Posts tagged ‘transparency’

Hillary Clinton and "Intent" -- Can the Rest Of Us Get A Mens Rea Defense From Prosecution?

Yesterday, the FBI said that Hillary Clinton should not be prosecuted because, though she clearly violated laws about management of confidential information, she had no "intent" to do so.  Two thoughts

  • Even if she had no intent to violate secrecy laws, she did - beyond a reasonable doubt - have intent to violate public transparency and FOIA laws.  She wanted to make it hard, or impossible, for Conservative groups to see her communications, communications that the public has the right to see.  In violating this law with full intent, she also inadvertently violated secrecy laws.  I don't consider this any different than being charged for murder when your bank robbery inadvertently led to someone's death.
  • If politicians are going to grant each other a strong mens rea (guilty mind or criminal intent) requirements for criminal prosecution, then politicians need to give this to the rest of us as well.  Every year, individuals and companies are successfully prosecuted for accidentally falling afoul of some complex and arcane Federal law.   Someone needs to ask Hillary where she stands on Federal mens rea reform.

Disney Wait Times Are Among The Most Transparent Service Numbers Anywhere

How often does Amazon fail to deliver Prime shipments in two days?  I have no idea -- I know it has happened to me sometimes, but they don't publish the metric.  What is the average wait time on the phone with the IRS?  We don't know.  What is the average wait time at a TSA checkpoint?  We don't know.

One thing we most certainly do know, and can know any time on any day, is the current wait time for any Disney ride.  I bring this up because some goofball in the Obama Administration made this absurd statement trying to justify the lack of transparency for VA wait times:

When you go to Disney, do they measure the number of hours you wait in line? Or what’s important? What’s important is, what’s your satisfaction with the experience?” McDonald said Monday during a Christian Science Monitor breakfast with reporters. “And what I would like to move to, eventually, is that kind of measure.”

Bruce McQuain rightly points out the downside of a longer wait for Space Mountain is just a tiny bit lower than the downside of waiting for heart surgery.

But I want to add that this statement is not even close to being factually correct on its face.  Here is an example of a site that has Disney ride wait times in real time, but there are dozens of apps and sites with this info because Disney makes the data public in an API most anyone can access.  (My favorite is Touring Plans, which has built a whole Disney trip planning business on top of Disney published wait time data -- as an aside, if you are a Disney fan or future visitor, you should join).

But I would go further.  I know for a fact that Disney spends a ton of time internally planning and improving ride throughput and capacity entirely with an eye to reducing wait times (and also, by the way, to making design changes that make ride waits more enjoyable with in-line activities).  They have a sophisticated operational research staff working on this all the time, and they are constantly tweaking their Fastpass system which would not even begin to work correctly if they did not understand ride wait times down to the second decimal place.  And by the way, if their management found out that some folks in their organization were fudging line wait time data, I am pretty sure the offenders would not be working there any more (as they are at the VA).

Postscript:  I am still amazed by the fail here.  Anyone who has been to Disney even once will know that all wait times are displayed all over the park on boards, and that at each ride, every few minutes a customer will get an electronic card at the beginning of the ride that precisely times their wait.   Seriously, where do they get folks like this who can blithely utter nonsense as if they know what they are talking about.  The whole premise is screwed up.  Yes, good service companies measure overall satisfaction. This is marginally useful data, but what does one do with it?  To really fix and improve the experience, one also has to measure many important bits of the experience.  Saying that one should pay attention to only one output metric and nothing else would get you laughed out of any quality course I have ever been to.

Update:  Also, I would add that there is a lot of market pressure on the wait time issue pushing Disney to improvement on lines, market pressure that does not exist on the VA (which is one reason they totally lack any accountability).  Disney has its FastPass system for helping guests manage ride waits, but both Universal and Six Flags have their own different systems (Universal has a higher level ticket you can buy that gets you preferred access to all rides, Six Flags Magic Mountain has a pager system where you tell it which ride you want to do next and they page you when your place is ready).

Gruber & Rhodes: Lying Politicians Are Old News, But Bragging About it Seems To Be An Obama Innovation

Does Ben Rhodes victory lap bragging about how he pulled the wool over the eyes of a stupid and gullible America on Iran remind anyone else of Jonathon Gruber?  Remember these famous words from Gruber?

"You can't do it political, you just literally cannot do it. Transparent financing and also transparent spending. I mean, this bill was written in a tortured way to make sure CBO did not score the mandate as taxes. If CBO scored the mandate as taxes the bill dies. Okay? So it’s written to do that," Gruber said. "In terms of risk rated subsidies, if you had a law which said that healthy people are going to pay in, you made explicit healthy people pay in and sick people get money, it would not have passed. Lack of transparency is a huge political advantage. And basically, call it the stupidity of the American voter or whatever, but basically that was really really critical to get for the thing to pass. Look, I wish Mark was right that we could make it all transparent, but I’d rather have this law than not."

Even the justification is the same -- its OK to break the law and lie about it in order to break up gridlock.  (By the way, my mother-in-law -- who tends to be a reliable gauge of mainstream Democratic thinking -- argued the same thing with me, that extra-Constitutional Presidential actions were justified if Congress did not accomplish enough.   Asked about whether she was comfortable with the same power in a Trump administration, she was less sanguine about the idea).

