Open Choke

'Merican Higher Ejoocashun.

This is hysterical.  Student protestors at NYU.  "Who wants to be a facilitator?"  Clearly NOT engineers or landmen!  Maybe geologists.

Mexia Clusters...

Like a Cancer Cluster, the odd grouping of some sort of cancer that shows up in some unlikely place, a statistical anomaly as it were, the Central Texas town of Mexia pops up like Orville Redenbacher.

First, we were exposed to the unlikely true love story between Mexia's own li'l (and sometimes large) Vicki Lynn Hogan and "octogenarian billionaire" J. Howard Marshall... yes, Vicki Lynn, known better under her nom de guerre Anna Nicole Smith to you and me.  

 

I have always aspired to be an "octogenarian billionaire",  or, better yet, an "oil oligarch", but the road to either seems poorly defined as yet.   Hell, I would even settle for being a Plutocrat, although I am not sure what that means either, although I do like Mickey's dawg.  

Now, we find that this week's Texas Billionaire du jour, Robert Allen Stanford, or Sir Allen, as he is is appropriately known, is the Texas Jack Baptist version of Bernie Madoff (as in Bernie Made-Off with $50 Billion).  I just assume he is a Jack Baptist, because even though he is a proud Baylor grad, he has kids by various women not his wife, and, more damningly, his love of cricket and all things British seems worse than dancing in a First or even Second Baptist kinda way.  Now, the world waits for Sir Allen to Sir Ender. To authorities.

Of course, in the way of ALL good financial shenanigans, his attorneys are claiming, like Jeff Skilling did before him, that it is just "a cash flow problem".  Oh yeah, I thought, that's it.  A cash flow problem.  Poor guy.  Then it occured to me that it is, in fact, "cash flow problems" that bring down ALL Ponzi Schemes... when the chump well dries up, it creates 'cash flow problems", just like Enron, Madoff, Social Security, Medicare... oh, wait on those last two, those are Ponzi Schemes that have yet to recognize their cash flow problems and are thus "Venerable American Institutions" like... Enron, Madoff, Stanford were before they recognized theirs.

In the end, though, it begs the question... what is it about Mexia?  Something in the water?

What Recession?

I was in Austin Tuesday night and had dinner at the very expensive Eddie V's Seafood restaurant downtown.  It was jam-packed with Legislators and Lobbyists.  To the gills.  Great wine on every table.  

Seems the seats of power are Open For Business as a growth industry!

Atlantis?

http://www.thesun.co.uk/sol/homepage/news/article2255989.ece

Legalizing Drogas

In building upon my earlier thesis that disasters are times where we can pass radical legislation, I think it is time to legalize pot, cocaine and ecstacy-type drugs.  Maybe heroin as well.

My argument?  Mexico's major industry is now a sub rosa deal.  How can a society continue if the black market is bigger than the white?  heh heh... the white line market is bigger than the white?

Could be the answer.  We have a huge appetite.  Best estimates make it a $150 billion per year retail sales industry in the US, of an overall $350 billion dollar worldwide industry.  We are the market leaders for counsumption, with over 44%.  Pot and coke account for 2/3rds of our expenditures, with US users smarter than their European counterparts in appetite for opiates.  We can leave the heroin to the EU, in other words.

With state taxes averaging some 20% or so of the cost of cigarettes and alcohol, this makes for an annual $30 billion per year windfall.  Studies on price elasticity of illegal drug prices support this, although it doesn't matter, because we could just slap a fixed tax per volume like we do for cigarettes and booze.  Best of all, California would get a huge chunk of that!  It could keep it's mitts off of our money...

An added benefit would be the decimating of our $60 billion per year prison system which has seen a huge uptick in incarcerations due to the War on Drugs, from fewer than 500,000 in the mid 1970's to nearly 2.5 million humans today, giving the US the award for most people in incarceration in the world.  Give me liberty or give me death, indeed. 

 

So...  Viola!  A new $100 billion per year of fresh snout material for our politicos to play with.

The drug suppliers have proven that illegal drugs work in a free market system.  Let's see how they do with the rules and regulations and taxes and threat of litigation that  the rest of us have to live with. 

