Posts tagged ‘priorities’

One Weird Trick That Will Sell Your Tax Increase to the Public

Here is the trick:  You want a tax increase for X.  The public is never going to approve of raising taxes for X.  So you bundle 95% X with 5% Y, Y being something the public is really excited about.  As much as possible, you never mention X in any discussion of the tax increase, despite most of the funds being dedicated to X, and instead focus solely on Y.   If history is any guide, you will get your tax increase.

What a specific example?  You want a tax increase to fund a huge public transit boondoggle.  The public is not buying it.  So you rebrand the public transit project as a "transportation bill", you throw in a few highway improvements, you talk mainly about the highway improvements, and you get your public transit bill.

Another example is general revenue increases.  Most of these tax increases go to increasing the salary and pensions of bureaucrats and senior administrators that aren't really doing anything the public wants done in the first place.  So you say the tax increase is to improve the pay of three (and only these three) categories of workers:  police, firefighters, and teachers.  The public likes what these folks do, and could mostly care less about what anyone else in local government does.   So even if the taxes help about just 3 teachers among 3000 other bureaucrats, you sell it as a teacher salary increase.

It is because I understand this one weird trick that this sort of story does not surprise me in the least:

'Yikes!': Some Arizona teachers see little from Prop. 123

For months leading up to the vote on Proposition 123, supporters of the public education funding measure pleaded for its passage, saying it represented money for teachers.

But as the first installment of cash has gone out, many teachers may find Prop. 123 is a smaller windfall than they hoped. And voters may be surprised to learn where some of the money is going.

In some cases, teachers will collect less than 20 percent of their district's Prop. 123 funds. Some districts will use most of their money for other purposes, ranging from textbooks to computers to school buses, according to an Arizona Republicsurvey of district spending plans.

The measure was sold as a way to direct money — significant money — to teachers and classrooms....

With no rules on how the money can be used, each school district has tried to address its own priorities. While many supporters of the measure invoked teachers as the main reason to vote for Prop. 123, others in the public school systems have staked a claim to the money, especially after many went years without raises beginning in the recession.

Those seeing raises include relatively low-paid secretaries, custodians and bus drivers. But it also includes superintendents, principals and mid-level administrators who don’t work in classrooms.

That may not sit well with voters who opposed the measure or with supporters who thought they were doing something more substantive for teachers.



Matt Yglesias Summarizes the Public Parks Opportunity in One Paragraph

A two-fer!  This is from Yglesias's very good article on passenger rail also quoted in the previous post.  In discussing why Amtrak is generally uninterested in making incremental improvements on the Northeast Corridor, he writes:

The way Amtrak is currently set up, there's no real incentive to undertake incremental improvements. The Northeast Corridor already generates an operating profit, which simply defrays losses elsewhere in the system. Making it run better doesn't generate any wins for the people who would have to do the work, and would plausibly just lead Congress to reduce subsidies. If the NEC were spun off as an independent entity — perhaps even a private company — then it could internalize the gains from improved service and seek private financing to make cost-effective investments.

Long-time readers will know that my company privatizes the operation (but not the ownership) of public parks.  I will make two-hour presentations to parks agencies about how we can improve operations quality while cutting costs by 30-50% or more, and the near-universal response is, "well, if you reduce costs, then the legislature will just reduce our appropriations."  More efficient park operations, and at the margin better visitor service, don't create any wins for agency employees given their incentives.  In fact, if the parks are improved and more people show up, their job is just harder.  I had the manager of Arizona's premier state park tell me, absolutely in all seriousness, that he had the best job in the world if it wasn't for all the visitors.  Can you imagine a McDonald's franchise manager saying that?   As I have always said, government is not populated with bad people, it is populated with perfectly normal people who have terrible incentives.

When agencies choose how to spend incremental funds, they will almost always try to route these to the agency staff, in the form of more headcount and/or more pay.  When money is actually spent to make investments in the parks themselves, projects are chosen not by return on investment or customer priorities, but based on which ones will create the most prestige for the agency and its leaders.  This latter is one reason the Washington Metro is the mess it is, as the agency and the politicians who make appropriations will always prioritize system expansions over capital maintenance and sensible incremental improvements.

Utter Madness: Phoenix Has The Cheapest Water in the Country

The Arizona Republic reports that the Arizona Department of Water Resources has set six priorities for managing expected water shortages in the future.  The six are listed in one of those annoying click-bait page-flipping things, so I will summarize them below:

  1. Resolve water disputes
  2. Pursue reclaimed water
  3. Expand monitoring (of the public's water use)
  4. Look at water transfers (between communities)
  5. Go for desalinization
  6. Find funding (for large scale projects)

What is missing here?  Well I will give you a hint.  This article was on the very same page (at least online) of the newspaper -- Phoenix has the cheapest water in the country!

If you live in Phoenix, you’re probably paying one of the cheapest annual water bills in the country, even with the rate increase that took effect this month, according to a recent national report on public water systems.

