The Sumner Also Rises (to the task)

We again interrupt our blogging hiatus, to acknowledge some fine work by Bentley University economist Scott Sumner (who is also the Ralph G. Hawtrey Chair of Monetary Policy at the Mercatus Center of George Mason University). This EconLog blog post by Scott is the only recognition of which we are aware (other than our own), of the potentially momentous change in banking regulation under consideration by the Fed. And we thank Scott for graciously crediting us for alerting him to it.

In the longer scholarly article from 2011, Herring and Calomiris report [to be read here] this stunning piece of information:

In response to the mandate within the Gramm-Leach-Bliley Act of 1999 that required the Federal Reserve and the Treasury to study the efficacy of a sub debt requirement, a Federal Reserve Board study reviewing and extending the empirical literature broadly concluded that sub debt could play a useful role as a signal of risk. Despite that conclusion, no action was taken to require a sub debt component in capital requirements; instead the Fed concluded that more research was needed.

So the law that provided the flexibility Bernanke needed to deal with the 2008 banking crisis, also suggested a policy reform that might have prevented the crisis entirely. Maybe Phil Gramm deserves a Nobel Prize in economics.

Apparently that "more research" that was needed has now been concluded, as the Fed is finally adopting the idea:

For immediate release

The Federal Reserve Board on Friday proposed a new rule that would strengthen the ability of the largest domestic and foreign banks operating in the United States to be resolved without extraordinary government support or taxpayer assistance.

The proposed rule would apply to domestic firms identified by the Board as global systemically important banks (GSIBs) and to the U.S. operations of foreign GSIBs. These institutions would be required to meet a new long-term debt requirement and a new "total loss-absorbing capacity," or TLAC, requirement. The requirements will bolster financial stability by improving the ability of banks covered by the rule to withstand financial stress and failure without imposing losses on taxpayers.

To reduce the systemic impact of the failure of a GSIB, an orderly resolution process should allow a GSIB to fail, and its investors to suffer losses, while the critical operations of the firm continue to function. Requiring GSIBs to hold sufficient amounts of long-term debt, which can be converted to equity during resolution, would facilitate this by providing a source of private capital to support the firms' critical operations during resolution.

Yes, this is a bit like closing the barn door after the horses have left, but it's still gratifying to see that after all the time wasted on 1000 page monstrosities like Dodd-Frank, we are finally getting somewhere.

With which, we are well pleased.Especially that line about Phil Gramm that we bolded in the above.

Team CoCo wins one

We interrupt our blogging hiatus for this news;

The Federal Reserve Board on Friday proposed a new rule that would strengthen the ability of the largest domestic and foreign banks operating in the United States to be resolved without extraordinary government support or taxpayer assistance.

The proposed rule would apply to domestic firms identified by the Board as global systemically important banks (GSIBs) and to the U.S. operations of foreign GSIBs. These institutions would be required to meet a new long-term debt requirement and a new "total loss-absorbing capacity," or TLAC, requirement. The requirements will bolster financial stability by improving the ability of banks covered by the rule to withstand financial stress and failure without imposing losses on taxpayers.

To reduce the systemic impact of the failure of a GSIB, an orderly resolution process should allow a GSIB to fail, and its investors to suffer losses, while the critical operations of the firm continue to function. Requiring GSIBs to hold sufficient amounts of long-term debt, which can be converted to equity during resolution, would facilitate this by providing a source of private capital to support the firms' critical operations during resolution.

Our bold in the above. Long time readers of this blog will immediately recognize our enthusiasm for the idea of using contingent convertible debentures to provide managers of banks with a powerful market incentive to not take too much risk in the first place. We could point to numerous posts, such as this one from almost a year ago;

HSIB has noted the enthusiasm for this form of bank self-regulation on the part of Columbia economist Charles Calomiris;

...the Columbia economist offers a suggestion to improve the banking system;

 I would establish a minimum uninsured debt requirement for large banks in the form of subordinated debt, known as contingent capital certificates, or "CoCos." The CoCos would automatically convert to equity based on predetermined market triggers, which would be very dilutive to pre-existing shareholders. One banker who understood my proposal for CoCo's said, "You are putting an electric fence behind me."

The potential for dilution of stockholder equity being the key incentive for management to work to prevent that from happening.

Calomiris has said, in speeches, that the Federal Reserve has had the legal authority to do this since the 1999 Gramm, Leach, Bliley Act, but chose not to implement that reform. Now would be a good time to listen to Charlie.

That's right, the 1999 legislative handiwork--which, btw, did not 'repeal Glass-Steagall'--of former Texas A&M economist Phil Gramm is finally being implemented 16 years after it was authorized. Unfortunately, seven years too late to have prevented the financial crisis of 2008.

Pardon the interruption

Blogging at this site will be suspended, at least temporarily, for non-econospheric reasons. Lo siento.

Ridin' the rails to Malmo

First, Mark Steyn risks his life speaking in Copenhagen;

where he details his own, very real, ordeals with the anti-free speech policemen of Canada. Speaking truth to power, if he weren't a conservative.

Then he takes a trip on a train, and thinks some more about Abdul;

...unlike the bad old days of Nazi-occupied Denmark and neutral Sweden that "some" are comparing it to, there are no border controls whatsoever between Copenhagen and Malmö. You just hop on a train at the aforementioned Central Station in Copenhagen and hop off a half-hour or so later on the other end of the impressive Øresund Bridge at the Central Station in Malmö. I did it myself the other day, and was looking forward to sitting back and enjoying the peace and quiet of Scandinavian First Class. But, just as I took my seat and settled in, a gaggle of Abdul's fellow "refugees" swarmed in, young bearded men and a smaller number of covered women, the lads shooing away those first-class ticket-holders not as nimble in securing their seats as I. The conductor gave a shrug, the great universal shorthand for there's-nothing-I-can-do.

