Coyote Blog

From the Arizona Republic:

Five of the nation's top 10 high schools are in Arizona — and they're all branches of the same charter school.

According to U.S. News and World Report, Basis Scottsdale is the nation's top-performing high school, followed by Basis Tucson North and Basis Oro Valley. Basis Peoria and Basis Chandler were ranked fifth and seventh, respectively.

The rankings consider students who exceeded state standards, graduation rates and college preparedness, according to U.S. News.

Two additional Arizona charter schools, along with two "special function" public schools, made the top 100.

Arizona was one of the earliest adopters of charter schools in 1994, and it continues to be at the forefront of school choice. However, the state has some of the lowest school funding and teacher pay in the U.S.

I love that last line.  Makes one question if the obsession on teacher pay and funding for bloated school administrations really is the key to education improvement.  I wonder if when the Arizona Republic writes their inevitable next article on Arizona having lower teacher pay they will add a clause that says "However, the state has five of the nation's 10 top charter schools".

This is a fascinating article and I encourage you to read the whole thing.  The article gives plenty of space to opponents of school choice and charter schools:

[Arizona Education Association President Joe] Thomas said any public school district in Arizona could replicate the Basis model if they were also allowed to work only with a small number of high-achieving students and "force the rest out of your school."

This inference that Basis gets its results by carefully cherry-picking students is undermined by facts from the same article:

There are no entry requirements or exams to get into a Basis school — just a game of luck. An annual lottery determines which new students are accepted.

Already, Basis schools have received 15,000 applications for 1,000 open spots for next school year, Bezanson said.

To be fair, since Basis does not participate in the free school lunch program and the city school bus program won't deliver kids to Basis, there are kids that probably are not able to apply, but again, this is far from a case of cherry-picking.  It is a case of setting very high expectations and expecting kids to achieve that.  Thomas's comment on this reflects the different philosophy of teachers unions vs. school choice folks:

Thomas said Basis schools are great for the small minority of kids who can succeed in the high-pressure environment. But most students don't — and public schools have the expectation to teach all students.

This is partially true, the Basis approach is not right for all kids, but given they have 15 applications for every 1 open lottery spot, it is right for a lot apparently.  But the difference in philosophy is that public school advocates want to force the Basis kids that are able to achieve at a high level into dumbed-down, plodding schools, moving no faster than the lowest common denominator.  School choice advocates, on the other hand, also acknowledge this difference, but rather than enforcing a one-size-fits-all public solution, advocate for a thousand flowers to bloom with many different school solutions.

There are many other charter schools in town that do a great job with kids of different needs.  My wife and I support a Teach for America teacher at a charter school in South Phoenix.  The kids in her class are mostly all Hispanic, many have parents that do not speak English and a high percentage are on the school lunch program.  These kids may not be quite at the Basis level, but they out-achieve most of the Phoenix public school system and are well beyond what kids from similar demographics are doing in local government schools.

.... your paper prints headlines that say "Economists: Zero chance of Arizona recession."  I am sure Houston would have said the exact same thing, right up until oil prices dropped to $30 and suddenly there was like a 100% chance.  When the Arizona Republic makes a definitive economic prediction, bet the other side.

Anyway, I am considering this headline to be a flashing indicator of the top.  In 2005 I wrote about another such indicator that told me the housing market had peaked:

So, to date [May 31, 2005], I have been unconvinced about the housing bubble, at least as it applied to our community.  After all, demographics over the next 20-30 years are only going to support Scottsdale area real estate.

However, over the weekend I had a disturbing experience:   At a social function, I heard a dentist enthusiastically telling a doctor that he needs to be buying condos and raw land.  The dentist claimed to be flipping raw land parcels for 100% in less than 6 months.

For those who don't know, this is a big flashing red light.  When doctors and dentists start trying to sell you on a particular type of investment, run away like they have the plague.  At Harvard Business School, I had a great investment management class with a professor who has schooled many of the best in the business.  If an investment we were analyzing turned out to be a real dog, he would ask us "who do you sell this to?" and the class would shout "doctors!"  And, if the investment was really, really bad, to the point of being insane, the class would instead shout "dentists!"

Which reminds me that in the last 6 months I have started hearing radio commercials again urging folks to get into the house-flipping business and make their fortune.  Whenever institutions start selling investments to you, the average Joe, rather than just investing themselves, that should be taken as a signal that we are approaching a top**.  About 12-18 months before oil prices tanked, I started getting flooded with spam calls at work trying to sell me various sorts of oil exploration investments.

** Postscript:  In 2010, when house prices were low and some were going for a song in foreclosure, there were no house flipping commercials on radio.   That is because Blackstone and other major institutions were too busy buying them up.  Now that these companies see less value, you are hearing house flipping commercials.   You know that guy who has a book with his fool-proof method for making a fortune?  So why is he wasting his time selling books for $2 a copy in royalties rather than following his method?

