Coyote Blog

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

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

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

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

She also points to this story in San Diego:

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

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

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

President Bush's call for Katrina spending to be offset by budget cuts has spurred a blogosphere effort to identify local pork urge Congress to cut the pork.  I am 98% behind this effort (the missing 2% being that the effort is spurred by a desire to spend the money somewhere else, rather than sending it back to taxpayers where it belongs).  Glenn Reynolds post that got the ball rolling is here.  His followup posts are here and here.  I will note the irony that I recently compared Don Young (of Alaska bridge to nowhere fame) to Huey Long (of multiple bridges to nowhere fame), given that we are looking to cut Don Young's pork to help Huey Long's old stomping ground.

Edward at Zonitics has already identified one of the most visible chunks of AZ pork, that is our earmarks in the recent highway bill.  These include nearly five million for a couple of pedestrian bridges, plus hundreds of millions for a rail system to run empty trains to compete with our empty buses.  Why does the rest of the country need to pay for Phoenix's growth?  Heck, we just took the money the feds saved us on this junk and spent it subsidizing a stadium for the Cardinals, for god's sakes.   I will note that of the mere 8 people who voted against the highway bill, 2 were from Arizona, including my 3rd district Congressman John Shadegg and libertarian Jeff Flake.  Flake, consistent with his libertarian principles (or in retribution for them?) represents the only district in the country without an earmark in the highway bill.

So, to push the ball forward, I will add another bit of Arizona pork.  I wanted to include some items form the energy bill, but I can't find a state by state impact.  But I can find, thanks to the environmental working group, a nice summary of farm subsidies to Arizona.  Here is a summary for the most recent year they have data:

And here is the same data but cut by recipient, with just the top 20 included:

I don't know all these folks, but I can say that all of the first three have extremely profitable casinos they operate.

I am writing my letter now to the my Congressman and Senators, and will post a copy as an update when I am done.  The ubiquitous NZ Bear has a data base he is building of pork identified.

Technorati tag:  porkbusters.

Via Lynne Keisling of the Knowledge Problem comes two good articles on supply and demand in the gasoline markets. 

The first is from James Hamilton, who analyzes the effect of gasoline price increase on demand and finds, amazingly to some I guess, that demand has fallen substantially.

We have certainly seen this in the camping and travel business, as visitation has fallen off the map of late, though fortunately it comes right at the end of the season.  It appears that demand has fallen about 10% with the increase to circa $3 gas, about matching the shortfall in US refining capacity post-Katrina.  Does anyone doubt that we would have seen gas lines had prices not risen?

The second article is from Steve Chapman. Apparently, Democratic senators are separately working to make sure that higher oil prices are not allowed to spur either lower demand or higher supply.   First he takes on serial-stupid-statement-making Maria Cantwell who is working the demand-side with her desire to have the US President set retail gasoline prices:

This week, as gasoline prices remained above $3 a
gallon, [Maria Cantwell] proposed giving the president the power to tell retailers
what they can charge at the pump.

A lot of people grew anxious
seeing long lines forming last week, as motorists rushed to fill their
tanks in the aftermath of Hurricane Katrina. But Cantwell apparently
enjoyed the sight well enough that she'd like to make those lines a
permanent feature of the landscape. If so, she has the right approach.
The government does many things badly, but one thing it knows how to do
is create shortages through the vigorous use of price controls.

That's what it did in the oil market in 1979-80, under President Jimmy
Carter. He was replaced by Ronald Reagan, who lifted price caps on gas
and thus not only banished shortages but brought about an era of low
prices.

Cantwell thinks oil companies have manipulated the
energy market to gouge consumers, though she is awaiting evidence to
support that theory. "I just don't have the document to prove it," she
declared. Her suspicions were roused when she noticed that prices
climbed in Seattle--though most of its oil comes from Alaska, which was
not hit by a hurricane.

Maybe no one has told Cantwell that oil
trades in an international market, and that when companies and
consumers in the South can't get fuel from their usual sources, they
will buy it from other ones, even if they have to go as far as Prudhoe
Bay.

If prices rose in Dallas and didn't rise in Seattle, oil
producers would have a big incentive to ship all their supplies to
Texas--leaving Washingtonians to pay nothing for nothing. When a freeze
damages Florida's orange juice crop, does Cantwell think only
Floridians feel the pain?

Then, he turns his attention to Senator Dorgan, who wants to make sure we get no new oil supplies by having the government confiscate "windfall profits"

Sen. Byron Dorgan (D-N.D.), meanwhile, was outraged by
the thought of giant oil companies making money merely for supplying
the nation's energy needs. He claimed they will reap $80 billion in
"windfall profits" and wants the government to confiscate a large share
of that sum through a special federal tax.

But the prospect of
occasional "windfall" profits is one reason corporations are willing to
risk their money drilling wells that may turn out to be drier than Alan
Greenspan's reading list. Take them away, and investors may decide
they'd rather speculate in real estate.

Speaking of real
estate, Americans seem to feel no moral compunction about getting rich
from unforeseen increases in the price of another vital necessity. You
think home sellers in Baton Rouge haven't raised their asking prices in
the last 10 days? You think Dorgan wants to tax their windfall?

It's hard to see why oil companies shouldn't make a lot of money when
the commodity they provide is suddenly in short supply. After all, they
are vulnerable to weak profits or even losses during times of glut.
Back when Americans were enjoying abundant cheap gasoline, the joke was
that the surest way to make a small fortune in the oil industry was to
start with a large fortune.

