Coyote Blog

One of the critiques of any trade deal of late is that there should be penalties for countries guilty of "currency manipulation."  The concern is that countries will devalue their currency in an effort to make their own exports cheaper to other nations while making it harder for other countries to export back to them.  As an example, if the Chinese were to do something that cuts the value of the Yuan in half vs. the dollar, their products look very cheap to American consumers while American-produced goods suddenly look a lot more expensive to Chinese consumers.

I have two brief responses to this:

1. I find it hilarious that anyone in the United States government, which has a Federal Reserve that has added nearly $2 trillion to its balance sheet in the service of cramming down the value of the dollar, can with a straight face accuse other nations of currency manipulation.  In practice in today's QEconomy, currency manipulation means another country is doing exactly what we are doing, but just doing it faster.
2. As an American consumer, to such currency manipulation by other countries I say, Bring it On!  If China wants to hammer its own citizens with higher prices and lower purchasing power just to subsidize lower prices for me, I am happy to let them do it.  Yes, a few specific politically-connected export businesses lose revenues, but trying to prop them up is pure cronyism.  Which is one reason I think Elizabeth Warren is a total hypocrite.  The constituency of the poor and lower middle class she presumes to speak for are the exact folks who shop at Walmart and need very price break on everyday goods they can get.  Senator Warren's preferences for protectionist trade policies and a weak dollar will hurt these folks the most.

This is the first even mild questioning of light rail I have seen, and it is certainly welcome.  It even acknowledges that the sole advantage of light rail over much more flexible and less expensive buses is that it is more appealing to the middle and upper classes.  Via Kevin Drum:

Josh Barro thinks our cities are building too much light rail. It's expensive, often slow, and offers virtually no advantage over simply opening up a bus line. The problem, according to a 2009 report from the Federal Transit Administration, is that "Bus-based public transit in the United States suffers from an image problem."

I am just amazed at how many otherwise smart people are rooting for the government to regulate the Internet:

According to a pair of new reports from the Wall Street Journal and the New York Times, the FCC chairman Tom Wheeler will soon do what some net neutrality advocates have been clamoring for for ages: Try to officially reclassify internet service as a telecommunications service under Title II of the Telecommunications Act. That'd effectively put internet access in the same bucket as landline telephone service, which is treated as a public utility in the United States, and would basically ban the paid prioritization of certain web sites and services over others....

We -- along with many of you -- will be watching the outcome of that vote with bated breath. For that matter, so will representatives and head honchoes of the country's internet service providers. A vote in favor of reclassification means that all of those companies will eventually have to deal with way more intense regulatory scrutiny, and do away with plans to treat some web-centric companies with deep pockets as first-class citizens of the internet while the rest of us wait longer for other stuff to load.

So, out of the fear in the last sentence, that some people will get better service than others -- something that, oh by the way, has never really happened so is entirely hypothetical -- you are urging on a regulatory regime originally designed for land-line phone companies, a technology that basically went unchanged for decades at a time.  The phones that were in my home at my birth in 1962 were identical to the one in my dorm room when AT&T was broken up in 1982.  Jesus, we are turning the Internet into a public utility -- name three innovations from an American public utility in the last 40 years.  Name one.

And all you free-speech advocates, do you really think the Feds won't use this as a back-door to online censorship?  We are talking about the same agency that went into a tizzy when Janet Jackson may have accidentally on purpose shown a nipple on TV.  All that is good with TV today-- The Sopranos, Game of Thrones, Arrested Development, etc. etc. etc. results mainly from the fact that cable is able to avoid exactly the kind of freaking regulation you want to impose on the Internet.

Here is my official notice -- you have been warned, time and again.  There will be no allowing future statements of "I didn't mean that" or "I didn't expect that" or "that's not what I intended."   There is no saying that you only wanted this one little change, that you didn't buy into all the other mess that is coming.   You let the regulatory camel's nose in the tent and the entire camel is coming inside.  I guarantee it.

Update:   Apparently the 1934 Telecommunications Act imposes a legal obligation on phone carriers to complete calls no matter who they are from.  Sounds familiar, huh?  Just like net neutrality.  It turns out this law is one of the major barriers preventing phone companies from offering innovative services to block spam calls.

Thomas Friedman, and many others, think it is a sign of America's decline and some sort of failure of government will that other countries are building super-massive showcase infrastructure projects while we are not.  They would take this chart as a sign of decline:

I disagree.  This is a sign of growing maturity on the part of the United States.  Many of these super-tall building projects make little economic sense, but are completed to validate the prestige of emerging nations, like teenage boys comparing penis sizes.  Grown men are beyond that behavior, just as are grown-up nations.  I discussed this in the context of rail a while back at Forbes.  In that case, it seems everyone thinks the US is behind in rail, because it does not have sexy bullet trains.  But in fact we have a far more developed freight network than any other country, and shift of transport to rail makes a much larger positive economic and environmental impact for cargo than for rail.  It comes down to what you care about -- prestige or actual performance.   Again choosing performance over prestige is a sign of maturity.**

The US had a phase just like China's, when we were emerging as a world economic and political power, and had a first generation of successful business pioneers who were unsure how to put their stamp on the world.  So they competed at building tall buildings.   Many of the tallest were not even private efforts.  The Empire State Building was a crony enterprise from start to finish, and ended up sitting empty for years.  The World Trade Center project (WTC) was a complete government boondoggle, built by a public agency at the behest of the Rockefeller family, who wanted to protect its investments in lower Manhattan.  That building also sat nearly empty for years.   By the way, the Ken Burns New York documentary series added a special extra episode at the end after 9/11 on the history of the WTC and really digs in to the awful crony and bureaucratic history of that project.  Though Burns likely did not think of it that way, it could as easily be a documentary of public choice theory.  His coverage earlier in that series of Robert Moses (featuring a lot of Robert Caro) is also excellent.

** I have always wondered if you could take this model further, and predict that once-great nations in decline (at least in decline relative to their earlier position) might not re-engage with such prestige projects, much like an aging male seeking out the young second wife and buying a Porche.

Update:  Here is part of what I wrote on US vs. European and Japanese railroading, which I think is an absolutely awesome example of where the triumphalists like Friedman go wrong:

In particular, both Friedman and Epstein think we need to build more high speed passenger trains.  This is exactly the kind of gauzy non-fact-based wishful thinking that makes me extremely pleased that these folks do not have the dictatorial powers they long for.   High speed rail is a terrible investment, a black hole for pouring away money, that has little net impact on efficiency or pollution.   But rail is a powerful example because it demonstrates exactly how this bias for high-profile triumphal projects causes people to miss the obvious.

Which is this:  The US rail system, unlike nearly every other system in the world, was built (mostly) by private individuals with private capital.  It is operated privately, and runs without taxpayer subsidies.    And, it is by farthe greatest rail system in the world.  It has by far the cheapest rates in the world (1/2 of China’s, 1/8 of Germany’s).  But here is the real key:  it is almost all freight.

As a percentage, far more freight moves in the US by rail (vs. truck) than almost any other country in the world.  Europe and Japan are not even close.  Specifically, about 40% of US freight moves by rail, vs. just 10% or so in Europe and less than 5% in Japan.   As a result, far more of European and Japanese freight jams up the highways in trucks than in the United States.  For example, the percentage of freight that hits the roads in Japan is nearly double that of the US.

You see, passenger rail is sexy and pretty and visible.  You can build grand stations and entertain visiting dignitaries on your high-speed trains.  This is why statist governments have invested so much in passenger rail — not to be more efficient, but to awe their citizens and foreign observers.

