Coyote Blog

I have often argued that environmental cleanliness and wealth tend to follow a U-shaped curve.  Early industrialization tends to make air and water quality worse, but increases in wealth and technology over time tend to lead to an improved environment.  For example, nearly every air and water quality metric in the US has improved substantially over the last 40 years. 

To this end, I saw this chart in another context (Dr. Pielke was discussing the effect of land-use on regional climate changes) but I thought it was an interesting one to illustrate this point, and perhaps start to convince all those 20-somethings of the Obama generation that the world is not, in fact, spiraling ever downwards into economic decay.  This is a map of leaf area, bascially an index of forestation, for the Eastern US over the last 400 years.  Note the trend reversal since 1920.

I have argued for a while that trying to slam a halt to China's development as part of some misguided environmental effort may in fact achieve the opposite effect, locking China into the low-point of the U-shaped curve just at the point when increasing wealth may be pushing them to start cleaning up.

After reading this Economist article about the people section of Obama's site, I thought I would check it out myself.  Here is the complete list of the categories that Obama sees out there in America:

• Asian Americans & Pacific Islanders
• African Americans
• Americans Abroad
• Americans with Disabilities
• Environmentalists
• First Americans
• Generation Obama
• Kids
• Latinos
• Labor
• LGBT
• People of Faith
• Students
• Veterans
• Women

This is a different count than the Economist found, so I don't now if something has changed due to the article.  Anyway, I officially have no place in Obama's world as a white male physically able straight business owner of limited faith.  From analysis of his other policies, I suggest a category for me called "Milch Cow," to include productive non-whining folks like myself who are unable or unwilling to portray themselves as victims and who are most likely to be forced to pay for Obama's pandering of all the other groups.

If I had to name the one single biggest problem in US healthcare, it would be this:

"Twenty years ago, when I was in training, nobody really dealt with
economics," says Stephen Hufford, an oncologist in San Francisco. The
prevailing thinking, he says, was: "Cost should never be an issue in
someone's care."

In a survey of 167 cancer doctors reported last year in the Journal of
Clinical Oncology, 42% said they regularly raised the issue of costs
when discussing treatment options with patients.

Which means that even today, 58% of oncologists did not raise cost or price issues with various treatment options, despite practicing in perhaps the most costly of medical fields.  What planet are we living on, here?  Can you imagine a survey in which 58% of car dealers refused to raise the issue of cost in a new car sale?   Or 58% of real estate brokers saying they never mentioned the prices of houses when discussing them with clients? 

This represents a process failure in the health care system on two levels.  First, not having any single person in the decision-making process making cost-benefit trade-offs is a recipe for disaster.   Insured customers will consume as much as they can when price is off the table.  Many folks in the health care debate recognize this.

But there is a second problem.  Even when there is a single entity making these trade-offs, it is almost never the patient.  Most "reformers" on both the left and the right want to place this decision-making authority in government bureaucrats, in insurance companies, in Congress, in doctors -- any place but in the individual patient herself.   This particular article discusses the role of doctors in this process:

Many health-policy experts say it's high time for American doctors to
start considering costs when assessing treatment options. In 2007, the
cost of cancer care alone reached an estimated $89 billion in the U.S.,
up from $72 billion in 2004, according to the American Cancer Society
using data from the National Institutes of Health....

The study, conducted
by Deborah Schrag, an oncologist at the Dana Farber Cancer Institute in
Boston, found that 23% of oncologists said costs influence their
treatment decisions, and 16% said they omit discussion of very
expensive treatments when they know the cost will place great strain on
patients' resources.

This misses the mark.  Doctors should be ready to inform patients of their options, but at the end of the day we need a system where the patient is making these tradeoffs.  Note the absolute, nearly criminal arrogance of doctors who don't suggest the best treatment regime because the cost might stress out the patients.  How does the doctor know what financial resources the person might be able to bring to bear?

