TCS Daily - Why Have a Board of Directors?
Nice little article describing the benefits of group decision making over other options. A good little guide for corporate governance. Best used as a start for further study than to jump in and make immediate restructing choices.
Tuesday, November 28, 2006
Monday, October 23, 2006
Bennett: Most around world still believe in America - CNN.com
Bennett: Most around world still believe in America - CNN.com
Just a quick thought exercise on the subject of what type of respect do we want to receive from the world at large.
Option #1: The high school quarterback who wins the state championship, has the prettiest and sweetest girlfriend, defends his friends and classmates against bullies, wins senior class president, and is accepted to a Division III school like Williams College -- or my alma mater Washington University in St. Louis.
Option #2: The school brainiac who was accepted to Harvard on full scholarship, can win any chess tournament or puzzle contest, cannot be counted on to stand up for himself or his friends, but is constantly seeking the approval of his classmates.
In my experience, the quarterback exudes confidence and receives loyalty from his peers and is despised by just less than half the class (remember he was elected senior class president).
The brainiac has few friends but probably complains about unfair it is that the quarterback gets all the attention when the brain could beat him in any intellectual challenge.
Which political party would you most closely associate with which person above. No fair, changing the criteria of the persons listed to suit your point of view. That is a separate exercise.
Just a quick thought exercise on the subject of what type of respect do we want to receive from the world at large.
Option #1: The high school quarterback who wins the state championship, has the prettiest and sweetest girlfriend, defends his friends and classmates against bullies, wins senior class president, and is accepted to a Division III school like Williams College -- or my alma mater Washington University in St. Louis.
Option #2: The school brainiac who was accepted to Harvard on full scholarship, can win any chess tournament or puzzle contest, cannot be counted on to stand up for himself or his friends, but is constantly seeking the approval of his classmates.
In my experience, the quarterback exudes confidence and receives loyalty from his peers and is despised by just less than half the class (remember he was elected senior class president).
The brainiac has few friends but probably complains about unfair it is that the quarterback gets all the attention when the brain could beat him in any intellectual challenge.
Which political party would you most closely associate with which person above. No fair, changing the criteria of the persons listed to suit your point of view. That is a separate exercise.
Friday, October 13, 2006
Reid's transaction
My comment on Polipundit this morning:
Forgive me for a simple question from a conservative lawyer (see heckofanidea.blogspot.com to see my viewpoint more clearly).
What is illegal here? Even the AP video noted early in these comments doesn’t show anything wrong. Mind you the choice of words is completely misleading, but the documents discussed don’t suggest anything wrong legally, hold comment on Senate Ethics Rules for a moment.
Reid bought undeveloped land for $400k. He joins a partner in parlaying their two respective holdings into a unified LLC, taxed as a partnership. The partners each “contributed” – term defined by the Internal Revenue Code – their properties as their initial capital contributions to the company. That contribution would be handle by a deed that on its face always looks like a sale because it needs to show the parties and the value of the property for records and tax purposes.
At the IRS level, Reid needs to document his acquisition cost for the property. It is a tax-free transaction, so the value contributed by law must reflect that he is contributing it at its acquisition cost.
The nature of his asset has now changed from being a real estate asset to being intangible personal property in the form of a membership interest in the LLC.
The taxable event then occurs when the combined real estate of the company is sold. The gains are allocated to the company’s members and taxed accordingly.
The only problem that I have heard is that the Senate disclosures did not reflect the new company membership. This is a pretty significant omission.
The consolidation of property and rezoning by definition in development projects adds considerable value to property. When Walt Disney bought his property in Orlando, he bought many, many individual parcels and consolidated them. Don’t you think that Disney World’s land is worth more as one parcel than a bunch of one-acre plots? Which is harder to find?
Reid failed to disclose correctly. This is not a strange cattle-future moment revisited.
UPDATE: After reading AJ Strata, the picture really needs to focus on the stuff leading up to the deeds that I discussed above. The maneuvering to get that point is the real point of interest.
