Archive for March 2007

Your Government at Work


20,000 FEMA trailers panic-purchased after Katrina, now (maybe) up for sale.  Via AP

We Should Just Say "Thanks" Instead

Don Boudreaux argues that we should not retaliate vs. countries who subsidize exports to the US.

I know of no cases in which a country was impoverished, or even

measurably damaged, by its refusal to "retaliate" against alleged

instances of foreign subsidies. This fact, combined with the ease of

abusing the ability to accuse foreign rivals of being subsidized,

counsels strongly in favor of our own government turning a deaf ear to

such accusations.

I have never, ever, ever understood how the average person in the US could actually get mad that a foreign government taxes its people for the sole purpose of subsidizing lower prices in the US.  I have the same reaction to "dumping" accusations, where folks get upset that some foreign company is allegedly selling its products in the US below cost.   Instead of complaining, I think we should just say "thanks."  And maybe "cha-ching!"  Nothing like getter over on the taxpayers of China or Japan. 

I'll Make a Bet

Via Hit and Run:

A blistering Justice Department report accuses the FBI of
underreporting its use of the Patriot Act to force businesses to turn
over customer information in terrorism cases....The report, to be
released Friday, also says the FBI failed to send follow-up subpoenas
to telecommunications firms that were told to expect them.....

the FBI underreported the number of national security letters it issued
by about 20 percent between 2003 and 2005..... In 2005 alone, the FBI
delivered a total of 9,254 letters relating to 3,501 U.S. citizens and
legal residents.

The Patriot Act....allows the FBI to issue national
security letters without a judge's approval in terrorism and espionage

Here is my bet:  Even more interesting will be a review of these letters, if that is ever allowed, to see how many really had any burning relation to national security.  My guess is that many of these are being used in drug cases and financial cases that only the most creative FBI agent could twist into a national security situation.

New Domains

One of the things I didn't really expect when I started blogging was the near flood of press releases I would get from across the political spectrum.  One I got this morning was called "NEW PROPOSED .XXX WEB DOMAIN LEGITIMIZES SMUT."  I had a couple of thoughts reading this release:

  • Um, pornography is legal.  I say that only because the whole press release is written in a tone that implies terrorism or serial killing is being facilitated.  In addition to being legal, it is also a very large business on the web and frankly has been an innovator in many areas of e-commerce.  One may find the business unsavory or distasteful, but it is still a legal enterprise.
  • I would think that encouraging a separate domain extension for hard core pornography would be something that pornography's opponents would support, sort of like getting the adult film store out of the suburban mall and into the red light district.   I find that internet filter software (which I have on my kids accounts) works pretty well, but I am pretty sure that filtering out an entire domain extension would be a layup.

Comments closed to avoid the inevitable flood of spam porn links.

It's Not Done 'till Firefox Won't Run

I wrote previously that I think Vista, in its current state, is inferior to Windows XP (particularly for businesses -- Directx 10 will make Vista a must for gamers).  For my desktop computers, I build them myself and can still get Windows XP OEM through NewEgg.  Unfortunately, for my kids new laptop, I had no choice but Vista.  I have not been very happy.  Here are my results so far.

  1. It is way slower than XP, even on a fast dual-core Intel machine with a Nvidia 7900 graphics card.  You may have thought that the reboot and shut down process could not have gotten slower - WRONG!  Shutdown alone takes forever.
  2. Many machines being sold today with Vista are not fast enough to really run it.  In particular, if your laptop is more than a year old or you paid less than $1700 or so for it, it is probably not going to do the job
  3. Um, its pretty
  4. Firefox will not run reliably.  It will install, and run once, and then it will give an error if you try to run it again.  It does not uninstall fully, and once (I tried to install and remove several times) it did not even show up in the uninstall menu
  5. Unlike with XP, networking did not work right off the bat with Vista.  I had to do a lot of fiddling in menus that the average user wil never find or understand to get it running.
  6. Of course, as is usual, Microsoft has felt the need to yet again totally reorganize control panel and the right-click-on-the-desktop menu.  I am sure some day the new organization will seem natural, but for now its just a gratuitous change with no apparent benefit

If at all possible, I advise you to wait for Service Pack 1, and for Moore's Law to let average computers catch up with Vista's requirements.  And don't even think about upgrading if you have old printers, scanners, and/or oddball devices you need to hook up -- there are very few Vista drivers out there for legacy equipmet

