Archive for April 2012

When the Media Loses Its Skepticism - High Speed Rail Edition

I have said for a long time that I don't really think there is a lot of outright media bias in the sense of conspiring to bury or promote certain memes.   But there are real issues with the leftish monoculture of the media losing its skepticism on certain topics.

For example, high speed rail is one of those things we are just supposed to do, from the Leftish view.  Harry Reid's justification for a high speed rail line is typical:  he wants to see  "America catch up with the rest of the world".  Everyone else has these things, so it must be some failing of ours that we don't.  For the left, the benefits of high speed rail are a given, they are part of the liturgy and not to be questioned.  Which means that it is up to outsiders to do the media's work of applying some degree of skepticism whenever a high speed rail project is proposed.

Thus we get to this article on high speed rail about a supposedly "private" rail line from LA to Las Vegas.  As is usual in the media, none of the assumptions are questioned.

Greg Pollowitz gets at some of the more obvious problems.  First, it is fairly heroic spin to call a line that currently is getting $4.9 billion in public subsidies "privately funded."  Second, he points out that, like the proposed California high speed rail line, this is a train to nowhere as well

And second of all, having grown up in Los Angeles — and having lied to my parents to drive to Vegas since the time I was 16 years old — I consider myself somewhat of an expert on the Los Angeles to Vegas drive. (CNN, Fox, MSDNC — call me!) I remember Victorville fondly as the place where we’d make our food-stop and pick up some In-N-Out burgers for the final half of the journey. And I can tell you this: There is no way anybody would ever drive through L.A.’s notorious traffic only to stop halfway and hop on a train on the other side of the El Cajon Pass and in doing so give up their personal transportation once they actually get to Vegas.

I want to reality-check their usage numbers.

DesertXpress estimates that it will carry around five million round trip passengers in the first full year of operation,with the company charging fares of around $50 for a one-way trip.

OK, right now there are about 3.7 annual air passengers between Las Vegas and the southern California airports, according to rail supporters.  It is hard to get at drivers, but the Las Vegas tourism folks believe that 25% of 36 million annual visitors to Vegas come from Southern California, so that would mean about 9 million total or about 5 million driving.

What this means is that to make this work, they are counting on more than half of all visitors from Southern California (and remember this includes San Diego) taking the train.  Is this reasonable?

  • The train is supposedly $50 (I will believe that when I see it).  Currently JetBlue flies from Burbank to Las Vegas for $56 in a flight that takes 69 minutes (vs. 84 for the train and remember that is from Victorville).   The standard rate from LAX, Burbank, or Long Beach seems to be around $74-77.
  • Airplanes leave for Las Vegas from airports all around LA and in San Diego.  Let's take a couple of locations.  Say you live near downtown LA, not because that is likely but it is relatively central and does not feel like cherry picking.  Victorville is a 84 mile 90 minute drive AT BEST, with no traffic.  The Burbank airport is a 15 mile, 18 minute drive from LA.  LAX is just a bit further.  Victorville is 82 miles and 90 minutes from Irvine and 146 miles/144 minutes from San Diego.  Both of these Southern California towns are just a few minutes from an airport with $70-ish flights to Vegas

So are drivers going to stop half way to Vegas, once they have completed the hard part of the drive, to get on a train?  Are flyers going to drive 1-2 hours further to get to the rail terminal to say $20?  Some will.  But will more than half?  No way.

Postscript:  If you really want to promote the train, forget shoveling tax money at it and pass a law that the TSA may not set up screening operations at its terminus.  That might get a few customers, though the odds this would happen, or that it would stick over time, are minuscule.

It is Supposed to be Hard

South Bend Seven helped me think through the more general point I was trying to get at in this post.  I am simply sick of the incessant whining from this administration that it's too hard to get legislation through Congress and that difficulty justifies the Administration to start unilaterally exercising legislative powers via executive decree and the stretching of numerous regulatory authorities.

But here is the deal - its supposed to be hard to add new laws and, particularly, to expand the power of the government.  Hard, but not impossible.  Even when something is ruled unconstitutional, there is a mechanism to amend the Constitution.  In fact, we have actually done it 27 times.  But nowadays we don't even want to bother.   We have Presidents of both parties that just invent new executive powers and who put pressure on the Courts to agree to broader and broader Federal powers.

I am not sure we will ever have another Constitutional Amendment in my lifetime.  Already at 41 years since the last one (not counting the odd 27th amendment) this is the longest span in history without an Amendment being passed.  We just can't be bothered to do things the right way.  Don't believe me?  Does anyone believe that if the income tax was invented today, anyone would bother with its Constitutional issues and decide an amendment is necessary.  Or even more telling, in 1917 we honestly believed a Constitutional Amendment was needed for the federal government to regulate and ban alcoholic beverages.  If that's true, where is the amendment that is required to ban marijuana, cocaine, or heroin?  We dond't bother with one, because by the time we regulated these substances we had pretty much abandoned the concept (written into the document in several places and reiterated in the 9th and 10th amendment) that the Constitution conferred enumerated powers.  Because that just made it too dang hard for politicians to exercise more and more power over us.

