Monday, February 28, 2011

Union Facts

National Review:

Nearly 90 percent of government employees in the United States are employed at the state and local level. A very large number of them, many millions, belong to public-sector unions. State and local bureaucrats are much more likely to be unionized than federal bureaucrats — more than twice as likely, in fact; 19 percent of federal workers are unionized, but 30 percent of state workers are, and 43 percent of local workers. These are very high levels of unionization across the board — only 8 percent of private-sector workers are union members — but much, much higher at the state and local level. That is significant because, contra Polman, McCartin, and the bulk of the Democratic commentariat, these unions do not influence public policy mainly through engaging in collective bargaining. They influence it by determining the outcome of elections.

And “determining the outcome” is no overstatement. Many union critics in the past few days have referenced Stanford professor Terry M. Moe’s fascinating paper “Political Control and the Power of the Agent,” published by the Journal of Law, Economics, and Organization in 2005, citing a single extraordinary fact: In the elections Professor Moe studied, union support was as valuable as incumbency in determining winners.

[...]In Texas, for instance, the teachers’ unions are an extraordinarily powerful political force, with the Texas State Teachers’ Association running an influential PAC that reliably doles out great heaps of money, largely to Democrats, in multi-thousand-dollar increments. How powerful is the TSTA? Powerful enough that it was able to persuade school districts to use their payroll departments to collect PAC donations out of teachers’ paychecks, in violation of state law. Meditate on that for a second: These weren’t union dues being deducted out of government employees’ paychecks, but PAC donations.
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Bloomberg vs. Bloomberg

Future of Capitalism:

Mayor Bloomberg writes in a New York Times op-ed: "unions also play a vital role in protecting against abuses in the workplace, and in my experience they are integral to training, deploying and managing a professional work force."

Whatever experience Mr. Bloomberg is referring to, it isn't his experience at Bloomberg LP, the company that made him his fame and fortune. That's a non-union shop that has somehow managed to train, deploy, and manage a professional work force (or at least professional enough to make Mr. Bloomberg a billionaire many times over, notwithstanding our complaints here from time to time about its news coverage) without unions.
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Friday, February 25, 2011

Why the Koch Brothers Are Disgusting

I think.

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How Much Should America Spend on Health Care?

The entire article is recommended.

In 2007, MIT’s Amy Finkelstein found that the introduction of Medicare—and the subsequent increase in health insurance coverage—correlated with a 23 percent rise in hospital spending between 1965 and 1970. As Medicare matured, its influence on spending seems to have grown larger. Finkelstein estimated that Medicare ended up being responsible for about 40 percent in the massive rise of health spending between 1950 and 1990. The actual health benefits, though, were unclear: In a follow-up Wall Street Journal op-ed, Finkelstein noted that although Medicare did help prevent income shocks to the elderly, it “did not have any effect at reducing elderly mortality in its first 10 years of existence.”

The health benefits of other government-run health coverage programs are similarly dubious—as even some of the administrators in charge of the programs will admit. For example, as Cato’s Michael Cannon noted a while back, in 2008, one of Indiana’s health policy officials wrote a letter to the journal Health Affairs noting that despite holding what he describes as an “almost religious conviction that the State Children's Health Insurance Program (SCHIP) is effective public policy,” he admits to having “no empirical evidence to support the assertion that SCHIP is a beneficial and effective way to invest in children's health.” That leap of faith—that more coverage is nearly always better—describes a lot of how U.S. health policy ends up being conducted: In 2009, President Obama signed an SCHIP expansion into law.
Washington Post:

At roughly 21% of total state spending, Medicaid is already the single largest item in state budgets, according to the National Association of State Budget Officers. Between 2008 and 2009 (the latest year for which figures are available), annual spending growth on the program nearly doubled, growing to 9% from 4.9%.

Medicaid currently covers 53 million people at an overall cost of $373.9 billion (states are responsible for about half). But starting in 2014, ObamaCare rules will add about 20 million more, according to Richard Foster, the program's chief actuary.

From 1974 to 1982 this experiment spent about $50 million to randomly assign over two thousand non-elderly families in six U.S. cities to three to five years of a specific medical price, ranging from free to full price, provided by the same set of doctors. (See the 1983 Brook et. al. New England Journal of Medicine article, and the 1996 Newhouse et. al. book Free for All?) The experiment’s random assignments allowed it to clearly determine causality. Being assigned a low price for medicine caused patients to consume about 30% (or $300) more in per-person annual medical spending, though less for hospital spending and more for dental and “well care.”
Amy Finkelstein:

The results therefore imply that the introduction of Medicare is associated with a nationwide increase between 1965 and 1970 in admissions and total spending of, respectively, 46 percent ([exp(0.504 0.75) 1]), and 28 percent ([exp(0.332 0.75) 1]).

[...]Consistent with the presence of spillovers, several studies have found that, controlling for an individual’s own insurance, average insurance coverage in a
hospital or physician practice is systematically correlated with treatment intensity and spending on the individual.

