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Collateral Damage from the War on Drugs


Central American kids are collateral damage from the War on Drugs that is a total failure and will always be so. The prohibition of alcohol caused violence, and so too the prohibition of drugs. But history is lost on our political class that features the dim-witted and lily-livered … not so much from addiction to booze as from addiction to re-election and power.

Blame the Good Sisters.


Let me preface my remarks about how they ruined the English language by saying I love nuns. Especially the Sisters of the Holy Child Jesus who taught me in grammar school. Smart, smiling, interested in you, dedicated. Every World Series, they lugged in TVs from God-knows-where and we watched every inning. That was when the game was played under the sun, the way God wants it. The nuns knew how to swing a bat … in the case of the classroom, a yard-stick that would crush the knuckles of us, the many, the happy class clowns (most everybody because most everybody was Irish). Contrary to disinformation spread by a few bitter old men, we weren’t traumatized by the Sisters’ corporal calls to order. It was the cost of doing business, the entertainment business. Anyways, those smacks didn’t smart half as much as dear old dad’s belt bashing one’s buttocks.  Those were the days!

Now, to the point. Why do the likes of The Washington Post, The New York Times, and The Wall Street Journal write things like: The deal was closed between he and they?

Jamie Trickett would say: No, Sistah, we weren’t fighting–me and him are cousins.  Sister Mary Francis would say: He and I are cousins. Repeat after me: He and I are cousins. He and I are cousins. He and I are cousins. He and I are cousins.

Richie Meelia would say: Motha, Danny and me went to Russo’s and got this candy because my motha’s sick and I didn’t have any lunch. Mother Mary Cabrini would say: Danny and I went to Russo’s. Richie would say: Did you get some Flavah-Pops, Mothah? Step, step, step and WHACK! Repeat after me: Danny and I went to Russo’s. Danny and I went to Russo’s. And you, Mr. Meelia, write it on the blackboard until your arm falls off. Richie thought it was worth it and all the boys just knew she thought it was funny.

All across the country, nuns drilled the troops: He and I, he and I, you and I, we and they were tied in the ninth, she and you should stop fighting, we and she, we and you, you and they, they and I, she and I, your sister and we!! I and they!!! The nominative case was burned into the very synapses of our hypothalamus. Goodbye, accusative or objective case. Hello, Washington Post: … [it] was between he and she. Hello, New York Times: …  the facts contradict he and they alike. Hello, bloggers … you’re unspeakable!

Half the nuns were French Canadian and half were Irish, so they all must have hated the English. They struck back at the oppressors by undermining their language through a secret, subtle, clever strategy. A lousy writer is only a pawn in the Good Sisters’ game. Don’t blame anybody but they.

God Got Here Before Theology


God is first a subject of philosophy. Later, he’s a subject of theology. Philosophy is the love of wisdom … more precisely, the study of first things: who we are, where we came from, where we’re going. God is part of that study, the only logical answer, mind-boggling as it may be, to “where we came from”. Theology is the study of God’s revelation of himself to humankind: like talking from the clouds, and inspiring prophets, and Jesus.

I think it’s important to distinguish between philosophy and theology now that most media are totally clueless about the distinction. They wrap them both up in one messy package, as if you had to believe in the resurrection of Jesus in order to believe in God. Ah … you don’t “believe in” God in the same way some of us have gone on to believe in the resurrection from the dead … first you know God through plain old reason–he has to exist, and since he exists he has to be all-good, and since he’s all-good, he has to somehow reward good and punish evil. That’s philosophy. You may go on to be helped by faith to know the things he’s said and done that can’t be deduced from reason’s findings of “first things”, but they’re not unreasonable. That’s theology.

Measuring Corporate Giving


By: Maria Nardell, onPhilanthropy, 11/29/06

First of all, it is a challenge to develop a method of benchmarking second-grade reading improvements and translating that output (e.g., the number of students who pass a reading diagnostic test) into terms equivalent to the given input (e.g., volunteer time). Second, even if such a formula were devised, Thompson observed, how would one compare the impact of education programs in places as diverse as Vermont and India?

