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Dec 2, 2008

Less Free than 40 Years Ago

Who is Less Free than 40 Years Ago?
12/02/08 - ChicagoBoyz by Shannon Love

[edited] Anyone who creates new wealth has seen their freedom to create attacked. Farmers, builders, manufactures, and small business people all have seen their choices progressively reduced. Individuals have far fewer choices when it comes to such activities as raising crops, building houses, building factories, designing products, setting work rules, or running a corner store.

Most of us do not see this contraction of freedom because we are not economic creatives. Most of us work for creatives; we ourselves do not create the businesses that pay us or the products and services they sell. We do not personally bump our noses against the government restrictions that limit the people who employ us and sell to us.

Restricting the freedom of economic creatives ultimately restricts the freedoms of everyone. Without the material necessities and luxuries provided by the creatives, the rest of us cannot implement our own choices.

If the State controls your access to food, shelter, medical care, transportation, and information, the State controls you. All modern tyrannies began with economic control, then used that power to suppress other freedom.

One Eye Fixed and Dilated

12/02/08 - WhiteCoatRants --> Boogly-Boogly

A man is wheeled into an emergency room with one eye fixed and dilated. This is a life-threatening observation, with a Halloween ending. Funny.

- -
05/26/11 - The link is bad because the target blog is now private.

The story is that the man had injured himself while drunk. The ER resident immediately noticed that one of his eyes had a fixed and dilated pupil, which is a sign of severe brain injury. He questioned the man about his eye and what had happened.

The man sat up suddenly and popped his glass eye into his hand to show the resident.

Nov 30, 2008

Page Tracking a Blog Using Google Analytics

I use the free Google Analytics service to track views of my blog. My pages send tracking information to the GA computers. GA reports how many visitors have read the blog, for how long, and a lot more, but it does not report individual information about who is visiting.

The "GA Tracking Code" is a short JavaScript program provided by GA that is part of each page, indicated by a title at the bottom of the page. You include the tracking code by using the Layout page of the Google blog setup.

This article discusses:

  • How GA determines page view time
  • Installing the GA Tracking Code
  • Setting a filter and cookie to exclude your own page views
  • Time on Page with "/endpage" checkpoints
  • Top Content Report - Time on Page
  • Tracking outbound links
  • Sources

How GA Determines Page View Time

GA is optimized for tracking commercial sites. Each page request generates one log entry (a checkpoint). A commercial site wants to track the progression of a customer from main page, through product pages, shopping cart, and payment. Here is a simplified example of what log entries are like:


                    Check   Time
                    Point   Spent  What Happened
                    -----   -----  ---------------
Page /BuyThings     40:00   0:10   User views site
Page /productA      40:10   1:50   At product A
Page /productB      42:00   2:30   At product B
Page /ShoppingCart  44:30   1:20   At Shopping Cart
Page /CreditCard    45:50   1:00   Provides payment
Page /Confirmation  46:50   0:00   Payment accepted
Page ??                ??          User Disappears

Time Spent is calculated from the differences in the Check Point times. For example, the user looked at the /ProductA page at 40:10, and at the /ProductB page at 42:00, so the /ProductA page displayed for 1:50.

Notice that the time entered for the /Confirmation page is 0:00. We suspect that the user spent at least a few seconds on that page, but we don't know how long, because that was the last page the user looked at. There is no following checkpoint to compute time spent, so GA records 0:00.

This doesn't work out well for tracking blogs. Here is an example:


                    Check  Time
                    Point  Spent   What Happened
                    -----  -----   ---------------
Page /MyBlog        40:00   1:40   User views site
Page /MyBlog/Page1  41:40   0:00   Goes to Page1
Page ??                ??          User Disappears

The user looked at the first page /MyBlog, read some posts, went to /Page1 to read, then went to another site. There is no page view following /Page1, so the time spent is unknown and is entered as 0:00. Your reports will show page views, but you won't know the time spent reading the last page visited.

My solution generates a checkpoint for the artificial page "/endpage" when the page is unloaded. This results in reports that capture almost all of the time spent on each page. The above logfile for MyBlog then looks like this:

                    Check  Time
                    Point  Spent   What Happened
                    -----  -----   ---------------
Page /MyBlog        40:00   1:40   User views site
Page /endpage       41:40   0:00   Leaves /MyBlog
Page /MyBlog/Page1  41:40   1:10   Goes to Page1
Page /endpage       42:50   0:00   Leaves Page1
Page ??                ??          User Disappears

No time is usually assigned to /endpage, because it is immediately followed by another blog page or a disappearance. It is there to determine the display time of the last page read.

Sometimes /endpage accumulates Time Spent. I think this happens when a visitor leaves the site and comes back within 29 minutes. The tracking log has /endpage followed by a blog page, so the time is assigned to /endpage.