Big New Taxes.  Smells like Teen Spirit.  Dude.

http://en.wikipedia.org/wiki/Drug_policy_of_the_United_States

http://www.sciencedaily.com/releases/2006/01/060112034638.htm

http://www.tni.org/detail_page.phtml?page=acts_impact

http://www.taxfoundation.org/publications/show/245.html

We Now Owe More Than All The Money In The World...

Yay!  The culmination of the New Deal and the Great Society are upon us, now in technicolor!  

Our politicians have now indebted us to the tune of more than the world's GDP!  Wow!  We always do things bigger in America! 

They do it because we, the citizens, demand that they do it. Give is Security.  Give us crap that we didn't work for or earn.  Of course, these sleazy lackies of of ours just borrow to give it to us to keep our whiny asses quiet.

They have now given us more than the output of all of Earth's economies.

The Greatest Generation yields to... Us.  Yurck.

http://www.worldnetdaily.com/index.php?fa=PAGE.view&pageId=88851

Unions

Are we entering a world where Unions once again prevail?  Federal legislation is being proposed that would make it easier for Unions to gain a foothold in American business.  Is this good?

Since I "went out on my own" in 1993, I have employed over 400 human beings and a few doodlebuggers.  The one thing I have noticed during that "time frame of major enlightenment to human behavior" is that it is usually the lazy screw-offs that are the loudest chronic complainers.   I think they know that they are lazy screw-offs and think that complaining to HR and to fellow employees is a way to camouflage themselves.  See, those of us who employ people see the world in a different way... and the folks that hire creative class folk see it differently from those hiring the more unskilled.  Kind of a "you wouldn't understand, its a boss thing".

Of course, I hire from the "creative class".  I have to keep them happy.  They have REAL  fungibility of employment.  My job is to keep 'em happy and productive.  Typically, this is not a demographic that has or needs Unions.  A free lesson, perhaps, towards the importance of education.

When I worked for the Borg, a Major, I had to fill out a questionnaire that asked if I was a Union member.  Facetiously, I replied that I was.  The American Geophysical Union.  When my boss called me in to ask me to change my reply, I asked him what AGU Local we were represented by, because I needed to talk to my rep about this request.  Being one of the rare folks there with a sense of humor, he took it well, considering.  He may have even chuckled a bit.  I feel for the poor souls who managed me back in the day.

Back to the topic at hand, the basic unskilled workforce and the "trades" are the more typically unionized groups.  Oh. And teachers and all government employees. 

 

For the non-governmental employers of these folks, the two main criteria for employment and advancement are Productivity and Quality of Work.  How many more widgets per hour can you make relative to the next guy?  It's really that simple.

That is, with the striking exception of Freeman, the tradeshow goombahs.  They are an American Corporation that makes monopoly deals with City-owned Civic and Convention Centers to provide what is laughably called "Services" to tradeshow exhibitors.  

If you have ever exhibited at a tradeshow in Las Vegas and New York, both huge Union Shop states, you can attest that the slapstick involved in doing so would be worthy of a Monty Python skit if it wasn't costing you SO F****** MUCH.  

 

You can't plug in a light fixture.  You need an "electrician" to do so.  1 second, $250 bucks.  Can't roll out your own carpet, 2 minutes, $500.  Plus, all these amazing  "specialists" can't do anything BUT plug in your frigging light or roll out the frigging carpet.  God forbid that you ask a light plugging Union "electrician" to roll out a friggin' carpet!  Two different people to do something I have been able to do since I was 4 years old, and me not permitted to do it for "safety" reasons, and apparently no 4 year olds available during school days.  

The all-in cost of this insanity is around twice the normal non-union cost of doing things.  If we relate setting up a tradshow booth to building a product, then I would surmise that Unions add at least a doubling on the drag on the economic output... ie it costs me twice as much to put up a booth at the Javitz Center as it does to do so at George R Brown.  

