Saturday, October 05, 2002

West Coast Port Dispute

The Straits Times has a good summary of the dispute between the Longshoremen's union and the PMA (Pacific Maritime Association - association running ports on the west coast). This conflict first flared up in September, although the union's contract expired in July. The union says this is about jobs and worker safety (as described by this article from writers for the Socialist Worker). Management says it needs to implement new technologies that will stream-line the handling of containers arriving in the US.

The West Coast Waterfront Coalition (WCWC), a group of port customers founded in 2000, has testified before Congress in May 2001 in regards to the need for improved productivity at the west coast ports due to the increasing volume of trade between Asia and the US. The port operators are also under-pressure from Mexican container ports. Mexico has taken steps to privatize portions of their container shipping infrastructure (railroads, trucking, ports). With privatization those Mexican operations are improving their quality and cost, and under NAFTA there are minimal national boundaries to cargo arriving in Mexico's ports.

The port operations are filled with paper work...
Today, when a container arrives at the Port of Los Angeles, for instance, a union clerk checks the numbers on the container and obtains information about it from the driver.

The clerk then hands a slip of paper to the driver and orders the truck to a specific spot on a dock.

There, a forklift or crane operator loads the container on a ship, then sends the driver back out with another slip of paper that is handed to the clerk on departure.

With new equipment, all of that could be computerized.

As Mr Krugman would say this is not rocket-science...
It is the type of technology used every day by railroads and trucking companies, and not much different from bar codes and grocery-store scanning systems with which nearly every consumer is familiar.

There are a couple of problem's for the union. One is the potential loss of head-count for the union. Although it is true that if the volume of business stays flat and efficiency is increased jobs will be lost. However, there is the possibility (which unions never seem to explain) that increased efficiencies will lead to more business for the ports and possibly more workers. The other problem for the union is that the new tech may introduce a new type of employee, one that has to maintain this technology and one that has no relationship with the union. The union is thus being threatened on two fronts, a shrinking membership and loosing its monopoly on "Labor" in its struggle with "Management".

It is situations like these that make unions such rabid opponents of free-trade. Barring something cataclysmic free-trade will continue (God willing), and unions will lose this battle. The unions have a stale view of their role and the world, one that is founded on the static perspective bred by socialism. The unions, to survive, must serve their customer's interests not act solely to preserve their institutional influence. Just as businesses that do not supply products of good quality and low price will fail, so will unions.

Smoking Pays

A woman was awarded $28 billion in punitive damages from Phillip Morris. Smoking is becoming a good investment. Even in NYC, where smokes are $7/pack. In a few years you can cash in that nasty cough into a fat check.

Friday, October 04, 2002


Grant, by saying “Many are discouraged from investing in education and businesses because of the risk and shrinking reward the tax system offers them” you, I guess, are trying to give an example of some BAD things that come from high taxes, right?

I doubt, however, that Mr. Krugman is considering such a situation to be bad for the economy.

Let me explain his logic:

1.When people do not invest in education and businesses they become poorer (or less rich) than if they did. The more people do not invest in these things, the more there are poor people in the society, right?
2.You still think it is bad? No wonder you do. I bet most people think this way. But not Mr. Krugman, because the more poor people there are in the society, the more people SPEND ALL THEIR MONEY, and, according to our genius (unfortunately, not only to him) the better off is our economy (!).

How's that?

Andrew Sullivan, Krugman, Migrain

Normally, I try to avoid reading Paul Krugman's editorials because it has been proven to be a leading cause of migraines and seizures. But after Andrew Sullivan offered mild praise I asked my neighbor to keep the area clear while I read the article. Having recovered from my gyrations I would like to vent...

Mr Krugman is concerned about the economy, its not working well and he has a plan.

First, extend unemployment benefits, which are considerably less generous now than in the last recession; this will do double duty, helping some of the neediest while putting money into the hands of people who are likely to spend it.

Do people need money? Is it all about money? Of course, how obvious lets just give them money. Where is this mysterious money coming from? Is it being generated by efficient, entrepreneurial government employees, who then sprinkle it from ATM machines through-out the nation? The money Mr Krugman wants to distribute is being taken from the very same citizens the gov't is "helping", minus a sizeable cut for all the overhead that needs to keep the government working. What does Mr Krugman mean when he says "helping some of the neediest while putting money into the hands of people who are likely to spend it"? Is it because studies have shown that poor people spend all the money they have on the bare necessities of life, and therefore, stay poor. Or is it because poor people are stupid and spend all the money they get their hands on and therefore stay poor?

