Coyote Blog

A climate alarmist posts a "Bet" on a site called Truthmarket that she obviously believes is a dagger to the heart of climate skeptics.  Heck, she is putting up $5,000 of her own money on it.  The amazing part is that the proposition she is betting on is entirely beside the point.  She is betting on the truth of a statement that many skeptics would agree with.

This is how the climate debate has gone wrong.  Alarmists are trying to shift the debate from the key points they can't prove to facile points they can.  And the media lets them get away with it.

Read about it in my post this week at Forbes.com

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

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

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

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

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

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

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

I frequently write here that almost never does a month go by, even in a state where I have operated for over 10 years, that I don't discover yet another tax I owe or license I must obtain.

Today, I got a note from the state of Arizona that we must license our two septic pumping trucks with the state.  Already, these are licensed each year with the County in which they operate, a process that includes a fee (of course) and an inspection by the County.  Now I have to fill out a bunch of forms to send the exact same information to the state, with yet another fee (of course) and the need for another inspection each year by the County.  I asked if my current County license would suffice to cover the inspection, and I was told no.  So, to operate this truck in Arizona I must

• Fill out forms and send fee to County
• Get inspected by County
• Fill out forms with the same information as already sent to County and send fee to State
• Get inspected yet again by County, but this time on the state form
• Repeat every year

It is interesting to note that the state does nothing except file my form and bank the fee.  This is just another money and power grab -- more cash for the bureaucracy and yet another useless task (filing these forms and sending out compliance letters, etc) to justify their headcount.  Then the next time someone suggests "brutal cuts" to state budgets, everyone can scream that the rivers will run brown with sewage because the state won't have the people to collect all the paperwork that duplicates what the County already collects.

Just after wasting an hour or two of my time with this (and sending it to my managers to waste days of their time), I got a happy note from the US Census Bureau that I had been selected to file quarterly reports about my business (they have a special survey of the lodging business -- I presume they do this for other industries as well).  I wrote back:

To Whom It May Concern:

I am not sure what we have done wrong to be punished with this extra workload, but unless I hear back from you that this report is required of us by law under threat of some sort of dire consequence, we will not be filling it out.

We are a small company and only I, the President, am equipped to fill out this form.  We already fill out your annual survey and it is incredibly time-consuming for us, for it asks for data in ways we do not normally track it.  Further, it asks for our P&L in a form that does not match GAAP accounting, which causes all sorts of difficulties in completing it.  And we don’t normally compile results on a quarterly basis, only annual, so this report would be particularly onerous.  We actually have to run a business here.

Finally, I might add, I am loathe to send the government yet more data since this data will likely just be used as a justification to raise my taxes or increase our regulatory burden.

So no thanks.

PS- let's just assume the "you have a crappy job" jokes have already been made and move forward from there in the comments.

Reacting to the unbelievable economic ignorance he has seen in recent campaign ads, Don Boudreaux writes

If astronomy operated similarly to politics, the world’s top astronomers would compete furiously amongst themselves to see who could most effectively assure the general public that the sun orbits around a stationary flat earth – a flat earth that was created just 4,000 years ago and which sits atop a tower of turtles.

Rampant theft at the TSA

A former Transportation Security Administration agent who spent three years in jail for stealing from passenger luggage told ABC News that the practice “was very commonplace.” Pythias Brown, who worked at Newark International Airport, said he stole more than $800,000 worth of goods from luggage and security checkpoints. He was finally caught when he tried to sell a stolen CNN camera on eBay but forgot to take off all the stickers that tied the camera to the news network.

"It became so easy, I got complacent," Brown said. Almost 400 TSA officers have been fired for stealing from passengers over the past decade.

I am happy to vociferously criticize the many shortcomings in US civil liberties.  But one are where I can't agree with other civil libertarians is their frequent homage to Europe as the home of civil liberties enlightenment.  Kudos, of course, to countries like Holland and more recently Portugal for reasonable drug laws.  But Europeans have many problems we do not share, particularly in protecting, or not protecting free speech.  Here is another example, from Sweden.  Just because they have a reputation for sexual freedom does not make them a civil liberties paradise:

One of the prime arguments I have always made about the Assange asylum case is that his particular fear of being extradited to Sweden is grounded in that country's very unusual and quite oppressive pre-trial detention powers: ones that permit the state to act with anextreme degree of secrecy and which can even prohibit the accused from any communication with the outside world.....

