Saturday, July 12, 2008

Stolen cars and Time magazine in 1933

I found this article from Time from July 3, 1933 regarding the profitable business of fencing stolen car parts. It's worth reading just for a peak into history, a time when "Mr. Chrysler" himself made Chryslers, when cops might go months without getting paid and the word "cahoots" showed up in Time articles. It notes that insurance companies were complicit because it saved them money for garages to use cheaper stolen parts to make repairs.

The most interesting lesson here, though, is that Time stories from 1933 are available free online. How cool is that?

More on what happens to stolen car parts

One of the things that hasn't made sense to me as I've pondered the fate of stolen car parts is that I can't understand how it can be profitable enough to warrant the risk. Sure, the parts themselves start out as free (ignoring costs associated with getting caught), but it seems to me like it would be impossible for stolen parts to be cheaper than, say, real Honda parts at the dealership because the trade in stolen parts would lack the efficiencies of scale and specialization, the benefits of sophisticated inventory management, and the discounts on shipping that Honda has.

My independent garage says they can get axles for my car in an hour. Someone somewhere would have to be sitting on (and paying for land and a building to store) a massive variety of car parts, so that they've got axles for my make/model/year car on hand. And their inventory would have to be large enough that my garage get my parts so reliably that they can quote me a low price for the repair. It just seems like there can't be that many cars stolen to support that kind of inventory. And it also seems like there aren't that many of these independent garages to make it worthwhile to maintain that kind of inventory.

I see that State Farm sheds some light on this, describing that garden-variety stolen-car-part fencing is a highly organized enterprise, with a national distribution network:
This illustrates the fact that most cars today are stolen by people who are in the theft game for money. Because the parts of a car are worth more collectively than an intact car, many stolen cars are delivered to chop shops. These shops specialize in stripping cars, disposing of identifiable parts and selling others through a national network. Chop shops can meet the demand for parts more quickly and, typically, more cheaply than legitimate parts dealers.

Here's a bit more information about how a distribution network for body parts worked in Philly until it was busted:
The participants maintained close contact through a network of speaker phones called an "Elite Line." The systems can connect more than 100 offices at once with the push of a button. Orders were placed on the system, often in a verbal "code," McGinnis said.

Such networks have been used by the auto-repair industry for decades, Ozga said. He had three networks feeding into his office with a combined 260 members. Many dealt in illegal parts, but many others didn't, he said.

According to Ozga, those shops wishing to stay "legitimate" knew what was going on with illegal parts. They could hear it on the speakers. But they wouldn't deal with those engaged in the illegal trade.

According to McGinnis, the participants in the illegal organization benefited from high profit margins on the stolen goods. A thief might get $300 from a chop shop for a stolen car. The shop would package the entire body of the car and sell it to the salvage yard for $1,500, then get hundreds more from another customer for the engine and transmission.

The salvage yard could sell the front end of the car to the body shop for $1,500, leaving the rear end, side panels, doors and other parts for profit.

The division of labor isn't always as such, however. Often, the salvage yards run their own chop shops, or the chop shops deal directly with the body shops, according to Ozga, who admits buying and selling the stolen parts but denies running his own chop shop.

Although described by authorities as an organization, the stolen-parts business differs from other crime syndicates. There is no true hierarchy and no "muscle" involved.

"We're talking about organized crime without the violence," said Assistant U.S. Attorney Robert Reed, the lead prosecutor in the chop-shop investigation. "These were businesses. There were workers. They were paid wages. There were shifts and (production) expectations. There were Christmas bonuses.

"It was a corrupt shadow economy."

The Boston Globe reports that some stolen cars end up in Iraq and are used for car bombs.
Toole said American-made vehicles are particularly attractive to terrorists in places such as Iraq. Forensics specialists there have identified some bomb-rigged cars as vehicles that were swiped off American streets and sold overseas by criminal gangs and organized crime syndicates.

Terrorists desire a "vehicle like a Suburban because it can hold a lot but it also blends in," said Toole, who is leading the FBI's efforts to complete the database.

That particular Chevrolet SUV model is popular, he said, because "it looks like an American security vehicle" in Iraq and "they can get closer to their target than if it was a beat-up old Toyota."

Friday, July 11, 2008

My first vacation in 4 years...

