Monday, January 31, 2011

What Kind of President Was Eisenhower?

Mises:

The evidence for this militarization begins with massive increases in military spending. As a percent of total budget outlays, military spending went from 30 percent in 1950 to 70 percent in 1957. This was the largest peacetime buildup in American history. During a dramatic economic expansion, the president worked to maintain a high military-spending level as a percentage of the rising GDP — establishing the modern precedent that military socialism is integral to the economic life of the country. Spending rose in absolute terms every year he was president, from $358 billion in 1952 to $585 billion in the last budget for which he bore responsibility in 1962, a whopping 63.4 percent increase during the Eisenhower years.
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Eliminate ROTC

This former Secretary of the Navy has a more efficient way to be statist, but it's still interesting.

Wall Street Journal:
ROTC was begun before World War I to create an officer corps for a large force of reservists to be mobilized in a national emergency. It has outgrown this purpose and evolved into just another source of officers for a military establishment that has integrated regulars and reservists into a "total force" in which the difference is between part-time and full-time soldiering.

The armed services should consider a program modeled in part on the Marine Platoon Leaders Corps to attract the nation's most promising young people. In a national competition similar to ROTC scholarships, students should be recruited for four years of active duty and four years of reserve service by means of all-expenses-paid scholarships to the college or university of their choice. Many would no doubt take these lucrative grants to the nation's most distinguished schools, where they would get top-flight educations and could devote full attention on campus to their studies.

Youths would gain their military training and education by serving in the reserve or National Guard during college (thus fulfilling their reserve obligation). Being enlisted would teach them basic military skills and give them experience in being led before becoming leaders themselves. As reservists during college, they would be obligated to deploy only once, which would not unduly delay their education or commissioned service. They could receive their officer education at Officer Candidate School summer camps or after graduation from college. This program could also be available to those who do not win scholarships but are qualified and wish to serve.

History tells us that the career retention of OCS graduates is essentially the same as that of graduates of the service academies and ROTC. This new program would not only be the least costly method of providing a quality, diverse officer corps but would also attract a variety of students inclined to serve their country, including those outstanding youngsters who want or need money for college but do not want to go to a service academy or be limited to those colleges that have, or are near, ROTC units. The Harvards, Amhersts and Georgetowns of America would probably have more students in military training than they do today or are likely to in the future with ROTC units on campus. And such a program would raise the visibility and attractiveness of military service at the institutions where many of the nation's future leaders are being educated.

Such a system would cost less while attracting more, and more outstanding, youth to military service, spare uniformed officers for a maxed-out military establishment, and reconnect the nation's leadership to military service - a concern since the beginning of the all-volunteer armed force.
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Problems for Electric Cars?

Washington Post:

A change of ten degrees can sap 50% of a battery's output. In some situations the chemical reactions will happen so slowly and give so little power that the battery will appear to be dead when in fact if it is warmed up it will go right back to normal output.
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Has Federal Inflation-Adjusted Spending on Education Doubled in the Past Decade?

Yes. Yes, it has.

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Public private partnerships in transportation

Reason:

Europe and Asia have decades-long histories of tapping into private equity to fund their transportation infrastructure using public-private partnerships. France has virtually its entire limited access highway system under the management of privately-owned firms, including Cofiroute, ASF, APRR, and Sanef. Australia has been tapping into private capital using companies such as Macquarie and Transurban to build tunnels and tollroads in its major cities since the 1990s. Italy and the United Kingdom claimed nearly half of the private investment in public infrastructure between 2003 and 2006 among the 20 nations that make up the Organization for Economic Cooperation and Development (OECD), according to Standard & Poor's.

China may be the most aggressive in using private capital to build its transportation infrastructure. The nation is embarking on an epic road-building program that will match the size of the US Interstate Highway System and be completed in less than half the time. Its expressway network is intended to link all provincial capitals, 80 percent of the nation's population, and 90 percent of the nation's ports, according to a report prepared by the China Construction Bank Corporation (CCBC). Most of these expressways are being financed by tolls, and the tollway companies depend on private capital to finance them.