Forgive me for a simple question from a conservative lawyer (see heckofanidea.blogspot.com to see my viewpoint more clearly).
What is illegal here? Even the AP video noted early in these comments doesn’t show anything wrong. Mind you the choice of words is completely misleading, but the documents discussed don’t suggest anything wrong legally, hold comment on Senate Ethics Rules for a moment.
Reid bought undeveloped land for $400k. He joins a partner in parlaying their two respective holdings into a unified LLC, taxed as a partnership. The partners each “contributed” – term defined by the Internal Revenue Code – their properties as their initial capital contributions to the company. That contribution would be handle by a deed that on its face always looks like a sale because it needs to show the parties and the value of the property for records and tax purposes.
At the IRS level, Reid needs to document his acquisition cost for the property. It is a tax-free transaction, so the value contributed by law must reflect that he is contributing it at its acquisition cost.
The nature of his asset has now changed from being a real estate asset to being intangible personal property in the form of a membership interest in the LLC.
The taxable event then occurs when the combined real estate of the company is sold. The gains are allocated to the company’s members and taxed accordingly.
The only problem that I have heard is that the Senate disclosures did not reflect the new company membership. This is a pretty significant omission.
The consolidation of property and rezoning by definition in development projects adds considerable value to property. When Walt Disney bought his property in Orlando, he bought many, many individual parcels and consolidated them. Don’t you think that Disney World’s land is worth more as one parcel than a bunch of one-acre plots? Which is harder to find?
Reid failed to disclose correctly. This is not a strange cattle-future moment revisited.
UPDATE: After reading AJ Strata, the picture really needs to focus on the stuff leading up to the deeds that I discussed above. The maneuvering to get that point is the real point of interest.
Monday, September 25, 2006
Power Line: The fruits of an unserious presidency
Power Line: The fruits of an unserious presidency
I am always troubled when Person A blames Person B for not fixing a problem that Person A "owned."
What do I mean? In British history, in some situations, such as treason, a father found guilty of treason could be deprived of his lands and his title and prevent his son from inheriting either from his father -- a corruption of blood. The son was disinherited by the father's criminal acts.
In modern trust law, that is the law about management of assets of a third person (a trustee contracts with a trustmaker to manage assets for a beneficiary, a third person), the default rule is that a departing trustee's misdeeds can cause the new trustee to be liable. The idea is that the new trustee has an incentive to find out about the departing trustees misdeeds. In practice, the new trustee just gets sued for something with which he had nothing to do.
In a more casual situation, it would be as if a wife were imprisoned for her husband's theft of their neighbor's house. It would be as if a Muslim woman were stoned to death by her family because her neighbor raped her. Neither woman should be punished for the male criminal's actions.
This is an apt equivalence in Clinton and the Democrats blaming Bush for failing to stop 9-11. The Clinton Administration does not cease being responsible for its misdeeds on January 20, 2001, because someone else swore an oath.
The greatest myth in Washington is that a person should be held responsible for all that happens during their watch. That works well if you are standing on a castle wall, watching your enemy's bonfires outside of archery range. It does not work in civil, legal, or bureaucratic situation.
I would have less complaint about this problem if a Constitutional Amendment were passed allowing the President-Elect to submit his Cabinet and subcabinet to the Congress-elect the day after the Electoral College meets -- or even better on January 4th. The Amendment would further give Congress 30 days to review and accept-or-reject. A failure to reject would constitute an approval. That would give the new administration the ability to take control over the bureaucracies in practice by April or May.
As it is, the Cabinet is not in place until summer and does not start exercising real control until autumn with policy consequences starting in full swing until nearly Christmas.
An administration dealing with the Crisis-du-jour has more immediate control: a Ruby Ridge or Waco is clearly within the new administration's control sooner. The control is more of a minor, unit-level logistic and wholly tactical nature.
But what of control of strategy and systemic logistics? These take time and interaction with Congress to implement. How can an administration that must submit a new strategy to Congress be responsible for an action or misfeasance unless and until the whole oversight or legislative process is attempted?