Postscript:  In an adjoining article, the WSJ has an article on the wacky way the French government makes these cost-benefit trade offs in health care:

Since 1860, when Napoleon III appropriated this
ancient Roman spa at the foot of the Alps for his empire, the National
Baths of Aix-les-Bains have been a symbol of France's cushy health-care
system.

On a recent morning, Jacqueline Surmont and her
husband, Guy, a 77-year-old retired construction worker, headed for
their daily mud wrap. The spa's rheumatism cures, thermal baths and
13-minute deep-tissue massage all are covered by France's national
health-insurance system. Transportation and lodging are, too....

"For many people, it's like a free holiday," says Ms. Surmont, who says
all her mud wraps and massages were properly prescribed by a doctor to
soothe her ailing back. "Some patients go shopping in the afternoon.
They're hardly in pain."

Wonderful.  This kind of BS is virtually inevitable in state-run systems.  I think one can already imagine a US health care system where taxpayers foot the fill for groovy treatments loved by the dippy left, from acupuncture to aromatherapy to homeopathy, while cancer patients are denied drugs and people have to wait months or years for elective surgery.

By the way, we get this in the "goes without saying" file from a state-run spa employee facing cutbacks:

"Of course we went on strike," said Martine Claret, a 52-year-old
physiotherapist who has worked at the spa since 1979 and doubles as a
union representative.

Christian Boda, via Q&O, discusses inflation rates in the context of income (in)equality issues.  He offers this bit of information:

Inflation differentials between the rich and poor dramatically change
our view of the evolution of inequality in America. Inflation of the
richest 10 percent of American households has been 6 percentage points
higher than that of the poorest 10 percent over the period 1994 "“ 2005.
This means that real inequality in America, if you measure it
correctly, has been roughly unchanged.

This actually makes a ton of sense - Walmart helps hold down food and clothing costs for average folks while the rich pay ever increasing rates to stay at the Ritz at Laguna Niguel.  He argues that as a result, globalization and the growth of low-cost manufacturing in China tends to help rather than hurt the poor.

It also helps to answer a question I had yesterday -- why do metrics of median wage growth adjusted for inflation tend to look unexciting, while at the same time other metrics show the poor doing so much better materially.  This notion of a graduated inflation rate by income class would go a long way to explaining these paradoxes.  In short, we may be applying the wrong inflation rate to metrics of wage growth of various income groups in assessing their well-being (not to mention the usual failing of missing individual migration between income groups).

If past presidential elections are any guide, by the time this one is over, it will have been said that this economy is the worst economy since the Great Depression.  W. Michael Cox and Richard Alm of the Dallas Fed write a fabulous article in the American putting current US economic conditions in historic context:

When a presidential election year collides
with iffy economic times, the public's view of the U.S. economy turns
gloomy. Perspective shrinks in favor of short-term assessments that
focus on such unpleasant realities as falling job counts, sluggish GDP
growth, uncertain incomes, rising oil and food prices, subprime
mortgage woes, and wobbly financial markets.

Taken together, it's enough to shake our
faith in American progress. The best path to reviving that faith lies
in gaining some perspective"” getting out of the short-term rut, casting
off the blinders that focus us on what will turn out to be mere
footnotes in a longer-term march of progress. Once we do that, we see
the U.S. economy, a $14 trillion behemoth, is doing quite well, thank you very much.

I can't really excerpt the article and do it justice, but suffice it to say that you won't see much of this in any Obama speeches this year.  Here are two charts from the article I particularly liked:

Of course, the rejoinder will be, but what about the poor?  Well...

Go read it all in advance of the campaign season.

I generally like the work that Factcheck.org does, and am perfectly willing to believe that McCain's claim that Obama has voted "for higher taxes" 94 times is exaggerated.  However, some of their rationale leaves me flat:

Twenty-three [votes] were for measures that would have produced no tax increase at all; they were against proposed tax cuts.