The US lags behind all of these countries. Just a handful of projects have closed in the US for a fraction of the amount of capital available on the global market, most notably the $3.8 billion Indiana Toll Road and the $1.8 billion Chicago Skyway. In a positive sign, three Greenfield (new) toll road deals were signed recently in California, Texas and Virginia. The combined investment value, however, doesn't even match the Indiana deal. While a consortium of domestic and foreign companies submitted bids to lease the Pennsylvania Turnpike, the winning bid of $12.8 billion is still far from a done deal even though it is strongly supported by Democratic Governor Ed Rendell.
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Friday, January 28, 2011

On Parking Requirements

Informaworld:

We also find that by and large, developers tend to build only the bare minimum of parking required by zoning, suggesting that the minimum parking requirements are binding for developers, as argued by critics, and that developers do not simply build parking out of perceived marked need.
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How did land use regulations affect subprime loans?

Townhall:

Such risky mortgage loans were rare just a few years ago. As of 2002, fewer than 10 percent of the new mortgages in the United States were of this type. But, by 2006, 31 percent of all new mortgages were of this "creative" or risky type.

In the San Francisco Bay Area, 66 percent of the new mortgages were of this type.

Why this difference in times and places? Because housing prices were skyrocketing in some places and times, so that people of modest incomes had to go out on a limb to buy a house, if they expected to buy a house at all.

But why were housing prices going up so fast, in the first place? A number of studies of communities across the United States and in countries overseas turned up the same conclusion: Government restrictions on building.

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Wednesday, January 26, 2011

New Report: Half Billion People Escape Abject Poverty In Past Five Years

Reason:

Laurence Chandy and Geoffrey Gertz, two researchers at the Brookings Institution in Washington, DC, have published an op/ed in today's Washington Post in which they discuss the findings of their new report on global poverty trends. The news is really good.

The economies of the developing world have expanded 50 percent in real terms, despite the Great Recession. Moreover, growth has been particularly high in countries with large numbers of poor people. India and China, of course, but also Bangladesh, Tanzania, Ethiopia, Vietnam, Uganda, Mozambique and Uzbekistan - nine countries that were collectively home to nearly two-thirds of the world's poor in 2005 - are all experiencing phenomenal economic advances.

In the new Brookings Institution report "Poverty in Numbers: The Changing State of Global Poverty from 2005 to 2015," we updated the World Bank's official $1.25-a-day figures to reveal how the global poverty landscape has changed with the emergence of developing countries. We estimate that between 2005 and 2010, nearly half a billion people escaped extreme hardship, as the total number of the world's poor fell to 878 million people. Never before in history have so many people been lifted out of poverty in such a short period. The U.N. Millennium Development Goals established the target of halving the rate of global poverty between 1990 and 2015; this was probably achieved by 2008, some seven years ahead of schedule. Moreover, using forecasts of per capita consumption growth, we predict that by 2015, fewer than 600 million people will remain poor. At that point, the 1990 poverty rate will have been halved and then halved again.

The decline in poverty is happening in all the world's regions and most of its countries, though at varying speeds. The emerging markets of Asia are recording the greatest successes; the two regional giants, China and India, are likely to account for three-quarters of the global reduction between 2005 and 2015. Over this period, Asia's share of the world's poor is anticipated to fall from two-thirds to one-third, while Africa's share is expected to rise to nearly 60 percent. Yet Africa, too, is making advances; we estimate that in 2008 its poverty rate dropped below the 50 percent mark for the first time. By 2015, African poverty is projected to fall below 40 percent, a feat China did not achieve until the mid-1990s.
Markets and globalization are good for whatever ails you (especially if you and your familly are dirt poor). On the other hand, if you happen to be kleptocrat intent on maintaining your subjects in abject poverty, I lay out my never-fail rules for how to achieve and maintain the miracle of poverty in my column, Poor Planning.



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Tuesday, January 25, 2011

Part of What GE Got from the Gov

This is all stuff from the Import-Export bank, one small part of the government. I'm willing to bet they got a wholllleeee lot more.

AEI:

Carney points out that GE spent $66 million lobbying the “we don’t believe in lobbying” Obama administration. Here are a few examples of what they got for their money:

• $86.5 million long-term loan to GE transportation for the sale of diesel-electric locomotives to MRS Logistica in Brazil, March 24, 2009.

• $104.8 million loan guarantee to GE Energy, Houston, for the sale of power generating equipment to Turkey, April 15, 2009.