The February report by Food & Water Watch said the lead-tainted water supply in Flint, Michigan, was the most expensive in the country, with customers there paying $910.05 a year. It said Phoenix residents paid just $84.24 a year, then the lowest rate in the nation.

A city water department official said the rates could be a little misleading – rates jump for heavy users, one factor that has helped Phoenix keep water use down even as the number of water users has risen sharply.

But even after the 3 percent increase that took effect March 1, analysts say Phoenix rates are probably still among the lowest, if not the lowest, in the country for residential customers who don’t use large amounts of water in a month.

This is absurd.  Why does the state agency need to go around spying on private water use and begging for funding when price is such an obvious lever to match supply and demand.  Raise the freaking prices!  Are we drawing from lakes and groundwater faster than they can replenish themselves?  Raise the dang price until demand falls to a sustainable level.  As an extra bonus, this would help solve the funding problem, and have it solved by water users themselves rather than taxpayers.

By the way, I ask these questions but I actually know the answers -- government officials don't want to take the heat when the prices rise.  They want to pander to the public and hand them populist goodies like cheap water, and then manage the inevitable water crisis with authoritarian actions like rationing and surveillance that increase their personal power.

And congrats to our newspaper:  It has article after article, day after day, listing all the dire water shortages that face the area, and then they write this article with nary a mention that having the country's lowest water rates might be related.

Asset Forfeiture Fraud and Abuse

Arizona has one of the worst asset forfeiture laws in the country, essentially allowing law enforcement to help themselves to any money or real property that takes their fancy, and then spend it on anything they like.   For example, one AZ sheriff is spending the asset forfeiture stolen money** on buffing up his image by providing scholarships, even though such scholarships sure seem to be specifically prohibited as a use for the money.  You can think of this as pure PR - give 1% of the stolen money to some worthy cause so no one will question what you do with the other 99%, or more importantly question why they hell you had the right to take it without due process in the first place.

The Cochise County Sheriff's Office is providing nine high school students with college scholarships financed by money and assets seized from people suspected of illegal activity.

The $9,000 for scholarships is paid from the county's anti-racketeering revolving fund. State law specifies that cash in this account is to be used for things like gang and substance-abuse prevention programs and law enforcement equipment.

So, how do the scholarships fit the bill?

Though federal law appears to prohibit such a use of the money, Cochise County says the spending is permissible because it plays a role in substance-abuse prevention....

[The IJ's Paul] Avelar agreed.

The categories that specify how the money should be spent are "incredibly broad," allowing for a gamut of expenditures, he said.

"It's very loosey-goosey on what they spend it on," Avelar said. "They have the ability spend it on a lot of things that we might not think are wise expenditures of public money."

But McIntyre said that it's essential that counties retain broad spending power over this money, because "local elected officials are in a much better position to determine what priorities need to be addressed than people outside of the county."

"And additionally, the reality is that if the local voting populous doesn't agree with the use of those funds or the priorities that have been set by these decision makers, they have the ultimate remedy to vote us out," McIntyre said.

The last is a total joke.  First, most sheriff's offices refuse to provide any comprehensive reporting on their seizure and spending activities, so without transparency there can be no accountability.  And second, this is a classic redistribution scheme that always seems to get votes in a democracy.  Law enforcement steals this money from 1% of the citizens, and spends it in a way that seems to benefit most of the other 99%.  It is exactly the kind of corrupt policy that democracy consistently proves itself inadequate to prevent -- only a strict rule of law based on individual rights can stop this sort of abuse.

** While the forfeitures are legal under the law, that does not make them right.  The law is frequently used by one group to essentially steal from another.  Allowing police to take money at gunpoint from innocent (by any legal definition, since most have not been convicted of a crime) citizens is stealing whether it is enabled by the law or not.

Government's Systematic Indifference to Capital Maintenance

There is one thing you can almost always assume with government managed land and infrastructure -- facilities will likely have a large deferred maintenance backlog.  Two examples:

These problems are ubiquitous.  You can point to any government parks agency, and most any transit agency, and you will find the same problems.

Why?  Well, I have not studied the problem in any academic sense, but I am face-to-face with the problem every day in parks.

Let's start with the reason that is not true -- that somehow budgets can't support capital maintenance.  I know for a fact that this is not true in parks.  We operate over 100 public parks and are totally up to date with all maintenance and have no deferred maintenance backlog.  This is despite the fact that we work with only the fees paid by visitors at the gate.  Government agencies typically supplement fees at the gate with an equal amount of tax money and still don't keep up with maintenance.  So the issue may be costs or priorities, but the money is there to keep parks fixed up.  (I am willing to believe the same is not true of large transit projects, but these projects are known in advance not to be able to cover their lifecycle costs with revenues, and simply hide that fact from taxpayers until it is too late.  Thus the sales tax increase that is being requested in Phoenix to keep our new light rail running).

