Coyote Blog

This country has made great progress in cleaning up its waterways over the last four decades.  Conservatives like to pretend it’s not true, but there is absolutely nothing wrong from a strong property rights perspective in stopping both public and private actors from dumping their waste in waterways that don’t belong to them.

The problem today with the EPA is not the fact that they protect the quality of the commons (e.g. air and water) but that

1. New detection technologies at the parts per billion resolution have allowed them to identify and obsess over threats that are essentially non-existent
2. Goals have changed such that many folks use air and water protection as a cover or excuse for their real goal, which is halting development and sabotaging capitalism and property rights

What might surprise Brougham and many other New Yorkers who were appalled by last summer’s sewage discharge is that there’s nothing particularly unusual about it. Almost every big rainstorm causes raw sewage to flow into the city’s rivers. New York is one in a handful of older American cities — Baltimore, Philadelphia and Washington, D.C., are others — that suffer from poor sewer infrastructure leading to Combined Sewer Overflows, or CSOs. New York City has spent $1.6 billion over the last decade trying to curb CSOs, but the problem is so pervasive in the city that no one is sure whether these efforts will make much of a difference.

CSOs occur because the structure of New York City’s sewage system often can’t cope with the volume of sewage flowing through it. Under the city’s streets, thousands of drains, manholes and plumbing systems converge into a few sewage mains. These pipes can handle the 1.3 billion gallons of wastewater that the five boroughs produce on a typical day — about as much water as would be generated by a 350-year-long shower. But whenever the pipes gather more water than usual — such as during a rain- or snowstorm — the pumps at the city’s 14 wastewater treatment plants can’t keep up with the flow. Rather than backing up into streets and homes, untreated sewage systematically bypasses the plants and heads straight into the waterways.*

In this way, 27 to 30 billion gallons of untreated sewage enter New York City waterways each year via hundreds of CSO outfalls, says Phillip Musegaas of Riverkeeper, a New York clean water advocacy group. Musegaas says he finds it especially upsetting that city officials don’t effectively warn the thousands of people like Brougham who use the waterways and could encounter harmful bacteria during overflow events.

This via Q&O:

Earlier today, New York Times columnist Nick Kristoff opined on Twitter about cuts in government services. It’s not every day that you see such stupidity displayed so confidently…except from the Left:

Imagine John Boehner home in OH, seeing an escaped tiger–and getting a msg that help is unavailable due to govt cutbacks.

Well, I don’t know about John Boehner. But I do know that if I received such a message, it’d be because I was trying to call up a government flunky to haul a tiger carcass away. And if I did get such a message, my very next call would be to a good taxidermist.

It’s an interesting glimpse into the worldview though. The unspoken assumption is that, without government tiger hunters, we’re all doomed to be mauled by wild beasts. Presumably, this is because we are all tiny, little children, utterly incapable of solving our problems without the intervention of our benevolent government overlords. It’s a worldview that operates on the assumption that the government is the only adult in the room.

A great example of this sort of mentality was the Bruce Willis action filmLive Free or Die Hard.  The movie was a decent thriller, falling into the unlikely-buddy-movie genre (including also 48 Hours and most of the Lethal Weapon movies).

Like most modern techno-thrillers, it required a lot of technical suspension of belief, but what really struck me was the premise — that somehow, if terrorists were able to really shut down the government, people would go into a panic and be totally lost and forlorn.  Even the strong male hero buys into the premise.  Can you even imagine a Clint Eastwood movie where Clint laments how scared Americans will be if they were to call the FDA to inquire if a certain product is truly organic and no one answered the phone?   It makes for a sort of irony in the movie because in fact the government is completely useless in the face of the terrorists, who are brought down essentially by a few private individuals.

Oops.  Accounting error seriously overestimates benefits of biofuels.  

The European Union is overestimating the reductions in greenhouse gas emissions achieved through reliance on biofuels as a result of a “serious accounting error,” according to a draft opinion by an influential committee of 19 scientists and academics.

The European Environment Agency Scientific Committee writes that the role of energy from crops like biofuels in curbing warming gases should be measured by how much additional carbon dioxide such crops absorb beyond what would have been absorbed anyway by existing fields, forests and grasslands.

Instead, the European Union has been “double counting” some of the savings, according to the draft opinion, which was prepared by the committee in May and viewed this week by The International Herald Tribune and The New York Times.

