Friday, September 30, 2005

Listening to Rush Limbaugh is good for a laugh

Rush is busy railing against the current Bill Bennett flap that cropped up this morning. However, he's attacking the "media bias" regarding the story. However, if you read the AP piece you'll see that they are reporting it exactly as Rush is. In fact, you'll see that the two quotes attributed to Bennett after the initial, ill-considered statement are both included (Rush is saying that the "mainstream media" isn't including these statements which is simply not true).

Rush is also busy saying that the Dems (as he calls them) are upset because they think that Bill Bennett is a baby killer. What they are really upset by is the insinuation that unborn black children are more likely to grow up to be criminals then their white counterparts.

It's unfortunate, but we have a wide variety of "racist" statistics in America. It's entirely debatable as to what causes them but the fact is that the crime committing population of the Unites States is disproportionately black. Rush should be attacking the Dems blind ignorance of statistics, but then that would entail an actual debate about actual problems that are difficult and unpopular subjects of discussion. Oh well.

Wednesday, September 28, 2005

Fun with Anagrams

I forgot all about this website... You can waste hours of valuable
time with it ;)

Below are some examples of names of people I know:

An Unhealthy Enemy Lincoln
Lazy Liberal Hatched
Lamellar Nerd Whirl
I'm A SEC Jerky Lacer
Fed Her A Dwarf Jelly
Unsuitable Telegram

Just a nice diversion for hump day

Tuesday, September 27, 2005

What is price gouging?

Florida's first use of anti-price gouging laws has been used in the wake of Hurricane Katrina by, would be governor, Charlie Crist. This got me thinking about what exactly price gouging is...

I don't want to bore anyone with the economics (and I don't have the visual aids to properly demonstrate) but price gouging is essentially a non-monopoly company taking advantage of circumstances that create temporary monopoly-like conditions. Typically, companies will price their products to maximize profits. They also, typically, face some kind of competition. In the case of gas stations it's the guy across the street or down the road.

When Katrina happened the supply of gasoline was artificially restricted. This created some actual monopolies (gas stations that were one of only a handful in an area to have gas) and some monopoly like conditions (gas stations that were located to take advantage of people's desire to be "safe rather than sorry"). While the price gouging laws are nebulous, tough to enforce and small in dollar amount, the Sherman Anti-Trust act (and it's antecedants) provides for tougher penalties, including triple damages. Additionally, it's generally easier to prove since all you have to show is that the company was in a monopoly position and pricing accordingly.

Is the Estate Tax anti-capitalist?

The Estate Tax (or if you're a Republican, Death Tax) has been a hot topic for years. Everyone wants to build up wealth for their children. It's a natural desire to help future generations. No one wants to see Uncle Sam take something that should go to their children. However, I question the capitalist qualities of the Estate Tax.

1) It encourages saving rather then spending
In a world without the Estate Tax, there would be little need to save money as you got older. Since people can't accurately foresee their death there would still be a tendency to save, but it wouldn't be as strong a desire as it is now.

2) It creates a class systemt
I'm not someone who thinks that everyone should be paid equally. The risk reward system in America is what makes us great and what creates wealth. However, it troubles me that someone born into poverty does not get the same chances as someone who is born wealthy. Obviously, the Estate Tax doesn't eliminate this problem (not unless we kill off parents when they give birth) but it does mitigate it somewhat.

3) It provides for "free" income for future generations
Even if society could provide the same chances for poor children as it does for rich children you'd still have the problem of "free" income for children. It's essentially private welfare. If we say that poor people are less likely to work because they have welfare then we have to also be honest and say that people who are gifted large sums of money are less likely to work because they can put their wealth in a CD and live comfortably off the interest.

I would love to be able to give my children all of my wealth so that they have it easier then I did. I think that is natural and admirable. However, the more I think about it the more I start to realize that that's a pretty selfish desire. I'm not proposing an alternative solution here but I thought it was good food for thought.

Fantasy Football update

Once again I'm getting screwed by the football gods. While I'm leading my 6 person "Elite" league (by the hair of my chinnychinchin). I'm 8th in our 16 person league despite being (essentially) in third place by scoring. The disparity is quite annoying but, hopefully, will even out over time. I've long been an advocate of some kind of different method of keeping track of fantasy football records.

