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The Great Arnold Kling thinks there is a high probability of a two-decade economic fiasco, outlined below.

In the Looting Scenario, what is going to be rewarded is what we call rent-seeking. Basically, over the next twenty years, wealth transfer by government will be much more important than wealth creation–and the amount available for transfer could actually decline. For example, I expect that benefits for the elderly will become increasingly means-tested and savings will be increasingly taxed, to the point where the marginal return to saving will approach zero. If the marginal return to saving is low, and government deficits are high, then capital formation is going to be low. It’s hard to see how you get rapid innovation in that kind of world.

The Looting Scenario is one in which public employees and pensioners have the incentive to just take as much as they can while they can get it. It is a scenario in which people talk about the deficit, and wise heads say we must do something about it, but the only politically feasible approach is to raise taxes. Even so, it turns out that higher tax rates bring in less revenue than projected, because of the incentives to consume leisure and engage in black-market activity.

Seven years ago, it would not have occurred to me that our ruling class would be so bad that the Looting Scenario would be likely. My guess is that, even among libertarians, just about everyone else still has faith that our ruling class will not let the Looting Scenario take place. However, I think it is one of the higher-probability scenarios out there.

It’s airlines meets air time in today’s Sweet 16 battle. In the far corner, wearing blue trunks and sporting a thick Chicago accent is United Airlines! Let’s give it up for exorbitant fees! In the near corner, sporting red trunks and coming straight outta Philadelphia is the Comcastic Kid! Can I get a cheer for inept customer service?!

Now it’s time for you to decide, which company deserves to be treated like a punching bag?

This is a post in our Worst Company In America 2010 series. The companies competing for this honor were chosen by you, the readers. Keep track of all the goings on at consumerist.com/tag/worst-company-in-america. Print the bracket, here.

More bad news on the small business front courtesy of Discover, whose own survey absolutely confirms what the NFIB is saying.

Here you go (via David Goldman):

• The March results were marked by a surge in the number of small business owners who say economic conditions for their own businesses are deteriorating:53 percent of them say the climate will get worse in the next six months, compared to only 37 percent who answered that way in February. Of the remaining respondents, 20 percent said things are getting better, 20 percent said things are the same, and 6 percent are unsure.
• When asked about their intentions to invest in their businesses, 52 percent said they would decrease spending, up from 43 percent in February, while 27 percent said they would make no changes, and 18 percent said they plan to increase spending.
• Little faith was expressed for the direction of the larger economy, as 58 percent said it is getting worse, up from 44 percent in February; while 22 percent think it is getting better, down from 31 percent the prior month; and 16 percent said it’s staying the same, versus 24 percent last month.
• Views on the current economy were relatively unchanged over February:59 percent rated the economy poor, 31 percent called it fair, 6 percent said good, and 1 percent chose excellent.
• Cash flow issues remained largely unchanged:46 percent said their businesses encountered temporary cash flow issues in the past 90 days that caused them to hold off on paying some bills, 47 percent did not have issues, and 7 percent weren’t sure.

What’s stunning is the divergence between what small businesses see, and what we’re about to hear from large companies during earnings season, who will no doubt talk about a rebound and a turnaround and blue skies ahead.

This bifurcation is certainly a huge story to watch.

Now see the full NFIB results >

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The California HealthCare Foundation recently released the results of a survey on electronic medical records and consumer behavior. The survey found that 15% of people would hide things from their doctor if the medical record system shared anonymous data with other organizations. Another 33% weren’t sure, but would consider hiding something.

Here’s the question:
If your doctor had an electronic medical record system that could share your health information with other organizations (but not your name, date of birth, address of Social Security Number) would there any anything you would not tell your doctor?