The committee said that the error had crept into European Union regulations because of a “misapplication of the original guidance” under the United Nations Framework Convention on Climate Change.

“The potential consequences of this bioenergy accounting error are immense since it assumes that all burning of biomass does not add carbon to the air,” the committee wrote.

Duh.  This has been a known fact to about everyone else, as most independent studies not done by a corn-state university have found ethanol to have, at best, zero utility in reducing atmospheric CO2.

It is worth noting that the EU would likely have never made this admission had it solely been under the pressure of skeptics, for whom this is just one of a long list of fairly obvious errors in climate-related science.  But several years ago, environmental groups jumped on the skeptic bandwagon opposing ethanol, both for its lack of efficacy in reducing emissions as well as the impact of increasing ethanol product on land use and food prices.

I spent four days last week trying to get my online backup file restored for Quickbooks, our accounting software.

One morning, we woke up and found our entire QB file corrupted.  I would insert cautions to QB users about such occurrences, but I think everyone already knows the problem.  Such a warning would be like reminding a New York resident about street crime.  We QB users always feel like we are walking on eggshells with QB, ready at any moment for everything to go haywire.  We live with it, because the program is useful and ubiquitous.

So I perform a backup every day, but recently started using the QB online backup facility.  This automatically backs up the file every day.  I still make a local backup from time to time, but I have gotten lazy.  When things went south the other day, my online backup was 10 days old, an eternity in our business.  I sent QB our file to try to execute a repair, but in the mean time I went to the restore command to restore the most recent online backup before the corruption.

Fail.  Fail.  Fail.  Fail.  After four tries, each 3 hours each, I got the idea maybe it was not going to work.  So I called QB and got their Phillipines tech support desk.  They walked me through some steps.  Fail. Fail. Fail.

Through all this time, we were entirely shut down accounting-wise.  Finally, in exasperation, I asked them to just post my backup file on an FTP server somewhere.  After all, we could both see the file exists, and it was just the QB proprietary file transfer protocol that was failing to restore it.  Well, three countries and four departments later, no one could post the file on an FTP server.  Or to my Amazon S3 account.  Or to a password-protected web page.

For God sakes, this is a software company?  Finally, they agreed to have someone at the third party contractor who runs the servers try to put the file on a DVD and mail it to me, LOL.

It was almost exactly at this point that I opened this XKCD comic:

I tell you, sometimes that site is totally dialed into my brain.  (by the way, as I blog, a signed version of this comic on the wall behind my monitor).

PS- eventually the Quickbooks people rebuilt my corrupted file before I could ever get the backup in my hands.  Object lesson here – don’t ever give up on the original file, the Intuit guys have twice in my life fixed a file that seemed corrupted beyond all hope of recovery.

I am on the road for a week long trip combining business (visits to some parks the government wants us to manage), college interviews, and baseball camps (the latter two for my son).  I will end up staying in or driving through Virginia, W. Virginia, Maryland, Pennsylvania, New Jersey, New York, Massachusetts, New Hampshire, Maine, Rhode Island, and Connecticut.

Wiretaps and government surveillance is on the rise, and it has little to do with terrorism.  The failed war on drugs continues to be the main excuse for assaults on privacy:

State and federal investigators obtained 3,194 wiretap orders in 2010, an increase of 34 percent over the previous year, and a whopping 168 percent increase over 2000. Only one wiretap application was denied—which you can choose to take as evidence that law enforcement is extremely scrupulous in seeking applications, or that judges tend to rubber stamp them, according to your preferred level of paranoia. Just half the states reported any wiretaps, and nearly 68 percent of the total 1,987 state wiretaps were attributable to just three states: California, New York and New Jersey….

Still, this invasive technique is still reserved for investigating the most serious violent crimes, right? Alas, no: For 84 percent of wiretap applications (2,675 wiretaps), the most serious offense under investigation involved illegal drugs. Further proof, if proof were needed, that privacy suffers enormous collateral damage in our failed drug war. Drugs have long been the reason for the vast majority of wiretaps, but that trend, too, is on the upswing: Drug cases accounted for “just” 75 percent of intercept orders in 2000.

I find it absolutely unsurprising that Paul Krugman was enthralled by the vision of a science that can be used by a few people to control the actions and futures of all humanity.  He said “I want to be one of those guys!”  I was captivated by the vision in the book as well, but my thought was always “how do we avoid these guys?”  The second two books were about how government planners used mind control to deal with humanity whenever individuals had the gall to circumvent their plans.  Lovely.

