Archive for June 2009

Seen and Unseen

After business school, I spent years in corporate marketing and planning roles.  A big part of those jobs were prioritizing investment projects against limited available funds.  Perhaps it is due to this experience, but to me it seems dead obvious that shifting capital and other resources to projects businesses would not have done on their own is clearly going to result in losses to the overall economy.  It can be argued that such investments pay off in other ways, and certainly I so argued when we were discussing cleaner water and air, but the whole notion that green spending and requirements will create jobs is just a myth.

I covered this before, but here is a Spanish study on the Spanish wind programs Obama said he wished to emulate (via Carpe Diem):

1. As President Obama correctly remarked, Spain provides a reference for the establishment of government aid to renewable energy. No other country has given such broad support to the construction and production of electricity through renewable sources. The arguments for Spain's and Europe's "green jobs" schemes are the same arguments now made in the U.S., principally that massive public support would produce large numbers of green jobs. The question that this paper answers is "at what price?"

2. We find that for every renewable energy job that the State manages to finance, Spain's experience cited by President Obama as a model reveals with high confidence, by two different methods, that the U.S. should expect a loss of at least 2.2 jobs on average, or about 9 jobs lost for every 4 created, to which we have to add those jobs that non-subsidized investments with the same resources would have created.

3. The study calculates that since 2000 Spain spent €571,138 ($800,000) to create each "green job", including subsidies of more than €1 million ($1.4 million) per wind industry job. The study calculates that the programs creating those jobs also resulted in the destruction of nearly 110,500 jobs elsewhere in the economy, or 2.2 jobs destroyed for every "green job" created.

Bad Timing Awards

Today in my inbox I got a letter from "Governor Mark Sanford" with a pitch to join the Goldwater Institute (a conservative / free market think tank here in Arizona).  Oops.

Nostalgianomics

I am a little late on this, but here is the latest from Brink Lindsey, another member of the Princeton Tower Club libertarian blogger set:

Yet the return to peacetime and prosperity did not result in a shift back toward the status quo ante. The more egalitarian income structure persisted for decades. For an explanation, Krugman leans heavily on a 2007 paper by the Massachusetts Institute of Technology economists Frank Levy and Peter Temin, who argue that postwar American history has been a tale of two widely divergent systems of political economy. First came the "Treaty of Detroit," characterized by heavy unionization of industry, steeply progressive taxation, and a high minimum wage. Under that system, median wages kept pace with the economy's overall productivity growth, and incomes at the lower end of the scale grew faster than those at the top. Beginning around 1980, though, the Treaty of Detroit gave way to the free market "Washington Consensus." Tax rates on high earners fell sharply, the real value of the minimum wage declined, and private-sector unionism collapsed. As a result, most workers' incomes failed to share in overall productivity gains while the highest earners had a field day...

Krugman sees the rise of inequality as a consequence of economic regress"”in particular, the abandonment of well-designed economic institutions and healthy social norms that promoted widely shared prosperity. Such an assessment leads to the conclusion that we ought to revive the institutions and norms of Paul Krugman's boyhood, in broad spirit if not in every detail.

There is good evidence that changes in economic policies and social norms have indeed contributed to a widening of the income distribution since the 1970s. But Krugman and other practitioners of nostalgianomics are presenting a highly selective account of what the relevant policies and norms were and how they changed.

The Treaty of Detroit was built on extensive cartelization of markets, limiting competition to favor producers over consumers. The restrictions on competition were buttressed by racial prejudice, sexual discrimination, and postwar conformism, which combined to limit the choices available to workers and potential workers alike. Those illiberal social norms were finally swept aside in the cultural tumults of the 1960s and '70s. And then, in the 1970s and '80s, restraints on competition were substantially reduced as well, to the applause of economists across the ideological spectrum. At least until now.

The "treaty of Detroit" model, if it ever even existed in the first place, is merely NRA-lite, an echo of the Mussolini-style corporate state FDR tried to create before the war.  Read the whole thing - Brink is, as usual, hard to excerpt.

One thing that is seldom mentioned in discussions of income inequality is the absolute wealth of the lower income brackets.  The evidence is pretty strong that the lowest income brackets in the US do at least as well as comparable brackets in Europe (especially after you correct for immigration), which have pursued the corporate state model Krugman longs for.  Our rich are richer, but our poor are about the same, and unemployment is systematically lower here.  So the problem is, what?  Just envy?

More on income distribution and mobility here.

This Sounds Like A Really Good Plan

The largest government medical insurance program, Medicare, is threatening to nearly bankrupt the federal government with its rising costs that no one in 30 years has figured out how to manage, short of attempts at price controls (controls which are driving doctors out of the business).  Treat with extreme skepticism mystery double-secret methodologies that the Obama administration promises will cut costs 30% when no such savings have ever been achieved in Medicare.

The largest government run medical care organization, the VA, apparently provides awful service and is rife with fraud and errors due to poor accountability.

So, despite 89% of Americans reporting themselves satisfied with their medical care (one of the highest approval ratings for ... anything I have seen out of a poll) we are going to replace our current system with one run by the government.

