From the desk of Jane Galt:

It's about time

Finally, something worthwhile to do with my old textbooks -- send them to needy universities in Iraq!

I confess I'm a bit confused, though . . . do they really need textbooks written in English? Because if they do, well, I've got a whole bunch of marketing textbooks they can have . . .

From the desk of Jane Galt:

Question of the day

Will violence get better, get worse, or stay the same after June 30th?

There's something to be said for each: it could get better, because the new government will drain legitimacy from the attack; it could stay the same, because the new government is seen as a puppet of the US; or it could get worse, as violent factions struggle for power.

I'm betting, however, that it gets better.

Not, mind you, because I have any insight into the hearts and minds of the Iraqi people, or of the terrorists who are attacking them. The reason I think it will get better is that the terrorists seem so gosh darned determined to derail the handover. This suggests to me that they believe that the handover will significantly curtail their ability to operate in Iraq.

Moreover, the frequency and nature of the attacks, what I believe military people call the operational tempo, has significantly accelerated in the past three months. Now, this could be because the outraged populace is rising up in protest -- but outraged populaces generally do not rise up in protest with car bombs. It seems more likely to me that this is an all out push against the Americans, for strategic, as well as fundraising and recruitment reasons, that cannot be indefinitely sustained.

Of course, there's always the possibility that while one violent group doesn't want the handover to happen, an entirely different violent group is merely biding its time until it does, so that they can begin their bid for control.

So I'm throwing the comments open to my readers. What do y'all think? Up, down or the same?

From the desk of Jane Galt:

Notes from the housing bubble

It breaks your heart:

ANAHEIM, Calif. - For years, Ray and Shahrazad Daneshi sought to buy a home, only to be told that they did not earn enough to qualify for a mortgage. But they recently managed to buy a small house in the shadow of Disneyland for $360,000 - six times their annual income - thanks to a lender who allowed them to borrow the entire value of the home, with no down payment.

"We will not be going to any movies or eating out at restaurants," said Mr. Daneshi, a self-employed wedding photographer who came here from Iran in 1988. "But in two years, the house will be worth a lot more and we will have something to show for it."

The Daneshis' purchase underscores the new, ever-optimistic economics of home buying. A kaleidoscopic array of mortgages for people with little cash or overstretched budgets has enabled families of modest income to take on debt that once would have been beyond their reach. As long as new home buyers could count on rock-bottom interest rates and housing values were going nowhere but up, this seemed to be a virtuous circle.

But now, with the Federal Reserve expected to embark on a series of interest rate increases starting with its meeting on June 30, some experts worry that recent first-time buyers could find easy home ownership a lot harder on their wallets, possibly causing housing prices to wobble in some high-price markets.

With the Daneshis, for example, rising interest rates on the two adjustable-rate mortgages they took out to buy their house would mean that their monthly payment of $2,500 - already more half their monthly income - could go up substantially in two years. Mr. Daneshi realizes that, but is unconcerned.

"Why worry?" he said, adding that he believes rising home prices will help him obtain a better loan deal by then.

Mr Daneshi doesn't seem to realise that when mortgage rates go up, housing prices will go down, because people judge their purchases less by the purchase price than the size of the monthly payment. He will realise this eventually, of course, but probably not until he's in foreclosure.

From the desk of Jane Galt:

Gentleman Jack

More people whose sex lives I don't want to hear about. I mean, why was L'affaire Lewinsky all over the Sunday talk shows? Did anyone have anything new to add? Uh-uh. Can't we just drop it, already?

Now this guy Jack Ryan who's running for the Senate in Illinois has had his divorce records unsealed at the request of ABC News and the Chicago Tribune, revealing that he tried to get his ex-wife to engage in . . . ahem . . . some rather non-traditional behaviour in front of a large group of strangers. The unsealing apparently took place despite the fact that both parties to the divorce requested that the records be kept sealed.

What the hell? What on earth was "the public's right to know" here? His behaviour was legal, if unsavoury, and has, as far as I can tell, absolutely no relevant bearing on his candidacy, unless he's campaigning on a platform of outlawing exhibitionism. What sort of shoddy impasse has the media reached if it's reduced to seeking sensation in the unsealing of court records from the nastiest, most intensely personal records most people ever had -- records which are generally sealed for quite good reason, since there are often, as there were in this case, children who could be badly hurt by the opening of the record of the breakdown of their parents' marriage.

