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June 29, 2006

The Washington Post Goes Litigator

My friend Peter Baker is following the President around on the campaign trail. This morning's report from a Missouri fundraiser for Senator Jim Talent contains this technically accurate but deeply dishonest paragraph:

Sharpening his rhetoric as the midterm congressional campaign season accelerates, Bush offered a robust defense of his decision to invade Iraq even though, ultimately, no weapons of mass destruction were found, and drew standing ovations for his attacks on those who question his leadership of the war or the fight against terrorists.

The only merit in this sentence is that it so neatly encapsulates the MSM's storyline on Iraq and the politics surrounding it. And the only thing that allows the Post to publish something like this without abject shame is their years-long ostrich-like refusal to publish anything that doesn't fit.

Saying that, "Bush offered a robust defense of his decision to invade Iraq even though, ultimately, no weapons of mass destruction were found," is like saying that, in 1778, Washington defended the Revolution even though there was trade with Mexico, meaning that George III hadn't quite, "cut off trade with all parts of the world."

Never mind that they have been found. Never mind that the WMDs were merely one reason for going to war in the first place. Never mind Iraq's running a pre-war bed-and-breakfast for Islamist terrorists. Never mind the Duelfer Report's findings that Saddam was planning to restart his WMD production after his hos on the Security Council got sanctions lifted. The war was all about WMDs, and the fact that we haven't found Castle Anthrax makes it a failure.

The second half of the sentence is no better. The President takes hits all the time for his "leadership of the war." What he's objecting to here is something very specific - the attempt by politicians to run the war by PERT chart, or at least to score points by appearing to try to do so.

The Post is trying to narrow the focus of the war to a point it can pretend it's won, while broadening the President's presumed response into Ray Bolger.

And no Post political story about the President would be complete without the obligatory Bush-as-Rove's-sock-puppet reference:

In his appearance in this St. Louis suburb, he said directly that some Democrats want to surrender, adopting the more cutting approach of his senior political adviser, Karl Rove.

The fact that this is exactly the take that Congressional Republicans, in one of their few recent moments of lucidity, used exactly the same language is of no moment whatsoever. Pay no attention to the man behind the curtain.

This is how the MSM and the Post will make use of the narrative they've established.

June 28, 2006

No Surprise Here

Your results:
You are Spider-Man

Green Lantern
The Flash
Iron Man
Wonder Woman
You are intelligent, witty,
a bit geeky and have great
power and responsibility.

Click here to take the Superhero Personality Test

Hat Tip: Professor Bainbridge

Imersion Educacional en la Ingles

In theory, we're all pro-assimilation. And in theory, even the CEA agrees that Latino kids ought to be learning English. So naturally, the same education professionals who brought you "whole language" and the New Math oppose English immersion programs:

A proposal to immerse students who don't speak English into intense English-instruction classes for a year before they return to mainstream classrooms is not educationally sound and could be harmful to students, educators and critics say.

"This (proposed state constitutional) amendment is one-size-fits-all, regardless," said Sheila Shannon, a professor in the School of Education at the University of Colorado.

At issue is the "Education of English Learners" ballot initiative proposed by a Weld County-based committee, English for Colorado. It calls for placing kids learning English into language classes for a year, without lessons in math, science, social studies or other topics.

After that year, the student would return to mainstream classrooms, said Weld County Commissioner William Jerke, who is leading the initiative effort. Parents of students 10 or older can request a waiver.


But there is division on whether those programs are working.

The research on bilingual education, in which English learners are helped in their native language, shows that students benefit in cognitive, language and social development, [CU Professor] Shannon said. Research also shows that it can take an English learner four to seven years to compete with English-speaking peers, she said.

Critics also say such a plan would deprive parents of choices, would leave English learners behind in other subjects and would be expensive.

First, there is always division on whether or not this or that "reform" is working. Good grief, there are even "education professionals" who think that 3+3 equals something else in Africa. Second, the Post provides no arguments in favor of the plan, but uncritically reproduces sounds bites against it. Finally, if anyone over 10 can get a waiver, it's by definition not coercive or "one-size-fits-all," despite Professor Shannon's objections. "One-size-fits-all" is exactly the system we have now - it's just a size that happens to fit Professor Shannon.

As it happens, both the Center for Equal Opportunity and the Lexington Institute have produced studies supporting English Immersion.

Finally, the Post has chosen as an advocate not someone who is sympathetic to English, but someone whose writings routinely deride the "hegemony of English" in the classroom and in the United States as a whole:

The current official English debate illustrates the problem well. Those in favor of official English, or English only, argue that such a policy is in the best interest of all Americans, especially those who do not already speak English. Furthermore, they argue, one language holds a society together and allows communication and trust across communities. Although such a policy would necessarily involve negative sanctions against those who either oppose it or who cannot abide by it because they do not speak English, the arguments in favor of it are promoted and perceived as benign if not benevolent. The negative sanctions necessary to enforce an English-only policy exemplify the symbolic violence that Bordiue talks about.

Immigrants, in our view, are the victims of a colonizing educational process.

If Prof. Shannon were to ask anyone who was outdoors west of the Mississippi on May 1 exactly who's feeling colonized, I suspect she'd get an answer that might move the askee to violence more than symbolic.

This is the expert the Post went to for an opposing viewpoint. Not someone who thinks bilingual education is a better way to assimilate and acculturate the waves of immigrants, but someone who sees it as a Trojan Horse to prevent their assimilation at all.

It took me about 10 minutes to track this down, by the way, even after being misdirected by the reference to University of Colorado rather than the correct CU Denver.

June 27, 2006

The Senate Dems' Campaign and National Security

This DSCC fundraising email nominally comes from Al Gore:

The evidence now makes it hard to avoid the conclusion that George Bush has repeatedly and insistently broken the law and the corrupt Republican Congress has shirked its constitutional duty to hold him to account.

In my view, a president who breaks the law poses a threat to the very foundation of our democracy. As Americans with a stake in the future of our country, we must act quickly and decisively. We have less than five months to win the six seats we need to control the Senate -- and pull our country back from the brink of a constitutional crisis.

"In my view, a president who breaks the law poses a threat to the very foundation of our democracy." He may actually believe this. After all, had any Senate Democrat decided to hold the previous President to this standard, Gore might have had the advantages of incumbency without the disadvantages of guilt by association. He probably wouldn't have even needed to campaign in Tennessee.

This email came out several days after the NYT handed over the details of another intelligence program to our enemies. The fact that "the evidence now makes it hard, blah blah blah" would seem to be an indirect reference to the SWIFT program. That absolutely no evidence - not even in the pages of the Times - has been presented to suggest any illegality or abuse in that program, ah, inconveniences him here as little as elsewhere.

Not one Senate Democrat has called for the discontinuation of any of the Big Three: international surveillance, phone call data mining, or financial transaction analysis. The Senate Dems, at least those in leadership, want the political gain of appearing to defend civil rights while realizing that they'll want those programs at their disposal should they gain power. Yet this doesn't stop the DSCC from sending out fundraising emails like this one all but threatening impeachment.

Of course, the notion of an impending Constitutional crisis is ridiculous. The courts are perfectly capable of resolving the legality of these programs, and there's never been even the hint of a suggestion that the Administration is interested in pulling an Andrew Jackson, or even an FDR (to name two Democratic Presidents) on the courts. Gore certainly has some experience in this area, as The closest we've come to a Constitutional crisis in the last 30+ years is the one perpetrated by him and his friend on the Florida Supreme Court.

It's almost enough to make you think they knew Gen. Casey would be briefing the President on a troop draw-down when they proposed one of their own.

The Denver Post and the Death Tax

Warren Buffett, in addition to his admirable philanthropic endeavors, has also been trying to make sure that the Federal Government continues to be the recipient of your largess from beyond the grave:

The world's second-richest man, Warren Buffett, has asked Sen. Ken Salazar to vote against repealing the estate tax.

Buffett sent a letter to Salazar, D-Colo., the senator's spokesman, Drew Nannis, said. The multibillionaire Monday called on Congress not to repeal the tax.


Repealing the entire estate tax now would cost the government an estimated $550 billion to $700 billion through 2010. (emphasis added - ed.)

The Post gives no citation for this number, nor does it consider the additional wealth that will be created by businesses that can, well, stay in business after their owners die. If the estate tax comes back, it will be on estates over $1 million. Most estates over that number aren't just cash sitting around under mattresses. They're in businesses that employ people.

Larger businesses tend to be separate corporations, but the smaller businesses hit here are often partnerships or sole proprietorships that tend to struggle for cash. They would have to sell all or some of their assets just to pay the IRS. In all likelihood, they'll sell to larger companies. Even assuming that everyone stays employed - a bold assumption at best - these transfers concentrate wealth, they don't diffuse it.

The Post also fails to notice that Mr. Buffett hasn't been such a big fan of paying unnecessary taxes himself:

Mr. Buffett’s decision to give away to charity Berkshire Hathaway stock valued at about $37 billion, much of it to the Bill and Melinda Gates Foundation, is the sort of bold move that has made so many Americans admirers of Mr.Buffett. As an avowed supporter of the estate tax, Mr. Buffett could have let the government take its share of his estate after he dies. But just as Mr. Buffett has accumulated his vast wealth without paying much personal income tax, he has found a way to avoid the tax man in this maneuver as well, even writing in his letter to Bill and Melinda Gates that a condition of the gift is that the foundation “must continue to satisfy legal requirements qualifying my gifts as charitable and not subject to gift or other taxes.”

