ProfessorBainbridge.com

Kenwood Sauvignon Blanc (Sonoma County) 2003

Light, crisp, refreshing. Citrus up front, with grass on the finish. The after-taste is a bit bitter, like an under-ripe grapefruit. Grade: B-

CE Petit

Blawgger and authors' lawyer CE Petit continues his fascinating series on the legalify of fan fiction. The preceding post is also noteworthy, in that it inadvertently illustrates a problem with textual mediums - namely, that they do not convey certain social cues. Hence, CE takes seriously a comment I intended as a one-liner. Petit solves this problem on his end with a useful HTML gizmo that allows him to put fake font signals in his posts for things like sarcasm. E.g.,

<SARCASM> Personally, I blame the MSM.</SARCASM>

I've got to get myself a way of doing that with some sort of autotext.

Giving away the store

Why are the Republicans giving away the store on Social Security reform by volunteering to put rate increases on the table without getting anything in return? First, President Bush, now Senator Rick Santorum. It's not how they taught negotiation when I was in law school.

Homo Economicus

Steve Verdon has a very nice post today on the various ways in which experimental economics (a.k.a. behavioral economics) is changing the way economists think about behavior, in particular by challenging the traditional rational choice model that lies at the heart of neo-classical economics. I used some of this new learning - specifically, the sub- branch known as behavioral finance - in my article on the role of mandatory disclosure in securities law.

Slatisms

Jim Lindgren has a great post today on Slate's Bushism of the Day feature:

You would think that George W. Bush would make enough verbal gaffes that a journalist wouldn't have to try to trick his readers into thinking that Bush is more inarticulate than he is. But Slate, under the direction of Jacob Weisberg, must come up with a Bushism of the Day to feed their feature and the cash cow of calendars and other merchandise catering to Bush-loathers. Eugene [Volokh] has been insightfully covering these over the last year or so.

Accordingly, on days when Bush has made no real mistakes, Slate must squeeze quotations of context or pretend that informal, off-the-cuff speech should look on the page like edited prose.

As they say, go read the whole thing.

Reason or DU

Today's pop quiz: The following comment directed at Pope John Paul II was posted at a popular website. Was it Democratic Underground or Reason?

Senile old fool. Just die already!

Answer: Reason. As I've noted before, sometimes its very hard to tell the difference between anarcho-libertarians and the far left.

Ridge Three Valleys (Sonoma County) 2001

A Zinfandel-based (50%) blend of Petite Sirah (15%), Carignane (15%), Mataro (11%), and Grenache (9%). (What they couldn't find a kitchen sink?) It's sourced from six vineyards in the three main Sonoma valleys (Dry Creek, Alexander, and Russian River), including selections from young vines at Lytton Springs and Geyserville.

Good berry fruit with a lot of pepper. Enough tannins to justify another year or two of further aging. But the finish is a little hot for my taste. Grade: B

Update (1/24/2006): About the same. Still peppery. Still a little disjointed.

Social Security

Lawrence White responded to my post on Social Security with a number of good points, but I want to quibble with one of his arguments. He posits:

Professor Bainbridge adds:

Even proponents of private accounts concede that the transition costs will require trillions of dollars of government borrowing. Do we conservatives really want revenge on FDR and the New Deal at that price? Personally, speaking as a small government fiscal conservative kind of guy, I'd give up personal accounts if any money thereby saved was spent on deficit reduction or, better yet, an income tax rate cut.

The good professor is simply confused about the "price" of personal accounts here. As even opponents of private accounts concede, the proposed move to personal accounts, with workers who opt-in paying an appropriate price in reduced benefits, is self- financing. It will require borrowing, yes, but it will not require additional taxes or benefit cuts to repay the transitional debt. The debt will be repaid with the cash freed up by the voluntary benefit reductions for those who opt in. Conversely, giving up the Bush proposal for personal accounts will not make a single dollar available for deficit reduction or an income tax rate cut.

As I understand it, Social Security is effectively funded on a pay as you go basis in which current workers taxes are not saved but rather are used to pay benefits to current retirees (ignoring the voodoo economics of the trust fund). Accordingly, switching to private accounts will immediately reduce Social Security revenues as some current workers opt for them. As a result, the government will have to borrow now. The government will also have to pay interest on the debt starting immediately. In contrast, the offsetting reduction in benefits will not take effect for many years, when those workers who opted for private accounts finally retire. So here's my question for White: do you have hard data showing that the present discounted value of the future reduction in benefits at least equals the present discounted value of the bonds and interest paid on them? If not, what I learned about capital budgeting tells me it's a bad deal. No?

