The Rational Optimist
Reply
Category Archives: Business – General
Colbert and that entertaining form of corruption
Stephen Colbert provides his amusing spin on the corruption of big-time college sports by interviewing Taylor Branch, author of the e-book The Cartel, which is an expanded version of Branch’s cover story from the October issue of The Atlantic, The Shame of College Sports (H/T Jay Christensen).
Look Who is Advising the FBI
So, former Enron Task Force director Andrew Weissmann has found his way back into government service, this time as general counsel to the Federal Bureau of Investigation.
This is the fellow who – among other outrageous tactics — is primarily responsible for prosecuting Arthur Andersen out of business and for destroying the careers of several innocent Merrill Lynch executives in the notoriously misguided Nigerian Barge case.
And now he is the primary counselor to the federal government’s primary investigative force.
Weissmann’s track record of abuse of power should be grounds to preclude him from such a position. But in this day and age, it is viewed as sound preparation.
Not a particularly pleasant thought to have if the Devil ever turns on you.
Generating Energy Right Where We Are
Merle Hazard on moral hazard
Merle Hazard’s latest, Diamond Jim (H/T Greg Mankiw)
The WSJ’s Myths
We Americans do love our myths, as the Wall Street Journal reminds us this week with its glowing 10-year anniversary (!) tribute to Enron “whistleblower,” Sherron Watkins.
Of course, even a cursory review of the facts demonstrates that Ms. Watkins is not – and never was — a whistleblower.
Nevertheless, the nation’s leading business newspaper persists in a myth that is demonstrably wrong. In fact, the Journal’s coverage of Enron was questionable from the start.
Why is that?
Well, such levels of disingenuity are rarely attributable to one or even just a few factors, but Dio Favatas notes an interesting aspect of the Journal’s coverage of another business executive – Frank Quattrone – whose stellar career was sidetracked by a dubious prosecution.
You may remember the Quattrone prosecution – a paper-thin case in the Enron mode that should never have been pursued. After Quattrone was convicted in a farce of a trial, the Second Circuit resoundingly reversed the conviction. Quattrone eventually settled with the prosecution in a favorable deferred prosecution agreement under which he admitted no wrongdoing whatsoever.
You would think that the injustice that was heaped upon Quattrone before the Second Circuit intervened would give the Journal pause regarding its demonization of Quattrone before, during and after the trial. But as Favatas chronicles, the Journal instead continues to attempt in a sophomoric manner to make Quattrone out to be something other than the hard-working, talented and successful investment banker that he is.
To make matters worse, in doing so, the Journal assigns a reporter to write the story who has a financial interest in making Quattrone appear to be a shady character.
Clarence Barron founded the Journal in the early 20th century on the personal credo that the Journal “must stand for what is best in Wall Street.”
It is sad to see how far the Journal has drifted from that salutary foundation.
Thinking about Jobs
We are quickly approaching overload on articles about the late Steve Jobs, but Martin Wolf’s post in the Financial Times on what Jobs’ career teaches us is definitely worth a read.
In short, Wolf explains that Jobs was the quintessential American entrepreneur who was able to marry form with function while bringing a showman’s bravado in promoting Apple products. Not a bad prescription for success.
Meanwhile, David Gorski provides this interesting analysis of Jobs’ bout with the pernicious disease that killed him, pancreatic cancer. Inasmuch as that cancer deprived Houston of one of its greatest teachers, I have followed the clinical research on the disease with interest over the past several years. Dr. Gorski does a masterful job of explaining the complexities involved in treating pancreatic cancer, while also taking a well-deserved swipe at the snake-oil salesmen who were quick to seize upon Jobs’ tragic death to hawk their “alternative treatments” for this deadly disease.
One of many good points that Dr. Gorski makes is the risk that patients such as Jobs take in delaying surgery on cancers such as this while exploring alternative medicine treatments:
If there’s one thing we’re learning increasingly about cancer, it’s that biology is king and queen, and that our ability to fight biology is depressingly limited. In retrospect, we can now tell that Jobs clearly had a tumor that was unusually aggressive for an insulinoma. Such tumors are usually pretty indolent and progress only slowly. Indeed, I’ve seen patients and known a friend of a friend who survived many years with metastatic neuroendocrine tumors with reasonable quality of life.
Jobs was unfortunate in that he appears to have had an unusually aggressive form of the disease that might well have ultimately killed him no matter what. That’s not to say that we shouldn’t take into account his delay in treatment and wonder if it contributed to his ultimate demise. It very well might have, the key word being “might.” We don’t know that it did, which is one reason why we have to be very, very careful not to overstate the case and attribute his death as being definitely due to the delay in therapy due to his wanting to “go alternative.”
Finally, Jobs’ case illustrates the difficulties with applying SBM to rare diseases. When a disease is as uncommon as insulinomas are, it’s very difficult for practitioners to know what the best course of action is, and that uncertainty can make for decisions that are seemingly bizarre or inexplicable but that, if you have all the information, are supportable based on what we currently know.
In short, despite the advances of modern medicine, there is still much that we do not know about how disease attacks our bodies.
Patients beware.
Markets in Self-Publishing
Despite our legislators’ efforts, it’s hard to keep vibrant markets down.
One of the most interesting emerging markets that I’ve been following recently has been in self-publishing. UCLA business law professor and longtime blogger Stephen Bainbridge – who, along with Larry Ribstein, is a blogosphere leader in advancing the understanding of corporate and business law principles – self-published his most recent corporate law book as a Kindle e-book. Professor Bainbridge passes along his reasoning for doing so here.
In short, Professor Bainbridge reasons that he will make money with his e-book than for law review articles, he controls the marketing and price of the book, and he keeps all the proceeds instead of just royalties. Moreover, the self-publishing route allows him to update his work in a timely manner so that he can provide analysis of recent court decisions that wouldn’t be possible under the conventional book model.
Meanwhile, similar self-publishing ventures are emerging in the music industry.
For example, popular Houston-based musician Robbie Seay – the worship leader at Houston’s fascinating inner-city church, Ecclesia – recently went the Kickstarter route to raise the funds necessary to self-produce his new CD. Seay – who melds spiritually-based contemporary music with a rocker’s edge – raised enough money to self-produce his CD in two weeks and is now shooting to reach 1,000 backers in the next two weeks.
These are wonderful developments. Talented individuals taking risks that provide consumers at low cost with scholarship and music that might not otherwise get published.
In other words, the power of markets at work.
The Generosity Experiment
A masterful piece on that entertaining form of corruption
Regular readers of this blog know that I have regularly commented on the corrupt nature (see also here) of big-time college football and basketball.
Although corrupt, big-time college football and basketball resist comprehensive reform because – let’s face it – they are a very entertaining form of corruption.
But as this masterful (and quite long) Taylor Branch/Atlantic article explains, that resistance to reform is being challenged:
A litany of scandals in recent years have made the corruption of college sports constant front-page news. We profess outrage each time we learn that yet another student-athlete has been taking money under the table. But the real scandal is the very structure of college sports, wherein student-athletes generate billions of dollars for universities and private companies while earning nothing for themselves.
Here, a leading civil-rights historian makes the case for paying college athletes–and reveals how a spate of lawsuits working their way through the courts could destroy the NCAA.
And one of those lawsuits is by a former Rice student-athlete!
For anyone interested in the future of big-time college football and basketball, this is a must read. A series of short interviews of Branch are associated with the article and provided below: