Archive for May 2011

Book Review

Doublethink reviews a collection of dystopic short stories, and picks their favorites.

New Business Model: 1. Move To Glendale, AZ 2. Threaten to Leave 3. Collect Taxpayer Money

I have been following the story on this blog of how Glendale, Arizona has been throwing wads of taxpayer money at the Phoenix Coyotes hockey team and at any rich person who might be willing to buy the team.  The city of 225,000 citizens spent nearly $200 million on a stadium, promised to hand a buyer of the team $100 million to help with the purchase, plus hand the new buyer a stadium contract worth about $100 million over five years.  While this all plays out, Glendale paid the NHL $25 million last year to help cover the team's losses and has agreed to pay another $25 million this year.

Wow.  This is just amazing, written all in one place.  But its not just hockey that the small corporate-state suburb on Phoenix wants to subsidize.  Here is the latest recipient of largess:

Bechtel Corp., one of Glendale's largest employers, has agreed to stay until 2018 after city officials offered the company about $1 million in incentives.

By next year, the global engineering and construction company, with the city's financial help, will move from north Glendale to a new, vacant building not far from the city's sports district called the Glendale Corporate Center....

Under the agreement, Glendale would give $576,000 over the next two years to Bechtel for its costs to outfit the building shell for offices.

The incentive package also includes a waiver of $50,000 in city permit fees and a job-retention incentive of $1,250 per employee, up to $400,000. Each eligible employee must earn a salary of at least $50,000 per year.

Glendale offered a sports perk as well.

Bechtel can use the city's suites, both at Camelback Ranch Glendale and Jobing.com Arena, for free twice.

LOL, Jobing.com arena is the hockey rink the city built, so it is giving tickets from its subsidized hockey club to its subsidized engineering firm.  The article includes the usual consultant figures who reliably take money from cities to report on all the indirect benefits and revenues and economic activity that result from their subsidies.

However, these are not the first subsidies paid to Bechtel by Glendale

The corporation first came to Glendale in 2002. Bechtel moved to Talavi Corporate Center from Phoenix after Glendale promised $1 million in incentives. The staff at the time was expected to grow to 500 from 300.

Bechtel's staffing is only at 320 today, not 500, but this failure to actually grow jobs after getting subsidies for job growth is pretty typical of these deals.    My interpretation of this is that this is yet another move to get more tenants around its sports complex, to raise the stakes and apparent costs if the hockey team moves.  Glendale will cry that they can't lost the hockey team, think of all the tenants in the surrounding real estate, when it was the city itself that spent money to put all its eggs in this one basket.

The only funny part of the article is the Talavi real estate folks.  They were thrilled to gain a new tenant in 2002 due to the city's relocation subsidies, but now suddenly think such subsidies are unfair.

Bechtel's landlords at Talavi aren't happy about the move.

"We were actually a little surprised to hear Glendale was offering incentives," said Damon Elder, spokesman for Daymark Realty Advisers, which was negotiating a lease extension with Bechtel for Talavi's owners.

"We would think the city would be fair-minded with all of their corporate citizens. . . . I don't know why the city would be pitting one location against another."

For those of us who simply think of ourselves as residents of the Phoenix metropolitan area, or even broader just as Americans, we are surprised about the earlier subsidy as well, wondering why taxpayers of a small suburb are paying big bucks to move businesses back and forth a few miles across the town line.

But of course, this is not the worst example. A few years ago, Phoenix tried to spend $100 million in subsidies to move a Nordstrom and a Bloomingdales one mile and one freeway exit (out of Scottsdale).

By the way, Glendale's economic development director has made it official, we live in a corporate state:

"[government relocation incentives are] just a modern, Fortune 100 corporate expectation," Friedman said. "If you have a top-notch, world-class company in your community, your absolute goal should be to make sure they are successful and are content in your community and want to remain."

Licensing Has Nothing to Do With Consumer Protection

Yeah, I know, this is volume one hundred and something in a series, but it is such a crystal clear example of government licensing working primarily to protect incumbent competitors in an industry I have to share it.

Suppose you’re the owner of a taxicab company in a largish metropolitan area. One day you notice some taxis tooling around town—and they’re not yours. They belong to an upstart competitor. His cars are newer, his drivers are nicer, and his fares are lower. Pretty soon your profits start shrinking. What are you going to do about it?

You have a couple of choices. Option A: Invest a lot of money in new vehicles, customer-service training for your drivers, GPS systems to map faster routes and so on. A lot of expense. A lot of effort.

So you go for Option B: Invest a little money in a few politicians, who adopt a medallion law: Only licensed operators with city-issued taxi medallions may operate cabs. The oldest cab companies get first dibs on the medallions, at the lowest rates. Only a few medallions are left over for the new guy, and he can’t afford them anyway. Bingo—your competition problem is solved. The customers might not like it, but what are they going to do—walk?