The standard system is to randomly pit teams against each other each week. This works fine for real football. A game in which two teams actually have influence over each other. In Fantasy Football, however, it stinks because you can't actually play defense or influence the opponent in any way. This leaves you to the mercy of random chance. You could (conceivably) score the 2nd highest score each week and still finish winless if you were pitted against the top point scorer. I have two suggestions.

Impement "defense": I'm not talking about picking a team defense. I'm talking about each opponent getting to choose one player that they defend against. This could be as simple as saying that that player's points are reduced to zero or it could be as complicated as saying that you have to choose a pair of players at the same position. If my guy outscores your guy then your guy is reduced to zero.

The other suggestion is to have every team play every other team for record keeping purposes. So in our 16 person team you have 15 opponents each week and will finish with a ton of games (I think we play 13 weeks so 195). In this way you can still be rewarded by high scoring weeks but you also are punished for lowscoring weeks. The results in our 16 person league are pretty marked:

The 3rd place team dropped to 11th, My  8th place team rose to 5th, and the 6th and 7th teams dropped to 13th and 14th respectively... The top and bottom two remained the same and the records are more closely aligned (but not identical to) the points scored... I think it's an excellent system that I will strongly consider implementing next year

Monday, September 26, 2005

It's a blob!

I just got back from the first ultrasound of my wife. The ultra-sound
technology is wayyy better then you see in the movies. You can clearly
see the baby... two arms, two legs and a head. The blood flow is
visible (sort of a swirly mass in the center of the baby) and you can
kind of make out a face (admittedly, the "face" could just be a lucky
confluence of static a la the face on Mars). All that detail is
visible despite the baby being less than 2cm (1.88cm to be precise).
The due date is May 6th and my wife and I are pretty psyched. We had
thought there was a chance that she was having twins (showing early,
bad nausea and a sister who's had twins all made it seem plausible).
We were both just a tiny bit bummed that it wasn't twins...

Just wanted to share my joy

Friday, September 23, 2005

Random entertainment news

It's not often that a TV show lasts one episode... Head Cases did though... I guess narcisstic, eccentric lawyers like those seen in L.A. Law, Ally McBeal and Boston Common are okay but the genuinely crazy ones aren't good enough. I think Chris O'Donnell may replace John C. McGinley as the Jumping the Shark mascot.

In other, totally unrelated news, DJ Qualls was on the Jet Blue plane. I guess that explains why the plane wasn't too heavy to land.

My list of shows to watch this season:

Sitcoms:
Joey, Scrubs, My Name is Earl
Dramas:
Las Vegas, House, Threshold
Reality TV:
So You Think You Can Dance
and maybe American Idol

Wednesday, September 21, 2005

All things football

The first two weeks have come and gone and pro-football still rocks... For those of us playing fantasy football it's a blast... and for those of us that are just fans of the game we're pretty happy too... There's a ton of storylines going on that have made this NFL season memorable already.

1) Willie Parker and Carnell Williams
2) The Jacksonville Defense
3) Daunte Culpepper sucking
4) The Raiders Offense
5) The Patriots.

I'm sure there are others... Also, now that it's football season it's time for the return of TMQ. For those of you that have never read TMQ, I suggest you go for it... even if you don't like football you'll find something to enjoy.

Good luck in your fantasy leagues (unless you're playing me that is :)

Tuesday, September 20, 2005

Hurricane who?

Katrina has been on everyone's mind... and Ophelia dropped about a billion tons of water on coastal carolina... Now Rita is making a beeline for Texas, which is sure to be upsetting to the New Orleans evacuees... But why is noone talking about Jova... That's right, Hurrican Jova. A class 3 Hurricane headed for about 1.2 million of our fellow Americans... Americans who won't be able to evacuate quite as easily as New Orleans natives either. Jova is a Pacific Ocean hurricane that is headed dangerously close to Hawaii. Pacific ocean hurricanes don't get alot of press. Hawaii's size and southern location (Hawaii about as far south as Cuba) make it an unlikely hurricane target. But this hasn't been a normal hurricane season and, unsurprisingly, Hurricane Jova is heading dangerously close to the island state. Right now the predictions are that it'll swoop just north/east of Hawaii. That would mean that Hawaii would dodge the bulk of the damaging winds and rains that occur in the front right quadrant of a Northern Hemisphere hurricane.

