Coyote Blog

I am increasingly convinced that John McCain believes in nothing, or at least believes in nothing strong enough that he can't turn a 180 on the issue if the polling numbers move the meter hard enough. 

The plan would retire old
loans that homeowners no longer can pay and replace them with less
expensive, 30-year, fixed-rate mortgages that are federally guaranteed.
McCain said families would gain "the opportunity to trade a burdensome
mortgage for a manageable loan that reflects the market value of their
home."

In line with
his concern about bailing out speculators, McCain's proposal would
apply only to homeowners who took out sub-prime mortgages after 2005
for homes that are their main residence. They would need to have proved
they were credit-worthy at the time of the loan.

I hope everyone else is enjoying the notion of "sub-prime mortgages" where the borrowers were "credit-worthy at the time of the loan." 

Don't buy property in Paradise Valley (a suburb of Phoenix, near Scottsdale) if you actually expect the property to be fully your own.  Even the smallest revisions of your home can require multiple appearances in front of the town council.  By some odd statistical anomaly, property owners with friends in the city government seem to get these changes approved more readily than those without such influence. 

Anyway, things just get worse if you own a lot of land in PV. 

A residents group is preparing to launch a voter referendum against the
planned Ritz-Carlton, Paradise Valley Resort, claiming the project's
residences are too dense....

Scottsdale-based Five Star Development wants to build a 225-room resort
hotel, 15 1-acre home sites, 46 luxury detached homes and 100 patio
homes on about 105 acres northwest of Scottsdale Road and Lincoln Drive.

This really isn't very high density, but this can be a very flaky town.  One thing you have to realize is that I can't remember the last new home I saw go up in PV that was less than 5000 sq ft and 10,000+ sq ft is not at all unusual.  This may be one of the few cases where a town is trying to keep out the Ritz Carlton because its customers will bring down the neighborhood, lol, but that is exactly what is at work here, in part. 

Now I know you think I am exaggerating when I say the locals are worried about a Ritz-Carlton bringing down the neighborhood by attracting the unwashed, but here is the Zillow sales page for the area -- the vacant lot in the lower right is the property in question.

This piece of land has been empty and zoned for a resort for years.  I know it was zoned for a resort long before this sale because I was stuck in traffic court all day and had nothing to stare at but the town zoning map  (don't ever speed when crossing PV).  The buyers purchased this land several years ago (I think from the Wrigley family) after ensuring the zoning was solid.  If the town's residents wanted something else on the lot, they should have bought it themselves.  But it is ever so much cheaper to instead use your political influence to tell other people what they can and can't do with their property.

Another thought:  It is nearly an article of faith among libertarians that devolving government to the smallest possible unit enhances freedom.  Well, here is an example where it does not.  Not state or even city would pass a ballot resolution to change the zoning on one small piece of land.  But it is entirely possible this could pass in a town of just a few thousand people.

The Democratic party, which so often accuses others of adopting superstition over science, are themselves pursuing Medieval economics:

The Democratic Party's protectionist make-over was completed yesterday,
when Nancy Pelosi decided to kill the Colombia free trade agreement.
Her objections had nothing to do with the evidence and everything to do
with politics, but this was an act of particular bad faith. It will
damage the economic and security interests of the U.S. while trashing
our best ally in Latin America.

The Colombia trade pact was signed in 2006 and renegotiated last year
to accommodate Democratic demands for tougher labor and environmental
standards. Even after more than 250 consultations with Democrats, and
further concessions, including promises to spend more on domestic
unemployment insurance, the deal remained stalled in Congress.
Apparently the problem was that Democrats kept getting their way.

I am sure the Columbians, who for years have been told by the US to export something other than cocaine, are scratching their heads at this rebuff when they actually try to do so.  My sense is that the Democrats are reacting to this ugly picture of US manufacturing output post NAFTA:

We can see that since the passage of NAFTA in the mid-1990s that US manufacturing output has, uh, has.... can that be right?

I got to thinking today about regulation and its enforcement in this imperfectly government-dominated world after reading this Jon Stewart quote as relayed by Kevin Drum:

With this administration, if a passenger blows up a plane, it's a
failure in the war on terror. But if the plane just blows up on its own
"” eh, it's the market self-regulating.

What struck me that I had not thought of before is the question of whether non-enforcement of a published regulatory regime was the same as letting a market self-regulate.  And my answer was:  No, at least not in the short to medium term.

The reason is that the government regulatory regime crowds out private mechanisms that might attempt to achieve the same goals.  What do I mean by crowding out?  For example, if the government published car reliability metrics and regulation for all cars, no matter how imperfect, would JD Power and Consumer Reports bother with the investment to do the same?  For decades, insurance companies wrote de facto building codes and performed fire inspections of their insured structures.  They no longer do so, because the government has taken on that role (arguably less well than the insurance companies, who had the reputation of being tigers on such inspections).  Would Moody's exist to rank bond risks if the government had regulations in place that theoretically forced all securities to (I don't know how) have the same risk?  My marina liability insurer conducts occasional inspections of my marinas.

As a result, insurers don't inspect airlines, nor do manufacturers enforce inspection and replacement regimes (as automobile companies do, to some extent, to protect their warranty).  Third parties rate airlines for customer service but not for safety.  The whole private evaluation regime for airlines exists on the assumption that the government has regulatory program X and Y in place that is enforced.  In the long term, if the government were to abandon enforcement, and this lasted long enough for that expectation to exist in the market, new private regulatory methods would arise [arguments would most certainly exist between libertarians and others whether these new regimes were as effective as the old regime, but almost undoubtedly something would emerge].  But in the near term, we don't have a self-regulating market or even the expectation of one. 

As a result, I come to the conclusion that while deregulation may be needed, the absolute wrong way to do it is via non-enforcement of existing regulations.  So there you have it, a libertarian calls for better enforcement.  Comments?  I am just starting to think about this and would appreciate feedback.

While I find the torture recommendations in John Yoo's memos awful, they worry me less than the general assumptions embodied in them about presidential power.  After all, the issue of allowable tortures is a narrow issue that can be dealt with efficiently through Congressional legislation, and is almost certainly something to be disavowed by the next administration.

