I think the existence of Donald Sterling makes the case that the European football club system of league construction (the freewheeling, free-enterprising “to play in the top leagues you have to make an effort”) is superior on multiple points of argument to the American system of league construction (tightly controlled and defined membership).

Sterling’s profit model – which essentially consists of doing the bare minimum necessary to compete in the league – simply wouldn’t fly in European leagues because the Clippers, in a Euro-style system, would eventually sink to whatever second tier existed, at which point the Sterling model fails because the expense of running a team as large as the Clippers wouldn’t be satisfied by the revenues generated by a second-tier team. Admittedly, Sterling could then rejigger his system to do even less and allow the Clippers to do the bare minimum to compete at second-tier – but then they’d eventually slip to third-tier, and at that point your worth-hundreds-of-millions-team is not actually worth hundreds of millions any more, and you’ve run a profitable enterprise into the ground.

Discuss.

You know, the “hey, A Christmas Carol is total crap because Scrooge is actually the hero” argument is quite possibly the bottom of the barrel as far as libertarian thought goes: taking Dickens’ classic story about the essential emptiness of living only for profit and greed and completely missing the goddamned point isn’t something that should surprise me when it shows up on Mises.org (unofficial motto: “Sure, The State Paid For All the Stuff That Made This Website Possible, But That Doesn’t Mean We Wouldn’t Have Created A Massive International Information Network By Ourselves If We’d Been Given The Chance”) written by a bell curver, and yet it does.

Consider this part.

More notorious even than his miserly ways are Scrooge’s cynical words. “Are there no prisons,” he jibes when solicited for charity, “and the Union workhouses?”

Not necessarily. As Scrooge observes, he supports those institutions with his taxes. Already forced to help those who can’t or won’t help themselves, it is not unreasonable for him to balk at volunteering additional funds for their extra comfort.

What Levin does here is conveniently forget to include the response to Scrooge’s question:

“Many can’t go there; and many would rather die.”

What this serves as is an indictment of Levin’s entire philosophy. The role of social welfare is traditionally condemned in libertarian circles: better that social welfare be provided by private agencies, say they, as it is in the best interests of all concerned to prevent desperation and abject poverty as much as possible. Well, Scrooge is given a chance to contribute towards the social welfare and he says “go screw.” Apparently, in Scrooge’s eyes, the welfare policies enacted by Victorian-era England (which is, I dunno, a socialist utopian paradise all of a sudden) deny the need for private charity even when clearly insufficient, and give the lie to the theory of private social welfare systems so beloved by the right.

It goes downhill from there. Really. It’s kind of sad.

Once again, Sarah Palin writes a column saying that the secret to American energy independence is drilling for oil.

I’ve said it before and I’ll say it again: the fact that Palin claims energy issues as her particular sphere of expertise just amazes me, and similarly it amazes me that nobody important bothers to point out that, on her professed area of expertise, she is a goddamned idiot.

To be fair, for quite possibly the first time ever, Palin actually includes a few numbers in her screed: specifically, domestic American petroleum consumption. Unfortunately, this does not get her a cookie, because if you’re going to talk numbers about consumption and then say “well we gots to drill more of them wells you betcha,” you need to link it to that other number, which is production.

The United States has an estimated 21 billion barrels of remaining uncollected oil reserves.¹ Were it all to become suddenly available tomorrow, the USA’s consumption rate of 19.5 million barrels per day wouldn’t allow it to last long. This is because a consumption rate of 19.5 million barrels per day is also a consumption rate of 7.1 billion barrels per year. So basically, the United States has nearly three years’ worth of oil reserves handy at its current consumption rate.

Of course, that figure isn’t really that meaningful either, because there is still no magic straw given to us by a friendly genie² that gets all the oil out. Oil wells do not show up overnight. Even if the United States government expedited the leasing process, the oil companies still have to drill exploratory wells, develop a production plan from that exploration, and then install production wells. That’s a six-to-nine-year process to reach basic production.

And even when you reach basic production, you don’t reach peak production that quickly any more, because all the easily drilled oil deposits are now empty. Oil is sometimes in the ground in a big single pool; the Ghawar field in Saudi Arabia, for example, was mostly a big-ass single pool. But the big-pool deposits are mostly gone, so you can’t just stick a well into the ground and get all the oil from a single field. What’s left in the ground at this point is the harder-to-reach stuff: far-offshore fields (which take more than six to nine years to successfully explore and drill, one might add) and land-based fields which are kind of like Styrofoam except instead of air pockets there are oil pockets. These do not produce oil at “traditional” production rates. It will be in the neighborhood of fifteen years before anybody sees more than a relative dribble.

