Coyote Blog

Kevin Drum titles a post on providing government incentives for high MPG cars "Ending the Addiction,"  by which I presume he means addiction to gasoline.   I really struggle with the point of view on life that describes consumer affinity for enormously value-producing technologies to be an "addiction."  One could equally well refer to our preference for good health or prosperity to be an "addiction," particularly when fossil fuels have played such a central role in fueling the industrial revolution and the prosperity which it has brought.  With the current jump in oil prices tied so closely to growing wealth in China, never has the tie between fossil fuel use and prosperity been more obvious.

Drum advocates for what he calls a "progressive" proposal:

For cars, the most effective thing would be a "feebate": In the
showroom, less-efficient models would have a corresponding fee, while
the more-efficient ones would get a rebate paid for by the fees. That
way when choosing what model you want you would pay attention to fuel
savings over its whole life, not just the first year or two. It turns
out that the automakers can actually make more money this way because
they will want to get their cars from the fee zone into the rebate zone
by putting in more technology. The technology has a higher profit
margin than the rest of the vehicle.

I will say that this is probably less bad than other "progressive" proposals I have heard, but the logic here is based on consumer ineptness.  Higher gas prices, which drive higher lifecycle costs, are presumably providing exactly this incentive without any government program.  The problem, it seems, is that progressives don't think very much of the common people they wish to defend.  Just as the justification for Social Security is that the average person can't be trusted to make good decisions about their retirement savings so we elites will do it for them, this seems to be the logic here, but even more patronizing.   Here is the best bit which really demonstrates the point I am making:

Here's a further suggestion: require stickers to list the estimated cost of fuel consumption over a five year period.

Basically this calculation is total estimated miles per year divided by mpg times estimated gas prices times five. A simple piece of math with four numbers that can be completed on a calculator in 10 seconds or by hand in less than 30 seconds.  Mr. Drum, a big supporter of our current monopoly government school system, apparently does not think that people educated in this system can do this math for themselves.  Could it be clearer that "progressivism" is really about disdain for the common man and a belief that elites should make even the smallest decisions for them?

OK, here is my question:  Do the folks in this article understand incentives and simply ignore them, or are they truly ignorant?

In a move that would make zero a grade of the past, the Chapel
Hill-Carrboro school district is considering making 61 the lowest grade
for a failing assignment.

The goal would be to assure that a single
test-day disaster doesn't ruin a semester. Some teachers, students and
parents say the change would coddle failing students....

Homework would not count for more than 20 percent of the quarterly
grade, according to the proposal. Other proposed revisions include
giving students more time to make up incomplete assignments while
offering more support strategies, making it easier for them to pass.

"Students
[would] have a chance to recover," Martin said. "Getting a bad grade or
having a bad day does not mean you are a failure. This is about hope."

There is simply no way this is going to help, and it is amazing to me that educated people can't see it, yet I think that is the case (I don't believe they are trying to be evil)  A staggeringly large percentage of what goes awry in the world can be explained by bad or mismatched incentives, so it is incredible to me that our education system seems to so consistently resist teaching this topic.

A good column on gas prices by George Will.

Can a senator, with so many things on his mind, know so precisely how
the price of gasoline would respond to that increase in the oil supply?
Schumer does know that if you increase the supply of something, the
price of it probably will fall. That is why he and 96 other senators
recently voted to increase the supply of oil on the market by stopping
the flow of oil into the Strategic Petroleum Reserve,
which protects against major physical interruptions. Seventy-one of the
97 senators who voted to stop filling the reserve also oppose drilling
in the Arctic National Wildlife Refuge.

One million barrels is what might today be flowing from ANWR if in 1995 President Bill Clinton
had not vetoed legislation to permit drilling there. One million
barrels produce 27 million gallons of gasoline and diesel fuel.
Seventy-two of today's senators -- including Schumer, of course, and 38
other Democrats, including Barack Obama, and 33 Republicans, including John McCain -- have voted to keep ANWR's estimated 10.4 billion barrels of oil off the market.

The Europeans have crafted a regulatory environment in their labor market that grants all kinds of protections and gauranteed benefits at the expense of new or unskilled workers trying to join the workforce.  We are doing the same thing:

This year, it's harder than ever for teens to find a summer job. Researchers at Northeastern University
described summer 2007 as "the worst in post-World War II history" for
teen summer employment, and those same researchers say that 2008 is
poised to be "even worse."

