Tuesday, February 28, 2006

A song for Mardi Gras

Perhaps not the most apropos for the occasion, but I've really been joying Sting's "The Dream of the Blue Turtles" album.

There's a moon over Bourbon Street tonight
I see faces as they pass beneath the pale lamplight
I've no choice but to follow that call
The bright lights, the people, and the moon and all
I pray everyday to be strong
For I know what I do must be wrong
Oh you'll never see my shade or hear the sound of my feet
While there's a moon over Bourbon Street

It was many years ago that I became what I am
I was trapped in this life like an innocent lamb
Now I can only show my face at noon
And you'll only see me walking by the light of the moon
The brim of my hat hides the eye of a beast
I've the face of a sinner but the hands of a priest
Oh you'll never see my shade or hear the sound of my feet
While there's a moon over Bourbon Street

She walks everyday through the streets of New Orleans
She's innocent and young from a family of means
I have stood many times outside her window at night
To struggle with my instinct in the pale moon light
How could I be this way when I pray to God above?
I must love what I destroy and destroy the thing I love
Oh you'll never see my shade or hear the sound of my feet
While there's a moon over Bourbon Street

Monday, February 27, 2006

I'll be back in a few days

After a quiet and introspective lunch, which was assisted by a double Scotch, at a nice Italian restaurant around the corner, I have concluded that I need a little rest so I can collect myself. The Eidelblog will resume regular posting hopefully in a few days. Be safe, everybody.

Song for the day

I was listening to "The Best of Sting and the Police" earlier. As if I have the gift (or curse) of seeing the future, or perhaps I was correct in my pessimism, I put "Seven Days" on repeat for a long while.

Monday, I could wait till Tuesday
If I make up my mind
Wednesday would be fine
Thursday's on my mind
Friday'd give me time
Saturday could wait
But Sunday'd be too late

Ah well. The best laid plans of mice and men gang aft agley.

Trusting Hamas

Hamas now says it wants a "political truce" with Israel, but that does not include ever recognizing Israel's right to exist. With Hamas' track record, if Israel agreed to any of these concessions, we can expect the "long-term" truce to last a few days at most.
Haniyeh has demanded that Israel make a full withdrawal from lands captured in the 1967 Mideast war, release Palestinian prisoners and the return of several million Palestinian refugees and their descendants to Israel.
Israel has rightfully rejected these. Olmert will most likely continue Ariel Sharon's policy of making certain concessions (like withdrawing from the Gaza Strip) for peace, but hopefully he nor any successors will naively believe that anti-Israel Arabs, especially Palestinian terrorists, will ever stop their violence until Israel is completely destroyed.

In the case of Palestinian prisoners, why should Israel release murderous thugs? So they can be free again to break into more Israeli settlements and murder women and children? So they can be free again to launch more missile attacks? So they can be free again to take the next step and blow themselves up for Allah? Releasing these prisoners would in fact kill more Israelis than the suicide bombings and other attacks in "protest" of the Palestinians' incarceration.

And finally, as I've pointed out before, centuries of Arab neglect ruined much of the Holy Land's soil. When the Jews started returning in the 19th century, they planted trees and performed other Bible-based cultivation that restored the land. Then the Arabs suddenly wanted the land back, when before it was desert that they didn't care was "retaken" by Jews.

U.S. to cede full administrative control of its southern border to Mexico

(Updated at 1:54 a.m.)

In the news:
At a press conference Sunday afternoon, President Bush announced that he and Mexican President Vicente Fox have reached an agreement that will completely cede administrative control of the southern U.S. border to Mexican authorities.

In a pre-emptive counter to Democrats' expected criticism, Bush made specific assurances that the deal would save the U.S. money while having no detrimental effect on border security. "This is win-win for both the United States and Mexico. The same American border agents will continue to report to work every day. Only administrative functions will be taken over by Mexican citizens, and they'll be subject to the same scrutiny by the Department of Homeland Security."

Bush's former Chairman of the Council of Economic Advisers, Gregory Mankiw, attended to cite the benefits of free trade. Mankiw was heavily criticized during the 2004 presidential election campaign for defending the outsourcing of American jobs to foreign nations as beneficial. Mankiw explained today, "Mexican officials on our side will be paid the same as their counterparts on the other side. Those will be new and well-paying jobs for the Mexicans, and that's actually good for us. NAFTA and other Free Trade Agreements have empirically demonstrated that we lose some jobs at first, but because our trading partners suddenly have higher incomes, they can buy more goods and services from us. Overall, we actually get more jobs that pay even more."

As expected, Democrats launched an all-out attack on what Sen. Charles Schumer, D-NY, claimed "is a self-created danger to U.S. national security." After the introduction to his regular Sunday press conference, he yielded to Sen. Hillary Clinton, D-NY, to make the main criticism for the Democratic Party. She accused President Bush of forging a deal that, if anything, would open up the border to increased illegal immigration. Via video teleconferencing, New Mexico Gov. Bill Richardson appeared angry, shaking his fist as he blasted the agreement. "This will only encourage more drug trafficking across our southern border, and more Mexican gang violence against our border towns. And this President claims to stand for national security?"
No such press conferences took place, actually. This is only a satire I wrote tonight to illustrate a few points about the Bush Administration's deal to permit Dubai Ports World, a company directly owned by the United Arab Emirates, to assume administrative control over U.S. ports in New York, New Jersey, Philadelphia, Baltimore, Miami and New Orleans.

I first read about it on Michelle Malkin's blog on the 16th, when she referenced a New York Sun article. Mainstream media was quiet for the first days or two after the deal's approval. As Michelle noted, most news outlets were too busy talking about Dick Cheney's accidentally shooting his friend while hunting. Meanwhile, a very real threat to national security began brewing.

Maybe I'm still more conservative than I thought. Last June, because of socialists among conservative ranks, I stopped calling myself "a conservative with libertarian leanings" or "a libertarian conservative," and I began drifting toward actual libertarianism. Yet I still believe "national security" is a very real concept we must preserve. Borders matter, not because of trade, but because, to put it simply, there are a lot of bad guys out there who'd love nothing better than to sneak in and blow ourselves up.

We can accept that our lives are ultimately in God's hands. That still doesn't mean I won't lock my door at night, or take measures to protect myself from assailants. My faith is strong, but I'm not going to tempt God by asking for a legion of angels when I ought to be able to care for myself. I find it a very bad, very frightening idea to let Dubai Ports World possess any responsibilities for our ports, even if "only" in an administrative capacity. So I differ from the libertarians with whom I otherwise side much of the time, and some conservatives too. Real conservatives, I should say, not the prevalent conservatives who believe in a combination of Big Government and Big Brother Government.

Our friend Josh Hendrickson supports the deal. I greatly respect Josh and his opinion but must disagree with his "reasons not to worry." I do agree completely with the Wall Street Journal op-ed that Josh linked to, which accuses Democrats of opposing the port deal for political reasons, not because they actually care about national security. Too true. For the same reason, Hillary now acts like a conservative when it comes to illegal immigration, and Democrats have been trying to reinvent themselves as "fiscally responsible" while saying we must wean ourselves from foreign oil. I can't find it offhand, but I think it was Power Line who recently pointed out that Democrats have opposed any sort of racial profiling -- until now. It's nothing but their typical hypocrisy, in other words, that they're suddenly worrying about an Arab country gaining some control over our ports, when since 9/11 they've been the main opponents of closer screening of Arabs and Muslims.

Also via Josh, I read this New York Times article that points out, "The gaping holes in security at American ports have little to do with the nationality of who is running them." That may be so, but if the ports are under American citizens' control, the authorities responsible have an automatically greater incentive to correct those inadequate security measures, and to scrutinize personnel more closely. Why? Because the spirit of nationalism recognizes that American citizens' safety is a very real, albeit non-monetary benefit. Nationalism may have negative connotations today, but it shouldn't be: there's nothing wrong with loyalty to one's country. And if American citizens make a mistake, very well, we made a mistake. At least we'll know who did it, and we can take responsibility for it ourselves. It's better to kick ourselves in the behind because we screwed up directly, not because we entrusted the wrong people.

Now, regarding the free trade aspect. I'm a major opponent of protectionist economics, not just a Bush-type "free-trader" who demands "fair trade," which is not real free trade. "Free Trade Agreements" are freer trade, i.e. more liberalized trade, but the very existence of any regulations means that the trade isn't truly "free." I'm a Walter Williams-type free-trader who agrees that we shouldn't engage in protectionism even in retaliation for other nations' trade practices. The very thing that encourages trade is that one side has a comparative advantage over the other, allowing it to provide certain goods and services more efficiently.

