Archive for June 2010

Bureaucratic Blindness

This is a follow-up to my opinion piece in Forbes the other day.  Remember, this outcome is not somehow preventable by having "our, smarter guys" in charge -- it is an inevitable result of the information and incentives of government organizations.

Three days after the BP oil spill in the Gulf of Mexico began on April 20, the Netherlands offered the U.S. government ships equipped to handle a major spill, one much larger than the BP spill that then appeared to be underway. "Our system can handle 400 cubic metres per hour," Weird Koops, the chairman of Spill Response Group Holland, told Radio Netherlands Worldwide, giving each Dutch ship more cleanup capacity than all the ships that the U.S. was then employing in the Gulf to combat the spill....

In sharp contrast to Dutch preparedness before the fact and the Dutch instinct to dive into action once an emergency becomes apparent, witness the American reaction to the Dutch offer of help. The U.S. government responded with "Thanks but no thanks," remarked Visser, despite BP's desire to bring in the Dutch equipment and despite the no-lose nature of the Dutch offer --the Dutch government offered the use of its equipment at no charge. Even after the U.S. refused, the Dutch kept their vessels on standby, hoping the Americans would come round. By May 5, the U.S. had not come round. To the contrary, the U.S. had also turned down offers of help from 12 other governments, most of them with superior expertise and equipment --unlike the U.S., Europe has robust fleets of Oil Spill Response Vessels that sail circles around their make-shift U.S. counterparts.

Why does neither the U.S. government nor U.S. energy companies have on hand the cleanup technology available in Europe? Ironically, the superior European technology runs afoul of U.S. environmental rules. The voracious Dutch vessels, for example, continuously suck up vast quantities of oily water, extract most of the oil and then spit overboard vast quantities of nearly oil-free water. Nearly oil-free isn't good enough for the U.S. regulators, who have a standard of 15 parts per million -- if water isn't at least 99.9985% pure, it may not be returned to the Gulf of Mexico....

The Americans, overwhelmed by the catastrophic consequences of the BP spill, finally relented and took the Dutch up on their offer -- but only partly. Because the U.S. didn't want Dutch ships working the Gulf, the U.S. airlifted the Dutch equipment to the Gulf and then retrofitted it to U.S. vessels. And rather than have experienced Dutch crews immediately operate the oil-skimming equipment, to appease labour unions the U.S. postponed the clean-up operation to allow U.S. crews to be trained.

The Health Care Trojan Horse

This is what happens under state-run medicine, when your doctor becomes an agent of the government.

Currently pregnant women are asked if they smoke by midwives and GPs but the National Institute for health and Clinical Excellence (Nice) wants this to go further.

The organisation has recommended that all pregnant women should have their breath measured for carbon monoxide levels when they book in with a midwife.

This would establish which women smoke and provide an added incentive for them to quit, the guidance said.

I am sure all the women's organizations whose principled stand against abortion restrictions were based on protecting the privacy of one's body from the heavy hand of government will now rise up in protest.  Not.

As it turns out, and as I have written before, most women's groups seem to favor total intrusion of government into every facet of individual health care decision-making EXCEPT abortion.  The privacy and libertarian-sounding abortion arguments were really just slights of hand, rolled out to prevent government bans on one particular procedure, and then tucked away when the government proposes to control every other procedure.

Are "Green" Consumers Dumb Enought to Buy This? Probably

If it is one thing I have learned after reading "green" sites like this one, most greens don't seem very thoughtful about parsing green claims.  So this fairly outrageous ploy by hotels will probably work:

Guests checking into the Westin Kierland Resort and Spa or Sheraton Phoenix Downtown Hotel can do more than order breakfast or request privacy by hanging a card outside their door.

They can also decline daily housekeeping service.

The hotels are among a small but growing group who have taken their in-room "green" initiatives up a notch, adding the option of no cleaning on top of existing options to reuse towels and forego fresh sheets.

What a great idea!  Redefine green as "not doing the basic job you are paying me to do."   This is amazing chutzpah, and at some level I tip my hat to them.  Spot a market inefficiency -- in this case the incredible gullibility of the greens -- and exploit it.

Remember, Nicolai, Miles to go Before I Sleep.

Every once in a while, something occurs in the real world that will help thousands of movie audiences continue to suspend disbelief.  Today's story:  Russian sleeper agents in America.

