Coyote Blog

Via Carpe Diem, comes this September 30, 1999 NY Times story:

In a move that could help increase home ownership rates among
minorities and low-income consumers, the Fannie Mae Corporation is
easing the credit requirements on loans that it will purchase from
banks and other lenders.

The action, which will begin as a
pilot program involving 24 banks in 15 markets -- including the New
York metropolitan region -- will encourage those banks to extend home
mortgages to individuals whose credit is generally not good enough to
qualify for conventional loans. Fannie Mae officials say they hope to
make it a nationwide program by next spring.

Fannie Mae, the
nation's biggest underwriter of home mortgages, has been under
increasing pressure from the Clinton Administration to expand mortgage
loans among low and moderate income people and felt pressure from stock
holders to maintain its phenomenal growth in profits.

In
addition, banks, thrift institutions and mortgage companies have been
pressing Fannie Mae to help them make more loans to so-called subprime
borrowers. These borrowers whose incomes, credit ratings and savings
are not good enough to qualify for conventional loans, can only get
loans from finance companies that charge much higher interest rates --
anywhere from three to four percentage points higher than conventional
loans.

''Fannie Mae has expanded home ownership for millions of
families in the 1990's by reducing down payment requirements,'' said
Franklin D. Raines, Fannie Mae's chairman and chief executive officer.
''Yet there remain too many borrowers whose credit is just a notch
below what our underwriting has required who have been relegated to
paying significantly higher mortgage rates in the so-called subprime
market.''

Demographic information on these borrowers is
sketchy. But at least one study indicates that 18 percent of the loans
in the subprime market went to black borrowers, compared to 5 per cent
of loans in the conventional loan market.

In moving, even
tentatively, into this new area of lending, Fannie Mae is taking on
significantly more risk, which may not pose any difficulties during
flush economic times. But the government-subsidized corporation may run
into trouble in an economic downturn, prompting a government rescue
similar to that of the savings and loan industry in the 1980's.

''From
the perspective of many people, including me, this is another thrift
industry growing up around us,'' said Peter Wallison a resident fellow
at the American Enterprise Institute. ''If they fail, the government
will have to step up and bail them out the way it stepped up and bailed
out the thrift industry.''

Those heartless free marketing guys at the AEI -- always predicting doom every time we open our hearts to poor people.  Bailout?  What ridiculous scare-mongering.

A while back, I criticized a story in the NY Times, as quoted by Kevin Drum, that said that California had among the lowest per capita electricity usage of any state (true) and that this was because of the intelligent regulation regime in the state (yes, but not the way they meant).  The implication of Drum's argument was that there was some sort of efficiency ideal that a smart group of technocrats could reach at limited cost to the state (false). Specifically, Drum argued:

Anyway, it's a good article, and goes to show the kinds of things we
could be doing nationwide if conservative politicians could put their
Chicken Little campaign contributors on hold for a few minutes and take
a look at how it's possible to cut energy use dramatically "” and reduce
our dependence on foreign suppliers "” without ruining the economy. The
energy industry might not like the idea, but the rest of us would.

My response, in part, was this:

Well, here are the eight states in the data set above that the
California CEC shows as having the lowest per capita electricity use:
CA, RI, NY, HI, NH, AK, VT, MA.  All right, now here are the eight
states from the same data set that have the highest electricity prices:  CA, RI, NY, HI, NH, AK, VT, MA.  Woah!  It's the exact same eight states!  The 8 states with the highest prices are the eight states with the lowest per capita consumption.
Unbelievable.  No way that could have an effect, huh?  It must be all
those green building codes in CA.  I suspect Drum is sort of right,
just not in the way he means.  Stupid regulation in each state drives
up prices, which in turn provides incentives for lower demand.  It
achieves the goal, I guess, but very inefficiently.  A straight tax
would be much more efficient.

As part of a presentation I am working on about global warming and proposed California CO2 abatement bill AB52, I had the occasion to do a bit more research.  All of my data is from the Energy Information Administration, whose page URLs keep changing and thus breaking my links but this index page to data seems to stay the same.

I found three factors that seem to be the main drivers of state electricity demand (which is measured in all of the charts below in thousands of kw-h per capita).  The first factor is climate, and certainly California has one of the milder climates.  The chart below looks at residential electricity demand vs. cooling degree days (weighted for population location).  Each data point is a state, with California is shown as the red data point:

We get something similar for heating degree days, with electrical use going down as the climate gets milder, though not as good of a fit, which is not surprising since electricity is less important to heating than cooling.  Since California is well below the line, mild climate can be said to explain some of its lead on other states, but not all.

So I looked next at the percentage of electricity demand that goes to industry.  More heavily industrialized states will have a higher total per capita demand, because heavy industry chews up electricity that other types of businesses do not.  It turns out that California has a relatively low industrial use, which is not surprising given the regulatory environment there and the degree to which industry has been chased out of the state (one would have to be a madman to, all things considered, set up a new factory in California).  So here is the same type of chart of total electrical per capita use by state vs. the % industrial demand, again with each data point a state and California in red:

Again there is a pretty strong relationship, and again we see some but not all of California's low per capita consumption explained.  In effect, states on the left have exported their high-electricity-use industries to the states on the right (or to other countries).

I have saved the most obvious relationship for last:  price.  It turns out unsurprisingly that the states with the highest electricity prices have the lowest per capital consumption:

Rolling climate, industrial intensity, and price together, these factors seem to explain at least 80% of California's efficiency lead over other states.  California government regulatory policy does indeed drive lower electrical consumption, just not exactly the way they would like you to think.  By chasing industries out of the state and raising electricity costs above those of almost every other state, California has reached a lower per capita consumption level.

From my point of view, the NY Times buried the lede in this story about installation of parking sensors on San Francisco streets.  The article focuses mainly on the ability of drivers at some time in the future to get locations of empty parking spots on the streets via smartphone or possibly their GPS.  But I thought the pricing changes they were facilitating were more interesting:

SFpark, part of a nearly two-year $95.5 million program intended to
clear the city's arteries, will also make it possible for the city to
adjust parking times and prices. For example, parking times could be
lengthened in the evening to allow for longer visits to restaurants.

