Monthly Archives: December 2008

Auto makers, bailout, moral hazard… Pork, pork, pork.

Reporters say it seems very likely that with GM and Chrysler threatening bankruptcy within the next 60 days “something” will be worked out by Congress to help them.  Some in Congress say that the auto makers are playing chicken with Congress.

Does anybody else have a sense of deja vu?  We already know what it takes to overcome skittish lawmakers’ concerns.  It takes pork. Lots of pork.  That’s what it took to get the $700 billion bailout package through, and that’s what it will take to get the $34 billion auto bailout through.

The warnings about a moral hazard were more prescient than we knew.  I assumed they meant things like “if we bail out the banks, next we’ll see the auto companies at the trough.”  What I didn’t think, but should have, is that once Congressional Representatives are in charge of picking winners and losers, we need to remember that their services and decisions do not come for free.  They are for sale to the highest bidder, and the bids don’t have to have anything to do with the matter at hand.  They are as corrupt as the Mafia Dons.

It’s a shame so many of them can’t ever seem to make a decision based on what is right or wrong or what is best for the country.  It always comes down to what fills their campaign coffers.

Shame on them.

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Lets Get Rid of Terms and Conditions!

The Missouri case of the mother who taunted a teenage girl over the Internet until she committed suicide has created a legal question quite apart from the facts of that case.  Due to where and how it was prosecuted, the verdict may create a precedent wherein the criminal justice system can be used to prosecute civil law cases.  You’ll have to find the details of the case elsewhere, but basically what happened is that when Missouri decided it couldn’t put forward an actual criminal case, the district attorney in Los Angeles prosecuted the case on the basis that the communications went through MySpace’s servers in California, and therefor the mother violated MySpace’s terms and conditions, and in doing so crossed state lines, and blah, blah, blah.

I tell you this to draw your attention to terms and conditions.  We need to get rid of them.  We probably need to completely overhaul our legal system to do it, but that’s ok.  I’m up for the challenge if you are.

Here’s our problem.  We want our corporate friends to be good, so we want to have a legal system that allows us to go after them when they are bad and A) make us whole and B) hurt them enough to convince them to be good.  Unfortunately, that same legal system can be used to abuse them and hurt them when they really haven’t done anything that wrong.  It also gives them, too often, a get out of jail free card in the shape of “terms and conditions” agreements, shrink wrap licenses, etc.

And we’ve gotten into a mouse / mouse trap thing with them.  First, someone figures out how to sue the corporation 1,500 miles from where they are.  So corporations all add clauses to their contracts about where cases will be tried.  Then somebody figures out how to sue them because they got hurt trying to use their knife as a screwdriver.  So corporations all add “fitness for use” clauses to their terms and conditions.  Then somebody figures out how to use children as a legal weapon against them.  So the corporations (Google and many other popular websites have done this) add clauses in their terms and conditions that users must be 18 years or older.  If a 9 year old gets hurt on their site, they are no longer responsible because the 9 year old violated the terms and conditions of the site.  Had the nine year old heeded them, he wouldn’t have gotten hurt.

You know as well as I do that the long terms and conditions agreements on so many things are bypassed as a matter of common practice.  Even when we have to push a button agreeing that we read them, we haven’t read them.  And they know that.  The button is only there because somebody figured out a way to sue them because someone hadn’t acknowledged that they had read the terms and conditions.

We have created an impossible situation for both consumers and corporations.  They cannot possibly predict all of the ways we might come at them and we cannot possibly imagine what limitations have been put on our use of whatever it is we’re using by the terms and conditions agreement.  We are both in a legal quagmire.

The solution is that we need to step back from details and try to find principles to replace them with.  We want our corporations to be good and to treat us fairly.  We don’t want them to take advantage of us.  Likewise, we need to be good and treat the corporations fairly.  We shouldn’t be using a legal system that allows us sneak up on them and “gotcha!” from left field.

Especially for consumer transactions, where legions of lawyers cannot be brought to bear on day to day nonsense, I think nearly all, if not all, legalese has to be banned.  In its place we need standards of conduct.  If there is a problem over where corporations will be sued, lets just make up a standard and write it into the law so it doesn’t have to go into a contract.  Lets acknowledge that search engines and portal sites are obviously going to be used by children, so they can’t write into their terms and conditions that they can’t.  And lets also acknowledge that children are going to use search engines exactly like adults, so we’re going to need some sort of exception to the issue about minors not being able to enter into binding contracts.  Rather than each website having to clarify that they are not responsible for what we do with their site, we need to figure out the principles that can be applied across the board.  Corporations can’t be held responsible when people abuse their sites.  Corporations also can’t build sites that are designed to be abusive or that leave obvious, discovered opportunities for abuse unresolved.