Oil companies are also subject to
the whims of nature. No one is holding a charity fundraiser for the
businesspeople whose rigs and refineries were smashed by Katrina. No
one will come to their aid if prices drop by half.

Maybe Senator Dorgan can go back and confiscate the windfall profits that Maria Cantwell made in the Internet Bubble, where she made a fortune cashing out to later investors who took a bath.  At least oil companies are creating value with new oil production with their windfall profits:

Calgary"” Penn West Energy Trust is holding
a huge land sale -- looking to sell exploration rights to more than
500,000 hectares of undeveloped territory in Western Canada -- and the
offering has stirred a frenzy among many oil and natural gas companies
hungry for new drilling options.

"Demand is phenomenal," said Moya Little, president of Western
Divestments Inc., the firm brokering the sale. "It's a wide spectrum of
companies, startups, majors, any company that needs to drill."

And more here:

The world's biggest oil producers have significantly
boosted investment in oil exploration for the first time in nearly two
decades.

The Organisation of the Petroleum Exporting Countries,
the cartel controlling 75 per cent of the world's oil reserves, on
Monday revealed its most important members had drilled 7.5 per cent
more wells last year than in 2003 in response to the oil price boom.
Opec's annual statistical bulletin also showed that the number of rigs
in operation within the 11-member cartel rose 18.8 per cent last year
after dropping by almost 6 per cent a year earlier.

What useful purpose is Cantwell using her windfall Internet stock profits for, other than financing her own run for the Senate?  Could the Democratic Party be any more clueless about economics?  Jeez, why is it that our opposition party in this country has to be such a joke?

Technorati Tags:  Economics, Energy

Those of you who wanted a strong federal welfare-nanny-state response to New Orleans, you have got your wish:

It is impossible to over-emphasize the extent to which this area is
under government occupation, and portions of it under
government-enforced lockdown. Police cars rule the streets. They (along
with Humvees, ambulances, fire apparatus, FEMA trucks and all
official-looking SUVs) are generally not stopped at checkpoints and
roadblocks. All other vehicles are subject to long lines and snap
judgments and must PROVE they have vital business inside the vast
roped-off regions here. If we did not have the services of an off-duty
law enforcement officer, we could not do our jobs in the course of a
work day and get back in time to put together the broadcast and get on
the air.

This is not poor federal management - this is exactly-what-you-always-get federal management.  Putting a premium on control and process over results is built into their DNA.  My prediction is that those areas outside federal control and allowed to be accessible to private aid and to individuals who want to, yeah I know its crazy, come into the area and take responsibility for fixing their own house rather than waiting for the feds to do it for them will fair much better in the long run.  More on the federal urge for technocratic control here  and here and here and here.

Something about this reminds me of an observation made over and over in interviews with American soldiers from WWII.  They recounted that in German villages, after a battle, the German citizens were out in the streets, starting to clean up and rebuild before the dust had even settled, while in France, villagers would just sit forlornly in the debris and wait for someone to come do something about it.

Update:  I know you are getting tired of these stories, but here is yet another example of the FEMA folks opposing private relief efforts in the name of "control". 

Starting right after midnight I began receiving calls from FEMA, HHS,
TRANSCOM and other groups whose acronyms I still cannot explain.  LCDR
Kennedy from FEMA called to understand what I was trying to do.  I told
him.  Fifteen minutes later Mimi Riley, Deputy Director from NDMS
called to beg me in a plaintive and exhausted voice not to carry out
this mission.  She had many reasons "“ you need doctors on the plane,
Chicago is too far from their home, how will we track the patients,
this is a military operation and we were not military. 

I
explained to her that we had two doctors on the plane one of whom was a
retired Air Force Doctor who had run the military hospital in Baghdad
after the invasion.  I thought we could trust him to run an airplane of
people from New Orleans to Knoxville.  We were working with NDMS
hospitals in Tennessee and Chicago so they would have a good tracking
system.  (I guess Mimi never heard of the Great Migration of African
Americans from New Orleans and the south to Chicago after the flood of
1927 and during the Depression.  Many people from New Orleans are more
at home in Chicago than Houston. )

Mimi was unmovable.  We
were not military and that was that.  She tried to sound grateful for
our intentions but she was not going to have outsiders help.  I even
offered to GIVE her the planes and the crews and the hospitals and let
her run it through her NDMS system but she would have none of it.  She
asked me at least to delay until noon the next day and I said I would
try.

A good revamp of FEMA after this is all over would put a heavy emphasis on private action and FEMA's role in aiding rather than controlling and limiting this effort.  Unfortunately, I don't expect that to be the outcome.  I fear that large government technocrats and lefties who are always suspicious of private bottom-up action will control the agenda in framing the FEMA debate.

OOPS:  Did I say that technocrats and lefties distrusted anything but top-down federal power.  I forgot the righties as well (from dubya's speech the other day):

It is now clear that a challenge on this scale requires greater federal
authority and a broader role for the armed forces -- the institution of
our government most capable of massive logistical operations on a
moment's notice.

Sounds like Lyndon Johnson and the Great Society.  As a libertarian, I dread the next election.  Two parties competing to see who can enhance federal power more.  Blech.

Yet another:

The patients and staff at Methodist could have been evacuated before
Hurricane Katrina hit. But instead they were condemned to several days of fear
and agony by bad decision-making in Louisiana and the chaotic ineptitude of the
Federal Emergency Management Agency. Some of the patients died.

Incredibly, when the out-of-state corporate owners of the hospital responded
to the flooding by sending emergency relief supplies, they were confiscated at
the airport by FEMA and sent elsewhere.

