Carl from Chicago

Business executive interested in history, economics, taxation and energy policy.

Music And the New Shared Commons

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Earlier in the summer I asked Dan if he wanted to see the band PELICAN when they came into town for a show. Pelican is a pretty obscure band – they are an all-instrumental band (no vocalist) and they play using major (not minor) chords unlike most metal acts and have few guitar solos. In linking to wikipedia for this post I noted that Pelican might be broken up as of June, 2012, or at least one of their main founders left.

Pelican is the type of band that gets no radio airplay, as in, ZERO. Their music is nowhere in the popular culture. However, they are a great band and I have all their albums and enjoy listening to them, particularly when I work out.

Dan surprised me by saying “Of course I would like to see them, but I can’t make that date.” I was surprised by him wanting to go immediately until I thought, hey, this might be a reason why he is a big Pelican fan too…

Every so often I “fill up” Dan’s shuffles with new tunes that he uses when he works out. Working out for Dan isn’t what it is for you or me – it probably is an hour long at a pace that would KILL you in the first five minutes. It is also hilarious that Dan has the older generation shuffles, but they still work fine and hold at least 500 MB of songs, which is enough for a workout or trip, and by now they are completely expendable. If you are kind of a shuffle collector too check out the Wikipedia page for the history of the iPod and go down memory lane too (these are a mix of first, second and fourth generation shuffles, the cursed third generation didn’t have the ability to move forward or back without touching a dumb little thing on the headphones and thus sucked).

Thus even though Dan and I don’t live in the same city nor are we around at the same time to listen to music, we like a lot of the same bands, and whether they are (relatively) obscure bands or not, they are in heavy airplay in our respective heads all the time, thanks to the iPod. This isn’t completely new, since people have passed around “mix tapes” since time immemorial, but the atomization of the listening experience is now virtually complete.

If you go to Pandora you can make your own custom playlists – I have Pelican there, too (along with a lot of obscure bands that they link to) and then there are a host of metal and / or hard rock channels on Sirius / XM that play songs that would NEVER get on the radio. There are a lot of great rap / hip-hop stations there too, including some old-school ones that give me a laugh.

On the topic of metal – I saw an interview with Rodrigo Y Gabriela, on the Guitar Center sessions on Direct TV (highly recommended, they also had an awesome one with Social Distortion and now Megadeth doing “Symphony of Destruction”) where this double acoustic guitar band (you need to watch them to understand, also a lot of percussion) said that in every town they have ever been to around the world there is a local metal scene, the only type of music that can make that type of claim.

Radio in Chicago is absolutely miserable – unless I am listening to local sports or perhaps news there is no point turning it on at all – so the choices are Sirius / XM in your car or just hooking up your iPod to your stereo. You can also stream Pandora through your car, as well, if your data plan allows it.

So as mainstream radio completely dies (for rock, at least) it is replaced by a customized format of local and specific choices that are as unique as the listener. Anything you want can be found or acquired. And Pelican fans (along with other obscure bands) can put it on heavy rotation where ever they go. Sometimes as I work out in a big health club I laugh to think about what would happen if they streamed what was on my headphones throughout the club or from the guy next to me who, for all I know, is into music even more obscure.

Cross posted at LITGM

Pay Government Employees When You Pay Suppliers

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Recently the city of Scranton, Pennsylvania (yes, home of the fictional “Office”) was forced to pay employees $7.25 per hour (minimum wage)

As a desperation measure to keep the city’s books balanced

Employees were furious and took the mayor to court, until a “rescue”
plan was put into place where the state gave a one time $250,000 grant and a $2M state loan, enabling the city to pay back the short paycheck. The plan raises Scranton property taxes by 33% over three years.

It is interesting that any sort of pay delay merits a large article in a major news media source (the WSJ), and yet paying SUPPLIERS late isn’t news at all.

The state of Illinois, for instance, is famous for delays to various suppliers, and it hits small businesses particularly hard, since they generally have a lower cash “cushion” to begin with. There has been a periodic scuffle about this issue, but not a long term plan to fix it.

In Europe under austerity it has gotten so bad that there are many cases of business people committing suicide, at least per this article (originally appeared in the NY Times).

The Italian state alone owes more than $90 billion to entrepreneurs. Some have been waiting to be paid for up to two years.

There doesn’t seem to be a compelling moral basis for why any government would routinely pay their own employees regularly while waiting an interminable amount of time to pay suppliers, who are citizens and taxpayers, too. Late payments to these suppliers don’t raise hackles, and in fact is “business as usual”, while delays of even a single paycheck cause howls of protest and are written up in newspapers.

If paying employees late is such a heinous act, then apply that same logic who provide services to the government but AREN’T government employees and treat them with respect, as well. Failing that, pay both the employees, the elected officials, and businesses at the same time.

Cross posted at LITGM

Afghan Whigs Lollapalooza After Show

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This year, for the first time in several years, I didn’t go to Lollapalooza. The people I normally go with were exhausted by the heat and the lineup wasn’t that exciting. I am a heavy metal fan, but damn, Ozzy was old back when I saw him with Randy Rhodes (on TV) and that was about 25 or so years ago.

