Author Archives: Tom

The real presumption in the Conrad Black trial

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mark_steyn.jpgAs I noted many times in regard to the criminal trial against former Enron executives Jeff Skilling and Ken Lay, the real presumption in the case was not the usual presumption that the defendants were innocent until proven guilty. Rather, the real presumption in the trial was that Skilling and Lay were rich, Enron went bust and investors had big losses, so Skilling and Lay must be guilty of some crime.
Well, Mark Steyn is noticing the same dynamic in his most recent blog post on the criminal trial of Conrad Black:

A lot of my chums on the media benches remain convinced Conrad Black is guilty of something. Itís just that, with every day the prosecution presents its case, itís getting harder and harder to say of what. Mr Sussman, the boyish charmer on the government side, dutifully refers to the defendants as ìco-conspiratorsî, but for a good conspiracy you have to have someone to conspire against. And, with each prosecution witness, it seems clearer that just about everybody was in on this conspiracy. . . .
As is crushingly obvious, almost everyone connected with these non-competes in any way approved them, disclosed them, filed the paperwork in triplicate. Either everyone is guilty or no one is, but arguing that only these four should swing for it is becoming increasingly absurd.

Which is one of the key reasons why such a case should be in the civil justice system, which is better equipped than the criminal justice system to allocate liability among multiple defendants. Steyn also notes the perverse effect that the adoption of widespread plea bargaining in the criminal justice system generally has on white collar criminal cases in particular, a point that was noted earlier here. Finally, that conspiracy in the Black trial sure sounds a lot like the ephemeral one involved in the Lay-Skilling case.

Wolfowitz at the World Bank

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Wolfowitz.jpgThis New Yorker profile provides some interesting information on influential neo-con and World Bank president Paul Wolfowitz and also on the work of the World Bank, which is not well-understood generally. Definitely recommended reading.
By the way, did you know that Wolfowitz taught himself Arabic in the 1980’s while working at the State Department, and that he also speaks French, German, Hebrew, and Indonesian?

“Turning a masterpiece into a brute”

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Tiger%20frustrated.jpgIt’s the always-anticipated day of the final round of The Master’s Golf Tournament, not everyone is sanguine about the fact that Stuart Appleby’s one-over-par 73 on Saturday allowed him to take a one-shot lead over Tiger Woods and Justin Rose at two-over par 218, which is the third-highest round lead in the history of the Masters. The Guardian’s Lawrence Donegan characterized the conditions on Friday in a fitting manner:

“As sporting drama goes, this was a bit like Laurence Olivier being acted off the stage by the grave diggers.”

The description was equally applicable to Saturday as the golfers struggled to make pars, much less the birdies and eagles that have made the Masters such an exciting tournament over the years. Donegan goes on to describe the renovated course, which another sage called “a golfing Zimbabwe” earlier in the week:

There is no disguising the fact that radical changes to Augusta in recent times, coupled with the bone hard conditions of this week, have turned Alister Mackenzie’s ageless masterpiece into a brute. Some, like Woods, used diplomatic language when asked for their opinions (“It’s a totally different course…[with ] about 500 extra yards, a billion trees and rough “).

Lorne Rubenstein gets into the act and notes how the lengthening of the par 5 15th hole has drained the drama from the hole:

Much of the confusion is gone because the hole was lengthened last year to 530 yards from 500. Too many players lay up now, which accounts for the much quieter environment among spectators in the area. They, and the golfers, used to hold their collective breath while a ball was in the air. What was its fate? The hole has almost turned into a par-3 because the tee shot and the lay-up have become routine. The third shot matters the most now, not the second.

Finally, don’t miss this Nick Seitz/Golf Digest article on the 1956 Master’s, which heretofore has been known as “the toughest Master’s ever.” The winner of that ordeal? None other than Houstonian Jack Burke.

“I’m a Texan, but . . .”

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gillispie-billy-mug.jpgThis post from a couple of weeks ago observed the following about then Texas A&M University basketball coach Billy Gillispie:

. . . Aggie basketball coach Billy Clyde Gillispie is the toast of Aggieland and he is getting noticed nationwide. This NY Times profile does a good job of describing this somewhat peculiar character — a pure Texas gym rat basketball coach in the middle of football country. Although Kentucky is now looking for a new coach, my sense is that they need not bother calling Gillispie, who appears to be quite comfortable in Aggieland.

