Richard Rider Rant

1. Local College Econ Prof Parrots "Wisdom" from Internet Spammers
2. Duncan Hunter's HUGE Fund Raising a Farce
3. All of Rider's Major Lawsuits Have Been about Properly Voting for Tax Increases and Issuing Bonds
4. In This Game, God Abandoned the Methodists
5. The Insanity That Is Oakland: Illegal Affirmative Action in Firefighter Selection
6. Here's My $10 Cash Christmas Present -– from Me to YOU!
7. CraigsList Bans Our Gonzo San Diego Firefighter Ad
8. The New (Well, Recent) Multi-TRILLION Dollar GOP Spending Plan
9. End the War on LEGAL Drugs

1. Local College Econ Prof Parrots "Wisdom" from Internet Spammers

RIDER COMMENT: Up until last year, I used to do an annual economics debate at Grossmont Community College. It was a three-way debate. Naturally I represented the free market economics viewpoint. One of my opponents proudly declared at the outset that he was a staunch Marxist, and proceeded to present that thoroughly discredited economic theory. To provide the centrist viewpoint, another professor represented the "European socialism" (his words, not mine) "moderate" alternative. I'm serious!

And get this: The avowed Marxist -– Professor Will Cummings -– is the head of the school's economics department!

The reason they called me in was that the school -– a big booster of "diversity" -- oddly enough had no free market professors, or any academic anywhere close to that viewpoint. Indeed, apparently they could not find such a professor in all of San Diego -– so they had me show up instead.

In the debate, I was a leg down for two reasons:
1. Almost all the audience was comprised of the students of one or both of the professors.
2. I lacked the academic credentials of my opponents -– a modest drawback when it comes to credibility.

Still, I think I more than held my own. I think that the debates still go on, though without me there. I hope they found some wayward token free market academic to beat up on.

But to my story. The last time I did this debate in the spring of 2006, Professor Cummings made the single most uneducated assertion I've ever experienced from a supposedly intelligent, knowledgeable academic. Even more amazing, it was not some offhand remark -– it was a flyer he had printed (doubtless at taxpayer expense) and distributed to the audience.

The flyer is stunning verification that, to be a Marxist in this day and age, you have to be a certified idiot -– which fortunately for Cummings does not disqualify one from heading a modern collegiate economics department. The unfunny part is that Cummings et al are indoctrinating hundreds of Grossmont C.C. students every year with unchallenged economic tripe.

It turns out that the core of Cummings flyer is almost verbatim an old chain letter that has been circulating the Internet for many years, for the edification of economic illiterates. For him to adopt this silly spam email as a viable economic strategy is simply stunning.

In his flyer, the chain letter is preceded by Cummings' own cute remarks, digging himself further into an embarrassing hole.

Okay, okay -– to the chain letter. I had it typed up to share with you all. See below (with my comments in bold italics).

The core assertion is that if 10% to 15% of consumers boycott Exxon, all gasoline prices will plummet.

Nonsense! Gasoline is fungible -– interchangeable between companies. If its gas stations are boycotted, Exxon will sell gasoline to other oil companies and independent dealers. Exxon gasoline would be sold to ARCO, Shell or independent stations whose business would pick up (assuming this boycott had meaningful effect). Exxon’s profit margins would remain intact. The folks who WOULD be hurt would be the Exxon DEALERS, and some might very well go out of business.

There is a pretty clear correlation between the number of competing gas stations and the retail price of gas. So guess who gets hurt longer term—the boycotting public!

One thing we free market folks REALLY need for dissemination is the oil refiner/distributor's profit per gallon of gas. I'm sure most people think it is well over a dollar a gallon. My guess is that it’s under 25 cents per gallon, even in this profitable period.

To put that in perspective, consider that in California consumers currently pay more than 60 cents per gallon in direct taxes for gasoline. I'll have more on taxes in my analysis of Cummings' diatribe below. In another asinine statement, Cummings claims that oil companies pay almost no taxes at all. Oh really?

