Coyote Blog

I had not realized that some Federal employees did not have to participate in Social Security.  Intriguingly, this fact was raised by people who were defending government pay as not being excessive -- they said something like, "well, some workers don't even get Social Security."  Via Bryan Caplan

Some government employees don't participate in Social Security. How does that change the benefits picture?

[T]hat's irrelevant because they're neither paying nor receiving benefits. If you follow Social Security, you know it pays a low rate of return... [N]ot to participate in Social Security is actually a benefit, because they're keeping more.

I agree. Not participating in Social Security is a huge benefit.  The implicit return on "premiums" paid by you and your employer is typically below zero.  In other words, if you took your social security taxes and stuffed them in a mattress, you would get a better return.  As I wrote in the link above

as a retirement program, [social security] is a really, really big RIPOFF.  Ever worker in this country is being raped by this retirement plan.  In fact, it is the worst retirement program in the whole country:

• As we see above, it pays a negative rate of return
• It is not optional "“ you go to prison if you choose not to participate
• Unlike a private annuity contract, the government can rewrite your benefits level any time, and you have to take it.  In fact, my statement says "Your estimated benefits are based on current law.  Congress has made changes to the law in the past and can do so at any time.  The law governing benefit amounts may change because, by 2040, the payroll taxes collected will be enough to pay only about 74 percent of scheduled benefits."
• There are no assets backing this annuity!!  An insurance company that wrote annuities without any invested assets backing them would be thrown in jail faster than Jeff Skilling.  The government has been doing it for decades.

One substantial problem with the TSA that is seldom discussed is that in the switch from using private security to government agents to screen passengers, there was always going to be a temptation by the Feds to expand the airport screening from narrowly a search for weapons that might endanger an airplane to a catch-all crime search point.  Here is an example of the latter:

That same screener started emptying her wallet. "He was taking out the receipts and looking at them," she said.

"I understand that TSA is tasked with strengthening national security but [it] surely does not need to know what I purchased at Kohl's or Wal-Mart," she wrote in her complaint, which she sent me last week.

She says she asked what he was looking for and he replied, "Razor blades." She wondered, "Wouldn't that have shown up on the metal detector?"

In a side pocket she had tucked a deposit slip and seven checks made out to her and her husband, worth about $8,000.

Her thought: "Oh, my God, this is none of his business."

Two Philadelphia police officers joined at least four TSA officers who had gathered around her. After conferring with the TSA screeners, one of the Philadelphia officers told her he was there because her checks were numbered sequentially, which she says they were not.

"It's an indication you've embezzled these checks," she says the police officer told her. He also told her she appeared nervous. She hadn't before that moment, she says.

She protested when the officer started to walk away with the checks. "That's my money," she remembers saying. The officer's reply? "It's not your money."

At this point she told the officers that she had a good explanation for the checks, but questioned whether she had to tell them.

"The police officer said if you don't tell me, you can tell the D.A."

From Kevin Drum

Bob Somerby is following the latest Social Security chatter and hopes that Paul Krugman can explain how the trust fund works in an understandable way:

The trust fund is just an accounting fiction "” a pile of worthless IOUs! Generations of voters have been misled by such skillfully-wrought presentations.

....Krugman is our most valuable player by far "” our only player at the top of the press corps. Can he disentangle the trust fund scam in a way average people will understand? We don't know, and it isn't his job; no player should be expected to carry the ball on every play from scrimmage. Tomorrow, we'll offer our own ideas at how the "there-is-no-trust-fund nonsense" might best be approached, in a way average people can follow.

Well, hell, I'll take a crack at it. Here's the simple version.

In 1983, when we last reformed Social Security, we made an implicit deal between two groups of American taxpayers. Call them Groups A and B. For about 30 years, Group A would pay higher taxes than necessary, thus allowing Group B to reduce their tax rates. Then, for about 30 years after that, Group A would pay lower taxes than necessary and Group B would make up for this with higher tax rates.

This might have been a squirrelly deal to make. But it doesn't matter. It's the deal we made. And it's obviously unfair to change it halfway through.

This is an incredible fantasy.  Absolutely no one thirty years ago (Drum dates the "deal" to 1983) explicitly or even secretly crafted any such deal.  Seriously, is Drum really positing that a Democrat-dominated Congress led by for-god-sakes Tip O'Neil really said "lets have poor people pay some of rich people's taxes for thirty years?"  Just last night I was reading a quote from Hitler late in WWII that asserted he actually let the British escape from Dunkirk on purpose because he wanted the British to know he had no real quarrel with them.  While it certainly is true Hitler never really wanted a war with Britain, this is just a self-serving rewrite of history.  Drum is doing the same thing.  Its amazing to me that an obviously intelligent person can convince himself of this.

