Coyote Blog

Calculus in 20 minutes. Awesome.

I have told my story before of finding myself a visitor to Manhattan on 9/11.  I watched much of the disaster unfold from the roof of the W Hotel, and spent a weird Omega Man-like evening as some of the only people walking around a deserted Manhattan (police were letting people leave the island but not come back).  And the surreal drive around a still car-free Manhattan the next morning, as police would admit there was one way off the island, but out of some bizarre notion of security would not tell us where it was, so we drove much of the perimeter until we got out via the GW at the north end.

We were lucky in about  a zillion ways that day.  Our kids were being watched back in Seattle by someone with the flexibility to watch them for the four more nights it took us to get home.  We randomly bumped into a friend who had the last rent car in Manhattan and was headed west.  And, of course, my meeting was in midtown, unlike several friends of mine who had meetings in the WTC and never got out.

I still think the two best works of journalism on 9/11 I have seen are National Geographic's "Inside 9/11," which is airing off and on this week, and the Onion's 9/11 issue.  I know the latter choice seems weird, but the Onion was easily the first place anywhere to try to make people laugh when everyone was being so serious.  They did a great job of being funny without being disrespectful.  A bunch of the articles are still funny, and this one seems dead on in retrospect:

"America's enemy, be it Osama bin Laden, Saddam Hussein, the Taliban, a multinational coalition of terrorist organizations, any of a rogue's gallery of violent Islamic fringe groups, or an entirely different, non-Islamic aggressor we've never even heard of... be warned," Bush said during an 11-minute speech from the Oval Office. "The United States is preparing to strike, directly and decisively, against you, whoever you are, just as soon as we have a rough idea of your identity and a reasonably decent estimate as to where your base is located."...

Secretary of Defense Donald Rumsfeld said the war against terrorism will be different from any previous model of modern warfare.

"We were lucky enough at Pearl Harbor to be the victim of a craven sneak attack from an aggressor with the decency to attack military targets, use their own damn planes, and clearly mark those planes with their national insignia so that we knew who they were," Rumsfeld said. "Since the 21st-century breed of coward is not affording us any such luxury, we are forced to fritter away time searching hither and yon for him in the manner of a global easter-egg hunt."

Standing in opposition to Bush and Congress is a small but growing anti-war movement. During the president's speech Tuesday, two dozen demonstrators gathered outside the White House, chanting and waving placards bearing such slogans as "U.S. Out Of Somewhere" and "No Blood For Whatever These Murderous Animals Hope To Acquire."

Here is some footage of the disaster that was not released until years after the event.

I found this a bit odd.  In Arizona, you can actually make a voluntary contribution to certain causes or political parties via your tax return.  This is not a checkoff, but an amount that is added to the amount you owe in taxes and then passed on by the state to a short list of approved organizations.  As a libertarian, I find it unsettling that the state acts as a collection or sales agent for certain political causes.  In particular, how can the state make fair and reasonable choices as to who is on and not on the list of eligible recipients?

I found this data for 2009 FY giving:

What was odd for me is that of all the political giving, libertarians had the highest average donation.  I find it weird that libertarians would want to financially support the libertarian cause but they want to do it via the mechanism of the state income tax return.

The good news here is that the combined $28 thousand or so in political donations was dwarfed by every other cause.

Under what theory of government is this a proper activity of government with our tax dollars?

Gov. Jan Brewer took the stage Thursday with rocker and restaurateur Alice Cooper to persuade Arizonans that dining out is good for the state. Announcing a three-month public-awareness campaign called Dine 4 AZ, they said going to restaurants supports businesses and helps preserve jobs. Brewer noted that restaurants generate 10 percent of Arizona's tax revenues.

"We are working hard to lead the Grand Canyon State forward and out of this recession, and Dine 4 AZ fits perfectly into our plan," she said. "Please treat your family to a meal and we'll get through this together."

