• Have you seen Jonathan Weber's series on running a small business?  Good stuff on a website (The Big Money) that has underperformed.  Here's an entry on raising small potatoes money, and here's one on financing your obligations through, gulp, credit cards. 
• ProPublica sounded like the worst idea in the world - long form, non-profit, investigative journalism (i.e., making old media's loss leader your break even business model) - but they got three stories on page one of the WaPo last week, and this is a useful corrective on how much AIG is costing the government.
• When I was a New Yorker, Old Gawker was a time killer of choice.  You never know when these people will up and quit, but The Awl is Old Gawker's unemployeds killing time before they consent to being hired by Vanity Fair and Hamptons Style again.  Rounding into form, and Nissan is now advertising.

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Particularly summer associates, check out Corporette.  Some advice transcends gender: how to leave a summer job, tips on business lunches.  Just leave some of the TPS reports for me, 'kay? 

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As readers of The Glom know, my twin sons are trying to earn all 121 Scouting merit badges. This is a goal that was suggested to them by their first Boy Scout leader after he saw how diligent they were in fulfilling their assignments. Recently, we learned that earning all available merit badges is extremely unusual. Troy Pugh is attempting to collect information on every Scout who has ever accomplished this goal at Merit Badge Knot, where he writes, "it has been said that fewer than 100 scouts have ever earned all of the merit badges that were available to them."

We have been fortunate to live in a community that is very supportive of the twins. As a result, rather than serving as the counselors on most of their merit badges, we have encouraged the twins to find (or helped them to find) other adults who have expertise in the subject of the merit badge. This has been a great learning opportunity for the boys, who have interacted with all sorts of people.

We are now in the home stretch, working on the last 20+ merit badges, and as you might imagine, many of these are on subjects for which counselors have been more difficult for us to locate. Which leads me to the topic of this post: American Labor. My neighborhood is filled with accountants, lawyers, doctors, professors, and entrepreneurs, but no labor leaders. We probably have some union members, but none have volunteered as counselors for the American Labor merit badge, which means that I am drawing on my own blue collar upbringing, a love of American history, and a class taken long ago in Labor Law to serve as the counselor for this merit badge. Given the recent troubles in the automobile industry, it's hard to imagine a more opportune time to study this topic.

One of the options for the merit badge asks the boys to "watch a movie that addresses organized labor in the United States." The American Labor pamphlet recommends Working Stiffs, Union Maids, Reds, and Riffraff: An Expanded Guide to Films About Labor for reviews of 350+ films about labor issues. I also found a not-very-active blog by the book's author on labor films and globalization, including a recent plug for State of Play. (Probably not what the Boy Scouts had in mind for this requirement.)

Although all of this information is interesting, it's a bit much for me to process. I would rather just cut through the noise and find the one film that would best fulfill the spirit of the merit badge. Any suggestions?

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The Today Show is here today, filming my colleague Michael Goldsmith, who is battling Lou Gehrig's Disease (Amyotrophic Lateral Sclerosis). Inspired by Michael, Major League Baseball will commemorate Gehrig's famous "luckiest man on the face of the earth" speech by reading his words during the seventh-inning stretch at all Major League ballparks where games are being played on July 4, 2009. The background story on that event is here. A great work by a great colleague ...

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This is how I spent Saturday morning ...

One of my 12-year-old twins organized a cleanup of a stretch of the Provo River Parkway. Among other things, I noticed the high density of garbage under the overpasses. At first I thought this might be a result of the passing cars, but on further reflection -- and closer inspection of the site -- I am pretty sure it has more to do with the fact that people are concealed when they walk under the overpasses.

"Character is what we do when no one is watching."

So that's one twin to Eagle and one to go. In addition to becoming Eagle Scouts, both of these young men are striving to earn all 121 merit badges. They currently stand at 90 apiece (though, surprisingly, they don't have all of the same ones), with several others close to completion. It's amazing what you can accomplish when you work on something a little every day. Most of the credit goes to their mother for that kind of discipline.

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This semester, I am teaching a seminar on liberty. The first part of the course examines different conceptions of liberty; the second part applies those ideas to a number of contemporary legal issues. (If anyone has taught a similar class before, I’d appreciate any suggestions). Naturally, we will cover J.S. Mill’s classic defense of liberty.  But I was surprised to find in Herodotus a much, much earlier defense of the idea that truth is best discovered through the clash of conflicting opinions.

