Coyote Blog

Outside of trade policy and climate treaties, I very seldom discuss foreign policy.  First, because it is not my first interest.  Second, because I am not an expert and do not spend the time to keep myself sufficiently informed on the issues to have useful insights.  Third, because of exactly this problem stated so well my Megan McArdle:

I periodically flirt with isolationism, or if you prefer,
"non-intervention". Like most libertarians, I'm attracted to "high
concept" political philosophy: simple rules that can be stated in a
sentence or less. No arguments about causus belli, blowback, or
ultimately unknowable political ramifications; just a simple "yes or
no" test. Did a foreign army invade the United States? For "Yes", press
one; for "No", press two, and go back to arguing about what should
replace child welfare laws in the coming anarcho-capitalist society.

Besides, all the foreigners hate having us there. Why not leave, and
see if absence makes the heart grow fonder? (I suspect that many
nations which have come, over long decades, to regard regional peace as
some sort of natural law, will get a rather nasty surprise. This might
make our influence look, in retrospect, rather appealing.)

But anyone who thinks at all seriously about libertarianism will,
fairly early on, be faced with a very high hurdle. There are a handful
of wars in which American intervention unambiguously halted gross
abuses of human liberty. World War II is one, though many end up going
around, rather than over . . . arguing that the Nazis were the direct
result of American intervention in World War I; or that it was
justified because Japan attacked us¹; or that Russia and Britain would have defeated Hitler anyway².  The American Civil War, however, is by far the highest leap; and the hardest to dodge.

In theory, every state has the right to secede, and the stated
Federal rationale for the Civil War--preserving the union--was the
vilest tyranny. In practice, chattel slavery was a barbarism even
viler.

And so we killed 20-30% of the Confederate Army, not a few of our
own, and uncounted numbers of civilians. That's not counting the
wounded, who probably outnumbered the dead. All we managed to achieve,
at this horrendous cost, was a corrupt and brutal occupation, followed
by the "freedom" of Jim Crow, sharecropping, and "separate but equal". And it was worth it.
The good guys won. We didn't do everything we wanted to, or even
everything we could have, or should have. Jim Crow was putrid. But it
was nonetheless so much better than slavery that it was worth the
horrendous cost--in my opinion, and that of almost everyone in the
world.

For me, a big part of the problem is one of information -- generally, most of the information one might find useful in deciding if X is a good war to pursue is from the government, an institution that demonstrably cannot be trusted based on past history when it makes this case.  Non-interventionism seems the right way to go, except for the
(relatively few) times it is not.  The problems is, to paraphrase the
famous dictum about advertising money, "half (or more) of our wars are
a waste -- we just don't know in advance which half."  Megan uses the
example of the Civil War, saying that that war was worth it because we
got rid of slavery.  But the war by no means began that way.  It wasn't
really until well into the war that both sides were pretty much in
agreement that the war was about ending or retaining slavery. I would argue that in advance, that war looked like an awful, terrible, horrible proposition.  The initial value proposition was "let's go to war so the Feds can have a bigger empire to run."  Only later did it become, "let's go to war to free a large part of our population."  There was a female professor, I forget her name, who made the point that the Emancipation Proclamation changed the war from a bloody waste of time to a moral positive.  But that came years into the fight.

The other problem I have is that the war is fought by, well, the government, the institution for which I have no trust.  One way of thinking about it is that every time we go to war, we put our lives and treasure and very future as a country in the hands of the Post Office.  Eeek.

Movie producers sell DVDs cheaper in, say, Taiwan than they do in the US.  This is not an unheard of economic phenomenon -- it happens in every commodity and product.  The reason we don't notice these price differences too much is that traders and arbitragers and shipping companies will target the largest price differentials and take advantage of them by buying and shifting products around until the price differential is less than the transportation and transaction costs.  Basic economics.

However, despite a number of structural advantages that already serve to reduce this cross-flow (e.g. different languages), the media companies are trying to stretch copyright law far beyond what CopyOwner says is legally defensible:

Copyright owners (including the owners of the "works" embodied in
the copyrighted labels on common non-copyrighted goods) like to
discriminate in pricing by creating artificial markets so that
discounts in one market won't be resold at a lower price in over-priced
markets. The thinking goes, "Why let U.S. consumers get the benefit of
prices that are affordable to people in developing countries when we
know we can get more out of the U.S. consumer's pocket?"

The
"first sale doctrine," now codified as Section 109 of the Copyright
Act, makes clear that the copyright owner's right of distribution is
subject to the copy owner's right to sell it to anyone, anywhere, at
any price. And that's great policy. Entrepreneurs who see too big a gap
between the prices charged U.S. consumers and the prices charged
consumers elsewhere for identical copies can buy the cheaper product
and sell it at a profit, while still giving the U.S. consumer a better
bargain.

