Archive for October 2016

What Uber Drivers Seeking Minimum Wage Are Missing

Via Engadget:

Uber drivers have won an employment tribunal case in the UK, making them entitled to holiday pay, paid rest breaks and the National Minimum Wage. The ride-hailing company has long argued that its chauffeurs are self-employed contractors, not employees; the tribunal disagreed, however, setting a major precedent for the company and its relationship with workers. GMB, the union for professional drivers in the UK, initiated the two "test cases" in July. It's described the decision as a "monumental victory" that will impact "over 30,000 drivers" in England and Wales.

"Uber drivers and thousands of others caught in the bogus self-employment trap will now enjoy the same rights as employees," Maria Ludkin, GMB's legal director said. "This outcome will be good for passengers too. Properly rewarded drivers are the same side of the coin as drivers who are properly licensed and driving well maintained and insured vehicles."

This misses a couple of things

  1. This might well kill Uber, such that the only "victory" here is that drivers have one less employment option and choice of work style.  The latter is perhaps the most important -- why does every single job have to be punch-in-punch-out with standard benefits and holidays and work hours and work rules?  Why is there no room for a diversity of work experiences from which to choose?
  2. One of the things that many Uber drivers like about Uber is that there are no set work hours or productivity expectations.  Well, that goes out the window with these rules.  Today, if Uber pays drivers only based on what they work, they don't really care how hard they work or how many jobs they take or where they choose to cruise or even if they choose to cruise at unproductive hours, like 5AM.  Currently, if you want to drive back and forth on a country lane at 4:30AM waiting for a fare, you can go for it -- you are taking the risk.  But if the company is paying minimum wage per hour, everything changes.  Suddenly they must now demand minimum productivity expectations, which will include limits on working in unproductive locations or at unproductive hours.  The company will start to rank drivers and cut the lowest productivity / lowest activity ones.

I went into these issues in more depth here.

Best Lego Kit Ever

My daughter and I had a lot of fun putting this together.  The back side is a sort of playhouse, with lots of little references to various Disney animated movies.

Election Silver Lining In Phoenix

Asking the Wrong Question

Apparently a chunk of what looks like manufactured aluminum was dug up years ago in Romania and was dated at up to 250,000 years old.  By this dating -- given the technology required to make aluminum -- it would be unlikely to be man-made.

So of course everyone is focusing on the question of whether it is an alien artifact.  Which is the wrong question.  A rational person should be asking, "what is it about this particular metallurgy or the way in which it was buried that is fooling our tests into thinking that a relatively new object is actually hundreds of thousands of years old?"  I would need to see folks struggle unsuccessfully with this question for quite a while before I would ever use the word "alien."  I am particularly suspicious of tests that have an error bar running between 400 years and 250,000 years.  That kind of error range is really close to saying "we have no idea."

Postscript:  The article hypothesizes that it looks like an axe head.  Right.  Aliens find some way to fly across light-years, defying much of what we understand about physics, and then walk out of their unimaginably advanced spacecraft carrying an axe to chop some wood, when the head immediately goes flying off the handle and has to be left behind as trash.

Our Two Parties Shift Their Positions A Lot

From an interview of Political scientist Steven Teles by Megan McArdle:

In political science we often model political actors as having fixed interests and positions, and then we try to figure out how they do or don't get their way. But there's actually more play in the joints of politics than that. Some people -- like Ronald Reagan! -- just switch teams entirely. More broadly, as we address in the book, entire parties switch their positions. If we want to understand politics, we need some way of understanding that process.

As I grow older, and have had more time to observe, I find the shifts in party positions fascinating and oddly opaque to most folks who are in the middle of them - perhaps this is one advantage to being part of neither major party.   Some of the shifts are generational -- for example both parties have moved left on things like homosexuality and narcotics legalization.   Some of the shifts have to do with who controls the White House -- the party in power tends to support executive power and military interventionism, while the opposition tends to oppose these things.   Some of the shifts have to do with who controls intellectual institutions like college in the media -- the group in control of these institutions tends to be more open to first amendment restrictions, while the out-of-power group become desperate defenders of free speech (look how the campus free speech movement has shifted from the Left to the Right).

