Coyote Blog

From a commenter at Instapundit

It seems to me that whenever there is a threat of a government shutdown, it’s portrayed as just this side of a tsunami-level disaster. When government workers – teachers, sanitation workers, etc – go on strike, it’s portrayed as the middle-class worker sticking up for himself. Why is it that a government shut-down caused by a desire to spend less money is different than a government shutdown caused by workers failing to do their jobs – isn’t the effect the same?

Its been a long day here.  As many of your know, my company privately operates public recreation facilities.  We operate nearly 150 campgrounds and other parks on US Forest Service land, helping to reduce the cost of these facilities and keep them open despite declining budgets.

Because we pay all the expenses for the campgrounds and do not accept any government money (we operate solely using the gate fees paid by visitors), keeping these facilities open is not at all dependent on government appropriations.  As such, the facilities we operate have never been subject to closure in past government shut downs.  The Grand Canyon has to close because it is operated with government employees, but the public recreation areas we operate do not.

Or at least that was the position of the Forest Service until last night.  However, this morning, the USFS began to take the position we had to close, despite the fact that the law does not require it.  Through most of the day I have had to be on the phone pushing back against this bad idea.

At first, I thought it was some sort of scheme to purposefully make the cost of the shutdown worse, by shutting down public recreation facilities that did not need to be shut down.  However, I have come to understand that this is likely driven by a need for "consistency."  Senior administration officials were concerned it would be confusing to the public if the National Park Service was totally closed but a substantial number of US Forest Service sites remained open.  I have spent a lot of time trying to convince folks that it was dumb to close literally thousands of the most popular recreation sites in the country merely in the name of mindless consistency.

Hopefully we will win the day, and we are starting to see some evidence the Forest Service will see it our way, and allow private operators who do not take Federal money or use Federal employees to remain open serving the public during the busy Easter week.

The importance of government largess to sports, including publicly-funded stadiums, has been a frequent topic on this blog.  Recently, the CEO of the Fiesta Bowl John Junker was fired for a number of alleged violations related to campaign contributions and favors for politicians.  This story is virtually inevitable.

The Fiesta Bowl benefits enormously from being one of the four BCS bowl games.  In fact, the difference economically between being one of the four BCS bowl games and being one of the numerous other bowls is roughly the difference between the United States and, say, Peru.   To give one a sense, the prize money for winning a BCS bowl is about $18 million.  The prize money for all other bowl games varies from $325,000 to, at most, $4.25 million.

But the Fiesta Bowl would almost certainly not be one of the four BCS bowls were it not for the city of Glendale building a half billion dollar stadium to be shared by our NFL franchise and the Fiesta Bowl.  It would almost be shocking if a few tens of thousands of dollars were not directed to politicians given the stakes on the table.  And it should be no surprise that politicians in Glendale received many of the payments.

Postscript:  Junker's attorney's comments are telling.  This was all about doing what it takes to make the Fiesta Bowl a big player.   And I can tell you, from all the grief I have gotten for defending a Constitutional principle at the expense of holding on to a sports franchise, there is a strong public lobby for the ends justifying the means when sports are involved.  Anyway, here is the quote:

While Junker declined SI.com's request to be interviewed for this story, his lawyer, Stephen M. Dichter, could not resist issuing an e-mailed reminder that it was his client "who took the Fiesta Bowl from a postseason game created so [that] Frank Kush's ASU Sun Devils would have a game in which they could be showcased while they and the rest of the WAC were completely ignored by the national media to its present position as one of the four pillars of the Bowl Championship Series."

Obama budget director Jacob Lew, who wrote this lucid statement about the Social Security "Trust Fund" back in 2000

"These [trust fund] balances are available to finance future benefit payments and other trust fund expenditures—but only in a bookkeeping sense. These funds are not set up to be pension funds, like the funds of private pension plans. They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures. The existence of large trust fund balances, therefore, does not, by itself, have any impact on the Government's ability to pay benefits." [bold added]

Needless to say, he has changed his tune now that he is being paid to shout "all is well" as enabler-in-chief of Obama's spending habit.