I Was Sortof Right

A couple of years ago I made this prediction:

We will soon see calls to bring a tighter licensing or
credentialing system for journalists, similar to what we see for
lawyers, doctors, teachers, and, god help us, for beauticians
.  The
proposals will be nominally justified by improving ethics or similar
laudable things, but, like most credentialing systems, will be aimed
not at those on the inside but those on the outside.  At one time or
another, teachers, massage therapists, and hairdressers have all used
licensing or credentialing as a way to fight competition from upstart
competitors, often ones with new business models who don't have the
same trade-specific educational degrees the insiders have....

Such credentialing can provide a powerful comeback for industry insiders under attack.  Teachers, for example, use it every chance they get to attack home schooling and private schools,
despite the fact that uncertified teachers in both these latter
environments do better than the average certified teacher (for example,
kids home schooled by moms who dropped out of high school performed at
the 83rd percentile).  So, next time the MSM is under attack from the blogosphere, rather than address the issues, they can say that that guy in Tennessee is just a college professor and isn't even a licensed journalist.

Well, despite all efforts by John McCain, we still have free speech on the blogosphere.  But I was almost right, because another country is considering such a proposal -- In France:

The government has also proposed a certification system for Web sites,
blog hosters, mobile-phone operators and Internet service providers,
identifying them as government-approved sources of information if they
adhere to certain rules. The journalists' organization Reporters
Without Borders, which campaigns for a free press, has warned that such
a system could lead to excessive self censorship as organizations
worried about losing their certification suppress certain stories.

I'm Confused. Why Is This Illegal?

Apparently there was another payola bust.  I'm confused.  Why is this illegal?  I guess in the 1950's I might understand it, when there was only one way to listen to music anywhere outside your home.  But today there are about 20 different ways, including several flavors of radio.  If a radio station overplays the same song to the point of insanity, just listen to something else. 

Paying for placement in overcrowded distribution channels is routine in many industries and certainly not the subject of federal law.  If you don't believe me, try taking your new brand of potato chips over to Safeway and try to get on the shelf.   Now, I know folks would argue that this contributes to Safeway's selection being bland.  But that is also why new competitors, like Whole Foods, have emerged to serve folks who don't like Safeway's selection of products.

By the way, does anyone think its funny that record producers are in the news for paying for play at the same time they are in the news for charging for play?

Update:  More on charging for play:

On March 1, 2007 the US Copyright Office stunned the Internet radio
industry by releasing a ruling on performance royalty fees that are
based exclusively on the number of people tuned into an Internet radio
station, rather than on a portion of the station's revenue. They
discarded all evidence presented by webcasters about the potentially
crippling effect on the industry of such a rate structure, and
rubber-stamped the rates requested by the RIAA (Recording Industry
Association of America).

Under this royalty structure, an
Internet radio station with an average listenership of 1000 people
would owe $134,000 in royalties during 2007 -- plus $98,000 in back payments for 2006. In 2008 they would owe $171,000, and $220,000 in 2009.

Happiness Is: Being Allied With Neither Political Party, And So Not Having to Comment on Ann Coulter

So I won't.  Which doesn't mean I haven't found all the squirming on multiple web sites immensely entertaining.  Jeff Goldstein, as is often the case, is perhaps the most entertaining.  While Jeff will never be invited to speak at a MoveOn rally, on the other hand it is about as easy to lump him in with Pat Robertson as to group "Little House on the Prairie" into a double feature with "Team America World Police."

Though I am not convinced it is an especially apt comparison for the Coulter remark, I did particularly note one observation.  Goldstein's commenter said, in part, this:

I am reminded of the whole "niggardly" thing.  Of course, we KNOW what
it means.  But, you cannot really use it unless you want to be
misunderstood and have your message distracted.

Jeff responded:

This is, of course, quite stunning and more than a bit dangerous to the cause of liberalism.

I mean, look again at what Steve just argued:  "Of course, we KNOW what
it means.  But, you cannot really use it unless you want to be
misunderstood and have your message distracted."

Translation: We know what it means, but we must assume nobody else does.  Therefore, their misunderstanding is to be countenanced and massaged"”which, in effect, empowers ignorance
rather than treating it as ignorance.  It is the perfect example of the
intellectual welfare state:  rather than working to force people to
break out a dictionary, we'd rather provide them with succor because,
well, they can't really be expected to learn things on their own,
right?  Those kinds of people?