I would love to see a book on this covering the last 50 years.

Federal Government Punishing Private Individuals for the Fraud and Mistakes of Government Workers

From the LA Times, the US Government is demanding that soldiers repay enlistment bonuses years after they were promised

Nearly 10,000 soldiers, many of whom served multiple combat tours, have been ordered to repay large enlistment bonuses — and slapped with interest charges, wage garnishments and tax liens if they refuse — after audits revealed widespread overpayments by the California Guard at the height of the wars last decade.

Investigations have determined that lack of oversight allowed for widespread fraud and mismanagement by California Guard officials under pressure to meet enlistment targets.

But soldiers say the military is reneging on 10-year-old agreements and imposing severe financial hardship on veterans whose only mistake was to accept bonuses offered when the Pentagon needed to fill the ranks.

Note that there is no implication that there was any fraud on the soldiers' part -- they were offered a fair exchange and they took it.  The Federal government is trying to punish soldiers for potentially illegal or fraudulent actions of government workers.  Now that the soldiers have provided the service they promised, the government is trying to take back the money it promised.  But the soldiers cannot in turn take back their service.

This sort of retroactive one-sided reneging on government contracts and promises is actually fairly common.  For example, I wrote about it here, where private creditors lost all the money they loaned to the government when it was determined that the government officials who approved the loans did not have the authority to do so.  The punishment for the government taking out loans it should not have was to allow the government to keep all the money and screw the  private parties who lent them money in good faith.

I actually have faced this same thing a number of times in my own business.  I pay the government concession fees for the public campgrounds we operate.  There is a process by which the government can ask us to pay these fees in kind by doing some of the government's capital maintenance for it.  The government likes this because we can spend the money more efficiently and get more done with it, and we (and our visitors) like it because the money gets spent right in the park where the customer fees were collected.  However, it has happened on a number of occasions that some internal audit has determined that some agency official approved an in-kind project they should not have. When this happens, the government often comes to me and tells me that they need the money back.  My response is consistently something like, "Bullsh*t!  I have your approval to spend the money and your promise to be reimbursed in writing -- I can't unspend the money you asked me to spend.  There is absolutely no way I am going to pay the financial cost of you violating your own rules."

Three Reasons Why More Money Does Not Translate Into Better Education

  1.  There is absolutely no guarantee that spending more money increases service quality, especially when (as is the case with public schools) there is no competition to discipline spending and ensure that it is funneled to those aspects of the service that are actually important to customers
  2. Over the last 20-30 years, administrative staffing in public schools has grown from a small percentage of the total to about half the headcount in many public school districts, and thus likely more than half the salary budget (since administrators frequently make more than teachers)
  3. Much of the increased funding is going to retired teachers who aren't actually teaching anyone

Per-student spending on K-12 education has risen steadily over the last two decades, but student test scores, and teacher salaries, are stagnant. Why hasn’t this massive increase in investment produced better teachers and better opportunity for students? The short-answer, according to a new Manhattan Institute report by Josh McGee: State and local governments have catastrophically mismanaged their teacher pension systems. The cash infusion to K-12 has been used largely to pay for irresponsible pension promises politicians made to teachers’ unions and justified to the public with shoddy accounting. . . .

In other words, to cover benefits for retirees, states need to dig into education funds that might otherwise be used to attract and retain good teachers or buy better textbooks and build new facilities. So long as state governments are unwilling to reform the blue model pension-for-life civil service system, and so long as teachers unions continue to wield outsized influence in so many state legislatures, this pattern seems likely to continue indefinitely.

Campaigns to increase spending on schools are always popular, and understandably so: Education ought to be a great equalizing force in our society and, in theory, an efficient way to invest in the future. The problem is that in many states, new “K-12 spending” isn’t really an investment so much as a transfer payment to retired employees of the public schools who have been promised untenable lifetime pension benefits.

Is The Carbon Tax A Pricing Signal To Reduce CO2, Or A Funding Mechanism for a Patronage System to Feed Various Constituencies?

