Archive for ◊ January, 2007 ◊

Author: Don Salyards
• Sunday, January 28th, 2007

As a Packer fan I’d like to offer my sincere congratulations to the owners, fans and players of the Chicago Bears on their fantastic 2006 season, wishing them success in winning Superbowl XLI on February 4, 2007. Don’t get me wrong; whenever the Packers play the Bears, I’m rooting for the Packers hands down. Likewise, Bears fans are equally adamant in their loyalty to their team, hoping they thrash the heck out of the Packers. So why would a Packer fan want the Chicago Bears to win Superbowl XLI? Simple. The Bears and Packers have a lot more in common that you might think. In fact, the mutual respect between these venerable football clubs may actually surpass the intensity of their rivalry.

Therefore, as a Packer fan I propose a formal resolution. It goes something like this:

Whereas The Green Bay Packers and the Chicago Bears were founding teams in the National Football League and the Packers and Chicago Bears (then called the Staleys) played the first game of their 85-year rivalry at Cubs Park (now Wrigley Field) in 1921 and;

Whereas in that first game Chicago beat the Packers 20-0 with George Halas scoring the last touchdown of that game with Chicago’s John Taylor throwing a sucker punch that broke the nose of Packers tackle Howard Buck and;

Whereas the Bears and the Packers have combined for 21 NFL Championships and;

Whereas both Chicago’s George Halas and Green Bay’s Curley Lambeau were players, head coaches, and founders of their teams and;

Whereas George Halas controlled the Bears for 63 years and served as their head coach for 40 years, and Curley Lambeau was head coach and Vice President of the Packers for 30 years, making them two of the most revered men in NFL history and;

Whereas the Chicago Bears have rostered players like Red Grange, Bulldog Turner, Dick Butkus, Dan Hampton, Bronko Narurski, Walter Payton, Gayle Sayers, Mike Singeltary and Brian Urlacher, Bill George, and Ed Obradovich and;

Whereas the Green Bay Packers have fielded players the likes of Don Hutson, Reggie White, Brett Favre, Ray Nitschke, Jim Taylor, Willie Wood, Willie Davis, Bart Starr and Paul Hornung and;

Whereas the Bears and Packers have contributed 52 members of the NFL hall of fame over the years and;

Whereas on the day the Green Bay Packers played their first game at what is now known as Lambeau Field on September 29, 1957, the opposing team was the Chicago Bears and;

Whereas the both the Chicago Bears and Green Bay Packers renovated their home stadiums in 2004 without putting a roof on their stadiums and;

Whereas Packers fans endure the cold winter winds from the waters of Green Bay while Bears fans sit in the snow facing the icy winds of Lake Michigan and;

Whereas both Packer and Bears fans would rather die than watch a football game in a dome and;

Whereas the fans of the Green Bay Packers and Chicago Bears have a mutual respect for their brothers in the “Black and Blue” division of the NFL and;

Whereas the Chicago Bears have earned the right to go to Super Bowl XVI for the first time since winning the NFL championship in 1985 and;

Whereas Packer fans respect the long history and tradition of the Chicago Bears football team; therefore:

Resolved that Packer fans wish the Chicago Bears success in wining Superbowl Superbowl XLI on February 4, 2007.

PS: Wait till next year!

Author: Don Salyards
• Sunday, January 21st, 2007

Ticket scalpers are probably some of the most maligned and misunderstood characters in the world. The ticket scalper is a speculator. He buys and re-sells tickets to sporting events, concerts, and other popular venues. Depending upon the popularity of the event, the scalper will pay below face value, exactly face value, or sometimes above face value. He is betting that he can sell the ticket for more than he paid. In some municipalities ticket scalping is illegal, but these laws are loosely enforced. It is my opinion that all laws against ticket scalping should be abolished. Furthermore, I think that ticket scalpers are useful members of society that perform a marvelous public service.

To discuss ticket scalpers a more rational light, let’s refrain from calling them “scalpers”. Instead let’s refer to them as ticket “resellers”. For simplicity, let’s assume that the ticketed event is a Saturday afternoon playoff game between the New York Yankees and the Boston Red Sox at Fenway Park. One reason that some people dislike ticket resellers is that there is often a large gap between the re-seller’s price and the face value of the ticket. The buyer who pays $300 for a ticket with a face value of $65 might think that he has been ripped off. In fact, the $300 price is the market value of the ticket. Given the significance of a playoff game, the intense historic rivalry between the teams, the star-status of the players, and the bucolic setting of Fenway Park, the ticket is actually worth $300. While the Boston Red Sox priced and sold the ticket for $65, its actual market value is $300.