From the Mises Blog:

For those who maintain that the government "failed" its "mission," I must say
that they are wrong. True, the government with its ham-fisted policies of
blocking relief missions, imposing price controls, and acting in a dictatorial,
but incompetent style, seems to have "failed" in making things better,
especially in the days directly after the storm passed. But, if you understand
that government is a mechanism by which some people impose their will by force
over others, then you would have to admit that the government succeeded and
succeeded beyond its own expectations.

Thus, I leave readers with this question: If you believe that the government
"failed" in the aftermath of Katrina, will the government then have less or more
"authority" when the next disaster strikes? I think all of us know the
answer.

You can always expect government to behave exactly like government. When you
consider your political position, consider whether this institution ought to be
put in charge or disaster relief at all, or the economy, or society, foreign
policy, health care, education, courts, the environment or anything at all.
Katrina and its aftermath is only the latest exhibit in the ongoing historical
documentary in favor of a government-free society

I had similar thoughts here and here.

I have never been a Richard Branson groupie, but I must say for once I am appreciative of his efforts.  Branson has helped to make crystal clear the process by which governments take control of the economy.  The story comes to us via the Mises Economics blog, and starts this way:  According to Branson:

"The big oil companies are making extortionate profits out of the current oil
price," he announced, in his most calculating, populist style.

How anyone who runs the Virgin Megastores can complain about someone else's high pricing is beyond me, but lets let him run a little further:

"The biggest problem with the oil price is the lack of refinery capacity. There
is enough oil for everyone in the world, but the refineries are just not there."

And they are not there because...governments do not allow oil companies to build new refineries.  The government having created the problem, the solution would seem to be for the government to repeal the offending restrictions that caused the problem.  But here is where we get to the great tool of statism:  The problem created by the government is blamed on private enterprise and "market failure" and portrayed as necessitating... more government intervention:

"There has been talk of a windfall tax on big oil companies. Perhaps the
Government should use that money to invest in refinery infrastructure."

Of course, the big oil companies would invest those windfall profits in refining capacity on their own had they been allowed by government, but lets ignore that messy detail.  Ahh, but here is the best part.  Not only does the government now get to invest in refineries, but it gets to do it by channeling the money to the political supporters (i.e. Branson) of those in power, thus cementing their power and control.

According to the paper, Britain's favourite "entrepreneur" aims to put $100
million behind his latest scheme to build an oil refinery for airline fuel. Yes,
the Bearded Wonder is said to be about to launch a new company called - you
guessed it! - "Virgin Oil" within four or five months and is "seeking to attract
funding from other airlines and the Government...."

But, not content with this, our man from the tropical paradise has scented an
easier mark, for Sir Richard has seemingly exploited the crass celebrity-worship
of our New Labour masters, while also playing up to our ineffable Chancellor's
ever present desire to meddle in the markets.

For those of you who have held up Branson as some archetype of entrepreneurship: Stop it.  Here you see a man who is attempting to finance his entry into an industry by getting the government to take money by force from the current competitors in that industry and to give it to him to finance his startup.  I have always suspected Branson of being from the Orrin Boyle school of business and this just proves it.

Technorati Tags:   Economics

I had trouble getting going this morning on work -- I had to drop my son off at school at 5AM for a field trip, and I am sitting in my office refusing to address the pile of work in front of me.  So I skimmed over some of the transcripts from the Roberts confirmation hearings.  He seems like a pretty qualified guy, and since he is conservative I expect to agree with him some and disagree with him other times (which is different from my reaction to liberal judges, whom I disagree with some and agree with at other times).

But from reading the transcripts, I was left with one overriding impression:  While I might agree to confirm Roberts to the Supreme Court, I probably would not, if given the chance, confirm many of the Senators on the judiciary committee to their office.  What a bunch of posturing morons.  Many of them seemed like wind up toys reading questions from their staff that they didn't really understand, and all of them come from the Sean Hannity school of interviews, where in a 20 minute interview the questioner talks for 18 minutes.

Jeff Taylor at Hit and Run:

It is official. The GOP is now exactly in the same position Democrats
were in circa 1993 -- the disconnected, unapologetic party of bloated
federal government. Only demographic trends and the Democrats'
steadfast refusal to evince a lick of sense will keep 2006 from being
1994 in reverse.

I gave my take on why this Katrina disaster does not somehow validate statist technocracy, as has been argued, here and here.  I am willing to admit that Colby Cosh says it better:

So let's just recap briefly, shall we? We've got a million or so human beings
living in a low-lying area created in the first place by government engineers.
The local government of New Orleans, apprised of an approaching storm, summarily
orders everybody out of the city about 36 hours too late without lifting a
finger to provide the means to do so. At the last minute it occurs to somebody
to herd those left behind into a large government-built structure, the
Superdome; no supplies are on hand for its inhabitants, and the structure itself
is rendered--according to the government's assessment--permanently useless. Even
though the storm misses the city, government-built levees fail in unforeseen and
catastrophic ways. Many of the New Orleans cops opportunistically quit their
jobs, many more simply fail to show up for work, others take the lead in looting
supplies from storm-stricken neighbourhoods, and just a few have the notable
good grace to shoot themselves in the head. The federal government announces
that assistance is on its way, sometime; local and state authorities--who have
the clear-cut burden of "first response" under federal guidelines nobody seems
to have read--beg for the feds to hurry up while (a) engaging in bureaucratic
pissing-matches behind the scenes and (b) making life difficult for the private
agencies who are beating the feds to the scene. Eventually the federal
government shows up with the National Guard, and to the uniform indignation and
surprise of those who have been screaming for it, the Guard turns out to have a
troubling tendency to point weapons in the general direction of civilians and
reporters. I'm not real clear on who starts doing what around mid-week, but the
various hydra-heads of government start developing amusing hobbies; confiscating
guns from civilians, demanding that photographers stop documenting the aftermath
of America's worst natural disaster in a century, enforcing this demand by
seizing cameras at gunpoint, shutting down low-power broadcasting stations in
shelters, and stealing supplies from relief agencies and private citizens. In
the wake of all this, there is probably no single provision of the U.S.
Constitution left untrampled, the Posse Comitatus Act appears destined for a
necktie party, and the 49% of Americans who have been complaining for five years
about George W. Bush being a dictator are now vexed to the point of utter
incoherence because for the last fortnight he has failed to do a sufficiently
convincing impression of a dictator.