According to Herodotus, when Xerxes first announced to his assembly his decision to wage war against the Greeks, a brave advisor offered a dissenting opinion with the following justification: “[I]t is impossible, if no more than one opinion is uttered, to make choice of the best: a man is forced then to follow whatever advice may have been given him; but if opposite speeches are delivered, then choice can be exercised. In like manner pure gold is not recognized by itself; but when we test it along with baser ore, we perceive which is the better.”

In the event, Xerxes went to war. He was at first “full of wrath” but then recognized the wisdom in his advisor’s words. So far so good.  Unfortunately for Xerxes, and the Persians, divine intervention made clear that the choice was not his to make – he was visited by a series of vivid nightmare visions demanding war with the Greeks and threatening him with dire consequences if he refused.

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• Larry Cunningham explains why the Satyam implosion matters - particularly for accountants.  Jeff Lipshaw is similarly oriented.
• Broc Romanek tell you how to issue your own FDIC covered debt under the Temporary Liquidity Guarantee Program, and also summarizes the latest fiduciary duty case out of Delaware, Kahn v. Portnoy.
• Steven Pearlstein thinks Mary Schapiro is too much of an insider to head the SEC.
• Cass Sunstein!  OIRA!  The dream job for administrative lawyers goes to a dream administrative law scholar.  Now we'll see how he reconciles his minimalist predilections (which value modesty over consistency and predictability) with his affinity for cost-benefit analysis (which aspires to consistency and predictability over all else).  The Volokhs sing praises here.

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One of the things I love about the end of the year is all of the lists. So I spend some time at Fimoculous, which has an awesome list of lists. One list that hasn't yet made it onto Fimoculous is the W$J's list of most read articles. Despite being an avid reader of the W$J, I missed several of these, including the top story, The United States of Mind. What is your favorite year-end list?

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After my freshman year of college, I snagged a dream summer job: assistant to the golf pro at the Eau Claire Golf and Country Club. One of the members of the Club was Mel Cohen, Chairman and CEO of National Presto Industries Inc. "Mr. Cohen," as I called him, died earlier this month at the age of 90.

I knew about Presto before I met Mr. Cohen, of course. When I was a child, everyone had Presto's products, it seemed. Pressure cookers, electric irons, electric frying pans, coffee makers, etc. And I can still remember the first time I saw a PrestoBurger in the mid-1970s. That gadget seemed like magic to me. We also snapped up a FryBaby a few years later.

Mr. Cohen was not a great golfer, but he was avid. Sometimes we found ourselves side-by-side on the driving range, where he would give me tips on golf and life. Funny, I didn't realize until reading his obituary that he was a lawyer. But he was the first person who told me that I wouldn't like living in Washington D.C., something he had tried as a young lawyer in two New Deal agencies, the Office of Price Administration and the Civil Aeronautics Board. He had me pegged as a small-town kid, and he was right.

We talked about business, too. At the time, he was very excited about the golf bag stand, which he had seen on a business trip to England. If memory serves, he was trying to obtain the rights to manufacture or distribute the product in the U.S., but I can't find it in Presto's history, so I assume that didn't work out.

In any event, I haven't seen Mr. Cohen for almost 25 years, but when I saw his obituary, I felt a sense of loss. I always appreciated the fact that he would take an interest in me, even though I could have been nothing more to him than the kid who washed his clubs at the end of a day of golf.

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Harvard's quantitative social scientists appear to spend most of their time devising ingenious R and Stata plug-ins.  Which, don't get me wrong, is really fun.  But sometimes they devote the quantitative workshop to stuff like (this week, in this case) this:

Amanda Cox (who is with the New York Times) ... will present "Open Problems in NYT Graphics". Amanda provided the following abstract:

The New York Times graphics department is a group of about 30 journalists who make the charts, maps and diagrams for the print and online versions of the paper. This talk is a (completely unofficial) guide to some of the problems the department faces on an ongoing basis, including how to represent uncertainty in an accessible way, and how to move beyond something I call "Here is some data:" toward something closer to inference.

