Archive for May 2009

When Politicians Say "Priviledge," That Means Kiss Your Rights Goodbye

A while back I wrote about how irritated I get when a state calls its sales tax a "transaction privilege" tax, and piously tells me that free interchange of goods and services is not a basic right but a privilege that can only be granted by an accommodating government.

Today, via Reason, we hear that "priviledge" word again, this time from Britain's Home Secretary Jacqui Smith, and again it is used in the context of "Kiss your rights goodbye"

Home Secretary Jacqui Smith said she decided to make public the names of 16 people banned since October so others could better understand what sort of behaviour Britain was not prepared to tolerate. [...]

"I think it's important that people understand the sorts of values and sorts of standards that we have here, the fact that it's a privilege to come and the sort of things that mean you won't be welcome in this country," Ms Smith told GMTV.

"Coming to this country is a privilege. If you can't live by the rules that we live by, the standards and the values that we live by, we should exclude you from this country and, what's more, now we will make public those people that we have excluded. [...]

Ironically enough, among the banned is American conservative radio host Michael Savage.  I don't enjoy Savage's schtick, but my sense is that he would very much share Ms. Smith's view on borders, that we need to filter those we allow in the country based on various ideological and cultural screens.  In fact, my sense is that Smith and Savage are very closely alligned on this, and differ only in how they would define the filters.

I must say that it is deeply depressing to see the UK implementing content-based speech screens on immigration and even visitation.

Bring Back the DC Voucher Program

GM's Design Problems in a Nutshell

Despite years and hundreds of millions of dollars of effort on electric vehicles, competitors are coming out of the woodwork to beat it to market with an all-electric sedan -- and, from the specs, seem to be beating it on price and features as well.

Miles Electric has confirmed that it's working on a family sedan-sized all electric car for release in North America sometime next year. The car -- which will be released under a different, unknown brandname -- will be a first for the company, which specializes in neighborhood cars that only go up to about 25 miles per hour. The sedan will have a top speed of around 80 miles per hour, and a 100 mile range. It will also require 8-12 hours to fully recharge its dead lithium-ion battery. Miles is currently running the vehicle though crash tests, and expects to see about 300 of them on the road in California sometime next year. The going rate for one of these? About $45,000.

Radical shifts in technology often obsolete first mover and scale advantages.  The winners in the market for diesel electric locomotives (GM and GE) were totally different players from those who dominated the steam locomotive market (Alco, Baldwin, Lima and others).  It will be interesting to see if such a change occurs in the auto market.

Windows 7 Release Candidate Available, Unlimited Beta Keys

Get all the information and download links here.  I am going to try this on my extra PC this weekend.

OK, I Joined Facebook

I had to wait until TJIC left, but I joined Facebook today mainly so I can better monitor my kid's page.  The deal was that he could have a Facebook account but only if he accepted my wife and I as friends and we had access to his pages.

Having gotten an account, I am having nearly as much trouble trying to figure out what I can usefully do with it as I had when I signed up for a Twitter account (dropped within a week) over  a year ago.  Anyone who has ideas of how it might be useful (given that I am not in a business that runs on contact or relationship management) is welcome to send me those ideas.  Also, all you Facebook cultists are welcome to send me "friend" invites.  The least I can do is humiliate my kids by dwarfing their friends lists.   The email on my account is the same as for this blog, which you can get by mousing over the contact button on the top bar of this site.

You Guys Are Losers Because You Are Not Paying For My Stuff

The Thin Green Line has been running a series of articles complaining about price increases and service cuts at the local MTA.  I will leave aside for today the critique I have been putting in the comment section of that blog, which is that if you really care about transit service for the working poor, then you never should have started down the light rail path in the first place.  Light rail is an expensive yuppie toy that inevitably, through its high costs and continuing capital requirements, starves money from the bus services that the working poor actually depend on.

But anyway, I thought it was endemic of a certain type of political outlook that the author could write this with a totally straight face:

Also problematic is that the MTA did not hit drivers and riders equally [with proposed fee and fair increases].