Unions have not traditionally focused on Productivity and Quality criteria as important metrics.  Tenure and insane levels of artificial specialization seems to be the major focus.  The birth of the "not my job" syndrome.   Stay there long enough, and you are set for life regardless of your actual economic output.  From a systemic approach, they are the champions of mediocrity and obsolescense, in a world where mediocrity is no longer good enough.  The ad absurdum end of this set of values are massive industries making crap no one wants to buy, like buggy whips or American Cars.  Fully subsidized in the name of "full employment".  I really don't see the difference between welfare or subsidized employment in sectors that don't make stuff people want to buy.

For American Unions to become viable once again, they need to change their focus from Tenure to Productivity and Quality to survive in this flatter and flatter world. In other words, they must be much better aligned with management and shareholder goals.  The goals of all stakeholders should be focused on creating products that consumers WANT to buy at the lowest cost possible.  How you divy up the proceeds is up to the various stakeholders.  Unions seem to be oblivious to the customer-facing and cost side of the equation.

Second, if businesses need to be regulated SarbOx style for providing consumers stuff they want to buy, then Unions certainly need to be thoroughly regulated as well.  

Another important distinction between American Business and American Unions.  Most businesses are NOT criminal enterprises... they provide the bulk of American jobs, at least for now, and all of our productivity.  We spend a stupendous amount of time and dollars making sure that they are not run to defraud consumers.

A much higher percentage of American Unions ARE criminal enterprises.  The have a well deserved reputation for massive corruption, and have used these ill-gotten gains to effectively buy and compromise a Major American Political Party.   That we avert our eyes to this monstrous fact, watching a Party prostrate itself to Unions while portraying American Business as Evil Incarnate as a way of triangulating hate as a political tool is a primary reason I left the Democratic fold for Independent thought some years ago.  

"Union, heal thyself" is probably not a realistic idea.  It should disturb you that our politicians turn a blind eye to the corruption and filth that attach to Unions with static-like cling, while denigrating and attacking the very engine that grows our prosperity.

Or not.  Maybe everything will be just great with our Union handlers.  You can't judge the future from the past, right?  That wouldn't be fair...

Stimulus or Succubus?

A while back, I wrote about how many politicians tend to Lie and Manipulate, which sadly doesn's surpise anyone, and how you can easily spot this in the titles of  legislation.   Just look for words like Patriot, Children, Babies, Environment, or Puppies.  Ok, they haven't used Puppies.  Yet.  

In any case, saying that an act is a Patriot (etc.) act doesn't really MEAN it is Patriotic (etc.).  Usually, it means just the opposite.

I am gonna add "Stimulus" to that set of catch words.  No economist that I can find thinks our new trillion dollar stimulus package contains much of anything that could be considered... "stimulus".

 

Instead, non-partisan analysts state that the package appears to be a huge grab bag of social welfare programs that have lain dormant for the last twenty years, because they couldn't be passed individually due to the public outcry from the great silent majority when light is shined upon these ugly proposals. 

 

Unfortunately, history, ancient and modern, show that "distasters" foreshadow legislative shenanigans because it keeps the voters focused on one thing, while our leaders sneak it in the back door.  Literally and figuratively.  Magicians and military strategists call this "misdirection". In private enterprise, we call it "fraud".  When legislators do it, it is called "business as usual".

 

Politicians just love disasters because it allows them to do things that they could never otherwise pull off.  The more conspiracy-minded on the right and left think that politicians orchestrate disasters in order to fulfill such a takeover.

 

http://www.mcclatchydc.com/227/story/62082.html

Big Rich Review Part 1

I am a third of the way through the book "The Big Rich- The Rise and Fall of the Greatest Texas Oil Fortunes" by Bryan Burroughs, a Vanity Fair correspondent and author of "Barbarians at the Gates", a great telling of the story of the RJR Nabisco LBO.  Rather than read it all the way and comment, I am going to review it as I read it.

First, I should mention the book is meticulously researched.  It primarily follows the rise and continuation of H.L. Hunt, Clint Murchison, Sid Richardson, and Hugh Roy Cullen, with lots of interspersed characters like Jim West, John Kirby, Glenn McCarthy, and others.  