I was reading this article in the Arizona Republic (which is generally an unskeptical cheerleader for light rail investments) and looking at the claim that Valley Metro (the operator of Phoenix light rail) had a 45% fare recovery ratio in 2013.  One would think that means that their fares cover 45% of their costs -- which would be awful for any real enterprise but is pretty good for government-run rail systems.

But in fact, Valley Metro (along with rail supporters in the Administration) stack the deck by defining most of the costs out of this metric so it looks far better than it really is.  In fact, by my reading of their financial statements, the true fare recovery is at best 15.2% and likely much worse.

Here are the Valley Metro financials for 2013, from their annual report

Look at their costs of $75+ million and fares of about $12.8 million.  How do they get to 45%?  Simple -- they leave the majority of their costs out.  They exclude administrative costs, financing costs, and depreciation (essentially their capital cost) from the equation.  This means that their fare recover is 45% -- IF you ignore their large administrative costs and you ignore the $1.4+ billion the line cost to build.   Further, because of the way the government does its finances, it is also missing any financing costs (interest and such on debt).

So the true cost recovery, stated in a way that  a reasonable person would think about such a number, is 16.8% at best.  If one takes into account the $8.28 million in "non-operating expenses" the number is 15.2%.  And it is even lower if you were to include interest and other financing costs.

I am sure Valley Metro will argue that this is the way the Feds measure it.  I don't care.  It has an obligation to accurately report its financial position to the public who is paying for it, particularly when the public is considering further investments in the form of higher taxes.  The 45% is a meaningless number that is crafted solely to make light rail look financial stronger than it really is.

This, by the way, is why total ridership of rail + buses has stalled since the construction of the light rail line.  Light rail is so expensive per rider that it is starving cash from the rest of the system.

As background, I live in a town called Paradise Valley, Arizona.  This town is perhaps most famous recently for installing surveillance cameras all over town hidden in fake cacti.  Here is the one on my block.  There are at least two others within walking distance of my house.
    

These cameras apparently have license plate reading ability and perhaps the ability to do facial recognition, and likely are funded by Homeland Security for the purposes of feeding data into a national tracking database.  I say "likely" because the town of Paradise Valley under Mayor Michael Collins somehow appropriated these things secretly without any public discussion or debate.

So in this context, it was hilarious to see none other than Mayor Michael Collins piously intoning about the importance of privacy in the town of Paradise Valley:

Paradise Valley is considering an ordinance that would make it illegal to fly drones in town without a permit. Backyard hobbyists and law-enforcement agencies that may need to use drones during emergencies would be excluded from the proposed ban.

"Our residents move to Paradise Valley because they like the privacy," said Mayor Michael Collins, who presides over a community that counts celebrities, sports stars and Discount Tire founder Bruce Halle, the richest person in Arizona, among its residents.

What Mr. Collins apparently means is that he wants the government to maintain a monopoly on surveillance technologies.  Libertarians like myself cringe at the notion that a monopoly on privacy-invasion should be granted to the government, the only institution in the country that can legally jail you, take your money, and even shoot you. Conservatives, who dominate this community, tend to be blind to this danger, saying that "if you aren't doing anything illegal, you have nothing to fear from surveillance."  I will say, though, that some Conservatives have woken up a bit over the last several years on this with the IRS non-profit harassment and the Wisconsin John Doe investigations.

By the way, extra credit to the Arizona Republic for gratuitously publishing where a wealthy citizen lives in a sentence about privacy.

Kudos to Jeff Gibbs for finally bringing to the pages of the Arizona Republic what strikes me as the most economically obvious, but least mentioned, solution to future water shortages:  Price.

The State of Arizona has filed a brief in a court case challenging its man-and-woman definition of marriage, detailing why it thinks this definition is necessary.  I won't go into the whole thing, but I want to address two points made by the state.  Here is the first:

The state regulates marriage for the primary purpose of protecting relationships that would produce children and let those children grow up with a biological mother and father.

Dalton said marriage laws are meant to ensure a stable environment exists for children and aren't based on any sort of ill will toward gay people.

They can pretend this all they want, but it is not true.  Marriage is deeply intertwined into state law, everything from taxation to patient rights in hospitals to inheritance to real estate law.  In all, I found hundreds of different references to marriage in the state code, only a minority of which had anything to do with children

I searched the Arizona Revised Statutes for mentions of the words "spouse" or "spouses".  These words are used 1133 times in 373 different statutes!  The Our America team told me they counted over a thousand references in Federal code.  In other words, our law codes give -- in thousands of instances -- specific rights, responsibilities, and privileges to married couples who have access to a state-granted marriage license.  Those left out of the current unequal definition of marriage face any number of challenges imposed on them by these specifics of spousal rights and privileges embedded in our law code.  I call this the non-marriage penalty.

The other argument I want to address is this one:

In earlier documents, lawyers offered evidence they say suggests redefining marriage would lead to fewer men and women marrying each other and greater instability in existing marriages.

Included were statistics showing that in five states where same-sex marriage had become legal, overall marriage rates had dropped from 2010 to 2011 and the divorce rate in one state, Massachusetts, had risen sharply.