It is just seriously freaking frustrating to see the government spend my money promoting other people's businesses.   And since when has dining out been a sign of patriotism?  Why is buying food from a restaurant more stimulative than buying food from a supermarket? On the plus side of all this is the spectacle of politicians taking the stage with Phoenix favorite son Alice Cooper to make a policy speech.  The only thing that would be better would be for the governor to appear with Phoenix-area resident Jenna Jamison to promote the, uh, stimulative effect of spending an evening at your local strip club.

Postscript - by the way, there is almost no point in challenging the numbers in such a stupid article, but I will bet anything I own that restaurants do not generate 10 percent of Arizona's tax revenues.  Update - In fact, based on this report, restaurants were 9.4% of sales tax collections which in turn are 61% of major state taxes, which makes restaurants and bars about 5.7% of state tax revenue, which I will admit is higher than I would have guessed but still well off the number in the article.

Update #2: OK, I am probably overworking this, but the same report referenced above showed Arizona individual income taxes dropping 32.4% in 2009, presumably due to large drops in income.  However, sales taxes only dropped 13.9% in that period.  And within sales taxes, restaurant and bar sales taxes only dropped 5.8%.  I say only, because except for some stable utility and telecom categories, this is the lowest drop of any business sector subject to sales taxes.   General retail down 12.2%.  Amusements down 8.1%.  Hotel/Motel down 11.9%.  So, in response to the down economy, the state government has thrown their weight behind shifting business to... the single retail category that has been least hurt by the recession.

Bruce McQuain points out something I think has not gotten enough attention in the health care bill.  The new taxes being proposed start in 2010, but the benefits don't begin until 2013 and are phased in through something like 2018.  That means for any 10-year budget look, there are 10 years of taxes but only 6-7 years of benefits.  And even with this trick, the plan STILL adds a trillion dollars to the deficit, even before the certainly more pessimistic CBO numbers come in.

Mark Mix has an article in the WSJ on various paybacks to unions buried in the current health care bill.  The steps range from forced-unionization of certain health care professions to direct subsidies of union health care funds to exemption of union health care plans from the rules everyone else will have to follow.

Update: The Greg Conko study also looks good, but I am only part way through it.

The leftish political strategy for over 100 years has been

1. Regulate something
2. Blame the free market for inevitable disruptions caused by the regulation
3. Use the above to justify more regulation
4. Repeat

Obama's speech has a classic example of this:

So let me set the record straight. My guiding principle is, and always has been, that consumers do better when there is choice and competition. Unfortunately, in 34 states, 75% of the insurance market is controlled by five or fewer companies. In Alabama, almost 90% is controlled by just one company. Without competition, the price of insurance goes up and the quality goes down. And it makes it easier for insurance companies to treat their customers badly "“ by cherry-picking the healthiest individuals and trying to drop the sickest; by overcharging small businesses who have no leverage; and by jacking up rates.

This is ENTIRELY a situation manufactured by government and specifically state regulations.  States prevent out of state insurance companies from competing in the health insurance market.  Think you have the same Blue Cross/ Blue Shield I have (or used to have)?  Wrong.  I have Blue Cross/Blue Shield of Arizona.  You have Blue Cross/Blue Shield of whatever state you are in.  If Amazon.com had to create 50 separate state entities all with wildly different regulatory structures, you can bet they would focus on just a few states and there would therefore be a lot less competition.  Obama HAS to know this is true, so this is just a cynical argument aimed at the ignorant and uninformed.

By the way, what evidence is there that having 75% of the market in 5 companies is too concentrated?  I have been in a lot of industrial markets that were far more concentrated than that which were brutally competitive.

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.

Tonight, Obama reduced the number of "uninsured" Americans he is trying to help from 47 to 30 million.   Megan McArdle hypothesizes that he has dropped immigrants and illegal aliens from the number to avoid the political fallout from paying for these groups.

