Solzhenitsyn speaks

solzh-1.jpgWhen you have a few minutes, don’t miss this Speigel Online interview with prominent Russian writer and Nobel laureate Alexander Solzhenitsyn. Check out Solzhenitsyn’s overview of Russia’s political leaders since the fall of Communism:

Gorbachev’s administration was amazingly politically naÔve, inexperienced and irresponsible towards the country. It was not governance but a thoughtless renunciation of power. The admiration of the West in return only strengthened his conviction that his approach was right. But let us be clear that it was Gorbachev, and not Yeltsin, as is now widely being claimed, who first gave freedom of speech and movement to the citizens of our country.
Yeltsin’s period was characterized by a no less irresponsible attitude to people’s lives, but in other ways. In his haste to have private rather than state ownership as quickly as possible, Yeltsin started a mass, multi-billion-dollar fire sale of the national patrimony. Wanting to gain the support of regional leaders, Yeltsin called directly for separatism and passed laws that encouraged and empowered the collapse of the Russian state. This, of course, deprived Russia of its historical role for which it had worked so hard, and lowered its standing in the international community. All this met with even more hearty Western applause.
Putin inherited a ransacked and bewildered country, with a poor and demoralized people. And he started to do what was possible — a slow and gradual restoration. These efforts were not noticed, nor appreciated, immediately. In any case, one is hard pressed to find examples in history when steps by one country to restore its strength were met favorably by other governments.

Read the entire interview.

An easy prediction

Metrorail%20car-Houston080807.jpgBuried in the Chronicle’s article on the Metropolitan Transit Authority’s latest propaganda release regarding the proposed University light rail line is the following snippet:

The study estimates say the Cummins-Wheeler-Elgin combination is the least expensive of the routes considered, at $715 million, compared with $836 million for the Southwest Freeway-Alabama combination.

Prediction: Both routes will cost substantially more than the estimates and the revenue generated from the ridership will not come close to meeting the operating expenses of the line.

Gretchen Morgenson’s recurring nightmare

morgensongretchen%20080807.jpgLarry Ribstein used to be NY Times business columnist Gretchen Morgenson’s worst nightmare, but the nightmares receded a bit when Professor Ribstein tired of exposing the vacuous nature of her weekly columns after a year or so. Nevertheless, Morgenson’s nightmare has not gone away completely:

[Kevin J.] Murphy and [Jan] Zaojnik attribute the rise in the relative value of managerial ability to a variety of factors. Most interestingly, these include the need for public relations skills in dealing with external constituencies and increased media coverage. Other factors include the need to be conversant with other disciplines — economics, management science, accounting, finance. The authors argue that firm-specific skills are becoming less important because data are no longer “buried in the bowels of the organization,” but are easily accessible by computers.
The authors conclude that the importance of general rather than firm-specific human capital means that:

CEOs can capture the whole marginal product created by their transferable ability, but the lack of alternative use for their firm-specific skills means that they can only extract a fraction of the rents created by this part of their human capital. Therefore, a shift in the relative importance of general managerial ability will lead to higher wages even if overall managerial marginal productivity declines.

. . .Most importantly, I love the irony here. Murphy and Zaojnik are saying that part of what is driving executive pay up is the skill in dealing with Gretchen Morgenson and her ilk ñ the very people who are complaining about that pay.

Read the entire post.