But that's not why I nearly fell out of my chair. I
was used to these anti-competitive price discriminators ranting about
perfectly lawful gray market goods. What this story does is label these
perfectly legal importers as pirates. That's right. Despite quoting the
Supreme Court in Quality King Distributors v. L'anza Research International,
that "once the copyright owner places a copyrighted item in the stream
of commerce by selling it, he has exhausted his exclusive statutory
right to control its distribution," a ruling that suggests that the
evildoers are those who try to circumvent the law by preventing gray
market imports, they go on to call the importers "pirates"

It is always amazing how big round numbers hold the media in thrall.  Last week we saw the inevitable spate of articles about oil crossing the $100 mark, if only for a few minutes of trading  (actually, the more interesting milestone was somewhere back in the low $90 range when we exceeded the highest past price for oil in inflation-adjusted dollars).

I don't get hugely worked up about gradual commodity price changes.  Oil price increases are signals, signaling marginal consumers to use less and suppliers with historically marginal sources and substitutes to consider their development.  Also, our economic dependence on oil per dollar of GDP has declined, meaning that $100 oil has less impact on the economy than, say, it would have 20 years ago:

I would certainly prefer lower oil prices, and my business suffers to some extent when gas prices rise, but it is not a disaster  (it is interesting that higher oil prices are considered bad in the media, while lower home prices are considered bad in the media).  I know from past experience in the oil patch that oil price bubbles are often followed by oil price drops.  The high oil prices of the seventies were followed by rock-bottom oil prices in the eighties, and subsequent recession in the oil patch (causing the housing bust I discussed here). 

Also, given how we got to these higher oil prices, I tend to take them as good news.  Oil prices are not rising due to some drop off in supply.  Instead, they are rising because of a strong global economy, in particular with millions of people entering the middle class in Asia.  This is GOOD news. 

I have written on peak oil a bunch, so I won't get into it again.  Oil production at worst is going to flatten out for a long time, meaning we will have a steady rise in oil prices over time as the economy grows.  If you want a third party evaluation of peak oil theory, go ask climate catastrophists who believe that CO2 production is an impending disaster for the economy.  These guys know that there are lots of unproduced hydrocarbons out there, and it terrifies them.   Al Gore and James Hansen were running around last week trying to close off Canadian tar sands from development.

Finally, after this series of random thoughts, one more interesting take on this via Megan McArdle:  $100 oil was a stunt

Some observers questioned the validity of the price mark when it
emerged that the peak was the result of a trader "“ one of the "locals"
who trade on their own money "“ buying from a colleague just 1,000
barrels of crude, the minimum allowed, industry insiders said. The deal
on the floor of the New York Mercantile Exchange was at a hefty premium
to prevailing prices.

Insiders named the trader as Richard Arens, who runs a brokerage
called ABS. He was not available for comment. Analysts said he may have
been testing the ceiling of the crude price, but the premium he paid
surprised the market.

Before the $100-a-barrel trade, oil prices on Globex were at $99.53
a barrel. Immediately after the trade, prices went down to about
$99.40, suggesting a trading loss of $600 for Mr Arens.

Stephen Schork, a former Nymex floor trader and editor of the
oil-market Schork Report, commented: "A local trader just spent about
$600 in a trading loss to buy the right to tell his grandchildren he
was the one who did it. Probably he is framing right now the print
reflecting the trade."

Over at Climate Skeptic, I dissect the UK Met office's forecast a year ago for 2007 that the mean global temperature anomaly would be .54C and that we were 60% certain to exceed the 1998 record of .52C.  These two points allow me to infer a normal distribution for their forecast, and I find that the actual temperature anomaly for 2007 was in the bottom 0.00003% of the Met office's implied range of outcomes.

A few weeks ago I argued that if we really thought that CO2 was the biggest threat to the environment (a proposition with which I do not agree) we should not recycle paper or Christmas trees - we should wrap them in Saran Wrap and bury them.  Earlier I wrote this:

Once trees hit their maturity, their growth slows and therefore the
rate they sequester CO2 slows.  At this point, we need to be cutting
more down, not less, and burying them in the ground, either as logs or
paper or whatever.  Just growing forests is not enough, because old
trees fall over and rot and give up their carbon as CO2.  We have to
bury them.   Right?

