Coyote Blog

From Foreign Policy

Every turn in the investigation that led to Petraeus's resignation perfectly illustrates the incredible and dangerous reach of the massive United States surveillance apparatus, which, through hundreds of billions of dollars in post-9/11 programs -- coupled with weakened privacy laws and lack of oversight -- has affected the civil liberties of every American for years. The only difference here is the victim of the surveillance state's reach was not a faceless American, but the head one of the agencies tasked to carry it out.....

It seems the deciding factor in opening the investigation was not the emails' content, but the fact that the FBI agent was friendly with Kelley. (Even more disturbing, the same FBI agent has now been accused of becoming "obsessed" with the Tampa socialite, sent shirtless pictures to her, and has been removed from the case.)...

One would assume, and hope, police have to get probable cause for all emails, just like they would for a physical letter or a phone call. But the law governing email -- the Electronic Communications Privacy Act (ECPA) -- doesn't have such requirements for emails more than 180 days old. Because ECPA was written in 1986, before the World Wide Web even existed, archived emails were an afterthought given the incredibly small storage space on email servers....

While these details may shock the average reader, these privacy-invasive tactics are used regularly by both federal and local law enforcement around the United States. In fact, as the New York Times reported, referring to Petraeus, "Law enforcement officials have said they used only ordinary methods in the case." The only difference here is the target was the director of the CIA and one of the most decorated soldiers in modern military history.

Electronic communication needs better Fourth Amendment protection.

By the way, another scandal here that interests me more than the sex thing is that the head of the CIA has such a terrible grasp on basic fieldcraft

Petraeus and Kelley were communicating not by sending each other emails, but using an old (and apparently ineffective) trick -- "used by terrorists and teenagers alike" -- of saving drafts in the draft folder of Gmail, thinking this was more private than if they sent them to each other. But as the ACLU's Chris Soghoian explained, this was not so

JP Morgan finds itself under the government microscope for having heartlessly... cooperated with the government four years ago

The U.S. Department of Justice and New York Attorney General Eric Schneiderman teamed up last week to sue J.P. Morgan in a headline-grabbing case alleging the fraudulent sale of mortgage-backed securities.

One notable detail: J.P. Morgan didn't sell the securities. The seller was Bear Stearns—yes, the same Bear Stearns that the government persuaded Morgan to buy in 2008. And, yes, the same government that is now participating in the lawsuit against Morgan to answer for stuff Bear did before the government got Morgan to buy it....

As for the federal government's role, it's helpful to recall some recent history: In the mid-2000s, Bear Stearns became—outside of Fannie Mae and Freddie Mac—perhaps the most reckless financial firm in the housing market. Bear was the smallest of the major Wall Street investment banks. But instead of allowing market punishment for Bear and its creditors when it was headed to bankruptcy, the feds decided the country could not survive a Bear failure. So they orchestrated a sale to J.P. Morgan and provided $29 billion in taxpayer financing to make it happen.

The principal author of the Bear deal was Timothy Geithner, who was then the president of the Federal Reserve Bank of New York and is now the Secretary of the Treasury. Until this week, we didn't think the Bear intervention could look any worse.

Somewhere there was a legal department fail here - I can't ever, ever imagine buying a company with Bear's reputation that was sinking into bankruptcy without doing either via an asset sale or letting the mess wash through Chapter 7 so there could be an old bank / new bank split.  But Bank of America made exactly the same mistake at roughly the same time with Countrywide, so it must have appeared at the time that the government largess here (or the government pressure) was too much to ignore.

OK, there are lots of reasons to get Obama out of office.  The problem is, that for most of them, I have no reasonable hope that Romney will be any better.  Corporatism?  CEO as Venture-Capitalist-in-Chief?  Indefinite detentions?  Lack of Transparency?  The Drug War?   Obamacare, which was modeled on Romneycare?  What are the odds that any of these improve under Romney, and at least under Obama they are not being done by someone who wraps himself in the mantle of small government and free markets, helping to corrupt the public understanding of those terms.

So I am pretty sure I cannot vote for Romey.  I really like Gary Johnson and I am pretty sure he will get my vote.  Republican friends get all over me for wasting my vote, saying it will just help Obama win.  So be it -- I see both candidates undertaking roughly the same actions and I would rather that bad statist actions be taken in the name of Progressives rather than in the name of someone who purports to be free market.

To test my own position, I have been scrounging for reasons to vote for Romney.  I have two so far:

1.  Less likely to bail out Illinois when its pension system goes broke in the next few years

2.  I might marginally prefer his Supreme Court nominees to Obama's

That is about all I have.  Stretching today, I have come up with a third:

3.  If we have a Republican in the White House, the press will start doing its job and dig into the facts about drone strikes and warrant-less wiretapping.

