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Energy policy isn’t about helping the environment

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It’s worth remembering that lots of our environmental policy is wasteful or distortionary. Virginia Postrel writes about California’s new law banning incandescent light bulbs:

What matters, from a public policy perspective, isn’t any given choice but the total amount of electricity I use. If they’re really interested in environmental quality, policy makers shouldn’t care how households get to that total. They should just raise the price of electricity, through taxes or higher rates, to discourage using it.

Instead, the law raises the price of light bulbs, but not the price of using them. In fact, its supporters loudly proclaim that the new bulbs will cost less to use. If true, the savings could encourage people to keep the lights on longer. (via)

In 2009 I wrote about a similar California proposal to ban high-energy-use TV’s.

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links for 2011-06-10

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Bob Geren and effective management

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Bob Geren has been the manager of the Oakland A’s for the last four years. He took over a team that won the American League West championship, but the A’s have been unable to break .500 in any of the four seasons he’s been in charge. Lately some players have gone on the record talking about how bad of a manager he is. It’s never a good strategy to talk badly about your boss, but the quotes give us some insight into Geren’s management style. Here’s closer Brian Fuentes:

Asked how he thinks Geren has handled him, Fuentes said, “Pretty poorly.” How much communication does he have with the manager? “Zero.”

Fuentes believes he’s not the only player who has issues with Geren.

“I get up in the seventh inning,” Fuentes said. “I have no idea. I didn’t stretch. If there was some sort of communication beforehand, I’d be ready, which I was. I was heated up. I was ready.

“But there’s just a lack of communication. I don’t think anybody knows what direction (Geren) is headed.”

And former A’s closer Huston Street:

“For me personally, he was my least favorite person I have ever encountered in sports from age 6 to 27. I am very thankful to be in a place where I can trust my manager.”

So we have someone that’s probably disliked by most of the players in the club, and is underperforming. How did he last five years as manager of the A’s? Because he had a close relationship with his boss, Billy Beane, the general manager of the A’s. The two played against each other in high school, and became close friends shortly after. Geren was the best man at Beane’s wedding. After an unsuccessful stint at a single A franchise in Boston, Beane made Geren the manager of the triple-A Sacramento Rivercats, and then later the manager of the A’s.

All this goes to show that close personal relationships with people who have power can excuse lots of subpar performance. Geren stayed as manager despite a lack of success on the field or any relationships with players on the team. The converse is also true; performing well will not save you if you are not on good terms with your managers.

The A’s fired Bob Geren today after losing nine straight games. This is a good move for the club, and for me as a fan, and bad news for Geren and Beane’s friendship. What can we take away from Geren’s time at the helm? The extraordinary power of being on good terms with your boss.

Jeffrey Pfeffer’s excellent new book Power: Why Some People Have It and Others Don’t, discusses why individuals gain power and why others don’t. One of the points that surprised me most was that your job performance has zero effect on whether or not you ultimately get promoted or fired. In fact, performing too well can lead your bosses to try and hide you or fire you for outshining them. Instead, Pfeffer says, the most important factor in your career is having a good relationship with your boss. If you’re interested, check out Pfeffer’s book, as well as Robert Greene’s The 48 Laws of Power.

I’ve been a big fan of Robert Sutton and Jeffrey Pfeffer’s books for a while now. Their books are the best books about business, management, and leadership I’ve ever read, because they focus exclusively on the evidence, instead of telling stories or anecdotes. If you’re new, check out Hard Facts,
their book on evidence based management, first.

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Everything you need to know about personal finance

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That’s the subject of my last column for the CMC Forum; enough people asked me about it and I see enough people throwing away money that I felt it could have a big impact.

Here’s my recommendation for banking:

The current best interest rate for a savings account is 1.14%, which means that if you have $1000 in a savings account for a year, you’re only going to make $11.40 in interest. So it’s not really that important right now to pick a bank because of its high interest rate.

A smarter move is to pick a bank that minimizes fees. There are two main sources of fees – ATM withdrawal fees and overdraft fees (when you try to withdraw more money than you actually have in the account). Fortunately, there are some banks that are not evil. I recommend Ally Bank, a new online bank. You can withdraw your money from any ATM and Ally will refund the fee. Also, you can sign up for overdraft protection, which will transfer in money from your savings account (with no fee) if you overdraft in your checking.

And on investing:

The best evidence we have says that, Warren Buffett aside, it’s extremely rare for anyone to beat the return of the stock market over a long period of time. Of course, people can beat it in the short run, just like if you had 1,024 people flip a coin ten times in a row, you would expect two of them to have all heads or all tails. However, there’s an easy way to perform at least as well as the overall stock market – invest in index funds, which allow you to own shares in thousands of companies for the price of one share (this is how all of my money is invested).

I also talk about credit cards and Roth IRA’s. A section on student loans would have been nice – my advice would be “don’t take them” – but I never took student loans so I could realize other people might be in a different position. 401K’s, rent/buy and how to finance a car are important topics but not so much for college students.

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