So the Republicans in Wisconsin eliminated collective bargaining for public unions except on wages.  The Democratic Secretary of State, fully within the law, is delaying making the law official for 10 days.  This 10 days is giving us a great picture of the problem with public unions.

Why?  Because the 10 days was explicitly to allow cities and counties to cut new deals with unions, since all deals before the law is passed are grandfathered.  The fact that many city and county governments are rushing to take advantage of this window just proves that public collective bargaining is broken -- no one is looking after the taxpayers.  I have argued that public unions are basically on the same side of the table with governments in bargaining sessions.  What could be better proof?  If government officials really cared about the taxpayer or their fiduciary responsibility, why in the world would they be rushing to cut above-market deals with government employees when they won't have to do so in just 10 days?  Government officials are colluding with unions to race to transfer more wealth from taxpayers to workers before the window for such subsidies shuts.

Vermont Tiger raises a great point about the Volt:  (ht Maggies Farm)

The Volt comes with a manufacturer's suggested retail price of $40,280 and a rebate from Uncle Sam of $7500. GM only plans to make 10,000 Volts this year; and there aren't enough of them to go around. So, naturally, dealers are marking them up – some by much more than the retail amount. One Florida dealer is asking $65,590 (see Motor Trend for details). You might be able to get one on eBay for around $48,000 – after rebate that gets you right back to list price. Hmmm….

No car dealer or manufacturer would offer a rebate on a product that is in backorder status for the foreseeable future. But that's exactly what your government is doing. Even if you believe that there is a compelling reason for the government to want us all to shift to partially electric cars, it's clear that no incentive is required to sell all 10,000 cars available this year since people are buying them at markups which counteract the incentive. In this case the rebate dollars go to dealer margin. Note deficit cutting opportunity.

$75,000,000 down the drain to subsidize upper-middle-class people who want to make a statement about themselves.  Yet another public investment in the self-esteem of the wealthy and our rulers.  In ancient Rome they built coliseums.  In the middle ages they built cathedrals.   In communist countries they built giant statues of their leaders and tractor plants.  Today we subsidize quasi-electric cars and windmills.  None of it makes much sense as way to spend the average person's money, but it makes the elite feel really, really good about themselves.  One wonders what the cumulative historic bill has been for ego maintenance of our rulers.

My new column, second in a series, is up at Forbes.  It is the second of a three-part series, and looks at incentives issues with Obamacare.  A few excerpts:

In the late 1960s, as part of the Great Society program, the US government constructed huge government housing complexes, with the goal of guaranteeing that everyone, no matter how poor, would have access to housing.  By the turn of the century, most of these complexes had succumbed to the wrecking ball  -- the era of large public housing complexes was over.

Why?  Well, there were a lot of reasons the program failed, but a big one was faulty incentives.  By getting free housing, recipients had no "skin in the game," no ownership, no financial participation in their housing.  As a result, many treated their taxpayer-funded abodes with contempt.  Why not?  They weren't paying for it.  And if the property was in good shape at the end of the lease, they didn't get any extra money.

I often compare Obamacare to the great failed public housing projects by warning folks that government health care is going to be much worse.    With the housing projects, we taxpayers paid large sums of money but only a few actually had to live in the horrible government apartments -- at least most of us were able to keep our own homes.  With Obamacare, it is going to cost us even more money, and we are all going to have to move, figuratively, into the projects.

If we are all forced to have the same, low deductible, first-dollar health plans, what incentive is one going to have to stay out of the health care system, even for something minor?

I also talk about the incentive for drug development

Look around the world today -- not one country with a government health care system pays drug reimbursement rates at a level that provides any incentive for new drug development.  In fact, almost all of the world's health care R&D is paid for by Americans.  What happens when politicians, trying to close an exploding health care spending hole in the Federal budget, do exactly what every other country in the world has done and use their power to drive drug prices down to marginal cost?

In fact, to be confident that there will continue to be health care innovation in the future at all, one has to believe that the US Government will act completely differenlty in running its government health care system than does every other government in the world, despite the fact it will have the incentives to behave identically to all of them.  Is this a bet you feel good about?