Svartholm is  that I've long argued (based on condemnations from human rights groups) prevail in Sweden:

"Gottfrid Svartholm will be kept in detention for at least two more weeks on suspicion ofhacking into a Swedish IT company connected to the country's tax authorities. According to Prosecutor Henry Olin the extended detention is needed 'to prevent him from having contact with other people.' The Pirate Bay co-founder is not allowed to have visitors and is even being denied access to newspapers and television. . . .

"Since he hasn't been charged officially in the Logica case the Pirate Bay co-founder could only be detained for a few days.

"But, after a request from Prosecutor Henry Olin this term was extended for another two weeks mid-September, and last Friday the District Court decided that Gottfrid could be detained for another two weeks.

"To prevent Gottfrid from interfering with the investigation the Prosecutor believes it's justified to detain him for more than a month without being charged....

Unlike in the British system, in which all proceedings, including extradition proceedings, relating to Assange would be publicly scrutinized and almost certainly conducted in open court, the unusual secrecy of Sweden's pre-trial judicial process, particularly the ability to hold the accused incommunicado, poses a real danger that whatever happened to Assange could be effectuated without any public notice....

By the way, the whole sexual freedom thing?  Uh-uh.  Which is another reason Assange is worried, since women can pretty much retroactively any sex they later regret as a sexual assault.

I got a note from some advocacy group asking me to lend my voice to stopping some cut in SBA lending.  This is what they linked to:

A federal program designed to help small businesses with commercial real estate mortgages is coming to an end this week.

The U.S. Small Business Administration’s 504 loan refinancing program, which expires Thursday, allowed companies to refinance real estate and equipment loans.

SBA 504 loans for new purchases are still available.

I had a couple of thoughts

• Why do we need a government program for commercial real estate and equipment financing?  These are the only two sectors of small business lending that are robust right now.  I get 3 calls a week trying to give me equipment financing.
• The SBA has already pretty much killed  small business cash flow lending.  Basically, if you want a loan secured only by cash flow, the SBA is your only choice.  Why would a bank make such a loan privately when they can make it and get an SBA gaurantee paid for by the client?   As a result, no bank even has a desk for non-SBA lending, and since SBA lending is hard, many don't have an SBA desk any more.

I can't prove it, but I am convinced the SBA has killed innovation in the private lending market to small businesses.

Update:  Another thought - the SBA is the barely-useful quid pro quo cited by statists from all the fantastically expensive and time-consuming regulation that gets dumped on small businesses.  Well, I don't want it.  I don't want to give statists any cover that this is somehow an equal bargain.  It's a quarter flipped up on one side of the scale to balance ten tons of bullshit on the other side.  It's like sending flowers to someone you raped.

Consumers should cheer the news that low-cost competitors may be coming to the smartphone data market:

FreedomPop's service, which begins operations on Monday, will offer users half a gigabyte of high-speed wireless data per month free and sell more at cheaper rates than what the big carriers charge: one gigabyte for $10 a month and five gigabytes for $35 a month.

Verizon's new data plans, by comparison, charge $80 a month for six gigabytes of data, plus a smartphone connection fee of $40 a month that also comes with unlimited calls and texts.

FreedomPop says much of its income won't come from selling data. Instead, it will sell additional services, such as a Turboboost feature that for a fee will guarantee the fastest speeds available to a user even when on a congested network.

Ahh, but look at the last sentence.  This looks to me like it could well run afoul of the whole "net neutrality" BS, as they will be charging to put someone's traffic ahead of another's.  Here is my prediction:  Like almost all government regulation, net neutrality laws, which their authors probably imagined would keep large players like Verizon in check, will actually be used by Verizon and AT&T to squash upstart competitors like these guys  (I can't even write the word "FreedomPop" because it seems to be one of the most painfully bad names I have heard in a sector full of bad corporate and product names).

