< December 2007 | Main | February 2008 >

January 31, 2008

The stadium ruse

Something to think about in regard to the City of Houston's latest stadium boondoggle.

Skip Sauer over at The Sports Economist notes this Rick Eckstein op-ed on the myth of economic benefits from the public financing of sports stadiums:

. . . [M]y colleagues and I studied media coverage of 23 publicly financed stadium initiatives in 16 different cities, including Philadelphia. We found that the mainstream media in most of these cities is noticeably biased toward supporting publicly financed stadiums, which has a significant impact on the initiatives' success.

This bias usually takes the form of uncritically parroting stadium proponents' economic and social promises, quoting stadium supporters far more frequently than stadium opponents, overlooking the numerous objective academic studies on the topic, and failing to independently examine the multitude of failed stadium-centered promises throughout the country, especially those in oft-cited "success cities" such as Denver and Cleveland.

Meanwhile, Houston is bidding on another Super Bowl (XLVI in 2012). Get those yachts lined up, folks.

Posted by Tom at 12:10 AM | Comments (1) |

The wisdom of U.S. Presidential campaigns

Much is wrong with U.S. Presidential campaigns. They last much too long, are far too expensive and the rhetoric is mostly mind-numbing.

However, for all its faults, the messy process does have a way of eliminating the candidates that need to be weeded out (see also here and here).

By the way, Megan McArdle has the New York City perspective on Giuliani's withdrawal.

Posted by Tom at 12:05 AM | Comments (0) |

What time is it over there?

When I'm going to be involved in telephone conferences with folks overseas, I am constantly wondering what time of the day it is for them. This website helps me.

Posted by Tom at 12:00 AM | Comments (0) |

January 30, 2008

Arnold Kling's Medicare experience

As I've noted many times, EconLog's Arnold Kling is doing some of the best writing and thinking about health care and health care finance issues in the U.S. right now. In his latest TCS op-ed, Kling describes the care received recently by his elderly father (who sounds as if he should have been a patient of my late father) and observes:

Medicare is wonderful for relieving the elderly from the burden of worrying about health care expenses. By the same token, it is wonderful for relieving doctors of the burden of worrying about the elderly as customers. You get paid for understanding the billing system, not for understanding your patients.

Read the entire op-ed. An update post is here.

Posted by Tom at 12:10 AM | Comments (0) |

NASCAR golf?

This earlier post suggested a creative approach to generate interest for a PGA Tour golf tournament caught in the Tiger Chasm -- i.e., the neverland of golf tournaments that draw nowhere near the interest or publicity as the 15-18 golf tournaments that Tiger Woods plays in each year.

Along the same lines, Angry Golfer John Hawkins points out that chronic party-boy John Daly is creating a similar type of niche for tournaments that are willing to grant him an exemption to play. Daly has made the cut in just 18 of his last 67 PGA Tour events, is currently tied for 156th place on the money list and is 531st in the World Golf Rankings and, in three tournaments this year, has earned a total of $9,805:

I called several tournament heads last week to get a read on whether Daly's ability to sell tickets is worth the headache he has become. [Honda tournament director] Kennerly didn't return my phone call, but others were quick to reply, and there remains little doubt that Long John Seismograph moves the needle more than a hundred John Sendens. "It's a pretty easy decision for us," says Clair Peterson, who runs the John Deere Classic and already has extended Daly an offer to join the field in July.

"He's like Randy Moss," says another. "He's a freak, he can be a huge burden, but in terms of what he brings you, it's a very unique dynamic. The NASCAR crowd, whatever you want to call it, is why 80 to 90 percent of the events will give him an exemption if he's anywhere near the top 100."

Or 531st, which is where Daly currently resides in the World Ranking, as if the NASCAR gang really gives a Hooters how well their man has been playing or whether he'll ever contend again on the weekend. The recent face-saving contest between PGA Tour brass and Westchester CC reminds us that every sputtering, non-Tiger event is a possible endangered species. Perhaps 15 to 18 tournaments are in excellent health; the rest lack significance or sound economics.

Posted by Tom at 12:05 AM | Comments (0) |

The products of an entertaining form of corruption

Inasmuch as the corrupt sponsorship of big-time football and basketball by academic institutions is a common topic on this blog, the following articles caught my eye:

The Chronicle's Richard Justice surveys several of the ugly recent incidents in big-time college football and calls for higher ethical standards. However, he ignores the perverse incentives built into the highly-regulated system that promote the unethical behavior.

Meanwhile, one of the coaches who has been accused of being ethically-challenged -- former Texas Aggie coach Dennis Franchione -- turns out to be an over-achiever with an interesting story.

And how exactly is it that Rick Neuheisel was able to persuade UCLA to hire him as its new coach in the face of this curriculum vitae?

Look, June Jones, Rich Rodriguez, Franchione, Neuheisel and the other supposedly unethical coaches of the moment are not, on balance, any more unethical than the rest of us. They are simply the products of a highly-regulated system that creates all sorts of perverse incentives to act badly. Change those incentives and the coaches' behavior will change. A good start would be to quit paying the coaches the excess rents that should be paid to the players whose talents generate them.

Posted by Tom at 12:00 AM | Comments (1) |

January 29, 2008

The worst in Major League Baseball?

Sabermetrics Godfather Bill James coined the "Law of Competitive Balance" to explain the trend that teams that win in professional sports tend to slack off in the following year because team management doesn't work as hard, resists taking risks to make the team better, and generally thinks defensively.

For example, Stros management reacted to the club's playoff appearances in 2004-05 by rationalizing that "if we won with Ausmus and Everett in those seasons, then surely we can do it again next season." As a result, the Stros made minor changes to their roster over the past two seasons through free agency and continued a decade-long trend of failing to develop MLB-level players through their farm system. The Stros' decline over the last two seasons of the Biggio-Bagwell era (from 89-73 in 2005 to 73-89 in 2007) is powerful evidence of the validity of the Law of Competitive Balance.

Well, the chickens are really coming home to roost now as Baseball Prospectus has now deemed the Stros' farm system to be the worst in Major League Baseball ($):

The worst farm system in baseball has no top-tier talent, but plenty of older prospects.

[On the top players in the Stros system under the age of 25]: The fact that Pence is the only other player [other than minor leaguers] to qualify for this list, and that he does so by a mere few days, speaks volumes about just how sad the state of affairs is in Houston. The team's recent drafts have been downright laughable, and its once-fruitful Venezuelan pipeline has dried up, as other organizations had passed the Astros in Latin America in terms of committing resources. This is the worst organization in baseball, made even more dreadful by some early moves in the Ed Wade administration that merely upgrade the big-league squad from dreadful to bad. The future is very grim in Space City.

Here is how BP rates the Stros prospects:

Five-Star Prospects: None

Four-Star Prospects: 1. J.R. Towles, C

Three-Star Prospects: 2. Felipe Paulino, RHP; 3. Bud Norris, RHP

Two-Star Prospects: 4. Brad James, RHP; 5. Josh Flores, OF; 6. Chad Reineke, RHP; 7. Mitch Einertson, OF; 8. Eli Iorg, OF; 9. Jordan Parraz, OF; 10. Sergio Perez, RHP; 11. Collin DeLome, OF

What's particularly odd about all this is that the Stros built a consistent winner in the late 1990's and early part of this decade through their farm system, by developing the Venezuelan pipeline of young players, and picking up productive college players. But as noted earlier here, the Stros have drafted poorly this decade, which required the club to invest heavily in free agents to remain competitive. Not only is that approach expensive financially, it has had the additional impact of negatively affecting the Stros' drafts of young talent.

In three of the last five drafts, the Stros have lost their first-round pick as free-agent compensation. Inasmuch as the Stros have generally not offered arbitration to their own free agents, the Stros only once during that period have received bonus choices of their own. Meanwhile, the Stros have been unwilling to pay much over MLB's "slot" recommendations for draft picks. Accordingly, the combination of few bonus choices, lack of first-round picks and financial conservatism culminated in a particularly awful 2007 draft.

As a result of the Carlos Lee and Woody Williams free agent signings, the Stros didn't have a pick in the first two rounds of the 2007 draft. Then, by electing not to offer arbitration to three of their own Type A free agents (Aubrey Huff, Andy Pettitte and Russ Springer), the Stros lost the opportunity to collect three first-round picks and three supplemental first-rounders as compensation. The Stros thought they could sign their first two choices -- third baseman Derek Dietrich (3rd round) and righthander Brett Eibner of The Woodands (4th round) -- but the prospects ended up asking for more than "slot" money and wound up opting for college ball. Consequently, the Stros spent just a tad under $1.6 million on the 2007 draft, which was $3.6 million below the average of the other 29 MLB teams.

Meanwhile, the Stros Venezuelan pipeline largely dried up after former general manager Tim Purpura fired Andres Reiner, the former director of the Stros' Venezuelan scouting and development, who was instrumental in the Stros signing of Venequelan stars Bobby Abreu, Carlos Guillen, Richard Hidalgo and Johan Santana. New Stros General Manager Ed Wade has reorganized the club's scouting department and brought in former Brewers scout Bobby Heck to run it, but it's far too early at this point to assess whether those moves will stem the downturn in the Stros' farm system.

Frankly, absent a concerted effort to collect draft picks and do a better job of drafting players who are likely to opt for pro ball, I have my doubts that the Stros have done enough to turn around the decline in their farm system. Given how bad it is currently, that's a frightening thought for the future of the ballclub.

Posted by Tom at 12:10 AM | Comments (2) |

What's Fertitta's real plan for Landry's?

Given this experience, Landry's Restaurants CEO Tilman Fertitta's offer to take Landry's private in a deal valued at $1.3 billion is not particularly surprising.

But the question is this: Would Fertitta, who owns just under 40% of Landry's, actually prefer what Jim Crane didn't want?

Posted by Tom at 12:06 AM | Comments (0) |

Hillary Clinton's Inner Tracy Flick

Posted by Tom at 12:00 AM | Comments (2) |

January 28, 2008

The power of myths

A common topic on this blog has been the power of anti-business myths within American society. Take Enron, for example. We all know how the myth played out. Enron, which was one of the largest publicly-owned companies in the U.S., was really just an elaborate financial house of cards that a massive conspiracy hid from innocent and unsuspecting investors and employees. The Enron Myth is so widely accepted that otherwise intelligent people reject any notion of ambiguity or fair-minded analysis in addressing facts and issues that call the morality play into question. The primary dynamics by which the myth is perpetuated are scapegoating and resentment, which are common themes of almost every mainstream media report on Enron.

The mainstream media -- always quick to embrace a simple morality play with innocent victims and dastardly villains -- was not about to complicate the story by pointing out that the investors in Enron could have hedged their risk of loss by buying insurance quite similar to that which Enron developed in creating their wealth in the first place. Instead of attempting to examine and tell the nuanced story about what really happened at Enron, much of the mainstream media simply became a part of the mob that ultimately contributed to death of Ken Lay and hailed the barbaric 24 year sentence of Jeff Skilling. Ambitious prosecutors, given wide latitude to obtain convictions of key Enron executives regardless of the evidence, gladly took advantage of the firestorm of anti-Enron public opinion to lead the mob.

Consequently, as Wall Street continues to endure massive equity write-downs that dwarf the $1.1 billion non-recurring charge against earnings that triggered Enron's demise after the 3rd quarter of 2001, I was somewhat surprised to read this common sense analysis from NY Times columnist, David Brooks:

There is roughly a 100 percent chance that we’re going to spend much of this year talking about the subprime mortgage crisis, the financial markets and the worsening economy. The only question is which narrative is going to prevail, the Greed Narrative or the Ecology Narrative.

