Coyote Blog

For much of my adult life, Ralph Nader was my least favorite living Princeton alum*.  But Eliot Spitzer may be challenging for the title.  Sure, I never really liked Spitzer when he was at Princeton, but I never really liked any of the student government types, as evidenced by the fact that I led a mass-mooning of one governing council meeting (yes, I know, you are shocked that this sophisticated commentator could have been so immature).  Besides, Spitzer was the butt of one of Princeton's great jokes and works of performance art, when he was defeated by the Antarctic Liberation Front.

But since his tenure as AG and now governor of New York, the guy has turned from an irritating joke to a real threat to freedom.  His abuse of the AG job for personal aggrandizement is legend, and, after having been given a free pass by the press in that job, he is finally being cornered for various ethical violations. 

So it is with great satisfaction that I read today that Spitzer was forced to back off his plan to tax out of state Internet sales, abandoning his unique view that an affiliate program created a corporate presence in-state.

Update:  A Spitzer roundup of sorts at Reason.

David Stern is putting a gun to the head of Seattle taxpayers:

NBA commissioner David Stern is putting the screws to Seattle
in his attempts to get the community to provide taxpayer subsidies that
are lucrative enough to keep the team from departing the "Emerald City"
to even greener fields in Oklahoma.

Stern blasts city officials
and the overwhelming majority of voters in the city for passing a law
requiring (gasp!) that any funds used to help build an arena earn the
same rate of return as a treasury bill. "That measure simply means
there is no way city money would ever be used on an arena project,"
Stern said. Effectively, Stern has just confirmed what sports
economists have known all along: taxpayer spending on sports
infrastructure is unlikely to provide significant returns on the
investment.

We went through the exact same thing here in Phoenix, with various outsiders and city politicians chiding the voters to voting down taxpayer funded palaces for the Cardinals and Coyotes  (eventually, they found a sucker in the local city of Glendale).  In the past, I have written about sports team and corporate relocations as a prisoners dilemma game.

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.

The Sports Economist writes about this move in the context of another economic game:

Indeed this is a classic example of the time inconsistency problem for
which Finn Kydland and Ed Prescott (my graduate school macro
professor!) won the Nobel Prize in 2004. Stern would like to threaten
Seattle with the permanent loss of their NBA team in order to secure
taxpayer concessions now. But should the team move, the NBA has every
reason to want to back off its previous threats and relocate a team
back into to the area due to the size, location, and income levels of
the city. Even having lost a team, Seattle will likely remain a better
candidate for a successful franchise than smaller and poorer cities
such as New Orleans or Memphis. Certainly Seattle should not fall for
Stern's bluster.

I have written a number of times about the growing ranks of RVers who have completely abandoned a permanent address and spend their entire life on the road.  I know these folks because I hire about 400 of them every summer to run our campgrounds and recreational facilities.  It is a fascinating subculture, that in some ways mirrors the habits of a great nomadic tribe that roams all over the country but comes together in a few camps to meet and interact in the winter (e.g. Colorado River between Yuma and Quartzite).  The numbers are large:

The Census says more than 105,000 Americans live full-time in RVs,
boats or vans, though one RV group says the number is more like half a
million. Because of their nomadic ways, pinning down their number with
any certainty is difficult.

The AP has an article about how difficult it is becoming for some of these folks to vote, since a number of states are beginning to require a permanent physical address  (most of these folks have PO Boxes run by companies that forward their mail).

A total of 286 people who live full-time in their recreational vehicles
were dropped from the voter rolls in one Tennessee county over the past
two years because they did not have a genuine home address, only a
mailbox. That has left them unable to vote in national or local
elections....

But some elections officials say that voters should have a real
connection to the place where they are casting ballots, and that RVers
are registering in certain states simply to avoid taxes. Some of them
rarely, if ever, set foot in those states.

I guess they need a real connection to their state, kind of like, say, Hillary Clinton had to New York when she ran for the Senate there.  I know that the immediate reaction from many of you may be that this is
somehow weird and, being weird, it is OK to lock them out of voting.
But I can attest these folks are all quite normal people who are
seduced by the ability to live anywhere they want, on the spur of the
moment, and who revel in being able to simplify their life enough to
fit all their worldly goods into an RV and hit the road.

This part is total BS:

David Ellis, the former Bradley County Election Commission director who
started removing full-time RVers, said they have no connection to the
area and are simply "dodging their responsibility to pay their fair
share" of taxes.

RVers pay taxes in the states in which they work, not in their home state  (just like everyone else, by the way).  RVers, who rent their living site, pay the same property taxes (ie zero) that any other renter pays.

For the record, none of my folks have reported a problem.  However, these problems are just going to get worse.  Crackdowns both on illegal immigration and hypothesized terrorism are making more difficult to complete any number of basic tasks, like banking, without a permanent physical address.

From the New York Post via Carpe Diem and TJIC:

For
seven hours a day, five days a week, hundreds of Department of
Education employees - who've been accused of wrongdoing ranging from
buying a plant for a school against the principal's wishes to
inappropriately touching a student - do absolutely no work.

The
Post has learned that the number of salaried teachers sitting idly
waiting for their cases to be heard has exploded to 757 this year -
more than twice the number just two years ago - at a cost of about $40
million a year, based on the median teacher salary.

The city pays millions more for substitute teachers and employees to replace them and to lease rubber-room space.

Meanwhile,
the 757 - paid from $42,500 to $93,400 a year - bring in lounge chairs
to recline, talk on their cellphones and watch movies on portable DVD
players, according to interviews with more than 50 employees.

At a recent meeting of the National Associate of State Treasurers
(Yawn), John Podesta, after stating hilariously that what the world
really needed was continued leadership by state treasurers on the
global warming issue, argued: 

"Climate change is a threat to the long-term value of the economy and
failure to calculate its impacts or manage or reduce its harm mean that
our assets are being over valued, and the risks we face are being under
reported."

I have a lot of interest in global warming, which is why I created a second blog Climate Skeptic to deal with these issues.  There is a lot about anthropogenic warming we do not understand.  But what is nearly a total 100% lock is that, at least for the United States, the cost to our economy of regulations to limit CO2 will be far higher than the likely net-negative effects of warming (Al Gore's 20 foot sea level rises and other anti-rational claims notwithstanding).  At its heart, isn't the risk really of damage from government regulation, rather than the climate?

Via Michael Giberson of Knowledge Problem, the NY Attorney General is concerned that certain companies are not disclosing global warming-related risks, but he is at least more honest about what those risks are:

Last Friday, New York Attorney General Andrew Cuomo sent subpoenas
to five power generating companies seeking to find out if the companies
had properly disclosed financial risks associated with proposed new
coal-fired power plants.

All five of the letters accompanying the subpoenas are available from the NYAG's website.  Here is the opening paragraph of the letter to Dominion Resources, Inc.:

We are aware that Dominion Resources, Inc., ("Dominion")
has plans to build a coal-fired electric generating unit that would
generate 585 megawatts of electricity without current plans to capture
and sequester the resulting carbon dioxide (CO2) emissions. The
increase in CO2 emissions from the operating of this unit, in
combination with Dominion's other coal-fired plants, will subject
Dominion to increased financial, regulatory, and litigation risks. We
are concerned that Dominion has not adequately disclosed these risks to
its shareholders, including the New York State Common Retirement Fund,
which is a significant holder of Dominion stock. Pursuant to the
Attorney General's investigatory authority under New York General
Business Law § 352, and New York Executive Law § 63(12), accompanying
this letter is a subpoena seeking information regarding Dominion's
analysis of its climate risks and its disclosures of such risks to
investors.

A little later, the letter gets more specific: "For example, any one
of the several new or likely regulatory initiatives for CO2 emissions
from power plants "“ including state carbon controls, EPA's regulations
under the Clean Air Act, or the enactment of federal global warming
legislation "“ would add a significant cost to carbon-intensive coal
generation, such as the new coal plant planned by Dominion." In
addition to Dominion, the NYAG's office sent subpoenas to AES, Dynegy,
Peabody, and Xcel. Here is the story from the New York Times.

The letter doesn't say so explicitly, but I'm sure the message was
clear, that in addition to new or likely legislative actions and
substantive regulatory initiatives, the companies also faced the risks
and costs associated with being harassed by swarms of officers from the
NYAG's office.

