State Science Institute Issues Report on Rearden Metal, err, Fracking

The similarity between the the text of the recent NY report on fracking and the fictional state attack on Rearden Metal in Atlas Shrugged is just amazing.

Here is the cowardly State Science Institute report on Rearden Metal from Atlas Shrugged, where a state agency attempts to use vague concerns of unproven potential issues to ban the product for what are essentially political reasons (well-connected incumbents in the industry don't want this sort of competition).  From page 173 of the Kindle version:

[Eddie] pointed to the newspaper he had left on her desk. “They [the State Science Institute, in their report on Rearden Metal] haven’t said that Rearden Metal is bad. They haven’t said that it’s unsafe. What they’ve done is . . .” His hands spread and dropped in a gesture of futility. [Dagny] saw at a glance what they had done.

She saw the sentences: “It may be possible that after a period of heavy usage, a sudden fissure may appear, though the length of this period cannot be predicted. . . . The possibility of a molecular reaction, at present unknown, cannot be entirely discounted. . . . Although the tensile strength of the metal is obviously demonstrable, certain questions in regard to its behavior under unusual stress are not to be ruled out. . . . Although there is no evidence to support the contention that the use of the metal should be prohibited, a further study of its properties would be of value.”

“We can’t fight it. It can’t be answered,” Eddie was saying slowly. “We can’t demand a retraction. We can’t show them our tests or prove anything. They’ve said nothing. They haven’t said a thing that could be refuted and embarrass them professionally. It’s the job of a coward.

From the recent study used by the State of New York to ban fracking (a process that has been used in the oil field for 60 years or so)

Based on this review, it is apparent that the science surrounding HVHF [high volume hydraulic fracturing] activity is limited, only just beginning to emerge, and largely suggests only hypotheses about potential public health impacts that need further evaluation....

...the overall weight of the evidence from the cumulative body of information contained in this Public Health Review demonstrates that there are significant uncertainties about the kinds of adverse health outcomes that may be associated with HVHF, the likelihood of the occurrence of adverse health outcomes, and the effectiveness of some of the mitigation measures in reducing or preventing environmental impacts which could adversely affect public health. Until the science provides sufficient information to determine the level of risk to public health from HVHF to all New Yorkers and whether the risks can be adequately managed, DOH recommends that HVHF should not proceed in New York State....

The actual degree and extent of these environmental impacts, as well as the extent to which they might contribute to adverse public health impacts are largely unknown. Nevertheless, the existing studies raise substantial questions about whether the public health risks of HVHF activities are sufficiently understood so that they can be adequately managed.

Why is it the Left readily applies the (silly) precautionary principle to every new beneficial technology or business model but never applies it to sweeping authoritarian legislation (e.g. Obamacare)?

US to Normalize with Cuba -- Limiting Free Interchange with Authoritarian Regimes Only Benefits Their Leaders

I certainly am no Castro apologist, but it strikes me that 50+ years of embargoes and pointless travel restrictions have not brought his regime to heal.  So it is past time to recognize this and perhaps try something else.  So kudos to President Obama for doing something that apparently only a lame duck President who no longer has to worry about winning the Florida electoral votes can do, he is going to normalize relations with Cuba.

This should be good news for anyone who opposes the Cuban regime and its oppression. Time and again over the last 50 years, we have seen cultural and economic interchange fell more authoritarian governments than any amount of military action.  When we cut off free exchange with authoritarian regimes, we are doing their leaders a favor.

Life in the Anti-Trust World

Today Apple Computer won the class-action anti-trust case filed against them.  The plaintiffs were seeking a billion dollars in damages (after tripling) for a DRM system (Fairplay) that does not exist any more used on a device (the iPod) that Apple has pretty much phased out.  These products were such a threat to the survival of competitors that they don't even exist any more.  This is not atypical of how anti-trust often plays out in the marketplace, particularly in the technology sphere.  Any day now I will be filing my lawsuit against Commodore for suppressing competition in the home computer market.

Making Everyone a Criminal

From Atlas Shrugged:

Dr. Ferris smiled. . . . . ."We've waited a long time to get something on you. You honest men are such a problem and such a headache. But we knew you'd slip sooner or later - and this is just what we wanted."

[Hank Reardon:]  "You seem to be pleased about it."

"Don't I have good reason to be?"

"But, after all, I did break one of your laws."

"Well, what do you think they're for?"

Dr. Ferris did not notice the sudden look on Rearden's face, the look of a man hit by the first vision of that which he had sought to see. Dr. Ferris was past the stage of seeing; he was intent upon delivering the last blows to an animal caught in a trap.

"Did you really think that we want those laws to be observed?" said Dr. Ferris. "We want them broken. You'd better get it straight that it's not a bunch of boy scouts you're up against - then you'll know that this is not the age for beautiful gestures. We're after power and we mean it. You fellows were pikers, but we know the real trick, and you'd better get wise to it. There's no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren't enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. Who wants a nation of law-abiding citizens? What's there in that for anyone? But just pass the kind of laws that can neither be observed nor enforced nor objectively interpreted - and you create a nation of law-breakers - and then you cash in on guilt. Now, that's the system, Mr. Rearden, that's the game, and once you understand it, you'll be much easier to deal with."