But we can also further drop the number from 30 million to 18 million, because 12 million people are in a category "reform" supporters say could afford insurance today but choose not to buy it.  Rather than being helped by the plan, these 12 million will be expected to either buy insurance they don't want or need or else face severe penalties from the feds:

Under the plan, people who earn between 100% and 300% of the poverty level (or between about $22,000 a year and $66,000 a year for a family of four) would face fees ranging from $750 to $1,500 a year.

For taxpayers with incomes above 300% of poverty, the penalty starts at $950 a year and reaches as high as $3,800 for families. Nearly 12 million people fit in this category, according to the National Institute for Health Care Management.

The idea behind the penalty is that those who can afford insurance but don't buy it are imposing costs on the entire health system. Under the proposal, nearly 12 million people who currently have no insurance could be subject to such fines, according to figures compiled by the National Institute for Health Care Management.

It is hard to argue these 12 million are being helped.  In fact, they are the milch cows helping to pay for the program, giving the lie to Obama's promise not to raise taxes on the middle class.

But of these remaining 18 million, as many as 10-14 million are eligible for Medicare, Medicaid, or SCHIP and are simply waiting until they need medical care before signing up.

Every time anyone counts it, there are about 8-10 million truly hard core poor and uninsured.  So we are going to screw up the medical care for the other 290 million of us to help these guys?   As I said before, this country is generous and if one were to point out a segment in true need, the money would likely be made available.  What concerns most people is not the libertarian fears I have of more spending and government, but the fear that helping a few folks will mean worse care for everyone else.  The analogy I have used many times is that people don't have a problem contributing to public housing for the poor (even if it turns out to suck), but they do have a problem if they are forced to leave their own home and enter the crappy public housing as well, in the name of some misplaced notion of egalitarian "fairness."

From Andrew Coulson.  Math and reading scores probably underestimate changes in learning (e.g. doesn't account for increased need to teach computer skills in this timeframe).  But discourse on education often seems to assume the blue line is flat to down.    It is interesting that among the left, this chart is proof that we need to spend more money while the exact same chart in health care (say with scores replaced by life expectancy) is proof we need to spend less money.  In fact, the health care chart would look better, because at least there the key metric of quality has increased over time.

Update: Here are the life expectancy stats, showing much more progress than education (despite being suppressed by an increasing murder rate in the period -- to really make it a metric of health care you need to pull out accidents and homicides).  So both health care and education spending go up a lot.  Education results show no improvement.  Health care results show strong improvement.  But education needs more money and health care less?  You'd almost think people's opinions on this were based more on feeding government run institutions and starving private ones, irregardless of results.

I am considering making a climate presentation in Phoenix based on my book, videos, and blogging on how catastrophic anthropogenic global warming theory tends to grossly overestimate man's negative impact on climate.

I need an honest answer - is there any interest out there in the Phoenix area in that you might attend such a presentation in North Phoenix followed by a Q&A?  Email me or leave notes in the comments.  If you are associated with a group that might like to attend such a presentation, please email me.

From Ken at Popehat, commenting on Mike Duvall of California:

But I have to ask: seriously, if you are going into politics for a steady supply of ass (of whatever gender) "” and plenty of people do "” would it kill you to just shut the fuck up about family values?

I was listening to a lecture on the politics of reconstruction when I encountered something that seemed quite quaint.   By 1877, a lot of the country was tiring of reconstruction, and was ready to move on.  Southern Democrats were taking the opportunity to re-take control of their states (through voter intimidation and outright murder) and, unfortunately, institute a race-based social system that would be enforced by government officials for almost a hundred years.

In this background, enter the contested Presidential election between Republican Hayes and Democrat Tilden.  The electoral college vote turned on three close southern races that no one to this day probably knows who really won, particularly if one factors in the voter intimidation in those states.  Never-the-less, Republicans found themselves in control of the vote counting and later the special committee to investigate and certify the election, and predictably Republican Hayes was certified the winner.