• $912.8 million loan for the sale of 23 gas turbine generator sets to Saudi Arabia, May 15, 2009.

• $230 million direct loan for the sale of gas and steam turbines in Bahrain, August 28, 2009.

• $20 million loan guarantee for the sale of turbine to Slovakia, February 26, 2010.

• $400 million for a gas and steam turbine to India, November 8, 2010.

Regardless of what the president says in the State of the Union address, his actions suggest that his administration is focused on crony capitalism, and not the real thing.
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Taxi Medallian Statism

Carpe Diem:

Exactly 11,797 taxicabs, for example, are permitted to operate in New York City — a figure that hasn’t budged since World War II. FDR was in his first term as president when Boston decreed that only 1,525 cabs would be permitted on its streets. Other than a few new medallions for wheelchair taxis, 1,525 remains the limit.

The results? Right out of Econ 101: The supply of taxi medallions is far lower than the demand, so their value long ago exploded to obscene levels. Today, the going rate is about $140,000 in New York; about $90,000 in Boston. Those who got medallions when the getting was cheap grew rich. Everyone else got shafted. Would-be cabbies are forced to choose between going deeply into debt to buy a medallion or paying murderous lease rates to somebody who owns one. “In essence,” write Chip Mellor and John Kramer of the Institute for Justice, “cab drivers become urban sharecroppers.”
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How Much Does the US Actually Manufacture?

Mark Perry suggests it may be more than you think.


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The Chinese Economy

I know there are some people who don't want trade reduced with China under any circumstances, but these guys are using unfair rules that we don't apply.

Wall Street Journal:

Start with distorted trade. The New York Times recently reported that Evergreen, a maker of solar panels, is shutting its Massachusetts factory, moving production to a joint venture in China and laying off 800 U.S. workers. Despite $43 million in Massachusetts state aid, Evergreen's chief executive said that China's subsidies - mainly low-interest loans from state-controlled banks - were too great to pass up.
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Thus subsidized, Chinese solar panel production rose fiftyfold from 2005 to 2010, reports GTM, a market analysis company. Cheap bank loans to solar companies total about $30 billion, but it's unclear whether they'll be repaid in full, notes GTM analyst Shyam Mehta. "It could be free money," he says. China's share of global production jumped from 9 to 48 percent. In 2010, about 95 percent of China's solar panels were exported.

With details changed, similar stories apply to many industries. The undervaluation of China's currency, the renminbi, by 15 percent or more magnifies the advantage. Jobs shift to China from factories in the United States, Europe and elsewhere.

Next, consider technology transfer. Big multinational firms want to be in China, but the cost of doing so is often the loss of important technology through required licensing agreements, mandatory joint ventures, reverse engineering or outright theft. American software companies estimate that 85 to 90 percent of their products in China are pirated.

Writing in the Harvard Business Review, Thomas Hout and Pankaj Ghemawat cite China's high-speed-rail projects. Initially, foreign firms such as Germany's Siemens got most contracts; in 2009, the government began requiring foreign firms to enter into minority joint ventures with Chinese companies. Having mastered the "core technologies," Chinese companies have captured 80 percent or more of the local market and compete with foreign firms for exports. The same thing is occurring in commercial aircraft. China is building a competitor to the Boeing 737 and the Airbus 320; General Electric has entered into a joint venture that will supply the avionics, the electronics that guide the aircraft.

Finally, there's finance. China's foreign exchange reserves - earned mainly through massive export surpluses - approached $2.9 trillion at year-end 2010. These vast holdings (which increase by hundreds of billions annually) enable China to expand its influence by sprinkling low-cost loans around the world or making strategic investments in raw materials and companies. The Financial Times recently reported that China - through the China Export-Import Bank and the China Development Bank - has "lent more money to other developing countries over the past two years than the World Bank."
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What Is the US Import Situation?

Cafe Hayek:

And consider that the Bureau of Economic Analysis reports that 55.2 percent of U.S. imports in 2010 were either industrial supplies or capital goods [HT Mark Perry]. That is, well over half of U.S. imports last year were inputs used to produce American-made outputs. Put differently, 55.2 percent of American imports in 2010 were used by American workers to produce American outputs.
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Sunday, January 23, 2011

Solar Regulation

NY Times:

Ken Button, the president of Verengo Solar Plus, a residential solar panel installer in Orange, Calif., says his company — and his industry — are being strangled by municipal red tape.

