Coyote Blog

For years Progressives, led by President Obama during the legislative process for the PPACA, have attacked health insurance companies for their profits and overhead.  I never understood the former -- at generally 5% of revenues or less, even wiping health insurance profits out altogether would offset less than a year's worth of health care inflation.  The Progressive hatred for health insurance overhead was actually built into the PPACA, with limits on non-care expenses as a percent of premiums.

Progressive's justification for this was to compare health insurer's overhead against Medicare, which appears to have lower overhead as a percentage of revenues.  This is problematic, because lots of things that private insurers have to pay for actually still are paid for by the Federal government, but just don't hit Medicare's books due to funky government accounting.  Other private costs, particularly claims management, are areas that likely have a real return in fraud reduction.  In this case, Medicare's decision not to invest in claims management overhead shows up as costs elsewhere, specifically in fraudulent billings.

None of these areas of costs make for particularly fertile ground for demagoguing, so the Progressive argument against health insurance overhead usually boils down to marketing.  This argument makes a nice fit with progressive orthodoxy, which has always hated advertising as manipulative.  But health insurance marketing expenses mainly consist of

1. Funding commissions to brokers, who actually sell the product, and
2. Funding people to go to company open enrollments and explain health care options to participants

Suddenly, now that Progressives have taken over health care via the PPACA and federal exchanges, their tune has changed.  They seem to have a near infinite appetite for marketing money to support construction of the exchanges (which serve the role of the broker, though less well because there is no support)  and information about options to potential participants.  That these are exactly the kinds of expenses they have railed against for years in the private world seems to elicit no irony.  Via Cato

Now we learn, from the Washington Post’s Sara Kliff, “Sebelius has, over the past three months, made multiple phone calls to health industry executives, community organizations and church groups and directly asked that they contribute to non-profits that are working to enroll uninsured Americans and increase awareness of the law.”

This follows on from revelations in California (revelations that occurred before a new California law that makes PPACA costs double-secret).

[California] will also spend $250 million on a two-year marketing campaign [for its health insurance exchange]. By comparison California Senator Barbara Boxer spent $28 million on her 2010 statewide reelection campaign while her challenger spent another $22 million.

The most recent installment of the $910 million in federal money was a $674 million grant. The exchange's executive director noted that was less than the $706 million he had asked for. "The feds reduced the 2014 potential payment for outreach and enrollment by about $30 million," he said. "But we think we have enough resources on hand to do the biggest outreach that I have ever seen." ...

The California Exchange officials also say they need 20,000 part time enrollers to get everybody signed up––paying them $58 for each application. Having that many people out in the market creates quality control issues particularly when these people will be handling personal information like address, birth date, and social security number. California Blue Shield, by comparison has 5,000 employees serving 3.5 million members.

New York is off to a similar start. New York has received two grants totaling $340 million again just to set up an enrollment and eligibility process.

These are EXACTLY the same sorts of marketing costs progressives have railed on for years in the private world.

From today's WSJ

The personal computer is in crisis, and getting little help from Microsoft Corp.'s Windows 8 software once seen as a possible savior.

Research firm IDC issued an alarming report Wednesday for PC makers such as Dell Inc.  and Hewlett-Packard Co.,  saying world-wide shipments of laptops and desktops fell 14% in the first quarter from a year earlier. That is the sharpest drop since IDC began tracking this data in 1994 and marks the fourth straight quarter of declines.

Gartner Inc., a rival research firm, estimated global shipments sank 11.2%, which it called the worst drop since the first quarter of 2001. Gartner blamed the rise of tablets and smartphones, which are sapping demand for personal computers.

Windows 8 was never, ever going to save the PC, because Windows 8 represents an abandonment of the traditional PC.  It is essentially a touchscreen tablet OS forced onto the desktop.  Like Windows Vista, it is an absolutely awful OS that our company has banned any employee from using on a company machine.  Fortunately, we can still buy a few Dell computers with Windows 7, and when that is no longer possible, I will go back to building our company machines and putting Windows 7 on myself, the same thing I did to survive the Vista nightmare  (hanging on to XP until Windows 7 came out).

Later in the article, the author recognizes that Windows 8 is killing the PC rather than saving it

But there is little sign that buyers are responding. In a surprisingly harsh assessment, IDC said Windows 8 hasn't only failed to spur more PC demand but has actually exacerbated the slowdown—confusing consumers with features that don't excel in a tablet mode and compromise the traditional PC experience.

Mr. Chou said not only has Windows 8 failed to attract consumers, but businesses are keeping their distance as well. Chief information officers at several companies echoed his opinion Wednesday.

Ricoh Americas Corp., which replaces about a third of its 17,000 PCs every three years and upgrades to the most current operating system available, said this year it is sticking with Windows 7, released in 2009. Tracey Rothenberger, the company's chief operating officer, said the benefits of switching to the new software aren't worth the effort of training employees to use it.

I am sympathetic to Microsoft's goals, if not their tactics.  Certainly market share in OS is shifting to handheld devices, such as smartphones and tablets, and Microsoft has largely missed this market.  To stay relevant, they need to gain share in these markets -- and trying to gain a foothold by somehow leveraging their market share in desktops makes sense.  It would be great to have an OS for tablets that allowed more access to the file system and customization options, as a competitor to Apple's walled garden, though Google is way ahead in that particular niche.

But the imposition of tablet aesthetics, user interface, and apps framework on desktop PC's is just frustrating as hell for those of us who still like using a mouse and prefer our traditional desktop interface.  The training issue for employees is not a trivial one -- when Microsoft completely abandoned the menu structure and user interface of their Office products several years ago, we decided not to upgrade any of our PC's and, when necessary, to use the OpenOffice alternative, as much because it retains the old Office interface as for its being free.

I still use Word, Excel, and Powerpoint 2002 on this computer, because I have never really been happy with the new Office interface.  I use no other software even remotely that old.  I routinely upgrade everything I have.  I dutifully upgrade Quickbooks and Norton Security and a dozen other programs every year.  So to go a decade without upgrading shows how little I think of Microsoft's upgrade strategies.

First, an update on SimCity.  I am a huge SimCity series fan from way back.  I was excited by the new release, which turned out to be a total disaster.  I wrote several weeks ago about the horrendous decision to make SimCity an always-online game, which led on day 1 to the game being unplayable for most because of server problems and overloads at EA.