Southern Democrats were ticked off, and threatened to throw every wrench they could into seating the new government.  So, in a back room compromise, Democrats exchanged agreement on accepting Hayes as President for agreement by Republicans to pull troops out of the South and effectively allow Southern Democrats leeway to do whatever they liked with blacks in the South.

This is all grossly simplified, but what caught my attention was one side-bargain of the deal.  The Southern Democrats wanted a cabinet position under Hayes.  What did they want?  State, maybe War?  No, they wanted the Postmaster position.  The reason was that the Postmaster had by far the most patronage positions to award of any of the Cabinet positions, because it employed so many civil service positions.

Doesn't handing out a few jobs as rewards to your political supporters seem such a quaint form of political corruption today?  Now, of course, with the power to tax or regulate whole industries out of business, or to step on one group of competitors in favor of another set in a high-stakes market, this seems so benign.  I wish that were all we had to worry about today.  Instead, we have a President who can, without any enabling legislation, take two of the largest corporations in American (GM and Chrysler), cancel the debts owed to their secured creditors, and then hand control of these companies to his strongest political supporters (the UAW) -- an act of political patronage that makes a joke of selling a few postmaster positions.

Update: Don Boudreaux discusses the rise of government-controlled fire fighting in the context of political patronage.

I posted the other day that one explanation of rising health care expenditures in the US is rising wealth.  As we are wealthier than other Western nations, doesn't it make sense we would spend more on our health than other nations.

James DeLong adds:

Robert Fogel, in his NBER paper, which has more detail than his American article (and will cost you $5), looks at changes in U.S. consumption patterns from 1875 to the present. A striking number is the reduction in the costs of the basics -- food, shelter, clothing took 74% of income in 1875; 13% in 1995. This has freed up a lot of income, and one of the great gainers has been health. In 1875, it took only 1% of consumption, largely because there was little to be bought, except for patent medicines loaded with alcohol and opiates, or a saw to lop off an injured limb. By 1995, it was 9%.Leisure was another big gainer -- 17% in 1875; 68% in 1995.

So if improvements in medical technology lead people to reallocate money toward health, fine.

I was a consultant for McKinsey & Co. for about 5 years in Dallas.  This was NOT me:

Through conversations with several staffers who have endured the McKinsey interviews, we've assembled a portrait of the typical consultant. First, they're quite young! Despite the early perception that they'd look like pasty lawyers wielding big-wheeled suitcases, they're apparently a plucky, charming bunch.

"They're kind of hot," said one source.

Crisp shirts, no jackets, freshly pressed pants"”not unlike the fresh-faced boys who posed for the Harvard fashion shoot in the Styles pages of The Times this past weekend. They jot notes down on legal pads and in marble notebooks.

Though I will say, much to my kids' ever-lasting amusement, McKinsey did send me to a sort of executive charm school when I started managing teams, because I was such a hopeless geek.  Actually, my main problem was that I was adult-ADD, and couldn't sit still in a meeting.  It's fine roaming around the room in hyperactive fashion when its your own company (ala Steve Jobs) but it is not OK when you are a 25-year-old consultant to the CEO of a Fortune 50 company.

My personal style didn't work any better in any of the other companies I worked for.  Aerospace was probably the biggest mis-match.  There is just no place for a hyperactive marketing guy in a business that takes 10 years to close a sale.  So I now run my own company, and there is no one above me to complain.

Kevin Drum links to a NY Times article that, mainly through annecdote, seems to be trying to fabricate the "next" consumer crisis, over debit card overdraft fees.  The key chart, containing about all the real non-annecdotal data in the article is below:

I wrote in the comments:

Wow, the NY Times almost fooled me with this chart. Yet again they play games with scale and timeframes to make a point that is not correct. For example, it looks like overdraft fees may have risen faster than transactions, but that is because the overdraft fee revenue chart goes back to 1992 and the transaction chart only goes back to 2000.

