Posts tagged ‘US’

Irony

It turns out that the US is one of the few industrialized nations to meet the terms of the Kyoto protocols (reduce CO2 emissions to 1997 levels) despite the fact we never signed it or did anything to try to meet the goals.

Thank the recession and probably more importantly the natural gas and fracking revolution.  Fracking will do more to reduce CO2 than the entire sum of government and renewable energy projects (since a BTU from natural gas produces about half the CO2 as a BTU form coal).  Of course, environmentalists oppose fracking.  They would rather carpet the desert with taxpayer-funded solar panels and windmills than allow the private sector to solve the problem using 50-year-old technology.

Obamacare Not Only Raising My Rates, But Making The Process Much Harder

On September 26 of this year, President Obama said this of the new Obamacare exchanges:

“If you’ve ever tried to buy insurance on your own,” he said, “I promise you this is a lot easier.”

Well, let's see.  Here are some notes on my previous health insurance buying decision

  • I was able to price shop policies online without creating an account, without giving up my social security number.  The websites to do so worked and operated quickly
  • A broker who had decades of experience in health care (rather than being a former Obama campaign worker with a few hours of training) walked me through the options and how they worked.
  • Once we chose a policy, the application process online was quick and easy

Here is one thing that was likely worse

  • I had to provide medical history information, which probably is not required under Obamacare because of community rating (though I am not sure)

And here is one thing that was better for me but I guess must be worse for the Left since they complain about it so much

  • There was a lot more choice.  If the process was "harder" in any way before, it was because there were far more choices.  It was harder in the same way that it is generally harder to shop in the US than, say, in the old Soviet Union.  Obamacare circumscribes policies such that a large package of benefits are mandated, not optional (I have to pay for mental health coverage and probably aromatherapy) and the size of one's deductible is capped.

It is also this latter difference that will make my next policy substantially more expensive.  In standardizing options, the Congress standardized on the most expensive options (broadest possible benefits, smallest possible deductible).

By the way, this is not proven yet but there is probably one other way my Obamacare policy will be worse than my last one:  the doctor network in my policy will very likely be a LOT smaller.  We could almost be sure this would happen precisely because Obama promised it wouldn't  (his promises on health care are pretty good "tells" that the opposite will happen).

Understanding "Mix": Is Flattening in Income Growth Due in Part to Geographic Cost of Living Differences and Migration Within the US?

For 20 years, before I liberated myself from corporate America, I spent a hell of a lot of time doing business and market analysis (e.g. why are profits declining in Division X).  I was pretty good at it.  If I had to boil down everything I learned in those years to one lesson, it would be this:  Pay attention to changes in the mix.

What do I mean by "changes in the mix"?  Here is an example.  A company has two products.  One has a 20% margin, and the other has a 30% margin, and both margins have been improving over time because of a series of cost reduction investments.  But overall, company margins are falling.  The likely reason:  the mix is shifting.  The company is selling a higher proportion of the lower margin product.

Here is a real world example:  When I was at AlliedSignal (now Honeywell) aviation, they had exactly this problem.  They were operating in a razor and blades business -- ie they practically gave the new parts away to Boeing and Airbus to put on their planes, because they made all their money selling aftermarket replacements at a premium (at the time, government rules made it almost impossible to buy anything but the original manufacturer's part, so they could charge almost anything for a replacement, especially given that an airline likely had a $50 million plane sitting dormant until the part was replaced).  I routinely would tell managers in the company that essentially our business made money from unreliability -- the less reliable our parts, the more money we made.  Because newer technology, competition, and pressure form airlines was forcing us to greatly improve our reliability (at the same time we were giving stuff to Boeing at ever greater losses), all our newer products on newer planes were less profitable than the old stuff.  As planes aged and dropped out of the fleet, our product mix was getting less and less profitable.

This same effect can be seen in many economic and political issues.  Take for example an argument my mother-in-law and I had years and years ago.  She said that Texas (where I was living at the time) had crap schools that were much worse that those in Massachusetts, her argument for the blue political model.  She observed that average educational outcomes were much better in MA than TX (which was and still is true).  I observed on the other hand that this was in part a result of mix.  Texas had better outcomes than MA when one looked at Hispanics alone, and better outcomes for non-Hispanics alone, but got killed on the mix given that Hispanics typically have lower educational outcomes than non-Hispanics everywhere in the US, and Texas had far more Hispanics than MA.

All of this is a long introduction to some thinking I have been doing on all the "Average is Over" discussion talking about the flattening of growth in median wages.  I begin with this chart:

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There is a lot of interstate migration going on.  And much of it seems to be out of what I think of as higher cost states like CA, IL, and NY and into lower cost states like AZ, TX, FL, and NC.  One of the facts of life about the CPI and other inflation adjustments of income numbers is that the US essentially maintains one average CPI.  Further, median income numbers and poverty numbers tend to assume one single average cost of living number.  But everyone understands that the income required to maintain lifestyle X on the east side of Manhattan is very different than the income required to maintain lifestyle X in Dallas or Knoxville or Jackson, MS.

Could it be that even with a flat average median wage, that demographic shifts to lower cost-of-living states actually result in individuals being better off and living better?

For some items one buys, of course, there is no improvement by moving.  For example, my guess is that an iPhone with a monthly service plan costs about the same anywhere you go in the US.  But if you take something like housing, the differences can be enormous.

Let's compare San Francisco and Houston.  At first glance, San Francisco seems far wealthier.  The median income in San Francisco is $78,840 while the median income in Houston in $55,910.  Moving from a median wage job in San Francisco to a media wage job in Houston seems to represent a huge step down.  If you and a bunch of your friends made this move, the US median income number would drop.  It would look like people were worse off.

But something else happens when you take this nominal pay cut to move to Houston.  You also can suddenly afford a much nicer, larger house, even at the lower nominal pay.  In San Francisco, your admittedly higher nominal pay would only afford you the ability to buy only 14% of the homes on the market.  And the median home, which you could not afford, has only about 1000 square feet of space.  In Houston, on the other hand, your lower nominal pay would allow you to buy 56% of the homes.  And that median home, which you can now afford, will have on average 1858 square feet of space.

So while the national median income numbers dropped when you moved to Houston, you actually can afford a much nicer home with perhaps twice as much space.  Thus, it strikes me that there are important things happening in the mix that are not being taken into account when we say that the "average is over".

Of course, while this effect is certainly real, I have no idea how much it affects the overall numbers, ie is it a small effect or a large effect.  Fortunately my son is studying economics in college.  If he ever goes to grad school, I will add this to my list of research suggestions for him.

Postscript:  This exact same discussion could apply to US poverty statistics.  We have one poverty line income number whether you live in Manhattan or Tuscaloosa.  I have always wondered how much poverty statistics would change if you created some kind of purchasing power parity test rather than a fixed income test.

Anti-Deficiency Act

You may be wondering under what authority the government is taking actions during the government shutdown.  We had a meeting with the Chief of the US Forest Service on Friday.  This is the specific text the Administration is using to justify all of its shutdown actions

(a)(1) An officer or employee of the United States Government or of the District of Columbia government may not—

(A) make or authorize an expenditure or obligation exceeding an amount available in an appropriation or fund for the expenditure or obligation;

(B) involve either government in a contract or obligation for the payment of money before an appropriation is made unless authorized by law;

(C) make or authorize an expenditure or obligation of funds required to be sequestered under section 252 of the Balanced Budget and Emergency Deficit Control Act of 1985; or

(D) involve either government in a contract or obligation for the payment of money required to be sequestered under section 252 of the Balanced Budget and Emergency Deficit Control Act of 1985.

