Posts tagged ‘AA’

So Why Is Paul Krugman Now Defending the Privileges of the 0.1%?

Apparently Paul Krugman has weighed in on Amazon and has concluded that it has "too much power".

I just cannot believe progressives are falling into the trap of defending major publishers against Amazon.  People like Krugman who bash Amazon are effectively setting themselves up as defenders of a small oligarchy of entrenched publishers who have, until recently, done a very good job of making themselves the sole gatekeeper of who gets into print.  Amazon is breaking this age-old system down, in the same way that Uber is challenging taxi cartels and Tesla is challenging traditional auto dealer networks, and giving most everyone access to the book buyer.

The system that Krugman is defending is the system of the 1%.  Or 0.1%.  The current publishing system benefits about 200 major authors who are in the system and whose work has traditionally been spammed by the large publishers to every bookstore and news outlet.  When you walk into an airport book seller, how much diversity of books do you see on the front table?   You just know that you are going to see Sue Grafton's "AA is for Aardvark" and Janet Evanovich's "Fabulous Forty-Six".  The publishers have risk-return marketing incentives to push the 46th Stephanie Plum novel over trying any new author.

So while the traditional publishers flog the 0.1% of authors, Amazon has empowered 20,000 authors.   Those who sell just a few thousand copies (or fewer) of books have found an outlet in Amazon that never existed for them (as disclosure, I am one of those).  And writers who distribute mainly through Amazon get a far higher percentage of their book revenues than they ever would get from the traditional publishers.

So Amazon is helping the consumer (lower prices) and 99.9% of authors (better access and higher profits).  It is perhaps hurting the top 0.1% and a few century-old entrenched corporations.  So what doesn't Krugman like?

Penn Jillette Awesomeness

Most of those who read the online libertarian rags have seen this, but its awesome enough to require repitition

What makes me libertarian is what makes me an atheist -- I don't know. If I don't know, I don't believe. I don't know exactly how we got here, and I don't think anyone else does, either. We have some of the pieces of the puzzle and we'll get more, but I'm not going to use faith to fill in the gaps. I'm not going to believe things that TV hosts state without proof. I'll wait for real evidence and then I'll believe.

And I don't think anyone really knows how to help everyone. I don't even know what's best for me. Take my uncertainty about what's best for me and multiply that by every combination of the over 300 million people in the United States and I have no idea what the government should do.

President Obama sure looks and acts way smarter than me, but no one is 2 to the 300 millionth power times smarter than me. No one is even 2 to the 300 millionth times smarter than a squirrel. I sure don't know what to do about an AA+ rating and if we should live beyond our means and about compromise and sacrifice. I have no idea. I'm scared to death of being in debt. I was a street juggler and carny trash -- I couldn't get my debt limit raised, I couldn't even get a debt limit -- my only choice was to live within my means. That's all I understand from my experience, and that's not much.

It's amazing to me how many people think that voting to have the government give poor people money is compassion. Helping poor and suffering people is compassion. Voting for our government to use guns to give money to help poor and suffering people is immoral self-righteous bullying laziness.

People need to be fed, medicated, educated, clothed, and sheltered, and if we're compassionate we'll help them, but you get no moral credit for forcing other people to do what you think is right. There is great joy in helping people, but no joy in doing it at gunpoint.

Who is at the other end of the spectrum?  Well, how about Brad Delong arguing for a return to technocratic rule by our betters

America's best hope for sane technocratic governance required the elimination of the Republican Party from our political system as rapidly as possible.

Technocratic utopia is of course a mirage, a supreme act of hubris, that any group of people could have the incentives or information required to manage the world top-down for us.  If I told an environmentalists that I wanted ten of the smartest biologists in the world to manage the Amazon top-down and start changing the ratios of species and courses of rivers and such in order to better optimize the rain forest, they would say I was mad.   Any such attempt would lead to disaster (just see what smart management has done for our US forests).  But the same folks will blithely advocate for top-down control of human economic activity.  The same folks who reject top-down creationism in favor of the emergent order of evolution reject the emergent order of markets and human uncoerced interaction in favor of top-down command and control.