This is an absolutely fascinating article at Vox on efforts by green forces and the Left to defeat a carbon tax ballot initiative in Washington State.  The ballot initiative was written very similarly to my proposed plan, where a carbon tax would be made revenue neutral by offsetting other taxes, particularly regressive ones.

Apparently, the Left is opposing the initiative in part because

  1. It turns out the carbon tax, for many on the Left, is more about increasing the size of government rather than really (or at least solely) for climate policy, and thus they do not like the revenue neutrality aspects.  They see carbon taxes as one of the last new frontiers in new government revenue generation, and feel like it would be wasted to make it revenue neutral
  2. The Greens have made common cause with the social justice warrior types, so they dislike the Washington initiative because it fails to allow various social justice and ethnic groups cash in.
  3. Apparently, folks on both the Left and the Right actually like government picking winners and tinkering in individual subsidies and programs, such as funding various green energy and conservation initiatives.  To me, that stuff is all a total waste and made irrelevant by a carbon tax, whose whole point is to allow markets to make the most efficient CO2 reduction choices, but looking at this election it would not be the first time the electorate was ignorant on basic economics.

There is a real disconnect here that it is important to understand.  I don't think I really understood how many of us could use the term "carbon tax" but understand its operation in fundamentally different ways, but I think that is the case.

The authors of the law, like me, see the carbon tax as a pricing signal to efficiently change behaviors in the market around use of carbon-based fuels.  The whole point of a carbon tax is to let individual actions and market forces shape how solutions are created.  But the Left seems to see the carbon tax totally differently.  They don't understand, or don't accept, the power of the pricing signal in the market, or else they would not say things like they want a "put a fee on emissions and reinvest that revenue in clean energy" -- the latter is a redundant and pointless government action if one accepts the power of the tax, since individuals will already be responding by making such investments.  The Left instead sees the carbon tax as the source of a new kitty of money that then must be fought over in some sort of political process.

Check out this passage, and consider whether these folks are thinking of the carbon tax as a pricing signal or a source of new money to be spread around:

Either way, state social justice groups did not feel consulted. "Rather than engaging with these communities," wrote Rich Stolz and De'Sean Quinn of environmental justice group OneAmerica, "I-732 organizers patronized and ignored concerns raised by these stakeholders."

White people who work with other white people — and the white people who write about them — tend to slough off this critique. What matters, they insist, is the effect of the policy, not the historical accident of who wrote it down.

Bauman points to a set of policy demands posted by Black Lives Matter. Among them: "shift from sales taxes to taxing externalities such as environmental damage." Also: "Expand the earned income tax credit."

"Well," Bauman says, "we did both those things, right?"

But communities of color want more than for mostly white environmental groups to take their welfare into account. Most of all, affected groups want some say in what constitutes their welfare. "All of us want to be included from the beginning of any decision," says Schaefer. "We don't want to be told after the fact, ‘Hey, by the way, we decided all this stuff for you.’"

This tension within the climate movement has played out most recently in California, where low-income and minority groups have won substantial changes to the state’s climate law, ensuring that a larger portion of cap-and-trade revenue is directed to their communities. Given demographic changes sweeping the country — and climate funders’ newfound attention to building up the capacity of those groups — those tensions are unlikely to remain confined to the West Coast.

These folks see the carbon tax as a pool of money to fund a patronage system, and are thus scared that any groups not involved in crafting the legislation will be left out of the benefits of the patronage -- after all, that is how most programs from the Left are put together.  The Obama stimulus program back in 2009 was such a patronage project, and those who were in on crafting it got windfalls, and those who were left out of the process had to pay for it all.  Either the Left assume that everything works this way, even when it does not, or they want everything to work this way -- I don't know which.

One thing I do know is that I fear I am going to lose this argument in the future.  Here is one way to look at it -- are more people graduating from college looking at the world through the lens of markets and economics and incentives or are more graduating structuring issues in terms of social justice and government authority?

 

Are Markets Still Efficient (Vis a Vis Individual Equity Valuations) If Everyone Is An Index Fund Investor?

From the WSJ, the dying business of picking stocks.