The
city's planners want to ensure that at any time, on-street parking is
no more than 85 percent occupied. This strategy is based on research by
Mr. Shoup, who has estimated that drivers searching for curbside
parking are responsible for as much of 30 percent of the traffic in
central business districts.

In one small Los Angeles business
district that he studied over the course of a year, cars cruising for
parking created the equivalent of 38 trips around the world, burning
47,000 gallons of gasoline and producing 730 tons of carbon dioxide.

To
install the market-priced parking system, San Francisco has used a
system devised by Streetline, a small technology company that has
adapted a wireless sensor technology known as "smart dust" that was
pioneered by researchers at the University of California, Berkeley.

It
gives city parking officials up-to-date information on whether parking
spots are occupied or vacant. The embedded sensors will also be used to
relay congestion information to city planners by monitoring the speed
of traffic flowing on city streets. The heart of the system is a
wirelessly connected sensor embedded in a 4-inch-by-4-inch piece of
plastic glued to the pavement adjacent to each parking space.

The
device, called a "bump," is battery operated and intended to last for
five and 10 years without service. From the street the bumps form a
mesh of wireless Internet signals that funnel data to parking meters on
to a central management office near the San Francisco city hall.

This is actually really cool, but my guess is that politicians will not have the will to charge the level of peak prices the system may demand.

Postscript:  As many of you know, there is a new wave of urban planners who want to impose dense urban living on all of us, whether we like it or not.  I have no problem with folks who want to fight the masses and live in downtown SF or Manhattan, but the world should also have a place for the majority of us who like to have an acre of land and a bit less congestion. 

Anyway, in singing the praises of the urban lifestyle (which often is as much an aesthetic preference vs. suburbia as anything else), you seldom hear much about this type of thing:

Solving the parking mess takes on special significance in San Francisco
because two years ago a 19-year-old, Boris Albinder, was stabbed to
death during a fight over a parking space....

The study also said that drivers searching for metered parking in just
a 15-block area of Columbus Avenue on Manhattan's Upper West Side drove
366,000 miles[!!] a year.

And here we suburbanites are complaining when we have to park more than 5 spaces from the door of the supermarket.

The NY Times reports, via Hit and Run, that judicial review of Gitmo detainees, which the Administration has steadfastly resisted, may be quite justified:

In the first case to review the government's secret
evidence for holding a detainee at Guantánamo Bay, Cuba, a federal
appeals court found that accusations against a Muslim from western
China held for more than six years were based on bare and unverifiable
claims. The unclassified parts of the decision were released on Monday.

With some derision for the Bush administration's arguments, a
three-judge panel said the government contended that its accusations
against the detainee should be accepted as true because they had been
repeated in at least three secret documents.

The court compared
that to the absurd declaration of a character in the Lewis Carroll poem
"The Hunting of the Snark": "I have said it thrice: What I tell you
three times is true."

"This comes perilously close to suggesting
that whatever the government says must be treated as true," said the
panel of the Court of Appeals for the District of Columbia Circuit.

The
unanimous panel overturned as invalid a Pentagon determination that the
detainee, Huzaifa Parhat, a member of the ethnic Uighur Muslim minority
in western China, was properly held as an enemy combatant.

The panel included one of the court's most conservative members, the chief judge, David B. Sentelle....

Pentagon officials have claimed that the Uighurs at Guantánamo were
"affiliated" with a Uighur resistance group, the East Turkestan Islamic
Movement, and that it, in turn, was "associated" with Al Qaeda and the Taliban.

Next up, the detainee whose mother's gynecologist's dog's veterinarian's great uncle once was friends with a Muslim guy.

The Administration now complains that there is nowhere that this man can be sent back to, and somehow this is supposed to validate his detainment?  He wouldn't have had to be sent back anywhere if he hadn't been snatched up in the first place.  I am willing to believe that this guy may be a bad buy, but we let lots of people we are pretty sure are bad guys walk the street, because for good and valid reasons we rank false detainment of the innocent as a greater harm than non-detainment of the guilty.  Anyone seen OJ lately?

I guess it turns out that compensation deals between sophisticated, consenting adults at private firms are not actually subject to approval by the NY attorney general, no matter how much he grandstands:

A state appeals court on Tuesday dealt a devastating blow to the New
York attorney general's efforts to force ex-New York Stock Exchange
Chairman Richard Grasso to return a portion of his $187.5 million
compensation package.

New York Attorney General Andrew Cuomo's
spokesman issued a statement saying he is not pursuing an appeal in the
case. The Grasso case is "over" "¦ "for all intents and purposes," the
spokesman said.

In a 3-1 decision, the New York Supreme Court's
Appellate Division dismissed the two remaining causes of actions
against Mr. Grasso and one against former NYSE director Ken Langone

I wrote much more about this fiasco long ago...

Update:  The AG argues that their real concern was about pay practice in non-profits.  OK, I am sure there are any number of NGOs and museum presidents where there might be real issues with the sophistication of board members.  Go after those folks, then, but there was never, ever any evidence that somehow Dick Grasso pulled the wool over the eyes of financial neophytes on the NYSE Board, babes in the woods such as the CEOs of JP Morgan Chase and Goldman Sachs.  Unfortunately, all these other non-profits tend to be run by folks who are the backbone of the NY Democratic Party.  Even in the Grasso suit, Spitzer had to work a bit to avoid naming prominent Democrats as targets.  For example, there is a lot of evidence that the person most responsible on the NYSE baord for the structure of Dick Grasso's compensation contract was NYSE board member and former NY State Comptroller Carl McCall, but since he is a powerful Democrat, Spitzer did some slick judo to avoid including him in the suit, which still including other NYSE board members.

I love Arizona and the Phoenix area.  However, I thought the NY Times listing of Scottsdale as one of the #9 place to visit this summer to be a bit odd.  Next up will be the suggestion to visit Buffalo in February.  Yes, there are a lot of screaming deals at luxury hotels with great spas, so if want two days of spa treatments and proximity to lots of good restaurants, go for it.  But expect to find something like Paris in August (but with better attitudes).  You may be here but we'll all be gone, if we can afford it.  Typical summer temperatures every day are 108-112F, with occasional excursions higher into territory that is stupid-hot.  Yeah, its dry heat, and that is exactly what we tell our turkey every Thanksgiving.  And yeah, the wind blows a bit -- feels just like a hair dryer. 