You can see what is going on here -- following in the rich tradition established by the egregious Eliot Spitzer, the NY AG is again overreaching his office's authority and attempting to set regulatory policy rather than enforce it.  But at least he is honest in portraying the main risk to be a government regulatory backlash on these companies.

Thinking about this, couldn't every company put this in their boilerplate?  I mean, for most of us, the number one risk we face all the time is that the government will either do something to us specifically or the economy in general to hurt results.  Let's just have everyone add the line "the government poses a huge risk to our business plan" and be done with it.

Stephen Dubner's roundtable on the Economics of Street Charity got me thinking about a recent experience visiting Boulder, Colorado, an odd but lovely town in which I used to live.

Here in Phoenix, most of our panhandlers show little or no innovation.  They are still using the "will work for food" or "Vietnam vet" cardboard signs that were an innovation years ago, but now are tired and hard to believe.  All the signs were generic.  None of them seemed tailored to the local audience. 

So where is the innovation in begging occurring?  Someone must have first thought of the "will work for food" come-on which I presume was so initially successful, since everyone copied it, just as they copy any successful innovation in the marketplace?

My vote for the Silicon Valley of Begging is Boulder, Colorado, and specifically on the Pearl Street Mall.  I have recently visited homeless capital Santa Monica, and San Francisco, as well as New York and Boston, and none of their beggers hold a candle to those in Boulder.  Here is why:

• Their come-ons were unique -- I never saw the same one twice
• Their come-ons were well tailored to the local audience.  "Need Money for Pot" is not going to get one anywhere in Oklahoma, but it is very likely to elicit a chuckle and a buck from a UC college student or sixties-survivor Boulder resident.  Given that President Bush has about a 0.01% approval rating in Boulder, many of the come-ons led one to believe that giving the beggar a buck would show one's disdain for GWB.

Via the New York Times:

THE term "food miles" "” how far food has traveled before you buy it "” has entered the enlightened lexicon.

Which should tell you all you need to know about the "enlightened."

There are many good reasons for eating local "” freshness, purity,
taste, community cohesion and preserving open space "” but none of these
benefits compares to the much-touted claim that eating local reduces
fossil fuel consumption. In this respect eating local joins recycling,
biking to work and driving a hybrid as a realistic way that we can, as individuals, shrink our carbon footprint and be good stewards of the environment.

Actually, most recycling, with the exception of aluminum which takes tons of electricity to manufacture in the first place, does nothing to reduce our carbon footprint.  And I must say that I often enjoy buying from farmers markets and such.  But does "food miles" mean anything?  And should we really care?  Well, here is an early hint:  The ultimate reduction in food miles, the big winner on this enlightened metric, is subsistence farming.  Anyone ready to go there yet?  These are the economics Ghandi promoted in India, and it set that country back generations.

Well, lets go back to economics 101.  The reason we do not all grow our own food, make our own clothes, etc. is because the global division of labor allows food and clothing and everything else to be produced more efficiently by people who specialize and invest in those activities than by all of us alone in our homes.  So instead of each of us growing our own corn, in whatever quality soil we happen to have around our house, some guy in Iowa grows it for thousands of us, and because he specialized and grows a lot, he invests in equipment and knowledge to do it better every year.  The cost of fuel to move the corn or corn products to Phoenix from Iowa are trivial compared to the difference in efficiency that guy in Iowa has over me trying to grow corn in my back yard.  Back to the New York Times:

On its face, the connection between lowering food miles and decreasing greenhouse gas emissions is a no-brainer.

Sure, if you look at complex systems as single-variable linear equations.  Those of us who don't immediately treated the food mile concept as suspect.  It turns out, for good reason:

It all depends on how you wield the carbon calculator. Instead of
measuring a product's carbon footprint through food miles alone, the
Lincoln University scientists expanded their equations to include other
energy-consuming aspects of production "” what economists call "factor
inputs and externalities" "” like water use, harvesting techniques,
fertilizer outlays, renewable energy applications, means of
transportation (and the kind of fuel used), the amount of carbon
dioxide absorbed during photosynthesis, disposal of packaging, storage
procedures and dozens of other cultivation inputs.

Incorporating
these measurements into their assessments, scientists reached
surprising conclusions. Most notably, they found that lamb raised on
New Zealand's clover-choked pastures and shipped 11,000 miles by boat
to Britain produced 1,520 pounds of carbon dioxide emissions per ton
while British lamb produced 6,280 pounds of carbon dioxide per ton, in
part because poorer British pastures force farmers to use feed. In
other words, it is four times more energy-efficient for Londoners to
buy lamb imported from the other side of the world than to buy it from
a producer in their backyard. Similar figures were found for dairy
products and fruit.

All I can say is just how frightening it is that the paper of record could find this result "surprising."  The price mechanism does a pretty good job of sorting this stuff out.  If fuel prices rise a lot, then agriculture might move more local, but probably not by much.  The economies to scale and location just dwarf the price of fuel. 

By the way, one reason this food-mile thing is not going away, no matter how stupid it is, has to do with the history of the global warming movement.  Remember all those anti-globalization folks who rampaged in Seattle?  Where did they all go?  Well, they did not get sensible all of a sudden.  They joined the environmental movement.  One reason a core group of folks in the catastrophic man-made global warming camp react so poorly to any criticism of the science is that they need and want it to be true that man is causing catastrophic warming -- anti-corporate and anti-globalization activists jumped into the global warming environmental movement, seeing in it a vehicle to achieve their aims of rolling back economic growth, global trade, and capitalism in general.  Food miles appeals to their disdain for world trade, and global warming and carbon footprints are just a convenient excuse for trying to sell the concept to other people.

A little while back, I posted a similar finding in regards to packaging, that is worth repeating here for comparison.

Contrary to current wisdom, packaging can reduce total rubbish
produced. The average household in the United States generates one
third
less trash each year than does the average household in Mexico,
partly because packaging reduces breakage and food waste. Turning a
live chicken into a meal creates food waste. When chickens are
processed commercially, the waste goes into marketable products
(such as pet food), instead of into a landfill. Commercial processing
of 1,000 chickens requires about 17 pounds of packaging, but it also
recycles at least 2,000 pounds of by-products.

More victories for the worldwide division of labor.  So has the NY Times seen the light and accepted the benefits of capitalism?  Of course not.  With the New Zealand example in hand, the writer ... suggests we need more state action to compel similar situations.

Given these problems, wouldn't it make more sense to stop obsessing
over food miles and work to strengthen comparative geographical
advantages? And what if we did this while streamlining transportation
services according to fuel-efficient standards? Shouldn't we create
development incentives for regional nodes of food production that can
provide sustainable produce for the less sustainable parts of the
nation and the world as a whole? Might it be more logical to
conceptualize a hub-and-spoke system of food production and
distribution, with the hubs in a food system's naturally fertile hot
spots and the spokes, which travel through the arid zones, connecting
them while using hybrid engines and alternative sources of energy?

Does anyone even know what this crap means?  You gotta love technocratic statists -- they just never give up.  Every one of them thinks they are smarter than the the sum of billions of individual minds working together of their own free will to create our current world production patterns.

Postscript: There is one thing the government could do tomorrow to promote even more worldwide agricultural efficiency:  Drop subsidies and protections on agriculture.   You would immediately get more of this kind of activity, for example with Latin America and the Caribbean supplying more/all of the US's sugar and other parts of Asia providing more/all of Japan's rice.

Via the Washington Post:

It has become a Capitol Hill ritual: A few senators, always including the New York Democrat Charles E. Schumer, introduce a bill to punish China
if its leaders do not raise the value of the nation's currency. Photos
are taken, news releases are issued, but nothing really happens.

This
year, the atmosphere on the Hill is markedly different. Powerful
senators from both sides of the aisle, Schumer among them, are pushing
two bills that threaten retaliatory action if China does not budge. For
the first time, the idea is gaining broad support. The bills are moving
swiftly through the Senate, and many analysts expect one will pass.

If the bill's authors are successful, the effect at a minimum will be to raise consumer prices in the United States and lower them for Chinese citizens.  So we are going to "punish" China by making our own citizens pay higher prices.  How does this make any sense?  Also, in the process, let's make sure we reduce the capacity of China to buy US government debt, which to this point has been reducing the cost of the Federal budget deficit.