Via Megan McArdle

A New York court ruled last month that all income earned by a New Canaan, Conn., couple is subject to New York state taxes because they own a summer home on Long Island they used only a few times a year. They have been hit with an additional tax bill of $1.06 million.Tax experts and real estate brokers say this ruling could boost the tax bill for thousands of business executives who own New York City apartments they use only occasionally. It could also hurt sales in the Hamptons and New York's other vacation-home communities.

"People will think twice about spending any summer time in New York," says Robert Willens, a New York-based tax consultant. "The amount of tax they could be subjected to is likely to outweigh the benefit."...

Judge Joseph Pinto, a New York administrative law judge, made the novel ruling in a 2009 case that was affirmed last month on appeal by the New York state tax appeals tribunal. Mr. Pinto seized on what is meant by a permanent residence, which is the benchmark for whether all, or just the in-state portion, of an individual's income is subject to New York state tax.

Mr. Pinto ruled that the couple's Long Island vacation home qualifies under the law as a permanent abode because it was suitable for living year-round--whether or not the couple actually stayed in the home wasn't relevant. Under the ruling, if an owner doesn't spend a single a day in a home it could still count toward a permanent residence.

I didn't really need a reason to not buy a home in the Hamptons, but just in case I were tempted, this would pretty much kill any such desire.  This, however, strikes me as one of those games (like trade wars) that New York has not thought out well before starting.  My admittedly uneducated guess from knowing some New Yorkers is that more New Yorkers own 2nd homes in Connecticut than vice versa.  If New York state is going to lose a tit for tat tax war if this is the case.

Chinese exceptionalism, or do we just notice it because it is so large.  I clicked through to this chart from a link on Instapundit that said to note how Chinese fertility fell off the map.  When I watched the video though, what I saw was ALL the fertility rates falling at roughly the same pace, at roughly the same point.  The lesson seems to be that fertility tends to drop with increasing mortality, wealth, and technology -- which is what many of us have been saying in response to Paul Ehrlich for years.

I am probably over-reading this, but I am sensitive that there is a sort of storyline of Chinese exceptionalism -- due to their taking some sort of totalitarian third way -- that seems to be admired among certain US socialists and environmentalists and Thomas Friedman.  This hearkens back to all the admiration for the Japanese MITI-managed economy, right before their economy crashed for two decades or so.

China flourishes because it has a culture, never fully suppressed by Mao, whose people take well and quickly to capitalism -- much of the development around Southeast Asia in previous decades was led by expat Chinese.  The totalitarianism that is, depressingly, so admired by the US intelligentsia is just going to lead China into the abyss.  Already we can see bubbles emerging due to the state's forced mispricing of key economic inputs, from capital to oil.  The burden of spending on triumphalist projects like super-bridges and mega-buildings and Olympics and high speed trains is going to start appearing over the next few years.

Here is my prediction:  The Chinese are going to have a bubble burst that will rival any such economic explosion that we have seen in the last century.  I have been looking at the situation and by a number of metrics, the bubble is already huge.  I would bet against China, but the problem (as with all shorts) is timing.  Government officials, if they really dedicate themselves to the task, can extend bubbles for a long time.  Even in the US, which is less authritarian and more transparent, it can be argued that Fannie and Freddie and Barnie Frank and Alan Greenspan helped push off the reckoning by at least 5 years.   Of course, the longer you push it off, the worse it gets.  Which means the Chinese bubble is going to be a doozy.

Postscript: Here is a nice example -- admiration from US environmentalists for China gutting their economy to make arbitrary goals

It's interesting to note the dedication China has displaying in achieving its [energy efficency] target -- shutting down entire operations and even executing rolling blackouts. Surely there would have been some amount of embarrassment for the nation on the world's stage if it had missed its target, but that likely would have been minor. It's worth noting the difference in political culture: What do you think would have happened if the US had such an energy-reduction target to hit, but a sagging economy got in the way?

I can tell you with some certainty: We would have missed that mark.

Will there never be an end to Americans who take advantage of our uniquely strong speech protections to laud totalitarians?

I find it hard to be surprised nowadays by how low trade policy can sink.  So I was depressed rather than surprised when I read this update on Magnesium trade.

