Coyote Blog

Sloppy thinkers often confuse support for free-market capitalism with "doing what big business wants."  In fact, the two are often entirely different, as large well-connected companies often thrive through the very fact of government regulation, using the government to step on competitors and create rent-seeking opportunities, while in turn rewarding politicians out of their profits with electoral support.

The Fannie Mae / Freddie Mac fiasco is turning out to be a prime example of such crony capitalism in operation.  These two quasi-private companies enjoyed many special perks (from huge tax breaks to an implicit government guarantee), enriching both themselves and a circle of Wall Street banks while protecting themselves from criticism by waving the "we're helping the little guy" banner.  Leftish Congressmen ranged from platitude spouting dupes to willing participants in the fraud, and helped enable the whole mess.

Paul Gigot, a long-time critic and whistle-blower of Fannie and Freddie has a great, long editorial on these companies and their Congressional enablers.  If the WSJ article is gated, Volokh has a long excerpt.

On several occasions I have have lamented the declining standard of activism:

Activist:  A person who believes so strongly that a
problem needs to be remedied that she dedicates substantial time to ...
getting other people to fix the problem.   It used to be that activists
sought voluntary help for their pet problem, and thus retained some
semblance of honor.  However, our self-styled elite became frustrated
at some point in the past that despite their Ivy League masters degrees
in sociology, other people did not seem to respect their ideas nor were
they particularly interested in the activist's pet issues.  So
activists sought out the double shortcut of spending their time not
solving the problem themselves, and not convincing other people to
help, but convincing the government it should compel others to fix the
supposed problem.  This fascism of good intentions usually consists of
government taking money from the populace to throw at the activist's
issue, but can also take the form of government-compelled labor and/or
government limitations on choice.

It seems that there is a surprisingly large coalition ready to take this to its logical extreme:  A group called Service Nation is set to spend a ton of money lobbying the government to create a program to force every young person into servitude by 2020.

Not satisfied with taking 20-40% of our income to spend as they see fit, the government hopes also to be able to order around the labor of millions of young adults.   I feel like I am reading some bizarre historical re-enactment of the Soviet or Chinese youth programs.  This whole program, which I am tentatively going to label "happy face fascism," makes me so sick I can't even address it further tonight.  More later.

PS:  This is, not coincidentally, exactly the idea Obama has been pushing (here and here).  I say not coincidentally, because this is how one skirts stupid campaign finance laws - you get your supporters to take your top campaign planks and run with them as "independent" efforts that are not subject to campaign finance restrictions.

PPS: Just to head off an argument that came up last time in the comments, I have been a consistent opponent of the military draft as well.

Update:  I know the allusion is over-used, but we are in 1984-land when people keep using the term "voluntary universal national service" as do the leaders of this effort.  By universal, they mean that everyone has to do it.  So they are calling for "national service that everyone is required by law to perform but is voluntary." I do not think that word means what you think it means.

The solution is to develop a system of voluntary universal national
service for our country and for the world. To call upon all young
adults to take at least one year to learn the hard and rugged skills of
practicing idealism.

Yes, lets teach them the "hard and rugged skills" of being forced to do labor that no one is willing to pay for voluntarily, so must be performed by slaves instead.

Another thought:  TJIC made a relevant observation to this the other day:

I'm seeing more and more grudging praise for the efficiency of the Chinese dictatorship these days.

It tends to go something like this:

Sure, sure, they're horrible, and democracy is better, but if they
decide that they need to put in { more mass transit | a factory | a new
canal | an Olympic village }, they just tell everyone in the village
"move!", and the job gets done.

I get the same impression.  Service Nation is the end result of such thinking.

Clarification:  Service Nation denies they support mandatory service, and have removed the word "universal" from their site.  However, it should be noted that many of the prominent supporters and board members of Service Nation have individually advocated for mandatory service.  Also, no denial that they are seeking to create a new, massive government beauracracy.

I remember it was not that long ago that the main issues for many urban politicians vis a vis the poorer parts of their city were

• to encourage more and free-er mortgage lending
• to encourage more retail businesses that would, through competition, help eliminate the retail price premium charged in many poorer areas

When I say I remember back to these things, I am not talking about 2 generations ago, for God sakes, I am talking about the 1990's.  Just one presidency ago.