================================

How to Get Lower Gasoline Prices: A Modest Proposal
by Will Cummings

[RIDER COMMENTS IN ITALICS]

Don't read this paper if any of the following are true for you:

1. If you are a masochist and get off by paying $3 plus for a gallon of gasoline.

2. If you are madder than hell about the recent budget busting increases in the price of gasoline, but you have faith that George W. and his brain, Dick Cheney, are going to wrestle with those bad oil companies on your behalf and get them to cough up your money.

3. If you are a free market type, and believe it is all about “supply and demand” and there is nothing anyone can do about high prices.

4. If you feel that the $36.13 billion almost completely tax free dollars that the oil companies earned in 2005 was merely payment for a job well done.

[RIDER COMMENT: This point includes an amazingly ignorant statement from the head of a college's department of economics -– that the oil companies' profits are "almost completely tax free." I wonder if the good professor has ever looked at an Exxon corporate income statement (publicly available -– even in academic ivory towers).

Shucks, I'll do it here. A quick search of the Internet finds this audited info easily. Here it is from one of many sources.
http://www.hoovers.com/exxon-mobil/--ID__10537,period__A--/free-co-fin-i...

Exxon Mobil Annual Income Statement
All amounts in millions of U.S. dollars except per share amounts.

                          Dec 06        Dec 05          Dec 04

Revenue                 377,635.0     370,680.0       298,035.0
Cost of Goods Sold      213,255.0     213,002.0       163,547.0
Gross Profit            164,380.0     157,678.0       134,488.0
Gross Profit Margin          43.5%         42.5%           45.1%

SG&A Expense             83,857.0      86,698.0        82,066.0
Depreciation & 
  Amortization           11,416.0      10,253.0         9,767.0

Operating Income         69,107.0      60,727.0        42,655.0
Operating Margin             18.3%         16.4%           14.3%

Nonoperating Income            --            --          (776.0)
Nonoperating Expenses       654.0         496.0           638.0

Income Before Taxes      67,402.0      59,432.0        41,241.0
Income Taxes             27,902.0      23,302.0        15,911.0

Net Income After Taxes   39,500.0      36,130.0        25,330.0

Continuing Operations    39,500.0      36,130.0        25,330.0
Discontinued Operations        --            --              --
Total Operations         39,500.0      36,130.0        25,330.0

Total Net Income         39,500.0      36,130.0        25,330.0
Net Profit Margin            10.5%          9.7%            8.5%

The key numbers for our purposes are these:

                           2006          2005            2004
Income Before Taxes      67,402.0      59,432.0        41,241.0
Income Taxes             27,902.0      23,302.0        15,911.0
Net Income After Taxes   39,500.0      36,130.0        25,330.0

That means that in income tax ALONE, Exxon pays 41.4% of its profits to government. This does not count all the many, many other taxes and royalties paid to governments around the world (deducted before we get to Income Before Taxes).

5. If you support Exxon’s recent action of generously giving $400 million of your money to its starving president on his retirement.

[RIDER COMMENT: Cummings keeps saying that the oil company is spending/wasting "your money." No, it's NOT your money. In this case, while the payoff of $400 million to a departing CEO is ludicrous, it is still not your money -– unless you are a shareholder in the company. Then you really do have a beef!]

6. If you walk everywhere, grow your own food, make your own cloths, use no energy, and do not give a damn about the millions of us that don't live that way.

If you have not answered "true" to a single question, there is hope. Read on.

Now a little economics. The oil industry is dominated by four huge firms: Exxon-Mobil, BP, Royal Dutch Shell, and Total. In the U.S. there are a few more regional powers but they are dominated by and work largely in concert with these "Four Sisters." The managements of the big sisters are smart people and being smart they do not allow their firms to compete with one another by lowering prices because to do so would dramatically reduce their profits. It is far better to preach the virtues of competition in public and to collude to increase profits when out of the public eye. They do of course compete by advertising, location of stations, the supposed differences in the quality of their products, and a few other minor ways, but none that are very meaningful to us consumers. What these oligopolies do is to compete to maximize their market share -– the percentage of industry sales attributable to their firm. The key here is: Anything that erodes this is very threatening to individual firms and economic theory says that we can expect vigorous action on their part to stop this erosion.