If I remember right, Asimov wrote the Foundation after reading the Rise and Fall of the Roman Empire.  The notion of how much of history is inevitable due to large forces (e.g. economics) vs. how much is due to the actions of individuals and what historians now call contingency (e.g. luck) is an endlessly fascinating thing to debate, and I found the Foundation books to be interesting thought exercises along these lines.  But it certainly didn’t inspire my life’s goals, any more than Dune made me wish for a religious jihad.

I can see the secret Second Foundation scratching their heads now in their secret lair (which turns out to be in the New York Times building in the middle of New York City but that’s a spoiler from the third book).  The equations show right here that a trillion dollar stimulus should have kept unemployment below 8%….

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

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

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

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

Apparently this is exactly what is happening in DC

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

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

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

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

Well, it turns out that the laws of supply and demand do indeed apply in the health care field.  Obamacare and before it Romneycare combine government subsidies of demand with cost controls mainly consisting of price caps on suppliers.  The results are exactly what any college student could predict after even one week of microeconomics 101:  shortages.

First, from the WSJ

A new survey released yesterday by the Massachusetts Medical Society reveals that fewer than half of the state’s primary care practices are accepting new patients, down from 70% in 2007, before former Governor Mitt Romney’s health-care plan came online. The average wait time for a routine checkup with an internist is 48 days. It takes 43 days to secure an appointment with a gastroenterologist for chronic heartburn, up from 36 last year, and 41 days to see an OB/GYN, up from 34 last year….

Massachusetts health regulators also estimate that emergency room visits jumped 9% between 2004 and 2008, in part due to the lack of routine access to providers. The Romney-Obama theory was that if everyone is insured by the government, costs would fall by squeezing out uncompensated care. Yet emergency medicine accounts for only 2% of all national health spending.

The emergency room data is fascinating, as crowded emergency rooms supposedly overwhelmed by the uninsured was such an important image in the campaign to pass Obamacare.  More on this from Q&O:

Hospital emergency rooms, the theory goes, get overcrowded because people without health insurance have no place else to go.

But that’s not the view of the doctors who staff those emergency departments.
The real problem, according to a new survey from the American College of Emergency Physicians,isn’t caused by people who don’t have insurance — it’s caused by people who do, but still can’t find a doctor to treat them.

A full 97 percent of ER doctors who responded to the ACEP survey said they treated patients “daily” who have Medicaid (the federal-state health plan for the low-income), but who can’t find a doctors who will accept their insurance….”The results are significant,” said ACEP President Sandra Schneider in prepared comments. “They confirm what we are witnessing in Massachusetts — that visits to emergency rooms are going to increase across the country, despite the advent of health care reform, and that health insurance coverage does not guarantee access to medical care.”

As I have been saying for a long time, the Obama health care nuts do not have any secret, magical idea or plan for cutting health care costs.  In fact, as I have written here and here, we should expect Federalization to exacerbate the bad information and incentives that make health care more expensive.  The only idea they have, in fact, is the only one that anyone ever has in government for this kind of thing — price controls

Over the weekend, The Washington Postpublished a Q&A-style explainer on the Independent Payment Advisory Board—the panel of federal health care technocrats charged with keeping down spending growth on Medicare.

The details are complicated, but the gist is simple: If spending on Medicare is projected to grow beyond certain yearly targets, then it’s IPAB to the rescue: The 15-member panel appointed by the president has to come up with a package of cuts that will hold Medicare’s growth in check. If Congress want to override that package, it only has two options: Vote to pass a different but equally large package of cuts or kill the package entirely with a three-fifths supermajority in the Senate.

The Post lays out the basic framework above. But what it doesn’t explain in any detail is exactly how those cuts will be achieved. And that, of course, is where the difficulty begins: Here’s how The Wall Street Journal’s editorial board explained it last month: “Since the board is not allowed by law to restrict treatments, ask seniors to pay more, or raise taxes or the retirement age, it can mean only one thing: arbitrarily paying less for the services seniors receive, via fiat pricing.” Medicare already centrally sets the prices it pays for the services of doctors and hospitals. Given the board’s limitations, the most likely cuts we’ll see from IPAB, then, will be arbitrary, quality-blind reductions in these payments (though hospitals will be exempt from cuts for the first couple years).