We’re going to make our poll a little different.

nkNew National Survey Finds Personal Health Records Motivate Consumers to Improve Their Health [CHCF via WSJ Health Blog]

[JURIST] The International Criminal Tribunal for the former Yugoslavia (ICTY) on Tuesday resumed the war crimes trial of former Bosnian Serb leader Radovan Karadzic. The proceedings commenced with the prosecution calling its first witness, Bosnian Muslim Ahmet Zulic. Zulic provided testimony concerning the 1992 attack on his village of Sanski Most at the beginning of the Bosnian war. Zulic testified that his father was burned alive by Serb insurgents and that he witnessed Serbs force 20 Muslim men to dig their own graves before executing them. The prosecution alleges that Karadzic was responsible for coordinating the invasion. Zulic has has previously testified about the general political situation in Sanski Most and about the brutal conditions, beatings, and killings in the detention facilities in which he was held, including in the trial of former Serbian president Slobodan Milosevic. Zulic will be cross-examined by Karadzic, who is serving as his own defense counsel. The prosecution’s 11 remaining witness will take the stand in the coming weeks.
Last week, the ICTY dismissed Kardzic’s latest motion to delay court proceedings, in which he argued that there had been a violation of his right to a fair hearing because the court had rejected previous evidentiary challenges. In March, Karadzic lost another motion to postpone his war crimes trial on charges related to crimes committed during the 1992-1995 Bosnian conflict. Karadzic claimed that a February ruling increasing the remuneration for his defense lawyers should also give him extra time to prepare for his case. Karadzic is defending himself against 11 counts, including genocide and murder.

Over at the must-read e21 site, Chris Papagianis provides an excellent counter to the Dodd-Obama financial reform plan. He prefers an approach devised by Oliver Hart and Luigi Zingales. Here are the key details via Papagianis:

1) Hart and Zingales would use credit default swap (CDS) spreads as a market-based default probability metric. The “spread” or premium on a CDS contract represents the market price of providing a financial guarantee against losses from a firm’s default.

2) In the Hart and Zingales framework, once the CDS spread rises above a pre-specified “critical threshold,” the regulator would force the institution in question to issue equity (offer new stock for sale) until the CDS spread moves back below the threshold.

3) While Hart and Zingales choose the right instrument for their trigger, their proposed remedial step should be strengthened. Instead of having the regulator demand that the institution issue new equity, the debt of the institution could automatically convert into equity. Say a large bank financed $150 billion of assets with $80 billion of deposits, $40 billion of senior debt, $20 billion of so-called junior debt, and $10 billion of equity. When the CDS on this bank surpassed the critical threshold, half of the bank’s junior debt would automatically convert to equity. Instead of having 6.7% equity (15-to-1 leverage), the bank’s assets would be financed with 13.3% equity (7.5-to-1 leverage). If that failed to bring the CDS below the critical threshold, the other half of the junior debt would also convert to equity.

4) The mandatory conversion would enhance systemic stability for two reasons. First, the risk that the debt would convert to equity would be priced into the debt, raising the systemic institution’s cost of capital and leveling the playing field with smaller banks. Secondly, the automatic conversion would eliminate the potential for regulatory forbearance caused by market conditions.

Me: I like this. It doesn’t depend on the omniscience of politically captured regulators, and it doesn’t involve bank bailouts by taxpayers. This would seem to be an antidote to Crony Capitalism.

Capcom has released a new trailer for Final Fight: Double Impact. Mike Haggar screams a lot in it.

After several weeks’ analysis, the National Inflation Association (NIA) has concluded that the precious metals markets are currently being artificially suppressed by paper gold and silver that doesn’t physically exist, risking a major crunch when investors want to convert their paper into gold or silver.

The organization points out that at last week’s Commodity Futures Trading Commission (CFTC) hearings, Jeffrey Christian of the consultancy CPM Group admitted that banks have leveraged their physical bullion by 100 to 1, meaning that for every 100 ounces of paper gold or silver that trade, there could be as little as 1 ounce of physical metals in the vaults backing it.