Apparently this is exactly what is happening in DC

Now it’s the District of Columbia’s turn. Four members of the D.C. City Council have introduced a bill that would create a medallion system for the nation’s capital. Medallion prices would start at $250 for the most established taxi companies and, for the newer entrants, run as high as $10,000. At least initially. As time wore on, it’s likely that the price of a medallion would go up for everyone. That’s what has happened in places such as New York, where a government permission slip to drive a cab costs about $600,000. In Boston, which initially capped medallions at 1,525 in the 1930s—and more than a half-century later had added only 250 more—a medallion will cost you $400,000.

At present the District has more than 10,000 licensed taxi drivers; the proposed legislation would establish only 4,000 medallions. Needless to say, such artificially imposed scarcity also drives up prices. A study by Natwar Gandhi, the District’s chief financial officer, found that fares in cities with medallion systems are 25 percent higher than in cities with open taxi markets.

By the way, for extra points, here is a lawsuit right out of Atlas Shrugged

That story has played out in many cities across the United States, with sometimes amusing variations. A decade or so ago, Minneapolis (population 300,000-plus) allowed a grand total of 343 taxis to operate until Luis Paucar, an immigrant, filed suit. The city council decided to allow another 45 cabs. Then the existing cab companies sued, using the creative legal theory that they had a constitutional right not to face competition. (They lost.)

Our Local Enemies List. Is This Finally the End for Sheriff Joe?

Folks in other parts of the country hypothesize that their politicians may or may not have enemies lists, but these are all, frankly, wimpy initiatives when compared to our famous Sheriff Joe Arpaio and his treatment of enemies.  You see, if Sheriff Joe sees you as a political enemy, he brings you up on charges.  When he came in conflict with his bosses, he and his buddy former County attorney Andrew Thomas brought them up on racketeering charges.  When a judge failed to deliver the rulings he wanted in that case, he brought the judge up on bribery charges that fell apart even before the ink was dry (read about some of the hijinx here).

Now there is an ongoing investigation of Sheriff Joe and his department around Arpaio's attempts to get a political opponent, one of his bosses on the Board of Supervisors Joe Stapely, brought up on charges.  Or at least, be seen in the media as brought up on charges, because it is fairly clear that Arpaio was less interested with the strength of the case (which like many of his other political attacks fell apart nearly immediatley) as casting negative media attention on a political opponent.  Money quote highlighted in bold, from the Phoenix New Times which has a great history of staying on Arpaio's case but does not write very well organized articles.

About a month after the indictment, MACE [a division within Arpaio's organization] raided the offices of an associate of Stapley's, developer Conley Wolfswinkel. The claimed justification was that the Sheriff's Office was looking for evidence of additional crimes that detectives had uncovered in the disclosure-form case.

Knight [leader of MACE] had reviewed the search warrant before a raid on January 22, 2009, and believed that he had enough evidence based on testimony from Stapley's bookkeeper, Joan Stoops, to carry out the raid. Stoops told detectives that it appeared Wolfswinkel had inked an agreement to pay Stapley hundreds of thousands of dollars in a land deal when Wolfswinkel had business before the Board of Supervisors.

Knight said Sheriff Arpaio reviewed the search warrant personally — and asked Knight why he hadn't included more details about the case in the warrant. Knight, according to the report, told Arpaio that the details weren't necessary to establish probable cause, the legal term for the level of evidence needed to persuade a judge to sign a search warrant.

The report doesn't specify which details Arpaio wanted Knight to add, but it does describe how Arpaio pressed him on the issue, saying he wanted to make sure the warrant would hold up. Knight didn't buy what Arpaio was saying, believing that the sheriff only wanted the extra information so he could sensationalize the case.

"Are we writing a press release or are we writing a search warrant?" Knight said he asked the sheriff. "I just need to be clear on what we're trying to produce here."

The sheriff stared at him and said sternly: "Get the information in there," the report states. Arpaio then got up and walked out.

Knight did as he was told and included the superfluous information. He had the warrant signed and prepared his deputies for the raid on Wolfswinkel's Tempe business office. He recalled that Arpaio's right-hand man, then-Chief Deputy David Hendershott, called Knight numerous times, asking: "Are we in yet?"

Hendershott, Knight stated, told him that as soon as the search warrant was signed, Knight was to go to the nearest Kinko's and fax a copy to sheriff's headquarters.

"So we get in; we secure the place," Knight said to investigators. "I run over to the nearest Kinko's, which is three or four miles away, [and] fax the document over to him.

"By the time I get back to Conley's business, I've already got a news helicopter flying overhead."

Knight found out later that the search warrant had been handed to the media in conjunction with a press release.

A news conference was under way before Knight got back to his office.

Arpaio also tailored his public statement to emphasize the shocking revelation that Stapley and Wolfswinkel were being investigated in an alleged "bribery" scheme.