Here is the same thing, Obama Administration style

Major U.S. corporations have broadly supported President Barack Obama's healthcare reform despite concerns over several of its elements, largely because it included provisions encouraging the wellness programs.

The programs aim to control healthcare costs by reducing smoking, obesity, hypertension and other risk factors that can lead to expensive illnesses. A bipartisan provision in the 2010 healthcare reform law allows employers to reward workers who participate and penalize those who don't.

But recent lawsuits filed by the administration's Equal Employment Opportunity Commission (EEOC), challenging the programs at Honeywell International and two smaller companies, have thrown the future of that part of Obamacare into doubt.

The lawsuits infuriated some large employers so much that they are considering aligning themselves with Obama's opponents, according to people familiar with the executives' thinking.

"The fact that the EEOC sued is shocking to our members," said Maria Ghazal, vice-president and counsel at the Business Roundtable, a group of chief executives of more than 200 large U.S. corporations. "They don't understand why a plan in compliance with the ACA (Affordable Care Act) is the target of a lawsuit," she said. "This is a major issue to our members."

At the exact same moment, one branch of the Administration is encouraging an activity that another branch is working to criminalize.

Letter to Nitin Nohria, Dean of the Harvard Business School

I wrote Dean Nohria in response to this story

Ben Edelman is an associate professor at Harvard Business School, where he teaches in the Negotiation, Organizations & Markets unit.

Ran Duan manages The Baldwin Bar, located inside the Woburn location of Sichuan Garden, a Chinese restaurant founded by his parents.

Last week, Edelman ordered what he thought was $53.35 worth of Chinese food from Sichuan Garden’s Brookline Village location.

Edelman soon came to the horrifying realization that he had been overcharged. By a total of $4.

If you’ve ever wondered what happens when a Harvard Business School professor thinks a family-run Chinese restaurant screwed him out of $4, you’re about to find out.

(Hint: It involves invocation of the Massachusetts Consumer Protection Statute and multiple threats of legal action.)

Here was the letter I sent, which was significantly more mature in tone for having waited 24 hours before writing it

My wife and I are both HBS '89 grads.  We own and actively manage a small to medium size service business.  I was encouraged at our last reunion to hear a lot of the effort HBS seems to be placing on small business and entrepreneurship.

However, I was horrified to see an HBS professor (prof Edelman) in the news harassing a small business over a small mistake on its web site.  I don't typically get worked up about Harvard grads acting out, but in this particular case his actions are absolutely at the core of what is making the operation of a small business increasingly impossible in this country.

Small businesses face huge and growing compliance risks from almost every direction -- labor law, safety rules, environmental rules, consumer protection laws, bounty programs like California prop 65, etc.  What all these have in common is that they impose huge penalties for tiny mistakes, mistakes that can be avoided only by the application of enormous numbers of labor hours in compliance activities.   These compliance costs are relatively easy for large companies to bear, but back-breaking for small companies.

So it is infuriating to see an HBS professor attempting to impose yet another large cost on a small business for a tiny mistake, particularly when the proprietor's response was handled so well.  Seriously, as an aside, I took service management from Ben Shapiro back in the day and I could easily see the restaurateur involved being featured positively in a case study.  He does all the same things I learned at HBS --  reading every customer comment personally, responding personally to complaints, bending over backwards to offer more than needed in order to save the relationship with the customer.

As for the restaurateur's web site mistake -- even in a larger, multi-site company, I as owner do all my own web work.  Just as I do a million other things to keep things running.  And it is hard, in fact virtually impossible, to keep all of our web sites up to date.  Which is why Professor Edelman's response just demonstrates to me that for all HBS talks about entrepreneurship, the faculty at HBS is still more attuned to large corporations and how they operate with their enormous staff resources rather than to small businesses.

Large corporations are crushing smaller ones in industry after industry because of the economy of scale they have in managing such compliance issues.  If the HBS faculty were truly committed to entrepreneurship, it should be thinking about how technology and process can be harnessed by smaller businesses to reduce the relative costs of these activities. How, for example, can I keep up with 150+ locations that each need a web presence when my sales per site are so much less than that of a larger corporation?  This is not impossible -- I have learned some tools and techniques over time -- and we should be teaching and expanding these, rather than spending time raising the cost of compliance for small business.

Why Do Climate Change Claims Consistently Get a Fact-Checker Pass?

It is almost impossible to read a media story any more about severe weather events without seeing some blurb about such and such event being the result of manmade climate change.  I hear writers all the time saying that it is exhausting to run the gauntlet of major media fact checkers, so why do they all get a pass on these weather statements?  Even the IPCC, which we skeptics think is exaggerating manmade climate change effects, refused to link current severe weather events with manmade CO2.

The California drought brings yet another tired example of this.  I think pretty much everyone in the media has operated from the assumption that the current CA drought is 1. unprecedented and 2. man-made. The problem is that neither are true.  Skeptics have been saying this for months, pointing to 100-year California drought data and pointing to at 2-3 other events in the pre-manmade-CO2 era that were at least as severed.  But now the NOAA has come forward and said roughly the same thing:

Natural weather patterns, not man-made global warming, are causing the historic drought parching California, says a study out Monday from federal scientists.