Perhaps the Arizona Republic is portraying this "evidence" incorrectly, but what is described is pathetic.  A one-year change in marriage rates (or about anything else) is just noise, and is even more useless when one cherry-picks just a few states that have the data you want and fail to provide any controls or sense for how this compare to long-term trends.  Further, is is just crazy to think that societal trends work this way.  People don't change fundamental behaviors like marriage in mass after such a change -- for example divorce rates took decades to rise after liberalizations in divorce laws.  Besides, no one can demonstrate any mechanism by which this occurs.  I am not big on anecdotal evidence but no one can even come up with an anecdote:  "Mabel and I were going to get married in June, had the church all picked out, but then they let those gays marry and we decided marriage was not for us."  Seriously?  This is some Conservative fantasy.  Like anecdotes, I don't like polling data, but where is the polling data that says "I am less likely to marry my girlfriend if gays can marry too."

By the way, as I have written before, if Arizona is really concerned about protecting the institution and seriousness of marriage, they should ban Kardashian marriage instead.

The other day, when criticizing an incredibly facile minimum wage analysis in the Arizona Republic, I had meant to observe that since minimum wage jobs are such a tiny (1.5% if include jobs that work for tips) portion of the workforce, one should look at more targeted metrics to assess the effect of minimum wage hikes, such as teen employment.

Kevin Erdmann has such an analysis.  He observes, "Is there any other issue where the data conforms so strongly to basic economic intuition, and yet is widely written off as a coincidence?"

Note that there is still some danger, as I wrote before, in measuring employment effects from the implementation date. Businesses plan ahead an many job losses may be occurring between the announcement and the implementation date.  I know we have made all the job cuts we plan to make in response to California minimum wage increases six months ahead of the actual date the wage takes effect.

Update:  The charts are obviously far from a smoking gun.  That is the nature of economic analysis.  In complex and chaotic multi-multi-variable systems, controlled studies are almost impossible and direct correlations are hard to find, and even when found may be coincidence.  As an employer who hires a lot of summer seasonal employees in parks, I would obviously be a natural employer of teens.  But I no longer do so, and it is important to understand that wages are only a part of the equation.  Another major issue is one of liability.  Increasingly, the legal system makes the employer liable for any action of their employees, no matter how boneheaded or how much the action is against all policy and training.   I have enough trouble with employees that have years of good work history -- I am not really excited about taking a chance on an unproven 17-year-old.

Apparently when prices for things are arbitrarily doubled, the demand for them goes down.  

On Monday, about 175 employees of the buffet restaurant in the slot-machine and electronic gambling casino in Ozone Park learned that the restaurant had been closed and that their jobs no longer existed. The casino had received plaudits when, in late October, a labor arbitrator issued a ruling that doubled the average pay of workers.

...

“Everything is done,” said Mariano Cano, 45, a server at the buffet for the past two years. “They just threw us out like dogs. They just gave us a couple of dollars to shut up, and that’s it.”

In October, Mr. Cano’s pay went from just over $5 an hour, plus tips for the drinks he delivered to the tables and dishes he cleared, to around $12, because of the living wage agreement.

This is one of those regulatory overreach paired with corporate cronyism stories, so I won't express any sympathy for the business involved -- it is earning huge rents from insider political deals it cut, and though the NYT does not explain it very well, my sense is that the arbitration requirement on wages was part of that political deal.

But it is amazing to me how much the Left has simply hypnotized itself into believing that minimum wage increases don't affect employment.  If we go back a number of months and look at the article where the NYT announced the arbitration decision, there is not one single mention that there might be some job security issues with forcing a doubling of wages.

Jeannine Nixon looked as if she had hit the jackpot. Ms. Nixon, a customer relations representative at  in Queens, had just learned that she would be making $40,000 a year, up from $22,300.

“It’s life-changing,” Ms. Nixon, her voice cracking, said on Thursday. “I can finally feel relieved.”

It is amazing to me that it did not even occur to any at the NYT to think that a doubling of worker pay might be anything but a pure bonanza.  I suppose they were blinded by a sense that casino margins were so high (though I find that the public consistently overestimates margins of many businesses, confusing revenues with profits).  Even if the casino is wildly profitable, one had to consider that all activities in the casino were not equally profitable.   Restaurants often have thin margins and 20-30% labor costs.  There is simply no room for doubling them in a business that typically has single digit margins at best (in fact, most restaurants lose money).

There are a number of reasons why people can fool themselves into thinking that minimum wage increases have no effect on employment

1. The biggest reason is that only about 3% of American workers earn the minimum wage.  So even a large drop in minimum wage job prospects, say by 10%, might only affect total US employment by a few tenths of a percent, a number that might not be seen in the general economic noise.
2. Minimum wage increases are typically implemented in small steps and announced well in advance.  Looking at employment the day after vs. the day before the actual date of change likely misses most of the effect.  For example, California announced almost a year in advance that minimum wages were going up by 25% in July of 2014.  Our company closed one operation and made substantial reductions in our work force in response, but we made these changes in December 2013, months before the change actually took effect.