But there is little efficiency improvement in moving passengers by rail vs. other modes.   Most of the energy consumed goes into hauling not the passengers themselves, but the weight of increasingly plush rail cars.  Trains have to be really, really full all the time to make for a net energy savings for high-speed rail vs. cars or even planes, and they seldom are full.  I had a lovely trip on the high speed rail last summer between London and Paris and back through the Chunnel — especially nice because my son and I had the rail car entirely to ourselves both ways.

The real rail efficiency comes from moving freight.  As compared to passenger rail, more of the total energy budget is used moving the actual freight rather than the cars themselves.  Freight is far more efficient to move by rail than by road, but only the US moves a substantial amount of its freight by rail.    One reason for this is that freight and high-speed passenger traffic have a variety of problems sharing the same rails, so systems that are optimized for one tend to struggle serving the other.

Freight is boring and un-sexy.  Its not a government function in the US.  So intellectuals tend to ignore it, even though it is the far more important, from and energy and environmental standpoint, portion of transport to put on the rails.  In fact, the US would actually probably have even a higher rail modal percentage if the US government had not enforced a regulatory regime (until the Staggers Act) that favored trucks over rail.   If the government really had been asleep the last century, we would be further along.

Noting that the United States is currently experiencing a drastic shortage of laws, America's media (example, but many others) have finally begun to chastise the recent Congress for being, as described by the Huffington Post,  "pretty close" to "the least productive ever."  Like fishes cast ashore flopping on the beach dying for lack of oxygen, Americans are desperately begging for more laws and for more things to be made a criminal offense, and Congress is shamefully ignoring them.

Said one man interviewed on the streets of New York, "there are barely 4000 criminal offenses outlined in the Federal code.  No wonder we have so much anarchy.  We need a lot more crimes and Congress is not cooperating."

A local business woman echoed these thoughts: "With only 80,000 pages in the Federal Register, I often don't know what I should be doing.  Sometimes I go a quarter of an hour in my business making decisions for which there is absolutely no Federal guidance.  It's criminal Congress is shirking its responsibility to tell me what to do."

Said everyone, "there ought to be a law..."

First, congrats to many millions of people who can remain in this country, a status they should have always have had.  We can argue whether anyone who makes his or her way over the border should be able to vote or draw benefits, but there is no doubt in my mind that they should be able to live anywhere they can pay the rent and work anywhere that there is an employer willing to pay them.

I am willing to accept the analysis of folks like Ilya Somin who say that the President's non-enforcement decision on immigration laws is legal.  But I think his concept of "precedent" when he says there are precedents for this sort of thing is way too narrow.  This is an important, dangerous new precedent.

What I think folks are missing who make this argument about precedent is that while many examples exist of the Executive Branch excercising proprietorial discretion, the circumstances are without precedent in both scale and well as in its explicit defiance of legislative intent.  One can argue that Reagan's executive actions vis a vis immigration provide a precedent, for example, but Reagan was essentially following the intent of then-recent Congressional legislation, arguably just fixing flaws with executive orders in the way that legislation was written.  What he did was what Congress wanted.

The reason I think Tiberius Gracchus is a good analog is that Gracchus too took actions that were technically legal.  Tribunes always technically had the legal power to bypass the Senate, but in hundreds of years had never done so.  Despite their technical legality, his actions were seen at the time as extremely aggressive and plowing new Constitutional ground, ground that would soon become a fertile field for authoritarians to enhance their power.

Somin includes the following, which I think is an example of where defenders of the President's process (as different from the outcomes) are missing reality.  He writes:

I would add that the part of the president’s new policy offering work permits to some of those whose deportation is deferred in no way changes the analysis above. The work permits are merely a formalization of the the president’s exercise of prosecutorial discretion here, which indicates that the administration will not attempt to deport these people merely for being present in the United States and attempting to find jobs here. They do not purport to legalize their status, and the policy of nondeportation can be reversed at any time by the president or his successor.

This is one of those statements that are technically true, but totally obtuse at the same time.   Issuing formal get-out-of-jail-free cards to 5 million people is unprecedented.  Think of it this way:  Imagine a Republican President who is opposed to the minimum wage.  The Executive branch is tasked with enforcing that law, so wold the folks defending the President's methods also argue hat the government can issue permits to 5 million businesses allowing them to  ignore labor law?  Or emissions standards?  Or insider trading laws?

People are just being blinded by what they rightly see as a positive goal (helping millions of people) if they fail to see that the President issuing licenses to not be prosecuted for certain crimes is a huge new precedent.  Proprietorial discretion is supposed to be used to avoid patent unfairness in certain cases (e.g. the situation in Colorado with conflicting state and Federal laws on marijuana).  It is not meant to be a veto power for the President over any law on the books.  But I can tell you one thing -- it is going to be seen by future Presidents as just this.  Presidents and parties change, and for those of you swearing this is a totally legal, normal, fully-precedented action, be aware that the next time 5 million wavers are issued, it may well be for a law you DO want enforced.  Then what?

Update:  Libertarians are making the case that the Constitution never gave Congress the power to restrict immigration.  I could not agree more.  However, I fear that will have zero impact on the precedent that will be inferred from all this.  Because what matters is how the political community as a whole interprets a precedent, and I think that this will be interpreted as "the president may issue mass waivers from any law he does not like."  Now, since I dislike a hell of a lot of the laws on the books, perhaps over time I will like this precedent.  But the way things work is that expansive new executive powers seldom work in favor of liberty in the long run, so I am skeptical.

Obama, 2008:  "I taught constitutional law for ten years. I take the Constitution very seriously. The biggest problems that we're facing right now have to do with George Bush trying to bring more and more power into the executive branch and not go through Congress at all, and that's what I intend to reverse when I'm president of the United States of America." (Townhall in Lancaster, Pennsylvania, March 31, 2008).

They all suck.  Every one of them.  This man was the great hope of more than half the nation and look what a loser he is.  We should stop talking about whether we are going to hand power to the Coke or the Pepsi party and start talking about limiting the power of these jerks.

Equal protection means that the same law applies to everyone, at least in theory.  But compare these two stories:

1. Exxon fined $600,000 for 85 bird deaths in five states over five years

Exxon Mobil has agreed to pay $600,000 in penalties after approximately 85 migratory birds died of exposure to hydrocarbons at some of its natural gas facilities across the Midwest.

The fine amounts to about $7,000 per dead bird.

The oil company pleaded guilty to causing the deaths of waterfowl, hawks, owls and other protected species, which perished around natural gas well pits or water storage areas in Wyoming, Kansas, Oklahoma, Colorado and Texas over the last five years....

“We are all responsible for protecting our wildlife, even the largest of corporations,” said David M. Gaouette, the United States attorney in Colorado, in a statement accompanying the Justice Department’s announcement.

We are all responsible for protecting our wildlife... except if we are politically-favored solar companies with strong ties to the Obama White House

2. No fines for solar power plant that may be killing 28,000 birds a year

A common sight in the sky above the world's largest solar thermal power plant is a "streamer," a small plume of smoke that occurs without warning. Closer inspection, however, reveals that the source of the smoke is a bird which has inadvertently strayed into the white-hot heat above the plant's many reflecting mirrors. Because the BrightSource Energy plant near Ivanpah uses supercritical steam rather than photovoltaic energy, the sun's heat is reflected off more than 300,000 mirrors to a single point, which is used to drive a steam turbine. The downside of that, of course, is that it's lethal for any wildlife that strays into the picture -- a problem that was recognized well before the facility opened, but now the government has gotten involved.

Government wildlife inspectors believe that insects are drawn to the highly reflective mirrors, which in turn lures local birds to their doom. BrightSource feels that the issue has been overblown, claiming that only 1,000 living creatures will die in a year, but the Center for Biological Diversity believes the actual figure is closer to 28,000. The US Fish and Wildlife service is pushing for more information and an accurate calculation of the deaths before California grants the company any more permits for solar plants.