"It's important to note that California's drought, while extreme, is not an uncommon occurrence for the state," said Richard Seager, the report's lead author and professor with Columbia University's Lamont Doherty Earth Observatory. The report was sponsored by the National Oceanic and Atmospheric Administration. The report did not appear in a peer-reviewed journal but was reviewed by other NOAA scientists.

"In fact, multiyear droughts appear regularly in the state's climate record, and it's a safe bet that a similar event will happen again," he said.

The persistent weather pattern over the past several years has featured a warm, dry ridge of high pressure over the eastern north Pacific Ocean and western North America. Such high-pressure ridges prevent clouds from forming and precipitation from falling.

The study notes that this ridge — which has resulted in decreased rain and snowfall since 2011 — is almost opposite to what computer models predict would result from human-caused climate change.

There is an argument to be made that this drought was made worse by the fact that the low precipitation was mated with higher-than average temperatures that might be partially attributable to man-made climate change.  One can see this in the Palmer drought severity index, which looks at more factors than just precipitation.  While the last 3 years was not the lowest for rainfall in CA over the last 100, I believe the Palmer index was the lowest for the last 3 years of any period in the last 100+ years.  The report did not address this warming or attempt to attribute some portion of it to man, but it is worth noting that temperatures this year in CA were, like the drought, not unprecedented, particularly in rural areas (urban areas are going to be warmer than 50 years ago due to increasing urban heat island effect, which is certainly manmade but has nothing to do with CO2.)

Update:  By the way, note the article is careful to give several paragraphs after this bit to opponents who disagree with the findings.  Perfectly fine.  But note that this is the courtesy that is increasingly denied to skeptics when the roles are reversed.  Maybe I should emulate climate alarmists and be shouting "false balance!  the science is settled!"

If You Like Your Health Plan...

We received a letter from Blue Cross / Blue Shield of AZ saying we could keep our plan, but the cost goes from about $579 a month to $739 a month in January of 2015 (a 27.6% increase).  Note that this is for a pretty high deductible health plan, something like $5000.  We wrote to our broker to explore options.  We got this response:

Crazy as this latest BC [Blue Cross] rate increase is it is a lot better than Obamacare.  I ran the same plan under the Affordable Care Act with BC and the rate for 1/1/15 would be $963.70 a month and if you went to the $6300 deductible plan the rate would still be $914 a month.  So I guess we are all lucky to be out of ACA until we are forced into it.  Now there is one variable that could lower your cost and that is if your household income in 2015 will be under $92k you could go into the Marketplace for premium assistance from our wonderful Federal government. If it is going to be higher than that be grateful you are where you are!

As predicted in advance, Obamacare and the exchange are not about saving money.  The only people who are saving money are those getting taxpayer subsidies in the exchange.

Trend That is Not A Trend: Sexual Assaults on Campus

In response to the twin notions that sexual assaults are a) increasing and b) particularly prevalent on college campuses where a "rape culture" supposedly exists, comes this recent report from the DOJ on sexual assault prevalence among college aged women.

sexual-assault

 

Update:  For a university the size of UVA (20,000 students, presumably 10,000 women) these data imply about 200 of the current students will be sexually assaulted over their four years.  This is a depressingly large number, and makes one wonder with this many examples to choose from how Rolling Stone managed to find one case that was so obviously heavily embellished (at a minimum) or fraudulent.  200 is, however, an order of magnitude smaller than the 2000 that would be predicted by the "1 in 5" number which is repeated so uncritically by public figures.

As to the declining trend, I understand the issue of under-reporting, though most folks in the know seem to think this type of study (which includes unreported cases) is more accurate than reported crime figures.  But for under-reporting to affect the trend (rather than the absolute numbers) one would have to argue that the reporting percentage is declining, something for which I have never seen evidence and which is a proposition that defies common sense.  Over the last decades, sexual assault victims have gone from being shamed to being protected to being put on a pedestal (given our current fetishization of victimization).  It is hard in this environment to imagine sexual assault reporting rates going down.

Techniques to Aid Authoritarians: The Supposed Statute of Limitations on Outrage

In the Fast and Furious and IRS scandals, the Administration has purposefully dragged its feet on disclosures.  The strategy is to let as much time pass so that when bad revelations eventually come out, the heat from the original scandal is gone.  Defenders of the Administration will then argue the revelations are "old news", as if there is some statute of limitations on outrage.  This strategy has driven Republicans crazy.

So what do Conservatives do when the torture report comes out after months and months of foot-dragging trying to prevent its release? You got it, they scream "old news".  Scott Johnson:

I confess that I do not understand the rationale supporting the publication of the Democrats’ Senate Select Committee study of the CIA’s detention and interrogation program. On its face, it seems like ancient history (of a highly tendentious kind) in the service of a personal grudge. It is not clear to me what is new and it is not clear that what is new is reliable, given the absurd limitations of the committee’s investigation.

