Posts tagged ‘planning’

Awsome Senate Testimony on Transit

From Randal O'Toole (of course). I usually try not to over-excerpt other folks work but I just can't resist in this case.  I like Mr. O'Toole's work on transit because he does not just focus on the cost-benefit issues, but the personal liberty aspects as well:

My testimony focused on two points. First, despite increasing transit subsidies by 1250 percent (adjusted for inflation) since 1970, transit travel has declined from 49 to 45 trips per urban resident and transit's share of urban travel has declined from 4.0% to 1.6%. Second, even if we could get more people to ride transit, transit uses as much energy, and emits nearly as much greenhouse gases, as cars; and the trends suggest that cars will be more environmentally friendly than any transit system in the country by 2025.

There were two interesting responses to my testimony. First, another witness said (and I'm quoting from memory), "All he did was divide total greenhouse gas emissions by passenger miles." A reporter told me later that it sounded like he was questioning my methods, but his real argument was that more money spent on transit in combination with smart-growth land-use planning would lead to reduced auto driving.

I don't believe that is true (and said so), but even if it were true: can you imaging AT&T (back when all phones were land lines) telling Congress, "We want you to restrict property rights, drive up housing prices, and prevent people from living in their preferred lifestyles so that we don't have to extend our lines so far?" Or FedEx or UPS saying the same thing today? Why is transit so special that everyone else in the country has to completely rearrange their lives just for it?

You can say the answer is "climate change," but transit agencies and smart-growth planners wanted to do all these things before climate was an issue. The truth is that transit is a declining but politically powerful industry, and part of its power comes from the fact that it is publicly owned and so elected officials have a vested interest in keeping it going.

In a very real sense, transit is just like the British coal, rail, and other nationalized industries in the 1960s: its main purpose is no longer transportation but to meet other political goals such as keeping transit workers employed and construction contracts going to transit builders. If transit were private, no one would argue that we have to make the world less convenient and more expensive for the 95 percent of people who travel by car so that it will be more convenient for the 1 or 2 percent who travel by transit.

Anatomy of a Deceptive Analysis

I am just looking over a report on "Smart Growth" as the be-all end-all to carbon emissions reductions  (and everything good up to and including world peace).  I haven't read it in depth, but just skimmed it and had a few thoughts.

First and most interestingly, the entire study is about the effects of "smart growth" but I can find no definition of the term.  I have a general idea of what it means -- zoning and land use policies that prevent the physical expansion of cities and strive for increased urban population densities combined with transportion policies that defund roads and highways in favor of mass transit, biking, and walking.    But it is odd that a real scientific study of the effects of X can be conducted without making sure everyone is talking about the same X.

Second, as with most such studies, the issue of individual liberties is carefully avoided.  Smart Growth is about living in the way planners prefer, not the way you individually might prefer.  Discussing the benefits of Smart Growth without once considering the impacts of individual liberty is a bit like blithely proving that killing everyone at the age of 70 will reduce health care costs without once discussing nagging ethical issues with such a plan.

I may do a more in depth debunking of this report (and I can bet Randal O'Tool will do one) but I want to show you one example of the difference between a scientific study and advocacy marketing materials like this one.  Here is a chart from page 10 of the report.  It is trying to show that higher urban densities will help all of our personal budgets.

smart_growth

First, we can probably assume the numbers here are complete BS.  Does anyone really believe that the average family outside the central city making $50,000 or less is spending more on transportation than they are on housing?

But that is almost tangential.  The real purpose of this chart is to deal with the number 1 criticism of smart growth -- that by limiting land use and restricting growth and forcing everyone to live in the city center, then housing prices skyrocket (and, by the way, help contribute to bubbles - it is no accident that many of the counties hit hardest by the recent housing bubble collapse are in growth managed counties).

This chart is meant to refute this by saying - see, housing in the center city is not more expensive -- the average person spends just as much on housing in the city as in the suburbs.  But hopefully you see the flaw -- what do they get for that money?  It may well be that for people $35,000 a year and under, the amount they can spend on housing is capped by other expenses they have, such that 1/3 of the total is about what they have to spend.  But this does not mean that people in the center city are just as well off as people outside of it.  It is very likely the suburban folks are getting far more for their money.  After all, people are rational, and if they really are spending so much more money for transportation to live in the suburbs, there probably is a good reason.

Postscript: It would also be interesting to know what the rest of the spending pie does from urban to suburban.  My guess is that folks living in city centers making less than $35,000 are not saving a ton - so where is all that "found" money going they are supposedly not spending on transit.  Could something else be more expensive in the city than in the suburbs?  Does anyone really believe it is cheaper to live in the city center than out in the suburbs for equivilent quality of life.  Sure, there are reasons to live in the city, and for some people's preferences it represents a better quality of life.  But not a cheaper one.

Postscript #2: In fact, the best single critique of all the smart growth analysis that purports to show that people will be better off when the planners intervene is "If so, then why are they not pursuing their own rational self-interest today?"  Smart Growth folks will say it is due to lack of choice, but that is silly -- if people want it, someone is going to make money giving it to them.  The only exception might be publicly supplied goods, particularly transportation.  I am sure there is a huge demand for having an expensive rail line run from one's house to one's business with low fares subsidized by other people, but I am not sure this is a realistic good to promise.

How Does He Do This With A Straight Face?

I already in a previous post deconstructed Kevin Drum and Joe Romm's critique of the carbon tax.  One reason they don't like the carbon tax is:

Well, for one, it doesn't have mandatory targets and timetables.  Thus it doesn't guarantee specific emissions results and thus doesn't guarantee specific climate benefits.  Perhaps more important, it doesn't allow us to join the other nations of the world in setting science-based targets and timetables.  Also, a tax lacks all of the key complementary measures "” many of which are in Waxman-Markey "” that are essential to any rational climate policy, but which inherently complicate any comprehensive energy and climate bill.

What they are basically arguing is that a carbon tax works by hundreds of millions of individuals making decisions in reaction to higher prices, and chosing their own way to reduce carbon production.  They don't trust this kind of bottom up chaos, despite the fact this is how our entire economy and society works, except for a few corners where beltway guys live and breath in their own reality.  They want a few "scientific" guys at the top picking winners and subsidizing technologies and particular approaches.

I described why I disagreed with this  (or you could spend some time with Hayek to really understand why it is wrong) but I found it staggering that the very next post from Kevin Drum in my feed reader was this one:

Via the LA Times, this is the best news I've heard all day:

The Obama administration on Tuesday proposed renewable fuel standards that could reduce the $3 billion a year in federal tax breaks given to producers of corn-based ethanol. The move sets the stage for a major battle between Midwest grain producers and environmentalists who say the gasoline additive actually worsens global warming.