I don't read Protein Wisdom all the time, so I am not sure if "intellectual welfare" is a term Goldstein uses a lot.  I coined it independently a few years ago, when discussing social security.

Beware of Prosecutors

Beware of prosecutors:  they don't like to lose.  Scooter Libby today became at least the third high-profile person in recent memory to be successfully prosecuted for lying about something that wasn't a crime. 

Bill Clinton, Martha Stewart, and Scooter Libby were all prosecuted for perjury charges that were really tangential to the original case.  In all three cases, prosecutors, hot to not be left empty-handed when pursuing a high-profile target, fell back on prosecuting perjury charges related to non-crimes once their core case fell apart.  Only Bill Clinton escaped jail, escaping with what was effectively jury nullification -- no one seems to deny he was guilty of perjury, but his jury (the Senate) couldn't bring itself to impose a ridiculously harsh penalty for lying about something entirely unrelated to any crime and which in a reasonable world would not even have been allowable questioning under oath. 

Am I Anti-Science?

I promise, cross my heart, this is my last post on climate change for a while.  I thought my series of posts last week about the funny math of carbon offsets was the last, but Joe Miller at Catallarchy wrote something that caused me some introspection:

Just one caveat, though: I'm really, seriously, profoundly uninterested
in your skepticism about man-made global warming. Personally, I think
that the debate is just about as fruitful as a discussion of the
relative merits of evolution and Genesis as models of the origins of
the universe. It's called scientific consensus, people. You seem to
like it well enough for every other subject. And even if that
overwhelming scientific consensus turns out to be wrong, it's not like
a debate here is going to help with that. When scientists are wrong,
it's up to, you know, like, other actual scientists to settle
the question. A bunch of non-scientists googling studies that say what
we like them to say isn't accomplishing much, really.

Certainly I have always been in favor of facts and science over hysteria.  I criticized the rampant breast implant litigation in the face of science that showed no real long-term harms.  Ditto vaccinations.  So am I being a Luddite by, as an amateur, being skeptical of the scientific "consensus" on global warming?  Certainly climate change hawks want to paint my positions as "holocaust denial."  I had a few thoughts:

  • For what it is worth, I have actually read much of the 2001 IPCC climate report (not the management summary, which is a worthless political document, but the report itself).  Courtesy of, who has posted some of the 2007 report, I have read key parts of that report as well.  So I have at least informed myself beyond random Google searches.  My original university training was as a scientist, and later an engineer, though neither in climate (physics and mechanical engineering).
  • The media has been known to declare a consensus ahead of its actual existence.  One example that comes to mind is a recent letter that a number of economists wrote supporting a Federal minimum wage increase, which much of the media spun into a "consensus" among economists that a minimum wage increase would be desirable and would not reduce employment.  I don't know Mr. Miller, but my bet is that some of the folks at Catallarchy might dispute this particular scientific consensus.
  • To even imply that there is a single consensus on something as complex and multi-faceted as anthropomorphic global warming is facile.  I will take the movie "An Inconvenient Truth" as a fair representation of what the media perception of the consensus is  (the IPCC report actually does not agree in full, but we will get there in a minute).  Taking that movie as our straw man, the "consensus" or hypothesis is as follows:
  1. The world has been warming for a century, and this warming is beyond any historical cycles we have seen over 1000 years  (ie, the hockey stick)
  2. The last century's warming is almost all due to man's burning of fossil fuels and other releases of greenhouse gasses
  3. In the next 100 years, CO2 produced by man will cause a lot more warming
  4. Positive feedbacks in the climate, like increased humidity, will act to triple the warming from CO2
  5. The bad effects of warming greatly outweigh the positive effects, and we are already seeing them today (polar bears dying, glaciers melting, etc)
  6. These bad effects, or even a small risk of them, easily justify massive intervention today in reducing economic activity and greenhouse gas production

I believe this is a mostly fair representation of the media reporting of the scientific "consensus", with the exception that the media never really goes into step #4, and assigns all the blame for 6-8 degree temperature rise forecasts to CO2.  But this split between #3 and #4 is important to understand the science at all, and is included in the IPCC report, so I will make it. 

