesting item about Berkowitz arose shortly after the Lay-Skilling trial when the New York Magazine reported that Berkowitz was having a whirlwind romance with Bethany McLean, the co-author of the original Enron expose', Smartest Guys in the Room. Inasmuch as McLean had covered the trial for Fortune magazine, both Berkowitz and McLean were careful to state publicly that they didn't start dating until after the conclusion of the trial. However, several reporters who covered the trial confided to me after the romance became public that they had suspected something was up between the two during the trial because of how chummy they had become.
All of which reminded me of something that occurred at an early stage of the Lay-Skilling trial. Taking a page from this earlier post that criticized the Wall Street Journal's coverage of the trial, lead Skilling lawyer Daniel Petrocelli sent a letter to the Fortune editor pointing out the rather clear conflict of interest that McLean and her Smartest Guys co-author, Peter Elkind, had in covering a trial in which they had a vested interest in the outcome. As this Talk News Biz post relates (the entire letter, published by Fortune on March 2, is here, but you have to scroll down), Petrocelli noted as follows:
“It is ironic that so much of Elkind and McLean’s criticism of Enron has been based on their claimed outrage about a confict of interest at Enron. These two have an obvious financial interest in having the trial — or at least the public’s perception of the trial — turn out consistent with the one-sided and ultimately cartoonish depiction of Enron and my client in their book and in the so-called documentary to which they have lent their names and other support.”
To which the Fortune Editor -- presumably not yet aware of the budding Berkowitz-McLean relationship -- replied self-righteously as follows:
“Peter Elkind and Bethany McLean are journalists of the highest reputation, as well known for their integrity as they are for their knowledge of Enron. While they have certainly chronicled the failings of the company and its management, they have neither a rooting interest nor a financial interest in the outcome of the trial.”
Posted by Tom at 4:40 AM | Comments (2) | TrackBack (0)
Eliot Spitzer, the bully
Given this record of criminalizing business interests for political gain, it's not surprising that New York's next governor was stacking the deck to obtain convictions in a number of his prosecutions. This David Hechler/Law.com article reports the ugly news:
Like the U.S. Department of Justice, New York state Attorney General Eliot Spitzer has also pressured companies to stop paying the legal fees of employees who face criminal charges. Spitzer appears to be the only state AG who has raised fee payment as an issue. [. . .]Most of Spitzer's targets are financial institutions swept up in his probe of mutual funds. According to a Corporate Counsel review of 17 agreements that Spitzer's office struck with companies accused of market timing, nine settlements included "no indemnification" clauses. These provisions prohibit a business from paying the legal fees of indicted employees unless its bylaws require it. In one instance, Bank of America Corp. agreed to a no-indemnification clause even though its bylaws require it to pay fees. Moreover, the bank had already begun advancing expenses in at least one case.
Spitzer's office declined to comment on the no-indemnification clauses. (Spitzer is running for governor of New York.)
And remember that case involving the Bank of America executive? That would be the Theodore Sihpol case (see also here):
One corporate defense attorney who challenged Spitzer on fee payments is C. Evan Stewart of New York's Zuckerman Spaeder. Stewart represents former Bank of America financial adviser Theodore Sihpol III, who was indicted by Spitzer's office in 2004. Though Bank of America's bylaws required it to pay its employees' legal fees, Stewart says he had to sue the company to force the issue.According to Sihpol's complaint, filed in Delaware Chancery Court in 2003, his attorney was told by a Bank of America lawyer that it had decided to "cooperate fully" with Spitzer's office, and any "request for advancement of [legal] expenses by Mr. Sihpol would be vetted with the attorney general." After the bank's lawyers submitted a written request to Spitzer's office, they later told Sihpol that expenses would not be advanced. But shortly before the suit was scheduled to go to trial, Bank of America agreed to pay.
In Stewart's view, the denial of fees is "fundamentally a denial of due process." He explains, "You're taking away the ability of people to defend themselves." A lawyer for Bank of America did not respond to a request for comment. In July 2005 a Manhattan jury acquitted Sihpol on 29 of 33 charges, deadlocking on the others. Three months later, the AG dropped those charges too.
By the way, if you want to see what happens when the government muscles a company to breach its usual policy of paying the defense costs of one of its junior executives charged with a crime, then see the sad case of Jamie Olis.
On one hand, New York voters are going to elect Spitzer as their new governor next week. On the other hand, New York officials are already searching for answers why businesses are fleeing New York for more favorable locations elsewhere. Spitzer's shameful pandering to the public's resentment of wealthy business executives may be good for him politically, but it's poor politics generally. If he continues the same policies as governor, then Eliot Spitzer will cost New York jobs and wealth, which are two things that he has never had to worry about.
