Brian Gongol Show on WHO Radio - May 8, 2016

Brian Gongol


The Brian Gongol Show can be heard on WHO Radio in Des Moines, Iowa on 1040 AM or streaming online at WHORadio.com. The show airs from 2:00 pm to 4:00 pm Central Time on Saturday afternoons. Podcasts of show highlights are also available.


Please note: These show notes may be in various stages of completion -- ranging from brainstormed notes through to well-polished monologues. Please excuse anything that may seem rough around the edges, as it may only be a first draft of a thought and not be fully representative of what was said on the air.

This week

News Counterfeit products get some Senate attention

Lots of copying disincentivizes innovation

Business and Finance Federal Reserve independence at risk

The chief of the Kansas City bank worries that the political climate is ripe for bad policy

The United States of America Speaker Paul Ryan steps up his defense of Republican principles

Withholding endorsement of Donald Trump

News Why California could be the place to start a non-Trump campaign for exiled GOP members

A state that really isn't going to be in play for anyone but the Democratic Party may be a very good place for someone to run up an alternative gambit

Threats and Hazards Doddering old man recycles unfounded conspiracy theories from supermarket tabloids

Regrettably, that crazy person is running for President

Science and Technology Americans seem not to really want the self-driving car

That's why it won't happen wholesale -- the self-driving car will arrive one piece at a time. But it will arrive eventually.

The United States of America A self-serving argument from California for abolishing the Electoral College

An academic suggests that it would mean fewer TV campaign ads. Equally self-serving is the argument on behalf of small states that the Electoral College should stay in order to keep us from being steamrolled by the bigger states. But then again, that's exactly why the college takes the form it does.

News If the endowment gets bigger, why don't tuition rates get smaller?

Warren Buffett obliquely criticizes Grinnell College for its endowment largesse (largely a result of his own work as a trustee) but its failure to make college more affordable with that wealth. The core problem in college costs isn't necessarily funding -- it's the management and administration of higher education. What other industry could behave with such disregard for efficiency?

Business and Finance When "helpers" aren't helping

A strong argument against funding the financial industry

Business and Finance Productivity grew during the Great Recession

That doesn't usually happen, apparently

Computers and the Internet Mark Zuckerberg enlarges his domain over Facebook

Investors who care about voting control might need to pay attention

News Carnival-affiliated cruise ship docks in Cuba

At some point, Castro Communism has to fall. Will accelerating tourism and economic exposure help hasten that downfall? On a related note, the cruise is being conducted by a Carnival-owned startup cruise line promising that people can take a seven-day cruise and "transform lives". Seems like a stretch.

News Nebraska tourism commission paid speaker $44,000 for 90-minute talk

Some quick math: $44,000 for 90 minutes is a rate of $29,333 an hour. At 40 hours a week times 50 weeks per year, that's an annualized rate of just a little shy of $60 million a year. There aren't a lot of people whose time is legitimately valued at that rate, nor is it easy to stomach the idea that a mere speaker could deliver that rate of value to a tourism conference. Seems like a case of spending other people's money on yourself, which Milton Friedman warned usually doesn't result in restraint.

But first...

It hasn't necessarily caught a lot of attention, but there is a skyscraper under construction in Los Angeles that will soon be the tallest building on the West Coast. The Wilshire Grand Center is interesting from an architectural standpoint, to be certain, but the even more interesting story is how it's being funded.

The Wilshire Grand is owned by Korean Air. The owners point out in their fact sheet that "For 40 years, Korean Air has been a partner to Los Angeles" and that the tower "will infuse more than $1 billion into the Los Angeles economy".

What investment really tells us, though, is just how much more attractive the United States remains as an investment than the rest of the world. Assuming that Korean Air is run at least somewhat rationally, the managers and owners must have decided that a new tower in Los Angeles represented the most attractive potential return on a $1 billion investment that they could find anywhere in the world. That's a very tall order, if you'll pardon the pun.

Tin Foil Hat Award / Capitalist Solution of the Week

Iowa Johnson County (Iowa) raises its minimum wage

Iowa's most left-wing county will provide a small-scale experiment for the rest of the state to watch

Business and Finance Big hikes in the minimum wage are no sure thing for the working poor

Warren Buffett reiterates his argument that the minimum wage is a bad instrument by which to really improve the lives of the working poor. It's not a philosophical argument; it's a practical one. In practice, a higher minimum wage may make a marginal difference to the lives of some adult workers who earn it. But about half of people at minimum wage (48%) are under age 25. Raising the wage by too much will reduce the number of entry-level working opportunities available to them -- which reduces their ability to acquire things like the soft skills and job experience that put them on the ladder to future, higher-quality jobs. Raising the minimum wage to track inflation -- or even just a modest boost -- aren't bad ideas, necessarily, but they aren't real systemic fixes for the deeper issues. Targeted assistance like the Earned Income Tax Credit is probably more efficient at helping the true breadwinners who are at low wages, and ultimately the broader solution is a matter of job training and education. Of all people at or below minimum wage, only 16% have at least an associate's degree. In the long run, we need to fix the training and educational system so that workers have higher market value that places them well above the minimum wage as a market-clearing rate.

Yay Capitalism Prize

Science and Technology Tesla factory is 14% complete

They're going to finish in sections so battery production can begin before the building is complete

Quote of the Week

"Pardoning the bad, is injuring the good." - Benjamin Franklin

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