Whether it's between countries or individuals, we trade because not doing things ourselves, not having control over the production and resulting supply, is worth the money saved. However, we must not consider trade strictly in terms of money. In my undergraduate study of economics, I was most influenced by Dr. Sanford Ikeda. As I've said before, he's an Austrian economist's Austrian economist. I do not see my Austrian training as contradictory with my "nationalist" desire for security at American ports that is overseen strictly by Americans, because it is first and foremost for the safety of Americans. Austrian economics is a major proponent of the idea that benefits and costs are not always monetary, is it not? Well, money is the only issue, not just the main one, if the ports are run purely as a business, particularly by foreigners who may not fundamentally give a damn about American citizens' well-being.

If we do not consider potential costs of who is supplying a particular good or service, we might as well outsource our military to India. Certainly we can hire a few million Indians who are intelligent and physically fit, who will serve in our armed forces for a fraction of what Americans presently earn...right? Why don't we just hire 500,000 Indians to fight for us in Iraq? Could it be because, considering full costs and benefits, beyond just money, our own people are better? Conversely, I was telling a friend the other day that admittedly we trade with China knowing that part of the money goes to expanding its military, but at present the benefit to the U.S. is worth the small potential of actual war. I think China doesn't want actual war with the U.S., only a stalemate like the USSR achieved for a while. Let's also not forget that China needs Sino-U.S. trade just as much, perhaps more, because it needs U.S. Treasury bonds as collateral for its insolvent banking system.

Returning to Dubai World Ports and our ports' security, I say that the potential detriment of a single terrorist slipping through a tiny crack, no matter how remote the possibility, far outweighs any monetary savings. Are the operations efficient for us, or for terrorists who might gain an opportunity somewhere? All it might take is one Human Resources "error," purposeful or otherwise, in hiring one person who can commit severe sabotage, let alone sneak in a so-called "dirty bomb." The same people may still be showing up to work, at least for now. Can we guarantee they'll never be replaced by terrorists? Can U.S. Customs and the Coast Guard guarantee that a DPW executive might not pull strings, all the while pretending he's our friend? It's been said before, and very well, that terrorists need only be successful once out of many times. We, though, cannot afford to miss.

That the Department of Homeland Security will still retain ultimate oversight does not comfort me. DHS is fundamentally a joke, to put it bluntly. This is the same Department whose mandated random screening that frisks elderly grandmothers at airports, whose airport screeners are caught every so often stealing from passengers' luggage, whose agents crack down on the wrong immigrants (the peaceful ones who only want to come here to work versus the welfare state moochers, not to mention the drug dealers who are sent to revolving-door prisons).

James Glassman brushed off the fact that two of the 9/11 hijackers were from the UAE, citing Richard Reid, Jose Padilla and Timothy McVeigh. That's fine, but the probability of a potential terrorist/saboteur getting into U.S. port operations he shouldn't be in becomes greater when a Muslim nation-owned company is in control, even if just administratively or in ownership. Haven't we learned over the last three decades that Muslim terrorists tend to lie very low until they strike, or worse, talk nicely while they work against us? When will we learn that, statistically speaking, terrorists are more likely to come from certain countries than others?

When someone can demonstrate that just one Christian, Jew, Buddhist, Hindu or other non-Muslim was involved in the 1972 massacre of Israeli athletes, the 1983 attack on U.S. Marine barracks in Beirut, the 1985 hijacking of Achille Lauro (and murder of Leon Klinghoffer), the 1988 bombing of Pan Am Flight 103, the 1993 attack on the World Trade Center, the 1998 attacks on the U.S. embassies in Africa, the 2000 attack on the USS Cole, and the 2001 terrorist attacks, I'll reconsider my stance on the deal. Yes, I'm aware of several decades of Catholic-Protestant violence in Ireland, and what Timothy McVeigh did, but Islamic terrorism is far more prevalent. Statistically speaking, a terrorist incident is far more likely to be perpetrated by a Muslim, so it's sensible when a fundamentally Muslim-owned company suddenly acquires administrative control of our ports. It's only prudent when we've been attacked repeatedly by Muslim terrorists, and when they've promised further attacks.

But my objection isn't even a matter of what some call "anti-Muslism sentiment" or even "racism." I had no idea that the "Peninsular & Oriental Steam Navigation Co." (which is being bought out by Dubai Ports World) that currently oversees the administration of those U.S. ports is Brit-owned. That shouldn't be permitted either. There's a reason we require U.S. citizenship to hold federal office, and natural-born U.S. citizenship as a very specific, Constitutionally mandated requirement for the presidency: loyalty is a very desirable quality.

We might lose out by not having the very best minds as representatives in our various levels of government, and merely for the fact that they're foreigners, but that detriment is better than even the slightest risk of someone whose loyalty may not be 100% to the United States and its Constitution. Granted, we have a lot of candidates who do not respect nor follow the Constitution, but if these supposedly intelligent and well-meaning American citizens do not, how much worse could non-Americans be? They have no incentive.

Call me xenophobic, but I'll say bluntly that only an American-owned company, and one put through only the highest scrutiny, should be allowed any degree of authority over our ports. While that cannot guarantee a love for this country, statistically it has a far greater probability with American-controlled operations.

One thing I read in the news but haven't seen other bloggers pick up on. My apologies if anyone has. The United Arab Emirates donated $100 million to Katrina relief efforts, four times as much as everyone else combined, yet the Bush Administration denies that had anything to do with securing the ports deal. As Captain Kirk said ever so dryly in Star Trek VI: "Right." The more I read about the background of this deal, the more I see the dealings as just dirty.


Friday, February 24, 2006

An alternative energy source that really stinks

A couple of days ago, I came across this article about a "crappy" way to produce methane.
S.F. Examines Power of Dog Droppings

SAN FRANCISCO Feb 21, 2006 (AP)— City officials are hoping to harness the power of dog doo. San Franciscans already recycle more than 60 percent of their garbage, but in this dog-friendly town, animal feces make up nearly 4 percent of residential waste, or 6,500 tons a year nearly as much as disposable diapers, according to the city.

Within the next few months, Norcal Waste, a garbage hauling company that collects San Francisco's trash, will begin a pilot program under which it will use biodegradable bags and dog-waste carts to pick up droppings at a popular dog park.

The droppings will be tossed into a contraption called a methane digester, which is basically a tank in which bacteria feed on feces for weeks to create methane gas.

The methane could then be piped directly to a gas stove, heater, turbine or anything else powered by natural gas. It can also be used to generate electricity.

Methane digesters are nothing new. The technology was introduced in Europe about 20 years ago, and more than 600 farm-based digesters are in operation there. Nine are in use on California dairy farms, and chicken and hog farms elsewhere in the United States also use them.

Neither Norcal Waste spokesman Robert Reed nor Will Brinton, a Maine-based recycling and composting consultant, knew of anyone in the United States who is using the $1 million devices to convert pet waste to energy. But Brinton said some European countries process dog droppings along with food and yard waste.

"The main impediment is probably getting communities around the country the courage to collect it, to give value to something we'd rather not talk about," Brinton said. "San Francisco is probably the king of pet cities. This could be very important to them." ...

Some experts believe methane digestion must become more attractive economically before it gets popular. Landfill space is relatively cheap, and natural gas and electricity also remain fairly inexpensive....
It's highly doubtful that dog poop and other radical forms will ever be economical unless traditional fossil fuels become too expensive. With the human labor and million-dollar technology required to collect the animal waste, and the time , we're better off using regular, plentiful natural gas.

But the biggest problem is that San Francisco's government is willing to throw people's hard-earned dollars into a more expensive source of energy. Democrats are suddenly the party that continuously cries for mythical "energy independence," but both they and President Bush support massive subsidies for alternative fuel industries: inefficient ethanol whose subsidies benefit only corn growers, and wind and solar energy that only socialists think are worthwhile. There's a very good reason we don't use any of these sources: they're too expensive when we have traditional energy sources to fall back upon.

Once again, the free market is the only answer: if government ceases all subsidies, including special tax incentives that favor one technology over another, and regulatory burdens that unfairly target a specific industry, then new sources can compete fairly with traditional fossil fuels. They can't, though, so their proponents make up untrue allegations about "the playing field" not being level; they'll claim there are "barriers to market entry" because traditional energy sources are well-entrenched. But oil and natural gas are entrenched for a reason, because right now they're far more economical.

Some proponents are in it strictly for themselves: they're representatives or hired lobbyists (often in the guise of "environmental experts" who claim a nice-sounding agenda of a clean environment and clean energy) who seek government assistance to boost their industry. Corn growers are but one example of what Bastiat warned us in The Law:
This legal plunder may be only an isolated stain among the legislative measures of the people. If so, it is best to wipe it out with a minimum of speeches and denunciations—and in spite of the uproar of the vested interests.

But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.

Then abolish this law without delay, for it is not only an evil itself, but also it is a fertile source for further evils because it invites reprisals. If such a law—which may be an isolated case—is not abolished immediately, it will spread, multiply, and develop into a system.