I was being a bit tongue-in-cheek, trying to take CO2 abatement to its illogical extreme, but unfortunately the nuttiness of the environmental movement can outrun satire.  These folks advocate going into the forests and cutting down trees and burying them:

Here a carbon sequestration strategy is proposed in which certain dead
or live trees are harvested via collection or selective cutting, then
buried in trenches or stowed away in above-ground shelters. The largely
anaerobic condition under a sufficiently thick layer of soil will
prevent the decomposition of the buried wood. Because a large flux of
CO2 is constantly being assimilated into the worldas forests via
photosynthesis, cutting off its return pathway to the atmosphere forms
an effective carbon sink....

Based on data from North American logging industry, the cost for wood
burial is estimated to be $14/tCO2 ($50/tC), lower than the typical
cost for power plant CO2 capture with geological storage. The cost for
carbon sequestration with wood burial is low because CO2 is removed
from the atmosphere by the natural process of photosynthesis at little
cost. The technique is low tech, distributed, easy to monitor, safe,
and reversible, thus an attractive option for large-scale
implementation in a world-wide carbon market

Its a little scary to me that I can anticipate this stuff.

TJIC points out a dynamic in coffee houses I have also observed at work among restaurants:

"¦Strange as it sounds, the best way to boost sales at your
independently owned coffeehouse may just be to have Starbucks move in
next-door.

That's certainly how it worked out for Hyman. Soon after
declining Starbucks's buyout offer, Hyman received the expected news
that the company was opening up next to one of his stores. But instead
of panicking, he decided to call his friend Jim Stewart, founder of the
Seattle's Best Coffee chain, to find out what really happens when a
Starbucks opens nearby. "You're going to love it," Stewart reported.
"They'll do all of your marketing for you, and your sales will soar."
The prediction came true: Each new Starbucks store created a local
buzz, drawing new converts to the latte-drinking fold. When the lines
at Starbucks grew beyond the point of reason, these converts started
venturing out - and, Look! There was another coffeehouse right
next-door!

One wonders if smaller niche book stores, who complain about Borders and Barnes & Noble, have had any similar experiences.

As to the part about "When the lines
at Starbucks grew beyond the point of reason," I can say from my limited observations as a non-coffee drinker that there are a lot of things wrong with the Starbuck's model, particularly vis a vis lines.  First and foremost seems to be that their production process doesn't make a lick of sense.  I'd have been laughed out of the room in almost any operations course if I had proposed the production process they use to deliver coffees.  At some point, people are going to realize that waiting in lines does not have to be part of the coffee experience, and then Starbucks is in trouble. 

For years, the Einstein's Bagels near me had the worst production process I had ever seen.  People had to criss-cross one another constantly behind the counter just to complete one order, and the assembly line, from ordering through payment, always had a horrible bottleneck somewhere, thought the bottleneck moved around as they played with staffing.  Every Saturday morning the line and wait would be awful.  I pretty much had given up on them when they suddenly closed for three weeks.  When they reopened, they had a new layout behind the counter, new electronics, and a whole new process.  Since then, I have never seen a line longer than 2 people even in peak periods.  And look at Southwest Airlines.  They have reinvented their boarding process for about the third time  (and I like the changes).  Is it really possible that no one at Starbucks has thought about re-engineering the coffee delivery process?

Today I had to make my usual Sunday morning run to the hardware store to get ... something or other, I can't remember.  Anyway, as I was leaving, I looked behind be, saw no one there, and started backing up.  I have one of those backup warning thingies that been when you are about to hit something, and suddenly the things starts screaming at me, and I jam on the brakes.  There, cutting behind my car, is Randy Johnson, Diamondbacks pitcher and 27-time Cy Young winner.  I seem to have missed his knee by about 6 inches.  Gulp. 

By the way, if you think Johnson looks creepy on the mound, you should see him flashing a searing FU look.  This event effectively adds to my long history as scourge-to-the-stars, wherein I have stepped on Raul Julia's foot, spilled a big Gulp size diet coke on Brook Shields, added a big ink stain to Farrah Fawcett's blouse, hit Martina Navratilova in the face with a revolving door, and, uh, others I might share if my mom did not read this blog.

OK, I was mad at the waste of tax dollars for ethanol programs that do nothing for the environment or to reduce net fossil fuel consumption.  I was mad that a technology that in no way reduces CO2 production but does introduce radical new land-use-related environmental problems could be sold as an environmental panacea, rather than the corporate welfare it truly is.  I was mad we have decided it is more important to subsidize corn farmers than to continue to provide the world's poor with cheap food.  And I was flabbergasted that Congress could call for production of more corn-based ethanol than is physically possible with our entire corn crop.

