Thomas Sowell on Gun Control

Whether you are for or against gun control, Thomas Sowell lays out a good case for how the debate should take place in his column this week, Gun Control Laws.

When you stop and think about it, there is no obvious reason why issues like gun control should be ideological issues in the first place. It is ultimately an empirical question whether allowing ordinary citizens to have firearms will increase or decrease the amount of violence.

…while the Supreme Court must make the Second Amendment the basis of its rulings on gun control laws, there is no reason why the Second Amendment should be the last word for the voting public.

If the end of gun control leads to a bloodbath of runaway shootings, then the Second Amendment can be repealed, just as other Constitutional Amendments have been repealed. Laws exist for people, not people for laws.

There is no point arguing, as many people do, that it is difficult to amend the Constitution. The fact that it doesn’t happen very often doesn’t mean that it is difficult. The people may not want it to happen, even if the intelligentsia are itching to change it.

He also calls out Supreme Court Justice Stephen Breyer for not knowing his job:

What all this means is that judges and the voting public have different roles.

Playground Logic

I’m enjoying reading Steven Landsburg’s book, The Big Questions.  I like his use of playground logic.   The following is from Chapter 20, The Economist on the Playground, where he discusses some of our ideas about fairness.

1. Don’t take things that aren’t yours. Whenever a politician proposes to make the tax code more progressive, we hear rhetoric about how the rich have too much, the poor have too little, it’s only fair to spread the wealth more equally, and so forth.  To me, the interesting thing about that rhetoric is that nobody believes it.  Of this I am certain, because in all the years I took my daughter to the playground, I never once heard another parent tell a child that if some kids have more toys than you do, that makes it okay to take some of them away.

I’d add that if you attempted to impose this rule on the playground to the very people who support a progressive tax code, you could meet with a violent response.  But, that’s pure speculation.  They may calm down after you explain that you are simply doing what’s intended in society through a progressive tax code.

Here’s another one:

2. Live with your choices. I once took two children to dinner.  Each had a choice: ice cream now or bubble gum later.  Alix chose the ice cream; Cayley chose the bubble gum.

Black Swans and Business

My very talented artistic brother (if you need artwork, video production, computer graphics contact him) sent me this Fortune interview with Jeff Bezos, founder of Amazon.com.

In it, Bezos expresses something that many business managers and many people do not understand.  It’s about setting your company up to benefit from Nassim Taleb’s idea of black swans, or highly improbable events.

Fortune: In the past, you’ve said that a company learns just as much as by its failures as it does by its successes. Do you still believe that?

Bezos: Well, the key is that the company has to experiment, and what you want to try and do is reduce the cost of experimentation so you can do as many experiments per unit time as possible so you can do as many experiments per week, per month, per year as you can –and they’re not experiments if you know they’re going to work.

So you want to do a lot of these experiments, and many of them will fail, and that’s okay. Because if you’re doing enough of them, there will be some winners. That’s the only mindset you can have if you want to invent. At Amazon, we’re very focused on invention.

Bezos understands that much of business success and failure is luck.

That’s difficult for smart people to believe. 

Interesting Piece on Canada

Canada: Land of the Free, an interview with Canada Finance Minister Jim Flaherty appeared in the weekend edition of the Wall Street Opinion Journal and was surprisingly interesting.  Here are some interesting tidbits:

Canada did not have a banking crisis in 2008 and, despite its vulnerability to U.S. economic weakness it emerged from recession in the third quarter of last year.

Mr. Flaherty was in New York this week talking up the Canadian economy at the consulate, where I cornered him for an interview. I started by asking him how his country avoided the mistakes that led to the housing and banking crisis in the U.S.

“One of the fundamental reasons is that Canadian banks, the lenders on residential mortgages, lend and hold,” he begins. “Someone getting a mortgage normally meets with a live human being in a bank branch and [the bank] will know something about the person before it makes the loan.” Banks don’t sell them, either, he adds; “there wasn’t that repackaging securitization—selling the loans—that happened a lot elsewhere.”

Anyone Mad at Government Part II?

Here’s some interesting information about the government and the oil spill from Mario Rizzo at the ThinkMarkets blog.

When I was a kid, most stores had a policy policy about broken merchandise, “You break it, you buy it.”  This didn’t prevent all things from being handled carelessly, but it sure saved a lot of damage because it made clear who was responsible.  Those responsible parties took greater care in handling the merchandise.

This applies here.  BP broke it.  BP buys it.  That means stopping the leak and cleaning up the mess it has caused.

But, that doesn’t mean that the government should get a free pass.  That would be like letting an accomplice to a crime off.  A good example of how the government has already failed us and yet we seem to want to entrust it with even more responsibility as if that will fix everything.

From the mouths of babes

My kid asked me today why “A” is the first letter of the alphabet.  I like it when he asks questions I can’t answer.

LOST was a good example of bad succession planning

In the end, I suppose things turned out okay for the mysterious island and, apparently, humanity.  But, there were some dicey moments.  Had Jacob done a better job at succession planning the island would likely have never been in danger, but I’m sure the TV series would not have been nearly as interesting.

LOST exhibits many of the characteristics of bad succession planning.  Candidates for the job didn’t know they were up for the job nor did they know the job existed.  The job description was sketchy and the traits on which the candidates were evaluated on were too narrow.   In the end, the job transition wasn’t smooth and the there was a time when there was way too much at stake.

Unfortunately, something resembling this bad succession planning or worse occurs at many organizations.

Questions I wonder if Obama has asked about the oil spill

To BP management and state and local governments along the coast: What can we do to help?

To his advisers: What can we do within our power to help?

Thomas Sowell Tuesday

Thomas Sowell’s column today, Degeneration of Democracy, is fantastic. Here’s a key excerpt:

Just where in the Constitution of the United States does it say that a president has the authority to extract vast sums of money from a private enterprise and distribute it as he sees fit to whomever he deems worthy of compensation? Nowhere.

And yet that is precisely what is happening with a $20 billion fund to be provided by BP to compensate people harmed by their oil spill in the Gulf of Mexico.

Many among the public and in the media may think that the issue is simply whether BP’s oil spill has damaged many people, who ought to be compensated. But our government is supposed to be “a government of laws and not of men.” If our laws and our institutions determine that BP ought to pay $20 billion– or $50 billion or $100 billion– then so be it.

But the Constitution says that private property is not to be confiscated by the government without “due process of law.” Technically, it has not been confiscated by Barack Obama, but that is a distinction without a difference.

Why Warren Buffet is a Hypocrite

In my previous post, I accused Warren Buffet of hypocrisy.  Now I’ll state my case.

In the 2003 article, Buffett claims that if the then proposed dividend tax reductions were passed, his tax rate would drop to 3%.  Making this claim ignores the taxes Berkshire Hathaway paid on Buffett’s behalf as an owner of the corporation.   Further, I can assure you that Buffett does not ignore taxes paid by a company when evaluating how much he is willing to spend to buy a company.

Not convinced?

Buffett explains it well in his own letter to shareholders in Berkshire Hathaway’s annual reports (which I highly recommend reading for anyone remotely interested in business and investment management).

For those that don’t know, Berkshire Hathaway is Buffett’s business.  B-H is a holding company that owns many other businesses, such as Dairy Queen and GEICO  insurance, outright.  It also owns substantial positions in other publicly traded companies like Coca-Cola.   For example, B-H owns 8.6% of Coca-Cola’s outstanding shares amounting to $11.4 billion in value as of last December.