Posted by Tom at 4:33 AM | Comments (0) | TrackBack (0)
Hit of the Year?
When your team is getting hammered 44-0, it must feel good to lay the wood in the way that Minnesota's Dominic Jones did to Ohio State's Ray Small last Saturday (see video below). It's the hit of the year.
Posted by Tom at 4:30 AM | Comments (1) | TrackBack (0)
November 2, 2006
Professor Podgor on the trial penalty
As noted in this prior post, one of the most perverse elements of the government's criminalization of business in the post-Enron era has been the trial penalty -- that is, the substantially longer prison sentences that executives face if they elect their Constitutional right to a trial instead of copping a plea bargain.
Over the past two years, Stetson Law Professor Ellen S. Podgor has been examining the trial penalty over at the White Collar Crime Prof Blog. In this Law.com op-ed, Professor Podgor analyzes the current landscape well:
Whether it be an individual or company, it is clear that those who play in the government's sandbox will be their friends and will reap enormous benefits through a sentence reduction or deferred prosecution. In contrast to the rewards received for cooperation, availing oneself of the constitutional right to trial by jury is an incredible gamble, with the stakes raised higher than ever before, as the sentencing guidelines provide for draconian sentences in white-collar cases. [. . .]The government needs cooperators to make their cases. Cooperators also provide a more efficient system that reduces the costs for a government prosecution. But when the risk of a conviction after trial is so distinct from that received for cooperating with the government, it diminishes the right to a trial by jury, an essential part of our constitutional democracy.
Justice Byron White, in the famed case of Duncan v. Louisiana, 391 U.S. 145 (1968) noted the importance of this right when he stated that "the right to trial by jury is granted to criminal defendants in order to prevent oppression by the government." Id. at 155.
We have to wonder whether this right is fully realized when so many individual defendants and companies are folding to government demands because of the high risk entailed in proceeding to trial.
Add in the willingness of prosecutors to scapegoat business executives and appeal to the resentment of most jurors toward wealthy executives, and you have an environment where gross injustices such as what happened to the Merrill Four in the Nigerian Barge case and the sad case of Jamie Olis, among others. Meanwhile, a serial liar such as Andy Fastow is rewarded, even when it is clear that he testified falsely (see also here) against Jeff Skilling and Ken Lay.
This is not the product of a rational criminal justice system.
Posted by Tom at 4:50 AM | Comments (0) | TrackBack (0)
Those all-important quart-sized bags
I swear, you can't make this stuff up. The Wall Street Journal's airline travel reporter Scott McCartney reports ($) (see McCartney's follow-up article here) about the Transportation Security Administration's latest campaign to make airline travel a complete and utter aggravation:
An airport security screener sat at a Dallas-Fort Worth International Airport checkpoint beside a plastic tub filled with small cans of shaving cream and tiny tubes of toothpaste.Were they contraband items that ran afoul of safety rules?
"No, people didn't have quart-size plastic bags," the Transportation Security Administration official said.
Where's Seinfeld when you need him? In a quintessential bureaucratic bedevilment, the TSA allows small bottles and tubes of liquids to be carried aboard airplanes only if they are enclosed in a quart-size, zip-top plastic bag. No gallon bags. No fold-over sandwich bags. Even if you have only one bottle on you, it must be carried in a quart-size, zip-top plastic bag. Screeners confiscate any nonconforming items or send travelers to ticket counters to check luggage.
That's just one of the frustrations travelers have found as TSA began implementing new rules on liquids last month and, in the eyes of some travelers, seemingly prohibited common sense. [. . .]
Either frustrated or confused by the new rules, or unable to squeeze all they need into a quart-size bag, passengers continue to check baggage at elevated rates, airlines say. And TSA is encouraging that for passengers who don't want to mess with quart zip-top bags.
All of this to reassure us that airline travel is safe from terrorists?
Posted by Tom at 4:23 AM | Comments (0) | TrackBack (0)
Gil Brandt on David Carr
Texans QB David Carr gets the NY Times treatment this week as the local team prepares to be hammered by the Giants this Sunday in the Meadowlands. Former Dallas Cowboy personnel director Gil Brandt, who knows a thing or two about evaluating football players, is quoted as making the following observation about Carr:
“I think maybe sometimes a guy doesn’t have the tenacity or is too nice a guy to really play to his capabilities,” Brandt said in a telephone interview. “He’s an enigma to me.”
