Economics

Is Free Agency in Baseball Dead?

rizzoname1-624x414

Anthony Rizzo – Chicago Cubs

A recent spate of signings this spring continues a trend that began happening in baseball a few years ago. Young players are being signed in their second  year in the big leagues to extended contracts. Ryan Zimmerman of the Nationals and Evan Longoria of the Rays were two of the first to ink their name on a dotted line to what were deemed as team-friendly deals. On the other hand, the players signings voided any attempts at arbitration and extended the original five-year length of a major league contract. Recent signings have been by Anthony Rizzo of the Cubs and Paul Goldschmidt of the Diamondbacks. Both players knowingly signed their contracts to focus on just playing baseball. Rizzo signed for an additional 7 years and $41 million with escalators and incentives. Goldschmidt signed for five years and $32 million. While Rizzo’s contract was based on less than a 140  game sample, Goldschmidt had almost 2 years under his belt. For Goldschmidt, the signing bought him a release from the pressure and he is having an all-star type year as is Rizzo. But Goldschmidt has not put up these type of numbers before. Rizzo, meanwhile, is on page to hit 40 homers and drive in 110 runs. These players are just two players that might signal a death in free agency as we know it. The test will come when Mike Trout and Bryce Harper, who are both in their second year, either reach arbitration or ink similar type deals to keep the players in the fold during their peak years.

Free Agency began shortly after Curt Flood‘s ill-fated lawsuit against Commissioner Bowie Kuhn. However, shortly thereafter, Andy Messersmith and Dave McNally became the first free agents in 1975. At the time, the average salary for a professional baseball player was less than $30,000 a year. 4 years later, Nolan Ryan signed a 4 year $4.4 million contract with the Astros. One year later, Dave Winfield was making $2.5 million. By the end of the 1980s, Minnesota’s Kirby Puckett inked a 3 year $9 million contract.

mlb-salaries-since-1970

The 1990s saw an unchecked growth in free agency and a rise in steroid use. I, for one, think the two go hand-in-hand as players looked for any advantage to get that big free agent deal. In 1996, Albert (aka Joey) Belle, signed a deal worth over $11 million a year with the White Sox. It took a while for the White Sox to get out from under the deal. On December 10, 2000, Alex Rodriguez signed a 10 year $252 million contract with the Texas Rangers. That deal would be torn up in 2007 when he signed a new deal for pretty close to the same numbers with the Yankees.

In response, five events in the 2000s changed how baseball executives looked at free agency.

1. SteroidsThe Mitchell Report (2007)  took away any competitive edge steroid and amphetamine users had in the game. Now, if a players risked using them, they also risked suspension of major dollars. The heydays of the 1990s of McGwire, Sosa, and others grooving mammoth home runs was going to be over. There were now too many dollars at stake. Home runs plummeted after the Mitchell Report from a high of over 5600 in 2000 to a low 4552 in 2011.

(c) John Sherffius

(c) John Sherffius

2. Moneyball – In the early 2000s, the price of competition had created big market teams that could afford to go after high cost free agents and those that could not. Most notably, Oakland General Manager Billy Beane stood out by finding other ways to win by focusing on Sabermetrics like on base and slugging percentages taking on more value than batting average and runs batted in. The resulting book by Michael Lewis highilghted Beane’s methods in evaluating and drafting talent. For teams that did not have cathedrals for ballparks to bring in the much needed cash, Moneyball became another way to compete between the lines with the large market teams.

3. Youth Movement – In the wake of the Mitchell Report, the players got younger as youth was valued more and more. They had fresher legs after all and more strength. In the steroid era, it wasn’t unusual for a player to hit 40 homers at age 36. Alex Rodriguez is now that age, along with many other greats of the 2000s and they are now shells of the players they were in their prime. Steroids were not the only drug that shaped baseball. For years, amphetamines had just as much an influence in the game for players in a grinding 162 game schedule, especially for those who played day games after night games. The need for younger players who could sustain their strength through a season was needed. The Tampa Bay Rays (GM Andrew Friedman) and the Washington Nationals (GM Mike Rizzo) began the trend of signing players to keep them in their prime years (27-30 years of age). The Cubs recently have done the same with Stalin Castro in addition to Anthony Rizzo. For all three teams, they were trying to build teams by developing talent. For Friedman, signing Longoria was the foundation for the franchise as was Ryan Zimmerman for the Nationals. For the Cubs, they refer to the term “core pieces.”

4. The Market Changed – In recent years, many teams have begun to shy away from long-term free agent deals. When players hit free agency for the first time, they are usually in their late 20s. To sign them to a long-term deal is not seen as financially sound anymore. Case in point, Alfonso Soriano. His $18-19 million a year contract was seen as an albatross hanging over the franchise when Theo Epstein too over the team. Unexpectedly, Soriano was seen as not living up to his contract. Then last year, he slugged over 30 home runs and drove in 108 runs. Soriano’s contract with the Cubs has been up and down as has Alex Rodriquez’s when he has been healthy. Most General Managers now view a signing as paying for future performance.

Alex Rodriguez Career Numbers - Baseball Reference

Alex Rodriguez Career Numbers – from Baseball Reference

In the past, while the GMs hoped they were paying for future performance, but in reality, the contract was roll of the dice. Today’s market signings lock up their “future” stars through their prime years and a little beyond. The two winters signing of Albert Pujols for ten years will test those “old” assumptions in the coming years. However, the signing of Josh Hamilton might be a new market force. Hamilton’s contract lasts only for five years but his production is already bringing that contract into question just based on the staggering amount of dollars involved even if only for five years.

joe-bohringer

Cubs Pro Scouting Director Joe Bohringer

5. The Branch Rickey Effect – Most people know Branch Rickey cemented his place in history by signing Jackie Robinson. What most people don’t know is that Rickey set up what is today the minor league system in the late 1920s. Rickey’s belief was that by using a farm system that developed players, a team could be competitive indefinitely. The St. Louis Cardinals have not deviated from that philosophy in the 80 years since.