Most companies rely upon their nonprofit partners for the statistics to measure social impact. As with corporate giving programs, however, there is no single standard by which nonprofits gather, analyze or present that data, and so Thompson would question a company that states it has exact data detailing the impact of its giving. …

According to Farron, “You can look at social return in a couple of ways.” One way is non-monetary. That is, social change is measured by quantity times quality, allowing for “customizable social units of outcome,” such as the number of lives saved by a vaccine or the number of people educated through a scholarship program. The other way is to think about social return in a monetary sense. The socio-economic value of corporate giving investments can consist of the money society saves or the increased number of people contributing toward the tax base. Some companies also measure the market value of their investments, although Farron points out that most companies don’t accurately determine the percentage of goods and services actually being used. (For example, brand-new donated computers sitting in an organization’s closet don’t do anyone any good.) …

Common Sense Bashing at the Wall Street Journal


By Alan Tonelson Monday, November 27, 2006

Three cheers for the Wall Street Journal headline writer who has just given the nation a priceless lesson in mudslinging. It was bad enough for Journal readers to wake up the morning of November 16 to read that “China-Bashing Could Flourish Under Pelosi.” What was worse was just what this writer thought the new House Speaker-designate’s offenses actually were. According to the Journal, China-bashing apparently consists of denouncing as “butchers” rulers who order the killing of peaceful civilian protesters. But it also apparently consists of warning that China’s massive holdings of U.S. government debt could threaten American national security. And of deriding as “wishful thinking” Bush administration hopes that a government determined to support the likes of North Korea, Iran, and Sudan will become a “responsible stakeholder” in the international system. It even apparently consists of urging the White House to combat China’s predatory economic practices by using a World Trade Organization designed precisely to eliminate such abuses. At the least, Journal headline writers should adopt an equal opportunity approach to invective Henceforth, let them label all who decry the mass murder of civilians, as well as the repression of women and non-Moslems as “Al Qaeda-Bashers.” All critics of the Khartoum government’s policies of genocide in Dafur and elsewhere should be lumped together as “Sudan-Bashers.” What a shame, in fact, that this practice didn’t start decades earlier. Then The Journal could have treated us to such gems as “Nazi-Bashing Could Flourish Under Roosevelt.”

(Source: “China-Bashing Could Flourish Under Pelosi,” by Neil King Jr., The Wall Street Journal, November 16, 2006)

Milton Friedman Was Right


By HENRY G. MANNE, Wall Street Journal, November 24, 2006; Page A12

Milton Friedman famously declared that the sole business of the managers of a publicly held corporation was to maximize the value of its outstanding shares. Any effort to use corporate resources for purely altruistic purposes he equated to socialism. He proposed that corporation law should prevent managers from straying off the reservation to join the altruists, a power now almost universally granted them by state legislation.

At a conference 34 years ago, celebrating Friedman’s 60th birthday, I presented a paper questioning that dictum by noting that the vast part of apparently nonprofit-oriented behavior by corporate managers was really — and necessarily — a profit-maximizing response to business, social or political pressures dressed up to look like something else. For such a strategy to be successful, the behavior had to appear to be nonprofit maximizing, and, of course, had to be called something like “social responsibility.”


Since it was difficult or impossible to distinguish a profit motive from a charitable motive in any particular corporate action, a strong rule against corporate altruism, as Friedman was advocating, would invite judges to examine the propriety of a significant set of managerial decisions. I argued that American corporation law had traditionally had a strong “business judgment” rule whose principle aim was to prevent judges from even engaging in that kind of examination, which they were perhaps more likely to get wrong than to get right. Thus, if any plausible basis existed for a bona fide managerial decision, no matter how charitable it looked, I argued, we did not want a stronger rule that would invite judges to second guess managers.

The assembled audience of Friedmanites, as we were sometimes called — Are we all Friedmanites now? — was aghast that I dared to counter one of the master’s most pointed proposals, and the immediate response from the audience was hostile. Well, it was, until Friedman took the floor to declare that “I agree with everything that Henry said.” That settled that. I assumed that I would not hear Friedman again declaring that corporate social responsibility was the equivalent of socialism. Consequently, I was chagrined over the ensuing years to hear him make the same pronouncement many times, though to my knowledge not with any explicit proposal for a change in the legal rule.

* * *

Now I realize (I should have known) he was absolutely correct about the significance of proposals for socially responsible corporate behavior, whether they emanated from within or outside the corporation. These proposals reflect, as well as anything else happening today, the inability of many commentators to distinguish between private and public property — in other words, between a free enterprise system and socialism. Somehow large-scale business success, usually resulting in a publicly held company, seems mysteriously to transform the nature of numerous individuals’ private investments into assets affected with a public interest. And once these corporate behemoths are “affected with a public interest,” they must either be regulated by the state or they must act as though they are owned by the public, and are therefore inferentially a part of the state. This attitude is reflected not merely by corporate activists, but by many “modern” corporate managers.