If we look at both from 2000, we see overdraft fees on debit cards have gone from $20 billion to $38 billion today, or about a 90% increase. At the same time, dollar amount of purchases on debit cards went from $0.3 trillion to $1.3 trillion (as well as I can read the graph) or an increase of 333%. I understand that there may be a mix shift I am missing - the overdraft numbers include charges for checks as well as NSF fees, but the article does not have the changing mix. This is another topic, but why can't reporters even at the Times include all the numbers you really need to analyze this stuff - don't they try to do these calculations? They have graphs side by side, implying one should compare trends, but they have apples (debit card transaction volume) next to oranges (all overdraft charges, including debit cards but other stuff too) on completely different time scales.

Anyway, by the article's own numbers, the overdraft fee volume has grown 3.5 times slower than transactions, meaning that overdraft fees have dropped from 6.7% to 2.9% of debit card transactions. This shift may be less dramatic if there are mix changes in the fees, but never-the-less, why isn't this good news? The world is never going to make the price of carelessness=0, if for no other reason that the moral hazard would be so large. But the high price on carelessness in this case seems to be reducing the frequency of people being careless (if the price of an overdraft has really gone up as implied anecdotally in the story, then the frequency must be way down -- sure missed that data in the article). We want to raise the price of Co2 to produce less of it - why don't we applaud when we raise the price of carelessness and we get less of it?

Juan Carlos Hidalgo, via The Liberty Papers:

The Obama administration is threatening not to recognize the result of Honduras' presidential election in late November unless Manuel Zelaya returns to the presidency beforehand.

The presidential poll was already scheduled prior to Zelaya's (constitutional) removal from office last June. The candidates had already been selected by their parties through an open primary process. The current civilian interim president, Roberto Micheletti, is not running for office and plans to step down in January as stipulated by the Constitution. Both major presidential candidates supported the ouster of Zelaya. The political campaign is playing out in an orderly manner, and there's a significant chance that the candidate from the opposition National Party will win the presidency. The independent Electoral Tribunal is overseeing the process.

And yet the U.S. Department of State is signaling that it won't recognize the result of the poll in the name of defending Zelaya's return to power.

I am still really, really scratching my head over this.  I suppose such efforts of the US to ignore due process in Latin America have occured in the past to support a pro-American regime, but Zelaya is if anything anti-American and explicitly aligned with Hugo Chavez.  This simply makes no sense.   As Quincy of the Liberty Papers writes

The Obama Administration has been going out of its way to be on the wrong side of both the law and morality when it comes to Honduras. Obama has his first chance to rebuke the shameful history of the US being propping up dictators in Latin America and what does he do? He goes out of his way to prop up a would-be dictator who had neither the support of the people nor of the Honduran Constitution. He's laid sanctions on the Honduran people. He refuses to recognize the legal, constitutional government of a country.

Agreed.  Shameful.  If Zelaya gets away with this, expect to see a rash of Latin American leaders attempting to overstay their terms as president.

The WSJ is reporting that Obama's speech will propose:

Starting next year, the plan also calls for annual fees of $6 billion on health-insurance providers, $4 billion for medical-device makers, $2.3 billion on drug makers and $750 million on clinical laboratories. The fees would be levied on individual companies based on market share.

Don't you love that, by the way.  The benefits are not programmed to begin until 2013 but the taxes start in 2010.  But let's rewrite this paragraph to be less economically ignorant:

Starting next year, the plan also calls for annual fees of $6 billion on customers of health-insurance providers, $4 billion for customers of medical-device makers, $2.3 billion on customers of drug makers and $750 million on customers of clinical laboratories. The fees would be levied on individual companies based on market share, then passed on to their customers in the form of price increases, as are all such fees, particularly on low-margin industries such as health insurance.

Congratulations.  Obama has embarked on his quest to reduce the cost of health care by increasing the costs of health care suppliers by over $13 billion per year.  That should work.