....While biofuels as a whole "” including grasses and even algae "” are considered promising alternatives to petroleum, some researchers have begun challenging the use of corn for this purpose.

In particular, they point to the "indirect land-use" effects of pulling corn out of the world food supply, which could force farmers in developing nations to clear rain forests "” and release massive amounts of carbon dioxide in the process "” in order to plant corn.

Please dump the corn ethanol subsidies.  Please, please, please.  Dollar for dollar, it might well be the stupidest use of taxpayer cash in the entire federal budget.

Since ethanol is the largest example of Congress's past attempts to set "rational climate policy," what in the hell gives Drum confidence things are going to be any different in the future?  It is yet another example of technocratic planners arguing that the failure is not top-down planning, just the particular individuals doing the planning.  If only my guys did the planning, things would be different.  Right.

Besides, it was a Democratic Congress that passed the last round of ethanol subsidy increases and a Democratic Congress that is upping them again.  So it is Drum's guys doing the planning, and they are making a hash out of it, as all planners do.

For the record, I don't want my guys in DC doing the planning.  I want 300 million people making their own damn choices.  When did this ever stop being a liberal value?

When Government Tries to Pick Winners

Folks like Barack Obama have decided that wind power is the answer.  They haven't studied the numbers or really done much to investigate the technology, and god forbid that they have put any of their own money into it or run a company trying to make thoughtful investment decisions.  But he's just sure that such alternative energy technologies work and make sense because, uh, he wants them to.

But when government picks winners, disaster almost always follows.  Oh, sure, the programs themselves get a lot of positive attention in the press, and people are happy to line up to accept subsidies and tax rebates.  But the result is often this:  (ht: Tom Nelson)

According to the Massachusetts Technology Collaborative, the agency
that oversees the state's major alternative energy rebate programs, the
small wind initiative was canceled because the turbines it has funded
are producing far less energy than originally estimated.

An MTC-sponsored study released earlier this summer found that the
average energy production of 19 small turbines reviewed was only 27
percent of what the installers had projected. The actual production for
the 19 turbines, which received nearly $600,000 in public funding,
ranged between 2 and 59 percent of the estimates.

A $75,663 turbine at Falmouth Academy that received $47,500 in state
money, for example, has produced only 17 percent of the projected
energy in the year since its installation. Another, smaller device in
Bourne is producing only 15 percent of the originally estimated energy.

So the state government funds 2/3 of the project and the project still doesn't make sense

Mr. Storrs criticized the state for dropping the rebate program, which
over two years has covered upward of half the cost of several turbines
on Cape Cod and dozens of others throughout the state, saying, "It is
not what you would hope a progressive [state] like Massachusetts would
cancel. You would hope that they are supporting alternative sources of
energy."

Actually, he is correct.  Sinking hundreds of thousands of dollars into faulty technology for terrible returns based solely on the fact that a certain technology is somehow politically correct is exactly what I too would expect of a progressive state like Massachusetts.

The state board complains that the technology choices and siting decisions were wrong.  Well, who would have imagined that investors in certain projects would be lax in their engineering and due diligence when the government was paying 2/3 of the freight, and when the main reason for the projects was likely PR rather than real returns?

If the bit about PR and political correctness seems exaggerated to you, check this out:

During the hearing on the proposal two months ago Mr. Storrs told the
planning board that the project was meant in part to help educate the
public about wind energy. Town Planner F. Thomas Fudala said it would
be informative to see whether the roof-mounted ones actually work.
"Even if this fails, it will be useful information," he said.

Mr. Storrs responded, "I know that sounds weird, Tom, but you are absolutely right."

Wow, I bet this kind of investment decision-making really give the local taxpayers a big warm fuzzy feeling.  By the way, this article also includes an example of why Al Gore and others proposing 10-year crash programs to change out the entire US power infrastructure are impossibly unrealistic, even forgetting about the cost:

Mr. Storrs said he first ordered
the Swift brand turbines last year as part of a bulk order along with
the Christy's gas station in West Yarmouth.

But the planning board had already adopted its new turbine regulation,
which, in part on the advice on Ms. Amsler, had prohibited the
roof-mounted machines.

"The town was just trying to be responsible in terms of looking out for
its residents, trying to make sure these things are not going to pop up
everywhere if they aren't going to work," said Thomas Mayo, the town's
alternative energy specialist.

At Mr. Storrs request, however, the planning board then went back and
reconsidered its regulation. After a public hearing featuring testimony
from Ms. Amsler as well as from a representative of Community Wind
Power who argued that the Swift turbines work well and as advertised,
the planning board decided to change the bylaw and allow Mashpee
Commons to move forward with its project.

The Mashpee bylaw requires a return on investment plan, a maintenance
plan, as well as proof that the proposal meets several safety and
aesthetic prerequisites.

Town Meeting adopted the new bylaw in May, Mashpee Commons quickly
filed its application, and received a special permit in early June.
During the comment period for the special permit, the state program was
suspended.

After receiving the special permit, Mr. Storrs said he applied for
Federal Aviation Administration approval, which is required for any
structure over three stories in town. More than two months later, he
said he is still awaiting that approval.

Mr. Mayo said the town's application for FAA approval of a site under
consideration for a large municipal turbine took six months to approve.

In Search of the Good Life

Tim Harford Via TJIC:

Superficially, it seems that many people seek sunny climes,
especially now that air conditioning is available. For example,
long-run population growth in the "Sunbelt" "” the US South - is often
attributed to a demand for, well, sun.

Harvard economists Ed Glaeser and Kristina Tobio think
otherwise. They argue that before 1980, the boom in the South was
thanks to the region's growing productivity. After 1980, population
continued to grow, but house prices lagged behind those elsewhere in
the US, suggesting that the driving force was not high demand but
permissive planning rules. Certainly balmy California, with its tighter
restrictions on building, did not enjoy the same population growth.

All of this tends to suggest that people don't value sunshine quite as much as is supposed.

I have pretty convincing anecdotal evidence that the first part, at least, is true.  I worked for a large manufacturing corporation called Emerson Electric (no relation to the electronics company).  They are one of the few Fortune 50 companies not at all coy to admit that they move factories around the world chasing lower wages.  They had an epiphany decades ago, when in their planning, they assumed the move overseas was always a trade-off of wages for productivity... until they visited at motor plant in Brazil that had first world automation and productivity combined with third world wages.  That got their attention.  To their credit, they have pushed this further and further, such that not only are their factory workers in Mexico, but their plant superintendents and skilled workers and even their engineers are now Mexican too.

