Todd of Volokh on Kelo and economics. I guess I don't get it. Or maybe, considering that everyone on Volokh seems to be on the side of the dissent, I do get it. Here's what I wrote:

...could someone explain why the ownership structure is so important? Eg., schools, roads, and post offices, normally public, are okay, but housing, shopping, office space, and parks, often private, are not? But schools, roads, and post offices could all be privately owned and operated, just as parks and offices could be public. Or is it the lack of public use? But is there no possible public interest in shopping or living in the new development, or the possibility of getting a job at Pfizer? I guess I'm having a hard time distinguishing the artificial creation of holdout power from landing Pfizer (who could, after all, have gone somewhere else) vs. the artificial creation of holdout power in building a road from A to B (after all, the people in A could go somewhere else too). There's something I'm missing here...

From the WSJ, courtesy Billmon

Rice, in Egypt, said that the U.S. is no longer willing to tolerate repressive regimes to bolster regional stability. She flew next to Saudi Arabia.

Ouch! Note to self: never, ever, piss off a journalist.


ObBike: rear tire blew out yesterday, the first failure that required finding a phone. Bought the most expensive replacement, a Specialized Armadillo, in the hopes of avoiding a repeat. And that should work, as far as the rear tire goes, but what will break next? Replacing a POS piecemeal is not the way to build a reliable commute -- what I'd really like is a bike made by Toyota.

Solstice. Rode my bike today. I could write about my nifty insights about suspension design and rolling losses (pneumatic tires vs. spring and damper -- the tire compresses every revolution but the comparable spring only compresses on bumps), or I could report on the new battery pack ('bout the same as the old one, unfortunately). I won't though. Instead I'd like to try raise the level of my contributions here by writing about less trivial matters. I've wanted to, but I've been holding off, perhaps because it never seemed pressing (not like linking to some evanascent news piece), or perhaps due to the generally low quality of my writing, too low to express what I feel I want to say. Still, I should probably just give up hope that it will somehow improve. Besides, even the important things will get lost if not captured.

My son was talking to my dad on the phone last night, trying to convince him to smelt playground sand in his kiln to make glass. I think he succeeded, though my dad will probably add lime and soda to the sand, and jury rig something with a bottle of oxygen and a MAPP torch rather than use the pottery kiln. Or maybe electrodes and 20 amps at 60 volts, it'll conduct well enough. This inspired my dad to talk about his father, my grandfather, who melted aluminum oxide with three-phase power in a crucible, taking it up to 2000 C before pouring it into steel buckets (melting point of steel, 1500 C, but large specific heat) to cool before being smashed and made into grinding wheels. Yes, an industrial process, not something that he was doing in his backyard. When they tapped the crucible, the sky would light up fifteen miles away, and my grandfather would go down to the river to watch the sky. This story is from the old Niagara Falls, the American, industrial side, and power was cheap close to the plant, close to the giant flood of falling water, so easy to extract huge quantities of power from. Electricity then and there cost 3 mills/kWh, or could be had for one, if you were willing to let the utility turn it off whenever they wanted to. Of course, you could buy a 1/4 lb candy bar for 5 cents then. Later, the laws changed to make prices the same everywhere, and industry declined. When I was courting my wife, I told her about Niagara Falls, and my family connections there, and told her that they turned them off at night, to make more power. And it's true, almost, and they still do.

My grandfather died going over the falls. It's an odd story, really. I'm not certain what happened, and maybe nobody else is either. They did a lot of sailing on the Niagara river, above the falls. My grandfather fell off a dock, and ended up downstream, below the falls. I don't know why fell, though, or why he didn't swim for shore. Maybe he had a heart attack, though at fiftysomething he seems kinda young for that. Maybe he fell accidently, hit his head, drowned -- I'm clumsy, maybe he was too. Maybe he jumped, killed himself. That also happens. I was going over this story with my son (perhaps in itself a bad idea), and this last one really confused him. It just made no sense. "Why would anyone want to do that?" I tried to explain. "You know how sometimes, you're happy, and sometimes you're sad... uh, it's biochemical, something in their brain... uhhhh..." Bedtime is not the time for long lectures on mood disorders and pharmacological therapies. I changed the subject. Perhaps, like sex, it's good for kids to hear about the what and the how long before the why becomes conceivable. It's too late, anyway, so I might as well tell myself that.

Got email this morning about another person. Male, 65, Caucasian, self-inflicted gunshot wound, alcohol use, yes, tobacco use, yes, other substance use, no, BMI, 25.1. I'm offered his liver, $75 per million cells, minimum order ten million. Somebody's dad, somebody's grandfather. Hopefully that won't ever be me. Completely by coincidence, I signed my organ donor card last night. Any needed tissues or organs for transplantation. "Or any other purpose" I added in pen, with a smiley, before signing and getting my wife to sign too. Reduce, reuse, recycle.