What Abdul made of being shanghaied by some high-class Nordic totty to serve as her cabin mate on a stomach-churching voyage of moral exhibitionism, I cannot say. But, from personal observation, the "refugees" around me seemed to take it for granted that asylum in Europe should come with complimentary first-class travel (see picture at top right, from a German train).

There were more shrugs at Malmö, when I asked a station official about it. He told me that, on the train from Stockholm the other day, a group of "refugees" had looted the café car. The staff were too frightened to resist. "Everyone wants a quiet life," he offered by way of explanation.

That's looking unlikely.

Separat aber gleich?

Deutschland nicht über alles;

Separating refugees according to religion is now being mentioned as an interim solution to help alleviate the problems.
.... Tempers flare easily at close quarters. In Leipzig last week, about 200 refugees wielding table legs and bed frames started a fight after they couldn't agree who got to use one of the few toilets first. It took a large police contingent to calm the situation.

Elsewhere;

Other recent incidents include a riot at a refugee shelter in central Germany over a torn Koran and Muslim Chechens beating up Syrian Christians in a Berlin shelter.

Islam is a part of Germany, but Islamism clearly isn't, said opposition Greens party leader Cem Özdemir, adding that tolerance must not be misinterpreted and exploited as weakness.

Maybe it must not, but it is.

But insults, threats, discrimination and blackmail against Christian asylum-seekers in particular are a regular occurrence, according to the Munich-based Central Council for Oriental Christians (ZOCD).

"I've heard so many reports from Christian refugees who were attacked by conservative Muslims," said Simon Jacob, of the Central Council for Oriental Christians (ZOCD).

But that's only the tip of the iceberg, the ZOCD board member told DW: "The number of unreported cases is much higher."

 Our bold. Herr Jacob also summed it up thus;

"People bring with them the conflicts that exist in their native countries, Christians and Muslims, Kurds and extremists, Shiites and Sunnis - they don't leave them behind at the border."

And there will be more refugees to come.

Wanna be a coal-miner's hostage?

That would be the result of a Jeremy Corbyn Labour government for the UK, and the comrades at Morning Star The People's Daily think, a consummation devoutly to be wished;

AT THE Labour Party conference in Blackpool exactly 40 years ago this week, then prime minister Harold Wilson made one of the most prophetic speeches any politician has ever made. He warned of the extremist direction that the Conservative Party under its new leader Margaret Thatcher was heading in, and how, if her party was elected, Conservative policies would adversly affect Britain.

.... To some, Wilson’s warnings in 1975 might have sounded far-fetched. But Thatcherism, as he so correctly pointed out, did mark a real and radical break with the egalitarian politics of the post-war era. Too many on the left did not appreciate just how much of a threat Thatcher posed, until it was too late.

Having actually lived in England while Harold Wilson was Prime Minister (1974), we can only laugh, or cry, over any dire warnings he made. London was like a third world city back then, with its electricity supply determined by the real rulers of the UK; the coal miners and their union. Wilson had to resign the PM-ship in 1976 due to the hardships in the country. Leaving the mess to James Callaghan. Which the comrades at Morning Star seem to be forgetting;

Forty years on from Wilson’s speech, there are at last signs that this incredibly regressive chapter in our history may be coming to an end. In Jeremy Corbyn, Labour now has a leader who wants to break with the neoliberal policies first introduced by the Conservatives in 1979 (and continued by Labour when in office from 1997-2010), and which have done so much harm to our economic and social fabric.

The election that brought Thatcher to power followed The Winter of Discontent in which the UK's unions flexed their political muscles to extort above market wages. As Wikipedia puts it;

The Winter of Discontent refers to the winter of 1978–79 in the United Kingdom, during which there were widespread strikes by public sector trade unions demanding larger pay rises, following the ongoing pay caps of the Labour Party government led by James Callaghan against Trades Union Congress opposition to control inflation, during the coldest winter for 16 years.

And, the social fabric of that day? Let's let a Labour Party insider, Bernard Donoughue, from back in the day, tell it;

The 1970s were, after all, a generation ago and it was a very different age, dismal in many ways.
The economic climate facing Jim Callaghan was far worse than anything that confronts [Gordon] Brown or the Chancellor, Alistair Darling (when the latter finds time to read the economic history of the 1970s and early 1980s he will want to revise his curious claim that today's [2008's] is the worst economic situation for 60 years). Inflation peaked around 30 per cent just before Callaghan took over, and was usually in double figures. Most other economic indicators were worse than today's, with growth and productivity very poor over a long period and strikes continually disrupting industry. Not for nothing was Britain then known as "the sick man of Europe".
[our bolds]

Politically, the challenges facing Callaghan were daunting. Labour was in a Commons minority throughout his premiership (he skilfully cobbled together small majorities through pacts with the Liberals and the Ulstermen). Labour itself was riven by deep ideological differences of a kind and on a scale unknown today, with the strong left wing consistently on the edge of rebellion and limiting the policy options available to the government. The unions and activists facing Brown at this [2008] month's conferences are mere pussies compared to the wild men fighting Callaghan.

The wild men would quickly return if Corbyn ever got into power.

The wages of Obama

Is there a Kaiser in your future? The family foundation says, there are two Americas;

... 81 percent of covered workers are in plans with a general annual deductible, which average $1,318 for single coverage this year. Covered workers in smaller firms (three to 199 workers) face an average deductible of $1,836 this year. That’s 66 percent more than the $1,105 average deductible facing covered workers at large firms (at least 200 workers).