Anyway, if you listen to the company tell this story, phase 1 of the story was not a move to Mexico or Asia but to the south.  They must have moved probably 50 manufacturing plants over a decade from the northeast to the south during the sixties and seventies. 

This constant movement seems to be a natural life-cycle of locations as they grow wealthy.  Poorer regions eagerly welcome newcomers who may bring jobs and prosperity.  But, once the prosperity is there, the prosperous in town begin using government and other institutions to try to lock in their gains.  Corporations use government to fight new competitors.  Wealthy homeowners pass zoning to keep home prices high and rising.  Unions tend to increase and lock in gains for current workers at the expense of new workers.  A kind of culture of hostility emerges to any new job that makes less than $54,000 a year, any house that costs less than $400,000, and any immigrant who doesn't have a pale face.

Zoning and the Housing Bubble

The Anti-Planner links an article by a Federal Reserve Bank economist on the housing market in Houston and how it is affected by zoning:

"Given that Houstonians had access to the same new types of
mortgages as the rest of the country and that Houston has had greater
population growth than other large metros, we might expect price
appreciation to be stronger in Houston than elsewhere," says the
article. "However, the opposite has been true."

The reason? Houston's lack of zoning and its large supply of land
available for development allowed builders to respond to easy credit by
increasing the pace of construction. Slow and unpredictable permitting
processes prevented builders in many other regions, including Florida
and the Pacific Coast states, from similarly stepping up production.

While some cities and regions have further delayed construction by imposing adequate public facilities or concurrency ordinances, Houston allows developers to create their own municipal utility districts.
Through these districts, the developers install the sewer, water, and
other facilities needed by their developments and charge the property
owners over time.

The result is that housing prices did not bubble, and they are not
significantly declining today. As of the fourth quarter of 2007, in
fact, they were still increasing. Anecdotal evidence from local
realtors and developers indicates that the tightening credit market has
soften the demand for homes under $200,000, but homes above that price
are still selling well.

Whatever correction Houston faces, says the article, "takes place in
the context of prices that are squarely in line with local construction
costs and without the painful supply-induced downturn under way in many
other markets." This leaves Houston relatively immune to the ups and
downs of housing prices experienced in regions with planning-induced
housing shortages.

I need to think a bit about how that relates to this.

Rewriting History

I was watching the History Channel last night and watching a show on the nuclear arms race.  Interestingly, they described the abortive Bay of Pigs invasion of Cuba as happening before JFK took office, and then discussed the Cuban Missile Crisis as JFK's first interaction with Russia.  I find this to be really odd revisionism, and if it were not for Coyote's Law, I would ascribe this to the ongoing Kennedy family effort to polish JFK's historical legacy.  But, having written Coyote's Law, I will just assume the show's producers were ignorant.

Update: I take the point that the Bay of Pigs invasion was a CIA plan in the Eisenhower presidency.  However, JFK was deeply involved in the planning and decision to go ahead, and in fact he and his advisers actually modified the plan, including the invasion site, in ways that hurt the probability of success (if there ever was any).

IKON: The Perfect Storm of Suck

I had a really bad day today. 

I have a 18,000 page proposal (actually 18 copies of a 1000 page proposal) due next week.  I had a new color printer ordered from IKON Office Solutions scheduled to arrive last week.  When I got in town this morning, I found no copier, even a week after it was promised.  No call, no warning -- just no printer.  I called and my sales guy had no idea what was going on, despite the fact that I had been adamant that I needed to hit this date.  Apparently, he never even bothered to check the schedule.

Anyway, he promised an immediate call back but never called.  I called him again on his cell at noon and he acted like he had forgotten to check and promised to talk to his boss.  An hour later it was confirmed -- I was not getting my equipment in time for this bid.  I told them they could therefore keep it, and I would call Xerox.  I absolutely cannot stand companies that require me to do constant checking and expediting in order for them to deliver on their promises.  I can't tell you how many times I have been promised an immediate call-back from IKON "within the hour" for service only to have to call again and again over the following days to get any response.  I would not have contracted for this new machine in the first place if I wasn't already locked in an IKON lease they won't let me out of -- this would at least have gotten me a better machine for the money.

In the mean time, I prepared to do the proposal mostly in black and white with bits of color from the laser printer.  I was going to use my high speed B&W copier I had under lease from IKON, and which we were planning to replace with the new machine that never showed up.  I had a technician from IKON out just last week to check it so I knew it was in good shape.  WRONG.

Within minutes of use, the machine began spitting out horrible copies.  Looking inside, it was clear something in the heat-finisher was unraveling and very broken.  I called service and was given an emergency designation and assured of a call in one hour.  Nothing.  So I called again, and was again assured that I would definitely hear from a technician in one hour.  Nothing.  Now, everyone has gone home, and the messages all say they will get back to me on Monday, when it will be too late.  I called my sales person on his cell phone tonight (the one that was begging me a few hours earlier, asking me what he could do to save my business) and was told there was nothing he could do and he had no way of getting in touch with a dispatcher or any real human service person until Monday.  Right, they are willing to do anything for me except what they are supposed to do.

So here I am, with a thousand dollar a month copier that doesn't copy, a color copier that is not here, and the prospect of spending all weekend and a couple grand at Kinko's to get my proposal out.

IKON has been informed that they are now in breach of their service contract and may come by any time and pick up their boat anchor.

Sustainability Through Poverty

In my previous post on urban planning, I mentioned the increasingly popular idea of sustainability through povertyDon Boudreaux responds to the currently hip idea that somehow we need to revert to a more local economy with local food production.  This is absolutely absurd, for any number of reasons.  I'll just list three:

  • It doesn't work.  The total energy used for transport, say of food products, is a small percentage of the total energy used in the total production process.  The energy transportation budget is generally smaller than efficiency gains from scale or from optimizing location.  For example, a wheat farm in Arizona on 50 acres is going to use a lot more energy (and water, and fertilizer, and manpower) than a wheat farm on a thousand acres in North Dakota.
  • It leads to poverty.  Our modern society, our lifestyles, our lifespans all are a result of the fantastic increases in efficiency we have reaped from the division of labor.  A push to localize all production reverses the division of labor.  Many products, such as semiconductors, become outright impossible on a local scale.
  • It leads to starvation.  It is hard for us to imagine famine in the wealthy nations of the world.  Crop failures in one part of the world are replaced with crops from other parts of the world.  But as recently as the 19th century, France, then the wealthiest nation on earth but reliant on local agriculture, experienced frequent crop failures and outright starvation.

