Friday, May 29, 2009

Sotomayor as wedge issue

I've been on a little bit of a hiatus from blogging, but I am inspired to get back because of some interesting polling about Sonia Sotomayor. I have been thinking that her nomination would precipitate some splits in the GOP. Turns out I was right. There is a huge gender gap opening up among Republicans. Men in the GOP are not enthusiastic - in the Gallup poll cited, the difference between the "excellent/good" rating and "fair/poor" is 19% to 63%, or -44%. Among women, it's 33% to 43%, or -11% (must be some rounding in there). I picked this up from Andrew Sullivan.

44% difference among Republican men. 11% difference among Republican women.

I wasn't expecting there to be a gap like this based on gender, but I am not surprised. I was and am expecting a gap between moderate Republicans - those that are left in the party - and the diehard conservatives. This could be one of many wedge issues the Dems use against Republicans. Wedge issues used to be the domain of the GOP. Affirmative action is a great example. Republicans used affirmative action to drive a wedge between African Americans and blue collar Democrats.

Sotomayor's nomination could drive a wedge between moderate Republicans who actually do get along with Hispanics, because, for example, they live near them, work with them, know them, are friends with them, or are even - like my Dad - related to them (my brother-in-law is from Mexico). These are the Republicans who just don't have any reason to resent people who are different than them. These are Republicans who believe in those old-fashioned, traditional values of common decency and respect for people who work hard.

There are even some diehard conservatives who fit into this group. My grandparents were fundamentalist Christian conservatives who gave money to people like Jerry Falwell, but they spent their winters in McAllen, Texas, right on the Mexican border, where they got to know some Mexicans, and they liked them, because they were decent, hardworking people, just like my grandparents. If my grandmother heard of a woman who rose from the South Bronx to a Supreme Court nomination by virtue of hard work and education, she would have said, "Good for her." Because those were her values.

These decent, respectful Republicans and conservatives are going to be embarrassed by and resentful of idiots like Rush Limbaugh and Tom Tancredo. That is, they will be more embarrassed than they already are.

I'm not going to dignify the debate about whether or not Sonia Sotomayor was nominated to the Supreme Court based on her race and gender by looking at the issues. Was she nominated to the Supreme Court because she is a Latina? Sure. My answer to any white American male who resents this is simple: shut the hell up. If you were born a straight white American male, like me, you were born one of the most privileged people in the history of the world. For you to complain about someone else being elevated to a position of privilege to balance our collective cultural abundance is the height of arrogance and pettiness. Being born a straight white American male doesn't guarantee that you will be successful. It doesn't mean that you will automatically have it easy. But it does mean that there are a lot obstacles that aren't in your way that are in the way for others who do not share your ethnicity, nationality, gender, or sexual preference.

There are legitimate issues about how long we should hold onto affirmative action, and how to redress past racial and gender imbalances and injustices. But this is not the time to debate that. This is the time to celebrate progress.

Any white American male who begrudges Sonia Sotomayor's accomplishments is a pathetic crybaby and a wimp. The problem for the Republican party is that there are a fair number of straight white American men who actually fit that description. Starting with Rush Limbaugh.

The problem for Rush Limbaugh is that a number of those decent, hardworking Republicans are members of the United States Senate.

Quote of the day

"Vision without execution is hallucination."

-attributed to Thomas Edison, although this guy doubts that attribution. I don't care whether or not Edison said it, it is now one of my all-time favorite quotes.

I read this today in an article in the FT about Time Warner getting rid of AOL, finally"bringing the curtain down on one of the biggest and worst deals in history." Steve Case quoted Edison in a tweet, including himself among those who didn't execute properly. At least he's taking responsibility for his own supreme idiocy.

This should also put an end to any lingering discussion of "synergy," the idea that different parts of a media conglomerate can all profit by combining their different assets. This was an idea that I remember being popular as early as the '80's. It's a simple concept. One company buys up media properties in several different areas, and they collaborate. For example, a publisher buys the rights to a novel; the film studio in the same conglomerate makes a movie based on the book, and uses songs from the record company. Everyone wins.

But conglomerates have been tried before, in other industries, to disastrous effect. For example, Ford once owned multiple businesses that contributed to making cars. I heard once that Ford owned sheep farms, to supply wool for seats. The problem with this is that Ford is not necessarily good at making wool or raising sheep, and they can't coordinate production of the wool very well with making cars. The number of sheep is fairly static, and increases at a certain rate. The number of cars sold goes up and down much more dramatically. It's better for Ford to just buy the wool that it needs from regular sheep farmers. Same thing with lots of other products.

Synergy is a stupid idea in the media business for a slightly different reason. Let's take the example above. The book company within a conglomerate publishes an intense drama. Serious Literature. It would make a great movie. Probably won't make a lot of money, but it will attract top talent, and might very well be Oscar bait.

The best way to make money from a movie is to make a good movie. In our example, the synergistic approach to making a movie suggests that the movie studio owned by the conglomerate make the movie.

There are a couple of problems. First, the studio owned by the conglomerate may not be the best studio to make this particular movie. The best way to make a movie is to cast as wide a net as possible for the best possible producer. By limiting the choices of producing partner to one studio, the synergistic approach actually greatly reduces the options available for making the movie, which also greatly reduces the chance that it will be a good movie, and therefore that it will make money. So the synergistic approach is severely counterproductive. The same applies to the film studio and the record company. When the producers are making the movie, they will want access to the broadest possible range of music to incorporate into the movie. They will not want to be limited to one record company's catalog.

The second problem is that the book publisher and the film studio, although they are part of the same umbrella organization, are, very probably, different companies, with very different interests. One or both may have been separate companies that were bought by the parent conglomerate. If that's the case, they may be separate once again in the future - conglomerates are notorious for spinning off companies they once bought. Like, say, AOL being spun out of Time Warner. So the book publisher and the film studio also may have different interests than the parent. The publisher and the studio almost certainly will be staffed by people who are more loyal to the subsidiary company - the publisher or the studio - than they are to the parent. I discovered this when I worked for EDS (Ross Perot's company). At the time, it was part of GM, but the people who worked there made it clear that they considered themselves employees of EDS, not GM. They even had separate holidays. I was there one day when all GM employees had the day off for a certain holiday, but the EDS employees didn't get that day as a holiday (I can't remember what holiday it was).

GM, of course, eventually sold EDS. GM, of course, is about the best possible example of synergy failing as a corporate strategy. Of course, GM could be used as an example of many different corporate strategies failing.

When the book company sells the rights to the book, they want the highest possible price for it, so they can show a good profit on their balance sheet. The studio, of course, wants to pay the lowest possible price for it. This is natural. But it conflicts rather badly with the idea of "synergy." Which makes executing the vision very, very difficult.

I read a quote from a media executive that "Synergy is b---s---." This was from Jeff Bewkes. Who is the CEO of - you guessed it - Time Warner.