The has a piece on the difficulties of telling, you know, which way that guy swings these days. Gaydar is "as outmoded as Windows 2000". (Which I just got on my work machine a couple months ago, just as it was being end-of-lifed by Microsoft.) I guess the problem is that straight men, or at least the ones who hang around NYC fashion circles, are so fruity, and the gay men so mainstream, that you just can't tell by looking. (In truth, you never could, at least without... you know.)


But maybe there is some melding of styles. Case in point: I bought a tie recently. I picked virtually the most conservative one available, and it still had lavender stripes. In Europe, the salesman assured me, men are wearing even brighter colors.


And don't forget: Gay or Eurotrash?

From MR comes a link to a brief intro to assurance contracts, a supposedly general mechanism for routing around the free rider problem. A very large number of important social problems can be cast into this mold: it's not just how to fund free software, which is where I first encountered it, but also national defense, fire and police, zoning, scientific research, environmental protection, good lawmaking, patents, etc. Notice that every one of these areas generally involves the coercive power of the state to tax and spend. Specific examples of people who've tried assurance contract type ideas include various free software types (dunno how successfully), Stephen King once tried to release a book that way, etc. So far I haven't seen it working well, the state seemes to have pretty much captured the market on being a state, but innovative ideas are always helpful. Patents can be read as one example: if you define a new thing, and prove that it's new, and show everyone how to do it, you can get a state-enforced monopoly on that new thing for some fixed period. There's a lot of problems with patents -- the paperwork is expensive for society, the period is fixed, irrespective of the problem domain, there's no connection between the value to society of having the methodology discovered and published vs the cost to society of granting the monopoly, and so on. I wonder if there couldn't be some kind of market mechanism, some bidding thing, which might make more sense. It's a difficult problem, though.

Yeah, or so says Morgan Stanley. (Props Cosh)


I don't buy it. Not that there aren't trading fluctuations, and sure, less demand from China could drive prices lower for awhile. But trading fluctuations do not place more oil in the ground. It could just be a difference in perspective: I'm interested in the price over the next ten or twenty years, Morgan is probably interested in the next 10 or 20 weeks. And "collapse" is relative too: if you're leveraged long, $45/barrel might make you bankrupt, but it wouldn't influence national energy security policies, nor even oil company investment decisions. Oil execs remember $10/barrel like it was yesterday, those were lean years. They no longer assume it might go back there, but "stress testing" investment decisions against something like $20/barrel oil is still required.


As for the "bubble", I bet Morgan is just short.

Aside from the vodka, of course? Here's a short film. (Props Creek Running North.)

Richard Rahn on Sarbanes-Oxley, Elilott Spitzer, and counter-productive government regulation. I'm glad to see I'm not the only one to dislike Spitzer's policies and practices. Looks like KPMG will follow in Andersen's footsteps. Bad news if you work for KPMG, or if you need to hire an accountant, or if you buy stocks which get audited (your costs just went up again). Good news if you're working for one of the remaining accounting firms (your life just got more exciting, but your income went up again).

Cops in BC are setting up bait cars in areas with high theft rates. Easy to steal, but equipped with cameras, GPS, mikes, and an engine which can be remotely disabled. Sure makes arrests and prosecutions easier, doesn't it?

Interesting how quick the thieves catch on. In one video ("If my mom calls..."), the perps spend most of their ride (or the three minutes shown on the web, anyway) speculating and trying to test whether it's a bait car or not. I suspect script kiddies who find their way into honeypots (fake insecure machines designed to entrap crackers) are thinking pretty much the same thing.

So Salon sends off one of their liberal writers to interview the founder of a Christian dating site. Shock and horror, he seems to be a nice, thoughtful person, not at all the fundamentalist golem she seems to have been expecting. Unless, of course, it's all part of an elaborate PR ploy, pretending to be open about issues that trouble him, pretending to be loving and accepting of all different kinds of people ('cuz y'know that secular left-wingers invented multiculturalism, the only path to tolerance, and there's nothing like that in, say, the New Testament), pretending to be open to gays and the possibilities of gay marriage, despite being unwilling to take their money... He couldn't just be being sincere, could he?


Weird.

Here's the deal: $600k/yr, nice office, nice title, responsibilities on paper but not in practice, no employees to supervise, no boss to report to, nothing to do but hold press conferences lambasting your employer and whine to the media about your internet connection. Job security? Sounds near absolute -- good thing too, given the likelihood of difficulties finding another job. ("Sure, I'm a whackjob, and sued the heck out of my two previous employers, but hey, I won. You like to hire winners, don't you?") The NY Times has the story.