Pension funds, endowments, 401(k) retirement plans and retail investors are flooding into passive investment funds, which run on autopilot by tracking an index. Stock pickers, archetypes of 20th century Wall Street, are being pushed to the margins.

Over the three years ended Aug. 31, investors added nearly $1.3 trillion to passive mutual funds and their brethren—passive exchange-traded funds—while draining more than a quarter trillion from active funds, according to Morningstar Inc.

Advocates of passive funds have long cited their superior performance over time, lower fees and simplicity. Today, that credo has been effectively institutionalized, with government regulators, plaintiffs' lawyers and performance data pushing investors away from active stock picking.

Why This Election Is Awesome -- Making It Easier NOT to Give Power to these Losers

The other day at dinner, I told a group of folks with more, uh, conventional political views than my own that this election was great.  When pressed on my seeming madness, I said that I was tired of people fetishizing politicians, starting with the cult of the Presidency.  History is written as if these losers drove most of history, when in fact the vast vast majority of our wealth and well-being today results from the actions of private individuals, private individuals who typically had to fight politicians to make our lives better.   Anything we can do to cause people to think twice about giving more power to these knuckleheads, the better.  And thus, this election is great -- like Dorothy stumbling on the wizard behind the curtain, perhaps going forward people will be a little less willing to blindly accept politicians as their betters.

We Need A Word For This. Maybe the Germans Have One

The estate process for my parents is finally coming to a close, and we must do a final cleanout of their residence in preparation for selling it.  I ended up with 6 boxes of stuff I shipped to my house that I would classify as "things I really don't want and will likely never look at or use but I can't bring myself to throw away."  My mom's faded wedding dress is in this category, for example.  I need a word for this kind of item.

Typically what happens with this stuff, at least in my case, is a sort of time-based triage process.  I will store it, let 5 years or so go by and at that point, having never accessed any of it, I will get rid of a portion.  My school textbooks steadily vanished in this manner.  Rinse and repeat until the problem with the hard core of assets we can't bring ourselves to shed is passed onto our kids.  Or until something is old enough to migrate from old junk to valuable antique.

I did find a pretty cool, large award certificate my grandfather won at the 1904 St. Louis World's Fair, which I think I will frame.

December Surprise

I have written a number of times in the past that the media is often reluctant to publish potential issues about pending legislation that they support -- but, once the legislation is passed, the articles about problems with the legislation or potential unintended consequences soon come out, when it is too late to affect the legislative process.  My guess is that these media outlets want the legislation to pass, but they want to cover their butts in the future, so they can say "see, we discussed the potential downsides -- we are even-handed."

I don't know if this practice spills over from legislation to elections, but if it does, we should see the hard-hitting articles about Hillary Clinton sometime in December.

Facebook Creepiness

Yesterday I browsed for a utility sink at Lowes for my hobby room.  Today, I open Facebook for the first time in weeks (on a different computer) and find an advertisement for that exact same sink at Lowes in my feed.

You are being watched.

I Stand By My Prediction -- Republicans Have Shackled Themselves to a Suicide Bomber

Granted this was not that brave of a call, but nevertheless from July 20:

Back in the depths of WWI, the Germans woke up one day and found that their erstwhile ally Austria-Hungary, to whom they had given that famous blank check in the madness that led up to the war, was completely incompetent. Worse than incompetent, in fact, because Germany had to keep sending troops to bail them out of various military fixes, an oddly similar situation to what Hitler found himself doing with Italy in the next war.  ... Anyway, Germans soon began to wonder if they were "shackled to a dead man."

I am reminded of that phrase as I see that the Republicans have officially nominated Donald Trump for the presidency, perhaps the worst choice the party has made in its history, Nixon included. I don't think "shackled to a dead man" is quite right. I think that "shackled to a suicide bomber" is more apt. Trump is not only going to lose big in this election to an incredibly weak Democratic candidate, but he is also going to kill the Republicans in the House and Senate and any number of down-ballot elections.