Try To Spot Who Has Been Left Out

Here is Kevin Drum, where he quotes from an Op/Ed about a new Southern California "Regional Transportation Plan/Sustainable Communities Strategy"

The plan includes expansion of housing near public transit by 60%....and projections of more than 4 million new jobs — with public transit within half a mile of most of them. Amanda Eaken of the Natural Resources Defense Council praised it as "the strongest transportation plan" in the history of "car-loving Southern California."

.... SCAG's new plan is born of the realization that as a region, we have to grow up, not out. That doesn't mean Hong Kong skyscrapers in Whittier and Redlands. It does mean more apartments near light-rail stations and more vibrant mixed-use areas like the ones in downtown Pasadena, Ventura and Brea. It doesn't mean wresting the car keys from suburban commuters. It does mean making jobs and housing accessible via foot, bike, bus and rail.

Here is his comment on this:

In theory, a plan like this should have almost unanimous support. Developers like it because they can put up denser buildings. Environmentalists like it because it's more sustainable. Urbanists like it because it creates more walkable communities. City governments like it because it creates a stronger tax base.

There's really only one constituency that doesn't like it much: every single person who already lives in these communities and hates the idea of dense, high-rise construction near their homes. So there's going to be fireworks. It'll be interesting to see how the NIMBY bloc gets bought off.

Can you spot which group of people whose  preferences have been left out?   He considers the preferences of planners, developers, environmentalists, urbanists, and current community residents.  That's everyone, right?

Yeah, except for the freaking people who are moving in and actually shopping for a home.  Apparently if you are looking for a place to live in California, everyone except for you has a say in what living choices you will find.  Want a suburban home on an acre of land -- you are out of luck (unless you get an existing one that is grandfathered in, but those are really, really expensive because they are what everyone really wants but no one in power in California will allow to be built).  Your chosen lifestyle has not been approved by your betters.

 

The Facebook Conundrum

Here is my business problem:

On the positive side for Facebook, it is the only platform we have tried, from static web pages to blogs to Google to whatever, where we really get a good real-time interaction going with our campground customers.  Its an easy platform for them to ask questions, provide feedback, and upload useful content about the campground (from pictures to reviews to videos).  Many of my older employees are flummoxed by even the simplest computer tasks (I have had folks it has taken days of effort to teach how to get into their corporate Gmail account) but it is relatively easy to learn how to add an update or answer a query on a Facebook page  (and by "page" I mean the corporate or business pages like this one here:  http://www.facebook.com/RockCreekCanyon, not one's individual page).

But here is the problem:  The Facebook staff changes FB's layout and user interface faster than a sugar-overloaded ADD 7-year-old gets tired of a new toy.  I swear they have no reason for some of the changes other than "we're kind of bored with the user interface staying the same more than 3 months and some junior guy coded this timeline thing so let's make him feel good and put it up".

The shifting user interface is a training nightmare for my non-computer savvy managers.  What used to be tabs across the top are now text links on the left.  The Page admin panel changes almost every time I log on.  And don't even get me started on the simply stupid dueling column format of the new pages, or the fact that useless information like number of people who liked the site in a given month take up enormous amounts of the timeline's real estate now.  Just look at the page I linked above.  For the first 2-3 scrolls, the right hand column is different data than the left column, but then suddenly it becomes an alternating home for data that at the top only showed up on the left.    I am told that I can now pin a status update to the top, which will be nice, but at the cost of losing the custom landing page we used to have.

And woe be to he who actually develops for the platform, because he may soon find out that it all became wasted effort at the next over-caffeinated random user interface change.  I just did a tiny, minor bit of coding (less than a few hours) that takes my page administrators' status updates and posts them as a news feed on our web site  (ie here for the FB page above).  I could do more interesting things but I have absolutely no confidence that, for example, the FB page RSS feed I used will still be supported tomorrow.

Warning: Crimes Against Humanity May Be Found Here

According not to some random weird dude found on a campus in California, but to the head of NASA Goddard Institute for Space Studies, I am guilty of crimes against humanity for questioning whether the world's climate system is really dominated by strong positive feedback

One of the world’s most widely respected climatologists, James Hansen, director of NASA-GISS, which focuses on the study of earth’s climate for the space agency, testified to Congress in 2008 that the CEOs of fossil fuel companies (who, according to various professional reporting have been promoting this and other misleading messages about global warming in conjunction with ideological groups trying to prevent government regulation) “knew what they were doing” and, as stated in his written testimony to Congress in 2008, were guilty of “high crimes against humanity and nature.”

Hansen tells ABC News — in a phone call from the U.K. where he’s been traveling — that he used that highly charged phrase, crime against humanity, “not only for dramatic effect, but also because it is accurate, given the enormous scale of the consequences to humanity” if manmade global warming is not somehow stopped and reversed.

“It wasn’t only aimed at the fossil fuel CEOs,” Hansen added on the phone. “This also applies to politicians who pretend the global warming is not manmade.”....

“Crimes Against Humanity” is a category of culpability that found currency in the last century as a label for such atrocities as genocide, including the Nazi Holocaust.

This is a grave accusation, laden with great emotion, but it has not been made lightly — rather with extensive study and forethought.

You have been warned.