[...][I]f Medicare induces a hospital to incur the fixed cost of adopting a new technology, the new technology, once adopted, may also be used on nonelderly individuals.

[...]If Medicare sufficiently increases aggregate demand for hospital care, it may induce new hospitals to incur the fixed costs associated with market entry. Medicare may also affect hospital exit if, for example, increased market size increases the minimum efficient scale of a hospital, thereby inducing smaller hospitals to exit.

[...]The results are shown in Table VI. They suggest that the introduction of Medicare had a statistically significant effect on hospital entry.

[...][P]rior to 1965 indicate that, on average, five years after opening, a hospital’s spending is only about 40 percent that of pre-existing hospitals. [...]Medicare-induced hospital entry may be responsible for an 18 percent increase in hospital spending, or about half of the overall 37 percent Medicare-induced increase in hospital spending.

[...]The geographic adoption pattern of each cardiac technology is statistically
significantly more skewed toward areas more affected by Medicare than the geographic adoption pattern of its control technologies.

[...]Extrapolating from this relationship implies that the 50 percentage point decrease in coinsurance rates between 1950 and 1990 would increase spending by 264 percent. The overall spread of insurance may therefore be able to explain half of the six-fold increase in real per capita health spending over this period.

[...]Moreover, the suggestive evidence of an impact of Medicare on technology adoption raises the possibility that the increased market size for new technologies may have increased the incentives to develop new technologies, and thus the subsequent arrival rate of new technologies, as conjectured by Weisbrod [1991].

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Health Marts

My San Antonio:

With the Texas state budget in crisis, is there anything beneficial the legislature can do that would not cost anything? Yes, there sure is. Lawmakers can significantly improve access to health care and save their constituents money, at no cost to taxpayers.

All they have to do is add Texas to the list of 35 other states that allow advanced practice nurses to diagnose and prescribe without the oversight of doctors. The move would open the door to more retail health clinics in the state because clinic operators, such as the Walgreen Co. and CVS Caremark chains, no longer would have to pay a doctor a large fee to oversee each clinic.
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How Has Spending Varied Among the Poor and Richest?

Real Clear Markets:

The average annual spending for a household in the lowest quintile was $21,611, or $12,712 per person. In contrast, the average spending for a household in the top quintile was $94,244, or $30,401 per person.
On a per person basis, the new Labor Department numbers show that in 2009 households in the top fifth of the income distribution spent 2.4 times the amount spent by the bottom quintile. That... was about the same as 20 years ago.

...compared with 1989, the big winners are the lowest-income group, which spent 9.1% more per person in constant dollars. In contrast, the highest group spent 2.6% more, and the middle group increased its spending by 1.1%. Income and spending do not tell the whole story about how well Americans are doing. A higher percentage of low-income Americans own their homes free of mortgage debt than do upper-income Americans....
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Goldman Sach and Your Money

Huffington Post:

Goldman Sachs collected $2.9 billion from the American International Group as payout on a speculative trade it placed for the benefit of its own account, receiving the bulk of those funds after AIG received an enormous taxpayer rescue, according to the final report of an investigative panel appointed by Congress.

The fact that a significant slice of the proceeds secured by Goldman through the AIG bailout landed in its own account--as opposed to those of its clients or business partners-- has not been previously disclosed. These details about the workings of the controversial AIG bailout, which eventually swelled to $182 billion, are among the more eye-catching revelations in the report to be released Thursday by the bipartisan Financial Crisis Inquiry Commission.
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Thursday, February 24, 2011

Army Deploys Psy-Ops on U.S. Senators

According to Holmes, the general wanted the [Information Operations] team to provide a "deeper analysis of pressure points we could use to leverage the delegation for more funds." The general's chief of staff also asked Holmes how Caldwell could secretly manipulate the U.S. lawmakers without their knowledge. "How do we get these guys to give us more people?" he demanded. "What do I have to plant inside their heads?"
via Gizmodo.

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How Much of Americans' Income Goes to State and Local Taxes?

NC is the 16th highest at 9.8%, which is the national average, but I guess they're weighting things by population.

Tax Foundation:

The nation as a whole paid 9.8% of its income in state and local taxes, down slightly from 9.9% in 2008 and down significantly from 10.4% in 1977, the earliest year for which the Tax Foundation has done such estimates. While it is useful and informative to look at the national trend, burdens among the states can vary widely. Taxpayers in high-tax New Jersey, for example, pay almost twice the state-local tax rate as those in Alaska, the state with the lowest burden.
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Wednesday, February 23, 2011


Or not.

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DOMA and How Much Authority Does the President Have Over the DOJ?

This, of course, is good new, but it makes me angry that the Obama administration waited so long, when it was clearly just a choice. They're doing other stuff like this with torture right now.