We note the date;

Since 2010, both the share of workers with deductibles and the size of those deductibles have increased sharply. These two trends together result in a 67 percent increase in deductibles since 2010, much faster than the rise in single premiums (24%) and about seven times the rise in workers’ wages (10%) and general inflation (9%).
“With deductibles rising so much faster than premiums and wages, it’s no surprise that consumers have not felt the slowdown in health spending,” Foundation President and CEO Drew Altman said.

 It was in 2010 that a Democrat congress passed Obamacare. So that we could, in Nancy Pelosi's words, find out what was in it. Wonder how many Americans expected this?

Unfortunately, Kaiser makes an elementary error in this statement of supposed fact;

The average annual premium for single coverage is $6,251, of which workers on average pay $1,071.  The average family premium is $17,545, with workers on average contributing $4,955.

Workers pay the entire amount. What Kaiser is promoting is false incidence; the employer pays for its share by reducing the amount the workers get in their paychecks as wages and salaries. Substituted for with a health insurance benefit--which, at least, is not taxed by the government as income.

Go fish

The Mercatus Center scholars Foldvary and Hammer aren't limiting themselves to blowing up rationales for public utility monopoly. Nope. They also play TAG;

The Tag-A-Giant (TAG) project has been advancing the knowledge of bluefin and yellowfin tuna, tracking their movements, habits, and spawning and feeding regions.... Using improved tracking tags that gather data over months and years before releasing and relaying information by satellite, TAG has been able to track migration patterns of bluefin throughout the Atlantic and Pacific oceans. ...

The success of the TAG project, along with the possibilities offered by tuna farming and other fishery advances, suggests a way forward—transponder branding and fishery ownership. Transponder branding involves implanting a small transponder under the skin of the fish, in the same way that household pets are microchipped so they can be identified if lost. The transponder contains information on the owner of the fish as well as basic data on age and release location; more elaborate transponders can record movements over time and other data. For large, expensive fish such as bluefin tuna, these brands can allow fisheries to raise tuna to an age suitable for release into the wild and protect them for subsequent harvesting a few years later when they have grown. By using this technology, the aquaculturists can track their own tuna's movements for harvesting at optimal times, or they can allow third-party fishermen to capture the fish for a bounty. Although many different market structures are possible, one can imagine tuna fishermen being paid at market only for fish with transponders, with the wholesaler paying the farmer directly for the fish brought in, and the farmer paying a bounty on the return of the transponder. 

Such a system would induce greater incentives to catch only tuna that have been farmed or are otherwise clearly owned,as well as limit the incentives to underreport catches [to international regulators of fisheries].

No more destructive overfishing. Who could be against that...other than people who earn their living as regulators, that is?

The public's utility be damned

San Diego Gas and Electric started a fire...so the public should pay the bills;

San Diego Gas and Electric is seeking authority to bill its customers $379 million for legal settlement costs left over from 2007 wildfires that destroyed 1,300 homes and killed two people.

In filings with state regulators Friday, SDG&E said customers would pay 90 percent of the costs while stockholders in the investor-owned utility would pay the remaining 10 percent, roughly $42 million.

Of course, where would the utility get the money to pay for anything, but from its customers. After their shareholders were cleaned out, that is. Which brings to this working paper--to which we were alerted by retired NC State economist Craig Newmark--by two Mercatus Center scholars Fred Foldvary and  Eric Hammer

How Advances in Technology Keep Reducing Interventionist Policy Rationales

Which, in part, deals with the justification for having public utilities, such as electricity providers. They exist only as a government policy, not as a natural outgrowth of marketplace conditions. At least as the marketplace exists today.

On site electricity generation is now feasible. I.e. cost competitive with large centralized facilities. The decentralized, local generators also save significant transmission costs. The political barriers to making the switch are political, not economic. The entrenched operators have their ways to prevent competitiors gaining market share (or, in many cases, any share at all);

Small-scale on-site plants require local and state permits, which are costly and can take months or years to procure, or may be denied. Federal agencies such as the Occupational Safety and Health Administration and the Environmental Protection Agency can also block energy enterprise. Taxes on small-scale generation are alos imposed. As Lowi and Crews report (2003...), in California, if a user seeks to exit the grid, "it must pay tribute of up to $6.40 per kW of its own generating capacity per month." 

Hey, San Diego is in California! Maybe, if there were no political barriers to entry in the generating business, SDG&E might have gone bankrupt (with its shareholders bearing the losses from the fire they started) and the public's utility would be provided by some other (perhaps more socially responsible) electricity providers.

Only Russians can plant a tree

Certainly not some Hollywood actor...they have their pride!

The Far Eastern representatives of the Sakhalin Environment Watch, which the Russian Justice Ministry has labeled as a foreign agent in accordance with legislation that declares any NGO that receives financing from abroad as such, have announced that the organization will voluntarily return any western funding it received.

First of all the organization will have to return the $159,000 to the foundation of Hollywood actor Leonardo Di Caprio, which it received in July for a project to preserve the Vostochny Wildlife Sanctuary and the surrounding wild salmon rivers.

Sakhalin Watch was founded in post-Soviet Russia. Recently it has published articles calling for more trees to be planted in South Sakhalin. Which the Russian Justice Ministry calls political activity. They probably have a point.

Wanna be like Yanks

Russia thinks the USA could teach them a thing or two about socialism;

The Russian government may spend 240 billion rubles ($3.6 billion) on a national food stamp program to support an estimated 15-16 million Russian citizens whose poverty has deepened amid an economic slump, the RIA Novosti news agency reported Thursday.

To deal with an economic shock that has spurred inflation into double digits and pushed 3.1 million Russians below the poverty line in the first quarter of this year alone, the Industry and Trade Ministry this month submitted a proposal modeled on the U.S. food stamp program to help low-income and out-of-work people.

This is progress, as Russia used to specialize in man made famines, that the USA and Europe had to alleviate.

How many Poles had to take one for Team USSR?