The bribery story fell apart within days, by the way, as the officers realized they had the dates wrong on the land deal such that the deal and the supposed political payoff could not be related.

Arpaio faces a myriad of charges.  His defense was that it all happened without his knowledge, which is laughable given the way he is known to run the department.   He is claiming in his PR that the whole department is created in his image but that he has no responsibility for what it does.  Like any good mobster, he apparently had a consigliere named Hendershott who he is attempting to claim now was a loan wolf rather than Arpaio's right hand man, in order to deflect accountability.

The entire article is worth  a read for Arpaio-philes and phobes alike.  It serves as a good summary of some of the worst excesses of Arpaio's reign.

Update:  By the way, does anyone feel comfortable with a police department (much less sheriff Joe) having the weapon shown in this picture.   Can one imagine any legitimate use, short of perhaps a full-blow zombie invasion?   (source)

Patriot Act Renewed

Per Julian Sanchez several days ago:

They'll let these provisions lapse right after they pass the Puppy Strangulation Act of 2011. Nobody wants to be accused of 'weakening' Patriot if another attack happens, even though there's little evidence added safeguards would seriously hamper intel gathering.

And, of course, they just did.  Increasingly the fourth amendment is joining the 2nd and the 10th in the "just kidding" category of Constitutional provisions not taken seriously.    From Al Franken to Barack Obama, Democrats who once opposed the most egregious portions of the Patriot Act now voted for its rushed renewal without even a floor debate or possibility of amendment.

Medicare and Social Security Trustee Reports

Here is some analysis of these reports. A few things I found interesting

  • I have always understood the "trust funds" for these programs were a crock, that we had spent the money in these funds years ago.  But the accounting fiction is important for a reason I did not know - when the trust fund is used up from an accounting standpoint  (vs. a cash standpoint, where it is not only already used up but never existed) in 2036 or whenever, statutory authority for spending is capped at annual tax collections, which at that point will be way, way below programmed spending levels.
  • Medicare alone is projected to grow to 6% of GDP.  wow.
  • The reality of Obamacare's promises of cost reductions is starting to appear, as already these supposed cost reductions are being discounted by folks who have accountability for getting the numbers right.

One thing to note -- Social Security actually has some shot at being repaired, because benefits are a fixed, predictable amount (as long as your actuarial tables are right).  Medicare and Medicaid are far harder, because the benefits are open ended, and every recent "fix" has tended to shift incentives to encourage rather than discourage more spending.  Note, for an example, the political pressure to eliminate the part D donut hole that actually is there to provide incentives to camp drug spending and prices.

Ditto

Stephen Carter via Glenn Reynolds

The man in the aisle seat is trying to tell me why he refuses to hire anybody. His business is successful, he says, as the 737 cruises smoothly eastward. Demand for his product is up. But he still won’t hire.

“Why not?”

“Because I don’t know how much it will cost,” he explains. “How can I hire new workers today, when I don’t know how much they will cost me tomorrow?”

He’s referring not to wages, but to regulation: He has no way of telling what new rules will go into effect when. His business, although it covers several states, operates on low margins. He can’t afford to take the chance of losing what little profit there is to the next round of regulatory changes. And so he’s hiring nobody until he has some certainty about cost.

Good News, I Hope

I have to take this with a grain of salt, because it is coming from GE, the current American poster-child for rent-seeking, particularly in attempting to be a magnet for green energy subsidies.   But since the statement can be seen as under-cutting the subsidy argument, I have to take it more seriously:

Solar power may be cheaper than electricity generated by fossil fuels and nuclear reactors within three to five years because of innovations, said Mark M. Little, the global research director for General Electric Co.

“If we can get solar at 15 cents a kilowatt-hour or lower, which I’m hopeful that we will do, you’re going to have a lot of people that are going to want to have solar at home,” Little said yesterday in an interview in Bloomberg’s Washington office.

....GE, based in Fairfield, Connecticut, announced in April that it had boosted the efficiency of thin-film solar panels to a record 12.8 percent....The cost of solar cells, the main component in standard panels, has fallen 21 percent so far this year, and the cost of solar power is now about the same as the rate utilities charge for conventional power in the sunniest parts of California, Italy and Turkey.

I am all for that.  I have always had faith that solar would make sense someday, and that we would be ranking out cheap solar conversion surfaces like carpet out of Dalton, Georgia, but every time I have priced it to date on my house, even with huge government subsidies, it has not made sense.    In Europe, it requires 50-60 cent feed in tariffs (basically a subsidy in the form of above-market electricity prices paid by the utility for solar-sourced electricity) to get solar capacity installed, so 15-cents would be great and is approaching the cost of electricity in some high cost areas.