I will leave it as an extra credit exercise for the reader to explain how this text justifies either a) spending extra money to barricade war memorials on the Washington Mall or b) closing privately-funded parks that take not a single dime of government money.    All these tests have everything to do with limiting government expenditures, not limiting citizen access to public lands.

We had some delays (in part because the government is taking a holiday from the shutdown today, so everything is REALLY closed) but we file our lawsuit seeking a temporary restraining order on the US Forest Service in the morning.

Insulting Treatment by the US Forest Service

This was posted by the US Forest Service outside of a privately-funded, privately-operated campground:

White-Mountain-NF-Shut-Down

 

All the maintenance at this site, as well as all cleaning, utilities, security monitoring, staffing, customer service, etc. are provided and paid for by a private concessionaire that does not take one dime of government money.   The "our ability to perform maintenance" is incredibly disingenuous, because over the course of a year likely no US Forest Service maintenance person even steps on the property.   The last half of the message therefore has absolutely nothing to do with the first half.  The campground is closed and not being maintained because the US Forest Service has arbitrarily suspended the concessionaires contract in an apparent attempt to make the shutdown more painful for the public.

The Map Every Intelligence Analyst Should Have on His Wall, For Humility

I have been playing around with this DVD, which is a collection of high resolution situation maps from the European theater of war after D-Day in WWII.  The maps are really interesting, though the interface is awful.  Like something from the AOL era.  I would play with this much more but it is just too kludgy.

This is probably my favorite map (click to enlarge)

click to enlarge

 

Of course, on the very next day, the last great German attack on the Western Front came right out of that empty red circle.

click to enlarge

In the software, one can zoom very deep into these maps, deeper than these images allow.  So it's a shame that the interface is so bad.

PS - The Bulge is deservedly a part of American military mythology but we should remember that in many ways it was a small battle compared to any number in the East.  This is one of those facts that always perplexes this libertarian, because there is no way the Western Democracies could have ever defeated Germany IMO.  Only Stalin's willingness to soak up astounding losses really defeated Germany.  German army casualties on the Eastern Front were nearly three times their combined casualties in Africa, Italy, France, and Benelux.

The flip side of this is that no one else other than the US could have defeated the Japanese, though again the Soviets would have given them real troubles in Manchuria.  That war was more about projecting power across great distances than pure numbers.  We did bravely soak up absurd casualties in short bursts.  But again, the Russians were soaking up Bettio-level casualties every few hours, and sustained it day in and day out for years.

Forest Service Proves Itself to Be Arbitrarily Targeting Private Companies

By now, readers will know that our company operates public parks and campgrounds in the National Forest without taking one dime of Federal money.  We pay for the cleaning, maintenance, utilities, and staffing of the facilities entirely from the user fees paid by visitors at the gate.  Because we take no government money(we actually make lease payments to the government) we have never been closed in past shutdowns, but we were closed last week as the White House overruled an early Forest Service decision and ordered us closed.

Well, here is a photo from yesterday of the parking lot of one of the recreation areas we operate and were forced to closed.  Doesn't look very closed, does it?

20131012_160444_resized

As it turns out, yesterday the local Sheriff was concerned with traffic jams on the highway near here as people tried to park and walk in.  It is a danger I warned the US Forest Service about way back on October 2 in a letter to Cal Joyner, the Regional Forester for Arizona and New Mexico (and was promptly ignored).  The Sheriff forced the gate open and let everyone in.

The amazing thing I found out today, and confirmed through pictures and news reports, is that the Sheriff was accompanied by US Forest Service personnel who apparently accepted this action.  This means in effect that the US Forest Service believes this site is safe to occupy by visitors without our company present to clean the bathrooms, take out the trash, monitor security, watch for fires, stop vandalism, etc.  but is not safe, somehow, with us present and actively staffing the site.  This obviously makes no sense and just points out how arbitrary the decision-making has been.

Starting yesterday morning I begged the US Forest Service to let us return to staffing the site (which should be an easy decision since, unlike opening National Parks, this would require zero dollars from the government) but I got no response.

We have also found numerous other sites operated by third parties like ourselves on US Forest Service land in Arizona still open.  For example, the Oak Flats campground in the Tonto National Forest is still open for business.  In addition, we know of at least three Arizona State Parks, including Slide Rock SP, that operate on US Forest Service land just as we do but who have not been ordered to close.  I know that Fool Hollow SP operates with a special use permit very similar to ours, but unlike us, its permit has not been temporarily suspended and it is open for business.

In fact, I cannot find a single third party who operates on the National Forests in Arizona who have had their operations suspended except for the private campground concessionaires.   The powerful ski associations got their operations on Forest Service lands exempted from the get-go, probably because they have a full-time lobbying staff in DC and I do not.  The same goes true for BLM lands, where the BLM has not closed its campgrounds or parks to the public.  And the same goes true now for the Grand Canyon NP, which has been reopened by the state of Arizona.  In fact, we may be the only recreation operations on Federal land in this state that are still required to close.

Update:  The Forest Service made us cease operations at the Locket Meadow campground near Flagstaff.  After kicking us out, they have reopened the campground to the public (without any staff or services on site).  It is absolutely outrageous that the US Forest Service believes that the campground is fine for public visitation but that our company must be banned from operating it.  Clearly, the resource and the visitors are safer and better protected and better served with us there, so this can only mean that the Forest Service is for some reason arbitrarily targeting our business, rather than use of the land, for shutdown.  I cannot think of any possible justification for this action.  If the campground is safe for public visitation during the shutdown, it is safer for us to operate and keep clean and protected.

PS-  I should say targeting private SMALL companies.  Large companies with political pull seem to be getting the National Parks open where they have operations.  Just like with Obamacare and nearly everything else in modern government, restrictions are passed on private enterprises but exceptions are granted to those large enough to have staff lawyers, full-time lobbyists, and who can bundle a lot of donations.

New Development: Our Closure Creates Chaos in Sedona

As you know (and am sure are tired of hearing about) the US Forest Service has closed all our privately-funded and operated parks on their land.  These include a number of very popular campgrounds and parks in the Sedona area.

Today we got a call from the County Sheriff saying that visitors were parked all over the highway and walking into our (closed) concession areas.  He said they were creating a serious public safety problem, particularly at Call of the Canyon** (also known as West Fork) and Crescent Moon Ranch (also known as Red Rock Crossing).  I told him that I had specifically raised this issue about these specific sites all the way up to Cal Joyner, Regional head of the USFS in Arizona, New Mexico and parts of Oklahoma and Texas.  And the US Forest Service had closed us anyway.  The Sheriff begged us to reopen the facilities and I told him I would love nothing more but my contracts were suspended and I had no legal basis for doing so.

So, apparently, the sheriff cut the cable on the facilities and is letting cars into the facilities, creating even more chaos.  There is no one there to monitor safety, provide security, clean the bathrooms, pick up trash, etc. -- all the things we do every day without taking one dollar of Federal money, if only the US Forest Service would let us.  I am actually happy the Sheriff is giving visitors access.  These facilities are particularly lovely in the Autumn.  But the US Forest Service needs to send 15 or 20 people to help manage them, but that would cost them money they do not have.  Or they could just let us get back to operating the sites, which does not cost them one dime.