(Hat tip: Best of the Web)

On The Road Again

So for the first time in years, I got back on the bicycle. Not the downstairs bike with all the recorded lectures, but the real bike where the scenery changes.

The motivation? An Inconvenient Truth. No, not that one, silly. This one. I'm hoping to leave some of this gut along Cherry Creek.

Eventually, I'd like to bike into work, so last night, I wanted to see how far I could get in half an hour. Riding along the Cherry Creek bike path, I got to Logan Street, which is just about where I needed to be. Chop another five minutes off that, and the whole thing's doable.

The good news - which is also the bad news - is that I live on a hill in the highest part of town. The same applied to work, where I'm on a hill in the highest part of downtown. This means climbs to close out both rides. But the other good news is that Cherry Creek runs from east-to-west, which is the morning ride. It means the ride going into work, where time is more of a factor, will be easier. And while going home will be almost all uphill, at least it's a gentle grade.

The New Tattered Cover

Needing some exercise, and with the weather at a seasonable 80 degrees, I walked down from the office to the newly-relocated Tattered Cover during lunch.

I can't say I was disappointed, since I really didn't expect all that much. The floor space is half the size of the old store at Cherry Creek. I suppose that brings it into line with the LoDo store, but I always liked the Four Stories of Books! even if it wasn't quite Powell;s. The decor is pretty much the same, just arranged differently and crammed into less space. This leaves less room both for books and for people. There's an artificial barrier right in the middle of the sales floor, the back edge of the Orchestra Pit, which also makes for awkward traffic flow. Maybe it's supposed to make it feel busier, but to me, it just felt more crowded, like the bar that Fred Astaire keeps having to negotiate in Royal Wedding.

The problem with the new location is, well, the location. The new store is at the site of the old Lowenstein Theater, at Elizabeth and Colfax, and it's clearly a whole staircase down in neighborhood, too. The police may just have to open a station there, to respond to all the false alarms from people nervously fingering 9-1-1 on their speed dial. You can't just drop in, have a drink at the Fourth Story, and then wander aimlessly around window-shopping. The old building may have looked a little like a fortress, but the Colfax location is the real deal.

It is right across from East High School, though, so maybe some of the kids there will take the hint and learn how to read.

June 26, 2006

Free Market Reading List

For those of you intrigued by the Free Markets, Free People class being offered by last night's radio guest, Paul Prentice, but who either don't have the time to attend class, or don't have the time to commute from California to attend class, here's the reading list:

Economics in One Lesson, Henry Hazlitt
Between Power and Liberty: Economics and the Law
Free to Choose, Milton Friedman
Economic Fallacies, Frederic Bastiat
Human Action, Ludwig von Mises
Capitalism: The Unknown Ideal, Ayn Rand
The Road to Serfdom, Friedrich von Hayek
The Mystery of Capital, Hernando de Soto

A little light reading for the beach, maybe?

June 23, 2006

Media Alert

Remember, Matt Dunn and I will be hosting Backbone Radio this Sunday night at 5 PM Mountain Time, as John Andrews searches for missing ballot boxes in Washington State.

We'll be talking with Matthew Sheffield of Newsbusters; Rabbi Barry Freundel of Kesher Israel and author of this book; Lance Cottrell of, and Paul Prentice of Free People, Free Markets.

Mmmm. Politics and religion. Hear it here.

Worse Than Toxic Waste

Glenn Reynolds argues that telling the terrorists about intelligence programs is like profiting from dumping toxic waste in the river.

I disagree.

I think it's like selling the Soviets the plans for the hydrogen bomb.

These newspapers don't just go after companies who commit fraud or who poison our kids for a fast buck. They're the ones who've been chanting Halliburton-Halliburton-Halliburton as the reason why Dick Cheney took us to war. They're the ones who've screamed from the rooftops about $(fill in alarmist and armageddon-like number here) Air Force toilet seats and hammers. They're the ones who suggest that if we hadn't gone to war in Iraq, we wouldn't have brush fires out west from SunTeXXonMobil-induced climate change.

But faced with a chance to rescue his buggy-whip business model for another week, Pinch Sulzberger will gladly do more damage to his city's safety than all the Homeland Security Budget formulas laid end-to-end.

Maybe Eason Jordan really has convinced Bill Keller than George Bush is trying to kill him.

Whither the ISM?

The Denver Post and Rocky Mountain News continue to ignore the good economic news in the ISM's Regional Reports on Business. The Institute for Supply Management's monthly national survey is one of the most respected and widely-followed economy surveys, covering as it does the expected purchasing and hiring trends, as well as the trailing indicators of price and supplier performance.

In addition to the national survey, the ISM also publishes monthly regional surveys, one of which is based in Denver.

For the last two months, the manufacturing survey has been extremely strong. This month, the more violatile non-manufacturing index moved from slightly negative (49.4) to solidly positive at 53.2.

The Rocky gave plenty of space to the unreliable Index of Leading Economic Indicators and the one-week increase in the volatile Jobless Claims, ignoring the decline in the more reliable 4-week moving average.

Personally, I believe we're cresting the economic cycle, but economic news is always mixed. Eliminating the positive while accentuating the negative doesn't help anyone make informed decisions.

The Governor, the Tsar, and the Duchess

So with the Democrats stamping their feet and threatening to hold their breath until they turn - er - blue, Governor Owens found time to meet with them yesterday about the proposed immigration special session. Since the Republicans are backing the governor on this one, the Dems really have no leverage. They'd need 15 Republicans to support their call rather than the governor's and that's not going to happen.

The Dems, in the meantime, sound less than sincere in their discomfort with the Court's decision:

Fitz-Gerald questioned whether the legislature has the authority to overturn a court decision. She said she didn't think it was the legislature's role to rubber-stamp flawed ballot questions.

No word on what she thinks of flawed Supreme Court decisions. In a statement that was in the initial Rocky report last night, but later edited out, Romanoff said that they could spend all summer overturning State Supreme Court decisions they didn't like.

So which is it, guys? You don't have the authority, or you don't like the idea?

Since the call defines the parameters of the special session, Owens ostensibly called the meeting to find out what the Dems wanted included. When they asked to include employer enforcement, he pointed out that, along with a number of other Republican bills, the Democratic leadership had killed this one on a party-line vote in committee. (Committee votes are significant precisely because they're a way of killing a bill without a floor vote that might put vulnerable members on the record with an unpopular position.)

The Rocky's reporting on this was less-than-stellar. Initially, they stated as fact that the governor was considering including Republican bills that the Dems had committee-killed. A call to the governor's press office revealed that that was only Fitz-Gerald's interpretation of the conversation. The governor's point was that the Dems had the chance to deal with these issues, and decided not to, so to come back now with a raft of half-baked ideas smacks of playing catch-up.

The Rocky took out that paragraph in this morning's draft, but reporting Sen. Fitz-Gerald's comments as fact without attribution is just sloppy at best, and credulous as worst.

Former Spook Calls It

In From the Cold had this to say about the MSM's treatment of the chemical and biological shells found in Iraq:

The MSM--if it ever gets around to this story--will likely claim that Santorum and Hoekstra are playing politics with intelligence.

From this morning's Washington Post (buried on Page A10):

The intelligence officials also suggested that they were pressured by Hoekstra into declassifying the study in recent weeks. Hoekstra first sought its release June 15 and June 19 and made the request again giving John D. Negroponte, the director of national intelligence, 48 hours to declassify it, according to a senior intelligence official.

In From the Cold does what the Post declines to - describes the way intelligence now operates that makes such pressure necessary:

As a young intelligence officer, I was drilled that important information should make its way up the chain of command as soon as possible. Apparently, things have changed since I left the business. Information that contradicts prevailing judgements can be ignored, or simply buried on an intelligence website--let the customer find out on his own. If members of Congress want information, simply delay your response as long as possible, and provide data only when someone with enough horsepower (in this case, the HPSCI chairman) demands answers. Then, provide only a fraction of what they ask for.

June 22, 2006

It's Beauprez v. Ritter

Marc Holtzman's campaign came to an end today, like too many other political campaigns of late, in the courts rather than at the ballot box or at the convention.

Elections should be simple things. You campaign. People vote. You count the votes. You see who has more. There are too many damn lawyers in this process since 2000.

Happy 100th To Billy Wilder

Today's the 100th anniversary of the birth of Billy Wilder. And if you think for one second I'm going to try to compete with Mark Steyn on this subject, guess again.

June 21, 2006

And They'll Pass...

...and be forgotten with the rest.

Passed! With an 85, or 213 questions correct, which means I wasted 38 correct questions' worth of study time.

During the break, I went outside, opened up the sample exams, and started missing questions. This wasn't doing my confidence any good, I skipped answering them and just started looking at the answers. One or two of them showed up on the exam, so I don't suppose it hurt.

Now, it's on to the Series 86, for Research Analysts.

UPDATE: It occurs to me that an 85 is probably the 2nd-worst score you can get. If you're going to fail, fail big. The worst score you can get isn't a 0, it's a 69. It's like running down the escalator in time to hear the door-closing bell on the last train of the day. You paid the money, spent the time, and if you hadn't stopped off for the package of breath mints at the newsstand you'd be home by now.