Now, politicians are looking to punish bankers who provided easy mortgages for poorer borrowers, and are seeking to shut down payday loan companies, the last resort for ready cash before once goes to Tony Soprano.  Now, the LA city council wants to ban certain new retail establishments in South LA merely because they are too low cost and easy to use.

The other day I wrote to beware of rated capacity for wind and solar, because such plants tend to run way below their rated capacity on a 24-hour average.  MaxedOutMamma reads the wind report of the largest utility in Germany, which is as a country is among the largest adopters of wind power.  She finds this interesting bit:

As
wind power capacity rises, the lower availability of the wind farms
determines the reliability of the system as a whole to an ever
increasing extent. Consequently the greater reliability of traditional
power stations becomes increasingly eclipsed.

As
a result, the relative contribution of wind power to the guaranteed
capacity of our supply system up to the year 2020 will fall
continuously to around 4% (FIGURE 7). In concrete terms, this means
that in 2020, with a forecast wind power capacity of over 48,000MW
(Source: dena grid study), 2,000MW of traditional power production can
be replaced by these wind farms.

This is an even lower substitution factor than I mentioned previously, and is so because this report looks not just at the percent of time wind is blowing at full speed, but also at the peak load conventional power plants that must be kept running on standby due to the unreliability of wind.  At this 24:1 substitution ratio, folks like Al Gore and Boone Pickens will bankrupt us.  But of course, their investment portfolios, laden with alt-energy investments, will be paying off.

As we previewed last week, the IRS came out with its numbers on 2006 taxes, and it turns out that the top 1% richest taxpayers earned 22% of the taxable income and paid 40% of the income taxes.  According to candidate Obama, this represents an unfair free ride for the rich.  These numbers increased from 21% and 37% in the last year of the Clinton administration.

I guess my question is, what's enough?  Already, half the country only pays less than 3% of the income taxes.  Do we really want a country where 50.1% of the people vote to live off the other 49.9%?

Postscript:  Yes, I know payroll taxes work differently and hit lower income folks pretty hard.  But then again, the Social Security program is supposed to be an insurance and retirement plan, not a transfer program. The left goes bananas when you suggest Social Security is welfare and not an honorable paid participation program.  So, like any other insurance, the premiums are flat rather than progressive.  You can't have it both way.

A few weeks ago, Kevin Drum had a post on shale oil development, quoting from a speech by Congressman Ken Salazar.  It is hard to really excerpt the piece well, but my take on their argument against shale oil leasing is:

• Shale oil technology is unproven
• The government is leasing the shale oil rights too cheap
• There is already plenty of shale oil land for development, so new leases won't increase development
• This is just being done by the Bush Administration to enrich the oil companies
• The administration is rushing so fast that Congress has not had the chance to put a regulatory regime in place

In many ways, the arguments are surprisingly similar to those against new offshore and Alaskan oil leasing.  Through it all, there is this sort of cognitive dissonance where half the arguments are that the oil won't be developed, and the other half seem to be based on an assumption that a lot of oil will be developed.  For example, how can the leases be "a fire sale" if shale oil technology is unproven and development is not likely to occur?  I would say that if these assumptions were true, then any money the government gets for a worthless lease is found money. 

Similarly, how are oil companies going to enrich themselves by paying for leases if the technology is not going to work and no development is going to occur?  This same bizarre argument became Nancy Pelosi's talking point on offshore oil leasing, by saying that oil companies were somehow already cheating us by not drilling in leases they already have.  Only the most twisted of logic could somehow come to the conclusion that oil companies were enriching themselves by paying for leases were they found no developable oil.

From the standpoint of Democratic Party goals, there is absolutely nothing bad that happens if the government leases land for oil shale or oil drilling and oil companies are unable to develop these leases  (there is some small danger of royalty loss if leases are not developed when they could be economically, but most private royalty agreements are written with sunset periods giving the lease-holder a fixed amount of time to develop the lease or lose it -- I don't know how the government does it).  The net result of "no drilling" or "oil shale technology turns out not to work" is that the government gets money for nothing. 

Here is the problem that smart Democrats like Drum face, and the reason behind this confusing logic:  They have adopted environmental goals, particularly the drastic reduction of CO2 in relatively short time frames, that they KNOW, like they know the sun rises in the east, will require fuel and energy prices substantially higher than they are today.  They know these goals require substantially increased pain and lifestyle dislocation from consumers who are already fed up with fuel-cost-related pain.  This is not because the Democrats are necessarily cruel, but because they are making the [faulty] assumption that the pain and dislocation some day from CO2-driven global warming outweighs the pain from higher priced, scarcer energy.

