Coyote Blog

My new column is up this week at Forbes.  This week it discusses the regulatory burden on small businesses.  Here is an excerpt:

Typically taxation issues get a lot more attention than these regulatory issues in discussions of government drags on the economy. But these small regulations, licenses, and approvals consume management time, the most valuable commodity in small businesses that typically are driven by the energy and leadership of just one or two people. If getting a certain license is a tremendous hassle in California, large corporations have specialized staff they throw at the problem. When a company like ours gets that dreaded call that the County wants a soil sample from under the parking lot, odds are that the owner has to deal with it personally.

So the ultimate cost of many of these silly little regulations is that they each act as a friction that wears away a bit more available time from entrepreneurs and small business owners. The entrepreneur who has to spend two hundred hours of her personal time getting all the licenses in place for a new restaurant is unlikely to have the time to start a second location any time soon. Since small businesses typically drive most new employment growth in the United States, can it be a surprise that new hiring has slowed?

Incredibly, after the column was in the can, I experienced another perfect example of this phenomenon.

In the camping business, July 4 is the busiest day of the year.  This year, on July 3, I got a call from one of my managers saying that the County health department had tested 20 ground squirrels in the area and found one with the plague.  I know this sounds frighteningly medieval, but for those of you who live out west, you may know that some percentage of all the cute little western rodents, from prairie dogs to chipmunks, carry the plague.  Its why its a bad idea for your kids and dogs to play with them.

Anyway, in the past, we have usually been required to post warnings in the area giving safety tips to campers to avoid these animals, what to do if one is bitten, etc.  At the same time, we then begin a program of poisoning all the lairs we can find.  It's about the only time any government body anywhere lets us kill anything, because only the hardest core PETA types will swoon over rubbing out a rodent carrying the black death.

But apparently, in the past when these mitigation approaches applied, the county health department was not in a budget crunch and in need of high-profile PR stories that would reinforce with taxpayers the need to fund their organization.  This time the health department marched out and closed the campground on July 4 weekend, kicking out campers from all 70 sites.  We spent the day dealing with angry customers, refunding money, and trying to find them new lodging on a weekend where most everything was booked up.  Fortunately we have a large overflow area at a nearby campground and offered everyone a special rate over there.

It is hard to imagine that, given the whole year to test, they just suddenly happened to find a problem at one of the busiest sites in the LA area on the busiest weekend of the year, particularly since they simultaneously changed their mitigation approach from notification to closure.   I have tried hard to find the original time stamp on the press release they sent out.  I can't prove it, but it sure seemed like a lot of media had the story before we (operating the campground) had been informed of a thing.  Incredibly, the health department was directing the campers to a nearby campground that was easily close enough to our campground to share the same rodent populations.  But that campground had not had a positive plague test.  Why?  Because that campground has not been tested recently, at least according to the official who brought us the news.  We're in very good hands.

On this blog, over the last couple of months, I have presented a pretty clear set of facts showing that, with the possible exception of some rural border regions beset by drug gangs, the vast majority of Arizona has experienced rapidly falling crime rates, in fact crime rates falling much faster than in the rest of the country.  The crime rates of even our key border towns has remained flat.

What to make, then, of these statements by our governor.

Gov. Jan Brewer on Friday reiterated her assertion that the majority of illegal immigrants are coming to the United States for reasons other than work, saying most are committing crimes and being used as drug mules by the cartels.

Brewer's remarks are an expansion of comments she made last week during a televised debate between the four Republican gubernatorial candidates....

In the debate, Jette [a candidate running against Brewer] said that most people who cross illegally into Arizona are "just trying to feed their families." Brewer disputed that, saying, "They're coming here, and they're bringing drugs.

And they're doing drop houses, and they're extorting people and they're terrorizing the families." The governor, who has become a national media figure since signing Senate Bill 1070 into law on April 23, went further on Friday, saying that the "majority of the illegal trespassers that are coming (into) the state of Arizona are under the direction and control of organized drug cartels."

When pressed, Brewer said that even those who do come to the United States looking for work are often ensnared by the cartels.

"They are accosted, and they become subjects of the drug cartels."

Estimates are that there are 8-12 million illegal immigrants in the US (Brewer's hispano-phobic allies would put the number much higher).  They are mostly all drug dealers and criminals?  Really?

I try really hard not to try to guess at what motivates folks I disagree with by assuming they are driven by something dark and evil, but how else in this case can one describe opinions like this so contrary to facts as anything other than prejudice against a particular ethnic group?

Just look at the actions of our governor and folks like Joe Arpaio.  If it really were the case that illegal immigrants are all criminals uninterested in legal work, then why is so much recent legislation aimed at business owners that hire illegal immigrants?  Or at day labor centers?  Why are all of Sheriff Joe's immigration sweeps raiding lawful businesses rather than, say, crack houses?  After all, if illegal immigrants are all just drug dealers not looking for real work, why spend so much time looking for them, uh, doing real work?

Postscript: If Brewer is in fact correct, then there is a dead easy solution for the illegal immigration problem -- legalize drugs.  She and I both agree that the worst criminal elements of illegal immigrants would be much less of a problem without the illegal drug trade.  The only difference is that I think that segment makes up less than 1% of the population of illegal immigrants, and she thinks its everyone.

Further, to the extent that some illegal immigrants just trying to support their families are "ensnared" by drug cartels (whatever that means) it is because of their immigration status.  Make them legal residents of the country, and no one has any particular leverage over them.

