The Core Problem with Social Security

I am happy to see others making the point I have tried to make for years:  That the coming financial problems with Social Security are not its biggest problem.  Megan McArdle and Clive Cook say it very well:

In this post on Paul Krugman and Social Security,
Clive, as usual, targets with laser accuracy the real problem with the
Social Security system: not that it is bankrupt, but that it encourages
people to make extremely bad decisions about providing for their future.

It starts with childbearing:  social security systems seem to exert downward pressure on birthrates,
in effect undermining their own actuarial base. Social security
socializes the benefits of childbearing in providing for retirement,
but no one has yet figured out how to socialize the main cost, which is
turning your life choices over to a screaming pre-verbal dictator.
People are thus tempted to free ride on the childbearing of others, and
the more generous benefits are, the more they seem to free ride. This
is one reason that Social Security, which used to have more than 30
workers for each retiree, now has only three, headed towards two.

Social Security also encourages people to leave the workforce
earlier than they otherwise would. People are healthier than ever at
65, but while in 1950, almost half of all men over the age of 65
worked, that number is now less than 20%. This appears to be highly
correlated with the spread of defined benefit pensions such as social
security, which offer no advantage to delaying retirement. Indeed,
Social Security perversely penalizes anyone who takes early benefit but
continues to work, docking a third of their earnings.

Finally, Social Security discourages private savings. This is
terrible for two reasons. If future fiscal problems force the
government to reduce benefits, the people who didn't save enough
because they relied on those promises will be made much worse off than
they would otherwise have been.

The other problem is that Social Security is not a productive
investment. Privately saved money is mostly lent to corporations that
mostly use the money to do things that make the economy more
productive, such as R&D and capital equipment upgrades. Social
security "contributions" are lent to the government, where they are
mostly spent on things that could not be remotely described as
improving our economy's productive capacity, such as farm subsidies.

Excellent.  I ran the numbers and discussed what a bad investment return was paid by Social Security here.  I discussed Social Security as intellectual welfare here.

Sustainability Through Poverty

In my previous post on urban planning, I mentioned the increasingly popular idea of sustainability through povertyDon Boudreaux responds to the currently hip idea that somehow we need to revert to a more local economy with local food production.  This is absolutely absurd, for any number of reasons.  I'll just list three:

  • It doesn't work.  The total energy used for transport, say of food products, is a small percentage of the total energy used in the total production process.  The energy transportation budget is generally smaller than efficiency gains from scale or from optimizing location.  For example, a wheat farm in Arizona on 50 acres is going to use a lot more energy (and water, and fertilizer, and manpower) than a wheat farm on a thousand acres in North Dakota.
  • It leads to poverty.  Our modern society, our lifestyles, our lifespans all are a result of the fantastic increases in efficiency we have reaped from the division of labor.  A push to localize all production reverses the division of labor.  Many products, such as semiconductors, become outright impossible on a local scale.
  • It leads to starvation.  It is hard for us to imagine famine in the wealthy nations of the world.  Crop failures in one part of the world are replaced with crops from other parts of the world.  But as recently as the 19th century, France, then the wealthiest nation on earth but reliant on local agriculture, experienced frequent crop failures and outright starvation.

More on the food-miles stupidity here.  And an interesting study that shows that processed foods greatly reduces waste and trash to landfills was here.

Update: More on food miles here at Reason

New York Inspired Thoughts on City Planning

I really can't stand to be in New York City for very long.  The crowds, the hassles and the lines all conspire to drive me crazy.  Every second I feel like I am packed around by more people, and I find it horribly claustrophobic.

If your immediate reaction to this statement is to feel like I am attacking you or your lifestyle, you are wrong.  My purpose is not to say that those who love it here in NYC are making an incorrect choice, for they are not.  If they derive energy from the people and the density and all the amenities that density can justify, great.  It is in fact an interesting (and depressing) feature of modern discourse that my saying that I don't personally choose a certain lifestyle is found as threatening to people who do.  Why should it?  My only answer is that this zero-sum statist society of activists has created the expectation that the next step of anyone who expresses a negative preference for something will be to run to the government to get it banned.

The reason I bring my preference up at all is that the vast majority of city planners get a huge hard-on for New York.  Their goal is to turn the world into Manhattan.  They wish to maximize densities and minimize personal automobile use and, well, backyards.  In other words, a bunch of folks who have the ear of the government wish to use the coercive power of the government to turn the world into something I can't live in.  Again, I have no problem with New Yorkers having New York, but why does Scottsdale have to be New York too?

By the way, on a quasi-related topic, the Anti-Planner has an interesting observation:  Supposed gains in sustainability in high-density urban areas have more to do with making everyone poor than with the density  (emphasis added):

Many planning advocates take it for granted that sprawl and auto driving are inherently unsustainable. McShane shows
just how this attitude can go when he describes Halle Neustadt, which
some Swedish urban planners once described as "the most sustainable
city in the world."

McShane here refers to some field work
done by the Antiplanner. To make a long story short, what made Halle
Neustadt "sustainable" was poverty
, and as soon its residents gained
some wealth, many of them moved out and most of the rest bought
automobiles, turning the cities many greenspaces into parking lots.

Owen then turns to climate change, which he describes as the last gasp
of smart growth. Smart growth, he notes, "has always been a policy in
search of a justification, a solution in search of a problem." Now, in
climate change, smart-growth advocates hope they have found such a
problem.