Anyways... Keep an eye out for the Hawaiins... a southern dip in Jova's path or a sudden western rush and Hawaii could give New Orleans a run for its money.

The problem with regulatory bodies

For any of you that don't know... I'm a banker. I've worked at and with bank's 8 years now. I worked at a bank that was closed by the regulators. And even after all of that I'm a big fan of the FDIC and its various bodies (OTS, OCC, etc). I believe that they are the reason that we have a strong banking industry. For those of you that don't understand how this works. Essentially, banks are (generally) required to pay for insurance on their deposits. As a condition for getting the insurance the insurance company (the FDIC in this case) gets to come in and dictate terms to you. Generally, the FDIC is charged with protecting depositors. They have extended this influence into the realm of loans based on the argument that unsafe loans put the depositors at risk. Some regulators have lost sight of this primary goal but, in general, the regulatory bodies do a pretty good job.

However, they all share a common problem, they are problem identifiers, not problem solvers. Their job is to come in and point out problems but they are, generally, not able to provide much insight into how to fix the problems that they identify. Every time they identify a new problem they create an industry scramble. People frantically seek professional help to assist them in solving the current problem of the month. 6 years ago it was Y2K, then it was system security, now it's concentration of credit. For most bankers, these come as pretty big shocks. For consultants, there's a frantic scramble to determine what information is out there and try to educate themselves so that they can actually assist their clients. For regulators, there become a need to see solutions despite not knowing what the solution is supposed to look like.

My understanding is that the problem is actually generated by the large banks. Regulators have a very symbiotic relationship to larger institutions. Some accuse them of being too close. I don't think this is the case. I do, however, believe that certain mandates are originated because of the education by osmosis that occurs. For example, Regulator A gets assigned to Big Bank. After working their for a couple months he sees the very interesting reports that are generated by Big Bank's new analytical software. The reports show historical trends for every conceivable portion of the Bank's portfolio and they cross reference it to any of a number of variables. They identify problem sectors in the portfolio based on geography, product type and a host of other factors. Now, Regulator A thinks these are great. Big Bank has managed to identify and address several areas that look like they could have been serious problems. Regulator A's next job is in Small Bank. Now he applies what he's learned at Big Bank and is shocked to see that Small Bank doesn't have any kind of analysis of its portfolio. So he writes them up.

Regulators are intimately aware of the differences between large banks and small banks. However, I believe that they do not properly recognize that there are two types of small banks. There's regional banks and community banks. Regional banks tend to be statewide and sometimes multi-state. They have assets less than $10 billion and they are generally growing through acquisition. Community banks tend to be in one or two cities. They have assets less then $500 million and they are generally growing through expansion and occasionally merger.

These two entities have very, very different needs and capacities. The regional banks can diversify in ways that the community bank cannot.

That was just me venting... sorry to bore you...

Monday, September 19, 2005

All Google... All the time

Talking about tech news is starting to feel like being a publicist for Google. It seems that every week there's a new story about some new venture that Google has gotten into. Today it's online library services. Google wants to scan copies of books and make them available on the web. For those books that are not copyrighted they would be completely viewable. Those books that are copyrighted would have some restrictions. The couple of articles I've read have had alot of hyperbole thrown about and the use of the phrase fair-use is sure to come up more often. For now, though, it appears that Google is making in roads into yet another innovative use of the internet.

Those of use that have followed the technology industry most of our lives are starting to recognize some of the commonalities that Google shares with other great tech companies. Google's business model is looking more and more like Lucent, IBM and Xerox. They are innovating for the sake of innovation and they are reliant on those innovations to eventually pay them off. All three of those tech greats are weaker now but there's is little doubt that they changed the world with their technologies. Few people realize that the mouse was invented by Xerox, the wireless router and TCP/IP were invented by Bell Labs (later Lucent), and IBM created virtually everything that is used in your computer today.

So... Is Google the next Lucent? Only time and luck will tell the story.

Friday, September 16, 2005

Those crazy Nintendo guys are at it again...

