30 April 2009

Chrysler Files For Bankruptcy

Debt holders, believing that they could get a more fair deal in bankruptcy court, refused to sign on to a non-bankruptcy reorganization of Chrysler, forcing the automaking into a Chapter 11 bankruptcy today, a deadline for obtaining new government financing conditioned on a viable non-bankruptcy deal. The big players in the bankruptcy, and a sketch of the expected reorganization plan which is described below.

[A] holdout group wouldn't budge on proposals to reduce Chrysler's $6.9 billion in secured debt. . . .

Chrysler will file for Chapter 11 bankruptcy protection in New York, giving Chrysler time to galvanize a partnership with the Italian car maker Fiat Group SpA. The government, which has already poured $4 billion in loans into Chrysler, would provide up to $8 billion more to carry the company through bankruptcy . . . . The government will also help appoint a new board of directors. . . .

[T]here would be no job losses or plant closing due to the Chapter 11. But it will be up to Fiat and Chrysler to decide whether to restructure the steadily shrinking company. . . .

Chrysler Financial, the arm of the company that makes loans to buyers and to dealers to finance their inventories, will be merged into GMAC Financial Services, once General Motors Corp.'s finance arm. The new GMAC will get government support. . . .

[T]he United Auto Workers ratified a cost-cutting pact Wednesday night.

Treasury reached a deal earlier this week with four banks that hold the majority of Chrysler's debt in return for $2 billion in cash. But the administration said about 40 hedge funds that hold roughly 30 percent of that debt also needed to sign on for the deal to go through. . . . the Treasury Department and the four banks tried to persuade the hedge funds to take a sweetened deal of $2.25 billion in cash. But in the end, this person said most thought they could recover more if Chrysler went into bankruptcy and some of its assets were sold to satisfy creditors. . . .

Fiat will obtain a 20 percent stake in Chrysler in return for giving the company access to its fuel-efficient technology, a move toward cleaner cars that the Obama administration thinks is critical to Chrysler's future survival. The company has committed to building Fiat cars in Chrysler factories, to be sold as Chryslers. . . . The administration expects [the bankruptcy] to last only up to 60 days.

Obama's auto task force in March rejected Chrysler's restructuring plan and gave it 30 days to make another effort, including a tie-up with Fiat. The company has borrowed $4 billion from the federal government and needs billions more to keep operating.

The UAW agreement, which would take effect May 4, meets Treasury requirements for continued loans to Chrysler Corp., and includes commitments from Fiat to manufacture a new small car in one of Chrysler's U.S. facilities and to share key technology with Chrysler.

Meanwhile, the Fiat partnership means Chrysler CEO Robert Nardelli could be out of a job. In an April e-mail to employees, he said that if the deal is completed, Chrysler would be run by a new board appointed by the government and Fiat. The new board, Nardelli wrote, would pick a CEO "with Fiat's concurrence."

Secured debt holders are entitled to payment equal to the fair market value of their collateral in a Chapter 11 bankruptcy reorganization plan, and generally speaking have a claim to those assets that has priority over all other claims, unless they receive a substitute payout of reasonably equivalent value.

In a Chapter 11 bankruptcy, the firm continues to operate, assets can be sold in a manner definitively free of any legacy obligations, union-management contracts may be breached, and debts can be compromised. Company management has the exclusive right to propose a plan of organization, which creditors must accept if a majority of claims by value in each class of creditors agree to the plan, or if a class of creditors receives no less than what would have been received if the company was liquidated. Companies making loans for funds received after a bankruptcy have priority as an administrative expense over all debt not secured by collateral.

Part of what makes the Chrysler bankruptcy atypical is that most of Chrysler's debt is secured by collateral. Publicly held companies generally favor bonds not supported by any specific collateral for financing, rather than the secured financing that Chrysler has, which is more typical of a privately held firm like Chrysler. At GM bondholders have essentially the same entitlements in a Chapter 11 bankruptcy as employee health care trust obligations, for example, while at Chrysler, financing debt has priority over the company's other obligations to the extent of the collateral.

The gamble that the hedge funds are taking is that a New York City bankruptcy judge will agree with them on what their collateral is worth. Given the downturn in the automobile industry, the limited usefulness of automobile industry assets to anyone else in or outside the industry at this point in time, that is a serious gamble.

Meanwhile, bondholders at General Motors are also balking over the deal that they have been offered in the GM non-bankruptcy reorganization plan, so it may be necessary for it too to file for Chapter 11 bankruptcy in a matter of days or weeks.

While car warranty liabilities are, in theory, subject to discharge in a Chapter 11 bankruptcy, it is highly likely that the plan of reorganization will fully reaffirm these debts in order to sustain consumer confidence in the post-bankruptcy company, and to prevent every warranty holder with a car from the company from becoming a claimant in the bankruptcy.

The third of the Big Three American automobile makers, Ford, has not received government funds to bail it out and is not believed to be planning an imminent bankruptcy.

29 April 2009

Northeast GOP Withered

Kos has done what I had been about to do, a detailed factual analysis of how many electoral votes and elected offices Republicans hold in the Northeast in the wake of Arlen Specter's party switch to the Democrats.

Presidential: 5 of 119 electoral votes

West Virginia was the only state to give its electoral votes to John McCain. The closest any of the other states came was New Hampshire, where Obama won by an easy nine points.

Senate: 3 of 24 seats

Two in Maine, one in New Hampshire. That NH seat will flip (D) in 2010. The two Maine senators, now alone in a hostile GOP, are candidates for future party switches. Especially Sen. Olympia Snowe.

House: 18 of 95 seats

Seven of those are in grossly gerrymandered Pennsylvania, and five in grossly gerrymandered New Jersey.

Governors: 3 of 12 states

Voters in liberal Connecticut, Rhode Island, and Vermont have elected Republican governors in large part as a check on the hugely Democratic state legislatures.

State Legislatures: 1 of 24 chambers, 815 out of 2,347 total seats

House 114D-37R
Senate 24D-12R
House 114D-37R
Senate 25D-16R
House 96D-54R-1I
Senate 20D-15R
House 104D-36R-1I
Senate 33D-14R
House 143D-16R
Senate 35D-5R
Assembly 107D-41R-2I
Senate 32D-30R
House 224D-174R
Senate 14D-10R
Assembly 48D-32R
Senate 23D-17R
House 104D-98R
Senate 30R-20D
House 69D-6R
Senate 33D-4R-1I
House 95D-48R-7I
Senate 23D-7R
House 71D-29R
Senate 28D-8R

So of 24 chambers in the region, Republicans only hold the grossly gerrymandered Pennsylvania Senate. In fact, count all the seats in the region, and Democrats hold 1,532 total seats compared to just 815 for the GOP.

Republican Party:

In the latest edition of the Daily Kos/Research 2000 weekly poll, Republicans fared as follows in the Northeast:

Republican Party
Favorable 8
Unfavorable 85

Congressional Republicans
Favorable 8
Unfavorable 80

Kos understates, I think, the extent to which upstate New York and Western Pennsylvania (particular in Pennsylvania's piece of Appalachia) are genuinely conservative, rather than merely gerrymandered, and the extent to which Appalachian West Virginia is much more conservative than its slate of Democratic Party elected officials suggest on an important subset of political issues. The long primary fight between Hillary Clinton and Barack Obama, more than anything else reflected this divide even within the Democratic Party. The 2012 election, after redistricting in the wake of the U.S. Census, will reveal how much the outcomes in those states were impacted by gerrymandering.

But, he also understates that extent to which a good share even of those Northeastern Republicans who remain in the U.S. House and as Governors are moderates in their party, far to the left of the Republican mainstream. On key votes and issues, these moderates can often be persuaded to vote with Democrats, although they generally vote with their party on procedural issues and issues of less importance.

On the other hand, as my Bostonian brother explained to me, in Massachusetts and other states where the Democratic Party is the dominant party, many fairly conservative candidates choose to affiliate with the Democratic Party because it is the politically opportune thing to do. Outside of New York State, where candidates run under multiple party banners at the same time, these ideological distinctions escape cursory review of party affiliations.

If the Republican Party were not so far out of the ideological mainstream of the Northeast, it would be politically viable in much of the Northeast. But, instead, as noted by a diarist at Colorado Pols, the prominent members of the public face of the Republican political movement are urging the ouster of the few moderates or apparent moderates that remain in the GOP -- even 2008 GOP Presidential nominee John McCain -- in the name of ideological purity. As previous noted at this blog, about half of Texas Republicans aren't even interested in remaining in the United States.

In sum, the GOP and particularly the conservative wing of the GOP, is in real trouble in the Northeast, despite the fact that the Northeast was a core of Lincoln's Republican Party, which continued to remain vibrant and competitive on a partisan basis at least until Goldwater ran for President (in the late 1960s). This trend shows no sign of reversing itself, and is spreading to most of the country outside the South, including Colorado. The state of the Republican party is bad nationally too: "The number of Americans identifying themselves as Republicans has slipped to a quarter-century low of 21 percent."

It is also worth noting that Democratic Party strength in the Northeast involve majority or near majority support among non-Hispanic whites, many of whom are quite affluent. The Northeast has a disproportionately high white Catholic population, and these days abortion is the only issue keeping even many "independent" Catholic voters on the fence between the Democratic and Republican parties.