This is a complicated string of logic, with multiple assumptions.  I hope you see why declaring a scientific consensus on all points of this hypothesis is facile.  So where is there a scientific consensus on all of this?  My interpretation from the recent IPCC report and other sources is:

  1. The world has been warming for a century, and this warming is beyond
    any historical cycles we have seen over 1000 years  (ie, the hockey
    There is a strong consensus on the first half.  We can argue about urban heat island corrections and ground vs. satellite all day, but the earth has pretty clearly warmed for a hundred years or so, after cooling before that.  The second half of the proposition is trickier.  The 2001 report relied on the Mann hockey stick to make the point that the 20th century is not just warmer but uniquely warmer.  I sense the 2007 report backing off this -- the Mann analysis has a lot of problems, and ongoing climate research continues to point to the great variability and cyclicallity of climate over time.  There is too much historical evidence, for example, of a warm middle ages for Mann to dismiss it with a few tree rings.
  2. The last century's warming is almost all due to man's burning of fossil fuels and other releases of greenhouse gasses.   The 2001 IPCC report implied about half of the century's warming was man-made.  The new report seems to put more of the blame on man.  My sense is this will move over time back to half and half -- the evidence today of increased solar activity is becoming too strong to ignore as a cause along with man-made CO2.  However, I recognize right now that I am out of step with the IPCC and perhaps the "consensus" on this.
  3. In the next 100 years, CO2 produced by man will cause a lot more warming.  CO2 production by man will cause more warming.  How much is the subject of models, which any economist or businessperson can tell you are notoriously flaky.  However, here is one fact that is part of the scientific consensus but you never hear in the media -- the relationship between atmospheric CO2 concentration and warming is a diminishing return.  In other words, the next doubling of CO2 in the atmosphere will have less impact on temperatures than the last doubling.  At some point, the effect of CO2 maxes out, and further increases in CO2 have no effect on temperatures.  My reading of the newest IPCC seems to imply that if the models predict about 6 degrees of warming over the next 100 years, of which about 2 is directly from CO2, while the rest are from positive feedbacks (discussed next)
  4. Positive feedbacks in the climate, like increased humidity, will act to triple the warming from CO2.  OK, this strikes me as the key point in the scientific consensus.  Hypothesized positive feedback loops in the climate are what take the IPCC models from results that are warmer but probably manageable to results that appear catastrophically warmer.  Their models assume that as the world warms a bit from CO2, other effects take hold, and the world will warm even more.  For example, they posit that if the world is warmer, more water evaporates into water vapor in the atmosphere, which is a strong greenhouse gas, which accelerates the warming.  I think it is absurd to say there is a consensus on this point, which is adding 2/3 or more of the warming.  The notion of positive feedbacks in nature offends my intuition --  there are just not that many such processes in nature, or else nothing would be stable -- but then again Einstein's intution was offended by quantum mechanics and he was wrong.  However, using the IPCC's own findings (starting in section 8.6 here) the IPCC admits to there not even being a consensus on the sign (ie if it is positive or negative feedback) of what they describe as by far the strongest feedback process (cloud cover)!  I don't know how you can declare a consensus if you admit you don't even know the sign of the largest effect.
  5. The bad effects of warming greatly outweigh the positive effects,
    and we are already seeing them today (polar bears dying, glaciers
    melting, etc) 
    It would be absurd to declare a consensus here because no one has really done much definitive work.   Most folks, including me, presume that since substantial warming would take us beyond the temperature range for which our bodies and our civilization has been adapted, the net effect would be bad.  But there are positive offsets to the negative effects (e.g. oceans rising) that you never really hear about in the press (longer growing season, for one) but which are in the IPCC report.  Climate scientists themselves have admitted there is no consensus on what effects that we are seeing today are due to warming.  Part of Antarctica (about 2%) shown in Al Gore's movie is warming, but most scientists now think that this may be due to cyclical variations in ocean currents, while most of Antarctica has actually been cooling of late.  Greenland is warming, but glaciers may not be receding as fast as once feared.  Polar bear populations, despite reports to the contrary, are increasing.
  6. These bad effects, or even a small risk of them, easily justify
    massive intervention today in reducing economic activity and greenhouse
    gas production. 
    Many climate scientists express an opinion on this, often definitively, but if one argues that I am not qualified to test the consensus as a layman on global warming, then certainly climate scientists are far from qualified in drawing any conclusions on this topic.  The effects of a worldwide rollback on CO2 production at current technologies could be catastrophic, particularly for a billion people in India and China just on the verge of emerging from poverty.  Even in some of the most dire forecasts for warming, it is a very open question with little consensus as to whether a cooler but poorer world is better.  In fact, one can argue that even the pious Kyoto-signing countries are voting with their actions, rather than their words, on this issue, since they have resisted taking the hard economic steps necessary to meet their targets.

