Coyote Blog

When purchasing some Amtrak tickets earlier today, I encountered a link to an organization selling carbon offsets.  Does anyone else think, after looking at this organization's logo, that they have decided to hitch their wagon to Obama's coattails?  I guess there is an "O" in their name, but groups seldom adopt the fifth letter of a ten-letter word as their initial.

Don't miss some of my past criticisms of double and triple counting in the offset world here and here and here and here.

When Phoenix was building its light rail system, I made the following two-part bet:

1. I could take all the money spent on construction and easily buy a Prius for every single daily rider, with money to spare
2. I could take the operating deficits for light rail and buy everyone gas to run their Prius 10,000 miles per year and still have money left over.

This bet has been tested in a number of cities, including LA and Albuquerque, and I have not lost yet.  Now the numbers are in for Phoenix initial ridership, and I am winning the first half of my bet in a landslide.

The other day, Phoenix trumpeted that its daily ridership had reached 37,000 boardings per weekday.  Since most of those people have two boardings per day (one each direction) we can think of this as 18,500 people making a round trip each day.

Well, if we bought each of these folks a brand new Prius III for $23,000 it would cost us just over $425 million.  This is WAY less than the $1.4 billion we pay to move them by rail instead.   We could have bought every regular rider a Prius and still have a billion dollars left over!  And, having a Prius, they would be able to commute and get good gas mileage anywhere they wanted to go in Phoenix, rather than just a maximum of 20 miles on just one line.  Sure, I suppose one could argue that light rail is still relatively new and will grow, but even if ridership triples, I still win the fist half of my bet.  And as the system expands, my bet just looks better, as every single expansion proposal has been at a cost of $100 million a mile or more, more expensive than the first 20 miles.

So now, all we have to do is wait to see the operating results to settle the second half of my bet.  If common practice is followed from other metro areas, this will be extremely difficult to prove because the authority will do everything it can to hide the huge operating dollar hole light rail is creating.

But Coyote, what about congestion?

I am glad you asked.  Folks will argue that rail reduces congestion.  Normally, I would agree but argue that it reduces congestion at way too high of a price.  But for Phoenix light rail, it may even be that rail makes congestion worse.

Here is why:  In building Phoenix light rail, the city along most of the line had to remove two lanes of traffic (one each way) to build the line.  So here is the comparison:

• Light rail carries 37,000 trips per day or about 2,000 per hour  (1,000 each way) through its 18-hour operating day, though certainly there are peaks and valleys around this average
• A typical lane of road has a capacity of 2000 cars per hour, so light rail removed 4,000 cars per hour of road capacity (2,000 each way).  Its unclear how many riders this equates to, but the average car in the city has 1.5 passengers, so we will call this a road capacity of 6,000 trips per hour (3,000 each way).

So, we have replaced roads that can carry 6,000 trips per hour with train tracks carrying 2,000 trips per hour.  Sure, the train carries more than 2,000 in some peak periods, but probably not more than the road it replaced was capable of carrying.  Further, I can attest from personal experience that the complexity of trains on the road and passing through intersections screws up the timing of lights and results in lost capacity on the roads in the area that remain.

A Thought on Sports Team Subsidies

I would love to see the ridership of the light rail on days with and without a baseball game or basketball game downtown.  My sense is that a significant portion of the ridership is from game attendees (its the only time I have found it useful to ride the train).  If this is the case, then this massive overspending for light rail represents yet another subsidy for professional sports teams.

By the way, I just realized that I am underestimating the financial cost to the city of the train.  Most sports fans ride it not as a transit substitute per se but as a parking substitute -- the train allows one to park cheaply away from downtown and ride the the game without traffic hassles.  I wonder how much the lost $15 a pop parking in city lots by the stadium due to the train is costing the city?

Light Rail Hurts the Working Poor

I think it is always important to reiterate why light rail is such a threat to the working poor who depend on transit.  As I wrote the other day:

"¦light rail is simply not transit for the working poor. It is transit for yuppies that happens to be used by some working poor.  They are built for white collar workers commuting to town who are too high and mighty to be caught dead in a "grubby" bus.  But since light rail is orders of magnitude more expensive than buses, two things happen in every city that ever builds light rail.

1) Light rail fares skyrocket to cover their immense operating deficits and capital costs, giving the lie to politicians that sold these systems as helping working poor.

