Collateral Damage in the NFL strike

Here in America, of course, we are sad and concerned for our Japanese friends....and of course we are riveted by the frightening videos on the news. But, American males are far more concerned about March Madness (The CU buffs got SCREWED!!!!) and the NFL labor dispute.

Friday night I was watching the CU-Kansas game at the local sports bar with a bunch of guys, several of whom may or may not be entrepreneurs who provide the service of allowing sports fans to take a financial interest in a sporting event. These guys do most of their business during the NFL season, that is, if they are even in this business, and I am certainly not saying that they are.

These businessmen are of course very concerned about the NFL situation, and the news about the breakdown in labor talks had just come out Friday afternoon. One of these guys, who may or may not be named Alfonzo, had this to say:

What about us? These guys don't care about us. If there is no NFL season, I am going to have to go out and get a job. And I have some serious holes in my resume. Would you hire me?

My answer to Alfonzo is that I would, since the fact that he may have been involved in the business we were discussing for so long means to me that he is likely both trustworthy and good at math. But, I am not in position to hire anyone, and understand his angst.

Here is my sports labor prediction: The NFL is making too much money, both the players and owners, to kill their golden goose. Players with short careers can't afford to miss a year, and a lot of teams need cash flow to pay their debt service on new stadiums. So, the season will not be canceled. The NBA, on the other hand, has some serious business model problems that may require an NHL like lockout to solve.

How Fragile Our Societies Are.

The situation in Japan points out how fragile our lives really are. As far as preparation for disaster goes, Japan in the anti-Haiti.....fairly wealthy, with strong building codes, and a cultural history that remembers past disasters. If there was a country that is prepared for a natural disaster, you would have to expect is to be Japan.

Yet, look at what is happening. Thousands dead, towns destroyed, power outages and a threat of a severe nuclear meltdown. One of the most civilized societies in history thrown into turmoil.

Humans have spent generations developing technologies that allow us to live our current comfortable lives. Middle class people today live far better lives than the rich did 100 years ago, when you take all we have into consideration. Yet, we still can not tame our planet, and it has the ability to throw us back into the stone age pretty fast. We pretend we can build structures strong enough to survive earthquakes, but can we? I remember reading a boast by the extremely dangerous Army Corps of Engineers in the early 90's that they had tamed the Mississippi River.....right before the floods on 1993. Are we just kidding ourselves?

So, don't take you electricity, smooth roads, and electronic entertainment for granted. It could all be gone in a flash!

Interesting Business Problem

Next week the first round of March Madness comes to Denver. 8 teams will be playing games here on Thursday, and the winners play on Saturday. As I was pointing out to Banjo Billy today, thousands of fans will be traveling to Denver on short notice for Thursday's games, and some staying for Saturday. That means a lot of people in town on Friday with nothing to do, and we happen to do tours in Denver that tourists just love.

So, here's the problem: How do we get the word out to the fans of those 8 teams that are coming to town in the time between when they are announced on Sunday night, and they have time on their hands on Friday? I have a few ideas, but if any of my brilliant young former Econ students who are now studying business would like to show of their genius, I'd love to hear from them.....or anyone else.

Let's see who has the best idea.

Boehner Seems Reasonable.....for about 15 minutes

Speaker of the House John Boehner is not one of my favorite people, and not because I hate Orangemen. In fact, I have a lot of good friends who went to Syracuse. I do, however, have a dislike for lying scum who take big payoffs from lobbyists and help the rich at the expense of the health of the country. So I was shocked that I actually had some respect for this particular orange man for about 3.5 minutes this morning.

On the front page of the WSJ today is a story about Boehner's plans to tackle the costs of Social Security and Medicare. Now, anyone who understands the long-term fiscal trouble our country is in knows we have to do something about these programs (they also know that taxes will also have to be raised, the military budget cut, and our ridiculous health care costs addressed, which Boehner did not address). So, good for him. I was even more encouraged by this quote in the story:

"I offered to the president we could lock arms and walk out and begin the conversation about the size of the problem," Mr. Boehner said, adding that Mr. Obama responded "positively."

Wow, work with the opposition to solve a real problem, the mention of which is loaded with political danger! Then I got to this part of the story:

Mr. Boehner made it clear the Republicans are not themselves offering a detailed plan anytime soon. Rather, the budget is likely to contain cost containment goals, but no specific ideas on how to achieve them.

And there we go, back to the bullshit! Cost containment goals but no specifics? Just the same old bullshit from an old bullshitter. We are going to say we have goals to fix the problem, but leave the specifics up to someone in the future after we have retired. So, in fact Boehner has proposed nothing of significance.

I do wonder why he would say this. Proposing cuts to seniors' benefits is the third rail of politics, and he just put his foot on it. And he did it without even a real plan that would do anything. So, they way I see it, he has given the Democrats a club to beat the GOP over the head with....cuts to social security....that will heavily influence the group of people most likely to vote, and most easily frightened. Even the Democrats are smart enough to figure out what a gift he just gave them. And he did it without even a real plan that would benefit the country, or even the intent of developing one. Is he an idiot?