Outstanding.

Postscript: You will often get quoted enormous numbers (often as high as 47 million) for the uninsured.  This seems to be the driving force behind the felt need for health care change.  But when someone quotes this number to you, ask for the number excluding a) college students; b) people who make over $50,000 a year who could presumably pay for their own coverage; c) illegal immigrants;  d) people transitioning between jobs and e) people already eligible for Medicare/Medicaid but don't bother to sign up until they are actually sick.  You will get a number a LOT lower, closer to 10-15 million.

If we need to do something more to help 10 million or so poor people, then lets help 10 million or so poor people.  Let's not screw up what exists for the other 290 million or so people in this country.  As I wrote before

But health care is different.  The author above is probably correct that some crappy level of terribly run state health care will probably be an improvement for some of the poor.  But what is different about many of the health care proposals on the table is that everyone, not just the poor will get this same crappy level of treatment.  It would be like a public housing program where everyone's house is torn down and every single person must move into public housing. That is universal state-run health care. Ten percent of America gets pulled up, 90% of America gets pulled down, possibly way down.

Health care reform by hatchet, axe, and saw*.

Update: From Doug Ross

The Kaiser Family Foundation, a liberal non-profit frequently quoted by the media, puts the number of uninsured Americans who do not qualify for current government programs and make less than $50,000 a year between 13.9 million and 8.2 million. That is a much smaller figure than the media report and is also subject to "the 45% rule", wherein that percentage will transition to new jobs within a four-month time-frame.

A Challenge to Defenders of the Regulatory State

To all those who think that corporations are whiny b*tches when complaining about the burden of regulations, I have a challenge -- Go out and obtain an on-sale alcohol license from the state of California.  I dare you.  And no using retired ABC employees as paid consultants, that is cheating.  You have to do it yourself.

You Better Shop Around

This is from Tori Barnett on John Stossel's blog (Stossel being yet another member of the powerful Princeton Tower Club libertarian blogging set):

As we approach ABC's Wednesday White House Health Care town meeting, I'm thinking more about how health insurance"”private or government run"”destroys the individual's incentive to shop around. People spending their own money and dealing directly with doctors is the only thing that honors individuals' different preferences and controls costs.  How can we hold costs down at all if the market isn't allowed to work?

But few people are talking about that.

The pundits write about the popularity of Medicare.  Of course it's popular.  People love getting free stuff.  But Medicare is on an unsustainable path. It is more than 30 trillion dollars in the red!

As I wrote previously:

Take purchasing a car.  When I need a new car, who determines what car I end up with?   Why, I do.  And who pays for the car and shops around for a price that makes sense in the context of the perceived value of the car?  Why, I do again.  The person who uses the car, the person who chooses the type and quality of the car, and the person who pays for the car are all the same person.

This clever procurement model of integrating the payer, the shopper, and the user all into a single individual is one we use for, well, just about every product and service we buy.  Milk, Internet service, DVD's, house painting, airline tickets "” all the same model.

OK, lets consider a model that does not work this way.  Let's say someone just rear-ended your car and, miracle of miracles, they actually have a good, solid insurance policy that owes you for your car repairs.  In this case, you will be consuming the repair services, and have the incentive to find the absolute best, cost-no-object body shop you can find to do the best, most fabulous job fixing your car, because someone else (ie the insurance company) is paying.  The insurance company has a different incentive.  They want to get off with as small a loss as possible, to protect their profitability as well as keeping prices low for future policy-holders.  They are going to want you car fixed cheap, particularly since you are probably not even their customer.  They are going to try to deliver the minimum.

No surprisingly, people tend to get ticked off in these situations, as they grind against the opposing incentives of the insurance company.  It's one reason that the insurance field is highly regulated (because nowadays people complain to their Congressman whenever they get irritated).  It's also a measure of how ineffective regulation is in really managing this friction, since despite zillions of government rules people still get pissed off.  The reason is that there is simply no good solution.   Both parties want a solution at the extreme end of a cost-value scale, neither have much of an incentive to compromise, and neither will be happy with a solution in the middle of these extreme incentives, and no amount of government fiddling with the tradeoff point is going to change this.

OK, but in this example, at the end of the day, it is just a car, and probably this is a once-in-a-lifetime event.  What if we replace "car" with "baby daughter" or "grandmother" or "your life?"  Now, as Bill Murray says, the kidding around is pretty much over.  It is a recipe for an incendiary disaster.  Which is exactly what we have in health care.

If we take these three roles - user, service quality specifyer, and payer/price shopper - there are very few places in medicine today where these three roles are united.  Further, despite the fact that the vast majority of the problems in US health care are demonstrably from this role separation, none of the plans currently being considered by Obama or Congress unify these three parties.

With my high deductible medical policy, I am actually one of the few middle/upper class folks who actually shops for health care.  And I can tell I am in the minority by the reaction I get from doctors and medical services companies, that look at me like I am from Mars when I ask for detailed pricing, or when I order less than the full and complete battery of potential tests and services based on my own judgment and price/value trade offs.  Folks in the medical profession are used to people saying "whatever, the insurance company is paying for it."

