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Author: Briggs

February 4, 2009 | 21 Comments

Obama’s salary cap seem like a good idea to you?

The Law of Unintended Consequences is set to strike again.

Obama et al. want to cap salaries at $500,000 at those companies that receive government “bailout” money. Why, the argument goes, should executives enrich themselves with government funds?

There is some moral force behind this position. Executives at failing companies should certainly not be rewarded for failing. We have all heard stories of CEOs who negotiate themselves ridiculous golden parachutes, which they receive regardless of company performance. The board members who allow such folly are idiots.

Undoubtedly, it is the bidding war for executive talent—the irrational fear that only this person can run the company—that partly leads to bloated compensation packages. Greed of board members who expect the same will be done for them when it’s their turn also contributes.

Some would like to go farther and cap salaries at every public company. This fits in with their idea of fairness. Limiting salaries for the Big Boys and Girls makes them more like us, they say.

Very well. Limit their salaries if you must. You will feel better, at least for a week or two. Until the government looks into its tax coffers and sees a sudden, and immense, drop in revenue.

This is because the top 1% richest people in the country pay about 40% of all taxes. Those 1% include the people receiving the “unfair” salaries. Take away their money and you necessarily take away their ability to pay taxes.

And since nobody will allow a reduction in services, that means the government must look elsewhere to pay itself. That must mean it will look to you. Your taxes will increase.

To be sure, there will be a host of other unintended consequences—the firms that sell or cater ro rich people will see a diminution in income and therefore employees, for example—but an immediate development is that you will have less money. Take from the rich, take also from the middle class, take also from you.

While it is true that some companies have grossly overpaid their executives, it is also the case that these companies, barring government intervention, will fail or do poorly or do worse than companies that pay their leaders rational salaries. Those competitors will succeed and the others will fail. If left alone.

If not left alone, if the government is allowed to meddle by, say, offering failing companies money just because they are failing, then it follows the government can set the terms of its gift. And if the companies agree, then the government has set itself up to increase its authority later, by increasing taxes and thus its control.

This is happening in New York City right now. Many people are thrilled with the idea that Wall Street bonuses have headed south. “Ha!” is the most common emotion. The rich have been screwed and isn’t that nice.

So nice that the mayor has been forced to cut its budget by more than a billion dollars, which is good. But the mayor has also proposed a host of new tax increases, including upping the sales tax which, needless to say, is a bigger bite for poorer people. See, those bonuses accounted for a large chunk of tax revenues, monies which now have to be made up elsewhere.

Thus, while the rich have become less rich, so will the rest of us, but at a faster rate. Perversely, wealth disparity might actually increase.

Let’s end with a cliche: be careful what you wish for.

February 3, 2009 | 5 Comments

Evidence the world isn’t completely going to hell

It isn’t all bad out there. There’s even grounds that the corporate sense of humor has returned, given that I saw Borders stack Anna Quindlen in its “Literature” section.

More importantly we have this fine young man, sent in by long-time reader David C. as a means of demonstrating that there is Hope For America.
A fine young man
At a glance we can see that this is a highly intelligent, undoubtedly perceptive, and uncommonly contemplative person. It is a sure bet that he is kind to animals, doesn’t smoke, eats properly, and loves his mother.

You might have missed just why this young man is so special, so I blew up a section of the picture for closer examination:
A fine new book

The book he is reading tells the whole story, doesn’t it?

February 2, 2009 | 20 Comments

I’m thinking of turning to crime

He is a man of good birth and excellent education, endowed by nature with a phenomenal mathematical faculty. At the age of twenty-one he wrote A Treatise on the Binomial Theorem1, which has had a European vogue. On the strength of it he won the mathematical chair at one of our smaller universities, and had, to all appearances, a most brilliant career before him.

But the man had hereditary tendencies of the most diabolical kind. A criminal strain ran in his blood, which, instead of being modified, was increased and rendered infinitely more dangerous by his extraordinary mental powers. Dark rumours gathered round him in the University town, and eventually he was compelled to resign his chair and come down to London…

So begins the description of Professor Moriarty, arch-nemesis of Sherlock Holmes, a man whose talents I wish to emulate. Moriarty, that is, not Holmes. After all, Moriarty was the “Napoleon of crime”. He was “a genius, a philosopher, an abstract thinker. He has a brain of the first order.” As P.G. Wodehouse said, “He is crime itself.” High praise; maybe none higher, and worthy enough for any man.