While political lying is old as time, it strikes me that this bragging about it is a new phenomena.  It reminds me of the end of the movie "Wag the Dog", when the Dustin Hoffman character refused to accept that no one would ever know how he manipulated the public into believing there had been a war, and wanted to publicly take the credit.  In the movie, the Administration had Hoffman's character knocked off, because it was counter-productive to reveal the secret, but I wonder if in reality Obama is secretly pleased.

Dear Republicans, Could We Get A Little Consistency?

Republicans were rightly horrified that various government agencies, including a number of state attorneys general, were harassing private entities like Exxon-Mobil and CEI over their speech about climate change.  They pointed out that even if formal charges were never brought, the intrusive and public investigatory process by powerful government actors had an inherently chilling effect on free speech.

Kudos to Republicans!  They are defending the free speech of private actors from government harassment.

Oh, wait, no they are not.

The chairman of the Senate Commerce Committee demanded on Tuesday that Facebook explain how it handles news articles in its “trending” list, responding to a report that staff members hadintentionally suppressed articles from conservative sources.

In a letter, the chairman, Senator John Thune, Republican of South Dakota, asked Facebook to describe the steps it was taking to investigate the claims and to provide any records about articles that its news curators had excluded or added. Mr. Thune also asked directly whether the curators had “in fact manipulated the content,” something Facebook denied in a statement on Monday.

“If there’s any level of subjectivity associated with it, or if, as reports have suggested that there might have been, an attempt to suppress conservative stories or keep them from trending and get other stories out there, I think it’s important for people to know that,” Mr. Thune told reporters on Tuesday. “That’s just a matter of transparency and honesty, and there shouldn’t be any attempt to mislead the American public.”

Ugh.  What does Thune want, a revival of odious equal time rules, but now applied to the Internet?  This is just stupid.

Excellent Slate Article on GMO Safety

It is a long article, covering a lot of ground, and is full of links to literature on both sides of the debate.  But its conclusions are pretty definite

I’ve spent much of the past year digging into the evidence. Here’s what I’ve learned. First, it’s true that the issue is complicated. But the deeper you dig, the more fraud you find in the case against GMOs. It’s full of errors, fallacies, misconceptions, misrepresentations, and lies. The people who tell you that Monsanto is hiding the truth are themselves hiding evidence that their own allegations about GMOs are false. They’re counting on you to feel overwhelmed by the science and to accept, as a gut presumption, their message of distrust.

Second, the central argument of the anti-GMO movement—that prudence and caution are reasons to avoid genetically engineered, or GE, food—is a sham. Activists who tell you to play it safe around GMOs take no such care in evaluating the alternatives. They denounce proteins in GE crops as toxic, even as they defend drugs, pesticides, and non-GMO crops that are loaded with the same proteins. They portray genetic engineering as chaotic and unpredictable, even when studies indicate that other crop improvement methods, including those favored by the same activists, are more disruptive to plant genomes.

Third, there are valid concerns about some aspects of GE agriculture, such as herbicides, monocultures, and patents. But none of these concerns is fundamentally about genetic engineering. Genetic engineering isn’t a thing. It’s a process that can be used in different ways to create different things. To think clearly about GMOs, you have to distinguish among the applications and focus on the substance of each case. If you’re concerned about pesticides and transparency, you need to know about the toxins to which your food has been exposed. A GMO label won’t tell you that. And it can lull you into buying a non-GMO product even when the GE alternative is safer.

This is just the management summary, the article goes into great depth on all of these.

 

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.

Yelp's Way of Caving to Corporate Pressure and Hiding Reviews While Saying They Didn't Delete Anything

Update:  This post may be unfair, as discussed here.  I am not fully convinced, though.

A few days ago I posted a negative review of Applied Underwriters, and linked to this post on my blog for much more detail.  Yelp promptly pulled the review, saying I violated their terms of service by linking to a commercial web site.  I thought that bizarre, since my blog has absolutely nothing commercial about it.   But it made more sense when I received a letter from Applied Underwriters demanding that I take down my negative Yelp review or they would sue me for libel.  I don't know for sure what happened, but I suspect that Applied Underwriters sent Yelp a similar demand and they used the link in the review as an excuse to delete it and avoid legal entanglements.

So I posted an updated review with more detail and no link.  Now, Yelp is hiding the review, along with most of the other negative reviews, behind a nearly invisible link at the bottom that says "other reviews that are not currently recommended".  Scroll down to the bottom of this page and you may see it if you have a keen eye.  It is not even clear it is a link, but if you click on it, you get all the bad reviews Yelp is hiding.

Let's dismiss all the reasons why Yelp might say they do this.  One is clarity, to reduce clutter.  But go to your favorite restaurant Yelp page.  Likely you will not see this link / hidden review phenomenon.  You will see pages and pages of reviews, far more than they would have to show if they just displayed all the reviews for Applied Underwriters.

So there must be another reason.  They say in their note there is a quality algorithm.  Anyone who has read a lot of Yelp reviews will know that if this is so, their quality algorithm is not working very hard.   They have a number of reviews that they "recommend" that are nothing more than a rant like "I will never use these guys again" while my unrecommended review includes paragraphs of detail about the service.  They say it is based on your review volume as well, but I have more Yelp review volume than several of the others who seem to pass the screen.