According to their data, only about
one-third of Americans 16 to 19 years old will have a job this summer,
and vulnerable low-income and minority teens are going to fare even
worse.

The percentage of teens classified as "unemployed""”those
who are actively seeking a job but can't get one"”is more than three
times higher than the national unemployment rate, according to the most
recent Department of Labor statistics.

One of the prime reasons
for this drastic employment drought is the mandated wage hikes that
policymakers have forced down the throats of local businesses. Economic
research has shown time and again that increasing the minimum wage
destroys jobs for low-skilled workers while doing little to address
poverty.

According to economist David Neumark of the University of California at Irvine,
for every 10 percent increase in the minimum wage, employment for high
school dropouts and young black adults and teenagers falls by 8.5
percent. In the past 11 months alone, the United States' minimum wage has increased by more than twice that amount.

My son and I went to see a game today in Yankee Stadium. both because he is a big Yankees fan and to see Yankee Stadium one last time before they tear it down.  While the Yanks lost, with Mariano Rivera giving up a solo home run in the 9th, my son, who is a huge A-Rod fan, got to see A-Rod go yard to tie the game in the 8th.  A couple of observations:

• There is a whole different seat-ethic going on in Yankee Stadium.  Every single time we got up to get food or go to the bathroom, we found someone in our seats.  Seat numbers on tickets seem to be a recommendation rather than an absolute assignment
• If you leave aside the history, there are a lot of very good design reasons for blowing up Yankee Stadium.
• The Yanks showed a nice Rocky-themed film in the 8th, but puh-leeze -- there is not any team in the world that can less wrap itself in the mantle of scrappy underdog.  If any team is Apollo Creed, its the Yankees.
• Enter the Sandman is great entry music for a closer like Rivera.

Oh, those wacky guys on the UN "Human Rights" Council.  They are now looking to Saudi Arabia as a model for protection of individual rights:

The top U.N. rights body on Thursday passed a resolution proposed by
Islamic countries saying it is deeply concerned about the defamation of
religions and urging governments to prohibit it.

The European Union said the text was one-sided because it primarily focused on Islam.

The U.N. Human Rights Council, which is dominated by Arab and other
Muslim countries, adopted the resolution on a 21-10 vote over the
opposition of Europe and Canada....

The resolution "urges states to take actions to prohibit the
dissemination ... of racist and xenophobic ideas" and material that
would incite to religious hatred. It also urges states to adopt laws
that would protect against hatred and discrimination stemming from
religious defamation.

Saudi Arabia said, "Maybe Islam is one of the most obvious victims of aggressions under the pretext of freedom of expression."

"It is regrettable that there are false translations and
interpretations of the freedom of expression," the Saudi delegation
told the council, adding that no culture should incite to religious
hatred by attacking sacred teachings.

Hat tip:  Yet another Weird SF Fan

Update:  I am kind of amazed the irony is lost on some folks, so I guess I need to be more explicit:  I found it depressing that the UN Human Rights Council is calling for limits on speech.

I am not big on arguing the immigration issue from an integration perspective, any more than I like to argue about who will pick the lettuce.  Free movement around the globe and the ability to take a job by mutual consent of the two parties rather than based on their country of origin should drive immigraiton policy.

I live in the state with the highest percentage of illegal immigrants, and I have never gotten my head around why this was culturally bad.  I think the Hispanic culture here brings at least as much to the table as, say, the Irish do in Boston.  So I did not find this to be surprising (from the Manhattan Institute, via Reason)

In general, the longer an immigrant lives in the United States, the
more characteristics of native citizens he or she tends to take on,
said Jacob L. Vigdor, a professor at Duke University
and author of the study. During periods of intense immigration, such as
from 1870 to 1920, or during the immigration wave that began in the
1970s, new arrivals tend to drag down the average assimilation index of
the foreign-born population as a whole.

The report found,
however, that the speed with which new arrivals take on native-born
traits has increased since the 1990s. As a result, even though the
foreign population doubled during that period, the newcomers did not
drive down the overall assimilation index of the foreign-born
population. Instead, it held relatively steady from 1990 to 2006.