By the way, I want to make one observation on this line from attorney John Hinderaker:

Similarly, the report confirms that the Agency’s enhanced interrogation techniques were used on only a small number of captured terrorists, 39 altogether. These enhanced techniques include the “belly slap” and the dreaded “attention grasp.”

Most important, it appears that waterboarding really was the most extreme sanction to which any of the terrorists were subjected (and only three of them, at that). Given all the hoopla about CIA “torture,” one might have expected to learn that far worse happened at the Agency’s dark sites. But, as far as the report discloses, the Agency stuck almost exclusively to its approved list of tactics, all of which the Department of Justice specifically found not to be torture.

Were some of the captured terrorists treated roughly? Absolutely. Their lives must have been miserable, and deservedly so. Some of the 39 were placed in stress positions for considerable lengths of time, doused with water, fed poor diets, left naked in cells. In one instance, a terrorist was threatened with a power drill. In another case, an interrogator told a terrorist that his children may be killed. There were two instances of mock execution.

A few observations:

  • The fact that they were "terrorists" seems to justify the mistreatment for him.  But how do we know they were terrorists?  Because the Administration said so.  There was no due process, no right of appeal, no ability to face witnesses, no third party review, none of that.  A branch of the Administration grabbed the guy, said you are a terrorist, and started torturing them.  I am not saying that they did this without evidence, but I am sure Mr. Hinderaker know from his own experience that every prosecutor thinks every person he or she tries is guilty.  That is why both sides get to participate in the process.
  • "Terrorist" is an awfully generic word to give us automatic license to torture people.  My sense is that there are all kinds of shades of behavior lumped under that word.  Conservatives like Mr. Hinderaker object, rightly, to a wide range of sexually aggressive actions from unwanted kissing to forced penetration being lumped under the word "rape".  But my sense is we do the same thing with "terrorists".
  • In my mind the casualness with which he can accept these kinds of treatments for people he does not like is morally debilitating.  It is a small step from accepting it for one to accepting it for many.  It is like the old joke of a debutante asked if she would have sex for a million dollars and saying "yes", then getting asked if she would have sex for $20 and responding "what kind of girl do you think I am?"  We've already established that, we are just haggling over price.
  • For those on the Right who say that all this stuff about due process does not apply because the "terrorists" were not citizens, then welcome to the Left!  Individual rights are innate -- they are not granted by governments (and thus by citizenship).  The Right generally says they believe this.  It is the Left whose positions imply that rights are favors granted by the state to its citizens.

How Is This Even A Question? Oil Price Drop is Great

The recent drop in oil prices has been met with a surprising amount of negativity, as if something bad is happening.  This strikes me as insane.  The world uses 90 or so million barrels of oil a day.  The recent $30+ price drop in oil thus equals a world savings of $1 trillion a year.

Sure, oil companies and their suppliers are worse off (and believe me, I care -- a lot of my portfolio was invested in such things when oil started dropping).  But the economy as a whole is clearly better off and wealthier.

To understand why, the analysis we need to undertake is an exact parallel of the broken window fallacy analysis.  Its sort of a healing window analysis.

After the oil price drop, consumers have a trillion dollars more and oil producers have a trillion dollars less.  Even right?  Actually, not.  Because consumers then spend that trillion on other things.  Those other manufacturers and producers get the trillion dollars lost to the oil industry.  Still even, right?  No.  Think of it this way:

Before the price drop

  • Oil companies have $1 trillion extra revenue
  • Other producers have no extra revenue
  • Consumers have 90 million barrels a day of oil

After the price drop

  • Oil companies have no extra revenue
  • Other producers have $1 trillion extra revenue
  • Consumers have 90 million barrels a day of oil AND $1 trillion of extra stuff (goods, service, savings, etc)

The world in the second case is wealthier.  And this is assuming all the people involved are private parties.   In fact, much of the oil revenue drop comes out of the hands of  value-destroying governments so that in fact the wealth increase in the price drop scenario is actually likely even greater than in this simplistic analysis.

Postscript:  OK, yes I am ignoring any cost of carbon pollution.  But the market is not set up to price that, and readers will know that I am skeptical that the cost is that high.  Never-the-less, this is a separate issue that if it needs to be dealt with should be dealt with as a carbon tax on fuels.  The price drop should not affect the value of that tax.  Or another way to put it, if one thinks the tax should be $30 per ton based on a $30 cost of carbon, it should be $30 per ton at $100 oil and $30 per ton at $60 oil.

Trend That is Not A Trend: Increase in Typhoons and Hurricanes

The science that CO2 is a greenhouse gas and causes some warming is hard to dispute.  The science that Earth is dominated by net positive feedbacks that increase modest greenhouse gas warming to catastrophic levels is very debatable.  The science that man's CO2 is already causing an increase in violent and severe weather is virtually non-existent.

Seriously, of all the different pieces of the climate debate, the one that is almost always based on pure crap are the frequent media statements linking manmade CO2 to some severe weather event.

For example, Coral Davenport in the New York Times wrote the other day:

As the torrential rains of Typhoon Hagupit flood thePhilippines, driving millions of people from their homes, the Philippine government arrived at a United Nationsclimate change summit meeting on Monday to push hard for a new international deal requiring all nations, including developing countries, to cut their use of fossil fuels.

