The Money Hole

Via John Stossel, this is hilarious form Onion TV.  I think this has been around for a while but it could have been written for the Stimulus.

Update on Climate Chart

Cross posted from Climate Skeptic

Yesterday I called into question the interpretation of this chart from the GCCI report where the report used electrical grid outages as a proxy for severe weather frequency:

electrical-outage1

I hypothesized:

This chart screams one thing at me:  Basis change.  Somehow, the basis for the data is changing in the period.  Either reporting has been increased, or definitions have changed, or there is something about the grid that makes it more sensitive to weather, or whatever  (this is a problem in tornado charts, as improving detection technologies seem to create an upward incidence trend in smaller tornadoes where one probably does not exist).   But there is NO WAY the weather is changing this fast, and readers should treat this whole report as a pile of garbage if it is written by people who uncritically accept this chart.

I had contacted John Makins of the EIA who owns this data set yesterday, but I was too late to catch him in the office.  He was nice enough to call me today.

He said that there may be an underlying upward trend out there (particularly in thunderstorms) but that most of the increase in this chart is from improvements in data gathering.  In 1997, the EIA (and Makins himself) took over the compilation of this data, which had previously been haphazard, and made a big push to get all utilities to report as required.  They made a second change and push for reporting in 2001, and again in 2007/2008.  He told me that most of this slope is due to better reporting, and not necessarily any underlying trend.   In fact, he said there still is some under-reporting by smaller utilities he wants to improve so that the graph will likely go higher in the future.

Further, it is important to understand the nature of this data.  The vast majority of weather disturbances are not reported to the EIA.  If the disturbance or outage remains local with no impact on any of the national grids, then it does not need to be reported.  Because of this definitional issue, reported incidents can also change over time due to the nature of the national grid.  For example, as usage of the national grid changes or gets closer to capacity, local disturbances might cascade to national issues where they would not have done so 20 years ago.  Or vice versa - better grid management technologies might keep problems local that would have cascaded regionally or nationally before.  Either of these would drive trends in this data that have no relation to underlying weather patterns.

At the end of the day, this disturbance data is not a good proxy for severe weather.  And I am left wondering at this whole "peer-reviewed science" thing, where errors like this pass into publication of major reports "” an error that an amateur like myself can identify with one phone call to the guy listed by this data set on the web site.  Forget peer review, this isn't even good basic editorial control  (apparently no one who compiled the report called Makins, and he was surprised today at the number of calls he was suddenly getting).

Calling BS

Over at Climate Skeptic, I am running a series on flaws in the recently released Global Climate Change Impacts Report (pdf).  I won't repeat everything over here, and the series is likely to go on for weeks - it is a target-rich environment.

But I thought the folks over here would enjoy the following, wherein I call bullsh*t on a chart that particularly enamored Kevin Drum.

UPDATE:  I obtained more information from the EIA.  My hypothesis below is correct.   Update here.

For this next post, I skip kind of deep into the report because Kevin Drum was particularly taken with the power of this chart from page 58.

electrical-outage

I know that skepticism is a lost art in journalism, so I will forgive Mr. Drum.  But in running a business, people put all kinds of BS analyses in front of me trying to get me to spend my money one way or another.  And so for those of us for whom data analysis actually has financial consequences, it is a useful skill to be able to recognize a steaming pile of BS when one sees it.  (Update: I regret the snarky comment about Kevin Drum -- though I disagree with him a lot, he is one of the few folks on either side of the political aisle who is willing to express skepticism for studies and polls even when they support his position.  Mr. Drum has posted an update to his original post after I emailed him this information).

First, does anyone here really think that we have seen a 20-fold increase in electrical grid outages over the last 15 years but no one noticed?  Really?

Second, let's just look at some of the numbers.  Is there anyone here who thinks that if we are seeing 10-20 major outages from thunderstorms and tornadoes (the yellow bar) in the last few years, we really saw ZERO by the same definition in 1992?  And 1995?  And 1996?  Seriously?  This implies there has been something like a 20-fold increase in outages from thunderstorms and tornadoes since the early 1990's.  But tornado activity, for example, has certainly not increased since the early 1990's and has probably decreased (from the NOAA, a co-author of the report):

tornadotrend

All the other bars have the same believability problem.  Take "temperature extremes."  Anyone want to bet that is mostly cold rather than mostly hot extremes?  I don't know if that is the case, but my bet is the authors would have said "hot" if the data had been driven by "hot."  And if this is proof of global warming, then why is the damage from cold and ice increasing as fast as other severe weather causes?

This chart screams one thing at me:  Basis change. Somehow, the basis for the data is changing in the period.  Either reporting has been increased or improved, or definitions have changed, or there is something about the grid that makes it more sensitive to weather, or whatever  (this is a problem in tornado charts, as improving detection technologies appear to create an upward incidence trend in smaller tornadoes where one probably does not exist).   But there is NO WAY the weather is changing this fast, and readers should treat this whole report as a pile of garbage if it is written by people who uncritically accept this chart.

