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Joshua Sharf

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December 31, 2008

Colorado Senate Republicans Start to Get It

With a whole year ahead of us, it seems churlish to take up New Year's with complaints, so I thought I'd point out something good happening here.

The Colorado Senate Republicans are light-years ahead of their House colleagues in PR. I'm not certain if being on Facebook is a requirement for being in the caucus, but at least 4 of them are friends of mine on Facebook, and the web page is consistently kept up to date with committee assignments and legislative agenda items.

They even have a twitter feed, although for the moment, it seems to be mostly a stream announcing media appearances and press quotes. Hopefully, though, they'll find some creative uses for it during the legislative session. It'd be interested to see what Senators tweet during committee hearings.

On February, 13, we'll be having Sen. Mike Kopp on RMA Radio, and new media and social networking will be high on the list of topics.

Hamas's Friends in Colorado

Last night, Denver had its very own pro-Hamas rally on the steps of the state capitol building, mostly involving sign-waving, chanting, and evening prayers. Yes, organized in some small part by, well, she who doesn't use that last name any more since she got married.

"We have a neighbor who is active with Hamas. The entire neighborhood has evacuated. They are afraid of being attacked."

Good for them. I have an even better idea.

Shemsadeen Ben-Masaud, a youth director with the Muslim American Society, led the crowd in chants: "Hey, hey, ho, ho - the occupation has got to go" as well as "Long live Palestine."

Ah, yes, that Muslim American Society. Maybe that explains the chants the Rocky didn't mention:

They keep this sort of thing up and Islam is going to have an image problem.

As well as some of the other signs that somehow didn't make it into the paper.

Because nothing says, "a free people," like a bloody red fist punching through the bottom of their flag:

Ah, the police here aren't like the police in Gaza:

For the Powerline guys, yes, it seems as though the domestic political affiliations and hopes are the same here as in Minneapolis, just two sides of the same sign:

The obligatory appropriation of Jewish holidays and horrors:

Which for some reason isn't as bad as appropriating their food. Look, sushi, pizza, and hamburgers aren't American, either, but you don't see those countries going out and attacking the US, do you?

No American flags in evidence, for some reason, but the baby blues were there for all to see:

As I said, a fair amount of the chanting was in Arabic, there were public prayers, and there are plans for Friday public prayers to be held there either this Friday or on an upcoming Friday. Not a prayer vigil. Friday public prayers, as in, "which way to the wudu?" prayers.

But...I didn't think this had anything to do with religion.

December 30, 2008

Bronco Bustin'

Fourteen years is a long time at any job, but especially as an NFL head coach. Mike Shanahan hadn't replicated the great success of his two Super Bowl wins of the late 90s, hadn't even come close in a long time. And just when he seemed a cinch to put the team in the playoffs for the first time in 3 years, he pulled a Norv Turner, his team crashing and burning in spectacular fashion on Sunday night.

Denver, like Washington, is a football town. I remember in 1989, the season after the Redskins beat Denver in the Super Bowl, a Redskins pre-season game won it's time slot in what the WaPo,'s TV critic dubbed, "The Redskins devour everything in their path." Denver's pretty much the same way. The town put up with B+ teams for a decade only because of those two Lombardi trophies.

Coaches with total control, who double as GMs rarely do well. It's almost impossible to be both good cop and bad cop at the same time to the same player. Instead of working with what they have, they have to divide their attention with getting more. They'll fall in love with personnel decisions that are a mistake. (Some of Joe Gibbs's biggest blunders came when he demanded particular players. Almost certainly his success the 2nd time around was limited by the lack of a strong GM like Charley Casserly or Bobby Beathard.)

Still, those two Super Bowl wins, numerous playoff appearances, they count for a lot. Towns with winning teams tend to forget how hard it is to get there, and how long it can be between successes. Shanahan's time was probably up. But we should appreciate what he did while he was here.

Gods of the Copybook Headings

On this, the 143rd anniversary of the birth of Rudyard Kipling, we present one of his most timely, and most timeless poems. Its sentiments express quite well why, although there is much to admire in libertarianism, I'm a Burkean conservative.

As I pass through my incarnations in every age and race,
I make my proper prostrations to the Gods of the Market Place.
Peering through reverent fingers I watch them flourish and fall,
And the Gods of the Copybook Headings, I notice, outlast them all.

We were living in trees when they met us. They showed us each in turn
That Water would certainly wet us, as Fire would certainly burn:
But we found them lacking in Uplift, Vision and Breadth of Mind,
So we left them to teach the Gorillas while we followed the March of Mankind.

We moved as the Spirit listed. They never altered their pace,
Being neither cloud nor wind-borne like the Gods of the Market Place,
But they always caught up with our progress, and presently word would come
That a tribe had been wiped off its icefield, or the lights had gone out in Rome.

With the Hopes that our World is built on they were utterly out of touch,
They denied that the Moon was Stilton; they denied she was even Dutch;
They denied that Wishes were Horses; they denied that a Pig had Wings;
So we worshipped the Gods of the Market Who promised these beautiful things.

