Too Good Not to Steal

Robert Farley at Lawyers, Guns, & MOney writes"

"You lose a war against the United States, we sell you fighter planes.  You fight a war alongside the United States, we sell you fighter planes.  You beat the United States in a war, we sell you fighter planes:"

 The best bit is the title of the post. 

Management Expertise in the Private Sector

Let's see: Apple has a $2 billion cost overrun on a headquarters building (now estimated to be a mere $5 billion)

Technology Review reports on a study showing 1 in 6 IT projects have a 200 percent cost overrun.

And Conservatives Wonder Why I Don't Trust the Big Shots

Jack Welch, ex-CEO of GE, and guru of business, has accused the bureaucrats in the Bureau of Labor Statistics of cooking the most recent unemployment rate. 

Prof. Andrew Gelman at the Monkey Cage  reports on an investigation of the integrity of statistics in GE when Mr. Welch was its head.  Seems GE paid a $50 million fine to SEC for accounting fraud.  The graph of earnings under Welch and under his successor is damning in and of itself.

Mankiw and I: CEO/Worker Compensation Ratios

Greg Mankiw, Harvard economics professor and adviser to Mitt Romney, posts a chart on his blog showing the ratio between the pay of a worker and the pay/compensation of the CEO's at top 350 firms.  (I assume the workers are the workers at the same firms, but whether it's mean or median or what, it's not clear--Prof Mankiw gets a "C" for copying the graph and failing to specify in his post.)

The professor seems must struck by the recent drop in CEO compensation--the ratio in 2000 was twice that in 2011.  I'm more struck though by the increase, the ratio has increased 10 times between 1965 and 2011. In the good old days just after George Romney had left his CEO job at American Motors CEO's got roughly 20 times the compensation of their employees, say $100,000 to $5,000; in the bad new days when his son is running for President CEO's in big companies make 209 times the compensation of employees. 

Those Inflexible Bureaucrats

In the hotel business. The NYTimes "Haggler" column covers consumer issues.  Today's is on the problem of hotels charging a "resort" [flat] fee not accounted for in the Priceline bid price.  Lots of resistance to revealing such fees up front--the column closes with this:

"“Most of the hotels charging resort fees have told us that, operationally, they can’t bundle the resort fee into the base rate and then guarantee us that their front desk personnel won’t go ahead and charge it again at the front desk,” he wrote in a follow-up"

When government bureaucrats are this inflexible, they get laughed at.

IBM and India

I grew up outside the "Triple Cities" of New York: Binghamton, Endicott, Johnson City.  The late '40's and 50's were a boom time for the International Business Machine Corporation, as IBM was then known. IBM was based in the area; the IBM country club was the place to go; because Thomas Watson had a profit-sharing plan "IBM millionaires" weren't that uncommon; people who had started back in the 30's and worked for 20 years or so had accumulated a tidy nest egg.  (This was a time when a million dollars was real money.)

Much has changed since then, but I was not prepared for this factoid in a Post article on how many of our international corporations keep secret the number of employees they have in other countries:

"Dave Finegold, dean of the Rutgers School of Management and Labor Relations, estimates that 2009, when the company stopped sharing its U.S. employment figure, also marked the first time the company had more employees in India than the United States"

Factoid of the Day: Median Age of Adoption in Japan

"median age of adoption in Japan is somewhere twenty-five to thirty?"

From Freakonomics on succession of businesses within families. Also interesting Japan is second to the US in adoptions.

What Gripes Me: The Golden Rule

As in this case reported in the Times:

"Deutsche Bank agreed to pay $553 million and admit to criminal wrongdoing on Tuesday, settling a long-running investigation into tax shelter fraud that prosecutors say generated billions of dollars in bogus tax benefits."

"... Deutsche Bank will avoid prosecution for helping 2,100 customers evade taxes through 2,300 financial transactions. The arrangements, which took place between 1996 and 2002, helped wealthy Americans report more than $29 billion in fraudulent tax losses, according to the Justice Department."

Them as has the gold, rules; or at least break the rules.  (I know, Republicans, this is class warfare.  The war of class on the masses. Can anyone guess I'm not in a holiday mood today?)