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Advice to Climate Alarmists

If you are going to lecture skeptics on science, it is probably a good practice not to begin with an analogy that gets the most basic physics incorrect (hint:  the fact that falling objects of different masses fall at the same rate has been "settled science" since the late 1500s).  Also, using the children's book "If you give a mouse a cookie..." as proof of the existence of positive feedback loops will not be very persuasive to practitioners of big-boy physical sciences and other non-post-modernist researchers.

Posted on July 30, 2008 at 11:28 PM | Permalink | Comments (6)

Culture Change Benchmark

It is unbelievable that this was an actual advertisement in my lifetime.  And don't get me started on my kids reaction.  Via Hit and Run.

Posted on July 29, 2008 at 10:36 PM | Permalink | Comments (12)

So Am I A Stealth Parent?

Via Disloyal Opposition

"Helicopter parents" -- overinvolved, overbearing, moms and dads who just won't let their offspring venture into the world without a protective, hovering presence -- have made the news repeatedly over the past few years. This being summer, a new crop of articles detailing the woes sleep-away camp administrators are facing with clingy parents is making the rounds.

I am proud to say that we put our kids on an airplane and sent them off to camp for six weeks.  Other than a few brief letters back and forth (the only way we got our son to send a letter was to make up a fill-in-the-blank madlibs-type form for him to fill in) we had no contact with them.  And while we missed them, the kids had a blast and mom and dad had a trip without the kids for the first time in years.  The camp we send the kids to does not allow any contact whatsoever with parents in the first week, and only brief 3-minute phone calls in a 1-hour window each evening.

Posted on July 29, 2008 at 10:29 PM | Permalink | Comments (9)

Solar Concentrating Plants

For a while, I have been writing that traditional silicon/germanium based solar-electric panels are not yet economic as an electricity source.

I have hopes for other technologies eventually making direct solar conversion to electricity.  However, there seems to be some activity in solar concentrating plants, where solar energy is reflected onto tubes to boil water and drive traditional steam turbines to generate electricity.  Fortune has an article on one such plant opening recently:

The completed solar arrays will be trucked to California where Ausra is building a 177-megawatt solar power station for utility PG&E (PCG)  on 640 acres of agricultural land in San Luis Obispo County. (To see a video of the robots in action, click here.) The arrays focus sunlight on water-filled tubes to create steam to drive a turbine. Ausra manufacturing exec David McKay points to where standard-issue boiler pipe will be fed into a machine and treated with a proprietary coating that transforms it into a solar receiver.

I would love for this to work, but the article goes on to say that this approach still requires federal tax subsidies to compete with other electricity sources.  I am not very familiar with the economics of such plants.  Does anyone have a link or source that delves into the economics.  I am increasingly frustrated of late with alternate energy articles that fail to give any of the relevent economic info.  For example, I read an article in the Arizona Republic (sorry, lost the link) about Arizona's first wind project, but I could not get a sense from the article if the power was being purchased at market rates or some special inflated rate.

Posted on July 29, 2008 at 10:17 PM | Permalink | Comments (28)

So Lawrence Summers Was Fired For Being Correct?

So, apparently Lawrence Summers was correct:

Wall Street Journal -- Girls and boys have roughly the same average scores on state math tests, but boys more often excelled or failed, researchers reported. The fresh research adds to the debate about gender difference in aptitude for mathematics, including efforts to explain the relative scarcity of women among professors of science, math and engineering.

The latest study, in this week's journal Science, examined scores from seven million students who took statewide mathematics tests from grades two through 11 in 10 states between 2005 and 2007.
The researchers, from the University of Wisconsin and the University of California, Berkeley, didn't find a significant overall difference between girls' and boys' scores. But the study also found that boys' scores were more variable than those of girls. More boys scored extremely well -- or extremely poorly -- than girls, who were more likely to earn scores closer to the average for all students. The study found that boys are consistently more variable than girls, in every grade and in every state studied (see crude diagram above - showing distributions where mean intelligence is the same, but the standard deviation of male intelligence is greater than female intelligence).

In Minnesota, for example, 1.85% of white boys in the 11th grade hit the 99th percentile, compared with 0.9% of girls -- meaning there were more than twice as many boys among the top scorers than girls.

Of course, Summers did not get in trouble for being incorrect.  He got in trouble for saying something he was not supposed to say.  And it seems that the media are trying to avoid the same mistake, reporting what they want to believe, and not what the study actually says.

As I write in a post at Climate Skeptic, this is part and parcel of a new post-modernist science, where (as MaxedOutMamma writes) "If a research finding could harm a class of persons, the theory is that scientists should change the way they talk about that finding".

Posted on July 28, 2008 at 07:01 PM | Permalink | Comments (24)

I won!

There is a study out of the most and lest politically correct professions, as measured by the survey responses of faculty of those departments in universities.  Mechanical Engineering:  Zero politically correct responses.  Woohoo.

Posted on July 27, 2008 at 01:31 PM | Permalink | Comments (2)

Learning to Love the Fifth Ammendment

I thought this was a pretty good video -- why even the innocent should not talk to the police.  Learn to love your fifth amendment rights.  He demonstrates that even the innocent can make statements that can be used to wrongly convict them.

Posted on July 27, 2008 at 01:28 PM | Permalink | Comments (7)

The Aid Conundrum

I think there are a lot of us who scratch our heads over foreign aid.  While open to helping starving kids, its not always clear how to do so without simultaneously reinforcing and strengthening despotic regimes and dysfunctional cultures that caused the problems in the first place.  At least not without sending in the US military along with a trillion dollars or so for a decade or more.

This question could lead to a fairly interesting discourse, but in reality it does not.  Expressing the above quandary merely gets one labeled as unfeeling and insensitive.  One of the problems with having a reasonable debate is that the people and groups in the West who most support aid also are philosophical supporters of many of the failed leftish regimes that caused the aid to be needed in the first place, or else they are strong advocates for cultural relativism that feel that it is wrong to criticize any non-western culture for any reason.

While he does not offer any answers to this question, it is nice to see Kevin Myers at least try to raise these complexities, especially at a time when Barrack Obama is trying to make all these questions seem easy:

I am not innocent in all this. The people of Ireland remained in ignorance of the reality of Africa because of cowardly journalists like me. When I went to Ethiopia just over 20 years ago, I saw many things I never reported -- such as the menacing effect of gangs of young men with Kalashnikovs everywhere, while women did all the work. In the very middle of starvation and death, men spent their time drinking the local hooch in the boonabate shebeens. Alongside the boonabates were shanty-brothels, to which drinkers would casually repair, to briefly relieve themselves in the scarred orifice of some wretched prostitute (whom God preserve and protect). I saw all this and did not report it, nor the anger of the Irish aid workers at the sexual incontinence and fecklessness of Ethiopian men. Why? Because I wanted to write much-acclaimed, tear-jerkingly purple prose about wide-eyed, fly-infested children -- not cold, unpopular and even "racist" accusations about African male culpability.

Am I able to rebut good and honourable people like John O'Shea, who are now warning us that once again, we must feed the starving Ethiopian children? No, of course I'm not. But I am lost in awe at the dreadful options open to us. This is the greatest moral quandary facing the world. We cannot allow the starving children of Ethiopia to die.

Yet the wide-eyed children of 1984-86, who were saved by western medicines and foodstuffs, helped begin the greatest population explosion in human history, which will bring Ethiopia's population to 170 million by 2050. By that time, Nigeria's population will be 340 million, (up from just 19 million in 1930). The same is true over much of Africa.

Thus we are heading towards a demographic holocaust, with a potential premature loss of life far exceeding that of all the wars of the 20th Century. This terrible truth cannot be ignored.

But back in Ireland, there are sanctimonious ginger-groups, which yearn to prevent discussion, and even to imprison those of us who try, however imperfectly, to expose the truth about Africa. And of that saccharine, sickly shower, more tomorrow.

via Maggies Farm.

By the way, does it seem odd to anyone else that we in America get accused of having "unsustainable" lifestyles and we are urged to return to simpler, less technological, less energy-intensive lives like those in Africa?  I would have argued that "sustainable" means to be able to support your own people with their own effort.  By this definition, the US is the most sustainable country in the world.  Our prospective efforts not only sustain us so well that even our poorest 20% live better than the upper middle class in African nations, but we also help sustain the rest of the world.  We create so much wealth that we are able to consistently import more than we export, creating jobs around the world.  And we send more aid to other countries than most of the rest of the world combined.

Posted on July 27, 2008 at 01:06 PM | Permalink | Comments (8)

Pride

I am blogging from my mom's MacIntosh.  Apple has done a lot of good things with its electronics of late, but their absolute refusal to adopt the two button mouse is just absurd.  Sorry, but cntl-click is just not the same. 

By the way, I think the iPod may be one of the best bits of industrial design in decades, but I am not about to join the Apple worship.  Microsoft gets dinged all the time for silly instances of proprietary over-control, but to my mind Apple is often worse.  However, I may not be entirely unbiased in this judgment, as I spent an hour the other day waiting in some zoo of an Apple store line just to buy a new video cable for my iPod Touch, since Apple added a chip in their latest iPods to cause third party cables to no longer function.

Posted on July 27, 2008 at 12:48 PM | Permalink | Comments (13)

Duh

From the Interagency Task Force on Commodity Markets, via Mark Perry:

The Task Force’s preliminary assessment is that current oil prices and the increase in oil prices between January 2003 and June 2008 are largely due to fundamental supply and demand factors. During this same period, activity on the crude oil futures market – as measured by the number of contracts outstanding, trading activity, and the number of traders – has increased significantly. While these increases broadly coincided with the run-up in crude oil prices, the Task Force’s preliminary analysis to date does not support the proposition that speculative activity has systematically driven changes in oil prices.

The world economy has expanded at its fastest pace in decades, and that strong growth has translated into substantial increases in the demand for oil, particularly from emerging market countries. On the supply side, the production of oil has responded sluggishly, compounded by production shortfalls associated with geopolitical unrest in countries with large oil reserves. As it is very difficult to rely on substitutes for oil in the short term, very large price increases have occurred as the market balances supply and demand (see top two charts above).

If a group of market participants has systematically driven prices, detailed daily position data should show that that group’s position changes preceded price changes. The Task Force’s preliminary analysis, based on the evidence available to date, suggests that changes in futures market participation by speculators have not systematically preceded price changes. On the contrary, most speculative traders typically alter their positions following price changes, suggesting that they are responding to new information – just as one would expect in an efficiently operating market.

Congress and other agencies have commissioned studies of this type on oil markets and prices approximately every 90 days or so for the last 35 years, and every one of them have come to the same conclusion:  Oil markets move based on the participant's best guesses about trends in supply and demand.  Duh.  As I wrote previously, the last hydrocarbon price manipulation case I have seen in court was aimed at a group that allegedly manipulated prices for 30 seconds at the end of a trading day whose closing price affected certain contracts.  And it is not clear that they were successful. 

Posted on July 27, 2008 at 12:39 PM | Permalink | Comments (1)

Just Reward

John McCain put his name to the campaign finance bill that, in effect, allows only the media, not other private citizens, unlimited free speech in the run-up to the election.  So I think it is hilarious that the media seems to be lined up against McCain in the next election. 

There is nothing in any law book that says the media has to be unbiased.  In fact, today's notion of an unbiased media is a relatively new concept.  Most newspapers of the 19thy century had a clear political orientation, something that is still the case to some extent in Britain today.  It was absurd to give such a limited group a monopoly on political speech close to an election.  I have opposed this law from day 1, but I do find it funny that McCain himself maybe its first victim. 

Posted on July 25, 2008 at 08:22 AM | Permalink | Comments (14)

I Would LOve to See This Happen

San Francisco has a ballot initiative this November to seize all PG&E transmission lines and assets in the city such that all city power comes from a new government owned utility.  Further, the initiative would require that this new entity get 100% of its power from renewables, particularly wind and solar, by 2040.  It is similar to a 2001 initiative.

All due respect to PG&E's private property, but I would love to see this happen.  If I were governor, I would be seriously tempted to encourage them to proceed, with the only proviso that no one else in California be allowed to sell electricity to San Francisco on the hugely unlikely possibility that there might be a day without sunshine in San Francisco.   (I find it hilarious that San Francisco's solar future is trumpeted in the "fog city journal.")  This might actually be a big enough disaster that even the media would have trouble ignoring its spectacular failure.  It would also do wonders for the Arizona and Nevada economy, as major industries would move our way.

