Ears and assholes

The Office of Management and Budget website, www.earmarks.omb.gov, defines earmarks as, “funds provided by the Congress for projects or programs where the congressional direction (in bill or report language) circumvents the merit-based or competitive allocation process, or specifies the location or recipient, or otherwise curtails the ability of the Executive Branch to properly manage funds.” In defense of earmarking, a legislative tactic Democrat and Republican parties employed, they were part of broader best response strategies. Yet, relying on them as a preferred method of enacting legislature damages the health of the democratic process. If used uniquely, why should legislators even bother to compromise or even write a unifying and unified bill if granting earmarks effectively buys votes? 

 

Let’s have a look at how earmarking spiraled from the start of the Bush presidency. When Republicans controlled the legislature even prior to 9/11 and the increased emphasis on defense spending it brought, cheerleading, touting, and unquestioning rubber stamping of executive spending initiatives was commonplace as evident in No Child Left Behind, faith-based agencies, and missile defenses. President Bush returned the favor for towing the administration line by signing big sending bills full of pork into law. Though bent on a DeLay-an vision of perpetual and untrammeled control, the Republicans lacked a super majority to quash a filibuster on contentious issues or confirmations. Moreover, the Republicans lost the moral high ground on matters of fiscal probity and austerity in this watered down corrupt bargain; Republican legislators had to tacitly accept the same play used by their counterparts. 

 

After the 2006 mid-term elections, Democrats, slighted and skeptical of the ability of the Executive to budget responsibly, continued to use this tactic. The result has been short of scandal only because earmarking is technically legal under legislative procedure. That it is a remedy of seeming first resort, a proactive rather than an all else fails alternative, is very alarming. Rampant and profligate abuse of a legal, yet dubious method of obtaining funding has precipitated in a race to the bottom. In another defense of earmarking, it has made the legislative process more transparent and efficient, albeit perversely. Using earmarks as a first option has exposed the motives of Congressmen with respect to which lobbyists have their ears. The voter can see where the money goes and why much more quickly than if the proposed spending were subjected to the rigor of traditional testing – caucusing and compromise. 

 

However, that is little consolation and benefit when compared to the elimination of any incentive for legislators to do any work - small wonder at the ‘do-nothing’ appellation. What made earmarking such an attractive first option rather than traditional deal-making and simultaneously eliminated the impetus for clash? The most plausible cyclical explanation has to with the re-branding of the Executive branch of government and the true legacy of the Bush presidency.

 

Gambling on Democratic quiescence (likely), the administration ran roughshod over an opposition still smarting from the 2000 election. Bush could have dismissed any partisan opposition to his agenda as non-cooperative, spiteful, and sore for at least a little while. 9/11 extended this grace period. However, the administration reaped the whirlwind of polarization strategies. Having to cope with an assertive and incompetent administration hamstrung the Democrats, keen on avoiding a fight for fear of having motives questioned and the corollary fight that such impugning would bring. By using earmarks for their ‘neglected’ projects, they seemed content to wave a pistol every time someone dared them to put up their dukes. The real shame of the earmarking scandal is not in losing a fight but rather the opposition employed a lazy coward’s way of thinking: the pistol was the only way to win it. However, when a Democrat will occupy the Oval Office eventually, he can use the same advantages the present administration has conferred onto the presidency. Perhaps the prospect that one of them could be that figure adequately deters legislators from curtailing some privileges and powers the executive co-opted. 

 

In the end, what makes earmarking so indefensible is the damage they inflict on the long term health of a democracy. To think politicians of an earlier time were above reproach is foolishly incorrect nostalgia, but continued dependence on earmarks as the favored way of political horse-trading brings the Republic ever closer to outright sale of votes. Further reasoning of structural flaws shows the following: without less vague language regarding use of earmarks, the indolent culture of the status quo will persist at least until legislators fulfill their constitutional duty of raising their own pay.

You do what? For how much?