More on the food-miles stupidity here.  And an interesting study that shows that processed foods greatly reduces waste and trash to landfills was here.

Update: More on food miles here at Reason

Chanelling Milton Friedman

For years I have tried to find the right words to express my frustration with the notion that the problems encountered with government planning and technocratic meddling was merely the fault of having the wrong humans in charge, rather than of the system itself.  For example. I wrote:

Today, via Instapundit, comes this story about the GAO audit of the decision by the FDA to not allow the plan B morning after pill to be sold over the counter.
And, knock me over with a feather, it appears that the decision was
political, based on a conservative administration's opposition to
abortion.  And again the technocrats on the left are freaked.  Well,
what did you expect?  You applauded the Clinton FDA's politically
motivated ban on breast implants as a sop to NOW and the trial
lawyers.  In
establishing the FDA, it was you on the left that established the
principal, contradictory to the left's own stand on abortion, that the
government does indeed trump the individual on decision making for
their own body
  (other thoughts here).
Again we hear the lament that the game was great until these
conservative yahoos took over.  No, it wasn't.  It was unjust to scheme
to control other people's lives, and just plain stupid to expect that
the machinery of control you created would never fall into your
political enemy's hands.

Well, it turns out that Milton Friedman said it better decades ago.  Megan Mcardle reminded me of this passage from Free to Choose:

The error of believing that the behavior of the social organism can be
shaped at will is widespread. It is the fundamental error of most
so-called reformers. It explains why they so often feel that the fault
lies in the man, not the "system"; that the way to solve problems is to
"turn the rascals out" and put well-meaning people in charge. It
explains why their reforms, when ostensibly achieved, so often go
astray.

Someone Should Study this Phenomenon

Of late, Democratic lawmakers have argued that gasoline prices are set at the caprice of oil companies, and mainly serve to provide them with undeserved profits.  However, we here at Coyote Blog try to bring you breaking news at the frontiers of scientific inquiry, and, via the USA Today, we get this fascinating revelation:

The average American motorist is driving
substantially fewer miles for the first time in 26 years because of
high gas prices and demographic shifts, according to a USA TODAY
analysis of federal highway data.

The growth in miles driven has leveled off
dramatically in the past 18 months after 25 years of steady climbs
despite the addition of more than 1 million drivers to the nation's
streets and highways since 2005. Miles driven in February declined 1.9%
from February 2006 before rebounding slightly for a 0.3% year-over-year
gain in March, data from the Federal Highway Administration show.
That's in sharp contrast to the average annual growth rate of 2.7%
recorded from 1980 through 2005....

The nation has not seen such stagnant growth in
driving since 1981, when the USA staggered through an oil shortage and
a recession. Gas prices reached an all-time high of $3.223 in March
1981 when adjusted for inflation in today's dollars.

Wow!  This seems to imply that prices have a here-to-for unsuspected utility.  They might actually be useful for matching supply and demand of scarce resources.  Fascinating.  Maybe Congress can commission a study of this phenomenon.

Postscript: Leaving the snark aside, it is hilarious in this article to see an urban planning group trying to bend over backwards to say that really, price was only a minor factor -- this really had to do with demographics and the success of our urban planning and public transportation.  Of course, it's just a coincidence that this step change occurred at the same time as a gas price spike, and that the last time it happened was the last time that gas price spiked.  Note that none of the data in the article actually supports the point of view that this was anything but a direct response to price signals.

We Know How You Should Be Living

TJIC has a nice post on the arrogant paternalism inherent in urban planning.

The Party is making decisions about how we should live, and then, eventually, telling us about them.

The aim is to have 80 percent of new housing and new jobs in cities
and larger municipal centers such as Framingham, Peabody, Norwood, and
Marlborough. That would enable more people to walk or use mass transit
and thereby reduce traffic and pollution, according to the plan.

So, of the million possible variables, the ones they've chosen to
optimize are the minimization of the average distance one has to drive
to get to work.

Things they have implicitly then de-prioritized:

  • open space per family
  • privacy per family
  • floor space per family
  • minimal overall commute time per individual
  • noise abatement
  • etc.

I liked this bit:

The problem is, the statists don't really care about green space per
se. They care about government owned (or at least government
controlled) green space. Which is better? 20 acres of land lumped into
a government owned wetland sanctuary that no one ever visits, or 20
houses, each on 1 acre lots, covered with gardens, yards, trees, and
tree-houses? The government employee doesn't get to meddle in the
individual lots, so he's always going to say that the government owned
patch is better.

More Stock Broker Hard Sell

I am still getting the hard sell from cold-callers touting securities.  I am told this is because we small business owners are just behind dentists and doctors in terms of our capacity to make bonehead investments.

Before I proceed with this story, there are two things you need to know about me:

  • I answer my own phone at the office
  • I have never, ever listened to a sales pitch for an investment or security.  If I am in a good mood, I interrupt and say, "sorry, not iterested" before they can even name the stock.  If I am in a bad mood, I just hang up.

So the other day, I accidentally let one of them go further than I usually allow.  He said he was from Olympia Asset Management.  (There is an Olympia Asset Management web page, but I don't know if it is the same company and the web page has not been updated for several years.)  I let him run for a bit because a friend of mine runs a very well-respected financial planning firm with a different name but also with Olympia in the title, and for a moment I thought it might have been one of his folks.

Anyway, he proceeds to try to convince me that we have talked before and discussed a certain security.  "Remember me, we talked six months ago about ____".  Of course, I had never heard of the guy.  At this point I usually hang up, because I have heard this crap before -- it is a common pitch.  The best I can figure is that they are trying to give themselves more credibility by either:

  1. Trying to imply that we have some kind of relationship we actually don't have.  Or worse...
  2. Trying to convince me that he touted stock A six months ago, so now he can tell me stock A has gone up in price.  Many reputable brokers built their reputation by cold calling people and saying:  Watch these 3 stocks and see how they do and I will call you back in 6 months.  That way, you can evaluate their stock picking without risk.  The modern sleazy approach is to pick a stock that has gone up a lot in the last 6 months, and then call some harried business person and pretend you called them with that pick 6 months ago, hoping that they will give you the benefit of the doubt.