Once we see that Clinton and his supporters are merely replicating the fallacy of the stoning the rape victim, there is little to make of his teenagerish anger except a show for his peers.
I am always troubled when Person A blames Person B for not fixing a problem that Person A "owned."
What do I mean? In British history, in some situations, such as treason, a father found guilty of treason could be deprived of his lands and his title and prevent his son from inheriting either from his father -- a corruption of blood. The son was disinherited by the father's criminal acts.
In modern trust law, that is the law about management of assets of a third person (a trustee contracts with a trustmaker to manage assets for a beneficiary, a third person), the default rule is that a departing trustee's misdeeds can cause the new trustee to be liable. The idea is that the new trustee has an incentive to find out about the departing trustees misdeeds. In practice, the new trustee just gets sued for something with which he had nothing to do.
In a more casual situation, it would be as if a wife were imprisoned for her husband's theft of their neighbor's house. It would be as if a Muslim woman were stoned to death by her family because her neighbor raped her. Neither woman should be punished for the male criminal's actions.
This is an apt equivalence in Clinton and the Democrats blaming Bush for failing to stop 9-11. The Clinton Administration does not cease being responsible for its misdeeds on January 20, 2001, because someone else swore an oath.
The greatest myth in Washington is that a person should be held responsible for all that happens during their watch. That works well if you are standing on a castle wall, watching your enemy's bonfires outside of archery range. It does not work in civil, legal, or bureaucratic situation.
I would have less complaint about this problem if a Constitutional Amendment were passed allowing the President-Elect to submit his Cabinet and subcabinet to the Congress-elect the day after the Electoral College meets -- or even better on January 4th. The Amendment would further give Congress 30 days to review and accept-or-reject. A failure to reject would constitute an approval. That would give the new administration the ability to take control over the bureaucracies in practice by April or May.
As it is, the Cabinet is not in place until summer and does not start exercising real control until autumn with policy consequences starting in full swing until nearly Christmas.
An administration dealing with the Crisis-du-jour has more immediate control: a Ruby Ridge or Waco is clearly within the new administration's control sooner. The control is more of a minor, unit-level logistic and wholly tactical nature.
But what of control of strategy and systemic logistics? These take time and interaction with Congress to implement. How can an administration that must submit a new strategy to Congress be responsible for an action or misfeasance unless and until the whole oversight or legislative process is attempted?
Once we see that Clinton and his supporters are merely replicating the fallacy of the stoning the rape victim, there is little to make of his teenagerish anger except a show for his peers.
Friday, July 21, 2006
Technology Rewrites the Book - New York Times
Technology Rewrites the Book - New York Times Self-publishing for the masses. The old days of a print shop to print fliers is coming back with many fantastic repercusions.
Thursday, July 06, 2006
Power Line: The eternal meaning of Independence Day
Power Line: The eternal meaning of Independence Day
I love these types of articles on great speeches.
I love these types of articles on great speeches.
How Eisenhower solved illegal border crossings from Mexico - Yahoo! News
How Eisenhower solved illegal border crossings from Mexico - Yahoo! News
So if you chase out 80,000 people through round ups, you get nearly 10 times that many leaving voluntarily?!!
So to get rid of 12 million, we don't need to get rid of 12 million?
I would bet that you probably don't even need to get 1.2 million. You just need to show that you are serious. This sounds a lot like the "broken window" theory or the graffitti-on-the-subway problem. If you get serious about enforcing rules, pretty soon there is little enforcement to be done.
So if you chase out 80,000 people through round ups, you get nearly 10 times that many leaving voluntarily?!!
So to get rid of 12 million, we don't need to get rid of 12 million?
I would bet that you probably don't even need to get 1.2 million. You just need to show that you are serious. This sounds a lot like the "broken window" theory or the graffitti-on-the-subway problem. If you get serious about enforcing rules, pretty soon there is little enforcement to be done.
Friday, May 26, 2006
Sunday, May 07, 2006
Electronic document redaction problems
Wednesday, May 03, 2006
Monday, April 24, 2006
OpinionJournal - Featured Article
OpinionJournal - Featured Article
Sharansky is on top of his game again.
