Posts tagged ‘new york’

Thoughts on the Japanese Economy

I would characterize long-term Japanese economic policy this way:

  • Technocratically planned economy where the government chose winners and losers and directed capital to industries favored for development (e.g. MITI with steel, autos, electronics).
  • Strong government favoritism for exports and exporters over the domestic economy -- export industries are heavily protected at the cost of raising costs for internal consumers and limiting competition in domestic markets.
  • Enormous, near Herculean commitment to deficit spending as stimulus.  With deficits consistently running in the 8% of GP range and total government debt a stratospheric levels, Japan is the poster child for Krugman's anti-austerity

To these three I would add something that is seldom mentioned, that Japan has a near Scandinavian GINI index, with income inequality well under that of the US.  Oh yes, and they were an enthusiastic adopter of CO2 limits.

And the result of all this has been... 25 years of stagnation.

I remember when every one of these three planks was enthusiastically lauded by the US elite.  I was at Harvard Business School in the late 1980's and much of the discussion was about the US needing to adopt MITI-like government industrial planning and management.  If pressed at the time, people might kind of sort of acknowledge that life wasn't so good for Japanese consumers, but we were in a Michael Porter big picture competitiveness-of-nations phase, and no one seemed to care that their definition of national success did not turn out so well for the people actually living there.

To me, Japan is a giant case study in Austrian economics.  It's like they set out to run a quarter-century test: "let's see if mispricing of credit and forced misallocation of capital is really the cause of recessions."  So it is amazing that no one seems to want to acknowledge the results of this experiment.  Paul Krugman appears weekly in the New York Times to frequently advocate for exactly this same economic plan.

Because Money Isn't Everything

One of the mistakes people make in economic analysis, IMO, is that they sometimes miss non-monetary benefits.  A great example is how labor law and the minimum wage is structured -- there are many benefits of a having job to a young, unskilled, unemployed person.  That job may teach valuable industry-related skills and will almost certainly help teach some basic life skills (like how to show up on time every day and how to work with others in an organization toward shared goals).  For my kids when they were 15 or 16, these non-monetary benefits dominated, and I would have been happy if they worked for free in exchange for such skills.  That used to be the whole point of unpaid internships, until the government started essentially banning them.  Unfortunately, the government considers only money in computing the minimum wage, and ignores all these non-monetary benefits.

Mark Perry had what I think is another good example a while back, quoting from the Priceonomics blog:

If you want to dine at State Bird Provisions, you’ll have to get in line. The small restaurant, winner of the James Beard Award for Best New Restaurant (2013) and a Michelin Star, only accepts a few reservations that are snapped up as soon as they are released — at midnight, sixty days in advance. So nearly every day, people line up on Fillmore Street in San Francisco an hour or more before State Bird’s 5:30pm opening time to score a table.

It may seem silly to line up for State Bird Provisions in a city full of renowned restaurants and good food. But as anyone who has eaten brunch in the city knows, San Franciscans view long restaurant lines as social proof more than as a deterrent. Besides, State Bird offers determined diners a relative bargain. While its offerings are not cheap — even without indulging on wine, bills can reach $50 per person — State Bird’s prices are more modest than almost any other local Michelin Star restaurant.

This makes State Bird something of an economic mystery.If economists owned popular restaurants like State Bird, they would take one look at the long lines and raise prices.After all, the overwhelming demand is pretty clear. Or at the very least, given how reservations disappear like Coachella tickets, they would start charging for them. In fact, since restaurants do not do this, a number of startups in San Francisco and New York City have started to sell reservations to users, often by reserving tables and scalping them.

In contrast to the executives who run large restaurant chains, the restaurateurs behind celebrated restaurants and local favorites are often chefs first rather than professional managers. This raises the question: Are restaurants like State Bird Provisions, which seems to resist simple economic analysis, the exception or the norm? And if they are the norm, is that because it is somehow self-defeating to raise prices even at booming restaurants? Or are chef proprietors a unique breed in the business world, immune to supply and demand and content to leave money on the table?

I believe that many of these high-end chefs are not driven entirely by money.  Their personal reward system also depends a lot on prestige and recognition.  Making a good profit in a restaurant gets you no recognition in the the circles where chef's crave it.  Name the three most profitable restaurants in town -- you have no idea, do you?  What get's these chef's recognition is being the hot place to dine that is so in demand it is impossible to get a table.  So one makes the restaurant a little too small and keeps the prices a little too low and one trades a bit of money for something that is more valuable:  prestige.

One can see this same effect among, say, US Senators.  In our current corporate, crony state, US Senators can expect a huge spike in income once they leave Congress, getting paid by some large corporation lobbying firm.  The economically rational decision, then, if one were only interested in money, would be to serve just one term, then leave and make some bank.   But you never see that.  Senators stay and stay, even when it is an enormous hassle to do so.  They are essentially collecting and spending millions every election to keep their income low.  Why?  One big reason is prestige.

Going back to the restaurant example, let's consider a famous chef who pretty clearly does care about money:  Wolfgang Puck.  I have never seen this written, but here is what I observe to be Puck's approach.  He creates a small restaurant and lavishes it with a lot of his personal attention.  These restaurants do not have much seating and become the hot places to dine, leading to long lines and difficult reservations.  The difficulty of getting a table generates an elite buzz around the restaurant.  After some time, Puck will buy a huge new location nearby with many times more seating.  He formula-izes his recipes so he no longer has to be involved, and then shifts the operation onto auto-pilot in the new large location.  Perhaps he even franchises it.  The new location cranks out a bunch of money, while he moves on to create a new elite concept.  He also leverages the original buzz in his personal brand, which is applied to all kinds of other items.  In a sense, he is banking prestige in the early venture and then monetizing it later.

"Ban the Box" And Corporate Liability -- When A Company Can Be Sued Both for Doing A and Not A.

New York City has instituted a draconian "ban the box" law that makes it extremely difficult for employers to avoid hiring people with criminal records  (via Overlawyered)

The bill, which is likely to become law in some form, would prohibit the commonly used "check boxes" on job applications that ask about past convictions. It also would forbid employers from asking questions about an applicant's criminal history until a conditional job offer has been tendered....

The bigger concern is lawsuits from job seekers. To be able to reject an applicant because of a past conviction, employers would have to go through a rigorous process that, if not followed, would result in the presumption that a business owner engaged in unlawful discrimination, Mr. Goldstein said.

“I think you’d see some increases in litigation, and this is not exactly a well-settled area of law,” he said.

Proponents say the bill would simply offer a clearer way for businesses to follow state law requiring employers to go through a multistep test to determine if an applicant's past criminal behavior correlates with the position being sought.