So, knowing that their policy goal is to have less oil at higher prices, and knowing that the average consumer would castrate them for espousing such a goal, smart Democrats like Drum find themselves twisted into pretzels when they oppose oil development.  They end up opposing oil development projects because in their hearts they want less oil around at higher prices, but (at least until their guy gets elected in November) they justify it with this bizarre logic that they oppose the plan because it would not get us oil fast enough.  The same folks who have criticized capitalism for years for being too short-term focused are now opposing plans that don't have a payoff for a decade or so.

At the end of the day, most Democrats do not want more oil developed, and they know that much higher prices will be necessary to meet their climate goals.  It sure would be refreshing to hear someone just say this. As I wrote at Climate Skeptic, the honest Democrat would say:

Yeah, I know that $4 gas is painful.  But do you know what?  Gas
prices are going to have to go a LOT higher for us to achieve the CO2
abatement targets I am proposing, so suck it up.  Just to give you a
sense of scale, the Europeans pay nearly twice as much as we do for
gas, and even at those levels, they are orders of magnitude short of
the CO2 abatement I have committed us to achieve.  Since late 2006, gas
prices in this country have doubled, and demand has fallen by perhaps
5%.  That will probably improve over time as people buy new cars and
change behaviors, but it may well require gasoline prices north of $20
a gallon before we meet the CO2 goal I have adopted.  So get ready.

Postscript:  By the way, oil companies have been trying to develop shale oil since the 1970s.  Their plans went on hold for several decades, with sustained lower oil prices, but the call by the industry to the government for a clarified regulatory regime has been there for thirty years.  The brief allusion in Salazar's speech to water availability is a valid one.  I saw some studies at Exxon 20+ years ago for their Labarge development that saw water availability as the #1 issue in making shale oil work.

PPS:  I mention above that the pain of fuel prices not only hits the wallet, but hits in term of painful lifestyle changes.  One of the things the media crows about as "good news" is the switch to mass transit from driving by a number of people due to higher oil prices.  This is kind of funny, since I would venture to guess that about zero of those people who actually switched and gave up their car for the bus consider it good news from their own personal life-perspective.  Further, most of the reduction in driving has been the elimination of trips altogether, and not via a switch to mass transit.  Yes, transit trips are up, but on a small base.  95%+ of reduced driving trips are just an elimination of the trip.  Which is another form of lifestyle pain, as presumably there was some good reason to make the trip before.

Update: Updated on Canadian Oil Sands production here.  Funny quote:

Fourth, and potentially most important, the U.S. "green" lobby is
pushing legislation that could limit purchases of oil sands products by
U.S. government agencies based on its GHG footprint.  It would be well
beyond stupid for Congress to prohibit our buying oil from Canada while
we increase buying it from countries that threaten our security.  But
just because something is stupid certainly does not mean Congress may
not do it.

One needs to be a careful consumer of information when reading about the "rated capacity" of certain alternative energy plants. 

Take a 1MW nuclear plant, run it for 24 hours, and you get 24 MW-hours, or something fairly close to that, of electricity.

Leave 1MW worth of solar panels out in the sun for 24 hours, you get much less total electricity, depending on where you put it.  On an average day in New York City, you will get about 4 MW-hours.  In one of the best solar sites in the word, my home of Phoenix, you get about 6.5 MW-hours per day.  The key metric is peak sun-hours per day, and some example figures are here.  So, even in the best solar sites in the world, solar panels run at only about 25-30% of capacity.

It turns out, not surprisingly, that the same relationship holds for wind.

It's not like it's a secret that wind turbines are an unreliable source of electrical power. Bryce points out that, "In
July 2006, for example, wind turbines in California produced power at
only about 10 percent of their capacity; in Texas, one of the most
promising states for wind energy, the windmills produced electricity at
about 17 percent of their rated capacity."

That means
that there has to be nuclear, coal-fired or natural gas power plants
functioning fulltime as a backup to the pathetically unreliable and
inefficient wind farms. Moreover, what electricity they do generate
is lost to some degree in the process of transmitting it over long
distances to distribution facilities.