That is football-speak for questioning whether Carr has the heart and leadership ability to be an above-average quarterback in the NFL. Based on what I saw last Sunday, Brandt is spot on in his observation about Carr. With each passing week, it is becoming clearer than Carr is not going to be as good an NFL quarterback as contemporaries such as the Saints' Drew Brees or the Bengals' Carson Palmer. Indeed, Carr is at a point where he must answer the question of whether he is a better QB than Sage Rosenfels.
Carr's defenders point to his salty NFL quarterback rating, which was 4th in the league going into last week's debacle against the Titans. However, the NFL's QB rating is about as misleading as batting average in baseball in terms of evaluating a player's true effectiveness. QB Score per play -- a far more accurate statistic for evaluating QB play developed by the folks over at the Wages of Wins blog -- reflects that Carr is nowhere near the top level of NFL QB's. When rushing, sacks, and fumbles are considered along with passing stats, then Carr was ranked only as the 19th best QB in the NFL going into the Titans game. Based on his disastrous game against the Titans last Sunday, Carr was ranked dead last in the NFL for the week in QB Score per play.
Just to underscore the misleading nature of the NFL's QB rating, after Carr’s horrific Week Eight effort, he barely dropped in the NFL QB rating -- from 4th to 6th. In comparison, QB Score per play ranks him 23rd among NFL signal-callers, which appears to be much closer to where Texans head coach Gary Kubiak is rating Carr.
I don't think that level of performance is what Bob McNair had in mind when he selected Carr as the Texans' first draft choice in 2002.
Posted by Tom at 4:03 AM | Comments (1) | TrackBack (0)
November 1, 2006
Smartest Guys in the Courtroom?
Peter Elkind of The Smartest Guys in the Room fame has now turned his sights toward class-action plaintiff's law firm, Milberg Weiss Bershad & Schulman (prior posts here). In this lengthy article (hat tip to Peter Lattman) entitled The law firm of Hubris Hypocrisy & Greed, Elkind uses his same irreverent Smartest Guys-style in telling the tale of how Milberg Weiss became a criminal defendant. For example, take Elkind's description of L.A. lawyer-entreprenuer, Seymour Lazar, who the government alleges took illegal kickbacks from Milberg Weiss:
When Lazar appeared in federal court in L.A. earlier this year after being charged with fraud, conspiracy, and obstruction of justice in the Milberg Weiss case, it seemed a miracle he was still alive. A small, wild-haired man, Lazar, now 79, sat in a wheelchair and listened to the proceedings with a hearing aid. Later court filings detailing his medical history - and asking for the charges to be dismissed because the stress of a trial was likely to kill him - reported that Lazar was suffering from congestive heart failure, diabetes, renal failure, high blood pressure, anemia, gout, strokes, a suppressed immune system, and cancer (in remission).Yet Lazar, who had pleaded not guilty, remained combative and defiant. He'd recently protested his innocence on the front page of the Wall Street Journal, declaring, "I swear, they treat me like an absolute thug. . . Who did I cheat? Did anybody get screwed?" While Milberg Weiss was insisting that it had no idea its "referral fees" were ending up with plaintiffs, Lazar admitted that Milberg had paid him. He simply argued that no one got harmed because the money came out of the law firm's pockets.
Seymour Lazar is a Great American Eccentric - a wily wheeler-dealer who hates wearing socks. He's retired from highly profitable careers in entertainment law, finance, and real estate. But that doesn't begin to do Lazar's history justice. During the 1950s he dated poet Maya Angelou; during the 1960s he served as manager for comedian Lenny Bruce and hung out with LSD guru Timothy Leary.In the bestselling book, Supermoney, "Adam Smith" memorialized Lazar as "Seymour the Head" - "formerly a respectable Los Angeles lawyer with a respectable wife and child, who discovered arbitrage, mind-blowing chemicals, and a new life style all at the same time." After years spent overseas, he settled in Palm Springs, where he made tens of millions speculating in desert real estate.
Lazar was litigious too. He sued his wealthy father's estate after being disinherited. He sued Donald Trump and Carl Icahn. In 1980, after Hertz charged him $11.15 for returning a rented Pontiac without filling the tank, he led class actions against rental-car companies. Whatever the motivation, this "feisty little prick," as he was described by one chronicler of the 1960s LSD scene, allegedly received $2.4 million in kickbacks for serving as a plaintiff (with his relatives) in about 70 Milberg cases dating back to 1981.
There is much more. Read the entire article.
Posted by Tom at 5:49 AM | Comments (0) | TrackBack (0)
Stros buyout Bags' contract
The Stros made official yesterday what had been expected for the past couple years -- the club did not pick up the option year on injured slugger Jeff Bagwell's contract. As noted earlier here, Bags is easily the best player in Stros franchise history and should be a shoo-in for the Baseball Hall of Fame.