I'm leaving for Island Park, Idaho tomorrow. Gone for a week.

Speculators necessary

So says my mentor Dr. Walter Williams in yesterdays JWR:

Say that today's price of corn is $7 a bushel. I have a hunch that because of Midwest flooding, higher demand due to droughts and war in other parts of the world, that in May 2009, corn will sell for $12 a bushel. I stand to make a lot of money by buying corn now for $7 a bushel, holding it, and in May 2009 selling it for $12 a bushel. If many speculators share my hunch and buy more corn now, today's price, sometimes called the spot price, is going to rise let's say to $10 a bushel.

Higher prices for corn, and everything made from corn, might give rise to consumer complaints. While Congress can't stop the Midwest rain, droughts and wars in far off places, it can scapegoat speculators. Let's say that Congress outlaws the corn futures market, or makes futures trading more costly. Doing so will definitely lower the spot price of corn. The price might return to $7 a bushel, making corn consumption once again "affordable." You might exclaim, "Isn't Congress wonderful?" But what about May 2009?

Suppose the Midwest floods have a significant impact on corn production; there's drought and war in far off places raising the demand for corn exports. What do you predict will be the availability and prices of corn in May 2009 after Congress has outlawed, or made futures trading more difficult? If you answer less corn and much higher prices, go to the head of the class. By outlawing or impeding futures trading in corn, Congress encouraged Americans to ignore the future. Had Congress not interfered, people would use less corn now, making more available in May 2009. Thus, one of very valuable functions performed by the speculator is the allocation of resources over time. It makes sense to take the future into account when making consumption decisions today. The futures market, by the way, is no bed of roses. My hunch about corn supply and demand conditions might be dead wrong. Its May 2009 price might be $3 a bushel and I would have to sell at a loss. Futures trading is risky business.

Where do stolen car parts go?

When a car is stolen "for its parts", where do those parts go?

I need new CV joints in my Honda Accord. I know this because they are clicking up a storm. I called a Honda dealership/service center and asked what I thought was a simple question: "How much would you charge to change my front CV joints?" The service receptionist answered that they would need to see the car to diagnose it and they'd give me a quote at that time. Of course that would involve my making a trip out there and waiting for an hour or more for someone to look at it.

I tried harder: "Here's the deal. I know I need new CV joints and I'm price shopping. I'm going to call around, and if you don't give me the cost for replacing the joints, then I won't be having you do the work." She said she'd talk to a service person and call me back. A few minutes later she called back and cheerfully said that a new boot would cost $37, not including labor. Sigh. I reiterated that I know I need new joints, and I want the price for that, including labor, that the labor and the joints were the big ticket items, not the $37 boots, so the boot info wasn't really useful. She again tried to claim that they couldn't give me a number without seeing my car and I said "OK; I guess I won't be having your shop do the work." She said, "well, I'll have someone from service give you a call."

Fifteen minutes later, someone from service called and I AGAIN explained what I was trying to find out. He was reluctant to give a price without seeing the car because it might be something other than the CV joints. I defined the problem more specifically for him: "Let's just pretend it does need CV joints, how much would that be?" He said $1100, but I should know that the whole axle might need to be replaced and that would be more. Fine. Now I have a number and can compare to other garages.

I called a garage near the office. It's an independently-owned garage that's been there forever. I've never given them much to do, but the couple things I've had them do turned out fine. And they let dogs hang out in the lobby while you're waiting. When I asked for a quote on CV joints, I got an immediate clear unequivocal answer: "Oh, we wouldn't bother with just doing the joints. We'd recommend new axles and that would be $275 per side."

So now I have this choice to make (soon, before a wheel falls off, an experience I have had and would prefer not to have a second time): 1.) go the Honda dealership, where I know the parts are not only new, but provided by Honda and pay $1100 for just joints (or still more if they recommend new axles) or 2) go to the independent garage and get whole axles for $550, but where I have to wonder about the source of the parts because they're just so cheap and I doubt they have enough volume (compared to the mega-garages) to warrant much of a discount.

This brings me to the original question: when stolen cars are broken down for their parts, are the parts sold to places like these independent garages? or is there somewhere else that these parts go? Or is it a myth that cars are stolen for parts?