In contrast, in many Republican strongholds in the South, the Democratic party receives less than 10% of the non-Hispanic white vote, while the Republican Party receives almost no support from Hispanics and from non-whites. Likewise, in the places where the GOP is strongest, conservative Christianity is at the heart of the reasons that supporters stick with the Republican Party. Where Republicans remain strong, it is because they are engaged in tribal politics, rather than debating over ideas within particular ethnic and religious groups.

I wonder what would happen if the Republican elected officials of the Northeast were to band together to form a new political party, the Lincoln Republicans, or some such.

While the simple member district plurality voting system overwhelmingly used in partisan races in the U.S. inherently favors a two party system in any given geographical area, the examples of Canada and the United Kingdom illustrate that those two parties do not have to be the same in any particular geographic area. A system in which the South had one leading conservative political party, while other regions had a different leading conservative political party, would be stable in our electoral system.

It would certainly be more interesting if our nation evolved into a three or four party system, with just two dominant political parties in any one state, rather than the current two party system.

What Does It Take To Stop Global Warming?

If you want to limit the risk of exceeding 2 degrees C global warming to one in four, or 25 percent, then total CO2 emissions over the first half of the 21st century have be kept below 1,000 billion tons,” said Malte Meinshausen, a climatologist at the Potsdam Institute for Climate Impact Research in Germany . . . . Between 2000 and 2006, human activities emitted about 236 billion tons of carbon dioxide, the researchers estimate. “Only a fast switch away from fossil fuels will give us a reasonable chance to avoid considerable warming,” Meinshausen says. . . . The researchers also estimate that limiting cumulative carbon dioxide emissions between now and 2050 to no more than 1 trillion tons would actually leave three-fourths of the world’s known reserves of oil, gas and coal in the ground unburned — unless techniques for capturing and sequestering carbon dioxide underground rather than dumping it into the atmosphere become commonplace in the future.

From here.

We have 764 billion tons left to emit over the next 41 years, which implies a rate of a 18.6 billion tons per year. We have been emitting at a rate of about 34 billion tons per year. So, we need to reduce emissions by more than 50% to ward off catastrophic global warming by 2050 with a reasonable probability. If the developing world and third world are to make any development progress over the next four decades, moreover, that means that the fossil fuel use per unit of economic productivity, must decline by much more than 50%.

A switch away from fossil fuels means producing electric power with a far larger share of nuclear power and renewables, and means a wholesale shift from gasoline and diesel fueled cars and trucks, through a combination of reduced travel, more fuel efficient vehicles, public transportation, rail rather than road travel, and alternative fuel vehicles.

DNA Loses Rocky Subscribers

The Denver Newspaper Agency, which handled business operations for the Denver Post and Rocky Mountain News under their joint operating agreement, automatically transferred Rocky subscribers to the Post when the Rocky folded. But, many have not stayed.

[O]verall paid weekday newspaper circulation for 395 national newspapers in the past six months was down by 7 percent compared with the same period a year ago, as increasing numbers of advertisers “grow disenchanted with newspapers and seek other ways to get their message across to potential customers.”

Yet following the closure of the Rocky Mountain News in February, The Denver Post seems to be holding on. It’s now the 11th largest newspaper in the nation in terms of weekday circulation, according to the Denver Business Journal, selling an average of 371,728 copies a day since grabbing Rocky customers under a joint-closure deal.

Still, that’s 17 percent less circulation than when both newspapers were available . . . as Westword’s Michael Roberts points out, “the circulation would have to pretty much stabilize where it is to keep hope alive–and no industry observer I know expects that to happen.”

Assuming that the circulation losses have come primarily from former Rocky subscribers, that means that almost one in three Rocky subscribers have not replaced that subscription with a Post subscription. Some of those losses come from people who used to get both papers, an inevitable loss with the closure of one. But, one doubts that anywhere near one in three Rocky subscribers had previously taken both papers.

One particularly interesting business model, somewhat similar to that of the Denver Daily News is that the plan of the Colorado Springs Gazettte to publish a free minipaper called Ink that can be read in ten minutes.

One of the op-ed writers at the Post recently speculated that the decline in newspaper reading was due to people not taking the time to eat a reasonably length breakfast at which they could read one, and that the earlier decline of the afternoon paper was likewise due to the decline in time after work and before dinner to read one. People with less leisure time have less time to read a full paper.

I don't agree with David Milstead, former Rocky Mountain News business columnist, who predicted the demise of the Post less than two years after the demise of the Rocky.

Until the financial crisis hit advertising, particularly for the automobile and real estate industries that make up a large share of print advertising in newspapers, Denver was uncomfortably but on a break even basis, supporting $28 million a year of newsroom costs for two newspapers, and was confident enough in the stability of that income stream to build a fancy new building for the Post, the Rocky and the DNA, and to invest in new printing facilities.

Those industries may come back with a whimper that does not fully restore the lost revenue. It will take time for a recovering metropolitian Denver economy to use up the overhang of extra building capacity that developed at the peak of the construction boom. And, many car dealers will be shuttered as GM and Chrysler are forced to trim their operations to survive (one or both may even cease operations), and othere automobile companies follow suit to avoid having excessive dealer level costs.

Still, the Denver papers will not be hit as hard as those in rural areas, where populations are declining, a disproportionate share of the less profitable car dealerships are located, and there is little room to downscale already tiny newsrooms without going out of business.

It is possible to run a newsroom that can cover, at least, metropolitan Denver for $10 million, albeit with deep cuts in quality and depth from the $14 million per paper that used to be spent, and the demand for newspapers isn't going away overnight. Newspaper subscriptions and ad revenues are falling, but I don't think that funds available for the newsroom go down by two-thirds in a post-recession economy anytime soon. Also, a single primary newspaper has more leverage as a near monopoly to increase subscription rates and advertising charges, and also has more clout to adjust laws and regulations to its benefit -- for example, to require that legal notices be placed in newspapers of wider circulation and regain that source of revenue, now lost to many niche papers that few people read, like the Colorado Statesman.

The result may be a smaller circulation, more highbrow newspaper, but I don't think that Denver will be without a newspaper of record any time soon.

28 April 2009

NYT Reams Grad School

Graduate education is the Detroit of higher learning. Most graduate programs in American universities produce a product for which there is no market (candidates for teaching positions that do not exist) and develop skills for which there is diminishing demand (research in subfields within subfields and publication in journals read by no one other than a few like-minded colleagues), all at a rapidly rising cost (sometimes well over $100,000 in student loans)....

The emphasis on narrow scholarship also encourages an educational system that has become a process of cloning. Faculty members cultivate those students whose futures they envision as identical to their own pasts, even though their tenures will stand in the way of these students having futures as full professors.

The dirty secret of higher education is that without underpaid graduate students to help in laboratories and with teaching, universities couldn’t conduct research or even instruct their growing undergraduate populations. That’s one of the main reasons we still encourage people to enroll in doctoral programs. It is simply cheaper to provide graduate students with modest stipends and adjuncts with as little as $5,000 a course — with no benefits — than it is to hire full-time professors.

In other words, young people enroll in graduate programs, work hard for subsistence pay and assume huge debt burdens, all because of the illusory promise of faculty appointments. But their economical presence, coupled with the intransigence of tenure, ensures that there will always be too many candidates for too few openings....

Transform the traditional dissertation. In the arts and humanities, where looming cutbacks will be most devastating, there is no longer a market for books modeled on the medieval dissertation, with more footnotes than text. As financial pressures on university presses continue to mount, publication of dissertations, and with it scholarly certification, is almost impossible. (The average university press print run of a dissertation that has been converted into a book is less than 500, and sales are usually considerably lower.) For many years, I have taught undergraduate courses in which students do not write traditional papers but develop analytic treatments in formats from hypertext and Web sites to films and video games. Graduate students should likewise be encouraged to produce “theses” in alternative formats.

From here.

Like many editorials, it is half right, but only half. The solutions are mostly lacking, and the goals are fuzzy.

UPDATED WITH ANALYSIS: As the editorial notes, in most fields, a graduate degree is preparation for a position as a faculty member somewhere.

There are specific graduate programs (e.g., JD, MD, MBA, MFA) which are primarily intended to prepare you for a career outside academe. There are also programs structured as traditional academic degrees (e.g. graduate degrees in engineering and the science, in psychology and in economics) where there is a significant market in private industry and government for someone with this kind of training. And, then there is graduate studies in education for K-12 teachers and principals, where graduate education as a form of continuing education is expected and built into the pay scale, and the degrees awarded are almost incidental to the professional advancement that comes with being in the system and progressing with continuing education while doing so.

But, there are many fields of graduate education, particularly in the humanities and social science, and in more theoretically and basic science oriented fields within the humanities, where there is little or no employment market for those qualifications outside academe.

A really insidious part of the graduate education/faculty hiring puzzle is that there is too little emphasis on teaching and advising students, and too much on scholarship. For the vast majority of faculty at the vast majority of institutions of higher education, teaching should be the primary responsibility of faculty, followed by duties like advising students, participating in campus life, and staying abreast of developments in the field.

There should be a place for faculty at all institutions to do original scholarship. But, this should not be the focus of hiring decisions, which should not have completition of a PhD with a dissertation as a requirement or as a standard of educational quality that is measured to evaluate the institution. Instead, hiring should focus on teaching ability, and, in pre-professional fields, on professional experience and succcess in the field taught. Original scholarship should not be an important criterion for securing tenure and advancing professionally for these faculty, while teaching should be a crucial evaluation standard.

This change would in short order end the current glut of almost never read dissertations and academic journal articles. It would also compress the typical time spent in graduate from an expensive near decade, to just three or four years.