Since that time, they have (mostly) fixed the server overload issues and I have been able to play.  Sort of.  The game is beautiful and the interface is pretty nice.  And the game tantalizing retains many of the elements that made the previous games so compelling to some of us.  But in the end, the game is a fail.

First, it is full of bugs.  One horrible bug ensures that over time, almost every city you build will crash on the online server.  The only solution is to accept a rollback to an earlier state, though every once in a while this leads to a total city loss.

Beyond that, almost every element of the game is broken.  Sims will suddenly stop going to school, and complain about there being no education when an empty school is right across the street.  City water tables can be drained in a matter of months, making a city unplayable -- one can avoid this only by putting their sewer plant right by their water supply.  Certain city specializations added to the game, like gambling, don't work right.   Meteor showers cities every few months and can't be turned off.  etc. etc.

It may be that this game will be playable in 6 months or so, but even then I fear that the EA team has simplified the game so much and removed so many options to appeal to the mass market XBOX set that the wonky complexity many of us enjoyed in early games will never be there.  In particular, city size is limited such that in about 20 minutes of play I can completely fill the city space.  All that one can even do with the game after that is just sit and watch density increase and expand a fire station or two as the population grows.  In fact, a lot of the game for me runs unattended, since EA had to turn off the fast speed mode.  The city now needs to just run for hours for anything to happen, so I resorted to leaving it on in the other room and checking back on it every hour or two.

Oh, and by the way.  The highly touted multiplayer features are a bad joke.  Someone in the business department told developers that the game had to be online for piracy protection, and told them to go develop some game features that justified this decision so they could tell users that the online requirement was really for their benefit and not for copy protection.  Well, they failed.

Bioshock Infinite.   I don't play a lot of first person-shooter style role-playing games, but my son talked me into playing the new Bioshock.  He has played a lot of this genre (e.g. the Mass Effect series) and said that this was the best he had ever played.  This evaluation may be in part due to his fascination with strange dystopic visions of society, because we certainly get one in this game (as in each of the Bioshock series).

I am not every far into it but I will say that is a fun experience.  So far I would say it was less of a game and more of an immersive novel -- WTF is this place I am in and what is going on.   The environment is really fascinating to explore.  I am still trying to figure out the back story, but piecing it together is a fun process.  Already I have been to several memorable locations.

The ultimate argument I get to my climate talk, when all other opposition fails, is that the precautionary principle should rule for CO2.  By their interpretation, this means that we should do everything possible to abate CO2 even if the risk of catastrophe is minor since the magnitude of the potential catastrophe is so great.

The problem is that this presupposes there are no harms, or opportunity costs, on the other end of the scale.  In fact, while CO2 may have only a small chance of catastrophe, Bill McKibben's desire to reduce fossil fuel use by 95% has a near certain probability of gutting the world economy and locking billions into poverty.  Here is one illustration I just crafted for my new presentation.  As usual, click to enlarge:

A large number of people seem to assume that our use of fossil fuels is an arbitrary choice among essentially comparable options (or worse, a sinister choice forced on us by the evil oil cabal).  In fact, fossil fuels have a number of traits that make them uniquely irreplaceable, at least with current technologies.  For example, gasoline has an absolutely enormous energy content per pound of fuel.  Most vehicles - space shuttles, and more recently electric cars - must dedicate an enormous percentage of their power production just to moving the weight of their fuel.  Not so in gasoline engine cars, something those who are working with electric cars must face every day.

By the way, if you want to see the kick-off of version 3.0 of my climate presentation, it will be at my son's school, Amherst College, this Thursday at 7PM.  More here.

Update: By the way,  I was careful in the chart to say the two " are correlated".  I actually do not think one causes the other.  In this case, I think there are a third, and fourth, and fifth (etc.)  factors that cause both.  For example, economic development leads to (and depends on) increased fossil fuel use and CO2 emissions, and it leads to longer lives.

From CNN via Carpe Diem

A 24-year scandal was quietly acknowledged last week. On July 3 the U.S. Food and Drug Administration approved the first "rapid home" test for HIV—a test that people can take in the privacy of their own homes to determine whether they have the virus that causes AIDS.

The approval is an unambiguously good thing—or so you would think. The saliva test in question, made by OraSure Technologies and known as OraQuick, costs less than $60 and takes just 20 minutes to self-administer. According to statistics an FDA advisory committee presented at a hearing in May, it holds the potential to prevent the transmission of more than 4,000 new HIV infections in its first year of use alone. That would be about 8 percent of the roughly 50,000 new infections we currently see annually in the United States. (About 1.2 million people in the U.S. are now living with HIV, according to the Centers for Disease Control and Prevention, of whom about 20 percent don't realize they have it. Since the epidemic began in the early 1980s, about 1.1 million people have been diagnosed with AIDS, and more than 619,000 have died from it.)

The scandal is that the approval of a rapid home test for HIV did not occur until last week—about 24 years after the FDA received its first application seeking permission to market one.

Apparently, for years, even decades, only tests of clinical options were allowed to proceed, basically because the government considers Americans to be infants:

There was great concern that the patient receive proper counseling, both before and after the test. The patient needed to appreciate the possibility of false positives, so he wouldn't panic unnecessarily if he got one. He needed to appreciate the danger of false negatives, so he wouldn't become reckless, endangering sexual partners. And he needed to understand the options and support groups available in the event he received a true positive. (On top of all these concerns, many AIDS activists at the time were opposed to almost any form of HIV testing out of fear that results could be used to ostracize and persecute HIV-positive people—though one hopes that public health concerns were paramount to the FDA, rather than political pressure and hysteria.)

On UVA from Walter Russel Mead via Glenn Reynolds

As the NYT article points out, universities all over the country are facing a world of rapid change. This is going to be hard to face. Universities are structured to adapt slowly—if at all. Typically, university presidents have only limited controls, while faculties have a lot of power to resist. Management is usually decentralized, with different schools and departments governed under different rules and accountable to different constituencies. The fiscal arrangements of most universities are both byzantine and opaque; it can be very hard for administrators to understand or properly and fairly value the true cost and contributions of different parts of the institution.

