Coyote Blog

Several companies have been discovered to have benefited from what is in effect slave labor in certain countries.  I have never had a problem with folks in poor countries freely opting to take jobs at factories for less money than our privileged middle class attitudes think to be "fair."  But there have been examples of governments using their coercive power in a cozy relationship with certain companies, forcing people to provide their labor to companies for wages below what they would freely accept.   It is an obscene form of modern slavery.

Today's example, though, does not come from Myanmar or China, but from San Francisco, California, USA, where the government is forcing its citizens to work for free to benefit itself and a few favored corporations to produce products for export.

The resale of recycled materials is apparently big business for a few government contractors:

"When we look at garbage, we don't see garbage, O.K.?" said Robert
Reed, a spokesman for Norcal Waste Systems, the parent company of
Sunset Scavenger and Golden Gate Disposal and Recycling Company, the
main garbage collectors in the city. "We see food, we see paper, we see
metal, we see glass."...

Jared Blumenfeld, the director of the city's environmental programs,
addressed one of the main reasons the city keeps up the pressure to
recycle. "The No. 1 export for the West Coast of the United States is
scrap paper," Mr. Blumenfeld said, explaining that the paper is sent to
China and returns as packaging that holds the sneakers, electronics and
toys sold in big-box stores.

This "No. 1 export product" is wholly a product of major government subsidies.  Reading the article, you get a sense for the enormous amount of extra capital and operating expenses the city pours into the recycling program.  Here is just one example:

San Francisco can charge more for its scrap paper, he said, because of
its low levels of glass contamination. That is because about 15 percent
of the city's 1,200 garbage trucks have two compartments, one for
recyclables. That side has a compactor that can compress mixed loads of
paper, cans and bottles without breaking the bottles. (These specially
designed trucks, which run on biodiesel, cost about $300,000 apiece, at
least $25,000 more than a standard truck, said Benny Anselmo, who
manages the fleet for Norcal.)

Anyone really think they are making enough extra money on scrap paper to cover this (at least) $4.5 million incremental investment  ($25k x 15% x 1200)?   Suspiciously absent from the article is any mention of costs or budgets.  City recycling guys have given up trying to defend recycling on the basis of it being cheaper than just burying the material.  The city is subsidizing this material a lot.

But it's not enough.  Even with these enormous subsidies, the city is not producing as much recycled materials to meet its goals.  So it is going to make its citizenry provide it more labor.  For free.

...the city wants more.

So Mr. Newsom will soon be sending the
city's Board of Supervisors a proposal that would make the recycling of
cans, bottles, paper, yard waste and food scraps mandatory instead of
voluntary, on the pain of having garbage pickups suspended.

The city is going to coerce every single resident to labor for them each week, just so San Francisco and Norcal Waste Systems can have more scrap paper for export.  This is a labor tax of immense proportions.  I know, whenever I make this point about recycling, everyone wants to poo-poo it.  "Oh, its not much time, really."  Really?  Lets use the following numbers:  Five minutes per day of labor.  One million residents.  $20 per hour labor value (low in San Francisco).  That is $608 million if forced labor.  I'm not sure even Nike has been accused of using this much forced labor.

Anticipated Rejoinder: Yeah, I know, the response will be "It's not for the exports, it's to save the environment."  OK, here is my counter:

1. Nowhere in the article does it really say how this program, or going from 70 to 75% recycling, is specifically going to help the environment.  I took the article at its face value, where it justifies the program on the basis of exports and hitting an arbitrary numerical target and beating out San Jose.  I am tired of unthinking acceptance of recycling as a net benefit.  Every study has shown that aluminum recycling creates a net energy benefit, but every other material represents a net loss.  It makes us feel good, though, I guess.
2. Should proponents support the direct subsidy by government and the labor tax, there is still some burden to show that this is the best possible environmental use of 30 million San Francisco man-hours of coerced labor in the course of a year.
3. For those really worked up about CO2, explain to me why we shouldn't bury every scrap of waste paper as a carbon sink.
4. The last time I visited, San Francisco was one of the grubbier US cities I have seen of late, with trash everywhere on the streets and sidewalks.  It may just have been a bad data point, but are residents really happy the city trash department focusing on scrap paper pricing yield rather than picking up the trash?
5. I class battery and motor oil recycling programs differently.  These substances have unique disposal needs and high costs of incorrect disposal.

Arizona required emissions inspections of vehicles, but only for vehicles in the cities of Phoenix or Tucson.  So, as you can imagine, they only have testing stations in Phoenix and Tucson.

Our company is headquartered in Phoenix.  That is our legal address and the address on all our titles and registrations and licenses and such.  Because all of our vehicle registrations show the company headquartered in Phoenix, then the state of Arizona treats all our trucks as being located in Phoenix.  As a result, we are required to get emissions tests each year on about 20 vehicles.