Most all local governments have extensive programs in place for government inspection of elevators because, you know, private businesses can't be trusted to operate safe equipment.  But it turns out the least safe elevators are operated by the government itself:

New York City Transit
has spent close to $1 billion to install more than 200 new elevators
and escalators in the subway system since the early 1990s, and it plans
to spend almost that much again for dozens more machines through the
end of the next decade. It is an investment of historic dimensions,
aimed at better serving millions of riders and opening more of the
subway to the disabled.

These are the results:

¶One of every six elevators and
escalators in the subway system was out of service for more than a
month last year, according to the transit agency's data.

¶The
169 escalators in the subway averaged 68 breakdowns or repair calls
each last year, with the worst machines logging more than double that
number. And some of the least reliable escalators in the system are
also some of the newest, accumulating thousands of hours out of service
for what officials described as a litany of mechanical flaws.

¶Two-thirds of the subway elevators "” many of which travel all of 15
feet "” had at least one breakdown last year in which passengers were
trapped inside.

The whole thing is pretty depressing.  But perhaps just as depressing is the fact that the NY Times, in a quite lengthy article, never once questions why the government is in the elevator maintenance business at all.  You see, the New York City Transit system hires all of its own maintenance people, presumably because, though the article never mentions it, the public employees union insists that these functions remain in house.  OK, here is a quiz:  How many private elevator owners in New York City have their own staff repair elevators?  My guess is the answer is close to zero.  Everyone uses third party elevator equipment repair companies or operate under long-term service contracts with the manufacturer.  Why?  Well, lets see what problems NY Transit faces:

"They don't have enough competent people with the proper training,"
said Michele O'Toole, the president of J. Martin Associates, which the
transit agency hired in 2006 to evaluate its elevator operations. "It
all reflects back to qualifications, training, capabilities."...

Elevators and escalators are spread out over a far-flung system,
requiring more mechanics and slowing responses to breakdowns. There has
been little standardization of parts, so mechanics must cope with a
bewildering hodgepodge of machinery. And the machines, which operate 24
hours a day, are subject to all sorts of abuse: Elevators become
makeshift bathrooms, and escalator steps are pounded by heavily loaded
hand trucks.

Guess what?  These are all classic reasons for outsourcing.  Manhattan elevator maintenance companies are set up to handle a far-flung elevator inventory, and can more efficiently stock parts, buy special equipment, and provide specialized training than can any individual operator.   Shared external capacity can also be sized and used much more efficiently to deal with random failures -- the more elevators in a region one maintains, the better staff can be utilized across a stochastic system.

But of course, the NY Times is never going to go against any public employee union, so it takes the line that this is a good governance issue, rather than a structural issue where an individual elevator owner is always going to be less efficient than outsourcing to a large regional third party company.  It compares NY Transit to other public transit agencies, but not to other private owners of elevators.  My guess is Donald Trump owns more elevators than NY Transit - how does he handle elevator maintenance?

By the way, the article says that there are 167 elevators and 169 escalators in the system.  They also say there are 200 full-time maintenance people.  So, on average, one person spends 60% of their year on a single elevator or escalator.  Think about the elevators and escalators you ride every day.  Can you imagine someone working on it for 1200 hours a year?

And what is this in the quotes above about slow responses to breakdowns in the far-flung empire?  With 200 people for 336 devices, they could practically assign an individual repair person to each one.   I can see him now, with his toolbox, sitting on a folding chair in the back of the elevator with a box of Krispy Kremes, waiting to spring into action at the moment of failure.

Last week I tried to explain why the choice of plant, whether it be a food plant or a non-food plant, that is used to make ethanol is mostly irrelevant to whether ethanol mandates raise fuel prices, at least with current technologies.  I wrote:

Food prices rise not because food is converted to ethanol per se, but
because the amount of grains going into the food supply decreases.  The
issue is the use of farmer's time and resources and the use of prime
cropland to grow plants for fuel rather than food for consumption.  The
actual crop used to make the fuel, whether corn or switchgrass, does
not matter to food prices -- it is the removal of farmers and cropland
from food production that matters.  The only way cellulosic ethanol is
likely to improve food prices in substitution for corn is by being more
efficient per acre in fuel yields than corn  (which may turn out to be
the case, but has not yet been proven in this country).  But even so,
incremental improvements in yield don't help much, because we are
talking about enormous (40-50% or more) amounts of US cropland that
would have to be dedicated to fuel, whatever the plant technology, to
meet the current ethanol mandates.

I almost didn't post this the first time around, because I thought it was so obvious.  But on Sunday the NY Times blundered right into the same silly assertion:

This does not mean that Congress should give up on biofuels as an
important part of the effort to reduce the country's dependency on
imported oil and reduce greenhouse gas emissions. What it does mean is
that some biofuels are (or are likely to be) better than others, and
that Congress should realign its tax and subsidy programs to encourage
the good ones. Unlike corn ethanol, those biofuels will not compete for
the world's food supply and will deliver significant reductions in
greenhouse gases.

Of course, the ability to produce such biofuels with these magic powers has never actually been demonstrated, but I am all for them when and if someone invents them.  Efficient conversion, for example, of corn stalks, rather than corn itself, to fuel would be great and would solve this trade-off.  This technology does not exist today -- and only a lot of hand-waving can translate cellulosic ethanol successes in switchgrass to corn stalks.  Also recognize that even this has costs hidden to us non farmers, because corn stalks are used for a variety of purposes today.  My guess is that cellulosic ethanol from corn may be economically feasible, but only after some genetic modifications of the plant itself.

As a libertarian, I don't really have a horse in the race, but what is it with the NY Times editorial page?  Apparently, the right doesn't like the conservative writers, and Kevin Drum makes it clear that the left can be embarrassed by the liberal writers there:

I generally try not to read Maureen Dowd's columns because, you
know, they just don't pay me enough for that kind of hazard duty. But
today's column about Hillary Clinton was a train wreck of epic
proportions. I couldn't avert my eyes. Here's the final sentence:

As
she makes a last frenzied and likely futile attempt to crush the
butterfly [i.e., Barack Obama], it's as though she's crushing the
remnants of her own girlish innocence.

This would be
embarrassing coming from a 12-year-old. Shouldn't Dowd have an obscure
blog, not a biweekly column in the greatest newspaper in the world?