Cuts best eaten cold Polish-style, (for Russia's foot-in-mouth diplomat Sergey Andreev);

Poland’s highest state officials have reburied the remains of 35 national heroes, men who fought the Germans during World War II only to be killed after the war by a new communist leadership that felt threatened by their patriotism.

The remains of the victims were recently recovered from unmarked mass graves with bullet holes in the back of their skulls.

With the bullets provided by the predecessors of Vladimir Putin.

Operation Push SEIU aside

Make way for Ken Hamidi, says Ken Hamidi--and Jon Ortiz of the Sac Bee, at least, takes him SEIUously--cause he's won some big fights before;

...the Iranian-born Franchise Tax Board employee has won some admirers for his never-say-die spirit and for winning a landmark California Supreme Court case a dozen years ago. He’s also drawn the ire and the ridicule of SEIU officials, who dismiss him as a self-aggrandizing blowhard and a buffoon.

Now he has renewed efforts to replace the union’s exclusive representation of half of California state government’s organized workforce with an association that he would head.

The law requires that 30% of the covered work force sign petitions before a decertification election will be held. In this case, that would be about 28,500 signatures from approximately 95,000 state employees. Hamidi is confident he can get to that number, if the state government doesn't interfere with his efforts. And it sounds as if they won't, as Governor Jerry Brown's;

...administration did send out a statewide memo to managers acknowledging it “received notice from an employee organization of its effort to decertify an exclusively recognized state employee organization.” It also reminded agencies that they must “uphold the state’s position of strict neutrality during a decertification effort” and that the state “could be exposed to allegations of unfair labor practice” should any manager take any action that shows bias.

IOW, please don't do anything to hinder Hamidi that would give him a chance to sue. Considering that some powerful people aren't thrilled with the prospect;

“Ken Hamidi is a state worker who relies on televised theatrics, falsehoods and exaggerated claims to attack Local 1000,” Local 1000 President Yvonne Walker said in an email to The Sacramento Bee. “Like his candidacy for governor in 2003 and for Local 1000 president in 2008, his 8-year-long campaign to weaken the union hasn’t attracted any meaningful following.”

Read more here: http://www.sacbee.com/news/politics-government/the-state-worker/article36630864.html#storylink=cpy

that

 that was the least Brown could do. Now it's a race for Hamidi to find and submit the requisite number of signatures before November 2. That's the deadline according to state law, since the SEIU's current contract runs out July 1, 2016.

Read more here: http://www.sacbee.com/news/politics-government/the-state-worker/article36630864.html#storylink=cpy

Heard the one about the Polack who started WWII?

Next time you're at a Soviet Embassy party in Poland, ask the Ambassador to tell you about it;

Russian Ambassador Sergey Andreev on Friday described the Soviet’s 1939 invasion of Poland as an act of self-defense, not aggression. The comment prompted Poland’s Foreign Ministry to declare Saturday that the ambassador “undermines historical truth” and seems to be trying to justify Stalinist crimes.

World War II began after Nazi Germany and the Soviet Union sealed a pact in 1939 that included a secret provision to carve up Poland and other parts of Eastern Europe. Germany soon invaded Poland from the West, followed by a Soviet invasion from the east 16 days later. Millions of Poles were killed in the war.

It made sense to Lillian Hellman, Dalton Trumbo and John Howard Lawson. 

The good ol' days...Brrrrrrrr

Human trafficking, Putin-style;

Russia and Estonia exchanged two men accused of espionage at a remote border post on Saturday in an episode reminiscent of a Cold War spy thriller that follows heightened tensions between the neighbours.

....Estonian officials confirmed the swap, which took place at a bridge over the Piusa river in a forested border region a few miles south of Lake Peipus.
"Both sides found a suitable solution," the director of Estonia's Internal Security Service, Arnold Sinisalu, told a televised news conference.

We'll wait for the movie.

Kicking the 'can' down the open road

Words that we aren't at all surprised to hear;

Socialist mayor Anne Hidalgo, who late this year will host the United Nations World Climate Conference, told the daily Le Parisien that the goal was to show that "Paris can operate without cars".

It could operate without croissants, wine and cheese too. The question should be, What are the costs and benefits of doing without? And, maybe give some second thoughts to the type of fuel those cars burn;

France has the highest percentage of diesel cars on the road in Europe. They have been popular as successive governments have subsidised the fuel, making it cheaper than gasoline.

But it's clean diesel. The Germans told us so, and have they ever lied to us?

East is east, south is south and...

Don't let the Pope know about the massive inequality in the Muslim world;

MECCA - They may be equal before God inside Mecca's Grand Mosque, but the rich and poor pilgrims at the annual hajj clearly reveal their differences just beyond the gates.

Outside the southern end of the sprawling compound lies a temple to consumerism.

Or a mosque.

Several high-end hotels, malls and restaurants are found inside the six towers of the gargantuan Abraj al-Bait complex. It includes the Mecca Royal Clock Tower, the world's third-highest building which rises behind the mosque.

In contrast, beyond the eastern entrance of Islam's holiest site, water drips from air conditioners, garbage is piled beside the roads, and a stench fills the air.

Air conditioning, hmmm.

She got the poms poms, but

Not the indentured servitude, as she was free to stop cheering for her team any ol' time she wanted;

A former Milwaukee Bucks cheerleader has filed a federal lawsuit accusing the National Basketball Association team of failing to pay her at least a minimum wage or overtime for her work, court documents showed.

Lauren Herington, 22, worked 30 to 40 hours in an average week in her one season for the team, making about $3.50 to $4.50 an hour, and was not compensated for overtime when she worked more than 40 hours in a week, attorney Scott Andresen said.

So, we'll have to give her an F for;

"They are indentured servants with pom poms," Andresen said by phone, adding that more Bucks cheerleaders could possibly join the lawsuit.