But wait.  None of our vehicles are actually in Phoenix.  In fact, none have ever even crossed into this county.  They are all in places like Flagstaff and Sedona and Payson that have no emissions requirements, and therefore, no testing locations.  As a result, I am apparently required to, once a year, have all of our trucks driven to Phoenix for an emissions test that they are not actually required to have based on where they operate.  In additions to the cost of the test itself, and any repairs mandated by the test, it costs us 400 miles x $0.55 per mile gas and depreciation plus 8 hours x $12 hour labor for the driver or $316 per vehicle to get them to the test site and back.  A sort of annual pilgrimage to worship at the alter of mindless bureaucracy.

Recognize that none of this was obvious to me at 8AM this morning.  I spent my entire morning not worrying about my 500 employees and not improving productivity and not pursuing some projects we are considering for expanded customer services, but trying to figure this situation out.  All because some state legislators didn't realize that maybe corporate vehicle fleets are not necessarily registered in the location in which they are used.

I still think there must be a legal way to show my vehicle domiciled at one physical address but have the mailing address be my corporate office in Phoenix.  But if there is, I have not found anyone who will admit it.

Kevin Drum and Alex Knapp write that there appears to be $20-$50 billion in federal energy subsidies each year going to the oil industry, and that this should be a target for elimination before any windfall profits tax.  I wrote in the comments:

I agree 100%.  Let's cut all the subsidies.

However, before you get too excited, my guess is that most of the
money marked as "oil company subsidies" really in fact goes to non-oil
projects like alternative energy. In the same way that a huge portion
of federal "highway" funds don't go to highways but to silly
politically correct failing transit projects, my guess is that,
similarly, "oil industry" subsidies go for a lot of silly alternative
energy projects.

I personally don't care where it goes. I am all for eliminating all
of this subsidy mess, equally, whether it's for oil exploration or
energy-from-donkey-poop or for CEO salary enhancement. But recognize
before you make this the liberal rallying cry, much of this subsidy
money may well be going to liberal pet projects.

Anyone have any better idea where this money goes that they are referring to?

The city of Phoenix's $97 million subsidy for the developers of a new Phoenix shopping mall has been ruled by a local judge as being "'undoubtedly' in the public interest."  Even weirder, the developers lawyers are so mad at having their largess questioned that they are demanding the Goldwater Institute pay them $600,000 in attorneys fees as punishment for even questioning whether funding private mall parking lots that would have been built anyway is really in the public interest.

The subsidy, which I described in more detail here, provides $97 million for the construction of a parking garage at a new mall in North Phoenix, with the only condition being that the mall owners provide free parking in the garage to the public.  I can think of only three reasons this would be in the public interest:

1.  Without the subsidy, the mall might not provide enough parking
2.  Without the subsidy, the mall might charge for parking
3.  The parking garage could serve other surrounding businesses or homes within walking distance

Now, some of you on the coasts may be confused about this, so let me give you one other piece of background.  There are hundreds of shopping malls in the Phoenix area, from local strip malls to huge mega-malls of the type in this case.  At least 99.9% of the parking at all of these malls has been paid for with private funds.   Every one of these has plenty of parking.  This might not be the case in Boston, where land costs are high, but here in Phoenix, land is relatively cheap and malls are plentiful -- If I can't find a parking space, I would just go to a different place to shop.

Further, do you know the total number of these spaces at mall in Phoenix that are not free?  Zero.  OK, there may be one mall downtown that charges money to park, but for any mall in the area in which this one is being constructed, it would be insane to charge to park.  There are just too many competitor malls with free parking.

Finally, as to #3, look at the satellite view here.  Enough said. 

So the city paid $97 million in return for nothing of value, or at least nothing of value that the mall owners would not have provided on their own out of their own self-interest.  The only thing that I can identify the $97 million bought was possibly influencing the decision of one store (Nordstrom's) to locate in this particular development rather than 1 mile away, over the city line in another development planned in the City of Scottsdale.

About the numbers:   I really can't get away without taking on this statement in the same article:

According to its developers, CityNorth is expected to generate $1.9 billion in annual economic activity

In 2005, the metro Phoenix area had a GDP of $160 billion dollar.  The retail component of this is about $12 billion.  So this one mall / real estate project in one small part of Phoenix, one of hundreds just like it all over town, will increase our city's GDP by over 1% and in particular increase the city's retail output by 16%.  Sure.  I really wish our local paper would be just a tiny bit more credulous about printing these numbers from promoter's press releases.