Thursday, May 28, 2009

HSX: Week of May 29, 2009

Have you been wondering lately whatever happened to Alison Lohman? For a while there, she was the hot new thing, then she disappeared for several years. Or at least she seemed to. I've been thinking about her lately. I liked her in Matchstick Men, although I wasn't a fan of the movie itself, because the ending was terrible. Now she's back, in a horror movie - sorry, "supernatural thriller," "Drag Me To Hell" (DRAGM). Not much subtlety with that title! Sam Raimi, director of Spider-Man and The Evil Dead, returns to his roots. I'm sure as heck scared of the trailer, but then again I have all kinds of trouble suspending disbelief when I watch one of these, so scaring me with just the trailer is actually not that hard. The stock is doing quite well today, up more than H$2, to H$57, its high. The strike price is H$20, and the call is up solidly, to H$4, which predicts a stock price of around H$65. The put is not doing too badly, either, which is a shade surprising. It's at H$2, up 3/8 today. That sounds like noise and feels like normal trading. It's at 94% on We're in Star Trek territory here. It's on 2,508 screens. Unless there are very different signals tomorrow, I think we can afford to be optimistic, and toss out $25 million as a prediction. Possibly higher. The man has been developing a cult following for roughly as long as Alison Lohman has been alive.
Stock: Long
Call: Long
Put: Short

Counterprogramming against Sam Raimi is Disney/Pixar with "Up" (UP), the latest of their animated movies. They are also, as usual, counterprogramming against Hollywood in general with a movie that doesn't seem to have many cliches or obvious plot twists or even a normal premise. It's about a guy who attaches a bunch of balloons to his house and floats away, with a little boy who has sort of stowed away. The stock is at H$168, down about a half today, and off from a high of H$175. Not surprising; every Pixar brings with it a huge amount of hype, becase, well, of Pixar's rather amazing track record. So I think that's normal noise. The strike price is H$60, with the call at H$5 and change, down 3/4 today. Again, I think that's noise. The put, "UPPU," possibly the only palindromic stock symbol in the history of HSX, is floating above H$2, marginally up today. Again, noise, I think. The stock predicts an opening weekend of $62 million. It's at 98% on It's on 3,766 screens, including about 1,500 3D screens, which rake in even more money. Last weekend, Night At The Museum raked in $70 million (albeit over 4 days) and it's not even a particularly good movie. This should make $60 million easily. Do I hear $65? Sure, why not.
Stock: Long
Call: Long
Put: Short

UPdate Friday morning: Both stocks are strongly up this morning, and the options are moving in the expected directions. I'm sticking with my forecast.

Looks like my enthusiasm for UP had a little too much influence on my enthusiasm for DRAGM. UP did, in fact, adjust up. It cleared $68 million for the weekend, beating the strike price handily. DRAGM, however, did $16.6 million, well below the strike price. I called everything on UP right, and everything on DRAGM wrong. Hmmm. Not quite sure what went wrong there. Maybe Sam Raimi does not have quite the fan base among horror aficianadoes that I thot. Stuff to think about. But looking forward to seeing UP!

Monday, May 25, 2009

Memorial Day

I realized today that the phrase "Happy Memorial Day" is a shade oxymoronic, since we are honoring people who have died in combat, which isn't really a joyous thing to celebrate. But I can't think of any other phrase to use.

President Obama broke some new ground today by honoring the African-American soldiers who fought for the Union in the Civil War. That's the start of a great tradition.

Wednesday, May 20, 2009

HSX: Memorial Day Weekend, 2009

We have a slightly odd weekend for HSX coming up. First, Terminator: Salvation For A Franchise is hoping on Thursday, a day early. Stocks won't adjust until Monday, Memorial Day. That's why I am posting about it now. Also, the formula is different than what it normally is. It's [Previous Box Office + (2.2*Box Office Fri-Mon)]. That makes figuring out the value of the stock a shade more complicated.

The stock is currently H$182, down $H10 today, which is really not a good sign. That's down from a high of H$215. Quite a drop. If it drops a couple more points tomorrow, it will halt around $180. If it makes $8 million on Thursday, then it has to make $172 million/2.2 over the next four days to make the price, over roughly $78 million. Add that to our assumed $8 million on Thursday, and you have a five-day total of $86 million, or roughly what Wolverine made over its opening weekend. Except that it is competing with Wolverine and Star Trek.

Don't believe the hype! I don't buy it. This movie is not being made because there's an interesting story, although that's not impossible. It's being made because the studio wants to suck some more money out of the franchise. That's not surprising, but it's also not inspiring. It's also obvious. The first two Terminator movies are great movies in and of themselves, apart from being great action movies. I didn't see the third one, and I am reasonably certain that I never will.

The director is McG, current boy wonder of Hollywood. This is only his fourth movie. Two of his first three were the Charlie's Angels movies. I've read several articles about him recently, but they all fail to mention one thing: Charlie's Angels 2 really sucks. It's just a terrible movie. I like all of the actresses who played the Angels, but the script is just awful, even by the standards of movies that are remakes of cheesy TV shows. That's an incredibly low bar, and that movie didn't manage to cross it.

It's at 37% on, and the positive reviews are damning with faint praise. It stars Christian Bale, some guy named Sam Worthington, and, of course, a couple of actresses, none of whom have received any attention whatsoever in the marketing. And this is a franchise which featured one of the all-time great female action heroes, Linda Hamilton as Sarah Connor in T2. Damn was she hot. Her performance was one of the things that made that movie great. Don't these studio executives ever learn anything?

The strike price is H$90. This is one of those moments when you realize very quickly that the strike price was set back when the price of the stock was higher, and the hype was hotter. The call is at H$3, and sinking fast. The put is at H$5 and rising almost as fast. I think this movie is going to be lucky to crack $80 million over these five days.
Stock: Short
Call: Short
Put: Long

Update Thursday night: There are two other movies opening this weekend, but on the more-traditional Friday. Dance Flick (DANCF) is from a couple of the Wayans brothers. It's a spoof of dance movies, of which I have seen none recently. The trailer has a couple of good moments, but I'm not that intrigued. The stock is at H$27, down from H$34. Hmmm. The strike price is H$15. Because it's a three-day holiday weekend, the adjust multiplier is 2.2, which means that a $15 million opening weekend would suggest a stock price of about H$33. Way off. The call reflects that: it's at H$0.70. Ooooh, that's not good. The put, of course, is at the other end of the scale. There isn't very far the put can go, but it's going there, at H$3 and change. I don't have a lot to say about this movie, and the numbers seem to be saying it all. Expectations are low and sinking. Stock: Short
Call: Short
Put: Long

In the wanna-be blockbuster category is Night at the Museum: Battle at the Smithsonian (NMUS2), also in contention for longest and and clumsiest title of the year. I wasn't a big fan of the original; it felt a little too cliched for me. But I do like Ben Stiller, and so do many other people. He is funny in the right context. It is a humorous concept, with lots of potential. The stock is up today by H$2.50, to almost H$173, just barely off the high. The adjust multiplier is 2.2 for the three-day holiday weekend, just like it is for Dance Flick. The strike price is H$80; if it makes that, the stock will adjust to H$176. So it's close. It's at 41% on, almost exactly the same as Dance Flick (40%). There's not much competition for comedies, but there is a lot of competition, period, in the multiplexes. Strike price is H$80, with the call below H$2, and the put above H$5. Looks like an $80 million opening weekend is optimistic. As I think about that last sentence, it's almost obviously true. $80 million for an opening weekend is almost always optimistic. This could do $60 million and probably still be very successful. Let's guess around $70 million.
Stock: Short
Call: Short
Put: Long
I was right about the hype surrounding T4: It did not, in fact, crack $80 million, only about $65 million over the five days. It adjusted down H$49. Whoa! Dance Flick actually came in slightly at the high end of expectations, at $13 million. It adjusted up about H$1.50. NMUS2 came in exactly at my prediction, $70 million (although that's only an estimate, and might be adjusted by final numbers tomorrow). It adjusted down H$16. I was slightly off on DANCF, but dead on for the other two. A good weekend for me, not so good for Mr. McG. Remember, when someone makes a movie with a barely coherent plot, with scenes obviously from several different versions of the script, it means that they probably not a very good director.

Tuesday, May 19, 2009

Voting in California today

There are elections today in California. Some of them are the regular assortment of scattered special elections, runoffs, etc. Those are all location-specific; no statewide offices are at stake. There are several propositions, however, 1A through 1F. They are mostly dealing with the budget - that would be the dysfunctional California state budget that is a huge mess in many ways.

I am a hardcore political junkie, but I have been trying to avoid this one. The cause is not hard to figure out; California law requires a two-thirds majority to pass the budget. Republicans, who are in the minority and probably will be for the foreseeable future, dig in their heels and resist any kind of compromise on cutting spending and/or raising taxes. It doesn't help that our governor is a Republican; there is very little love lost between him and the Republicans in the legislature. Most of them consider him a RINO (Republican In Name Only).

We have a massive budget deficit that I have been trying hard not to think about. Most of the propositions are band-aids over this mess. I voted for most of them, because we have to fund certain things. But I really didn't want to.