Tyler Cowen argues this is the best we can expect -- the worst is a substantial debalization in the Chinese economy... and ours.  I wrote much more on continuing to allow the Chinese government to subsidize American consumers here.

Phil Miller observes that the new Hawkeye football coach is now the highest-paid government employee in Iowa.  This is wildly unsurprising.  In fact, I renew my question that we never got a final answer on:  Is there any state in which a college athletics coach is NOT the highest paid public employee in the state?

Update:  Tim, who has a blog at Movementarian.com writes with lots more thoughts:

Being from Texas I tried to find some numbers on your question:

- David Lopez, chief executive of the Harris County Hospital
District, has agreed to a three-year deal that could pay him $500,000
annually and would make him the highest-paid county employee.    (
http://www.chron.com/disp/story.mpl/metropolitan/4986829.html)

 

- Already, the retirement system's chief investment officer, Britt
Harris, is the highest-paid state employee (excluding higher-education
officials and athletic coaches, whose pay isn't tracked by the
comptroller's office). Harris earns a base salary of $480,000 and is
eligible for a maximum bonus of $360,000.  (
http://www.statesman.com/blogs/content/shared-gen/blogs/austin/finance/entries/2007/06/15/bonus_babies_part_i_1.html
)

Other State's

Nevada: Public employees who repair Nevada's local streets and
highways, operate its city and county jails and fill nonteaching jobs
in its school districts are the best paid in the country when compared
with their counterparts in the other 49 states and the District of
Columbia, according to U.S. Census figures for 2001.  (http://www.reviewjournal.com/lvrj_home/2003/May-18-Sun-2003/news/21349243.html)

 

New York: Alain Kaloyeros, vice president and chief administrative
officer at the College of Nanoscale science and Engineering and an
expert in the field of nanotechnology, became the highest paid employee
after the State University of New York (SUNY) chancellor approved a
$142,000 per year raise, bringing his annual salary to $666,995, the
Associated Press reports. (
http://compensation.blr.com/display.cfm/id/155584)

However, based on football coaches in Texas alone (most of whom
make more than $1 mil), none of these other employees come close (just
as you predicted).  Even college basketball coaches are making alot of
money now.  In fact, before A&M's Gillespie bolted to Kentucky, he
was offered $1.75 million a year, up from $500k: (http://sports.espn.go.com/ncb/news/story?id=2832406) -- his replacement, Mark Turgeon, signed a deal worth $1.2 million/year.

 

Hell, even highschool football coaches make more than most other public employees:
http://72.14.235.104/search?q=cache:LIgABghniwwJ:www.statesman.com/sports/content/sports/stories/highschool/08/27salary.html+In+dollars,+coaches+beat+teachers&hl=en&ct=clnk&cd=1

 

Note: this is one of the better articles covering this issue: http://www.usatoday.com/sports/college/football/2006-11-16-coaches-salaries-cover_x.htm

 

Regarding the Nevada example above, UN basketball coach is raking in more dough than any of those employees as well: http://sports.espn.go.com/ncb/news/story?id=2912916

 

And for the record, I think the coaches that get a cut of ticket
revenues are in a conflict of interest, due to the fact that more than
90% of Div I schools fund athletics departments through student fees (
http://www.mises.org/story/2233#fn6)
and their sport typically get a large amount of promotion through
by the institution.  Then again, the entire collegiate enterprise is
backwards to begin with...

So I guess the Democratic response to the Bush administration's 8-years of disrespect for the separation of powers is to one-up him?

On the op-ed page of the New York Times,
Jean Edward Smith argues that if the Roberts Court keeps on its current
path, a future Democratic President and Democratic Congress should
consider a court-packing plan and add Justices to ensure a liberal
majority on the Supreme Court. This might be necessary, Smith contends,
because the Roberts Court has "adopt[ed] a manifestly ideological
agenda," "plung[ing] the court into the vortex of American politics"
where it now decides political questions rather than the purely legal
decisions of the Warren Court.

And by the way, I would have said that the Roberts court has followed a distinctly non-ideological agenda.  In fact, I can't figure out how they are making decisions from one case to the next.  This court bears the hallmarks of one that is really evenly divided, with backroom negotiating going on to get a majority that reeks of compromise rather than anything either ideological or Constitutional.  Every major decision seems to have five or six written opinions.

Eliot Spitzer has been caught using the power of his office to go after his enemies.  Wow, what a surprise.  Frequent readers of this blog will know I don't think much of Spitzer, who tended to overreach his office all the way back to student government at Princeton.  What I found surprising, though, was this quote from the NY Times:

The report was a blow to Mr. Spitzer, a former prosecutor who came into
office less than seven months ago with a reputation for integrity and
who promised to bring a new ethical climate to Albany.

A reputation for integrity with whom?  Mr. Spitzer, as attorney general, was a sort of liberal bookend to George W. Bush, consistently exceeding the limits of his authority to achieve some goal he argued trumped a narrow reading of the law.  His supporters, just as Bush's do, justify his overreaching his office on the grounds that the ends justified the means, in Spitzer's case the assault on various corporate and Wall Street firms liberals were frustrated that Washington would not pursue.  Critics like myself argued that many of his crusades were abuses of his prosecutorial office to pursue personal vendetta's and to generate headlines to position himself for a run for governor.

I would think that any reasonable definition of "integrity" when applied to an attorney general would include a respect for the letter of the law, something that even his supporters would probably admit Spitzer cast aside when he thought it was for a good cause.  The only interpretation of "integrity" I can come up with in the context of this article is that Spitzer had integrity in the past because his abuses of power were in pursuit of causes the author agreed with.

Look, this is the man that began supporting campaign finance limitations, which tend to support incumbents, starting the day after he became an incumbent.  This is the man who described himself as governor thus:  "I
am a fucking steamroller and I'll roll over you or anybody else".  This is the man who involved the State of New York and the courts in a private compensation deal, just to burnish his populist credentials.  In the latter trial, he explicitly left prominent Democrats who had the most involvement with the deal alone and indicted side figures who were Republicans.  Tom Kirkendall has a much longer bill of particulars against Spitzer here.

Today I read one of the most bizarre articles I have read in quite a long time.  Murray Whyte of the Toronto Star (HT: Junk Science) seems to have developed a fantasy that climate change will drive people out of Arizona and back to Cleveland, Buffalo and Toronto.  Uh, yeah.  The article is laden with shoddy science, gross contradictions, bad economics, and a recurrent envy of wealth and success.  The article is so much of a mess that I just can't resist fisking it in detail, despite its length. 

Before I begin, though, I am not necessarily a huge Arizona booster.  Phoenix works pretty well for me at this point in my life, but I have lived in many great places.  And I am the last one to criticize anyone who decides that they just can't live in a place where it is 110F for 6 weeks straight.  That being said, lets get into it.  The article is titled: 

Climate Change Herald Mass Migration:  Concerns
raised as the U. S. Southwest grapples with historic drought, water
supply depletion and the creeping sense that things can only get worse.

We will get into all this later, but you gotta love the "creeping sense that things can only get worse."  Who has this sense, other than the author?  Phoenix is one of the most optimistic and positive places I have ever lived.

The state of Arizona has more than 300 golf courses, a booming economy,
endless sunshine and, at last count, at least five Saks Fifth Avenue
department stores "” in short, nearly everything the well-heeled
sybarite would need.

He sets the tone right up front.  This article is not about climate or rain or anything else.  It is about envy and a distaste for other people's wealth and success.

There's just one thing missing: rain.

For the past
month, not a drop has fallen in Maricopa County, home to greater
Phoenix, the state's economic engine and fastest-growing hub. Over that
period, temperatures have hovered five to seven degrees above the
30-year average, at one point holding steady at over 43C for 10
straight days, while hundreds of brush fires burned statewide.

Its the freaking Sonoran desert!  We go months without rain.  We are supposed to go months without rain.  We average like 8 inches a year.  This county went months at a time without rain long before human beings burned their first molecule of fossil fuels.  If we got much more rain than this, all of our Saguaro cactuses would die.

