Allen February 27th, 2004
Read Mises Economics Blog: Austrian Economics and Libertarian Political Theory: Senators’ Stocks Beat the Market to learn how Senators have learned how to beat the stock market — making consistently above average returns. It’s amazing how smart you can get once you get into Congress.
In related news, major brokerage firms have issued a new tracking stock (SSS — Slithery Slimy Senators) that will follow the trade patterns of our elected representatives.
Allen February 27th, 2004
Read Mises Economics Blog: Austrian Economics and Libertarian Political Theory: Government Shuts Down Teen Entrepreneur to learn of a teen that put together a business and was shut down by the government because he wasn’t licensed.
I understand that licensing is good because it is supposed to keep shoddy goods and services from being sold on the market place. It’s just interesting that none of his customers were complaining.
Just some of his competitors.
I thank God that he wasn’t using flowers for the rodent screens.
Allen February 27th, 2004
One of those wonderful essays that needs full reading. It examines the arguments for protectionism and counter-arguments against it. As you can imagine from the title The Dangerous Nonsense of Protectionism, the author Murray N. Rothbard is for free-trade. As a note, the article was first published by the Mises Institute in 1986.
It’s interesting to read argument posited in 1986 and see how they still have relevance today. Just substitute Japan for India/China.
A key passage for me:
Keep Your Eye on the Consumer
As we unravel the tangled web of protectionist argument, we should keep our eye on two essential points: (1) protectionism means force in restraint of trade; and (2) the key is what happens to the consumer. Invariably, we will find that the protectionists are out to cripple, exploit, and impose severe losses not only on foreign consumers but especially on Americans. And since each and every one of us is a consumer, this means that protectionism is out to mulct [sic] all of us for the benefit of a specially privileged, subsidized few—and an inefficient few at that: people who cannot make it in a free and unhampered market.
Allen February 27th, 2004
David Farley has been drawing an Internet-only cartoon, Doctor Fun, for many years now. At times profane and at time profound, it has some snarky humor along the lines of Gary Larson. He now has an RSS feed that I use to keep up.
His recent one is a classic update on an old joke. I enclose here for your enjoyment and point you to both the Dr. Fun website and the RSS feed.
Well, the image I had originally posted didn’t work. I need to change my site to flow CSS, so I’ll just post the link here for right now. Link.
Allen February 26th, 2004
Virginia Postrel examines free trade zones and the history of the US. Read her NYT article for the entire bit: Economic Scene: U.S. Is a Case Study in Free Trade.
Those who didn’t snooze the entire time during high school (or college) history will remember that each state was an individual nation, once upon a time. The creation of our republic created, in essence, a giant free trade zone.
It’s worked pretty well for us. Perhaps it will work for others as well?
Allen February 26th, 2004
Brian Keegan gets snarky the current crop of Presidential contenders for distancing themselves from Greenspan in his recent remarks about Social Security. Read Centerfield: Greenspan Scatters the Roaches for its snarking glory.
I remember commenting to my wife that it is like getting mad at your oncologist for telling someone they have cancer. The oncologist didn’t cause the cancer. They are just there to let you know about its existence and help you overcome the problem.
I have a sinking feeling, however, that the American public won’t do anything about Social Security until we are at Stage V.
(That may have extended the metaphor a bit too far)
Allen February 26th, 2004
Shirin Peerooz in To: Leaders of the European Union and the People of Europe takes the leaders of the EU to task over their coddling of Iranian mullahs. One memorable quote is:
Indeed, it is a mystery that a regime so supremely incompetent and inconsistent at best, deeply and vastly detested at home and abroad has managed to survive. Aside from the confusion existing among my people and the lack of leadership among the opposition groups, and aside from the fact that the Islamic regime in Iran is probably one of the most ruthless and brutal regimes in the history of mankind, I find the main reason for this regime’s survivability, an umbilical cord so tightly knotted into the belly of the European Union.
The prose, at times, can be a bit overwrought, but if my country was being held hostage by these butchers, I probably would do the same.
The world coddled Saddam and his thugs in order to get at Iraqi oil. It appears to be doing the same with the mullahs and Iran.
Go read the article. Not written by some neocon with “world domination plans”, but rather a woman angered over her land being held hostage.
Allen February 26th, 2004
Eisner just got a vote of no confidence from Calstrs — the California State Teachers Retirement System. So says WSJ.com - Calstrs To Withhold Vote For Eisner As Disney CEO (paid subscription required).
It is the money folks, not the Disney fans who will determine Eisner’s fate. Me voting my puny number of shares won’t make a whit of difference. But this will.