Mike Rizzo raises a point that is a common theme here at Coyote Blog.  People often propose a statist solution because they distrust some private actor (e.g. large corporations) and want someone with power over the top of them.  However, to create such a regulatory structure, one has to give even more power to the state's regulator than the corporation has.  At least one has the choice of whether or not to deal with a private entity (unless of course it is a government-enforced monopoly, but that just takes us back to statism).  We give private actors power only to the extent that we choose to transact with them.   When we give government power, there is no longer this sort of opt-out.  Rizzo observes:

Just ask the person a question. “I can respect why you think this. But can you do me a favor? Can you imagine getting your ideal world in place, and then rather than “your guys” being in charge, how would you feel if the person/people running it were people you completely mistrusted, despised and disagreed with? Would you feel good about your system? Why or why not?”

I tell folks all the time - I don't trust private actors any more than the people in government.  What I trust more are their incentives and the tools I have for enforcing accountability on them.

These two articles were back to back in my feed reader this morning.  First, Joe Biden argues that medical procedures should be free if you feel you need one

“Everyone knows, everyone in this room knows that President Obama has increased the benefits available to people on Medicare by the action he took,” Biden said. “You are now able to go get a wellness exam, and guys, if you conclude you need a colonoscopy because of the feeling you had or you need a breast health examination, you don’t have to pay a co-pay for that.”

And then I got this from China

As part of its 8 day Golden Week celebration, China's central planners decided to do a good thing for the people and remove all tolls from expressways. That was the populist explanation. The fundamental one was that this act would somehow spur the economy. Alas, while the same people may have saved some transit money in the process, what they did not save was on transit times. As South China Morning Post reports, millions were promptly stuck in traffic jams as a result of the politburo's generosity. From SCMP: "A bid by authorities tostimulate the economy by suspending road tolls for the "golden week" holiday brought huge tailbacks across the mainland yesterday as almost 86 million travelers took to the roads. That's 13.3 per cent more than on the first day of the National Day holiday last year." And then the fun began.

"One traveller blogged that he could only move 200 metres in an hour on the Zhengzhou to Shijiazhuang expressway in Henan province. Others said the queue of cars on the Guangzhou to Shenzhen expressway was 40 kilometres long. All roads leading out of Guangdong were jammed, with cars moving at about a kilometre an hour in front of some toll gates. Provincial traffic-management authorities estimated traffic on expressways would increase by 40 to 80 per cent compared with the same period last year, the Shenzhen Special Zone Daily reported. The People's Daily reported dozens of accidents on 24 highways across the mainland, further aggravating the congestion."

Since the government still keeps hammering down doctor supply, through enforcement of tough licensing procedures and through price caps (that keep getting cut) on doctor visits, we should soon be seeing the equivalent of this highway traffic jam in medicine.  Which is why every socialized medicine country in the world has queues and why their citizens keep flying to the US for treatment.

I am generally skeptical of movies released in late September - after all, if the studio really had much hope for them, they would have released them in summer or waited for Christmas.  But I took my daughter because she is a Joseph Gordon Levitt fan, and it turned out to be solid.  Nitpickers need to put away the inevitable time-paradox-mistake criticisms, but we both enjoyed it.

While Sheriff Joe was pursuing a vendetta against County officials, chasing down Mexicans with broken tail lights, and raiding dry cleaners demanding immigration papers, over 400 sexual assaults were going under-investigated.  According to the article, this was not an accident -- there was a real prioritization that put few resources in the special victims unit and put more and better staff on things like counter-terrorism (Phoenix being a well-known hotbed of terrorist activity).

The understaffing in the special-victims unit was due in part to the Sheriff's Office's priorities -- and the special-victims unit was not one of them, according to a half-dozen current and former sheriff's employees.

Despite a Maricopa County hiring freeze prompted by the faltering economy, the Sheriff's Office from 2005 through mid-2008 was hiring 45 to 50 new deputies annually and tackling initiatives that included counterterrorism and homeland-security enhancements. The office also embraced immigration enforcement, sending 60 deputies and 100 detention officers through a federal immigration-training program and creating a human-smuggling unit with at least 15 dedicated deputies.

Staffing in the special-victims unit remained unchanged during those years: four detectives....

The Sheriff's Office was allocated more than $600,000 in fiscal 2007 for six full-time positions for "investigating cases involving sexual abuse, domestic violence, abuse and child abuse." The Sheriff's Office now says the six new positions were to focus solely on child-abuse cases. In any event, they cannot say where those deputies went to work.

"We don't know," Chief Deputy Sheridan said. "We've looked, and we can't find any of those position numbers which were allocated for child-abuse cases."