Based on historical precedent, what is less likely to be disavowed by the next administration are the broader definitions of presidential power adopted by GWB.  It is in this enhanced theory of presidential power where the real risk to the nation exists, and, unfortunately, there are all too few examples since George Washington's declining to run for office a third time of president's eschewing power.  Already, folks on the left are crafting theories around using the imperial presidency to address their favored issues, such as the University of Colorado's proposal for implementing greenhouse gas controls by executive fiat.

Via Five Feet of Fury:

Richard "The Boy Named Sue" Warman has finally filed his statement of claim.

Canada's busiest litigant, serial "human rights" complainant and -- the guy Mark Steyn has called "Canada's most sensitive
man" -- Richard Warman is now suing his most vocal critics -- including me.

The suit names:

"¢    Ezra Levant (famous for his stirring YouTube video of his confrontation with the Canadian Human Rights
tribunal after he published the "Mohammed Cartoons")

"¢    FreeDominion.ca (Canada's answer to FreeRepublic.com)

"¢    Kate McMillan of SmallDeadAnimals.com

"¢    Jonathan Kay of the National Post daily newspaper and its in-house blog

"¢    and me, Kathy Shaidle of FiveFeetOfFury.com

Richard Warman used to work for the notorious Human Rights Commission, which runs the "kangaroo courts" who've charged Mark
Steyn with "flagrant Islamophobia."

Richard Warman has brought almost half these cases single-handledly, getting websites he doesn't like shut down, and making
tens of thousands of tax free dollars in "compensation" out of web site owners who can't afford to fight back or don't
even realize they can.

The province of British Columbia had to pass a special law to stop Richard Warman from suing libraries because they
carried books he didn't approve of.

Richard Warman also wants to ban international websites he doesn't like from being seen by Canadians.

The folks named in his new law suit are the very bloggers who have been most outspoken in their criticism of Warman's
methods.

She includes a paypal link to accept donations for their legal defense  (or is it defence in Canadian?)

I am just fine with prosecuting mortgage brokers for fraud  who deliberately misrepresented the payments and risks of the loan products they were selling.  However, to be fair, we must then also prosecute borrowers and home buyers who deliberately misrepresented their assets and income to lenders, actions that are equally fraudulent.

Or, we could just let the whole foreclosure and bankruptcy system sort everything out and let bygones by bygones. 

Interestingly, it seems to be advocates for borrowers who want to stir the whole fraud thing up and are reluctant to just let the system play itself out.  I find this odd, for a couple of reasons:

• Fraud by lenders will be hard to prove, since they all are covered by written disclosures that I am sure reveal all the terms of the loan.  The government itself has designed a number of written disclosures lenders must use  [by the way, if reformers want to start somewhere, they might begin with these government disclosures.  My experience is that they are silly and uninformative, and were put together by someone in the government who does not actually understand loans].  Fraud by borrowers, on the other hand, should be dead-easy to discover - they signed their name to an income statement and list of assets and liabilities which are quite easy to check.
• The current foreclosure and bankruptcy system is pretty fair to borrowers.  In particular, in the case of subprime loans where the borrower has little equity, foreclosure costs almost nothing in current dollars - all the loss is on the bank, with absolutely no come-backs on the borrower in the future.  The borrower must endure years of difficult credit and rebuilding trust in the system, but that is the kind of minimum cost we should expect a foreclosure or bankruptcy to carry.  We always seem to get worked up about foreclosures, because we have this picture of someone losing a home they have lived in 20 years and losing all their equity.   But in these subprime cases, where the buyer has been in the home only a few months and put in virtually no equity, I think our mental picture of the costs, at least to the borrower, of foreclosure are overblown.

As an aside, I am easily convinced that there were many mortgage brokers offering their customers atrociously bad deals and rates.  I can't imagine personally not shopping around for mortgage rates from multiple suppliers, but there are clearly people who want to walk into one guy's office and buy something from that first person.   And a number of these people chose to do business with firms that gave them really poor service (if service is defined as getting the best possible loan for the buyer).  Which gets me to the subject of branding.

I know that there are a lot of folks, particularly on the left, who hate large corporations and national brands, but to a large extent the uneven and unpredictable quality of mortgage brokers may be due to a lack of national players and national brands in mortgage brokering. 

Mortgage brokers, stock brokers, and real estate brokers are all licensed by the government.  By statist thinking, that should be enough to ensure quality.  But while stock brokers and real estate brokers can be independent, most of them have organized themselves into groups under a brand name (e.g. Merrill Lynch or Century 21).  Few such national brands, if any, exist in mortgage brokering.

These brands exist because they have proven themselves useful and valuable to consumers.  Presumably they communicate some form of quality or reliability or capability beyond the level that having a government license affords.  This is not necessarily a gaurantee of perfection, of course.  Certainly Merrill Lynch brokers, form time to time, have been accused of fraudulent behavior.  But Merrill has been very fast to act on these occasions, taking actions designed to save its brand from being tainted.  It is this incentive, plus the history such brands carry in the collective memory, that gives consumers extra confidence to use brokers with these brands rather than individual practitioners.

If I was a contrarian with a load of money and a knowledge of mortgage brokering, I might be thinking about building a Century 21 or Remax-type brand in mortgage brokering.

Cross-posted from Climate Skeptic.  I believe this to be an extremely important issue.  Catastrophic global warming forecasts are driven not by greenhouse gas theory, but by the theory that the Earth's climate is dominated by positive feedback.  This post discusses these issues:

It is silly to argue whether CO2 in the atmosphere can cause global warming: It clearly does.  The issue is not "if" but "how much".  The warming from man's CO2 might be 8 degrees in a century, as Al Gore might argue, in which case man's CO2 would be incredibly disruptive.  Or it might cause just a few tenths of a degree of warming, which might be unnoticeable within the noise of natural climate variation.

Interestingly, the key to understanding this issue of the amount of warming does not actually lie in greenhouse gas theory.  Most scientists, skeptics and alarmists alike, peg the warming directly from CO2 at between 0.3 and 1.0 degrees Celsius for a doubling in CO2 levels  (this notion of how much temperatures would increase for a doubling of CO2 levels is called climate sensitivity).  If this greenhouse gas warming was the only phenomenon at work, we would expect man-made warming over the next century even using the most dire assumptions to be less than 1C, or about the same amount we have seen (non-catastrophically) over the last century.  Warming forecasts of this magnitude would not in any way, shape, or form justify the draconian economic impacts of many current government carbon reduction proposals.