California is apparently trumpeting its "leadership in energy."  The centerpiece of its claims is its low per capita electricity use.  Arnold is making the claim now, but Kevin Drum was pushing this a while back when he said:

Anyway, it's a good article, and goes to show the kinds of things we
could be doing nationwide if conservative politicians could put their
Chicken Little campaign contributors on hold for a few minutes and take
a look at how it's possible to cut energy use dramatically "” and reduce
our dependence on foreign suppliers "” without ruining the economy. The
energy industry might not like the idea, but the rest of us would.

Max Schulz of the Manhattan Institute is not impressed:

California's proud claim to have kept per-capita energy consumption
flat while growing its economy is less impressive than it seems. The
state has some of the highest energy prices in the country "“ nearly
twice the national average "“ largely because of regulations and
government mandates to use expensive renewable sources of power. As a
result, heavy manufacturing and other energy-intensive industries have
been fleeing the Golden State in droves.

Neither am I.  I addressed this issue a while back in response to Drum's post, but since the meme is going around again, I will excerpt from that old post.

The consumption data is from here.
You can see that there are three components that matter - residential,
commercial, and industrial.  Residential and commercial electricity
consumption may or may not be fairly apples to apples comparable
between states (more in a minute).  Industrial consumption, however, will not be comparable, since the mix of industries will change radically state by state.....

Take two of the higher states on the list.  Wyoming, at the top of
the per capita consumption list, has industrial electricity consumption
as a whopping 58% of total state consumption.  KY, also near the top,
has industrial consumption at 50% of total demand.  The US average is
industrial consumption at 29% of total demand.  CA, NY, and NJ, all
near the bottom of the list in terms of per capital demand, have
industrial use as 20.6%, 15.1%, and 16% respectively.  So rather than
try to correlate electricity consumption to local energy regulations,
it is clear that the per capita consumption numbers by state are a much
better indicator of the presence of heavy industry. In other
words, the graph Drum shows is actually a better illustration of the
success of CA not in necessarily becoming more efficient, but in
exporting its pollution to other states.  No one in their
right mind would even attempt to build a heavy industrial plant in CA
in the last 30 years.  The graph is driven much more by the growth of
industrial electricity use outside CA relative to CA.

Now take the residential numbers.  Lets look again at the states at
the top of the per capita list:  Alabama, South Carolina, Louisiana,
Tennessee, Arkansas, Mississippi, Texas.  Can anyone tell me what these
states have in common?  They are hot and humid.  Yes, California has
its hot spots, but it has its mild spots too  (also, California hot
spots are dry, so they can use more energy efficient evaporative
cooling, something that does not work in the deep south).  These
southern states are hot all over in the summer.  So its
reasonable to assume that maybe, just maybe, some of these hot states
have higher residential per capita consumption because of air
conditioning load?  In fact, if one recast this list as
residential use per capita, you would see a direct correlation to
summer air conditioning loads.   This table of cooling degree days weighted for population location is a really good proxy for how much air conditioning is needed by state.  (Explanation of cooling degree days).
You can see that states like Alabama and Texas have two to four times
the number of cooling degree days than California, which should
directly correlate to about that much more per capita air conditioning
(and thus electricity) use....

OK, now I have saved the most obvious fisking for last.  Because
even when you correct for these numbers, California is pretty efficient
vs. the average on electricity consumption.  Drum attributes this,
without evidence, to government action.  The NY Times basically does
the same, positing in effect that CA has more energy laws than any
other state and it has the lowest consumption so therefore they must be
correlated.  But of course, correlation is not equal to causation.
Could there be another effect out there?

Well, here are the eight states in the data set above that the
California CEC shows as having the lowest per capita electricity use:
CA, RI, NY, HI, NH, AK, VT, MA.  All right, now here are the eight
states from the same data set that have the highest electricity prices:  CA, RI, NY, HI, NH, AK, VT, MA.  Woah!  It's the exact same eight states!  The 8 states with the highest prices are the eight states with the lowest per capita consumption.
Unbelievable.  No way that could have an effect, huh?  It must be all
those green building codes in CA.  I suspect Drum is sort of right,
just not in the way he means.  Stupid regulation in each state drives
up prices, which in turn provides incentives for lower demand.  It
achieves the goal, I guess, but very inefficiently.  A straight tax
would be much more efficient.

The NY Times has finally published a comprehensive take-down on the insanity of biofuel subsidies here.  All well and good, but this is at least five years too late.  For years, while this and other blogs have tried to point out that the biofuel emporer's has no clothes, the NY Times has been publishing breathless articles in support of biofuel subsidies and mandates, in fact criticizing the Bush administration and Congress for not moving faster on them. 

So is this what we must expect from the NY Times and the rest of the media?  Shameless pandering to politically correct policy goals that make no scientific sense until it is virtually too late to halt their momentum?  If so, everyone should read the Times' coverage on climate with a jaded eye, because it would not surprise me in the least to see the Times publish the definitive article on why the global warming alarmists are full of hot air only after Congress has gutted our economy with new climate taxes and mandates. 

My novel BMOC included an incompetent and power-abusing Senator who managed to remain a darling of the press as long as he focused his attention on pork-barrel spending and using government power to help and hurt his friends and enemies.  However, the press finally turned on him when it became known he was involved with prostitutes.  The fairly cynical (if not realistic) moral was that it was fine to abuse government power, just don't get caught in a sex scandal.

Well, it seems that we will get to test that notion in real life.  Apparently, NY governor Eliot Spitzer has been dallying with prostitutes.  Now, I couldn't really care less about his purchase of sex -- I have argued many times for legalization of prostitution.  But it will be an interesting test of my book's cynical hypothesis, since to date the press has been in love with Spitzer despite (even because of) his abusive practices as AG and governor.  The radio news a few minutes ago actually said "Mr. Spitzer, who to date has had a squeaky clean reputation..."  Huh?  Only if you read the fawning PR work done for him by the NY Times in the past.

Update: Here is the passage from the book.  Sound familiar?

Taking a deep
breath, Givens said, "Senator, there is a reason that this one is not going
away. I will spell it out: S-E-X. The press doesn't give a shit about a few billion dollars of waste. No one tunes in to the evening news if the
teaser is "˜Government pays too much for a bridge, news at eleven.' The Today Show doesn't interview the
contractors benefiting from a useless bridge."