And 43c is 109F.  We almost always go 4-6 weeks with temperatures over 109.  And he is saying this is 6C (10F) more than normal.  Get real!  I can't remember any June or July we ever went even 5 straight days under 100F during this part of the summer. By the way, Arizona's highest June temperature was recorded in 1994, its highest July temperature in 1905, and its highest August temperature in 1933. So much for record highs of late. (Maybe one reason it seems to be getting hotter is that they are measuring the temperature of asphalt parking lots).

"And they're still building billion-dollar houses, right in the
middle of the desert," says Paul Oyashi, incredulous. "It doesn't seem
rational, does it?"

Holy Crap!  Billion dollar houses!  Our retractable roof football stadium didn't cost a billion dollars, Canadian or US.  Oh, and you see that having gone 4 paragraphs without being snide about wealth, he needed to get back to this topic.  And who the $%@!! is Paul Oyashi?

In a word, no. Rational, some would say,
would be a mass migration from the drought-ravaged American southwest,
where Southern California just experienced its driest 12-month period
in recorded history, to more verdant climes.

One such place?
Cleveland, the battered hub of Cuyahoga County, where Oyashi sits as
director of the department of development. "We don't have earthquakes,
we don't have brush fires, we've got all the fresh water you could ever
want," Oyashi says. "That's logic. But the problem is, it flies in the
face of reality."

So this Oyashi guy is the development guy for Cleveland?  Who made the Toronto Star a shill for the Cleveland chamber of commerce?  Is it really this writer's premise that we are on the verge of a reverse migration from Phoenix to Cleveland?  My sense is that we are not on the verge of such a reverse migration, and this is a chance for everyone in the Rust Belt to lament that fact.

At first glance, the crises
of the rust belt and the Southwest would seem unrelated. They are, in
fact, inexorably linked. Each has what the other does not. In Phoenix,
tremendous affluence; in Cleveland, and in Detroit, Toledo, Youngstown,
Buffalo, Rochester, Thunder Bay and Sault Ste. Marie, abundant,
near-endless water "“ in the Great Lakes alone, as much as 25 per cent
of the world's supply.

Note the writer implicitly accepts the zero-sum wealth fallacy -- in his eyes, wealth is a natural resource just like water.  Cleveland has water, Phoenix has wealth.  I won't get into this fallacy much here, but suffice it to say wealth is not something that springs magically from a well.  More here.  For a hundred years, Cleveland was a wealth-creation machine.  To the extent they are not today, they might check their tax and regulatory policies.

And as the Southwest and parts of the
Southeast grapple with historic drought, water supply depletion "“
earlier this year, Lake Okeechobee in Florida, a primary water source
for the Everglades, caught fire "“ and the creeping sense that, with
climate change, things can only get worse, a new reality is dawning:
that logic, finally, will have a larger role to play in human migratory
dynamics, continent-wide. With it come not just doomsday scenarios, but
for certain urban centres left for dead in the post-industrial
quagmire, a chance at new life.

Wow, where to start?  Anyone note the irony of Cleveland pointing fingers at someone because their lake caught on fire?  Not that he bothers to explain why a lake catching on fire is related to climate change or even drought.  And why on an article on the Southwest is the only example of water shortage taken from Florida?

But what you really need to note is the arrogant technocratic bent of the author.  He is saying that all you idiots in Phoenix are defying reality, and that finally maybe you will start making the right choices.  This is typical elitist crap.  In the author's world, anyone who makes a choice the author would not is making a wrong choice.

"Sticking a straw in the Great
Lakes is not a solution to Phoenix's water problems," says Robert
Shibley, director of the Urban Design Project at the State University
of New York at Buffalo. "Maybe it's time to really think about what
constitutes need and stop spending money to build carrying capacity in
places that don't have it by nature, and start investing in places that
do."

Shibley has long been a champion of Buffalo's dormant
potential "“ a potential reduced by half or more through the latter part
of the 20th century, as the population fell below 300,000 from a
historic high of more than 700,000.

OK, now we quote a second guy about problems in the American Southwest.  This guy is from Buffalo, New York and is a promoter of the city of Buffalo.  Why is the Toronto Star giving these guys paid advertising for their causes under the guise of a news article?  And who the hell ever suggested sending water from the Great Lakes to Phoenix?  This is a "straw" man if I ever heard one.  Even if we started building pipelines east, there would be no reason to go past the Missouri or Mississippi.

And I love this "investing in carrying capacity" thing.  What the hell does that mean?  Yeah, we have to build infrastructure when the city grows.  We have to look for water, you have to pay for snow plows.  To build in the desert, we have to pipe in water to survive.  So what?  Buffalo and Toronto and Cleveland have to truck or pipe in coal and heating oil in the winter to survive.  What's the difference?

He suggests that in the
Great Lakes basin, where less than half a per cent of the world's
population sits within easy reach of a quarter of the planet's fresh
water, the opportunity for harmony exists. In a perfect world governed
by reason, Shibley says, the only robust economic centre in the region
would serve as its heart. And that would be Toronto.

Oh my God, what a statement.  Humanity's last hope to live in harmony with nature is to move to the Rust Belt, home of a disproportionate number of America's Superfund sites and the burning Coyahoga River.  These are cities that still use the Great Lakes as a toilet, dumping tons of raw sewage out in the lakes every day.

That's an
issue for international bureaucrats to solve. But the reality is this:
according to the U.S. government, the population of the United States
is expected to reach 450 million by 2050 "“ an increase of almost 50 per
cent. The predicted pattern of settlement for these new citizens will
take them to the seven most built-out regions of the country "“ Arizona,
Texas, Florida and California among them.

Have you seen Arizona?  Is this guy really arguing that Arizona is more built-out than Michigan, New York, and Ohio?

"You're going to have
150 million people living in at least seven of the major regions that
don't have water, don't have carrying capacity, can't feed themselves,"
Shibley says. "It's an ecological disaster waiting to happen. So
there's a good reason to think that people should come back to the
Northeast, where we have the carrying capacity, and have the water."

First, we have water.  We don't even have rationing here in Phoenix, and have not in my memory.  What does "have no water mean?"  The issue with Phoenix water is that we have about the cheapest water in the country.  Any overuse (whatever that means) of water here is because politicians pander to citizens and set the price very low.  So yes, I have a big lawn that seems nuts in the desert, but that is because my water bill here is less than half of what it was in Seattle(!)  Raise the price, and I would probably xerascape my lawn.

And what city in the Great Lakes area "feeds itself?"  No one in American cities feeds themselves.  Its called division of labor.

Some have already taken notice. Last year, The Economist
ranked Cleveland the most liveable city in America (26th in the world)
based on five categories: stability, health care, culture and
environment, education and infrastructure. Among the booming cities of
the Southwest, only Los Angeles and Houston cracked the top 50. Phoenix
didn't make the list, falling behind Nairobi, Algiers and Phnomh Penh
among the world's top 126 urban centres.

LOL.  I love it, we're behind Nairobi in some survey.  Look, there is a huge disconnect in this whole argument.  If Cleveland is really more liveable, then people will move there.  But the author is saying that people are moving to Phoenix instead.  So the theme of the article is that, what?  Phoenix has a problem with too many people moving in and has a problem with too many people moving out?  This is back to the technocratic elitism.  The author is just upset that ordinary people don't do what journalists tell them they should do.

Water is a factor. It
is already a significant issue in the major regions Shibley mentions
which, not coincidentally, depend on the same diminishing source for
much of their hydration.

In 1922, seven states "“ many of them,
like Nevada, Arizona, Texas and California, desperately arid "“ signed
the Colorado River Compact, which divvied up the mighty waterway's
seemingly abundant flow.

But recent observation of the river is
alarming. Only two per cent of the river's water makes it beyond the
U.S. border, where large Mexican cities dependent on its bounty are
left with a trickle "“ much less than they need. With climate change,
river flow has been dwindling, due, among other things, to decreasing
snowfall and less consequent spring runoff, which forms a significant
part of the Colorado River basin's lifeblood.

The river is the
main water source for more than 30 million people stretching from
Colorado in the north all the way down to the U.S.-Mexico border. By
the end of the century, inflow to the river (which includes runoff and
tributaries) is expected to drop by as much as 40 per cent.