Having been poor, known lots of poor people, I would like to tell Mr Krugman to shove it. Poor people know they are poor, don't want to be poor and work hard to get richer. So when Mr Krugman and the gov't suggests lets tax the rich and give to the poor what you end up with is a "progressive tax schedule". A tax schedule where
if you make <$15,000 you pay 0%
if you make $15,000-$25,000 you pay 15%
if you make $25,000-$45,000 you pay 20%
if you make $45,000-$70,000 you pay 40%
if you make > $70,000 you pay 50%

Well all those stupid poor people see this and see that the chances of them getting richer get slimmer as they earn more money. Some of these stupid poor people opt to work for cash. Many are discouraged from investing in education and businesses because of the risk and shrinking reward the tax system offers them. This very same tax system also puts a crimp on gov't collections. Because, guess, what all those stupid poor people and smart rich people try and do find lots of ways to keep the gov't away from the money they have earned themselves. BTW, this is the basis for the Laffer Curve.

If Mr Krugman really wants to help his fellow citizens he might want to, oh I don't know, maybe flatten the tax schedule. This is also known as a "flat tax". Third world nations like Russia have done this and have been able for the first time to increase real tax receipts (quite an accomplishment in a country where the Black economy is estimated to be twice the size of the official economy). New Zealand has also flattened its taxes and the gov't doesn't know what to do with all the extra money, maybe their government will build a monument the entrepreneurial spirit of its citizens.

The next stage in Mr Krugman's strategy is ...

Second, provide aid to the states, which are in increasingly desperate fiscal straits. This will also do double duty, preventing harsh cuts in public services, with medical care for the poor the most likely target, at the same time that it boosts demand.

Yes, the states are in trouble. And like everybody else they have to tighten their belts. There is no way out of it. If they raise taxes they will push people out. Not all states have budget deficits because they have decided to spend their citizen's money on things like official poet laureates. States like NJ, NY, MA have problems and their current governors are not taking any serious actions to cut expenses. Some of the biggest expenses for states being the payrolls of its unionized labor force. Many of the states with the biggest fiscal problems also have huge state governments with powerful organized-labor constituencies. Why should citizens of Arizona, New Mexico subsidize the excesses of NJ and NY?

How is Mr Krugman going to pay for all this? He has it covered.

And how will we pay for all of this? You know the answer to that: Cancel tax cuts scheduled for the future. The economy needs stimulus now; it doesn't need tax cuts for the very affluent five years from now.

Well, I already went over what I thought about taxes above. But on top of flattening the tax schedule, I would like to suggest eliminating the cap-gains tax. You see many of these stupid-poor people have figured out that one of the ways to keep the gov't away from their money is buy starting/investing in businesses. Believe it or not, those silly poor-stupid Hispanics, Koreans, Chinese, who can barely make their way through the NY POST, much less the NY Times, have figured this out. So by eliminating the cap-gains tax all those stupid-poor people will start all sorts of whacky businesses (like selling fruit to vegetarians on street corners - what a wacky idea). And when they do this they will probably hire their kids, brothers, mothers, fathers.

I thought I was going to get through the article and escape unscathed until I got to the end of the article and read the following (you have been warned)...

This isn't rocket science. It's straightforward textbook economics, applied to our actual situation. It's also, I'm well aware, politically out of the question. But I think we're entitled to ask why.

I hope you have not been hurt too much by this sentence. If you and I are lucky this idea will wither like a weed sprayed by RoundUp. Otherwise, Paul Krugman will cheer as the tax-man will come and further impoverish you and yours as per Mr Krugman's "Economic Plan".

Sale at Bloomies

A friend had bought a condo in Brooklyn recently and is now looking for furniture, etc. A couple of days ago he wandered into Bloomingdales to check out rugs. Surprisingly, they were having a sale of GREAT magnitude. Rugs were 65%-75% off!!!

He found a rug. A lovely 8'x10' marked 65% off. The sales person crunches the numbers, "that's $3,900". OK, fine, a bit on the high side and the rug is not really what he was looking for. Found another rug, smaller, he had seen this same rug at Scott Jordan (which is somewhere just north of Canal) for $650. The sales person gets out the calculator at 65% off, "thats $800".

$800 !!! at 65% off. I knew Bloomies was expensive, but boy what a markup. And its not like Scott Jordan is in a warehouse in Queens, they are just a few blocks from Soho and Tribeca!!