I think the cause lies in a couple areas related to government incentives

  1. Legislatures never want to appropriate for capital maintenance.  If the legislature somehow has, say, $100 million money it can spend on infrastructure, their incentives are to use it to build new things rather than to keep the old things in repair (e.g. to extend a rail line rather than to keep the old one fixed).
  2. If you want to understand a government agency's behavior, the best rule of thumb is to assume that they are working to maximize the headcount and the payroll budget of their agency.  I know that sounds cynical, but if you do not understand an agency's position or priorities, try applying this test:  What would the agency be doing or supporting if it were trying to maximize its payroll.  You will find this explains a lot

To understand #2, you have to understand that the pay and benefits -- and perhaps most important of all -- the prestige of an agency's leaders is set by its headcount and budgets.  Also, there are many lobbying forces that are always trying to pressure an agency, but no group is more ever-present, more ubiquitous, and more vocal than its own staff.   Also, since cutting staff is politically always the hardest thing for legislators to do, shifting more of the agency's budget to staff costs helps protect the agency against legislative budget cuts.  Non-headcount expenses are raw meat for budget cutters, and the first thing to get swept.  By the way, this is not unique to public agencies -- the same occurs in corporations.   But corporations, unlike government agencies, face the discipline of markets that places a check on this tendency.

This means that agencies are loath to pay for the outside resources (contractors and materials) that are needed for capital maintenance projects out of their regular budgets.  When given the choice of repairing a bathroom at the cost of keeping a staff person, agencies will always want to choose in favor of keeping the staff.  They assume capital maintenance can always be done later via special appropriation, but of course we saw earlier that legislators are equally unlikely to prioritize capital maintenance vs. other alternatives.

The other related problem faced is that this focus on internal staff tends to drive up pay and benefits of the agency workers.  This drives up the cost of fundamental day to day tasks (like cleaning bathrooms and mowing) and again helps to starve out longer-horizon maintenance functions.

As proof, you only have to look at the mix of agency budgets.  Many parks agencies (e.g. New Jersey state parks, which I have studied in depth) have as much as 85% of their budget go to internal staff.  My company, which does essentially the same thing (run parks) has about 32% of our budget go to staff.  State parks agencies have 50% or more of their staff in headquarters or regional offices.  In my company, 99% of the staff is in the parks.

I don't think that these incentives problems can be overcome -- they are simply too fundamental to how government works.  Which is why I spend my working hours trying to convince states to privatize the operation of their recreation facilities.

What I Hate Most About Political Discourse... when people attribute differences of opinion on policy issues to the other side "not caring."

I could cite a million examples a day but the one I will grab today is from Daniel Drezner and Kevin Drum.  They argue that people with establishment jobs just don't care about jobs for the little people.  Specifically Drum writes:

Dan Drezner points out today that in the latest poll from the Council on Foreign Relations, the opinions of foreign policy elites have converged quite a bit with the opinions of the general public. But among the top five items in the poll, there's still one big difference that sticks out like a fire alarm: ordinary people care about American jobs and elites don't. Funny how that works, isn't it?

Here are the specific poll results he sites.  Not that this is a foreign policy survey



The first thing to note is that respondents are being asked about top priorities, not what issues are important.  So it is possible, even likely, the people surveyed thought that domestic employment issues were important but not a priority for our foreign policy efforts.  Respondents would likely also have said that (say) protecting domestic free speech rights was not a foreign policy priority, but I bet they would still think that free speech was an important thing they care about.  The best analogy I can think of is if someone criticized a Phoenix mayoral candidate for not making Supreme Court Justice selection one of her top priorities.  Certainly the candidate might consider the identity of SCOTUS judges to be important, but she could reasonably argue that the Phoenix mayor doesn't have much leverage on that process and so it should not be a job-focus priority.

But the second thing to note is that there is an implied policy bias involved here.  The Left tends to take as a bedrock principle that activist and restrictive trade policy is sometimes (even often) necessary to protect American jobs.   On the other hand many folks, including me and perhaps a plurality of economists, believe that protectionist trade policy actually reduces total American employment and wealth, benefiting a few politically connected and visible industries at the expense of consumers and consumer industries (Bastiat's "unseen").  Because of the word "protecting", which pretty clearly seems to imply protectionist trade policy, many folks answering this survey who might consider employment and economic growth to be valid foreign policy priorities might still have ranked this one low because they don't agree with the protectionist / restrictionist trade theory.  Had the question said instead, say, "Improving American Economic Well-Being" my guess would be the survey results would have been higher.

Whichever the case, there is absolutely no basis for using this study to try to create yet another ad hominem attack out there in the political space.  People who disagree with you generally do not have evil motives, they likely have different assumptions about the nature of the problem and relevant policy solutions.  Treating them as bad-intentioned is the #1 tendency that drags down political discourse today.

Postscript:  This is not an isolated problem of the Left, I just happened to see this one when I was thinking about the issue.  There likely is a Conservative site out there taking the drug policy number at the bottom and blogging something like "Obama state department doesn't care about kids dying of drug overdoses."  This of course would share all the same problems as Drum's statement, attributing the survey results to bad motives rather than a sincere policy difference (e.g. those of us who understand that drugs can be destructive but see the war on drugs and drug trafficking to be even more destructive).