Nintendo's next generation controller is going to be in a league all its own. I'm not sure whether I like it or not... Part of their stated intent is to make it friendlier for first time users. Friendlier is fewer buttons and simpler design, like the original Nintendo controller. Friendlier is not, non-intuitive and clunky...

The other thing I noticed is that if you look at the picture (and read the article) it appears that the 2nd hand add on piece is supposed to go in the left hand.  Try simulating that in mid air right now... Shooting a gun or thumbing complex commands with your left hand while mashing buttons with your right. Maybe it's just me but if feels very odd to do that... Much more natural to do it the other way.  I guess it probably doesn't matter though since you could easily switch them between hands.

Apparently two wrongs really do make a right...

Delta and Northwest filed Bankruptcy the other day virtually simultaneously and at the same court house. If this doesn't set your spidersense tingling then you shouldn't be in business... Now I read this article and know that I'm not alone in my thinking. I loathe the way bankruptcy courts protect companies that are failing. Northwest appears to have run their company into the ground due to incompetence. On the other hand, Delta actually tried to work their way out of the problem and delayed bankruptcy proceedings last year. They are, in essence, being penalized for not declaring bankruptcy while their competitors did. Delta wasn't able to slough off millions of dollars in debts the way that United and US Airways have. US Airways is actually emerging so strongly that it is able to merge with America West.

Now we see that Delta and Northwest (two companies now in bankruptcy, remember) may actually be able to merge successfully and come out stronger. Where's the justice? Bankruptcy shouldn't be a competitive tool in the same mold as opening a new branch or closing an unprofitable plant. Not that I feel particularly sad for those people that loaned money to the airlines in the form of unsecured loans... That's just stupid... but it still gauls me that Delta was, in essence, encouraged to prematurely declare bankruptcy...

Thursday, September 15, 2005

Federalist or not

The biggest fight this week occurred in the form of a very careful joust between Republicans and Democrats and Judges in the middle. It wasn't about politics or even ideology. It was about states rights vs. national rights. In listening to the congressmen you got a sense of the following exchanges:

Senator Bob R-XX: Judge Roberts, how do you feel about the court striking down evil democratic bill A?
Judge Roberts: I have no quarrel with the court deciding to let the states make that decision themselves.
SB: I'm glad to hear that. How do you feel about the court striking down good republican bill B?
JR: I have no quarrel with the court deciding to let the states make that decision themselves.
SB: Judge Roberts, am I hearing you correctly? Do you actually feel that republican bill B is a bad thing?
JR: All I am saying, Senator Bob, is that the constitution indicates that those decisions be left to the states.

Of all the ways in which Roberts may or may not resemble Rehnquist, the most fundamental is in his views of States rights. He is a Federalist. A lost ideology in this day and age.

Monday, September 12, 2005

Balls and Strikes

John Roberts closing statement was simple, concise and to the point. I think that is a notable point, especially when you consider that he listened to 3 hours and 17 minutes of speaking from the Senators. One line struck me though.

Paraphrasing:
"I will remember that I am the charged with calling the balls and strikes, not with pitching or hitting"

To continue the metaphor... If the Supreme Court calls the balls and strikes, then who is in charge of banning steroids?

Three hours into the confirmation process...

and we still haven't heard more than a muffled, "Thank you" from the nominee. Senators have an amazing tendency to speak until they can speak no longer. Every senator has hit on four things in their speeches.

1) The right to privacy
2) Abortion
3) Broad vs. Narrow Interpretation of the constitution
4) The scope of valid questions

It's interesting the ways in which senators express the important nuances (or, as some would say, how they equivocate). I know it's too much to expect, but I'd love to see blunt honesty in the answers to these questions. Here's what my answers would be...

1) What are your views on Roe vs. Wade? You previously wrote that you felt it was a bad decision, please expound.
Thank you, Mr. Senator. I believe Roe vs. Wade is a horrible decision because it hides behind the thin veneer of a right to privacy. Obviously, privacy rights do not stop us from prosecuting a man who beats his wife in the privacy of their home. Or, to choose a less obvious comparison, privacy rights do no stop us from prosecuting a woman who sells herself for sex or a person who does drugs in their own home. The question is, frankly, not relevant to privacy. We have agreed, as a nation, that there are certain crimes that are "victimless" and yet should still be illegal. Roe vs. Wade is a bad law because it establishes a biological time-line for a fetus that is not based in biological facts.