All of which leads me to believe that this is Yelp's purgatory where they hide reviews based on corporate pressure.  They have gotten a lot of cr*p publicly about deleting bad reviews from sponsors and from corporations that pressure them to do so.   They have a zillion self-righteous FAQ's asserting that they don't delete anything.   So imagine Applied Underwriters sends Yelp loads of threats to take down each negative review that comes up.  What do they do?  They put them in the not-recommended purgatory.  They can claim that they haven't deleted anything, but absolutely no one will ever likely see the review.  And they don't count any longer to the company's review count, so for all intents and purposes they are gone.

All of this is a guess, because it is absolutely impossible to contact Yelp about these issues.  No phone numbers.  The ones in general directories for San Francisco don't work for them.  You can't email or chat or contact their customer support in any way.  For a company in the transparency business, they avoid it like the plague.

But do you want to know what makes me doubly sure of my analysis?  Because there is no way to up-rate any of the "not recommended" reviews.  I would have thought the whole up-rating system was how they sorted reviews to present the most relevent at the top, but you can't do that with the ones they have put in purgatory.  Why?  Because these reviews are being put in purgatory not for some customer benefit but to protect corporations able to put pressure on Yelp.  Yelp doesn't want them uprated.  They are supposed to disappear.    If I had time, I would compare the number of "not recommended" reviews for corporations with powerful legal staffs like Applied Underwriters to the number for Joe's local business  (AU has 17 recommended reviews but a 28 full reviews that have been "disappeared" as unrecommended).

Arrogance of the Elite

I am pretty freaking cynical about the political process, so it takes something pretty bad to catch my attention.  This attitude by Obamacare architect Jonathon Gruber, which is likely shared by most of the Administration, simply makes me sick:

An architect of the federal healthcare law said last year that a "lack of transparency" and the "stupidity of the American voter" helped Congress approve ObamaCare.

In a clip unearthed Sunday, Massachusetts Institute of Technology Professor Jonathan Gruber appears on a panel and discusses how the reform earned enough votes to pass.

He suggested that many lawmakers and voters didn't know what was in the law or how its financing worked, and that this helped it win approval.

"Lack of transparency is a huge political advantage,” Gruber said. "And basically, call it the stupidity of the American voter or whatever, but basically that was really, really critical for the thing to pass."

Gruber made the comment while discussing how the law was "written in a tortured way" to avoid a bad score from the Congressional Budget Office. He suggested that voters would have rejected ObamaCare if the penalties for going without health insurance were interpreted as taxes, either by budget analysts or the public.

"If CBO scored the [individual] mandate as taxes, the bill dies," Gruber said.

"If you had a law that made it explicit that healthy people are going to pay in and sick people are going to get subsidies, it would not have passed," he added.

By the way, Jonathon Gruber was the one in 2012 who said over and over that the limitation of subsidies to state-run exchanges was not a drafting error, but was an intentional feature meant to give incentives to states to create exchanges.  Now that it is clear that incentive did not do its job, and a case is in front of the Supreme Court attempting to enforce the plain language of the law, Gruber is now saying that he mispoke (over and over again) in 2012 and it was a typo.  Given the fact that he has now admitted he would gladly lie (and has) to the public to defend Obamacare, how much should we believe his current claims?

Not Sure That Word Means What You Think It Means

While I share this individual's frustration with the Obama Administration's lack of transparency, I am not sure this phrasing quite works

“There is no precedent for President Obama’s Nixonian assertion of executive privilege over these ordinary government agency records,” said Judicial Watch President Tom Fitton in a written statement.

If the assertion is "Nixonian", doesn't that imply that there is indeed a precedent?  Otherwise how would the practice be named after someone else?

PS- since we were on the subject of grammar and editing yesterday, I will say that yes, I know the comma after "Nixonian" above is supposed to be inside the quotes.  But as an engineer and former programmer, this rule is entirely illogical.   It's like writing 3+(x+y*)7 instead of 3+(x+y)*7.   I do it the way that makes logical sense.

Missing the Forest for the Trees

I can understand the man bites dog appeal of a story about the press turning on Obama.  But seriously, their biggest problem with this President's transparency is that he does not allow enough pictures of himself?

It Turns Out That Democrats Were Responsible for the Watergate Coverup

The Washington Post has a very good article on failures of Obamacare exchange implementation.  The Left is finding the article to be convincing evidence that the failures were all ... wait for it .. the Republican's fault.

Every single failure, save one, in the article (we'll come back to that one in a minute) was due to the Administration's fear of Republican criticism.  So results were hidden, bad decisions were made, and key steps were delayed until after the last election.  All because the Obama Administration appears to incredibly thin-skinned about criticism.

But blaming these decisions on Republicans and other Obamacare opponents is absurd.  One could easily say that the bad decisions made by the Nixon administration to cover up Watergate and other campaign shenanigans were driven by a fear of political reprisals by Democrats, but no one would be crazy enough to blame the Democrats for them.  It reminds me of the folks who wanted to blame failures in the Vietnam war on the anti-war movement.  But that is exactly what is going on here, and the amazing thing is just how many people seem willing to enable and support this incredible evasion.