"This
is something unprecedented in U.S. history," Vigdor said. "It shows
that the nation's capacity to assimilate new immigrants is strong."

Lots of new blog posts today.  The reasons is that I am in introvert's bliss, dodging the requirement to stand by my wife at reunions and be introduced to a lot of people I don't know and don't really know how to begin talking to.  So I have retreated to the Vassar library, a beautiful example of college Gothic, with my kids.   The only small problem I have is that I think some parents need to teach their kids better library manners.  Lots of kids dumped here in the library today, and teenagers are all around my watching YouTube with the sound turned way up and talking loudly about what they are seeing.  However, having avoided all social interaction, I am resisting the downward spiral into grumpy-old-man land by not snapping at the kids around me.

First, it was the National Recovery Act, where FDR explicitly tried to creat an economic system modelled on Mussolini-style fascism.  This was killed by the Supreme Court.  But the will of government to create an economic system where private companies win and lose based on how well connected they are to politicians never goes away.  The lastest attempt to set up such a managed system was via the Lieberman-Warner climate bill:

But perhaps even more pernicious is the way that "carbon credits" are distributed.

The credits are best described as a pulled-out-of-thin-air government-created fiat currency,
that is accepted only by the government in exchange for the
government's permission to let you emit CO2. (If ever a system was perfectly set up to be abused and politicized by politicians, this is it.)

Government bureaucrats will decide
sector by sector and industry by industry which companies get the
credits. Implicitly, that same decision by government regulators also
determines which companies will need to buy credits from the politically-connected companies who could get their carbon credits for free.

OK, so this guy committed fraud:

In the hundreds of bills for which he has provided estimates to
lawmakers since 2000, the actuary, Jonathan Schwartz, said legislation
adjusting the pensions of public employees would have no cost, or
limited cost, to the city.

But just 11 of the more than 50 bills vetted by Mr. Schwartz that
have become law since 2000 will result in the $500 million in eventual
costs, or more than $60 million annually, according to projections
provided by Robert C. North Jr., the independent actuary of the city
pension system, and by Mayor Michael R. Bloomberg's office....

Mr. North and other city employees made the calculations on the 11
bills when they were before the Legislature, but for the other bills,
no alternative to Mr. Schwartz's projections could be found. The New
York Times reported last month that in an arrangement that had not been
publicly disclosed, Mr. Schwartz was being paid by labor unions. He
acknowledged in an interview that he skewed his work to favor the
public employees, calling his job "a step above voodoo."

But really, did any of the legislators supporting these bills really think the costs were zero?  If the public employees union is asking for a pension change, you can be sure it is not to save the state money.  This does not let legislators off the hook for failing to exercises any common sense.

Last year, Al Gore won the Nobel Peace Prize for proposing world-wide government actions that will prevent a billion of more people form escaping poverty.  But, once upon a time, Norman Borlaug won a Peace Prize for actually helping the poor help themselves.  Here is what he is saying today.  Folks from the EU to Bono to Al Gore are standing in the way, again, of people feeding themselves by aggressively applying the technology we take for granted in America:

Yields can still be increased by 50-100% in much of the Indian sub-Continent,
Latin America, the former USSR and Eastern Europe, and by 100-200% in much of
sub-Saharan Africa, providing political stability is maintained, bureaucracies
that destroys entrepreneurial initiative are reigned in, and their researchers
and extension workers devote more energy to putting science and technology to
work at the farm level....

I now say that the world has the technology - either available or
well-advanced in the research pipeline - to feed a population of 10 billion
people. The more pertinent question today is whether farmers and ranchers will
be permitted to use this new technology. Extremists in the environmental
movement from the rich nations seem to be doing everything they can to stop
scientific progress in its tracks. Small, but vociferous and highly effective
and well-funded, anti-science and technology groups are slowing the application
of new technology, whether it be developed from biotechnology or more
conventional methods of agricultural science. I am particularly alarmed by those
who seek to deny small-scale farmers of the Third World -and especially those in
sub-Saharan Africa - access to the improved seeds, fertilizers, and crop
protection chemicals that have allowed the affluent nations the luxury of
plentiful and inexpensive foodstuffs which, in turn, has accelerated their
economic development.