The Greed Narrative goes something like this: The financial markets are dominated by absurdly overpaid zillionaires. They invent complex financial instruments, like globally securitized subprime mortgages that few really understand. They dump these things onto the unsuspecting, sending destabilizing waves of money sloshing around the globe. Economies melt down. Regular people lose jobs and savings. Meanwhile, the financial insiders still get their obscene bonuses, rain or shine.

The morality of the Greed Narrative is straightforward. A small number of predators destabilize the economy and reap big bonuses. The financial system is fundamentally broken. Government should step in and control the malefactors of great wealth.

The Ecology Narrative is different. It starts with the premise that investors and borrowers cooperate and compete in a complex ecosystem. Everyone seeks wealth while minimizing risk. As Jim Manzi, a software entrepreneur who specializes in applied artificial intelligence, has noted, the chief tension in this ecosystem is between innovation and uncertainty. We could live in a safer world, but we’d have to forswear creativity. [. . .]

The Ecology Narrative is not morally satisfying. I wouldn’t bet on its popularity as a backlash against Wall Street and finance sweeps across a recession-haunted country. But the Ecology Narrative has one thing going for it. It happens to be true.

Along those same lines, this Landon Thomas/NY times story reports on how two Wall Street executives who were intimately involved in $34 billion in write-downs remain reasonably hot properties on the Wall Street employment market. The Greed Narrative apparently hasn't caught up with those two yet, either.

But not so fast. This NY Times article reports that New York attorney general Andrew Cuomo, who replaced Eliot Spitzer as the Lord of Regulation, is currently putting the squeeze on a company that analyzed the quality of home loans for investment banks to provide evidence to prosecutors that the banks had detailed information that they did not reveal to investors about subprime mortgage risk. So, maybe that Greed Narrative still has legs after all.

But for the final word, don't miss this Larry Ribstein post in which he exposes NY Times columnist Gretchen Morgenson's stubborn adherence to the Greed Narrative even when it is clear from the subject of the story (in this case, the troubles of retailer Sears) that the narrative doesn't fit. In short, Morgenson is not one to allow the facts to get in the way of spinning a Greed Narrative morality play.

Posted by Tom at 12:10 AM | Comments (0) |

The bus to Houston

Check out this interesting story of how a young woman's bus ride to Houston in the 1960's led to a better life. A redeeming quality of Houston is that it attracts folks who are looking to improve their lot in life. I hope that quality never changes.

Posted by Tom at 12:05 AM | Comments (2) |

The costs of prohibition

The nature of the problems that confront Texans and law enforcement officers who live near the Texas-Mexico border have been a frequent topic on this blog (see here, here, and here). Those problems are exacerbated by the archaic nature of U.S. drug laws (see here and here).

This must-read Scott Henson post does an excellent job of defining the parameters of the increasingly serious problems on the Texas-Mexico border.

No Country for Old Men may be fiction, but the story it tells is very real.

Posted by Tom at 12:00 AM | Comments (0) |

January 27, 2008

A truly frightening thought

It's been comforting that John Edwards' demagoguery has not generated the type of buzz and political support that would make him a top contender for the Democratic Party's presidential nomination. However, this Robert Novak/Rasmussen blurb ended my sense of comfort:

Illinois Democrats close to Sen. Barack Obama are quietly passing the word that John Edwards will be named attorney general in an Obama administration.

Installation at the Justice Department of multimillionaire trial lawyer Edwards would please not only the union leaders supporting him for president but organized labor in general. The unions relish the prospect of an unequivocal labor partisan as the nation's top legal officer.

What would an anti-business demagogue be like as attorney general? Here's a preview (another one here). That's not the way to encourage risk-taking for job and wealth creation.

Posted by Tom at 12:00 AM | Comments (1) |

January 26, 2008

Subprime sense

Cato Institute's Alan Reynolds passes along some interesting observations regarding his review of subprime mortgages (see previous posts here). Among them are the following:

Most current foreclosures are on prime mortgages, not subprime.

Half of subprime mortgages are fixed, not ARMs.

Most recent subprime loans were for refinancing, not buying. As appraised values on houses increased, many homeowners just borrowed on the phantom equity and spent it.

About 96% of all mortgages are paid on time. Of the remaining 4%, most are late, but not in default.

Much of the misinformation about mortgages in the mainstream media has come from the Center for Responsible Lending. That's the outfit that received large financial backing from John Paulson, who just made $3-4 billion by shorting mortgage-backed securities during the recent panic in the subprime securities market.

Posted by Tom at 12:00 AM | Comments (0) |

January 25, 2008

The Fastow notes

The big Enron-related news this week was the U.S. Supreme Court's refusal to hear the appeal of the Fifth Circuit's decision to dismiss securities fraud claims against several of Enron's banks (Ted Frank explains the decision). In light of the Supreme Court's recent Stoneridge decision, the denial of the Enron-related appeal was not surprising, although I agree with Larry Ribstein that the Supreme Court should have been clearer in defining the rule against holding third parties liable for another company's alleged securities fraud. Oh well.

Meanwhile, continuing to fly under the mainstream media's radar screen is the growing scandal relating to the Department of Justice's failure to turnover potentially exculpatory evidence to the defense teams in two major Enron-related criminal prosecutions (see previous posts here and here). The DOJ has a long legacy of misconduct in the Enron-related criminal cases that is mirrored by the mainstream media's myopia in ignoring it (see here, here, here and here).

This motion filed recently in the Enron-related Nigerian Barge criminal case describes the DOJ's non-disclosure of hundreds of pages of notes of FBI and DOJ interviews of Andrew Fastow, the former Enron CFO who was a key prosecution witness in the Lay-Skilling trial and a key figure in the Nigerian Barge trial.

Enron Task Force prosecutors withheld the notes of the Fastow interviews from the defense teams prior to the trials in the Lay-Skilling and Nigerian Barge cases. If the Fastow notes turn out to reflect that prosecutors withheld exculpatory evidence or induced Fastow to change his story over time, then that would be strong grounds for reversal of Skilling's conviction and dismissal of the remaining charges against the Merrill Lynch bankers in the Nigerian Barge case. The recent motion underscores the impact of the DOJ's non-disclosure of the Fastow notes in both trials:

The circumstances surrounding the debriefing of Andrew Fastow by the FBI are extraordinary and suspicious. Normally, when the FBI interviews a witness, it creates a 302 contemporaneously with each interview. Here, the government held scores of interviews with Mr. Fastow over 18 months, yet compiled only one composite 302—after apparently destroying any individual 302s or prior drafts of the composite 302 that were created. This does not comport with FBI policy and is highly unusual. . . . Skilling’s Opposition [to the United States’ Motion for Reconsideration by a Three-Judge Panel of Order Requiring it to Produce FBI Raw Notes] sheds light on this troubling and highly unusual practice:

One of Skilling’s claims on appeal is that the government impermissibly thwarted his ability to cross-examine Fastow. It did so by violating FBI policy and Brady, Giglio, and their progeny, inter alia, in (1) failing to prepare an FBI form 302 memoranda for each interview it conducted with Fastow; (b) scripting a 200-plus page “composite” Form 302 that masked inconsistencies, contradictions, and the evolution of Fastow’s story; (c) destroying all drafts of the composite 302s; and (d) refusing to provide Skilling with copies of the underlying raw notes from its more than 1,000 hours of interviews with Fastow.

Moreover, defense counsel in Barge I were never informed by the government that the FBI, contrary to its customary policy, had prepared only one composite 302, rather than a separate 302 for each Fastow interview. This troubling practice of compiling a single 302 to encompass thousands of hours of interviews with Fastow has effectively denied the defendants the benefit of gauging the evolution of Fastow’s story over time, and the shaping by the government of his story. It is not surprising that given these unusual circumstances, and the critical nature of Fastow’s involvement in Enron prosecutions, the Fifth Circuit took the unusual step of ordering the release of the Binders even before final briefing or oral argument in the Skilling appeal.

The motion goes on to describe the DOJ's continued resistance to turning over the Fastow notes, even in the face of the Fifth Circuit order to do so in the Skilling appeal and the DOJ's agreement to do so in open court in the Nigerian Barge case.

So, why is the mainstream media ignoring this scandal? Enron fatigue? Or does it not fit neatly into the media and prosecution-fueled myth that Enron was merely a financial house of cards that its managers knew would ultimately fail? Truth and justice doesn't depend on adherence with such a myth, now does it?

Posted by Tom at 12:10 AM | Comments (5) |

The vanishing primary care physicians

This earlier post on my internist's decision to adopt a concierge health care model for his practice noted that the economic crisis faced by most primary care physicians was one of the primary reasons for the change in his practice. In this recent post, Kevin Pho passes along the story of yet another internist hanging up the stethoscope as a result of not being able to make ends meet within the frazzled U.S. health care finance system:

"I am an Internist for over 20 years, and I recently closed my primary care practice as I cannot make a living at it. I made $23K in the last 11 months. And, my departure from practice is only the beginning of a tsunami of closures of primary care practices . . .

Primary care is unraveling around us. Indeed, all of the articles about the inordinate strain & crowding of emergency departments across the U.S., overlook the obvious - the impending failure of primary care is going to completely overwhelm emergency rooms. There is no way to prepare for this other than to save primary care.

The whole house of cards has begun to collapse, and all the articles and discussions fail to put it in terms with sufficient emphasis. All of the 'universal' systems that actually work are built on very strong and well-funded foundations of primary care. Everything else in health care is built upon that foundation, and that is precisely what is failing across the country. Why are emergency rooms overcrowded? Why are the wait times increasing even for the seriously ill? Because primary care is failing!

Just remember, I told you so."

And here is another primary care physician's analysis of why he turned to the concierge model.

Posted by Tom at 12:05 AM | Comments (1) |

Oh great!

The chronically-troubled airline industry is a common topic on this blog, as is the generally abysmal state of air travel. For good measure, this post by a former air traffic controller explains how air travel isn't particularly safe, either.

Just what I needed to know.

Posted by Tom at 12:00 AM | Comments (2) |

January 24, 2008

The latest boondoggle?

Anne Linehan, Kevin Whited and Cory Crow note this week's "are you kidding me?" moment from City Hall -- two Nancy Sarnoff/Chronicle articles reporting on the trial balloon that Mayor White floated about building a second large convention hotel in downtown Houston next to the George R. Brown Convention Center and the existing 1,200 room, city-owned Hilton Americas Hotel.

Another large downtown convention center hotel is surprising to anyone who has been following the Harris County government's fits and starts in regard to the proposed Astrodome hotel redevelopment project. However, Mayor White recently engineered the hiring of a new leader (Greg Ortale) for the local convention bureau and it looks as if the prospect of elevating Houston to the small tier of U.S. cities with adequate facilities to handle the largest conventions was part of the pitch in that hire.

Does building another big downtown hotel make sense? In and of itself, the answer is clearly no. Private equity interests have no interest in risking their money on such a project, just as they have no interest in doing the same in regard to the Astrodome hotel redevelopment. Thus, the deal only begins to make sense because of the prospect of public financing, which is how the City financed the first downtown convention center hotel.