Of Course, the Left Takes No Ownership for This

from Kevin Drum

Today, Aaron Carroll tells us the story of TriCor, aka fenofibrate, a cholesterol drug licensed by Abbott Labs in 1998. Unfortunately, TriCor's patent was due to run out in 2000 and a maker of generic drugs was all set to produce a generic version. So Abbott sued, which delayed the generic version by 30 months:

In the interim, Abbott sought and obtained FDA approval for Tricor-2. That drug was nothing more than a branded reformulation of Tricor-1.Tricor-1 came in 67-mg, 134-mg, and 200-mg capsules; Tricor-2 came in 54-mg and 160-mg tablets. No new trials involving Tricor-2 were submitted to the FDA. But Tricor-2 came out while the generic company was still waiting to make Tricor-1, and thus Tricor-2 began selling with no direct competition.

Six months later, Tricor-2 evidently accounted for 97% of all fenofibrate prescriptions. By the time the generic copies of Tricor-1 came out, no one was taking it anymore, and they couldn’t penetrate the market.

Wash, rinse, repeat. The generic companies petitioned to make generic Tricor-2. Abbott filed a patent infringement suit buying them a 30 month delay. They got to work on Tricor-3. That tablet came in 48-mg and 145-mg doses. No new studies. They got approval. Evidently, 70 days after Tricor-3 was introduced, 70% of users were switched to the new branded drug. By the time the other companies got generic Tricor-2 out, Tricor-3 had 96% of the market.

Apparently, the entire moral blame for this accrues to Abbott, though he admits maybe physicians have some culpability for never prescribing the generic.

Really?  I have no particular desire to defend serial rent-seekers like Abbott, but the farce here seems to be in the regulatory system where small changes in what is essentially the packaging size allow companies to protect a government-enforced monopoly for their product.  Given the enormous difference in earnings between a monopoly product and one with a generic competitor, it is no surprise that Abbott is going to react to these incentives and use the system as presented to it.  In fact, if it did not, its executives would be making a huge ethical lapse in failing in their fiduciary responsibilities.

If you really think this is a corporate greed problem, then why is it that Apple doesn't keep competitors out of the smartphone market by making tiny tweaks to the screen size of the iPhone.  Wait, you say, screen size changes don't act as a barrier to competition?  Of course not.  But then why do changes in capsule size for a given chemical compound?  Because of the involvement of the government.

No, the problem here is not Abbott, the problem is a broken government regulatory system.  And you can pretty much count on Drum and his allies responding to anyone who actually tries to initiate a reform by streamlining this craziness by screaming that they just want to kill people by relaxing government regulations.

Awesome

I know this is one reason ExxonMobil is hated by many, but you gotta love a CEO who is actually willing to speak his mind rather than spew the reconstituted generic platitudes that you get from most companies.  From CEO Rex Tillerson:

"If you want to live by the precautionary principle, then crawl up in a ball and live in a cave."

 

This Is How Screwed Up Our Concept of Health "Insurance" Has Become

Kevin Drum quotes favorably from Chad Terhune at the LA Times

Some insurers are chasing after much smaller customers with new plans designed to limit employer payouts for big claims using what's called stop-loss policies. This guarantees that businesses won't be responsible for anything over a certain amount per employee, perhaps as low as $10,000 or $20,000, with the rest paid by an insurer. Regulators and health-policy experts say this arrangement undercuts the notion of self-insurance since employers aren't bearing much of the risk, and it allows companies to circumvent some state insurance rules.

"This is not real self-insurance. This is clearly a sham," said Mark Hall, a professor of law and public health at Wake Forest University who has studied the small-business insurance market. "Regulators have good reason to be concerned about the potential harm to the market."

Self-insurance is attractive for many reasons, particularly the prospect of lower costs. It's exempt from state insurance regulations such as mandated benefits, granting employers the flexibility to design their own benefit package and the opportunity to reap some of the savings from employee wellness programs. A federal law, the Employee Retirement Income Security Act, or ERISA, governs self-funded plans. Some aspects of the Affordable Care Act do apply to self-insurance, such as the elimination of caps on lifetime benefits and some preventive care at no cost.

Drum agrees

Yeah, it's a scam.

In a reasonably sane world, and in all other contexts outside of health care, insurance is obtained at relatively low prices to cover only catastrophic events that would be potentially bankrupting.  Car insurance does not cover oil changes and home insurance does not cover oven repairs.  So why is it that Drum is arguing that we should ban insurance policies that only cover catastrophic losses and not routine costs?   After all, the second sentence in the first paragraph from the LA Times sure seems to define exactly what insurance should be (and is similar to my personal policy, which has a high deductible attached to a health savings account).

The problem is that when Drum and the Left use the word "health insurance" they are actually referring to a bundle of four items

  • Traditional catastrophic insurance against large, unexpected, bankrupting charges
  • Third party payment / capitation for entirely routine and expected health expenditures, from physicals to contraception
  • Crony payoffs for favored constituencies, mainly via mandated benefits rules.  This payoff may be to consumers, e.g. young women like Sandra Fluke who have the rest of us pay to maintain her sex life; or it may be to corporate cronies, who are able to get their particular device or procedure or service included in the mandated benefits, guaranteeing a large stream of customers who don't care a bit what the product or service costs because it is now paid for by a third party.
  • Social engineering, in the form of embedded incentives to promote certain favored behaviors like seeking preventative care or eating better.  And when the government is paying the bill, the policy becomes a Trojon horse for government micro-management of our lives in the name of health cost reduction.