The Arrogance of Obama, and Obamacare

So I guess the Left has hit on its favored meme in response to the millions of insurance cancellations.  From Obama to Valerie Jarrett to any number of bloggers, the explanation is that the cancelled policies were "sub-standard".  We may have thought we liked them, but it turns out we were wrong.  Deluded in fact.

These folks -- despite not knowing my income, my net worth, my health situation, my age, my family size, my number and age of kids, my risk adversity, my degree of hypochondria, my preventative care habits, my diet, my lifestyle, my personal preferences and priorities, or any details about my insurance policy that I spend many hours analyzing and cross-comparing -- have decided they know better than I what health insurance I should want.

My plan was not substandard.  I graduated magna cum laude in engineering from Princeton and was first in my class at Harvard Business School.  I spent hours shopping for my coverage and was fully satisfied with my resulting policy.  Many of the aspects of my policy that cause Obama to call it "sub-standard" -- lack of mental health care, lack of pediatric dental care, lack of maternity care, lack of free contraception, a higher than average deductible -- were my preferences.  I got what I wanted.

More expensive, more highly featured products are not necessarily "better".  A Mercedes is not necessarily the best car choice for a middle class buyer just because it has more features than his Taurus.  Would Obama tell that person his Taurus is "sub-standard" and force him to pay for a Mercedes? If not, why the hell is doing the exact same thing but with health insurance OK?

From his speech today, via Bryan Preston

When Obama came to that section of his speech when the line usually falls, he went with a new spin. If you’ve lost your healthcare thanks to his law, he wants you to know that you were just “under-insured.” Because he says so.

“One of the things health reform was designed to do was to help not only the uninsured but also the under-insured,” he said.

“If you had one of these substandard plans before the Affordable Care Act became law, and our really liked that plan, you are able to keep it. That’s what I said when I was running for office.”

“But ever since the law was passed, if insurers decided to cancel or downgrade these substandard plans, what we said, under the law, is you have got to replace them with quality, comprehensive coverage,” he said, “because, that, too, was a central premise of the Affordable Care Act from the very beginning.”

Update:  ugh

Screen shot 2013-10-30 at 9.12.14 AM

Update #2:  Yesterday I said the time seemed right for the Left to pick a meme to explain the insurance cancellations and then give the media its marching orders.  David Firestone of the NYT has gotten the memo

The so-called cancellation letters waved around at yesterday’s hearing were simply notices that policies would have to be upgraded or changed. Some of those old policies were so full of holes that they didn’t include hospitalization, or maternity care, or coverage of other serious conditions.

Republicans were apparently furious that government would dare intrude on an insurance company’s freedom to offer a terrible product to desperate people.

“Some people like to drive a Ford, not a Ferrari,” said Marsha Blackburn of Tennessee. “And some people like to drink out of a red Solo cup, not a crystal stem. You’re taking away their choice.”

Luckily, a comprehensive and affordable insurance policy is no longer a Ferrari; it is now a basic right. In the face of absurd comments and analogies like this one, Ms. Sebelius never lost her cool in three-and-a-half hours of testimony, perhaps because she knows that once the computer problems and the bellowing die down, the country will be far better off.

So you see the talking points as the media gets their orders.  1.  All policies that were cancelled were sub-standard.  2.  People will be better off with more expensive policies, even if they are too dumb to konw it.

My policy was perfectly fine.  I was not tricked.  I am willing to bet I am at least as smart as David Firestone.  I am positive I am smarter than Barrack Obama.  And yet my policy was cancelled.

The Difference Between Private and Public Governance, Part Number Whatever

Let's suppose a Fortune 500 company went through a rancorous internal debate about strategic priorities, perhaps even resulting in proxy fights and such (think Blackberry, HP, and many other examples).  The debate and uncertainty makes investors nervous.  So when the debate has been settled, what does the CEO say?  My guess is that he or she will do everything they can to calm investors, explain that the internal debate was a sign of a healthy response to adversity, and reiterate to the markets that the company is set to be stronger than ever.  The CEO is going to do everything they can to rebuild confidence and downplay the effects of the internal debate.

Here is President Obama today, talking about the budget battle

“Probably nothing has done more damage to America’s credibility in the world than the spectacle we’ve seen these past few weeks,” the president said in an impassioned White House appearance.

Good God, its like he's urging a sell order on his own stock.   I was early in observing the Republican strategy was stupid and doomed to failure, but you have to show a little statesmanship as President.


Standard & Poor’s estimated the shutdown has taken $24 billion out of the economy.

If this is true, this number is trivial.  0.15% of GDP (and this from someone hurt more than most) loss from a government shutdown about 4.4% of the year (16/365)

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

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



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

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

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

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

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

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

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

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

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

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

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

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

Prices and Sustainability

I had a discussion with a locavore-type person in Boulder, Colorado last week at their farmers market.    He told me that while his costs to grow his produce were higher than the stuff I might find in Safeway, his products were more sustainable.

I asked him how that could be.  I observed that in a well functioning market, the costs of his inputs should reflect their relative scarcity and the scarcity of the resources that went into them.   Over time, particularly in a commodity market, prices were a sort of amazing scarcity integral.  If his costs were higher, that should mean he is using more or scarcer resources.  Isn't that the opposite of sustainability?