Wow!  You mean a price increase for a service does not hit users and non-users of that service equally?  On what planet does one have to live on to believe that they should?

Wither Federalism

I am totally confused - under what reading of the constitution can this possibly be within Federal powers?  Is there an off-chance that a pool might pick up and move across state lines?

A new federal pool-safety law has cash-strapped Valley homeowners' associations and apartment managers scrambling to finish costly drain modifications so they won't have to close pools this summer.

Some have already locked gates and posted signs; a few are mulling permanent closure to avoid renovation costs or stiff penalties and legal liabilities if they fail to comply.

The Virginia Graeme Baker Pool and Spa Safety Act went into effect in December and requires that all outlet fittings and drain systems in public and semi-public pools meet new safety standards that prevent drain suction from holding swimmers under water. Backyard pools at single-family residences are exempt.

Certainly the old design can be dangerous -- we updated our drains when we re-did our pool.   But a federal law?

One might expect that the underlying problem was so grave that it necessitated the shortcut of federal regulation over state and local regulation (which normally covers things like pool construction standards).  But in fact the article says that, according to the law's promoters, less than 2 people per year have been killed by this problem, and presumably most of these have been in private pools not covered by the law (since their numbers statistically dwarf those of public pools).

So why has expensive extra-Constitutional federal legislation been passed to save less than one person per year?  Well, because that one person was once related to a famous politician:

The law was named after the 7-year-old granddaughter of former Secretary of State James A. Baker III who died in 2002 in a spa after the powerful suction of a drain held her underwater.

I have written before how politicians' personal experiences often lead to bad regulation.

New Kindle?

Via Engadget:

Looks like the rumor of a new larger Kindle is true. Amazon just sent us an invitation to a press conference scheduled for Wednesday, May 6 at 10:30am ET. You know what Amazon does at press events? It launches new Kindles!

As noted by Peter Kafka over at All Things Digital, the location of the Amazon event -- Pace University -- is the historic, 19th century HQ to the New York Times which is said to be partnering with Amazon on the larger Kindle. That makes for a perfect symbolic bridge from old to new media. We'll have to wait and see if newspaper subscribers can be lured across.

I was an early Kindle adopter and love my Kindle 2.  My only complaint is the lack of electronic versions of a lot of older books I would like to read (example -- various James Clavell novels) but I am hoping this is similar to the early phase of CD's and DVD's when publishers had not yet seen the market or had the time to convert older music and movies to the new media.

And So It Begins

So what may be the most important Chapter 11 proceeding in modern history has begun -- important not just because it is large, but because the court in a sense is being asked to validate or invalidate the unprecedented power grab by the Obama administration.  The results of this trial may well slow or accelerate America's devolution into a European-style corporate state where political pull rather than costs or products determine corporate success.  It also will have a lot to say as to whether the rule of law has any meaning any more, at least as far as President's go.

The first salvo, by the non-TARP secured creditors that Obama was unsuccessful in beating down, has been fired:

Just hitting the Chrysler bankruptcy docket is an objection filed by W&C on behalf of its clients, objecting to the 363 asset sale. The filing is attached below (and linked here). Some very harsh language with regards to Uncle Sam in there...

The summary of the grounds for the objection:

1. The Proposed Sale Constitutes an Illegal Sub Rosa Plan that Redistributes Value Among Creditor Classes.

2. The Proposed Sale Fails the Requirement of Section 363(f).

3. The Sale Is Not Proposed In Good Faith.

4. The Taking of Collateral through a Direct or Indirect Use of TARP Authority is Unconstitutional. (This one is Huge as it sets a case law precedent.)

Over the weekend, there was a lot of back and forth with W&C (White & Case) senior attorney Tom Lauria, who said that one of his clients gave in to the restructuring when threatened by the Obama administration with having its reputation destroyed by the White House press office.   Both the White House press office and the client in question denied this account of events, but never-the-less Obama was indeed vilifying the holdouts, though in a general rather than specific way.