2) Bus service, the form of transit that serves most of the working poor even today in the Bay Area, is cut back to help pay for rail.

Light rail is the worst enemy of providing transit services to the working poor ever devised in this country.

I am terrified that Obama will feel the need to bail out California.  I can't possibly think of  a worse use of my money, nor a worse precedent for the future.   Does anyone think that, in retrospect, Bill Simon's refusing to bail out New York City was the wrong decision.  NYC is not what I could call financially responsible, but they are paragons of virtue compared to what they were in the 1970's, and would have been had they not been forced to take ownership of their budget problems.

Postscript: My prediciton if Obama intervenes:  bondholders will get 10 cents on the dollar, and the SEIU will be given 55% ownership of California.

I found this a fairly typical example of the thinking by the modern victim class.

Stimulus dollars for new fare boxes strikes me as very close to the extreme in Keynes's insight that stimulus from the gov't can be needed and serve well, when he said something like that a "stimulus" could be burying bottles of dollars under a field and people digging them up - his point being that ANY stimulus would help. 50+ yrs later, surely the thought that "yeah, but, a smarter-placed stimulus would have more effect." Stimulate the company (and its employees) that make fare boxes, or allow SF residents to not be yet further pressed for money? I think the latter is smarter, and am stunned that the former seems to be going to happen.

I beg you to write and publish something on this. Raising fares at Muni also has a ripple effect on local business -- I won't ride the bus on the wkend out into the neighborhoods and maybe use my little splurge money to buy something there. In addition to that, for MTA, I will be overall paying less to them (while feeling a lot more confined, riding a lot less). The fare increase will get less money from me, while imposing more hardship on me, and I will be putting less money into local business.

Thank you for noticing and writing of we "the working poor." We're increasing in number. I'm well-educated and under-employed, and right now just trying to get by each month. I am desperately trying to avoid having to move out of SF.

So here is the situation:

• He is well-educated, presumably with portable skills, but insists on staying in San Francisco where he cannot find full employment.  My sense is he has not tried to find a job anywhere else in the country
• He considers himself to be poor, but refuses to entertain the idea of living in the most expensive city in the country (save possibly Manhattan)
• He wants the rest of us via stimulus money to to subsidize his rail transport to help him better live in a city that has no work for his skills and which is too expensive for him to afford

I am OK with helping out folks who have tried everything they can to make ends meet and still need help to survive.  But should I really be thrilled to rush to the aid of someone who refuses to take even the first and most obvious step to address their poverty?

I have moved 9 times in my life trying to make things work for me and my family. I loved Boulder CO the best, and would love to live there, but there is no work for me that fits my skills. I guess I could have stayed and lived their in a financial situation that is less than I desire, but if I did so, it would be hard for me to imagine that I would lash out at the rest of the world for not subsidizing my choice.

Postscript: These guys are on drugs thinking light rail is the answer for the working poor.  As I wrote in the comments:

...light rail is simply not transit for the working poor. It is transit for yuppies that happens to be used by some working poor.  They are built for white collar workers commuting to town who are too high and mighty to be caught dead in a "grubby" bus.  But since light rail is orders of magnitude more expensive than buses, two things happen in every city that ever builds light rail.

1) Light rail fares skyrocket to cover their immense operating deficits and capital costs, giving the lie to politicians that sold these systems as helping working poor.

2) Bus service, the form of transit that serves most of the working poor even today in the Bay Area, is cut back to help pay for rail.

Light rail is the worst enemy of providing transit services to the working poor ever devised in this country.

One of the seldom discussed problems with government regulation is that typical regulation is aimed at the "mean"  -- the mean worker, the mean industry participant, the mean driver, whatever.  The problem is that there are 300 million of us with vastly different lives and different preferences.  One-size-fits-all regulations are often a poor fit for many of those regulated.

Take the Fair Labor Standards Act (which includes minimum wages, maximum work weeks, record-keeping requirements, etc).  The Fair Labor Standards Act is written for factory workers who come in the door at 9AM, punch a time clock, work under the direct supervision of management, and punch out at 5PM.

Many of my workers are running isolated campgrounds.  They work out of their home (their RV).  While they have scheduled tasks, like cleaning the bathrooms, many of their hours come in spurts (e.g. someone comes to their RV and asks them a question).  The nearest manager from the company might be hundreds of miles away, and there may not even be electricity to power a timeclock.  All of this adds up to a hugely awkward compliance problem for many of the details of the FLSA.  But comply we must.