First, who is saying that climate change is affecting the flow of the Colorado River?  Annual variations certainly affect it, but no one, and I mean no one, has created a climate model with the resolution to say that if there is substantial global warming in the future,the effect on the Colorado River flow will be X or Y.  Even the IPCC admits it really doesn't have a clue how world temperature changes might affect river flows, or the water cycle in general.  People always want to assume that hotter means drier, but hotter also means a lot more ocean evaporation which can translate into more, not less, precipitation. 

The problem with the use of the Colorado is not climate, but price.  As mentioned above, Phoenix has among the lowest water prices in the country.  In addition, farmers in Arizona and Southern California, who use most of the water despite the snide remarks about golf courses and billion dollar homes, get rates subsidized even lower.  Letting water prices rise to a real supply/demand clearing price that matches demand to river flow would solve the water "crisis" in about five minutes.

At
the same time, climate change projections show temperatures in the most
parched regions of the Southwest increasing between five and seven
degrees. That would make Phoenix's hottest days well over 54C.

Five to seven degrees C are at the high, worst case end of the IPCC projections, which are themselves grossly overstated for a number of reasons I wrote here and here.  Also, much of the warming would be winter nights -- you just can't add the global warming projections to the daytime maximums -- this is plain ignorant.   One thing I agree with -- if our daytime temperatures were to reach 54C, which is over 129F, I will be moving. 

In
Arizona, though, these warnings seem to fall on deaf ears. "The Greater
Phoenix region continues to bust at the seams," says Christopher Scott,
a research professor of water resource policy at the University of
Arizona in Tucson. "People look at this and think, `This can't go on,
can it?'"

But it does, and faster than anywhere else in America.
From 1990 to 2005, the population of Greater Phoenix grew 47.7 per
cent. In Scottsdale, a posh, affluent corner of Greater Phoenix that,
despite the lack of moisture, has more golf courses per capita than
anywhere else in America, growth was 72.1 per cent over the same
period.

Altogether, Greater Phoenix will likely crest at 4
million people some time this year, making it the fourth-largest
metropolitan area in America. By mid-century, some estimates suggest it
will reach 10 million, leaving Phoenix and Tucson fused in the desert.
"We'll basically be one massive urban corridor," Scott says.

Hey, he quoted a guy from west of the Mississippi!  This is the same kind of language that every anti-growth person uses in every city.  And by the way, there is that class thing again -- "posh, affluent."  And what does "bust at the seams" mean?  Phoenix has some of the least-bad traffic of any major city, we have sufficient water, sufficient power, lots of raw land, etc.

Phoenix
receives water from the Colorado through canals hundreds of kilometres
long, pumped through parched landscapes and small communities along the
way that take their fill. It is, essentially, a city that shouldn't be
there, so distant is the water supply.

"Shouldn't be there," by what definition?  Here is what that means:  "I, the author, don't think there should be a city there."  OK, don't live here.  Couldn't I write this sentence instead, "Cleveland receives petroleum from Texas and the Middle East in pipelines hundreds of miles long to provide needed heat in their cold winters.  Its is, essentially, a city that shouldn't be there, so distant is its energy supply."  Jeez, why is it we can have a global economy and division of labor and move resources around the world, but we have to build cities right next to water sources.  What about Aluminum, oil, gold, bauxite, lead, zinc, and iron?  Must we only build cities where all these are near by as well?

Scott, who has studied
water supply issues from India to Mexico to West Africa, has seen no
end to water-appropriation schemes in development-crazy Arizona.
"Piping in sea water from the Sea of Cortez in Mexico, desalinating it,
and then piping the salty brine back into the ocean "“ that's the kind
of hare-brained notion I've heard here," he says. "Do I consider these
things tenable? Not at all. But these are proposals people are talking
about seriously, in public, and they're getting a lot more play."

Scott
worries that technology may well make such things possible, but at a
destructive energy cost that simply exacerbates the problem. "We're
already starting to ask questions about the larger issues associated
with pumping in all that water along those canals "“ the energy costs,
and the carbon impact associated with it," he says. "They may solve the
water issue short-term, but they pull the sustainability rug out from
under you in the process."

We now see the author's real position.  He is not really lamenting the lack of water in the Southwest - he likes it.  He wants to drive people out.  We see he and professor Scott here actually lamenting the fact that technology might solve the water problem.

As to the sustainability issue, its absurd.  I will admit I don't know the figures, but I would be shocked if moving water around was even 0.1% of US energy use.  And besides, we move everything else around the world, moving water is trivial.

Finally, I don't really want to accept the author's premise that CO2 reduction is so critical, but if I were to accept it, I might point out that most of our electricity in Phoenix is provided by America's largest nuclear plant supplemented by natural gas, while mid-Western cities are fed mostly by big old honkin coal burning plants.  I would put our electric generation carbon footprint up against most any Rust Belt city.

The long-term solution, of course, is
to relocate people where they can comfortably exist. (Oyashi certainly
knows a place where you can get a decent house on the cheap.) In a free
society, of course, forced migration isn't really an option.

Do you get the sense he says the last line with a frustrated sigh, lamenting the fact that he can't force people to live where he thinks they should live?

But
as the sustainability crisis worsens, "usually economic forces will do
it for you," says Robert McLeman, a professor of geography at the
University of Ottawa. "When cities have to build new infrastructure and
to jack up taxes to cope, when the cost of running a household becomes
prohibitive, people will move."

Fine, but I will bet you a million dollars our taxes in Phoenix are a lot lower than they are in Toronto. And I know for a fact, since I almost moved there once, that our cost of living is a lot lower.  So maybe this infrastructure and sustainability crisis in Phoenix is a chimera?  Maybe its just wishful thinking?

..."Once the heat becomes unbearable, they may find the
freezing cold a little more bearable"“especially if it's not quite so
freezing cold as they remember."

It won't happen without help. In
Buffalo, Shibley speaks of a federal urban sustainabilty plan that
funnels federal money to the Great Lakes region to help draw population
back. It's been more than 30 years since the U.S. had a comprehensive
national urban plan. Looming ecological crises in burgeoning urban
centers more than justify a revival. "Cities don't grow by topsy, it's
not a thing of nature "“ it's a function of public policy," he says.

Oops, we seem to be abandoning the whole "free society" thing above.  Sure looks like they want to use federal law and tax policy to drive migration where they want it to go, against where people are moving currently of their own free will.  Oh, and city growth is NOT a function of public policy.  Cities grew up and evolved long before government ever took a heavy hand in their development.

But
a significant piece is missing, McLeman warns. "These cities will have
milder climates, be easier to live in, and cheaper," he says, "but
ultimately, they'll have to have the jobs to go with them."

Oyashi
is painfully familiar with the concept. Cleveland may have a surfeit of
cheap, liveable housing and an abundance of fresh water, but its
problems are legion. Abandoned industrial sites litter the area, too
big or too expensive to put to other purposes. Small victories pale in
the face of greater challenges, like trying to convince Ford not to
close two of its three plants in the region. "We've got some dinosaurs
walking around here," he says.

Speaking of public policy and taxation, you don't think that different public policy choices in Cleveland vs. Phoenix might have a teensy bit to do with this?

But those problems, endemic
rust-belt-wide, are just the most visible. High crime rates,
languishing schools and spiralling urban poverty plague Cleveland, too.
Phoenix, for all its money, can't make it rain any more than Cleveland,
with all its water, can print the money it needs....

Gee, the relative growth in Phoenix vs. the lack thereof in Cleveland sure is a head scratcher.  Its incredible that people would tolerate long transportation distances for water just to escape things like high crime rates, languishing schools and spirally urban poverty.

He lays the responsibility at the federal
government's door. "It's not like we have a policy that says, `You
know, we should have a national policy that provides incentive for
people to live in ecologically sustainable areas,'" he says. "What we
have here is `Go wherever you want, do whatever you want, and the
government will follow with its chequebook.' You get this haphazard
checkerboard of winners and losers, rather than directed development in
the regions that can sustain it. It's crisis management."

Yes, its just awful that the government lets people live wherever they want and then puts infrastructure in the places people choose to live.  So haphazard!  People are doing things that are not controlled or directed!  Eek!Clearly the author thinks the government should build the infrastructure wherever it wants to, and then force people to live in those places.   We elites know better!  We will tell you where you should live!  And by the way, who in the hell anointed the Rust Belt with the title of "most sustainable area."  And what is sustainability?  Couldn't I argue that all those midwest cities are sitting on valuable cropland or forest land, and that Phoenix is the most sustainable because we are just building on empty desert?  And if there is such a thing as sustainability in city development, who decided that the proximity of fresh water was the #1 be-all end-all component?