If you're going to pass, on the other hand, either get a maximally-efficient 70, or a maximally-imposing 100. There's decreasing value to each correct answer, until somewhere in the middle the thing turns around and people start to be impressed, probably at 90. Eighty-five is like rushing to make the train, only having to wait 10 minutes on the platform, amongst the winos, breathing stale air. Yeah, you made the train, but you also had time for that snack so you're not hungry all the way home.

June 20, 2006

Media Alert

With John off surveying Washington State wetlands for development, I'll be sitting in the Big Chair this Sunday night, with fellow LPR graduate Matt Dunn, reprising his old role.

We'll be interviewing Paul Prentice, who, much to the dismay of Ward Churchill, will continue teaching a free-market class for credit at CU even as Ward frees up office space.

I'll have a chance to meet my editor at Newsbusters, Matthew Sheffield, as well as chat with the head of my New Favorite Company,, who's helping to play Mongol to the Great Firewall of China.

Finally, we'll have a chance to talk with my old rabbi from Georgetown, Rabbi Barry Freundel, on the Modern Orthodox approach to some issues at the intersection of science and technology. He can explain much better than I where and why we differ with our evangelical friends on these things.

You can listen on 710 AM, if you happen to be in Denver or environs, or online at

Series 7 Day

Radio silence for a while Wednesday. I'll be taking the Series 7 in the morning, and then taking a conference call in the afternoon.

The Immigration Debate Expands?

The Republican Study Committee of Colorado is encouraging Governor Owens to expand the terms of his special session to include Official English and proof of citizenship for voting & driving.

The politics are obvious - force the Democrats to take unpopular and unwise positions. It'll be much harder for Romanoff and Fitz-Gerald to bury these issues in committee, and virtually impossible for Democrats in close races to vote against them on the floor. Not if they want to be back in January.

Ken Gordon's already on record opposing proof of citizenship for voting and driver's licenses (which act as id for voting). Now he'll have to vote that way on camera. In the campaign ads, they'll put him in front of a Mexican flag.

The only possible downside is that you give away the issue of the Supreme Court by focusing on substance rather than process.

The Morningstar Empire Strikes Back...

...but not very well.

Apprently, the work I helped out on last year has, ah, struck a nerve over at Morningstar, where John Rekenthaler, VP of research, has sallied out to meet the attackers ("In Defense of Style Boxes") in this month's Investment Advisor. He takes the litigator's approach: "my dog doesn't bite, and anyway, that's not my dog." In this case. it translates roughtly as, "style boxes work, because people don't use them the way you say they do; and even if they did use them that way, they'd still work."

While conceding the main research points, Rekenthaler has to distort our assertions in order to deflect them.

Nothing so drastic as investing 100% in a single style grid is required for maintaining "style purity." Even if a portfolio manager were morbidly concerned about adhering to Morningstar’s style definitions, the manager would have much more flexibility than is implied by this study. That is because the Morningstar style designations are averages of a portfolio’s positions, with no minimum requirement that stocks be in any particular grid. Strictly speaking, it is possible, although quite unlikely, that a fund could occupy a style grid without having a single stock of that style type.


Finally, every manager with whom we have ever spoken has considered overall portfolio issues when implementing a strategy. So, regarding a strategy’s top-ranked selections as the true portfolio that would exist if the managers disregarded the style policy is not realistic.

And yet, every manager we spoke to, the ones who actually have to manage inside this grid, and to face investors and advisors on a quarterly basis, expressed frustration with the limits that the boxes put on them. Every one spoke of investments foregone becuase it would place them too far outside the box.

Morningstar's use of the average to characterize the fund is also misleading. They speak derisively of Lipper's "Multi-cap" designation, calling it the "junk drawer." where Lipper can store everything that doesn't fit. And yet, the multi-cap funds have outperformed the single-cap funds for a while now.

Lipper also provides a service telling a fund manager when his fund is getting close to changing Lipper boxes, helping them game the system. Whence the demand for such a service?

Finally, these boxes are beginning to take on the air of a regulatory authority. Funds need the approval of their investors to change their stated investment objective. Should a fund drift outside its box, and stay outside its box, there's the risk either of regulatory disapproval or shareholder litigation.

All in all, the world of characteristic-defined funds behaves much more like we say than like he says. The fact that Morningstar shouts, Bart Simpson-like, from the rooftops that, "I didn't do it," hasn't kept them from profiting mightily from that misuse.

The authors’ second claim is that style boxes are not asset classes. According to them, asset classes should be obviously and readily definable entities with widely agreed-upon definitions. However, they point out, style-box grids are defined differently by different organizations. The authors also argue that asset classes should have low correlations with each other. Finally, the authors state that asset classes should have a stable membership; that is, securities should not periodically change their asset classes.

The first and third points, those of the ease of definition and stable membership, reflect the authors’ preferences, no more.

Points One and Three are, at least partially, a way of getting to point Two. I would argue that any of the major indexers - S&P, Morgan-Stanlet, Wilshire, Russel, would agree that they each have useful definitions of "Large" and "Small." But if a word is to be widely used, the various participants should at least be able to agree on what it means. We didn't uncover small differences of opinion, we encountered wholesale overlaps:

Only half of the Morningstar mid-cap stocks were categorized that way by S&P, and a little less than 75% of Morningstar’s small-cap stocks were called small cap by S&P. Over all, there was slightly more than 30% disagreement between the two information services on how individual stocks should be categorized in these supposed "asset classes."

... S&P does not have a "core" category. Among the stocks not in the Morningstar core category, S&P and Morningstar disagree on 20% of the remaining value or growth stocks. That is a remarkably large area of disagreement for supposed "asset classes."

... Fully 50% of the Morningstar "mid-cap" stocks are smaller than the largest "small-cap" stocks in the S&P classification, and a little over 23% of the "large-cap" stocks are smaller than the largest "mid-cap" stocks in S&P.

On point Three, we have no problem with funds and indexers periodically deciding that Amazon or Google no longer qualify as small-cap. But when almost 10% of the stocks indexed drift back and forth over the value-growth line on a regular basis, one doubts whether the classifications are capturing behavior.

The problem is, as Rekenthaler suggests, one of behavior. If the definitions are so fluid that one stock can be put all over the map, depending on which service is doing the rating, and if these various classifications accurately capture the stock's behavior, then perhaps (cough) we really are dealing with a single asset class called, "US stocks."

Rekenthaler argues:

The problem is, asset-class behaviors change over time, enough to confound simple correlation rules. For example, in the first half of the 1990s, the Lehman Brothers Aggregate Bond Index had a 0.60 correlation with the S&P 500. In contrast, in the first half of the current decade, the Morningstar Large Value index had but a 0.39 correlation with the Small Growth index. So, what’s that about bonds and stocks are asset classes, but style grids are not?

Yes, and if you compare the mileage of my grandfather's Studebaker to that of the 18-wheeler Rekenthaler is looking at in his rear-view mirror, you'll conclude that cars today just aren't any more fuel efficient than they were 50 years ago. Comparing bonds vs. stocks during a period of stable growth to stocks vs. stocks during a period of international chaos is like asking to be published in the Journal of Irreproducible Results. We know that small and large, value and growth have some differences in performance. That those differences would be magnified during a decade with several multi-sigma events is hardly surprising. For the record, when we compared the Morgan-Stanley Large Value to its Small Growth from 1992-2003, we got a correlation of 0.672.

Rekenthaler's comparison of Morningstar's Four Corners from the years 1999-2001 is similarly loaded:

Uh-oh. In the most dramatic marketplace in your clients’ memories, the single most critical element in their investment returns was how much money they had in Large Growth style stocks, as opposed to Small Value. And you didn’t clue them in.

No kidding. A sector comparison between techs and industrials, or say, tulip and onion bulbs, would probably show the same thing.

Rekenthaler doesn't tell you whether or not he loaded the deck. Morningstar reworked their classification methodology in 2002, and used 1999-2001 as part of the input to the optimization. Any sane methodology would show similar. But these things matter - the correlations among boxes using the current methodology are much higher going forward from 2002. (Again for the record, Rekenthaler returned my email from his vacation in Japan, but a firm response on this point will have to wait until he's back stateside. Frankly, it was nice of him to reply at all from vacation.)

Look, Rekenthaler's no idiot, and he wouldn't last 10 minutes in this business if he were dishonest. But he's got a vested interest in perpetuating Morningstar's methodology, at least until they can wean themselves from it.

June 19, 2006

Back To The Robed Masters

So with the Fat Lady warming up by singing September Song for the Holtzman Campaign, it's back to the Supreme Court.

A Denver District Court ordered today that Holtzman's name be removed from the primary ballot in 48 hours unless the Colorado Supreme Court decides to hear his appeal.

"There is no evidence or basis in law to set aside or overturn the Secretary of State," ruled Judge Robert S. Hyatt, referring to the secretary's decision more than two weeks ago that Holtzman did not have enough valid signatures to make the Aug. 8 primary ballot.

Because the judge found Holtzman had "absolutely no reasonable probability of success on the merits" of his case, he would suffer no "irreparable harm" by not being on the ballot. Therefore, Hyatt ordered his name be removed from the ballot pending a 48-hour stay.