Uh, OK.  It strikes me that voting against 23 tax cuts is voting for higher taxes 23 times.  I know that politicians work very hard to establish a sort of taxation Stare Decisis, wherein once a tax is in place it can never be questioned, but many of us think that tax cuts are fair game.  But then Newsweek, in reporting this story, goes on to repeat this claim over and over, as if that makes it correct:

By our count, about a quarter of these votes for "higher taxes" "“ 23 to
be exact "“ are votes Obama cast against changing tax rates from what
they were at the time. Taxes would not have gone up. They would have
been "higher" only compared to the cuts being proposed.

Sorry, but this does not sound like independent fact-checking.  This sounds like political spin and hackery by folks in Obama's camp.  Voting against a tax cut is a vote for higher taxes.

Eleven votes the GOP
is counting would have increased taxes on those making more than $1
million a year "“ in order to fund programs such as Head Start and
school nutrition programs, or veterans' health care.

The implication here, I guess, is that the rich people don't count as people, and that raising taxes only on the rich does not count as a tax increase?  We see this same bias that rich people don't count in their summary:

It's true that most of the votes the GOP counts would either have
increased taxes for some, or set budget targets calling for such
increases. But by repeating their inflated 94-vote figure, McCain and
the GOP falsely imply that Obama has pushed indiscriminately to raise
taxes for nearly everybody. A closer look reveals that he's voted
consistently to restore higher tax rates on upper-income taxpayers but
not on middle- or low-income workers.

The other interesting pice of the previous quote is that tax increases don't count if they fund programs such as Head Start that the author of the study, presumably, supports.  The article goes on to say:

And in many cases, the legislation in question called for increasing
taxes in order to fund popular programs, a fact not mentioned by the
Republican opposition researchers. One such amendment
by Sen. Christopher Dodd to a 2006 bill, for example, proposed the
creation of a "veterans hospital improvement fund," financed by
increasing the capital gains and dividend tax rates on those earning $1
million a year or more.

You get it?  Its not a tax if it is on the rich or funds a liberal program.  By the way, I find this increasing reliance on taxes on people making $1 million or more an enormous threat to the very basis of our demacracy.  It is always a danger in democracy to have 51% of the people vote themselves benefits at the expense of the other 49%.  But this becomes increasingly seductive as the numbers skew, until every politician is crafting programs that take from the top 1% and give to politically influential portions of the other 99%.  Here is a great example of that in California, with a program the majority of voters were not willing to pay for, but accepted when it was funded by a millionaire's surcharge:

Already, we see many states funding new programs with surcharges on the rich.  Here is but one example:

California voters agreed to tax the rich to support public mental health
services. 

More than half of them (53.3 percent) voted last month in favor of
Proposition 63, which will impose a tax surcharge of 1 percent on the taxable
personal income above $1 million to pay for services offered through the
state's existing mental health system. The initiative will generate an
estimated $700 million a year....

Richard A. Shadoan, M.D., a past president of the CPA, wrote in Viewpoints
in the September 3 issue of Psychiatric News, "The scope of the
program and its tax-the-rich source will provoke a debate. But it's an
argument worth having to make California face the neglect of not providing
treatment to more than 1 million people with mental illness."

So
what happened?  I don't know how many people make a million dollars in
California, but it is certainly less than 5% of the population.  So the
headline should read "53.3% of people voted to have less than 5% of the
people pay for an expensive new program."  If the 53.3% thought it was
so valuable, why didn't they pay for it?  Well, it is clear from the
article that the populace in general has been asked to do so in the
past and refused.  So only when offered the chance to approve the
program if a small minority paid for it did they finally agree.  This is the real reason for progressive taxation.  (by the way, these 53.3% will now feel really good about themselves,
despite the fact they will contribute nothing, and will likely piss on
millionaires next chance they get, despite the fact that they are the
ones who will pay for the program).