Fifteen Verengo employees, Mr. Button said, are dedicated solely to researching and tailoring permit applications to meet the bureaucratic idiosyncrasies of the dozens of towns in the company's market. And because most jurisdictions require applications to be submitted in person, Verengo employs two "permit runners" whose only job, Mr. Button said, is to "take those permit packs and physically drive them around, stand in line, and pay the fees."....

In a new study, the industry estimates that the permit dance adds an average of $2,500 in costs to each installation
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How Lies Passed Medicare

Reason.


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Saturday, January 22, 2011

Friday, January 21, 2011

MLK and guns

Huffington Post:

Most people think King would be the last person to own a gun. Yet in the mid-1950s, as the civil rights movement heated up, King kept firearms for self-protection. In fact, he even applied for a permit to carry a concealed weapon.

A recipient of constant death threats, King had armed supporters take turns guarding his home and family. He had good reason to fear that the Klan in Alabama was targeting him for assassination.

William Worthy, a journalist who covered the Southern Christian Leadership Conference, reported that once, during a visit to King's parsonage, he went to sit down on an armchair in the living room and, to his surprise, almost sat on a loaded gun. Glenn Smiley, an adviser to King, described King's home as "an arsenal."
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Are Libertarians More Likely to Push Someone in front of a Train?

You betcha, if it helps more people.

Reason (the entire article is recommended. There's a lot more there):

The researchers also found that libertarians tend to be less flummoxed by various moral dilemmas, such as the famous “trolley problem.” In the trolley problem, five workmen will be killed by a runaway trolley unless you move a track switch which will divert the train but kill one workman—or, in another version, push a fat man off a bridge stopping the trolley. Typically, most people will choose to move the switch, but refuse to push the fat man. Why the difference? The utilitarian moral calculus is the same—save five by killing one. According to the researchers, libertarians are more likely to resolve moral dilemmas by applying this utilitarian calculus.
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A Way to Save Energy or Big Brother?

I'm inclined to say 'way to save money,' but I do get concerns about health issues with all of these rfid cards and sensors everywhere.

Technology Review:

Schneider's goals for its headquarters were straightforward. The average electricity consumption of an office building in Paris is 400 kilowatt-hours per square meter per year. The European Union has directed that all buildings reduce consumption to 50 kilowatt-hours per square meter per year by 2030. Le Hive was meant to demonstrate that the path toward that goal can be quick and relatively painless. The company has reduced its headquarters' energy consumption from more than 300 kilowatt-hours per square meter to 65.
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The Schneider system, dubbed EcoStruxure, started by collecting and analyzing data on the building's energy consumption patterns. Then a series of software and hardware components were installed, all of which can be controlled from a single interface such as a laptop or smart phone. In other words, the heating system, the air-conditioning system, the lighting management system, the security system, the fire control system, the surveillance system, the IT system, and the ventilation system (all of which used to be discrete systems with separate controls and dedicated technicians and managers) are all integrated into a single comprehensive building management system with a single point of control.

Next, RFID cards were distributed to every employee. Each card alerts a sensor system to where the employee is and adjusts the lighting and HVAC systems accordingly. A worker leaves his office for lunch, for instance, and the lights and air-conditioner in that office turn off immediately. He returns and the comfort settings he has requested kick right in. Other sensors turn the artificial lighting up or down in accordance with the available sunlight. Similarly, an automated window shading system adjusts itself in calibration with the cooling, heating, and lighting needs. If the blinds are open and sunlight is streaming in, then the lighting system dims by just the right amount to maintain a consistent environment.

[...]Le Hive is a glimpse into the future of smart buildings. Schneider Electric is probably saving about 150,000 euros a year by reducing energy consumption at its headquarters from more than 300 kilowatt-hours per square meter to 65; at that rate the system would pay for itself within about three years.
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More (legal) accounting fraud

Forbes:

The giant US banks have been bailed out again from huge potential writeoffs by loosey-goosey accounting accepted by the accounting profession and the regulators.

They are allowed to accrue interest on non-performing mortgages ” until the actual foreclosure takes place, which on average takes about 16 months.