Note to Commenters: Many, many of you have disagreed with me vociferously on immigration.  Please, I would love to see reasoned comments defending Brewer, particularly with data.  In particular, please use the laws of supply and demand to explain how the majority of 8-12 million people are able to earn a living in the illegal drug trade in the southwest.  To help you out, there are about 6.6 million people in Arizona.  Based on national rates of 8% of over age 12 being users, about 500,000 of those are illegal drug users.  One estimate is that there are 500,000 illegal immigrants in Arizona.

Update: Are she and I living in the same state?

Arizona GOP Gov. Jan Brewer claimed recently that law enforcement has been finding beheaded bodies in the desert "” but local agencies say they've never encountered such a case.

"Our law enforcement agencies have found bodies in the desert either buried or just lying out there that have been beheaded," Brewer said Sunday, suggesting that the beheadings were part of increased violence along the border.

But medical examiners from six of Arizona's counties "” four of which border Mexico "” tell the Arizona Guardian that they've never encountered an immigration-related crime in which the victim's head was cut off.

Readers know I oppose recent Arizona immigration legislation and enforcement initiatives.  I don't think government should be stepping in to effectively license who can and can't work in this country, and am thus a supporter of open immigration (which is different from citizenship, please note).  As I support open immigration, both from a philosophic standpoint as well as a utilitarian perspective, I don't support laws to get tougher on illegal immigrants, any more than I support laws to get tougher on the failed practice of drug prohibition.

That being said, reasonable people can disagree, though some for better reasons than others.  But I don't see how all these folks who support tougher laws on immigration with the mantra that it is all about the rule of law can justify this piece of unconstitutional garbage:  (Hat tip to a reader)

Buoyed by recent public opinion polls suggesting they're on the right track with illegal immigration, Arizona Republicans will likely introduce legislation this fall that would deny birth certificates to children born in Arizona "” and thus American citizens according to the U.S. Constitution "” to parents who are not legal U.S. citizens. The law largely is the brainchild of state Sen. Russell Pearce, a Republican whose suburban district, Mesa, is considered the conservative bastion of the Phoenix political scene....

The question is whether that would violate the U.S. Constitution. The 14th Amendment states that "all persons, born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States. No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States." It was intended to provide citizenship for freed slaves and served as a final answer to the Dred Scott case, cementing the federal government's control over citizenship.

But that was 1868. Today, Pearce says the 14th Amendment has been "hijacked" by illegal immigrants. "They use it as a wedge," Pearce says. "This is an orchestrated effort by them to come here and have children to gain access to the great welfare state we've created." Pearce says he is aware of the constitutional issues involved with the bill and vows to introduce it nevertheless. "We will write it right."

I didn't like SB1070 that much, but as ultimately amended it was not nearly as radical as this.  I think those of us who feared SB1070 as a first step on a slippery slope should feel vindicated by this.

I am a little late on this but want to link it none-the-less:

As predicted was inevitable, today the Spanish newspaper La Gaceta runs with a full-page article fessing up to the truth about Spain's "green jobs" boondoggle, which happens to be the one naively cited by President Obama no less than eight times as his model for the United States. It is now out there as a bust, a costly disaster that has come undone in Spain to the point that even the Socialists admit it, with the media now in full pursuit....

La Gaceta boldly exposes the failure of the Spanish renewable policy and how Obama has been following it. The headline screams: "Spain admits that the green economy as sold to Obama is a disaster."

This is a failure of every single number ever published by supporters of government stimulus programs.  They always fail to acknowledge that the money for these programs came from somewhere.  It was being employed by someone to buy something or to invest in something or to pay someone's wages.  Every private company in the world seems to understand this concept of opportunity cost, so it is amazing that it is so hard to grasp in the media which breathlessly reports every BS number Obama has spit out.

From Steve Chapman:

It's no surprise that Arizonans resent the recent influx of unauthorized foreigners, some of them criminals. But there is less here than meets the eye.

The state has an estimated 460,000 illegal immigrants. But contrary to myth, they have not brought an epidemic of murder and mayhem with them. Surprise of surprises, the state has gotten safer.

Over the last decade, the violent crime rate has dropped by 19 percent, while property crime is down by 20 percent. Crime has also declined in the rest of the country, but not as fast as in Arizona.

Babeu's claim about police killings came as news to me. When I called his office to get a list of victims, I learned there has been only one since the beginning of 2008"”deeply regrettable, but not exactly a trend.

Truth is, illegal immigrants are less likely to commit crimes than native Americans. Most come here to work, and in their desire to stay, they are generally afraid to do anything that might draw the attention of armed people wearing badges.

El Paso, Texas, is next door to the exceptionally violent Ciudad Juarez, Mexico, and easily accessible to illegal entry. Yet it is one of the safest cities in the United States.

After famously throwing out 200 years of bankruptcy law to hose secured creditors in favor of uni0ns at GM and Chrysler, the Obama Administration is again bailing out the unions that helped get him elected

Barely 15 percent of all construction-industry workers in the United States are union members, while the remaining 85 percent are nonunion, according to the U.S. Department of Labor's Bureau of Labor Statistics. So why has President Obama signed Executive Order 13502 directing federal agencies taking bids for government construction projects to accept only those from contractors who agree in advance to a project labor agreement that requires a union work force? Obama's new order applies to all federal construction projects with price tags of $25 million or more, and it means all such contracts will only be awarded to companies with unionized work forces.

The costs of this to the public are pretty obvious, not only in terms of fairness but in increased costs and reduced competition.

Another factor helps explain Obama's willingness to sign an executive order that will put millions more tax dollars in union coffers. Mix points out that unions under PLAs typically exact agreements that include requiring contractors to make payments to union pension funds. This is an increasingly urgent issue, as the Washington Examiner's Mark Hemingway has recently detailed in these pages. According to Labor Department filings, the average union pension has only enough money on hand to cover 62 percent of the benefits it has promised to union members. Pension plans with 80 percent funding are considered "endangered" by federal auditors, while those with less than 65 percent funding are put on the "critical" list. With this latest executive order, it's clear that Obama intends to give unions on the critical list a massive dose of federal tax dollars to cure what ails them.