We know what happens next: Providers stop taking on new Medicare patients, or drop out of the system entirely. In Medicaid, which pays far lower rates than Medicare (which pays somewhat lower rates than private insurance), this is already common: As one emergency physician recently told The New York Times, “Having a Medicaid card in no way assures access to care.” If IPAB cuts Medicare provider payments down to the bone, it could end up transforming Medicare into a seniors’-version of Medicaid.

From the Thin Green Line, an environmental blog I often criticize for it incredible credulity in accepting bizarre figures, comes this whopper:

Is Ganja green? TGL has covered the issue before, but a new study undertaken by a Lawrence Livermore scientist gives us some real numbers (H/T New York Times Green)….

In California, indoor cultivation is responsible for a whopping 8 percent of household electricity usage. But, California grows only about a fifth of the nation’s bong hits and much of what we grow goes to out-of-state consumers….

The study, written by Evan Mills on his own (non-government-funded) time, makes the case for legalizing and regulating grow operations, suggesting that if marijuana didn’t have to be grown in secret and indoors, efficiency could be improved by as much as 75 percent.

Readers of this blog will know that I am all for marijuana legalization.  But how can anyone accept this figure.  Eight percent?  Really?   This would be larger than the total residential electricity use of Vermont and New Hampshire combined, solely for pot growing in California.  I am calling BS.

Via Reason from the pathetic hulk that was once the great state of New York

Dodgeball, Red Rover, Wiffle Ball – those time-honored kids’ games, along with activities like Steal the Bacon and Capture the Flag – have been deemed dangerous by the state as part of an effort to tighten regulations for summer camps in the area.

Any indoor or outdoor recreational program that offers two or more organized activities, including one that falls on the “risky list” determined by state officials, will be considered a summer camp under the new rules and subject to the associated regulations.

The rules aim to curtail a loophole in previously passed regulations by the state Health Department that count activities like horseback riding and archery among the “risky list,” but do not include many activities like Freeze Tag and kickball featured in indoor programs.

Update: They backed off.   Kids will still be at risk from unregulated red rover.

Donna Laframboise discusses 18th century transportation issues, and particularly the horse manure problem:

The Superfreakonomics authors draw heavily on the work of Eric Morris, whose urban planning Masters thesis explored the reality of horse-based transportation in 19th-century cities. A user-friendly encapsulation of his research appears in an 8-page article here. (It was published in Access, a U of California transportation publication. The entire issue is available here.)

Morris points out that, by the late 1800s, large urban centers were “drowning in horse manure.” Not only were there no solutions in sight, people were making dire predictions:

In 1894, the Times of London estimated that by 1950 every street in the city would be buried nine feet deep in horse manure. One New York prognosticator of the 1890s concluded that by 1930 the horse droppings would rise to Manhattan’s third-story windows.

The automobile helped solve this growing ecological problem.  Back in 2006, I had considered the same thing with a hypothetical blog post from 1870 which is pretty close to the Times of London article quoted above (which I had never seen):

As the US Population reaches toward the astronomical total of 40 million persons, we are reaching the limits of the number of people this earth can support.    If one were to extrapolate current population growth rates, this country in a hundred years could have over 250 million people in it!  Now of course, that figure is impossible – the farmland of this country couldn’t possibly support even half this number.  But it is interesting to consider the environmental consequences.

Take the issue of transportation.  Currently there are over 11 million horses in this country, the feeding and care of which constitute a significant part of our economy.  A population of 250 million would imply the need for nearly 70 million horses in this country, and this is even before one considers the fact that “horse intensity”, or the average number of horses per family, has been increasing steadily over the last several decades.  It is not unreasonable, therefore, to assume that so many people might need 100 million horses to fulfill all their transportation needs.  There is just no way this admittedly bountiful nation could support 100 million horses.  The disposal of their manure alone would create an environmental problem of unprecedented magnitude.

Or, take the case of illuminant.  As the population grows, the demand for illuminant should grow at least as quickly.  However, whale catches and therefore whale oil supply has leveled off of late, such that many are talking about the “peak whale” phenomena, which refers to the theory that whale oil production may have already passed its peak.  250 million people would use up the entire supply of the world’s whales four or five times over, leaving none for poorer nations of the world

To the last point, my article on how John D. Rockefeller and Standard Oil saved the whales is here.