You can see from the last line that the Feds don't seem to be even considering a penalty, but are just considering whether they should permit such plants in the future.  If the 28,000 figure is correct, this company should be getting $196 million in fines (the Exxon rate of $7000 per bird)  if there was any such thing as equal protection.  Even the company's admitted figure of 1,000 a year is almost 60 times as high as Exxon was penalized for, despite the fact that Exxon experienced the deaths across hundreds of locations in five states and this is just one single solar plant.

The same alternate standard is being applied to the wind energy industry, as I wrote a while back here.

Kevin Drum seems here to be making the case for Federalism

Via Vox, here's a colorful map from Broadview Networks that helps illustrate one reason that policymaking in Congress often seems so disconnected from the real world. It's because policymakers tend to be pretty well-off folks living in a pretty well-off region that shelters them from the problems many of the rest of us encounter. If you live in Missouri, you might be annoyed [about a local problem].  But if you live in Washington DC or northern Virginia, guess what? [Your local situation is much better]! Virginia is ranked #1 in the nation, and DC is right behind it. So is it any wonder that this really doesn't seem like a pressing problem in Congress?

Wow, this seems like a great argument for Federalism, as well as a number of libertarian critiques of government in general.   Good going, Kevin!

But then I realized he doesn't really believe this.  Drum is as much a supporter as anyone on the Left of Federal mandates over local action (e.g. Common Core).

Further, I realized that he was essentially nuts.  Because the issue he is lamenting is Internet speeds.  Some people have faster Internet than others, and he is just so frustrated that Congress does not realize this.  He actually seems to be hoping Congress will somehow intervene to equalize Internet speeds.  I would love to know, in these people's minds, if there are any issues to trivial for Congress to wade into.

By the way, if Congress had stepped into Internet regulation, we would still probably be surfing at 1200 baud.  After all, all that high speed Internet stuff might kill jobs at Hayes and US Robotics (makers of old telephone modems for those too young to remember).  Look at how long it took to get a political/corporate consensus on HD TV standards.  Ugh, we would probably all have that goofy French TV-computer solution the Left wanted to force on the United States 15 years or so ago.

Postscript:  The UN ITU spent a lot of time driving phone manufacturers to using micro-USB in a bid at government-led standardization.  The only problem is that micro-USB sucks.  It is ubiquitous, which is nice, but from a form and function standpoint is far harder to use and plug in than Apple's lightning connector, which is much easier to insert, less prone to damage, and can be inserted in either direction.  Perhaps young people with better eyes do not notice but I spend a lot of time jamming micro usb cables in the wrong way.  I hate having to put on my glasses just to plug in my phone, which is why I like my Nexus 5 with wireless charging.

This chart illustrates a data analysis mistake that is absolutely endemic to many of the most famous climate charts.  Marc Morano screencapped this from a new EPA web site  (update:  Actually originally from Pat Michaels at Cato)

The figure below is a portion of a screen capture from the “Heat-Related Deaths” section of the EPA’s new “Climate Change Indicators” website. It is labeled “Deaths Classified as ‘Heat-Related’ in the United States, 1979–2010.”

The key is in the footnote, which says

Between 1998 and 1999, the World Health Organization revised the international codes used to classify causes of death. As a result, data from earlier than 1999 cannot easily be compared with data from 1999 and later.

So, in other words, this chart is totally bogus.  There is an essentially flat trend up to the 1998 switch in data definition and an essentially flat trend after 1998.  There is a step-change upwards in 1998 due to the data redefinition.  This makes this chart useless unless your purpose is to fool generally ignorant people that there is an upwards trend, and then it is very useful.  It is not, however, good science.

Other examples of this step change in a metric occurring at a data redefinition or change in measurement technique can be found in

• The hockey stick  (and here)
• Ocean heat content  (sorry, can't find the link but the shift from using thermometers in pails dipped from ships to the ARGO floats caused a one time step change in ocean heat content measurements)
• Tornadoes
• Hurricanes

The other day I had a little fun with Bing's search results on Windows 8 problems.  But this seems much more serious.  From a reader:

No comment.

That’s Microsoft’s response to new revelations that the search engine is censoring Chinese searches in the United States — not just in China. Searches on Chinese topics in the U.S. now produce markedly different search results than Google, results that mimic those  in China. China broadly censors the Internet, blocking topics like the Dalai Lama and Tiananmen Square.

The censorship blog Greatfire.org was the first to point out  that Bing’s search results display information propagated by Chinese authorities. A Chinese language search in Bing for the Dalai Lama (达赖喇嘛 in Chinese) produces two results from China’s Wikipedia (Baidu Baike) and one from the state-owned television station CCTV. In Google, the same search returns two Wikipedia entries and the Dalai Lama’s official site.

Click here to see the results in Bing, versus the results in Google.

Even more shocking, a search for the anti-censorship software FreeGate produces the result: “Due to restrictions on Chinese laws and regulations, we removed the results of these search terms. For more information, see here.”

Microsoft responded to a request from Charlie Smith’s Greatfire to explain the discrepancy. At first, the  software juggernaut replied: “We’ve conducted an investigation of the claims raised by Greatfire.org. First, Bing does not apply China’s legal requirements to searches conducted outside of China. Due to an error in our system, we triggered an incorrect results removal notification for some searches noted in the report but the results themselves are and were unaltered outside of China.”

But after finding the “due to Chinese laws and regulations” search result, Microsoft replied: “Thanks for your inquiry. We have no comment on this topic.”

Much more detail at the link, with examples and screenshots

You may be wondering under what authority the government is taking actions during the government shutdown.  We had a meeting with the Chief of the US Forest Service on Friday.  This is the specific text the Administration is using to justify all of its shutdown actions

(a)(1) An officer or employee of the United States Government or of the District of Columbia government may not—

(A) make or authorize an expenditure or obligation exceeding an amount available in an appropriation or fund for the expenditure or obligation;

(B) involve either government in a contract or obligation for the payment of money before an appropriation is made unless authorized by law;

(C) make or authorize an expenditure or obligation of funds required to be sequestered under section 252 of the Balanced Budget and Emergency Deficit Control Act of 1985; or

(D) involve either government in a contract or obligation for the payment of money required to be sequestered under section 252 of the Balanced Budget and Emergency Deficit Control Act of 1985.

I will leave it as an extra credit exercise for the reader to explain how this text justifies either a) spending extra money to barricade war memorials on the Washington Mall or b) closing privately-funded parks that take not a single dime of government money.    All these tests have everything to do with limiting government expenditures, not limiting citizen access to public lands.

We had some delays (in part because the government is taking a holiday from the shutdown today, so everything is REALLY closed) but we file our lawsuit seeking a temporary restraining order on the US Forest Service in the morning.

I got this email a few minutes ago.

Mr. Meyer:
I just wanted to thank you for the letter you wrote to our senators and congressmen.

My fiance and I are scheduled to be married this Saturday at Red Rock Crossing. On Tuesday, I called and was told that the park would be open and unaffected by shutdown.

As you can imagine, the news today has me very worried. We have spent literally thousands of dollars to have a special couple of hours in the park with our families who are flying in from all over the United States and the thought of not being able to have our wedding in our dream location is upsetting to say the least.

I hope and pray that your parks and campgrounds continue to stay open.

Red Rock Crossing is a privately-operated campground that the USFS has slated for closure Friday not because it uses too much Federal money (it in fact uses none and pays rent to the Treasury) but because the White House apparently wants to artificially increase the cost of the shutdown.  Well, you got your wish Mr. President.