Here is the real, simple explanation of the Social Security trust fund:  Social Security was spinning off huge piles of money and no Congress person of either the Coke or the Pepsi party could resist grabbing it and spending it in a way that would support their reelection.  They ended up spending it all.  Every bit of it, all gone.  The Social Security trust fund is the Enron 401K plan stuffed with Enron stock.

Drum gets to his bizarre theory because he believes the fiscal discipline problem over the last 30 years was all due to tax cuts rather than spending, and that all these tax cuts were for rich people.   Of course, throughout the last 30 years, the share of taxes paid for by the rich have steadily risen, so the claim is absurd on its face, but the false assumptions it is built on are ones that every progressive accept as holy writ.

This paragraph is particularly a howler:

The physical embodiment of this deal is the Social Security trust fund. Group A overpaid and built up a pile of bonds in the trust fund. Those bonds are a promise by Group B to repay the money. That promise is going to start coming due in a few years, and it's hardly surprising that Group B isn't as excited about the deal now as it was in 1983. It's never as much fun paying off a loan as it is to spend the money in the first place.

It would be some exercise to try to define groups A and B in a non-overlapping manner.  The fact is everyone is in group A, as almost everyone overpays into Social Security on a return on capital basis -- the retirement income most people get represents generally a negative net ROI on the "premiums" paid.  And it is amazing to me that I have never heard that we now have government bonds that must be paid back only by a specific sub-section of the population.  It may very well have been a progressive assumption that only rich people would be on the hook for every dollar of government debt run up over the last 30 years, but that fact will likely be a surprise to just about everyone else in the country.  Here is his conclusion:

But pay it off they must. The rich have been getting a loan from the middle class for decades...

Delusional.

I have absolutely no confidence that we will get 25% more work from our city employees on Mon-Thur to make up for a Friday day off.

Thursday could become the new Friday for thousands of Phoenix city employees in an effort to save money and keep workers happy.

Phoenix officials are considering mandatory Fridays off for administrative employees but would exempt those who support functions that can't be shut down such as water-plant employees, aviation workers and public-safety staff.

If approved, Phoenix would become the largest municipality in the state and the country on a mandatory four-day schedule, where employees typically work 10-hour days with Fridays off.

I am not sure we currently get 8 hours of work from many of them, and having been programmed for years or decades to an 8 hour day, I don't see them changing their behavior.  My alternate plan would be to cut everyone back to 32 hours a week, cut their pay by 20%, AND save energy on Friday.  By "alternate" I mean alternate to my base case of sending them all home permanently and waiting to see how long it takes for anyone to notice.

A while back in my Forbes column on the incentives faces by government workers, I wrote

People sometimes say that problems involving difficult trade-offs are hard for government bureaucracies to handle. This isn't true--most of these trade-offs are in fact easy for them to handle, because the outcome is as predetermined as a river's path through a well-worn valley. The problem is having these trade-offs made well.

Most of the tough decisions in the Gulf involve violating a rule or standard practice for which an agency and its staff have specific accountability for compliance. This is balanced against the opportunity to gain some benefit that is outside of the agency's responsibility and for which it will not be rewarded or punished. An example would be the administration's ban, at EPA insistence, of what BP ( BP - news - people ) claims is the most effective oil dispersant because it is potentially toxic. Does this dispersant's toxicity create more or less harm than the lost opportunity of preventing a lot of oil from entering coastal wetlands? The answer doesn't matter, because there was only one way the EPA was ever going to rule on this--their employees are easily able to duck blame for any damage from the spill, but they would be right on the firing line if even a single living creature was provably harmed by their allowing the dispersant to be utilized. Fear of blame for consequences of an action outweigh the opportunity costs of inaction every single time.

We see this again in this video, where school teachers and nurses in California argue that it is better to allow kids to die from their inaction than to take an action (e.g. dispense a life-saving medication)  that might have harmful consequences.

One of the arguments Democrats have made for nationalized health care is that government expenses will be much lower than private companies.  This is on its face absurd, given most people's experience with government agencies, but is nominally supported by low expense ratios in Medicare.  I won't go into this today, but this is more an artifact of the way government does accounting as well as operations decisions at Medicare which may be non-optimal (e.g. Medicare does much less claims verification and investigation than private companies, which is why we see huge fraud cases from time to time).

Anyway, we get a fresh example of private vs. public expenses on a very comparable basis in California workers comp.  The public State Fund acts as an insurer of last resort as well as a competitor to many private providers.  The fact that it is an insurer of last resort will increase its loss ratios, but its expense ratios of management or "claims adjustment" expenses should be similar.  But of course they are not.