That example reminded me in turn of this story from history, one of what I call "great moments in progressive taxation,"  and the ultimate logical end of this desire to have fewer and fewer rich people fund services for everyone:

My story today comes from the Roman Empire just after the death of
Julius Caesar.   At the time, three groups vied for power:  Octavian
(Augustus) Caesar, Mark Antony, and republican senators under Brutus
and Cassius.   Long story short, Octavian and Antony join forces, and
try to raise an army to fight the republicans, who have fled Italy.
They needed money, but worried that a general tax would turn shaky
public opinion in Rome against them.  So they settled on the ultimate
progressive tax:  They named about 2500 rich men and ordered them
killed, with their estates confiscated by the state. 

This approach of "proscriptions" had been used before (e.g. Sulla)
but never quite as obviously just for the money.  In the case of
Octavian and Antony, though nominally sold to the public as a way to
eliminate enemies of Rome, the purpose was very clearly to raise
money.  All of their really dangerous foes had left Rome with the
Republicans.  The proscriptions targeted men of wealth, some of whom
had been irritants to Octavian or Antony in the past (e.g. Cicero) but
many of whom had nothing to do with anything.  Proscribed men were
quoted as saying "I have been killed by my estates."

I wonder how many of today's progressives would be secretly pleased by this approach?

Postscript:  I can't tell if this Newsweek article represents some sort of strategic alliance or deal with Newsweek, or just a one-off.  If it is some kind of alliance, I think we can write off any notion that Factcheck.org is still non-partisan.  I predict if this is the case we will see more pro-Obama spin out of Factcheck, or as a minimum, a cherry-picking by Newsweek of which checked facts it wants to publish and which it does not.

Neil Boortz (via Maggies Farm) did a Yahoo news search on a variety of terms, counting results for various terms, with this result:

Democrats Outraged	45,600 hits
Muslims Outraged	35,600 hits
Republicans Outraged	13,800 hits
Catholics Outraged	11,500 hits
Christians Outraged	2,990 hits
Jews Outraged	2,060 hits
Libertarians Outraged	57 hits
Buddhists Outraged	24 hits

He seems to have an agenda at the top of the list, but what about us libertarians at the bottom?  I know we are outraged, so I supposed we need a better PR agent.  I mean, no outrage here.

I don't really understand the various issues in this article on the next phase of Phoenix light rail expansion, but this certainly caught my eye:

It will add another $9 million to the $297 million project. But by
acting quickly to make these changes, there aren't expected to be
delays in rail construction. Work is scheduled to start in early 2009
and be completed by 2012.

Opposition to the rail plan arose last fall in the last half mile of
the 3.2-mile light rail line that extends from just south of Bethany
Home Road to Dunlap Ave.

Let's see -- $306 million divided by 3.2 miles is very close to $100 million a mile, and that is even before the inevitable cost overruns cut in (as a rule of thumb, I tend to double estimates of light rail construction costs to estimate the actual final total, and even then I am often low).   It also does not include inevitable operating losses.

Nearly a third of a billion dollars to run a rail line a distance most people could walk in 45 minutes.  For three freaking miles.  As a comparison, three buses could provide service on this same route running at 5 minute intervals for perhaps 1% of this capital cost and a substantially lower operating cost.  And better service, since the frequency would be 3 times higher.  Absolutely absurd. 

More on Phoenix light rail here, and more on light rail in general here.

Postscript: Some of you may be familiar with my light rail bet.  I often bet that a light rail line will cost more to build than it would have cost to buy every  regular daily rider a Prius, and more to operate in a year than it would require to gas up all of these Prius's for a year.  For reference, with a $22,500 cost for a Prius and $306 million (and counting) capital cost, that is enough to buy 13,600 Prius's.  Anyone want to bet that the number of incremental users attracted to the line by this 3 mile extension don't exceed 13,600?