Postscript: By the way, if I want to be snarky, I should just accept this chart.  Why?  Because here is the US temperature anomaly over the same time period (using the UAH satellite data as graphed by Anthony Watt, degrees C):

usa-temp

From 1998 to today, when the electrical outage chart was shooting up, the US was actually cooling slightly!

This goes back to the reason why alarmists abandoned the "global warming" term in favor of climate change.   They can play this bait and switch, showing changes in climate (which always exist) and then blaming them on CO2.  But there is no mechanism ever proposed by anyone where CO2 can change the climate directly without going through the intermediate step of warming.  If climate is changing but we are not seeing warming, then the change can't be due to CO2. But you will never see that fact in this helpful government propaganda piece.

Classic Obama Plan: Give Them Taxpayer Money, But Not Liberty

With gays upset that Obama has aligned himself squarely behind DOMA and Don't-ask-don't-tell in the military, he has decided to pay them off rather than address their equal treatment questions:

President Barack Obama, whose gay and lesbian supporters have grown frustrated with his slow movement on their priorities, is extending benefits to same-sex partners of federal employees but stopping short of a guarantee of full health insurance, a White House official said.

The health insurance exception is particularly funny given Obama's current universal-coverage-driven health care proposals.

100 Worst Stimulus Projects

This should really get your blood boiling, from Tom Coburn's office (pdf).  I am still perusing it, but two of my favorites already:

  • $1.445 million for an Oklahoma water project, where stimulus-required procurement and other rules subsequently increased the cost of the project by $1.94 million.  So the local folks lost a net of $500,000 by taking our money.  Serves the right.
  • $800,000 for a backup runway for the now famous airport to nowhere, also known as the John Murtha airport in Johnstown.  This is critical, because if they were to lose their current runway, all three flights a day and 20 daily passengers (I am not kidding) might have to find an alternative airport.  This brings the total airport subsidy to $15,411 per annual passenger.
  • A California skate park will get a $620,000 "facelift."  Plans to refurbish the skate park in Long Beach, California, had stalled for months as local funds put towards higher priority park projects. With $620,000 in federal stimulus funding available to upgrade the skate park, the city council decided to move forward. Daniel Johnson, a skater, said, "If most of us weren't skating right now, we'd be doing some bad stuff."  Because nothing says "gateway activity to adult productivity and preparation for the job market" like a skateboard park.

Demagoguing Against Doctors Using Techniques Developed Demagoguing Oil Companies

We all know the problem with oil companies:  They restrict supply to drive up prices to earn profit margins that are nearly a third of those earned by Microsoft while simultaneously keeping prices too low and promoting addiction to oil which produces a lot of CO2 and they never want to reinvest their profits in exploring for new oil so the government needs to restrict drilling in every major prospective US region so the oil companies will be stopped from greedily drilling everywhere and destroying the environment.

Barack Obama seems to be bringing this damned-if-you-do-damned-if-you-don't criticism to the medical industry, and particularly doctors.

On the one hand, he told doctors at the AMA convention yesterday that he was not a fan of tort reform and felt that limits on malpractice cases was a disservice to those who were truly injured.

On the other hand he made this case:

Not long ago, doctors' decisions were rarely questioned. Now they are being blamed for a big part of the wasteful spending in the nation's $2.5 trillion health care system. Studies have shown that as much as 30 cents of the U.S. health care dollar may be going for tests and procedures that are of little or no value to patients.

The Obama administration has cited such findings as evidence that the system is broken. Since doctors are the ones responsible for ordering tests and procedures, health care costs cannot be brought under control unless they change their decision-making habits.

On the third hand, doctors aren't spending enough to address preventable errors:

President Obama himself in his speech cited the "100,000 deaths a year" figure as if it's reliable and well established, as did yesterday's New York Times. And of course it's a figure eagerly spread by the Litigation Lobby. But as Zachary F. Meisel and Jesse M. Pines note in Slate, it's a really, really, really soft number:

...one of the biggest headlines of all was the 1999 Institute of Medicine report To Err Is Human, which announced that up to 98,000 preventable deaths occur each year in U.S. hospitals. Since then, health care improvement organizations such as Leapfrog Group have invested copious resources in reducing preventable errors. But a key issue has been overlooked in this movement: The original estimate -- the 98,000 deaths -- may have been way off. In fact, some of the researchers who conducted the original studies used in the IOM report re-evaluated their data in 2002 and reported that had they used a different calculation method, the number of estimated deaths would have been less than 10 percent of the original. Oops.