State Fund's unallocated loss adjustment expense ratio was a whopping 51.4% last year compared to 8.9% for private carriers, while State Funds allocated loss adjustment expenses were 9.8% compared to the industry's 13.8% respectively.

This means the management expense ration of the state agency is 61.2% of premiums vs. 18.7% for private companies.  This just makes laughable the pious requirement in Obamacare that insurance companies keep their expense ratios under 20% -- or else the more efficient government agency will take over.

We are facing a huge 29.6% increase in workers comp rates in California, in part because the very high State Fund expense ratios are averaged into the calculation.

My column for Forbes is up this week, and yet again I address issues related to the stimulus.  This time, rather than questioning the Keynesian multiplier, I observe that Congress has passed several pieces of legislation which act as "anti-stimulus" whose magnitudes dwarf that of any fiscal stimulus programs, even at multipliers greater than one.

Larger corporations are going to face different economics, but they too seem to be anticipating higher future costs from this legislation. For example, while they may not face the penalty for having no health care plan, they will face higher Medicare taxes, taxes on overly rich plans, and increases in health care premiums. If the average business is anticipating a 5% increase in payroll-related expenses, and given that total private payrolls in the U.S. are around $6 trillion, this implies that businesses may be planning for $3 trillion of health care anti-stimulus over the next 10 years.

Similar scale numbers can be found for the overall effects of cap-and-trade. Perhaps the best estimate we have is the CBO scoring of the Kerry-Lieberman bill, which estimated that payments for carbon allowances over the first ten years would total $751 billion. Assuming that the costs of most of these allowances are passed on to consumers, then this bill represents another three quarters of a trillion in anti-stimulus. In addition, expiration of the Bush tax cuts, card check, and a number of new regulatory initiatives all will drive this anti-stimulus expectation higher. Is it any wonder, then, that the private sector yawns when the Congress rushes back from vacation to pass a $26 billion jobs bill?

Congress just passed a new $26 billion payoff to state governments, easing the pressure on states to institute some sort of fiscal responsibility.  The follows on the heals of last year's tens of billions of dollars in direct aid to state budgets in the original stimulus bill.

Taking the pressure off states for real fiscal reform is bad enough, but this is worse:

Maintaining the salaries and generous benefit plans for members of teachers unions is indeed a top Democratic priority. That's why $10 billion of the bill's funding is allocated to education, and the money comes with strings that will multiply the benefits for this core Obama constituency.Specifically, the bill stipulates that federal funds must supplement, not replace, state spending on education. Also, in each state, next year's spending on elementary and secondary education as a percentage of total state revenues must be equal to or greater than the previous year's level.

This is roughly equivalent to the government telling mortgage holders that took on too much debt that the government will bail them out, a clear moral hazard.  But then it goes further to force the mortgage-holder to promise to take on a bigger mortgage next year.  Unbelievable.

In a move right out of Atlas Shrugged, Texas is singled out for special penalties in the law because, well, it seems to be doing better than all the other states economically and is one of the few that seem comitted to fiscal responsibility

For Texas, and only Texas, this funding rule will be in place through 2013 [rather than 2011]. This is a form of punishment because the Beltway crowd believes the Lone Star State didn't spend enough of its 2009 stimulus money.

So much for equal protection.  This Congress sure has set an incredible record for itself in choosing to reward and punish individual states (remember Nebraska and Louisiana) in its legislation.

The WSJ thinks perhaps a different kind of multiplier, other than the Keynesian one, is behind this legislation.

Keep in mind that this teacher bailout also amounts to a huge contribution by Democrats to their own election campaigns. The National Right to Work Committee estimates that two of every three teachers belong to unions. The average union dues payment varies, but a reasonable estimate is that between 1% and 1.5% of teacher salaries goes to dues. The National Education Association and other unions will thus get as much as $100 million in additional dues from this bill, much of which will flow immediately to endangered Democratic candidates in competitive House and Senate races this year.

The government is the first organization, given its unique powers to use force against citizens, that should be subject to surveillance and transparency.  Unfortunately, since it is the government itself that sets the rules, it is usually the last.  Following in the tradition of a Congress that exempts itself form most of its workplace regulation, comes the new financial bill which apparently exempts the SEC from most public scrutiny

Under a little-noticed provision of the recently passed financial-reform legislation, the Securities and Exchange Commission no longer has to comply with virtually all requests for information releases from the public, including those filed under the Freedom of Information Act.

The law, signed last week by President Obama, exempts the SEC from disclosing records or information derived from "surveillance, risk assessments, or other regulatory and oversight activities." Given that the SEC is a regulatory body, the provision covers almost every action by the agency, lawyers say. Congress and federal agencies can request information, but the public cannot.