All the phantom interest that is not actually collected is booked as income until the actual act of foreclosure. As a resullt, many bank financial statements actually look much better than they actually are. At foreclosure all the phantom income comes off gthe books of the banks.

This means that Bank of America, Citigroup, JP Morgan and Wells Fargo, among hundreds of other smaller institutions, can report interest due them, but not paid, on an estimated $1.4 trillion of face value mortgages on the 7 million homes that are in the process of being foreclosed.

Ultimately, these banks face a potential loss of $1 trillion on nonperforming loans, suggests Madeleine Schnapp, director of macro-economic research at Trim-Tabs, an economic consulting firm 24.5% owned by Goldman Sachs.

Public unions and bankruptcy

Law.com (March, 2009):

In the first ruling of its kind, a bankruptcy judge held the city of Vallejo, Calif. has the authority to void its existing union contracts in its effort to reorganize, holding public workers do not enjoy the same protections Congress gave union workers at private companies.

Municipal bankruptcy is so rare that no judge had yet ruled on whether Congressional reforms in the 1990s that required companies to provide worker protections before attempting to dissolve union contracts also applied to public workers' union contracts.

[...]He said the unfunded pension liabilities for states and cities was $800 billion a few years ago and may be at $1 trillion today. "The question is whether it is an inability to pay or an unwillingness to pay. If municipalities can't provide basic services and still pay labor costs or pensions then that is a real issue," Spiotto said.
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Monday, January 17, 2011

China and the problem of current IP laws

Milwaukee Journal-Sentinel:

A year and a half after President Barack Obama appointed an IBM Corp. executive to fix the U.S. Patent and Trademark Office, its problems by several key measures have only worsened, as damage inflicted by years of congressional raids on its funding continues to make it all but impossible for the agency to keep up with its workload.

The result: More than 1.2 million patent applications, filed by inventors and entrepreneurs ranging from major corporations to garage tinkerers, are still awaiting final decisions, a number nearly unchanged from the levels of the past three years.

Also unchanged is a bureaucracy that publishes entire patent applications online 18 months after they are filed, whether or not they have been acted upon - and most often they have not, because the agency is so far behind.

That puts American ingenuity up for grabs, free to anyone with an Internet connection.

"In China, there are thousands of engineers who don't work in laboratories inventing new technologies," said Paul Michel, recently retired chief justice of the federal court in Washington, D.C., that handles patent cases. "They sit in computer rooms reading U.S. patent applications on the Internet. And they can use the technology anywhere in the world, including in America, for free.

"American economic security is threatened in a way Congress has failed to recognize," Michel said.

The Patent Office is meant to act as steward of the nation's newest and most competitive technologies, granting protection to innovative new products so their developers can commercialize them.

But beginning in the 1990s, Congress got into a nearly two-decade habit of draining funds from the agency, which is structured to be self-supporting by charging fees. So just as patent applications have become more and more complex because of the advance of technology, and as global competition exploded, the Patent Office found itself underfunded and understaffed.

Applications now languish so long that technologies can become obsolete before a patent is ruled upon. And the absence of patent protection in some cases allows infringers to steal new technologies, while legitimate inventions are unable to get licensed and start-ups are unable to get funding.

Consider:

• The agency took 3.82 years on average for each patent it issued last year, up from 3.66 years in 2009 and 3.47 in 2008, according to an analysis of Patent Office data. That's well over twice the agency's traditional benchmark of 18 months to deal with a patent request. And many took years longer.

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Keynes identifies the problem with central planning

Then dances around it.

Cafe Hayek:

Characteristically, Keynes deferred a statement of the basic assumptions of of his fundamental model until the eighteenth chapter of his book, where they are often overlooked. Yet everything in his model depends upon these assumptions, and I am sure that if their limited nature were more widely recognized, Keynes’ conclusion would have far less prestige. The crucial passage runs as follows:

“We take as given the existing skill and quantity of available labour, the existing quality and quantity of available equipment, the existing technique, the degree of competition, the tastes and habits of the consumer . . . the social structure including the forces. . . which determine the distribution of the national income. This does not mean that we assume these factors to be constant; but merely that, in this place and context, we are not considering or taking into account the effects and consequences of changes in them” (italics supplied [by Wright]).