Update:  TJIC does the math -- $1500 per inch!  Fixed link, thanks to commenters.

The government claims that it is important to crack down on gambling because people who gamble might do themselves financial harm.  Of course, just like the teenager who is thrown in jail because it is better for him than smoking marijuana, so goes the case of Salvatore Culosi:

"¦ Salvatore Culosi "¦ was a 37-year old optometrist in the
Washington, D.C. suburb of Fairfax, Virginia. According to friends,
Culosi was a wealthy, self-made man. He was easygoing and friendly, a
guy who enjoyed his success.

He was also a small-time gambler. Culosi and his friends
regularly met at bars in the area to watch sports, and frequently
wagered on the outcomes of games. The wagers weren't insignificant "”
$50, $100, sometimes more on a given afternoon. But the small circle of
friends also had the means to back up their wagers. No one was betting
the mortgage, here"¦

Fairfax police detective David J. Baucom met Culosi in a bar
one evening last October, befriended him, and was soon making wagers
himself"¦ Baucom began upping the ante, encouraging Culosi to wager
larger sums than what the friends were used to"¦

Baucom eventually encouraged Culosi to wager at least $2,000
in a single day, the lower threshold under which Culosi could be
charged under state law with "conducting an illegal gambling
operation." On January 24 of this year, Detective Baucom assembled the
Fairfax County SWAT team, and marched off to Culosi's home to arrest
him.

According to press accounts, police affidavits, and the
resulting investigation by the Fairfax prosecutor's office, Baucom
called Culosi that evening, and told him he'd be by to collect his
winnings. With the SWAT team at the ready just behind him, Baucom
waited outside Culosi's home in an SUV. As Culosi emerged from the
doorway, clad only in a t-shirt and jeans, SWAT officer Deval Bullock's
finger apparently slipped to the trigger of his Heckler & Koch MP5
semiautomatic weapon, already aimed at the unarmed Culosi.

The gun fired, releasing a bullet that entered Culosi's side,
then ripped through his chest and struck his heart, killing him
instantly.

Holman Jenkins argues that despite the fact that GM's all-electric car the Volt will likely lose money on every sale, GM knows exactly what it is doing with this program.  The main customer, apparently, is not the end consumer, but the government.  GM is betting that an Obama, beholden in his new presidency to unions and environmentalists, will be open to a massive government subsidy of the US auto industry.  The Volt program may be part of a plan to buff up GM's attractiveness at the government trough:

GM executives are not nuts. They justify the costs and
risks of the Volt as a way of changing GM's image in the minds of
consumers and politicians. To commit a pun, the Volt is GM's vehicle
for making a bailout of GM politically acceptable.

The company has already started signaling it expects
Washington to provide a whopping $7,000 tax credit to Volt purchasers.
In Europe and the U.S., under whatever fuel economy and emissions
regulations prevail, GM also expects special favoritism for the Volt.
The goal is to re-enact the flex-fuel hoax, in which GM receives extra
credit for making cars that can burn 85% ethanol, even if they never
see a drop of such fuel.

CEO Rick Wagoner last week laid out the case to Barack
Obama personally for turning GM into a ward of the state, by way of
direct and indirect subsidies to support a transition to "alternative"
fuel vehicles. GM has done yeoman's work getting its structural costs
(i.e., labor) in line, but shareholders should note that a big part of
the company's turnaround gamble consists also of eliciting favor once
again from Washington after a period in which the domestic auto makers
were nothing but whipping boys on Capitol Hill.

What I already knew, before today:  When the timber industry was booming, local governments made out well as Federal law gave them a cut of USFS and BLM timber sales dollars in their county.

What I already knew, before today:  Under environmental pressure, serious logging has virtually ended in the National Forest, particularly in northwestern states like Oregon. 

What I learned today:  For the last 15 years, despite the fact there have been no timber sales, the Feds are still paying local government as if there still were timber sales.  The payments last year were $238 million a year to Oregon counties alone.