Now, this should not outright dissuade us from these technologies, but since no one has really licked the night-time / not-windy storage proble, it's certainly an issue.   I have looked at solar for my house a number of times, and the numbers just are not there (even with up to 50% government subsidies!) without a 2-5x decrease in panel costs.  Low yields can potentially be tolerated, but capital costs are going to have to be a lot lower before they make a ton of sense.

Tor.com recently went online, and apparently has a new John Scalzi short story from the Old Man's War universe and a new Charles Stross from his very enjoyable "Laundry" series (I have not mentioned the latter series very much, but it is sort of HP Lovecraft meets Men in Black crossed with Office Space.  Really.)

Kudos to Kimberly Strassel for going off on a world class rant against their airlines, and their desire to blame their woes on "oil speculators."

I want to say thanks for the July 10 email you sent to
all your customers seeking to explain why today's air travel experience
is so painful. The letter, signed by 12 of you, explained that "oil
speculators" -- presumably by betting on future oil prices -- are
killing your industry and thus requested that I, as a consumer,
pressure Congress to rein in this "unchecked" market "manipulation."

I admit that just lately I'd begun to feel that flying
was something akin to having my intestines fished out with a long hook.
Actually, I'd been wondering whom to blame for the fact that it would
probably be cheaper, easier and maybe even faster to drive to wherever
I want to go than to board one of your planes. Suddenly, all is clear.

I now understand that it is oil speculators who set
your hiring policies and who must have outlined the three types of
people you may employ: those who grunt at me, those who sigh deeply as
if my presence has ruined their day and those who are actively hostile
to my smallest request.

She goes off for quite a bit more.  Check it out.  I guess I am glad somebody's futures are going up in value.  My airline travel futures, also known as frequent flier miles, seem to get devalued constantly.

What is easily, to my mind, the best and most innovative music service on the Internet may be closing soon, as Pandora can no longer pay the royalty rates demanded by record labels.  This is really too bad.  I am a paying customer of Pandora (it is a free service on the Internet, but I pay $30 or $40 a year to listen to it on my Squeezebox streaming system at home). 

I can say with total confidence that Pandora has caused me to buy more music than any other outside force has caused me to buy since my ill-fated flirtation with Columbia House when I was a teenager.  I have gotten streams going that were so great that I had Amazon open in a second window, and was banging out CD orders almost as fast as Pandora could serve up tunes.  I have thought for years that this would be a natural fit for Amazon or iTunes.  Too bad the record labels can't understand this.

I am almost embarrassed to ask this, with as many hours as I have spent in Excel, but I cannot find a way to export a chart or save a chart in Excel directly to an image format like jpeg.  The way I do it is to take a screen shot and then paste the screen shot into photoshop for cropping and saving.  But this is a kludge.  Any suggestions?

The problem I have is that I like to layer multiple charts on top of each other in photoshop, so I can turn on and off different lines on a graph.  I do this to make semi-animated charts for my climate videos.

For example, on the chart above, I like to start with a blank chart with the axes in place and then have the data line draw itself across (which you can do with a simple horizontal wipe between jpeg one with the blank chart and jpeg 2 with the same chart but the data line drawn in, IF the charts are scaled exactly the same.   The problem is that to do this right, I have to make sure I have the screen-shot taken at the same level of zoom each time and I crop the picture identically each time.  A real pain.

Here-to-fore, I had generally accepted the meme that where Wal-mart moves in to small towns, smaller stores tend to fail due to the competition.  Unlike most who spread this meme, however, my response has generally been, "so?"  The number of people shoveling coal into steam boilers has decreased with the rise of diesel locomotives.  The number of people employed physically connecting phone calls with patch cords has fallen with the rise of automatic switching.  Technology and distribution systems change and morph over time. 

But I have to admit I appear to have been wrong -- the meme itself may not be true.  Via Mark Perry, who discusses this study in more depth.

This is pretty dang fun, I have been playing with it for a while.  The link includes a demo video so you can see what it is about.  It is a sort of mechanics simulation, but that makes it sound really boring.  Check it out.