It is a conscious pivot for the Philippines, one of Asia’s fastest-growing economies. But scientists say the nation is also among the most vulnerable to the impacts of climate change, and the Philippine government says it is suffering too many human and economic losses from the burning of fossil fuels....

A series of scientific reports have linked the burning of fossil fuels with rising sea levels and more powerful typhoons, like those that have battered the island nation.

It is telling that Ms. Davenport did not bother to link or name any of these scientific reports.  Even the IPCC, which many skeptics believe to be exaggerating manmade climate change dangers, refused in its last report to link any current severe weather events with manmade CO2.

Roger Pielke responded today with charts from two different recent studies on typhoon activity in the Phillipines.  Spot the supposed upward manmade trend.  Or not:

kubotachan2009

c2789-wpac-50-10-weinkleetal

 

I am not a huge fan of landfalling cyclonic storm counts because whether they make landfall or not can be totally random and potentially disguise trends.  A better metric is the total energy of cyclonic storms, land-falling or not, where again there is no trend.

Via the Weather Underground, here is Accumulated Cyclonic Energy for the Western Pacific (lower numbers represent fewer cyclonic storms with less total strength):

ace-west-pacific

 

And here, by the way, is the ACE for the whole globe:

 

ace-global

Remember this when you see the next storm inevitably blamed on manmade global warming.  If anything, we are actually in a fairly unprecedented (in the last century and a half) hurricane drought.

Morally Lost

Much of the Conservative pushback on the torture report today has been to argue that the torture was actually much more useful in terms of information gathering than the Senate report concludes.  Who gives a cr*p?  Are these really the same folks who lecture me about morality for wanting to allow gay men to marry, but are A-OK with torture?

In the rape discussion, those who show skepticism about false stories of rape are considered, unfairly, rape apologists.  But these folks I am hearing today are truly torture apologists.  It is sickening.  If Conservatives were truly just in a Bismarkian blood and iron mode, I guess at least they would be internally consistent.  But many of these guys are neo-Conservatives, who are essentially advocating torture as a means to spreading our positive values around the world.

Conservatives, correctly I think, criticized the Obama Administration for blaming the Libyan embassy attack on YouTube video.  They argued that he should have been standing up in front of the world and explaining free speech and educating the world on why we don't punish folks for its exercise, even when we disagree with them.  All fine, except how does advocating for torture play into this bully pulpit theme?

Scottsdale Police Union Charity: Less than 5 Cents of Each Donated Dollar Actually Getting Used For Charity

These guys hassle me constantly for money and I generally duck them.  Which is good, because if I had actually given money, I would be pissed:

The Scottsdale police union known as POSA -- the Police Officers of Scottsdale Association -- stages several events every year to help bring police and the community closer together. Over the next two weeks, 500 Scottsdale children will go holiday shopping with $150 in their pockets in the annual Shop with a Cop event.

But a closer look at POSA's federal tax filings shows just pennies of every dollar you donate reaches the community.

...

The union's most recent federal tax filings, for 2012, show about a million dollars in donations. For every dollar donated, professional fundraising services kept 81 cents -- about $814,000, records show.

A little more than 6 cents of every dollar went toward the $62,000-a-year salary of POSA director Cindy Hill. Hill is also the wife of union leader Jim Hill.

Less than a nickel of every dollar -- about $45,000 -- was spent on events like Shop with a Cop.

To be fair, this is probably about the same percentage of union dues that gets spent for their stated purpose, so these guys probably don't see anything amiss.

A Small Silver Lining in the Very Black Torture Cloud

Well, the Senate torture report is out and it is every bit as bad, perhaps worse, than expected.   There are summaries all over but this one seems as good as any.  And here. Essentially the CIA:

  • Tortured and detained more people than they ever admitted
  • Were more brutal than they ever admitted
  • Were more haphazard and incompetent than can be believed (losing suspects, outsourcing torture to a couple of outside psychologists with no interrogation experience or credentials)
  • Achieved far less than they bragged from the torture, with results that now appear to approximate zero
  • Lied about everything to everyone, up to and including Congress and the President

The CIA needs a forced enema of its own, though I am skeptical they will get it.

I will say that there is nothing really particularly surprising here to a libertarian.  This sort of lawlessness often occurs in fairly transparent government agencies (think VA) so it should be no surprise that it occurs in an agency like this that has zero accountability (because it can yell "classified" as the drop of a hat).  An agency empowered to hide stuff and keep secrets is going to hide stuff and keep secrets.  I am not even sure that if we really could turn the CIA upside down that this would be the worst thing we would find.

At the risk of diluting the totally appropriate horror with which this report should be received, I will observe a couple of positives:

  1. Three cheers for partisanship and divided government.  They get a bad rap because gridlock, but without confrontational, competitive, even polarized rivals for power, this sort of thing would never have come out.  You can see pretty clearly from the minority comments that Republicans would have buried this had they controlled the Senate.
  2. One cheer for American exceptionalism.  Yes, the hubris and arrogance that often accompanies American exceptionalism went a long way to contributing to these errors.   But there are not many countries in the world that would publish this report.  Forget for a minute Russia or China or Mali.  Even among western democracies there are not many countries that would voluntarily call for penalty strokes on themselves.  I can't imagine, for example, France ever making such an admission (and not, I think, because the DGSE's hands are particularly clean).