Of course, I'm not sure I'd put it past these jokers could rule that the 1500-voter-per-district violtates one-man-one-vote, or something like that.

A "New Direction" For Wages?

Let's continue to pretend that the border doesn't exist, while raising the minimum wage!

This is like making the hole at the bottom of the tub larger, while pouring in more water and adding suction at the same time. You're increasing the hiring incentive for US employers, simultaneously reducing their incentive to hire US workers.

Electorally, you get to add numbers both to an oppressed underclass and the idle government dependants. Economically, you get to increase government spending at both ends.

If the Democrats weren't so clearly incompetent, this might actually constitute a plan.

Colorado Pork Pork

Which has the same cadence as, "Chitty Chitty Bang Bang."

It turns out that, over the last 7 years, over $1.2 million of federal money has been spent on something called the Livestock Marketing Information Center, located in a western subrurb of Denver.

The LMIC is a unique cooperative effort between state university extension specialists, USDA economists, industry cooperators and Center staff. Through cooperative efforts and programs, duplication of effort is greatly reduced while enhancing the overall quality and quantity of livestock market information for producers and other decision makers.

The fact that this information is repeated on at least three separate government websites may be taken as either confirmation or refutation of its claims, I suppose. My guess is that if the information's that valuable for producers, they could probably be induced to pay for it. In the meantime, my tax dollars notwithstanding, not all the information collected is public.

That's almost as much as was budgeted this year alone for "Wood Debris Bioenergy Project (Legacy Management)." I thought I had one of those in my house....

Carnival of the Capitalists

This week's version is up, over at Blog Business World.

This week's best rides:

Why I should learn something useful and stop trying to get on Millionaire.

Why "microwave popcorn and a heavy coat" is just a version of free-riding that drives up ticket prices in the end.

How one team is skipping firing the manager and going straight to letting the fans call the plays.

The Red-Green Alliance: It's Not Just for Christmas (or the CBC) Any More.

"The Customer Is Always Right: The International Relations Version." Didn't we hear a lot about this just before World War I?

Economic roadmaps by economic illiterates.

Remember, there are two parts to a fraction. Why PEG ratios can become an exercise in tautology.

Repeat after me: Lower Tax Rates, Higher Tax Revenues

The Laffer Curve of innovation & creativity. I know that's true in my case.


June 18, 2006

Radio Links

I was remiss in getting up the schedule for this week's interviews, so here are the links to our guests' websites of interest.

Former Governor Richard Lamm - who, contrary to comments made here, did not appoint most of the partisan justices on the Colorado Supreme Court - is a co-leader of Defend Colorado Now. So much for the Denver Post turning this into a "Republicans hate Hispanics" issue.

Ted Harvey, who helped expose the Democrats', er, discomfort with the results of late-term abortion-on-demand.

John Fund joined us to discuss the Yale Taliban.

Steve Chavis, Communications Director for Promise Keepers.

And Geoff Segal of the Reason Foundation joined us to talk about privatizing bits of government, in particular toll roads.

June 16, 2006

Don't Blame Marbury

At least not according to the Claremont Institute.

A House Divided

The pressures of trying to produce a company report have me tied down, but Amy Oliver of the Independence Institute has pointed out that today is the 148th anniversary of Lincoln's "House Divided" Speech to the Illinois Republican Convention.

Best-known is the opening:

If we could first know where we are, and whither we are tending, we could better judge what to do, and how to do it. We are now far into the fifth year, since a policy was initiated with the avowed object, and confident promise, of putting an end to slavery agitation. Under the operation of that policy, that agitation has not only not ceased, but has constantly augmented. In my opinion, it will not cease, until a crisis shall have been reached and passed. "A house divided against itself cannot stand." I believe this government cannot endure permanently half slave and half free. I do not expect the Union to be dissolved—I do not expect the house to fall—but I do expect it will cease to be divided. It will become all one thing, or all the other. Either the opponents of slavery will arrest the further spread of it, and place it where the public mind shall rest in the belief that it is in the course of ultimate extinction; or its advocates will push it forward, till it shall become alike lawful in all the States, old as well as new—North as well as South.

However, equally important is the closing. Here, Lincoln argues that while a political movement must be willing to accept help from all responsible comers, the leadership of a great cause must be entrusted to those who actually believe in it. Otherwise, it will eventually be betrayed by those who see a way to defend their true interests and values without actually delivering a victory:

Senator Douglas holds, we know, that a man may rightfully be wiser to—day than he was yesterday—that he may rightfully change when he finds himself wrong. But can we, for that reason, run ahead, and infer that he will make any particular change, of which he, himself, has given no intimation? Can we safely base our action upon any such vague inference? Now, as ever, I wish not to misrepresent Judge Douglas’s position, question his motives, or do aught that can be personally offensive to him. Whenever, if ever, he and we can come together on principle so that our cause may have assistance from his great ability, I hope to have interposed no adventitious obstacle. But clearly, he is not now with us—he does not pretend to be—he does not promise ever to be.

Our cause, then, must be intrusted to, and conducted by, its own undoubted friends—those whose hands are free, whose hearts are in the work—who do care for the result. Two years ago the Republicans of the nation mustered over thirteen hundred thousand strong. We did this under the single impulse of resistance to a common danger, with every external circumstance against us. Of strange, discordant, and even hostile elements, we gathered from the four winds, and formed and fought the battle through, under the constant hot fire of a disciplined, proud and pampered enemy. Did we brave all then, to falter now?—now, when that same enemy is wavering, dissevered and belligerent? The result is not doubtful. We shall not fail—if we stand firm, we shall not fail. Wise counsels may accelerate, or mistakes delay it, but, sooner or later, the victory is sure to come.

While others of Lincoln's speeches are better-remembered, coming as they did during the crisis of the Civil War, Harry Jaffa considers this to be the most consequential of Lincoln's speeches.

As Don Fehrenbacher has written, everyone knew that a South that would not accept Stephen A. Douglas as leader of the Democratic Party, would never accept Abraham Lincoln as President of the United States. Yet the South was foolish in what it did. It actually looked at Douglas through the lenses Lincoln had kindly provided them in the debates, in the follow-up of the House Divided speech. Had they abated their demand for a slave code for Territories, they might have elected a President who might have found more certain means of guaranteeing the survival and success of slavery. Indeed, for all we know, slavery might be flourishing amongst us even now. That it does not, we have the House Divided speech to thank.

June 14, 2006

Chopper Chicken

This was one of those mornings I wish I had had my camera with me.

I walked into my office after the morning meeting, looked out the window, and saw the military chasing Jack Bauer as he was whisking that Mexican drug dealer back to El Pais. Only they were already over downtown. And neither one was a military copter. And they were headed more or less straight south for the Financial Center building, which is what I see out of my north-facing window.

Did I mention that they were both well below roof level?

When they emerged from around the other side, the trailing chopper had pulled even, and then, as I watched, pulled around and in front of chopper #1, like the airspace was just I-25 extended upwards. They sat there for a few seconds, with the blades no more than a dozen feet apart, and then headed off to the south.

And I went for a cup of coffee.

When I got back, they were just breaking up from round #2. Chopper #2 retreated back to the northwest, and Chooper #1 once again flew by the Financial center a good six storeys below roof level.

I don't know if there was something wrong with the first chopper that the second guy just had to tell him about, but I suspect that the emergency channel would have been they way to go there. Definitely not pinning him against a major office tower with rush hour traffic down below.

Fortunately, the FAA has a simple 800 number to call to report just such things. Three long voicemail instructions, several selections, and a recording letting me know that all the operators were watching the World Cup, I left a voicemail detailing what had happened. We'll see if they call back.

I didn't get any tail numbers, and there were no media affiliations painted on the side, either, but this had all the earmarks of a pissing contest between traffic reporters or TV film crews. They didn't look as though they were in a hurry, and they weren't hospital choppers, either. In any case, there are a couple of pilot's licenses that need revoking, and if they were media helicopters, I'd have the FCC put their broadcast licenses under review, too, just to make a point.

June 13, 2006

Special Session Update

Governor Owens has threatened to call a special legislative session if the Court stands by its - remarkable - decision on the initiative to deny non-emergency services to illegal aliens. (Memo to Justice Mularky: You can call a tail a leg, but don't try to stand on it.) Good for him.

"I urge the state Supreme Court to reconsider its ruling, but if that doesn't happen, it's likely that I will be bringing lawmakers back to the Capitol this summer."

Bob Beauprez was way out in front of this (although his latest press release lauds the Governor for calling a special session, which he hasn't actually done yet). Bill Ritter was last seen trying to find a way to be "moderate" while not offending his base. Ritter has until the Court rules again, if it does, to avoid being overtaken by events, but he'd probably be best off criticizing the Court and giving his legislative brethern some cover.

In the meantime, we'll see if the Court uses the interim period to actually read the law. And then, if they believe that reading the law would constitute backing down, whether the Governor actually does follow through here.

UPDATE: We've confirmed that there's no truth to the rumor that the Governor will call a special session to propose legislation giving him the right to appoint a new Supreme Court justice for each sitting justice with an IQ under 80.

Around The Fence

With the Colorado Supreme Court having erected a barrier protecting the status quo on illegal immigration, Republican legislators are asking Governor Owens to call a special session to get the measure on the ballot.

