Coyote Blog

Via the Mises Institute, some Austrian and libertarian economics texts are free online:

• Principles of Economics, Menger
• Human Action, Mises
• Man, Economy, State, Rothbard
• Study Guide to MES, Murphy
• Theory and History, Mises
• Epistemological Problems, Mises
• Economic Policy, Mises
• America's Great Depression, Rothbard
• Positive Theory of Capital, Boehm-Bawkerk
• Money, Bank Credit, Economic Cycles, de Soto

Cuba, Castro, Che Guevara, etc all suck.  It is ridiculous to even have to keep making this point against folks who are trying to sanctify them.

That being said, it is way past time to open up Cuba to US trade.  When will we learn that we are doing the Castros work for them?

• If the US did not go out of its way to limit contact with Cuba, the Castros would have to try to do it.  We are just playing into their hands.  Totalitarian governments have a very dicey time in this era of free communications.  China interacts with the west, and is improving.  North Korea blocks all contact and is not.
• The economic boycott gives the Castros a fig leaf to hide behind as their entire population wallows in poverty.  Yes, they are poor, and they are poor because of communism, but the Castros are able to blame the failure of their country on the US embargo.

But they have free health care!  They get all the leeches they want.

In a previous post, I observed that there did indeed seem to be two Americas:  the one productive people want to live in, and the one productive people are trying to escape because the local government is so controlling and confiscatory.  I further observed that, unfortunately, both Democratic candidates appeared to be from the latter.

This is an interesting follow-up:

"When California faced a Mount Everest-sized $14 billion deficit in
2003, one of the major causes for the red ink was the stampede of
millionaire households from the state," says a report called "Rich
States, Poor States" by economists Arthur Laffer and Stephen Moore.
"Out of the 25,000 or so seven-figure-income families, more than 5,000
left in the early 2000s, and the loss of their tax payments accounted
for about half the budget hole."

I am not sure how they got to this number, but holy crap!  20% of the wealthiest families left the state?  I'm not sure even Hugo Chavez is doing that poorly.

Update:  Even more here, comparing inward and outward migration rates of states vs. a state-by-state economic freedom index.

I must say that I find this state Supreme Court decision from Washington State terrifying.  It is interesting that the State of Washington has exactly the same proprietary attitude over the garbage business as does the Mafia in New York:

In a decision released this morning, the Court stated that hauling
construction waste is not a private enterprise and "is in the realm
belonging to the State and delegated to local governments." The court
found specifically that the provision of waste hauling service is a
"government service" and constitutional protections do not apply to
government-provided services.

I don't know the Washington State constitution, so it may indeed mention "construction waste hauling" as an enumerated power of the government.  If it does not, and by "constitutional protections do not apply" they mean the US Constitution, then this is a stunning over-reading of said document.  Nowhere, in the US Constitution at least, is there a provision for the government providing services of any kind, much less construction waste hauling. 

Tyler Cowen links to Lane Kenworthy Saying:

]Poverty comparisons across affluent nations typically use a "relative"
measure of poverty. For each country the poverty line "” the amount of
income below which a household is defined as poor "” is set at 50%
(sometimes 60%) of that country's median income. In a country with a
high median, such as the United States, the poverty line thus will be
comparatively high, making a high poverty rate more likely...

There is actually at least one study out there by a left-leaning think tank that sort of addresses this (though not exactly).  The study first shows US and European income of the bottom 10 percentile vs. the median income of that country.  Not surprisingly, since US median income is so high, the bottom 10 percentile have a low share.  BUT, they then do the numbers a second, time, showing the bottom 10 percentile income in each country all compared to US median income, ie all with the same denominator,  here, the US poor do at least as well as most European countries.  The comparison shows clearly that while the US has more income inequality, it is not because our poor are poorer but because our rich and middle class are richer.   Here is that second study:

The looming federal government takeover of health care as proposed by most of the major presidential candidates will be far worse than anything we have seen yet from government programs.  Take this example:  In the 1960's, the federal government embarked on massive housing projects for the poor.  In the end, most of these projects became squalid failures.

With the government housing fiasco, only the poor had to live in these awful facilities.  The rest of us had to pay for them, but could continue to live in our own private homes.

