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Thursday, May 31, 2012 A DEFENSIVE VICTORY AGAINST ADMINISTRATIVE TYRANNY
In 2005, Mike and Chantell Sackett purchased a small lot in Iowa (.63 acres) for $23,000. When they began to lay gravel on the land, which is located in a residential neighborhood, they were hit by an EPA compliance order informing them that the property had been designated a wetland under the Clean Water Act. They were ordered to stop grading their property and were told that they would face fines of up to $75,000 per day if they did not return the parcel to its original state. When the Sacketts attempted to contest the order, the agency denied their request for a hearing.
The case went to the Supreme Court, and in March, Justice Antonin Scalia, writing for the court, said that the Sacketts are entitled to appeal the EPA order, rejecting the agency’s claims to the contrary. “The [law’s] presumption of judicial review is a repudiation of the principle that efficiency of regulation conquers all,” Scalia said in the decision. “And there is no reason to think that the Clean Water Act was uniquely designed to enable the strong-arming of regulated parties into ‘voluntary compliance’ without the opportunity for judicial review — even judicial review of the question whether the regulated party is within the EPA’s jurisdiction.”
Scalia also noted that the Sacketts’ property bore little resemblance to any popular conception of a wetland, protected or not.
"The EPA used bullying and threats of terrifying fines, and has made our life hell for the past five years,” said Mr. Sackett. “As this nightmare went on, we rubbed our eyes and started to wonder if we were living in some totalitarian country. Now the Supreme Court has come to our rescue and reminded the EPA — and everyone - that this is still America.”
Read this post...the personal cost of big-government thuggery...for more on the Sacketts' ordeal.
This is an important victory (although the Sacketts are not off the hook yet--the Court's ruling was merely that they be allowed to challenge the EPA's order, not that the EPA position be negated). But it is only a defensive victory, and the swamping envelopment of administrative tyranny against American citizens continues on many fronts. See for example this post: we are no longer governed, but we are ruled, which cites the case of an 85-year-old man whose water-purification-device business is being ruined by the DEA and its state equivalents, and a severely injured woman who was arrested while trying to pick up her prescribed painkiller.
Government is not reason, it is not eloquence, it is force; like fire, a troublesome servant and a fearful master. Never for a moment should it be left to irresponsible action.
The above is often attributed to George Washington: while he was probably not really the source of the quote it remains a true and important statement nonetheless. Living with what has historically been a fairly benign government, Americans have too often tended to forget the inherent dangers of overweening government power. There is a serious danger that we're going to find out the hard way. Don't think that what happened to the Sacketts, and to the other individuals mentioned in the other link, can't also happen to you.
Monday was Memorial Day. People have fought in America's military forces for a variety of reasons, but I'm confident that very few of them were fighting so that government officials could engage in the kind of bullying that was done to the Sacketts and continues to be done to Bob Wallace and Marjorie Ottenberg.
The EPA is under the President's control. If we had a decent and competent administration, the case of the Sacketts would have almost certainly been resolved long before it had to be brought to the Supreme Court level. Should Obama win a second term, you can expect to see increasing numbers of Americans in every walk of life--maybe even yourself--crushed beneath the wheel of administrative tyranny.
Individual court victories such as Sackett v EPA are important, but true safety can be found only by breaking the back of the political philosophy which calls for unlimited and unending expansion in government's role and powers.
Friday, May 25, 2012
Movie Review: Little Man, What Now?
Last week I reviewed Hans Fallada's 1932 novel about a young couple enduring hard times in late-Weimar Germany. The book was made into an American movie, released in 1934, which I watched last night. Here is the original NYT review of the the film.