In my Forbes columns over the past few weeks, I have been writing about information and incentive problems with any sort of Obamacare type system.  One of the points I made last week was this:

One of the key selling points of Obamacare was that it would reduce cost, in large part through smart public-spirited people making optimized decisions from the top in Washington.  Ignoring the fact that no other agency that has promised such angels of public service has ever delivered them, we discussed in the last few weeks how this task is impossible.  But we should have known that already through our past experience with the political process.  Political decisions are made politically, not by optimizing some public good equation.    Does anyone believe that come election time, Congress won’t vote to add mandates to procedures to placate powerful groups in their base, irrespective of the future costs this would incur?

Need an example?

In 2007 breast cancer was the third leading source of cancer mortality in the US, but it was by far the largest recipient of government cancer research dollars, nearly double that spent on any other type of cancer.    In 2009, out of hundreds of medical procedures, only two procedureswere on the mandated must-carry list of all fifty states – mammography and breast reconstruction.  It is no accident that both of these are related to breast cancer.  With its links to women’s groups and potent advocacy organizations, breast cancer is a disease that has a particularly powerful political lobby.    Similarly, we should expect that, at the end of the day, pricing and coverage decisions under Obamacare will be made politically.  Not because anyone in this Administration is particularly bad or good, but because that is what always happens.

This post from Q&O is a tad old but gets at just this point with a real-life Obamacare example

The opening line in a New York Times piece caught my attention.  It is typical of how government, once it gets control of something, then begins to expand it (and make it more costly for everyone) as it sees fit.  Note the key falsehood in the sentence:

The Obama administration is examining whether the new health care law can be used to require insurance plans to offer contraceptives and other family planning services to women free of charge.

Yup, you caught it – nothing involved in such a change would be “free of charge”.   Instead others would be taxed or charged in order for women to not have to pay at the point of service.  That’s it.  Those who don’t have any need of contraception will subsidize those who do.  And the argument, of course, will be the “common good”.   The other argument will be that many women can’t afford “family planning services” or “contraception”.

But the assumption is the rest of you can afford to part with a little more of your hard earned cash in order to subsidize this effort (it is similar to other mandated care coverage you pay for but don’t need).  Oh, and while reading that sentence, make sure you understand that the administration claims it has not taken over health care in this country.

The next sentence is just as offensive:

Such a requirement could remove cost as a barrier to birth control, a longtime goal of advocates for women’s rights and experts on women’s health.

So now “women’s rights” include access to subsidies from others who have no necessity or desire to pay for those services?  What right does anyone have to the earnings of another simply because government declares that necessary?

It is another example of a profound misunderstanding of what constitutes a “right” and how it has been perverted over the years to become a claim on “free” stuff paid for by others.

Administration officials said they expected the list to include contraception and family planning because a large body of scientific evidence showed the effectiveness of those services. But the officials said they preferred to have the panel of independent experts make the initial recommendations so the public would see them as based on science, not politics.

Really?  This is all about politics.  The fact that the services may be “effective” is irrelevant to the political questions and objections raised above.  This is science being used to justify taking from some to give to others – nothing more.

Via Megan McArdle

A New York court ruled last month that all income earned by a New Canaan, Conn., couple is subject to New York state taxes because they own a summer home on Long Island they used only a few times a year. They have been hit with an additional tax bill of $1.06 million.Tax experts and real estate brokers say this ruling could boost the tax bill for thousands of business executives who own New York City apartments they use only occasionally. It could also hurt sales in the Hamptons and New York’s other vacation-home communities.

“People will think twice about spending any summer time in New York,” says Robert Willens, a New York-based tax consultant. “The amount of tax they could be subjected to is likely to outweigh the benefit.”…

Judge Joseph Pinto, a New York administrative law judge, made the novel ruling in a 2009 case that was affirmed last month on appeal by the New York state tax appeals tribunal. Mr. Pinto seized on what is meant by a permanent residence, which is the benchmark for whether all, or just the in-state portion, of an individual’s income is subject to New York state tax.

Mr. Pinto ruled that the couple’s Long Island vacation home qualifies under the law as a permanent abode because it was suitable for living year-round–whether or not the couple actually stayed in the home wasn’t relevant. Under the ruling, if an owner doesn’t spend a single a day in a home it could still count toward a permanent residence.