Democrats and Republicans are basically playing chicken. Neither wants to blink first. Democrats don't want to cut spending, and Republicans don't want to raise taxes. Republicans think they can win this because they hate government already, so they figure if the state goes off a cliff, they will be proved right.

I, of course, think Republicans are being stupid. A large majority of Californians are Democrats; this sure ain't gonna make them feel better about the Republican party. Republicans probably think that they're well-positioned to hold onto the governor's office in 2010, because they have a couple of very rich candidates running. But Arnold is only there because of a quirk of history. He won election because Gray Davis was one of the least charismatic politicians in California. Then Arnold won reelection because his next competitor - I don't even remember the guy's name - was even worse. Arnold is not just the most famous Republican governor in the country, he is one of the most famous Republican governors in the history of the country. If these initiatives fail, which it looks like they will, he will look even more like a failure than he already does, and he ain't doing well. This will be yet another black mark on the Republican party.

I think the Republican Party has miscalculated what will happen if too many things really do get cut. I think a lot of anger is going to boil over, and it is going to be directed at them.

Polls close in less than 10 minutes. Turnout is expected to be extremely low. We live in interesting times. I think I'm going to be checking out a little more often for the next few months.

Sunday, May 17, 2009

Star Trek

So I saw Star Trek. At least I think I saw Star Trek. That was the title of the movie, and the characters all had the right names -Kirk, Bones, Spock, Uhura, Sulu. Lots of phasers and photon torpedoes. But I sure don't remember having this much fun on the Enterprise before.

I can't remember the last Star Trek movie that I saw. I can't even remember the last time I saw one of the TV shows. I have the sense that the movies were losing steam, creatively. And financially.

I have, however, spent some time recently watching clips of Galaxy Quest on YouTube. I love Galaxy Quest. They nailed something in that movie. There are three groups in the movie, all with completely different relationships to the TV show. The actors who were in the show are mostly burned out, utterly sick and tired of it. The Thermians, the aliens who watched the "historical documents," are the exact opposite: they treat the show as the gospel truth, and believe every word of it so faithfully that they have recreated the ship. The teenage fanboys straddle the line between truth and fiction; they know it's only a show, but they really, really want to believe in it. The actors have never taken it seriously beyond their paychecks; the Thermians have taken it seriously enough that the very survival of their civilization depends on it. The fanboys are the kind of geeky teenage males who are inclined to take it just a wee bit too seriously.

But part of the accidental genius of the original Star Trek is that it's almost impossible to take it too seriously. Tribbles? Please. The other part of the accidental genius of the original is that there is stuff within it that does deserve to be taken seriously. Relations with other races/cultures, emotion vs. logic - good stuff.

By not taking it too seriously, we give ourselves permission to go ahead and take it seriously, after all. This is what Trekkers/Trekkies (I have no idea what the difference is) do: by playing up the camp factor, they let the world know that they know it's a joke, and that they're in on it. But then they have their own joke, which is that they manage to find meaning in it.

J.J. Abrams has pulled off a variation of this trick in this movie, except that he almost skipped the "not taking it seriously" part. First of all, he's made a damn good movie. There's no other way to say it. It's just a damn good movie. It's got a great blend of humor and action. The casting is just about perfect. Simon Pegg as Scotty? Genius. Tyler Perry as the head of Starfleet Academy? Points for that little surprise. Winona Ryder as Spock's mother? OK, that one was a little weird.

But Abrams nails the "not taking it seriously"/"taking it too seriously" tension perfectly within the movie. Chris Pine as James Tiberius Kirk starts out as a rebel who doesn't want to even think about joining a cause. Spock, of course, takes everything as seriously as possible. Oil and water, fire and ice, Vulcan/human, reason/emotion, Newtonian/Einsteinian physics, pick a dichotomy. Except male/female. Not a lot of that.

The one thing Kirk and Spock have in common is that they both love challenges. Abrams - thanks be to the Federation and ILM - has the technical and artistic chops to throw them both a fair number of challenges, personal, political, and, of course, military. And throw them he does.

Abrams' great challenge was to pay homage to the mythology/history/cultural phenomenon that is Star Trek, while creating yet another version that is and is not a mirror image of the very first series. He references the references we all know without making them feel like blatant references. When Bones yells "Damnit, Jim, I'm a doctor, not a physicist!" he says it because it's true - he's a doctor, not a physicist, and that is a highly relevant piece of information at that particular moment in time, and he needs to make it very clear. Abrams has to make us remember and forget the original series at the same time.

He has one spectacular advantage in this regard: this particular dichotomy lies at the heart of the Star Trek phenomenon. There have already been several reimaginings of the franchise within Paramount, the studio, and umpteen zillion outside of it. Star Trek has already mutated a thousand times, with budgets in the millions of dollars and the tens of dollars. It just hasn't been done with a budget in the very high tens of millions of dollars.

I'm waxing philosophical partially because this is one thing Abrams does not do much of in this movie. Mostly because he doesn't really have to. Spock is half human and half Vulcan - he struggles with this dichotomy. Yes, we know. The Enterprise is on a peacekeeping mission, armed to the teeth. Force/diplomacy, when to use each. Yeah, got it. Shields up already, what's taking so long to fire the photon torpedoes? Oh, there they go. And there they go again. I'll shut up now and try to hold on. Pacing is not a problem in this movie - it's about the fastest two hours I can remember. Kirk is boldly going wherever his hormones lead him. And thank you, Zoe Saldana, for making Uhura hot AND smart. Remember what Jean-Luc Godard said are the only two things you need to make a movie? A girl and a gun. A little light on the girls, but my oh my do we have guns. Not set on stun all that often, what with the fate of billions of people at stake. Just for fun, what say we start with ship-level drama, and then get to grandiose and epic scale as soon as we can. Oh, wait, we're already there.

At the end of Galaxy Quest, the Thermians have shown the actors that the show was worthwhile after all; "Never give up, never surrender!" really was something to believe in. J.J. Abrams has done the same. He has accomplished the rather impressive feat of convincing a fair segment of the population that Star Trek is not only still worth taking seriously, it was worth taking seriously in the first place. See also: Stewart, Patrick.

Then Abrams delivers a great gift to all the Trekkies/Trekkers/Trekizoids/Trekkyboppers out there: not just a great Star Trek movie, not just a great movie, period, but the best possible excuse to take Kirk and Bones and Spock and Klingons as seriously as they want to, logical or illogical as that may be.

And then he delivers to them (and us) an even greater gift: he makes it all cooler than it ever was. Beam me up, Scotty, there's a lot of intelligent life around here. Warp factor ten, Mr. Sulu, we need a sequel.

Saturday, May 16, 2009

GM, Chrysler closing dealerships

GM and Chrysler are closing lots and lots of dealerships, roughly 2,000, all told.

No one is surprised by this. Many people have known for years that GM and Chrysler have too many dealerships. GM has several thousand more dealers than Toyota, but sells roughly the same number of cars.

From a political perspective, what's bizarre about this is that this failure is actually an argument for the conservative principle that excessive government regulation is bad for the economy. In this case, dealers across the country were protected by state and local laws that made it difficult for them to be closed. Dealers obviously wanted to be protected from the vagaries of the market. The free market. So they relied on government regulation to protect them. And yet I somehow don't think that many of them were Democrats.

My guess is that many of these dealerships were profitable for themselves, but not profitable for GM and Chrysler. Let's say you have a dealership that has been around in rural Kentucky for 50 years. The dealership probably owns the land and the building, so there is no mortgage or rent. That saves a large chunk of overhead right there. They probably have a great credit history, so their cost of capital is low. They pay taxes, sponsor Little League teams, and are generally good citizens in the local community. The police department buys their cars from this dealer. The wife of the dealer is on the board of the local hospital. So that dealership has no incentive to close, even if they are not profitable from the perspective of the manufacturers. But they and the local politicians have every incentive to make it difficult for any car manufacturer to close them.

When a parent does too much to protect their child from the unpleasantness of the real world by, for example, buying them expensive toys or paying their rent after they have graduated from college, we say that the child is spoiled.

