Bill Walsh, RIP

Bill Walsh, the great coach of the San Francisco 49’ers, died yesterday. I don’t look up to that many sports figures as being heroes, he was an exception. You can read plenty of eulogies on the web about how he changed the 49’ers, San Francisco, and the NFL. Here’s what he meant to me.

When Walsh became a head coach in 1979, he also became a pivotal figure in the NFL culture wars. Up to that point, the dominant values in football were toughness and strength, by a long shot. Players had to be tough guys, and the coach had to be a tough guy, with all the macho posturing and baggage that brings.

Walsh changed all that. Not that physical toughness ever became unimportant – football will always remain physical – but Walsh showed that intelligence is also critical, and that it’s possible to win with class and respect. His success was a marked signpost in the decline of the old-school coach whose leadership skills consisted of tearing people down.

It’s hard to fathom now, twenty years later, but at the time, Walsh’s teams were despised for winning by being smarter than the other team. They were dogged by the epithet of “finesse team”, as if there was something unfair and unmanly about trying to outwit your opponent in football. Of course, the charge was both true and pointless; they had finesse, but they were also physical; his teams always had a top-notch defense, and it’s hard to play defense without being tough. But even on defense, his teams were always well-prepared, and played with their heads.

There has been much mention of the large coaching tree that Walsh fathered – many of his assistants became successful head coaches in the league, as did many of their assistants. It’s worth looking at other dominant coaches of the time to see how their descendants fared. Mike Ditka, Walsh’s archenemy in the toughness old school, had just one successful assistant. Bill Parcells, a few. Joe Gibbs, not really. Walsh had more successful proteges than all of them put together. The best explanation of this that I’ve heard attributes this to the fact that (i) Walsh placed great value on being a teacher, and (ii) getting back to the culture wars, it’s easier for people to develop in a trustful, respectful environment. If you’re an authoritarian my-way-or-the-highway kind of person, or a control freak who insists on managing every last detail, or you rule through fear and intimidation, you don’t leave your subordinates much room to grow.

I enjoy observing sports as a reflection on society, and here Walsh epitomized some of the promising but contested changes in American society – that you can succeed in a competitive environment by treating people with respect, by looking for and demanding their best, and showing class throughout. I always thought and hoped that was the right way to do things, but it was not clear to me at the time that it would turn out that way. It was comforting, and even inspiring, to see such a public figure succeed with those values, and for that I’m grateful. Bill – thanks. It meant a lot.

Economic Rewards and Morality

Question for the day: is it fair to discriminate against stupid people? Case in point: the Colorado Lottery, often described as a “tax on stupid people”, has done good things for the budget of the state. So it’s been good for me – at the cost of making quite a few poor people poorer. Yes, they play the lottery of their own free will – I understand that – but still, is this really fair?

(On a side note, I have all kinds of cynical thoughts about how weird is the anti-tax mentality of our times laying down side-by-side with our love of lotteries, but I’ll save those for another time.)

Turn the question around, somewhat, and it becomes: “Is it fair that intelligent people earn more money than less intelligent people?”

If you have a hard-core, utility-based morality, then the answer is obviously yes. Intelligence lets you be more productive, and more productive people deserve to be paid more. And this answer is also correct in the sense of asking which morality will optimize our economy. You get better economic performance by making rewards correlate with production. Our society benefits greatly by rewarding production.

Let’s apply the question back three hundred years, when the average person was a peasant, and the most important quality to have was not intelligence (although it was never irrelevant) as much as physical strength. Was it fair that stronger people had an economic advantage? In our time, of course, we would not say that one person deserves more than another because he or she is stronger. Do we in the present say that sort of discrimination would have been fair three hundred years ago? Possibly; maybe even probably, but I don’t think we would feel good about it.

I guess a lot of it has to do with the circumstances. If some person A was strong because he/she took care of him/herself, and person B was weak from sitting around all day, getting drunk, and eating marshmallows, then we probably wouldn’t have too many qualms about declaring A more deserving than B. But if the differences were beyond their control, then what?

Beats me. It’s something I wonder about.

The Rich get Richer, and …

My company offers a 401k program, matching up to 3 percent of your contributions. They also have an employee stock purchase plan, whereby you can withhold up to 15 percent of your annual income, and are guaranteed at least a 15 percent return on that withholding. Combine these two, and that’s a cool five percent raise over your paid salary, above and beyond what your 401k money will earn by the time you retire.

Of course, there’s a catch, and the catch is that you have to be willing to postpone part of your salary. The stock plan is roughly equivalent to delaying two paychecks a year for six months each. Getting the full match on the 401k means you have to live on 94% of your salary, and you don’t see the money you gave up until you’re retired. In other words, you need to be well off –certainly not living paycheck-to-paycheck – to enjoy these benefits.