Sharansky is on top of his game again.
Tuesday, January 31, 2006
The American Thinker
The American Thinker says it all. What else can I say? We have lost a great economic scientist.
Friday, January 27, 2006
The American Thinker
The American Thinker
has an interesting article on Hamas's win. Many blogs are writing about it.
Some of the Democrats are acting like this was a "See, I told you so" moment for Bush's pursuit of democracy in the Middle East.
This does give us a moment to consider why is democracy important?
Does it constrain prospective followers of Machiavelli's treatise The Prince?
Does it guarantee peace?
Does it eliminate corruption?
Does it guarantee each party the right to hold power from time to time?
It does none of these. It is capable of each of them, but having a process that is democratic does not guarantee any of them.
As usual, the easiest means of understanding a concept is look at its opposite's most salient characteristics for a compare and contrast exercise. Autocracy or despotism is the strong opposite: one person rule versus the people's rule. Oligarchy is more like autocracy, but I will hold that analysis for now.
In autocracy, the autocrat maintains power by controlling discussions. He promotes those that repeat his propoganda. He holds power by eliminating competing political groups. Literally, eliminating the voices either by imprisonment or killing. The autocrat changes his cabinet for failing to toe the line or meet the arbitrary demands of the autocrat. The people only receive benefits to the extent that it serves the autocrat retaining power.
In this process, sudden change is the worst possible outcome: change is difficult to control or to predict its outcome. Continuity is focused on the autocrat. Life is unpredictible for the population because it instills fear and a desire to avoid personal destruction. Only armed revolt will cause the whole cabinet and political appointees to be removed in one moment.
Democracy in the modern sense (which is republican government in the political scientist's vocabulary) is the opposite of these. Life is predictible for the population and unpredictible of the elites. Continuity is focused on the population. Sudden change comes for politicians and populations alike, but in pre-set doses called "Election Day." Discussion is encouraged. The discussion will always have a dose of "Look what criminals the officeholders are."
What this means in practice is that the population will focus its wealth-envy on officeholders bilking the public coffers. While stopping this bilking or rent-seeking from happening at all is a fight against human nature, democracy controls it by throwing out one set of rascals lock-stock-and-barrel and putting in a different set of thieves.
The first thing the thieves do is uproot the rascals connections with the systems. The thieves have an incentive to disconnect the rascals from the system so that the thieves can insert themselves in the system. If the rascal had a contract or a bribe from the rascal's cousin to have the cousin build a 5-foot sidewalk for $100,000, the thief wants to shine the light on the rascal's self-serving contract. The thief will prosecute or chase the rascal's cousin away. For a period of time after the thief has cleansed the system of the rascal and his cousin, the thief cannot insert his own cronies too obviously. The public would cry for blood while the press and public are still watching.
When the press and public focus their attention on some other rascal's uprooting, the thief can start building his own network. This takes time. Usually months or years. In Indiana, we have had 16 years of Democrat rule. The state's government has many problems. The Republicans have been finding many problems and changing policies that favored Democrat rent-seekers. Indiana's government is going to be the most efficient immediately after the process of change is done focusing on removing rent-seekers. Once the process turns to building a new system, the Republican rent-seekers will start to set their own rent-seekers in place. This ebb and flow cleans the government like a ocean's wave cleans a storm-ravaged beach.
If the thief is a political appointee, he has to be even more careful. If he looks too corrupt, it is desirable for the elected executive or body to use the thief as a scapegoat for their own failures. If the thief is elected, he is the most protected because he may be able to be re-elected. Think of Marion Barry or the political machines.
So what does all this theory tell us about Hamas taking charge? Fatah is corrupt. They are rascals. Hamas' thieves want to sustain their new-found power. They will push Fatah's rascals out of government, maybe even out of Arab Palestine. Fatah will have a chance (even if they might fail to use it) of cleansing their party of Arafat's people. Arafatites might find it safer for themselves to take their stolen money in Switzerland and retire elsewhere. While other Arafatites might use their Swiss funds to rebuild the party, these Arafatites will be circling their prey in the Hamas government. They will seek out Hamas's corruption to highlight. They will seek Hamas's failures in its supposed area of strength: welfare handouts and social services.