One difficulty, McShane notes, is that there is no guarantee that
smart growth is really more greenhouse-friendly than ordinary sprawl.
Depending on load factors, Diesel trains can emit more greenhouse gases
per passenger mile than autos, and concrete-and-steel high-rise condos
can emit more CO2 than wood homes.

McShane refers in particular to an Australian study
that found that "place doesn't matter," that is, low densities were not
particularly greenhouse unfriendly. Instead, income was much more
important, meaning that the high-rollers living in million-dollar
downtown condos were generating far more greenhouse gases than
moderate-income suburbanites
.

Which implies that the "solution" to sustainability (whatever that is) and CO2 emissions is to promote poverty.  That may seem like a tongue-in-cheek exaggeration, but in fact the latest IPCC warning on climate relies heavily on the work of Nicholas Stern, who says the solution to global warming is to make western income levels look more like those in India (emphasis added):

Mr Stern, the former chief economist of the World Bank, sends out a
very clear message: "We need to cut down the total amount of carbon
emissions by half by 2050." At current levels, the per capita global
emissions stand at 7 tonnes, or a total of 40-45 gigatonnes. At this
rate, global temperatures could rise by 2.5-3 degrees by then. But to
reduce the per capita emissions by half in 2050, most countries would
have to be carbon neutral. For instance, the US currently has, at 20-25
tonnes, per capita emissions levels that are three times the global
average.

The European Union's emission levels stand at 10-15
tonnes per capita. China is at about 3-4 tonnes per capita and India,
at 1 tonne per capita, is the only large-sized economy that is below
the desired carbon emission levels of 2050. "India should keep it that way and insist that the rich countries pay their share of the burden in reducing emissions," says Mr Stern.

Translation: India should stay poor and the West should become that way.

Why I Love America

Today I was in Times Square and, unsurprisingly, was approached on the street by a young huckster attempting to get me to check out his establishment.  However, I was floored to see what was in the building.  In an attempt to meet a strong public need (the city of New York has been debating the lack of public restrooms for years to no effect) and to gain some marketing exposure, P&G has leased out storefront space in Times Square to open a Charmin-branded public restroom.  It is truly an odd experience, a cross between a bathroom and a Disney attraction.  There are games and entertainers and a gift shop, and, of course, twenty very nice private bathrooms that are cleaned by the staff after each use.  All my son and I could think to say when we were done was "We love America."

Here is more on the bathrooms and the promotion, open just for the holidays.

Someone has also posted a Youtube video of the entire experience:


Update: 
After visiting again, I can't shake the parallel (despite the fact that these bathrooms are free) to the public restroom company in Snow Crash.  I know there are a lot of folks who rebel against the cyberpunk genre, and I have always been more of a space-opera traditionalist (Foundation, Mote in Gods Eye, Louis McMaster Bujold, Hyperion, etc.) but over time Snow Crash may well become my favorite Sci-fi book.

Great First Ammendment Ruling

From FIRE, comes this really encouraging ruling:

Earlier this month, U.S. Magistrate Judge Wayne Brazil partially granted plaintiffs' motion for a preliminary injunction in the San Francisco State University (SFSU) speech codes litigation. Yesterday, Judge Brazil issued his written opinion on the motion, and in so doing struck a devastating blow against speech codes at universities in California and hopefully"”...

Judge Brazil enjoined the university from enforcing both the civility
requirement and a related provision allowing student organizations to
be punished collectively if any group members engage in behavior
"inconsistent with SF State goals, principles, and policies." Judge
Brazil did not enjoin the university from enforcing its prohibition on
"[c]onduct that threatens or endangers the health or safety of any
person within or related to the University community, including
physical abuse, threats, intimidation, harassment, or sexual
misconduct." However, he emphasized that the provision must be narrowly
construed to only prohibit that "intimidation" or "harassment" which actually endangers someone's health or safety,
and explicitly directed the university that the policy "may be invoked
only as it has been construed in this opinion." This limiting
construction prohibits the university from interpreting that provision
broadly to punish constitutionally protected speech (since the vast
majority of speech that actually endangers someone's health or safety
is not constitutionally protected).

Here are a few excepts from the Judge's decision:

It is important to emphasize here that it is controversial expression
that it is the First Amendment's highest duty to protect. By political
definition, popular views need no protection. It is unpopular notions
that are in the greatest peril "” and it was primarily to protect their
expression that the First Amendment was adopted. The Framers of our
Constitution believed that a democracy could remain healthy over time
only if its citizens felt free both to invent new ideas and to vent
thoughts and feelings that were thoroughly out of fashion. Fashion, it
was understood, is an agent of repression "” and repression is an agent
[of] democracy's death....

There also is an emotional dimension to the effectiveness of
communication. Speakers, especially speakers on significant or
controversial issues, often want their audience to understand how
passionately they feel about their subject or message. For many
speakers on religious or political subjects, for example, having their
audience perceive and understand their passion, their intensity of
feeling, can be the single most important aspect of an expressive act.
And for many people, what matters most about a particular instance of
communication is whether it inspires emotions in the audience, i.e.,
whether it has the emotional power to move the audience to action or to
a different level of interest in or commitment to an idea or cause. For
such people, the effectiveness of communication is measured by its
emotional impact, by the intensity of the resonance it creates.
How is all this relevant to our review of the University's
civility requirement? Civility connotes calmness, control, and
deference or responsiveness to the circumstances, ideas, and feelings
of others. ["¦] Given these common understandings, a regulation that
mandates civility easily could be understood as permitting only those
forms of interaction that produce as little friction as possible, forms
that are thoroughly lubricated by restraint, moderation, respect,
social convention, and reason. The First Amendment difficulty with this
kind of mandate should be obvious: the requirement "to be civil to one
another" and the directive to eschew behaviors that are not consistent
with "good citizenship" reasonably can be understood as prohibiting the
kind of communication that it is necessary to use to convey the full
emotional power with which a speaker embraces her ideas or the
intensity and richness of the feelings that attach her to her cause.
Similarly, mandating civility could deprive speakers of the tools they
most need to connect emotionally with their audience, to move their
audience to share their passion.
In sum, there is a substantial risk that the civility requirement
will inhibit or deter use of the forms and means of communication that,
to many speakers in circumstances of the greatest First Amendment
sensitivity, will be the most valued and the most effective.

