Coyote Blog

In the movie Wag the Dog, and American president and a movie producer faked a war in Albania to divert political attention form a domestic scandal.  They created fake but riveting film of desperate Albanians caught up in the war.  I always wondered how confused the people of Albania, sitting in their peaceful homes, were by these images if they saw them on CNN.

I live in Arizona, not Albania, but I am just as confused.  I have lived in Phoenix for 10 years.  I run a public contact business all over the state, including at least one location in sight of the Mexican border. And I am confused as can be when I read stuff like this:

Nevertheless, here it goes from a supporter of legal immigration: how are we to make sense of the current Arizona debate? One should show concern about some elements of the law, but only in the context of the desperation of the citizens of Arizona. And one should show some skepticism concerning mounting liberal anguish, so often expressed by those whose daily lives are completely unaffected by the revolutionary demographic, cultural, and legal transformations occurring in the American Southwest.

WTF?  I read this all the time.  I am told there is a war going on around me and people are being devastated, but I never see it.  And nobody I know ever sees it directly.  It is always a "someone else"  (maybe, as I suggested in an earlier post, it is all happening to that lady who put her cat in the microwave to dry.")

I won't spend all day with VDH's post, but there are a couple of other things he writes that seem nuts, given his reputation for being pretty smart

Why Wave the Flag of the Country I Don't Wish to Return To?

Have you ever been to a Saint Patrick's Day parade in Boston or Chicago? To Columbus Day parade in New York?  So its OK for Europeans to show some affinity for the mother country even as they reside in the US, but not Mexicans?

Look, I get irritated to no end by people who come here for freedom and prosperity and then immediately start advocating for and voting for steps that undermine both.   But that's not an immigrant issue, its a Constitutional one, where we have allowed courts to rewrite protections against government encroachment.

Substitute New York in 1860 for Arizona in 2010 and Irish for Mexican, and you would see the exact same dynamics at work, except that Arizona in 2010 is a lot more peaceful than New York in 1860.

California's meltdown is instructive. If about half the nation's illegal aliens reside in the state, and its problems are in at least in some part attributable to soaring costs in educating hundreds of thousands of non-English-speaking students, a growing number of aliens in prison and the criminal justice system, real problems of collecting off-the-books income and payroll taxes, expanding entitlements, and unsustainable social services, do we wish to avoid its model?

Really?  One word:  Texas.  Texas has the same immigration issues and a MUCH longer border than California.  California's problems are its profligate and anti-business government, something that Conservatives tend to point out a lot in about a million comparisons with Texas, except of course when they want to blame it all on immigration instead.

First, there is the simplicity of the argument. One either wishes or does not wish existing law to be enforced. If the answer is no, and citizens can pick and chose which laws they would like to obey, in theory why should we have to pay taxes or respect the speed limit? Note that liberal Democrats do not suggest that we overturn immigration law and de jure open the border "” only that we continue to do that de facto.

This is hilarious in the context of Arizona.  While the AZ legislature has been passing this law, it has been passing a series of other laws to give the big FU to federal law.  These bills include not enforcing federal insurance mandates in AZ, not enforcing EPA CO2 regulations in AZ, ignoring federal law on commercialization of rest areas, ignoring the REAL ID act etc.  For God sakes this is the state whose Republican governor in the 1990's sent the national guard to take over the Grand Canyon from the feds.  To piously assert this is all about enforcing federal law and that it is wrong to ignore some laws but enforce others is absurd.  This country has a long history of popular nullification of bad laws -- the 55-mile an hour speed limit was nullified by rampant non-compliance long before it was repealed.

I understand there are complexities in immigration, the most important of which is the conflict between a generous safety net and open immigration.  But note that while many Conservatives will say this, none of them are proposing any changes to safety net eligibility vis a vis immigrants.  When all they ask for is for the borders to be locked down, then all these arguments just seem like window dressing to the true desire to say "my family got in, now its time to lock the door."

As is usual when I make an immigration post (wherein I am supportive of open immigration and suspicious of gung-ho enforcement efforts) I got mail saying that the real concern here is the rule of law.   People inevitably want to inform me that this immigration is ILLEGAL (usually in caps) and that these immigrants are BREAKING THE LAW and that the law cannot be enforced unevenly.

First, I am happy to listen to this argument from any commenter who has never broken the speed limit or done a rolling stop at a stop sign.

Second, I would like to offer the rule of law folks, especially those on the right side of the aisle, a thought problem:  Soon, it will be illegal to not purchase a health insurance policy that meets specifications set by Congress.  It is anticipated, however, given relatively low fines, that many people will break this law and not obtain health insurance.   This failure will be ILLEGAL.  These people will be criminals.  Do those of you who seek higher penalties, more robust enforcement, police sweeps, and reduced standards of probable cause for people committing the crime of illegal immigration also plan to seek the same higher penalties for lawbreakers who do not buy an insurance policy?   After all, as you have said, this is not about the law itself but respect for the rule of law.

By your immigration logic, we should be ruthless about lawbreakers who do not have the right insurance policy.  We should encourage the Minutemen to patrol for people without health insurance -- after all, they have said that their concern is with people breaking the law, not immigration or Mexicans per se.  There should be sweeps where people can be arrested for suspicion of not having health insurance, just as they can be arrested under our new AZ law for suspicion that they do not have a green card.