PS- for those who are concerned, we are going to find a way to help this guy get married, even if I have to sneak them into the facility myself.

Rolling Stone brings us an absolutely great example of an article that claims a trend without actually showing the trend data, and where the actual data point to a trend in the opposite direction as the one claimed.

I won't go into the conclusions of the article.  Suffice it to say it is as polemical as anything I have read of late and could be subtitled "the Tea Party and Republicans suck."  Apparently Republicans are wrong to criticize government wildfire management and do so only because they suck, and the government should not spend any effort to fight wildfires that threaten private property but does so only because Republicans, who suck, make them.  Or something.

What I want to delve into is the claim by the author that wildfires are increasing due to global warming, and only evil Republicans (who suck) could possibly deny this obvious trend (numbers in parenthesis added so I can reference passages below):

 But the United States is facing an even more basic question: How should we manage fire, given the fact that, thanks to climate change, the destruction potential for wildfires across the nation has never been greater? In the past decade alone, at least 10 states – from Alaska to Florida – have been hit by the largest or most destructive wildfires in their respective histories (1). Nationally, the cost of fighting fires has increased from $1.1 billion in 1994 to $2.7 billion in 2011.(2)

The line separating "fire season" from the rest of the year is becoming blurry. A wildfire that began in Colorado in early October continued smoldering into May of this year. Arizona's first wildfire of 2013 began in February, months ahead of the traditional firefighting season(3). A year-round fire season may be the new normal. The danger is particularly acute in the Intermountain West, but with drought and record-high temperatures in the Northwest, Midwest, South and Southeast over the past several years, the threat is spreading to the point that few regions can be considered safe....

For wildland firefighters, the debate about global warming was over years ago. "On the fire lines, it is clear," fire geographer Michael Medler told a House committee in 2007. "Global warming is changing fire behavior, creating longer fire seasons and causing more frequent, large-scale, high-severity wildfires."...(4)

Scientists have cited climate change as a major contributor in some of the biggest wildfires in recent years, including the massive Siberian fires during a record heat wave in 2010 and the bushfires that killed 173 people in Australia in 2009.(5)...

The problem is especially acute in Arizona, where average annual temperatures have risen nearly three-quarters of a degree Fahrenheit each decade since 1970, making it the fastest­-warming state in the nation. Over the same period, the average annual number of Arizona wildfires on more than 1,000 acres has nearly quadrupled, a record unsurpassed by any other state and matched only by Idaho. One-quarter of Arizona's signature ponderosa pine and mixed-conifer forests have burned in just the past decade. (6)...

At a Senate hearing in June, United States Forest Service Chief Thomas Tidwell testified that the average wildfire today burns twice as many acres as it did 40 years ago(7). "In 2012, over 9.3 million acres burned in the United States," he said – an area larger than New Jersey, Connecticut and Delaware combined. Tidwell warned that the outlook for this year's fire season was particularly grave, with nearly 400 million acres – more than double the size of Texas – at a moderate-to-high risk of burning.(8)

These are the 8 statements I can find to support an upward trend in fires.  And you will note, I hope, that none of them include the most obvious data - what has the actual trend been in number of US wildfires and acres burned.  Each of these is either a statement of opinion or a data point related to fire severity in a particular year, but none actually address the point at hand:  are we getting more and larger fires?

Maybe the data does not exist.  But in fact it does, and I will say there is absolutely no way, no way, the author has not seen the data.  The reason it is not in this article is because it does not fit the "reporters" point of view so it is left out.  Here is where the US government tracks fires by year, at the National Interagency Fire Center.   To save you clicking through, here is the data as of this moment:

Well what do you know?  The number of fires and the acres burned in 2013 are not some sort of record high -- in fact they actually are the, respectively, lowest and second lowest numbers of the last 10 years.  In fact, both the number of fires and the total acres burned are running a third below average.

The one thing this does not address is the size of fires.  The author implies that there are more fires burning more acres, which we see is clearly wrong, but perhaps the fires are getting larger?  Well, 2012 was indeed an outlier year in that fires were larger than average, but 2013 has returned to the trend which has actually been flat to down, again exactly opposite of the author's contention (data below is just math from chart above)

In the rest of the post, I will briefly walk through his 8 statements highlighted above and show why they exhibit many of the classic fallacies in trying to assert a trend where none exists.  In the postscript, I will address one other inconsistency from the article as to the cause of these fires which is a pretty hilarious of how to turn any data to supporting you hypothesis, even if it is unrelated.  Now to his 8 statements:

(1) Again, no trend here, this is simply a single data point.  He says that  10 states have set in one year or another in the last decade a record for one of two variables related to fires.  With 50 states and 2 variables, we have 100 measurements that can potentially hit a record in any one year.  So if we have measured fires and fire damage for about 100 years (about the age of the US Forest Service), then we would expect on average 10 new records every decade, exactly what the author found.  Further, at least one of these -- costliness of the fires -- should be increasing over time due to higher property valuations and inflation, factors I am betting the author did not adjust for.

(2)  This cost increase over 17 years represents a 5.4% per year inflation.  It is very possible this is entirely due to changes in firefighting unit costs and methods rather than any change in underlying fire counts.

(3) This is idiotic, a desperate reach by an author with an axe to grind.  Wildfires in Arizona often occur out of fire season.   Having a single fire in the winter means nothing.

(4) Again, we know the data does not support the point.  If the data does not support your point, find some "authority" that will say it is true.  There is always someone somewhere who will say anything is true.

(5) It is true that there are scientists who have blamed global warming for these fires.  Left unmentioned is that there are also scientists who think that it is impossible to parse the effect of a 0.5C increase in global temperatures from all the other potential causes of individual weather events and disasters.  If there is no data to support a trend in the mean, it is absolutely irresponsible to claim causality in isolated data points in the tails of the distribution

(6) The idea that temperatures in Arizona have risen 3/4 a degree F for four decades is madness.  Not even close.  This would be 3F, and there is simply no basis in any reputable data base I have seen to support this.  It is potentially possible to take a few AZ urban thermometers to see temperature increases of this magnitude, but they would be measuring mostly urban heat island effects, and not rural temperatures that drive wildfires (more discussion here).  The statement that "the average annual number of Arizona wildfires on more than 1,000 acres has nearly quadrupled" is so awkwardly worded we have to suspect the author is reaching here.  In fact, since wildfires average about 100 acres, the 1000 acre fire is going to be rare.  My bet is that this is a volatility in small numbers (e.g. 1 to 4) rather than a real trend.  His final statement that "One-quarter of Arizona's signature ponderosa pine and mixed-conifer forests have burned in just the past decade" is extremely disingenuous.  The reader will be forgiven for thinking that a quarter of the trees in Arizona have burned.  But in fact this only means there have been fires in a quarter of the forests -- a single tree in one forest burning would likely count for this metric as a forest which burned.

(7) This may well be true, but means nothing really.  It is more likely, particularly given the evidence of the rest of the article, to be due to forest management processes than global warming.

(8)  This is a data point, not a trend.  Is this a lot or a little?  And remember, no matter how much he says is at risk (and remember this man is testifying to get more budget money out of Congress, so he is going to exaggerate) the actual acreage burning is flat to down.

Postscript:  The article contains one of the most blatant data bait and switches I have ever seen.  The following quote is taken as-is in the article and has no breaks or editing and nothing left out.   Here is what you are going to see.  All the way up to the last paragraph, the author tells a compelling story that the fires are due to a series of USFS firefighting and fuel-management policies.  Fair enough.   His last paragraph says that Republicans are the big problem for opposing... opposing what?  Changes to the USFS fire management practices?  No, for opposing the Obama climate change plan. What??  He just spent paragraphs building a case that this is a fire and fuel management issue, but suddenly Republicans suck for opposing the climate change bill?