When the Cambrian measures were forming, They promised perpetual peace.
They swore, if we gave them our weapons, that the wars of the tribes would cease.
But when we disarmed They sold us and delivered us bound to our foe,
And the Gods of the Copybook Headings said: "Stick to the Devil you know."

On the first Feminian Sandstones we were promised the Fuller Life
(Which started by loving our neighbour and ended by loving his wife)
Till our women had no more children and the men lost reason and faith,
And the Gods of the Copybook Headings said: "The Wages of Sin is Death."

In the Carboniferous Epoch we were promised abundance for all,
By robbing selected Peter to pay for collective Paul;
But, though we had plenty of money, there was nothing our money could buy,
And the Gods of the Copybook Headings said: "If you don't work you die."

Then the Gods of the Market tumbled, and their smooth-tongued wizards withdrew
And the hearts of the meanest were humbled and began to believe it was true
That All is not Gold that Glitters, and Two and Two make Four
And the Gods of the Copybook Headings limped up to explain it once more.

As it will be in the future, it was at the birth of Man
There are only four things certain since Social Progress began.
That the Dog returns to his Vomit and the Sow returns to her Mire,
And the burnt Fool's bandaged finger goes wabbling back to the Fire;

And that after this is accomplished, and the brave new world begins
When all men are paid for existing and no man must pay for his sins,
As surely as Water will wet us, as surely as Fire will burn,
The Gods of the Copybook Headings with terror and slaughter return!

December 29, 2008

Drought Is Income Statement, Reserves are Balance Sheet...

...and as always, a shortage is about cash flow management. There's not much you can do about rainfall or snowpack, but it's easier to do the last if you've taken care of the second one..

Stirred, Not Shaken

That's what we ought to be after a molotov cocktail attack on a Chicago synagogue. The AP is reporting that the police are investigating it as a hate crime, but, "Officials say they don't know if there's a link between the incident and increased violence in the Middle East."

No, of course not. Probably no connection whatsoever. Obviously, it could just as easily have been a white supremacist as an Arab, but I'm guessing this wasn't just someone who thought it would be cool to light up a shul on the last night of Channukah.

December 26, 2008

The Crucifixions Will Continue Until Morale Improves

According to a report in the London-based Al Hayat:

The Hamas parliament in the Gaza Strip voted in favor of a law allowing courts to mete out sentences in the spirit of Islam, the London-based Arab daily Al Hayat reported Wednesday. Hamas leader Ismael Haniyeh...

According to the bill, approved in its second reading and awaiting a third reading before the approval of Palestinian Authority President Mahmoud Abbas, as the Palestinian constitution demands, courts will be able to condemn offenders to a plethora of violent punitive measures in line with Sharia Law.

Such punishments include whipping, severing hands, crucifixion and hanging. The bill reserves death sentences to people who negotiate with a foreign government "against Palestinian interests" and engage in any activity that can "hurt Palestinian morale."

Naturally, Hamas is denying the report, but Palestinian Media Watch has collected a number of previous statements by Hamas, promising to introduce such a code.

Doubt, or at least the attempt to create confusion, about Palestinian legislative proceedings is pretty much a constant in their affairs. When the Palestinian Parliament supposedly voted to amend its charter removing statements hostile to Israel's existence, nobody could be sure how the vote had been taken, if it had been taken, or produce a reliable text of the new charter or agree on what changes had been made.

Then again, even when the western media bother to report their proceedings, they can't even get such basics as the time of day correct, falling for midday candlelight vigils.

Real governments with actual parliaments don't behave this way. Propaganda machines run by dictators do. Hamas isn't serious about governing, any more than the Palestinian Authority is. It does appear serious about maintaining its vicious grip on its own people, and of course, it's most serious about killing Jews.

The Other Car Industry

The Japanese one, that is, both here and in Japan. As Japanese auto purchases plummet, Japanese car companies are ratcheting down domestic production.

Production of passenger cars in Japan decreased 20.3 percent in November from the previous year to 737,797 vehicles, while production of trucks here declined 20.9 percent for the month to 106,170.


Auto executives have expressed dismay at the fall in Japanese sales, which have worsened in the last two months.

Japanese plants are being idled to reduce production, and thousands of assembly line workers have lost their jobs in recent weeks.

In the meantime, Japanese companies are also cutting production at their array of plants here in the US, but so far have only cut contract and part-time workers. Despite cuts in Ohio, Indiana and Alabama production, Honda is avoiding layoff. Toyota has avoided them so far, but may be forced into cutting North American workers.

What does this mean? Mostly that American auto workers aren't competing with Japanese workers any more, but with each other. The Japanese labor market is driven by Japanese demand, and the American labor market is being driven by American auto demand. These plants were originally put here to meet domestic US demand, and that's what they're doing.

Secondly, Japanese multinationals are no more loyal to Tokyo than US-based multinationals are loyal to the US. Otherwise, these Japanese companies would be cutting US employment in order to keep their Japanese workers employed, exporting cars to the US.