The key, as I have written before (and here), lies not in greenhouse gas theory itself but in the theory that the earth's climate is dominated by positive feedback.  This theory hypothesizes that small changes in temperature from greenhouse gas increases would be multiplied 3,4,5 times or more by positive feedback effects, from changes in atmospheric water vapor to changing surface albedo.

Let me emphasize again:  The catastrophe results not from greenhouse gas theory, but from the theory of extreme climactic positive feedback.  In a large sense, all the debate in the media is about the wrong thing!  When was the last time you saw the words "positive feedback" in a media article about climate?

Christopher Monckton has an absolutely dead-on post at Roger Pielke's blog about this feedback theory that I want to excerpt in depth.

This chart is a good place to start.  It shows the changes in the IPCC's estimate for climate sensitivity to CO2 and how it has changed over the course of the reports.  More importantly, he splits the forecast between the amount due directly to Co2, and the amount due to the multiplicative effect of positive feedback.  The green bar is the direct contribution of Co2, and the pink is the feedback.

We can observe a couple of things.  First, the IPCC's estimate of the amount of warming due to CO2 directly via the greenhouse gas effect has actually been going down over time.  (Note that there are those, like Richard Lindzen, who suggest these numbers are still three times too high given that we have not observed a difference in surface and lower troposphere warming that greenhouse gas theory seems to predict).

Second, you will see that the IPCC's overall forecasts of climate sensitivity have been going up only because their estimates of positive feedback effects have gone way up.  The IPCC assumes that feedback effects multiply warming from CO2 by three.  And note that the IPCC's forecasts of feedback effects trail those of folks like James Hansen and Al Gore. 

So how confident are we in these feedback effects?  Well, it turns out we are not even sure of the sign!  As Monckton writes:

The feedback factor f accounts for at least two-thirds of all radiative forcing in IPCC (2007); yet it is not expressly quantified, and no "Level Of Scientific Understanding" is assigned either to f or to the two variables b and κ upon which it is dependent....

Indeed, in IPCC (2007) the stated values for the feedbacks that account for more than two-thirds of humankind's imagined effect on global temperatures are taken from a single paper. The value of the coefficient z in the CO₂ forcing equation likewise depends on only one paper. The implicit value of the crucial parameter κ depends upon only two papers, one of which had been written by a lead author of the chapter in question, and neither of which provides any theoretical or empirical justification for the IPCC's chosen value. The notion that the IPCC has drawn on thousands of published, peer-reviewed papers to support its central estimates for the variables from which climate sensitivity is calculated is not supported by the evidence.

Given the importance of feedback to their forecasts, the treatment in the latest IPCC report of feedback borders on the criminal.  I have read the relevant sections and it is nearly impossible to find any kind of discussion of these issues.  A cynical mind might describe the thousands of pages of the IPCC report as the magician grabbing your attention with his left hand to hide what is in his right hand.  And what is being hidden is that ... there is nothing there!  Feedback is the pivotal point on which the whole discussion of drastic carbon abatement should turn and there is nothing there. 

Monckton goes further, to point out that hidden in the IPCC numbers lies an absurdity:

if the upper estimates of each of the climate-relevant feedbacks listed in IPCC (2007) are summed, an instability arises. The maxima are -

Water vapor 1.98, lapse rate -0.58, surface albedo 0.34, cloud albedo 1.07, CO₂ 0.57, total 3.38 W m^-2 K^-1.

The equation f = (1 - bκ)^-1 becomes unstable as b → κ^-1 = 3.2 W m^-2 K^-1. Yet, if each of the individual feedbacks imagined by the IPCC is increased to less than the IPCC's maximum, an instability or "runaway greenhouse effect" is reached.

Yet it is reliably inferred from palaeoclimatological data that no "runaway greenhouse effect" has occurred in the half billion years since the Cambrian era, when atmospheric CO₂ concentration peaked at almost 20 times today's value

Positive feedback can be weird and unstable.  If there is enough of it, processes tend to run away (e.g. nuclear fission), which is what Monckton is arguing that some of the IPCC assumptions lead to.  Even when feedback is less positive, it still can cause processes to fluctuate wildly.  In fact, it is fairly unusual for long-term stable processes like climate to be dominated by positive feedback.  Most scientists, when then meet a new process, would probably assume negative feedback until proven otherwise.  This is a particular issue in climate, where folks like Michael Mann have gone out of their way to argue that the world temperature history over the last 1000 years before man began burning fossil fuels is incredibly stable and unchanging.  If so, how can this be consistent with strong positive feedback?

Anyway, there is a lot more numerical detail in Monckton's post if you want to dig into the equations.

I would add one thing to his analysis:  If you look at the last 100 years of history, the change in temperature given the observed change in CO2 levels comes no where close to a climate sensitivity of 3 or more, even when you assign all historical warming to CO2 rather than other effects like the sun.  In fact, as I showed in this analysis, climate sensitivity appears to be 1.2 when one assigns all past warming to CO2, and something well less than that if one accepts the sun and other effects also play a role.  These historical analyses would point to feedback that is either zero or negative rather than positive, more in line with what one would expect from complex natural systems.

You can see a discussion of many of these topics in the video below:

As in Venezuela, the Mexican government is facing the problem of declining oil production in a state whose national government relies on oil revenues for much of its operating funds.  And, like Venezuela, this is a problem that is self-imposed. 

The ignorance with which most of the media writes about oil reserves is staggering.  Most writers fall in the trap of talking about oil reserves as if they are big pools underground that will eventually be sucked dry and have a fixed recoverable size.  The reality is that the amount of oil that can be pumped from any field depends greatly on how much capital investment one puts into the field.  In the short term, wells even in perfectly viable fields will start to fall off in production unless they are reworked every so often.  Longer term, addition of pumps, water/steam/CO2 injection, drilling deeper, etc. all can greatly extend the life of fields.  There are fields in Texas just as old as those in Mexico which continue to be reinvigorated by investment.  And we continue to find new fields in the US through exploration investment, and would find more if the government did not restrict the most promising areas from exploration.  (by the way, this is why much of the peak oil analysis is BS)

The problem, then, is not that Mexican oil reservoirs are going dry but that the amount of investment required to keep them producing is rising as they age (the converse of the law of diminishing returns is the law of increasing capital investment requirement).  And the Mexican government, like that in Venezuela, is committed to siphoning off oil revenues for short term political spending and to provide gas at below-market pricing rather than reinvest the money in the fields.  In this context, the Mexican government is seeking foreign investment to help bail them out of this problem, while the socialist elements want to keep foreign corporations out.