OK, that is more than I meant to write.  My point is that the word consensus is an absurd word to apply to the topic of anthropomorphic global warming.  Some things we understand pretty well (the world is warming, in part due to man-made CO2) and some we understand less well (the effect of feedback loops).  And some issues, like whether the harms from climate change are worth the cost of avoiding them, are entirely outside the purview of climate science.

Update: Strata-Sphere has a funny bit of related snark:

Global warming on Neptune's moon Triton as well as Jupiter and Pluto, and now Mars has some scratching their heads over what could possibly be in common with the warming of all these planets....

I still don't know. Could there be something in common with all the
planets in our solar system that might cause them all to warm at the
same time?

On a serious note, he has some nifty graphs of historic earth temperature reconstructions (including Mann) vs. sunspot activity reconstructions (sunspot activity generally being a proxy for solar output).  Short answer:  Sunspot activity at historical highs, at the same time as historical highs in temperature. 


Kevin Drum, six months ago:

THE BEST CARE ANYWHERE....Thanks to innovations introduced
during Bill Clinton's administration, VA healthcare is now among the
nation's best. It's cheaper than either private healthcare or Medicare,
the quality is top notch, and it operates according to strict
performance standards. Sounds like a great model, doesn't it?

That quality government management and incentives system will do it every time.

Folks on the left are already gearing up to blame the current Walter Reed mess on the current administration, thus scoring points off Bush (fine with me) while not having to question the inherently poor quality of government-managed health care systems.

What If They Had Asked the Question This Way?

A CBS poll says about 2/3 of Americans think the government should provide health care for all.  Many in the poll think the government would suck at it (about half said the government would do a worse job, and less than a third think it would do a better job). 

Given how important health care is to people, I find it hard to reconcile these two opinions.  If I had to guess, most people who say they are for government health care implicitly imagine a two-tier system, where they would still get the good care they have today, but poor people who people imagine are without care today (actually they tend to be without insurance, not without care) would get a suckier second tier of health care run by the government.

But I don't think this is a realistic view of what they will get with universal health care.  No government-run universal health care system is ever going to be politically stable with two tiers.  You are going to have to end up with a system that some poor people get better care but the rich and middle class end up with a worse system.  That is the reality of every government run health care system in the world.

I would love to see the answer to this poll question:

"Would you support a system of government-run universal health care that guaranteed health care access for all Americans, but would result in you personally getting inferior care than you get today in terms of longer wait times, more limited doctor choices, and with a higher probabilities of the government denying you certain procedures or medicines you have access to today."

Statistical Insanity

Congrats to Peter Austin for making a great point about medical research, particularly the advocacy-driven risk research we see in the media every day:

PEOPLE born under the astrological sign of Leo are 15% more likely
to be admitted to hospital with gastric bleeding than those born under
the other 11 signs. Sagittarians are 38% more likely than others to
land up there because of a broken arm. Those are the conclusions that
many medical researchers would be forced to make from a set of data
presented to the American Association for the Advancement of Science by
Peter Austin of the Institute for Clinical Evaluative Sciences in
Toronto. At least, they would be forced to draw them if they applied
the lax statistical methods of their own work to the records of
hospital admissions in Ontario, Canada, used by Dr Austin.

Dr Austin, of course, does not draw those conclusions. His point was
to shock medical researchers into using better statistics, because the
ones they routinely employ today run the risk of identifying
relationships when, in fact, there are none. He also wanted to explain
why so many health claims that look important when they are first made
are not substantiated in later studies.