Here in Phoenix, FirstSolar does a ton of thin film.  I have always had mixed feelings about FirstSolar.  On the one hand, they live off subsidies and would basically not be in business if it were not for huge European subsidies of various forms.  On the other, though, they have been one of the few solar companies that actively have talked for years of a development path to a cost position that does not require subsidies.

Indie Movie I Would Like to Make

I have read most of Stephen King's novels, and like many of them.  But some of my favorites were the four novels he wrote as Richard Bachman, in part because they were actually, you know, novel length rather than thousand-page monstrosities.

I have discussed in other posts that the Bachman book "the Running Man" is one of the movies I would most love to remake.  The movie was a silly farce where the lead actor (the governator) was out-acted by Richard Dawson, for God sakes.

This week while my daughter was sick I reread "the Long Walk."  Its one of those love it or hate it things -- the Amazon reviews are split between 5 star reviews and 1 star reviews.

I would love to make a movie of "the Long Walk."  It would not be that expensive to make -- the whole book takes place with a hundred teenage boys walking a couple hundred miles down a road.   Seriously, 10-12 unknown teenaged actors, 90 or so other extras, a couple of steadicams on a flatbed truck.  The crowd scenes at the end would take a lot of extras, don't know how expensive that would be, but I think a really interesting movie could be made.  I picture something ala Kirosawa, maybe even in black and white.  The concept also seems to suggest Tarantino, which reminds me of a movie called Battle Royale that is a sort of similar, but much more violent concept, which Tarantino once listed among his ten favorites.

PS-  This would also be a really cool play.  Picture a big moving conveyor belt from front to back of the stage, so the actors walk a steady pace through the whole show.

Another Problem With Campaign Finance Legislation

There used to be two Americas -- the small portion who were criminals and the large majority of law-abiding citizens.  Now there is just one America, since with the proliferation of regulations, we all are guilty of something.  If we fall out of favor, we can all be rung up on charges.

Local Conservative pundit Greg Patterson makes this observation about the looming Jon Edwards prosecution, and observes that as much as he may dislike Edwards, his prosecution is downright scary

It looks like former Presidential candidate John Edwards is about to get indicted. Edwards is an awful person who embodies the characteristics that most of us despise.  His hypocrisy and hubris together with his unbelievably boorish behavior while his wife was dying of cancer are the stuff of Greek tragedy.

However, Edwards' downfall is also a great example of how the US has so criminalized the political process that the Government can indict anyone who falls out of favor. Once it was clear that Edwards no longer enjoyed any personal political authority, prosecutors combed through his entire political history and found this charge:

Much of the investigation, however, focused on money that eventually went to keep mistress Rielle Hunter in hiding along with former campaign aide Andrew Young, who claimed paternity of Hunter's child in 2007 so that Edwards could continue his White House campaign without the affair tarnishing his reputation. Investigators have been looking at whether those funds should have been considered campaign donations since they arguably aided his presidential bid.

Really?  Someone gave Edwards a bunch of money so that he could hide his mistress...and those funds "arguably aided" his presidential bid? That means that every dime that any candidate has ever received could later be classified as a political contribution because it "arguably aided" his candidacy.

How many millions has Edwards spent defending himself from this charge?  How much time is he going to spend in jail?  How many other candidates--or contributors--can be indicted for falling out of favor?

By the way, kudos to Patterson for bringing up this point in the context of his political opposition.  All too often groups seek to establish terrible precedents in the name of counting coup on political opponents.  For example, I have been depressed at how hard certain of my fellow climate skeptics have labored to try to bring warmist Michael Mann up on criminal charges.

By the way, I disagree with the second half of Patterson's post, wherein he tries to draw a parallel between the Edwards affair and shenanigans and political payoffs around the Fiesta Bowl.  Patterson describes politicians as having been "victimized" by the Fiesta Bowl, such victimization taking the form of the politicians accepting luxurious trips to college football games and failing to do all the necessary reporting for these boondoggles.

I have a hard time seeing this as victimization.  It would take a really, really, really naive and stupid politician to credibly argue that these trips were purely fact-finding trips and that they had no idea these expenditures represented an effort of the Fiesta Bowl to woo them in return for various quid pro quo's.  Politicians should not even be considering public subsidies of college football games, particularly ones that are so incredibly lucrative to the schools and bowl organizations.  Politicians could have avoided being "victimized" by such lobbying by simply saying that their city/county/state was not going to be handing out taxpayer-funded goodies to sports teams and games.  I don't necessarily want to send these guys to jail, but calling them victims is a joke.

It is interesting to see this attitude from a Conservative.  My mother-in-law the Boston Liberal takes the same line, that the evils that result from lobbying and outright bribery are entirely the fault of private enterprises and not of the politicians themselves.  Of course, the libertarian position on this is simple -- the fault is not any particular person, but the changes in government power that have put so many chips on the table.   If the government has the power to give or take billions, to make or kill whole industries, then it is worth a lot of money for individuals to harness this power or at least to protect themselves from being gutted by those who do manipulate the power.  To this end, 19th century corruption arguments are almost quaint, where the biggest concern was politician's ability to appoint their friends as postmaster.  Reduce government's power to give and take arbitrarily, and the amount of money spent on lobbying, elections, and outright bribery will fall precipitously.