However, I should mention that, given the opportunity, at least thus far, Burroughs chooses to present the story in a way that is fairly unbecoming to the oilman in question.  For instance, it chooses to frame H.L. Hunt's acquisition of the Daisy Bradford and Joiner leases as a more or less improper deal stemming from "asymmetric knowledge" Hunt had from bribing an offset well's toolpusher from an unsuspecting nice old man Dad Joiner, when the real story is that Dad Joiner was a crook who sold his leases three times over ala "The Producers" and was presented as a victim by his attorneys when he sued Hunt the week before the statute of limitations expired and long after he took Hunt's money.  Or Sid Richardson was a deadbeat grifter who had tapped out all of his friends and banks with one last investor in hand until he learned of Gulf's leasing and drilling plans because he was providing "stud service" to two telephone operators in Mineral Wells who would call him to see if he wanted to listen in on calls from Gulf's exploration manager in the Permian to its headquarters.  Oh well.

Mr. Burroughs likes to use the good/evil duality used as a propaganda tool.  He first paints Texas oilmen as "ultraconservative", because most opposed unions, taxes, big government, the New Deal, and Roosevelt, along with holding racist and antisemitic values.  This last aspect of their character is painted thickly on the oilmen in an effort to cast them as unfavorably as possible in todays cultural light.  Burroughs is, in essence, equating opposition to Unions, Taxes, Big Government, and the New Deal with racism and bigotry.  What he fails to mention is that racism and bigotry were shared by a vast majority of white Americans in the 1930's, "ultraconservative" or "progressive" in outlook.  As an example, he presents Hugo Black, then Senator from Alabama, as a "progressive" good guy who opposed oil interests, failing to mention Mr. Black's heavy involvement in the Ku Klux Klan.  This sloppy and slightly embarrasingly effort on Mr. Burrough's part to unfairly characterize these complex and interesting people this way is a detraction to the thoroughness of his research.

Amazingly, he follows up in this same chapter of how "Ultraconservative" these folks were with the fact that Murchison and Richardson were actually pals with FDR, and presents a scenario where Richardson convinces FDR to override Treasury Secretary Morganthau's idea to abolish the Depletion Allowance, presented incorrectly in the book as a shady give away that allowed operators to write off 1/3rd of their dry holes.  

He also presents Texas as a state that was bought and sold to "oil industry and corporate interests", from Pappy O'Daniel onwards through the 1950's.  This "Corporations Versus Citizen" meme is the central good/bad duality employed by the left today, and is as imperfect in describing reality as any other good/bad duality imposed on complex systems, especially considering how prominently Texas politicians, these same folks who were "bought and sold" by these supposed crazies, played in the Civil Rights movement in the 1950's and 1960's.

The book has confirmed or corrected a variety of legends I have heard over the years, my favorite being that Richardson met Dwight Eisenhower when he gave the young officer a ride in his train car when no other seats were available.  The reality is that he did meet Eisenhower this way, but it was at the beginning of WWII and Eisenhower was already a General.  This relationship would culminate with Richardson gaining sole rights to the New Mexico Federal Unit under amazingly preferential rights that all of us working New Mexico have slobbered over and which the Bass family is amazingly protective of.  I remember when Mike Halbouty told me that he had called Perry Bass and asked if he would farmout the whole unit for an 80% royalty.  Bass replied that he would always kick himself for the 20% he left on the table.

Or, my favorite story thus far, Sid Richardson had hired his nephew, Perry Bass, the son of his sister and deceased husband, a doctor from Wichita Falls, after the young Bass graduated from Yale.  According the the story, Richardson found his nephew to be too soft and a bit of an elitist and hired him to toughen him up.  According to the book, he was not very kind to Perry, pushing him constantly.  An unnamed "Friend of the Family" is quoted as saying:

"It was many years before I knew that "Bass", the name Richardson used with his nephew, had a first name other than 'Goddamnit".

A Quote from Chairman Raymond

The ex CEO of Nieman Marcus tells a story of a conversation he had with then Exxon Chairman and CEO Lee Raymond when Exxon moved from New York to Las Colinas.

"Rob, you know what the difference is between the oil business and the retail business?" asked Raymond.

"Uhhh, no.  What IS the difference between the oil business and the retail business?" answered Rob Smith, then CEO of Nieman Marcus.

"Let me tell you.  The oil business is a very complex business run by simple men, while the retail business is a very simple business run by complex men."

I love this story.  I hope it's true.