If there is a difference, please explain it to me.  I understand that you may be opposed to open immigration or high immigration rates or immigration by poor uneducated people or whatever.  If so, fine, we disagree -- but stop saying that this is all about the rule of law, or telling me we can't pick and choose what laws we violate.  Because we do the latter all the time.  Our willingness to challenge the state is a large part of American exceptionalism.

PS- Just to avoid misunderstandings from trolls who do not usually read this site, of course I do not advocate the above for health insurance violations.  Just as I don't for Mexicans seeking a better life in this country without obtaining a license to do so from the government.

Disclosure: I have several good friends who are illegal immigrants.  They are wonderful, hard-working people who have been in this country for years.  If we were to conduct tests of people's acceptability to be present in this country, they would pass with scores far ahead of many US citizens.

Update:  I find the argument that open immigration and an overly-generous welfare state can't coexist to be moderately compelling, though I don't see why we could tie citizenship narrowly to receiving these benefits.  I have problems saying that a government license in the form of a green card is required for mere presence in the country.  I have no problem imposing this licensing requirement for receipt of unearned goodies.

The blaming of private companies for government procurement errors is one I deal with frequently at my privatization blog.  This seems to be a particularly egregious example:

Maricopa County officials can't sue the Sheriff's Office for buying a $465,000 bus without their approval, so now they want to sue the bus company.

Precisely why Motor Coach Industries would be sued over the internal squabble remains unclear.

The county has maintained in this months-long bus battle that Sheriff Arpaio's office bought the vehicle with Jail Enhancement funds, when it should have used a typical county procurement process.

From the bus company's point of view, though, the Sheriff's Office was a customer with cash. For the county to demand a full refund, without so much as a deduction for the depreciation, seems like a raw deal for MCI.

Cari Gerchick, spokeswoman for the county, says text of the lawsuit won't be released until after the Board of Supervisors votes on it at Monday's meeting. She could not provide the legal justification for the expected lawsuit, beyond saying that MCI "should have known" the MCSO had not followed the county's procurement process.

Get that?  The company should have known that our County's chief law enforcement officer was not following the law.  This is obviously an absurd contention, but further the company had two geographic disadvantages:  1.  Not being from AZ, they don't know just how unethical our sheriff really is; and 2.  Being from Chicago, even if they had recognized unethical behavior, they would have assumed it was perfectly legal

I wrote a while back that I had a real hard time getting excited about either McCain or Hayworth in this year' s AZ senate race.  But despite my disaffection from both candidates, I may have to suck it up and vote for one or the other.  Via Valley Fever:

Michael Moore Says He's Not Coming Back to Arizona Until State "Elects a Democrat as Senator"

Moore is nothing if not able to suppress his beliefs when money is on the line, so I have a guess we will continue to see him at Sundance despite the lack of a Utah Democrat in the Senate.

Over five years ago, I wrote this article about retirees in RV's who have become the new American nomads.  Many of these folks work for my company each season, getting wages and a camping site in exchange for taking care of campgrounds. This is often called work camping.

A reader sent me this video from the NY Times discussing the same phenomenon  (here is the print article).  The only difference is these folks work for the government, which means that unlike at private companies, they don't get paid.  I find it kind of fascinating that the NY Times thinks it's a wonderful innovation that "cash-strapped state governments" help balance the budget on the backs of free labor from older people.  Can you imagine what the headlines would be if all the facts were changed, but the entity was a manufacturing company rather than a state park?  It would have been torches and pitchforks  (it is illegal except in narrow cases for private companies to accept free labor -- the government of course exempts itself from this requirement, as it does from much of labor law).

I actually think my article was better.  The way work campers tend to disperse over the summer and then congregate over the winter in a couple of gathering spots (Colorado River in AZ, South Texas, Florida) reminds me a lot of the plains Indian tribes.  And the challenges of a nomadic lifestyle when the world wants you to have a permanent address are interesting, and there are whole business models being crafted to solve these problems.

Anyway, our company hires nearly 500 of these folks every year, and are huge supporters of this lifestyle (and we pay!)   If you are interested, check out our websites above and sign up for our job newsletter.

Many states managed to grow state spending in the last decade far faster than inflation and population growth, soaking up every new dime in bubble-generated tax revenue they could.   It may seem like states were forced to make a lot of hard decisions last year, but in fact they were sheltered from really dealing with the full measure of their own fiscal problems by large influxes of Federal "stimulus" money.  As I demonstrated way back in January of 2009, most of the stimulus was actually ear-marked not for the mythical shovel read project, but for "stabilization" of state and federal budgets.  This is a couple of months old, but still applies:

A historic nosedive in state tax collections extended into the third quarter of the year, and only an infusion of federal economic stimulus money has averted widespread program cuts and worker layoffs.
Tax collections from July through September dropped an average of 8.3% from a year earlier in the eight states that release up-to-date monthly tax figures, a USA TODAY survey found. New York's tax collections fell 8.9%, despite an income tax hike earlier this year. States reporting partial third-quarter results showed a similar downward spiral in tax collections, including 13.2% drop in Arizona.

Federal stimulus money has protected states from making big cuts in the number of government workers, in aid to schools or in spending on Medicaid, the health care program for the poor. But most federal stimulus money ends in December 2010.

This is not a new trend, from Tad DeHaven of Cato:

According to the Goldwater Institute, over a third of the AZ state budget is federal money.