The post went on to show data for medical care expenses NOT generally covered by insurance, so that they are paid out of pocket.  Not surprisingly, these expenses are the only part of health care seeing actual real price drops:

medical-2

The Odd Bipolar World of Statism

Certainly one driver of statism is arrogance -- the technocratic belief that one's intellectual capacity and decision-making ability is superior to that of the masses, and therefore should be substituted (via authoritarian control) for that of the masses.  This was clearly the driver of statism in the early to mid-century.  Its what caused FDR to be so enamored of Mussolini-stype fascism.  A few smart people making the trains run on time.

But I am starting to wonder if there isn't a second driver of statism that comes from the opposite direction -- projecting one's own weaknesses on the rest of humanity and, assuming they share these weaknesses, using this assumption as a reason for mommy-state controls.  This latter reasoning came through in this article summary in my feed reader from the Arizona Republic:

Lamenting his first teenage cigarette, President Barack Obama ruefully admitted on Monday that he's spent his adult life fighting the habit. Then he signed the nation's toughest anti-smoking law, aiming to keep thousands of other teens from getting hooked.

If Causality is Complicated Enough, You Can Take Credit For Anything

Apparently California has passed a new law that requires land use planning to be tied to the CARB CO2 emissions limits.  Well, all of us who make our money in neighboring states will certainly be happy to have yet more Californians driven into our arms.

This effort is based in part on the claim, which I see all the time, from here, based on a Brookings Report here:

Residents of Portland emit 35 percent less carbon per capita than those of other US cities

Portland is the #1 poster child for "smart growth" style urban planning,  and so smart growth advocates have decided that Portland's low carbon footprint is due to smart growth.

Interestingly, though Brookings certainly supports smart planning, their study has moments of honesty that everyone tries to ignore.  For example, it makes points I have made over and over about the cities at the top of the electrical efficiency and low emissions lists:

The fuel mix used to generate electricity matters in residential footprints. A high-carbon fuels mix significantly penalizes the Ohio Valley and Appalachian regions, which rely heavily on coal power. Alternatively, hydro-reliant metro areas such as Seattle have substantially smaller residential footprints.

Pricing influences the electricity component of the residential footprints. Each of the 10 metro areas with the lowest per capita electricity footprints in 2005 hailed from states with higher-than-average electricity prices, including California, New York, and Hawaii. Many Southeastern metro areas, on the other hand, with high electricity consumption per capita have had historically low electricity rates.

Weather unmistakably plays a role in residential footprints. High-emitting metro areas often concentrate in climates that demand both significant cooling and heating, such as in the eastern mid-latitude states. In contrast, the 10 metro areas with the smallest per capita residential footprints are all located along the West Coast, with its milder climate.

So, let's take Portland.  It has a mild climate, it has higher than average utility prices, and its electricity is supplied in large part by zero-emission hydro plants.  Small wonder it does well on the footprint analysis.  But given all these advantages, supp0rters want to claim Portland is near the top not due to any of this stuff but due to land planning and mass transit?  In fact, transit's share of commutes in Portland has been steadily falling for years, despite the urban legends to the contrary.

But here is another reality check on the list -- Portland is #3.  #1 on the list is Honolulu, a very mild climate and certainly no poster child for anti-sprawl.  Even more telling is #2 - Los Angeles.  LA has an even lower carbon footprint than Portland.  So much for smart growth and transit ridership as the main explanation!   Even Phoenix, the most spread out non-transit-using city in the country is above average at #21 out of 100, despite having what is most certainly NOT a mild climate.   My guess is that it has something to do with that clean, carbon friendly nuclear power plant just outside of town, the largest in the US.

Postscript: This report claims that smart planning is better than a carbon tax because people don't respond to changes in gas and electricity prices.  But the fact that the lowest carbon footprints and lowest per capita electrical use areas correspond with those with the highest prices gives the lie to that proposition.

Anatomy of a Deceptive Analysis

I am just looking over a report on "Smart Growth" as the be-all end-all to carbon emissions reductions  (and everything good up to and including world peace).  I haven't read it in depth, but just skimmed it and had a few thoughts.

First and most interestingly, the entire study is about the effects of "smart growth" but I can find no definition of the term.  I have a general idea of what it means -- zoning and land use policies that prevent the physical expansion of cities and strive for increased urban population densities combined with transportion policies that defund roads and highways in favor of mass transit, biking, and walking.    But it is odd that a real scientific study of the effects of X can be conducted without making sure everyone is talking about the same X.

Second, as with most such studies, the issue of individual liberties is carefully avoided.  Smart Growth is about living in the way planners prefer, not the way you individually might prefer.  Discussing the benefits of Smart Growth without once considering the impacts of individual liberty is a bit like blithely proving that killing everyone at the age of 70 will reduce health care costs without once discussing nagging ethical issues with such a plan.