''The state Supreme Court illegally denied access to the ballot on an issue I think enjoys overwhelming support. The question is access to the ballot. To have that taken away by the courts needs to be resolved,'' May said.

Significantly, the governor isn't closing the door on this, although he wants to wait and see if the peyote has worn off by the time DCN's motion to reconsider is heard.

In the meantime, State Senate President Joan Fitz-Gerald is doing everything possible to give that body back to the Republicans:

She said May was trying to make immigration a political issue in a pivotal election year, with control of the Legislature and the governor's office up for grabs. Owens cannot run again because of term limits.

''I think Mike May is engaging in political grandstanding,'' she said. ''It's an opportunity for them to have their issue in the forefront instead of all the accomplishments we have made over the past few years.''

From the DCN site:

The current registered agent for the Defend Colorado Now initiative is former Colorado Governor Dick Lamm, with additional contacts listed as Waldo Benavidez, Director of the Auraria Community Center - a west Denver social service agency, and DCN's director, Fred Elbel (all three are registered Democrats).

This is a perfect chance for Governor Owens to get back his conservative bona fides at a time when he's seen as having thrown away a career's worth of political capital over Ref C. I was at the Assembly, and I can tell you that Owens's career restrospective film got a less-than-Clintonian receptiona among the delegates.

To take a public stand like this, to force the Democrats in the legislature to take a wildly unpopular stand on an issue that people will actually go to the polls over would help remind people of what a good, conservative governor he was for six years. (The Beauprez campaign has already figured this out, forcing Ritter into a deafening "no-comment.")

It would entail a certain amount of personal risk, if the soon-to-be-former governor had been expecting a friendly reception from a Democratic state capitol.

But it would be a parting gift to a party where a significant number of activists feel abandoned, and it would almost certainly win him back a great deal of forgiveness among those activists.

Who Is Brad Galt?

Apparently, Brad Pitt and Angelina Jolie bonded during the making of Mr. & Mrs. Smith by reading each other passages from Atlas Shrugged. Now they want to make a movie out of it.

As for stars, book provides an ideal role for an actress in lead character Dagny Taggart, so it's not a stretch to assume Rand enthusiast Angelina Jolie's name has been brought up. Brad Pitt, also a fan, is rumored to be among the names suggested for lead male character John Galt.

To answer the other obvious questions:

While Rand was still alive, she had script approval, complicating the process. After the author's death in 1982, Ruddy continued his efforts and, in 1999, he inked a pactpact to produce "Atlas" as a miniseries for TNT. Ultimately, the deal faltered.

The less obvious questions point to a book that's hard to dramatize. Would you even center it around a railroad anymore? Does "motive power" still inspire the way that it did in 1957?

In an era of unsurpassed innovation, will people take the book's projections of universal decay seriously? Is the US even the most free economy in the world any more? And if not, why can't others take up the slack? After all, people will leave the theater having seen a world in ruin, and immediately hop into their ultra-safe cars, download the soundtrack into their iPods, use their phone-PDAs to get directions to the nearest pizza joint, and then check their email on the way there.

The Coloradoan in me want to keep oil shale the center of attention, but I suspect that the first thing to go will be the railroad. The slow drying up of the supply of copper wire just isn't going to rivet audiences to their seats. Transportation will be important; nothing can illustrate the problem like gas prices, but I'm sure they'll be tempted to make Dagny the head of a large biotech, trying to bring a bird-flu vaccine to market ahead of the epidemic. Hank Rearden doesn't make steel, but a GMO corn that the NGOs won't let anyone grow. Naturally, a by-product of the corn is a key ingredient in the vaccine.

And there's the problem. Big Things, like trains and steel and great giant buildings move the spirit viscerally in a way that a petri dish just can't. And the visual image of the country slowly, inevitably, literally grinding to a halt under the accumulated weight of well-meaning taxes, regulation, and redistribution is going to be terribly hard to compress into two hours. It's moviemaking on the scale of the great war epics, and the last one of those took three films and nine hours.

I have no idea if this can be done well, and it would be better not done at all than done poorly. I do think the country's ready for it now, in a way that would have been inconceivable in, say, 1973. It might help alleviate some of the current economic illiteracy. Released in 2008, it might just remind enough people of the actual cost of all that "free" stuff the Democrats will be offering. Assuming it's set in the future, a few numbers from early-21st-century Eurosclerosis might connect it to the real world. And the sheer number of entrepreneurs out there might assure it of a sympathetic audience.

I am heartened to see that Miss Rand has made fans with this kind of star power even in the Heart of Darkness, er, Hollywood. At least, if the main movers and shakers have the right motivation, there's a chance that they'll make the right compromises rather than the wrong ones.

June 12, 2006

Our Postmodern Judiciary

For decades, conservatives have been claiming that liberals only like judicial activism out of expediancy, not out of principle. Today's Colorado Supreme Court ruling on Defend Colorado Now's ballot initiative to deny non-essential services to illegal aliens is the new Exhibit A in that debate.

In a 4-2 opinion, which (sic) one justice abstaining, the court ruled the proposed constitutional amendment violates a requirement that ballot questions deal only with one subject.

The ruling brought sharp words from members of Defend Colorado Now, the group pushing the measure.

"This is outrageous judicial activism, Exhibit A in how courts disregard precedent to reach a political result," former Democratic Gov. Richard Lamm said in a statement. "This isn’t law, it is raw, naked politics."

Dick Lamm appointed most of these jokers in the first place, and the number of judicially active rulings he's applauded over the years is countless.

Here's the operative part of the amendment, lifted from its complete text:

Except as mandated by federal law, the provision of non-emergency services by the state of Colorado, or any county, city, or other political subdivision thereof, is restricted to citizens of and aliens lawfully present in the United States of America.

And here is the Court's reasoning:

The ruling said Defend Colorado Now touts the possibility of reducing taxpayer expenditures by restricting illegal immigrants’ access to services, as well as the goal of restricting access to services.

"Because we determine these purposes are unrelated, we conclude they comprise multiple subjects connected only by a broad and overarching theme," the ruling said.

Note that the text of the amendment says nothing at all about revenues, it only speaks of spending. In fact, it doesn't even speak of spending, it speaks of services to be provided or denied. The fact that these services cost money is, while an unfortunate fact of life and governance, completely incidental to the language of the amendment. Were Marx to be proven triumphant, and the State be able to provide services without paying for them, the text of the amendment would still be operative. The idea that arguments used in the advocacy of any amendment actually have any force of law is bizarre to say the least, especially for a Court that has a pronounced distaste for the actual legislative histories of bills.

In fact, it's hard to conceive of any ballot initiative which would pass this test. Measures directly related to revenue by definition potentially affect the tax burden in a state with a balanced budget law and TABOR spending restrictions. That's reading the decision narrowly. Reading it broadly, any sentence containing more than one word necessarily encompasses two things.

A cynic would suggest that the four justices involved are unrelated, comprising multiple intelligences connected only by a broad and overarching need for remedial logic and English instruction.

Such cynicism would mask the truly dangerous, indeed dictatorial nature of this ruling. In effect, it opens the door for the Court to overturn any checks on its powers. Try, just try, to imagine any restraint on judicial authority which can't be separated into multiple purposes. And then remember who the final arbiter in such matters is.

UPDATE: It gets better. The Court, in arguing an agenda hidden in plain view on DCN's website, notes:

Because “emergency services” are commonly defined, as Defend Colorado Now does, as including police and fire protection and emergency room medical services, a voter might well assume that the converse of “emergency” would pertain to the single subject of nonemergency medical or social services. In the absence of a definition for “services” or a description of the purposes effected by restricting nonemergency services, the unrelated purpose of restricting access to administrative services is hidden from the voter.

And yet, isn't that exactly the first thing that public debate would illuminate? The Court want to both discount the usefulness of political debate and to use that debate (i.e., DCN's stated arguments in favor of their amendment) as a reason for disqualifying the initiative.

Nathan Coats's dissent is worth reading in its entirety, but here's the money paragraph:

Of course, the majority might just as easily have found that the proposal was motivated by a host of other reasons, including the deterrence of unlawful presence in the state, it’s clear and expressed ultimate objective. The susceptibility of any group motivation or objective to being thinly sliced is limited only by the ingenuity (and desire) of the court doing the slicing. And according to the majority’s logic, each such “purpose,” apparently constitutes a “subject” of the initiative. The constitutional limitation itself, however, does not purport to examine the hearts of those advancing an initiative but merely prescribes the form an initiative must take for it to be considered by the electorate.

June 11, 2006

NPR's Paula Poundstone on Gay Republicans

NPR's got a weekly news quiz program called "Wait, Wait, Don't Tell me!" It's actually pretty funny, although like most of NPR's programming, it has a fairly pronouced port-side list.

This week, though, the decidedly unfunny Paula Poundstone (as of this writing, NPR's list of the week's panelists is incorrect) asked, in response to a question about gay marriage:

I don't even know what a gay Republican is. Does that mean they beat themselves up in parking lots?

Which got a predictably hearty laugh from the audience. You can hear it on the first clip listed, the "Who's Carl This Time?" segment.