The person who profits from this law will complain bitterly, defending his acquired rights. He will claim that the state is obligated to protect and encourage his particular industry; that this procedure enriches the state because the protected industry is thus able to spend more and to pay higher wages to the poor workingmen.

Do not listen to this sophistry by vested interests. The acceptance of these arguments will build legal plunder into a whole system. In fact, this has already occurred. The present-day delusion is an attempt to enrich everyone at the expense of everyone else; to make plunder universal under the pretense of organizing it.
As George Santayana said, "Those who cannot remember the past are condemned to repeat it." The United States today, with so many different industries competing for subsidies, has governments at all levels willing to indulge each one, no matter how contradictory. The left hand knows not what the right hand does. Tobacco subsidies are a notorious example, and though not as great as the billions in federal subsidies being poured out for ethanol production, it defies common sense to encourage the growth of a certain crop whose finished product is heavily taxed.

Thursday, February 23, 2006

Sometimes a little rest is in order

Hopefully tonight I can resume regular posting. I've had so much to do over the last several days and haven't been resting well. Normally I sleep about four hours per night during the week, and lately I haven't been getting even that. Thankfully little naps on the Metro-North commuter trains (both going into Manhattan and coming home) sustain me.

I've also been taking metabolism-enhancing stimulants that have given me a boost in energy (very unwise to take, I know). Today I'm skipping them because I'm under even more powerful effects from what happened yesterday afternoon. I'm looking forward to a certain something next week, and my sustained eagerness has kept my heart rate very high. In fact, from pure anticipation, my pulse was already racing at 100 for a full 30 minutes beforehand, and I've been almost as excited since.

Perhaps the excitement continued through my dreams, because this morning I woke up with a bit of a nosebleed. It might signal that my blood pressure is temporarily through the roof. At lunchtime I'll visit the company medical center to have it taken. If it is high, at least it will be from a far happier cause than three years ago. Late one night, I was unable to sleep because a particular person weighed heavily upon my mind, and suddenly my nose started bleeding from the stress and high blood pressure. As great as she was, I had to admit she wasn't worth that. I had another nosebleed a couple of hours later, and another in the morning.

Update: 140/70. It's fine, the nurse assured me, though I've never had my systolic pressure so high (at least relative to my diastolic). She suggested it's the dry winter weather that prompted my nosebleed, which I had considered, but dry weather never seemed to affect my nose before.

Wednesday, February 22, 2006

They never heard of paying off the "public debt"

When a private individual gets a sudden influx of cash, the prudent thing to do is pay off any loans, like credit cards or mortgages. It's unwise to save that money when your expected rate of return is less than the interest you pay on outstanding loans, like a mortgage or auto payment, and especially credit cards. If you earn an x% annual return on an investment but owe more than x% on an equal or greater amount of principal, you're losing money.

When governments run a surplus, what do they do? Most of them start planning how to spend it.
Flush With Cash, States Make Pricey Plans

- Tax cuts, new cash to health care programs, blueprints for new roads and schools states have jumped into 2006 with ambitious plans to spend the money pouring into their coffers, a windfall that's just in time for governors and legislators as they start re-election campaigns.

The spending spree is the clearest proof yet that the gloomy days of cuts and budget-tightening that dominated the first half of the decade are over, even as some urge caution and others say states have yet to fully recover from the downturn.

Lawmakers are arguing for tax cuts in Alabama, Arizona, Hawaii and New York. California is looking at sweeping road improvements. Property taxes are being targeted in Maryland and Florida.

"It's a lot better having extra, let me tell you," said Massachusetts Gov. Mitt Romney. "My first few weeks in office we had to find immediate savings to avoid a financial crisis ... The last two years have seen a billion dollar-plus surplus."

Romney, a Republican who is exploring a presidential run, wants to invest in education with laptop computers for 500,000 students to cost $54 million over two years; to cut the state income tax from 5.3 percent to 5 percent over two years; and to invest $200 million toward implementing a universal health insurance program in the state.

Massachusetts is one of many with ambitious spending plans:

Florida: With $3.2 billion in higher-than-expected revenues, GOP Gov. Jeb Bush is pushing for $1.5 billion in tax cuts, including a rebate for homeowners, elimination of a tax on stock and bond holdings and repeal of a tax on alcoholic beverages sold by the drink.

Oklahoma: Democratic Gov. Brad Henry wants to pour most of the extra money into education, with scholarships and raises for teachers. He also wants to cut taxes on retirees, fix bridges and fund high-tech research.

California: GOP Gov. Arnold Schwarzenegger proposed a stunning increase in spending, including a record $54.3 billion for K-12 education; $170 million over two years to get health care for 300,000 uninsured children; and a big boost in funds for highway improvements. The state estimates $7 billion in higher-than-expected tax revenues over two years....

[Arizona Gov. Janet Napolitano, a Democrat] has already signed a Republican bill providing a healthy pay raise for state employees and is pushing for a raise for K-12 teachers, complete funding for all-day kindergarten and $100 million for border-related law enforcement....
So instead of redeeming some of the bonds they've issued, many states instead want to go on spending sprees. Even Mitt Romney wants universal health care, paid for by the surplus. Once upon a time, his fellow Republicans almost universally assailed the concept of "socialized medicine," whether at the state or federal level. So what happened to the GOP in the 13 years since they began attacking "HillaryCare"? What happened to them in the 11 years since their "Contract with America" and its promise of a return to limited government?

Schwarzenegger famously said in the first debate of California's 2003 governor race, "The politicians make a mistake, they keep spending and spending and spending, then when they realize they made a mistake and spent money they don't even have, then they go out and go tax, tax, tax." Raising taxes is not his preferred way to balance California's budget, but Schwarzenegger warned that will be necessary if spending isn't cut. However, and maybe because all his propositions were defeated last November, he's become the enemy he criticized. California will spend over $54 billion on education, and for what? Very soon it just might, as I mentioned in my previous entry, hand out diplomas regardless of the students' academic achievement, because the students learned they can just sue in lieu of passing the high school exit exam.

Tax cuts are a good incentive for economic growth, to a point. Lowering tax rates makes a state more friendly to businesses, as New Mexico has seen in the last few years, so as the Laffer Curve predicts, a government can cut taxes, to a point, and the expanded tax base will make up for the lost revenue. The problem, however, as we've seen with Congress since President Bush first entered office, is that it's easy for a spend-happy government to cut taxes and tout the benefits thereof, which is not a bad thing, then increase spending by even more than the drop in revenue, which is a bad thing.

Labels: ,

The finest education other people's money will buy

(Updated 1:11 a.m.)

I've been falling behind on what I've wanted to blog about. Some news I've had to discard once it became a little stale, but this one I feel is important.
Tutors Say Parents, Kids Missing Free Help

WASHINGTON - Schools are blocking huge numbers of poor children from getting free tutoring, civil rights advocates and private tutoring companies said Thursday.

In a Capitol meeting sponsored by House and Senate education leaders of both parties, tutoring providers pointed to what they called an unkept federal promise.

Low-income parents are supposed to get a free tutor for any child who goes to a school that gets federal poverty aid but has not made steady progress for three straight years.

Parents get to pick the tutor they want even a private one from a state list.

But that central pledge of the 2002 No Child Left Behind law is often not being met.

Only 11 percent of eligible children, or 226,000 out of nearly 2 million students who qualify, received tutoring in the 2004 school year, according to the Education Department.

The numbers of underserved kids could be even higher because data collection is not always strong....

Publicity that is so filled with jargon that parents don't understand it. "It needs to say two words: free tutoring," said Leigh Hopkins, vice president for education at Public/Private Ventures, a nonprofit think tank....

The Education Industry Association, a lobbying group for more than 800 corporate and individual members who provide services, organized the meeting. The tutoring provision is a lucrative opportunity for the industry, particularly as the doors to more schools open....
The schools are not hindering parents from getting tutors, so how can it be called "blocking"? The schools simply aren't advertising it, and with good reason: if they did, every parent would want to "hire" a tutor (at taxpayers' expense), whether or not the student needs one. The limited resource would get overused.

This is what I wrote about last July, when the director of the left-wing "Families USA" said, referring to children who were eligible for but weren't receiving a certain type of government-paid health insurance, "We want to get them enrolled." It didn't matter if the children really needed the insurance, but we shouldn't be surprised. Because it's not their money they're spending, it's in bureaucrats' and lobbyists' interest to define as many individuals as possible as "eligible." Bureaucrats measure their programs' success only by the numbers served, not by actual results or efficiency.

"Free tutoring" indeed. I suppose, by the same token, that all the things my parents gave me when growing up were "free" too. It didn't matter that my parents paid for them. I didn't pay for them, so they were "free," right? Of course that's absurd, so then why do we think any type of social program is really "free" for the recipients?

Let's not be surprised that the biggest push for "free tutoring" is because teachers send their lobbyist groups to garner such lucrative opportunities. In my area, it's not unknown that a public school teacher can pull $75 an hour giving private tutoring. Now imagine what they could ask for when their tutoring services are really in demand, because parents don't have to worry about paying the tutor themselves.

