Economics education should be mandatory

The Senate gets it wrong investigating recent oil profits, and the press exacerbates the problem. Consider:

The chiefs of five major oil companies defended the industry’s huge profits Wednesday at a Senate hearing where lawmakers said they should explain prices and assure people they’re not being gouged.

There is a “growing suspicion that oil companies are taking unfair advantage,” Sen. Pete Domenici, R-N.M., said as the hearing opened in a packed Senate committee room.

“The oil companies owe the country an explanation,” he said.

Lee Raymond, retiring CEO of ExxonMobil (XOM), said he recognizes that high gasoline prices “have put a strain on Americans’ household budgets” but he defended his companies huge profits, saying petroleum earnings “go up and down” from year to year.

“Huge profits” is also in the article’s title. “Huge” is a relative term; saying profits are huge doesn’t make it so. There are other places to get detailed numerical analysis of the fallacy of “huge” profits, but near the end, the article cites James Mulla, chairman of ConocoPhillips, in pointing out that the company’s $3.8 billion profit is a 7.7% profit margin. How is that “huge”? Just like price, volume factors into the final equation. The article should not say “huge”.

I’m not surprised, though, because even our senators seem oblivious to basic business knowledge. If Sen. Domenici really wants an explanation, he can read the financial statements for every public oil company, just like investors do. Here’s a quick test for the Senators: Is ExxonMobil priced correctly at $57.84 per share? How about ConocoPhillips at $66.90 per share? Like profits, one piece of information is all you need to know the answer, right?

The potholes will lead to the sinkhole

Major League Baseball’s return to D.C. in 2005 made me happy. I saw the Phillies live seven times at RFK Stadium this year and couldn’t have been happier. (I could’ve been if we’d won one of the two we lost when I saw them, because then we could’ve played the Astros for the Wild Card, but such is life for a Phillies phan.) Area residents rallied behind the Nationals, showing an exuberance for the team many suspected would develop more slowly over the next few seasons. Major League Baseball made the correct decision, but it was the inevitable decision. D.C. could not be logically excluded over Las Vegas or Portland, and everyone but the D.C. City Council knew it. They were the group that Major League Baseball held hostage negotiated with, though, which is why the District now faces this mess:

The District government filed court papers yesterday to seize $84 million worth of property from 16 owners in Southeast, giving them 90 days to leave and make way for a baseball stadium.

By invoking eminent domain, city officials said last week, they hope to keep construction of the Washington Nationals’ ballpark on schedule to open in March 2008. The city exercised its “quick take” authority, in which it takes immediate control of the titles to the properties.

Under law, the property owners and their tenants must vacate the land within three months unless a judge declares the seizure unconstitutional.

In papers filed in D.C. Superior Court, city attorneys said: “The Properties subject of this action . . . are taken for an authorized municipal use, namely the construction and operation of a publicly owned baseball stadium complex.”

This is crap, of course, because authorized doesn’t mean legitimate, but when was the last time that stopped a government from invoking eminent domain? I hope the property owners have good negotiators to achieve a reasonable price. And attorneys when this ends up in court because the city won’t pay a reasonable price. That’s just me thinking government should serve the public. I could be wrong.

I’m not, naturally, so I’ll move on to this:

Some activists have argued that the stadium is a private project for Major League Baseball, but District leaders say the $535 million project will create significant tax revenue [sic]. Developers have snatched up land just outside the stadium plot in anticipation of a waterfront revival, and the city is planning to create a “ballpark district” featuring restaurants and retail.

Their goal as a Major League Baseball franchise is to win baseball games, but that’s only one goal. The Nationals are a business. Their most important goal is to make a profit. (The owners of the Phillies ran the team for years to not lose money. Big difference. But I digress.)

One way they do earn a profit is by enticing fans to pay money to come to the ballpark. As a business the team controls its expenses for wages, overhead, maintenance, and whatever other expenses a baseball team encounters. How is acquiring use of a ballpark not inherent in their business? What makes the local government better at managing the ballpark than the team that plays there (or a separate private entity)?

It’s inappropriate for the city government to build a stadium solely to generate tax receipts. That isn’t the government’s purpose. It’s not why citizens entrust the government to issue debt, which is what D.C. will do to finance the stadium. Government’s purpose in this case is to provide functioning infrastructure, law enforcement, and tax policies. The team should take care of the rest. Until the city gets the revenue from the stadium, it shouldn’t pay the costs.

This should be obvious to the city, but its eyes are too glued to the golden calf of tax receipts. But how golden is it? Tax receipts generated by the Nationals arrival in D.C. fell short of expectations this year.

The District government appears likely to fall short of its goal of earning $10.5 million in tax revenue [sic] from sales at Robert F. Kennedy Memorial Stadium for Washington Nationals games, even as the team is on pace to earn larger profits than estimated just four months ago.

The city’s potential tax shortfall from revenue generated by sales of tickets, parking, concessions and merchandise could be more than $500,000, according to financial officials, who expect to have final numbers at the end of the month.