For some reason, maybe because I was bored, I decided to chat with him, and I had to admit that he was trained pretty well never to give up.  I interrupted him after the "do you remember" opening and said that we could not possible have spoken about a stock, because I always hang up on people within 5 seconds of knowing it is a stock pitch.  He said he had sent me a packet of information.  I said that he had not.  He insisted that we had talked, and that I had promised to write down the name of the stock on my calendar.  I told him I don't have a calendar  (which is actually true - I manage myself through a dysfunctional combination of memory and post-it notes).  Sensing weakness, I turned on him and said "gee, I was out of town a lot 6 months ago and am surprised you got hold of me.  What date did you call."  Then he starts getting all vague on me.  Anyway, I finally tired of the game and hung up but he never relented in his assertion that he and I had had a nice chat about some security.

Please, please.  Avoid these guys on the phone like the plague.  Several years ago I had a guy call me with some oil drilling "opportunity."  In that case, I also made an exception to my rule and listened to see just how bad this thing was going to be.  Finally I broke in and said "that's ridiculous, no one in their right mind would send you money for that."  He too was relentless, until I finally said "Look, I know Tony Soprano is standing behind you in the boiler room there and putting pressure on you, but I am not interested."  Then, without a pause, he starts telling me how he once threw a Molotov cocktail into the car of someone he didn't like.  I don't know if he was just having fun with me, but he was either wildly unprofessional or very creepy.  Beware, Beware, Beware.

Government as a Barrier to... Everything

I have had experience on several occasions attempting to bring private solutions (at no cost to the city government) to certain municipal problems.  The general approach to such offers, which seems to be similar in every city I have lived in, is to get together a meeting of every single government authority that could possibly have some tangential jurisdiction over the particular problem (e.g, city, county, state, highways, parks, water, environment, etc. etc.).  In this meeting, the discussion goes around the table, with every single participant adding another reason why the proposal is a problem and/or another roadblock or required approval.  This is not an exaggeration - I can't remember one person in such a meeting try to fix a problem or make something happen.  Everyone in government has an incentive system, it seems, that revolves around avoiding risk and preventing change. 

That is why I know that this story is typical of government, not an aberration:

LSU hospital officials began planning for a temporary network of
neighborhood clinics in early November 2005, barely two months after
Hurricane Katrina knocked Charity Hospital out of commission and threw
health-care services for many of the city's uninsured into disarray.

Eight months later, in late June and early July, FEMA delivered the
trailers to New Orleans, with the $761,000 bill picked up by the
federal government.

It wasn't until last week that the New Orleans City Council agreed
to temporarily waive the city's zoning code to allow the trailers to be
located at six schools around the city -- three on the east bank and
three in Algiers -- for two years.

In between fell more than 100 meetings and dozens of e-mails about
the issue involving LSU executives and officials at the city, state and
federal levels. And the journey is not over. The zoning waivers still
need approval from Mayor Ray Nagin, which cannot occur until next week
at the earliest, as well as permits from the city that could take up to
six months to acquire.

What Will Those French Think of Next?

Apparently, the French government is planning to sink a couple of Billion euros into a risky new technology called an "internet search engine." (via hit and run)

Germany and France had initially discussed plans to commit €1 billion
to €2 billion, or $1.3 billion to $2.6 billion, over five years to
Quaero. The project was to have been paid for by the French and German
governments, with contributions from technology companies like Thomson
and France Télécom on the west side of the Rhine, and Siemens and
Deutsche Telekom to the east.

In related news, the French government also announced a massive technology development effort to invent some kind of round thing for cars to roll around on.

Confirming What We've Suspected

I usually try to wait a while to let sources like this get vetted.  With the proviso that it may turn out that this guy didn't have the access he says he had, this certainly is pretty damning, though I don't think many Bush critics will be surprised.  This is a quote in a local paper from an interview of Brigadier General Mark Scheid, who claims to be one of the top planners for the Iraq war (Hat tip:  Orin Kerr at Volokh, emphasis added)

A day or two [after 9/11], Rumsfeld was "telling us we were going to
war in Afghanistan and to start building the war plan. We were going to
go fast.

Then, just as we were barely into Afghanistan ... Rumsfeld came and told us to get ready for Iraq." . . .

Planning was kept very hush-hush in those early days.

"There was only a handful of people, maybe five or six, that were
involved with that plan because it had to be kept very, very quiet."

There was already an offensive plan in place for Iraq, Scheid said. And
in the beginning, the planners were just expanding on it.

"Whether we were going to execute it, we had no idea," Scheid said.

Eventually other military agencies - like the transportation and Army materiel commands - had to get involved.

They couldn't just "keep planning this in the dark," Scheid said.

Planning continued to be a challenge.

"The secretary of defense continued to push on us ... that
everything we write in our plan has to be the idea that we are going to
go in, we're going to take out the regime, and then we're going to
leave," Scheid said. "We won't stay."

Scheid said the planners continued to try "to write what was called
Phase 4," or the piece of the plan that included post-invasion
operations like occupation.

Even if the troops didn't stay, "at least we have to plan for it," Scheid said.

"I remember the secretary of defense saying that he would fire the next
person that said that," Scheid said. "We would not do planning for
Phase 4 operations, which would require all those additional troops
that people talk about today.

"He said we will not do that because the American public will not back us if they think we are going over there for a long war."

If true, this is hard to defend.  I guess the administration could argue that they didn't want to clutter up their core planning effort with contingencies.  Beyond this being pretty bad planning practice, it also makes no sense because at the time this planning started, according to the administration time line, the Iraq War itself was just a contingency.

Free Market Does Not Mean Pro-Business

I hate the term "pro-business."  In my mind, it helps to define what is wrong with the political choices we are presented with in this country.  All of us in civics class were taught the statist "heads I win, tails you lose" political spectrum from left to right.  On this spectrum, everyone is in favor of government intervention and the sacrifice of one group of people to another.  The only thing that varies across the scale is who is the beneficiary of the plunder and the targeted areas of intervention.  For years, most of the politicians who have called themselves "pro-business" were not free market capitalists -- they spent much of their time in office sending their businessman-buddies slices of pork, zoning variations, special permission to trash other people's property (e.g. via pollution) etc.

Beyond the fact that we small government libertarians and anarcho-capitalists are given no spot on the civics class political spectrum, I have always been frustrated at being lumped together with "pro-business" politicians, and have been asked to defend (which I won't and can't) various subsidies and corporate welfare.  An example of my attacks on this type of corporate welfare crap are here and here.