It's a very harsh thing to say, but these dealers were basically spoiled children. Their parents, GM and Chrysler, were protecting them from the unpleasantness of the real by absorbing their costs, by, for example, taking their unsold cars back.

The great irony is that if everyone involved had let the free market work properly, many of these dealers probably would have gone out of business a long time ago, and others would have either taken up their business or bought them out. The process of winnowing out the unprofitable dealers would have been much slower, but also much less painful. Instead of taking place over years, however, the process is now taking place over months. If dealers had gone out of business when GM and Chrysler were financially healthy, they could have individually negotiated good buyouts from them. GM and Chrysler could have easily handled 50 to 100 or 200 dealers closing over the last 10 or 15 years. At $1million a pop, 200 dealers would be $200 million a year. That's probably what GM spends on laptops in a given year. Or, rather, spent.

But now that Chrysler is in bankruptcy, with GM likely to follow, the dealers may get nothing or very little. Bankruptcy changes the game. Imagine a spoiled child whose parent is suddenly unemployed. The kid's support is cut off, but she is totally unprepared for it, having never had to worry about it before. So she whines and complains and slams her fists. Guess what the Chrysler and GM dealers are doing.

I don't have a lot of sympathy. Yes, it sucks that many people who were responsible, hardworking people will lose their jobs. I have sympathy for them. They've done everything right, and now they are victims of forces beyond their control. But so are all of us.

But I don't have much sympathy for the dealers. They knew the rules of the game: if you open a business, you agree to play by the rules of capitalism. One of those rules is that the better competitor will win.

If this is an example of the conservative idea that excessive regulation is bad for markets, it is also an example of one of the core failings of conservatism. Conservatives argue that the free markets work because individuals are allowed to act according to their own best interests, and they understand what those best interests are better than the government.

What this argument ignores is that in every capitalist transactions, there is both competition and cooperation; the parties both have an interest in common, and an interest in conflict. If I buy a car, the car dealer and I both have an interest in me buying a car. But the dealer has an interest in charging me the highest price possible, while I have an interest in paying the lowest price possible. So each of us has an interest in distorting the rules governing the transaction to fit our needs. The dealer has an interest in blocking competition; this is why we have antitrust laws. I may have an interest in hiding the fact that I have, for example, a bad credit score, or the fact that I just lost my job (speaking hypothetically here).

That's what happened here: the dealers distorted the free market. They acted according to their own best self-interest. But what was in their best self-interest was contrary to the best self-interest of the car manufacturers. The manufacturers didn't object, because they had no reason to suspect that they would have to close down several hundred dealers all at once. They assumed this because they assumed that the free market would work as it is supposed to. Which, ironically, it did. Just not the way conservative theorists think it does.

The final irony is that this is one of the basic organizing principles of liberalism. Markets encourage efficiency, but, left to their own devices, capitalists will distort just about any market. One essential purpose of government is to regulate competition so that the distortions do not ultimately cause the markets to cease functioning properly. In this sense, the government is taking a capitalist role: the government represents the people in the country as a whole acting in the best interests of the country as a whole. There is no other mechanism for all of the people in a particular area, or affected by a particular industry, to act according to their own best interests, except through government.

So conservatives are right: if free markets had been allowed to work perfectly, this would not have happened. But conservatives are the starry-eyed idealists here, who live in their own fantasy land. Liberals are the grounded realists, and, essentially, the better capitalists.

I've said it once, I'll say it again: Irony is 9/10th of the law.

Thursday, May 14, 2009

HSX: Week of May 15, 2009

Only one movie opening this weekend, but it's a doozie. We're getting metaphysical with Tom Hanks and Ron Howard as they struggle with Angels & Demons (ANDEM). That's a nice big title. It's the sequel to The Da Vinci Code, which made a bazillion dollars a couple of years ago. Anticipation for this one has been quite high. Maybe too high: the stock is at H$150, down from the high of H$175, and down more than H$8 today. The strike price is H$60, which is a good price, given the history of the stock, but I think it's a little high. The call is above H$5, but down more than a buck today, while the put is at H$2.78, up H$1 today. All three securities are sending signals that the movie is going to open below the strike price. I have the same gut instinct. It's opening on 3,527 screens, which is actually less than both Wolverine and Star Trek will have out there this week. It's getting crowded out there. It needs a PSA of about $15,700 to make the stock price. Eminently possible, I suppose, but I'm not that excited about it. Neither are the critics; it's at 40% on, with the critics writing what I could have predicted; it's solidly professional, but highly convoluted, and not that interesting. About what you expect from Tom Hanks and Ron Howard; the high end of middlebrow. What the critics think might actually matter a bit this time, because this is very much a movie aimed at adults. I don't think it's going to bomb, but I don't think it's going to set the world on fire. I also notice that Audrey Tautou is missing, replaced by an Israeli actress. I'm sure Ayelet Zurer (AZURE - great bond symbol) is good, but I'm equally sure she was not that expensive to hire for this production. Sigh. Yet another blown chance to give a great part to an actress as famous as the men. I'm thinking somewhere around $55 million for this opening.
Stock: Short
Call: Short
Put: Long

Update Monday morning: Tom Hanks and Ron Howard don't have quite the magic they did the first time around, snagging $48 million, way below the strike price. So I got it right on all counts. Good feeling. Helped me move up one spot in the rankings. On the other hand, it did quite well internationally, bringing in $104 million. $152 million in one weekend. Pretty good for an adult drama.

Wednesday, May 13, 2009

Obama and "Don't Ask, Don't Tell" - the go-slow policy

President Obama hasn't done much on the military's Don't Ask Don't Tell policy. Many liberals, and at least one conservative, are getting a little antsy. Andrew Sullivan is impatient.
My fear in this as with the economy is that Obama likes to tear band-aids off very, very slowly.
Matt Yglesias is particularly frustrated:
[U]ltimately delay does no one any favors. The change will have to come sooner or later. In political terms, the White House may as well act decisively, take whatever hits they're going to take, and be done with it rather than letting this fester like a sore. And substantively, if the military is going to have to adjust they may as well do it sooner rather than later rather than lose more valuable personnel.
That's an eloquent articulation of a simplistic idea. It's also an example of what I call the "magic wand" theory of political action. This can be done today, so why aren't we?

Yglesias realizes that lack of adequate planning is part of what got Clinton in trouble over this issue:
Obama's decision on a variety of fronts has been guided by a clear desire to avoid some of the early missteps made by Bill Clinton. And conventional accounts of Clinton’s early presidency put the way he got into an early dispute with the military brass over treatment of gay and lesbian servicemembers high on the list of missteps to be avoided.
Again, an eloquent articulation of a simplistic idea. Clinton's mistake was that he picked a fight with the military. Really not a good idea for a guy who was basically a draft dodger.

But Clinton's situation was a little more complicated than that, as is Obama's. It wasn't that Clinton picked a fight with the military; it was that both he and the gay community were totally unprepared for the fight. Allowing gays in the military wasn't a high priority of the gay community at the time; they were much more worried about other issues, particularly AIDS. Clinton had not laid any groundwork politically for allowing gays and lesbians to serve in the military. When the backlash came, Clinton and his gay and liberal allies were quickly overwhelmed. The result was that we ended up with a bad policy that institutionalized discrimination.

For Clinton, gays in the military became a flashpoint, something for his enemies to focus on. It wasn't just that Clinton wasn't prepared for the fight; he had no idea there was going to be a fight at all.

That is exactly what Obama wants to avoid. Right now gay rights are a very, very touchy subject with a lot of people. The problem is not that they are angry. The problem is that they have nowhere to focus their anger. There are a lot of people in places like North Dakota who are willing to give Obama the benefit of the doubt, but who are also queasy with everything they are hearing about gay marriage. But there's nothing they can do about something happening in New Hampshire. If Obama takes a strong stand on DADT, or any gay issue, all of that anger is going to focus on him.

Clinton's first year in office was actually quite successful, but the gays in the military issue had a ridiculously outsized impact, coming, as it did, very early in his presidency. It threw him off his stride, and let his enemies gain some traction. And then the Democrats lost the House in 1994.