Well, that was two weeks ago. Yesterday, good ol’ boy Billy Clyde’s strong affinity for Texas evaporated under the heat of a $16 million contract that the University of Kentucky threw at him. No word on whether a horse farm was thrown into the deal for good measure.
Gillispie’s decision to leave emerging basketball power Texas A&M for Kentucky is understandable, given the money and UK’s legacy in college basketball. But one has to wonder whether Gillispie is making a wise move from a career standpoint. At A&M, he would always be the man that transformed the basketball program into the top-tier of major college basketball and soon would have all the resources that UK offers. Moreover, things have changed over the past decade or so in the college basketball landscape — Kentucky is no longer the dominant force that it once was. Perhaps Gillispie can return UK to its glory days, but the program is running behind two programs — Florida and Tennessee — in its own conference, and neither of the coaches at those programs appear to be going anywhere soon.
Finally, channeling the absurdity noted in the previous post from yesterday, UK would have paid even more for its new coach than the $16 mil that it is doling out to Gillispie — Billy Clyde was UK’s third choice (after Florida’s Billy Donovan and UT’s Barnes)!
Update: The Chronicle’s John Lopez reports that A&M’s loss of Gillispie may have been the result of A&M AD Bill Byrne’s inept handling of the situation.

The connection between coaching salaries and making book

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ncaa-logo2.jpgThe questionable nature of the NCAA’s regulation of intercollegiate athletics has been a frequent topic on this blog, and two recent posts point out a couple of the perverse effects of that regulatory scheme.
First, in this Sports Economist post, Berri points out that the exorbidant salaries being paid to coaches at the top levels of college football and basketball are a direct result of the NCAA’s regulation of player compensation:

The research of Robert Brown and Todd Jewell indicates that a future NBA first round draft choice will generate more than $1 million in revenue each year in college (and this was based on data from 1996, so the $1 million figure understates the revenue generation occurring today). Clearly this sum greatly exceeds the cost of a scholarship. Because the NCAA does not compensate the players for the money being generated, this money has to go elsewhere. It seems reasonable that much of this money is currently flowing into the pockets of the coaches. But if the players were paid, the money would not be available to the coaches, and consequently wages paid to coaches would decrease.

Meanwhile, in this Wages of Wins post, Stacey Burke points out that the NCAA’s restriction on player compensation also promotes point-shaving, even at such remote outposts as the University of Toledo!:

I think it is a shame that any player (college or pro) shave points or fix games, but the real shame is on the NCAA. College athletes ñ like menís basketball and football ñ who generate large sums of money for their schools are not receiving a salary for their time and effort. This lack of payment occurs so that the NCAA can maintain the appearance that college games are amateur contests. Who does the NCAA think they are fooling? If the NCAA was willing to allow paying college athletes this would substantially reduce the incentive of point shaving.

Again, for decades, university presidents have been easy money for the owners of professional football and basketball teams, who have foisted the risk of capitalizing a minor league system for developing players on the colleges. This appears to be changing somewhat in basketball, where several minor professional leagues are now competing with the colleges for players. But the situation is not going to change for good until the colleges do one of two things — either embrace professional sports and manage the AAA minor league teams as owners do in the baseball minor leagues or convert intercollegiate football and basketball to the college baseball model and force the owners of professional football and basketball teams to capitalize their own parallel minor league systems.
Frankly, I don’t really care which approach the university presidents choose. I just want them to get on with it by showing the courage and leadership to turn their back on the antiquated hyprocrisy of the currently bloated NCAA regulatory scheme.

Metro Development Corp.

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metroraillogo10.gifKevin Whited over at blogHouston.net picks up on the latest boondoggle of the Metropolitan Transit Authority — providing kickstart financing for a couple of blocks of commercial property along the Metro light rail line in Midtown.
The entire deal is really preposterous for a transit authority to be getting into. Metro bought the blocks from the developer for $7.2 million with “the expectation” that the developer is going to buy the blocks back and build a bunch of condominiums (in an already overbuilt market) that will supposedly house 1,000 happy light rail riders. According to the developer, everything is really O.K. because — get this logic — it could have been worse!:

[Developer Robert H.] Schultz said Metro may join in developing a parking garage on the site that could be used by rail riders but that the agency chose not to invest in other parts of the project.
“They didn’t want to extend that kind of money. They wanted to be much more conservative until they could see this thing was going to happen,” he said.
[Metro real estate vp Todd] Mason agreed, saying, “Metro does not want to be a developer and take on a lot of risk, but we want to be an enabler of projects like this one.”

As noted earlier here, Metro isn’t good enough in doing what it was chartered for to be taking flyers on financing speculative real estate deals. Where is that type of activity described in Metro’s charter?