The Last Days of the Tsars

Some really nice pre-WWI color photography from Russia.  I am a sucker for old color photos.

Jan Brewer Jumps the Shark, Slides into Outright Prejudice

On this blog, over the last couple of months, I have presented a pretty clear set of facts showing that, with the possible exception of some rural border regions beset by drug gangs, the vast majority of Arizona has experienced rapidly falling crime rates, in fact crime rates falling much faster than in the rest of the country.  The crime rates of even our key border towns has remained flat.

What to make, then, of these statements by our governor.

Gov. Jan Brewer on Friday reiterated her assertion that the majority of illegal immigrants are coming to the United States for reasons other than work, saying most are committing crimes and being used as drug mules by the cartels.

Brewer's remarks are an expansion of comments she made last week during a televised debate between the four Republican gubernatorial candidates....

In the debate, Jette [a candidate running against Brewer] said that most people who cross illegally into Arizona are "just trying to feed their families." Brewer disputed that, saying, "They're coming here, and they're bringing drugs.

And they're doing drop houses, and they're extorting people and they're terrorizing the families." The governor, who has become a national media figure since signing Senate Bill 1070 into law on April 23, went further on Friday, saying that the "majority of the illegal trespassers that are coming (into) the state of Arizona are under the direction and control of organized drug cartels."

When pressed, Brewer said that even those who do come to the United States looking for work are often ensnared by the cartels.

"They are accosted, and they become subjects of the drug cartels."

Estimates are that there are 8-12 million illegal immigrants in the US (Brewer's hispano-phobic allies would put the number much higher).  They are mostly all drug dealers and criminals?  Really?

I try really hard not to try to guess at what motivates folks I disagree with by assuming they are driven by something dark and evil, but how else in this case can one describe opinions like this so contrary to facts as anything other than prejudice against a particular ethnic group?

Just look at the actions of our governor and folks like Joe Arpaio.  If it really were the case that illegal immigrants are all criminals uninterested in legal work, then why is so much recent legislation aimed at business owners that hire illegal immigrants?  Or at day labor centers?  Why are all of Sheriff Joe's immigration sweeps raiding lawful businesses rather than, say, crack houses?  After all, if illegal immigrants are all just drug dealers not looking for real work, why spend so much time looking for them, uh, doing real work?

Postscript: If Brewer is in fact correct, then there is a dead easy solution for the illegal immigration problem -- legalize drugs.  She and I both agree that the worst criminal elements of illegal immigrants would be much less of a problem without the illegal drug trade.  The only difference is that I think that segment makes up less than 1% of the population of illegal immigrants, and she thinks its everyone.

Further, to the extent that some illegal immigrants just trying to support their families are "ensnared" by drug cartels (whatever that means) it is because of their immigration status.  Make them legal residents of the country, and no one has any particular leverage over them.

Note to Commenters: Many, many of you have disagreed with me vociferously on immigration.  Please, I would love to see reasoned comments defending Brewer, particularly with data.  In particular, please use the laws of supply and demand to explain how the majority of 8-12 million people are able to earn a living in the illegal drug trade in the southwest.  To help you out, there are about 6.6 million people in Arizona.  Based on national rates of 8% of over age 12 being users, about 500,000 of those are illegal drug users.  One estimate is that there are 500,000 illegal immigrants in Arizona.

Update: Are she and I living in the same state?

Arizona GOP Gov. Jan Brewer claimed recently that law enforcement has been finding beheaded bodies in the desert "” but local agencies say they've never encountered such a case.

"Our law enforcement agencies have found bodies in the desert either buried or just lying out there that have been beheaded," Brewer said Sunday, suggesting that the beheadings were part of increased violence along the border.

But medical examiners from six of Arizona's counties "” four of which border Mexico "” tell the Arizona Guardian that they've never encountered an immigration-related crime in which the victim's head was cut off.

"Green Jobs" Are Starting To Sound a Lot Like Those Jobs At The Museum of Science and Trucking on the Sopranos

Via Christopher Horner:

Spain's Dr. Gabriel Calzada "” the author of a damning study concluding that Spain's "green jobs" energy program has been a catastrophic economic failure "” was mailed a dismantled bomb on Tuesday by solar energy company Thermotechnic.