 

** The West Fork of Oak Creek Canyon is so beautiful in the fall that Zane Grey immortalized it in a novel called "Call of the Canyon."  The trailhead and parking area are cramped and require a lot of active management even when staffed to keep them operating safely.

Last Justification for Closing Private US Forest Service Concessionaires is in Tatters

The last remaining justification that anyone has given me for the need to close privately-funded concession-run parks in the US Forest Service is that the Forest Service must close to all uses on its lands.  But this justification is now in total tatters, making it all the more clear that closure of private concessionaires was an arbitrary and unjustified action.  Here is why:

  • As reported earlier, the US Forest Service is still allowing many recreation uses on its lands.  Individuals can still camp and hike in non-developed areas.  Many US Forest Service campgrounds till seem to be open (example Oak Flats near Globe, AZ).  And many state parks, such as Fool Hollow and Slide Rock in AZ and Burney Falls in CA that operate on US Forest Service land have been allowed to remain open and still use Forest Service land for recreation.  In fact, the only groups that seem to be closed in the US Forest Service are private concessionaires, which increasingly appear to have been singled out for rough treatment by the Administration.
  • We have received emails from the US Forest Service that these closures are required to be consistent with the NPS, but the NPS is allowing its parks to be reopened if they are funded by outside agencies.  Both Arizona and Utah have reached agreements to reopen National Parks in their states through use of state funding.  So why can't private parks on Federal lands be reopened through the use of private funding, which is how we operate anyway?  Its almost as if this Administration has some sort of bias against private activity.

House Challenges US Forest Service Over Closure of Privately-Funded Parks and Campgrounds

I received a copy of this letter on Friday.  It is a letter from the House Natural Resources Committee to the head of the US Forest Service Tom Tidwell, threatening investigations and hearings over closures of privately-funded, concession-operate parks in the Forest Service.  Click to enlarge either page.

click to enlarge  Click to Enlarge

 

Should I Resort to Civil Disobedience And Re-Open Our Privately-Funded Parks?

I have gotten a lot of mail with moral support from readers as we try to deal with the fact that the White House has ordered privately-funded parks in the National Forest to close, flying in the face of all precedent and budget logic.

Many, many emails have encouraged me to disobey the order and keep the parks open for the public.  There are three reasons why I have chosen not to do so.

1.  Respect for Contract:  In my 25 or so lease contracts with the US Forest Service (the USFS insists on calling them "special use permits" but legally they are essentially commercial leases), the contract language gives the Forest Supervisor of each Forest the right to suspend or terminate the contract for virtually any reason.  Yeah, I know, this is a crappy lop-sided contract provision, but welcome to the world of working with the Federal government.  So each Forest Supervisor has the right to suspend our lease.  BUT....

The real question here is whether they have proper justification for doing so, or whether their suspension is arbitrary.  In another post I discuss why this action is arbitrary and unjustified:

Historically, the USFS has only rarely used this contract power, and its use has generally been in one of two situations:  a) an emergency, such as a forest fire, that threatens a particular recreation area or b) a situation where the recreation area cannot physically be used, such as when it has been destroyed by fire or when it is being refurbished.  Never, to my knowledge, has the USFS used this power to simultaneously close all concession operations, and in fact in past shutdowns like 1995 and 1996 most all concessionaires stayed open.

Budget considerations alone cannot justify the closure order, as USFS concessionaires do not use Federal funds and in fact pay money to the Treasury.  Closing us actually reduces the income to the Treasury as we pay our concession fees as a percentage of revenues.  Further, the USFS does not have any day-to-day administration responsibilities for these parks.  The only semi-regular duty is sometimes to provide law enforcement backup, but USFS law enforcement officers are still at work (we know this because they showed up to post our operations as closed).

The Administrative Procedure Act makes it illegal for a government agency to make a decision that is arbitrary, capricious or an abuse of discretion.  To this end, the USFS has not actually closed the Forests and still allows camping in the Forests.  Thus, the USFS considers it safe for people to be camping in the Forests and that doing so during the shutdown creates no risk of resource or property damage.  In contrast, the USFS has made the decision that it is not safe to allow camping in developed campsites run by private concessionaires.  The decision that developed campgrounds run by private companies must close, but undeveloped camping can continue, makes no sense and is arbitrary, capricious and an abuse of discretion.  If anything, closing developed areas but allowing dispersed camping increases risks to public safety and for resource damage as developed concession areas are staffed and trained to mitigate such risks (that's the whole point of having developed recreation in the first place).

While we feel good we have a winning argument, this is a complicated point that does not lend itself well to civil disobedience, but we are taking it to court and seeking an injunction to the closure.

2.  The wrong people would go to jail.  Civil disobedience has a long and honorable history in this country.  But the honor of such an act would quickly go out the window if I were to commit an act of defiance but others would have to go to jail.  We run over a hundred sites.  Telling my people to remain open would simply lead to getting my employees thrown in jail for trusting me and following my instructions.  That would be awful.  Just as bad, we can see from examples in the National Park Service that such disobedience would potentially subject my customers to legal harassment.  It's not brave or honorable for me to be defiant but to have others pay the cost.

3.  I could lose everything.  I don't want to seem weak-kneed here, but I would be dishonest not to also raise the small but critical point that I have almost every dollar I own tied up in this company, which does over half its business in the National Forest**.  My retirement and all my savings are in this one basket.   I would likely risk an arrest and a few hours in jail plus the price of bail and months of court appearances to make a point here.  I am not ready to go all-in with everything I own, not when there are other legal avenues still available.  If that makes me a wimp, so be it.

 

** you can be assured that the moment I have one minute of extra time we are going to be working on diversifying away from the US Forest Service as much as possible.

Why The Shutdown of Concessionaires is Arbitrary and Capricious

We are preparing to go to court to reopen privately-funded parks in the US Forest service that take no Federal money, yet have recently been closed due to budget shortfalls.

Our USFS contracts give the local Forest Supervisor the right to suspend the contract.  However, historically, the USFS has only rarely used this contract power, and its use has generally been in one of two situations:  a) an emergency, such as a forest fire, that threatens a particular recreation area or b) a situation where the recreation area cannot physically be used, such as when it has been destroyed by fire or when it is being refurbished.  Never, to my knowledge, has the USFS used this power to simultaneously close all concession operations, and in fact in past shutdowns like 1995 and 1996 most all concessionaires stayed open.

Budget considerations alone cannot justify the closure order, as USFS concessionaires do not use Federal funds and in fact pay money to the Treasury.  Closing us actually reduces the income to the Treasury as we pay our concession fees as a percentage of revenues.  Further, the USFS does not have any day-to-day administration responsibilities for these parks.  The only semi-regular duty is sometimes to provide law enforcement backup, but USFS law enforcement officers are still at work (we know this because they showed up to post our operations as closed).

The Administrative Procedure Act makes it illegal for a government agency to make a decision that is arbitrary, capricious or an abuse of discretion.  To this end, the USFS has not actually closed the Forests and still allows camping in the Forests.  Thus, the USFS considers it safe for people to be camping in the Forests and that doing so during the shutdown creates no risk of resource or property damage.  In contrast, the USFS has made the decision that it is not safe to allow camping in developed campsites run by private concessionaires.  The decision that developed campgrounds run by private companies must close, but undeveloped camping can continue, makes no sense and is arbitrary, capricious and an abuse of discretion.  If anything, closing developed areas but allowing dispersed camping increases risks to public safety and for resource damage as developed concession areas are staffed and trained to mitigate such risks (that's the whole point of having developed recreation in the first place).