Government health care will be different.  Under most of the plans being proposed, we all are going to be forced to participate.  Using the previous analogy, we all are going to have to give up our current homes and go live in government housing, or least the health care equivalent of these projects.

Think I am exaggerating?

One such case was Debbie Hirst's. Her breast cancer had metastasized, and the health service would not provide her with Avastin,
a drug that is widely used in the United States and Europe to keep such
cancers at bay. So, with her oncologist's support, she decided last
year to try to pay the $120,000 cost herself, while continuing with the
rest of her publicly financed treatment.

By December, she had
raised $20,000 and was preparing to sell her house to raise more. But
then the government, which had tacitly allowed such arrangements
before, put its foot down. Mrs. Hirst heard the news from her doctor.
"He looked at me and said: "˜I'm so sorry, Debbie. I've had my wrists
slapped from the people upstairs, and I can no longer offer you that
service,' " Mrs. Hirst said in an interview...

Officials said that allowing Mrs. Hirst and others like her to pay
for extra drugs to supplement government care would violate the
philosophy of the health service by giving richer patients an unfair
advantage over poorer ones.

Patients "cannot, in one episode
of treatment, be treated on the N.H.S. and then allowed, as part of the
same episode and the same treatment, to pay money for more drugs," the
health secretary, Alan Johnson, told Parliament.

Here is the poll question I would still love to see asked:

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.

Megan McArdle has a good post and excerpts from Adam Shepard, who set out with $25 to see how hard it was to escape from poverty.  I won't re-quote that post here, you should see her site, but I wanted to comment on one thing Shepard says about his early days trying to convince supervisors they should hire a homeless guy:

So, he gave me the secret. To paraphrase, he told me to go to these
managers and tell them who you are, that you are the greatest worker on
the planet and that it would be a mistake not to hire you. If they take
you on, great. If not, move on down the line. By day's end, you're
gonna have a job.

So I did. The next day, I went to see Curtis at Fast Company, a
moving company where I'd already applied. "Curt!" I said. "I'm Adam
Shepard, and I'm the greatest mover on the planet. It would be a
mistake for you not to hire me." He looked at me across the table and
smiled, knowing I was lying like hell to him. But he liked my attitude
"“ especially after I offered to work a day for free "“ so he hired me on
the spot.

This is very normal -- if you want someone to take a risk, you try to reduce the cost for him.  Not sure you want to try our product?  We'll give you a free sample.  In this case, he agreed to work for free to convince the manager he was a good worker.  This makes sense -- to emerge from homelessness and to get a job with no skills and no work history, one needs to be willing to give a bit of a discount on your labor, at least at first, to get someone to give you a chance.

But here is the interesting part -- the arrangement Curtis and Adam Shepard made is ILLEGAL.  The Fair Labor Standards Act, which includes Federal minimum wage law, does not allow Curtis to accept unpaid labor and does not even allow Mr. Shepard to offer it.  The fact that the deal makes so much sense and it so clearly is in the mutual best interest of both parties is absolutely irrelevant under the law.  Fast Company could be busted, should the DOL choose to focus its attention their way.

When people argue that the minimum wage is most harmful to the poor, because it prices the first rung of the labor ladder beyond what their minimal skills can justify, this is what they mean.

Over the coming months and years, you are going to see a ton of stories like this for somehow storing or reprocessing CO2:

 

If two scientists at Los Alamos National Laboratory are correct,
people will still be driving gasoline-powered cars 50 years from now,
churning out heat-trapping carbon dioxide into the atmosphere "” and yet
that carbon dioxide will not contribute to global warming.

The scientists, F. Jeffrey Martin and William L. Kubic Jr., are
proposing a concept, which they have patriotically named Green Freedom,
for removing carbon dioxide from the air and turning it back into
gasoline.

The idea is simple. Air would be blown over a liquid solution of
potassium carbonate, which would absorb the carbon dioxide. The carbon
dioxide would then be extracted and subjected to chemical reactions
that would turn it into fuel: methanol, gasoline or jet fuel.

This process could transform carbon dioxide from an unwanted,
climate-changing pollutant into a vast resource for renewable fuels.
The closed cycle "” equal amounts of carbon dioxide emitted and removed
"” would mean that cars, trucks and airplanes using the synthetic fuels
would no longer be contributing to global warming.