There are two America's:  The one that is trying to steal my freedom from the top down (wiretaps, proscutorial abuse, expanding executive power) and the one that is trying to steel freedom from the bottom up.  Reason, as quote by TJIC, has a nice piece on one of the bottom-up fascists:

Amid the hustle and bustle of downtown Los Angeles, there exists
another world, an underground world of illicit trade in - not drugs or
sex - but bacon-wrapped hot dogs. Street vendors may sell you an
illegal bacon dog, but hardly anyone will talk about it, for fear of
being hassled, shut down or worse. Our camera caught it on tape. One
minute bacon dogs are sold in plain view, the next minute cops have
confiscated carts, and ordered the dogs dumped into the trash.

Elizabeth Palacios is one of the few vendors willing to speak
publicly. "Doing bacon is illegal," she explains. Problem is customers
love bacon, and Palacios says she loses business if she doesn't give
them the bacon they demand. "Bacon is a potentially hazardous food,"
says Terrence Powell of the LA County Health Department. Continue
selling bacon dogs without county-approved equipment and you risk fines
and jail time.

Palacios knows all about that. She spent 45 days in the slammer for selling bacon dogs,
and with the lost time from work, fines, and attorney's fees, she fears
she might lose the house that bacon dogs helped buy. She must provide
for her family, but remains trapped between government regulations and
consumer demand. Customers don't care about safety codes, says
Palacios. "They just want the bacon."

TJIC, as he often does, captures a number of the best comments.  The full reason video is below:

This is the kind of local government silliness that really drives me up a tree.  The town of Peoria, Arizona (Peoria is basically a suburb of Glendale which in turn is a suburb of Phoenix) apparently has paid $81,000 for a new town logo:

Peoria's new tagline, "Naturally Connected," came under attack this week.

The city is working on establishing a brand name to better market itself.

"Naturally connected?" resident Dolores Ceballos said at Tuesday's City
Council meeting. "I'm still trying to feel it here. I can't find it.

"Nine years ago, I moved here, not because of a logo. I came for the downtown and for the schools."

Ceballos questioned the city's expenditure of taxpayer dollars for such an endeavor.

Peoria has paid $81,000 to North Star Destinations Strategies in
Tennessee, which developed the tagline and new logo that features the
city's name with swirling lines and Southwestern colors of blue, green and brown.

But what the Republic misses, but those of us with any business experience understand, the logo development, overpriced as it may be, is only a fraction of the branding effort.  The town is going to have to spend 10x this amount to start pushing the logo and the craptacular "naturally connected" tagline into peoples' faces. 

Corsette said that because the tagline and logo are not in use yet, it's hard for people to feel a connection.

"It's not surprising people don't get it," he said. "Once we start
using it in context of everything the city does, it will resonate with
people and take on some meaning and it will be a positive thing for us."

An important component to the draft manual is the education of the public and city employees, he said.

Can't wait to see the time and effort on the manual and training effort that will go into educating public employees on how to use the logo.

I just encountered an absolutely classic bit of government think.  Here is the background.

In Florida, on each night stay in the campgrounds we run in Marion County, we collect a 6% state sales tax, a 0.5% county sales tax, and a 2% tourist development tax, for a total of 8.5%.  Until this month, we reported and paid all three taxes to the state of Florida on one simple return.  The state then divvied the money up to the counties.  Apparently, this latter process could take up to 90 days before the County got their tourist development money.

The County commissioners of Marion County did not like waiting 90 days for their tourist development money.  Remember, this is not general revenue money, but supposedly trust fund money that must be spent on tourist advertising and the like.  Also, recognize that 90 days for a government body to disperse money is pretty normal - I find I often have to wait as long as 6 months to get a check out of the feds.

Anyway, the County wanted its money faster.  So it decided to collect the money itself.  First this involved more staff hours and designing a new online collection system, costs that are completely incremental because the state of Florida was performing these functions before (and still are performing them).  Today, it now requires two systems and clerical staffs to collect money that was once required by just one. 

Already, this seems like idiocy to any business person.  Is adding a whole new staff and systems really worth getting money 90 days faster?  I guess it is possible, but even if one could argue this point, we now get to the real government-think.  Because there is no way anyone in whatever cost-benefit trade-off they ran considered the time and effort that would be required of individual taxpayers.  Even in my small company, this will now require extra clerical labor each month as well as an initial system reprogramming to add the extra tax authority.  If one considers thousands of other businesses in the exact same position, the amount of investment is enormous.

But in my experience, when running cost-benefit trade-offs, the government never, ever considers investment and time required of the citizens who must comply.  I have seen governments make changes designed to save a few man-hours a month in their own clerical departments that cause thousands or millions of man-hours of extra work among taxpayers.   A year or two ago, Mono County, California forced us to go from one to twelve reports each month for our lodging tax payments just to save auditors a few hours work every three years.   And do you know why?  Because the government treats us all as serfs.  As far as they are concerned, our labor is free, because they have the power to compel us to do whatever they ask without compensation.