Perhaps I've gotten it wrong. If so, could my readers please enlighten me? What was the reasoning behind unsealing these records, and why was it vital to the public interest that this man's marital difficulties be smeared across the headlines?

From the desk of Jane Galt:

Discouraging foreign students?

Over on Talking Points Memo, guest-blogger John Judis argues that the US is doing itself a disservice by placing restrictions on foreign students:

During the Cold War, American officials discovered that one of the best ways to promote democratic capitalism at the expense of communism was by luring foreign students to American colleges. Some of these foreign graduates returned home to become the leaders of reform movements in their countries. Others stayed in the United States and contributed their skills to the great postwar boom. The same reasoning that prevailed during the Cold War should prevail during the war on terror. The United States should be eager, one would imagine, to expose students from abroad to democracy and religious pluralism, as well as to take advantage of their skills. But not the Bush administration and the Republican Congress. They are oblivious to any foreign policy measures that aren't repressive. Their response to anti-Americanism is to wall off America from its potential critics.

In the wake of September 11, the Bush administration tightened visa rules for foreign students. Prospective students have had to pay a $100 fee to file a visa application. And it has taken up to eight months to process the applications. As a result, foreign applications to American colleges have plummeted. According to the Financial Times, graduate school applications have declined 32 percent this year. "The word seems to be out that you can't get a visa to come and study in the US, so why bother," said Liz Reisburg, who helps recruit foreign MBAs.

Undoubtedly, some aspects of this new visa program were unavoidable in the light of how the September 11 terrorists entered the country. But one would hope that the Bush administration would be trying to streamline the program, and to reduce the delays, so that students would once against be drawn to American universities, as they were during the high-tech boom of the 1990s. Instead, the administration is on the verge of putting still another and greater obstacle in the face of foreign students.

The legislation establishing the Department of Homeland Security included a provision creating "Sevis." a database for keeping track of international students. Each student would have to register with the Sevis. Last October, the Department of Homeland Security proposed that in addition to the $100 visa fee, every prospective student would have to pay another $100 to fund Sevis. The payment would have to be through a credit card or dollars. Universities have not objected to the program itself; but they have objected strenuously to imposing another fee on foreign applicants. "Having yet another thing students have to do to come to the US that they don't have to do in any other part of the world will drive more people away at a time when enrollments are declining," said one official from the Association of International Educators.

I agree with Mr Judis that we should be trying to open our universities to as many students, from as many places, as possible. But the focus on the fee is ludicrous. The reason university administrations love foreign students, particularly graduate students, so much is that they are generally ineligible for financial aid or in-state tuition; they pay full freight, and generally have to provide guarantees up front that they have sufficient assets to pay for their entire course before they are allowed to start. Anyone who can afford university fees can pay a couple hundred bucks to the government for visa processing.

It seems to me, from the limited sample I know, that foreign students are far more worried about the visa difficulties than the money. At my sister's graduation from Duke's public policy school in May, I talked to several students who hadn't seen their families in two years because of visa issues; many of those parents were unable to attend their kid's graduation. Many others spoke of the arduous process of obtaining a visa, in which many people who had gained admission to a programme couldn't attend because they had been unable to get their visa processed in time.

Of course, the reason this is true is that the US is giving much closer scrutiny to student visa applicants, because that's how a number of the 9/11 hijackers entered the country--and the INS notoriously failed to check that they were actually attending school. Fixing this problem will be much more difficult than getting rid of a couple of fees, but if we really want to increase student enrollment, it's the only effective course.