Believe it or not, this idea isn’t unheard of.  It would be quite possible for each state to use vastly different standards for their road signs.  Vermont might like to stick with the black and white rectangular speed limit signs, but New Jersey might decide that speed limits shall be on maps posted on toilet stall doors in turnpike rest areas… and give every unsuspecting Vermonter who couldn’t find a speed limit sign a hefty ticket once they’re half way across the state.  But we don’t.  Rather than create convoluted ways for states to hide speed limits and equally convoluted ways for drivers to figure them out, we’ve created standards… all speed limit signs are black text on white rectangular backgrounds, generally of a certain size, position, and even font.  And it works great.

We can do the same with software, websites, music, electronics, toasters, car seats, etc.  The basic principles are what we need to figure out… not page after page of tiny legalese.

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Is Hillary Right for SecState?

Is Hillary the best choice for Secretary of State?  There seem to be a couple of views about this.

  1. Hell no.  She isn’t qualified to be my dog catcher, let alone Secretary of State
  2. No.  She has achieved good policy cred in the Senate, has obvious leadership skills, would be qualified for lots of jobs, but doesn’t have the level of real diplomatic experience that we need coming off the Bush blight.
  3. Maybe yes, maybe no, but isn’t it a problem that she said Obama couldn’t keep us safe, Obama said she has no international experience, there was that crazy Bosnia thing, they don’t agree on how to handle Iran, etc?
  4. Absolutely.  She is a weighty thinker, an able manager and leader, is well known and regarded around the world, and both she and Obama are politicians first, different second, and whatever they said in the campaign about each other was just negative tactics on both sides and should not be given any credence.

Or some variation of the above.

Personally, I think she has distinguished herself very well in the defense realm, and I would have rathered see her as Secretary of Defense.  I know some others who are cringing that she isn’t staying in the Senate and vying to take the leadership away from Harry Reid, being that she’s a firebrand and he is next to useless.

But at this point we really need to start asking a different question.  There is no longer any point to debating whether or not she is the right person.  Clinton bashers and Replublicans will largely use her appointment to discredit Obama.  But the proof will be in the pudding.  The right question is one we won’t be able to answer for at least six months and that is ‘Is she doing a good job?”

If she does a good job, hopefully our Republican friends and Clinton bashers alike will have the grace to admit that.  If she doesn’t, hopefully the Clinton supporters will have the grace to allow her to be replaced without screeching that she was set up.

Ultimately, I hope she does a great job.  When we look back on this era what we will see is that the 9/11 attacks were dasturdly, but the real damage to our nation was done by our incompetant and misguided responses to them.  We can’t afford another minute of inept foreign policy, let alone an entire term or two.

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Wal-mart should be held accountable for door-buster death

When a Wal-mart employee was trampled to death by a crowd of 2,000 eager shoppers at a “door-buster” sale the day after Thanksgiving, Wal-mart defended its security precautions.  Some people assigned responsibility for the death to the crowd that behaved like “savages”.  Neither of these assertions should be allowed to stand.  Crowd behavior has been studied extensively, risk factors are well documented and predictable, and crowd management imperatives have been known for decades.  Wal-mart, along with many other retailers nationwide, intentionally employ the very factors that create dangerous crowd risks to create a sense of “excitement” and to achieve sales.

Following a tragedy at a concert by The Who in Cincinnati in 1979 in which 11 people were trampled to death while a crowd rushed into a concert, a task force provided over 100 recommendations to prevent such problems from happening.

Among other things, the report identified that a “sense of urgency or anxiety… causing a rush toward an entry point… is the crucial factor which must be removed.”  This crucial factor is exactly what Wal-mart and other retailers have been striving to create for “door-buster” sales.  The term “door-buster” itself recognizes that the goal of these sales is to create a crush of customers entering a store so severe that it literally breaks down the doors.

The “urgency or anxiety” of these sales is created by heavily promoting deep discounts of extremely limited quantities or merchandise.  This creates the incentive for people not only to arrive early and to enter the store quickly, but to find a way past as many other people as possible.  It is a blatant recipe for disaster.

There are a number of ways retailers can prevent death, injury, and damage at these events, but all of them come with costs.  For one, retailers can provide (or be forced by law to provide) enough discounted inventory so that there is no “urgency or anxiety” about being able to get a deal.  For another, retailers can provide adequate crowd control measures (including enough people, enough planning, enough training, enough communications, etc.) to manage even a large and unruly crowd.  It is possible.  Some retailers have addressed the problem so simply by giving coupons to the first so many people in the line before the doors open.  This provides all of the incentive to arrive early while eliminating the incentive to rush.

Any means retailers employ to limit injury at these events will cost money and will, somewhat, reduce their profits but we, and they, have to remember that blood money is always blood money.  If retailers cannot profitably operate safely, then they should not be allowed to operate at all.

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