Asian is the New Black

Via Maggie's Farm, Ward Connerly discusses the elephant in the room in college admissions -- the growing fear of Asian student domination.  As a parent with kids in a top prep school on an Ivy league trajectory, I must say I see this fear and loathing of Asian students among parents every day. "They're taking all the top spots in the schools!  My kid can't compete, they are drones that work all the time!"  You have probably heard many of the same things.  I hear folks who would never be caught dead uttering anything derogatory about African Americans say the most unbelievable stuff about Asians.

Throughout history, waves of hard working immigrants have always touched off fear and racism among folks who were already here.  The one difference is that past fears were generally a working class phenomenon -- whether it be against Irish immigrants in the mid-19th century or African Americans post Civil War or against Mexicans today.   What is new today is that, for the first time I know of, a group of recent immigrants is perceived as a competitive threat by the middle and upper class.

All this leads me to a few thoughts:

  1. It is no less stereotyping to say that Asians work too hard than to say blacks are lazy or the Irish are alcoholics
  2. We should be thrilled that our country is so open, and class barriers so low, that a group of new immigrants can immediately challenge for the positions of wealth and power.  I wrote about income mobility the other day, but could there ever be a better advertisement?  Name one other great civilization in history where new immigrants could be seen as immediately and directly competitive with the wealthy and powerful.
  3. We should be ecstatic that so many bright people want to come to America and work hard creating wealth for all of us.  After all, there is no way in a free society to create wealth without delivering value.  Do we begrudge Steve Jobs his fortune when we all have iPods now?

Do Your Care About Brackets, or People?

A lot of the lefty sites are gearing up the "poor aren't sharing in the benefits" bandwagon again.  This is usually brought out of the garage whenever someone wants to put a really progressive soak-the-successful tax plan on the table.  So get ready.

The key to parsing their argument is to understand the following distinction:  Do you care about quintiles, or individuals?  Because if you care about quintiles, then there is no doubt that the real median income of the lowest income quintile has not advanced much over the last 15-20 years.  But quintiles are not individuals, and the evidence is that individuals are still doing well, whatever bracket they begin in.  Because you see, while the average for the bottom quintile may not be much higher than the average for that bracket a decade ago, the fact is that the people in that bracket have changed.   As Mark Perry writes:

A common misperception is that the top or bottom income quintiles, or the top or bottom X% by income, are static, closed, private clubs with very little turnover - once you get into a top or bottom quintile, or a certain income percent, you stay there for life, making it difficult for people to move to a different group. But reality is very different - people move up and down the income quintiles and percentage groups throughout their careers and lives. The top or bottom 1/5/10%, just like the top or bottom quintiles, are never the same people from year to year, there is constant turnover as we move up and down the quintiles.


He quotes some stats from Jeffrey Jones and Daniel Heil:

How much income mobility exists in America? Research consistently affirms that there is substantial upward income mobility in the United States, with the lowest income earners typically showing the strongest results. A Treasury Department study of the 1996"“2005 period used IRS income tax data to discern considerable mobility: more than 55% of taxpayers moved to a different income quintile. More than half the people in the lowest fifth of earners moved to a higher quintile over this period (29% to the second, 14% to the third, 10% to the fourth, and 5% to the highest).

Moreover, there is a great deal of movement in and out of the top income groups. The Treasury data show that 57% "of households in the top 1% in 2005 were not there nine years earlier." The rich sometimes get richer, but they get poorer as well. The study also reveals that income mobility has increased, not decreased, during the past twenty years. For example, 47.3% of those in the lowest income quintile in 1987 saw their incomes increase by at least 100% by 1996. That number jumped to 53.5% from 1996 to 2005.

The Pew Economic Mobility Project tried to track actual people, and not brackets, from tax returns.  This is an imperfect science, but the only real way to look at income mobility.  They found that 90% of white children and 73% of black children whose parents were in the lowest income quartile in the base period were later to be found in higher income quartiles.  But this chart, from the same study, is really telling:

6a00d834518ccc69e201157116e822970b-800wi(click to enlarge)

That is a pretty amazing picture, marred only by something apparently bad occurring with the kids of middle class African Americans.

So how can there be so much income gain everywhere without the averages for the lower quintile increasing.  I would offer at least two explanations:

  1. Immigration. As people gain skills and seniority, they progress to higher income brackets and out of the lower quintile.  However, there is a constant stream of low-skill immigrants moving to this country to fill in the bottom quintile.  It we were to do a quintile analysis apples to apples leaving out new immigrants in the period, I guarantee you would see the median income for the lower quintile increase.  As I wrote before:

    Frequent readers will know that I am a strong supporter of open immigration....However, I am tempted to become a close-the-border proponent if the left continue to use numbers skewed by immigration to justify expansions of taxation and the welfare state.  Whether they are illegal or not, whether they should be allowed to stay or not, the fact is that tens of millions of generally poor and unskilled immigrants have entered this country over the last several decades.  These folks dominate the lower quintile of wage earners in this country, and skew all of our traditional economic indicators downwards.  Median wages appear to be stagnating?  Of course the metric looks this way "” as wages have risen, 10 million new folks have been inserted at the bottom.  If you really want to know what the current median wage is on an apples to apples basis back to 1970, take the current reported median wage and count up about 10 million spots, and that should be the number "” and it will be much higher.