I'll keep saying it - this is right from the playbook of the European-style corporate state.

Yes, the Europeans pay less per person for health care.  Is the care as good?

Well, when life-expectancies are adjusted for things that are not amenable to the health care system (like murder rates), Americans have the highest life expectancy in the world, and by far the highest cancer survival rates.

The prices we pay for drugs and medical devices, while high, effectively subsidize the entire world's medical R&D.

Oh yes, and we don't have to wait 6 months to get treated.  The wait time issue is often poo-poo'd by elites in the political debate, but it seems to be an important issue for real people:

In a survey, people were asked how they felt about various forms of medical care for a urinary tract infection or for influenza. While people preferred traditional, office-based care, they would opt to see a nurse-practitioner at a retail clinic if they could save at least $31.42. They would wait one day or more for an appointment if they would save at least $82.12.

The researchers concluded that the appointment wait period is the most important determining factors in an individual's choice on where to seek care for minor health problems such as influenza. Primary-care doctors who fear their business will be undercut by the growing popularity of retail health clinics may want to offer more same-day appointments and walk-in hours."
...

"This study is the first in the United States to quantify the relative importance of and the utility associated with the main attributes of retail clinics. The utility (willingness to pay) associated with receiving same-day care is more than twice the utility associated with receiving care from a physician. Primary care physician practices, especially in competitive markets, are therefore likely to derive greater competitive advantage by addressing patient convenience features (such as same-day scheduling, walk-in hours, and extended hours) than by reducing fees."

Follow the link for more and a link to the original study.  Patient convenience is the LAST thing government health care systems design for, but apparently, what actual people most want.

I say over and over, yes, we could reduce the cost of medical care (but by increasing the accountability of individuals for paying for their own care, exactly the opposite direction taken by the Obama plan).  But a big reason that we pay more is not because we are stupid and incompetent, but because we can because we are wealthier.  It is incontrovertible that we are wealthier per capital than the Europeans -- is it surprising that we would choose to spend a large portion of this extra wealth on our health?

The NY Times has a fairly ugly story, though hardly unique, of a project to restore water flow to the Everglades turning into a corporate welfare project for United States Sugar.   The short story is that in a time when United States Sugar was in desperate financial straights and when real estate prices in Florida were tumbling, the Florida government treated USS like it had all the power, rolling over to paying above-market prices and letting USS pick and choose the land parcels to be purchased.  The story did not mention much about it, but there is a second large sugar producer in the area who it strikes me could have been played off against USS to get the best deal.

Remember that the US Sugar operation likely exists only because of sugar tariffs and import quotas that raise the price of sugar in the US well above the world norm.  So consumers are paying extra, and drinking soft drinks with crappy HFCS, so that US Sugar can screw up the Everglades and get bailed out by taxpayers.   Readers will understand it is the purest coincidence that US Sugar's attorney is chief of staff to the state's governor.

From running my recreation privatization blog, I know that there are many folks who will ascribe this to a failure of private enterprise and an excess of corporate speech and money in politics.   But to my mind this is a great example of why election and speech limits don't have any utility.  This is all back room lobbying, cronyism, and quid pro quo politics that doesn't show up in any monetary ledger, and thus are not and have never been subject to any limits.  As I wrote here:

when the stakes of government are so high, money and influence never goes away.  Just as in any economy, when you ban money, a barter economy arises.  So if we ban large campaign spending, then the quid pro quo becomes grass roots efforts and voter mobilization.  Groups like the UAW become more powerful (we are seeing that already).  They are trading their member's votes for influence.  Connected companies like GE are doing the same thing, trading their support for legislation that is generally hostile to commerce for specific clauses in said legislation that exempts GE and/or makes the laws even more punishing on their competition.  The problem with all this activity is it is hard to see and totally unaccountable "” at least with advertisements we see people out in the open with their agendas.

The other obvious point is that no private entity would ever allow themselves to get rolled so badly by US Sugar.  They would have sense USS's weakness and broken its knees in the negotiation.  One US Sugar manager even says as much:

For its board members, Mr. Crist's overture was appealing in part because they figured a government purchase would be far more lucrative than a private deal.

"It wasn't another company coming in and bottom-fishing you," Mr. Wade said. "They knew it would be for fair-market appraisals."

Over at my privatization blog, I wrote about a deal in Chicago where the government made four or five huge mistakes in issuing a private contract that a private company (or at least one that is not going to go bankrupt) would never make.  So of course the problems are blamed on privatization.

I find it pretty hilarious that folks on the left suddenly feel the US is ungovernable, largely because they have not been able to pass a couple of complicated and risky legislative initiatives.  Was the US ungovernable when Bush couldn't pass Social Security reform?   It seems that showing leadership on a national scale with diverse interests is a tad harder than running a grad school policy round-table.  Oddly, the left seems befuddled by actual diversity of opinion, rather than the faux diversity with lock-stepped beliefs they built in academia and among themselves.

I don't read Real Clear Politics much but I thought Jay Cost makes a good point:

Let's acknowledge that governing the United States of America is an extremely difficult task. Intentionally so. When designing our system, the Founders were faced with a dilemma. How to empower a vigorous government without endangering liberty or true republicanism? On the one hand, George III's government was effective at satisfying the will of the sovereign, but that will had become tyrannical. On the other hand, the Articles of Confederation acknowledged the rights of the states, but so much so that the federal government was incapable of solving basic problems.