Kevin Drum Inadvertently Undermines His Own Keynesianism

This is a follow-up from a post this morning here.  Kevin Drum is a Keynesian who thinks that the government is committing economic suicide if it does not increase its spending substantially during and after a recession.  Kevin Drum is also a fierce partisan who wants to defend President Obama against his detractors.  Unfortunately, trying to do the two simultaneously has led to what I think may be an embarrassing result for him.

In the chart below, I combine two graphs of his.  The one on the left is a chart from last year in a Mother Jones cover story blasting "austerity" and lamenting how dumb it was to decrease spending in the years after a recession.  The chart on the right is from the other day, when Drum is agreeing with Paul Krugman that the recession recovery under Obama has been much stronger than the one under Bush II.  The result is a juxtaposition that seems to undermine his Keynesian assumptions - specifically, the recession where we had the "austerity" was the one with the better recovery.  The only thing I have done to his charts is removed lines in the left chart for other past recessions and changed the line colors on the two charts to match.   You can click to enlarge:

click to enlarge

The blue line is the Bush II recession, the red line is the Obama recession.  I believe the start dates are consistent in both charts.  All the numbers and choice of start dates and measurement scales are Drum's.  Don't yell at me for something in the chart construction being unfair -- they are his choices.

The conclusion?  Higher government spending seems to inhibit recovery.  Thanks Kevin!

Am I Reading This Right?

This seems to claim to be able to take photos fast enough to capture the movement of light.  Is that really possible?  Reminds me of watching sunrise on Discworld.

Economic Drivers I Had Not Considered Before

Geographic mobility costs are a drag on the economy, because they slow and/or truncate relocation of labor to shifting areas of demand (a good example is the fact that North Dakota currently can't get enough workers because people can't/won't move there to take advantage of the opportunities.

Apparently, there are economists who make the argument that one reason for the post-WWII boom is that the war increased mobility for a variety of reasons, not the least of which was the forced extrication of young men from their homes via the draft.  Apparently Hurricane Katrina may have had the same effect, blasting people out of the moribund New Orleans economy and forcing them to move to more dynamic areas.

This is probably true, but also one of those areas where economic analysis falls short of total well-being analysis (for lack of a better term).  I know folks from New Orleans and they often seem to be deeply tied to the New Orleans culture and miss it when they have moved away.   Many move back.  So just because someone is better off economically with a job in Houston does not necessarily mean they consider themselves better off.

Chart Humor

From here.  Given how often this happens in the media, it almost is not even funny.

unnamed

Kevin Drum Undermines His Own Cover Story and Refutes His Own Keynesian Assumptions

Update:  I have posted an update with a side by side chart comparison here.

Last year, Kevin Drum wrote what I believe was the cover story of the September / October issue of Mother Jones (I read the online edition so exactly how the print version is laid out is opaque to me).  That article, entitled "It's the Austerity, Stupid: How We Were Sold an Economy-Killing Lie" features this analysis:

Click to enlarge

 

He described the chart as follows:

 In the end, for reasons both political and ideological, Obama decided that he needed to demonstrate that he took the deficit seriously, and in his 2010 State of the Union address he did just that. "Families across the country are tightening their belts," he said, and the federal government should do the same. To that end, he announced a three-year spending freeze and the formation of a bipartisan committee to address the long-term deficit.

The Beltway establishment may have applauded Obama's pivot to the deficit, but much of the economic community saw it as nothing short of a debacle. Sure, there were still a few economists who believed that even in a deep recession government spending merely crowded out private spending and thus did no good, but they were a distinct minority. Most economists acknowledged that deficit spending was appropriate at a time like this. Paul Krugman fumed that Obama was cravenly trying to score political points by doing a "deficit peacock-strut" that would be destructive in the wake of the financial crisis. Mark Zandi, a centrist economist who has advised leaders of both parties, used more judicious language, but likewise warned that spending cuts might "cost the economy significantly in the longer run."...

Taken as a whole, these measures have cut the deficit by $3.9 trillion over the next 10 years. And that doesn't even count the expiration of desperately needed stimulus measures like the payroll tax holiday and extended unemployment benefits.

This was unprecedented, as the chart above shows. After every other recent recession, government spending has continued rising steadily throughout the recovery, providing a backstop that prevented the economy from sliding backward. It happened under Ronald Reagan after the recession of 1981, under George H.W. Bush after the recession of 1990, and under George W. Bush after the recession of 2001. But this time, even though the 2008 recession was deeper than any of those previous ones, it didn't.

 

I thought the choice of baseline dates for his charts was deceptive, but never-the-less for the moment lets accept this at face value.  Make sure to take a note of the red line, which is the current recession, and the brown line, which was the recovery from the recession in the late Clinton / early Bush years.  By Mr. Drum's earlier analysis, the earlier 1990 recession was better handled than the current one (against his Keynesian assumptions) by the government continuing to increase spending after the recession to keep the recovery going.   The point of Drum's earlier article was to say that Republicans in Congress were sinking the current economy by not increasing spending as was done after these earlier recessions.

