Posts tagged ‘Arizona State University’

Great Example of the Completely Insane Way We Manage Water

Virtually every product and service we purchase has its supply and demand match by prices.  Higher prices tell buyers they should conserve, and tell suppliers to expend extra effort finding more.

Except for water.

Every water shortage you ever read about is the result of refusing to let prices float to dynamically match supply and demand.  And more specifically, are the result of a populist political desire to keep water prices below what would be a market clearing price (or perhaps more accurately, a price that maintains reservoir levels both above and below ground at target levels).

So, some groups in Arizona are offering a$100,000 prize to help solve the water shortage.  And what is it they are looking for?  A better price system?  Nah:

A $100,000 prize awaits the group that comes up with the most innovative ­campaign to push water scarcity into the forefront of public ­conversation...

The competition wants to create a public-service campaign that raises awareness about the challenges facing Arizona's long-term water supply so residents will feel an urgency to start working on them now.

If Arizonans don't change how they consume water and start brainstorming new solutions for dwindling supplies, shortages won't be a choice, they will be an unavoidable reality. Planning for the future of water now will help ensure there is enough water for future generations, Brownell said.

The message isn't new; it has been taught with puppets, posters, television spots, brochures and landscape-design classes for years.

But experts, researchers and industry workers agree that as long as taps gush clear,drinkable water, it's hard to keep water scarcity part of public conversation.

"One challenge is getting people to take ownership of their decisions and how they contribute to the demand side of the equation," said Dave White, co-director of Arizona State University's Decision Center for a Desert City, which studies water use and sustainability....

Possible solutions to meeting Arizona's future water needs include:

• Desalination of sea water, which requires large financial investment and collaboration between government agencies and possibly Mexico.

• Rebates for water-efficient systems. Tucson offers up to $1,000 for households that install gray-water recycling systems to reuse water from sinks, showers and washing machinesfor irrigation.

• Increasing the use of recycled or reclaimed water. Arizona already uses this water to irrigate landscaping and recharge aquifers, but not as drinking water.

• Cloud seeding. The Central Arizona Project has spent nearly $800,000 to blast silver iodide into clouds to try to increase snowfall in Colorado, Utah and Wyoming, where the snowpack feeds the Colorado River.

I will say that it is nice to see supply side solutions suggested rather than the usual demand side command and control and guilt-tripping.   But how can we possibly evaluate new water supply solutions like desalinization if we don't know the real price of water?  Accurate prices are critical for evaluating large investments.

If I find the time, I am going to tilt at a windmill here and submit an entry.  They want graphics of your communications and advertising materials -- I'll just show a copy of a water bill with a higher price on it.  It costs zero (since bills are already going out) and unlike advertising, it reaches everyone and has direct impact on behavior.  If you want to steal my idea and submit, you are welcome to because 1. The more the merrier and 2.  Intelligent market-based solutions are never ever going to win because the judges are the people who benefit from the current authoritarian system.

PS-  the site has lots of useful data for those of you who want to play authoritarian planner -- let some users have all the water they want, while deciding that other uses are frivolous!  Much better you decide than let users decide for themselves using accurate prices.

Privatization Updates

While this may be familiar territory for readers of this blog, I have a post up at the Privatization blog on the history of private operation of public parks.  In this article I quoted one of my favorite over-wrought criticisms of private operation of parks, this time from the San Francisco Chronicle:

The question is, how will these agreements work over time? If parks remain open using donations, what is the incentive for legislators to put money for parks in the general fund budget? And who is going to stop a rich crook or pot dealer from taking a park off the closure list and using it for fiendish pursuits?

LOL.  "Fiendish pursuits?"

I also had an article there a while back about government accounting systems and how they make such privatization efforts difficult:

Back when I was in the corporate world, "Make-Buy" decisions -- decisions as to whether the company should do some task itself or outsource it to companies with particular expertise or low costs in that area -- were quite routine.  Even in the corporate world, though, where accounting systems are built to produce product line profitability statements and to do activity-based costing, this kind of analysis is easy to get wrong (in particular, practitioners frequently confuse average versus marginal costs).

But if these analyses are tricky in the private world, they are almost impossible to do well in the public sphere.  Grady Gammage, a senior and highly respected research fellow at Arizona State University's Morrison Institute, has as much experience with public policy analysis as anyone in the state.  Several years ago, he spent months digging into the financial numbers of Arizona State Parks, with the full cooperation of that agency.  A critical question of the study was how much it actually cost to operate a park, vs. do all the other resource and grant management tasks the agency is asked to perform.  Despite a lot of effort by Gammage and his staff, he told me once that the best he could do was make an educated guess --plus or minus several million dollars -- as to how much of the Agency's budget is spent actually operating parks vs. performing other tasks.