While on the subject of anomalous structures of professional sports leagues, let us look at the PGA Tour. As a non-profit organization, the Tour has endowed millions of dollars to many worthy causes - rather laudable accomplishments. As posted on its website, “PGA TOUR Commissioner Tim Finchem today announced a new TOUR-record, annual-charitable-giving contribution of approximately $123 million, surpassing last year's previous record of $114 million.” Further, the site states, “The PGA TOUR is a tax-exempt membership organization of professional golfers.” Also, the Tour states on its website, “The mission of the PGA TOUR is to expand domestically and internationally to substantially increase player financial benefits while maintaining its commitment to the integrity of the game. In addition to providing competitive opportunities for its membership, PGA TOUR events also generate revenue for charitable causes in their communities.”

 

Finchem’s latest pay packet is worth $4.5 million annually, so is he worth it? Prior to considering the direction of the Tour and the consequences such a future would have on its mission, players, charities, and role cultivating the game of golf, one must consider the context of Finchem through the lens of the Tiger Woods effect. Using back of the envelope calculation, it is difficult to measure the Tiger Woods effect relative to growth rates and scale of purse sizes, charitable contribution, and sponsorship opportunities. Comparative static and marginal analyses of television ratings of events in which Woods played versus the Tiger-less tournaments show a great disparity. It would be interesting to apply regression studies of trend growth in golf had Tiger Woods never existed to see how much impact he has had. One clear and true conclusion: Tiger’s presence has visibly and palpably made the Tour more marketable. However, because the Tiger era coincides with Finchem’s auspices of operations, and hence the two are not mutually exclusive, the causal relationship of Finchem’s stewardship to the level of giving warrants consideration. 

 

Failure during a period of prosperity is rare. Finchem is no dummy, either, for his academic and professional credentials are rather estimable.  Excluding the 4 Major championships, 4 WGC events, there were 38 events the PGA Tour uniquely sanctioned in 2007. Since Tiger plays the aforementioned eight and eight other times, Finchem and his staff must somehow convince thirty groups of sponsors to fund a multi-million dollar purse. Though other bankable commodities play the Tour, only Woods is undeniably special commercially. Given such constraints, Finchem has performed admirably in increasing the opportunity set of total tournaments thereby enabling players to play more as well as creating more channels for financial flows eventually going to charity. 

 

However, using the following formula, $4.5M seems like a lot of money for staying out of the way while the bandwagon effect of sponsors queued for the possibility to land Tiger. Finchem’s salary is 3.7% of total funds disbursed to charity. Moreover, the mean per tournament, when dividing total funds raised by 38 tournaments, is $3,236,842. This strips out eight of the marquee events where Tiger would definitely pitch. Including them in the mix would lower the mean per tournament. Finchem could give away that much of his salary and still be paid 7 figures. Furthermore, Finchem earns, using 38 as the divisor, $118,421 per tournament. Given the scale and purpose of resource allocation, the compensation does not measure well against basic estimates of ethical or economic fairness. Though Finchem does indeed merit a high salary due to the prestige, power, and publicity of the post, he risks the long term health of the Tour in the post-Tiger era. 

 

Partly due to its 501(c6) tax-exempt status, Finchem is free to propose his own pay scale pending approval of the PGA Tour Policy Board comprised of executive officers and player committee members. The office of commissioner has adequate incentive to maintain the status quo. Other non-profit organizations do spend much donated money on administrative costs, so Finchem does not behave differently when measured against other similarly structured groups. But as a firm strives to maximize profit, a non-profit outfit ought to seek to optimize the benefit, often measured in money, to society. Without showing the value added in terms of social benefit, Finchem is unjustified in paying himself so much money. Would so many sponsorship and enrichment opportunities been fully exploited had it not been for Finchem? An account is necessary to determine definitively. Insofar as Finchem is accountable to the Policy Board that approves his salary, what incentive does the board have of ratifying his salary? Or, what motives do the players have of not revolting and turning the Tour structure on its ear? 