Everyone is a libertarian when it comes to his or her own choices:

• My speech should be legal (though those other guys are over the line)
• My choices, diet, lifestyle should be legal (though those other guys need to be protected from themselves)
• My personal interactions are fine (but those other guys are all racists, threats to children, indecent, etc)
• My business is great (but those other guys are all evil exploiters)

The hard part about defending freedom is not defending it for oneself.  The hard part is defending other people's right to be free.  TJIC makes this point quite well in response to a Boston Globe editorial.

I while back, I wrote that I could fix our Arizona water "shortage" in about 5 minutes.  I pointed out that we in Phoenix have some of the cheapest water in the country, and if water is really in short supply, it is nuts to send consumers a pricing signal that says it is plentiful. 

David Zetland (via Lynne Keisling) follows up on the same theme:

The real problem is that the price of water in California, as in most
of America, has virtually nothing to do with supply and demand.
Although water is distributed by public and private monopolies that
could easily charge high prices, municipalities and regulators set
prices that are as low as possible. Underpriced water sends the wrong
signal to the people using it: It tells them not to worry about how
much they use.

Unfortunately, water is one of those political pandering commodities.  Municipal and state authorities like to ingratiate themselves with the public by keeping water prices low.  At the same time, their political power is enhanced if shortages are handled through government rationing rather than market forces, since politicians get to make the rationing decision -- just think of all those constituencies who will pour in campaign donations to try to get special rights to water from the water rationers.

From the AZ Republic:

A 27-year-old Avondale man has been arrested on suspicion of causing
a massive power outage last summer in Goodyear's Estrella community.

The outage knocked out power to nearly 4,000 homes for 19 hours June 18, 2007, when Goodyear's high reached 115 degrees....

According to police, officers arrested the suspect on a tip from the
public. He reportedly told investigators he cut down the pole because
he enjoyed the sparks it made.

Unlike many libertarians, I don't blog about gun rights much.  Some think this odd, but in my mind this is like saying it is odd that a female blogger doesn't blog much about abortion.  I have always thought it was pretty clear that the 2nd amendment protects an individual right to bear arms, but it's just not a subject for which I have much passion  *shrug*

However, I did find this hilarious.  Megan McArdle passes on the District of Columbia's petulant response to the Heller decision:

Here's what they're proposing:

* Allowing an exception for handgun ownership for self-defense use inside the home.
   
* If you want to keep a handgun in your home, the MPD will have to
perform ballistic testing on it before it can be legally registered.

* There will be a limit to one handgun per person for the first 90 days after the legislation becomes law.

* Firearms in the home must be stored unloaded and disassembled, and
secured with either a trigger lock, gun safe, or similar device. The
new law will allow an exception for a firearm while it is being used
against an intruder in the home.

* Residents who legally register handguns in the District will not
be required to have licenses to carry them inside their own homes.

OK, so I can have a handgun in the home solely for self-defense, but this self-defense weapon must be stored unloaded, disassembled, and locked.  The only time it can be unlocked and assembled and loaded is "while it is being used against an intruder".  Jeez.  In the time it would take to unlock, assemble, and load the gun, I could probably build some McGyver device out of dental floss, a TV remote, and a couple of Thin Mint Girls Scout Cookies to just blow them up.

Postscript: I have never been that confident in my ability with a handgun.  TV portrayals notwithstanding, I find them very difficult to handle accurately, and they require a lot of practice which most casual owners don't pursue.  In my case, I find this a more realistic home defense weapon.

From Andrew Coulson at Cato:

After telling a gathering of the American Federation of Teachers that he opposes school voucher programs over the weekend, Senator Obama added that: "We need to focus on fixing and improving our public schools; not throwing our hands up and walking away from them."

Senator Obama sends his own two daughters to the private "Lab School" founded by John Dewey in 1896, which charged $20,000 in tuition at
the middle school level last year. Though he says "we" should not be
"throwing up our hands and walking away" from public schools, he has
done precisely that.

That is his right, and, as a wealthy man, it is his prerogative
under the current system of American education, which allows only the
wealthy to easily choose between private and government schools. But
instead of offering to extend that same choice to all families, Senator
Obama wants the poor to wait for the public school system to be "fixed."

Over the weekend, I was reading an article about T. Boone Pickens' energy plan, a thinly disguised strategy to grab government subsidies for his wind investments.  And I started to think how amazing it is that electricity from wind has to be subsidized to compete with electricity from fossil fuels.  Here's what I mean:

• To get electricity from wind, one goes to a windy area, and puts up a big pole.  I presume that there are costs either in the land acquisition or in royalty payments to the land holder.  Either way, one then puts a generator on top of the pole, puts a big propeller on the generator, add some electrical widgets to get the right voltage and such, and hook it into the grid. 
   