Despite the lack of any meaningful analysis in the Sarnoff/Chronicle articles, the first hotel has been anything but an unqualified success. The Mayor suggests that the City spent $300 million on it (that seems way low to me) and that its presently worth "at least $350 million" (yeah, but who's buying?). There are a bunch of less risky investments that the City could have made with that $300 million that would have generated more than the speculative $50 million equity that Mayor White thinks the City has in the Hilton Americas.

But the larger question is whether the City ought to be in the business of building convention center hotels in the first place? As Cory points out, the rationale for the investment is that, with the larger number of convention center hotel rooms, Houston could compete with the small number of cities (Las Vegas, Orlando and San Antonio) for the really big conventions that need the concentrated mass of hotel rooms that only those cities offer. Although transit is an issue in getting from the downtown convention area to Houston's cultural areas and attractions, I can see how Houston would be a viable alternative to those other cities. For example, Houston's restaurants, theater district and museum district are better and more diverse than any of the other three alternatives. And Vegas is not every large convention's cup of tea.

But given the alternatives, is another large investment in a second convention center hotel really a prudent allocation of the City of Houston's financial resources? Here is where I have my doubts. As I've noted many times in regard to Houston's light rail boondoggle, allocating $300-$500 million on another downtown convention center hotel has real consequences, such as leaving inadequate resources to make improvements to Houston's infrastructure (flood control and fixing of traffic hotspots, to name just two) that would dramatically decrease the risk of death and property damage. Stated simply, does it make sense for the City to be investing that kind of money in a downtown convention hotel when convention attendees won't be able to get to it from Hobby Airport? The main drag to the Gulf Freeway and downtown from Hobby Airport -- Broadway Street -- is already virtually impassable during even moderate rainstorms.

Maybe taking a flyer on a second downtown convention center hotel would make more sense but for the billions blown on the light rail system. But the size of that boondoggle leaves a very small margin for error in regard to allocation of the City's remaining resources. At this point, a large investment in a second convention center hotel appears to fall well outside that small margin.

By the way, speaking of the Astrodome hotel project, it appears now that even Harris County officials believe that the deal is dead. However, the proposed alternative is to turn it into a horse barn?:

Meanwhile, there could be three or four groups prepared to present plans to transform the Dome.

The Houston Livestock Show and Rodeo may be one contender, said Leroy Shafer, the rodeo's chief operating officer. The rodeo and partners are looking into whether the Dome could serve as a replacement facility for aging Reliant Arena.

Astroturf and tiered stadium seats would give way to more than 1,000 horse stalls and an arena with a capacity of at least 6,000. The vast open area where former Astros stars Jimmy Wynn and Jeff Bagwell hit towering drives would be turned into a three-story exhibition and stalling space, Shafer said.

Posted by Tom at 12:10 AM | Comments (2) |

Have I got a deal for you

Bowie Bonds hit baseball. Or is this a case of a player having an IPO on himself? (H/T Alex Tabarrok)!

You have to give markets credit -- they have created a way for prospects to buy a form of insurance on their careers.

And, as usual, Larry Ribstein asks the essential legal question.

Posted by Tom at 12:05 AM | Comments (0) |

You think it's hard being a Houston sports fan?

As noted earlier here, it's not easy being a fan of Houston sports teams. But as difficult as that may be, it's nothing compared to the angst that long-suffering New York Jets fans are enduring as a result of having their two most-hated rivals in Super Bowl XLII:

Perhaps the only thing worse for Jets fans than watching their team finish 4-12 this season, is knowing the historic Feb. 3 matchup pits their big-brother co-tenants, the Giants, against Bill Belichick and the ever-villainous Patriots.

"I can't wait for this to be over," said [longtime Jets fan Ira] Lieberfarb, a 53-year-old auto-parts wholesaler and a regular caller on local sports-talk radio who attends virtually every Jets game, home and away. "Whichever team wins it, I'm going to suffer. I grew up in Sheepshead Bay getting abused by Giants fans and mostly everyone at my party will be Giants fans. I can't escape that. But I don't know a single Jets fan that could root for the Patriots and Belichick."

Which reminds me of the funny video below that chronicles the reaction of Jets fans to their team's horrible draft picks from over the years:

Posted by Tom at 12:00 AM | Comments (1) |

January 23, 2008

At least he's consistent

Well, at least Rudy Giuliani behaved consistently both before and after becoming Mayor of New York City (Reason's David Weigel also provides this interesting Giuliani piece along the same lines).

Having said that, I don't think that's the type of consistency that most reasoned folks want in a U.S. President.

Posted by Tom at 12:10 AM | Comments (1) |

Rating the recruiting classes

Now that the long college football season has finally ended, the more avid fans turn to the annual period of speculation (see previous posts here and here) as to where the top high school football players will end up playing college football. Along those lines, the Sunday Morning Quarterback blog provides this interesting post that attempts to correlate the top big-time college football programs' performance relative to the rating of their recruiting classes over the past several years.

The entire SMQB blog post is well worth reading and I don't want to give anything away, but let's just say that Texas A&M appears to have made the right decision after last season.

Posted by Tom at 12:00 AM | Comments (0) |

Advances in Islamic divorce law

Certain areas of Islamic law remain archaic. However, it appears that at least technological progress is being made in the area of Islamic divorce law.

Posted by Tom at 12:00 AM | Comments (0) |

January 22, 2008

Birds of a feather?

Perhaps coincidentally, I came across the following two news reports consecutively yesterday morning. First from this BBC article:

Venezuelan President Hugo Chavez has threatened to nationalise farms, in an effort to tackle food shortages.

Government controls keep food prices low in shops to help even the poorest Venezuelans feed themselves.

But some farmers prefer to sell their produce in neighbouring countries where prices are higher, leading to shortages of bread, milk, eggs and meat.

In his weekly television show, Mr Chavez said farmers doing this should have their farms "expropriated". [. . .]

On Saturday, Mr Chavez threatened to nationalise banks which did not give enough low-interest loans to farmers.

Banks are not allowed to charge farmers interest higher than 15% - even though inflation last year ran at 22.5%.

"The bank that fails to comply must be sanctioned, and I am not talking about a little fine," he said. "The bank that does not comply must be seized." [. . .]

Critics say complying with government policy could drive some businesses into bankruptcy.

Then, a little closer to home, came this NY Times article on Democratic Party Presidential candidate Hillary Clinton's views on government control of the economy:

Senator Hillary Rodham Clinton said that if she became president, the federal government would take a more active role in the economy to address what she called the excesses of the market and of the Bush administration.

. . . Mrs. Clinton put her emphasis on issues like inequality and the role of institutions like government, rather than market forces, in addressing them.

She said that economic excesses — including executive-pay packages she characterized as often “offensive” and “wrong” and a tax code that had become “so far out of whack” in favoring the wealthy — were holding down middle-class living standards. [. . .]

“If you go back and look at our history, we were most successful when we had that balance between an effective, vigorous government and a dynamic, appropriately regulated market,” Mrs. Clinton said. “And we have systematically diminished the role and the responsibility of our government, and we have watched our market become imbalanced.”

She added: “I want to get back to the appropriate balance of power between government and the market.” [. . .]

“We’ve done it in previous generations,” she said, alluding to large-scale public projects like the interstate highway system and the space program. “But we’ve got to have a plan.” [. . .]

“Inequality is growing,” Mrs. Clinton said. “The middle class is stalled. The American dream is premised on a growing economy where people are in a meritocracy and, if they’re willing to work hard, they will realize the fruits of their labor.”

So, on one hand, Chavez is demonstrating that, even with the economic benefit of having high-priced oil to export, a government can still lower the living standards of its citizens if it tries hard enough.

On the other hand, Hillary does not appear to recognize that her proposals are quite capable of accomplishing the same thing within the world's most dynamic economy.

Posted by Tom at 12:10 AM | Comments (0) |

Recommendation of the Day

I'm not sure exactly what it means, but it cannot be a good thing for the PGA Tour that the biggest news so far in the pre-Tiger Woods part of the season is the controversy over Golf Channel host Kelly Tilghman's poor attempt at humor a couple of weeks ago.

It's fair to say that Tilghman's comments were blown completely out of proportion. Tilghman by all accounts is a charming person and a good reporter, but she is placed in a position by the Golf Channel where she has to fill up hours of time over many weekends by making idle banter with her co-host, Nick Faldo. Few people this side of Letterman or Leno have the ability to make witty comments over such prolonged periods. If you don't believe it, then just listen to your local news anchor's banter with the weatherperson and sports anchor on the evening news. Consequently, it's hardly surprising that Tilghman made a mistake in judgment under the circumstances.

At any rate, the completely humiliated Tilghman apologized quickly and earnestly to Woods, who graciously accepted her apology and tried to play down the whole matter. Meanwhile, under pressure from the Al Sharpton's of the world, the Golf Channel probably overreacted a bit by suspending Tilghman from her Golf Channel duties for two weeks. But at least that seemed to be the end of the entire affair.

But not so fast. In a truly remarkable display of bad judgment, GolfWeek magazine ran a cover story about the Tilghman affair in last week's issue that contained a cover photograph of a hangman's noose. Amidst an immediate public outcry, the PGA Tour and several advertisers threatened to pull their accounts with Golfweek, prompting the magazine to fire its longtime editor and vice president, Dave Seanor. Ay, yi yi, yi, yi!

So, as all that dust settled, longtime PGA Tour and Senior PGA Tour member Jim Thorpe cut Tilghman some slack, but blasted Golfweek over this past weekend:

"We know there was no racist intent. It was just a bad choice of words,'' he said [with regard to Tilghman]. "But the guy from Golfweek? Let him get barbecued. That's just a major mistake on his part.''

Which leads us to the recommendation of the day from golf writer and blogger, Geoff Shackelford:

"Just a suggestion to the Golfweek staff: I would not put an image of Jim Thorpe barbecuing Dave Seanor on this week's cover."

Posted by Tom at 12:05 AM | Comments (0) |

The Thompson plan

Last week, Ironman over at Political Calculations reviewed the Giuliani income tax simplification plan. This week, he tackles the even more impressively simple tax simplification plan advocated by GOP Presidential candidate, Fred Thompson.

Of course, as if on cue, Thompson dropped out of the GOP race today.

Posted by Tom at 12:00 AM | Comments (0) |

January 21, 2008

The Civil War in Four Minutes

And to The Ashokan Farewell, no less!

Posted by Tom at 12:10 AM | Comments (2) |

The power of Twitter

On Dwight Silverman's recommendation, I've been checking out Twitter over the past couple of weeks and am impressed with it. Although people use it in different ways, Twitter is essentially a social networking and instant communication network. This interesting site called Twittervision provides a quick visual of Twitter's power and potential. Check out Twittervision and give Twitter a try.

Posted by Tom at 12:05 AM | Comments (0) |

Visual Medical Dictionary

This is quite interesting.

Posted by Tom at 12:00 AM | Comments (0) |

January 20, 2008

The improving conversation about PED's in baseball

As noted earlier here, the Mitchell Commission Report is a sloppy hatchet job. However, the report has had the beneficial impact of prompting more reasoned voices to emerge regarding the use of steroids and other performance enhancing drugs in professional baseball to offset the mainstream's media's typical demonization of the players. Here are a few examples:

Eric Walker's new website Steroids and Baseball is worth a look. Walker provides an interesting analysis of power hitting performance over the modern eras using a time series of power factor statistics. Based on putting the time series together at critical points where there is a change in the baseball or an interruption in personnel from a war, Walker shows that you get a series that does not show any meaningful increase in power hitting as measured by the power factor. Indeed, the power factor in the so-called steroid era is no higher than in other eras after subtracting the cumulative effects of changes in the baseball in preceding eras from the time series. In addition, Walker surveys research on the benefits and costs of steroids on athletic performance and health, and again concludes that the results are not all that clear. H/T Art DeVany.