We know that $300 is the “market” value of the ticket because it is the price to which a willing seller and a willing buyer have agreed. The reseller wanted the buyer’s $300 more than he wanted the ticket. The buyer wanted the ticket more than he wanted his $300. Otherwise the sale wouldn’t have taken place. No coercion was involved in the transaction. Of course, the reseller wishes he could have gotten more than $300 for the ticket and the buyer wishes he had paid less than $300 for the ticket, but at a higher or lower price the transaction would not have taken place. This ticket sale for the sum of $300 is a quintessential market transaction. It is a win, win situation for both buyer and seller. Under no conditions should this sale be considered either immoral or illegal.

There is another reason that ticket scalpers are good for society. The existence of scalpers ensures a more enthusiastic and excited customer, making the ball game even more interesting. Let’s say that the original holder of the Red Sox ticket was a season ticket holder who was going to be gone for the weekend. If the scalping didn’t exist, the season ticket holder might have sold his ticket for face value ($65) to his neighbor, a lukewarm Red Sox fan. Instead, the reseller intervened, paying the ticket holder perhaps $200 for his ticket and selling the ticket to the eventual buyer for $300. It is obvious that the fan who paid $300 for the ticket will be much more enthusiastic than the neighbor of the season ticket holder, who paid only $65 for the ticket. The $300 fan will yell louder and be much more enthusiastic because he values the sporting event much more than the neighbor. Show me a game where lots of seats are filled with people that paid three-times face value and I’ll show you a game where the fans are yelling their heads off!

Finally, people often presume that scalpers always make money, but reselling entails real risks. First of all, there is competition from resellers to purchase their ticket “inventory”. Only the reseller that pays the highest price for the ticket will be able to purchase them. For example, a season ticket holder to the above-mentioned Yankee-Red Sox playoff game knows that his tickets are valuable. He is unlikely to sell them cheaply to the reseller. It is not likely that he will sell the ticket to a reseller for face value; the reseller will have to pay substantially above face value. Having paid, say $200 for the ticket, the reseller must now find a buyer that will pay him more than $200, but there is risk in this arrangement. What if a key super-star is injured before the game? What if it rains? Then there is timing. As the reseller stands outside the stadium looking for a buyer, the clock is ticking. If he sells to the first potential customer, perhaps his price was too low. As he waits for a customer that will pay him more, the clock is ticking. After the game starts the market price of the ticket will steadily decline. The ticket is worth more in the first inning than it is in the third inning. After the fourth inning the ticket is practically worthless. In fact, resellers often must move their inventory at far below the face value of the ticket. I have routinely purchased $40 face value tickets to major-league baseball games for $5 by waiting until the third inning. If you want to see a scalper without bargaining power, look in his eyes at the top of the fourth! By the fourth inning, you’re the boss!

I’ve purchased many tickets from resellers and have never bought a counterfeit ticket. Most resellers are honest. After all, they work the same venues, day after day. If they sold counterfeit tickets their sales careers would not last long. Instead of making scalping illegal, if local governments licensed resellers for a nominal fee with resellers required to post a bond as a license requirement, the bond would guarantee the legitimacy of tickets sold by resellers. Resellers could then wear an official license badge so buyers could readily identify them if they sell counterfeit tickets. Websites like stubhub.com require ticket sellers to guarantee the legitimacy of their tickets by supplying their credit card information. Licensing of resellers would virtually eliminate the possibility of counterfeit tickets, which is the only real risk that buyers now face when buying tickets from resellers.

Most economists appreciate scalping because they realize that resellers create efficient markets for event ticketing. After all, if NFL team owners or Broadway producers charged market prices for their tickets, scalpers would be out of business. By charging a face value that is too low, team owners and Broadway producers deny themselves income and guarantee scalpers a living. As long as there is a difference in the face value of a ticket and its market value scalpers will be alive and well! Bravo to the scalpers!

Author: Don Salyards
• Sunday, January 14th, 2007

On October 4, 1957 the Soviets launched Sputnik I, the first man-made satellite to orbit the earth. The “space race” to the moon had begun and due to an embarrassingly large number of launch failures the United States was decidedly behind the Soviets in space technology. In those days the Soviet Union stood as a formidable economic and scientific adversary to the United States. There was an active and legitimate debate in academic and social circles about whether centrally planned, socialist economies could outperform free-market capitalism. There was, in effect, a “proxy war” between the economic system of the Soviet Union (socialism) and that of the United States (capitalism).