Most higher education faculty should be on a "teaching track." Almost all faculty should be on this track in community colleges and four year colleges, in pre-professional master's degree programs, and at schools like Miami University, in Oxford, Ohio, where I grew up, where the vast majority of students (well over 90%) are undergraduates, and where a large share of graduate students are in professionally oriented graduate programs like education, nursing, fine arts, or environmental science.

This isn't to say that there isn't a place for a "scholarship track" in higher education. These faculty should do PhDs with dissertations, should be hired and promoted based upon their scholarly potential, and should spend only half or less of their time teaching and advising students, and a good share of those should be higher level undergraduates and graduate students. But, there are only about 300 out of 3000 schools that offer bachelor's degrees that do a material amount of graduate instruction, and the number that should have a scholarship track is far smaller, probably only a hundred or two. Even at those institutions, not all faculty should be on a scholarship track, which should include perhaps 5% or less of the full time higher education faculty in the nation.

In connection with these changes, those who do the teaching in institutions of higher education, particularly graduate students and adjunct faculty, should be compensated better, get more respect, and have more regularized positions. They should be compensated, given benefits, and given the kind of security at least on a par with that associated with assistant professors (i.e., full time untenured junior professors on a tenure track, typically hired for one or three year terms -- the next step up is an associate professor who typically is a full time tenured professors with three or more years of experience, while full professors are typically full time tenured professors who have served with distinction and continued to publish research for an extended period after receiving tenure who receive better compensation and perks than associate professors).

Adjunct faculty should be used to provide insights from someone not available on a full time basis, for more than the per class compensation of an assistant professor, not as a source of cheap teaching labor. The notion of the full time adjunct, typically titled an "instructor" should be abolished.

27 April 2009

GM: Nationalize Us.

I'd joked a couple years ago on this blog about General Motors being a non-profit, because it didn't make any profits. Now, GM wants to become a genuinely nationalized firm.

Debt and Equity Reorganization

GM said that it will ask the government to take more than 50 percent of its common stock in exchange for canceling half the government loans to the company as of June 1. The swap would cancel about $10 billion in government debt. In addition, GM is offering stock to the United Auto Workers for at least 50 percent of the $20 billion the company must pay into a union run trust that will take over retiree health care expenses starting next year.

If both are successful, the government and UAW health care trust would own 89 percent of GM stock, with the government holding more than a 50 percent stake . . .

[GM] will offer 225 shares of common stock for every $1,000 in notes held by bondholders as part of a debt-for-equity swap. Henderson said the objective is to reduce GM's $27 billion of outstanding public debt by about $24 billion. The company estimates that after the exchange, bondholders would own 10 percent of the company.
That would leave current common stockholders with only 1 percent . . . The plans, if successful, would reduce GM's debt by $44 billion from the present figure of about $62.4 billion. . . . GM's plan depends on 90 percent of bondholders exchanging their debt. . . . [GM expects] to file for bankruptcy protection somewhere around June 1, but such a filing would be unlikely very long before the deadline. Bondholders have until May 26 to accept the exchange offer.

To recap:

U.S. Government: >50%
UAW: a little less than 39%
Bondholders: 10%
Old Stockholders: 1%

The U.S. is owed $15.4 billion in old loans and GM needs $11.6 billion in new loans; the government would give up $10 billion of loans on June 1. The U.A.W. would give up $10 billion of the $20 billion owed to retirees for health care. Bondholders would give up $27 billion in debt.

Some analysts are skeptical that the bondholders will take the deal, based upon GM's market capitalization of $1.3 billion for 100% of the stock. But, the current stock value appears inflated. If GM files for bankruptcy, GM stock is worth nothing, even if it reorganizes. If GM reorganizes out of bankruptcy, GM stock is diluted by 99%. GM needs a 100% chance of avoiding bankruptcy and seeing its market capitalization recover to about $130 billion for the current stock price to make sense. Given that this has far from a 100% chance of happening, people buying GM stock now are really betting that GM's market capitalization will grow to several times $130 billion in the event that bankruptcy is avoided and it does recover.

On a static, point in time, accounting basis, GM stock has negative value. The company has lost market share, is losing money, has liabilities in excess of its assets, and has had negative financial accounting equity for a long time.

Bondholders will be bargaining in the shadow of bankruptcy, more than the publicly traded stock price. GM bonds now have junk ratings and are at grave risk of default. A debt-equity swap of some sort could be forced upon bondholders in a Chapter 11 bankruptcy, and a liquidation of the company would likely come out even worse for bondholders. The only real question is whether a non-bankruptcy reorganization affords them a better or worse deal, in light of the terms of the deal and the business impact of a bankruptcy filing.

Bondholders might get a better deal relative to the UAW in a bankruptcy (the bondholders would get a bit more stock than the UAW would, instead of less than a third as much stock), but only if the bankruptcy doesn't reduce value more than an out of court negotiation does.

Bondholders are being offered a raw deal, (1) because they bring no new value to a reorganization and won't continue to extend credit to GM, (2) because the bondholders who remain, either bought far more conservative investments than they have which they are uncomfortable holding or bought them cheap as speculators. The speculators are happy so long as they get back more than they paid from queasy prior bondholders. The long time bondholders want certainty.

In contrast, the UAW's cooperation in the medium to long term is needed to make the business survive as a going concern (and its current contract concessions also involve unstated liability concessions), as is the government's.

Business Plan Reorganization

The plan would also "cut 21,000 U.S. factory jobs by next year and phase out the storied Pontiac brand." Furthermore:

Besides the U.S. job cuts, General Motors Canada said it plans to slash its hourly work force to from 10,300 currently to 4,400 by 2014 . . . .

The company also said it plans to reduce its dealership ranks by 42 percent from 2008 to 2010, cutting them from 6,246 to 3,605. . . . the company w[ill] be making offers to the dealers in the coming weeks. . . . a big chunk of the dealership reduction—about 450—would come with the elimination or sale of Saturn, Hummer and Saab. GM would then look to end relationships with dealers that do only a small volume of business with GM, and then move on to other dealers . . . the new plan lowers GM's break-even point in North America to an annual U.S. sales volume of 10 million vehicles. . . .

The company said it would phase out its storied Pontiac brand no later than next year, and the futures of Hummer, Saturn and Saab will be resolved by the end of this year by either selling them or phasing them out. . . . talks continue with potential parties to buy a stake in Opel and are expected to continue through the end of May. . . .One of the conditions to get aid from Germany is to have a private investor take a stake in Opel[.]

Why Pontiac?

The new GM will focus on four core brands: Chevrolet, Buick, GMC and Cadillac.

The fate of three other troubled lines -- Saturn, Saab and Hummer -- will be decided at a later date, GM said. They are likely to be sold off or shut down, while Pontiac will be shuttered.

Pontiac's problem was not sales, GM Chief Executive Fritz Henderson indicated during a conference call Monday. In 2008, Pontiac was the company's third-best selling brand behind Chevrolet and GMC and sold twice as many vehicles as Buick, a brand that will apparently survive the changes at GM.

The problem for Pontiac has been profitability. GM doesn't generally break out profits by brand, but Buick and GMC, which are sold in dealerships alongside Pontiacs, are more profitable, Henderson said.

"We didn't have a strategy that we were satisfied with that would allow us to win with the Pontiac brand," he said.

2008 GM Vehicle Sales

Chevrolet 1,801,131
GMC 376,996
Pontiac 267,348
Saturn 188,004
Cadillac 161,159
Buick 137,197
Hummer 27,485
Saab 21,368
Total 2,980,688

Presumably Saturn, Hummer and Saab were also unprofitable.

One of the travesties of modern financial accounting is that even such basic managerial accounting information as brand profitability in a company like General Motors that has just eight brands, isn't widely available.

The notion that relatively distinctive brands like Pontiac, Saturn, Hummer and Saab are unprofitable, while indistinct brand Buick, with lower sales than Pontiac and Saturn is not, is mysterious. What precisely does Buick offer to the GM lineup?

Without seeing the numbers, it is hard to know.

It may be that Pontiac, Saturn, Hummer and Saab have more models of their own, and hence higher design costs, while Buick may simply involve rebranding of Chrysler vehicles and hence involve lower design costs.

GM had been pushing an effort to consolidate Pontiac, Buick and GMC at the same dealerships (presumably under the theory that they were mid-priced vehicles). GMC and Buick may have appealed to similar middle aged customers, creating cross-sale opportunities, while Pontiac's younger target market may have not fit in well there and hence, sold poorly.

It could also have something to do with alternatives in the market. Saturn is aimed at the kind of customers who prefer imports, but prospective Saturn buyers may like actual imports better. Pontiac is aiming at a muscle car market that Chrysler and Ford may be doing a better job of serving. Indeed, Chrysler's entire lineup seems oriented towards the muscle car niche. Hummer's low fuel efficiency may make it a victim of a declining market segment that competes with well established Jeep. Saab was never a big part of the American market.

A Buick, in contrast, may appeal to people who like Chevrolet, but would prefer something more upscale, but can't afford a Cadillac. Most foreign car companies brands don't offer a mid-market brand (although Hyundai's Genesis discount luxury concept has propelled it to the healthiest recent sales in the U.S.). Mercury and the Chrysler brands aren't as fierce competitors.

Also apparently, "Buick took first in JD Power and Associates reliability study," which boosts its attraction with the Consumer Reports reading public and boosting GM's image, Buick has some sunk cost already designed new vehicles coming out, and Buick is very popular in China.