What to do? A boycott of gasoline is a non-starter. We have built our lives around automobiles and trucks. Even a week long boycott would only be a tiny blip in oil company revenues but would result in severe disruption of our lives. But what about a partial boycott, one that would target only Exxon-Mobil and its affiliates? It would be easy to switch to another brand and look what would happen. Sales of Exxon would nose dive and with it that all important market share that they have fought so hard to achieve all of these years.

Would it work? It worked in the 1980's when a boycott of Burger King brought them to their knees in less than two years. At the time, all major fast food chains were buying their beef and paper products from producers in Central America to lower their costs of production. The problem was that the U.S. backed oligarchies in these countries used their legal power (they write the laws) to evict the peasants off their land so the rainforests could be cut down for paper and beef raised instead of the beans and rice the peasants formerly raised for themselves. The result was wide spread malnutrition and poverty in countries with expanding GDPs. A boycott of ALL fast food companies would have been next to impossible so the organizers picked one firm to pay the price. Faced with falling sales and shrinking market share, Burger King abruptly stopped buying beef and paper from Central America. For doing the right thing, Burger King then became the sole focus of a buying campaign by the very consumers that formerly were boycotting it. Under threat of being the next boycott victim, it was not long after that the other fast food firms became believers and the boycotts were called off. Score one for the little guys.

[RIDER COMMENT: A boycott against company for its POLICY is quite different than a boycott because of its PRICE. Getting people to boycott for a CAUSE is far easier and "more noble" in their minds. Collectivist price boycotting is another matter.

A company will cave to a boycott on a minor bottom line matter such as the Burger King example. But if a price boycott was tried -– insisting that the company cut its prices 20-40% -- Burger King would have ignored the boycott -– or gone out of business. If the Exxon boycott somehow was successful, the oil company would drop its price 3-5 cents a gallon, the boycott would collapse literally overnight -– and then the price would return to market equilibrium.]

Fortunately, there is already a boycott organized to do this very thing -– a selective boycott of anything that tastes, smells or feels like Exxon-Mobil. The good news is that in one way this boycott should be much easier to organize than the 1980 boycott of Burger King was because we now have the Internet to spread the word. In the 80's it was basically word of mouth and by mail, but at great expense. Today all we have to do is to pass on the news of the boycott to our friends through e-mail to make it work. I am telling my friends to boycott Exxon-Mobile, Citgo, and even Costco gasoline since it buys gasoline from Exxon. Exxon now sells gasoline under many brands. To make sure your boycott works, go to
http://urbanlegends.about.com/library/bl_gas_boycott_2004.htm for details.

[RIDER COMMENT: Yes, DO go to that website. A visit there reveals a bunch of Yahoos with nutty exhortations for everyone to boycott away. Doubtless the proponents are formers students of Professor Cummings. BTW, note that the discussion was in 2004, when the boycott was in full swing (such as it was). Here's Cummings two years later, calling for more of the same. Apparently he's a remarkably slow learner.]

It won't take much for Exxon to feel the pinch –- maybe a switch of 10 to 15% of Exxon sales of gasoline and we will see that all important market share of Exxon falling while competitors are rising. For cheaper oil prices, give it a try and pass it on to your friends. We do not have to dumbly stand by and do nothing.

[RIDER FINAL COMMENT: Needless to say, this Exxon boycott was spectacularly unsuccessful. The collectivists' whining response is that not enough people participated, in spite of the fact that probably every person with Internet access received this chain letter at least once. That's the problem for collectivists -– they want to tell everyone what to do, when to do it, while relying on collective obedience. Hence their love affair with government, which uses ONLY force to enforce its dictates.]

2. Duncan Hunter’s HUGE Fund Raising a Farce

RIDER COMMENT: Someone forwarded this unintentionally humorous email from presidential aspirant Duncan Hunter to his faithful. He praises the HUGE online donation response his campaign received in the first three weeks of November – a whopping $25,000! Whoop-de-do!