Meanwhile, the Nationals, still owned by Major League Baseball, exceeded expectations by selling 2.7 million tickets in their inaugural season and will earn a $25 million profit, about $5 million more than the team projected at midseason, team officials said.

Why should anyone who pays taxes to the D.C. government believe the District’s projected tax receipts for the new ballpark district?

When Constitutional Rights Become Whimsical Privileges

There is a time for law-and-order government, but it should be within the law. It’s shameful that the case of Jose Padilla has gotten this far:

“Dirty bomb” suspect Jose Padilla has asked the Supreme Court to limit the government’s power to hold him and other U.S. terror suspects indefinitely and without charges.

The case of Padilla, who has been in custody more than three years, presents a major test of the Bush administration’s wartime authority. The former gang member is accused of plotting to detonate a radioactive device.

Justices refused on a 5-4 vote last year to resolve Padilla’s rights, ruling that he contested his detention in the wrong court. Donna Newman of New York, one of Padilla’s attorneys, said the new case, which was being processed at the court Thursday, asks when and for how long the government can jail people in military prisons.

“Their position is not only can we do it, we can do it forever. In my opinion, that’s very problematic and something we should all be very concerned about,” she said.

Maybe he’s guilty, maybe not, but that doesn’t change the fact that he’s an American citizen being jailed without charges. Three years is not a reasonable length of time to hold someone. If the government can’t figure out what he might have done, all involved are incompetent. If they’ve formed an opinion, but don’t feel obligated to share that with anyone, Padilla included, because they believe national security is more important than the Constitution, they don’t believe in the Constitution. They might as well declare the Constitution null and void. The Supreme Court is trying to do that, but it hasn’t gotten there yet. Until it does, the courts need to force the Justice Dept. to charge or release Padilla.

There’s hope that principles will prevail, as evidenced by this piece of logic:

“I think the court is going to have to take it,” said Scott Silliman, a former Air Force attorney and Duke University law professor. “This is a vital case on the principle of an American citizen captured in the United States, and what constitutional rights does he have.”

Of course, I believed that we’d already decided that issue through more than two hundred years of legal proceedings. That’s also why the next Supreme Court nominee is so vital. Better to have someone who understands that the Constitution exists than to have someone who will offer complete deference to the whims of the president. (This is where lackeys for President Bush like to add “in war time”. Until someone can offer a tangible definition of how we’ll know when the war is over and the presidency can revert to peace time rules, I’m leaving it out.)

Propaganda will broadcast in digital

Following up on yesterday’s post, here is further proof that Senator Ted Stevens is a hack. When his shameful subsidy bill passed the Senate Commerce Committee (19-3!), the bad senator offered this stupid comment:

“We take the position that, if we’re mandating this conversion, we cannot leave people behind,” said Sen. Ted Stevens, R-Alaska, the committee chairman.

Maybe you shouldn’t be mandating this conversion. And being without a television isn’t like being without food, shelter, or an education. The kids will survive.

The House passed a separate bill, but before we think they’re any better for authorizing only $1 billion, consider what representatives consider wise:

Like the Senate bill, the House measure would subsidize $40 per converter box. It would cover up to two boxes per household.

Some House Republicans had said they wanted to subsidize boxes for low-income consumers only. Democrats, though, said it would be a nightmare to carry out such an income test.

To limit costs, the House bill would force consumers to request subsidy coupons from the government. But Democrats have complained that few people would seek a subsidy if it’s a hassle.

Seriously, these are the brightest people we can elect? Two televisions? I guess it’s too much of an impact on the American lifestyle to watch one television.

What Would Jefferson Do?

I’m a little behind on commenting about this but of course they are:

Leading House Republicans signaled Friday that they will try to weaken a Senate effort to limit interrogation techniques that U.S. service members can use on terrorism suspects.

Their remarks made clear that the language in the Senate-passed military spending bill faces uncertain prospects in bargaining between the Senate and House. The Senate approved the $445 billion bill 97-0 on Friday.

The detainee provision, which has drawn a veto threat from the Bush administration, was sponsored by Sen. John McCain, R-Ariz., himself a prisoner of war in Vietnam. It was omitted from the bill passed by the House and could spark embarrassing internal battling among Republicans.

This makes no sense. Only the most hardened anti-American would aim to harm U.S. soldiers or smile at the danger they face every day, but it’s entirely appropriate to reinforce long-established limits on their conduct with prisoners of war. The fight over prisoner abuse is not about elevating those we hold prisoner to saints. Honestly, fuck them. I don’t care what they think about much of anything. Beyond the basic need to prove that they’re guilty of their alleged crimes, having them rot in a cell doesn’t concern me. But this isn’t about them. It’s about our moral standard. They may be garbage, but we’re not. So forgive me if I don’t appreciate the fine intellect in statements such as this:

“We’re not going to be delivering a bill to the president’s desk that is veto bait,” said Rep. Jerry Lewis, R-Calif., and chairman of the House Appropriations Committee.

Rep. Lewis seems to forget that the House, as a chamber of Congress, is entitled to check the unfettered will and actions of the Executive. It is not responsible for passing along only those bills the president enjoys. Why bother to have a free government if you wish to bow to the whims of a dictator, however benevolent he may appear? If you have any principles, you’ll understand that allowing, and worse, condoning, torture is immoral. This president doesn’t get that. You must.