Says Calzada:

Before opening it, I called [Thermotechnic] to know what was inside "¦ they answered, it was their answer to my energy pieces.

Dr. Calzada contacted a terrorism expert to handle the package. The expert first performed a scan of the package, then opened it in front of a journalist, Dr. Calzada, and a private security expert.

The terrorism consultant said he had seen this before:

This time you receive unconnected pieces. Next time it can explode in your hands.

Dr. Calzada added:

[The terrorism expert] told me that this was a warning.

The bomb threat is just the latest intimidation Dr. Calzada has faced since releasing his report and following up with articles in Expansion (a Spanish paper similar to the Financial Times). A minister from Spain's Socialist government called the rector of King Juan Carlos University "” Dr. Calzada's employer "” seeking Calzada's ouster. Calzada was not fired, but he was stripped of half of his classes at the university. The school then dropped its accreditation of a summer university program with which Calzada's think tank "” Instituto Juan de Mariana "” was associated.

Additionally, the head of Spain's renewable energy association and the head of its communist trade union wrote opinion pieces in top Spanish newspapers accusing Calzada of being "unpatriotic" "” they did not charge him with being incorrect, but of undermining Spain by daring to write the report.

Building Codes and Protectionism

I have written a lot about state licensing typically being more about protecting incumbents from competition than consumer protection.  This is a story in a similar vein, where plumbers worked to stop the approval of waterless urinals because they required, well, fewer plumbers to install.  In the end, there was a compromise -- the plumbers would support waterless urinals in the code, BUT the code would also say that water still had to be piped to the urinals that don't need water.  I kid you not.

This reminds me of when railroads were switching from steam locomotives to diesel.  The switch basically obsoleted the job of the fireman, who shoveled coal and kept the fire optimized in the boiler.  Faced with extinction, the fireman's union followed a gutsy strategy -- they demanded that diesel locomotives have two firemen instead of one!  You see where this is going.  Eventually, they compromised at one, so for years, decades even, useless firemen were paid to ride around on locomotives.

Swype: Coolest Thing I Have Seen on a Phone in a While

Yesterday I put a beta version of Swype on my Android phone.  Swype is the first really new data entry paradigm I have seen in years.  To type a word, one puts their finger on the first letter and then, without lifting the finger, moves the finger across all the other letters in the word.  The path below gets the word "quick"

The software figures out what you were trying to type, and it is right, at least in my case, a tremendous amount of the time.  One does not even have to be very accurate - I kind of missed some letters and it still figured out the right word.  Even got a bunch of proper names correct.  I know this seems odd, and its a concept that is best tried rather than explained, so I downloaded the beta on my android phone and tried it.  Amazingly, unlike the old Palm shorthand and other new handheld data entry experiments, this took about zero training to start using well. I have a physical keyboard on my Droid, so I still think I can do a bit faster on that but it is close.   Those with only the virtual keyboard should give this a try.

And smug iPhone users don't have it yet.

We're All Safer Now

Via Alex Tabarrok:

New Environmental Protection Agency regulations treat spilled milk like oil, requiring farmers to build extra storage tanks and form emergency spill plans.

Local farming advocates says it's ridiculous to regulate a liquid with a small percentage of butter fat the same way as the now-infamous BP oil spill.

"It's just another, unnecessary over-regulation by the government just lacking any common sense," said Bill Robb, dairy educator for Michigan State University Extension...

The EPA regulations state that "milk typically contains a percentage of animal fat, which is a non-petroleum oil. Thus, containers storing milk are subject to the Oil Spill Prevention, Control and Countermeasure Program rule when they meet the applicability criteria..."

Awful DISCLOSE Act Passes House

No time today to comment, so I will direct you over to John Stossel who has more on this really awful piece of legislation.

Update: More in the Washington Examiner.  And here is a rare bit of honesty, where a Democratic Congressman admits the law is about keeping Republicans from being elected.  Team Coke wants to keep Team Pepsi from advertising.

Government Decision-Making in the Gulf

My first column at Forbes.com is up here (and on the opinion home page, which is kind of cool), and extends on some thoughts I have already posted on my blog about why government decisions in multi-agency task forces, such as those running the Gulf cleanup effort, seem to be made in such a stupid manner.