• To get electricity from petroleum is a bit more complex.  First, it's not immediately obvious where the oil is.  It's hidden under the ground, and sometimes under a lot of ocean as well.  It takes a lot of technology and investment just to find likely spots where it might exist.  One must then negotiate expensive deals with often insanely unpredictable foreign governments for the right to produce the oil, and deal day to day with annoyances up to and including rebel attacks on one's facilities and outright nationalization once the investments have been made.  Then one must drill, often miles into the ground.  Offshore, huge, staggeringly expensive platforms must be erected -- many of which today can be taller than the worlds largest skyscrapers.  Further, these oil fields, once found, do not pump forever, and wells must be constantly worked over and in some cases have additional recovery modes (such as water flood) added. 

  The oil, once separated from gas and water, is piped and/or shipped hundreds or even thousands of miles to a refinery.  Refineries are enormously complex facilities, each representing billions of dollars of investment.  The oil must be heated up to nearly 1000 degrees and separated into its fractions  (e.g. propane, kerosene, etc.).  Each fraction is then desulpherized, and is often further processed (including cracking and reforming to make better gasoline).  These finished products are in turn shipped hundreds or thousands of miles by pipeline, barge, and truck to various customers and retail outlets.

  To make electricity from the oil, one then needs to build a large power plant, again an investment of hundreds of millions of dollars.  The oil is burned in huge furnaces that boil water, with the steam driving huge turbines that produce electricity.  This electricity must then go through some electrical widgets to get to the right voltage, and then is sent into the grid.

Incredibly, despite all this effort and technology and investment required to generate electricity from fossil fuels, wind generators still need subsidies to compete economically with them.  In a very real sense, the fact that fossil fuels can come to us even at today's prices is a modern day business and technological miracle.

Of course, in the press, the wind guys begging at the government trough are heroes, and the oil companies are villains. 

From my point of view, the NY Times buried the lede in this story about installation of parking sensors on San Francisco streets.  The article focuses mainly on the ability of drivers at some time in the future to get locations of empty parking spots on the streets via smartphone or possibly their GPS.  But I thought the pricing changes they were facilitating were more interesting:

SFpark, part of a nearly two-year $95.5 million program intended to
clear the city's arteries, will also make it possible for the city to
adjust parking times and prices. For example, parking times could be
lengthened in the evening to allow for longer visits to restaurants.

The
city's planners want to ensure that at any time, on-street parking is
no more than 85 percent occupied. This strategy is based on research by
Mr. Shoup, who has estimated that drivers searching for curbside
parking are responsible for as much of 30 percent of the traffic in
central business districts.

In one small Los Angeles business
district that he studied over the course of a year, cars cruising for
parking created the equivalent of 38 trips around the world, burning
47,000 gallons of gasoline and producing 730 tons of carbon dioxide.

To
install the market-priced parking system, San Francisco has used a
system devised by Streetline, a small technology company that has
adapted a wireless sensor technology known as "smart dust" that was
pioneered by researchers at the University of California, Berkeley.

It
gives city parking officials up-to-date information on whether parking
spots are occupied or vacant. The embedded sensors will also be used to
relay congestion information to city planners by monitoring the speed
of traffic flowing on city streets. The heart of the system is a
wirelessly connected sensor embedded in a 4-inch-by-4-inch piece of
plastic glued to the pavement adjacent to each parking space.

The
device, called a "bump," is battery operated and intended to last for
five and 10 years without service. From the street the bumps form a
mesh of wireless Internet signals that funnel data to parking meters on
to a central management office near the San Francisco city hall.

This is actually really cool, but my guess is that politicians will not have the will to charge the level of peak prices the system may demand.

Postscript:  As many of you know, there is a new wave of urban planners who want to impose dense urban living on all of us, whether we like it or not.  I have no problem with folks who want to fight the masses and live in downtown SF or Manhattan, but the world should also have a place for the majority of us who like to have an acre of land and a bit less congestion. 

Anyway, in singing the praises of the urban lifestyle (which often is as much an aesthetic preference vs. suburbia as anything else), you seldom hear much about this type of thing:

Solving the parking mess takes on special significance in San Francisco
because two years ago a 19-year-old, Boris Albinder, was stabbed to
death during a fight over a parking space....