The one other example that Republicans are supposedly to blame is latched onto by Kevin Drum, among others, quite eagerly.  Apparently, the PPACA legislation, which was written entirely by Democrats and passed without a single Republican vote, failed to actually provide financing for an enormous new organization to build and run the exchanges.  And, amazingly enough, Republicans refused to fix the Democrat's problem with the Democrat-written legislation in a law they hated and wanted repealed.  So the Obama Administration had to build the exchanges within the existing CMS organization, which botched the implementation.  And for THAT, apparently Republicans are to blame for it all.

Of course, beyond the just bizarre "buck stops anywhere but here" mentality, there are other problems with this logic.  First, it is hard to believe that a brand new greenfield organization run entirely by Obama's policy folks and completely without any systems experience would have done better than an organization that at least has some health care systems experience.  Further, would the schedule really have been aided by having to start an entirely new organization from scratch?  Finally, it is clear from the article that a large part of the reason for moving the work to CMS was not just money but a desire to avoid transparency, to bury and hide the work.  Even had the financing mistake** not been made, one gets the sense that Obama might have buried the effort inside CMS anyway.

In fact, this is the overriding theme from the entire article.  Every decision made for the Obamacare implementation seemed to be driven by political expediency first, avoiding transparency and accountability second, and actual results last.  It is well worth reading yourself to see what conclusions you draw.

 

** I am not entirely convinced it was a mistake.  Remember, the Democrats were scrambling to make the PPACA seem budget neutral.  They might easily have left out key bits of financing they know they needed, thinking they could hide the appropriation later.   A plan that died when Scott Brown was unexpectedly elected.

 

Total Fecklessness

If a city government cannot bring itself to end something so obviously abusive as pension spiking, what hope is there of any real reforms on tougher matters?  Government employees are increasingly running government in their own favor.

After nearly three hours of contentious debate, Phoenix city leaders were so divided over how to tackle pension “spiking” on Tuesday that they ended up doing nothing at all.

They walked into the City Council chambers prepared to make changes, but after splintering into three ideological factions, voted 5-4 against a plan to combat spiking, generally seen as the artificial inflation of a city employee’s income to boost his or her retirement benefit.

Several high-profile cases have come to light, pushing the effort to eliminate pension boosting to the forefront of the council’s agenda.

Former Phoenix City Manager David Cavazos, who retired last week to lead another city, was able to apply unused sick pay and other perks to spike his pension to an estimated $235,863, the second-largest retirement benefit in city history.

Earlier this month, a subcommittee of council members proposed modest reforms that they said would reduce pension spiking and provide transparency. They said the plan treated existing employees fairly and avoided potential litigation.

But the proposal fell apart Tuesday night, when a group of liberal-leaning council members joined the body’s fiscal conservatives in voting against it, though their rationales were vastly different.

After the motion to approve the proposal failed, the meeting ended. The result, greeted by cheers from employee unions in the crowd

This is a Scandal??

How is this a scandal?

While fans can also purchase pink [NFL Branded] clothing and accessories to support the cause, a shockingly small amount of the fans' money is actually going towards cancer research.

According to data obtained from the NFL by Darren Rovell of ESPN, the NFL "takes a 25% royalty from the wholesale price (1/2 retail), donates 90% of royalty to American Cancer Society."

In other words, for every $100 in pink merchandise sold, $12.50 goes to the NFL. Of that, $11.25 goes to the American Cancer Society (ACS) and the NFL keeps the rest. The remaining money is then divided up by the company that makes the merchandise (37.5%) and the company that sells the merchandise (50.0%), which is often the NFL and the individual teams.

How is this "shockingly small"?  A donation of 11.25% of the retail price, and 22.5% of the wholesale price,  of a piece of clothing is a pretty hefty.  What do they expect?  All the author is doing is demonstrating his (her?)  ignorance of retail and clothing net profit margins.  In particular, how can you try to make the NFL the bad guy for donating 90% of the money they actually get?  It's their program, they can't donate the clothing manufacturer's money.

And besides, the NFL should be congratulated for being open about the numbers -- there is often zero transparency in such charitable promotional programs.  How much of the money in the last charity gala you attended do you think actually made it to the charity rather than just help fund the self-aggrandizement of their socialite sponsors?

Trading $1 in Debt for 85 cents of Economic Activity

UPDATE:  Mea culpa.  One point in the original post was dead wrong.  It is possible, contrary to what I wrote below, to get something like a 0.7%  difference in annual growth rates with the assumptions he has in the chart below (Drum still exaggerated when he called it 1%).  I don't know if the model is valid (I have little faith in any macro models) but I was wrong on this claim.  Using the 0.7% and working more carefully by quarter we get a cumulative GDP addition a bit lower than the cumulative debt addition.  There is still obviously a reasonable question even at a multiplier near 1 whether $1 of economic activity today is worth $1 of debt repayment plus interest in the future.  

I am not a believer, obviously, in cyclical tweaking of the economy by the Feds.  To my thinking, the last recession was caused by a massive government-driven mis-allocation of capital so further heavy-handed government allocation of capital seems like a poor solution.  But what really drives me crazy is that most folks on the Left will seductively argue that now is not the time to reduce debt levels, implying sometime in the future when the economy is better will be the appropriate time.  But when, in any expansion, have you heard anyone on the Left say, "hey, its time to reduce spending and cut debt because we need the fiscal flexibility next time the economy goes wrong."