That’s just the start. Having at least some slack in your finances is self-perpetuating in many ways. You can buy higher quality merchandise, lowering cost of ownership over the long run. You’re more likely to live in low-crime areas. You can afford preventative medicine, and preventative maintenance. You can easily invest in education to better your job. Not to mention that better education often means wiser financial choices. I’ll stop there, but presumably that list could be extended for quite a while.

The book Shortchanged made me think about the flip side. If you’re poor, and you have to participate in the fringe economy because you have bad credit, or live in an area with no access to mainstream financial services, then the cards are stacked against you. You pay a hefty markup simply to get access to your own money.

Oh, let me give one more example of how it pays to be affluent, one that the book touches on a little. When we bought our house, the closing consisted of us wearing our hands raw signing all these documents and acknowledging all sorts of fees. Needless to say, we did not read everything we signed in detail, and I’m sure we got ripped for fifty bucks here and there a few times. Oh well, we survived. But I never worried about any sort of wholesale fraud. I double-checked the monthly payment against the interest rate we were quoted – it matched close enough, and then we started signing left and right. Now those documents we signed certainly could have had nasty clauses to rip us off big-time. But I knew they didn’t. And I knew that because it was a mortgage company that dealt with middle-class customers, and we had a middle-class realtor who lived off of middle-class customers. No company has a business plan that relies on swindling middle-class customers, because they will not stand for that sort of thing.

Contrastingly, there are mortgage companies whose business consists in large part of swindling or otherwise taking advantage of lower-class customers. If you’re poor, it’s much harder to get a fair deal, and you have to exert more effort to make sure you don’t get ripped, possibly turning down good deals because you’re afraid there might be fine print.

I understand why things are the way they are, and that we have a freewheeling, every-man-for-himself environment. That personally works out well for me, since I’ve learned how to navigate it (and through my parents’ efforts I was fortunate enough to start from an advantageous position), but I don’t always think it’s fair.

Urban Wildlife Watch, Encore

Jogged the Big Dry Creek trail, west of Wadsworth this evening, and saw a beaver! Now, we'd seen the dams in the creek, so their existence shouldn't have been a big surprise, but it was still quite amazing to see one in the flesh. Good size too, maybe three feet long excluding the tail. Googling around, I see that the city of Westminster is beginning to get concerned by the beaver population -- destroying trees and flooding the trails. I can see that; actually that part of the Big Dry Creek trail is turning into a lake.

Still, I can't quite believe that beavers live less than a quarter-mile from my house.

I stopped and watched the beaver for a few minutes, until it swam out of sight. Resumed jogging, and around the next bend in the creek there was a great blue heron, about a hundred feet away. For the next five minutes I watched it; it watched me, until it was time to go.

Urban Wildlife Watch

Sunday, July 8 - Jogging on the Big Dry Creek Trail, Wadsworth to US-36.
Saw several mallard duck families. Scads of rabbits and prairie dogs. A few cormorants; not sure what variety. Unidentified raptor and a great blue heron. Finally, a coyote trotting just below the railroad tracks parallelling Wadsworth.

Thursday, July 12 - driving down Independence.
Saw a fox crossing the road.

Sunday, July 15 - Jogging on the Big Dry Creek Trail, west of Wadsworth.
The usual ducks, rabbits, and prairie dogs. Saw two black-crowned night herons (http://www.mbr-pwrc.usgs.gov/Infocenter/i2020id.html), assuming I read the field guide correctly.

Mandatory Consumer Education

My wife was at Target a few weeks ago, and purchased items worth $4.76. She dropped $5.01 on the counter, and blew the mind of the cashier, who had already punched in $5.00. That doesn’t surprise me these days, but sometimes it can still annoy me.

It seems like an awful lot of people in this country make poor financial decisions. I wonder how much of that is due to either lack of education or lack of good role models. If your parents use pawn shops and payday loan outlets, do you learn that that’s the way to go? I know better education won’t solve everything, but I can’t help but think that it would do a lot of good.

If I were king, I would make some kind of consumer mathematics requirement for getting a high school diploma. Either you pass a course, or you can test out of it. Or maybe the course is only required if you aren’t taking college-prep math.

I was looking at the Colorado K-12 academic standards (http://www.cde.state.co.us/cdeassess/documents/olr/k12_standards.html), and there are a few tangential points in the mathematics and economics sections, but nothing to indicate that this is a priority.