Which makes this article in the Arizona Republic by Ronald Hansen one of the worst, most facile bits of economic analysis I have ever seen.

But, at the most basic level, there is good reason to think the minimum wage doesn’t kill jobs.

The minimum wage has gone up 22 times since it was instituted in 1938. There is complete seasonally adjusted data from the U.S. Bureau of Labor Statistics available for 21 of those hikes.

In 15 of those 21 cases, the U.S. economy added jobs in the year after the minimum wage went up.

On 11 occasions, it added more jobs after the hike than it did in the year before the raise went into effect.

This alone suggests that raising the minimum wage isn’t an automatic drag on employment growth.

This is simply absurd for all the reasons I listed above.   I understand how I might find this kind of "analysis" in the comments section of the Daily Kos, but how does one get this past an editor?

Three cheers for Greg Patterson holding the media accountable for their past support of costly corporate welfare.

You may have seen the recent Wall Street Journal Story about the financial fiasco that is Glendale Arizona.

Here's the Republic's take on it. 

Glendale ranked second in the U.S., according to the story, thanks to a $26.6 million negative fund balance at the close of fiscal 2012, due largely to sports-related debt.

Glendale has made a lot of mistakes, but I think that there is near universal agreement that the critical error was their decision to build the hockey arena.

Yep.  I have written about the egregious hockey deals that have bankrupted Glendale on several occasions.  George Will even quoted me on the topic.

Greg Patterson went back and looked at what the Arizona Republic was writing before the Glendale deals went so noticeably bad.  I have written before about how the media goes into full cheerleader mode on those crony stadium deals.

Before Glendale bankrupted itself to subsidize the hockey team, Scottsdale was offered the "opportunity" to do so and turned it down.  The local paper Arizona Republic excoriated Scottsdale for passing on the chance to subsidize rich sports team owners, saying that "Once-in-a-lifetime projects are just that".  Here is the best quote from the 2004 Republic editorial:

Our view is that Scottsdale's mishandling of the arena idea was a leadership blunder of biblical proportions. Enough with the blame game. We hope that Scottsdale at least has learned some tough lessons from the disaster.

And this is classic:

Some city officials seemed content to nitpick, complain, second-guess and haggle over details. They're right to be diligent. Certainly nobody endorses a Pollyanna-ish panel of rubber-stampers. But at the same time, people who are forever looking for stuff to complain about always seem to find it.

I bet Glendale wishes it had more second-guessers on its city council.  The whole thing is worth reading.

Postscript:  This is one recommendation from the Republic I can agree with:

Think twice about ever launching a redevelopment effort like this again. Sensing that the Los Arcos Mall area was hurting economically, the council formed the Los Arcos Redevelopment District in December 1995. The council adopted a redevelopment plan the following July, and the Ellman Cos. subsequently acquired the 42-acre site. Not too surprisingly, Ellman was the only one to answer the city's request for proposals.

Ellman owns the Los Arcos property. That gives him a lot of advantages, including a position of negotiating authority. It allows him to stoke political outrage by wearing down the patience of neighbors who would like to see something built on this key corner. Got a great idea about what should be done at Los Arcos? Too bad. Ellman still owns it. Condemnation is not a viable political or financial course for the city, and Ellman knows it.

Redevelopment almost always means "crony giveaway" nowadays.

The Arizona Republic says there is not stock market bubble.  Can't think of a better reason to sell.

The Arizona Republic today reviews a speech given by Yellen in January, 2007 in Phoenix:

It was January 2007 when Yellen, then head of the Federal Reserve Bank of San Francisco, spoke here about financial literacy before transitioning into comments about the economy — comments that now look remarkably unperceptive.

Back then, months before the real-estate and banking crisis took down the economy, Yellen expressed concern that inflation was uncomfortably high while job gains were coming too swiftly.

“If labor markets are as tight as the unemployment rate suggests, then there may be reason for concern about building inflationary pressures,” she said according to my Jan. 18, 2007, article.

Subsequent events showed that inflation was the last thing we had to worry about, while the lack of jobs has emerged as a central drag on the economy. Back then, U.S. unemployment was around 4.5 percent. But after the recession took hold, it more than doubled, peaking at 10 percent in late 2009. At 7.3 percent currently, it remains well above where it should be this far into an economic recovery.

In contrast, core consumer inflation (which excludes food and energy costs) of 1.8 percent today has hardly budged from the 2.2 percent rate that had Yellen all worked up back then.

In another comment during her Phoenix talk that now looks wildly off-base, Yellen, who later was named vice chair of the Fed’s board of governors, said recession risks had receded despite lingering weakness in housing. She cited the Valley as a place where home-price appreciation had come down from unsustainably high rates of increase.

The Great Recession, as we all now know in hindsight, began later that year, triggered by a home-price slide of epic proportions.

