Gibson Guitar Raid Mystery

Anthony solicits my opinion on the US Customs raid on Gibson Guitar.   I haven't clue what is, or what would be going on there.  it seems to be over messy enforcement of endangered species tree rules. Even Gibson is not told clearly, and they have been raided before, and they are not sure why.

People who are guilty of something generally do not go on national TV and claim they are raided for no reason, they usually hide behind lawyers.  Customs is usually happy to say exactly why someone was targeted.  What is the point of enforcement if not to remind people not to break the rules?

The UK and USA have different approaches to rules and regs:  USA stresses enforcement, UK stresses compliance.  What is the difference?  In USA, when there seems to be a problem, swat teams saddle up, assault rifles issued, overwhelming force is brought to bear, people are put out of work, the computers are seized.

In the UK, you'll get a summons to bring your records and make an appointment for a inspection.

Both means yield about the same results.

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Never Seen This Before

Last quarter I saw something for the first time.  I don't know what to call it, so I'll just describe it.

The student believed business was a matter of going to the local, state and federal government and getting permits, and licenses for a given business.  Next, the student expected the government would provide a list of suppliers and customers.  Also, the government would provide any necessary financing.  After this, the student would be in business, and do well and live happily ever after.  My job was to provide, in sequence, the steps and lists.  One signed up at a government school to learn these things.

I was astonished when it dawned on me, through several emails, what this student expected.  But here is the problem: the student argued, in essence, what were all these government programs for if not exactly what the student outlined?  Was I suggesting that the taxes we pay for these services are a waste, and the people working in these government offices are not really performing any value, and that is largely a charade?  Was not most of USA industry heavily reliant on government assistance?  What was the commerce department and Small Business Administration for if not exactly what the student held to be true?

When I argued "well, yes, it is a waste," the student became indignant, and took his complaint to the school.  In time even the school despaired of correcting the misapprehension on the student's part.  The school was accused of cheating the student!

I've never met anyone, inside or outside of government, who actually believed in the "program."  People always seem to understand, and in varying degrees know, that life is about compromises, and there is plenty of wackiness in the world, and gee, what are you going to do?

I have never met anyone who takes it all at face value, and lives in full confidence it is just as advertised:  to start a business, you go to government, and it gives you customers, suppliers, finance and whatever else you need.

But who can argue with this?  Is this not exactly what is true for most of USA industry?  The biggest single customer in the world is the United States govt, so why not?

Trying to argue that one should be creative and base a business on customers, that is, not relying on the government, sounds downright foolish, if not seditious.

In time he will work out the steps himself, and then no doubt fail.  Or maybe not, maybe this is exactly how Warren Buffett and Bill Gates think, but no, those two "get it."  I wonder how this person will feel after he fails.  One of the great safety valves in USA is the fact that no one really trusts the government.  People who are fooled get very angry.  Even dangerous.  When the government fails, like Katrina, Wall Street Supervision, 9-11, we all just shrug our shoulders.  Of course they failed.  That is how come we do not depend on it.  What a strange thing to see someone who completely buys the program!

It has dawned on me that all of us are not far from this particular student's position when it comes to education.  Do we not mostly believe education is a matter where you go to the government, get told (SAT tests) where to go to school, at mostly government schools, and what to take, and then are given the money to succeed at education, all by government?  And with our government-given education, we will succeed and live happily ever after?  Are we not as delusional about education as this student is about business?

One comes across the strangest things when teaching.

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A New Spin Style

I like listening to arguments of the powers that be, not for content, but for style.  There is a new method of spin used by the powers that be.  It is developed by rhetoricians, and then wholesaled to the minions who create spin for public officials.

The tropes are easy enough to "hear" but hard to spot or wrap one's brain around.  This particular one probably originated with Bill Clinton, but he is a such an extraordinary liar he was hard to spot.  I listened to Christine Gregoire, governor of Washington, use it inexpertly, and so she gave away the game.  Here she says she is suffering and blames the voters.   She should have said she was suffering and say "voters know best."

Let's move on to an excellent example.

Mish Shedlock quotes an article on Bill Gross, of Pimco, who is certainly a leading public figure.

"When you're underperforming the index, you go home at night and cry in your beer," the Financial Times, in its online edition, quoted Gross as saying. "It's not fun, but who said this business should be fun. We're too well paid to hang our heads and say boo hoo."

Gross, who oversees $1.2 trillion at PIMCO, said it was "pretty obvious" he wishes he had more Treasuries in his portfolio right now.

"I get that it was my/our mistake in thinking that the U.S. economy can chug along at 2 per cent real growth rates. It doesn't look like it can."

Now note... Gross is a billionaire from investing other people's money.  His pay is tied to performance.  His specialty is bonds.  His spin is "I suffer..."  and then mixed with "I make a lot of money..."

The first part is unapparent, the second part is quite apparent.  In the first part, it is those who pay him fantastic amounts of money are the ones who suffer by his actions, not he himself.  So he embraces their pain pretending it is his.  Then he links it to the obvious fact, that he has a fantastic income.

The result is he escapes responsibility for his actions.  Since he too has ostensibly also suffered, he is as much a victim as anyone else.  And he makes so much money because he suffers as much as anyone else.  The spin is inherently untrue, but a beautiful piece of rhetoric.