More on technocrats here and here

Kudos to Hunter-Douglas

I have a bunch of motorized shades on the high clerestory windows around my house (these are about 10 feet off the floor so impossible to manually open and close).  I had the ladder out this weekend and was replacing batteries when I found one of the battery cases was corroded beyond repair because a battery had leaked.

I checked the Hunter-Douglas web site, and found the parts request link.  It said that if they had the part in stock, they would send it to me for free.  That sounded like BS, and I wrote them that I was happy to be charged, I just wanted the part.

Today I got this email:

It's our pleasure to provide you with the replacement Duette PowerRise AA battery Wand requested and sending them to the address provided.  These parts are offered at no charge to our consumers.  You will receive your parts within 10 business days.

Awesome.

Great Moments in Marketing

Whose idea was it to rename Division I-AA college football as the "Football Championship Subdivision?"

Coyote's Law and 9/11

I am just amazed at how much bad science and ignorance gets pored into current 9/11 conspiracy theories.  For example, someone apparently did a small bit of research and found that structural steel melts at a higher temperature than aviation fuel burns.  From these two facts, each correct in the right context, comes the whole theory that the WTC towers came down in a controlled demolition rather than a collapse of fire-weakened structural members.  Of course, this is stupid. 

I did piping and boiler design for several years at a refinery.  Carbon steel, while it may not actually melt until you get it up to thousands of degrees, loses most of its structural strength between 700 and 1000 degrees(F), well below the temperatures in the WTC fires.  I lived with this frustrating fact every day, since many refinery processes crave higher temperatures.  Not only does steel's strength drop with higher temperatures, but it falls exponentially once it passes a certain threshold.  Some day soon I will post my refinery fire pictures, and show huge steel I-beam structures that collapsed from the heat of petroleum fires.  But here is a good reality check:  If skyscraper I-beams really won't fail at jet-fuel-fire temperatures, why do skyscraper builders waste millions of dollars insulating all the structural steel against building fires, which I can assure you burn much cooler than aviation fuel fires?

Beyond the basic science, most 9/11 conspiracy theories violate a couple of smell-tests.  The first and most obvious is Occam's razor.  Any theory that uses as a starting point a few small, minor uncertainties in events and explains these uncertainties with theories that have new, massive uncertainties in them is not necessarily wrong, but one has to treat it with huge dollops of skepticism.  As Jesse Walker described 9/11 cospiracy folks in Reason's Hit and Run, "They're the sort of people who will question whether a plane actually
hit the Pentagon on September 11, 2001, but won't question a theory
that can't explain just where the hijacked aircraft landed instead."

The other smell-test I use is a law I have dubbed Coyote's Law, and it goes like this:

When the same set of facts can be explained equally well by

  1. A massive conspiracy coordinated without a single leak between hundreds or even thousands of people    -OR -
  2. Sustained stupidity, confusion and/or incompetence

Assume stupidity.

Does anyone really believe that a Bush administration that can't keep a program involving a dozen people secret could keep the lid on a conspiracy this massive involving hundreds of people from any number of government agencies?  Isn't incompetence a more compelling answer here?

Alexander Cockburn thinks so, as quoted in Reason's Hit and Run:

One characteristic of the nuts is that they have a devout, albeit
preposterous belief in American efficiency, thus many of them start
with the racist premise that "Arabs in caves" weren't capable of the
mission. They believe that military systems work the way Pentagon press
flacks and aerospace salesmen say they should work. They believe that
at 8.14 am, when AA flight 11 switched off its radio and transponder,
an FAA flight controller should have called the National Military
Command center and NORAD. They believe, citing reverently (this is from
high priest Griffin) "the US Air Force's own website," that an F-15
could have intercepted AA flight 11 "by 8.24, and certainly no later
than 8.30."