Ah, suppose a comedian on publicly-funded radio had asked, "What's a Democratic soldier? Does that mean he spits on himself in airports?" It would have had about the same relevance, about the same accuracy, the same truth content (which is to say, none), and it would have been met with immediate howls of indignation that someone's patriotism was being impugned.

She also asked

Who are these Log Cabin guys? They show up around every election, and then they just disappear and you don't hear from them.

Which I guess means they behave just the opposite from Democratic voters.

Reading Assignment

On Backbone Radio earlier this evening, I mentioned some further reading for those interested. Here they are:

I, Pencil, which explains why all of us are smarter than any of us.

Thomas Sowell's Basic Economics, written for the layman by one of the best. I promise: no equations, no graphs, no complex tables.

And the Carnival of the Capitalists. The best of each week's economics and business blogging; find some blogs that appeal to you, on topics you like, and keep going back.

Boreas Pass Photoblogging

I figured Memorial Day was as good a time as any to get the Jeep out on the dirt, so I picked a fairly easy trail fairly close to home. By the time I got there in early afternoon, the weather had already turned, but I still managed to get some decent shots. As always, click to enlarge, and enjoy.



What's the best return metric in evaluating a company? I think there's a fair case to be made that it's ROIC compared to WACC.

ROIC is Return on Invested Capital, and while it's a little tougher to calculate that Return on Assets or Return on Equity, I think it's a fairer measure. What does a company return on all the money that's been put into it? This includes common equity, preferred equity, and borrowed money.

Return on Assets can also be seen as Return on (Equity + Liabilities). Used that way, you're measuring the return on all sorts of things that don't really matter, such as Accounts Payable. While accounts payable are certainly liabilities, borrowed in some sense from a company's suppliers, it's a stretch to think of them as "investments." Viewed as ROA, it's also not a particularly good measure for many companies. Assuming you make proper allowance for people who'll stiff you, does it make sense to calculate Return on Accounts Receivable?

Return on Equity has a better case. After all, you're looking at buying stock, not making a loan. So shouldn't you be analyzing what use a company makes of its equity? Well, to a point. Except that that number can be "improved" by borrowing more, buying back stock, or increasing leverage in a thousand other ways.

ROIC is much harder to jerk around that way, and measures how well the company's handling all the real capital at its disposal. It's also got an analog on the cost side: WACC, or Weighted Average Cost of Capital, or how much the company has to pay for all this funding. If I know what its return is on capital, and I know what it's paying for that capital, I can tell how much the company's actually returning, ROIC - WACC.

In fact, you could argue that this is analogous to an NPV calculation on the management side.

June 10, 2006

Air America on Zarqawi

Well, some people may be quietly pleased, but here at the Sharf household, it was toasts and cheers when we heard he had gone to the Big Dirt Nap. And more satisfaction on hearing the news that he was conscious and aware that the Americans had gotten him. Apparently, some Iraqi neighbor is claiming that he saw Americans beating the crap out of Zarqawi after they pulled him from the rubble. We can only hope.

Driving home on Friday evening, with the local ESPN affiliate off the air for some technical reason, it was a choice between Randi Rhodes and Michael Savage. Ms. Rhodes - and boy, is that one angry woman or what? - spent one segment equating Zarqawi with Tom DeLay, and another segment comparing him favorably to the President.

During that last segment, she made a point of dragging out quotes from Michael Berg, Nick Berg's father, and explaining how terrible it was that Michael was being demonized for being "truly religious" in his attitude towards Zarqawi's timely demise. After all, Michael Berg realizes that revenge killings only perpetuate the endless cycle of violence, and the "peace movement" is all about ending war. In doing so, she sounded almost genuinely sorry that Zarqawi had been killed by American bombs.

Randi Rhodes is an idiot. Michael Berg simply lacks the ability to forgive Zarqawi.

While Michael Berg may be forgiven for believing otherwise, this wasn't only about Nick Berg's beheading. Nick Berg's beheading is referred to in order to show what kind of monster Zarqawi was; it's not shown as the only crime the man was guilty of. Zarqawi was responsible for the deaths of thousands of Iraqis and of quite possibly over 100 American troops, not to mention thousands of casualties. The only man who can forgive him Nicholas Berg's murder is dead, and in any case, there are thousands of others with equal moral standing who are not in quite so forgiving a mood.

One last point. While it's important for the military to recognize and adjust based on who the informants were, it's not necessary or desirable for you and me to know. Almost any scenario is a good one, because almost any scenario indicates weaknesses - political and military - we're now able to exploit.

So let's raise a glass to Zarqawi's End. As our favorite commercial would ask, "How in the netherworld are you, anyway?"

June 9, 2006

LPR Friday

The last one, as the class graduates! This was actually one about leadership, and I have to admit, a useful refresher for all those classes from b-school. The afternoon's case study was about Rudy Giuliani and his response to 9/11, and it's an episode worth studying for anyone who wants to know why he's a better bet than McCain to get the more-center-than-right vote for the Republican nomination in 2008.

I want to thank Bob Schaffer and Shari Williams for a terrific program. As was mentioned at last class, Bob's got a terrific grasp of all the issues, philosophical, legal, and economic, and is one of the few capable of synthesizing them and applying them to the issues of the day.

I strongly recommend the program for anyone who's interested in understanding the values that America was founded on and that need protecting now more than ever.

Is Joe Rice Running For Something?

Well, yes, actually, although you wouldn't know it from this morning's addition to the "Yes, but" Chorus from the Rocky.

The al-Qaida leader's demise has given the Iraqi people "a lot of hope and optimism," said Joe Rice, a former Glendale mayor and Army reservist who recently completed his second tour in Iraq.

Joe Rice is also running as a Democrat to succeed Joe Stengel in the Colorado House's 38th District. Should our friend Matt Dunn win the Republican nomination, this is the guy he'll be going up against.

Rice has actually been over there, so he does have some expertise on the situation. But doesn't it behoove the Rocky point out when they're giving free pub to a candidate for office?

June 8, 2006

More Mark Malloch

Mark Malloch Brown's comments yesterday aren't the first time he's denigrated the US. Here's a snippet from a Newsweek interview from the January 17th issue, just before he became the No. 2 guy there (emphasis added):

Q: Is this a chance for the United Nations to show that it is truly a viable organization, given questions about its relevance during the debate on the Iraq war?

A: This is one of the things that even the United Nations' critics usually acknowledge it's good at—humanitarian intervention. We had disaster teams on the ground within a day. We have very strong country offices in all the [affected] countries, who were already at work by the time those disaster teams arrived. We have a network of disaster partners from around the world who were quickly mobilized by this. We do this well. We couldn't do it without the logistics backbone of the United States and others, but there's recognition that it's a more internationally acceptable way to do it. But I don't think, in terms of the United Nations' standing, that we'll slay all the other ghosts we need to have good answers on—what happened with [the scandal-plagued Iraqi] Oil-for-Food [program], and if there were management failings to address them. The United Nations needs to take a good, hard look at itself and go though a series of management reforms to make ourselves more effective.

I suppose one has to defend, at least publicly, the things that your organization is supposed to do well. But this is delusional. The offices on the ground had damn well better have been working before the UN relief teams got there - they had weeks to dry out their things and get started. Mark Steyn has pointed out that while the UN was flying teams into New York to assess the cholera risk, the US and Australian had been distributing aid to Indonesia to invalidate those risk assessments. Malloch Brown makes it sound like the Southern Pacific arm of the Anglosphere was little more than a ferry service for UN men and materiel.

And what's with this "internationally acceptable?" The Indonesians were doing everything but carry our sailors around on their shoulders when they showed up. (All except for the few in Bande Aceh, who were holding their fellow Muslims hostage again.) This food, shelter, clothing, medicine, and family reunification efforts were plenty acceptable to the people on the receiving end, which is all that counts. When you've seen half your family swept out to sea, and the other half are staring various and sundry forms of death in the eye, who gives a damn what some "international civil servant" thinks is acceptable?

For more turf-building cognitive dissonance, see here.

UPDATE: This, on the other hand, doesn't sound so hostile.

Crime Down In Denver

Remarkably, people seem content with this development:

At the Westwood Montessori school, director Kathy E. Marquez agreed that police presence had been beefed up, helping drive down crime.

"We do see more police officers in the neighborhood," she said. "There is not as much graffiti yet this summer as there was last year. They clean it up now."

She said four employees of the school and a parent had their cars vandalized and broken into in broad daylight before police put the new program in place.

She said fears that the "broken windows" policing method could promote racial profiling should be laid to rest.

Jesus Espino, 17, said he welcomes more officers in Westwood because now he and his friends can walk without fear.

Espino said police officers do sometimes stop him in the street to ask him where he is going and for his identification, but he doesn't mind.

"It don't bother me 'cause I don't do nothing wrong," he said.

Evidently, the teachers in his school haven't taught young Mr. Espino to feel sufficiently oppressed by El Hombre. I'm sure that the ACLU and La Raza will want to attend to this gap in his schooling.

June 7, 2006

Wiggle Room

Marc Holtzman has finally done something to help out the Republican Party in this election:

During a news conference Tuesday at Holtzman's campaign headquarters, his running mate, Lola Spradley, brought up the issue of Dennis' endorsement of Beauprez. Spradley said going to court would remove Dennis from an awkward situation where her objectivity might be questioned.