Those of us who complain about protectionism often complain that its proponents mindlessly cite the seen (ie jobs lost to foreign competition) without taking into account the unseen (numerous consumers and consumer industries benefited by imports).  What I did not know is that this is not just bad economics, but is cemented into legislation:

In 2005, U.S. Magnesium Corporation, the sole producer of magnesium in the United States, succeeded in convincing the U.S. International Trade Commission and U.S. Commerce Department to impose duties on imports of magnesium from competitors in Russia and China. Before toasting this outcome with some clichéd or specious utterance about how the antidumping law ensures fair trade and a level playing field for U.S. producers, it is important to understand that downstream, consuming industries (those U.S. producers that require for their own production the raw materials and intermediate goods subject to the antidumping measures) have no legal standing in these cases. Statute forbids the U.S. International Trade Commission from considering their arguments or projections about the likely consequences of prospective duties. Statute requires that the ITC consider only the conditions of the petitioning industry.  In other words, the analysis is slanted.  The antidumping law codifies these evidentiary asymmetries, which makes it easier for U.S. suppliers to cut-off their U.S. customers’ access to alternative sources of supply.

In other words, in the case of magnesium, on the interests of the US Magnesium Corporation can be considered by the US Government in evaluating trade policy - the interest of the other 300 million of us is illegal even to mention.

This was also funny, from the government as Abbot and Costello files:

But on trade policy formulation, it seems that the right hand doesn’t always know what the left hand is doing. Last year, while magnesium imports from China were subject to U.S. antidumping duties, the Obama administration launched a WTO case against China for its restraints on exports of raw materials, including magnesium. That’s right. The U.S. government officially opposes China’s tax on exported magnesium because it imposes extra costs of U.S. consuming industries, but it insists on enforcing its own antidumping duties on magnesium imported from China despite those costs.

Amanda Carey via the Daily Caller:

Via Overlawyered:

As part of the Consumer Product Safety Improvement Act of 2008 (CPSIA), Congress mandated that the CPSC create a "publicly available consumer product safety information database" compiling consumer complaints about the safety of products. Last week, by a 3-2 majority, the commission voted to adopt regulations that have dismayed many in the business community by ensuring that the database will needlessly include a wide range of secondhand, false, unfounded or tactical reports. The Washington Times editorializes:

"¦[Under the regulations as adopted last week] anybody who wants to trash a product, for whatever reason, can do so. The commission can leave a complaint on the database indefinitely without investigating its merits "even if a manufacturer has already provided evidence the claim is inaccurate," as noted by Carter Wood of the National Association of Manufacturers' "Shopfloor" blog"¦.

Trial lawyers pushing class-action suits could gin up hundreds of anonymous complaints, then point the jurors to those complaints at the "official" CPSC website as [support for] their theories that a product in question caused vast harm. "The agency does not appear to be concerned about fairness and does not care that unfounded complaints could damage the reputation of a company," said [Commissioner Nancy] Nord.

Commissioners Nord and Anne Northup introduced an alternative proposal (PDF) aimed at making the contents of the database more reliable and accurate but were outvoted by the Democratic commission majority led by Chairman Inez Tenenbaum. Nord: "under the majority's approach, the database will not differentiate between complaints entered by lawyers, competitors, labor unions and advocacy groups who may have their own reasons to "˜salt' the database, from those of actual consumers with firsthand experience with a product."

Any number of private actors have already tackled this problem. Amazon.com has probably the most comprehensive set of product reviews, and has taken a number of steps (e.g. real name reviews) to increase trust in their system.  Reviewers who are shills (either for or against a product) are quickly outed by other reviewers.   Another site whose reviews I rely on a lot is TripAdvisor, which has hotel and other travel reviews.   TripAdvisor allows the reviewed hotels to respond to individual reviews in a way that the consumer can see to get both sides of the story.

Apparently, none of this back and forth will be allowed in the CPSC data base.  The Democrats who wrote the process only want bad stuff in the data base, so it will not allow manufacturer responses or even positive reviews to appear.  The only possible justification for the government to run this database would be for the government to take a role in investigating and confirming or overturning claims and complaints, but it is clear it won't be doing this either.   This will just be a location for disgruntled people to drop turds on various manufacturers, all with the imprimatur of the government.  I can't see consumers finding much value here compared to the alternatives, but I can see the value in a courtroom to be able to stuff a government site with unsubstantiated claims and then use that site to say that the "official" government site is full of criticisms of the product.