I will leave the stuff in error below in the post because I don't think it is right to disappear mistakes.  For transparency, my spreadsheet reconstruction both confirming the 0.7% and with the updated numbers below is here:   reconstruction.xls.

 

Kevin Drum is flogging the austerity horse again

I see that Macroecomic Advisors has produced a comprehensive estimate of the total effect of bad fiscal policies. Their conclusion: austerity policies since the start of 2011 have cut GDP growth by about 1 percentage point per year.

Something seemed odd to me -- when I opened up the linked study, it said the "lost" government discretionary spending is about 2% of GDP.  Is Drum really arguing that we should be spending 2% of GDP to increase GDP by 1%?

Of course, the math does not work quite this way given compounding and such, but it did cause me to check things out.  The first thing I learned is that Drum partook of some creative rounding.  The study actually said reductions in discretionary spending as a percent of GDP reduced GDP growth rates since the beginning of 2011 by 0.7% a year, not 1% (the study does mention a 1% number but this includes other effects as well).

But it is weirder than that, because here is the chart in the study that is supposed to support the 0.7% number:

click to enlarge

Note that in the quarterly data, only 2 quarters appear to show a 0.7% difference and all the others are less.  I understand that compounding can do weird things, but how can the string of numbers represented by the green bars net to 0.7%?  What it looks like they did is just read off the last bar, which would be appropriate if they were doing some sort of cumulative model, but that is not how the chart is built.  If we interpolate actual values and are relatively careful about getting the compounding right, the difference is actually about 0.45%.  So now we are down to less than half the number Drum quoted see update above (I sent an email to the study author for clarification but have not heard back.  Update:  he was nice enough to send me a quick email).

So let's accept this 0.45% 0.7% number for a moment.  If GDP started somewhere around 16 trillion in 2010, if we apply a 0.45% the quarterly growth numbers from his chart, we get an incremental economic activity from 2011 through 2013:Q2 of about $333 billion.

So now look at the spending side.  The source says that discretionary spending fell by about 2% of GDP over this period.  From the graph above, it seems to bite pretty early, but we will assume it fell 1/12 of this 2% figure each quarter, so that by the end of 2013 or beginning of 2014 we get a fall in spending by 2% of GDP.  Cumulatively, this would be a reduction in spending over the 2.5 years vs. some "non-austere" benchmark of $388 billion.

Thus, in exchange for running up $677 billion $388 billion in additional debt, we would have had $445 billion $333 billion in incremental economic activity.  A couple of reactions:

  1. Having the government borrow money and spend it definitely increases near-term GDP.  No one disputes that.  It is not even in question.  Those of us who favor reigning in government spending acknowledge this.  The question is, at what cost in terms of future obligations.  In fact, this very study Drum is quoting says

    Economists agree that failure to shrink prospective deficits and debt will bestow significant economic consequences and risks on future generations. Federal deficits drive up interest rates, “crowding out” private investment. If government borrowing supports consumption (e.g., through Social Security and major health programs) rather than public investment, the nation’s overall capital stock declines, undermining our standard of living. The process is slow but the eventual impact is large.2 In addition, accumulating debt raises the risk of a fiscal crisis. No one can say when this might occur but, unlike crowding out, a debt crisis could develop unexpectedly once debt reached high levels.

    High deficits and debt also undermine the efficacy of macroeconomic policies and reduce policymakers’ flexibility to respond to unexpected events. For example, in a recession, it would be harder to provide fiscal stimulus if deficits and debt already were high. Furthermore, fiscal stimulus might be less effective then. Additional deficit spending could be seen as pushing the nation closer to crisis, thereby forcing up interest rates and undercutting the effects of the stimulus. With fiscal policy hamstrung, the burden of counter-cyclical policy is thrust on the Federal Open Market Committee (FOMC) but, particularly in a low interest-rate environment, the FOMC may be unable (or unwilling) to provide additional monetary
    stimulus.

  2. I guess we have pretty much given up on the >1 multiplier, huh?  Beggaring our children for incremental economic growth today is a risky enough strategy, but particularly so with the implied .66 .85 multiplier here.

This is not the first time Drum has taken, uh, creative data approaches to cry "austerity" during a mad spending spree. 

Climate Humor from the New York Times

Though this is hilarious, I am pretty sure Thomas Lovejoy is serious when he writes

But the complete candor and transparency of the [IPCC] panel’s findings should be recognized and applauded. This is science sticking with the facts. It does not mean that global warming is not a problem; indeed it is a really big problem.

This is a howler.  Two quick examples.  First, every past IPCC report summary has had estimates for climate sensitivity, ie the amount of temperature increase they expect for a doubling of CO2 levels.  Coming into this IPCC report, emerging evidence from recent studies has been that the climate sensitivity is much lower than previous estimates.  So what did the "transparent" IPCC do?  They, for the first time, just left out the estimate rather than be forced to publish one that was lower than the last report.