Wow!  This is fantastic, and aimed right at University speech codes that try to ban any speech that offends someone [a standard that tends to be enforced unevenly, typically entailing prosecuting only those students who offend people who are like-minded with the school's faculty and administration.

 

Good News

Via Its Getting Better All the Time:

"The focus on this year's hunt is the humpback, which
was in serious danger of extinction just a few decades ago. They are
now a favorite of whale-watchers for their playful antics at sea, where
the beasts "” which grow as large as 40 tons "” throw themselves out of
the water.

Humpbacks feed, mate and give birth near shore, making them easy prey for whalers, who by some estimates depleted the global population to just 1,200 before the 1963 moratorium. The southern moratorium was followed by a worldwide ban in 1966...

...The American Cetacean Society estimates the humpback population has recovered to about 30,000-40,000 "” about a third of the number before modern whaling. The species is listed as "vulnerable" by the World Conservation Union.

Licensing Update

Awesome!  Via TJIC:

Ten minutes after finding out I passed the Bar, I changed my
long-running position on licensure, which it turns out is awesome. Not
only does it allow me to collect above market rents"“which lawyers need
because law school is so damned expensive"“but it also keeps those who
can't afford law school or Barbri from practicing law. This is good
because poor people make bad choices anyway, and I know that because
one week in college I ate Ramen noodles for a week, and that's the week
I decided to major in music. Also your average poor person, usually
cursed with some manner of hump or undeveloped siamese twin, will not
fit into a decent suit"¦

In sum, remember when choosing a lawyer that I was the first
one to finish the New York Bar exam, and though I probably didn't get
the highest score, I got the not-highest score the fastest. So if
you've got the choice between an attorney who will show up at 7 AM
sharp, with an obviously freshly dry-cleaned suit, and me, who will be
jogging fifteen minutes behind him while pulling on a shirt and
cleaning up some stubble with an electric razor, remember: the other
guy's smarter, of course, but I'm still competent. And a lot better
rested. Plus I'm not going to judge you for running that red light and
hitting that old lady"“that's what this case is about, right? Or was
that my other client?"“because chances are I nailed two or three myself
on the way over this morning.

More on licensing

Heading for New York

I have not idea how much blogging I will do this week.  I am headed for Manhattan to watch my daughter, who is in the opening act of the Macys Thanksgiving Day Parade.

New Ipod Classic Update

In a couple of posts, I warned readers that I thought there might be problems with the new 80meg and 160meg iPod classics  (generation 6).  On two occasions, I tested units at Best Buy stores (two different cities) and found the menu and scrolling performance to be terrible.  The controls were laggy and slow.

An Apple person wrote me to say that my experience was not universal.  I also noted that people were split on the message boards -- some loved their new iPod and couldn't understand the problem, and others couldn't understand how anyone could miss the scrolling problems.

From this and other evidence, I am now convinced that there were either two different batches with different performance, or there was some early software patch that fixed the problem but stores like Best Buy were not applying the patch to their demo models.  The other day I tried the new iPod Classics at the Apple store and was thrilled with the performance.  The menu scrolled beautifully, perhaps better than generation 5. 

So, I still advise folks to try before they buy, but I now am convinced that the new Classic is a great product.  I bought an 80gig over the weekend.

By the way, I have never been anything but enthusiastic (except perhaps to wish for more memory) about the iPod Touch.

Romney-Care Already in the Red

Romney-care, which looks surprisingly like v1.0 of Hillarycare, is over-budget by $135 million (and counting*) in Massachusetts.  TJIC is stunned.

* must be pronounced in that deep eastern European voice from the early James Bond films, where in the bad guy's lair the PA system kept saying "one minute, and counting."

Regulation is Anti-Competitive

I have frequently quote this Milton Friedman quote about regulation ostensibly being about the consumer, but in reality existing to protect one set of competitors from another:

The justification offered is always the same: to protect the consumer. However, the reason
is demonstrated by observing who lobbies at the state legislature for
the imposition or strengthening of licensure. The lobbyists are
invariably representatives of the occupation in question rather than of
the customers. True enough, plumbers presumably know better than anyone
else what their customers need to be protected against. However, it is
hard to regard altruistic concern for their customers as the primary
motive behind their determined efforts to get legal power to decide who
may be a plumber.

Here is further proof, via Scott Gustafson, right here in Arizona:

Valley tattoo-parlor owners, eager to protect and burnish the reputation of their industry, are calling for state regulation of the tattoo trade. 

Shop owners have teamed up to form the Arizona Tattoo and Piercing Association, and one of the organization's first steps was to meet this week with state legislators who say they now intend to introduce legislation to regulate the tattoo industry... 

"What we heard from the tattoo industry is that they want to be more respected, and unless there is some sort of regulation, shops can exist which will give a bad name to the whole industry," Schapira said. 