I didn’t really need a reason to not buy a home in the Hamptons, but just in case I were tempted, this would pretty much kill any such desire.  This, however, strikes me as one of those games (like trade wars) that New York has not thought out well before starting.  My admittedly uneducated guess from knowing some New Yorkers is that more New Yorkers own 2nd homes in Connecticut than vice versa.  If New York state is going to lose a tit for tat tax war if this is the case.

I return to an old favorite topic of mine this week, government subsidies for business relocation, in my column at Forbes.com.  An excerpt:

To see this clearer, lets take the example of Major League Baseball (MLB).  We all know that cities and states have for years been massively subsidizing new baseball stadiums for billionaire team owners.  Let’s 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.  Would baseball 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.  But would baseball be in the same cities?  Well, without subsidies, baseball would likely 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 might 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.

If there is anything creepier than weird children’s art on the walls of an abandoned mental institution, I am not sure what it is.  From here. (for those who like urban architecture, urban archeology, and/or New York, this is a great site).

I flew to New York to go in studio on the Stossel show today.  I did a brief bit on the minimum wage, a reprise from my earlier cameo on Stossel special.  It will be on tomorrow, Thursday at 9PM Eastern on Fox Business  (not Fox News, Fox Business).

The whole experience was new to me, which made me virtually unique as I was surrounded by policy wonks who do this kind of talking head thing all the time.   By the way, there was no sharing of questions or his plan in advance — I think they want you cold.  So answers are all in real time.

Please, please, please do not write me or post comments such as “you should have said ____.”  It will just depress me.  Believe me, 5 minutes after walking out I thought of 9 things I should have said.  Which is in fact why I blog rather than engage much any more in real time argument.

Anyway, I think his show will be pretty good — he has Michael Cannon on health care and segments after mine on cash for clunkers and alpaca subsidies.  I shared the green room with an alpaca, which will probably just go to prove the old saying about always getting upstaged by kids and animals.

By the way, I think Stossel must set a different tone for his staff than is normal on TV.  I was talking to one of his producers, a guy that had come with Stossel from ABC, and I asked him if he had studied something relevant to this job in college.  I expected him to say “yes, theater” or “yes, television production.”  But he said “yes, economics at George Mason.”  I loved that answer.

From the Chronicle of Higher Education via TaxProf Blog

If you want to get a job at the very best law firm, investment bank, or consultancy, here’s what you do:

1. Go to Harvard, Yale, Princeton, or (maybe) Stanford. If you’re a business student, attending the Wharton School at the University of Pennsylvania will work, too, but don’t show up with a diploma from Dartmouth or MIT. No one cares about those places. … That’s the upshot of an enlightening/depressing study about the ridiculously narrow-minded people who make hiring decisions at the aforementioned elite companies. … These firms pour resources into recruiting students from “target schools” (i.e., Harvard, Yale, Princeton) and then more or less ignore everybody else. Here’s a manager from a top investment bank describing what happens to the resume of someone who went to, say, Rutgers: “I’m just being really honest, it pretty much goes into a black hole.”

Being, I suppose, an insider to this process (Princeton – Harvard Business School – McKinsey & Company) I’d like to make a few comments

• First and foremost, this problem cuts both ways.  I can imagine outsiders are frustrated with the lack of access.  But as an insider I can tell you  (cue Admiral Akbar) It’s a Trap!  You go to Princeton, think, wow, I did well at Princeton, it would be a waste not to do something with that.   You are a competitive sole, so getting into a top grad school is an honor to be pursued just like good grades.   So you go to Harvard Business School (it could have been Harvard Law) and do well.  And what is the mark of achievement there? — getting a job at a top consultancy or top investment bank.  So you take the McKinsey job, have your first kid, and what do you find out?  Wow, I hate this job!  In fact, the only thing I would have hated more is if I had taken that Wall Street job.   Eventually you find happiness running your own company, only to discover your Ivy League degrees are a liability since they intimidate your employees from sharing their ideas and most of the other guys you know successfully running businesses went to Kansas State or Rutgers.
• My only data point inside this hiring process is from McKinsey about 15-20 years ago, so it may be out of date.    But at that time, the above statement would be BS.  Certainly hiring was heavily tilted to the top Ivies and a few top business schools.  But we had people with undergrad degrees from all over – in fact most of our office in Texas had undergrad degrees from the Texas state schools  (at lot from BYU too — McKinsey loved the Mormons).  At the time, McKinsey was hiring hundreds of people out of business school around the world each year.  No way this could have come from only a few schools.
• My hypothesis is that this may be more a regional than an industry bias, limited to Boston/New York/East Coast.  Since many top law firms and consultancies and investment banks are in NYC, they reflect this local bias.  But I would bet these same firms and industries hire differently outside of the East Coast.
• There is some rationality in this approach – it is not all mindless snobbism.   Take Princeton.  It screens something like 25,000 already exceptional applicants down to just 1500, and then further carefully monitors their performance through intensive contact over a four year period.  This is WAY more work and resources than a private firm could ever apply to the hiring process.  In effect, by limiting their hiring to just a few top schools, they are outsourcing a lot of their performance evaluation work to those schools.