The structural problem our universities face is this: confronted with the need for sweeping, rapid changes, administrators and boards have two options — and they are both bad. One option is to press ahead to make rapid changes. This risks — and in many (perhaps most) cases will cause — enormous upheavals; star professors will flounce off. Alumni will be offended. Waves of horrible publicity will besmirch the university’s name.

Option two: you can try to make your reforms consensual — watering down, delaying, carefully respecting existing interests and pecking orders. If you do this, you will have a peaceful, happy campus . . . until the money runs out.

This kind of organizational change issue is NOT unique to public institutions.  I think if one were a fly on the wall at Sears, or RIM/Blackberry, or AOL, one could describe exactly the same dynamic: insider constituencies were and are successful under the old model, so consensus processes involving these same constituencies seldom lead to change since these changes are inherently threatening to these same constituencies.  A simpler way of saying this is that it is really hard to obsolete oneself.  Just go ask Blockbuster Video.

But there is one difference in the world of public institutions.  In the private world, new success models in the worlds of Sears and AOL and Blackberry are already out there and growing really fast, run by outsiders who have absolutely no stake in the success of the old model (in fact by folks who have a strong economic stake in killing the old models).  But there is no parallel to capital markets and entrepreneurship in the public space.  There is no venue for new-model proponents to get capital and support outside of the old-model institutions.  In fact, if anything, public institutions will rally their political clout, up to and including sponsoring new legislation, to make sure new models are strangled in the crib.

If I were in the VA legislature and really cared about education innovation in the future, I would give up on UVA driving it and instead take 20% of its funding and hand it off to a brand new parallel entity, say UVA 2.0, run by an entirely new team.

This is simply an awful law.  If you had asked me ten years ago if we would see the President (a Democrat yet) claiming the right to assasinate Americans and the Congress threatening to pass a bill requiring the indefinite detention, without trial, of people within our borders, I would never have believed it.  At first I was excited to see that Obama was threatening a veto, but then I read that he was not upset about indefinite detention, but only that Congress was threatening to tie his hands and proscribe certain options.  Obama wants to have the choice of whether to offer certain individuals due process or indefinite decision.

For more, see Rand Paul v. John McCain

Postscript:  As usual, I am left flat by the debate over whether certain injustices, like indefinite detention, apply to all humanity or just foreigners.  I have yet to parse anything in our founder's national rights arguments behind the Declaration of Independence and the Constitution that justify why folks born outside our borders have fewer rights than those born inside them.

Update:  More here, including a lot from the ACLU.  We are supposed to feel better because John McCain says that this only applied to Al Qaeda.  But how in the hell do we know with any confidence that the folks the President locks up are Al Qaeda?  Its bad enough to declare a whole new crime, that of being a member of a certain organization.  The US, through its history, has been much better than most nations in avoiding banning certain parties and organizations.  But even if we accept this law, doesn't there need to be some due process?

I suppose I understand that if I captured a guy in an SS uniform in WWII who 10 seconds ago was shooting at me, locking him up as a POW might not require a ton of due process.  Last I checked, the AQ folks didn't have a uniform or anything.  And most of them are not routinely shooting at us.

We didn't even pass this kind of horrible law at the height of Cold War anti-communist hysteria.  Can you see Johnson or Nixon (or Hoover) being able to indefinitely detain anyone they thought was a member of the Communist Party?

I have written before that despite being a PC guy, the iPod 2 is probably the greatest piece of gear of I have ever owned.  I take it with me everywhere.

However, the newsstand is a half-baked mess, and is so bad I can't believe they saw fit to release it in this form.  The navigation is totally non-intuitive.  I am never clear if I am going to go to the store or my list of downloaded magazines when clicking on a link.  The library seems to forget that I own certain issues, and because of the choices Apple made, trying to Kluge the thing into its apps store interface, every magazine is really its own app and the Newstand is actually nothing much more than a folder holding all the apps.  This means that the interface changes radically from magazine to magazine.  In half the magazines, I still have not been able to figure out how to navigate from inside a single issue back to the overall issue list.  And don't look for an integrated issue list across all magazines - there is none.  You have to go into every single magazine app to see what issues are available in that particular product.

Worse, the subscription system does not seem to work for many of the magazines.  I have subscribed to magazines, but that fact  is not always obvious in the interface.  And in many cases, the magazines I get to download seem to have little relationship to whether I subscribed.  For example, I subscribed to PC Gamer but am not offered any of the newest issues to download -- they show up as requiring a full price purchase.

There are other bizarre touches as well.  The newstand has a little red "2" icon in the corner, which in the apps store means there are two apps that have updates.   But I can't figure which of my magazines needs updating -- there is no icon on the individual magazines hinting they need updating somehow, and there is no "update all" button or even a button to see a list of updates available as there is in the app store.  Yes, I know the new issues are theoretically supposed to download automatically.  The NYT does.  A number of magazines don't, and I have had to go into the store and click on them to get them to download.

Finally, looking at my iphone, which should have a mirror of all the magazines I have bought on the ipad (same apple account), only about half the magazines show up.

This is just a big, big disappointing mess, all the more so because the iPad feels like the perfect device to read magazines.  I can only guess this was all driven by a desire to reuse the existing apps micro-payments infrastructure, but the result is very un-Apple.  The only reason one tolerates Apple's closed ecosystem and resulting loss of options and flexibility is because it yields predictability, particularly in the interface.  Apple has thrown that all away with Newsstand and I can't believe their user community is going to tolerate it.

Update:  I just googled the Newsstand and I get pages and pages of positive reviews.  This absolutely has to be Apple fan-boy crap.  Really, the Newsstand interface is really awful.

Update#2:  The NYTimes apps seems to work beautifully, but most of the magazines have weird interfaces.  Again, Apple does not seem to have imposed a single interface structure on magazine app developers, so they all have their own.

I have always defended private unions on the ground that workers have a freedom of association just as much as anyone else.  I think the government has tilted the playing field in the union's favor too much, but I will leave that aside for today.  I will also leave aside the problem of public unions, where there is no one really representing the taxpayer on the other side of the table in negotiations (many politicians in union states owe their jobs to union support).