So, without further comment, I present this great except from an article by Gary North of the Mises Institute:

The idea that businessmen are strong defenders of the free
enterprise system is one which is believed only by those who have never
studied the history of private enterprise in the Western, industrial
nations. What businessmen are paid to worry about is profit. The
problem for the survival of a market economy arises when the voters
permit or encourage the expansion of government power to such an extent
that private businesses can gain short-term profits through the
intervention into the competitive market by state officials. Offer the
typical businessman the opportunity to escape the constant pressures of
market competition, and few of them are able to withstand the
temptation. In fact, they are rewarded for taking the step of calling
in the civil government.

The government's officials approve, but more to the point, from the
point of view of the businessman's understanding of his role,
shareholders and new investors also approve, since the favored
enterprise is initially blessed with increased earnings per share. The
business leader has his decision confirmed by the crucial standards of
reference in the market, namely, rising profits and rising share prices
on the stock market. No one pays the entrepreneur to be ideologically
pure. Almost everyone pays him to turn a profit.

This being the case, those within the government possess an
extremely potent device for expanding political power. By a
comprehensive program of direct political intervention into the market,
government officials can steadily reduce the opposition of businessmen
to the transformation of the market into a bureaucratic, regulated, and
even centrally-directed organization. Bureaucracy replaces
entrepreneurship as the principal form of economic planning.
Bureaucrats can use the time-honored pair of motivational approaches:
the carrot and the stick. The carrot is by far the most effective
device when dealing with profit-seeking businessmen.

Those individual enterprises that are expected to benefit from some
new government program have every short-run financial incentive to
promote the intervention, while those whose interests are likely to be
affected adversely "” rival firms, foreign enterprises, and especially
consumers "” find it expensive to organize their opposition, since the
adverse effects are either not recognized as stemming from the
particular government program, or else the potential opponents are
scattered over too wide an area to be organized inexpensively. The
efforts of the potential short-run beneficiaries are concentrated and
immediately profitable; the efforts of the potential losers are
dispersed and usually ineffective.

Estate Tax Confusion

It is not surprising that that a debate like the one over estate taxes that attracts so many class warfare fanatics should miss the point on a lot of issues.  However, the estate tax debate has been handled in the media perhaps worse than even other tax debates, which is a pretty low bar to try to crawl under.  The reason I say this is that the most serious "end the estate tax" type proposals out there have two parts, only one of which I have ever seen mentioned in the press:

  1. End the federal tax on estates (this, of course, is the part that gets the press)
  2. End the stepping-up of the cost basis of financial assets at death (this part never gets mentioned)

This 2nd piece of the proposal may seem arcane to some -- let me explain.  Most large estates (ie, the ones that estate tax supporters are concerned about) are dominated by financial assets (e.g. stocks, bonds).  These financial assets, typically held for years, tend to have a cost basis far below their current market value.  An example might be shares of Microsoft held for 10 years that were purchased for only a small fraction of the current price.  The cost basis of a financial asset is generally its purchase price plus commissions and other transaction charges.

Lets take a gentleman who dies and whose estate is made up entirely of $10 million worth of Coca-Cola stock bought years ago for just $5 million.  The estate all goes to his one daughter.  Under estate law, two things would happen.  The estate pays a large tax on the $10 million, and the remainder flows through to his daughter.  Lets say taxes take half, and his daughter now has $5 million of stock with an original price of $2.5 million.  The other thing that happens is the basis of assets is stepped up to current market value.  That means that as far as the IRS is concerned, his daughter owns stock worth $5 million with a basis of $5 million.  If she immediately sold the stock, she would have no capital gains tax.

There are a couple of good arguments against the estate tax.  From an efficiency standpoint, it diverts large pools of capital from private investments into the hands of the Federal Government, where only the most ardent statist would argue that it is better spent.  Also, billions and billions of dollars are spent every year with lawyers, accountants and financial planners to find ways to dampen the impact of the estate tax.  This is all wasted, unproductive effort that would immediately be redirected to more productive uses if the estate tax were eliminated.

From a fairness standpoint, the estate tax acts as a second tax on income that has already been taxed before.  In our example, though the $5 million capital gain is getting taxed for the first time in the estate, the $5 million original costs, which must have come from taxed income at one time, is getting taxed for at least a second time.  The other fairness problem becomes visible if we change the name of the stock from Coca-Cola to "Dad's private company."  For family businesses, ownership is not as easily divisible - you can't sell half or two-thirds that easily in part because there is not much market for minority shares of small family businesses.  What therefore happens in practice is that the daughter must sell the family business to pay the taxes.

The estate tax reform plan outlined above eliminates both these latter problems.  Under these rules, the daughter would inherit the full $10 million of stock, but, unlike today, her basis would remain the same as her dad's -- in this case, $5 million.  She would not pay any tax until she sold any of the assets.  And then she would pay capital gains taxes using the lower basis of her father's.

This results in two beneficial outcomes:  a)  taxes are only charged on the part of estates that have not already faced income taxes and b)  taxes are only paid when the individuals who inherit choose to make an asset sale and convert assets to cash.  The timing of assets sales drive taxes, whereas today, in all too many cases, taxes drive the timing of asset sales.  (By the way, supporters of the estate tax also argue that it is good because the estate tax incentivizes charitable giving.  The argument is that the tax is so confiscatory, and that the government so well-known as a black hole for money, that rich people decide it is better to give it away than to let the government take it all.  This is an odd argument for statists to make, but they do.  Note that in this estate tax proposal, the daughter would inherit a lot of low-basis stocks.  The same charitable giving incentives exist for low-basis stocks, since the IRS will give you credit for the market value as a deductible gift but you don't have to pay the capital gains).

Asymmetrical Information has been on this case for a while:

There is no case for saying, as the New York Times inexplicably does, that "Repeal would shield
the estates of the very wealthiest Americans from the tax." It does not. It
does, however, defer taxation. Because basis will no longer be 'stepped-up'
after death (except for a $1.3 million exemption) they will simply be taxed like
all other capital gains - at the time those gains are realized.

Stepped-up basis is one of the four legs of the estate-planning stool along
with the life insurance tax exemption, minority discount valuations and the division of income and
principal interests (such as the "estate
freeze
"). It is not entirely clear that beneficiaries of large estates are
better off after repeal when the full toolkit of estate planning techniques is
taken into account - unless capital gains tax is done away with altogether and
the states stop taxing estates. Neither is likely to happen.