What is adult prohibition of marijuana achieving, if teenage use rates of marijuana are nearly as high as those for cigarettes, where we don't have adult prohibition.  Prohibitionists argue that adult marijuana must be banned because its legal availability to adults would make it easier for teens to obtain, but a direct comparison of marijuana and tobacco smoking demonstrates little utility from this approach:

The cigarette use figure represents a sharp drop from
the 2005 survey, when it was 23 percent. Marijuana use, at 20.2 percent
in 2005, showed a much smaller decline....

Another report
released this week, the Fiscal Year 2007 Annual Synar Report on tobacco
sales to youth, showed the 10th straight annual decline in the rate of
illegal tobacco sales to minors. In 1997, 40.1 percent of retailers
violated laws against tobacco sales to minors. In 2007 the rate had
dropped to just 10.5 percent, the lowest ever.

"Efforts to curb
cigarette sales to teens have been wildly successful, and it's past
time we applied those lessons to marijuana," said Aaron Houston,
director of government relations for the Marijuana Policy Project in
Washington, D.C. "Tobacco retailers can be fined or put out of business
if they sell to kids, but prohibition guarantees that we have zero
control over marijuana dealers. Foolish policies have guaranteed that
the marijuana industry is completely unregulated."

Jacob Sullum provides additional analysis in the rest of the post.

I don't know much about geothermal power, but I do know I don't hear much talk about it of late.  Anthony Watt thinks this is a mistake, and discusses the potential.  To some extent, the problem with geothermal's acceptance is that it breaks our current centralized power model in favor of distributed power.  There are few spots where geothermal potential is large enough to run a big power plant, but apparently many where there is the ability to heat a single building.

A while back, Megan McArdle observed that Sweden's semi-socialist state performed well for a number of years, riding on residual work ethic in the system, a sort of cultural bank that eventually will be overdrawn.   According to Michael Moynihan, it appears this point has been reached:

Sweden does have the highest rate of workers on sick leave in
Europe, despite being consistently ranked by the OECD as Europe's
healthiest country. As my former colleague Johan Norberg has observed,
sick leave payments"”which, at the time of the last election, were as
high as 80 percent of a worker's salary"”accounted for a staggering 16
percent of the government budget.

Wow!  That is really staggering.  And not at all surprising.  Even in this country, I can't tell you how many people there are who consider a permanent disability to be roughly equivalent to hitting the lottery.  Income for life, without working!  I even had one woman who sued my company for actually (as the law requires) reporting her salary to the tax authorities rather than paying her under the table as she had hoped.  By creating evidence she could work, I endangered her disability application that was in the works (she kept a set of crutches in her car which she only used when on business related to this application).

The government figure of 7 percent unemployment was repeatedly mocked
by both former Prime Minister Göran Persson's detractors and allies. A
study by McKinsey Global estimated the true figure"”which included those
on sick leave, in early retirement, in jobs programs"”to be between 15
and 17 percent. Jan Edling, a researcher with the Social Democratic
trade union LO, estimated the total figure of unemployed to be 19.7
percent. (Edling's report was suppressed and he was himself offered
"early retirement.") The Confederation of Swedish Enterprise said the
figure was 16.5 percent. Other studies ranged from 12 percent to 18
percent.

The author also makes a point I have tried to make a number of times -- that the ability of the US economy to integrate and give opportunity to poor immigrants is a huge positive, in terms of assessing relative merits of different economic systems on the poor, that is never considered when evaluating European welfare states:
And the problem of unemployment in Sweden loops back around to the
difficulty Sweden has had in integrating its immigrants into the job
market.

As Swedish economist Esra Karakaya wrote in Aftonbladet in 2006,
the unemployment rate among immigrants in Sweden is 29 percent"”another
staggering figure, in marked contrast to the joblessness rate among
immigrants in this country. This, Karakaya convincingly argues, is
"because the labor market is governed by rigid job security laws" that
are incompatible with a globalized economy. Indeed, a recent study
tracking the fortunes of Somali immigrants in Sweden and in Minneapolis
(reported here in Swedish, summarized here in English)
found that its sample group in the U.S. started approximately 800
companies. In Sweden, they managed only 38. In a recent editorial in
the newspaper Expressen, Nima Sanandaji, a Kurdish immigrant, argued that
it was "important to study how the Swedish system of benefits, taxes
and [regulated] job market leads the same group of people to be
successful on one side of the Atlantic and to social poverty and
dependence in Sweden."