Yesterday's new proposed CAFE regulations on car fuel economy is another example.   It appears that the average MPG requirement for new cars will increase from 27.5 today to 42MPG in 2016.  The obvious question is -- of all the actions we could take to reduce CO2 emissions, is this the least costly and/or most efficient?

Well, nobody knows, and I don't think that anyone in the "science-based" Obama administration has even tried to put pen to paper on this question.  And, even if they did, their answer would be largely irrelevant because they would likely, again, be regulating to the mean.

I am sure the folks passing this kind of stuff picture a mean commuter driving 25-30 miles each day each way to work.  But what about me?  I drive 2 (actually 1.9, but we will round up).  That makes a 4 mile daily roundtrip commute.  Assuming I drive a car at the CAFE standard, this new regulation will save me 0.05 gallons of gas per day, or ten cents per day at $2.00 gas prices.

Obviously, it makes zero economic sense for me to be regulated in this way.  The fuel economy of my car for my daily commute is virtually irrelevant, because I chose to locate my house and my business within a few miles of each other.  It is a terrible investment for me to pay, both in higher costs and lost features, for a car with higher MPG.  Though my decision-making was not driven by gas consumption (it was driven by my time, which is way more valuable to me than a gallon of gas**) one could argue that I have already made a huge gas-use-reduction investment in terms of the location of my home, and thus a further investment in gas-use-reduction via my car is not necessary.

On Hidden Taxes

We can tease one other lesson from this regulation.  In regulating CO2 in transportation, the Obama administration had another choice -- a carbon tax.   A carbon tax on fuel would easily cause CO2 emissions to be reduced over time from cars  (in fact, it probably would do a better job, as history has shown that higher MPG standards actually lead to increased driving and thus have equivocal impacts on CO2 emissions).

Further, a carbon tax would have the advantage of putting 300 million people to work figuring out the most productive ways to reduce emissions.  Those who drive most, or have the greatest ability to cut back on driving and shift transportation modes, are going to be the ones to preferentially reduce emissions.

So why not a carbon tax?  Well, the politicians have all explained this pretty directly -- because they do not want to pay the political cost of raising taxes, particularly on something like gas whose price gets so much media attention.  Having demagogued oil companies as evil for so many years for raising gas prices, politicians were not able to bear the irony of themselves being responsible for higher gas prices.

So instead, they will force cars to be built more fuel efficiently, which will almost certainly raise the price of cars (as well as reduce choice and certain features).  These higher costs and reductions in choice are most certainly a tax on consumers, but they are an indirect tax.  They show up as rising prices and perhaps falling attractiveness of auto makers' product lines, which consumers will blame on auto makers, not the Congress or Obama.

So Obama will continue to say he has never raised taxes on the middle class, when in fact he has just made their cars $1500 more expensive.  Some day, we may live in a world where politicians are called to task for this kind of bait and switch, but my guess is that Obama gets away with it.

** Postscript: The one constant of all leftish regulation is that it puts about zero value on my personal time.  Every regulation seems to be about my spending more of my time in exchange for conserving some other supposedly scarce resource.  But I have never panicked that we are going to run out of oil or tungsten or iridium or whatever.  But I do know that I am going to run out of time, just like everyone else.   It is the only commodity I am positive is zero sum.

In 1933 and 1934, America was on a trajectory to recover from the Depression.  But, before recovering, the economy was to nose dive again, and never really did recover until the next decade.  Historians and economists argue endlessly about this, but I am convinced that the arbitrary and capricious meddling in the economy by the Roosevelt administration caused many folks who would have started investing and bargain hunting with their capital to sit on the sidelines.  The National Industrial Recovery Act (thankfully killed by a mercifully non-packed Supreme Court) was just the most egregious example of the US government making it impossible to evaluate long-term business proposals because the basic foundations of the rule of law were shifting so much.

I fear we are facing a similar danger.   Everything continues to tell me that had we taken our medicine late last year, we would be entering a recovery over the next few months.  However, the Obama administrations economic interventions have gotten so egregious that there is a real danger investors are going to sit on the sidelines with their capital.  Who knows when your industry will get targeted with compensation restrictions, or higher taxes, or even forced changes in ownership?  Who could possibly feel comfortable making 20-year investments in this environment?  Dale Franks quotes Thomas Cooley:

Many investors are sitting on the sidelines, as is much money. Why? Because it is impossible to know what the rules of the game are. And that's because the administration and the Congress keep changing the rules in capricious ways in pursuit of larger political objectives.

