Coyote Blog

... because it really annoys public officials when you don't vote for the candidates they have approved.

Every write-in entry must be verified with the list of legitimate write-in candidates for that election, by a three-member review team. In the August primary election, Maricopa County elections officials saw the biggest ratio of fake-to-legitimate write-in candidates in recent memory: Among 90,433 entries in write-in slots, 1,738 were votes for legitimate write-in candidates.

Each fake entry cost Arizona counties money and manpower and slowed down the tabulation process, said Maricopa County Recorder Helen Purcell, who oversees elections.

“They think they’re making some kind of a statement or being cute,” Purcell said.

The rise of write-in candidates - over 90,000 in one small-turnout primary election, strikes me as a very interesting untold story about the election and a metric of voter frustration with the whole process.

So don't be afraid to go off the board -- it is your right, no matter how much it irritates petty bureaucrats.  Mal Reynolds for President!

In 2010, Arizona v0ters passed proposition 100, a 1% "temporary" sales tax increase that was meant to help fill in the budget hole created by the recession.  The tax was only to last 3 years.

It is pretty clear that by the end of 2013, when the tax expires, the rationale for the temporary tax cut will have passed.  Already the state's finances are improving and all signs are that by 2014 the economy and real estate market should be greatly recovered.

But, having got taxpayers used to paying the higher tax, supporters of big government and public employees unions have put a proposition on the ballot this year (204)  to make the 2010 tax increase permanent.  The tax extension will go to a mish-mash of new programs.

This is how the government spending ratchet works.  A "temporary" tax increase is justified in a fiscal emergency to fill in a recession-created hole.  Government insiders decide they like having more money, and make the tax permanent.  The new money is used to create brand new programs.  Then, in the next recession, when all these brand new programs are now "essential" and "beyond the reach of even the worst austerity", a new, even higher "temporary" tax increase is necessary.

From Byron Schlomach at Goldwater:

For this calculation, actuaries assume a rate of return on all the money invested. The assumed rate of return, or “discount rate”, makes a big difference in how big current liabilities might be. For example, if you invested enough now to pay back a $100 debt in 10 years and you expected a rate of return of 5 percent each year, you would need to invest $61.39. But, if you expected an 8 percent return each year, you would only need to invest $46.32 today.

Arizona’s government pension funds use a discount rate of either 8 or 8.25 percent, considerably higher than the 5 percent they have actually earned over the last decade. Consequently, while Arizona’s unfunded pension liabilities are officially $16 billion, a huge sum, the unfunded liabilities using the actual rate of return of 5 percent are more like $37 billion. That’s $5,800 for every man, woman, and child in the state.

I frequently write here that almost never does a month go by, even in a state where I have operated for over 10 years, that I don't discover yet another tax I owe or license I must obtain.

Today, I got a note from the state of Arizona that we must license our two septic pumping trucks with the state.  Already, these are licensed each year with the County in which they operate, a process that includes a fee (of course) and an inspection by the County.  Now I have to fill out a bunch of forms to send the exact same information to the state, with yet another fee (of course) and the need for another inspection each year by the County.  I asked if my current County license would suffice to cover the inspection, and I was told no.  So, to operate this truck in Arizona I must

• Fill out forms and send fee to County
• Get inspected by County
• Fill out forms with the same information as already sent to County and send fee to State
• Get inspected yet again by County, but this time on the state form
• Repeat every year

It is interesting to note that the state does nothing except file my form and bank the fee.  This is just another money and power grab -- more cash for the bureaucracy and yet another useless task (filing these forms and sending out compliance letters, etc) to justify their headcount.  Then the next time someone suggests "brutal cuts" to state budgets, everyone can scream that the rivers will run brown with sewage because the state won't have the people to collect all the paperwork that duplicates what the County already collects.

Just after wasting an hour or two of my time with this (and sending it to my managers to waste days of their time), I got a happy note from the US Census Bureau that I had been selected to file quarterly reports about my business (they have a special survey of the lodging business -- I presume they do this for other industries as well).  I wrote back:

To Whom It May Concern:

I am not sure what we have done wrong to be punished with this extra workload, but unless I hear back from you that this report is required of us by law under threat of some sort of dire consequence, we will not be filling it out.

We are a small company and only I, the President, am equipped to fill out this form.  We already fill out your annual survey and it is incredibly time-consuming for us, for it asks for data in ways we do not normally track it.  Further, it asks for our P&L in a form that does not match GAAP accounting, which causes all sorts of difficulties in completing it.  And we don’t normally compile results on a quarterly basis, only annual, so this report would be particularly onerous.  We actually have to run a business here.

Finally, I might add, I am loathe to send the government yet more data since this data will likely just be used as a justification to raise my taxes or increase our regulatory burden.

So no thanks.

PS- let's just assume the "you have a crappy job" jokes have already been made and move forward from there in the comments.

For those who may be interested, we are having a one-day conference on public-private partnerships for park operations on November 7 in Reno, Nevada.  The US Forest Service and those of us in the business have gotten a lot of inquiries from recreation agencies over the last year or so.  These folks are trying to keep parks open despite declining budgets.

The USFS figured out a way to do this over 30 years ago, and only now are other agencies starting to copy the model  (California State Parks just started using it this year, for example).  The USFS, like most agencies, charges a fee for the public to visit certain parks or to use campgrounds.  They found that they could not cover their high operating costs with just these user fees, and so had to use a lot of general fund money to keep the parks open.  Many complain that public recreation user fees are too high, but typically they cover only about half the agency's costs to run the park.  When general fund money started to go away, the USFS faced park closures, exactly the situation today in many state and local parks agencies.

The USFS found that private operators with a lower cost position and more flexibility could keep these parks open using just the user fees, and in fact actually pay the USFS some rent.  So instead of having to subsidize the park's operation with tax money, the parks began to generate funds for the USFS.