This is probably only the tip of the iceberg.  I think if creditors start to see that the bankruptcy judge is unwilling to automatically roll over for the administration, more such revelations will emerge.  The blog Finem Respice has a doozy, though it is unsourced and so must be treated with caution.

Paying Back TARP

Apparently a number of the lenders to Chrysler were recipients of TARP money, and thus were especially susceptible to Obama Administration blackmail to take less money for their Chrysler debt than they would normally get in bankruptcy court.   In effect, Obama is asking for partial payment for the TARP money in the form of concessions to Chrysler's other parties in the bankruptcy, mainly their unions.

But the TARP money is MY money.  And I don't want to get paid back this way.  If these lenders have the ability now to pay out billions of dollars (in the form of forgiven loans) then I would rather see them returning this money to the Treasury rather than sticking it in the pocket of the UAW or propping up a zombie auto company that hasn't made a car I would even consider buying in over 10 years.

TARP is going to turn out to be the greatest tool ever invented for increasing the power of government in the economy and accelerating the development of the American corporate state.  And Obama can laugh all the way to the bank(s) knowing that it was a Republican administration that handed him this power.

Postscript: I thought this was funny, via Instapundit:

And though I'm not a gearhead, I'm a little surprised to hear the administration saying that Chrysler is going to be saved by"“Fiat's world-class engineering.

All the more so given that Daimler couldn't help.

Obama's Programming of the Press Has Unintended Consequences

Kevin Drum posts (sorry, I have to quote the whole post or it won't make sense):

From a Washington Post story about wage cutbacks:

Members and employees of the Virginia Symphony Orchestra are bracing for more hard times. The orchestra has had to contend with a $1.5 billion debt....The musicians were furloughed, and the administrative staff, including Johnson, took a 20 percent pay cut. The two moves saved the VSO about $500,000.

Not bad!  At that rate they should have their debt paid off in another 3,000 years.

I know I'm being sort of prickish for even bringing this up, but seriously: at least one reporter and two editors worked on this piece, and apparently none of them were taken aback by the idea of a regional orchestra being $1.5 billion in debt.  At any rate, not taken aback enough to wonder idly if maybe it was $1.5 million instead.  Sheesh.

I don't know, Kevin.   Your guy Obama proposed to deal with a trillion dollars of deficit by seeking $100 million of savings, and everyone in the press nodded their head and said how wonderful that Obama guy is.  On a percentage basis, a $500,000 cut in a $1.5 billion debt is actually three times more impactful than what Obama proposed.   Is it any wonder the press accepted these numbers without skepticism?  Obama has trained them well.

Who Do You Know Who's Been Saying This About Chrysler?

Good for Megan McArdle:

when did it become the government's job to intervene in the bankruptcy process to move junior creditors who belong to favored political constituencies to the front of the line?  Leave aside the moral point that these people lent money under a given set of rules, and now the government wants to intervene in our extremely well-functioning (and generous) bankruptcy regime solely in order to save a favored Democratic interest group.

No, leave that aside for the nonce, and let's pretend that the most important thing in the world, far more interesting than stupid concepts like the rule of law, is saving unions.  What do you think this is going to do to the supply of credit for industries with powerful unions?  My liberal readers who ardently desire a return to the days of potent private unions should ask themselves what might happen to the labor movement in this country if any shop that unionizes suddenly has to pay through the nose for credit.  Ask yourself, indeed, what this might do to Chrysler, since this is unlikely to be the last time in the life of the firm that they need credit.  Though it may well be the last time they get it, on anything other than usurious terms.

I am not sure I agree with the last part.  While banks seem to have an unbelievably long memory when it comes to you or I trying to get a loan after we forgot to return those Columbia House records 15 years ago and couldn't pay our bills, major banks have goldfish memories when it comes to major losses.  Whether it be lending to Latin American companies or to industries like airlines that go bankrupt with clockwork regularity, banks seem perfectly capable of repeating the same mistakes over and over again.