For once, I agree with the socialists.  I see no reason why US oil companies should venture back into a country that still celebrates as a holiday the day in 1938 when the Mexican government stole the assets of US oil companies.

Postscript:  special recognition to the AZ Republic writer who gratuitously tried to justify nationalization of assets owned by US citizens by claiming that the US oil companies essentially asked for it by "evading Mexican taxes and paying meager salaries."  The entire history of the third world oil industry can be written as follows:
1.  US companies invest huge amounts of capital and know-how to build oil industry
2.  Once things are producing, local government steals it all
3.  Oil fields go into extended decline due to short-term focused and incompetent government management
4.  US companies invited back int to invest huge amounts of know-how and capital
5. repeat

Update: Here is a great example of why peak oil analysis is probably flawed -- such analysis assumes that the size of reserves are static.  But in fact they are not.  They can vary greatly with the price of oil, because the size of the recoverable reserves, as discussed above, depends on how much one is willing to invest in recovering them and that depends on price.

In the next 30 days the USGS (U.S. Geological Survey) will release
a new report giving an accurate resource assessment of the Bakken Oil
Formation that covers North Dakota and portions of South Dakota and
Montana. With new horizontal drilling technology it is believed that
from 175 to 500 billion barrels of recoverable oil are held in this
200,000 square mile reserve that was initially discovered in 1951. The
USGS did an initial study back in 1999 that estimated 400 billion
recoverable barrels were present but with prices bottoming out at $10 a
barrel back then the report was dismissed because of the higher cost of
horizontal drilling techniques that would be needed, estimated at
$20-$40 a barrel.

Today's emails seem to be following the theme of government exempting itself from its own regulations.

In the first story, many California government employees (and their families!) are issued with license plates that effectively exempt them from traffic law violations.

In the second story, the town of Ann Arbor, Michigan sets out on a voyage of discovery in which they find out that minimum wages can drastically increase costs and that different people have different needs.  And so, they exempt themselves from the law.  I am particularly sensitive to this story because the reason the city claims it is unfair to apply the law to them exactly matches my business:

After several months of negotiation, Ann Arbor elected
officials Monday agreed to waive the city's
"living wage'' law for the Ann Arbor Summer
Festival.

What's been at issue is the application of the wage
law to the festival's temporary workers. Under the
living-wage law, groups that have contracts of $10,000 or
more with the city must pay above-minimum wages. That wage
level is now around $12 an hour for employees who don't
receive health benefits.

Because the increased wages would significantly add to the
costs of putting on the festival

Wow, who would have thought that artificially setting wage rates above the market clearing price would increase costs?  But to continue:

City Council Member Chris Easthope, who's promoted the
change, argues that the festival's seasonal employees -
almost all students - are not the kind of workers the wage
law was meant to protect.

"This isn't an attempt to drop people below
living wage levels, but to recognize there are some
short-term events that struggle. I don't think that,
when it was adopted, the living wage was meant to have that
effect on a one-month event.''

Let's see.  I hire temporary seasonal workers in Michigan for about three months of the year.  And thought they are not students, most are retired people in their seventies who are also likely "not the kind of workers the wage law was meant to protect."  In fact, many of my workers are disabled and work slower, so I probably have a better argument than the city.  So where is my exemption? 

Time, not always my favorite publication, hit on a couple of points I have made recently in an article called the Clean Energy Scam.  This article has been around for a few weeks but I am only just now getting to it.

First, I made the point just the other day that inordinate focus on global warming is crowding out other more important environmental issues, sucking the oxygen out of causes like private land trusts that are attempting to preserve unique areas.  As Time says:

The Amazon was the chic eco-cause of the 1990s, revered as an
incomparable storehouse of biodiversity. It's been overshadowed lately
by global warming

Much has been made of Brazil's efforts to reduce imported oil.  Too much credit has been given to ethanol -- most of Brazil's independence came from a number of domestic oil developments.  However, Brazil has been a leading promoter of ethanol through government policy, and this focus on ethanol has had a lot to do with deforestation in the Amazon, as rising crop prices due to biofuel mandates have spurred a rush to clear new land.  Now, US and European ethanol policies are just accelerating this trend:

This land rush is being accelerated by an unlikely source: biofuels. An
explosion in demand for farm-grown fuels has raised global crop prices
to record highs, which is spurring a dramatic expansion of Brazilian
agriculture, which is invading the Amazon at an increasingly alarming
rate.

it never made any sense that a fuel that requires more energy to produce than it provides could ever be "green," but only now are the politically correct forces accepting what I and others have been saying for years:

But several new studies show the biofuel boom is doing exactly the
opposite of what its proponents intended: it's dramatically
accelerating global warming, imperiling the planet in the name of
saving it. Corn ethanol, always environmentally suspect, turns out to
be environmentally disastrous. Even cellulosic ethanol made from
switchgrass, which has been promoted by eco-activists and eco-investors
as well as by President Bush as the fuel of the future, looks less
green than oil-derived gasoline.

The rest of the article is quite good.  I don't like to criticize where other people choose to spend their charitable dollars, but it is just amazing to me that environmentally-concerned people could give $300 million to Al Gore just to squander on advertising.  (By the way, Al Gore claims to have not only invented the Internet, but to have "saved" corn ethanol from government defunding).  I think about how much $300 million could have achieve in private land trusts trying to buy up and preserve the Amazon, and I could cry.  But all I can do is plug along and give what I can.  I donate to both the Nature Conservancy and World Land Trust.

Zimbabwe introduces a new 50,000,000 bank note.  And if you do not understand the post title, shame on you.  Go read this book immediately.

