October 15, 2005

Excerpt of the Day: Barone on the Domestic Auto Industry

Filed under: Business Moves,Economy — Tom @ 4:16 pm

Delphi is in bankruptcy and its cousin Visteon is hurting badly (note the $13.61 loss per share), as are parents General Motors and Ford.

Michael Barone (second item in his October 14 entry) wonders how this came to be:

How did this come to pass? Most of the leaders of the UAW and the Big Three companies who negotiated these generous contracts were very smart men, and they thought that the costs could be passed along to consumers. For the two decades immediately after World War II, they were, because the Big Three auto companies had no effective competition. Then sales of imported cars started rising. The Big Three executives can be criticized for not responding to this challenge. They, like the UAW, sought to wall themselves off from competition by getting the government to limit imports or to require certain percentages of “domestic content” in autos sold in the United States. But those policies triggered a response by Japanese, German, and ultimately Korean firms: They built plants in the United States, almost all of them with nonunion workforces. Pay was generous, but the costs imposed on companies were much less than those imposed by UAW-Big Three contracts. The workforces of the Big Three are much smaller than they once were, so the companies have many more retirees to provide for than active workers.

….. The lesson: In a dynamic economy, it’s a bad idea for individuals to depend entirely on one large corporation. Large corporations can get smaller.

Quite a few echoes from here almost six months ago.

This Time It’s REALLY Official (Hackett Will Run for US Senate Despite Sherrod Brown Candidacy)

Filed under: OH-02 US House — Tom @ 3:47 pm

Once more, with feeling.

His full membership in Moonbatville is now official. He has his own diary and, one would suppose, decoder ring.

The question of when he will fulfill his congressional campaign promise to return to Iraq still stands.

EU Rota Takes a Long Post Off of My To-Do List (Comparing US vs. EU Economies)

Filed under: Economy,MSM Biz/Other Ignorance — Tom @ 1:29 pm

He compares GDP between individual US States and various EU countries, and also notes the relative percentage ownership of various “creature comforts.” He also looks at how “the poor” in America somehow manage to so often have many of these creature comforts, and shows that America’s poor have more space to live in than the general population in most EU countries.

Yet the media worldwide like to portray America as a land where large numbers of us are one day’s pay away from financial disaster. Some indeed are, but large numbers? No.

Back in December 2000, George Will wrote about US attitudes:

“Americans quickly come to think of pleasures as entitlements.”

Yes, he was being harsh on us at the time, as the stock market was in the midst of a steep decline and the economy was into a slowdown no one wished to recognize (after all, George W. Bush’s inauguration was still a few weeks away). Yes, many Americans at the time were acting like “the crybaby of the Western world.” 911 cured most of that for most us.

But the point as it relates to this post is this: Nowhere in history has continued economic properity enabled a country to collectively think that way (turning “pleasures” into entitlements, which I would prefer to think of as “purchasing goals”) so quickly and so successfully. Wireless phones (one each for everyone in the family), cable TV (piped in to multiple TV sets), Internet access (high-speed, for multiple computers), lawn-care service, and many other things were indeed considered frills, even luxuries, not that many years ago, but are now they are almost typical.

Of course, the dangers of excessive materialism and selfishness exist in such a mindset. And certainly some have succumbed. But as a group, we have no reason to hang our heads:

In fact, Americans give twice as much as Europeans. Even discounting for self-serving tax shelters, trust funds and evangelical movements, real charity in America is huge. Only, the average American likes to send money directly rather than support a federal bureaucracy.”

So the deal here in The States is: As long as you participate in the economy in a meaningful way, and have just a bit of patience, chances are that you will be able to afford most, if not all, of these things, and more. Can anyone say that about the countries of Western Contintental Europe?

Postitivity: Gerry Faust

Filed under: Positivity — Tom @ 7:07 am

Today, as Notre Dame football attempts to break back into national prominence, I thought it would be worthwhile to see what’s up with Gerry Faust, one of the Fighting Irish’s least successful coaches.

You might expect him to be bitter after his experience in South Bend. If so, you would be wrong:


This Weekend’s Unanswered Questions (101505)

Filed under: Economy,Privacy/ID Theft,Taxes & Government,TWUQs — Tom @ 7:02 am

Another installment in a nearly-regular series of mysteries and pseudo-mysteries (usually 3-4) this inquiring mind would like to have answers for (some links included may require free registration):

QUESTION 1: Why didn’t someone think of this legal tactic sooner?

Installing spyware without permission is a form of trespassing (HT Instapundit):

A federal trial court in Chicago has ruled recently that the ancient legal doctrine of trespass to chattels (meaning trespass to personal property) applies to the interference caused to home computers by spyware.

….. In Sotelo v. DirectRevenue, the plaintiff filed a complaint against various defendants alleging that, without his consent, the defendants caused spyware to be downloaded onto his computer. In a nutshell, the plaintiff alleged that the spyware tracked his Internet use, invaded his privacy, and caused damage to his computer.