In today’s market, that development of players now includes foreign markets in the Dominican, Japan, Korea, and Venezuela as well as others all over the world. Scouting, whether it be by sabermetrics or old school scouts, or as Cubs Pro Scouting Director Joe Bohringer calls for, a mixture of both, has taken on a new dimension of finding the latest talent at the cheapest price all over the globe. While Rickey did not mine Latin America for players as it is done today, his followers are doing so in his shadow of the minor league system. Why waste $250 million when you get the same production by investing a few million and develop that talent. In fact, for $250 million, you can get 50 or more players rather than just one player. In addition, teams are now pouring money into scouting as well as player development to avoid that large loss of production and dollars via free agency.

Free Agent Trends for the Future: Free Agency, most likely, is not dead. But it is changing. Role players are becoming more in demand. Specialists like a “loogy” (left handed reliever) garner more attention because they fit a certain niche. The team’s need is dictating what teams spend their dollars on. If they can bring up a player like the Orioles did with Manny Machado last fall, teams will. The Pujols, A-Rod, and Soriano contracts are warnings of the dangers of long-term contracts. As the dollars increase for free agents, some teams just will step out of the way, while other GMs and owners will step up, some foolishly. While the Rizzos and Goldschmidts  contemplate their deals, for GMs, the contemplation is smaller and less risky.

In the end, I think Bryce Harper and Mike Trout will set the future role of free agency as they will reach the market at the ripe old ages of 25 and 26. They would still not have reached their prime years of 27-30. That, to me, is unfathomable what they could bring on the open market. Will they be the first $30 million a year players? On the other hand, they might be the outliers rather than the norm. Their GMs will do everything they can to not let them get to the open market.

103466-768-0

Trout and Harper – The Future of Free Agency?

The 1985 Farm Crisis: What One Hand Giveth, the Other Taketh Away

Things do not happen overnight. Sometimes, it takes years for events to unfold. In 1985 farmers throughout the Midwest US struggled to keep the family farms that had been in their families for generations. Corporations hovered like vultures waiting to pick on the next farmer whose bank foreclosed on the farm. It was something right out of the Great Depression, albeit, 50 years in the making. The resulting crisis would cause Ronald Reagan to slightly bend his economic model to get the farmers through the crisis.

During the Great Depression, the Agricultural Adjustment Act began a policy of subsidizing farmers to not grow certain crops and to leave certain fields fallow. Due in part as a reaction to the Dust Bowl, but more so, the FDR administration wanted to raise the price of crops to help farmers. By controlling the supply, the government felt the price would fluctuate less. Due to mechanization fueled by gasoline power tractors, combines, and other farm equipment, the American farmer was producing more crops than ever before. For 40 years, the system worked and it worked well. However, things started to unravel for the American farmer beginning in the middle 1970s.

Several factors merged to create the crisis.

1. Technology continued to evolve. Not only were machines partly responsible, but also new methods of farming and irrigation along with new insecticides and herbicides combined with genetics changed drastically how much one farmer could produce. In 1940, one American farmer could feed 15 people. But 1960, that number increased over 400% to 65.

2. To keep up with the changes and to grow more, farmers leveraged themselves by borrowing money to support their expansion of their operations.

3. Interest rates were very low in the beginning of the 1970s. Farmers borrowed more because it was a good deal.

4. The price of oil and gasoline skyrocketed in the OPEC Embargo in 1973. The cost of farming grew immensely.

5. As a result, the economy turned south.

6. Jimmy Carter did not help. When the USSR invaded Afghanistan, the US placed an embargo on farm products to the USSR.

7. As foreign markets dried up, debt piled up. Farmers began to struggle to survive as farm prices continued to sink.

In 1978 and 1979, farmers drove their tractors to Washington to protest Farm policy. An estimated 3000 farmers went and some even stayed for the winter camping out on the mall. The policy did not change except for a moratorium on foreclosures from the FHA.

When Reagan took office, things were not much better. Bumper stickers could be seen around America to protest their plight.

  • “Crime Doesn’t Pay… Neither Does Farming.”
  • “Corn is in the barn, but it’s not worth a darn.”
  • “Parity Not Government Charity.”
  • “All we want for Christmas is 100 percent parity.”
  • “If you eat, you have a stake in the farmer’s plight.”

Reagan’s economic philosophy did not mesh with the growing crisis. In fact, Reagan initially cut subsidies to farmers. When the economy did not improve, banks began to raise interest rates and the crisis grew. Foreclosures skyrocketed. Violence became an everyday aspect of rural life. If a farmer was having an auction to sell off machinery or to auction off the land, sometimes shots were fired, people were killed, or kidnapped. The banker and the auctioneer became the villains of the heartland.

Farm life had changed drastically since the 1930s. The number of farms shrank while the average size of the farm grew. It took fewer and fewer people to run a farm and the population of rural America was turning greyer. In Nebraska, it was estimated that 1/3 of all farms were at risk in the 1980s of being foreclosed. Farm support groups began to grow to help farmers save their farms. It was not enough.

By 1985, Reagan was wanting to end all subsidies and let the market dictate what the price of farm products should be.  Deregulation was Reagan’s dream. However, the crisis was turning into a nightmare. Bob Dylan, in an off handed comment at Live Aid, said the organizers should take some of the money and give it to the farmers. Three people were listening that day: John Mellencamp, Willie Nelson, and Neil Young. The three men would put together a benefit concert called Farm Aid to aid the farmers. It would be held at Memorial Stadium in Champaign, Illinois.

As a soon to be college senior, I made the trip from west central Illinois with my friends, Jim Jones and Craig Schaeffer. We left at 6 in the morning and got home at 3 in the morning. It was a day filled with many memories of great acts (BB King, Beach Boys, Eddie Van Halen and Sammy Hagar, Tanya Tucker, Bob Dylan, and many more). I remember it was cold, chilly, and overcast. When the concert started, the sun came out for a brief period but as soon as Bon Jovi was roundly booed, it turned in to an all day soaker. It did not let up until 8 p.m. However, the concert did raise national awareness about the farm crisis.

