The Lee and Williams deals

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c_lee_200.jpgwoodywilliams2005.JPGThe Stros jumped into the super-charged 2006 free agent market in a big way yesterday by signing former Brewers slugger Carlos Lee and, in a lesser deal, former Padres starter Woody Williams. Although there is always a certain amount of giddiness whenever the hometown club opens up the bank vault to attract a couple of star players who might propel the Stros back into the playoffs, the stark reality is that these two deals are highly risky and do little to solve the Stros’ main problem.
The Lee contract is the bigger of the two deals by far, $100 million spread over 6 seasons with a no-trade clause for the first four, which makes Lee the highest-paid Stro player this side of Roger Clemens. Lee is a 30 year old, 6’2″, 235 lbs Panamanian leftfielder who reached the majors in the White Sox organization at the age of 23 and basically showed little potential during his first three seasons. He had his first good season with Sox in 2002 as a 26 year old, hitting 17 RCAA/.359 OBA/.484 SLG/.843 OPS. After falling off some in 2003, Lee had his best season in the majors in 2004 when he hit 26/.366/.525/.891, including 31 taters. After falling off a bit again in 2005 when he was traded to the Brewers, Lee had another solid season in 2006 with the Brewers and the Rangers, hitting 24/.355/.540/.895, including 37 yaks. His career statistics over eight seasons are 78/.340/.495/.835 with 221 homers, although it should be noted that he has been substantially more productive during his past four seasons than he was in his first three.
Thus, although he becomes the highest-paid Stros hitter, Lee has been nowhere near as productive a hitter over his career as Stros 1B Lance Berkman (353/.420/.621/1.041). Perhaps Lee is a late-bloomer and will continue his productivity surge of the past four seasons over the next six seasons. However, Lee doesn’t walk much, so there is a higher than normal risk that his on-base average will decline as he gets older, and he is neither fast nor a good fielder. Accordingly, the Stros bought high and long on a hitter who has been roughly 20% as productive as Berkman during his career to date. Maybe it works out, but nobody should be deluding themselves that the Stros got a steal.
The two-year, $12.5 million Williams deal is not as risky as the Lee deal, although any type of deal on a 40 year-old pitcher not named Clemens has to be viewed with at least one raised eyebrow. The good news is that Williams has been a consistently productive pitcher over his 14 year career, rarely magnificent but just as rarely bad. He has had only one really good season, from midway thought the 2001 season through midway through the 2002 season when he pitcher 32 RSAA/2.40 ERA, but he was shelved midway through the 2002 season with arm trouble. On the other hand, his only really bad season was in 2004 with the Padres (-19 RSAA/4.85 ERA), but he bounced back last season to post a respectable 9 RSAA/3.65 ERA, which was about the the same as Andy Pettitte posted last season with the Stros. Williams’ career numbers are 41 RSAA/ 4.09 ERA.
So, the Stros clearly strengthen their club with these signings, but the question looms whether they overpaid for what they are likely to receive. I would have preferred J.D. Drew to Lee among free agent sluggers, but Lee is clearly more durable than Drew and there is that whole Scott Boras thing with regard to dealing with Drew. Williams appears to be a reasonable risk, but without Clemens and Pettitte, the Stros are still in need of several of their young pitchers to step up to fill out their starting rotation next season.
But more importantly, neither of these deals addresses the Stros’ main problem, which is having unproductive hitters such as Taveras, Everett, Ausmus and Bidg last season in the Stros’ everyday lineup. If Luke Scott can continue his productive hitting and takeover in right field, then the Stros could take care of one of those problems by repacing Taveras in centerfield with either Chris Burke or a hopefully rebounding Jason Lane. But even with that move, given the Stros’ indulgence of Bidg’s quest for 3,000 hits and Everett’s superlative defense at short, something needs to be done to replace Ausmus at catcher or else the Stros will continue to have three far-below National League-average hitters in their everyday lineup. The Stros got to a World Series in 2005 with such a lineup, but it took one of the best pitching performances by three starting pitchers on one team in Major League Baseball history to accomplish that. Inasmuch as that is not likely to happen again, here’s hoping that the Stros aren’t finished dealing this off-season to plug at least another of those holes in their lineup.
Lee and Williams’ career statistics are below.