After careful consideration, including a review of my recommendation, the President has concluded that given a number of factors, including a documented history of discrimination, classifications based on sexual orientation should be subject to a more heightened standard of scrutiny. The President has also concluded that Section 3 of DOMA, as applied to legally married same-sex couples, fails to meet that standard and is therefore unconstitutional. Given that conclusion, the President has instructed the Department not to defend the statute in such cases. I fully concur with the President’s determination.
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How Bad Laws Are Made

Because my barber told me so.

Carolina Journal:

As North Carolina lawmakers grapple with closing an estimated $2.4 billion budget deficit, four-term Sen. Doug Berger, D-Franklin, has introduced a bill making it illegal for anyone who is not a registered barber to use or display a barber pole. Berger said he introduced the bill because his barber told him the legislation was needed.

[...]In a phone interview, Berger said his barber, Elbert “Spooky” Oakley of Butner, told him “it’s a problem because [barbers] lose business when people who aren’t barbers use a barber pole to advertise,” Berger said.

[...]It takes from one to two years to become a licensed cosmetologist or barber in North Carolina; the cost of an educational program varies from $3,000 to $10,000. Once schools or individuals are licensed, they must complete continuing education courses as prescribed by their respective boards and renew their licenses annually.

Current law, for example, requires individuals to complete 1,528 classroom hours and pass a written and practical exam before being issued an apprentice barber license. To become a registered barber, an individual also must complete a 12-month apprenticeship under the supervision of a registered barber and pass a practical exam.

Barbershops and barber schools are also state regulated, with requirements and fees for licensing, inspections, examinations, education, and continuing education. The inspection fee is $120 for a newly established barbershop and $220 for a newly established barber school. Teachers must be licensed. The examination fee to become a registered apprentice barber is $85, with an additional $85 required for the examination to become a registered barber.
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A Bit of History on Public Unions

National Review:

Traditional, private-sector unions were born out of an often-bloody adversarial relationship between labor and management. It’s been said that during World War I, U.S. soldiers had better odds of surviving on the front lines than miners did in West Virginia coal mines. Mine disasters were frequent; hazardous conditions were the norm. In 1907, the Monongah mine explosion claimed the lives of 362 West Virginia miners. Day-to-day life often resembled serfdom, with management controlling vast swaths of the miners’ lives. Before unionization and many New Deal–era reforms, Washington had little power to reform conditions by legislation.

Government unions have no such narrative on their side. Do you recall the Great DMV Cave-in of 1959? How about the travails of second-grade teachers recounted in Upton Sinclair’s famous schoolhouse sequel to The Jungle? No? Don’t feel bad, because no such horror stories exist.

Government workers were making good salaries in 1962 when President Kennedy lifted, by executive order (so much for democracy), the federal ban on government unions. Civil-service regulations and similar laws had guaranteed good working conditions for generations.

The argument for public unionization wasn’t moral, economic, or intellectual. It was rankly political.

Traditional organized labor, the backbone of the Democratic party, was beginning to lose ground. As Daniel DiSalvo wrote in “The Trouble with Public Sector Unions,” in the fall issue of National Affairs, JFK saw how in states such as New York and Wisconsin, where public unions were already in place, local liberal pols benefited politically and financially. He took the idea national.

The plan worked perfectly — too perfectly. Public-union membership skyrocketed, and government-union support for the party of government skyrocketed with it. From 1989 to 2004, AFSCME — the American Federation of State, County, and Municipal Employees — gave nearly $40 million to candidates in federal elections, with 98.5 percent going to Democrats, according to the Center for Responsive Politics.

Why would local government unions give so much in federal elections? Because government workers have an inherent interest in boosting the amount of federal tax dollars their local governments get. Put simply, people in the government business support the party of government. Which is why, as the Manhattan Institute’s Steven Malanga has been chronicling for years, public unions are the country’s foremost advocates for increased taxes at all levels of government.

And this gets to the real insidiousness of government unions. Wisconsin labor officials fairly note that they’ve acceded to many of their governor’s specific demands — that workers contribute to their pensions and health-care costs, for example. But they don’t want to lose the right to collective bargaining.

But that is exactly what they need to lose.

Private-sector unions fight with management over an equitable distribution of profits. Government unions negotiate with friendly politicians over taxpayer money, putting the public interest at odds with union interests, and, as we’ve seen in states such as California and Wisconsin, exploding the cost of government. California’s pension costs soared 2,000 percent in a decade thanks to the unions.
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Tuesday, February 22, 2011

Coins and the Debasement of the Currency in Colonial America


There is no need to have a national government monopolize the coinage, and indeed foreign gold and silver coins constituted much of the coinage in the United States until Congress outlawed the use of foreign coins in 1857. Thus, if a free market is allowed to prevail in a country, foreign coins will circulate naturally. Silver and gold coins will tend to be valued in proportion to their respective weights, and the ratio between silver and gold will be set by the market in accordance with their relative supply and demand.