Soviet Premier Nakita Khrushchev had thrown down the gauntlet for this economic proxy war in an address to the general assembly of United Nations on October 11, 1960 when he took a shoe and pounded the podium declaring to the United States, “Whether you like it or not, history is on our side. We will bury you.” Less than a year later an event would take place in Germany that would expose the soft underbelly of Socialism.

On August 12, 1961 Walter Ulbricht, the leader of East Germany signed the papers to close the border between East and West Berlin. The streets, underground subway, and surface railways uniting the city were torn up as armed guards spread barbed wire through the center of Berlin. Over time a 66-mile, 12-foot high concrete wall was constructed to keep residents of East Berlin from fleeing to the west. The wall continued to enslave a large portion of the German population for 28 years until it’s demise in 1989.

As a young man of 22 years, I visited the Berlin Wall in the summer of 1971. I was a fresh out of college with a major in Economics. For me, the cities on both sides of that wall were evidence of an indisputable conclusion to the Socialism/Capitalism debate. West Berlin looked like any prosperous American city, with fancy automobiles, spotless buildings, wide streets, and shops bulging with merchandise. Travel agents advertised flights to Paris, Chicago, and Los Angeles. As I walked through “checkpoint Charlie” into East Berlin, it was like entering the pits of hell. Bleak, boarded-up buildings and abandoned streets led to the central part of the city where the Soviets had attempted to construct a ruse of prosperity. The problem was, no one had any money. The people were poor. It was the exact opposite of the life in West Berlin. This was not a place where anyone would want to live.

Ironically, the Berlin wall served as a perfectly designed social experiment because the residents on both sides of the wall were the same people. They were the same race with the same history and traditions. The only difference between East and West Berliners was their economic system. On the west side of the wall people were free to use their creativity to pursue their own interests, with minimal government intervention. On the east side of the wall the state owned and controlled the factories and businesses, stifling the initiative and freedom of its citizens. The economic situation was so bad that the Soviets had to wall-in the residents of East Germany to keep them from escaping to the better conditions in the west.

Ironically, on the east side of the wall there was a sign that read, “Frei Welt fur Dich” (Free world for you). A young East Berliner, about my age, explained to me that in school he had been taught that the purpose of the wall wasn’t to keep him in, but to keep the capitalist imperialists out. He didn’t really believe that. Later in our conversation, with tears in his eyes, he asked me how he could possibly get out of East Berlin. I couldn’t help him. He would have to wait another 18 years before the wall would come down. Unfortunately by then he would be in his early forties, with his youth sacrificed on the altar of socialism. A 22-year-old Don Salyards learned a valuable lesson that day; capitalism wins. Capitalism wins because of the economic prosperity it generates and because it is compatible with political freedom. Socialism creates poverty and enslavement.

Despite the obvious superiority of capitalism over socialism, we fought a costly war in Vietnam, supposedly to keep communism from spreading. After our departure, the Vietnamese economy struggled for a while as their communist leaders stubbornly followed socialist economic policies. Later the leaders of Vietnam virtually abandoned socialism and established capitalistic, free-market practices. The results are predictable; the country has prospered and the Vietnamese people are enjoying more political freedom than ever before. American firms are flocking to Vietnam to establish business there. Communism was defeated in Vietnam; not by our occupation of that country, but by the Vietnamese realization that it doesn’t work. The Chinese have also learned the wise lessons of capitalism as their economy and people have prospered as never before. Bullets aren’t needed to defeat communism; communism eventually collapses from within, as citizens get weary of living like dogs.

Now in Latin America four countries and their leaders have declared their allegiance to state socialism. The unfortunate residents of Venezuela (Hugo Chavez), Nicaragua (Daniel Ortega), Bolivia (Evo Morales), and Ecuador (Rafael Correa) are now subjected to a declared resurgence of state-run socialism. This new, Castro-style, socialist alliance is unlikely to spread beyond the four countries mentioned. It is largely fueled by a hatred for the United State on the part of the four leaders. As I write this article Mahmoud Ahmadinejad, the President of Iran, is currently visiting these same four Latin American countries. No doubt these leaders will pump themselves up with anti-US rhetoric in the next few days, much like Nakita Khrushchev pounded his shoe on the podium 47 years ago. It won’t make any difference. If they continue to ignore the lessons of economics, their socialistic economies will decline even further and their citizens will become even more miserable than they already are. Chavez recently said that Venezuela shall have “Socialism or Death”. He has obviously doesn’t understand that socialism is death!