As if to answer the "is he an idiot?" question, he announces today that he is mounting a defense of the indefensible and unconstitutional "Defense of Marriage Act", which should have been called the "Discrimination against people who make us uncomfortable act". Go ahead orange dude, take it to the Supreme Court and try to explain how that law doesn't violate the 14th Amendment.

Nice work Mr. Speaker. You were off my "complete asshole" list for 3.5 minutes. Now, you are up there just a few rungs under Sarah Palin.

Bad Governments Kill Economies

This week in my macroeconomics classes we have been discussing what makes a country productive, and therefore wealthy. It is beyond dispute that investment in human capital, technology and infrastructure will facilitate economic growth. Also beyond dispute is that corrupt incompetent government will do just the opposite. And the worst thing that can happen to an economy is a crazy dicatator like Kim Jong Il or Hugo Chavez.

Along these lines of thought are a couple articles in today's NY Times. Tom Friedman, who I link to often on this blog because he is the most sane commentator in the country, has spent a lot of time in his life trying to figure out the Middle East. His column today has an interesting list of things that he believes has helped to incite the uprisings we are now seeing accross the Arab world, including Google Earth. Really. Go read his column HERE. In general his column cites that the Arab world, and particularly the young, have become more aware of how crappy their governments have performed compared with China (which used to be far poorer than Egypt) and their enemy Israel, where corrupt politicians are actually put in jail.

And let's not forget bad government policies here at home. One of the most egregious cases of stupid government here in the US is our subsidies for agriculture. Most of this $20B per year goes to big corporations, and also is focused on subsidizing things like corn, which is helping to make us fat. So, we spend $20B a year to be less healthy, and increase the profits of corporations who do not need our money. Brilliant! Mark Bittman writes about food for the Times. He suggests we redirect our subsidies toward the fruits and vegatables that we would make us healthier if we were to consume more of them. Like fixing our tax system, this is an idea that whose logic is so crystal clear that you can be sure our politicians will never enact it. Read it here before your enjoy your cheesesteak, fries, and corn syrup sweetened soda for lunch.

A REAL Hero!!

We throw the word "hero" around pretty easily these days. I have probably written here that Dave Barry is one of my heroes. Win the big game, you are a hero. Last week Kip and I went to the opera for her birthday, and the cast received a standing ovation, as if they had done something heroic. Not to belittle these achievements, but are athletes, singers and even Dave Barry really heroic?

They aren't compared to the Congressman John Lewis. The Boulder International Film Festival took place over the weekend, and we went yesterday afternoon to see the film "Freedom Riders", a documentary about the brave young men and women who took on the Jim Crow laws of the south in the early 60's. It is an amazing story that shows the courage of these people, who faced beatings and abuse at the hands of cowardly racists, who attacked small groups of non-violent young people in armed mobs with the protection of corrupt police. At the same time, this film made me feel ashamed that I am a white American yet proud of how far our nation has progressed in 50 years.

One of the Freedom Riders was John Lewis, who is now a Democratic Congressman from Georgia, a state where he would likely have been unable to safely vote in 1961. Rep. Lewis also attended the screening, and answered questions afterward. I realized during the film and as he spoke that for one of the few times in my life, I was in the presence of a real hero. Here is a guy who risked his life to right a wrong, stuck to his non-violent convictions, and helped change the world for the better. He could easily have stayed in law school and let others fight the fight, but he acted.

Lewis of course received a hearty standing ovation from the audience when he came on stage after the film. After, I said to Kip that if the audience had given a standing ovation to the opera singers we had seen on Tuesday, that Lewis deserved something about 10 times as enthusiastic.

I know some of my students and former students read this blog, and many are young enough that this kind of racism in America seems like distant history. When Obama was elected and I told my class I never thought I would live to see a black president, many didn't see what the big deal was. While it is great that today's young people see race far differently than older generations, they should still understand the struggles that had to take place for us to get here.

The good news about this film is that you will be able to watch it in May, as it was made for American Experience on PBS. And there is already a web site for the film, which you can visit HERE. Don't miss it!

Oh, interesting side note: Congressman Lewis was introduced by our Congressman, Jared Polis, who is openly gay. Lewis made it clear that he supports equality among all people!

Who pays for the war on drugs

One of the things that economists know for sure (and there aren't many!) is that if you want less of something, tax it. I am pretty sure most economists would prefer a legalize and tax approach to drugs than our expensive, destructive, and unsuccessful "WAR ON DRUGS".

From today's NY Times, you should enjoy this short little take on how the costs of drugs are pushed onto poor people, without any compensation for it. Another reason to re-think a horrible policy, especially at a time when everyone is concerned about government spending.