That argument comes despite the President saying that one of the cornerstones of the sweeping new legislation was more transparent financial markets. Indeed, in touting the new law, Obama specifically said it would "increase transparency in financial dealings."

Apparently the children of the sixties, who once pushed for the Freedom of Information Act as a check to those in power, now are rolling it back once they are in power themselves.

At first I thought Kevin Drum was re-branding "laissez faire" into "economic nihilism."  But after reading the linked article, which blames deficits 100% on Republican tax-cutting rather than either Democratic or Republican free spending, I suppose he is really equating the policy of opposing tax increases to economic nihilism.    For this to be true, given the definition of nihilism, it means that all meaning, purpose, and everything of intrinsic value flows from the government.  Denying government more money = nihilistic negation of reality.

Please stop talking about there being a fiscal crisis or a government debt crisis.  All this does is give Democrats the opening next year to raise taxes.  "See," they will say, "we care about reducing the deficit."

What we have currently is a government spending crisis.   And the only way to solve it is with less spending.

Thanks, and we now return you to your regular programming.

Ted Bridis of the AP reports

For at least a year, the Homeland Security Department detoured hundreds of requests for federal records to senior political advisers for highly unusual scrutiny, probing for information about the requesters and delaying disclosures deemed too politically sensitive, according to nearly 1,000 pages of internal e-mails obtained by The Associated Press....

Internally, Homeland Security was adamant that Napolitano's political advisers were merely reviewing materials before they were distributed, not making the call on whether they should come out. "To be clear, this is a review not an approval," Callahan wrote.

Yet many e-mails directed Homeland Security employees never to release information under FOIA without approval by political appointees.

"It is imperative that these requests are not released prior to the front office reviewing both the letter and the records," Papoi wrote in an e-mail to the agency's officers responsible for administering the law.

Another e-mail described a request from USA Today that was "tagged by the front office and requires approval."

Under the law, people can request copies of U.S. government records without specifying why they want them and are not obligated to provide personal information about themselves other than their name and an address where the records should be sent.

Yet several times, at least, junior political staffers asked superiors about the motives or affiliations of the requesters.

The directive laid out an expansive view of the sort of documents that required political vetting.

Anything that related to an Obama policy priority was pegged for this review. So was anything that touched on a "controversial or sensitive subject" that could attract media attention or that dealt with meetings involving prominent business and elected leaders.

Anything requested by lawmakers, journalists, activist groups or watchdog organizations had to go to the political appointees. This included all of AP's information requests, even a routine one for records that had already been sought by other news organizations.

Some Federal agencies are able to maintain their mission over many decades without much change from administrations that come and go.  The National Park Service is a good example.

Other agencies, in the desire to get funding, constantly recast their mission based on whatever flavor of the month is hot.  Here was one example I cited before, from the NIH, which, amazingly, managed to recraft its mission in the context of climate change to make itself more immediately relevent to the Obama folks:

Remember, the point of this all is not science, but funding.  This is basically a glossy budget presentation, probably cranked out by some grad students over some beers, tasked to come up with scary but marginally plausible links between health issues and climate change.   Obama has said that climate is really, really important to him.  He has frozen a lot of agency budgets, and told them new money is only for programs that supports his major initiatives, like climate change.  So, every agency says that their every problem is due to climate change, just as every agency under Bush said that they were critical to fighting terrorism.  This document is the NIH salvo to get climate change money, not actual science.

I have worked with the US Forest Service for years as a private operator of many of their recreation sites (for whatever faults they might have, they have been an early innovator on privatization -- without it, they could never have kept all their recreation sites open given their budget constraints).  The USFS has always had a mission challenge.  They are specifically tasked with balancing five missions -- Environmental preservation, timber, minerals extraction, recreation, and ... I can't remember the other one.  Grazing maybe.

In practice, this has meant of late that whatever interest groups among these five who are willing to spend the most time in court are able to shape the USFS mission in their direction, and in practice this has meant environmental groups.  As a result, Timber, the main source of USFS funding (from private timber fees) has pretty much been killed in the USFS, creating a funding crisis.  With their very logical timber mission gone, the only thing the USFS is unique at is recreation, as it is (surprising to many people) the largest recreation organization in the world.  However, this seems to be next on the environmentalists' target list.

So I suppose it is no surprise that the US Forest Service has decided to abandon any sense of long-term mission and simply glom onto whatever is the pet issue of the current administration.  For this year, they have latched onto climate:

The Forest Service has issued a national road map for responding to climate change, along with a performance scorecard to measure how well each individual forest implements the strategy.The new blueprint outlines a series of short-term initiatives and longer-term projects for field units to address climate impacts on the country's forests and grasslands.