Jeff Charleston, who went nearly wire to wire to win.  Here is the top ten, which yours truly finally managed to crack for the first time.  I picked the fewest correct games, by far, of anyone in the top 10 but got a lot of upset correct and thus scored a bunch of bonus points.  Memphis fans have to be squirming today.  I almost didn't watch the last 2 minutes of the game -- Memphis seemed to have it totally in hand.

The whole thing here.

Congrats to Jeff, and he can send me an email if he would like a free copy of either of my books.  And no, Bennett doesn't win 2 copies for being in second. 

The US Government requires that garage door openers include an electric eye system that prevents the door from closing if the beam is broken.  Unfortunately, given dirty garages, it is really easy for this beam to be blocked by dust and such.  Two years ago, the beam system caused my door to go back up without my knowledge (I just hit the button and went inside) and as a result our garage was robbed that night. 

This time of year is especially frustrating for us.  My garage faces south, so the low sun this time of year overwhelms the electric eye system in most garage doors and causes them to refuse to close.  It is hugely frustrating, and a real security issue.  I glued tubes around each eye to try to shade the sun, but it is still working erratically.  I spent much of last weekend trying to figure out how to bypass the system electrically but I could not make it work.  Finally, I have had enough.  I have spent ten times the cost of the garage door opener in stolen goods and my personal time fighting this stupid device.  Tonight I am going to remove the two eyes and just mount them facing each other on a wall so I don't have to worry about them any more.  Unless someone can come up with a better solution. 

In my mind this is a classic example of government technocracy -- someone decided for us that we should value a minuscule increase in safety over a substantial reduction in security.

There is very little that can make me go non-linear faster than when someone attributes economic growth to a politician, e.g. Reagan's economy or Clinton's economy.  So this post from Kevin Drum on the correlation between economic growth and the flavor of president in the Oval Office is just the kind of thing to make me lose it.  And not because I really care whether Team Coke or Team Pepsi looks better.

Larry Bartels says that Democratic presidents produce higher economic
growth than Republican presidents, and that the differences in average
growth rates for middle-class and poor families (but not affluent
families, apparently, who do well under both parties) are statistically
significant by conventional social-scientific standards.

OK, I have seen the analysis done different ways and accept the statistical conclusion.  You used to be able to get a really tight correlation between Washington Redskin football team performance and presidential election outcomes (via Snopes):

Sometimes one natural phenomenon supposedly
forecasts another, as in the belief that a groundhog's
seeing his shadow on February 2 portends another six weeks of
winter. In other instances the linkage is between affairs of mankind, as in the
superstition that the winner of football's Super
Bowl augurs that year's stock market performance (or vice-versa).

A recent item of this ilk maintains that the results of the last game
played at home by the NFL's Washington Redskins (a football team based in
the national capital, Washington, D.C.) before the U.S.
presidential elections has accurately foretold the winner of the last
fifteen of those political contests, going back to 1944. If the Redskins win
their last home game before the election, the party that occupies the White
House continues to hold it; if the Redskins lose that last home game, the
challenging party's candidate unseats the incumbent president. While we don't
presume there is anything more than a random correlation between these factors,
it is the case that the pattern held true even longer than claimed, stretching
back over seventeen presidential elections since 1936

What gets me is not the existence of a correlation, but the explanation:

In recent decades taxes and transfers have probably been more
important. Social spending. Business regulation or lack thereof. And
don't forget the minimum wage. Over the past 60 years, the real value
of the minimum wage has increased by 16 cents per year under Democratic
presidents and declined by 6 cents per year under Republican
presidents; that's a 3% difference in average income growth for minimum
wage workers, with ramifications for many more workers higher up the
wage scale. So, while I don't pretend to understand all the ways in
which presidents' policy choices shape the income distribution, I see
little reason to doubt that the effects are real and substantial.

I have three thoughts, of which the third is what really gets me:

• It is funny that no one considers that this correlation may work in reverse.  Everyone assumes government drives short-term economic performance.  What if, to some extent, short-term economic performance drives changes in government?  If one assumes that, even without the public spirited and Herculean efforts of our presidents, economies are naturally cyclical, then why try to explain cycles on politics when we know cycles are going to exist anyway.  Why wouldn't a perfectly valid alternate explanation be that one political party tends to be elected if the economy is in one part of the cycle and the other gets elected if the economy is in another place?
• The political brand names "Republican" and "Democrat" shift in meaning over time vis a vis economic policy recommendations, and individual presidents can diverge quite a ways from their party center line.  One can easily argue that Nixon was the most interventionist and economically ignorant president (think:  wage and price controls), despite the "Republican" brand name.  John Kennedy was more laissez faire than most Republicans are today.   Regulation, as measured by pages added to Federal Register, increased at a far faster pace under George Bush (I) than Bill Clinton.  Bill Clinton passed free market legislation, including NAFTA, that John McCain shys away from today, while George Bush passed an expansion of Medicare that Bill Clinton did not consider.  Oh, and when we discuss regulation and such, Congress sortof matter too.
• The author's argument boils down to "the more governors and useless loads we add to an engine, the more strongly the engine will run."  It is just absurd.  None of these guys have the first clue what it takes to run a business day to day, nor how much of a business owner's time and effort is aimed not at service customers better, and not at being more productive, and not at making employees happier or better trainined, but at responding to the latest mass of government regulation, paperwork, liscensing, taxes, and other total crap.  Here is just one example I wrote up about what sits on my desk.

To this last point, take just two things on my desk this morning.  The first is a pile of tax returns and some licensing paperwork.  Last year, our company's total tax bill was not that large.  But the problem is that the government takes the taxes in so many bites, and every bite costs time on our part learning the process and filling out paperwork.  For example, if I take all the taxes and licensing fees we pay to federal, local, and state governments, and multiply times the number of months or quarters each requires a report, I get a number of over 400.  Four hundred individual bites, each with its own paperwork and overhead.

The other problem sitting on my desk is a snack bar I inherited on a lease in California at Lake Piru.  The snack bar is a dump.  It is designed wrong, it is set up to cook the wrong kinds of foods, and uses space in the building very inefficiently.  I want to lay the whole thing out differently, as a win-win for everyone.  We could sell more with fewer workers.  The customers would get more selection, including much healthier choices.  The operation would be safer, because we would eliminate most of the heavy cooking  (e.g. deep fat fryers).  And it would be cleaner, with less wastewater and cleaner wastewater because there would be less grease and oil.