The political calculus for Obama is very straightforward. Eliminating DADT is the right thing to do. But timing in politics is crucial. Obama has a huge number of things on his plate. He doesn't want to risk support for his broader agenda on an issue that, let's face it, affects a few thousand people. Is that cold and calculating? Yes, it is. But guess what - it's also good politics.

The timing is also poor because we are fighting two wars. Obama's military priority right now is winning those wars, or at least getting us out of there. Once he does that, once he has credibility as a military leader, he will have more clout with the military.

Matt Yglesias makes one very problematic assumption: he assumes that Obama will win this issue. Obama cannot make that assumption.

Obama is being very careful with DADT because there is a very real possibility that he will not be successful. Obama is doing the exact opposite of Clinton for one very good reason: Clinton failed.

Sunday, May 10, 2009

Wanda Sykes at the White House Correspondents' Association Dinner

Wanda Sykes roasted Obama at the White House Correspondents' Association Dinner. The amazing thing about her speech is that she actually managed to make fun of him, particularly his basketball game. The first black president, playing basketball?

"That's like one step forward, and two steps back."

She even made fun of Michelle:
"You do need to keep your arms to yourself sometimes. Running over there to London, touching the Queen. You can't do that. You're patting the Queen on the back like she just slid into home plate. Way to go, Queen!"

She didn't think it was a great idea to give the Queen an iPod:
"What are you going to give the Pope, a Bluetooth?"

She has a better idea for what to give the Queen:
"Give her something that says 'America.' Give her Texas."

She also slammed Rush Limbaugh, thank goodness. Way to go, Wanda. Give 'em a dose of their own medicine. 

Here's an edited version of her speech, from DailyKosTV (great job on the split screen):

Obama at White House Correspondents' Association Dinner

Great stuff from Obama at the White House Correspondents' Association Dinner.

"I'm Barack Obama. 

Most of you covered me. 

All of you voted for me. 

Apologies to the Fox table."

On David Axelrod:
"I tear up when I think back to that moment years ago when I called Axe up and said 'You and I can do wonderful things together.' And he said to me the same thing that partners all across America are saying to one another right now: 'Let's go to Iowa and make it official.'"

To Michael Steele:
"Michael, for the last time, the Republican Party does not qualify for a bailout. Rush Limbaugh does not count as a troubled asset."

"In the last 100 days we've also grown the Democratic Party, by infusing it with new energy and bringing in fresh young faces, like Arlen Specter."

Happy Mother's Day!

Happy Mother's Day to all the Moms out there. Just in case you haven't done anything for your mother on this special day, you can go to, which I just found because I typed "" into my browser, and voila! guess what popped up. I'm the kind of person who can do this, because my Mom encouraged me to be curious. I remember many trips to the library as a kid. I don't have kids, but one of my brothers has three, and my sister has two, with one on the way, so I have a much better idea of what it takes to raise kids than I did when I actually was one. So I am much more appreciative of what it takes to take kids to the library on a regular basis. Thanks Mom!

The WaPo has a post today with a slightly unusual take on Mother's Day: Lenore Skenazy slams what she calls the "parenting-industrial complex." Marketers are out of control, according to Ms. Skenazy, pitching parents with products to solve problems that they don't even know they have. This, of course, is exactly what lots of companies do in all kinds of areas of life, but it's particularly pernicious for new parents, because they are particularly nervous. New parents in particular have little if any experience raising kids, so they are vulnerable to all kinds of marketing-induced anxieties. Enough! Skenazy quotes the godfather of parenting advice, Dr. Spock:

"Trust yourself. You know more than you think you do."
Your baby is a little person. You are a big person. You are both people. How would you want to be treated if you were a little person? Sometimes you do what you would want someone to do to you. Sometimes you do the exact opposite.

But the best reason to trust yourself when raising your child is that this is the best possible lesson to impart to your child. If you pay too much attention to marketing, you're setting the ultimate bad example.

When all else fails, your own mother is probably a much better - and cheaper - source of wisdom. Mine certainly is.

Obama not paying for any more border fence

This has been under the radar - remember the fence with Mexico that we were supposed to build? Well, we've built some of it, but the Obama administration will not be building the rest of it. There isn't any official change of policy, at least as far as I can tell, but they're not paying for it. Works for me. The border fence has to be one of the stupidest ideas ever. Most of the people in Texas don't want, it doesn't do much good, and it stands as a symbol of everything that America shouldn't be. It's also reminiscient of the Berlin Wall, one of the symbols of Communism. Some right-wingers will complain and moan about how Obama isn't keeping us safe. Too bad for them. They are not in power. Not only are they not in power, they are being marginalized. The national consensus is shifting away from them. Eventually, hopefully, most Americans will realize that demagoguery is not healthy, either for individuals' mental health, or policymaking in a democracy.

In praise of romance novels

Interesting post at DailyKos, somehow appropos for Mother's Day: why progressives should pay attention to romance novels. I can't begin to explain it, but this grabbed my attention:

romance itself is a fundamentally progressive activity.
So Valentine's Day is for liberals! Who knew? And the writer doesn't even mention the cliche of hopeless romantics and starry-eyed idealists!

I know next to nothing about romance novels, but I'm open to the idea that there's more there than what I suspect. I'm also open to the idea that lots of liberal/progressive men don't want to have anything to do with romance novels because they are already worried about seeming too effeminate or less macho than their conservative counterparts.

Thursday, May 7, 2009

HSX: Week of May 8, 2009

Just two movies this week. First up is an "urban," i.e. African-American, comedy, "Next Day Air" (NDAIR), about a shipment of cocaine that ends up delivered to the wrong apartment. That has all kinds of possibilities. I don't know some of the actors involved, but Mos Def is one of them, and I like him. Not much to go on, I realize. The stock is at H$17.17, slightly off the high of about H$19. Trend has been mostly upwards. Strike price is H$5, utterly realistic, with the call at H$2 and change, and the put between H$1 and H$2. It's at 18% at, which doesn't really matter. It's only going out to 1,138 screens, but it only needs a PSA of about $5,600 to make the price of the stock. I've seriously underestimated the last two black movies I wrote about, Madea Goes to Jail and Obssessed, so I am going to try to avoid making that mistake this time around. Let's go with $7-$8 million.
Stock: Long
Call: Long
Put: Short

Counterprogramming against this (or maybe it's the other way around) is Star Trek (TRK11). Nothing fancy about the title, no references to the fact that this is a restart, just the name of the original TV show. The buzz is great, possibly bigger than that for Wolverine, although a Trekker (Trekkie?) friend of mine is somewhat conflicted. She's hopeful, but wasn't impressed with the trailer. I just watched it again, and realized that Star Trek has never been macho, but this trailer makes it look like this will be more of a manly movie than any previous incarnation. But that's the impression that I get from a hyper-edited, very fast-paced clip, so I could be wrong. The reviews are almost uniformly good; it's at 93% on, which is almost unheard of. Wow. Current price is H$185, down slightly from the high, which it apparently hit yesterday. Strike price is H$65, which is in line with the price of the stock, but I think both are low. The call is at almost H$11, which predicts an opening weekend north of $75 million, and a stock above H$200. Put, of course, is about as low as can go, below half a buck. I find it odd that the price of the stock is lagging expectations of the call so dramatically, but the buzz has been great. It's on 3,849 screens, so it needs to make about $17,800 to make the stock price, and $19,400 to make the call. That's a nice chunk of change, particularly since it is still in competition with Wolverine. But by no means impossible. The one problem could be that this movie might appeal more to older audiences than young ones, and that those older folks, i.e. the one who have been watching for 40 years, might not come on opening weekend. Possible, but I doubt it. Everyone knows Star Trek. Not everybody loves it, but everybody knows it. I'm going to go with somewhere between $75 and $80 million.
Stock: Long
Call: Long
Put: As short as you possibly can.