"A changing global climate brings increased uncertainties to the conservation of our natural resources," Agriculture Secretary Tom Vilsack said in a statement. "The new roadmap and scorecard system will help the Forest Service play a leadership role in responding to a changing climate and ensure that our national forests and grasslands continue to provide a wide range of benefits to all Americans."

The last sentence could be rewritten as "we will continue to do everything we have done in the past but relabel as much as we can as having to do with climate change."

I can only speak to the recreation component, but this is the largest recreation organization in the world.  In some sense this new mission is roughly equivalent to the National Park Service hypothetically announcing in the Bush administration that it was going to focus on the war on terror.  In many areas of the USFS they, at their own admission, have years or decades of deferred maintenance.  From watching them at close range, they very clearly don't have the resources to handle the missions they have already taken on, and so it is going to dedicate its resources to this:

Immediate assessment actions include providing basic and applied science to help managers respond to climate change, conducting workshops, utilizing national monitoring networks, furnishing more predictive information, developing vulnerability assessments, tailoring monitoring and aligning service policy and direction.

Longer-term assessment will focus on expanding the agency's capacity for assessing the social impacts of climate change, implementing a genetic resources conservation strategy and fortifying internal climate change partnerships.

To the extent that some of this means "monitor forest health," I thought the organization was already doing that.  As to the value of the rest of this stuff?  Forgetting for a minute if the work should even be undertaken, under what possible allocation of expertise in the Federal bureaucracy does "assessing the social impacts of climate change" fall under the purview of the Forest Service?

Apparently, independent candidates in Wisconsin can identify themselves with a 5-word description of what they are about.   Tragically,  one woman was not able to use "NOT the 'Whiteman's Bitch,'" but I would love to see what you would use if you were running.  I am still thinking about mine, but if I really wanted to get elected, "10 dollars for every vote" might be effective.  Post yours in the comments.

Via Valley Fever

The day has finally arrived, Arizona: The state's much-loathed photo-radar speed enforcement program comes to an end tonight.At 11:59 p.m. today, the plug will be pulled on all the state's speed-cams and anyone caught speeding past one will no longer have to fear a process server dropping off a nasty-gram at their homes.

Unfortunately, 1) bazillions of red light cameras will still be on duty and 2) I believe this only applies to state photo-radar cameras -- city cameras will still exist.  So I am not sure if this applies, say, to cameras on surface streets like Frank Lloyd Wright in Scottsdale.

From New York Magazine

The wrinkly old men that we elect to Congress are so horny and gross that the American taxpayer shells out on average $1 million a year in settlements to sexually harassed Hill staffers, according to the Office of Compliance. The level of perviness fluctuates from year to year "” in 2007, 25 staffers were paid a total of $4 million.

Kids Prefer Cheese comments

Wouldn't such settlements possibly be of interest to voters, the media, and opponents of the crotch-grabbing perv-boys? It sure would! And that is why Congress passed a law saying that no one can obtain this information!

Via the South Bend Seven.  The New York article also makes this observation:

According to the same Office of Compliance, which is on a roll today, "the Capitol and other congressional buildings are rife with fire traps and other pervasive problems of age and dangerous design, with an estimated 6,300 safety hazards lurking on Capitol Hill this Congress." Congress has exempted itself from federal workplace safety regulations, so it isn't legally obligated to repair any of these hazards, many of which will be expensive. It's the kind of short-sightedness we've all come to expect from our lawmakers.

It is irritating that they exempt themselves from the same laws everyone else has to follow, though I can't say I am too worked up at the thought of some Senator slamming his or her head on a low doorway.

As explained by Steven Pearlstein, who presumably has created so much economic value in his lifetime that he can cast stones from the high ground

And some of it, to be quite frank, Robert, is an appalling lack of imagination and guts on the part of these same CEOs who are complaining and pointing the finger at every else. You know, these guys are very good at cutting. They're very good at blaming others. They're a little less good at coming up with creative new products and services, and they've got a little flabby in that regard in the last few years where the focus has been on surviving and cutting, as it should had been. But they're not the gutsiest group of people in the world.

And by the way, they get into this group think which you - you know, the fact that they all say it, it's sort of like a notion that starts in the country club locker room, and everyone is nodding, and then the one passes it on to the other. And now, you know, this similarity of the comments betrays this sort of group think that is almost self-fulfilling at this point.

Mr. Pearlstein is absolutely right.  As CEO of my company, I am out of creativity.  I will give you an example.  The new health care law appears (the implementation is still hazy) to impose a $2000 penalty per employee for not having a corporate health care plan (all my employees are retired, so they already have health care plans, but that does not affect the penalty).  With a bit over 400 employees, that makes the penalty something north of $800,000 a year.  This is larger than my annual net income.  And Mr. Pearlstein is correct -- I am absolutely at a loss as to how to deal with this, which just proves his point that all we CEO's have an appalling lack of creativity.