By the way, when you do the analysis right, the poorest quintile in Sweden does about the same as in the US.  The difference is that in 10 years, the poorest quintile in Sweden will still be the same folks, while the poorest quintile in the US will have moved up, to be replaced with new immigrants.

The Anti-planner observes:

Over the past 25 years, the population of the Pittsburgh urban area
has remained fixed at about 1.8 million people. Driving, however, has
increased by almost 50 percent.

During this period, Pittsburgh has spent hundreds of millions of
dollars upgrading light-rail lines, building exclusive busways, and "”
in the latest project "” building a $435 million transit tunnel under the Allegheny River. Despite (or because of) this investment, transit ridership has dropped by more than 25 percent.

Although the numbers vary slightly from place to place, Pittsburgh's
story is pretty typical of transit everywhere. Sure, some cities have
seen ridership gains, but subsidies to transit are huge and transit
does not make a notable (meaning 5 percent or more) contribution to
personal mobility in any urban area except New York (where it is 10
percent).

He has a good summary of what's wrong and what might work instead.  I appreciated this observation in particular:

Why do we put up with this? The answer, of course, is that transit is
pork. "For most transit agencies in the United States, if they were to
write a mission statement that is reflective of what they do, they
would indicate that they exist for the purpose of serving their
employees and vendors," not transit riders, notes Cox.

Tim Harford Via TJIC:

Superficially, it seems that many people seek sunny climes,
especially now that air conditioning is available. For example,
long-run population growth in the "Sunbelt" "” the US South - is often
attributed to a demand for, well, sun.

Harvard economists Ed Glaeser and Kristina Tobio think
otherwise. They argue that before 1980, the boom in the South was
thanks to the region's growing productivity. After 1980, population
continued to grow, but house prices lagged behind those elsewhere in
the US, suggesting that the driving force was not high demand but
permissive planning rules. Certainly balmy California, with its tighter
restrictions on building, did not enjoy the same population growth.

All of this tends to suggest that people don't value sunshine quite as much as is supposed.

I have pretty convincing anecdotal evidence that the first part, at least, is true.  I worked for a large manufacturing corporation called Emerson Electric (no relation to the electronics company).  They are one of the few Fortune 50 companies not at all coy to admit that they move factories around the world chasing lower wages.  They had an epiphany decades ago, when in their planning, they assumed the move overseas was always a trade-off of wages for productivity... until they visited at motor plant in Brazil that had first world automation and productivity combined with third world wages.  That got their attention.  To their credit, they have pushed this further and further, such that not only are their factory workers in Mexico, but their plant superintendents and skilled workers and even their engineers are now Mexican too.

Anyway, if you listen to the company tell this story, phase 1 of the story was not a move to Mexico or Asia but to the south.  They must have moved probably 50 manufacturing plants over a decade from the northeast to the south during the sixties and seventies. 

This constant movement seems to be a natural life-cycle of locations as they grow wealthy.  Poorer regions eagerly welcome newcomers who may bring jobs and prosperity.  But, once the prosperity is there, the prosperous in town begin using government and other institutions to try to lock in their gains.  Corporations use government to fight new competitors.  Wealthy homeowners pass zoning to keep home prices high and rising.  Unions tend to increase and lock in gains for current workers at the expense of new workers.  A kind of culture of hostility emerges to any new job that makes less than $54,000 a year, any house that costs less than $400,000, and any immigrant who doesn't have a pale face.

A friend of Megan McArdle calls the Boston city hall "a poured concrete Vogon love poem.  What a great line, and entirely appropriate of a hideous example of public architecture.  But I would have singled out a different Boston structure, the Peabody Terrace Apartments at Harvard.

Since this is the last time I may be hitting the theme of Vogon poetry for a while, I laughed the other day on a course on the Roman emperers when the professor said that Nero would force the upper class to attend his musical and poetry performances, and that some invitees where known to fake death to try to escape.

I am at my wife's college reunion, basically 2 days of continuous cocktail party conversation with people I do not know and who are here mainly to see long-lost friends rather than meet anyone new.  Not my best milieu. 