As most scientists know, one of the best tests of a theory is whether it makes correct predictions about future events.  Since I wrote this article several days ago, we have seen this new story which is absolutely consistent with the decision-making paradigm I describe in the article (from Q&O)

Louisiana has been busily building berms about a mile out from the coast to halt the infiltration of oil into its sensitive marshes, wetlands and prime fishing areas. This process was greatly delayed by federal red tape, and now that the state has permits in hand it's being order to stop because, according to the U.S. Fish and Wildlife Department, it's doing it wrong:

The federal government is shutting down the dredging that was being done to create protective sand berms in the Gulf of Mexico.

The berms are meant to protect the Louisiana coastline from oil. But the U.S. Fish and Wildlife Department has concerns about the dredging is being done.

Plaquemines Parish President Billy Nungesser, who was one of the most vocal advocates of the dredging plan, has sent a letter to President Barack Obama, pleading for the work to continue.

[...]

Nungesser has asked for the dredging to continue for the next seven days, the amount of time it would take to move the dredging operations two miles and out resume work.

Work is scheduled to halt at midnight Wednesday.

Pat Austin is trying to understand the federal obstruction, but finds that political reasoning is the only thing that makes sense of it all:

I'm trying to see both sides here; I'm trying to understand the "coastal scientists" who contend that the berms will "change tidal patterns" and lead to more long term erosion of the islands, but if the islands are killed off by the oil what difference does it make? To borrow from Greta Perry's analogy, if my house is on fire, what does it matter what room I try to extinguish first? It's all doing down.

Read the Forbes article -- why exactly this decision was not only possible but inevitable is discussed in detail.

Eating Animals to Save Them

Via Stossel

A restaurant in Mesa, Arizona is selling lion meat burgers. Enter the animal rights activists:

Dr. Grey Stafford with the World Wildlife Zoo says that serving a threatened species sends the wrong message. "Of all the plentiful things to eat in this country, for someone to request that or to offer that... I was rather stunned," says Stafford.

... Animal rights advocates are expected to protest outside[the restaurant].

But why?  Lions are listed as "threatened." The best way to save threatened and endangered species is to"¦eat them.

First, I just have to go there.  If they would serve lion meat burritos, I could probably get TJIC to come down and visit.

Second, here are the awesome Mitchell and Webb making the same point, towards the end of this sketch-- animals we think are tasty never seem to go extinct.

Weighing in at Four Pounds...

...is my corporate Federal and multi-state tax return.

The enterprise-killing nature of taxes isn't just the money.

Glass Houses

I thought this French socialist reaction to France's World Cup humiliation, which included the team going on strike and refusing to practice just 48 hours before their make-or-break final match, was funny:

Some opposition politicians said the players' behavior represented the selfishness fostered by the governance of President Nicolas Sarkozy, who had been called President Bling Bling for his flashy style.

"It's all about individualism, egotism, everyone for themselves, and the only way to judge human success is the check you get at the end of the month," Jérôme Cahuzac, a Socialist Party member of France's National Assembly, said in a radio interview, according to Reuters.

Certainly no French socialist ever went on strike when other people in France were counting on them.  I kindof thought the team sucked, but in total unison and solidarity.

Longest Match in Tennis History is Not Over

From the Sun

John Isner and Nicolas Mahut had been battling on court for almost TEN HOURS when the umpire eventually called time on the titanic struggle.

The first-round Wimbledon encounter - already held over from Tuesday night - will now go into a third day with the incredible scoreline 6-4 3-6 6-7 (7/9) 7-6 (7/3) 59-59.

Records tumbled as both players held their serve for an incredible 118 games in the decider before the enveloping gloom over SW19 brought a halt to proceedings.

Odd Locations

Home Sales Following Cash-For-Clunkers Trajectory

As a reminder, here is the effect of the cash-for-clunkers new car sales "stimulus."

A lot of taxpayer money was spent to line the pockets of a few lucky buyers without doing anything to change the overall trend of auto sales.

Well, it looks like with the end of the housing stimulus program, we are seeing the exact same effect:

Sales of new homes collapsed in May, sinking 33 percent to the lowest level on record as potential buyers stopped shopping for homes once they could no longer receive government tax credits.The bleak report from the Commerce Department is the first sign of how the end of federal tax credits could weigh on the nation's housing market.