    By the way, even for these immigrants, their position in the lower quintile represents upward mobility for them.  Being in the middle of the lower quintile probably is a huge improvement over where they were in their home country - almost by definition, or they would not be working so hard to get here.

  2. Safety Net. Some large portion of the bottom quintile are supported by the US government's safety net.  And there are pretty good fiscal reasons why the typical real incomes generated by that safety net have not increased over the last 20 years.  And even beyond the fiscal issues, there are incentives issues as well -- at some point, increasing how lucrative the safety net is can reduce the incentive to get off the safety net and find a job.  Just ask the Swedes.  There is a delicate balance between humanity and sustaining folks vs. killing their motivation.In some ways the left's use of the lack of lower quintile progress as an indictment of American capitalism is wildly ironic.  Basically what they are saying is that the 80% of people who support themselves through capitalist endeavor are doing progressively better but the 20% of the people supported by the government are stagnating -- and therefore we need to increase the role of government.

You Can't Have It Both Ways

I cannot believe I actually have to write this, but apparently there are a number of folks in Washington and the media for which this will be a surprise.  Specifically:  A carbon tax or a cap-and-trade bill must either greatly increase prices of fossil fuels and the products of their combustion, or else they will have no impact on CO2 emissions.   Placing a high cost on emissions, and then giving everyone with a modicum of lobbying power an exemption is not going to move the meter either.  All the absurd talk of stimulation from new green jobs not-withstanding, either a climate bill imposes huge new costs or it has no real impact on emissions.  One simply cannot get to an end point of obsoleting the entire US electrical generation and transportation infrastructures for free.

As someone who thinks the threat from Co2 is greatly exaggerated, this is why I have never worried overly much about American legislative efforts.  Congress will mandate something or other that will not have much effect and will impose a lot of cost, but politicians will stop way short of the draconian legislation that would be necessary to achieve their stated carbon goals (e.g. 80% reduction).  European politicians are way more committed than ours are to Co2 reductino, and Europe hasn't really done much at all either.  A legislative body that continues passing costs to our kids in the Social Security ponzi scheme and an administration that plans already to add 10 trillion to the national debt doesn't really care about future generations.  If they are unwilling to bear current pain for future benefits in fiscal policy, they certainly aren't going to do it in the much more uncertain arena of climate policy.

Postscript: Note that the costs can show up in other ways.  For example, if one puts carbon caps in place as well as price controls, the cost would appear in the form of massive shortages, lines, and blackouts.  If one tried to address the problem via command and control solutions, the cost appears in massive capital spending requirements that cannibalize from economic growth  (which are likely to be made all the worse given that the commanders will probably not mandate the best solutions -- in fact, given variations from individual to individual, they simply cannot mandate the best solution for everyone).

OK, I Give Up. Maybe Environmentalism is a Religion

I have generally rejected comparisons of global warming activism to religion as unproductive.  But I give up.  Apparently global warming activists are digging into the Catholic playbook and stealing shamelessly.  Not satisfied with token acts of faith (e.g. sorting the recycling), indulgences (carbon offsets), and refusing to tolerate heresy, they have now adopted meat-free days of the week, switching only the day, from Friday to Monday.   I can see the Catholic bumper sticker now --  "the Catholic Church:  Fighting Global Warming Since the Year 858".

Pretty Awsome

A 128GB flash drive.

I remember my first mass storage device - a 10MB PC add-in card.  My first thought -- I will never be able to fill that up!  Last month I finished my do-it-yourself  $1000** version of a $60,000 Kaleidescape video server (article to follow on how I did it).    My system has a 6TB capacity Raid 5 drive using 8 one TB drives (if that does not add up, it is because one of the drives is configured as a hot spare).  And the freaking thing is over 70% full already.

** This is, of course, if you treat my time as worth zero, especially for the process of ripping 400+ DVDs.

Drug War: Fail

Bravo for Nicholas Kristof's editorial in the Times:

Here in the United States, four decades of drug war have had three consequences:

First, we have vastly increased the proportion of our population in prisons. The United States now incarcerates people at a rate nearly five times the world average. In part, that's because the number of people in prison for drug offenses rose roughly from 41,000 in 1980 to 500,000 today. Until the war on drugs, our incarceration rate was roughly the same as that of other countries.