Mr. Pearlstein seems to be holding an image of the Fortune 25 in his head, but in fact most job creation is by smaller companies.  I wrote a while back on Forbes.com why CEO's of smaller companies have be having their creativity diverted.

Postscript: On January 10, 2008, our company actually, shockingly, had a creative idea.  Instead of refueling our boats at a lake in Ventura County, CA using zillions of 5 gallon gas carriers, lets put in a small double wall gas tank.  It would save a ton of useless labor, it would greatly reduce fuel spills on the lake (the nozzle, unlike the 5 gallon cans, has overflow protection), it would save lots of trips into town to fill gas tanks -- a winner all the way around.  Granted this was a pretty small idea, but sometimes success in small business is a lot of bunts and singles.

After hundreds of manhours of effort, numerous checks written to the County and the state, and I don't know how many forms filled out, on July 1, 2010, exactly 901 days after we got the creative idea, Ventura County gave us the last permit we needed to go forward.

Megan McArdle has a long excerpt from a PJ O'Roarke book that described a sudden acceleration panic around Audis in the the 1980s.  You will be amazed at how similar it all is to the more recent Toyota panic.

Based on past studies of sudden acceleration problems  (e.g. that the vast majority of sudden acceleration problems mysteriously happen to senior citizens) I predicted that many of the Toyota failures would come down to operator error.  The incentives for operators are substantial, even before tort action, both from a psychological and monetary standpoint to blame their own errors on Toyota.

The U.S. Department of Transportation has analyzed dozens of data recorders from Toyota Motor Corp. vehicles involved in accidents blamed on sudden acceleration and found that at the time of the crashes, throttles were wide open and the brakes were not engaged, people familiar with the findings said.

The results suggest that some drivers who said their Toyota and Lexus vehicles surged out of control were mistakenly flooring the accelerator when they intended to jam on the brakes. But the findings don't exonerate Toyota from two known issues blamed for sudden acceleration in its vehicles: sticky accelerator pedals and floor mats that can trap accelerator pedals to the floor.

The findings by the National Highway Traffic Safety Administration involve a sample of reports in which a driver of a Toyota vehicle said the brakes were depressed but failed to stop the car from accelerating and ultimately crashing.

The data recorders analyzed by NHTSA were selected by the agency, not Toyota, based on complaints the drivers had filed with the government.

The findings are consistent with a 1989 government-sponsored study that blamed similar driver mistakes for a rash of sudden-acceleration reports involving Audi 5000 sedans.

The Toyota findings, which haven't been released by NHTSA, support Toyota's position that sudden-acceleration reports involving its vehicles weren't caused by electronic glitches in computer-controlled throttle systems, as some safety advocates and plaintiffs' attorneys have alleged. More than 100 people have sued the auto maker claiming crashes were the result of faulty electronics.

Of course breast implants pretty clearly never caused immune disorders, but that did not stop tort lawyers from bankrupting an entire industry on that theory.  So it is nice that Toyota has the facts on its side, but that may or may not help in court, and almost certainly will not help in Congress or the Administration, whose agendas were always driven more by the desire to help domestic auto companies against a powerful foreign rival.

Via a reader, the cost of a few politicians deciding that there absolutely had to be an Australian-assembled hybrid.

"My wife was looking for an Australian-made hybrid car," Rudd told John Laws in March, 2007, "and I'm sure some of your listeners would have found this out "“ you can't find one.

"So, that started me thinking about why don't we have one in this country."

There are certain people from whom the phrase "that started me thinking" serves as a 150-decibel alarm. We weren't to know it at the time, but Kevin Rudd turned out to be one such bloke. Instead of settling on a nice secondhand Prius, Rudd's simple quest to find some wheels for the missus quickly led, once he was elected, to the $500 million Green Car Fund.

Why couldn't Ms Rein have been interested in something less expensive, like knitting? No, scratch that "“ once her husband "started thinking", we'd have been stuck with a $2 billion National Crochet Initiative.

Subsidies appear to amount to about $(AU)100,000 per private car sale.  This is a sort of new brand of left-progressive triumphalism that reminds me of an essay Ayn Rand wrote decades ago on statism and prestige.  These are the modern Green equivalents of the Brandenburg Gate -- they cost a lot of money, they don't really do anything useful, but everyone can point at them and marvel.

