Month: February 2009

From the Archives: Sirius XM

Consider:

Financially strapped Sirius XM Radio Inc. said Friday that it could file for bankruptcy as early as Tuesday if it cannot successfully negotiate with the holders of its debt.

Flash back to February 2007, where I defended the then-newly-proposed merger between Sirius and XM:

More to the case at hand, perhaps it’s better to let one of the two surrender and preserve assets for productive use than to make them fight each other until one company is toast.

Or both companies are toast, thanks to the FCC ignoring its 180 window for review and burdening the merged company with its theories on how satellite radio should operate. Look at the positive side, though. If Sirius XM fails, there won’t be a monopoly. Merger opponents will have saved the American consumer from a catastrophe!

(Disclosure: I own shares in Sirius XM. I expect the company to go into bankruptcy. I do not expect it to disappear.)

Mobility Improves an Economy

I dislike putting requirements on the ability to exercise a right, but we don’t live with a perfect government. In that context I endorse the idea Thomas Friedman discussed earlier this week:

Leave it to a brainy Indian to come up with the cheapest and surest way to stimulate our economy: immigration.

“All you need to do is grant visas to two million Indians, Chinese and Koreans,” said Shekhar Gupta, editor of The Indian Express newspaper. “We will buy up all the subprime homes. We will work 18 hours a day to pay for them. We will immediately improve your savings rate — no Indian bank today has more than 2 percent nonperforming loans because not paying your mortgage is considered shameful here. And we will start new companies to create our own jobs and jobs for more Americans.”

This is not the first time I’ve heard this idea; the first was possibly from Jonathan Rowe. It made sense when I first read it. I haven’t changed my mind.

I disagree with part of Friedman’s conclusion, though. It’s the same short-sighted belief that government can accurately predict all economic factors.

We don’t want to come out of this crisis with just inflation, a mountain of debt and more shovel-ready jobs. We want to — we have to — come out of it with a new Intel, Google, Microsoft and Apple. I would have loved to have seen the stimulus package include a government-funded venture capital bank to help finance all the start-ups that are clearly not starting up today — in the clean-energy space they’re dying like flies — because of a lack of liquidity from traditional lending sources.

Friedman was so close. He is saying that government should (partially) get out of the way of economic growth, but it should get in the way of decisions made to build wealth by those who benefit from better immigration policy. Now we need to require that immigrants buy a house and have skills in politically preferred sectors. A question or three: Would government-backed venture capital have funded Apple when it wanted to build its first home computer in the 1970’s? Would it have funded a company making mainframes? Would a major industry player like IBM have leaned on politicians?

Still, the bulk of this argument is logical, which is why our government will never do it. Our present climate of fear and populism is too strong.

Ted Poe Field at House of Representatives Stadium?

Following up on a story I discussed last month, six U.S. House members from New York urged Treasury to ignore the call to cancel Citigroup’s naming-rights deal with the New York Mets:

“It is deceitful and unreasonable to single out Citigroup for an agreement signed several years ago,” they wrote, “without referencing the many other companies who have stadium naming rights deals and also received federal assistance.”

“Are we ready to remove their names from those stadiums?” Engel asked in a statement. “Or is this a rule to apply solely to Citigroup and the Mets?”

Naturally one of the original instigators, Rep. Ted Poe (R-Texas), gave a rebuttal:

“All companies that came to Washington with their hands out for taxpayer money should have to answer to the taxpayer as well,” he said. “This is the consequence of getting in bed with the federal government — they are going to tell you how to spend your money.”

Isn’t it interesting that Rep. Poe refers to this as “getting in bed”? A responsible government leader would’ve rebuffed such advances. Instead we have an excuse to force control of resources and business decisions – retroactively – upon those companies. This includes the companies that tried to refuse former Treasury Secretary Henry Paulson’s “take or take it” offer.

I have no reason to believe that the six New York representatives are acting out of principle. But the push is correct. And the Treasury Department is playing along:

“While we have implemented new restrictions on executive compensation and luxury perks, we will not get involved in individual companies’ marketing decisions,” Treasury spokesman Isaac Baker said Wednesday.

We’ll see.

Australia Imports American Nonsense

Arguing in favor of circumcising male infant to reduce their risk of HIV infection is flawed thinking, even in places like Africa. It’s exceptionally ridiculous when looking at the extent to which pro-circumcision advocates bypass logic. From a recent Reader’s Digest Australia article on male circumcision, included in the section labeled “Verdict”, this quote:

“‘If it ain’t broke, don’t fix it’ is the understandable attitude of many Australians,” says [University of Melbourne] Professor Roger Short. Yet he questions this wisdom. “Australia is blessed with a low prevalence of HIV infection, but parents need to remember their children will encounter high rates in many countries they visit.”