He said he intends to introduce legislation to bring regulation to the tattoo industry at the upcoming session of the Legislature. 

Burton-Cahill said she considers the matter "an issue of public health."... 

"This is becoming an increasing trend with the reputable operators," said Will Humble, assistant director of the department. "The majority of the shop owners are doing things in a sanitary way but a handful is not doing everything they can. The bigger members of the industry are trying to make sure those disreputable kinds of places don't give tattooing a bad name."

Here you see it all - ostensibly aimed at the consumer, but in reality aimed at sitting on a few competitors they want out.

Thoughts on Barry Bonds

I really don't like Barry Bonds.   I found his home run chase last summer almost painful, and was happy it was over just to stop hearing about Barry Bonds.

That being said, I am pretty non-plussed by his recent indictment on perjury charges.  I really am deeply concerned about going after high-profile people on perjury charges, particularly ones that are associated with cases where no underlying crime was even prosecuted (Martha Stewart and Bill Clinton also come to mind in this category).

The problem is that these cases get prosecuted incredibly selectively.  The vast, vast majority of people in Bonds situation never get prosecuted, much less have four year investigations.  As a result, it is pretty clear that those who do are selected on some basis having more to do with their profile (Martha Stewart), political animus (Bill Clinton) or just because the person is incredibly unsympathetic (e.g. Bonds).  As evidence for this in Bond's case, where are the similar investigations into McGwire or Giambi?

Tom Kirkendall has a great roundup of posts for those who are more concerned that titillated by Bond's indictment.  Or then there is TJIC's take, which is always, uh, not moderate:

What I find most amazing about cases like this, and the Martha
Stewart thing, is that there's some sort of unstated presupposition
that the state has a right to extract information from people.

Lying to government officials on fishing expeditions isn't just a right; it's a duty.

Maybe They Should Have Tried Fox After All

Though I did not pay any attention to it, apparently the Clinton camp managed to stack the CNN Las Vegas debate doubly or triply in their favor, including having most all the talking head on CNN analyzing the debate be folks who are currently or have in the past been on the Clinton payroll.

Whatever.  I don't think it is any news that the Clintons play the politics game hard and well, though its amazing to me that she is embraced by those who complain about Bush being secretive and power-hungry.

Anyway, this did make me wonder.  The Democratic candidates were up-in-arms earlier this year that a debate (I think this one) was to be hosted by Fox, presumably because Fox is seen as part of the vast right-wing conspiracy.  But given that there were no Republicans at the debate, I wonder if Obama and company now regret this decision.  Because it is almost certain that whatever problems Fox might have, Fox would certainly not have stacked a debate in Hillary's favor.

Analysis of "New" UN Climate Warming

Under
mounting pressure from climate catastrophists to ignore uncertainties
in the science and to produce definitive statements that can be used as
calls for government interventionism, the UN will apparently release a new "warning" this week:

Global
warming is destroying species, raising sea levels and threatening
millions of poor people, the United Nations' top scientific panel will
say in a report today that U.N. officials hope will help mobilize the
world to take tougher actions on climate change.

The report
argues that only firm action, including putting a price on
carbon-dioxide emissions, will avoid more catastrophic events.

Those
actions will take a small part of the world's economic growth and will
be substantially less than the costs of doing nothing, the report says.

For the first time, the UN is trying to
argue explicitly that the cost of CO2 abatement is lower than the cost
of doing nothing.  They are arguing that a cooler but poorer world is
superior to a warmer and richer world.  I am glad they are finally
arguing this point.  Because while we can argue about the truth of how
much the world has warmed and how much is due to man, the UN is DEAD
WRONG on this point.  The cost of aggressive CO2 abatement is far, far
higher than the cost of doing nothing.

The report presumably will be released by UN Secretary-General Ban Ki Moon, who demonstrated his stunning ignorance of climate science, geology, and geography on a recent climate-junket to Antarctica.  Let's take it line by line.

Is man destroying or threatening species?  Absolutely.  Is this threat from CO2 and warming? No, and I have read every inch of the UN IPCC report and you can find no evidence for this proposition.
But saying this rallies the environmental base (the hard core
environmentalists don't really care about poor people, at least when
their interests conflict with animals).  Most of the evidence is that
species thrive in warmer weather, and polar bears have survived several
inter-glaciation periods where the north pole melted entirely in the
summer.

Are sea levels rising?  Yes.  In fact, they have been
rising for at least 150 years, and in fact have been rising steadily
and at roughly the same rate since the last ice age.  We have seen
absolutely no acceleration of the underlying sea level rise trend.
Further, the UN's IPCC does have a forecast for sea level rise over the
next century.  Even using temperature forecasts I consider exaggerated,
the UN does not forecast more than about a foot of sea level rise over
the coming century, only a bit more than what the sea level has risen
over the last 150 years.  This is a great example of the disconnect
between the UN political climate reports and the science underlying
them.  The guys writing the summary know that their report says only a
few inches of sea level rise, so they just say it is rising, and then
let the crazies like Al Gore throw around numbers like 20 feet.

Here is an interesting thought:  If I say the sea levels
will rise 0" over the next 100 years, the UN will call me out and say I
am wrong.  However, when Al Gore said sea levels will rise 20 feet in
his movie An Inconvenient Truth, no one at the UN or the IPCC
called him out, despite the fact that my forecast was only a few inches off from theirs and his was 19 feet off the mark.