So, I will make a counter-proposal.   Rather than focusing on cities, let's focus on agriculture, because water IS a be-all end-all component to agriculture.  Much of the water we use in the Southwest is for agriculture, and I
don't think that agriculture would be here without huge subsidies. Frankly, the sustainability problem of agriculture in the desert is orders of magnitude worse than that of cities here.  So here is the plan:

1) Sell water in Arizona for a price that better matches supply and demand

2) Stop subsidizing water for agriculture

3) Stop sending farm subsidies, such as for cotton, to people to grow crops in the desert.

This would relieve a taxpayer burden AND it would likely shift farming out of the Southwest to places like the Midwest.    As a result, you would get a migration of farmers and agriculture back east and you would free up a lot of water in the southwest so more people can live here, where they really want to live.    But of course, this is not what the author wants.  He wants more people in the cities, paying absurdly high Detroit property and income taxes.  Well, good luck.

Update:  Large follow-up post to this one, including research on Arizona water use and how the Rust Belt treats the Great Lakes like a toilet here.

The table of contents for the rest of this paper, . 4A Layman's Guide to Anthropogenic Global Warming (AGW) is here.  Free pdf of this Climate Skepticism paper is here and print version is sold at cost here

I will not even try do full justice here to the basic theory
of AGW theory.  I highly encourage you to check out RealClimate.org.  This is probably
the premier site of strong AGW believers and I really would hate to see AGW
skeptics become like 9/11 conspiracists, spending their time only on
like-minded sites in some weird echo chamber. 

If you are reading this, you probably know that CO2 is what
is called a greenhouse gas.  This means that it can temporarily absorb
radiation from the Earth, slowing its return to space and thereby heating the
troposphere (the lower 10KM of the atmosphere) which in turn can heat up the
Earth's surface.  You probably also know that CO2 is not the only
greenhouse gas, and that water vapor, for example, is actually a much stronger
and more prevalent greenhouse gas.   

It is important to understand that the greenhouse gas effect
is well-understood in the laboratory.  No one really disagrees that, all
other effects held constant in a laboratory, CO2 will absorb certain
wavelengths of reflected sunlight.   What may or may not be
well-understood, depending on your point of view, is how this translates to the
actual conditions in our chaotic climate.  Does this effect dominate all
other climate effects, or is it trivial compared to other forces at work?
Does this greenhouse effect lead to runaway, accelerating change, or are there
opposing forces that tend to bring the climate back in balance?  These are
hugely complex questions, and scientists are a long way from answering them
empirically.

But wait, that can't be right -- scientists seem so
sure!  Well, some scientists, particularly those close to microphones,
seem sure.  Their proof usually follows one or both of these paths:

1. Some scientists argue that they believe they have
        accounted for all the potential natural causes, or "forcings," in the
        climate that might cause the warming we have observed over the last century,
        and they believe these natural forcings are not enough to explain recent
        temperature increases, so therefore the changes must be due to man.
        This seems logical, until I restate their logic this way:  "the
        warming must be due to man because we can't think of anything else it
        could be." 
2. Scientists have created complicated models to predict
        future climate behavior.  They argue that their models show man-made
        CO2 causing most 20^th century warming.  Again this sounds good,
        until one understands that when these models were first run, they were
        terrible at explaining history.  Since these first runs, scientists
        have tweaked the models until they match historical data better.  So,
        in effect, they are saying that manmade CO2 is the cause of historical
        warming because the models they tweaked to match history"¦ are very good at
        matching history; and because the models they programmed with CO2 as the
        major driver of climate show that"¦CO2 is the major driver of
        climate.  We will see a lot of such circular analysis in later
        chapters.

The best evidence we could expect to find (lacking a second
identical Earth we can use as a control in an experiment) is to find a historic
correlation between temperature and CO2 that is stronger than the correlation
between temperature and anything else (and of course, even this would not imply
causation).  There is a lot of argument whether we have that or not, a
topic I will cover in the next chapter.  Of course, the lack of unequivocal
evidence at this point does not make the AGW theory wrong, just still"¦
theoretical.   

Before we get to the historical evidence, though, there may
be a few other facts about CO2 and warming that you don't know:

• CO2 is a really, really small part of the atmosphere.
       Currently CO2 makes up about 0.0378% of the atmosphere, up from an
       estimated 0.0280% before the industrial revolution.  (Just to give an
       idea of scale, if you were flying from Los Angeles to New York City,
       traveling 0.0378% of the distance would not even get you off the runway at
       LAX.  AGW advocates are arguing that a CO2 concentration increase of
       0.009% has heated the world over a half a degree C.
• The maximum warming should, by greenhouse gas theories,
       occur in the troposphere (the first 10km or so of atmosphere).
       Global warming theory strongly predicts that the warming in the
       troposphere should be higher than warming at the ground.  We will see
       later that the opposite is actually occurring.
• The radiated energy returning to space consists of a wide
       spectrum of wavelengths.  Only a few of these wavelengths are
       absorbed by CO2.  Once these few wavelengths are fully absorbed,
       additional CO2 in the atmosphere has no effect whatsoever.  Also,
       these absorbed frequencies overlap with the absorption of other gasses,
       like water, which further lessens the incremental effect of extra CO2.

What does this mean?  In
effect, the warming effect of CO2 is a diminishing return relationship.
The first increase of, say, 100 parts per million (ppm) in the atmosphere has a
greater effect than the next 100 ppm, and so on until increased CO2 has
essentially no effect at all. 

I once bought a house that had
fuchsia walls in the kitchen and family room (really).  I spent all night
painting the rooms with a coat of white paint, and when I was done, I found
that some of the  fuchsia still showed through the white paint, making it
kind of light pink.  A second coat of white made the wall nearly perfectly
white.  The effects of CO2 in the atmosphere are similar, with the first
"coat" making for the most warming and later "coats" having much less effect
but still adding a bit.  At some point, the wall is white and more coats
have no effect. 

This relationship of CO2 to warming
is usually called sensitivity, and is often expressed as the number of degrees
of global warming that would result from a doubling in global temperature.

There are lots of values floating
around out there for sensitivity, but a preponderance (I won't say consensus)
seem to center on an increase of one degree C for a doubling of CO2 levels from
the pre-industrial figure of about 280ppm.  Note that you will see numbers
much higher than this, but these generally include feedback loops, which we
will get to later.  Without feedbacks, 0.5 to maybe 1.5 degrees seems like
a fairly well accepted number for sensitivity, though there are people on both
side of this range.

Luboš
Motl provides a handy approximation of the diminishing return effect from
CO2 concentration on temperature.  I have taken his approximation and
graphed it below.

This is a very crude approximation,
but the shape of the curve is generally correct (if you exclude feedbacks,
which we will discuss in MUCH more depth later).   Other more
sophisticated approximations generally show the initial curve less steep, and
the asymptote less pronounced.  Never-the-less, it is generally accepted
by most all climate scientists that, in the absence of feedbacks, future
increases in atmospheric CO2 will have less effect on world temperature than
past increases, and that there is a cap (in this chart around 1.5 degrees C) on
the total potential warming.

Note that this is much smaller than
you will see in print.  The key is in "feedbacks" or secondary effects
that accelerate or slow warming.  We will discuss these in more depth
later, but typically AGW supporters believe these will triple the sensitivity
numbers, so a non-feedback sensitivity of one degree would be tripled to three
degrees.  Remember, though, these three points:

· Warming from CO2 is a diminishing return, such that future CO2 increases
has less effect than past CO2 increases

· In the absence of feedback, a doubling of CO2 might increase
temperatures one degree C

· In the absence of feedback, the total temperature increase from future
CO2 increases is capped, maybe as low as 1-1.5 degrees C.

The table of contents for the rest of this paper, . 4A Layman's Guide to Anthropogenic Global Warming (AGW) is here.  Free pdf of this Climate Skepticism paper is here and print version is sold at cost here

The open comment thread for this paper can be found here. 

Previously, I posted how my book BMOC foresaw a new business model in giving product placements to the most popular high school kids as opinion leaders who would drive adoption by their fellow teens.