Additionally, the City Council bill would allow an applicant rejected because of a past crime seven days to respond. The job would have to be held open during that time.

An employer's failure to adhere to the process could lead to a fine of at least $1,000. In the bill's current form, the business would bear the burden of proof in any resulting lawsuit by the job applicant, Mr. Goldstein said.

“Rather than the normal context, we have the burden here shifting,” he said. “It would be on the employer to present clear and convincing evidence that it had not engaged in unlawful discrimination.”

Given that the burden of proof seems to be on businesses in employee lawsuits even when the playing field is supposed to be level, I shudder to think what a statutory burden of proof would mean.  Likely an automatic win for any employee.

Given this, here is a question for you:  Imagine that I hired a convicted felon who then committed a crime against one of my customers.    Would I be shielded from liability because I had limited ability to screen out candidates who posed dangers to customers?  HA!  No way.  The plaintiff's attorney for the customer would be in front of the jury making me look like Attila the Hun for not screening felons from my applicant pool, even as the government made that task effectively impossible.

That is the key to this law -- that proponents can claim that one can screen out felons "if appropriate to the job" but in fact the law makes it effectively impossible to do so without imposing staggering litigation costs on me.  So we get the Leftist ideal - I can be sued by employees for screening out felons and I can simultaneously be sued by customers for not screening out felons.

Forget Halbig. Obama May Have Lost the Senate By Giving Subsidies to the Federal Exchange

In Halbig, the DC Circuit argued that the plain language of the PPACA should rule, and that subsidies should only apply to customers in state-run exchanges.  I am going to leave the legal stuff out of this post, and say that I think from a political point of view, Obamacare proponents made a mistake not sticking with the actual language in the bill.  The IRS was initially ready to deny subsidies to the Federal exchanges until Administration officials had them reverse themselves.  When the Obama Administration via the IRS changed the incipient IRS rule to allow subsidies to customers in Federal exchanges, I believe it panicked.  It saw states opting out and worried about the subsidies not applying to a large number of Americans on day 1, and that lowered participation rates would be used to mark the program as a failure.

But I think this was playing the short game.  In the long game, the Obama Administration would have gone along with just allowing subsidies to state-run exchanges.  Arizona, you don't want to build an exchange?  Fine, tell your people why they are not getting the fat subsidies others in California and New York are getting.  Living in Arizona, I have watched this redder than red state initially put its foot down and refuse to participate in the Medicaid expansion, and then slowly see that resolve weaken under political pressure. "Governor Brewer, why exactly did you turn down Federal Medicaid payments for AZ citizens?  Why are Arizonans paying taxes for Medicaid patients in New Jersey but not getting the benefit here?"

Don't get me wrong, I would like to see Obamacare go away, but I think Obama would be standing in much better shape right now had he limited subsidies to state exchanges because

  1. The disastrous Federal exchange roll-out would not have been nearly so disastrous without the pressure of subsidies and the data integration subsidy checks require.  Also, less people would have likely enrolled, reducing loads on the system
  2. Instead of the main story being about general dissatisfaction with Obamacare, there would at least be a competing story of rising political pressure in certain states that initially opted out to join the program and build an exchange.  It would certainly give Democrats in red and purple states a positive message to run on in 2014.

Bundy Ranch the Wrong Hill for Libertarians to be Dying On

Here is something I find deeply ironic:  On the exact same day that Conservatives were flocking to the desert to protest Cliven Bundy's eviction from BLM land, San Francisco progressives were gathering in the streets to protest tenant evictions by a Google executive.   To my eye, both protests were exactly the same, but my guess is that neither group would agree with the other's protest.  I think both protests are misguided.

In the case of Cliven Bundy, I agree with John Hinderaker, right up to his big "But...."

First, it must be admitted that legally, Bundy doesn’t have a leg to stand on. The Bureau of Land Management has been charging him grazing fees since the early 1990s, which he has refused to pay. Further, BLM has issued orders limiting the area on which Bundy’s cows can graze and the number that can graze, and Bundy has ignored those directives. As a result, BLM has sued Bundy twice in federal court, and won both cases. In the second, more recent action, Bundy’s defense is that the federal government doesn’t own the land in question and therefore has no authority to regulate grazing. That simply isn’t right; the land, like most of Nevada, is federally owned. Bundy is representing himself, of necessity: no lawyer could make that argument.

It is the rest of the post after this paragraph with which I disagree.  He goes on to explain why he is sympathetic to Bundy, which if I may summarize is basically because a) the Feds own too much land and b) they manage this land in a haphazard and politically corrupt manner and c) the Feds let him use this land 100 years ago but now have changed their mind about how they want to use the land.

Fine.  But Bundy is still wrong.  He is trying to exercise property rights over land that is not his.   The owner gave him free use for years and then changed its policy and raised his rent, and eventually tried to evict him.  Conservatives and libertarians don't accept the argument that long-time tenancy on private land gives one quasi-ownership rights (though states like California and cities like New York seem to be pushing law in this direction), so they should not accept it in this case.   You can't defend property rights by trashing property rights.   Had this been a case of the government using its fiat power to override a past written contractual obligation, I would have been sympathetic perhaps, but it is not.

I would love to see a concerted effort to push for government to divest itself of much of its western land.  Ten years ago I would have said I would love to see an effort to manage it better, but I feel like that is impossible in this corporate state of ours.  So the best solution is just to divest.  But I cannot see where the Bundy Ranch is a particularly good case.  Seriously, I would love to see more oil and gas exploration permitted on Federal land, but you won't see me out patting Exxon on the back if they suddenly start drilling on Federal land without permission or without paying the proper royalties. At least the protesters in San Francisco likely don't believe in property rights at all.  Conservatives, what is your excuse?

I suppose we can argue about whether the time for civil disobedience has come, but even if this is the case, we have to be able to find a better example than the Bundy Ranch to plant our flag.

About those "Rising Transit Use" Numbers

From Randal O'Tooole

The American Public Transportation Association (APTA) argues that a 0.7 percent increase in annual transit ridership in 2013 is proof that Americans want more “investments” in transit–by which the group means more federal funding. However, a close look at the actual data reveals something entirely different.

It turns out that all of the increase in transit ridership took place in New York City. New York City subway and bus ridership grew by 120 million trips in 2013; nationally, transit ridership grew by just 115 million trips. Add in New York commuter trains (Long Island Railroad and Metro North) and New York City transit ridership grew by 123 million trips, which means transit in the rest of the nation declined by 8 million trips. As the New York Timesobserves, the growth in New York City transit ridership resulted from “falling unemployment,” not major capital improvements.