This is in part due to something I was trying to tell folks waaaaay back in October with the threatened liquidity crisis -- banks have to lend.  There is simply no good business model for a bank that involves sitting on hoards of cash under the mattress.  And when you have tens of billions of dollars to lend, you can't just do it in $100 increments -- you have to lend big slabs to large institutions.  And given that lots of other banks are trying to lend to the same guys, someone is going to issue that $300 million line of credit to Chrysler a couple of years hence.


Somehow I am on a couple of Minutemen / anti-immigration email lists  (I suppose I was put there by a staffer that did not read my site very carefully).  Anyway, I got this from some such group called the ALIPAC:

While hyper political correctness tries to hold sway in America as not to offend or disrupt trade with our Mexican neighbors to the south, the official name of the new flu pandemic is Mexican Flu and not the PC terms 'Swine Flu' or 'H1N1'.

Swine Flu and H1N1 are terms that describe large volumes of flu like viruses and not the specific strain at hand. Traditionally, pandemic flu strains are named after their points of origin. The point of origin for the new H1N1 pandemic flu, with swine flu DNA components is Mexico.

"It's a sad day in America, when you can't even call this pandemic strain by it's proper name 'Mexican Flu'," said William Gheen. "We are calling on all members of the media and citizens alike to refer to this pandemic virus as the Mexican Flu."

The World Health Organization (WHO) and several nations are now referring to the new H1N1 pandemic strain from Mexico as the 'Mexican Flu' which is now the official name.

The last three global pandemic flu viruses were named the Hong Kong Flu (1968), the Asian Flu (1957), and the Spanish Flu (1918).

Yeah, I am just sure these guys would have issued this same press release had the virus originated in Canada.  The attempt here to try to tar an entire ethnic group by hanging this flu around their necks is so transparent that I can't believe someone actually had the guts to issue this press release.  And I find it hilarious that a strongly Conservative group suddenly is looking piously to a UN organization (the WHO) for "official" guidance.  That had me laughing out loud.

I am glad he mentions the Spanish Flu, because it both 1) proves the author is historically illiterate and 2) shows the danger of trying to hang blame for a pandemic on one particular country.

First, it is pretty clear that the Spanish Flu did not begin in Spain.  As I understand it, as the world's governments clamped down on the media and suppressed news of the pandemic, the Spanish media was (relatively) unregulated.  The world therefore had a lot of its first reports about the flu from Spain, even though the first cases were not there, so people got in the habit of referring to the Spanish flu.

In fact, America firsters at the ALIPAC need to be really careful on this naming thing.  One of the leading theories of the Spanish flu's origins was that it began in the US (possibly Kansas or Boston) or at least that the mutation to its more deadly form occurred in the US, and then was brought to Europe by American soldiers.   I suppose if the ALIPAC is willing to call the 1919 flu the American Army flu, then I will call the current one the Mexican flu.

By the way, we as Americans should be very, very careful trying to demonize and wall off Mexico over this flu.  Because it might feel good here, but around the rest of the world most nations are lumping the US and Mexico together as the source, so any worldwide calls for closing borders and isolation are likely to backfire against the US.

It's Supposed to be Painful

Megan McArdle points out the real problem that carbon taxes and other CO2-abatement approaches have -- they only really work if it they are painful.  I mean, the whole point is not supposed to be to raise government revenue or just arbitrarily raise prices.  The whole point is to change behaviors, and the most powerful tool for behavior change is price changes.

Global warming activists are talking about 80% CO2 reductions.  This is an enormous number, especially since the relative cut has to be even higher to account for future growth, as reductions are generally pegged to current (or as in Kyoto, past) CO2 emissions levels.

A 40-cent gas tax is not going to do it.  Or, looking at how much behaviors changed when gas prices recently went up to $4, a $2.00 gas tax is not going to do it.  The Europeans have $6+ gas taxes and that is not enough to reach the levels activists want for this country.   It is likely going to take $10+ gas to even start to get the reductions in use and the shifts to much more expensive carbon-less technologies that would be required to hit 80% type goals.