It took decades to get this right.  The USFS made mistakes in how they grouped parks into contracts, how they wrote the contracts, and how they did oversight.  The private companies made operating mistakes and some failed financially at awkward times, since when this program started there did not exist a pool of experienced operators.  But over the years, many of these problems have been worked out, and most privately-run sites operate to a standard at least as high as publicly-run parks.  Here in Arizona, three of the top five highest-rated public campgrounds are operated by private companies in the USFS program.

At this conference, both private operators and agency people experienced with this model will describe how it works as well as years of hard-won lessons learned.

The conference is free to most government agency officials, academics, and media and we have obtained a really inexpensive $49 hotel rate  (since by definition the agencies most interested in the model don't have much money).   The web site that describes the agenda and logistics is here.  Readers of this site who don't fit one of these categories but would still like to attend can email me at the link in the above site and I will get you in.

An interesting set of data I read the other day:

In 2011, the Arizona Health Care Cost Containment System, Arizona's Medicaid program, paid for 53 percent of the state's 84,979 births, while private insurance paid for 42 percent, according to state statistics. The remainder were paid for by individuals....

Sen. Sylvia Allen, R-Snowflake, estimated that including pre- and postnatal care, it costs Arizona about $7,500 per birth for a delivery with no complications. Using those estimates, the 2011 deliveries would have cost Arizona taxpayers nearly $338 million....

In 2010, 58 percent [of Arizonans] had private insurance and 18 percent were on Medicaid.

So, 18% of Arizonans are having 53% of all births.  Another way to put this is that the 18% of people who get this procedure from the government for free account for half the demand, despite the fact that these folks are the ones who, if rational, should be the least likely to have a lot of births because they presumably have the most difficulty affording an extra mouth to feed.

God forbid I start sounding like some crotchity Conservative, but I continue to be amazed that pregnancy is treated as an "emergency procedure."  It strikes me that unlike, say, cancer, individuals can choose to avoid this condition fairly easily if they can't afford it.  I certainly know my wife and I put FAR more deliberation into having children than we did any other decision in our lives.  There is a terrible tension here - no one wants to turn away an expectant mother and endanger her child, but freely giving away an expensive procedure without any sort of restrictions nearly begs for a baby boom.  Those who try to argue that Obamacare won't increase health care expenses (in other words, arguing that demand curves don't upward) only have to look at these numbers.

PS-  Apparently, our state legislature is appalled by these numbers.  This is the same legislature that has proposed about a zillion abortion restrictions over the last year.  It will be interesting to see if fiscal issues change anyone's thinking on the abortion issue now that there is suddenly a $7500+ incentive to allow an abortion.

Update -- Thinking about this, I think the 18%/53% comparison is directionally correct but the difference is exaggerated due to Medicare.  I doubt Medicare delivers many babies, but a large part of the AZ population is on Medicare.  If the numbers were reset to show the percentage of Arizonans of child-rearing age on Medicaid, the number would be north of 18% but likely well below 53%.

Arizona has always had a pretty intelligent rule that driving schools that have been certified by the state can actually give kids their written and driving tests.    They get a certificate they take to the DMV where they then get issued the physical license.   Kids who can't afford the school can certainly go into the DMV to take the tests, but since our DMV is swamped with insane waits, it is nice to have an alternative.

Until now.  Apparently, for reasons that entirely escape me except perhaps to pander to state employees' unions, all kids must now take their tests, written and driving, at the DMV.  So, the DMV's solution to insane waits is to... increase demand on their services.  Awesome.  Sounds eerily similar to Obamacare's solution to ER waits.

In my younger, more naive days, I would have drawn the following lesson from this story:  "Never create a business plan predicated on subsidy checks from the government.  They may stop at any time."  I still think this is mostly true, as FirstSolar is finding out.  But my sense is that a range of folks from GE to Kleiner Perkins still get their checks.  So one may cynically rewrite the rule: "Never create a business plan predicated on subsidy checks from the government unless you are confident you have the political connections to guarantee and expedite the payments."

It seems like local solar company perfect power tried to feed at the government trough without actually having sufficient clout in the corporate state.  Bad idea

About 100 Arizona homeowners who paid $4,500 up front for solar-power systems fear they may never get their rooftop panels after being left waiting for months by the installation company.

Angry homeowners are demanding their systems or refunds. The company, Perfect Power Solar, is blaming the delays on federal government red tape.

Perfect Power owner Lynn Paige said the company has cash-flow problems because energy grants that were supposed to provide substantial funding of the solar systems aren't being approved quickly enough. She pledged to deliver the systems or refund all customers by the end of the year.

Treasury officials would not comment on the situation. Government e-mails sent to Paige suggest Perfect Power's grant applications were incomplete. In them, officials point to problems with submissions and warn of potential denials.

Industry experts and owners of other solar companies in Arizona said that the grant program is fraught with risks for solar companies and that some built business models based on future payments from the government without the financial reserves to cope with delays. They describe the situation as a high-tech gamble that some companies lost.

Residential solar-power systems cost $15,000 to $40,000. The Section 1603 grant program, part of the American Recovery and Reinvestment Act, offered developers cash to offset 30 percent of the costs. Although the program was not available to homeowners, some companies tapped the grants to sell residential solar systems as leases. A company would install and own the system, then lease it to a homeowner.

Program rules required developers to complete installations before they could apply for reimbursement. But funding was not guaranteed, and even after systems were built, the government delayed approval of some applications and denied others.

If this was one of Kliener Perkins' companies, for example, Ray Lane would just call the White House and get his money released. If your solvency depends on continued flow of taxpayer cash, you better have the clout to keep the money flowing or you are likely to get hosed.  Bureaucracies tend to have default answers of "wait" and "no".  Those are the answers average people without pull are going to get.  The "yes" goes to those who cut through the red tape from the top.  These yeses, like the ones to Solyndra, only make it more likely everyone else get the "no" answer, as the agencies need to show they are being particularly diligent to offset the impression of sloppiness they get from the Solyndra-type cases.