California shouldn't need tutors, though. After all, students there are suing (and will probably win) to do away with high school exit exams. If you're too busy playing gangsta, engaging in "teenage mating rituals" of various types, or simply too stupid to pass, just claim "racism" and sue. It's so heartwarming to see that, though the job skills of these alleged "students" barely qualify them to operate deep-fryers at McDonald's, they're sufficiently knowledgable to engage in this country's greatest modern pastime: litigation.

In the face of perpetually declining scores on the Regents exams, and with only 71% of students graduating from high school (9th through 12th grades) in five years, New York City has taken a different approach. No danger of lawsuits here, because it's extremely accomodating to all the supposedly oppressed minorities: the Department of Education continually dumbs down the test, and since that isn't enough, almost each year, the test is revised so that the passing score of 55 (which isn't a percentage) can be achieved with fewer correct responses.

Tutoring, even at others' expense, might have a snowball's chance of doing some good...except that the NYC public school system is filled with and by nature attracts so many bad teachers. Meanwhile, and you can't make this up, New York state has become concerned over certain for-profit schools: one school alleged cheated so its students could get more financial aid, and others' academic quality is very poor. Imagine that: the state of New York accuses institutions of higher learning of poor academics, when it would do better to scrutinize NYC public schools. And in recent months, there have been several NYC public school employees (including principals, as I recall) caught stealing funds -- never mind the many bad teachers who are silently picking the taxpayers' pocket.

Tuesday, February 21, 2006

Saving us from foreign oil "dependence"?

In his latest follow-up to a State of the Union Address that extolled the fallacial virtues of big government, President Bush struck again:
Bush: U.S. on Verge of Energy Breakthrough

MILWAUKEE Feb 20, 2006 (AP)— Saying the nation is on the verge of technological breakthroughs that would "startle" most Americans, President Bush on Monday outlined his energy proposals to help wean the country off foreign oil.

Less than half the crude oil used by refineries is produced in the United States, while 60 percent comes from foreign nations, Bush said during the first stop on a two-day trip to talk about energy.

Some of these foreign suppliers have "unstable" governments that have fundamental differences with America, he said.

"It creates a national security issue and we're held hostage for energy by foreign nations that may not like us," Bush said.

Bush is focusing on energy at a time when Americans are paying high power bills to heat their homes this winter and have only recently seen a decrease in gasoline prices.

One of Bush's proposals would expand research into smaller, longer-lasting batteries for electric-gas hybrid cars, including plug-ins. He highlighted that initiative with a visit Monday to the battery center at Milwaukee-based auto-parts supplier Johnson Controls Inc.

During his trip, Bush is also focusing on a proposal to increase investment in development of clean electric power sources, and proposals to speed the development of biofuels such as "cellulosic" ethanol made from wood chips or sawgrass.

Energy conservation groups and environmentalists say they're pleased that the president, a former oil man in Texas, is stressing alternative sources of energy, but they contend his proposals don't go far enough. They say the administration must consider greater fuel-efficiency standards for cars, and some economists believe it's best to increase the gas tax to force consumers to change their driving habits.

During his visit to Johnson Controls' new hybrid battery laboratory, Bush checked out two Ford Escapes one with a nickel-metal-hybrid battery, the kind that powers most hybrid-electric vehicles, and one with a lithium-ion battery, which Johnson Controls believes are the wave of the future. The lithium-ion battery was about half the size of the older-model battery. In 2004, Johnson Controls received a government contract to develop the lithium-ion batteries.

On Tuesday, Bush plans to visit the Energy Department's National Renewable Energy Laboratory in Golden, Colo., to talk about speeding the development of biofuels.

The lab, with a looming $28 million budget shortfall, had announced it was cutting its staff by 32 people, including eight researchers. But in advance of Bush's visit, Energy Secretary Samuel Bodman over the weekend directed the transfer of $5 million to the private contractor that runs the lab, so the jobs can be saved.
And it gets worse from there. The article was supposed to have been written this Monday, but from something it said, I would have thought it was from November or so. It mentioned Americans have only recently seen a decrease in gasoline prices. Strange, because in my area (and gasoline down the road is quite expensive compared to elsewhere), pump prices started decreasing significantly about four months ago.

Isn't it so easy to "invest" in new ventures when it's not your money, especially when the money comes from people who have no control over how it's invested, and when it's all but impossible for them to hold you accountable for mismanagement and outright fraud? Isn't it so easy to "save jobs" when it's not your money? Isn't it equally stupid when it's just for the sake of jobs, a basic Keynesian principle? When it's not your money, though, you need not give a damn whether the company can operate profitably, or whether its scientific goals are at all feasible. Since the money government spends is never its own, it's no problem for government to award another lucrative contract, or give another tax break, so a company can develop a new battery that, subtracting whatgovernment poured in, actually loses money on net.

The best and only way the federal government (and any level of government) should promote a "breakthrough" in new energy sources is to not promote any source whatsoever. Governments at all levels must stop their interference in market processes, and let the competitors battle it out. Cease all subsidies, like those given to ethanol manufacturers. Cease special tax breaks for oil industries, too. Cease the subsidies for alternative fuel sources like wind and solar energy, which are extremely inefficient. Cease the unfair hindrances on nuclear energy. People use the phrase "level playing field" all the time, and many don't realize a true "level playing field" is when government neither assists nor hinders anyone.

That some of our Middle East oil-buying dollars go to terrorists is a very valid concern about free trade. I'll get to that later, but right now let me say that President Bush has to emphasize it because the Democrats have been. Neither side is doing it out of genuine concern, though. The Democrats certainly didn't care about "energy independence" until recently, but they've created the myth because they don't have much else to make an issue of. Bush has no choice but to follow suit, and sadly, a serious economic matter gets reduced into more partisanship.

Congress is deeply concerned about dependency on Middle East oil. So deeply that, in a vote this last December, it again rejected allowing drilling in ANWR (most of the blame we can put on Democrats), let alone other rich oil fields in Alaska. More than any subsidies or tax breaks, more than any promotion of "democracy" abroad, drilling in ANWR would have the greatest effect on reducing our "dependence on foreign oil." It would also immediately reduce oil prices on the global market. Effects on price would occur once appropriate legislation passed (or even rumors it would pass), before any drilling commenced, because prices do not just reflect current supply, but future expectations of supply.

Critics say it's only enough oil to supply the U.S. for two years, but that is a lot. Imagine that you and your family suddenly found a two-year supply of food in your back yard, and that you are your grocer's biggest customer. Wouldn't he suddenly be very conciliatory if before he demanded high prices? Perhaps he has a lot of savings to carry him through two years, until you consume all of your finite supply. But what if you look a little more and find an even greater supply, or you find a way to make the food yourself for a cheaper cost than your grocer's prices? Worse, what if in that time, you find a grocer who will sell for really cheap prices? (Here I refer to tar-sand oil deposits in Alberta, Canada, which are a promising source once the technology gets going.)

I recently had a discussion with a close friend about Middle East oil and Sino-U.S. trade. Is it wise that we send so much money to potential enemies in actual warfare? No, but we trade with Saudi Arabia, Iran and China because the benefits outweigh the costs. Benefits and costs aren't always monetary, remember. So by measuring trade flows, we can actually approximate how much Americans, collectively, are willing to save by accepting the risk that Middle East terrorists eventually will harm us and our interests, using some of the dollars we paid for Middle East oil. The same goes for China using some of our money to modernize and expand its military, with the single goal of conquering Taiwan.

Admittedly it is not an absolute that free trade promotes peaceful relations. After all, we certainly cannot trust Iran, at least not with its current leadership. Peaceful relations can still be very cold, after all, and free trade isn't a guarantee of permanent peace, but it does maintain peace in the present. The trade will continue until one side decides, or both sides decide, that it prefers the destruction of war, and the risk of losing, instead of peaceful trade.

If Iran really wanted nuclear weapons, couldn't it just buy technology from renegade Soviets? Perhaps, but I would think not. It's far more noticeable than Iran's nuclear projects, which they claim are covert, but we know about them, and the Iranians know that we know, and we know that the Iranians know that we know... Besides, once Western intelligence learned of Iran's acquisition of a nuclear weapon, it would play into the United States' hands: such a discovery would invite UN Security Council action (severe sanctions). Moreover, Israel would undoubtedly begin military strikes against all possible nuclear sites in Iran. Madman Mahmoud, therefore, will continue playing the stall game.

I would suspect India is doing everything to ensure that none of its nuclear technology, at least that which could be used to develop weapons, reaches Iranian hands. It's benefiting far more from peaceful trade with the United States than it could ever get by selling nuclear technology to Iran. Similarly, for all the anti-West violence, Pakistan as a nation likes warm relations with the United States. China and North Korea are a different matter, especially North Korea, because Kim Jong-il, aka He of the Supposedly Infallible Memory, is a madman.