The credits expired April 30. That's when a new-home buyer would have had to sign a contract to qualify.

...

New-home sales in May fell from April to a seasonally adjusted annual sales pace of 300,000, the government said Wednesday. That was the slowest sales pace on records dating back to 1963. And it's the largest monthly drop on record. Sales have now sunk 78 percent from their peak in July 2005.

Analysts were startled by the depth of the sales drop.

"We all knew there would be a housing hangover from the expiration of the tax credit," wrote Mike Larson, real estate and interest rate analyst at Weiss Research. "But this decline takes your breath away."

The Record-Keeping Tax

I offer as the irritating story of the day, this one on sales tax audits of restaurants in New York.

The state also recently started using desk audits, in which they use third-party information to scrutinize whether businesses may be making more money than they're reporting. For example, the state can look at how many pizza boxes a vendor has sold to a pizzeria and if the number of boxes is more than the number of pizzas the company said it sold, the state can look closer to find whether tax evasion is the source of the discrepancy.

"If the state went through a normal audit process and determined that we owed money, we wouldn't fight it. We're not opposed to paying taxes," said Panaro.

Instead, he said he was told all of his paperwork checked out, but he didn't meet the state's standards for keeping "adequate records." The restaurant had failed to keep every paper copy of each guest's order receipt for the entire three-year period. That opened the door for the auditor to use "indirect audit methods" to estimate what he thought the restaurant owed.

The method of estimation the state used was to observe the restaurant's sales for a day, then compare it with the same date on a previous year. The previous year's reported sales were 25 percent lower, so the auditor took that percentage and multiplied it over each day's sales of the three-year period, deciding the restaurant did enough unreported business to owe an additional $330,000 in sales tax....

Joe Giafaglione, owner of Bar Bill Tavern in East Aurora, has been audited twice in the past four years. His purchase of ground hamburger raised suspicion when it was found there were no hamburgers on the menu (it was being used as an ingredient in chili).

"It's totally ridiculous the way they come up with figures without any evidence," said Giafaglione. "They say they need 20 [documents], so you give them 19 and they say, "Ah, you don't have that? Well, now we'll have to estimate.'"š"

A similar situation occurred with our company a number of years ago on a contract where some of the work had to be done using Davis-Bacon type mandated wage rates.  These rates, for those who have never seen them, come in two parts.  They might say, for example, that the minimum for such and such a job is $12.10 per hour plus $3.07 per hour cash instead of fringe benefits for a total of $15.17.

Using these figures, we gave folks an offer letter saying you will be paid $12.10 base pay plus $3.07 fringe for a total of $15.17 an hour.  Then on the paycheck, they just got one line for their total hours times $15.17.  Well, said the Department of Labor in an audit, you are not paying them the fringe, you are just paying the base pay -- we only see one number on the pay check.  So you owe $3.07 times 20,000 or so hours, pay up.

Well, I was pretty surprised.  I said it was pretty clear I was paying the fringe - why in the heck else would I pay someone an oddball wage like $15.17 that just so happened to be equal to the sum of base plus fringe.  You can see the calculation in each offer letter.  No dice, they said, the law requires that the payments have to be broken out on the pay stub.

This was back in my younger, naive days, when I thought the "expert" auditors actually knew the law.  Now I know they are sometimes just making stuff up, but I was smart enough at the time to ask them to show me the legal requirement that these two payments be broken out on the pay stub -- show me something in writing.  Nothing was forthcoming.   My attorney later educated me that there is hierarchy of quality to what might be in writing:

This is where I began to learn about the hierarchy of labor law. As I understand it (and remember, I am not a lawyer) it is something like this, from strongest to weakest:

  1. The actual statute as written by Congress, e.g. the Fair Labor Standards Act
  2. Court rulings and precedents
  3. Approved regulations what have been through the public comment and approval process
  4. Formal DOL rulings
  5. Internal DOL guidelines and manuals
  6. Informal DOL rules of thumb

Numbers 1, 2, and 3 have a lot of legal force. Five and six may or may not "“ they represent the DOL's opinion, but that opinion has not been vetted by a regulatory hearing or court decision. These get overturned by courts all the time.