Thanks again to TJIC for the link

Finally, Someone States the Obvious

The media and many politicians have an inventive system that drives them to take the most pessimistic possible interpretation of every economic event (the media to sell papers, politicians to panic us into giving them more control of the economy).   Chinese ownership of US debt securities is one such issue that everyone seems to be in a tizzy about.  Thanks to Don Boudreaux for finally stating the obvious:

In fact,
holdings of U.S. debt arguably make these governments "hostage to the
economic decisions being made in Washington."  The Fed, after all,
could monetize this debt, inflating away its value.  Or Uncle Sam could
repudiate this debt, or unilaterally change its terms in ways
unfavorable to holders.  Or you and your colleagues could implement
economically disastrous policies that drive up long-term interest rates
and, hence, drive down the value of outstanding treasuries.

Finally!  All you have to do to understand this is reverse the situation.  If the US government owned a hundred billion dollars of Venezuelan government bonds, would this really give us power over Hugo Chavez?  Or would it, more likely, given him more power over us, at least in terms of circumscribing our actions?

Time for Francisco d'Anconia

Update from Venezuela:

Even Chavez's own energy officials are getting nervous "¦

Last week, for the 10th time, Chavez announced his plan to
confiscate four Orinoco Belt extra-heavy-oil projects run by six
Western companies"¦

Rather than allow Chavez's state oil company to become the
majority partner in its investment, Exxon could"¦ just walk away - a
possibility that's keeping Venezuelan energy officials up at night.

Rather than let its Cerro Negro operation be turned into a
Chavista workers collective, with Exxon there to pay the bills and
provide the technology and its workers suddenly state employees, Exxon
could just pull out"¦

Courtesy of TJIC, who suggests a similar approach but from a different fiction source.

It's Hard To Be A Libertarian

Sometimes, it is difficult to figure out what the libertarian position on an issue should be, because it is so muddled with a history of government interference.

One such issue is the bill that passed the House (but is unlikely to become law) called the "Employee Free Choice Act."  The bill eliminates the requirement for secret ballot elections for forming unions, in favor of card checks (basically similar to signing a petition).  On its face, it is easy to laugh at the hypocrisy of Democrats, who are the first to claim voter intimidation even in secret ballot elections.  In no other context would the Democrats ever support such a voting change, but many in the party are convinced unions need a boost, and this is their solution.

This is the second pay-off to unions the Democrats have put forward.
Yesterday the House passed HR 800, the curiously misnamed "Employee
Free Choice Act" by a margin of 241-185. This act approves the use of
the very public card check method of certifying a union instead of
using a secret ballot.

As I mentioned here,
that opens the entire process to intimidation - on both sides. A secret
ballot was how it was formerly done and should have been preserved. I
can't imagine how anyone can make the argument, with a straight face,
that the card check system

But wait!  What is the individual rights position here?  Freedom of association means the government should not dictate to a group of people on how they organize.  If a group of even two people want to get together at GM and call themselves a "union" and approach management to negotiate, they should be able to have at it.  Of course, they'll probably get laughed out of the room, but it is odd the government should dictate how they can organize.  In a free society, this is how things should work -- any number of employees should be able to organize themselves.  If they get enough people, then they will have enough clout, perhaps, to be listened to by management.

Unfortunately, we don't live in a free society, and the term "union" comes with a lot of legal baggage.  Recognized unions are granted certain legal powers and rights that an average group of self-organized folks don't.  For example, they are the only private organizations in this country that I know of that have taxation power, and the power to demand absolutely that certain monies be withheld from employee paychecks (even of employees not in the union) and given to them.  Perhaps more importantly, companies can't ignore them - they have to negotiate with a recognized union.  Unions also have informal powers.  For example, the legal system tends to tolerate a lot of violence and physical intimidation by union members (in strikes and such) that it does not tolerate in other contexts  (seventy-five years ago, the situation was reversed and the system tolerated a lot of company violence against workers).

So what do you do?  I have the same problem with immigration policy -- I think a free society would allow free immigration, but we are not a free society and have a myriad of government handouts we just can't afford to give to everyone who shows up at the door.  Anyway, in the case of this bill, given the power we have granted to unions, I don't think the secret ballot election requirement is too unreasonable.  Or maybe we could offer a compromise:  Democrats can get card-check voting in unions as long as they allow the same system for presidential voting in Florida and Ohio.

TerraPass Business Model

I don't have any inside information on TerraPass, the company made famous by providing the $399.75 certificates that offset all your emissions for a year.  I do know that the numbers don't seem to add up, as I wrote here and Protein Wisdom similarly wrote here.