Meanwhile, Radley Balko links to an article by sportswriter Dan Le Batard noting a point that I've frequently made in my prior posts on PED use in baseball -- the motivation behind the use was to improve the capacity of the user's body to hold up under the physically brutal and pathologically competitive nature of MLB. Balko concludes with the following wise advice:

At some point, athletes, rules makers, fans, and ethicists are going to have to drop the hysterics, and begin a serious conversation about all of this. Shaming, prison, and witch hunts aren’t going to make these issues go away.

Following up on Balko's thoughts, this Shawn Macomber/American Spectator article reports on a recent panel discussion over PED use in which Balko participated. Another participant in that panel discussion was Norman Fost, professor of pediatric medicine and director of the Program in Bioethics at the University of Wisconsin, who is the subject of this Chicago Tribune profile. Fost believes that steroids should be available, under a doctor's supervision, to any pro or amateur adult athlete who wants them:

In all the health and morality questions about steroids, Fost said: "It's as though the drug hysteria serves as a distraction from more serious issues. You'd be hard-pressed to find a single death associated with steroid use, yet the TV cameras keep showing [Red Sox manager] Terry Francona drooling disgusting spit from something [chewing tobacco] that has a very high cancer rate associated with it.

"You have 400,000 deaths a year due to tobacco and tens of thousands of alcohol-related deaths, a substance heavily promoted by Major League Baseball, yet the president and Congress and the press have virtually nothing to say about tobacco and alcohol in athletics, but lots to say about steroids. A football player spending more than three years in the NFL has an 80 to 90 percent chance, according to one study, of some permanent disability, but the NFL produces films focusing on the most vicious hits. The dangers to health in sports today come not from enhancement but the sport itself."

Similarly, Malcolm Gladwell builds on his earlier posts on the issue of PED's in baseball with two more posts (here and here) in which he notes the following:

It is perfectly legal for an athlete to undergo "performance enhancing" eye surgery, that moves him from, say, the 50th to the 95th percentile in sight. It is not legal for that same athlete to take "performance enhancing" hormones that move his testosterone from the 50th to the 95th percentile--even thought the additional advantage of the eye surgery may be greater than the additional advantage conferred by the exogenous testosterone. Now, there may be a perfectly valid distinction between those two interventions. But what is it? Shouldn't it be spelled out before we drum Roger Clemens and Barry Bonds out of the Hall of Fame?

Similarly, it is perfectly legal for an athlete to get painkillers after an injury, so he can continue playing (and, I would point out, risk further injury.) It is not legal for that athlete to take Human Growth Hormone, in order to speed his recovery from that same injury. Again, why? What is the distinction? Why is it okay to play hurt but not okay to try and not play hurt? There may be a perfectly valid reason here as well. But don't we need to spell out what it is?

I realize that the people running major league baseball and the NFL are not philosophers. But the intellectual sloppiness with which this current crusade has been conducted is appalling.

Indeed, last week's Congressional hearing over the Mitchell Report included an exchange toward the end that highlighted MLB's long tradition of indulging use of another type of PED -- amphetamines.

Moving on to the legal front, this Maury Brown blog post notes that Rusty Hardin -- whose strategy of defending Roger Clemens has been a head-scratcher from the beginning -- probably ought to quit giving interviews:

T.J. Quinn: Well, when someone sat and looked at just the numbers for Roger’s career, what conclusions do you think they drew?

Rusty Hardin: Oh, I think, I think they drew incredibly stupid inclusions—uh, conclusions, if they concluded that somehow you can look at his performance and it fits in. For instance, everybody talks about his, uh, doing it in order to extend his career. Think about it, T.J. The guy is supposed to have taken steroids in ‘98. In ‘97 he won the Cy Young. ‘98 he won the Cy Young.

T.J. Quinn: Brain McNamee’s—you know, his story was that Roger had already been taking steroids when he approached him in 1998, which would suggest…

Rusty Hardin: I didn’t remember that. You may—if you’re right about that, I didn’t know that.

T.J. Quinn: That’s what he said. That was in the Mitchell report and I think his lawyers addressed that as well, that Brian McNamee said, “I never suggested that Roger take them. He was taking them.” So that would—wouldn’t that explain…

Rusty Hardin: [OVERLAPPING] I never read that. Are you real sure of that?

T.J. Quinn: Quite.

And while many commentators are suggesting that Clemens' alleged PED use is unprovable beyond a reasonable doubt because it boils down to a swearing match between Clemens and his chief accuser, that is not a prudent bet to make. My experience is that lawsuits and investigations have a funny way of discovering people who have knowledge about swearing matches.

Finally, does anyone else get the impression that Houstonian Chuck Knoblauch may need the same type of mental block that he had while throwing a baseball from second to first base in regard to his upcoming Congressional testimony?

Posted by Tom at 12:05 AM | Comments (0) |

January 19, 2008

China Road

Clear Thinkers favorite James Fallows, who is currently working in China for The Atlantic, posts a recommendation for China Road (Random House 2007), a new book about China by NPR's long-time China correspondent Rob Gifford. Inasmuch as one of the best books that I read last year was Adrian Goldsworthy's extraordinary biography of Julius Caesar, Caesar: Life of a Colossus (Yale 2006), one passage from Gifford's book that Fallows includes in his blog post intrigued me, particularly given the West's difficulties over the centuries in maintaining normalized political relations with various Chinese governments:

Chairman Mao was just the most recent of a long line of re-unifiers, and if Emperor Qin were to return to China today, he would recognize the mode of government used by the Communist Party. I have to say that I find this idea rather scary, that two thousand years of history might have done nothing to change the political system of a country. Imagine a Europe today where the Roman Empire had never fallen, that still covered an area from England to North Africa and the Middle East and was run by one man based in Rome, backed by a large army. There you have, roughly, ancient and modern China. The fact that this setup has not changed, or been able to change, in two thousand years must also have huge implications for the question Can China ever change its political system.

Posted by Tom at 12:00 AM | Comments (0) |

January 18, 2008

On ham sandwiches and Texas Supreme Court Justices

The old saw is that a grand jury would indict a ham sandwich if asked to do so by the district attorney.

However, in Houston, a grand jury will indict a Texas Supreme Court Justice even if the DA doesn't ask it to do so.

As noted in this earlier post, Texas Supreme Court Justice David Medina, his wife and several family members have been in the cross-hairs of an arson investigation since their house and a couple of others in the neighborhood were damaged in a June 28, 2007 fire. A Harris County grand jury today indicted Justice Medina on a tampering charge and his wife on arson charges in connection with the fire.

However, in an unusual development (to say the least), the grand jury brought the indictment against the recommendation of the DA's office. Embattled Harris County District Attorney Chuck Rosenthal will request that the indictment be dismissed immediately because the DA's office has concluded that there is insufficient evidence to make a case that would withstand a defense motion for a directed verdict.

That's all well and good, but my question is this: If the DA's office knew going into the grand jury that they did not have sufficient evidence to make a case against Justice Medina, then why on earth did they bring the case before the grand jury at this time? Inquiring minds want to know.

Posted by Tom at 12:10 AM | Comments (4) |

Is the airline industry salvageable?

The chronically troubled airline industry has been a frequent topic on this blog over the years. Even as savvy an investor as Warren Buffett swore off investing in the airlines long ago. After a particularly distasteful experience in an airline investment back in the late 1980's, Buffett observed that if you calculated all of the airline industry's finances since the day the Wright Brothers flew the first plane at Kitty Hawk in 1903, you would discover that the airline industry has cumulatively not made a single penny of profit.

That led Mr. Buffett to suggest famously that, in hindsight, shooting down the Wright Brothers on that beach would have been a reasonable financial, if not moral, move.

However, Buffett's observations aside, when Larry Ribstein gets to the point where even he cannot figure out the structure of a solution to the mess of the airline industry, my sense is that this is an industry that is in serious trouble.

By the way, Professor Ribstein's feelings toward air travel these days are the same as mine.

Posted by Tom at 12:05 AM | Comments (0) |

Sizing up the Texans' needs

As At the beginning of the past two football seasons (here and here), I noted the trend of the blogosphere replacing the mainstream media as the more reliable and insightful source of information on the Houston Texans.

Now, as the Chronicle's Texans beat reporter writes about odd people who call into radio talk shows, Stephanie Stradley and Outlaw (see also here) size up the Texans' main personnel and coaching needs as the team enters the off-season.

As these posts reflect, the blogosphere is definitely rapping the knuckles of the Chronicle right now in the competition of providing meaningful information to the public about the Texans.

Posted by Tom at 12:00 AM | Comments (6) |

January 17, 2008

Signs of a dying regulatory scheme

Regular readers of this blog know that I believe the NCAA's regulation of big-time college sports is hopelessly corrupt, albeit an entertaining form of corruption (see previous posts here, here, here, here, here, here, here, here, and here).

That entertaining form of corruption is pretty valuable, too, as this Forbes List of the 20 Most Valuable College Basketball Programs reflects. And even at a top range of $25 million, the top basketball programs lag well behind the top football programs in value.

But one can only estimate how much these programs would be worth if they were unleashed from the obsolescent NCAA regulatory scheme. Particularly one that not only deprives its main income-generators from being paid their true value, but would open up an administrative investigation into an alleged regulatory violation involving a 97-year old icon:

Just before the start of this college basketball season, UCLA received a letter of inquiry from the NCAA, seeking information about possible illegal contact between a recruit and a person representing the interests of the university.

The recruit was Kevin Love, now the Bruins' star freshman center.

The person representing the interests of the university was [legendary 97-year old former UCLA coach] John Wooden.

The NCAA has not disclosed who made the complaint.

Love and his family visited Wooden during his recruiting trip. They had a nice chat, Wooden teased the Loves' young daughter, Emily, for being so quiet, and a nice time was had by all. [. . .]

. . . The NCAA, apparently shrugging off common sense and going with protocol, procedures and robot-ism, actually wrote a letter of inquiry to UCLA, requiring the school to investigate.

Posted by Tom at 12:05 AM | Comments (2) |

The fascinating "Flea"

Eric Turkewitz interviews Dr. Robert Lindeman, the Boston-based pediatrician who caused quite a stir last year when the Boston Globe broke the story that he was the anonymous blogger nicknamed "Flea" who was blogging a medical malpractice trial while participating as a defendant. One of Dr. Lindeman's answers even has a Houston twist:

A hypothetical question: You've been called for jury duty and the case involves a question of medical malpractice. What will you tell the attorneys during the jury selection process about your ability to sit impartially?

Answer: "I will tell them that Roger Clemens will admit to using performance-enhancing drugs before I will able to sit impartially on a malpractice jury."

Posted by Tom at 12:03 AM | Comments (0) |

Stoneridge redux

The blawgosphere's analysis has been extensive and insightful in regard to the Supreme Court's important decision Tuesday in Stoneridge Investment Partners v. Scientific-Atlanta (previous posts here), which upheld the Central Bank rule against holding third parties secondarily liable for damages for providing financing to a company that is found to have defrauded its investors. The Point of Law.com blog, which has been a leader in providing a forum for discussion of the issues in the case, provides links to many excellent commentators, including Professors Bainbridge and Ribstein, the latter of whom has this follow-up post to his initial one that is well worth reading.

