Coyote Blog

Matt Welch has a good article here about a self-refuting NPR piece, which was obviously supposed to be a scare story about the loss of Sequestration money but turned out to be an illustration of just how stupid the sequestration panic was.  It's funny listening to the podcast of this episode as the NPR hosts desperately try to support the Administration position.

But one thing I thought was funny was this bit illustrating pre-sequester government staffing prioritization:

NPR's David Greene brings on Yvette Aehle, director of the Southwest Georgia Regional Airport in Albany, Georgia, to talk about the terrible danger that passengers will face now that Aehle's airport stands to lose its air traffic controllers:

AEHLE: Well, I don't really want to say anything is less safe. It's just a better opportunity for people to listen and to be heard and to understand where they are. And also, I'd like to point out that we don't have 24-hour tower coverage here currently. Those air traffic controllers are only directing traffic between 8 am to 8 pm seven days a week. And most of our heavy traffic is outside of those hours.

So the government chooses to staff the control tower only half the day.  But they choose to staff the tower during the 12 hours of lightest traffic, presumably because the employees wanted day jobs rather than night jobs.

As an aside, I will confess that my business of running public parks benefits from this.  The biggest management load on parks is obviously on weekends and in the evenings (in campgrounds).  Most employees of public agencies only work weekday days.  Its incredibly typical that public parks employees will take their vacations in July and August, by far the busiest months.  One advantage  (other than the obvious cost advantage) we have over public operations is that public agencies can't or won't ask their employees to work weekends and defer their vacations out of the summer time.  We are perfectly happy to hire people with very clear expectations that the job involves work on weekend and holidays.

I will give you my reminder of how to understand most government agencies:  Ignore the agency's stated purpose, and assume that it is being operated primarily for the benefit of its employees.  One will very often find that this simple heuristic is far better at explaining agency decisions than relying on the agency's mission statement  (this does not mean that there are not dedicated individuals in the agency truly, even selflessly, dedicated to the stated mission -- these two notions are not at all mutually exclusive.  Government agencies do not act badly because they are full of bad people, they act badly because their incentives cause good people to do stupid things).

I am happy to see the public school system coming in for much-deserved criticism.  I don't have anything to add to this article that I have not already said about schools many times.  But I want to make one complaint about a chart used in the blog post:

SAT scores are a terrible metric for measuring academic performance over time.

First, I am not at all convinced that the test scoring does not shift over time (no WAY my son had a higher score than me, LOL).

But perhaps the most important problem is that all students don't take the SAT -- it is a choice.  Shifts in the mix of kids taking the test -- for example, if over time more kids get interested in college so that more marginal academic kids take the test -- then the scores are going to move solely based on mix shifts.  Making this more complicated, there is at least one competitive test (the ACT) which enjoys more popularity in some states than others, so the SAT will represent an incomplete and shifting geographic mix of the US.  Finally, as students have gotten smarter about this whole process**, they gravitate to the ACT or the SAT based on differing capabilities, since they test in different ways.

To me, all this makes SAT scores barely more scientific than an Internet poll.

** If you have not had a college-bound student recently, you will have to trust me on this, but parents can spend an astounding amount of time trying to out-think this stuff.  And that is here in flyover country.  Apparently private school parents on the East Coast can be absurd (up to and including hiring consultants for 6 figures).  A few years ago it was in vogue to try to find your kid a unique avocation.  Violin was passe -- I knew kids playing xylophone and the bagpipes.  A friend of mine at a high profile DC private school used to have fun with other parents telling them his son was a national champion at falconry, the craziest thing he could make up on the spur of the moment at a cocktail party.  Other parents would sigh enviously, wishing they had thought of that one for their kid.

As I have read Mr. Ridley over the years, I have found him to have staked out a position on anthropogenic climate change very similar to mine  (we are both called "lukewarmers" because we accept that man's addition of greenhouse gasses to the atmosphere warms the world incrementally but do not accept catastrophic positive-feedback driven catastrophic warming forecasts).

I generally find room to nitpick even those whom I largely agree with, but from my perspective, this piece by Ridley is dead on.   (thanks to a reader for the link)

Via Eugene Volokh

Gator Country 101.9 morning deejays Val St. John and Scott Fish are back on the air today after a one-day suspension for an April Fool’s Day joke involving Lee County’s water supply.

The hosts of the “Val and Scott In The Morning Show” on the Bonita Springs-based country music station were suspended Monday after perpetrating the joke that involved telling listeners there was dihydrogen monoxide in the county’s water. Dihydrogen monoxide is another way to describe water.

Some listeners didn’t get the joke, however, and began calling the Lee County Utility asking about the issue....

