Category: Business

Cover the First Amendment in Whipped-Cream and Pasties

Now that it’s been called on its bullshit, the FCC wants a do-over.

“Today the Commission, supported by the ABC, NBC and CBS affiliates, filed a motion for voluntary remand and stay of briefing schedule in Fox Television Stations, Inc. v. Federal Communications Commission,” the commission said in a statement. “It did so at the request of broadcasters who complained they did not have the opportunity to be heard by the Commission before it issued its decision in its “Omnibus” order in March. Additionally, the remand would allow the Commission to hear all of the licensees’ arguments which is necessary for the broadcasters to make these same arguments before the Court.”

I’ll ask the obvious: does no one understand that “Congress shall make no law” is an absolute? And is it any surprise that an arm of the government granted unconstitutional power by that Congress will somehow abuse that power beyond its own rules? The key lost in this story is that Fox is not one of the networks asking for this “voluntary” remand in Fox Television Stations, Inc. v. Federal Communications Commission. Good. If it sticks this out through to trial, I promise to watch every So You Think You Can [Insert Unwatchable Activity Here]? show its producers can imagine. Just include lots of T&A and swearing when if the court realizes that the bulk of the FCC’s Congressionally-sanctioned nanny-mongering is unconstitutional.

Hat tip: Jeff Jarvis

Digital Lefts Management in France

Two things interest me in this story explaining Apple’s possible response to French legislation requiring that songs purchased online be playable on any mp3 player. Personally, I think the choice is simple: Apple should close shop in France. When citizens in France are still walking around with the latest iPod every time Apple releases a new product, the government will have its answer on which the French consumer values more. Capitulation to the French central planners would only encourage other central planners in Europe. I suspect Apple pulling out of France would lead to the same nonsense surrounding region-encoded DVD players, preventing online purchases of non-compliant players. Permit central planners to invade on the small things and they’ll control the big things, too. So Apple should leave France.

More intriguing is this:

Members of the activist group Free Software Foundation have staged protests this summer outside of Apple stores across the country, with members dressed in colorful toxic waste suits and carrying signs that rate digital rights management software such as Apple’s as “Defective by Design,” the name of the group’s campaign.

Henri Poole, a Free Software Foundation board member, said that such software restrictions infringe on consumer rights and are designed to protect “antiquated business models.”

“We purchase [songs] and we think we have the same rights we had two years ago, but those rights are being eroded and the [digital rights management] rules can even be changed after you’ve purchased,” he said.

I agree that excessive DRM is indeed “defective by design.” However, as I’ve said before, I’ve come to accept that with the iPod and iTunes. I knew going into the deal exactly what Apple expects, what it will license to me. As such, I won’t argue that my rights are being eroded. Perhaps they are, but if I value something else more (convenience, functionality), that’s my choice. I don’t need a central planner to tell me how I’m supposed to enjoy my iPod. I want it to have Sirius functionality, but I’m not going to ask Congress to require it.

Of course, economically, I’m still discussing the French, so I leave open the possibility that French consumers believe it’s better to have nothing than something if that something is “exploitative”. If so, c’est la vie. I’m not the boss of them.

Second Acts in America

Friday night, Danielle and I sat through more than 100 minutes of rain and many innings of Phillies ineptitude at RFK, as the Phillies lost to the Nationals. Normally, that would be a major downer, but the night had barely started when I knew all would be fine. I saw President Bush throw out the first pitch on opening day last year, but Friday night was more entertaining for me. My inner Finance geek loved this:

Day 18 of D-E-Double Hockey Sticks

Over the last eighteen days, I’ve begun to understand “Dell Hell.” Currently, my laptop is in Memphis for repair for the third time since it died in April. During its first repair attempt, Dell replaced the fan and heat sink. When I received the laptop back, I was able to recreate the problem in 50 minutes. When I called, Dell admitted that its staff turned my computer on and let it run for 45 minutes before sending it back. They didn’t bother to examine the laptop to determine a cause. The hardware technician did not diagnose anything beyond what the phone representative imagined as the cause, hence the limited, ineffectual repair.

