I am in Italy for a few days with my son Andy helping him get set up in his apartment while he lives in Florence. We flew into Pisa last night and slept there before driving to Florence this morning. Inasmuch as it was late when we arrived in Pisa, we just grabbed a late dinner and didnít look around much. So, it was a nice that when I went out on the balcony of our hotel room this morning that I turned and saw this view of the Leaning Tower. You are never very far from history while in Italy.
Another song from one of Houston’s treasures.
Writing in 1951 about popular attitudes toward income inequality in "The Ethics of Redistribution," Bertrand de Jouvenel observed the following (H/T WSJ):
The film-star or the crooner is not grudged the income that is grudged to the oil magnate, because the people appreciate the entertainer’s accomplishment and not the entrepreneur’s, and because the former’s personality is liked and the latter’s is not. They feel that consumption of the entertainer’s income is itself an entertainment, while the capitalist’s is not, and somehow think that what the entertainer enjoys is deliberately given by them while the capitalist’s income is somehow filched from them.
In arguably the best financial blog post to date in 2009, the Epicurean Dealmaker analyzes the skewed dynamics that led to the Merrill Lynch high-level executive bonus pool and observes, among other things:
It would not be outlandish to consider the Merrill executives’ bonus pool as the latest and largest campaign gift toward Mr. [Andrew] Cuomo’s 2010 gubernatorial run.
Meanwhile, Andrew Morris wrote the following in a letter to the WSJ editor (H/T Don Boudreaux):
At first, when I read your headline “States give gambling a closer look” (Mar. 3) I thought you were reporting on yet another “stimulus” or “bailout” bill in which politicians played games of chance with taxpayers’ money. Hardly news — just another “dog bites man” story.
Then I realized it was just a story about allowing ordinary people to risk their own money – now that’s a “man bites dog” story!
Along the same lines, the WSJ’s Notable and Quotable series provided the following excerpt from Friedrich A. Hayek’s "The Constitution of Liberty" (1960) on the illusory nature of progressive taxation and large increases in governmental spending:
Not only is the revenue derived from the high rates levied on large incomes, particularly in the highest brackets, so small compared with the total revenue as to make hardly any difference to the burden borne by the rest; but for a long time . . . it was not the poorest who benefited from it but entirely the better-off working class and the lower strata of the middle class who provided the largest number of voters.
It would probably be true, on the other hand, to say that the illusion that by means of progressive taxation the burden can be shifted substantially onto the shoulders of the wealthy has been the chief reason why taxation has increased as fast as it has done and that, under the influence of this illusion, the masses have come to accept a much heavier load than they would have done otherwise. The only major result of the policy has been the severe limitation of the incomes that could be earned by the most successful and thereby gratification of the envy of the less-well-off.
And Jason Kottke noted the technological irony of the week:
Now you can go to the iTunes Store to buy the Kindle app from Amazon that lets you read ebooks made for the Kindle device on the iPhone.
Finally, legendary Houston trial lawyer Joe Jamail passes along this anecdote about the late, great Houston criminal defense lawyer, Percy Foreman:
In the early 1980s, Jamail represented his courtroom idol, Houston criminal defense attorney Percy Foreman, whose neck was injured when his car was rear-ended by a commercial truck. On direct examination, Foreman testified that he had not experienced any neck problems before the accident, and that he was entitled to $75,000 for lost income due to the injury.
But on cross-examination, the defense revealed that Foreman had been hospitalized nine times for neck problems prior to this accident.
“The jury looked at me, expecting me to give them an answer,” says Jamail. “So I told them that Percy had been a great lawyer throughout his life, but that he was now just an old man and was growing senile.”
At that moment, Foreman jumped up and yelled out across the courtroom, “You goddamned son of a bitch!”
“See what I mean,” Jamail immediately told jurors. “He doesn’t even know where he is right now.”
The jury awarded Foreman the sum of $75,004. Jamail says he never figured out why the extra $4.
As noted here last fall, one of the key dynamics that is delaying the recovery of financial markets is the resistance of many societal forces to allow the markets to allocate the risk of loss among the various investors in failed businesses.
Inasmuch as private capital will not invest in even a potentially viable business until that company’s financial condition is likely to reward such an investment, the liquidation of unviable companies is an essential part of the process that has allowed market-based economies to generate the most wealth and jobs throughout modern history.
Despite the foregoing, the beneficial aspects of liquidating unprofitable businesses remains often unappreciated. A scene from the 1991 Norman Jewison film "Other’s People Money" illustrates this truth wonderfully, first as Gregory Peck’s character demonizes the forces of liquidation and then as Danny DeVito’s "Larry the Liquidator" shatters the myths upon which such demonizing rests. Enjoy.
Tiger Woods returned from major knee surgery to make his first appearance of the PGA Tour season this week, although Tim Clark made it a brief initial appearance.
Meanwhile, Woods’ major sponsor Nike rolled out this commercial to celebrate Woods’ return. It continues the trend of commercials representing some of the most creative product on television. Watch through the end and enjoy.
Don’t miss Mark Seal’s wonderful Vanity Fair piece on the making — and particularly the war over casting — of The Godfather:
With The Godfather, the era of the $100 million blockbuster had begun, and its creator was the last to know.
“I had been so conditioned to think the film was bad—too dark, too long, too boring—that I didn’t think it would have any success,” says Francis Ford Coppola.
“In fact, the reason I took the job to write [a screenplay for the 1974 remake of] The Great Gatsby was because I had no money and three kids and was sure I’d need the money. I heard about the success of The Godfather from my wife, who called me while I was writing Gatsby. I wasn’t even there."
"Masterpiece, ha! I was not even confident it would be a mild success.”
Check out Winston Churchill’s entirely wonderful daily routine from the quite interesting blog, Daily Routines:
Despite all this activity Churchill’s daily routine changed little during these years. He awoke about 7:30 a.m. and remained in bed for a substantial breakfast and reading of mail and all the national newspapers. For the next couple of hours, still in bed, he worked, dictating to his secretaries.
At 11:00 a.m., he arose, bathed, and perhaps took a walk around the garden, and took a weak whisky and soda to his study.
At 1:00 p.m. he joined guests and family for a three-course lunch. Clementine drank claret, Winston champagne, preferable Pol Roger served at a specific temperature, port brandy and cigars. When lunch ended, about 3:30 p.m. he returned to his study to work, or supervised work on his estate, or played cards or backgammon with Clementine.
At 5:00 p.m., after another weak whisky and soda, he went to be for an hour and a half. He said this siesta, a habit gained in Cuba, allowed him to work 1 1/2 days in every 24 hours. At 6:30 p.m. he awoke, bathed again, and dressed for dinner at 8:00 p.m.
Dinner was the focal-point and highlight of Churchill’s day. Table talk, dominated by Churchill, was as important as the meal. Sometimes, depending on the company, drinks and cigars extended the event well past midnight. The guests retired, Churchill returned to his study for another hour or so of work.