Sharpton for President

Well everybody is a jitter waiting to see if the riotous righteous Reverend Al Sharpton will make a run for President. Yes ladies and gentleman, you just may have the privilege of voting for the man that has done for suckling at the teat of the welfare state what Ana Nicole Smith has done for realty TV shows.

Thursday, October 03, 2002


E-mail from a friend...

The MAIN thing U.S. differ(ed!) from U.S.S.R was not the presence of additional two letters in the later, but the different positions of the LAW in the societies.

1. U.S. was created on the premise that it is “governed by law, not by men",
2. while the U.S.S.R. was founded on the premise that the founding party knew better what the people needed than the people themselves knew.

For those who don't know, the soviet system of laws, except of several important items, was not worse, and probably, on some occasion batter, than the American one. (For example, a racism or racial segregation was unacceptable by law from the beginning of U.S.S.R., long before it was made against the law in U.S.) *)

The important exceptions were concern mostly the checks and balances of the Government and the law "regulating" private properties and private entrepreneurship.

However, U.S.S.R. had never been governed by law, but "by men". The directives from the party leaders were higher than any law. Direct orders from a local party leader to the local judge was binding to the later.

It seems that one of the two main political parties of the U.S. has a similar model in mind: they think that they know what is better for the people than the people themselves. Because of this knowledge, they think they have the right to change the lows without the proper procedure, even changing the rules during the game. This is very dangerous. Especially it is dangerous because the first targets are the election laws that are supposed to be part of the checks and balances. The judges who change the laws are violating the checks and balances written in the constitution. When they do it under the influence of a political party leaders, this brings U.S. one step closer to the U.S.S.R.

*) As an example, GOVERNMENTAL antisemitism as a limitation to hire Jews was a rule known to every H.R. worker from the Governmental directives, and existed in reality, but ... did not exist by law. As such, there were no means for a person to fight it: no judge would recognize the case as a case of racial preferences.

And there you have it.

Must Be Something in the Water, Part 2

These are the official candidates for US Senate from NJ, pending the NJ Supreme Courts whimsical definition of a fair election.

Robert G Torricelli - Democratic Party
Douglas R. Forrester - Republican Party
Ted Glick - Green Party
Elizabeth Macron - Libertarian Party
Gregory Pason - Socialist Party
Norman E. Wahner - NJ Conservative Party

Must Be Something in the Water

Both the Star Ledger and the Bergen Record think the NJ Supreme Court to let the Dem party to change the ballot is a good decision.

I am just stunned.

Stunned by the court's decision and reasoning. Decisions like this demonstrate more clearly than anything how low the reputation of courts has fallen, and shows no signs of making a recovery.

Stunned by the lack of respect for the law journalists are demonstrating.

Where is it written that we must have a Democrat and a Republican on the ballot? Last time I voted there were Libertarians, Communists, and a few other fringe parties.

This whole mest is just disgusting.

Luddites at the FT?

In the FT Richard Tomkins is not impressed with the internet (you may need to subscribe or register to read this).

His points are that science's success has not alleviated his fears...
Life is just one scare after another: genetically modified food, flesh-eating bacteria, anthrax, the Ebola virus, toxic mould, global warming. Almost everything is feared to be a carcinogen, conspiracy theories abound and depression has become an epidemic.

Superstition and religion is alive and well...
People have taken up Buddhist, Taoist and Hindu meditation techniques, cults are booming and neopaganism is rampant. By some estimates, the US witch population has increased tenfold in the past decade, to 500,000.

This is apparently because of...
The growth of scientific knowledge and the speed of technological change are now such that there is no earthly possibility of the culture of any society keeping pace with it, he told the association's Festival of Science last month. As a result, all kinds of social and cultural dislocations are emerging.

Apparently he was promised...
it was possible to believe we were heading towards utopia when science and technology were giving us such marvels as domestic electricity, the telephone, the motor car, the aeroplane, refrigeration, plastic, films, radio and television.

But he is still not living in bliss and is upset...
Instead, what happened? We got the internet. Well, thanks, but we are singularly unimpressed.

These sentiments touch on thought-trends in society over the role of science and religion. Some sociologists and anthropologists can explain that religion serves an important role in orgainizing human thought and therefore society. The species Homo Sapien is only 40,000 years old, religion in one form or another has been with us much of that time (maybe even with our ancestors). Science has been with us (loosely speaking) 2000 years (we'll give Plato the benefit of the doubt).