I don't want to beat her up too bad for missing the bubble burst, since most everyone did.  They also all missed the last bubble burst, and the one before that, etc.

This is what makes me crazy:  not that these folks were wrong, even consistently brutally wrong, but that they display absolutely no modesty in their actions given that they were so wrong.  They propose policy steps, such as seemingly eternal QE, that are astoundingly risky unless one assumes that they have a very, very good grasp on exactly where the economy is going.  Which they clearly never have had in the past.  If they acted like they had been wrong most of the time, then I would have little to criticize.  But to be consistently wrong and then make huge risky bets as if you have reliable predictive powers is hubris of the worst sort.

That is according to our senior Arizona Republic columnist EJ Montini  (via Expresso Pundit)

The U.S. is big enough and strong enough to act on behalf of the innocent victims, including children, who were killed in Syria by the chemical weapons. But those who are against it say this is not our fight. That we shouldn’t go it alone. That the chemical attack wasn’t against Americans. That we can’t be sure what we’d be getting ourselves into. And that there is no clear objective, other than acting in response to an atrocity.

I understand the reasoning.

Given all that, however, I wonder why was so many Americans were furious with former Penn State assistant football coach Mike McQueary.

Remember him?

He was the guy who saw the now imprisoned former coach Jerry Sandusky raping a boy in a Penn State shower.

McQueary was vilified for not acting to stop the attack.

This is an absurd comparison for any number of reasons.  The most obvious is that no one would have been put in danger, and the financial costs were nil, for the Penn State coaches to stop Sandusky's abuse.  Further, Penn State officials had a clear legal obligation for the safety of folks on their property.  Finally, Penn State had the ability to easily stop and prevent the illegal activity.

None of these statements are true for Syria.  The costs in lives and property, both to ourselves and to the citizens of Syria, are potential enormous.  It's not clear it is the US's job to police the area, and in fact history has proven that unilaterally adopting the policeman role, even with the best of intentions, can hurt our country's reputation and relations in the long-term.  Finally, its not at all clear that we could stop Assad from doing whatever he wishes, short of sending in troops to remove him from power, and even then his replacement may likely be just as bad.  Oddly for a liberal in the foregin policy sphere, Montini seems to be making a form of the "might makes right" argument, that the US is obligated just because it is big and strong.

Tellingly, I don't see Montini advocating for use military force to help citizens in any other of the scores of countries where they are being mistreated.  It is more likely that what Montini is really concerned about is the loss of the prestige and credibility of Barack Obama.  A lot of blood has been spilled for thousands of years for the prestige of state leaders.  I for one am happy if this country is finally wising up to this game.

The Goldwater Institute is threatening to sue the City of Phoenix in order to stop pension spiking.  According to the Arizona Republic,

State law says “unused sick leave, payment in lieu of vacation, payment for unused compensatory time or payment for any fringe benefits” cannot be used as compensation to compute retirement benefits.

State law also says that only “base salary, overtime pay, shift differential pay, military differential wage pay, compensatory time used by an employee in lieu of overtime not otherwise paid by an employer and holiday pay” may be used to calculate pension benefits.

This seems pretty explicit.  The City admits to using sick leave, vacation pay, and fringe benefit values (e.g. cars and cell phones) in the pension calculation.  So this seems pretty cut and dried.  The city is breaking the explicit letter of the law.

That Goldwater has a good case can be judged from the fairly lame defenses of Phoenix practices by local unions.  None seem to address the basic legal issue, but instead accuse Goldwater of "wasting taxpayer funds if it forced Phoenix to defend itself in court", a fairly hilarious attempt to claim the moral high ground of fiscal responsibility.

In fact, it appears that public workers believe  (and I think this is a fairly common belief) that their collective bargaining agreements trump state law.

John Teffy, a Phoenix Fire Department captain, said Goldwater should stand down.

“It seems to me that if the Goldwater Institute took the time to understand how the city works and how contracts work, they would know there is a much simpler way to address this than with (threats of) frivolous lawsuits,” Teffy said.

I did not understand this statement at first, but what I think he is saying is that since the "Contract" in his mind supersedes all laws, then the way to deal with this is through a contract renegotiation.  I think public workers see the writing on the wall and know that pension spiking is illegal, so they are hoping to handle this through a contract negotiation that just shifts this lost spiked value to workers in some other more legal form.  A great strategy for them, but a terrible one for taxpayers, who should not have to pay for the union's past illegality.

Via the AZ Republic

The true cost to operate Jobing.com Arena ranges from $5.1 million to $5.5 million a year, which is about $10 million to $20 million a year less than the Glendale City Council has agreed to pay hockey-related interests to manage the facility in recent years.

The net management costs, included in documents recently published on the city’s website, are bundled in the city’s solicitation for a new company to operate the city-owned arena.

Glendale council members interviewed by The Arizona Republic said they hadn’t reviewed the documents and were surprised by the figures.