The second item seems to be a paradigm embedded in the mind of everyone in the US today, that health plans somehow need to cover every imaginable health-related expense.  Outside of an HMO model where these expenses are managed, this is a recipe for a cost explosion.  If we all had pre-paid car policies that bought our cars for us with low deductibles, no one would be driving a seven-year-old Nova.  The third and fourth items are Trojan horses for state control and cronyism that politicians are desperate to preserve.   So it is not surprising that efforts to roll back insurance to just be, well, insurance is met with anger by would-be authoritarians.  The question is, why do we listen to them?

Highway Bait And Switch

Kevin Drum and Ezra Klein both complain that Congress is letting America's highways fall apart by not raising the gasoline tax.  They complain that current gas taxes are no longer high enough to cover costs, as the Federal highway trust fund is empty.  Apparently, Congress and the President were always blithely happy to raise the gas tax to whatever it needed to be to cover costs, and now this current Congress is departing from the historic norm:

We used to have a straightforward way to fund infrastructure in this country: the federal gas tax. In 1956, President Dwight Eisenhower raised the tax from 1.5 cents a gallon to 3 cents to help pay for the creation of the interstate highway system. In 1959, he increased it from 3 cents to 4 cents. In 1982, President Ronald Reagan raised the gas tax to 9 cents. In 1990, President George H.W. Bush raised it to 14 cents, with half of the increase going to reduce the deficit. In 1993, President Bill Clinton raised it to 18.4 cents.

In other words, from 1956 to 1993, there was a bipartisan consensus on the federal gasoline tax: Both parties agreed that it occasionally needed to be raised in order to help pay for the nation’s infrastructure. But since 2000, there has been a bipartisan consensus against raising the federal gasoline tax.

But here is what happened since 1993:  Roughly a third of highway taxes are diverted to local mass transit and other oddball non-highway projects.  Simply devoting all the highway trust fund to, you know, highways would add an effective 6-7 cents to the gas tax money without actually raising the tax.

Here is what is going on:  The Left loves mass transit projects, particularly urban rail.  Of all government transportation projects, these have by far the highest cost per passenger mile of anything we do, so diverting money to these projects reduces the bang for the buck but the Left loves these projects for social engineering reasons I will discuss in a post soon.

The Left knows that these transit projects will not stand up well in the appropriations process.  Kansas taxpayers are not going to be happy about paying for another couple miles of the LA subway system.  They will ask, rightly, why local urbanites can't pay for their own damn transit projects if these projects are so great.  But taxpayers generally support tax hikes for highways. So what does a politician on a transit mission do?  He sells the gas tax to the public on it being dedicated to highways.  Then he switches the money away from highways to transit.  This leaves highways falling apart.  So he can again go to taxpayers asking for money, ostensibly for highways, but of which a good portion will eventually be siphoned off to transit (and squirrel bridges and whatever).  Repeat.

In effect, calls for raising the gas tax are NOT to repair highways.  This is a bait and switch.  Gas taxes are sufficiently high enough to fully fund highway work if it was all applied to highway work.  Proposed increased in gas taxes are needed to pay for the continuing diversion of highway funds to egregiously expensive transit projects.  Congress is right to stop this shell game.

Food Miles Silliness and the Virtue of Prices

I have written a number of times on the silliness of food miles and the locavore movement (here and here and here).  For some reason the energy and resource intensity of foods is being judged merely on one component - transportation of the end product - which actually is only a tiny competent of food costs (and thus their resource use).  Is it really more environmentally sensitive for us Phoenicians to grow our corn in the Arizona desert, where soils are unproductive and water must be imported from hundreds of miles away, rather than have it grown in the fertile soils of Iowa and trucked in?

Someone in the media, at least in Australia, finally notices:

TWO brands of olive oil, one from Australia, the other shipped 16,000 kilometres from Italy, sit on a supermarket shelf.

Most eco-friendly shoppers would reach for the Australian oil. But despite burning less fossil fuel to get here, it may not be better for the planet.

Contrary to popular belief, ''food miles'', or the distance food has travelled before we buy it, is a poor indicator of our food's total greenhouse gas emissions, or ''carbon footprint''.

More important is the way our food is farmed and produced, and how far we drive to buy it....

It turns out that stuff like economies of scale really matter

''Local food can often have a higher carbon footprint than food from afar,'' says principal researcher Brad Ridoutt.

He says even home-grown vegetables, with ''zero food miles'', do not necessarily have a smaller carbon footprint than those bought in the supermarket.

''With my veggies, I drive to Bunnings to buy fertiliser, and I go away for the weekend and forget to water them, and in the end I only harvest a few things that I can actually eat.

''By contrast, big producers, who can invest in the latest energy-efficient, water-efficient technology, and make use of all the parts of food, can be much more efficient,'' he says.

