Friday, November 3, 2006

The Best-Paying Jobs That Your Taxes Can Buy

Ever since the time of Pharaoh, government has felt the need to create jobs for the people. Only now, we don’t build pyramids. We are much too modern for that notion. We are high tech workers; we build airplanes by decree of economic development committees.

Europe organized Airbus in 1970. The company is mostly owned by France and Germany with smaller shares being held by England and Spain. Russia, the grandmaster of government boondoggles, recently bought a 5% share of Airbus.

To justify the way that Airbus bleeds European taxpayers for subsidies, the company has built 16 plants in its member countries. I am sure that each plant has a sign in its front yard that reads, "Jobs for Your Community." Of course, there is no mention of the cost to taxpayers to create those jobs. Socialist ventures are exempt from truth-in-investing disclosures.

Airbus is currently building the 555-seat A380-the world’s biggest passenger plane. The A380 is the most ill-conceived invention of the post-9/11 era. But it is huge, like the Great Pyramid of Giza and the Aswan Dam, and that is its attraction to the bureaucrats who manage the government-owned consortium.

The future of the Airbus A380 is beginning to resemble that of the Concorde SST. England’s BAE and France’s Aerospatiale built that marvel before both government-owned companies became founders of Airbus. Airbus learned from the Concorde’s mistake. The Concorde carried too few passengers to ever make a profitable flight. Therefore, Airbus designed the A380-the behemoth which is too big for any airport terminal in the world to load and unload.

Government squabbling has now left Airbus’ top management in disarray. Delivery of the A380 is still two years away. Orders have stagnated. And Boeing has taken the lead in the long-haul market with its new 787 Dreamliner.

Writing in the Wall Street Journal, Holman Jenkins compared Airbus’ current state to that of the Concorde as a "Rip Van Winkle moment." Yogi Berra would say, "It’s déja vu all over again!"

Just like the socialist governments of Europe, we West Virginians own an interest in a government-run aircraft consortium. And somewhere in Martinsburg, there is a sign that reads, "Jobs for Your Community."

According to press reports, West Virginia loaned Swearingen Aircraft Co. $4 million to build small business jets. Apparently, the company could only repay half the loan, so our state took a 2% interest in the company in lieu of the $2 million outstanding debt.

Later on, the Republic of China (Taiwan) invested $500 million in the project through its state-owned Sino Aerospace Investment Corporation, and the resulting company is Sino-Swearingen Aircraft Corp. (SSAC) of which Taiwan owns 90%. Thus, I assume that we own 2% of 10% of a company capitalized at $500 million. That’s one million dollars. Our investment appears to have lost half its value.

I was unable to find any publicly-available financial information for the company. As investors, our state should make that information available. For example, do we own common stock or preferred stock? Does the stock pay a dividend? Has the stock split? Does the stock trade on an exchange? Are our shares restricted?

In late June, we received some bad news about our aircraft investment. SSAC is headquartered in San Antonio and the city offered the company a $70 million development package to expand its plant facility. San Antonio has upped the "Jobs for Your Community" ante. We cannot match its offer.

I do hope that SSAC builds jets or jet components in Martinsburg someday. But the reality is this-thirty other companies (including Airbus, Boeing, Bombardier, Learjet, and Embraer) have new business jets in development. It’s always tough for a start-up company to match the competition from industry veterans.

Sino-Swearingen’s website boasts that "SSAC's goal is to become the world's leading aircraft producer…" And therein lies a good lesson for businessmen wanting to secure government welfare: If you can’t build Pharaoh the biggest pyramid, then do the next best thing and promise to build him the most.

Friday, October 6, 2006

The Importance of Being Herb

Former WVU President E. Gordon Gee was recently featured on page one of the Wall Street Journal.  He now serves as Chancellor of Vanderbilt University, the fourth university which he has led since leaving Morgantown.  The list also includes the University of Colorado, The Ohio State University, and Brown University.

The WSJ article critiques Mr. Gee’s generous salary and perks.  And it also balances criticism of his compensation with praise for his outstanding fundraising ability.  Vanderbilt’s endowment has grown from $2 billion to $3.2 billion during Mr. Gee’s tenure.  That feat alone would make Commodore Vanderbilt proud of his namesake school.