Update Friday morning: NDAIR is down H$1.30 this morning, not a good sign. I'm sticking with it. I did some research yesterday on where this movie is playing. I checked out some Magic Johnson theaters to see how many screens it's on. I checked out theaters in Harlem, Maryland, and Atlanta. In all three, it's on two screens. I assume that Magic Johnson knows a lot more about the tastes of the urban market than I do, or just about anyone else in the country, so I am going to trust his judgment on this one. TRK11 is up H$5, boldly going into the stratosphere. This one sure looks like it is going to live long and prosper.

Update Monday morning: Looks like I learned the wrong lessons about urban films - NDAIR did, in fact, tank, as the price Friday morning indicated. Not a great loss, tho. TRK11 did about as well as expected, $76.5 million. Very close to the prediction of the stock price and the call. Can't wait to see it, myself.

Wednesday, May 6, 2009

Gay marriage in DC, Marion Barry, and Ta-Nehisi Coates

The City Council of Washington, DC, has voted to recognize gay marriages performed in other states. I wasn't going to blog about this, despite the fact that I have lived in DC three times and I love it, because gay marriage news is coming out (pun intended) fast and furious these days, and I have to be somewhat selective. But Ta-Nehisi Coates has a great post about Marion Barry's vote in opposition. Fascinating comments. Several people pointed out the irony of a man caught on tape smoking crack trying to take some kind of moral high ground. Coates is relatively new to The Atlantic, but he's becoming one of my go-to bloggers, because he's a liberal who occasionally tries to slap some sense into liberals, particularly on civil rights issues. He's also the only blogger I read who can discourse extensively on the history of rap and hip-hop. Very refreshing.

I think the vote in DC may be a breakthrough in gay-black relations. I have my fingers crossed. The tension between African-Americans, particularly in churches, and gays has been a simmering source of tension. This will bring it out in the open (so to speak). One possible consequence may be that African-American gays and lesbians may be encouraged to come out of the closet, and force members of their community to confront their fears and issues around homosexuality.

It's also an opportunity for Obama to take a stand on this issue. He's been avoiding gay issues, which is understandable, given what else is on his plate. He is presumably a little reluctant to spend some political capital on this issue right now. There are a couple of reason for that. 1, he doesn't need to - incredible progress is being made without any help from him. If you had said two years - or even a year or even six months ago - that we would have gay marriage in almost all states in New England by the summer of 2009, I would not have believed you. If you had said that gay marriage would be legal in Iowa before California, I would have thot you were insane. So Obama doesn't really need to do much. 2, he doesn't gain much by spending political capital on gay rights issues. He would piss off conservatives, although that wouldn't make much of a difference. He might alienate a few people in the middle of the road, which would be bad. But it wouldn't make much of a difference with liberals and most out gays and lesbians, because they already support him. Not much reason for him to do anything.

Other than the fact that moving forward on repealing "Don't Ask Don't Tell" is the right thing to do. I expect Obama to be occasionally motivated by just doing the right thing.

This situation is just about ideal for Obama. He can make some kind of bland statement about how he supports expanding civil rights, and he hopes that Congress respects the District's rights to pass its own laws. He doesn't even have to support gay marriage outright. And then he can make it slightly personal about Marion Barry. Nothing big. Just make it clear that he doesn't agree with Marion Barry. Conservatives would love that. Judging by the comments in Coates' post, so would a fair number of African-Americans. Marion Barry is a demagogue and an embarrassment to everyone he is associated with. It is tragic that he is still on the DC City Council. Obama could score points with just about every point on the political spectrum just by shaking his head at the mention of the man's name.

Vactican doesn't hate "Angels and Demons"

Ron Howard and Tom Hanks made another movie about intrigue at the Vatican. The first movie that they made about weird, spooky people infecting the Catholic Church, The Da Vinci Code, was not popular with the priesthood. The Vatican made it clear that they did not approve. Of course, it worked out for the movie, because you can't buy that kind of publicity. It went on to make over $750 million worldwide.

This movie is called Angels & Demons, and it is, again, based on a Dan Brown novel. But this time, the Vatican doesn't hate it!

The film offers "more than two hours of harmless entertainment, which hardly affects the genius and mystery of Christianity," L'Osservatore's reviewer wrote. It's "a videogame that first of all sparks curiosity and is also, maybe, a bit of fun."
"A bit of fun?!?!" Now I smell a plot. I think this review is part of a Vatican conspiracy to kill this movie with kindness. This is like the kiss of death. OK, maybe that's not a good simile.

But still. Couldn't they have generated some kind of outrage? Would it have really been all that hard for them to find something objectionable? Don't they understand that their role is to be judgmental and puritanical? If the Church approves of a movie, there will be no controversy. That means that the studio is going to have to rely on traditional means of marketing - depending on the quality of the film, the reputation of the actors and the director, whatever goodwill is left over from the first one. Sure, Ron Howard is a highly accomplished mainstream director, and Tom Hanks is arguably the biggest movie star in the world, but these people need help. This is a hugely expensive movie. Marketing it is going to cost millions. But a couple of hissy fits from guys in robes, and we're all set!

Sigh. Of course, it is the age of Obama, in which we are all trying to get along. Or at least most of us. Maybe this is a sign of old divisions crumbling. Maybe the Church really does like it. Maybe they really aren't afraid of it. Maybe they really do realize that one movie will have basically no effect on a religious tradition thousands of years old with hundreds of millions of adherents.

And maybe I will have to go see it to make up my mind about all of this. Maybe I'll just have to figure out a way to enjoy it on its own merits, without worrying about any long-term political implications. That would be weird, but I think I can do it.

Tuesday, May 5, 2009

Sarah Palin vs. Mitt Romney

This is too bizarre for words. My words, anyways; read the post at DailyKos to figure out what this is all about.

What the hell, I'll take a stab at making some kind of sense of this:

(long pause)

You have got to be kidding me.

Physics and surfing

I've read a couple of articles recently about physics and surfing. One was in the Financial Times, about Garrett Lisi, who lives and surfs and thinks about the universe in Maui. Love this:

When I was about 16, I found out that the abstract mathematics I was learning in school actually describes how the physical universe operates. It was like stumbling on the existence of true magic in the world.
I made a movie at USC called Chasing Patterns that is about a young man discovering the beauty of math in patterns in nature, so I totally grok this idea.

On this side of the Pacific, the LA Times has a story about a class at UC San Diego that combines surfing and physics. The students attache equipment to their boards that measure various things in the ocean, and they study the physics of surfing - how waves form, that kind of thing - in the classroom.

I'm a big fan of this for a couple of reasons. First, I am a strong proponent of just about any kind of teaching that takes place outside of the classroom. I think schools in this country at all levels should do more to get students away from desks and chalkboards. That, after all, is where they are going to spend most of the rest of their lives. Also, I am an equally strong proponent of anything that combines theory and practice, particularly real-world experience. When I was a philosophy major, "real world experience" consisted of typing up papers.

A unique solution to the housing problem

We have had more than our fair share of problems because of the housing bubble out here in southern California, particularly in the farther reaches of the Inland Empire, where houses sprouted like weeds, with little rhyme or reason. Or, more importantly, economic rationale. Now one bank that repo'd some houses has a unique solution: it's tearing them down. It makes more financial sense for them to destroy them than to try and finish them and then sell them. There's almost no salvage value; a granite countertop went for $40, some scrap lumber was traded for a six-pack of Corona. 30, 40, 50 years from now, this will live on as a symbol of a world gone mad.

Women halberdiers?

The Swiss Guard is the world's smallest army, guarding the Vatican and the Pope. It's comprised of Swiss men. Just like the priesthood, it's all men. Maybe not much longer! The current commander has said that he can see women in the job. This is relevant to me because the members of the Swiss Guard carry halberds, a kind of battle axe or polearm, and are known as halberdiers. This is where my family name comes from. Rumor has it that the original Halbert was one guy who was particularly good with it.

Tomorrow, May 6, is annual celebration of the day in 1527 when 140 Swiss Guards were killed defending Pope Clement VII, who survived.