Meanwhile, light-rail and bus ridership both declined in Portland, which is often considered the model for new transit investments. Light-rail ridership grew in Dallas by about 300,000 trips, but bus ridership declined by 1.7 million trips. Charlotte light rail gained 27,000 new rides in 2013, but Charlotte buses lost 476,000 rides. Declines in bus ridership offset part or all of the gains in rail ridership in Chicago, Denver, Salt Lake City, and other cities. Rail ridership declined in Albuquerque, Baltimore, Minneapolis, Sacramento, and on the San Francisco BART system, among other places.

It looks like Chris Christie was doing his part to increase transit ridership in New York.

By the way, the phenomenon of small increases in light rail use offset by large drops in bus ridership is extremely common, almost ubiquitous.  Cities build flashy prestige rail projects that cost orders of magnitude more to build and operate than bus service, and are much less flexible when the economy and commuting patterns change.  Over time, bus service has to be cut to pay the bills for light rail.  But since a given amount of money spent on buses tends to carry more than 10x the passenger miles than the same amount spent on light rail, total ridership drops even while spending rises.  That is what is going on here.

Light rail is all about politician prestige, civic pride, and crony favoritism for a few developers with land along the route.  It is not about transit sanity.

These Are the Same Folks Who Denounced the Koch Brothers' Political Participation the Other Day

An excellent editorial from Tim Carney

Democrats occupied the Senate floor all night Monday, talking aboutclimate change. They didn't try to advance any legislation, and they didn't even try very hard to get media attention.

“The members know that serious climate change legislation stands no chance of passage in this divided Congress,” wrote the New York Times' climate-change reporter, Coral Davenport. Beyond that, Democrats know that action on climate legislation would help Republicans take the Senate in 2014.

So why occupy the Senate floor talking about the issue? In short: Faith, identity and cash.

The liberal climate cause is easier to understand if you think of it as a religion. Monday’s talkathon sounded at times like a religious revival. Senators spoke about the faithful who “believe in wind” and “believe in renewable” energy. Sen. Chris Coons, D-Del., said climate for him is “a faith issue.”

One doctrine in the Church of Climate is sola fide. In the words of Reformation theology: Justification comes through faith alone. “Good works” are irrelevant....

Beyond exercises in faith and identity politics, the Democratic all-nighter should be understood as a very odd fundraiser. Most fundraisers feature one or two politicians speaking to dozens of donors. Monday night featured a dozen politicians speaking to one donor: Energy billionaire Tom Steyer.

Steyer, having made his riches partly in green energy and fossil fuels, has decided to spend his billions electing Democrats who will pass climate legislation. He says he’s divested from his energy holdings, signifying his intentions are sincere.

Steyer spent $8 million to help elect Terry McAuliffe governor of Virginia last fall. “Steyer will inject millions into assorted races” in 2014, reports Joe Hagan in Men's Journal. Steyer has made it very clear what a politician needs to do to get his money: Make a big deal about climate change.

By the way, kudos to Carney for getting this correct.  It seems like an easy nuance to get accurately, but no one in the media ever does

Democrats called Republicans “deniers” 28 times during the talkathon. Majority Leader Harry Reidframed his speech this way: “Despite overwhelming scientific evidence and overwhelming public opinion, climate change deniers still exist.”

There’s an ounce of truth to this attack: Some Republicans wrongly deny that carbon dioxide and similar gasses exert a net upward pressure on atmospheric temperature, and that this has affected the climate.

But liberals hurl the term “climate denier” at anyone who doubts the hyperbolic catastrophic predictions of Al Gore, posits that non-manmade factors (like the sun) may also drive climate change, or opposes Democrats policies — the same policies Democrats aren’t actually trying to pass.

I have actually learned to embrace the "denier" label.  When it is applied to me, I agree that I am, but that one has to be careful what exact proposition I am denying.  I don't deny that the world has warmed over the last 100 years or that man-made CO2 has contributed incrementally to that warming, both now and in the future.  What I deny is the catastrophe.

Krugman the Hack vs. Krugman the Economist

I am simply exhausted with Paul Krugman calling people anti-science neanderthals for staking out fairly mainstream economic positions that he himself has held in the past.  It would be one thing to say, "well, I used to believe the same thing but I changed my mind because x, y, z".  That would be a statement to respect.  Instead Krugman 1) pretends he never said any such thing and 2) acts like his opponent's position is so out of the mainstream that they are some sort of terrorist for even suggesting it.

I had an example just the other day.

Here is another, from Ben Domenech:

Yesterday, New York Times columnist and CUNY economics professor Paul Krugman had some very strong words about the position in Republican Congressman Paul Ryan’s new poverty report that American welfare programs discourage work and “actually reduce opportunity, creating a poverty trap.”  In fact, after contrasting the Ryan report’s view on poverty traps with some data on inequality and welfare states, Krugman resoundingly concluded that Ryan’s ideas were a total sham:

So the whole poverty trap line is a falsehood wrapped in a fallacy; the alleged facts about incentive effects are mostly wrong, and in any case the entire premise that work effort = social mobility is wrong.

Despite Krugman’s strong conclusions, however, Ryan’s views about US welfare policies and poverty traps are actually pretty mainstream – cited by people across the political spectrum as a big reason to reform state federal poverty programs.  In fact, a New York Times columnist and Princeton economics professor expressed these widely-held views on the Old Grey Lady’s pages a mere two months ago:

But our patchwork, uncoordinated system of antipoverty programs does have the effect of penalizing efforts by lower-income households to improve their position: the more they earn, the fewer benefits they can collect. In effect, these households face very high marginal tax rates. A large fraction, in some cases 80 cents or more, of each additional dollar they earn is clawed back by the government.”

Even more, the Ryan report’s “poverty trap” analysis is based on the work of the Urban Institute’s Gene Steuerle’s (see p. 7 of the Ryan report), on whom the very same Princeton professor once wrote:

[I]t’s actually a well-documented fact that effective marginal rates are highest, not on the superrich, but on workers toward the lower end of the scale. Why? Partly because of the payroll tax, but largely because of means-tested benefits that fade out as your income rises. Here’s a recent discussion by Eugene Steuerle

That professor, if you haven’t already guessed, was none other than Paul Krugman. 

By the way, can I say how happy the first sentance of this quote makes me, to no longer see my alma mater mentioned in the same breath as Krguman at every turn?

Chevron Ecuador Judgement Obtained Through Fraud and Bribery

Update:  If you want to understand how deep the fraud runs, make sure to watch the 60 second video below with the US environmentalists caught on tape plotting their fraud.