Postscript: There is legislation pending in Congress to restrict the ability of lenders  (e.g. credit card issuers) from changing rates on existing debt.  They ask if it is fair for someone who took on a debt thinking it would be at 15% to suddenly find it is at 25%.  But how are tax increases any different.  I make 10-20 year investments in my company, and the expected tax rate is a hugely important assumption in whether it makes any sense for me to put my capital in a particular venture.   How is a large increase in taxes on returns from my past investments any different than changing the interest rate on an existing debt?

Via Overlawyered:

Sponsored by Congress' most senior member, Rep. John Dingell (D-Mich.), HR 759 amends the Federal Food, Drug and Cosmetic Act to include provisions governing food safety. The bill provides for an accreditation system for food facilities, and would require written food safety plans and hazard analyses for any facilities that manufacture, process, pack, transport or hold food in the United States.

It also calls for country of origin labeling and science-based minimum standards for harvesting fruits and vegetables, as well as establishing a risk-based inspection schedule for food facilities. "¦

The [Cornucopia] institute claims the preventative measures [on handling of food on farms] are designed with large-scale producers and processors in mind and "would likely put smaller and organic producers at an economic and competitive disadvantage."

You hear this all the time from proponents of certain regulations -- "even _____ corporation supports it."  GE supports global warming regulation.  Large health care companies support heath care regulation.  The list goes on forever.  That is because regulation always aids the large established companies over smaller companies and future upstart competitors.  Larger companies have the scale to spread compliance investments over larger sales volumes, and the political muscle to lobby Congress to tilt regulation in their favor (e.g. current cap-and-trade lobbying in Congress).  Regulation creates a barrier to entry for potential new competitors as well.

I hate to admit it, but regulation in my own business (which I neither sought nor supported) has killed off many of my smaller competitors and vastly improved our company's competitive position.  It is no accident that the list of the largest companies in heavily-regulated Europe nearly never change, decade after decade, whereas the American list has always seen substantial turnover.

I haven't written that much lately about tort law, but it certainly has not gotten better.  Here is an example set of facts:

19-year-old Sidney Odom happily went along when 20-year-old Travis Kirby and 18-year-old Riley Strickland asked "Who wants to go to the Beacon?""”a bar in Terry, Mississippi. A long night of drinking and driving came to an end at about 3 am when Kirby's Camaro hit a tree at about 90 mph. As none of the three were wearing seatbelts, all were ejected from the vehicle. Kirby, whose blood-alcohol level was three times the legal limit at 0.25%, died at the scene; the other two were injured.

Think for a moment about who you reasonably believe to be at fault for the accident.  Now, here is who actually was forced to accept liability:

• The dealer who sold them the car
• The shop that installed their tires
• Goodyear tire company

All you can say is, huh?  When looking at modern tort outcomes, a much better predictor of legally assigned liability than trying to decide who was trully at fault is to look at the net worth of everyone who had any relation to the victims, and assuming those with the highest net worth will end up being heald "liable."

Via Jacob Sullum:

Today President Obama appointed Thomas Frieden, New York City's crusading health commissioner, as head of the Centers for Disease Control and Prevention. Frieden, an infectious disease specialist who is known mainly as an enthusiastic advocate of New York's strict smoking ban, heavy cigarette taxes, trans fat ban, and mandatory calorie counts on restaurant menu boards, embodies the CDC's shift from illnesses caused by microbes to illnesses caused by lifestyle choices.

Explanation of the health care Trojan Horse here.  More articles here.

I had a question the other day:  Why is closing dealerships a cost savings for Chrysler?  My understanding is that dealers were independently-owned businesses that bought inventory from the manufacturer, and then sold and serviced the cars.

I came up with only two answers:

1. Auto makers finance dealer inventory in some way (either as financing or putting the inventory on consignment) such that cutting back on dealers cuts back on financing needs.  Yes, with fewer dealers, the others are likely to need more inventory, but basic inventory theory says the total in the system will still be less with fewer outlets.  Also, they might preferentially cut weaker dealers more likely to need financing in favor of larger dealers who can self-finance
2. Having too many dealers competing against each other with the same product undermines pricing in the market.  Dealers cut pricing to the bone in order to get the servicing income stream after the sale.  While this should not directly affect the pricing to the manufacturer, it might be argued that retail discounting is a negative for the brand over time  (electronics manufacturers have debated this point for years, and there is certainly no consensus on this).