An integral part of the older notion of public utility regulation required that the enterprise be, or act like, a monopoly (whether “natural” or not), in order to be affected with a public interest. But in today’s confusion, there is no such requirement. No arguments, weak as they are, about natural monopoly, market failure, government creation of corporations or the alleged government gifts of limited liability and perpetual existence, are required to justify the demands now regularly placed on business entities. Any large enterprise, no matter how competitive its industry and no matter how successfully it is fulfilling the public’s desires, has a social responsibility — a term that makes mockery of the idea of individual responsibility — to use part of its resources for “public” endeavors. Today’s favorite causes are environmental protection, employee health, sales of goods at below-market prices, weather modification, community development, private enforcement of (not merely abiding by) government regulations and support of cultural, educational and medical facilities.

How did this transposition from private to public responsibility come about? After all, even the largest corporation started simply as an idea in someone’s head. At first this person hires employees, borrows capital or sells equity, produces goods or service and markets a product. Nothing about any of these purely private and benign arrangements suggests a public interest in the outcome. But then the business begins to grow, family stock holdings become more diffused, additional capital is required and, voilà, another publicly held corporation. In other words, another American success story.

But what has happened to implicate public involvement in the management or governance of these enterprises as they grew from a mere idea? Nothing. And if that nothing be multiplied by tens or hundreds or thousands, the product is still zero. So where along the line to enormous size and financial heft has the public-private nexus necessarily changed? True, there are now a large number of complex and specialized private contracts, but every single one of these transactions is based on private property, freedom of contract, and individual risk and reward. If one apple is a fruit, even a billion apples do not become meat.

The origins of this transformation lie in the minds of people who do not like or appreciate the genius of capitalist success stories, including always politicians, who will generally make any argument in order to control more private wealth. Of course, the social responsibility of corporations is always tied to the proponents’ own views of compassion or justice or avoidance of a cataclysm. But the logic of their own arguments requires that essentially private corporations be viewed as somehow “public” in nature. That is, the public, or the preferred part of it, often termed “stakeholders” (another shameful semantic play, this time on the word “shareholders”), has a pseudo-ownership interest in every large corporation. Without that dimension in their argument, free market logic would prevail.

The illusion of great and threatening power, the superficial attractiveness of the notion, and the frequent repetition of the mantra of corporate social responsibility have made this fallacy a part of the modern corporate zeitgeist. Like the citizens who were afraid to tell the emperor that he was naked, no responsible business official would dare contradict the notion publicly for fear of financial ruin, even though the practice continues to cost shareholders and society enormous amounts. This is especially so in large-scale retail businesses like Wal-Mart or Coca-Cola or BP that are highly vulnerable to organized public criticism. Our laws against extortion do not function effectively when it comes to corporations. And so to some extent these private entities have indeed, via the social responsibility notion, been converted into crypto-public enterprises that are the essence of socialism. Milton Friedman was right again.

Mr. Manne is dean emeritus of the George Mason University School of Law.

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Voters’ Doubts About Sharing in Prosperity Send a Danger Signal


By ALAN MURRAY (regular columnist of the Wall Street Journal) , Oct. 26, 2006

… Still, the economic backdrop for election 2006 should raise a warning flag about the future. Large numbers of Americans seem to have lost their belief in John F. Kennedy’s famous aphorism that a rising tide lifts all boats. “They know the economy is white hot,” says political analyst Charlie Cook, “but they also know they aren’t in it….There’s a feeling that some people are getting theirs, but we aren’t getting ours.”

There’s a well-known litany of reasons for that. Median earnings have been growing at a disturbingly slow pace, even as profits and high-end pay have soared. Health-care costs are not only increasing, they increasingly are being paid by consumers, not by employers or the government. Pensions are disappearing, as is job security — and any sense of long-term loyalty from employers. As pollster Peter Hart puts it, “there’s no gold watch” waiting at the end of a career these days. He cites a cartoon in which the boss says: “Mr. Jones, the reason we are letting you go is because you’ve given us the best years of your life.” Meanwhile, a thin slice of America is enjoying unprecedented prosperity. CEO pay is one of the most visible manifestations, rising in the past decade at triple the rate of the median worker’s pay. …

Russian Law Puts Foreign Aid Groups in Limbo


By GUY CHAZAN, WSJ, October 19, 2006; Page A6

MOSCOW — Hundreds of foreign human-rights groups and other organizations operating in Russia may have to suspend operations because they are entangled in red tape from a controversial new law.

A law passed earlier this year required all such outside organizations to reregister with the government. The law vastly increased state supervision of outside groups, and was condemned by several Western leaders as a threat to Russia’s embryonic civil society.