However, because Christian appeared to brush off any concerns about this situation, saying that "it has been persistently that way for decades," NIA representatives spoke out suggesting that most investors around the world holding paper gold or silver believe they own physical commodities. That is why the organization fears that when these investors decide they want the physical precious metals, it will result in the biggest short squeeze in the history of commodities trading.

Pointing out that the physical silver market is more tight than ever before —in the first quarter of 2010, the U.S. mint sold 9,023,500 American Silver Eagles—up from 8,299,000 sold in the fourth quarter of 2009—NIA has called on its members to spread the word and help expose what could be "the largest fraud in the history of the world."

Article Tags: Alan Caruba, Book, ClimateGate

Over the years, I have read dozens of books by eminent scientists, climatologists and meteorologists, that exposed the lies that support the greatest fraud ever perpetrated in the modern era, “global warming.” I have always wanted to read one that anyone could understand without having sufficient knowledge of the rather complex science involved.

I finally found that book and, would you believe it, the author is a friend! Every month I put aside time to talk with Brian Sussman, a former award-winning television meteorologist turned conservative talk show host on KSFO, San Francisco.

Like myself, Brian has long known that “global warming” is a bunch of horse hockey and, bless him, after the November 2009 revelations contained in several thousand leaked emails among the handful of perpetrators supplying the phony data to support “global warming”, Brian sat down and wrote “Climategate”, published by WND Books and the best $24.95 you will ever spend because it is the best book on the topic I have ever read.

Its official publication date is Earth Day, April 22.

To put it plainly, Brian got it right and he does so on every page as he walks the reader through what is often a complex topic. He does this by drawing on more than twenty years as a meteorologist and science reporter. In 2001, he shocked San Francisco viewers with a career change to become a conservative talk radio host.

Source: factsnotfantasy.blogspot.com

Read in full with comments »   

A former BoA IT worker has agreed to plead guilty to installing malware on the bank’s ATM machines in order to withdraw money whenever he felt like it, reports Wired. According to the plea agreement, his total take from the crime was between $200-400k. The bank won’t disclose how he did it or what the malware was like, but earlier this month Visa announced that new malware has hit the U.S. that could not only capture customers’ PINs and card data, but also give the criminal the ability to empty the machine of any cash that was in it.

“Take From ATM Malware Caper Exceeded $200,000” [Wired]

We’ve seen those “Project Pink” phones floating around for a while now, and they’ve finally come to the surface. Named Kin One and Kin Two, the two phones slot somewhere between the feature phone and the smartphone. To be offered on Verizon and Vodaphone, manufactured by Sharp, and running software from Microsoft, the Kin phones are more social media devices that happen to make calls than smartphones with social media grafted on (ala Motoblur).

The Kins, which seem to be built off of the same guts as the Zune and also seem to run an extension of the Zune OS, are easily the most social networking-oriented phones we’ve seen to date. But where the slot between feature phone and smartphone is a bit hazy. If anything, seeing as they are very much inspired by Microsoft’s acquisition of Danger a few years back, we’d have to say that these suckers are the new Sidekicks. Which, incidentally, Sharp also built.

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Gone are the days of cell phone use at work being taboo. If you’ve ever worked in the service industry or still do, you know what I’m talking about. That “aww, man” feeling when your restaurant manager catches you in the kitchen texting your friends about how epic last night was. “That’s strike 2,” she says.  Or maybe you work at an office where Facebook, YouTube and other social networking sites are blocked. You think your boss is out to lunch but he comes around the corner right at the moment you are laughing hysterically at a YouTube video on your iPhone. D’oh! And now he wants to see it too. Double d’oh! Why couldn’t I have just favorited that tweet and watched the video it when I got home? was just too tempting. It’s like your seventh grade teacher catching you passing notes and reading it aloud to the class. “Do you like me? Check yes or no.” Death from embarrassment. You can never look him in the eye after that. 