 

Mo’ money. A generous pension fund could not be administered and yield such returns, let alone be funded to its extant levels, through a taxable entity or corporation. As the vested interests have become more entrenched, opacity and minimal compliance are the norm and will continue as such until the market dries up. As long as the Tour acts in ways which conform to public standards of taste and acceptability, Finchem will escape criticism. Since too many grosser injustices demand more attention from regulators and consumers, Finchem will continue to capitalize - regulatory arbitrage of a sort – in a culture accustomed to mismanagement where not failing during prosperity is a sufficient criterion for commanding top pay.

Godammit, George!

George Mitchell ought to be ashamed. Having had accepted the mantle of auditor of drug abuse in baseball, the venerable elder statesman brought the gravitas and credibility of a conciliatory agent. Accomplishments on his resume include chairmanships of Walt Disney and DLA Piper, a global law firm. Politically, as a popular senator from Maine, he served as chairman of peace talks in Northern Ireland which led to the Good Friday Accords of 1998. He also authored a 2001 report about possible conditions necessary for cessation of Palestinian-Israeli violent conflict. Publicly perceived as a voice of reason, his assistance to Al Gore during the Florida recount of 2000 gave Gore’s claims an intellectual underpinning. Arguably, he could be one of the most qualified people to be elected president of the United States, though he seems to be smart enough that campaigning for the highest office in the land will certainly ruin his life. 

 

So how does a figure of discretion and prudence, someone a part of the system but above the petty fray, get involved with the steroid scandal in baseball? Moreover, as a principal of the Boston Red Sox, an MLB club, does his authorship of the report pose a conflict of interest? Perhaps Sen. Mitchell’s record of having worked within a system without advancing a personal agenda dispels any impartiality concern. For this, he does not deserve to be maligned. Yet, his cooperation with MLB owners has been a sop to their tendencies towards entitlement of having their cosseted market power protected further. Co-opting the image of Sen. Mitchell, on the part of MLB, is indeed shameless. Sen. Mitchell should have been smart enough to know the significance of agreeing to this project. Given that the MLB owners, though well within their legal authority to elect whomever to the office of commissioner, already have one of their own installed in that office, conflict of interest is no matter to them clearly.

 

George Selig formerly owned the Milwaukee Brewers franchise. That he relinquished control of the team to his daughter upon election to the office is easily construed as a publicity stunt. Because of the antitrust protection, fans – the consumers of the MLB product - had no way of opposing the legal though dubious selection of Selig. Furthermore, unless deemed necessary by his fellow owners, the commissioner cannot be ousted for a lack of accountability. Barring some gross criminal act, seemingly no one bar the owners can hold the commissioner to account. By once again choosing from within to solve its own problems, it highlights the effect of the favorable Supreme Court ruling, (Federal Baseball Club of Baltimore, Inc. v. National Baseball Clubs 1922) it received: by having such fiat regulatory protection, not only can MLB act outside the parameters by which even regulated mutual organizations must abide, but it also seems to have no interest in any solution except self-regulation. 

 

Having such anomalous legal status owes less to a commitment to market oriented solutions than it does to being able to use such an argument only after the regulatory environment had been settled in its favor. A judiciary sympathetic to business saw greater good in reducing the volatility of early baseball leagues. However, the Court does not always get decision right the first time, and sometimes legal precedent ought to be overturned as the competitive sports league market matured. The decision allowed the entrenchment of a flawed organizational structure. While avoiding crises brought on by exogenous forces, the organizational structure has repeated self-inflicted wounds. The steroid scandal is a cyclical problem much like the 1919 Black Sox gambling affair. 