Very often on this blog I criticize some ill-conceived government intervention as being bloated and/or ineffective and ill-conceived.  A great example is corn-ethanol, where the government has spent billions and caused consumers to spend additional billions in higher food and gas prices, all for a technology that does nothing to reduce oil consumption or CO2 output.

Too often, I criticize these programs for being stupid and ill-conceived, which they are.  But what I don't take the time to also point out is the necessarily narrow focus of these government actions.  No matter how hard Congress works to stuff energy and farm bills with every micro-managing pork barrel project their campaign donors could wish for, Congress still only has the bandwidth to affect a tiny fraction of a percent of what a single change in market prices can achieve.  Prices have absolutely stunning power of communication.  When gas prices go up, every single citizen likely reassesses his/her behavior and spending in a myriad of ways.  Thousands of entrepreneurs sit at their desk staring at the walls, trying to dream up business opportunities that these new prices may signal.  And thousands of energy producers, from the tiniest to the largest, rethink their investment plans and priorities. 

I made some feed changes.  Can someone who has had problems with my feed please try it again and let me know by email if it is still broken or is working.  Thanks

I think regular readers know that I am not one to see Islamic terrorists hiding under every rock.  In fact, I am not sure I have written a single post on the current state of Islam or ties to terrorism.  I don't see the world primarily in terms of some great culture war with Islam.  Certainly a number of fundamentalist Islamic states suck in terms of human rights, and some of that is probably due to ties with Islam, but many other states suck nearly as much without any Muslim help.

That being said, I must say as someone interested in history that this argument from Dr. Mahmoud Mustafa Ayoub of Berkeley, as reported from the Canadian human rights tribunal by Andrew Coyne, strains credulity:

What is jihad? Article equates it with Al Qaeda: fighting,
suicide bombing etc. But word actually means, originally, "to strive,
to do one's best." Koranic sense is that religious struggle we must all
engage in within our souls against evil tendencies. There is also
"social jihad," the obligation to change things that are wrong. This does not mean violence. The Koran is not a book of violence.

The notion of armed struggle, or violent jihad, is
mentioned in the Koran. "Permission has been given to those who have
been wronged only because they say God is our lord that they fight in
self-defence." (Sura 22.) So jihad is not limited to fighting "” it's just one type of jihad,
and should only be done in self-defence. The extremist, violent types
are an anomaly. "They are more a problem for us than for the west."

I have no problem with modern folks interpreting the Koran in this way for themselves.  But this is absurd from a historical context.  This portrayal of jihad as a sort of peaceful civil rights movement may be how moderate Muslims want to make the Koran relevant to their modern life, but it is outrageous in the historic context of if the 7th century.  People of all faiths in this era didn't have sit-ins to correct social wrongs -- they gathered up their friends and some swords and went out to try to chop up the folks who did them wrong.  Muhammad was a brilliant military leader, uniting disparate Arab tribes out of nowhere to carve out a huge part of the western world as their empire.  His (and his successors') achievement is roughly equivalent to an unknown set of tribes suddenly bursting out of the Amazon and taking over modern North America.

The concept of jihad as originally applied in the 7th and 8th centuries was bloody and militaristic -- and effective.  So much so that the Catholics copied many of the key parts for their crusades.  The 7th century was a totally different world in its outlook and assumptions.  Here is one example:  We have heard many times of the slave revolts in Rome, and most of us have seen Spartacus.  But not a single person in the 1000 years of the Roman empire, slave or not, is recorded to have ever advocated the elimination of slavery.  They may have wanted to be free themselves, or treated better, but everyone accepted the institution of slavery even while trying not to be a slave themselves.  We, with our 19th century anti-slavery movement, see the slave revolts of Rome as something they simply were not.  I believe a similar revisionism is at work here on jihad.

All that being said, I have no opinion on whether or not the militaristic concept of jihad animates any substantial number of modern Muslims or not.  I simply am not well enough informed, and currently find it hard to find any text discussing this issue that is trustworthy on either side.

Postscript:  It is true that the Muslims showed special respect in their lands to Jews and Christians  - in part for religious reasons and in part for practical reasons related to special taxes.  The Spain of three religions under Muslim rule was certainly more dynamic and tolerant than the counter-reformation Catholic Spain.  But this fact does not obviate the militaristic origins of jihad.  Islam respected Christians and Jews .... in the lands where the Muslims had taken over and ruled. Where Muslims did not yet rule but wanted to, all bets were off.