Allen February 26th, 2004
Reading OpinionJournal - Peggy Noonan (paid subscription required) on the Democratic “fervor” over Kerry got me thinking. As stated in other many articles I’ve read…
The reigning cliché is that they’re simply Democrats who want to win, who’ve settled on him as the guy who can beat George W. Bush. I think of them as union operatives, union leaders, savvy teachers union communications directors, party operatives and party donors. Which is to say the party establishment that Howard Dean threatened and John Edwards has not so far succeeded in seducing. But when Democrats are on fire over the electability of a man and not the man himself–well, if I were a Democrat I’d worry about that down the road.
When putative candidate Kerry is dinged and dinged again by the journalistic and political vetting process, when his votes and stands and record are inspected for implications, when the conviction that he’s electable begins to wane–and all these things will happen, at least to some degree–what will it do to pro-Kerry fervor in the rank and file?
To me this reminds me of a “momentum stock” pick. You purchase the stock because the price is rising. You really don’t know that much about the business the company is in, don’t know much about the fundamentals of the company. In fact, you’re not really sure exactly what the company does to make money. But you know that people are buying the stock and driving the price up. So, based upon the advice of your brother-in-law, you purchase some on the hopes of selling it later to someone else who is buying based upon momentum.
The problem with momentum stocks (and momentum candidates) is that eventually someone takes a look at the fundamentals and says, “Neah. I’ll pass.”
I do think there are those who admire Kerry based upon his views. There are those who see him as a taking courageous stands on issues and voting his mind. Those who would follow him even if he is the “momentum candidate”. But is there enough of those people when the shine starts to come off of Kerry?
Who knows. I sure don’t. I get a feeling that if Kerry wins, it won’t be because Kerry defeated Bush so much as Bush defeated Bush.
And that has certainly happened in the past.
Allen February 26th, 2004
Knowledge@Wharton is a business ezine that I get in my inbox roughly monthly. It usually tackles a defined business theme (outsourcing, intellectual property, etc), but this month’s newsletter seemed to be a grab-bag of articles. One article was about outsourcing and I’m still attempting to digest the article and determine if I have anything else to contribute.
The article I am interested in commenting on is Comcast vs. Disney: Facts and Fantasia - Knowledge@Wharton. Given that I am both a Disney fan and a Disney shareholder, I’m following the Comcast bid for Disney with some interest.
As with most articles of this type, it has a pro and con view taken by opposing authors.
Experts at the Wharton School are divided on that issue. Some, such as public policy professor Gerald Faulhaber, say buying the kingdom that Walt built would give Comcast much-needed leverage as it negotiates with competitors such as Rupert Murdoch’s News Corp., which already controls both distribution and content. Others, including marketing professor Peter Fader, fail to see how Disney’s content complements Comcast’s distribution. Plus, even if Roberts wins, he’ll be stuck with Disney’s theme parks, which do nothing to advance his perhaps ill-conceived aim of marrying cable and content.
The same sentiment seen elsewhere is found in this article. To wit: Comcast seems to need Disney more than Disney needs Comcast.
Two of Comcast’s main competitors in the distribution business — Time Warner, which owns cable systems, and News, which recently acquired the DirecTV satellite system — also control lots of content. For Comcast to negotiate with them on an equal footing, it needs the same thing, Faulhaber argues. Say Comcast wants to run News’s programming on its cable systems. It has to have valuable programs of its own to offer in exchange. Otherwise, News can extract high fees. “If you’re Comcast, and Rupert has Fox and Fox News, [you may be asked] what have you got? You need to be able to say that we’ve got ESPN and the Disney Channel.â€
ESPN, especially, is a valuable coin. Analysts have speculated that Comcast’s desire to own it is the real motivation underlying the Disney bid. ESPN started in 1979 as a single cable channel and has grown into a franchise of its own. Today, it encompasses multiple cable channels, a print magazine that rivals Sports Illustrated for influence and readership, and even a chain of sports bars. Disney doesn’t break out ESPN’s results, but it is estimated to generate $1 billion a year in profits and could be worth $15 billion to $20 billion, standing alone.
Assuming that Comcast does acquire Disney, there is the remaining problem of what to do with the theme parks. They do not “fit” into the model of a media company producing and distributing content. Will Comcast keep it or spin it off into a separate business?
As stated in earlier articles, I hope that Comcast fails in their takeover attempt. Recent rumbling I’ve heard has suggested that Comcast plans to sweeten the offer with more cash. I still don’t like the idea, however.