And finally, unless Sarah Palin plans to nationalize the oil industry like some sort of socialist or something, that oil is just going to go onto the free market anyway, where all the other countries in the world – like, say, India and China – will compete for its purchase. And frankly, at this point they can more easily afford it than the United States can.

So to sum up: Sarah Palin’s “drill” plan involves ignoring how much oil is actually in the ground, how quickly it can be drilled, how easily it can be accessed, and the basic reality of the global oil market. And this is where she thinks she is an expert.

Dear Rachel Maddow: please, just take all of this, put your Rachel Maddow style on it, and do a five-minute segment. You can’t tell me you don’t want to make fun of Sarah Palin again. You would be lying if you said that.

1. CIA World Factbook, following from World Oil and Oil and Gas Journal. British Petroleum’s most recent publicly available statistical analysis – in 2007 – puts it at 30 billion, but most consider that an outlier. [↩]
2. Genies hate the Middle East for bottling them, so clearly they would be on America’s side. Well, if they existed, anyway. [↩]

SUV sales as share of total auto market are rising.

Because gas prices will never be high again!

So you’ve been worried about GM’s financial outlook, eh? That GM bailout got you down?

Well, how about GE?

It appears my investment strategy of “be broke-ass” is finally paying off for me!

HOW YOU LIKE ME NOW, YOU PRUDENT INVESTMENT-HAVIN’ MOTHAFUCKAS? HOW YOU LIKE ME NOW?

EDIT: Just to clarify as some people have complained: the financial crisis isn’t hitting me or my family directly in terms of investment, but capital availability issues have the potential to royally fuck me and many, many people I know over but hard. Rest assured that this post contains exactly zero schadenfreude.

This post over at Ezra Klein’s, explaining some more reasons why letting GM go bankrupt is a bad idea.

In response to my post about the misdirected-at-best union strategies in regards to auto industry woes in Ontario, SilverMoonWolf writes:

I may not be as informed as you, but I can draw opinion on what I do know about this and the whole “bailout” buzz word now.

When a horse breaks its leg, you don’t coddle it and tend to its weakness as it will NEVER get better. You shoot it so something better can take its place.

The problem is that General Motors is not a horse. You can get a new horse quite easily at the horse store, because there are lots of horses. General Motors, on the other hand, is the ninth-largest corporation in the world. It employs a quarter of a million people in the United States directly and god knows how many indirectly. If GM went out of business tomorrow, the other auto companies can’t pick up the slack because they’re hurting too.¹ This is to say nothing of the fact that GM’s primary income stream is not in fact selling their cars, but the car loans they arrange so that people can buy their cars – want to see what happens when a giant creditor goes bankrupt?²

Shooting GM in the head simply isn’t an option: it’s too big and its loss would do too much damage. I’ve seen economists suggest that the loss of GM alone could swing the current American recession into a full-blown depression. You can say “well, we shouldn’t have companies that are too big to fail,” and that’s a valid point of view, but that doesn’t make the economic-violence plan an equally valid answer in response to the current crisis because you can’t do, say, a Ma Bell-style corporate megasplit if said corporation is suddenly nonexistent.

Moreover, shooting GM in the head isn’t even a good comparative idea, because unlike the horse, there’s no reason GM can’t be saved. Its decline was the result of accounting culture taking over the management of the company from the engineering culture that ran it up until the mid-70s (which is also the reason most of their cars are comparatively shitty nowadays). Affecting the management style and roster of GM is something the federal government can do with a bailout. After all, a bailout is, in its purest essence, a loan – and any loan officer worth their salt can require reasonable preconditions for that loan.³

Finally, it’s worth noting that the scandal of the Wall Street buyouts from a rational perspective isn’t that investment firms went buck-wild, because the government let them go buck-wild and voters in turn didn’t bother paying attention and let the government let the firms go buck-wild. The Wall Street meltdown is the result of negligence in all quarters, pure and simple, and nobody has any excuse because really smart people with economics degrees were saying “hey, guys, this is going to end up fucking us in the ass” years ago and nobody paid attention.