Sometimes, pages viewed show zero Time Spent. Possibly the visitor left that page within a few seconds, and GA ignored the page view.
 

Installing the GA Tracking Code

My blog is on Blogger, so I don't know how this advice adapts to other services.

Go to the Google Analytics sign-in page, create a Google account if needed, and sign in.

GA Overview Page: Click "Add Website Profile" at the lower left.

GA Create New Website Profile Page: Enter your blog URL in the box labeled "Please provide the URL of the site you would like to track". Click Finish. For example, my blog url is
"http://easyopinions.blogspot.com/" .

GA Tracking Code Page: The pale yellow box shows "Tracking Status: Tracking Not Installed". This is expected.

Copy the JavaScript text from the white box farther down the page, and place it into a convenient text file for the moment. Save this as part of your own documentation about your website. (Ignore the link to "Legacy Tracking Code urchin.js" ) Don't add or delete spaces or break up lines. Click Finish.

The tracking code is the same for all sites and all web pages, except for the identifier in blue ("UA-5212345-6") which corresponds to the website URL you just registered. You will get your own identifier in the code generated for you.

<script type="text/javascript">
var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www.");
document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E"));
</script>

<script type="text/javascript">
var pageTracker =
_gat._getTracker("UA-5212345-6");
pageTracker._trackPageview();
</script>

GA Overview Page: You will now see a line for the site URL you have registered. The Status will show a yellow triangle /!\ showing that data from your site has not been received yet. GA will fully recognize your blog after you install the tracking code into your blog pages and it sends some page tracking information.

Go To Your Blog Setup: Navigate to your Blogger setup page: Layout: Page Elements. You will see the block diagram of the parts to your blog page. Click on the short, wide rectangle at the bottom, on the blue link "Add a Gadget".

Pop Up Window: Add a Gadget - Basics: Scroll to about the middle and click on "HTML/JavaScript: Add third-party functionality or other code to your blog".

Pop Up Window: Configure HTML/JavaScript: I suggest the title "Google Analytics" (without the quotation marks), but this is your choice. Paste the saved JavaScript code into the big box. Click the orange Save button.

Layout: Page Elements: Click the orange Save button. A yellow rectangle confirms that "Your Changes Have Been Saved". Click "View Blog". The installation is done.

The GA Overview Page that you visited above will show the yellow triangle for up to 24 hours until GA gets some data from you or others visiting your site. A green check mark indicates data has been received and correct operation. Browse around the GA pages and read the explanations. Click on the View Report link to see the many possible reports of your blog traffic.
 

Eliminate Self Tracking

The GA tracking code records your own page views along with other views. You may not want your reports to include your own activity.

You can set up a Filter at GA (a rule to include or exclude data) to ignore information from one or more IP addresses. Unfortunately, most people have a changing IP address assigned to them by their Internet Service Provider. It may be constant for a while, but it changes unpredictably.

Instead, I use a Filter Value to exclude activity coming from my account on my computer. A cookie is a text file that holds information stored and used by a website. First you create a custom filter at GA, then you write a Filter Value into the cookie for your blog.

** Create the Filter at GA

Go to GA Settings: click on "Filter Managers" in the lower right corner.

GA Filter Manager Page: See the gray heading "Existing Filters. Click on "Add Filter" at the right of the heading bar.

GA Filter Manager> Create New Filter Page:

Filter Name: Enter "Exclude Cookie", or use another name. Don't include the quotation marks.

Filter Type: Choose "Custom Filter" from the drop-down list. More choices will appear.

List of circle choices: Choose "Exclude"

Filter Field: Choose "User Defined" (showing at the top) about the 10th item in the entire list.

Filter Pattern: [Your Blog Name]. For example, if your blog is WonderfulStuff.blogspot.com then you would enter "WonderfulStuff", or "wonderstuff", or something based on your blog name. If I suggested that you use a particular name "cat", then any other blogger who also used "cat" would not show up in your blog statistics. Just for discussion below, we will assume you used "wonderstuff", but don't use that particular value.

Case Sensitive: No

Apply Filter to Website Profiles: Select your blog in the box on the left, and click "Add" in the middle, to move the name into the box on the right. If you are tracking more than one blog, this filter applies to all blogs that you move to the box on the right.

Save Changes: Click to create the filter.

** Write The Filter Pattern to the Blog Cookie

Cookies are text files with a complicated format and security restrictions, so your Web browser has to write to them. You will write your Filter Pattern (eg "wonderstuff") to the cookie with a blog post, by clicking a link containing a GA JavaScript function call. You do this once to update the cookie, or again if you delete the cookie by mistake. There is no harm in writing the cookie more than once. The link shows an alert "Cookie is set" to confirm that it operated.

Create a blog post that holds the following content. You may include other content or explanation. Give the post a date in the past that hides the post. You may delete the post or make it a draft after use, so that visitors don't use it by mistake. Replace the text "wonderstuff" with whatever value you chose above as your Filter Pattern, and keep single quotes around it as shown.