Not sure this even requires comment.

Chandler's new City Hall comes with some features that have municipal workers and visitors scratching their heads. Like the restroom signs that tell people not to drink out of the urinals and toilets.

...

A few employees have been cracking jokes and speculating about what it would take to make them slurp from potties when water fountains and sinks are a few feet away.

"I'm glad that I saw that sign because I was very thirsty and looking for a means to quench my thirst," Mayor Boyd Dunn quipped. "Seriously, I'm certain there's some regulation out there that requires that type of sign."

From the New York Daily News, quoting VP Biden: (via Maggies Farm)

Every single great idea that has marked the 21st century, the 20th century and the 19th century has required government vision and government incentive

Wow, its hard to believe that even a hard core statist believes this in the face of historical evidence, but there it is.  The example  (and remember even a single correct example does not support the word "every") is an interesting one:

"In the middle of the Civil War you had a guy named Lincoln paying people $16,000 for every 40 miles of track they laid across the continental United States. "¦ No private enterprise would have done that for another 35 years."

I am actually stunned that he is historically literate enough to get the second part of this right, that there was in fact a single transcontinental railroad, James J Hill's Great Northern, that completed its line without government subsidies or land grants.  He even gets the date about right.  A few thoughts:

• Not mentioned by Biden is the emergence of the entire rest of the US railroad industry, which by 1860 had about 30,000 miles of track, mostly via private initiative.
• I think the original transcontinental railroad has interesting parallels to the Apollo program -- certainly government action got us into space and a transcontinental railroad faster than private action, but it could be argued that both delayed private initiative in these areas longer than would have occurred without the action.
• For Lincoln in the Civil War, the transcontinental had as much to do with cementing Union control of California as it did promoting commerce or any other values

Here is my favorite fact -- Every single transcontinental railroad went bankrupt at least once before 1925, except one.  Can you guess which one did not?  Yes, it was the Great Northern, the only one built entirely with private capital.

If I was an economics grad student, here is a study I would love to do.  Identify products or industries for which third-party payers, and particularly the government, contribute a substantial amount of the purchase volume, either from outright payments or loan guarantees.  Here are three biggies I can think of:

• Health care
• Houses
• College

Then look at the differing inflation rates over the last 20 years for these vs. a basket of other goods purchased the traditional way (ie with your own damn money).  I think you can see just from visual inspection where the answer is going to go.

A century of Progressive attacks on the Constitution have come to this.  I am just going to quote Radley Balko in full:

"¦.a federal judge has just ruled that the federal government can force me to purchase a product from a private company, under the argument that my not purchasing that product affects interstate commerce.

For those of you who support this ruling: Under an interpretation of the Commerce Clause that says the federal government can regulate inactivity, can you name anything at all that the feds wouldn't have the power to regulate?

And if you can't (and let's face it, you can't), why was the Constitution written in the first place? As I understand it, the whole point was to lay out a defined set of federal powers, divided among the three branches, with the understanding that the powers not specifically enumerated in the document are retained by the states and the people.

But if that set of powers includes everything you do (see Wickard and Raich), and everything you don't do (what Obamacare proponents are advocating here), what's the point in having a Constitution at all?

Raich was bad enough.  In that case the high court said the Feds could regulate home-grown marijuana that was grown and consumed entirely in California because that activity might still affect prices in other states (presumably because Californians could have smoked imported weed if they had not grown their own).  (I can't understand how anyone can call this a "conservative" court when it handed down Raich.  Clarence Thomas wrote in Raich:

Respondents Diane Monson and Angel Raich use marijuana that has never been bought or sold, that has never crossed state lines, and that has had no demonstrable effect on the national market for marijuana. If Congress can regulate this under the Commerce Clause, then it can regulate virtually anything and the Federal Government is no longer one of limited and enumerated powers.