Still, if I had been asked to guess which brand would follow Oldsmobile into oblivion a couple of years ago, I would have guessed Buick, rather than either Pontiac or Saturn, because they offer something different, which is what a brand is supposed to do.


So, GM's vision is a company with fewer brands, fewer dealers, and fewer employees, selling fewer cars, and owned mostly by the federal government (with a controlling interest) and the UAW as a trustee for retired employees, which can break even if it sells just a few more cars, and can be profitable if its Chevy Volt concept takes off or the automobile market seriously recovers.

Presumably, the U.S. government would sell its stake in the company at some point, once the business had turned around, either to the public, or the union. Large publicly owned companies aren't entirely foreign to the U.S. There are several in the financial sector (some old, some from the bailout), and there are also Amtrak and the Tennessee Valley Authority. It would also give the President the kind of authority over the company needed to prevent misuse of government investments. But, it also creates a great incentive for the government to create an uneven playing field in the regulatory sector.

Colorado State Senate District 31 Candidates

On May 20, 2009, a vacancy committee will choose a successor to Democrat Jennifer Veiga of West Washington Park in Colorado's State Senate District 31, due to her resignation, made in order to be more available to care for her partner's aging mother in Australia.

Colorado Senate District 31 include parts of Arvada and Westminister in Adams County, and parts of the City of Denver in the downtown core and the northern part of Denver including most of Denver neighborhoods Berkley, Globeville, Elyria-Swansea, Five Points, Coor's Field, LoDo, Downtown, Golden Triangle, Lincoln Park, Baker, Capital Hill, Alamo Placita, Byers, West Washington Park and Valverdre. It is a safe Democratic Party District, with voter registration 42% Democratic and 18% Republican, and unaffiliated voters who are at least 50% likely to vote Democratic. About 40% of the District is in Denver and 60% in Adams County, as measured by voters on election day. The district includes low income, working class, middle class and upper middle class neighborhoods, many of which have experienced significant gentrification since Denver's last major real estate bust in 1982-83.

The following is an unofficial list of candidates running for Colorado's State Senate District 31 in the race, in no particular order:

1. Elmer "Butch" Hicks, a former Westminster City Councilmember, former State Democratic Party Treasurer and current Adams County Democratic Party Treasurer. He is a union member who is a bus driver and training instructor for RTD and is African American.

2. Ann Ragsdale served in the Colorado State House (HD35), and ran against Jennifer Viega for this Senate Vacancy in 2006. She hales from Adams County.

3. Pat Steadman, of Capital Hill in Denver, is a state level lawyer-lobbyist for progressive causes at Mendez, Steadman and Associates who was previously a lawyer for a union. He has been active in the Democratic Party, including the Stonewall Democrats.

4. Alex Sanchez, of Denver, is a precinct committee person who has been active in the Democratic Party, including the Stonewall Democrats, and works as the spokesperson for the Denver Public Schools, after years in the healthcare industry.

5. Jill Conrad, of Denver, is an at large Denver Public School Board member who works as an education consultant and has been civicly active in Denver.

6. John Maslanik, of Denver, previously ran for RTD Board of Directors, District A, and was endorsed by the Denver County Democratic Party in that race. He has served for many years as Chairman of the Downtown Democratic Forum and has been active in the Democratic Party. He served his neighborhood as President of the Downtown Denver Residents Organization and as a member of the Citizens Advisory Commission of the new Denver Justice Center.

7. Patrick Byrne, of Denver, is a budget and policy analyst at the Colorado Department of Transportation, and a dual citizen of the U.K. and U.S. He notes that he "is a product of the Washington, D.C. public schools."

The vacancy committee (of which I am a member), basically includes all precinct committee people, party officials and elected officials who are Democrats in the district. Additional information can be found at the Democratic Party of Denver website.

This is a very competitive and diverse field. Three candidates have been elected to public office, and those who have not have notable qualifications. I have been contacted by most of them during their campaigns and have not committed to a candidate at this time.

26 April 2009

Soap Operas And Kindred Genre

American daytime soap operas are the longest stories ever told in human history. These dramas, and kindred genre, like prime time soap operas, Latin American, Francophone Canadian and Russian telenovelas, and Korean dramas set in contemporary settings make up a huge share of a television watched in the world. Important subsets of Japanese manga and anime likewise are more similar to the American soap opera genre than anything else in American culture.

American daytime soaps have much not to like. They are so voluminous, with several hundred hours of episodes a year, that they are difficult for non-obsessed people to follow; have low production values driven by their high output, low budget nature; are notorious for plot holes and over the top dramatic devices needed to keep the long series interesting over very long story lines; and discourage new series from being developed because the genere leaders are so dominant which in turn locks series into their formative era.

Most kindred genres address this by having much more compressed story lines, which stories told in a couple of dozen to ten dozen or so episodes in most cases. This produces stronger stories, makes them more accessible to viewers with less time, and makes it easier to invest more in the production quality of individual episodes. Their addition to melodrama also undermines their efforts to convey emotions in a powerful way.

But, while some soap opera concepts, like the production side virtues of having multiple parallel story lines and an ensemble cast have spread to non-soap opera genre programs, like the prime time science fiction genre NBC series Heroes, the bad reputation that the flaws of soap operas have spawned in the U.S. market have also squeezed more innovative and well executed versions of the genre that have come up abroad from taking hold American culture -- in print and in comics, as well as on television, leaving important gaps in television between sitcoms, action oriented productions and reality shows, and in novels between high culture American literature and short single plotline pure romance novels.

"Chick lit" and books like Kelley Armstrong's "Women of the Otherworld" series are starting to fill the void from the edges, but books with involved multi-character plotting, in contemporary settings about people who beyond high school age and have families remains surprisingly rare.

It isn't clear how much longer the days of the soap opera will last. They peaked in the 1970s and 1980s. But, the rise of the working woman and the rise of cable and satellite television which provide more television choices during the day, have undermined the genre. It will be interesting to see if foreign competition, now increasingly making its way into U.S. markets on DVD, will e replicated in the U.S.

24 April 2009

To Do: Find Contested Election Rate Data

After the U.S. Civil War, the conduct of elections grew much more professionalized and this trend has continued over time. These days, an election win by more than 0.5% of the vote as determined as soon as complete preliminary and unofficial election results are received is unlikely to be challenged at all. Races are usually much closer than that in election contests where the final result differs from the preliminary and unofficial election results.

The chance of a race being this close are impossible to determine in the absence of data. The way electoral districts are drawn means that the partisan divide in the average district is quite far from 50-50, but candidates of both political parties tend to field candidates who are closer than average in their party to the median voter in the district.

My intuition from watching political news regularly, without doing the math, is that the contest rate is about 1% of multi-candidate races below the Presidency, and more like 10% in Presidential races.

23 April 2009

One In Three Texans Wants Out Of Union

One in three people in Texas, and half of Republicans in Texas think that the U.S. would be better off if it wasn't part of the United States, 134 years after the end of the U.S. Civil War fought over that issue (a war prosecuted by the very first Republican President). Texas Democrats, in contrast, overwhelmingly favor remaining in the United States.

Do you think Texas would be better off as an independent nation or as part of the United States of America?

US: 61
Independent nation: 35

Democrats: US 82, Ind 15
Republicans: US 48, Ind 48
Independents: US 55, Ind 40

Do you approve or disapprove of Governor Rick Perry's suggestion that Texas may need to leave the United States?

Approve: 37
Disapprove: 58

Democrats: Approve 16, Disapprove 80
Republicans: Approve 51, Disapprove 44
Independents: Approve 43, Disapprove 50

Source: Research 2000 Poll, taken April 20-22, 2009 (MOE +/- 4%).

By comparison, just under half of Puerto Ricans want to become a U.S. state, while only about five percent want to leave the United States.

Quote Of The Day (April 23, 2009)

It is axiomatic that "Judge" and "Stripper" showing up in a headline is never a good thing, especially if you happen to be the "Judge."

-- Tampa Tribune columnist Daniel Ruth, writing regarding a scandal involving former Judge Thomas E. Stringer.

Nicest Compliment Received In Ages

"[He] is a kick-butt advocate and not likely to be the sort to back down on much of anything, and those same qualities probably provide much of the legal insight I appreciated[.]"

-- Jessical

I appreciate a kind word now and then.

22 April 2009

University of Colorado Law's Rank Plummets

The University of Colorado law school's U.S. News and World Report ranking fell thirteen slots from last year more than any other law school in the top 50. It fell to 45th place from 32nd place last year.

It isn't exactly clear what changed. It may have something to do with the dire budget situation of higher education in Colorado. Colorado's state constitution makes higher education one of the most vulnerable programs to cuts when tax revenues decline during a recession. The fact that the average CU law student comes from a very affluent family, even though some are working or middle class and require substantial financial aid to attend (overwhelmingly in the form of loans on the theory that law school is a for profit operation), doesn't help its case. About 80% of CU Law students receive financial aid, but a great deal of this is loan based aid made possible largely because it is easier for law students to be considered independent from their parents financially than it is for undergraduates to do so. CU Law students almost certainly come from families more affluent on average than CU undergraduates (because there is a statistically significant connection between academic achievement, prolonged educational attendance and family income), and the average family income for CU undergraduates (inferred from instate and out of state family incomes for CU undergraduates applying for financial aid and by the percentage of undergraduates not applying for financial aid) probably comfortably exceeds $100,000 per year. Many of those at CU law school who do not themselves come from affluent families, moreover, will go on to economically comfortable lives themselves at some point.