The True Poverty Rate

I thought this was interesting.  I guess I never realized that poverty rate excludes anti-poverty programs, nor that frequent comparisons made by the Left that our poverty rates compare unfavorably to those in Europe are essentially completely disingenuous as they are comparing apples and oranges.

the only way anyone’s ever really found to reduce the number living in poverty is to give the poor money n’stuff so that they’re no longer living in poverty. But if we don’t count the money n’stuff that is being given to the poor then we’re not going to be able to show that giving the poor money n’stuff alleviates poverty, are we?

And that’s the point at the heart of this necessary correction to the US poverty numbers. The 15% number is not the number living in poverty. It is the number who would be living in poverty if it weren’t for all the money n’stuff we give to the poor. For when we calculate the poverty number we ignore almost all of what is done to alleviate poverty. We leave out all four of the largest anti-poverty programs in fact. We don’t count the money spent on Medicaid, we don’t count the EITC, we ignore the costs of SNAP and we completely overlook Section 8 housing vouchers. That’s hundreds of billions of dollars worth of spending on poverty alleviation right there and all of it is entirely ignored when calculating the poverty numbers. What’s worse, we could double the amount of money we spend to alleviate poverty and the number under the poverty line wouldn’t change by one single digit.

 

uspoverty2

 

 

These alternative measures are explained in WAY more depth here (pdf) by Bruce Meyer and James Sullivan

Forest Service Closing Only Small Private Campground Operators, Not Closing Large Ski Corporations or State Parks that Operate on Forest Service Land

As readers will know, the US Forest Service has issued and unprecedented and unnecessary order to close over a thousand privately-funded campgrounds that don't take one dime of Federal money (example here).  All the 100+ parks we operate in the US Forest Service have been ordered closed.

But there appears to be more to this story.  There are several groups that operate parks on National Forest lands under agreements nearly identical to ours who appear to have been exempted from the closure order.

  • Large corporations that run ski resorts and certain other large resort properties on National Forest lands have been exempted.  It should be noted that ski resorts operators, unlike campground operators, have full-time lobbyists stationed in Washington and can afford in-house staff lawyers to fight these kinds of orders.  My guess is that knowing they would immediately get sued if they ordered larger private firms to close, the USFS focused only on smaller and more helpless private firms.
  • Many state parks, including at least 3 in Arizona and many in California, are actually on US Forest Service land and operate through special use permits almost identical to those we have with the USFS, yet none of these parks have been asked to close  (Slide Rock and Fool Hollow State Park in Arizona and Burney Falls SP in California are just a few examples of state parks that operate on US Forest Service land).

In other words, the US Forest Service seems to be issuing closure orders inconsistently, targeting only private operators who are too small to fight back.  The USFS has not been especially clear how they are justifying this order (perhaps since it can't be justified) but they have hinted that it is either because a) they can no longer "administer" these contracts, whatever that means since they have no day-to-day administration responsibilities or b) they are removing everyone from Federal lands.  Note, though, that both explanation "a" or "b" would apply equally to ski resorts and state parks operating on Federal land leases which are not being closed.

I will also add that the USFS is continuing to allow individuals to hike and camp in non-developed areas of the forests.  I have no problem with this -- there is no reason for the USFS to halt public access to public land just because their employees are getting a paid vacation.  But this just highlights how crazy and inconsistent their policies are.  People can camp in the National Forest everywhere except in developed campgrounds where private companies who take no Federal money normally have employees on site to clean up trash and provide security and prevent fires.  Many campers take good care of the land but some do not, and driving these campers out of privately-operated developed sites into dispersed areas where their impact cannot be mitigated is just another way these actions increase rather than decrease costs.

 

Its Official: US Forest Service Closing over 1000 Privately-Funded Parks

The US Forest Service, under pressure apparently from the White House, has reversed both its historical precedent as well as its position yesterday and will close over 1000 public parks and campgrounds that are operated by private companies without using one dime of public money.  Why does the fact that our landlord the US Forest Service is going on an unpaid vacation mean that tenants of theirs have to close up shop too?  We have no idea.

This is how I explained it in my letter to my senators:

My company, based in North Phoenix, operates over 100 US Forest Service campgrounds and day use areas under concession contract. Yesterday, as in all past government shutdowns, the Department of Agriculture and US Forest Service confirmed we would stay open during the government shutdown. This makes total sense, since our operations are self-sufficient (we are fully funded by user fees at the gate), we get no federal funds, we employ no government workers on these sites, and we actually pay rent into the Treasury.

However, today, we have been told by senior member of the US Forest Service and Department of Agriculture that people “above the department”, which I presume means the White House, plan to order the Forest Service to needlessly and illegally close all private operations. I can only assume their intention is to artificially increase the cost of the shutdown as some sort of political ploy.

The point of the shutdown is to close non-essential operations that require Federal money and manpower to stay open. So why is the White House closing private operations that require no government money to keep open and actually pay a percentage of their gate revenues back to the Treasury? We are a tenant of the US Forest Service, and a tenant does not have to close his business just because his landlord goes on a vacation.

My Plea to Stop the White House From Closing Privately-Funded, Privately-Operated Parks

Here is my letter to my Congresspersons:

Senator John McCain

Senator Jeff Flake

Representative David Schweikert

 

Help! Administration Orders Shut Down of Privately-Operated Parks in National Forest

Parks that require no Federal money, and actually pay rent to the Treasury, are being required to close

 

Sirs:

My company, based in North Phoenix, operates over 100 US Forest Service campgrounds and day use areas under concession contract. Yesterday, as in all past government shutdowns, the Department of Agriculture and US Forest Service confirmed we would stay open during the government shutdown. This makes total sense, since our operations are self-sufficient (we are fully funded by user fees at the gate), we get no federal funds, we employ no government workers on these sites, and we actually pay rent into the Treasury.

However, today, we have been told by senior member of the US Forest Service and Department of Agriculture that people “above the department”, which I presume means the White House, plan to order the Forest Service to needlessly and illegally close all private operations. I can only assume their intention is to artificially increase the cost of the shutdown as some sort of political ploy.

The point of the shutdown is to close non-essential operations that require Federal money and manpower to stay open. So why is the White House closing private operations that require no government money to keep open and actually pay a percentage of their gate revenues back to the Treasury? We are a tenant of the US Forest Service, and a tenant does not have to close his business just because his landlord goes on a vacation.

I urge you to help stop the Administration from lawlessly taking arbitrary and illegal actions to artificially worsen the shutdown by hurting innocent hikers and campers. I am not asking you to restore any funding, because no funding is required to keep these operations open. I am asking that the Administration be required to only close government services that actually require budget resources.

 

Sincerely,

Warren Meyer

 

Government Closing Parks It Does Not Fund or Operate

I mentioned in an earlier article that the Administration is threatening to close US Forest Service parks it does not even fund or run, privately operated parks that happen to have the Federal government as a landlord.  In fact, in our case, we pay the US Forest Service between 8 and 22 percent of revenues as a concession fee, so by threatening to close us it is costing them, not saving them extra money.

Apparently, the NPS is already doing this:

National Park Officials closed down the educational Claude Moore Colonial Farm near the CIA in McLean, Va., even though the federal government doesn't fund or staff the park popular with children and schools. Just because the privately-operated park is on Park Service land, making the federal government simply its landlord, the agency decided to close it.