Update: Here's the link to the Amazon book review mentioned in the article: scroll down to the first reader review. Also check out the discussion on Derek Lowe's Pipeline -- I'd have to say that Lowe and Rost agree more than they disagree. Also interesting is the "other reviews" section for Peter Rost on Amazon: a couple of books about drugs, a book about taxes and the superrich, and a book extolling the selfless virtue of whistleblowers and their lawyers. Hm!


Even more: check out his Senate testimony. I'm almost convinced, but still maintain my fret that US reimportation of Canadian drugs would just lead to higher prices for Canadians. Of course, the whole economic advantage of reimportation has by now probably been destroyed by the collapse of the US dollar. Before the wars, a USD bought 1.65 Canadian sheckels, now you get one and a quarter, and lots of people think it's going lower. If China and Japan get worried about the giant USD reserves they're building up, and slow their purchases or even start to sell, there's not really a lot of brakes on the fall. With the euro as a potential competing reserve currency, there's no guarantee that the peoples of the world have to accept, as a permanent state of affairs, USD getting crammed down their throats in terms of a current account deficit. To get back to pharmaceuticals, this could even shift the balance of the US consumer as the sole source of profits for funding of R&D. Also see this.

So what does the collective wisdom of Slashdot have to say about environmental charges and hardware reuse?

Very very long, and hard to explain, but very funny. Just go read it.

I know, I know: France and the Netherlands saying no, Deep Throat coming out of the closet, he-said-she-said about the Koran in the toilet, and here I am talking about accounting. Arthur Andersen, after many long years, has finally been acquitted. Am I the only one to remember this and care?

This is a funny one. Andersen no doubt played an important role in the Enron fraud, and the Feds desperately needed to take somebody down. This was a surprisingly difficult challenge, because the fraud was somewhere between 95% and 99% legal. But at the time, I was pretty well convinced by various commentators that Andersen's conviction wasn't legit. A few points:

• There was only one conviction of a person, the guilty plea by Dave Duncan, the chief auditor on the Enron account. Prosecutors can apply a tremendous amount of pressure to individuals to get a plea, and just because someone caves, does not mean that they necessarily did what they pled to.
  
• Despite the plea, and the protection against further prosecution, Mr. Ducan nevertheless testified under oath that his auditing was 100% correct and legal. That can't have made the Feds happy.
  
• Andersen was accused of illegally destroying documents when the SEC investigation was imminent but not yet announced. In order for the organization to have illegally destroyed documents, there must have been a person in authority in the organization, who knew it was wrong, who persuaded others to carry out the act. This is the "corrupt persuader". No corrupt persuader, no corrupt organization, as a matter of law. The Feds, however, never had a straight story on who, exactly, they believed this corrupt persuader to be.
  
• The question of the identity of the corrupt persuader was heavily argued in trial. Defense said the prosecution had to name somebody and prove it, prosecution said they could name a whole bunch of possibilities, and let each individual juror pick their own favorite. As long as everybody on the jury thought somebody-or-other did something bad, the organization could still be guilty, even though the jury could not reach a consensus on who it was that did the bad thing. The judge eventually allowed this final compromise: every juror could pick their own bad person, but they had to be reported to the judge, so that this question could get hashed out in appeals court.
  
• The jury couldn't reach a consensus on the corrupt persuader thing. They could, however, all agree that a particular person had edited a memo, and convicted based on that. Case closed, we can go home.
  
• Only one hitch: editing a memo, or at least that memo edit, was unquestionably legal. Not even the Feds had suggested otherwise. Prosecution: "Guilty means guilty, don't matter what they were thinking, nyah, nyah!" Defense: "WTF?" Thus the appeal.
  

Slate has a piece on the misunderstood business of pharmaceutical sales and promotion. It's actually not all bad. There are a few howlers, of course. It's scrip, not "script", naproxen, not "naproxyn", pharma marketing expenses are wildly overstated because free samples are booked at full retail price, not the pennies-per-pill cost to the company, and the COX-2 story is far more complicated than the MSM even seems to hint at. Still, it does a good job at discussing what pharmaceutical reps do, and more importantly, how their outcomes get measured. Database fans will note that the essential operation is a join, carried out on data acquired at great cost from disparate sources, none of which in itself seems to be particularly questionable, but the combination of which is highly useful. Intelligence gathering at its finest, and it tells you what tactics work on which doctors.

In other drug sales news, I learned today that Lipitor, the world's #1 drug, and the only blockbuster turning in more than $10B/yr in sales, is not in fact the world's best selling medicine. Erythropoeitin, mostly used to combat anemia after chemo, got almost $12B in 2004 sales total divided over all the companies which sell it. Biotech has normally been thought of as the poor stepsister to pharma, and overall it still is, but things are coming along. I remember when a mere billion dollars of sales counted as a blockbuster, but I don't think that's true anymore.