2) What is your opinion regarding privacy with regards to the collection and dissemination of medical, financial and other data that is generally considered "private"?
While I wish that Congress would enact such protections, I cannot find such privacy rights in the constitution. Certainly, an argument can be made with regards to privacy from government intrusion. This can and should be an area in which the government is limited. However, there is no "right to privacy" from invasion by individual persons or corporations with regards to data collection. If the data is collected and accumulated through legal channels then there is no, illegal, invasion of privacy as defined by the legislature or the constitution. However, I do believe that the statutes regarding libel are generally applicable to the information disseminated by credit reporting agencies and that grievances should be brought through those channels.

3) People have argued recently over whether or not the Constitution is a "living document", how do you feel about this question?
The Constititution is the manual by which we run our government. It, by it's own admission, is not meant to be all inclusive. The founders recognized that they could not foresee the future problems of the fledgling nation and so they provided a broad outline that could be reshaped by Amendment and filled in via Laws. Both amendments and laws are crafted by legislators not by justices. I believe that the constitution only changes through proper acts of Congress. But I also believe that circumstances change that are unforseeable. Was it judicial activism or judicial restraint that expanded wire-tapping laws to cover internet transmissions? The answer to that question, and many like it, are the kinds of heavily nuanced questions that a justice must answer.

Friday, September 09, 2005

Technology spins on

Pacman's not dead. He's just living with Elvis. VR has always been a dream for computer users, programmers and gamers. But "Mixed Reality" might be the way that we see things evolve for awhile. The advent of this ability to superimpose computer data onto real world data is striking. The Pacman game seems an almost trivial and juvenile use of a technology so powerful.

Imagine SWAT team members equipped with light, unobtrusive goggles that could screen out the flash from a flashbang and could superimpose maps of buildings based on GPS location. What about being able to walk around with glasses that had a small HUD that reported everything from your current health status to the identity of someone you were looking at. Drivers would probably love to be able to display a small map in their field of vision so that they could find their way home in a strange city. There are probably many, many more applications for this technology. Thank goodness the Japanese have chosen to invest in Pacman ;)

In other techie news, it appears that the brain is still evolving, the interesting part of the story actually occurs at the very end, however. There is a very " Bell-Curve" like discovery that is made and, if true, it's going to cause us to rethink alot of our opinions regarding race, equity and fairness. Essentially, this group of scientists claims to have identified two genetic markers that correlate, roughly, to brain size. These markers came into being between 60,000 - 10,000 years ago (for one) and 500 - 14,000 years ago (for the other). At the end of the article they note that sub-Saharan African populations today. They are very careful to state that Intelligence is influenced by a number of unrelated factors and that these genes are only a small part in determining intelligence.

The problem is that they can't pick and choose what the data means. Either the genes are important enough that they propugated quickly and helped to create literature and the arts. Or they're not important and we shouldn't bother to even look at these findings. There isn't a politically correct middle ground here. The Bell Curve was an incredibly controversial and, some would say, racist book. It posited the idea that blacks were, as a group, naturally less intelligent then whites. I will not even begin to opine on what I think of that idea.

However, there is one piece of information that has never been properly explained, that is that Blacks students with equivalent demographic data (family status and income being the two most common) are outperformed by white students on standardized tests. Once all the factors are controlled for the margin is fairly slim (family status appears to be the key here as this comparison of 1995 SAT data vs. this 1994 study of other factors). It would be nice if someone could do the math to isolate family size and parental status to determine their relative statistical impact. However you slice it though blacks still have an unexplained performance gap as compared to whites.

This data could turn out to be that missing explanation. If there's a genetic marker that is prevelant across the vast majority of the world's populace but is statistically slightly less likely to occur in certain groups then it could explain a 10-20 point SAT gap. I'd like to believe that there's another explanation but if there's not then, given the ultra slim margins we're talking about, I can live with this one. I'd be fascinated to learn whether or not this marker appears more common in Scandinavian and Asian populations. If it does not then there's obviously something else at play. If it does appear more often in those two, historically high scoring, groups then it might be a fascinating and controversial discovery indeed.