Retroactively, the company's leadership has figured this out, that to survived at the government trough, they have to go political

Paige has asked customers not to file complaints or talk to the media about problems the company is facing.

"It has been very unhelpful ... that a few customers have chosen to write very negative letters to the BBB," she wrote in a May e-mail to customers.

Instead of filing complaints, Paige said, customers should write to Arizona U.S. Sens. John McCain and Jon Kyl to request their help in freeing up the government grant money and to pressure the Treasury Department....

That month, the BBB revoked Perfect Power's accreditation and gave the company an F rating. The company had 16 complaints filed against it the past year. The registrar shows four open complaints against Perfect Power; a fifth complaint was listed as settled or withdrawn.

Forget about the customers.  Let's just focus our attention on our two Senators.

This is pretty awesome.  Using Google's auto-suggest which is based on their most frequent searches, Renee DiResta created a rollover map of state stereotypes.  Here is Arizona's, the rest are here.  Via Flowing Data

I have picked up my family and moved to a rental house on the California coast for a month.  I am still working, but experimenting with getting out of town for the hot Arizona summers.  I may or may not take the opportunity to cut back on blogging for a month or so.  I haven't decided.

New taxes are frequently sold as protecting police, fire, and education, though these together represent barely 25% of all US government spending.  Where does the rest go?  It's a giant bait and switch, made worse by the fact that even within these categories, new headcount is more likely to be added in administrative and overhead roles rather than in promised functions such as "teachers".  This is the subject of my Forbes column this week:

There is a way to reconcile this:   While increases in education spending are sold to the public as a way to improve results in the classroom, in reality most of the new money and headcount are going to anything but increasing the number of teachers.

Let’s start with an example from the city of Phoenix, New York.  Why this town?  Am I cherry-picking?  In fact, I was looking for data on my home town of Phoenix, Arizona.  But I have come to discover that while school districts are really good at getting tomorrow’s cafeteria menu on the web, they are a little less diligent in giving equal transparency to their budget and staffing data.  But it turns out that Phoenix, New York, which I discovered when I was looking for my home town data, publishes a lovely summary of its budget data, so I will use it as an example that helps make my point.

The city’s budget summary for 2012-2013 is here.  Overall, they are proposing a 0.4% increase in spending for next year, which initially seems lean until one understands that they are projecting a 4% decline in enrollment, such that this still represents an increase in spending per pupil faster than inflation.  But the interesting part is the mix.

What are the two things politicians are always claiming they need extra money for?  Classroom instruction and infrastructure.  As you can see in this budget, only two categories of spending go down:  classroom instruction and facility maintenance and cleaning.  Administrative expenses increase 4% (effectively 8% per pupil) and employee benefits expenses increase just under 1% despite a total decline in staffing.  Though I am not very familiar with the program, one irony here is that the fastest growing category is the 8.7% growth (nearly 13% per pupil) in spending with BOCES, a New York initiative that was supposed to reduce administrative costs in public schools.  In other words, spending increases are going to everything except the areas which politicians promise.

I don’t think these trends are isolated to this one admittedly random example.  The Arizona auditor-general recently did a study on trends in education spending in the state.  They found exactly the same tendency to reduce classroom spending to pay for increases in administrative headcounts.

Read it all, as they say.

If it's June, it must be time for me to mock Arizona budget games.  To save re-writing the old post over and over, here is what I wrote several years ago.

In May of this year I got a form from the Arizona Department of Revenue that said my company was now large enough to make estimated sales tax pre-payments.  Some states do this when you are large enough - they don't like you holding their sales tax money a whole month until the reporting deadline, they want their cash in hand.  Its a pain, so I sighed, but we did it.  We prepaid estimated full-month June sales tax in mid-June as required, rather than in mid-July when the payment would normally be due.  Note that we still have to fill out all the sales tax reports in July, so paperwork is doubled, not to mention the extra work to reconcile between the estimate and actual results.

So this month, I was looking for the July pre-payment form.  I figured the July pre-payment must be due soon, so I called the Department of Revenue and asked where my form was.  They said there was no form for July.  The pre-payment is only one time.  I said, "its only for June?" and they said yes.  You can see the blank form online is hard-coded for June.

Then it dawned on me:  Arizona is on a June 30 fiscal year.  The entire point of this exercise is to pull July revenues into June to artificially inflate the prior fiscal year financials.  Wow - all those pious government workers artificially manipulating results just like an evil old corporation.  Because there is absolutely no other reason to do this for just one month.  The time value of money gained is dwarfed by the costs of changing your payment processing approach for just one month, and is certainly dwarfed if you consider the extra taxpayer effort required (which of course the government never does).

But it's even worse!  Because, in effect, this only worked one time -- the first time.  The first time they did this, they helped the fiscal year.  But now, pulling forward July this year just offsets losing the July revenues from last year.  So politicians have saddled us with a tax process that costs the government more money and the taxpayer more time and has no benefit beyond generating a slightly more positive press release about the budget for some politician several years ago (whatever year this was first implemented).

While this may be familiar territory for readers of this blog, I have a post up at the Privatization blog on the history of private operation of public parks.  In this article I quoted one of my favorite over-wrought criticisms of private operation of parks, this time from the San Francisco Chronicle:

The question is, how will these agreements work over time? If parks remain open using donations, what is the incentive for legislators to put money for parks in the general fund budget? And who is going to stop a rich crook or pot dealer from taking a park off the closure list and using it for fiendish pursuits?

LOL.  "Fiendish pursuits?"

I also had an article there a while back about government accounting systems and how they make such privatization efforts difficult:

Back when I was in the corporate world, "Make-Buy" decisions -- decisions as to whether the company should do some task itself or outsource it to companies with particular expertise or low costs in that area -- were quite routine.  Even in the corporate world, though, where accounting systems are built to produce product line profitability statements and to do activity-based costing, this kind of analysis is easy to get wrong (in particular, practitioners frequently confuse average versus marginal costs).