Megan McArdle provides her own answers to this question, some similar and some different:

A number of readers have asked a simple, obvious question:  why do the dealers cost Chrysler so much money that they want to shut them down?  I don't have a complete answer to it, but here's what I understand:

• Inventory:  Chrysler often has to take back unsold inventory.  A lot of dealers selling a little inventory is costly, because you have to ship a minimum number of cars to each dealer
• Financing:  Chrysler helps many dealers float their purchases (though to be fair, those dealers also tap their own credit for things like advertising, expanding the company's effective spending)
• Brand costs:  Shabby, run-down dealerships don't improve the image of the firm, and if they are the only game in town, drive users to other cars.

She follows with a good analysis of why independent dealers exist in the first place.

It will be interesting to see how this goes down.  Frequent readers will know that I often have said that the power base of many small-medium size towns is made up of 1) the auto dealers, 2) the beverage wholesalers and 3) the owners of the local TV stations and newspapers.  Auto dealers wield a lot of local political power - they are often the largest single financial supporter of local politicians and even some Congressional reps.  They also wield power as typically the largest single advertiser in local media, so they get sympathetic coverage.  Over the years, they have translated this into a lot of legislative help (such as limitations on Internet competition).

I can't even believe he can say this with a straight face:

President Barack Obama, calling current deficit spending "unsustainable," warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries.

"We can't keep on just borrowing from China," Obama said at a town-hall meeting in Rio Rancho, New Mexico, outside Albuquerque. "We have to pay interest on that debt, and that means we are mortgaging our children's future with more and more debt."

Holders of U.S. debt will eventually "get tired" of buying it, causing interest rates on everything from auto loans to home mortgages to increase, Obama said. "It will have a dampening effect on our economy."

No duh.   And whose name is scribbled on the bottom of the stimulus bill?  Isn't this the type of concern one expresses before spending a couple of trillion dollars?  Obama reminds me exactly of the young students he lectured at ASU the other day about not getting into too much debt.  He already sounds like kids calling their dad -- it wasn't my fault!  I didn't know!  The only difference is there is no one left out there to bail out the US - no dad, no friendly government, nobody.

By the way, if you are worried about current deficits, read this post Q&O calls "fun" with charts -- there is absolutely nothing fun about it.  A sample:

Obama and Congressional Democrats seem to have hit upon a way of helping the unemployed that is even more expensive than Welfare.  Many of the stimulus-related jobs programs turn out to spend millions of dollars to preserve just a few jobs.  Their only net benefit is to politicians -- by making certain preferred corporations the intermediary for these funds, these corporations will in turn line politicians' campaign coffers with money, something welfare recipients were never very good at.

A good example is the ongoing fight by Congressman Maurice Hinchey to force the Obama Administration to accept a new helicopter as part of an $835 million dollar program that supports 800 jobs in Mr. Hinchey's district.  TJIC has a very apt counter-proposal:

Instead of spending $835 million, why not just cancel the program and hand each of the workers a $500,000 check with the memo line "welfare - because you produce something no one wants" ?

That'll put food on the table of these 800 workers (for a decade), save us $435,000,000 and maybe teach 800 workers and 1 Democratic politician something about economics.

Yes, but Travis, in your model, who is going to write checks back to Mr. Hinchey?

Glen Reynolds repeats a past recommendation for the Sennheiser PX-100 headphones, and I want to give that recommendation a big ditto.  I have three pair at home and love them.  They are inexpensive, rugged, sound great, and fold up cleverly (though there is a learning curve to getting them back in the case).

The Republicans have lost the knack for being a minority party in opposition.  Nowadays, they waste tremendous time and effort playing he-said-she-said with Nancy Pelosi or Jon Edwards, while blithely voting for more pork and trillions in new spending.  Obama, after all, wouldn't have his favorite and best tool (TARP) for building a Mussolini-style corporate state without Republican votes.

While it strikes me that a capable opposition would certainly know how to turn a knife in a political scandal, it also should be ready to introduce principled alternatives to key legislation.   The best such proposals are ones that attempt to achieve the stated goals of the majority party better and faster than the majority's own legislative efforts.