Gordon Gee’s prominence is not new, however.  The national media discovered him while he was president of WVU.  Burger King ran a television ad campaign called "Where’s Herb?" Herb was promoted as the only American who had not eaten a BK Whopper and viewers were offered a cash reward if they spotted Herb in public.

As luck would have it, the actor who portrayed the fictional Herb was a dead ringer for Gordon Gee.  It wasn’t long before Mr. Gee was seeing strangers point at him and exclaim, "There’s Herb!"

"Herb" is again newsworthy just as David C. Hardesty has announced that he will step down as WVU’s President.  The university has formed a presidential search committee and I think it’s rather certain that the committee will receive two lists of candidates from which to pick.  So then, this is a good time to consider the candidates who hope to steward West Virginia’s flagship institution of higher learning.

First of all, the committee will hire a professional headhunter.  I always believed that headhunters and headhunting firms were nothing more than glorified realtors.  After all is said and done, they provide you with a handful of listings in your price range and then ask for their fee.  The headhunter’s list will be populated by professionals from academia-Herbs, if you will-and will contain most of the frontrunners for the job.

The second list, what I call the "out-of-work brothers-in-law slate", will be provided by state politicians and other power brokers who believe that patronage is the pathway to employment.  Patronage and nepotism have justified their existence, so pardon them if they know no better.

Sometime in March 2007, both lists of names will be commingled and the resumes will be thoroughly shuffled.  This is an important step in the selection process because it guarantees that some candidates will appear to be outstanding in comparison to others in their peer group.  The selection system then works as predicted, and is considered a success because most search committees never ask the all-important question, "As compared to whom?"

The search committee can avoid this trap by first identifying the needs of WVU before it even accepts a resume.  The job description drives the process, not the other way around.  Since the search committee is probably now defining the job description, let me offer my thoughts.

The next WVU president will face two major tasks.  First, faculty and staff salaries need to be raised significantly to insure that the university not only retains, but also attracts, the best personnel.  As WVU grows to 30,000 enrolled students, faculty and staff will also grow.  And second, the university’s growth and expansion needs to be financed by a method other than further burdening the already debt-laden student body.  Both of these goals can be mutually accomplished without compromise.

The candidate that WVU should be looking for can be best-described as the next Peter Ueberroth.  Ueberroth, you’ll recall, organized the 1984 Olympics in Los Angeles; the event made a profit of nearly $300 million.  He proved that a public enterprise could be of world-class quality without complaint while still being operated efficiently.

To the search committee, I say this: Forget List #1 and List #2. Go find the next Peter Ueberroth.  He’s out there, but his resume isn’t on file with academic headhunters and he’s surely not an out-of-work brother-in-law!

I have always said that David Hardesty is the best president that West Virginia University will ever have.  He was born for the job.  Even so, he had his detractors during the selection process.  Those who preferred List #1 said he lacked academic credentials.  Those who preferred List #2 said he would use the job as a springboard for politics.  Fortunately, the previous search committee ignored all of that claptrap.

Leading West Virginia University, the university where greatness is learned, is an honor and a privilege.  I wish the search committee well in its quest to find the candidate who is worthy of the title.

Friday, September 8, 2006

American Know-How Delivers Record Opium Crop

Congress outlawed the sale of heroin and cocaine in 1914.  Prior to then, drugstores sold narcotics as popular cures and tonics.  "Heroin" was actually Bayer’s trade name for its over-the-counter cough medicine.  Coca-Cola, a fountain drink, was invented by an Atlanta druggist; its kick came from the coca leaf.

In ninety-three years, narcotics have gone from quaint drugstore notions to ubiquitous small-town evils.  For all of the drug wars that our government has fought and lost, we might as well never have quit selling them over-the-counter.  At the least, addicts could buy pharmaceutical-quality drugs before Congress weighed in.

The news from Afghanistan is telling of our drug war failures.  Our army and air force have occupied that desert fiefdom for five years.  This year, Afghani poppy farmers will reap a record opium harvest.  The acreage under poppy cultivation has risen to 370,000 acres since our armed forces have been in country.