This is due in part to the acknowledged misallocation of roughly $100 million in agency funds that had patrol deputies being paid out of an account designated for detention officers.

The department was almost certainly spending more on Joe Arpaio's PR than it was on the special victims unit.  Dozens of cases showed no investigation at all, and hundreds showed that no contact had been made either with the victim or the suspect.   Piles of case files were found random file cabinets and even one officer's garage.

A new California mandate on employers I completely missed:

California Governor Jerry Brown signed a law that permits as many as 6.3 million private workers without a pension plan to set aside retirement money for management by the state.

It is the first state-run pension program for nongovernment employees and may add as much as $6.6 billion to funds managed by the California Public Employees’ Retirement System, the biggest U.S. pension. Calpers, as the fund is known, has assets of $242 billion.

The law is aimed at businesses with five or more employees that don’t offer pensions or 401(k) savings programs. The law requires companies to contribute 3 percent of a worker’s salary to a retirement account. Workers will be enrolled in the program unless they choose to opt out.

This is just insane, and I don't remember any public debate on it.  Given that the government already has a forced retirement program with a much higher percentage contribution (Social Security with 16% of wages when including the employer piece), my guess is that this is meant as a bone for or a bailout of Calpers.  Calpers wields enormous political power in the state, and it is entirely believable that they alone are behind this.  Calpers is about to be forced to acknowledge that it is billions short of what it needs to cover future pension obligations because it has been assuming unrealistically high returns form its investments.  Without those high returns, more money needs to be put in the fund to cover public employee pensions that march to ridiculous levels.

I have skimmed the law, and there is nothing in there about what returns will be paid to these new private employees.  My guess is that private contributions will be used as a slush fund to make sure public employees get paid, because they DO have defined benefits, as well as a justification to pay Calpers managers more money.  I can absolutely guarantee that when push comes to shove and Calpers is short of money, private employees will see their benefits rolled back and their contributions going to public employees' pockets.

This is also insane for two other reasons:

1. In California, there has probably been a zillion lawsuits with the state punishing private entities for running "opt-out" rather than "opt-in" systems.   Having to explicitly opt out to keep ones money is a scam only the government is allowed to get away with
2. In our company, all but a few of our workers are already retired, working part-time for us to keep busy.  The vast majority of our employees, for example, are on Social Security and many also have private pensions.  So why am I forced to set up all the expensive infrastructure to provide 401K contributions to people who are all drawing down their 401k's?

Glen Reynolds writes:

The concern is that when people perceive the cost of government to be cheaper than it really is, they will demand ever more government benefits because they either don’t feel the cost directly or believe that others will be paying those costs.”

Social Security taxes are set at about the right level - the reason we have a problem with the program is that we spent the "trust fund" ages ago on everything but Social Security.  But Medicare is a different story.  Medicare taxes cover just a third of the benefits a participant can expect to eventually receive.  Of course everyone thinks it's a great deal, it's like they are buying Mercedes sedans for $15,000.

Update:  I know there are people who are horrified I would suggest raising a tax, that we should work the spending side or eliminate the program all together or replace it with a hybrid voucher system.  I would like to see any and all of that.  But there is absolutely no momentum for doing so.  Even Paul Ryan only fiddles around the edges in a barely meaningful way, and he is labelled as one step away from Hitler for doing so.

If the government is going to offer an "insurance" program, then the "premiums" need to be priced correctly.  If those "premiums" rise to absurd levels because the government is incompetent at management, then we might have some pressure to replace the program with something else.

If the post office were still charging 15 cents for a stamp, and then burying the resulting deficits in the budget somewhere, there would be a hell of a lot less pressure for reform.

State debt and unfunded liabilities have risen to an estimate $4.2 trillion, much of it in unfunded pension obligations.  That is nearly six times total state tax collections of all sorts (license fees, property taxes, sales taxes, income taxes, etc) putting the states close to Greek territory.  And I cannot tell from the methodology here, but $4.2 trillion likely underestimates unfunded obligations because many states have unrealistically high return expectations for their pension investment portfolios.

We expected Obama to be a dumpster fire on economic issues and commercial liberty.  And he has been.