But I really am mad now that ethanol subsidies are making craft beers rarer and more expensive to make:

A global shortage of hops, combined with a run-up in barley prices, is
sending a chill through Arizona's craft-beer industry.

The hops shortage threatens to boost prices, cut into profits and close
down brewpubs. It could change the taste and consistency of treasured
local ales.

In Bisbee, "hop heads" already are weaning themselves from Electric
Dave's India Pale Ale. Dave Harvan closed his 7-year-old Electric
Brewing Co. in November, citing the scarcity and high cost of
ingredients.

So why aren't as many farmers growing hops and barley?  Because the government is paying them ridiculous jack to grow corn so we can burn food into our cars:

Papazian attributed the barley prices to ethanol subsidies that have
raised the price of corn, the main ingredient in the alternative fuel.
As a result, farmers have switched to barley for livestock feed, which
has pushed up prices.

The hops situation is more complex. Years of overproduction and low
prices led farmers to replace hops fields with more profitable crops.
Add to that corn subsidies that have caused farmers to replace hops
fields with corn, a drought in Australia that affected yields and heavy
rains in Europe that ruined much of this year's crop.

I tried to open a complicated Excel file today and Excel told me that it was corrupted and that it would try to rebuild it.  Having tried to rebuild it, Excel reported the file was beyond repair.  Now I have a backup somewhere, but I tried an experiment.  I fired up the Open Office freeware clone of Excel (I think it is called Calc).  It opened the Excel file that Excel itself could not open or rebuild.  I re-saved the file using Open Office and now all is working fine and Excel can now read the worksheet again.  The $0 clone succeeds where the $400 original fails. 

I went to a musical called "the Pajama Game" this evening.  I didn't entirely follow the plot, but it seemed to be a documentary about why all of our clothes are made in China.

More on state-run health care as a Trojan horse for fascism, this time from France:

Writing in the left-wing Liberation newspaper, sociologist Henri Pierre
Jeudy suggested the ban marked "the end of an era" for France -- and a
danger for personal freedoms.

"Public health costs are being used to justify an ever more
coercive control over our private lives," he said, with France's yen
for smoky cafes now cast as "an unhealthy mistake".

My other posts on the same topic here.

Last night I was working at my office up until about 1AM (that's something we of the exploitive class small business owners have to do from time to time) and as I was leaving I went around the back to the dumpster to throw some trash away.  The top was closed, and the lid is really large such that you have to really throw it upwards to get it to stay open.  Well, unfortunately, I had my car key in my hand and it went sailing through the air too.

So, with it pitch black and the key likely inside the dumpster somewhere, I was forced to call my wife, wake her up, and ask her mysteriously to meet me at my office with a flashlight and my spare car key.  She came through, and did it with pretty good humor, all things considered.  By the way, after a few minutes of dumpster diving with the flashlight, I found my key and everything turned out fine, though a late night shower was required before bed.

Tragically, it is not even close to the dumbest thing I have ever done in my life.  Probably not even in the top twenty.

Here is a public service announcement for those of you who might be younger or who did not live through past housing bubbles (such as the mid-80's bubble in Texas).  Housing bubbles take a long time to sort out.  The typical pattern is that one sees a big build-up of yard "For Sale" signs around town, but no real movement or sales.  What happens is that people selling their houses resist accepting that a change in pricing levels has occurred, and list the homes at the old, higher price levels, particularly when any price cuts would put them underwater on their mortgage.

Eventually, the dam breaks, as sellers are forced to accept lower pricing because they can no longer bear the holding costs any longer.  In Texas, I had at least two friends who just left the keys in the mailbox and walked away, leaving it all to the bank to sort out.  But it can take a really long time for this to play out -- I am talking years, not months, depending on how inflated the bubble got.  From my experience (confirmed in the futures markets here) the bottom will not come until at least a year from now.  In Texas in the 1980's, it took as long as five years for the whole thing to play out and for prices to start recovering.

Over at Climate Skeptic, I dissect climate models to show that the future warming in the models from CO2 alone is not much more than 0.5C.  All the catastrophe comes from positive feedbacks that modelers assume dominate the climate, an odd assumption for such a long-term stable system.  I summarize as follows:

• Climate sensitivity is the temperature increase we might expect with a doubling of CO2 to 560 ppm from a pre-industrial 280ppm
• Nearly every forecast you have ever seen assumes the
  effect of CO2 alone is about a 1C warming from this doubling.  Clearly,
  though, you have seen higher forecasts.  All of the "extra" warming in
  these forecasts come from positive feedback.  So a sensitivity of 3C
  would be made up of 1C from CO2 directly that is tripled by positive
  feedbacks.  A sensitivity of 6 or 8 still starts with the same 1C but
  has even higher feedbacks
• Most thoughtful climate scientists will admit that
  we don't know what these feedbacks are -- in so many words, modelers
  are essentially guessing.  Climate scientists don't even know the sign
  (positive or negative) much less the magnitude.  In most physical
  sciences, upon meeting such an unknown system that has been long-term
  stable, scientists will assume neutral to negative feedback.  Climate
  scientists are the exception -- almost all their models assume strong
  positive feedback.
• Climate scientists point to studies of ice cores and
  such that serve as proxies for climate hundreds of thousands of years
  ago to justify positive feedbacks.  But for the period of history we
  have the best data, ie the last 120 years, actual CO2 and measured
  temperature changes imply a sensitivity net of feedbacks closer to 1C,
  about what a reasonable person would assume from a stable process not
  dominated by positive feedbacks.

If I had to choose one word that describes why I despair of politics, it is "calibration."  Recently, it has been observed that Ron Paul, for example, cannot possibly win because he sticks to a basic set of beliefs and never calibrates his message to the electorate and recent polls.  On the other end of the scale, Hillary Clinton is famous for endlessly calibrating everything she does in the hopes of maximizing the votes she receives.

Calibration is one of those dangerous words that tend to obfuscate the underlying reality.  Because, there are only two possible definitions of calibration as used in this political context:

• Lying, i.e. telling the electorate what they want to hear with the intention of acting differently once in office
• Total nihilism,, i.e. willingness to shift beliefs based on whatever is effective

Russell Roberts describes the situation pretty well:

But there is little difference between Republican and Democratic
Presidents in what they actually do. In what they say? Sure. Both
Reagan and Bush talk about individual responsibility and the market
blah blah blah. Bill Clinton talked more about feeling people's pain
and the downtrodden blah blah blah. Similarly, in the current
presidential campaign, there are stark rhetorical differences between
say Giuliani and Romney on the one hand and Obama and Clinton on the
other.

But will the actual results be different? Will Hillary double the
minimum wage? Change our health care system to be more socialized?
Eliminate corporate welfare? Will Giuliani make the health care system
less socialized? Eliminate the minimum wage? Get rid of farm subsidies?
Stop spending federal money on education?

Most of it is talk and it's not just because change is hard to
achieve. It's because they really don't want change. Did Bill Clinton
get rid of income inequality? Dent it? The share of income going to the
top 1% rose throughout most of the Clinton administration. Was it his
policies? The steady rise in the share of income going to the top 1%
started rising in 1976. Was it Carter's doing?

Was Bush or Reagan a hard core free trader in practice? Nope. They
used protectionism when it was politically expedient. Just like Bill
Clinton signed welfare reform and NAFTA and then chose not to enforce
the truck provision of NAFTA because the Teamsters didn't like it.

Government gets bigger under both Republicans and Democrats. What
they spend money on is a little different, yes. But to hate George Bush
for being a free market guy is to miss what is really going on. And to
hate Hillary because she doesn't understand the power of markets and to
love, say, Mitt Romney, is to misunderstand both of them. They use
rhetoric to dupe you. Don't be duped.

This all leads to the question of into which category should we place Paul Krugman - lier or nihilist?

Paul Krugman worries that,
although trade between high-wage countries is mutually beneficial,
"trade between countries at very different levels of economic
development tends to create large classes of losers as well as winners"
- and so is suspect because it likely harms ordinary American workers
("Trouble With Trade," December 28).

A famous trade economist
argues that this concern is misplaced.  In a 1996 essay, this economist
- responding to a protectionist who fretted that western trade with
low-wage countries would harm workers in the west - wrote that this
protectionist "offers us no more than the classic 'pauper labor'
fallacy, the fallacy that Ricardo dealt with when he first stated the
idea, and which is a staple of even first-year courses in economics. In
fact, one never teaches the Ricardian model without emphasizing
precisely the way that model refutes the claim that competition from
low-wage countries is necessarily a bad thing, that it shows how trade
can be mutually beneficial regardless of differences in wage rates."

Oh - the economist who wisely warned against the pauper-labor fallacy is none other than Paul Krugman.

The evidence is fairly clear that it is past time to reform the US Patent Office, particularly in its handling of software and Internet-related patents.  One of my ex-employers, Mercata, managed to obtain several patents (including a few that were awarded postmortem) that in effect patented volume discounting (though the method was sortof kindof clever).  Amazon famously managed to patent 1-click ordering, and numerous companies from Red Hat to Blackberry have been subject to expensive suits from various patent trolls, many of whom never took a single step to monetizing or developing their patents besides hiring lawyers. 