In fact, prices are such an amazing, almost magical, gauge of an item's resource intensity that it should tell us something that folks who purport to care about sustainability tend to have a disdain and distrust for markets and prices.   Sure, I understand certain externalities (CO2, for example, if you accept it as one) are not necessarily priced in, but the mistrust of prices seems to go beyond this.

In this particular case, his argument was the food was local and so used a lot less resources in transportation, and organic, so used less fertilizer and other chemicals.  But this is simply tipping the scales, trying to apply new weights and priorities to certain inputs that simply don't obtain in the real world.  The locavore focus on transportation costs is amazing, as it focuses on just one narrow cost and energy input for food, ignoring the energy of production and the energy to deliver other inputs to the local farm.  Take our situation in Phoenix -- sure, a local farmer used less energy to truck the finished food to market, but how much energy and other resources were used to move the water to grow it hundreds of miles to our desert here?  Or what about land use -- organic local farming may save trucking and chemicals, but what if the yields per acre are a third of what one might get on the best soils in a another part of the country?  Prices take into account the scarcity of not just tranportation fuel but land and labor as well.  Sustainability advocates often want to put their thumb on the scales and overweight just one resource.  That is why, for example, in the name of CO2 reduction we are clearing tons of virgin land, including land in the Amazon, to farm biofuel products.

Totally Awesome

These are totally awesome.  What we might get if we had a real major party based on liberty rather than two parties debating slightly different priorities for government coercion.  Via JD Tuccille

gay-rights-and-gun-rights-post   gay-rights-and-gun-rights-post-1

Sequester Madness 2

This just came in over the transom via email.

WASHINGTON, D.C.///February 20, 2013///Sequestration will cut visitor access to the rim of the Grand Canyon, significantly delay the spring opening of key portions of Yellowstone and Yosemite, reduce emergency response help for drivers in the Great Smoky Mountains, limit access to the beach at the Cape Cod National Seashore, and impair the experiences in many other ways for millions of visitors at America’s national parks.   In addition, local, regional and state economies that depend on national parks will take huge hits as visitors are either turned away or skip visits due to the impact of the mindless sequestration budget cuts.....

CNPSR Spokesperson, Joan Anzelmo, former Superintendent of Colorado National Monument said:  “Congress might just as well put a big “Keep Out !” sign at the entrance to Yellowstone, Grand Canyon, Yosemite, the Cape Cod Seashore, and every other iconic national park in the U.S.   This foolhardy path tarnishes America’s ‘crown jewels’ and is a repudiation of the nation’s national parks often touted as ‘America’s best idea’.  Millions of Americans depend on national parks for their vacations and livelihood.  Those Americans are being told that national parks don’t count … that people who use national parks don’t count … and that people who live and work near national parks don’t count.”

A few observations:

  • It's a 5% freaking cut.  I bet Wal-Mart is a more tightly-run organization than the NPS, and I further bet if I forced an immediate 5% cut at Wal-Mart they would do it without cutting store hours or service to customers.
  • Again, we see government officials cutting the most cherished, visible services, rather than the chaff, in order to maximize citizen outrage rather than do their freaking job and set priorities
  • It's a freaking 5% cut.  Did I say that already?
  • I could cut huge chunks from the NPS budget while improving service by having private companies perform many operating functions.  Our company runs nearly 175 parks and in every one we have seen something like a 50% reduction in cost over government operation while simultaneously increasing staffing in the parks.
  • This is absolutely boilerplate from every single agency and constituency that gets threatened with even the tiniest budget cut -- "you are telling XXX group they don't count."  Barf.
  • I was going to make some observations about their budget over the last few years, but all their budget detail pages online seem to be down

I am currently as depressed and cynical as I have ever been today due to this absurd reaction to a trivial spending cut.  I have about zero hope that Federal spending will ever be reigned in.  Politicians of both parties and the special interests that support them will spend and spend until we find ourselves calling Greece asking for a bailout.

The Forgotten Dead

I was thinking today, what must the families of the 11 people killed on the Deepwater Horizon be thinking?  Their losses are never mentioned in any news reports I see.  Its all about getting oil on the ducks.

Sure, I am pissed off about the enormous damage to the Gulf Coast as well.  But I got to thinking, were I the engineer that made the wrong risk/safety decisions here, what would I feel most guilty about?  I was put in that position for years in a refinery, constantly asked, "is this safe" or "can we keep running" or "do we need to shut down" or "is that vibration a problem?"  These are difficult, because in the real-world of engineering, things are not ever perfectly safe.  But never-the-less, if I had made the wrong call here, I think I would be feeling a lot worse about the 11 dead people than a number of dead fish and birds.  Perhaps my priorities are out of whack with the times.

By the way, TJIC has a great post on risk and cost in the real world of engineering.  I agree with his thoughts 100% from my experience as a troubleshooter / engineer in the field making just these decisions.

Look, we all trade off safety in order to save time and expense.

Do you put on your seat belt when moving your car from one point in the driveway to another?