Not too surprisingly;

A Milwaukee Bucks team representative could not be reached immediately to comment.

There's never an economist around to cheer for, when you want one.

Whoo, whoo, whoo, whoooooo

Give Labour a break clause and they'll have a list of passenger [rail] that's pretty big;

A LABOUR government under Jeremy Corbyn could take rail franchises back into public ownership before they expire, the Morning Star can reveal today.

They said, rubbing their hands together in glee. That's because of something in the contracts private rail operators have with government, called break clauses. Apparently having nothing to do with tea time.

What makes the comrades at Morning Star: The People's Daily so excited (they got drubbed in the last election)? Well, there's a Labour Party conference this Sunday, and they have to have something to talk about. Talking being what they do best.

Transport Salaried Staffs Association (TSSA) general secretary Manuel Cortes, whose union is behind the motion to next week’s conference, said Labour should think about “accelerating” renationalisation through invoking break clauses “if this is in the interests of passengers.”

Yeah, IF.

While Labour should make a “bolder” commitment to ending the franchising system and taking back all routes, he said, TSSA’s motion would reiterate the NPF’s call for a new “guiding mind” to combine buying trains with ticketing powers and track maintenance.

Lenin...Lenin...?

“All new rolling stock should be purchased through public procurement,” the TSSA leader added, “to boost the manufacturing capacity in the UK and create a better skills base.”

Galbraith...Galbraith...?  And all the other suspects who been workin' on the railroad;

Train drivers’ union Aslef is expected to second the call. Its leader Mick Whelan told the Star: “We will support any opportunity for the railways to be bought back into public ownership.”

Now all you need to do is convince a few million English and Scottish voters to return you to power.

Goldilocksonomics

And he has a Nobel prize, so take it to...the forest, knock on any door...

While Shiller expects a further drop in the market, he warns against making any extreme moves. He says that investors should not to pull out of stocks completely, but also that they should "not be heavily exposed to the market, because it's worrisome at this point. Worrisome but not horrible." For this reason, Shiller says he has reduced his own exposure to equities.

to just the right amount, no doubt.

He also notes that recent gains in the housing market may not be sustainable. “I'm starting to worry a little bit, it's getting high by historical standards,” he says, adding that housing is a cause for concern, but it's not quite like the stock market yet in terms of valuations.

'not quite...yet'

“Usually housing has not been a great investment, owner-occupied housing,” he says. “Unless it gives you pleasure... I think people tend to overestimate the investment value of housing, especially at a time like this, when home prices are already high.”

Of course, he has two houses himself.

Also, he has a book you should buy. So you don't get manipulated or deceived.

(Actually, he once wrote a very good book; Finance and the Good Society, that would serve most people well if they read it.)

What happens in Vegas

Stays in Vegas got more expensive, thanks to the airport authorities;

McCarran International Airport spokesman Chris Jones confirmed authorities cited 87 [Uber and Lyft] drivers as of last week for not being authorized to drop off or pick up passengers.

.... The citations carry fines of $100.... 

Even though the drivers have been authorized to do so by the state of Nevada. We wonder who the airport is supposed to serve, the passengers pay to take off and land there...or someone else?

She's a saint

Or should be anyway, thinks Pope Francis of Dorothy Day. Who also was a Communist and a supporter of Fidel Castro (and were she still alive, would probably think Nick Maduro is just swell). But, is the Pope a socialist?

Perish the thought;

He praised one as a man of prayer, the other for her "passion for justice." But many Americans might need a reminder about two of the people Pope Francis discussed in Congress on Thursday: philosopher Thomas Merton and activist Dorothy Day.The two Catholics were mentioned alongside two other, more famous names: Abraham Lincoln and Martin Luther King Jr.

Just a coincidence that the non-socialist Pope mentioned, for praise, a Marxist inspired critic of capitalism. Sure.

[Update:] The Daily Mail noticed too;

A divorced Fidel Castro fan who had a string of affairs, an abortion and spoke up for Ho Chi Minh: The VERY unusual American Catholic 'saint' praised by the Pope

That's the Mail's response to the Pontiff's;

'In these times when social concerns are so important, I cannot fail to mention the Servant of God Dorothy Day, who founded the Catholic Worker Movement [newspaper],' he said.

'Her social activism, her passion for justice and for the cause of the oppressed, were inspired by the Gospel, her faith and the example of the saints.'

What will spook the spooks

Delay paying them, as Zimbabwe has, that'll do it;

President Robert Mugabe’s trusted spooks in the Central Intelligence Organisation (CIO) have not been spared the current economic problems – with their pay day being moved by almost two weeks.

Sources confided in The Zimbabwean that the dates were moved in May this year as government struggled to mobilise enough revenue to pay public employees on time.

Bad for morale;

“Most of us are not happy with this. We used to get preferential treatment, but this is no longer the case. How does the president expect us to be loyal to him when we are being treated like this? Morale is very low among the ranks and most of us are no longer as dedicated to the job as we used to be,” added the source.

Ominous.

Don't cry for ME

But Argentines may want to shed a tear or two for the mess they're in, according to this graph;

That was created by HumanProgress.org, and reproduced by Iain Vasquez at Cato under the headline;

Pope Francis Graph of the Day

The gap between the two countries is because of the gap between socialism--in Argentina it's called justicialismo-- and American capitalism. Where does the Pope's apologist Christina Odone think the poor are better off, we wonder.

Maybe Ben Carson had a point

It happens every year, yet Saudi Arabia wasn't prepared;

A stampede during the annual Hajj pilgrimage to Islam’s holiest city on Thursday left at least 717 people dead and another 863 injured, Saudi officials said.

Forewarned;

In 2006 more than 346 pilgrims were killed in a stampede in the same area. A panicked charge in a pedestrian tunnel leading from Mecca to Mina left 1,426 people dead in 1990.