And for some reason that nobody seems to be able to understand, the local economies have not adjusted structurally to the new economic reality.  I wonder why?

Of the
county's general fund, a full 67 percent -- about $12
million -- had come from the federal timber payments.

Finally, it looks like Congress may cut them off.  Good.  Because the only thing worse than killing an industry for suspect environmental reasons is continuing to pay that industry for not producing anything.

I, for one, welcome our new robot overlords   (link only works in Firefox 3)

Other hacks

The NY Times reports, via Hit and Run, that judicial review of Gitmo detainees, which the Administration has steadfastly resisted, may be quite justified:

In the first case to review the government's secret
evidence for holding a detainee at Guantánamo Bay, Cuba, a federal
appeals court found that accusations against a Muslim from western
China held for more than six years were based on bare and unverifiable
claims. The unclassified parts of the decision were released on Monday.

With some derision for the Bush administration's arguments, a
three-judge panel said the government contended that its accusations
against the detainee should be accepted as true because they had been
repeated in at least three secret documents.

The court compared
that to the absurd declaration of a character in the Lewis Carroll poem
"The Hunting of the Snark": "I have said it thrice: What I tell you
three times is true."

"This comes perilously close to suggesting
that whatever the government says must be treated as true," said the
panel of the Court of Appeals for the District of Columbia Circuit.

The
unanimous panel overturned as invalid a Pentagon determination that the
detainee, Huzaifa Parhat, a member of the ethnic Uighur Muslim minority
in western China, was properly held as an enemy combatant.

The panel included one of the court's most conservative members, the chief judge, David B. Sentelle....

Pentagon officials have claimed that the Uighurs at Guantánamo were
"affiliated" with a Uighur resistance group, the East Turkestan Islamic
Movement, and that it, in turn, was "associated" with Al Qaeda and the Taliban.

Next up, the detainee whose mother's gynecologist's dog's veterinarian's great uncle once was friends with a Muslim guy.

The Administration now complains that there is nowhere that this man can be sent back to, and somehow this is supposed to validate his detainment?  He wouldn't have had to be sent back anywhere if he hadn't been snatched up in the first place.  I am willing to believe that this guy may be a bad buy, but we let lots of people we are pretty sure are bad guys walk the street, because for good and valid reasons we rank false detainment of the innocent as a greater harm than non-detainment of the guilty.  Anyone seen OJ lately?

OK, here is the story to date:  Paradise Valley is a small, very wealthy town within the boundaries of Phoenix.  There is no commercial development allowed in the town except for a series of golf resorts, of which there are a number.  The town had one last large tract of unbuilt land, owned by the Wrigley heirs, I believe, that has for years been zoned for a resort.  There was an auction several years ago in which the land was sold for some figure north of $70 million to a group who wants to build a Ritz-Carlton resort, a hotel chain notorious for bringing riff-raff into communities ;=).  The Ritz group unanimously obtained all the town council and planning board approvals it needed to build.

Except now a ballot initiative will be voted on by the town residents in November as to whether to allow them to build a resort on their own land that is zoned for a resort (my previous report, complete with Zillow maps).  This action is consistent with the absolute resistence that every resident's attempt to do a major remodel of their house encounters from various community groups and zoning bodies.

One lesson, of course, is that local participative democracy can be just as much a threat to individual rights as the worst dictatorship  (though this is not a new lesson -- it was in fact learned in Athens when it was first tried).  But a second lesson is just how short-sighted this is.  I am sure residents convince themselves in each such individual effort that they are somehow protecting their property values.  But in sum, the effect of multiple such efforts is to make people reluctant to invest in property in the town, fearful that some citizens group or zoning body will take control of what they can do with their land. 