Postscript:  Here is my other Florida county tax collector pet peave.  All the tax collectors in Florida put their own personal name all over everything.  Their web site is not "marion county tax collector"  but "George Albright, Marion County Tax Collector." Their stationary has this man's name all over it.  When I right a check to them, I am supposed to include this man's name.  I hate this kind of public employee self-aggrandizement.  It is a blatant use of taxpayer money to try to aid one's next election chances, and it is a waste of money when a new person comes in office because every piece of printed material must be thrown out and reprinted.  This seems to be fairly unique to Florida.  Look at the Marion County links for other states in the same search and you don't see the same thing going on in those states.

A reader pointed me to this article about a really amazing piece of government science:

A strong and deadly
earthquake is virtually certain to strike on one of California's major
seismic faults within the next 30 years, scientists said Monday in the
first official forecast of statewide earthquake probabilities.

They calculated the probability at more than 99 percent that one or
more of the major faults in the state will rupture and trigger a quake
with a magnitude of at least 6.7.

Uh, okay.  Next up:  California demonstrates more than a 99% chance that I will be dead in 100 years.  I would also give them the false precision award:

An even more damaging quake with
a magnitude of 7.5 or larger, the earthquake scientists said, is at
least 46 percent likely to hit on one of California's active fault
systems within the next three decades.

Are they really sure that its not 46.1%?

"The report's details should
prove invaluable for city planners, building code designers, and home
and business owners who can use the information to improve public
safety and mitigate damage before the next destructive earthquake
occurs," said geophysicist Ned Field of the Geological Survey, who
headed the Working Group on California Earthquake Probabilities, which
developed the forecasts.

Really?  How?  They should have given me the money and I would have written a two sentence report:  "You are going to have an earthquake in the future -- duh, its California.  Plan for it."

Update: A reader notes that this was funded by some insurance companies or trade group, and the whole point is the unspoken message "insurance rates are going up."  You guys are so cynical.

A reader pointed me to this article about a really amazing piece of government science:

A strong and deadly
earthquake is virtually certain to strike on one of California's major
seismic faults within the next 30 years, scientists said Monday in the
first official forecast of statewide earthquake probabilities.

They calculated the probability at more than 99 percent that one or
more of the major faults in the state will rupture and trigger a quake
with a magnitude of at least 6.7.

Uh, okay.  Next up:  California demonstrates more than a 99% chance that I will be dead in 100 years.  I would also give them the false precision award:

An even more damaging quake with
a magnitude of 7.5 or larger, the earthquake scientists said, is at
least 46 percent likely to hit on one of California's active fault
systems within the next three decades.

Are they really sure that its not 46.1%?

"The report's details should
prove invaluable for city planners, building code designers, and home
and business owners who can use the information to improve public
safety and mitigate damage before the next destructive earthquake
occurs," said geophysicist Ned Field of the Geological Survey, who
headed the Working Group on California Earthquake Probabilities, which
developed the forecasts.

Really?  How?  They should have given me the money and I would have written a two sentence report:  "You are going to have an earthquake in the future -- duh, its California.  Plan for it."

Update: A reader notes that this was funded by some insurance companies or trade group, and the whole point is the unspoken message "insurance rates are going up."  You guys are so cynical.

Anthony Watt has an interesting story of a senior NASA official using his government position to pressure textbook manufacturers to change their books to reflect his view of the world.

Today's emails seem to be following the theme of government exempting itself from its own regulations.

In the first story, many California government employees (and their families!) are issued with license plates that effectively exempt them from traffic law violations.

In the second story, the town of Ann Arbor, Michigan sets out on a voyage of discovery in which they find out that minimum wages can drastically increase costs and that different people have different needs.  And so, they exempt themselves from the law.  I am particularly sensitive to this story because the reason the city claims it is unfair to apply the law to them exactly matches my business:

After several months of negotiation, Ann Arbor elected
officials Monday agreed to waive the city's
"living wage'' law for the Ann Arbor Summer
Festival.

What's been at issue is the application of the wage
law to the festival's temporary workers. Under the
living-wage law, groups that have contracts of $10,000 or
more with the city must pay above-minimum wages. That wage
level is now around $12 an hour for employees who don't
receive health benefits.

Because the increased wages would significantly add to the
costs of putting on the festival

Wow, who would have thought that artificially setting wage rates above the market clearing price would increase costs?  But to continue:

City Council Member Chris Easthope, who's promoted the
change, argues that the festival's seasonal employees -
almost all students - are not the kind of workers the wage
law was meant to protect.