If we right now cut off all trade with Iran, that may force its hand before we can deal with it. Iran might then seek out the nearest available nuclear warheads and lob a few toward Israel, and its missiles could potentially carry warheads to southern Italy. I do believe we will eventually have to assault Iran with our military might, which will be much easier until Iran has a working nuclear weapon. Right now Mahmoud & Co. think they have time to develop nuclear weapons on their own.

China is also stalling. I think its leaders look far into the future and are willing to exercise the requisite patience. As I wrote last March in my "How libertarian are you?" entry:
Someone best described as a neo-con once told me that China is merely a paper tiger and nothing to worry about. Perhaps so. Vietnam, however, taught our enemies that we can be beaten if they make it too costly for us to win. I worry that China will become a serious threat in a couple of decades, as it continues to strengthen its military and modernize its society. At some point, China may be able to capture Taiwan because they'll make the blood price too high, and if anti-war sentiment sufficiently ferments over the years.
It's important to remember that not every dollar in China's trade surplus is a dollar it can spend. China needs some of those dollars to buy petroleum, and because it must import many different types of raw materials, it doesn't have much of an overall trade surplus compared to that with the United States. Also, it returns many of the dollars to the U.S. Treasury and receives U.S. Treasury bonds, which are not just an investment, but collateral for China's insolvent banking system.

There's still a lot of money that China can allocate for its military expansion, though, but even in a couple of decades, it could not hope to approach, let alone defeat, the United States. But again, those fellows in Beijing aren't looking to win: they just want to make the fight over Taiwan so decreasingly worthwhile that we'll give up.

Meanwhile, we continue to trade with China. Free trade means that neither side is more dependent on the trade than the other is: free trade is symbiosis, not parasitism. China's communist leaders have embraced some market reforms as the key to prosperity, with the clear goal of modernizing China into a formidable superpower. Are they really selling us a rope to hang ourselves with, a twist on what Lenin mockingly said of capitalists? Or are they embracing a snowball (the free market) they formed themselves and will never hope to stop?

I don't think free trade, and the market reforms it encourages, are the answer to ending tyranny in China. I think that, like in the United States, it will take an armed revolt by the people. My own ideas on how to accomplish that, however, cannot be publicly shared.

Labels: , ,

Storm after the storm: public and private property

What happens when government makes you care for "public property" as if it were "private," yet you cannot enjoy it as you would your own private property?

After the recent big blizzard (nine days ago), the New York City Sanitation Department got to work starting the very next morning. That is, they got to work issuing $100 tickets to property owners who didn't clear the sidewalks in front of their buildings.

As Becky Akers noted, it's even worse. New York City's laws make the property owners responsible for maintenance and repair beyond just shoveling snow:
You might think said department would be too busy plowing the city's 19,000 miles of paved streets to tackle anything else. But the peculiar combination of ennui and energy characterizing all bureaucracies damns this one, too: it barely bothers with the job assigned it while minding everybody else's business. Even as the snow deepened in the streets, the Sanitation Department worried about my sidewalk.

It isn't really my sidewalk, of course. I don't own it, and I can't prohibit anyone from doing as he pleases on it. Dog-walkers consider it their pets' bathroom; kids treat it as their roller-skating rink or baseball field; revelers raucously congregate on it, smack-dab below my bedroom window, at 2 a.m.. I am powerless to prohibit any of this, regardless of how it disturbs me, because the sidewalk is public property.

Let that sidewalk buckle, crack, or shed a chunk of concrete, however, and it suddenly belongs to me.

Section 2904 of the City Charter states: "The owner of any property, at his or her own cost, shall install, reconstruct, repave and repair the sidewalk flags [sections] abutting such property, whenever the Commissioner of the Department shall so order or direct."

Thus does the city government tax property owners, already paying exorbitant extortion, yet again....
As the saying goes, "read the whole thing." There are some things people need to read and become aware of, even if they make our blood boil.

When I was little, I once had a little tiff with other boys who lived on the opposite end of our cul-de-sac. One day they declared that I could no longer ride on "their" half. After informing my father, he explained to me that the street belongs to everyone. It seemed a reasonable explanation to young Perry. That strange adjective "public" meant that we didn't pay for its upkeep, at least not directly, I'd learn in later years. I didn't understand the concept of taxation, let alone how it went to the overpaid union workers who patched up and occasionally repaved the street. Whenever they came, those people seemed to outnumber, and move more slowly than, the myriad gastropods that resided on the sidewalks and our lawns.

It was odd indeed that the work didn't seem to warrant so many people, like if my parents told my sister and me to peel a single carrot together. They never did, because my sister and I would just get in each other's way, of course. If my parents paid each of us a dollar a week for doing chores together, but many chores could be done just as quickly (if not faster) by just one, why, then we'd have to compete with each other. But if we wanted the ease of not having to compete, and if our parents didn't know or were willing to part with $2 when $1 could have bought the same end result, why would my sister and I have minded any inefficiency? Such thoughts were beyond that of a little boy, but I did understand that my father wasn't the one who hired those laborers. I couldn't quite conceptualize, though, that he regularly gave money (let alone how he did it) to this entity called "South San Francisco," which then hired crews to do various things for and on "public" property.

What I understood above all was that our house belonged to us. People could walk on the sidewalk if they chose, but they couldn't come into our house unless we first gave permission. If we didn't like them standing in our driveway or on our front step, we could tell them to leave. "Our," "belong" and their variants were very powerful words. My bicycle was "mine," though it was solely my problem (well, my parents') if it got dirty or one of the tires went flat. At least no other children could ride it unless I permitted it: it was an acceptable trade-off. Besides, if others shared ownership and could ride it as they pleased, then in fairness they should share in my bike's maintenance...but how well could I trust them in that?

Well, New York City has taken the definition of "public property" beyond Orwellian Doublethink's ability to rationalize. The sidewalk is public property, but like private property in that building owners have the responsibility to maintain the stretch in front of their properties. Yet it's not "private" enough to forbid pedestrian traffic upon it: you as the owner must maintain it, but you have no right to tell someone to walk his dog elsewhere. It seems "private" is only in the fascist, aka tyrannical sense that the owner must obey the government's decree to repair it. No Indian maharajah or Siamese king could have bestowed a worse white elephant!

It's one thing to encourage city residents to be good neighbors and shovel the sidewalks in front of their buildings. It's another thing to require them by law to do it by a certain time. As Becky quoted the Sanitation Department Commissioner:
"Whether you're the owner, tenant, occupant or the person in charge of any lot or building, you must clear the snow and/or ice from your sidewalk within four (4) hours after the snow has stopped falling, or by 11 a.m. if the snow stopped falling after 9 p.m. the night before."
So if the snowfall ceases at 8:45 p.m., there are no allowances for bitterly cold weather like we've been having recently: you must get out there and finish by a quarter to one o'clock the next morning. If it ceases past 9 p.m., you must get up early to take care of your government-mandated "responsibility."

The commissioner rationalized it for those unable, for whatever reason, to clear the sidewalks themselves: "Your next-door teenage neighbor can surely use the money." Did he ever once consider that the property owners could have surely used the money more than the "next-door teenage neighbor," assuming there's such an individual? If the property owners did not need the money as much, they'd have already hired that person without government's coercive influence.

Why is the city so adamant about speedy shoveling? I suspect there's a very simple reason: so it cannot be sued by pedestrians who slip and fall on snow and/or ice. By shifting the responsibility to the property owners, the city effectively pre-absolves itself should someone be injured as a result of an uncleared sidewalk.

Every time I think about moving to the city, something reminds me of the benefits of living in Westchester, and specifically in my neighborhood (so close to the Metro-North train station) and on my street. It's a private lane, which by itself is a great benefit, as I'll soon explain. There aren't many of us here, so it's never been a problem that the road is just one lane wide, or that we have no sidewalk to worry about.

My landlord and the other property owners share equally in the costs of hiring private contractors to plow, patch up and repave the road. The property owners own the road collectively, but it is still private property, and it is almost always maintained better than the public roads just beyond. And they also do it for less money than the government-hired crews (I think that's done at the county level). Why shouldn't we get a better value? It's our money and our property, so those who get the contract do the best possible work for the least possible cost.

On the other hand, government needs not concern itself with obtaining the best value. To paraphrase Milton Friedman, because the money comes from someone else and is being spent on other people, it's like a parent who doesn't care about spending $2 when $1 would do.

Friday, February 17, 2006

A windfall for whom?

(Title corrected. Charlie pointed out what I had wondered when I wrote the title, whether to use "who" or "whom." I checked the fast-access alt.english.usage FAQ, which says that "whom" is the usage when following a preposition.)