Of course, transporting food from producer to retailer still burns fossil fuels that release greenhouse gas emissions, in turn accelerating global warming. But freight emissions are only a fraction of those released during production, meaning even imported food, sustainably produced, can have a smaller carbon footprint than local alternatives.

Even the most rudimentary reading of economics should have given greenies a clue.  In commodity products like most foods, prices tend to be driven down to a point that they reflect resources (and their relative scarcity) that went into the product.  The cheapest foods tend to be those that use the least, and least scarce, resources in production.  So buying locally grown food, which often tends to carry a price premium, should have been a flashing red light that maybe this was not the least-resource-intensive choice.

Update on the EPA's Electric Vehicle Mileage Fraud

I have written several articles (here and here) outlining why the EPA's method of giving electric cars an equivalent or eMPG is outright fraudulent.  I calculated for the average driver, for example, that the Nissan Leaf's 99 eMPG was actually closer to 36.  Why?  Well, in the EPA's methodology, the science-based Obama administration pretends the 2nd law of thermodynamics does not exist.  Specifically, they assume perfect conversion of the chemical potential energy in fossil fuels to electricity.  They also assume zero transmission losses.  To rework the calculation, I actually used a Clinton-era Department of Energy methodology called well to wheels.

So here is something I thought I would never write:  It turns out the Union of Concerned Scientists agrees with me.  Apparently they have used a similar methodology to rework electric vehicle MPGs based on the fuel mix of the power in different cities, rather than an average national fuel mix as I did it.  I am not sure how they did the analysis - did they use average fuel mix or the marginal fuel, and if the marginal fuel did they assume the marginal fuel at night or during the day?   For example, certain California cities look good with solar use but that does not do anything for typical night time car charging.

Anyway, the problem is hard and I could quibble with how they did it.  But the results are telling - everywhere they looked, even in the hydro-powered Pacific Northwest, the eMPG they got was lower than that of the EPA's.  And in many cases much lower.

If corporations were using the EPA's eMPG methodology, they would be busted by the FTC for false advertising.  It's time to fix this calculation so Fisker Karma drivers can't continue to fool themselves into thinking they are doing something positive for the environment.

Projector Reviews

I know that those of us who use projection TV at home are a tiny niche (tiny but happy!).  For those who are interested, this guy puts out the best projector reviews I have seen.  I am a big fan of the Epson line and yet again, the Epson (this time the 5010) wins in the mid-price range.  I have the previous version, and it is the ideal  projector for someone like me stuck with a bad room, meaning a non-dedicated home theater where in the daytime there is a lot of ambient light.  Very bright for daytime sports, great blacks and color in movie mode when the room is dark.

I have not tried the new wireless HDMI built into the "e" models of these new Epsons, but it should be a huge boon for projector fans.  Running signal wire to ceiling mounted projectors has always been a pain, especially as the standard has shifted about three times since I first wired my house  (composite to S-Video to component to HDMI).  But HDMI is particularly hard, since the HDMI standard was never really spec'd for long runs of wire.  It is very dicey getting a reliable high-frequency signal (ie that needed for 1080p 3D) through HDMI cables that may be more than 25 feet long.

New Outrage from the Corporate State

This is just nuts.

Across the United States more than 2,700 companies are collecting state income taxes from hundreds of thousands of workers – and are keeping the money with the states’ approval, says an eye-opening report published on Thursday.

The report from Good Jobs First, a nonprofit taxpayer watchdog organization funded by Ford, Surdna and other major foundations, identifies 16 states that let companies divert some or all of the state income taxes deducted from workers’ paychecks. None of the states requires notifying the workers, whose withholdings are treated as taxes they paid.

General Electric, Goldman Sachs, Procter & Gamble, Chrysler, Ford, General Motors and AMC Theatres enjoy deals to keep state taxes deducted from their workers’ paychecks, the report shows. Foreign companies also enjoy such arrangements, including Electrolux, Nissan, Toyota and a host of Canadian, Japanese and European banks, Good Jobs First says.

Why do state governments do this? Public records show that large companies often pay little or no state income tax in states where they have large operations, as this column has documented. Some companies get discounts on property, sales and other taxes. So how to provide even more subsidies without writing a check? Simple. Let corporations keep the state income taxes deducted from their workers’ paychecks for up to 25 years.

Kentucky, where I have operated for over 10 years, seems to be the originator of this silliness.  I have always wondered why there is not an equal protection issue with such subsidies given to a chosen few companies but not to others.

I wrote years ago about such relocation subsidies being a prisoners dilemma game:

I hope you can see the parallel to subsidizing business relocations (replace prisoner with "governor" and confess with "subsidize").  In a libertarian world where politicians all just say no to subsidizing businesses, then businesses would end up reasonably evenly distributed across the country (due to labor markets, distribution requirements, etc.) and taxpayers would not be paying any subsidies.  However, because politicians fear that their community will lose if they don’t play the subsidy game like everyone else (the equivalent of staying silent while your partner is ratting you out in prison) what we end up with is still having businesses reasonably evenly distributed across the country, but with massive subsidies in place.