To understand what has happened since we invaded Afghanistan, recall that the Taliban had effectively eradicated poppy growing by 2000.  Last year’s harvest of 250,000 acres was estimated to have provided 90% of the world heroin supply.  The 2006 crop is half again as big.

With such a glut, the price of heroin is certain to slump to modern lows.  The dope dealers will likely drop the street price to hook even more addicts.  Heroin could easily become America’s drug of choice.  And down the road, we should expect increased business for methadone clinics as addicts seek treatment.

The late Senator Daniel Patrick Moynihan (D-N.Y.) discussed several areas of public policy in his 1996 book, "Miles To Go".  He reserved a chapter ("Drug Wars") to write about America’s love of alcohol and drugs.

Moynihan is best remembered for his intellect. He may very well be the last true intellectual elected to the U. S. Senate, given the prostitutional manner to which we have stooped when selecting senators.

Moynihan, a master lawmaker, was also fond of alcohol, and it is therefore no coincidence that he wrote such a lucid, balanced essay on government’s effort to control drug use.  In his conclusion, he tells us: ''Thus, it may be that drug addiction is one of the problems government simply cannot solve.''

The Rolling Stones went platinum with, "You can't always get what you want, but … you get what you need."  Huey Lewis topped the charts with "I want a new drug."  The popularity of these songs directly correlates to modern society’s addiction to narcotics.  And therein is the problem.  When Frank Sinatra and Bing Crosby ruled the airwaves, drug use was comparatively non-existent.

The Sixties, however, brought out a culture that embraced drugs as a form of escape and recreation.  Whether it was the bored housewife who chose Valium or the acid head who popped LSD, our society changed overnight, from top to bottom, and for the worse.

Daniel Patrick Moynihan perfectly captured the degradation of our society in his essay "Defining Deviancy Down."  Because America has allowed its mores to decline over the last fifty years, defining deviant behavior has continually narrowed toward the most egregious crimes. 

As a practical way of explaining this, consider that Bill Clinton, Al Gore, and John Kerry have all said that they have smoked marijuana.  George W. Bush has admitted his bout with alcoholism and a DUI arrest.  These facts barely raise an eyebrow today.  But how would these political candidates have fared at their respective 1956 nominating conventions?  Do you really think either political party would have considered one of these men to lead the ticket?

We are living out an unbelievably cruel joke.  Our government made it harder for cold sufferers to buy Sudafed and has proclaimed that act as a victory in the drug war.  At the same time, our military is fighting a real war in Afghanistan, but our government has opened the door for Afghanis to inundate the world with cheap heroin.

If you gave every Arab terrorist a flying carpet with a fully-loaded bomb bay, they could not muster a threat to the American way of life that even comes close to the havoc that heroin will do to our neighborhoods in the coming year.  We are destroying our empire from within, one fix at a time.  And what’s insane is that we’ve used our own armed forces to overlord a cheap, plentiful stash.

Government cannot solve the problem.  Legalization of narcotics cannot solve the problem, either.  Only the American people can.  But I doubt that we have the will to do so.

Friday, August 11, 2006

We Won't Make Tough Calls On Higher Education

August has arrived.  And with it comes the payment deadline for parents who must fork over a tidy sum to their children’s chosen colleges and universities.  College costs in West Virginia have increased by 30% since the 2001 school year.  And it is all but certain that college costs in future years will gallop along at a fast pace.

I say the cost will continue to gallop because the general inflation rate averaged 2.5% per year from 2000 through 2005.  Think of the increases that will come after a few years of 4-5% inflation.

The state and federal governments have contributed to these runaway costs by legislating easy money policies.  Subsidized loans, Pell grants, and PROMISE scholarships are all noble gestures.  However, easy money begets wasteful spending.  Had higher education been made to live off what its customers could afford to pay, then college campuses would look downright Spartan by comparison. 

But we cannot let market forces dictate admission to higher education.  After all, we live in a quasi-socialist society where unionized public schools give A’s to C students.  Parents tolerate this sham because no parent will freely admit that his or her kid is not college material.