But the forearms did their thing;

In the case of Thursday’s disaster, hundreds of thousands of pilgrims encamped in tents in Mina were moving en masse to Jamarat to throw pebbles against three stone walls in a symbolic stoning of the devil when the stampede occurred.

Democracy begins with self-control.

...and I thought about you

The SacBee's Jon Ortiz took a trip to The View;

Two talk show hosts mocking a Miss America contestant became the snark heard round the world last week. Nurses got mad. Advertisers yanked ads. Eventually “The View” co-hosts Joy Behar and Michelle Collins apologized.

Naturally, Ortiz looked for the union's label;

“It’s time to correct these tired, condescending and wildly inaccurate views of what it is to be a nurse,” the California Nurses Association posted on its Facebook page. “Not just on ‘The View,’ but throughout the mainstream media.”

Take out “nurse,” insert “state worker,” and you begin to understand the frustrations of so many government employees, said J.J. Jelincic, a 30-year CalPERS investment officer and union activist who sits on the retirement fund’s board.

And, of course, nothing matters to state employees more than the self-esteem of state employees. It's their view that counts, not yours;

From their point of view, politicians scapegoat them, he said, the public and the press don’t understand them, and their work goes unnoticed unless something goes haywire. And many state employees are regulators, which means they’re “in the business of telling people ‘no,’ ” Jelincic said.

“Everybody likes clean water, but people don’t like someone telling them they can’t dump waste in the river,” he added. “State workers are the people who say, ‘It’s not all about you, it’s about we [sic, but our bold].’ ”

That's your problem all right.

Frack Town

Crockett's Back! And...someone's got him;

Starring Don Johnson as a larger-than-life tycoon in boots and a broad-brimmed hat, “Blood & Oil” recreates Williston as the fictional North Dakota boomtown of Rock Springs. Young newlyweds Billy and Cody Lefever (Chace Crawford of “Gossip Girl” and Rebecca Rittenhouse) move to Rock Springs to start a business. They discover a Wild West crackling with strivers and swindlers as well as oil barons, presided over by Mr. Johnson’s Hap Briggs.

The toll of the boom-and-bust cycle is the philosophical core of this show, said Josh Pate, co-creator of the new series. It “could have been about the Gold Rush or it could have been about the dot-com [era]. It’s really about a speculative mania,” said Mr. Pate, who has worked in television and film as a screenwriter, director and producer.

If it's North Dakota there must be a boutique;

For Mr. Johnson, fracking country is a long way from South Beach, but he gets to fish on location, and like Sonny Crockett, his character has a memorable wardrobe. “I have some incredible clothes in this thing,” he said. In addition to the big hats, he wears clothes by Dior, Margiela, Brioni and Ralph Lauren.

They don't make em like they used to;

Labouring under missed conversion

Andrew Eyles and Stephen Machin provide more evidence--not that any more was needed for anyone objective--that competition improves outcomes in education. And it was a Labour (socialist) Government that did it;

Introduced in the 2002/03 school year by the Labour government of the time, academy schools enjoy more autonomy than traditional community schools. The original (‘sponsored’) academies are able to operate outside of local authority control and are managed by a team of independent co-sponsors who delegate management of the school to a largely self-appointed board of governors responsible for hiring staff, performance management, the curriculum, and length of the school day. Unlike most charter schools, academies are typically conversions from pre-existing schools.

And that last fact allows the Two Brits to do some evaluatin' of those schools that converted between 2003-09.

...outcomes were compared for pupils who were enrolled in an academy school prior to conversion, but who took their exams in the school post conversion, with pupils attending schools that later became academies under the same Labour government programme. Focusing on students enrolled in the academy before conversion ameliorates concerns related to non-random school choice. Similarly, studying pupils that sit their exams at a school that later becomes an academy as a control group nets out unobservable confounders (e.g. ‘ethos’ to become an academy) at the school level.

The findings are that academy attendance can lead to sizeable gains in pupil achievement. Figure 1 shows event study estimates of the effect of academy attendance on standardised tests (Key Stage 4, KS4) taken in the final year of compulsory schooling. The y-axis denotes standard deviation changes.

The picture at these institutions;

Figure 1. Effect of academy attendance on standardised tests, taken at final year of compulsory schooling

Year C marks the spot where dismal performance ends.

Given that, after Labour was voted out of power, the Tory led coalition government gave England the Academies Act of 2010, which expanded the program to now nearly 60% of England's secondary schools, we await further developments. As do Machin and Eyles, it seems;

The academies programme can be seen as the latest in a series of attempts to find innovative schooling strategies that boost the performance of state-maintained schools. Like Sweden and the US, the English education system is moving beyond the traditional state-maintained school. But compared with reforms in those countries, it is doing so on a scale and at a pace that are unprecedented. Whether the early successes of sponsored academies translate into success of the wider programme remains in doubt. What is clear is that the academies programme, and some aspects of its mode of operation, can offer important lessons regarding the optimal provision of state-maintained education.

Lessons that the NEA and its wholly owned subsidiaries (including the Washington State Supreme Court) will have to work overtime to ignore.

 

AKA, 'Accounts Receivable'

Donald Trump, business genius, artist of The Deal, hasn't heard of a commonplace practice sometimes known as vendor financing?

Lucent and its major competitors all started goosing sales by lending money to their customers. In a neat bit of accounting magic, money from the loans began to appear on Lucent’s income statement as new revenue while the dicey debt got stashed on its balance sheet as an allegedly solid asset. It was nothing of the sort. Lucent said in its SEC filings that it had little choice to play the so-called vendor financing game, because all its competitors were too.