Although they have not yet built a synthetic fuel factory, or even a
small prototype, the scientists say it is all based on existing
technology.

You are going to see a ton of stories like this from academia because academics respond to incentives like everyone else -- faced with billions of dollars available for funding research into carbon-neutral technologies, they are going to publicly promote their ideas in an attempt to garner this funding.

The first question you should always ask is about the energy balance.  I am sure that this is technically possible.  Today we can create hydrogen fuel from sea water, but it is atrociously expensive from an energy standpoint.  The problem, then, is whether it makes any sense from a cost and energy balance point of view.  This is a good hint that it does not:

Even with those improvements, providing the energy to produce gasoline
on a commercial scale "” say, 750,000 gallons a day "” would require a
dedicated power plant, preferably a nuclear one, the scientists say.

We have to be suspicious that the carbon benefits come from the nuclear plant they require, not the process itself.  In fact, one is left to wonder why we would go through so much effort at all rather than just charge electric cars directly from the nuclear plant.  My sense is we are much closer on battery technology than on this stuff.

A bunch of media outlets credulously ran a Greenpeace press release as a news story last year, hammering on Exxon for donating a cumulative $2 million dollars to "skeptical" climate researchers.  Never mind that no one could explain what was so ominous about an American company exercising its free speech rights.  I and other pointed out that this $2 million was a trivial amount of spending compared to the billions that had been routed to global warming activists. 

This week, we get a great example.  While over a period of a decade, the great Satan ExxonMobil spent $2 million on climate issues, it turns out one city government, in San Francisco, spends this much each year on global warming activism:

In his quest to make San Francisco the greenest city in the nation,
Mayor Gavin Newsom recently created a $160,000-a-year job for a senior
aide and gave him the ambitious-sounding title of director of climate
protection initiatives.
...
But officials in the Newsom administration say that even 25 people working on climate issues is not enough and that having a director in the mayor's inner circle is necessary to coordinate all the city's climate initiatives."

If
there are 25 people working on climate protection issues for the city,
that's a good start," Newsom spokesman Nathan Ballard said. "Ten years
ago [when the "globe" was still "warming"], there probably weren't any.
It's smart policy to have one point person at the highest level of city
government to coordinate all 25 of them."

The city has a climate
action plan, issued by Newsom after he took office in 2004, that aims
to cut the city's greenhouse emissions by 2012 to 20 percent below
1990's level.

In addition to the director of climate protection
initiatives in Newsom's office, San Francisco has an Energy and Climate
Program team of eight people in the Department of the Environment, who
combined earn more than $800,000 a year in salary and benefits,
including a "climate action coordinator." At least 12 San Francisco
Public Utilities Commission staff members work on climate issues
related to water and energy, including a $146,000-a-year "projects
manager for the climate action plan."

Also in the name of
climate control, the Municipal Transportation Agency has a "manager of
emissions reductions and sustainability programs" who works on making
Muni's bus fleet greener, and the San Francisco International Airport
has a "manager of environmental services" who oversees such projects as
the installation of energy-efficient lighting and solar panels.

The
list doesn't include the scores of staff members who work on broader
environmental policies, like the recently hired $130,700-a-year
"greening director" in Newsom's office, or Jared Blumenfeld, who earns
$207,500 a year in salary and benefits as the head of the city's
Environment Department, which has a staff of 65 and annual budget of
about $14 million.

It borders on journalistic malpractice that nearly every article on skeptics delve into their funding sources but no reporter ever seems to have ever asked climate alarmists about their funding sources nor delved into these funding issues.

The AP does a great job in this story reporting absolutely everything but the most important fact:

The Supreme Court has refused to offer help to Hurricane Katrina
victims who want their insurance companies to pay for flood damage to
their homes and businesses.

Wow, those insurance companies suck, and they have the Supreme Court in their pocket.  The only teeny-tiny fact missing is that the people suing had policies that very explicitly did not cover flood damage.    They sortof acknowledge this but say the insurance companies should pay anyway, because the flood was caused by a broken levee and that somehow is not really the same kind of flood, sort of.  Or whatever. 

If you have not figured it out from the nature of the posts lately switching to quick links from extended bloviation, I am really, really busy.  I have huge bid packages due in a matter of days, and am currently running my every-two-year (biannual or biennial? ) management conference for my company.