On its second attempt, Dell replaced the fan, heat sink, and CPU. I do not understand why they believed that a part they replaced a few days before would be the cause of the original problem. The phone representative noted in my case that the next repair attempt should include the motherboard. This did not happen, as I said. When I received the laptop from the repair depot, I managed to kill it in 35 minutes, replicating the original problem by playing a DVD.

So now my laptop is on its third journey. I have no faith that my laptop will be fixed whenever it returns, but that’s mitigated by the knowledge that Dell must continue trying until the problem is resolved. Of course, I have to remind them of that every time I’ve called them, which is frustrating. Why no one at Dell can grasp the simple concept that, because my laptop failed during the warranty period, it is irrelevant that my warranty has since expired if the original problem hasn’t been fixed. Especially when they’ve admitted that they didn’t bother to run a thorough diagnostic or post-repair test.

I’ve learned a few things during this ordeal. Dell is clearly incompetent, which I think is all that works as an explanation. There is an upside to this: my laptop will have all new insides by the time this is resolved. It’s unfortunate that I’m not earning frequent flier miles for all the trips the computer is making to Memphis.

I won’t be buying anything from Dell in the future.

Post Script: Composing anything worth reading on a PocketPC is still virtually impossible, not to mention the hand cramping it causes. Regular blogging will resume soon.

Are voters this easily manipulated?

The United States Senate is filled with those who are either too stupid to understand basic economics, or with those too politically ambitious to care about the damage they cause with reckless threats and action.

Sen. Carl Levin, D-Mich., said he believes gas prices “would come down within a matter of days” if President Bush told oil companies that he was going to support a windfall profits tax.

“But the president will not call the oil companies into his office because he’s been too closely allied with those oil companies, and if he does it’s going to be a window-dressing conversation,” said Levin, who appeared with Specter on CNN’s “Late Edition.”

Right, rising gas prices are a strict conspiracy by President Bush. Whether it’s political pressure driven by low poll numbers, a need to be leaderly, or stupidity, President Bush responded:

President Bush has asked the Energy and Justice departments to investigate whether gasoline prices have been illegally manipulated, he announced in a speech this morning.

The White House is also asking states to guard against unfair pricing.

Essentially President Bush offered every hack prosecutor an excuse to go after gas station owners to advance their political careers protect the public from the threat of supply and demand. Unfortunately the president is protecting himself, too:

The president also moved to temporarily halt deposits to the nation’s strategic petroleum reserve, making more oil available for consumer needs while seeking to ease prices at the pump.

The United States uses far too much oil every day for that to work. Not standing up to the idiocy of the fine folks in the Senate and delivering the hard truth to the masses will haunt President Bush, because when this move inevitably fails to reverse the laws of economics, Democrats will hammer him for it. They’ll be wrong, but they’ll have a cheap win.

At least Bush spokeswoman Dana Perino tempered expectations a little with this bit of logic:

“Nothing is going to be a magic wand that will lower gas prices overnight.”

No kidding. At some point some politician needs to have the guts to admit that price is only a measure of cost. Value is something else entirely. Our refusal to take mass transit and to stop buying SUVs shows that we value our current lifestyles more. It should be no surprise that prices increase with our demands, since short-term supply is less flexible. Reducing contributions to national oil reserves notwithstanding.

Still, Democrats are hammering Bush and his Republican colleagues for failing to come up with a strategy that would cut prices soon. They hope to harness voter anger over the trend and, by Election Day, turn it against the Republicans who control Congress.

And that’s why Democrats are no more qualified to govern than the Republicans they attack. But we knew that. The only new lesson is that Sen. Levin needs to remove his tinfoil hat and grow up.

Individual responsibility should be the new social contract

Will the rose-tinted remembrance of the American social contract please stop? Caterpillar produced spectacular returns by standing up to its unions and demanding that the company move into the new economic reality. This should be applauded, but instead, we’re presented with this:

But now, having pulled off one of the most impressive corporate turnarounds in recent memory, Caterpillar — like the rest of corporate America — must confront a new question: What is the new social contract it has to offer around which a stable political business model can be built?