To see this clearer, lets take the example of Major League Baseball (MLB).  We all know that cities and states have been massively subsidizing new baseball stadiums for billionaire team owners.  Lets for a minute say this never happened – that somehow, the mayors of the 50 largest cities got together in 1960 and made a no-stadium-subsidy pledge.  First, would MLB still exist?  Sure!  Teams like the Giants have proven that baseball can work financially in a private park, and baseball thrived for years with private parks.  OK, would baseball be in the same cities?  Well, without subsidies, baseball would be in the largest cities, like New York and LA and Chicago, which is exactly where they are now.  The odd city here or there might be different, e.g. Tampa Bay might never have gotten a team, but that would in retrospect have been a good thing.

The net effect in baseball is the same as it is in every other industry:  Relocation subsidies, when everyone is playing the game, do nothing to substantially affect the location of jobs and businesses, but rather just transfer taxpayer money to business owners and workers.

Scandal for Engaging in Legal Activity

The Secret Service prostitution scandal in Columbia is interesting.  My understanding is that prostitution is legal in the particular area where this occurred.  So in effect we have a scandal here about engaging in a legal activity.  Things that would convert this to an actual scandal in my mind:

  • The officers were on duty, or were on call in some way that there are rules about what they can be doing which they violated (in which case I would be more worried about the drinking)
  • The call girls were hired with taxpayer money  (it is only legal to give taxpayer money to corporate whores like Solyndra, not Columbian whores).  Bobby Patrino might have survived the adultery scandal if he hadn't paid her with his employer's money.

The most likely issue is one  of representation.  "You can do whatever you want on your own time, but not when you are representing us."    As in most scandals, the biggest crime will turn out to be bringing negative attention to one's employer.  With which I can sympathize.  If these bozos brought negative attention to me when they were travelling on business representing me, I'd fire them in a second.

Which gets me thinking that I could easily get sued for doing so.  I am pretty sure I don't have a rule in the employee manual that says you can be fired after getting in the papers for haggling with prostitutes.    Even though common sense says that by embarrassing the company they are putting their jobs at risk, common sense does not rule the legal world of employer law.   In my experience, the whole legal process is tilted against the employer, with the presumption being that the employer is a rapacious asshole firing people for no reason unless proven otherwise  (you are saying your employees are "at will?"  I laugh at your naivete).   The employee would just say that there was no rule against getting negative publicity for hiring prostitutes on a business trip and that their activity was entirely legal where it occurred.

Since it is entirely unlikely I will add a morality clause to our employee manual, I think I will add something about actions that bring harm or disrepute to the company.

Large Hassles and Small from the Government

I often write about the large hassles we have to deal with from the government.  Here is an example of the myriad of smaller ones:

We have our campground workers in Florida living in their RV on site.  As one of the amenities we offer them, we have a 120 gallon propane tank on each employee RV site they can use for their cooking and heating.   Unfortunately, the State of Florida has banned connecting propane tanks of this size to a "non-stationary" dwelling.  We were grandfathered for a while, but now we have to get rid of all the tanks.  Our employees can still have little 5 gallon tanks, but instead of having a truck come by once a year to fill all the large tanks, each of our employees must now drive 20 miles into town dozens of times to fill their little 5 gallon tanks.

Thanks state of Florida -- getting rid of a 120 gallon tank at the price of about a thousand extra miles of driving and two or three full man-days of extra time sure seems like a smart legislative choice to me.

Interesting Analysis of Trayvon Martin Probably Cause Affidavit

I have not really posted on Trayvon Martin (except to comment on NBC's corrupt editing of the 911 tape) because a) high-profile criminal cases don't really have the hold on me they seem to have for many other Americans**; b) I have nothing to add; c) I have a bias that would make my commentary suspect.

But since I am about to post on the case, and may in the future, I should explain the bias.  We have a problem from time to time with campground workers we call the "badge-heavy" syndrome.  They get obsessive about rooting our rules violations.  They stalk campers.  They follow people around.  The spy on campers, looking for violations or crimes to report.  The folks they pick out for such treatment are often chosen because they are somehow different from the employee.

This is just awful for customer service.   It drives me crazy.  It is the absolute first thing we discuss at every training session.  Employees who demonstrate that they have this mentality are generally shown the door as fast as possible.  Government-run recreation facilities actually have this problem much worse, because 1) they give all their park staff a law enforcement title, a badge, and a gun, which tends to just encourage this kind of over-zealous harassment and 2) it is almost impossible for them to fire someone for this type of thing (because in the government employee heirarchy of values, enforcement of and consistency with rules is far more important than customer service or visitor satisfaction).

So this is a hot button issue for me.  And my first thought in this case was that Zimmerman's actions seemed just like those of my badge-heavy employees that I frequently have to fire.  So I am not very predisposed to by sympathetic to him, so thus my bias.

Anyway, keeping with my habit in this case of commenting more on issues at the periphery rather than of the case itself, this post from Ken at Popehat (I believe a former US attorney and current defense lawyer) is quite interesting.  Here is the bottom line:

I'm in a rush, but I can't avoid commenting on the affidavit of probable cause submitted in the matter of George Zimmerman's shooting of Trayvon Martin.

It's a piece of crap....