Kindle Recommendation

In the spirit of 99-cent books on Kindle, I found an author on Kindle named John Locke, who has written about 6 books about his assassin-protagonist Donovan Creed (he also wrote a western, of all things, which was also very good).  He seems to be a Kindle-only sensation.  I have not seen him other places but a while back he had all his books in the top 100 at the same time.

The books are short and an easy read.  This is not Hemingway, these are classic summer beach books, but I found him pretty enjoyable.

What Are You Doing After the Rapture? I'm Going to DisneyWorld

Apparently, certain religious prognosticators are forecasting sunny weather with a chance of rapture this Saturday.  I have decided to enjoy the beginning of the end with my daughter at DisneyWorld.  My hope is that once all the good Christians ascend in to Heaven, the lines will be a lot shorter for those of us left behind.  Besides, perhaps there will be a post-apocalyptic opportunity to play out Down and Out in the Magic Kingdom.

For a variety of reasons related in part to my dad's company's sponsorship of certain things Disney, I have been to DisneyWorld a ridiculous number of times.  My Disney reviews are here.

Israel

I don't write about the Middle East much because its a big muddle that requires a lot more knowledge than I have to comment on seriously.

I will say this about Israel, though:  I too would love to see better civil rights performance at times (just as I would like to see better performance from our own damn country) but it's interesting to hypothesize what the US would do in similar circumstances.  After watching our post-9/11 Constitutional rollback, I wonder what other extreme steps we would be taking if, say, Mexican rockets routinely landed in San Diego or Nogales or El Paso.  One does not have to go too far out on a limb to call the Israeli response "restrained," at least in comparison to what the US would do in parallel circumstances.  Not to mention our reaction if a major foreign leader came to our country and urged us to give back the Gadsden Purchase as a solution.

When Real Estate Prices Rise...

... people can seek out some pretty amazing spaces to do business.  Not sure OSHA would be hip to this.

Via Carpe Diem
Update: Substituted a video I thought was better.

Another Problem With TSA Body Scanners

I can't go anywhere without analyzing operations and workflow -- there used to be a bagel store near my house whose work flow was so awful and inefficient it almost caused me physical pain just to be in the store.  In large part I owe my marriage to operations analysis, as I started going out with my wife when I was tutoring her on cycle times and other basic concepts.

So beyond the obvious privacy and invidual rights problems, TSA screening areas have always driven me nuts because they are so inefficient.  Yesterday I was putting on my shoes and belt after another run-in with the visible hand of the state, and it gave me time to watch the full body x-ray scanners for a while.  They had been bought in sufficient quantity to replace the metal detectors one for one, but there seemed to be a problem.

While people flowed through the metal detectors, at a rate of at least 15-20 per minute, the full body scanner seemed really slow.  In fact, I sat down and timed it for a while.  The scanner was working at a rate of 3 people per minute. This was with a queue at the front end so there was no waiting time for a new person to enter when the scanner was ready.  A couple of times it did 3.5 per minute, but never did it do 4 in a minute.    This seems like a real problem -- that capacity per lane has been reduced by a factor of 5 or so from the metal detectors.  Of course, it is a bit more complicated than that, because a parallel process of scanning the luggage in the x-ray machine has to complete simultaneously, and before the new scanners the x-ray was definitely the bottleneck.  But each time I went through this week my luggage sat complete on the x-ray machine before I finished being scanned, which suggests to me that the bottleneck has shifted, and we have spent a lot of money to slow down an already time consuming process.   That is why most airports have kept their metal detectors --they need them for overflow capacity.

Here is a second issue with the scanners -- they appear to take 3 times as much manpower.  The old metal detectors required one person.  The new machines appear to require 3 -- one person is at the machine, giving instructions; a second person watches you in a sort of holding area downstream of the machine as you wait for the scan results; and third person is somewhere out of site, on a radio, presumably looking at monitors and calling in results to the second person.  No wonder the TSA loves this technology - 3 times more staffing!

Request

This is a crass request but could two of you hit the facebook like button on the right side of my home page so I can get a better URL (it takes 25). Thanks.

Blogging from the road with my ipad2, which is perhaps the greatest piece of gear ever, especially now with my portable Bluetooth keyboard. And I don't really even like apple OS that much, but this is one awesome device. As a better kindle replacement alone it Is worth the price.

Who's Your Daddy

My column this week in Forbes is on Steve Levitt's daughter test.