Finally, beware a currency collapse. Should the dollar decline precipitously against the Yen, and 14% is not precipitous, even operations that are making money here in the US could be endangered. All those dollars that Honda is making only help the parent company if they can be profitably shifted to other markets or other facilities. Otherwise, they're only good here in the US. If those dollars won't buy enough Yen, or Bhat, or whatever, to finance improvements elsewhere, their value to Honda HQ is greatly diminished.

December 25, 2008

To Our Christian Readers

December 23, 2008


Bagel Boss, Long Island, New York

Trail of Lights, Chatfield

December 21, 2008

Colorado Tuition Rises - No Focus on Spending

So, once again, students in the Colorado university system and their parents will be asked to pay more for tuition.  The Rocky slips this university talking point into its report:

Low state funding has driven heavy tuition increases every year since the beginning of the decade.

Of course, how the money's being spent escapes all attention. Good luck figuring out how much it takes to educate a 4-year student at CU; the university's allegedly been trying for years to figure that out, and still can't provide a number.

The fact is that universities themselves are increasingly perceived as irrelevant, even as their degrees become an ever-more important entry ticket to the professions. It's the price they're now paying for having assumed their importance for so many years, rather than having earned it.

December 16, 2008

I Want My Rocky

Some of the writers over at the Rocky have started a site, I Want My Rocky, dedicated to saving their newspaper.

Good luck with that. I doubt that those participating believe that they're doing anything other than sharing memories, more or less resigned to the demise of their beloved paper. A letter-writing campaign may have given us one more miserable half-season of Star Trek, but owners are more savvy now.

What struck me was the old-time, MSM-based orientation of the site. The stories linked to are almost all print or tv news sites. The important links are all legislators and Scripps, as though elected officials had been able to save the NY Sun. In the meantime, there's an appeal to something called the Newspaper Preservation Act, and a friendly reminder from the union.

There is, it appears no Facebook group, no twitter hash tag, There's a plea for links to stories about the site, implying no access to Google Alerts. There's no discussion of alternate business models, of the kids taking over the barn and saving the paper themselves, no talk of making an online model work.

The Rocky's demise isn't something to celebrate, it's something to mourn. I've gotten to know some of the reporters and columnists personally. I've no desire to see them unemployed. But this site underscores the somewhat blinkered thinking that has let newspapers get overrun by new media, and doesn't give much hope for change,

Annual Christmas Lights Posting

Longtime readers of this blog will know that I like Christmas. Being Jewish, I'm more or less indifferent to the religious aspects of the holiday. I like the music and I like the lights. Particularly the lights. Single strands of lights aren't impressive. Lights doing little but lining lawn decorations are sad, weak little things. But wrap trees and houses in them, throw blankets of them over the shrubbery, set them to music, and they're as mesermizing as the Bellagio fountains.

But I've noticed a trend toward Christmas balloons, with a tackiness beyond description. I've seen Santa, reindeer, Snoopy, and even Spongebob Santa balloons. Some are animated, like reindeer helping Santa climb out of the chimney. A number of the animasted ones require continuous air flow to stay inflated, so when the homeowner turns off the power in the morning, they collapse, leaving a scene like a Christmas massacre. There's holiday cheer for you.

Lights require and encourage creativity. Their abstractness makes them accessible. And there's just something cheerful about of a lot of synchronized, blinking lights changing color in the middle of December. Balloons may or may not be cheap, but they certainly look cheap.

RMA Blog Talk Radio V

Another edition of RMA's Blog Talk Radio is in the books.  Listen here or here, as Michael Sandoval, Ben DeGrow, and I talk with each other about the flux in Colorado politics, and with State Rep. Kevin Lundberg about state issues ranging from the budget, to PERA, to Medicaid reform, and education tax credits.

Jim Cannon, RIP

Yesterday, we were all stunned by the news that Jim Cannon had passed away.

Jim was one of the RMA's founding members, a true patriot, and fine friend. He had been in a rehab center for some time, but the last time I spoke with Guy, he expected him to be home for Christmas.

I'll remember Jim for two things. His own courage in the face of a lingering, malicious disease, and how he used his blog for the troops. 

Whenever I had a chance to visit Jim, which wasn't often enough, he was always upbeat and cheerful, regardless of how he may of been feeling on the inside.  That's hard, to make your hospital visitors feel better.

Jim was also always on board with any initiative for the troops, particularly his Letters from Home project.  Through his ever-changing URLs or email addresses, that was a constant.

Blogs often go dark, but not like this.  Go by and leave a comment on Thinking Right

December 15, 2008

Freeze. Property Tax Freeze, That Is

A week ago last Friday, to little acclaim, the Colorado Supreme Court issued a preliminary ruling allowing the property tax freeze to go forward, pending a final ruling. It's hard to imagine that the Court, having allowed the change to take effect, would reverse itself. Ironically, this ruling may have the opposite effect of what was initially intended.