You know the press are in full defense mode protecting their guy in office when the only press that reports on the ACLU's accusation about sky-rocketing wire tapping under Obama are the libertarians at Reason and the Marxists at the World Socialist Web site.  Four years ago the New York Times would have milked this for about a dozen articles.  It may take a Republican President to get the media to kick back into accountability mode over expansions of executive power.

I always suspected government jobs programs and job training programs were a waste of time.  I never imagined they were total vaporware:

"There are no jobs!" That is what people told me outside a government "jobs center" in New York City.

To check this out, I sent four researchers around the area. They quickly found 40job openings. Twenty-four were entry-level positions. One restaurant owner told me he would hire 12 people if workers would just apply.

It made me wonder what my government does in buildings called "job centers." So I asked a college intern, Zoelle Mallenbaum, to find out. Here's what she found:

"First I went to the Manhattan Jobs Center and asked, "Can I get help finding a job?" They told me they don't do that. 'We sign people up for food stamps.' I tried another jobs center. They told me to enroll for unemployment benefits."

So the "jobs" centers help people get handouts. Neither center suggested people try the 40 job openings in the neighborhood.

From John Stossel, who has a lot more at the source link.

I had a great day on Friday in Manhattan for the price of a $20 subway pass.  I did a lot of wandering around and people-watching, but here are three great free activities:

1.  Central Park.  Probably the greatest urban park in the world.  It is gorgeous, and everyone overlooks it.  If you have never strolled the Ramble, you will not believe you are in the middle of Manhattan.

2.  Walk the high-line park.  Another fabulous piece of landscape architecture, an old elevated rail line running north from about 14th street (just a bit south of the Chelsea Market) along the West Side that has been turned into a park and an amazing escape.  You can stroll the waterfront and urban New York without encountering a single car.  It is also incredibly quiet.  And train-lovers will appreciate that the architects kept a lot of the complex track-work as part of the landscape, almost like industrial art.

3.  Walk the Brooklyn Bridge.   I don't know that there is any similar experience anywhere else.  Something New Yorkers and tourists have enjoyed for over a hundred years.

I couldn't stay until magic hour but the view was still tremendous.

In the evening, I did whip out the wallet again and took my daughter to Ellen's Stardust Diner, near 51st and Broadway.  Total tourist trap.  Terrible food.  But an absolute blast every time.  All the waiters are out-of-work Broadway singers and they take turns singing show tunes for the restaurant as they serve.  We have walked out smiling and feeling good every time we have gone.

A number of times in the past I have pointed out that government bodies in the US tend to be among the worst polluters.  While we sit around and argue about parts per billion of CO2 in the atmosphere, billions of gallons of raw sewage are being dumped into rivers.  I remember when I lived in Boston, the city just piped sewage out into the harbor.  When it got to disgusting and finally garnered a bit of negative media attention, they solved the untreated sewage problem by ... building a longer pipe and dumping it further out in the  ocean.   I worked at an Exxon refinery for a few years and it was always frustrating the regulatory attention we got on the smallest discharge (in general, the water we discharged had to be cleaner than the body of water we were discharging into) when local municipalities were dumping untreated sewage during storms into the same water, without consequence.

Anyway, here is a post from John Hanger via the Unbroken Window blog

A main goal of this blog is to help its readers prioritize the biggest threats to water quality and to understand that, though gas drilling impacts are real, they are well down the list of the most serious causes of pollution of Pennsylvania’s waters.  A must read is yesterday’s Pittsburgh Post Gazette front page story about the massive amounts of sewer overflows that reach rivers in the Pittsburgh region multiple times each year.
http://www.post-gazette.com/stories/local/region/alcosan-sewer-project-gets-little-public-input-653713/.The annual volume of untreated sewage reaching rivers and streams is reported as 9 billion gallons per year and occurs in 30 to 70 storms annually, according to the Post Gazette.  And the bill for stopping this pollution and cleaning up is a staggering $2.8 billion.To make matters worse, the same problem of untreated sewage flowing into rivers and streams that the Pittsburgh region is confronting is found in many communities across Pennsylvania as well as in New York and other states.  While America’s sewage overflow problem dwarfs the impacts of gas drilling on water quality, it normally attracts little media attention or sustained public concern.  There are no Hollywood stars campaigning to stop these huge amounts of sewage from going into rivers.  There are no HBO movies on the problem.

Normally, this huge source of pollution that threatens public health and safety is ignored or draws a yawn.

Good risk prioritization is virtually impossible in the current state of the media and political dialog.   Mike Rizzo, writing at the blog, makes a good point:

if you asked people if the government should allow an odorless, tasteless, highly explosive gas to be piped into your house, where a small leak in a pipe could cause the entire house to explode, they would surely say No Way! But then ask them if natural gas stoves should be permitted in their homes and to a man they’d all say, “Of Course.”