I may do a more in depth debunking of this report (and I can bet Randal O'Tool will do one) but I want to show you one example of the difference between a scientific study and advocacy marketing materials like this one.  Here is a chart from page 10 of the report.  It is trying to show that higher urban densities will help all of our personal budgets.

smart_growth

First, we can probably assume the numbers here are complete BS.  Does anyone really believe that the average family outside the central city making $50,000 or less is spending more on transportation than they are on housing?

But that is almost tangential.  The real purpose of this chart is to deal with the number 1 criticism of smart growth -- that by limiting land use and restricting growth and forcing everyone to live in the city center, then housing prices skyrocket (and, by the way, help contribute to bubbles - it is no accident that many of the counties hit hardest by the recent housing bubble collapse are in growth managed counties).

This chart is meant to refute this by saying - see, housing in the center city is not more expensive -- the average person spends just as much on housing in the city as in the suburbs.  But hopefully you see the flaw -- what do they get for that money?  It may well be that for people $35,000 a year and under, the amount they can spend on housing is capped by other expenses they have, such that 1/3 of the total is about what they have to spend.  But this does not mean that people in the center city are just as well off as people outside of it.  It is very likely the suburban folks are getting far more for their money.  After all, people are rational, and if they really are spending so much more money for transportation to live in the suburbs, there probably is a good reason.

Postscript: It would also be interesting to know what the rest of the spending pie does from urban to suburban.  My guess is that folks living in city centers making less than $35,000 are not saving a ton - so where is all that "found" money going they are supposedly not spending on transit.  Could something else be more expensive in the city than in the suburbs?  Does anyone really believe it is cheaper to live in the city center than out in the suburbs for equivilent quality of life.  Sure, there are reasons to live in the city, and for some people's preferences it represents a better quality of life.  But not a cheaper one.

Postscript #2: In fact, the best single critique of all the smart growth analysis that purports to show that people will be better off when the planners intervene is "If so, then why are they not pursuing their own rational self-interest today?"  Smart Growth folks will say it is due to lack of choice, but that is silly -- if people want it, someone is going to make money giving it to them.  The only exception might be publicly supplied goods, particularly transportation.  I am sure there is a huge demand for having an expensive rail line run from one's house to one's business with low fares subsidized by other people, but I am not sure this is a realistic good to promise.

I Warned You

In any number of posts, I warned that, based on past precedent, Presidents almost never roll back executive power, even if they promised to do so in the election campaign.  For example, I wrote on innauguration day this year:

...thoughtful people already on day 1 should have evidence that things are the same as they ever were, just with better PR.   For God sakes, as his first expenditure of political capital, Obama is pushing for a trillion dollar government spending bill that is basically one big pork-fest that might make even Ted Stevens blush, a hodge-podge of every wish-list of leftish lobbyists that has been building up for eight years.  I will be suitably thrilled if the Obama administration renounces some of the creeping executive power grabs of the last 16 years, but he has been oddly silent about this.  It seems that creeping executive power is a lot more worrisome when someone else is in power.

Radley Balko writes:

My own hunch is that presidents try to keep campaign promises that expand the government and their own power, and either back down from or are unwilling to expend much capital on promises that make government smaller and more accountable, thus limiting their own power.

Looking over PolitiFact's report card on Obama's campaign promises, that seems to be about right thus far. By my count (and some of this is certainly subjective) of the of the 31 promises the site says Obama has kept thus far, 20 in some way grow or expand the federal government. Just six make the government smaller, more transparent, or more accountable. The remaining five have no effect, or amount to a wash.

Of the six campaign promises PolitiFact says Obama has unquestionably broken, five would have limited his own power, provided tax breaks, or provided more accountability and transparency to the federal government. One was mostly symbolic (recognizing the Armenian genocide). So far, he hasn't broken a single promise that would grow or expand the government, though he has compromised on a few, and many have been stalled.

This Was My Suggestion As Well

I have proposed a similar protest effort for the next census as this:

The Washington Times reports that:

Outspoken Republican Rep. Michele Bachmann says she's so worried that information from next year's national census will be abused that she will refuse to fill out anything more than the number of people in her household.

We should all follow her lead on this. The government has no legitimate business asking about plumbing, race, and financial affairs in the census. Last census I did the same thing as Ms. Bachmann and refused to answer any but the constitutionally required information, which I took to be number of people, sex and age, since all (except now sex) apply to voting. Note that race does not, and certainly not bathroom fixtures.

The Constitution requires number of people and location to set Congressionaly districts.  Any other information is pure intrusion that the state uses generally to justify and/or manage a huge variety of coercive programs.

I am enormously inexperienced in organizing grass roots efforts and my not have the time or where-with-all to to so in the case, but this is the closest I have ever been to doing so.  My original post (linked above) garnered a lot of interest.

Waxman-Markey

Though I disagree with McArdle on the magnitude of potential warming, I think her assessment of Waxman-Markey is dead on:

But the real question, I think, is whether the low cost is a feature or a bug.  The only way a bill is going to have an impact is if it causes real financial pain to American households--enough to get them to change their behavior.  Waxman-Markey obviously is not going to do that.  And indeed, the projections of its effect on global warming are entirely negligible.