Isn’t that weird? Now I’m a liberal arts kind of guy, and I think the more you learn, and the broader your range of learning the better, but it seems to me like our society will be a lot better off if people learn how to handle money wisely rather than what they learn (and often promptly forget) in a lot of high school classes. Even restricting the subject to mathematics, how much does anyone really use, say, trigonometry, in their lives? Now, I love trig, and if you need to know the length of a ladder that rests at a 75 degree angle to the top of a ten foot wall, there’s nothing better. But I’ve had little call to use it in my post-graduate life, and the same goes for everyone I know except a few people in technical fields. Ditto for most of the math I learned in high school. Don’t get me wrong – the more people who know trig the better, in my book – but I would rather have even more people know the basics about being an informed consumer.

Thoughts on the Fringe Economy

There generally seem to be two takes on the morality of the fringe economy. It can be seen as predatory, and something that helps keep poor people poor. Alternatively, you can take the attitude that it’s a free country, businesses on the fringe are legal, and nobody is forcing anyone to patronize them. If they’re screwing you, it’s your own damn fault.

Of course, I see both points, and suspect both are true. I can believe that many people are victimized by these industries, and at the same time, many people let themselves get ripped off because they don’t plan well, or aren’t financially savvy, or aren’t disciplined enough and loan money for things they don’t really need.

As I said in my last post, I’m amazed by the proliferation of check-cashing stores, pawnshops, dollar stores, and the like in the past few years. Honestly, fifteen years ago I thought that they would be relics by now, or at least banished to even lower-class areas than they were before. That pawnshops would be oddities to my kids, when they grow up. Instead, the opposite has happened, and they are steadily encroaching on middle-class territory. No matter which of the opinions above that you hold, this can’t be a good thing, right? Since it means that either (i) more people are getting screwed, or (ii) more people are stupid. Not a good sign for America.

One thing I don’t understand. In Shortchanged, the author states that these fringe economy businesses have huge profit margins, exacted at the cost of people who can least afford them, and therefore he proposes reviving usury laws to limit them. And I’ve heard from other sources that these businesses are wildly profitable. This might be a dumb question, but why doesn’t free market competition work to lower the margins? If, say, a rent-to-own location is making a killing by ripping off people, why doesn’t some enterprising soul open a competitor that makes a healthy profit, but not quite a killing? I understand that for the free market to work, you need consumers who are financially savvy, which might not always be the case here, but the end mathematics of rent-to-own are pretty simple: x dollars for a term of y months.

There’s a review of the book on Amazon that I would consider to be the prototypical conservative/libertarian response: (1) if people don’t like the sub-mainstream financial services, they shouldn’t use them. (2) These businesses have a right to charge high fees to recoup their expenses. (3) They employ many people in low-income areas, and so are a force for economic good. The unstated, but implicit assumption is (4) these are legitimate, honest, legal businesses, so get off their case.

Of course, you could summarize that review with “I didn’t read the book, so I will fall back on my pre-formed opinions.” In fact, Karger addresses (1), (2), and (4) in detail, and (3) is an example of the “broken window” fallacy (see http://en.wikipedia.org/wiki/Parable_of_the_broken_window for a description). As for (4), if you really believe that pawnshops et al are completely on the up-and-up, and have no need of more inspection or tighter enforcement of existing anti-fraud laws, then I don’t know what to tell you. Actually, Karger really makes a compelling case here. So much of our tax money flows through these institutions (via entitlements payouts) that we will all stand to gain if we can reduce the cut that these places take.

I have a few more thoughts here, but will break those out into separate posts.

Scooter Libby Gets Pardoned

I know, I know, technically, his sentence was commuted. He’s still on probation, and has to pay a $250,000 fine. Ahhh, a fine. Considering that his legal fund, all generated by conservative supporters, ran into the millions of dollars, it’s severely doubtful that he will pay a penny out of his own pocket. I think we can call this a pardon.

From here, the choice of commutation rather than outright pardon looks to be typical Bush – Scooter is pardoned de facto, but Bush gives himself a flimsy moral shield to claim that he still respects the law. Gutless, and strange too, because the “compromise”, if you will, probably costs him among Libby’s supporters, being short of the full pardon, but still outrages anyone with a fundamental respect for the law.

But honestly, I myself am less outraged than I probably should be, because (i) it’s hardly surprising, and (ii) it’s better to have this stuff in the open. Let Bush display his contempt for the law in public. Bring it all out, make sure everyone knows exactly the kind of man he is, and we will have a better chance to contain him and at least limit the damage until he’s gone in 2009.

Hey, let’s quote from George W. Bush himself: “I don't believe my role is to replace the verdict of a jury with my own, unless there are new facts or evidence of which a jury was unaware, or evidence that the trial was somehow unfair.”. In his press conference, Bush stated that the trial was fair and that the jury did their job … draw your own conclusions.