Unfortunately, it is very clear that Ventura County, California is not going to allow me to make these changes, at least at any cost I can afford.  First, apparently I need to build a new wastewater treatment plant for the snack bar!  But I am reducing the waste water load, I argue.  Does not matter.  New code requires a plant.  So because of this environmental code, I am pushed to continue the current operation which is environmentally worse than my proposed alternative.  We have the exact same problem on fire suppression.  But I am removing the ovens and most of the cooking equipment!  It's safer!  Doesn't matter, if I make any change at all, I have to install a new fire suppression system.  And on and on.  this is the true face of government regulation.  We face this kind of thing ten times a day.   

Anyway, I could go on and on about this stuff, but that is what the blog is about, so I will refer you to my past (and future) posts.

Further proof that no one in the media is capable of even the simplest reality-checks when it comes to publishing numbers they get from activist press releases.  This whole concept below is a howler (the idea is that global warming causes volcanoes) but it is the last paragraph that really caught my eye:

So much ice in Iceland has melted in the past century that the pressure on the
land beneath has lessened, which allows more of the rock deep in the ground
to turn to magma. Until the ice melted, the pressure was so intense that the
rock remained solid.

Carolina Pagli, of the University of Leeds, led research which calculated that
over the past century the production of magma had increased by 10 per cent.

The research team, reporting their findings in the journal Geophysical
Research Letters, said an extra 1.4 cu km of magma has been created
under the Vatnajökull ice-cap in the past 100 years.

Since 1890 the ice-cap has lost 10 per cent of its mass, which has allowed the
land to rise by up to 25m (82ft) a year. The volume lost between 1890 and
2003 is estimated at 435 cu km.

Leaving aside cause and effect (e.g. does ice cap melting cause more hot stuff in the ground or does more hot stuff in the ground melt ice), consider the statement that the ground has risen under the ice cap by 82 feet per year for 118 years.  This gives us a rise in the land of 9,676 feet after just 10% of the ice mass has supposedly melted.  Note that this is an enormous, totally non-sensical value.  It implies that a full melting of the ice might increase the land height by 10x this amount, or nearly 100,000 feet  (airplanes stay away!!)  As another check, 9,676 is more than the entire depth of the Iceland ice sheet (it is about the same as what scientists think the Greenland ice sheet depth is).  Another way of looking at this is this is about 1/8-inch land surface rise PER HOUR for the last century. 

I am not sure how any writer or editor on the planet could look at "82 feet a year for 118 years" and not smell a rat.

In his analysis of his hockey stick temperature reconstruction, Michel Mann claimed that his results were robust to changes in certain weighting factors.  Humorously, Steven McIntyre demonstrates that it is robust because when you do the math, the weighting factors actually cancel out of  all the equations.  In effect, Mann was saying that y =3x/x  gives the answer "3" robustly for all values of x (well, except zero).  True, but scientifically meaningless.  But worrisome when a scientist has to run numerous simulations to discover the fact.  I presume he thought his weighting factors were actually doing something in his model.

Reason #4163 to be really, really confident in those climate models these guys are building.

With just three games to go in the tournament, here are the standings:

I had show the top 15, of course, just to sneak myself in.  In fact, there are still 6 people who can win.  If you think of the three games yielding 8 possible game outcomes,  Jeff Charleston wins on three of those outcomes, and Ron Gallagher, Kevin Clary, Craig, Tom Kirkendall and Keith Ehlers each will win if one specific combination comes up.

It is not at all uncommon that voters support restrictions on employers that they would never accept on themselves.  For example, the government has made it pretty clear that normal rights to freedom of association don't really exist in the workplace -- numerous restrictions exist on who I can and cannot hire (or at least not-hire) in my business.

So it will be interesting when the government steps in and tells folks that a very basic freedom of association -- say, the ability to choose who one wants to share an apartment with -- does not really exist.

I feel like I have said what needs to be said on biofuels.  Subsidizing and mandating biofuels with current technologies is terrible fiscal policy, bad environmental policy, ridiculous energy policy, and, perhaps most important, disastrous for the world's poor.

In case you missed all these arguments, Q&O has a pretty comprehensive post here.

I thought it was kind of interesting that upon reading this McKinsey & Co study (currently the top one in the list) on education, Kevin Drum and a number of other left 'o center blogs pulled out this one chart to highlight.  It shows starting teacher pay  (i.e. out of college) as a percent of the economy's average)

The author's of the study argue that the countries higher on this list also have better student results.  Now, I will confess that this is a pretty interesting finding in the study -- that starting teacher pay is more important than teacher pay in later years, because the key is to attract talented people right out of college away from other professions.  Interesting. 

But here is the quite fascinating selection bias by the lefty blogs:  I have read the whole report, and this is absolutely the only chart in the whole study that in any way, shape, or form might be interpreted as a call for higher government education spending.  Even more interesting is what these bloggers left out.  This is the other half of the starting teacher pay analysis Drum et. al. chose note to include, and makes clear that even this chart is not a call for more total spending:

South Korea and Singapore employ fewer teachers than other systems; in effect, this ensures that they can spend more money on each teacher at an equivalent funding level.  Both countries recognize that while class size has relatively little impact on the quality of student outcomes (see above), teacher quality does.  South Korea's student-to-teacher ration is 30:1, compared to an OECD average of 17.1, enabling it in effect to double teacher salaries while maintaining the same overall funding level as other OECD countries....

Singapore has pursued a similar strategy but has also front-loaded compensation.  THis combination allows it to spend less on primary education than almost any other OECD and yet still be able to attract strong candidates into the teaching profession.  In addition, because Singapore and South Korea need fewer teachers,  they are also in a position to be more selective about who becomes a teacher.  This, in turn, increases the status of teaching, making the profession even more attractive.

Whoops!  Don't want our friends at the NEA to see that!  Most of the study turns on McKinsey's finding that teacher quality drives student results, way ahead of any other factor, from class size to socioeconomic background:

Well, now the NEA might be getting really nervous.  Something like this might cause parents to do something rash, like demand that low-performing teachers get fired.  Gasp.