The reasons that this is so hard is that the parks agency's budgeting process was not set up to determine true net operating gains and losses at parks.  It was set up, like most public accounting systems, to enforce accountability to different pools of money that have been allocated by the legislature for certain tasks.  This tends to lead to three classes of problems that cause public make-buy decisions, as well as ex post facto third-party analyses, so difficult.  Since I am most familiar with the parks world, I will discuss these three issues in the context of parks:

Another Arizona Water Ariticle With No Mention of Price

Well, the Arizona Republic has done it again.  It has published yet another first-section front page water article (this makes about 50 in a row) discussing ways to make demand match supply without once discussing price.  This time, the reporting centers on a new online water supply and demand simulation model (here) introduced by Arizona State University.  With the model, the public gets to play dictator, implementing all kinds of policies and restrictions on individual consumers to see what effect these command and control steps have on water supply and demand.  And it is almost anti-climactic when I tell you that price does not enter in any way into the model. 

I probably don't have to remind readers that Phoenix has some of the cheapest water in the country, with prices less than half what they are in, say, water-logged Seattle.  Don't you think that might have a little to do with why supply and demand don't match?

Let's say there are about a 1000 key raw materials we use in modern society -- oil, natural gas, iron ore, uranium, bauxite, titanium, gold, silver, etc.  Of these, how do we match supply and demand?  Well, for 999 of the 1000, we use this thingie called the price mechanism.  The exception is water.  And it is incredible to me that not one but dozens of articles could be written by our newspaper about matching water supply and demand and not one of them could mention price, the mechanism we use to match supply and demand for 99.9% of commodities.  Remember when Hillary suggested a while back we need a special academy for government workers?  This is what they would teach -- that all problems can only be solved by government command and control.  As I wrote before:

In their general pandering and populism, politicians are afraid to
raise water prices, fearing the decision would be criticized.  So, they
keep prices artificially low, knowing that this low price is causing
reservoirs and aquifers to be pumped faster than their replacement
rate.  Then, as the reservoirs go dry, the politicians blame us, the
consumers, for being too profligate with water and call for ... wait
for it ... more power for themselves, the ones whose spinelessness is
the root cause of the problem, to allocate and ration water and
development

Arizona State University Racially Segregates Courses

I am a big supporter of the work FIRE does to support openness and individual rights in universities.  Today, FIRE turns its attention on Phoenix's own Arizona State University:

State-sponsored racial segregation has found a home at Arizona State University
(ASU).  ASU's ironically named 'Rainbow Sections' of English 101 and 102 have
been advertised on flyers and on the university's website as being open to
'Native Americans only.'

The Foundation for Individual Rights in Education (FIRE) has written to the
university to demand that the classes be opened to all students. Shockingly,
this marks the second time in less than four years that FIRE has been forced to
protest a racially segregated course at ASU.

It is appalling that ASU would resurrect segregated classes five decades
after Brown v. Board of Education," stated David French, president of
FIRE.  "The idea that a class can be 'separate but equal' was discredited long
ago.

The 'Rainbow Sections' of English 101 and 102, ASU's freshman composition
courses, were advertised as "restricted to Native Americans only" on the faculty
webpage of Professor G. Lynn Nelson, the course instructor.  A flyer
addressed to 'Native American Students' states that they 'are invited to enroll
in special Native American sections of ENG 101 and 102.'  It also discusses some
of the differences between the special sections and the 'standard First Year
Composition classes,' making it clear that the special sections offer a
different educational experience.

Anyone heard of Brown vs. Board of Education here?  I wouldn't have a particular problem with private groups offering such education with these restrictions, after all I have said many times that the right of free association implies a right not to associate with whoever you want.  But public institutions have different obligations in this regard.  Its actually not that hard to deal with, and even ASU knows what the solution is:

FIRE last wrote
to ASU in April 2002
to protest a segregated Navajo history class that
limited enrollment to Native American students. At that time, ASU simply dropped
the racial restriction in response to FIRE's letter.

Its OK to have different versions of the same coursework, and probably OK to advertise one version as specially targeted at a particular group, as long as you let individual students make the final decision on which of the University-sanctioned versions are right for them.