For years I have been saying that the government has only one lever to reduce costs (as any thought that they might reduce costs through increased productivity is just a joke rebutted by all of history):  Force people to use less, either by raising the price, reducing the supply, or outright banning certain expenditures in certain situations.

From Joe Biden, in the debates:

"No one making less than $250,000 under Barack Obama's plan will see one single penny of their tax raised, whether it's their capital gains tax, their income tax, investment tax, any tax."

Oops:

Under the plan, people who earn between 100% and 300% of the poverty level (or between about $22,000 a year and $66,000 a year for a family of four) would face fees ranging from $750 to $1,500 a year.

For taxpayers with incomes above 300% of poverty, the penalty starts at $950 a year and reaches as high as $3,800 for families. Nearly 12 million people fit in this category, according to the National Institute for Health Care Management.

The idea behind the penalty is that those who can afford insurance but don't buy it are imposing costs on the entire health system. Under the proposal, nearly 12 million people who currently have no insurance could be subject to such fines, according to figures compiled by the National Institute for Health Care Management.

People focus too much on the penalty itself being a new tax.  But the new tax is actually the requirement that individuals buy a product (in this case a health insurance policy) that they feel has no value (or else they would purchase it of their own free will today).  The government stopped pretending long ago that these younger middle class families will get much value from such a policy.  In fact, if they did get value commensurate with the premiums they will be paying, the mandate would not be achieving its purpose.  The whole point is that healthy people pay more into the insurnace system than they get back to support sick people.  If that payment is mandatory, then it is a tax, even if it is called an "insurance mandate" instead.

In fact, this is made all the more clear when politicians also suggest that cheaper high deductible health insurance plans be banned, as they were in Massachusetts.  Again, the whole point is to get young healthy people to overpay for insurance, and allowing them to buy sensible, cheaper, high deductible insurance defeats the whole purpose.

This is a tax on middle America, and Obama knew he was going to propose it way back in the campaign.  This is not something he just thought up or was a victim of changing circumstance.  This is an out and out lie on his part.

With articles about solar prices coming down, and living in Phoenix (one of the best solar sites in America), I yet again have priced out solar for our home.  The short answer is that it makes sense, IF you don't mind reaching into the pockets of all your neighbors.

For this analysis, I will use the prices here.  The $72,167 cost for a 11.76kW system is pretty competitive at $6.13 per watt installed  (this is rated watts, not actual -- see footnote).  The panels themselves can be bought for about $3 per watt, with about $1 a watt for other equipment like inverters and $2 per watt for installation.  Do-it-yourself packages for a similar size system are here and go for around $4-$4.50 per watt.

The solar company estimates that this system in Phoenix will save me$2,779 a year on my electric bill.  I have not checked their math, but I assume they are not under-estimating this number in their marketing literature.  Taking this savings, we get a payback on the installation of about 26 years.   This ignores future electricity price increases, but also ignores the time value of money.  At 8% over 20 years, it has a net present value of  NEGATIVE $41,558.   At the end of the day, this is a terrible return -- in fact a huge value destruction.

But I began this post saying a solar investment might make sense.  How?  Well, that is where your willingness to reach into your neighbor's pocket comes in.  Our solar company estimates the following tax breaks and rebates on the system described above:

• Utility rebate:  $35,280
• State income tax credit: $1,000
• Federal income tax credit:  $21,650

So, in building this $72,167 improvement on my house, I get to use $57,930 of other peoples' money**.  As Steve Martin says in the Jerk:  "That takes the pressure off!"

Like in many other cases, other peoples' money suddenly makes solar a good investment.  Now we are looking at $2,779 a year in savings from a net investment of $14,237, or about a five year payback.    Over 20 years even assuming no inflation and an 8% cost of money that has an NPV of $12,081.