The movie generally follows the book, with one huge exception. At the end of the book, the unemployed Sonny (who has come into Berlin to pick up his dole payment) is taken by a policeman for an undesirable tramp and is shoved off the sidewalk. Utterly in despair, he returns home and is at first unable to confess his humiliation to Lammchen. But when he finally does, he is lifted up and given hope by her love and understanding. In the movie, Sonny is also shoved by the cop...but when he returns home, his friend Mr Heilbutt has arrived to tell the couple that he has moved to Holland, started a business there, and is offering Sonny a job. The couple's problems are solved.
Psychologically, the messages of these two alternative endings are about as different as you can get.
Margaret Sullavan plays Lammchen and Douglass Montgomery is Sonny: I thought Sullavan came off as much too elegant for a working-class girl who lacks self-confidence because she has been told all her life that she is "not pretty." Alan Hale is good as the roguish but sometimes benign Jachmann. Muriel Kirkland overacts the heck out of Marie Kleinholz, the undesirable daughter of Sonny's employer--Donald Haines does a much better job in the very minor role of the employer's son. The best acting in the movie is by Christian Rub as a cart-driver and furniture-maker who becomes the couple's landlord in Berlin...the screenwriters completely transformed his character from the extremely unpleasant individual he was in the book (I believe the phrase "drunken animal" was used) to a man who is wistful, quirky, and very helpful. In this case, the change from the book works well.
Overall, I thought the movie could have been better done. For example, at the end of the book there is a flashback from the cold and starry night outside the couple's residence to an earlier and warmer starry night on the beach where they first made love. This could have been given a very nice cinematic treatment even within the constraints of 1934 Hollywood. There were other missed opportunities. The film is definitely worth seeing, especially if you're interested in the era, but I think the book deserved better.
There have also been several German movies made from Little Man, What Now?...not sure whether any of them are available with English subtitles.
Tuesday, May 22, 2012 KARLGAARD ON THE FACEBOOK IPO
Rich Karlgaard of Forbes has some thoughts on the Facebook IPO. Best line:
Zuckerberg’s view of shareholders is like President Obama’s view of blue collar workers. He needs them but secretly laughs at them.
Not sure this is totally fair to Zuck (completely accurate as far as Obama goes), but pretty funny.
Note especially Karlgaard’s comment about the impact of Sarbanes-Oxley on public market investors:
The insider pig pile of PE firms and celebrity Silicon Valley angels took it all. This is a rather new, post-Sarbanes-Oxley fact and it should make Americans very, very angry. When Microsoft when public in 1986, its market value was $780 million. Microsoft’s market value would rise more than 700 times in the next 13 years. Bill Gates made millionaires of thousands of ordinary public investors. When Google went public in 2004 at a $23 billion valuation, it left less on the table for you and me. Still, if you had invested in Google then and held your stock, you would be sitting atop a 9x return. Zuckerberg and his Facebook friends took it all.
Wednesday, May 16, 2012
BOOK REVIEW: LITTLE MAN, WHAT NOW?
by Hans Fallada
I've often seen this 1932 book footnoted in histories touching on Weimar Germany; not having previously read it I had been under the vague impression that it was some sort of political screed. Actually it is a novel, and a good one. The political implications are indeed significant, but they're mostly implicit rather than explicit.
Johannes and Emma, known to one another as Sonny and Lammchen, are a young couple who marry when Lammchen unexpectedly becomes pregnant. Their world is not the world of Weimar's avant-garde artists and writers, or of its risque-to-outright-degenerate cabaret scene. It is far from the world of a young middle-class intellectual like Sebastian Haffner, whose invaluable memoir I reviewed here. Theirs is the world of people at the absolute bottom of anything that could be considered as even lower-middle-class, struggling to hold on by their fingernails.
When we first meet our protagonists, Sonny is working as a bookkeeper--he was previously a reasonably-successful salesman of men's clothing, working for the kindly Jewish merchant Mr Bergmann, but a pointless quarrel with Bergmann's wife, coupled with a job offer from the local grain merchant (Kleinholz) led to a career change. Sonny soon finds that as a condition of continued employment he is expected to marry Kleinholz's ugly and unpleasant daughter, never an appealing proposition and one which his marriage to Lammchen clearly makes impossible. Lammchen is from a working-class family: her father is a strong union man and Social Democrat who sees himself as superior to lower-tier white-collar men like Sonny.