As you probably know, Ron Paul supporters (not even the campaign itself) raised over $4.2 million in ONE DAY in November. This month they set the all time single day record exceeding $6 million raised in a single online day.

Why is Duncan Hunter still considered a viable presidential candidate?

******
Duncan Hunter fundraising

November Was HUGE! Let’s make December BIGGER!

Fellow Duncaneers, the final results are in! You made the month of November huge for online giving! READ BELOW: for a special thanks from Duncan Hunter!

In just over 3 weeks time, YOU raised over $25,000 to help take Duncan Hunter to the White House!

Now here's the most amazing number: that was accomplished with only 1% of Hunter's online supporters donating.

WOW!

$25,000 in a mere 24 days with only 1% . . .

Do the math! What if 5% respond in this season of giving?

That's over $125,000 . . . with just 5%. And that's not counting the tens of thousands raised OFF-line during the same period!

3. All of Rider's Major Lawsuits Have Been about Properly Voting for Tax Increases and Issuing Bonds

RIDER COMMENT: As you probably know, over the years, I have been the main plaintiff on several lawsuits. What most people do NOT know is that almost all such lawsuits have involved efforts to force a proper legally-required vote approving major projects that raise our taxes, or issue bonds. We one a BIG one, but lost several others, as the courts tend to prefer not to enforce voting requirements in such matters.

I was reminded of this fact after reading in the San Diego Union-Tribute a good letter to the editor by my friend and political co-conspirator Ed Teyssier. His piece concerns the proposed (and unfunded) new downtown library, which Mayor Golding assured us we would get to vote on, but never happened.

Here's Ed's letter:

Time to turn page on an old library?

Linda A. Canada's comments (Letters, Dec. 13) should inspire the San Diego City Council to finally put this matter on the ballot for a vote, up or down, by the citizens. Canada believes the citizens simply aren't informed about the advantages of a downtown library. All the more reason to put it to a vote.

As chair of the San Diego Libertarian Party, I believe the resulting give and take of ballot proposal debates would educate voters, and the voters, in turn, would finally put this matter to rest, one way or the other.

EDWARD TEYSSIER
San Diego

4. In This Game, God Abandoned the Methodists

RIDER COMMENT: Hope springs eternal. If you haven't seen the last play in the recent football game between Trinity College of San Antonio (who?) and Millsaps College (who??), you WILL want to watch this short video. Trust me.
http://myspacetv.com/index.cfm?fuseaction=vids.individual&videoid=210859...

5. The Insanity That Is Oakland -– Illegal Affirmative Action in Firefighter Selection

RIDER COMMENT: Here's an instructive story that didn't make the San Diego area news, but perhaps should have. Oakland, unlike our local fire departments, takes city firefighter applications without the usual prerequisites. In addition, the city takes them in person on a given day.

The result was that 2,000 people showed up on hiring day for 24 openings, completed applications in hand. What happened next was (as the SAN FRANCISCO CHRONICLE article below describes it) "one of the most embarrassing displays of ad hoc affirmative mis-action the city has seen in some time." Read the story for the lurid details.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/12/10/BAOLTQJLN.DT...

Most urban fire departments know better than to have such an embarrassing open application program. The turnout and the resulting publicity show just how desirable a professional firefighter's job is –- undercutting the union's demand for ever-higher pay and benefits. Furthermore, it costs a boodle to process so many applications.

So why does Oakland have no significant academic prerequisites? I suspect I know.

Oakland, a shrinking city of under 400,000 people, is a minority community. Only 31% of the population is white, while 36% is black. If Oakland followed the lead of other large cities and required the academically challenging EMT-1 certificate prior to applying, then relatively few local residents (who, for whatever reason, are less inclined to take and pass the EMT-1 course on their own) would be able to apply, while predominantly white applicants from out of town would.

Surely that desire to have local residents fill these plum spots is why Oakland has a residency requirement. Unlike fire departments in San Diego, an Oakland public safety worker has to reside from the first day within 10 miles from the center of Oakland, and can't live across any bridges. http://www.oaklandnet.com/oakweb/fire/employment/HowPrepareFirefighter.p...