From Megan McArdle:

People are so wrapped up in their own irrational bundles of ideas that they seem unable to conceive of any bundle that isn't

a)  theirs

b)  the exact opposite of theirs

It just floors me when people want to argue that the current conservative/liberal or Democrat/Republican positions are internally consistent and the logical (or even only) way to parse the world of ideas.  Particularly when I can start naming so many issues where the two sides have swapped positions over the last few years.  For example, left/right opinions on unchecked presidential power tend to have a lot to do with whose guy is in office.  Bill Clinton proposed most of the Patriot act  as his anti-terrorism bill way back in the mid-nineties, and was opposed in Congress by Republicans led by John Ashcroft.

From Overlawyered:

I was very amused by Brockovich's remark "It is no coincidence that
thousands on Avandia now have heart attacks." Really? Thousands of
people who saw Erin Brockovich in the theaters have had heart
attacks, and many others have had strokes. Some even contracted cancer!
Coincidence, or has Ms. Brockovich put movie royalties ahead of safety?

Via Hit and Run:

The Palm Beach Town Council on Monday voted unanimously to block "formula restaurants" from opening in the island town.

The ban, which was first proposed in 2006, applies to restaurants with
three or more units and similar trade names, standardized and limited
menus, uniforms, architecture, and decor. The measure will go before
voters this spring.

In other words, if your business has proven itself to be successful with customers and attempts to bring this proven success formula to our town - forget it.

The post digs in further, and finds the real problem to be that the Palm Beach Town Council is afraid of the "riff raff" that might come with certain plebeian chains.  Which reminds me of Lexington's opposition to the Boston Red Line being extended into their town.  Ostensibly, they were opposed to it on fiscal grounds, but that is a joke in a town that has never opposed a government program ever on fiscal grounds.  In fact, they were afraid of the "riff raff" the metro might bring to town, but the more-liberal-than-thou residents could never admit that in public.

Over at Climate Skeptic, I have what could be called a climate Rorschach test.  Look at these two images below.  The left is the temperature plot for Lampasas, Texas, a station in the NASA GISS global warming data base.  On the right is the location of the temperature station since the year 2000 (the instrument is in the while cylinder in the middle of the picture under the dish).  Click either picture to expand

So here is the eye test:  Do you read the warming since 2000 as man-made global warming due to CO2, or do you read it as a move of the temperature instrument to a totally inappropriate urban site to which the instrument was moved in 2000, contaminated with hot asphalt, car radiators, nearby buildings, air conditioning exhaust, etc?

You should know that NASA's GISS reads this as man-made global warming, and reports it as such.  Further, NASA actually takes the raw data above and in their computer model lowers temperatures in 1900 and 1920, actually increasing the apparent warming trend.  For the record, the GISS opposes this kind of photo survey as worthless and argues that their computer algorithms, which correct for urban warming at this site in 1900 but not in 2007, work just fine with no knowledge of the specific site location.

I don't believe man-made global warming is substantial enough or catastrophic enough in its effects to warrant expensive public action.  But if we did feel the need to do something, John Tierney echoes a theme I have been sounding for a while (emphasis added):

The CBO report concludes that a tax on carbon emissions "would be
the most efficient incentive-based option for reducing emissions and
could be relatively easy to implement. If it was coordinated among
major emitting countries, it would help minimize the cost of achieving
a global target for emissions by providing consistent incentives for
reducing emissions around the world." But the major presidential
candidates aren't supporting such a tax, and the few proposals on
Capitol Hill to impose a tax are not expected to go anywhere anytime
soon.

Instead, the candidates and most legislators prefer to talk about
cap-and-trade schemes like the Kyoto protocol. These schemes have the
great political advantage of hiding the costs from consumers and
voters, but they cost more and accomplish less. The CBO calculates that
the net benefits of a tax would be five times higher than for a
cap-and-trade with inflexible targets. A more flexible cap-and-trade
system wouldn't be quite as bad a deal economically, but it would
create all sorts of political temptations for doling out exemptions and
subsidies to well-connected industries and companies.

For a while, I have been worried that the next decade may well be a return to 1970's economics, with bipartisan commitment to large government, ever-expanding government micro-management of... everything, growth-destroying taxes, and consumer-unfriendly protection of dead US industries.