From New York City Councilman James Genarro’s web site:

Gennaro has received numerous accolades for his work as Chairman of the Council’s Committee on Environmental Protection, and has authored many of the Council’s most progressive environmental bills. Gennaro has spearheaded efforts to cut the city’s global warming pollution emissions,… put more “clean air” vehicles on city streets, …make the city’s electricity more reliable, clean, and affordable,… and promote “green buildings”.

Thinking about the public and private resources invested in these efforts, I wonder how many snow plows they would have paid for.

From environmental blog the Thin Green Line:

Well, as usual, the progressives have the rights and roles of private individuals vs. government exactly backwards, from Kevin Drum:

As I said earlier, I’m on the fence a bit about whether an indiscriminate release of thousands of U.S. embassy cables is useful. After all, governments have a legitimate need for confidential diplomacy. But when I read about WikiLeaks’ planned financial expose [release of private emails from a private corporation], I felt no such qualms. A huge release of internal documents from a big bank? Bring it on!

The government and public officials acting in a public capacity have no rights to privacy of their work and work products from the public that employs them (except to the extent that privacy pays some sort of large benefit, which I would define pretty narrowly).  While things like the recent Wikileak are certainly damaging to things like sources and foreign relations, I have sympathy for such a mass dump when the government so systematically defaults to too much secrecy and confidentiality for what should be public business, mainly to avoid accountability.  The public has the right to know just about whatever the government is doing, in detail.

In the private sector, ordinary citizens have no similar “right to know” the private business of private entities, the only exception being in criminal investigations where there are clear procedures for how confidential private information may be obtained, used, and protected.  Had the proposed email dump related to alleged misconduct, I would have been pretty relaxed about it.  But the proposed document dump is just voyeurism.  One may wish for more accountability processes vis a vis banks, but in a country supposedly still founded on the rule of law, we don’t get to invent new ex post facto rules, such as “if your industry pisses off enough Americans, all the material that was previously legally private is retroactively made part of the public domain.”

Drum may be gleeful now, but someday he just might be regretful of establishing a precedent for consequence-free theft and publication of private information.   Had, for example, the words “big bank” in the paragraph been replaced by, say, “Major newspaper,” we would likely see Drum in a major-league freak out, though the New York Times corporation has exactly the same legal status as Citicorp.

Everyone thinks his own information is “different” and somehow on a higher plane than other people’s information.  Drum likely thinks his communication by email with sources is special, while I would argue release of my confidential internal communication about new service offerings and pricing strategies would be particularly damaging.  The way we typically settle this is to say that private is private, and not legally more or less private based on subjective opinions by third parties about the value of the data.

I must say I am feeling pretty good about my comments from Inauguration Day two years ago.  Here is an excerpt of what I wrote:

Folks are excited about Obama because, in essence, they don’t know what he stands for, and thus can read into him anything they want.  Not since the breathless coverage of Geraldo Rivera opening Al Capone’s vault has there been so much attention to something where we had no idea of what was inside.  My bet is that the result with Obama will be the same as with the vault.There is some sort of weird mass self-hypnosis going on, made even odder by the fact that a lot of people seem to know they are hypnotized, at least at some level.  I keep getting shushed as I make fun of friends’ cult behavior watching the proceedings today, as if by jiggling someone’s elbow too hard I might break the spell.  Never have I seen, in my lifetime, so much emotion invested in a politician we know nothing about.   I guess I am just missing some gene that makes the rest of humanity receptive to this kind of stuff, but just for a minute snap your fingers in front of your face and say “do I really expect a fundamentally different approach from a politician who won his spurs in …. Chicago?  Do I really think the ultimate political outsider is going to be the guy who bested everyone at their own game in the Chicago political machine?”