Anyway, to get back to the cherry-picking and selection bias issue, the study is pretty clear that it thinks that "more spending" is a failed strategy for improving public education

If school choice is off the table, then I would be very supportive of a program to increase starting teacher pay, funded by larger class sizes and substantial reductions in useless administrators and assistant principals.  Anyway, it is kind of an interesting study, though you may find the pdf file format really irritating to try to read.  Lots of funny formatting. 

Thanks to an email from a reader, comes this bizarre but all-too-common tale of an industry group supporting licensing to protect itself from competition:

Imagine you were a state legislator and some folks
asked you to pass a law making it a crime to give advice about paint
colors and throw pillows without a license. And imagine they told you
that the only people qualified to place large pieces of furniture in a
room are those who have gotten a college degree in interior design,
completed a two-year apprenticeship, and passed a national licensing
exam. And by the way, it is criminally misleading for people who
practice interior design to use that term without government permission.

You might stare at them incredulously for a moment,
then look down at your calendar and say, "Oh, I get it -- April Fool!"
Right? Wrong.

These folks represent the American Society of Interior
Designers (ASID), an industry group whose members have waged a 30-year,
multimillion-dollar lobbying campaign to legislate their competitors
out of business. And those absurd restrictions on advice about paint
selection, throw pillows and furniture placement represent the actual
fruits of lobbying in places like Alabama, Nevada and Illinois, where
ASID and its local affiliates have peddled their snake-oil mantra that
"Every decision an interior designer makes affects life safety and
quality of life."

Legislative analysis by a half-dozen states that
rebuffed ASID's attempts to cartelize interior design -- including
Colorado, Washington and South Carolina -- has failed to support ASID's
claim that the location of your couch or the color of your bedroom
walls is literally a matter of life and death. As the Colorado
Department of Regulatory Agencies put it, there is "no evidence of
physical or financial harm being caused to . . . consumers by the
unregulated practice of interior designers."

I am not sure this even needs comment.  I traditionally end my posts on licensing with this Milton Friedman quote:

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

Many other posts in the same vein here

Everyone wants to blame their industry's poor economics on banks or the oil companies: (via a reader)

Truckers angry about the high price of fuel staged a rolling protest on
Tuesday, using their big rigs to slow traffic to a crawl on the New
Jersey Turnpike.

The protest was part of a loosely organized
nationwide effort by independent truckers to draw attention to the high
prices they face....

"The gas prices are too high," said one of them, Lamont Newberne, a
34-year-old trucker from Wilmington, N.C. "We don't make enough money
to pay our bills and take care of our family."

Newberne said a
typical run carrying produce from Lakeland, Fla., to the Hunt's Point
Market in The Bronx, N.Y., had cost $600 to $700 a year ago. It now
runs him $1,000...

"The oil company is the boss, what are we going to be able to do about
it?" said Rotenbarger, who was at a truck stop at Baldwin, Fla., about
20 miles west of Jacksonville. "The whole world economy is going to be
controlled by the oil companies. There's nothing we can do about it."

Well, we talked the other day about how oil industry profits, even at this historic high, amount to twenty cents of current gas and diesel prices.  But lets take a more direct comparison.  I looked at Google finance for ExxonMobil and Knight Transportation (a large trucker based here in Phoenix).  If you sum up sales and net income for 2006 and 2007, ExxonMobil earned 10.2% of sales.  During the same period, the trucker earned 9.9% of sales.  This is a statistical dead heat.  So it is kind of hard to say that trucking companies are suffering at the hand of oil companies when they earn the same profit margins.

So what might be the problem?  The article gives a big fat hint that it might not actually be an oil company problem:

Jimmy Lowry, 51, of St. Petersburg, Fla., and others said it costs
about $1 a mile to drive one of the big rigs, although some companies
are offering as little as 87 cents a mile. Diesel cost $4.03 a gallon
at the Jacksonville-area truck stop.

I would certainly be willing to believe that trucking companies are paying independent drivers a price per mile that hasn't kept up with fuel costs.   In particular, it may be that the independent truckers have the same problem that Bear Stearns had, ie their revenues are tied into long term contracts while their costs float short term.  I'd certainly be bargaining for either higher mileage rates or a new rate structure with a fuel surcharge.

Yeah, I know they seem to care so much, but nearly every policy they actively advocate turns out to be a disaster for the poor.  Here is a great example:

In May 2002, in the midst of a severe food shortage in sub-Saharan
Africa, the government of Zimbabwe turned away 10,000 tons of corn from
the World Food Program (WFP). The WFP then diverted the food to other
countries, including Zambia, where 2.5 million people were in need. The
Zambian government locked away the corn, banned its distribution, and
stopped another shipment on its way to the country. "Simply because my
people are hungry," President Levy Mwanawasa later said, "is no
justification to give them poison."

The corn came from farms in the United States, where most corn
produced"”and consumed"”comes from seeds that have been engineered to
resist some pests, and thus qualifies as genetically modified.
Throughout the 90s, genetically modified foods were seen as holding
promise for the farmers of Africa, so long as multinationals would
invest in developing superior African crops rather than extend the
technology only to the rich. When Zambia and Zimbabwe turned away food
aid, simmering controversy over the crops themselves brimmed over and
seeped into almost every African state. Cast as toxic to humans,
destructive to the environment, and part of a corporate plot to
immiserate the poor, cutting edge farming technology is most feared
where it is most needed.

This is simply awful, and is driven by progressive politics in Europe that abhor GM food, despite reams of scientific evidence and years of experience that it has no demonstrable health effect.  (It is particularly ironic that GM corn should be the target, since corn as we know it is a man-made genetically modified food, albeit by the slow process of cross-breeding.  The very existence of corn is one of the great triumphs of pre-Columbian agriculture.)

A key element of progressive politics is to apply western middle class perspectives to Third World problems.  In this case, Europeans who are wealthy and well-fed have time and capacity to worry about problems at the margin, such as "might GM corn somehow have a negative health effect on one in a million people?"  I believe this concern is absurd even at the margin in western society, but it becomes criminally insane when applied to countries beset with abject poverty and starvation.  So we would rather let a million people starve than have one person face some hypothetical health risk?