Although the issues and policy implications involved in Stoneridge are easy to understand for those of us involved in business, it's interesting how many people who are not involved in business on a day-to-day basis have asked me about the case and why I think it's so important that the Central Bank rule be upheld. Why shouldn't the banks that facilitated a company defrauding its investors not have to contribute something into the compensation pot for the investors, they inquire?

I have found that directing the folks asking that question to the practical example presented in this earlier post usually does the trick in explaining why erosion of the Central Bank rule is a manifestly bad idea.

Posted by Tom at 12:00 AM | Comments (0) |

January 16, 2008

Texas' best golfer of the moment

There are only four PGA Tour players who have won a tournament in each of the past four seasons. Three of those four are easy picks -- Tiger Woods, Phil Mickelson and Vijay Singh. Who is the fourth?

None other than K.J. Choi of The Woodlands (previous post here), who just won his seventh PGA Tour event in the past eight seasons over the weekend. Choi now has over $17 million in career earnings.

Stu Mulligan over at Waggle Room makes the case that Choi has quietly become one of the elite PGA Tour players even though there is not any area of his game that stands out statistically in comparison to other Tour players. The tortoise still does beat the hare sometimes.

Posted by Tom at 12:05 AM | Comments (0) |

Becker on health care finance reform

Gary Becker proposes four common sense reforms for the American health care finance system, one of which is unassailable:

Eliminate the link between employment and the tax advantage of private health insurance. Since much of the spending on health are investments in human capital, there is good reason to exempt these expenditures, along with other investments, from income taxes. However, this employment link is inequitable because it does not provide the same tax advantages to families without employment-based insurance. It also encourages expensive employer health plans that have significant consumption components since the government picks up much of the cost of such coverage.

Posted by Tom at 12:02 AM | Comments (0) |

What's missing in the tax debate

Wouldn't it be nice if at least one of the Presidential candidates would embrace the basic reform that is really needed in the U.S. tax system? Simply simplification. Previous posts on tax simplification issues are here. Interestingly, one of my least favored Presidential candidates -- Rudy Giuliani -- has the best tax simplification proposal that I've seen so far during the campaign.

Posted by Tom at 12:00 AM | Comments (2) |

January 15, 2008

Re-evaluating boondoggles

Let me get this straight. Mayor White started out with a proposal several months ago to allow the local MLS soccer team to build a stadium at their own expense on downtown land that the City of Houston owned but was not using except for extra parking (previous posts here).

So, how did we get to the point where the City is now willing to pony up at least $20 million and exercise its eminent domain power to acquire land for the private owners of the team to build their stadium? Heck, we haven't even started to talk about who's going to pick up the tab for the cost of the necessary infrastructure improvements or how much "Central Planning Chief" Peter Brown's "mixed used development" ideas are going to cost (for the folly of such ventures, see here). By the way, Mr. Brown, what are the names of the other cities that are lining up to provide financing for a soccer stadium that makes you so sure that the Dynamo will leave if Houston doesn't provide it?

And to top it off, the proposed location of the proposed new stadium figures to increase the cost of an even larger boondoggle.

Granted, we're talking about throwing away "only" $20-30 million on this deal at this point. That's peanuts in comparison to what the City wastes annually on the light rail system. But the way this deal has developed leads one to question whether there is any adult supervision whatsoever down at City Hall? If it's acceptable to throw $20-30 million at a minor league soccer team, then what's next? $20-30 million for the Aeros?

Posted by Tom at 12:10 AM | Comments (3) |

A real train wreck

This LA Times op-ed by transit experts Jim Moore and Tom Rubin examining the LA area's MTA transit system over the past 20 years. They provide a daunting warning for those who rationalize the massive deficits of Houston's light rail system by contending that the system will become cost-efficient in the long run:

. . . the MTA has spent more than $11 billion since 1986 to build its rail network, and the effect has been to reduce total transit ridership on the system by more than 3 billion boardings. That's a bizarre result.

Shouldn't investments in transit infrastructure encourage, not discourage, transit use? So, why is Houston continuing to barrel down a path that LA has already shown is a poor way to invest in mass transit?

Posted by Tom at 12:07 AM | Comments (1) |

Trashing Tracy

Rockets star Tracy McGrady is not having a good season, which has prompted the inevitable local criticism that McGrady is an overrated player who is not "tough" enough to lead his team to success in the NBA playoffs.

On the other hand, Kobe Bryant is widely considered to be one of the best players in the NBA and far superior to McGrady. Ask your average Rockets fan whether they would trade McGrady for Bryant, most would approve the deal in the proverbial "New York minute."

So, statistician Dave Berri compares the careers of McGrady and Bryant. The result of his analysis may surprise you.

Hint -- peer effects make a big difference in basketball.

Posted by Tom at 12:05 AM | Comments (0) |

January 14, 2008

The rotting Enron criminal prosecutions

You won't read about it much in the mainstream media, but the Enron-related criminal prosecutions increasingly smell like a rotting carcass.

After Jeff Skilling was lynched by an angry mob, most of the mainstream business media moved on to other stories, such as various Wall Street firms taking write downs that are far in excess of the $1.1 billion in non-recurring 3rd quarter 2001 charges that began the media-fueled run on Enron that ended with the firm in bankruptcy and many of its executives in the cross-hairs of federal prosecutors. Contrary to public perception, this earlier post chronicled how the Enron Task Force's actual effort in proving Enron-related crimes was nowhere near as effective as its public relations campaign in demonizing the defendants in the Enron-related criminal cases.

To her credit, the Chronicle's Kristen Hays remains one of the few mainstream media reporters who is following up on the Enron-related prosecutions. In this recent article, Hayes reports on the oral argument at the Fifth Circuit Court of Appeals of the Department of Justice's attempt to salvage at least a smidgen of the dubious conviction that the Task Force obtained in 2006 against former Enron Broadband executive Kevin Howard. U.S. District Judge Vanessa Gilmore threw out the conviction based largely on the Fifth Circuit's prior decision in the Nigerian Barge case (see also here).

During oral argument on its appeal, the DOJ's "best" argument before the Fifth Circuit panel was that the prosecution should not have given Judge Gilmore a flawed jury instruction linking the one count that it contends should survive with the four counts that the DOJ concedes should be tossed out. As Hayes reports, "A skeptical [Fifth Circuit Judge Patrick E.] Higginbotham noted that the prosecution supported the instruction and nearly two years later on appeal is saying it shouldn't have been given."

As they say in appellate circles, that's not a good signal from the bench for the DOJ.

If the Fifth Circuit does as expected and denies the DOJ's appeal, then the DOJ will confront whether to try Howard for a third time on Enron-related charges. And given the DOJ's track record, I wouldn't put it past them.

Meanwhile, in a development that I didn't see picked up by any of the mainstream media, U.S. District Judge Ewing Werlein effectively put off the trial of former Merrill Lynch bankers Daniel Bayly and Robert Furst for a year or so by granting Bayly and Furst an interlocutory appeal of a part of his recent decision denying their motion to dismiss the DOJ's ongoing attempt to re-try them in the Nigerian Barge case. Judge Werlein's decision to grant the interlocutory appeal puts that re-trial off for the better part of a year, at least.

Finally, as this recent post noted, Skilling's defense team and the defense teams for the former Merrill bankers are currently sifting through the notes of FBI and Task Force interviews with former Enron CFO Andrew Fastow, who was a key witness in the Skilling trial and a key player in the Nigerian Barge trial. Inasmuch as Task Force attorneys withheld information from those interviews from both defense teams prior to the trials in both cases, if the notes of the Fastow interviews reflect that prosecutors withheld exculpatory evidence or induced Fastow to change his story over time, then that would be strong grounds for reversal of Skilling's conviction and dismissal of the remaining charges against the Merrill bankers. Stay tuned.

Quite a record of that Enron Task Force, eh?

Update: Larry Ribstein points out that these should have never been criminal cases in the first place.

Posted by Tom at 12:10 AM | Comments (2) |

Myths about oil are hard to dispel

Amidst the demagoguery of a U.S. Presidential campaign, it's rare to find the mainstream media willing to run Robert Bryce's common sense on energy policy and oil prices. For example:

Myth 3: Energy independence will let America choke off the flow of money to nasty countries.

Fans of energy independence argue that if the United States stops buying foreign energy, it will deny funds to petro-states such as Iran, Saudi Arabia and Hugo Chavez's Venezuela. But the world marketplace doesn't work like that. Oil is a global commodity. Its price is set globally, not locally. Oil buyers are always seeking the lowest-cost supplier. So any Saudi crude being loaded at the Red Sea port of Yanbu that doesn't get purchased by a refinery in Corpus Christi or Houston will instead wind up in Singapore or Shanghai.

Refer to this article whenever you are listening to the candidates from either party start talking about energy policy. Come to think of it, while considering political choices, you should also keep handy this Bryan Caplan/WaPo op-ed entitled 5 Myths About Our Ballot-Box Behavior.

Posted by Tom at 12:05 AM | Comments (2) |

More costs of prohibition

Geez, could legalization and regulation really be worse than this?

Posted by Tom at 12:00 AM | Comments (0) |

January 13, 2008

The People's Republic of Massachusetts

The development of in-store health care centers over the past decade has unquestionably been a positive development for the American health care system. They provide relatively inexpensive primary care and take some of the burden off of over-crowded emergency rooms that are currently required to provide non-emergency care to folks who have no other conduit to the health care system.

So, in the face of this important service that the in-store health centers are providing to people and communities, what does the Mayor of Boston want to do? Stop them from making money! (H/T Radley Balko):

Mayor Thomas M. Menino embarked on a highly public campaign yesterday to block CVS Corp. and other retailers from opening medical clinics inside their stores, . . . Menino blasted state regulators for paving the way Wednesday for the in-store clinics, which are designed to provide treatment for sore throats, poison ivy, and other minor illnesses.

The decision by the state Public Health Council, "jeopardizes patient safety," Menino said in a written statement. "Limited service medical clinics run by merchants in for-profit corporations will seriously compromise quality of care and hygiene. Allowing retailers to make money off of sick people is wrong."

In a separate letter, Menino urged members of the city's Public Health Commission to consider barring the clinics from Boston.

Meanwhile, W$J columnist David Wessel writes "The business model for big U.S. banks is broken. . . . Banks and Wall Street could devise a better business model. But they'd best hurry. If they don't act, regulators will. And if regulators don't, House Financial Services Committee Chairman Barney Frank and the other Democrats in Congress will."

Wessel's column and Frank's usual anti-business antics prompted Andrew Morriss to write a letter to the WSJ, which Don Boudreaux passes along over at Cafe Hayek:

Mr. Wessel is correct that most banks’ business models are not currently producing profits, but this is not cause for concern for anyone but their shareholders. Markets are a discovery process, with firms and investors learning as they try new ideas and react to changed conditions. What markets need is a stable regulatory environment, in which every dip in the market does not produce a new set of rules.

Unfortunately, there is little evidence that Rep. Frank and his comrades on the House Financial Services Committee understand this, making it virtually certain that they will rush to “solve” the banking crisis with new legislation. The best assistance Rep. Frank could offer would be to commit his committee to resolute inaction for an extended period of time, offering both banks and investors the assurance that the rules of the game would remain unchanged and allowing them to learn from their experience in the market place.

