Coyote Blog

George's Employment Blawg has a roundup of a lot of good HR-related blog posts.

This is wrong, wrong, wrong.  Yes, I know that there is a real risk, in fact a certainty, that dangerous people will be let out on the street.  But that is the bias of our entire legal system - the "beyond a reasonable doubt" standard and other protections of the accused routinely put bad people back on the street.  We live with that, because we would rather err in putting bad people back on the street than in putting good people behind bars for life.  Give them a trial, deport them, or let them go.  Heck, airdrop them into Paris for all I care, but you have to let them get due process or go free.

Beyond the usual promises to work out more and shave off 15 pounds or so, I can't think of a better New Year's Resolution than this one, from Atlas Shrugged:

I swear--by my life and my love of it--that I will never live for the sake of another man, nor ask another man to live for mine.

The only exception to this is my immediate family, which is really not an exception - I think the very definition of family is those people you move under the umbrella of your own self, to join you as part of your "I".

Happy New Year!

This story surprises me not at all, and, if you are a reader of this site and my Florida horror stories, you will not be surprised that it occurred in Florida.  After driving all the neurosurgeons out of town with frivolous malpractice suits, plaintiffs lawyers are now suing...because there are no neurosurgeons:

Florida, the family of the late Barbara Masterson is suing West Boca Medical Center because hospital staff was unable to locate a neurosurgeon willing to come to the scene to perform life-saving surgery after a stroke. "The incident occurred in February, when Palm Beach County neurosurgeons were refusing to perform emergency services for fear of skyrocketing malpractice costs."

Also see this story about a recent death in Pennsylvania because all the neurosurgeons had been run out of town.

Our family actually has a personal experience with this.  My dad (81 years old) broke his neck while at his ranch in central Wyoming.  As he was cared for in Casper, the largest city in the state, we soon found it impossible to get any quality time with the neurosurgeon, since there was only one left in all of the central part of the state!  Eventually, they got his neck stabilized enough to fly him to Texas on a medical evac jet where he could get real care and eventually surgery (happy ending, all is well and all the appendages still work fine).

Via the Commons, the story of how the Clear Skies initiative came off the rails, despite the fact it was initially seen as a win-win for both environmentalists and industry.  I don't know all the issues on the table, but I like the cap-and-trade concept for pollution control. 

Many folks, by the way, automatically assume that as a libertarian, I am automatically against pollution laws.  This is not the case.  In fact, this issue is a good example of how a thoughtful understanding of individual rights and property rights differs from just being blindly "pro-business".  In fact, pollution laws are nearly essential to strong property rights.  As I wrote then:

In fact, environmental laws are as critical to a nation with strong property rights as is contract law. Why? Imagine a world without any environmental legislation but with strong property rights. What happens when the first molecule of smoke from my iron furnace or from my farm tractor crosses over on to your land. I have violated your property rights, have I not, by sending unwanted substances onto your land, into your water, or into your airspace. To stop me, you might sue me. And so might the next guy downwind, etc. We would end up in an economic gridlock with everyone slapping injunctions on each other. Since economic activity is almost impossible without impacting surrounding property owners, at least in small ways, we need a framework for setting out maximums for this impact - e.g., environmental legislation.

Cap and trade strike me as the best, most free market way to limit pollution - this system shifts the burden of pollution control to the people and industries and technologies that can do it the cheapest.  Unfortunately, many environmentalists are command and control technocrats and/or socialists who greatly prefer having government micro-manage technology choices and industry by industry requirements.  Which is exactly what led to the problems referred to in the article around "new source review".

New source review is long and complicated, but basically says that existing power plants don't have to upgrade to new technologies, but new ones have to go through a very extensive environmental review and permitting process and have a suite of government mandated pollution control technologies installed.  OK, that has all been clear for 3+ decades.  The rub comes when a company considers upgrading or replacing a portion of a power plant.  For most of the life of the Clean Air Act, the government allowed utilities to upgrade and modernize plants without having to install the expensive suite of new controls.  The Clinton administration clamped down on this, making it harder to upgrade existing plants.  All the recent hullabaloo has occurred as GWB proposed to go back to the pre-Clinton rules.

This issue is a great test for environmentalists, because it separates them into those who really understand the issues and the science and legitimately want improvement, and those who care more about symbolism and politics.  Those who like symbolism have cast this move as a roll-back, and are fighting it tooth and nail.  Those who care about results know the following:

Experience under the Clinton rules has shown that most old plants will never be upgraded if they have to go through the planning process and install the new scrubbing and other technologies.  So, they will just keep running inefficiently, as-is, until they are finally shut down.  However, if allowed to be upgraded without review and new scrubbers, etc., they will become much more efficient.  No, they won't have the most modern scrubbing technology, but because they are more efficient, they burn less fuel (coal) to make the same amount of electricity and therefore will pollute less.  In some cases these rules even prevent switching to cleaner fuels like natural gas. 