The plaintiff alleged the following five causes of action: trespass to chattels, consumer fraud, unjust enrichment, negligence and computer tampering, and he sought monetary damages and injunctive relief prohibiting the offending conduct.

….. The defendants were alleged to have secretly installed spyware by bundling it with other proper software that is available for free on the Internet, such as software for games. When a computer user installs a game, he allegedly and unknowingly downloads spyware.

….. First, the court found that this type of trespass cause action does not require loss of personal property. Instead, “interference” is sufficient. The court then took the leap to hold that interference with the use of a home computer is enough to maintain a claim for trespass to chattels.

Because the plaintiff’s complaint alleged that computer use had been hindered, slowed down and bombarded with pop-up advertisements, enough interference had been asserted for the case to proceed on this cause of action.

The court’s ruling, which merely gets the legal process in gear, was fine, but it should have gone further. It appears that if someone installs spyware that DOESN’T “hinder, slow, or bombard,” it appears that it might not be illegal, even if it tracks a person’s computer use and Internet visits. I believe the very act of trespassing onto a person’s computer by installing ANY program without the user’s express permission is a crime in and of itself based on current laws on the books, and that it should be prosecuted as such. This is no different from entering a person’s home without their permission.

QUESTION 2: Where’s the outrage over American companies helping dictators control their citizens?

The list of totalitarian regimes assisted by America’s high-tech censorship enablers, and the list of enablers, grows (HT Slashdot):

It should come as no surprise that the Internet in Myanmar, the southeast Asian state once known as Burma and in the iron grip of a military cabal for decades, is heavily filtered and carefully monitored.

But a new report from the OpenNet Initiative, a human rights project linking researchers from the University of Toronto, Harvard Law School and Cambridge University in Britain, once again raises tough questions about the use of filtering technologies – often developed by Western companies – by autocratic governments bent on controlling what their citizens see on the Web.

Myanmar “employs one of the most restrictive regimes of Internet filtering worldwide that we have studied,” said Ronald J. Deibert, a principal investigator for the OpenNet Initiative and the director of the Citizen Lab at the Munk Center for International Studies at the University of Toronto.

….. “There’s a cat-and-mouse game going on between states that seek to control the information environment and citizens who seek to speak freely online,” said John Palfrey, the director of Harvard Law School’s Berkman Center for Internet and Society and a researcher with the OpenNet Initiative. “Filtering technologies, and the way that they are implemented, are becoming more sophisticated.”

Not surprisingly, repressive governments have been eager buyers of those technologies.

The OpenNet study suggests that Myanmar, which has long been under American sanctions, including the 2003 Burmese Freedom and Democracy Act, has recently migrated from an open-source filtering technology to a proprietary system called Fortiguard, developed by Fortinet, in Sunnyvale, Calif.

That upgrade, which appears to have taken place as the OpenNet researchers were conducting their analysis, may have made censorship even more efficient and widespread than reflected in the new survey.

For its part, Fortinet says that it uses “a two-tier distribution model,” according to a company spokeswoman, Michelle Spolver, meaning that the company sells all of its products to resellers, who sell to end-users.

“Our intent is to fully comply with the law, and Fortinet does not condone doing business with U.S.-embargoed or sanctioned countries,” Ms. Spolver said.

Yet the Fortinet system appears to be hard at work in Myanmar.

….. “It’s related to the problems that Yahoo and Microsoft and others are facing in China,” Mr. Palfrey said, ” but here the issue is that these technology security companies are directly profiting from the censorship regime itself.”

While I find the “two degrees removed” argument of Fortinet disingenuous, I believe that Mr. Palfrey’s attempt to differentiate Fortinet’s “direct” profit from the supposedly “indirect” profits of a Yahoo! or Microsoft is a distinction without a meaningful difference.

QUESTION 3: When are we going to start worrying about who Alan Greenspan’s successor will be?

Larry Kudlow see signs of trouble in the current perceived front-runners. So do I:

Two fed names are very much in the running: Roger Ferguson and Donald Kohn. Both are well-credentialed and skilled professionals. But my fear is that they do not share the maestro’s model. I worry that they believe in the so-called Phillips curve, which stipulates a false trade-off between lower unemployment and rising inflation. In this view, rapid economic growth must be stopped by the central bank in order to curb inflation. Too many people working are somehow inflationary.

Additionally, I worry that Mr. Ferguson and Mr. Kohn prefer to raise tax rates rather than reduce them.

And this would undermine economic growth incentives to the detriment of jobs, stock markets, and overall prosperity.

My view here is not factual but opinion. I don’t know the President’s mind but I am hearing these names more and more. It is my great hope that Mr. Bush will choose the best person with the free market supply side model that has governed our economy so successfully, really over the past 25 years, ever since Ronald Reagan first launched it.

I also hope the new guy recognizes, as does Greenspan, despite press attempts to fudge his statements, that individual accounts represent the only realistic way to save Social Security.