Mellencamp, who would routinely criticize Reagan, was from the heartland of Seymour, Indiana. His 1985 album, Scarecrow, contained the title track, Rain on the Scarecrow, about the farm crisis. It had been my impetus in attending. The title track laid out what was happening around the center of the country.

Scarecrow on a wooden cross, blackbird in the barn
Four hundred empty acres that used to be my farm
I grew up like my daddy did, my grandpa cleared this land
When I was five, I walked a fence while grandpa held my hand

Rain on the scarecrow, blood on the plow
This land fed a nation, this land made me proud
And son, I’m just sorry, there’s no legacy for you now
Rain on the scarecrow, blood on the plow
Rain on the scarecrow, blood on the plow

The crops we grew last summer weren’t enough to pay the loans
Couldn’t buy the seed to plant this spring and the farmers bank foreclosed
Called my old friend Schepman up to auction off the land
He said, “John, it’s just my job and I hope you understand”

Hey, calling it your job, ol’ hoss, sure don’t make it right
But if you want me to I’ll say a prayer for your soul tonight
And grandma’s on the front porch swing with a Bible in her hand
Sometimes I hear her singing, “Take me to the promised land”
When you take away a man’s dignity he can’t work his fields and cows

There’ll be blood on the scarecrow, blood on the plow
Blood on the scarecrow, blood on the plow

Well there’s ninety-seven crosses planted in the courthouse yard
And ninety-seven families who lost ninety-seven farms
I think about my grandpa, my neighbors and my name
And some nights I feel like dyin’ like that scarecrow in the rain

Rain on the scarecrow, blood on the plow
This land fed a nation, yeah, this land made me proud
And son, I’m just sorry, they’re just memories for you now
Rain on the scarecrow, blood on the plow
Rain on the scarecrow, blood on the plow

Copyright 1985 by John Mellencamp

Shortly after the concert, the Reagan administration began to take the crisis more seriously. When 15,000 farmers showed up for a rally in Ames, Iowa, the crisis had to be taken more seriously. It was turning in to a political issue. Throughout most of rural America, the Republican party is king. By not dealing with the crisis Reagan was threatening to alienate his constituency at the price of sticking to his economic morality of deregulation. Had Reagan stuck to his economic guns, the Republican party could have been lost. Instead, Reagan made the first of many deals to ensure the continuance of the American family farm. Beginning with the 1985 Farm Security Act and grain deals in 1986 and 1988, farm policy became a priority for Reagan. Kansas Senator Bob Dole spearheaded moves in 1986 to increase the aid, and along with Dick Lugar from Indiana, more aid followed in 1987.

Former Nebraska state senator Elaine Stuhr reflected back on the crisis.

“”No, they weren’t. And that’s one of the reasons I think that the women coming together and being supportive and partners in their family farming operations certainly gave them a better understanding of what we were going through. And times were very, very difficult. In fact I was looking at several clippings where bankers said that this was probably one of the most difficult times because of the very low prices. I think corn was like a $1.50 [per bushel]. And then our high interest rates – the rates of inflation [actually interest rates were] going to 19, 20 percent. Even over. We lost many, many young families. I think probably the biggest notice was farm women went to work in town. If there was any opportunity to find employment, this was the time when women would work just to buy groceries and have groceries on their table. It was a very difficult time. And I think one of the reasons was about in 1973 Russia bought corn. And prices were good, up to $3.00, $3.50. And land prices escalated, as well. And so, people were paying as much as $2,200, $2,500 an acre for land thinking the prices would stay up, the interest rates would stay low where they were. But then the culmination of all these things happening in the late 70s and early 80s and that just put the squeeze on many families. And they simply couldn’t make it.”

For many farmers, the way of life they always knew was threatened. More than $25 billion was poured into subsidies in1986. By 1987, there added an additional $4 billion and talked of overhauling the Farm Security Act. For most farmers, things did not change much after the Farm Security Act. Many still lost the farm and a way of life was shattered. Farmers relied more on grassroots groups than government. F arm Aid has given out over $37 million in aid in the past 25 years. Other grassroots groups continue to aid farmers today. While rural America continues to shrink under a growing urbanized country, the number of farms continues to shrink along with the number of farmers. Reagan, even after getting the aid for farmers, still wanted to deregulate the farm industry and price controls. And for many of the corporations that process the agricultural products, that deregulation did take take place just not in the price of crops and meat. While Reagan gave with one hand, the other hand oversaw the change in a deregulated processed foods industry. Today, only a few corporations oversee the processing of agricultural products. In addition, the selling of the products is now also done by a few regional supermarket chains.

For further reading:

http://www.nebraskastudies.org/1000/frameset_reset.html

The Tucker Car Company: A Wreck Waiting to Happen?

Change grows slowly in America. It takes a long time for the change to reach a tipping point. But when it does reach a certain level, the change takes off. On the other hand, if change tries to happen too fast, it is fought off with resistance, anger, and envy. Is this the case with the Tucker Car Company? Or did the company implode under its own mismanagement?

Preston Tucker was a whiz kid. He rebuilt cars in his garage he had gotten out of a junkyard. As a young man, he worked with cars at the Indianapolis Motor Speedway in the 1930s. During World War II, Tucker attempted to build a plane, known as the “peashooter,” for the US, but problems within the company led to its failure. However, Tucker was successful in designing and building turrets for planes and other assorted vehicles. His combat car was turned down by the government because it went too fast. The army only wanted 35 mph for its combat vehicles.

After the war, Tucker turned his eye toward developing a new car. Hiring designer Alex Tremulis, Tucker’s vision of the car of the future began to take shape. Influenced by the design of rockets, the car originally gained the nickname, the Tucker Torpedo. With the help of engineer John Eddie Offut, who had worked with Tucker and Harry Miller at Indy, the engine was put in place. And the car’s outside design was not the only futuristic thing about it. The car was quite different from any car of the era. It had several unique features which were miles ahead of its time.