Tony Renda, 101.9 general manager, said in a message to The News-Press today that suspension of the two deejays remained in effect until the following was accomplished:

“Although the VAST MAJORITY of our listeners got the joke, some didn’t. We needed to ensure that ALL of our listeners understood that there was no problem with the water,” Renda said in the message, adding that the station had to ensure that both the Lee County Utility and Lee County Health Department were both satisfied with the efforts.

After seeing the very funny Penn and Teller episode (where they have environmental activists signing a petition to ban dihydrogen monoxide), I am not surprised that people did not get the joke.  The amazing thing is the fact that the radio station, and society in general, felt the need to pander to this ignorance by actually suspending the radio show hosts.  In effect, they were forced to apologize for the public's appalling ignorance.

This is the society that progressives have been fighting for -- one in which the listener defines acceptable vs. unacceptable speech based on his or her own hurt feelings and ignorance.

I have written here before about how frequently steam plumes are used by the media to stand in as a proxy for pollution.  Here is another example, with extra points for artful photography and use of lighting conditions to make the white steam look dark and scary.

I am fascinated by Bitcoin and would love to see it be a success.  But Tyler Cowen has a quote that reflects some of my concerns about it:

…bitcoins are an uncomfortable combination of commodity and currency. The commodity value of bitcoins is rooted in their currency value, but the more of a commodity they become, the less useful they are as a currency.

Bitcoin is in the midst of an enormous price bubble, with increases in value of as much as 50% over just a few days.  This is astounding volatility for even a commodity, much less a currency.

Cowen said something at the end of the post, almost as a throw-away, that got my attention:  "There is, by the way, no current way to short Bitcoin."  The reason this caught my eye is that I have argued a long time that short selling is an important mechanism to reduce market volatility.

Every time we get to a market bubble or problem, insiders always start arguing against short selling saying it makes volatility worse and undermines markets.  But what they are really saying is that they like volatility so long as it is up. They had no problem with the bubble that propelled their securities up, they just don't want them to come back down to Earth.

In certain bubbles, when interest in a certain asset class gets really frothy, anyone who is skeptical of the asset and its new high values will sell and get out.  This means that as the bubble grows, all the skeptics are long gone from the market.  No longer owning the asset, these skeptics have no further "vote" or influence on the price.  Short selling is a way for skeptics to continue to influence the price and asset values.  To this extent, I think it tends to limit the peak of bubbles, just as bottom-fishers limit the debt of troughs.

Bitcoin would likely benefit from skeptics having some sort of influence on bitcoin values.  But without a way to short, Bitcoin values are driven solely by wacky anarcho-capitalists (e.g. people like me) and people fearful of Cyprus style depositor losses.  Essentially all the true believers are bidding against themselves.

Virgin glass bottom plane.

I have written before about how much I enjoy the physical board game Twilight Struggle.  This is not really going out on a limb, since it has occupied the #1 spot at BoardGameGeek for a while.  But over the last 3 months my son and I became totally addicted.  He is at college, but we played online via the terrific Twilight Struggle add-on in the VASSAL gaming engine  (all free).  Very highly recommended.

First, an update on SimCity.  I am a huge SimCity series fan from way back.  I was excited by the new release, which turned out to be a total disaster.  I wrote several weeks ago about the horrendous decision to make SimCity an always-online game, which led on day 1 to the game being unplayable for most because of server problems and overloads at EA.

Since that time, they have (mostly) fixed the server overload issues and I have been able to play.  Sort of.  The game is beautiful and the interface is pretty nice.  And the game tantalizing retains many of the elements that made the previous games so compelling to some of us.  But in the end, the game is a fail.

First, it is full of bugs.  One horrible bug ensures that over time, almost every city you build will crash on the online server.  The only solution is to accept a rollback to an earlier state, though every once in a while this leads to a total city loss.

Beyond that, almost every element of the game is broken.  Sims will suddenly stop going to school, and complain about there being no education when an empty school is right across the street.  City water tables can be drained in a matter of months, making a city unplayable -- one can avoid this only by putting their sewer plant right by their water supply.  Certain city specializations added to the game, like gambling, don't work right.   Meteor showers cities every few months and can't be turned off.  etc. etc.

It may be that this game will be playable in 6 months or so, but even then I fear that the EA team has simplified the game so much and removed so many options to appeal to the mass market XBOX set that the wonky complexity many of us enjoyed in early games will never be there.  In particular, city size is limited such that in about 20 minutes of play I can completely fill the city space.  All that one can even do with the game after that is just sit and watch density increase and expand a fire station or two as the population grows.  In fact, a lot of the game for me runs unattended, since EA had to turn off the fast speed mode.  The city now needs to just run for hours for anything to happen, so I resorted to leaving it on in the other room and checking back on it every hour or two.

