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Forbes and the "Self-Made" Label

by cactus

Forbes and the “Self-Made” Label

I’m kinda busy these days, but this topic is small pet peeve of mine: what the heck is up with Forbes and the “self-made” label? On occasion, I’ve gone through the Forbes 400 list of richest Americans and marveled at who Forbes manages to decide qualifies as self-made.

Case in point. Take Aubrey McClendon, head of Chesapeake Energy, the largest independent gas producer in the US. His great-uncle was a governor and a three-time senator, and also co-founded a large oil company. His father worked for the company for 35 years, and one imagines he wasn’t a janitor or nightwatchman.

McClenond himself will tell you:

I had some early financial advantages in life that probably let me take a chance or two that I wouldn’t have been able to

But to Forbes, McClendon is a self-made man.

A few spots up from McClendon is another self-made dude (according to Forbes), Paul Tudor Jones II. The “II” is not an automatic marker of wealth, but it should have been a tip-off to Forbes that perhaps it was worth visiting “teh google”, which would have been kind enough to guide them toward this interview:

I already had an appreciation for trading because my uncle, Billy Dunavant, was a very successful cotton trader. In 1976, after I finished college, I went to my uncle and asked him if he could help me get started as a trader. he sent me to Eli Tullis, a famous cotton trader, who lived in New Orleans. Eli is the best trader I know, he told me. I went down to see Eli and he offered me a job on the floor of the New York Cotton Exchange.

And the name “Dunavant” should have rung a bell to Forbes – after all, Forbes ranks Dunavant Enerprises as one of the 400 largest private firms in the US. Another thirty seconds of “research” would have told the folks at Forbes this:

His paternal grandfather, Colonel William P. Dunavant, was in the railroad business and created one of the main cotton transporting railroads of the time, a railroad that grew into the southern leg of the famous Frisco Railroad. Billy’s father, William Dunavant, began working for T. J. White and Company at the age of twenty-one. After White retired, the company was passed to William Dunavant; however, because of the untimely death of his father in 1961, Billy Dunavant took over the company at the age of twenty-nine.

I’ll concede that a stream of events where all this is true and Tudor Jones was none-the-less a penniless guy who pulled himself up by his bootstraps in a way that the rest of us were just too lazy to accomplish. It does seem unlikely, though. A more reasonable description of events is that this is another example (I’ve had a post or two on this in the past) that Forbes simply has a tendency label some very unlikely individuals as being self-made. And from what I can tell, this is a Forbes thing; most of the folks Forbes gives this label to that the rest of us might not don’t go around insisting they’re self-made. (I believe I recall one counter-example.) So what’s up with Forbes and the use of this label?
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by cactus

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Same labels, same old stuff

One Salient Oversight sends some thoughts from down under on recycling labels:

Think of the common labels thrown out against political opponents these
days. What sort of political thinking would be labelled in the following
way?

* The propagation of ideas like Darwinism, Marxism, the teachings of
Nietzche, Liberalism, Socialism, Communism and Anarchism.
* A focus on Utopianism that is actually unattainable because of the
underlying conspiracy within the group.
* A movement towards materialism.
* Supporting supranational entities notions such as World Government.
* A control of the media to promote these evil ideas, under the
guise of a “free press” (which is actually controlled by the conspiracy).
* Sexual licence.
* An opposition to Christianity and a promotion of secularism and
atheism – but with an actual evil religion under girding it.

All those descriptions can quite easily be seen as being directed by
conservatives against progressives. Consider the following:

* Conservatives often use progressive ideas as a pejorative, and
will quite easily label a progressive by a general term. Labelling them
as “communists”, for example, even though they don’t espouse Communism.
* An argument that progressive ideas are based upon a vision of a
“false utopia”.
* An argument that progressives cannot tolerate faith and are
inherently materialist.
* Complete opposition to any notion that supranational entities like
the United Nations and the European Union are useful. Such entities are
either threats to freedom or full of incompetents. Those who support
such entities are thus evil.
* That the “Mainstream Media” is inherently “liberal” and has an
agenda to promote a particular point of view under the guise of the
“free press”.
* That sexual licence promoted by progressives will end up leading
to the destruction of traditional marriage and enforced sexual
perversions (like paedophilia and bestiality).
* That a conspiracy of progressives is trying to destroy
Christianity and replace it with atheism, and that such a conspiracy
has, at its base, Satanic and pagan influences.

Sounds terrible doesn’t it? Or maybe it sounds true. Or maybe, just
maybe, someone came up with the same sort of thing during the late
nineteenth century (Protocols of the Elders of Zion) and directed it towards a societal group that they
thought was destroying the world?