This is not the worst affidavit I've ever seen — but it's damn close, and the decision to proceed based on it in such a high-profile case is stunning. Cynics may say that I've been spoiled by federal practice, where affidavits are on average considerably more careful and well-drafted, particularly in some districts. But if it takes a high-profile case to highlight shoddy practices in everyday cases, so be it. An affidavit like this makes a mockery of the probable cause process. There's no way that a judge reading this affidavit can make an intelligent or informed decision about the sufficiency of the evidence — even for the low hurdle of probable cause.

** footnote:  I lived in Boulder through the whole Jon Benet Ramsey case.  I believe this was like aversion therapy, the equivalent of your dad forcing you to sit in a closet and smoke three cigars to put you off smoking, which has turned me off high profile criminal cases forever.

Thanks, Joe

Maricopa County will likely settle three suits against Joe Arpaio and Andrew Thomas for about $2 million.  This is on top of nearly $1.5 million in defense costs the County has already incurred in the cases.   Apparently, they consider themselves lucky to be getting off that cheap.

House Flipping Commercials? Already?

Today on the radio I heard a commercial for a company promising to teach me the exciting art of flipping houses.  I could buy and resell houses up to three at a time in less than 30 days.

I guess I thought it would take a bit longer for this nuttiness to come back.  I do know some smart people who are buying undervalued houses, putting a bit of money in them, and putting them on the rental market.  Converting owner-occupied homes at the bottom of the market to rental properties makes sense to me, particularly since the ones I know are doing it with all equity.

However, I presume the folks tuning into the radio don't have that much equity, and anyway they were explicitly using the word "flipping" in the commercial rather than talking about rental income.  I wonder who is lending on this stuff?  I tried to refi my mortgage about 6 months ago on a 40% LTV but as a self-employed person it was a pain in the ass.  Who's financing house flipping?

(yeah, I know, the answer probably is "all of us, via Fannie and Freddi or some other dumb government program).

Workers Comp. and Unemployment

Breaking news from California:

The Workers' Compensation Insurance Rating Bureau (WCIRB) made it official and submitted a mid-year filing for a 9.1% increase in the pure premium advisory rate that Insurance Commissioner Dave Jones approved less than six months ago. The proposed July 1 increase follows the 37% increase that Jones approved for January 1 that was hidden by the change in benchmarks for pure premium rates that was made at his request....

The Bureau insists that an increase of this magnitude is necessary to combat the continued deterioration in the claims experience, as well as an uptick in claim frequency in the 2010 accident year. Much of the increase will also go to pay for the higher loss adjustment expenses carriers are incurring fighting liens and litigating permanent disability claims. Projected ALAE costs are up to $11,403 per indemnity claim for the 2011 accident year compared to $10,698 the year before.

A 9.1% increase a half year after a 37% increase is just crazy.  This tends to confirm three issues I have written about before:

  1. People are filing workers comp claims as a substitute for or a supplement to unemployment.  Our company has seen a significant increase in people "coincidentally" suffering an injury on one of the last few days, and particularly the very last day, before they are to be laid off.  Only such fraud explains an increase in claims when economic activity is way down, particularly when more dangerous professions like construction employment fell much more than office employment in the recession.  We have also seen, by the way, an increase in frivolous labor lawsuits in CA coincident with the economic decline.  A year ago I had an employee in CA tell me that she had attended a brainstorming session the night before among several of my ex-employees trying to generate ideas for ways to sue our company.  I can't wait for an improvement in the economy when the returns of working are higher than the returns of brainstorming ways to extract money from our company via the legal system.
  2. California in general does a bad job of policing workers comp. fraud.  Woe to the employer that actually attempts to question an outrageously suspicious claim.  Last time I tried to do so in CA I got slapped with a lawsuit.
  3. All states do a terrible job policing permanent disability claims.  I hire a lot of older workers.  I can't tell you how many people show up at my door trying to be paid under the table because they don't want to endanger their permanent disability by having a record of getting paid for doing very physical outdoor work for us.  They assure me they are 100% capable to do heavy physical labor.  Since I don't pay anyone off the books, they end up finding work elsewhere.   Many of you may not believe such people exist, but I have met a number of folks who consider getting a permanent disability, or at least something a doctor will testify is a permanent disability, the equivalent of hitting the lotto.  I have even been sued by a woman for submitting testimony to the social security administration that might have harmed her chances of getting a permanent disability ruling.  The lawsuit stated that if she was denied the disability payment after I testified that I had seen no evidence of any limitations in what she could do on the job,  that I should be liable for paying her the lifetime amount she would have gotten.  So I wimped out and withdrew my testimony and let the taxpayers pay her rather than farting around with a lawsuit.

Andrew Thomas Disbarred, but Only Because His Prosecutorial Abuse Was Against Elected Officials

The good news:  Andrew Thomas was disbarred, a fate he richly deserved for his amazing prosecutorial abuses, for example bringing fake RICO and bribery charges against a judge to force him to recuse himself from another case in which he was likely to rule against Thomas.  Some of my many articles on Thomas are here.

But here is what depresses me:  I believe he was disbarred only because his prosecutorial over-reach and abuse was aimed at public officials.  Similar or worse abuses against private parties are seldom if ever punished.   This is lawyers and public officials defending their own.  When I see this much concern aimed at abuses of private individuals, I will be more likely to cheer.