“I wasn’t aware of that,” Mayor Jerry Weiers said. “Then again, I know damn good and well that the way it’s been run, they’re not putting anything extra into it whatsoever.”

This is unbelievably easy to understand .  It is a hidden subsidy, and everyone knows it.  The pictures of politicians running around saying "what, we had not idea" is just hilarious.  The Phoenix Coyotes hockey team has the lowest attendance in the league, and loses money.  In addition, the NHL, which owns the team, has committed to its members that it will not take a loss on the team, meaning that it needs to sell the team for north of $200 million.  The team is worth over $200 million, but only if moved to Canada.  In Glendale, it is worth $100 million or less.

The city was close to a deal a few years ago to sell the team.  It tackled the team value problem by basically throwing $100 million in taxpayer money into the pot for the sale (to make up for the difference in value between the asking price and actual worth).  When this encountered a Constitutional challenge (under the AZ Constitution corporate welfare is illegal though you would never know it living here) the city council disguised the subsidy in the form of an above-market-rate payment for running the arena.

So absolutely everyone knows what is going on here.  This has become a massive black hole for the town of 250,000 people that achieves nothing but the self-aggrandizement of the local politicians, who feel like bigshots if they have a real major sports franchise in town.  Oh, you heard that this all actually pays for itself in tax money?  Hah!

The justifications for previous management deals revolved around a commitment to keeping the team in Glendale. Loyal fans pleaded with council members for the team’s future. And a council majority saw advantages, including thousands of fans trekking to their city 41 nights a year to watch hockey and spend money in the city’s restaurants and shops.

The city collects revenue associated with the team and arena through leases, parking fees and tax collections for food and merchandise sales in the nearby Westgate Entertainment District. Those figures have been on the upswing, particularly since an outlet mall opened last fall.

Total collections were $4.7 million in fiscal 2011, and reached $6.4 million through just the first eight months of the 2013 fiscal year, according to the city. That money helps pay, but doesn’t fully cover, the city’s debt to build the arena.

The town spent $300 million on a stadium and subsidized the team between $25 and $40 million a year, depending on how you count it, all to get an "incremental" $6-8 million in tax money.  And by the way, just because they collect it in this area does not make it incremental -- these sales could well have cannibalized another area of town.

OK, so the Eastern narrative on Arizona is that it is full of a bunch of wacked-out xenophobic conservatives.  And sure, we have our share.  But the NY Times delves into an issue that, living here, I had never even heard of

The massive dust storms that swept through central Arizona this month have stirred up not just clouds of sand but a debate over what to call them.

The blinding waves of brown particles, the most recent of which hit Phoenix on Monday, are caused by thunderstorms that emit gusts of wind, roiling the desert landscape. Use of the term “haboob,” which is what such storms have long been called in the Middle East, has rubbed some Arizona residents the wrong way.

“I am insulted that local TV news crews are now calling this kind of storm a haboob,” Don Yonts, a resident of Gilbert, Ariz., wrote to The Arizona Republic after a particularly fierce, mile-high dust storm swept through the state on July 5. “How do they think our soldiers feel coming back to Arizona and hearing some Middle Eastern term?”

Presumably Yonts also uses some numeric system other than arabic numerals for his math as well.  Seriously, I could mine any community and find some wacko with some crazy idea.  Good journalists are supposed to have some kind of filter on these things to determine if they really are some pressing regional issue.  I live here and I have not heard one word about any such controversy.  But it fits the NY Times caricature of AZ, so they ran with it.

In fact, I think "haboob" has caught on pretty fast because it is a fun sounding name and it is something that is unique to AZ vs. other states.    After living on the Gulf Coast and in tornado alley and on the west coast, it is kind of nice to live in a place where the worst natural disaster you get is a dust tsunami that makes you have to go out and wash your car.

Lefties are struggling with the concept of a libertarian doing a good deed (in this case, Radley Balko's great journalism leading to the release of Cory Maye.

Here is the real problem for the Left:  This is exactly the kind of story -- a black man  railroaded into jail in Mississippi -- that leftish reporters used to pursue, before they shifted their attention to sorting through Sarah Palin's emails.  A lot of investigative journalism has gone by the wayside -- in Phoenix, it has really been left to independent Phoenix New Times to do real investigative journalism on folks like Joe Arpiao, as our main paper the Arizona Republic has largely fled the field.

Electing law enforcement officers is a terrible idea, but like most of the country, we do it here in Arizona.  We shouldn't be surprised, then, when Sheriff's try to pump up their image by portraying themselves as the last bastion against an invading horde.

When it was over, Sheriff Paul Babeu issued a news release declaring that Pinal County is "the No. 1 pass-through county in all of America for drug and human trafficking."

It's a line the sheriff has used countless times - most recently on Thursday in testimony before the U.S. Senate Committee on Homeland Security - as he criticizes the federal government for failing to secure the border.

There's just one problem: There is no data to support the assertion.

In fact, an Arizona Republic analysis of statistics from local, state and federal sources found that, while sheriff's officials do bust smugglers and seize pot, Pinal County accounts for only a fraction of overall trafficking.