And speaking of which, our current Administration in the US in by no means immune

U.S. President Barack Obama will attend a groundbreaking ceremony on Thursday for an LG Chem plant in Holland, Michigan, the company said Sunday. It is very unusual for an incumbent U.S. president to appear at such an event for a foreign company, and it is the first time for a Korean firm.

LG is investing US$300 million to build the plant which will produce batteries for electric vehicles. First-phase commercial production is scheduled to begin in the first half of 2012, and once completed in 2013 the plant will churn out lithium ion cells for 200,000 hybrid cars annually.

Ah, there Coyote goes exaggerating -- because the article explicitly says that a private company will be investing the money, so this isn't really a government project.   Ah, but read to the last paragraph

As part of efforts to revive the auto industry by bringing more green vehicles to the road, the U.S. government has lent considerable support to LG's Holland plant, including $151 million from a federal stimulus program. The Michigan state government also offered tax cuts worth $130 million, which together with the stimulus funds will almost offset LG's entire construction costs. The plant will help ease unemployment in the state by creating some 400 jobs, U.S. media reported.

So $281 million of the $300 million LG is investing is actually taxpayer money.  More brave capitalists! But fortunately we will have lots more batteries so rather than burn gasoline, electric vehicles can charge themselves from coal plants.

PS- Don't forget the jobs, though, created for the low low taxpayer cost of $702,500 each!

PS #2 - I had not noticed before I wrote it, but both of these articles also share in common the government subsidizing foreign companies to manufacture in their country, rather than producing these goods elsewhere and importing them.  This reduces the benefit of these investments even further - its pretty clear that both batteries and Prius's would have been made somewhere in the world, so they would have been available to consumers (probably at lower prices), but these investments merely were to shift production across some line on a map.

Update: John Stossel discusses another form of modern statist triumphalism -- the government-funded sports stadium

South Africa's ability to pull it all together for six weeks doesn't mean the World Cup will be a net benefit to the country in the long term. As the ESPN video below explains, South Africa's government spent $6 billion on the tournament. Tournament-related revenues are expected to fall well short of that figure. Some of the hundred million dollar stadiums built for the tournament won't get much use now that the games are over. The video points to one stadium built for the tournament which will likely remain vacant"”it sits over over slums that lack running water.

Fond memories of the month South Africa performed marvelously on the world stage are nice. But $6 billion is a lot to pay for a memory. These spectacles"”the World Cup and the Olympics"”are nearly always money losers. They're a lousy investment in wealthy countries. They're particularly garrish in countries that aren't as affluent.

Remember that Greece got the same kudos for not screwing up the Olympics, but years later it sure seems like the $15 billion that was sunk into those games by the Greek government has contributed to its financial crisis.

Did you ever notice that when government programs are labeled "popular," it is always by their beneficiaries, e.g.

For the second time in two years, the state universities are weighing whether to limit or even get rid of the popular AIMS scholarship, which waives tuition and fees for thousands of college students.

Since most similar government programs consist of giving people something of value for free or at least for a below-market price, aren't they always going to be popular with their recipients?  Wheat subsidies are popular with wheat farmers, light rail subsidies are popular with those who ride it, cash-for-clunkers was popular with folks who got 2-3x blue book value for their trade-ins, and education subsidies are popular with the students and parents who get them.  In this usage, then, I would argue that the word "popular" in the paragraph above is entirely tautological and should therefore be eliminated from standard usage.  The only meaningful definition of "popular" vis a vis a public program should be "popular with those who fund it."

Kevin Drum observes that the Post Office is more efficient and effective than we give it credit because ... it fully accrues for future pension and medical costs.

Over at Jon Cohn's place, Alexander Hart explains why the post office is better run than you think. Go read it. I don't have any big axe to grind in favor of the USPS "” in fact, I'm pretty annoyed at how complicated it is to calculate postage these days on supposedly "odd" size envelopes "” but the fact is that they're actually pretty efficient and pretty cost effective. I'd welcome private competition for first class mail, but just go ahead breathe the words "universal service" and see how many private sector companies are still eager to compete with the post office for 46 cents an ounce.

Wow, I have been so unfair to the post office.  I commented:

Great - the post office is really efficient because ... it fully accrues for benefits plans that are way beyond anything paid in the private sector, and reliably pays these benefits to huge, bloated work forces.  I am confused Kevin.  I read the article you linked.  What the heck did you find in the linked article that had anything to do with "efficient" or "cost effective."  Postal rates have grown at something like twice the rate of inflation.  Even industries you demagogue against, like oil, have raised prices less than the post office.