Apparently FIRE has won another victory, this time against Double Secret Probation at Brooklyn College.

I enjoy many professional sports casually, attending an event or two every year, but the NFL is by far my favorite.  In the pre-season, there was a lot of hype that maybe the long-time hapless Cardinals would be decent this year.  I knew better, even from the pre-season.   Heck, my 8-year-old daughter knew better.

We went to see the last pre-season game against Denver.  In that game, the Arizona starters played for quite a while against the Denver 2nd team, and got beaten up.  Specifically, they could not run the ball and in turn their defense could not stop the run.  So it was no surprise to see them get blasted in their first regular season game against the Giants. 

The problem with the Cards is this:  They have spent the last several years drafting high-profile position players, including spending a jillion 1st round picks on receivers.  Great teams got that way because they invested in their lines - both O and D, even when such picks might be less popular with the fans on draft day.  The Cards have instead focused on drafting "names" who might help sell season tickets in the new stadium.  This neglect is very apparent today.  It doesn't matter how good your position players are if there are no holes for the backs and the QB is getting plowed to the turf on every play.  This is a 5-11 team that is fortunately playing in the NFL's worst division, so they may eek out 7 wins.  You heard it here first.

By the way, if you are an avid football fan, I recommend two sites to you.  The first is Football Outsiders, who have taken a Bill-James-like approach to football stats, rethinking metrics to provide a better insight into what teams really are good.  Make sure to check out their DVOA rankings - basically they compare every teams performance on every play against other teams in the same situation (e.g. 3rd and 8 on their own 45).  The other site is Greg Easterbrook's always entertaining Tuesday Morning Quarterback column, providing large doses of football clear thinking and haiku.

Originally, the environmental movement counted many in its leadership with scientific backgrounds who were thoughtful advocates of improving the environment.  Unlike many "conservatives", as a libertarian that thinks more about being for property rights rather than just "pro-business", I understand that emissions guidelines are critical to the proper functioning of free markets:

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.

Unfortunately, while many thoughtful people still call themselves an environmentalist, reasonable and scientific people no longer run the environmental movement.  Increasingly, the environmental movement has been taken over by
anti-growth and anti-technology Luddites as well as anti-free-market
socialists.

As evidence, I offer what has become an effective thirty-year moratorium on refinery construction. Forget for this post the obvious effect this has on gasoline supply stability, particularly with the EPA-mandated proliferation of special local gasoline blends.  Think instead about the true environmental implication:

The opposition to building new refineries ignores the dramatic
technological improvements that have been made since an oil refinery
was last constructed here in 1976. New, clean refineries emit far less
pollution than older refineries, with new scrubbers and design changes
that dramatically reduce sulfur and other emissions. And at the same
time our ability to model and map emission characteristics and
distribution lets us choose the best locations for new facilities "“
where they will have the least possible impact on people and the
environment.

Refineries are dirty places.  There are thousands of seals and flanges and safety valves that are going to leak some hydrocarbons.  But think on this:  Every single refinery in this country was built with at least 30 year old technology.  Sure there have been upgrades, but much of the core is still there.  I was an engineer at a refinery near Houston for 3 years and we had equipment still operating that was 50 years old, and that was twenty years ago and much of it is still there.

So what does this mean?  Imagine if every car in this country was over 30 years old.  Think of the improvements we have made in fuel efficiency and pollution control over the last 30 years- no cars would possess any of this technology.  The roads are full of cars with modern technology that are fuel efficient and relatively clean because we don't moronically prevent them from being replaced with new ones.

But this is exactly the case with refineries.  The single best, most intelligent thing we could do today for the environment, as far as refineries are concerned, is to let about 10 brand new ones be built with all modern technology, and let these newer refineries compete the older ones into closure.  And who is blocking this single most impactfull environmental step?  Environmentalists, of course.

This is not an unusual issue. I wrote about this same issue with new source review rules and Bush's Clear Skies initiative:

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.

Technorati Tags:  Environment, Economics

In an earlier post, I wrote a defense of price gouging.  Incredibly, one of the best simple summaries of why "profiting off disaster" is actually a good thing comes from the NY Times of all places:

All this, of course, is capitalism at work, moving quickly to get
resources to where they are needed most. And those who move fastest are
likely to do best.

Exactly (by the way, the above is quoted from an Austin Bay post, which was aimed more at criticizing the NY Times for dropping such pro-capitalist sentences from its European version.)

Higher prices for generators and lumber in the disaster area is what tells Home Depot and others that it makes sense to shift lumber and generator inventory to Louisiana from California.  High prices for gas give the following two messages simultaneously and unambiguously to hundreds of millions of people:  "you can make some good money if you can figure out how to get more gas to consumers right now" and "you might want to drive a little less right now". 