Second, we have empowered criminals at home and terrorists abroad. One reason many prominent economists have favored easing drug laws is that interdiction raises prices, which increases profit margins for everyone, from the Latin drug cartels to the Taliban. Former presidents of Mexico, Brazil and Colombia this year jointly implored the United States to adopt a new approach to narcotics, based on the public health campaign against tobacco.

Third, we have squandered resources. Jeffrey Miron, a Harvard economist, found that federal, state and local governments spend $44.1 billion annually enforcing drug prohibitions. We spend seven times as much on drug interdiction, policing and imprisonment as on treatment. (Of people with drug problems in state prisons, only 14 percent get treatment.)

I've seen lives destroyed by drugs, and many neighbors in my hometown of Yamhill, Oregon, have had their lives ripped apart by crystal meth. Yet I find people like Mr. Stamper persuasive when they argue that if our aim is to reduce the influence of harmful drugs, we can do better.

The current regime not only has failed, but is absolutely absurd in its assumptions.  The argument that something like marijuana should be illegal is always "to protect the kids."  But the solution is nuts.   I will put it very personally.  It replaces a mildly bad thing (my teenager is smoking rope) with a disasterous, ruin-one's-life thing (my teenager was arrested for possession and may go to jail).  Its just crazy to say it is better to send kids to jail than have them do drugs.  Drugs I can deal with and correct in my household, or at least I can try -- jail and an arrest record I can't fix.

Drug warriors worry about "the message" we send to kids with legalization, but no one is talking about legalizing drugs for kids, any more than we do with tobacco or alcohol.  Use of those are adult decisions and we require one to be an adult to make them.

To be honest, looking at the teens I see, I can't see much difference in teen's perception of smoking tobacco vs. other drugs, despite the fact that the former is legal for adults, and so by drug warrior logic we have sent the message that it is more OK somehow.  In fact, in use statistics, it is hard to see any difference, with teens using legal-for-adults drugs like tobacco at about the same rate as they use other illegal-for-everyone drugs.

Junk Science in the Courtroom

I used to write a lot about junk science in civil cases.  I have never really liked the idea of limitations on liability awards as a solution for nutty civil rulings -- after all, how can Congress know in advance exactly what real damages will arise, and why should my ability to recover real damages be capped?

I always have felt that such solutions were beside the point, that what tort law needed was:

  • Better immunization against junk science
  • A rollback of the flawed notion that deep pockets are automatically liable, regardless of their actions, combined with some acknowledgment of individual responsibility
  • Protection of dependents from nuisance suits and mass torts, both of which derive their power from the cost of defense rather than the facts of the case, forcing the innocent to settle just to avoid these defense costs.

I always had naively thought that the junk science issues were mainly limited to civil courts, and that criminal courts, with their much stronger protections against false convictions, did not really have these problems.

The more I read Radley Balko, though, the more depressed I get about innocent people sitting in jail as the result of really flawed evidence.  The most recent example:

Last weekend, we looked at the case of Bill Dillon, the Brevard County resident imprisoned for 27 years before DNA tests set him free...

At least two other men suffered the same fate "” and another shared link: a dog.

Not just any dog. A wonder dog helped convict all three men: a German shepherd named Harass II, who wowed juries with his amazing ability to place suspects at the scenes of crimes.

Harass could supposedly do things no other dog could: tracking scents months later and even across water, according to his handler, John Preston.

Why is This Called "Green" Rather than "Theft"

From Greenlaunches.com (via Engadget) comes a technology that I have written about before to leech energy from cars to power buildings:

shoppers_car

Now when you shop, your can be responsible to power the supermarket tills. As in with the weight of your vehicles that run over the road plates the counter tills can be given power. How? Well, at the Sainsbury's store in Gloucester, kinetic plates which were embedded in the road are pushed down every time a vehicle passes over them. Due to this a pumping action is initiated through a series of hydraulic pipes that drive a generator. These plates can make up to 30kw of green energy in one hour which is enough to power the store's checkouts.

The phrase "there is no such thing as a free lunch" applies quite well in physics.  If the system is extracting energy from the movement of the plates, then something has to be putting at least as much energy into moving the plates.  That source of energy is obviously the car, and it does not come free.  The car must expend extra energy to roll over the plates, and this energy has to be at least as great (and due to losses, greater) than the energy the building is extracting from the plates.  Either the car has to expend energy to roll up onto an elevated plate to push it down, or else if the plates begin flush, then it has to expend energy to pull itself out of the small depression where it has pushed down the plate.

Yes, the are small, almost unmeasurable amounts of energy for the car, but that does not change the fact that this system produces energy by stealing or leeching it from cars.  It reminds me of the scheme in the movie "Office Space" when they were going to steal money by rounding all transactions down to the nearest cent and taking the fractional penny for themselves.  In millions of transactions, you steal a lot but no one transaction really notices.