I'm surprised none of the major blogs, at least that I've seen, have mentioned how the New York Times outdid itself two days ago. As I picked up a copy of the more enjoyable New York Post, I noticed the article title "U.S. Has Royalty Plan to Give Windfall to Oil Companies" in the upper left hand corner of the Times' front page. Like anything else you read in the Times, you can expect it will promote its usual socialist agenda with half-truths, misleading statistics and figures, and outright lies. Here are some excerpts and my commentary:
WASHINGTON, Feb. 13 — The federal government is on the verge of one of the biggest giveaways of oil and gas in American history, worth an estimated $7 billion over five years.
That $7 billion is over five years, and that's for the entire industry, so it's really not as big a windfall as the Times would have you think. It's not even comparable to the huge windfall that the federal government gets in gasoline taxes.

Second, that's $7 billion returned to the private sector, where it can be spent far more efficiently than the federal government throwing it into another unconstitutional program. It doesn't matter that the oil companies will get it, because as I've said before, that money will find its way back to the rest of the economy. It could be a single oil executive who gets every penny, and because he won't just sit on piles of cash, because he must save or spend it, the money flows back to the rest of us.

In fact, it's likely that the oil companies will use part of the alleged "windfall" to develop new oil sources, which will eventually help bring crude prices down. Contrast this with the Democrats' fiscal insanity of "investing" in alternate fuels: if you had $1 billion to invest in increased production, you'd do so much better to put it in oil, not alternative fuels that are far more expensive.
New projections, buried in the Interior Department's just-published budget plan, anticipate that the government will let companies pump about $65 billion worth of oil and natural gas from federal territory over the next five years without paying any royalties to the government.

Based on the administration figures, the government will give up more than $7 billion in payments between now and 2011. The companies are expected to get the largess, known as royalty relief, even though the administration assumes that oil prices will remain above $50 a barrel throughout that period.
Notice that insinuation? The figures were "buried," implying the DOI was trying to conceal the "windfall." We should be eternally grateful, then, that the Times is poring over all these government reports, telling us, effectively, that government is going to return money to us.

Oil companies would have paid $7 billion in royalties, so one might at first think they're getting a deal by not having to pay 10.77% royalties. But the $65 billion is the sale value of the oil and natural gas, not profit, so it's not as if the oil industry will be swimming in more profits. And again, see above for my explanation why you shouldn't fear a company earning more money.
"We need to remember the primary reason that incentives are given," said Johnnie M. Burton, director of the federal Minerals Management Service. "It's not to make more money, necessarily. It's to make more oil, more gas, because production of fuel for our nation is essential to our economy and essential to our people."
I personally disagree with these particular incentives. I agree with Doug Bandow that we should simply sell the public lands to the private sector. Let companies bid against each other to determine what is a "fair price," and ultimately it won't matter if the top bid is $1 or $1 billion. If the federal government "earns" $7 billion, $1 billion or $1 in royalties, we consumers pay it, in the form of higher prices. Besides, the less money that goes to government, the better; that's money that stays with us.
Indeed, Mr. Bush and House Republicans are trying to kill a one-year, $5 billion windfall profits tax for oil companies that the Senate passed last fall.
I discussed the "windfall profits tax," and the economic ignorance of Byron Dorgan and other Democrats, here. The bottom line is that the $5 billion will eventually be passed onto consumers. There is no such thing as a business that pays taxes. Consumers pay taxes for the business.
Moreover, the projected largess could be just the start. Last week, Kerr-McGee Exploration and Development, a major industry player, began a brash but utterly serious court challenge that could, if it succeeds, cost the government another $28 billion in royalties over the next five years.
Yin and yang. It will cost the federal government $28 billion over five years, but that's $28 billion remitted to the private sector, and all automatically, because all involved sellers will adjust their prices transparently. Dorgan's plan to "rebate" the "windfall profits tax" could never hope to work so well.
In what administration officials and industry executives alike view as a major test case, Kerr-McGee told the Interior Department last week that it planned to challenge one of the government's biggest limitations on royalty relief if it could not work out an acceptable deal in its favor. If Kerr-McGee is successful, administration projections indicate that about 80 percent of all oil and gas from federal waters in the Gulf of Mexico would be royalty-free.
The more I hear about oil companies not having to pay royalties, the more I like it.
"It's one of the greatest train robberies in the history of the world," said Representative George Miller, a California Democrat who has fought royalty concessions on oil and gas for more than a decade. "It's the gift that keeps on giving."
But giving to whom? Not you, and certainly not me, but to the federal purse whose strings Miller and others control.

If Miller wants to talk about greatest train robberies Congress is committing, he'll stand by President Bush's side and warn about Social Security's looming insolvency, or Medicare/Medicaid, or the prescription drug bill, or all the pork spending by both political parties.
Republican lawmakers are also concerned about how the royalty relief program is working out.

"I don't think there is a single member of Congress who thinks you should get royalty relief at $70 a barrel" for oil, said Representative Richard W. Pombo, Republican of California and chairman of the House Resources Committee.

"It was Congress's intent," Mr. Pombo said in an interview on Friday, "that if oil was at $10 a barrel, there should be royalty relief so companies could have some kind of incentive to invest capital. But at $70 a barrel, don't expect royalty relief."
It's unfortunate Pombo doesn't understand basic business economics and practices, like how oil companies and OPEC nations continually invest profits to develop new crude reserves, and how higher prices encourage that greater production. Nor does he seem to understand that when the oil industry does well, it's cyclical (crude was at extremely low prices just several years ago), and its higher profits simply reflect its greater competitiveness vis-à-vis the rest of the economy. Oil and gasoline become more valuable, so people are willing to trade more money for it.
As it happens, oil and gas royalties to the government have climbed much more slowly than market prices over the last five years.

The New York Times reported last month that one major reason for the lag appeared to be a widening gap between the average sales prices that companies are reporting to the government when paying royalties and average spot market prices on the open market.

Industry executives and administration officials contend that the disparity mainly reflects different rules for defining sales prices. Administration officials also contend that the disparity is illusory, because the government's annual statistics are muddled up with big corrections from previous years.
In other words, the Times wants to insinuate some sort of corporate tax evasion, but it doesn't offer a single statistic or measurement -- not even to back its claim of "much more slowly." This is an old tactic of the Times: round things in whichever direction you need, and don't supply figures so people can more easily fact-check you. Look at Don Luskin's attempt to get the Times to admit that Krugman's error about average weekly earnings, which were up 0.5% for the last five years, not "flat" like Krugman had written.
...But the Bush administration did not put up a big fight [opposing royalty relief for shallow-water deep drilling]. It strongly supported the overall energy bill, and merely noted its opposition to additional royalty relief in its official statement on the bill.
How hypocritical of the Times to ignore that many Democrats also supported the "overall energy bill," because it wasn't so much about energy as it was about pork. Biden. Boxer. Clinton. Dorgan. Durbin. Feinstein. Kennedy. Kerry. Leahy. Obama. Reid. All those Democrats voted "yea" on the energy bill, but we'll be driving water-powered cars before the Times will ever admit the strong Democratic support for a bill it criticized Bush for signing. John Corzine and Frank Lautenberg actually voted "nay," but you know, New Jersey politics is known for bribery and other sorts of corruption, so it doesn't need pork barrel spending.
By contrast, the White House bluntly promised to veto the Senate's $60 billion tax cut bill because it contained a one-year tax of $5 billion on profits of major oil companies.
Just in case you missed it above, here again is my debunking of the Democrats' "windfall profits tax" malarky.
The big issue going forward is whether companies should be exempted from paying royalties even when energy prices are at historic highs.

In general, the Interior Department has always insisted that companies would not be entitled to royalty relief if market prices for oil and gas climbed above certain trigger points.

Those trigger points — currently about $35 a barrel for oil and $4 per thousand cubic feet of natural gas — have been exceeded for the last several years and are likely to stay that way for the rest of the decade.
At any price, because, I'll say again, that's more money the private sector keeps, and more money kept out of government's grubby hands.

Yet another reason to sell off the lands and waters once and for all, avoiding any entanglements with price triggers, is the very fact of inflation. By the end of this decade, $35 will not be the same as $35 today, or $35 in 2000.
The biggest reason is that the Clinton administration, apparently worried about the continued lack of interest in new drilling, waived the price triggers for all leases awarded in 1998 and 1999.
This is an early contender for the biggest news "DUH!" statement of 2006. Look at this inflation-adjusted chart, which shows that in 1998, crude oil prices had severely bottomed out. There was a "lack of interest in new drilling" because crude prices were so low that investing in new oil fields yielded very little; there was better profit to make elsewhere.
Last week, the fight broke out into the open. The Interior Department announced that 41 oil companies had improperly claimed more than $500 million in royalty relief for 2004.
Naturally. Like Eliot Spitzer strong-arming UPS about untaxed cigarettes, big government can't stand to see one tax dollar get away. One more time: businesses do not pay taxes. They only pass taxes onto us consumers.
If that view prevails, the government said it would lose a total of nearly $35 billion in royalties to taxpayers by 2011 — about the same amount that Mr. Bush is proposing to cut from Medicare, Medicaid and child support enforcement programs over the same period.
The Times concludes by announcing its agenda: the more money that stays in the private sector, the less there is for government to spend on all its redistributive social programs. Never mind that the "cuts" are actually only decreases in spending increases, but who's counting when it's all paid for by someone else?