Our species relies on the group for its survival. Religion is one of the forces that binds us together. Religion has had 40,000 years of trial and error to come up with a moral framework that works. That does not mean that religion has reached its apogee, it will adapt to changing times. And as it evolves we see its hallmarks through our history. The US Constitution is an example of a hallmark in the evolution of religious thought.

The distinction between faithful, agnostic and atheist is very telling.

The faithful believe in the existence of God. They have no proof. God did not call them together and demostrated his omnipotence by getting them drunk on water.

The atheists believe in the non-existence of God. They have no proof. Nobody has shown them the mechanics of the universe, but these people tend to choose scientific authority over religious.

The agnostic is "One who believes that it is impossible to know whether there is a God". The agnostic position is currently indisputable. But does not alone serve a person in guiding them through the world. The true-agnostic has only one thought in his head. Which means he is probably sitting staring into space and under institutional care.

These definitions demonstrate that "religious" and "anti-religious" views both rely on faith. Faith is the "confident belief in the truth or value of an idea".

BTW, many have already pointed out the religious character of environmentalists, communists, nazis, and elvis-fans. Little wonder since people need something to help them guide their moral decisions.

Armed with this logic we can frame the new "science-faithful", "eco-faithful", and others as a evolutionary off-shoot in man's never ending pursuit for a better faith. For better or worse part of Homo-sapien's evolution is manifest in religion's evolution, not religion's absense.


On Saturday (Oct 4) Brazilians are going to the polls and they may end up electing Lula president in the first round of elections. Lula is a left-wing candidate, actually he is a Communist. He is an admirer of Castro and friend of Chavez (who is currently terrorizing his own constituents). Lula has run for president thrice before, this time he just might win.

When I first talked to a gentleman, who makes his money in Latin America, months ago, he assured me with a condescending grin that Lula would not win. He explained that Lula runs, all the Gringo's get nervous, than just before the election Brazilians snap out of it and vote for somebody else. Well needless to say that has not happened this time. Lula's campaign has been gaining strength to the point where he may win an outright (50%+) victory over his two other opponents.

Currently, the gentleman above is hoping Lula does not get enough votes in the first round, forcing a second round of elections between the first and second candidates. Presumably the constituents from all non-Lula candidates (most are right of Communist) will vote against Lula and Lula will lose again. But it does not look good.

I would like to point out that Lula's candidacy was following its usual track till the President in a far-off country called the United States of America decided to impose tariffs on the steel that Brazilians produce and sell to the citizens of the USA. Well apparently this did not sit too well with the Brazilians. The tariffs made their lives more difficult. After all poverty is bad for your health, much worse than smoking. The candidates to the right had a problem, how can their promises of economic growth through free-trade and deregulation make any kind of sense when one of Brazil's biggest trading partners treating them so poorly? The answer is that the free-trade folks are screwed.

Its funny how a president in the USA leans to the left and the people in Brazil vote a communist to power.

Very sad.

Spreading the Blame

The National Post's Terrence Corcoran is spreading the blame for the stock market's woe. I think he is right about the lack of leadership Bush showed with regard to the business scandals. The witch-hunt atmosphere is/was palpable. However, I am willing to excuse Bush since he had more important distractions.

But the other Republicans and pro-growth Democrates (there are a few here and there) never said a peep in opposition to the holier-than-thou rhetoric coming from the people's representatives as they spent tax payer money on hearings and investigations being carried out by several other government departments at the same time.

On this point there is no doubt that some of the market's woes is being caused by the witch-hunt by legislators (predominantly from the left-wing of the Democratic party) and the states' attorney generals. For the states this is turning into a shake down, using lawsuits against Merrill and Citi and whomever else to pad their budgets.

Wednesday, October 02, 2002


According to the FT, Elliot Spitzer (the DA in NYState) is negotiating new rules for the way investment banks do their business. Basically, Spitzer wants to quash any "conflict of interest" in the investment banking business. He is using Salomon Smith Barney's problems (aka Grubman) as a pretext for his crusade.

Disclaimer: I work mostly for Citigroup.

The "witch-hunt for greed" started in Washington (never mind the glass houses), but the states have really turned this into a mugging. The DA's are using their offices to shake down companies and building their political resumes with scalps. The sad part is that the companies don't want to fight. So far my favorite has turned out to be Martha Stewart, regardless whether she did anything wrong, at least she has not cow-towed to these hypocrites.