I am sure San Francisco is well on their way to success.  After all, the city just completed its largest ever solar project

            The solar system is expected to generate 370,000 kilowatt hours of electricity annually, enough to power 80 San Francisco homes.

Wow.  It can power 80 whole homes, as long as its not night time or winter (when it is seldom sunny in SF).

Posted on July 24, 2008 at 10:12 PM | Permalink | Comments (15)

Why Its OK If GM Fails

This is a reprise of a much older post, but since I have limited time for blogging, I thought it might be timely to reprise it:

I had a conversation the other day with a person I can best describe as a well-meaning technocrat.  Though I am not sure he would put it this baldly, he tends to support a government by smart people imposing superior solutions on the sub-optimizing masses.  He was lamenting that allowing a company like GM to die is dumb, and that a little bit of intelligent management would save all those GM jobs and assets.  Though we did not discuss specifics, I presume in his model the government would have some role in this new intelligent design (I guess like it had in Amtrak?)

There are lots of sophisticated academic models for the corporation.  I have even studied a few.  Here is my simple one:

A corporation has physical plant (like factories) and workers of various skill levels who have productive potential.  These physical and human assets are overlaid with what we generally shortcut as "management" but which includes not just the actual humans currently managing the company but the organization approach, the culture, the management processes, its systems, the traditions, its contracts, its unions, the intellectual property, etc. etc.  In fact, by calling all this summed together "management", we falsely create the impression that it can easily be changed out, by firing the overpaid bums and getting new smarter guys.  This is not the case - Just ask Ross Perot. You could fire the top 20 guys at GM and replace them all with the consensus all-brilliant team and I still am not sure they could fix it. 

All these management factors, from the managers themselves to process to history to culture could better be called the corporate DNA*.  And DNA is very hard to change.  Walmart may be freaking brilliant at what they do, but demand that they change tomorrow to an upscale retailer marketing fashion products to teenage girls, and I don't think they would ever get there.  Its just too much change in the DNA.  Yeah, you could hire some ex Merry-go-round** executives, but you still have a culture aimed at big box low prices, a logistics system and infrastructure aimed at doing same, absolutely no history or knowledge of fashion, etc. etc.  I would bet you any amount of money I could get to the GAP faster starting from scratch than starting from Walmart.  For example, many folks (like me) greatly prefer Target over Walmart because Target is a slightly nicer, more relaxing place to shop.  And even this small difference may ultimately confound Walmart. Even this very incremental need to add some aesthetics to their experience may overtax their DNA.

Corporate DNA acts as a value multiplier.  The best corporate DNA has a multiplier greater than one, meaning that it increases the value of the people and physical assets in the corporation.  When I was at a company called Emerson Electric (an industrial conglomerate, not the consumer electronics guys) they were famous in the business world for having a corporate DNA that added value to certain types of industrial companies through cost reduction and intelligent investment.  Emerson's management, though, was always aware of the limits of their DNA, and paid careful attention to where their DNA would have a multiplier effect and where it would not.  Every company that has ever grown rapidly has had a DNA that provided a multiplier greater than one... for a while.

But things change.  Sometimes that change is slow, like a creeping climate change, or sometimes it is rapid, like the dinosaur-killing comet.  DNA that was robust no longer matches what the market needs, or some other entity with better DNA comes along and out-competes you. When this happens, when a corporation becomes senescent, when its DNA is out of date, then its multiplier slips below one.  The corporation is killing the value of its assets.  Smart people are made stupid by a bad organization and systems and culture.  In the case of GM, hordes of brilliant engineers teamed with highly-skilled production workers and modern robotic manufacturing plants are turning out cars no one wants, at prices no one wants to pay.

Changing your DNA is tough.  It is sometimes possible, with the right managers and a crisis mentality, to evolve DNA over a period of 20-30 years.  One could argue that GE did this, avoiding becoming an old-industry dinosaur.  GM has had a 30 year window (dating from the mid-seventies oil price rise and influx of imported cars) to make a change, and it has not been enough.  GM's DNA was programmed to make big, ugly (IMO) cars, and that is what it has continued to do.  If its leaders were not able or willing to change its DNA over the last 30 years, no one, no matter how brilliant, is going to do it in the next 2-3.

So what if GM dies?  Letting the GM's of the world die is one of the best possible things we can do for our economy and the wealth of our nation.  Assuming GM's DNA has a less than one multiplier, then releasing GM's assets from GM's control actually increases value. Talented engineers, after some admittedly painful personal dislocation, find jobs designing things people want and value.  Their output has more value, which in the long run helps everyone, including themselves.

The alternative to not letting GM die is, well, Europe (and Japan). A LOT of Europe's productive assets are locked up in a few very large corporations with close ties to the state which are not allowed to fail, which are subsidized, protected from competition, etc.  In conjunction with European laws that limit labor mobility, protecting corporate dinosaurs has locked all of Europe's most productive human and physical assets into organizations with DNA multipliers less than one. 

I don't know if GM will fail (but a lot of other people have opinions) but if it does, I am confident that the end result will be positive for America.

* Those who accuse me of being more influenced by Neal Stephenson's Snow Crash than Harvard Business School may be correct.
** Gratuitous reference aimed at forty-somethings who used to hang out at the mall.  In my town, Merry-go-round was the place teenage girls went if they wanted to dress like, uh, teenage girls.  I am pretty sure the store went bust a while back.

Posted on July 24, 2008 at 09:09 PM | Permalink | Comments (14)

The Fruits of Over-Zealous Prosecution

Radley Balko has a roundup of stories of overdue freedom for the improperly incarcerated.  Its good to see this happening, though I must say I still have some mixed feelings about the Innocence Project after their staggeringly bad judgment of putting Janet Reno, Queen of Abusive Prosecution, on their board.

Posted on July 24, 2008 at 09:04 PM | Permalink | Comments (2)

Just When Yout Thought Air Travel Could Not Get Worse...

US Airways has chosen to try to cover rising fuel prices by unbundling their ticket price and charging for services that were here-to-fore free, or built into the base ticket price.  They now charge $15 for the first piece of checked baggage ($25 for the second), and charge for most in-cabin services, including for soft drinks.

I'm not going to argue with them about this.  Airline pricing is a wickedly complex topic, and folks who know more than I do think this is the best way to get incremental revenue.  Really, these charges don't affect me (I almost never check bags, except when on vacation with my family).  In fact, as I write this, it strikes me that the baggage charge is really a price hike mostly on non-business travelers, which is interesting as it bucks the trend of having increasing price spreads over the years between business/last-minute and tourist pricing.

Anyway, the net effect has been to absolutely jam the security screening station this morning.  Every passenger seems to be carrying every bag he or she can on board to avoid the $15 charge.  What a mess.  I can't wait to see what the boarding process is going to be like.  Glad I don't have any bags today.

By the way, a few weeks ago I shipped a 60 pound trunk to my kids' camp for about $16 via UPS.  If these airline bag charges stick, it might be time for UPS to start soliciting the send-your-luggage-ahead business in earnest.  Next time we go skiing or some such place, I am going to seriously consider sending a couple of duffle bags ahead by UPS.

Update: The luggage bins were completely full before the fourth group out of six were called.  There was a fairly long line down the jetway of people gate-checking their bags.  Apparently, the airline is not set up to charge the $15 when they gate-check the bags, so everyone is hauling all of their bags to the gate and either bringing them on the plane or checking them at the gate for free.

Posted on July 24, 2008 at 08:14 AM | Permalink | Comments (15)

Off To Wyoming

I am headed off to Wyoming and my family's ranch for a while:
100_1126 Dsc_0251

Since data rates go down substantially when the cows are chewing on the phone line (really- the phone line is draped for miles on a fence) I am not sure how much I will blog.

In case I am offline for a while, I would like to offer this serious thought for world improvement.  We don't need more progressive taxes, or larger government, or more wiretapping, or more government control of mortgages, or mandatory service.   All we really need is ... more cowbell.

Posted on July 23, 2008 at 11:45 PM | Permalink | Comments (2)

Scam Alert: Board of Business Compliance

This may not be of much interest to regular readers, but is being posted so future recipients of this letter may find this article when searching in Google. 

I got this in the mail the other day (click to enlarge)
Board_of_business_compliance_scam

It is laid out to mirror the typical format of a state annual report or business license renewal form.  It purports to be from a government-sounding "Board of Business Compliance."  The layout and wording is very similar to the California State required annual report form, as is the $125 fee the letter claims is "now due."  Only in the really fine print near the bottom right does it admit to being a business solicitation. 

Beware.  Despite all their efforts to fool you, filling out this form and filing this $125 fee is not required by any government agency.   I am not sure if you pay money to this group whether you will actually receive any services (I did not pay).  But I will observe that there is absolutely no way that a third party could create a legally meaningful set of minutes for your company based on the information in this form.  Remember, though, that it is important for small corporations to keep their minutes in order -- but I am pretty sure this is not the best way to do it.

Business that must be obtained this way is not worth having, at least in my book. 

Postscript:  One might ask, how can anyone fall for this?  The biggest problem is the government itself.  Doing business in 12 states, 20 counties, and a number of large municipalities, I get literally a hundred "legitimate" forms like this requiring a $50-$150 filing fee from government institutions all the time.  This form, at first, looks more legitimate than say, the application for egg license I get from two states (which are in fact real government requirements). 

PPS:  Don't even get me started on yellow page vendors, directory listing providers, and companies claiming your URL registration is expiring.

UPDATE: Apparently one of the commenters included contact information at the California AG.  The AG's office has written me asking to have comments and concerns about this issue routed to a different address.  I think poor Mr. Wayne was deluged with a bunch of complaints.  Here is what they sent me as their preferred alternative contact information:

 

Complaints may be filed with the California Attorney General's Office by mail, telephone, fax, the Internet, or email:
 
MAILING ADDRESS:
 
Attorney General's Office
California Department of Justice
Attn: Public Inquiry Unit
P.O. Box 944255
Sacramento, CA 94244-2550

TELEPHONE:   1-800-952-5225 (Toll-free in CA) or (916) 322-3360
 
FAX:   (916) 323-5341

WEBSITE:   http://ag.ca.gov/consumers
 
EMAIL:   piu@doj.ca.gov

Posted on July 23, 2008 at 01:59 PM | Permalink | Comments (96)

The Fannie and Freddie Fiasco

Sloppy thinkers often confuse support for free-market capitalism with "doing what big business wants."  In fact, the two are often entirely different, as large well-connected companies often thrive through the very fact of government regulation, using the government to step on competitors and create rent-seeking opportunities, while in turn rewarding politicians out of their profits with electoral support.

The Fannie Mae / Freddie Mac fiasco is turning out to be a prime example of such crony capitalism in operation.  These two quasi-private companies enjoyed many special perks (from huge tax breaks to an implicit government guarantee), enriching both themselves and a circle of Wall Street banks while protecting themselves from criticism by waving the "we're helping the little guy" banner.  Leftish Congressmen ranged from platitude spouting dupes to willing participants in the fraud, and helped enable the whole mess.

Paul Gigot, a long-time critic and whistle-blower of Fannie and Freddie has a great, long editorial on these companies and their Congressional enablers.  If the WSJ article is gated, Volokh has a long excerpt.

Posted on July 23, 2008 at 12:40 AM | Permalink | Comments (4)

Massive Campaign to Bring Back Indentured Servitude

On several occasions I have have lamented the declining standard of activism:

Activist:  A person who believes so strongly that a problem needs to be remedied that she dedicates substantial time to ... getting other people to fix the problem.   It used to be that activists sought voluntary help for their pet problem, and thus retained some semblance of honor.  However, our self-styled elite became frustrated at some point in the past that despite their Ivy League masters degrees in sociology, other people did not seem to respect their ideas nor were they particularly interested in the activist's pet issues.  So activists sought out the double shortcut of spending their time not solving the problem themselves, and not convincing other people to help, but convincing the government it should compel others to fix the supposed problem.  This fascism of good intentions usually consists of government taking money from the populace to throw at the activist's issue, but can also take the form of government-compelled labor and/or government limitations on choice.

It seems that there is a surprisingly large coalition ready to take this to its logical extreme:  A group called Service Nation is set to spend a ton of money lobbying the government to create a program to force every young person into servitude by 2020.

Not satisfied with taking 20-40% of our income to spend as they see fit, the government hopes also to be able to order around the labor of millions of young adults.   I feel like I am reading some bizarre historical re-enactment of the Soviet or Chinese youth programs.  This whole program, which I am tentatively going to label "happy face fascism," makes me so sick I can't even address it further tonight.  More later.