So this is what Drum published the other day, I think based on a Paul Krugman article.

But I think Krugman undersells his case. He shows that the current recovery has created more private sector jobs than the 2001-2007 recovery, and that's true. But in fairness to the Bush years, the labor force was smaller back then and Bush was working from a smaller base. So of course fewer jobs were created. What you really want to look at is jobs as a percent of the total labor force. And here's what you get:

blog_private_employment_2001_vs_2010

The Obama recovery isn't just a little bit better than the Bush recovery. It's miles better. But here's the interesting thing. This chart looks only at private sector employment. If you want to make Bush look better, you can look at total employment instead. It's still not a great picture, but it's a little better:

Awesome, Kevin!  So I guess that austerity you were complaining about was the right thing to do, yes?

Seriously, in his article a year ago Drum argued that the Republicans in Congress were sinking the economy vis a vis the 1990 recession by not continuing to boost spending in the years after the recession.  Now, he admits  (though since he does not refer back to the original article I guess it is not an admission per se) that this "austerity" led to a stronger recovery than the spending-fueled 1990 version.  All hail smaller government, the solution to growing employment!

PS-  I wonder how much of this change in private employment since the last recession came in the oil and gas industry, whose expansion the Left generally opposes?  Well, they'll bash on oil tomorrow but today, they will take credit for the jobs added.

Update:  Here are the two charts combined, with other recessions removed and the colors on the data series set to match (click to enlarge)

click to enlarge

Why Reform of Police Accountability is Unlikely

It's as simple as this:  Republicans fetishize the police (like they do the military) and will always give them the benefit of the doubt.  They have this gauzy teary-eyed love of the police.  Just watch Megyn Kelly on Fox to get the idea.  Democrats are allied with public unions and will not under any circumstances take on the powerful police unions who fight any attempt at accountability tooth and nail, a behavior Democrats have become habituated to enabling for other unions like the teachers unions.

The issue is mostly about giving police accountability that matches the special powers over the use of force we give them.  But it is also about racism.  It just burns me up to have folks in power point to the business world constantly for supposed institutional racism, when in fact I witness very little if any day to day.  The one institution I see that clearly has elements of institutional racism are many police forces, but no one will touch them.

Every year there are hundreds of police shootings and the number that are determined not to be justifiable rounds to zero.  What are the odds there is a process involving humans with this small of a Type I error rate?  We are learning form cell phone cameras that the stories we used to believe from police officers about events are often total bullsh*t.  And yet still police are not held accountable even when there is horrific video evidence showing them out of control.

At the drop of a hat, at the smallest hint of a single example of a bad outcome, the government will not hesitate to impose enormous new restrictions on private individuals.  But even with the most overwhelming evidence the government will not put even the lightest restrictions in itself or its employees.

I have always shied away from my fellow libertarians on the anarcho-capitalist end of things who wanted to privatize the police force.  I always thought use of force to be a unique privilege and one dangerous to hand out to private groups.  But I am starting to see that I was thinking about it wrong.  It is a dangerous power to give to anyone, but at least if you give it to a private party someone might possibly exercise a little accountability over them.

Walter Olson has a good roundup of police and lethal force here.

Postscript:  Here is an example of what I mean:  The Obama Administration has imposed significant rules on universities to bring greater accountability to sexual assailants when it was perceived that the universities did not impose enough accountability on such predators.  I think the Administration has gone overboard in stripping away the accused due process protections and handing justice to people who will not manage the process well, but its the seriousness of this effort I want to point out.  While I don't think the Administration's actions were appropriate to colleges, they would represent an entirely appropriate response to police violence.  Someone needs to step in and enforce some accountability.

 

Update on Slippery Cell Phones

In my review of my Droid Turbo, I mentioned in passing that I was frustrated by how slippery a lot of cell phones were.  I was in the Verizon store the other day killing time while they fixed something on my kids' phone, so I tried holding a bunch.

The slipperiest by far were the HTC One M8 and the LG G3.  Both, probably not coincidentally, get high marks for being attractive due to their metal or faux metal backs, but the same backs make them like a wet bar of soap to hold.  You can put a no slip case on them of course, but then if you are going to put them in a case, why buy a phone that is promoted in large part on its looks?

My Droid Turbo is OK, with no slip surface around the edges but a very slick back, at least the nylon back one I have.

The Galaxy S5 is better than average.  Its back gets a lot of grief for being ugly, but it will not slide around in the hand and is comfortable to hold.

Until this week, the no-slip champion for me was the Moto X with the bamboo case (it is real wood veneer, not some plastic fake thing).  It looks good to my eye and it is very grippy in the hand.