Think about that last statement.  Congress has over the last 30 or so years generated numerous energy "plans" and has spent billions of dollars to figure out ways to promote conservation and increased supply.  All of these plans have been expensive failures.  But now, post Katrina, in less than 48 hours, with no one in charge, the market has achieved what Congress could never do.  The least valuable auto-miles will be eliminated, without years of study by Congress to figure out which miles are the least valuable.  The most economic new sources of gasoline will be tapped, without debating in Washington what those sources are.  All bottom-up, with no one ruling the process, by the voluntary self-interested efforts of hundreds of millions of Americans reacting to a simple price signal.

(previous paragraph best read out-loud with someone humming America the beautiful in the background)

Postscript:  Apparently, according to Austin Bay, Texas and more specifically Houston are now the great Satan.   Since I am a white male in my forties who is fairly well-off, still believes in free markets, and was born Houston, Texas, I guess that makes me the ultimate oppressor.

Technorati Tags:  Katrina, Economics

Does this make any sense:  It costs us a lot more, for small transactions, to process an ATM / debit card with the pin pad than a credit card.  Bank of America charges a flat 60 cents per ATM card / PIN pad transaction in our stores but charges 10 cents plus 2% on credit cards.  So, on a typical $5 convenience store purchase, BofA charges $0.60 or 12% to process a ATM / debit card but $0.20 or 4% for the credit card.

I understand the difference between value- and cost-based pricing, but in an economy of scale transaction processing business with a lot of competitors, I would think debit would be cheaper to process, even without the credit risk issues. 

Customers give me feedback that I am a neanderthal for not accepting ATM cards with a pin pad at the registers.  This is the reason.  Its cheaper for me to provide an ATM and then have them pay cash - that way they pay the fee, not me.  Also, their fee is lower.  Even if they only take out $20 and pay a $1.50 fee, they are still only paying 7.5% vs. the 12% typical I would be paying.  If anyone knows a company that offers a better deal, the comment section is wide open!

Update:  A couple of notes based on the comments.  First, I do indeed understand that prices are not cost-based.  The notion that pricing should be cost-based is one of the worst economic misconceptions held by the average person (behind the commerce is zero-sum myth).  When prices don't make sense to me, I don't run to the government asking for Senate hearings so corporations can "justify" their pricing, I just don't buy from them. 

Second, to another commenter's point, most card processing agreements and some state laws prevent merchants from passing card processing fees onto consumers in a discriminatory way - ie they can be built into the general pricing but you can't charge one person one price and another a different price for the same item based on what kind of payment they use.

So, unsurprisingly, Paul Krugman and others are arguing that Katrina is a vindication for large-government liberals  (One would think we would love GWB, who has been a better large-government builder than Clinton, but that is another topic).  Anyway, I think it is worth thinking for a second about the federal government and hurricanes.  I will divide the post into two parts:  Preparedness and Response, and show that in fact, large central-government thinking is at the heart of many of the problems that are being faced.

Disaster Preparedness
I cannot come up with any justification for the US Government taking the lead role in local disaster preparation or protection.  The types of disasters are just too wide and varied:  Tidal waves in Hawaii, earthquakes in LA, mudslides in San Diego, fires in the west, tornados in the plains, hurricanes on the gulf coast, blizzards in the north, etc. etc.  And why would anyone want the feds taking over their local disaster plans anyway?  Do you really want to rely on the hope that a national organization has the same priority on your local risks that you do?  The resources, the knowledge, and the incentive to prepare for emergencies are all local, and such preparation should be done as locally as possible.

The only reason locals would even tolerate federal involvement in disaster preparedness is $$$.  Every local politician loves federal dollars.  And even a hardcore libertarian like myself is probably willing to admit that some of the preparedness investments truly are public goods.  Take levees for example.  I am willing to have them as public goods.  However, no one can convince me that levees whose sole purpose in life is to protect New Orleans are federal public goods.  Why do I need to pay for them?  Why don't New Orleans people bear the full cost of their choice to live below sea level?  My family chooses to live in a place that is relatively free of disasters (though if the Colorado River dries up you can come visit our bleached bones as we are consumed by the desert).  Why should I subsidize people's choice to live in a location that sits in mother nature's cross-hairs?

But beyond my cantankerous libertarian desire not to subsidize you, those of you who live in disaster areas should demand to take responsibility for your own preparedness.  The feds are never going to value your safety the same way you do (as evidenced in part by the 40-year ongoing fight for levee funding in New Orleans) and are never going to understand your local problems like you do.  In fact, the illusion of federal responsibility for disaster preparedness is awful.  It gives irresponsible local authorities an excuse to do nothing and a way to cover their ass.  It creates a classic moral hazard and sense of false security.

I have resisted saying this for a week or so out of respect for the plight of individuals still struggling in Louisiana and Mississippi:  If one divides the world into the ants and the grasshoppers (per the classic fable), New Orleans and Louisiana would make the consensus all-grasshopper team.  They have lived in a stew of bad and corrupt government for years, mixed with a healthy dose of Huey Long-style patronage that created expectations that "you would be taken care of".  Their state officials have for years not only been grasshoppers, but have demanded that they be supported by the ants, and seem lost and confused that the ants didn't protect them somehow from Katrina.

Disaster Response
Its probably good to have a national body that can help focus resources from around the nation onto local regions that have been devastated by some disaster.  But here is the key point.  The federal government itself is never, ever going to have the resources stockpiled somewhere to handle a disaster of this magnitude.  They can't have the doctors on staff, the firemen waiting around, the medical supplies in a big warehouse, a field full of porta-potties ready to deploy, etc. etc.  There is just too much needed, and the exact needs are too uncertain.