This week, TJIC points out that the New York Times is starting to sniff around another business model in the book, that of fountain coin harvesting.  They are starting to see the market:

In all these babbling places, the story is the same: Coins pile up, Mr.
Mendez removes them and people's fascination with tossing pocket change
into water continues, unexplained"¦

But miss the real business model (from the book):

On
the basis of this market research and his quirky insight, Preston Marsh founded
3Coins, Inc, and began an intensive six month research and development
program. He hired engineers from several
hot tub and spa companies that had developed the modular spa, a design where
all the necessary pumps and plumbing were integrated with the tub into a single
portable unit. His designers worked long
weeks coming up with three modular fountain designs, driving down the estimated
manufacturing cost to just $350 per unit. 

Next,
Preston Marsh took these fountain designs to mall owners, architects, building
managers, landscapers and anyone who designed or owned public spaces. In every case, the deal was the same: Preston Marsh would give the client one or
more free fountains to adorn their public spaces, and would even provide the
labor to clean and treat the fountains once a week. In return, Preston Marsh literally "kept the
change". Preston Marsh paid local
entrepreneurs 25% of the change drop to clean the fountains and empty and
deposit the change. The rest was pure
profit.

The
resulting economics were startling. For
each installation, Preston Marsh had up-front investments of about $750,
including the $350 tub plus delivery and installation. In return, Preston Marsh gained about $50 a
week in revenue, or $37.50 after the servicing agent took his 25%. Over a year, the fountain would produce
$1,950 in revenue, with virtually no expenses or overhead. 

After
five years, 3Coins had nearly 10,000 fountains in place, generating almost $20
million in annual revenue, over half of which was profit. And Preston Marsh owned 100% of the company.

You can still buy BMOC at Amazon, which has had a bit of a sales resurgence of late after a couple of press mentions.   Servers are standing by.

Previously, I posted how my book BMOC foresaw a new business model in giving product placements to the most popular high school kids as opinion leaders who would drive adoption by their fellow teens.

This week, TJIC points out that the New York Times is starting to sniff around another business model in the book, that of fountain coin harvesting.  They are starting to see the market:

In all these babbling places, the story is the same: Coins pile up, Mr.
Mendez removes them and people's fascination with tossing pocket change
into water continues, unexplained"¦

But miss the real business model (from the book):

On
the basis of this market research and his quirky insight, Preston Marsh founded
3Coins, Inc, and began an intensive six month research and development
program. He hired engineers from several
hot tub and spa companies that had developed the modular spa, a design where
all the necessary pumps and plumbing were integrated with the tub into a single
portable unit. His designers worked long
weeks coming up with three modular fountain designs, driving down the estimated
manufacturing cost to just $350 per unit. 

Next,
Preston Marsh took these fountain designs to mall owners, architects, building
managers, landscapers and anyone who designed or owned public spaces. In every case, the deal was the same: Preston Marsh would give the client one or
more free fountains to adorn their public spaces, and would even provide the
labor to clean and treat the fountains once a week. In return, Preston Marsh literally "kept the
change". Preston Marsh paid local
entrepreneurs 25% of the change drop to clean the fountains and empty and
deposit the change. The rest was pure
profit.

The
resulting economics were startling. For
each installation, Preston Marsh had up-front investments of about $750,
including the $350 tub plus delivery and installation. In return, Preston Marsh gained about $50 a
week in revenue, or $37.50 after the servicing agent took his 25%. Over a year, the fountain would produce
$1,950 in revenue, with virtually no expenses or overhead. 

After
five years, 3Coins had nearly 10,000 fountains in place, generating almost $20
million in annual revenue, over half of which was profit. And Preston Marsh owned 100% of the company.

You can still buy BMOC at Amazon, which has had a bit of a sales resurgence of late after a couple of press mentions.   Servers are standing by.

Jane Galt takes on some of the more common anti-immigration talking points.  Just for example:

5. There were ethnic newspapers, but nothing like today's ethnic media.

This is just ridiculous. Immigrants in 1900 could get all the
entertainment that was then available in their own language; for
example, by 1918, New York City boasted 20 Yiddish theaters.
The idea that Latin American immigrants are somehow uniquely unable to
assimilate because they can now watch soap operas and the Venezuelan
version of Eurovision in their very own language seems to me
self-evidently absurd; an immigrant at home watching television in
Spanish is immersed in her own culture no more thoroughly than was the
typical resident of an ethnic neighbourhood who shopped, worked, went
to services, and partied entirely with their compatriots.

I am working on some research right now -- immigration opponents are claiming that "yes, immigration may have been OK in the past, but its different now."  I am in the process of putting together anti-immigration quotes from the late 19th and early 20th century that cover all of the same ground -- they're lazy, they breed too fast, they have disease, they don't integrate, they have divided loyalties -- but aimed at Irish and Italians.

While it may have been unintentional, a quote in New York magazine helps make the point I have been trying to make about universal health care (HT: John Scalzi)

"With universal [health care], you'd get the same kind of
mediocre shittiness that you'd get in all other kinds of standardized
approaches. But for millions of people, that would be a big upgrade."

Americans are unbelievably charitable people, to the extent that they will put up with a lot of taxation and even losses of freedoms through government coercion to help people out.

However, in nearly every other case of government-coerced charity, the main effect is "just" an increase in taxes.  Lyndon Johnson wants to embark on a futile attempt to try to provide public housing to the poor?  Our taxes go up, a lot of really bad housing is built, but at least my housing did not get any worse.  Ditto food programs -- the poor might get some moldy cheese from a warehouse, but my food did not get worse.  Ditto welfare.  Ditto social security, unemployment insurance,and work programs. 

But health care is different.  The author above is probably correct that some crappy level of terribly run state health care will probably be an improvement for some of the poor.  But what is different about many of the health care proposals on the table is that everyone, not just the poor will get this same crappy level of treatment.  It would be like a public housing program where everyone's house is torn down and every single person must move into public housing.  That is universal state-run health care.  Ten percent of America gets pulled up, 90% of America gets pulled down, possibly way down. 

I don't think most Americans really know what they are signing up for.  Which is why it is so important for health care socialists to have people like Michael Moore running around trying to convince the middle class they will be getting better health care.  Because there is almost no possibility of this being true, and health care proposals will never pass if people realize it.

More here.

The New York Yankees scored 6-5-6-8 runs in their last four games, for a total of 25, and lost all four games.

A while back, I wrote about wealthy, legally savvy parents exploiting disabled-education funds to get their high achieving kids into private schools, paid for by the state.  Apparently we can't get $6000 vouchers, but this is legally OK, if you are persistent enough in gaming the system:

In Sonoma County, for example, a family recently enrolled its child in an
out-of-state boarding school, then billed its district not only for tuition,
but airfare, car rental, hotel, cell phone calls, meals, tailoring, new
clothes, an iBook computer, stamps, tolls, gas and 13 future round-trip visits.
Total tab: $67,949....

Here is the mom, in this case, explaining her son's "disability" which justified this largess

"He was not offered the classes that I thought he needed," the mother
said. "If my son didn't get what he needed, my fear was that he would drop out
of school.'' 

She acknowledged he had never been a discipline problem. The hearing
records describe him as a "young adult who is likable, friendly, energetic and
highly motivated. He is physically active, plays lacrosse and soccer, and
enjoys wakeboarding and snowboarding."

"He's a model child," she said. "However, his frustration and anxiety were
so high that I could see that this is the type of person who, out of
frustration, turns to drugs or something that he shouldn't be doing."

Well, the good news, I hope, is that the Supreme Court is set to review this kind of legal abuse of the ADA and other disable rights legislation:

the Supreme Court has accepted for review a case in which, according to
the New York Times's account, a former chief executive of Viacom did
not even give a public school program a try before enrolling his son in
a private school and demanding that New York City pick up much of the
resulting bill. The New York Times's account is distinctly
unsympathetic toward the parent, and quotes Julie Wright Halbert,
legislative counsel for the Council of the Great City Schools, as
saying: "Many wealthy, well-educated people are gaming the system in
New York City and around the country."

Let's have school choice for everyone, not just for the well-connected, legally savvy, or downright irritating.