So the reason to get this mad about Waxman-Markey is either that you think it provides a framework for future action, or that you think it will persuade China and India to get on board.  The latter is, I think, entirely wishful thinking on the part of American environmentalists.  China is not going to let its citizens languish in subsistence farming because 30 years from now, some computer models say there will be some not-well-specified bad effects from high temperatures. Nor is India.  Global warming isn't even high on the list of environmental concerns they'll want to attack as they get rich; local air pollution is far more pressing.  Thinking that we're somehow going to lead them by example is like thinking that poor rural teens are going to buy electric cars because Ed Begley jr. has one.

No, I think the argument has to rest on the notion that Waxman-Markey gives us a framework to advance.  And it might.  But then again, Europe's much-vaunted system has had multiple spectacular failures, and the only reductions it has actually achieved seem to come largely from controversial offsets with large auditing problems.

Everybody Back Off. I Have A Child and I'm Not Afraid to Use It

An Australian MP brings a screaming toddler onto the floor of Parliament during a debate and is shocked when she is asked to take her kid out.  She demands a more family-friendly workplace  (there is some suggestion it was all a manufactured stunt).   The story is guaranteed to further piss off single people who already feel that they have to work extra to cover for their co-workers with kids.  I have two kids but have never expected the world to defer to me.  When I had my first kid, I had a job at McKinsey & Company that really wasn't compatible with how I wanted to raise my new child.  Rather than storm around about family friendly work places, I quit and found a job that did fit.   After all, having the kid was my choice, not theirs.

Libertarians Are Used to Bad Choices, but...

... a debate between Sheriff Joe Arpaio and Al Sharpton certainly leaves me without a side to cheer for.

The Money Hole

Via John Stossel, this is hilarious form Onion TV.  I think this has been around for a while but it could have been written for the Stimulus.

Update on Climate Chart

Cross posted from Climate Skeptic

Yesterday I called into question the interpretation of this chart from the GCCI report where the report used electrical grid outages as a proxy for severe weather frequency:

electrical-outage1

I hypothesized:

This chart screams one thing at me:  Basis change.  Somehow, the basis for the data is changing in the period.  Either reporting has been increased, or definitions have changed, or there is something about the grid that makes it more sensitive to weather, or whatever  (this is a problem in tornado charts, as improving detection technologies seem to create an upward incidence trend in smaller tornadoes where one probably does not exist).   But there is NO WAY the weather is changing this fast, and readers should treat this whole report as a pile of garbage if it is written by people who uncritically accept this chart.

I had contacted John Makins of the EIA who owns this data set yesterday, but I was too late to catch him in the office.  He was nice enough to call me today.

He said that there may be an underlying upward trend out there (particularly in thunderstorms) but that most of the increase in this chart is from improvements in data gathering.  In 1997, the EIA (and Makins himself) took over the compilation of this data, which had previously been haphazard, and made a big push to get all utilities to report as required.  They made a second change and push for reporting in 2001, and again in 2007/2008.  He told me that most of this slope is due to better reporting, and not necessarily any underlying trend.   In fact, he said there still is some under-reporting by smaller utilities he wants to improve so that the graph will likely go higher in the future.

Further, it is important to understand the nature of this data.  The vast majority of weather disturbances are not reported to the EIA.  If the disturbance or outage remains local with no impact on any of the national grids, then it does not need to be reported.  Because of this definitional issue, reported incidents can also change over time due to the nature of the national grid.  For example, as usage of the national grid changes or gets closer to capacity, local disturbances might cascade to national issues where they would not have done so 20 years ago.  Or vice versa - better grid management technologies might keep problems local that would have cascaded regionally or nationally before.  Either of these would drive trends in this data that have no relation to underlying weather patterns.

At the end of the day, this disturbance data is not a good proxy for severe weather.  And I am left wondering at this whole "peer-reviewed science" thing, where errors like this pass into publication of major reports "” an error that an amateur like myself can identify with one phone call to the guy listed by this data set on the web site.  Forget peer review, this isn't even good basic editorial control  (apparently no one who compiled the report called Makins, and he was surprised today at the number of calls he was suddenly getting).

Calling BS

Over at Climate Skeptic, I am running a series on flaws in the recently released Global Climate Change Impacts Report (pdf).  I won't repeat everything over here, and the series is likely to go on for weeks - it is a target-rich environment.

But I thought the folks over here would enjoy the following, wherein I call bullsh*t on a chart that particularly enamored Kevin Drum.

UPDATE:  I obtained more information from the EIA.  My hypothesis below is correct.   Update here.

For this next post, I skip kind of deep into the report because Kevin Drum was particularly taken with the power of this chart from page 58.

electrical-outage

I know that skepticism is a lost art in journalism, so I will forgive Mr. Drum.  But in running a business, people put all kinds of BS analyses in front of me trying to get me to spend my money one way or another.  And so for those of us for whom data analysis actually has financial consequences, it is a useful skill to be able to recognize a steaming pile of BS when one sees it.  (Update: I regret the snarky comment about Kevin Drum -- though I disagree with him a lot, he is one of the few folks on either side of the political aisle who is willing to express skepticism for studies and polls even when they support his position.  Mr. Drum has posted an update to his original post after I emailed him this information).