In other words, most scientists, including scientific-oriented environmentalists, agree that GWB's proposal will result in less pollution, but environmentalists still oppose it because they don't like the symbolism of any pollution regulation appearing to be rolled back.  You can read a lot more about New Source Review and how it actually increases pollution in practice here.

Recently, the government announced that it would take over the United Airlines pilots pensions in the government-funded Pension Benefit Guaranty Corp.  This move is irritating pilots, because their pensions get reduced, and it is annoying to me as a taxpayer, that I have to bail out a company that was too screwed-up to fully fund its pension obligations. 

This points up the biggest danger of government guarantees -- it causes companies to be more reckless.  Back in the 80's, banks and S&L's made insanely risky investments with bank deposits.  The people who should have been most interested in this problem - bank depositors - ignored it because they felt safe that the government had guaranteed their deposits.  In the same way, airlines and other ailing businesses with defined benefit pensions cut back on pension funding when times were bad, and the very group that should have been crying foul - the company unions - did not, because they again counted on a bail-out.

I put the blame squarely on the company's management, who made a commitment to employees and then failed to keep it, and now are using government pension gaurantees as a subsidy to close their cash flow gap.  However, it is interesting to look at the role of unions too.  For decades, unions have demanded defined benefit pensions (ones that promise a fixed amount per month at retirement) and have opposed defined-contribution pensions (ones where the company promised to contribute a fixed amount today into an investment fund).  I assume the main reason for this is that unions do not want workers to bear the market risks on investments.

Over time, though, defined benefit plans have, despite this opposition, gone the way of the dinosaur (at least in private companies - most government jobs still have them).  This is for a number of reasons:

• 401-K accounts now offer much of the same tax-deferral benefits for defined contribution programs that defined-benefit plans had
• Defined-benefit plans turn out to have market risk too.  One is inflation - benefits levels may be guaranteed, but unexpectedly high inflation can effectively reduce them, while defined contribution plans, if invested correctly, will likely produce returns to offset these inflation losses.  In addition, during go-go stock markets, holders of defined-benefit plans found out that they did not enjoy the benefits of higher investment returns - their employers pocketed them (by the way, may Americans are discovering the same about their Social Security benefits).
• As employees move around more, workers have found that defined benefit plans are not very portable, and tend to punish workers who do not stay for decades.  401-K plans are much more beneficial to workers who do not stay their whole career, or at least 20 years, in one place.
• As United pilots have found, defined benefit pension plans are hard to police by current employees- there are just too many variables that allow companies to argue that the pensions are OK.  On the other hand, defined contribution plans are very easy to police- one can check the amount of contribution each month against the amount promised.
• Finally, defined benefit plans rely on their company staying in business and fiscally sound for decades into the future.  This may have seemed a good bet at US Steel or United Airlines in 1950, but would anyone make that bet today?  For any company?

I wrote here and here about the cost that licensing can impose on consumers, often with little measurable benefit.  It's worth repeating this Milton Friedman quote:

The justification offered is always the same: to protect the consumer. However, the reason is demonstrated by observing who lobbies at the state legislature for the imposition or strengthening of licensure. The lobbyists are invariably representatives of the occupation in question rather than of the customers. True enough, plumbers presumably know better than anyone else what their customers need to be protected against. However, it is hard to regard altruistic concern for their customers as the primary motive behind their determined efforts to get legal power to decide who may be a plumber.

In this same vein, Reason has an article on the Oklahoma case where the state's requirement that casket sellers be licensed morticians was challenged legally:

Memorial Concepts Online sells an oak coffin for about $2,000, compared to an average of around $4,000 at funeral homes in Oklahoma, where the company is based. By separating the purchase of caskets from the purchase of funeral services, Memorial Concepts can offer substantial savings, not to mention a shopping environment free of hovering morticians. But in Oklahoma, which allows caskets to be sold only by licensed funeral directors, such competition is illegal.

In the last couple of weeks, particularly after Santa brought one of my kids a new mini iPod, we have been having an Aerosmith revival.  It started with our recent trip to DisneyWorld, where my daughter and I discovered the job of Disney's "rockin roller coaster", which is an Aerosmith-themed roller coaster (no, really) with Aerosmith tunes blaring through the ride.

After standing in lines for a while listening to Aerosmith tunes (but not that long, Disney's Fastpass system really makes the waits much more manageable), my kids are now huge fans.