Shilling and Dollar Manipulations

By far the leading specie coin circulating in America was the Spanish silver dollar, defined as consisting of 387 grains of pure silver. The dollar was divided into "pieces of eight," or "bits," each consisting of one-eighth of a dollar. Spanish dollars came into the North American colonies through lucrative trade with the West Indies. The Spanish silver dollar had been the world's outstanding coin since the early 16th century, and was spread partially by dint of the vast silver output of the Spanish colonies in Latin America. More important, however, was that the Spanish dollar, from the 16th to the 19th century, was relatively the most stable and least debased coin in the Western world.[2]

Since the Spanish silver dollar consisted of 387 grains, and the English shilling consisted of 86 grains of silver, this meant the natural, free-market ratio between the two coins would be 4 shillings 6 pence per dollar.[3]

Constant complaints, both by contemporaries and by some later historians, arose about an alleged "scarcity of money," especially of specie, in the colonies, allegedly justifying numerous colonial paper-money schemes to remedy that "shortage." In reality, there was no such shortage. It is true that England, in a mercantilist attempt to hoard specie, kept minting for its own prerogative and outlawed minting in the colonies; it also prohibited the export of English coin to America. But this did not keep specie from America, for, as we have seen, Americans were able to import Spanish and other foreign coin, including English, from other countries. Indeed, as we shall see, it was precisely paper-money issues that led, by Gresham's law, to outflows and disappearance of specie from the colonies.

$30 $25

In their own mercantilism, the colonial governments early tried to hoard their own specie by debasing their shilling standards in terms of Spanish dollars. Whereas their natural weights dictated a ratio of 4 shillings 6 pence to the dollar, Massachusetts, in 1642, began a general colonial process of competitive debasement of shillings. Massachusetts arbitrarily decreed that the Spanish dollar be valued at 5 shillings; the idea was to attract an inflow of Spanish silver dollars into that colony, and to subsidize Massachusetts exports by making their prices cheaper in terms of dollars. Soon, Connecticut and other colonies followed suit, each persistently upping the ante of debasement. The result was to increase the supply of nominal units of account by debasing the shilling, inflating domestic prices and thereby bringing the temporary export stimulus to a rapid end. Finally, the English government brought a halt to this futile and inflationary practice in 1707.

But the colonial governments had already found another, and far more inflationary, arrow for their bow: the invention of government-fiat paper money.
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How Cities Increase Wealth

Wall Street Journal:

[W]ith their wealth of connections, cities naturally generate the most wealth. On average, Glaeser notes, as the share of a country’s population that’s urban goes up 10 percent, the entire country’s per capita output rises 30 percent. In the U.S., workers in metropolitan areas with big cities earn 20 percent more than workers outside metro areas. And the income gap, city versus country, is even stronger in poor countries.
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Common Cause, Funded by Billionaires, Criticizes Other Billionaires

The whole article is recommended.

Future of Capitalism

What Common Cause is is a bunch of millionaires and billionaires trying to prevent other millionaires and billionaires from participating in the political process the same way they do. In other words, they are hypocrites.
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Body Scanners, TSA: Worthless


An undercover TSA agent was able to get through security at Dallas/Fort Worth International Airport with a handgun during testing of the enhanced-imaging body scanners, according to a high-ranking, inside source at the Transportation Security Administration.

The source said the undercover agent carried a pistol in her undergarments when she put the body scanners to the test. The officer successfully made it through the airport’s body scanners every time she tried, the source said.

[...]The TSA insider who blew the whistle on the test also said that none of the TSA agents who failed to spot the gun on the scanned image were disciplined. The source said the agents continue to work the body scanners today.
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Monday, February 21, 2011

Are Police Search Dogs Reliable?

Another great one by Radley Balko. The entire thing is recommended.


Several studies and tests have shown that drug-sniffing dogs, scent hounds, and even explosive-detecting dogs are not nearly as accurate as they have been portrayed in court. A recent Chicago Tribune survey of traffic stops by suburban police departments from 2007 to 2009, for example, found that searches turned up contraband in just 44 percent of the cases where police dogs alerted to the presence of narcotics. (An alert is a signal, such as barking or sitting, that dogs are trained to display when they detect the target scent.) In stops involving Hispanic drivers, the dogs' success rate was just 27 percent. The two largest departments the Tribune surveyed—the Chicago Police Department and the Illinois State Police—said they don't even keep track of such information.

But don't blame the dogs; their noses work fine. In fact, the Pentagon’s Defense Advanced Research Projects Agency recently conceded, after 12 years and millions of dollars of research, that the canine snout, fine-tuned by millions of years of evolution, is still far more sensitive and reliable than any technology man has been able to muster when it comes to detecting explosives in places such as Iraq and Afghanistan.

[...]The results? Dog/handler teams correctly completed a search with no alerts in just 21 of the 144 walk-throughs. The other 123 searches produced an astounding 225 alerts, every one of them false. Even more interesting, the search points designed to trick the handlers (marked by the red slips of paper) were about twice as likely to trigger false alerts as the search points designed to trick the dogs (by luring them with sausages).