First, does anyone here really think that we have seen a 20-fold increase in electrical grid outages over the last 15 years but no one noticed?  Really?

Second, let's just look at some of the numbers.  Is there anyone here who thinks that if we are seeing 10-20 major outages from thunderstorms and tornadoes (the yellow bar) in the last few years, we really saw ZERO by the same definition in 1992?  And 1995?  And 1996?  Seriously?  This implies there has been something like a 20-fold increase in outages from thunderstorms and tornadoes since the early 1990's.  But tornado activity, for example, has certainly not increased since the early 1990's and has probably decreased (from the NOAA, a co-author of the report):

tornadotrend

All the other bars have the same believability problem.  Take "temperature extremes."  Anyone want to bet that is mostly cold rather than mostly hot extremes?  I don't know if that is the case, but my bet is the authors would have said "hot" if the data had been driven by "hot."  And if this is proof of global warming, then why is the damage from cold and ice increasing as fast as other severe weather causes?

This chart screams one thing at me:  Basis change. Somehow, the basis for the data is changing in the period.  Either reporting has been increased or improved, or definitions have changed, or there is something about the grid that makes it more sensitive to weather, or whatever  (this is a problem in tornado charts, as improving detection technologies appear to create an upward incidence trend in smaller tornadoes where one probably does not exist).   But there is NO WAY the weather is changing this fast, and readers should treat this whole report as a pile of garbage if it is written by people who uncritically accept this chart.

Postscript: By the way, if I want to be snarky, I should just accept this chart.  Why?  Because here is the US temperature anomaly over the same time period (using the UAH satellite data as graphed by Anthony Watt, degrees C):

usa-temp

From 1998 to today, when the electrical outage chart was shooting up, the US was actually cooling slightly!

This goes back to the reason why alarmists abandoned the "global warming" term in favor of climate change.   They can play this bait and switch, showing changes in climate (which always exist) and then blaming them on CO2.  But there is no mechanism ever proposed by anyone where CO2 can change the climate directly without going through the intermediate step of warming.  If climate is changing but we are not seeing warming, then the change can't be due to CO2. But you will never see that fact in this helpful government propaganda piece.

Classic Obama Plan: Give Them Taxpayer Money, But Not Liberty

With gays upset that Obama has aligned himself squarely behind DOMA and Don't-ask-don't-tell in the military, he has decided to pay them off rather than address their equal treatment questions:

President Barack Obama, whose gay and lesbian supporters have grown frustrated with his slow movement on their priorities, is extending benefits to same-sex partners of federal employees but stopping short of a guarantee of full health insurance, a White House official said.

The health insurance exception is particularly funny given Obama's current universal-coverage-driven health care proposals.

100 Worst Stimulus Projects

This should really get your blood boiling, from Tom Coburn's office (pdf).  I am still perusing it, but two of my favorites already:

  • $1.445 million for an Oklahoma water project, where stimulus-required procurement and other rules subsequently increased the cost of the project by $1.94 million.  So the local folks lost a net of $500,000 by taking our money.  Serves the right.
  • $800,000 for a backup runway for the now famous airport to nowhere, also known as the John Murtha airport in Johnstown.  This is critical, because if they were to lose their current runway, all three flights a day and 20 daily passengers (I am not kidding) might have to find an alternative airport.  This brings the total airport subsidy to $15,411 per annual passenger.
  • A California skate park will get a $620,000 "facelift."  Plans to refurbish the skate park in Long Beach, California, had stalled for months as local funds put towards higher priority park projects. With $620,000 in federal stimulus funding available to upgrade the skate park, the city council decided to move forward. Daniel Johnson, a skater, said, "If most of us weren't skating right now, we'd be doing some bad stuff."  Because nothing says "gateway activity to adult productivity and preparation for the job market" like a skateboard park.

Demagoguing Against Doctors Using Techniques Developed Demagoguing Oil Companies

We all know the problem with oil companies:  They restrict supply to drive up prices to earn profit margins that are nearly a third of those earned by Microsoft while simultaneously keeping prices too low and promoting addiction to oil which produces a lot of CO2 and they never want to reinvest their profits in exploring for new oil so the government needs to restrict drilling in every major prospective US region so the oil companies will be stopped from greedily drilling everywhere and destroying the environment.

Barack Obama seems to be bringing this damned-if-you-do-damned-if-you-don't criticism to the medical industry, and particularly doctors.

On the one hand, he told doctors at the AMA convention yesterday that he was not a fan of tort reform and felt that limits on malpractice cases was a disservice to those who were truly injured.

On the other hand he made this case:

Not long ago, doctors' decisions were rarely questioned. Now they are being blamed for a big part of the wasteful spending in the nation's $2.5 trillion health care system. Studies have shown that as much as 30 cents of the U.S. health care dollar may be going for tests and procedures that are of little or no value to patients.

The Obama administration has cited such findings as evidence that the system is broken. Since doctors are the ones responsible for ordering tests and procedures, health care costs cannot be brought under control unless they change their decision-making habits.