The US would be best served not to interfere with the governments of these poorly led Latin American countries. Like the Russians and Vietnamese they will eventually figure out they’ve made a mistake. Chavez has some oil revenue to sustain his socialist dream, but as the years go by even that revenue will be squandered by the wasteful and inefficient economy he creates. His regime and economy will crumble. It’s not a good time to live in Venezuela, Bolivia, Nicaragua or Ecuador.

Author: Don Salyards
• Sunday, January 07th, 2007

Roughly two years ago the idiot, John Kerry, was running for the Presidency. I particularly remember six words that he uttered during his campaign. Those words were not only blatantly false, they also vividly illustrated how skewed and ridiculous the comments of politicians can be during a campaign. The six words Kerry used to describe the state of the American economy are as follows: “Worst Economy Since the Great Depression!” In fact, our economy is the antithesis of the Great Depression. John Kerry couldn’t have had it more wrong.

About ten days before Christmas I attempted to purchase some paper goods and an electric pencil sharpener at the Ellston Avenue target store on the near north side of Chicago. The parking lot was jammed. I estimate that there were 300 non-handicapped parking slots, all of them occupied. Along with about 40 other drivers, I roamed up and down the isles looking for a parking space. This “seeking” of a space became very competitive. Some cars blocked the entrance to an entire isle so that they could capture the space of the next car leaving a parking spot in that isle. This prevented other cars from going down the isles, causing such a backup that it became almost impossible to enter or leave the parking lot. People were visibly frustrated as this “parking game” became serious business!

There were, of course, 25 open parking slots, all handicapped designated. It occurred to my twisted mind that all me and the other 39 other “roving” drivers were really doing was cruising around the parking lot waiting for cripples to show up! I decided this exercise was futile and pointed my vehicle toward the parking lot exit. However, both the entry and exit to the lot were gridlocked and I was forced to remain within the lot. Then, magically, a car pulled out right in front of me and I quickly drove into the empty void.

Once inside the store the gridlock continued with a mass of people, strollers, and shopping carts. Believe me, these folks weren’t just browsing, they were buying! Customers conversing in English, Spanish, Polish, and God knows how many other languages, were pulling merchandise off the shelves like we were in a plywood store before a hurricane! Every check-out lane was open and each of them had a long queue of customers. I don’t know what the “bottom line” for the Ellston Avenue Target store was that day, but I know one thing for sure; the folks at Target headquarters in downtown Minneapolis were grinning all the way to the bank!

Just to put things into perspective for Senator Kerry and those of his ilk, the unemployment rate in the United States of America between 1929 and 1933 hovered around 30 percent. Literally one of every three workers was unemployed. Keep in mind that few women were in the labor force so most of the unemployed were adult male breadwinners, the sole source of their family’s income. Today our unemployment rate is about 4 percent and many of the unemployed are transitioning between jobs. Furthermore, with many two-income households, the specter of an unemployed family member is not as daunting as it was in the 1930’s.

The depression was a time when people stood in bread lines and walked along the railroad tracks hoping to heat their homes by finding a lump of coal that had fallen from an open hopper car. Emaciated children inhabited the neighborhoods of cities and small towns alike. Farmers in the Midwest struggled through the dust bowl, which decimated American agriculture. The economic hardship was so severe that an entire generation of Americans had an aversion to spending for the rest of their adult lives.

While my recent Chicago “jammed up” shopping experience was exacerbated by an urban setting and the Christmas rush, I’ve noticed that even in places like LaCrosse, Wisconsin or Rochester, Minnesota, the mall parking lots are nearly full on a normal Saturday in April or September. American consumers are spending their money. Despite terrorism, rising gas prices and the gloomy predictions of naysayers, prosperity abounds within an incredibly resilient American economy.

For Kerry to suggest that there is any resemblance between a time when literate, intelligent, previously gainfully employed adult males sold apples on the sidewalks to our present day, when kids line up outside a Best Buy store for hours to be the first to purchase a Sony Play Station 3, is the height of absurdity. Perhaps the fact that Kerry made this comparison is in itself a sign of our prosperity. Things have been so good for so long that even a prominent US senator like Mr. Kerry has no realistic appreciation of how bad the real depression really was.