And of course, there are the poor.  The number one biggest
losers in any effort to abate CO2 emissions will be the poor.  In
wealthy countries like the US, the poor will be the hardest hit by $10
or even $20 gas prices that would be necessary to rolling CO2
production back to 1990 levels.  In the third world, nearly a billion
people just starting to emerge from poverty will have no chance of doing so if their economies are hamstrung with CO2 limits.  The poor will be devastated by aggressive CO2 limits.

Weighed against this economic disaster would be, what?
How would rising world temperatures hurt the poor?  Well, its not at
all clear.  A foot of sea-level rise is very unlikely to hurt many poor
people, though it might inconvenience a few rich owners of beach-front
luxury homes.  Here is a clarifying question I often ask people --
would you rather fifteen Atlantic hurricanes each year, or sixteen
hurricanes each year and Carribbean economies that are twice as rich
and therefore have twice the resources to handle hurricanes.  This is
the colder and poorer vs. warmer and richer choice.  We see this in Bangladesh today.  Why do orders of magnitude more people die in Bangladesh cyclones than class 5 hurricanes on the US shore?  Because they are poor, not because of anything having to do with global warming.

It is often claimed that global warming will cause
droughts, but in fact warmer world temperatures will vaporize more
water in the atmosphere and should net increase rain, not drought.  And
many of the farmers in the northern hemisphere would enjoy longer
growing seasons and thereby more food production.

Glaciers
and ice caps are melting at a rapid rate; animals and plants are
shifting their range to accommodate warmer air and water; and planting
seasons are changing, the report said.

Yes, land-based ice is melting in the Northern Hemisphere.  This is 15% of the world's ice.  85% of the world's ice is in Antarctica, which is increasing.
Seriously.  I know you don't believe this if you trust the media, but
the ice that is melting in Greenland is tiny compared to the ice that
is increasing at the South Pole.  In fact, the IPCC gets most of its
prjected sea rise from thermal expansion of warmer oceans, not from ice
melting.  And don't you love the "planting seasons are changing."  That
sounds like its scary, or something, until you recognize the truth is
that planting seasons are changing, becoming longer and more beneficial to food production!

On many occasions, I have discussed the bad science that
goes into these apocalyptic forecasts.  But that science is of top
quality compared to the economics that must have gone into the
statement that:

The most
stringent efforts to stabilize greenhouse gases would cost the world's
economies 0.12 percent of their average annual growth to 2050, the
report estimates.

This is absolute, unmitigated crap.
Though I have not seen specifics in this report, the UN's position has
generally been that emissions should be rolled back to 1990 levels (the
target embodied in the Kyoto treaty).  Such a target implies reductions
of more than 20% from where we are today and well over 50% from where
we will be in 2050.  These are enormous cuts that cannot be achieved
with current technology without massive reductions in economic growth.
The world economy is inextricably tied to the burning of fossil fuels.
And, unlike ancillary emissions like SO2, CO2 emissions cannot be
limited without actually reducing carbon combustion since it is
fundamental to the combustion chemistry.  Even supporters of
legislation such as the Bingaman-Specter bill admit that as much as a
trillion dollars will need to be spent to reduce global temperatures
about 0.13C.  And that is a trillion for the first tenth of a degree --
the law of diminishing returns means that each additional tenth will
cost more.

Lets look at history as our guide.  Most of the European
countries and Japan signed onto the Kyoto Treaty to reduce emissions to
1990 levels.  They have taken many expensive steps to do so,
implemented many more controls than in the US, and have gas prices as
much as double those in the US.  During the period since 1990, most of
these countries, unlike the US and China and India, have been in a deep
and extended economic recession, which tends to suppress the growth of
fossil fuel consumption.  Also, the CO2 numbers for countries like
Russia and Germany benefit greatly from the fall of the old Communist
Block, as their 1990 base year CO2 numbers include many horribly
inefficient and polluting Soviet industries that have since been shut
down.  And, given all this, they STILL are going to miss
their numbers.  These countries have experienced reductions in economic
growth orders of magnitude greater than this 0.12 percent quoted by the
UN, and that still is not enough to reduce CO2 to target levels.  Only
outright contraction of the world's economy is going to suffice [note:
A strong commitment to replacing coal plants with nuclear might be a
partial solution, but it will never happen because the people calling
for CO2 controls are the same ones who shut down our nuclear programs.
Also, technological change is always possible.  It would be awesome if
someone found a way to roll out sheets of efficient solar cells like
carpet out of Dalton, Georgia, but that has not happened yet.]

The UN has gotten to such low cost estimates for their
government controls because they have convinced themselves, much like
the promoters of building football stadiums for billionaire team
owners, that they will get a huge return from the government CO2
controls:

"There is high
agreement and much evidence that mitigation actions can result in
near-term co-benefits, for example improved health due to reduced air
pollution, that may offset a substantial fraction of mitigation costs,"
said the report, which summarizes research over five years of more than
2,000 of the world's top climate-change scientists...

The U.N. panel embraced the arguments of British economist
Nicholas Stern, who concluded last year that the cost of taking tough
measures to curb pollution will be repaid in the long run.

Nicholas
Stern?  Haven't we heard that name before?  Why, yes we have.  He is
the man that said that all of the world's climate problems would go
away if we forced all the western economies to look just like India.

Mr
Stern, the former chief economist of the World Bank, sends out a very
clear message: "We need to cut down the total amount of carbon
emissions by half by 2050." At current levels, the per capita global
emissions stand at 7 tonnes, or a total of 40-45 gigatonnes. At this
rate, global temperatures could rise by 2.5-3 degrees by then. But to
reduce the per capita emissions by half in 2050, most countries would
have to be carbon neutral. For instance, the US currently has, at 20-25
tonnes, per capita emissions levels that are three times the global
average.

