Daily Archives: February 13, 2004

Armageddon, Southwest Freeway Style

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For the next three years, it would be a very good idea to avoid this area around the Spur 527 into downtown Houston from the Southwest Freeway as a major road renovation project gets underway this weekend. Frankly, it would be a good idea to avoid the entire stretch of the Southwest Freeway from Kirby or Shepard Drives on the west to the 288 Freeway on the east. Until drivers get used to this project and readjust driving routes, be scared. Very scared.

The Right Mistake to Make

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Jonathon Rauch senior writer for the National Journal states in this solid piece that the War in Iraq was a mistake, but the right kind of mistake to make. Mr. Rauch concludes as follows:

If reasonable people thought Saddam possessed forbidden weapons, that was because Saddam sought to give the impression that he possessed them. He may have believed he possessed them. (His fearful and corrupt scientists, Kay hypothesized, may have been running a sham weapons program.) For four years after the 1991 Persian Gulf War, Iraq successfully hid its chemical weapons program. When a defector blew the whistle, weapons inspectors were stunned at the extent of Saddam’s deception. The Iraqis responded not by coming clean but by redoubling their efforts to obstruct and intimidate — for example, interfering with inspectors’ helicopter flights and, at one point, firing a grenade into their headquarters. No one could have failed to conclude that Saddam was hiding the truth.
The truth he hid, however, was not his weapons but his weakness. Or perhaps his minions were hiding his weakness from him. In either case, his power and prestige depended upon his fearsome reputation at home and his defiant posture abroad. He was contained but could not afford to let anyone know it, for fear of being invaded or overthrown. So he waved what looked like a gun and got shot.
Many people now demand to know why American intelligence was so badly fooled. The subject certainly merits investigating. Questions should be asked. Chins should be stroked. But even without an investigation, we know the most important reason we were fooled: Saddam Hussein did everything in his power to fool us, and by the time he stopped trying to fool us — if he stopped trying — it was too late for anyone ever to believe him.
The war was based on lies. Not Bush’s or the CIA’s; Saddam Hussein’s.

Speaking of golf, did you hear the one about . . .

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Tiger Woods cracked a good one yesterday during the opening round of the Buick Open in San Diego. While waiting to play a shot and watching a huge Navy vessel off the Pacific coast, Woods asked:
”Is that (Greg) Norman’s boat?”

Vijay’s streak? So what?

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The NY Times Dave Anderson weighs in with this piece that points out that professional golfer Vijay Singh‘s current streak of finishing in the top 10 in 12 straight Tour events is not particularly impressive in comparison to the streaks that Byron Nelson and the late Ben Hogan put together years ago. Author Dan Jenkins, the defender of all things old in regard to professional golf, would heartily agree with Mr. Anderson.
By the way, speaking of Mr. Hogan, Curt Sampson‘s “Hogan” is an excellent biography of that complex and talented man.

Southwest Airlines takes Philly by storm

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One of Texas’ great business success stories–Southwest Airlines–is causing heartburn to U.S. Airways in the Philadelphia market with Southwest’s tried and true formula of low fares and prompt service.

Revisiting Clinton era fiscal policy

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Two first rate economists–Jeffrey Faux and Bradford DeLong–take a close look at the legacy of former Clinton Administration Treasury Secretary Robert Rubin’s fiscal policies in this exellent piece from The American Prospect Online. A sampling of the observations:

(from Mr. Faux):
As Rubin tells the story in his new memoirs, he persuaded Clinton early on to make financial-market “confidence” the administration’s chief economic priority. Key to the strategy was Greenspan, who was supposedly concerned that spiraling federal deficits would ignite inflation, forcing him to raise interest rates and thus choke off growth. Cut the deficit, argued Rubin, and Greenspan will let the economy live.
* * *
So Rubin’s plan worked, but the cost was high. Hopes that the peace dividend from the end of the Cold War would finance major new programs in health care, education, and other areas of public need were dashed. Social investments as a share of the country’s national income actually declined over the Clinton years. Fights over free trade split the party and contributed to the loss of the House of Representatives, from which Democrats have still not recovered. And deregulation led to an orgy of irresponsible speculation and fraud that eventually left workers without pensions, small-scale shareholders with worthless paper, and California — among other places — without the money to pay for basic services.
(from Professor DeLong):
Running surpluses now, giving the country the debt capacity to finance these forthcoming rises in social-insurance expenditures, seemed to us a wise policy. The alternative — to merely stabilize the debt-to-GDP ratio and make no special provision for the generational future — seemed to us likely to create a situation in which a) the elderly programs eat the rest of the social-insurance state alive and b) they then self-destruct.
Mr. Faux closes by posing this interesting question: “Does anyone believe that more investment in health care and education would have been less productive for the American economy in the 1990s than yet more private investment in financial derivatives or shopping malls increasingly loading up consumers with imported toys and unsustainable debt? “

Can Tinkerbell fend off Howard Stern?