Via Bloomberg:

U.S. District Judge Lewis Kaplan in Manhattan said today that the second-largest U.S. oil company provided enough evidence that a 2011 judgment on behalf of rain forest dwellers in the country’s Lago Agrio area was secured by bribing a judge and ghostwriting court documents. Kaplan oversaw a seven-week nonjury trial over Chevron’s allegations.

“The decision in the Lago Agrio case was obtained by corrupt means,” Kaplan said in an opinion that gave Chevron a sweeping victory. “The defendants here may not be allowed to benefit from that in any way.”

Chevron, based in San Ramon, California, was ordered to pay $19 billion to a group of farmers and fishermen by the Ecuadorean court. The award was reduced to $9.5 billion on Nov. 12 by the Ecuadorean National Court of Justice, the nation’s highest tribunal. That's almost half of its 2013 profit.

The Ecuadorean villagers, and activists working on their behalf, argued the oil producer should be held financially responsible for pollution of the Amazon rainforest by Texaco Inc. from the 1960s through the early 1990s. Chevron, which bought Texaco in 2001, claims the company already paid $40 million to clean up its share of the drilling contamination....

In its racketeering case before Kaplan, Chevron alleged that a U.S. lawyer leading the Ecuadoreans, Steven Donziger, and members of his team engaged in “repeated acts of fraud, bribery, money laundering” and obstruction of justice in pursuit of a multibillion-dollar payout.

I don't think there is any doubt that Chevron owed the Ecuadorans some clean up, since even they have agreed to doing work there.  And it is not unreasonable to be skeptical that Chevron's actions were perhaps incomplete.  But the $19 billion judgement always has smelled, particularly when the judge in the Ecuadoran case publicly admitted he had been bribed.

There was deep corruption in this case from the start, corruption that never will be adequately covered in the media because it "was for a good cause."  Similar levels of corruption by Chevron would have led the front page of the New York Times for weeks.

As a reminder, let me quote from an earlier story.  Please watch the short video, it is amazing:

The clip below is an outtake from the environmentalist movie "Crude", which purported to document the environmentalist's case against Chevron in Ecuador.  Apparently, between takes of earnest and un-selfinterested environmentalists saving the world from greedy corporations, these self-same environmentalists discussed lying about the science and duping the courts in order to score a big payday for themselves.

The video is doubly interesting because, as Anthony Watts explains, the woman in the video taking money to make up untrue findings was recently confirmed to the NAS, where there is a good bet that we will see her as the source for "evidence" that fracking is contaminating groundwater.  These three folks are all the subject of a civil suit from Chevron but all three should be subject to criminal charges for fraud and conspiracy.

Several of the environmentalists involved, including Dr. Ann Maest, have since recanted their corruption, sort of.  They claim they were "misled" in this New York Times story, but the clip above certainly belies that.  Donziger did not mislead her, he is seen convincing her that in Ecuador they can get away with lying.  All for a good cause, of course.

Dispatches from the echo chamber:  Mother Jones was on this story full force for years.  Then suddenly stopped reporting at all when it became clear that allegations of fraud were credible.  Check out the articles.

Update:  More here

A Proposal For Better Management of the (Soon to Be) California Climate Slush Fund

California is about to implement a new climate tax via a cap and trade system, where revenues from the tax are supposed to be dedicated to carbon reduction projects.  Forget for a moment all my concerns with climate dangers being overhyped, or the practical problems (read cronyism) inherent in a cap-and-trade system vs. a straight carbon tax.  There is one improvement California can and should make to this system.

Anyone who can remember the history of the tobacco settlement will know that the theory of that settlement was that the funds were needed to pay for additional medical expenses driven by smoking.  Well, about zero of these funds actually went to health care or even to smoking reduction programs  (smoking reduction programs turn out to be fiscally irresponsible for states, since they lead to reduced tax revenues from tobacco taxes).  These funds just became a general slush fund for legislators.   Some states (New York among them, if I remember correctly), spent the entire 20 year windfall in one year to close budget gaps.

If California is serious that these new taxes on energy should go to carbon reduction programs, then these programs need to be scored by a neutral body as to their cost per ton of CO2 reduction.  I may think the program misguided, but given that it exists, it might as well be run in a scientific manner, right?  I would really prefer that there be a legislated hurdle rate, e.g. all programs must have a cost per ton reduction of $45 of less -- or whatever.  But even publishing scores in a transparent way would help.

This would, for example, likely highlight what a terrible investment this would be in reducing CO2.

 

Unreported Obamacare Data -- Exchange Sales Conversion Is Much Worse When The Taxpayer is Not Subsidizing the Policy

I like digging through the raw data in the Obamacare report rather than just accepting the bits the New York Times wants to report.  As a business guy, I was looking at the data from a sales-conversion perspective -- ie, who is buying and who is not?  And of course, why?

When I was in the marketing world, we used to call the process of sales conversion the sales funnel.  For the exchanges this means some percentage of the available market actually show up at the exchange, and then some percentage of those actually complete the arduous sign-up process, and some percentage of those actually select a policy, and presumably some percentage of those actually pay, though we don't know what that latter percentage is.  At each step, we ask ourselves what people are we converting from one step to the next, and why.

Here is the Obamacare exchange sales funnel through December (as has become tradition, it is a scavenger hunt to fill this in and the data locations move around from month to month).

click to enlarge

 

As you can see, of the nearly 3.7 million people who have selected a private plan or been put in Medicaid or CHIP, fully 88% are on the government dole (subsidized or full Medicare).

The interesting new data is on the plan selection breakdown between subsidized and un-subsidized.   This leads to an interesting finding that is a bit non-obvious from the report itself because the data is spread all over the report.  But lets look at conversion of applicants to plan selection based on whether folks are subsidized or subsidized.

For the 2,383,131 applicants who find they are no going to be subsidized, only 436,603 have selected a plan, for a 18% conversion rate

For the 2,756,667 applicants who find they will get supported by the taxpayer, 1,646,237 selected a plan, far a 60% conversion rate.

In essence, applicants are more than 3 times more likely to sign up if they are getting taxpayer money.  The exchanges are not selling health care, they are selling subsidies.  People sign up, check to see if they have money coming, and go away if they don't and stay if they do.

The next really interesting piece of data would be the demographics and health status of the 18% who did sign up for an unsubsidized plan.  I would not be at all surprised if the demographics there were far, far worse than the average.  Emerging hypothesis:  People come to the exchange, and sign up if they get a subsidy, or if they have health problems or high risk.

This Just In -- Demand Curves Slope Down

Apparently when prices for things are arbitrarily doubled, the demand for them goes down.  Via the New York Times:

On Monday, about 175 employees of the buffet restaurant in the slot-machine and electronic gambling casino in Ozone Park learned that the restaurant had been closed and that their jobs no longer existed. The casino had received plaudits when, in late October, a labor arbitrator issued a ruling that doubled the average pay of workers.