 

However, the structural failings such as the antitrust exemption and the conflict of interest within the top job are responsible for the cyclical downturn. As monopolists seeking to maintain incumbency and price as high as they can according to demand levels, each collective move by MLB ownership can be framed within the context of monopolistic behavior. Despite being a monopoly its own sport, MLB faces falling share within the broader sports market nationally due to alternatives and shifting preferences. MLB seemed content to look the other way as players bulked up. The power style of play – a topic to be addressed in this space soon - is applicable to all modern sport, and in baseball it has filled seats reliably since Babe Ruth. After the 1994 season, MLB faced sharp drops in attention and revenues. Though Whitey Ball may win games, the big stick brings attention. Attention brings revenue streams. In the words of Kurt Vonnegut, “and so it goes.” 

 

It is foolish to think that consumption of baseball will go to zero due to this or some other affair. Merely, MLB will act accordingly within the confines of its demand and cost curves. Created as an unintended consequence of profit seeking, the steroid scandal has also provided MLB another dodge to addressing its own structural deficiencies. Using Mitchell as a convenient figure of probity to investigate purported endemic cheating accomplished two things. 

 

First, it deflected attention from constantly diminishing outrage over an insider in the commissioner’s office. If anything, time has resulted in gradual, grudging acceptance of the practice. Second, the report functioned as a high priced, though necessary peace of spin which cast owners as concerned stewards. Regarding the necessity of the Mitchell Report, according to Selig, "There was a higher cost in not doing this." Certainly, alienating already tenuous consumers and discouraging new interest among fans presents huge costs to owners. Owners could not have imagined the public outcry supporting Clemens et al. For owners, the undeniable value of the Mitchell Report as a PR gimmick justifies its weighty price tag. 

 

MLB owners have been able to perform damage control, deflect criticism simultaneously, and continued defending a crumbling, flawed institutional structure prone to creating its own messes. While no profit motive confronts MLB owners to allow independent oversight, or changes in market demands require a shift in organizational structure, MLB will continue to operate as a monopoly. Rather than defining the steroid scandal as a thing itself, it ought to have been sufficient cause to re-examine the special status of MLB. That the Mitchell Report did not was a wasted opportunity. 

 

Sen Mitchell, you’re better than that.

One thing before he goes...

A brief golf thought: In Tiger Woods' stellar career, he has won at a higher rate than anyone in history. However, one may point to the fact that Woods has never come from behind to win a major. Every major championship he won, he led after 54 holes - no small feat given the pressure of elite-level professional tournament competition. Given the scale and scope of his accomplishments, it is a matter of time before he does win without having to play in the final pairing.

Stop + Look

Welcome. I ought not try to be so funny. In abstraction, the blog will not follow a formulaic schedule of topics on given days, as some events or ideas require prolonged discussion. Nor will this be an exercise in randomness. Rather, I encourage and invite strangers and associates to comment. Shortly, I will provide some links to my limited literary exploits. For today, I will leave off in the fashion of asshole Garrison Keillor with a poem, one of my own:

 

in sleep, the twist and arch 

arch, disquieted and still, shades agony, 

revels in contempt, 

reflects cast iron light washed white 

as it slides by city windows 

 

rethink and murmur 

in a secret tongue known solely 

by you and your devils all tricks

unrequited vows 

and the compacts of resolve. 

 

old wars rage fiercest at dawn 

and daybreak's false respite, 

born of boredom, 

awaits the clamor to renew.

Greetings and Salutations

A quick intro: I have spent the last four years of my life traveling the world as a professional tour caddie. I have pitched events sanctioned by the PGA Tour, USGA, R&A, Nationwide, Canadian, Australasian, and Tour de las Americas in six countries. Earlier this year, I opted to go straight, that is quit being a gypsy and settle into formal, traditional employment. I have, however, attained one of my ambitions: being a crotchety, old Jew. At thirty, I am way ahead of the curve. One luxury of the caddie job and lifestyle was that it allowed me a lot of time to think about not only golf, but also some other things which have always interested me: politics, economics, philosophy, the arts. Armed with a ready reserve of notions on how things ought to be and an acerbic tongue for spewing all of my self-righteous vitriol, I’m ready.