There are lots of things that are legal, and should stay legal, that I don’t want my daughter participating in.   I don’t let my daughter hang out at the mall without an adult or have a video game console in her room, but other parent’s make different choices.  I think prostitution should be legalized but certainly hope my daughter does not become a hooker.  On the other side of the equation, I grew up drinking modest amounts of alcohol in the home with my parents (ie wine with dinner), and feel strongly this pays benefits later in life in the form of more rational approaches to alcohol, but I am legally barred in Arizona from taking this sensible parenting approach with my kids.

Oh, and by the way, as a word of advice to Mr. Levitt:  While you may be happy to see your daughter as a future poker champion, or you may want her to have the option of an abortion, a large portion of America thinks that your daughter making these choices is roughly equivalent to shooting heroin or engaging in prostitution, and they are going to try to ban them, and maybe even put her in jail for doing so.  In your theory of government, your hopes and dreams for your daughter rely on being able to out-vote folks who have very different hopes and fears.

This flawed view of government thrives in Washington because it neatly reinforces the ego and hubris so characteristic of politicians.  It essentially calls on 535 people in Congress to substitute their judgment for that of ordinary Americans on a zillion different questions, large and small.  Because in reality, Mr. Levitt’s philosophy of government plays out not as the government banning what I think is wrong for my daughter, but what Nancy Pelosi or John Boehner think are wrong for their daughter’s.

Believe it or Not, Steroids Have an Actual Medical Use

The other day I was listening to a national sports-talk radio show and they were discussing an prominent athelete's recent injury.  They were expressing concern that the doctor who was treating the athlete (succesfully, it seemed) had treated other non-ahtlete patients with HGH and steroids.

Well, duh.  This is what has driven me crazy about the whole steroid craze.  Steroids were not invented to as sports performance enhancing drugs.  They were invented because they had a variety of medical uses, including aiding recovery from certain injuries.   Is the sports world really better off if we deny, say, Tiger Woods the injury-recovery tools that any non-athlete would have access to?

I will add here, just to tick people off and highlight yet another area where I am grossly out of step from the rest of America, that I have no particular problem with PED's in sports.  It's fine if governing bodies for whatever reason want to ban them, but its not a straight forward case to me.  These drugs have dangers, but getting our panties in a knot about people's informed choices on these dangers seems hypocritical to me as we routinely attend sports that have been demonstrated to cause, for example, major brain damage in athletes (e.g. football, hockey, boxing).

I suppose I get the comparability issue (people like records from 1900 to be comparable to those today) but to some extent this is outright hypocrisy as well.  Don't modern training techniques, like altitude sleeping chambers, equally make a mockery of comparability?  Baseball cries the most about steroids messing up the record books, then it does stuff like lower the pitching mound to help hitters and add the DH.

On the plus side, isn't there value to seeing our athletes play longer?  Wouldn't it be nice (if you are not a Red Sox fan) to see Derek Jeter play a little longer?  To see Tiger Woods return quicker from injuries?

And don't even get me started on the government's campaign to throw steroid users like Barry Bonds in jail.  As I said earlier, I don't have a particular problem if private governing bodies choose, for competitive or marketing reasons, to ban PED's and enforce that ban within their community.  But throwing Barry Bonds in jail for choice he made with his own body?

A Trillion Dollars in Job Destruction

Economists Timothy Conley and Bill Dupor have produced a new study on the trillion dollar stimulus, and reached a few fairly unambiguous conclusions.

Our benchmark point estimates suggest the Act created/saved 450 thousand government-sector jobs and destroyed/forestalled one million private sector jobs.

This is exactly the problem many of use warned against -- that while a trillion dollars of expenditures would certainly employ some people, lost in all the discussions where how many people would have been employed had that trillion dollars been left in private hands.  Seriously, the single fact that Obama refuses even to publicly acknowledge that there is an offset on the other side of this ledger is enough, all by itself, to disqualify him from the supposed status of being "really smart."

Further, I warned way back in January of 2009 I looked at the stimulus line item by line item and found very, very little of it was actually the claimed "shovel-ready infrastructure" projects.  In fact, most were just bailout payments to state and local govenrments

So do you see my point. The reason so much of this infrastructure bill can be spent in the next two years is that there is no infrastructure in it, at least in the first two years!  42% of the deficit impact in 2009/2010 is tax cuts, another 44% is in transfer payments to individuals and state governments.  1% is defense.  At least 5% seems to be just pumping up a number of budgets with no infrastructure impact (such as at Homeland Security).  And at most 6% is infrastructure and green energy.  I say at most because it is unclear if this stuff is really incremental, and much of this budget may be for planners and government departments rather than actual facilities on the ground.

As of July of that year, we could write that "90 percent has gone to assist Medicaid and to stabilize tottering state budgets.  Apparently this trend continued, as the recent study concludes

It appears that state and local government jobs were saved because ARRA funds were largely used to offset state revenue shortfalls and Medicaid increases (Fig. A) rather than directly boost private sector employment (e.g. Fig. B).