19h Century Climate Pseudoscience: Rain Follows the Plow

After the Civil War, as settlers began to settle the drier lands of the western plains, they noticed that the low rainfall had started to increase.    In what must be some impulse programmed into human behavior, folks at the time attributed this cyclical natural variation in climate to man's actions.  The theory went that actually settling the land and overturning the sod brought more rain, encapsulated by the phrase "rain follows the plow".

The theory arose in the late 1860s and 1870s during the westward expansion of European-American settlement west of the Missouri River and across the 100th meridian west. The definition can be found in the Kansas Journey Textbook as well. This was the traditional boundary line between the humid and semi-arid portions of central North America. Specifically, in the early part of the decade, white settlement had spread into central and western Nebraska along the Platte River. Emigrants on the Oregon Trail began reporting that the land in western Nebraska, previously known for its yellowed, dry vegetation during the summer, had seemingly become green.

Out of this evidence, some scientists concluded that the apparent increase in rain was due to the settlement and the effects of cultivation. One of the most prominent exponents of the theory in the United States was Cyrus Thomas, a noted climatologist. After studying the recent history of Colorado, he concluded that the increase in moisture was permanent, and that it coincided exactly with the first settlers' cultivating of the land. Other prominent advocates of the theory were Ferdinand Vandeveer Hayden, the notedgeographer who had explored and surveyed parts of the Rocky Mountains of Colorado; Samuel Aughey, a professor at the University of Nebraska; and Charles Dana Wilber, an amateur scientist and author.

Thomas and other climatologists offered a variety of explanations for the theory. A common idea was that the plowing of the soil for cultivation exposed the soil's moisture to the sky. In addition, newly planted trees and shrubs increased rainfall as well, as did smokefrom trains, or even the metal in the rails or the telegraph wires. Another hypothesis stated that the increased vibrations in the atmosphere due to human activity created additional clouds, from which rain fell. This idea led to the widespread dynamiting of the air across the Great Plains in the 1870s.[3]

The theory was widely embraced in its day, not only by scientists, but land speculators and emigrants. Some historians have argued that the theory was embraced readily as an outgrowth of Manifest Destiny, the idea that the United States had a mission to expand, spreading its form of democracy and freedom. The theory is regarded as partially responsible for the rapid settlement of the Great Plains in the later 19th century. In 'The Great Valleys and Prairies of Nebraska and the Northwest', published in 1881, Charles Dana Wilber wrote:

In this miracle of progress, the plow was the unerring prophet, the procuring cause, not by any magic or enchantment, not by incantations or offerings, but instead by the sweat of his face toiling with his hands, man can persuade the heavens to yield their treasures of dew and rain upon the land he has chosen for his dwelling... ...The raindrop never fails to fall and answer to the imploring power or prayer of labor.[4]

William Gilpin, the first territorial governor of Colorado and an aide to President Abraham Lincoln, was a proponent of this theory. Gilpin was a strong believer in the idea of Manifest Destiny. One of his books was called The Mission of the North American People. He strongly promoted western settlement and invoked this theory as one of his reasons for people to migrate west.[5]

Climatologists now understand that increased vegetation and urbanization can result in increased precipitation. The effect, however, is local in scope, with increased rainfall typically coming at the expense of rainfall in nearby areas. It cannot result in a climatological change for an entire region. They also understand that the Great Plains had had a wetter than usual few seasons while this theory was developed and increasing settlement were both taking place. When normal arid conditions returned, homesteaders suffered

 

 

If You Want to Worry About Something Other Than This Election....

From the WSJ:

A Midwestern metropolis is under attack from an unseen enemy, with victims pouring into doctors’ offices and pharmacies with telltale wounds.

“Right now I don’t even want to go outside to get the paper,” said 82-year-old Chuck Heinz, a retired manufacturing manager whose upper torso is peppered with dozens of welts.

Megan Kinser, who has been attacked at least two dozen times, goes out only when she has to. “It makes me nervous,” said the 32-year-old pharmacy assistant.

The culprit: Pyemotes herfsi, otherwise known as the oak leaf itch mite.

The eight-legged pest causes intense itching in humans. Native to Central Europe, researchers believe it made its U.S. debut in the 1990s in Kansas City and has since spread to many parts of the Midwest, with outbreaks happening every three to eight years. Nearly invisible to the eye at 1/100th of an inch, the mites are back in full force.