One final thought about the costs at these two garages. The Honda dealership just moved into a gargantuan new facility that sports a luxuriously appointed lobby with marble floors. They provide pitchers of ice water with cucumbers floating therein (surprisingly tasty), and offer headsets for listening/watching any of many TV monitors hanging from the ceiling. None of the people you interface with there have ever had any grease on their hands; they wear ties or nylons and probably have communications degrees rather than anything dealing with cars and the place is crawling with them; they make sure you have what you need and report to you periodically about what's going on with your car. It really is more like being at a spa than a garage. So it's easy to see why they'd need to charge a lot to cover their costs, in spite of the fact that I would think a) they buy in volume and b) I imagine they get the best price from Honda on their parts.

The independent garage bears no resemblance to a spa. The mortgage on the building was probably paid off a couple decades ago and they haven't extracted a dime's worth of equity to remodel. The floor was last tiled in about 1950 and last cleaned well sometime in the 70s. There's a very old Pepsi machine that dispenses 12-oz cans for $0.50. A handful of very old, raggedy car magazines are provided for customers' entertainment. It seems like their overhead is about as low as they can get it. That all makes it sound quaint, and it kind of is, but there's also an edginess to it that I'm having trouble describing. Let's just say, I wouldn't be surprised to learn that an employee or two has done some time.

Thursday, July 10, 2008

Re: Hot Water

I’ve been doing the wrong thing since I’ve been heating water for cooking. I’ll change and maybe zap/nuke the water before I put it on the stove. I’ve seen the inside of water heaters and it’s not pretty. You're right. This is one of those things I should have intuited.

Having said that, if the stuff was really bad for us, wouldn’t some smart plaintiff’s lawyer have made a pile of cash on this by now? Wouldn’t there be big ugly warning labels on faucets? Wouldn’t the makers of those new(ish)-fangled tankless water heaters be heralding their cleanliness?

Wednesday, July 09, 2008

Don't drink the hot water

This completely-obvious life tip just dawned on me this week: one shouldn't drink or cook with the water from your water heater.

Minnesota's Senate Race: Coleman v. Franken

I don't know if the Minnesota Senate race between Norm Coleman and Al Franken (yes, that Al Franken) is interesting to those outside Minnesota. Just stop me if it's not, because I'm not sure I'm all that interested in it. But I've been amused by Norm's advertising woes.

A group supporting Norm Coleman, the incumbent Republican, for Minnesota Senate is running this ad:

I haven't seen the Sopranos, so I didn't know who the narrator was; I just thought the ad had used a stereotype of a mob boss, thereby stereotyping the unions as mob-controlled. But I misunderstood a little bit; I guess the ad was using an actor portraying a stereotype of a mob boss, thereby stereotyping the unions as mob-controlled.

But besides that, the ad is disingenuous about Franken's position on the issue which is a bit more complicated than one can tell from the ad. From The Union News:
Since 1935, Hunter [secretary-treasurer of the Minnesota AFL-CIO] explained, federal law has provided two routes to union recognition: when a majority of workers in a workplace sign union authorization cards or when a majority of workers vote for union representation in an election supervised by the National Labor Relations Board.

Under current law, however, the employer can refuse to recognize the signed authorization cards. Instead, the employer can insist on an NLRB election. Then, "they use the election process to intimidate employees," Hunter noted. "We don't think that's a fair and democratic way to have an election."

The proposed Employee Free Choice Act gives workers, not employers, the choice to decide whether union authorization cards or an NLRB election determine union recognition, Hunter said. The legislation would recognize a union if a simple majority of workers in the workplace sign union authorization cards. Hunter emphasized that the legislation does not eliminate secret ballot elections: an NLRB election would take place if 30 percent of the workers in the workplace requested an election.
The AFL-CIO condemns the ads.

And then there's this one that Coleman's campaign is running:

Observers have wondered whether Normie and his wife were actually in the same room to film this or whether the wife was filmed separately and added later. Given that rumors abound that Normie and his wife are estranged and that he's a notorious skirt-chaser, you'd think the campaign wouldn't want to feed those rumors by producing this odd-looking ad.

Tuesday, July 08, 2008

Re: gentler pastures

I readily and humbly recognize the SEC is and was not.

I also was once a friend and student of the great Bill Montgomery.