Every single time that wind power installations are evaluated based on their actual performance, they turn out to make no economic sense.  Consumer Reports comes to the same conclusion for their wind power trial (and this does not even include the issues of standby power that make even small wind power savings irrelevant to CO2 production).

But if you're considering a wind turbine to supplement your home's power, consider our experience with one product, the Honeywell WT6500 Wind Turbine, a cautionary tale....

A tool on Windtronics' website had calculated we'd get 1,155 kWh per year at the 12-mph average it predicted for our area of Yonkers, New York. And the authorized installer, during his initial visit, didn't say the roof of our headquarters might generate any less, but that rating is at a height of 164 feet, not the 33 feet WindTronics requires for rooftop installations.

In the 15 months since the turbine was installed, though, it has delivered less than 4 kWh—enough only to power a 12,000 btu window air conditioner for one afternoon. A company representative in charge of installations worldwide recently visited our offices and confirmed that our test model was correctly installed. What's more, he told us that while the WT6500 should start generating power at about 3 mph, the initial juice goes just to power the system's inverter, which must be running before it supplies any AC power elsewhere. The true wind speed needed to start producing AC while the inverter is on is 6 mph, not far from the 7.5 mph needed by a traditional gearbox wind turbine....

At the rate the WT6500 is delivering power at our test site, it would take several millennia for the product to pay for itself in savings—not the 56 years it would take even with the 1,155 kWh quote we received.

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

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

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

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

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

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

Read it all, as they say.

I wrote on the day of Obama's inauguration:

I will be suitably thrilled if the Obama administration renounces some of the creeping executive power grabs of the last 16 years, but he has been oddly silent about this.  It seems that creeping executive power is a lot more worrisome when someone else is in power.

From Charlie Savage in the New York Times:

As a senator and presidential candidate, he had criticized George W. Bush for flouting the role of Congress. And during his first two years in the White House, when Democrats controlled Congress, Mr. Obama largely worked through the legislative process to achieve his domestic policy goals.

But increasingly in recent months, the administration has been seeking ways to act without Congress. Branding its unilateral efforts “We Can’t Wait,” a slogan that aides said Mr. Obama coined at that strategy meeting, the White House has rolled out dozens of new policies — on creating jobs for veterans, preventing drug shortages, raising fuel economy standards, curbing domestic violence and more.

Each time, Mr. Obama has emphasized the fact that he is bypassing lawmakers. When he announced a cut in refinancing fees for federally insured mortgages last month, for example, he said: “If Congress refuses to act, I’ve said that I’ll continue to do everything in my power to act without them.”

This is just nuts.

Across the United States more than 2,700 companies are collecting state income taxes from hundreds of thousands of workers – and are keeping the money with the states’ approval, says an eye-opening report published on Thursday.

The report from Good Jobs First, a nonprofit taxpayer watchdog organization funded by Ford, Surdna and other major foundations, identifies 16 states that let companies divert some or all of the state income taxes deducted from workers’ paychecks. None of the states requires notifying the workers, whose withholdings are treated as taxes they paid.

General Electric, Goldman Sachs, Procter & Gamble, Chrysler, Ford, General Motors and AMC Theatres enjoy deals to keep state taxes deducted from their workers’ paychecks, the report shows. Foreign companies also enjoy such arrangements, including Electrolux, Nissan, Toyota and a host of Canadian, Japanese and European banks, Good Jobs First says.

Why do state governments do this? Public records show that large companies often pay little or no state income tax in states where they have large operations, as this column has documented. Some companies get discounts on property, sales and other taxes. So how to provide even more subsidies without writing a check? Simple. Let corporations keep the state income taxes deducted from their workers’ paychecks for up to 25 years.

Kentucky, where I have operated for over 10 years, seems to be the originator of this silliness.  I have always wondered why there is not an equal protection issue with such subsidies given to a chosen few companies but not to others.

I wrote years ago about such relocation subsidies being a prisoners dilemma game:

I hope you can see the parallel to subsidizing business relocations (replace prisoner with "governor" and confess with "subsidize").  In a libertarian world where politicians all just say no to subsidizing businesses, then businesses would end up reasonably evenly distributed across the country (due to labor markets, distribution requirements, etc.) and taxpayers would not be paying any subsidies.  However, because politicians fear that their community will lose if they don’t play the subsidy game like everyone else (the equivalent of staying silent while your partner is ratting you out in prison) what we end up with is still having businesses reasonably evenly distributed across the country, but with massive subsidies in place.

To see this clearer, lets take the example of Major League Baseball (MLB).  We all know that cities and states have been massively subsidizing new baseball stadiums for billionaire team owners.  Lets for a minute say this never happened – that somehow, the mayors of the 50 largest cities got together in 1960 and made a no-stadium-subsidy pledge.  First, would MLB still exist?  Sure!  Teams like the Giants have proven that baseball can work financially in a private park, and baseball thrived for years with private parks.  OK, would baseball be in the same cities?  Well, without subsidies, baseball would be in the largest cities, like New York and LA and Chicago, which is exactly where they are now.  The odd city here or there might be different, e.g. Tampa Bay might never have gotten a team, but that would in retrospect have been a good thing.