<p><a href="#x"
onClick="javascript: pageTracker._setVar('wonderstuff');
alert('Filter Pattern is set');">
Write Filter Pattern</a>

Copy and paste this code into your post, publish it to your blog, visit it, and click on the link to write the Filter Value into the cookie. The presence of that value will activate the Exclude Filter you set in GA, keeping your own activities out of your GA reports. You should see this effect within a day.

The link will look like the following on your blog page, and you can click this one to see how it operates. This one shows a message, but doesn't write a cookie.
Write Filter Pattern

You could do this for possibly many users on many computers that you want to exclude from your activity reports. Each user displays the special blog page and clicks on the link to put the Filter Pattern into the cookie for your blog.

You can look at the cookie for further confirmation. For user Dad, using Windows XP, the cookie created for blog WonderfulStuff is located at:

Directory: C:\Documents and Settings\Dad\Cookies
File: dad@WonderfulStuff.blogspot[1].txt
If you click on the cookie, it will display as run-together text with many "small-box" symbols. You will find your Filter Pattern "wonderstuff" in the text somewhere, if all is well. Again, use your own value in place of 'wonderstuff'.
 

Time on Page with "/endpage" Checkpoints

Navigate to your Blogger setup page: Layout: Page Elements. Click on Edit within the box titled Google Analytics (or the title you gave it), to expose the code. Use cut and paste to add the three green lines in the code group below, with a blank line for readability:

<script type="text/javascript">
var pageTracker = 
_gat._getTracker("UA-5212345-6");
pageTracker._trackPageview();

function f_unload()
{pageTracker._trackPageview("/endpage");}
window.onunload = f_unload;
</script>

Click the orange Save button to finish. You should see the effect in your reports within a day.
 

Top Content Report - Time on Page

The GA "Top Content" report shows an overall average Time on Page in the report header, and an individiual average Time on Page for each blog page. This is how they are computed.

 Page  TimeOn  %Exit   Page   Total
Views    Page          Count  Time

    6    1:00  33.33%    4    4:00
    4     :30  25.00%    3    1:30
                       ---    ----
              Totals     7    5:30
    Avg Time on Page           :47  

Columns Page Views, Time On Page, and %Exit are from the GA report. We compute Page Count and Total Time. The figures above are an example containing two pages.

GA accumulates the total time spent on each page from all page views (not unique page views). GA divides this by the number of pages that accumulated a known viewing time. Page views that were interrupted by an "exit" could not be assigned a viewing time, because there is no endpoint available to calculate a time.

We calculate a "Page Count" column as the number of Page Views minus the number of exits = "Page Views" x (1 - "%Exit"). The "Time on Page" is the average viewing time for each one of these pages, so the total time measured for that page is "Time on Page" x "Page Count".

In the example, the first page has 6 Page Views with a 33.33% exit. So, 2 of the page views has no measured time, and the remaining 4 contributed to the 1:00 average viewing time. 1:00 x 4 = 4:00, the total viewing time known for that page. The same calculation for the second page gives 3 page views having a total viewing time of 1:30.

The Total Time for all measured pages is 5:30, and there were 7 measured pages, giving an overall average Time on Page (at the top of a GA report) of 0:47 per measured page. This approach entirely leaves out the unmeasured pages from the averages. This assumes that the unmeasured pages are probably average in the amount of viewing time. You can make your own estimates if you wish, knowing how the averages are computed.

The statistics in the report heading fit the following formula.
   Measured_Pages = PageViews x (1 - Exit%)
   Total Viewing Time = Measured_Pages x TimeOnPage

For example, given these numbers from a report heading:
Pageviews 100,  Unique Pageviews 80,  Time on Page 2:00,  Bounce Rate 30%,  Exit% 40%.
   Measured_Pages = 100 x (1 - 40%) = 60
   2 hours Total Viewing Time = 60 x 2:00
 

Tracking Outbound Links

You probably have links to other sites included in your blog. Without the Endpage code above, the user just disappears. With the Endpage code, the current time on that page is recorded, and the user disappears. Sometimes, you want to know if a particular link was used.

You can include a bit of JavaScript code in any link that you want to track individually. For example:

<a href="http://www.CoolOtherSite.com"
 onClick="javascript:
pageTracker._trackPageview('/outgoing/Cool');">  
Goto Other Site</a>
The GA function _trackPageview('/outgoing/Cool') sets a checkpoint for '/outgoing/Cool' when the user clicks "Goto Other Site". The checkpoint can be any text.

This groups together outgoing link information under the artificial page name "/outgoing" . The "/Cool" part is whatever best reminds you of the link that is used, and could be the entire link name. You may use the same text for all links that you are tracking, or a different text for each one.