Wednesday, September 07, 2005

Disaster Preparedness

We're starting to hear alot of noise about the level of readiness and the lack of speed from a federal response. It's becoming increasingly obvious that the disaster in New Orleans was never contemplated in terms of national import. This is exactly the kind of thing that the federal government should be gearing up for.

I want to lay out the facts as clearly as possible before we get in to what needs to be done.

Prior to the hurricane hitting Florida it appeared that it would probably only be a Tropical Storm or maybe a very weak Category 1 Hurricane. It also appeared that it would go through the Lake Okechobee region of the state which would force it to travel some 200 miles over land. In the past, this has been enough to pretty much kill a hurricane or storm.

However, just prior to making landfall the storm slowed down and took a severe dip south. It went over Miami and the keys and was never over significant amounts of land. Having gotten past Florida, the storm began to strengthen in the warm Gulf waters and curl to the North. Initial predictions showed it hitting near pensacola. The storm then took a westerly bent putting it on a collision course with New Orleans. The first time that the storm was shown to be zeroing in on New Orleans was about 60 hours prior to its eventual landfall. Mandatory evacuation orders were issued at that time but, because of the geography, there was a HUGE area to be evacuated (approximatley 500 miles of coastline). In addition to the logistical problems of evacuating that heavily populated an area there was also the demographic factors influencing things. Many people in the region are poor and without transportation. This was a particularly bad problem in New Orleans.

With approximately 24 left before landfall the storm took a slight bent east so that the NE quadrant would miss New Orleans. Citizens in New Orleans breathed a collective sigh of relief and this last minute swing probably induced alot of people to stay put instead of making an emergency evacuation. Monday seemed to pass without much incident in New Orleans. Coverage of the city was spotty but didn't seem to be significantly different then other past hurricanes. Suddenly news of the levees breaking streamed in. How or why the levees went unmonitored and unreinforced appears to be a bit of a muddle right now. What we do know is that sometime in a 12 hour span 3 levees broke and the city began to flood. The water level was already higher in the region and the city flooded worse then the height you would expect based on the lake's water level.

Weather and logistics prevented a quick and decisive response by the army corp of engineers. The technical details are best left up to qualified engineers but my understanding is that by the time they were able to start dropping things into the levee the rushing water was already so strong that 15,000 lb cement blocks were getting slammed out of the way. At some point, desperation induced the corp to look at the possibilty of using container trucks or even a barge to plug the gap. Time worked against them and the city and lake reached an equilibrium point, however.

What is fascinating to me is that there doesn't appear to have been any kind of response plan. There was, originally, quite a bit of press coverage of the budget being cut for the reinforcement of the levees. That indicates to me that at least someone, somewhere was thinking that this was a possibility. Why was their no response plan in place? This is THE disaster for New Orleans. Why was their not a thorough plan of action already mapped out? Why couldn't the mayor open a book and start educating himself as to the logistical problems. Hurricane evacuations have been occuring for years. The parameters are pretty well set (this many people will stay, this many people will leave, this is what traffic will be like, etc.). The New Orleans area is home to 3 of the country's 10 biggest ports, including the number 1 port (3rd in the world). Why were the logistical issues not thoroughly mapped out? This region is absolutely critical to this country's production of gasoline and yet noone thought about a hurricane and its affects on distribution?

This makes me wonder what other scenarios haven't been planned on.
A northern hurricane hitting DC or New York?
An earthquake in San Francisco?
A nuclear bomb going off at the NYSE?
Are there plans in place to deal quickly and decisively with the chaos that might insue? Is there some thought about the New Orleans's out there? The cities that are critical to a very important niche (in this case gasoline). I hope that these issues are addressed soon. Otherwise, the next event might be as a result of unexpected human planning rather than forseeable natural causes.

Tuesday, September 06, 2005

Roberts to be Chief Justice

Over the weekend there were several events that occurred that are going to create significant change in the Supreme Court. When Chief Justice William Rehnquist passed away late friday night it created an extra vacancy in the court. Because of the nomination process it actually could have created two vacancies at once, however. Had Bush decided to move Clarence Thomas to the Chief Justice role then Roberts would still be filling O'Connor's slot and someone would still need to fill Thomas's seat. This would have meant that 3 nominations were going on simultaneously.