...

“Everything is done,” said Mariano Cano, 45, a server at the buffet for the past two years. “They just threw us out like dogs. They just gave us a couple of dollars to shut up, and that’s it.”

In October, Mr. Cano’s pay went from just over $5 an hour, plus tips for the drinks he delivered to the tables and dishes he cleared, to around $12, because of the living wage agreement.

This is one of those regulatory overreach paired with corporate cronyism stories, so I won't express any sympathy for the business involved -- it is earning huge rents from insider political deals it cut, and though the NYT does not explain it very well, my sense is that the arbitration requirement on wages was part of that political deal.

But it is amazing to me how much the Left has simply hypnotized itself into believing that minimum wage increases don't affect employment.  If we go back a number of months and look at the article where the NYT announced the arbitration decision, there is not one single mention that there might be some job security issues with forcing a doubling of wages.

Jeannine Nixon looked as if she had hit the jackpot. Ms. Nixon, a customer relations representative at Resorts World Casino in Queens, had just learned that she would be making $40,000 a year, up from $22,300.

“It’s life-changing,” Ms. Nixon, her voice cracking, said on Thursday. “I can finally feel relieved.”

It is amazing to me that it did not even occur to any at the NYT to think that a doubling of worker pay might be anything but a pure bonanza.  I suppose they were blinded by a sense that casino margins were so high (though I find that the public consistently overestimates margins of many businesses, confusing revenues with profits).  Even if the casino is wildly profitable, one had to consider that all activities in the casino were not equally profitable.   Restaurants often have thin margins and 20-30% labor costs.  There is simply no room for doubling them in a business that typically has single digit margins at best (in fact, most restaurants lose money).

There are a number of reasons why people can fool themselves into thinking that minimum wage increases have no effect on employment

  1. The biggest reason is that only about 3% of American workers earn the minimum wage.  So even a large drop in minimum wage job prospects, say by 10%, might only affect total US employment by a few tenths of a percent, a number that might not be seen in the general economic noise.
  2. Minimum wage increases are typically implemented in small steps and announced well in advance.  Looking at employment the day after vs. the day before the actual date of change likely misses most of the effect.  For example, California announced almost a year in advance that minimum wages were going up by 25% in July of 2014.  Our company closed one operation and made substantial reductions in our work force in response, but we made these changes in December 2013, months before the change actually took effect.

Which makes this article in the Arizona Republic by Ronald Hansen one of the worst, most facile bits of economic analysis I have ever seen.

But, at the most basic level, there is good reason to think the minimum wage doesn’t kill jobs.

The minimum wage has gone up 22 times since it was instituted in 1938. There is complete seasonally adjusted data from the U.S. Bureau of Labor Statistics available for 21 of those hikes.

In 15 of those 21 cases, the U.S. economy added jobs in the year after the minimum wage went up.

On 11 occasions, it added more jobs after the hike than it did in the year before the raise went into effect.

This alone suggests that raising the minimum wage isn’t an automatic drag on employment growth.

This is simply absurd for all the reasons I listed above.   I understand how I might find this kind of "analysis" in the comments section of the Daily Kos, but how does one get this past an editor?

The Only Solution is To Take Their Power Away

Give people power and they will abuse it.  I don't care if it is Chicago Democrats or New Jersey Republicans.  Most recent example:

A top aide to Gov. Chris Christie told an executive at the Port Authority of New York and New Jersey it was "time for some traffic problems in Fort Lee" before the authority closed lanes onto the George Washington Bridge in September, triggering a week of massive traffic jams, documents show.

The aide, Bridget Anne Kelly, sent the email, dated Aug. 13, to David Wildstein, a political ally of the governor who was the authority's director of interstate capital projects.

Mr. Wildstein, replied: "Got it."

Apparently this conversation occurred in response to Fort Lee's mayor Mark Sokolich refusing to endorse Christie in last year's governor race

[Mr. Wildasin said] in an apparent reference to Fort Lee Mayor Mark Sokolich: "It will be a tough November for this little Serbian."

Mr. Sokolich said in an interview Wednesday, "I didn't sign up for this petty political insanity."

Mr. Sokolich said he was now convinced he'd been the target of retribution for not endorsing Mr. Christie. "I've been punished not for something I've done, but for something I didn't do," Mr. Sokolich said. "This is the behavior of a bully in a schoolyard. It is the greatest example of political payback."

Also, Mr. Sokolich said he is Croatian.

Mr. Wildasin seens to have been teleported out of a Sopranos episode.

Schadenfreude: New York's Cultural Elite Loses Their Health Insurance

Via the NYT:

Many in New York’s professional and cultural elite have long supported President Obama’s health care plan. But now, to their surprise, thousands of writers, opera singers, music teachers, photographers, doctors, lawyers and others are learning that their health insurance plans are being canceled and they may have to pay more to get comparable coverage, if they can find it.

They are part of an unusual informal health insurance system that has developed in New York in which independent practitioners were able to get lower insurance rates through group plans, typically set up by their professional associations or chambers of commerce. That allowed them to avoid the sky-high rates in New York’s individual insurance market, historically among the most expensive in the country....

The predicament is similar to that of millions of Americans who discovered this fall that their existing policies were being canceled because of the Affordable Care Act. Thecrescendo of outrage led to Mr. Obama’s offer to restore their policies, though some states that have their own exchanges, like California and New York, have said they will not do so.

But while those policies, by and large, had been canceled because they did not meet the law’s requirements for minimum coverage, many of the New York policies being canceled meet and often exceed the standards, brokers say. The rationale for disqualifying those policies, said Larry Levitt, a health policy expert at the Kaiser Family Foundation, was to prevent associations from selling insurance to healthy members who are needed to keep the new health exchanges financially viable.

Siphoning those people, Mr. Levitt said, would leave the pool of health exchange customers “smaller and disproportionately sicker,” and would drive up rates.

Alicia Hartinger, a spokeswoman for the Centers for Medicare and Medicaid Services, said independent practitioners “will generally have an equal level of protection in the individual market as they would have if they were buying in the small-group market.” She said the president’s offer to temporarily restore canceled polices applied to association coverage, if states and insurers agreed. New York has no plans to do so.

Donna Frescatore, executive director of New York State of Health, the state insurance exchange, said that on a positive note, about half of those affected would qualify for subsidized insurance under the new health exchange because they had incomes under 400 percent of the poverty level, about $46,000 for an individual.

I still do not understand how anyone could consider it a "positive" that 50% of people who were previously self-reliant now become wards of the state.