1. The engine was located in the back and the trunk was in the front.
 

2. It had three headlights. The two outside lights were normal lights like any other car. The middle headlight, or “cyclops,” could change direction.

3. It had pop out front windshields. In case of a crash, the glass could come out in two pieces to prevent it from breaking all over the passengers.

4. Its radio system was unparalled.

5. In addition, there were disc brakes, an air cooled engine, interchangeable seats.

Other Specifications:

Horizontally opposed rear-mounted flat six cylinder engine
Aluminum block produced by Franklin Aircooled Motors
Maximum horsepower: 166 b.h.p. @ 3200 r.p.m.
Maximum torque: 450 lbs/ft @ 1800 r.p.m.
Induction system: 2-bbl. Stromberg downdraft carburetor, mechanical fuel pump
Exhaust system: Twin mufflers, 6 exhaust pipes
Electrical system: 6-volt battery/coil
Fuel feed: Direct fuel injection through rotating distributor pump; S-2 single plunger or S-3 multiple plunger systems. Pressure at nozzle; 100 to 200 p.s.i.
Operating oil pressure: 60 p.s.i.
Ignition: 12-volt system, Autolite distributor and low output coil
Weight (complete): 490 lbs.
Transmission: 4-speed manual with Bendix vacuum-electrical preselector
Brakes: 4-wheel hydraulic drums, internal expanding
General Specifications:
Wheelbase: 130 in.
Front tread: 64 in.
Rear tread: 65 in.
Tire size: 7.00 x 15.00
Height: 60 in.
Length: 219 in.
Width: 79 in.
Weight: 4235 lbs.
Fuel Tank: 20 gal.
Mileage: 18-19 m.p.g. average
Original price: $2450 (projected, 1948)
Performance (from Mechanix Illustrated, Aug. 1948)
0-30 m.p.h. 3.5 sec.
0-60 m.p.h. 10.0 sec.
Top speed 119 m.p.h. at Sebring, 1956
Original Tucker Paint Colors
100 Black
200 Walz Blue
300 Dark Green
400 Beige/Tan
500 Silver (Pearl) Gray
600 Maroon

The word of mouth on the Tucker began to spread before one car had been built. To build his car of the future, Tucker obtained the rights to the old Dodge Plant on Cicero in Chicago. It was to be the world’s largest automobile plant. He originally hired 1900 employees to build his fleet. To raise money for his corporation and manufacturing of the first set of cars, Tucker  used three ways to raise capital. Suspicion about all three would lead to his down fall.

1. Tucker sold licenses to 2000 dealers across the country.
2. Tucker began selling stock in his company. Over 10,000 such certificates were issued.

3. Tucker also began selling accessories to the car.

Over $25 million in capital was raised. This amount of money turned many heads in the automobile industry. Small start up car companies at that point in history relied on grants. For an upstart company like Tucker, the capital raised almost insured its success. However, the amount raised caught the ire of the Securities and Exchange Commission (SEC). They soon filed a suit which bring about the downfall of the company because the assets were frozen. The company could do nothing. Tucker and six of his executives were indicted on 25 counts of fraud. To try and quell speculation regarding the trial, Tucker wrote this letter to the public to keep faith in the company.

The court case would drag on until 1950.

No real evidence was put forth by the SEC and Otto Kerner that the Tucker Corporation was misusing the capital it had raised. Every prosecutory piece of evidence had been rebuked under cross examination. When it came time to give the defense, Tucker’s attorney, William Kirby, offered no defense. The six defendants and Tucker were all acquitted.

It was too late for the company though. The Tucker Car Company was over. The lawsuit had driven the company under. Only 51 cars were produced. 47 are still in existence. The Tucker Car Club of America has pictures and details about every single car produced.

Tucker would go to Brazil to build a car known as the Carioca. However, Tucker died of lung cancer in 1956. The Tucker ’48 sedans still live on for only a few people. The remaining cars today are valued at upwards of 200,000 a piece.Several of the design and safety features of the Tucker would make their way into car design in the 1950s.

The tragedy for Tucker was that the lawsuit by the SEC brought down his company before it could even compete with the Ford, GM, or Chrysler. Speculation exists that pressure was put on the SEC by Michigan Congressman to bring down Tucker. Economist Melvin Barger disagrees. He believes Tucker was doomed from the start.

Tucker himself, if he had possessed more self-understanding and business savvy, might have prospered as a custom car remodeler. He did have a love of cars and he had experience in the automotive field. In a way, the Tucker car itself was a customized remodeling of existing car concepts. Tucker’s use of the Cord trans-mission, for example, showed that he understood nifty innovations which somehow hadn’t succeeded in the market. But one of Tucker’s problems was in being carried away by a “dream” while ignoring the practical work needed to apply it for useful purposes. Mere possession of a dream does not excuse a person from exercising prudence in business relationships.

Steve Jobs – Innovation on the Go

Steve Jobs did not invent the cell phone. He made the iPhone better. Steve Jobs did not invent the digital music player. He made the iPod better. Steve Jobs did not invent the portable tablet. He made the iPad better. These three products from Apple, Inc. made Jobs a fortune, and cemented his place in history as an innovator beside Ben Franklin and Thomas Edison. As a company, Apple has had a stable of loyalists who stand by everything the company makes. With Jobs back at the helm the last 15+ years, the company has reshaped the culture and how information is distributed across the planet. For Jobs, however, success came in waves. What resulted was a change in how we as a public access information.

For Jobs, his career began with his friendship with Steve Wozniak. First, the two friends began as phone hackers. That’s right, phone hackers. It wasn’t called hacking back in the early 70s, it was called phone phreaking. Wozniak built a blue box to access phone networks and sold them to hack into phone networks. Out of the interest in phreaking, Wozniak began to branch out into computers. The Homebrew Computer Club began to draw the interest of Wozniak. The club saw Wozniak try and fail many times in building the computers. What came about was the Apple I. Soon the Apple II followed and Apple was on it way.