Posted by Tom at 12:00 AM | Comments (0) |

January 12, 2008

Conquering stress in the skies

It seems as if everyone who has been traveling recently has a horror story to relate about an abysmal experience with an airline. Heck, air travel has become so distasteful that I don't even think about flying anymore if I'm traveling within the Houston-Dallas-Austin/SanAntonio triangle here in Texas. I have an excellent chauffeur (i.e., my wife) who handles the driving while I work. It's far more pleasant than dealing with the non-stop hassles of air travel.

But if you simply must endure air travel these days, take a moment to read this Peter Greenberg article that provides about a half-dozen tips for minimizing stress during air travel, such as:

Avoid "direct" flights. The only good flight is a nonstop flight. Labeling a flight "direct" is an airline euphemism that means you'll stop at least once, exponentially increasing your chances of being delayed.

Posted by Tom at 12:00 AM | Comments (1) |

January 11, 2008

I wonder what she thinks about the guys over at the Masonic Temple?

Putting Chuck Rosenthal's troubles aside for a moment, does anyone else think it's time to clean house at the Harris County District Attorneys' Office?:

Republican district attorney candidate Kelly Siegler told a judge last year that members of Houston's Lakewood Church are "screwballs and nuts" and that she works to keep them off of juries.

Siegler made the comment while defending herself from a defense attorney's suggestion that she struck a man from the jury pool in a capital murder case because he is black. It wasn't the man's race that prompted Siegler to eliminate the man from the jury pool, she said. It was the fact that he attends Joel Osteen's megachurch.

"To start with, he's a member of Lakewood Church. And we have had a running agreement, my partner Luci Davidson and I have, since we started, that people who go to Lakewood are screwballs and nuts," Siegler said, according to the court transcript. "I'm very familiar with that church. We try our hardest not to put anybody who goes to Lakewood regularly on any jury, he's a pretty devout member of Lakewood Church. That's one reason that scared me about the man."

Siegler went on to give other reasons why she didn't want him to be on the jury including his membership in the NAACP, a group that opposes the death penalty.

Siegler confirmed today that she complained about Lakewood attendees on the record, but said the comment was taken out of context.

"I was talking to a juror who, in my opinion, was very weak on the death penalty," Siegler said. She said she was obligated to give her reasons for striking the juror, "weak or strong, good or bad," which indicated that he would be weak on the death penalty.

Siegler also said she had never been to Lakewood, and was talking about things she heard about the church. [. . .]

Siegler attends Chapelwood Methodist church. [. . .]

The jury eventually sentenced [the defendant that Siegler was prosecuting] to death.

And that comes from one of this DA's office's "best" prosecutors. Summing up the absurdity of what has been going on in Houston over the past couple of weeks, Slampo provides a multiple choice test to determine how well you have been keeping up on developments.

Posted by Tom at 12:10 AM | Comments (0) |

But how do you really feel, Pete?

Geoff Shackelford interviews legendary golf course designer Pete Dye, who is not exactly a fan of the United States Golf Association:

"God bless the United States Golf Association. They have escalated the cost of maintenance, they have slowed down play, and they have completely lost control of the equipment. Outside of that, they have done a pretty good job."

Interestingly, Dye is also not a supporter of the trend toward ever-faster putting surfaces:

"The other cost escalation the USGA has encouraged is with speed of greens. When Ben Hogan won the U.S. Open at Oakmont [in 1953], then considered the fastest greens in the history of the world, the Stimpmeter was maybe six or seven. One of the things I’m doing in renovating my courses is reducing contour and slope to match today’s speeds. . ."

Read the entire interview. Dye is a true original.

Posted by Tom at 12:05 AM | Comments (0) |

America's worst 20 fast food items

Most folks can get by quite well with eating less than 2,000 calories per day. Each of these food items pretty well gets you there.

Caramel Banana Pecan Cream Stacked and Stuffed hotcakes?

By the way, just to show that you can find almost anything on the Web, The Healthy Dining Finder can help you pick healthier choices from standard restaurant menus by eliminating high-calorie add-ons.

Posted by Tom at 12:00 AM | Comments (0) |

January 10, 2008

A cheap sucker punch

During the entire 35 years that I've lived in Houston, the head basketball coaching position at Rice University has been a thankless job. Attempting to recruit good basketball players to Rice is hard enough, given the academic requirements and the greater university support for both the football and baseball programs. But attempting to recruit good basketball players to play at Rice's home of Autry Court -- which is a dump and not nearly as good a facility as most suburban high school gyms in the Houston area -- is nearly an impossible task.

Nevertheless, for the past 16 years, Willis Wilson has toiled gamely as Rice's head basketball coach. Although rarely have his teams been blessed with much talent, they have always competed hard and played to the best of their ability. Against overwhelming odds, Wilson has produced five Rice teams that have won at least 18 wins in a season and three of his Rice teams earned postseason NIT appearances. And through it all, Wilson has represented his institution as an articulate and professional gentleman.

Accordingly, most folks in the Houston community who have followed local college athletics for awhile like me were particularly pleased for Wilson last year when Rice undertook a long-overdue $23 million renovation of Autry Court that supposedly will bring the facility up to reasonably modern standards. During the renovation, which is not scheduled to be completed until until January of next year, the Owls are being forced to play their home games in several locations around town, including one high school facility that is 35 miles from the Rice campus. But as usual, the classy Wilson hasn't complained a lick and is probably simply thrilled with being able to show off the plans of the renovated Autry to his players and recruits.

So, imagine my surprise when I picked the paper yesterday and saw this article from the Chronicle's Rice athletics beat writer:

Perhaps it is cruelly ironic that after spending more than a dozen years spearheading the effort to renovate Autry Court, Rice men's basketball coach Willis Wilson is facing a groundswell of criticism that might influence whether he coaches in the new facility.

In the midst of his 16th season at the helm of the Rice program, Wilson is enduring vitriol that is difficult to dismiss. [. . .]

The current state of affairs combined with past failures, real and perceived, have legitimized the question of whether Wilson, the most accomplished coach in the program's history, will occupy the bench next season when refurbished Autry Court will be unveiled. [. . .]

And what's even more galling is that the comments in the article from Rice Athletic Director Chris Del Conte make it clear that he certainly didn't want to dispel the rumors that Wilson's tenure at Rice may be over after this season:

"Those are always looming concerns," Rice athletic director Chris Del Conte said of the Owls' recent lack of success. "They're looming concerns because of the importance we're placing on men's basketball at Rice.

"We should be in a situation where we have a viably sustainable athletic program. A lot of private institutions understand the value that is placed on men's basketball in terms of a key financial component of an overall athletic program. And I'll take all those things into consideration as we move forward."

If Rice allows Del Conte to can Willis Wilson after 16 faithful years and before he has had an opportunity to recruit players to -- and have his teams compete in -- a reasonably modern facility, then Rice will make the hypocrisy of Todd Graham look benign in comparison.

And with that kind of hyprocrisy wafting from South Main, just wait until the Marching Owl Band has an opportunity to comment.

Posted by Tom at 12:10 AM | Comments (0) |

The irony of what brought Rosenthal down

Isn't it ironic that tough-guy district attorney Chuck Rosenthal was ultimately brought down as a result of his refusal to stand up to the Harris County Sheriff's Department?

As this Peggy O'Hare/Chronicle article reports, Rosenthal made the appalling decision to prosecute two brothers who were wrongfully arrested and roughed up by sheriff deputies for committing the heinous "crime" of unobtrusively videotaping from a neighboring property some questionable conduct of the deputies during a drug raid. What on earth was Rosenthal thinking in allowing such an absurd prosecution to go forward? No wonder he is in the middle of a wrongful arrest civil lawsuit.

By the way, the four deputies who wrongfully arrested the two brothers remain employed by the sheriff's department. And the Attorney General is now looking into Rosenthal's emails.

Posted by Tom at 12:05 AM | Comments (0) |

Grading the coaches

Following on this earlier post on the most overpaid big-time college football coaches and now that the seemingly unending college football season is mercificully over (and the playoff proponents want to make it longer?), the College Hot Seat posts its final grades (related blog post here) for the big-time college football coaches.

No Texas coaches get an "A." Texas Tech's Mike Leach is the highest graded Texas coach at a B+.

Posted by Tom at 12:00 AM | Comments (0) |

January 9, 2008

Retro golf

Golfweek's Brad Klein enjoyed that outdoor "Winter Classic" National Hockey League game in Buffalo that drew over 70,000 spectators on New Year's Day so much that he is proposing the professional golf equivalent -- a tournament where all the Tour players would be required to play old-style persimmon woods, forged irons and balata balls:

So if hockey can pull this off, why not golf? What better game for evoking youthful memories and feelings – of school-house swings, piecemealed equipment, and of a dreamy, pastoral playing field.

How about the PGA Tour putting together a “Summer Classic” tournament?

Players use older, wooden-headed drivers and “woods,” plus forged, not cast, irons and wound, balata golf balls – the kind that anyone who is 30-plus years old today grew up learning the game with. Forget caddies. Players carry their own golf bags. No yardage books or pin sheets. Golfers eyeball everything and improvise their shots. Leave the bunkers rakes in the maintenance shed. Mow the greens so they actually putt at different speeds.

How much fun would that be to watch? And to play?

The NHL’s “Winter Classic” was a success in every possible regard. And no surprise, despite (or was it because of?) the rough conditions, the game’s premier player, the Penguins’ Sid Crosby, not only displayed his amazing puck handling skills but also scored the winning goal. To their credit, the NHL’s administration even bent the rules slightly in the name of equity by stopping play midway through the third period and overtime to allow the teams to switch sides, lest either one gain an undue advantage from the elements.

That, to me, showed a lot of imagination. Don’t let rules nerds ruin the game in the name of some abstract lawyerly adherence when what counts is the spirit of the sport. With a little imagination and guts, golf, too, can go back to its traditions. It might be the best way of showcasing itself.

Not a bad idea for one of the many PGA Tour events that have fallen into the Tiger Chasm.

On the other hand, Geoff Shackelford already knows who the probable winner would be.

Posted by Tom at 12:10 AM | Comments (0) |

No sympathy

This NY Times article from the other day reports on the increasing numbers of lawyers and doctors who are plagued by self-doubt (who'd have ever thought that?). Mr. Juggles over at Long & Short Capital has no sympathy:

To the lawyers:

In case the Neiman Marcus purchases succeeded in lifting your morale and left you with the impression that what you did counted for something, please let me add some critical information: It doesn’t. This is why you are paid, on an hourly-adjusted basis, like a recent (2nd tier) college graduate.

To the doctors:

The fact that I was able to diagnose my own illness after 15 min on WebMD speaks to the value of your knowledge. Perhaps our relationship would be more productive if you would stop making me wait 3 days for an appointment (and 90 minutes once I get to the office) to diagnose a sinus infection that I already know I have. Give me the antibiotics without the self-importance. I will come see you again when I have something you can actually be helpful with. For instance, after I break my arm trying to carry my bonus home, I will come see you and you can set the cast. Until then, please stop whining.

Posted by Tom at 12:05 AM | Comments (3) |

Marketing to the Obama generation

Midwesterner Larry Ribstein -- who is currently on leave from the University of Illinois Law School while teaching in New York City -- humorously experiences culture shock while shopping in the Big Apple.