While in the short-term tactics, it would seem advantageous for Bush to support Abbas and ignore Hamas. I think this may be a long-term strategic error. Abbas should be forced to address Hamas's foreign policy agenda. This will deadlock the peace process in the near term, but it will force Hamas to bear the politcal burden of foreign policy failures. It may lead to war and many persons' deaths. This is a sickening thought. However, the threat of war will not go away through peace talks when the Muslim population sees any treaty as a hudna -- a temporary (i.e., no longer than 10 years) truce while the Muslims try to gain strength. The peace process is doomed to failure if the Palestinian Arabs cannot come to terms with the notion that war will only bring them destruction. Even so, destruction to a religious zealot is only of this world, since destruction in war only leads to eternal paradise.
The Palestinian Arabs must find a personal advantage in peace. Removing the corruption of the Palestinian Arab government is not necessarily possible, it is possible to have a see-sawing of power between multiple factions that lead to popular outrage. The outrage that is now focused on the Israelis and Americans being re-focused on their own leaders -- that is the power of democracy. The ebb and flow begins.
The human condition yearns for peace to raise a family. It yearns for comfort. It yearns to focus on matters beyond survival. Removing or reducing corruption's road block to providing for survival starts the process.
In America, the rent-seekers have become so efficient, we have moved on to the next problem in democracy. The ebb and flow has been channeled by the rent seekers.
The Bush Administration needs to encourage institutions in the Palestinian Arab community that makes the ebb and flow of power more likely on election day. The Administration neither can nor should appear beholden to Fatah. If Hamas cleanses well, many Fatah members will go to jail or exile. The "New Fatah" will not necessarily bring peace. In fact, a third party would be my preference. Fatah of Arafat would be best to die in ignomy. The Arab world needs something else. Let the ebb and flow bring something new. Let it ressurrect Fatah. The point is that corruption needs to have new patrons for now and a continuance cleaning cycle to remove it entirely. That is when we will have first hope of finding peace.
has an interesting article on Hamas's win. Many blogs are writing about it.
Some of the Democrats are acting like this was a "See, I told you so" moment for Bush's pursuit of democracy in the Middle East.
This does give us a moment to consider why is democracy important?
Does it constrain prospective followers of Machiavelli's treatise The Prince?
Does it guarantee peace?
Does it eliminate corruption?
Does it guarantee each party the right to hold power from time to time?
It does none of these. It is capable of each of them, but having a process that is democratic does not guarantee any of them.
As usual, the easiest means of understanding a concept is look at its opposite's most salient characteristics for a compare and contrast exercise. Autocracy or despotism is the strong opposite: one person rule versus the people's rule. Oligarchy is more like autocracy, but I will hold that analysis for now.
In autocracy, the autocrat maintains power by controlling discussions. He promotes those that repeat his propoganda. He holds power by eliminating competing political groups. Literally, eliminating the voices either by imprisonment or killing. The autocrat changes his cabinet for failing to toe the line or meet the arbitrary demands of the autocrat. The people only receive benefits to the extent that it serves the autocrat retaining power.
In this process, sudden change is the worst possible outcome: change is difficult to control or to predict its outcome. Continuity is focused on the autocrat. Life is unpredictible for the population because it instills fear and a desire to avoid personal destruction. Only armed revolt will cause the whole cabinet and political appointees to be removed in one moment.
Democracy in the modern sense (which is republican government in the political scientist's vocabulary) is the opposite of these. Life is predictible for the population and unpredictible of the elites. Continuity is focused on the population. Sudden change comes for politicians and populations alike, but in pre-set doses called "Election Day." Discussion is encouraged. The discussion will always have a dose of "Look what criminals the officeholders are."
What this means in practice is that the population will focus its wealth-envy on officeholders bilking the public coffers. While stopping this bilking or rent-seeking from happening at all is a fight against human nature, democracy controls it by throwing out one set of rascals lock-stock-and-barrel and putting in a different set of thieves.