PS:  This is, not coincidentally, exactly the idea Obama has been pushing (here and here).  I say not coincidentally, because this is how one skirts stupid campaign finance laws - you get your supporters to take your top campaign planks and run with them as "independent" efforts that are not subject to campaign finance restrictions.

PPS: Just to head off an argument that came up last time in the comments, I have been a consistent opponent of the military draft as well.

Update:  I know the allusion is over-used, but we are in 1984-land when people keep using the term "voluntary universal national service" as do the leaders of this effort.  By universal, they mean that everyone has to do it.  So they are calling for "national service that everyone is required by law to perform but is voluntary." I do not think that word means what you think it means.

The solution is to develop a system of voluntary universal national service for our country and for the world. To call upon all young adults to take at least one year to learn the hard and rugged skills of practicing idealism.

Yes, lets teach them the "hard and rugged skills" of being forced to do labor that no one is willing to pay for voluntarily, so must be performed by slaves instead.

Another thought:  TJIC made a relevant observation to this the other day:

I’m seeing more and more grudging praise for the efficiency of the Chinese dictatorship these days.

It tends to go something like this:

Sure, sure, they’re horrible, and democracy is better, but if they decide that they need to put in { more mass transit | a factory | a new canal | an Olympic village }, they just tell everyone in the village “move!”, and the job gets done.

I get the same impression.  Service Nation is the end result of such thinking.

Clarification:  Service Nation denies they support mandatory service, and have removed the word "universal" from their site.  However, it should be noted that many of the prominent supporters and board members of Service Nation have individually advocated for mandatory service.  Also, no denial that they are seeking to create a new, massive government beauracracy.

Posted on July 23, 2008 at 12:19 AM | Permalink | Comments (25)

Politicians are freaking Schizophrenic

I remember it was not that long ago that the main issues for many urban politicians vis a vis the poorer parts of their city were

  • to encourage more and free-er mortgage lending
  • to encourage more retail businesses that would, through competition, help eliminate the retail price premium charged in many poorer areas

When I say I remember back to these things, I am not talking about 2 generations ago, for God sakes, I am talking about the 1990's.  Just one presidency ago.

Now, politicians are looking to punish bankers who provided easy mortgages for poorer borrowers, and are seeking to shut down payday loan companies, the last resort for ready cash before once goes to Tony Soprano.  Now, the LA city council wants to ban certain new retail establishments in South LA merely because they are too low cost and easy to use.

Posted on July 22, 2008 at 09:28 PM | Permalink | Comments (3)

More on Wind Capacity

The other day I wrote to beware of rated capacity for wind and solar, because such plants tend to run way below their rated capacity on a 24-hour average.  MaxedOutMamma reads the wind report of the largest utility in Germany, which is as a country is among the largest adopters of wind power.  She finds this interesting bit:

As wind power capacity rises, the lower availability of the wind farms determines the reliability of the system as a whole to an ever increasing extent. Consequently the greater reliability of traditional power stations becomes increasingly eclipsed.

As a result, the relative contribution of wind power to the guaranteed capacity of our supply system up to the year 2020 will fall continuously to around 4% (FIGURE 7). In concrete terms, this means that in 2020, with a forecast wind power capacity of over 48,000MW (Source: dena grid study), 2,000MW of traditional power production can be replaced by these wind farms.

This is an even lower substitution factor than I mentioned previously, and is so because this report looks not just at the percent of time wind is blowing at full speed, but also at the peak load conventional power plants that must be kept running on standby due to the unreliability of wind.  At this 24:1 substitution ratio, folks like Al Gore and Boone Pickens will bankrupt us.  But of course, their investment portfolios, laden with alt-energy investments, will be paying off.


Posted on July 22, 2008 at 09:24 AM | Permalink | Comments (11)

More on Those Tax Cuts For the Rich

As we previewed last week, the IRS came out with its numbers on 2006 taxes, and it turns out that the top 1% richest taxpayers earned 22% of the taxable income and paid 40% of the income taxes.  According to candidate Obama, this represents an unfair free ride for the rich.  These numbers increased from 21% and 37% in the last year of the Clinton administration.

I guess my question is, what's enough?  Already, half the country only pays less than 3% of the income taxes.  Do we really want a country where 50.1% of the people vote to live off the other 49.9%?

Postscript:  Yes, I know payroll taxes work differently and hit lower income folks pretty hard.  But then again, the Social Security program is supposed to be an insurance and retirement plan, not a transfer program. The left goes bananas when you suggest Social Security is welfare and not an honorable paid participation program.  So, like any other insurance, the premiums are flat rather than progressive.  You can't have it both way.

Posted on July 21, 2008 at 09:24 AM | Permalink | Comments (50)

Twisted Into Pretzels

A few weeks ago, Kevin Drum had a post on shale oil development, quoting from a speech by Congressman Ken Salazar.  It is hard to really excerpt the piece well, but my take on their argument against shale oil leasing is:

  • Shale oil technology is unproven
  • The government is leasing the shale oil rights too cheap
  • There is already plenty of shale oil land for development, so new leases won't increase development
  • This is just being done by the Bush Administration to enrich the oil companies
  • The administration is rushing so fast that Congress has not had the chance to put a regulatory regime in place

In many ways, the arguments are surprisingly similar to those against new offshore and Alaskan oil leasing.  Through it all, there is this sort of cognitive dissonance where half the arguments are that the oil won't be developed, and the other half seem to be based on an assumption that a lot of oil will be developed.  For example, how can the leases be "a fire sale" if shale oil technology is unproven and development is not likely to occur?  I would say that if these assumptions were true, then any money the government gets for a worthless lease is found money. 

Similarly, how are oil companies going to enrich themselves by paying for leases if the technology is not going to work and no development is going to occur?  This same bizarre argument became Nancy Pelosi's talking point on offshore oil leasing, by saying that oil companies were somehow already cheating us by not drilling in leases they already have.  Only the most twisted of logic could somehow come to the conclusion that oil companies were enriching themselves by paying for leases were they found no developable oil.

From the standpoint of Democratic Party goals, there is absolutely nothing bad that happens if the government leases land for oil shale or oil drilling and oil companies are unable to develop these leases  (there is some small danger of royalty loss if leases are not developed when they could be economically, but most private royalty agreements are written with sunset periods giving the lease-holder a fixed amount of time to develop the lease or lose it -- I don't know how the government does it).  The net result of "no drilling" or "oil shale technology turns out not to work" is that the government gets money for nothing. 

Here is the problem that smart Democrats like Drum face, and the reason behind this confusing logic:  They have adopted environmental goals, particularly the drastic reduction of CO2 in relatively short time frames, that they KNOW, like they know the sun rises in the east, will require fuel and energy prices substantially higher than they are today.  They know these goals require substantially increased pain and lifestyle dislocation from consumers who are already fed up with fuel-cost-related pain.  This is not because the Democrats are necessarily cruel, but because they are making the [faulty] assumption that the pain and dislocation some day from CO2-driven global warming outweighs the pain from higher priced, scarcer energy.

So, knowing that their policy goal is to have less oil at higher prices, and knowing that the average consumer would castrate them for espousing such a goal, smart Democrats like Drum find themselves twisted into pretzels when they oppose oil development.  They end up opposing oil development projects because in their hearts they want less oil around at higher prices, but (at least until their guy gets elected in November) they justify it with this bizarre logic that they oppose the plan because it would not get us oil fast enough.  The same folks who have criticized capitalism for years for being too short-term focused are now opposing plans that don't have a payoff for a decade or so.

At the end of the day, most Democrats do not want more oil developed, and they know that much higher prices will be necessary to meet their climate goals.  It sure would be refreshing to hear someone just say this. As I wrote at Climate Skeptic, the honest Democrat would say:

Yeah, I know that $4 gas is painful.  But do you know what?  Gas prices are going to have to go a LOT higher for us to achieve the CO2 abatement targets I am proposing, so suck it up.  Just to give you a sense of scale, the Europeans pay nearly twice as much as we do for gas, and even at those levels, they are orders of magnitude short of the CO2 abatement I have committed us to achieve.  Since late 2006, gas prices in this country have doubled, and demand has fallen by perhaps 5%.  That will probably improve over time as people buy new cars and change behaviors, but it may well require gasoline prices north of $20 a gallon before we meet the CO2 goal I have adopted.  So get ready.

Postscript:  By the way, oil companies have been trying to develop shale oil since the 1970s.  Their plans went on hold for several decades, with sustained lower oil prices, but the call by the industry to the government for a clarified regulatory regime has been there for thirty years.  The brief allusion in Salazar's speech to water availability is a valid one.  I saw some studies at Exxon 20+ years ago for their Labarge development that saw water availability as the #1 issue in making shale oil work.

PPS:  I mention above that the pain of fuel prices not only hits the wallet, but hits in term of painful lifestyle changes.  One of the things the media crows about as "good news" is the switch to mass transit from driving by a number of people due to higher oil prices.  This is kind of funny, since I would venture to guess that about zero of those people who actually switched and gave up their car for the bus consider it good news from their own personal life-perspective.  Further, most of the reduction in driving has been the elimination of trips altogether, and not via a switch to mass transit.  Yes, transit trips are up, but on a small base.  95%+ of reduced driving trips are just an elimination of the trip.  Which is another form of lifestyle pain, as presumably there was some good reason to make the trip before.

Update: Updated on Canadian Oil Sands production here.  Funny quote:

Fourth, and potentially most important, the U.S. “green” lobby is pushing legislation that could limit purchases of oil sands products by U.S. government agencies based on its GHG footprint.  It would be well beyond stupid for Congress to prohibit our buying oil from Canada while we increase buying it from countries that threaten our security.  But just because something is stupid certainly does not mean Congress may not do it.

Posted on July 20, 2008 at 01:22 PM | Permalink | Comments (24)

Rated Capacity

One needs to be a careful consumer of information when reading about the "rated capacity" of certain alternative energy plants. 

Take a 1MW nuclear plant, run it for 24 hours, and you get 24 MW-hours, or something fairly close to that, of electricity.

Leave 1MW worth of solar panels out in the sun for 24 hours, you get much less total electricity, depending on where you put it.  On an average day in New York City, you will get about 4 MW-hours.  In one of the best solar sites in the word, my home of Phoenix, you get about 6.5 MW-hours per day.  The key metric is peak sun-hours per day, and some example figures are here.  So, even in the best solar sites in the world, solar panels run at only about 25-30% of capacity.

It turns out, not surprisingly, that the same relationship holds for wind.

It’s not like it’s a secret that wind turbines are an unreliable source of electrical power. Bryce points out that, “In July 2006, for example, wind turbines in California produced power at only about 10 percent of their capacity; in Texas, one of the most promising states for wind energy, the windmills produced electricity at about 17 percent of their rated capacity.”

That means that there has to be nuclear, coal-fired or natural gas power plants functioning fulltime as a backup to the pathetically unreliable and inefficient wind farms. Moreover, what electricity they do generate is lost to some degree in the process of transmitting it over long distances to distribution facilities.

Now, this should not outright dissuade us from these technologies, but since no one has really licked the night-time / not-windy storage proble, it's certainly an issue.   I have looked at solar for my house a number of times, and the numbers just are not there (even with up to 50% government subsidies!) without a 2-5x decrease in panel costs.  Low yields can potentially be tolerated, but capital costs are going to have to be a lot lower before they make a ton of sense.

Posted on July 20, 2008 at 11:35 AM | Permalink | Comments (14)

A Couple of Free SF Short Stories

Tor.com recently went online, and apparently has a new John Scalzi short story from the Old Man's War universe and a new Charles Stross from his very enjoyable "Laundry" series (I have not mentioned the latter series very much, but it is sort of HP Lovecraft meets Men in Black crossed with Office Space.  Really.)

Posted on July 20, 2008 at 11:05 AM | Permalink | Comments (3)

Awesome Rant

Kudos to Kimberly Strassel for going off on a world class rant against their airlines, and their desire to blame their woes on "oil speculators."

I want to say thanks for the July 10 email you sent to all your customers seeking to explain why today's air travel experience is so painful. The letter, signed by 12 of you, explained that "oil speculators" -- presumably by betting on future oil prices -- are killing your industry and thus requested that I, as a consumer, pressure Congress to rein in this "unchecked" market "manipulation."