This will be in fashion for a few years, until people spot it, as when a politician says "it's for the children..." and everyone now winces, where once that worked.

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Business Protecting Itself With Gold

Cobden Centre keeps hitting the relevant problems in the economy, and I chimed in on this debate with this point:

Mr. Musgrave sent us to a 1913 essay on money a few weeks back which demonstrated in history gold as a medium of exchange is in the minority, paling in comparison to vast complex agreements of economic import. Bankers broker the housing development here, the oil wells there, the farm in the country, the fishing fleet, the sweatshop and endless other cross referenced deals, and collect a tidy some, with nothing backed in gold, not even “money” by most definitions, all paper backed by paper. Just so.

The problem with some of these arguments is simply definitions. Paper backed by oil wells is not money, it is obligations, mere contracts. Why call such paper “money?”

Why not explain things as they are, which I believe is Mr. Baxendale’s brief. If it is other than medium of exchange, then it is not money. People need to understand what they are getting into when they make a deposit into a bank, with a paycheck from a company, both of dubious provenance.

Most of these economic transactions are appraised in something we call federal reserve notes, a document that does not have the word “money” on it, a phenomena I suspect is true world-wide for currency. Why do we call it money when the originators do not?

Is there not a simple solution? Simply ground any contract with a reference to liquidating in gold. End of story. In fact, it was once common. After the federal reserve act in USA, business people, knowing about funny money and inflation, protected their projects with gold clauses. Problem solved.

http://home.hiwaay.net/~becraft/FayCorp.pdf

Until the government outlawed business protecting itself.

http://www.rbs2.com/gold.pdf

It is a problem of definitions, but also a problem of who gets to make definitions. Job one is to outlaw government making definitions.

Then we can start to clarify, for example, a gold standard that includes cheats is not a gold standard (the concern of wildly fluctuating prices is not a problem in a free market, merely more information, an early warning system. The problem with paper backing paper economies is the wildly fluctuating prices).

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Hong Kong Architecture

In China, if your building blocks the path of a dragon who must run from the hills to the see, you must make room for it.   Perhaps it is just a way to be sure one does not build in a way that blocks powerful katabatic winds, or the williwaws, but in Hong Kong, one does not mess around.  See the hole in the high rise for the dragon to pass through.

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Given A Choice, The People Prefer Sharia Law

A German jurist has written a book bemoaning the fact that given a choice, some a significant number of German's prefer Sharia law.  Of course the Germans who do so are Muslim, but it goes to show they prefer their own law to German law.  I imagine if non-muslims applied to Sharia courts to settle dispute, they would be welcome.

His arguments call for a government crack-down on this parallel justice system, and recall that at one time in USA all disputes had to be brought to court, it was illegal to settle out of court.  You'll find this in Morton Horwitz book, the Transformation of American Law.

If one tallies how many disputes are settled outside of the court system, not just "settled out of court," but settled when granma steps in a knocks sense into fussing adult grandkids, when a preacher man rebukes effectively some one misbehaving, or just a ref on a play field, almost nothing in life is settled in courts.

And the courts themselves are divided up in tasks, criminal, admiralty, civil, petty, superior, appellate, etc.

Prof Rozeff calls this panarchy, that is everyone gets to pick their own system.  If we cannot have anarchy, then I guess panarchy will do.

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New Products

Here are some interesting new products, the first grocery items rated, and then the weird... the bed bug trap is interesting, and the ad copy is funny...

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For All The Suffering, Chemo Makes A 2% Difference

When someone you care about is suffering from cancer, the chemotherapy portion, a common treatment is far likely the worse part.  For all of the suffering of all of the people undergoing chemo, the difference between chemo and no chemo in treating cancer is 62% vs 60% survival rate.

At the same time, what seems to be far cheaper, easier, healthier is not allowed.   About the last thing you want in life is a government health care plan.  US Govt agencies actively murdered sick people at Tuskegee and in Guatemala.  They are much bigger today.

If you ever compare USA to Japan and Nazi Germany, people reject is on the grounds of false "moral equivalence."  But if both conduct the same horrible experiments, is there not true moral equivalence?

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Japanese Rice Field Art

We have crop circles in the West, but the aliens who trifle with Japanese fields have more fun...  not sure what the business aspect is to this, maybe perhaps it just shows some people have hobbies to please others...

http://www.tofugu.com/2009/01/05/crazy-delicious-japanese-rice-paddy-art/

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China Monitors Radiation - Yikes!

This does not look good...  maybe we should take a time out from wars and do something good.

Agoranation.ca

The Chinese are monitoring the radiation out of Fukushima, and have some things to say...  maybe you should not look...

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Too Subtle?

These famous logos have images hidden in them, ones I never noticed.  Nothing sinister, just clever, but too obscure?

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World Shipping Live Map

Paul Checks in from Shanghai with a map of shipping world wide, live and in real time.  It is pretty cool. A typhoon threatens the east coast of Taiwan, and there is no shipping there right now.  Wow...  Drill down by clicking on of the boxes with numbers in it.  If the ships disappear, drill up one level and back down.  It will refresh in real time.  The bigger the number, the more the shipping.

Notice something else...  poor countries, little shipping.  Rich countries, much shipping.  We just do not trade with poor people.  Exploiting the poor through international trade is sheer nonsense.  Exploitation of the poor is a local event, and such exploitation keeps the country too poor to engage in int'l trade.

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