Anyway, does anybody really think that you can sell this idea to the public? The pro-private account Economist($) reports good reasons to think Social Security reform is going to be a very tough sell and, perhaps worse, that making a deal will probably require higher taxes:

Social Security reform, for now, is losing rather than gaining political momentum in Washington. Despite several presidential sales-trips to the heartland, Americans have not embraced private accounts. A Wall Street Journal/NBC poll in early February suggested that support for private accounts has fallen from 46% to 40% in recent weeks. More important, opponents of private accounts, particularly older people, care more, shout louder and vote more than younger supporters.

Republican congressmen are therefore loth to endorse pension reform unless they are sure it will pass the Senate. And so far virtually all Senate Democrats are categorically opposed to the idea. More important, it is becoming clearer that the kind of compromises necessary to prise away the necessary Democrat votes will appal conservative Republicans. ...

On February 16th, Mr Bush said that although he was implacably opposed to raising the payroll-tax rate, all other options? including raising the payroll-tax cap?were on the table.

Conservative tax-cutters were horrified. ?I, for one, am one of those that didn't come here to raise taxes,? fumed Tom DeLay, the majority leader in the House. Republican activists could not understand the logic, or the timing, of Mr Bush's concession.

I still think the best solution would be to raise the retirement age and switch the benefit calculation to price indexing. I'd gladly swap no new taxes for no private accounts.

Congrats to Smith-Madrone

Congratulations to the good folks at Smith-Madrone Winery:

Smith-Madrone Winery?s 2002 Chardonnay was awarded Best of Show-White Wine at The Hilton Head Island WineFestival Judging & Competition. More than 70 judges completed their work on February 17; there were more than 1,200 wines competing for an array of awards. The Smith-Madrone was one of 500 white wines....

It couldn't happen to a nicer bunch of people. Great folks who make great wine.

Paraduxx (Napa Valley) 2001

An interesting blend of Zinfandel (70%) and Cabernet Sauvignon (30%). The concept is similar to high-end Australian blends of Shiraz and Cabernet, in which the Shiraz provides forward fruit while the Cabernet provides depth and structure. Here Zinfandel performs the former function to equal success.

Lots of jammy raspberry and blackberry, with a touch of bramble, overlay a strong framework of tannins and acids. Pleasant to drink now, but has good aging potential. (It worked great with Beef Stroganoff, with the tannins and acids slicing through the cream sauce to refresh the palate.) Grade: A-

The Economist Disses Europe

The Economist($) pans Europe's reaction to President Bush (although they also eventually get in a dig at the latter):

As George Bush toured Europe emphasising, in speech after speech, that the central principle of his foreign policy is the effort to spread liberty and democracy, Europeans queued up to mutter about how many American allies are unfree and undemocratic, and how contradictory it is to use guns and tanks as prime tools in that cause. Far better, they said, to be a ?moral power? like the European Union, spreading freedom through softer and subtler means of influence and engagement?means like, as Mr Bush heard to his horror, lifting the EU's embargo on arms sales to China, in return for precisely nothing from that communist regime on human rights, or democracy, or on its sabre- rattling over Taiwan. Oh, except more trade, including more arms sales.

Exactly.

Goldeneye Pinot Noir (Anderson Valley) 2001

Goldeneye is Duckhorn's Pinot Noir house. The 2001 offers classic California Pinot Noir flavors and aromas. Strawberry, cherry cola, earth, mushrooms, plus that classically Pinot aroma I associate with grape stems steeped in tea. Grade: A--

More on Wal-Mart: Employee Involvement

My post on the conservative case against Wal-Mart generated a lot of email and blog responses, several of which I plan to discuss in the next couple of days. One of the most interesting came from Max Sawicky, who makes a number of good points. I want to particularly note his invocation of employee involvement in corporate decision making:

The most interesting point in the post goes to the democratic implications of easy entry of markets by small, entrepreneurial firms. Such entry is thwarted by the dominance of Walmart-scale retail firms. The left can be a bit scrambled on this count. The left has a thing about business, while the right has a thing about labor. The left can talk about the merits of industrial democracy -- workers having more say in how their workplaces are run, the merits of flexible assignment of tasks in a workplace, flexible arrangements in work schedules, and representation on boards of directors. These are all of course privileges of working for yourself, the logical escape from wage slavery.

