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Saturday, August 20, 2011

Pushing the Envelope: Faster, Higher, Bigger

The death of a Georgian luge athlete on the opening day of the 2010 Winter Olympics occurred amid concerns about the speed of the record-setting track at the Whistler Sliding Center. “There were some questions asked by other athletes even before this tragic accident,” said Nikolas Rurua, Georgia’s deputy minister for culture and sports. He added that there had been several crashes in the same area of the track where the death occurred.

The luge is often called the “fastest sport on ice.” Sliders use their legs and shoulders to steer small fiberglass sleds down an icy track, at times approaching or surpassing speeds of 90 mph, according to the Vancouver 2010 Winter Olympics Web site. On headline read, “This Winter Games could be the first time the sport sees a competitor hit 100 mph.” Sports Illustrated’s David Epstein, who covered the Olympics for the magazine, claimed that the Whistler course was at the time the fastest in the world, “and not by a little.” He explained that while most luge courses “flatten out” around the 11th turn, the Whistler track “just keeps on dropping, so there’s really kind of no break from gathering speed toward the end.” Epstein reported that some athletes had been complaining about the speed of the course and speculating that that Winter Games could be the first time a competitor hit 100 mph. “That’s 15 to 20 mph faster than any course in the rest of the world.” Is being faster the overriding point?

Whether we are talking about luge tracks, sky-scrapers, or passenger jets, there seems to be in the human psyche an innate proclivity to extend a threshold further—regardless even of how far the extension is from our natural limits.

Airlander 10, the largest aircraft in the world, crashed on its second test-flight on August 24, 2016. 

In 1912, the Titanic ocean-liner was the largest thing built by human beings. In spite of the risk in being the largest, the ship was presumed to be unsinkable. Speaking about the ships a century later, Helen Kearns, a spokesperson for Siim Kallas, who was the E.U. Transportation Commissioner at the time, said, “There are legitimate questions as these vessels have substantially evolved in recent years.” I wonder if “evolved” is the right word. “The boats have gotten a lot bigger, as it’s economically advantageous to have more passengers,” Kearns added, but “the way these vessels have grown in size does mean finding the right balance to make sure regulations are stringent enough to ensure there are procedures like safe evacuations.” She was presuming here that cost-efficiency is a given, and, furthermore, that regulations can make up for any increased risk that comes with size.

Kearns was responding to reports that a cruise ship had hit a rock off Tuscany and partially sank several yards from an island off the coast. In the case of the partial-sinking of the Costa Concordia about twenty feet from an island just off the Tuscany coastline on Friday the 13th in January 2012, there was still confusion regarding how many of the 4,200 souls on board were still missing. That total figure of people who had been on board is about double that of the ill-fated Titanic, which went down in the North Atlantic on August 15, 1912—a century earlier. To put the two accidents in perspective, being twenty feet from an island would undoubtedly have looked like a godsend to those who perished in the icy waters. Had humanity become too spoiled in a century of technological development and mounting regulations further distancing us from nature? In other words, has the human race been moving in one direction even as it has been making itself increasingly vulnerable in the other by making bigger and bigger toys?

We forget the retort of Titanic’s designer to the White Star Line executive, who claims that the Titanic—the biggest ship in the world in 1912—cannot sink. In James Cameron’s film, Titanic, the engineer tells the businessman who cannot be wrong, “I assure you, good sir, it is made of iron. The Titanic will sink. It is a mathematical certainty.” A century later, it was taken for granted that Costa could not fall over in the water, yet it did—making it difficult if not impossible to deploy the emergency boats.

I can only conclude that a human tendency exists to presume that we cannot be wrong, even in cases in which we are most likely to error. This is what makes our quest for faster, higher, bigger so dangerous. Blinded by our vision of something faster, higher, or bigger than we have today, we discount the added risk as soon as we put our sights on it.


"Olympic Luger Dies on Track Where Speed Caused Concern," CNN, Febuary 13, 2011.

Steven Erlanger, “Oversight of Cruise Lines at Issue After Disaster,” The New York Times, January 17, 2012. http://www.nytimes.com/2012/01/17/world/europe/oversight-of-cruise-lines-at-issue-after-disaster.html?pagewanted=all

Friday, August 19, 2011

Eurobonds: The Solution to the E.U.’s Debt Crisis?

One possible solution to the E.U.’s debt crisis may be debt issued by an E.U. government agency and vouched for by all 17 state governments that use the euro currency. According to the Wall Street Journal, “Such euro bonds would dispel concerns Italy or Spain might not be able to get the financing they need, as it would be provided centrally.” Of course there is the downside of moral hazard: states facing crushing debt-loads could rely on the wealthier states to guarantee additional debt. Because the “fiscally imprudent” state governments “could borrow freely at low cost, there would be little incentive to stop.” The wealthier states in turn would be in the position of guaranteeing debt that they do not control.

The full essay is at "Essays on the E.U. Political Economy," available at Amazon.

Two Tiers Fiscally in the E.U.: Too Simplistic

Stephen Castle of the New York Times puts the main question regarding E.U. reforms oriented to preventing state governments from being overburdened with debt as follows: “Is the euro more in need of Germanic fiscal stability or the growth and stimulus policies that France traditionally champions?” I contend that there are bigger fish to fry that unfortunately go largely unnoticed in Castle’s article.

The full essay is at "Essays on the E.U. Political Economy," available at Amazon.

Thursday, August 18, 2011

Fraud at S&P: A Conflict of Interest

By the summer of 2011, the U.S. Government had brought relatively few cases against large financial institutions for their roles in the financial crisis of 2008. For instance, the government investigated Washington Mutual and Countrywide without taking any further action in spite of reports of “liars’ loans.” In the case of the three major ratings agencies, the business model “is riddled with conflicts of interest, since rating agencies might make their grades more positive to please their customers. Before the financial crisis,” according to The New York Times, “banks shopped around to make sure rating agencies would award favorable ratings before agreeing to work with [one of the agencies].”

The full essay is at Institutional Conflicts of Interest, available in print and as an ebook at Amazon.

Monday, August 15, 2011

A Conflict of Interest in Issa's Earmarks

Congressman Darrell Issa (R-Calif.) runs his local district office down the hall from where he runs his businesses worth hundreds of millions of dollars. According to the New York Times, his “dual careers” evince a “meshing of public and private interests rarely seen in government.” While advocating for business in Congress, he split his holding company into separate multibillion-dollar businesses, started an insurance company, and retained a financial interest in his automobile-alarm business. According the Times, at least some of his actions in government have made him richer.

Most notably, he secured Congressional earmarks for road widening and other public works projects that benefit the many commercial properties that he owns in his district. For example, earmarks that he arranged made possible the widening of a busy road in front of a medical plaza that he bought for $10.3 million. To be sure, his constituents applaud the easing of traffic, but what if the money would otherwise have been spent to relieve more severe congestion elsewhere? Even if no worse instances existed, that the congressman’s constituents benefitted from the street-widening does not mean that his action was ethical.

The full essay is at Institutional Conflicts of Interest, available in print and as an ebook at Amazon.