This is the real post-election payoff to the SEIU - not visits to the White House, but the sacrifice of two private jobs to save one government job.

Draft and Slavery

I have a hard time seeing how anyone can deny that drafted soldiers are slaves of the state.  They are giving their time and labor only under compulsion, and while they may be better off than ante-bellum slaves in that they may eventually get freed after their term is over, to some extent they may be worse off as their time in servitude is a) more dangerous and b) involves taking morally more questionable actions (e.g. killing people).

I have assumed that those who supported the draft either were arguing that that threats in wartime justified this awful step or they were statists that already saw all the rest of us as slaves anyway.

However, Bryan Caplan had a useful observation on this:

It's tempting to dismiss all this as doublethink, but after many years of reflection I think I finally figured out what most people are thinking.  Namely: They implicitly regard slavery not as mere involuntary servitude, but as low-status involuntary servitude.  Since most of us honor, respect, and even adore all our soldiers, conscripts have high status - and therefore can't be slaves.  From this point of view, saying "conscription is slavery" isn't righteously standing up for the rights of conscripts; it's wickedly denying them their high status.  Sigh.

This rings true to me, but offers another avenue for those of us who oppose the draft -- the draft reduces the perceived status of those who serve voluntarily, something I certainly think happened in the Vietnam War.  In a way, it is reminiscent of how the existence of affirmative action tends to undermine the perceived accomplishments of successful minorities.

This is Absurd

It is folks like this who continue to want to score the stimulus solely based on employment created by stimulus projects, without considering the fact that someone was using the money for some productive purpose before the government took or borrowed it.

David Brin at the Daily Kos via the South Bend Seven

There is nothing on Earth like the US tax code. It is an extremely complex system that nobody understands well. But it is unique among all the complex things in the world, in that it's complexity is perfectly replicated by the MATHEMATICAL MODEL of the system. Because the mathematical model is the system.

Hence, one could put the entire US tax code into a spare computer somewhere, try a myriad inputs, outputs... and tweak every parameter to see how outputs change. There are agencies who already do this, daily, in response to congressional queries. Alterations of the model must be tested under a wide range of boundary conditions (sample taxpayers.) But if you are thorough, the results of the model will be the results of the system.

Now. I'm told (by some people who know about such things) that it should be easy enough to create a program that will take the tax code and cybernetically experiment with zeroing-out dozens, hundreds of provisions while sliding others upward and then showing, on a spreadsheet, how these simplifications would affect, say, one-hundred representative types of taxpayers.

South Bend Seven have a number of pointed comments, but I will just offer the obvious:  Only half of the tax calculation is rates and formulas.  The other half is the underlying economic activity (such as income) to which the taxes are applied.  Brin's thesis falls apart for the simple reason that economic activity, and particularly income, are not variables independent of the tax code.  In fact, economic activity can be extremely sensitive to changes in the tax code.

The examples are all around us -- the 1990 luxury tax tanked high end boat sales.  The leveraged buyout craze of the 80's and housing bubble of the 00's are both arguably fed in part by the tax code's preference for debt.  The entire existence of employer-paid (rather than individual-paid) health insurance is likely a result of the tax code.  And of course there are all the supply-side and incentives effects that Kos readers likely don't accept but exist none-the-less.

Fourth Amendment No Longer a "Real" Right?

Several of the amendments in the Bill of Rights, notably the second and the tenth, are no longer treated by many folks as "real."  Just old TJ kidding around.

Over the last several years, I have worried that the Fourth Amendment is rapidly heading in the same direction.  This week has been a bad week.

First up, today's decision that if cops have some reason to think valuable evidence is being destroyed, they can bust down your door without a warrant.  Toilet flush?  Must be getting rid of drugs.  Can be seen in the window at the computer?  Must be deleting child porn.  Silence?  Must be destroying evidence really quietly.

Think I am exaggerating?  Here are the facts of the case:

It began when police in Lexington, Ky., were following a suspect who allegedly had sold crack cocaine to an informer and then walked into an apartment building. They did not see which apartment he entered, but when they smelled marijuana smoke come from one of the apartments, they wrongly assumed he had gone into that one. They pounded on the door and called "Police. Police. Police," and heard the sounds of people moving.

At this, the officers announced they were coming in, and they broke down the door. They found Hollis King smoking marijuana, and put him under arrest. They also found powder cocaine. King was convicted of drug trafficking and sentenced to 11 years in prison.

Sounds of people moving in apartment = break the door down, no warrant needed.  This is just a joke, though I must also say the drug war has already gutted any number of Constitutional protections, so its not surprising to see yet another blow to liberty in the name of rounding up anyone who might be smoking a joint.  (more here)

The other case is perhaps even more egregious, and comes from Indiana, where the state Supreme Court decided that citizens must defer to agents of the state, even when those agents are violating the law.   In particular, if a cop wants to enter your house for no reason at all without a warrant, you can't resist.