I admit that just lately I'd begun to feel that flying was something akin to having my intestines fished out with a long hook. Actually, I'd been wondering whom to blame for the fact that it would probably be cheaper, easier and maybe even faster to drive to wherever I want to go than to board one of your planes. Suddenly, all is clear.

I now understand that it is oil speculators who set your hiring policies and who must have outlined the three types of people you may employ: those who grunt at me, those who sigh deeply as if my presence has ruined their day and those who are actively hostile to my smallest request.

She goes off for quite a bit more.  Check it out.  I guess I am glad somebody's futures are going up in value.  My airline travel futures, also known as frequent flier miles, seem to get devalued constantly.

Posted on July 18, 2008 at 05:07 PM | Permalink | Comments (16)

Pandora May Close

What is easily, to my mind, the best and most innovative music service on the Internet may be closing soon, as Pandora can no longer pay the royalty rates demanded by record labels.  This is really too bad.  I am a paying customer of Pandora (it is a free service on the Internet, but I pay $30 or $40 a year to listen to it on my Squeezebox streaming system at home). 

I can say with total confidence that Pandora has caused me to buy more music than any other outside force has caused me to buy since my ill-fated flirtation with Columbia House when I was a teenager.  I have gotten streams going that were so great that I had Amazon open in a second window, and was banging out CD orders almost as fast as Pandora could serve up tunes.  I have thought for years that this would be a natural fit for Amazon or iTunes.  Too bad the record labels can't understand this.

Posted on July 18, 2008 at 02:53 PM | Permalink | Comments (6)

Excel Question

I am almost embarrassed to ask this, with as many hours as I have spent in Excel, but I cannot find a way to export a chart or save a chart in Excel directly to an image format like jpeg.  The way I do it is to take a screen shot and then paste the screen shot into photoshop for cropping and saving.  But this is a kludge.  Any suggestions?

The problem I have is that I like to layer multiple charts on top of each other in photoshop, so I can turn on and off different lines on a graph.  I do this to make semi-animated charts for my climate videos.
Uah

For example, on the chart above, I like to start with a blank chart with the axes in place and then have the data line draw itself across (which you can do with a simple horizontal wipe between jpeg one with the blank chart and jpeg 2 with the same chart but the data line drawn in, IF the charts are scaled exactly the same.   The problem is that to do this right, I have to make sure I have the screen-shot taken at the same level of zoom each time and I crop the picture identically each time.  A real pain.

Posted on July 18, 2008 at 01:52 PM | Permalink | Comments (15)

Wow, I Was Wrong

Here-to-fore, I had generally accepted the meme that where Wal-mart moves in to small towns, smaller stores tend to fail due to the competition.  Unlike most who spread this meme, however, my response has generally been, "so?"  The number of people shoveling coal into steam boilers has decreased with the rise of diesel locomotives.  The number of people employed physically connecting phone calls with patch cords has fallen with the rise of automatic switching.  Technology and distribution systems change and morph over time. 

But I have to admit I appear to have been wrong -- the meme itself may not be true.  Via Mark Perry, who discusses this study in more depth.

Wm

Posted on July 18, 2008 at 12:47 PM | Permalink | Comments (8)

Friday Fun Link

This is pretty dang fun, I have been playing with it for a while.  The link includes a demo video so you can see what it is about.  It is a sort of mechanics simulation, but that makes it sound really boring.  Check it out.

Posted on July 18, 2008 at 11:00 AM | Permalink | Comments (1)

Statists in Libertarian Clothing

Everyone is a libertarian when it comes to his or her own choices:

  • My speech should be legal (though those other guys are over the line)
  • My choices, diet, lifestyle should be legal (though those other guys need to be protected from themselves)
  • My personal interactions are fine (but those other guys are all racists, threats to children, indecent, etc)
  • My business is great (but those other guys are all evil exploiters)

The hard part about defending freedom is not defending it for oneself.  The hard part is defending other people's right to be free.  TJIC makes this point quite well in response to a Boston Globe editorial.

Posted on July 17, 2008 at 10:22 AM | Permalink | Comments (9)

Water and Pricing

I while back, I wrote that I could fix our Arizona water "shortage" in about 5 minutes.  I pointed out that we in Phoenix have some of the cheapest water in the country, and if water is really in short supply, it is nuts to send consumers a pricing signal that says it is plentiful. 

David Zetland (via Lynne Keisling) follows up on the same theme:

The real problem is that the price of water in California, as in most of America, has virtually nothing to do with supply and demand. Although water is distributed by public and private monopolies that could easily charge high prices, municipalities and regulators set prices that are as low as possible. Underpriced water sends the wrong signal to the people using it: It tells them not to worry about how much they use.

Unfortunately, water is one of those political pandering commodities.  Municipal and state authorities like to ingratiate themselves with the public by keeping water prices low.  At the same time, their political power is enhanced if shortages are handled through government rationing rather than market forces, since politicians get to make the rationing decision -- just think of all those constituencies who will pour in campaign donations to try to get special rights to water from the water rationers.

Posted on July 17, 2008 at 10:14 AM | Permalink | Comments (7)

Just Missed Out on that Coveted Darwin Award

From the AZ Republic:

A 27-year-old Avondale man has been arrested on suspicion of causing a massive power outage last summer in Goodyear's Estrella community.

The outage knocked out power to nearly 4,000 homes for 19 hours June 18, 2007, when Goodyear's high reached 115 degrees....

According to police, officers arrested the suspect on a tip from the public. He reportedly told investigators he cut down the pole because he enjoyed the sparks it made.

Posted on July 15, 2008 at 11:55 AM | Permalink | Comments (2)

Stop, Or I Will Start Assembling My Handgun

Unlike many libertarians, I don't blog about gun rights much.  Some think this odd, but in my mind this is like saying it is odd that a female blogger doesn't blog much about abortion.  I have always thought it was pretty clear that the 2nd amendment protects an individual right to bear arms, but it's just not a subject for which I have much passion  *shrug*

However, I did find this hilarious.  Megan McArdle passes on the District of Columbia's petulant response to the Heller decision:

Here's what they're proposing:

* Allowing an exception for handgun ownership for self-defense use inside the home.
   
* If you want to keep a handgun in your home, the MPD will have to perform ballistic testing on it before it can be legally registered.

* There will be a limit to one handgun per person for the first 90 days after the legislation becomes law.

* Firearms in the home must be stored unloaded and disassembled, and secured with either a trigger lock, gun safe, or similar device. The new law will allow an exception for a firearm while it is being used against an intruder in the home.

* Residents who legally register handguns in the District will not be required to have licenses to carry them inside their own homes.

OK, so I can have a handgun in the home solely for self-defense, but this self-defense weapon must be stored unloaded, disassembled, and locked.  The only time it can be unlocked and assembled and loaded is "while it is being used against an intruder".  Jeez.  In the time it would take to unlock, assemble, and load the gun, I could probably build some McGyver device out of dental floss, a TV remote, and a couple of Thin Mint Girls Scout Cookies to just blow them up.

Postscript: I have never been that confident in my ability with a handgun.  TV portrayals notwithstanding, I find them very difficult to handle accurately, and they require a lot of practice which most casual owners don't pursue.  In my case, I find this a more realistic home defense weapon.

Posted on July 15, 2008 at 11:21 AM | Permalink | Comments (33)

Private Schools for Me But Not for Thee

From Andrew Coulson at Cato:

After telling a gathering of the American Federation of Teachers that he opposes school voucher programs over the weekend, Senator Obama added that: “We need to focus on fixing and improving our public schools; not throwing our hands up and walking away from them.”

Senator Obama sends his own two daughters to the private “Lab School” founded by John Dewey in 1896, which charged $20,000 in tuition at the middle school level last year. Though he says “we” should not be “throwing up our hands and walking away” from public schools, he has done precisely that.

That is his right, and, as a wealthy man, it is his prerogative under the current system of American education, which allows only the wealthy to easily choose between private and government schools. But instead of offering to extend that same choice to all families, Senator Obama wants the poor to wait for the public school system to be “fixed.”

Posted on July 14, 2008 at 10:57 AM | Permalink | Comments (23)

Oil at $140 is Still a Modern Miracle

Over the weekend, I was reading an article about T. Boone Pickens' energy plan, a thinly disguised strategy to grab government subsidies for his wind investments.  And I started to think how amazing it is that electricity from wind has to be subsidized to compete with electricity from fossil fuels.  Here's what I mean:

  • To get electricity from wind, one goes to a windy area, and puts up a big pole.  I presume that there are costs either in the land acquisition or in royalty payments to the land holder.  Either way, one then puts a generator on top of the pole, puts a big propeller on the generator, add some electrical widgets to get the right voltage and such, and hook it into the grid. 
     
  • To get electricity from petroleum is a bit more complex.  First, it's not immediately obvious where the oil is.  It's hidden under the ground, and sometimes under a lot of ocean as well.  It takes a lot of technology and investment just to find likely spots where it might exist.  One must then negotiate expensive deals with often insanely unpredictable foreign governments for the right to produce the oil, and deal day to day with annoyances up to and including rebel attacks on one's facilities and outright nationalization once the investments have been made.  Then one must drill, often miles into the ground.  Offshore, huge, staggeringly expensive platforms must be erected -- many of which today can be taller than the worlds largest skyscrapers.  Further, these oil fields, once found, do not pump forever, and wells must be constantly worked over and in some cases have additional recovery modes (such as water flood) added. 

    The oil, once separated from gas and water, is piped and/or shipped hundreds or even thousands of miles to a refinery.  Refineries are enormously complex facilities, each representing billions of dollars of investment.  The oil must be heated up to nearly 1000 degrees and separated into its fractions  (e.g. propane, kerosene, etc.).  Each fraction is then desulpherized, and is often further processed (including cracking and reforming to make better gasoline).  These finished products are in turn shipped hundreds or thousands of miles by pipeline, barge, and truck to various customers and retail outlets.

    To make electricity from the oil, one then needs to build a large power plant, again an investment of hundreds of millions of dollars.  The oil is burned in huge furnaces that boil water, with the steam driving huge turbines that produce electricity.  This electricity must then go through some electrical widgets to get to the right voltage, and then is sent into the grid.

Incredibly, despite all this effort and technology and investment required to generate electricity from fossil fuels, wind generators still need subsidies to compete economically with them.  In a very real sense, the fact that fossil fuels can come to us even at today's prices is a modern day business and technological miracle.

Of course, in the press, the wind guys begging at the government trough are heroes, and the oil companies are villains. 

Posted on July 13, 2008 at 08:48 PM | Permalink | Comments (48)

Peak Pricing for Parking

From my point of view, the NY Times buried the lede in this story about installation of parking sensors on San Francisco streets.  The article focuses mainly on the ability of drivers at some time in the future to get locations of empty parking spots on the streets via smartphone or possibly their GPS.  But I thought the pricing changes they were facilitating were more interesting:

SFpark, part of a nearly two-year $95.5 million program intended to clear the city’s arteries, will also make it possible for the city to adjust parking times and prices. For example, parking times could be lengthened in the evening to allow for longer visits to restaurants.

The city’s planners want to ensure that at any time, on-street parking is no more than 85 percent occupied. This strategy is based on research by Mr. Shoup, who has estimated that drivers searching for curbside parking are responsible for as much of 30 percent of the traffic in central business districts.

In one small Los Angeles business district that he studied over the course of a year, cars cruising for parking created the equivalent of 38 trips around the world, burning 47,000 gallons of gasoline and producing 730 tons of carbon dioxide.

To install the market-priced parking system, San Francisco has used a system devised by Streetline, a small technology company that has adapted a wireless sensor technology known as “smart dust” that was pioneered by researchers at the University of California, Berkeley.

It gives city parking officials up-to-date information on whether parking spots are occupied or vacant. The embedded sensors will also be used to relay congestion information to city planners by monitoring the speed of traffic flowing on city streets. The heart of the system is a wirelessly connected sensor embedded in a 4-inch-by-4-inch piece of plastic glued to the pavement adjacent to each parking space.

The device, called a “bump,” is battery operated and intended to last for five and 10 years without service. From the street the bumps form a mesh of wireless Internet signals that funnel data to parking meters on to a central management office near the San Francisco city hall.

This is actually really cool, but my guess is that politicians will not have the will to charge the level of peak prices the system may demand.

Postscript:  As many of you know, there is a new wave of urban planners who want to impose dense urban living on all of us, whether we like it or not.  I have no problem with folks who want to fight the masses and live in downtown SF or Manhattan, but the world should also have a place for the majority of us who like to have an acre of land and a bit less congestion. 