For the most part, this doesn't have huge consequences. A very large share of all lawyers in Colorado graduate from one of the state's two law schools, the University of Colorado and the Denver University School of Law, and by the reckoning of U.S. News and World Report, CU still significantly outranks DU. Neither law school shuts you out of prestigious law firm jobs in the state.

A lower ranking may reduce the draw of CU for out of state law students who don't plan to practice law in Colorado, reducing out of state tuition premiums that CU might otherwise have collected. Of course, this is good news for law students seeking to get into CU either because they are from Colorado, or want to practice law here, who may find it slightly easier to win admission, as U.S. News driven prospective law students become less inclined to choose CU over another school. Still, CU continues to closely resemble in program and selectivity, leading national law schools everywhere. Like most leading law schools, its entering students are extremely capable academically and almost all of the tiny percentage of students who don't graduate do so for personal reasons, rather than due to academic failure.

A lower ranking also probably makes it harder for CU to attract best of the best faculty, although the law faculty market is so cut throat, and Boulder has sufficient quality of life attractions, that CU Law is still free to be quite picky in its handful of new faculty hires each year.

The other impact of the declining ranking may be that it will be harder for cream of the crop graduates of University of Colorado law to get the highest prestige jobs, like judicial clerkships, associate hires at the most prestigious large law firms, and law school faculty positions. Less academically stellar law students aren't in contention for those prizes anyway, and the kind of governmental and legal jobs that they are applying for tend to be less concerned about law school pedigrees, than they are about decent grades, bar exam passage, and any indicia of a good work ethic.

This could lead to a vicious circle that discourages the very best and the brightest prospective lawyers from attending the University of Colorado law school and does long term harm to CU's reputation. Then again, it could also be a one year fluke. The very best and brightest law students have never chosen the University of Colorado law school solely based upon its academic reputation. While CU has ranked much better in prior years, the cluster of schools at the top of the law school food chain, like Harvard, Yale and Stanford, has been extremely stable since U.S. News and World Report started keeping score, at least. While CU has long had a very respectable reputation, it has never been at the very top of the heap in a discipline that is more hierarchical and more numbers focused than almost any other in academe.

UPDATED Jury Finds Angie Zapata Murderer Guilty

Defendant Allen Andrade killed Angie Zapata. Even the defense argument admits this fact. Now, the Greeley, Colorado jury is deciding which counts to convict Allen Andrade of, if any.

A jury acquittal, even if not supported by the evidence and the admissions of Andrade at trial, would make Allen Andrade a free man (although the federal government, in theory, might be able to charge him with something). This would be called jury nullification. Acting in the heat of passion impacts the sentence for murder, but is not a legally valid defense to a murder charge.

A conviction of any homicide crime will put Andrade behind bars for a very long time, if pre-trial accounts that he is a habitual criminal and subject to recidivist sentencing are correct. And, he was not facing the death penalty in this case.

There are two plausible theories under which Andrade could face the longer life in prison without possibility of parole sentence for first degree murder in this case. One is to show intentional pre-meditated murder, and that is what the testimony at trial focused upon. The other theory would be to prove that the murder was part and parcel of another serious felony (e.g. that it amounted to an aggravated robbery resulting in death). There was plenty of evidence at the trial to support this theory, and this theory has more unequivocal factual support. But, it is not clear from newspaper accounts if this theory was actually presented to the jury either in closing arguments or in the jury instructions. The live blog of the case seems to indicate that there is not a felony-murder count, although there are separate property crime charges in the case, but is not entirely clear.

The transgender hate crimes count, also supported by abundant evidence, while symbolically important and perhaps relevant if Andrade is convicted of a lesser murder count is comes before a parole board several decades from now, will not materially lengthen the sentence that Andrade faces as a habitual offender convicted of murder. But, the property crime charges, enhanced with habitual offender sentences, is considered to be acts separate from the murder itself and hence served concurrently, could lengthen the sentence enough to make it effectively a life without possibility of parole sentence.

The judge's decision to exclude a challenged part of Andrade's confession to police, and the abundant physical evidence and jailhouse telephone call tapes in the case, make it likely that an legal error in the trial will be considered "harmless error" that will not reverse a conviction, even if an appellate court finds that mistakes were made by the judge or prosecutor at trial.

UPDATE: The jury has found Andrade guilty of first degree murder and a hate crimes count (and all other counts) in a very short deliberation of just two hours. Allen Andrade will be sentenced to life without parole in the near future, and will have few strong arguments to make on appeal. In all likelihood, this will be served in a maximum security Colorado prison. The jury was apparently unconvinced by Andrade's heat of passion argument and found that this was a bias motivated crime.

The tail end of the Westword live blog linked above reports:

3:05 p.m.: The judge says the court will be recessed until 4 p.m. At that time, Andrade will be sentenced for first-degree murder. First-degree murder carries a mandatory life sentence.

Update: The reason the sentencing has been delayed until 4 p.m. is so that prosecutors can explain to Zapata's family what happens next and give them some time to absorb the verdict.

3:03 p.m.: The verdicts: Guilty of first-degree murder. Guilty of a bias-motivated crime. Guilty of motor vehicle theft. Guilty of identity theft.

When the judge read the verdict of first-degree murder, there was an audible sob from Andrade's family. Zapata's family is crying. But the courtroom is mostly silent, as the judge requested. He warned he wouldn't tolerate outbursts.

3 p.m.: The jurors just entered the courtroom and sat down. None of them are looking at Andrade. The jury foreman, a man in his forties, is handing the verdict to a court staffer.

2:55 p.m.: Andrade is led into the courtroom and his handcuffs are removed. He sits down between his lawyers. He glances at his family seated three rows back but his gaze doesn't linger.

2:45 p.m.: The jury has reached a verdict after just two hours of deliberating. Everyone is back in the courtroom. It's completely full. As usual, Andrade's family and friends sit on one side and Zapata's sit on the other. Andrade is not yet in the courtroom. Neither are the jurors or the judge. All of the lawyers are here. Zapata's family has already been wiping away tears.

12:40 p.m.: The two alternate jurors were excused. Both were men, one who appeared to be in his twenties and one who appeared to be in his forties. Eight men and four women remain.

The jury just left the courtroom to start deliberating.

Keep in mind that Greeley, Colorado is not some remarkable well head of transgender understanding and tolerance. While there is a university in town, this is also the county that elected a Republican member of the Colorado General Assembly who argued with bible quotations in a public legislative speech that gays deserve to die in accordance with biblical law during a debate on the legal treatment of same sex couples during which a fellow legislator who was a member of a same sex couple was present.

But, clearly, the attitude that an admitted murderer needs to be punished severely for this act won the day with this jury. Conservative also means tough on crime.

Khat Crime

In East Africa, Khat, a leafy plant native to East Africa and the Arabian Pennisula, is widely chewed by adults and like chewing tobacco, is addictive.

Because it is rarely used outside of immigrant communities and those communities try to stay out of trouble, it is a relative newcomer to the U.S. drug scene. But, it turns out that Khat contains sustances that are Schedule I controlled substance punishable by stiff federal drug laws, even if you didn't know that khat contained chemicals that are controlled substances in the United States.

The confusion isn't simply a matter of unfamiliarity with the law. The substance that is controlled by U.S. law is only present in Khat when it is very fresh.

khat can contain two active ingredients: cathinone, a Schedule I substance that is illegal at all times, and cathine, a Schedule IV drug that may be illegal if not imported with the proper authorizations. Lynch further testified that cathinone is present in khat for forty-eight hours after harvesting, at which point the chemical weakens and eventually dissipates entirely.

Lynch also stated that this process can be delayed if the khat is kept cold and moist by wrapping it in banana leaves or Saran Wrap, freezing it, or sprinkling it with water.

Lynch explained that traffickers usually import khat into the United States from Africa and the Middle East through shipment points in London, Luxembourg, and Amsterdam, as those cities have direct flights into the United States and the “idea is to get it here as quickly as possible.” Specifically, most khat enters the country through JFK and Newark International Airports. Once there, it is either sold in the surrounding region or shipped to other parts of the country, such as “Ohio, in Cleveland and Cincinnati . . . often, Minneapolis, Minnesota.” Delivery to such cities usually involves the use of large rental trucks or vans because they are cost-effective, minimize outside scrutiny, and can be used to pick up shipments directly at the airport.

Lynch testified that the cost of a kilogram of khat ranged from $300 to $400, and the price for a “bundle” of khat ranged from $28 to $50. In August 2005, a bundle of khat sold in New York would have cost approximately $35, while a similar bundle sold in the Minnesota area would have cost five to ten dollars more due to transportation and labor costs. Lynch also testified that because of the rate at which cathinone dissipates once khat leaves have been harvested, possession of one kilogram of khat, which would yield approximately nine bundles, was consistent only with distribution, not personal use.

The defendant's claim of ignorance of law and facts was also weakened by the fact that he had previously been prosecuted and convicted of the offense before the acts in question in the cases cited above, and was using a criminal modus operandi consistent with rapid transport of the substance to preserve its potency as a drug.

Khat is notable, however, for being a drug which is legal on a widespread basis were it is principally used, yet illegal in many circumstances in the U.S. The values gap on the harmfulness of the drug makes a drug war campaign focused on this drug a potentially important tool by which an ill intentioned prosecutor could target Middle Eastern and East African populations such as the Ethiopian community.