How can there possibly be any accountability for how this is spent, though it actually is larger than the amount raised by state taxes?  If we want the government to buy us goodies in this state, we should at least pay for them ourselves and not take money from others.  By the way, every time I raise this argument, someone says "well our state pays more federal taxes than it gets back."  First, every state says this so it can't possibly be true in every case.  Second, it's a terrible practice from the standpoint of accountability.

Related, via Matt Welch:

The biggest single national political donor in the country during the 2007-08 election cycle, according to OpenSecrets.org, was the overwhelmingly Democrat-supporting teachers union the National Education Association. What category of worker was the biggest single beneficiary of stimulus spending? Public school teachers. Who, according to Vice President Joe Biden, accounted for 325,000 of the first 640,000 jobs "created or saved." While it's true that teachers are Americans (even my brother), in the vast majority of these cases, the jobs in question weren't "created," just maintained, since it is nearly impossible to fire public school teachers.

From the AZ Republic, which just can't stop itself from shamelessly cheerleading any effort to spend billions on rail in Phoenix (perhaps the world's worst candidate for rail transit given its density and distribution of businesses).

Enough people would board a train in the Valley's suburbs that a future commuter-rail system would be as popular as some of the busiest lines in the West, new studies have found.

Well, that's a low bar.

A trio of yearlong rail studies, in nearly final form, indicates commuter rail could carry almost 18,000 passengers a day by 2030. Planners at the Maricopa Association of Governments

say, based on the findings, they favor a 105-mile, X-shaped system that could feature 33 stations and cost roughly $1.5 billion. That's a little more than the Valley's 20-mile, light-rail starter line.

If this was presented to me as a business opportunity, I would have had them stop right there.   Even before inevitable cost overruns and over-confidence in ridership, even with the supporters' numbers, they want $1.5 billion to carry 18,000 people a day.   That is a capital cost of $83,000+ per daily rider, beating the old record of Phoenix light rail which cost around $75,000 per daily rider.

Planners assume the trains will recoup about 40 percent of their expenses, based on the national average for similar service. The average fare would be about $6 to $7, Wallace said, although no detailed study has gone into fares. Generally, rates would go up the farther the trip.

Can you imagine any other investor in the world other than the government making an investment knowing that in the best case of its strongest supporters revenues will only cover 40% of costs?  And why should the rest of us subsidize folks who live in outlying areas to commute?  They moved to those areas in large part because housing was cheap and cost of living was low, with the knowlege they had a long commute.  So those of us with the forsight to live close to work have to subsidize them?  This is a really valuable service for them but they can't even pay half the cost?

Further, lets look at those cost estimates.  If we get 18,000 a day on weekdays and a third that on weekends, that yields 5 million round trips.  Given an 8% interest rate over 30 years, the capital charge is $134 million a year before overruns.  That means the fare would have to be $27 round trip or $13.50 one way just to cover the capital cost alone, without even considering operating costs.

This means their figures are nuts.  $6-$7 one-way fares barely covers 40% of the capital costs, much less the operating expenses.  We are talking about an offering that is deep in the red.  $13 round trip at 5,000,000 round trips equals $65,000,000 of revenue.  That means that taxpayers will have to foot the bill for all the operating costs  ($30 million?  $60 million) and at least $69 million of capital charges.   It is not unfair to assume that this would punch a minimum $100 million hole each year in the government's budget that we will have to make up with taxes.

Update: Gotta achnowlege this bit of sanity in the AZ Republic comments from "astonished"

Light rail is such a boondoggle. It's expensive to build and always runs at a loss. It is very hard to change the routes to respond to ridership needs. It's a vanity project for hip liberals.

If public transportation is a goal, then get some buses going. Buses are flexible, cost effective, cheap to run and maintain, and if ridership changes, you just change the routes and schedules.

Being a red state, maybe if AZ fails before CA, it will be less likely that Congress and the Administration will do some sort of bailout to head off local accountability.  It sure seems we might be able to pull off an early failure:

Arizona state government has managed to blow through a $700 million loan from the Bank of America in less than a week, and that wasn't even enough to keep things going.According to Treasurer Dean Martin, his office had to dip into internal sources to come up with the extra $73 million the state needed just to keep the lights on.

"Government spending in Arizona is out of control. We are more than three-quarters of $1 billion in the red for daily operations," Martin says. "As we predicted in our forecasts, just one week after setting up essentially the largest line of credit in state history, the state of Arizona has maxed it out. The governor and Legislature need to [rein] in excessive spending; we can no longer afford to continue spending more than we make."

The state is currently about $1.6 billion in the hole, and the $700 million loan the state spent last week is just the beginning of excessive spending of borrowed money.

For years it has aggravated me that politicians claim the need to make command and control decisions on water conservation, and they run advertisements trying to shame me for my water use, all while the state government has subsidized some of the cheapest water in the country.

This is crazy!   If we are really drawing down reservoirs like Lake Mead and Lake Powell as well as underground aquafers, then raise the price until demand matches a sustainable supply level.  Duh.

But water is one of those commodities like gasoline that politicians love to meddle with prices for populist ends.  So we continue to have cheap water, and as a result we have 1) no incentive to find new sources and 2) no incentive to conserve.  As I pointed out in the earlier post linked above, we here in the desert have water less than half the price of Seattle!.  All while the government pays farmers over $100 million a year to grow water-hungry crops in the Arizona desert, using price-subsidized water.

Well, miracle of miracles, and for the first time in my experience, the AZ Republic actually published an article focusing on the absurdity of water subsidies. The article focuses narrowly on the cross-subsidy of our municipal power and water authority, charging higher electric rates to keep water rates lower.