Localities would frequently adjust property tax rates downward, in order to maintain the dollar amount residents pay. Earlier this year, the Governor pushed through a measure freezing mill levys, which in a rising real estate market would have had the effect of raising propoerty taxes for most of the state's residents. Most localities fund the public schools through their property taxes. Therefore, baarring an equivalent tax cut at the state level, it would have resulted in a net tax increase.

TABOR, the Taxpayer's Bill of Rights, requires any change in tax policy which would result in a net tax increase to be approved by the voters. As a result, a lower court ruled the law unconstitutional earlier this year, and stayed its implementation. Last Friday, the Supreme Court reversed the lower court's stay, permitting the freeze to take effect, pending its own final ruling.

On the face of it, it's hard to justify this action from the court. Given the direction of assessments for which the new rates will apply, this is clearly a change in policy raising taxes. Moreover, localities will factor this raise into their budgets, and then cry bloody murder if forced to lower rates again. (No doubt, the press will dutifully report the alleged catastrophic effects on schools, while ignoring the actual catastrophic effects on homeowners' budgets.)

The argument for the policy change will no doubt be that the freeze is actually neutral, since assessments can go both up and down, and the government is merely keeping rates the same. The problem with this argument is that one or two years notwitstanding, assessments almost always go up. Moreoever the law overrides a longstanding policy designed to keep dollar amounts level, with the clear intent of raising taxes.

The irony is that this year, personal assessments are likely to fall, meaning that next year, the freeze will almost certainly cost cities revenue.

December 14, 2008


That's pretty much the subject of conversation.  It got to -15 yesterday, or -8, or -23, depending on your source and where the thermometer was.  The dog found himself stuck between nature calling and nature ambushing.  The water pipes needed attention, but held.  Any critters looking to the garage for sanctuary would have been severely disappointed.

But it's a dry cold, of course.

People say they can't remember it being this cold before.  Someone here at work from Poland claims she's never been this cold.

Eight years ago, we got a nice snow one night in January or February.  The next morning was crystal clear, the sky as blue as I've ever see it.  It was so cold that the snow hadn't melted off any of the trees by about 9:00 AM.  The pictures are here.  That was cold, but I don't think it was as cold as it's been here yesterday and today.

My temperature-preference graph is decidedly non-linear.  If "comfortable" is about 70, I'd prefer 60 degrees to 80 degrees all the time.  I'd even prefer 50 to 90 most of the time.  I'll generally take cold over hot, even wet cold over muggy, swim-to-work hot.  But this is ridiculous.  It's like a reverse-Phoenix, with people scurrying from heated edifice to heated edifice in their heated cars.

It's cold enough that it wouldn't surprise me if Al Gore had changed planes out at DIA, or flown into Centennial over the weekend.

In the meantime, enjoy this headline from the WSJ, breaking news from 3 billion years ago, as James Taranto would put it:

Greek Plant to Use Solar Technology

Ken Gordon Campaigns for Secretary of State

Which wouldn't be news if this were 2006, when he was running for the office.  Now, he's campaigning for an appointment, showing all the class and dignity that we've come to expect from him.  That is to say, God help us if he becomes Secretary of State.

First, he sent out an email asking his supported to vote in an online poll, and now he's asking them to do the same for a poll involving the finalists, and to send an email to the Secretary of State's office expressing support.

During the campaign, one Republican State Senator remarked to me that Gordon, as Senate Majority Leader, was fair, except when he wasn't.  We've seen in Minnesota these past few days how a partisan Secretary of State can damage the election process during a recount.

Gordon argues that:

I can't help but think, however, that I am the most qualified for the Secretary of State position and have the most focused interest in the issues that are dealt with in that office.
Except that his 2006 loss to Mike Coffman was widely attributed to the fact that he based his campaign largely on his support for Referendum C and for undermining the Electoral College.  In short, issues completely irrelevant to the Secretary of State's office. 

He's argued that he wants to use the office to encourage the youth vote.  Fine enough, except for having expressed open disdain for the idea that some youth might be voting in more than one state. Oh, that and the fact that encouraging voting isn't in the Secretary of State's job description - making sure that the rules are followed is.

Here, Gordon also has a problem.  He's made the argument that citizenship needn't be proven in order to register to vote, because of the burden of proving it.  He can't make the argument with a straight face, but that hasn't stopped him.

Either Romanoff or Buescher would be a better choice.

December 12, 2008

Bad Markets Mask Problems, Too

Hank Paulson, and now the British, are complaining that the bailout money available to the banks isn't being lent.  So why not?

Well, it's not because banks are happy to sit on fat piles of cash while you and I look for work.  And it's not, contrary to some conspiratorial emails I've gotten, because the bank want to own everything from the GM to your house.

Banks make money by lending.  They don't make money by being in the real estate business, or the car business, or any other business other than lending.  They want to be able to judge good managers of those businesses, but they neither have nor want the skills to run those businesses themselves.

