May 21, 2005
The golf trip

As promised earlier, this link will take you to this week's golf column. It's about this spring's golf trip to the north end of the Myrtle Beach Grand Strand. In addition, there's a story about a recent hole-in-one by Pete Oakley, a Champions Tour player from this area.

I hope you like it.

May 19, 2005
The smell of progress

As spring weather warms up southern Delaware, there's a frequent temptation to open up the car's sunroof and drop down the windows for a blast of fresh air.

Sometimes that's not such a great idea:

On the other hand, some folks call this the smell of progress.

May 18, 2005
Not so friendly skies anymore

United Airlines has been mired in bankruptcy proceedings for quite a while now.

The creditors who leased to the giant airline quite a few of the airplanes that flew the formerly friendly skies are becoming more than a little antsy about the prospects of ever being paid. When slow pay becomes no pay, that’s perfectly understandable. 

Some of these folks joined together to attempt the repossession of 14 of the planes, as they had a right to do under the Bankruptcy Code and the special rules that apply to airplane leasing agreements.

Imagine their surprise when United sued them under the nation’s antitrust laws. Imagine the creditors’ further surprise when the bankruptcy judge blocked their collection efforts, effectively enjoining them from any further attempts to recover the planes and re-lease them or sell them for whatever residual value the jets might still have.

Perhaps this initial reaction to the creditors’ efforts isn’t such a big surprise. After all, a run on United’s leased fleet might have a disastrous effect on the company’s efforts to stay intact. On the other hand, on May 16 the Seventh Circuit took an extremely dim view of United’s approach to debtor-creditor relations, in a unanimous panel opinion authored by Judge Frank Easterbrook.

I especially liked the tone used by the judge to describe the situation:

When United entered bankruptcy in 2002, and negotiated the current reduced rental payments, it projected that reorganization would be accomplished in six months. Two and a half years later, United is losing more than $1 billion annually and is not promising to propose a plan of reorganization any time soon. Some creditors are bound to have second thoughts. 

Yup. 

The panel didn’t have much trouble considering the airline’s antitrust theory to be underwhelming, either:

Competition comes at the time loans are made; cooperation in an effort to collect as much as possible of the amounts due under competitively determined contracts is not the sort of activity with which the antitrust laws are concerned. ***

It does not matter whether, as United suspects, the lessors are engaged in strategic behavior. The statute gives them that entitlement, treating aircraft different from other assets. A credible threat to repossess the aircraft changes the terms on which post-bankruptcy bargains can be struck; it is exactly this prospect that makes credit available on better terms when air carriers shop for financing in the first place. United obtained the sort of terms that were available from creditors secure in their ability to repossess the collateral; it must live with those terms now, just as it must pay the current market price for jet fuel. ***

[T]he antitrust claim is thin to the point of invisibility.

The panel also reminded the parties of the basic economic realities of the situation, and pointed out the potential risks and rewards for both sides:

The competitive solution is for both sides to have access to markets—and that outcome is achieved by allowing repossession. The lessors will get the current market price for airframes of the type and age involved. United, too, will enjoy a competitive price: it can buy or rent equivalent planes on going terms. If ... the spot-market price is below not only the original rental terms but also the modified terms set when United filed for bankruptcy in 2002, then United will be better off as a result. Its problem arises if, as the lessors are betting, the price of used airplanes is higher than what United is now paying for these 14 aircraft. But if, as United contends, the highest and best use of these planes is with United, and the current competitive price is less than what United is paying in bankruptcy, then the threat to repossess is not credible, and United will keep the planes without judicial intervention….

The panel then reversed the lower courts and remanded with instructions, including an order to permit repossession unless United immediately caught up on its rental obligations. 

That’s a painful reality for the airline, but one that its leadership probably should have foreseen. For their sake, I hope they find a way to come in for a soft landing from this unimpressive legal flyer.

May 16, 2005
Fun speechifying

The folks at the Midway Lions Club invited me to give a luncheon speech today about the City of Brighton proposal.

I first went public two years ago with the idea of creating the first new city in Delaware since 1981, and the initial reaction was largely favorable, if a bit muted.

With the continued torrid pace of development in the area since that time, however, the interest in following through on this proposal is now increasing.

Today's speech touched upon the same basic elements described in the Brighton website materials. I'm to make a similar presentation to another local group in early June.

I'm beginning to feel hopeful that a critical mass of similarly-minded folks is beginning to build to the point where the new city idea may actually come to fruition.

Giving the speech was fun, too, as was handling the questions afterward.

May 14, 2005
Shameless self-promotion

This afternoon I posted my newest golf book review.

Golf's Short Game for Dummies is a useful collection of playing tips for the part of the game that most amateurs spend too little time practicing. It's a well-done addition to the popular Dummies® series.

May 13, 2005
Not so sweet subsidy

A few months ago I wrote a blog post supporting the Bush Administration’s effort to reduce farm subsidies.

Thankfully, I’m now being joined by some august company. 

The Wall Street Journal’s lead editorial today [subscription required] discussed the effects of one of the more outrageous commodity subsidy programs and its effects on the potential Central American Free Trade Agreement (Cafta).

It’s a great editorial about the domestic sugar industry and its outsized, undeserved influence on American politics.

I especially liked these two segments, focusing on Florida’s Fanjul family and the tiny number of other cane growers:

Sugar is a classic case of what Milton Friedman once called the Law of the Few—that in a democracy the intense interests of a few can often trump the diffuse costs spread among many. If Little Big Sugar kills Cafta, the gains for the Fanjuls would be dwarfed by the loss of potential new export markets for U.S. meats, grains, fruits, beans, potatoes, poultry and eggs, fertilizer, dairy products, and feed. The American Farm Bureau Federation estimates that market at $1.5 billion per year. *** 

Mr. Bush should tell the Fanjuls and their friends that if Cafta fails he will use his executive authority to raise the U.S. sugar quota by one million tons, or about 10% of the American market. In policy terms, that would treat sugar like every other farm commodity. But the real message would be to show the sugar lobby that it won’t be allowed to run U.S. trade policy with impunity.