The Schedule I offense carries a sentence of up to 20 years in prison (more, if aggravating circumstances are present). The Schedule IV offense carries of sentence of up to 3 years in prison. Actual sentences depend upon the U.S. Sentencing Guidelins and judicial discretion. The dollar amounts at stake in this deal, however, suggests that it was a small time transaction in scale -- with an economic value comparable to that of a midsdemeanor theft.

NYT Best Sellers List Adds Magna

The New York Times list of best sellers was been expanded to include a manga listing, roughly a month ago.

The top sellers aren't terribly surprising, but the innovation is further proof that manga, which are just starting to be carried widely in chain bookstores in the past few years, in addition to comic shops, wbere manga share space with more traditional American style comic books, have arrived in the U.S. as a new and thriving fiction genre.

Why MS Office 2007?

I've used Microsoft Office 2007 quite a few times since it came out, and every time that I do, I am left with one basic question.

"What the F- were you guys thinking?"

MS Office is (or was) a category killer. Compatability issues made it, like Windows and pre-Firefox versions of Internet Explorer, the dominant product in its market. Once upon a time, competitors like Word Perfect and its companion spreadsheet were viable alternatives. Now, almost every office in the country uses it.

All prior versions of Microsoft Office (as well as competitors like Word Perfect; Open Office, version 3.0 is quite good compared to its predecessors; and Google Docs) are sometimes a little clunky, but can be easily navigated with simple, reasonably intuitive, drop down menus. But, MS Office 2007 is software that no sane human would try to navigate without a lengthy tutorial to relearn everything you've ever known about using a word processor or spreadsheet, or a lot of quality time with the user's manual (the print version of which is no longer standard issue).

Simple, every day, everyone needs features like opening and saving files, and undoing recent actions, are horribly obscured. The basic subject matter organized drop down menu bar found in every other application on the planet is missing. The icons are as baffling as Chinese ideograms. Lots of features I don't care about clutter the screen.

I'm sure that all the old features are in there somewhere. I am also sure that somebody must see something beneficial about the new version. It is probably even possible to customize it to the point where it would be more user friendly. But, I just can't figure it out, and I am not excited about the prospect of relearning basic concepts about how to use a program that have remained more or less unchanged since I started using word processors and spreadsheets back in middle school.

The inconveniences involved in MS Office 2007 are particularly puzzling because this is software, unlike the abomination that is Windows Vista, which customers are expected to pay separately for after the purchase their computers. I also have to assume that a total overhaul of the program can't have been cheap to undertake.

The whole "not broken, don't fix it" concept has apparently been soundly rejected by Microsoft management.

I have been told, although I'm not sure that I believe it, that the idea behind MS Office 2007 was to address the fact that MS Office has lots of features that nobody realizes are there and therefore don't use. But, there are better ways to serve that purpose than creating an awkward user interface. For example, I've seen a couple of very good customizations of the previous version of MS Office with styles, macros, and revised menus and toolbar buttons. It would be easy enough, for example, to have a couple dozen built in customization schemes to choose from, a bit like the different layout themes in the Blogger system. Usually, the problem, as the folks at Apple understand philosophically, and the folks at Microsoft do not, is not too few features, but too many that you don't need or use. At the very least, they could have kept an old style interface as the default and made the new one an optional alternative. After all, how much more memory would that add to this already bloated software. If it took too much, they could eliminate one of the programs in the suite that nobody ever uses (I don't even have any idea what several of the newer ones do).

Still, I continue to be baffled by the entire Microsoft business plan across its entire line of leading products. Has it been a few good years for special mushroom production in Washington State or something? Has the Microsoft campus grown too removed from the rest of the world? Are they using skewed focus groups?

I'm curious to know, but I won't be putting down any money to buy MS Office 2007 any time soon, no matter what I learn. Personally, I'm seriously considering moving to one of the multiple free cloud computing application systems anyway.

Wikipedia explores some of the main criticisms of the MS Office 2007:

Even though the ribbon can be hidden, PC World wrote that the new "ribbon" interface crowds the Office work area, especially for notebook users. Others have called its large icons distracting. PC World has stated that upgrading to Office 2007 presents dangers to certain data, such as templates, macros, and mail messages.

Some users have complained about the loss of floating toolbars with customizable icons and text buttons.

The new XML-based .docx file format for Word is incompatible with previous versions unless an addon is installed for the older version.

The Word 2007 equation editor is incompatible with that of Word 2003 and previous versions, and when converting DOCX files to DOC files, equations are rendered as graphics. Consequently, Word 2007 cannot be used for any publishing, file-sharing and collaborative endeavour in any mathematics-based fields, including science and technology, in which users may have earlier versions of Word. For reasons unknown, Excel and PowerPoint 2007 retain the old equation format, meaning that users cannot move equations between Word and the other programs even though they are the same version. Many publishers do not accept submissions in Word 2007; for example, academic publishers have informed Microsoft that this severely impairs Word 2007's usability for scholarly publishing.

Some users with experience using previous versions of Microsoft Office have complained about having to find features in the Ribbon. Others state that having learnt to use the new interface, it has improved the speed with which "professional-looking" documents can be created. . . .

The new Word 2007 features for bibliographies only support a small number of fixed citation styles. Using XSLT, new styles can be added. Some extra styles, such as the standard ACM publication format are made freely available by third parties.

21 April 2009

Predicting Mental Patient Risk

Psychiatrists are frequently called upon to predict the likelihood that someone is a physical threat to themselves or others as a consequence of a mental illness. They aren't very good at it. The literature on this subject is notorious for showing that expert predictions are no better than, or worse than random chance, that pyschiatric office staff does just as well as the psychiatrists, and that paper and pencil tests are better predictors than experts. Yet, the show goes on because the important decisions need to be made by somebody.

Against this backdrop, even crude tools with a proven track record look good. Thus, a new study the shows a prediction method with some statistical validity, is welcome.

Psychologist John Monahan of the University of Virginia in Charlottesville calls the new paper “one of the most original and important studies on psychiatric symptoms and violence published in the past decade.” Monahan has studied the relationship between psychiatric disorders and violence for more than 30 years.

The approach shows that the frequency with which someone cycles from high points to low points of symptoms predicts the risk of harm to self or others:

Employing a statistical technique called dynamic systems modeling, the new work shows that among psychiatric patients with documented histories of committing violent acts, those whose symptoms of emotional distress rapidly and repeatedly fluctuated from mild to severe during a 26-week period were particularly apt to assault others or to threaten them with a weapon . . . . In cases of rapid symptom fluctuation, patients went from peaks to valleys of emotional health about every two to four weeks. . . . Violence occurred less frequently among patients whose symptoms fluctuated from high to low points over longer stretches, which often lasted about 10 weeks.

Overall, patients whose symptoms rapidly ebbed and flowed were almost three times as likely to become violent than those whose symptoms oscillated slowly. Patients who displayed rapidly fluctuating psychiatric symptoms that also worsened during the study were especially likely to commit two or more violent acts during the study period. . . .

[E]arlier studies have examined only whether symptoms present at one point in time predict violence at a later point. . . . Odgers and her coworkers studied 132 adults for 26 weeks after they were treated and released from a psychiatric hospital emergency room in 2000. Record reviews showed that all participants exhibited intense hostility and, in the two months before treatment, had heavily used alcohol and illicit drugs and had been involved in serious violence. Patients’ violent acts involved physical injuries, sexual assault or the use of weapons.

Each week during the study, the researchers interviewed a close family member or friend of each patient, as well as the patients themselves, for information on participants’ recent symptoms and violent behaviors. By the end of the 26 weeks, 78 patients had committed at least one violent act.

In further research, Odgers plans to examine whether rapid symptom fluctuations begin before or after patients commit violent acts. She also wants to explore the relationship between symptom swings and stressful events, including job loss and fights with romantic partners. . . . Many factors, including hostility and paranoia, are already known to make small but statistically significant contributions to predicting whether psychiatric patients will commit violence[.]

20 April 2009

9th Circuit: 2nd Amendment Binds States

The decision from the United States Court of Appeals for the 9th Circuit breaks from roughly a century of precedent under the controlling U.S. Supreme Court decisions which had held that the Second Amendment's right to bear arms did not apply to state and local governments. The U.S. Supreme Court's recent Heller decision which for the first time authoritatively enunciated the Second Amendment as an individual right to bear arms for self-defense reopened, but did not resolve, that question as it arose in the District of Columbia.

It remains to be seen if the U.S. Supreme Court will itself address the issue. The United States Court of Appeals for the 2nd Circuit reached the opposite conclusion earlier this year, so the two decisions have already established a clear split of authority between the circuits on the issue, a factor which makes the already likely issue for U.S. Supreme Court review (because it involves core issues regarding the status of a newly defined constitutional right) even more likely to be taken up by the nation's highest court. The Second Circuit case poses a better vehicle for cert review than the Ninth Circuit case, however, because the Ninth Circuit went on to find reasonable and valid the fairground gun possession regulation, which it noted was inspired by "Columbine High School in Littleton, Colorado" (in a decision released on the 10th anniversary of that event), which makes the Ninth Circuit decision dicta to some extent while the question of applicability to the states could actually change the outcome in the Second Circuit case.

If the decision is affirmed, it opens the door to a wave of lawsuits challenging state and local gun control laws, although on the merits, the U.S. Supreme Court's standard for constitutionality enunciated in Heller and interpreted since then in lower federal courts sets a low bar that the vast majority of state and local gun control laws are likely to be upheld under as reasonable regulations of the individual right.