How does he know male individuals will visit other countries? How does he know that those countries will have high rates of HIV infection? How does he know male individuals will have vaginal intercourse with HIV infected women? Where logic demands a different conclusion, Professor Short relies on propaganda. He began with his conclusion and grasped for assumptions to build around that to defend what is objectively indefensible.

**********

That’s unsurprising because the article is structured to reach one conclusion. Among the arguments offered in favor of circumcision, the article includes “Appearance”:

Research by Professor Marvel Williamson from the School of Nursing at Oklahoma City University found women prefer the look of a circumcised penis. “Generally women said it is more sexually appealing,” says Williamson. “Ninety per cent of women said it looks sexier and 85% said it’s nicer to touch.”

This is a non-medical argument used to excuse surgery on a non-consenting, healthy child. It’s also a subjective criterion that will be irrelevant to the 10% and 15% of women, respectively, who disagree with the majority. It will also be irrelevant if the male is gay. This conclusion also demands that we accept an external locus of control for all male sexuality. What the society wants matters more than what the individual wants for himself. Human rights belong to the individual, so we must reject all of this.

But look at what the article explicitly ignored. It’s obvious by the location of the research. A quick scan of the study reveals the omission.

This study clearly support the hypothesis that American women prefer circumcision for sexual reasons. The preference for circumcision does not necessarily come out of ignorance nor from lack of exposure to uncircumcised men.

Yeah, noting that the conclusion concerns American women might help Australian parents, except Australian statistics look nothing like American statistics in 2009. Also, this assumes that the mother’s preferences – or the father’s opinion about his own penis – matters. We’re not assuming that because it doesn’t matter. Professor Williamson incorrectly thinks it does, as shown in the design of her study:

Of 145 new mothers of sons responding to this survey, …

Are we really so stupid that a parent’s opinion on the sexual aesthetics of a child’s genitals is considered a valid reason for surgical alteration? I want to believe we are smarter, but the evidence is very clear that parents can and do use this excuse. That position is indefensible. Remember that all tastes and preferences are subjective, unique to each individual. The choice on whether or not to allow the subjective tastes and preferences of his future sexual partners to influence his decision regarding cultural, medically unnecessary circumcision must be left to him. Ethically, parents may offer proxy consent to circumcision only when medical need exists, and then only when less invasive solutions are insufficient.

An Imaginary Distinction

UNICEF is promoting efforts to end female genital mutilation. This is good. But I’m predictably distracted by the news release.

Female genital mutilation or cutting is the partial or total removal of the external genitalia – undertaken for cultural or other non-medical reasons – often causing severe pain and sometimes resulting in prolonged bleeding, infection, infertility and even death.

Male genital mutilation or cutting is the partial (and sometimes accidental total removal) of the external genitalia – undertaken for cultural or other non-medical reasons – often causing severe pain and sometimes resulting in prolonged bleeding, infection, and even death. I narrowed the reality of total removal and ommitted infertility. Neither of those changes is sufficient to introduce the gender bias that so many demand. Yet, that is exactly what organizations like UNICEF insist upon because (adult, voluntary) male circumcision may reduce the risk of female-to-male HIV transmission during unprotected intercourse. Despite its claims, chasing potential benefits is not a valid medical reason to circumcise non-consenting, healthy individuals – including male children.

John Harvey Kellogg’s Legacy

The “OMG Michael Phelps smoked marijuana” story is still a hot topic, with the general tone thankfully being that this is hardly worth wasting the effort of any brain cells. I concur, but that won’t stop the usual idiots from moralizing. The extends a little further to at least the appearance of moralizing, as evidenced by Kellogg dropping its endorsement deal with Mr. Phelps. I regard this as nothing more than a business decision. It’s weak and cowardly, but nothing in my support for capitalism suggests that individuals can’t be stupid.

Still, this provides a reminder that the company’s co-founder, John Harvey Kellogg, endorsed and promoted a radical, not-uncommon opinion for the late 19th century. From Kellogg’s book, Plain Facts for Old and Young, here is Kellogg’s “cure” for masturbation in children:

In younger children, with whom moral considerations will have no particular weight, other devices may be used. Bandaging the parts has been practiced with success. Tying the hands is also successful in some cases; but this will not always succeed, for they will often contrive to continue the habit in other ways, as by working the limbs, or lying upon the abdomen. Covering the organs with a cage has been practiced with entire success. A remedy which is almost always successful in small boys is circumcision, especially when there is any degree of phimosis. The operation should be performed by a surgeon without administering an anæsthetic, as the brief pain attending the operation will have a salutary effect upon the mind, especially if it be connected with the idea of punishment, as it may well be in some cases. The soreness which continues for several weeks interrupts the practice, and if it had not previously become too firmly fixed, it may be forgotten and not resumed. If any attempt is made to watch the child, he should be so carefully surrounded by vigilance that he cannot possibly transgress without detection. If he is only partially watched, he soon learns to elude observation, and thus the effect is only to make him cunning in his vice.