Maybe this is just me coming out as a raging liberal who hates the president. It certainly would be easy to dismiss me that way, wouldn’t it? But let me offer a quick reminder. Today is the fifth anniversary of the USS Cole bombing. The news is filled with stories like this today, whether it’s in New York, Iraq, Bali, Madrid, or London. We’re fighting to stop events like that, but the mentality that causes individuals to attack a ship, and others to cheer it from the coast, will persist as long as this world exists. That does not give us permission to act like every grade-school kid who thinks he can be the bully just because he’s bigger than the other kids.

We may be expanding freedom, but the danger isn’t going away. Reading the news from Iraq, I see near-daily reports of more American deaths. Sometimes it hits the Army, sometimes the Marines. On other rare occasions, it hits the Air Force. Those deaths affect me the same way they affect most Americans. I don’t like it, but I hope their deaths won’t be in vain. I also hope that more won’t have to die because we don’t heed the lessons. And what we’re seeing is that we’re not. When the President of the United States expects permission to treat any prisoner of war as he deems necessary, by the circumstances in the field, we’ve lost touch with reality. Torturing prisoners leads to more terrorism, not less. As I’ve heard it said, the innocent men we’ve tortured around the world (yes, it has happened) aren’t terrorists when entering our detainee centers, but they are terrorists when they leave. That’s stupid. We might as well bomb ourselves.

But I have a more selfish reason for wanting America to do this correctly than sheer patriotism. My younger brother, just shy of 22-years-old, is in the Navy. He’s currently in training in the United States, but I’m waiting for the inevitable day when he’s shipped off to some dangerous corner of the world. Maybe it’ll be the Persian Gulf, maybe it’ll be off the coast of North Korea. Regardless, it will not be a vacation. The Navy hasn’t suffered any more attacks like the one on the USS Cole in the last five years. I want that streak to continue forever. With this stupid policy of condoned torture, we seem determined to encourage another attack. There are enough crazy people around the world seeking to attack us for some assumed insult to their religion. I don’t want us providing that final “justification” to someone previously unwilling to attack us just because we think terrorists are scum. They are scum, but I don’t want my brother coming home in a body bag because we think it’s fine to torture a prisoner into a body bag.

Let the president veto that provision. History will judge him for it, should he brazenly pursue that to the end. The House, though, must follow the Senate’s lead and act like a branch of government independent from the White House, beholden to nothing more than the Constitution and the principles we supposedly embody.

The United State of America

Federalism may not be dead yet, but we can schedule the wake.

President Bush yesterday sought to federalize hurricane-relief efforts, removing governors from the decision-making process.

“It wouldn’t be necessary to get a request from the governor or take other action,” White House press secretary Scott McClellan said yesterday.

“This would be,” he added, “more of an automatic trigger.”

Mr. McClellan was referring to a new, direct line of authority that would allow the president to place the Pentagon in charge of responding to natural disasters, terrorist attacks and outbreaks of disease.

Alright, let’s do it. Let’s pass whatever legislation is necessary and amend the Posse Comitatus Act and toast marshmallows on our warm, happy feelings. But let me ask a question in the four nanoseconds before we ram this through. Why bother having a state chief executive (or even having states) if we’re going to federalize such an obvious role for a governor?

We all know this is stupidity coming from an administration yet to meet a federal expansion it doesn’t like. But the administration can’t possibly think the federal government will run this better than states. Louisiana is by all indications a very poor example for state competence, but whose fault is that? Louisiana citizens are responsible for voting in their leaders and maintaining watch over them. Naturally, this administration seems content to eliminate checks and balances on the government, so their obtuseness in this not-so-subtle point can be forgiven. When the residents of New Orleans allowed corruption to persist within the police department and local government, they made a choice with foreseeable consequences. I’m not indicting them or refusing sympathy for their plight in this, but when a person hits themselves in the head, repeatedly, with the clawed end of a hammer, we don’t become shocked when they start to bleed. We also don’t propose banning hammers.

Of course, President Bush can claim all sorts of failures within Louisiana governments, both state and local. But the mistakes flowed all around. Perhaps, if he’s sincere, the president will wait for an assessment of what went wrong (and what went right) before offering solutions to those faults. But all I’ve done is quote the White House press secretary. Maybe the president should speak for himself:

“It may require change of law,” Mr. Bush said yesterday. “It’s very important for us as we look at the lessons of Katrina to think about other scenarios that might require a well-planned, significant federal response — right off the bat — to provide stability.”

Who will make that determination? What level of “we didn’t see this disaster coming” is necessary? Is it all disasters, with or without warning? Again, if it’s not a state’s governor making that determination, why bother having states? Throw out our republican form of government and adopt a straight democracy. President Bush seems content on pushing for that with whatever the topic du jour happens to be, so perhaps he should just kill the slow descent and cut the cord. Yes, the landing will be hard, but at least we can begin with truth rather than this charade of federalism and Republican values.