Do you buy the car that costs twice as much, because it's got a 1% increase in crash survivability?

Did you pay $40k to get industrial fire sprinklers installed in your house?

Do you have a home defibrillation machine?

There is nothing wrong, in the abstract, with trading off safety in order to save time and expense.

The question is whether BP did this to a level that constitutes "gross negligence".

Paging Frédéric Bastiat

The US Forest Service is using a million dollars of its stimulus money to ... fix broken windows! How appropriate.  But these are not any broken windows -- these are energy inefficient windows for a visitor center that was closed two years ago and for which no budget exists now or in the future to reopen.   Beyond the nuttiness of building a multi-million dollar visitor center, then closing it only a few years after it was built, and then spending a million dollars on its abandoned carcass, no one was available to explain how energy efficient windows will save money in a building that shouldn't be using any energy any more.  Remember, for this spending to truly be stimulative, the money has to be spent more productively than it would have been in whatever private hands it was in before the government took it.

But even forget the stimulus question and just consider the issue of resource allocation.   I work on or near US Forest Service lands in many parts of the country, and know that their infrastructure is falling apart.  Congress loves to appropriate money for new facilities (like shiny new visitor centers), but never wants to appropriate money for capital maintenance and replacements of existing facilities.  So there are plenty of needs for an injection of $274 million in capital improvement money.  And I know that the USFS has had teams of people working for 6 months on their highest priorities.  And after all that work, they allocated  almost a half percent of their funds on upgrading windows in an abandoned building?

Postscript: I have vowed not to write about the US Forest Service because I interact with them so much and such interactions would not be improved by my dissing on them online [I am in the business of privitizing the mangement of public recreation and am constantly working to convince the USFS and other recreation providers to entrust more to private companies.  One thing many people don't know -- the USFS is by far the largest public recreation provider in the world, far larger than the National Park Service or the largest state park systems].  However, I feel on safe ground here, as I think virtually every frontline USFS employee I know would agree with this post and be equally angry.  In recreation at least, this is an organization that begs and pleads to get a few table scraps left over after the National Park Service is done eating, and it is crazy that they spend the few scraps they get this poorly.

Classic Obama Plan: Give Them Taxpayer Money, But Not Liberty

With gays upset that Obama has aligned himself squarely behind DOMA and Don't-ask-don't-tell in the military, he has decided to pay them off rather than address their equal treatment questions:

President Barack Obama, whose gay and lesbian supporters have grown frustrated with his slow movement on their priorities, is extending benefits to same-sex partners of federal employees but stopping short of a guarantee of full health insurance, a White House official said.

The health insurance exception is particularly funny given Obama's current universal-coverage-driven health care proposals.

Priorities and the Precautionary Principle

Indur Goklany (pdf) has deconstructed the IPCC climate forecasts and models and finds something interesting -- for all the forecasts of catastrophe, it is hard to find it in the actual IPCC numbers  (vs. off-the-cuff statements by folks like Al Gore).

First, one needs to understand the basis for the various scenarios crafted by the IPCC.  I will leave some out, and focus on Goklany's analysis of just two - the IPCC A1F1 and B1 scenarios.  (the charts below have been edited to simplify them to just these two scenarios)


One can think of A1F1 being close to a "do nothing" scenario on CO2, what is often called a Richer but Warmer scenario.  The B1 scenario represents fairly large interventions in Co2 use and investments in energy technologies, with lower CO2 concentrations and as a result lower but still positive GDP growth  (it takes only a small change in GDP growth to result in large changes in GDP 80 years hence -- the miracle of compounding).  This is the cooler but poorer scenario.  I know the Left has a fantasy that climate legislation is somehow an economic engine, but most economists on this reality plane achnowlege a tradeoff between CO2 intervention and economic growth.

Goklany collates the impact on mortality from these two scenarios in the IPCC report:


Note that I am not even bothering to quibble with the IPCC numbers, which I could.  I have written plenty that these temperature increase forecasts are based on assumptions of positive feedback in the climate that make little sense.  Further, it makes little sense that the poorer and less advanced world in B1 would have lower base mortality than the richer, more advanced world.

Nevertheless, we can make three observations:

  • The difference in mortality from "do nothing" to "strong intervention" is small, and I would suspect hardly statistically significant
  • The improvement in mortality from advancing technology and wealth from the 1990 baseline dwarfs the effects of climate change
  • The mortality improvements from massive focus on climate change are trivial compared to those that could be achieved with much less expensive focus on other issues.

Hat tip to Watts Up With That, who has more here in a guest essay by Goklany.

Prices vs. Government Action

Very often on this blog I criticize some ill-conceived government intervention as being bloated and/or ineffective and ill-conceived.  A great example is corn-ethanol, where the government has spent billions and caused consumers to spend additional billions in higher food and gas prices, all for a technology that does nothing to reduce oil consumption or CO2 output.