The second example relates to the fact that temperatures have been flat over the last 15-17 years and as a result, every single climate model has overestimated temperatures.  By a lot. In a draft version, the IPCC created this chart (the red dots were added by Steve McIntyre after the chart was made as the new data came in).

figure-1-4-models-vs-observations-annotated (1)

 

This chart was consistent with a number of peer-reviewed studies that assessed the performance of climate models.  Well, this chart was a little too much "candor" for the transparent IPCC, so they replaced it with this chart in the final draft:

figure-1-4-final-models-vs-observations

 

What a mess!  They have made the area we want to look at between 1990 and the present really tiny, and then they have somehow shifted the forecast envelopes down on several of the past reports so that suddenly current measurements are within the bands.   They also hide the bottom of the fourth assessment band (orange FAR) so you can't see that observations are out of the envelope of the last report.  No one so far can figure out how they got the numbers in this chart, and it does not match any peer-reviewed work.  Steve McIntyre is trying to figure it out.

OK, so now that we are on the subject of climate models, here is the second hilarious thing Lovejoy said:

Does the leveling-off of temperatures mean that the climate models used to track them are seriously flawed? Not really. It is important to remember that models are used so that we can understand where the Earth system is headed.

Does this make any sense at all?  Try it in a different context:  The Fed said the fact that their economic models failed to predict what actually happened over the last 15 years is irrelevant because the models are only used to see where the economy is headed.

The consistent theme of this report is declining certainty and declining chances of catastrophe, two facts that the IPCC works as hard as possible to obfuscate but which still come out pretty clearly as one reads the report.

Health Care and Prices

Kevin Drum is lauding the transparency an Oregon health insurance exchange which was initiated some apparently welcome price competition into a market for now standardized products.  My response was this:

I applaud any effort by this Administration and others to improve the transparency of pricing in the medical field.  I would have more confidence, though, if all of you folks were not pushing for 100% pre-paid medical plans that will essentially eliminate price-shopping by individuals, and in so doing effectively eliminate the enormous utility of prices.  Prices will soon be meaningful for one thing -- insurance -- in the health care field and absolutely meaningless for everything else in the field.

By the way, at the same time you are improving competition on price, you are eliminating by fiat all competition on features (e.g. what is covered, what deductible I want, etc).  This "success" is like the government mandating one single cell phone design, and then crowing how much easier shopping is for consumers because there is now only one choice.  A simple world for consumers is not necessarily a better world.  I am sure Medieval peasants had a very simple shopping experience as well.

US Doctor Salaries

Kevin Drum thinks he has found the smoking health care gun - US doctors are paid more than everyone else.  That is why we have too-expensive medical care!  A few quick thoughts

  • I am the last one to argue that doctors salaries are set anywhere like at a market clearing price.  Our certification system, crazy third-party payer systems, lack of price transparency, and absurd arguments over the "doc fix" and Medicare reimbursement rates all convince me that doctor salaries must be "wrong"
  • The charts he shows have absolutely no correction for productivity, at least as I read the methodology.  Per the text, they don't even have correction for hours worked.  A McKinsey report several years ago found that US doctors made more, but also saw a lot more patients in a day.  GP care cost more than expected vs. other country's experience, but is due mostly to number of visits, not cost per visit.
  • There is no correction for doctor expenses.  Malpractice insurance, anyone?  We have the most costly malpractice insurance in the world because we have the most broken system.  Doctors pay that out of their salary
  • US GP salaries in Drum's linked report are actually falling, unlike all the other countries studied.  Seem to have fallen 6% in 10 years (page 18), whereas France, for example, has increased more than 10%.

To the last point, I have a hypothesis.  When you first overlay a government health care / price control regime, you get an initial savings.  Doctors are forced to work for less and they still, out of habit and momentum, abide by past productivity standards.  But over time, productivity, like any government-captured function falls.  And over time, doctors, like other civil service groups, become better at organizing and lobbying and begin to get increasing pay packages.  After all, if teachers and fire-fighters can scare Californians into absurd pay and benefit packages, what do you think doctors will be able to do once they learn the game?

A Great Question For Every Expansion of Executive Power

Glenn Greenwald has shown an admirable willingness to call out "his guy" to frequently criticize Obama's claim to be able to order Americans killed at his say-so, "without a whiff of due process, transparency or oversight".  In a recent article, he is flabbergasted that Congresswoman Debbie Wasserman Schulz, who is also head of the DNC, does not seem to have heard of the policy.

I am less surprised than he at the ignorance and mendacity of politicians.  But I did like the question Wasserman Schulz was asked:  did she trust Romney (ie her political bête noire) with such power.  This is a question that everyone should always ask at proposed expansions of government, and particularly Executive, power.  Choose the politician you least trust and/or disagree with the most.  Are you comfortable giving this power to that person?

So many of the Left (Greenwald being one of the few exceptions) have ignored this story, I think because they trust Obama.  Fine, but are you really going to trust the next guy in power?  Because now that you have established that this power is A-OK with a Democrat-Progressive child of the sixties, it is highly unlikely the next Republican in office is going to eschew it.  Wouldn't folks have been a bit more careful about giving this a pass had George Bush claimed the power.  (There is a sort of domestic policy parallel in this, in Republicans rolling over for Medicare part D when Bush was in office when they never would have done so for Clinton).

More Glendale Follies

I almost hate beating on the silly folks who run the City of Glendale even further, but they keep screwing up.