I have seen this idea so many times now portrayed totally uncritically that I am almost beginning to doubt my sanity.  Either a) the media and particular green advocates have no real understanding of science or b) I am missing something.  In the latter case, commenters are free to correct me.

By the way, if I am right, then this technology is a net loss on the things environmentalists seem to care about.  For example, car engines are small and much less efficient at converting combustion to usable energy than a large power station.  This fact, plus the energy losses in the system, guarantee that installation of this technology increases rather than decreases CO2 production.

Postscript: One of the commenters on my last post on this topic included a link to this glowing article about a "green family" that got rid of their refrigerator:

About a year ago, though, she decided to "go big" in her effort to be more environmentally responsible, she said. After mulling the idea over for several weeks, she and her husband, Scott Young, did something many would find unthinkable: they unplugged their refrigerator. For good.

How did they do it?  Here was one of their approaches:

Ms. Muston now uses a small freezer in the basement in tandem with a cooler upstairs; the cooler is kept cold by two-liter soda bottles full of frozen water, which are rotated to the freezer when they melt. (The fridge, meanwhile, sits empty in the kitchen.)

LOL.  We are going to save energy from not having a refrigerator by increasing the load on our freezer.  Good plan.  Here is how another woman achieved the same end:

Ms. Barnes decided to use a cooler, which she refilled daily during the summer with ice that she brought home from an ice machine at her office.

Now that's going green!  Don't using electricity at home to cool your groceries, steal it from work!

Update: The one place one might get net energy recovery is in a location where cars have to be breaking anyway, say at a stop sign or on a downhill ramp of a garage.  The plates would be extracting speed/energy from the car, but the car is already shedding this energy via heat from its brakes.  Of course, this is no longer true as we get more hybrids with dynamic breaking, since the cars themselves are recovering some of the braking energy.  Also, I have never seen mention in any glowing article about this technology that placement is critical to having the technology make any sense, so my guess is that they are not being very careful.

A Couple of Quick Thoughts on Tobacco Regulation

1.  I have observed before that many Nanny-state initiatives are driven by politician's own personal experience and weaknesses.  Mike Huckabee started a kids obesity program because he had trouble with his weight, and now Barack Obama regulates tobacco because he has had trouble quitting smoking:

Obama, who has spoken of his own struggle to quit smoking, praised the bill, saying it "will make history by giving the scientists and medical experts at the FDA the power to take sensible steps."

Couldn't politicians just focus on their own behavior without projecting their personal weaknesses on me?  Let's just be glad that we avoided whatever regulatory regime that would have occurred had these guys had a male enhancement issue.

2.  I know zero about smoking and cigarettes.  However, it is my understanding that while the nicotine is the addictive part, it is other components of combustion that cause the health risk.  If this is the case, then doesn't regulated reduction in nicotine content of cigarettes actually pose a health risk?  Won't folks suck on more cigarettes with reduced nicotine, trying to get back to their preferred nicotine dose, and thereby consume more rather than less cancer causing substances?

3.  There is nothing that regulators hate more than free market alternatives to themselves for solving problems.  It is clear they are going to mandate reduced tar and other components in cigarettes, but they want those mandates to come from them, not emerge on their own from the market.  Thus:

[the new FDA rules will] prohibit use of words such as "mild" or "light" that give the impression that the brand is safer

Yep -- wouldn't want private folks getting credit for exactly what the regulators intend to mandate.

4.  I have often observed that regulation tends to favor incumbent companies.   Regulations tend to raise barriers to new entrants, and it imposes costs that are more easily born by larger players in the market.  Further, incumbents often have the political muscle to influence regulation in their favor  (and in fact potential future new market entrants don't even exist today, so they certainly have no lobbying voice).  And, we see this same effect here:

Altria Group, parent company of Philip Morris USA, the nation's largest tobacco company, issued a statement Thursday supporting the legislation and saying it approved "tough but reasonable federal regulation of tobacco products" by the FDA. Rival companies have voiced opposition, saying FDA limits on new tobacco products could lock in market shares for Philip Morris, maker of Marlboro cigarettes.

No surprise there.  Despite all the fighting words about the evils of big Tobacco around the Tobacco settlement a decade or so ago, the result was big gains for the major tobacco companies.

Big tobacco was supposed to come under harsh punishment for decades of deception when it acceded to a tort settlement seven years ago. Philip Morris, R.J.Reynolds, Lorillard and Brown & Williamson agreed to pay 46 states $206 billion over 25 years. This was their punishment for burying evidence of cigarettes' health risks.