No, the scandal of the Wall Street buyouts has been the response from all concerned, from Henry Paulsen initially offering what amounted to a blank cheque to Wall Street firms refusing to trim fat as they got their paydays to the public’s offended face that these investment firms weren’t fiscally responsible when nobody was paying attention (and remember, the average member of the American public has a negative savings rate nowadays, so who the hell are they to complain about others’ fiscal negligence)? It’s the combination of offended self-importance and sheer ignorance of the problems at hand exhibited by just about everybody, be they in charge or not, that irritates me. It’s one of the reasons that Kel Mitchell’s “FIX IT!” analyst character on Saturday Night Live is so painfully unfunny – it’s too on target.⁴

1. The Japanese companies are hurting less because they planned for this in the long run, but there are limits to one’s ability to plan. [↩]
2. Hint: you really, really don’t. [↩]
3. Also note that the history of government bailouts of the private sector, at least in the United States, is one of eventual government profit as the loans are eventually paid off. [↩]
4. The other reasons, of course, being that Kel Mitchell is not good, and the writers writing the character are not good. [↩]

Matthew Yglesias is right to point out that bailing out car companies when they are making a product that at present is fundamentally unsuited to future profit generation is stupid, but he and his commenters largely place the blame on GM’s corporate culture. Let’s be honest here: speaking as a lefty (and a strongly pro-labour lefty at that), the unions own this idiotic idea just as strongly as management does.

As an Ontarian, I am deeply, deeply familiar with CAW president Buzz Hargrove’s seemingly inexhaustible ability to spew stupid bullshit, but Hargrove’s bullshit is not only stupid but short-sighted: every solution he has boils down to “the government should give auto workers money,” and he’s happy with that strategy regardless of whether that money goes directly to auto workers or to auto companies who will trickle it down to said auto workers. It’s almost like the right wing decided they needed the most stereotypical left-wing labour boss they could imagine, then went to a lab and had Buzz Hargrove grown in a tube.

Of course, the Ontario government particularly shouldn’t give auto companies money to maintain their operations in Ontario, because there is simply not enough money in the coffers to do that successfully, because people are buying less cars. They are especially buying less of the shitty gas guzzlers that for years have been the mainstay of Ontario’s auto production (the list of GM and Ford cars manufactured in Ontario reads like a Consumer’s Digest warning list). Consumer advocates have been saying for years that Ontario manufacturing needed to diversify before things got bad, but Buzz Hargrove wasn’t interested in that because skilled manufacturers might not necessarily be interested in joining the CAW if they weren’t making cars.

Now, things are bad, and it’s going to take a massive effort to turn Ontario’s economy around, and government investment will be vitally necessary to do it. But giving money to car companies, especially in Ontario’s case, is just a bad idea.

…it looks like it’s time to short Washington Mutual.

Canadians should be thankful for the essentially risk-averse nature of Canadian banks. If anything gets us through this shitpile, it’s going to be that.

George W. Bush and John McCain claim that offshore drilling will reduce oil prices because of a psychological benefit. If we think oil will get cheaper, then it will get cheaper.

Even if this is true (which it probably isn’t, because commodities traders are not idiots), the problem with attempting to manage oil prices by instilling mass belief in something other than the stark reality of decreasing oil supply is that when people realize that the drilling isn’t going to help, the likely effect is overreaction in the opposite direction as the market panics to reassert itself.

Or, more simply, it is like this:

“U.S. motorists are risking rampant drug violence in Mexico to drive over the border and fill their tanks with cheap Mexican fuel, some even coming to blows over gas shortages and long queues.”

Read the whole thing.

The Liberal Party released their carbon taxation plan today, and I’d say it’s… okay. It does a lot of what a carbon taxation scheme should, of course, but it misses two major points.

Firstly, there’s no tax on gasoline. I understand that gasoline taxes are unpopular, but the lack of a gas tax in a carbon taxation plan when you are taxing literally every other fossil fuel seems like staggering pandering to me. I don’t even think a gas tax is unsellable – say “look, we’re going to tax gas, yes, but the gas taxes are going to be specifically redirected into a fund to improve public transportation so that in five years you can take a hybrid bus from Chilliwack to the Bay of Fundy or from your home to your grandma’s back yard.” The longer you let people think that their old lifestyles are sustainable – and they just aren’t – the harder it’s going to be to tell them the truth.

Secondly, the tax is revenue-neutral, erring on the side of costing a bit of money. I understand that the Liberals want to make carbon taxation as painless as possible by lowering income taxes at the same time. But this idea is flawed for two reasons:

1.) We desperately need massive energy infrastructure investment. Canada has too much oil power generation as it is; we need to replace that with solar, tidal and wind ASAP, and additional revenues created by a carbon tax in the short term could help fund these initiatives.