"We believe … a right to resist an unlawful police entry into a home is against public policy and is incompatible with modern Fourth Amendment jurisprudence," David said. "We also find that allowing resistance unnecessarily escalates the level of violence and therefore the risk of injuries to all parties involved without preventing the arrest."

David said a person arrested following an unlawful entry by police still can be released on bail and has plenty of opportunities to protest the illegal entry through the court system.

Escalation of violence is a two-way street.  Why is the homeowner, the innocent party, the one who is made legally responsible for such escalation?  Why isn't it the agent of the state who is responsible for any such escalation?  And while a homeowner may have plenty of opportunities to protest illegal entry after the fact (though this is debatable in real life) I would argue that the police officer had plenty of opportunities before the fact to get a freaking warrant.

Why Is Anyone Surprised?

From Fox Business

U.S. Treasury Secretary Timothy Geithner told Congress he would start tapping into federal pension funds on Monday to free up borrowing capacity as the nation hits the $14.294 trillion legal limit on its debt.

The U.S. Treasury will issue $72 billion in bonds and notes on Monday, pushing the nation right up against its borrowing cap at some point during the day, according to a Treasury official.

Geithner said he would suspend investments in two government retirement funds, which will give the U.S. Treasury $147 billion in additional borrowing capacity.

"I will be unable to invest fully" in the civil service retirement and disability fund and the government securities investment fund, he said in a letter to congressional leaders

Why does this surprise anyone?  Up to this point, government workers have enjoyed a special privilege.  All other Americans have had their retirement accounts in the Social Security system raided and replaced with IOU's, such that $0 actually still exists in these accounts.  All this does is subject government worker's pensions to the same treatment.  It is in fact telling that government employees have been a protected class on this dimension for so long.

I am sure these funds will be quickly replaced.  No such luck for folks counting on Social Security for their retirement.

Lost Everything in My Feed Reader

Google is doing some sort of consolidation of Google apps accounts with other Google accounts.  Apparently, in the process I lost almost all of my Google accounts.  This means I lost all my feeds in Google Reader and I somehow have to rebuild the list, which likely will delay blogging for a while.

Update:  I got it transferred, but it was a Kluge and all my starred posts I was saving to blog on are gone.  I will try to see if those are recoverable, but my sense is that they are not.

Update #2: OK, I was wrong.  I got all my starred items.  What I did was go into the old Google Reader account (it exists with a special temp ID) and set up the sharing to make my starred items public.  I then sent myself a link to those items, which I could then add as a feed to my new feed reader account.  So now my old starred items show up as a feed in my new reader.  I am sure the temp account will go away at some point, but I figure a way to preserve them or else at least blog on them before they are lost.

$273,000 A Second

That's how much is being spent between Chicago and Detroit to improve transit times on a money-losing passenger rail segment.

When U.S. Secretary of Transportation Ray LaHood announced (last) week that he was awarding Michigan nearly $200 million for high-speed rail, he claimed that the project would bring “trains up to speeds of 110 mph on a 235-mile section of the Chicago to Detroit corridor, reducing trip times by 30 minutes.” But Michigan’s own grant application says the $196.5 million will only increase average speeds from 60 to 64 mph – with the top speed remaining unchanged at 79 mph. That is, travelers will save a mere 12 minutes – not 30.

In short, anyone who thinks they will soon see bullet trains in Michigan has been misled.

Why the discrepancy between the claimed 110 mph-and-30 and the real 79 mpg-and-12?

Page 12 of the grant application tells the tale: After spending the $197 million, the state is applying for another grant that will require hundreds of millions more to increase speeds to 110 mph.

Together with Michigan’s senators and governor, LaHood’s press conference was an exercise in high-speed deception.

Last year, about 480,000 people rode the Chicago-Detroit trains, which are some of the biggest money-losers in the Amtrak system. Can anyone really believe that saving 1,315 people 12 minutes a day is worth $196.5 million? The state will have to spend a lot more money to have trains reach top speeds of 110 mph (which means average speeds of around 75 mph). Michigan’s 2009 Chicago-Detroit rail plan projected costs of more than $1.3 billion, of which the state has less than $400 million so far. So bringing the tracks up to 110-mph standards will cost at least $900 million more.

This doesn’t count the cost of locomotives and railcars, which the plan projects will be more than $350 million for enough trains to make 20 daily round trips. Last Monday, the federal government also gave $268.2 million for locomotives and railcars to five Midwestern states. Assuming a third of that goes to the Michigan corridor, the state still needs some $250 million more.

I sometimes get accused of having a weird bias against rail.  What I actual have is a bias against stupid spending, but for those unfamiliar with my blog, I offer this to fight the rail bias meme.