January 23, 2002

Enron: bankruptcy and "ruin"

Enron: In finance, reward is proportional to risk. So, corporate insiders have an incentive to take big risks. If they succeed, they are vastly rich. If they fail, the current stockholders are wiped out. The insiders, however, typically have previously sold enough stock to manage to shield millions of personal assets from corporate creditors, so they walk away merely rich. So, why not take huge risks? In J.P. Morgan's time, in contrast, bankruptcy meant "ruin:" i.e., poverty. That's why they jumped out windows back then. Corporate bankruptees never kill themselves anymore because they still have highly comfortable lives ahead of them. The solution is to make top corporate officers more personally responsible for paying off corporate collapses.

More Enron: Having noted yesterday how business insiders never kill themselves anymore over being "ruined" (largely because, unlike in the past, they aren't really ruined - they always escape poverty) comes word today that former Enron Vice Chairman J. Clifford Baxter has shot himself in the head. Still, like the Enron scandal in general, that's an exception that proves the rule.

No doubt, prison sentences are in order for several Enron bigshots, but the truth is that criminal trials aren't an adequate deterrent for corporate malfeasance in general. The standard of guilt - beyond a reasonable doubt - is high and the complexity of the cases often makes reaching that level of certainty beyond juries' capabilities. You'll note that Enron is a huge once-a-decade story in elite circles, but it's making most of the public's eyes glaze over.

No, civil trials and regulatory proceedings are more appropriate for deterring routine bad behavior. The problem is that the penalties are seldom severe enough. Executives generally escape scandalous bankruptcies with their lifestyles merely cut down from filthy rich to highly affluent. Consider a parallel case: O.J. Simpson's daily life after losing a gigantic civil suit. He didn't have to get a job at Burger King. He merely went from playing golf daily at ritzy Riviera to playing golf daily at the public courses like Knollwood at which I occasionally treat myself to a round. 1/25/02

January 22, 2002

The problem with polygamy

"The Problem with Polygamy" - Here's my fun little article on the logical blindspot in every article I've ever read about polygamy. See if you can spot the common fallacy displayed in this Onion-like but genuine quote from the BBC: "Sudan's President Omar Hassan al Bashir has urged Sudanese men to take more than one wife in order to double the country's population of 30 million ... 'We should achieve this aim by having many wives,' Bashir said." 1/22/02

Bioethics are too important to leave to the bioethicists

One of my longstanding complaints is that bioethics are too important to leave to the bioethicists. It's an insular profession where insiders who have never written anything of interest outside bioethics are treated as if they were Marcus Aurelius, Confucius, and Einstein rolled into one. The only two bioethicists whose names anyone on the outside can remember are Peter Singer and Leon Kass, and they got that way for their sophomoric extremism. Pete, you know that old saying Dog is Man's best friend? Well, you are supposed to stay just friends. And Leon, civilization won't collapse if people eat ice cream cones while walking down the street.

With that in mind, Bush's new nominees for his Council on Bioethics seem much stronger than I expected. James Q. Wilson, for example, has a long track record of making successful predictions (e.g., to reduce crime: put more crooks in jail for longer terms and fix broken windows). Francis Fukuyama, Charles Krauthammer, and Stephen Carter are also smart guys that you might have heard of. 1/22/02

January 20, 2002

Enjoying Martin Luther King Day off?

Enjoying MLK day off? What, you don't get the day off? And you don't care because the dead of winter is a worthless time for a three day weekend?

Since most whites don't mind working on Martin Luther King Day, the holiday has just ended up worsening racial divisions. Chris Rock says, "You gotta be pretty racist to not want a day off work!"

Fortunately, I have a solution. Move the holiday from King's birthday to the date of his most memorable accomplishment, his "I Have a Dream" speech on Aug. 28, 1963. All Americans would then unite to demand a three day weekend the week before Labor Day. Racial harmony would prevail across the land. 1/20/02

More MLK: You may have thought that King's "Dream" speech was about allowing black American citizens to share fully in the benefits of American citizenship. But Roger Clegg, of Linda Chavez's Center for Equal Opportunity, sets you straight in National Review Online. It was really about "liberal immigration policies." Thanks, Rog, I can feel the scales falling from my eyes already. 1/20/02

Factually Correct? The 9/11 Firemen Statue

"Factually Correct?" "I think the artistic expression of diversity would supersede any concern over factual correctness," said a black NYC fireman in defense of depicting as minorities two of the three firemen in that 9-11 statue that will be based on a picture of three white firemen. Jonah Goldberg of NRO works up a good head of steam denouncing the poor man for saying "factual correctness." Jonah seems to assume that works of art inspired by reality were always 100% "factually correct" until insidious postmodernists like Stanley Fish corrupted everybody.

Look, Jonah, Iet me let you in on a secret: George Washington didn't really chop down the cherry tree. As Nabokov used to say, art is artifice. It's artificial. People who make art are called artists, not naturists or factists. Artists have been fudging the facts forever to affirm various values. You can argue about which values art should express, but please don't get up on your high horse about postmodernists inventing factual incorrectness in the arts.

What's actually interesting about the statue controversy is that around 95% of the NYFD is white. NYC firemen are largely a hereditary caste for white Catholics. The few blacks who get in can expect lots of on-the-job harassment intended to keep the NYFD that way. Hereditary castes are supposed to justify their existence by living up to the ideals of noblesse oblige - they live better than others because they are not afraid to die to defend the others. That bargain is seldom fulfilled in real life. Yet, the NYFD has not only satisfied the demands of noblesse oblige, but vastly exceeded them. 1/20/02/

Radley Balko: "Race Doesn't Exist"

Headscratcher of the Week: "A black man and a white man from Manhattan, for example, are likely to be more genetically similar than a black man from Manhattan and a black man from Nigeria." - Radley Balko, Cato Institute, "Biologically Speaking, Race Doesn't Exist," FoxNews.com.

Well, sure, if the average "black" guy is more than half white. But most African-Americans are not (1/6th white on average might be the best estimate), so the statement is obviously silly. How do writers and editors get simple family tree stuff like this so wrong?

Yeah, I know, everybody has heard about how "There is more genetic diversity in one African village than in yadda yadda." But that only applies to junk genes, not the genes that actually do anything. The West Africans dragged to the U.S. as slaves were actually biologically fairly homogenous. They were the descendents of the "Bantu expansion" that emerged out of the Nigeria-Cameroon border region a few millennia ago and ethnically cleansed most of Africa of Bushmen and other truly genetically diverse peoples. Dean of population geneticists L.L. Cavalli-Sforza says, "… differences between most sub-Saharan Africans other than Khoisan [Bushmen] and Pygmies seem rather small." 1/20/02

More from Balko's "Race Doesn't Exist:" "Possibly only six genes determine the color of a person’s skin ... Six genes, out of the 30,000 to 40,000 genes that make us human, determine race."

Inspired by this widespread notion that the only biological difference between blacks and whites is skin color, an 11-year-old boy asked a conservative talk show host this question: How come everybody is so worked up over plans to change one of the bronze figures in the 9-11 Firemen's Statue from a white man to a black man? Won't all the statues be bronze-colored, so nobody could tell the difference in race?

The radio host was completely stumped by the question!. White people sure can be morons about race - they just condescendingly assume that blacks are whites with black skins. They never look at blacks carefully enough to notice the myriad other differences. 1/20/02