"This isn't an attempt to drop people below
living wage levels, but to recognize there are some
short-term events that struggle. I don't think that,
when it was adopted, the living wage was meant to have that
effect on a one-month event.''

Let's see.  I hire temporary seasonal workers in Michigan for about three months of the year.  And thought they are not students, most are retired people in their seventies who are also likely "not the kind of workers the wage law was meant to protect."  In fact, many of my workers are disabled and work slower, so I probably have a better argument than the city.  So where is my exemption? 

Every food service operation has some problems matching supply with demand, but strikes me as staggering incompetence (via a reader):

Hospitals are throwing away as much as half of their food, NHS figures show.

Close
to 13 million meals were thrown away last year, with 33 hospitals
dumping more than a quarter of their food, including two that discarded
more than was eaten.

Meanwhile, almost 140,000 patients left hospital malnourished, double the figure a decade ago.

Last year, Ivan Lewis, the health minister, admitted that many elderly
people were in effect being starved in hospitals. He said that some
were given a single scoop of mashed potato as a meal, while others were
"tortured" with trays of food placed beyond their reach and no help
with eating.

Maybe the last bit shows that the Brits are enshrining the same "duty to die" that is being discussed in Canada.

I thought this comment was kind of interesting for what it reveals:

And to some degree, doctors are the property of the state. It
is impossible to have medical education without significant state
subsidization, and although I don't know the specifics of every single
country in Africa, that's a safe generalization to make.

For instance, here in the US, your medical education is
heavily subsidized by the state. Probably on the order of 100k/student.
Resident training programs also receive about 100k/resident from
government entitlement programs.

I haven't a clue whether or not there is a net subsidy of medical education in this country, but assume it to be true.  This is the statist trap in a nutshell.  Statists insist that the government should subsidize (or, in more extreme cases, entirely fund) public education.  But once you have attended these government schools, which one virtually has to do because of the steps the government takes to maintain its education monopoly, you then become the property of the state because the statists claim "well, you took our money for your education..."

Apparently, the state of Arizona, fearing the coming old-folks demographic boom, is looking to create programs to keep older Americans working longer (and by extension off the government teat longer).

The thought of millions of boomers taking their early-retirement
benefits is causing concern about the stability of Social Security and
Medicare.

"We know not everybody is going to up and retire all at once," Starns
said, "and we will have younger workers coming in. But if you look at
all the demographics, there just won't be enough people to fill all the
jobs that could be vacant."

Add that possibility to existing shortages of workers in health-care
and other fields, she said, and "there could be some pretty significant
problems in society."

Arizona, which launched its Mature Workforce Initiative in 2005 to
avert such a crisis, was one of five states lauded last month for
efforts to engage people 50 and older in meaningful jobs and community
service.

The San Francisco-based Civic Ventures think tank also cited
California, Maryland, New York and Massachusetts, saying the five
states recognize older workers as "an experience dividend," rather than
a drain on resources.

Of course, since it is government, the state of Arizona is, with one hand, patting itself on the back for instituting vague and meaningless but well publicized programs nominally targeted at this issue, while with the other taking steps that have real and substantial effects in exactly the opposite direction.

First, Arizona has some of the toughest laws in the country to penalize businesses for hiring, even accidentally, young vigorous immigrants who don't have all their government licenses in order.   Young workers are pouring into this state every day, but Arizona is turning them away and locking them up. 

Second, Arizona has been legislating as fast as it can to make it nearly impossible to hire older workers.  I know, because the vast majority of my work force managing campgrounds is over 65.  These workers tend to work for a free camp site plus minimum wage.  They like the job despite the low pay because they get a place to park their RV and because the job is part time and very flexible in how they work (not to mention offers the opportunity to take whole chunks of the year off).  I like these workers because they are experienced and reliable and paying them minimum wage helps offset their slowing productivity and higher workers comp costs as they age. 

Here is the math:  Older workers might work 30-50% slower than a younger worker (I have workers right now in their nineties!)  They also have higher workers comp costs, maybe equating to as much as 10% of wages.  This means that an older worker at the old minimum wage of $5.15 an hour might be financially equivalent to a younger worker making $9.50 an hour, which is about what we might have to pay for such a worker. 

However, many states have implemented higher minimum wages with annual cost of living escalators.  States like Oregon and Washington now have minimum wages over $9.00.  At $9.00 an hour, an older worker is now financially equivalent to a younger worker making $16.50 an hour, well above what I can hire such a person for.  This means that as minimum wages rise, I have to consider substituting  younger workers for older but slower workers.