Update:  I am a terrible editor, but I am sure I did not type "Proprietorial" rather than "Prosecutorial" in the original title.  I think I have some kind of weird auto-correct problem going on.  Though until now I did not know "proprietorial" was a word.

Some Potential Good News on Solar

This is terrific, if true.  My fear, of course, is they are getting subsidized through a back door somewhere, but if they really think they can make subsidy-free solar work financially, that's awesome:

Two German solar energy developers are planning to build photovoltaic plants in southern Spain that will earn a return without government subsidies.

Wuerth Solar GmbH & Co. intends to build a 287-megawatt plant in the Murcia area for 277 million euros ($363 million), according to the regional authority. Gehrlicher Solar AG said it plans to develop a 250-megawatt solar park in the Extremadura region for about 250 million euros.

The projects, about three times larger than any European solar plant, may be the first that don’t rely on feed-in tariffs and compete with wholesale power prices. All plants in the region so far depend on fixed premium rates for solar power, which can be several times higher than wholesale prices.

Spain suspended the tariffs on Jan. 27 as part of government austerity measures, threatening the survival of the industry. Tariffs for large-scale solar were set at 121 euros per megawatt-hour. Developers now look to build plants without this support, helped by falling equipment prices.

One of the Worst Abuses I Have Read About In A While

I can't possibly excerpt this story of the jailing and torture of a woman for buying a box of Sudafed.  Read it all and get totally pissed off.  It makes me want to go to law school and pass the bar just so I can represent this woman pro bono.

A Terrible Idea

I am sure that prosecuting Jon Edwards is a heck of a lot of fun for Republicans, but it is an enormous mistake.  Yes, the guy is a poster child for the hypocritical self-serving jackass that defines exactly whey we hate politicians.  But setting a legal precedent for defining campaign spending subject to crazy election laws more broadly is a terrible idea.  Already, there are prosecutors who, mostly for political reasons, have tried to nail certain politicians for election law violations by labeling certain activities as in-kind political giving.  Down this path lies a world where every institution that offered a candidate's family member or friend a job, or a spot in college, or a book deal, or a consulting contract is subject to ex post facto scrutiny and potential prosecution.

Where Did Those First Solar Subsidies Go? $32 Million went to their Failed CEO

It would be impossible to trace all the ways taxpayer money ends up in the coffers of solar manufacturers like First Solar.  Most of First Solar's money has been made selling panels in Germany to solar plants that, by law, can rape electricity customers with prices 10-15x higher than the market price for electricity.  First Solar also benefits more directly from direct subsidies, loan guarantees, "retraining" subsidies and even government Ex-Im Bank loans to sell panels to itself.  While First Solar vehemently denies it is a subsidy whore, it is telling that when Germany began to cut its solar feed-in tariffs, First Solar's stock price fell from over $300 to around $20.  Just watch day to day trading of First Solar stock, it does not move on news about its efficiency or productivity, it moves on rumors of changes in government subsidies.

Let's look at one subsidy.  In 2010, the Obama administration gave First Solar a subsidy of $16.3 million, ostensibly to help open a new plant in Ohio.  But it is interesting that this private company, which apparently could only raise the $16.3 million it needed by taking it by force from taxpayers, had plenty of money to pay its CEO.  In the 13 months leading up to its $16.3 million taken from taxpayers, First Solar paid its new CEO $29.85 million!  

Rob Gillette, the ousted CEO of First Solar Inc., earned more than $32 million in compensation from the struggling company for his two years of service, according to a regulatory filing Wednesday.

Gillette came to First Solar from Phoenix-based Honeywell Aerospace in October 2009 and was fired by the Tempe-based solar company's board of directors in October 2011....

Most of his compensation came in the three months of 2009 that he worked, when his total compensation, including salary, bonus, stock and options awards and other perks, reached $16.55 million. In 2010 his total compensation was $13.3 million, and last year he earned $2.46 million, which consisted of $763,000 in base salary and a $1.7 million severance.

Yep, they can't scrape up $16.3 million of their own money for a factory but they can find $30 million to give to an unproven CEO they eventually had to ride out on a rail.

By the way, I don't know Mr. Gillette, but I was once an executive at Honeywell Aerospace for several years.  I can tell you that it's a great place to find an executive who is focused on process to manage large complex organizations in a relatively stable business where manufacturing, logistics, and schmoozing large buyers is important.  It is a terrible, awful place to seek an executive for a fast growing business that needs to rapidly shift business strategies and where grinding through the process gets the wrong answer 12 months too late.

We're Number 71!

Not sure how one ranks blogs by traffic any more in the age of RSS feed readers - I can't remember the last time I actually visited a blog rather than just read its feed.  Never-the-less, Coyote Blog was ranked #71 among libertarian blogs.  I am not sure if that is good or bad.  Traffic here is usually pretty proportional to posting volume, so splitting my time with other blogs, Forbes, and my actual day job of late has probably caused traffic to fall.  I am happy enough with my little niche in the world, tends to get me about the right amount of speaking gigs and media appearances for the time I have available.