What they can do, though, is understand that in an emergency, Americans from all over the country are always willing to help, to volunteer their time or skills or money to aid the victims.  More than anything, the Fed's role needs to be to remove barriers from these resources gettting to the the right places as fast as possible, and to backstop these private efforts with federal resources like the military.  Take the example of refugees.  There are over a million from this hurricane.  Of those, at least 90% will be helped privately, either from their own funds or friends or family or private generosity.  Probably more like 95+%, if you include resources offered by local governments.  The feds role then is to help the remaining 5% find food and shelter.  Note, though, that the problem is not dealing with 100% of the problem, it is dealing with the 5% the leaks through bottom-up efforts, while removing barriers that might stand in the way of bottom-up efforts helping the other 95%.

Unfortunately, the feds don't think this way.  Most feds, including Krugman type large government folks, distrust private and bottom up efforts.  They are top-down technocrats, putting an emphasis on process and control rather than bottom-up initiative.  I wrote much much more about the failed technocratic response to Katrina here.  I think one can argue the reason that the refugee situation for 95% of the people worked well is that these folks quickly got out of the sphere of influence of the FEMA folks -- in other words, they got far enough away to escape FEMA control.  Can you imagine what a total disaster would be occurring if FEMA tried to control the relocation of all 1 million people?  But on the LA and MS gulf coast, FEMA is exercising total control, actually preventing private initiative from helping people, and everyone is the worse for it.  I encourage you to read more in this post about valuing control over results, but I will leave you with this one anecdote that sums up the big government technocratic top-down world Mr. Krugman longs for:

As federal officials tried to get some control over the deteriorating
situation in New Orleans, chaos was being replaced with bureaucratic rules that
inhibited private relief organizations' efforts.

"We've tried desperately to rescue 250 people trapped in a Salvation Army
facility. They've been trapped in there since the flood came in. Many are on
dialysis machines," said Maj. George Hood, national communications secretary for
the relief organization.

"Yesterday we rented big fan boats to pull them out and the National Guard
would not let us enter the city," he said. The reason: a new plan to evacuate
the embattled city grid by grid - and the Salvation Army's facility didn't fall
in the right grid that day, Hood said in a telephone interview from Jackson,
Miss.

"No, it doesn't make sense," he said.

Technorati Tags:  Katrina, Economics

I find I link to Wikipedia a lot for explanations of terms I use that people may not be familiar with (the most recent being "badger game" in this post).  So, to return the favor of all those who have written the Wikipedia, I wrote my contribution, adding an entry on Workamping.  It required about an hours worth of time invested learning their formatting commands and best practices, but it turned out to be pretty easy.  It was kind of interesting to see the other niche areas I have knowledge about but for which there are no articles yet.  I am currently adding and editing content for model railroading.

It was fun to see my brother-in-law's company mentioned in the local paper today.  It was even funnier to see that the newspaper-run web site that screwed up the link to my wife's handbag site did the same with his site.

Eric, my brother-in-law, is the SVP of Sales at email marketing firm Constant Contact.  A while back I was half-convinced that email marketing, at least for quality companies, would die under the spam deluge.  It turns out that this is not the case.  There are many companies and organizations engaging his firm to manage their member communications and customer mailing lists.  I know that there are now several companies I do business with that I have white-listed in my spam filter in order to see their special offers and such (for example, 1-800-contacts does a good job of emailing me right about when I need to reorder, and I always like seeing who is coming to town in the Ticketmaster email).

I missed this story the first time around, but apparently a husband and wife team of lawyers has revived the old badger game, but in a more modern form:

According to a story in the San Antonio Express-News,
husband-and-wife legal partners Ted H. and Mary Schorlemer Roberts received
money in a curious sequence of events. Mary, claiming to seek "no strings"
discreet encounters, would seduce men over an Internet dating service. Ted would
then write the men (in legal documents sometimes typed by Mary) and notify them
that he planned to seek intrusive and public civil discovery to investigate
whether the affair brought forward potential causes of action that were flimsy
at best; the men would pay tens of thousands of dollars for a release and
confidentiality agreement.

Read the full Overlawyered update:  it is fascinating to see just where watchdogs set the ethical bar for lawyers (hint: its really low).  Apparently the Bar Association can't decide if they think this behavior by the Roberts is unethical.  Currently the the attorney who blew the whistle on this scam is being investigated, but the scammers themselves are not under investigation.

Captains Quarters suggested that Bush nominate Janice Rogers Brown for the Supreme Court.  Though it will never happen, I am 100% behind this idea.  I never even heard of her until I started reading statements attributed to her by her opponents that were supposed to convince me of her unfitness for the bench.  And you know what, the more I read, the more I liked her.  Also here.

This was funny, from labor boss John Sweeney (via Cafe Hayek):

Let's require big, profitable companies such as Wal-Mart to provide health care
to their employees instead of passing the cost along to everybody else, and
let's begin to develop a national health care plan that provides affordable
coverage to all Americans.

This is really, really funny.  Notice that in the first half of the sentence, he decries passing health care costs "along to everybody else" and then in the second half advocates a national health insurance plan that would pass individual health care costs onto... everybody else.  Also note that since Wal-mart, despite Mr. Sweeney's description as being big and profitable, has one of the lowest profit margins in the Fortune 100, it would likely have to raise prices in order to... pass these costs along to everybody else.

What Mr. Sweeney is actually frustrated about is that there are a large number of individuals in the labor force that he does not make decisions for and who do not in turn contribute to his personal power.

Cafe Hayek has more.