Like most land in the West, Yarnell is part of an ecosystem that evolved with fire. "The area has become unhealthy and unnatural," Hawes says, "because fires have been suppressed." Yarnell is in chaparral, a mix of small juniper, oak and manzanita trees, brush and grasses. For centuries, fires swept across the chaparral periodically, clearing out and resetting the "fuel load." But beginning in the early 1900s, U.S. wildfire policy was dominated by fire suppression, formalized in 1936 as "the 10 a.m. rule" – fires were to be extinguished by the morning after they were spotted; no exceptions. Back in the day, the logic behind the rule appeared sound: If you stop a fire when it's small, it won't become big. But wildland ecosystems need fire as much as they need rain, and it had been some 45 years since a large fire burned around Yarnell. Hawes estimates that there could have been up to five times more fuel to feed the Yarnell Hill fire than was natural.

The speed and intensity of a fire in overgrown chaparral is a wildland firefighter's nightmare, according to Rick Heron, part of another Arizona crew that worked on the Yarnell Hill fire. Volatile resins and waxy leaves make manzanita "gasoline in plant form," says Heron. He's worked chaparral fires where five-foot-tall manzanitas produced 25-foot-high flames. Then there are the decades of dried-up grasses, easily ignitable, and the quick-burning material known as "fine" or "flash" fuels. "That's the stuff that gets you," says Heron. "The fine, flashy fuels are just insane. It doesn't look like it's going to be a problem. But when the fire turns on you, man, you can't outdrive it. Let alone outrun it."

Beginning with the Forest Service in 1978, the 10 a.m. rule was gradually replaced by a plan that gave federal agencies the discretion to allow fires to burn where appropriate. But putting fire back in the landscape has proved harder to do in practice, where political pressures often trump science and best-management practices. That was the case last year when the Forest Service once again made fire suppression its default position. Fire managers were ordered to wage an "aggressive initial attack" on fires, and had to seek permission to deviate from this practice. The change was made for financial reasons. Faced with skyrocketing costs of battling major blazes and simultaneous cuts to the Forest Service firefighting budget, earlier suppression would, it was hoped, keep wildfires small and thus reduce the cost of battling big fires.

Some critics think election-year politics may have played a role in the decision. "The political liability of a house burning down is greater than the political liability of having a firefighter die," says Kierán Suckling, head of the Tucson-based Center for Biological Diversity. "If they die, you just hope that the public narrative is that they were American heroes."

The problem will only get worse as extremist Republicans and conservative Democrats foster a climate of malign neglect. Even before President Obama unveiled a new climate-change initiative days before the fire, House Speaker John Boehner dismissed the reported proposal as "absolutely crazy." Before he was elected to the Senate last November, Jeff Flake, then an Arizona congressman, fought to prohibit the National Science Foundation from funding research on developing a new model for international climate-change analysis, part of a program he called "meritless." The biggest contributor to Flake's Senate campaign was the Club for Growth, whose founder, Stephen Moore, called global warming "the biggest myth of the last one hundred years."

By the way, the Yarnell firefighters did not die due to global warming or even the 10am rule.  They died due to stupidity.  Whether their own or their leaders may never be clear, but I have yet to meet a single firefighter that thought they had any business being where they were and as out of communication as they were.

A huge portion of Detroit's operating costs go to police and fire.  If you include retiree health care and pensions, way over half of Detroit's budget goes to police and fire**.  That is an enormous increase since 1960.

So one might expect the schools to suck and the streetlights to be broken (which they do and are), but you would expect great freaking fire and police coverage.  But you would be wrong.  Detroit has one of the highest crime rates in the country.  This is what you get for your money there:

If you're a Detroiter who needs a police officer, it will take 58 minutes to get help -- more than five times what it takes elsewhere in the United States...

Here are some of the other problems outlined in the bankruptcy filing:

-- Response times for Emergency Medical Services and the Detroit Fire Department average 15 minutes, which is more than double the 7-minute averages seen in other cities.

-- The police department closes only 8.7% of its criminal cases, which the filing blames on the department's "lack of a case management system, lack of accountability for detectives, unfavorable work rules imposed by collective bargaining agreements and a high attrition rate in the investigative operations unit."

-- The city's violent crime rate is five times the national average, and the highest of any city with a population exceeding 200,000.

** This is in large part due to the power of their unions, and their ability in elections to translate hero worship for police and fire fighters into political power that will allow them to get anything they want.  As a politician, try to stand up for sanity and you will be deluged by union ads arguing that you don't respect our men who are risking their lives for you, etc. etc.

Obama, accompanied by the usual chorus on the Left including Kevin Drum, is yet again trumpeting infrastructure spending as a partial economic solution for what ails us, in part based on a McKinsey Global Institute report.   Infrastructure is like education (the other half of the Obama "plan") -- it's hard to find anyone against it per se, it is easy to find examples of it failing, and it is really hard to craft programs at the Federal level that really improve anything.

Having been inside the McKinsey sausage factor for five years, I was loath to just accept their conclusion without seeing the data, so I read the section of the report on infrastructure.  Having read the report, I still don't see how they got to the under-funding number.  Some of the evidence is laughably biased, such as pronouncements from the American Society of Civil Engineers, who clearly would be thrilled with more government infrastructure spending.  The rest comes from something called the world economic forum, but I simply don't have the energy right now to follow the pea any further.

I had two reactions to this plan:

1. Presumably what infrastructure projects we choose matters, so how can we have any confidence (given things like our green energy investment program) that these investments will be chosen wisely and not based on political expediency?
2. From my experience, and also from the McKinsey numbers, most of the infrastructure needs are refurbishment and replacement of existing infrastructure, rather than new infrastructure.  But politicians are typically loath to make these kind of investments, preferring to offer new toys to voters rather than saying all that money was spent just to keep their existing toys.  Just look at the DC metro system, which is still pursuing expensive expansion plans at the same time it refuses to perform capital maintenance and replacement on its current crumbling infrastructure.  Or look at Detroit which is falling apart but still wants to spend $400 million on a new hockey rink.

I was pleasantly surprised that McKinsey actually raised both of these issues as critical.  To the point about project selection:

To effectively deploy additional investment in infrastructure, the United States will have to improve its performance on project election, timely delivery and execution, and maintenance and renewal. This could raise the overall productivity of US infrastructure by as much as 40 percent and generate more economic impact for every dollar spent. And there is added pressure to raise infrastructure productivity today: as commodity prices rise, input costs are going up as well. In extreme circumstances, this can even lead to spot shortages of asphalt and other critical materials, making productive use of such assets even more important.

One of the most effective ways to make infrastructure investment more productive is to choose the right mix of projects from the outset. Too often, the primary approval criteria for project selection in the United States are political support and visibility rather than comprehensive cost-benefit analysis.129 Even when economic analysis is used, it is not always rigorous, or it may be disregarded in actual decision making. When state and local governments choose sub-optimal projects, the cost of financing rises, so focusing on those projects with the clearest returns is a crucial part of taking a more cost-effective approach for the nation as a whole.

In addition, planners at all levels of US government tend to have a bias toward addressing congestion and bottlenecks by building new capacity. But rather than immediately jumping to build new infrastructure projects to solve problems,
planners and project sponsors might first consider refurbishing existing assets or using technology to get more out of them. (See “Better maintenance, optimization, and demand management can extend the life of existing infrastructure assets” later in this chapter.)