A Claude Moore Colonial Farm official said that the privately-funded staff is on the job Wednesday, but barred from letting anybody visit the historically accurate buildings or animals. Anna Eberly, the managing director, sent out an email decrying the decision and rude National Park Service staff handling the closure.

Pointing to Park Service claims that parks have to be closed because the agency can’t afford staff during the government closure, Eberly wrote: “What utter crap. We have operated the Farm successfully for 32 years after the NPS cut the Farm from its budget in 1980 and are fully staffed and prepared to open today. But there are barricades at the Pavilions and entrance to the Farm. And if you were to park on the grass and visit on your own, you run the risk of being arrested. Of course, that will cost the NPS staff salaries to police the Farm against intruders while leaving it open will cost them nothing.”

She added: “In all the years I have worked with the National Park Service, first as a volunteer for six years in Richmond where I grew up, then as an NPS employee at the for eight very long years and now enjoyably as managing director for the last 32 years — I have never worked with a more arrogant, arbitrary and vindictive group representing the NPS. I deeply apologize that we have to disappoint you today by being closed but know that we are working while the National Park Service is not — as usual.”

This is purely political -- it costs rather than saves the government money.

If Parks Stayed Open, No One Would Notice The Government Shutdown

For several days now I have been highlighting article after article (here and here) where the only service downside of the government shutdown anyone can come up with is the closure of parks.  Here is another example, from the AP entitled "Lawmakers feeling heat from Government Shutdown".  Its all parks:

Some 800,000 federal workers deemed nonessential were staying home again Wednesday in the first partial shutdown since the winter of 1995-96.

Across the nation, America roped off its most hallowed symbols: the Liberty Bell in Philadelphia, the Statue of Liberty in New York, Mount Rushmore in South Dakota, the Washington Monument.

Its natural wonders — the Grand Canyon, Yosemite, the Smoky Mountains and more — put up “Closed” signs and shooed campers away.

Democratic Sen. Tim Kaine of Virginia said he was getting pleas from businesses that rely on tourists. “The restaurants, the hotels, the grocery stores, the gasoline stations, they’re all very devastated with the closing of the parks,” he said.

The far-flung effects reached France, where tourists were barred from the U.S. cemetery overlooking the D-Day beaches at Normandy. Twenty-four military cemeteries abroad have been closed.

Only 22,000 of those 800,000 run parks.  Apparently none of the others do anything we will miss.  Oh, they come up with one new one:

Even fall football is in jeopardy. The Defense Department said it wasn’t clear that service academies would be able to participate in sports, putting Saturday’s Army vs. Boston College and Air Force vs. Navy football games on hold, with a decision to be made Thursday.

Eek!  I joke about this but I fear that today this is going to bite me right in the butt.  Our company operates campgrounds on land we lease from the US Forest Service.  Since we pay all expenses of the operation, take no government money, and employ no government workers, we have never closed in a shutdown and the US Forest Service confirmed at noon yesterday we would not have to close this time.  But apparently someone above the US Forest Service somewhere in the Administration is proposing to reverse this, and illegally close us.  My guess is that they realize parks are the only thing the public misses, and so the Administration trying to see if it can close more of them, even ones that are operated privately and off the government budget.

Update:  This is very similar to what is happening in DC.  By trying to close us, the USFS is actually costing themselves more money (since we pay rent to them based on our revenues) with the only goal being to make the closure worse.  The Administration has ordered the same thing to occur in DC parks, where they are spending far more money "closing" monuments than they do just having them open all the time

Yesterday, the sight of a group of World War II veterans storming the barricaded monument built in their honor in Washington, D.C., became the buzzworthy moment from the first day of our federal shutdown.  The open-air, unmanned outdoor memorial had been barricaded to keep people from "visiting" due to the government shutdown, though there was no real (as in “non-political”) reason to have done so. Barricades certainly wouldn’t prevent vandals from busting in there at night if they wanted to. It was an absurd, petty move.

This morning, Charlie Spiering of the Washington Examiner returned to the memorial to find a gaggle of “essential” government workers there to barricade it once again. He tweeted that the employees fled after cameras started filming them working, but then came back to attach “closed” signs. A couple of them appear to be talking to the media. The barricades are apparently there, but have not been tied together and are therefore easily removed.

Still Open, But....

Our concession operations on Federal lands are still mostly open today (we had two US Forest Service local offices ask us to close, but these are both offices that have a tradition of interpreting the rules in odd ways).

By all the rules, being open to the public is the right decision.  We are tenants on US Forest Service land and operate entirely outside of the government budget, receiving no money from the government and we employ no government workers.  No government employee has a duty station in any of the parks we operate.   There is no more reason to close our operations than to, say, ban cars from Federal highways during a shutdown.

However, apparently we have been told by several local folks in the Forest Service that the higher ups (this tends to mean folks up in the Administration) are re-evaluating our status.  I do not know what is going on today, but in the past this has often meant that the administration is considering closing us to make the government closure as painful as possible.  After all, as I have written here and here, parks closures seem to be one of the few things anyone notices in a government shut down.

Update:  Our most recent guidance:  "1.  The Forest Service is allowing concessionaires to continue to operate as long as no Forest Service personnel is needed to ensure safety."  It looks like we may have to close a few sites that are dependent on USFS operated water systems, but otherwise most of our locations will be open.  I am hoping to get out a press release and update our web site but things are still fluid this morning.

Update #2:  Definitely still open everywhere but in one location (Laguna Mountain, CA) where we depend on a USFS-operated water system that will close.  no closure press release 2013

What Is Wrong With Health Care, Though My Diagnosis is Opposite of the Left's

Note:  I did not like the way I first wrote this post so I have re-written it extensively.  

Progressives are passing around this chart from Brookings as an indicator of "what is wrong" with the US healthcare system.

blog_proton_beam_facilities

This is how Kevin Drum interprets the chart:

In other words, the supposed advantage of PRT—that it targets cancers more precisely and has fewer toxic side effects—doesn't seem to be true. It might be better in certain very specialized cases, but not for garden variety prostate cancer.

And yet, new facilities are being constructed at a breakneck pace. Why? Because if they build them, patients will come. "They're simply done to generate profits," says health care advisor Ezekiel Emanuel. Roger that.

This is an analysis that may be true, but let's take a moment to consider how strange it is.  Forget health care for a minute.  Think about any other industry.  Here is what they are effectively saying:

  1. Industry competitors are making huge investments in a technology that has no consumer value
  2. The competitors in this industry are all making investments in this technology so rapidly that the industry is exponentially over-saturating with capacity.

And from these two facts they conclude that the profits of industry competitors will increase??

Let's for a moment say this is true -- an enormous investment that has no customer utility and that is made by so many players that the market is quickly over-saturated actually increases industry profits.  Let's take a moment to recognize that this is BIZARRE.  We have to be suspicious of some structural issue for something so bizarre to happen.  As is typical of progressives, their diagnosis seems to be that private actors are somehow at fault for being bad people to make these investments.  But these same private actors, even if they wanted to, could never make this work in any other industry, and besides there is no evidence that hospital managers are any worse people than, say, cookie company managers.  The problem is that we have fashioned a bizarre system through heavy government intervention that apparently makes these pointless investments sensible to otherwise rational actors.

