The NFL Draft and the Division of Labor

By Doug French

[From April]

Tonight, the second-most-popular televised football broadcast of the year takes place from New York's Radio City Music Hall. ESPN will broadcast round one of the NFL Draft, with the remaining rounds to be broadcast on Friday and Saturday. An estimated 40 million people will watch the draft, an event that even for the most interested fan moves at a snail's pace.

"We all thought, way back when, how can this become the most watched non-movement sporting event in professional sports?" former NFL executive Carl Peterson says. "That's what it is. Nobody's moving. We're just drafting. Now it's prime time. Thursday night?"

The draft has come a long way since beginning in 1936, when teams selected players based on rumors and gut feelings. Now the business of drafting is big business, and the business of scouting and projecting what teams will pick which players is equally big.

In 1979, the brand new ESPN petitioned the league to televise the draft live. The network was initially turned down by a unanimous vote of the league owners. But ESPN persisted, and in April 1980, the cameras rolled as Oklahoma running back Billy Sims was selected first by the Detroit Lions on an early Tuesday morning.

But it was one man's work that provided the inspiration to televise the draft, leading to an entire industry that revolves around pro football's spring ritual. Joel Buchsbaum was a small, frail recluse who left his apartment in Brooklyn only to walk his dog, visit his mother, or go to the gym. He would leave Brooklyn only once a year — to attend the NFL draft in Manhattan. But the five-foot-eight-inch, 100-pound Buchsbaum was a giant in player analysis, who, as Dallas Morning News reporter Juliet Macur writes,

    could tell you anything about football, anything about players — even from 10 years ago. Heights. Forty-yard dash times. Injuries. If a guy sprained an ankle, he knew which ankle.

When a Police Athletic League coach told Buchsbaum he was too small to play sports he began a lifelong obsession with player analysis.

Buchsbaum wrote for Pro Football Weekly and each year produced… (Read more)

Source: Mises.org

Profits ARE Socially Responsible

Back in 1997 Gregory Bresiger penned a piece for the Free Market tearing apart the notion of "socially responsible investing" (SRI). Managers focused on social issues instead of profits will perform poorly as resources are diverted to unproductive uses. Bresiger looked to close the argument with this seemingly absurd proposition:

But SRI funds do point the way to solving a myriad of political debates in this country. Whenever a politician suggests a new tax, mandate, or regulation on business, let's first try it out on one of these "Socially Responsible" companies, purely on a voluntary basis. Let it pay higher taxes, insurance premiums, and wages, while adopting ever more rigid quotas and union rules. Then we can watch what happens to its stock price relative to everyone else's. Any takers?

More than a decade later there are takers. The Wall Street Journal reports that in seven states companies can register as benefit corporations, allowing the firms to pursue social and environmental goals without the worry of shareholders suing them for not maximizing shareholder value.

These corporate charters aren't tax exempt or nonprofit. Companies choosing to be benefit corporations pay Uncle Sam like any other for-profit company, but have… (Read on)

Source: Mises.org

How to Fix the Housing Crisis

By Doug French

 

The foreclosure crisis has crawled on for going on four years now with no end in sight. The S&P/Case-Shiller index for August fell 3.8 percent from a year ago. The index includes home prices for 20 US cities.

 

"Continued house price declines could lead to even more defaults, foreclosures and distress sales, undermining wealth, confidence and spending," William Dudley, president of the Federal Reserve Bank of New York said. "Breaking this vicious cycle is one of the most pressing issues facing policy makers."

 

Every one of the Republican presidential candidates is being asked how they would handle the slow-motion housing wreck. Long shot Newt Gingrich says he would rewrite the rules to make it profitable for banks to renegotiate loan principal amounts.

 

"He disagrees with his Republican colleagues that the free market will find a fair way to let the banks and homeowners work things out," writes Karoun Demirjian for the Las Vegas Sun.

 

President Obama has jumped in to adjust Fannie Mae and Freddie Mac rules to allow refinances for loans exceeding 125 percent loan to value.

 

The president says this will save underwater… (Read more)

 

Source: Mises.org

The Market Stars in 'Margin Call'

By Doug French
 
The 99 percent occupying Wall Street won't get much satisfaction from J.C. Chandor's Margin Call.
 
The occupiers want to believe that the 1 percent is Gordon Gekko stepping on their throat. Half the protesters are aged 20–29, highly educated, in hock up to their ears in student-loan debt, and unemployed. Surely this is someone's fault. The 99ers want what Wall Street has to offer: money, power, and a black town car to pick them up and shuttle them to and from work each day.
 
Forget peace on earth: these folks want to be Masters of the Universe. And they don't understand why their freshly minted diplomas haven't made that possible. However, the money, power, and lifestyle only percolates to a few; and when the asset bubbles pop, the party is over, and the falls from grace severe.
 
Margin Call opens with corporate soldiers being carried out on their shields, dismissed in the open, while those who remain nervously wonder if they are next.
 
Young members of the risk-management department of the mythical… (Read more)
 
Source: Mises.org