Why these reflections? It’s because the recent lessening of economical vitality throughout the world has forced to rethink my career. I have been made to contemplate just what I am good at, what skills I posses in high order, what I can do and what I cannot.

Part of what drives me is that I want to make a lasting impression on the world before I head towards my final regression to the mean. Celebrity through the traditional routes—movie star, rock singer, messiah, and so on—are closed to me because of my lack of beauty. Fame through academics is extraordinarily unlikely—there is no Nobel prize in statistics, for example. So what better than to become a master of crime? Most people haven’t thought of it, there is opportunity and constant employment, ample room for a man to prove himself.

It is thus not much of a decision at all. The only real question is: what type of crime? There are, of course, many possibilities.

Murder is out, mainly because there isn’t anybody I want to kill and, despite what you see in the movies, there isn’t much money in it. No chance for kidnapping, which is both despicable and unprofitable.

I would never sell drugs. Not because I have anything against them (though I have never, not even once, used an illegal drug), but because there is already a substantial organization devoted to this activity, an organization that discourages competition. Besides, the prohibition that drives drug sales may be weakening. We have a president who is an ex-coke addict, a previous president that was a drunk, and one before that that didn’t inhale weed. Since nobody seems much bothered by these proclivities, it might be only a small matter of time before the prohibition is lifted. Thus, there isn’t a bright future for this area of crime.

Blackmail would be acceptable, but it isn’t like you can make it a full-time job. It’s too opportunistic and random to rely on for a steady income.

Burglary, larceny, grand theft auto, and such like are possibilities, but I’m not especially lithe or athletic, detriments which limit the upside because you have to be in pretty good shape to steal any kind of material goods.

Anyway, all these nefarious activities are the sort you have henchmen carry out once you reach the loftier stages of felonious activity. One doesn’t want to unnecessarily soil one’s hands, nor, as the saying goes, take the fall for small change.

No, what you want is some kind of crime that the public isn’t especially eager to prosecute, an area which, if you get caught, you can be assured of sympathetic or pliable juries. The traditional area is politics, but in politics you have to be able to stomach meetings, an endless string of despair-inducing meetings. I avoid meetings like proper spelling2, so it has to be something different.

It was Clark Gable that reminded me of the perfect branch of crime. The grift.

In Hold Your Man (1933), Gable sees a wallet on the street and makes a grab for it, right at the same time another passerby does. Gable says “Mine” and so does the other guy. Neither suggests going to the police to turn the wallet in. They instead settle on opening it and splitting whatever is inside, which turns out to be only two bucks. And a ring. Gable says, “Hey, I know a girl who’d like that. You keep the two bucks and I’ll give you another five for the ring.” The other guy says no way, it might be worth a lot more than that.

They decide to hock the ring and split the cash, so they walk to a pawn shop which is nearby. A man is rubbing the window of the pawn shop down. Gable approaches him and asks him how much he can get for the ring. The pawn shop man pulls out one of those monocle-jewelry eyepieces and says, “Let’s move over here where there’s better light.” He finally announces that he’ll give them $200 for the ring; then he walks back toward the pawn shop.

Gable says he doesn’t want to get involved and offers to “sell” his share of the ring for fifty bucks. The man thinks it over and shows that he only has thirty with him, which Gable accepts saying, “After all, it’s found money.” He takes the money and walks off, while the man, smiling, hurries over to and into the pawn shop.

You guessed it. Gable meets up with the “pawn shop” man, who you will remember was never actually in the store, just hanging around outside. The ring is worth nothing and the man is out twenty-eight bucks. Gable and the “pawn shop” man split the take.

No crime would have been committed unless the man on the street decided to first abandon morality and steal the wallet himself. In the grift, the “victim” is just as guilty as the con man and is thus very unlikely to report the transgression, and even if he does, he’d have an uphill battle convincing the cops of his honesty.

Grifting is not the perfect branch of crime and there are risks, but if there were not, then there would no point in trying to become a fiendish mastermind of it. The fields has a rich history loaded with colorful scalawags, now remembered fondly. The Yellow Kid Weil, Doc Meriwether, Fats Levine, Charles Ponzi. A grifter is not so much of a criminal as a character, what he does is not so much illegal, it is more that he teaches his marks a lesson. As the Yellow Kid said, “Each of my victims had larceny in his heart.” You can’t—and shouldn’t—cheat an honest man.

So grifting it is. But what specialty?

The medical con has a long, respectable history. Chiropractry, homeopathy, are still going strong. Positions in medical “guru-ship” are always open (e.g. Deepak Chopra and others). But I work in a hospital already and they are full of sick people who are not always in the best of moods. I like to be around happy people, so the medical con is out.