In the case of the late nineteenth century, these beliefs were outright
lies that were fabricated with the intention of creating ill-will and
hatred towards their “enemy”. It therefore gives you an idea of how
these people – even those today – think.
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This one by reader One Salient Oversight

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Mike sends a response to rdan on off-label drugs

It is evident that this will lead to less pressure on the Drug Companies
to get their drugs approved by the FDA. I would suggest that we consider
letting the market help. i.e.

1) If a drug is prescribed off-label, then the patient be permitted
to return it to the drug store for a full refund, no questions asked. —
Obviously many people might be helped, and others would not bother to try to
get a refund, but it would encourage the Drug Company to test the drug to be
able to sell it without the possibility of having ineffective drugs being
returned.

2) If a drug is being prescribed off-label, with the cooperation of
the Drug Company, then the patient can go to court and have a presumption
that the drug is the cause of any reasonable harm to the patient. Obviously
one would want a judge to eliminate unreasonable cases, but if it is
reasonable that the off-label use of the drug might have caused the damage,
then the encouraged off-label use would lead to an assumption of guilt until
proven by the preponderance of evidence otherwise.

Obviously the details of these can be adjusted to make them more
reasonable, but their purpose is to let the Drug Company have some reasons
for testing their drugs and for not encouraging their off-label use unless
they feel they are safe and effective.

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Off label drug pushers

FDA doesn’t just approve drugs, it approves drugs for specific uses. However, doctors can prescribe drugs for unapproved, or “off-label,” uses.

Under a law that expired in 2006, pharmaceutical reps were legally able to distribute journal articles touting the benefits of off-label uses. But, according to the Associated Press, FDA maintained some regulatory oversight: “Under the expired law, companies had to submit reprints of articles to the FDA before sending them to doctors. That way, the articles’ accuracy could be reviewed.”

If FDA chooses to finalize this policy, which it published today as “proposed guidance,” drug companies would be able to use journal articles to market off-label uses willy-nilly. The AP article continues, “Under the new proposal, drug companies don’t have to submit articles.”

Off-label use of drugs is big business. According to The Wall Street Journal, “[FDA] is stepping into a high-stakes business issue, because off-label uses of prescription drugs are a mainstay of the industry — an estimated 21% of drug use overall, according to a 2006 analysis published in the Archives of Internal Medicine.”

According to Merrill Goozner at the GoozNews blog, the pharmaceutical lobby pushed for FDA to go forward with the policy which will be a boon for the industry:

So what was in today’s proposed guidance? It pretty much gives industry everything it was looking for. It would allow drug salespersons to drop off article reprints as long as they came from a peer-reviewed journal that had a conflict-of-interest disclosure policy. Articles from industry-funded supplements would not be allowed…

Note what isn’t in the policy: It doesn’t say that the studies of unapproved uses must be from randomized controlled clinical trials, which is the gold standard of medical research.

Rep. Henry Waxman(D-CA) caught wind of this policy last November and asked FDA to refrain from going forward.

We probably will get exactly what we wish for, and then get blamed for the result. I call it sneered at..”Suckers!!”

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Thoughts on the War on Terror as a Label

I have a vague recollection of GW saying something to the effect that if we change our behavior or lifestyle, the terrorists have won. (Anyone have the quote?) As I was waiting, barefoot, for my carry-on, my flip-flops (the easiest thing to travel in these days), my laptop and my cell-phone to clear the X-ray machine, I looked over at the octogenarian lady standing next to me waiting for her belongings. Then I reflected on the fact that GW has not flown commercially since at least the year 2000.

Calling it a “War on Terror” means one day, when we win, we’ll be able to go back to the days when we weren’t fighting. Put another way… one day we’ll be able to go back to the days before our carry-on items were scrutinized this carefully. That day will never come, even if every last islamofascist is rounded up and GW has Osama’s testicles in a jar of formaldehyde sitting on the mantle. Calling it a “War on Terror” is just silly.

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NY Times Calculator Mislabels Salaries as Wealth

Dean Baker has a lot of praise for this calculator:

The NYT has a very nice feature in today’s paper, a calculator that allows you to see how wages have grown over the last four decades. You can make comparisons for a wide variety of demographic characteristics, occupations, and industries. You can even plus your own info in and see how you’re doing compared to your peers. This is nice, it’s giving people real information. That’s what newspapers are supposed to do.

I agree but I have one nitpick with the title which talks about “wealth” whereas the calculator graphs real salaries. Their instructions continue the error in terminology by calling this salary calculator a “wealth calculator”. Could someone let the New York Times know that stocks and flows are different concepts.