The net effect in baseball is the same as it is in every other industry:  Relocation subsidies, when everyone is playing the game, do nothing to substantially affect the location of jobs and businesses, but rather just transfer taxpayer money to business owners and workers.

This country has made great progress in cleaning up its waterways over the last four decades.  Conservatives like to pretend it's not true, but there is absolutely nothing wrong from a strong property rights perspective in stopping both public and private actors from dumping their waste in waterways that don't belong to them.

The problem today with the EPA is not the fact that they protect the quality of the commons (e.g. air and water) but that

1. New detection technologies at the parts per billion resolution have allowed them to identify and obsess over threats that are essentially non-existent
2. Goals have changed such that many folks use air and water protection as a cover or excuse for their real goal, which is halting development and sabotaging capitalism and property rights

What might surprise Brougham and many other New Yorkers who were appalled by last summer’s sewage discharge is that there’s nothing particularly unusual about it. Almost every big rainstorm causes raw sewage to flow into the city’s rivers. New York is one in a handful of older American cities — Baltimore, Philadelphia and Washington, D.C., are others — that suffer from poor sewer infrastructure leading to Combined Sewer Overflows, or CSOs. New York City has spent $1.6 billion over the last decade trying to curb CSOs, but the problem is so pervasive in the city that no one is sure whether these efforts will make much of a difference.

CSOs occur because the structure of New York City’s sewage system often can’t cope with the volume of sewage flowing through it. Under the city’s streets, thousands of drains, manholes and plumbing systems converge into a few sewage mains. These pipes can handle the 1.3 billion gallons of wastewater that the five boroughs produce on a typical day — about as much water as would be generated by a 350-year-long shower. But whenever the pipes gather more water than usual — such as during a rain- or snowstorm — the pumps at the city’s 14 wastewater treatment plants can’t keep up with the flow. Rather than backing up into streets and homes, untreated sewage systematically bypasses the plants and heads straight into the waterways.*

In this way, 27 to 30 billion gallons of untreated sewage enter New York City waterways each year via hundreds of CSO outfalls, says Phillip Musegaas of Riverkeeper, a New York clean water advocacy group. Musegaas says he finds it especially upsetting that city officials don’t effectively warn the thousands of people like Brougham who use the waterways and could encounter harmful bacteria during overflow events.

This via Q&O:

Earlier today, New York Times columnist Nick Kristoff opined on Twitter about cuts in government services. It’s not every day that you see such stupidity displayed so confidently…except from the Left:

Imagine John Boehner home in OH, seeing an escaped tiger–and getting a msg that help is unavailable due to govt cutbacks.

Well, I don’t know about John Boehner. But I do know that if I received such a message, it’d be because I was trying to call up a government flunky to haul a tiger carcass away. And if I did get such a message, my very next call would be to a good taxidermist.

It’s an interesting glimpse into the worldview though. The unspoken assumption is that, without government tiger hunters, we’re all doomed to be mauled by wild beasts. Presumably, this is because we are all tiny, little children, utterly incapable of solving our problems without the intervention of our benevolent government overlords. It’s a worldview that operates on the assumption that the government is the only adult in the room.

A great example of this sort of mentality was the Bruce Willis action filmLive Free or Die Hard.  The movie was a decent thriller, falling into the unlikely-buddy-movie genre (including also 48 Hours and most of the Lethal Weapon movies).

Like most modern techno-thrillers, it required a lot of technical suspension of belief, but what really struck me was the premise -- that somehow, if terrorists were able to really shut down the government, people would go into a panic and be totally lost and forlorn.  Even the strong male hero buys into the premise.  Can you even imagine a Clint Eastwood movie where Clint laments how scared Americans will be if they were to call the FDA to inquire if a certain product is truly organic and no one answered the phone?   It makes for a sort of irony in the movie because in fact the government is completely useless in the face of the terrorists, who are brought down essentially by a few private individuals.

Oops.  Accounting error seriously overestimates benefits of biofuels.  

The European Union is overestimating the reductions in greenhouse gas emissions achieved through reliance on biofuels as a result of a “serious accounting error,” according to a draft opinion by an influential committee of 19 scientists and academics.

The European Environment Agency Scientific Committee writes that the role of energy from crops like biofuels in curbing warming gases should be measured by how much additional carbon dioxide such crops absorb beyond what would have been absorbed anyway by existing fields, forests and grasslands.

Instead, the European Union has been “double counting” some of the savings, according to the draft opinion, which was prepared by the committee in May and viewed this week by The International Herald Tribune and The New York Times.