So why aren't they lending?  It's because they can't find anyone they want to lend to.  They won't lend to other banks because they can't tell which banks are sound and which aren't.  But most of their business comes from lending to businesses, and right now, it's almost impossible to tell which businesses have good stories and which don't.

I spoke which a friend of mine who invests money for a living.  He's a value investor, and a good one, and his complaint was that every company had one of two stories: it wouldn't make it, or it had a great model for when the economy turned around.  The valuation measures he uses - that most value investors use - aren't distinguishing between merely good companies and companies actually worth investing in.

It means that almost every company's story is now the macro story, the story of the larger economy, not its own.  And it means that the market, the individual decisions that individual investors make about individual companies, is being driven by the uncertainty in that macro picture.

The sooner we let the market find a bottom, the sooner we let the economy adjust, the sooner those valuation measures will begin to make sense again, and the sooner we can start turning this thing around.

Or, Obama can take all that FDR talk seriously, and we can be having the same discussion 7 years from now.

December 11, 2008

More Bailout Follies

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is im-possible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.

Adam Smith, The Wealth of Nations

Even though the bailout package now seems to be debt-based rather than equity-based, the basic dynamic hasn't changed - the government is going into business with the Big Three.  It isn't merely requiring such meetings, it's participating in them.

What's even weirder is Elisabeth Moss Kanter's discussion of the lack of green planning by the Big Three, as a condition for receiving public funds:

All three of the plans talk about how they're getting better at building cars to [meet] market demand. Pause for a moment and think about that. These are the biggest advertisers probably in the world. And that makes it sound like they're passive recipients of consumer preferences, as opposed to shaping consumer preferences. So I would ask [the car companies] what are you going to do in your advertising and marketing this time to guarantee that the public actually wants green cars?

Implicit in the patronizing notion that people can be bludgeoned by advertising into wanting something they don't want, is the notion that they should be.  By government fiat.  Leave aside the fact that the so-called "green" cars will create an increased demand for electricity that regulators are doing everything to not meet.

People aren't buying green cars because the payback periods (including increased and naturally-rising maintenance costs) extend well past the second century of the Cubs' rebuilding program.  If you pay more that you have to for the same item - in this case, getting from home to your job - you'll have less left over for everything else, including reitrement.  That's called a lower standard of living.

You might try to offset this by buying into one of the rent-seeking green companies, and that'll work until everyone buys in and reduces returns to market rates.  Inefficient investment is no more better for an economy than inefficient purchasing.

So what Prof. Kanter is proposing is that we use our own money to persuade ourselves to live more poorly.  As the Powerline guys put it, lower living standards aren't the solution, they're the problem.

December 10, 2008

Bailout Exit Strategy

Under what conditions would the government liquidate its proposed stake in the car companies?  In short, what's the exit strategy.

Should the companies become profitable again, there may be considerable pressure for the government to stay in the game and collect dividends.  And even if the car companies wanted to buy out the government, it might never be to their financial advantage to do so.  If the shares are over-valued, it's to GM's advantage to let them drop before buying.  If undervalued, GM's move to buy would be interpreted as such, and the government might well choose to them the shares appreciate.

But the real threat here is regulatory.  The Big Three would find themselves with a friend in government, more able than ever - and with a profit motive to boot - to muck around with the rules to the benefit of rent-seeking auto companies, and with a proven disinclination to defer to market discipline.

Our own Diana DeGette, Congressman for Denver, is Chief Deputy Whip, thus a part of leadership.  She's also the outgoing Vice Chairman of the House Energy and Commerce Committee, so will exercise considerable oversight of this monstrosity.

I just placed a call to her office for clarification (1:15 PM Denver time), and am awaiting a reply.

Rebuilding the House of Cards

With its Treasury assets low, the Fed is considering issuing its own debt, something it's never done before, and may be prohibited by law from doing.  The central bank has seen its balance sheet more than double, to over $2 trillion, and is trying to come up with added flexibility.

This is a spectacularly bad idea, so I'd expect to see enabling legislation on the President's desk by next week.

Anyone who buys Fed debt would be basically buying all those risky assets - plus whatever new risky assets the Fed decides to backstop tomorrow.  The market doesn't think much of those securities, which is why the Fed had to step in and buy them in the first place.  On the open market, they'd have insanely high yields and minimal value.  What the Fed is proposing to do is to remarket those securities, in effect as CDOs without the tranches, rebuilding the house of cards that got us into this problem in the first place.

Any difference between the yield those securities would be required to pay on the open market and the interest rate the Fed would have to pay would be - totally and completely - based on the public's confidence in the US Government's ability to cover those costs.  In other words, you and me. 

There are also almost certainly conflicts of interest (so to speak) between the Fed's role as a stabilizer of the debt markets and its role as a participant in them.  It's one reason the Fed has been independent, with the ability to tighten money and drive up borrowing costs largely without interference from the Treasury.  The Fed as debtor may be much less willing to fight inflation.