Torricelli Mystery

This whole Torch thing is very strange. The way it has played out tells something interesting about what is going on. The whole thing started 1-2 months back as the candidates started to rev up. Forrester's campaign focused on one issue : the Torch is a crook. Sure Forrester had billboards on the Turnpike touting lower taxes, but all you heard on the radio and tv was about the Torch.

Pretty soon the Torch had to do something about it, the timing of the Senate panel did not help. He made this ridiculous speech on TV asking for forgiveness. Damage was done. Than the courts forced the release of memo's used in Chang's trial (the guy who ribed/curried-favor with Torricelli). That did not help. I overheard a couple of conversations during my commute with people laughing at this "joker".

Than the news broke that he may be pulling out, than he did pull out. How exciting. Whats weird is why?

He is not an idiot, and is trying to play this to his advantage against his own party is my best guess. As was pointed out in Political Wire, the Dem party has two options 1. go to court (big surprise) 2. the Torch will retire and McGreevy (Dem Governor) can appoint Springstein, if he wants, to be Senator.

The fact that the Dems were not prepared with a candidate tells me that the party did not ask him to step aside (as other Bloggers suggested/theorized). So the Torch did this on his own. I think he knows his chances of putting the party against a wall are better than winning the election. If the party loses in court they will need the Torch to resign for the Gov to appoint a replacement. So there it is...

What is the party going to do for the Torch to make it worth his while?


Stealing the old-fashioned way, by crying about competition to mommy (read that President Bush). The WSJ Review Outlook points out that manufacturers are changing plans and planning new capacity outside the US to avoid government's interference with their need for steel. Another job well done by government managing the economy.

Companies that make wire out of raw steel wire rod are finding that they can't pass along their higher costs to their customers, which make consumer products. Some of these consumer businesses are moving production overseas, where costs are cheaper; this means that the wire makers who supply them are losing valuable customers and may be driven out of business. American Spring Wire, with plants in Ohio, Illinois and Texas, has shed 200 jobs in two years. Overall, while some 2,000 jobs are protected in steel wire-rod production, upward of 100,000 jobs that depend on competitively priced wire and steel wire rod are at risk.

The Pres has done a pretty good job with foreign policy (its too early to say for sure, there is plenty more to do and plenty more time to screw up). But his economic policy is just daft.

Economic Mistakes
1. Tariffs on Steel
2. Maintained tariffs on textiles from Pakistan. Lowering them would have been a win-win situation for US and Pakistan, and show
the ordinary Pakistani the rewards of trading with the US.
3. The tax-cut was a waste of time. It was like sending out a social security check to everybody in the country. Not that I object to the government getting less, but this was a disgusting way of doing it.

Mr Drezner has some other interesting points.

Tuesday, October 01, 2002

Dems Reps

Hi-Ho Hi-Ho its off to court we go!!!
You know kids its really not important who gets the most votes, whats important is who counts the votes.

The most successful party of the Left has never seemed more vicious or lost to me. Maybe this is just my my long-term memory loss talking. They are behaving like an animals. There seems to be no coherent practical direction (kind of like my post). Last night the Toriccelli adds attacked his candidate (Forrester) because he was against gun-control and against senior drug benefit.

Not that the Republicans have a clear cut message. Forrester has been running on one issue: the Torch is a crook. Its worked great so far. But he does not come out and say "the government must not limit your rights to bear-arms" or "the government must not expand the socialized medical sector, doing so will drive costs higher and quality of care lower". More importantly he does not get in-front of the issue by proposing the positive alternative views of these two issues "the right to bear-arms is essential to preventing crime and terrorism" and "the medicaid/medicare programs are unsustainable and need to be 'reformed' ".

Republicans seem to lack a spine on these important issues. We just had an election in Jersey where the Republican candidate Schundler received minimal support for party. Bush did not come out and support him. Schundler was written off. This guy is bright, he has a proven record, and was talking shrinking government, lowering taxes (direct and indirect). He got 43% of the vote with little support from the party. This is from a state that is leaning left?

If the Republicans don't get their act together, they deserve to lose. Personally, I pin my hopes on groups like the Club For Growth. Over the long term the two parties seem to be loosing their power. Maybe I'm just slow in noticing this, but the power will be in interest groups like Unions. With today's technology a much wider array of groups can be formed and much quicker and cheaper than has been possible before.

Torricelli is gone. The biggest joke is what a shlock job the Senate did on him. The guy who bribed him is in jail and he is giving a speech in a hotel.

Monday, September 30, 2002

This should be fun.