This passage (some of the more technical sentences are omitted) assumes in effect that (i) there is no technical change or invention, (ii) there is no change in taste, (iii) there is no change in population or resources, and (iv) there are no changes in the preferences of the population between work and goods, on the one hand, and leisure, on the other. These assumptions, it will be seen, in effect “freeze” the system, and practically every dynamic element of capitalist civilization is removed. Of course, as he explains, Keynes did not mean that these forces were always lacking in reality. But what he did mean, and the point cannot be too often stressed, is that in the basic model on which his system rests, virtually all the dynamic social forces are omitted.



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Friday, January 14, 2011

How much do budget restrictions curb government spending?

City Journal:

A 1982 study published by James Bennett and Thomas DiLorenzo in Public Choice found that budget restrictions enacted in 32 states in the 1970s did little to reduce public spending because state and local pols simply moved billions of dollars off-budget into quasi-governmental entities, largely controlled by political appointees. “The principal reason for the establishment of OBEs [off-budget enterprises] in the U.S. has been to bypass the wishes of the electorate whenever the voters express a demand for fiscal restraint,” the authors noted in their groundbreaking paper. Today, only about half of all state government revenues makes it into states’ main accounts and is subject to budget mandates. The rest flows into the off-budget enterprises, where voter-imposed fiscal restrictions don’t apply.

[...]From 2004 through 2008, the states jacked up spending by nearly 35 percent, or about double the rate of inflation plus population growth. Then came the post-2008 economic downturn, and tax revenues plunged. Since late 2008, therefore, states have faced accumulated budget deficits of some $300 billion. Federal stimulus money helped cover about two-thirds of that yawning gap, but legislators have had to close the rest themselves. Many have resorted to methods that New York State’s comptroller calls a “fiscal shell game.”
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MIT students mostly libertarian?

LP Blog:

The Tech, Massachusetts Institute of Technology’s oldest and largest newspaper, released the results from its political survey conducted last year. A total of 20% of the school’s undergraduate and graduate population responded to the questionnaire from October 2010.

The results show that 23% of the respondents consider themselves libertarian. Of that group, 35% believe that the Libertarian Party best represents their political views. That is compared to the 9% who believe that the Republican Party best represents them and the 23% who chose the Democratic Party.

The survey also shows that the plurality, about 38%, of libertarians on MIT’s campus consider themselves to be more moderate with their political views. Most respondents favored fiscal conservatism while also considering themselves to be either “liberal” or “very liberal” in regards to social values.
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Thursday, January 13, 2011

Meredith Whitney on State and local finances

Wall Street Journal:

On a recent broadcast of CBS's "60 Minutes," Meredith Whitney, a banking analyst who recently turned to analyzing state and local finances, said the U.S. could see "50 to 100 sizable defaults," in 2011 amounting to "hundreds of billions of dollars."
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Man faces truancy fines for his daughter ...who has run away

Whenever I see people with eyes like this principal's, I know they're evil. ...Especially when it comes with that fake, plastered-on smile.


Father facing fines for teen's truancy: kxan.com



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Wednesday, January 12, 2011

Competitive contracting

Center for American Progress:

Yet there are clear indications that serious contract abuse has become a widespread problem affecting programs and agencies across the entire government and involving tens of billions of dollars in federal funds annually. Non-competitive contracting has more than doubled during the first half of this decade. And just during the last three years more than five federal officials have been convicted of crimes involving federal contracting, three others were placed under indictment, and more are under investigation.

Contractors play a central role in the delivery of critical government services, and their work has a direct and immediate impact on everything from the protection of public health and the flow of commerce to the preservation of our national security. Corrupt and ineffective management of government purchasing therefore places all of the government’s responsibilities at risk.
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Monday, January 10, 2011

The nightmare that will be the new health insuarance law

Reason:

Lots of people expected that the high-risk pools created by the new health care law would turn out to be underfunded. Medicare’s chief actuary, Richard Foster, warned that the state-based health insurance plans, which were designed to provide coverage for individuals with preexisting conditions, would run out of money in 2012, and possibly sometime this year. And a number state governors warned that the program could become a fiscal liability.