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An NY Times snit fuels Gretchen Morgenson’s nightmare

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morgensongretchen3.jpgIt’s not every day that a newspaper editor’s defense of one of the newspaper’s star columnists ends up fueling the cause to expose the vacuity of the columnist’s work.
As noted earlier here and here, Clear Thinkers favorite Larry Ribstein has written a series of posts over the past year or so in which he uses the weekly columns of NY Times business columnist Gretchen Morgenson as examples of the mainstream media’s misrepresention and misinterpretion of business issues to further a generally anti-big wealth agenda. That anti-big wealth agenda was in full bloom during the Enron criminal trials, which I noted on several occasions, most recently here.
Well, along those same lines, the Wall Street Journal’s Holman Jenkins recently wrote this column ($) (described here in length in an earlier Ribstein post) in which he exposes an interesting fact about this earlier Times story (Times Select-$) on a supposedly virtuous CEO who turned down stock options because his father told him “‘don’t ever feel that you are worth it.’ I don’t want him to say that to me again.”
Turns out that Jenkins had been offered the story before it ended up in the Times, but passed on it when he discovered facts the largely undermined the excessive compensation slant that the Times ultimately put on the story — the CEO owned a big stake in a privately held company and so didn’t need the options as an incentive and the CEO’s doting father was a former Tyco board member and mentor of Dennis Kozlowski who suffered as a result of Kozlowski’s excesses in that case. Neither of those salient facts made it into the Times story, which was written by Morgenson, a fact that Jenkins didn’t even mention in his column.
At any rate, it didn’t take long for the Times long to spring to Morgenson’s defense. In this WSJ letter to the editor ($) entitled “Misrepresented, Insulted and Belittled.” Times executive editor Bill Keller lashes out at Jenkins:

Mr. Jenkins misrepresented my paper’s reporting, casually insulted one of the best journalists in the business, denounced our editors for dereliction of duty, and, in conclusion, belittled the corporate structure that prevents the New York Times from being owned by a hedge fund.

The rest of Keller’s letter is long on similar bombast but short on substance, a point that Professor Ribstein makes in this post disassembling Keller’s letter. In a wonderful twist of fate, Professor Ribstein reveals at the end of his post that Keller’s letter has actually had the effect of facilitating the cause of exposing Morgenson’s agenda:

I confess that after seven months of Morgenson I was tempted to go onto other subjects. I’ve got articles and books to write, classes to teach, papers to grade. The blog basically comes out of my sleep time. So I have to make sure that what I write about has some sort of payoff (after all, I don’t even sell ads). I was starting to wonder whether I should continue to cast my stones into the darkness.
But the NYT’s editor’s odd and completely unjustified attack on Jenkins (who, by the way, didn’t even mention Morgenson by name in his column) convinced me that the problem here runs very deep. So I’m going to keep slogging.

Can someone please get Ms. Morgenson another stiff drink?
By the way, Keller’s piece also contains a curious defense of the Times’ anti-takeover mechanism that is contrary to Morgenson’s usual position regarding shareholder supremacy. Keller contends that the family trust that controls a majority of the voting shares (but not a majority of the equity) is committed to serious journalism, while the majority owners (you know, which could be those devious and profit-fixated hedge funds) would not be. In other words, shareholder power is good for those bad companies that allow their executives to make too much money, but it is bad for news media companies, which have no such problems.
Got that?

Giving thanks to Milton Friedman’s bookie

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milton-friedman-9.jpgOne of the underappreciated contributions of the late Milton Friedman is the impact of his market theories on the explosive development of derivative financial markets, particularly after the Nixon Administration abandoned in 1971 the fixed exchange rates that the Allies had established under the Bretton Woods Accords of 1944.
As Jim Johnston of the Heartland Institute notes here, Nixon Administration Treasury Secretary George Shultz — a close friend of Professor Friedman’s — led the campaign to remove the fixed exchange rates. As the story goes, part of Secretary Schultz’s motivation for removing the fixed exchange rates was Professor Friedman’s disappointment that he could not place a bet against the British pound in the financial markets of the late 1960s. As we all know now, replacing regulation of fixed exchange rates by central bankers with markets for foreign exchange futures such as FOREX derivative contracts substantially improved the ability of business interests to hedge risk in currencies. Johnston explains:

Banks initially opposed the [Forex derivative] contracts, calling them the creation of Chicago “crapshooters.” Later the banks used the FOREX contracts to hedge the tailored currency guarantees they sold to their customers. The move from regulation to markets was to pave the way for derivative contracts in heating oil, gasoline, crude oil, and natural gas in the order that they were deregulated.