Now, Megan McArdle points to an article that hints that the stagflation of the 1970's may be back as well.

Inflation and sluggish growth haven't joined in that ugly brew called
stagflation since the 1970s. They may not be ready for a reunion, but
they are making simultaneous threats to the economy and battling one
might only encourage the other.

Among a batch of economic readings today, the Labor Department
reported that import prices jumped 1.7% last month. The data included
troubling signs that consumer products, many imported from China, have
caught the inflation bug. The signs pointing to slowing growth included
a sharp deterioration in consumers' mood, as measured by the
Reuters/University of Michigan Surveys of Consumers, and a worsening
outlook for manufacturers, revealed in the Federal Reserve Bank of New
York's Empire State Manufacturing survey for February. The government
also reported that U.S. industrial production only increased slightly
during January, as colder weather elevated utilities output and offset
sharp declines in the auto and housing sectors. If indeed inflation is
teaming up with slower growth, it means big headaches for policy
makers, in particular Ben Bernanke. The Federal Reserve chief in
congressional testimony yesterday suggested that he is willing to keep
lowering interest-rates if the economy stalls. But, naturally, he will
have less room to do so if those lower rates would accelerate inflation
to unacceptable levels.

I probably shouldn't criticize a curriculum that I have not observed, but as someone who studied engineering the old-fashioned way (ie with lots of math and equations) this looks kind of worrisome:

Today's Christian Science Monitor profiles Glenn Ellis, a professor who helped develop Smith's innovative engineering curriculum, which emphasizes context, ethics, and communication as much as formulas and equations.

We know that when the goals in public schools were shifted from education to graduation and retention (e.g. social promotion), the results were disastrous.   So one has to be a little wary of a curriculum aimed more at retention than, you know, designing bridges correctly:

Smith, the first women's college to offer an engineering degree, graduated its first class of engineers in 2004, and since the program's creation, in 1999, has attained a 90-percent retention rate.

Hmm.  Well, if they are teaching the same material in a more engaging manner, fine.  But lower degree retention rates in hard core engineering programs is not a "female thing."  I know that we had a lot of attrition from the harder engineering degrees (mechanical, chemical) at Princeton even among Ivy-League-Quality students and even among the males. 

Hat tip: TJIC

Cross-posted from Climate Skeptic

Tired of build-a-volcano junior high science fair projects, my son and I tried to identify something he could easily do himself (well, mostly, you know how kids science projects are) but that would actually contribute a small bit to science.  This year, he is doing a project on urban heat islands and urban biases on temperature measurement.   The project has two parts:  1) drive across Phoenix taking temperature measurements at night, to see if there is a variation and 2) participate in the surfacestations.org survey of US Historical Climate Network temperature measurement sites, analyzing a couple of sites for urban heat biases. 

The results of #1 are really cool (warm?) but I will save posting them until my son has his data in order.  Here is a teaser:  While the IPCC claims that urban heat islands have a negligible effect on surface temperature measurement, we found a nearly linear 5 degree F temperature gradient in the early evening between downtown Phoenix and the countryside 25 miles away.  I can't wait to try this for myself near a USHCN site, say from the Tucson site out to the countryside.

For #2, he has posted two USHCN temperature measurement site surveys here and here.  The fun part for him is that his survey of the Miami, AZ site has already led to a post in response at Climate Audit.  It turns out his survey adds data to an ongoing discussion there about GISS temperature "corrections."

Out-of-the-mouth-of-babes moment:  My son says, "gee, dad, doesn't that metal building reflect a lot of heat on the thermometer-thing."  You can bet it does.  This is so obvious even a 14-year-old can see it, but don't tell the RealClimate folks who continue to argue that they can adjust the data for station quality without ever seeing the station.

This has been a very good science project, and I would encourage others to try it.  There are lots of US temperature stations left to survey, particularly in the middle of the country.  In a later post I will show you how we did the driving temperature transects of Phoenix.

OK, I guess I have to admit that there are two Americas:  The one that no one wants to live in any more and the one where everyone is moving to. 

Unfortunately, it appears that our next president will be from Illinois or New York, two of the eight states the local government has screwed up so bad that no one wants to do business there any more.  I guess both Hillary and Obama can claim that their states have licked the immigration problem bay increasing taxes and regulation so much that no one wants to come to their states any more.