Special Discount for Our Readers to the Nutcracker by Ballet Arizona

I may have mentioned in the past that my wife is on the Board of Ballet Arizona.  Phoenix has a reputation as a cultural wasteland, but our Ballet is certainly an exception to this.  Our artistic director Ib Andersen is fabulous, garnering top reviews even from the fussy New York press.  We have several young dancers, including one young lady who recently defected from Cuba, who are astonishing and whom you should frankly come see now before they are lured away to the bright lights of New York or Washington.

Anyway, they have a promotion running for the Nutcracker this holiday season and have allowed me to offer this same promotion to our readers, with discounts up to 50% on tickets.  See this pdf for details: Link Fixed to Ballet Arizona Offer.

"Slander" Is Anything Bad Said About Me

Richard Cohen wrote in the Washington Post

"[p]eople with conventional views must repress a gag reflex when considering the mayor-elect of New York — a white man married to a black woman and with two biracial children,"

Apparently people responded to the article by saying that Cohen was as a minimum deeply out of touch and perhaps a tad bigoted himself.  Of course, since this is the Internet age, some folks said these things in juvenile and deeply unproductive ways.

I am not going to comment much on his original statement.  I think the article is far more revealing of Mr. Cohen's mental outlook than that of anyone in Iowa, particularly since he brought no facts to the table, but a lot of people have already pointed that out.  I wanted to comment on his follow-up statement

I don’t understand it …. What I was doing was expressing not my own views but those of extreme right-wing Republican tea party people. I don’t have a problem with interracial marriage or same-sex marriage. In fact, I exult in them. It’s a slander…

Seriously?  So people's opinions about actual statements made by Richard Cohen in writing are slander, but ugly accusations made about Republicans or Tea Partiers he has not even met are not?  At least his critics are working with his actual statements, rather than offering an opinion of a large, inhomogeneous group's state of mind as fact.

He added, “I think it’s reprehensible to say that because you disagree with something that you should fire me. That’s what totalitarians do.”

Yeah, because totalitarians never broad brush vilify whole groups who constitute their political opponents.

This is a great example of how ad hominem argumentation works.  The Left has spent a lot of time attempting to vilify the Tea Party as flat-out BAD PEOPLE, in a similar way to how we climate skeptics have been vilified.  Once one is successful at this, then all the rules of discourse don't apply.   You don't have to engage them or treat them seriously because they are BAD PEOPLE.   We good liberal-minded folks would never stereotype large groups, except of course the Tea Party but that is OK because they are BAD PEOPLE.  And everyone knows that the rule of law, much less the rules of normal discourse, do not apply to BAD PEOPLE.

Progressives Lamenting the Effects of Progressive Policies

Kevin Drum writes

Via Harrison Jacobs, here's a recent study showing the trend in income segregation in American neighborhoods. Forty years ago, 65 percent of us lived in middle-income neighborhoods. Today, that number is only 42 percent. The rest of us live either in rich neighborhoods or in poor neighborhoods.

This is yet another sign of the collapse of the American middle class, and it's a bad omen for the American political system. We increasingly lack a shared culture or shared experiences, and that makes democracy a tough act to pull off. The well-off have less and less interaction with the poor outside of the market economy, and less and less empathy for how they live their lives. For too many of us, the "general welfare" these days is just an academic abstraction, not a lived experience.

He does not give a reason, and apparently following the links, neither does the study author.  But my guess is that they might well attribute it to 1. effects of racism, 2.  growth of the suburbs, 3. laissez faire capitalism.

I don't think racism can be the driver of this change, given that racism and fear of other cultures is demonstrably better in the last 30 years than at most times in history  (read bout 19th century New York if you are not sure).  The suburbs have been a phenomenon for 100 years or more, and capitalism has been less laissez faire over the last 30 years than at any time in our history.

I actually believe a lot of this income sorting is a direct result of two progressive policies.  I have no data, of course, so I will label these as hypotheses, but I would offer two drivers

  • Strict enforcement of the public school monopoly.  People want good schools for their kids.  Some are wealthy enough to escape to private schools.  But the only way for those who stay in the public school system to get to the best schools is to physically move into their districts.  Over time, home prices in the best districts rise, which gives those schools more money to be even better (since most are property tax funded), and makes them even more attractive.  But as home prices rise, only the most wealthy can afford them.  This is dead easy to model.  Even in a starting state where there are only tiny inhomegeneities between the quality of individual schools, one ends up with a neighborhood sorting by income over time.  Ex post facto attempts to fix this by changing the public school funding model and sending state money to the poorest schools can't reverse it, because at least half of school quality is driven not by money by by the expectations and skills of the parents and children in it.  Thus East St. Louis can have some of the highest per pupil spending in the state but have terrible schools.  A school choice system would not likely end sorting by school, but it would eliminate a huge incentive to sort by neighborhood.
  • Strict zoning.  There has always been a desire among certain people to exclude selected groups from their neighborhoods.  This desire has not changed, or if anything I would argue it has declined somewhat.  What has changed is the increased power that exists to exclude.  Zoning laws give the rich and well-connected the political vehicle to exclude the rabble from their neighborhoods in a way that never would have been possible in a free market.  I live just next to the town of Paradise Valley, which has very strict zoning that is absolutely clearly aimed at keeping everyone but the well-off out.  They will not approve construction of new rental units.  The minimum lot sizes are huge, way beyond the reach of many.

Government-Paid Lobbyists for Incumbent Hotel Interests in New York

In New York, the local hotel industry is freaking out.  Hotels, in a wearyingly familiar pattern, want the city to ban competitors using new business models (in this case companies like Airbnb).  Of course, they can't say that they are demanding government action to block competition.  So they come up with other BS.   This statement is right out of the corporate state paybook

NYC & Company, the city’s official tourism agency, issued a statement saying, “This illegal practice takes away much needed hotel tax revenue from city coffers with no consumer protections against fire- and health-code violations.” Neither city officials nor hotel organizations would estimate how much revenue hotels and the city might be losing.

The tax argument is absurd.  There is no reason that the city could not apply lodging or some sort of new tax to the rentals if that were their real concern.  The part about fire and health regulations is equally absurd.  New York apartment and building owners would be very surprised to learn that they are suddenly somehow unregulated.  Is the implication really that New York hotels are safe but New York apartments are Triangle Shirtwaist fires waiting to happen?

This is a great example of industry capture.  A true city tourism agency should be saying "It is great that this city is developing even more options for visitors.  A diversity of lodging experiences and price levels can only help spur tourism in New York.  There may be a few regulatory tweaks that are needed to accommodate this model, but we welcome this new lodging model with open arms."  Instead, though, they are acting as government paid lobbyists for existing hotel interests.