This is one of the contributing arguments that encouraged the establishment of routine, medically unnecessary male circumcision in America. Anyone who denies this origin is misinformed when seeking a gender-based exception to the objective claim that medically unnecessary genital cutting on a non-consenting individual is unethical, whether the mutilated is female or male.

To demonstrate further, this is from Kellogg’s writing:

In females, the author has found the application of pure carbolic acid to the clitoris an excellent means of allaying the abnormal excitement, and preventing the recurrence of the practice in those whose will power has become so weakened that the patient is unable to exercise entire self-control.

Victorian-era Americans embraced circumcision because they replaced priests with doctors. They did not replace superstition with science. American medical knowledge of the foreskin accepted a religious foundation for any research, just as American medical knowledge today is ignorant of the foreskin because the circumcised penis is viewed as normal rather than common.

While I think boycotting Kellogg in 2009 because John Harvey Kellogg was despicable in 1888 is melodramatic, the history is worth repeating independent of the company. Boycotting Kellogg in 2009 because of it’s business decision regarding Mr. Phelps is a different matter. I support that.

Is God an economist?

Charles Munger has a column in this morning’s Washington Post. I’d use an insulting adjective to preface “column” if I could think of one awful enough to accurately depict his nonsense.

Our situation is dire. Moderate booms and busts are inevitable in free-market capitalism. But a boom-bust cycle as gross as the one that caused our present misery is dangerous, and recurrences should be prevented. The country is understandably depressed — mired in issues involving fiscal stimulus, which is needed, and improvements in bank strength. A key question: Should we opt for even more pain now to gain a better future? For instance, should we create new controls to stamp out much sin and folly and thus dampen future booms? The answer is yes.

Sin. That’s how you know you need to go no further. But we must, just to know where it will lead because central planners never understand that “imposing” is not a synonym for “restoring”.

Sensible reform cannot avoid causing significant pain, which is worth enduring to gain extra safety and more exemplary conduct. And only when there is strong public revulsion, such as exists today, can legislators minimize the influence of powerful special interests enough to bring about needed revisions in law.

Speaking of synonyms, “strong public revulsion” is a synonym for “populism”. Through the first two paragraphs, it’s clear that Munger has no interest in the economics of the current recession. Its narrative offends him so we must all act with the force of the government, consequences be damned.

Many contributors to our over-the-top boom, which led to the gross bust, are known. They include insufficient controls over morality and prudence in banks and investment banks; …

Insufficient controls over morality. Does Munger explain this? Of course not, because strong public revulsion covers it. We’re all outraged, so we must Do Something. His something is to increase taxes because it is our duty to “demand at least some increase in conventional taxes or the imposition of some new consumption taxes” to punish ourselves for our immorality.

The rest of the column is an incoherent, crusading mess.

Insight from an Irrelevant Question

From President Obama’s press conference last night, one reporter asked a pointless question about Alex Rodriguez and steroids. I don’t much care for the story, although if you played a drinking game based on his answers, you got to drink because he broke out the “for the children” defense. (But, remember, he’s not playing political games, unlike the rest of Washington.) Still, there’s something useful in his answer [transcript here]:

Q Yes, thank you, sir. What is your reaction to Alex Rodriguez’s admission that he used steroids as a member of the Texas Rangers?

THE PRESIDENT: I think it’s depressing news on top of what’s been a flurry of depressing items when it comes to Major League Baseball. And if you’re a fan of Major League Baseball, I think it — it tarnishes an entire era to some degree. And it’s unfortunate, because I think there are a lot of ballplayers who played it straight. And the thing I’m probably most concerned about is the message that it sends to our kids.

What I’m pleased about is Major League Baseball seems to finally be taking this seriously, to recognize how big of a problem this is for the sport. And that our kids, hopefully, are watching and saying, you know what, there are no shortcuts; that when you try to take shortcuts, you may end up tarnishing your entire career, and that your integrity is not worth it. That’s the message I hope is communicated. [emphasis added]

The correct lesson is that shortcuts have consequences that each person must weigh for himself. Borrowing and spending $800 billion in an attempt to prop up an economy that has fundamental problems caused by government profligacy is a shortcut. It will have consequences. But with government the lesson is always the same. It’s not okay for an individual to take a shortcut that may have long-term consequences limited to himself because the shortcut offends our morals. But when government forces everyone to take a shortcut, then it’s okay because the shortcut is for the public good. Somehow.

Video here.