The solution the country ultimately settled on had five important features: checks and balances so that the branches would police one another; a large republic so that majority sentiment was fleeting and not intensely felt; a Senate where the states would be equal; enumerated congressional powers to limit the scope of governmental authority; and the Bill of Rights to offer extra protection against the government.

The end result was a government that is powerful, but not infinitely so. Additionally, it is schizophrenic. It can do great things when it is of a single mind - but quite often it is not of one mind. So, to govern, our leaders need to build a broad consensus. When there is no such consensus, the most likely outcome is that the government will do nothing.

The President's two major initiatives - cap-and-trade and health care - have failed because there was not a broad consensus to enact them. Our system is heavily biased against such proposals. That's a good thing.

One of the roles of the President is to bring some adult supervision to his party in Congress.  Bush failed on this, allowing Republicans to run rampant in earmarking excess, and Obama has if anything been even worse on this dimension.  He routinely remains aloof from the legislative details (some would say he just got rolled by Nancy Pelosi) and then proceeds to speak as if the actual bill matches his grand words and promises when it is obvious to all that it does not.

Via Mises Blog:

The hidden hand behind this unsanitary calamity is the US government. The true origin of the mess was not in the hour before I arrived but back in 1994, when Congress passed the Energy Policy and Conservation Act.This act, passed during an environmentalist hysteria, mandated that all toilets sold in the United States use no more than 1.6 gallons of water per flush. This was a devastating setback in the progress of civilization. The conventional toilet in the US ranges from 3.5 gallons to 5 gallons. The new law was enforced with fines and imprisonment.

For years, there was a vibrant black market for Canadian toilet tanks and a profitable smuggling operation in effect. This seems either to have subsided or to have gone so far underground that it doesn't make the news. I've searched the web in vain for evidence of any 3.5 or 5.0 gallon toilet tanks for sale through normal channels. I wonder what one of these fetches in the black market. This possible source has no prices and an uncertain locale.

The toilet manufacturers, meanwhile, are all touting their latest patented innovations as a reason for the reduced hysteria surrounding the toilet disaster. I suspect something different. We have all gotten used to a reduced standard of living "” just as the people living in the Soviet Union became accustomed to cold apartments, long bread lines, and poor dental care. There is nothing about our standard of living that is intrinsic to our sense of how things ought to be. Let enough time pass and people forget things. So let us remember way back when:

• Toilets did not need plungers next to them, and thank goodness. Used plungers are nasty, disease carrying, and filthy. It doesn't matter how cute the manufacturer tries to make them or in how many colors you can buy them. In the old days, you would never have one exposed for guests. It was kept out in the garage for the rare occasion when someone threw a ham or something stranger down the toilet.
• Toilet paper was super thick and getting thicker. None of this one-ply nonsense.
• You never had any doubt about the capacity of the toilet to flush completely, with only one pull of the handle. The toilet stayed clean thanks to five gallons of rushing water pouring through it after each flush.

It concludes:

"Capitalism achieved something spectacular in waste disposal. Government came along and took it away from us."

I thought this was really funny -- from an email I got today:

With water supplies drying up in the next 10 years, the Salton Sea poses an economic and ecological threat to the Coachella Valley and large portions of Riverside and Imperial counties. And while plans to restore the Salton Sea exist, government funding and determination to tackle this potential multi-billion disaster have not materialized.

Why is this funny?  Because the Salton Sea is the result of a man-made environmental disaster about a century ago.  The lake formed when floodwaters from the Colorado River roared down a man-made canal, breached a dike, and formed the lake.  Since then, this record "spill" which dwarfs the sum total volume of every oil spill of all time has been slowly drying up like a puddle on the garage floor.  I suppose I am OK retaining it if people have gotten used to it, but I find it funny that the natural reversal of a man-made ecological disaster is itself an ecological threat.

The following, by the way, has to be the dumbest idea of all time from an economic and energy balance perspective:

The Imperial County Board of Supervisors and Imperial Irrigation District have voted to explore the Sea to Sea Plan, which not only brings water to the sea, but generates hydroelectric energy that will be used for desalinization of water that can then be sold to water users throughout the Southwestern United States and Mexico. This new, reliable water supply will generate funds for further Salton Sea restoration.

So we pay money to pump water out of the Sea of Cortez, but then somehow have this generate electricity that pays for desalinization to then pump the water back out of the Salton Sea for irrigation.  Sorry folks, but I think the second law of thermodynamics says this won't work.

Update: OK, from here, one source says the water generates energy via hydroelectric plants, which seems odd (pumping water up and then harvesting the energy going down never balances, though this is used in certain California lakes as a method of energy storage) while one source says the power is geothermal.  Hmm, does "half-baked" come to mind reading this?

Update #2:  Shouldn't desalinization occur as close as possible to the source?  Otherwise you are paying to pump tons of salt you are going to eventually remove.

I am slammed here at work, but I will give you a couple of nice articles on this topic.  First from IBD:

The United Nations' Copenhagen Climate Conference is going fast into meltdown. It may be because it's not about climate anymore, but fitting a noose on the world's productive economies and extracting wealth transfers.

Poor countries have gone from defending their right to economic development as a reason for exemptions to emissions cuts to claiming a "legitimate" right to vast wealth transfers from the West to prevent emissions. They call it "climate justice."

Monday, the Group of 77, led by African states, shut down the conference for the second time, saying they would pick up their marbles and go home if the West didn't agree to their formula for emissions cutbacks and send them more than the $10 billion promised by the West....

Having manipulated the foreign aid racket for decades, the African officials knew just what buttons to push with Western Europeans. Not surprisingly, they won concessions. No doubt they'll do it again to get more, and the Danes and other one-worlders will give them what they want.