“You can’t see them, they’re microscopic and before you know it they’re under your skin,” said Jared Mayberry, marketing director of Ryan Lawn & Tree in Overland Park, Kan.

People are being told to wear hats and cover most of their skin when they go out and to jump in the shower as soon as they go inside. And to avoid walking under red oaks, particularly pin oaks.

But with at least 3.5 million pin and other red oak trees in the Greater Kansas City area, according to a 2010 estimate by the Agriculture Department, that may be easier said than done.

The arachnid becomes of most concern to humans in the fall, after it spends all summer feasting on the larvae of a gall midge, a fly that nests in oak leaves.

The itch mites eventually tumble to Earth this time of year—as many as 300,000 a day per tree.

Working With the Government

In my email today:

CDFW LICENSE PAPER STOCK NOTIFICATION

This email is to inform you that the California Department of Fish and Wildlife (CDFW) is discontinuing the BLUE license paper.  Effective November 1, all licenses must be printed on GREEN license paper.

Please check your license paper stock, if you do not have GREEN license paper, place an order through the CDFW terminal by following the directions below. Once you confirm and/or receive the GREEN license paper, please recycle the BLUE license paper.

 

The Madness of Shareholder Lawsuits

At least one investor (and likely soon many more) in Theranos is suing the company:

When Theranos founder Elizabeth Holmes announced that the company was shifting its focus, she said her team is lucky to have investors who believe in its mission. But there's at least one major investor who doesn't, and it has already sued the controversial blood-testing provider. According to The Wall Street Journal, Partner Fund Management (PFM) LP is accusing the startup of convincing it to pour $100 million into the startup by feeding it a "series of lies." The San Francisco-based hedge fund firm filed the lawsuit in Delaware today and sent out a letter to its own investors.

In the letter, the firm said:

"Through a series of lies, material misstatements, and omissions, the defendants (Theranos), engaged in securities fraud and other violations by fraudulently inducing PFM to invest and maintain its investment in the company."

At some level, shareholder lawsuits are utter madness.  Consider the case where all owners of a company are suing the company.  If they win, the amount they win from the company is offset by a drop in value of their ownership in the company.  At best this is a break-even proposition but when lawyers fees are included, this is a recipe for immense value destruction.

I am not really an insider on these things, but my guess is that the explanation for the madness comes by relaxing my assumption above that "all owners" are suing.   If only one owner is suing, then this becomes a potential mechanism for transferring value from other owners or investors.  There are of course real situations where a certain minority class of shareholders is screwed by the majority, but I don't think that is the case here.  In the case of Theranos, I assume the whole company is headed into a messy bankruptcy, and PFM is racing to the courthouse to be first in what is sure to become a messy litigation-fest.  They likely have one or both of these goals

  • Since they likely cannot sell their equity and cash out normally, given the uncertainty about the company's future,  they may be able to effectively cash out by getting other owners to pay them off in a settlement of this suit.
  • Since their equity may be worth zero soon, if they can win a lawsuit the payout becomes a much more senior form of indebtedness and might move them up towards the front of the line for any value that still exists in the company

Update:  From one of my readers at a CPA firm:  A key reason for shareholder suits is to trigger insurance coverage payouts for management and/or Board errors and omissions.  This in theory both increases the company’s assets and creates a senior claim by the plaintiffs to those particular assets.

You're Wasting Your Vote -- Not

People ask me who I am voting for in the Presidential election this year about five times a day.  I wish they wouldn't.  Asking me about the upcoming election is a bit like having people constantly asking me if I am looking forward to my root canal next week.  I find the whole subject of elections depressing -- these are people competing to exercise power over me that they should not have -- and this feeling only is worse with the horrendous choices we are being offered this year by the major parties.

But I play along, and tell them I am voting for Gary Johnson.  And then I get, about 100% of the time, this retort -- You're wasting your vote!