Thursday, February 16, 2006

More nails in the coffin of private property rights

Do you have the right to walk onto your neighbor's property and tell him how to use it? No? Then by what right can you tell a private business how to conduct itself?
Online Game Addresses Gay-Rights Uproar

SAN JOSE, Calif. Feb 15, 2006 (AP)— A gay-rights uproar in the popular "World of Warcraft" online game has spurred the game's maker to review its treatment of gay players.

The game, which draws more than five million players worldwide, was hit by controversy last month after a player was threatened with expulsion from the virtual Warcraft world when she sought to recruit others into her gay-friendly team.

Blizzard Entertainment, the game's maker, apologized last week to the player, Sara Andrews of Nashville, Tenn.

It said the warning was a mistake and that it will make some changes to prevent a repeat, Andrews and her attorney from the Lambda Legal civil rights organization said Wednesday.

Blizzard representatives did not return phone calls for comment.

Gay-friendly teams already exist in Warcraft, but the issue here stemmed from Blizzard's enforcement of its policy banning the harassment of players based on sexual, religious or political affiliation.

According to correspondence between Andrews and game officials, the company said it does not allow such recruitment efforts on its general chat channels to help prevent harassment.

Andrews, 25, said she protested because she had done similar recruitment in the past without reprimand and noted that many others associated with a political or other affiliation have done the same.

While the harassment policy is sound, trying to silence players from stating their sexual affiliation is not, contended Brian Chase, a Lambda Legal staff attorney.

"If you want to stop harassment, you should punish the harasser, not the victim," Andrews said.

As part of its review, Blizzard this week instituted a new chat channel specifically for recruitment and told Andrews it also plans to provide sensitivity training to the employees who monitor the online play and communications forums.
You have no such thing as "gay rights," or any other rights, when you are on another person's property. While I do not at all condone harassment, unless there is a breach of contract, under the rule of law, Andrews had no true remedy. The servers are private property, and Blizzard can institute whatever policies it desires regarding player conduct. Whether or not you agree with this "don't tell" policy, and I personally don't care either way, only Blizzard has the right to decide what it wants to do. Any players who don't like it don't have to buy WoW, let alone play on Blizzard servers.

Speaking from a business perspective, Blizzard undoubtedly has a clause in its terms of service that players may not engage in harassing behavior. Undoubtedly it also has a clause that permits it to change the terms at any time, without future notice, and without having to provide remedies (like refunding money). Instead of reviewing player logs and devoting labor to banning harassers, Blizzard is simply trying to save money overall by barring player behavior that, while not inherently harmful nor against the rules, could invite trouble. It's easy to say "go after the harassers," but at what cost? Extra "policing" means having to hire more staff, which drives up the cost for all players. And now the staff must undergo "sensitivity training." If Blizzard does not raise the monthly subscription fee to play on its servers, it might charge more for future expansions. Or it will accept the lower profits and invest less in the rest of the game, whether expansions, QA or other matters of player behavior.

It is a modern tragedy that the state can force businesses to cease operating in certain ways, though the businesses are not violating anyone's life, liberty and/or property. When a private business refuses to let you determine how it is run, that is not infringing upon your rights: it's not your property. Your rights do not entitle you to compel others to assist you: your right to life doesn't mean you can steal from someone so you can eat, and your right to free speech doesn't mean you can use your neighbor's property in exercise thereof.

Sadly, our activist courts do not see it that way, and Andrews knew that. Instead of creating her own game or finding another that suits her, she threatened to use the court system to force Blizzard to tailor the game to how she wants. Rather than spend untold sums fighting her, with a real risk of losing, Blizzard acquiesced to her legal blackmail. Even with the cost of "training" staff and increasing monitoring for "anti-gay" harassment, it was cheaper for Blizzard to surrender.

Another recent example of the destruction of private property rights is what our friend Capital Freedom recently discussed. I had meant to blog about it as "the stupidest lawsuit of all time" but haven't had time to address it myself. A group of Massachusetts women, backed by an abortion rights group, sued Wal-Mart to force it to carry a "morning-after" birth control pill. Wal-Mart's decision all along was not to carry it, which is its right. Capital Freedom mentioned tires at Nordstrom, and of course it's Nordstrom's right to carry only what it wants; in fact, a tire store can carry only one brand in one size, if it so chooses. What about my aunt's wine store? Should her customers be able to sue if she doesn't stock a particular label? "Of course not, that's absurd," you say. Then why doesn't the same principle apply to Wal-Mart?

Just yesterday, Massachusetts' Board of Pharmacy required Wal-Mart to carry the pill. I feared Wal-Mart would lose this, but I didn't realize it wouldn't even make it to court. Didn't the women sue, which implies turning to the judicial system? No legal briefs or motions, nothing from any amicus curiae, not even a magistrate searching through decades of possible precedent. (I personally dislike precedent, because rulings can be wrong, but that's another topic.) Wal-Mart is now compelled to stock something it doesn't want to, merely because a bunch of bureaucrats decided so.

I'm very disappointed with Wal-Mart's response: since when should "women's health" be at all a "priority" for a business? There's only one real priority for a business, and that is to maximize its owners' profits -- that is, without infringing on people's life, liberty and property. There's only one word to describe a government that disregards those profits, as well as the freedom of business owners and managers to run operations as they see fit (never mind that it is those profits, grounded in that freedom, that facilitates good business, economic growth and a wealthier society). The same word describes a government that forces private businesses to bow to its will, because a relative few cried out loudly and found a few sympathetic rulers.

But, few dare call it tyranny.

Wednesday, February 15, 2006

The wide weird world of spam

You can never make this stuff up:
Dear Sir:
We are professional food machine manfucturing company in Taiwan.
We have 40 years of business experience.
We are not only manufacture machinery.
We also provide professional planning design and support.
Our quality of serviceamd technological standards are stabe and renovatve.
Our objective is to be customer service orientd,and to provide the
Best possible food and beverage machinery.
We are currently in the prcess of expanding our overseas market.
If you are interested in what we have to offer,
we would be happy tohear from you.
Our objective is to be customer service orientd,and to provide the
Best possible food and beverage machinery.
We are currently in the prcess of expanding our overseas market.
If you are interested in what we have to offer, we would be happy to
hear from you.
John Chen
Tems Of Business
The whole packing facilities of mineral water
The whole plant for juice Equipment
The whole plant for Milk Equipment
The whole plant for soybean and rice drink
The whole plan packing line for wine
Canned Foods Machinery
Contact information:Pleaes contact Jill wang at:

Automatic empty bottle unsrambler
[link removed]
Automatic Filling Capping Machine
[link removed]
[link removed]
[link removed]
[link removed]
Automatic Plastic Cap Capping Machine
[link removed]
[link removed]
I'm still trying to figure out what the terms actually mean, and what the listed devices could possibly be. Even accounting for the bad English, I'm not sure what an "Automatic empty bottle unsrambler" or "steam vacuum capper" could be.

How do markets clear?

My best friend at work, whom I've mentioned before argues that markets need regulation, has stopped calling me a "neoliberal" (which is rather a meaningless term). I think it stemmed from his surprise at hearing me say that Austrian economics doesn't "admit" imperfect information, rather, it depends on that for some of its theories. Information is often asymmetrical between parties, and undiscovered information waits to be found by Kirznerian entrepreneurs, etc.

My friend insists that because information is imperfect, markets need "help" from government to clear properly. Perhaps I've misunderstood him all this time, but his claim still puzzles me. Markets clear all the time, and on their own. The market clearing price is the price at which the quantity supplied equals the quantity demanded. There's only one requisite for markets to arrive at such a price: prices need to be left free to adjust on their own. So not only can government not help markets clear, any government attempts to regulate transactions will hinder a market in arriving at its true clearing price.

I thought about that this morning when commencing my commute into the city. The local Metro-North train station is only several minutes away by foot, so driving about 2-3 there doesn't save that much time (and I spend a couple of minutes to start my car about 10 minutes before I go, so that the engine warms up a little). Paying $3 to park for the day, though, is very much worth the convenience of not having to walk home in 20-degree weather and uncomfortable dress shoes. But when I arrived this morning, all parking spaces in the main lot were already taken; many were still covered with snow from the weekend's huge blizzard. The only available spots were in the expansion lot, far enough away to completely negate the benefit of driving. So, I went back home, left my car and went back to the station, hoping the night air wouldn't be too cold.