The second is from Charles Krauthammer

The idea of essentially taxing hardworking citizens of the democracies to fill the treasuries of Third World kleptocracies went nowhere, thanks mainly to Ronald Reagan and Margaret Thatcher (and the debt crisis of the early '80s). They put a stake through the enterprise.

But such dreams never die. The raid on the Western treasuries is on again, but today with a new rationale to fit current ideological fashion. With socialism dead, the gigantic heist is now proposed as a sacred service of the newest religion: environmentalism.

One of the major goals of the Copenhagen climate summit is another NIEO shakedown: the transfer of hundreds of billions from the industrial West to the Third World to save the planet by, for example, planting green industries in the tristes tropiques....

Socialism having failed so spectacularly, the left was adrift until it struck upon a brilliant gambit: metamorphosis from red to green. The cultural elites went straight from the memorial service for socialism to the altar of the environment. The objective is the same: highly centralized power given to the best and the brightest, the new class of experts, managers and technocrats. This time, however, the alleged justification is not abolishing oppression and inequality but saving the planet.

Update:

Leaders of fifty African nations came to Copenhagen asking $400 billion for the next three years to "offset" carbon credit "damages" which they claim to suffer. Inexplicably, two days ago, that demand was increased to an eye-goggling 5% of GDP (gross domestic product), estimated at $722 billion from the United States alone. There never was a response from the industrialized world.

The London Guardian reports today that the disgruntled Africans may boycott the rest of the climate summit. The conference's own web page quotes the Ethiopian prime minister as saying he will "scuttle" talks unless there is discussion of "real money" and "not an illusion."

Perhaps the scariest potential effect of the proposed health care bills is the negative effect they likely will have on innovation.  And if we adopt the bill, we will never know what we have lost.  Unlike budgets, which with near certainty will become overdrawn quickly, we will never be able to point to the health care innovation we didn't have.

I want to quote liberally from a Ronald Bailey post, but I encourage you to read the whole thing:

Yet, the elements of market competition that still manage to survive have had the salubrious effect of driving medical innovation and improving patient health outcomes. A new study by the free market Cato Institute, "Bending the Productivity Curve: Why America Leads the World in Medical Innovation" reports:

...In three of the four general categories of innovation examined in this paper "” basic science, diagnostics, and therapeutics "” the United States has contributed more than any other country, and in some cases, more than all other countries combined. In the last category, business models, we lack the data to say whether the United States has been more or less innovative than other nations; innovation in this area appears weak across nations....

...Harvard University economist Kenneth Rogoff observed:

"[I]f all countries squeezed profits in the health sector the way Europe and Canada do, there would be much less global innovation in medical technology. Today, the whole world benefits freely from advances in health technology that are driven largely by the allure of the profitable U.S. market. If the United States joins other nations in having more socialized medicine, the current pace of technology improvements might well grind to a halt."

In my column, "2005 Medical Care Forever," I suggested this thought experiment:

...what if the United States had nationalized its health care system in 1960? That would be the moral equivalent of freezing (or at least drastically slowing) medical innovation at 1960 levels. The private sector and governments would not now be spending so much more money on health care. There might well have been no organ transplants, no MRIs, no laparoscopic surgery, no cholesterol lowering drugs, hepatitis C vaccine, no in vitro fertilization, no HIV treatments and so forth. Even Canadians and Britons would not be satisfied with receiving the same quality of medical care that they got 45 years ago....

As Rogoff suggests, the nationalized health care systems extolled by progressives have been living off the innovations developed by the "only country without a universal health care system." I wonder how Americans would vote if they were asked if they would be happy freezing medical care at 2005 levels forever?

I am a bit late on this, but this is from Jonathon Turley in the USAToday:

Around the world, free speech is being sacrificed on the altar of religion. Whether defined as hate speech, discrimination or simple blasphemy, governments are declaring unlimited free speech as the enemy of freedom of religion. This growing movement has reached the United Nations, where religiously conservative countries received a boost in their campaign to pass an international blasphemy law. It came from the most unlikely of places: the United States.

While attracting surprisingly little attention, the Obama administration supported the effort of largely Muslim nations in the U.N. Human Rights Council to recognize exceptions to free speech for any "negative racial and religious stereotyping." The exception was made as part of a resolution supporting free speech that passed this month, but it is the exception, not the rule that worries civil libertarians. Though the resolution was passed unanimously, European and developing countries made it clear that they remain at odds on the issue of protecting religions from criticism. It is viewed as a transparent bid to appeal to the "Muslim street" and our Arab allies, with the administration seeking greater coexistence through the curtailment of objectionable speech. Though it has no direct enforcement (and is weaker than earlier versions), it is still viewed as a victory for those who sought to juxtapose and balance the rights of speech and religion.

I continue to be confused why the Left in this country is so absolutely hostile to Baptists in Alabama but are so deferential to Muslims in Saudi Arabia.  Is it simply because one group makes credible threats of violence while the other does not?

Cameron Scott argues this when he says:

It's funny how green-haters accuse greens of being catastrophists, and then argue that cutting carbon emissions will destroy our economy and send us back to the Dark Ages. (See the trailer of Phelem McAleer's Not Evil Just Wrong for a prime example.)

Well, the last pooh-pooh is on them: It turns out we're already cutting emissions in the United States. Sure, some of that is due to a sluggish economy. But negative economic circumstances don't account for the 9 percent reduction in carbon emissions since 2007. In fact, the amount of carbon dioxide produced for every dollar of economic output declined by 3.8 percent in 2008.

I responded:

I really wish you would apply your analytical abilities to equities so I would have some way to bet against you.

