Archive for May 2008

The Worst Thing I have Seen From a Major Media Company in Quite a While

The Australian Broadcasting Company (ABC) web site has an absolutely horrible kid's game called "Planet Slayer."  In this game, kids answer lifestyle questions and the program tells them when they should die because they have used up their "fair share" of the world's resources.  The less politically correct kids are, or the wealthier they are, the sooner they are told they should die.  Accepting the default, average choices in the games tells kids they should die when they are 9 years old.

Yeah, I know you think I am exaggerating.  Because this is likely to get pulled down soon, I will show you a series of screenshots from it.  Whether it gets pulled down or not, a major media company (with all of its famed multiple levels of editorial control) thought this was a good game for kids.  I actually delayed publishing this, because I wanted to make sure this was not some kind of hack or joke site.  But you can get there right from the ABC home page by clicking "science" in the top menu and clicking on the planet slayer game icon at the bottom of the science page.  I still wonder whether it's a put on - it's that bad.

Here is the landing page (click on any page to increase the size):

One

Yep, that little sign does indeed say "find out when you should die."  Here the game is explained:

Two

Here is the first question:

Three

With each question, if you choose any answer that might not indicate that you are a subsistence farmer in Africa living on a $1 a day, your pig gets fatter.  I really encourage you to check out the whole thing.  It is one politically correct litmus test after another.  My pig got slightly fatter, until I got to this one:

Four

Answering that you spend any more than $10,000 AUS (about a 1:1 conversion with US dollars), your pig will get really fat.  The wealthier you are, the more evil you are in a direct relationship.  It is a point I have made for a while:  global warming alarmists consider their preferred solution to environmental issues to be universal poverty. 

Five

There is me, really evil, because I earn a good living.  And, as we can see with this question, since I spend my money on ordinary stuff that I actually want, rather than where the authors would like me to spend it, I really suck.  When you hit the final button, you pig is actually exploded in a bloody mess  (yes, the red is blood).  As it turns out, I should have been strangled at birth:

Six

Hat tip to Watts Up With That.  Really, in some ways this is an awesome game.   Never have I seen such a pure combination of Marxist-style zero-sum economics with science-challenged warming alarmism.

I don't think I need to bother refuting any of this.  If you are new to the site, you can find a basic refutation of zero-sum economics here and a series of resources on global warming, from a book to free Youtube videos, here.

Because, You Know, People Are All Exactly the Same and Need the Exact Same Things

The Arizona Republic the other day had this headline which certainly caught me attention:

Report: 35% of Arizona jobs  'bad'

I can sympathize.  I have had jobs that were boring and unrewarding.  My last couple of Fortune 50 corporate jobs, while nominally cool on paper, were hugely frustrating.  But it seems this particular "report" had different criteria for "bad" jobs:

The new report calls 35 percent of jobs "bad" because they pay less
than $17 an hour, or $34,000 a year, and offer no insurance or
retirement plans. In a typical state, only 30 percent of the jobs are
considered "bad."

Here is the heart of these studies:  A bunch of middle class people sit around and try to decide what jobs they would be willing to accept and which ones they would not.  Any job that they would not accept is a "bad" job, despite the fact that $12 or $14 an hour might be very good pay for someone with no skills, despite the fact that it makes no consideration of a person's circumstances (e.g. single, married, 2nd job, teenager, etc), and despite the fact that $34,000 would probably put a person in the top 20th  percentile of global wages.  I made a similar point vis a vis jobs in the third world.

Just so I can't be accused of cherry-picking, I will use my own company as an example.  We have a about 80 employees in Arizona, about 70 of which are paid less than $10 an hour and none of whom have a retirement plan or insurance.  All of my jobs in Arizona are included in their count of "bad jobs."  And you know what?  We have a waiting list of over 200 names of people who would take another of these jobs tomorrow if I had one to offer.  That's because my employees are not middle-class academics.   Most are older people who already have a health plan, who don't need a retirement plan (because they have already retired) and who just want a fun job in a nice location where they can live in their RV. 

This has to be one of the most utterly pointless studies of all time.  Sure, $14 an hour would probably suck as a 45-year-old college grad with 2 kids.  But it would be a windfall to a 16-year-old new immigrant with few skills and no English.  The only thing that would be more pointless would be to try to compare states - which they also do:

About 22 percent of Arizona jobs are considered "good" because they pay
at least $17 and offer benefits. That is less than the typical state,
which has 25 percent "good" jobs. The rest of the jobs are in between
because they offer some benefits.

Since cost of living is totally comparable between Phoenix and Manhattan, then using a fixed wage rate to compare states makes complete sense.  By the way, by the study's definition, my job, which is usually awesome, is not "good" because I have no health plan.  In fact, in this study, a $40,000 job with a health plan is ranked as good while a $400,000 job with no health plan is not good.  Yeah, that makes sense.

Two Old Favorites Re-Discovered in the Same Day

The other day, I was sorting through my bookshelves trying to find something for my son to read.  He just blew through the four books of the Hyperion series and was looking for fresh meat.  As I was browsing, I picked up Neil Stephenson's Snow Crash, which I have not read in several years.  Despite reading the book twice before, I was immediately engulfed by the first chapter.  I know I am a geek, but I honestly think that the first chapter of Snow Crash may be the best opening of any book I have ever read.

I seldom watch TV, but later that day I had just finished watching the A&E remake of Andromeda Strain, which was a favorite of mine when I was a boy.  I happened across the Redford-Dunaway movie "Three Days of the Condor."  This is one of my favorite spy movies, and not just because I am a sucker for Faye Dunaway (I always thought the young Faye Dunaway would have been a great Dagny Taggert in Atlas Shrugged.)  One of the reasons I like the movie is its pacing.  I enjoy a full-speed ahead never-take-a-breath action movie as much as the next person, but do they all have to be that way.  This was a thriller with an almost languid pace. 

Boy Is This Election Is Going to Suck

It is nothing new for politicians and the powerful to despise commerce and "traders."  In Medieval society, and continuing in Europe right up into the 19th century, the ruling elite scorned careers that involved actual productive effort.  If you were actually producing something, rather than indolently feeding yourself off the work of the masses, you were not a "gentleman."

It appears that this attitude is coming back in vogue, most notably from the presidential candidates of both parties.  From David Boaz in the WSJ:

Sen. Obama told the students that "our individual
salvation depends on collective salvation." He disparaged students who
want to "take your diploma, walk off this stage, and chase only after
the big house and the nice suits and all the other things that our
money culture says you should buy."

The people Mr. Obama is sneering at are the ones who
built America "“ the traders and entrepreneurs and manufacturers who
gave us railroads and airplanes, housing and appliances, steam engines,
electricity, telephones, computers and Starbucks. Ignored here is the
work most Americans do, the work that gives us food, clothing, shelter
and increasing comfort. It's an attitude you would expect from a
Democrat.

Or this year's Republican nominee. John McCain also
denounces "self-indulgence" and insists that Americans serve "a
national purpose that is greater than our individual interests." During
a Republican debate at the Reagan Library on May 3, 2007, Sen. McCain
derided Mitt Romney's leadership ability, saying, "I led . . . out of
patriotism, not for profit." Challenged on his statement, Mr. McCain
elaborated that Mr. Romney "managed companies, and he bought, and he
sold, and sometimes people lost their jobs. That's the nature of that
business." He could have been channeling Barack Obama.

Mr. Boaz mentions the hypocrisy of Obama having a million dollar house and being famous for his beautiful suits, and then telling graduates not to aspire for the same things.  But a bigger hypocrisy, or perhaps contradiction, is the fact that the candidates must know that the world won't function if everyone were to take their advice.  While bashing the productive, each relies on the productive to fund his plans.  While urging everyone to be parasites, they must know that some must ignore their advice to become the productive hosts on which the parasites feed.

But hypocrisy is not the biggest issue. The real issue
is that Messrs. Obama and McCain are telling us Americans that our
normal lives are not good enough, that pursuing our own happiness is
"self-indulgence," that building a business is "chasing after our money
culture," that working to provide a better life for our families is a
"narrow concern."

They're wrong. Every human life counts. Your life
counts. You have a right to live it as you choose, to follow your
bliss. You have a right to seek satisfaction in accomplishment. And if
you chase after the almighty dollar, you just might find that you are
led, as if by an invisible hand, to do things that improve the lives of
others.

Encore!

It is an indicator of the power of the state that most CEO's of public companies feel the need to pay lip service to every politically correct trend that comes along and to engage in outright sycophancy every time they meet with politicians.  The reason, unfortunately, is that morons like Maxine Waters have been granted nearly unlimited powers over commerce.  Some CEOs unfortunately go even further, going beyond just humoring politicians to play the game themselves, engaging in outright rent-seeking for themselves and their shareholders.

So it is in this context that it is nice to see the CEO of Exxon-Mobil continuing in that company's traditions of not rolling over to populist political pressure:

Rex Tillerson, chairman and chief executive of Exxon Mobil Corp.,
the world's largest oil-and-gas company, came out swinging Wednesday
against the environmental movement, arguing the science of climate
change is far from settled and that his company views it as its
"corporate social responsibility" to continue to supply the world with
fossil fuels....

Avoiding the political correctness that many oil executives are now
showing on global warming, Mr. Tillerson called for a continuation of
the debate, rather than acceptance that it is occurring, with the
potential consequence that governments will implement policies that put
world economies at risk.

"My view is that this is so extraordinarily important to people the
world over, that to not have a debate on it is irresponsible," he said.
"To suggest that we know everything we need to know about these issues
is irresponsible.

"And I will take all the criticism that comes with it. Anybody that
tells you that they got this figured out is not being truthful. There
are too many complexities around climate science for anybody to fully
understand all of the causes and effects and consequences of what you
may chose to do to attempt to affect that. We have to let scientists to
continue their investigative work, unencumbered by political
influences. This is too important to be cute with it."

Mr. Tillerson said Exxon Mobil, despite its reputation as a staunch
climate change denier, is in fact close to the issue as the only oil
company that is a member of the United Nations Intergovernmental Panel
on Climate Change.

Exxon Mobil came under repeated attack during the rowdy meeting for
not showing leadership to combat global warming, with some arguing it
is putting shareholders' capital at risk by not moving into greener
energy.

Among the many critics who stood up in the city's Morton H. Meyerson
Symphony Centre, where the meeting was held, was Neva Rockefeller
Goodwin, the great-granddaughtger of John D. Rockefeller, who founded
Exxon's predecessor 125 years ago.

But her proposal to have Exxon Mobil prepare a report on the impact
of climate change on emerging countries and to embrace greener energy
was backed by only 10.4% of shareholders.

The Exxon shareholder meeting is a zoo.  LIttle serious work gets done.  There are about a zillion people who buy one share of stock so they can show up and flog whatever political hobby horse they have.  I do wish I had been there, though, so that in response to Ms. Goodwin's proposal I could have in turn asked for a report on how alarmist-proposed 80% reductions in fossil fuel consumption would have impacted poverty and progress in developing countries. 

A while back I had observed that Wal-Mart had passed Exxon as the left's #1 Satan.  It is good to see Exxon back on top. 

Myth Of The Anything But Freaking Stupid Voter

Via Kevin Drum's Site:

Ben Smith puts the fact that 10% of Americans believe that Obama is a Muslim in context:

"Large minorities of Americans consistently say they
hold wildly out-of-the-mainstream views, often specifically discredited
beliefs. In some cases, those views should make them pretty profoundly
alienated from one party or the other.

For instance:

22 percent believe President Bush knew about the 9/11 attacks in advance.

30 percent believe Saddam had weapons of mass destruction.

23 percent believe they've been in the presence of a ghost.

18 percent believe the sun revolves around the Earth."

I Think You Have Me Confused With Eliot Spitzer

An email inquiry I received today:

I am a reporter for the Orlando Sentinel in Florida. I need a comment for a story on prostitution.

I actually think there is an organization with 'coyote' in the name that is more active on this topic, so I presume that was the source of confusion.  Not really sure how my wife would react to this inquiry.  However, since we are on the topic, I have written a couple of rants supporting the legalization of prostitution.  In short, I think there is a good case to be made that most of the abuses of prostitution result from its illegality (and therefore lack of ability of its participants to call on the legal system for help).  While one may find prostitution distasteful, the government should protect our bodies and our wallets from assault rather than worrying whether we are tarnishing our souls. 

This "Price" Thingie

Wow, this is unexpected:

The FHWA's "Traffic Volume Trends" report, produced monthly since 1942, shows
that estimated vehicle miles traveled (VMT) on all U.S. public roads for March
2008 fell 4.3 percent as compared with March 2007 travel. This is the first time
estimated March travel on public roads fell since 1979. At 11 billion miles less
in March 2008 than in the previous March, this is the sharpest yearly drop for
any month in FHWA history.

Someone really should research this phenomenon.  It is almost if gasoline prices, which we all know exist solely for the benefit of oil company profits and to support oil company CEO pay, have this heretofore unsuspected utility to modify demand for scarce resources. 

Not to be deterred by this spurious data point, the US Congress is moving ahead with this:

The current high price of gas has led to a lot of crazy proposals from
gas tax holidays to creating a tax deduction based upon energy
consumption. But Rep. Paul Kanjorski's (D-PA) may top them all in terms
of its stupidity. From the Times Leader, Kanjorski's plan would do the
following:

    "¢ H.R. 5800 would tax industries' windfall profits.

"¢ The bill would set up a Reasonable Profits Board to determine when
these companies' profits are in excess, and then tax them on those
windfall profits.

    "¢ As oil and gas companies' windfall profits increase, so would the tax rate for those companies.

"¢ Kanjorski said his legislation will encourage oil companies to lower
prices to prevent them from receiving higher tax rates.

Congressmen Make Themselves Outlaws

From recent legislation:

"It shall be illegal and a violation of this Act," declared the House
of Representatives, "to limit the production or distribution of oil,
natural gas, or any other petroleum product"¦ or to otherwise take any
action in restraint of trade for oil, natural gas, or any petroleum
product when such action, combination, or collective action has a
direct, substantial, and reasonably foreseeable effect on the market,
supply, price, or distribution of oil, natural gas, or other petroleum
product in the United States."

Well, OPEC nations may or may not be in violation of this law.  My guess is that if incompetence and general third-world type fraud is actionable, then they are guilty.  It may be tougher to prove outright conspiracy.

BUT, there is one nation that has, right there on the public record, clear government legislation that substantially limits development of some of the largest potential new oil reserves in the US.  That country is the United States, and by passage of this law, the entire Congress has made itself outlaws.

Not Surprised

I thought it was kind of funny, as I was paging through my referrer logs, to see this search find me:

+"calling in sick" +blog

The search game from Google.fr

Prediction Market at Work?

Today, GoDaddy signed a new long-term sponsorship deal with Danica Patrick, Indy car driver most famous for, uh, having ovaries.  The article says that this new deal was signed well ahead of the expiration of the old deal later this year.

I am struck by the fact that this deal was inked just days before the Indy 500, the winning of which would greatly increase Patrick's value.  I wonder if this is based on some kind of insider knowledge by GoDaddy of Patrick's chances of winning this weekend.

The Oil Reality

Yesterday we saw the people who have done the most to keep oil prices high (e.g. Congress) trying to blame shift their policy failures onto oil company executives.  Hilariously, Maxine Waters thinks she would do a better job for consumers if she were in charge of the US oil companies. 

Beyond the realities of supply and demand, which I guess we all despair of teaching Congress, there were these remarks by Shell's John Hofmeister (via Powerline):

While all oil-importing nations buy oil at global prices, some, notably
India and China, subsidize the cost of oil products to their nation's
consumers, feeding the demand for more oil despite record prices. They
do this to speed economic growth and to ensure a competitive advantage
relative to other nations.

Meanwhile, in the United States, access to our own oil and gas
resources has been limited for the last 30 years, prohibiting companies
such as Shell from exploring and developing resources for the benefit
of the American people.

Senator Sessions, I agree, it is not a free market.

According to the Department of the Interior, 62 percent of all
on-shore federal lands are off limits to oil and gas developments, with
restrictions applying to 92 percent of all federal lands. We have an
outer continental shelf moratorium on the Atlantic Ocean, an outer
continental shelf moratorium on the Pacific Ocean, an outer continental
shelf moratorium on the eastern Gulf of Mexico, congressional bans on
on-shore oil and gas activities in specific areas of the Rockies and
Alaska, and even a congressional ban on doing an analysis of the
resource potential for oil and gas in the Atlantic, Pacific and eastern
Gulf of Mexico.

The Argonne National Laboratory did a report in 2004 that identified
40 specific federal policy areas that halt, limit, delay or restrict
natural gas projects. I urge you to review it. It is a long list. If I
may, I offer it today if you would like to include it in the record.

When many of these policies were implemented, oil was selling in the
single digits, not the triple digits we see now. The cumulative effect
of these policies has been to discourage U.S. investment and send U.S.
companies outside the United States to produce new supplies.

As a result, U.S. production has declined so much that nearly 60 percent of daily consumption comes from foreign sources.

The problem of access can be solved in this country by the same
government that has prohibited it. Congress could have chosen to lift
some or all of the current restrictions on exportation and production
of oil and gas. Congress could provide national policy to reverse the
persistent decline of domestically secure natural resource development.

This is a point I have made for a while:

Exxon Mobil is the largest U.S. oil and gas company, but we account for
only 2 percent of global energy production, only 3 percent of global
oil production, only 6 percent of global refining capacity, and only 1
percent of global petroleum reserves. With respect to petroleum
reserves, we rank 14th.
Government-owned national oil companies dominate the top spots. For an
American company to succeed in this competitive landscape and go head
to head with huge government-backed national oil companies, it needs
financial strength and scale to execute massive complex energy projects
requiring enormous long-term investments.

Lots more good stuff, check it out.

Plasma Rain

A little astronomy pr0n for you today, a video clip of plasma rain on the surface of the sun, via Anthony Watts.

1970s, Here We Come

The economy, the Democratic Party, and the Republican Party are all acting more and more like they did in the 1970s.  Keep your head down, and expect more of this kind of garbage.

Giving Nothing Back

A few minutes ago, on some cable show, I saw a viewer comment that said something like "I am tired of big oil taking in billions and billions of dollars and giving nothing back.  It is time for the era of big oil to end."

Wow -- I would sure suggest he trying going to a different gas station.  Every time I give the oil companies some money, they give me back a tank of gasoline.  This gasoline has great value to me, and is something I could never produce for myself (OK, actually, I bet I could, but you know what I mean).  In fact, the only organization that takes my money and gives me nothing back in return in the government.

New Indiana Jones Movie Just OK

I saw the new Indiana Jones movie with my kids this morning.  It was OK.  The chase / fight scenes were great, and the effects were terrific.  But the plot was so-so  (George Lucas has a writing credit, so I could just refer you back to the Padme** dialog in the last 2 Star Wars movie).  There is sometimes a fine line between good fantasy and silliness, and the movie crosses back and forth several times.  Also, you just can't beat Nazis for over-the-top bad guys.  The Boris-and-Natasha style Soviets just don't serve as well.  Overall, worth seeing if you liked the others, and certainly better than Temple of Doom.  But I wouldn't stand in line to see it.

** Interesting fact that maybe I am the last person in the world to know:  Do you know who the actress was that played the fake Queen / Padme double in Star Wars Episode 1?  I always thought it was Natalie Portman, but that is actually not correct.  It was an uncredited role, and the actress was always in elaborate makeup.  Who was it?  It was Keira Knightly, of Pirates and Beckham fame.

Not Sure this Is A Point of Pride...

I actually found out about this early last year:

Mom-and-pop service stations are running into a problem as
gasoline marches toward $4 a gallon: Thousands of old-fashioned pumps
can't register more than $3.99 on their spinning mechanical dials.

We operate a marina in the back-end of nowhere in Colorado where, since we can only accept less-than-full-truckload gas shipments, we were paying wholesale prices over $3.50 last summer.  We attempted to go to $4.09 on the retail pump, and wham, we ran up against this retail equivalent of the Y2k bug.

Zoning and the Housing Bubble

The Anti-Planner links an article by a Federal Reserve Bank economist on the housing market in Houston and how it is affected by zoning:

"Given that Houstonians had access to the same new types of
mortgages as the rest of the country and that Houston has had greater
population growth than other large metros, we might expect price
appreciation to be stronger in Houston than elsewhere," says the
article. "However, the opposite has been true."

The reason? Houston's lack of zoning and its large supply of land
available for development allowed builders to respond to easy credit by
increasing the pace of construction. Slow and unpredictable permitting
processes prevented builders in many other regions, including Florida
and the Pacific Coast states, from similarly stepping up production.

While some cities and regions have further delayed construction by imposing adequate public facilities or concurrency ordinances, Houston allows developers to create their own municipal utility districts.
Through these districts, the developers install the sewer, water, and
other facilities needed by their developments and charge the property
owners over time.

The result is that housing prices did not bubble, and they are not
significantly declining today. As of the fourth quarter of 2007, in
fact, they were still increasing. Anecdotal evidence from local
realtors and developers indicates that the tightening credit market has
soften the demand for homes under $200,000, but homes above that price
are still selling well.

Whatever correction Houston faces, says the article, "takes place in
the context of prices that are squarely in line with local construction
costs and without the painful supply-induced downturn under way in many
other markets." This leaves Houston relatively immune to the ups and
downs of housing prices experienced in regions with planning-induced
housing shortages.

I need to think a bit about how that relates to this.

The Carbon Offset Sausage Factory

For quite a while, I have been arguing that cap-and-trade schemes are inferior to straight carbon taxes because of their susceptibility to rent-seeking and manipulation.  At the top of the list of problems is the carbon offset issue, the notion that someone can create and sell an offset to cap limits by reducing CO2 emissions in some novel way.  The offset products that exist to day are tremendously suspicious, as I wrote here and here.  In particular, the ability to resell the same emission reduction multiple times is a real danger.

The Guardian has an interesting look at the offsets being created by that bastion of good governance and management science, the United Nations.

The world's biggest carbon offset market, the Kyoto Protocol's clean
development mechanism (CDM), is run by the UN, administered by the
World Bank, and is intended to reduce emissions by rewarding developing
countries that invest in clean technologies. In fact, evidence is
accumulating that it is increasing greenhouse gas emissions behind the
guise of promoting sustainable development. The misguided mechanism is
handing out billions of dollars to chemical, coal and oil corporations
and the developers of destructive dams - in many cases for projects
they would have built anyway.

According to David Victor, a
leading carbon trading analyst at Stanford University in the US, as
many as two-thirds of the supposed "emission reduction" credits being
produced by the CDM from projects in developing countries are not
backed by real reductions in pollution. Those pollution cuts that have
been generated by the CDM, he argues, have often been achieved at a
stunningly high cost: billions of pounds could have been saved by
cutting the emissions through international funds, rather than through
the CDM's supposedly efficient market mechanism.

The key problem, as I have pointed out before, is how do you know the reduction is truly incremental?  How do you know that it would not have occured anyway:

The world's biggest carbon offset market, the Kyoto Protocol's clean
development mechanism (CDM), is run by the UN, administered by the
World Bank, and is intended to reduce emissions by rewarding developing
countries that invest in clean technologies. In fact, evidence is
accumulating that it is increasing greenhouse gas emissions behind the
guise of promoting sustainable development. The misguided mechanism is
handing out billions of dollars to chemical, coal and oil corporations
and the developers of destructive dams - in many cases for projects
they would have built anyway.

According to David Victor, a
leading carbon trading analyst at Stanford University in the US, as
many as two-thirds of the supposed "emission reduction" credits being
produced by the CDM from projects in developing countries are not
backed by real reductions in pollution. Those pollution cuts that have
been generated by the CDM, he argues, have often been achieved at a
stunningly high cost: billions of pounds could have been saved by
cutting the emissions through international funds, rather than through
the CDM's supposedly efficient market mechanism....

One glaring signal that many of the projects being approved by the
CDM's executive board are non-additional is that almost three-quarters
of projects were already complete at the time of approval. It would
seem clear that a project that is already built cannot need extra
income in order to be built.

LOL, yes that might be a good indicator something is amiss.  The other problem, beyond the staggering amount of outright corruption one would expect from any UN-operated enterprise, is this oddity:

Any type of technology other than nuclear power can apply for credits.
Even new coal plants, if these can be shown to be even a marginal
improvement upon existing plants, can receive offset income. A massive
4,000MW coal plant on the coast of Gujarat, India, is expected soon to
apply for CERs. The plant will spew into the atmosphere 26m tonnes of
CO2 per year for at least 25 years. It will be India's third - and the
world's 16th - largest source of CO2 emissions.

So nuclear plants, the one proven economic and scalable power technology that is free of CO2 emissions is the one technology that is excluded from the program?  But 4,000MW coal plants that can proves they are marginally more efficient than they might have been are A-OK?

Congress, Sue Thyself

This is almost beyond parody:

The House of Representatives overwhelmingly approved legislation on
Tuesday allowing the Justice Department to sue OPEC members for
limiting oil supplies and working together to set crude prices, but the
White House threatened to veto the measure.

The bill would
subject OPEC oil producers, including Saudi Arabia, Iran and Venezuela,
to the same antitrust laws that U.S. companies must follow.

The measure passed in a 324-84 vote, a big enough margin to override a presidential veto.

The
legislation also creates a Justice Department task force to
aggressively investigate gasoline price gouging and energy market
manipulation.

"This bill guarantees that oil prices will reflect
supply and demand economic rules, instead of wildly speculative and
perhaps illegal activities," said Democratic Rep. Steve Kagen of
Wisconsin, who sponsored the legislation.

I am sure, either through scheming or more likely incompetance, that OPEC countries are under-supplying their potential capacity for oil production.  But if we want to deem this a crime, who is the biggest criminal?   The US is the only country I know of that has, by statute, made illegal the development of enormous domestic reserves.  Just last week, Democracts in Congress, in fact the exact same folks sponsoring this bill, voted to continue an effective moratorium on US oil shale development.  No country in the world is doing less to develop the most promising oil reserves than is the US.  Congress, sue thyself.  I mocked this idea weeks ago when Hillary first suggested it.  If this passes, I would love to see the US counter-sued for not developing ANWR.  Or large areas of the Gulf.  Or most of the Pacific coast.  Or all of the Atlantic coast.  Or our largest-in-the-world oil shale deposits. 

Arrested for Being Creepy

I think this is about right:

More and more, it looks like the real crime of the Fundamentalist
Church of Jesus Christ of Latter Day Saints is being different and ...
well ... creepy. The FLDS has apparently been targeted for destruction because its tenets and practices rub America's increasingly intolerant soccer moms and suburban dads the wrong way.

We just can't let people live that way!

I'm as weirded out by the Persian-harem-via-How The West Was Won
ambience that clings to the FLDS as the next guy, but I want
allegations of abuse against the group to be (fancy this) based on
actual evidence, and addressed on an individual basis, rather than as
an excuse for a pogrom. That is, as weirded out as we all may be, you
prosecute the actual abusers among the oddball minorities (as well as
the bland majorities) and leave everybody else the hell alone.

Next thing you now, we'll be locking up college lacrosse players just because they are rich white guys.

Business Biorythms Just Hit A Triple Low

People who say that bad things come in threes never ran a small business.  Bad things can come in much larger, Costco-sized lots.  Such is the case today in my own little corner of the American economy.  Expect blogging to be light for a few days.  Also, I may be slow to fix the RSS problem that has been reported.  Sorry.

PS-  The big lots of bad stuff seem to come just after one was thinking "gee, its kind of quiet around here, maybe I will take a day off this week..."

More Reasons to Fear Public Employee Unions

Most all local governments have extensive programs in place for government inspection of elevators because, you know, private businesses can't be trusted to operate safe equipment.  But it turns out the least safe elevators are operated by the government itself:

New York City Transit
has spent close to $1 billion to install more than 200 new elevators
and escalators in the subway system since the early 1990s, and it plans
to spend almost that much again for dozens more machines through the
end of the next decade. It is an investment of historic dimensions,
aimed at better serving millions of riders and opening more of the
subway to the disabled.

These are the results:

¶One of every six elevators and
escalators in the subway system was out of service for more than a
month last year, according to the transit agency's data.

¶The
169 escalators in the subway averaged 68 breakdowns or repair calls
each last year, with the worst machines logging more than double that
number. And some of the least reliable escalators in the system are
also some of the newest, accumulating thousands of hours out of service
for what officials described as a litany of mechanical flaws.

¶Two-thirds of the subway elevators "” many of which travel all of 15
feet "” had at least one breakdown last year in which passengers were
trapped inside.

The whole thing is pretty depressing.  But perhaps just as depressing is the fact that the NY Times, in a quite lengthy article, never once questions why the government is in the elevator maintenance business at all.  You see, the New York City Transit system hires all of its own maintenance people, presumably because, though the article never mentions it, the public employees union insists that these functions remain in house.  OK, here is a quiz:  How many private elevator owners in New York City have their own staff repair elevators?  My guess is the answer is close to zero.  Everyone uses third party elevator equipment repair companies or operate under long-term service contracts with the manufacturer.  Why?  Well, lets see what problems NY Transit faces:

"They don't have enough competent people with the proper training,"
said Michele O'Toole, the president of J. Martin Associates, which the
transit agency hired in 2006 to evaluate its elevator operations. "It
all reflects back to qualifications, training, capabilities."...

Elevators and escalators are spread out over a far-flung system,
requiring more mechanics and slowing responses to breakdowns. There has
been little standardization of parts, so mechanics must cope with a
bewildering hodgepodge of machinery. And the machines, which operate 24
hours a day, are subject to all sorts of abuse: Elevators become
makeshift bathrooms, and escalator steps are pounded by heavily loaded
hand trucks.

Guess what?  These are all classic reasons for outsourcing.  Manhattan elevator maintenance companies are set up to handle a far-flung elevator inventory, and can more efficiently stock parts, buy special equipment, and provide specialized training than can any individual operator.   Shared external capacity can also be sized and used much more efficiently to deal with random failures -- the more elevators in a region one maintains, the better staff can be utilized across a stochastic system.

But of course, the NY Times is never going to go against any public employee union, so it takes the line that this is a good governance issue, rather than a structural issue where an individual elevator owner is always going to be less efficient than outsourcing to a large regional third party company.  It compares NY Transit to other public transit agencies, but not to other private owners of elevators.  My guess is Donald Trump owns more elevators than NY Transit - how does he handle elevator maintenance?

By the way, the article says that there are 167 elevators and 169 escalators in the system.  They also say there are 200 full-time maintenance people.  So, on average, one person spends 60% of their year on a single elevator or escalator.  Think about the elevators and escalators you ride every day.  Can you imagine someone working on it for 1200 hours a year?

And what is this in the quotes above about slow responses to breakdowns in the far-flung empire?  With 200 people for 336 devices, they could practically assign an individual repair person to each one.   I can see him now, with his toolbox, sitting on a folding chair in the back of the elevator with a box of Krispy Kremes, waiting to spring into action at the moment of failure.

Leaving the Scence of an Accident

I include this mainly because I have a funny mental image of a couple of guys crashing the plane and then wandering off to a bar for a drink:

A single-engine plane has crashed near the airport in Bagdad, a
remote community northwest of Wickenburg, but the pilot apparently
walked away and has not been found, authorities said Monday.

The wreckage of the downed plane, a Beech Model B23, was discovered
early Sunday about 100 yards south of the Bagdad Airport runway, said
Dwight D'Evelyn, a spokesman for the Yavapai County Sheriff's Office.

Php4831e9b5885fd

Comparing Phoenix to Seattle and Austin

Chad Graham of the Arizona Republic writes an article this week that begins with this headline:

Phoenix can learn economically from robust Seattle and Austin

Already, my BS antenna are deployed.  Why?  I don't know anything about Mr. Graham, but nearly every 20- or 30-something journalist would like all the world to be hip and freaky and trendy and cool like Seattle or Austin (or Boulder or San Francisco).  So they have a natural predisposition to writing a story and interpreting facts to say that Phoenix (or whatever uncool city they hail from) should do everything it can to emulate Seattle or Portland or whatever is the hip city of the moment. 

I have lived in Phoenix and Seattle and Boulder, and have done business in Portland and Austin.  And if you want to find a really great music club, Austin would be your place.  And if you are a really rich guy who wants a unique lake front home and a dock for his floatplane, Seattle would be the pick.  But if you were a middle class family trying to get the most home for your money, you would take Phoenix all the way.  And if you wanted to start a real business that makes stuff, you would be insane to do it in any of these cities except Phoenix (and perhaps Austin).  Portland and Seattle and Boulder and (more recently) Austin are what one might call rich snob - poor snob towns.  They appeal to the millionaire with the fractional ownership jet and the pierced and tattooed slacker club goer.  Which is fine, but does every city really need to be like them?

Unlike the Valley, some parts of the U.S. such as Seattle and Austin
have been only slightly affected by the national economic slowdown.

Neither area has experienced the Valley's level of falling home prices, increased foreclosure rates nor its slowed job growth.

Those regions are places that Phoenix could learn from as it charts
a future based less on housing and growth and more on competing in the
global economy.

OK, lets start with the home thing, since the article focuses A LOT on housing.  I am willing to concede that in some recent period Austin and Seattle had less of a home price drop than Phoenix.  Ignoring for a moment the absurdity of extrapolating 30 year trends from 6-12 months of data, we should look structurally at these housing markets.  It turns out that Seattle, for example, has MUCH higher median home prices than Phoenix, in large part due to structural regulatory factors that I would presume the author would like Phoenix to emulate. 

As a result, the median home price in Seattle is about $450,000 while the median in Phoenix is closer to $275,000.  In fact, the Seattle median is very close to the Phoenix 75th percentile.  [note figures do not match those in article - I could not find any two median home price numbers that were the same for a market] One comment on Seattle housing was this:

The pattern is very strong: In Seattle you have affluent, largely
single people chasing a small supply of urban housing. The result is
small household size, an exodus of families to the suburbs, and very
high housing prices in the city.

Is this really what Phoenix should emulate, just because our home prices dropped more over a 6 month period?

One year ago, the Valley's job growth ranked No. 7 among
metropolitan markets with more than 1 million workers, according to the
latest Blue Chip Job Growth Update released by the W.P. Carey School of
Business at Arizona State University.

It now ranks No. 20, while Seattle is  No. 2.

In job markets with less than 1 million workers, Austin ranks  No. 14.

So, until recently, Phoenix led both cities in job growth.  In the last year, we have fallen behind.  Can anyone on the planet tell me why the last year of data is more relevant than the previous five, or ten, when Phoenix dusted these markets?  One year of downturn and suddenly Phoenix's economy needs to be restructured by some massive government 5-year plan?

But here is the really funny part.  Let's take Seattle, the economic juggernaut with which the author is so enamored.  In 1960, Seattle had a population of about 550,000 people.  In 2000, Seattle had a population of about.... 550,000.  In the same time period Phoenix grew from 726,000 to 3.2 million.  Wow, that Seattle is a growth juggernaut.  But it is hard to get apples and oranges on MSA's and such, so here is data from a single source:  From 1990-2000, the Austin MSA added 400,000 people, Seattle MSA added 382,000 people and Phoenix added 1.01 million, more than the other two combined.  Presumably, most of these folks found work, so where are all the jobs being added?

In Phoenix, "housing-related employment is falling fast, and the
impact on the economy is extreme since the industry comprises over 15
percent of total employment . . . compared to 10 percent nationwide,"
an April Moody's Economy.com report said.

This is hilarious.  We happen to be in a housing market downturn, so Phoenix is doomed because it is overweighted towards home construction.  But did anyone visit Seattle or Austin in 2001/2002 after the tech bubble crash?  It was a bloodbath, far worse than what Phoenix is experiencing today.  This kind of analysis is so short-sighted as to be absurd. 

Maricopa County's average weekly wages increased 3.8 percent to $822
in the third quarter of 2007, according to the latest numbers available
from the U.S. Department of Labor.

Weekly wages in King County, home to Seattle, rose 8 percent to
$1,129. Wages in Travis County, home to Austin, rose to $911, a 2.7
percent jump.

Meanwhile, Arizona's average per person income ($33,029) grew by the
smallest percentage among states in 2007, according to the U.S. Bureau
of Economic Analysis.

One word for you:  immigration.  Arizona has gotten hundreds of thousands of new immigrants with relatively low skills, so they come in at the bottom of the income scale and drive median wages down.  Seattle and Austin immigration, to the extent they have it, are high-skilled and highly paid.  Does every city have to be a high-income yuppie white-Asian enclave like Seattle?  I like Arizona and its Hispanic influences, even if this immigration means the governor can't puff her chest out at the governors' conference over average wages.

The two cities have a greater percentage of employment in tech jobs,
with 9.2 percent in Austin and 8.8 in Seattle compared with 4.6 percent
in Phoenix.

Sorry, but I have never thought it a goal of government to subsidize and maximize "tech jobs."  The other 95.4% of us in Phoenix without a job statistically categorized by the government as a tech job are happy not to be subsidizing the other 4.6%.  This is the kind of effort that does nothing to help the average person, who will never have a tech job, but makes government officials feel really good about themselves.  Another way of putting it:  The author is suggesting the government single-mindedly focus on subsidizing a class of jobs that 90+% of the people in all three cities do not hold.

Postscript: For those of you who want to laugh yourself silly, you really need to read the "vision" in the sidebar of this article.  It is the most incredible collection of politically correct notions without any relationship to real value creation that I have ever seen.  I can't really do it justice, but here are some highlights:

2010

The latest housing bust finally convinces the Arizona Legislature to
fund an aggressive international-economic-development program that
invests in science, engineering, technology and higher education.

Incentives draw nutraceutical firms, which use food substances to make
products that provide health benefits, such as lycopene.
Green-technology firms partner with universities to launch companies
that turn a profit...

2035

High-paying technology jobs are clustered in three major areas from
Prescott to Phoenix to Tucson. The economy boasts an $800 billion
nutraceutical industry and the world's largest solar facility with
10,000 acres of sun power.

I bet they include no offset in their study for lost growth due to higher taxes to fund this.  And our city of 5-10 million people is going to build its economy on nutraceuticals?  We're going to have a vitamin water business that, at $800 billion, is 6% the current size of the entire US economy?  I sure hope some of the business school students who wrote this either wise up or go into academics, because if they try to walk in to a real corporate board room with this stuff they are going to get skewered.