Times, they are a-changing and it’s a good thing. When I’m not writing for the internets, I am working at a hotel desk in midtown Manhattan, attempting to be some semblance of a concierge. As a native New Yorker, the job comes somewhat naturally but don’t get me wrong – it’s no piece of cake. We can’t tell guests that “hey, it’s meatloaf night at Applebee’s and I can get you a nice table by the fishtank!” That may sound like a cut at small town, USA but I’m mostly just jealous of their spacious living quarters. NYC boasts a staggering 20,000 restaurants in our five boroughs and while that is one of the many reasons our little island of Manhattan is one of the most popular tourist destinations in the world, it proves a daunting task for me to stay up to date with the constant flux of ever-changing bars and eateries. In my fantasy world, I’d go to different venues every night, sample the fare, take in the ambience, chat up the manager, and expense it all to research. Somewhere, my boss just laughed. 

As knowledgeable as we pretend to be, websites like Menupages and Shecky’s are tremendously helpful in our concierge quest to send guests to a place that will make them feel like locals. But I’ve found out recently that many times the iPhone app is faster and more focused on a final decision rather than narrowed-down results of a web-based search. Certain apps like Yelp, UrbanSpoon, and Metromix try to do just that, but my favorite as of late is The Next Move by UrbanDaddy. The app design is ubercool with a sexy interface, pinpointing your day, time and location, then asking the question: What do you want? The options are: Brunch, Lunch, Drinks, Dinner, Dessert, Dancing, etc. Then it asks: Who are you with? There are some amusing answers mixed in here, such as: Boyfriend, Parents, Friends, Ex, Mistress, Boss. The subcategories then get even funnier and a bit racy asking if you are wild, more low-brow or perhaps desire to be surrounded by cougars. Believe me, these questions (and ones I can’t mention but may one day become a coffee table book) get asked at my desk. Instead of staring blankly at the guest or politely explaining that I can’t help them, I can use my handy “automated concierge” UrbanDaddy app without my boss giving me the side-eye for using my cell at work. Now, if only someone could create an app to help the poor soul calling from his room upstairs asking, “how do I get to Manhattan?” 

I uploaded episode #9 of the IRC Podcast yesterday. My guest this week is Lillian Frances who owns and runs the Laugh Out Loud Theater in Schaumburg, IL. She talks about auditions, teaching kids, using your warmups well, and yes-anding life. She performed at iO Theater and with many improv groups in Chicago. She was also a perfomer and assistant director for Boom Chicago in Amsterdam. She directed for Second City National Touring Company, the all women’ improv groups Jane and Sirens, and sketch shows with GayCo and Stir Friday Night.

This interview was a little different than the others, because we ended up talking a lot about what it’s like to run the business of a small improv theater. I really like how Lillie talks about her performers. It’s obvious that she has a lot of respect for her performers and trusts them in ways that not all improv directors do. It’s not surprising that several years after she first held auditions, seventeen of her first hires still work for her.

We’ve been all over WeFi for Android since it first appeared, and the useful service just got even better. WeFi is a way to find a Wi-Fi hotspot that meets your requirements. There are over 56 million verified hotspots in the WeFi database, and new features make it a must-have app on your laptop or supported phone.

WeFi for PC and Android devices now allows you to enter an address and find all the Wi-Fi hotspots nearby. The hotspots have verified information that includes the type of location (cafe, library, etc.), whether the hotspot is free, if a password is required and even if a web page is used to access the connection. Crowd-sourcing is used to ensure the database is not only growing, but is verified by the 4 million users of the service.

Maps are now available on to show hotspots onscreen, so finding one is now easier than ever. The maps coupled with the “Find Wi-Fi” feature make getting online easy using the GPS found in most handsets. The maps will show any verified hotspot around the current location when the feature is used.

The free WeFi service is available on both notebooks (Windows and Macs) and phones running Android, Windows Mobile and Symbian. Sorry iPhone and iPad users, there’s no support for you.