Had you looked, you would see that the US has been reducing the CO2 intensity for a unit of economic output for decades. Here is the first source I found online but there are zillions.  In terms of improvement, the US has done better on this metric in the last 20 years than nearly any other country in the world, and just as well as the best (e.g. Germany)

So what you tell is not a new story, and has nothing to do with recent governmental dictats or pleas by environmentalists and everything to do with the ongoing incentives of individuals and businesses to reduce costs and be more efficient.

The reason our total Co2 output has not decreased is that while CO2 per unit of GDP (I will call this CO2 efficiency) has improved 2-4 percent per year, our GDP has grown the same rate or faster. So our overall CO2 output is flat to up (and has actually been down the last few years). One of the main reasons Europe has done better than the US in total CO2 reductions is not improvements in CO2 efficiency, but because their economies have lagged. They bent over backwards in Kyoto to make 1990 the baseline year, so they could include the horrible economies of Russia and East Germany which were in the process of crashing, thus giving them an automatic CO2 reduction for nothing.

Anyway, just look at your own numbers. In the year before, we got about 3% improvement in Co2 efficiency and had about 3% economic growth so CO2 output was flat to down. Last year we had about 3% improvement in Co2 efficiency and the economy was down a lot and thus CO2 was down a lot. When there are two variables in a function, and only one is changing, most logical people attribute the change in output of the function (ie changes in total CO2 output) to the variable that changed (ie economic growth). You, for some reason, attribute changes in the output to the variable (co2 efficiency improvements) which basically remained unchanged. Nice analysis.

You can even see it in your numbers. If CO2 efficiency is up 3.8 percent and Co2 output is down 9 percent, then that means the economic growth/size component has to be down 5.4% (.91/.962 - 1). So almost 60% of the "improvement" is due to a very bad recession and 10% unemployment, but you attribute it to the unchanging 40% piece.

Did anyone in the environmental movement study math or economics?

via Bruce McQuain:

David Freddoso reports that the CRS's Senior Foreign Law Specialist Norma Gutierrez has completed a study of the Honduran actions as they relate to former president Mel Zelaya and they don't reflect well on the US. Freddoso has distilled them to the following:

* The Honduran Congress appears to have acted properly in deposing President Manuel Zelaya. Unlike in the United States, the Honduran Congress has the last word when it comes to interpreting the Constitution. Although there is no provision in Honduras's Constitution for impeachment as such, the body does have powers to disapprove of the president's official acts, and to replace him in the event that he is incapable of performing his duties. Most importantly, the Congress also has the authority to interpret exactly what that means.

* The Supreme Court was legally entitled to ask the military to arrest Zelaya. The high court, which is the constitutional venue for trials of the president and other high-ranking officials, also recognized the Congress's ouster of Zelaya when it referred his case back down to a lower court afterward, on the grounds that he was "no longer a high-ranking government official."

* The military did not act properly in forcibly expatriating Zelaya. According to the CRS report and other news stories, Honduran authorities are investigating their decision, which the military justified at the time as a means of preventing bloodshed. In fact, Zelaya should have been given a trial, and if convicted of seeking reelection, he would have lost his citizenship. But he is still a citizen now, and the Constitution forbids the expatriation of Honduran citizens by their government.

* The proper line of succession was followed after Zelaya's ouster. Because there was no Vice President in office when Zelaya was removed (he had resigned to run for president), Micheletti was the proper successor, as he had been president of the Congress.

Via Matt Welch, from the USA Today:

The measure contains funding for a new destroyer and 10 C-17 cargo planes that the Pentagon did not ask for. It also includes hundreds of smaller earmarks for projects of special interest to individual lawmakers, among them $25 million for a World War II museum in New Orleans and $20 million for the Edward M. Kennedy Institute for the United States Senate in Boston, a kind of think tank dedicated to the legacy of the late senator.

Maybe its not as bad as it sounds.  Maybe its just a driving school.

Kevin Drum and the left think falling savings rates are all ... wait for it you are going to be shocked with surprise ... Reagan's fault.  OK, you are not surprised, since in left-world everything that is not Bush's fault is either Reagan's, Wal-mart's or Exxon's.

Paul Krugman looks at this chart of the personal savings rate in the United States and concludes that Reaganomics is the most likely reason that it fell off a cliff....

But I'd point to two other things that Krugman mentions: financial deregulation and stagnant median wages.  Those seem like much more likely villains to me.  Starting in the late 70s, middle class wages flattened out, which meant there was only one way for most people to support the increasing prosperity they had long been accustomed to: borrowing.  At the same time, financial deregulation unleashed an industry that marketed itself ever more aggressively on all fronts: credit cards, debit cards, payday loans, day trading, funky home mortgage loans, and more.  It was a match made in hell: a culture that suddenly glorified debt; an easy money policy from the Fed that made it available; a predatory financial industry that promoted it; and middle-class workers who dived in to the deep end without ever quite knowing why they were doing it.So, yeah, Reagan did it.  Sort of.  But he had plenty of help.

This is a great variation of the classic "I know what caused bad trend X -- everything I was against before I learned about bad trend X."  The following was my response in the comments:

1. The chart on the left starts out at 8%. Drum picked a recession peak as his starting point, a clever trick, but it appears that when Bush 1 left office the number was still about 8%. The largest fall seems to be in the Clinton years. For which, by the way, I don't "blame" Clinton any more than Reagan, certainly not without any real evidence or understanding of the mechanism involved.
2. Drum's "consumers are all stupid pawns of electronics retailers and credit card companies" wears thin at some point.   It's funny how everyone thinks this is true... of everyone else, but not himself.
3. Let me posit an alternative. The 1980s and 1990s saw huge percentage increases in asset values, both equities and homes. This began just about at the time the savings rate dipped. I would posit that consumers, in their mental calculation of savings, included paper gains on these assets. These paper gains are not, to my knowledge, included in savings rate numbers (you can be sure that is true because, if they were, savings rates would have dropped in late 2008). Thus consumers saved less money from their paycheck (which is measured, so it showed a drop in savings rate) while they considered themselves still to be saving as much or more as previously, because they were counting paper profits on assets as savings.  The big decreases coincide with the 80's bull market, the 90's bull market / internet bubble, and this decades housing bubble.