One of the reasons I think that city officials like those in Glendale like to dabble in real estate and sports stadiums is what I call the "bigshot effect."  They don't have any capital of their own, and they don't have the skills such that anyone else would (voluntarily) trust them to invest other people's money, but with a poll of tax money they get to play Donald Trump and act like they are big wheels.  The Glendale city council did this for years, and when their incompetence inevitably led to things starting to fall apart, they have simply thrown more money at it to try to protect their personal prestige.

But unfortunately, incompetence generally is an infinite reservoir, and apparently the City has screwed up again.  Years ago, when the City promised the rich people who owned the AZ Cardinals a new half billion dollar stadium, they put a contract to that effect on paper.  Granted, this was a sorry giveaway, spending hundreds of millions of dollars for a stadium that would be used by the Cardinals for 30 hours a year, by the Fiesta Bowl for 3 hours a year, and by the NFL for a Superbowl for 3 hours every 6-7 years.  But, never-the-less, the City made a contractual agreement.

And then, in its rush to be real estate bigshots, the city turned about 3700 parking spaces promised contractually to the Cardinals over to a developer to create an outlet mall (of the sort that has been quietly going bankrupt all over the country over the last few years).  Incredibly, the city did this without any plan for how to replace the parking it owed the Cardinals.  To this day, it has no plan.

Apparently, there were also some shenanigans with $25 million that had been escrowed to build a parking garage.

The demand letter also blames the parking problem on the city's dealings with Steve Ellman, Westgate's former developer and a one-time co-owner of the Phoenix Coyotes. The letter states that Ellman's relationship with the city has been "characterized by a lack of transparency."

The letter raises questions about a January 2011 arrangement in which the city and Ellman equally split a $25million escrow fund that had been earmarked to build a parking garage in Westgate, the team said.

Ellman put that money in escrow in 2008 after failing to keep a promise to the city to provide a set amount of permanent parking in Westgate.

By early 2011, half of that money went back to Ellman's lenders as part of a deal to try to keep the Coyotes in Glendale, while the city received the other $12.5 million in the account.

What a mess.  This is what happens when politicians try to be bigshots with our money.

 

 

IRS Harassing the Tea Party?

Sure seems like it.   Here is the list of questions the Ohio Tea Party has asked as part of their application, which should be routine, for 501(c)4 status.  The Virginia Tea Party had similar requests, including apparently a demand for donor lists and confidential materials which the IRS says will be made public.  The latter seems part and parcel of recent initiative on the Left (seen also in the whole Heartland fiasco) to out confidential donors of Conservative and libertarian organizations while demanding no similar transparency of organizations on the Left.

By the way, I am President of a 501(c)4 organization  (basically a trade group) and I can say with some authority that we never have received any sort of parallel set of questions from the IRS vis a vis our status, so this is either a very new requirement or one especially crafted to apply only to the Tea Party.  I can say from all too much experience that having a Federal agency sit on a request for 9 months and then suddenly demand incredible amounts of work in just a few days from the private party is absolutely typical.

Understanding the Data One References

I am certain that I have made this mistake myself, but Kevin Drum is careless about using data just because it 1) is labeled in a way he thinks he understands and 2) it supports his pre-conceived notions.

He tries to use the above chart to make the point that Medicare is superior to private insurers because it is more "accurate."  Accuracy in claims seems like a good thing, but I started to wonder how it was defined in this study.

So I spent like 30 whole seconds clicking through to the study.  It turns out the data is based on surveys of doctors.  This chart is explained this way:

Description:  On what percentage of claim lines does the payer's allowed amount equal the physician practice's expected allowed amount?

So really, this chart is not a measure of insurance company accuracy, it is really a measure of doctor accuracy in estimating insurance company claims payment behavior, or perhaps of insurance company claims transparency.  Because Medicare pays fixed, published, below-market rates, and because they are so large, it is not at all surprising doctors are better at predicting what Medicare will pay on a claim.

In other words, doctors disagree with Aetna on claims more frequently than they disagree with Medicare?  Is this bad or good.  I have no idea.

But one could go further and say that another way of heading this chart, rather than "accuracy," would be "willingness of insurer to roll over and pay whatever the doctor asks for."

In the past, Drum and others on the Left have also bragged that Medicare's overhead is lower than private insurers.  These are all related issues.  Private insurers put more scrutiny on claims, which costs more in overhead and causes claims to get paid slower, but presumably results in lower claims payments and less fraud.

Medicare's approach may be net better (ie overhead savings could be larger than claims and fraud savings) or it could be worse, but this chart in isolation tells us nothing.

PS - this is not the first time I have found Drum running health care numbers that do not mean what he thinks they mean.

Constitution-Free Detainment

I've warned before that this military detainment issue was a dangerous one, first in Gitmo, and now with Bradley Manning.   I understand the administration and the Army are pissed at the guy for embarrassing them and potentially giving away secrets to hostile parties, but the guy has not been tried or convicted of anything.  Hell, even if he had been convicted of something, I can't believe he would be sentenced to the punishments he is enduring in what is essentially pre-trial detention.   We are all pissed at Jared Loughner but we haven't treated him this way in detention.