The newspaper also found that other headline-grabbing claims by Babeu are contradicted by statistical evidence or greatly exaggerated.

Babeu's County, for example, does not even touch the border.   And crime rates in AZ have fallen faster over the last 10 years than the national average, right during the period of high illegal immigration.

Perhaps this is just a pet peeve of mine, but I really hate it when local news organizations try to find a local angle to a huge international story.  This headline from the Arizona Republic today is a good example:

No injuries reported to workers in Japan employed by Arizona companies

I was absolutely astounded several years ago when the city of Glendale (a suburb NW of Phoenix) agreed to shell out $180 million to build an arena to try to keep a pro hockey team (the Coyotes) in town.   Now, they are considering doubling their investment:

Will the Glendale City Council vote to shell out nearly $200 million in a deal aimed at keeping the Coyotes in town for at least 30 years?

But there is nothing simple about the decision facing elected officials in the West Valley city that has yearned to build its reputation as a sports and entertainment hot spot.

The deal involves Glendale taxpayers giving $100 million to Matthew Hulsizer, a Chicago businessman poised to buy the Phoenix Coyotes from the National Hockey League.

And, the Arizona Republic's Rebekah Sanders reports that "Glendale would pay Hulsizer $97 million over the next 5 1/2 years to manage the arena, schedule concerts and other non-hockey events."

Unbelievable.  The value destruction here is amazing.  A few years ago, the Coyotes were only valued at $117 million.  So the government will have subsidized an entity worth just north of $100 million with $400 million in taxpayer dollars?  Nice investment.  Of course they have a BS study about net economic impact of the Coyotes, with a sure-to-be exaggerated figure of $24.5 million a year.  But even accepting this figure, they are spending $400 million for at most $24.5 million in economic impact, which at best maybe translates into $2-3 million a year in extra taxes.  That works, how?

Losing more than 40 major events, that is hockey games, per year at the arena would be a punch-in-the-gut to bars, restaurants and retail shops that also call Westgate home.

Here is a hint:  I pretty much guarantee the buyout value or moving cost of these businesses is less than $200 million.  But here are the most amazing "economics"

that would only further jam up Glendale, which counts on sales tax revenues those businesses generate to pay off the debt it has amassed in trying to build its sports empire.

So we are going to spend $200 million to make sure we can keep up the debt service on the previous $180 million?  So where does the $200 million come from.  I am increasingly buying into Radley Balko's theory that the media is not liberal or conservative, just consistently statist.  Here is the comment on the Goldwater Institute's legal challenge

City officials also may face a legal challenge from the Goldwater Institute over the conservative think-tank's belief that the deal Glendale has cooked up violates state laws that prohibit government subsidies to private entities.

That, of course, means that the city will rack up untold legal fees to defend their deal.

Waaaaa!  More legal fees.  Is that really their biggest concern?  How about the strong possibility that Goldwater is correct, or a mention that they have won in court recently in similar cases.  But we will end with this happy thought:

Now, if they say yes to the $200-million giveaway, they may keep the team in town but are only piling on to that massive debt.

And as their initial deal with the team and previous team owners has proven, there are no guarantees that the $200 million will be enough.

Postscript: Local papers have never seen a sports team subsidy or new stadium they did not love.  Given the quality of their news departments, local sports teams sell newspapers.

PS#2: Long ago I wrote a post on subsidies for business relocations and the prisoners dilemma.

That's the headline from the Arizona Republic today.  Do editors realize this is becoming a national running joke?

The number of people filing new claims for unemployment benefits unexpectedly rose last week by the largest amount in three months. The surge is evidence of how volatile the job market remains, even as the economy grows.

One of the perils of being a populist, as John McCain is finding out, is that the public is allowed to change its mind, but politicians who attempt to follow them end up looking bad.

the four-term senator says he was misled by then-Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke. McCain said the pair assured him that the $700 billion Troubled Asset Relief Program would focus on what was seen as the cause of the financial crisis, the housing meltdown.

"Obviously, that didn't happen," McCain said in a meeting Thursday with The [Arizona] Republic's Editorial Board, recounting his decision-making during the critical initial days of the fiscal crisis. "They decided to stabilize the Wall Street institutions, bail out (insurance giant) AIG, bail out Chrysler, bail out General Motors.... What they figured was that if they stabilized Wall Street - I guess it was trickle-down economics - that therefore Main Street would be fine."

I am not sure this is much of a defense.  Even without McCain's access to such financial luminaries, I and many others predicted at the time the $700 billion slush fund would be used as, well, as slush fund to bail out the politically well-connected.  I must admit I didn't see the GM/UAW bailout coming, but its not wildly surprising in retrospect.

Unfortunately for all of us, McCain's competition in the next election, JD Hayworth, is even less appealing.

Via the Arizona Republic, from a deposition by Sheriff Joe Arpaio:

Arpaio says he was not well versed on the Fourth Amendment to the U.S. Constitution, or its counterpart in the Arizona Constitution, which prohibit unreasonable searches and seizures.