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Pork Barrel Spending Labeled “Fiscal Responsibility”

An AP story carried by CNN shows that the White House was paid many visits by “Republican activists Grover Norquist and Ralph Reed” over the past 6 years. White House spokeswoman Dana Perino had an odd way of excusing the visits by Mr. Norquist:

He is one of a number of individuals who worked to advance fiscal responsibility, which is one of the key aspects of the president’s agenda

I seriously doubt Mr. Norquist asked Karl Rove if the pork barrel spending for his clients could be reduced.

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Federal Reserve SOMA Holdings of the Long Bond

It is well known that the Federal Reserve in its three rounds of QE (and especially the first two) aggressively bought Treasury Notes and Bonds or collectively the ‘Long Bond’ of 10 Years and longer. But there has been relatively little discussion of what that means for such things as Federal Government Net Interest etc. So rather than advance my thoughts I figured we could start with the numbers in the following web tool:
System Open Market Accounts

The link should take you to the Summary Tab which shows that total holdings in these accounts are $4.221 trillion comprised of $1.738 trillion of MBS’s (Federal Mortgage Backed Securities) and $2.347 trillion in Treasury Notes and Bonds plus some smaller amounts in TIPS and Agency Securities that are more a rounding error in context. Of interest is that the Fed’s SOMA holds no T-Bills at all. That is the holdings are all Medium to Long (2 years and longer) and not Short (1 year or less).

If you click on the Notes and Bonds tab you will see a breakdown of Fed SOMA holdings of each issue. Now while Notes and Bonds are not individually labelled it is easy to distinguish 10 Year and shorter Notes and 30 Year Bonds simply by inspection of the relative coupon rates of different Treasuries maturing on the same date: rates above 6% being Bonds issued 15, 25, and 30 years ago and rates in the 1-3.5% range being mostly 10 Year Notes. If we then inspect Fed holdings of those higher yield Bonds we see that they comprise up to but never exceeding 70% of the total issue.

I’ll let you all inspect the Tables as you will but would like to ask a question. The numbers show that the Fed’s SOMA holds something like 2/3rds of ALL existing high yield Treasury Bonds. Which means that these accounts are also collecting that percentage of projected Net Interest going forward for that part of Federal Debt actually held in Bonds. Since the Fed has no need to ever sell those holdings against its will and can simply hold them to maturity and since it rebates ‘profits’ to Treasury this would seem to mean that simply examining Net Interest in either nominal terms or as a percentage of GDP will lead one to erroneous conclusions about the ability to the Government to service its debt. That is just examining the total for Public Debt and taking its average coupon doesn’t do much until or unless you segregate out both Intragovernmental Holdings AND the Fed’s SOMA holdings and THEN adjust for the fact that these holdings include up to 70% of the highest yielding instruments.

I have put up these numbers before but as usual had the comment threads hijacked into other channels (cough, cough **Social Security** cough). But I really really hope SOMEBODY will address these issues more directly in terms of macro finance.

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Dodd Frank changes a huge gimme

Yves Smith points us to additional 114th Congress changes:

How the Republican Campaign to Gut Dodd Frank is a Huge Gimmie to Banks and Private Equity Funds

The Republicans have been quick and shameless in using their control of both houses to try to crank up the financial services pork machine into overtime operation. The Democrats at least try to meter out their give-aways over time.

Their plan, as outlined in an important post by Simon Johnson, is to take apart Dodd Frank by dismantling key parts of it under the rubric of “clarifications” or “improvements” and to focus on technical issues that they believe to be over the general public’s head and therefore unlikely to attract interest, much the less ire. However, as Elizabeth Warren demonstrated in the fight last month over the so-called swaps pushout rule, it is possible to reduce many of these issues to their essential element, which is that Wall Street is getting yet another subsidy or back-door bailout.

Today’s example is HR 37, with the Orwellian label “Promoting Job Creation and Reducing Small Business Burdens Act”.

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Costs and Benefits of Desire


Sandwichman at Econospeak


“Accounting for the facts that healthy foods are otherwise less desirable and that consumers already have some information about health, the net benefit to consumers possible from consuming healthier foods is 30-40% of the value of the gross health benefit from switching to the healthiest possible diet.”

What “facts”? A Reuters report on Monday told the story of the $5.27 billion in “lost pleasure” estimated in a U.S. Food and Drug Administration analysis of product labeling. According to the report, to arrive at that estimate, “the agency relied almost solely on a 2011 paper by then-graduate student Jason Abaluck.”

In all fairness to Abaluck, the paper strikes this reader as an earnest and diligent graduate student exercise in mathematical modeling. Of course quantifying the “otherwise less desirable” characteristics of healthy foods is sheer nonsense. But that’s not an issue for mathematical modeling. Do the conclusions follow rigorously from the assumptions? That’s all that counts. Assuming that healthy foods are otherwise less desirable… But why would you?

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