[...]In 2006 University of North Carolina law professor Richard Myers conducted a statistical analysis (PDF) of police dog accuracy tests and concluded that the animals were not reliable enough to produce probable cause for a search, let alone serve as the cornerstone of a conviction. At least five states have banned or restricted the use of scent lineups in criminal cases, but they are still frequently used in courtrooms across the country.
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Wisconsin Video

I don't know too much about what's going on in Wisconsin, but I thought this video was interesting.

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High Speed Rail Hocus Pocus


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FDR Was Really Against Public Unions


All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management.

The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations.

Particularly, I want to emphasize my conviction that militant tactics have no place in the functions of any organization of Government employees.

A strike of public employees manifests nothing less than an intent on their part to prevent or obstruct the operations of Government until their demands are satisfied. Such action, looking toward the paralysis of Government by those who have sworn to support it, is unthinkable and intolerable.
Ok, it's not the most sophisticated analysis, but it's there.

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The Law of Unintended Consequences Reaches Same-Sex Couple's Tax Returns

Wall Street Journal:

Thanks to a 1996 federal law aimed at preserving traditional marriage, thousands of same-sex couples in California, Nevada, and Washington state could get big tax bonuses on their federal returns starting this year. The bonuses are off-limits to heterosexual married couples—a sharp reminder of the "marriage penalty" that often dings two-earner couples. ...

All three states recognize domestic partnerships and also have what is known as community-property law. Community property refers to a system of ownership in nine states that usually attributes income and property acquired during marriage equally to both partners, regardless of who earned it. (The nine states are Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington and Wisconsin.)

The three states also now apply community-property laws to registered domestic partners. So the IRS—which must follow state property laws—has ruled that these couples should figure their total community income and split it down the middle, starting in 2010.

That is where the benefit comes in. Although domestic partners must divide their income equally, the federal Defense of Marriage Act prevents the IRS from treating these couples as married joint filers. So for 2010 and after, each partner will claim half the community income but still file as single or head of household.

The result, in many cases, is a federal tax savings because a couple will avoid the marriage penalty that often raises taxes for two-earner heterosexual married couples.
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Sunday, February 20, 2011

Whoops: Con man with fake counter-terrorism software steals ~$20 million from US government

“Dennis would always say, ‘My technology is real, and it’s worth a fortune,’ ” recounted Steve Crisman, a filmmaker who oversaw business operations for Mr. Montgomery and a partner until a few years ago. “In the end, I’m convinced it wasn’t real.”

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Saturday, February 19, 2011

On Voter ID

John Locke Institute:

Issuing free photo IDs to voters could cost North Carolina less than $30,000 a year.

According to numbers compiled by Daren Bakst, Georgia requires photo ID from each voter and issues free IDs to anyone who doesn't have some other accepted form.

Between June 2006 and December 2010, Georgia issued an average of 5,311 photo IDs per year. Given North Carolina's larger number of registered voters, that number would be closer to 5,550 IDs here - call it 6,000 to be safe. The state charges $10 for a non-driver's photo ID, so assume the total cost is about half that, or $5 per card. That would mean costs of $30,000 per year.
John Locke:

Guess what former President has played an integral role in pushing photo IDs for voting? That's right, President Jimmy Carter. He led, along with James Baker, the 2005 bipartisan Commission on Federal Election Reform, which pushed for photo IDs. Both of them later encouraged the Supreme Court to uphold the Indiana law.

[...]4) What about the indigent and those who object, on religious grounds, about being photographed? What happens to them when they go to the polls without an ID? They also get to vote. If an individual doesn't have a photo ID because of indigent status or religious objections to being photographed, then the individual may still cast a provisional ballot and then must go to the courthouse within 10 days of the election to sign an affidavit.

[...]5) At this point, most opponents run from the "poll tax" argument and try to claim that it still isn't necessary because there's no voter fraud.

This is objectively not true as the Supreme Court discussed with various examples. The Court even explains how Indiana reportedly had thousands of registered voters who "had either moved, died, or were not eligible to vote because they had been convicted of felonies."
John Locke:

Civitas Institute polling (according to the WRAL article) shows that only one percent of current voters don't have one form of government issued photo ID (not just state-issued ID).

[...]5) In the Supreme Court case holding that the Indiana photo ID law was constitutional (Crawford v Marion County Election Board) , the plaintiffs couldn't even establish the harm caused by a photo ID requirement:

Further, the deposition evidence presented in the District Court does not provide any concrete evidence of the burden imposed on voters who currently lack photo identification...The record says virtually nothing about the difficulties faced by either indigent voters or voters with religious objections to being photographed.


Free IDs issued in 2010: 168,264
Total Registered Voters: 4,332,865 (as of January 5, 2011)
Free IDs Issued as % of Total Registered Voters: 3.9%

Note: North Carolina has 6,099,066 registered voters.

I am still going through other state data, but it appears that the numbers could be much lower than Indiana when it comes to total free IDs issued. For example, in the far more comparable state of Georgia:


Free IDs issued between June 2006 – Dec 31 2010: 23,899
Total Registered Voters: 5,839,998 (as of February 1, 2011)
Free IDs Issued as % of Total Registered Voters (Per Year): .09%
Over half of all states require some kind of id to be presented.