Which brings us to Jeff Flake, who is becoming a master of this.   When Nancy Pelosi and Barack Obama spouted platitudes about openness in government (without really taking any steps to achieve it) Flake came along and introduced bill after bill challenging the Democrats put their money where their mouth is on earmarks and transparency.  I have always been a big fan of Congressman Jeff Flake, who represents a district not far away from my home.  Though we don't agree on every issue, there are few, if any, politicians whose judgment I trust more.

Flake's most recent initiative is one close to my heart.  As readers know, I have good scientific reasons for believing the threat of CO2 emissions has been grossly overstated.  However, if we are going to commit to reducing CO2, we might as well do it intelligently, and Flake's proposal is very close to one I have been pushing for some time:

Conservative House members Jeff Flake (R-AZ) and Bob Inglis (R-SC), along with Rep. Dan Lipinski (D-IL), have introduced an alternative to the cap-and-trade proposal developed by House Democrats: HR 2380, the "Raise Wages, Cut Carbon" Act of 2009. Their proposal is for a carbon tax that will gradually increase over time, offset by a reduction in payroll taxes.

Of course I think this is brilliant, because it is my idea as well.  But it is also a brilliant opposition strategy.  Flake's approach is far better than the cap-and-trade mess the Democrats have gotten themselves in  -- not just because it would work better, but because it actually hits key supposedly liberal objectives better than does the Democrat's bill.  Specifically:

• Fairness. Sure, everyone is correct that a carbon tax can be politicized, but I do not think it can be gamed nearly as much as cap-and-trade.  For evidence, I turn to California.  California has both a cap-and-trade legislation, rule-making for which has been thrown to the California Air Resources Board (CARB); and it has carbon-tax-like excise taxes, which we generally call sales taxes.  Sure, there are some special case sales tax categories aimed a politically connected groups, but in general the sales tax system in California is simple and mostly fair.  More importantly, it is a layup to administer.  Contrast that to CARB, which has been slogging away in cap-and-trade related rule-making for years, and has everybody both pissed off and panicked.  Should cow flatulence be counted?  Should National Forests be able to sell offsets?  How do you create any kind of fair offset accounting given the shenanigans in Europe?  Should we allow Californians to have black cars? (seriously)  This is a perfect A-B test, as the legislators are the same in both cases -- sales taxes are simple and fair, cap-and-trade is a mess.

• Openness and transparency. It is clear that Obama's stated commitment to openness and transparency was all so much BS.  But why not nail him to that cross anyway?  Few if any of the general public understand cap-and-trade.  It is a tax, but it is inherently hidden from view, and passed through to consumers buried in rates in a way that offers politicians maximum deniability.  Everyone understands a sales tax, or the gas tax.  The system and its costs will be right out front (which is exactly what Democrats secretly DON'T want, which is what makes this a clever opposition tactic).

• Progressiveness. For all their talks about the common man and being progressives, the advocates of cap-and-trade are pushing what is possibly the most regressive tax increase of all time.  Again, there is a kind of political money laundering that hides the tax, but it is a tax none-the-less, and will hit the poor the hardest when electricity and fuel prices inevitably increase.  Flake's proposal to take the proceeds of the tax and use them to reduce the payroll tax is a great one -- offset one regressive tax with another, while at the same time putting in place incentives for job creation.

Postscript: My 2007 energy plan was as follows (assuming the need to do something about CO2)

1. large federal carbon tax, offset by reduction in income and/or payroll taxes
2. streamlined program for licensing new nuclear reactors
3. get out of the way

I have warned for years about government health care being a Trojan horse for government micro-management of personal behaviors.  If government is paying the health care bills, then anything individual action or choice that can conceivably be linked to health are open to regulation.  The latest episode:

Note in particular their emphasis on "health-related excise taxes." Those discussions are happening in Congress and the administration, too. It's really looking like tobacco, alcohol, and sugared sodas are likely to get a bit more expensive after health reform. Polling around these policies is proving them more popular than most wonks expected, and they have the secondary benefit of being dual-purpose: They raise money and make Americans healthier.

The fascism of good intentions is on its way.

I couldn't believe this when I read it:

General Motors is open to considering moving its headquarters from Detroit, selling off U.S. plants and even renegotiating parts of its restructuring plan with its major union, the new chief executive said Monday....

A move by GM to leave Detroit would represent another blow for the economy of a region already reeling from the bankruptcy of Chrysler and the sharp downturn in auto manufacturing.