My explanation in number three will look even better if we see an increase in savings rate over the coming years as consumer expectations about asset value changes are made less exuberant by the recent burst bubble.  A fascinating chart would be to plot savings rate against some measure of consumer expectations of future asset price increases.  I bet they would correlate pretty well.

It is amazing to me that there can be numerous health care plans in Congress plus a jillion speeches on the topic by the President and not once does anyone mention "torts."  Now, I am not one to ascribe all cost problems in the medical field to defensive medicine and tort settlements.  Buthey t certainly are a factor.  It is just stunning that a President can stand up and talk numerous times about "unnecessary tests and procedures" and ascribe all of these to some weird profit motive by the doctors - weird because generally, the doctor gets no extra revenue from these tests, so somehow he or she is motivated by the profits of a third party lab.

But I think the rest of us understand that American tort law, which allows juries to make multi-million dollar judgements based on emotions and empathy rather than facts and true liability, has at least a share of the blame.   Not just the settlements, but the steps doctors go through to try to protect themselves from frivolous suits down the road.  Here are two interesting stories along these lines.  The first from Carpe Diem:

Zurich University Hospital has stopped treating North American "medical tourists," fearing million-dollar claims from litigious patients if operations go wrong. Hospitals in canton Valais have also adopted measures to protect themselves against visitors from the United States, Canada and Britain.

"The directive applies only to patients from the US and Canada who come to Zurich for elective, non-essential health treatments," said Zurich University Hospital spokeswoman Petra Seeburger.

"It is not because treatment is not financed; it is because of different legal systems." In a statement the hospital said it was "not prepared to risk astronomical damages or a massive increase in premiums." Seeburger emphasised that the restrictions only affected people not domiciled in Switzerland.

Apologies to Mark Perry for quoting his whole post, but if you are not reading Mark Perry, you should be.  The second example comes from Overlawyered:

Oh, I miss the days when you got a radiology report that said, "fracture right 3rd rib, no pneumothorax". Because of frivolous lawsuits radiologists have learned to be vague, noncommittal and to pass the buck of possible litigation. So now you get a 2 page report that says "linear lucency in right 3rd rib, clinical correlation recommended, underinflated lung fields cannot exclude underlying interstitial disease and or masses. CT recommended for further evaluation, if condition warrants." along with several other paragraphs of lawyer imposed legalmedspeak"¦.

Two excerpts from Obama's speech:

That's why under my plan, individuals will be required to carry basic health insurance "“ just as most states require you to carry auto insurance.

Oh, jeez, I sure wish that were true.  Auto insurance covers only catastrophic damages, such as totaling your car or incurring serious liability by hurting someone.   It does not cover regular repairs, preventative maintenance, etc.  Also, state-mandated auto insurance has a range of coverage caps -- if you want a higher cap, you can pay for it.  No one expects their company to pay their auto insurance, and if a company were to provide it it would be considered a taxable benefit.  Compared to our current health insurance system, auto insurance-like health insurance would be a brilliant improvement.  Despite his making this analogy, this is absolutely NOT what he is suggesting.  Also from his speech:

Under this plan, it will be against the law for insurance companies to deny you coverage because of a pre-existing condition. As soon as I sign this bill, it will be against the law for insurance companies to drop your coverage when you get sick or water it down when you need it most. They will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or a lifetime. We will place a limit on how much you can be charged for out-of-pocket expenses, because in the United States of America, no one should go broke because they get sick. And insurance companies will be required to cover, with no extra charge, routine checkups and preventive care, like mammograms and colonoscopies

Update: OK, here is another good pairing, from the same source -- first, he says that a public option will not be subsidized:

They argue that these private companies can't fairly compete with the government. And they'd be right if taxpayers were subsidizing this public insurance option. But they won't be. I have insisted that like any private insurance company, the public insurance option would have to be self-sufficient and rely on the premiums it collects.

But then he makes this comparison:

It would also keep pressure on private insurers to keep their policies affordable and treat their customers better, the same way public colleges and universities provide additional choice and competition to students without in any way inhibiting a vibrant system of private colleges and universities.

See?  The public option will not be subsidized and will work just like public universities which are highly subsidized.

By the way, it is almost impossible for government NOT to subsidize such an entity, in part because of the way government accounting differs from private accounting.  Government accounting is on a cash basis, so large up front investments show as a first year loss with no future expense implications.  In operation, it means capital spending is pretty much free.  And numerous charges that private firms take on, such as liability insurance, are not charged for on government books.   I compete with the government a lot, and have investigated this dynamic in depth.  Even why my costs are lower, the government, because of the way it accounts for things, often thinks its costs are much lower than mine and they under-price us.

This is awesome, from Carpe Diem:

On a purchasing power parity basis, France, Japan, and Germany would all be the poorest states in the United States, based on per capita GDP.  People on the coasts don't benchmark their education or health care spending against Mississippi, except perhaps to make the case that Mississippi is spending too little.  So why do they benchmark their spending against Germany or France.  Of course we spend more on health care per capita - we spend more than these countries per capita on everything from TV's to cars to movie tickets.