The McKinsey study is not arguing for Keynesian digging holes and filling them in again.   They are arguing for infrastructure spending but only if it is better targeted than such programs have been in the past.   Anything about this Administration (or any other Administration, really) that gives you confidence this will happen?

In fact, they argue that a large reason for under-developed infrastructure is not the spending level per se but the insanely inefficient way in which government spends the money

Delays and cost overruns are a familiar refrain in infrastructure projects. Boston’s Big Dig, for example, remains the costliest highway project in US history and was plagued by years of delay and shoddy construction. Originally estimated at $2.6 billion, it now has a final price tag estimated by the Massachusetts Department of Transportation at $24.3 billion, including interest on borrowing. More recently, the San Francisco–Oakland Bay Bridge is being completed almost a decade late, and its original budget of $1.3 billion has grown to more than $6 billion.

Finally, their recommendation focuses more on maintenance and the prosaic, rather than expensive sexy headline grabbing investments (cough California high speed rail cough) that politicians prefer

Another major strategy for increasing infrastructure productivity involves maximizing the life span and capacity of existing assets. In many cases, directing more resources to these areas may be a more cost-effective choice for policy makers than new build-outs.

First, there is a need to focus more attention on maintenance, refurbishment, and renewal. This is an increasingly urgent issue for the nation’s aging water infrastructure, much of which was built in the years immediately after World War II; some of the nation’s oldest pipe systems are now more than a century old. Even more recent water treatment plants will need refurbishment: many built in the
1970s after passage of the Clean Water Act will soon require rehabilitation or replacement. Proactive maintenance to upgrade and extend the life of these aging systems is becoming a more urgent priority.

The study uses a GDP multiplier of 1.77 for infrastructure spending, which explains why their claimed GDP impacts are so high.  Using this kind of chicked-in-every-pot high multiplier will of course make infrastructure spending seem like a no-brainer.  Of course those of us with more sympathy towards Austrian economics, wherein recessions are caused by misallocations of capital, will worry that this kind of government spending program, shifting private resources to public decision makers to spend, will only double down on the same crap that caused the recession in the first place.  I grew up with Japan's MITI being praised as a model by the American Left, watched the lost decades that followed this government-directed investment program, and believe that a similar reckoning is coming in China.

Many of your know that my company operates public parks.  So I see a lot of different approaches to park design and construction.  Of late I have been observing a trend in "environmental sustainability" in park design that is actually the opposite.

The US Forest Service has built more campgrounds, by far, than any other entity in the world.  For decades, particularly in the western United States, the USFS had a very clear idea about what they wanted in a campground -- they wanted it to be well-integrated with nature, simple, and lightly developed.  They eschewed amenities like pools and playgrounds and shuffleboard.  They avoided building structures except bathroom and shower buildings.  The camp sites were simple, often unpaved with a table and fire ring and a place for a tent.  They used nature itself to make these sites beautiful, keeping the environment natural and creating buffers of trees and natural vegetation between sites.   I have never seen an irrigation system in a western USFS campground -- if it doesn't grow naturally there, it doesn't grow.

This has proven to be an eminently sustainable design.  With the exception of their underground water systems, which tend to suck, they are easy to maintain.  There is not much to go wrong.  The sites need new gravel every once in a while.  Every 5-10 years the tables and fire rings needs replacement, hardly a daunting task.  And every 20-30 years the bathrooms needs refurbishment or replacement.  The design brilliance was in the placement of the sites and their integration with the natural environment.

Over the last several months, I have been presented with plans from three different public parks agencies for parks they want to redevelop.   Each of these have been $10+ million capital projects and each one had a major goal of being "sustainable."   I have run away from all three.  Why -- because each and every one will be incredibly expensive and resource intensive to operate and of questionable popularity with the public.  Sustainability today seems to mean "over-developed with a lot of maintenance-intensive facilities".

What each of these projects has had in common are a myriad of aggressively architected buildings - not just bathrooms but community rooms and offices and interpretive centers.  These buildings have been beautiful and complex, made from expensive materials like stainless steel and fine stone.  They have also had a lot of fiddly bits, like rainwater collection and recycling systems and solar and windmills.  They have automatic plumbing valves that never seem to work right.  The grounds have all been heavily landscaped, with large lawns that require water and mowing, with non-native plants that need all kinds of care.  Rather than a traditional sand pad for tents they have elaborate wooden platforms.

The plans for these facilities are beautiful.  They win awards.  In fact, I am increasingly convinced that that is their whole point, to increase prestige of the designer and the agency that hired them through awards.  But they make no sense as a recreation facility.  In 10 years, they will look like hell.  Or sooner, since one agency that is in the process of spending a $22 million bond issue on 5 campgrounds seems to not have one dollar budgeted for operation and maintenance.

These things actually win awards for sustainability, which generally means they save money on one input at the expense of increasing many others.  One design  got attention for having grass on the roofs, which perhaps saved a few cents of electricity at the cost of having to irrigate and mow the roof (not to mention the extra roof bracing to carry the load).  I briefly operated a campground that had a rainwater recovery system on the bathrooms, which required about 5 hours of labor each week to keep clean and running to save about a dollar of water costs.

From Reuters via Zero Hedge:

The Obama administration on Thursday acknowledged that it is collecting a massive amount of telephone records from at least one carrier, reopening the debate over privacy even as it defended the practice as necessary to protect Americans against attack.

The admission comes after the Guardian newspaper published a secret court order related to the records of millions of Verizon Communications customers on its website on Wednesday.

A senior administration official said the court order pertains only to data such as a telephone number or the length of a call, and not the subscribers' identities or the content of the telephone calls.

Such information is "a critical tool in protecting the nation from terrorist threats to the United States," the official said, speaking on the condition of not being named.

"It allows counter terrorism personnel to discover whether known or suspected terrorists have been in contact with other persons who may be engaged in terrorist activities, particularly people located inside the United States," the official added.

The revelation raises fresh concerns about President Barack Obama's handling of privacy and free speech issues. His administration is already under fire for searching Associated Press journalists' calling records and the emails of a Fox television reporter as part of its inquiries into leaked government information.

A few thoughts:

1. I have no doubt that this makes the job of tracking terrorists easier.  So would the ability to break down any door anywhere and do random house searches without a warrant.  The issue is not effectiveness, but the cost in terms of lost liberty and the potential for abuse.  The IRS scandal should remind us how easy it is to use government power to harass political enemies and out-groups
2. The FISA court is a bad joke, as it seems willing to issue "all information on all people" warrants.  I think there is little doubt that similar data gathering is going on at all the other carriers.
3. Luckily, Susan Rice is now the National Security Adviser.  I am sure with her proven history of not just being a political puppet but really digging in to challenge White House talking points that she will quickly get to the bottom of this.

Arizona is generally more intelligently managed, at least fiscally, than California.  But while that state still is treated seriously for all its dysfunctionality, Arizona is often a media laughing stock.  This is in large part due to the fact that Conservatives in the Arizona legislature just can't seem to stop themselves from proposing a few absurdly goofy pieces of legislation each session.

House Bill 2467, sponsored by Republican state Representatives Bob Thorpe, Sonny Borrelli, Carl Seel, T.J. Shope, and Steve Smith, proposes the following:

"Before a pupil is allowed to graduate from a public high school in this state, the principal or head teacher of the school shall verify in writing that the pupil has recited the following oath:

"I, _________, do solemnly swear that I will support and defend the Constitution of the United States against all enemies, foreign and domestic, that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge these duties; so help me God."

Smith and Shope are also in on House Bill 2284. Whereas current Arizona law says students in public schools can opt out of doing the pledge if they so choose, Smith's and Shope's proposal says only a child's parents can let them avoid reciting the pledge.