Leave all of that aside.  The economic problem with unions tends to be that they are such a conservative (little c) force in an economy that needs dynamism to grow and expand wealth.  Here is a great example:

The University of California last week tentatively agreed to a deal with UC-AFT that included a new provision barring the system and its campuses from creating online courses or programs that would result in “a change to a term or condition of employment” of any lecturer without first dealing with the union.

Bob Samuels, the president of the union, says this effectively gives the union veto power over any online initiative that might endangers the jobs or work lives of its members. “We feel that we could stop almost any online program through this contract,” Samuels told Inside Higher Ed.

I have said for a long time that negotiations for pay and benefits (in private unions) tend to be the least problematic union activity (different story in public unions, where the relationship to management is not adversarial).  Longer term, union imposed work rules and restrictions tend to be much more costly.  The reason I think is that corporate executives can easily value the difference between various pay and benefits packages, but have a hard time valuing flexibility and dynamism.  If union rules cut off potential future as-yet-unknown growth and cost reduction efforts, the cost of these rules can be huge but equally they can be almost impossible to value (more like options pricing than straight cost-benefit).

Don Boudreaux asks:

Here’s a quick question for anyone who takes seriously politicians’ pronouncements about what particular industries are “vital” or are “of the future” or are “crucial to meeting consumers’ needs”: Why do virtually none of these politicians, when they leave office, found their own non-political firms? Why do virtually none of these politicians, when they leave office, found their own non-political firms – firms that specialize neither in granting clients access to incumbent politicians nor in projects that depend upon getting subsidies or other favors from those same politicians?

This question occurred to me a few days ago upon hearing that former president Bill Clinton was off somewhere talking about something to some group concerned about some issue.  His career now is to make lots of money as a sort of high-brow social healer – to emit platitudes, attend state funerals, and (pardon my switch of imagery) be a show-pony for politically correct causes.  The post-Oval Office careers of every other recent president – to the extent that they haven’t simply retired to the golf course or the study – have been largely the same, with the groups and causes served by their attentions differing only as one former president’s political affiliations differ from those of another former president.

One guy comes to mind who had a sniff of the White House and then went on to run his own business:  George McGovern.  And though its just a small Inn that will never be even a blip on the economic radar screen, it has driven McGovern dangerously close to being a libertarian.  Actually, that might be a misnomer.  He probably is still a liberal, but from the days when liberals actually cared about individual freedom and saw aggregations of power in the government to be at least as scary as those in the private world.  Take this for example:

Under the guise of protecting us from ourselves, the right and the left are becoming ever more aggressive in regulating behavior. Much paternalist scrutiny has recently centered on personal economics...

Since leaving office I've written about public policy from a new perspective: outside looking in. I've come to realize that protecting freedom of choice in our everyday lives is essential to maintaining a healthy civil society.

Why do we think we are helping adult consumers by taking away their options? We don't take away cars because we don't like some people speeding. We allow state lotteries despite knowing some people are betting their grocery money. Everyone is exposed to economic risks of some kind. But we don't operate mindlessly in trying to smooth out every theoretical wrinkle in life.

The nature of freedom of choice is that some people will misuse their responsibility and hurt themselves in the process. We should do our best to educate them, but without diminishing choice for everyone else.

The only other place I have heard this recently on the Left was, perhaps not coincidentally, from that other child of 60's liberal politics, Jerry Brown

To the Members of the California State Senate:

I am returning Senate Bill 105 without my signature.

This measure would impose criminal penalties on a child under the age of 18 and his or her parents if the child skis or snowboards without a helmet.

While I appreciate the value of wearing a ski helmet, I am concerned about the continuing and seemingly inexorable transfer of authority from parents to the state. Not every human problem deserves a law.

I believe parents have the ability and responsibility to make good choices for their children.

Sincerely,
Edmund J. Brown

Postscript:  The answer to Don's question is one of two.  Either a)  They are not up to it.  And/or b) There is a hell of a lot more wealth that can be captured through the exercise of government power than through private enterprise.

Al Gore is doing his best Jerry Lewis imitation by holding an all day climate telethon today.  In honor of this, let me repost my climate video for those who have not seen it.

Catastrophe Denied: The Science of the Skeptics Position (studio version) from Warren Meyer on Vimeo.

Other viewing options, as well as links to download the powerpoint presentation, are here.

For some reason I do not fully understand, there are two worlds of gaming - the Wal-Mart/Target/Toys R Us world of Monopoly and Risk, and the geeky world of strategic gaming.

It used to be that the strategic gaming world was just too complicated and arcane for prime time.  I once spent a whole summer playing through a game called "War in Europe" from SPI.  It had a 42-square foot map of Europe, thousands and thousands of counters, hundreds of pages of instructions, and simulated WWII in weekly turns.

However, there is now a whole slew of games in the strategic arena, mostly from Europe, that are very accessible.   A number are not much harder to learn than Risk but are more fun and play a lot faster.  Unfortunately, few of these have migrated to mainstream stores, so you may be missing them.  Here are a few my family plays that are excellent places to start.  I have put them in approximate order of complexity, from low to high.

[By the way, don't have a family or friends?  Your in luck!  At least 3 of the games below have very high quality iPad game apps with good to very good AI competitors]

1. Ticket to Ride. Very easy to learn.  Even visiting kids get the idea immediately.  This is a railroad line building game.  Start with the original North American version, it is the least complicated.  Also, if you have an iPad, there is a very good game app port of this game.
2. Small World. This is an absolute freaking classic. Totally fun, pretty easy to learn, fast to play.  Sort of a wargame ala Risk but it doesn't feel like Risk.  Very repayable because the army or race (e.g. dwarves, elves, giants, etc) you play changes each game as special powers are mixed and matched.  As important to taking territories will be recognizing when your race has become senescent and when it is time to start a new race.  If you have an iPad, there is an awesome Small World game app I heartily recommend.
3. 7 Wonders. A new game that has quickly become a favorite.    This game is typical of many modern strategy games -- there are many ways to score and you only have a limited number of actions, so the trick is figuring out your priorities.  The play rules of this game are dead simple.  The complicated part is deciding what action to take among many alternatives, since the scoring is complicated.  Here is my advice on this game and for many of these games that follow.  Just play the game once.   This is what my kids and I did with 7 Wonders.  They yelled at me at scoring time that they hadn't understood that such and such scored so well or poorly, but they understood it better with one play-through than by any number of times parsing the rules.  This is our current favorite.  Interesting dynamic here as after each card play, everyone passes his or her whole hand to their neighbor.
4. Dominion.  Similar to 7 Wonders in that it is a card game building to victory points.  There is a constant tradeoff of getting victory points now or building up "infrastructure" that will allow more scoring later.  It is more complex than 7 wonders as it has even more options and paths.  I play it with my family but both this and the next game fall out of what are typically called "family" games.
5. Race for the Galaxy.  Again, similar to 7 Wonders and Dominion, just more complicated.  A planet development game.