Stephan Kinsella at Mises has another good example:  Apple is attempting to patent the ordering of take-out food by cell phone.

Genius! Apple's done it! They've solved the problem of waiting in line for food or beverages. You place your order before you get it--but not the normal way--see, here's the pure genius of it--you place your order, get this, you won't believe it, wirelessly.
Yep! Who would have thunk it? I mean, I know it's well known to call in
a food order and drive there in time to get it, so you don't have to
wait in line (and this might be done on a (wireless) cordless home
phone, or a (wireless) cell phone, but I digress); or to place your
order and receive one of those little blinky-buzzy things that tells
you when your order is ready, so you don't have to wait in line (hey,
aren't those little blinky wireless buzzers, er, wireless? but again, I
digress); and it's known to communicate wirelessly; and in other
countries, it's well-known to use cell phones to make purchases. And in
McDonald's, you can place your order at a little automated computer
kiosk (but maybe it uses wires! Whew--HUGE difference, lemme tellya).

But, my God, Apple! Oh, it's amazing--the innovative brilliance to think of using a cell phone--a cell phone,
do you hear me!?--to place an order for a cuppajoe... so you don't have
to stand in line... it's so beautiful, I'm about to shed tears...
Sniff... Thank God for the US patent system giving them a king's
monopoly on this unique idea. Otherwise, no one would have come up with
this!. And let's only hope Apple gets a patent on this and is able to
sue or threaten other companies to pay them royalties for all their
remotely similar "wireless communications systems". After all, it's a small price to pay to have the American innovation we do.

There was a time when I was naive enough to think that the US Patent Office would step back and say -- "oops, we screwed up.  We really didn't know what we were doing when we were flooded with all of these business-model-masquerading-as-software patents.  Now we realize we need to get our act together."  Congress is going to have to step in and reduce or eliminate the patentability of software and business models (all other software other than computer code is subject copyright law, not patents).

But of course, Congress will never make these reforms, because forcing business competition into the courts under arbitrary and changing law rather than settling business model superiority in the marketplace generates far more political activism and campaign donations.  So why am I even bothering writing this.  Never mind.

Postscript: By the way, if I were running a software or Internet company, I would be filing every dumb patent application I could think of, because if I don't, someone else will and will and then I am stuck with a suit and trying to prove priority.  Which causes me to think of one way we might force reform -- a sort of reverse strike.  Every software company in 2008 should strive to file as many patent applications for every BS thing they can think of.   Maybe a deluged PTO might at that point force some kind of reform.

TJIC has a disgusting story of the state legislature passing a law just to bail out one guy who could not do well on his civil service tests but had friends in high places, vaulting him from 623 to 1 on the waiting list  (if only I could get the same law for me and security lines at airports).

Now, it is always possible to find anecdotes of government patronage, but I thought this quote from the Boston Globe about the extent of such help-one-person laws was incredible:

A Globe review found that 40 of the 218 state laws passed in 2007
provide benefits to specific individuals by name. Thirty allowed
employees of certain state agencies to donate sick days to particular
colleagues, and three granted retirement benefits to certain public
employees. Six exempted particular police and firefighter applicants
from maximum age requirements, allowing them to take civil service
tests and apply for municipal jobs at an older age.

If each of these is a worthy goal, then change the law to allow everyone to do it, not just your pals.

I have chastised our city on many occasions (more here) for spending enormous amounts of money on a new light rail / streetcar system for Phoenix.  These light rail systems can be twenty or more times as expensive, per mile or passenger carried, than a similar bus system.  But what really, really makes light rail nuts for Phoenix is the lack of flexibility.   Our hugely expensive new light rail system serves just one corridor, in a city that really does not even have a downtown.  Phoenix is characterized by a nearly infinite number of commuting routes that don't overlay nicely on a suburbs to city-center pattern as they might in, say, Chicago.  Further, the current route arguably follows the least congested route of any in the city!

The incremental cost of light rail over bus systems has been justified to us by our government overlords by economic development.  The argument goes that light rail creates more business development along their routes than a bus system.  Now, I am skeptical of this, given the region justified building a billion dollar stadium for the hapless Cardinals on the same justification (not to mention numerous subsidies of a couple of college bowl games that add little to an area that is going to get holiday tourists because of its climate whether there is a football game or not.

But what about Portland?  Supposedly Portland light rail is the go-by which all we unplanned cities should emulate.  But the Anti-Planner brings this helpful observation about Portland's experience with light rail and development:

Streetcar advocates often say that 7-mile-per-hour streetcars aren't about transportation, they are about economic development.
But they expect the Department of Transportation to pay for them out of
highway user fees. Why didn't they ask the Department of Housing and
Urban Development for the money?