The military is NOT doing anything to improve their case that they should be allowed to handle indefinite detentions, such as at Gitmo, through their procedures rather than civil ones.

The Left seems upset and surprised that Obama would allow such a thing, given his rhetoric on the campaign trail.  I was never surprised -- I wrote on inauguration day that candidates who want more transparency in politics and reductions in Presidential arbitrary authority generally change their tune once in office.  As I wrote then, "It seems that creeping executive power is a lot more worrisome when someone else is in power."  And if that wasn't enough, the Administration's about face on closing Gitmo was another reminder.

Free Market Health Care: The Road Not Taken

My column is up at Forbes, and is the fourth in a series on Obamacare.  An excerpt:

Its amazing to me how many ways supporters of government health care can find to rationalize the bad incentives of third-party payers systems.  Take, for example, the prevelance today of numerous, costly tests that appear to be unnecessary.  Obamacare supporters would say that this is the profit motive of doctors trying to get extra income, and therefore a free market failure.   I would point the finger at other causes (e.g. defensive medicine), but the motivation does not matter.   Let’s suppose the volume of tests is truly due to doctors looking for extra revenue, like an expensive restaurant that always is pushing their desserts.  In a free economy, most of us just say no to the expensive dessert.  But the medical field is like a big prix fixe menu — the dessert is already paid for, so sure, we will got ahead and take it whether we are hungry or not.

It should be no surprise that while US consumer prices have risen 53% since 1992, health care prices have risen at nearly double that rate, by 98%.  Recognize that this is not inevitable.  This inflation is not something unique to medical care — it is something unique to how we pay for medical care.

Contrast this inflation rate for health care with price increases in cosmetic surgery, which unlike other care is typically paid out of pocket and is not covered by third party payer systems.  Over the same period, prices for cosmetic surgery rose just 21%, half the general rate of inflation and just over one fifth the overall health care rate of inflation.

This is why I call free market health care the road not traveled.  There are many ways we could have helped the poor secure basic health coverage (e.g. through vouchers) without destroying the entire industry with third-party payer systems.  Part of the problem in the public discourse is that few people alive today can even remember a free market in health care, so its impossible for some even to imagine.

Update: Coincidently, Mark Perry has a post that addresses just the issue I do in my article, that is the positive effects of high-deductible health insurance and out of pocket health expenditures on pricing transparency and reduced costs.  The high deductible health plans at GM seem to be having a positive effect on the health care market.  A shame they will probably be illegal under Obamacare.  Of course, since GM is owned by the government, it can get any special rules that it wants, unlike the rest of us.  But that his how things work in the corporate state.

Transparency for Thee, But Not for Me

The government is the first organization, given its unique powers to use force against citizens, that should be subject to surveillance and transparency.  Unfortunately, since it is the government itself that sets the rules, it is usually the last.  Following in the tradition of a Congress that exempts itself form most of its workplace regulation, comes the new financial bill which apparently exempts the SEC from most public scrutiny

Under a little-noticed provision of the recently passed financial-reform legislation, the Securities and Exchange Commission no longer has to comply with virtually all requests for information releases from the public, including those filed under the Freedom of Information Act.

The law, signed last week by President Obama, exempts the SEC from disclosing records or information derived from "surveillance, risk assessments, or other regulatory and oversight activities." Given that the SEC is a regulatory body, the provision covers almost every action by the agency, lawyers say. Congress and federal agencies can request information, but the public cannot.

That argument comes despite the President saying that one of the cornerstones of the sweeping new legislation was more transparent financial markets. Indeed, in touting the new law, Obama specifically said it would "increase transparency in financial dealings."

Apparently the children of the sixties, who once pushed for the Freedom of Information Act as a check to those in power, now are rolling it back once they are in power themselves.

The Most Open Administration Ever, Hope And Change, Yada Yada...

Ted Bridis of the AP reports

For at least a year, the Homeland Security Department detoured hundreds of requests for federal records to senior political advisers for highly unusual scrutiny, probing for information about the requesters and delaying disclosures deemed too politically sensitive, according to nearly 1,000 pages of internal e-mails obtained by The Associated Press....

Internally, Homeland Security was adamant that Napolitano's political advisers were merely reviewing materials before they were distributed, not making the call on whether they should come out. "To be clear, this is a review not an approval," Callahan wrote.

Yet many e-mails directed Homeland Security employees never to release information under FOIA without approval by political appointees.

"It is imperative that these requests are not released prior to the front office reviewing both the letter and the records," Papoi wrote in an e-mail to the agency's officers responsible for administering the law.

Another e-mail described a request from USA Today that was "tagged by the front office and requires approval."

Under the law, people can request copies of U.S. government records without specifying why they want them and are not obligated to provide personal information about themselves other than their name and an address where the records should be sent.

Yet several times, at least, junior political staffers asked superiors about the motives or affiliations of the requesters.

The directive laid out an expansive view of the sort of documents that required political vetting.

Anything that related to an Obama policy priority was pegged for this review. So was anything that touched on a "controversial or sensitive subject" that could attract media attention or that dealt with meetings involving prominent business and elected leaders.

Anything requested by lawmakers, journalists, activist groups or watchdog organizations had to go to the political appointees. This included all of AP's information requests, even a routine one for records that had already been sought by other news organizations.