The committee said that the error had crept into European Union regulations because of a “misapplication of the original guidance” under the United Nations Framework Convention on Climate Change.

“The potential consequences of this bioenergy accounting error are immense since it assumes that all burning of biomass does not add carbon to the air,” the committee wrote.

Duh.  This has been a known fact to about everyone else, as most independent studies not done by a corn-state university have found ethanol to have, at best, zero utility in reducing atmospheric CO2.

It is worth noting that the EU would likely have never made this admission had it solely been under the pressure of skeptics, for whom this is just one of a long list of fairly obvious errors in climate-related science.  But several years ago, environmental groups jumped on the skeptic bandwagon opposing ethanol, both for its lack of efficacy in reducing emissions as well as the impact of increasing ethanol product on land use and food prices.

I spent four days last week trying to get my online backup file restored for Quickbooks, our accounting software.

One morning, we woke up and found our entire QB file corrupted.  I would insert cautions to QB users about such occurrences, but I think everyone already knows the problem.  Such a warning would be like reminding a New York resident about street crime.  We QB users always feel like we are walking on eggshells with QB, ready at any moment for everything to go haywire.  We live with it, because the program is useful and ubiquitous.

So I perform a backup every day, but recently started using the QB online backup facility.  This automatically backs up the file every day.  I still make a local backup from time to time, but I have gotten lazy.  When things went south the other day, my online backup was 10 days old, an eternity in our business.  I sent QB our file to try to execute a repair, but in the mean time I went to the restore command to restore the most recent online backup before the corruption.

Fail.  Fail.  Fail.  Fail.  After four tries, each 3 hours each, I got the idea maybe it was not going to work.  So I called QB and got their Phillipines tech support desk.  They walked me through some steps.  Fail. Fail. Fail.

Through all this time, we were entirely shut down accounting-wise.  Finally, in exasperation, I asked them to just post my backup file on an FTP server somewhere.  After all, we could both see the file exists, and it was just the QB proprietary file transfer protocol that was failing to restore it.  Well, three countries and four departments later, no one could post the file on an FTP server.  Or to my Amazon S3 account.  Or to a password-protected web page.

For God sakes, this is a software company?  Finally, they agreed to have someone at the third party contractor who runs the servers try to put the file on a DVD and mail it to me, LOL.

It was almost exactly at this point that I opened this XKCD comic:

I tell you, sometimes that site is totally dialed into my brain.  (by the way, as I blog, a signed version of this comic on the wall behind my monitor).

PS- eventually the Quickbooks people rebuilt my corrupted file before I could ever get the backup in my hands.  Object lesson here - don't ever give up on the original file, the Intuit guys have twice in my life fixed a file that seemed corrupted beyond all hope of recovery.

I am on the road for a week long trip combining business (visits to some parks the government wants us to manage), college interviews, and baseball camps (the latter two for my son).  I will end up staying in or driving through Virginia, W. Virginia, Maryland, Pennsylvania, New Jersey, New York, Massachusetts, New Hampshire, Maine, Rhode Island, and Connecticut.

Wiretaps and government surveillance is on the rise, and it has little to do with terrorism.  The failed war on drugs continues to be the main excuse for assaults on privacy:

State and federal investigators obtained 3,194 wiretap orders in 2010, an increase of 34 percent over the previous year, and a whopping 168 percent increase over 2000. Only one wiretap application was denied—which you can choose to take as evidence that law enforcement is extremely scrupulous in seeking applications, or that judges tend to rubber stamp them, according to your preferred level of paranoia. Just half the states reported any wiretaps, and nearly 68 percent of the total 1,987 state wiretaps were attributable to just three states: California, New York and New Jersey....

Still, this invasive technique is still reserved for investigating the most serious violent crimes, right? Alas, no: For 84 percent of wiretap applications (2,675 wiretaps), the most serious offense under investigation involved illegal drugs. Further proof, if proof were needed, that privacy suffers enormous collateral damage in our failed drug war. Drugs have long been the reason for the vast majority of wiretaps, but that trend, too, is on the upswing: Drug cases accounted for “just” 75 percent of intercept orders in 2000.

I find it absolutely unsurprising that Paul Krugman was enthralled by the vision of a science that can be used by a few people to control the actions and futures of all humanity.  He said “I want to be one of those guys!”  I was captivated by the vision in the book as well, but my thought was always "how do we avoid these guys?"  The second two books were about how government planners used mind control to deal with humanity whenever individuals had the gall to circumvent their plans.  Lovely.

If I remember right, Asimov wrote the Foundation after reading the Rise and Fall of the Roman Empire.  The notion of how much of history is inevitable due to large forces (e.g. economics) vs. how much is due to the actions of individuals and what historians now call contingency (e.g. luck) is an endlessly fascinating thing to debate, and I found the Foundation books to be interesting thought exercises along these lines.  But it certainly didn't inspire my life's goals, any more than Dune made me wish for a religious jihad.