Max thus seemingly raises the interesting question of whether industrial democracy is a substitute good for individual ownership of a small business. I would argue that it is not - or, perhaps more precisely, that it in practice employee involvement has not proven to be a useful substitute for ownership of one's own business.

I did a lot of work on this issue in the late 1990s, producing a number of articles on the topic. In Privately Ordered Participatory Management: An Organizational Failures Analysis, for example, I argued (quoting from the abstract):

American industrial enterprises long organized their production processes in rigid hierarchies in which production-level employees had little discretion or decision making authority. Recently, however, many firms have adopted participatory management programs purporting to give workers a substantially greater degree of input into corporate decisions. Quality circles, self-directed work teams, and employee representation on the board of directors are probably the best-known examples of this phenomenon.

These forms of workplace organization have garnered considerable attention from labor lawyers and economists, but relatively little from corporate law academics. This is unfortunate, both because the tools routinely used by corporate law academics have considerable application to the problem and because employee participation is ultimately a question of corporate governance.

According to conventional academic wisdom, perceptions of procedural justice are important to corporate efficiency. Employee voice promotes a sense of justice, increasing trust and commitment within the enterprise and thus productivity. Workers having a voice in decisions view their tasks as being part of a collaborative effort, rather than as just a job. In turn, this leads to enhanced job satisfaction, which, along with the more flexible work rules often associated with work teams, results in a greater intensity of effort from the firms workers and thus leads to a more efficient firm.

Although this view of participatory management has become nearly hegemonic, the academic literature nevertheless remains somewhat vague when it comes to explaining just why employee involvement should have these beneficial results. In contrast, my article presents a clear explanation of why some firms find employee involvement enhances productivity and, perhaps even more important, why it fails to do so in some firms. Despite the democratic rhetoric of employee involvement, participatory management in fact has done little to disturb the basic hierarchical structure of large corporations. Instead, it is simply an adaptive response to three significant problems created by the tendency in large firms towards excessive levels of hierarchy. First, large branching hierarchies themselves create informational inefficiencies. Second, informational asymmetries persist even under efficient hierarchical structures. Finally, excessive hierarchy impedes effective monitoring of employees. Participatory management facilitates the flow of information from the production level to senior management by creating a mechanism for by-passing mid-level managers, while also bringing to bear a variety of new pressures designed to deter shirking.

In other words, I view employee involvement - at least as actually used in US corporations - as not an escape from what Max calls "wage slavery," but rather a top-down phenomenon intended to redress certain problems associated with the growth of bureaucratic hierarchies within US corporations. In my article Employee Involvement in Workplace Governance Post-Collective Bargaining, I elaborated the analysis, using transactional economics to argue that employees are better served by traditional collective bargaining than by the various forms of industrial democracy. Finally, in my article Corporate Decisionmaking and the Moral Rights of Employees: Participatory Management and Natural Law, I rejected arguments that employees have a moral right to participate in corporate decision making (as contrasted to a moral right to act collectively through unions).

Silk Road Estate Bottled Cabernet Sauvignon (China) 2003

Yes, really, my first sampling of Chinese wine from a vinifera grape. Poured by a nice fellow I met at my wine storage place, so diplomacy briefly reigned, but then we all admitted that nobody liked it. I got old musty wood, turpentine, green bell pepper, and a very industrial after-taste. The fellow who opened it thought it evoked bug spray. Grade: D-

Kill or Cure?

Does this sound familiar?

Recent headlines claimed that drinking coffee can reduce our risk of liver cancer. A study of some 90,000 Japanese found that people who drank coffee daily or nearly every day had half the liver cancer risk of those who never drank coffee. The study was published in the Journal of the National Cancer Institute.

As I pondered these headlines, I recalled a morning in 1981 when I turned on the Today show at 7 a.m. and was greeted with grim news: drinking coffee caused pancreatic cancer.  (Link)

Dr. Elizabeth M. Whelan offers some very sensible advice in her TCS column:

Consumers must be constantly skeptical of studies linking variable A with disease B, whether the news is potentially good (as was the coffee/liver cancer link) or just plain scary (many people in the early 1980s made a concerted effort to wean themselves from their coffee habit after the coffee/pancreatic cancer headlines appeared).

Personally, I blame the MSM.