Should Wharton's people regret their obsession with finding the new largest prime number?  I think not.  Here's last week's talk at the place where business meets statistics:

In October 2006, the DVD rental company Netflix released more than 100 million user ratings of movies for a competition to predict users’ ratings based on prior ratings. One allure to data analysts around the world was a $1,000,000 prize to the first team to reach a ten percent reduction in root mean squared prediction error relative to Netflix’ current algorithm (our team currently leads with a tantalizing 9.44 percent improvement). However, the modeling challenges and data provide an even larger attraction for many competitors. Due to the size of the data (over 17,000 movies and 480,000 users), the competition has mainly attracted computer scientists; however, there are many modeling challenges (e.g., over fitting) that can benefit from the perspective of statisticians. After describing some of the techniques in use and advances spurred by the competition, I will speculate on some broader lessons of interest to statisticians.

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• The last word on Bear Stearns
• The SEC's big reorg ... of its offices.
• Which banks have survived the last nine years? Via
• Geithner and Bair squabble, and she may be headed for the exits - no surprise, given Bair's go-big-and-see-if-they-give-you-Treasury approach to the bailout, though one expects to see this sort of trial balloon in the WaPo.  Congress won't want her to go, though.
• See art evolve.

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• Bloomberg has filed a FOIA suit to get the Fed to disclose the collateral it is accepting for bailout money.  FOIA requests sent the Fed after Bear Stearns, took 4 months to be resolved  Has to be worse now.  I wouldn't expect a rapid resolution to Bloomberg's suit (even though FOIA requires the Fed to respond in 20 business days).  Via
• Amaranth, the formerly high flying hedge fund, is a just a lawsuit against its prime broker now.  But that lawsuit is still alive, and may be a template for the windup of all the other collapsing hedge funds.
• Two percent of active bloggers live off the proceeds?  Seems high.  Via
• Here comes CA v. GS, here is Felix Salmon with a "nothing to see here" takedown.
• A more active CFIUS in the Obama Administration?  Not if foreign acquirers want to buy financial assets, I imagine. 
• James Suroweicki is blogging, if you haven't seen it.

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As the US government behaves more and more like a private investor, the question of how its market activities should be regulated becomes increasingly important.  One open question is: what are the right disclosure requirements for these activities?  We’ve seen two answers so far.  First, we have the Bernanke/Paulson “trust us” approach.  Second, we have the final bailout legislation approach: lots and lots of reports to various Congressional committees (with, thankfully, one provision for rapidly reporting certain transactions (Section 114(a)) and one provision requiring financial statements (Section 105(a)(3))).   

Why not impose a more established and tested disclosure regime, one similar to the financial disclosure requirements imposed on public companies, on Fed and the Treasury activities in these areas?

Let me provide one example of the pitfalls of letting the federal government make up disclosure practices as it goes along.  What were the terms of the Fed’s investment in AIG?  Were the warrants to purchase 80% of AIG offered at a particular price?  If you go to the Fed web site you can only find the vague press release of September 16, 2008, which does not provide an answer to this basic question about the transaction.  Also on September 16, 2008, AIG filed a Form 8-K that essentially contained the same information as the Fed’s press release. 

But then, in compliance with its ongoing disclosure requirements, AIG filed another Form 8-K on September 22, 2008, when the final agreements were executed.  That filing provided copies of the executed agreements.  And, in Exhibit D, we have, at last, the basic terms of the warrants.  We paid $500,000 to purchase 80% of AIG on September 16, 2008. 

It could be argued that public company disclosure requirements aren’t useful in the federal government context, since no one is trying to buy or sell shares in the Fed or the US Treasury (yet!).  But a mandatory disclosure regime can provide benefits beyond improving the share price accuracy of the disclosing firm.  Disclosures can enhance pricing accuracy for other assets in the economy, and requiring the disclosure of transactions between a firm and its agents is a nifty way to reduce agency costs.

Finally, requiring disclosure might also be an efficient way to reduce fraud.  In an experiment published this summer in the Journal of Empirical Legal Studies, titled “Brandeis’ Policeman,” we found that, even when there are essentially no accountability mechanisms in place, disclosure requirements can reduce fraud.  In our experiment some of the participants were required to provide a brief explanation for their activities.  The participants that were required to provide this minimal amount of “disclosure” proved to be dramatically less willing to engage in fraud-like behavior.

The only question now is where the SEC will need go to file its own 8-Ks.

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Jonathan Adler just pointed to  a statement released by The Amethyst Initiative ("chancellors and presidents of universities and colleges across the United States") relating to the legal drinking age:

Twenty-one is not working

A culture of dangerous, clandestine “binge-drinking”—often conducted off-campus—has developed.

Alcohol education that mandates abstinence as the only legal option has not resulted in significant constructive behavioral change among our students.