All this means that we are NEVER going to have a carbon tax that really reflects the necessary rates to hit the emissions targets Obama and the alarmists claim to be committed to.  That is why we will get backdoor taxes that try to hide the tax and shift the blame away from Congress.    But none of these schemes, including cap and trade, will have any meaningful impact unless they lead to consumer price increases that change behaviors of the end users**.  But these approaches are preferable to lawmakers, as they somewhat disguise the relationship between legislation and prices, and give them some ability to blame private companies for the price increase, even where these increases are the inevitable result of carbon caps.

Postscript: This is further complicated because the major technologies the government is attempting to subsidize as part of meeting these goals are virtually useless.  Two in the transportation sector - ethanol and electric vehicles - are of questionable merit.  Ethanol has about zero efficacy in reducing Co2, and may actually increase it (but it is essential if one wants to win the Iowa caucuses).  Electric vehicles have some potential, but their impact is dependent on how electricity is generated.  Based on the current mix, shifts to electric vehicles just shift emissions from one place to another without much net reduction.  If someone were to propose a massive nuclear and electric vehicle program, they might convince me they were on to something.

**PS#2: I suppose you could reach these goals without fuel price increases.   Two alternatives:

  • Mandate certain transportation and other technology solutions, as well as certain limits (e.g. maximum house size, maximum number of TV's, etc).  This still has cost, though, in terms of enormous losses in personal liberty as well as likely enforced higher costs of major purchases, like cars.  So this is still likely a price increase, it just shows up in a different place.  Also, this may well not work -- there is very good evidence that without price changes in fuel, consumers react to higher MPG in their cars by driving more, thus sibstantially dilluting the carbon effect.
  • Enforce carbon limits combined with price caps on fuel and electricity.  This would be effective, probably, but of course would result in massive shortages of gas and electricity.  The rationing challenge would be enormous.

Friday Picture

Love this picture of 30 Rock, via Shorpy (including full-size image)


I'm Glad She Is OK

Queen Beatrix of the Netherlands survived an assassination attempt, though several of her staff and onlookers were not so lucky.

Years ago, my parents actually hosted Queen Beatrix's visit to Houston.   As a libertarian, I don't have much use for hereditary monarchy, but she was quite approachable and helped smooth over my wtf-am-I-doing-here nervousness at the event.  She also paid a visit to Princeton University while I was there, so she's got that going for her too.

Can We Afford to be This Forthright?

Radley Balko linked to this article for a different reason (at least I think it was for another reason -- I actually can't figure out why he linked to it, but all those Reason guys are often too hip for me to follow).  But I thought this line was funny:

An off-duty Essex police officer could face charges for shooting his allegedly neighbor's dog after it tangled with his Pug, state police say.

"Allegedly neighbor's dog?"  Is the fact that he is a neighbor in doubt?  Or is the ownership of the dog in doubt?  Or is it the species of the animal that is in doubt?

I Don't Think It Will Work This Way

From the Economist via TJIC:

the United Automobile Workers "¦ can own half of Chrysler's stock and a third of General Motors' stock if everything goes through"¦

anti-labour activists might also feel a bit of cheer. As Conor Clarke points out, today's events can only have one of two consequences:

It will change the incentives of the unions"”such that they realize their demands were bad for the company"”or it will run the company (further) into the ground and leave the union to pick up the pieces.

Worker ownership rarely works the way it's expected, so it's entirely possible that the UAW has sped up its own demise by cutting this deal.

I don't have any hope that it will work out this way.  The only incentive alignment that will exist is that union ownership of GM will align Congressional incentives to issue GM a near infinite stream of subsidies, bailouts, tax breaks, import restrictions, consumer incentives, etc.

We are switching ownership of GM from a politically fragmented and unorganized group (ie current GM shareholders) to a single organization that already has political clout and massive political lobbying infrastructure  (UAW).  Just look at the large corporate states of France and Germany.  Union involvement in corporate management doesn't change union practices, it changes government practices.

Update from Q&O:

There's some interesting stuff out there to read about the Chrysler bankruptcy, like people asking "why wasn't this done in the beginning"?

Simple answer - in the beginning there was no way to secure the UAW a majority stake in the company. Now, as Felix Salmon points out, that's been accomplished