The growth in financial and other derivatives, where speculators meet hedgers, continues even today. Indeed, so much so that the daily volume of trading exceeds trillions of dollars. It would not be unfair to say financial derivative trading is one of the largest institutions in the world.

Just think, it started out by being Milton Friedman’s bookie.

The story of the open road

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80r.gifAs many of us get ready to hit the road over the holiday weekend, Ralph Bennett in this TCS Daily article provides an excellent overview of the birth of the nation’s Interstate Highway System during the Eisenhower Administration. We tend to take the system for granted these days, but it is truly an engineering and economic marvel that is one of our many blessings for which we will give thanks this holiday weekend.

A dream golf round

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Pebble Beach Course.jpgSounds as if Jack Kendall, who owns a couple of Lexus dealerships in the Houston area, had the round of a lifetime recently at Pebble Beach Golf Club:

Kendall, 63, . . . made Pebble Beach history when he became the first golfer, amateur or professional, to ace two holes in the same round on the first nine holes of the 86-year-old course. His holes-in-one came on the par-3 5th and 7th holes.

To put this accomplishment in perspective, many very good golfers go a lifetime without ever making a hole in one. To it twice in a round is almost unheard of. To do it twice in a round while playing one of the most revered golf courses in the US? Now, that’s going to be rather difficult to top.

While the Weary case is dismissed, the SWAT danger continues

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Swat icon.jpgIn the right move, Texans’ offensive lineman Fred Weary’s criminal case was dismissed yesterday by Harris County Court at Law Judge Pam Derbyshire, who commented from the bench that Weary did not use enough force against police officers during the Nov. 14 incident to justify either the charge or, presumably, being Tasered.
Meanwhile on the police overreaction front, this Pokerati series of posts chronicles the latest Dallas SWAT team “success” — breaking into and destroying several of the city’s underground poker rooms. Pokerati has firsthand accounts of Dallas SWAT teams swooping into the poker rooms, breaking windows, kicking down doors, and charging with assault weapons drawn into peaceful gatherings of “dangerous” Texas Hold ‘Em enthusiasts. I’m sure everyone in the Metroplex is sleeping more restfully now that these evil card sharpies are behind bars.
As former Cato Institute policy analyst Radley Balko shows in this Cato study, small municipalities frequently misuse SWAT squads for routine police work, which has led to an increasing number of botched raids resulting in injury or even death to innocent citizens. The Dallas poker raids were only the most recent example of unnecessary and dangerous SWAT unit deployments; this earlier post reported on one in a Houston suburb. Police overreaction is dangerous enough when it occurs in the spur of the moment as in the Weary case. But the risk of innocent citizens being harmed goes off the charts when SWAT teams are unnecessarily deployed to break up peaceful gatherings of people engaging in harmless activities.

Is the Big 12 Conference really viable?

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BIG12c.jpgAs noted earlier here, the Big 12 Conference was formed as a money grab rather than because of any meaningful allegiances between most of the conference members. And, as noted here, football programs of the institutions in the Big 12 North Division have a difficult time competing with their better-funded and located (at least in terms of attracting good football players) brethen in the Big 12 South Division.
Well, Mark Kiszla of the Denver Post has been noticing the same thing. In this column entitled Divided, Big 12 bound to fall, he observes that the Big 12 is a poorly-structured alliance of convenience based almost entirely on money. As such, Kiszla predicts that the conference is destined to fail:

A football conference divided cannot stand.
There’s a feud in the Big 12 Conference between the North and South. It’s a civil war in which nobody wins and Colorado too often loses.
This league – held together by little except greed and a championship game that’s regularly as flat as a too-long-open can of Dr Pepper – is a clash of cultures as different as the Birkenstocks in Boulder and the ten-gallon hats of Texas.
In a conference in which the haves and have-nots are divided by geography, what has gone wrong? [. . .]
Can’t we all get along here?
I’m afraid not.
For a league in which almost half the football teams have trouble putting up a good fight, there’s way too much bad blood.
The Big 12 is a conference split by a Red River of tears, as the bullies from the south have won 13 of 16 games this season against the 98-pound weaklings from the northern plains.
Although the Big 12 boasts of three squads ranked among the top 25 (Longhorns, Sooners, Aggies), you again hear barely any noise from the north, other than the wind blowing through towns from Lawrence, Kan., to Ames, Iowa, as the Jayhawks and Cyclones get blown away by real football teams.
If something does not change, the Big 12 will be slowly ripped asunder, and I fear as the imbalance of power grows worse, the league as we know it will not exist 10 years down the road.