Two great examples:

1.  Barney Frank is supposedly going to remake housing finance after having helped destroy it by his actions over the last 20 years.  In particular, after his polititization of Fannie Mae's business goals over the last 20 years, and constant fight to prevent any kind of oversight of Fannie and Freddie, which has led to over a hundred billion dollars and perhaps as high as $400 billion in taxpayer losses, Barney is going to do more of the same with Frannie and Freddie now that the government has full control of these entities.

2.  A NY state child protective services study shows that all their resources provide little real benefit to endangered children.  The solution -- do even more of the same.

And don't forget the classic example, the 10x increase in public school funding to no apparent benefit:

I had a real zoo of a week last week - one of those stretches I have every once in a while in business where new items were being tossed into my queue far faster than I could take care of them.

One of the most amazing was courtesy of the state of Florida.  Almost exactly a year ago, I submitted some backup data on my Florida revenues in 2006 to an auditor for sales taxes.  Such audits are entirely usual and routine (if irritating) and come up with some regularity.  There was no way the auditor could have figured out my tax submission from what I initially sent him - I would have to spend time explaining what different categories in my revenue reports and GL meant.  Further, I had data on seven locations which are divided in the tax reports into two county reports, but he did not have the data for which should go to which.

Well, I never heard from the guy for a whole year to clarify these issues.  Not sure what he was doing, but he was probably screwing up somehow, because on Friday his supervisor called me and told me that the statute of limitations was almost up on 2006 and they needed to complete the audit.  To this end, the auditor had submitted to her some mess of a set of numbers (see my comments above, he couldn't have done a correct job no matter how competent he was since he never asked me for all the information he needed).  I can see the guy rushing around trying to cover his ass having probably forgotten about it for a year.  Anyway, I told the lady that the statute of limitations was her problem, not mine, because her employee initially contacted me a year ago and had been sitting on the case all that time.

Well, I guess I was naive.  It turns out the statute of limitations is in fact my problem in the power imbalance that exists between me and the state of Florida.  She told me that, admitting she had no basis for doing so, she was going to file a lien against me for $40,000 in unpaid taxes as a "placeholder" to get in under the statute of limitations.  Yes, this would trash my credit and my legal standing and cause me no end of problems having a government lien on my company, but it would circumvent the horrible situation that when they actually did the work they should have done a year ago, I might owe taxes they could not collect.

Of course I told her this was BS and of course that got me about nowhere.  After a lot of time, I got one concession.  If I could prove I was clean by Monday, they would not issue the lien.  Well I spent all Friday, Friday night, and Saturday working up the analysis that is supposed to be their job, working on a 1 business day deadline because they had pissed away 250 business days sitting on my case file.  Completing the analysis, I calculated I under-paid taxes by just under $7.  We will see on Monday if I am able to battle back against this absurd thuggery.  By the way, we are being audited everywhere by local governments hoping to dredge up a few pennies from the couch cushions.  It is taking so much of my time that I actually chose to back off of bidding on a couple of new projects -- no time to spare.  So much for stimulus.

On the bright side, I have a lot of good stuff saved up to blog but I did not feel like it on Sunday.  Instead, I spent some time soldering switches and other trackwork on my n-scale railroad.  Made good progress, only about 3 more switches left to build on this module (the switches below are obviously before painting and adding wood ties.  Examples of finished work is here).

Update: By the way, I operate in red states and blue states and cannot detect any real difference in how arbitrarily I am treated by the state bureaucracy (with the exception of California, which stands alone at the top of the list of state bureaucracies that are a pain to deal with).  They differ in laws and tax rates, that often make red states more hospitable, but their bureaucrats are all about the same.

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

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

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

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

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

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

I must say that I am not much of a fan of trying to find spurious relationships between long-term economic trends and the political parties who hold office at various times.  But I must say I kind of liked this one from Mark Perry:

PS-  I was around a dinner table this weekend with a group of Republicans, including some activists.  I asked them what exactly they thought Republicans would do next term if they won real gains in Congress.  None of them, many hard-core activists, could name anything except divide government and slow the pace of growth.  Which I suppose is better than we have now.