I don't know much about Alexander Hart, but my suspicion is that this is somehow a broadside in the public-private battle.  If so, then his focus is awfully narrow.  The feds may have accrued for their pension and health benefits, but they sure have not socked away any assets besides government IOU's to pay for them.  At the end of the day, most private company health and retirement plans are actually backed with real, 3rd party assets.  If you want to talk about pension law, private companies are not allowed to invest but a small percent of pension funds in their own stocks and bonds.  Not so the Feds -- the Post Office is running the equivalent of the Enron 401K invested 100% in Enron bonds.

And oh by the way, if we turn our attention to the states or local governments, the situation is entirely reversed.  In fact, many US public entities have ZERO percent funding of health plans and ZERO accrual of future costs, taking retiree benefits entirely out of current cash flow.

Remember when the stimulus bill was all about "infrastructure" and "green energy?"  Way back in January of 2009 (sorry I am in I-told-you-so mode) I observed how less than 6% of the first two years spending appeared to be related to infrastructure.  It turns out that this is exactly how it played out

According to Recovery.gov, the government has now paid out $415 billion of the stimulus funds. Tax rebates account for $163 billion. Of the $252 of direct spending, the Department of Transportation has paid out $14 billion. That's 5.5%.

I kind of proud I came that close to the actual number.  Note then that the stimulus was sold to Americans based on 5.5% of the program.  No mention by Obama in selling it where the other 94.5% was going.  It would have been interesting to see public reaction at the time if Obama had said "we want to spend $230 billion making sure government employees continue to get 8% pay raises, even through the recession.  We are going to stimulate the economy by giving your money to a bunch of assistant principals who do little work but call themselves 'educators' so that they can pretend to be teachers when government budget cuts come along."

This is a follow-up to my opinion piece in Forbes the other day.  Remember, this outcome is not somehow preventable by having "our, smarter guys" in charge -- it is an inevitable result of the information and incentives of government organizations.

Three days after the BP oil spill in the Gulf of Mexico began on April 20, the Netherlands offered the U.S. government ships equipped to handle a major spill, one much larger than the BP spill that then appeared to be underway. "Our system can handle 400 cubic metres per hour," Weird Koops, the chairman of Spill Response Group Holland, told Radio Netherlands Worldwide, giving each Dutch ship more cleanup capacity than all the ships that the U.S. was then employing in the Gulf to combat the spill....

In sharp contrast to Dutch preparedness before the fact and the Dutch instinct to dive into action once an emergency becomes apparent, witness the American reaction to the Dutch offer of help. The U.S. government responded with "Thanks but no thanks," remarked Visser, despite BP's desire to bring in the Dutch equipment and despite the no-lose nature of the Dutch offer --the Dutch government offered the use of its equipment at no charge. Even after the U.S. refused, the Dutch kept their vessels on standby, hoping the Americans would come round. By May 5, the U.S. had not come round. To the contrary, the U.S. had also turned down offers of help from 12 other governments, most of them with superior expertise and equipment --unlike the U.S., Europe has robust fleets of Oil Spill Response Vessels that sail circles around their make-shift U.S. counterparts.

Why does neither the U.S. government nor U.S. energy companies have on hand the cleanup technology available in Europe? Ironically, the superior European technology runs afoul of U.S. environmental rules. The voracious Dutch vessels, for example, continuously suck up vast quantities of oily water, extract most of the oil and then spit overboard vast quantities of nearly oil-free water. Nearly oil-free isn't good enough for the U.S. regulators, who have a standard of 15 parts per million -- if water isn't at least 99.9985% pure, it may not be returned to the Gulf of Mexico....

The Americans, overwhelmed by the catastrophic consequences of the BP spill, finally relented and took the Dutch up on their offer -- but only partly. Because the U.S. didn't want Dutch ships working the Gulf, the U.S. airlifted the Dutch equipment to the Gulf and then retrofitted it to U.S. vessels. And rather than have experienced Dutch crews immediately operate the oil-skimming equipment, to appease labour unions the U.S. postponed the clean-up operation to allow U.S. crews to be trained.

This is what happens under state-run medicine, when your doctor becomes an agent of the government.

Currently pregnant women are asked if they smoke by midwives and GPs but the National Institute for health and Clinical Excellence (Nice) wants this to go further.

The organisation has recommended that all pregnant women should have their breath measured for carbon monoxide levels when they book in with a midwife.

This would establish which women smoke and provide an added incentive for them to quit, the guidance said.

I am sure all the women's organizations whose principled stand against abortion restrictions were based on protecting the privacy of one's body from the heavy hand of government will now rise up in protest.  Not.

As it turns out, and as I have written before, most women's groups seem to favor total intrusion of government into every facet of individual health care decision-making EXCEPT abortion.  The privacy and libertarian-sounding abortion arguments were really just slights of hand, rolled out to prevent government bans on one particular procedure, and then tucked away when the government proposes to control every other procedure.