I live about 4 houses away from the Town of Paradise Valley in the city of Phoenix, though most of my neighbors and even the US Postal Service think I live in PV.  It used to be, about 10 years ago when I moved in, that living outside the PV boundary was considered a negative.  There was a big enormous value gradient between the nearest PV home and mine, based as much on snob appeal of the address as anything else.  Now, however, the gradient is reversing (hurray for my home equity!)  Real estate agents in my neighborhood who used to hide the fact that the homes are not actually in tony PV (shame on them) now use it as a selling point.  My remodel contractor breathed an enormous sigh of relief when he found out that I was, in fact, not in the town of PV.

Help me out, readers.  I seem to remember there was a name for an economic game where the profit maximizing strategy when playing once was different than if one were playing multiple times in sequence.

PS - If you are confused why a town would consider a Ritz to be bringing down the neighborhood, see here, complete with Zillow maps where not a single surrounding home is going for less than $1.8 million. 

I guess it turns out that compensation deals between sophisticated, consenting adults at private firms are not actually subject to approval by the NY attorney general, no matter how much he grandstands:

A state appeals court on Tuesday dealt a devastating blow to the New
York attorney general's efforts to force ex-New York Stock Exchange
Chairman Richard Grasso to return a portion of his $187.5 million
compensation package.

New York Attorney General Andrew Cuomo's
spokesman issued a statement saying he is not pursuing an appeal in the
case. The Grasso case is "over" "¦ "for all intents and purposes," the
spokesman said.

In a 3-1 decision, the New York Supreme Court's
Appellate Division dismissed the two remaining causes of actions
against Mr. Grasso and one against former NYSE director Ken Langone

I wrote much more about this fiasco long ago...

Update:  The AG argues that their real concern was about pay practice in non-profits.  OK, I am sure there are any number of NGOs and museum presidents where there might be real issues with the sophistication of board members.  Go after those folks, then, but there was never, ever any evidence that somehow Dick Grasso pulled the wool over the eyes of financial neophytes on the NYSE Board, babes in the woods such as the CEOs of JP Morgan Chase and Goldman Sachs.  Unfortunately, all these other non-profits tend to be run by folks who are the backbone of the NY Democratic Party.  Even in the Grasso suit, Spitzer had to work a bit to avoid naming prominent Democrats as targets.  For example, there is a lot of evidence that the person most responsible on the NYSE baord for the structure of Dick Grasso's compensation contract was NYSE board member and former NY State Comptroller Carl McCall, but since he is a powerful Democrat, Spitzer did some slick judo to avoid including him in the suit, which still including other NYSE board members.

I thought this was kind of funny, from the false hysteria department.  The Arizona Republic begins ominously:

If you're already mad about gas prices, prepare to get madder.  Besides paying prices at the pump that were unthinkable a few months
ago, many consumers also are getting ripped off by the pump itself.

Uh, Oh.  I can see it coming.  The AZ Republic has smoked out more evil doings from the oil industry.  I shudder to think what horrors await.

About 9 percent, or about 2,000, of the 20,400 gas pumps inspected this
fiscal year by the Arizona Department of Weights and Measures since
July 1, 2007, failed to pass muster.

Oh my freaking God!  Every fill up, I have a one in 11 chance of my gas being measured wrong.  I just bet those oil companies are coming out in the night to tweak the pump so I get hosed. 

Half of those were malfunctioning to the detriment of customers.

See!  There you go!  Half are to the detriment of customers! 

Oh.  Wait a minute.  Doesn't that mean the other half are to the benefit of customers?  Why would those oil guys be doing that?  This sure isn't a bunch of very smart conspirators.  Could it be that this is just the result of random drift in a measurement device, with the direction of drift equally distributed between "reads high" and "reads low"?

As it turns out, I worked for a very large flow measurement instrument maker for several years.  For a variety of reasons, flow measurement devices can drift or can be mis-calibrated.  To fail the state standard, the meter has to be off about 2.5%, which is about 6 tablespoons to the gallon.  State governments have taken on the task of making sure commercial weights and measures are accurate, and though I think this could be done privately, I don't find it a terribly offensive government task.  Having taken this task on, it is reasonable to question whether it is doing its oversight job well.  But let's not try to turn this into a consumer nightmare by only discussing one half of the normal distribution of outcomes.