This same approach can be seen in a myriad of other instances.  For example, progressive wish to prevent Nike from building factories in the Third World that hire locals for fifty cents a day.  Again, the middle class western perspective:  I would never take a job that paid $5 a day for ten hours of labor, so they should not either.  But this is in countries where more than half of the population makes less than $1 a day performing subsistence farming for perhaps 12-14 hours a day, and even then risk starvation when the crop fails.  The Nike factory represents incredible salvation for many.  Do we all hope they will do even better economically in the future?  Sure, but you can't step from unskilled subsistence farming for a dollar a day to middle manager at GE all in one step.

And then there is climate.  The climate change hysteria, and the associated calls for reductions 80% or higher in CO2 output, is the greatest threat to the world's poor that has existed since the bubonic plague.  And yes, I mean the hysteria, not climate change itself.  Because if the world gets warmer because of man's CO2  (an iffy proposition), the poor might or might not be worse off.  After all, it was during warm periods of the past that the poor thrived, such as the population boom in Europe during the Medieval warm period.  But if the world's governments agree to shut down fossil fuel production and reduce the size of economies, over a billion people who are set to emerge from poverty over the next few decades will instead be doomed to remain poor.  Progressive environmentalists are not even subtle about what they want -- they are seeking a poorer, lower-tech world.  They are selling poverty.

Brendan O'Neil writes in this vein:

In these various scandalous schemes,
we can glimpse the iron fist that lurks within environmentalism's green
velvet glove. "˜Cutting back carbon emissions' is the goal to which
virtually every Western politician, celebrity and youthful activist has
committed himself. Yet for the poorest people around the world,
"˜reducing carbon output' means saying no to machinery and instead
getting your family to do hard physical labour, or it involves
collecting cow dung and burning it in an eco-stove in order to keep
yourself warm.... Carbon-offsetting companies have encouraged Kenyans
to use dung-powered generators and Indians to replace kerosene lamps
with solar-powered lamps, while carbon-offsetting tree-planting
projects in Guatemala, Ecuador and Uganda have reportedly disrupted
local communities' water supplies, led to the eviction of thousands of
villagers from their land, and cheated local people of their promised
income for the upkeep of these Western conscience-salving trees....

Carbon
offsetting is not some cowboy activity, or an aberration, or a
distraction from "˜true environmentalist goals' - rather it expresses
the very essence of environmentalism. In its project of transforming
vast swathes of the developing world into guilt-massaging zones for
comfortable Westerners, where trees are planted or farmers' work is
made tougher and more time-consuming in order to offset the activities
of Americans and Europeans, carbon offsetting perfectly captures both
the narcissistic and anti-development underpinnings of the politics of
environmentalism. Where traditional imperialism conquered poor nations
in order to exploit their labour and resources, today's global
environmentalist consensus is increasingly using the Third World as a
place in which to work out the West's moral hang-ups....

Carbon-offsetting also shines a light on the dangerously anti-development sentiment in environmentalism....

In the near term, countries are already using global warming as an excuse for protectionism, and in particular are cutting off imports from poorer countries that are trying to make some economic progress:

There is little
that angers me more than disingenuous attempts to employ "˜global
warming' as an argument against trade, especially against trade from
the developing world. More often than not, blatant self-interest - that
is, old-fashioned protectionism by another name -  is being masked
beneath self-righteous, middle-class gobbledygook.               

               

Such a case is brilliantly exposed today by Dominic Lawson writing in The Independent ["˜Food
miles are just a form of protectionism. Middle-class neurosis is being
exploited to protect an archaic form of agriculture' (April 1)]:

               

"Was
Prince Charles' chum Patrick Holden, director of the Soil Association,
expecting the Kenyan High Commissioner to fall to his knees in
gratitude? It rather sounded like it yesterday morning, when the two of
them met in a BBC radio studio.

               

They
were there to discuss the Soil Association's proposals to discriminate
against the "˜organic food' which is air freighted into this country,
mostly from East Africa. "˜One option was to ban it altogether,'
declared Mr Holden, but instead he and his colleagues had decided that
such food would only be banned if it was "˜not produced ethically' -
whatever that means....

"On the whole it
is a "˜lifestyle choice' limited to middle-class mothers in the
South-east of England who are neurotic enough to believe the
insinuations of the Soil Association that little Henry and Caroline are
more likely to get cancer if mummy doesn't buy organic (at twice the
price).    

Now
another largely middle-class neurosis - we are all doomed unless
everybody stops flying! - is being exploited to protect an archaic form
of agriculture which could never feed this country, still less the
world. It
is, at best, an exercise in self-delusion. At worst, it is a way of
using food as the instrument of a deliberate policy of racial
discrimination."

Maxed Out Mamma has more on the global warming excuse for protectionism:

I am genuinely concerned
that environmental concerns are being used as a proxy for protectionist
economic legislation and may have severe consequences. I would like to
discuss this article from a Canadian source about carbon taxation:

Imposing
carbon tariffs on emerging economies with low manufacturing costs and
high greenhouse gas emissions could drive some manufacturers back to
Western countries, according to two economists.

Jeff
Rubin, chief strategist and economist at CIBC World Markets, thinks
such tariffs could emerge quickly. Countries in Europe are already
becoming publicly intolerant of emissions elsewhere and the next
president of the United States is expected to institute a cap on
greenhouse gas emissions alongside the trading of carbon credits.

...Europe is in an extremely
protectionist mood, and I believe one of the reasons for the
non-scientifically based focus on carbon is that it serves as a
justification for tariffs. If the next president does institute carbon
tariffs, the result will have a real impact on world trade.

I
believe that many politicians are being deeply dishonest about their
"environmental" concerns. I also believe that instituting a carbon
tariff will cause Asian growth to slow remarkably and further
destabilize the world economy. The rise in food prices is very
dangerous because it has an impact on the ability of emerging market
countries to support consumption increases necessary to rebalance
trade. If you add to the situation by doing something like this, you
could recreate the conditions which caused the Great Depression.

YouTube seems to be RickRolling visitors, no matter what video one requests when you click on one of the featured videos.  Pretty funny.  Happy April Fools Day.