Here are some other family accessible games I can't recommend as much

1. Settlers of Catan. This is a popular strategy classic, and is simple to learn.  My kids think its kind of meh.  It has a diplomacy negotiating element that does not seem to work well in my family for games
2. Cargo Noir. I have only played this once, so I can't say how it wears.  My kids liked it better than I did.  It is easy to learn, but I thought the strategic options were a bit thin.
3. Carcasonne.  There are very few games I don't care for, but I have tried this game several times and it just does not click for me.  But it is wildly popular, so what do I know?  A game where you add tiles of roads and cities to try to score based one where you have put your mini people (meeple in euro-game speak).   There is a high quality port of this game on iPad.

Here are some games I really love but are not appropriate for the entry level family

1. Twilight Struggle - replay the cold war.  My son and I played this and it was awesome, but it took some time to learn and was pretty wonky.
2. Agricola - one of the reigning kings of hard-core Euro-style strategy games, this game is fairly complicated to learn (not helped by instructions that really need a re-write) and very complicated to master.   The concept -- trying to keep a medieval family alive - bored the hell out of my kids but it is similar to many of the games above in that there are far more ways to score than one can pursue in a turn, and it has a very strong element of balancing immediate returns against investments in the future.   I have never played Puerto Rico but my sense it is in a similar genre.

The Boardgame Geek website is a great place to learn about these games (I have just listed a few of the most popular of literally thousands of games).  Their ranking of top family games is here.  To give you an idea, Monopoly is rates #781 in family games and #7148 overall by their readers (though there is some geek snob factor in this, it really is not a very good game), so you probably have some good games to discover.

PS- Most all of these are on Amazon.

One of the things I struggle with in arguing for ending the government schools monopoly is a lack of imagination.  In most people's lifetimes, there has never been a robust network of private school options to fit all needs and budgets, so folks assume that that such choices can't exist -- that there is some structural failure of capitalism that would prevent these choices from existing rather than structural government factors that have prevented them from existing.

Don Boudreaux has a nice analogy that helps make the logic of school choice clearer.

Hey, why make expensive investments when the government will just give you access to your competitor's infrastructure?

Federal Communications Commission has decided to mandate data roaming by a 3-2 vote. Simply put, major carriers like AT&T and Verizon will be required to let you check your email and perform VoIP calls over their federally-licensed airwaves even if you're actually paying a regional carrier for your cellular coverage instead -- just as they've been required to do for voice and messaging since 2007. As you can imagine, Big Red and Ma Bell aren't exactly jumping for joy at the news, with both threatening to slow expansion into niche markets if they'll be forced to share their infrastructure. The victorious members of the FCC claim that this doesn't constitute common carriage because the big boys still get to negotiate "commercially reasonable" rates. Considering that two dissenting commissioners say that it is, indeed, common carriage, though, and thus beyond the powers granted to the FCC, we imagine we haven't heard the last of this debate.

By the way,  the commercially reasonable rate piece is so much BS.  I can say from experience that there is no such thing as a true price negotiation when one party is forced to make a deal.  In one of my great moments in not reading the fine print, I signed a commercial lease with the National Park Service in which the fine print demanded that I buy the personal property used in that operation from the former tenant.

Well, you can imagine what happened.  The contract said I had to buy it at a reasonable market price, but at the end of the day, if they guy insisted on selling me a pile of useless junk for $100,000, my negotiation options were limited because I could not just walk away.  Just to really hammer the lesson home to me about being careful in such deals in the future, the former tenant really went the extra mile in taking advantage of the provision.  He stripped out every good asset from the operation and shipped in every non-working piece of junk equipment he could find in his other operations -- after all, I seem to have given him an open-ended "put".  Only his, shall we say, excessive creativity in the latter eventually saved me, as trying to sell property from other operations (there was even some old couches from someone's house sitting in the boat repair shed) was considered by the NPS to be a violation of the rules and they eventually released me from the requirement.

I am with Megan McArdle in confirming that the non-pay portions of the typical public employee compensation package is at least as important, and as potentially expensive, as the money itself.  In particular, two aspects of many public employee compensation packages would be intolerable in my service business:

• Inability to fire anyone in any reasonable amount of time
• Work rules and job classifications

From time to time I hire seemingly qualified people who are awful with customers.  They yell at customers, or are surly and impatient with them, or ruin their camping stay with nit-picky nagging on minor campground rules issues.  In my company, these people quickly become non-employees.  In the public sector they become... 30 year DMV veterans.  Only in a world of government monopoly services can bad performance or low productivity be tolerated, mainly because the customer has no other option.  In my world, the customer has near-infinite other options.  And don't even get me started on liability -- when liability laws have been restructured so that I am nearly infinitely liable for the actions of my least responsible employee, I have to be ruthless about culling bad performance.

The same is true of work rules.  Forget productivity for a moment.  Just in terms of customer service, every one of my employees has to be able to solve customer problems.  I can't automatically assume customers will approach the firewood-seller employee for firewood.  All my employees need to be able to sell firewood, or empty a trash can when it needs emptying, or clean a bathroom if the regular cleaner is sick, or whatever.

For those who really believe state workers in Wisconsin are underpaid, I would ask this question:  Which of you business people out there would hire the average Wisconsin state worker for their current salary, benefits package, lifetime employment, work rules, grievance process, etc?  If they are so underpaid, I would assume they would get snapped up, right?  Sure.