They appear to have read no military history, which is too bad
because if they did they'd know that minutely planned operations -- let
alone responses to an unprecedented emergency -- screw up with
monotonous regularity, by reason of stupidity, cowardice, venality,
weather and all the other whims of providence....

August Bebel said anti-Semitism is the socialism of the fools. These
days the 9/11 conspiracy fever threatens to become the "socialism" of
the left, and the passe-partout of many libertarians.

By the way, can anyone tell me why the so called "reality-based" community, that so often criticizes the Right for theocratic attacks on science, is so quick to fall for this pseudo-scientific junk?

Update:  In case anyone cares, here is the temperature curve for the strength of carbon steel.

Steel

Update 2:  I am told by email that I will now be added to the long and growing list of those who are part of the conspiracy.  Cool!  Please make sure the CIA spells my name right on my payoff check.

Update3: And don't miss James Meigs here.

In every single case, we found that the
very facts used by conspiracy theorists to support their fantasies are
mistaken, misunderstood or deliberately falsified.

Here's one
example: Meyssan and hundreds of Web sites cite an eyewitness who said
the craft that hit the Pentagon looked "like a cruise missile with
wings." Here's what that witness, a Washington, D.C., broadcaster named
Mike Walter, actually told CNN: "I looked out my window and I
saw this plane, this jet, an American Airlines jet, coming. And I
thought, 'This doesn't add up. It's really low.' And I saw it. I mean,
it was like a cruise missile with wings. It went right there and
slammed right into the Pentagon."

We talked to Walter and,
like so many of the experts and witnesses widely quoted by conspiracy
theorists, he told us he is heartsick to see the way his words have
been twisted: "I struggle with the fact that my comments will forever
be taken out of context."

 

Plenty of Shame to Go Around

Last week, Milberg-Weiss and two of its partners were formally charged with bribery and fraud surround their aggressive pursuit of class-action lawsuits, often against companies with falling share prices.  Walter Olson helps describe in detail what was going on, but the short answer is that the firm, as many of us suspected for years, appears to have been generating class action suits against large companies mainly for the benefit of itself and the legal fees generated.  A few months ago, I questioned shareholder suits and their fundamental logic when I was guestblogging at Overlawyered.

So I am happy that this particular rock is finally being turned over.  However, there are substantial problems on the prosecution side of this as well.  The Justice department is using the abusive Thompson Memo guidelines to go after Milberg-Weiss.  Larry Ribstein is concerned with the firm death penalty approach being taken here that was used to bring down Arthur Anderson.

Milberg is a different story. The case seems to be based on the
alleged misconduct of a couple of partners. If the partners did what
they are accused of, they should go down. Moreover, the firm will have
earned fees under questionable circumstances and should bear civil
consequences for that. But the criminal indictment casts a shadow on
the entire firm that it will have a hard time surviving, given the need
to establish its credibility for courts and institutional investors in
the highly competitive class action industry. Moreover, unlike AA, it's
not clear the indictment reveals a continuing public policy problem,
given the post-PSLRA reliance on unbribable plaintiffs.

We (and I) may not like Milberg's business. But the class action
part of it was one enabled by legal rules. The right way to deal with
the problems of this business is to change the rules, as I've argued
for securities class actions in my Fraud on a Noisy Market.
When we criminally condemn firms like Milberg because we don't like
their business, we set a precedent for other firms in controversial
lines of work -- e.g., Drexel Burnham.

More seriously, the power to criminalize a firm puts a potent tool
in the government's hands to get the firm to cooperate in sacrificing
the rights of criminal defendants. Here the cure seems patently worse
the disease. The questions are no less in Milberg than in KPMG just
because Milberg was in an unpopular line of work.

The government tactic de jour, as outlined in the Thompson memo, is to threaten a large company with extinction, telling them they might get off the hook but only if they agree to throw a number of their employees to the wolves.  These steps include the unbelievable step of forcing companies to waive attorney client privilege, including privilege between any company-paid attorney and any employee.  Does anyone doubt that if the company who employs you was given the choice of having the government prosecute them or you, who they would choose?  In this context, Arthur Anderson should be commended for not sacrificing its employees for its own survival.  KPMG survived, because it chose to roll over on its employees.  I commented on many of the problems with the AA takedown here, and on the dangers of the Thompson Memo here and hereTom Kirkendall is all over the story.