Posted by Tom at 12:00 AM | Comments (0) |

January 8, 2008

Dr. Pou's fog of Katrina

This Dr. Susan Okie/New England Journal of Medicine article (H/T Kolahun) provides the most extensive analysis to date of the circumstances surrounding the tragic deaths of the nine New Orleans area hospital patients during the aftermath of Hurricane Katrina that led to the egregious prosecutorial decision to bring criminal charges against one of the treating physicians, former University of Texas Medical School physician, Dr. Anna Pou (previous posts here). Dr. Okie addresses the key question of why these nine patients died ". . . in light of the eventual evacuation of about 200 patients from [the hospital], including patients from the intensive care unit, premature infants, critically ill patients who required dialysis, patients with DNR orders, and two 400-lb men who could not walk." It's an important question to address, but not in the context of a criminal case.

The fog of war analogy is certainly appropriate. Even with as good information as we have about the horrific conditions at the hospital in the aftermath of Katrina, it's still hard to imagine how difficult it was making even basic decisions in the face of the breakdown of civil society and infrastructure. What we do know is that Dr. Pou, who was not experienced in providing emergency medical services in what amounted to a heavy combat war zone, was no ethicist on mission to make a political statement. Rather, she was simply a physician doing the best she could to make the right decisions under the worst circumstances imaginable. It should not surprise us if, with the benefit of hindsight bias, some of those decisions would not have been the ones that a reasonable physician would have made under better conditions.

Posted by Tom at 12:10 AM | Comments (0) |

The power of words

James Fallows hits on what I believe is a very important dynamic in Barack Obama's surge past Hillary Clinton among Democrats -- the power of words:

Words and deeds. Talk and action. Poetry and prose. Presidents obviously do best when they can do both.

But only Obama captured what is unique about a president's role. A President's actions matter -- Lyndon Johnson with his legislation, Richard Nixon with his opening to China -- but lots of other people can help shape policies. A President's words often matter more, and only he -- or she -- can express them. Grant led the Union Army, but Abraham Lincoln, in addition to selecting Grant, wrote and delivered his inaugural and Gettysburg addresses. Long before Franklin Roosevelt actually did anything about the Great Depression, his first inaugural address ("the only thing we have to fear...") was important in itself. The same was true of Winston Churchill just after he succeeded Neville Chamberlain. It would be years before the Nazi advance would be contained, but Churchill's words and bearing were indispensable to Britain's recovery.

On the other hand, George W. Bush's difficulty in expressing himself publicly has exacerbated the perception of a rudderless Administration. With that constant reminder over the past seven years, I'm surprised that Clinton's handlers don't have her better prepared to express herself well in public debates. Perhaps, as with Bush, she simply lacks the public speaking gift of her husband. But I am continually amazed at how often her extemporaneous public statements are littered with the ubiquitous "you know" crutch as she gathers her thoughts. That habit, as well as her instinct to default to a government solution on virtually every issue, fuels the perception that she lacks substance.

Posted by Tom at 12:05 AM | Comments (0) |

YouTube for eggheads?

This looks as if it has great potential. The NY Times has the background story on the project.

Posted by Tom at 12:00 AM | Comments (0) |

January 7, 2008

Colbert on Protestantism

Clear Thinkers favorite Stephen Colbert is back at it, this time taking dead aim at American Protestantism (Colbert is a Catholic) in his new book, I Am an American (and So Can You!) (Grand Central 2007). Ben Witherington has read the book and passes along Colbert's view on Religion from chapter 4:

Chapter 4 of the book is devoted to "Religion" and begins auspiciously with a quote from a Doobie Brothers song "Jesus is just alright with me." To this is added Colbert's retort-- "But are they alright with Jesus? Drop the reefer boys, and pick up a Bible!"

His discussion of denominations begins with the reminder that the Roman Catholic Church is "the church." He adds "Catholics have many advantages over other Christians. One is marble. For the buck I put into the collection plate, I want some production value. That means a church, not some community center that doubles as basketball court. Also Catholics have saints-- more than 10,000 of them. They're like God's customer service reps, and each of them has a speciality." (p. 53).

But then he gets down to brass tacks with Protestanism, here defined as "This is a variant form of Christianity, or 'heresy'." He adds "Protestants don't make me angry as much as disappointed. Unlike the world's crazy made up religions, they're so close to getting it right. They're a single Pope away from reaching their full potential." (p. 53). He says that now that Protestants have had "their little 490 year protest, it's time to move on and stop dwelling in the past." Here's his blow by blow account of various Protestant denominations:

Episcopal Church: "Why don't Episcopalians just come out and say it-- their Anglicans! A bunch of Tory Loyalist Brito-philes...waiting for the day America let's her guard down and they can reinstate Henry VIII"

Methodist Church: "What, the Church of England wasn't heretical enough for you?"

Presbyterian Church: "Presbyterians are identical to Methodists except that one of them says "debt's" instead of "trespasses" in the Lord's prayer. Hundreds of years of bitter armed conflict has failed to resolve this difference. How many more lives must be lost?"

Baptist Church: "I'm a pious guy but even I have my limits. I draw the line right around spending eight hours in church every Sunday. Church should be a solemn 45 minutes to sit quietly and feel guilty, with donuts at the end to make you feel better. I don't go for a full day of singing, dancing, and rejoicing, no matter how nice the hats are. I prefer my Gospel monotonously droned to me from the pulpit, thank you very much."

Quaker Church: "There folks produced only two things I like--Oatmeal and Richard Nixon."
(all the above is on pp. 54-55).

I will spare you his comments on Unitarians, Mormons, and Jews. He defines agnostics as "Atheists, without balls."

He also provides a svelte commentary on the nature of the Bible, for example stressing "After Jesus showed up, the Old Testament basically became a way for Bible publishers to keep their word count up." (p. 57).

Posted by Tom at 12:10 AM | Comments (2) |

Say what?

Let's see now. Patriots quarterback Tom Brady has had one of the best seasons from a performance standpoint of any QB in NFL history. He led his team to a 16-0 record, which is the best regular season record in NFL history. And someone still actually voted for Brett Favre over Brady as the NFL's Most Valuable Player?

I think I know who voted for Favre.

Posted by Tom at 12:05 AM | Comments (0) |

Last chance for glory

This is one of the best ideas for a birthday party that I've seen in quite awhile.

My wife told me not to bother to sign up because she would kill me before I could even attend a practice. ;^)

Posted by Tom at 12:00 AM | Comments (0) |

January 6, 2008

"Che" Kennedy, Hugo Chavez’s useful idiot

This Examiner.com article picks up on something that this previous post noted over a year ago -- the economic absurdity of Joe "Che" Kennedy's deal with Venezuelan strongman Hugo Chavez under which Kennedy's non-profit Citizens Oil Corp buys discounted oil from Venequela to provide low-income American customers with a 40 percent discount on a one-time delivery of up to 200 gallons of heating oil. Kennedy rationalizes this program despite the fact that the poorest of Citizen's customers are relatively wealthy in comparison to the 40% of Venezuelans who subsist on about $2 a day. The Examiner concludes its story with the following observation:

Curiously, despite his wealth, Kennedy receives a $400,000 annual salary [from Citizens, which is a non-profit]. Instead of embracing his uncle's [the late John F. Kennedy] courageous anti-communist legacy, he has become just another smarmy celebrity who yammers on about having compassion for the poor from the doorways of multimillion-dollar mansions and private jets, all the while accepting oil stolen by a dictator. Lenin had a name for Western liberals who did this kind of thing – "useful idiots."

Posted by Tom at 12:20 AM | Comments (0) |

January 5, 2008

The Great Debaters

My younger daughter, my wife and I took in Denzel Washington's new film the other night, The Great Debaters. Although the story was somewhat formulaic and the movie certainly not perfect, we found the movie to be hugely entertaining. The acting is superb, particularly the reliable Mr. Washington and newcomer Denzel Whitaker, a delightful young actor who literally steals the show as the youngest of the college debaters. Mr. Washington, who also directed, wisely decided to tell the story through Mr. Whitaker's character (James Farmer, Jr.), and Mr. Whitaker is more than up to the task. What a talent!

Interestingly, the always-excellent Forest Whitaker plays James Farmer, Sr., the father of the young Mr. Whitaker's character in the movie. However, despite their common last name, the two are not related.

At any rate, in discussing the movie on the way home afterward, my daughter observed that it sure is a good thing that the horrific racism depicted in the movie is not condoned in American society anymore. My reply was that brutal discrimination of blacks is still not as uncommon as we like to think. Scott Henson and Radley Balko comment on the unacceptable revelations of, at minimum, prosecutorial negligence in Dallas. Where is the outrage?

Posted by Tom at 12:00 AM | Comments (0) |

January 4, 2008

Judge Easterbrook has some fun with snake oil

Message to Snake Oil salespeople -- don't expect any breaks from Seventh Circuit Judge Frank Easterbrook.

In this clever opinion, Judge Easterbrook goes after the snake oil salespeople who promoted the Q Ray Ionized Bracelet. The promoters of the bracelet contend that it miraculously relieves arthritic pain through enhancing and balancing the "bio-energies" of the wearer. According to the promoters, the bracelet is even smart -- it "knows" its owner so as to prevent second-hand use of its magical qualities. Unfortunately, these magical properties wear off in after about a year, so the wearer has to buy another one to regain the magical healing properties. But $200 per bracelet is a small price to pay for pain relief, right?

After this form of snake oil had been peddled for a few years on infomercials, the Federal Trade Commission finally stepped in to enjoin the promoters and seek disgorgement of profits, which the District Court allowed to the tune of $16 million. On appeal, the promoters contend that they didn't commit any fraud because the placebo effect of the bracelet provided pain relief for many of its wearers. Judge Easterbrook isn't buying it:

Although it is true, as Arthur C. Clarke said, that “[a]ny sufficiently advanced technology is indistinguishable from magic” by those who don’t understand its principles (“Profiles of the Future” (1961)), a person who promotes a product that contemporary technology does not understand must establish that this “magic” actually works. Proof is what separates an effect new to science from a swindle. . .

The “tests” on which they relied were bunk. (We need not repeat the magistrate judge’s exhaustive evaluation of this subject.) What remain are testimonials, which are not a form of proof because most testimonials represent a logical fallacy: post hoc ergo propter hoc. (A person who experiences a reduction in pain after donning the bracelet may have enjoyed the same reduction without it. That’s why the “testimonial” of someone who keeps elephants off the streets of a large city by snapping his fingers is the basis of a joke rather than proof of cause and effect.) [. . .]

Physicians know how to treat pain. Why pay $200 for a Q-Ray Ionized Bracelet when you can get relief from an aspirin tablet that costs 1¢? Some painful conditions do not respond to analgesics (or the stronger drugs in the pharmacopeia) or to surgery, but it does not follow that a placebo at any price is better. Deceit such as the tall tales that defendants told about the Q-Ray Ionized Bracelet will lead some consumers to avoid treatments that cost less and do more; the lies will lead others to pay too much for pain relief or otherwise interfere with the matching of remedies to medical conditions. That’s why the placebo effect cannot justify fraud in promoting a product. Doctor Dulcamara was a charlatan who harmed most of his customers even though Nemorino gets the girl at the end of Donizetti’s L’elisir d’amore.

That's just a taste. Read the entire opinion. H/T Robert Loblaw.

Posted by Tom at 12:10 AM | Comments (1) |

Interesting golf stat of the week

The first edition of Golf World magazine each year is my favorite of the year. It's a stathead's dream as GW previews the upcoming PGA Tour season by providing extensive individual statistics of each Tour player from the previous season. It's always interesting to compare each player's financial performance on the Tour for the previous season with the statistical analysis of what he was doing well and not so well.

