Monday, July 29, 2002

In rehab.
Last week I was away for a few days. This week my office is being rehabbed. If I see something that can't wait, I'll post. If not, I'll return to a regular schedule next week.

Tuesday, July 23, 2002

The real American airlines?
Ten years ago, candidate Bill Clinton pledged he'd put together a cabinet that "looks like America." It was a (mostly) noble aspiration -- especially in a country that is decreasingly white and slightly less dominated by men. Alas, the one place that I'd always felt never looked like America was an airplane cockpit. On just about every flight I've taken the captain and co-pilot have been white males. Nothing wrong with that, I suppose. The planes always arrived just fine. But it's why I was taken aback during a trip this weekend to Phoenix. I flew four legs on this round-trip United Airlines journey. On the first leg, both pilots were white men. On the second leg, the captain was Asian-American and the co-pilot African-American. On the third leg, the captain was a woman. Ditto for the fourth leg, where a different woman captained the plane and talked to the passengers. You can accuse me of being a bean counter for even noticing this stuff. But I noticed. And I'm glad. Amazingly enough, United looks like America.

Monday, July 22, 2002

Happy Birthday, A.C.
When I arrived in Phoenix around 9:00 on Saturday night, the temperature outside was 102. “That’s incredible,” I said to my cab driver as he took me to my hotel. "It’s not all that bad," he replied. “This afternoon, it was 112.”

One-hundred-and-freaking-twelve. That’s just too hot for mammals like us. Alas, we’re able mostly to tolerate these extreme temps because of one of the 20th century’s most unheralded inventions: air conditioning, which celebrates its 100th birthday this month. Read more about A.C.’s B-Day in this interesting US News story. Then when you’re done, repeat after me, “Hip, hip, High Cool . . . Hip, hip, High Cool!”

Saturday, July 20, 2002

SATURDAY SPECIAL: Picture of the Week!
President Bush (Secret Service code name: Spot) and Vice President Cheney (Secret Service code name: Barney) in their stealthy new disguises.

Thursday, July 18, 2002

Amazon Light.
Check out Amazon Light, a new web services app that makes searching Amazon even easier.

Wednesday, July 17, 2002

Mind the gap.
It’s summertime and the living is easy. I’m sitting here poolside with a new IRS study, "Reconciling Corporation Book and Tax Income" -- and I’m just itching to play another round of America’s favorite summer game . . . Juxtaposing Data™!

For this edition of JD™, we'll need a weensy review of some accounting basics. Corporations report two types of income – “pre-tax book income” and “tax net income.” Book income is how much they tell shareholders the company earned in the previous year. Tax income is how much they tell the IRS the company earned in the previous year. Book income, natch, is usually higher – often for legitimate reasons. But watch what happened to the gap between these two types of income during a two-year span of the late 1990s (the last years for which the IRS has figures.)

In 1996, “active corporations” reported $752.7 billion in book income. In 1998, they reported $816.7 billion – a healthy 8.5 percent increase. Shareholders, we know, were delighted.

Now let’s juxtapose!

In 1996 those same “active corporations” reported $660.2 billion in “tax net income.” Yet in 1998, they reported $650.7 billion – a tiny drop.

(Click here for the full report in PDF format; go to Figure D on page 6 for the punchline.).

“The net effect,” says the IRS study, “was to increase the difference between the pre-tax book income and tax net income from $92.5 billion in 1996 to $159.0 billion in 1998, an increase of 71.9 percent.” In other words, over those two years, the gap between these two income numbers widened significantly. Corporate America told investors it was earning a lot more, but told the IRS it was earning a little bit less!

Which raises the question: Who got lied to – shareholders or taxpayers?

JD™’s guess: Probably both.

Tuesday, July 16, 2002

Is there a doctor in the market?
Yesterday Vitacost – a privately held health products company based in Florida – purchased DrKoop.com, the one-time Internet sensation founded by the bearded former U.S. Surgeon General. That sale gives us a chance to play another round of America’s favorite parlor game … Juxtaposing Data™!

Here’s how much DrKoop.com director Nancy Snyderman received for selling 250,000 shares of company stock (roughly three percent of the company, by my reckoning) on February 18, 2000: $2.7 million.

Now let’s juxtapose!

Here’s how much Vitacost paid for the entire company on July 15, 2002: $186,000.

JD™’s lesson: Sell high. Buy low.

Monday, July 15, 2002

What Bud Selig has to fear: Fehr himself.
Slate’s Chris Suellentrop profiles the most effective labor leader in America: Don Fehr, executive director of the Major League Baseball Players Union. In his excellent piece, Suellentop explains that one reason the union – whose record is already 8-0 under Fehr’s guidance—will prevail again this year is that they hold a rhetorical trump card: “All the players want is to be paid their market value. If the owners aren't competent enough to work within their own budgets, why is that the players' fault?”