Part of the thinking was that the pools might become deluged by a flood of individuals wanting to enroll. After all, these plans allowed individuals to sign up regardless of preexisting conditions, but at rates that weren’t substantially higher than a typical individual market plan. Foster estimated that about 375,000 individuals would sign up for the plans. Instead, so far, just 8,000 people have signed up for the plans, according to a December report in The Washington Post. A number of state plans have fewer than 100 members. Yet somehow that hasn’t entirely prevented fiscal problems:

Montana is one of a few states in which the medical bills from those who have joined are huge. New Hampshire's plan has only about 80 members, but they already have spent nearly double the $650,000 the state was allotted in federal money to help run the program, said J. Michael Degnan, its director.

The spending, Degnan speculated, might slow down if it turns out that the early bills reflected a burst of pent-up need for care. HHS agreed to give New Hampshire more money, he added.
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Sunday, January 9, 2011

Is it possible to privatize a library?

Reason:

Back in 1997, Riverside County became the first municipal government in California—and the nation—to contract with a private library operator, entering a partnership with LSSI that is still in place today. In June 2010, the county published a report on the first 13 years of the partnership, highlighting an array of benefits that include decreased operating costs ($900,000 in the first year alone), over $15 million invested in new facilities and renovations, significant investments in new library technology, and a doubling in operating hours, circulation and staffing.
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Jane Jacobs on how to revitalize cities

Reason:

Reason: What do the people who run cities have to do now to make their cities into more livable, more interesting places? Is it to remove some of the things they've done in the last 50 years, or just keep their hands off completely?

Jacobs: It's much less a matter of removing things than adding things, I think. For instance, here in Toronto there were two areas of the downtown that were dying. They were in very good locations but they were old industrial buildings that were becoming vacant. Manufacturing was moving out to where they had more room and where it wasn't as expensive. There were a lot of small developers who saw that these nice old buildings were just ideal for converting into apartments. They were lofts, mostly, and you know how popular they've become. But they were blocked from doing anything about it because of use zoning that said it should be industrial. So you can change that use zoning and allow residential.

Reason: But aren't you then just removing an impediment? Some people say zoning is the big problem.

Jacobs: Wait a minute, I haven't finished. It didn't help to change that use because, again, there were so many impediments that went with it. There were rules and regulations about dwellings -- especially parking places. And the ground coverage in these areas was high, and you couldn't make basements under these nice old buildings. You couldn't satisfy the parking requirements without fairly well destroying what was really nice about the areas and also making it just too expensive. So no matter what happened, they were blocked.

We had a very intelligent mayor at that time, and she listened to what they were saying. And she wanted to remove those impediments. She talked to everybody who had an interest in the area and they agreed that these buildings should be put to the additional use. But they were all so stymied in their thinking about, How do you make it practical?

Well, you're smart. You've already jumped to the conclusion of what makes it practical -- you remove the impediments. The mayor's hardest job was re-educating the planning department, but she did it. They added one new rule, and you might not like this. But it was a very important rule to add: None of the sound old buildings could be destroyed. That was to prevent environmental and aesthetic waste. Otherwise, except for the safety and fire codes, which apply to all the buildings, just about all the old regulations were removed.

Reason: And what happened?

Jacobs: It's magical, it's wondrous, how fast those areas have been blossoming and coming to life again.

It wasn't just removing impediments. It was a use that was missing in the mixture. It didn't replace all the working places. A lot of the working places hadn't disappeared yet, and new ones have come in and been allowed to be added. Also, there are other things that the people who now live there, in combination with the people who work there, can support. The main thing missing in the mixture was added. The same principle you can apply to languishing bedroom communities. What's missing there is workplaces. Here's why I don't like segregation into night things and day things: You don't get the additional things that the workers and the people living there support jointly.
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Saturday, January 8, 2011

Czech doctors go for broke

BBC:

Dozens of Czech hospitals could find themselves struggling to provide basic care on 1 March after almost 4,000 doctors – one quarter of the total number working in the country’s hospitals – tendered their resignations in protest at low wages.

The resignations are being co-ordinated by the doctors’ union (Lok), which says successive Czech governments have done nothing to improve doctors’ salaries since the fall of communism.

Peter Papp, 31, is an oncologist working at a hospital in Usti nad Labem, an industrial city about an hour’s drive north of Prague. He spent six years at medical school followed by three years on the cancer wards of two district hospitals.

With maximum overtime, Dr Papp’s gross salary is $1,165 (£750, 880 euros) per month, well below the national average.