One problem is that in any normal industry, consumers would simply refuse to buy, or at least refuse to pay a very high price, for services that have little or no value.  But in health care, we have completely eliminated any consumer visibility to prices.  Worse, we have eliminated any incentive for them to care about prices or really even the utility of a given procedure.  This proton beam thingie might improve my outcomes 1%?   Why not, it's not costing me anything.  Perhaps the biggest problem in health care is that the consumer has no incentive to shop.  Obamacare does nothing to fix this issue, and in fact if anything is taking us further away from consumer shopping and price transparency by working to kill high deductible health insurance and HSA's.

There is only one other industry I can think of where capital investment, even stupid capital investment, automatically translates to more profits, and that is the regulated utility business.  And that is what hospitals have become -- regulated utilities that get nearly automatic returns on investment.

In a truly free market, if these investments made no sense, one would expect very soon a reckoning as those who made these nutty investments go bankrupt.  But they obviously don't expect this.  They expect that even if it turns out to be a bad investment, they will use their political ties to get these costs built into their rate base (essentially built into reimbursement rates).  If any private or public entity refuses to pay, you just run around screaming to the media that they want to deny old people care and let sick people die.  Further, the government can't let large hospitals go bankrupt because it has already artificially limited their supply through certificate of need processes in most parts of the country.

The Left has proposed to fix this by creating the IPAB, a group so divorced from accountability that it can theoretically make unpopular care rationing decisions and survive the political fallout.  But the cost of this approach is enormous, as it essentially creates an un-elected dictatorship for 1/7 of the economy.  Which tends to be awesome if your interests and preferences line up with those of the dictator, but sucks for everyone else.  Which category do you expect to be in?  (Oh, and let's not forget how many examples we have from history of benevolent technocratic dictatorships - zero.)

The much more reasonable solution, of course, is to handle these issues the same way we do in cookies and virtually every other product -- let consumers make price-value tradeoffs with their own money.

Single-Minded Obsession on Home Ownership

This article from the LA Times confused me greatly:

Advocates for borrowers took such comments to mean that the banks would prioritize debt write-downs on first mortgages, which banks resisted before the [$25 billion] settlement. Now, with nearly all the promised relief handed out, it is clear that the banks had other ideas.

The vast majority of the aid to borrowers, it turns out, came in the form of short sales and forgiveness of second mortgages. Just 20% of the aid doled out under the national settlement went to forgiveness of first-mortgage principal, the kind of help most likely to keep troubled borrowers in their homes. In terms of borrowers helped, just 15% of the total received first-mortgage forgiveness.

The five banks collectively delivered twice as much aid using short sales, in which owners sell their homes for less than the amount owed and move out, with the shortfall forgiven.

In all, the lenders sought credit for nearly $21 billion related to short sales and $15 billion related to second mortgages. That compares with $10.4 billion in write-downs on first mortgages.

Critics on the Left (example) are calling this a failure of the program, that most of the relief went to short-sales and 2nd mortgage forgiveness rather than first mortgage forgiveness.  The original article has this quote:

"It just shows you that the banks are running the government," Marks said. "There's virtually no benefit to borrowers, and yet you give the banks credit for short sales and getting second liens wiped out — something they were going to have to do anyway."

Hmm, well I am not the biggest fan of bankers in the world, but short sales and second lien forgiveness are principle forgiveness as well, just of a different form.  If they wanted a settlement that was first-lien forgiveness only, they should have specified that.

In fact, both short sales and second lien forgiveness have tremendous value to individuals if one considers individual well-being one's goal rather than just this obsessive fixation on home ownership.  

For many people, the worst part of their negative equity is that it created a barrier to their moving.  Perhaps they could find a job in another part of the state or country, or they wanted to move into a home or apartment with less expensive payments but were stuck in their current home because they could not afford to bring tens of thousands of dollars to closing.  In such cases, a short sale is exactly what the homeowner needs and facilitating and expediting this likely helped a ton of people  (It is also an example of just how unique our mortgage rules are in the US -- in almost any other country in the world, the amount of the negative equity in a short sale would get hung on the seller as a lien that must be paid off over time.  Only in the US do buyers routinely walk away clean from such situations).  Given that first mortgage loan forgiveness more often than not does not save the loan (ie it eventually ends in foreclosure anyway), short sales are the one approach that lets lenders get away clean for a fresh start.

As for second mortgages, I can tell you from personal experience that it is virtually impossible in the current environment to restructure or refinance a first mortgage with a second lien on the house -- even in my case where everything is performing and the underlying home value is well above the total of the two liens.  Seriously, what is the point in reducing principle in the first mortgage if there is a second mortgage there, particularly when the second mortgage is likely far more expensive?  For people with a second mortgage, forgiveness of that is probably the first and best gift they could get.  They may end up still losing their home, but they can't even begin to discuss a restructure or refinance without that other mortgage going away.

Government Obsession Over Race

This morning I received yet another mandatory survey from the US Census Bureau.  I have written about these before.  We have to fill out the Census lodging survey (a long and tedious detailed financial report) as well as a myriad of other Department of Labor and Commerce surveys.  Where I can legally, I throw them away.  If I risk prison not filling it out, I do so reluctantly.**

So this morning I got the Survey of Business Owners and Self-Employed Persons (SBO).  Apparently the SBO comes out every five years.  It's got a big MANDATORY stamped on it so with a sigh I started it up online to get it over with.

The survey was mercifully short, but it was bizarre.  After asking me my address, it asked how many owners there were, and then for each owned asked his or her race and gender.  And that was it.  Suddenly the survey was over, particularly quickly for me because I always refuse to answer race questions on surveys.

But that is the sum total of what the government wants to know about business owners - race and gender and nothing else matters I guess.

 

** I know I always engender outraged comments over this.  I refuse to supply the government with data that they will use to pass new laws to make my life harder or take more of my money.  As for economists and academics, they are welcome to pay me for the effort of filling this out but I should not be obligated to labor for their benefit.

Eeek! Austerity! Oh, Never Mind.

Yesterday I challenged a graph by Kevin Drum in Mother Jones as being a disingenuous attempt to paint US government spending as some sort of crazed austerity program which is making the recovery worse.  He uses this graph to "prove" that our fiscal response to this recession is weak vis a vis past recessions.  The graph is a bit counter-intuitive -- note that it begins at the end of each recession.  His point is that Keynesian spending needs to continue long after (five years ?!) after the recession is over to guarantee a good recovery, and that we have not done that.

Click to enlarge

For anyone not steeped in the special reality of the reality-based community, it is a bit counter intuitive for those of us who have actually lived through the last 5 years to call government spending austere.

The key is in the dates he selects.  He leaves out the actual recession years.  So by his chart, responses that are late and occur after the recession look better than responses that are fast and large but happen during the recession.  This seems odd, but it is the conclusion one has to draw.

I took roughly the same data and started each line two years earlier, so that my first year is two years ahead of his graph and the zero year in my graph is the same as the zero point in Drum's chart.  His data is better in the sense that he has quarterly data and I only have annual.  Mine is better in that it looks at changes in spending as a percentage of GDP, which I would guess would be the more relevant Keynesian metric (it also helps us correct for the chicken and egg problem of increased government spending being due to, rather than causing, economic expansion).