I can see the secret Second Foundation scratching their heads now in their secret lair (which turns out to be in the New York Times building in the middle of New York City but that's a spoiler from the third book).  The equations show right here that a trillion dollar stimulus should have kept unemployment below 8%....

Yeah, I know, this is volume one hundred and something in a series, but it is such a crystal clear example of government licensing working primarily to protect incumbent competitors in an industry I have to share it.

Suppose you’re the owner of a taxicab company in a largish metropolitan area. One day you notice some taxis tooling around town—and they’re not yours. They belong to an upstart competitor. His cars are newer, his drivers are nicer, and his fares are lower. Pretty soon your profits start shrinking. What are you going to do about it?

You have a couple of choices. Option A: Invest a lot of money in new vehicles, customer-service training for your drivers, GPS systems to map faster routes and so on. A lot of expense. A lot of effort.

So you go for Option B: Invest a little money in a few politicians, who adopt a medallion law: Only licensed operators with city-issued taxi medallions may operate cabs. The oldest cab companies get first dibs on the medallions, at the lowest rates. Only a few medallions are left over for the new guy, and he can’t afford them anyway. Bingo—your competition problem is solved. The customers might not like it, but what are they going to do—walk?

Apparently this is exactly what is happening in DC

Now it’s the District of Columbia’s turn. Four members of the D.C. City Council have introduced a bill that would create a medallion system for the nation’s capital. Medallion prices would start at $250 for the most established taxi companies and, for the newer entrants, run as high as $10,000. At least initially. As time wore on, it’s likely that the price of a medallion would go up for everyone. That’s what has happened in places such as New York, where a government permission slip to drive a cab costs about $600,000. In Boston, which initially capped medallions at 1,525 in the 1930s—and more than a half-century later had added only 250 more—a medallion will cost you $400,000.

At present the District has more than 10,000 licensed taxi drivers; the proposed legislation would establish only 4,000 medallions. Needless to say, such artificially imposed scarcity also drives up prices. A study by Natwar Gandhi, the District’s chief financial officer, found that fares in cities with medallion systems are 25 percent higher than in cities with open taxi markets.

By the way, for extra points, here is a lawsuit right out of Atlas Shrugged

That story has played out in many cities across the United States, with sometimes amusing variations. A decade or so ago, Minneapolis (population 300,000-plus) allowed a grand total of 343 taxis to operate until Luis Paucar, an immigrant, filed suit. The city council decided to allow another 45 cabs. Then the existing cab companies sued, using the creative legal theory that they had a constitutional right not to face competition. (They lost.)

Well, it turns out that the laws of supply and demand do indeed apply in the health care field.  Obamacare and before it Romneycare combine government subsidies of demand with cost controls mainly consisting of price caps on suppliers.  The results are exactly what any college student could predict after even one week of microeconomics 101:  shortages.

First, from the WSJ

A new survey released yesterday by the Massachusetts Medical Society reveals that fewer than half of the state's primary care practices are accepting new patients, down from 70% in 2007, before former Governor Mitt Romney's health-care plan came online. The average wait time for a routine checkup with an internist is 48 days. It takes 43 days to secure an appointment with a gastroenterologist for chronic heartburn, up from 36 last year, and 41 days to see an OB/GYN, up from 34 last year....

Massachusetts health regulators also estimate that emergency room visits jumped 9% between 2004 and 2008, in part due to the lack of routine access to providers. The Romney-Obama theory was that if everyone is insured by the government, costs would fall by squeezing out uncompensated care. Yet emergency medicine accounts for only 2% of all national health spending.

The emergency room data is fascinating, as crowded emergency rooms supposedly overwhelmed by the uninsured was such an important image in the campaign to pass Obamacare.  More on this from Q&O:

Hospital emergency rooms, the theory goes, get overcrowded because people without health insurance have no place else to go.

But that’s not the view of the doctors who staff those emergency departments.
The real problem, according to a new survey from the American College of Emergency Physicians,isn’t caused by people who don’t have insurance — it’s caused by people who do, but still can’t find a doctor to treat them.

A full 97 percent of ER doctors who responded to the ACEP survey said they treated patients "daily" who have Medicaid (the federal-state health plan for the low-income), but who can’t find a doctors who will accept their insurance…."The results are significant," said ACEP President Sandra Schneider in prepared comments. "They confirm what we are witnessing in Massachusetts — that visits to emergency rooms are going to increase across the country, despite the advent of health care reform, and that health insurance coverage does not guarantee access to medical care."

As I have been saying for a long time, the Obama health care nuts do not have any secret, magical idea or plan for cutting health care costs.  In fact, as I have written here and here, we should expect Federalization to exacerbate the bad information and incentives that make health care more expensive.  The only idea they have, in fact, is the only one that anyone ever has in government for this kind of thing -- price controls

Over the weekend, The Washington Postpublished a Q&A-style explainer on the Independent Payment Advisory Board—the panel of federal health care technocrats charged with keeping down spending growth on Medicare.