We went to see the Afghan Whigs at a Lollapalooza after-show at the Metro. The Afghan Whigs are fronted by Greg Dulli and he has had a great career, not only with the Afghan Whigs who hit it semi-big in the 1990’s but on his own. It was great to see him back in the spotlight again.

There was a DJ and an opening act and the Afghan Whigs didn’t go on until 12:15pm. But they went right on time at 12:15pm and sounded great. There was a horn section and their heavy groove with hard rock thrown in method was working.

I learned something else – I am too damn old for the Metro. That place was completely packed and you couldn’t see anything unless you wanted to push to the front and battle everyone in a sweatbox. I don’t know if it was oversold or it was always like that (my older memories of the Metro are faded) but there were people everywhere and I basically watched it from the hallway. You’d need to stand in line and rush to the stage and sit through the opening acts to see pretty much anything at all (literally) and, hey, forget that.

On another note Lollapalooza was a rain soaked mess on Saturday. They evacuated it and everyone apparently just poured out into the surrounding neighborhoods, as if that is some sort of “plan” (you’d want to go to shelter, right?) While we were in Wrigleyville checking out bars and waiting for the show we saw an immense stream of completely f’d up people covered in mud just screaming, howling and weaving around. It looked like some sort of mud bomb went off. There was even a guy passed out on the mailbox that his friends were trying to drag him away from (an inside joke for Dan).

If you are interested in the Afghan Whigs or Dulli’s solo work which I’d highly recommend some tracks to download are
– Gentlemen, Somethin’ Hot, 66, Dobonair, Miles Iz Ded, Honkey’s Ladder
– Teenage Wristband, Bonnie Brae, On the Corner (the Twilight Singers)
– Cigarettes (Greg Dulli)

Cross posted at LITGM

(Spain’s) Economy and Reality

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We are hearing a lot more about the Spanish economy in the news. Spain is the latest Euro country to begin having trouble as their nation teeters under too much debt.

As economists debate items like “austerity” and what the European Central Bank should do to fix the issues, these discussions can seem surreal and academic, and they are. The more that the economists talk about arcane topics, the further we get from underlying truths.

Economies have to PRODUCE SOMETHING OF VALUE, and they must EXPORT THESE ITEMS, or CONVINCE PEOPLE WITH ACTUAL CURRENCY TO VISIT. The simplest example of this sort of behavior is looking at a country that produces little of value to the outside world, that no one wants to visit, and how poor that country is. Go to Africa or South or Central America or Asia and visit one of these areas. The situation is grim.

These poor countries are almost always associated with lousy government, because it is human nature to want to better yourself and people everywhere are intelligent. When given a chance, they will work to grow or build something of value so that they can sell it in order to try to lift themselves out of grinding poverty. However, if the country has no infrastructure, no security, and puts punitive short-term economic controls on the country or currency, this limits people’s ability to improve their situation.

In Greece as we move to some sort of end game, the impact of this is on full display. Greece is not like these countries listed above; they have a beautiful, accessible country that should by all means be full of tourists. They can grow crops that are desired by others, and they have some local resources and infrastructure.

However, the items that they lack, such as modern medicines and oil, will soon become dire issues because without the Euro (which essentially is the backing of Germany) and strong exports, they will have a very poor currency on their own and be unable to borrow except at the highest of interest rates, forcing the country to make wrenching decisions.

Greece, like many Euro countries including Spain, Italy and France, has a huge class of governmental parasites. This isn’t efficient government like Switzerland; these are large bodies of individuals that create rules that hamstring businesses and chase exotic goals like wind power while often failing at basic tasks, such as collecting taxes and in the case of Greece, even making ownership of land and transfers clear and simple.

The “value” of these government parasites in a time when the country is unable to obtain fuel and medicines will be immediately apparent at not just zero, but intensely negative, since these civil servants are expensive and will eat up the entire budget. Government, beyond basic elements (which don’t function very well in most of these countries at all), is a luxury, and countries strapped for cash don’t have those sorts of luxuries if they want to grow and thrive.

As I was reading about Spain and the technical discussions of interest rates and central bank interventions, I thought about “what does Spain mean to the world economy?” Spain is a country with gleaming infrastructure, bought by Euro transfers, and endless flats for holiday takers from elsewhere. Their world class companies? Not so much.

I did see this Spanish export above, as I looked around for other tangible measures of Spain in the USA. Beyond that, it gets fuzzier.

Spain deserves credit in trying to turn Euro subsidies into long term businesses, such as their wind industry, which of course died instantly the second the subsidies stopped coming, as I discuss here. Spanish companies also used their low interest rates (courtesy of Germany) to try to expand abroad, particularly in South America, which makes sense given their long term ties there and common language. Unfortunately at least one of those investments went sour as Argentina became the poster child of government intervention and seized their investment in Repsol.