"However, everybody and his dog will tune in if
the teaser is "˜Your tax dollars are funding call girls, film at eleven'. Jesus, do you really think the CBS Evening
News is going to turn down a chance to put hookers on the evening news? Not just tonight but day after day? Just watch "“ Dan Rather will be interviewing
hookers and Chris Mathews will be interviewing hookers and for God's sakes
Barbara Walters will probably have a weepy interview with a hooker."....

"You guys in the Senate can get away with a lot,
as long as long as a) you don't get caught or b) the scandal is so boring or
complex that it won't sell newspapers. Hell, I saw a poll the other day that a substantial percentage of
Americans to this day don't understand or even believe what Richard Nixon did
was wrong. But if you polled those same
people, every freaking one of them would say that they knew and believed that
Bill Clinton got [had sex with] an intern.

Update #2: Disclosure -- I did not like Spitzer, even at Princeton.  This, however, was not uncommon.  In fact, Spitzer managed to inspire a jihad in response to his governance of the student council there.

Update #3:  ROFL!  I got this email from a reader:

I eagerly await your
comments on the latest imbroglio involving your favorite Princeton
classmate.  Please don't take the high road.

It seems I may not be the only person who does not care for Mr. Spitzer.

Update #4:  I hope the girls paid sales taxes on their transactions and have all their payroll taxes in order.  Certainly Mr. Spitzer has established the principle that illegal businesses still owe taxes.

That seems to be the axiom in New York these days, where Gov. Eliot L.
Spitzer (D), struggling to close a $4.4 billion budget gap, has
proposed making drug dealers pay tax on their stashes of illegal drugs.
The new tax would apply to cocaine, heroin and marijuana, and could be
paid with pre-bought "tax stamps" affixed to the bags of dope.

Update #5:  Libertarians like myself will point out that this is all between consenting adults.  Of course, that did not stop Eliot Spitzer from trying to prosecute Dick Grasso for a pay package that was approved by consenting (and quite sophisticated) adults.

Update #6: It is being reported that Spitzer will resign.  QED folks.  Spitzer uses the state police to spy on political rivals and the press continues to call him a squeaky clean reformer.  But pay for sex with a consenting adult, and your gone. 

Update #7:  Tom Kirkendal has been all over Spitzer for years.  He writes:

But I hope that the most important lesson that
Spitzer's political career teaches us is not lost amidst the glare of a
tawdry sex scandal. As with Rudy Giuliani
before him, Spitzer rose to political power through the misuse of the
state's overwhelming prosecutorial power to regulate business
interests. In so doing, Spitzer manipulated an all-too-accommodating
mainstream media, which never misses an opportunity to take down an
easy target such as a wealthy businessperson. Spitzer is now learning
that the same media dynamic applies to powerful politicians, as well. 

However, as noted earlier here,
where was the mainstream media's scrutiny when Spitzer was destroying
wealth, jobs and careers while threatening to go Arthur Andersen on
American Insurance Group and other companies? Where was the healthy
skepticism of the unrestrained use of the state's prosecutorial power
to regulate business where business had no available regulatory
procedure with which to contest Spitzer's actions?

The New York Times editorial board had one of the most jaw-dropping pieces I have read in a long time.  In it, they are absolutely unapologetic in saying that they think the government can spend your money better than you can -- and the larger the government take, the happier we all will be.

The munificence of American corporate titans warms the heart, sort of.
The Chronicle of Philanthropy reports that the top 50 donors gave $7.3
billion to charity last year "” about $150 million per head....

Yet we'd be so much happier about all the good things America's
moneyed elite pay for if the government made needed public investments.

The flip side of American private largess is the stinginess of
the public sector. Philanthropic contributions in the United States "”
about $300 billion in 2006 "” probably exceed those of any other
country. By contrast, America's tax take is nearly the lowest in the
industrial world.

Oh my God, does anyone actually believe that Congress does a better job spending your money than you do?  Apparently they do:

Critics of government spending argue that America's private sector does
a better job making socially necessary investments. But it doesn't.
Public spending is allocated democratically among competing demands.
Rich benefactors can spend on anything they want, and they tend to
spend on projects close to their hearts.

LOLOLOL.  Has anyone looked at the last highway bill?  How many tens of thousands of politically motivated earmarks were there?   

Philanthropic contributions are usually tax-free. They directly reduce
the government's ability to engage in public spending. Perhaps the
government should demand a role in charities' allocation of resources
in exchange for the tax deduction. Or maybe the deduction should go
altogether. Experts estimate that tax breaks motivate 25 percent to 30
percent of contributions.

At the end of the day, this is not about a better prioritization process for spending -- this is about the NY Times getting a bigger say for itself in said spending.  They know that Warren Buffet couldn't give a rat's behind what the NY Times thinks about how he spends his money, but Congressmen trying to get reelected do care.  The NY Times wields a lot of political, but little private, influence, so they want to see as much spending as possible shift to political hands where the Times wields clout.

Postscript: Boy, here is some quality journalism:

Federal, state and local tax collections amount to just more than 25.5
percent of the nation's economic output. The Finnish government
collects 48.8 percent. As a result, the United States spends less on
social programs than virtually every other rich industrial country,
according to the Organization for Economic Cooperation and Development.
The Finnish government probably has money to build children's health
clinics.

"Probably has money?"  What does that mean?  Do they have government-funded children's health clinics or not?  The Times couldn't work up enough energy to fact-check that?  And by the way, who, other than the NY Times, declared that the best marginal use of additional public funds is for children's health clinics?

Postscript #2: Many of the very rich have been funding schools that are competitive with government-monopoly schools.  In this and many other cases, wealthy people fund programs that work better and cheaper than government alternatives.  I am sure that not only would the feds be happy to have this money to spend themselves (on some fat earmarks for key donors, most likely) but they would additionally be thrilled to get rid of the competition.

Update:  I must be going senile.  I missed the most obvious logical fallacy of all.  The NY Times says that our democratic government is the best possible mechanism for allocating funds.  But doesn't that also mean its the best possible mechanism for setting spending levels?  How can it complain that our democratic government is doing a bad job in setting total spending levels but does a great job in allocating that spending?