The European Union's emission levels stand at 10-15
tonnes per capita. China is at about 3-4 tonnes per capita and India,
at 1 tonne per capita, is the only large-sized economy that is below
the desired carbon emission levels of 2050. "India should keep it that way and insist that the rich countries pay their share of the burden in reducing emissions," says Mr Stern.

Which,
by the way, is exactly my point.  I very much hope Mr. Stern continues
to make this clear in public.  One of the ways catastrophists support
their cause of massive government interventionism is to try to portray
the answer as little cutsie actions, like your 5-year-old helping with
the recycling
.  This is not what is require to meet these targets.
What is required is ratchet down the US economy until we are all about
as wealthy as the average Indian.  I guess that would at least take
care of the outsourcing "problem."

One of the ways that the UN gets away with this is that no
one has the time to read the detailed scientific report, and so
reporters rely on the summaries like these.  Unfortunately, the same
people who write the scientific sections are not the people who write
the summaries.  Careful language about uncertainties, which are still
huge, in the science are replaced by summaries written by politicians
that say:

The near-final draft,
approved Friday by representatives of more than 140 governments meeting
in Valencia, Spain, said global warming is "unequivocal" and said man's
actions are heading toward "abrupt or irreversible climate changes and
impacts."...

"This will be viewed by all as a definitive report. It is
the blueprint for the Bali talks," said Sen. John Kerry, D-Mass., who
will be at the Indonesian U.N. meeting beginning Dec. 3 as part of a
U.S. senatorial delegation.

Another
technique used by the UN that we see in play here is their willingness
to cherry-pick one author that follows the UN narrative to refute a
whole body of science that is contrary to the narrative.  Thus, the UN
latched onto Michael Mann's hockey stick to overturn a consensus that
there was a Medieval warm period, and now they have latched onto
Nicholas Stern to overturn the opinion of, approximately, every other
economist in the world who think CO2 mitigation will be really
expensive.

As always, you are encourage to view my movie What is Normal:  A Critique of Catastrophic Man-Made Global Warming Theory or check out my book (free online) called A Skeptical Layman's Guide to Anthropogenic Global Warming.

By the way, in the title I put "new" in quotes.  Here is why.  I just read a presentation by Dr. Richard Lindzen from 1992 that shows that catastrophists were declaring the debate "over" as early as 1989, before any real research had even been performed:

By early 1989, however, the popular media in Europe and the United States were declaring that "all scientists'' agreed that warming was real and catastrophic in its potential.
...
In the meantime, the global warming circus was in
full swing. Meetings were going on nonstop. One of the more striking of
those meetings was hosted in the summer of 1989 by Robert Redford at
his ranch in Sundance, Utah. Redford proclaimed that it was time to stop research and begin acting.
I suppose that that was a reasonable suggestion for an actor to make,
but it is also indicative of the overall attitude toward science.
Barbara Streisand personally undertook to support the research of
Michael Oppenheimer at the Environmental Defense Fund, although he is
primarily an advocate and not a climatologist. Meryl Streep made an
appeal on public television to stop warming. A bill was even prepared
to guarantee Americans a stable climate

This Could Easily Be Said About Phoenix Light Rail

Tom Kirkendall observes that this could have been written about Houston light rail.  I would add that it also could have easily been written about Phoenix light rail, which I have criticized here and here and here.  And heavy rail? Don't get me started.

Beyond these impressions, Tom Rubin observes that VTA has "the worst
operating statistics fo any American transit operator." The reason for
this, he says, is that San Jose "” being built mostly after World War II
"” is one of the most spread-out urban areas in the country. Not only
are people spread out, but jobs are spread out, with no job
concentrations anywhere.

This makes large buses particularly unsuitable for transit because
there is no place where large numbers of people want to go. So what was
VTA's solution when its bus numbers were low relative to other transit
agencies? Build light rail "” in other words, use an expensive
technology that requires even more job concentrations.

Now it has one of the, if not the, poorest-patronized light-rail
systems in America. So what is its solution? Build heavy rail, a
technology that requires even more job concentrations.

This is an interesting factoid from another Anti-Planner post:

The amazing thing to the Antiplanner is that anyone would take this
proposal seriously. The average urban freeway lane costs about $10
million per mile. The average light-rail line costs about $50 million
per mile and carries only a fifth as many people. Seattle's proposed
lines were going to cost $250 million per mile, making then 125 times
more expensive at moving people than a freeway lane.

Very Interesting Observation

From Tyler Cowen:

The NIH works as well as it does because the money is mostly protected
from Congress. It is not a success which can easily be replicated. The
more money is at stake, the more Congress wants to influence
allocation. We should guard this feature of the system jealously and
try to learn from it. If we can.

I had not ever thought about it this way, but this is probably a correct observation about government:  The more money in a program, the more likely it is that Congress will want to direct that money to take political credit for it and reward their cronies, and therefore the more likely the program is to fail.

Does Anyone Really Believe This?

James Pethokoukis argues that we might have spent a lot of the $1.3 trillion cost of the Iraq war on containment of Iraq had we fought the war.

I will admit I have not seen the studies, but I declare right now that there is NO WAY.  If we really would have spent $150 billion a year containing Iraq in absence of a war, we should be spending similar magnitudes today on other similar regimes on which we have chosen not to declare war, like Iran, North Korea, Venezuela, etc.  But demonstrably we are not.  One might argue that oil prices would be lower, I guess, but one could also argue that the post-9/11 recession would not have been as deep without a war.  I am sure there is a broken window fallacy in here somewhere.  This reminds me nothing so much as the tortured economic studies that purport to show a gullible populace that it makes sense to build a billion dollar stadium for the hapless Arizona Cardinals because the city will make it all back in future revenues.  Sure.