December 9, 2008

The Bradley Effect

Turns out that the Bradley Effect is alive and well, just not in politics. People tell pollsters that the Discovery Channel and the History Channel are the reason they love cable so much. But they really watch the USA network, sports, and Nickelodeon.

December 8, 2008

The Problem With Experts

The problem with experts is that they're awful at predicting the things they're supposed to predict.  Nassim Taleb makes this point in both Fooled by Randomness and The Black Swan.  The problem with reporters is that they don't bother to check how well the experts have done in the past.

The CU Boulder's Leeds Business School released its Business Economic Forecast for 2009.  Both the Post and the Rocky reported on it, doing little more than repeating the predictions.  Now, the whole thing's available for download here.

Looking back over the 2005-2007 predictions, they've done all right, but nothing spectacular.  And this year's prediction spent time on the housing market, but completely missed the financial crisis and the mortgage industry's spillover into the rest of the economy.  The 2008 forecast doesn't even mention the word "mortgage" outside of the housing industry survey.

In terms of percentage change in total employment, they were off by 8% in 2005, 1% in 2006, and 17% in 2007.  That's not bad, but their sector-by-sector results aren't so good.  They've consistently underestimated the Mining sector's growth, as well as government growth.  They're almost never under 10% relative error on these estimates.  When the change is near 0, that's going to happen, but of the 33 sector predictions over the last 3 years, only 6 have been under +/-1000.

I saw the same thing when I was valuing a construction company at the brokerage.  The American Institute of Architects tries to predict construction activity, but their sector predictions are almost never with 10% of the actual number. 

We use these numbers because we don't think we have anything better.  That doesn't mean they're actually good.

Rocky for Sale

As by now everyone know, the Rocky Mountain News has been put on the block.  This at a time when the Tribune Company has filed for Chapter 11, when over 30 papers are for sale nationwide, and there don't seem to be any buyers for large-market papers.  The business reasons for this have been chewed over ad infinitum, but the chief culprit is declining ad revenue, which only looks to get worse.  (I'd also suggest brand equity; the Rocky used to win the lion's share of the journalism awards, but the Post had a better brand, in part because broadsheets seem to carry greater credibility.)

Editorially, this is an opportunity.  It's an opportunity for center-right bloggers, who will now be able to go after the Post as it inevitably spins off to the left, becoming our version of the Strib.  It's an opportunity for us to do more original reporting, since it's possible the Rocky won't be there to do it.

It may be a big opportunity for the Examiner, which may try to pick up some of the loose talent soon to be running around Denver looking for work.  The online paper is based here in town, and could rapidly turn its local edition into the flagship for the country.

It's also an opportunity for the talent at the Rocky, who could try the same thing on their own.  Shed the national reporting, bring in some entrepreneurial-minded management, ditch the printing presses and expensive delivery system, and turn the paper into an online, state- and local-oriented newspaper.  Charge a nominal fee for a subscription, and go back to a no-holds-barred style, that takes on the Post directly.

December 5, 2008

Are Coloradoans Stingy?

"Stingy," was what the UN deputy Secretary General called Americans for our response to the Asian tsunami a few years ago.  His comparison conveniently ignored our private contributions, which dwarf anything governments have to offer, especially in Red States.  (It also ignored the fact that the US Navy was the only instrument delivering anything approaching actual aid, as opposed to notional aid, which consists of meetings about aid rather than aid itself.)

So it should be a matter of concern when the Colorado Non-Profit Association issues a report claiming large declines in Colorado's charitable giving between 2005 and 2006.  The average family's charitable giving declined from $4075 to $4046.

But what goes unmentioned is that, according to the Tax Foundation, the average per capita state and local tax burden rose from 3.1% to 3.4%, and from $3815 to $4185, more than 10 times the putative decline in giving.  The idea that Coloradoans might, in part, have been giving less voluntarily because they were giving more mandatorily doesn't seem to have occurred to anyone.

There are also significant methodological questions.  They claim that Colorado has the 5th highest income, adjusted for cost of living, in the country.  But when I use the BEA's personal income numbers,adjusted by the same state Cost of Living Index they use, Colorado comes in 15th, not 5th.

The study fails to account for volunteer hours contributed.  It's understandable that an organization that defines well-being at least in part by how many paid staff they can afford to hire, would minimize the contributions of volunteers.

The Denver Post's story asks none of these questions, and completely ignores the tax issue and the relevant methodological issues, instead amounting to a press release for the state's non-profits.  Since they tend to support any change in tax policy which allows them to lobby a few state officals rather than compete for fundaising among the state's citizenry, this report and article will almost certainly be cited as the basis for further proposed tax increases.

December 3, 2008

Mission Creep

The Wall Street Journal reports that major car-buyers want in on the plan to rescue Detroit:

Avis, a subsidiary of Avis Budget Group, is floating a plan to have the Federal Reserve and Treasury purchase the debt issued by so-called fleet purchasers. The plan also calls for Congress to authorize direct loans to such firms for the purpose of buying cars and trucks. 