But here are two charts showing how the traditional libertarian choice in two-party electrions of "liberty in the bedroom or liberty in the boardroom" has broken down.  First, Bush was a mess on economic issues.  Now, Obama is a wreck on civil liberties issues.   Here is use of domestic surveillance tools, many times without warrants:

source

And here are drone strike casualties:

source

This Administration has increased the frequency of drone strikes by a factor of 8 over George Bush.  It has claimed that any civilian deaths from these strikes are combatant deaths because, well, civilians shouldn't have been hanging around near people we want to kill.  The Administration has claimed the right to assassinate Americans without any sort of due process, continues rendition and indefinite detainment, and has ramped up Federal raids on medical marijuana dispensaries in places like California where they are legal under state law.

Update:  While I was writing this, Ken at Popehat was saying something similar:

The United States government, under two opposed increasingly indistinguishable political parties, asserts the right to kill anyone on the face of the earth in the name of the War on Terror. It asserts the right todetain anyone on the face of the earth in the name of the War on Terror, and to do so based on undisclosed facts applied to undisclosed standards in undisclosed locations under undisclosed conditions for however long it wants, all without judicial review. It asserts the right to be free of lawsuits or other judicial proceedings that might reveal its secrets in the War on Terror. It asserts that the people it kills in drone strikes are either probably enemy combatants in the War on Terror or acceptable collateral damage. It asserts that increasing surveillance of Americans, increasing interception of Americans' communications, and increasingly intrusive security measuresare all required by the War on Terror.

But the War on Terror, unlike other wars, will last as long as the government says it will. And, as the MEK episode illustrates, the scope of the War on Terror — the very identity of the Terror we fight — is a subjective matter in the discretion of the government. The compelling need the government cites to do whatever it wants is itself defined by the government.

We're letting the government do that. We're putting up with it. We're even cheering it, because that's more comfortable than opposing it or thinking about how far it has gone.

Update 2:  And let's not forget that whole transparency thing.  The Obama Administration may be perhaps the worst Administration in decades in complying with FOIA requests for what should be public information.

This is pretty cool -- what look like rounded river rocks and sedimentary conglomerates on Mars.

From Tuesday evening's show:

I have argued before that police often behave as if they are legally dictator of their immediate area, and frequently assume they can issue orders, however asinine, to anyone in their visual range.  Of course this is legally not true (though I suppose it is legally true if you take into account that courts and the minimal accountability processes that exist for cops never punish them for such behavior).

Here is a great example.  The 2-minute TSA freeze drill, with the TSA yelling at people -- already through security -- within their visual range for moving.  I think they are ripping off Heinlein - was this in Starship Troopers?

This weekend I was driving all over the NYC area when I saw that iOS6 was available.  Stupidly, without reading reviews, I updated hoping to get the new verbal turn-by-turn directions  (the old iPhone navigation app was pretty much worthless if you are alone in the car as it did not have any verbal output).

I then spent the rest of the weekend following bizarre side roads, on tiny dirt roads, or getting instructions to turn a couple of hundred yards after I had passed the intersection.  At one point I got send off the highway on a 3 mile detour through some housing tract only to eventually be put right back on the same highway I started, about 100 yards from where it had me turn off.  I am sure that it will improve in the future, but right now the new Apple nav program is a half-baked mess.  My old Android phone was better for navigation three years ago, and I am sure Google has improved it since.  If I had to drive a lot on business trips, I would be back on Android in a second.

For those who may be interested, we are having a one-day conference on public-private partnerships for park operations on November 7 in Reno, Nevada.  The US Forest Service and those of us in the business have gotten a lot of inquiries from recreation agencies over the last year or so.  These folks are trying to keep parks open despite declining budgets.

The USFS figured out a way to do this over 30 years ago, and only now are other agencies starting to copy the model  (California State Parks just started using it this year, for example).  The USFS, like most agencies, charges a fee for the public to visit certain parks or to use campgrounds.  They found that they could not cover their high operating costs with just these user fees, and so had to use a lot of general fund money to keep the parks open.  Many complain that public recreation user fees are too high, but typically they cover only about half the agency's costs to run the park.  When general fund money started to go away, the USFS faced park closures, exactly the situation today in many state and local parks agencies.

The USFS found that private operators with a lower cost position and more flexibility could keep these parks open using just the user fees, and in fact actually pay the USFS some rent.  So instead of having to subsidize the park's operation with tax money, the parks began to generate funds for the USFS.