Unfortunately, this is only a small part of the effective subsidy, for like most of the economically ignorant the Republic focuses only on the difference between the current price and cost (which is about $33 million).  The real subsidy is the difference between the current price and the true market clearing price at a sustainable supply rate (sustainability defined here as the rate that maintains reservoir, both above and below the ground, levels constant or rising over the long term.)  This is a MUCH larger number than $33 million.

Via a reader, from the AZ Republic:

A Phoenix ordinance banning charity dining halls in residential neighborhoods withstood a challenge by a north-central Phoenix church.

Retired Arizona Supreme Court Justice Robert Corcoran, serving as a hearing officer, ruled Monday that feeding the homeless at a place of worship can be banned by city ordinance. The decision affects all Phoenix churches with underlying residential zoning.

Over the summer, city officials maintained that CrossRoads United Methodist Church, 7901 N. Central Ave., violated Phoenix zoning code by feeding the poor and homeless on its property, a use that can only occur in commercial or industrial zones.

You will be relieved to know that this has nothing to do with a wealthy people fearing that their Xanax-induced equilibrium will be upset by actually seeing a poor person in their neighborhood.   We are assured as such by Paul Barnes, a "neighborhood activist" who presumably participated in the suit to stop the Church from holding pancake prayer-breakfasts:

"It's not a problem with homeless people in wealthy neighborhoods. That would be a matter of prejudice. This issue would be setting churches up to avoid zoning ordinances."

Wow, I am so relieved.  And we all know what a problem it is when churches are organized solely to evade zoning regulations.  Why, just last week the First Baptist Church and Gas Station as well as the United Methodist Church and Topless Bar opened right in my neighborhood.

You will be happy to know as well that the Constitution in no way limits the government in any way when it wants to regulate your property:

In a 19-page opinion, [Judge] Corcoran said the city can restrict where the homeless and poor can be fed and that zoning regulations apply to everyone equally. Additionally, he said that trumping land-use regulations is not a constitutional right.

Whew - yet another assault on the rights of government bureaucrats has been bravely turned aside.

Update: More random embedding of ads by the Republic.  They are putting them between words in the paragraph now.  RRRRRR.  Hopefully it is gone now.

This may see obvious to those of you in the rest of the country, but there are real problems with treating a man uniquely allowed to use force against the citizenry like a rock star.  And that is how certain segments of the local population treat Sheriff Joe Arpaio.   As one abuse of power after another is revealed, his supporters respond  "Isn't he so colorful, just like an old-time western sheriff."

For the rest of us his schtick gets old.  The county has spent millions defending lawsuit after lawsuit against him.  The INS has stripped him of his power to track down illegal immigrants, but he still ventures out on sweeps to arrest folks for driving while Mexican, arresting more people of Mexican decent than I though even existed in certain neighborhoods.  He has arrested reporters who criticized him, and arrested people who applauded a speaker who criticized him.  He even launched a mini-coup attempt against the County which employs him, invading the County offices and taking over a computer system that contained emails he had been unable to subpoena.  In the latter case, the County had to seek a restraining order against its own Sheriff!

Unfortunately, Arpaio's indifference to due process and individual rights obviously has percolated to the entire staff.  Here is the most recent craziness -- during  a trial, a Sheriff's deputy starts going through the defendant's attorney's papers, and takes some of them  (all of which were attorney-client privileged).

The explanation was that the documents had not been screened for contraband and weapons, so the deputy had to take (what looks like a couple of sheets of paper) away to study them to make sure there was no gun  stapled to them or something.  This so lame I am not sure how they can even say it with a straight face, but true to form the Sheriff's office is rallying around its own.  More in the AZ Republic.

Why is it the organizations (ie police departments) whom we entrust with uniquely scary power to use force on us citizens tend to have the least well developed internal checks and accountability processes?

Update: Random example of police not getting prosecuted for abuse of power, from today's news.  Folks like Miller and Radley Balko can fill their blogs with these type cases every day and not get them all.

I really like our AZ Congressman Jeff Flake -- the libertarian goodness of Ron Paul without the weirdness and connections to racism.  This is pretty funny, from his site (ht:  Radley Balko)

Washington, D.C., Oct 28 - Republican Congressman Jeff Flake, who represents Arizona's Sixth District, today released the following statement regarding his vote against H.Res.784, a bill "honoring the 2560th anniversary of the birth of Confucius and recognizing his invaluable contributions to philosophy and social and political thought."

"He who spends time passing trivial legislation may find himself out of time to read healthcare bill," said Flake.

Via the AZ Republic, the excepting of which will probably bring in all kinds of spam code into this post no matter how hard I try to get rid of it:

Arizona wildlife officials are investigating the shooting death of a prairie dog in southern Arizona.

Apparently the state is irritated because this prairie dog was brought to the state as part of a program to bring more plague-infested nuisance rodents onto our land - on purpose!

The prairie dog was one of more than 100 transported from New Mexico in October 2008 in hopes of reintroducing the indigenous species to southern Arizona.

From the AZ Republic, on the yet-again-revived public option:

Health-care legislation heading for the Senate floor will give millions of Americans the option of purchasing government-run insurance coverage, Majority Leader Harry Reid announced Monday, although he stopped short of claiming the 60 votes needed to pass a plan steeped in controversy.  Reid, D-Nev., said individual states would have the choice of opting out of the program. Details of how it would work were still sketchy, but states would get a year after the 2013 phase-in of the new health-care plan to decide whether to participate.