But if these analyses are tricky in the private world, they are almost impossible to do well in the public sphere.  Grady Gammage, a senior and highly respected research fellow at Arizona State University's Morrison Institute, has as much experience with public policy analysis as anyone in the state.  Several years ago, he spent months digging into the financial numbers of Arizona State Parks, with the full cooperation of that agency.  A critical question of the study was how much it actually cost to operate a park, vs. do all the other resource and grant management tasks the agency is asked to perform.  Despite a lot of effort by Gammage and his staff, he told me once that the best he could do was make an educated guess --plus or minus several million dollars -- as to how much of the Agency's budget is spent actually operating parks vs. performing other tasks.

The reasons that this is so hard is that the parks agency's budgeting process was not set up to determine true net operating gains and losses at parks.  It was set up, like most public accounting systems, to enforce accountability to different pools of money that have been allocated by the legislature for certain tasks.  This tends to lead to three classes of problems that cause public make-buy decisions, as well as ex post facto third-party analyses, so difficult.  Since I am most familiar with the parks world, I will discuss these three issues in the context of parks:

No, not the Affordable Care Act, though we need to get rid of that, too.  In this case I am talking about the Arizona Commerce Authority.  This is one of those ubiquitous local / state "development" efforts that mainly consists of handing out corporate welfare to a few well-connected companies who threaten to leave or build their new plant somewhere else.

Dru Stevenson at the Privatization blog has been nice enough to invite me to blog from time to time over at his place, despite the fact that we do not always agree.  But we are in total agreement on this effort:

Even from a conservative, free-market perspective, government subsidies for businesses distort markets, foster monopolies, undermine competition, and reduce efficiency.  The same complaints that business advocates make about the welfare system apply to government programs to help businesses - the vicious cycle of dependence, the lack of incentive to work hard or face difficult choices, the inevitable favoritism (some businesses get taxpayer subsidies, others miss out, and those that do have an unfair advantage over competitors who might otherwise win in a free marketplace).  It has a chilling effect on market-driven innovation, improvements in efficiency, or "creative destruction." The subsidies can cause inflation as the local market prices correct for the infusion of unearned money. The inherent risks in entrepreneurship get externalized onto taxpayers rather than internalized by those who hope to reap the profits if they get lucky.  The conflict-of-interest problem is not just that the businessmen will engage in whitewashed embezzlement, diverting funds to their own businesses or friend's businesses (or to their suppliers, in hopes of getting discounted inputs).

The problem is also that other firms - firms that might be more efficient, providing better goods and services at lower cost - face higher entry barriers when the existing holders of market share are bolstered by government handouts.  In other words, I see little difference in the morality of handouts for poor individuals/families and handouts for businesses.  There is a spiritual virtue in helping the poor, of course, but also a virtue in helping those who are hard-working and who have made sacrifices to become successful.  The problem for me is the unintended consequences of government subsidies for entities that are supposed to compete and succeed in a free market.

I encourage you to check it all out.

The reason this made his privatization blog is that Arizona has actually privatized this function to an independent business group.  Though an advocate of privatization in many realms, this makes me queasy for a couple of reasons:

• I can't get excited about privatizing an activity that should not be occurring, or is, as Stevenson so ably explains, actually detrimental
• I am comfortable privatizing operational things -- landscaping, running buildings, cleaning bathrooms, etc -- but privatizing the handing out of political patronage is an odd one for me and I don't really know how to think about it.  On the one hand, this is essentially what the PPACA (Obamacare, the other ACA) is doing with difficult decisions like determining which procedures should be on the must-cover list for insurers by putting them in the hands of independent groups.  But I have criticized those provisions of the PPACA for lack of accountability, and I believe the same arguments apply here

The only quibble I have with the criticism of the Arizona group is that, like many criticisms of privatization, it does not actually make a comparison to government-run efforts.  Sometimes even mistake-riddled private efforts can be better than disasterous public management.  For example this criticism:

According to Arizona PIRG's report, only two of the 13 incentive programs even track how many jobs or other benefits they generate -- and none disclose that information publicly. For all its business-savvy rhetoric, the ACA can't demonstrate performance if it doesn't track results. Only one program publicly discloses what companies promise to deliver for their subsidies. Worse still, only 4 of the 13 programs even disclose which companies received subsidies or how much. And when companies that receive subsidies fail to deliver on promised economic development benefits, the ACA can reclaim taxpayer subsidies for only one program, and there is no way for the public to see if this ever happens.

None of this is good, but note that for most similar state-run development programs, the number of programs that track their results is usually less than 2 in 13, the number is usually none.  And the fact that there is some sort of clawback provision on funds is better than exists in most state relocation and other subsidy programs.  In fact, most third-party reviews of state-run corporate relocation and plant location subsidy awards show that they universally fall well short of their pr0mised benefits, though this analysis is really hard to do because there is so little transparency in state activities of this sort.

My quibble, then, is that I am not sure the bad results here are a function of privatization or just the activity itself, as state-run efforts seem to do no better.

Update:  I have written before about government corporate subsidies and attempts at venture capital investment in the context of the "big shot" effect.  Many times I have come to suspect the biggest beneficiary of these programs is to the administrators themselves, who have no money of their own and wouldn't ever be trusted to manage a private portfolio but get to act as "big shots" with other peoples' money.  They get the psychic benefit of being little junior Donald Trumps.  This seems especially evident to me with Glendale, AZ, but seems to be an element of all these schemes.

Apparently an Arizona Catholic High School forfeited their state finals because the other team was playing *gasp* a girl at second base.  I am not really familiar with this sports league they are in -- it must be made up of smaller schools who choose not to join the AIA, which is the league most high schools (including ours) play in.

These are private schools in a private league, so I guess they can do whatever they want, but this just seems bizarre in the extreme.   I would guess that their players were irate.

My son plays in the smaller division of the AIA, and we run into teams that play girls from time to time in baseball and a bunch of schools that play girls on their soccer team (the rule generally is that girls can play on the boys team if there is no girls' equivalent of that sport at the school).  I have never before heard of another Catholic school having a problem with this, and given that this is Arizona, there are a lot of Catholic schools knocking about.