Now many are caught in Russia’s bureaucracy. While 175 foreign nongovernmental organizations submitted documentation on time, only 87 had their applications processed by the target date, said a spokesman for Russia’s Federal Registration Service, or FRS. That represents a fraction of the 400-plus such groups active in Russia. …

Real Wages Fail to Match a Rise in Productivity


New York Times, August 28, 2006, By STEVEN GREENHOUSE and DAVID LEONHARDT
… The median hourly wage for American workers has declined 2 percent since 2003, after factoring in inflation. The drop has been especially notable, economists say, because productivity — the amount that an average worker produces in an hour and the basic wellspring of a nation’s living standards — has risen steadily over the same period.
As a result, wages and salaries now make up the lowest share of the nation’s gross domestic product since the government began recording the data in 1947, while corporate profits have climbed to their highest share since the 1960’s. … At the very top of the income spectrum, many workers have continued to receive raises that outpace inflation, and the gains have been large enough to keep average income and consumer spending rising…. Economists offer various reasons for the stagnation of wages. Although the economy continues to add jobs, global trade, immigration, layoffs and technology — as well as the insecurity caused by them — appear to have eroded workers’ bargaining power. Trade unions are much weaker than they once were, while the buying power of the minimum wage is at a 50-year low. And health care is far more expensive than it was a decade ago, causing companies to spend more on benefits at the expense of wages.

Together, these forces have caused a growing share of the economy to go to companies instead of workers’ paychecks. In the first quarter of 2006, wages and salaries represented 45 percent of gross domestic product, down from almost 50 percent in the first quarter of 2001 and a record 53.6 percent in the first quarter of 1970, according to the Commerce Department. Each percentage point now equals about $132 billion.

Total employee compensation — wages plus benefits — has fared a little better. Its share was briefly lower than its current level of 56.1 percent in the mid-1990’s and otherwise has not been so low since 1966. Over the last year, the value of employee benefits has risen only 3.4 percent, while inflation has exceeded 4 percent, according to the Labor Department.

… For most of the last century, wages and productivity — the key measure of the economy’s efficiency — have risen together, increasing rapidly through the 1950’s and 60’s and far more slowly in the 1970’s and 80’s. But in recent years, the productivity gains have continued while the pay increases have not kept up. Worker productivity rose 16.6 percent from 2000 to 2005, while total compensation for the median worker rose 7.2 percent, according to Labor Department statistics analyzed by the Economic Policy Institute, a liberal research group. Benefits accounted for most of the increase…. Average family income, adjusted for inflation, has continued to advance at a good clip, a fact Mr. Bush has cited when speaking about the economy. But these gains are a result mainly of increases at the top of the income spectrum that pull up the overall numbers. Even for workers at the 90th percentile of earners — making about $80,000 a year — inflation has outpaced their pay increases over the last three years, according to the Labor Department. “There are two economies out there,” Mr. Cook, the political analyst, said. “One has been just white hot, going great guns. Those are the people who have benefited from globalization, technology, greater productivity and higher corporate earnings. “And then there’s the working stiffs,’’ he added, “who just don’t feel like they’re getting ahead despite the fact that they’re working very hard. And there are a lot more people in that group than the other group.”

In 2004, the top 1 percent of earners — a group that includes many chief executives — received 11.2 percent of all wage income, up from 8.7 percent a decade earlier and less than 6 percent three decades ago, according to Emmanuel Saez and Thomas Piketty, economists who analyzed the tax data.

The job numbers you really need to know


By Paul Kaihla, Business 2.0 Magazine senior writer, August 22 2006

“The big news is the drop [in job creation] since the expansion of the 1990s,” says Scott Schuh, a senior economist and policy advisor at the Federal Reserve Bank of Boston. “Fundamental job creation has not really come back, and that’s a puzzle.”

Job creation hasn’t rebounded to its late-’90s peak, but the reported employment numbers still look okay. Why? Simply put, for the past few years, the economy hasn’t been destroying as many jobs, and there’s been a mild rebound in job creation. That adds up to reports of net job gains.

But that modest increase in job creation is more of a blip in an otherwise long-term slide, economic experts say.

One could argue that the data suggests jobs are becoming more stable in the U.S., says Jonathan Leonard, an economist at the University of California at Berkeley’s Haas School of Business. “When you have jobs that come and go quickly, you get very high creation and destruction rates,” says Leonard. “But there now seems to be less churn in the labor market.”

However, lower job creation is fundamentally a bearish signal of the U.S. economy’s health and international competitiveness. “A recovery that doesn’t generate as many jobs as last time around is troubling,” adds Leonard.

My own guess is that the decline in job creation will continue as bosses at big companies use fears of offshoring and mass layoffs to impose more and more work on existing staff. Memories of over-hiring and subsequent layoffs during the bursting of the bubble are still too fresh.

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