So -- I officially reverse my past conclusions that home solar does not pay.  It can in fact be a good investment -- for you.  For the country, it is a terrible investment.   Your neighbors are contributing $57,930 in subsidies while you receive just $12,081 in benefits.  The remainder, just over $45,000, is a dead-weight loss to the economy.  It is money destroyed by the government.

This is surprisingly like the ethics problem of pulling a lever to get a million dollars but someone you don't know in China dies.  The only difference is that you get $12,000 and someone you don't know loses $58,000.

** Footnote: Yeah, I know, theoretically the utility rebate is a substitute for the capital spending and not a wealth transfer.  But trust me, it's a wealth transfer.  To understand this, we have to shift from rated solar watts to actual capacity in watts.  In Phoenix, one of the best solar sites in the world, panels produce only about 25% of their rated capacity in a day (6 equivalent sun hours per day divided by 24 total hours in a day).  So, on average, a 100 watt panel is producing 25 watts.

This means that by APS paying about $3 per rated watt in rebates, they are paying about $12 per actual watt.  And there is no way this is what they are paying for other capacity.  A typical brand new power plant might be $2-$3.50 per watt.  So at $12, this is clearly a transfer mandated by the PUC, and not a smart substitute for capital expenditure.   Besides, if this payment made economic sense for the utility, there would not be an annual cap on the amount paid out.

As wealth transfers go, this is a particularly egregious one, as it tends to add costs to the electric bills of the poor and middle class so rich folks can build hobby solar systems so they can tell their friends at cocktail parties that they are "green."

Update: All of this is not to say that I am so good a person as to not take the money that is being put at my doorstep.  I'm still thinking about it.

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.

Most licensing efforts are nominally sold based on some public or consumer good but almost always end up being mostly about protecting politically connected incumbent businesses against new competitors.   Nowhere is this more obvious than in liquor licensing.

If you want to start a new liquor-based business (restaurant or bar) in Phoenix, it is going to cost you a hundred grand just for the license.

In fact, the sales price for existing licenses has dropped in recent years, with prices for a bar license in the Phoenix area slipping from $100,000 to $85,000 or $90,000, he said.

And these are the numbers with record-low demand.  Why does Arizona (or most other states) limit the number of licenses at all?  Why not just issue them to all comers, and let the market sort out who is successful and who is not?  Certainly we would likely see a lot more interesting restaurant startups if there was not an effective $100,000 tax on starting a restaurant imposed by the state.

State officials used to pretend the reason was to protect the community from being overrun by, er, dining choices or bars or whatever, but nowadays they don't even bother with such justifications and just give the true reason - they are protecting incumbents from competition.

Arizona hadn't awarded licenses since the late 1980s before the 2005 law passed. That was largely because holders of existing licenses didn't want to diminish their resale value.

Well, I am a holder of several existing Arizona licenses and I say -- open the floodgates!

Like Franken, I can freehand draw the US with all fifty states from memory.  But I start from the opposite corner, in Washington state.  But, I can also drink a beer while standing on my head, and used to (when I played rugby) race people saying I would drink one upside down in the time they drank two normally.

For the betting man, here is the lock of the week:  Obama, in his Wednesday speech, will outline a plan that does one thing but describe it as something nearly opposite.  This is a common political game, so it always is a good bet with any politician, but Obama has sharpened this approach into an art form.

The more interesting bet, which is probably more like 50/50, is whether Obama will

1. Offer only incremental changes, to make sure he gets something passed he can call health care reform, but will describe it to the radical end of his base as sweeping change, -OR-
2. Offer nearly the exact same core plan that is in the House bill that has so many folks concerned, but via changes in wording and euphemisms describe it to a worried public as something much more moderate.

I am honestly torn as to which it will be.  How are y'all betting?

I suppose we all fantasize about being a teenager again.  One reason not to be young again:  My son's high school soccer team played at 4PM the other day in Phoenix.  Game time temperature:  114F.