Revisiting Arthur Anderson's Death Sentance

The firm of Arthur Anderson was put to death by government prosecutors.  Unlike human beings, Anderson was killed without ever receiving a trial, and was dead long before any appeal was mounted.  Many a media tear have been shed for Enron employees who lost their savings in the Enron 401-K, where they invested in Enron by choice, but I have seen few people sympathizing with the tens of thousands of people who lost their savings in the AA collapse, the vast vast majority of whom never touched the Enron account.

Mary Morrison has a nice analysis (pdf) of why Anderson was probably killed unfairly.  Her central argument is that the main fraud at Enron was perpetrated in the off-balance sheet special purpose entities, or SPE's, when third parties put up capital that the SPE called equity, but was in fact really a loan with a verbal (non-written) promise to repay by either the entity or Enron.  By disguising a loan as equity, and by by disgusing related parties as arms-length investors, Enron was able to avoid consolidation of the SPE's with its financial statements.

Ms. Morrison argues persuasively that since Anderson was not the auditor for any of these SPEs, it had no way to uncover the true nature of these sham financing agreements, since these SPEs were effectively different corporations with different auditors.  AA had to rely on signed statements by each deal's principals that the financing for the SPE was as described (which is standard practice in this type situation and is considered to represent adequate due dilligence).  Anderson had no way to know what was going on in the SPE's, and since the SPE's were separate legal entities from Enron, it had no legal right to poke around in these entities and of course no subpoena power.  It had no way to know about the hidden verbal second part of the financing agreements.  She argues AA was a victim of the fraud and of false statements by Enron and the SPE managers and investors. 

It is interesting to note that the prosecution of the Enron case is prosecuting Enron managers right at this minute for making such fraudulent statements to AA and for hiding the nature of the SPE's from AA.  In other words, the prosecution team that first gave AA the death penalty for allegedly conspiring with Enron to hide their problems is now prosecuting Enron managers on the legal theory that AA was innocent and duped by the managers, which was AA's defense before they were wiped out.

Tom Kirkendall has more on AA's martyrdom here.  He also continues his scary series of articles on prosecutorial abuse here.  The pressure brought to bear to prevent defense witnesses from testifying is particularly frightening.  When you read this, you are really left wondering how the auditors for the SPE's, which may include KPMG, escaped unscathed (in fact escaped richer, since they got their share of the now-defunct Anderson's clients) when Anderson was put to death.

Journalists and Enron

Remember Enron?  One of the aspects of the Enron case that the media latched on to was the document destruction at Arthur Anderson, destruction AA claims was routine but prosecutors and many in the media tried to classify as obstruction of justice.  So I thought this bit from Reason was interesting:

For decades, newsrooms have
shredded or thrown away notes some time after using them both to save space and
to prevent prosecutors like Fitzgerald from demanding them as part of an
investigation. This "routine expungement is a longstanding practice in many
news organizations," says Sandra Davidson, a professor of communications law at
the University of Missouri School of Journalism.

Hmmm, sounds familiar, huh?  The article goes on to point out the obvious - that the Sarbanes-Oxley provisions rushed into law and cheer-led by most journalists may come back to bite the media:

And for the press, the "obstruction of justice" provision [of Sarbanes-Oxley]
may cover more than just withholding notes from the government once an
investigation has begun. It may also endanger the common practice of routinely
destroying notes to protect anonymous sources.... Sarbanes-Oxley, because it
covers document destruction even "in contemplation" of a federal investigation,
could apply to the press's "routine expungement" practices, scholars say. "If
you're destroying documents to prevent them from being subpoenaed," says
Rotunda, "you have a risk that a vigorous prosecutor will think of that as
obstruction of justice."