Anyway, in singing the praises of the urban lifestyle (which often is as much an aesthetic preference vs. suburbia as anything else), you seldom hear much about this type of thing:

Solving the parking mess takes on special significance in San Francisco because two years ago a 19-year-old, Boris Albinder, was stabbed to death during a fight over a parking space....

The study also said that drivers searching for metered parking in just a 15-block area of Columbus Avenue on Manhattan’s Upper West Side drove 366,000 miles[!!] a year.

And here we suburbanites are complaining when we have to park more than 5 spaces from the door of the supermarket.

Posted on July 12, 2008 at 10:54 PM | Permalink | Comments (9)

Update from Hollywood

Unfortunately, despite several appeals, I have not taken any photos around the hotel.  One reader asked if I have seen anyone famous.  The answer is, I don't know.  Let me explain.

Some years ago (maybe 8-10) my wife and I were driving through Malibu on vacation, when we stopped at a little coffee shop for breakfast.  After we were done eating, my wife went to the bathroom while I sat outside on a bench to wait for her.  Sitting there was another husband who was clearly also waiting for his wife to come out.  We chatted for about 5 minutes, with this British gent telling me he had just gotten back from London on business.

Well, my wife came out and I met her at the car.  The first thing she said to me was "Oh my god, you were talking to Pierce Brosnan."  I said "??"  Sure enough, on reflection, it did seem to be he, particularly since my wife also recognized his wife from People magazine.  In my defense, one does not expect to encounter James Bond in a psuedo-Denny's wearing sweats and a week-old beard.  But since then, I have not really trusted by celebrity-identification skills.

Posted on July 12, 2008 at 10:39 PM | Permalink | Comments (9)

OMG

I have lived a lot of places that featured beautiful women who liked to display themselves in public to good effect.  But I have been sitting in the lobby of the Beverly Hills Hotel for about 15 minutes and in that time I have seen the most magnificent display of beautiful women in small dresses I ever expect to see.  Wow.

Posted on July 11, 2008 at 11:19 PM | Permalink | Comments (16)

The Poverty Bomb

Who knew that one small piece of technology could turn a group of wealthy American urbanites into third world refugees.

Posted on July 11, 2008 at 08:54 AM | Permalink | Comments (1)

Oil Prices and State-Run Corporate Incompetence

Over the last year or so, I have been relatively optimistic for a relatively significant drop in oil prices over the next 2-4 years followed by a number of years of price stability at this lower level.  This would be a direct analog to what happened in the 80's after the 1978 oil price spike.

One argument readers have made against this scenario is that a much larger percentage of the world's oil potential is controlled by lumbering state oil companies than was the case in 1978, particularly given the US Congress's continued cooperation with OPEC in keeping US oil reserves off-limits to drilling.  The theory runs that these state run oil companies have a number of problems:

  • they move and react very slowly
  • they don't have the technical competence to develop more difficult  reserves
  • they don't have the political will to divert oil profits from social programs (including oil industry over-employment and patrimony) to capital spending

This latter issue is a big one - even keeping current fields running at a level rate requires constant capital and technological infusions.  I have written about this issue before, and I am sympathetic to this argument.  Here is Jim Kingsdale on this issue:

Events in Iran since the Revolution are an eery echo of what has happened in Venezuela since the advent of Chavez.  Skilled workers and foreign capital and technology have fled.  Corruption has become rampant  along with incompetence.  Production of over 6 mb/d fell to below 3 mb/d after the Revolution and is currently about 3.8 mb/d.  The pre-revolutionary head count of 32,000 employees has grown to 112,000.

Since the Revolution Iran has exported $801.2 billion of oil but nobody knows where that money has gone.  “Certainly none of it was invested in Iranian oil infrastructure which badly needs renovation and repair, upstream and downstream.”  The author claims the Iranian petro-industry is “on the brink of bankruptcy” although such a claim is not documented.

It is clear that Iran, Venezuela, Mexico, Nigeria, and Iraq together represent an enormous percentage of the world’s oil deposits and production that is being mismanaged.  The political and management dysfunctions in all of these countries simultaneously is a major reason for the world’s current energy crisis.  If these countries all operated in a standard capitalist mode, I suspect oil would be below $50 a barrel and the ultimate supply crisis might be five or ten or even fifteen years beyond when we will see it fairly soon.  There seems to be little hope that any of these countries will make a dramatic change in their oil productivity soon.

I am coming around to this argument.  I still think that oil prices are set for a fall, but lower prices may not last long if this analysis is correct.

Update: Of course Maxine Waters would like to add the United States to this list of countries with incompetent government management of oil reserves.

Posted on July 10, 2008 at 09:59 PM | Permalink | Comments (25)

Must Have Been Those Tax Cuts For the Rich

From Mark Perry  (a new favorite of mine)

Tax1

In related news, comes this from the WSJ via Evan Coyne Malloney

New data from the IRS will be out in a few weeks on who pays how much in taxes. My contacts at the Treasury Department tell me that for the first time in decades, and perhaps ever, the richest 1% of tax filers will have paid more than 40% of the income tax burden. The top 50% will account for 97% of all federal income taxes, while the bottom 50% will have paid just 3%.

Here is the same data from 2005:

Tax

This is really a huge threat to the Republic and the minority protections built into the Constitution.  Our government was most explicitly not meant to be a tyranny of the majority, where 51%+ of the people can legally abuse the rest with impunity, but this tax picture sure seems to be stepping over this line.  A particularly worrisome subset of this problem is the increasing legislative predilection for funding  projects with millionaire's taxes, as discussed here and here.  I discussed more about the implications of 52.6% voting for the other 47.4% to support them here.

Posted on July 10, 2008 at 09:41 PM | Permalink | Comments (16)

Regulation and Incumbents

One of the most prevelent misconceptions about the political economy is the assumption that business universally opposes government licensing and regulation.  Often this misconception manifests itself as someone making a statement like, "Even [name of large competitor in the industry to be regulated] supports the proposed regulation so what are you libertarians complaining about."

In fact, regulation tends to protect incumbents at the expense of new entrants or new business models.  Large competitors can pass on the costs of regulation to customers, but new entrants have substantial investments to make just to build the systems and knowledge for compliance.  Perhaps worse, regulation like licensing tends to lock in current business models, by making current business practices part and parcel of becoming licensed.

For these reasons, I am excited by the book In Restraint of Trade by Butler Shaffer:

This extremely important study by Butler Shaffer--professor of law and economist--will change the way you think of the relationship between the state and business. It makes a deep inquiry into the attitudes of business leaders toward competition during the years 1918 through 1938 to see how those attitudes were translated into proposals for controlling competition, through political machinery under the direction of trade associations.

What he finds is a business sector not only hostile to free markets but aggressively in favor of restrictions that would protect their interests. This, he finds, is the very source of the origins and development of the regulatory state.

The author chooses this period because it was a time when the entire relationship between American business and the federal government underwent dramatic upheaval. It was in this time that business forged a consensus about the scope and intensity of competition behavior that they would tolerate. This began to exhibit a disposition favoring collectivist authority over one another via government-backed enforcement agencies.

Free and unrestrained competition required more of them than they were willing to tolerate. It required constant innovation, a fight against falling prices, a continued effort to seek out new markets, and the willingness to subject their bottom line to consumer preferences for lower prices and better products. They saw the vibrancy of free enterprise as a threat to their firms and well being, so they used anti-business sentiment in politics to hamper the market in ways that would benefit them....

If you ever thought that the struggle for free enterprise was about business versus government, this study, which is written in exciting prose and beautiful English, will change the way you understand the essential struggle. The evidence is vast that big business cooperated closely with big government in building the essential architecture of the mixed economy.

Posted on July 10, 2008 at 09:27 PM | Permalink | Comments (6)

Best Line of the Week

I thought this was pretty apt:

The Left’s approach to health-care cost containment is to give more health coverage to more people with more ailments, all the while making everyone pay less.

This kind of thinking should be familiar to the Arizona legislature, since they went into special session to close a $2 billion budget shortfall and ended up actually increasing spending!

Posted on July 9, 2008 at 11:43 PM | Permalink | Comments (4)

When Energy Cutbacks are Frightening

Via TJIC:

Harvard plans to sharply reduce its greenhouse gas emissions in the next eight years, Drew Faust, the university president, said.

The initial, short-term goal for the university will be to reduce greenhouse gas emissions by 30 percent from a 2006 baseline by 2016, Faust said yesterday in a statement.

In the winter of 1990, my Harvard-owned apartment had its heating fail.  I called the administration for weeks before anyone would show up to look at it.  By this time, I actually had ice on the inside of my window panes.  Walking into my freezing apartment, a maintenance guy placed a thermometer in the center of my room, and then just stood there staring at it for 5 minutes.  At this point he had not asked me about my problem, nor looked at anything remotely connected with the heating system.

He suddenly sprung into action, looked at the thermometer, and started to walk out of the room.  "Wait," I said.  "What is wrong?  Do you know how to fix it?"  The Harvard maintenance guy says "Your room is only 53 degrees -- by state law we don't have to do anything unless it is below 50.*"  And then he walked out, with me screaming at his back.  Only when I sent a letter to the University, copied to the fire marshal, explaining that all was well because I found the room stayed pretty warm if I kept the oven on "broil" 24 hours a day and left the oven door open all the time, did I get any action to fix my heating.

It is scary to think that a university so reluctant to spend any money on heating rooms even 20 years go now wants to reduce its energy use by 30%. 

Of course, we all know how these things work:  creative accounting.  The Enron guys were saints compared to the accounting games played in the carbon accounting and offset world.  Harvard will probably say that "Well, we were planning to build a massive coal-powered electricity plant right in the middle of Harvard Yard, and by cancelling the project, we have reduced our emissions 30% over what they would have been and therefore made our goal.  Don't laugh - the UN and EU are doing EXACTLY this every day.

* Note that I cannot remember the exact legal standard quoted to me, but I think it was 50.

Posted on July 9, 2008 at 11:37 PM | Permalink | Comments (10)

Ethanol Updates

Y'all may have already seen these -- being on vacation, I am a little late to the table on both.  The first is a report on the Missouri state ethanol mandate:

A report from a Missouri-based research organization debunks the claim that Missourians are saving money through a state law requiring that retail gasoline contain a minimum of 10% ethanol. The report is in reaction to an assertion by the Missouri Corn Merchandising Association (MCMA), alleging that Missourians will save more than US$ 285 million through the E-10 mandate in 2008, and nearly US$ 2 billion over the following decade.

The MCMA arrived at these numbers by taking the price difference between pure-grade gasoline and E-10 blended fuel, and multiplying it by Missouri's projected annual consumption.

However, the report by the Show Me Institute reveals two fundamental flaws with this calculation. One is that it fails to take into account the fact that E-10 blended fuel is cheaper because ethanol producers receive tax credits and other subsidies.

"Government officials cannot simply take tax dollars from the public, give those tax dollars to ethanol blenders, and then have ethanol supporters tell the public that ethanol is saving them money with cheaper fuel as though the subsidy never existed," write the report's authors, Justin P. Hauke and David Stokes.

The MCMA also does not take into account that E-10 blended fuel is about 2.5% less efficient than pure-grade gasoline, meaning that Missourians will be filling their tanks more often.

When both of these factors are taken into account, the ethanol blending mandates are shown to be costing Missourians about US$ 118 million per year.

The second is a World Bank report on the effect of ethanol mandates on food prices:

Biofuels have forced global food prices up by 75% - far more than previously estimated - according to a confidential World Bank report obtained by the Guardian.

The damning unpublished assessment is based on the most detailed analysis of the crisis so far, carried out by an internationally-respected economist at global financial body.

The figure emphatically contradicts the US government's claims that plant-derived fuels contribute less than 3% to food-price rises. It will add to pressure on governments in Washington and across Europe, which have turned to plant-derived fuels to reduce emissions of greenhouse gases and reduce their dependence on imported oil.

Senior development sources believe the report, completed in April, has not been published to avoid embarrassing President George Bush.

"It would put the World Bank in a political hot-spot with the White House," said one yesterday....

[The report] argues that production of biofuels has distorted food markets in three main ways. First, it has diverted grain away from food for fuel, with over a third of US corn now used to produce ethanol and about half of vegetable oils in the EU going towards the production of biodiesel. Second, farmers have been encouraged to set land aside for biofuel production. Third, it has sparked financial speculation in grains, driving prices up higher.