The details are complicated, but the gist is simple: If spending on Medicare is projected to grow beyond certain yearly targets, then it’s IPAB to the rescue: The 15-member panel appointed by the president has to come up with a package of cuts that will hold Medicare’s growth in check. If Congress want to override that package, it only has two options: Vote to pass a different but equally large package of cuts or kill the package entirely with a three-fifths supermajority in the Senate.

The Post lays out the basic framework above. But what it doesn’t explain in any detail is exactly how those cuts will be achieved. And that, of course, is where the difficulty begins: Here’s how The Wall Street Journal’s editorial board explained it last month: “Since the board is not allowed by law to restrict treatments, ask seniors to pay more, or raise taxes or the retirement age, it can mean only one thing: arbitrarily paying less for the services seniors receive, via fiat pricing.” Medicare already centrally sets the prices it pays for the services of doctors and hospitals. Given the board's limitations, the most likely cuts we’ll see from IPAB, then, will be arbitrary, quality-blind reductions in these payments (though hospitals will be exempt from cuts for the first couple years).

We know what happens next: Providers stop taking on new Medicare patients, or drop out of the system entirely. In Medicaid, which pays far lower rates than Medicare (which pays somewhat lower rates than private insurance), this is already common: As one emergency physician recently told The New York Times, “Having a Medicaid card in no way assures access to care.” If IPAB cuts Medicare provider payments down to the bone, it could end up transforming Medicare into a seniors’-version of Medicaid.

From the Thin Green Line, an environmental blog I often criticize for it incredible credulity in accepting bizarre figures, comes this whopper:

Is Ganja green? TGL has covered the issue before, but a new study undertaken by a Lawrence Livermore scientist gives us some real numbers (H/T New York Times Green)....

In California, indoor cultivation is responsible for a whopping 8 percent of household electricity usage. But, California grows only about a fifth of the nation's bong hits and much of what we grow goes to out-of-state consumers....

The study, written by Evan Mills on his own (non-government-funded) time, makes the case for legalizing and regulating grow operations, suggesting that if marijuana didn't have to be grown in secret and indoors, efficiency could be improved by as much as 75 percent.

Readers of this blog will know that I am all for marijuana legalization.  But how can anyone accept this figure.  Eight percent?  Really?   This would be larger than the total residential electricity use of Vermont and New Hampshire combined, solely for pot growing in California.  I am calling BS.

Via Reason from the pathetic hulk that was once the great state of New York

Dodgeball, Red Rover, Wiffle Ball – those time-honored kids' games, along with activities like Steal the Bacon and Capture the Flag – have been deemed dangerous by the state as part of an effort to tighten regulations for summer camps in the area.

Any indoor or outdoor recreational program that offers two or more organized activities, including one that falls on the "risky list" determined by state officials, will be considered a summer camp under the new rules and subject to the associated regulations.

The rules aim to curtail a loophole in previously passed regulations by the state Health Department that count activities like horseback riding and archery among the "risky list," but do not include many activities like Freeze Tag and kickball featured in indoor programs.

Update: They backed off.   Kids will still be at risk from unregulated red rover.

Donna Laframboise discusses 18th century transportation issues, and particularly the horse manure problem:

The Superfreakonomics authors draw heavily on the work of Eric Morris, whose urban planning Masters thesis explored the reality of horse-based transportation in 19th-century cities. A user-friendly encapsulation of his research appears in an 8-page article here. (It was published in Access, a U of California transportation publication. The entire issue is available here.)

Morris points out that, by the late 1800s, large urban centers were “drowning in horse manure.” Not only were there no solutions in sight, people were making dire predictions:

In 1894, the Times of London estimated that by 1950 every street in the city would be buried nine feet deep in horse manure. One New York prognosticator of the 1890s concluded that by 1930 the horse droppings would rise to Manhattan’s third-story windows.

The automobile helped solve this growing ecological problem.  Back in 2006, I had considered the same thing with a hypothetical blog post from 1870 which is pretty close to the Times of London article quoted above (which I had never seen):

As the US Population reaches toward the astronomical total of 40 million persons, we are reaching the limits of the number of people this earth can support.    If one were to extrapolate current population growth rates, this country in a hundred years could have over 250 million people in it!  Now of course, that figure is impossible – the farmland of this country couldn’t possibly support even half this number.  But it is interesting to consider the environmental consequences.

Take the issue of transportation.  Currently there are over 11 million horses in this country, the feeding and care of which constitute a significant part of our economy.  A population of 250 million would imply the need for nearly 70 million horses in this country, and this is even before one considers the fact that "horse intensity", or the average number of horses per family, has been increasing steadily over the last several decades.  It is not unreasonable, therefore, to assume that so many people might need 100 million horses to fulfill all their transportation needs.  There is just no way this admittedly bountiful nation could support 100 million horses.  The disposal of their manure alone would create an environmental problem of unprecedented magnitude.