I think the outcome of a political business model would look a lot more political and a lot less business. We’ve already proven through experience that socialism doesn’t work. Do we need another round of handouts to unions to demonstrate that Caterpillar will see its business diminish from its current progress? Instead, we’re treated to nonsense like this:

Imagine, for example, what the public reaction would have been if [CEO Jim] Owens had announced that, in recognition of the year’s spectacular results, each of Caterpillar’s 22,000 unionized employees would get a special bonus of, say, $3,000. I can assure you it would have been widely noted in the press and praised as a significant first step toward a new social contract. And who knows how much extra loyalty and commitment it would have engendered from Caterpillar’s blue-collar employees.

Unions seek to guarantee a specific benefit for their members. When performance exceeds those requirements, why should they share in the excess? They traded risk for security. If I invest in t-bills because I don’t like the possible negative returns of the stock market, I don’t have the right to demand a higher interest payment when booming business causes federal tax receipts to soar beyond expectations.

In the author’s hypothetical example, Caterpillar should redistribute $66,000,000 from the shareholders, the rightful owners of the capital, to earn praise from the press and to create the beginnings of a new social(ist) contract. Why? And what kind blithering idiot gives away $66,000,000 for a plan that the might engender extra loyalty and commitment from employees? If you’re a “free agent”, sure, I can say that might make sense. But those employees signed an actual contract, something more explicit than any social contract could ever be. Do they no longer have to honor that, even though they’ve begged for that security and risk mitigation? Sorry, but I believe in economics and contracts. Caterpillar’s recent experience suggests I’m right.

Oh, yes, I can just hear the dismissive response from corporate types now. They’d point out that Caterpillar investors who earned a record $4.21 a share would hammer the company stock if that figure were reduced by even a penny. They’d point out that unions like the UAW have traditionally opposed performance pay, or traded it away for higher guaranteed pay or benefits. And they warn ominously that this kind of “excess” compensation would quickly render the company uncompetitive again.

Guilty.

But none of that really matters. Because the real world choice for the corporate elite is now quite clear — not just here in the United States, but in Europe, Latin America and Japan, as well. Either the members of the business community will have to come up with an improved social contract that allows them to run competitive companies while ensuring that the gains of globalization are spread more equitably, or they will have to face the almost certain prospect that angry and anxious voters will roll back globalization in ways that will hurt the global economy and their newly globalized companies.

Or to put it another way: It’s time for the Jim Owenses of the world to show the same backbone and ingenuity in dealing with the excessive and unreasonable demands of Wall Street that they previously showed in dealing with workers and labor unions.

The central planners should stop reading Karl Marx and start reading Adam Smith. And maybe throw in a few viewings of Wall Street without Oliver Stone whispering sweet nonsense in their ears.

Winning a championship isn’t enough

I don’t care for conformity, and one of the greatest daily annoyances for me is the idea of dress codes for adults. I understand the need to be presentable according to specific audiences in a professional setting, and I’m always willing to accommodate in my work. But a push for excessive accommodation and conformity often bulldoze into the workplace. There’s no reason for employees in back-office operations, an area that sees no clients, to dress in business attire, unless that’s what the employee wants. It’s absurd. I’ve been there and I hated it. However, I’ve looked for other employment in the past when I’ve encountered such situations. Idiotic dress codes are often emblematic of other problems within a professional setting. I’m willing to react according to free-market principles.

But what happens when the workplace isn’t free-market, or even in an office? What do the employees do then?

[A.J.] Pierzynski and [Joe] Crede got the word from [White Sox] owner Jerry Reinsdorf — relayed to them by [GM Ken] Williams — that he’d like a neater appearance. Both have long blond hair sticking out from their caps, a style Crede started last season when the team was winning or he was hitting well.

“Jerry Reinsdorf asked me to tell them to get a haircut and look more presentable. So I asked them to get a haircut and look more presentable,” Williams said.

“Rules are rules and you got to follow them,” Crede said, adding he’d never had a haircut in Chicago. “If you got to cut it, you got to cut it.”