It took decades to get this right.  The USFS made mistakes in how they grouped parks into contracts, how they wrote the contracts, and how they did oversight.  The private companies made operating mistakes and some failed financially at awkward times, since when this program started there did not exist a pool of experienced operators.  But over the years, many of these problems have been worked out, and most privately-run sites operate to a standard at least as high as publicly-run parks.  Here in Arizona, three of the top five highest-rated public campgrounds are operated by private companies in the USFS program.

At this conference, both private operators and agency people experienced with this model will describe how it works as well as years of hard-won lessons learned.

The conference is free to most government agency officials, academics, and media and we have obtained a really inexpensive $49 hotel rate  (since by definition the agencies most interested in the model don't have much money).   The web site that describes the agenda and logistics is here.  Readers of this site who don't fit one of these categories but would still like to attend can email me at the link in the above site and I will get you in.

I found this article in the Arizona Republic, our local rag, almost criminal.  As far as it goes, I think the facts are correct.  What is amazing is what it leaves out.  First, the article:

Glendale administrators propose cutting nearly a quarter of the city's employees, or 249 positions, if voters approve a ballot measure in November to repeal a sales-tax hike.

Repeal of the 0.7 percentage-point tax hike that took effect last month would mean the loss of $11 million this year and $25 million annually through 2017, according to city estimates.

The City Council had approved the temporary increase to shore up its deficit-ridden general fund after laying off 49 employees and cutting $10 million from departments at the start of this fiscal year....

Proposed cuts include shuttering two of the three city libraries, one of its two aquatic centers, the TV station and all city festivals, including Glendale Glitters.

The article continues with the usual panic about cuts in police and firefighters and libraries and parks,  etc. etc.  What the article does not mention except in passing in paragraph 12 is the reason for the tax increase and the budget problems in the first place.  Over heated opposition in the community, the City Council, which has enjoyed pretending to be big shot Donald Trumps over the last few years with taxpayer money, handed a private individual $25 million a year to keep the ice hockey team in town, an ice hockey team that has the lowest attendance in the league despite doing fairly well the last few years.  This is on top of years of other subsidies and the taxpayer-funded $300 million stadium.   The numbers line up exactly -- a new $25 million a year subsidy and a new $25 million a year tax, and the paper cannot even connect these dots, even when they were directly connected in real time (ie the tax was specifically justified to pay for the subsidy).

What the article entirely fails to mention is that, given no voice in these corporatist extravagances in Glendale (the tiny town of 250,000 has also subsidized an NFL franchise and a couple of MLB teams), the only way the citizens of this town have any way to exercise accountability is to vote down the tax that enables this corporate handout.  They were not allowed to vote on the deal itself.  This is not a bunch of wacky red-staters voting to decimate the parks departments, as the city and the paper would like you to believe, but a citizenship that is tired of the idiotic corporate cronyism in the Glendale city council and are looking for some way, any way, to enforce some accountability.

This is the media and the state in bed together promoting the larger state.  Glendale's problems are entirely self-imposed, spending huge amounts of tax money on subsidizing sports teams and real estate ventures.  When these all failed like so many Solyndras, they are trying to make this out to be a tax shortfall, when in fact it is spending idiocy.

The media always seems to participate as a cheerleader in this statism, but local papers have a special interest in promoting this sort of sports corporatism.  Just about the only thing that sells dead-tree newspapers any more is the sports section.  I would love to see what would happen to circulation rates if they cut the sports section.  So any state actions that add professional sports franchises or keeps them in town contribute directly to the newspapers' survival.

This strikes me as typical of life in the corporate state.  

1. The Administration champions a plan to save $11.5 billion through lower Medicare reimbursement rates  (we can argue about whether this is simply sensible procurement strategy or a mindless price control, but won't today).
2. The Administration gives back $8 billion, or 70%, of these savings to the providers through another program.  It is unclear what criteria are used to select who gets the money and who does not, so I think we can assume political ass-kissing probably comes into play

Through this right-hand-left-hand game, the Administration can claim $11.5 billion in savings that don't actually occur; claim that the "cuts" are not hurting service, since they are giving the cuts back; while creating yet another multi-billion dollar fund that can be distributed to friends and supporters.

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

But here is one issue Obama is almost certainly going to be worse:  Bail outs of states.  States will start seeking Federal bailouts, probably initially in the form of Federal guarantees of their pension obligations, in the next 4 years.  I had thought that Obama would be particularly susceptible if California is the first to come begging.  But imagine how fast he will whip out our money if it is Illinois at the trough first?