Well, the spell will probably take a while to break in the press, if it ever does — Time Magazine is currently considering whether it would be possible to put Obama on the cover of all 52 issues this year — but thoughtful people already on day 1 should have evidence that things are the same as they ever were, just with better PR.   For God sakes, as his first expenditure of political capital, Obama is pushing for a trillion dollar government spending bill that is basically one big pork-fest that might make even Ted Stevens blush, a hodge-podge of every wish-list of leftish lobbyists that has been building up for eight years.  I will be suitably thrilled if the Obama administration renounces some of the creeping executive power grabs of the last 16 years, but he has been oddly silent about this.  It seems that creeping executive power is a lot more worrisome when someone else is in power.

To this last point, the recent recommendations by the Center for American Progress to Obama are pretty chilling.

[The] Center for American Progress today is releasing a report, “Power of the President,” proposing 30 executive actions the president can take to advance progressive change in the areas of energy, the economy, health care, education, foreign policy, and national security. “The following authorities can be used to ensure progress on key issues facing the country today: Executive orders, Rulemaking, Agency management, Convening and creating public-private partnerships , Commanding the armed forces, Diplomacy.

The New York Times fleshes out these proposals with some suggestions about policy changes across the board. The ideology of George Soros shines through the Center’s report as it justifies this forceful approach to circumvent Congress when it states that:

[The] legislative battles that Mr. Obama waged during his first two years – notably on health care and financial regulatory reform – have created a weariness among the general public with the process of making laws. And it hints it has not helped Mr. Obama politically in the process.

In other words, when Congress passed a variety of laws Americans became dismayed by the horse-trading and bribes that were resorted to by Democrats to impose these policies on us. Instead of compromise and listening to the American people, Soros counsels that more forceful measures should be used to override the will of the American people.

From the WSJ:

The wide-ranging pay-to-play probe concerns whether investment firms like Mr. Rattner’s former firm, Quadrangle Group LLC, were held up for fees and favors to secure access to lucrative business from New York’s $125 billion public-pension fund.

So government officials, who have all the power, demand bribes from businesses in order for those businesses to participate in a certain market, and when discovered it is the private businesses that are being investigated?

This is just so typical of government, where pay-to-play rules are in fact legislated for businesses from bars to taxicabs.  I can’t do anything new in Ventura County without bringing a whole series of checks to the County planning offices — nearly every single department must be paid off before I can do something as simple as remodel a bathroom or revamp a store.  None of this is under the table, mind you, it is entirely up front and nominally legal.

From the New York Daily News, quoting VP Biden: (via Maggies Farm)

Every single great idea that has marked the 21st century, the 20th century and the 19th century has required government vision and government incentive

Wow, its hard to believe that even a hard core statist believes this in the face of historical evidence, but there it is.  The example  (and remember even a single correct example does not support the word “every”) is an interesting one:

“In the middle of the Civil War you had a guy named Lincoln paying people $16,000 for every 40 miles of track they laid across the continental United States. … No private enterprise would have done that for another 35 years.”

I am actually stunned that he is historically literate enough to get the second part of this right, that there was in fact a single transcontinental railroad, James J Hill’s Great Northern, that completed its line without government subsidies or land grants.  He even gets the date about right.  A few thoughts:

• Not mentioned by Biden is the emergence of the entire rest of the US railroad industry, which by 1860 had about 30,000 miles of track, mostly via private initiative.
• I think the original transcontinental railroad has interesting parallels to the Apollo program — certainly government action got us into space and a transcontinental railroad faster than private action, but it could be argued that both delayed private initiative in these areas longer than would have occurred without the action.
• For Lincoln in the Civil War, the transcontinental had as much to do with cementing Union control of California as it did promoting commerce or any other values

Here is my favorite fact — Every single transcontinental railroad went bankrupt at least once before 1925, except one.  Can you guess which one did not?  Yes, it was the Great Northern, the only one built entirely with private capital.

Maybe its because I live in Phoenix, but the local food movement has always seemed silly to me.  To somehow argue that food grown in our 6 inches of annual rainfall is better for the environment than trucking product in from more suitable growing regions has always struck me as crazy.  Russ Roberts links several good articles on the local food movement, one of which included this nice snarky observation:

The result has been all kinds of absurdities. For instance, it is sinful in New York City to buy a tomato grown in a California field because of the energy spent to truck it across the country; it is virtuous to buy one grown in a lavishly heated greenhouse in, say, the Hudson Valley.