 As did Lucent's non-competitors in unrelated businesses. Say, the retail sector. Does authoress Claire Zillman not have a Nordstrom credit card? Or, a Macy's, a Bloomingdale's...a Target card? All of them (vendors) finance their customers' purchases by offering credit. As do oil companies (Chevron, Shell, BP, Texaco issue credit cards).

In the business to business sector--in which Lucent was engaged--it's called 'receivables' and shows up as an asset on the balance sheet.. There's no neat bit of accounting magic about it. It's humdrum business activity, and any investment analyst who doesn't know about it ought to be, in words The Donald should understand, fired...for incompetence.

And Carly Fiorina was not CF[inancial]O at Lucent anyway. Nor CEO. It isn't clear that she, while at Lucent (she left that company in 1999) had anything to say about its credit policies. Nor is there any evidence being presented as to how large Lucent's receivables were as a percentage of its sales.

Not that we would want to confuse Mr. Trump or Fortune with the facts.

The joke's on El Papa

Christina Odone, writing at CAPX, is over her inordinate fear of the rhetorical question(?);

Is the Pope a Socialist? No

That's not supposed to require an answer to be funny. But funny it is, since Christina--Director of Communications at the Legatum Institute--doesn't even understand what capitalism is, if she believes what she has written in a tweet; Francis believes in a free market, when it is operated by men and women who have a moral compass

That's a big problem, since a free market is not operated by anyone. By definition, it is a self organized, organic thing. Buyers and sellers come together, un-coerced, to exchange what they bring to the party. Either side is free to accept or reject a trade.

If Christina is correct as to what the Pope believes, then the Pope is a socialist; he believes in an operated (managed) economy, not a free one. But one can sympathize with his confused upbringing;

His first impression of the free market was the unsavoury Argentinian model: in the 1970s and 80s, it delivered power and riches to the greedy elite at the top, and oppression and poverty to almost everyone else.

I.e., Argentina hasn't been a free market nation for almost a century--when it was, early in the 20th century, Argentina was one of the richest countries in the world--Argentina has a Peronist economy. Officially, Justicialismo (as in social justice), which rejects capitalism. It's akin to Mussolini-ism, that branch of socialism known in Italy as fascism.

With friends like Christina, the Pope doesn't need enemies like Ann Coulter. Speaking of whom, Christina  wrote;  From Ann Coulter to Donald Trump, the self-appointed defenders of the American way of life are getting ready for a confrontation with his Holiness.

That's another problem for the Directoress of Communications, since the link to Coulter produces a criticism of the Pope's religious proclamations, not his economics;

But my own — I’m not a Catholic. But I would think the statement by the pope that I find most surprising was his statement that you don’t have to be a Christian to go to heaven. Look, you may think that. Maybe there are a lot of people who think that. But if you’re head of the RNC, you’re not supposed to be saying, ‘oh, don’t bother voting Republican.’ That isn’t supposed to be your position.

If you're going to self-appoint yourself a defender of Pope Francis's beliefs, maybe you should actually read the things you link to.

...your Norse speaking Syrians yearning to scythe for free

Norway's farmers don't want Lilyhammerers, they want sons for their soil;

“They (the refugees) could learn a lot more about Norwegian culture and the language than they do in a sterile asylum center,” farmer Kjetil Larsgard from Hallingdal told Norwegian Broadcasting (NRK).

Larsgard said his family would more than gladly take in refugees, who he thinks can be a great resource for the country. “And having direct, personal contact with a Norwegian farming family is much better than playing ping pong at a refugee center,” he told NRK.

Though he hasn't asked the Syrians themselves if they think so. Nor did his neighbor;

One of his farming neighbours, Ole Bjørn Kleven, agreed and thinks the refugees would be welcomed and highly valued in agricultural communities, especially those faced with depopulation. The refugees could also make themselves useful right away, by helping out around the farm.

“Everyone who’s ever been involved with farming knows that there’s always more than enough to do,” Kleven told NRK. “That could be anything from clearing a field for stones to repairing a fence.” 

And a friendly chat;

“They also need someone who cares about them, and can talk to them, and I think that Norwegian farmers and the agricultural industry have a lot to offer,” he said.

All those Arabic speaking Norwegian farmers?

The Pope of Global Village

He's here! He's here!

Francis I is the new U.S. Catholic Bishops. Like them in 1986, he cares...and that should be enough, shouldn't it?

1. We are believers called to follow our Lord Jesus Christ and proclaim his Gospel in the midst of a complex and powerful economy. This reality poses both opportunities and responsibilities for Catholics in the United States. Our faith calls us to measure this economy not only by what it produces, but also by how it touches human life and whether it protect s or undermines the dignity of the human person. Economic decisions have human consequences and moral content; they help or hurt people, strengthen or weaken family life, advance or diminish the quality of justice in our land.

Of course, 'justice' means that people get what they deserve. But the bishops are talking about social justice. That adjective transforms the noun into something like the opposite of its usual meaning. Maybe Francis would benefit from meeting Thomas Sowell more than Fidel and Raul Castro;

Both the authors of the Bishops' Pastoral Letter in the 1980s, and Pope Francis today, blithely throw around the phrase "the poor," and blame poverty on what other people are doing or not doing to or for "the poor."

Any serious look at the history of human beings over the millennia shows that the species began in poverty. It is not poverty, but prosperity, that needs explaining. Poverty is automatic, but prosperity requires many things -- none of which is equally distributed around the world or even within a given society.

The question the Pope should be asking himself is, Which arrangements of human affairs result in less poverty? Sowell has an answer;

A scholar specializing in the study of Latin America said that the official poverty level in the United States is the upper middle class in Mexico [and even higher in Cuba]. The much criticized market economy of the United States has done far more for the poor than the ideology of the left.

Pope Francis' own native Argentina was once among the leading economies of the world, before it was ruined by the kind of ideological notions he is now promoting around the world.