That’s ridiculous. They’re professional athletes. I can accept the notion that athletes from all sports should be presentable when the team is traveling. They’re representing the business when the fans/customers are most likely to come into normal contact with them. The team wants to set a good example. But on the field? They’re athletes.

They’re wearing caps that contain their hair. They’re going to sweat and get dirty. Should they change their uniforms after every inning if they slide, picking up a dirt or grass stain? Of course not. And has Mr. Reinsdorf looked through the average sports crowd at his [hideously ugly] ballpark lately, beyond the view from his skybox? He’s not dealing with the metropolitan opera.

Look at the 2005 Chicago White Sox, the 2004 Boston Red Sox, the 1993 Philadelphia Phillies, or almost any other team that’s won a championship in the last decade and you’ll find a team. Not a collection of players, but a team. A team is a group of players that have bonded over the season, almost like a military unit. The players on a team experience all the frustrations and joys of a long season as a team. Killing that spirit to look more professional often ends in disaster at the first sign of trouble. The team may lose its common bond with forced conformity. Moves like this are short-sighted.

I’m just glad it’s the White Sox and not the Phillies. The Phillies need all the team mojo we can muster. If that means long hair and mullets (circa 1993), then I’m all for it. As a fan who pays for the games.

That’s what you owe and we’re not turning ourselves in until you pay!

This article does more to prove that health insurance should be divorced from employers.

Dell will announce Apr. 10 that it is becoming the largest U.S. employer to offer workers electronic health records that track their insurance claims and drug prescriptions, which the computer giant says is a key step toward letting its 26,000 staffers coordinate their own care in a bid to improve medical safety and contain costs.

CEO Kevin Rollins will announce the plan today at a health care forum in Nashville, Tenn., where Health and Human Services Secretary Michael O. Leavitt will be the keynote speaker. Dell has offered limited electronic health records since 2004, but the upgrade coming Apr. 20 adds the ability for the system to automatically capture new information about treatments and test results, rather than waiting for the employee to enter the data manually.

Imagine you’re a shareholder in Dell. Do you want your CEO spending his time focusing on how make Dell’s employee health plan administration more efficient (and speaking at health care conferences), or would you rather he spend his time making Dell’s computer manufacturing more efficient?

Further down in the article, we get this:

Backers of such plans believe this approach will let patients impose market discipline on health care by allowing them to refuse wasteful care. But they argue that employees need both electronic health records and access to market information about health-care costs and quality.
…

However, this free-market approach to health care reform has many skeptics. Service Employees International Union president, Andrew Stern, has argued that poor workers will often choose to forego medical care rather than bear more expenses.

I’ve never heard of Andrew Stern before this article, but I suspect he doesn’t much care for the same interpretation of “free-market” approach that I do. However, to address (the inaccuracy of) his point, a free-market approach doesn’t automatically screw the poor by forcing them to forego medical care to save a few dollars. A reasonable free-market solution will encourage people to forego unnecessary medical care. It should make health care more affordable by imposing strict action-consequence reality on health decisions/spending.

If a person breaks a bone or suffers a heart attack, they’re not going to forego medical care, regardless of how poor or rich. But that person might wear protective boots when riding that motorcycle or stop smoking before it destroys major organs. Conversely, if that person want to continue taking those risks, he will bear the cost burden. Fair doesn’t result in the poor getting something for nothing, which makes it unpalatable to the fear-mongers who sell class warfare as public policy, but it still enables the poor to get what they need.

Apple now allows you to protect yourself… from yourself

Isn’t it reassuring to see how well the free-market works?

Owners of recent iPods will now be able to set how loud their digital music players can go. Apple Computer Inc., facing complaints and a lawsuit claiming the popular player can cause hearing loss, made the setting available as part of a new software update Wednesday. The free download applies to the iPod Nano and the iPod models with video-playback capabilities.

Hmmm… incentives work? Without government intervention? It even lets parents set the software and lock the setting so kids can’t undo it on their iPods? That’s crazy talk. I don’t believe it. What kind of foolishness is this?