Too often, I criticize these programs for being stupid and ill-conceived, which they are.  But what I don't take the time to also point out is the necessarily narrow focus of these government actions.  No matter how hard Congress works to stuff energy and farm bills with every micro-managing pork barrel project their campaign donors could wish for, Congress still only has the bandwidth to affect a tiny fraction of a percent of what a single change in market prices can achieve.  Prices have absolutely stunning power of communication.  When gas prices go up, every single citizen likely reassesses his/her behavior and spending in a myriad of ways.  Thousands of entrepreneurs sit at their desk staring at the walls, trying to dream up business opportunities that these new prices may signal.  And thousands of energy producers, from the tiniest to the largest, rethink their investment plans and priorities. 

Is the Global Warming Hysteria Killing Environmentalism?

Of late, I have been getting the strongest sense that the global warming hysteria is sucking all the oxygen out of the rest of the environmental movement.  Quick, what is the last environment-related article you read that didn't mention global warming?

Here is an example:  I give a lot of my charity money to groups like The Nature Conservancy, because I personally value preservation of unique areas and habitats and I don't sit around waiting for the government to do it for me.  But it has become almost impossible of late to drum up enthusiasm from contributors for such causes, unless the land can be labeled a carbon-sink or something.  In fact, the global warming hysteria has really been a disaster for private land conservation because it has caused politicians to subsidize ethanol.  This subsidy is bringing much more wild land into cultivation in this country and has been the single biggest driver for deforestation in the Amazon over the last decade. 

Or take China.  China's cities are an unhealthy mess.  But focus on global warming has led environmentalists to take the position with China they have to stop coal combustion and growth in auto-miles entirely.  This is a non-starter.  There is no WAY they are going to do this.  But it is much more achievable to start getting China focused on a Clean-Air-Act type of attack on vehicle and coal plant emissions of real pollutants like SO2.   China could be made much more healthy, as the US has done over the last 30-60 years, but instead of working with China to get healthier, the focus is on getting them to shut down their growth altogether.

The UPI published a survey of people's environmental priorities:

  1. drinking water
  2. pollution of rivers, lakes, and ecosystems
  3. smog
  4. forest preservation
  5. acid rain
  6. tropical rain forests
  7. national parks
  8. greenhouse emissions
  9. ozone layer
  10. nature around "my" home
  11. urban sprawl
  12. extinction.

I feel like #1 is overblown based on a lot of media scare stories, but most of the top 6 or 7 would all be things I would rank well above global warming fears as well.  There are still real issues to be dealt with in these areas which can have far more of a positive impact on health and quality of living than CO2 abatement, but they are being suffocated by global warming hype.

You Can't Make Decisions for Yourself

A frequent topic of this blog is to point out situations where technocrats translate their distrust for individual decision-making into the justification for government control

Kevin Drum provides me with one of the best examples I have seen of late of this phenomena of using distrust of individual decision-making to justify government intervention, in part because he is so honest and up-front about it.  I usually try not to quote another blogger's posts in total, because I want to give folks an incentive to go visit the site, but in this case I need to show the whole thing (the extensive comments are still worth a visit):

If we treat healthcare like any other market, allowing consumers
free rein to purchase the services they like best, will it produce high
quality results? A recent study suggests not:

from the Rand Corp. think tank, the University of California at Los
Angeles and the federal Department of Veterans Affairs asked 236
elderly patients at two big managed-care plans, one in the Southwest
and the other in the Northeast, to rate the medical care they were
getting. The average score was high "” about 8.9 on a scale from zero to

....In the second part of their study, the medical researchers
systematically examined 13 months of medical records to gauge the
quality of care the same elderly patients had received....The average
score wasn't as impressive as those in the patient-satisfaction
surveys: 5.5 on a 10-point scale. But here's the interesting part:
Those patients who graded the quality of their care as 10 weren't any
more likely to be getting high-quality care than those who gave it a
grade of 5. The most-satisfied patients didn't get better medical care
than the least-satisfied.

Surprise! Patients are
poor judges of whether they're getting good care. And if consumer
preferences don't map to high quality care, then a free market in
healthcare won't necessarily produce better results or higher
efficiency, as it does in most markets.

Back to the drawing board. Perhaps a national healthcare system
would be a better bet to reduce costs, cover more people, provide
patients with more flexibility, and produce superior outcomes. After
all, why are we satisfied with allowing the French to have a better
healthcare system than ours even though we're half again richer than

There is it, in black and white:  Most of you individual slobs out there cannot be trusted to make good health care decisions for yourselves, so the government should do it for you.  (And by the way, who the hell thinks the French have a better health care system, but that's off-topic for today).

Here is the false premise:  If the intellectuals who ran the study judged that the individuals involved were getting poor care when the individuals themselves thought is was good care, this does not necessarily mean the individuals being studied were wrong.  It may very well mean they have different criteria for judging health care quality and value.  In fact, what goes unquestioned here, and I guess the reader is supposed to swallow, is that there is some sort of Platonic ideal of "high-quality care" that the people who run this study have access to.