But the much-maligned tobacco giants have subtly and shrewdly turned their penance into a windfall. Using that tort settlement, the big brands have hampered tiny cut-rate rivals and raised prices with near impunity. Since the case was settled, the big four have nearly doubled wholesale cigarette prices from a national average of $1.25 a pack (not counting excise taxes) in 1998 to $2.10 now. And they have a potent partner in this scheme: state governments, which have become addicted to tort-settlement payments, now running at $6 billion a year. A key feature of the Big Tobacco-and-state-government cartel: rules that levy tort-settlement costs on upstart cigarette companies, companies that were not even in existence when the tort was being committed.

The Zero Effect

Ties occur at the end of regulation in NBA basketball games way more frequently than one might expect from a normal distribution of scores.    The distribution of point differential at the end of regulation looks really weird:

histograminbantime

Why this is, and the role of strategy, is here (via the sports economist).

Handbag Patterns

My wife has more of her patterns she has designed for knitted handbags for sale, here or at her own site here.

More Indentured Servitude in San Francisco

Via the Thin Green Line:

Throwing orange peels, coffee grounds and grease-stained pizza boxes in the trash will be against the law in San Francisco, and could even lead to a fine.

The Board of Supervisors voted 9-2 Tuesday to approve Mayor Gavin Newsom's proposal for the most comprehensive mandatory composting and recycling law in the country. It's an aggressive push to cut greenhouse gas emissions and have the city sending nothing to landfills or incinerators by 2020.

"San Francisco has the best recycling and composting programs in the nation," Newsom said, praising the board's vote on a plan that some residents had decried as heavy-handed and impractical. "We can build on our success."

The ordinance is expected to take effect this fall.

The legislation calls for every residence and business in the city to have three separate color-coded bins for waste: blue for recycling, green for compost and black for trash.

Failing to properly sort your refuse could result in a fine after several warnings, but Newsom and other officials say fines will only be levied in the most egregious cases.

I think if I lived there I would save some really rank crap buried in the back yard, maybe a few animal carcasses, to throw in the trash when the inspector came by to dumpster dive.

But the whole concept confuses me.  There is this assumption that everything environmentalists always wanted us to do, like recycling, is automatically and without need for critical thought going to reduce CO2 emissions.  But will it?

Doesn't composting increase greenhouse gas emissions vs. land filling? I have always wondered about this with Christmas tree recycling programs. If the program was really about reducing greenhouse gasses, why are we chipping the trees and spreading the chips around so they can decompose faster?  Decomposition is basically just slow combustion, producing CO2 and some methane.  Shouldn't we instead be shrink-wrapping the trees and burying them deep in the name of carbon sequestration?

By the way, advocates will say that recycling saves money.  Well, it is not clear that it even saves the state any money but it certainly does not save you and I any.  In fact, the only way people can even fool themselves into believing there is any economic benefit is to assume that the value of your and my time is $0.  We are indentured servants, working for the state as trash sorters for no compensation.

Postscript: Assume there are 110 million households in the US, and each household has to spend 5 minutes a week sorting trash.  And assume that the value of folk's time is $20 per hour (and I can guarantee you the marginal value of my free time is a LOT higher).  This is $9.5 billion of stolen labor each year.

Another Example of Hosing Creditors in Bankruptcy?

I am not at all a bankruptcy expert, but I have watched the Administration's efforts to evade bankruptcy law in favor of the UAW and at the expense of secured creditors with great interest.

I am wondering now whether something similar might be going on in the Phoenix Coyote's hockey team bankruptcy.  The Coyotes are in bankruptcy, and the former owner (there is actually an interesting question as to whether he still is the owner) has solicited an offer of $212.5 million for the team from Jim Balsillie, contingent on Jim moving the team to Canada.   This amount would pay off some but not all the creditors and would not leave the stadium authority whole on their lease (though I have limited sympathy there, as I begged and pleaded for our local governments not to subsidize hockey in Arizona).

Now, the league is demanding an extra $100+ million to be paid to the other team owners by Balsillie as a relocation fee for the team as an adjunct to the sale.  There is some sense that this is a poison pill to kill the deal, because the league is mad that a) this sale is happening without its involvement and b) they sense the team has not done enough to keep the team in Arizona.

Nevertheless, if Balsillie were to agree to pay the extra $100 million, isn't this a total ripoff of creditors?  In effect, he will be paying $312.5 for the team, but structuring the transaction so NHL team owners, rather than Coyote's creditors, get $100 million of the transaction.  Am I missing something?

Disclosure:  Jim Balsillie and I were section-mates at HBS.

Don't We Already Know the Answer to this Question

Greg Mankiw writes about a Paul Krugman article on "the public option," a plan in Congress to provide a federal health insurance plan to compete with private plans and "keep them honest"**

It seems to me that [Krugman] leaves out the answer to the key question: Would the public plan have access to taxpayer funds unavailable to private plans?