It appears that for a principled defense of property rights, the exercise of religion in America, and limited government we have to turn to ... liberal blogger Kevin Drum

We already know that a large majority of Americans are opposed to building it, but here are the results of an Economist poll on a slightly different question:

Whether or not you think the Islamic cultural centre and mosque should be built near the World Trade Center site, do you think that Muslims have a constitutional right to build a mosque there?

Technically, I think the wording of this question should have been turned around: not whether Muslims have the right to build a mosque on Park Place, but whether the government has the constitutional right to stop them from building a mosque on Park Place.

Still, I think everyone probably understands what this means, and it's just depressing as hell. It's one thing to oppose the mosque just because you don't like the idea, but to deny that Muslims even have a constitutional right to build it? That should be a no-brainer. Of course they do.

Seriously, this is from a man who probably does not think you have the Constitutional right to choose your own doctor. Why are Republicans ceding the high ground on this to Democrats? Well, it turns out that is the theme of my new column this week in Forbes.

...prospective mosque-banners would argue that I simply don't understand how utterly, deeply offensive the proposed location of this mosque is to them. But that is not the case. I am offended as well by what might be a laudatory memorial to a terrorist incident. But the question for me is, do we have a right not to be offended?

The irony is that for the last decade or so, conservatives have fought the political correctness movement over exactly this issue. Conservative commentators, rightly I think, were up in arms over the "hate speech" trial of Mark Steyn in Canada, and more recently the cancellation of Ann Coulter's Canadian speaking tour. In both cases Canadian government and university officials argued that Steyn's and Coulter's criticisms of radical Islam were too divisive, too defamatory to Muslims, and in general too offensive to be allowed public voice....

This is what truly floors me about the Ground Zero controversy: Republicans all over the country are standing up and begging House Speaker Nancy Pelosi and President Barack Obama to void the property rights of a private entity, shut down the construction of a church, and do so to protect some mythical right not to be offended, a right that, until recently, conservatives argued did not exist. Do Republicans really want to encourage the federal government to tear up property rights and First Amendment protections, all in the name of hurt feelings? If conservatives set this precedent today, they are almost certainly not going to like how it is used tomorrow.

Postscript: I notice something in this poll that I have seen several times lately.  Traditionally, poll results for independents always fell somewhere between Republicans and Democrats.  In this poll, as in several others I have seen, Independent responses actually fell outside of these bounds.  Increasingly independents are shedding the "moderate" label and actually pacing the two political parties.  I find this encouraging, though it is probably too much to hope for that this is the leading indicator of some type of radical ideological restructuring of the Coke and Pepsi parties.

... the other auto-makers are not going to be treated very fairly.

Senior officials at the U.S. Department of Transportation have at least temporarily blocked the release of findings by auto-safety regulators that could favor Toyota Motor Corp. in some crashes related to unintended acceleration, according to a recently retired agency official.George Person, who retired July 3 after 27 years at the National Highway Traffic Safety Administration, said in an interview that the decision to not go public with the data for now was made over the objections of some officials at NHTSA.

"The information was compiled. The report was finished and submitted," Mr. Person said. "When I asked why it hadn't been published, I was told that the secretary's office didn't want to release it," he added, referring to Transportation Secretary Ray LaHood.

Welcome to the corporate state, Obama-style.   Not to mention some old-fashioned bureaucratic CYA:

Since March, the agency has examined 40 Toyota vehicles where unintended acceleration was cited as the cause of an accident, Mr. Person said. NHTSA determined 23 of the vehicles had accelerated suddenly, Mr. Person said.

In all 23, he added, the vehicles' electronic data recorders or black boxes showed the car's throttle was wide open and the brake was not depressed at the moment of impact, suggesting the drivers mistakenly stepped on the gas pedal instead of the brake, Mr. Person said.

"The agency has for too long ignored what I believe is the root cause of these unintended acceleration cases," he said. "It's driver error. It's pedal misapplication and that's what this data shows."

Mr. Person said he believes Transportation Department officials are "sitting on" this data because it could revive criticism that NHTSA is too close to the auto maker and has not looked hard enough for electrical flaws in Toyota vehicles.

"It has become very political. There is a lot of anger towards Toyota," Mr. Person said. Transportation officials "are hoping against hope that they find something that points back to a flaw in Toyota vehicles."