When the DOL tells you can or can't do something, they likely will say it with equal authority if it comes from 1 or 6. For example, in this case, the DOL said with total authority that the wage and fringe have to be split on the paycheck.

Anyway, I read the actual law myself.  The only mention of anything even related to this was the need for adequate record-keeping to prove we had foll0wed the rules.  I searched as far as I could through labor department regulations online and found no more detail.  So I argued that unless they could produce something different, my position was that the offer letter plus the pay stub was adequate record keeping.

Eventually, the DOL let the issue drop - petulantly, they never actually dropped the claim, just told me they were choosing not to go to court against me at that time.  Of course I am only a glutton for so much punishment, so in the future we split the payments out on the pay stub.  It creates more work doing payroll, but what is government for, after all?

PS, if its helpful, I have a three part series on my interactions with the Department of Labor beginning here.

See? We Are Securing the Border

Wow, I am sure those in Arizona who are clambering for more border support from President Obama will back off now that they hear this:

U.S. Customs and Border Protection spokesman Rob Daniels says officers at the Douglas port of entry stopped a tractor-trailer coming from Mexico for further inspection on Friday.

Officers found the tractor-trailer was loaded with papier-mache items, including 108 piñatas in the likeness of Disney characters on their way to Thornton, Colo.

Officers seized the shipment for violation of intellectual property rights.

You will be happy that national security has been protected

Assistant port Director Eli Villareal says the piñatas may seem innocent, but shipments of illegal merchandise on a national scale can undermine the U.S. economy and "is a vital element in national security.

Can I Make the Opposition Response?

Do all your sheriff's waste their time on this kind of stuff?  Sheriff Joe is cranking on the old PR machine again, this time having an Oval Office fantasy emulating the President's weekly address:

Sheriff Joe Arpaio on Monday announced plans to use a live-streaming video Web site to deliver a weekly address to the media and public.

The Web program "JMA TV-1" will stream Wednesdays at 1:30 p.m. for five to 10 minutes, depending on the subject matter, according to a statement from the Maricopa County Sheriff's Office.

Counter-Point on Arizona Crime

For a while I have been asking where the so-called immigrant-driven crime wave is in Arizona, given that crime rates have fallen much faster in AZ than in other parts of the country.

Tom Maguire argues that the overall drop in the crime rate in Arizona over the last decade or so hides a possible increase in crime rate in rural areas, which I suppose he might argue is due in part to Mexican immigrants.  Check out his data, it does in fact show an increase in the crime rate outside of MSA's (metropolitan areas) though the data is mute on causes.  One potential cause is simply mix shift -- it is clear from the enormous drop in population in these non-MSA areas that some areas classified as non-MSA in 2000 have been reclassified MSA in 2008.  So the comparison is not apples to apples, and some of the shift (or even all of it) could be the changing mix of areas in the metric.

To the extent the rural numbers are driven by immigrants, my sense it is due to the violent well-armed drug gang flavor of immigrants, a group not particularly intimidated by SB1070, as most of them are not spending their time at Home Depot in day labor recruiting areas waiting for the next Sheriff Joe roundup.

Very Awesome -- The Moocher Index

The Moocher Index.  Percent of people in the state on the public dole minus the percent below the poverty line. Click to enlarge

I am sure you are blown away with surprise at the list of states at the top.

The Line of People Waiting to Kiss Sheriff Joe's Ass Just Floors Me

Barf.

With the amount of attention Maricopa County Sheriff Joe Arpaio has brought to his 78th birthday, you might think he's a 16-year-old girl.

First he "tweeted" that he needed ideas on how to celebrate his birthday. Then he claimed his special day was "ruined" because a blind-advocacy group uninvited him to speak at their convention. And now he's lending the occasion to J.D. Hayworth for the Senate hopefuls "Biggest Best Dang Birthday Bash" -- a fundraiser for Hayworth/ birthday party for America's self-proclaimed "toughest sheriff."...

The event will be held tomorrow -- nearly a week after Joe's actual birthday -- and for a mere $35 you could celebrate Joe's big day with Arpaio and Hayworth at The Silver Spur Saloon and Eatery in Cave Creek.

Or, with the flick of a match, you could set $35 on fire -- if given the choice, we'd prefer the latter.

Hey, I Got a Writing Gig

At Forbes.com.  Just what I needed, another deadline very week.