Direct Democracy Drives Distrust

High and frequent exposure to ballot measures has been shown to increase the awareness, efficacy, political participation, and even the general level of happiness of citizens. In contrast to these studies . . . data from two surveys . . . demonstrate that ballot initiatives in the American states . . . create an environment that encourages citizens to distrust their government.

From here.

The study is notable, because most critiques of the initiative and referrenda process are fundamentally elitist. They argue that direct democracy produces worse policy than deliberate representative democracy. This study, in contrast, questions whether initiatives and referrenda are good from a democratic government enhancing perspective.

F-22 High Maintenance

[O]n average from October last year to this May, just 55 percent of the deployed F-22 fleet has been available to fulfill missions guarding U.S. airspace, the Defense Department acknowledged this week. The F-22 has never been flown over Iraq or Afghanistan. . . .

"It is a disgrace that you can fly a plane [an average of] only 1.7 hours before it gets a critical failure" that jeopardizes success of the aircraft's mission, said a Defense Department critic of the plane who is not authorized to speak on the record. Other skeptics inside the Pentagon note that the planes, designed 30 years ago to combat a Cold War adversary, have cost an average of $350 million apiece and say they are not a priority in the age of small wars and terrorist threats.

Skin problems -- often requiring re-gluing small surfaces that can take more than a day to dry -- helped force more frequent and time-consuming repairs, according to the confidential data drawn from tests conducted by the Pentagon's independent Office of Operational Test and Evaluation between 2004 and 2008.

Over the four-year period, the F-22's average maintenance time per hour of flight grew from 20 hours to 34, with skin repairs accounting for more than half of that time -- and more than half the hourly flying costs -- last year, according to the test and evaluation office.

The Air Force says the F-22 cost $44,259 per flying hour in 2008; the Office of the Secretary of Defense said the figure was $49,808. The F-15, the F-22's predecessor, has a fleet average cost of $30,818.

From here.

A secret false claims act suit filed in 2007 by a Lockheed employee claims that Lockheed deliberate lied about skin coating problems to the Air Force.

Keep in mind that the F-15 warplanes it is replacing were built several decades ago, while the F-22s are brand new.

Was There A Coup in Honduras?

Was there a coup in Honduras? The case that there was not a coup is pretty strong.

The basic argument is that the attorney general, supreme court of Honduras and Congress of Honduras had the legal authority to remove, and did remove, the President, and that the use of the military to carry out this order was not contrary to the law of Honduras.

There is certainly no doubt that the deposed President was behaving badly. He was defying a court ruling regarding a unconstitutional referendum to extend his own term. He wasn't impeached by the Congress of Honduras, but there is no natural law that makes a Congress a proper arbiter of that impeachability while excluding a supreme court for making that kind of determination.

Equally important, the Congress, Supreme Court and Attorney General of Honduras remain in power, and the acting President is a civilian. Normally, one thinks of a coup as an event that displaces the entire civilian regime and installs the military in its place, at least temporarily. There is no indication that the institutions of the government of Honduras are so dysfunctional at the moment that they are incapable of adjudicating the legitimacy of the incumbent President. Likewise, the military has not presumed the power to change the constitution of Honduras outside legal channels.

The change of power was also bloodless. The deposed President was removed from office and involuntarily exiled from his country, but he was not physically harmed, imprisoned, kept ex communicado, detained in the place to which he was exiled, or had his property confiscated. His relatives have not been held hostage. No one else was seriously injured or killed as the military removed him. His four year term was close to its end in any case, and he was not eligible to be re-elected.

The Going Private Trend

The number of distinct entities required to make disclosures as publicly held companies has decreased dramatically after reaching a peak in the year 2000. Then, roughly 12,500 companies filed forms 10-K or 10-Q. Now, a little less than 9,000 distinct entities do. The numbers are defined as follows:

The counts use distinct CIKs that filed a 10-K or 10-Q form type during the period. 10-K form types include 10-K, 10KSB, 10-K405. 10-Q form types inlude 10-Q and 10QSB. Entities using the asset backed SIC code are excluded. Period dates are adjusted to handle the extended filing deadlines for 10-Ks. Period 1 for the K is February thru April. Period 2 is May thru July etc. Periods for the Qs are calendar year quarters.

The drop in the number of entities filing forms 10-K or 10-Q is roughly 3,500, which is a decline of 28% from the peak, and the decline was more of less continuous for the entire time period, which includes the tech bust, the subsequent period of economic growth, and the financial crisis. It happened despite the fact that a tax break for dividends received from C corporations (which includes all publicly held corporations) was established during this time period and has not been repealed.

The numbers could have declined for a variety of reasons, including consolidation and merger of companies, companies going out of business, and "going private" transactions. Given the continuity of the trend, which coincided with the rise of private equity funds and hedge funds, I suspect that the bulk of the change is due to "going private" transactions. Ruminations on the management advantage of private equity firm organization are found here.