In fact, I always find it kind of cool to see girls out there.  I remember a few weeks ago we were playing a team who had a girl at third base who the boys thought was pretty attractive.  I laughed pretty hard when my son took a big chance to stretch a double into a triple.  I knew exactly what he was doing --he wanted to be on third base!

I suppose this will be a better object lesson for the Catholic boys than any gender-equality propaganda film.   Adopt Victorian attitudes about women, lose the chance to play for a state championship.

Back in August, when I wrote the first section of this guide, I was sitting in Long Island at a baseball recruiting camp.  Now that my son has completed the process, I want to share the rest of our experience for others who, like myself, have an athletic kid but no idea how the college sports recruiting process works.

Some reminders.  First, this is baseball-specific -- other sports work differently, I presume.  Second, this is the experience of a kid with good baseball skills but not good enough to have been scouted by a Division I baseball power like Texas or Arizona State.  Third, my son was not looking for scholarship money.  He was looking to play baseball in college, and to parlay his baseball talent into admission in a top academic school.  We were looking at division III (DIII from now on) schools like Williams, Amherst, Haverford, Pomona and a few DI Ivies.  Finally, our experience is heavily colored by the fact that he plays for one of the smallest high schools in the state, so getting attention and recruiting advice was much harder than if he had played for a baseball powerhouse.

Here were some of the lessons from our first episode:

• The DIII baseball recruiting process does not really even begin until the summer between Junior and Senior year.  My son landed a good spot without a single coach even knowing he existed as of June 1 before his Senior year of high school.  As late as January of his senior year he was still getting emails from coaches asking him if he might be interested in their school.
• In baseball, coaches mostly ignore high school stats and records unless it is a school with which they are very familiar.  They use their eyes to pick talent - ie from video or watching kids play at recruiting camps  (more on the video and camps in our first episode)
• As we will see in a minute, only about three things my son did in recruiting really mattered -- see the first episode for more detail on what we did
• He proactively contacted coaches to tell them he was interested
• He sent coaches a 5-10 minute video of himself pitching and hitting.  We made it from game film but I think most of the videos are just taken in a cage (you can see a bunch of these on YouTube, or email me and I will give you a link to ours)
• He went to several camps, which fell into two categories:  School camps, at schools he was really interested in; and multi-school camps run by third parties.  Of the latter, I am convinced the Headfirst Honor Roll camps are the best if you are interested in DIII or DI "smart schools" (e.g. Ivies, Duke, UVA, Stanford).

OK, so we left off with my son at a two-day baseball camp.  My son sent out emails afterwards to the coaches that were at the camp and from schools in which he was interested.  Basically he said "nice to have met you, still really interested in your school; now that you have seen me, I'd like to know what you think."  He had a few good conversations with coaches at the camp, but after that we really did not hear much until after Labor Day.  In retrospect, this delay is probably because the coaches have lots of camps and they want to synthesize their prospect list after all the camps before talking in earnest with players.

We really did not know what to expect.  Would coaches call, and if they did, what were the next steps?  It was only later that we learned what outcome we should be hoping to hear:  Basically, each coach is given some spots by the admissions office (the average seems to be 5 for the baseball guys).  If your kid can make that list, then two good things happen:  a) it means the coach wants the kid on the team. And b) it generally means the kid will get a good shove to help him through the admissions process, not an inconsequential thing at a school like Princeton or Amherst.

Here is what happened next.  This was just our experience, but since it was repeated at five or six schools, almost identically, its a good bet this is a fairly standard process at colleges with high admission requirements:

• The coach asks my son to send his transcript and SAT scores early to the Admissions office.
• The Admissions office vets these, and gives the coach a reading -- for us, that reading was generally "if you put this kid on your short list, coach, he very likely will get in."
• The coach then passed this message to my kid, saying there are no guarantees (etc. etc.) but all the kids with this same read from the admissions office who have been on his list have gotten in in the past.

BUT, there is a bit of a catch.  The coach will say that he can only put my kid on his list if we will commit to applying early decision.  Early decision (ED) means that one applies in November and hears in December (so well earlier than the April 1 regular admit date), but it is a binding commitment to attend if admitted.  This means that one can only apply to one school early decision.  Coaches aren't dumb.  They can't afford to waste the few recruiting spots they have on kids who aren't going to come.  So there is a quid pro quo - the coach will commit to the kid and help him through admissions, but the kid has to commit to the program.

But we only learned this later.  When coaches started calling, we weren't sure what to expect.   A couple called early to say that my son would not be on their list.  I have to give kudos to Coach Bradley from Princeton -- he called and told my son he wouldn't make the list.  It was not the news we wanted to hear, but he was up front and honest with us so we did not waste our time.  He was also the one who really explained all the stuff I wrote above, so we were more knowledgeable when other coaches called.

Soon, however, we were getting floods of interested contacts.  Many were from the coaches he had proactively contacted.  Some were from schools we never had heard of, and some were from very good schools but in parts of the country that weren't in his college search area (e.g. Kenyon, Grinnell, Carlton in the midwest).  Many of these coaches asked for him to come to campus (on our own dime, they were not paying) for a visit, including an overnight stay with someone on the team.  Eventually my son scheduled visits at Wesleyan, Bowdoin, Vassar, and Haverford.  He chose these in some cases for the school and in some cases because he really liked the coach.  All four of these offered him a spot on the short list for admissions if he was willing to go ED.

It was at this point that we hit the highlight of the whole process.  Like many parents, I just want to see my kid gain life skills.   My son will never be a good sales person.  He is really, really hesitant to cold call adults to ask them for something.  This process was good for him in that sense, because he began to see the fruits of having proactively cold-called these coaches earlier in the process.  But I still had to poke and prod him to do it.

