In Praise of Vultures

In praise of vultures.

There has been a great deal of criticism of Mitt Romney because the firm where he made his millions apparently closed down some firms. This is viewed as morally questionable and at the very least supposedly goes against his claim that he is a job creator. Romney has responded by saying that sometimes bad things happen and pointing to all the companies that expanded employment under his guidance or the guidance of his firm. But this is the wrong defense. He should be proud of all the jobs he eliminated. Vultures are more important to capitalism than breeders.

People have got it all wrong. The great virtue of capitalism is not that it allows people to invest and create new firms. That is the easy part. Getting rid of jobs is where the other systems fall down. Any fool can create jobs, it is getting rid of them that is tricky.

The reason that capitalism creates wealth is that all available resources are used in the most efficient way possible. Each factor of production--whether physical or human--is employed in the way that creates the most possible value.

This very often involves getting rid of firms. The whole reason that a vulture capitalist can make money by breaking up a company and selling off its parts is that the the product of the company is worth less than the factors of production the company is employing to produce the product. Vultures only attack the dead. If a vulture buys a company that is not worth less than the sum of its parts, after all, it is the vulture capitalist that loses money.

Try being a vulture capitalist with a good company. Want to break up Micro-soft or Apple? Go ahead. You have some buildings and a lot of people that can walk into some better jobs elsewhere. The reason that GM is a bad investment is that the pieces of the company are almost surely worth more than the company as is.

There is something immoral about beating employees out of their pension benefits, but the employees themselves are not always blameless. Part of the reason that GM and Chrysler are so unprofitable is that they spend far more on employee retirement benefits than they do on employees, i.e., the people that actually make something. That is part of the reason why the Obama administration stepped to stop the normal course of bankruptcy: the pension and health care schemes would never have survived a court ordered bankruptcy and the Obama administration was determined to protect its political allies in the auto unions. Now the public is saddled with unprofitable enterprises that tie up billions in capital that could be going to supporting profitable business. A vulture would have sold the pieces of the company that made sense to someone that would have put those resources to better, more profitable, use.

The vultures didn’t fire those people that worked at unprofitable companies, their customers did. Vultures don’t kill companies, customers do. By their willingness to pay more for products from another use of the carcass company’s assets they are telling the world that the company in its existing form is not the most efficient use of these resources, that more wealth could be created by breaking the company up. The ‘vulture’ is just the messenger.

Of course this is no fun for the people that get fired. Which brings us to the other great sin supposedly committed by Romney, saying that he “enjoy[s] firing people.” Of course, what he was referring to is not the actual act of telling people they no longer have a job. He was not literally talking about firing people at all, but being able to tell ‘people’--meaning a a company that produces a good or service that he doesn’t like--that he is ‘firing’ them by taking his money elsewhere.

And so he should. Who doesn’t? Just as who doesn’t hate not being able to fire the provider of an inferior good or service? Who has never felt the frustration that comes with dealing with an incompetent government employee and realizing that there is nothing you can do? The only way that goods and services get better is the constant threat of being “fired” by your customers. I like being able to fire people and make no apologies for it. The vultures of this world do us a great service and are the reason for our prosperity. We could use a few in government.

A report on the rampant and un-prosecuted series of rapes by UN peace-keepers. This happens year after year. Imagine if this were the Catholic Church.

Great thoughts from a fellow deep thinker, Gene Simons. But why does he have to bring fat people into it?

Quote for the day

War is an ugly thing, but not the ugliest of things. The decayed and degraded state of moral and patriotic feeling which thinks that nothing is worth war is much worse. The person who has nothing for which he is willing to fight, nothing which is more important than his own personal safety, is a miserable creature and has no chance of being free unless made and kept so by the exertions of better men than himself. -- John Stuart Mill

Found among the personal possessions of a US soldier who died in Iraq. The original post is here. 

Anne Waldrop

Anne Waldrop talks about being the first successful applicant for a Rotary Scholarship from Millsaps in a decade.

Conservatives are Racists

It is official: everything proves Conservatives are racists. The proposition is now formally un-refutable. There is no conceivable fact that could possibly refute the proposition that conservatives are racists.

Here is the proof. Matt Sullivan argues in the New York Times Magazine today that the reason conservatives are supporting Cain is in order to prove that they are not racists. Of course, their desire to prove that they are not racists is proof that they are racists. By defending yourself against the charge of racism you are proving that you are a racist.