From the NY Times:

Bowing to American pressure on the eve of high-level talks to reduce
economic tensions, China agreed Thursday to terminate a dozen different
subsidies and tax rebates that promote its own exports and discourage
imports of steel, wood products, information technology and other goods.

Thanks a lot.  The Bush Administration crows that:

This outcome represents a victory for U.S. manufacturers and their workers

Um, not if they are consumers too, as they all are.  And not if their company buys any inputs from Chinese manufacturers.

Napoleon said to never interrupt an enemy when he was making a mistake.   I don't consider China an enemy, but it just flabbergasts me that the Chinese taxpayers and consumers see fit to subsidize lower prices for our consumers, and we feel the need to stop them.   More here and here.

As readers may know, I was initially very disapointed in the new gen 6 iPod classic I test drove at Best Buy, but I was very happy with the version I tested several weeks later at the Apple Store.  I hypothesized that maybe there was an initial software issue that had been patched, but that Best Buy had not gotten its demo models up to date.  An engineer associated with Apple wrote me the following:

Regarding the iPod Classic, that sucker was rushed into production.
The hardware was/is just fine.  However, the firmware was NOT ready for
prime time.  Software resources are very limited at Apple, believe it
or not.  If you remember, Apple introduced 3 new models of iPods in
September (Nano, Touch, Classic), which stretched those resources very
thin.  Too thin.  The Classic firmware is what lagged most.  The
sluggishness you noticed was all software, and nothing more.  In an
ideal world, the Classic's firmware would have been delayed 2-3 weeks.
However, with Steve Jobs, a scheduled introduction is a scheduled
introduction, so out it went.  To Apple's credit, it didn't take long
for a firmware update to correct it.  One thing Apple does VERY well is
to issue timely firmware updates.

You may indeed be right in pointing out that store displays are
usually not properly updated, which is the reason that stores like Best
Buy are bad representatives for Apple.  If possible in the future,
visit an Apple store for your research.  I'm pretty sure they
faithfully do their updates.  Apple stores are quite impressively up to
date on everything.

I have reason to believe that this person knows what she or he is talking about, and this explanation certainly matches the facts as I know them.  The bottom line is that I can now wholeheartedly recommend the new gen 6 classic iPods. I have had mine for a week and love it, and, contrary to my earlier experience, if anything the menu responsiveness is now better than past generations.  By the way, my iPod Touch was amazing on the flight to NY.  I played movies for hours and had plenty of battery life.  I had brought along this battery pack as a backup, but did not need it.

I am always amazed by the stupid mistakes electronics stores make in demoing products.  This iPod mistake at Best Buy is really boneheaded, but even more commonly I see stores making huge mistakes in demoing TVs.  I can't tell you how many times I see TV's either 1) displaying a really low quality source on an expensive TV or 2) not adjusting the TV correctly to the source (e.g. stretching a 4:3 image to fit a widescreen TV so that everything looks bloated).

Postscript:  I visited the Apple store in Midtown Manhattan, at about 5th and 59th  (right by the FAO Schwartz for all you parents out there).  First, it was really cool.  An all glass cube on the plaza where you enter a glass elevator or glass spiral stairs down to the store itself.  Second, the store was an absolute zoo (this was Thanksgiving weekend) with lines just to demo the products.  From the looks of it, Apple will have a very nice Christmas.  Their entire iPod line is awesome, and for the first time in years they have a desktop that I really like at a nice price point.

From the NY Times via Maggies Farm:

The rescue of the
Florida Everglades, the largest and most expensive environmental
restoration project on the planet, is faltering.

Seven years into
what was supposed to be a four-decade, $8 billion effort to reverse
generations of destruction, federal financing has slowed to a trickle.
Projects are already years behind schedule. Thousands of acres of
wetlands and wildlife habitat continue to disappear, paved by
developers or blasted by rock miners to feed the hungry construction
industry.

The idea that the federal government could summon the
will and money to restore the subtle, sodden grandeur of the so-called
River of Grass is disappearing, too.

If, forty years ago, individuals who cared about the Everglades had banded together with private money, they could have bought up and preserved huge tracts of land around the current National Park.  Instead, as so many activists do today, rather than trying to rally private action they lobbied the government to do something about it.  Once the ball was thrown into the Feds' court, all incentive for private action disappeared, and as is so often the case, the Feds bungled their way $8 billion to little effect.

Pursuing what has become a familiar theme on Coyote Blog, we again revisit anti-trust, and in the process, discover why the NY Times might be better off putting its editorial inanities back behind a firewall.

Writing about Intel, the NY Times editors say:

The abuse of market power to protect a monopoly hurts consumers and
hinders innovation "” locking out smaller rivals that may have better
products with new features or lower prices. With an 80 percent to 90
percent share of the microprocessor market, Intel wields much more
power than your local supermarket. Its threat to raise prices the
moment a customer tries to buy from rival A.M.D. can lock in even the
largest computer makers "” which depend on Intel for most of their
products and can't simply swap all their processors overnight. And with
such a level of control, Intel doesn't have to exert itself to come up
with new and better products.

Which I guess is why Lotus 1-2-3 must still have a hammerlock on the spreadsheet market, Creative must still dominate in MP3 players, IBM must still own the computer market, and GM must still rule the automotive roost.  How can any sentient human being who has lived through the past 20 years doubt that, particularly in technology, market dominance is as fleeting as the next technology cycle.   In fact, AMD several years ago made a huge penetration of the market with a series of processors a year or two ahead of Intel.  Most average consumers who can't even figure out how to attach a photo to an email never noticed, but among those who understood and cared, AMD ruled the roost.

Oh, and what was Intel's crime?

They say Intel is improperly protecting its stranglehold of the
microprocessor market by offering big discounts and rebates to computer
makers who minimize the use of processors made by rival Advanced Micro
Devices, and punishing those who stray with higher prices.

Oh my god, they are offering discounts to loyal customers!  Don Boudreax gets right to the heart of it:

Monopolists raise prices; firms facing competition do not.  Intel keeps its prices
low, meaning that it behaves competitively.  Yes, Intel's pricing
practices make life more difficult for AMD and other rivals, but that's
what competition is supposed to do.

The popular myth is that anti-trust policy is about protecting consumers.  Well, it may have been at one time or another, but currently it is all about protecting competitors who have political pull.  The Europeans are shameless about this, using anti-trust as a bludgeon to hamstring US companies who are out-competing EU home-grown competitors.  Now the NY Times wants to emulate this practice, explicitly calling on the government to force Intel to raise prices to make things easier for its competitors.