The Endpage code removes the need to track all outgoing links just to capture the Time Spent on the page. The above code is shown in short lines for display; it may appear in the HTML page as one line if desired.
 

Sources

Analytics Help Forum Archive: Discussions > Tracking Your Site
Questions and answers about site tracking.

Time-On-Page Goals in GA and Website Optimizer
09/05/07 - EpikOne by Justin Cutroni
Using setTimeout() with the older GA UrchinTracker code. The ideas can be applied to the current TrackPageview code.

New GA Tracking Code: GA.JS
09/16/07 - EpikOne by Justin Cutroni
An article about the then "new" TrackPageview code.

Standard Metrics #4 : Time on Page and Time on Site
01/08/2008 - kaushik.net by Avinash Kaushik
How GA and other services determine Time On Page

Google Analytics Tracking Code: Extending Event Tracking
2008 GA - Comprehensive, complicated event tracking with a new library of JavaScript functions.

Nov 29, 2008

Political Arrest in Great Britain

A British Political Arrest
11/29/08 - Samizdata.net by Brian Micklethwait (London)
The Damian Green Political Arrest

--> An outrage that brings shame on Britain
01/12/09 - (11/29/08) TimesOnline by Mathew Parris

[edited] Nine counter-terrorism officers raided the home and offices of a senior member of the Opposition. What a blunder. What an outrage. What a stupid, stupid, thing to do.

This is a gift to the Tories (conservatives), and incredibly damaging to a governing party whose Prime Minister enjoys a reputation for bullying. That is the best argument for doubting that Labour ministers had anything to do with the arrest of Damian Green, a mild-mannered and distinctly herbivorous Shadow Immigration Minister.

Maybe ministers really were kept in total ignorance, but few ordinary voters are going to believe it. A Prime Minister otherwise known as the Big, Clunking Fist will struggle to dissociate himself in the public mind from an astonishingly heavy-handed police operation against a critic.

Micklethwait comments on declining ethics in politics:
[edited] I include references to f---ing and f---ers very deliberately. Our rulers now swear a lot more than they used to. It is all part of that atmosphere, that tone, that they have been so busily creating. It is an atmosphere in which there are now so many laws, and laws which are so sweeping in their scope, that all are now guilty.

The law simplifies down to the question: do they like you? If they really really do not like you, look out, they'll come for you, and find or make up the laws they need as they go along.

A front bench politician has been, very publicly, on the receiving end of this parody of the idea of law. It is cause not for rage and more swearing, but for rejoicing [because it brings the corruption of government and law into public view].

Politicians and CEO Pay

11/29/08 - NYPost.com by Thomas Sowell (via PowerlineBlog)   --> Source

[edited] For years, politicians have pressured banks and other institutions into lending to people they would not lend to otherwise. They used the Community Reinvestment Act, other regulatory powers, and threats of legal action.

Yet, when all this blows up and the economy turns down, what is the answer? To have more economic decisions made by politicians, because they choose to say that "deregulation" is the cause of our problems.

No matter what happens, for politicians it is "heads I win and tails you lose." If we keep listening to them and their media allies, we are all going to keep losing big. Keeping our attention focused on CEO pay [a very small expense compared to the big picture] is part of this game. We are all goats if we fall for it.

Reject Medicare and Lose Social Security

11/29/08 - (11/08/08) San Diego Union Tribune Editorial
(via InstaPundit and NAlert)

The freedom and fairness of socialized medicine.

[edited] The first wave of baby boomer retirees will soon turn 66 and get their first Social Security check. But they won't get Medicare without signing up, soon.

That's one Medicare requirement worth knowing. Here's another: Opting out of Medicare is possible – if you don't mind losing your Social Security, too.

Three seniors have sued. They want to pay their own medical costs, and they would abandon the Medicare taxes they've long paid. But, they don't want to abandon Social Security.

That would ensure the privacy of their medical records and spare them bureaucratic review of every lab test and office visit. If not deemed "medically necessary", Medicare doesn't pay, and the physician by law can't bill the patient. No wonder why many elderly have difficulty finding a doctor.

No law mandates participation in both programs or none. The Clinton administration instituted that regulation, buttressed by Congress' ban on seniors going outside Medicare for any service it provides.

Nov 27, 2008

Men with Flu Get Five Minutes of Sympathy

11/27/08 - Telegraph.co.uk by John Bingham   --> Source
Is this why half of marriages end in divorce?

52% of women polled said that they lose sympathy with their husband or boyfriend within five minutes of his first complaint about feeling under the weather.

Nov 26, 2008

A Car Wreck Made in Washington

11/26/08 - WSJ.com by Holman W. Jenkins, Jr.   --> Source

[edited] It was a fantastic moment in last week's congressional hearings. Rep. Stephen Lynch (D.MA) asked CEO Rick Wagoner whether General Motors was also asking China for a bailout.