From the desk of Jane Galt:

Air Hysteria

If you haven't been following the financial travails of Air America, the liberal radio station where Al Franken is the big draw, you may not know about the serious irregularities now coming to light. According to the Wall Street Journal, Air America was not pulled off the air in Chicago and LA because of (as some supporters claimed) perfidious backstabbing by a station-owner who was a secret member of the Vast Right Wing Conspiracy. No, it was as the station-owner claimed: Air America was not paying its bills. And the reason it was not paying its bills was that the original owners appear to have . . . er . . . creatively misdescribed the state of their finances when they were raising money and starting operations. To wit, it is alleged that they claimed to have raised $30 million, enough to operate for several years, rather than the $6 million they actually had raised, which they blew threw by the first couple of weeks on the air.

Now the guy with the original idea, Sheldon Drobny, is apparently trying to stage an asset sale to a new entity in order to salvage the operation. This is tricky, because it leaves the new entity vulnerable to charges of setting up a "sham transaction" in order to bilk Air America's creditors. Professor Bainbridge has an excellent discussion of the issues involved.

From the desk of Jane Galt:

Kevin Drum says that the current slow pace of employment recovery is (sigh) the fault of those poor-plundering, labour-looting Republicans.

In the past — shown in the blue bars — everyone benefited when the economy recovered from a recession. Wages went up, total compensation (including things like health insurance) went up, and corporate profits went up. Sure, corporate profits did better than workers' wages, but everybody got a decent slice of the pie.

In the Bush recovery — shown in the red bars — workers have gotten almost nothing while corporate profits have skyrocketed. The Republican establishment must be cackling in its single malt scotch.

But how can anyone defend this? Easy. The free market extremists at the top of the modern Republican party argue that economic growth is caused by the risk-taking executives of Fortune 5000 companies, and therefore they deserve the benefits of that growth. Worker bees don't make any contribution — they just work — so why should they get anything?

Treating labor like a commodity is a morally bankrupt policy, but it's one that's become an epidemic in the Republican party: they don't just want a bigger piece of the pie anymore, they want the whole pie. Surely it's past time for George Bush's beloved "real America" to revolt over this cynical treatment from conservative elitists?

This is not the first time I've heard this from the left. But it's perhaps the weakest of their grievances against the Republicans in government. Presumably they know this, since they rarely posit the mechanism by which the Bush administration has caused this unprecedented phenomenon.

Oh, some of the more dimwitted commenters have suggested that it's because Bush is gutting labour protections. But this is ludicrous. The recovery under the Reagan administration came after some real gutting -- Reagan had just fired the entire Air Traffic Controller's union, signalling unambiguously that there was A New Sheriff In Town. Jobs and wages nonetheless recovered quite nicely.

Under Clinton, on the other hand, who was presumably more to the labour theorists' liking, job growth was much, much slower -- remember the "jobless recovery"? It lasted well into Clinton's first term.

Our recovery has been even more "jobless" -- though the economic contraction ended in November 2001, jobs have only started to outpace workforce growth this year. And a far more plausible explanation for why employment recovery is increasingly lagging economic recovery has been put forth by Erica Groshen and Simon Potter of the Fed. While in past recessions, they argue, most job loss was cyclical--companies laid off workers when demand was slack, and rehired them when business picked up--much more of the change in recent recessions has been structural: companies permanently restructure when times get tough, and workers must find jobs in other companies or industries, which takes longer. For why this is true, one may argue any number of things: the increase in services, which are generally performed by salaried employees, and where productivity is harder to measure, making companies more reluctant to hire; increasing mechanisation, which makes it attractive to replace workers with machinery when times are tough; global competition, which has damaged the bargaining power of previously feather-bedding unions by putting entire industries in jeopardy (for a right-wing version of this, try environmentalists' war on old-line industries); the faster pace of innovation, which reduces the life cycle of industries; financial market speculation, which leads to boom-bust patterns . . .

Really, the candidates are endless. But none of them seem to have much to do with the Bush administration, or the House or the Senate for that matter.

With demand for labour recovering much more slowly than in previous recessions, we would expect to see exactly what we are seeing: with less bargaining power, workers are taking a smaller share of the growing pie.

But this is not a permanent phenomenon. At the end of the Clinton administration, workers were getting a slightly disproportionately large share of the pie (if you define stock options as compensation). Tight labour markets meant that starting fast food workers were getting well above the minimum wage, plus hiring bonuses, in many markets. Members of my previous profession, technology workers, are still struggling to get over the belief that they are naturally entitled to six-figure incomes that increase 10% a year if you stay put and 15-30% a year if you change jobs.