Bonus advice to young people:  Think long and hard before you take that government job right out of college.  It may offer lifetime employment, but the flip side is that you may need it.  Here is what I mean:

When people leave college, they generally don't have a very good idea how to work in an organization, how to work under authority, how to manage people, how to achieve goals in the context of an organization's goals, etc.   You may think you understand these things from group projects at school or internships, but you don't.  I certainly didn't.

The public and private sector have organizations that work very differently, with different kinds of goals and performance expectations.  Decision-making processes are also very different, as are criteria for individual success within the organization.  Attitudes about risk, an in particular the adherence to process vs. getting results, are entirely different.

I am trying hard to be as non-judgmental in these comparisons as I can for this particular post.  I know good people in government service, and have hired a few good people out of government.  But the culture and incentives they work within are foreign to those of us who work in the private world, and many of the things we might ascribe to bad people in government are really due to those bad incentives.

It is a fact you should understand that many private employers consider a prospective employee to have been "ruined" by years of government work, particularly in their formative years.  This is simply a fact you will need to deal with (it could well be the reverse is true of government hiring, but I have no experience with it).  That is why, for the question I asked above about hiring Wisconsin government workers, the answer for many employers would be "no" irregardless of pay.

Apparently Google is getting accused of skewing its search results to favor its own products.   To which I say, so freaking what?   When did Google suddenly become a common carrier?  The implication is that by their very success (evidenced by a high market share) they have imposed on themselves more onerous rules than others operate under.  When I stay in the Marriott, and I ask the concierge about local dining options, don't I expect him or her to list the hotel's restaurant options first?

I suppose consumers might have a mild beef if Google is misrepresenting its service, but for gods sakes its free -- if you are suspicious of the results, there are like a zillion competitors.

This complaint is basically coming from businesses.  I know from past experience that seeing one's page rank drop with one of the regular Google algorithm tweaks is frustrating, but companies that through good SEO have climbed to the top of the search rankings are not owed anything, and in particular they are not owed that search ranking that they got for free.  In fact, these are businesses that are basically free riders on Google whining about Google's actions.  If they want to complain Google is not abiding by its terms of service on its paid listings, fine.  That is potentially a legitimate complaint.  But can't we agree that, as a foundation principle, government consumer protection action is never required for a free service somehow falling short of expectations?

A decade ago, I was an executive at an Internet startup named Mercata.  Mercata was one of a couple of entrants in a field we had named "group buying."   In practice, this meant there were limited time sales where the price of a product would fall based on the number of people who agreed to buy.   Obviously the volumes were not large enough to get economies of scale of any sort, so they main advantage of the approach was viral marketing -- once you had agreed to buy, you had an incentive to get others to join in as more buyers would reduce your price.

The company eventually folded.  The company was very professionally run for an Internet startup of the day, but it had a lot of overhead for its volume, and, as eBay would learn, a lot of people wanted to buy immediately rather than wait for some sort of auction to play out.

But it turns out that one of our biggest failures was timing.  Recently, a company called Groupon has taken advantage of social networking that did not exist 10 years ago and has been quite succesful building a business using a very similar model to Mercata's.  It appears that Google has just bought Groupon for $2.5 billion.  Sigh.

This is not, however, even my largest financial missed opportunity.  I still have in my desk a 1984 job offer from Microsoft, which I eschewed at the time because it paid less than my other offers and tried to compensate me in these crazy pieces of paper called "options."  I once calculated the current value of the options just in the offer letter (ie not including any future grants over time) and their value was well north of any conceivable net worth I might reach currently.

If it is one thing I have learned after reading "green" sites like this one, most greens don't seem very thoughtful about parsing green claims.  So this fairly outrageous ploy by hotels will probably work:

Guests checking into the Westin Kierland Resort and Spa or Sheraton Phoenix Downtown Hotel can do more than order breakfast or request privacy by hanging a card outside their door.

They can also decline daily housekeeping service.

The hotels are among a small but growing group who have taken their in-room "green" initiatives up a notch, adding the option of no cleaning on top of existing options to reuse towels and forego fresh sheets.

What a great idea!  Redefine green as "not doing the basic job you are paying me to do."   This is amazing chutzpah, and at some level I tip my hat to them.  Spot a market inefficiency -- in this case the incredible gullibility of the greens -- and exploit it.

I had a dinner conversation last night with my Massachusetts mother-in-law.  She is pretty interesting to talk to because she is a pretty good bellwether for Democratic talking points on most issues.  She was opposed to the recent Supreme Court speech decision removing limits on third party advertising near an election  (I think she misunderstood the scope of that decision but that is not surprising given the shoddy reporting on it, up to and including Obama getting it wrong in his State of the Union).   She advocated strict campaign spending restrictions (both in terms of amount of money and length of the campaign season) combined with term limits.

We could have gone a lot of places with the discussion, but we ended up (before we terminated the conversation in the name of civility) discussing whether restrictions on money were equivalent to restrictions on speech.  She of course said they were not, and said under strict monetary controls I still had freedom of speech - weren't we still talking in the car?

It is hard to reach common ground when one person is arguing from a strict rights-based point of view while the other is arguing from a utilitarian point-of-view.   Essentially she knows in her heart that she is restricting speech, but wishes to do so to reach a better outcome.  I made a couple of utilitarian arguments, including:

• I pointed out that when the stakes of government are so high, money and influence never goes away.  Just as in any economy, when you ban money, a barter economy arises.  So if we ban large campaign spending, then the quid pro quo becomes grass roots efforts and voter mobilization.  Groups like the UAW become more powerful (we are seeing that already).  They are trading their member's votes for influence.  Connected companies like GE are doing the same thing, trading their support for legislation that is generally hostile to commerce for specific clauses in said legislation that exempts GE and/or makes the laws even more punishing on their competition.  The problem with all this activity is it is hard to see and totally unaccountable -- at least with advertisements we see people out in the open with their agendas.
• I observed that it was smart to add term limits to her plan, as otherwise her recommendations would be the great incumbent protection act.  But by limiting money, immediate advantage is given to people who already have name recognition and celebrity.  Think we have too many actors and athletes running for office?   Well be prepared for a flood with stricter campaign finance restrictions

However, I tend to shy away form utilitarian arguments.  The best arguments I have against the notion that money can be restricted without restricting speech are:

• Her comment that I still had freedom of speech (ie I am talking freely in the car) with strict campaign cash restrictions ignores the actual wording of the First Amendment, which reads "Congress shall make no law ... abridging the freedom of speech."  Her test, which is "Am I still able to speak in some forum even if I can't in others" is not a valid test for conformance to the First Amendment.  Otherwise, speech could be restricted at will as long as there was some narrow safe harbor where one could express his opinion.    The better test is whether the proposed law, ie a restriction on how much and when a person can spend money advertising his or her opinions, abridges or reduces freedom of speech.  And I think it is hard to deny that everyone has less freedom, in the form of fewer options and reduced scope, after such legislation.
• One interesting test is to broaden the question -- Does restricting spending on something (in this case speech) constitute a restriction on one's underlying right to the activity (e.g. speaking freely).  I was tempted to ask her (she is a strong and vocal abortion rights supporter) whether she would therefore consider the right to abortion to be untouched by Congress if a law were passed to limit each person's spending on abortion to $5 a year.   Abortion would still be entirely legal  -- all government would be doing is putting on some spending restrictions.   Obviously one's scope and options to get an abortion would be limited -- only those who happened to have a doctor in the family could perhaps get an abortion -- just as under her speech plan only those who had a large newspaper in the family could speak fully and freely before an election.

The AZ Republic has an editorial today saying that privatization is not the answer for the Arizona State Parks budget woes.   On the plus side, they did actually call me for my opinion yesterday before they published it.  On the down side, they ignored everything I said.  Here is my response:

I run one of the larger private parks management companies in the country, which is based right here in Phoenix. Like many Arizona residents, I am a frequent visitor to our state parks and am sympathetic to their current budget pain. Further, I am not one to offer up privatization as a panacea for all the park's woes -- the state parks organization fulfills a variety of public missions that cannot be undertaken well privately. But I think you missed a couple of important considerations in your editorial today counseling against privatization options.

First, from my experience with public recreation agencies around the country, these budget pressures on parks organizations never really end. Recreation is almost always a key pawn in budget fights, and even if Arizona State Parks funding is restored this year, we likely will be fighting the same battles in a few years. Private concession management of parks has the advantage of taking parks off the budget, so they no longer can fall victim to budget fights. For example, in the famous 1995 federal government shutdown, private concession run facilities in the US Forest Service were the only federal recreation options that remained open through the whole budget battle.

Second, while small low-visitation parks, on a standalone basis, may not represent a very good business opportunity, there are a variety of ways to handle privatization of smaller parks. We run approximately 175 public parks and campgrounds across the country, and well fewer than half of these stand on their own as private business opportunities. But many public agencies have learned to package smaller, low-visitation parks with higher-visitation parks into multi-park packages that both provide operators a business opportunity as well as meet the public's goal of keeping all of its parks open. Further, states like California have found many creative ways to keep historic sites open using private management. These solutions, at places like Columbia State Park, not only keep historic buildings open to the public but also create events and services that bring history alive and make it more interesting, particularly to children.

I know that private management is often sloughed off with statements like, "they would just build a McDonald's or put in a bunch of billboards." But thousands of parks nationally are managed privately, and this never happens. In part, this is because business people should get some credit for intelligence, and they understand what attracts people to outdoor parks in the first place and don't want to mess with the ambiance. In addition, we often have 100+ page operating agreements in place that carefully set out the quality of our services and the approvals we must obtain to make any changes to the facilities.

Further, it is sometimes suggested that private companies would just jack up the price. Well, Arizona State Parks is proposing to raise the Slide Rock entrance fee to $20. In contrast, we run nearby picnic and day use areas at places like Grasshopper Point and we rapacious capitalists only charge $8.

I am not advocating that Arizona State Parks turn off the lights and throw the keys to a private company; but I do think that private concession management could offer a piece of the long-term solution to keeping state parks open, both now and in future budget battles.

Just what we need, the government choosing winners and losers in media like they do earmark recipients.  Since government ownership of GM was politicized in Congress before the ink on the court agreements was dry, I wonder how fast Congress will find a way to use a government media bailout to punish the critical and reward sycophants.

A top Democratic lawmaker predicted on Wednesday that the government will be involved in shaping the future for struggling U.S. media organizations.House Energy and Commerce Committee Chairman Henry Waxman, saying quality journalism was essential to U.S. democracy, said eventually government would have to help resolve the problems caused by a failing business model.

Waxman, other U.S. lawmakers and regulators are looking into various options to help a newspaper industry hurt by the shift in advertising revenues to online platforms.

Waxman continues:

"Eventually government is going to have to be responsible to help and resolve these issues,"

Why?  You mean like when the US government stepped up in the 19th century to bail out pamphleteers and failing broadsheet publishers when the market moved to new media?  Or when it moved to bail out network television under assault from new cable channels?  Remember that?  Neither do I.

Next steps:

At the Federal Communications Commission, officials are embarking on a quadrennial review of the state of U.S. media. The study, which is mandated by Congress, seeks to determine whether current rules should be changed to allow for a more vibrant media industry serving a diverse audience.

We have that.  Its called the Internet.  It emerged entirely free of government action (save some funding of some original infrastructure).  Go away.

A Cafe Hayek Reader asks:

Imagine we had entirely private health insurance market "“ no Medicare or Medicaid.  If I live to be sixty-five, I will probably have a personal and/or family history that indicates a strong probability of developing an expensive chronic condition. I would wager that is true of almost all sixty-five year olds.

So here is my question: which insurer in their right mind would take on my risk?

I suspect none. Once philanthropy and savings were exhausted, I would surely risk a painful life and preventable death.

Do I want this? Does anyone? Isn't "socialized" medicine for older people an unpleasant moral necessity for our wealthy society? Please note I am deeply suspicious of most arguments cast in moral terms in discussions of politics and economics. I ask these questions guardedly.

I answer in the comments:

Imagine we had entirely private life insurance market "“ no government options at all. If I live to be sixty-five, I will probably have a pretty high probability of dieing in the next 15 years or so. I would wager that is true of almost all sixty-five year olds.

So why would anyone insure me?