I am among those who think that siding against application of the Second Amendment to the states (a doctrine known as incorporation) would be the more legally correct ruling, because the standard for incorporation, which is essentially whether the right is "necessary to an Anglo-American regime of ordered liberty," is not met. Many reasonably well functioning democracies, including Anglo-American ones (like Australia, Canada, Japan and the U.K.) have very strict gun control that would not survive Second Amendment review, even though other democracies (like Israel and Switzerland) have widespread private gun ownership. Under similar reasoning, the right to a civil jury, the right to a unanimous criminal jury in non-capital felony cases, and the right to a grand jury indictment have been held to not apply to the states. Then again, many functioning democracies have established religions, but the first amendment establishment clause does bind the states.

Eugene Volokh (a strong advocate for second amendment incorporation and well known libertarian leaning law professor) agrees that the Anglo part of the Anglo-American legal regime long ago abandoned the right to bear arms for self-defense, but argues that it is the articulation of the legal test (itself inconsistently applied in the past) that is wrong, rather than the application of the legal test to this question.

Banks In Black

All four of America's biggest and banks which collective own almost two-thirds of the commercial banking assets in the nation, made profits in the first quarter of 2009. All of this is a matter of accounting practices to some extent. But, these small number of data points regarding dominant players in the industry can say a great deal about the state of the industry as a whole.

It may even indicate that after having moved from having what is primarily a real estate bubble collapse, to having what is primarily a financial crisis, and that we are now moving on to a broad based recession, particularly for goods producing industries, not driven particularly greatly by either the real estate or the financial sector, even though those industries may not be out of the woods yet. If this is true, traditional anti-recessionary measures, rather than those targeted at particular industries, may be most helpful at this point.

Doing Science

One of the tricky things about science is that it takes considerable skill to reconcile experiment with even very solidly established theory, even with a good scientific background. For example, some poor soul at Physics Forums has set up a muon detector seemingly according to Doyle, and done calculations to show him how many hits he should get on his detector.

The problem: "I have observed a count rate of about 50 muons/day, . . . but 50 muons/day is no where near the 331,000/day I should be getting."

The noise has overwhelmed the signal and the person doing the experiment has only vague conjectures to explain why this is happening. Given the context of the post, the quality of past experimental work, and the accuracy of this part of particle theory, the problem is almost certainly one of experimental design or overlooked terms in a prediction equation. But, much of science is solving these basic kinds of problems, rather than contemplating new physics or squeezing the last part per million out of an observation.

One of the things that science education omits, until one reaches the quite high level at which one begins to do experiments like this one (junior or senior undergraduate science major or graduate student level), is the extent to which this kind of problem is the norm, rather than the exception.

Denver School of the Arts Lockdown

On Thursday, the Denver School of the Arts had an extended (couple of hours) lockdown, which was not a drill, followed by an even longer modified lockdown. Many children and teachers were terrified, and even a security guard took cover in a classroom during the lockdown. It was prompted by three days of disturbing text messages and some disturbing graffiti on the last school day before the 10th Anniversary of the Columbine school massacre, which, not coincidentally, was a key factor in the development of the lockdown in public schools as my children's generation's answer to the duck and cover drill or the fire drill. A couple of high school students were suspended in connection with incident, which may have flowed in part from mere misunderstandings, and security was slightly increased today. For the most part, the Denver School of the Arts has had relatively few security concerns compared to other schools in the District.

Despite losing their newspaper, the reporters at InDenverTimes the online cooperative venture of former Rocky Mountain News reporters did a better job of covering the breaking news story in the Denver metropolitan area than the Denver Post (its own footnote story entirely credited to its TV news partner 9 News), just as they did when they had a dead tree paper.

As has become the norm in these incidents, the students involved, their teachers and their parents received almost no information about what was going on from the District, adding to the terror, while cell phone equipped students, parents and teachers, and independent media sources like TV news and InDenverTimes rapidly exchanged a mix of rumor and fact trying to figure out what was really going on, and eventually they did learn what had happened, well before the administration provided a bare bones accounting of the incident.

The principal at the Denver School of the Arts has been subject to extended criticism from parents, in part due to allegations of poor communication with parents. The principal submitted a resignation in January effective at the end of the school year, and so will not be returning in that position next year.

The Denver Public Schools, time and again, has failed to learn that providing prompt and substantial factual information from them regarding matters like this which many people have a need to know, prevents panic and false rumors from spreading much faster than keeping close lipped and offering no comment. An appeal for calm doesn't work well when the administration has already hit the panic button, in the absence of full information. The district also undermined its credibility by claiming that it "was not a police case" when, in fact, the Colorado Bureau of Investigation was involved in investigating the incident and police came to the school.

Law School Skewered

The impractical side of American legal education is roundly criticized in the linked essay, with wonderful quotations from legal academe like this one:

We don’t want law school to be lawyer-training school.

- Marquette Prof. David Papke.

There is a better response, I think, also applicable to teacher's education, which is that many of the traits and skills which are important to doing the job aren't amenable to being taught in a classroom academic setting. But, this response begs the question of why there is not more non-classroom teaching in law school as there is in medical school, why law school is prerequisite to being a lawyer if law schools don't want to train lawyers, and closely related, why law school admissions are so focused on academic ability to do well in law school when academic ability is far from being the only trait necessary to be a good lawyer.

The medical analogy can be extended further. Medicine is awash in various kinds of specialized paraprofessionals, in part to allow more people to serve as medical professionals at a lower hourly rate, while the legal profession has been unreasonably reluctant to do likewise. And, there are people who get PhDs in medicine related fields who are not training to be doctors who could fill the very narrow niche that law schools aspire to fill, while the rest of the students train to be practicing professionals.

Now, don't get me wrong. I loved law school. It was a blast. And, it isn't quite as impractical as it seems at first glance. But, it does have some philosophical hangups about what it should be doing that are inappropriate to its real purpose which is to train lawyers to practice law.

The Dark Side Of The State Militia

A key part of the American constitutional order not contained in the United States Constitution itself is the Posse Comitatus Act, which provides that the United States military may not be used to enforce domestic laws except in rare cases of invasion or insurrection.

The constitutionally preferred way to handle events beyond the resources of the local constabulary is to call out the state militia, the principal component of which, these days, is the Colorado National Guard. The Colorado National Guard, when not in federal service, may be activated by the Governor to suppress riots and enforce the laws, in addition to their more usual role in responding to natural disasters.

Absent activation by the Governor or President, membership in the National Guard is a part-time job, typically involving a weekend a month and two weeks a year of training, for part-time pay.

The theory, basically, is that national guard members, who have more day to day non-military contact with the general population, who live in the state, and who tend to be older (a large share of national guard members are retired military, or experienced public safety workers), are less likely to do something stupid than active duty military soldiers who tend to be in their late teens or early twenties and have little adult experience with civilian American life outside the military and often hail from distant parts of the country. Governors, likewise, are less prone to be rash than Presidents, the theory goes, because their constituency cares more about how people in their state are treated by militia forces, than the larger national constituency of the President.

But, as Kent State in Ohio, and the Ludlow Massacre in Colorado (95 years ago today), this doesn't mean that state militias will never use force excessively.

The same part-time nature of the militia job that keeps those involved more aware of what is normal in life, also means that they spend less time training for high pressure potential riot situations. The same political logic that keeps Governors politically aware of what is going on in their state, also makes it unlikely that they are impartial arbiters of disputes in the state, and voters rarely give much thought to the acumen of their Governors as military commanders.

The basic question is whether military law enforcement is too important a matter to be left to professionals, or just the opposite. Mostly, these days, this is resolved by having the state patrol or local law enforcement, rather than the militia, respond whenever possible. But, for better or worse, there is still a state militia, and it could be called in to deal with "Big Trouble" which very often has a domestic political component.

Denver Drought Averted

The heavy spring snow and rain this past few days has brought Denver from being woefully short (about 60% short) of precipitation this year, to a little over the norm for the year to date. It has also topped up the snow pack in the South Platte River Valley in which we reside, which had been modestly below average going into the storm (about 3%).

Thus, the odds are now good that we will escape drought this year in Denver. The fact that this all changed in a few days illustrates that precariousness of our situation. Our moisture comes in brief, infrequent and intense bouts. One storm can make or break us for the year. This year we got lucky.

Veiga Vacancy Race In Full Swing

Jennifer Veiga, the incumbent candidate in Colorado State Senate District 31 (which included parts of western Denver and Southern Adams County), won't resign her seat (bound for Australia to be closer to her partner's aging parent) for a couple of weeks. But, the race to fill her seat is in full swing.

Multiple candidates are appearing at my door step and call me on my phone. No one has yet established a position as a clear favorite. In contrast, Veiga was the clear favorite when she filled the vacancy left by Doug Linkhart's departure for Denver's city council, as a sitting Colorado General Assembly representative in House District 3 which overlaps with Senate District 31.

The race is not quite as intense as the ten day mad rush to fill the vacancy in House District 3, in which Daniel Kagan ultimately prevailed. It also seems to be a more collegial race. Neither candidates nor proxies have gone negative yet. Enthusiasm, a commitment to progressive values including gay rights, and fidelity to the democratic base seem to be the main pitch points for just about everyone running, although there are variations on the theme, of course.