In the 1980s, Jobs fought for control within the company. In 1984, the Macintosh with its user interface (mouse) made waves but the actual computer was quite limited in what it could do. What the Mac needed was software. To achieve that, Jobs turned to a young software company named Microsoft. Still Macintosh sales were slow. Jobs was forced out of the company in favor of former Pepsi CEO John Scully.

Next for Jobs was a company called Next. Next did not go well. Sure, they came out with a sleek, and slick, all black design. The computer did not catch on. However, the operating system was drew rave reviews. In addition to software development, Jobs had overtaken Pixar in 1986. Using the talents of John Lassiter, Toy Story was born. Upon its release in 1995, Toy Story joined the pantheon of great American films. Eventually, Jobs took Pixar public and made billions before the company was absorbed into Disney.

In 1996, Jobs, much wiser from his time away from Apple, was a different man. He was more secretive, and less in your face (to his competitors but not his employees). Jobs returned to the company he started. For the next 15 years, Jobs took a company on the brink of failure, streamlined and simplified products and product lines.

Jobs said,

“It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them” and ““That’s been one of my mantras — focus and simplicity. Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.”

To keep the company afloat, Bill Gates invested $150 million in Apple. In addition, the “Think Different” campaign brought the company back into the American Consciousness. Using a variety of figures from history, innovators all, the slogan caught on.

In 1998, the iMac appeared. 6 million units were sold making it the largest selling computer in history.

In 2001, Jobs turned the music industry on its ear first with iTunes. Songs cost 99 cents. The song became the thing, not the album. When the iPod was released in October of 2001, the device changed how people listen to music. They listen to it everywhere. The CD was dead, and the iPod was King.

Throughout the 2000s, Apple and jobs began to be at the forefront of innovation. The greatest being the iPhone and the iPad. Jobs was the face of Apple. He loved the simple and sleek looks of his products along with the easy to use aspects. The price, however, was not as good. Initially, the costs of the products was substantial. Today, Apple computers (MacBook Pro) are expensive. iPhones had an $800 startup cost and had limited service until its 2010 deal with Verizon.

Since 2004, Jobs had been battling Pancreatic cancer. Over the next seven years, Jobs lost weight but continued to do his job and show up at product launches. Eventually, the cancer would claim his life.

Above all else, what Jobs and Apple created were not just products. Rather, what made the products impressive was the ability of the user to be mobile. No longer do you have to be plugged in to listen to your music, see your photos, or access the Internet. You can do it all from the palm of your hand.

As Jobs said at Stanford in 2005:

“Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it. And, like any great relationship, it just gets better and better as the years roll on. So keep looking until you find it. Don’t settle.”

Here is a great documentary on the iPod and how it changed the world

Here is a good documentary on the career of Jobs

Barbed Wire Barons – Glidden, Ellwood, and Haish

Growing up in rural northern Illinois, history is everywhere, as it should be. From the flat lands of DeKalb County to the rolling hills of Ogle, Carroll, and Jo Daviess Counties, the land is filled with stories of Prairie Bandits, Indian Wars, Inventors, and a Pioneer Spirit. First settled in the 1830s, northern Illinois has a much harsher climate than the southern part of the state. Illinois became a state in 1818 and it took 12 years for settlement to creep its way north from the south. The southern part of the state benefited from the Ohio and Mississippi River systems along with a humid subtropical climate. However, the south did not have the great thick rich soil of central and northern Illinois that farmers craved. Slowly, farmers and civilization made its way north. The invention of a self cleaning plow in 1837 combined with the I&M Canal, further spurred northern settlement. And in doing so, pioneers encountered a land filled with life, and winters that would chill the bones. Out of these environs would come three men who would transform one community and the western United States.

In 1843, Joseph Glidden moved to Ogle County with his young wife and sons. They would all perish in the next few years except for Joseph. Leaving Ogle County in 1850, Glidden settled on a farm 1 mile west of DeKalb. In 1851, he would marry Lucinda Warne. The land, 600 acres in all, required a lot of work. Throughout the 1850s and 1860s, Glidden prospered and was a stalwart member of the community. For several years he was sheriff of the county in addition to being a farmer.

Issac Ellwood had a different route to the county. Ellwood, as a young man, worked on boats traversing the Erie Canal, worked as a clerk in a store, and went to California in 1851 as part of the Gold Rush. Whether it was working in the mines or in a store, Ellwood was quite frugal and saved his money. Ellwood would spend 4 years in California before heading back east. Ellwood made his way to DeKalb in 1855. Upon arrival, he set up a hardware store in the little town of 500.

While Glidden and Ellwood were both born in the US, Jacob Haish was born in Germany and immigrated to the US in 1836. In the 1840s, Haish first made his way to DuPage County before marrying and moving to the DeKalb area. While Glidden was a farmer and sheriff, and Ellwood a businessman, Haish was a carpenter. He set up shop in DeKalb in 1853. It was Haish who first had the idea for a new kind of fencing. Haish originally tried using Osage Orange bushes to keep livestock in. The thorns of the bushes were very similar to the barbs of what would soon be barbed wire. However, the bushes took up too much space and took too long to grow in addition to maintaining. They also did not adjust well to the climate of the North.

As these three men plied their individual trades, they all became very prosperous in their own right. They did know each other (It’s hard not to in a town of only 500-700). Legend has it that the three men all attended a local fair where they saw the latest style of fencing called barbed wire. Actually, barbed wire had been around since the 1840s. Not the wire that we know today, but early predecessors nonetheless. At the fair, this version of barbed wire was attached to wood. It was not a stand alone fence or wire. All three men purportedly left the fair feeling that they could do better. Legend also has it that by the early 1870s, Glidden’s wife, Lucinda, was tired of the cattle roaming all over the place. She urged her husband to do something about it.

In spite of local local legend and myth, both Glidden and Haish set about in the early 1870s to make a new, better version of fencing. Glidden often used hairpins of his wife to test out his latest model. Glidden began applying for patents on barbed wire as early as 1873. But his 1874 version would become the most widely known. Dubbed “The Winner”, for reasons that will be explained later, the two wires intertwined with a single barb.