Related GigaOM Pro Content (sub req’d)

It’s another day in the Palm buyout rumor mill.  According to Bloomberg, HTC and Huawei Technologies have emerged as the frontrunners in the offer process.  According to individuals familiar with the talks, Palm contacted Huawei in February to begin “preliminary discussions.”  HTC also remains as a a viable player, with company CFO Cheng Hui-ming stating that the company is analyzing the possibility of operating their own software platform.  “We continue to assess, but that requires a few conditions to justify” (refering to operaing their own software).

“If you look at the successful smartphone players, like Apple and Research in Motion, a reason for their success is that they have their own platform,” said Steven Tseng at RBS Asia Ltd.  “The negative is the amount of resources they’d need to allocate.”

Bloomberg points out that Palm’s operating system accounted for 0.7 percent of the smartphone marketshare in 2009.  In comparison, Symbian (used on most Nokia devices) commanded 46.9 percent, RIM’s BlackBerry OS held 19.9 percent, and Apple’s iPhone OS accounted for 19.9 percent.  According to analysts, Palm could receive as much as $1.3 billion for the company, based on the company’s $1 billion market capitalization and a “30 percent premium recently paid in tech deals.”

Additional contenders include Lenovo, ZTE, Microsoft, Nokia, and Motorola.  If you had the power, what company would you like to see purchase Palm (or would you keep it as a separate entity)?

Via Bloomberg, The Washington Post

This is a picture of a bowl of (if I do say so myself) delicious tabbouleh. That spot of greenery at 12 o’clock above the bowl is the parsley patch from whence its main ingredient came.

The parsley — both curly and Italian — did winter over nicely and madly filled out over the past couple of weeks. So it looked like my first crop from this year’s garden would be 4 cups of these lively, bittersweet herbs. Tabbouleh time!

I love making tabbouleh because chopped parsley smells nice, and then once you start seasoning the balance of flavors announces itself as soon as it comes into focus. You tinker and add and…aha!..there it is.

I like a more salad-y version that bulgur-y version. I think the parsley should still be lively and recognizable as leaves, not chopped into green flecks. I always like to add some chopped romaine hearts to underscore the attractive, juicy bitterness of the parsley. I’m fine with chopped mint, but don’t require it. (Also, other garden herbs such as …

SKYNEWS: Israel gives citizens emergency warning to leave the Sinai Peninsula

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Despite complaints that those who legally use marijuana for medical purposes may risk losing their jobs, and despite evidence of broad public support for medicinal use of the drug, some activists have called the proposal "a silent killer" and suggested it should be defeated.

In recent months, the case of Joseph Casias, a 29-year-old cancer sufferer from Michigan, sparked controversy after he was fired from his job at Wal-Mart for failing a drug test due to his use of doctor-prescribed marijuana in a state where it is legal, according to CNN.

However, while supporters of legalization worry that individuals who use cannabis for pain relief in the 14 states where it is legal may risk their employment, opponents argue that because drug addiction is an epidemic and marijuana is "a silent killer," its use should be penalized.

In particular, The Opposition to the California Marijuana Legalization Initiative has vowed to work to defeat the ballot measure for The Regulate, Control and Tax Cannabis Act of 2010 that has been certified by the State of California to qualify for the November ballot.

"Marijuana legalization infringes on our right to a healthy society and exposes communities to addiction, crime, biohazards, drug dealing and it must be defeated," said the organization’s representative Alexandra Datig.

Meanwhile, the Pew Research Center found that nearly three-quarters of Americans (73 percent) say they favor their state allowing the sale and use of marijuana for medical purposes if it is prescribed by a doctor, while only 23 percent are opposed.

THE world finally makes sense again:

Paul Kedrosky says this demonstrates “that even the worst bankers struggle to find ways to lose money when short rates are zero, the yield curve is steep, and credit is tight”.

Noah goes hands on with Kin One, one of Microsoft’s two new social networking phones. Hits Verizon in May.