Via Steve Chapman at Reason:

[President Obama] says though the United States spends more per person on medical care than any other nation, "the quality of our care is often lower, and we aren't any healthier. In fact, citizens in some countries that spend substantially less than we do are actually living longer than we do."

That's one of the favorite rationales for a government-led overhaul. But it gives about as realistic a picture of American medicine as an episode of Scrubs.

It's true that the United States spends more on health care than anyone else, and it's true that we rank below a lot of other advanced countries in life expectancy. The juxtaposition of the two facts, however, doesn't prove we are wasting our money or doing the wrong things.

It only proves that lots of things affect mortality besides medical treatment. Heath Ledger didn't die at age 28 because the American health care system failed him.

One big reason our life expectancy lags is that Americans have an unusual tendency to perish in homicides or accidents. We are 12 times more likely than the Japanese to be murdered and nearly twice as likely to be killed in auto wrecks.

In their 2006 book, The Business of Health, economists Robert L. Ohsfeldt and John E. Schneider set out to determine where the U.S. would rank in life span among developed nations if homicides and accidents are factored out. Their answer? First place.

That discovery indicates our health care system is doing a poor job of preventing shootouts and drunk driving but a good job of healing the sick. All those universal-care systems in Canada and Europe may sound like Health Heaven, but they fall short of our model when it comes to combating life-threatening diseases.

In case you weren't sure what progressives were after:

The outgoing leader of Greenpeace has issued a call for the suppression of economic growth in the U.S. and Western nations. Under questioning by BBC reporter Stephen Sackur on the August 5, 2009 "Hardtalk" program, Gerd Leipold, the retiring leader of Greenpeace, said "the lifestyle of the rich in the world is not a sustainable model.

Excerpt from NotEvilJustWrong.com: "Leipold told the BBC that there is an urgent need for the suppression of economic growth in the United States and around the world. He said annual growth rates of 3 percent to 8 percent cannot continue without serious consequences for the climate."

"We will definitely have to move to a different concept of growth. ... The lifestyle of the rich in the world is not a sustainable model," Leipold told the BBC.

"If you take the lifestyle, its cost on the environment, and you multiply it with the billions of people and an increasing world population, you come up with numbers which are truly scary," Leipold explained.

Left unexplained by Leipold is how environmental conditions in the US have improved substantially over the last 100 years, not just coincident with but because of economic growth and growing wealth.   Our country looked like China 100 years ago, but growing wealth gave us the ability not only to produce, but to produce much more cleanly.   On virtually every metric you can name, the US is cleaner than it was even 30 years ago.  On many key metrics, like water quality and sulfur dioxide production, we are cleaner even than Europe and certainly cleaner than most Third World nations.

By the way, if you really want to tick someone off at Greenpeace, you should observe that the person most responsible for saving the whales was not anyone at Greenpeace, but was John D. Rockefeller.  Greenpeace may have saved a few by jumping their boat in front of some Japanese or Russian harpoons, but Rockefeller made whaling unprofitable.

Which brings us full circle to the "growth killing the planet" issue.  I made fun of this static view of man and technology here when  I wrote a hypothetical 1870 post on the Peak Whale Theory

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

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

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

Post title from here (lyrics here)

To some extent, there are signs Obama may be willing to walk back health care "reform" to just insurance "reform," though the two are highly related.  As a minimum, insurance "reform" is likely to include rules that no one can be denied coverage, community rating, and minimum covered service requirements.

These are really, really expensive.  Megan McArdle on the NY experience:

John Cole takes me to task for not knowing that health insurance premia have tripled in New York State.  Indeed, he's right--I should have checked.

But this is not the "gotcha" the left believes.  I erred so low because I was trying to be charitable to the cause of national health care.  You see, the reason that insurance premia are so high in New York State is that New York State enjoys community rating, guaranteed issue, and a very generous bevy of mandatory services.  The result is that the cost of insurance is very, very high.  What I failed to realize was just how radically out of line New York's rules had pushed its health care costs.  The average premium across the United States has increased about 25% since 2004.  In New York, the rate of inflation has apparently been about 16 times that.  I wasn't "aware" that insurance premiums have doubled and tripled over the last seven years, because for the country as a whole, this isn't true.

McArdle is sometimes irritating in bending over backwards to be fair to folks whose views don't deserve such charity and who would not ever extend the same favor back at her.  So it is kind of fun to see her going a bit postal over the last few days.

The NY Post has a very good editorial on the health care bills (HT:  Q&O).  Too much good stuff to excerpt, it includes even more crazy provisions in the House and Senate bills I had not seen yet (its like a scavenger hunt as people go through the 1000 pages, or maybe more like searching for landmines).

But since the bill doesn't even start taking effect until 2013 (except for the higher taxes, which come earlier, of course), we have to really really rush and make sure its approved before the August recess (and before critics are able to actually read the thing - no chance those in Congress will read it, ever).  Also, its such a burning problem, it just must be solved now, as evidenced by...

The most recent ABC News/Washington Post poll (June 21) finds that 83 percent of Americans are very satisfied or somewhat satisfied with the quality of their health care, and 81 percent are similarly satisfied with their health insurance.

They have good reason to be. If you're diagnosed with cancer, you have a better chance of surviving it in the United States than anywhere else, according to the Concord Five Continent Study. And the World Health Organization ranked the United States No. 1 out of 191 countries for being responsive to patients' needs, including providing timely treatments and a choice of doctors.

I have written a number of times, the fact that we spend more on health care is not a bug, its a feature.  We are the wealthiest nation on earth, and there is only so much we can spend on food, clothing, shelter, plasma TV's and other necessities.  We choose to spend a lot of that extra money on our health and longevity.  Why is that a bad decision?