I’m sure that to some small extent my thoughts on this matter are influenced by what I read—especially when the novel I’ve just finished reading is Carl Hiaasen’s Strip Tease. The main plot line revolves around a South Florida Congressman in thrall to a local sugar baron.

Nonetheless, there’s a strong logic behind the notion that our neighbors to the South would be in better economic shape in the long run, and thus we would be also, if the domestic sugar lobby’s apparent stranglehold on American trade policy was eliminated.

Ending that dominance would be, as they say, sweet.

May 12, 2005
Well, that one does sound a lot more suave than the alternative

It’s interesting to see what will bring out the displays of wounded pride in some people.

A con man named Glenn Benton Finck took advantage of a relatively gullible motor vehicle dealership in Springfield, Missouri. Finck managed to obtain several fine cars, an RV, and a trailer from his victim by passing himself off as Beau Lee DuBois, a stockholder in a California winery. The scheme even included assurances from a person claiming to be from Bank of America, assuring the dealership that the money had been wired. 

That assurance was as false as Finck's promise to pay.

Eventually the plan unraveled, however, and the authorities caught up with Finck in Austin, Texas. At that time he was still using the name Beau Lee DuBois.

In the inevitable appeal from a 63-month sentence for a wide assortment of Federal crimes, Finck challenged the punishment on several routine grounds, none of which were successful. 

Finck added an additional, noteworthy wrinkle to his appeal to the 8^th Circuit, however. He claimed that the District Court violated his due process rights by using the name “Glenn Benton Finck” in the court proceedings, including the judgment.

The police originally charged Finck under that name, but as noted above, he went by the “Beau Lee DuBois” moniker while he was committing these crimes. The trial court added that name as an AKA reference in the caption.

According to Finck, the failure to limit the charge to the DuBois name alone had serious consequences:

Finck asserts that he has endured hardship amounting to a due process violation as a result of the district court entering judgment against him as “Glenn Benton Finck” because the Bureau of Prisons now refuses to recognize the name “Beau Lee DuBois,” under which he has previously served time in federal custody. Thus, for example, he has been required to retake a training course that he has already taken under the name “Beau Lee DuBois.”

Poor baby. 

Nonetheless, the Circuit Court was not exactly moved to tears by this claim: 

We find the caption’s mention of “Beau Lee DuBois” as an alias sufficient to inform the Bureau of Prisons that Finck and DuBois are the same person. [citation omitted].

A footnote in the case suggested at least a partial explanation for the Court’s reluctance to adopt this unusual and bogus argument:

The [Presentence Investigation Report] indicates that Finck has used fifty-three aliases.

I just wonder what the training course was that Finck found so objectionable to being made to take it a second time.

Then again, self-inflicted wounds are among the most painful.

Perhaps he should have used one of his other 52 names when he snookered that Missouri dealership.

May 10, 2005
A moralizing, semi-interfering universalist—not that there’s anything wrong with that

Here’s a tip of the hat to Professor Bainbridge for introducing me to an interesting test of one's reactions to a set of problems in morality.  

In turn, I thank Tyler Cowen for tipping Bainbridge.

My results were as follows:

Your Moralising Quotient is: 0.67. Your Interference Factor is: 0.60. Your Universalising Factor is: 0.80.

These scores would not surprise any of my family members or close friends, if they saw the questions.

I believe they also dovetail with the results of a test I took a few years ago, in which Thomas Aquinas was identified as my closest philosophical match.

May 9, 2005
Adapting to the human environment

Several years ago my clients at DelDOT came up with a relatively inexpensive design to cross a small stream bed in the Christina River watershed, as part of a major road construction project in New Castle County.

As planned, the box culvert they had in mind would have cost about $200,000 to install.  Unfortunately, the environmental permitting agencies had to approve the plan, and they didn't like this idea. Their staffers insisted that small critters in the area, including turtles and other local wildlife, would not use the culvert to cross from one side of the road to the other.

At the time, DelDOT didn't have any real response to this allegation, and so the engineers changed the crossing design to a bridge in order to accommodate this particular environmental risk.

That bridge cost $2 million.

Thanks to an ongoing study by Bridget Donaldson of the Virginia Transportation Research Council, however, transportation agencies should have a somewhat easier time convincing their environmentalist counterparts that a well-designed culvert structure will give our wildlife friends a good opportunity to adapt to us humans.

Here's how a recent press release described her project:

Donaldson is evaluating seven underpass structures throughout Virginia to determine the extent of use by deer and other wildlife, the structural and environmental features that might influence their use, and their effectiveness in reducing deer-vehicle accidents. She receives data from remote digital cameras that capture images based on infrared heat and motion sensors.

What's really cool about this study is that the Virginia DOT is posting infrared pictures of the animals using these culverts, which you can see here.

It's not just deer and coyotes, either. One photo at the site shows a blue heron walking through.

There are other potentially significant benefits to the use of these crossing culverts. Car/deer collisions are on the increase nationwide, and these culverts could play a large part in reducing that risk. Donaldson quantified one aspect of the cost/benefit analysis relating to these accidents in this quote:

"While many successful crossing structures cost less than $200,000, studies have estimated the cost of a single human traffic fatality at more than $3 million in lost income, medical costs, and property damage.”

According to the release, the study should be completed by the end of the year.

I expect that the state transportation agencies in the Northeast, Mid-Atlantic, and Southeast regions will pay close attention to the final results.