Last year, Arizona adopted just such a minimum wage system with annual escalators.  Though we have not reached the point yet, the state soon may make it impossible economically to hire older workers.  Already, we are looking at some automation projects to reduce headcount in certain places.  This is sad to me, but in a business where a 12% rise in wages wipes out my entire profit, I have to think about these steps.  I have to react to the fact that, no matter how many "policy advisers on aging" the state hires, in reality it is increasing the price to my company of older people's labor vis a vis younger workers.

Lobbying of course!  Silly rabbit. 

The wind industry's trade group spent nearly $816,000 to lobby last
year as wind companies tried to persuade Congress to extend a key tax
credit and make power companies use more renewable sources.   

Despite the efforts of the American Wind Energy Association, neither desire found its way into legislation this past year.   

The
group, whose members include General Electric Co., BP PLC, AES Corp.
and FPL Group Inc., is still pushing for the tax-credit extension after
lawmakers failed to tuck into the economic stimulus plan. The industry
argues that 116,000 jobs and $19 billion in investments are at risk if
the 1.9 cents per kilowatt-hour tax credit doesn't get a second wind.
It expires in 2008.

Here is the really, seriously amazing part:  In 2004, there were just over 400,000 people employed in the US power generation, transmission, and distribution business.  This means that, incredibly, this advocacy group is claiming nearly 30% of the electric utility industry owes their job to wind power, despite wind generating a bit less than 1% of all the power in the US.  If this is true, then here is a solution - forget the 1.9 cent subsidy, and cut some staff. 

Oh, you mean that job number probably isn't real, kind of like those municipal stadium and sports team subsidy studies.  Really?  Boy are you cynical.   

(HT Tom Nelson)

Megan McArdle makes a great point that should be absolutely uncontroversial:

government is much better as a price taker than a price maker.
Government procurement is all kinds of tedious and cluttered with red
tape, but in the end there's no gigantic problem with the government
pencil supply. Defense procurement, on the other hand, is pretty well
agreed to be godawful-expensive for what we get, the only excuse being
that we can't think of another way to buy fighter planes.

That means that government procurement alongside a free market looks a lot
different from government procurement when the government is the only
buyer. Yes, the health care market is extremely screwed up, but the
prices in it do tell you something about demand for various services,
and provide some signals about cost/benefit. You may think that viagra
is a prime example of wasted pharmaceutical R&D spending (though if
you do, I am willing to bet that you are either under forty, or
female), but the fact that a lot of people are willing to pay a fair
amount of coin for it tells you that they probably feel it is improving
their lives in some significant way. Governments can estimate
cost-benefit when the benefit is limited to crude mortality
improvements, but they are pretty much at sea when it comes to
quality-of-life. America's price signals are wildly distorted by its
insurance markets--but they're almost certainly better than no signal
at all.

Europe's governments operate their health care systems in the
context of an existing US market that provides information about demand
for new treatments (and of course I would argue, also the new
treatments). They don't use that price information to set what they pay
for drugs, but it does filter through to their markets--for example,
more widespread use of Herceptin for breast cancer in the US is putting
pressure on the British government to provide it. I think an American
shift to single-payer would be more problematic than the European
example for a variety of reasons related to our government structure.
But one important reason is that if we did, we'd have no where left to
get prices from.

In a previous post I lamented that Eliot Spitzer was lauded by the press as "Mr. Clean" despite (or because of) abuse of power, but was forced to quit within days of revealing an episode of consensual sex.  If only abuse of power had such an immediate impact on politicians as sex:

The Justice Department and the housing department's inspector general
are investigating whether the [HUD] secretary, Alphonso R. Jackson,
improperly steered hundreds of thousands of dollars in government
contracts to friends in New Orleans and the Virgin Islands.

On Wednesday, Democratic lawmakers also raised concerns about
accusations that Mr. Jackson threatened to withdraw federal aid from
the director of the Philadelphia Housing Authority after he refused to
turn over a $2 million property to a politically connected developer.

Update:  More on the press and its support for prosecutorial abuse of power, in Spitzer's case and others.

Eliot Spitzer has been brought down for a crime most libertarians don't think should be a crime, by federal prosecutors who should not be involved even if it were a crime, and using techniques, such as enlisting banks as government watchdogs of private behavior, that stretch the Fourth Amendment almost out of recognizable shape.  So why are we libertarians so happy?

He routinely used the extraordinary threat of indicting entire firms, a
financial death sentence, to force the dismissal of executives, such as
AIG's Maurice "Hank" Greenberg. He routinely leaked to the press emails
obtained with subpoena power to build public animosity against
companies and executives. In the case of Mr. Greenberg, he went on
national television to accuse the AIG founder of "illegal" behavior.
Within the confines of the law itself, though, he never indicted Mr.
Greenberg. Nor did he apologize.