2.) Carbon taxation in the short run is revenue neutral, but in the long run it is presumably revenue-lowering because given time everybody will find ecological ways to avoid paying the tax. Which is good, but that means eventually you have to jack income taxes back up to compensate. I don’t look forward to the squabbling when that happens.

Still, on the whole, it’s an all-right plan, a solid B+ effort. Could have been much, much worse.

Also: 350.

I was arguing about this at law school today with some fellow students, and I am genuinely unsure of the answer, so I am throwing it to the masses. Hello, masses!

So we were arguing about taxation to begin with, which in turn led to the various costs of living in the United States and Canada as a measure of comparison purposes – me maintaining that they were higher in the USA, someone else that they were higher in Canada. Now, there’s no such thing as a “median cost of living” – well, I suppose there is, but due to regional variation it’s kind of useless as a statistic. So we turned to consumer price indexes.

Consumer price indexes, for those who do not know (and I want everybody to at least be able to follow the thrust of the conversation) are a method of tracking increasing costs of items as a way of partially measuring cost of living. You set a “year zero” – say, 1984. You buy $100 worth of goods in that era with 1984 dollars. Then you track the costs both backwards and forwards – so how much does it cost to buy that same $100 cost of goods in 1974, and 1994, and 1964, and 2004, and so on and so forth.

Now, when we were Googling for this sort of information, we couldn’t find a good CPI for both countries for the same year zero, so – and this is where the argument begins – I suggested instead using math to create a new year zero on the larger (American) CPI for comparison purposes. Now, I’m not going to pretend that this is exactly scholarly and I wouldn’t use it for a paper, but if, say, you want to turn 1996 into your year zero, and in 1996 it took $153 to buy whatever you bought in the previous year zero for $100, then it follows that if you divide every figure on the table by 1.53 you’ll get at least a rough estimate, suitable for back-of-the-envelope type calculation, of what things look like with 1996 as a year zero.

Needless to say, my friends disagreed. They also kind of disagreed with the concept of cross-comparing CPIs from Canada and the United States because you couldn’t guarantee that the same items would be in the $100 “basket.” My counterargument here is that Canada and the United States, in terms of culture and especially merchandise, are at least relatively equivalent in our shopping patterns – not perfectly homogenous to be sure, but close enough, as they say, for government work. Again, I’m just talking for back-of-the-envelope here, not for any real study.

So, my question is – which of us is right? Or right-er?

Specifically, Canada is totally getting the shaft when it comes to mobile phone costs. Check out those graphs. We’re worse than Rwanda, for crissake.

This is just another example of how Canadian politicians’ rhetoric about wanting to make Canadian industry competitive are all too often just empty rhetoric. See also: Canada’s continuing paucity of funding for scientific research, especially at the university level. It really annoys the shit out of me no end.

Well, Marvel Comics dropped the hammer, and the interblogs are abuzz over their fancy announcement of offering comics online. And rightly so, considering this is something many of us – certainly including me – have agitated for for quite some time.

Things about their model are good and others are not. They’re only dipping their toe in the pool right now (2,500 comics is a drop in the pond, and “twenty new issues every week” doesn’t even cover a week’s worth of new releases). That makes sense considering how bold a move this is, but it’s disappointing to see such a small initial offering being treated as a holy-shit big deal. Wisely, it looks like Marvel will be offering a portion of the content for free in the first-hit-is-always-free method.

And the reader? Yeah, it could be awesome, but I’m not big on a web-based Flash app for something of this nature. I understand that Marvel probably doesn’t want to go big with their own downloadable application expressly for browsing comics stored at a central database – at least not yet – but again, it’s a case of “I understand their caution; it’s just irritating” because this sort of move is now long overdue for the Big Two. (And heck, Dark Horse and Image too, although they don’t have the capital required to really do this on their own. If Marvel is smart, as soon as is possible they’ll be offering other companies the opportunity to E-publish their comics on Marvel’s comic database.) It’s a shame, though, because I was hoping that when this happened, there’d be an option for e-reader tablets.

But the most important element of this model, the one that was absolutely key for it to be a going concern, was pricing. And in this respect, Marvel has done exactly the right thing by offering a relatively cheap subscription model for access to the database. Ten bucks a month for unlimited access, five if you go longterm? That’s a book and a half per month. If they get, say, a mere five thousand subscribers (and five thousand is a very conservative number for initial signups for this service, I think), that’s fifty thousand dollars a month in revenue, which is more than Marvel takes home from most of their individual mid-sales-range comics.