My dilemma was a true shortage, not just a scarcity. A shortage is a scarcity at a price below market equilibrium (i.e. below the clearing price, where people want to buy more than sellers can supply). In my case, the demand for parking spots (near the train platform, I should clarify) exceeded the supply at a static price, which is not left free to adjust upward. Thus there's no adjustment when supply suddenly drops but demand stays the same, but if prices can go upward, eventually they would reach a point where the number of parking spaces perfectly equals the number of people who want one. Would people still pay $4 or $5 to park for the day? Probably, since that's not a very significant difference. How about $10? By that point, which is over $200 a month just to park, I'd expect quite a few people would turn to lifts from family, perhaps friends on their way by, or even carpool with other train commuters. I know that I'd rather keep $10 and walk.

Price controls on gasoline were the sole cause of its shortages in the 1970s. The price controls didn't cause the scarcity, nor would they have caused high prices had prices been left to adjust, but they did cause the shortages: people waited in long lines only to discover the gas station had run out, and many local and state governments restricted people in what days they could purchase gasoline (like "odd/even days" depending on the last digit of your license plate). As I explained in that entry on oil prices, repeating it for my Valentine's Day entry, higher prices help reduce (even eliminate) search costs. Price controls may make something appear cheaper, but society actually loses more because people run around trying to find it at that price; not only will it run out sooner, the lower prices don't encourage others to supply it. Prices really are the fair way to determine resource allocation.

I wasn't the only car who circled around the main lot a couple of times, in vain looking for an open space. How, then, should I be allowed to compete with others? If we followed 1970s policy, then people would be permitted to park in the main lot only on certain days, and in the expansion lot on any day. Instead of what's essentially a lottery system, prices work best. If parking near the station were $5, and just $2.50 in the expansion lot, then more people would park in the expansion lot, because they'd decide spending $1.50 less is worth walking for a few more minutes. This would free up spaces in the main lot for those willing to pay $5.

And what if the $5 is too high, such that the main lot has a lot of open spots nobody would pay $5 for? Again, this is why it's imperative that the price be left to adjust freely: it can be lowered to $4.50 or even $4, some price where the market will clear perfectly. Note that it's virtually impossible for a seller to calculate $x and have the market clear perfectly, but Austrian economics has no problem with that. As Israel Kirzner explained, supply and demand curves are never static like they're drawn: always in a state of flux, their intersecting point of equilibrium is never precise. But supply and demand curves will eventually gravitate toward that point, based on the purity of their information. Information is where the entrepreneur comes in, the Kirznerian concept more than the Schumpeterian one. The entrepreneur in Austrian economics is not just a risk-bearer, but an arbitrageur of information. Part of his purpose is to search for information, including a comparative advantage in the readiness (like the Boy Scout motto "Be Prepared") to discover new information by happenstance.

When I regularly played Ultima Online (a "massively multiplayer online role-playing game"), I had a "vendor" through which I sold various commodities and specialty items. If I charged too much, my inventory would sell slowly (if at all); if I charged too little, my inventory would sell quickly, but I wouldn't make much. Either way, my profit over time wouldn't make the endeavor worthwhile compared to other things. But how do we define "too much" and "too little"? Very simply: "too much" is above market equilibrium (the price at which it clears), and "too little" is below it. By adjusting my prices based on experience and competition (observing what others charged, which is a form of discovering information), my prices were always approaching market clearing prices.

What I'd like to add about shifting curves is that supply and demand graphs are about total quantities, not individual sales. Single transactions will themselves effect changes in market conditions, a big reason that the curves are always in flux. People make decisions on the margin, not the average, and market conditions are affected by marginal supply and demand, not the average. Five minutes ago, you may not have bought a particular item, deciding there was ample supply to wait a few days. But when you suddenly see (which is a form of discovering information by chance) several people begin to buy nearly all those items on the shelf, and you are uncertain about the inventory, suddenly the remaining ones may become more valuable. As I've pointed out before, even if the official price stayed the same, you now value the item more than the money required to buy it.

Others' purchases do not even need to increase scarcity significantly to change the demand curve: merely seeing someone else's grocery cart (again, a form of discovery) may cause you to buy something you otherwise would not have. Perhaps you didn't know it was stocked at all or that it was at a good price, or seeing it in someone's cart tempted you to buy one for yourself. Regardless, that gain of information is part of competition -- a competition to maximize one's resources, which, as Adam Smith explained, tends to improve society's well-being even when you're thinking only of yourself:
...he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.
In the aforementioned Ultima Online example, if my vendor had just one suit of armor remaining, and I were the only one on the server who was selling such a suit, I could charge a higher price, and someone would be willing to pay it, so long as my price was no higher than that of the armor a step up from mine. However, others would enter the market, offering the same suit as mine (or an equivalent substitute) for less. Whether in the real world or a virtual one, the formerly solo seller may have lost the opportunity for great profit, but it is more than offset, because society gains by having a greater supply of demanded items. The desire for profit spurs people to produce more goods, and to find new ways to create more by expending less, increasing wealth.

Tuesday, February 14, 2006

Happy price gouging day!

Someone once said that Al Capone was the only person to celebrate Valentine's Day properly. After shelling out untold dollars for flowers and candy, I'm sure a lot of us guys feel the same way. Never mind a Senate investigation into Big Oil: year after year, and always reliably, Big Florists engage in the most despicable form of price gouging!

Hmm. Is it really price gouging? After all, it's quite a huge increase in demand, and though the high prices encourage a greater supply (and others to leave their own endeavors to get into the act), growers can plant only so many roses that will be suitably mature by mid-February. As I wrote last August, putting the price of oil in another perspective:
Then there's what most of my fellow gentlemen and I have cursed as the worst form of alleged price gouging: the price of roses leading up to Valentine's Day. But for the reasons above, we can't really complain, especially in terms of minimizing search costs. Higher prices prevent someone from buying out a store's stock of roses because they're only $10 per dozen, when the rest of us would have gladly paid more. I've done my duty and have spent well over $100 for an arrangement of a dozen roses, because at the time I thought they (and she) were worth it. This year I got off fairly easily.
When demand exceeds supply, and prices are allowed to rise, they will gravitate toward a market clearing price. That way there is enough of the scarce resource for those who are willing to pay for it. And as I explained in that entry, high prices greatly reduce (if not eliminate) search costs, because if roses are going for $10 or even $20 per dozen, men will demand far more roses than are available. Thus they will waste a great deal of time in fruitless searches.

Besides, when you're really head over heels for someone, it's worthwhile, or at least it seems that way when you open your wallet, to shell out a C-note and more for a mere dozen roses, arranged and delivered. Now that I mention that, I really feel "spared" this year, because I got off completely. With no real prospects for a date, I thought about asking friends to set me up on a blind one. However, blind dates aren't my style, and besides, that would be a date just for the sake of having a date. Still, no sense not getting into the spirit of things, because I like to wear colors to reflect special days. I rarely wear red, and my only red tie is a little decrepit, so I went shopping last night for a new one. It goes well with the black suit I chose to wear today.

And I must admit, it was quite pleasant at lunchtime to have the extraordinarily fetching cashier at the office cafeteria smile and wish me, "Happy Valentine's Day!" Sometimes it's just the simple things in life.

Monday, February 13, 2006

Talk about bad taste

The Oscars have become that time of the year when so many liberal moonbats gather together, you'd think Cindy Sheehan's protests were moderate. Sometimes the Academy demonstrates such bad taste that you'd wonder how they could judge the difference between "The Godfather" and an Ed Wood film.
Israel lobbies against "Palestine" tag at Oscars

JERUSALEM (Reuters) - Israel and U.S. Jewish groups have lobbied organizers of next month's Academy Awards not to present a nominated film about Palestinian suicide bombers as coming from "Palestine," an Israeli diplomat said on Sunday.

With Israelis and Palestinians locked in conflict over national claims on the same land, the provenance of "Paradise Now" is as combustible an issue as its plot in the run-up to the March 5 ceremony, which will be watched by millions worldwide.

A drama about two men from the occupied West Bank recruited to blow themselves up in Tel Aviv, "Paradise Now" is a contender for the Oscar in the "best foreign film" category.

Many Israelis were irked when the Academy of Motion Picture Arts and Sciences, in publishing the nomination, said "Paradise Now" came from "Palestine."

While the tag remains on the academy's Web site, an Israeli diplomat said he expected the film to be described as coming from the "Palestinian Authority" during the awards ceremony.

"Both the Israeli consulate in Los Angeles and several concerned Jewish groups pointed out that no one, not even the Palestinians themselves, have declared the formal creation of 'Palestine' yet, and thus the label would be inaccurate," the diplomat told Reuters on condition of anonymity.

The academy could not immediately be reached for comment....
Actually, what's really in bad taste is that someone can make a sick film about two murderers, then be nominated for an Oscar. Or that a celebrated director can make an allegedly historically based but bogus film based on pure fiction, with the caveat "Inspired by true events," and be nominated for an Oscar.