The study also said that drivers searching for metered parking in just
a 15-block area of Columbus Avenue on Manhattan's Upper West Side drove
366,000 miles[!!] a year.

And here we suburbanites are complaining when we have to park more than 5 spaces from the door of the supermarket.

Unfortunately, despite several appeals, I have not taken any photos around the hotel.  One reader asked if I have seen anyone famous.  The answer is, I don't know.  Let me explain.

Some years ago (maybe 8-10) my wife and I were driving through Malibu on vacation, when we stopped at a little coffee shop for breakfast.  After we were done eating, my wife went to the bathroom while I sat outside on a bench to wait for her.  Sitting there was another husband who was clearly also waiting for his wife to come out.  We chatted for about 5 minutes, with this British gent telling me he had just gotten back from London on business.

Well, my wife came out and I met her at the car.  The first thing she said to me was "Oh my god, you were talking to Pierce Brosnan."  I said "??"  Sure enough, on reflection, it did seem to be he, particularly since my wife also recognized his wife from People magazine.  In my defense, one does not expect to encounter James Bond in a psuedo-Denny's wearing sweats and a week-old beard.  But since then, I have not really trusted by celebrity-identification skills.

I have lived a lot of places that featured beautiful women who liked to display themselves in public to good effect.  But I have been sitting in the lobby of the Beverly Hills Hotel for about 15 minutes and in that time I have seen the most magnificent display of beautiful women in small dresses I ever expect to see.  Wow.

I have lived a lot of places that featured beautiful women who liked to display themselves in public to good effect.  But I have been sitting in the lobby of the Beverly Hills Hotel for about 15 minutes and in that time I have seen the most magnificent display of beautiful women in small dresses I ever expect to see.  Wow.

Who knew that one small piece of technology could turn a group of wealthy American urbanites into third world refugees.

Over the last year or so, I have been relatively optimistic for a relatively significant drop in oil prices over the next 2-4 years followed by a number of years of price stability at this lower level.  This would be a direct analog to what happened in the 80's after the 1978 oil price spike.

One argument readers have made against this scenario is that a much larger percentage of the world's oil potential is controlled by lumbering state oil companies than was the case in 1978, particularly given the US Congress's continued cooperation with OPEC in keeping US oil reserves off-limits to drilling.  The theory runs that these state run oil companies have a number of problems:

• they move and react very slowly
• they don't have the technical competence to develop more difficult  reserves
• they don't have the political will to divert oil profits from social programs (including oil industry over-employment and patrimony) to capital spending

This latter issue is a big one - even keeping current fields running at a level rate requires constant capital and technological infusions.  I have written about this issue before, and I am sympathetic to this argument.  Here is Jim Kingsdale on this issue:

Events in Iran since the Revolution are an eery echo of what has
happened in Venezuela since the advent of Chavez.  Skilled workers and
foreign capital and technology have fled.  Corruption has become
rampant  along with incompetence.  Production of over 6 mb/d fell to
below 3 mb/d after the Revolution and is currently about 3.8 mb/d.  The
pre-revolutionary head count of 32,000 employees has grown to 112,000.

Since the Revolution Iran has exported $801.2 billion of oil but
nobody knows where that money has gone.  "Certainly none of it was
invested in Iranian oil infrastructure which badly needs renovation and
repair, upstream and downstream."  The author claims the Iranian
petro-industry is "on the brink of bankruptcy" although such a claim is
not documented.

It is clear that Iran, Venezuela, Mexico, Nigeria, and Iraq together
represent an enormous percentage of the world's oil deposits and
production that is being mismanaged.  The political and management
dysfunctions in all of these countries simultaneously is a major reason
for the world's current energy crisis.  If these countries all operated
in a standard capitalist mode, I suspect oil would be below $50 a
barrel and the ultimate supply crisis might be five or ten or even
fifteen years beyond when we will see it fairly soon.  There seems to
be little hope that any of these countries will make a dramatic change
in their oil productivity soon.

I am coming around to this argument.  I still think that oil prices are set for a fall, but lower prices may not last long if this analysis is correct.

Update: Of course Maxine Waters would like to add the United States to this list of countries with incompetent government management of oil reserves.