Although most folks know that Bagwell was an extraordinary player, relatively few people realize that he was one of the best hitters in Major League Baseball history over the course of his career. As regular readers of this blog know, I believe that the statistic of runs created against average ("RCAA") is the best measure of a baseball player's hitting ability. RCAA is a Lee Sinins-developed statistic that focuses on the most important statistic in baseball for a hitter, which is creating runs to help the hitter's team score more than the other team. Whereas more commonly cited statistics such as batting average can be highly misleading regarding a hitter's true effectiveness, RCAA is particularly insightful in evaluating hitters because it focuses on the two most important things in winning baseball games for a hitter -- that is, creating runs and avoiding making outs.
RCAA computes the number of runs that a particular player creates for his team relative to the number of outs that he makes, and then compares that number of runs to the number (zero) that a hypothetical average hitter would create while using an equivalent number of outs. Inasmuch as the hypothetical average hitter's RCAA is always zero, a player can have either an RCAA that is a positive number -- which indicates he is an above average hitter -- or an RCAA that is a negative number, which means that he is below-average hitter.
Moreover, RCAA is also a valuable tool in evaluating hitting ability because it allows for comparison between hitters from different eras. Inasmuch as RCAA measures a player's hitting ability against that of an average player in the player's league for each particular season, a player's career RCAA measures how that hitter compared to an average hitter during the hitter's career. Thus, comparing RCAA of hitters from two different eras allows us to compare how those hitters produced relative to an average hitter in their particular era, whereas comparisons of other hitting statistics -- such as on-base average, slugging percentage, and batting average -- are often skewed between players of hitter-friendly eras (such as the past 15 year or so) versus players of pitcher-friendly eras, such as the late 1960's and early 70's.
A review of Bags' career using RCAA as a the measuring stick reflects his greatness. He has the 8th best career RCAA among National League hitters since 1900:
In addition to the foregoing, Bagwell holds the modern National League record for career RCAA by a 1B:
Finally, as noted several times before, Bags is far and away the career-leader in RCAA among Stros players, so much so that Lance Berkman is the only player in the Stros organization at this time who even has a chance of catching him:
In addition to his extraordinary hitting ability, Bags was an excellent baserunner and a superb defensive player until his shoulder injury restricted his ability to throw over the final three seasons of his career. In short, Jeff Bagwell was the entire package, and it will be a long time before the Houston Astros organization and its followers will ever enjoy a player of comparable ability. Bagwell's career statistics are below, a pdf of his stats is here and the abbreviations for the statistics are defined here.
Posted by Tom at 4:59 AM | Comments (0) | TrackBack (0)
All in the Family
Based on this article, it's safe to say that the family get-togethers of New Orleans Saints and former Austin Westlake High School quarterback Drew Brees aren't the stuff of a Norman Rockwell painting:
New Orleans Saints quarterback Drew Brees has asked his mother to stop using his picture in TV commercials touting her candidacy for a Texas appeals court."I think the major point here is that my mother is using me in a campaign, and I've made it known many times I don't want to be involved."
In commercials running on Austin stations, Mina Brees had been using a picture of her son in the uniform of his former team, the San Diego Chargers, to emphasize her ties to football.
"I think the major point here is that my mother is using me in a campaign, and I've made it known many times I don't want to be involved," Drew Brees said Monday.
Mina Brees, an Austin attorney, is running as a Democrat for a spot on Texas' 3rd Court of Appeals. She said replacement commercials that omit any mention of her son were taped last week and sent to stations on Friday.
She said she did not anticipate upsetting her son and that "everything in the ad was true."
She said her connection to football is relevant to her campaign because her father, a successful high school coach, used sports to teach her a strong work ethic that she would bring to the judicial bench.
Drew Brees, who won a state football championship with Westlake High School in suburban Austin, said he got no response from his mother when he first heard about the ads and called her to ask that she stop using them. His agent sent her a letter Oct. 20 threatening legal action, he said.
He called his relationship with his mother "nonexistent" after it crumbled six years ago when he refused to hire her as his agent.
Mina Brees said her son's allegations were a mischaracterization and that she had no intention of becoming his agent.
"I love Drew very much, and I'm very proud of him. But sometimes when people are following a career path, they change," she said.
Sounds as if Mrs. Brees and Marc O'Hair ought to get together and compare notes on child rearing.
Posted by Tom at 4:33 AM | Comments (1) | TrackBack (0)