When Sonny and Lammchen set up housekeeping, their economic situation continually borders on desperate. Purchasing a stew pot, or indulging in the extravagance of a few bites of salmon for dinner, represents a major financial decision. An impulsive decision on Sonny's part to please Lammchen by acquiring the dressing table she admires will have long-lasting consequences for their budget.
The great inflation of Weimar has come and gone; the psychological damage lingers. Sonny and Lammchen's landlady cannot comprehend what happened to her savings:
Young people, before the war, we had a comfortable fifty thousand marks. And now that money's all gone. How can it all be gone?...I sit here reckoning it up. I've written it all down. I sit here, reckoning. Here it says: a pound of butter, three thousand marks...can a pound of butter cost three thousand marks?...I now know that my money's been stolen. Someone who rented here stole it...he falsified my housekeeping book so I wouldn't notice. He turned three into three thousand without me realizing...how can fifty thousand have all gone?
Inflation is no longer the problem, unemployment is. There are millions of unemployed, and those who do hold jobs are desperately afraid of losing them and will do anything to keep them.
Is this company really worth the $100 billion or so implied by the IPO pricing? A few points of comparison: the market capitalization of Duke Energy is $29 billion. Target stores is $36B. Yahoo is $19B while Amazon is $101B and Cisco Systems is $89B. CSX railroad is $22B, Ford is $38B, and General Electric is $194B.
Do you think a $100B valuation for Facebook is realistic? What strategies and future environments could lead to this number being sustainable or even understated?
(I don't have any direct financial interest in Facebook currently, but may do something with the stock at some point, more likely in the short than in the long direction. This post is for sharing of general information and discussion and does not represent financial advice.)
Friday, May 11, 2012 NATURAL GAS: PAST, PRESENT, AND FUTURE
The hot energy story of the last few years has been the vast expansion in the available supplies of natural gas, and the very significant economic implications thereof. I though it might be interesting to take a look at the past, present, and future of this commodity.
The first known use of natural gas was by the Chinese, circa 500 BC...they captured gas from places where it was seeping to the surface, transported it in bamboo pipelines, and burned it for a heat source to distill seawater and capture the resulting salt and fresh water. The modern gas era began circa 1800 with the use of gas for lighting--initially of streets and later of homes and other buildings. Since there was no network of gas wells and long-distance pipelines, the gas used for these applications was usually not true natural gas, but rather "town gas," made by heating coal. (Gas stoves seem to have become popular circa 1880, and apparently had quite an impact....I've read that the term "gas-stove wife" was enviously applied to women who were so fortunate as to have one of these appliances and were thereby spared the labor of tending a wood or coal stove, and hence had some leisure time available.)
The transition from coal gas to true natural gas had to wait on the build-out of a long-haul pipeline network, which took place mainly from 1920 to 1960. Although electricity became the glamor "fuel" and displaced gas in many cases for cooking and heating, the generation of electricity itself has in recent years become a major source of gas demand. Natural gas is also important as a feedstock for the production of fertilizer and of various plastics. By the early 2000s, there were serious concerns that the US was running out of natural gas--see for example this 2003 TIME Magazine story. The article cites Alan Greenspan's concerns that high nat gas prices would make us uncompetitive in many industries, as well as citing direct economic pain inflicted on consumers. The only solution seemed to be large-scale imports of natural gas via LNG (liquified natural gas) ships. (Gas is far more difficult to transport than oil, because it needs to be liquified in order to make the volumes manageable, which in turn requires refrigerating it to very low temperatures.) In late 2005, US natural gas prices hit an inflation-adjusted level of almost $16 per million BTUs.
The price is now about $2.50 per million BTUs. What happened?