Of course, the Antiplanner doesn't believe
that streetcars catalyze economic development. Instead, they merely
catalyze more tax subsidies for economic development. Portland spent
$90 million on a streetcar line and $665 million on subsidies to
development "” then credited the development to the streetcar line.
Yeah, right.

From Scientific American Magazine - January 2008 via the Mises Blog

...As with living organisms and ecosystems, the economy
looks designed"”so just as humans naturally deduce the existence of a
top-down intelligent designer, humans also (understandably) infer that
a top-down government designer is needed in nearly every aspect of the
economy. But just as living organisms are shaped from the bottom up by
natural selection, the economy is molded from the bottom up by the
invisible hand.

I need to read the whole article, it looks awesome, but in fact yours truly made the same observation over a year ago (emphasis in the original - I was going through an overuse-of-bold-type phase.

So here is this week's message for the Left:  Economics is a
science.  Willful ignorance or emotional rejection of the well-known
precepts of this science is at least as bad as a fundamentalist
Christian's willful ignorance of evolution science (for which the Left
so often criticizes their opposition).  In fact, economic
ignorance is much worse, since most people can come to perfectly valid
conclusions about most public policy issues with a flawed knowledge of
the origin of the species but no one can with a flawed understanding of
economics....

In fact, the more I think about it, the more economics and evolution are very similar.  Both are sciences that are trying to describe the operation of very complex, bottom-up, self-organizing systems.  And,
in both cases, there exist many people who refuse to believe such
complex and beautiful systems can really operate without top-down
control. 

For example, certain people refuse to accept that homo sapiens could
have been created through unguided evolutionary systems, and insist
that some controlling authority must guide the process;  we call these
folks advocates of Intelligent Design.  Similarly, there are folks who
refuse to believe that unguided bottom-up processes can create
something so complex as our industrial economy or even a clearing price
for gasoline, and insist that a top-down authority is needed to run the
process;  we call these folks socialists. 

It is interesting, then, given their similarity, that socialists and
intelligent design advocates tend to be on opposite sides of the
political spectrum.  Their rejection of bottom-up order in favor of
top-down control is nearly identical.

The WSJ ($) has an article on California showing the growth of expenditures and the budget deficit.  I took the expenditures numbers and converted them to 2007 dollars and put them on a dollar per state resident basis, to correct both for growing population and inflation.  Here are California government general fund expenditures on a 2007 dollar per person basis:

1990-1991: $2,755
1995-1996: $2,470
2000-2001: $3,558
2005-2006: $3,416
2007-2008: $3,767

From these figures, we can learn a couple of things.  First and foremost, the state of California demonstrates itself to be just as financially incompetent as any condo-flipping doctor who now finds himself stuck with a bunch of mortgages he can't pay.  Lured by the false prosperity of the Internet bubble, California increased real government spending per resident by nearly 50% in the latter half of the nineties, and has done nothing to reign this spending in (thus the deficits).  The only place where the analogy with the person caught short by the housing bust falls apart is that the person with expensive mortgages is probably not out buying a new Mercedes and big screen TV, whereas that is exactly what California is doing, passing a $14 billion a year health care plan that will whose price tag can only rise.

One of the things I like about John Scalzi, other than the fact his books rock, is that he goes out of his way to promote other up-and-coming writers.  His series in December called "a Month of Writers" has pounded my Amazon bill and filled up my "to be read" shelf.  He indexes the entire series here.

I was tempted to title this post "markets in everything", but I just couldn't steal that moniker from the Marginal Revolution folks.  USA Weekend has a story about the Alibi Network, which will, for a price of course, create an alibi for you:

Whether you
are looking to skip a day of work or to secretly leave town for the
weekend, Alibi Network can provide fake airline receipts or phone calls
to your boss explaining your absence and even mock up an entire
itinerary for a bogus conference you were "attending." Rarely has lying
been so creepily airtight.

The
Chicago-based company charges from $75 for a simple phone call to
thousands of dollars for extensive lying, on top of a $75 annual fee.
The most popular service is the "virtual hotel," in which the fibber
can provide a boss or family member with the phone number of a hotel
where he's supposed to be. The number rings to one of Alibi's phones,
which are staffed by actors who will answer as if a particular hotel
has been reached. The incoming call then can be forwarded to the
fibber's cellphone, making it seem as if he's in a certain city even
though he's not. (We use "he" here, but half of Alibi's members are
female.)