Given the large estates I've seen avoid taxes, I am skeptical of analyses
that suggest an enormous impact to revenues from this repeal. I don't believe
they factor in the new potential revenues from carryover basis outside the
traditional estate tax shelter vehicles. Certainly, the capital gains rate is
lower than the estate rate, but when estate tax shelter vehicles dwindle away,
more assets will ultimately be subject to capital gains taxation. Based on what
estate planning professionals tell me, it will be a wash in many cases and more
expensive in some significant estates. In other words, with respect to the
Estate Tax, we may still be in the fat part of the Laffer curve, where a lower statutory rate may yield higher
revenues over time (due to avoidance behavior, not a lack of work
incentives).

This post also cites a study that says that increased capital gains taxes on inherited assets could offset estate tax losses to the government.  That seems aggressive, assuming a lot of assets are getting passed in vehicles (trusts?) that avoid or limit estate taxes, but the offset is there never-the-less and is something you will never ever see in a newspaper article about the estate tax.

I haven't paid attention to the current Congressional proposals out there, but the post goes on to argue that Congress, as is its wont, has chosen the worst of both worlds while maximizing rent-seeking opportunities.

postscript: By the way, shame on all of those accountants, lawyers, and others in the estate planning profession.  They all tell their clients that the estate tax is confiscatory, and can go on for hours with a client about various things that are unfair in the system.  But at the same time they run to Congress begging them to keep the whole tottering complex system in place to protect the rent they extract from inefficiencies in the system

Bureaucratic Nightmare

I have written before about the silliness of the liquor licensing process.  A regulatory procedure perhaps necessary when the government was trying to drive organized crime out of liquor in the 1930's, its insanely useless today.

For example, last winter we replaced a store building at the same address with a brand new building.  It did not even occur to me that I might have to make any changes to my liquor license.  Surprise!  Here is the paperwork required to activate my existing, already paid-for license at the exact same address, only in a newer building:

Application

Its hard to tell from the picture, but we are talking lots and lots of detail, much of it repeated several times through the application.  And most every page has to be notarized.  How much of this is new and not already on file with my current license?  Just one-half of one page, down in the lower right where I draw the floor plan of the new building.  Everything else is a total repeat of the information on file.

My favorite question I had to answer to move my liquor license to a new building?  They require I give them the date and location of my wedding.

Update: Oh, and it has to be approved by the County planning department, who for several days now have not returned my calls.  And it may have to go in front of the county commisioners.  And I am pretty sure it will have to be publicly posted on the new building for a 30-day comment period, and I will have to pay for an announcement for three weeks running in the local paper.  And then it will probably be approved, just about when it will be time to close for the season.  For those who have not been there, though, McArthur-Burney Falls State Park is gorgeous, and, if I can brag, I think our new building is a big improvement as well.

Race-Based Tenant Restrictions

I am on the Big Island of Hawaii today doing some business (yes, I know, lets hear all those violins).  I encountered a program here called Hawaiian Home Lands.  Apparently the state makes long-term leases of land for homes available at $1 a year to native Hawaiians.  Recipients of this largess may either get a lot with an existing home, or just an undeveloped lot they can build on (using special subsidized loans and with a number of special exemptions from building and development codes).  People may pass on the lease and the improvements they have built to their kids as long as their kids qualify for the program as well.

On its face, this appears to be one of those well-meaning government programs designed to deal with a problem that many resort destinations face, that locals who work in the resort communities often get priced out of the market for homes in the area where they work (Vail is the classic example of this problem).  Unfortunately, as with many government programs, this program has some perverse results.

Qualifying for the program requires that the recipient pass a strict racial test, which the HHL web site says is "50% or greater native Hawaiian blood".  Setting eligibility for a government program based on racial tests is pretty outlandish in and of itself, but it gets worse.  People taking advantage of the program need to think carefully about the race of their mate before they decide how much to invest in their home.  A 75% Hawaiian who marries a full-blooded Hawaiian will be able to pass the improvements on to their children (since the children will be more than 50% Hawaiian), and thus can justify a large home investment.  The same person who marries a full-blooded Japanese or African or Anglo-Saxon will not be able to pass their home on to their kids, since their kids will fail the race test.  So, not only is there a race-test for a government program, but the government is providing strong financial incentives not to "dilute" a certain race.  Hawaii über alles.

By the way, those who don't think that passing assets to one's kids is an important part of long-term investment thinking should compare the houses built by program participants who know their kids cannot inherit to those built by those who will be able to pass the investment to their kids -- there is no comparison.  This would make a very fertile ground for an economics graduate student trying to quantify the value people assign to the of passing assets to one's kids in long-range investment planning.

Follow-up on Segregation at ASU

Racially segregated classes at ASU may or may not still exist, and the University may or may not have ended them.  How's that for a follow-up.  FIRE does some more research here, and find:

In fact, there's no reason to believe that the racial restriction on that class
hasn't existed for at least eight years. And unless ASU is a university at which
students sign up for a class directly with the professor (which would be truly
unusual), ASU's administration had to be part of the effort to enforce the
racial restriction.
So why didn't ASU tell the truth in its letter to FIRE, especially if it
was planning to abandon the racial restriction anyway (once it got caught, of
course)? Probably because its administration didn't believe that anyone would
really do the research and find out that legal segregation has flourished on its
campus for at least the last eight years. This brazenness is shocking,
especially considering that a 2002
letter
from FIRE got ASU to drop
racial restrictions
on a Navajo history class. Are there other classes with
similar restrictions just waiting to be discovered?

British Censors Rewriting... the Future?

Government censors often try to rewrite the past, but Reason's Hit and Run passes on this funny story of British attempts to rewrite the future:

Britain's Meteorological Office has instructed forecasters to describe the
country's damp, dismal, seasonal-affect-disorder-inducing, godawful weather in
Bob Rossian terms:

Prolonged sunshine is expected under new "positive" forecast
guidelines issued by the Meteorological Office...

There is no need to dwell on a "small chance of showers" when "mainly dry"
tells a better story. If there are "localised storms" then it must be "dry for
most". Clouds over Manchester mean generally clear visibility for motorway
drivers

I don't know what the Brits are complaining about in a forecast such as "small chance of showers".  In the States, the same forecast would be communicated as "huge, civilization ending storm approaching - details at 11".  When I lived in St. Louis, I remember that the local news successfully predicted 11 of the last 3 snowstorms.

Update:  I appears that the media has also been reporting 11 of the last 3 murders:

Five weeks after Hurricane Katrina laid waste to New Orleans, some local, state
and federal officials have come to believe that exaggerations of mayhem by
officials and rumors repeated uncritically in the news media helped slow the
response to the disaster and tarnish the image of many of its
victims.