I am not going to argue the justifications for the Iraq war here.  What I will say is that folks who have enthusiastically supported the war should understand that the war is going to have the following consequences:

  1. In 2009 we will have a Democratic Congress and President for the first time since 1994.
  2. The next President will use the deficits from the $1.3 trillion in Iraq war spending to justify a lot of new taxes
  3. These new taxes, once the war spending is over, will not be used for deficit reduction but for new programs that, once established, will be nearly impossible to eliminate
  4. No matter what the next president promises to the electorate, they are not going to reverse precedents for presidential power and secrecy that GWB has established.  Politicians never give up power voluntarily.  [if the next president is Hillary, she is likely to push the envelope even further].  Republicans are not going to like these things as much when someone of the other party is using them.

Great View of Eminent Domain

This video, from Reason, is the kind of work I wish I had the time and resources to produce.  This particular episode is on using eminent domain for economic redevelopment.  Very well done.

Update: Watching the city council meeting around 8 minutes into the video is depressing.  Folks are trying to defend their property, but the only argument they can use is to try to convince the council there is more public good in their use than the proposed new use (luxury condos).  I am depressed that this is the argument they have to use.  I would love to see someone be able to just say "its mine, it does nobody else any good, but who cares?  You can't take it and give it to someone else, period."

Improving My View of Ralph Nader

For much of my adult life, Ralph Nader was my least favorite living Princeton alum*.  But Eliot Spitzer may be challenging for the title.  Sure, I never really liked Spitzer when he was at Princeton, but I never really liked any of the student government types, as evidenced by the fact that I led a mass-mooning of one governing council meeting (yes, I know, you are shocked that this sophisticated commentator could have been so immature).  Besides, Spitzer was the butt of one of Princeton's great jokes and works of performance art, when he was defeated by the Antarctic Liberation Front.

But since his tenure as AG and now governor of New York, the guy has turned from an irritating joke to a real threat to freedom.  His abuse of the AG job for personal aggrandizement is legend, and, after having been given a free pass by the press in that job, he is finally being cornered for various ethical violations. 

So it is with great satisfaction that I read today that Spitzer was forced to back off his plan to tax out of state Internet sales, abandoning his unique view that an affiliate program created a corporate presence in-state.

Update:  A Spitzer roundup of sorts at Reason.

When They Finally Do the Study the Right Way

Over the last few years, there has been a lot of arguing back and forth about income mobility.  Typically, folks, particularly on the left, look at changes in median incomes and declare that since median incomes aren't moving much, there is not income mobility.  I have criticized this approach to the problem on a number of occasions.  For example, I have argued that median income numbers are skewed downwards because tens of millions of low-skill new immigrants have entered the job market over the last several decades.  As I wrote here,

If you really want to know what the current median wage is on an apples
to apples basis back to 1970, take the current reported median wage and
count up about 10 million spots, and that should be the number -- and
it will be much higher.

What you really have to do is take the same people, and follow their progress through tax returns or whatever data is available.  What this type study finds, time and again, is that income mobility remains high in this country.  And what happens, time and again, is the media and politicians ignore the study in favor of the more flawed approaches that support their narrative better.

Well, the study has been performed again, and the results are the same:  Income mobility remains high in this country, especially for the poorest 20%.

Incomechangesopinionjournal

They say a picture is worth a thousand words, and in one chart 60% of the hot air in the Democratic Presidential debates is refuted.

By the way, it is worth noting the drop in income of the top 1%, because it helps to point out a flaw in the usual income distribution numbers we see.  In 2002, I showed no income on my 1040 (because I was starting a new business).  In the income distribution numbers for 2002, my family and I showed up in the bottom 20%, living on less than a $1 a day.  Of course, that is an absurd characterization.  On the opposite end of the scale, imagine a small business owner plugging along making $80,000 or so a year, comfortably middle class, and then in one year sells his business for $1 million.  In that year's statistics, he is rich.  The next year when his capital gains go away, it looks like he has gotten poorer, when no such thing happened.

Of course, some are still struggling, though my suspicion is that this is less related to structural issues in the economy or availability of opportunity than with cultural issues.

Not Surprising in the Least

Via Tyler Cowen:

The Asian
Development Bank presented official survey results indicating China's
economy is smaller and poorer than established estimates say. The
announcement cited the first authoritative measure of China's size
using purchasing power parity methods. The results tell us that when
the World Bank announces its expected PPP data revisions later this
year, China's economy will turn out to be 40 per cent smaller than
previously stated......The number of people in China living below the
World Bank's dollar-a-day poverty line is 300m - three times larger
than currently estimated.

Well, this is a bit sad, as I would hope everyone likes seeing people emerge from poverty**.  But it is really not surprising.  Strongly state-run economies are notoriously hard to measure from the outside, and westerners systematically overestimated the size of the economy of the old Soviet Union.