However, I thought about their business model some (since I have been on a role with new business models) and it strikes me that it is brilliant.  Because I am almost positive that they are (legally) reselling the same carbon credits at least three times!

Think of TerraPass not as a company that hands out little certificates, but as a business who makes money through energy projects.  These projects generate electricity without producing CO2 (e.g. wind), or in the case of their cow-poop projects they generate electricity by converting a very bad greenhouse gas (methane) to a less bad one (CO2).

So, for each Kw they generate, there is a certain number of tons of greenhouse gas emissions avoided vs. if they had generated the same Kilowatts with fossil fuels.  (How many tons depends on what fuel you assume the power would have been made with -- my guess is they assume coal, since that gives them the biggest offset, though in fact the marginal fuel in most areas is natural gas in peaking turbines, which produces a lot less CO2).

Anyway, they can claim some number of tons of avoided CO2.  But I am pretty sure they are reselling these abated tons at least three times!  Here is how I think it works:

  1. Their energy projects produce electricity, which they sell to consumers.  Since the
    electricity is often expensive, they sell it as "CO2-free"
    electricity.  This is possible in some sates -- for example in Texas, where Whole Foods made headlines by buying only CO2-free power.  So the carbon offset is in the bundle that they sell to
    electricity customers.  That is sale number one. 
  2. The company most assuredly seeks out and gets
    government subsidies.  These subsidies are based on the power being
    "CO2-free".  This is sale number two, in exchange for subsidies. 
  3. They still have to finance the initial construction of the plant, though.  Regular heartless
    investors require a, you know, return on capital.  So Terrapass
    finances their projects in part by selling these little certificates that you
    saw at the Oscars.  This is a way of financing their plants from people
    to whom they don't have to pay dividends or interest "”just the feel-good
    sense of abatement.  This is the third sale of the carbon credits.

All, by the way, entirely legal, though perhaps not wholly ethical if you really care about reducing CO2 emissions and not just being able to cover your ass to smugly deflect criticism.  This is actually a brilliant way to finance electricity projects, one that Enron wasn't even smart enough to dream up.

And there is nothing wrong with buying these certificates.  The International Star Registry has sold thousands (millions?) of people on the idea that they can have a star named after themselves.  Of course, no actual official body that names stars accepts these as real names, but that's OK, the certificate kind of makes a cool graduation gift (friends of ours did the ISF thing for my father-in-law after he died and my wife really liked it).

Postscript:  By the way, this ignores the ability of such a company to resell the same credits to multiple certificate holders, since the whole CO2 credit thing is pretty damn hard to audit and no one is even trying.  I don't think these guys are doing so, but someone will think of it.

I am So Disapointed

Maggies Farm reports that their site is banned in China.  I tested Coyote Blog at the same site they used.  And much to my chagrin, I am available in China.  I guess I am not trying hard enough. 

Is Jury Nullification Libertarian?

A while back, at our local libertarian discussion group, we spent an evening discussing centralization vs. decentralization of government, and whether one or the other better protects individual liberties. 

Many libertarians argue for decentralization.  The anarchists in the room will argue for the ultimate decentralization, all the way to the individual level, essentially voiding the concept of government altogether.  Others who are more amenable to some government argue for decentralization because it tends to allow for competition, with citizens voting with their feet and wallets for more favorable tax and regulatory regimes.

On the other hand, the US provides historical examples of the benefits of federalism in protecting individual rights.  Certainly the abolition of slavery and later of Jim Crow laws were a positive outcome from the feds, as are the enforcement of Bill of Rights protections on the states.  I would personally love to see a federal system like our own with all legislative power held as locally as possible, but with a federal government whose main purpose domestically was not taxation/regulation/legislation but instead enforcement of a more robust Bill of Rights and nullification of state and local law that violated protected individual freedoms.

Anyway, one topic related to decentralized authority was jury nullification.  Jury nullification is the ability for juries to rule on the law, rather than guilt or innocence.  An example might be "the jury thinks Joe is guilty of smoking pot, but we don't think smoking pot should be illegal, so we are going to let Joe go."  Most state law technically does not allow juries to rule on the law itself, but as a practical matter there is no way juries can be prevented from doing so  (Prosecutors really go non-linear over jury nullification -- I remember Patterico had a long series inveighing against it.)