I could always set up shop as a psychic. But there isn’t much point going down that street unless you can be a psychic to some celebrity so that you can generate strong word of mouth and garner free publicity. The advantage, of course, is that it’s completely legal and you can get away with just about anything. That’s the negative side, too, for someone looking to be a master of crime. There’s no challenge.

It would be dull trying to horn in on an internet scam, mostly because people are so familiar with Nigeria’s leading export. Too much work for too little return, here.

Journalism is an age-old choice. You can say anything you want, fool millions of people, have a ball. But the best you can do is sell a book or two, maybe land a spot on a shouting show. Tedious work, really. Worse, it’s all legal.

Banking has recently been publicly revealed to be one big con—Madoff, Lehman Brothers, etc. etc. People are currently suspicious of anything to do with finance, but I still think there’s room to maneuver here. And it would be fun taking money back from the folks who are partly responsible for my turning to crime.

I’m not finally settled on the specific branch of sin, so I’m open to suggestions. I’m also accepting investments in my future career. I expect returns no less than 50%. The time to act is now. Send cash only.

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1See also, Breaking the Law of Averages: Real-Life Probability and Statistics, “a book which ascends to such rarefied heights of pure mathematics that it is said that there was no man in the scientific press capable of criticising it.”

2See the same book.

January 30, 2009 | 13 Comments

Why I will never fly US Air

You will have heard by now that US Air has offered the Hudson crash survivors a full year’s worth of upgrades for their trouble. “Sorry you nearly died. Here’s a coupon for extra peanuts when next you fly.”

Well, you can argue that the crash was not entirely, or even any, of US Air’s fault, so it’s not clear that they owe the passengers much of anything beyond paying for their lost luggage and refunding their original ticket price (no word whether they have done that). A coupon to upgrade is a particularly stupid palliative; at least, it sounds lame.

An “upgrade”, after all, means you first have to give money to US Air for a lower-class ticket. They will then, if possible, offer you a slightly roomier seat if they have it. Don’t forget that most US Air flights are on aircraft that have only one class: there is nowhere to upgrade to most of the time. Plus, most people only fly maybe once or twice a year anyway, and it’s not clear how quickly these water-logged people will return to the air.

But this incident of ham-handedness by US Air is not the reason I will not ever, under any circumstances, fly them. This is.

About three years ago I bought a round-trip ticket to visit a friend in Knoxville, Tennessee. Before I left for the trip, I was offered a job interview at the University of Florida. It made sense to go their first and then, from Gainesville, head up to Knoxville and then home. So I had the university buy me a ticket from New York to Gainesville, and from there to Knoxville.

When it was time to leave Knoxville, I tried to get my boarding pass from the US Air agents. They said my ticket was canceled. Why? Because I did not show up for the flight down to Knoxville. I explained that this was true, that I had gone elsewhere, but here I am now; plus, I have given you nearly $400 for the ticket.

They insisted that the ticket was null. The agent was even angry with me for asking for my ticket. She (and a he) said, “When you buy a ticket with us, you are agreeing to a legally biding contract.” I said, OK, that must mean that you are agreeing to one, too, so what about the $400 I gave you? They said I “broke my contract” by not having them fly me—and thus costing them money in increased fuel usage and attention by flight staff. If anything, I said, I saved you money.

But they would not relent. I kept asking: “What do I get for giving you $400?” They never would answer. They next claimed that it was I that was cheating them! How? Because my buying a round-trip ticket two months in advance was a way to avoid paying a higher one-way fare on the day of travel.

They acknowledged that I did in fact live in New York and that that strategy made no sense, but they insisted that I was trying to cheat them. I again asked what was I getting for the $400 I had already given them. They responded in two ways. The first was to offer to sell me, for roughly $600, a new ticket to New York. When I said that that was idiotic, they then threatened to have me arrested for causing a disturbance. They even called over the airport police. The policeman stood listening to us go back and forth, and thank God, he never seemed interested in arresting me for trying to get my money back.

After about twenty minutes of this, I left, exasperated. I went to the Continental counter and bought a ticket there (about $600, too).

I understand that some airlines attempt to use various complex pricing models to squeeze more money out of certain classes of passengers, but excessive reliance of these models can end up costing them more money than they make. Other airlines, JetBlue for instance, does fine without these oddities.

In any case, US Air is obviously staffed by inflexible, uncaring, heard-hearted half wits. Which is why they can only offer “free” upgrades after one of their planes crash.