I know people wanted “iTunes for comics,” but reasonably that just wasn’t likely at a price people were willing to pay and would likely require some sort of at least minor protection (a la iTunes) preventing people from easily trading comics online amongst themselves. And, once that was in place, Marvel would also have to figure out a way from killing the secondary market entirely (and likely with it a large number of comics stores).

Bottom line? The service is priced right once the library expands, it can be expanded as Marvel sees fit, and the technical issues (such as comics availability and browser interface) can be tinkered with easily enough when necessary. It’s not quite a slam dunk, but I don’t think this ends up being anything but a winner for Marvel in the long run.

Via United Hollywood, your viral video/writer’s strike mention of the day.

I really kind of suspect that the studios had no idea what they were getting into when they forced a strike.

Found in a Pyjamas Media column’s comments:

I’m not sure you do. Hollywood has made utter garbage at least 90% of the time for at least 10 years, if not more. I will provide just one factoid. In the last two decades, more actresses have won the academy award for portraying a prostitute than for portraying any other profession. Why do current Hollywood writers have such a obsession with prostitution?

First off, I went and checked, because I was pretty sure that “factoid” was not actually, like, true. And of course it isn’t. Only one woman has won an Academy Award in the last twenty years for portraying a prostitute, and it’s kind of a stretch to say that because the woman in question was Charlize Theron for her work as Aileen Wuornos in Monster, and the most distinguishing aspect of the character was not that she was a prostitute but that she was a serial killer.

In comparison: two cops (Helen McDormand in Fargo and Jodie Foster in The Silence of the Lambs) and three rich British ladies (Helen Mirren in The Queen, Emma Thompson in Howard’s End, and Gwyneth Paltrow in Shakespeare In Love). WHY does Hollywood continue to glamourize cops and rich British ladies? WHY?

Secondly, though, I wanted to just make my general disgust with this line of argument known. You can argue against the strike in good faith (and Brad Fox has done so, both here in the comments and at his own joint), even though I won’t agree with you. But the line of argument advanced above – and it’s easily the majority opinion among those (mostly conservative) commenters is “I don’t like it so they don’t deserve anything.”

And that’s just abhorrent. It doesn’t matter if you think Hollywood makes a lot of crap; they also make about a trillion dollars a year in revenue, so the question of whether you personally are invested in the product is moot. It’s both stupid and insulting to think that you have to like a business to determine whether or not its practices are sound.

The question is simple: do writers, having helped to produce a product that is financially successful, deserve a share of that financial success? Answer that question. Jesus, how is this hard?

Let me be plain as possible before I start giving you links:

The WGA writers’ strike is practically the definition of a just strike. This is a battle over corporations earning billions of dollars and unfairly refusing to give those most responsible for the creation of the content which mandates their profits their proper due.

Most screenwriters aren’t rich. Yes, the average salary of a Hollywood screenwriter is $200,000. However, that figure is overinflated by the high end of rich screenwriters, the tiny minority who make millions per picture, the Tina Feys and the Steve Carells. (Both of whom, I might add, are striking.) The median salary for a screenwriter is about twenty thousand dollars. So this isn’t a battle between “billionaires and millionaires,” much like the last actors’ strike, where everybody focused on Leonardo DiCaprio’s salary and ignored the fact that most actors, stunningly enough, are not Leonardo DiCaprio.

So, links:

- John August explains the basics.
- John Rogers lays out some excellent metaphor (”that tiger went tiger“) and some mild prediction.
- Ken Levine provides some perspective.
- Rick Schimpf quotes Micah Wright’s now-infamous “Screwed Over For Spongebob” post and adds some commentary. Also, he provides a link to this informative Youtube.
- An account of what happened at the eleventh-hour negotiations.
- Chris Kelly explains residuals.
- Related to the previous item: Mark Evanier explains why residuals aren’t just fair but also encourage writers to perform better.
- Brian K. Vaughn weighs in.
- And finally, Craig Newmark asks the pressing question on everybody’s minds.

Holy crap, the loonie is at a buck-seven USD. Economic analysts are saying that a jump to $1.10 isn’t just feasible but indeed near-term likely.

The Federal Reserve is just looking at this point for an excuse to cut interest rates, but it has to realize that doing so would be, you know, bad. Like drawing reasonable comparisons to Weimar-era Germany level of bad. Like oil-prices-well-over-$150 bad. And while I quite anticipate being able to buy things from Amazon this Christmas with what essentially amounts to about a fifteen-percent-off coupon, having Americans forced to cart around stacks of $10,000 bills in wheelbarrows to buy loaves of bread is something, on balance, I would prefer to avoid.