Other reviews of the food crisis looked at it over a much longer period, or have not linked these three factors, and so arrived at smaller estimates of the impact from biofuels. But the report author, Don Mitchell, is a senior economist at the Bank and has done a detailed, month-by-month analysis of the surge in food prices, which allows much closer examination of the link between biofuels and food supply.

The report points out biofuels derived from sugarcane, which Brazil specializes in, have not had such a dramatic impact.

All this stuff was known long before Congress voted for the most recent ethanol mandates.  Why is it that the media, who cheerled such mandates for years, is able to apply any institutional skepticism only after the mandates have become law?  Are we going to have to actually pass some awful version of carbon trading before anyone will consider its inherent problems?

Posted on July 9, 2008 at 11:24 PM | Permalink | Comments (2)

The World's Safe Haven

We have rising oil prices and falling housing prices.  Mortgages are defaulting and stocks have been falling of late.  The dollar is in the tank.  But at the end of the day, the world still sees the US as the safest and most productive place to invest its money:
Fdi2

Its odd to me that from time to time we go through periods of angst (e.g. the late 1980s panic that the Japanese were "buying up America") about this effect, but we should instead be assured by this vote of confidence from the rest of the world.  One might argue that folks are simply buying US assets today because they are cheap, and certainly the dollar's fall makes US assets relatively less expensive.  But assets are cheap in Russia and Nigeria and Venezuela too, and you don't see the world rushing to invest a few trillion dollars in those locales. 

Postscript:  This foreign ownership of US assets also makes the world a more stable place.  I am always stunned when people argue that Chinese ownership of a trillion dollars of US debt securities gives them power over us.  Huh?  Since when does holding someone's debt give you power?  I don't think Countrywide Mortgage is feeling too powerful today.  The fact is that holding our debt and owning US assets gives China (and other nations) a huge shared interest in our stbility and continued prosperity.

Posted on July 9, 2008 at 11:11 PM | Permalink | Comments (7)

Welcome, But A Bit Unexpected from the 9th Circuit

This is welcome news for those of us who do business on US Forest Service lands, but pretty surprising coming from the 9th Circuit:

Judges aren't professional land managers.

The Ninth Circuit Court of Appeals acknowledged as much July 2, after spending the past few years micromanaging the Forest Service in a series of court decisions that forest industry groups called "increasingly aberrant."

In a landmark ruling July 2, the Ninth acknowledged that it erred in its interpretation of a key environmental law and botched Mineral County's post-burn case.

"We misconstrued what the NFMA (National Forest Management Act) requires of the Forest Service," a panel of 11 judges admitted in a ruling released July 2. "We made three key errors in [the post-burn case]...Today, we correct those errors."

The ruling in "Lands Council v. McNair," involving an Idaho project, overturned a 2-1 decision from 2005 in "Ecology Center v. Austin." McNair and Austin are the forest supervisors for the Idaho Panhandle and Lolo national forests, respectively.

The dramatic ruling concluded by suggesting that the Ninth should weigh other public interests in the future, not just claims of potential environmental damage.

"Though preserving environmental resources is certainly in the public’s interest, the [Idaho Panhandle] Project benefits the public’s interest in a variety of other ways," the ruling stated. "According to the Forest Service, the Project will decrease the risk of catastrophic fire, insect infestation, and disease, and further the public’s interest in aiding the struggling local economy and preventing job loss."

The US Forest Service's mission is a mixed bag, requiring it to balance mining, timber harvesting, recreation, and environmental preservation on its lands.  Such a mixed mission is virtually doomed to failure in today's political climate.  This virtually impossible balancing act has been made more difficult with the recent explosion of lawsuits from environmental groups all attempting to narrow the USFS mission to preservation alone, to the exclusion of other missions.  The 9th Circuit has to date been a leading facilitator of this process of placing preservation ahead of all other goals, in direct contradiction of the will of Congress in any number of pieces of legislation.

Posted on July 9, 2008 at 10:53 AM | Permalink | Comments (3)

Thumbs Up For Scalzi's New Zoe's Tale

Several weeks ago, when he was going away to camp, I tried to come up with a gift to send along with my 14-year-old son.  Because he is a big John Scalzi fan, I bought him a semi-bootleg pre-production copy of Scalzi's upcoming novel Zoe's Tale off eBay.  I feel kind of bad about abusing Mr. Scalzi in this way, but feel a little better when I consider what our household somehow seems to own at least two copies of every book he has published.

Anyway, I just snagged the book back from my son and he said it was great.  As all you parents know, 14-year-old boys can be oh-so nuanced and deep in their communications with their parents, so I did not get a lot of detail  (oddly enough, having read a few chapters, the communication and decision-making abilities of teenage boys seems to be a minor theme in the book).  The best metric of his fondness for the book was that he told me to make sure to read the acknowledgments at the end.  It must be some kind of sign of engagement when a teenage boy reads the acknowledgments.

I am several chapters in and really like what I have seen so far.  Always nice to see a strong teenage girl protagonist, and Scalzi is as funny as ever.  Apparently it is available in mid-August.

By the way, later this year I believe an early novel of Scalzi's called Agent to the Stars is coming back into publication.  I loved this book, and you can check it out early as Scalzi has it available free online.  (update:  Here it is on Amazon, with an Oct 28 release date).

Posted on July 8, 2008 at 06:38 PM | Permalink | Comments (2)

Wealth and the Environment

I have often argued that environmental cleanliness and wealth tend to follow a U-shaped curve.  Early industrialization tends to make air and water quality worse, but increases in wealth and technology over time tend to lead to an improved environment.  For example, nearly every air and water quality metric in the US has improved substantially over the last 40 years. 

To this end, I saw this chart in another context (Dr. Pielke was discussing the effect of land-use on regional climate changes) but I thought it was an interesting one to illustrate this point, and perhaps start to convince all those 20-somethings of the Obama generation that the world is not, in fact, spiraling ever downwards into economic decay.  This is a map of leaf area, bascially an index of forestation, for the Eastern US over the last 400 years.  Note the trend reversal since 1920.

Fig8lai

I have argued for a while that trying to slam a halt to China's development as part of some misguided environmental effort may in fact achieve the opposite effect, locking China into the low-point of the U-shaped curve just at the point when increasing wealth may be pushing them to start cleaning up.

Posted on July 8, 2008 at 06:06 PM | Permalink | Comments (8)

I Suggest Adding a Category Called "Milch Cow"

After reading this Economist article about the people section of Obama's site, I thought I would check it out myself.  Here is the complete list of the categories that Obama sees out there in America:

  • Asian Americans & Pacific Islanders
  • African Americans
  • Americans Abroad
  • Americans with Disabilities
  • Environmentalists
  • First Americans
  • Generation Obama
  • Kids
  • Latinos
  • Labor
  • LGBT
  • People of Faith
  • Students
  • Veterans
  • Women

This is a different count than the Economist found, so I don't now if something has changed due to the article.  Anyway, I officially have no place in Obama's world as a white male physically able straight business owner of limited faith.  From analysis of his other policies, I suggest a category for me called "Milch Cow," to include productive non-whining folks like myself who are unable or unwilling to portray themselves as victims and who are most likely to be forced to pay for Obama's pandering of all the other groups.

Posted on July 8, 2008 at 05:48 PM | Permalink | Comments (8)

Danger. Danger. Danger.

If I had to name the one single biggest problem in US healthcare, it would be this:

"Twenty years ago, when I was in training, nobody really dealt with economics," says Stephen Hufford, an oncologist in San Francisco. The prevailing thinking, he says, was: "Cost should never be an issue in someone's care."

In a survey of 167 cancer doctors reported last year in the Journal of Clinical Oncology, 42% said they regularly raised the issue of costs when discussing treatment options with patients.

Which means that even today, 58% of oncologists did not raise cost or price issues with various treatment options, despite practicing in perhaps the most costly of medical fields.  What planet are we living on, here?  Can you imagine a survey in which 58% of car dealers refused to raise the issue of cost in a new car sale?   Or 58% of real estate brokers saying they never mentioned the prices of houses when discussing them with clients? 

This represents a process failure in the health care system on two levels.  First, not having any single person in the decision-making process making cost-benefit trade-offs is a recipe for disaster.   Insured customers will consume as much as they can when price is off the table.  Many folks in the health care debate recognize this.

But there is a second problem.  Even when there is a single entity making these trade-offs, it is almost never the patient.  Most "reformers" on both the left and the right want to place this decision-making authority in government bureaucrats, in insurance companies, in Congress, in doctors -- any place but in the individual patient herself.   This particular article discusses the role of doctors in this process:

Many health-policy experts say it's high time for American doctors to start considering costs when assessing treatment options. In 2007, the cost of cancer care alone reached an estimated $89 billion in the U.S., up from $72 billion in 2004, according to the American Cancer Society using data from the National Institutes of Health....

The study, conducted by Deborah Schrag, an oncologist at the Dana Farber Cancer Institute in Boston, found that 23% of oncologists said costs influence their treatment decisions, and 16% said they omit discussion of very expensive treatments when they know the cost will place great strain on patients' resources.

This misses the mark.  Doctors should be ready to inform patients of their options, but at the end of the day we need a system where the patient is making these tradeoffs.  Note the absolute, nearly criminal arrogance of doctors who don't suggest the best treatment regime because the cost might stress out the patients.  How does the doctor know what financial resources the person might be able to bring to bear?

Postscript:  In an adjoining article, the WSJ has an article on the wacky way the French government makes these cost-benefit trade offs in health care:

Since 1860, when Napoleon III appropriated this ancient Roman spa at the foot of the Alps for his empire, the National Baths of Aix-les-Bains have been a symbol of France's cushy health-care system.

On a recent morning, Jacqueline Surmont and her husband, Guy, a 77-year-old retired construction worker, headed for their daily mud wrap. The spa's rheumatism cures, thermal baths and 13-minute deep-tissue massage all are covered by France's national health-insurance system. Transportation and lodging are, too....

"For many people, it's like a free holiday," says Ms. Surmont, who says all her mud wraps and massages were properly prescribed by a doctor to soothe her ailing back. "Some patients go shopping in the afternoon. They're hardly in pain."

Wonderful.  This kind of BS is virtually inevitable in state-run systems.  I think one can already imagine a US health care system where taxpayers foot the fill for groovy treatments loved by the dippy left, from acupuncture to aromatherapy to homeopathy, while cancer patients are denied drugs and people have to wait months or years for elective surgery.

By the way, we get this in the "goes without saying" file from a state-run spa employee facing cutbacks:

"Of course we went on strike," said Martine Claret, a 52-year-old physiotherapist who has worked at the spa since 1979 and doubles as a union representative.

Posted on July 8, 2008 at 05:33 PM | Permalink | Comments (6)

A Statistic I Hadn't Seen Before

Christian Boda, via Q&O, discusses inflation rates in the context of income (in)equality issues.  He offers this bit of information:

Inflation differentials between the rich and poor dramatically change our view of the evolution of inequality in America. Inflation of the richest 10 percent of American households has been 6 percentage points higher than that of the poorest 10 percent over the period 1994 – 2005. This means that real inequality in America, if you measure it correctly, has been roughly unchanged.

This actually makes a ton of sense - Walmart helps hold down food and clothing costs for average folks while the rich pay ever increasing rates to stay at the Ritz at Laguna Niguel.  He argues that as a result, globalization and the growth of low-cost manufacturing in China tends to help rather than hurt the poor.

It also helps to answer a question I had yesterday -- why do metrics of median wage growth adjusted for inflation tend to look unexciting, while at the same time other metrics show the poor doing so much better materially.  This notion of a graduated inflation rate by income class would go a long way to explaining these paradoxes.  In short, we may be applying the wrong inflation rate to metrics of wage growth of various income groups in assessing their well-being (not to mention the usual failing of missing individual migration between income groups).

Posted on July 7, 2008 at 08:46 AM | Permalink | Comments (8)

Keeping Some Perspective

If past presidential elections are any guide, by the time this one is over, it will have been said that this economy is the worst economy since the Great Depression.  W. Michael Cox and Richard Alm of the Dallas Fed write a fabulous article in the American putting current US economic conditions in historic context:

When a presidential election year collides with iffy economic times, the public’s view of the U.S. economy turns gloomy. Perspective shrinks in favor of short-term assessments that focus on such unpleasant realities as falling job counts, sluggish GDP growth, uncertain incomes, rising oil and food prices, subprime mortgage woes, and wobbly financial markets.