GM purchased its glass-towered headquarter building known as Detroit's Renaissance Center last year for $625 million.

The article moves on to other topics, but I was struck by this:  A year ago, when bankruptcy was only months away (delayed only by injections of taxpayer money), with the real estate market teetering at its peak and just starting to fall off, with GM hemorraging cash, GM decides to ... spend $625 million on Detroit commercial real estate.

This is outrageous.  All the more so because GM's fortunes and the value of downtown Detroit real estate have a beta coefficient that is probably well above 1.  In other words, if GM decides it wants to sell the building, Detroit commercial real estate is going to tank on the news that GM is leaving Detroit, making the real estate virtually worthless.  It is very dangerous to buy an asset for which you are the only possible buyer if there is any possibility you might want to sell it some day.

I understand that companies that have losing business models often find it more profitable to invest outside of their business**, but GM seems to have found the only investment on the planet worse than their own stock.

** Postscript: I am not a huge Roger Smith fan, but this was essentially his strategy -- GM sucks as an investment, so I am going to invest outside of the auto industry.  Though he caught a lot of grief for it, most of his investments outside of GM turned out to have a substantially higher return for shareholders than his (or his successors') investments inside of GM.   Wikipedia writes:

Smith's purchases of EDS and Hughes were criticized as unwise diversions of resources at a time when GM could have invested more in its core automotive divisions.

But what if investments in your core business are even more unwise?

Via Overlawyered:

How "safety" news gets shaped: a litigation consultant "at the request of trial lawyers "¦ combed through hundreds of coroner's reports and media accounts" and before long ABC had an alarming story to run.

There is a symbiosis between tort lawyers (who want to inflame a jury into giving large awards, or better yet create a mass tort), the media (who want scare stories to boost circulation) and government (populated with legislators just itching to ban or regulate something to show they "care").  Someone should write a book about that.

Bottom line:  Never assume the states reasons of "safety" or "consumer protection" are the actual reasons for a regulation.  Regulation is much more likely to be protection of powerful political interests:

Flashback to 1959. The airline industry is on the cusp of its fifth decade, but there is a problem facing younger pilots who want to enter it. The old-timers just won't retire, and this frustrates potential entrants with much flying experience and training, thanks to military service in World War II, Korea, and elsewhere. The result is a sort of malinvestment in human capital, with many men trained to be pilots without private-sector jobs to justify the training.

What is a young, aspiring pilot to do? Well, he and his peers could make their presence and skills known to the airlines, signaling that the labor market had changed and that it would be possible to hire new pilots at lower wages. Not only would some airlines opt for the lower-priced laborers, thus lowering the airlines' reservation price required to provide flights to consumers, some owners of capital might invest in new airlines, thus increasing consumer choice, industry output, and create a downward pressure on prices.

Such would be the market solution, coordinated by changes in relative prices, and it would be peaceful, characterized by voluntary interaction and compromise by the parties involved. Unfortunately, there was another option, requiring the pilot to join a pilots union to lobby the federal government to enact rules forcing existing pilots to retire at age 60. All the union needed was a lobbying presence and some sympathetic regulators at the FAA.

Guess which option was chosen? It seems that in 1959, the aspiring pilots found a sympathetic ear in C.R. Smith, the then-president of American Airlines who also wanted to ground his older pilots. The industry was switching to jet engines, and Smith wanted to freeload off of the tax-supported training with those engines many of the younger pilots received in the military. So Smith instructed his lobbyists in Washington to rewrite FAA rules to force retirement at 60, and in December of 1959, an FAA administrator named Elwood R. Quesada simply authorized them. In January of 1961, Quesada retired from the FAA and immediately joined the board of directors of American Airlines. The retirement age rule has been in effect for almost 50 years.

Via Reason:

Because, unbelievably, Cartwright had previously been served with an Anti-Social Behaviour Order (ASBO)"”a civil order that is used to control the minutiae of British people's behaviour"”that forbade her from making "excessive noise during sex" anywhere in England.

This case sheds harsh light not only on the Victorian-style petty prudishness of our rulers, who seriously believe they can make sexually expressive women timid again by dragging them to court, but on the tyranny of Anti-Social Behaviour Orders themselves. Introduced by our authoritarian Labour government in 1998, anyone can apply for an ASBO to stop anyone else from doing something that they find irritating, "alarming," or "threatening."