So they want to make it harder to opt-out of the current loyalty oath (Pledge of Allegiance) and then add a new loyalty oath.

Historically, loyalty oaths are the hallmark of dictators, the Caesers and Hitlers of the world.  In a free society, loyalty is earned by a government.  When government officials demand a blank check in the form of a loyalty oath that pledges allegiance no matter what the government does, watch out.

A few other observations:

• I love the part in the oath above that says "I take this obligation freely."  Sure.  We won't give you the diploma you have in every other way earned without taking the oath, a diploma practically required to function in our society, but the oath is voluntary.  This is the kind of double speak that is a hallmark, along with loyalty oaths, of a dictatorship.
• Apparently to graduate in Arizona, this would force every student to acknowledge the existence of God
• I understand what it means for the President to preserve and defend the Constitution.  But what does it mean for the average high school graduate?  Just what is this obligating them to do?  And what is the penalty for not doing it?
• I would gladly trade having all high schoolers in the state embrace this oath for simply having our state officials, in particular our Sheriff Joe Arpaio, being true to this oath.

From Foreign Policy

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

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

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

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

Electronic communication needs better Fourth Amendment protection.

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

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

I don't know if its the distance from the Mainland or something about its history, but Hawaii often appears to be among the worst states for regulatory capture by local businesses.  This example was brought to me by a co-worker, who lives in AZ but wants to buy a condo in Hawaii.  They want the condo for their own use, but also hope to rent it out.  This kind of model is more appealing nowadays given the ease (and low cost) with which one can advertise rentals on various Internet sites.

But not so fast, not in Hawaii.  In legislation that reminds be of stuff from the 1990's when businesses tried to fight Internet-driven disintermediation, Hawaii is proposing to force non-Hawaiians to use a local broker to list their rental properties.  Apparently local residents can still list their properties on low-cost Internet sites, but folks on the mainland (also known as "the United States") must use a high-cost locally licensed broker, who typically charge 50% of rental fees as a commission.  These type of commission rates are farcical - they imply that fully half the value of a one-week condominium stay is due to the broker, not the condo itself, its location, etc.  The only way brokers can charge these fees is by maintaining a tight cartel enforced by government licensing laws.

Any reasonable person will look at this law and immediately know it is about crony protection of local real estate brokers.  Of course, that is not what the law says.  It is all about "consumer protection"

The legislature also finds that requiring nonresident owners to employ a licensed professional such as a real estate broker or salesperson or a condominium hotel operator is an important consumer protection measure. Consumers who use real estate companies, real estate brokers, real estate salespersons, or condominium hotel operators for their transient accommodation rental needs can do so with the knowledge that all money generated will flow through a client trust account, the appropriate federal tax form 990s will be generated, and accurate transient accommodations taxes and general excise taxes will be paid. Real estate companies, real estate brokers, real estate salespersons, and condominium hotel operators must comply with specific licensing and bonding requirements, thus offering additional protections for consumers.

So consumer protection is defined as making sure taxes get paid and the government forms get filled out.  Because God knows my entire vacation would be ruined if Federal tax form 990 was not filled out properly.

This is total BS, and Milton Friedman called it years ago when he wrote on licensing:

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.

This is also a great example of voters agreeing to add costs on everyone but themselves.  If the almost inevitable Constitutional concerns with this law forced in-state and out-of-state condo owners to be treated equally, local owners would immediately push back, hard, against the costs this law would impose.  Only  by structuring this law to apply to those annoying out-of-staters could it ever be passed.

I have been considering taking advantage of low prices in Hawaii to buy a condo, but I may rethink that plan given this pending legislation.

I know what you are thinking -- in this post title Coyote has engaged in some exaggeration to get our attention.  But I haven't!  Felix Salmon actually says this, in reaction to a group of CEO's who wrote an open letter to the feds seeking less deficit spending.

There are lots of serious threats out there to the economic well-being and security of the United States, and the national debt is simply not one of them.  Nor is it growing. The chart on the right, from Rex Nutting, shows what’s actually going on: total US debt to GDP was rising alarmingly until the crisis, but it has been falling impressively since then. In fact, this is the first time in over half a century that US debt to GDP has been going down rather than up.

So when the CEOs talk about “our growing debt”, what they mean is just the debt owed by the Federal government. And when the Federal government borrows money, that doesn’t even come close to making up for the fact that the CEOs themselves are not borrowing money.

Money is cheaper now than it has been in living memory: the markets are telling corporate America that they are more than willing to fund investments at unbelievably low rates. And yet the CEOs are saying no. That’s a serious threat to the economic well-being of the United States: it’s companies are refusing to invest for the future, even when the markets are begging them to.

Instead, the CEOs come out and start criticizing the Federal government for stepping in and filling the gap. If it wasn’t for the Federal deficit, the debt-to-GDP chart would be declining even more precipitously, and the economy would be a disaster. Deleveraging is a painful process, and the Federal government is — rightly — easing that pain right now. And this is the gratitude it gets in return!

I seldom do this, but let's take this apart paragraph by paragraph:

There are lots of serious threats out there to the economic well-being and security of the United States, and the national debt is simply not one of them.  Nor is it growing. The chart on the right, from Rex Nutting, shows what’s actually going on: total US debt to GDP was rising alarmingly until the crisis, but it has been falling impressively since then. In fact, this is the first time in over half a century that US debt to GDP has been going down rather than up. 

So when the CEOs talk about “our growing debt”, what they mean is just the debt owed by the Federal government.

Duh.  Of course they are talking about the government deficit and not total deficit.   But he is setting up the game he is going to play throughout the piece, switching back and forth between government debt and total debt like a magician moving a pea between two thimbles.  We can already see the game.  "Look folks debt is not a threat, it is going down", but it is going down only at this total public and private debt number.  The letter from the CEO's made the specific argument that rising government debt creates current and future issues (see: Europe).  Just because all debt may be going down does not mean that the rise of one subset of debt is not an issue.

Here are two analogies.  First, consider a neighborhood where most all the residents are paying down their credit card debt except for Fred, who is maxing out his credit cards and has just taken out a third mortgage.  The total debt for your whole neighborhood is going down, but that does not mean that Fred is not in serious trouble.

Or on a larger scale, take consumer debt.  Most categories of consumer debt are falling in the US.  But student debt is rising alarmingly.  Just because total consumer debt may be falling doesn't change the fact that rising student debt is a serious threat to the well-being of a subset of Americans.

And when the Federal government borrows money, that doesn’t even come close to making up for the fact that the CEOs themselves are not borrowing money

What??  Whoever said that the role of the Federal government is to offset changes in corporate borrowing?  In his first paragraph, he already called the rise in total debt "alarming", and I get the sense that both CEO's and consumers agree and so they have been trying to reduce their debts.  So why should the Feds be standing athwart the private unwinding of an "alarming" problem?    And how does he know CEO's and their corporations are part of this deleveraging?  I see no evidence presented.  Corporate debt is but a small part of total US debt.  Corporations may be a part of this, or not.

In fact, they are not.  Corporate borrowing in the securities market has increased almost every quarter since 2008, such that total corporate bond debt is about 10-15% higher than in 2008 (see third chart here).  And here is total debt to GDP broken down by component  (this is for non-financial sectors) source.

Government debt is basically offsetting the consumer deleveraging.  Since consumers have to eventually pay this government debt off, as they are taxpayers too, then the government is basically flipping consumers the bird, forcing them to take on debt they are trying to get rid of.  Hard working consumers think they are making progress paying off debt, but the joke is on them - the feds have taken the debt on for them, and the bill will be coming in future taxes for them and their kids.