And federal taxes for citizens of opt-out states will be reduced, right?  No way.  This opt-out is a joke.  Its a bit like saying that every individual has the right to opt out of public education in favor of a private school.  Sure they do -- they don't have to attend the public school, but they have to pay for it anyway in their taxes.

Update: Sorry, the AZ Republic has made it almost freaking impossible to excerpt from their online articles without bringing over a load of cr*p code.

Under what theory of government is this a proper activity of government with our tax dollars?

Gov. Jan Brewer took the stage Thursday with rocker and restaurateur Alice Cooper to persuade Arizonans that dining out is good for the state. Announcing a three-month public-awareness campaign called Dine 4 AZ, they said going to restaurants supports businesses and helps preserve jobs. Brewer noted that restaurants generate 10 percent of Arizona's tax revenues.

"We are working hard to lead the Grand Canyon State forward and out of this recession, and Dine 4 AZ fits perfectly into our plan," she said. "Please treat your family to a meal and we'll get through this together."

It is just seriously freaking frustrating to see the government spend my money promoting other people's businesses.   And since when has dining out been a sign of patriotism?  Why is buying food from a restaurant more stimulative than buying food from a supermarket? On the plus side of all this is the spectacle of politicians taking the stage with Phoenix favorite son Alice Cooper to make a policy speech.  The only thing that would be better would be for the governor to appear with Phoenix-area resident Jenna Jamison to promote the, uh, stimulative effect of spending an evening at your local strip club.

Postscript - by the way, there is almost no point in challenging the numbers in such a stupid article, but I will bet anything I own that restaurants do not generate 10 percent of Arizona's tax revenues.  Update - In fact, based on this report, restaurants were 9.4% of sales tax collections which in turn are 61% of major state taxes, which makes restaurants and bars about 5.7% of state tax revenue, which I will admit is higher than I would have guessed but still well off the number in the article.

Update #2: OK, I am probably overworking this, but the same report referenced above showed Arizona individual income taxes dropping 32.4% in 2009, presumably due to large drops in income.  However, sales taxes only dropped 13.9% in that period.  And within sales taxes, restaurant and bar sales taxes only dropped 5.8%.  I say only, because except for some stable utility and telecom categories, this is the lowest drop of any business sector subject to sales taxes.   General retail down 12.2%.  Amusements down 8.1%.  Hotel/Motel down 11.9%.  So, in response to the down economy, the state government has thrown their weight behind shifting business to... the single retail category that has been least hurt by the recession.

Via the AZ Republic:

House Democrats narrowly won a key test vote Friday on sweeping legislation designed to combat global warming and usher in a new era of cleaner energy. Republicans said the bill included the largest tax increase in American history.

The vote was 217-205 to advance the White House-backed legislation to the floor, and 30 Democrats defected, a reflection of the controversy the bill sparked.

Interestingly, Democrats are selling the bill by saying it won't work.  Since a cap-and-trade scheme can only succeed if it changes consumer consumption patters, it must impose costs on consumers to work.  But...

"The bill contains provisions to protect consumers, keep costs low, help sensitive industries transition to a clean energy economy and promote domestic emission reduction efforts," the White House in a statement of support for the legislation.

Next stop, Senate, where the bill has even more of an uphill climb.

Update: Final tally on the main vote was 219-212.  Of course absolutely no one who voted "yea" has any idea what they voted for, since no one can even produce a copy of the bill, much less attest that he or she read it.

From the AZ Republic:

A local contestant on "The Biggest Loser," NBC's hit weight-loss show, will be the featured speaker at the Maricopa Chamber of Commerce's Third Annual Keynote Speaker Event on May 27.

Maricopa resident Sione Fa, 28, is expected to share his journey to a healthy, new lifestyle during the fundraising event at Harrah's Ak-Chin Casino Resort.

Really?  You mean Gary Coleman wasn'g available.  Do business owners really have time for this stuff?

Via the AZ Republic:

Fritz Henderson, president and chief operating officer of GM, said that choosing the bankruptcy route would further erode consumer confidence in the automaker and "we want them to be confident in their ability to buy our cars and trucks."

In order to save the value of their executive stock portfolios, which are a large part of their compensation, auto executives are promoting the line now that consumers will for some reason stop buying GM cars if the company is operating under Chapter 11 protection.

The auto-makers real strategy is to get some kind of money, almost any amount will do, from the government ASAP.  It really doesn't matter how much, because with their cash burn rate almost any amount Congress gives them right now will not last much more than 6 months, and certainly will not be enough to reach recovery (their requests go up by a few billion each time they appear in front of Congress).  Automakers are facing potentially several years of recession, and any real restructuring would take 5 years or more (and even that is doubtful since the industry has had 30 years of notice on these issues and have not done anything).  But if they get some cash, then there will be a psychological pull for Congress to put in more.  They will say -- well, you've already put in $5 billion.  If you don't put in another X billion, that first 5 will have been wasted  (few people understand that "sunk costs are sunk" and Congress is no exception).  This is how expensive transit projects are funded.

The position that customers will stop buying the product due to some loss of confidence in chapter 11 doesn't hold up.  Most every airline traveler has flown on an airline operating under chapter 11 in the last 10 years or so, and if I can have enough confidence that an aircraft is being adequately maintained in bankruptcy, I can probably muster the courage to buy a car.  I presume the issue here is downstream warranty support.  But this is about the last thing that would ever be slashed in a chapter 11.   For God sakes, airlines have never even substantially disavowed frequent flier miles in a bankruptcy, surely a much more obvious target than warranty repairs.