Local magistrates' courts issue the orders, sometimes on the basis of hearsay evidence (which is permissible in "ASBO cases"). In short, the applicant for an ASBO does not have to go through the normal rigors of the criminal justice system in order to get a civil ruling preventing someone he doesn't like from doing something that he finds "alarming" or "dangerous." Once you have been branded with an ASBO, if you break its conditions"”by having noisy sex in your own home, for example"”you are potentially guilty of a crime and can be imprisoned.

The ASBO system has turned much of Britain into a curtain-twitching, neighbor-watching, noise-policing gang of spies. The relative ease with which one can apply to the authorities for an ASBO positively invites people to use the system to punish their foes or the irritants who live in their neighborhoods.

I don't really have much time to comment on this, but is there any need?  And for those smug enough to think this will never happen in the US, just look on college campuses today, where a number of universities are coming awfully close to creating a right not to be offended, and allowing students to define crime as anything that offends them.  And it almost goes without saying that such standards tend to be enforced unevenly, depending on the ideology of those who happen to be in charge.

From the AZ Republic:

A local contestant on "The Biggest Loser," NBC's hit weight-loss show, will be the featured speaker at the Maricopa Chamber of Commerce's Third Annual Keynote Speaker Event on May 27.

Maricopa resident Sione Fa, 28, is expected to share his journey to a healthy, new lifestyle during the fundraising event at Harrah's Ak-Chin Casino Resort.

Really?  You mean Gary Coleman wasn'g available.  Do business owners really have time for this stuff?

If you can get over the cognitive dissonance of seeing Spock feel up Uhura, this is a very solid movie.  Much like Casino Royale did for the Bond franchise, it tore the franchise down and rebuilt it very well, creating something that is both familiar and true to the original yet less campy and more up-to-date.  My son, who has never seen any of the original series (yeah, I know, major parenting failure) really enjoyed it as well.   Interestingly, there were almost more references back to The Wrath of Khan as there were to the original series.

OK, I am an engineer-geek but I think the video below, of a ship leaving the Houston Ship Channel at night, taken with time lapse photography, is really cool.  If your eyes are sharp, you can catch the San Jacinto monument on the right (which Texans went out of their way to make taller than the Washington Monument) and the refinery where I once worked on the left, just before the third bridge (the only suspension bridge).  Via Tom Kirkendall.

I had the sound off when I watched it.  I can do without the techno-jazz soundtrack, but ymmv.  I will confess parts of it look like a scene from Blade Runner.

From Cafe Hayek:

President Obama's modest proposal to slice $17 billion from 121 government programs quickly ran into a buzz saw of opposition on Capitol Hill yesterday, as an array of Democratic lawmakers vowed to fight White House efforts to deprive their favorite initiatives of federal funds.

Sen. Dianne Feinstein (D-Calif.) said she is "committed" to keeping a $400 million program that reimburses states for jailing illegal immigrants, a task she called "a total federal responsibility."

Rep. Mike Ross (D-Ark.) said he would oppose "any cuts" in agriculture subsidies because "farmers and farm families depend on this federal assistance."

And Rep. Maurice D. Hinchey (D-N.Y.) vowed to force the White House to accept delivery of a new presidential helicopter Obama says he doesn't need and doesn't want. The helicopter program, which cost $835 million this year, supports 800 jobs in Hinchey's district. "I do think there's a good chance we can save it," he said.

The news releases began flying as Obama unveiled the long-awaited details of his $3.4 trillion spending plan, including a list of programs he wants to trim or eliminate. Though the proposed reductions represent just one-half of 1 percent of next year's budget, the swift protest was a precursor of the battle Obama will face within his own party to control spending and rein in a budget deficit projected to exceed $1.2 trillion next year.

From the Liberty Papers:

President Obama says that he wants to nominate a Supreme Court Justice who has "empathy" as opposed to a jurist who makes decisions based on "some abstract legal theory." Not surprisingly, I'm not the only one troubled by his selection criteria. Thomas Sowell has written an excellent 3 part series "Empathy" Versus Law" (Part 1, Part 2, Part 3).

Title reference here and here

"My objective was social progress, human brotherhood and love. Love, Ms. Taggart. That is the key to everything. If men learned to love one another, it would solve all their problems"

A couple of cool views of New York from 1931:

Full size originals here and here at Shorpy