**  I make this statement because I am an optimistic guy full of confidence in the generally good intentions of mankind.  Because if I were not such a person, and actually judged people by their actions, I would come to the conclusion that a lot of people DO NOT want people in countries like China to emerge form poverty.  Trade protectionism, apologias for looting dictators like Castro or Chavez, anti-globalization riots, anti-growth initiatives, and calls for rollbacks in fossil fuel consumption all share in common a shocking disregard for people trying to emerge from poverty -- often from folks on the left who purport to be the great defenders of the poor.  I tried to explain the phenomenon before, at least among self-styled "progressives':

Progressives do not like American factories appearing in third world
countries, paying locals wages progressives feel are too low, and
disrupting agrarian economies with which progressives were more
comfortable.  But these changes are all the sum of actions by
individuals, so it is illustrative to think about what is going on in
these countries at the individual level. 

One morning, a rice farmer in southeast Asia might faces a choice.
He can continue a life of brutal, back-breaking labor from dawn to dusk
for what is essentially subsistence earnings.  He can continue to see a
large number of his children die young from malnutrition and disease.
He can continue a lifestyle so static, so devoid of opportunity for
advancement, that it is nearly identical to the life led by his
ancestors in the same spot a thousand years ago.

Or, he can go to the local Nike factory, work long hours (but
certainly no longer than he worked in the field) for low pay (but
certainly more than he was making subsistence farming) and take a shot
at changing his life.  And you know what, many men (and women) in his
position choose the Nike factory.  And progressives hate this.  They
distrust this choice.  They distrust the change.  And, at its heart,
that is what the opposition to globalization is all about - a deep
seated conservatism that distrusts the decision-making of individuals
and fears change, change that ironically might finally pull people out
of untold generations of utter poverty.

Hot Product

Yoggie makes a Linux computer that performs 12 network security functions, including firewall and filtering. The cool part is they put the whole thing on a USB key.

8th Grade, 1895

I thought this was pretty interesting. It purports to be (and I have no reason to doubt that it is) an 8th grade final exam given in 1895 in Salina, KS.  I have seen it in the context of "gee, look how much worse our schools are" and to some extent that is unfair.  Sure, I think we all can get a gut feel from the test that expectations on students were a bit more unyielding and rigorous back then. One gets the sense that the Salina school district has not had to defend the test in court against charges that it discriminates against ... whatever and that they would not really understand the current public mantra that self-esteem should somehow trump learning and achievement.

But the fact that you and I can't answer a lot of the questions doesn't really mean much. Some of it would be hard to pass because it asks for frameworks we don't necessarily ascribe to today.  For example, it asks for the epochs into which US history is divided.  I have no idea what such epochs would be and in fact they are probably irrelevant given we have twice as much history as a country today as in 1895.  And it takes a minute to remember that when they say the "rebellion" they are probably talking about the Civil War.  And as to "orthography,"  I am not losing much sleep at night over not being able to "Give four substitutes for caret 'u'."

In general, the test reflects a shift in teaching from a lot of technical memorization to the more conceptual.  Kids who passed this test in 1895 could probably spell oddball words and fill out a map better than my kids, but I would be curious how well they would do on a five paragraph persuasive essay, something my eighth grader spends a lot of time on. 

Math is one area where my kid's education would blow this stuff away.  The math on this 1895 test is pretty tailored to the needs of a small farming town:

1. Name and define the Fundamental Rules of Arithmetic.

2. A wagon box is 2 ft. deep, 10 feet long, and 3 ft. wide. How many
bushels of wheat will it hold?

3. If a load of wheat weighs 3942 lbs., what is it worth at 50 cts.
per bu., deducting 1050 lbs. for tare?

4. District No. 33 has a valuation of $35,000. What is the necessary
levy to carry on a school seven months at $50 per month, and have
$104 for incidentals?

5. Find cost of 6720 lbs. coal at $6.00 per ton.

6. Find the interest of $512.60 for 8 months and 18 days at 7
percent.

7. What is the cost of 40 boards 12 inches wide and 16 ft. long at
$20 per m?

8. Find bank discount on $300 for 90 days (no grace) at 10
percent.

9. What is the cost of a square farm at $15 per are, the distance
around which is 640 rods?

10. Write a Bank Check, a Promissory Note, and a Receipt.

But by the end of eight grade my kids will have had two years of algebra, not necessarily because they are smarter than kids in 1895, but because perceived needs change.  My kids are more likely to need complex math for advanced science and technical degrees than they are going to need to be able to figure out how many bushels of grain will fit in the silo.  Further, where is the science on the test?  How about a second language? 

My kids go to a private school, so maybe public school parents have a different perspective.  There are a lot of reasons to criticize public schools today, but I don't think this test gives us much insight into them.

The Government Trap

From the NY Times via Maggies Farm:

The rescue of the
Florida Everglades, the largest and most expensive environmental
restoration project on the planet, is faltering.

Seven years into
what was supposed to be a four-decade, $8 billion effort to reverse
generations of destruction, federal financing has slowed to a trickle.
Projects are already years behind schedule. Thousands of acres of
wetlands and wildlife habitat continue to disappear, paved by
developers or blasted by rock miners to feed the hungry construction
industry.

The idea that the federal government could summon the
will and money to restore the subtle, sodden grandeur of the so-called
River of Grass is disappearing, too.

If, forty years ago, individuals who cared about the Everglades had banded together with private money, they could have bought up and preserved huge tracts of land around the current National Park.  Instead, as so many activists do today, rather than trying to rally private action they lobbied the government to do something about it.  Once the ball was thrown into the Feds' court, all incentive for private action disappeared, and as is so often the case, the Feds bungled their way $8 billion to little effect.

I Guess Its Not Working Very Well

From my daily email from the Goldwater Institute:

In only five years, the Arizona Health Care Cost Containment System budget is slated to more than double.

When double-speak government agency names meet reality!