I would argue that it is uncertainty that is driving any loss of confidence  (in fact, sales have plummeted already, ahead of any chapter 11).  A chapter 11 filing would actually increase certainty, as those running the receivership could quickly communicate principles to be followed in the bankruptcy, such as protection of warranties. Right now, people have a perception that in a bankruptcy, GM would go *poof*.  Once it actually files a chapter 11, the media and executives would switch modes from fanning panic to actually explaining how receivership works.

In fact, if there is any fear on the issue of long-term warranty support, it is being created by executives like Henderson who are fanning the flames of fear in a brinkmanship game to try to avoid chapter 11.  If he were really worried about this loss of confidence, he and other auto executives would be out there assuring people that their cars and servicing and dealers will also survive a chapter 11 filing.  But he is not.  This is totally disingenuous.

More on why GM should be allowed to fail here and here.

From the AZ Republic:

A 27-year-old Avondale man has been arrested on suspicion of causing
a massive power outage last summer in Goodyear's Estrella community.

The outage knocked out power to nearly 4,000 homes for 19 hours June 18, 2007, when Goodyear's high reached 115 degrees....

According to police, officers arrested the suspect on a tip from the
public. He reportedly told investigators he cut down the pole because
he enjoyed the sparks it made.

I thought this was kind of funny, from the false hysteria department.  The Arizona Republic begins ominously:

If you're already mad about gas prices, prepare to get madder.  Besides paying prices at the pump that were unthinkable a few months
ago, many consumers also are getting ripped off by the pump itself.

Uh, Oh.  I can see it coming.  The AZ Republic has smoked out more evil doings from the oil industry.  I shudder to think what horrors await.

About 9 percent, or about 2,000, of the 20,400 gas pumps inspected this
fiscal year by the Arizona Department of Weights and Measures since
July 1, 2007, failed to pass muster.

Oh my freaking God!  Every fill up, I have a one in 11 chance of my gas being measured wrong.  I just bet those oil companies are coming out in the night to tweak the pump so I get hosed. 

Half of those were malfunctioning to the detriment of customers.

See!  There you go!  Half are to the detriment of customers! 

Oh.  Wait a minute.  Doesn't that mean the other half are to the benefit of customers?  Why would those oil guys be doing that?  This sure isn't a bunch of very smart conspirators.  Could it be that this is just the result of random drift in a measurement device, with the direction of drift equally distributed between "reads high" and "reads low"?

As it turns out, I worked for a very large flow measurement instrument maker for several years.  For a variety of reasons, flow measurement devices can drift or can be mis-calibrated.  To fail the state standard, the meter has to be off about 2.5%, which is about 6 tablespoons to the gallon.  State governments have taken on the task of making sure commercial weights and measures are accurate, and though I think this could be done privately, I don't find it a terribly offensive government task.  Having taken this task on, it is reasonable to question whether it is doing its oversight job well.  But let's not try to turn this into a consumer nightmare by only discussing one half of the normal distribution of outcomes.

Post title stolen from an old Dilbert cartoon.

An announcement in the AZ Republic yesterday:

Best-selling author Bill McKibben, who wrote one of the first books on
global warming, will be the featured speaker at a roundtable discussion
on sustainability Tuesday afternoon at the Burton Barr Central Library...

In his latest book, McKibben argues that accelerated cycles of economic
expansion have brought the world to the brink of environmental
disaster.

Instead, he suggests that we should be creating smaller, more sustainable local economies. 

I have never fully understood the word "sustainability," but in this context, doesn't it mean "poorer"?  It strikes me that McKibben is trying to sell poverty, or at least advocating that everyone voluntarily become poorer.  He is successful with middle-class soccer moms at the library only to the extent that he hides this fact and calls poverty something else  -- in this case "smaller, more sustainable local economies."

By the way, does jetting from city to city across the country to sell his book make him a sustainability expert?  If he believes what he says, why doesn't he just sell his book within a 50-mile radius of his home?

Sustainability is always for thee and not for me.

Arizona can be a weird place, politically.  Sometimes it can be among the most libertarian, part of the Goldwater legacy, and sometimes it can be absurdly statist, for example in the huge popular support our individual-rights-abusing Sheriff Arpaio enjoys.  But this is certainly good to see:

Arizona has some powerful lawmakers in Washington, including Republican presidential candidate John McCain.

But when it comes to pork-barrel spending, otherwise known as earmarks, the state isn't very powerful. In fact, it ranks last.

That's mostly because three of the state's 10 lawmakers in Washington,
McCain and House Republicans Jeff Flake and John Shadegg, refuse to ask
for any federal money
for local projects. Another Arizona Republican, Sen. Jon Kyl, strictly
limits his earmark requests. They all say the earmark process wastes
taxpayer money and desperately needs reform. But other Arizona
lawmakers counter that their colleagues' stance hurts the state.

rizona, one of the fastest growing states in the nation, will receive
$18.70 per capita in federal earmarks this fiscal year. By comparison,
Alaska, with roughly a 10th of Arizona's population, is set to receive
$506.34 per capita, the highest in the nation, according to Taxpayers for Common Sense, a watchdog group that tracks earmarks.