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Virtually every major newspaper is all over the Comcast bid for Disney. My vote for best coverage so far is the Wall Street Journal (subscription required), although the LA Times and the NY Times are doing a good job, too. Past posts about the proposed merger are here and here.
Professor Stephen Bainbridge of the UCLA School of Law made the interesting observation in his blog yesterday that the absence of a poison pill in Disney’s corporate takeover defense strategy may ultimately play an important role in the success of Comcast or some other company’s bid for Disney. In so doing, Professor Bainbridge provides an excellent summary explanation of poison pills and how they are used to fend off hostile takeovers.

Batter up!

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The college baseball season begins this weekend in Houston with the annual Minute Maid College Classic at Minute Maid Park. The six team event, which includes Rice, Houston, Texas, Texas Tech, Ohio State, and Kansas State, runs through Sunday and is held in conjunction with the Astros’ Fan Funfest at the ballpark.
College baseball is big in Texas in general and Houston in particular. Rice is the defending NCAA National Champion and Texas won the championship the year before. Moreover, Houston has an outstanding program, and almost knocked out Rice last year and Texas the year before in the NCAA Regional Finals. Finally, both Rice and Houston have outstanding on-campus ballparks that make watching a game at either place a highly enjoyable experience.
Although not as popular as either big-time college football or basketball, a good case can be made that college baseball is a much better structured and a truer college sport than either football or basketball. Unlike professional football and basketball, professional baseball has a well-established minor league (i.e., apprentice) system. Consequently, high school players with professional baseball potential have a choice coming out of high school–either sign a professional contract and apprentice in the minor leagues or take lesser pay (i.e., the value of a full or partial college athletic scholarship) and play baseball in college for a few years. As a result, big-time college baseball programs are generally comprised of an attractive mix of players–a few players with professional potential who have opted to develop for a time in a fun college environment and the majority of players who are simply playing for a little scholarship money and the love of the game.
In contrast, high school players with professional football potential really do not have much of a choice. With no minor league football system in place, they must apprentice in college football–regardless of whether they have any interest in a college education–because few high schoolers are physically developed sufficiently to qualify for an NFL team. Professional basketball is somewhat different, primarily because the personnel requirements of the professional teams are signicantly less than football or baseball and thus, the professional teams can use a few of their roster spots to develop young phenom players who are not ready yet to play at the NBA level. Nevertheless, unless a high school basketball player with professional potential is a phenom, his only real alternative is to develop in college basketball, again regardless of whether the player really has any interest in a college education.
Accordingly, professional football and basketball have shifted much of the risk and cost of player development to big-time college football and baseball. As a result, those college sports are filled with players who really do not appreciate or belong in a university environment. So long as university presidents are willing to accept that risk from the pros, I do not expect any meaningful reform in college football or basketball to occur. However, if the university presidents want a model of how to reform those sports, they need to look no further than college baseball for an excellent example of how a college sport can thrive without being an apprentice league for professional sports.

Enron Task Force Focusing on Skilling

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The Houston Chronicle reports today that the Enron Task Force is close to indicting Jeff Skilling, the former CEO of Enron, possibly as early as next week. The recent plea bargain of former Enron CFO and Skilling protege Andrew Fastow, noted in this earlier post, probably means that the Government is using Mr. Fastow as a prime source and eventual witness in its case against Mr. Skilling.
Despite the public perception that a conviction in a criminal case against Mr. Skilling is the legal equivalent of a gimme, I’m not buying it. For all its well-publicized excesses and arrogance, Enron spent multi-millions each year on outside legal and accounting analysis and review of its various deals and public disclosures. You can bet that Mr. Skilling’s capable defense lawyer–Bruce Hiler of Washington, D.C.–will point repeatedly to Mr. Skilling’s disclosure to and reliance on Enron’s accountants–Arthur Andersen–and its top notch law firms–Vinson & Elkins, among many others–in defending against any allegation of criminal intent in his conduct of Enron’s affairs.