On the third hand, doctors aren't spending enough to address preventable errors:

President Obama himself in his speech cited the "100,000 deaths a year" figure as if it's reliable and well established, as did yesterday's New York Times. And of course it's a figure eagerly spread by the Litigation Lobby. But as Zachary F. Meisel and Jesse M. Pines note in Slate, it's a really, really, really soft number:

...one of the biggest headlines of all was the 1999 Institute of Medicine report To Err Is Human, which announced that up to 98,000 preventable deaths occur each year in U.S. hospitals. Since then, health care improvement organizations such as Leapfrog Group have invested copious resources in reducing preventable errors. But a key issue has been overlooked in this movement: The original estimate -- the 98,000 deaths -- may have been way off. In fact, some of the researchers who conducted the original studies used in the IOM report re-evaluated their data in 2002 and reported that had they used a different calculation method, the number of estimated deaths would have been less than 10 percent of the original. Oops.

Asian is the New Black

Via Maggie's Farm, Ward Connerly discusses the elephant in the room in college admissions -- the growing fear of Asian student domination.  As a parent with kids in a top prep school on an Ivy league trajectory, I must say I see this fear and loathing of Asian students among parents every day. "They're taking all the top spots in the schools!  My kid can't compete, they are drones that work all the time!"  You have probably heard many of the same things.  I hear folks who would never be caught dead uttering anything derogatory about African Americans say the most unbelievable stuff about Asians.

Throughout history, waves of hard working immigrants have always touched off fear and racism among folks who were already here.  The one difference is that past fears were generally a working class phenomenon -- whether it be against Irish immigrants in the mid-19th century or African Americans post Civil War or against Mexicans today.   What is new today is that, for the first time I know of, a group of recent immigrants is perceived as a competitive threat by the middle and upper class.

All this leads me to a few thoughts:

  1. It is no less stereotyping to say that Asians work too hard than to say blacks are lazy or the Irish are alcoholics
  2. We should be thrilled that our country is so open, and class barriers so low, that a group of new immigrants can immediately challenge for the positions of wealth and power.  I wrote about income mobility the other day, but could there ever be a better advertisement?  Name one other great civilization in history where new immigrants could be seen as immediately and directly competitive with the wealthy and powerful.
  3. We should be ecstatic that so many bright people want to come to America and work hard creating wealth for all of us.  After all, there is no way in a free society to create wealth without delivering value.  Do we begrudge Steve Jobs his fortune when we all have iPods now?

Do Your Care About Brackets, or People?

A lot of the lefty sites are gearing up the "poor aren't sharing in the benefits" bandwagon again.  This is usually brought out of the garage whenever someone wants to put a really progressive soak-the-successful tax plan on the table.  So get ready.

The key to parsing their argument is to understand the following distinction:  Do you care about quintiles, or individuals?  Because if you care about quintiles, then there is no doubt that the real median income of the lowest income quintile has not advanced much over the last 15-20 years.  But quintiles are not individuals, and the evidence is that individuals are still doing well, whatever bracket they begin in.  Because you see, while the average for the bottom quintile may not be much higher than the average for that bracket a decade ago, the fact is that the people in that bracket have changed.   As Mark Perry writes:

A common misperception is that the top or bottom income quintiles, or the top or bottom X% by income, are static, closed, private clubs with very little turnover - once you get into a top or bottom quintile, or a certain income percent, you stay there for life, making it difficult for people to move to a different group. But reality is very different - people move up and down the income quintiles and percentage groups throughout their careers and lives. The top or bottom 1/5/10%, just like the top or bottom quintiles, are never the same people from year to year, there is constant turnover as we move up and down the quintiles.


He quotes some stats from Jeffrey Jones and Daniel Heil:

How much income mobility exists in America? Research consistently affirms that there is substantial upward income mobility in the United States, with the lowest income earners typically showing the strongest results. A Treasury Department study of the 1996"“2005 period used IRS income tax data to discern considerable mobility: more than 55% of taxpayers moved to a different income quintile. More than half the people in the lowest fifth of earners moved to a higher quintile over this period (29% to the second, 14% to the third, 10% to the fourth, and 5% to the highest).

Moreover, there is a great deal of movement in and out of the top income groups. The Treasury data show that 57% "of households in the top 1% in 2005 were not there nine years earlier." The rich sometimes get richer, but they get poorer as well. The study also reveals that income mobility has increased, not decreased, during the past twenty years. For example, 47.3% of those in the lowest income quintile in 1987 saw their incomes increase by at least 100% by 1996. That number jumped to 53.5% from 1996 to 2005.

The Pew Economic Mobility Project tried to track actual people, and not brackets, from tax returns.  This is an imperfect science, but the only real way to look at income mobility.  They found that 90% of white children and 73% of black children whose parents were in the lowest income quartile in the base period were later to be found in higher income quartiles.  But this chart, from the same study, is really telling:

6a00d834518ccc69e201157116e822970b-800wi(click to enlarge)

That is a pretty amazing picture, marred only by something apparently bad occurring with the kids of middle class African Americans.