Taken together, it’s enough to shake our faith in American progress. The best path to reviving that faith lies in gaining some perspective— getting out of the short-term rut, casting off the blinders that focus us on what will turn out to be mere footnotes in a longer-term march of progress. Once we do that, we see the U.S. economy, a $14 trillion behemoth, is doing quite well, thank you very much.

I can't really excerpt the article and do it justice, but suffice it to say that you won't see much of this in any Obama speeches this year.  Here are two charts from the article I particularly liked:

Fig_7_less_work_more_leisurefinal

Of course, the rejoinder will be, but what about the poor?  Well...


Figure_2_now_even_the_poor_have_mor

Go read it all in advance of the campaign season.

Posted on July 6, 2008 at 08:38 AM | Permalink | Comments (6)

So Rich People Don't Count?

I generally like the work that Factcheck.org does, and am perfectly willing to believe that McCain's claim that Obama has voted "for higher taxes" 94 times is exaggerated.  However, some of their rationale leaves me flat:

Twenty-three [votes] were for measures that would have produced no tax increase at all; they were against proposed tax cuts.

Uh, OK.  It strikes me that voting against 23 tax cuts is voting for higher taxes 23 times.  I know that politicians work very hard to establish a sort of taxation Stare Decisis, wherein once a tax is in place it can never be questioned, but many of us think that tax cuts are fair game.  But then Newsweek, in reporting this story, goes on to repeat this claim over and over, as if that makes it correct:

By our count, about a quarter of these votes for "higher taxes" – 23 to be exact – are votes Obama cast against changing tax rates from what they were at the time. Taxes would not have gone up. They would have been "higher" only compared to the cuts being proposed.

Sorry, but this does not sound like independent fact-checking.  This sounds like political spin and hackery by folks in Obama's camp.  Voting against a tax cut is a vote for higher taxes.

Eleven votes the GOP is counting would have increased taxes on those making more than $1 million a year – in order to fund programs such as Head Start and school nutrition programs, or veterans' health care.

The implication here, I guess, is that the rich people don't count as people, and that raising taxes only on the rich does not count as a tax increase?  We see this same bias that rich people don't count in their summary:

It's true that most of the votes the GOP counts would either have increased taxes for some, or set budget targets calling for such increases. But by repeating their inflated 94-vote figure, McCain and the GOP falsely imply that Obama has pushed indiscriminately to raise taxes for nearly everybody. A closer look reveals that he's voted consistently to restore higher tax rates on upper-income taxpayers but not on middle- or low-income workers.

The other interesting pice of the previous quote is that tax increases don't count if they fund programs such as Head Start that the author of the study, presumably, supports.  The article goes on to say:

And in many cases, the legislation in question called for increasing taxes in order to fund popular programs, a fact not mentioned by the Republican opposition researchers. One such amendment by Sen. Christopher Dodd to a 2006 bill, for example, proposed the creation of a "veterans hospital improvement fund," financed by increasing the capital gains and dividend tax rates on those earning $1 million a year or more.

You get it?  Its not a tax if it is on the rich or funds a liberal program.  By the way, I find this increasing reliance on taxes on people making $1 million or more an enormous threat to the very basis of our demacracy.  It is always a danger in democracy to have 51% of the people vote themselves benefits at the expense of the other 49%.  But this becomes increasingly seductive as the numbers skew, until every politician is crafting programs that take from the top 1% and give to politically influential portions of the other 99%.  Here is a great example of that in California, with a program the majority of voters were not willing to pay for, but accepted when it was funded by a millionaire's surcharge:

Already, we see many states funding new programs with surcharges on the rich.  Here is but one example:

California voters agreed to tax the rich to support public mental health services. 

More than half of them (53.3 percent) voted last month in favor of Proposition 63, which will impose a tax surcharge of 1 percent on the taxable personal income above $1 million to pay for services offered through the state's existing mental health system. The initiative will generate an estimated $700 million a year....

Richard A. Shadoan, M.D., a past president of the CPA, wrote in Viewpoints in the September 3 issue of Psychiatric News, "The scope of the program and its tax-the-rich source will provoke a debate. But it's an argument worth having to make California face the neglect of not providing treatment to more than 1 million people with mental illness."

So what happened?  I don't know how many people make a million dollars in California, but it is certainly less than 5% of the population.  So the headline should read "53.3% of people voted to have less than 5% of the people pay for an expensive new program."  If the 53.3% thought it was so valuable, why didn't they pay for it?  Well, it is clear from the article that the populace in general has been asked to do so in the past and refused.  So only when offered the chance to approve the program if a small minority paid for it did they finally agree.  This is the real reason for progressive taxation.  (by the way, these 53.3% will now feel really good about themselves, despite the fact they will contribute nothing, and will likely piss on millionaires next chance they get, despite the fact that they are the ones who will pay for the program).

That example reminded me in turn of this story from history, one of what I call "great moments in progressive taxation,"  and the ultimate logical end of this desire to have fewer and fewer rich people fund services for everyone:

My story today comes from the Roman Empire just after the death of Julius Caesar.   At the time, three groups vied for power:  Octavian (Augustus) Caesar, Mark Antony, and republican senators under Brutus and Cassius.   Long story short, Octavian and Antony join forces, and try to raise an army to fight the republicans, who have fled Italy. They needed money, but worried that a general tax would turn shaky public opinion in Rome against them.  So they settled on the ultimate progressive tax:  They named about 2500 rich men and ordered them killed, with their estates confiscated by the state. 

This approach of "proscriptions" had been used before (e.g. Sulla) but never quite as obviously just for the money.  In the case of Octavian and Antony, though nominally sold to the public as a way to eliminate enemies of Rome, the purpose was very clearly to raise money.  All of their really dangerous foes had left Rome with the Republicans.  The proscriptions targeted men of wealth, some of whom had been irritants to Octavian or Antony in the past (e.g. Cicero) but many of whom had nothing to do with anything.  Proscribed men were quoted as saying "I have been killed by my estates."

I wonder how many of today's progressives would be secretly pleased by this approach?

Postscript:  I can't tell if this Newsweek article represents some sort of strategic alliance or deal with Newsweek, or just a one-off.  If it is some kind of alliance, I think we can write off any notion that Factcheck.org is still non-partisan.  I predict if this is the case we will see more pro-Obama spin out of Factcheck, or as a minimum, a cherry-picking by Newsweek of which checked facts it wants to publish and which it does not.

Posted on July 3, 2008 at 08:43 PM | Permalink | Comments (8)

Who Knew We Libertarians Were Such Calm, Quiet People

Neil Boortz (via Maggies Farm) did a Yahoo news search on a variety of terms, counting results for various terms, with this result:

Democrats Outraged

45,600 hits
Muslims Outraged 35,600 hits
Republicans Outraged 13,800 hits
Catholics Outraged 11,500 hits
Christians Outraged 2,990 hits
Jews Outraged 2,060 hits
Libertarians Outraged 57 hits
Buddhists Outraged 24 hits

He seems to have an agenda at the top of the list, but what about us libertarians at the bottom?  I know we are outraged, so I supposed we need a better PR agent.  I mean, no outrage here.

Posted on July 3, 2008 at 01:53 PM | Permalink | Comments (11)

$100 Million a Mile

I don't really understand the various issues in this article on the next phase of Phoenix light rail expansion, but this certainly caught my eye:

It will add another $9 million to the $297 million project. But by acting quickly to make these changes, there aren't expected to be delays in rail construction. Work is scheduled to start in early 2009 and be completed by 2012.

Opposition to the rail plan arose last fall in the last half mile of the 3.2-mile light rail line that extends from just south of Bethany Home Road to Dunlap Ave.

Let's see -- $306 million divided by 3.2 miles is very close to $100 million a mile, and that is even before the inevitable cost overruns cut in (as a rule of thumb, I tend to double estimates of light rail construction costs to estimate the actual final total, and even then I am often low).   It also does not include inevitable operating losses.

Nearly a third of a billion dollars to run a rail line a distance most people could walk in 45 minutes.  For three freaking miles.  As a comparison, three buses could provide service on this same route running at 5 minute intervals for perhaps 1% of this capital cost and a substantially lower operating cost.  And better service, since the frequency would be 3 times higher.  Absolutely absurd. 

More on Phoenix light rail here, and more on light rail in general here.

Postscript: Some of you may be familiar with my light rail bet.  I often bet that a light rail line will cost more to build than it would have cost to buy every  regular daily rider a Prius, and more to operate in a year than it would require to gas up all of these Prius's for a year.  For reference, with a $22,500 cost for a Prius and $306 million (and counting) capital cost, that is enough to buy 13,600 Prius's.  Anyone want to bet that the number of incremental users attracted to the line by this 3 mile extension don't exceed 13,600?

Update:  TJIC does the math -- $1500 per inch!  Fixed link, thanks to commenters.

Posted on July 3, 2008 at 10:18 AM | Permalink | Comments (9)

For His Own Good

The government claims that it is important to crack down on gambling because people who gamble might do themselves financial harm.  Of course, just like the teenager who is thrown in jail because it is better for him than smoking marijuana, so goes the case of Salvatore Culosi:

… Salvatore Culosi … was a 37-year old optometrist in the Washington, D.C. suburb of Fairfax, Virginia. According to friends, Culosi was a wealthy, self-made man. He was easygoing and friendly, a guy who enjoyed his success.

He was also a small-time gambler. Culosi and his friends regularly met at bars in the area to watch sports, and frequently wagered on the outcomes of games. The wagers weren’t insignificant — $50, $100, sometimes more on a given afternoon. But the small circle of friends also had the means to back up their wagers. No one was betting the mortgage, here…

Fairfax police detective David J. Baucom met Culosi in a bar one evening last October, befriended him, and was soon making wagers himself… Baucom began upping the ante, encouraging Culosi to wager larger sums than what the friends were used to…

Baucom eventually encouraged Culosi to wager at least $2,000 in a single day, the lower threshold under which Culosi could be charged under state law with “conducting an illegal gambling operation.” On January 24 of this year, Detective Baucom assembled the Fairfax County SWAT team, and marched off to Culosi’s home to arrest him.

According to press accounts, police affidavits, and the resulting investigation by the Fairfax prosecutor’s office, Baucom called Culosi that evening, and told him he’d be by to collect his winnings. With the SWAT team at the ready just behind him, Baucom waited outside Culosi’s home in an SUV. As Culosi emerged from the doorway, clad only in a t-shirt and jeans, SWAT officer Deval Bullock’s finger apparently slipped to the trigger of his Heckler & Koch MP5 semiautomatic weapon, already aimed at the unarmed Culosi.

The gun fired, releasing a bullet that entered Culosi’s side, then ripped through his chest and struck his heart, killing him instantly.

Posted on July 3, 2008 at 09:49 AM | Permalink | Comments (19)

Trough Leader

Holman Jenkins argues that despite the fact that GM's all-electric car the Volt will likely lose money on every sale, GM knows exactly what it is doing with this program.  The main customer, apparently, is not the end consumer, but the government.  GM is betting that an Obama, beholden in his new presidency to unions and environmentalists, will be open to a massive government subsidy of the US auto industry.  The Volt program may be part of a plan to buff up GM's attractiveness at the government trough:

GM executives are not nuts. They justify the costs and risks of the Volt as a way of changing GM's image in the minds of consumers and politicians. To commit a pun, the Volt is GM's vehicle for making a bailout of GM politically acceptable.

The company has already started signaling it expects Washington to provide a whopping $7,000 tax credit to Volt purchasers. In Europe and the U.S., under whatever fuel economy and emissions regulations prevail, GM also expects special favoritism for the Volt. The goal is to re-enact the flex-fuel hoax, in which GM receives extra credit for making cars that can burn 85% ethanol, even if they never see a drop of such fuel.

CEO Rick Wagoner last week laid out the case to Barack Obama personally for turning GM into a ward of the state, by way of direct and indirect subsidies to support a transition to "alternative" fuel vehicles. GM has done yeoman's work getting its structural costs (i.e., labor) in line, but shareholders should note that a big part of the company's turnaround gamble consists also of eliciting favor once again from Washington after a period in which the domestic auto makers were nothing but whipping boys on Capitol Hill.

Posted on July 3, 2008 at 09:17 AM | Permalink | Comments (5)

Having Your Trees and Eating Them Too

What I already knew, before today:  When the timber industry was booming, local governments made out well as Federal law gave them a cut of USFS and BLM timber sales dollars in their county.

What I already knew, before today:  Under environmental pressure, serious logging has virtually ended in the National Forest, particularly in northwestern states like Oregon. 