What the hell does this mean?  Since we keep voting and nothing really changes in the corrupt actions of a power-hungry government, I suppose one could call that a wasted vote, in the same spirit of "doing the same thing over again and expecting different results."  Many libertarians refuse to vote, both for this reason and to avoid giving their sanction to those who seek to exercise power.  But that is now what most people mean when they say I am wasting my vote.

What they mean is that any vote that is not for one of the two main Coke or Pepsi parties is wasted because the system has been structured by these two parties to make third party runs effectively hopeless (in much the same way that Coke and Pepsi coordinate their actions in the retail channel to exclude rivals from shelf space).

This is clearly brilliant marketing by the two major parties to get this phrase so embedded in everyone's head, but it is stupid.  For example, by this same logic, any vote for a losing candidate is wasted, so 47 or 48 percent of people are always wasting their vote.

The two major parties are going to continue producing the same crap candidates by the same process and espousing the same stale statism until people start voting for someone else.

I know a lot of folks fear a Trump presidency so much they are willing to hold their nose and vote for Clinton just to make sure that is avoided.  I can't necessarily argue with that logic.  Clinton is a conventional candidate and at least will suck in conventional and predictable ways.  But I am more confident in the robustness of the American system to withstand bad Presidents, even perhaps as bad as Trump.  I will say I would have been more confident in this statement 16 years ago before the last two Presidents worked so hard to erode Constitutional safeguards and checks on the power of the President.  On this dimension (and really only on this dimension) a Trump presidency might at least have one silver lining, in that it would sure as hell cure the Left of their love for the imperial presidency.

I Have A Million Problems With Hillary Clinton, But This is Not One of Them

Apparently, Republicans are trying to make an issue of Hillary Clinton, 40 years ago, successfully defending an accused rapist as his court-appointed attorney.  I feel bad for any victim denied justice, but everyone deserves representation in the legal system.  Republicans talk about her defending a guilty man, but everyone is innocent before the law until convicted, so she was defending an innocent man.  Heck, she should be praised for actually doing a good job in a position a lot of attorneys would just mail it in -- get a quick plea bargain and get back to real paying clients.  Do I blame OJ's attorneys for his not guilty verdict?  Not in the least (I blame the prosecutor and a judge who could not control his courtroom).

Hey, Someone's Listening!

New Pacific Legal Foundation attorney Jeremy Talcott generously gives me some credit for his interest in defending liberty.   At about the 5:50 mark.  While blogging, one is so disconnected from the readers it sometimes feels like lecturing in a pitch black auditorium and wondering if anyone is in the audience.  PLF is one of the half dozen top organizations in the country using litigation to protect liberty (along with others like the IJ, Goldwater, Mackinac, etc.)

Why Germany Struggles With Integrating New Immigrants -- And Why Their Experience Isn't Comparable to the US

For years I have argued that immigration controls in this country are effectively a form of occupational licensing.  While US immigration controls are a terrible policy IMO, Germany's approach seems even worse.  They welcome people into their country but don't let them work, and then wonder why newly immigrated refugees can't find jobs.

In 2015, Germany waited the longest of any country in Europe to restrict the flow of asylum seekers from the Middle East. Yet once they arrived, the asylees who immediately sought work in Europe’s largest economy were greeted by bureaucracy. The law initially forbade asylees from seeking work for 9 months after their arrival, but was reduced to 3 months in November 2014. Then, inexplicably, at the height of the inflows, the German governmentbanned working if the asylee was forced to stay a reception center, which could be up to 6 months.

After the initial waiting period, asylees did not receive unrestricted employment authorization. Instead, they would have to find a “concrete” job offer—i.e. a firm must promise to hire them if the permit is granted—then apply for authorization. Even then, companies can only hire them during the first 15 months if the jobs are offered first to EU residents, and the federal labor department agrees that no one was willing to take. They also set asylee wages, which can price out low-skilled workers.

The hoops don’t end there. Asylees still have to get the approval of the immigration office at the municipal level. Under the law, it would take four years before they could compete equally with EU citizens.