One of my company's primary businesses is to operate National Forest campgrounds.  We have been told that starting immediately, and for an unspecified period of time, many of the campgrounds in the US Forest Service in East Texas, Louisiana, and Mississippi will be waiving camping fees for the foreseeable future.  We have been told that anyone can camp for free, and that they do not need to prove they are a hurricane refugee, nor do they even have to be from one of the affected states, to get the free camping.  The Texas Campgrounds we operate are now free to campers, but we have been instructed to still charge fees for day use and for purchases (such as for firewood).  The number of states affected may be larger than just these three, but so far the campgrounds we operate in Kentucky, Florida, and New Mexico are still charging fees.  Update:  campgrounds in Alabama, Arkansas and Oklahoma are also included, see below.

Subsidizing camping for refugees makes sense, though I am not sure why the Feds are subsidizing camping for everyone, but I guess they despaired of coming up with a fair way to separate homeless refugees from regular campers, so they made it free to everyone.  I have not been instructed whether the usual 14-day stay limit enforced by the Forest Service is still in effect, but I will assume it is until informed otherwise.  The 14-day stay limit has also been waived.

Update:  OK, here is the release:

FOREST SERVICE WAIVES CAMPGROUND FEES FOR HURRICANE KATRINA SURVIVORS

Washington, Sept.3, 2005 - The USDA Forest Service is taking another
step to assist survivors of Hurricane Katrina by temporarily rescinding
the fee requirement for campgrounds and the 14-day stay limit for
camping on some National Forest System lands in the Southern Region.
The normal fee range is $4.00 to $25.00 depending on the location.

The forests offering free camping include the Kisatchie National Forest
in Louisiana, the National Forests of Alabama, the Ozark-St. Francis
National Forest in Arkansas, the Ouachita National Forest in Arkansas
and Oklahoma and the National Forests and Grasslands of Texas. In all,
106 campgrounds are open without charge to victims of Hurricane Katrina
as they transition through these first weeks of the disaster.

Per comment below, an update on free camping opportunities here.

Technorati Tags:  Katrina, Camping, Recreation

Preface:  Over the years, technocrats have always had a distaste for capitalism.  Their desire has always been the curb to bottom-up disorder and inherent chaos of succesful capitalism with top-down order and control.  In the early half of the 20th centruy, the leading economic argument against capitalism was technocratic-fascist:  That capitalism and competition were wasteful and disorderly and should be replaced with a more orderly state control.  The ultimate legislative result of this thinking was FDR's National Industrial Recovery Act, his emulation of Mussolini-style corporate fascism which was fortunately struck down by the Supreme Court.

While numerous large-scale failures of state economic control have mostly beaten back the technocratic argument, we can still see the fundamental failure of this approach in the last few weeks with the government's handling of the Katrina recovery:

A few days ago I had thoughts on top-down vs. bottom-up approaches to hurricane relief.  After watching the relief effort over the last couple of days, I am more convinced than ever that part of the problem (but certainly not all of it) with the relief effort is the technocratic top-down "stay-in-control" focus of its leadership.  Take stories like this:

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

And this:

A visibly angry Mayor Daley said the city had offered emergency,
medical and technical help to the federal government as early as Sunday
to assist people in the areas stricken by Hurricane Katrina, but as of
Friday, the only things the feds said they wanted was a single tank
truck.
[...]
Daley said the city offered 36 members of the firefighters' technical
rescue teams, eight emergency medical technicians, search-and-rescue
equipment, more than 100 police officers as well as police vehicles and
two boats, 29 clinical and 117 non-clinical health workers, a mobile
clinic and eight trained personnel, 140 Streets and Sanitation workers
and 29 trucks, plus other supplies. City personnel are willing to
operate self-sufficiently and would not depend on local authorities for
food, water, shelter and other supplies, he said.

While turning down offers to help, when everyone agrees not enough is being done, may seem unthinkable, these are actually predictable outcomes from a bureaucracy of technocrats.  Technocrats value process over results, order and predictability over achievement.  More important than having problems fixed is having an ordered process, having everything and everyone under control.  In this context, you can imagine their revulsion at the thought of having private citizens running around on their own in the disaster area trying to help people.  We don't know where they are!  We don't know what they are doing!  They are not part of our process!  Its too chaotic! Its not under control!

Nearly everyone who is in government has a technocratic impulse - after all, if they believed that bottom up efforts by private citizens working on their own was the way to get things done, they would not be in government trying to override those efforts.  But most emergency organizations are off the scale in this regard.  99% of their time, they don't actually have an emergency to deal with - they are planning.  They are creating elaborate logistics plans and procedures and deployment plans.  Planners, rather than people of action, gravitate to these organizations.  So, once a disaster really hits, the planners run around in circles, hit by the dual problem of 1) their beautiful plans are now obsolete, since any good general can tell you that no plan ever survives first contact with the enemy and 2) they are by nature still planners, trying to get order and process underway and create a new updated plan, rather than just getting every possible resource out there fixing the dang problem.

The army has had to deal with this conundrum for years.  How do you have soldiers who are good planners before a battle, but men of action and initiative once the battle is underway?  How do you run a fundamentally top-down organization such that when it matters, individuals will take the initiative to do what needs to be done?  Its a really hard problem.

Unfortunately, I fear that the lessons from this hurricane and its aftermath will be that we need more top-down rules and authority rather than less.  It is the technocrats on the sidelines who are most appalled by the screw-ups, and will demand more of whatever next time.