Claims of widespread looting, gunfire directed at helicopters and
rescuers, homicides, and rapes, including those of "babies" at the Louisiana
Superdome, frequently turned out to be overblown, if not completely untrue,
officials now say.

The sensational accounts delayed rescue and evacuation efforts already hampered
by poor planning and a lack of coordination among local, state and federal
agencies. People rushing to the Gulf Coast to fly rescue helicopters or to
distribute food, water and other aid steeled themselves for battle. In
communities near and far, the seeds were planted that the victims of Katrina
should be kept away, or at least handled with extreme caution.

I had my own commentary about media malpractice here.

My Urban Plan for New Orleans

Cafe Hayek points out that Rep. Earl Blumenauer wants to make sure that New Orleans is rebuilt with a strong urban planning vision.  Since Mr. Blumenauer represents Portland, Oregon, the city beloved of planners that has been planned into having some of the highest priced housing and worst traffic of any city of its size in America, I presume he wants something similar for New Orleans (Portland was also the city that thought it had solved global warming).

Here is my urban plan for New Orleans:  Every person who owns property can build whatever the hell they want on it.  If other people want something else built on that property, and value this outcome enough, they can buy the property from its owner.  This novel concept is called "private property rights" and falls under the broader category of what are called "constitutionally protected individual rights" or even more broadly, "freedom".  It is a concept that used to be taken for granted in this country and but now is seldom even taught in schools. 

For the property owned by the government, well, they are going to build whatever dumbshit thing they want to on it anyway, so I'll just root for their choice to be fairly inexpensive.  We here in Phoenix built a half-billion dollar stadium for the for-god-sakes Arizona Cardinals that is used for its core purpose 3 hours a day for 8 days a year.  It couldn't be worse, could it?

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Kelo Update

After the Supreme Court's Kelo decision that effectively increases the power of local authorities to take whatever poperty they want and hand it over the private developers, a number of outraged politicians began reform efforts to limit takings in their state to true common-carrier public projects.  So what has happened to these efforts?  Virginia Postrel links to this update on California, but I will give you a hint:  They have had about the same level of success that every other effort to limit government power has had of late.

Predictably, local government and redevelopment officials reacted with alarm
that eminent domain could be severely restricted. The California Redevelopment
Association and other advocates geared up to kill the measures and in the
closing days of the legislative session, Democratic leaders ginned up a strategy
to cool off the anti-eminent domain fervor. They unveiled legislation that would
place a two-year moratorium on the seizure of private homes (but not commercial
property), and authorize a study of the practice, thus giving their members a
chance, or so it seemed, to side with the anti-eminent domain sentiment without
doing any real damage to redevelopment agencies.

Quietly, however, the moratorium bills were themselves put on the shelf as
the session ended - with Democrats blaming Republicans. "With every vote, they
tried to derail this prudent response," said Sen. Christine Kehoe, D-San Diego,
who carried one of the moratorium bills.

Kehoe's finger-pointing, however, was more than a little disingenuous since
the stalled bills required only simple majority votes and thus needed no
Republicans to go along. Clearly, this was a Democratic action, not a Republican
one, perhaps just a feint to pretend to do something about eminent domain
without actually doing anything to upset the apple cart.

She also points to this story in San Diego:

First came a report on the San Diego Model School Development Agency's push to
seize and demolish 188 homes in the thriving City Heights neighborhood to build
up to 509 town houses, condos and apartments more to its liking. The 30-acre
site is far from the decaying neighborhood normally targeted in redevelopment,
but blithe agency bureaucrats from the Soviet school of central
planning--knowing they could call the area "blighted" if they chose--didn't
care.

Then came yesterday's jaw-dropping story about National City's plan to use
its powers of eminent domain to force the Daily family to sell a parcel the
family leases to the Mossy family for one of its thriving car dealerships. After
the two sides couldn't agree on a sales price, Mossy representatives made plain
they would move their Nissan dealership--and the $1 million in annual sales and
property taxes it generates for National City--unless the city helped close the
deal. The City Council promptly caved in to Mossy's unsavory hardball tactics
and, in its role as the city redevelopment board, began looking into seizing the
land--after a mysterious epiphany in which members suddenly realized the site
suffered from a heretofore undetected case of "visual blight."

Yep, there's nothing like another large car dealership to fight visual blight.  Maybe San Diego should tear down the Del Coronado hotel and put a car dealership there too.

 

Top Down vs. Bottom Up

Government bureaucrats tend to resist bottom-up solutions to problems -- after all,their jobs depend on the primacy of central planning and solving problems top-down.  It is interesting to read this email posted at Vodka Pundit in this light:

Fed is dropping the ball on basic necessities such as water, portolets, you
name it. Woefully unprepared and nobody seems to be in charge or have the
gumption to get it done.

Louisiana politicians should be absolutely raising hell right now. Lots of
people including yours truly have volunteered to bring (including food,
generators, food, etc., to be self sufficient for a week or so) the most
important thing which is a boat but have been told NO under no uncertain terms.
"My" town is under water, people are in critical condition, and I have skill
sets and assets - including a boat which will come out of the hole in 14 incles
of water - and we are being denied the opportunity to help. And quite frankly,
that REALLY PISSES ME OFF.

Military is stepping up and bringing considerable skills and assets to the
table. Had they been listened to earlier, lots of logistical issues would have
been resolved. IOW's, the bureaucrats are getting moved to the sidelines but
"turf issues" are not going quietly into the night.

You can see the bureaucratic mindset at work hear:  An emphasis on being in control vs. solving the damn problem.  Don't want a lot of citizens running around on their own bringing in supplies of helping people, do we?

If we are going to insist on a 100% top-down approach, then its good the military is coming in to take over.   Only the military has the large-scale logistical experience and resources to take-on something of this scope top-down  (and even they have struggled with what may be a smaller rebuilding task in Iraq).  The US military did more good than any single organization during the Asian Tsunami, so I hope for the same here.  I would hope there are a few aircraft carriers heading to the area.

Postscript:  I know everyone is having fun blaming the feds, but what about the locals here?  If my town was below sea level with only a single dike between me and being 30 feet under a lake, I might insist that my local politicians have a contingency plan for breaches.  I have wondered why a few ships couldn't have been scuttled in the breach early in the crisis.

Update:  Much more on top-down vs. bottom-up response to Katrina here.

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