John Sugg at Reason has a review of corporate relocation subsidies down South, and the picture is not pretty:

Jurisdictions across the nation offer such inducements, which
include tax abatement, land acquisition, construction subsidies,
training subsidies, and outright cash grants. Nationally, relocation
incentives total about $50 billion a year, according to the WHR Group,
SIRVA, and other relo­cation consultants. (Such consultants often
collect as much as 30 percent of the grants they negotiate for the
businesses.)...

It's hard to get a precise total of the dollars
involved, but almost every major business relocation in the South is
accompanied by a cornucopia of publicly funded grants, despite ample
evidence that the subsidies have little impact on corporate site
selection. Other regions of the nation, especially ones experiencing
protracted economic downturns, are increasingly emulating the South.
The politicians involved rarely consider broader tax and regulatory
changes that would make their states more attractive to all businesses,
outside and homegrown....

Trendy businesses"”particularly technology firms"”have the greatest
leverage in demanding government subsidies. In February, for example,
biofuel manufacturer Range Fuels, based on lit­tle more than its word
that it could deliver a economically competitive product, was offered
$6 million in state cash, a 97-acre tract in central Georgia, and a set
of tax abatements. At best, the company will employ 70 people.

He's got tons of examples, so you should read it all, but this one sounded just like something out of Wisconsin in Atlas Shrugged:

One business that benefited from such subsidies was the Real Silk
Hosiery factory, which opened in Durant, Mississippi, in the late
1930s. Real Silk rented its factory from a state agency for $5 a year,
enjoyed tax incentives, and had public agencies train its employees and
even build their homes. The Durant plant was shuttered in the mid-'50s.
Like many other Southern industrial facilities abandoned by owners
seeking better deals elsewhere, it closed before the industrial revenue
bonds were paid off. Writing in Time in 1998, reporters Donald Bartlett
and James Steele noted that Mississippi "was the poorest state in the
nation when its corporate-welfare program began in 1936."¦62 years and
hundreds upon hundreds of millions of dollars in economic incentives
later, it remains dead last in per capita income."

In the past, I have observed that the "game" of competitive relocation subsidies between local authorities is very similar to a prisoner's dilemma game.  In the prisoner's dilemma, two prisoners are given a choice: To confess and rat out their partner or to stay silent.  If both stay silent, they get 10 years each in jail.  If one rats out the other, but the other stays silent, the talker gets 5 years and the silent one gets 30 years.  If they both talk, then they both get 20 years.  In this game, each person has the incentive to talk, since for any set of actions of their partner, they are better off talking than not talking.  The irony is that when they both inevitably talk, they end up worse off than if they had stayed silent.

I see the relocation subsidy game as very similar, replacing "state official" for prisoner and "subsidize" for "talk."  Quoting from myself:

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.

I conclude with this from Sugg's piece:

Holladay, who has headed state economic development agencies in
Georgia, Mississippi, and South Carolina, remembers a conversation with
Zell Miller, then governor of Georgia, at a National Governors
Conference in the '90s. "The topic of subsidies came up," he recalls.
"Zell asked me, "˜Is there any way to end this foolishness?' I answered,
"˜The only way I know is to not elect any more governors.'"‰"

I am not sure I have ever seen a better parable about the virtues of industrialization, world trade, and the division of labor than this experiment documented in Wired Magazine (via L. Rockwell at Mises):

When educator and designer Kelly Cobb decided to make a man's suit
only from materials produced within 100 miles of her home, she knew it
would be a challenge. But Cobb's locally made suit turned into a
exhausting task. The suit took a team of 20 artisans several months to
produce -- 500 man-hours of work in total -- and the finished product
wears its rustic origins on its sleeve.

"It was a huge undertaking, assembled on half a shoestring," Cobb
said at the suit's unveiling one recent afternoon at Philadelphia's Institute of Contemporary Art.

"Every piece of the suit took three to five pairs of hands to make,"
Cobb added. "Every garment you wear took three to five pairs of hands
to make too, but you don't know whose hands or where."

Cobb's suit (see photo gallery)
is a demonstration of the massive manufacturing power of the global
economy. Industrial processes and cheap foreign labor belie the
tremendous resources that go into garments as simple as a T-shirt.

"It definitely makes you think for a minute before you buy that $10
skirt," said Jocelyn Meinhardt, a New York City playwright who sews
many of her own clothes. "It didn't just grow on the rack at Forever
21. It's too easy to forget that people made it."

Yet another weird SF fan points out this example of dueling Luddites.  Here is a particularly nice example:

My favorite definition of local comes from Columbia's Gussow, a
reporter for Time in the 1950s who went on to become a local-eating
pioneer. For 25 years, Gussow has lectured on the environmental (and
culinary) disadvantages of relying on a global food supply. Her most
oft-quoted statistic is that shipping a strawberry from California to
New York requires 435 calories of fossil fuel but provides the eater
with only 5 calories of nutrition. In her memoir, Gussow offers this
rather poetic meaning of local: "Within a day's leisurely drive of our
homes. [This] distance is entirely arbitrary. But then, so was the
decision made by others long ago that we ought to have produce from all
around the world."

It is hard to even begin with statement.  First, I am not sure anyone since Ghandi has really challenged the notion of division of labor, which in fact is what Gussow is lamenting.  Second, it would be interesting to ask Gussow what residents of Chad should do for locally-grown food.  Third, the last sentence is great, in that it works from the Dr. Evil Cabal theory of capitalism, positing that current trade patterns are based on "decisions made by others long ago."  And all these complaints don't even tought the silliness of somehow comparing food calories with calories of work from fossil fuels (unless Gussow is drinking Sterno at night, which might explain a lot). 

A few days ago, I did the calculations on my Social Security statement and discovered the government was paying me a -0.8% a year return (yes that is negative) on the taxes paid into the system on my behalf.  But rest assured, government workers, who know they are sticking it to us with Social Security, would never allow such a thing to happen with their own pensions:

In New York and Oregon, public employees who contribute their own money
to retirement plans get a guaranteed rate of return that is often far
beyond what the market provides, and taxpayers must make up the
difference. In Oregon, the return is 8 percent annually"”about double
what safe investments like treasury bonds provide today.

Part of a great article by Steven Malanga on the growing power of public sector unions.

I propose that we waive the normal waiting period and induct Eliot Spitzer right away into the statist hall of fame.  Few men in modern government have been able to demonstrate such a lack of respect for the rule of law and individual rights vs. their own power than Mr. Spitzer:

New York Gov. Eliot Spitzer was unabashed on Wednesday
about declaring himself a "steamroller" and the most accomplished
governor in the history of the state after three weeks on the job.

"I
am a fucking steamroller and I'll roll over you or anybody else," the
Democratic governor told Republican Assemblyman James Tedisco in a
private conversation last week, the New York Post reported on Wednesday.

"I've done more in three weeks than any governor has done in the history of the state," Spitzer also said, the Post reported. 

Asked at a news conference if the comments were inappropriately boastful, Spitzer replied tersely, "No. Next question."

Twenty-five years ago at Princeton, Mr. Spitzer's uniquely irritating ruling style inspired the normally silent and apathetic majority to rise up in an incredibly humorous coup, let by the Antarctic Liberation Front.

Growing up, my dad was a corporate executive in an industry where family members were routinely kidnapped and held for ransom in various countries.  As a result, I had a no-travel list of countries I could not visit, which included unsurprising entries like certain third world nations but also included countries like Italy and Germany, which we forget were plagued with Red Brigade kidnappings in the 1970's.

Foreign executives may have to add the United States to their no-travel list, as the US steps up its campaign of arresting people for activities they engaged in outside our country and which were legal in their home countries:

The founders of the online payment service Neteller have apparently been arrested  at airports in New York and Los Angeles.

It's
not yet clear why they were arrested. But it's worth noting that
Neteller, which is based in the Isle of Man, is the only offshore
online payment service that decided to continue to allow its U.S.
customers to do business with online gambling sites after the new bill
banning such transactions passed at the end of the last Congress.

And of course, U.S. officials have made a habit of late  of arresting high-profile offshore gambling executives when they pass through the U.S. to switch planes.

If an American, changing planes in Saudi Arabia, was arrested for being gay, or not wearing a burka, we would be outraged.  Brits should similarly be outraged that their subjects are being thrown in US jails for activities that are perfectly legal in their home country.