Oh, and by the way.  The highly touted multiplayer features are a bad joke.  Someone in the business department told developers that the game had to be online for piracy protection, and told them to go develop some game features that justified this decision so they could tell users that the online requirement was really for their benefit and not for copy protection.  Well, they failed.

Bioshock Infinite.   I don't play a lot of first person-shooter style role-playing games, but my son talked me into playing the new Bioshock.  He has played a lot of this genre (e.g. the Mass Effect series) and said that this was the best he had ever played.  This evaluation may be in part due to his fascination with strange dystopic visions of society, because we certainly get one in this game (as in each of the Bioshock series).

I am not every far into it but I will say that is a fun experience.  So far I would say it was less of a game and more of an immersive novel -- WTF is this place I am in and what is going on.   The environment is really fascinating to explore.  I am still trying to figure out the back story, but piecing it together is a fun process.  Already I have been to several memorable locations.

First, I will say that I am perfectly happy for folks who are either good earners or good savers or both and who choose to use their accumulated wealth to stop working at some age.

However, I am completely lost as to how we have somehow decided that multi-decade end-of-life paid vacations, starting as early as age 50, is somehow an inalienable right that must be guaranteed by government.  I suppose I can see a safety net for folks who, though age and disability, simply get too old to be productive (but remember that I have nearly 500 people mostly over 65 who work for me, mostly doing manual trades, so don't tell me older people can't be productive).  And that was what Social Security initially was -- the age 65 was chosen as a retirement age not because it guaranteed 10-15 years of senior leisure but because it matched the life expectancy at the time.  The equivalent age would be well into the 70's today.

Of course, others think differently.  A group is now proposing an expanded Social Security program that would guarantee nearly 100% of earnings to low-income retirees (there are smaller increases for higher income workers but most all the change is for low-income folks).

While they are proposing higher taxes to support this, my guess is that it will not be long before a wealth tax is suggested.  After all, they are hoping to replace 401K's as a savings vehicle.  If so, why not seize those funds to help pay for the plan.  The other day, Kevin Drum mocked those who fear a government seizure of 401K's as the tinfoil hat brigade.  I would be willing to bet him that within the decade, it will become a mainstream idea in the progressive community to fund shortfalls in Social Security and Medicare with a full or partial seizure of 401K's.

We all know from progressive and Democratic writers the the Community Reinvestment Act and other efforts to offer cheap home loans to people without good credit had nothing to do with the mortgage industry offering too many loans to people without good credit.

So we should not be in the least bit worried that the Obama Administration is calling for more mortgages to be given to people with weaker credit, while sub-prime auto loans are simply booming.  Because we have learned from Iceland and Greece and Cyprus that the best way to deal with a debt crisis is by encouraging consumers to take on more debt, and the best way to respond to an asset bubble is to try to re inflate the bubble.

All of this, of course, is simply crazy talk.  The people who are involved HAVE to know this won't end well, because the most recent example of this leading to disaster is only 4 years old.  Hell, the people doing this were in office when this same approach fell apart last time.  But politicians refuse to face some pain now to avoid huge pain in the future - for politicians, the discount rate on pain is infinite.

When I read this in our local paper, alarm bells immediately went off:

A friendship cemented while working together on the state’s economic development efforts has led to a new partnership linking Roy Vallee, the former Avnet Inc. chairman and chief executive officer, with private developer Don Cardon.

Great, two folks who have focused on bringing crony corporatist benefits to selected local businesses and business relocations are going into business together.  I don't know these guys, I am sure they are fine folks, but my first thought was a business that leveraged their connections with government to create private profits.

Reading further, this seems like a good guess:

The two metro Phoenix business leaders say they will collaborate on large commercial developments, including those with a special public-interest focus and those with special complexities....

Cardon spent three years at the Arizona Commerce Authority, a public-private partnership, and the predecessor Arizona Commerce Department. Aside from that, he perhaps is best-known as a driving force behind CityScape, the three-block, $1.2 billion mixed-use development in downtown Phoenix. He cites as a strength his ability to bring private and public interests together on a project.

Yep, I definitely think I am on to something:

The firm will strive to encourage a “collective vision” and “make sure projects are worthy of investment and will be successful,” Cardon said. “Everything we do will involve public value, enriching the quality of life.”

You know the type of project -- the ones where the city / state / Feds justify investing millions of taxpayer money into private projects because "they create jobs" (like those at Solyndra).  In fact, the two partners are already polishing up this mantra, which I am sure we will hear over and over:

Deals typically will exceed $100 million and will create hundreds of jobs, both in the development stage and when complete, he said. The company , however, will maintain a fairly lean staff.