Here is an example of what I think we should do instead.  Let's accept that we can't plan for everything, can't have every resource stockpiled for an emergency, and that our biggest resource is our private citizenry.  Let's provide rules of engagement for 3rd parties to come into the disaster area and help with minimum supervision.  There might be different rules for trained rescue people and untrained private citizens.  Here is an example of the type of thing that might work better:

Every private citizen with a boat larger than X and a draft less than Y who would like to help can bring their boat and three days food and clothing to such and such boat ramp.  All municipal firefighters and rescue teams that want to help, come to such and such building, check in, and we will assign you a sector.  Rescue crews need to bring their own food, equipment, and waterproof paint to mark the buildings you have searched.  Then, go out to the boat ramp, find a boat and driver in the pool there, and go.  FEMA will bring in a fuel truck to refuel boats and will indemnify all boat owners for damages.  All survivors found should be brought back to the dock, and ambulances will be standing by.

Update: OK, I know some of you don't believe that this is a control issue for the bureaucrats.  Well, here is more evidence, from the Red Cross web site, via Instapundit.

Hurricane Katrina: Why is the Red Cross not in New Orleans?

• Access
  to New Orleans is controlled by the National Guard and local
  authorities and while we are in constant contact with them, we simply
  cannot enter New Orleans against their orders.
• The state Homeland Security Department had requested--and
  continues to request--that the American Red Cross not come back into
  New Orleans following the hurricane. Our presence would keep people
  from evacuating and encourage others to come into the city.

Update #2:  Still reluctant to believe that control over the process is more prized by bureaucrats than results?  Try this, from CNN and via Instapundit:

Volunteer physicians are pouring in to
care for the sick, but red tape is keeping hundreds of others from
caring for Hurricane Katrina survivors while health problems rise.

Among
the doctors stymied from helping out are 100 surgeons and paramedics in
a state-of-the-art mobile hospital, developed with millions of tax
dollars for just such emergencies, marooned in rural Mississippi.

"The
bell was rung, the e-mails were sent off. ...We all got off work and
deployed," said one of the frustrated surgeons, Dr. Preston "Chip" Rich
of the University of North Carolina at Chapel Hill.

"We have
tried so hard to do the right thing. It took us 30 hours to get here,"
he said. That government officials can't straighten out the mess and
get them assigned to a relief effort now that they're just a few miles
away "is just mind-boggling," he said....

It travels in a convoy that includes
two 53-foot trailers, which as of Sunday afternoon was parked on a
gravel lot 70 miles north of New Orleans because Louisiana officials
for several days would not let them deploy to the flooded city, Rich
said....

As they talked with
Mississippi officials about prospects of helping out there, other
doctors complained that their offers of help also were turned away.

A
primary care physician from Ohio called and e-mailed the U.S.
Department of Health and Human Services after seeing a notice on the
American Medical Association's Web site about volunteer doctors being
needed.

An e-mail reply told him to watch CNN that night, where
U.S. Health and Human Services Secretary Michael Leavitt was to
announce a Web address for doctors to enter their names in a database.

"How crazy is that?" he complained in an e-mail to his daughter.

Dr.
Jeffrey Guy, a trauma surgeon at Vanderbilt University who has been in
contact with the mobile hospital doctors, told The Associated Press in
a telephone interview, "There are entire hospitals that are contacting
me, saying, 'We need to take on patients," ' but they can't get through
the bureaucracy.

"The crime of this story is, you've got millions
of dollars in assets and it's not deployed," he said. "We mount a
better response in a Third World country."

Update #3:  Yes, there's more.  The Salvation Army has also been blocked, and the reason?  Their efforts did not fit snugly into the technocrats plans (via Cafe Hayek):

As federal officials tried to get some control over the deteriorating
situation in New Orleans, chaos was being replaced with bureaucratic rules that
inhibited private relief organizations' efforts.

"We've tried desperately to rescue 250 people trapped in a Salvation Army
facility. They've been trapped in there since the flood came in. Many are on
dialysis machines," said Maj. George Hood, national communications secretary for
the relief organization.

"Yesterday we rented big fan boats to pull them out and the National Guard
would not let us enter the city," he said. The reason: a new plan to evacuate
the embattled city grid by grid - and the Salvation Army's facility didn't fall
in the right grid that day, Hood said in a telephone interview from Jackson,
Miss.

"No, it doesn't make sense," he said.

Update #4:  I can't help myself.  Here is another:

The Fox News Channel's Major Garrett was just on my show extending the
story he had just reported on Brit Hume's show: The Red Cross is
confirming to Garrett that it had prepositioned water, food, blankets
and hygiene products for delivery to the Superdome and the Convention
Center in the immediate aftermath of the hurricane, but were blocked from delivering those supplies by orders of the Louisiana state government, which did not want to attract people to the Superdome and/or Convention Center.

Update #whatever-I-am-up-to: Welcome Instapundit readers!  I have posted a follow-up on big government and disaster preparedness here.

Technorati Tags:  Katrina, Economics

I don't want to be too much of a Monday morning QB, but this sure is a missed opportunity:

The city declared a mandatory evacuation.  Why then did it stick tens of thousands in the Superdome, right in the middle of town, rather than evacuate them with the assets they already owned in quantity?

Some critics are calling it a racist plot.  If we rely on Coyote's Law, the most likely answer is incompetence and stupidity.

Update:  Junk Yard Blog has extensive reports on unused busses, including more sattelite imagery, local evac plans, reports from locals, etc.  Just keep scrolling down the page

Thanks to Big Cat Chronicles for the banner images.

Marginal Revolution has an incredible roundup of FEMA and disaster-preparedness articles, many from a libertarian point of view.