Glidden's Patent

Haish had begun work on his own version. Haish’s version was very similar to Glidden’s. It contained two wires strung together and a single barb. Like Glidden, Haish began work in 1873 on his barbed wire. It was not until 1875 that Haish perfected his version of barbed wire with the “S Barb”. Over the next twenty years, the two men would spend over $2 million in litigation over who had the idea and patent first. They both would make millions more in manufacturing but eventually they would settle out of court. Each would pay the other the same amount per pound produced. However, Glidden’s patent would be declared “the winner”.

Haish's Patent

Issac Ellwood was not an inventor but he was a shrewd businessman. For the vast sum of $250, Ellwood went into business with Glidden manufacturing the wire. Both men became very rich very fast. Glidden would not stay in the business long. He sold his interest, and kept a royalty, to Washburn and Moen. Glidden would go on to own the local newspaper, bank, hotel, and many other businesses in the now thriving capital of barbed wire.

As for the wire, it transformed the west. The long cattle drives were now over. Railroads came to town to pick up the cattle. The occasional range war sprang up as emotions boiled over water rights and land access to take the cattle to the railroad. Indians called the wire “The Devil’s Rope” for what it could do to flesh. Some states even tried to outlaw the wire. They failed.

But in the 1870s and 1880s, railroad companies loved the wire. Instead of having to pay out damages to farmers whose cattle wandered aimlessly on to the tracks, the railroad companies used the wire to stop livestock from running in to the train.

But back in DeKalb, barbed wire made the town. Using immigrant labor, Swedes came to work in the barbed wire factories, each employing near a 100 men. The town grew and with it, Glidden, Ellwood, and Haish each were philanthropic with their wealth. From banks to a post office to a hospital to a library, the three men provided much needed capital for many public works.

In the 1890s, the three men, along with Clinton Rosette, sought to bring a teacher’s college to DeKalb. The men, who had different political philosophies, set aside their differences to make it happen. DeKalb, along with Dixon and Rockford, were the final cities in competition for the college. The three men knew that if DeKalb got the college, then the community would thrive even more. Glidden offered 60 acres to be set aside for the college and Ellwood would provide interest free loans for the construction of what would later be called Altgeld Hall. A plaque of the four men (Rosette included) hangs in the library at NIU, aptly named, Founders Memorial Library. And NIU’s sprawling campus now encircles the Glidden homestead.

No matter where you go in DeKalb, or the county, you are reminded of the influence that these three men have had. From roads to streets to buildings and a University, the town still remembers. Ellwood’s house still stands as do Glidden’s homestead and barn. Unfortunately, Haish’s home was destroyed in the early 1960s. Their influence as barons and pillars of the community still stands.

Altgeld Hall today

For further reading on the impact of Barbed Wire – Read The Devil’s Rope

For further viewing – See Barbed Wire Pioneers produced the Department of Communications at NIU.

Ronald Reagan and the Conservative Movement – A Revolution? A Reaction? A Reform?

I have always joked that in the rural Illinois school district where I teach that there are two types of students: there are those who are conservative, and there are those who are more conservative. And such is the case throughout most of rural Illinois. What was once the Land of Lincoln is now Reagan Country. Conservative values reign in the small towns and countryside outside of Chicago. It has not always been that way. But, how did Reagan establish his values as a Conservative at a time when the Moderates ruled the Republican hierarchy, not only in Illinois, but all throughout the country?

For Ronald Reagan, he grew up in one of these small towns in northern Illinois, 12 miles from where I grew up. However, it took a while for those Conservative values to take hold in Reagan. Many people forget that Reagan was originally a Democrat in the 1940s and 1950s. As head of the Screen Actors Guild, Reagan, while a staunch anti-communist, was quite liberal. Things for Reagan changed in the early 1950s. The first event that influenced his shift from the left to the right occurred when Reagan would meet, and marry, actress Nancy Davis. Combined with Reagan’s work for the General Electric Theater TV show, Reagan shifted to the right, an almost libertarian point of view. As part of his duties as host of the show, Reagan would travel across the country and met people at GE plants across America. It was during those tours meeting the middle class that his philosophy began to shift to less government intrusion and lower taxes. In the early 1950s, the tax rate for Americans earning $10,000/year was at 38% (which very few did – the minimum wage was not even a $1/hour). For 8 years, Reagan work for GE actually turned into a political apprenticeship of sorts.

Reagan’s conservative philosophy was rooted in the words of John Winthrop. The famous City” on Hill” from the 1600s defined Reagan’s vision, and version, of conservatism and of America.

“for wee must Consider that wee shall be as a Citty upon a Hill, the eies of all people are uppon us”

It is out of the “City on a Hill” that the Reagan Conservative philosophy is born. At a commencement speech at his alma mater, Eureka College, in 1957, he stated:

Looming large in your inheritance is this country, this land America, placed as it is between two great oceans. Those who discovered and pioneered it had to have rare qualities of courage and imagination nor did these qualities stop there. Even the modern-day immigrants have been possessed of courage beyond that of their neighbors. The courage to tear up centuries-old roots and leave their homelands, to come to this land where even the language was strange. Such courage is part of our inheritance, all of us spring from these special people and these qualities have contributed to the make-up of the American personality.

Reagan had a vision of what America was supposed to be, what is was once, and what it could be again.

In the 1960s, Reagan’s philosophy began to move more to the right. At a time when America was moving to the left, and New Dealers were roaming the halls of Congress, Reagan stood in stark contrast to mainstream politics. In 1964, Reagan supported Republican candidate Barry Goldwater. Reagan’s stump speech became the foundation of his philosophy.

I am going to talk of controversial things. I make no apology for this.

It’s time we asked ourselves if we still know the freedoms intended for us by the Founding Fathers. James Madison said, “We base all our experiments on the capacity of mankind for self government.”