It looks like Blu-Ray will soon defeat HD-DVD. 

Fans of Toshiba's HD DVD format have been kicked while they're down, this time by Wal-Mart's decision to ditch the format,
and sell Blu-ray players and media exclusively. Effective June, the
move is the result of customer feedback, and an attempt to "simplify"
patron's decisions. This news closely follows Best Buy's decision to
also give the format the boot. Speculation has already surfaced that
suggests Toshiba will abandon their own format "in the coming weeks"...

So file all that HD-DVD software next to your Betamax tapes.  I actually preferred the HD-DVD format, but thought from the beginning that Blu-Ray's position in home gaming machines, which immediately gave them a huge installed based before any of us started buying High Def. movie players for our home theaters, might give it a lead that could not be overcome. 

Most consumers have just wanted the format wars to be over so they could pick the right player and software (I partially avoided this problem by buying a combo player).  This is an interesting consumer-friendly role for Wal-Mart that I have never seen discussed, that of standards-setter.

So here is a message to Blu-Ray:  Now that you are on the verge of victory, you need to clean up your own house.  The creeping standards problem you have had, which has caused early players to be unable to play newer disks, has got to end.  In particular, it is irritating not to be able to play a newer disk because the fancy multimedia menu won't work.  When when you learn that we aren't interested in all that crap and just want the movie to start?  Just because the technology says you can do that stuff does not mean that you should.

Update: Reuters with the same news, and a rumor that Toshiba has already shut down production line.

The state of Michigan is a hoot.  The politicians craft laws that create one of the worst business environments in the nation, and then scratch their head and wonder why all the jobs seem to be leaving.  One explanation may be that they simply don't understand even the fundamentals of business.

Case in point:  I have to pay a yearly registration fee as a corporation in Michigan.  That fee is based on the number of shares of stock my company has outstanding.  If my company were worth a million dollars, and had issued one share worth a million dollars, we would pay lower fees than if the same company had issued a million shares each worth one dollar.  Basing taxes and business fees on economically meaningless numbers is probably a leading indicator of some deeper issues.

James Hansen is a climate scientist at NASA.  He has accused the Bush administration of exerting too much political control of government scientists and of censoring him.  If so, the Bush administration is doing a really horrible job, as demonstrated by this chart:

As a libertarian, I am the first to believe that government funding of science is corrupting.  Mr. Hansen should consider leaving the government immediately for one of the many universities who would eagerly have him on their faculty.

Unfortunately, I suspect it is not free inquiry that Mr. Hansen wants.  I suspect he treasures his position of government power.  He does not want a position of equality in a free exchange of ideas, he wants a position of power from which he can dictate without accountability.  He wants government power without the check of accountability and criticism.  He wants someone paying his bills but he doesn't want a boss.  Well grow up.  If you don't like working for the Bush administration or the scrutiny that comes with accepting public funding, and I certainly would not, then leave.

I have always wondered why the Denver airport has so much goofy modern art all over the place.  Even the subway tunnels have art on the walls (I must admit I am kind of partial to the little fans on the outbound train trip).  There are replicas of paper airplanes hanging from the ceilings, a fountain that is supposed to model the Front Range, and a fake Mayan temple in one terminal concourse.  It turns out that Colorado has a law that says that 1% of the budget for public building construction has to go for art.  Given that the airport costs overran to $4.8 billion, that was a $48 million boondoggle for every goofy public artist that could pull up to the trough.

There is a false rumor going around that I may be sane.  Wrong.  As proof, I offer the following.

I recently read that among retail stores, mattress stores have the highest customer conversion.  By "conversion" I mean the percentage of people who actually make a purchase once they walk in the store.  Brookstone and Sharper Image, for example, have close to the lowest conversion ratios because they get so many people just looking at the gadgets with no intention of buying.  Anyway, having read that mattress stores have a sky-high conversion rate  (I seem to remember 80+% of people who walk in the door buy something) I have now taken to walking into any mattress store I encounter, say in a strip mall, looking around a bit, and just walking out.  I figure with the sky-high conversion rates the sales staff must be conditioned like Pavlov's dogs to equate the ringing of the doorbell with a sale, so I like to mess with them.