But there is a new champion.  I tried the Moto X with the new football leather backing (again, real football leather).  This thing is not going to slide out of your hand (unless maybe if you are Jay Cutler).  The looks are ... different, but I could get used to it.  Phones for me are a convenience item, not a fashion item.  The Moto X's only problems are a small battery and a camera that is a bit weak.  Which is why I bought the Droid Turbo, which is a very similar phone but with a bigger battery.  Just wish they had all the cool Moto Maker options the Moto X has.

Quote of the Day

During the period that  Occupy Wall Street was making the news, I often said that I agreed with many of their problem diagnoses but absolutely disagreed with their proposed solutions.  They, like I, decried the abuse of government power via Cronyism by private parties, e.g. protection and bailout of Wall Street bankers.  Their solution, though, to increase government power never made any sense to me.

Here is Michael Huemer via Don Boudreaux:

Predatory behavior does not occur merely because human beings are selfish.  It occurs because human beings are selfish and some human beings are much more powerful than others.  Powerful, selfish people use their positions to exploit and abuse those much weaker than themselves.  The standard solutions to the problem of human predation all start by cementing the very condition most likely to cause predatory behavior – the concentration of power – and only then do they try to steer away from its natural consequences.  The alternative is to begin with an extreme decentralization of coercive power.

The Non-Crony Pledge

Three cheers for Koch Industries:

“We oppose ALL subsidies, whether existing or proposed, including programs that benefit us, which are principally those that are embedded in our economy, such as mandates,” wrote Philip Ellender, president Koch’s government affairs division, in a Wednesday letter to members of Congress.

Ellender singled out the wind production tax credit as particularly deleterious. But unlike that provision, some of the tax breaks included in the House package benefit activities in which Koch and its subsidiaries are heavily invested.

Koch subsidiary George Pacific, for instance, qualifies for a tax break for the production of cellulosic biofuels. Another subsidiary, Flint Hills Resources, operates biofuel production facilities that could benefit from another of the provisions.

Those tax breaks could improve Koch’s bottom line, but the company sees federal tax preferences in general as economically harmful.

“Koch doesn’t view these as ‘benefits’ even if they are in industries we’re in,” explained a source familiar with the company’s public affairs strategy. “They are wasteful and market distorting, and allow other firms to run businesses that aren’t making money any other way.”

Witnesses Suck

Watching too many TV crime shows will blind you to a stark reality:  Witness testimony sucks.  Look at the linked comparison of witness testimony in the Michael Brown shooting grand jury.  Take any column, like the last one with number of shots fired.  Its a total mess!

When videos emerge of police brutality, police defenders often say that video can lie.  But I would argue that it is a hell of a lot better witness than the average person.  My guess is that police like this kind of variation in witness testimony, because they know that in most, perhaps all, cases, they will be given the benefit of the doubt when the testimony conflicts.

Drone War Legacy

In campaigning for the Presidency, Obama made it clear that he thought that much of the violence and hatred directed at Americans was self-inflicted -- ie our often ham-fisted, aggressive interventionism in the affairs of other countries, frequently backed by military force, was aggravating the world against us.  If we stopped, the violence against us would stop.

I rate this as partially correct and partially naive.  As the richest state in the world, one whose culture pours into other countries to the dismay of many of the local elites, we will always earn the ire of many.  But we certainly have made it worse with our actions.

But this just makes it all the more frustrating to me to see Obama's continued support, even acceleration, of the drone war.  I am not sure there is any other practice that emphasizes our arrogant authoritarian militarism than the drone war.  Americans are not used to a feeling of helplessness, so it is perhaps hard to fully empathize.  But imagine the sense of helplessness to watch American drones circling above your city, drones you can't get rid of or shoot down, drones that lazily circle and then bring death from above almost at random.   I can't think of any similar experience in recent western experience, except perhaps the V2 rocket attacks on London in WWII.

The Obama Administration claims that these are clean, surgical tools without any collateral damage.  They do this by a rhetorical slight of hand, essentially defining anyone who is killed in the attacks ex post facto as being guilty.

As is often the case with government activities, it is worse than we thought:

Via the British group Reprieve comes a report asserting that U.S. drones in Yemen and Pakistan kill 28 "unknowns" for every intended target. What's more, "41 names of men who seemed to have achieved the impossible: to have ‘died,’ in public reporting, not just once, not just twice, but again and again. Reports indicate that each assassination target ‘died’ on average more than three times before their actual death."

So much for the precision of drone strikes, which promise a future of war in which civilians and other forms of collateral damage are spared ruin and destruction. As President Obama said in 2013, by "narrowly targeting our action against those who want to kill us, and not the people they hide among, we are choosing the course of action least likely to result in the loss of innocent life.”

Well, sort of. From the Reprieve report:

As many as 1,147 people may have been killed during attempts to kill 41 men, accounting for a quarter of all possible drone strike casualties in Pakistan and Yemen. In Yemen, strikes against just 17 targets accounted for almost half of all confirmed civilian casualties. Yet evidence suggests that at least four of these 17 men are still alive. Similarly, in Pakistan, 221 people, including 103 children, have been killed in attempt sto kill four men, three of whom are still alive and a fourth of whom died from natural causes. One individual, Fahd al Quso, was reported killed in both Yemen and Pakistan. In four attempts to kill al Quso, 48 people potentially lost their lives.