The MJ of Killer Whales

Remember the killer whale at Sea World who killed its trainer in front of a live audience last year? You may recall he grabbed the trainer by her hair and pulled her underwater, drowning her either before or after severing her spine. Apparently he had been involved in the deaths of two other people before that. The whale's name is Tilikum, which in the language of the Chinook means "friend." Well yesterday Friend made his comeback performance in front of 5,000 animal lovers at Sea World in Orlando. No word yet whether People magazine will characterize this -- as they usually do when a celebrity resumes making money after getting caught doing something awful -- as a "triumph over adversity." Comments one observer:

Death by whale is uncommon, but that’s not to say Tilikum won’t strike again. Trainers are extra cautious around the whale, and no longer rub him manually. What he doesn’t get in human touch, he gets in the form of high-powered hoses.

From an objective standpoint, Tilikum’s return to SeaWorld’s performance lineup must be qualitative. He must be an awesome whale, capable of high jumps and the finest beach-ball balancing. Additionally, considering his massive frame, he must excel at the audience whale splash—a fan favorite.

Tilikum is the Michael Jackson of killer whales. Promoters will book him and crowds will come see him regardless of his personal turmoil.

Via First Thoughts

Social security trust fund accounting

Don Boudreax at Cafe Hayek has some great posts on how the Federal government's accounting in regard to the Social Security Trust Fund is fraudulent. He writes:

When sensible people ... note that these obligations are so massive that honoring them in full will require drastic tax hikes or spending reductions, accounting-challenged defenders of the status quo exclaim “Not to worry! The Social Security trust fund holds lots of U.S. Treasury bonds. Those bonds are assets. So Social Security’s obligations are covered!”

But those bonds are held by the same party that issued them, namely, Uncle Sam; the creditor here is one with the debtor.... The bonds in the ‘trust fund’ are no independent source of revenue for Uncle Sam to tap into to meet his Social Security obligations as these bonds would be if they were issued instead by, say, Microsoft or by Her Majesty’s government in the U.K.

Here is an example:

Suppose I have a savings account with $10K, and I empty it to pay for a car. Most sane people would say that I now have a car worth $10K, and a savings account worth $0.

If I were the federal government, however, the accounting would be a little bit different. When I empty the savings account, I would replace it with an IOU from myself, and claim that the IOU is worth $10K. So I now have a car worth $10K and an IOU (from myself) "worth" $10K. All of a sudden, I have assets worth $20K!

At some point in the future, my income falls short of my expenses, and I need money, so I begin selling assets. I eventually get to the $10K in IOUs and have no choice but to sell them. But here’s the problem: because the person who is obligated to make the IOU payments is me, and I am in no position to make those payments, so the IOUs are worthless!

How did this happen? It was never an asset to begin with.

Who are these greedy owners?

I was in an email discussion with a few friends on various labor issues, and one of them wrote this:

If I had a business where I made shoes and could hire 5 American workers to make let's say 50 pairs of shoes per day, why would I send the work to another country where I could hire 10 people to make more shoes for the same price or less? Because I would make more money....mind you what I was making a profit prior to firing the American workers ...it is greed pure and simple...no one needs that much money.

My question to him was, who exactly are these greedy people? After all, I am a shareholder in thousands of companies through my ownership of index mutual funds. Through those investments, I am seeking a return on my money - a profit. It's these investments that provide money to companies to buy machinery and equipment and factories and offices, i.e. capital. Capital is what makes workers more and more productive, and ultimately allowing workers to demand higher and higher wages.

And regarding the "no one needs that much money", again, who is he talking about? I know that I am invested in thousands of companies, and that some of these companies that I own will be incredibly profitable while others will quickly go bankrupt. On average, I will make a return that is the "market return" - as will the average investor - pensioners, 401K participants, IRA holders, etc. So when you see one highly profitable company, that doesn't mean that the investors in those companies didn't have 10 other investments that fared poorly. So again, I don't know exactly who he is talking about.

Just a reminder

Natural disasters do not create economic growth.



If they did, anytime we had a recession, the remedy would be to destroy as much stuff as possible.

My children's first economics lesson

A couple of weeks ago, I was driving around with my two 4 1/2 year old twins, and we drove by an ice cream place that we used to go to sometimes, and my daughter asked, "Why don't we go that ice cream place anymore?"

I explained to them that I thought the prices were too high for what you get. They didn't quite get it, so I said, "Imagine there are two ice cream stores right next to each other, and both stores served the same exact ice cream. However, one store charged $10 for a cup of ice cream, and the other store charged $3 for a cup of ice cream. Which place would you go to?"

First they said that they would go to the store that charged $10. After all, $10 ice cream sounded better than $3 ice cream. But I reminded them that the ice cream in each store was exactly the same, and asked, "Why would you pay $10 when you can get the same thing for $3?" And finally, the light went off.

I asked, would anyone go to the store that charged $10? And they said "no".

Pushing the issue, I then asked, should the ice cream store that was charging $10 be able to force the other ice cream store to also charge $10, so that it's more "fair". And they said "no". First lesson complete.

Walter Williams on unions

"A union's struggle for higher wages is not against the employer, it's against other workers". - Walter Williams on the EIB Network, 2/28/2011

Collective bargaining vs. individual bargaining

As I said here, I have no problem with collective bargaining. The problem is when it excludes individual bargaining.

Dave Henderson makes a similar point in responding to a WSJ column by Bob Barro, who explains collective bargaining this way:

An analogy for business would be for all providers of airline transportation to assemble to fix ticket prices, capacity and so on. From this perspective, collective bargaining on a broad scale is more similar to an antitrust violation than to a civil liberty.

Henderson makes a correction:

An analogy for business would be for providers of airline transportation to vote to force all airlines, even those that don't want to join, to comply with ticket prices that the business association sets. In other words, the key ingredient that Bob Barro misses is the element of coercion. ... The power to be the sole bargaining agent is a power, not a right. There's no such thing as the right to make peaceful people join something they don't want to join.