He seemed to imply that GM can't afford to pay inflated UAW wages because it is squandering money building cars in China. Mr. Wagoner mildly answered that GM's China operations are profitable, and actually help to offset massive losses in the U.S.

Ford and GM are able to run profitable auto businesses all over the world, but not in the U.S., because the United Auto Workers union (UAW) is present only here.

Congress's CAFE fuel-economy rules, not labor law, have been the biggest factor in preserving the UAW's monopolistic power. CAFE effectively requires the Big Three automakers to lose tens of billions making small cars at a loss in U.S. based UAW factories. CAFE keeps the Big Three from profitably importing small cars, and removes any ability to control labor costs by moving some production to factories in Spain, Taiwan, or Poland. Let's face it, that's what other successful U.S. manufacturers do.

CAFE intentionally gives the UAW the ability to keep wages high and uncompetitive in the face of global competition. It has nothing to do with giving Americans efficient cars. Yet, not a single legislator doubted the idea that Detroit's woes result from an improbable series of "stupid decisions" (as another Massachusetts congressman put it) by 18 CEOs over 30 years.

Nov 23, 2008

A Short Argument Against Stimulus

Economist Henry Hazlitt debunks stimulus in three paragraphs at Economics in One Lesson: The Broken Window (1978). Here is the first part:

[edited] A hoodlum heaves a brick through the window of a baker’s shop. A crowd gathers to stare with quiet satisfaction at the hole in the window. After a while, several will notice a bright side. Broken windows support the glass business. This will give $250 in business to a glazier.

Then, the benefit is endless. The glazier will spend $250 more with other merchants, and these in turn will spend $250 with other merchants, and so on infinitely. The smashed window will provide money and employment in ever-widening circles. The logical conclusion from all this would be that the hoodlum made everyone better off.

Hazlitt criticizes this reasoning using just two more paragraphs at the link.

This incorrect reasoning is the idea behind "stimulus", that spending causes money to flow around making everyone better off. Stimulus is used to justify government spending, even if the activities are inefficient or useless.

Stimulus is supposed to justify taking more tax from the lazy investments of the rich, to give money to the non-rich, who will spend it immediately to improve the economy. But, if it were true that government spending created waves of prosperity, we would all be on lounge chairs in Aruba by now.

Stimulus is the fundamental myth of our time. It wrongly tells us that we don't have to be careful about what we buy or in what we invest, because we will somehow create jobs and prosperity if only we all go shopping, and force rich taxpayers to spend through the government.

Stimulus is a cruel myth, because reality is just the opposite. Higher taxes are taken from people with knowledge and ability who are investing in profitable businesses that create jobs. Instead, these resources are directed to uses that produce less. We can have a society of manufacturing and service businesses, making goods that people want, or we can have more bureaucracy, producing paperwork in filing cabinets.

See also Econ 201: The Myth of the Economic Multiplier for a more detailed discussion of stimulus and the related myth of the Economic Multiplier. It is not true that each $1 of spending flows around to produce $2-$4 of benefits. Spending $1 transfers just $1 of goods from one person to another. That's it. What did you expect?

Nov 22, 2008

Brussels, The Cucumber, and Deregulation

Brussels and the Cucumber
11/22/08 - WSJ.com Opinion

EU regulators will do a bit less regulation. Ever wonder what all of those people are doing in your own government?

[edited] European Union Commissioner for agriculture and rural development, Mariann Fischer Boel says "It's a new dawn" in Brussels. Next July, the EU will lift rules dictating the size and shape of 26 fruits and vegetables. Hello, curvy cucumber.

For decades, the EU has issued rules in the name of "consumer protection", such as how to use mayonnaise, the definition of an egg, the diameter of a peach, and protecting European shoppers from the sight of a misshapen carrot. This requires an army of bureaucrats and a few editorial writers.

These rules cost billions in higher grocery prices and the taxes that support Europe's notorious Common Agricultural Policy. Ms. Fischer Boel says the new regulations will cut administrative costs and reduce food prices. "We simply don't need to regulate this sort of thing at the EU level. It is far better to leave it to market operators." What a thought.

The "bonkers Brussels bureaucrats" are still with us. 16 of the EU's 27 member states oppose the changes, and the EU will continue to set standards for apples, tomatoes, and 8 other fruits and vegetables making up 75% of the value of EU trade.


- -
Protected From UglyRipe Tomatoes
02/02/11 - 02/24/05 - Mises.org by Gary Galles  [edited]

Why are winter tomatoes pretty but tasteless? The government is protecting us from having to think too much about them, and about other fruits and vegetables.

UglyRipe tomatoes come from 10 years of work by Joe Procacci. Customers say they have the luscious taste they remember from the good old days. Few UglyRipe meet the FTC’s standard of beauty for selling out of state because they fail roundness standards.