Because Shut Up

Via the Hill

Former vice president Al Gore on Monday called for making climate change "denial" a taboo in society.

“Within the market system we have to put a price on carbon, and within the political system, we have to put a price on denial,” Gore said at the Social Good Summit New York City.

Incredibly, the suggestion of introducing taboos and penalties in a scientific debate is coming from the side that claims to be the great defenders of science.

Climate Theory vs. Climate Data

This is a pretty amazing statement Justin Gillis in the New York Times.

This month, the world will get a new report from a United Nations panel about the science of climate change. Scientists will soon meet in Stockholm to put the finishing touches on the document, and behind the scenes, two big fights are brewing....

In the second case, we have mainstream science that says if the amount of carbon dioxide in the atmosphere doubles, which is well on its way to happening, the long-term rise in the temperature of the earth will be at least 3.6 degrees Fahrenheit, but more likely above 5 degrees. We have outlier science that says the rise could come in well below 3 degrees.

In this case, the drafters of the report lowered the bottom end in a range of temperatures for how much the earth could warm, treating the outlier science as credible.

The interesting part is that "mainstream science" is based mainly on theory and climate models that over the last 20 years have not made accurate predictions (overestimating warming significantly).  "Outlier science" is in a lot of cases based on actual observations of temperatures along with other variables like infrared radiation returning to space.  The author, through his nomenclature, is essentially disparaging observational data that is petulantly refusing to match up to model predictions.  But of course skeptics are anti-science.

Harvard Business School and Women

The New York Times has a long article on  Harvard Business School's effort to change its culture around women.  Given that both my wife and I attended, albeit 25 years ago, I have a few thoughts.

  • I thought the article was remarkably fair given that it came from the NYT.  Men who are skeptical of the program actually are allowed to voice intelligent objections, rather than just be painted as Neanderthals
  • I would have abhorred the forced gender indoctrination program, as much for being boring as for being tangential.  I am fortunate I grew up when I did, before such college group-think sessions were made a part of the process everywhere.  I would presume most of these young folks are now used to such sessions from their undergrad days.   I would not have a problem having an honest and nuanced discussion about these issues with smart people of different backgrounds, but I thought the young man they quoted in the article said it really well -- there is just no payoff to voicing a dissenting opinion in such sessions where it is clear there is a single right answer and huge social and even administrative penalties for saying the wrong thing.
  • I went to HBS specifically because I loved the confrontational free-for-all of the classes.   It was tailor-made to my personality and frankly I have never been as successful at anything before or since as I was at HBS.   I say this only to make it clear that I have a bias in favor of the HBS teaching process.   I do think there is an issue that this process does not fit well with certain groups.  These folks who do not thrive in the process are not all women (foreign students can really struggle as well) but they are probably disproportionately women.  So I was happy to see that rather than dumb down the process, they are working to help women be more successful and confident in it.
  • It is interesting to see that the school still struggles to get good women professors.  When I was there, the gap between the quality of men and women professors was staggering.  The men were often older guys who had been successful in the business and finance world and now were teaching.  The women were often young and just out of grad school.  The couple of women professors I had my first year were weak, probably the two weakest professors I had.  In one extreme case our female professor got so jumbled up in the numbers that the class demanded I go down and sort it out, which I finally did.  I thought it was fun at the time, but now I realize how humiliating it was.
  • To some extent, the school described in the article seems a different place than when I was there.  They describe a school awash in alcohol and dominated by social concerns.  This may be a false impression -- newspapers have a history of exaggerating college bacchanalia.   At the time I was there, Harvard did not admit many students who did not have at least 2 years of work experience, such that the youngest students were 24 and many were in their 30's and 40's.  A number were married and some even had children.   To be there, they not only were paying a lot of money but they were quitting paying jobs.  The school was full of professionals who were there for a purpose.  I had heard that HBS had started to admit more students right out of college -- perhaps that is a mistake.
  • The fear by the women running the school that women would show up on Halloween wearing "sexy pirate" costumes represents, in my mind, one of the more insidious aspects of this new feminist paternalism (maternalism?) aimed at fellow women.  Feminism used to be about empowering women to make whatever choices they want for their lives.   Now it is increasingly about requiring women to make only the feminist-approved choices.
  • I actually wrote a novel where the protagonist was a confident successful female at HBS.   So I guess I was years ahead of the curve.

Postscript:  Below the fold is an excerpt from my novel.  In it, the protagonist Susan describes how an HBS class works and shares my advice for being successful at HBS.

Continue reading ‘Harvard Business School and Women’ »

Meet the Person Who Wants to Run Your Life -- And Obama Wants to Help Her

I am a bit late on this, but like most libertarians I was horrified by this article in the Mail Online about Obama Administration efforts to nudge us all into "good" behavior.  This is the person, Maya Shankar, who wants to substitute her decision-making priorities for your own

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If the notion -- that a 20-something person who has apparently never held a job in the productive economy is  telling you she knows better what is good for you -- is not absurd on its face, here are a few other reasons to distrust this plan.

  • Proponents first, second, and third argument for doing this kind of thing is that it is all based on "science".  But a lot of the so-called science is total crap.  Medical literature is filled with false panics that are eventually retracted.  And most social science findings are frankly garbage.  If you have some behavior you want to nudge, and you give a university a nice grant, I can guarantee you that you can get a study supporting whatever behavior you want to foster or curtail.  Just look at the number of public universities in corn-growing states that manage to find justifications for ethanol subsidies.  Recycling is a great example, mentioned several times in the article.  Research supports the sensibility of recycling aluminum and steel, but says that recycling glass and plastic and paper are either worthless or cost more in resources than they save.  But nudgers never-the-less push for recycling of all this stuff.  Nudging quickly starts looking more like religion than science.
  • The 300 million people in this country have 300 million different sets of priorities and personal circumstances.  It is the worst hubris to think that one can make one decision that is correct for everyone.  Name any supposedly short-sighted behavior -- say, not getting health insurance when one is young -- and I can name numerous circumstances where this is a perfectly valid choice and risk to take.
  • The justification for this effort is social science research about how people manage decisions that involve short-term and long-term consequences

Some behavioral scientists believe they can improve people's self-control by understanding the relationship between short term memory, intelligence and delay discounting.