Bush announced yesterday that he would nominate Roberts to the role of Chief Justice, sidestepping the third nomination fight, but creating a new set of problems. Rehnquist was, by far, the most conservative judge on the court. The role of Chief Justice functions as a first among equals kind of arrangement but it still wields some influence. It appears likely that Roberts is, at least, slightly to the left of Rehnquist and likely much farther to the left. I have repeatedly said that I believe he will turn out to be only a moderate conservative. That was fine for Republicans when it looked like he was replacing O'Connor and would move the court to the right. Now it appears that he is going to move the court, at least somewhat, to the left. He's also a young man and likely to be Chief Justice for 20 years or more. That means that Democrats are going to be meticulous in questioning if not outright hostile.


The other problem that this creates is that of replacing O'Connor. Bush dodged the, "You have to put a woman or minority on the bench" bullet once but I doubt he'll be able to do it again. Rightly or wrongly, many Americans, not just Liberals either, believe that diversity adds value to any process. I believe there is some truth in that, though I question how much. Whatever your feelings are on the subject, it seems increasingly likely that President Bush's choices will come from a list that will be light on White Men. Of all the names that have bandied about for the past two nominations there is one that intrigues me, Larry Thompson. Thompson was deputy Attorney General for President Bush and was the "highest ranking" African American in the Bush administration during the first term. He is currently Senior VP for PepsiCo which gives him a unique perspective coming into the courts. He's likely to be tough on crime and, at least somewhat, pro-business (though he's also worked on anti-corporate fraud task forces). Similar to Roberts, he has a very small paper trail to look through to determine his potential views. He also from somewhere outside the judiciary which will add further diversity to the court.

This should be an interesting couple months for the Bush administration.

Friday, September 02, 2005

Only in Cincinnati

The city that brought us the Bungles and Jerry Springer has a new player in its ridiculous tableua, Jeffre of 98 Degrees. Her's running for Mayor of the historic city. The article doesn't mention his position on anything but instead focuses on the songs that are going to be sung at a 98 degrees reunion "concert" being held to support Jeffre. Hollywood + Politics = Crappy Journalism, apparently.

Gas prices, part 2? The explanation.

I've been listening and watching like the rest of you for a few days and wanted to try to explain the gas price spike for those of you that might be convinced they're irrationally high. Several people, including many media commentators have made the superficially reasonable argument that A) Any increase in gas price didn't affect the gas already in the ground and therefore B) gas stations should therefore charge some reasonable profit margin based on the price they already paid for the gas they have.

This scenario would work if prices were relatively flat and non-volatile. In fact, during normal economic times (most of the 90s for example) this is the pricing model that was used by gas stations. It's why you used to see 4 different prices on 4 different gas stations at the same intersection.

However, to understand what's going on now you have to understand the logistical model that gas stations work under. Gas stations buy huge underground storage tanks that usually hold between 4 and 7 days worth of supply. They get these tanks filled up at regular intervals and pay bulk prices at the time of delivery. Prior to the crisis a gas station was paying approximately $2.20 per gallon... add the $.275 sales tax and a 2-4 cent profit margin and you've got your gas price. But remember... they weren't paying $2.20 per gallon... They were paying, say, $33,000 for 15,000 gallons... and that if prices rise to say $3.50 per barrel (or $52,500 per 15,000 gallons) then they have to be able to have $52,500 on hand to be able to buy their next shipment. If they don't then they have to borrow it.

What's that you say? Well, sure Jeff, but then they can just sell that shipment at $3.50 per gallon and make their money back. Well, that would be true if it was going to be a permanent price jump OR everyone was on the same shipping schedule OR the price jump was smaller. If ANY of those three things was true then we wouldn't see this spike like we're seeing. Unfortunately we're not.

If the prices were staying high then they could just go into debt a little now and raise their prices slowly over the course of a week up to the new level. The sticker shock wouldn't be as bad and they wouldn't lose any good will with their customers (well, they'd lose less anyways).