Opinion Journal:

[O]n Thursday local prosecutors indicted seven workers for Acorn, a union-backed activist group that last year registered more than 540,000 low-income and minority voters nationwide and deployed more than 4,000 get-out-the-vote workers. The Acorn defendants stand accused of submitting phony forms in what Secretary of State Sam Reed says is the "worst case of voter-registration fraud in the history" of the state.

The list of "voters" registered in Washington state included former House Speaker Dennis Hastert, New York Times columnists Frank Rich and Tom Friedman, actress Katie Holmes and nonexistent people with nonsensical names such as Stormi Bays and Fruto Boy. The addresses used for the fake names were local homeless shelters. Given that the state doesn't require the showing of any identification before voting, it is entirely possible people could have illegally voted using those names.

Local officials refused to accept the registrations because they had been delivered after last year's Oct. 7 registration deadline. Initially, Acorn officials demanded the registrations be accepted and threatened to sue King County (Seattle) officials if they were tossed out. But just after four Acorn registration workers were indicted in Kansas City, Mo., on similar charges of fraud, the group reversed its position and said the registrations should be rejected. But by then, local election workers had had a reason to carefully scrutinize the forms and uncovered the fraud. Of the 1,805 names submitted by Acorn, only nine have been confirmed as valid, and another 34 are still being investigated. The rest--over 97%--were fake.
Times Online (England):

MORE than 1m “ghost” voters have been uncovered who threaten to undermine the result of next month’s local council elections.

An analysis by Britain’s electoral watchdog has estimated that there are at least 1m and possibly up to 3.5m people whose names appear on the electoral roll even though they are ineligible to vote.

[...]Senior officials say that in some areas the electoral roll is thought to be only 60% accurate.
John Locke Institute:

Q. What about the claim that there's no evidence that voter fraud exists?

A. This is an absurd argument. There's no way to have a good sense of how rampant voter fraud is when states aren't properly looking for fraud. There are many ways fraud can exist. For example, it's very easy to register to vote under fake names. There are no cameras at polls to make sure somebody isn't voting multiple times.

Requiring ID at polling stations would have a marginal effect on vote fraud because it makes it harder to impersonate a voter or manufacture a vote-qualified identity. But the risk of in-person voter fraud is very low compared to absentee ballot fraud, which the Indiana law did not touch. The Indiana voter ID law was tantamount to caulking windows to keep out the cold but leaving the front door open. Because of the disproportionate effect on different classes of voters, the court struck it down.

Voter fraud will continue to be a hot issue, and states should continue to tune the balances they strike between voter access and vote integrity. My concern is that the issue might boil over and produce national ID proposals, as we have seen in the past.
Ed Weaver: Examples of voter fraud across the country

Fox News:

Like most voter watchdog groups, she said, her group started small. They decided to investigate voting fraud in general, not just at the polling places, and at first they weren't even sure what to look for -- and where to look for it.

“The first thing we started to do was look at houses with more than six voters in them" Engelbrecht said, because those houses were the most likely to have fraudulent registrations attached to them. "Most voting districts had 1,800 if they were Republican and 2,400 of these houses if they were Democratic . . .

"But we came across one with 24,000, and that was where we started looking."

It was Houston's poorest and predominantly black district, which has led some to accuse the group of targeting poor black areas. But Engelbrecht rejects that, saying, "It had nothing to do with politics. It was just the numbers.”

The task was overwhelming. With 1.9 million voters and 886 voting precincts, Houston’s Harris County is the second largest county in the country -- and the key to Texas elections.

The group called for help and quickly got 30 donated computers and “tens of thousands of hours” of volunteer work. And then the questions started to arise.

“Vacant lots had several voters registered on them. An eight-bed halfway house had more than 40 voters registered at its address,” Engelbrecht said. “We then decided to look at who was registering the voters."

Their work paid off. Two weeks ago the Harris County voter registrar took their work and the findings of his own investigation and handed them over to both the Texas secretary of state’s office and the Harris County district attorney.

Most of the findings focused on a group called Houston Votes, a voter registration group headed by Sean Caddle, who also worked for the Service Employees International Union before coming to Houston. Among the findings were that only 1,793 of the 25,000 registrations the group submitted appeared to be valid.

[P]oliticians have been stuffing ballot boxes and buying votes since senators wore togas; Lyndon Johnson won a 1948 Senate race after his partisans famously "found" a box of votes well after the election.
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Do 'Hilter' Quotes Come Only from the Right?