This is the latest in a long line of rip-offs in the name of consumer protection and enforced by government marketing boards. Marketing boards trace from New Deal legislation to “save” agriculture.

Florida growers of pretty but bland tomatoes dominate America’s winter supply, and they protect their profits at consumer expense. Marketing boards block the sale of “lower quality” tomatoes to restrict competition from newer varieties that consumers might prefer.

Nov 21, 2008

The U.S. Needs Modern Nuclear Weapons

11/21/08 - WSJ.com Opinion by Melanie Kirkpatrick   --> Source

[edited] Gen. Kevin Chilton says we've done a pretty good job of maintaining our submarines, missiles, and bombers. Back when we had a robust infrastructure to replenish nuclear warheads, they were designed for a 15-20 year life. Now, they are all older than 20 years. The analogy is trying to extend the life of your 1957 Chevrolet.

Gen. Chilton illustrates his point with an electronic vacuum tube, a glass bulb two inches high with connection pins at the bottom. It is a component of a V-61 nuclear warhead from the 1950-60's that is still in the U.S. arsenal. "I remember what these things were for. I bet you don't. In the 1950's, my father used to take these out of the television set down to the local supermarket to test and replace them. This is the technology that we have today."

Compare that to a circuit board that fits in my hand. "That tube is just a tiny, little chip on this circuit board". Congress has not appropriated money for the Reliable Replacement Warhead program, to replace tube technology, and the Department of Energy has no appropriation even to study how to do so.

Nov 20, 2008

Stock Market Rules Do the Unexpected

11/20/08 - The New Republic by Clay Risen   --> Source

[edited] Normally, this would be a great moment for buyers, with the potential to boomerang the market upwards. But there are a few reasons why it’s a little too early to expect such an outcome. First, as the Reuters article notes, many institutional investors are barred from buying stocks below $10, which means some of the only people left with cash on hand are unable to participate.

In the spirit of "No good deed goes unpunished", I suggest "No mindless government restriction goes unused". Politicians are not usually analysts or businessmen, and they like rules that are simple, "obvious", and often stupid.

Read more ...

Here is a disastrous consequence to a minor but mindless rule. Stocks that trade for less than $1 per share (penny stocks) are usually considered "cheap" and risky, and many are. The low price is arranged by the company to make 100 shares affordable to the people who want to invest with only a little money.

Laws that force "prudent" investing stop many institutions from buying penny stocks which they wouldn't buy anyway, and they go further to prohibit buying stocks priced at less than $10 per share. These laws require buying "quality" stocks, and they associate quality with price.

Actually, the price of a share of stock is arbitrary. It depends on what piece of the company is represented by a share of stock. Warren Buffet's company Berkshire Hathaway sells for more than $70,000 per share. It seems that he likes it that way so he does not have to deal with small investors.

It is common for companies to "split" their stock if the price goes too high, so that ordinary investors can buy the usual 100 shares. Say the stock is priced at $80/share. The company issues a "4 for 1 split", issuing 4 new shares to each owner of an old share, and taking back the old shares. The new shares are worth $20/share. Nothing has changed except each old share has been cut into 4 pieces.

There is also a "reverse split" where the company collects 4 shares and issues 1 new share, which then has a market price 4 times the old price. They have glued four old shares together.

The $10 rule is based on appearances, so that congressmen can say that they passed laws to require prudent investing in quality stocks. Actually, quality is not directly related to stock price. In the current financial crisis, part reality and part panic has sent the stock price of many quality companies below $10 to bargain prices. Many institutions who can analyze their true worth could start buying to support and raise those prices, except for this rule.

I fear the other thousands of mindless, general rules that are keeping our society from its best accomplishments.

Nov 19, 2008

We Can Learn From The Savings And Loan Crisis

An economic recovery is based on confidence, which follows from profits earned from a new analysis. The Savings and Loan bank crisis in the 1980's is an instructive example.

Read more ...

"Savings and Loans" were specialized banks that were allowed to invest only in local home mortgages. They had the guarantee of the federal government to pay back their depositors. These banks lobbied for more freedom to make riskier and more lucrative loans. They attracted a huge amount of money under the government guarantee, attracting depositors into high interest certificates of deposit. When the economy had a downturn, almost all of these banks failed.

In this S&L crisis, the government made good on the guarantee to pay back the depositors, and it took ownership of the buildings and assets backing up the failed loans. This is similar to our current financial situation, both in cause and effect, but now bigger and through the mechanism of making failed housing loans.

Amy Alkon at AdviceGoddess quotes Nicole Gelinas at City Journal about how the Saving and Loan crisis in the 1980's was resolved.

[edited] Consider what got us out of the savings and loan crisis of the late eighties and early nineties. William Seidman was head of the FDIC in the eighties and of the federal Resolution Trust Corporation, which handled the S&L aftermath. The U.S. government closed down failed S&L institutions and had to sell off their holdings.