Because the life insurance market has developed a very reasonable solution to this -- you negotiate a term life rate for X number of years. Your rate might be Y a year for 10 years, or 1.5Y a year for 20 years, or 2Y a year for 30 years. The longer the rate guarantee, the higher the rate. You are explicitly paying higher rates than you might have in younger, less risky years to make sure you get a coverage guarantee at an affordable rate in later, risky years.

Of course, if you play the grasshopper and never buy insurance until you are 65, your price is going to be awful. But I don't think it is a reasonable role for government to do all kinds of individual-liberty-defying and costly things just because you did not take responsibility for your old age earlier in life. However, saying that, I of course know that this is EXACTLY what the government does with Social Security.

I have a high deductible individual insurance plan from Assurant who specializes in insuring individuals, and they have been evolving to a pricing model sort of similar to the term life model I listed above, though they are not quite there yet.

To the folks that say this is no solace for folks already 65, that is an implementation transition issue, not an argument against the market's ability to deal with this. Certainly a lot of folks have paid Medicare taxes for years and are counting on it. Some kind of phase out, possibly where the government redirects Medicare funds to make up the difference in policy prices for having not started locking in earlier, is possible. But the question was not an implementation question - it was a question of whether the market inherently fails for 65-year olds, and I think the answer is that it does not. We have a perfectly serviceable analog in life insurance to prove it

I call this the "failure of imagination" argument against free markets.  Some sector of the economy (such as education) has been dominated by government for so long that folks can't imagine a private model.  For example, when I argue for private grade school education, I can't tell you how often people say "private schools are all really expensive, no one could afford them."  Private schools are expensive because in the current government model, the only market niche for private schools is for families that can afford to pay the government for education they don't use and then pay a second time for a private school.

One of the burning reasons we apparently need a government takeover of health care is that it is "expensive," or more precisely, we spend a lot of money on it.

So what?  In everything else I can think of, rising per capita spending and higher spending in the US than elsewhere is a sign of wealth and prosperity, not a "problem."  We spend a lot of money on a lot of sometimes trivial sh*t, and no one blinks.  We spend more money because we have more beyond what we need to keep ourselves alive.  Or we spend more money because technology provides us new options and frontiers.  But when we spend a lot of money on our health and well-being and longevity, its a problem requiring massive government intervention?

Announced today:

President Barack Obama on Wednesday imposed $500,000 caps on senior executive pay for the most distressed financial institutions receiving federal bailout money, saying Americans are upset with "executives being rewarded for failure."...

The pay cap would apply to all institutions that have negotiated agreements with the Treasury Department for "exceptional assistance." Those would include AIG, Bank of America and Citi.

Firms that want to pay executives above the $500,000 threshold would have to use stock that could not be sold or liquidated until they pay back the government funds.

I don't get too worked up about this one way or another.  Once the government is a part owner of these companies, it is perfectly reasonable to expect them to dabble with things like compensation policy, and no surprise that focus of such dabbling would fall on whatever particular hobby horses the party in power seem to obsess about.  Which is reason #4097 why government shouldn't be bailing these guys out.

In terms of executive compensation, options have fallen a bit out of favor as executives have sought more of a guaranteed payday, and changing accounting rules and more scrutiny have made that harder to do with options.  The concern is,  of course, stock prices can fall or even go to zero and that part of the compensation package would be worth zero.  Executives are generally happy to take risks but only with other people's money (people who take risks with their own money are called entrepreneurs).

But in this case, most of these companies' stock is at what is likely to be the bottom, and each has the commitment of the government now not to let them go bankrupt, so the danger of stock values going to zero is, well, about zero.   Would you take warrants in a company priced at the market trough and with the US government guaranteeing the floor beneath you?   I can't think of a better time to get equity or option-based compensation, and so expect to see a lot of it in order to circumvent the $500,000 limit.  And a lot of big paydays 5-7 years hence.

I am having a blast at the Change.gov transition site for Obama, now that I have satisfied myself it is not a fake.  Those who doubt that Obama has super-human powers should read this, from the Obama site:

The Obama-Biden plan provides affordable, accessible health care for all Americans, builds on the existing health care system, and uses existing providers, doctors and plans to implement the plan. Under the Obama-Biden plan, patients will be able to make health care decisions with their doctors, instead of being blocked by insurance company bureaucrats.

Under the plan, if you like your current health insurance, nothing changes, except your costs will go down by as much as $2,500 per year.

If you don't have health insurance, you will have a choice of new, affordable health insurance options.

Wow - so now you can go out purchase any care you want - any tests, any procedures, whatever - and no one is going to tell you no.  Everything is paid for.  You have a blank check to go spend.  And, by granting you an infinite supply of care, your cost is going to go down.  Obama is really superman, because no one else in history has figured out how to invert the supply curve or make 2x cost less than x.

You see, it's all about insurers' margins.  If we can just cut down on those fat margins, everyone can have full health care and a pony for less money.  You doctors who are worried about health care, you will have it better too:

Prevent insurers from overcharging doctors for their malpractice insurance and invest in proven strategies to reduce preventable medical errors.

All these years you thought malpractice insurance costs were high because of huge malpractice court settlements that usually bore little relationship to true malpractice, well, you were wrong.  Its because of the insurers and their margins.  We don't have to reform malpractice tort law (which is just as well since tort lawyers were so generous with donations to our campaign), we just have to get insurers to stop overcharging doctors.

To give you an idea of the absolutely huge amount of savings that can be extracted by just pounding on the insurers to give more coverage for less money, let's take a look at those outsized margins they are making.  These are net profit margins reported by Google Finance for 3Q2008 of the largest health care providers and insurers:

Cigna: 3.50%
United Health Group: 4.56%
Aetna: 3.64%
WellCare:  4.08%
Amerigroup: 3.51%
Humana 2.56%
WellPoint: 5.49%

Freaking robber barons!  Look at those outsized margins.  No wonder we have a health care crisis.  By cutting these guys margins in half, Obama expects to reduce the price of health care by 1-2%, which should be more than enough to pay for large increases in services and 30-50% price cuts.

Update: Oh, its magic.  That explains it.

Update #2: OK, the page has come down, as have most all the pages that had any kind of policy detail or promises in them.  I wish I had screen shots, but I can say everything above was cut and pasted directly form the web site.  Could I make that stuff up?  Too bad, there probably were another 10 blog posts in there somewhere.