The existence of this report is one reason, suggests Walter Olson, why the Democrats in Congress (abetted by the NY Times) seem in an enormous hurry to pass a new auto regulatory bill.  After all, automobiles have been sold in this country for only about 100 years, so every day counts in getting new regulatory infrastructure in place

The recall of millions of Toyota cars and trucks because of persistent problems of uncontrolled acceleration has exposed unacceptable weaknesses in the regulatory system. These weaknesses are allowing potentially fatal flaws to remain undetected. Democrats in Congress are pushing legislation to improve regulation and oversight of auto safety. It should be passed into law without delay.

As Olson points out, the NY Times has bent over backwards to ignore recent NHTSA findings in its reporting. This in particular is the enormously flawed logic of the regulator:

N.H.T.S.A. could fine Toyota only $16.4 million for delays in revealing problems with defective accelerator pedals that left the throttle open after being released. That's pocket change for a company of its size.

Pay no attention to that free market behind the curtain.  The billions of dollars this acceleration problem has cost Toyota in recalls, repairs, lost sales, and damage to reputation are irrelevant -- only fines imposed by the Administration (and torts by its allies in the litigation industry) matter.  And if the same problem beset government-owned GM, anyone want to bet what the penalty would be?  They would probably get a new bailout from Obama to pay for the recall costs.   In fact, even without the NHTSA findings, this Toyota problem is really no worse in terms of incidence rates or costs than any number of other recalls by US manufacturers.  The only difference is the media attention lavished on the problem.

I have blogged before about the absolute disaster that is the requirement (included in the health care bill) for businesses to submit 1099's for all goods and services purchases over $600.  We have hundreds of vendors who meet this criteria, and the process of filling out forms, collection tax ID's, etc. is insanely onerous.  Megan McArdle has more today.

I thought this was an interesting irony of our growing corporate state:

In my post "Attention Gov't: This Is How Businesses Are Created" I brought up the point that government regulations keep the average American from investing in ground floor business opportunities with rules specifying how much money someone must have before they can invest in start-ups (unless the start-up is being done by a friend or family member).  Government regulations also prevent start-ups from advertising their investment opportunity.  If you need ground-floor investment (as opposed to loans) to bring your business to the proverbial next level, there is a wall of regulation that keeps you from asking for it from the general public and specifies what "sophisticated investors" (the already rich) you can approach and how.

Those rules are there to protect us middle class rubes from being taken in by crafty and ill-intentioned businessmen.

I contrasted this protection the government so thoughtfully provides us"“keeping us from making possible bad investments"“with it's promotion of lotteries and acceptance of casino gambling.

Now these people who will not allow an entrepreneur to advertise or promote his start-up in order to get voluntary investment money from people willing to take a risk on the business idea or invention are looking at legalization of online gambling in the USA.

Via Valley Fever

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

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

From San Francisco, of course.  Via Maggies Farm's great daily link roundup

If the commission approves the ordinance at its meeting tonight, San Francisco could soon have what is believed to be the country's first ban on the sale of all pets except fish.That includes dogs, cats, hamsters, mice, rats, chinchillas, guinea pigs, birds, snakes, lizards and nearly every other critter, or, as the commission calls them, companion animals.

"People buy small animals all the time as an impulse buy, don't know what they're getting into, and the animals end up at the shelter and often are euthanized," said commission Chairwoman Sally Stephens. "That's what we'd like to stop."

This is the same city that is replacing Cokes with Soy Milk in its vending machines.  Oddly, when you read the pet article, it turns out their main concern is with hamsters, that get euthanized a huge rates as people who initially think they are cute wake up one day and realize they are just irritating rodents.  One wonders then why they ban on all animals just to get at one kind.  And why are fish OK but dogs are not?

I think I blogged this the other day but I want to repeat the un-ironic comment made by a city official on the soda ban in vending machines:

"It's entirely appropriate and not at all intrusive for city government to take steps to discourage the sale of sugary sodas on city property."

One wonder if any limitation on individual choice (save perhaps on abortion) would be considered inappropriate or intrusive by these folks.