However, with these other visits set up, my son was apparently thinking "these would all be good schools, but they are not in the top tier of my aspirations."  He was thinking about skipping ED, and trusting his grades and resume to the regular admissions process so he could still take a shot at his top choices (places like Princeton and Stanford).

He decided that the ideal choice for him would be Amherst - he loved the school, it was top-notch academically, had a great baseball tradition and an engaging coach.  That was the school he would be willing to go ED for.  He had met the Amherst coach on a school visit and at camp and Coach Hamm had been very nice.  But in the Fall,we had not heard anything from him.  (I have to insert a story here -- way back in March my son was on the Amherst campus and dropped by without an appointment at Coach Hamm's office.  At that point, Hamm did not know who my son was -- for all he knew he might have been the strikeout leader in T-ball.  But he spent a whole hour with Nic showing him around the facility and later at practice.)

This is where the breakthrough came.  Without my prodding or even involvement, my son contacted Coach Hamm one more time, to say he had not heard from Amherst but he was still really interested and he would be touring other nearby colleges in a week or so and would still love to meet with him.

We will never know exactly what happened.  Perhaps the coach was late in kicking off his recruiting.  Perhaps another kid on his list dropped out.  Perhaps he just wanted to sit back and see which kids were the hungriest.  Whatever the case, Coach Hamm wrote back immediately and said he would love to meet my son on campus  (he actually changed around a trip to be there).  The process described above played out (grades to the Admissions office, offer to be on the "list", ED application) and long story short, Nic will be at Amherst next year.

As I mentioned earlier, there was no money offered for baseball (nor could there be in leagues like the Ivies or the NESCAC which ban athletic scholarships).  Amherst has a great financial aid program, and there are great possibilities for scholarships, grants, and tuition discounts -- but these are offered to all admits, not just to athletes.

I hope this is helpful to some folks who are just starting this process -- I know it would have been a huge help to us to understand in advance.

Postscript:  One of the hardest things in the world is to get a good honest reading on your son's talent, particularly if he does not play for a top high school team.  People have told my son that he should not have gone DIII, he could be playing DI or he should be in front of pro scouts.  You have to take all this stuff with a grain of salt.  Sure, you don't want to cut off an opportunity, but on the flip side, sort of like the fox and the cheese, you don't want to lose a good thing chasing the illusion of something better (we know folks this happened to in other sports).

I don't know how to solve this, maybe people have experiences they can put in the comments.  For us, being from a small school, several summers playing club ball in a wood bat leagues with the big school kids finally convinced us our son could play at a high level (I say convinced us as parents, our son does not lack confidence so he always knew).

PS#2:  Fun Amherst facts

• Claim to be the country's oldest college baseball team
• The school and their mascot are named for an early advocate of biological warfare

This is a nice but probably meaningless gesture to protecting basic Constitutional rights (Hat tip to a reader)

Just a week after the Virginia legislature approved a law to refuse compliance with NDAA“indefinite detentions,” an Arizona law committing the Grand Canyon State to noncompliance with any attempted federal kidnapping under the NDAA now stands just a signature away from implementation.

I guess I would be more thrilled if I thought the state would have passed this if there were a Republican in the White House, but I can't make myself believe it.

I have written a number of times on the silliness of food miles and the locavore movement (here and here and here).  For some reason the energy and resource intensity of foods is being judged merely on one component - transportation of the end product - which actually is only a tiny competent of food costs (and thus their resource use).  Is it really more environmentally sensitive for us Phoenicians to grow our corn in the Arizona desert, where soils are unproductive and water must be imported from hundreds of miles away, rather than have it grown in the fertile soils of Iowa and trucked in?

Someone in the media, at least in Australia, finally notices:

TWO brands of olive oil, one from Australia, the other shipped 16,000 kilometres from Italy, sit on a supermarket shelf.

Most eco-friendly shoppers would reach for the Australian oil. But despite burning less fossil fuel to get here, it may not be better for the planet.

Contrary to popular belief, ''food miles'', or the distance food has travelled before we buy it, is a poor indicator of our food's total greenhouse gas emissions, or ''carbon footprint''.

More important is the way our food is farmed and produced, and how far we drive to buy it....

It turns out that stuff like economies of scale really matter

''Local food can often have a higher carbon footprint than food from afar,'' says principal researcher Brad Ridoutt.

He says even home-grown vegetables, with ''zero food miles'', do not necessarily have a smaller carbon footprint than those bought in the supermarket.

''With my veggies, I drive to Bunnings to buy fertiliser, and I go away for the weekend and forget to water them, and in the end I only harvest a few things that I can actually eat.

''By contrast, big producers, who can invest in the latest energy-efficient, water-efficient technology, and make use of all the parts of food, can be much more efficient,'' he says.

Of course, transporting food from producer to retailer still burns fossil fuels that release greenhouse gas emissions, in turn accelerating global warming. But freight emissions are only a fraction of those released during production, meaning even imported food, sustainably produced, can have a smaller carbon footprint than local alternatives.

Even the most rudimentary reading of economics should have given greenies a clue.  In commodity products like most foods, prices tend to be driven down to a point that they reflect resources (and their relative scarcity) that went into the product.  The cheapest foods tend to be those that use the least, and least scarce, resources in production.  So buying locally grown food, which often tends to carry a price premium, should have been a flashing red light that maybe this was not the least-resource-intensive choice.

As I mentioned the other day, I sometimes have this fantasy that we have some sort of libertarian streak in the Arizona Republican party.  The Goldwater Institute and Jeff Flake give me hope.  But then the Arizona legislature gets to work and my hopes are dashed.

A big national Republican issue is the excessive power Congress has delegated to the EPA and FDA to regulate and ban substances, from BPA to CO2.  So what do the Republicans do in AZ?  They propose a law to give an un-elected bureaucracy the power to willy nilly ban substances without a bit of legislative oversight.

The legislature had previously outlawed 30 chemicals that could be used to make the "bath salts"-type mixtures, and dropped another eight substances on the bill Governor Jan Brewer signed last month.