Adults under 21 are deemed capable of voting, signing contracts, serving on juries and enlisting in the military, but are told they are not mature enough to have a beer.

By choosing to use fake IDs, students make ethical compromises that erode respect for the law.

How many times must we relearn the lessons of prohibition?

We call upon our elected officials:

To support an informed and dispassionate public debate over the effects of the 21 year-old drinking age.

To consider whether the 10% highway fund “incentive” encourages or inhibits that debate.

To invite new ideas about the best ways to prepare young adults to make responsible decisions about alcohol.

We pledge ourselves and our institutions to playing a vigorous, constructive role as these critical discussions unfold.

Now I may not be in the best position to address this topic, having attended the university that was named the "No. 1 Stone-Cold Sober University in U.S." for the 11th year in a row by the Princeton Review, but I also attended high school in rural Wisconsin when the legal drinking age was 18. And I taught at the University of Wisconsin. Surely all of that is worth some street cred.

My problem with this statement is not the substance. Indeed, the evidence on the effect of raising the minimum legal drinking age seems, at best, mixed and, at worst, quite negative. But if you were interested in starting a public debate, why not lead with this:

The preponderance of evidence indicates there is an inverse relationship between the [minimum legal drinking age (MLDA)] and two outcome measures: alcohol consumption and traffic crashes. The quality of the studies of specific populations such as college students   is poor, preventing any conclusions that the effects of MLDA might differ for such special populations.

Instead, the drafters of the statement cite the development of a "culture of dangerous, clandestine 'binge-drinking'." What part of this culture new as a result of the age-21MLDA? Certainly not binge drinking. Certainly not that binge drinking is dangerous. That binge drinking on campuses is now clandestine? Is that a separate cause of harm?

The clandestine nature of drinking may make changing the culture of drinking more difficult, and if that is what the chancellors and presidents intended, that seems reasonable. But the argument reminded me of Larry Lessig's excellent talk on TED entitled, "How creativity is being strangled by the law." I have embedded the video, and if you go to the end (around 17:36), you will hear Larry talking about the corrosive effect of characterizing our youth as "pirates" for "re-creating" culture by using copyrighted material as building blocks:

The money moments:

You can't kill the instinct that technology produces, we can only criminalize it. We can't stop our kids from using it, we can only drive it underground. We can't make our kids passive again, we can only make them 'pirates.' Is that good? We live in this weird time, in an age of prohibitions. In many areas of our lives, we live life constantly against the law. Ordinary people live life against the law. That's what we are doing to our kids. They live life knowing they live it against the law. That realization is extraordinarily corrosive, extraordinarily corrupting, and in a democracy, we ought to be able to do better. Do better at least for them....

Obviously, the difference between Larry's argument and arguments about the MLDA is the object of regulation (technology/copyright v. alcohol), and perhaps that makes all the difference. But I was struck by the parallels between these two situations. How might that difference lead to different regulatory results? How far does this argument take you -- "You can't kill the instinct that [X] produces, we can only criminalize it"?

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My son has studied German for five years, more or less. I speak that language choppily, but I listen to Schlaflos in München and various German news podcasts, along with an occasional German audio book. My oldest daughter lives in the German House at BYU. But my son wants to increase his exposure to languages other than English and German.

In addition to German, the high school offers Spanish, French, and Japanese. Hmm. Not really what he was thinking.

Perhaps a language class at BYU? BYU has lots of options. The top options on his list, in the order we searched for them: Russian, Chinese (Mandarin), and Arabic. We are still sorting this out, but he is thinking that Arabic would be fun.

Going through this exercise almost makes me want to sign up for a course in the Center for Language Studies next summer. But which language?  After serving a Church mission in Austria, I enrolled in a Russian class at BYU, but I was forced to drop it when it came into conflict with a course for my major. I have always thought Russian would be fun to learn, if I could get to the point of reading Dostoevsky.

I took a course in French during my clerkship in Louisiana, but I didn't retain much. Being in love with cheese and the Tour de France, French would be a logical language for me to study. Then again, Spanish seems more useful in this part of the world. My mother spoke a few Norwegian phrases to me as I was growing up, and it would be fun to learn the "mother tongue" (haha), though my wife speaks Swedish, so we already have a Scandinavian in the family.

All things considered, I think my choice would be Mandarin or Arabic. If you had the time to study a new language, which would you choose?

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