Judge Jerry Buchmeyer

He is the U.S. District Court, Northern District of Texas. I was a year behind his daughter in high school. For non-Texas lawyers and non-lawyers, the Judge has edited a column in the Texas Bar Journal for years. He now has a blog to go along with it.

Taken from his column this month without authority but willing to delete this post immediately upon his objection (I couldn't quite get the format exactly right but it's close):

This last contribution is from Patrick Carew, Kelly Crawford, Rocky Dhir, and Steven R. Dunn, all of Dallas. Judge James R. Nowlin, U.S. District Court, Western District of Texas, Austin Division, wrote this marvelous order. Enjoy!

Before the Court in the above-entitled and styled cause of action is Defendant Wal-Mart Stores Texas, L.L.C.’s Opposed Motion for a Protective Order, file May 29, 2008 (Doc. #26). Apparently, the parties are unable to agree if the deposition of Wal-Mart’s corporate representative should occur in San Antonio, Texas or in Bentonville, Arkansas.

The Court is sympathetic with Defendant’s argument. Surely Defendant’s corporate representative, a resident of Arkansas would feel great humiliation by being forced to enter the home state of the University of Texas, where the legendary Texas Longhorns have wrought havoc on the Arkansas Razorbacks with an impressive 55-21 all-time series record.1

On the other hand, the Court is sympathetic with Plaintiff’s position. Plaintiffs might enter Arkansas with a bit of trepidation as many residents of Arkansas are still seeking retribution for the “Game of the Century” in which James Street and Darrell Royal stunned the Razorbacks by winning the 1969 National Championship. 2

Because the Court is sympathetic to both parties’ positions, it has found a neutral site, intended to avoid both humiliation and trepidation of retribution.

ACCORDINGLY, IT IS ORDERED THAT unless the parties agree otherwise, the deposition of the Defendant’s corporate representative shall occur at 9 AM on June 11, 2008 on the steps of the Texarkana Federal Building, 500 State Line Avenue, TX/AR 71854.

IT IS FURTHER ORDERED THAT each party is to remain on his or her respective side of the state line.

SIGNED this 3rd day of May, 2008.


1 It is worth noting that the Razorbacks, who disgracefully retreated from the Southwest Conference to the gentler pastures of the Southeastern Conference, could have likely learned a lesson about stamina and perseverance in the face of battle by visiting the Alamo in San Antonio.
2The Court takes judicial notice that the “Game of the Century” for the current century occurred on January 4, 2006, when Vince Young and Mack Brown led the Longhorns in a 41-38 win over the USC Trojans, thus securing the 2005 National Championship.

Monday, July 07, 2008

More P. J. O'Rourke Wisdom

"I suppose a notion of "fairness" also continued to bother me. Now that I'm a father I try to nip that in the bud. My eight-year-old daughter is, of course, much inclined to to make the statement "That's not fair!" Whenever she does, I tell her, "Honey, you're cute. That's not fair. You're smart. That's not fair. Your parents are pretty well off. That's not fair. You were born in America. That's not fair. You had better pray to God that things don't start getting fair for you."

Re: Phat

Now instead of looking fly and rolling phat
my legs are sticking to the vinyl
and my posse's getting laughed at
f-r-e-e that spells free
credit report dot com baby

You're right, I could never be this cool.

Re: Stimulus Checks

What a great example of unintended consequences. As it happens, I got stimulated today when the postal carrier stopped by.

Not enough money to subscribe to anything.

Not one but two prior notices informing me of how much it would be. What a disaster.

Sunday, July 06, 2008

"Stimulus" checks

Apparently, people have been. . . er. . . stimulated by their stimulus checks.

(I only mention it since Scooter posted about the stimulus checks earlier.)

Sea World

Visited yesterday. Most overwhelming observation: San Antonio is fat.

Jefferson's Great Gamble

Jefferson's Great Gamble by by Charles Cerami was a really quick read.

I'm not sure I really learned very much that I didn't already know but for a quick research tool for one wanting to learn about the Louisiana Purchase, it is a great beginning. Cerami did fill me in on some of the more important players I hadn't known or had forgotten.

He also gives appropriate homage to Jefferson's anguish over the expansion of Presidential and, therefore federal, powers by seizing the the opportunity which could not be refused.