This was not an equilibrium either. Over time, returns to capital and returns to labour are remarkably stable; roughly 1/3 of the income in society goes to capital, while 2/3 is the return to labour. Now that job growth is picking up, wage growth wil almost certainlyl not be far behind. This will be true whether George W. Bush or John F. Kerry is president. And if the former, will those currently accusing him of opressing the worker be looking for conspiracy theories to explain why wages are growing faster than profits?

From the desk of Jane Galt:

Master of the Obvious

It's one of those things that makes you slap your forehead and go "of course!" while wondering why the hell no one else ever though of it -- Cronaca points to an article that suggestst the reason that so many different cultures all over the world have legends about a great flood is that they were struggling to explain the presence of marine fossils in mountains and plains.

From the desk of Jane Galt:

Bylines? We don't need no stinking bylines!

You may not have noticed, but the reporters at the Wall Street Journal are going on a byline strike: withholding their bylines, while still performing their contractually obligated writing. As this Slate article outlines, this is a move of dubious effectiveness. There's a sort of wistful wishfulness even to the union leaders arguing in favour of it:

Union leaders claim that readers notice when bylines are missing, especially at major papers like the Washington Post and the Wall Street Journal, where reporters and columnists often have big names and a sizable portion of readers follow the press. As for those readers who don't know the difference between David Brooks and David Broder, they may still notice the aesthetic adjustment that removing bylines requires—without them, the paper doesn't look the same. The hope is that the absence of bylines will signal to the reader that there is labor trouble at the paper.

If only. As far as I can tell, the only people who notice bylines (other than op-ed columnists, and often not even those) are other journalists.

Quick test: before you read any further, think of an article you've read in The Economist in the last three months that was really memorable. Then try as hard as you can to remember the name of the guy who wrote it.

Continue reading "Bylines? We don't need no stinking bylines!"

From the desk of Jane Galt:

Quis custodiet ipsos custodes?

Google has been Google-bombed.

From the desk of Jane Galt:

More on Diebold's alleged voting fraud

I'm more than willing to be convinced that Diebold are a bunch of drooling incompetents who shouldn't be allowed within two hundred miles of our voting machines. I'm just inherently very suspicious of conspiracy theories. I mean, have you ever tried to organise a surprise party? If you can't get 30 people to keep a little champagne-and-carvel-cake on the QT, how on earthy do you think the CEO of Diebold is going to get a couple hundred staff members to stay mum about their secret plot to steal the election?

From the desk of Jane Galt:

Two cool things

Offered up by a coworker, who has been inspired by the post below to adopt the pseudonum "Mr Victor Dieboldly", for your delection.

The top 100 entities by GDP, half of which are corporations, not countries.

And the two things about practically everything.

From the desk of Jane Galt:

Comment of the day

The conspiracy theories about Diebold voting machines, that dastardly Republican plot to steal the next election, have gotten pretty wild. Commenter Occam's Beard had much to say about this:

Any hint of voting fraud involving their machines would kill Diebold's business. Dead. Not just voting machines, but ATMs, the lot. Trust is their business, and no one would trust them thereafter with their votes, much less their money. And they can be certain that the MoveOn.orgs, Streisands, and Moores of this world would be watching for anything that could even remotely be construed as inculpatory. If I were CEO, I wouldn't allow the company to get into the voting business, not in the circumstances.

And what would they gain by "colluding" in fixing an election? George Bush's re-election? That'll probably happen anyway. Do they have it so good now with Bush in office, and would have it so bad later, if Kerry were to be elected? I doubt that either outcome would make much difference to their prospects. Banks would still buy ATMs, and Diebold would prosper, either way.

Diebold executives - as individuals, not a faceless corporation - would be risking prosecution, prison time, and losing their reputations, fortunes, and business futures to achieve something that most likely will take place anyway (and actually doesn't confer much advantage on them in any case). Does that make sense? Would you do that?

(As an aside, think about the mechanics of the fix. The CEO sidles down to the programmers (half of whom are probably Deaniacs) and suggests putting a little "feature" into the software, and counts on none of them blabbing. Or does he come in on Saturday night and write some code on his own? Please.)