Just another example of the pressures arising from the increasing gap between the haves and the have-nots in big-time minor league — er, I mean — college football.

Does anyone take John Edwards seriously anymore?

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edwards_convention_5.jpgAs noted in this post from late 2004, a decent case can be made that former Democratic vice-presidential candidate was the difference in costing John Kerry the close 2004 Presidential election, particularly after his Benny Hinn imitation on the campaign trail.
But now as Edwards postures toward a run for the Democratic Party presidential nomination in 2008, he provided us an exhibition of hypocrisy that is brazen even by Washington, D.C. standards. On the same day that Edwards was bashing Wal-Mart on a conference call with labor leaders, an Edwards “aide” was requesting that the local Wal-Mart bump the former senator to the front of the line to get a Playstation 3 for his son. Reason’s Jeff Taylor wryly observes:

The alternative to a Democratic presidential campaign marked by a downward spiral of Pythonseque depravation one-upsmanship might actually address issues like the federal entitlement explosion or comprehensive income tax reform, two areas where Republicans have failed miserably to advance any coherent solution. Should Edwards or Hillary Clinton or someone find away to talk about these things without class-warfare cant, they’ll have a head start on the general election.
In any event, maybe the best thing for Wal-Mart to do is stop chortling and go ahead and give John Edwards a PS3 and a couple games. Throw in a flat-panel too. Maybe that way he’ll reacquaint himself with American prosperity and abundance and be a better candidate for the experience.

Is Hillary Clinton even going to have any competition for the 2008 Democratic Party presidential nomination?

Piling on in the Slade case

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Priscilla Slade5.jpgThis Chronicle article reports that the criminal case of former Texas Southern University president Priscilla Slade does not appear to be moving toward an amicable resolution:

The Harris County District Attorney’s Office is investigating suspicions that former Texas Southern University President Priscilla Slade may have lied to the grand jury.
Prosecutor Donna Goode sought today to unseal Slade’s grand jury testimony so that Slade’s former assistant could review it for inconsistencies.
If conflicts are found, Slade could be charged with aggravated perjury.

Slade already faces an effective life prison sentence if convicted on felony charges of misapplication of fiduciary property, so why seek an additional ten years on an aggravated perjury charge? Slade attorney Mike DeGeurin suggests that the prosecution wants to use the grand jury testimony in preparing witnesses who would not otherwise have access to the secret testimony.
Meanwhile, Slade faces a possible February 16, 2007 trial date in what is shaping up to be one of the ugliest white collar criminal cases to take place in Harris County District Court in a long while.

Politics and the Evangelicals

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Ted_Haggard_(ROAE)3.jpgThis NY Times article reports on the how Ted Haggard‘s evangelical church dealt with the termination and succession issues in the large Colorado church that Haggard had started and had become identified with him. The article concludes that the church ultimately handled the termination and succession reasonably well, although it appears that warning signs regarding Haggard’s behaviour went largely unheeded among church leaders before his public meltdown.
But the more interesting analysis of the current state of the Evangelical movement is contained in this Ben Witherington post, which includes these following observations regarding the dubious political allegiance between Evangelicals and certain elements of the Republican Party:

[T]he alliance between Evangelicals and the hard line conservatives in the Republican party has made it difficult for many Evangelicals to see the difference in our time between being a Christian and being an American, and in particular being a certain kind of an Americanónamely a Republican. The problem is that this reflects a certain kind of mental ghettoizing of the Gospel, a blunting of its prophetic voice on issues ranging from war to poverty, and sometimes this even comes with the not so subtle suggestion that to be un-American (defined as being opposed to certain key Republican credo items) is to be un-Christian. But Christianity must and does transcend any particular cultural expression of itself, otherwise we have the cultural captivity of the Gospel which leads to a form of idolatry. It is one thing to sing ëmy country tis of Theeí, its another thing to have a bunker mentality which makes our countries ills hard to define and our flaws even harder to critique and correct. [. . .]

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