Oddly enough, while the motives for such a residency requirement might be to discourage job applicants from out of town and give jobs to local minorities, I think that this type of residency requirement is a sound idea [– if the supply and demand of a position allow such requirements to be part of such public safety jobs.

In San Diego County fire departments, apparently the only residency requirement is that you live within a few hours of where you work. Hence far too many firefighters (who have to commute to work only 10 or less days per month) end up living far away from their employing city -– frequently in the next county. After all, no matter how much you make, you can buy a bigger house with the same dollars in a relatively rural area than you can in San Diego.

The allowed travel time is based on clear, open roads. If I-15 and/or I-5 are closed due to a fire or earthquake, many critically needed off-duty San Diego area firefighters supposedly on quick response recall will not be reporting to work for many, many hours.

6. Here's My $10 Cash Christmas Present -– from Me to YOU!

RIDER COMMENT: Well, to some of you. And it's not really from me. And it’s not exactly cash. But let's not quibble here.

AT&T, my area's "Ma Bell" local phone service, apparently sent all business line clients a little Christmas card that few paid any attention to. But I did.

The card offers a free $10 Barnes and Noble gift card -– with no strings attached. It can be used at the store, or on the B&N website.

All you have to do is call this number 1-866-901-8389 and give them your business line number (the main one). In return, AT&T will send you the free gift card at your business billing address. Call them before the end of February, 2008.

No sales pitch, intrusive questions, or other annoyances. I called, got right in and completed my efforts within 60 seconds.

In keeping with the season, I now feel all warm and fuzzy from making such a selfless gift to my closest friends.

7. CraigsList Bans Our Gonzo San Diego Firefighter Ad

RIDER COMMENT: On 20 December, CraigsList yanked our San Diego firefighter ad. And no refund! It's been running since about 2 December, so perhaps it served its purpose.

Not sure exactly why they pulled it (they won't tell you), but it had to be initiated by firefighters complaining. I'm not that surprised. Shucks, I might have even more fun with a banned ad than a running ad!

They banned our ad in SD and Bakersfield, but apparently haven't yet found our paid ad on CraigsList in OC, LA, Sacramento, Chicago and NYC.

8. The New (Well, Recent) Multi-TRILLION Dollar GOP Spending Plan

RIDER COMMENT: I realize that the federal government's unfunded liabilities are MEGO -– My Eyes Glaze Over -– dollars. To tailor the old Carl Sagan quote – "trillions and trillions of dollars." But hear me out.

It's always good to get the deficit update from a reliable source inside the government -– in this case the GAO's comptroller. As monumental as the figures below are, I suspect that they are still a bit understated.

Of particular interest to me is the multi-TRILLION dollar added deficit from just a single Bush/GOP backed program =– the fed's new 2003 prescription drug giveaway. Here's the salient quote from the comptroller:

The prescription drug benefit alone represents about $8 trillion of Medicare’s $34 trillion gap. Incredibly, this number was not disclosed or discussed until after the Congress had voted on the bill and the President had signed it into law. Generations of Americans will be paying the price—with compound interest—for this new entitlement benefit. In many ways, the 2003 Medicare prescription drug episode arguably represents government "truth" and "transparency" at its worst. Unfortunately, based on adding the prescription drug benefit and other spending and tax actions, the federal government seems to be ignoring the first rule of holes in connection with its fiscal affairs. Namely, when you’re in a hole, stop digging!

Please, someone remind me again why we are better off with the Republicans rather than the Democrats running government.

Reason Magazine's Blog, December 18, 2007
http://reason.com/blog/show/124003.html

9. End the War on LEGAL Drugs

RIDER COMMENT: Government regulation kills people every day. Here's a prime example, from the Wall St Journal.

The article "Stop the War on Drugs" is not about my libertarian position favoring the ending the war on illegal drugs and their users, but rather the government's relatively new war on LEGAL drugs. Such profit seeking government litigation-driven nannyism could kill you, me or anyone.

WALL ST JOURNAL, Stop the War on Drugs
http://online.wsj.com/article/SB119786300762133127.html