After years of arguing that expanded credit is critical for the poor, and attacking banks for "red-lining" poor and minority districts, the liberal-left of this country has reversed directions, and has decided that the poor can't handle credit.

No matter how much folks want to paint the recent mortgage problem as some sort of fraud perptrated on homeowners, the fact of the matter is that in large part, lenders lowered their income standards and a lot of those folks now can't pay.  While we have yet to see any specific legislation beyond bailouts, it is impossible for me to imagine any reaction-regulation that does not have the consequence (intended or not) of restricting credit to the poor.

But these restrictions are not limited to the housing market.  Many states, for example, are cracking down and even outright banning payday loan companies, often the last resort (legal) credit source before people turn to the loansharks.  First in Ohio (via Mises Blog)

  If Ohio's 1,600 payday-lending stores want to continue operating past this fall, it
appears they will have to find something else to offer besides payday loans.

   A hotly debated bill that effectively would spell the end of the short-term,
high-interest payday-lending industry in Ohio sailed through the Ohio Senate yesterday despite
pleas from lenders that their stores would close and 6,000 employees would be put out of work.

   The Senate was unable to find a compromise that both satisfied payday lenders and
eliminated the debt trap that bill supporters said forced too many borrowers to take out new loans
to pay for old ones. So it did what the House did last month: dropped the hammer.

   "I think everybody said there is just no way to redeem this product. It's
fundamentally flawed," Bill Faith, a leader of the Ohio Coalition for Responsible Lending, said of
the twoweek loans. The industry "drew a line in the sand, and the legislature kicked the line aside
and said we're done with this toxic product."

And perhaps soon in Arizona.  Yes, the interest rates are astonishing, though the dollars involved are seldom huge for the short life and small size of the loan.  And, as an extra added bonus, Tony Soprano does not send someone to break your legs if you don't pay (the Sopranos being the only alternative provider once payday loan companies are illegal).

So, for those of you oppose payday loans, you are welcome to comment below about what a bad idea they are.  However, I challenge folks to criticize payday loans without simultaneously implicitly expressing disdain for the intelligence of payday loan customers, or trumpeting your ability to make better decisions for payday loan customers than they can make for themselves.

However, for those who think they are ever so much smarter than payday loan customers, who are charged a lot of money for small liquidity boosts, consider this:  Let's say you take out $40 each week from an ATM to keep you liquid and that the ATM fee is $1.50.  You are therefore spending $1.50 or 3.75% for a one week liquidity boost of $40, which you must again refresh next week.  Annualized, you are effectively paying 195% to get liquid with your own money.  For this kind of vig, at least payday loan customers are getting the use of someone else's money.

Via Michael Tanner:

• Slightly less than half of Massachusetts' uninsured population
  actually complied with the mandate. True, the number of people without
  health insurance was reduced from 13% of the state's population to 7%,
  but when the bill was passed, advocates promised that "all Massachusetts citizens will have health insurance."  Perhaps it depends on your definition of "all."
• Most of those who are signing up are low-income individuals, whose
  coverage is fully or partially subsidized, proving once again that if
  you give something away for free people will take it. It certainly
  appears that it is the expensive and generous Massachusetts subsidies
  (up to 300% of the poverty level), not the unprecedented individual
  mandate that is responsible for much of the increased coverage.
• Adverse selection remains a big problem, with the young and healthy
  failing to comply with the mandate. The state refused to change its
  community rating laws which drive up the cost of insurance for young,
  healthy individuals. Not surprisingly, they don't find this a good deal.
• The program is far exceeding its projected costs, with at least a 33% budget overrun in its first year.
• The program has increased demand for health care services without
  increasing the supply of providers. As a result, patients are having
  trouble finding providers and waiting lists (Canada here we come) are
  beginning to develop.

We all know that the media is perfectly capable of ignoring even the most basic precepts of economics, but I thought Chris Plummer's article was especially heroic in doing so.  Even more so, it is absolutely stunning in its arrogance.  In his article, he writes on all the great ways that $8 a gallon gasoline will help make the world a better place.  I will stay away from the global warming related issues -- I have a whole other blog dedicated to that -- but here are a couple of the most egregious parts:

They may contain computer chips, but the power source
for today's cars is little different than that which drove the first
Model T 100 years ago. That we're still harnessed to this antiquated
technology is testament to Big Oil's influence in Washington and
success in squelching advances in fuel efficiency and alternative
energy.