Yeah, no kidding.  This is just kind of bizarre.  I get the whole ghost-writer thing, but at least Obama actually seems to have read the book that was ghost-written for him:

Maricopa County Sheriff Joe Arpaio has not read the book he co-authored in 2008, which includes information on Arpaio's philosophy on America's immigration problem and how to cope with the nation's porous borders.

Arpaio's lack of familiarity with the book, "Joe's Law - America's Toughest Sheriff Takes on Illegal Immigration, Drugs and Everything Else That Threatens America," was among the revelations to emerge from a nine-hour deposition the sheriff gave as part of a racial-profiling lawsuit filed against the Sheriff's Office.

Update: There is a spin in the article that Sheriff Joe is just a delegator, like any good corporate executive.  I am generally considered to be far more comfortable with delegation than average, and even I know a lot more about my business than Sheriff Joe does about his.    Part of the reason is likely that I don't spend 95% of my time on media and PR events to boost my name recognition at public expense.  And you can be dang sure that I know certain pieces of legislation that are important to my business, like the Fair Labor Standards Act and the Service Contract Act, better than my lawyers.

Another on trying to balance water supply and demand in the state with only a one-sentence mention of water rates.

Over the years, some communities have tried to reduce demand. Years ago, Tucson devised a set of water rates that escalated steeply with use. As a result, many people simply stopped planting grass or other thirsty landscaping.

Amazingly, it is the only thing in the whole article that has been demonstrated to work, but still the author leans towards land-use planning and goofy dictats like rainwater harvesting rather than raising rates as a way of managing water supply and demand.

I wrote a lot more here, including an analysis that showed Phoenix has some of the cheapest water rates in the country.

These guys have totally lost it. OK, they have always been bonkers, but they have finally lost their ability to paper over their nutty paranoia and quest for power in the media.  Remember I told you the other day that Arpiao and Thomas keep filing wider and wider criminal conspiracy charges against their critics.  Basically anyone who criticizes them or seeks to keep their power limited within Constitutional boundaries is a criminal in their eyes.

Maricopa County Attorney Andrew Thomas called for investigations into the chief prosecutors of two neighboring counties on Thursday because they publicly criticized him and Sheriff Joe Arpaio earlier this week.

Yavapai County Attorney Sheila Polk and Pinal County Attorney James Walsh sent separate letters to the Arizona Republic, criticizing what they called "abuses of power" by Thomas and his close ally, Arpaio.

Polk, a Republican who described herself as a passionate believer in limited government, accused the two men of "totalitarianism" and said they have become "a threat to the entire criminal-justice system" because of a series of a investigations they have launched against their foes.

In recent weeks, Thomas and Arpaio have announced more than a dozen criminal investigations into public officials who have criticized them in the past. The pair has said their fellow Maricopa County officials are engaging in a massive conspiracy to obstruct justice and limit their power. The investigations have resulted in criminal charges against two elected officials and a judge.

Now, Thomas wants a former state Supreme Court justice to investigate his neighboring prosecutors as part of what he calls "an orchestrated campaign to pressure law enforcement in Maricopa County to drop charges against influential criminal defendants and suspects."...

In his request to McGregor [PDF], Thomas ... accused the other prosecutors of essentially breaking the law by criticizing him and the sheriff. He said the pair violated rules for attorneys in Arizona, as well as tainted the pool of possible jurors in the ongoing cases....

In his request for an investigation into the comments, Thomas alluded to a supposed campaign to enlist these attorneys "and possibly other third parties" to criticize him and the sheriff.

Arpaio is the same paranoid who cost the County hundreds of thousands of dollars when he demanded extra security because he believed himself to be an assassination target.

If it wasn't so overdone, I would do another Downfall mash-up on this for YouTube.

Can't say that I really care, but I find all the quivering excitement here hilarious:

If Tiger Woods winds up in Wickenburg for rehab over his apparent sexual compulsion and pill addiction, local businesses are ready.As the rumor mill seems to suggest, Tiger would be checking into the Meadows Rehabilitation Center in Wickenburg just after New Years, and despite being a little late in covering Tiger-gate's Arizona connection, the Arizona Republic reports today that local businesses are gearing up for golf's greatest Lothario.

For example, the owner of Sundance Pizza in Wickenburg, Bob Halsey, has already placed a sign in front of his store that says "Hey, Tiger, we deliver."

Chances of Tiger ordering some of Halsey's take-out are probably unlikely -- perhaps a more suiting sign should say "hey, droves of paparazzi, we deliver."

If Tiger does end up in Wickenburg, the number of paparazzi that will descend on the tiny town is certain to cause a boom for the local economy. Some tabloids are even rumored to have placed journalists in the rehab center themselves, in order to get the real dirt on the golf great.

Paying lots of money to stop having sex with hot women seems an odd thing to do.  From my experience he could take up playing Dungeons and Dragons and have the same result for a lot less money.