Here are the results (I tried to use roughly the same colors for the same data series, but who in the world with the choice of the entire color pallet uses two almost identical blues?)

recession-redux2

You can see that Drum makes spending look lower in the current recession by carefully dating the data series to the peak of the spending, rather than comparing it to pre-recession levels.  The right hand scale is the difference in government spending as a percentage of GDP from the -2 year.  So, for example, in the current recession government spending was 34.2% in 2007 and 41.4% in 2009 for a reading of 7.2% in year 0.

Even with the flat spending over the last three or four years in the current recession (flat nominal spending leads do a declining percent of GDP) the spending increase from pre-recession levels is still about twice as high as in other recent recessions.

Does this look like austerity to anyone?

Trying to Overcome My Ignorance on the Banking System

Over the last year, I have learned that those of us who took economics back in the 1980's with textbooks written in the 1960's and 1970's are not very well prepared to understand the modern banking system.  This was a pretty good article that whetted my appetite for understanding what has changed.  A couple of interesting bits from the piece:

One cannot think straight about the future impact of different exit strategies without understanding of the role of bank reserves in today’s financial markets.

  • Banking and money creation has not worked for at least two decades in the way that most people learned in school.

The old system was rather simple in the textbooks. The basic assumptions were (i) all credit was provided by banks; (ii) all bank credit (assets) were funded by the issuance, or creation, of depository liabilities (money) subject to a reserve requirement; and (iii) central banks controlled credit/money/inflation by rationing bank reserves. A stable 'money multiplier' was hypothesised to allow central banks to accurately predict the eventual impact of changes in bank reserves on money and credit.

The problem with the old theory of monetary operations is that none of the three assumptions has been true for at least a generation.
Most credit in the US is created by nonbanks; virtually all bank lending is funded by the creation of liabilities that are not subject to reserve requirements,3 and central banks do not ration reserves. In fact they take great pains to provide banks with the amount of reserves they desire. Central banks influence credit not by rationing the quantity of reserves but by altering the interest rate that banks must pay to obtain the quantity of reserves they desire.

  • Today, credit creation in general and money creation in particular are no longer tied to the stock of reserves (i.e. the stock of banks’ deposits at the Fed).

This gets to the heart of the question of why over $2 trillion in excess bank deposits built up at the Fed over the last 4 years are not really moving the needle on bank lending  (of course, this is a supply AND demand problem, and part of the issue with flat bank lending is tie to lack of demand as many businesses deleverage).  But in terms of supply, I am increasingly coming to terms with the following statement which seems counter-intuitive to someone who studied banking 30 years ago

One of the unintended consequences of Fed LSAPs has been the withdrawal of high quality liquid collateral such as US Treasuries from the financial markets paid for by crediting commercial bank reserve accounts. As discussed above, the banking system as a whole cannot dispose of these assets (reserves). At the same time, banks are under massive pressure world-wide to deleverage. This can take place either by increasing capital (a bank liability), which is costly to shareholders, or by reducing assets. Thus banks’ massive holdings of reserves at the Fed are ‘deadwood’ as far as the banks and their credit-creation capacity are concerned. They may crowd out credit.

The deadwood problem will get worse if the US tightens regulatory leverage ratios – that is, reduces the maximum ratio permitted between a bank’s total assets and capital.6

There is a great irony in the journalistic history of monetary policy. What many are calling central bank “money creation” “helicopter money” or “rolling the printing presses” may – in combination with tighter leverage ratios – lead to a tightening of bank credit and deflationary pressures.  And all this is occurring while the spectre of uncontrolled credit expansion and monetary debasement are being decried countless times by those who have not recognized that yesteryear’s monetary paradigm is defunct.

Interesting.  I hear this from a lot of people in the know about the system.  The author suggests one solution is having the Fed begin to do reverse repos with non-banks, which would drain excess reserves while adding high quality collateral back to the banking system which would allow more lending.  Which appears to be exactly what the Fed is considering.

I am reading this article next to see if I can get a better handle on how all this works.  I will let you know if I find it useful.

Trend That is Not A Trend: Rolling Stone Wildfire Article

Rolling Stone brings us an absolutely great example of an article that claims a trend without actually showing the trend data, and where the actual data point to a trend in the opposite direction as the one claimed.

I won't go into the conclusions of the article.  Suffice it to say it is as polemical as anything I have read of late and could be subtitled "the Tea Party and Republicans suck."  Apparently Republicans are wrong to criticize government wildfire management and do so only because they suck, and the government should not spend any effort to fight wildfires that threaten private property but does so only because Republicans, who suck, make them.  Or something.

What I want to delve into is the claim by the author that wildfires are increasing due to global warming, and only evil Republicans (who suck) could possibly deny this obvious trend (numbers in parenthesis added so I can reference passages below):

 But the United States is facing an even more basic question: How should we manage fire, given the fact that, thanks to climate change, the destruction potential for wildfires across the nation has never been greater? In the past decade alone, at least 10 states – from Alaska to Florida – have been hit by the largest or most destructive wildfires in their respective histories (1). Nationally, the cost of fighting fires has increased from $1.1 billion in 1994 to $2.7 billion in 2011.(2)

The line separating "fire season" from the rest of the year is becoming blurry. A wildfire that began in Colorado in early October continued smoldering into May of this year. Arizona's first wildfire of 2013 began in February, months ahead of the traditional firefighting season(3). A year-round fire season may be the new normal. The danger is particularly acute in the Intermountain West, but with drought and record-high temperatures in the Northwest, Midwest, South and Southeast over the past several years, the threat is spreading to the point that few regions can be considered safe....

For wildland firefighters, the debate about global warming was over years ago. "On the fire lines, it is clear," fire geographer Michael Medler told a House committee in 2007. "Global warming is changing fire behavior, creating longer fire seasons and causing more frequent, large-scale, high-severity wildfires."...(4)

Scientists have cited climate change as a major contributor in some of the biggest wildfires in recent years, including the massive Siberian fires during a record heat wave in 2010 and the bushfires that killed 173 people in Australia in 2009.(5)...

The problem is especially acute in Arizona, where average annual temperatures have risen nearly three-quarters of a degree Fahrenheit each decade since 1970, making it the fastest­-warming state in the nation. Over the same period, the average annual number of Arizona wildfires on more than 1,000 acres has nearly quadrupled, a record unsurpassed by any other state and matched only by Idaho. One-quarter of Arizona's signature ponderosa pine and mixed-conifer forests have burned in just the past decade. (6)...

At a Senate hearing in June, United States Forest Service Chief Thomas Tidwell testified that the average wildfire today burns twice as many acres as it did 40 years ago(7). "In 2012, over 9.3 million acres burned in the United States," he said – an area larger than New Jersey, Connecticut and Delaware combined. Tidwell warned that the outlook for this year's fire season was particularly grave, with nearly 400 million acres – more than double the size of Texas – at a moderate-to-high risk of burning.(8)

These are the 8 statements I can find to support an upward trend in fires.  And you will note, I hope, that none of them include the most obvious data - what has the actual trend been in number of US wildfires and acres burned.  Each of these is either a statement of opinion or a data point related to fire severity in a particular year, but none actually address the point at hand:  are we getting more and larger fires?

Maybe the data does not exist.  But in fact it does, and I will say there is absolutely no way, no way, the author has not seen the data.  The reason it is not in this article is because it does not fit the "reporters" point of view so it is left out.  Here is where the US government tracks fires by year, at the National Interagency Fire Center.   To save you clicking through, here is the data as of this moment:

click to enlarge fires 2013 to date

 

Well what do you know?  The number of fires and the acres burned in 2013 are not some sort of record high -- in fact they actually are the, respectively, lowest and second lowest numbers of the last 10 years.  In fact, both the number of fires and the total acres burned are running a third below average.