Post title stolen from an old Dilbert cartoon.

Arizona voters will have a chance to raise the price of a new home and reduce the choice they have in the marketplace with an initiative on the ballot this November:

The proposed measure, which requires more than 153,000 certified
signatures to qualify for the statewide ballot, includes a 10-year
warranty on new homes and gives homeowners the right to choose which
contractors with a decade-long, complaint-free record do repair work.

Having shopped from time to time for a new home, I can say that such homes with extended warranties from quality companies do exist in the marketplace - some builders offer this kind of warranty, and some do not.  All this bill is doing is reducing choice.  It is requiring that consumers no longer be offered the choice of a new home without a 10-year warranty, and will require that all homes carry this more expensive option.  I am sure that what people voting for this bill will hope for is that they will be getting today's less expensive house but with a 10-year warranty added, but that is not the way it works.

Second, this will virtually eliminates the small independent builder.  Though they do not produce a large percentage of the total homes, small builders, often individual investors with a single property, are still an important part of the market.  You might say, surely this is just an unintended consequence!  Well, what if I told you the AFL-CIO, the largest organizer of construction workers in large home builders, is the #1 financial supporter of this bill?  That information might change this from an unintended consequence to the #1 rationale behind the bill.

Finally, one can easily argue that the law is forcing people to pay for something that may well have no value.  Individuals trying to game the system can easily start a company, build some houses, pay off owners, fold up the tent, and move on to a new entity.  Consumers are left with a 10-year warranty from a company that no longer exists.  Which is how the roofing game is played by the bottom-fishers in that industry.  Which means customers have to shop around for well-established companies with long track records and good products, which, if they did so, would obviate the need for the bill in the first place.

Provisions give homeowners the ability to sue without the threat of
being responsible for a builder's attorney and expert fees and require
builders to disclose their relationships with financial institutions.

Just what we need - another industry where the plaintiffs have zero cost to launch any frivolous suit they want.

Yet another would require that model homes reflect the types of properties that are for sale.

I have no idea what this means.  Are there really buyers who are dumb enough to walk through a model, say this is the house they want, and then blandly accept a home that is totally different?

What I perhaps found funniest about the article was this bit of political positioning:

The campaign, called the Arizona Homeowners Bill of Rights
Committee, formed in the midst of this year's housing-mortgage
meltdown. And the committee has attempted to draw links between
financing and construction troubles.

"These same companies that build shoddily also were involved in the
housing-mortgage crisis. They were on both sides of this equation. They
were financing homes above people's means and selling homes that were
defective," said Richard McCracken, an attorney for the measure's
sponsor, the Sheet Metal Workers' International Association, Local
Union 359.

This is kind of a hilarious stretch - talk about guilt by association.  Of course, the bill has nothing to day about mortgages, but since homebuilders were associated with those bad mortgage guys, we should feel free to do anything we want to them.

As any reader of this blog will know, I am a strong supporter of opening up new areas in North America to oil drilling and freeing companies to develop western oil shale reserves.  Republicans in Congress are currently bashing Pelosi and the Democrats for not opening this development up.  Fair enough, I guess, but where were the Republican for the six years they had both the Congress and the Presidency?

As a libertarian, the situation in Congress simply sucks.  Republicans, who purport to be our allies on economic issues, do nothing of consequence with their six years running Congress.  Democrats, who purport to be our allies on civil liberties issues, immediately roll over on FISA once taking over Congress.  My general observation is that I like both parties better when they are in opposition.

I find that in discussing gasoline prices, a lot of people don't know what their state's gasoline tax is.  So, as a public service (hat tip to Mark Perry)