This idea — that government was beholden to the people, that it had no other source of power is still the newest, most unique idea in all the long history of man’s relation to man. This is the issue of this election: Whether we believe in our capacity for self-government or whether we abandon the American Revolution and confess that a little intellectual elite in a far-distant capital can plan our lives for us better than we can plan them ourselves.

You and I are told we must choose between a left or right, but I suggest there is no such thing as a left or right. There is only an up or down. Up to man’s age-old dream-the maximum of individual freedom consistent with order or down to the ant heap of totalitarianism. Regardless of their sincerity, their humanitarian motives, those who would sacrifice freedom for security have embarked on this downward path. Plutarch warned, “The real destroyer of the liberties of the people is he who spreads among them bounties, donations and benefits.”

The Founding Fathers knew a government can’t control the economy without controlling people. And they knew when a government sets out to do that, it must use force and coercion to achieve its purpose. So we have come to a time for choosing.

Public servants say, always with the best of intentions, “What greater service we could render if only we had a little more money and a little more power.” But the truth is that outside of its legitimate function, government does nothing as well or as economically as the private sector.

Yet any time you and I question the schemes of the do-gooders, we’re denounced as being opposed to their humanitarian goals. It seems impossible to legitimately debate their solutions with the assumption that all of us share the desire to help the less fortunate. They tell us we’re always “against,” never “for” anything.

We are for a provision that destitution should not follow unemployment by reason of old age, and to that end we have accepted Social Security as a step toward meeting the problem. However, we are against those entrusted with this program when they practice deception regarding its fiscal shortcomings, when they charge that any criticism of the program means that we want to end payments….

We are for aiding our allies by sharing our material blessings with nations which share our fundamental beliefs, but we are against doling out money government to government, creating bureaucracy, if not socialism, all over the world.

We need true tax reform that will at least make a start toward restoring for our children the American Dream that wealth is denied to no one, that each individual has the right to fly as high as his strength and ability will take him…. But we can not have such reform while our tax policy is engineered by people who view the tax as a means of achieving changes in our social structure….

Have we the courage and the will to face up to the immorality and discrimination of the progressive tax, and demand a return to traditional proportionate taxation? … Today in our country the tax collector’s share is 37 cents of every dollar earned. Freedom has never been so fragile, so close to slipping from our grasp.

Are you willing to spend time studying the issues, making yourself aware, and then conveying that information to family and friends? Will you resist the temptation to get a government handout for your community? Realize that the doctor’s fight against socialized medicine is your fight. We can’t socialize the doctors without socializing the patients. Recognize that government invasion of public power is eventually an assault upon your own business. If some among you fear taking a stand because you are afraid of reprisals from customers, clients, or even government, recognize that you are just feeding the crocodile hoping he’ll eat you last.

If all of this seems like a great deal of trouble, think what’s at stake. We are faced with the most evil enemy mankind has known in his long climb from the swamp to the stars. There can be no security anywhere in the free world if there is no fiscal and economic stability within the United States. Those who ask us to trade our freedom for the soup kitchen of the welfare state are architects of a policy of accommodation.

They say the world has become too complex for simple answers. They are wrong. There are no easy answers, but there are simple answers. We must have the courage to do what we know is morally right. Winston Churchill said that “the destiny of man is not measured by material computation. When great forces are on the move in the world, we learn we are spirits-not animals.” And he said, “There is something going on in time and space, and beyond time and space, which, whether we like it or not, spells duty.”

You and I have a rendezvous with destiny. We will preserve for our children this, the last best hope of man on earth, or we will sentence them to take the first step into a thousand years of darkness. If we fail, at least let our children and our children’s children say of us we justified our brief moment here. We did all that could be done.

Goldwater lost and lost big. Despite the loss, Reagan’s views did not waver. In 1965, Reagan came out against Medicare and other government programs including welfare. In 1966, Reagan dipped his feet into politics when he ran for Governor of California.

Despite cat calls for his lack of actual political experience, Reagan surprisingly defeated incumbent Governor Pat Brown. His charm, and down home family values, sparked an interest in the populace. Over the next eight years, Reagan further established his conservative values. It is one thing to have those values, it is another to govern with those values. Reagan struggled and at times compromised his values and then wished he hadn’t. His first action, a 10% across the board cut in government spending, met with disruptions and discontent at many college campuses across the state. For the first time, many college students in California would have to pay tuition. They were not happy. Protests broke out. Reagan was not afraid to use force to keep the peace on those campuses. Using the National Guard to occupy Berkley for 17 days, while Conservative, came across as an extremist at the time. However, Californians did not see it that way. The majority of Californians liked Reagan’s reaction. To 1960s Californians, they now had a hero in a time of massive change in the country.

Whether it was abortion, dealing with the antiwar movement, or communism, as Governor, Reagan honed his media and governing skills. After his 1970 re-election, Reagan set out in his second term to follow through on his own values of less government, lower taxes. He succeeded in restructuring welfare by working with the Democratic legislature of California. His second term was quite a success in California. A groundswell began for Reagan to run for President.

The national political scene had changed by 1976. Throughout the 1950s and 1960s, the Republican mainstream was very moderate. With Nixon’s resignation in 1974, the mood of the Republican Party was slowly changing. President Ford’s firing of Nixon’s appointments was shocking as the moderate wing of the party was replaced by more Conservative thinkers. Ford, using his Chief of Staff Donald Rumsfeld and a young Richard Cheney, began a shift in the party away from Nixon moderates. In 1976,  America was not ready for a Conservative President. Ford beat out Reagan for the Republican nomination but the experience brought Reagan’s political views to a nation. Jimmy Carter would win the presidency and the next four years set up Reagan and his conservative views as a stark contrast to Carter’s. A new Republican Party would be born.