Or, take the case of illuminant.  As the population grows, the demand for illuminant should grow at least as quickly.  However, whale catches and therefore whale oil supply has leveled off of late, such that many are talking about the "peak whale" phenomena, which refers to the theory that whale oil production may have already passed its peak.  250 million people would use up the entire supply of the world’s whales four or five times over, leaving none for poorer nations of the world

To the last point, my article on how John D. Rockefeller and Standard Oil saved the whales is here.

In my Forbes columns over the past few weeks, I have been writing about information and incentive problems with any sort of Obamacare type system.  One of the points I made last week was this:

One of the key selling points of Obamacare was that it would reduce cost, in large part through smart public-spirited people making optimized decisions from the top in Washington.  Ignoring the fact that no other agency that has promised such angels of public service has ever delivered them, we discussed in the last few weeks how this task is impossible.  But we should have known that already through our past experience with the political process.  Political decisions are made politically, not by optimizing some public good equation.    Does anyone believe that come election time, Congress won’t vote to add mandates to procedures to placate powerful groups in their base, irrespective of the future costs this would incur?

Need an example?

In 2007 breast cancer was the third leading source of cancer mortality in the US, but it was by far the largest recipient of government cancer research dollars, nearly double that spent on any other type of cancer.    In 2009, out of hundreds of medical procedures, only two procedureswere on the mandated must-carry list of all fifty states – mammography and breast reconstruction.  It is no accident that both of these are related to breast cancer.  With its links to women’s groups and potent advocacy organizations, breast cancer is a disease that has a particularly powerful political lobby.    Similarly, we should expect that, at the end of the day, pricing and coverage decisions under Obamacare will be made politically.  Not because anyone in this Administration is particularly bad or good, but because that is what always happens.

This post from Q&O is a tad old but gets at just this point with a real-life Obamacare example

The opening line in a New York Times piece caught my attention.  It is typical of how government, once it gets control of something, then begins to expand it (and make it more costly for everyone) as it sees fit.  Note the key falsehood in the sentence:

The Obama administration is examining whether the new health care law can be used to require insurance plans to offer contraceptives and other family planning services to women free of charge.

Yup, you caught it – nothing involved in such a change would be “free of charge”.   Instead others would be taxed or charged in order for women to not have to pay at the point of service.  That’s it.  Those who don’t have any need of contraception will subsidize those who do.  And the argument, of course, will be the “common good”.   The other argument will be that many women can’t afford “family planning services” or “contraception”.

But the assumption is the rest of you can afford to part with a little more of your hard earned cash in order to subsidize this effort (it is similar to other mandated care coverage you pay for but don’t need).  Oh, and while reading that sentence, make sure you understand that the administration claims it has not taken over health care in this country.

The next sentence is just as offensive:

Such a requirement could remove cost as a barrier to birth control, a longtime goal of advocates for women’s rights and experts on women’s health.

So now “women’s rights” include access to subsidies from others who have no necessity or desire to pay for those services?  What right does anyone have to the earnings of another simply because government declares that necessary?

It is another example of a profound misunderstanding of what constitutes a “right” and how it has been perverted over the years to become a claim on “free” stuff paid for by others.

Administration officials said they expected the list to include contraception and family planning because a large body of scientific evidence showed the effectiveness of those services. But the officials said they preferred to have the panel of independent experts make the initial recommendations so the public would see them as based on science, not politics.

Really?  This is all about politics.  The fact that the services may be “effective” is irrelevant to the political questions and objections raised above.  This is science being used to justify taking from some to give to others – nothing more.

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.

I return to an old favorite topic of mine this week, government subsidies for business relocation, in my column at Forbes.com.  An excerpt:

To see this clearer, lets take the example of Major League Baseball (MLB).  We all know that cities and states have for years been massively subsidizing new baseball stadiums for billionaire team owners.  Let’s for a minute say this never happened – that somehow, the mayors of the 50 largest cities got together in 1960 and made a no-stadium-subsidy pledge.  Would baseball still exist?  Sure!  Teams like the Giants have proven that baseball can work financially in a private park, and baseball thrived for years with private parks.  But would baseball be in the same cities?  Well, without subsidies, baseball would likely be in the largest cities, like New York and LA and Chicago, which is exactly where they are now.  The odd city here or there might be different, e.g. Tampa Bay might never have gotten a team, but that might in retrospect have been a good thing.

The net effect in baseball is the same as it is in every other industry:  Relocation subsidies, when everyone is playing the game, do nothing to substantially affect the location of jobs and businesses, but rather just transfer taxpayer money to business owners and workers.