Alaska receives about three times as much as Arizona in actual dollars,
$346 million to $119 million. That means Arizona gets less money for
water projects, bridge repairs, road construction and rural clinics.

Good for us.  While I have my problems with McCain, Shadegg and Flake are two of my favorite people in Congress. 

The article, since it comes from the Republic, of course fails to really explain the issues well.  It tries to get the reader confused into thinking that zero earmarks means zero government spending in the state:

"When you have reformers and purists, you end up not getting a
reasonable share of money coming out, which hurts the state," said
James Thurber, director of the Center for Congressional and
Presidential Studies at American University. "When you're holier than
thou, you don't get much of the money."

This is, of course, silly.  Having no earmarks merely means that the huge amounts of money the Feds spend are doled out by existing statute and by the bureaucracy, rather than the whim of individual Congress persons trying to pay back favors to large donors.

update:  see the bad half of AZ here.

Russell Pearce is the Arizona legislator who authored the AZ employer sanctions law.  Remember, that's the law that requires, among other things, employers to check the immigration status of current employees using an INS system that has federal rules in place that make it illegal to use this system to... check the immigration status of current employees.  His plan is to reduce a major source of labor in the Arizona economy which, by the way, has a 3.5%-4.1% unemployment rate over the last year, the lowest level in 30 years. 

Anyway, now Mr. Pearce has decided to target babies:

The newest front in the battle over illegal immigration is dragging health-care workers into the fray.

The Arizona Hospital and Healthcare Association is trying to kill a
proposal by Rep. Russell Pearce, R-Mesa, that would require its members
to check the citizenship of patients who deliver babies at Arizona
facilities.

If neither of the parents can prove citizenship, the hospital would be barred from issuing a regular birth certificate.

Babies of parents who are here legally but not citizens also would be denied regular birth certificates.

Beyond the obvious concerns about driving moms away from medical care for their deliveries, Mr. Pearce has a teeny-tiny Constitutional issue he must deal with in the 14th Amendment:

All persons born or naturalized in the United States, and subject to
the jurisdiction thereof, are citizens of the United States and of the
State wherein they reside.

Mr. Pearce is hoping that "subject to the jurisdiction thereof" can be stretched to say that such persons do not include immigrants.  In fact, the Supreme Court does not seem to have ruled on this specific issue (corrections welcome in comments) but historically they have been extremely loath to place limits on this.  And no one except Mr. Pearce and perhaps a few of his immediate family members believes that barring citizenship to children of legal immigrants will pass Constitutional muster.  And I am pretty sure that no matter how these questions come out, disallowing birth certificates would never survive a court challenge.  I don't think the immigrants' home country would issue a birth certificate in such a case so we would be creating people without a country.

This Tuesday, Arizona's death penalty goes into effect for businesses that knowingly hire workers who have not been licensed to work by the US Government.  Employers must use the e-Verify system the Federal government has in place to confirm which human beings are allowed by the federal government to work in this country and which people businesses are not allowed to employ.  Businesses that don't face loss of their business license (in itself a bit of government permission to perform consensual commerce I should not have to obtain).

There are any number of ironies in this law:

• The Arizona government has resisted applying the same tight standards to receipt of government benefits, meaning the state is more comfortable with immigrants seeking government handouts than gainful employment.
• The state of Arizona resists asking for any sort of ID from voters.  This means that the official position of the state of Arizona is that it is less concerned about illegal immigrants voting and receiving benefits than it is about making sure these immigrants don't support themselves by working.  This is exactly the opposite of what a sane proposal would look like. (and here)
• In the past, we have used Arizona drivers licenses to verify citizenship.  By implementing this law, the Arizona Government has said that an Arizona driver's license is not sufficient proof of citizenship.  Unable to maintain the integrity of their own system (e.g. the drivers license system) the state has effectively thrown up its hands and dumped the problem on employers
• The e-verify system, which the law requires businesses use, currently disappears in 11 months.
• The law requires that the e-Verify system be used for both current and new employees.  It is, however, illegal under federal law to use the e-Verify system on current employees.
• In fact, the e-Verify system may only be used within 3 days of hire -- use it earlier or later, and one is violating the law.  In a particular bit of comedy, it is illegal to use the e-Verify system to vet people in the hiring process.  The government wants you to entirely complete the expensive hiring process before you find out the person is illegal to hire.
• There are apparently no new penalties for hiring illegal immigrants at your house (since there is no business license to lose).  State legislators did not want to personally lose access to low-cost house cleaning and landscaping help.  We're legislators for God sakes -- we aren't supposed to pay the cost of our dumb laws!

I have criticized the AZ Republic a lot, but they have pretty comprehensive coverage on this new law here and here.

Update:  Typical of the government, the e-Verify registration site is down right now.

Update #2:  It appears Arizona is taking a page from California's book.  California often passes regulations that it hopes businesses will follow nationally rather than go through the expense of creating different products or product packaging for California vs. the other states.  Arizona may be doing something of the same thing, since the terms of use for e-Verify require that if a business uses e-Verify, it must use if for all employees.  Therefore, a business that has any employees in Arizona is technically required to use this system for all employees nationwide.

Update #3:  By the way, I guess I have never made my interest in this issue clear.  We do not hire any illegal immigrants.  Since most of our positions require employees to live on site in their own RV, it is seldom an issue since the average illegal immigrant does not own an RV.  We have always done all of our I-9 homework, even though the government stopped auditing I-9's about 8 years ago.  We have in fact been asked about five times by foreigners to hire them under the table without having the licenses and papers they need from the US government -- all of them have been Canadian.