One particularly interesting GW comment involved Jeff Maggert, the longtime Tour player from The Woodlands. Maggert made over $845,000 in prize money during the 2007 season, but that was only good enough for 123rd on the Tour money list and a 255 ranking in the World Golf Rankings. GW's comment on Maggert highlights one of the dramatic changes in Tour golf over the past 14 years:

"Maggert's driving distance average (284.2 yards) ranked tied for 142nd on the Tour, but it would have led the Tour in that category as recently as 1994."

And this Ron Sirak article over at Golf Digest provides even more perspective on the dominance of Tiger Woods:

"There have been 44 majors played since Tiger turned pro. Besides Woods, five players have won multiple times: Phil Mickelson and Vijay Singh, both with three; and Ernie Els, Mark O'Meara, and Retief Goosen, two apiece. Add their totals and it comes to a dozen--one fewer than Woods."

Posted by Tom at 12:05 AM | Comments (1) |

Not much bang for the buck

A frequent topic on this blog (see earlier post here) is how the NCAA's hyper-regulation of big-time college football causes all sorts of financial disparities, not the least of which is that a part of the excess rents that should be paid to compensate players is paid to the top head coaches.

Well, not that big money paid to coaches is a hot topic on college campuses or anything, but I bet that the following performance of the five top-paid college football coaches will be the subject of at least a few conversations in faculty lounges around the country:

1. Charlie Weis ($4,000,000) - worst season in Notre Dame history.

2. Bob Stoops ($3,620,000) - fourth Oklahoma BCS bowl loss in a row.

3. Nick Saban ($3,503,000) - 'Bama avoided a losing record with an Independence Bowl win.

4. Urban Meyer ($3,384,000) - Gators have four losses with a Heisman Trophy winner at QB.

5. Kirk Ferentz ($3,030,000) - After finishing last season 6-7 with a bowl loss, Iowa finished this season 6-6 with a loss to a 5-7 MAC team and no bowl game.

H/T Get the Picture.

Posted by Tom at 12:00 AM | Comments (0) |

January 3, 2008

Landing the tuna rather than the barracuda

As noted here last month, Berkshire Hathaway chairman and mainstream media folk hero Warren Buffett is a key player and, as these NY Times and W$J articles report, perhaps even a key witness in the upcoming criminal trial of a former AIG executive and four former executives of Berkshire's General Reinsurance Corp, including former General Re CEO, Ronald E. Ferguson.

Although Buffett knew about the finite risk transactions that are at the heart of the prosecution, he is exempt from prosecution under the Buffett Rule. Previous posts on this case are here, here, here, here and here.

What's particularly interesting about all this is that the prosecution is attempting to prevent the defense from even mentioning Buffett, whose knowledge of the transactions (and the government's election not even to include Buffett as an unindicted co-conspirator, much less a defendant) is at least some evidence of the defendants' lack of criminal intent (Warren Buffett would not engage in any criminal conduct, now would he?). The prosecution is contending that any evidence relating to Buffett's knowledge of the transactions is hearsay and, thus, inadmissible. But until the testimony regarding Buffett's knowledge is propounded in court, who knows whether it is hearsay?

Of course, the prosecution is not shy about using hearsay testimony when it comes from someone who is not an avuncular media darling such as Buffett. The prosecution has fingered former AIG chairman Maurice "Hank" Greenberg as an unindicted co-conspirator in the trial, which -- based on previous experience -- means that the prosecution will use testimony about Greenberg's statements that would otherwise be hearsay.

As usual, Larry Ribstein sums up the vagaries of the government's policy of selectively criminalizing merely questionable business transactions:

One might think that the government would have been trying to ensnare Buffett, who would be a high-profile trophy. The problem is that trying a cultural icon like Buffett would raise public doubt about the legitimacy of the government's corporate crime enterprise. So Buffett gets the benefit of a version of the Apple rule -- . . . the Buffett rule. In this case, unlike Enron, it's better for the government to land the tuna than the barracuda.

According to the WSJ, the prosecution is arguing that "[t]he defendants want to deflect the issue of their involvement, knowledge and the intent relating to ... the fraudulent transaction at the heart of this case by creating a trial-within-a-trial about Warren Buffett." Deflect? Yes, I guess, for the government, a defendant's insistence on defending himself is a pesky nuisance.

The bottom line is that issues of defendants' guilt, including critical evidence of whether they knew they were engaging in wrongdoing, may not be available because, ultimately, the government decides who testifies by deciding whom to prosecute. All part of the costs of the extensive criminalization of accounting and other conduct of corporate agents.

Posted by Tom at 12:10 AM | Comments (0) |

The most influential person in sports that no one has heard of

The 30 Major League Baseball clubs invested $80 million in a fledgling media company. That initial investment has been repaid and the media company generated $450 million in revenues this past year, producing a $3 million dividend for each MLB club. Several investment banks recently estimated that the value of the clubs' original $80 million investment is now worth $2.5 billion.

Who managed this windfall for MLB? The most influential person in the sports business that no one has ever heard of -- Bob Bowman, the President and Chief Executive Officer of MLB Advanced Media (MLBAM). Maury Brown interviews Brown.

Posted by Tom at 12:00 AM | Comments (0) |

The Waziristan problem

Stanley Kurtz provides this must read op-ed on the safe haven for al Qaeda and the Taliban in northwest Pakistan that Lord Curzon once observed will not be pacified "until the military steam-roller has passed over the country from end to end . . . But I do not want to be the person to start that machine."

Posted by Tom at 12:00 AM | Comments (0) |

January 2, 2008

Legal schadenfreude?

Now, this is interesting. The ABA Journal is running a best blawgs contest. In the voting for the best general law blog category, one of my favorite blawgs (Overlawyered), which is run by a non-lawyer (Walter Olsen) and often provides a critical point of view toward the legal profession, is one of the leading vote-getters. Voting ends today, so don't miss your chance to send a message to the lawyers! ;^)

Posted by Tom at 2:48 PM | Comments (0) |

What's Rusty Hardin thinking?

As noted earlier here, I believe the Mitchell Commission Report is deeply flawed and fails to confront squarely Major League Baseball's long tradition of at least tolerating -- if not outright promoting -- the use of performance-enhancing drugs.

Moreover, Roger Clemens' attorney, Rusty Hardin, is unquestionably one of Houston's most talented trial lawyers.

However, I'm starting to wonder whether Hardin is out of his element in dealing with Clemens' professional crisis of being fingered in the Mitchell Report.

The first inkling that matters are not being particularly well thought out in regard to Clemens' problem was the announcement that Hardin had hired private investigators to assist him and attorneys in his firm in conducting "their own investigation into [Brian] McNamee’s allegations" that he had injected Clemens with PED's.

Now, maybe such a private investigation is a good idea to gather information informally that could be used to cast doubt on McNamee. But what purpose is served by announcing it publicly and making the information the target of Congressional subpoenas or discovery in a civil lawsuit, which is becoming increasingly likely? Sure, Hardin can claim that the information is privileged work product, but that's far from clear. Why create the bulls-eye in the first place?

And, as John Royal pointed out, Hardin's comparison of the Mitchell Commission investigation to the Army-McCarthy hearings of the 1950's is a stretch, to say the least.

But what really has me scratching my head regarding Hardin's strategy is this Murray Chass/NY Times interview of Hardin. Get a load of Chass' impression after interviewing Hardin:

But what if Hardin found one or two people who could say they saw Clemens use steroids and H.G.H.? Would he immediately terminate his investigation and announce that the report was correct? I didn’t ask, but based on his answers to other questions, I suspect that he would at least make it obvious that he was conceding.

Further, I believe that if he found credible evidence that Clemens used illegal substances, Hardin would convince Clemens that he had to be forthcoming and admit his use.

H'mm, that's certainly an interesting impression to leave about one's client. Chass goes on to make the following observation:

Finally, if Clemens did not use performance-enhancing drugs, then why didn’t he accept the invitation to meet with Mitchell so that he could tell him his information was wrong? That was the time to challenge the information, not when it has already been published.

“I don’t think it would have changed anything,” Hardin said. “They haven’t retracted anything. That’s probably proof that if he had talked to them, it wouldn’t have done any good.”

As Chass points out, what is there for the Mitchell Commission to retract? Clemens has done nothing but deny the allegations. Is Hardin suggesting that the Mitchell Commission would not have acknowledged Clemens' denials of McNamee's accusations had Clemens met with the Commission? Even as flawed as the Mitchell Report is, it's highly unlikely that the authors would not have reported that Clemens denied McNamee's allegations.

This is increasingly looking to me as a circumstance where Clemens has a first rate trial attorney working for him when what he really needs is a public relations crisis pro.

Update: At least the conversation about steroids and other PED's is improving.

Posted by Tom at 12:10 AM | Comments (1) |

Reefer madness

In an uncharacteristic display of coherence in the face of stifling prison overcrowding, the Texas legislature passed a law last year that took effect on September 1st that allows police to issue citations for possession of small amounts of marijuana (less than 4 ounces) instead of hauling folks off to an unpleasant and expensive experience in the local county jail. Sounds like a good idea, right?

Well, yes, except that it appears that most counties in the state are ignoring the new law. Why?:

For Greg Davis, Collin County's first assistant district attorney, one of his qualms with the new law is the perception created by ticketing for a drug offense, instead of making an arrest.

"It may . . . lead some people to believe that drug use is no more serious than double parking," Mr. Davis said. "We don't want to send that message to potential drug users, particularly young people."

Yeah, right. Those young people will certainly be safer from the "dangers" of marijuana in the local county jail, now won't they?

Scott Henson provides his usual lucid commentary.

Posted by Tom at 12:01 AM | Comments (1) |

So Chuck, what did you plan on doing after public service?

About the only question remaining regarding Harris County District Attorney Chuck Rosenthal is whether his holiday season was as bad as the Aggies'?

First, there were the revelations in a civil lawsuit that Rosenthal placed his former mistress in a cushy administrative assistant position and used DA office email to send sweet nothings to her, all of which was picked up quickly by such national media outlets as the NY Times and the Wall Street Journal.

But if that were not enough, Rosenthal -- in declining local GOP leaders' requests that he step aside for the 2008 election -- publicly stated that "the local Republican Party had never done much" for him in his 2000 and 2004 election campaigns and "that party leaders have become 'Chicken Littles,' unjustifiably fearful the scandal will damage the entire Republican roster of candidates in the county."

Well, those remarks are certainly an interesting way of engendering loyalty among the party faithful. ;^)

Finally, Rosenthal still has some explaining to do in the civil suit regarding the apparent deletion of 2,000 emails. Was the D.A. involved in destruction of evidence? Sheesh!

I'm no political pundit, but when an elected official seeks to retain a position as hard as Rosenthal is attempting to keep his in light of the above, it's a pretty good indication that it's past time to replace that official.

As usual, Kevin Whited, Slampo and Cory Crow have insightful thoughts on the affair.

Update: Late on Wednesday afternoon, Rosenthal withdrew as a candidate for District Attorney in the Republican primary.

Posted by Tom at 12:00 AM | Comments (0) |

January 1, 2008

Vidal v. Mailer

Until coming across this recent Dick Cavett blog post, I had forgotten about the time that Gore Vidal and Norman Mailer showed up as guests on Cavett's old television show one evening in 1971. For a good laugh to start the New Year, check out Cavett's memories of the bizarre episode.

Happy New Year and here's hoping you have a great '08!

Posted by Tom at 12:00 AM | Comments (2) |