What I learned today:  For the last 15 years, despite the fact there have been no timber sales, the Feds are still paying local government as if there still were timber sales.  The payments last year were $238 million a year to Oregon counties alone.

And for some reason that nobody seems to be able to understand, the local economies have not adjusted structurally to the new economic reality.  I wonder why?

Of the county's general fund, a full 67 percent -- about $12 million -- had come from the federal timber payments.

Finally, it looks like Congress may cut them off.  Good.  Because the only thing worse than killing an industry for suspect environmental reasons is continuing to pay that industry for not producing anything.

Posted on July 2, 2008 at 03:49 PM | Permalink | Comments (3)

Firfox Hacks

I, for one, welcome our new robot overlords   (link only works in Firefox 3)

Other hacks

Posted on July 2, 2008 at 03:33 PM | Permalink | Comments (7)

Why That Separation of Powers Thingie Makes Some Sense

The NY Times reports, via Hit and Run, that judicial review of Gitmo detainees, which the Administration has steadfastly resisted, may be quite justified:

In the first case to review the government’s secret evidence for holding a detainee at Guantánamo Bay, Cuba, a federal appeals court found that accusations against a Muslim from western China held for more than six years were based on bare and unverifiable claims. The unclassified parts of the decision were released on Monday.

With some derision for the Bush administration’s arguments, a three-judge panel said the government contended that its accusations against the detainee should be accepted as true because they had been repeated in at least three secret documents.

The court compared that to the absurd declaration of a character in the Lewis Carroll poem "The Hunting of the Snark": "I have said it thrice: What I tell you three times is true."

"This comes perilously close to suggesting that whatever the government says must be treated as true," said the panel of the Court of Appeals for the District of Columbia Circuit.

The unanimous panel overturned as invalid a Pentagon determination that the detainee, Huzaifa Parhat, a member of the ethnic Uighur Muslim minority in western China, was properly held as an enemy combatant.

The panel included one of the court’s most conservative members, the chief judge, David B. Sentelle....

Pentagon officials have claimed that the Uighurs at Guantánamo were “affiliated” with a Uighur resistance group, the East Turkestan Islamic Movement, and that it, in turn, was “associated” with Al Qaeda and the Taliban.

Next up, the detainee whose mother's gynecologist's dog's veterinarian's great uncle once was friends with a Muslim guy.

The Administration now complains that there is nowhere that this man can be sent back to, and somehow this is supposed to validate his detainment?  He wouldn't have had to be sent back anywhere if he hadn't been snatched up in the first place.  I am willing to believe that this guy may be a bad buy, but we let lots of people we are pretty sure are bad guys walk the street, because for good and valid reasons we rank false detainment of the innocent as a greater harm than non-detainment of the guilty.  Anyone seen OJ lately?

Posted on July 2, 2008 at 09:12 AM | Permalink | Comments (12)

This is Just So Short-Sighted

OK, here is the story to date:  Paradise Valley is a small, very wealthy town within the boundaries of Phoenix.  There is no commercial development allowed in the town except for a series of golf resorts, of which there are a number.  The town had one last large tract of unbuilt land, owned by the Wrigley heirs, I believe, that has for years been zoned for a resort.  There was an auction several years ago in which the land was sold for some figure north of $70 million to a group who wants to build a Ritz-Carlton resort, a hotel chain notorious for bringing riff-raff into communities ;=).  The Ritz group unanimously obtained all the town council and planning board approvals it needed to build.

Except now a ballot initiative will be voted on by the town residents in November as to whether to allow them to build a resort on their own land that is zoned for a resort (my previous report, complete with Zillow maps).  This action is consistent with the absolute resistence that every resident's attempt to do a major remodel of their house encounters from various community groups and zoning bodies.

One lesson, of course, is that local participative democracy can be just as much a threat to individual rights as the worst dictatorship  (though this is not a new lesson -- it was in fact learned in Athens when it was first tried).  But a second lesson is just how short-sighted this is.  I am sure residents convince themselves in each such individual effort that they are somehow protecting their property values.  But in sum, the effect of multiple such efforts is to make people reluctant to invest in property in the town, fearful that some citizens group or zoning body will take control of what they can do with their land. 

I live about 4 houses away from the Town of Paradise Valley in the city of Phoenix, though most of my neighbors and even the US Postal Service think I live in PV.  It used to be, about 10 years ago when I moved in, that living outside the PV boundary was considered a negative.  There was a big enormous value gradient between the nearest PV home and mine, based as much on snob appeal of the address as anything else.  Now, however, the gradient is reversing (hurray for my home equity!)  Real estate agents in my neighborhood who used to hide the fact that the homes are not actually in tony PV (shame on them) now use it as a selling point.  My remodel contractor breathed an enormous sigh of relief when he found out that I was, in fact, not in the town of PV.

Help me out, readers.  I seem to remember there was a name for an economic game where the profit maximizing strategy when playing once was different than if one were playing multiple times in sequence.

PS - If you are confused why a town would consider a Ritz to be bringing down the neighborhood, see here, complete with Zillow maps where not a single surrounding home is going for less than $1.8 million. 

Posted on July 1, 2008 at 05:33 PM | Permalink | Comments (12)

Spitzer's Legacy

I guess it turns out that compensation deals between sophisticated, consenting adults at private firms are not actually subject to approval by the NY attorney general, no matter how much he grandstands:

A state appeals court on Tuesday dealt a devastating blow to the New York attorney general's efforts to force ex-New York Stock Exchange Chairman Richard Grasso to return a portion of his $187.5 million compensation package.

New York Attorney General Andrew Cuomo's spokesman issued a statement saying he is not pursuing an appeal in the case. The Grasso case is "over" … "for all intents and purposes," the spokesman said.

In a 3-1 decision, the New York Supreme Court's Appellate Division dismissed the two remaining causes of actions against Mr. Grasso and one against former NYSE director Ken Langone

I wrote much more about this fiasco long ago...

Update:  The AG argues that their real concern was about pay practice in non-profits.  OK, I am sure there are any number of NGOs and museum presidents where there might be real issues with the sophistication of board members.  Go after those folks, then, but there was never, ever any evidence that somehow Dick Grasso pulled the wool over the eyes of financial neophytes on the NYSE Board, babes in the woods such as the CEOs of JP Morgan Chase and Goldman Sachs.  Unfortunately, all these other non-profits tend to be run by folks who are the backbone of the NY Democratic Party.  Even in the Grasso suit, Spitzer had to work a bit to avoid naming prominent Democrats as targets.  For example, there is a lot of evidence that the person most responsible on the NYSE baord for the structure of Dick Grasso's compensation contract was NYSE board member and former NY State Comptroller Carl McCall, but since he is a powerful Democrat, Spitzer did some slick judo to avoid including him in the suit, which still including other NYSE board members.

Posted on July 1, 2008 at 03:37 PM | Permalink | Comments (1)

Oh My God! 40% of Sick Days Taken on Monday or Friday!

I thought this was kind of funny, from the false hysteria department.  The Arizona Republic begins ominously:

If you're already mad about gas prices, prepare to get madder.  Besides paying prices at the pump that were unthinkable a few months ago, many consumers also are getting ripped off by the pump itself.

Uh, Oh.  I can see it coming.  The AZ Republic has smoked out more evil doings from the oil industry.  I shudder to think what horrors await.

About 9 percent, or about 2,000, of the 20,400 gas pumps inspected this fiscal year by the Arizona Department of Weights and Measures since July 1, 2007, failed to pass muster.

Oh my freaking God!  Every fill up, I have a one in 11 chance of my gas being measured wrong.  I just bet those oil companies are coming out in the night to tweak the pump so I get hosed. 

Half of those were malfunctioning to the detriment of customers.

See!  There you go!  Half are to the detriment of customers! 

Oh.  Wait a minute.  Doesn't that mean the other half are to the benefit of customers?  Why would those oil guys be doing that?  This sure isn't a bunch of very smart conspirators.  Could it be that this is just the result of random drift in a measurement device, with the direction of drift equally distributed between "reads high" and "reads low"?

As it turns out, I worked for a very large flow measurement instrument maker for several years.  For a variety of reasons, flow measurement devices can drift or can be mis-calibrated.  To fail the state standard, the meter has to be off about 2.5%, which is about 6 tablespoons to the gallon.  State governments have taken on the task of making sure commercial weights and measures are accurate, and though I think this could be done privately, I don't find it a terribly offensive government task.  Having taken this task on, it is reasonable to question whether it is doing its oversight job well.  But let's not try to turn this into a consumer nightmare by only discussing one half of the normal distribution of outcomes.

Post title stolen from an old Dilbert cartoon.

Posted on July 1, 2008 at 08:49 AM | Permalink | Comments (7)

Vote Yourself A Higher-Cost New Home

Arizona voters will have a chance to raise the price of a new home and reduce the choice they have in the marketplace with an initiative on the ballot this November:

The proposed measure, which requires more than 153,000 certified signatures to qualify for the statewide ballot, includes a 10-year warranty on new homes and gives homeowners the right to choose which contractors with a decade-long, complaint-free record do repair work.

Having shopped from time to time for a new home, I can say that such homes with extended warranties from quality companies do exist in the marketplace - some builders offer this kind of warranty, and some do not.  All this bill is doing is reducing choice.  It is requiring that consumers no longer be offered the choice of a new home without a 10-year warranty, and will require that all homes carry this more expensive option.  I am sure that what people voting for this bill will hope for is that they will be getting today's less expensive house but with a 10-year warranty added, but that is not the way it works.

Second, this will virtually eliminates the small independent builder.  Though they do not produce a large percentage of the total homes, small builders, often individual investors with a single property, are still an important part of the market.  You might say, surely this is just an unintended consequence!  Well, what if I told you the AFL-CIO, the largest organizer of construction workers in large home builders, is the #1 financial supporter of this bill?  That information might change this from an unintended consequence to the #1 rationale behind the bill.

Finally, one can easily argue that the law is forcing people to pay for something that may well have no value.  Individuals trying to game the system can easily start a company, build some houses, pay off owners, fold up the tent, and move on to a new entity.  Consumers are left with a 10-year warranty from a company that no longer exists.  Which is how the roofing game is played by the bottom-fishers in that industry.  Which means customers have to shop around for well-established companies with long track records and good products, which, if they did so, would obviate the need for the bill in the first place.

Provisions give homeowners the ability to sue without the threat of being responsible for a builder's attorney and expert fees and require builders to disclose their relationships with financial institutions.

Just what we need - another industry where the plaintiffs have zero cost to launch any frivolous suit they want.

Yet another would require that model homes reflect the types of properties that are for sale.

I have no idea what this means.  Are there really buyers who are dumb enough to walk through a model, say this is the house they want, and then blandly accept a home that is totally different?

What I perhaps found funniest about the article was this bit of political positioning:

The campaign, called the Arizona Homeowners Bill of Rights Committee, formed in the midst of this year's housing-mortgage meltdown. And the committee has attempted to draw links between financing and construction troubles.

"These same companies that build shoddily also were involved in the housing-mortgage crisis. They were on both sides of this equation. They were financing homes above people's means and selling homes that were defective," said Richard McCracken, an attorney for the measure's sponsor, the Sheet Metal Workers' International Association, Local Union 359.

This is kind of a hilarious stretch - talk about guilt by association.  Of course, the bill has nothing to day about mortgages, but since homebuilders were associated with those bad mortgage guys, we should feel free to do anything we want to them.

Posted on July 1, 2008 at 08:32 AM | Permalink | Comments (6)

Where Were You Republicans?

As any reader of this blog will know, I am a strong supporter of opening up new areas in North America to oil drilling and freeing companies to develop western oil shale reserves.  Republicans in Congress are currently bashing Pelosi and the Democrats for not opening this development up.  Fair enough, I guess, but where were the Republican for the six years they had both the Congress and the Presidency?

As a libertarian, the situation in Congress simply sucks.  Republicans, who purport to be our allies on economic issues, do nothing of consequence with their six years running Congress.  Democrats, who purport to be our allies on civil liberties issues, immediately roll over on FISA once taking over Congress.  My general observation is that I like both parties better when they are in opposition.

Posted on July 1, 2008 at 08:08 AM | Permalink | Comments (10)

Your State's Gas Tax

I find that in discussing gasoline prices, a lot of people don't know what their state's gasoline tax is.  So, as a public service (hat tip to Mark Perry)

Gastax

Posted on July 1, 2008 at 07:41 AM | Permalink | Comments (6)