The 1980 campaign saw Reagan run on a just a few key ideas
1. Less Government
2. Stronger Defense
3. Anti-Communism
4. A belief that America could be strong again

Here is an ad that touted Reagan’s experience as Governor and his views on Government

America responded overwhelmingly to Reagan, and against Carter, and a shift to Conservatism in America reached fruition. Reagan’s effect on future Republicans would be huge. This coming school year (1011-2012) sees National History Day using the theme of: Revolution, Reaction, and Reform in History. While Reagan’s conservative beliefs have reshaped the Republican Party, these beliefs, their formation, and influence would be an excellent topic to do a project on. I know two of my students have already expressed an interest. For me, as a paper judge as well, what I would look for in this project is how the times and experiences of Reagan shaped his political philosophy. And was that philosophy a reaction to the times? Finally, how did the Conservative philosophy actually reform politics besides beliefs about the role of government? What actions are considered Reaganesque? I would really enjoy a project that delves deeply into this issue.

For further Reading and Resources for any student doing a NHD project on Reagan
http://www.pbs.org/wgbh/americanexperience/films/reagan/player/
Not only is there a 4 hour video on Reagan, but there is wealth of resources including primary documents, quotes, and interviews.

Reagan at 100: A Cartoon Legacy

By Herb Block

On Sunday, February 6, 2011, Ronald Reagan’s 100th birthday will be celebrated in the nearby towns of Dixon and Tampico. To many Republicans, Reagan is close to the second coming of Christ. Reagan is quoted more by modern Republicans than the man most associated with the party in Illinois, Abraham Lincoln. But to most historians, Reagan’s legacy is not what modern Republicans claim it to be. In fact, it is quite mixed.

I, myself, have blogged on the legacy of Reagan before (and here, too). He truly is an enigma to me. As the chief executive, no major legislation that has any effect exists from his terms. NONE! Granted, there was a Democratic Congress, but still, he could not get one thing passed that impacts our lives today? Is Reagan’s legacy wishful thinking? Sure, he made Americans feel good about themselves after the malaise of the 1970s. But unemployment went down slightly (after an initial jump to 10% in 1982) over the eight years. Reagan’s greatest strength as chief executive was his ability to deliver a good speech. And that he did…time after time after time. But does that make Reagan a great President? To some it does.

As I sit and work on my doctorate from time to time, my second topic of choice was always how Reagan is treated in textbooks. Looking at the US History textbook, Reagan gets two sections in a chapter on the rise of the Republicans. Once section discusses supply side economics, the other section Reagan’s fight against Communism. My friend and former Union Representative, Dave, recently wrote a letter to the editor of the local paper derailing against Ronnie on this auspicious occasion.

To the Editor:

The utter failure of “Reaganomics” is part of President Ronald Reagan’s legacy.

This is relevant as we celebrate Reagan’s centennial in the fourth year of the Great Recession. Reagan’s unabashed pursuit of “supply-side” economics in the belief that cutting taxes for the rich would result in their investing it productively helped to transfer income upward. The rich got richer; the poor got poorer.

Reagan’s unabashed pursuit of deregulation helped to further the lack of restraint and responsibility on Wall Street and in corporate suites, leading us down the path to the economic situation we are in today.

Reagan’s unabashed assault on unions helped to weaken any voice for working people and contribute to a decline in wages for a generation. Workers turned to credit to sustain their standard of living, and the bill came due.

When Reagan took office, the top 1 percent of Americans took home 8 percent of all income. Today, the top 1 percent takes 23.5 percent of all income. Uncontrolled greed has left our nation weaker, and that is part of Reagan’s legacy.

Finally, Reagan’s unabashed assault on government helped weaken a belief in democracy. The government belongs to all citizens. We elect our government. We do not elect corporate CEOs. Yet the latter’s inordinate power in our nation today is indisputable.

In all fairness, Reagan was president for only eight years. Those who followed largely continued in his path, including Democrats. “Trickle-down” economics has had a 30-year run, and it has failed. It’s time to move on.

While Dave did throw in some good facts about class income and union breaking, he forgot the most important thing – the deficit skyrocketed under Reagan. Government spending increased! When Reagan said Government was the problem, he wasn’t kidding!

What most people have trouble with understanding is the dichotomy between what Reagan said and what he did. They were always the opposite. Reagan was a believer in the economic policies of Milton Friedman and the Chicago School of Economics: lower taxes, lower spending, deregulate, and end welfare systems. While Reagan never achieved Friedman’s policy, Clinton would. In theory, Reaganomics worked when there was a new revolution like the Internet and computers to drive the economy. But that is not very often. Domestic affairs were not Reagan’s strongest suits.  Those belonged to speeches and dealing with Communists.

Reagan gave three of the most memorable speeches by a President in my lifetime. The first was on the Challenger disaster. The others were at the Brandenburg Gate telling Gorbachev to “Tear Down this wall!” and the third speech was on the Strategic Space Defense Initiative. All three were filled with a toughness, an optimism, and a will to improve life for Americans. Here was Reagan’s finest shining moment:

His role in foreign affairs is mixed. The Iran Contra Scandal rocked the nation and many Americans thought he should resign. When terrorists killed over 200 Americans with a truck bomb in Lebanon, Reagan tucked tail and brought the rest home. In dealing with the Soviets on the a new Start Treaty, Reagan was in his element in playing the role as the leader of the American people. And you know, maybe that’s what Americans needed at the time. “Give the people what they want” is a phrase that goes back to the Roman Empire and Reagan did that in spades. Reagan seemed quite prophetic at times about communism:

“The years ahead will be great ones for our country, for the cause of freedom and the spread of civilization. The West will not contain Communism; it will transcend Communism. We will not bother to denounce it, we’ll dismiss it as a sad, bizarre chapter in human history whose last pages are even now being written.”

As a model for economics, Reagan was not one. For Reagan, we had a man whom Americans loved for his humor, toughness, and sense of right and wrong – his demeanor was more like ours than a politician’s. His philosophies on economics have never really panned out on their own. In fact, they have done more damage than good.

As someone who teaches history for a living, nothing quite tells the story of the Reagan dichotomy like a cartoon. And over the years there have been several which I use to teach what an enigma Reagan is. Nothing quite reaches kids like a cartoon. It teaches them to connect several items together and provides a basis for dialogue and debate about the merits of the point of view of the cartoonist.

By Kirk Anderson

By John Sherffius