Due to the credit freeze, trucking companies and car and limousine rental companies haven't been able to raise enough cash to finance their fleets. Such firms are "critical to the overall stability and long term sustainability" of the U.S. auto industry, reads a legislative proposal Avis has circulated on Capitol Hill.

Well, that didn't take long.

Fish and Wildlife to People: "Rats!"

The US Fish and Wildlife Service has moved one step closer to declaring the prairie dog - of which there are millions, with habitats in a dozen states - endangered. While the prairie dog is the kind of animal most people had in mind when the Endangered Species Act was passed, it's also not even close to being endangered.

Prairie dog-niks say the animals were here first, are no threat to humans and are a reminder of how the plains used to be, before farms, houses and strip malls.

Their allies include some people who don't like more development in general.

The first sentence is a collection of non-sequiturs.  Of course the prairie dogs were here first.  So were all animals.  And an animal doesn't have to be a threat to humans to forfeit protection.  It merely has to be non-endangered.  Black bears are manifestly a threat to humans, but are a dime-a-dozen, and not on the list.

It does, however, come close to revealing the true hostility of the rodents' advocates to human beings and their desire to live pleasant lives.  The second is closer to the real purpose behind this movement.  It's a typical perversion of the ESA designed to prevent development and dictate land use policy from Washington.

I wonder if Sen. Salazar and Gov. Ritter will be as quick to intervene in the federal regulatory process this time as they were in trying to prevent oil shale development.

Denver Debt

This past election, Denver voters passed a school bond initiative worth almost half a billion dollars, the only locality to pass its bond initiative.  There's a reason places De-Bruce, but there's also a reason that it's a terrible idea to do so.  Now Dave Ballmer of Douglas County is probably one of the smartest guys in the State House, and he's pointed out that if you can borrow low, it's better to do that and lock in a low interest rate for the long-term.

The problem is that right now may not be the best time to borrow low.

At the moment, Denver's not exactly swimming in debt, but it also doesn't have a huge amount of flexibility there.  According to the 2008 Approved Budget, the city will spend $361 million in debt service, most of which ($274 million) is for DIA bonds.  That's from total net expenditures of about $2.1 billion, for just under 17% of spending.  That's more than was on the books for capital expenditures - $272 million.

However, Denver's already facing a $7 million shortfall this year.  That may not sound like much, but it will assuredly be larger next year.  Denver will have to float that debt, which by definition is general obligation debt and not revenue bonds. 

We have some idea of what the market might pay. The Bond Buyer Muni Index which measures the prices paid for municipal bonds.  It's off 19% from its high 2 years ago, and the average yield is now 6.16%, well up from its 52-week low of 4.72%.  But consider this: yesterday the NY/NJ Port Authority got no takers at auction.

Hell of a time to take on another $500,000,000 in debt, huh?

Blog Talk Radio

Last night, Ben DeGrow, Randy Ketner, and I interviewed Todd Bensman of the San Antonio Express-News about his work,which focuses on the border, and our relationship with Latin America. Todd's started a series about how the US is now serving as the Arsenal of Anarchy (my words, not his), the supplier of first resort for the private armies now roaming large parts of the Mexican countryside.

We Americans like to think of ourselves as Steve McQueen and Yul Brynner. It's too bad that we're arming Calvera.

Next week, we'll be joined by Aurora City Councilman Ryan Frazier to talk about Denver's neighbor to the east, Aurora, as well as state issues, and what the new president is likely to mean for Colorado.

J-Street Suicide

The Israeli journal Azure has emerged as the best center-right English-language Israeli journal out there. Its mission is to provide the intellectual and ideological underpinnings for the revival of Zionism as an active force in Israeli life. (It also carries some religious commentary, tending towards the modern Orthodox)

In the current number, Michael Oren examines the complex relationship between Israeli Jews and American Jews. In one paragraph, he describes the transformative effects of Israel's victory in the Six-Day War:

The victory also accorded American Jewry immense clout in domestic politics, primarily via Congress, which ratified ever-expanding aid packages for Israel. Indeed, though established in 1953, the American Israel Public Affairs Committee--AIPAC, the pro-Israel lobby--emerged as an influential force in American foreign policymaking only in the mid-1970s, after Israel became the world's foremost recipient of American largesse. Contrary to the often asserted anti-Zionist charge that Israel owes its strength to American Jewish power, in fact, American Jewish power was forged by Israel.

While Oren overstates the Jewish clout in American poitics (the gigantic aid packages are but a miniscule fraction of the federal budget), this rings true to me. Americans can and do respect those who fight for themselves, especially those who do so successfully. That American Jews would both absorb and benefit from that attitude after 1967 is unsurprising.

It also suggests that in the face of military reverses, Israel's stature, that of American Jews, and the effectiveness of the "Israel Lobby" could all suffer seriously. Likewise, the effectiveness of the Arab Lobby and the arabists in our foreign policy apparatus would increase substantially.