I'm not ready to do a candidate by candidate analysis yet. Quite frankly, I'm not even sure what I most want to see in a candidate myself. The right values, the personal qualities needed to be effective in the general assembly, and an ability to hold the seat in an election once running as an incumbent all matter.

There isn't a rush, so I'll pop myself some popcorn and take in the show for a while, before thinking hard about who to vote for in the end.

17 April 2009

Union Busts Pirates

The crew of the Maersk Alabama, the freighter that was hijacked by pirates off the coast of Somalia, and then freed by their heroic actions fighting back, attribute their success to the unity that came from being fellow union members.

Alabama engineer John Cronan told NBC’s Today Show: “We’re union members. We stuck together, and we did our jobs.”

From here.

Colorado Unemployment Hits 22 Year High

The unemployment rate in Colorado, 7.5%, while lower than the national 8.5% rate, is the highest that it has been in the state since 1987. This is despite the fact that the stock market has recovered from its low to roughly the point it was at when President Obama took office.

The Slaughter House Cases

The Slaughter House cases effectively rendered the privileges and immunities clause of the 14th Amendment, which had been intended to guarantee individual rights vis-a-vis state governments, a dead letter.

Eventually, courts figured out how to work around this problem by selectively incorporating important parts of the Bill of Rights into the due process clause of the 14th Amendment which is also effective against state and local actors. But, this took time and remains an awkward theory to buttress federal protections for civil liberties. Some rights took half a century, and others nearly a century to secured federal protection in the wake of the Slaughter House cases.

But, the cleaner approach, by far, would have been to rule only narrowly in the Slaughter House cases themselves, which did not require such a broad ruling to be resolved, and to use the privileges and immunities clause of the fourteenth amendment as the legal basis for federal protection of the civil liberties set forth in the bill of rights.

The episode taken as a whole is vibrant proof of the legal realist view that the values of the people implementing the law greatly impact how the law is applied in fact.

Lie Detectors and Hypnosis Inadmissible

A Colorado Court of Appeals decision makes clear that polygraph (i.e. lie detector) test results and hypnosis are not admissible in either civil or criminal cases in the state because they are junk science, even if they get into evidence only indirectly via expert testimony.

Courts may still make a harmless error analysis on appeal, to see if this inadmissible evidence was important to the result reached and affirm a ruling if it would have come out the same way without polygraph or hypnosis evidence.

Despite great court distrust of polygraphs and a federal law that greatly limits the use of polygraphs by employers, they are still widely used. For example, a friend of mine recently had to take a polygraph test in connection with the hiring process for a new law enforcement job. But, rulings like this case show that use of this tool is counterproductive if push comes to shove.

Pre-Zoning Cities More Sustainable

A study cited by the Colorado Independent revealed that cities established and primarily developed before the advent of modern zoning codes are more sustainable environmentally and otherwise, than those build after World War II when zoning was a powerful force guiding development. Denver, an older city designed to a great extent in the steam and street car suburb era, ranks 11th in sustainability among major cities.

Justice Thomas Easily Impressed

I have to admit that I’m one of those people that still thinks the dishwasher is a miracle. What a device! And I have to admit that because I think that way, I like to load it. I like to look in and see how the dishes were magically cleaned.

- Justice Clarence Thomas.

16 April 2009

Denver Considers New Zoning Code

The public process to adopt a new zoning code in Denver is underway.

Everyone agrees that the existing zoning code is insanely arcane while often not providing a clear message. But, is the proposed alternative better?

A key starting point of the new code concept is to identify six neighborhood types and an exception category, as follows.

Suburban: The Suburban Neighborhood Context consists of curving streets with varied block shapes and sizes. It is predominantly single family with commercial uses accommodated in shopping centers [the land of cul de sac's in far SE and SW Denver and possibly Gateway/Green Valley Ranch].

Urban Edge: The Urban Edge Neighborhood Context consists of both curving and grid street patterns with a mix of front driveway and alley access. It is predominantly single family with commercial uses accommodated in shopettes and main streets [?Virginia Village, Eisenhower Park and Bonnie Brae?]

Urban: The Urban Neighborhood Context consists of a regular grid and alley block pattern. It is predominantly single family with duplex and other multi-family uses occasionally mixed in. Commercial uses are embedded in the form of small scale main streets and occasional corner stores. [?Wash Park, Congress Park, etc.?].

General Urban: The General Urban Neighborhood Context consists of a regular grid and alley block pattern with convenient access to public transit. It is predominantly multi-family with commercial uses embedded in the form of medium scale main streets and corner stores [?Colfax and Uptown and Byers?].

Urban Center: The Urban Center Neighborhood Context is predominantly mixed use with both residential and commercial uses. It has convenient access to public transit and supports high pedestrian activity [e.g. Cherry Creek North].

Downtown: The Downtown Neighborhood Context consists of the tallest buildings that accommodate both commercial and residential uses. It is the hub of the regional transportation system and has high pedestrian activity [i.e. Downtown Denver].

Special Context: Special Contexts are areas that do not have characteristics of other Neighborhood Contexts and typically serve a principle purpose that is reflected in its name. Special Contexts include Civic, Industrial Park, Campus, and Entertainment/Cultural.

So, what changes?

In the summer of 2007, we heard from Denver citizens about the approaches and best practices that they preferred to put Blueprint Denver to work with The New Code. These included:

Major Substantive Changes: Instead of our current "one-size-fits-all" approach, The New Code will take into account the qualities that differ from neighborhood to neighborhood in order to preserve the character of each community.

This approach is called "context-based zoning." A few examples of characteristics that define a context are block shapes, parking, locations of residences and businesses, and proximity to public transportation. . . .

Major Procedural Changes: Again, instead of taking a "one-size-fits-all" approach, the process of reviewing of development projects will be shorter for simpler projects than for those projects that are more complex and require a longer review process. . . .

There will be a wide range of house sizes possible under the New Code. The context-based approach will not only recognize the existing range of home sizes, but will also identify a range of compatible forms for larger homes and expansions to allow homeowners considerable choice when contemplating renovations, expansion or new construction. . . .

The New Code will incorporate a variety of "transition" tools to help different types of districts interact positively:

* Require a "step-down" in building height to transition from higher-density to lower-density districts. See illustration below of how this was utilized in the "Main Street" revitalization of Colfax Avenue.
* Require landscaped "buffer areas" between the diverse districts, particularly when impacts such as glare or noise are could be disruptive.
* Where possible, encourage less intensive or more compatible land uses to improve interactions between diverse districts.

The New Code will create many opportunities for property owners to satisfy modern-day housing demands:

* Allowing new residential development on zone lots smaller than 6,000 square feet.
* Permitting, where appropriate, development of accessory dwelling units, also known as "granny flats" or "mother-in-law apartments."
* Guiding home renovations but not thwarting them with current "one-size-fits-all" zoning limits.
* Enabling development of more "urban" housing choices, such as residences located downtown or around transit stations.
* Encouraging combinations of work and living spaces in more places across Denver.

I am cautiously pessimistic. While there are some select positive changes proposed and a clean slate can tame some of the ungainly complexity of the current code, the overall gist of the plan seems to be to increase the tendency of the zoning code to discourage innovative land use, cement existing uses with the force of law, and micro-manage more details of what is built.

As in the old code, the focus will be on a command and control regulatory regime in which the city tells people where they should build what, rather than focusing on a more generalized duty to mitigate externalities that permits any use that does not adversely impact the provision of city services or unduly burden city owned property that benefits a neighborhood. The strong focus on maintaining the look and feel of existing neighborhoods is particularly disappointing, because history has shown that eclectic neighborhoods with varied building styles and types that reflect the decades in which each building was constructed, can work well.

Indeed, those neighborhoods that have thrived after periods of stagnation (Cherry Creek, Uptown, Golden Triangle, Coor's Field, LoDo, etc.) have almost universally done so by introducing new building types that differ radically from existing neighborhood character to meet the new needs of the times. Cherry Creek saw small, shoddy single family homes replaced with upscale townhouses. Uptown has replaced larger old single family homes with low rise apartment complexes, as has the Coor's Field neighborhood. LoDo turned warehouse, industrial and office space into drinking, night club, dining and residential uses. The Golden Triangle has taken a mix of urban residential, small shop and parking lot uses and spiced it up with medium to high rise condominium/apartment buildings in different styles, often with ground floor commercial. Similarly, the revivals of Cinderella City in Englewood and Belmar in Lakewood, have involved radical overhauls of the way those areas were used historically.

These changes are less traumatic when they happen on a piecemeal basis, organically, rather than at the direction of city planners who try to pick winning and losing land use types for particular areas. One shouldn't have to wait until it becomes painfully obvious to everyone that an existing land use approach is failing, in order for it to be legal for property owners to try radically different approaches through statutory change to the zoning code. But, this plan simply resets that cycle once again, rather than having means to gradually change neighborhood character to meet the needs of the real estate marketplace, the most grass roots type of public input.

This is true in bad economic times as well as sustained periods of growth such as those seen recently by Denver. While Denver hasn't seen a sustained downturn for a long time, in Buffalo, New York, the healthiest neighborhoods in the City proper are those where new building types were permitted scraping wholesale what was there before, and neighborhoods were there were widespread conversions of single family homes to multi-unit dwellings. Neighborhoods that did not change died. Some notable historic buildings were preserved, but it became clear that it was not viable to try to keep large neighborhoods as they had been.

Greater tailoring of zoning laws to existing uses than under the current code is a prescription for slow stagnation in our city.