By their works....

Let there be...Lucent!

Donald Trumps have confronted the little lady before, according to an old (1998) Fortune article;

The key to Fiorina’s success is her independence. “Had anyone told me that I was going to have a career in business, I would have said, ‘No way.’ ” For a time she dreamed of being a classical pianist. Then she settled on her father’s fantasy: the law. “I was in my first year of law school at UCLA,” she recalls, “and I was in this grind, wondering, ‘Why am I doing this?’ ” When she flew to San Francisco and told her father she was quitting, he replied: “Well, I’m very concerned, and I don’t think you’re going to amount to anything.”

Daddy? But there are worse men out there;

She bounced around, from a failed marriage in California to a gig teaching English in Bologna, Italy. At 25 she joined AT&T. Fiorina made her first mark selling telephone services to big federal agencies. Then she took the step that many thought would kill her career. She switched from the sophisticated, mainstream service side of AT&T to the equipment division, Network Systems. “The rap on Network Systems was that it was all guys with 20-inch necks and pea-sized brains. You know, heavy metal bending,” Fiorina says, laughing. “I went because it was a huge challenge, completely male dominated, and outside everything I’d experienced.”

She worked her way up the corporate ladder, eventually managing the company's IPO;

Fiorina’s main contributions were her unorthodox ways of thinking and her innate knack for selling. Says Jeff Williams, a partner at Greenhill & Co. who managed the Lucent offering when he was at Morgan Stanley: “She had little experience with finance. She was learning while doing. But Carly is so bright. She was always urging us to think in new ways about positioning the company to investors.”

All this success at Lucent came without her being its CEO. She only attained that position at Hewlitt-Packard, because (Fortune's Patricia Sellers now claims) she was written up as one of the most successful American women in business. That was in 1999. Now Fortune wants to take it all back;

When asked about what he thought of Fiorina’s failure to secure another CEO job following her departure from HP, Trump said her time off from private-sector leadership “is not a positive,” before he switched gears to blast her lesser-known tenure in charge of the largest division at telecom firm Lucent Technologies.

“You know, if you look at what happened at Lucent under her tenure it was not a good picture. I think it may have been worse than Hewlett-Packard,” Trump said. He reiterated that point in Wednesday night’s Republican debate on CNN.

What's your neck size, Donald?

But Holguín, Comrades?

It's Paris! Gay Paree that's worth a mass, guys.

POPE FRANCIS flew to the eastern Cuban city of Holguin yesterday to address a large outdoor Catholic mass in the city’s Revolution Square.

The pontiff told his audience that Jesus “invites us slowly to overcome our preconceptions and our reluctance to think that others, much less ourselves, can change.”

Mirame, for one.

Lady, be good within the leather

Meow, meowing the Norwegian flak catcher;

Suzann Pettersen has been Norway’s star golfer for nearly two decades, but experts claim she now may be irreversibly tarnished. The respect she’s commanded suddenly dissolved into hatred after she controversially contested a putt during the weekend’s Solheim Cup tournament between professional women golfers from Europe and the US. At first she defended herself, but later apologized.

By gentlemen's agreement, a putt that is shorter than the standard length of a putter grip is conceded to be 'in'. When the two European golfers walked off the green toward the next tee, the American golfer assumed her one-footer had been so conceded. Only then did the gamesmanship begin.

Pettersen’s crime was her stated objection when [American Alison] Lee, who was making her debut in Solheim Cup competition, apparently assumed she’d be given a putt when her ball landed somewhere between 25 and 40 centimeters [10-16 inches] from the 17th hole. She picked up the ball without actually putting it into the hole and without getting a nod from her opponent Pettersen.

That prompted Pettersen to alert officials to how Lee had broken the rules, but Pettersen herself had broken an unwritten rule of golf. Most all golfers would have given Lee the nod and allowed her to pocket par. Pettersen’s decision not to go along was widely viewed as showing Pettersen to be a bad sport.

And to have cheated her way to at least a half point her team didn't deserve. Europe, however (possibly energizing the Americans) ultimately lost to their adversaries 14-1/2 to 13-1/2, after leading 10-6 entering the final round of matches.

Pettersen, age 34, admitted herself that her hard line with Lee, who started to cry, froze relations between the European and American teams, with the latter going on to play strongly and win.  “They hated us,” she told Eurosport, but initially claimed she couldn’t understand why since “they were the ones” to make a mistake, “not us.”

Norwegian golf expert and Viasat commentator Per Haugsrud firmly disagreed. He sided with scores of others, also most of the press corps covering the tournament, that Pettersen should have given the putt and its important result to Lee. “It’s very important to be a ‘gentleman’ in our sport, and what she (Pettersen) did was on the verge of being unheard of,” he told NRK.

Should do wonders for Suzie's endorsement income.

Tory Party animals

Prime Minister David Cameron was once a university student, the investigators at the Daily Mail discover;

David Worth, an American postgraduate student who was in the [Oxford] club at the same time, recalls how his first outing involved taking a boat on the Thames to Cliveden House, the former stately home in Berkshire which was at the centre of the Profumo Scandal in the Sixties and is now a luxury hotel.

‘I remember David quoting Winston Churchill extensively by memory — Churchill was a bit of a lush, so they were quotes about drinking — and he was very funny, he said.

‘A few leaned over the side of the boat occasionally — if you’ve drunk two bottles of champagne in an hour, your stomach’s going to get queasy.’

London Mayor Boris Johnson says of the Bullingdon Club: ‘You wake up with that terrible hung-over sense of shame, accentuated by the feeling that you could have had much more fun if you’d just taken your girlfriend out to dinner. What was the bloody point?’

Cameron may well have come to the same conclusion. Despite his extra-curricular activities, he took his studies very seriously and was highly regarded by tutors.

And today, voters.