   
       

Given our achievement
in getting a giant mainframe's computing power into a handheld device
in just a few decades, we should be able to do likewise with these
dirty, little rolling power plants that served us well but are overdue
for the scrap heap of history.

OK, this first one is a science problem and not an engineering problem.  Here is the problem:  Gasoline contains more potential energy by weight and volume than any power storage source we have been able to invent (OK, its actually second, nuclear fuel is first, but I presume Plummer is not going there).  That is the problem with electric cars, for example.  Electric traction motors are demonstrably better sources of motive power than internal combustion engines.  Even Diesel railroad engines are actually driven by electric traction motors.  The problem is energy storage.  Batteries store much less energy per pound and per cubit foot than gasoline.  Ditto natural gas and hydrogen (except at very high pressures).

This claim that only the political power of oil companies keeps no-brainer alternative technologies at bay is absurd, though it is one that never dies in the lunatic fringes.  Mr. Plummer is more than welcome to make himself a billion dollars by selling one of these mystery technologies he fails to disclose.  I will be first in line to buy.

Necessity being the mother of invention, $8 gas would trigger all
manner of investment sure to lead to groundbreaking advances. Job
creation wouldn't be limited to research labs; it would rapidly spill
over into lucrative manufacturing jobs that could help restore
America's industrial base and make us a world leader in a critical
realm.

This is the broken window fallacy on steroids.  I am a HUGE optimist about the limitless capabilities of the human mind, probably more so than Mr. Plummer (by the way, if he is such an optimist, he should read some Julian Simon).  But the best that humanity can probably do any time soon is offset a goodly percentage of the damage from $8 gas.  There is no net win here.  If there were, he should also be advocating $10 bread, $2,000,000 starter home prices, and $200 a month internet service.  Just think about all the innovation that would be required to react to these!

On a similar note, Venezuela's Hugo Chavez and Iran's Mahmoud
Ahmadinejad recently gained a platform on the world stage because of
their nations' sudden oil wealth. Without it, they would face the
difficult task of building fair and just economies and societies on
some other basis.

Yes sir.  Chavez would be much worse off if he was getting $8 for his gas rather than $3.  What is this guy thinking?  Well, he says this:

In the near term, breaking our dependence on Middle Eastern oil may
well require the acceptance of drilling in the Alaskan wilderness

OK, but that can be done at $3 gas,and should have been allowed at $2 gas.  This oil could have been developed in an environmentally friendly way years ago.  Only Congressional stupidity stands in the way  (probably with the past support of Mr. Plummer).

The recent housing boom sparked further development of
antiseptic, strip-mall communities in distant outlying areas. Making
100-mile-plus roundtrip commutes costlier will spur construction of
more space-efficient housing closer to city centers, including cluster
developments to accommodate the millions of baby boomers who will no
longer need their big empty-nest suburban homes.

   
       

Sure, there's plenty of
land left to develop across our fruited plains, but building more
housing around city and town centers will enhance the sense of
community lacking in cookie-cutter developments slapped up in the
hinterlands.

I am finding Andrew Coyne's live blog of the Canadian hate speech "trial" to be endlessly fascinating.  Imagine taking the the most self-important but dysfunctional local school board you can find, give them a knowledge of court procedure and the rules of evidence mainly through watching People's Court reruns, and put them in charge of enforcing speech and censorship, and you will about have duplicated this proceeding.

Interestingly, the current evidence being entered in the proceeding seems to be blog comments made on non-Canadian blogs.  Every so often, we have to go through an educational process with the MSM to help them understand that commenters on blogs do not necessarily represent the opinion of the blogger.  It may be OK to use blog comments as evidence that the community at the Free Republic or the Democratic Underground are loony, but not to say that blogger X or Y is a racist because racist comments have been posted on his blog.

It appears that the government of Canada needs a similar education, but I can see this being hard to do.  Remember, each of the hearing "judges" are essentially people who make their living as government censors.  Their job is wiping out speech with which they do not agree.  It is therefore quite likely difficult for them to comprehend that many bloggers (like myself) have no desire to edit or control the content of our commenters.