After tax, health and social insurance payments, he takes home around $900 dollars, less than a car mechanic or waiter.

With rent in the Usti area at around $350 per month, he is left with slightly more than $500 to feed, clothe, transport and entertain himself. After devoting the last nine years of his life to medicine, Dr Papp has had enough.

“I’m not willing to work for the salary of a McDonald’s employee,” he told me, pointing out that he had made more money teaching English to pay his way through medical school.
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Friday, January 7, 2011

How to revitalize a city through zoning

A must-read for people interested in local issues.

Wall Street Journal:

Anaheim's old downtown was obliterated in the 1970s through past uses of eminent domain and urban renewal. Now, the city (population: 328,000) wants to build a new downtown, and the target location is called the Platinum Triangle, an area of one-story warehouses near Angel Stadium. In the typical world of redevelopment, officials would choose a plan and a developer, offer subsidies and exclusive development rights, and exert pressure on existing property owners to leave the area. Instead, Anaheim created a land-value premium by creating an overlay zone that allowed almost any imaginable use of property. Because current owners could now sell to a wider range of buyers, the Platinum Triangle is booming, with billions in private investment, millions of square feet of office, restaurant and retail space, and more than a dozen new high-rises in the works.

The area is developing quickly, without controversy and without a single piece of property taken by eminent domain. Early signs point to an enormous success. "Too often, I hear my colleagues in local government . . . say that Kelo-type eminent domain and redevelopment policies are their only tools to revitalize cities," Mr. Pringle recently said. "I have a simple message . . . Visit the Platinum Triangle."

The previous planning commission and city council were harsh on small businesses seeking variances; the new council (which took office in December 2002) began overturning one commission decision after another, with the goal of giving local residents and businesses as much leeway as possible.

The council waived fees for homeowners undertaking renovations, on the grounds that the city would gain in the long run by the increase in property taxes. Anaheim also waived fees for business start-ups for three months; some 2,000 new businesses formed in 2005, an increase of one-third from the previous year. It also passed a tax amnesty and eliminated business taxes altogether for home-based businesses. Most cities don't like to allow churches to build new worship centers, because tax-exempt churches typically locate in commercial and industrial areas, taking properties off the tax rolls. Anaheim has eliminated most hurdles for approving new churches. Its housing plan also avoids "inclusionary zoning"--an increasingly popular approach to mandate that builders set aside certain amounts of "affordable" housing.
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How education has changed since the 1950's

Lew Rockwell:

It was a different time, good and bad. Elected in 1952, Eisenhower was still president. Unemployment was low. Anyone wanting work found it. Most years the economy grew during a post-WW II expansion. Inflation was low. The average new car cost $1,500, a typical home under $10,000. College was affordable. Harvard's 1952 full year tuition was $600. Four years later it was $1,000 – for a full, two-semester year. During the period, anyone could attend evenings at $5 a course and get a Harvard degree for about $175, astonishing but true.
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Monday, January 3, 2011

NC gas taxes?

Squall Lines:

Worth noting are the taxes here in NC on a gallon of gas. As of April, 2010, gas taxes totaled 48.6 cents per gallon. That is the second highest tax in the ENTIRE southeast from Texas to Virginia. Only Florida was higher.
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Sunday, January 2, 2011

Raising taxes to meet pension shortfalls?

Mish:

Gary, Indiana twice received special permission from the state to raise taxes to meet funding requirement. The result is taxes are higher and Gary is still broke. Instead, Indiana, one of 26 states that do not allow municipal bankruptcies, is about to.
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Privatize trash collection?

National Review:

As the Mackinac Center for Public Policy in Michigan reported: “The largest study ever conducted on outsourced garbage collection, conducted by the federal government in the 1970s, reported 29 to 37 percent savings in cities with populations over 50,000. A 1994 study by the Reason Foundation discovered that the city of Los Angeles was paying about 30 percent more for garbage collection than its surrounding suburbs, in which private waste haulers were employed. A 1982 study of city garbage collection in Canada discovered an astonishing 50 percent average savings as a result of privatization.”

Completely privatized trash collection means city residents don’t get socked with the bill for fraudulently engineered overtime pay, inflated pensions, and gold-plated health benefits in perpetuity — not to mention the capital and operating costs of vehicles and equipment.
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