“We’re not a big employer, but we’ll be a job creator,” he said.

I want to make a couple of quick points:

• Investments whose primary return is "jobs" are not investments, because jobs are a cost, not an income stream.  Investing public money to create jobs means that one is investing money now so that it incurs costs later. 
• All successful capitalist enterprises that make  a profit by definition create "public value" and "enrich the quality of life."  Otherwise no one would buy their product or service and they would fail.  In fact, only publicly-funded projects can evade this sort of accountability.  When it is said that these projects deliver "public value," what is meant is that they deliver benefits that a few self-selected people have defined as somehow interesting to the public, but which it turns out the public (when given a choice) is unwilling to pay for.  Which is how we get the local town of Glendale continuing to subsidize an ice hockey team for $25 million or so a year.

"I wish I had ended up with a Princeton man"

source

I found out more about why the WordPress Bad Behavior plugin was blocking updating of my Feedburner RSS feed -- apprently, Google got a bunch of its IP addresses blacklisted in project Honeypot, which Bad Behavior uses as one source of spam data.  Here is more:

This is caused by an architectural problem at Google, and will require Google to resolve the issue for the problem to go away permanently. The issue is that, in the case of FeedBurner, Google uses IP addresses which are shared by third parties using Google App Engine, some of which are spammers. The spammers quickly get Google’s IP address blacklisted all over the Internet, and suddenly FeedBurner stops working.

If you are impacted by this issue, you can whitelist the affected IP addresses or the FeedBurner user agent string, or disable Project Honey Pot. Be aware that doing any of these will increase the amount of spam you receive. You should also complain to Google, since this isn’t the first time this has happened, and they seem to have done absolutely nothing about it.

You can't make this up.  Ray Lane, the very nicely politically-connected investor whose connections to Obama are often credited with Fisker scoring millions of taxpayer money, made a video several years ago praising Obama as a great new model of venture-capitalist-in-chief.

I can't believe any intelligent human being would think that the right role for the President is to be a venture capitalist with taxpayer money, or that even if this were so that Obama would be the right person with the right skills to do it well, but I suppose trying to score hundreds of millions in taxpayer money changes your perspective.

But the funny part is the example he uses - he thinks the best evidence of Obama being a swell investor is ... Solyndra.  Obviously filmed before Solyndra failed  (and the US government allowed all the remaining assets to go to another set of Obama cronies), this video is hilarious.

Even in all-electric mode, the Fisker Karma gets worse mileage than an SUV  (only a deeply flawed EPA MPGe rating, purposely designed to over-state electric car efficiency, hides this fact).

What a surprise -- apparently forced to make their case to private investors now rather than just DOE bureaucrats whose main criteria is "did this company support President Obama in the last election", Fisker is having trouble raising money and may declare bankruptcy.

Matt Yglesias and I certainly do read history differently.  He writes recently in a Salon article:

The basic economic foundations of industrial capitalism as we've known them for the past 150 years or so have an activist state at their core. Building political institutions capable of doing these things properly is really difficult, and one of the main things that separates more prosperous places from less prosperous ones is that the more prosperous places have done a better job of building said institutions. There's also the minor matter of creating effective and non-corrupt law enforcement and judicial agencies that can protect people's property rights and enforce contracts.

The point is, it takes an awful lot of politics to get an advanced capitalist economy up and running and generating wealth. A lot of active political decisions need to be made to grow that pie. So why would you want to do all that? Presumably because pie is delicious. But if you build a bunch of political institutions with the intention of creating large quantities of pie, it's obviously important that people actually get their hands on some pie. In other words, you go through the trouble of creating advanced industrial capitalism because that's a good way to create a lot of goods and services. But the creation of goods and services would be pointless unless it served the larger cause of human welfare. Collecting taxes and giving stuff to people is every bit as much a part of advancing that cause as creating the set of institutions that allows for the wealth-creation in the first place.

...uh, just because

via Zero Hedge

 Update:  Whenever I argue with people about this, I find out that we share different assumptions.  Those who seem to support the bailouts assume that given some breathing space, the reckoning in Europe can be avoided.  I assumed the reckoning is unavoidable, and will come either soon or at best in the next cyclical downturn.  And it will be far worse in, say, 2015 than it would have been in 2010.  Every time we delay the reckoning, we make it far worse.

And then there are politicians.  I don't think they honestly know or care if the reckoning is unavoidable. They only care if it does not happen this minute.  For politicians, the discount rate on pain is infinite.  Future pain is thus always better than current pain.