"We want to take her off the horns of that dilemma," she said.

Dennis also has been mentioned as a possible running mate for Beauprez.

It's also noteworthy that neither Grueskin, nor Holtzman, nor Spradley, nor Gould said anything to impugn Dennis's integrity, as they had implied in the past. The suit will be filed not because they don't trust Dennis, but for jurisdictional reasons.

By giving Dennis this wiggle room (oh, cut it out), they cut the legs out from underneath the Clear Peak investigation, and also make it thinkable again for her to be on a potential Beauprez ticket in the fall.

Sound move, Marc.

June 6, 2006

Nineteen and Islam

Or, "How I Learned to Stop Worrying About the 20th Hijacker"

Apparently, the number 19 has some significance in Islam. Scroll down to Verse 30.

30 Above it are nineteen.

31 We have appointed only angels to be wardens of the Fire, and their number have We made to be a stumbling-block for those who disbelieve; that those to whom the Scripture hath been given may have certainty, and that believers may increase in faith; and that those to whom the Scripture hath been given and believers may not doubt; and that those in whose hearts there is disease, and disbelievers, may say: What meaneth Allah by this similitude ? Thus Allah sendeth astray whom He will, and whom He will He guideth. None knoweth the hosts of thy Lord save Him. This is naught else than a Reminder unto mortals.

The problem is, nobody can quite agree what this means, or even if it's very important. Some say that it's the number of Angels Guarding Hell. Some say that it's the number that signifies the Unbeliever (that'd be you and me). Some people go completely 'round the bend and write application letters to succeed Martin Gardner. Loius Farrakhan, who at least thinks he's Muslim, went on a little 19-based riff during his 400,000-Man March speech a few years back.

I'm sure that Salafists and Wahabbists probably have violent late-night Hooka fueled bull-sessions about the importance of the Number 19, at least until the Hanafis barge in and declare them all infidels. Long, mystical, Qat-enahanced tracts probably exist holding forth on this mystery.

Me, I'm guessing scribal error. Squiggle the thing the other way and it probably means, "Snack Bar."

The point isn't who's right. It's that 19 seems to hold an important place in Islam, like 613 in Judaism. It wouldn't suprise me at all to learn that there was no 20th hijacker, because Osama was trying to send a message, the same way the Ahmedinejad was with his letter. Roughly translated as, "Convert, or Die and Be Condemned to Hell." It's only our Western sense of symmetry that makes us assume that someone got caught in traffic on the way to Newark that day, leading us to spend a lot of time worry about the Missing Murderer.

Leaving Room For Meddling

As if Democrats weren't already immersed deeply enough in the Republican primary squabble, they're now using the Great Signature Battle as a means to get involved.

A Democratic political group Monday requested documents and communication related to Gov. Bill Owens' appointment of Secretary of State Gigi Dennis to determine if Dennis disqualified gubernatorial candidate Marc Holtzman for personal gain.

John Willard, spokesman for Clear Peak Colorado, said he filed the public-information request because of rumors that Dennis is a potential running mate of Holtzman's Republican rival, U.S. Rep. Bob Beauprez. Owens supports Beauprez.

Gee, who do you think started those rumors? I give you two guesses. Of course, if you guess Clear Peak themselves, it won't help you track down the culprits, since they have yet to file an 8872 with the IRS, leaving their funding a mystery. (Remember that the next time Ken Gordon talks about how it's the job of the Secretary of State to reduce the influence of money in politics. Ask him, "whose money?" and see what kind of answer you get.)

So back to the Democrats. This full-court press on the election process can serve three purposes: 1) discredit Dennis so she can't run with Beauprez; 2) keep her tied down at the Secretary of State's office so she can't run with Beauprez; 3) publicly discredit her as Secretary of State, widening this fall's Margin of Litigation for the Democrats.

Note that this creates a no-win situation for Dennis. If she stays, it calls into question the general election. If she leaves, she enters the race as damaged goods.


Peter Blake has already pointed out that while Ms. Dennis might be a great choice for Beauprez's running-mate (just imagine show tune parody opportunities, for one thing), she'll be busy trying to run elections between now and then. She's almost certainly have to resign for practical and political reasons. (No jokes about Governor Owens appointing Mark Hillman on a temporary basis.)

Holtzman is now claiming to have verified the signatures he needs. Well, good for him, if it's true, but could he at least do it without taking a shot at the Secretary of State?

[Campaign Manager Bob] Gould said Dennis's office cost the campaign valuable time because officials failed to give them all the information they needed.

Blake notes that Dennis gave the campaign "access to the signatures," and, when you sign a petition, don't you also have to write out your signature? What exactly is Holtzman claiming here? By bellyaching about the process, to the extent that anyone is still listening, he's only doing Clear Peak's work for them.

In any case, we're headed for a hearing with Holtzman trying to get uncounted signatures counted, and the Beauprez team trying to throw out previously validated ones.

Theodore Dalrymple Squares the Circle

In his review of Efraim Karsh's Islamic Imperialism: A History, Dalrymple explains how peaceful Muslims can inhabit a violently expanding religion:

But the fact that many Muslims are not fanatics is not as comforting as some might think. Consider, by way of illustration, Eric Hobsbawm, the famous, much feted, and unrepentantly Marxist historian. No one would feel personally threatened by him at a social gathering, where he would be amusing, polite, charming, and accomplished; if you had him to dinner, you wouldn’t have to count the spoons afterward, even though he theoretically opposes the idea of private wealth. In short, there would be no reason to suspect that he was about to commit a common crime against you. In this sense, he is what one might call a moderate Marxist.

But Hobsbawm has stated quite openly that, had the Soviet Union managed to create a functioning and prosperous socialist society, 20 million deaths would have been a worthwhile price to pay; and since he didn’t recognize, even partially, that the Soviet Union was not in fact on the path to such a society until many years after it had murdered 20 million of its people (if not more), it is fair to assume that, if things had turned out another way in his own country, Hobsbawm would have applauded, justified, and perhaps even instigated the murders of the very people to whom he was now, under the current dispensation, being amusing, charming, and polite. In other words, what saved Hobsbawm from committing utter evil was not his own scruples or ratiocination, and certainly not the doctrine he espoused, but the force of historical circumstance. His current moderation would have counted for nothing if world events had been different.

June 5, 2006

Feldstein Proposes Gas Rationing - Roundup

Jaw-droppingly, that's what Martin Feldstein proposes in today's Wall Street Journal.

In a system of tradeable gasoline rights, the government would give each adult a TGR debit card. The gasoline pumps at service stations that now read credit cards and debit cards would be modified to read these new TGR debit cards as well. Buying a gallon of gasoline would require using up one tradeable gasoline right as well as paying money.

The government would decide how many gallons of gasoline should be consumed per year and would give out that total number of TGRs. In 2006, Americans will buy about 110 billion gallons of gasoline. To keep that total unchanged in 2007, the government would distribute 110 billion TGRs. To reduce total gasoline consumption by 5%, it would cut the number of TGRs to 104.5 billion.

The government could distribute TGRs to reflect geographic differences in driving patterns. Additional TGRs would be distributed to each debit account at the end of each month to avoid problems of expiring rights. Businesses that use trucks would also get TGRs.

This was a column that just didn't get printed in time for the April 1st edition, right? Or maybe Feldstein was cleaning out his liquor cabinet and found this draft next to the Purim leftovers.

This is WWII rationing, pure and simple.

More likely, Feldstein has spent so long analyzing government policy on Social Security, Health Care, taxes, fiscal and monetary stimulus, that he's forgotten that we have a perfectly good system for encouraging conservation - it's called, "prices."

One wonders why Feldstein stops with gasoline. Surely a government capable of calculating how much gasoline each neighborhood needs to consume is capable of much, much more.

UPDATE: Feldstein's proposal is generating a fair amount of blogospheric comment: I still think the fundamental question is why on earth anyone thinks any government system of allocating credits ahead of time is going to be a more efficient aggregator of need than the market. Given the national balkanization of fuel mixtures and the refining process, this can only lead to more shortages.

Greg Mankiw: I have said many times that I like the idea of higher gasoline taxes, but Marty's scheme leaves me cold. Do we need to create a new administrative bureaucracy because politicians are afraid to use the word tax? I hope not.

lynne Kriesling: But it is so potentially prone to political manipulation, and over such a large number of possible stakeholder organizations, that I think it would distort decision-making enough to generate bad outcomes and entrench special interests.

John Caddell: And Feldstein has a pretty good argument as to why fuel economy standards, while well-intentioned, won't make enough difference to reduce our overall consumption quickly.

Mark Thoma: In addition, while this proposal does provide the correct incentive at the margin, I can envision an endless political fight over the allocation of credits.

Glittering Eye: I have a more basic question. Perhaps I’m being dense but how is this approach better than any other fiat system (it is a fiat system: the government is setting a quota)? Why not just let prices rise? Are they convinced that the demand for oil is infinitely inelastic?

Brad DeLong: I think Marty's right. I think it's a clever idea--and much better than tightening CAFE. Tom Kalil was talking about higher gasoline taxes with the revenue dedicated to paying the first X thousand of individuals' Social Security taxes. But I think Marty's scheme is more transparent, which gives it powerful political-economy advantages.