These holdings consisted of $600 billion in diverse assets, including office buildings, hotels, golf courses, and apartment complexes. Seidman said “There was no real market for such assets. We decided we had to create a market. We said, we’re going to start selling these properties at whatever price we could get.”

Private owners of similar assets howled "You’re driving the market down". Congress was critical. "Congress asked us to keep the assets for five years to get prices up. I said if I’m sitting here just waiting to sell my assets, the price isn’t going to go up." Selling initially at distressed prices was “the only way we could get it done. We began to sell.”

Investors who bought assets at rock-bottom prices found that there was real value there, which encouraged investors to purchase more of the assets, increasing demand and raising the prices at future sales. Within a year, many formerly distressed properties approached 70 percent of their original values.

Investors, including large institutions, have a pragmatic and fearful follow-the-leader mentality. Many institutions in the current crisis failed to do their homework, to individually value the Mortgage Backed Securities (MBS) and the more synthetic and dangerous Collateralized Debt Obligations (CDO) which they bought. They accepted the market price and the opinions of rating services (Standard & Poor's, Fitch) who themselves did little investigation before assigning AAA (very safe) ratings. The government was buying these or similar bonds, so this and the AAA rating was good enough for investing institutions.

Today, all of the housing assets are questioned, and the MBS and CDO bonds based on them. They don't have a value because they are painted by the same brush. It doesn't matter that analysis shows some are good and some are bad. Trusted institutions already did a worthless "analysis", so how can one trust an analysis now? The same investors that happily bought MBS bonds when everyone bought them, now won't buy them at any price because no one else is buying them. This is follow-the-leader.

The only way out is for the owners of these questioned bonds to do a careful analysis and sell some of those bonds for any price available. After some time, when those buyers have profits on the purchase, others will believe the analysis and will be willing to pay more. Analysis and profits go together, and only new profits from those bonds will encourage a higher price and reasonable valuations.

This sets the timescale for a recovery. It won't happen faster, and further government mistakes will make it slower.

See We Guarantee It to read how government guarantees and a huge off-budget loan operation called Fannie Mae and Freddie Mac lost $650 - $1000 billion and produced our current recession and bank failures. It is a long post, but only a few words per billion dollars lost. We learn again, that if you want a huge crisis, you need the wisdom and power of government.

Economics in One Lesson: The Lesson

Economics in One Lesson
11/19/08 - Henry Hazlitt (1946) at Hacer.org (pdf)

These are the simple facts you need to know about economics. But, you say that you don't need to know? That is why you let politicians ruin the economy and steal from your future. Henry Hazlitt's plain, short, and important book is available free in the PDF file at the above link, or purchase it at Amazon. Short chapters cover all the details.

[edited] Economics is haunted by more fallacies than any subject known to man. This is no accident. The difficulties of the subject are great enough, and they are multiplied a thousandfold by the special pleadings of selfish interests.

Every group has interests antagonistic to all other groups. Some public policies benefit everybody in the long run. Other policies benefit only one group at the expense of all other groups. The group that benefits by such policies has such a direct interest in them that they argue for them plausibly and persistently. The group hires the best buyable minds to present its case. It will either convince the public that its case is sound, or so befuddle the argument that clear thinking becomes next to impossible.

A second factor spawns new economic fallacies every day. People see only the immediate effects of a given policy or its effects only on a special group. They neglect to ask what the long-run effects of that policy will be, not only on that special group, but on all groups. It is the fallacy of overlooking secondary consequences.

Priorities in Healthcare per Healthcare CEOs

11/19/08 - DrWes   --> Source

Dr. Wes comments on how to fix healthcare, as proposed by a board of healthcare CEO's and Sen. Max Baucus (D.VT). The difference between "should" "could", and reality. [edited]

Use the "bully pulpit" to fix obesity.
Nice. Tell people to stop being fat. I'm seeing an efficient use of doctor's time here, aren't you? And clearly this job is too difficult for the healthcare companies to take on themselves. Make this the focus of the surgeon general and be sure to increase the PR spin about obesity.
Tort Reform - use the vaccine model to reduce malpractice.
Best of luck. Remember, it's the lawyers who write the playbooks. [Vaccine producers stopped making vaccines because they were being sued out of business.]

Define and Measure Value - measure desirable outcomes for most common diseases

Look for more check lists and "quality measures" to be tracked.
Payment Reform - Reward preventative care and evidence-based care and no longer reimburse inappropriate, unnecessary, or wasted care.
Can you say more "Pay for Performance"? In other words, continue covert rationing efforts and care denials as well as renewed efforts to "discover" waste, fraud, and abuse in the system. [If we don't pay for it, they will go away. Did you follow the checklist? Did you do anything not on the checklist?]
Build the Health Care Workforce - Focus on primary care, increase registered nurses, nurse practitioners and allied health professionals, and doctors.
Oh, they almost forgot the doctors.