On top of all these refugee-specific regulations, skilled workers are then tasked with proving that they can work in certain occupations. In order to obtain an occupational license, documentary proof of training—proof that’s often buried under bombed-out homes in Syria—is required. Some states in Germany allow asylees to demonstrate their skills in order to receive licensing, but others do not. “I am a dentist and could work, but what am I supposed to do? I am not allowed to work here!” one asylee told DW News.

Low-skilled immigrants haven’t avoided being targeted either. Germany introduced its first ever minimum wage in 2015—which disproportionately hits lower skilled migrants—and a study by the German government in August 2016 found that it had already cost 60,000 jobs.

 

It Turns Out That Firing Nobody and Giving the Agency More Money is a Really Poor Way to Fix Things

Working in the world of privatization, one objection I get all the time to privately operating in a here-to-for public space is that government officials are somehow more "accountable" to the public than are private companies.

This strikes me as an utter disconnect with reality.  If I screw up, I make less money or even go out of business.  When government agencies or officials screw up, they generally remain unchanged and unpunished forever.  There are no market competitive forces just waiting to shove a government agency aside -- they have a monopoly enforced at the point of government guns.  As I wrote a week ago about a conversation between myself and a government official about my operating public parks:

I understand that my margins are so narrow, if even 5% of those visitors don't come back next year -- because they had a bad time or they saw a bad review online -- I will make no money.  Those 2 million people vote with their feet every year on whether they think I am adequately serving the public, and their votes directly affect how much money I make.

Government agencies have nothing like this sort of accountability for public service.

One reason government agencies seldom change is that the typical response to even overt malfeasance is 1) to give the agency more money, as the agency will blame all incompetence on lack of budget (just think "public schools" and teachers unions) and 2) the agency will fire nobody.

Take the Phoenix VA.  Congress eventually rewarded the VA with more money, almost no one was fired, and the one of the worst managers in the VA system, a serial failure in multiple VA offices who would have been fired from any private company I can think of, was put in charge of the struggling Phoenix VA.

Well, it turns out that firing nobody and giving the agency more money is really a poor way to fix things.

Patients in the Phoenix VA Health Care System are still unable to get timely specialist appointments after massive reform efforts, and delayed care may be to blame for at least one more veteran's death, according to a new Office of the Inspector General probe.

The VA watchdog's latest report, issued Tuesday, says more than two years after Phoenix became the hub of a nationwide VA scandal, inspectors identified 215 deceased patients who were awaiting specialist consultations on the date of death. That included one veteran who "never received an appointment for a cardiology exam that could have prompted further definitive testing and interventions that could have forestalled his death."

The report portrays Phoenix VA clerks, clinicians and administrators as confused and in conflict about scheduling policies despite more than two years of reform and retraining.

"Unexpectedly" as a famous blogger would say.

 

 

Yes, Let's Make Entrepreneurship and Business Formation Even Harder

I am on the road this week in Alabama and Tennessee, but I felt the need to comment on one issue of the day.  These thoughts will be a bit rushed:

Well, it looks like the awesome team of Trump and Clinton may manage to take yet another shot at reducing entrepreneurship.  It's all a result of the report that the Donald had a nearly billion dollar tax loss decades ago, and that - gasp - this tax loss might have shielded his income from taxes for years.  Hillary's supporters are already demanding changes to the tax code and Trump, as usual, cannot muster an intelligent defense on even a moderately technical topic.

As someone who built a business over 10 years, I can't think of anything that would do more to screw up the already languishing rate of new business formation than to somehow limit the deductability of business losses on future years' taxes.

I lost money for years in my business -- trying to get it going, trying to grow it, engaging in more than a few failed experiments of new services.   I would have been much less likely to do so had I known that I couldn't offset future profits on my taxes with current losses.

I will add that making changes to the deductability of losses will only lead to some screwed up accounting behavior.  For example, had I known that the losses would not have been deductible, I probably would have found excuses to capitalize a lot of my expenses, reducing paper losses early and getting tax deductions later in the form of depreciation.  I probably could have saved some of the deductions but only with a lot of extra bookkeeping and accounting effort.  Is this really the way we want to revive the economy, by shifting sucking up more of entrepreneurs' time on useless paperwork games with the IRS/