Here's a bit of trivia that I just came across: Saint Wiborada, a Swiss nun who was the first woman canonized by the Vatican, is commonly depicted as holding a halberd, which was supposedly the weapon used to kill her and therefore make her a martyr. This isn't true, because the halberd was not developed for several more centuries (she died in 926). But an interesting story nonetheless. Her feast day is May 2 (lots of interesting things happening in this first week of May), and she is the patron saint of librarians.

If women are allowed to guard the Vatican, that will hopefully will be one small step towards women becoming priests.

Happy Cinco de Mayo!

It's Cinco de Mayo! It's a minor regional holiday in Mexico that Americans have embraced as a celebration of Mexican culture. It is not, in fact, Mexican independence day, which is September 16. Cinco de Mayo actually celebrates the triumphant victory of Dos Equis and Corona over Budweiser and Miller as the favorite beer of people on spring break in Cabo San Lucas. It was a glorious victory over the cultural imperialist Americans. From that day forward, Dos Equis and Corona began their march northward, into the territory formerly dominated by their Yanqui competitors. They gradually became hipper and cooler, and are now the preferred beer of people who like cheap beer but also like to pretend that they're drinking something exotic and different. As Abraham Lincoln said in Bill & Ted's Most Excellent Collection, "Party on, dudes!"

This is also a great day to watch The Mexican, the Brad Pitt-Julia Roberts sort-of-romantic sort-of-comedy from a few years ago. I like it, but it took me about three viewings to really understand it. One nice thing about it is that most of the Mexicans are smarter than most of the Americans. It's also the source of one of my all-time favorite quotes, from James Ganfolfini: "I'm here to regulate funkiness."

If you do partake of your share of tequila shots today, just remember that line: be sure to regulate funkiness. Happy Cinco de Mayo!

Update: Gustavo Arrellano, of Ask A Mexican! fame, has the lowdown on Cinco de Mayo, including St. Patrick's Day vs. Cinco de Mayo.

Hoping for a conservative "Sister Souljah" moment

Andrew Sullivan asks a question about conservatives - who will "Sister Souljah" them? It's a good question - regardless of what you think about Clinton's "Sister Souljah" moment, he went on to win the presidency. Twice.

He has a dream:

I'm waiting for the first leading Republican to do to these grandstanding goons what Clinton once did to the extremists in his own ranks: reject them, excoriate them, remind people that they do not have a monopoly on conservatism and that decent right-of-center people actually find their vision repellent. And then to articulate a positive vision for taking this country forward, expanding liberty, exposing corruption, reducing government's burden, unwinding ungovernable empire, and defending civic virtue without going on Jihads against other people's vices.
Who will take care of this? Who will marginalize these idiots?

The answer is simple. Someone with a chance of winning. Clinton was able to criticize a black woman because he had a very good record on civil rights, so he could legitimately claim that he was disagreeing with the content of Sister Souljah's comments, not being subtly racist. The conservative who can do the same will be someone who has a solid conservative record, but is also attractive to the mainstream, and has a chance to win a major race, like a governor's race, if not the presidency.

Who is this person? Where are they? We may not know that for a long time. Years, at the very least.

Sunday, May 3, 2009

Matt Damon and Sarah Palin

I was surfing through YouTube and came across a short clip of Matt Damon ripping on Sarah Palin. I remembered it vaguely, so I clicked on it. And what do you know, up popped an ad! A political ad! Not really surprising, really, because ad placement on Websites these days is all about synchronicity - you're watching a video about Sarah Palin, you must be interested in politics! I'm not really sure the good Governor of Alaska really appreciates this kind of synchronicity, tho:

Notice the title of the video: "Matt Damon Rips Sarah Palin." And right next to it is an ad - to support Sarah Palin! Whoops. That's a screenshot of exactly what was on my screen. And here's the video, although I can't guarantee that you'll get the same ad that I did:

If you're wondering what Matt Damon's credentials are for ripping on Sarah Palin, keep this in mind: he went to Harvard. He dropped out before graduating to pursue his film career, but he did, in fact, go to Harvard. I happen to know this because a friend of mine was a TA there, and had him in his class. Damon dropped out while he was in the class. My friend still has a paper that he wrote but never bothered to pick up, because he left right after he wrote it (I assume he still has it - haven't talked to him in a while). So we can be reasonably confident that he is, in fact, smarter than Sarah Palin.

Like I always say, irony is 9/10th of the law.

Quote of the day - CalTech gets architecturally funky

“Architecture,” [Thom Mayne] said, “is about making real who we think we are. Astrophysicists deal with a very different reality, but it is a real reality.”

From the CalTech News. CalTech just opened the Cahill Center for Astronomy and Astrophysics. It was designed by Thom Mayne, who is a little like Frank Gehry, if you substitute edges and fractures for curves and waves. I like Mayne, he's one of my favorite architects (he's also from LA). I walked by this building on my way to see the Capitol Steps (about whom I will be blogging later), who were performing at CalTech. It's very nice. That's about the limits of my ability to critique architecture. A better analysis, with pictures, is here, at a blog with the great name of "Hello Beautiful". It is, of course, very environmentally responsible, with a Gold LEED rating. Even the address is specially designed:

The building’s distinctive purpose begins with its address at 1216 California Boulevard—1216 being the wavelength, in Angstroms, of a far-ultraviolet line in the spectrum of hydrogen, known as the Lyman alpha line, that for decades has provided observational astronomers with a goldmine of information about a wide range of cosmic phenomena.
Which, of course, is about the best possible reason to choose an address for an astrophysics building. That's certainly the address I would choose.

The general contractor is Hathaway Dinwiddie. Damn, even the builder has a funky name. It's too bad that's a real company, because I would seriously consider stealing that for a character in a movie. That's an even cooler name than Morphosis, Thom Mayne's company. The one issue I have with Mayne is that he graduated from USC - very cool - but is now tenured faculty at UCLA. No one's perfect.

LA Times does something right

The LA Times has done something innovative and kind of cool! Whoa! One of their Op-Ed columnists is a woman named Patt Morrison, who is sort of the LA version of Gail Collins of the NY Times, but a little spunkier. She has had a column on the Op-Ed page for a couple of years. Today the Times introduced a new feature - Morrison will be interviewing a different person each week, with the interview on the Op-Ed page. The first interview is with everyone's favorite Chick. Laura Chick, that is, formerly LA City Controller, now going to Sacramento to audit the state of California's $48 billion from the stimulus.

Great move by the LA Times, and a great way to start. This is a wonderful way to create unique content - leverage one of their best assets, a woman who knows LA like the back of her hand. She's already received one of the highest honors a Los Angeleno can get - she has a hot dog named after her at Pink's, the legendary hot dog stand. This is even more remarkable given that she is a vegetarian (it's a vegetarian hot dog). Even better is starting with Laura Chick, who worked wonders as the LA City Controller. She's currently one of my heroines. One of the most inspiring civil servants I have ever seen. That's not damning with faint praise - she has worked very hard, and very smart, to try and make LA government work better. It was a very good call on Arnold's part to appoint her. She has voodoo dolls in her office. An auditor with voodoo dolls (they're all anonymous) - you gotta love that.

To make room for the interviews, which look like they will be taking up most of the page, the Times is moving Meghan Daum to Thursdays. Another good call. She's one of my favorite columnists in the LA Times, and I've been a little bummed that she is on Saturdays, because that's the day of the week with the fewest newspaper readers. It made a certain amount of sense to publish her on Saturdays, since she is sort of a lifestyle columnist, but it's good to see her being published during the week.

The LA Times did something right, and cool, and innovative. Can I get an Amen!

Jack Kemp, 1935-2009

Jack Kemp, the former Representative from Buffalo who championed supply-side economics and tax credits as a way of boosting economic growth, died Saturday. I am not a fan of Kemp's legacy of lower taxes and constant pressure for more tax cuts. All of us want lower taxes, and cutting taxes may have made sense back in the late 70's, early 80's. But the side effect - or maybe direct effect - of those tax cuts was to make it very difficult to balance the budget, and very easy to be dismissive of budget deficits. We are still paying the price of that idea, and we will be paying it for decades.