Some
requests involve a creative solution. One working stiff asked the
service to get him out of a boring, week-long training class that was
mandated by his office. The solution: Alibi hired an actor to dress up
as a courier and barge into the class, informing the man that his house
had been robbed and he needed to go home right away. Another request
involved a married woman with small children who longed for a relaxing
weekend away from the kids. Alibi concocted a story that the woman had
won a free spa weekend in a prize drawing and hired an actor to call
her home and leave a voicemail message informing her of her "win."

For those of you of need of such services, perhaps on January 2 nursing your hangover, their web site is here.

Update:  Tyler Cowen informs me that I am waaaayyy behind the times, and that this company actually was the first entry in "Markets in Everything" several years ago.  That's what I get for trying to take a break from blogging.

This Tuesday, Arizona's death penalty goes into effect for businesses that knowingly hire workers who have not been licensed to work by the US Government.  Employers must use the e-Verify system the Federal government has in place to confirm which human beings are allowed by the federal government to work in this country and which people businesses are not allowed to employ.  Businesses that don't face loss of their business license (in itself a bit of government permission to perform consensual commerce I should not have to obtain).

There are any number of ironies in this law:

• The Arizona government has resisted applying the same tight standards to receipt of government benefits, meaning the state is more comfortable with immigrants seeking government handouts than gainful employment.
• The state of Arizona resists asking for any sort of ID from voters.  This means that the official position of the state of Arizona is that it is less concerned about illegal immigrants voting and receiving benefits than it is about making sure these immigrants don't support themselves by working.  This is exactly the opposite of what a sane proposal would look like. (and here)
• In the past, we have used Arizona drivers licenses to verify citizenship.  By implementing this law, the Arizona Government has said that an Arizona driver's license is not sufficient proof of citizenship.  Unable to maintain the integrity of their own system (e.g. the drivers license system) the state has effectively thrown up its hands and dumped the problem on employers
• The e-verify system, which the law requires businesses use, currently disappears in 11 months.
• The law requires that the e-Verify system be used for both current and new employees.  It is, however, illegal under federal law to use the e-Verify system on current employees.
• In fact, the e-Verify system may only be used within 3 days of hire -- use it earlier or later, and one is violating the law.  In a particular bit of comedy, it is illegal to use the e-Verify system to vet people in the hiring process.  The government wants you to entirely complete the expensive hiring process before you find out the person is illegal to hire.
• There are apparently no new penalties for hiring illegal immigrants at your house (since there is no business license to lose).  State legislators did not want to personally lose access to low-cost house cleaning and landscaping help.  We're legislators for God sakes -- we aren't supposed to pay the cost of our dumb laws!

I have criticized the AZ Republic a lot, but they have pretty comprehensive coverage on this new law here and here.

Update:  Typical of the government, the e-Verify registration site is down right now.

Update #2:  It appears Arizona is taking a page from California's book.  California often passes regulations that it hopes businesses will follow nationally rather than go through the expense of creating different products or product packaging for California vs. the other states.  Arizona may be doing something of the same thing, since the terms of use for e-Verify require that if a business uses e-Verify, it must use if for all employees.  Therefore, a business that has any employees in Arizona is technically required to use this system for all employees nationwide.

Update #3:  By the way, I guess I have never made my interest in this issue clear.  We do not hire any illegal immigrants.  Since most of our positions require employees to live on site in their own RV, it is seldom an issue since the average illegal immigrant does not own an RV.  We have always done all of our I-9 homework, even though the government stopped auditing I-9's about 8 years ago.  We have in fact been asked about five times by foreigners to hire them under the table without having the licenses and papers they need from the US government -- all of them have been Canadian.

More absurd legal theories from the RIAA:

[I]n
an unusual case in which an Arizona recipient of an RIAA letter has
fought back in court rather than write a check to avoid hefty legal
fees, the industry is taking its argument against music sharing one
step further: In legal documents in its federal case against Jeffrey
Howell, a Scottsdale, Ariz., man who kept a collection of about 2,000
music recordings on his personal computer, the industry maintains that it is illegal for someone who has legally purchased a CD to transfer that music into his computer.

The industry's lawyer in the case, Ira Schwartz, argues in a brief
filed earlier this month that the MP3 files Howell made on his computer
from legally bought CDs are "unauthorized copies" of copyrighted
recordings.

"I couldn't believe it when I read that," says Ray Beckerman, a New
York lawyer who represents six clients who have been sued by the RIAA.
"The basic principle in the law is that you have to distribute actual
physical copies to be guilty of violating copyright. But recently, the
industry has been going around saying that even a personal copy on your
computer is a violation."

A good end of the year list, via Maggie's Farm