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From the Depths of the War on 'Terror'

Glenn Greenwald (there's a lot more here):

Yesterday, in South Carolina, an Obama-appointed federal judge dismissed a lawsuit brought by Padilla against former Bush officials Donald Rumsfeld, John Ashcroft, Paul Wolfowitz and others. That suit alleges that those officials knowingly violated Padilla's Constitutional rights by ordering his due-process-free detention and torture. In dismissing Padilla's lawsuit, the court's opinion relied on the same now-depressingly-familiar weapons routinely used by our political class to immunize itself from judicial scrutiny: national security would be undermined by allowing Padilla to sue;

[...]But compare the posture of the American justice system to those in other countries with regard to how victims of illegal War on Terror policies have been treated. Maher Arar -- a Canadian citizen who was abducted by the U.S. in 2002 at JFK Airport and sent to Syria to be tortured for ten months despite being innocent -- had his case dismissed by American courts before it was even heard on the ground (raised by both the Bush and Obama DOJ) that vital state secrets would be jeopardized by allowing him his day in court; by stark contrast, the Canadian government published a comprehensive public report detailing its own culpable role (and that of the U.S.) in his wrongful abduction, while the Canadian Prime Minister publicly apologized to Arar and announced that he would be paid $8.9 million in compensation for Canada's role in what happened to him.

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Downvote Bots and the Propaganda War

Washington's Blog:

Government propagandists, their hired private contractors and useful idiots are creating "downvote bots" or scripts to bury stories which question the government.

Anyone who has posted news items questioning the government's version of 9/11, the government's unquestioning support for Israel, or a host of other topics has probably noticed that all of their recent stories get downvoted virtually simultaneously, which defies the laws of probability.

One free, simple scripting program to create automatic downvotes of certain topics or news posters is called "Greasemonkey", which is commonly used on large social news sites such as Reddit.

For example, there are some 2,480 hits for the google search greasemonkey downvote. This is some 2,480 times that Reddit users are publicly admitting to using greasemonkey (see also this).

[...]As one example of a publicly-available downvote bot, this script automatically downvotes any stories on 9/11, Gaza, torture, Guantanamo and a host of other topics, downvotes certain posters, and engages in other forms of cyber warfare.
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Friday, February 18, 2011

The Cost of Chinese High Speed Rail

This also says that the head of China's high speed rail program has been fired for 'corruption.'

NY Times:

As expensive as it is, China’s high-speed rail network has been built far more cheaply than similar projects in the West and in Japan. A mile of rail here costs roughly $15 million; in the United States, estimates peg the price at anywhere between $40 million to $80 million.
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Home Ownership Before the New Deal


The latest canard offered for keeping taxpayers on the hook for mortgage risk is that, without such, homeownership would limited to the wealthy. Sarah Rosen Wartell of the Center for American Progress stated before the House Subcommittee on Capital Markets, "The high cost, limited availability, and high volatility of pre-New Deal mortgage finance meant that homeownership was effectively limited to the wealthy." Congressman Al Green repeated the point. As I've generally found Sarah to be one of the more reasonable CAP employees, and that this is fundamentally an empirical question, I would have expected her to offer some evidence to support such a claim. Alas, she did not. So I will.

According to the US Census Bureau, at the turn of the century in 1900, the US homeownership rate was 46.5%. I'm pretty sure that even Sarah wouldn't claim that close to half of US households in 1900 were "wealthy." Interestingly enough, homeownership after the first 10 years of the New Deal was lower than before the New Deal.

While 46.5% is about 20 percentage points below the current rate, the population in 1900 was considerably younger, and one thing we do know is that homeownership is positively correlated with age. In 1900, 54% of the US population was under the age of 25, a reasonable cut-off for homeownership. Today, that number is 35%. I don't think it would be a stretch to say the greatest driver behind the homeownership rate over the last 100 years has been the aging of the US population, probably followed by the increase in household incomes (homeownership and income are also closely correlated).

Hopefully this will put to rest the myth that FDR and the New Deal gave homeownership to the masses. The fact is that homeownership was fairly widespread long before the New Deal. I await the next myth from the Fannie Mae apologists. If they are wise, they will try one that isn't so easily falsified.
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Must-See Chart About Subsidies to the States


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Thursday, February 17, 2011

Bruce Sterling takes apart Hillary Clinton's Speech


“Clinton tried to reconcile the US administration’s support for the internet as a motor for change in the Middle East, China and elsewhere with its fury over WikiLeaks. She said: “Liberty and security. Transparency and confidentiality. Freedom of expression and tolerance. There are times when these principles will raise tensions and pose challenges, but we do not have to choose among them. And we shouldn’t. Together they comprise the foundation of a free and open internet.”

(((Who the heck wrote that amazing paragraph?! I’d like to shake that guy’s hand! He’s found some incredible diplomatic rhetorical middle-ground between honesty and dishonesty. It’s like a marriage which is firmly founded on a “challenging tension” of chastity and adultery. And, well, to tell the truth, that’s been known to work out — somehow. I mean — what else can she possibly say? Think about it.)))

Also of note, a "heckler" was thrown out of the speech, brutalized, and jailed. And all he did was stand silently in the audience with his back to Secretary Clinton.

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Rand Paul on the Patriot Act

This guy's looking good.

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The Effect of Unemployment Benefits?