The fact that liberal American Jews don't believe this order of cause-and-effect has both explanatory and predictive power. It goes a long way to explaining why they continue to vote overwhelmingly Democrat in national elections: we don't feel as though we're in exile, therefore don't need Israel to rescue us. We can plausibly deny the link between Israel's fate and our own, and can also persuade ourselves that nothing catastrophic can really happen to Israel, and that should catastrophe appear imminent, we can persuade the US government to prevent it.

That those on the left, such as J-Street, don't understand their own countrymen well enough to understand that, by and large, Americans will only help those who help themselves, is pathetic. That they seek to influence US policy so as to pressure Israel into making concessions that would make catastrophe all but inevitable is suicidal.

December 2, 2008

Junior Strikes Out

I've been a fan of John Feinstein's sports writing for years. Not so much of his political writing. Today's Washington Post carries a sterling example of the latter, masquerading as the former.

As some of you may have heard, New York Giants wide receiver Plaxico Burress carried an unlicensed handgun into a New York nightclub (is there any other kind of handgun for a private citizen in New York?), and put himself on the disabled list by shooting himself in the leg.

This is the latest in a series of gun-related, ah, fumbles by NFL players in recent months, and Feinstein uses it as an excuse to call for repeal of the 2nd Amendment, and to launch a broadside at those who might disagree:

Now, let's not start screaming about the Second Amendment. To begin with, the amendment should be abolished -- a sensible interpretation of the amendment is that it was written to allow the people to raise a militia for protection and to hunt for food. Clearly no one needs to raise a militia these days, and those who hunt for a living can be licensed to do so.

It would be nice if President-elect Obama had the time to focus his energies on repeal of the Second Amendment, but he first has to deal with a broken economy and the incredibly wrong-headed war started by his predecessor. What's more, the issue of gun rights causes almost as much screaming from the right as abortion rights, the irony being that those yelling the loudest about the right to life are usually those yelling almost as loud about their right to carry weapons that kill.

Barring that, he says, the NFL should make it a condition of employment that no player can own a handgun. This, because protection even in their own homes is something that NFL players apparently can't be trusted with. To get there, he has to revisit the death of Sean Taylor, who had gotten himself on the straight and narrow just in time to be killed in his own house by what I would presume to be

It's not worth arguing the 2nd Amendment with someone who lives near DC but who evidently hasn't bothered to read or understand the Heller case. But the juvenalia on display in the second paragraph could have appeared, word for word, in the Cavalier Daily 25 years ago when I was in school. And probably did.

Imagine a conservative sportswriter writing a column about the evils of McCain-Feingold, the abuses of Title IX (coming to a physics department near you), or the joys of limited government, and in the bargain, questioning man-made climate change and accusing Obama of socialist tendencies. I'm sure it happens every once in a long while, and when politics creeps into sports talk radio, it does tend to be from both sides. But for some reason, the print guys tend to think their columns are a license to shill for the Left.

December 1, 2008

PERA's Limited Options

As some of you may have heard, PERA, Colorado's Public Employee Retirement program, has got a little problem. At latest report, its obligations were down to being about 60% funded, a couple of decades out, down from 80%, which is considered fully-funded. This is before taking into account paper losses from real estate and other non-equity investments.

The reason that being underfunded 30 years out is a problem is that there are still bills to pay today, and that at some point you start paying out money faster than it can grow. One day, you wake up, and the seed corn is gone at the retirees are at the door.

Yesterday's Denver Post cites a 2004 State AG's report to the effect that there may be some legal limitations to what PERA can do. In all likelihood, benefits to current retirees are sacrosanct, barring a constitutional amendment (aren't you now that glad we rejected Referendum O?) to permit a reduction of benefits.

New hires should be put into the 401(k) without even the option of a defined-benefit plan. Those at or approaching retirement age should probably not have their benefits tinkered with. But some combination of higher contributions by employees, lower benefits, and a higher retirement age (really, who gets to retire on full bennies at 57?) will probably be required.

PERA's Board may have to show to a court's satisfaction that all this is necessary to prevent major street corners from being overrun by former state employees and the inevitable tin cup shortage. At the same time, there's no question that PERA has been operating under one of those unspoken assumptions that the taxpayers will always be there to bail them out, if necessary. Thus the somewhat rosy 8.5% growth assumptions underlying their projections.

We'll probably have to await the 2008 Annual Report to see exactly how bad things are, but there's no question that the sooner we deal with this the better. After all, better to ask public employees now to contribute more to their own financial security than to ask you, 15 years down the road and a few years away from your own golden years, to work for a few more years.

Disarming the Front Lines

Completely missing from media reports of the Mumbai attacks are India's strict gun control laws, which virtually disarmed the people at the point of attack, turning them almost inevitably - and almost immediately - into victims. (Hat Tip: Instapundit)

I'm mentioned before that should you - God forbid - find yourself in such a situation, you must act as though your life is already forfeit, since the jihadis will treat your life that way. Difficult though it is, acting to thwart or complicate the attack is the best way to save your life and those of others.

Apparently, it hasn't occurred to the media that the best way of making sure that doesn't happen is to make the targets helpless.


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