Arthur Brooks (surely one of the very few people to pursue a career as a professional player of the French horn before becoming a professor of business and government) has a good piece in today’s WSJ.
The opposite of earned success is “learned helplessness,” a term coined by Martin Seligman, the eminent psychologist at the University of Pennsylvania. It refers to what happens if rewards and punishments are not tied to merit: People simply give up and stop trying to succeed.
During experiments, Mr. Seligman observed that when people realized they were powerless to influence their circumstances, they would become depressed and had difficulty performing even ordinary tasks. In an interview in the New York Times, Mr. Seligman said: “We found that even when good things occurred that weren’t earned, like nickels coming out of slot machines, it did not increase people’s well-being. It produced helplessness. People gave up and became passive.”
From an Amazon customer review of one of Tom Russell's albums:
Twice in my life, while driving in heavy freeway traffic, I've heard songs so good on the radio that I had to pull off the road and collect my thoughts. Turns out Tom Russell wrote both of 'em.
I've never had to actually pull off the road, but there's no denying that TR's songs pack a considerable emotional punch...indeed, I think Russell is one of the most talented singer/songwriters working today. I've been meaning to write a review of his work for some time, and was stirred into action by L C Reese's post Grasshoppers and Frost, which reminded me of some lines from Russell's song Ambrose Larsen:
The blackbirds and the locusts, destroyed our corn and wheat The hawks they ate the chickens, the wolves our mutton meat With traps and dogs and shotguns loud, we fought this old wild ground Our children caught the fever, but no doctors were around
The above is from TR's album The Man From God Knows Where, a song-cycle about the American immigrant experience based in part on the lives of his own Norwegian and Irish ancestors. "Concept albums often fall flat because they are too explicit" noted an SFGate review of this work, "...but The Man From God Knows Where triumphs by laying out the story of one man's family in intimate detail while developing general themes that inform all our lives."
The stories are told in first person, Here's Mary Clare Malloy, one of 700 "picture brides" immigrating from Ireland to join the men they have arranged to marry:
We disembarked and stood in line with chalk marks on our coats It was X for mental illness, if E back on the boat They asked us what our breeding was, and could we read or write The sound of women weeping filled the dormitories at night
My best friend was deported back, to a poor Killea home Another sent to Swinbourne Isle, died of cholera alone The rest of us were shipped to trains bound for Midwest states To wild and stormy prairie lands and our prospective mates
The album captures the almost unbearable nostalgia that must have afflicted immigrants in a time when there was no fast and low-cost transoceanic travel, no international phone calls, especially in The Old Northern Shore. Those who inhabited the country prior to the coming of the immigrants are not neglected--a passage from the epynonymous Man from God Knows Where:
I've heard the sound of Indian drums, I've heard the bugles blow. Before they rewrote history, into a Wild West Show. My kin sailed toward America, to steal their Indian ground. They passed Bill Cody's circus ships, European bound.
Look at me, brave Sitting Bull, in this gondola canoe Bill Cody brings us smoke and meat, so what are we to do? I came across the water, in a boat no man could row To play war in front of strangers, in Cody's Wild West show
(The reference is to Buffalo Bill's Wild West, which toured Europe several times between 1887 and 1906. Sitting Bull did participate in the show, though there is some question about whether he was actually in Venice.)
The album ends with the beautiful song Love Abides, which can be heard in full here. (Different version from the one on this album, though.) And here is a tracklist for the entire album, with playable samples of about half the songs.
Singers contributing to this album, in addition to Russell himself, include Iris DeMent, Dolores Keane, and Dave Van Ronk. The voice of Walt Whitman is also present, via an old cylinder recording. Most of the songs were written by Russell; there are also several traditional songs and David Massengill's Rider on an Orphan Train. This album is a very ambitious piece of work, and one that worked out extremely well. Highly recommended. Almost all the songs work fine on a stand-alone basis, but I suggest listening to the album straight through on initial hearing.