As Garrison Keillor wryly observed of Lake Woebegone, "All of the children are above average."

Nationally, only 50-60% of entering college freshmen will graduate within five years.  We can conclude from reading graduation rate statistics that one-third of any college class should never have walked onto campus to start with.  But how do we determine who falls in that group?  We can’t because of the way the education system has been corrupted by easy grades and easy money.

In the final analysis, college graduates and taxpayers are paying through the nose for this system that caters to the masses.  Two out of three West Virginia undergraduates borrow money through the student loan program, and the average West Virginia graduate now finishes college with an $18,000. IOU.  This number does not include the debt that many parents incur by taking out home equity loans.  Nor does it estimate the consequences for the parents’ retirement incomes because their savings accounts were drained to pay for little Johnny’s tuition.

Pell grants pay for a significant amount of the higher education bill.  But realistically, the money to fund these grants comes from federal deficit borrowing.  It’s not free money as the politicians would have us believe.  It’s just another form of debt.

Society needs to stem this exorbitant rise in higher education costs.  There is only one way to do that, given the current education system.  Colleges must stop teaching "bonehead" English and other such remedial courses to freshmen.  The freshman year should be a difficult one with a strict core curriculum (minimum 16 credit hours each semester) of college-level English, math, and science.  The freshman year should be what it was intended to be-a weed out session.


There is no other way to rein in these costs.  Even private giving cannot offset college inflation.  West Virginia University recently raised $360 million which is almost meaningless.  The investment income on that money will never keep pace with the higher education inflation rate.  Although $360 million is a commendable sum, the university didn’t even have to wait a year to start begging money to pay for new band uniforms.

Because the public school system has failed to prepare students for college, the higher education system has been forced to teach 12th grade to incoming freshmen.  That wasted year has diluted the value of a bachelor’s degree to the point where graduates waste two more years pursuing their masters.  That’s two more years of being a non-productive adult, and two more years of debt to add to the bill.

Of course, if colleges do follow my advice, then that necessarily means that college enrollments will shrink considerably.  That would force some colleges to close up for good.  West Virginians will never let that happen.  We will continue to prop the system up with the wallets of gamblers before we give up socialized education.

Friday, July 14, 2006

Thomas Jefferson Provided the Real Fireworks

Independence Day came and went without much mention of the man who made the date memorable.  Thomas Jefferson and the Declaration of Independence were seldom mentioned on July 4, 2006.   Instead, this year’s holiday morphed into a 4-day weekend that featured fireworks every night. 

Boston’s extravaganza highlighted this year’s holiday-a pyrotechnics rendition of "shock and awe" choreographed to the orchestral strains of Aerosmith and the Boston Pops, and hosted by the feel-good psychologist of our times, Dr. Phil.

Though I missed it, National Public Radio’s "Morning Edition" correspondents read the Declaration of Independence.  Bravo for them for preserving this tradition.  At one time in our nation, the reading of Jefferson’s words inspired audiences much more so than a fireworks display could ever hope to.

Thomas Jefferson has fallen into disfavor in recent times because he was a slaveholder.  Had the world produced a man of Jefferson’s intellect and accomplishment since his death in 1826, then I could understand society’s willingness to remove the man from his pedestal.  But this world, now 6 billion strong, has yet to conceive anyone even close to matching the Sage of Monticello.

By my estimation, only six men in all of history can be compared to Thomas Jefferson-Sir Isaac Newton, William Shakespeare, Socrates, Galileo, Leonardo da Vinci, and Alexander the Great.  In deference to readers of the "State Journal", I would also include the woman who invented breast feeding.  Were it not for her, none of us would be here.  But beyond this pantheon, even the most talented are just specialists in their respective fields.

Jefferson did more than just create the United States of America on parchment in 1776.  His vision of America recognized that the nation needed to be larger than thirteen coastal colonies hemmed in by the Appalachians.  Long before he negotiated the Louisiana Purchase, Jefferson had already planned the great expedition that his personal secretary, Capt. Meriwether Lewis, would make. 