Arnold Kling: One gets the feeling that his main concern is to fend off fuel economy regulations, which are indeed exercises in moral vanity--they do little to reduce gasoline consumption but they do help to brand auto companies as villains.

June 4, 2006

Backbone Radio

We'll be talking with Rick O'Donnell, who's trying to keep The Most Evenly Divided District in the Country - the Colorado 7th - in Republican hands. Wendell Cox, a toll roads booster, will make the case for toll roads as the answer to congestion. Along with geography, expect bond assessment fraud to come up.

Bishop Harry Jackson of the High Impact Leadership Coalition will talk about the Black Contract With American on Moral Values. Black America, at least, voting Black America, has long been socially conservative on basic issues. The problem is, these haven't been voting issues for them. Whether or not Republicans can benefit from Black attempts to break free from the Faustian Pact they've made with the Democrats remains to be proven.

Plus, it's All Beauprez-Holtzman, All The Time!

Listen from 5-8 MT, this evening, at 710 KNUS.

June 3, 2006

Not Over Yet

Marc Holtzman is preparing to challenge the Secretary of State's ruling that he failed to get enough signatures to make it onto the ballot, and it sounds as though he may have a case.

The Rocky also seemed to miss (or perhaps misunderstand) this piece of information from the Holtzman campaign:

Though we had thousands of signatures collected by volunteers, later in the process, we also had professional petitioners assisting us in certain congressional districts.

That firm has assured us that all of their petitioners were registered Republican voters, however, if those folks were newly registered, that voter information would not yet be registered with the Secretary of State.

This is different from claiming that the signatures weren't valid, so either the Holtzman campaign misunderstood the Secretary of State, or the Rocky did.

In any case, the Beauprez and state Republican officials need to shut up and let Holtzman pursue his cross-checking of names and his challenge. That's what the rules are there for. Claiming victory and calling on Holtzman to back out are somewhat understandable from the standpoint of the campaign. Coming from the party establishment, it just looks like bullying.

June 1, 2006

They've Gone Too Far

Powerline notes that the Palestinian Media Watch has collected Palestinian cartoon portrayals of the Statue of Liberty as everything from a suicide terrorist to a prostitite. The latest atrocity, worthy no doubt of an angry mob burning Palestinian flags and reducing Hamas-sympathetic mosques to rubble, is that of a Palestinian boy peeing on Lady Liberty, on the book she holds.

Some of these are terrible, although I'm sure the Left will sympathize with the one of her being led off in chains by the FBI & CIA, since it's one they could have drawn themselves.

But the one showing a dead Spiderman simply goes too far!


For those of you who missed the link, buried in one of the posts below, here's the OU's page of Shavuot resources.

Holtzman Seems To Fall Short On Signatures

According to the Rocky, Secretary of State Gigi Dennis is prepared to announce this evening that Marc Holtzman has fallen short of the number of signatures needed to petition on to the primary ballot. Holtzman appears ready to challenge the certification process:

Holtzman, a businessman and the former State Secretary of Technology, promised to continue fighting.

"We will challenge this all the way up to the Supreme Court of Colorado," Holtzman said. "We believe we've dotted every 'i' and crossed every 't.' We produced more than double the number of signatures statewide."


Holtzman immediately vowed to gather 1,500 signatures from each of Colorado's seven congressional districts, 10,500 in all, to win a spot in the primary that way.

My guess is that there's as much chance of 50% of the signatures being invalid as there is of me being elected Pope. What almost certainly happened was that Holtzman fell below the statistical sampling threshhold in one or more specific Congressional districts, quite possibly the First. It's a district where I suspect Holtzman's support was thinnest, and also has a disproportionately low number of Republicans to canvas.

Beauprez's campaign issued a statement reading:

Marc has run a spirited campaign and I have appreciated his contribution to the debate," said Beauprez. "I look forward to working with Marc to ensure a united Republican Party and a victory this fall."

"I'm gratified and excited to be the Republican nominee and we're looking forward to a positive, issue-based campaign with our Democrat opponent in this race," concluded Beauprez.

Wouldn't hold your breath on that last bit, Bob.

In the meantime, stay tuned...

The Loyal Opposition Replies

In response to my posting below, Jeffrey Sherman, a plaintiff in the case, has sent the following reply:

I am a longtime reader and admirer of your blog, but I think you are incorrect in your post on the DRE lawsuit. I am one of the plaintiffs. I am a registered Republican. I consider myself a hard-core conservative (I can't call myself a Christian conservative because I am Jewish). I voted for and contributed money to President Bush (though not enough money to be disclosed). I became aware of this suit because a friend, whom I would describe as a very serious conservative, is the lead associate at Wheeler Trigg working on this matter.

There is no question that there are liberal-left participants in this suit, too. Perhaps they think there is some short-term advantage to having accurate elections. I can't say I know with certainty what motivates them. I do know that I joined as a plaintiff because I think the accuracy of elections is of critical importance (hopefully this is why my liberal-left co-plaintiffs joined this suit, too). Because I believe conservative ideas are ultimately more persuasive, I want to make sure that the votes of those people who vote for conservative candidates will be counted. Conservatives have been victims of election fraud for too long--dating back to the days of machine politics up through John Thune's (probably fraudulent) loss in 2000 against Tim Johnson in South Dakota. Further, the bogus nonsense about the "stolen" 2000 presidential election does no one any good. It is clear from the media recounts that President Bush would have won whether the Supreme Court stepped in or not. Having new DRE election systems that are subject to tampering and not easily subject to audit will only increase the incentive to cheat or to claim that elections were "stolen."

I was initially skeptical of participating due to the nature of some of the other participants. But, after some research, I think the proposed systems are too badly flawed and fail to meet statutory standards. Further, based on the information I have been given, the Secretary of State's office has patently failed to take the steps required under the Colorado statutes to validate the machines. I am not naïve enough to think that a lawsuit (or even legislation) can eliminate voter fraud, which has probably existed since elections have existed, nor do I favor an active judiciary that legislates voting methods. I simply want the state to abide by its own statutory mandate.

Those of us who are plaintiffs in the suit entered into a joint representation agreement that contains a Statement of Principles Regarding DRE Voting System Litigation. The principles state, inter alia, that "The fundamental right to vote means that each Colorado voter has the right to cast his or her vote in private and to have his or her vote fairly and accurately recorded and counted in a free and open election...The fundamental right to vote means that the methods, machines or systems used to record, compile, count, audit or recount votes shall be secure, accurate, verifiable and accessible to all Colorado voters." This seems to me to be not particularly controversial or partisan in nature.

Finally, I agree with you regarding requiring voters to present identification.

I sympathize with Jeffrey's position, and believe that his desire for an accurate count is clearly, indisputably correct, as far as it goes. My contention is that it doesn't go nearly far enough in order to avoid the impression that there's more at work here on the part of Mr. Finley and his attorneys.

I believe that this lawsuit is an attempt to discredit voting systems in an attempt to preserve a "margin of litigation," within which Democrats can file lawsuits challenging the results of close elections which they lose. Given the role that Democrats have played in opposing ID requirements, for instance, my faith in their desire for accurate elections is, shall we say, faint.

I would point out that it is not merely "some participants," but the organization sponsoring the various state lawsuits, and the firm leading the charge are well to the left of liberal. I don't have time to discuss all the points of the lawsuit right here, but will try to do so on Sunday, after Shavuot.

It's significant that the Florida 2000 case is best dealt with not by joining lawsuts such as this, but rather by arguing the facts of the case, which clearly support Bush. If the basis of this suit is the Myth Of Florida 2000, joining such a suit perpetuates, rather than refutes, that myth. It's also significant that it was a paper-ballot, punch card system, a "old-style" system with a theoretically verifiable paper trail, that led to election officials searching the surface of ballots with laser beams for dimples in order to determine "voter intent."

It's also true that the statement regarding the "fundamental right to vote" omits any mention of the equally fundamental right not to have my vote diluted by illegal voting. It's an open secret in Colorado that nursing home employees "help" their charges fill out their absentee ballots without the required dual-party supervision of the process. That this is the time-honored method by which the Democrats have stolen elections in the past (See Washington State Governor 2004, South Dakota Senate 2000, New York City Mayor 1989, Chicago any year) would suggest that a conservative should insist on equal billing. If that's not the basis of the suit, conservatives should be willing to file their own lawsuits demanding suitable precautions.

I understand why the need for an accurate count is a bipartisan issue. I just don't think this is the suit that will ensure fair elections.


Power, Faith, and Fantasy

Six Days of War

An Army of Davids

Learning to Read Midrash

Size Matters

Deals From Hell

A War Like No Other


A Civil War

Supreme Command

The (Mis)Behavior of Markets

The Wisdom of Crowds

Inventing Money

When Genius Failed

Blink: The Power of Thinking Without Thinking

Back in Action : An American Soldier's Story of Courage, Faith and Fortitude

How Would You Move Mt. Fuji?

Good to Great

Built to Last

Financial Fine Print

The Day the Universe Changed


The Multiple Identities of the Middle-East

The Case for Democracy

A Better War: The Unexamined Victories and Final Tragedy of America's Last Years in Vietnam

The Italians

Zakhor: Jewish History and Jewish Memory

Beyond the Verse: Talmudic Readings and Lectures

Reading Levinas/Reading Talmud