Update:  By the way, is there anyone out there who thinks Dell or H-P don't get the best possible pricing from Intel, with or without AMD purchases?  The coy little personal shopping example in the opening paragraph of the editorial is probably to help the reader forget that we are talking about Intel selling to customers who are big boys too.

Thanks to a reader comes this article from the NY Times that yet again discusses a water shortage and possible government action without once mentioning the word "price."  If water prices floated like gas prices, we wouldn't have to discuss things like these:

Within two weeks, Carol Couch, director of the Georgia Environmental
Protection Division, is expected to send Gov. Sonny Perdue
recommendations on tightening water restrictions, which may include
mandatory cutbacks on commercial and industrial users.

If that
happens, experts at the National Drought Mitigation Center said, it
would be the first time a major metropolitan area in the United States
had been forced to take such drastic action to save its water supply.

But of course politicians love being responsible for resource allocation through command-and-control government, because it creates winners and losers and both will then donate to the next election cycle.  Atlanta already has fairly expensive water, but a quick 50% rate hike about 3 months ago would have likely obviated this shortage while also providing the municipality with additional funds to develop new sources.

I wrote a lot more about water scarcity and the price mechanism, including the observation that Phoenix ridiculously has some of the lowest water prices in the country, here.

postscript: One of the media tricks to make things look worse and panicky is to present asymmetric charts.  For example, the NY Times presents this drought map:

All you see is what one presumes to be normal in white and then a lot of drought.  But in fact, this chart is truncated.  It omits all the data for areas that are wetter than usual.  Here is the chart for September form the NOAA with both over and under precipitation over the past 12 months:

Whoa, that shows a different picture, huh?  Basically, about as much stuff is wetter than normal as drier than normal.  Which is exactly what one might expect in any period.  And by the way, if you look at the last five years, the US is pretty freaking wet:

The NY Times outdid itself last week with a truly awful article on dentistry.  They started with just one fact:

Previously unreleased figures from the Centers for Disease Control and Prevention
show that in 2003 and 2004, the most recent years with data available,
27 percent of children and 29 percent of adults had cavities going
untreated. The level of untreated decay was the highest since the late
1980s and significantly higher than that found in a survey from 1999 to
2002.

They then apply the patented NY Times class-based story-generation model to assume a cause for this rise that is not supported by the study itself:

But many poor and lower-middle-class families do not receive adequate
care, in part because most dentists want customers who can pay cash or
have private insurance, and they do not accept Medicaid
patients. As a result, publicly supported dental clinics have
months-long waiting lists even for people who need major surgery for
decayed teeth. At the pediatric clinic managed by the state-supported University of Florida dental school, for example, low-income children must wait six months for surgery.

So is the rise in untreated dental problems concentrated in the poor?  Well, they don't say, and there is not data for that in the study, but that does not prevent the NY Times from just assuming it to be so.  In fact, the article itself contradicts this premise, by noting that the problem is not limited to the poor:

The lack of dental care is not restricted to the poor and their
children, the data shows. Experts on oral health say about 100 million
Americans "” including many adults who work and have incomes well above
the poverty line "” are without access to care.

By the way, how did they figure a 100 million don't have "access"?  I don't know, but the figure is suspiciously close to this one:

With dentists' fees rising far faster than inflation and more than 100 million people lacking dental insurance...

Anyone want to bet that the NY Times just made its usual logical fallacy of equating lack of insurance with lack of access?  And by the way, dental insurance is a HORRIBLE investment.  I have priced it many times myself and for a normal family, it is much cheaper to just pay the dental bills, particularly since there are not that many things in your mouth that can go wrong that will be bankrupting.  Trying to push everyone to dental insurance is a terrible idea.  Every time there is a dental procedure in our family, it turns out there are several options for fixing it at different prices.  We actually have the incentive to ask for these alternatives and make trade offs.  What do you think would happen if we had insurnace?

In fact, I can think of a LOT of reasons why people don't go to the dentist as often as they should.  One reason is that no one like the dentist.  Another is people's busy schedules.  And certainly rising costs are a factor -- As I mentioned before, our family makes very different decisions about treatment options than we used to with a fat corporate dental plan.  Which is as it should be. 

By the way, note the screaming socialism here:

The dental profession's critics "” who include public health experts,
some physicians and even some dental school professors "” say that too
many dentists are focused more on money than medicine.

"Most
dentists consider themselves to be in the business of dentistry rather
than the practice of dentistry," said Dr. David A. Nash, a professor of
pediatric dentistry at the University of Kentucky. "I'm a cynic about my profession, but the data are there. It's embarrassing."

I wonder.  Does Dr. Nash accept a salary for being a professor?  Then I guess he is focused more on the business of education than the practice of educating.

Oh, and by the way, how is socialism in dentistry working out?

In a survey of 5,000 people in the UK, six percent claimed that
they had done DIY dentistry, including yanking their own teeth and
fixing cracked crowns with glue. Apparently they resorted to such self
treatment because they couldn't get in to see a National Health Service
dentist "¦

One respondent in Lancashire, northern England, claimed to
have extracted 14 of their own teeth with a pair of pliers. In
Liverpool, one of those collecting data for the survey interviewed
three people who had pulled out their own teeth in one morning.

"I took most of my teeth out in the shed with pliers. I have one to go," another respondent wrote.

Yesterday, I talked about my fondness for private conservation projects.  Today, the NY Times makes it clear that they are not so fond of private conservation.  In an article about environmentalist-triggered death of logging in the west, the Times observes that many rich folks are taking up the opportunity to buy large tracts of western forests for second homes and ranches.

William P. Foley II pointed to the mountain. Owns it, mostly. A timber
company began logging in view of his front yard a few years back. He
thought they were cutting too much, so he bought the land.

Mr. Foley belongs to a new wave of investors and landowners across the
West who are snapping up open spaces as private playgrounds on the
borders of national parks and national forests.

Cool, a win-win -- conservation without use of tax funds or government coersion.  But instead of being thrilled, the Times adopts their patented sneering tone they use with anything having to do with wealth.