If the answer is yes, then the public plan would not offer honest competition to private plans. The taxpayer subsidies would tilt the playing field in favor of the public plan. In this case, the whole idea of a public option seems to be a disingenuous route toward a single-payer system, which many on the left favor but recognize is a political nonstarter.

If the answer is no, then the public plan would need to stand on its own financially and, in essence, would be a private nonprofit plan. But then what's the point? If advocates of a public plan want to start a nonprofit company offering health insurance on better terms than existing insurance companies, nothing is stopping them from doing so right now. There is free entry into the market for health insurance. If a public plan without taxpayer support would succeed, so would a nonprofit insurance company. The fundamental viability of the enterprise does not depend on whether the employees are called "nonprofit administrators" or "civil servants."  (via Q&O)

But I think we already know the answer to this question.   If Obama and the Democratic Congress is willing to pour a hundred billion dollars or more down the Chrysler and GM rat holes, they certainly are going to pony up far more to support a program so near and dear to their heart for so many years.

There is simply not some magic, easy to access pool of savings in health care available to government managers that will reduce costs 30% or pay for increases in benefits.  If there were, Medicare should have already captured them.

** This is always hilarious to see, as if health insurers make some kind of inordinate profits.  As shown before, the typical after-tax profit at health care companies and insurers is something like 3-4% of revenues.

Sorry Chevy

We own about 100 trucks as part of the business, many of them Chevy's.  We are going out right now to replace several, and I just can't bring myself to do business with Government Motors.  So its Ford trucks for now.

The Glad Corporation = Satan

I am totally pissed off at the Glad Corporation this evening.  For over a year, I have been advocating the Amazon Kindle book reader (I now have a Kindle 2)  in part because it actually is superior to regular books for reading in the bath tub.  Just zip the Kindle into a clear Ziploc bag, and it is waterproof and quite easy to read.  And it is easy to turn the pages, unlike trying to put a regular book in a bag.

That is, until today.  For some reason, I misplaced my usual Ziploc bag.  So I ran to the kitchen for a replacement, and found to my horror the new bag design is no longer clear.  There is some kind of pattern in the plastic that is still sort of transparent but is far less satisfactory for book reading.  I wonder if anyone is selling black market old-Ziploc bags on eBay?

The never-ending need of American corporations to tinker with designs usually helps make for a better world, but it has a dark side too.  First the Edsel, and now less-than-transparent Ziplocs.

Postscript: We also used to use Ziplocs for cheap underwater photography.  It actually works OK, if you pull the bag tight across the lens.

Update #1: The freezer bags are thicker -- I am hoping that they are still clear.  I will run to the store tomorrow to buy a box and let you know.

Great Point, Often Overlooked

Bill Whittle makes a great point in this video which is at the heart of the problems with this administration:  While Obama and his young policy wonks may be smarter (or at least think they are smarter) than other folks individually, they cannot possibly be smarter than the sum of 300 million well educated, realtively affluent Americans making decisions for themselves.  Every technocrat founders on these rocks, when they substitute their decision as command and control planners for individual decision making (example).   Everyone talks about a revival of interest in Ayn Rand, and that is great, but it is Hayek who has never been more relevent.

More on the failures of technocrats here.

Nothing To See Here, Move Along

Kevin Drum, echoing Paul Krugman, looks at rising interest rates on Treasuries and decides that there is nothing to see here, move along.   You will all be relieved to know that these rising interest rates have nothing to do with a couple of trillion dollars in new government borrowing, and the effect that this borrowing (and wild money printing) might have on

  • Inflation
  • Sovereign risk
  • Supply and demand for credit

Boy, do I feel better.

PS - And remember, if interest rates do start exceeding historical norms, Krugman will discover that it is Bush's fault.

Another Michael Moore Howler

I was listening to NPR in a cab a week ago Sunday and heard an interview with Michael Moore on the [then] impending bankruptcy of GM.  It is perfectly logical to interview Moore on such a topic, as he has been a long-time critic of GM's management, and I was curious to see what he would say.

In the interview, Moore was asked why GM failed.  I wish I had a transcript to ge the exact words, but in effect he said that 1) GM failed because it did not pay its workers enough and 2) GM failed because the US has not promoted enough mass transit.

Huh?  This is certainly a unique perspective, that GM with some of the highest manufacturing labor costs in the world, failed because its labor costs were not high enough.  His "logic" seems to have been that by not paying its workers enough, GM caused real middle class income to stagnate for decades which therefore reduced demand for its cars.   And don't even get me started on the proposition that GM was worse off because the government did not subsidize competitive transit modes enough.   I guess it does not really surprise me that Moore, who wants the US medical care system to emulate Cuba, would be so illogical.  But how does a seasoned journalist just let this stuff pass in an interview?  Incredible.