Jefferson doubled the size of our foundling country with the Louisiana Purchase.  In doing so, he began the chain of events that would stretch our country from coast to coast and free us from meddling by European states.
     

Jefferson also projected American influence when he dispatched our navy to the Mediterranean.  The Moslem states of North Africa had long terrorized sailing ships, stealing cargoes and imprisoning sailors of any country refusing to pay tribute.  The Barbary Pirates were quelled in relatively short order.  The pirates had taken an estimated 2,000,000 sailors into slavery and were known to work men to their deaths.

America, as we know it, a continent-wide nation able to project its power around the globe, happened only because of Jefferson’s vision.

In the late 18th century, smallpox was as common as heart disease is today, though its primary victims were infants and children.  Thomas Jefferson made smallpox inoculation the nation’s first public health program.  Using cowpox vaccine developed by Dr. Edward Jenner of England, Jefferson inoculated his family and the slaves on his staff.  He also sent the vaccine with Lewis and Clark to offer its protection to the Indian tribes they would meet.

Jefferson corresponded with Jenner and opined that smallpox could be wiped out with widespread use of Jenner’s vaccine.  Jefferson was proved correct, but not until 1980. 

We know nothing about smallpox in 2006.  We cannot imagine an unmapped, undiscovered Louisiana Purchase.  We do know of Moslem hijackers, but would we have approved sending an untested navy to rout them from their hideouts?   We say that slavery is wrong, but we never pass up bargain sales on goods made in foreign sweat shops.

It is fair to say that we have a poor perspective from which to judge this man, Thomas Jefferson.  Especially so, if we are wont to negate his accomplishments solely because he was a Virginia slave owner.

A man of Thomas Jefferson’s letters will not be forgotten by history.  I, for one, am glad that I had the time to read his biography before history necessarily forgets me.  Believe it or not, his life story was much more inspiring than Dr. Phil’s fireworks show.

Friday, June 16, 2006

Immigrants Helped Shape West Virginia

Immigration policy has become an emotional issue in the post-9/11 era. Americans in every state advocate building a wall from the Gulf of Mexico to the Pacific Ocean. We want every in-bound cargo container inspected for stowaways before it’s loaded on a ship in a foreign port. Our policy towards Cubans remains to turn them back to Castro. We want barriers to immigration. We want America to be a gated community.

It does surprise me that most West Virginians parrot Pat Buchanan when it comes to closing the borders. In the last five years, how many times have I heard disparaging remarks about Mexicans taking "our jobs"? Although many West Virginians entrust their lives to physicians who were born in the Middle East or India, few of them bother to learn to correctly pronounce their doctor’s surname. I guess that Rajiv and Ahmed can stay but Juan and Arturo must leave.

Before West Virginians get too high and mighty about their American heritage, I would suggest that everyone read "Transnational West Virginia" published by WVU Press. This collection of essays is an eye-opener for folks who always thought that the Mountain State was a homogenous English-German colony. It turns out that we are more diverse than you think.

Were it not for iron puddlers from Wales, Wheeling would never have become a steel town. Were it not for glassworkers from Belgium, Clarksburg would never have had a glass industry. Immigrants made our industries hum.

Immigration was considered so important to the economic development of West Virginia that the state appointed Joseph Diss Debar as Immigration Commissioner in 1864. Diss Debar, a native of Switzerland who lived in Doddridge County, is best known for designing the state seal. But in his role as commissioner, he was charged with soliciting immigrants to come to West Virginia.

In the closing chapter of "Transnational West Virginia", the circle is completed when 750,000 West Virginians leave the state between 1940 and 1960 for jobs in Akron and other industrial towns. Our out-migration continues to this day and is one of the main reasons for the state’s dismal economy.

Though it represents just a sliver of American immigration since 1864, "Transnational West Virginia" makes two salient points about immigrants. First, immigrants are drawn to areas where opportunities to make a living exist. And second, immigrants do assimilate into the American culture, just not necessarily in the first generation. In most every situation, their children are Americanized by the public school system.