So how can there be so much income gain everywhere without the averages for the lower quintile increasing.  I would offer at least two explanations:

  1. Immigration. As people gain skills and seniority, they progress to higher income brackets and out of the lower quintile.  However, there is a constant stream of low-skill immigrants moving to this country to fill in the bottom quintile.  It we were to do a quintile analysis apples to apples leaving out new immigrants in the period, I guarantee you would see the median income for the lower quintile increase.  As I wrote before:

    Frequent readers will know that I am a strong supporter of open immigration....However, I am tempted to become a close-the-border proponent if the left continue to use numbers skewed by immigration to justify expansions of taxation and the welfare state.  Whether they are illegal or not, whether they should be allowed to stay or not, the fact is that tens of millions of generally poor and unskilled immigrants have entered this country over the last several decades.  These folks dominate the lower quintile of wage earners in this country, and skew all of our traditional economic indicators downwards.  Median wages appear to be stagnating?  Of course the metric looks this way "” as wages have risen, 10 million new folks have been inserted at the bottom.  If you really want to know what the current median wage is on an apples to apples basis back to 1970, take the current reported median wage and count up about 10 million spots, and that should be the number "” and it will be much higher.

    By the way, even for these immigrants, their position in the lower quintile represents upward mobility for them.  Being in the middle of the lower quintile probably is a huge improvement over where they were in their home country - almost by definition, or they would not be working so hard to get here.

  2. Safety Net. Some large portion of the bottom quintile are supported by the US government's safety net.  And there are pretty good fiscal reasons why the typical real incomes generated by that safety net have not increased over the last 20 years.  And even beyond the fiscal issues, there are incentives issues as well -- at some point, increasing how lucrative the safety net is can reduce the incentive to get off the safety net and find a job.  Just ask the Swedes.  There is a delicate balance between humanity and sustaining folks vs. killing their motivation.In some ways the left's use of the lack of lower quintile progress as an indictment of American capitalism is wildly ironic.  Basically what they are saying is that the 80% of people who support themselves through capitalist endeavor are doing progressively better but the 20% of the people supported by the government are stagnating -- and therefore we need to increase the role of government.

You Can't Have It Both Ways

I cannot believe I actually have to write this, but apparently there are a number of folks in Washington and the media for which this will be a surprise.  Specifically:  A carbon tax or a cap-and-trade bill must either greatly increase prices of fossil fuels and the products of their combustion, or else they will have no impact on CO2 emissions.   Placing a high cost on emissions, and then giving everyone with a modicum of lobbying power an exemption is not going to move the meter either.  All the absurd talk of stimulation from new green jobs not-withstanding, either a climate bill imposes huge new costs or it has no real impact on emissions.  One simply cannot get to an end point of obsoleting the entire US electrical generation and transportation infrastructures for free.

As someone who thinks the threat from Co2 is greatly exaggerated, this is why I have never worried overly much about American legislative efforts.  Congress will mandate something or other that will not have much effect and will impose a lot of cost, but politicians will stop way short of the draconian legislation that would be necessary to achieve their stated carbon goals (e.g. 80% reduction).  European politicians are way more committed than ours are to Co2 reductino, and Europe hasn't really done much at all either.  A legislative body that continues passing costs to our kids in the Social Security ponzi scheme and an administration that plans already to add 10 trillion to the national debt doesn't really care about future generations.  If they are unwilling to bear current pain for future benefits in fiscal policy, they certainly aren't going to do it in the much more uncertain arena of climate policy.

Postscript: Note that the costs can show up in other ways.  For example, if one puts carbon caps in place as well as price controls, the cost would appear in the form of massive shortages, lines, and blackouts.  If one tried to address the problem via command and control solutions, the cost appears in massive capital spending requirements that cannibalize from economic growth  (which are likely to be made all the worse given that the commanders will probably not mandate the best solutions -- in fact, given variations from individual to individual, they simply cannot mandate the best solution for everyone).

OK, I Give Up. Maybe Environmentalism is a Religion

I have generally rejected comparisons of global warming activism to religion as unproductive.  But I give up.  Apparently global warming activists are digging into the Catholic playbook and stealing shamelessly.  Not satisfied with token acts of faith (e.g. sorting the recycling), indulgences (carbon offsets), and refusing to tolerate heresy, they have now adopted meat-free days of the week, switching only the day, from Friday to Monday.   I can see the Catholic bumper sticker now --  "the Catholic Church:  Fighting Global Warming Since the Year 858".

Pretty Awsome

A 128GB flash drive.

I remember my first mass storage device - a 10MB PC add-in card.  My first thought -- I will never be able to fill that up!  Last month I finished my do-it-yourself  $1000** version of a $60,000 Kaleidescape video server (article to follow on how I did it).    My system has a 6TB capacity Raid 5 drive using 8 one TB drives (if that does not add up, it is because one of the drives is configured as a hot spare).  And the freaking thing is over 70% full already.

** This is, of course, if you treat my time as worth zero, especially for the process of ripping 400+ DVDs.