The first thing the thieves do is uproot the rascals connections with the systems. The thieves have an incentive to disconnect the rascals from the system so that the thieves can insert themselves in the system. If the rascal had a contract or a bribe from the rascal's cousin to have the cousin build a 5-foot sidewalk for $100,000, the thief wants to shine the light on the rascal's self-serving contract. The thief will prosecute or chase the rascal's cousin away. For a period of time after the thief has cleansed the system of the rascal and his cousin, the thief cannot insert his own cronies too obviously. The public would cry for blood while the press and public are still watching.
When the press and public focus their attention on some other rascal's uprooting, the thief can start building his own network. This takes time. Usually months or years. In Indiana, we have had 16 years of Democrat rule. The state's government has many problems. The Republicans have been finding many problems and changing policies that favored Democrat rent-seekers. Indiana's government is going to be the most efficient immediately after the process of change is done focusing on removing rent-seekers. Once the process turns to building a new system, the Republican rent-seekers will start to set their own rent-seekers in place. This ebb and flow cleans the government like a ocean's wave cleans a storm-ravaged beach.
If the thief is a political appointee, he has to be even more careful. If he looks too corrupt, it is desirable for the elected executive or body to use the thief as a scapegoat for their own failures. If the thief is elected, he is the most protected because he may be able to be re-elected. Think of Marion Barry or the political machines.
So what does all this theory tell us about Hamas taking charge? Fatah is corrupt. They are rascals. Hamas' thieves want to sustain their new-found power. They will push Fatah's rascals out of government, maybe even out of Arab Palestine. Fatah will have a chance (even if they might fail to use it) of cleansing their party of Arafat's people. Arafatites might find it safer for themselves to take their stolen money in Switzerland and retire elsewhere. While other Arafatites might use their Swiss funds to rebuild the party, these Arafatites will be circling their prey in the Hamas government. They will seek out Hamas's corruption to highlight. They will seek Hamas's failures in its supposed area of strength: welfare handouts and social services.
While in the short-term tactics, it would seem advantageous for Bush to support Abbas and ignore Hamas. I think this may be a long-term strategic error. Abbas should be forced to address Hamas's foreign policy agenda. This will deadlock the peace process in the near term, but it will force Hamas to bear the politcal burden of foreign policy failures. It may lead to war and many persons' deaths. This is a sickening thought. However, the threat of war will not go away through peace talks when the Muslim population sees any treaty as a hudna -- a temporary (i.e., no longer than 10 years) truce while the Muslims try to gain strength. The peace process is doomed to failure if the Palestinian Arabs cannot come to terms with the notion that war will only bring them destruction. Even so, destruction to a religious zealot is only of this world, since destruction in war only leads to eternal paradise.
The Palestinian Arabs must find a personal advantage in peace. Removing the corruption of the Palestinian Arab government is not necessarily possible, it is possible to have a see-sawing of power between multiple factions that lead to popular outrage. The outrage that is now focused on the Israelis and Americans being re-focused on their own leaders -- that is the power of democracy. The ebb and flow begins.
The human condition yearns for peace to raise a family. It yearns for comfort. It yearns to focus on matters beyond survival. Removing or reducing corruption's road block to providing for survival starts the process.
In America, the rent-seekers have become so efficient, we have moved on to the next problem in democracy. The ebb and flow has been channeled by the rent seekers.
The Bush Administration needs to encourage institutions in the Palestinian Arab community that makes the ebb and flow of power more likely on election day. The Administration neither can nor should appear beholden to Fatah. If Hamas cleanses well, many Fatah members will go to jail or exile. The "New Fatah" will not necessarily bring peace. In fact, a third party would be my preference. Fatah of Arafat would be best to die in ignomy. The Arab world needs something else. Let the ebb and flow bring something new. Let it ressurrect Fatah. The point is that corruption needs to have new patrons for now and a continuance cleaning cycle to remove it entirely. That is when we will have first hope of finding peace.
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