If everyone was on the same shipping schedule then gas stations could count on all the gas stations in their area to be in the same boat they were so they could be safe from being undercut. Unfortunately, they're not.

If the price jump was smaller then they could just suck it up and price their gas a couple cents higher then their neighbor and rely on customer loyalty and location to keep business coming. Customers don't often care about a 2 cent difference if it means they have to turn left and then make another left vs. making two rights. Customers WILL care if it's a 50 cent difference, however.

Those are the factors that have driven the price up. I'm not saying that there isn't some price gouging going on. But the notion that  gas stations should just, "Charge the price they paid" or that they should only charge "A couple cents more than the current price" is absurd.

Now, all that addresses gasoline costs at the pump. What I'm less certain of is the distributor services that get the gasoline to the gas stations... there seems like there's real Oligopoly potential there and I'm less familiar with that side of the industry.

Thursday, September 01, 2005

Intelligent Design?

How come noone is talking about the central premise of Intelligent
Design and how logically faulty it is? The idea that if we can't
explain something then the only possible explanation is for a higher
intelligence to have done it is pretty much ludicrous. We can't
explain how gravity influences object. Does that mean that we are
experiencing the "Hand of God" every day? 1,000 years ago astronomers
were unable to explain how planets and stars traversed such odd paths
through the sky. Later we found out it was because we were revolving
around the sun as well.

There are, literally, millions of things that cannot be explained by
society. The notion that we should use God as the explanation for this
one thing is a bit silly to me. I'm not speaking from the point of
view of an agnostic either. Rather I'm speaking from the point of view
of logic. Christians don't believe that God has an active hand in
everything that is unknown. They recognize that science, history and
psychology have limits to their understanding.

I've often felt that if there's a God then he must have left dinosaur
bones (as one example) for us to find. Their presence and structure
tells a story. If there's no divine force behind it then we're talking
about history. If there is a divine force behind it then God obviously
wants us to ask these questions. Evolutional theory could just as
easily be viewed as the question, "What story is God trying to tell
us?"

Oil, Gas and Jet Fuel! Oh My!

Most of us have already seen the price of gas spike. Here in Raleigh it rose about 40 cents in a day. Reports of gas over $5.00 in Atlanta have made the news and it's only a matter of time until we hear stories of shortages. My wife and I talked about delaying our big Jacksonville trip this weekend but we're going to go through with it anyways. Part of it is good old American defiance (This storm will not get the best of me!) and part of it is willful rationalization (My 20 gallons of gas isn't going to make a difference).

I think it's important to recognize that the reason we're in this mess so that we can avoid it in the future. Let's cut through the political bull and get to the real problem. The "oil" crisis isn't an "oil" crisis at all. To be sure, the rising price of oil has had an affect on the at the pump price but it's actually the lack of refining capacity that has caused the real problems. For approximately 5 years now, refineries have been operating at or near full capacity. Operating 24 hours a day and stopping only for needed maintenance, these refineries are pumping out petroleum products as fast as they can. Restricted from expansion by environmentalists, zoning and NIMBY protests it has been difficult if not impossible to create new refining capabilities at a pace that would guaranty some excess production. Most critics of the energy industry thought that that was OK. They were happy that refining could be expanded just fast enough that shortages weren't an issue. The problem is that the refining capacity is heavily concentrated in various regions and one of those regions is the gulf coast area. Approximately 11% of the US's refining capacity is offline. Normally that would have just led to higher prices but in this case we're going to see shortages.

In addition, many of the same things that have restricted refining capacity have also kept the infrastructure from having the redundancy level that it should have. Pipeline pumps are not working because of the storm and ports that would be excellent destinations for gasoline (Savannah, New York, etc.) aren't equipped for that kind of shipping. Gasoline has become America's guilty pleasure. We enjoy its abundance but we don't want to do the necessary things to permit it to remain abundant.

We're going to have to do alot of soul-searching in the next couple months about energy. How dependent are we on oil? How susceptible to disruption are we? Is nuclear energy a valid alternative source? Are we using solar, wind and hydroelectric energy in the most efficient ways possible? How close are we to having hydrogen fuel cells? It'll be interesting to see what those answers are.