Nov 18, 2008

Woohoo! Free Hamburgers! With Bacteria

11/18/08 - WhiteCoatRants   --> Source

[edited] The Centers for Medicare and Medicaid Services says the superbug bacterium Clostridium difficile should be so uncommon that it won’t pay for the costs of treating any disease associated with it. [They say it is introduced by bad hospital practices.]

Well if you live in Arizona right now and are eating a hamburger, chances are about 50/50 that you are chewing on some C.difficile right now. An article in MSNBC reports that more than 40 percent of packaged meats in three Arizona chain stores tested positive. It was in every type of meat tested, including uncooked ground beef, pork and turkey; pork sausage and chorizo; and ready-to-eat products including beef summer sausage and pork braunschweiger.

Specialists from the CDC said the connection between the presence of C.difficile bacteria and infection has not been established, with not enough evidence about food transmission to warrant public alarm.

Not enough evidence? Are they serious? C. difficile is spread by the fecal-oral route. C.difficile has to make it out of one host’s colon and into another host’s mouth in order to cause an infection. Meat already has the C.difficile contamination out of one host’s colon. Consumers are putting the meat into their mouths to “savor its flavor.” I’m not a specialist from the CDC, nor do I study C. difficile, but is there something I am missing here?

Nov 17, 2008

Franken Sues Again For Votes

11/17/08 - PowerLineBlog by John Hinderaker   --> Source

[edited] The real problem in our elections, of course, is not the tiny handful of ballots that might be rejected incorrectly, it is the much larger number that are cast illegally.

This year, around 25 percent of all the ballots cast in Hennepin County, where Minneapolis is located, were by voters who registered at the polls. No one will ever know how many of those votes were illegally cast by illegal aliens, felons, or people who also voted in other precincts or other states -- all of which are absurdly easy to do.

No doubt, Al Franken benefited from thousands of illegally cast votes. But there is no way to connect a particular ballot with a specific illegal voter, so it is hard to see how these illegalities can ever be remedied. Many people fear that Al Franken will steal the election in the recount process, but I think it's much more likely that he stole it on November 4.

The Sperm-Supply Problem

11/17/08 - Freakonimics by Daniel Hamermesh   --> Source
Supply and demand is upset by possible liability.

There’s a shortage of sperm in Britain! Apparently, Britain needs donations for about 4,000 women per year; to reach that number, about 500 sperm donors per year are required, while only 300 are currently registered.

Things were fine until 2005, when a law was enacted allowing children of sperm donors the right at age 18 to discover the identity of their father; simultaneously, the number of women who could use the same donor’s sperm was limited further.

Nov 16, 2008

How dare they limit their patients clients!

How Dare They!
11/16/08 - 11/09/08  OhioSurgery by Jeffrey Parks MD

[edited] This is amusing. Public defenders in several states are suing to limit the number of cases they take on because of ethical concerns that the quality of legal representation is compromised by the current overwhelming workload. How dare they? A highly educated professional class that provides a necessary and free service to the community expects to deliver that service on their own terms.

I seem to recall another profession that provides an essential service to its community but is forced to see three times as many patients clients each day just to make ends meet. They spend less time than they would prefer with each individual, and therefore rely more on specialists and proceduralists to "figure out" what the patient's client's problem is, driving up overall costs.

Surely, we would not entertain the unfathomable notion that if public defenders and primary care docs were better paid, the quality of work provided by each might be better and, in the long run, cheaper.

Nov 15, 2008

Health Insurance is Not Health Care

Health Insurance is Not Health Care
11/15/2008 - InsureBlog by Mike Feehan

[edited] High health insurance premiums result from high health care costs. If health care were not expensive, health insurance would not be expensive. If the cost of health care were not rising, the cost of health insurance would not be rising. The cost of health care is the deeper problem.

High health care costs are not lowered by clever ways to shift costs to somebody else via insurance premiums. Insurance is inherently a cost-shifting device, whether private or public, sometimes decreed by politics. It is fine to seek the best and fairest way to allocate health care costs via insurance premiums. But even the optimal manner of setting premiums won't reduce health care costs by a nickel.

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Lack of Competition in Health Care Insurance
06/11/09 - Easy Opinions -> St. Louis Post-Dispatch by David C. Rose

[edited] Medicare is a good deal partly because the government drives a hard bargain with health care providers. Medicare offers artificially low payments. No one insurer could do this in a competitive market of many insurers.

Providers shift the unpaid Medicare costs onto everyone else. In other words, the lack of competition in today's market leads to higher insurance costs for people who aren't old enough to qualify for Medicare. Extending Medicare-like insurance to everyone won't work, because no one will remain to pay the shifted costs.