The AZ Republic, long-time cheerleader for our current light rail project, writes another ode to commuter rail.  Today's love note is on the Albuquerque commuter rails system.

Sharon Hedrich heads out a little before 7 each morning for the 20-mile
trip to the law office where she works in downtown Albuquerque. She
used to leave home earlier for the dreaded crawl down the city's
congested freeway.

Driving to work could take 40 minutes or
more, depending on the number of emergencies stalling traffic. Now, she
boards a commuter train, settles into a plush red seat and spends the
half-hour ride reading a novel.

She says the train saves her aggravation - and money.

"I put 7 miles a day on my car instead of 50," Hedrich said recently as
the train zipped toward Albuquerque, New Mexico's largest city. "It's
50 bucks a month for me to ride this. I couldn't even get two tanks of
gas for that."

I am just all aglow for Sharon.  But does the project make sense for the taxpayers of the city and the state (and probably nation) that funded it?  Well, we don't know.  Because the AZ Republic writes 56 paragraphs lauding the system without once telling us anything about the system performance.  Does it cover its costs?  Are city roads visibly less congested?  Is there a net energy savings?  Is there measurably less pollution?  We don't know.  All we know is that three people, Geronimo Trujillo, Briana Duran, and Sharon, like it. 

Well, let's see if we can do the analysis that the Republic couldn't manage.  We are told it has 3000 presumably round-trip riders a day, and the fare for these riders is $50 per month.  That's $150,000 of revenue a month or $1.8 million a year.  How much does it take to operate?  Well, we are not told by the Republic and the Albuquerque authority ties itself in pretzels avoiding the question in this FAQ (question 1) comparing apples to oranges and lemons and bananas and any other fruit that might divert our attention.  But I can absolutely guarantee that it costs a hell of a lot more than $1.8 million.  I am not sure that covers the fuel bill, but it certainly does not cover wages, fuel, maintenance and whatever the state is paying the private owner of the rails for trackage rights. 

Let's see if we can find an analog that does disclose its costs to the public.  The commuter rail system in Northern Virginia called the VRE is about twice as long and carries about twice the passengers as the Albuquerque system.  Its costs are $55.4 million per year, so we can conservatively assume that the Albuquerque system is costing perhaps $20 million a year, a figure that exceeds its revenues by a factor of 11x.  That equates to a taxpayer subsidy of $6,000 per rider per year, which is not atypical for these systems.

And this ignores the capital cost.  Unbelievably, the article does actually mention the capital cost in the 36th paragraph, which is $135 million.  That is $45,000 per rider, or enough to buy two Prius's for each rider.

So Sharon Hedrich is happy?  Of course she is freaking happy.  The taxpayers paid $45,000 up front costs and $6,000 per year so she can save 43 miles of driving a day.  Assuming she has a 20 mpg car, pays $3 a gallon for gas, and rides the train to work 250 days a year, taxpayers are paying $6,000 a year to save Sharon $1,612.50 a year in gas.  If we want to consider gas plus wear and tear on her car at 45 cents per mile, taxpayers are paying $6,000 a year to save Sharon $4,837.50 per year.   The taxpayers would have been better off -- by a LOT -- buying her a Prius and paying her expenses to drive than buying and operating a train for her.  This is consistent with my past number crunching on other urban rail systems here and here.

Does the Republic mention these problems?  Sort of:

The system endured the typical raps against a big public-works project:
It fell behind schedule, an anti-tax foundation called it a bad idea
and there were some startup problems.

Dang those tax foundation guys - always getting in the way of progress!  Thank god such a great idea as subsidizing Sharon "endured" these Luddites.

By the way, I am a long-time train watcher and model railroader.  I love trains.  And, all things being equal and if everything was free in the world, I would love to have more commuter rail trains. Unfortunately, all things are not free.  And in most cases, particularly low-density cities outside the northeast, rail tends to be the most expensive possible option.  As a libertarian, I would rather the government just not appropriate this money in the first place.  But given that they are insisting on spending $135 million plus $20 million a year on transportation, nearly any other conceiveable project would have gotten more bang for the buck.

Update:  Below is a picture of Brianna Duran riding in an empty rail car.  It's good Albuquerque is keeping all those empty seats off the highway.

Update 2: Here is the predictable response to the empty seat snark:  Well, it's the people's fault for not choosing such an obviously superior mode of transport.  Wrong.  Its the government's fault for not taking people's preferences into account when spending all that taxpayer money.  A government that adjusts itself to the citizens is a Democracy.  A government that demands citizens adjust themselves to the government is fascism.

Update #3:  I am getting email about the government subsidy of highways.  In theory, this is not supposed to be a subsidy.  The large gasoline prices we pay at the pump are supposed to be for highway funds.  This is actually a pretty intelligent way to pay for roads, because it does a decent job at matching use to fees, with a bit of a penalty thrown in for low mpg cars.  To the extent that gas taxes do not match road costs, I am all for eliminating any subsidy and making them match with the right gas tax.  But I know whatever subsidy there is is not as high as for this rail.  Using the numbers for this example, applied to 100 million US commuters, would imply a capital cost of $4.5 trillion and a yearly operating subsidy of $600 billion.  And this would only cover commuting.  Remember, the people in the story can't give up their cars - rail lines only run a few places.  These costs would be to allow commuters to give up their cars part of the time -- about the same number of roads and cars would still be necessary.