The whole thing is irrational. At this point, if that's the best case that opponents can make against Diebold, I'm sorry to say that I think they're nutjobs.

I heartily concur. It's mildly embarassing to listen to otherwise intelligent peoples say, when asked for evidence of this conspiracy, that the head of Diebold is a Republican, and expect listeners to be satisfied that quod erad demonstrandum. Huh? Given the party system in this country, it's almost certain that, if we have voting machines, the head of the company making the voting machines is going to be either

a) a Republican
b) a Democrat

Now, would Democrats making these allegations actually take seriously Republicans who said that it was inappropriate to have a Democratic-headed firm make the machines, because no one could possibly resist the temptation to fix the vote? Or are we supposed to contract out our voting machines abroad? Undoubtedly the Chinese Central Committee would be happy to oversee the provision of Republican-free voting gear.

Another commenter points out that we already have "paperless machines" (mechanical ones from around the first world war) in New York City, and no one seems to be suspicious that the overwhelming monopoly Democrats have on local offices.

From the desk of Jane Galt:

Freelance law enforcment

I'm generally sceptical of anarcho-capitalist claims that spontaneous order can replace government law enforcement. But here's one case where it seems to be working, at least in adjunct to the cops: volunteers are helping attack the Nigerian spammers.

As a page at the Web site of the Nigerian Embassy in Washington warns, "Don't be fooled! Many have lost money!! If it sounds too good to be true, it is not true!!!"

Now, however, an ad hoc militia of self-styled counterscammers on several continents is taking the fight directly to the thieves. Aiming to outwit the swindlers, they invent elaborate and often outrageous identities (Venus de Milo, Lord Vader) under which they engage the con men, trying to humiliate them and, more important, waste the grifters' time and resources.

They then chronicle the exploits, documented by elaborate e-mail exchanges, at sites like Scamorama (www.scamorama.com). They also gather financial and technical information about the fraud artists, who are sometimes part of broader criminal networks, and refer their findings to law enforcement officials. Some of the antifraud efforts even appear to straddle the bounds of legality: disabling fake bank Web sites used to dupe the unwitting, or breaking into swindlers' e-mail accounts to warn victims already on the hook.

Part vigilante patrol, part neighborhood watch, part comedy troupe, the counterscammers are trying to beat the thieves of the Internet at their own game. And they certainly appear to enjoy doing it.

From the desk of Jane Galt:

Here we go again

Nostalgic for 2000? Wishing we could have some more of those exciting courtroom scenes that kept us all on edge for weeks?

Well, it looks like 2000 may soon be in re-runs:

The wealthy president of a Brazilian university is bankrolling an initiative to end Colorado's winner-take-all presidential electoral system.

J. Jorge Klor de Alva is the major donor to The People's Choice for President - a nonprofit group seeking voters' permission to award Colorado's Electoral College votes proportionally as a percentage of the statewide popular vote.

For example, a candidate who wins 60 percent at the polls could snag five of the state's nine electoral votes, leaving the remaining four to a candidate who wins 40 percent on Election Day.

The group has begun to collect signatures; it needs 67,799 to get the measure on the ballot.

If approved Nov. 2, the constitutional amendment would affect this year's choice for president by immediately permitting the division of Colorado electoral votes. And it would mark the most ambitious Electoral College reform yet in the nation.

Democrats are understandably excited about this idea because it would split a probable Republican bloc in two. If this passes, and the election is close, we can expect extensive litigation on at least two grounds: as James Joyner points out, it probably violates federal laws against post-facto election rules, and it also requires a rather creative interpretation of the word "legislature", which the Supreme Court interpreted pretty narrowly in Florida as I understand it.

Interestingly, the rule actually wouldn't be good for Colorado, which, because its Republican majority is so narrow, gets a lot of attention (and pork!) from Presidential candidates, all of which will vanish into the woodwork if this law passes, because Colorado will then have fewer electoral votes in play than Delaware. There's a reason that the only states that have so far passed such laws are Maine and Nebraska, both of which, IIRC, are losing population.