But I always liked Jack Kemp as a person. Besides seeming to be a genuinely nice guy, he was a "bleeding heart conservative," a man who campaigned among African-Americans when he was the GOP VP candidate in 1996. He really believed that the Republican party could successfully reach out to African-Americans. This compassion came from - of all places - football, and his experience as a quarterback.

He wanted the VP nomination in 1988, but George H. W. Bush chose Quayle. I don't know why Bush passed on Kemp, but I can speculate - Kemp probably would have overshadowed Bush, and he was a rival for the nomination in '88. Democrats should probably be thankful that Bush didn't choose him, because if Kemp had been Bush's VP, he would have been the frontrunner for the nomination in '96, and Dole most likely would not have been the nominee. So Kemp would have been #1 on the ticket, instead of #2, and he would have given Clinton a stronger race, even with Ross Perot in the race.

I didn't know that Kemp was originally from LA until I read his obit. I also didn't realize that he went to Occidental, same as Obama. Must be something good about that place.

You have to respect a Republican who accepted the job of Secretary of Housing and Urban Development, and then actually took it seriously. He was one of a kind.

Obama on Souter's replacement

David Souter is retiring from the Supreme Court. Absolutely not surprising; he had not hired clerks for the fall term, which everything other justice had done. He is known to dislike Washington. Personally, I don't have strong feelings about Souter. I'm glad he turned out to be a liberal, and a source of frustration for conservatives, since he was nominated for the bench by Bush Sr. Ha!

President Obama read a statement at a press conference about finding a replacement for Souter. It was an unannounced appearance by the president, and you can tell that the press is suprised. Ha!

One thing that continually impresses me about Obama is how effortlessly he combines the casual and the imperial aspects of the presidency. He walks to the room, cracks a few jokes, makes everyone feel comfortable, and then reads a well-written and eloquent statement that touches on core American traditions and fundamental American values - the separation of powers, the rule of law - and yet is also detailed and specific. He recognizes the contributions of one man, and then generalizes about the lives of millions. This was obviously written by someone else, but you feel like he could have written it himself, so the words are authentic when he speaks them. He puts everyone at ease, but makes it clear that he is the one in command. It's a solemn moment, but he uses just the right amount of humor. He has incredible demands on his time, but he takes the ten minutes to do this. That's a way of honoring Souter - Obama takes his precious time to thank him for his service to the country. Obama walks several fine lines here. But it's not just that he's walking these fine lines - he chose to do so. He didn't have to read this announcement himself, but he decided it was worth his time. There are a couple of small risks - what is he doing wasting his time with this kind of statement, which could easily have just been released by Gibbs? Is it appropriate to make jokes about something this important? But Obama delivered it flawlessly. He laid the groundwork for a careful and considerate process of choosing the next Supreme Court justice. So if the Republicans fight, which they most certainly will, he already looks gracious in comparison.

Saturday, May 2, 2009

Chrysler declares bankruptcy

Chrysler has declared bankruptcy. Not unexpected, but kind of a bummer. Megan McArdle takes a look at it; she thinks the unions won a Pyrrhic victory, sort of. She thinks that they got a better deal than the hedge funds, which will work out for the unions in the short term, but not in the long term, as it will make it very difficult for Chrysler to raise capital. The logic is that if you have a lot of money to invest, but you run the risk of losing your money to unions, then you don't have much incentive to invest your money, unless you get a really high rate of interest. Good point. I'm not sure how much I agree with it, but I think she has something there.

Dan Neil is not terribly optimistic. He doesn't see a lot of synchronicity between Chrysler, which makes a lot of money - or did make a lot of money - selling big trucks, and Fiat, which makes small, fuel-efficient cars. The one bright spot might be California's greenhouse gas regulations, which would benefit Fiat and, therefore, Chrysler.

Ironically, California's pending waiver request to the U.S. Environmental Protection Agency that would allow the state to regulate greenhouse-gas auto emissions would actually play in the new company's favor.

The state's request would in effect raise fuel efficiency for new cars by 30% by 2016. A dozen other states and the District of Columbia have said they would hew to the new California standards.

If California succeeds in imposing its own auto emissions/fuel economy rules, the Chrysler-Fiat alliance would be well positioned to quickly deliver smaller, more fuel-efficient vehicles to market.

After years of fighting California's clean-air rules, Chrysler may in the end depend on them for its survival.
I have a cousin who does PR for Chrysler in the western United States. He has an interesting job these days.

My thots are that if Chrysler does survive this, it will be in diminished form. One long-standing problem that Chrysler has had is that of finding and retaining top talent. I don't know any of this in detail, and I don't have any facts to back this up - it's pure speculation on my part. There are, I'm sure, lots of great people at Chrysler, like my cousin. But there are far more people at Chrysler who are, I suspect, merely good at their jobs, or maybe even not that good. Anyone who is essential to a car company and who is very good at their job - engineers, car designers, manufacturing experts - has a strong incentive to work for another car company. Traditionally, that would have meant Ford or GM. In the last twenty or thirty years in this country, it has also meant the Japanese companies. If you have skills that are not industry-specific, you have even less incentive to work for Chrysler. If you're a crackerjack software designer, and your options are working for Google or Chrysler, you're going to work for Google. If you have a Harvard MBA in finance, chances are somewhere between slim and none that you are going to choose Chrysler over, say, JPMorgan. The same could very well be true to a lesser extent in dealerships around the country.

Speaking of whom, the LA Times interviewed some Chrysler dealers around LA. These guys are masters of spin, but I am not encouraged by some of their comments. Some of them actually seemed to suggest that bankruptcy was a good thing, because it ends the speculation.

"It's all for the better to get the mysteries and question marks behind us."
I've got news for you, dude: the mysteries and question marks are not behind you. They are in front of you. One question has been answered: will Chrysler declare bankruptcy? Answer: yes. Two far more important questions have not been answered: one, can Chrysler make enough cars that Americans want to buy? and two, will Chrysler emerge from bankruptcy as a stable, flourishing company? Those questions have not been answered, and the first one in particular is going to take a long time to answer. Chrysler did not get into this situation overnight. It will take a long time for Chrysler to convince lots of the American people that it's a good idea to buy a Chrysler. This is particularly unhelpful:

"We've all been zigging and zagging these last few months, but now we're talking about facts," Gray said. "Everybody has a bounce in their step now. It's a good day to be a Chrysler dealer."
No, it's not. Chrysler has a huge, some would say impossible, task ahead of it. It's not just about negotiating between the UAW and hedge funds. It's not about negotiating the minefields in Washington, DC.

It's about regaining the faith of customers. The Big Three having been losing mindshare for at least a couple of decades. Chrysler has made some interesting cars lately - the PT Cruiser, the Viper, the Crossfire. But it has to make beautifully ordinary cars. It has to make cars that fit the average American like a great pair of jeans - utterly comfortable. It has to make them really, really well. And dealers have to provide world-class service on a constant basis and as if their jobs depend on it - because they do.

The one thing the UAW can do to help the process is stop whining. The whole "Buy American" argument is, at this point, an albatross. The idea that Americans should buy American cars puts the interests of the American car worker ahead of the interests of the American car consumer. I should buy a car because a guy in Flint made it? Great, is that guy going to read my blog, just because I'm an American? If I make a movie, is he going to watch it just because I'm an American? No, he's not. He's going to read my blog or watch my movie because he finds my blog interesting or my movie funny. You want me to buy a car because I should be proud to be an American? Fine, then make a car that makes me proud of American cars.

UAW workers get a great deal. They work hard, but they also have the "30 and out" thing going - they can retire after 30 years. Imagine this: a guy starts working for GM in 1930 at the age of 20, and retires at 50 in 1960. He could be alive and well, 49 years later, at the age of 99. He has been retired for almost half his life. Most Americans do not get anywhere nearly that good of a deal from their employers, and they feel no special affinity for people who do. And don't get me started on the jobs bank.

I would like to see Chrysler succeed, but my hope is fading. Many people - several hundred thousand - would suffer if Chrysler went under. But many more people - many, many more people, like tens of millions - wouldn't miss it.