Anyway, as you might imagine, the libertarians in the room mostly love jury nullification.  Despite being a good anarcho-capitalist, I disagreed. I understood that most of the examples people brought up did indeed demonstrate that jury nullification could be a tool for protecting individual rights.  However, I believe that nullification could equally be a tool of oppression.  For example, in criminal law, take the Enron-Skilling trial.  I am not saying this happened, but one could certainly imagine a properly inflamed jury saying "well, we don't think he is technically guilty beyond a reasonable doubt on the charges based on the evidence here in court, but he's rich and Enron failed and people lost money and we're pissed off, so we will find him guilty.  They would be saying "what he did was not a violation of the law, but it should be, so we are sending him to jail." This is just as much jury nullification as my previous example.

I don't think this kind of anti-individual-rights jury nullificatin happens often in criminal court, but I do think it is happening a lot in civil court.  In fact, I think one way you could summarize what is wrong with torts and litigation in this country is that we are seeing rampant jury nullification in favor of wealth redistribution.  Juries are ignoring the law, the facts of the case, and all reason for one and only one consideration:  "One guy in the room is rich, one guy is not, and I have a chance to take money from the rich guy and give it to the poor guy."  For while it may be hard in America to get 51% of the voters to support substantial increases in wealth distribution, smart lawyers like Peter Angelos and Jon Edwards have figured out that it is not that hard through voi dire to get at least seven or eight such votes in a room of twelve people.

Particularly if you are good at venue-shopping:

In Race, Poverty and American Tort Awards (and here),
Eric Helland and I show that tort awards increase strongly with county
poverty rates especially with minority poverty.  A 1% increase in black
poverty rates, for example, can increase tort awards by 3-10 percent
with a similar increase in Hispanic poverty rates.   Careful forum
shopping can easily raise awards by 50-100%.

Anthony Buzbee, a famed plaintiff's attorney, inadvertently let the
cat out of the bag recently when talking about Starr county in Texas.

"That venue probably adds about seventy-five percent to the value of
the case," he said. "You've got an injured Hispanic client, you've got
a completely Hispanic jury, and you've got an Hispanic judge. All
right. That's how it is."

In other parts of Texas, Buzbee went on, a plaintiff may have the
burden of showing "here's what the company did wrong, all right? But
when you're in Starr County, traditionally, you need to just show that
the guy was working, and he was hurt. And that's the hurdle: Just prove
that he wasn't hurt at Wal-Mart, buying something on his off time, and
traditionally, you win those cases."

The problem with letting juries write law in the jury room is that there are no Constitutional protections at all.  If they want to make the law, at least for that day, read that homeowners are liable for injuries suffered by burglars trying to break into their house, then that is what the law becomes, fair or not.  If they want to make the law read that drug companies shouldn't sell painkillers that have any risk at all, then that is what the law is, and the rest of us 300 million minus twelve people have to live with fewer choices for managing our migraines. 

Coyote Sees the Future

James Dean, reader of both my blog and my book BMOC, sent me a great article about several companies that are pursuing business models surprisingly close to the one I made up for BMOC in my book.

Quick background:  In my novel, I imagined that the company BMOC had recruited the most popular kids at a number of high schools -- kids who were true social opinion makers, so to speak.  I posited that BMOC monetized these relationships by 1) Helping clients of BMOC in the same school become more popular and 2) Seeding these kids with free products (video games, cosmetics, etc.) which would cause other kids who followed their example to go out and buy the same products.  The free products both paid the popular kids for their consulting work helping to make BMOC clients more popular, and acted as a guerrilla marketing tactic for the companies that sell these products.  (The section of the novel explaining the business model in detail is here).

Well, I have not seen anyone pursuing part 1, but apparently a number of companies are pursuing part 2:

Shoppers will be given the opportunity to test products or
services, share them with their friends and, all being well,
recommend them to a wider audience - without a cent being spent on
traditional advertising.

One company, Yooster, predicts it will have 50,000 "influencers"
- the marketing moniker for trendsetters and mavens - on its books
by June, ready to spruik a client's wares solely for the social
kudos of getting the product before it hits the shelves.

The chief executive and founder of Yooster, Piers Hogarth-Scott,
said: "If you are a 20-year-old girl at university and you get the
latest lipstick from Gucci months before it is out on the shelves
and you are able to give it to your friends then you are going to
look good. That gives you immense [social] currency."

You can buy BMOC at Amazon.