Spain, Greece and the other countries in Europe will get a hard lesson in what you can afford in government, and how important it is to 1) export 2) draw tourists 3) produce something of value. You can’t measure a country based on its consumption, especially when most of it is borrowed and where those funds are spent on non-value added industries like civil servants. This sort of sugar-fueled binge has to end and then the country faces the truth that you are as rich as your ability to add value to the world or draw in someone else who has money to spend it in your country.

My optimism for the US is that when this reckoning comes to the US, as it inevitably must, the US is blessed with abundant natural resources including water and farmland. We have huge deposits of all fuels and minerals once the inane limits are removed of drilling and mining, which would happen immediately should people understand the consequences of living without these items (when we can’t import them). We can turn into a production powerhouse by taking the mass incentives that we put on people to “not work” and our huge spending on government that doesn’t add value (the vast majority of it) and turn that off and re-direct those energies into the private sector. The US can also “change the game” by becoming a magnet for foreign wealth and high energy contributors to come here and enjoy the freedoms that they don’t have elsewhere – the freedom of worship, to have access to firearms and protection, and transparency in government.

So when you are reading the arcane policy discussions about “austerity” and “quantitative easing” and other related items, you need to realize that the “real” economy will soon emerge when the debt-fueled consumption and mis-directed (i.e. government directed, or “guided”) investments cease. Economies can only afford the government that they need, that is useful, and that helps to support growth.

Cross posted at LITGM

End Game In Syria

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Each of the countries in the “Arab Spring” fell differently. Tunisia fell quite quickly, as the army stayed neutral and the government fled. Egypt held out longer, with the government deploying security forces, but the army stayed mostly neutral and in the end the government collapsed and Mubarek is on trial.

Libya was quite different – Gaddafi, the madman, employed every trick of his arsenal (including anti-aircraft weapons on unarmed demonstrators) before NATO intervened, allowing the rebels to fight back and eventually take back all the territory, including his home city of Sirte, which was pretty much leveled. While some parts of the country (Misrata and near the border with Algeria) suffered terribly, most of Tripoli in the west and Benghazi in the east were relatively unscathed. We all know Gaddafi’s fate, to die with a knife in his rear end.

Russia and China learned from Libya, and have blocked all UN attempts to seriously end the strife. Those that pine for the “non-aligned” world and a “post-America” world order have it right on display – since the Russians and China have to be able to use disproportionate and overwhelming force on their own people should they demand real democracy, the new world order is “you can commit any atrocity as long as it stays within your own country”.

Assad is a REAL madman, up there with the likes of the dictators of yore. He employs the most brutal of tactics, which consist of destroying entire areas with massive artillery and helicopter gunships if they are held by the FSA, regardless of civilian deaths. He has a brutal militia of the scum of the earth called Shabbiha that come in afterwards, raping and killing all (men, women, and children) in the bombarded areas ensuring that they are a desolate shell and the local population is either dead or fled. While we watch the Olympics an INSANE orgy of violence is occurring in Aleppo.

Amid intensifying shelling and heavy weapon fire in Syria’s most populated city, a U.N. official — citing the International Committee of the Red Cross and the Syrian Arab Red Crescent — said that about 200,000 people have fled Aleppo over the past two days.

Assad is basically willing to BURN HIS OWN COUNTRY TO THE GROUND in order to save himself. He is also likely carving out a “pure” ethnic enclave along the western coast where his Alawite people can make a final stand, or carve out a “rump state” where they can survive.

Remember that before the Arab Spring started, “official” observers felt that there were no pending revolutions coming in the middle east, especially since Iran was able to put down their protestors successfully. Instead, much of the region rose in revolt.

These same observers also don’t think that the next step is likely to occur – the disintegration of countries. Syria is unlikely to remain one country, in my opinion, when this is done, unless everyone bands to push the Alawites into the sea (possible). There is no “glue” that holds together a people after this savagery, unless they have the willingness to work together. In Libya it appears that through elections the country will hold together (for the optimistic) even though their frontiers are pretty much wide open – but Syria and then likely soon Lebanon and possibly Iraq will fall apart at the seams. Don’t forget that much of Saudi Arabia’s oil is held in a region of their religious minorities, and Turkey is not far away from a possible spark with the Kurds in their long-running war. Also the Palestinian question is likely to erupt in Jordan and elsewhere – while they were the darlings of the “statist” world because Israel made a convenient scapegoat, today they are likely to be an annoying burden to countries trying to fix their own issues.

As we have all heard numerous times, in the rants of the left, that the borders left by the “colonialists” were arbitrary. I believe now these sorts of brutal civil wars like the ones in Syria are going to finish off those borders for once and for all. This won’t be a simple, fair or bloodless process, as Syria is showing us, but it is likely to be final, as final as the eviction of the Westerners in Egypt was in the 1950s. Resources (oil, water) will be paramount, and it will be a brutal struggle, determined primarily by violence and forces on the ground, with resettlement or death a frequent occurrence.