Now that Chicago's children have returned to not learning in school, we can all move on to the next crisis in Illinois public finance: unfunded public pensions. Readers who live in the other 49 states will be pleased to learn that Governor Pat Quinn's 2012 budget proposal already floated the idea of a federal guarantee of its pension debt. Think Germany and eurobonds for Greece, Italy and Spain.

Thank you for sharing, Governor.

Sooner or later, we knew it would come to this since the Democrats who are running Illinois into the ground can't bring themselves to oppose union demands. Illinois now has some $8 billion in current debts outstanding and taxpayers are on the hook for more than $200 billion in unfunded retirement costs for government workers. By some estimates, the system could be the first in the nation to go broke, as early as 2018....

For years, states have engaged in elaborate accounting tricks to improve appearances, including using an unrealistically high 8% "discount" rate to account for future liabilities. To make that fairy tale come true, state pension funds would have to average returns of 8% a year, which even the toothless Government Accounting Standards Board and Moody's have said are unrealistic....

Look no further than the recent Chicago teachers strike. The city is already facing upwards of a $1 billion deficit next year with hundreds of millions of dollars in annual pension costs for retired teachers coming due. But despite the fiscal imperatives, the negotiation didn't even discuss pensions. The final deal gave unions a more than 17% raise over four years, while they keep benefits and pensions that workers in the wealth-creating private economy can only imagine.

As a political matter, public unions are pursuing a version of the GM strategy: Never make a concession at the state level, figuring that if things get really bad the federal government will have no political choice but to bail out the pensions if not the entire state. Mr. Quinn made that official by pointing out in his budget proposal that "significant long-term improvements" in the state pension debt will come from "seeking a federal guarantee of the debt."

I had not paid much attention to the Chicago teacher's strike, except to note that the City basically caved to the unions.  The average teacher salary in Chicago, even without benefits, will soon rise to nearly $100,000 a year for just 9 months work.  But I am amazed at the statement that no one even bothered to challenge the union on pensions despite the fact that the system is essentially bankrupt.  Illinois really seems to be banking on their favorite son bailing them out with our money.

An interesting set of data I read the other day:

In 2011, the Arizona Health Care Cost Containment System, Arizona's Medicaid program, paid for 53 percent of the state's 84,979 births, while private insurance paid for 42 percent, according to state statistics. The remainder were paid for by individuals....

Sen. Sylvia Allen, R-Snowflake, estimated that including pre- and postnatal care, it costs Arizona about $7,500 per birth for a delivery with no complications. Using those estimates, the 2011 deliveries would have cost Arizona taxpayers nearly $338 million....

In 2010, 58 percent [of Arizonans] had private insurance and 18 percent were on Medicaid.

So, 18% of Arizonans are having 53% of all births.  Another way to put this is that the 18% of people who get this procedure from the government for free account for half the demand, despite the fact that these folks are the ones who, if rational, should be the least likely to have a lot of births because they presumably have the most difficulty affording an extra mouth to feed.

God forbid I start sounding like some crotchity Conservative, but I continue to be amazed that pregnancy is treated as an "emergency procedure."  It strikes me that unlike, say, cancer, individuals can choose to avoid this condition fairly easily if they can't afford it.  I certainly know my wife and I put FAR more deliberation into having children than we did any other decision in our lives.  There is a terrible tension here - no one wants to turn away an expectant mother and endanger her child, but freely giving away an expensive procedure without any sort of restrictions nearly begs for a baby boom.  Those who try to argue that Obamacare won't increase health care expenses (in other words, arguing that demand curves don't upward) only have to look at these numbers.

PS-  Apparently, our state legislature is appalled by these numbers.  This is the same legislature that has proposed about a zillion abortion restrictions over the last year.  It will be interesting to see if fiscal issues change anyone's thinking on the abortion issue now that there is suddenly a $7500+ incentive to allow an abortion.

Update -- Thinking about this, I think the 18%/53% comparison is directionally correct but the difference is exaggerated due to Medicare.  I doubt Medicare delivers many babies, but a large part of the AZ population is on Medicare.  If the numbers were reset to show the percentage of Arizonans of child-rearing age on Medicaid, the number would be north of 18% but likely well below 53%.