In perhaps the incident most
suggestive of Mr. Spitzer's lack of self-restraint, the then-Attorney
General personally threatened John Whitehead after the former Goldman
Sachs chief published an article on this page defending Mr. Greenberg.
"I will be coming after you," Mr. Spitzer said, according to Mr.
Whitehead's account. "You will pay the price. This is only the
beginning, and you will pay dearly for what you have done."

Jack
Welch, the former head of GE, said he was told to tell Ken Langone --
embroiled in Mr. Spitzer's investigation of former NYSE chairman Dick
Grasso -- that the AG would "put a spike through Langone's heart." New
York Congresswoman Sue Kelly, who clashed with Mr. Spitzer in 2003, had
her office put out a statement that "the attorney general acted like a
thug."

These are not merely acts of routine political
rough-and-tumble. They were threats -- some rhetorical, some acted upon
-- by one man with virtually unchecked legal powers.

Eliot
Spitzer's self-destructive inability to recognize any limit on his
compulsions was never more evident than his staff's enlistment of the
New York State Police in a campaign to discredit the state's Senate
Majority Leader, Joseph Bruno. On any level, it was nuts.

As I wrote before, the real crime here is that despite all his history, he was until two days ago a press darling labeled as "Mr. Clean."  In reality, he has always been Mr. Abuse of Power and Mr. Personal Vendetta.  I am happy to see him brought down, even if for the wrong reasons.

Update: A lot more here

My novel BMOC included an incompetent and power-abusing Senator who managed to remain a darling of the press as long as he focused his attention on pork-barrel spending and using government power to help and hurt his friends and enemies.  However, the press finally turned on him when it became known he was involved with prostitutes.  The fairly cynical (if not realistic) moral was that it was fine to abuse government power, just don't get caught in a sex scandal.

Well, it seems that we will get to test that notion in real life.  Apparently, NY governor Eliot Spitzer has been dallying with prostitutes.  Now, I couldn't really care less about his purchase of sex -- I have argued many times for legalization of prostitution.  But it will be an interesting test of my book's cynical hypothesis, since to date the press has been in love with Spitzer despite (even because of) his abusive practices as AG and governor.  The radio news a few minutes ago actually said "Mr. Spitzer, who to date has had a squeaky clean reputation..."  Huh?  Only if you read the fawning PR work done for him by the NY Times in the past.

Update: Here is the passage from the book.  Sound familiar?

Taking a deep
breath, Givens said, "Senator, there is a reason that this one is not going
away. I will spell it out: S-E-X. The press doesn't give a shit about a few billion dollars of waste. No one tunes in to the evening news if the
teaser is "˜Government pays too much for a bridge, news at eleven.' The Today Show doesn't interview the
contractors benefiting from a useless bridge."

"However, everybody and his dog will tune in if
the teaser is "˜Your tax dollars are funding call girls, film at eleven'. Jesus, do you really think the CBS Evening
News is going to turn down a chance to put hookers on the evening news? Not just tonight but day after day? Just watch "“ Dan Rather will be interviewing
hookers and Chris Mathews will be interviewing hookers and for God's sakes
Barbara Walters will probably have a weepy interview with a hooker."....

"You guys in the Senate can get away with a lot,
as long as long as a) you don't get caught or b) the scandal is so boring or
complex that it won't sell newspapers. Hell, I saw a poll the other day that a substantial percentage of
Americans to this day don't understand or even believe what Richard Nixon did
was wrong. But if you polled those same
people, every freaking one of them would say that they knew and believed that
Bill Clinton got [had sex with] an intern.

Update #2: Disclosure -- I did not like Spitzer, even at Princeton.  This, however, was not uncommon.  In fact, Spitzer managed to inspire a jihad in response to his governance of the student council there.

Update #3:  ROFL!  I got this email from a reader:

I eagerly await your
comments on the latest imbroglio involving your favorite Princeton
classmate.  Please don't take the high road.

It seems I may not be the only person who does not care for Mr. Spitzer.

Update #4:  I hope the girls paid sales taxes on their transactions and have all their payroll taxes in order.  Certainly Mr. Spitzer has established the principle that illegal businesses still owe taxes.

That seems to be the axiom in New York these days, where Gov. Eliot L.
Spitzer (D), struggling to close a $4.4 billion budget gap, has
proposed making drug dealers pay tax on their stashes of illegal drugs.
The new tax would apply to cocaine, heroin and marijuana, and could be
paid with pre-bought "tax stamps" affixed to the bags of dope.

Update #5:  Libertarians like myself will point out that this is all between consenting adults.  Of course, that did not stop Eliot Spitzer from trying to prosecute Dick Grasso for a pay package that was approved by consenting (and quite sophisticated) adults.