Compare and Contrast

President Obama said the following last night:

“I can’t afford to see Congress play the usual political games. What we have to do right now is deliver for the American people,” Obama said just hours after the legislation narrowly cleared a key procedural hurdle in the Senate, where it is likely to gain final passage today.

But he can play (not really) unusual political games last week.

Because each day we wait to begin the work of turning our economy around, more people lose their jobs, their savings and their homes. And if nothing is done, this recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse.

Or last month:

… What the cynics fail to understand is that the ground has shifted beneath them, that the stale political arguments that have consumed us for so long no longer apply.

President Obama is a politician. Politicians play political games. That’s no surprise, so back to last night:

“So, you know, we can differ on some of the particulars, but again, the question I think that the American people are asking is: Do you just want government to do nothing, or do you want it to do something? If you want it to do something, then we can have a conversation,” he said. “But doing nothing — that’s not an option, from my perspective.”

If we’re willing to accept the parameters he dictates, then we can talk. Otherwise, we’re cynics to be ignored. I see “change” in where the efforts are directed, not in how they are directed.

Libertarianism is not keen to watch Rome burn.

I’ve long admired Balloon Juice because of John Cole’s insightful, considered analysis. He supported President Bush but was willing to change his mind when it became clear that Republicans had lost theirs. Then the Republicans became so despicable that he actively switched to endorsing Democrats. That didn’t bother me because I’ve voted that way most of my life. The change in Balloon Juice over the last six months or so, however, is closing in on unbearable. Like this, from yesterday:

At what point did the normally sane people at Hit and Run turn into the libertarian version of the Rush Limbaugh show? If I had to guess, I would have assumed they would think a bill of $400 billion in tax cuts and $400 or so billion in spending would at least be considered half good, but instead the reaction over there the past few weeks has made Malkin look restrained by comparison.

I will not be the first to defend Hit & Run because it tries to be – or is – too hip for me at times. Still, much of what I’ve read there during as the stimulus package loomed is best exemplified in this post by reason editor-in-chief Matt Welch [links in original]:

Why do people oppose the stimulus? Here are a few actual reasons: There is no strong evidence that stimuli work, and plenty of evidence that they don’t (a relevant consideration, no?). Like the deeply flawed PATRIOT Act, the deeply flawed Iraq War resolution, and the deeply flawed bank bailout, it is being rushed through the legislature in an atmosphere of pants-wetting crisis and presidential warnings of impending doom. It is filled with special interest giveaways, big-government featherbedding, and "Buy American" considerations that have about as much to do with stimulating an economy as playing violin has with putting out fires. By taking from fiscally responsible states (like South Carolina) and giving to fiscally irresponsible states (like California), it violates basic notions of fairness and creates still more moral hazard in an already hazardtastic universe. …

Basically.

Rather than explain further, Mr. Cole summarized my sentiments in a comment to his entry:

If you asked anyone who read me in 2004 and liked what they read and then read me today, they would tell you I am howling bugfuck insane now, so take that with a grain of salt.

I wouldn’t go quite that far because Mr. Cole still shows flashes of his earlier skepticism. But even if that was 100% true, his next paragraph gets to current mindset at Balloon Juice that’s difficult to read:

I mean, we all have principles we like to think we adhere to, but reality often seems to get in the way. I would love it if we could lower taxes, cut spending, and frugal our way out of this mess. I just don’t see how that is the answer.

Difficult times do not require that we stop being rational. A belief in limited government held at a time when the government is constantly expanding recklessly does not imply an unwillingness to deal with reality. If a person has a 50 pound cancerous tumor, the libertarian’s response is not to suggest she go about her day as if she doesn’t have cancer. Likewise, the solution to the government being too large is not to set the charges and implode it all at once. Americans have allowed (and encouraged) government to get so tangled up in daily life that a simple stop is not possible without disastrous consequences. Mr. Welch’s statement suggests how massive, unquestioned spending is not the answer.

That’s not to say that libertarians are perfect and have all the correct answers. Even if we have no other flaws, we often fail to suggest the map to limited government. I’m guilty of that, I’m sure, a problem I’m aware of when I blog. We all need to do better at selling the principle and how to get there.

However, the first step is to not make things worse. A $1 trillion deficit (and growing) is a very dangerous ploy. American history provides evidence of what can happen when government does and does not intervene. This is not sufficient to make a decision, but watch the way politicians are exclusively deploying fear to dismiss any need for analysis. It’s “do this or die”. They claim it doesn’t matter what we do, as long as we do something. Buying a pony for every American is something, but only the Pony Owners of America, the United Horse Food Producers, and the American Saddle Makers Association would think that’s a good idea. Unsurprisingly, that type of special interest giveaway is what we’re going to get. It’s not hysterical to call bullshit.