Friday, July 12, 2002

Like father, like son?
Bush the Younger risks following the path of Bush the Elder – and seeing his presidency founder on the rocks of economic cluelessness. I still don’t think W understands how much these corporate scandals are spooking the market – or how deeply regular folks resent corruption and self-dealing in the executive suite. If he were smart – and the jury’s still out on that one – he’d pink-slip his inept economic team and replace the whole lot with men and women of stature and experience. (Now is the time for all good men to come to the aid of their country, Warren Buffett. Retrieve your cape from the closet, Bob Rubin.)

But the longer he waits, the deeper the harm he’ll inflict on his presidency. I agree with Washington Post columnist David Ignatius, who today asks:

“What would you say about an administration that issued near-daily warnings about mega-terrorist attacks; abandoned free trade for short-term political reasons; maintained a daily drumbeat of stories about its vague plans for toppling Saddam Hussein in Iraq; had a president who was touched by the same sort of financial legerdemain he so portentously criticized in others; let the budget deficit swell back toward its 1980s levels; and tried to stanch the financial crisis of confidence with a limp speech that made even members of Congress look visionary by comparison.

“You'd say that such an administration would have difficulty maintaining the confidence of investors. And so it has come to pass.”

Thursday, July 11, 2002

What would Dogbert do?
Dilbert creator Scott Adams offers what—to my twisted mind, at least—is the smartest take yet on the scandals devouring Corporate America. Says Adams, “The typical C.E.O. legal defense — and it's a good one — is to place the blame on plain old massive incompetence, not on evil. If I end up on the jury for one of those trials, I'll be torn. On the one hand, I'm predisposed to believing that executives are indeed clueless. But on the other, I'm enough of a weasel to vote guilty just to watch a C.E.O. cry.” Read the whole piece, which appears on today’s New York Times op-ed page. Hey, maybe Bush should make Adams Treasury Secretary.

Wednesday, July 10, 2002

Adios, Paul. Hola, Bob.
The Dow just dropped below 9000. The NASDAQ and S&P 500 just hit five-year lows. And the worst may be yet to come. What should Bush do? Here's an idea: Fire Paul O'Neill -- and make Bob Rubin Treasury Secretary (again). I'm not joking. Rubin would sail through a Democratic Senate. He'd soothe the jittery markets. And he'd provide a voice of reason and experience to a Bush economic team that is woefully out of its depth.

Tuesday, July 09, 2002

Kling of all media.
Today’s must-read is Arnold Kling’s keen analysis of the economics of newspapers. Kling’s conclusion: “The newspaper business is going to die within the next twenty years. Newspaper publishing will continue, but only as a philanthropic venture.” I agree. In fact, I’ve been working on a piece that argues that the majority of media properties in the near future will have one of two business models: NPR or TNR. Under the NPR model, foundations and individual donors finance the operation. Under the TNR (The New Republic) model, a wealthy patron foots the bill and tolerates the inevitable losses. Either way, the venture doesn't make money. And either way, many (if not most) of the actual readers or listeners pay nothing – or at least don’t pay the full freight. It’s free speech with free riders. Kling rolls out a version of this argument as does Dan Kohn, whose essay I discovered through Kling’s article. So since three self-proclaimed mavens agree, this is officially a Big Idea. And guess what? It didn’t cost you a cent.

Monday, July 08, 2002

And you thought soccer was boring.
What happens when it's too hot to hit the ice rink? You throw off your skates, slip on your Speedo, and dive into a rousing game of underwater hockey. As this morning's Washington Post reports, "80 players from as far away as Dallas and Cincinnati risked bursting lungs in two days of intense competition completed yesterday at George Mason's Aquatic and Fitness Center." The winners were hometown heroes, the Beltway Bottom Feeders. Says one optimistic Bottom Feeder about underwater hockey, "We hope to be as popular one day as curling."

Friday, July 05, 2002

Business casualities.
Washington Post fashion writer Robin Givhan draws a connection between casual dress and casual ethics in Corporate America. Her argument is silly, but the piece is pretty funny. (Sample lines: "Why anyone ever trusted men who wore novelty suspenders with $2,000 Italian suits is one of fashion's great mysteries." . . . "Qwest's deposed CEO, Joseph Nacchio, either wears an exceptionally poor toupee or has a natural hairline that looks as though it was drawn on using a Magic Marker and a ruler.")

Wednesday, July 03, 2002

Fingerpaints forever.
I’ve been to several art musuems recently -- and not one included any works by human beings under age 18. Thanks heavens, then, for PapaInk -- an online archive of children’s art. A nonprofit based in Connecticut, PapaInk is animated by the idea that children’s art has “socio-historical value” and that “children’s artistic vision is a vital and redeeming element of the human experience.”

Tuesday, July 02, 2002

Co-dependence Day.
Well, to paraphrase the Beatles, I'm back in the USSA. After a few weeks in England, I've returned to the land of the free and the home of the brave. (Anybody mind if I recite the Pledge of Allegiance?) And as luck would have it, J1Thing's first day back happens to be my wedding anniversary. So in that spirit, here's a quote from divorced rapper Eminem that appears in this morning's USA Today: "I would rather (expletive) be on a coach flight with 'N Sync at the back of the plane in the last row in them seats that don't go back, just stuck there with the bathroom out of order ... than get married again."