As Boca Raton Florida-based attorney Thomas Wright III told New Times shortly before Brewer signed the legislation, "To suggest they're putting a ban on bath salts is dumbing down the general public."

Republican state Senator Linda Gray is now explaining this to everyone, as she's proposed a new method to attempt banning "bath salts."

House Bill 2388 is the new hope, which would allow the state's Board of Pharmacy and the Department of Public Safety to ban the sales of chemical substances at their pleasure.

According to a Senate fact sheet, the pharmacy board "must make a formal finding that the chemical composition defined by the Board has a potential for abuse and submit the finding to DPS."

The pharmacy board then has to "consult" with DPS about its proposed rule, and that's that. The board just has to let the governor and the legislature know once a year which chemicals it's decided to ban.

So after all the concern about regulation voiced by Republicans about the EPA, they are giving even more sweeping powers to... the Board of Pharmacy and the Department of Public Safety?   This should be all the proof you need that the Coke and Pepsi party have equivalent authoritarian streaks.  As many other libertarians have observed, the Republicans have a healthy distrust of government, except when it comes to anyone such as the DPS or military that carries a gun, and then they are willing to hand over infinite trust and authority.

In many ways, this law is exactly like the environmental laws Republicans hate that require detailed analyses of potential harms but no counterveiling analysis of benefits.  In this case, the Pharmacy board is required to analyze the potential for abuse of chemicals but there is absolutely no language  requiring any consideration of the benefits of the substance's use or legality.  By the language of the law, if there is a potential for abuse, it must be banned no matter how otherwise useful the product is or could be.

Arizona House Bill 2549, which just passed its committee 30-0:

It is unlawful for any person, with intent to terrify, intimidate, threaten, harass, annoy or offend, to use ANY ELECTRONIC OR
DIGITAL DEVICE and use any obscene, lewd or profane language or suggest any lewd or lascivious act, or threaten to inflict physical harm to the person or property of any person.

I'm no lawyer, but it sure looks like, under this proposed law, my blogging that Sheriff Joe is an asshole will be illegal (if he is annoyed, and believe me he is annoyed by any criticism).

Note also that by the wording of the law, said communications are illegal in Arizona if it was originated here or received here.  That means if you folks in Colorado or California put something profane in an Internet comment, and it annoys some idiot in Arizona, you are technically in violation of the law.

Sometimes I have this fantasy that we have a Goldwater-libertarian streak among Arizona Republicans.  Obviously, this is just that, fantasy.

A few years ago I was asked to give a presentation in front of a group of Phoenix business leaders on climate and alternative energy.  I can't remember what particular group it was, but it was some public-private group that was heavily invested in advocating for local subsidies to promote strategic businesses - the sort of local MITI that most large cities have, that has this delusion that they can ramp up the city's growth by focusing public and private investment into a few selected industries (that they select, of course).

I told them that I thought their focus on solar manufacturing was dumb.  First, the whole idea that because Arizona is a good solar market meant that it should have some advantage in solar manufacturing made absolutely no sense.  This only makes sense for products with high transportation costs or a particular input cost that can be gotten more cheaply in one particular area (the location of aluminum manufacturing near cheap electricity in the Northwest comes to mind).  By the same logic all car manufacturers would be located in LA.

Second, I said that the whole solar business was completely driven by subsidies.  If the subsidies were to go away, the heart of the business would go away faster than pets.com.  I specifically mentioned First Solar in a positive context here, saying that though they where wholly dependent on subsidies for their revenues, they at least acknowledged as a corporate strategy they needed to get costs low enough to compete without subsidies.  (Someday, solar will get to that point, I hope, but I am skeptical that current approaches will yield the breakthrough, but that is another discussion).

If you want to understand the financial problems First Solar is having, let me show you four items.

First, from their 2010 annual report:

Geographic Risk. Our solar modules are presently predominantly sold to our customers for use in solar power systems concentrated in a single geographic region, Germany. This concentration of our sales in one geographic region exposes us to local economic risks and local public policy and regulatory risk in German.

This is way back in the notes on page 133.  By the way, I took a whole course in business school on reading financial reports.  Here is the key lesson for those not in the financial industry:  read them from the back.  Skip all the glossy crap at the front, go straight to the notes.

OK, here is the second bit of information.  Here is a world map of solar insolation, which is essentially the total solar energy available to produce power in a location when adjusted for atmosphere, weather, latitude, etc.

See Germany?  I won't insult your geographic knowledge by pointing at it, but much of Germany is in that yellow-green color which, for solar potential, means (in scientific terms) "it sucks."  Let's zoom in, and compare it to the US to get a feel for it (combined from two charts here)

Apparently the better sites in Germany have the same solar potential as ... Seattle!  The sliver of absolute best sites in Germany have approximately the same solar potential as Buffalo, NY.

So we have a company whose fortunes are dedicated almost entirely to selling solar panels into one of the most unpromising solar sites in the world.   Why is Germany buying so much solar?

OK, here is the third bit of information.  For years Germany had enormous feed-in tariffs (mandated above-market minimum prices)  for solar electricity:

The German feed-in tariff scheme has been in operation since 1991 and is regarded as one of the most successful in the world. In Germany, feed-in tariff rates are differentiated according to the source of the renewable energy. Separate tariffs are determined for biogas, biomass, hydroelectric, geothermal, solar and wind energy sources. The tariff paid for solar generators varies between EUR 45.7c/kWh and EUR 57.4c/kWh, depending on the capacity of the system and other design features. The tariff is greater for generators that are attached to the roof of a building or structure and greater again for generators that are attached to another part of a building. In Germany, the feed-in tariff is paid for a period of 20 years

Note the language from several years ago where "most successful" is determined without references to costs.

0.574 Euros per kWh is equal to about $0.75 today and even more several years ago when exchange rates were higher.  Remember this is a wholesale price, and should be compared to a $0.04 to $0.06 wholesale electricity price in the US  (I use US numbers to as its not clear to me Europe has a particularly competitive wholesale market.  The French have some sort of fixed price system set around $0.06).