This has mostly been used to counter compulsive gambling and substance abuse, but Shankar's entry into government science circles may indicate that health insurance objectors and lapsed recyclers could soon fall into a similar category

I am sure there is a grain of truth in this -- all of us likely have examples of where we made a decision to avoid short term pain that we regretted.  But it is hilarious to think that government officials will somehow do better.  As I have written before, the discount rate on pain applied by most legislators is infinite.  They will do any crazy ridiculous thing that has horrible implications five or ten years from now if they can just get through today.  Why else do government bodies run massive sustained deficits and give away unsustainable pension and retirement packages except that they take no consideration of future consequences.  And it is these people Maya wants to put in charge of teaching me about delay discounting?

  • It probably goes without saying, but nudging quickly becomes politicized.  Is nudging 20-something health men to buy health insurance really in their best interests, or does it help keep an important Obama program from failing?

Postscript:  Here is a great example of just how poorly the government manages delay discounting.  In these cases, municipalities are saddling taxpayers with almost certainly bankrupting future debt to avoid paying any short-term costs.

Texas school districts have made use of another controversial financing technique: capital appreciation bonds. Used to finance construction, these bonds defer interest payments, often for decades. The extension saves the borrower from spending on repayment right now, but it burdens a future generation with significantly higher costs. Some capital appreciation bonds wind up costing a municipality ten times what it originally borrowed. From 2007 through 2011 alone, research by the Texas legislature shows, the state’s municipalities and school districts issued 700 of these bonds, raising $2.3 billion—but with a price tag of $23 billion in future interest payments. To build new schools, one fast-growing school district, Leander, has accumulated $773 million in outstanding debt through capital appreciation bonds.

Capital appreciation bonds have also ignited controversy in California, where school districts facing stagnant tax revenues and higher costs have used them to borrow money without any immediate budget impact. One school district in San Diego County, Poway Unified, won voter approval to borrow $100 million by promising that the move wouldn’t raise local taxes. To live up to that promise, Poway used bonds that postponed interest payments for 20 years. But future Poway residents will be paying off the debt—nearly $1 billion, all told—until 2051. After revelations that a handful of other districts were also using capital appreciation bonds, the California legislature outlawed them earlier this year. Other states, including Texas, are considering similar bans.

Or here is another example, of New York (the state that is home to the mayor who tries to nudge his residents on everything from soft drinks to salt)  using trickery to consume 25 years of revenue in one year.

Other New York deals engineered without voter say-so include a $2.7 billion bond offering in 2003, backed by 25 years’ worth of revenues from the state’s gigantic settlement with tobacco companies. To circumvent borrowing limits, the state created an independent corporation to issue the bonds and then used the money from the bond sale to close a budget deficit—instantly consuming most of the tobacco settlement, which now had to be used to pay off the debt.

By the way, I recommend the whole linked article.  It is a pretty broad survey of how state and local governments are building up so much debt, both on and off the books, and how politicians bend every law just to be able to spend a few more dollars today.

Further Proving the Point of Modern Journalism is To Generate Clicks, And Not Necessarily to Be Accurate

I don't like tribal red-blue politics, but I read a couple of blogs both from team elephant and team donkey to at least make sure I am not living in a libertarian echo chamber.  From that I know that bloggers on the Right were complaining for years about Maureen Dowd's dishonest editing of quotations to make Republicans look bad.  Apparently, bloggers on the Left, in this case Kevin Drum, have had it with Dowd's dishonest quote manipulation as well.

Which all means that Dowd likely has a job for life at the New York Times, as journalism today seems more about generating controversy and clicks rather than delivering facts -- and controversies like this that send everyone running in circles on Twitter certainly generate attention.  From the New York Times : We have met TMZ and they are us.

When Sustainability is not Sustainable

After my post the other day on how new award-winning supposedly environmentally sustainable parks are far more resource intensive than the old parks they were replacing, I have gotten a lot of feedback -- this is obviously a topic that strikes a chord with folks.  In particular, a reader (I always forget to ask if I can use their names) sent me this article on the new LEED Platinum-certified building in New York

When the Bank of America Tower opened in 2010, the press praised it as one of the world’s “most environmentally responsible high-rise office building[s].” It wasn’t just the waterless urinals, daylight dimming controls, and rainwater harvesting. And it wasn’t only the Leadership in Energy and Environmental Design (LEED) Platinum certification—the first ever for a skyscraper—and the $947,583 in incentives from the New York State Energy Research and Development Authority. It also had as a tenant the environmental movement’s biggest celebrity. The Bank of America Tower had Al Gore.

The former vice president wanted an office for his company, Generation Investment Management, that “represents the kind of innovation the firm is trying to advance,” his real-estate agent said at the time. The Bank of America Tower, a billion-dollar, 55-story crystal skyscraper on the northwest corner of Manhattan’s Bryant Park, seemed to fit the bill. It would be “the most sustainable in the country,” according to its developer Douglas Durst. At the Tower’s ribbon-cutting ceremony, Gore powwowed with Mayor Michael Bloomberg and praised the building as a model for fighting climate change. “I applaud the leadership of the mayor and all of those who helped make this possible,” he said.

Gore’s applause, however, was premature. According to data released by New York City last fall, the Bank of America Tower produces more greenhouse gases and uses more energy per square foot than any comparably sized office building in Manhattan. It uses more than twice as much energy per square foot as the 80-year-old Empire State Building. It also performs worse than the Goldman Sachs headquarters, maybe the most similar building in New York—and one with a lower LEED rating. It’s not just an embarrassment; it symbolizes a flaw at the heart of the effort to combat climate change...

“What LEED designers deliver is what most LEED building owners want—namely, green publicity, not energy savings,” John Scofield, a professor of physics at Oberlin, testified before the House last year.

I will go out and get a picture today of our local Bank of America branch.  It is LEED certified at some level, proudly displaying the certificate in the lobby.  Out front it has two parking spaces near the door for electric cars - it does not have a charger for them, just reserved preferred parking.  I am sure they got their LEED points this way.

Postscript:  I am not religious but am fascinated by the comparisons at times between religion and environmentalism.  Here is the LEED process applied to religion:

  • 1 point:  Buy indulgence for $25
  • 1 point:  Say 10 Our Fathers
  • 1 point:  Light candle in church
  • 3 points:  Behave well all the time, act charitably, never lie, etc.

It takes 3 points to get to heaven.  Which path do you chose?

How To End New York's Stop and Frisk Tomorrow

Mayor Bloomberg in New York seems to think he has his own personal army he can order to do whatever he wishes, irregardless of Constitutional protections.  Case in point is the egregiously unconstitutional stop and frisk program.  The only way this program survives is that it is generally applied only to the powerless.  I would love to see the policy applied randomly, rather than just to poor blacks, with officers tomorrow performing random stop and frisk at, say, the intersection of Fifth Avenue and Fiftieth Street.  The outcry from the not-so-powerless would be so incredible that the program likely would not survive another 24 hours.