The rise of a new landed gentry in the West is partly another
expression of gilded age economics in America; the super-wealthy elite
wades ashore where it will.

Hmm, I would have thought it an example of how increases in wealth in the US has always driven higher environmental standards and more conservation.  The NY Times tries to portray this as something like turning national parks into sprawling suburbs, lamenting the "increase in density," but this is just a joke and a product of a bunch of New Yorkers who have never really spent time in Montana.  There is zero danger of any kind of urbanization here, and their very story belies this fact when it talks about 640 acre lot sizes. 

The real problem for them seems to be one of access, and they lament that these new owners tend to put up no trespassing signs rather than allowing public access as private loggers used to.  But in so arguing, the Times is trying to have it both ways.  Eliminating recreation access from western lands is a HUGE priority for environmentalists.  In fact, though many in America don't know it, within a few decades it may be impossible to drive into national parks like Yellowstone and Yosemite.  I know and work with the management of the National Parks, and many of their leaders do not consider their job finished until they get all the visitors out of the parks.  So throwing up no trespassing signs to recreators is exactly what environmentalists want on these lands.  What they don't like, because many are openly socialist, is private ownership of these lands.  They know that increasingly, because they have gotten so good at filing lawsuits and forcing public lands officials to do their bidding, that public ownership means, effectively, ownership by the environmental groups. 

I understand the logic behind reporter shield laws.  However, I can't support the establishment of different classes of citizenship with different rights, particularly when these rights are tied to certain professions.  Either everyone should be able to ignore a subpoena, or nobody should be able to do so.   My individual rights should not be subject to a hiring decision by the NY Times.

For those who believe this is essential to the functioning of the press, it is left as an exercise to explain how the press has survived without it for over 200 years.

It is worth noting that this is effectively an extension of what Congress began with McCain-Feingold.  In that law, Congress gave members of the press unique speech rights within 60 days of an election that the rest of us do not have.  The press tries to piously portray itself as a special entity, but they sure do look like any other special interest group lobbying Congress for special privileges.

Much more here.

Regulation is a frequent topic on this blog, and one of the points I try to make over and over is that most supposedly pro-consumer regulation is in fact put in place to protect incumbents from competition and new entrants.   It's worth repeating this Milton Friedman quote:

The justification offered is always the same: to protect the consumer. However, the reason
is demonstrated by observing who lobbies at the state legislature for
the imposition or strengthening of licensure. The lobbyists are
invariably representatives of the occupation in question rather than of
the customers. True enough, plumbers presumably know better than anyone
else what their customers need to be protected against. However, it is
hard to regard altruistic concern for their customers as the primary
motive behind their determined efforts to get legal power to decide who
may be a plumber.

Apparently, the NY Times has discovered the phenomenon, and argues that it is accelerating under the Bush administration.  I have no evidence to refute this claim, though I note that the NY Times offers no evidence in support of it either.

Never-the-less, it certainly is a feature of most governments to try to protect politically powerful businesses against competitors, foreign and domestic.  Basically, the entire German and French economy is built on this practice, which is why the top corporations in these countries in 1960 are still the top companies today, whereas the list has completely turned over in the US.  Our economy thrives because of entrepreneurship.  New entrants replace senescent competitors, or at least keep the pressure on them so they stay sharp and focused.

This is an enormous issue in my business.  My industry is characterized by about 4-5 larger companies that operate many recreation facilities, of which we are one, and hundreds or perhaps thousands of individual operators.  Over the last five years, the US and state governments have passes a myriad of rules and regulations that are making it virtually impossible for smaller companies to compete.  I don't know if these are being suggested by any of the larger players (they certainly aren't coming from me) but these regulations are serving the purpose of strangling smaller competitors and making it nearly impossible for new entrants to compete.

A while back, I wondered if the highest paid public employee of every state was a university men's football or basketball coach.  Well, its not exactly answering the same question, but via the Sports Economist comes this article that head coaches beat the governors 49-1 in the salary sweepstakes.  Only the Alaska governor makes more money than the state university head coaches (probably because there is no college football in Alaska).  Governors probably have more job security, though.

Unlike my question, the author considers coaches at any college, public or private.  For example, my readers found that NY is probably an exception -- there are public employees paid higher than public university coaches.  This article comes to the opposite conclusion, but only because they use Syracuse University, which is a private institution.

Growing up in Houston, one of the odder parts of the city, even for a local, is the underground tunnel system downtown.  The system was built, I presume, because you can't even cross the street in the summer time in 100 degree / 100% humidity weather without sweating through your suit coat.  The tunnel system has become quite extensive, such that you can navigate for miles without ever seeing the light of day.  Casual observers often comment on the lack of pedestrian traffic in downtown Houston, but that is perhaps because they never looked under ground.  Over time, underground shopping malls and restaurants and food courts appeared along the tunnels, bringing even more people under ground.

The tunnels are especially difficult to navigate, because there are no visual clues (e.g. we are heading to that building over there) and no signs.  We used to joke people had been lost down there for decades.

Well, the secret is apparently out, as the NY Times has discovered the Houston tunnels.

Seared by triple-digit heat and drenched by tropical storms, midday
downtown Houston appears eerily deserted, the nation's fourth-largest
city passing for a ghost town.

On the street, that is.

But
below, there are tunnels at the end of the light "” nearly seven
color-coded miles of them connecting 77 buildings "” aswarm with
Houstonians lunching, shopping and power-walking in dry, air-chilled
comfort....

"Nothing says north, south, east or west. You have to memorize the
buildings," said David Gerst, a lawyer who opened a lucrative sandwich
shop "” BeWitched "” off the East McKinney (green) tunnel network under
Commerce Towers, the former Chamber of Commerce building converted to
condominiums. For access to the 3,000 people who stream by his shop
each lunchtime in what tunnel merchants call the holy hours, Mr. Gerst
pays $2,500 a month rent for 800 square feet, more than what surface
lunch space may command.

This is the best part:

It was not centrally planned; it just grew, inspired by Rockefeller
Center in New York. But it is not connected to a transit network. And,
befitting Texans' distrust of government, most of it is private; each
segment is controlled by the individual building owner who deigns to
allow the public access during business hours "” and then locks the
doors on nights and weekends. Some parts, like those belonging to the
former Enron buildings now leased by Chevron, are closed to outsiders
altogether.

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.