Update #6: It is being reported that Spitzer will resign.  QED folks.  Spitzer uses the state police to spy on political rivals and the press continues to call him a squeaky clean reformer.  But pay for sex with a consenting adult, and your gone. 

Update #7:  Tom Kirkendal has been all over Spitzer for years.  He writes:

But I hope that the most important lesson that
Spitzer's political career teaches us is not lost amidst the glare of a
tawdry sex scandal. As with Rudy Giuliani
before him, Spitzer rose to political power through the misuse of the
state's overwhelming prosecutorial power to regulate business
interests. In so doing, Spitzer manipulated an all-too-accommodating
mainstream media, which never misses an opportunity to take down an
easy target such as a wealthy businessperson. Spitzer is now learning
that the same media dynamic applies to powerful politicians, as well. 

However, as noted earlier here,
where was the mainstream media's scrutiny when Spitzer was destroying
wealth, jobs and careers while threatening to go Arthur Andersen on
American Insurance Group and other companies? Where was the healthy
skepticism of the unrestrained use of the state's prosecutorial power
to regulate business where business had no available regulatory
procedure with which to contest Spitzer's actions?

I was driving back to Phoenix today from San Diego on Interstate 8 and I really needed my camera. 

As many of you in this area will have observed, the INS is out in force, setting up roadblocks and checkpoints on highways to look for illegal immigrants.  On top of our current rules requiring employers to act as immigration agents, our labor force is drying up in Arizona, making the search for workers harder.  That is why I thought it was hilarious that at the INS checkpoint near Yuma, the INS had a big sandwich-board type sign out front on the road saying "We're hiring!"

In a previous post, I observed that there did indeed seem to be two Americas:  the one productive people want to live in, and the one productive people are trying to escape because the local government is so controlling and confiscatory.  I further observed that, unfortunately, both Democratic candidates appeared to be from the latter.

This is an interesting follow-up:

"When California faced a Mount Everest-sized $14 billion deficit in
2003, one of the major causes for the red ink was the stampede of
millionaire households from the state," says a report called "Rich
States, Poor States" by economists Arthur Laffer and Stephen Moore.
"Out of the 25,000 or so seven-figure-income families, more than 5,000
left in the early 2000s, and the loss of their tax payments accounted
for about half the budget hole."

I am not sure how they got to this number, but holy crap!  20% of the wealthiest families left the state?  I'm not sure even Hugo Chavez is doing that poorly.

Update:  Even more here, comparing inward and outward migration rates of states vs. a state-by-state economic freedom index.

I must say that I find this state Supreme Court decision from Washington State terrifying.  It is interesting that the State of Washington has exactly the same proprietary attitude over the garbage business as does the Mafia in New York:

In a decision released this morning, the Court stated that hauling
construction waste is not a private enterprise and "is in the realm
belonging to the State and delegated to local governments." The court
found specifically that the provision of waste hauling service is a
"government service" and constitutional protections do not apply to
government-provided services.

I don't know the Washington State constitution, so it may indeed mention "construction waste hauling" as an enumerated power of the government.  If it does not, and by "constitutional protections do not apply" they mean the US Constitution, then this is a stunning over-reading of said document.  Nowhere, in the US Constitution at least, is there a provision for the government providing services of any kind, much less construction waste hauling. 

OK, I guess I have to admit that there are two Americas:  The one that no one wants to live in any more and the one where everyone is moving to. 

Unfortunately, it appears that our next president will be from Illinois or New York, two of the eight states the local government has screwed up so bad that no one wants to do business there any more.  I guess both Hillary and Obama can claim that their states have licked the immigration problem bay increasing taxes and regulation so much that no one wants to come to their states any more.

The state of Michigan is a hoot.  The politicians craft laws that create one of the worst business environments in the nation, and then scratch their head and wonder why all the jobs seem to be leaving.  One explanation may be that they simply don't understand even the fundamentals of business.

Case in point:  I have to pay a yearly registration fee as a corporation in Michigan.  That fee is based on the number of shares of stock my company has outstanding.  If my company were worth a million dollars, and had issued one share worth a million dollars, we would pay lower fees than if the same company had issued a million shares each worth one dollar.  Basing taxes and business fees on economically meaningless numbers is probably a leading indicator of some deeper issues.

I have always wondered why the Denver airport has so much goofy modern art all over the place.  Even the subway tunnels have art on the walls (I must admit I am kind of partial to the little fans on the outbound train trip).  There are replicas of paper airplanes hanging from the ceilings, a fountain that is supposed to model the Front Range, and a fake Mayan temple in one terminal concourse.  It turns out that Colorado has a law that says that 1% of the budget for public building construction has to go for art.  Given that the airport costs overran to $4.8 billion, that was a $48 million boondoggle for every goofy public artist that could pull up to the trough.