But this is ridiculous.   Does high-quality mean fast?  painless?  private?  successful?  pleasant? convenient?  I, for example, have all the patience of an 8-year-old who just ate three pieces of birthday cake washed down by two Cokes.  I need stuff now, now, now.  I hate gourmet restaurants where meals take 3 hours.  Many gourmands, on the other hand, would probably shoot themselves before eating some of the food I eat.  We have different standards.

Let's take an example from another industry:  Cars.  Every year, the "experts" at Consumer Reports and Car and Driver try out all the new cars and publish the two or three they think are the best.  So, does this mean that everyone who does not buy one of these cars selected by the experts as the best are making a bad decision?  Does this fact tell us the government should step in and buy their cars for them because they can't be trusted to make the right evaluations?   NO!  Of course not.  It means that the people who buy other types of cars have different criteria and priorities in judging what a "high-quality" car is.  Some want high gas mileage.  Some want a tight interior with leather.  Some want a big honkin' engine.  Some want a truck jacked way up in the air.  Some want room to carry five kids.   You get the idea.

There are at least two better explanations for the study results.  Let's first be clear what the study results were:  The study found that the patients studied graded health care differently than did the people who ran the study.  That's all it found.  This could mean that the intellectuals who ran the study and the individuals studied judged care on different dimensions and with different priorities.  Or it could mean that the individuals studied had incomplete information about their care and their choices.  Neither justifies a government takeover of the industry.  (In fact, to the latter point about information, markets that are truly allowed by the government to be free, which health care has not, often develop information sources for consumers, like the car magazines mentioned above.)

The thinking in Drum's post betrays the elitist-technocratic impulses behind a lot of the world's bad government.  Look at "progressive" causes around the world, and you will see a unifying theme of individual decisions that are not trusted, whether its a poor Chinese farmer who can't be trusted to choose the right factory work or an American worker who can't be trusted to make her own investment decisions for retirement.

Postscript:  In some past era, I might have called this one of the worst excuses for fascism I had ever heard.  Unfortunately, Brad DeLong recently took that title with his post that the government needs to take even more money from the rich because the rich are ostentatious and that hurts other people's feelings.  No really, I don't exaggerate, he said exactly that.  If somehow you have missed this one, look here.

Why do So Many Libertarians Blog?

A few weeks ago, in an interview about blogging, I was asked "why are there so many libertarian bloggers?"  My answer didn't make the final cut for the article, but I thought it was worth repeating here**:

First, I am tempted to answer with a variation of the argument that the left uses to justify why so many academics
are liberal "“ ie, that we bloggers are all smarter and therefore libertarians.  I will eschew that one though, because I think the real reason is that libertarians have never had a really good outlet for our opinions and it is a relief to have a channel to be able to express our views without distortion. 

Part of this is because there are few good organized outlets for libertarians.  In the past, libertarians could perhaps find a voice in one of the two major parties, but that tends to just end in frustration as about the 50% of what either party espouses is inconsistent with a true respect for individual liberties.  At the same time, the formal libertarian party has often been a joke, fielding some pretty bizarre candidates with some pretty niche priorities.

However, a major part of the problem is that libertarianism resists organization.  Libertarianism tends to be a big tent that attracts everything from anarcho-capitalists to Cheech-and-chong-esque hempfest organizers to Larry-Flint style pornographers.  For this reason, libertarianism defies efforts to brand it, which is a critical shortcoming since the two major political parties nowadays are much closer to brands than ideologically consistent philosophical alternatives. 

Libertarians revel in differences and being different.  Almost by definition, none of us have the same message, or even believe that we all should have the same message. Many of us are suspicious of top-down organization in and of itself.  Blogging is therefore tailor made for us "“ many diverse bottom-up messages rather than one official top-down one.

Finally, since libertarianism is really about celebrating dynamism and going in a thousand different directions as each individual chooses, in some sense the Internet and blogging are not only useful tools for us libertarians, but in and of themselves are inherently libertarian vehicles.  Certainly libertarian hero F. A. Hayek would recognize the chaos of the Internet and the blogosphere immediately.  For a good libertarian, chaos is beautiful, and certainly the blogosphere qualifies as chaotic.   The Internet today is perhaps the single most libertarian institution on the planet.  It is utterly without heirarchy, being essentially just one layer deep and a billion URL's wide.  Even those who try to impose order, such as Google, do so with no mandate beyond their utility to individual users.

When people are uncomfortable with the blog phenomenon, they tend to be the same people who are
uncomfortable with anything chaotic.  I have written several times, particularly here and here, that people across the political spectrum, from left to right, are united by an innate fear of and need to control chaos.  Conservatives don't like the chaos of themes and messages found in movies and media.  Liberals insist on a unified public education system with unified messaging rather than the chaos of school choice and home schooling.  Socialists hate the chaos and uncertainty of the job market, and long for guaranteed jobs and pensions.  Technocrats hate the chaos of the market, and seek to impose standardization.  Everyone in the established media hates blogs, which threaten to upset the comfortable order of how-we-have-always-done-things.

** Which just demonstrates another reason why we all blog- no editors!  There is a saying that a lawyer who represents himself has a fool for a client.  It may well be that we bloggers are in the process of proving a parallel adage about being our own editors.