However one wants to look at it, these are enormous subsidies.  People putting up solar panels in Germany were getting paid 10-15x what a market price for the same electricity might have been.

Finally, here is the fourth piece of evidence leading to First Solar's woes.  In 2010 and 2011 Germany, whose consumers began to balk at paying the highest electricity rates in the world in order to subsidize the method of electrical generation least suitable to Germany, began substantially cutting these tariffs.  In 2012 they will cut them even further:

German Environment Minister Norbert Roettgen and Economy Minister Philipp Roesler are set to hold a press conference on Thursday to outline the government's new approach on subsidies. However, the indications are that the cuts will be heavier than the market has been expecting:

• a 30% cut in the feed-in-tariff (FIT) to 13.5 cents per kilowatt hour for new large solar installations

• and a 20% cut in the FIT to 19.5 cents for new small plants

The market has of course been expecting cuts in the German FIT system. However, this news is decidedly worse than expected and likely to continue to pressure solar stocks - particularly those such as Yingli (YGE) with a significant exposure to German solar demand.

From a peak of $0.75 per kWh, Germany will now pay $0.255 per kWh for smaller installations, still four times the market price for wholesale electricity but only a third of what they paid during First Solar's boom years.  As I wrote yesterday, Germany was essentially paying $2 for milk from brown cows and $25 for milk from black cows.  This can't be sustained.

If one assumes a wholesale electricity price of 6 cents, First Solar's German customers were getting a 92% subsidy.  Sure, First Solar now faces other problems like Chinese competition and they have shot themselves in the foot on quality, but at the end of the day the only way they can survive is to convince some other government to turn on the taxpayer money spigot to keep them in business.  I am hoping we in Arizona and the US will not be the suckers, but I fear that we will.  One can argue the projects I discussed the other day, including the one where we taxpayers loaned First Solar the money to sell its solar panels to its own subsidiary, are evidence of this.  My guess is that First Solar will be throwing a lot of money and time towards Obama, praying for his re-election.

Update:  I found a bit more time to give some more background on First Solar and German feed in tariffs here.

If I had the time, I would love to try to research and list every subsidy recieved by a company like First Solar.  Here are just a few:

First Solar is an Arizona-based manufacturer of solar panels. In 2010, the Obama administration awarded the company $16.3 million to expand its factory in Ohio -- a subsidy Democratic Gov. Ted Strickland touted in his failed re-election bid that year.

Five weeks before the 2010 election, Strickland announced more than a million dollars in job training grants to First Solar. The Ohio Department of Development also lent First Solar $5 million, and the state's Air Quality Development Authority gave the company an additional $10 million loan.

After First Solar pocketed this $17.3 million in government grants and $15 million in government loans, Ex-Im entered the scene.

In September 2011, Ex-Im approved $455.7 million in loan guarantees to subsidize the sale of solar panels to two solar farms in Canada. That means if the solar farm ever defaults, the taxpayers pick up the tab, ensuring First Solar gets paid.

But the buyer, in this case, was First Solar.

A small corporation called St. Clair Solar owned the solar farm and was the Canadian company buying First Solar's panels. But St. Clair Solar was a wholly owned subsidiary of First Solar. So, basically, First Solar was shipping its own solar panels from Ohio to a solar farm it owned in Canada, and the U.S. taxpayers were subsidizing this "export."

But this is just a few of them, even on this deal.  For example, the Canadian solar farm very likely picked up federal and provincial subsidies from Canada, and even more likely gets some kind of subsidized feed-in tariff (meaning that an above-market wholesale rate is paid for its electricity).  This sort of feed-in tariff, which is paid by electricity consumers, is wholly un-transparent and likely makes up the large bulk of solar subsidies.   I know the state of Arizona threw a lot of money at First Solar as well (which is headquartered in the Phoenix area.)

During First Solar's boom years, the company was mainly supported by sales to Germany, probably one of the worst solar sites in the world after perhaps Seattle.  But the German government mandated feed-in tariffs for solar that were five times (or more) the market price for electricity.  It was like saying that, while milk generally goes for $2 a gallon, the government mandated that milk from  brown cows could be sold for $10 a gallon, and what's more, consumers had to buy it.

The House Your Tax Money Built

Dear America,

Have fun resetting all those clocks this weekend.  Sorry about the hour you lose.

Love, Arizona

PS-  we have to have something to make up for Sheriff Joe, and not farting with DST eases the pain a bit.  See my article here about why DST is an outdated concept that no longer saves energy -- it turns out that the nature of electricity demand has changed over the last 100 years since DST was first tried.  Who would have thought?  Anyway, this research essentially demonstrates that Arizona is at the forefront of modern, science-based environmentalism.

From today's AZ Republic

Women have wrinkles, pores and curves. And there's a movement across the world to make sure advertisers can no longer pretend otherwise.

Now, that movement has come to Arizona.

House Bill 2793, proposed by Rep. Katie Hobbs, D-Phoenix, would require advertisers who alter or enhance a photo to put a disclaimer on that ad alerting customers that "Postproduction techniques were made to alter the appearance in this advertisement. When using this product, similar results may not be achieved."

Really?  You mean my wife isn't going to suddenly look like Demi Moore if she uses Dove soap?  Next you are going to tell me that drinking Miller Lite does not cause me to suddenly be surrounded by hot women.

Update:  Apprarently this is about empowering women by treating them like moronic rubes

"As an organization, we are all about empowering women and eliminating discrimination," Richard said. "We want to make sure that young women get a better start and better self-image."

He said girls need to understand that these photos aren't all real. Someone has airbrushed out the model's wrinkles and pores, or put a woman's head on top of a computer-generated perfect body.

"You need to disclose that so our young women don't grow up thinking a poreless face is possible," he said. "That's not the way that I think anyone wants to raise their daughters."

Also, apparently its the 100th anniversary of Arizona statehood.  I am kind of proud of my state for making this anniversary a virtually ignored event.