Now, it is not normally thought that defending yourself against an accusation is proof of the accusation so why is it in this case? Because, according to Mr. Sullivan, no one has charged them with being racists. Now, this is a rather curious premise on which to base an argument intended to show that a group of people are racists, which is, after all, accusing people of being racists. How is this rather obvious difficulty circumvented? By subtly switching from the implied premise that no one is accusing conservatives of being racists to the premise that President Obama does not accuse them of being racists. This move allows Mr. Sullivan to rightly point out that Mr. Obama seldom makes the charge that those who oppose him are racists.

It is true Mr. Obama doesn't often make the charge himself. For one thing, whenever he has he has found that it has worked against him. But more importantly, he doesn't have to. The charge is made constantly on the left. Mr. Sullivan himself is exhibit A. What does the left and the establishment press do with the fact that a black man has come from behind to lead the polls and finds himself the darling of the most conservative elements in the Republican party? Write articles about how it all proves that conservatives are racists. Of course it does. Everything does. And if Cain falls in the polls or eventually does not get the nomination it will also prove that conservatives are racists. Whatever happens we can rest assured and comfortably in the knowledge that it will prove that conservatives are racists.

Sensitivity U

The university stands for the free exchange of ideas and thought. It marks itself out as the place where transgressive thoughts are given a fair hearing. And yet, is there any place in modern American life where one must be more careful about what one says and above all the way in which one says it?

We talk all the time about being sensitive. but what we should really be worried about is being insensitive in the nineteenth century sense of not letting ourselves be succumb to pain and discomfort, of not allowing ourselves to be offended and, when offended, not allowing ourselves to show it or make a great deal of it.

Trying to talk about serious issues without ever offending anyone is a fool's errand. You can't do it. If you are talking about anything important, if you are talking about anything important and taking a position that is different from the position that most people around you take, you are bound to offend someone. You can't help but hurt someone's feelings.

After all, what do people care about but the things that are important to them. If you are telling someone that they are wrong about something that they think is very important and vital to the course of the future you are going to have to challenge a deeply held belief and, almost inevitably, offend someone.

We train our students to follow a carefully worked out set of guidelines that allow them to talk about important issues--within boundaries--without offending anyone, or at least the members of the groups whose sensibilities are considered especially important by the choice and master spirits of the age. If you say something that offends heterosexual males or is generally disparaging of southerners you needn't worry so much. I say that last bit not because I think that those groups deserve sympathy or are treated unfairly but to point out that I wish we could treat all groups with such similar lack of concern for their feelings.

I think that such insensitivity would be to their benefit. People who will be honest with you about your own shortcomings do you a favor, though it may not be one that is very pleasant to receive.

And just as we should be less concerned about being offended for our own good, we should be less careful about offending others for our own good. The reason you should take care to avoid as much as possible putting a thought in a way that hurts someone's feelings or transgresses against their cherished beliefs is that they will be less receptive to your argument. Thus, you should be sensitive out for entirely selfish reasons. When you really want to help someone is precisely when you should put concerns about being sensitive aside.

Nurse Jackie and Contagion

Laid up for a final weekend I acquired a "Nurse Jackie" addiction. It has a few too many contrived moments but the actors are just great. One thing I really like are the surprises and how intelligent the characters are. There is a scene at the end of the second season where you see an intervention set up and you are lead along just to the edge of a standard come to Jesus moment where the addict breaks down and admits she is an addict but instead she turns it around and goes on the attack, battling back through overwhelming evidence to make it all their fault. People are never so intelligent and resourceful as when they are in the wrong and know it.

Also saw Contagion. It seems to be a story about a virus that attacks really good looking people. I felt safe myself. Still it was very good. I really liked how it departed from the usual storyline. Not only was virus created by some nefarious corporation or the result of some terrible defense department experiment gone wrong I the character that usually turns out to be the hero, the crusading outcast blogger (blogging described as graffiti with punctuation but I don't that is necessarily true because I have seen so many blogger that they don't know about how to use punctuation at least in my opinion) turns out to be the bad guy. Or not even that. Just a bad guy. There is no one overall plot. It is one of those films where a bunch of story lines go through intersecting on surprising occasions. The main purpose seems to be to imagine what would really happen with a new virus and to imagine the consequences as realistically as possible. I personally think they did an unusually good job of it, even down to the overly-cautious and profoundly conscientious military officers.