Google v. Microsoft

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google-v-microsoft.jpgJeff Matthews ran this insightful post recently summing up the business competition between Google and Microsoft:

Now, the last quarter I saw, Microsoft had 71,000 employees, whose efforts generated about $3.5 billion in operating income.
Meanwhile, Googleís ìrandomî collection of not quite 11,000 employees generated $1 billion in operating income in the same quarter.
Sharp-eyed readers will have already done the math, which is this: Microsoft generated only slightly more than three times the profit of Google despite having almost seven times as many employees as Googleís random collection of hipster do-good engineers.
That lack of productivity does not speak well of Ballmerís aging time-card-punchers who, you might recall, now require dinners-to-go from Wolfgang Puck to keep them from seeking greener pastures than Redmond. (See ìMicrosoft Brings BackÖThe Comfy Chairî from May 31, 2006.)
Yet Ballmer retains complete confidence in his demonstrably less productive crew’s ability to turn back the encroaching tideóor at least he expresses such confidenceódespite all evidence to the contrary . . .

Read the entire post. So, which horse are you betting on?

It’s time for The Masters

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augusta_national_golf2.jpgThe venerable Masters Golf Tournament begins this morning at that golfing Zimbabwe in Augusta, Georgia. Golf Digest’s John Hawkins does his usual fine job of handicapping the field and, somewhat surprisingly, doesn’t think that Tiger Woods is putting well enough at the moment to be a clear favorite for the tournament.
There have already been some interesting comments this week that reflect that the competitive juices are already peaking. Defending champion Phil Mickelson had the following response to a question during his press interview:

Q. Sticking with the green jacket theme, what did it feel like two years ago to help [Tiger Woods] put on the [The Masters green] jacket?
MICKELSON: I don’t know, but I remember what it felt like last year when he put it on me. (Laughter).

Meanwhile, Arnold Palmer will kick off the tournament for the first time by hitting the ceremonial first tee shot that Ken Venturi, the late Byron Nelson, Gene Sarazan and Sam Snead used to handle for many years. Despite the fact that Arnie is no longer playing competitively, he still has a good bit of feisty competitiveness in him. The following was his response to questions during his press interview on Tuesday when asked about rival Gary Player’s quest to play in more Masters tournaments than Palmer:

Q. Gary Player is going to tie your record this week for most Masters played. He’s talking about breaking it next year. What are your thoughts just about that?
PALMER: Well, if he isn’t embarrassed, I won’t be embarrassed for him. (Laughter). [. . .]
Q. He’s in pretty good shape.
PALMER: What does that mean? Are you saying I’m not in pretty good shape?
Q. Maybe he has like 30 more years left or so.
PALMER: Who gives a shit? (Laughter). If you can’t win, it doesn’t matter. That’s s-h-i-t. (Laughter). Hey, he’s my friend and I love him. I can also have fun with him, too.

And asked whether he would he do any ìarm-twistingî in the future to get Jack Nicklaus, who won a record six Masters, and Gary Player, a three-time winner, to hit future ceremonial tee shots in what would be a nostalgic reunion of what was once golfís Big Three?

ìTo let them join me,î Arnie replied with a chuckle, ìor to tell them to stay away.î

Which brings us to the following email that my brother Mike passed along to me that was written by a fellow who viewed an advance screening of a a very special television show that CBS will air before the final round of the tournament on Easter Sunday:

This Masters Sunday will be special. I know this because it’s going to begin with Arnold Palmer winning the Masters. The 1960 Masters, that is. “I wanted two generations to see what the magic was all about,” said CBS golf commentator [and former Houstonian] Jim Nantz, the man who made this resurrection possible.
We’ll be able to re-live the ’60 Masters, one of the more exciting finishes in history, because Nantz pried the original broadcast footage loose from the Augusta National vault, went to the incredible time and expense of having it colorized, and turned it into a one-hour show that CBS will air as the lead-in to its Sunday final-round Masters coverage.
This is footage that has never been aired since its original broadcast. The best part is, it’s not presented in a highlight package with talking heads. It’s shown as if it was a live telecast, featuring host Jim McKay (who left CBS later to join some upstart show known as ABC’s Wide World of Sports — wonder what ever became of him?) with coverage of the last four holes.
I watched a screening of the finished product and offer this advice: Don’t miss it. The 1960 Masters had it all. A classic Arnold Palmer charge and Ken Venturi’s agony of defeat. The old guard — Hogan and Snead — and a young gun — some amateur named Nicklaus. There was a minor rules controversy. There was an innovative new scoring system for television invented by CBS director Frank Chirkinian. And there was the great man himself, Bobby Jones, the legendary founder of Augusta National and the Masters Tournament, holding court as the host of cabin festivities.
This show is a slice of golf history and a classic piece of broadcast history. If you hate goose bumps or nostalgia, don’t watch. This show, a labor of love for Nantz, is one “Wow!” after another. Here’s a short list of reasons to watch:

Continue reading →

The sad case of Dr. William Hurwitz

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HurwitzTakesTheStand04.jpgFor you doctors out there who believe that what happened to Jeff Skilling could never happen to you, take a moment to read the NY Times’ John Tierney’s chilling opening blog post on the re-trial of Dr. William Hurwitz, the Virginia doctor who is a sacrificial lamb for America’s voracious drug prohibition policy. Dr. Hurwitz is being prosecuted on drug trafficking charges for prescribing pain medications that his patients allegedly abused or sold without his knowledge:

Jonathan Fahey, one of the prosecutors in federal court in Alexandria, Va., told the jurors in his opening statement that Dr. Hurwitz was a drug trafficker ó part of a drug-trafficking conspiracy, in fact ó because he prescribed large quantities of OxyContin and other pills while ignoring clear ìred flagsî that his patients were misusing and reselling the pills. The prosecutor said that Dr. Hurwitizís prescribing was ìwithout a legitimate medical purposeî and ìin its wake it left destruction, devastation and death.î [. . .]
[Defense attorney Richard] Sauber used his opening statement to tell the jury over and over that the case boiled down to one question: Was Dr. Hurwitz a doctor or a drug dealer? Calling him a ìpassionate advocate for patients who had been unfairly treated,î Mr. Sauber talked about Dr. Hurwitzís work in the Peace Corps and in Veterans Administration hospitals, and his belief that too many patients were in pain because doctors were afraid to give them proper dosages of opioids. Mr. Sauber also promised to do something that the defense didnít effectively do in the first trial: use expert testimony to show that the dosages prescribed by Dr. Hurwitz were within the bounds of legitimate medicine.

The Hurwitz case is an appalling reminder of how the Drug Enforcement Agency has pursued a perverse agenda in its pursuit of pain doctors. During Hurwitz’s first trial, the DEA actually changed their own guidelines during the trial and removed them from its website because the defense was going to show that Hurwitz prescribed by those guidelines. Meanwhile, DEA head Karen Tandy publicly stated that Hurwitz deserved 25 years in the slammer because he ìwas no different from a cocaine or heroin dealer peddling poison on the street corner.î
Sound familiar?

Rationing health care

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rationing.jpgCharles Wheelan, the Naked Economist, lucidly addresses the key issue in regard to the U.S. health care finance system:

Here’s a question to ask any presidential candidate from either political party: How do you plan to ration health care?
If the answer is “I won’t,” then he or she doesn’t understand health care. Or, more likely, they understand health care and aren’t in any mood to talk straight about it.
“Rationing” has a bad connotation, which is odd, because we ration just about everything. In fact, that’s what capitalism does best.
Not everyone gets an S-Class Mercedes-Benz or courtside tickets to the NBA playoffs or roses on Valentine’s Day. Who does? People who are willing to pay for them.
We call that a market, which is just rationing with a more attractive name. Everything worth having is scarce to some degree, so we use prices to figure out who gets what.
Health care is similar to German cars and basketball tickets — not everyone gets everything they want. But health care is obviously different in a crucial respect: People who don’t get what they want may become sick, stay sick, or even die. Unlike roses or Lakers tickets, health care is literally a life-and-death matter.
As a result, the most fundamental policy question related to health care is who gets what kind of care — or, put another way, how we choose to ration resources. Forget all the other complications, like aging baby boomers, malpractice lawyers, greedy drug companies, shockingly fat Americans, insurance forms in triplicate, and so on.
Do those things help to explain why our system is expensive and getting more so? Yes. But for anyone looking to control costs (e.g., a presidential candidate) those factors pale in comparison to the fundamental health care design question: Who gets what care and why? [. . .]
And therein lies the fundamental inefficiency of the American system. We have no good mechanism for saying “no” to expensive technologies and treatments that provide marginal benefits. If you’re a patient, that sounds terrific; your doctors will spare no expense. If you’re a business trying to keep up with skyrocketing health care costs, or a family trying to pay for benefits, it’s not. And, of course, as insurance costs go up, fewer people will have access to that kind of coverage.
At the same time, we don’t do a very good job of saying “yes” to treatments for the uninsured that would profoundly improve their health.
The combination of those two factors goes a long way toward explaining why the U.S. spends a ton of money on health care (15 percent of the GDP, compared to 8 percent for Britain and Japan and 10.5 percent for France) and gets relatively mediocre outcomes. . . .
In short, the rest of the industrialized world does a better job of rationing health care than we do.
Which brings me back to my original point. Every presidential candidate is going to talk about controlling health care costs. Most are going to talk about expanding coverage, too. Those goals are impossible unless we can design a system that says “yes” to the most cost-effective care — even very expensive treatments, provided they have corresponding benefits — and “no” to treatments with benefits that are too small to justify their costs. In other words, rationing.

Read the entire article. Wheelan doesn’t propose any solutions, but he does an excellent job of framing the issue. Stated another way, to what extent is American society willing to underwrite health care costs that individual citizens cannot afford — or are unwilling — to pay?