He might argue, "this is Keynesianism."  But is it?  If corporations are actually deleveraging, we still don't know how.  Is it through diverting capital investment to debt repayment (as I think Salmon is assuming) or are they raising capital from other sources and rejiggering the right side of their balance sheets?  And even if this deleveraging is coming at the expense of corporate investment, I thought Keynesians virtually ignored investment or "I" in their calculations  (you remember, don't you, from macro: C+I+G+X-M?).  In fact, if I remember right, "I" is treated as an exogenous variable in the famous multiplier "proof".

Money is cheaper now than it has been in living memory: the markets are telling corporate America that they are more than willing to fund investments at unbelievably low rates. And yet the CEOs are saying no. That’s a serious threat to the economic well-being of the United States: it’s companies are refusing to invest for the future, even when the markets are begging them to.

This is the real howler -- that "markets" are sending a low-interest signal.  Markets are doing nothing of the sort.  The Federal Government, via the Fed, is sending this signal with near-zero overnight borrowing rates and $30-$40 billion a month in money printing that is used to buy up government debt from the market.  If any signal is being sent at all, it is that the Federal Government is main economic priority is continuing to prop up the balance sheet and profitability of major US banks.

Investment is also not solely driven by the price of funds.  There must be opportunities where businesses see returns that justify the spending.  Unlike the Federal government, which is A-OK blowing billions on companies like Solyndra, businesses don't invest for the sake of spending, they invest for returns.  A soft economy combined with enormous government driven uncertainties (e.g. what will be our costs to comply with Obamacare) are more likely to affect investment levels than changes in interest rates.

 Instead, the CEOs come out and start criticizing the Federal government for stepping in and filling the gap. If it wasn’t for the Federal deficit, the debt-to-GDP chart would be declining even more precipitously, and the economy would be a disaster. Deleveraging is a painful process, and the Federal government is — rightly — easing that pain right now. And this is the gratitude it gets in return!

This is where economic thinking has ended up in 2012:  To Salmon, it does not matter where the Federal government spends this money, so long as it is spent.  He never even tries to justify that the government is running up debt in a good cause, because what it spends money on does not matter to him.  For him, the worst possible thing for the economy is for people to spend their money paying down debt.  Spend it on more drone strikes or more Solyndras or more squirrel research -- it does not matter to Salmon as long as the money is used for anything other than to pay down debt.

Here is the bottom line:  Businesses and individuals are trying to reduce their debt.  And many hard-working people think they are being successful at this.  But the joke is on them.  The government is running up trillions in debt in their name, thwarting American's desire to de-leverage.  Mr. Salmon wants us to thank the government for this.  Hah.

All-in-all, this is an awful argument to try to justify Congressional and Presidential fecklessness vis a vis  the budget.

Via Cafe Hayek, Paul Krugman says:

And surely the fact that the United States is the only major advanced nation without some form of universal health care is at least part of the reason life expectancy is much lower in America than in Canada or Western Europe.

If I were a cynical person, I might think that the tortured and overly coy syntax of this statement is due to the fact that Krugman knows very well that the causation he is implying here is simply not the case.  Rather than rehash this age-old issue here on Coyote Blog, let's roll tape from a post a few years ago:

Supporters of government medicine often quote a statistic that shows life expectancy in the US lower than most European nations with government-run health systems.  But what they never mention is that this ranking is mainly due to lifestyle and social factors that have nothing to do with health care.  Removing just two factors - death from accidents (mainly car crashes) and murders - vaults the US to the top of the list.  Here, via Carpe Diem, are the raw and corrected numbers:

And so I will fire back and say, "And surely the fact that the United States is the only major advanced nation without some form of universal health care is at least part of the reason life expectancy related to health care outcomes is so much higher in America than in Canada or Western Europe.

And check out the other chart in that post from that study:

US cancer survival rates dwarf, yes dwarf those of other western nations.    Even black males in the US, who one would suppose to be the victims of our rapacious health care system, have higher cancer survival rates than the average in most western nations (black American women seem to have uniquely poor cancer survival rates, I am not sure why.  Early detection issues?)

All this data came originally from a post at Carpe Diem, which I refer you to for source links and methodologies.

I have been watching the old PBS documentary series (in that Ken Burns style but I don't think by Ken Burns) and found this an interesting story of government policy fail that I had never heard much about.  Much like segregated train and bus service, racial redlining that is commonly blamed on private enterprise in fact began as government policy

Government policies began in the 1930s with the New Deal's Federal Mortgage and Loans Program. The government, along with banks and insurance programs, undertook a policy to lower the value of urban housing in order to create a market for the single-family residences they built outside the city.

The Home Owners' Loan Corporation, a federal government initiative established during the early years of the New Deal went into Brooklyn and mapped the population of all 66 neighborhoods in the Borough, block by block, noting on their maps the location of the residence of every black, Latino, Jewish, Italian, Irish, and Polish family they could find. Then they assigned ratings to each neighborhood based on its ethnic makeup. They distributed the demographic maps to banks and held the banks to a certain standard when loaning money for homes and rental. If the ratings went down, the value of housing property went down.

From the perspective of a white city dweller, nothing that you had done personally had altered the value of your home, and your neighborhood had not changed either. The decline in your property's value came simply because, unless the people who wanted to move to your neighborhood were black, the banks would no longer lend people the money needed to move there. And, because of this government initiative, the more black people moved into your neighborhood, the more the value of your property fell.

The Home Owners' Loan Corporation finished their work in the 1940s. In the 1930s when it started, black Brooklynites were the least physically segregated group in the borough. By 1950 they were the most segregated group; all were concentrated in the Bedford-Stuyvesant neighborhood, which became the largest black ghetto in the United States. After the Home Owners Loan Corp began working with local banks in Brooklyn, it worked with them in Manhattan, the Bronx, and Queens.

The state also got involved in redlining. (Initially, redlining literally meant the physical process of drawing on maps red lines through neighborhoods that were to be refused loans and insurance policies based on income or race. Redlining has come to mean, more generally, refusing to serve a particular neighborhood because of income or race.) State officials created their own map of Brooklyn. They too mapped out the city block by block. But this time they looked for only black and Latino individuals.

The academics interviewed in the series argued that nearly every black ghetto in the country was created in the 1930's by this program.

I don't have time to comment or peruse the study in depth, but this looks interesting.  From Randal O'Toole:

Harvard economists have proven one of the major theses of American Nightmare, which is that land-use regulation is a major cause of growing income inequality in the United States. By restricting labor mobility, the economists say, such regulation has played a “central role” in income disparities.

When measured on a state-by-state basis, American income inequality declined at a steady rate of 1.8 percent per year from 1880 to 1980. The slowing and reversal of this long-term trend after 1980 is startling. Not by coincidence, the states with the strongest land-use regulations–those on the Pacific Coast and in New England–began such regulation in the 1970s and 1980s.

Forty to 75 percent of the decline in inequality before 1880, the Harvard economists say, was due to migration of workers from low-income states to high-income states. The freedom to easily move faded after 1980 as many of the highest-income states used land-use regulation to make housing unaffordable to low-income workers. Average incomes in those states grew, leading them to congratulate themselves for attracting high-paid workers when what they were really doing is driving out low- and (in California, at least) middle-income workers.

As Virginia Postrel puts it, “the best-educated, most-affluent, most politically influential Americans like th[e] result” of economic segregation, because it “keeps out fat people with bad taste.” Postrel refers to these well-educated people as “elites,” but I simply call them “middle class.”

I have not read the study, but I think the word "proven" in the first sentence likely goes to far.  Economic systems are way too complex to absolutely show one variable among millions causes another.  I am convinced that the way we have regulated the housing market and promoted home ownership has reduced labor mobility.