The one thing this does not address is the size of fires.  The author implies that there are more fires burning more acres, which we see is clearly wrong, but perhaps the fires are getting larger?  Well, 2012 was indeed an outlier year in that fires were larger than average, but 2013 has returned to the trend which has actually been flat to down, again exactly opposite of the author's contention (data below is just math from chart above)

Click to enlarge

 

In the rest of the post, I will briefly walk through his 8 statements highlighted above and show why they exhibit many of the classic fallacies in trying to assert a trend where none exists.  In the postscript, I will address one other inconsistency from the article as to the cause of these fires which is a pretty hilarious of how to turn any data to supporting you hypothesis, even if it is unrelated.  Now to his 8 statements:

(1) Again, no trend here, this is simply a single data point.  He says that  10 states have set in one year or another in the last decade a record for one of two variables related to fires.  With 50 states and 2 variables, we have 100 measurements that can potentially hit a record in any one year.  So if we have measured fires and fire damage for about 100 years (about the age of the US Forest Service), then we would expect on average 10 new records every decade, exactly what the author found.  Further, at least one of these -- costliness of the fires -- should be increasing over time due to higher property valuations and inflation, factors I am betting the author did not adjust for.

(2)  This cost increase over 17 years represents a 5.4% per year inflation.  It is very possible this is entirely due to changes in firefighting unit costs and methods rather than any change in underlying fire counts.

(3) This is idiotic, a desperate reach by an author with an axe to grind.  Wildfires in Arizona often occur out of fire season.   Having a single fire in the winter means nothing.

(4) Again, we know the data does not support the point.  If the data does not support your point, find some "authority" that will say it is true.  There is always someone somewhere who will say anything is true.

(5) It is true that there are scientists who have blamed global warming for these fires.  Left unmentioned is that there are also scientists who think that it is impossible to parse the effect of a 0.5C increase in global temperatures from all the other potential causes of individual weather events and disasters.  If there is no data to support a trend in the mean, it is absolutely irresponsible to claim causality in isolated data points in the tails of the distribution

(6) The idea that temperatures in Arizona have risen 3/4 a degree F for four decades is madness.  Not even close.  This would be 3F, and there is simply no basis in any reputable data base I have seen to support this.  It is potentially possible to take a few AZ urban thermometers to see temperature increases of this magnitude, but they would be measuring mostly urban heat island effects, and not rural temperatures that drive wildfires (more discussion here).  The statement that "the average annual number of Arizona wildfires on more than 1,000 acres has nearly quadrupled" is so awkwardly worded we have to suspect the author is reaching here.  In fact, since wildfires average about 100 acres, the 1000 acre fire is going to be rare.  My bet is that this is a volatility in small numbers (e.g. 1 to 4) rather than a real trend.  His final statement that "One-quarter of Arizona's signature ponderosa pine and mixed-conifer forests have burned in just the past decade" is extremely disingenuous.  The reader will be forgiven for thinking that a quarter of the trees in Arizona have burned.  But in fact this only means there have been fires in a quarter of the forests -- a single tree in one forest burning would likely count for this metric as a forest which burned.

(7) This may well be true, but means nothing really.  It is more likely, particularly given the evidence of the rest of the article, to be due to forest management processes than global warming.

(8)  This is a data point, not a trend.  Is this a lot or a little?  And remember, no matter how much he says is at risk (and remember this man is testifying to get more budget money out of Congress, so he is going to exaggerate) the actual acreage burning is flat to down.

Postscript:  The article contains one of the most blatant data bait and switches I have ever seen.  The following quote is taken as-is in the article and has no breaks or editing and nothing left out.   Here is what you are going to see.  All the way up to the last paragraph, the author tells a compelling story that the fires are due to a series of USFS firefighting and fuel-management policies.  Fair enough.   His last paragraph says that Republicans are the big problem for opposing... opposing what?  Changes to the USFS fire management practices?  No, for opposing the Obama climate change plan. What??  He just spent paragraphs building a case that this is a fire and fuel management issue, but suddenly Republicans suck for opposing the climate change bill?

Like most land in the West, Yarnell is part of an ecosystem that evolved with fire. "The area has become unhealthy and unnatural," Hawes says, "because fires have been suppressed." Yarnell is in chaparral, a mix of small juniper, oak and manzanita trees, brush and grasses. For centuries, fires swept across the chaparral periodically, clearing out and resetting the "fuel load." But beginning in the early 1900s, U.S. wildfire policy was dominated by fire suppression, formalized in 1936 as "the 10 a.m. rule" – fires were to be extinguished by the morning after they were spotted; no exceptions. Back in the day, the logic behind the rule appeared sound: If you stop a fire when it's small, it won't become big. But wildland ecosystems need fire as much as they need rain, and it had been some 45 years since a large fire burned around Yarnell. Hawes estimates that there could have been up to five times more fuel to feed the Yarnell Hill fire than was natural.

The speed and intensity of a fire in overgrown chaparral is a wildland firefighter's nightmare, according to Rick Heron, part of another Arizona crew that worked on the Yarnell Hill fire. Volatile resins and waxy leaves make manzanita "gasoline in plant form," says Heron. He's worked chaparral fires where five-foot-tall manzanitas produced 25-foot-high flames. Then there are the decades of dried-up grasses, easily ignitable, and the quick-burning material known as "fine" or "flash" fuels. "That's the stuff that gets you," says Heron. "The fine, flashy fuels are just insane. It doesn't look like it's going to be a problem. But when the fire turns on you, man, you can't outdrive it. Let alone outrun it."

Beginning with the Forest Service in 1978, the 10 a.m. rule was gradually replaced by a plan that gave federal agencies the discretion to allow fires to burn where appropriate. But putting fire back in the landscape has proved harder to do in practice, where political pressures often trump science and best-management practices. That was the case last year when the Forest Service once again made fire suppression its default position. Fire managers were ordered to wage an "aggressive initial attack" on fires, and had to seek permission to deviate from this practice. The change was made for financial reasons. Faced with skyrocketing costs of battling major blazes and simultaneous cuts to the Forest Service firefighting budget, earlier suppression would, it was hoped, keep wildfires small and thus reduce the cost of battling big fires.

Some critics think election-year politics may have played a role in the decision. "The political liability of a house burning down is greater than the political liability of having a firefighter die," says Kierán Suckling, head of the Tucson-based Center for Biological Diversity. "If they die, you just hope that the public narrative is that they were American heroes."

The problem will only get worse as extremist Republicans and conservative Democrats foster a climate of malign neglect. Even before President Obama unveiled a new climate-change initiative days before the fire, House Speaker John Boehner dismissed the reported proposal as "absolutely crazy." Before he was elected to the Senate last November, Jeff Flake, then an Arizona congressman, fought to prohibit the National Science Foundation from funding research on developing a new model for international climate-change analysis, part of a program he called "meritless." The biggest contributor to Flake's Senate campaign was the Club for Growth, whose founder, Stephen Moore, called global warming "the biggest myth of the last one hundred years."

By the way, the Yarnell firefighters did not die due to global warming or even the 10am rule.  They died due to stupidity.  Whether their own or their leaders may never be clear, but I have yet to meet a single firefighter that thought they had any business being where they were and as out of communication as they were.