On a national scale, we need to tailor our immigration policy to optimize these two facts. We need unskilled laborers to clean hotel rooms as well as highly skilled software engineers for our tech industry. We need to make sure that our newly-arrived immigrants understand that they can still appreciate the ways of their old country, but that their ultimate goal in coming here is assimilation into American society.

Allowing immigrants to forego learning English as their primary language is nothing but politically correct folly. Since Day One, second-language ghettos have bred crime and criminals. Requiring English literacy has been and remains the pathway to assimilation and good citizenship.

The last time I checked, America was not a labor union with a seniority system. Our system thrives on competition; nobody gets points for the date of entry of his ancestors. If you believe a Mexican is going to take your job, then work harder or get smarter. America has consistently rewarded productivity and ingenuity, not seniority.

America will probably be the land of opportunity for most of this century. As such, we will continue to be a magnet for immigrants. And that is a good thing. Immigrants who thirst for the American dream will only make our country more vibrant. Closing the borders, on the other hand, will only speed our downfall.

When our leaders debate immigration policy, they should hold a picture of the Statue of Liberty with one hand and a picture of Elian Gonzalez being held at gunpoint with the other. These images represent the bookends of the debate, and they leave plenty of latitude for a sensible immigration plan.

       



"Transnational West Virginia" is available at www.WVUPress.com

Friday, May 26, 2006

Dead Cows Don’t Wear OSHA Orange

The state that boasts it is "Open for Business" recently made headlines in national and regional newspapers for giving the "business" to its citizens. The laughable folly that is known as West Virginia state government proves once again that it cannot solve even the simplest problem.

In late April, a dead cow floated down the West Fork River and got snagged at the West Milford dam in Harrison County. Had Elsie died a week earlier, when the river was higher, she’d have floated through unnoticed. After a few days in West Milford, however, Elsie began to smell. And that’s when the town of West Milford called for help.

The town found out quickly that no office of state government wanted the job of removing a dead, bloated cow from the West Fork River. Every agency that the town called had its reason for not being able to help.

The Clarksburg Water Board owns the dam. But since the cow was actually stuck on a tree snag upstream of the dam, they weren’t the responsible agency.

The Department of Natural Resources said it was responsible only for wild animals.

The Department of Environmental Protection said the dead cow did not pose an environmental issue and declined to help. (Pray tell. What is an environmental issue?)

Experts proclaimed that the decaying carcass wasn’t a threat to the drinking water of downstream cities. (Translation: We’re adding extra chlorine instead of removing the stinking beast!)

The governor was busy practicing NASCAR flagging, but his aides referred the town to the Department of Agriculture. The Department of Agriculture said that dead cows were a local issue. Apparently, this agency only regulates livestock!

Finally, in desperation, the town called the Treasurer’s Unclaimed Property Division. But they said that the only unclaimed properties they handled were cash, bearer bonds, and fenceable jewelry.

This is West Virginia-the state that shuts down elevators in state-owned office buildings rather than inspect them according to state law. This is West Virginia-the state that financed a movie piracy studio run by state employees in the capitol basement. This is West Virginia-the state where you can embezzle tax dollars at will!

Good grief, West Milford! What did you expect?

Fortunately for West Milford, their volunteer firemen were up to the task. With help from the Nutter Fort VFD, the firemen pulled the dead cow to shore. The Division of Highways (an agency with absolutely no reason to be involved in the matter) then hauled the carcass to the landfill.

The national government is telling us to expect a bird flu pandemic in the near future. The national government has spent millions of homeland security dollars for the protection of drinking water supplies. In spite of the fact that we are facing threats from a natural disaster as well as a terrorist attack, West Virginia is not even up to the task of removing a dead cow from one of its major rivers.

We laugh about a dead cow rotting in a river. Even West Milford’s Fire Chief punned, "Someone had to take the bull by the horns." But our fellow Americans laughed at us all the harder as the cow rotted for three weeks while state leaders passed the buck.

There is a valuable lesson to be learned from this latest fiasco by state government. In the end, it was a group of volunteer firemen who had enough pride in their community to get the job done.

To this end, we all need to volunteer. We need to hold our noses and clean up state government once and for all. Otherwise, we’ll continue to get nothing but "West Virginia excuses" for our tax dollars.