Future of Capitalism:

Valletta and Kuang (2010) estimate that the extension of unemployment benefits increased the natural rate by about 0.8 percentage point. Other estimates suggest even larger effects (Fujita 2011). Importantly, the direct effects from unemployment benefits should end after the maximum eligibility period is brought back to its normal level....

Mounting evidence suggests that structural factors may have increased the "normal" rate of unemployment to about 6.7%. Much of this increase is likely to be temporary. In particular, the extension of unemployment benefits probably accounts for about half of the increase.
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Why Keynesians Thought There Would Be a Crash Post-WWII

Cafe Hayek:

Paul Samuelson, a prominent Keynesian, warned in 1943 that when the war ended, the decrease in spending combined with the surge of returning soldiers to the labor force would lead to “the greatest period of unemployment and industrial dislocation which any economy has ever faced.” He was not alone. Many economists predicted disaster.

What happened? Government spending went form 40% of the economy to less than 15%. And prosperity returned to America. Unemployment stayed under 4% between 1945 and 1948. There was a short and mild recession in 1945—while the war was still going on. But the economy boomed when government spending shrank and price controls were removed.
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Starting a Business in Cairo


The Economist reported last year that two-thirds of Egyptian households have a satellite receiver, nearly 9 homes in 10 have a refrigerator, and nearly all citizens have piped water and electricity. As evidenced by the role of Twitter and Facebook in the recent protests, the information technology revolution has touched Egypt as well.

[...]In Egypt as a whole, for example, it costs just 6 percent of one's annual per capita income to start a business—just above the 5 percent cost in most advanced economies. Yet in Cairo, the metropolitan area in which roughly 25 percent of the country's entire population lives, budding entrepreneurs may need to spend more than 25 percent of their annual income to launch a business; residents of Alexandria face a similar cost barrier. Far from being engines of economic growth, Egypt's leading cities are stultified.

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Wednesday, February 16, 2011

Tuesday, February 15, 2011

Taxes on Wireless

Americans for Tax Reform:

According to a comprehensive study in this month’s State Tax Notes, the average American pays a whopping 16.26% on their wireless phone and broadband bills, with Nebraska residents paying as much as 23.69%.

Much of the blame can be laid at the feet of the federal government, which has raised the federal Universal Service Fund Tax from 2.99% in 2006 to 5.05% today. However, the problem also comes from state and local governments, which continue to raise telecom and 9-1-1 taxes, only to place the revenue into the general fund for unrelated spending. By targeting telecom taxes instead of broad-based income or sales taxes, politicians can make their actions go relatively unnoticed, while continuing to raise taxes on virtually every citizen.

Today, the average state-local tax rate for wireless is 11.21% - a full 3.8% higher than the average state sales tax rate. Even worse, all but three states tax wireless higher than they do the sale of general goods or services. Even New Hampshire – which has no general sales tax – levies an 8.18% tax on cell phones and wireless broadband.
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Is Inflation in China Soaring Out of Control?

Uh oh.


The latest numbers show inflation is soaring out of control in China. The CPI is up 4.9% year-over-year, up from 4.6% in December. The PPI clocked in at 6.6% compared with 5.9% last month.

Things are even worse than they appear at first glance because China manipulated its CPI basket to reduce the impact of soaring food prices. Thus, China's CPI numbers are not directly comparable to previous months.
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China's Per Capita GDP Ranks 95th in the World


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Increases in Obama's Budget


This new budget may be better than Obama's first two fiscal blueprints, but that's damning with faint praise.

[...]Some of the fine print in the budget also is troubling, such as Table 4.1 of OMB's Historical Tables of the Budget, which shows that some agencies are getting huge increases, including:

•17 percent more money for International Assistance Programs;
•24 percent more money for the Executive Office of the President;
•13 percent for the Department of Transportation; and
•12 percent more for the Department of State.
But these one-year changes in outlays are dwarfed by the 10-year trend. Since 2001, spending has skyrocketed in almost every part of the budget. Even with the supposed "cuts" in Obama's budget, there will be:

•112 percent more spending for the Department of Agriculture;
•100 percent more spending for the Department of Education;
•154 percent more spending for the Department of Energy;
•110 percent more spending for the Department of Health and Human Services;
•175 percent more spending for the Department of Labor; and
•82 percent for the Department of Transportation.
And remember that inflation was less than 30 percent during this period.

The budget needs to be dramatically downsized, yet the President has proposed that we tread water.
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Astonishing Race/Unemployment Statistic

This is taken from the Facebook page of Matt Dodson, who used to be with us but now is studying at George Mason University. ...He attributes it to Walter Williams (who teaches at George Mason.)

In 1948 the unemployment rate for young black males was 9.2% and young white males was 10.4%. Young black males had 106% the labor force participation of young white males. In 2010, 52% of young black males were unemployed and 20% of young white males were unemployed and 75% of young black men were not even in the labor force.
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Monday, February 14, 2011

Milton Friedman's Idea to Replace the Welfare State

City Journal:

In Friedman’s plan, the poor would similarly receive a fraction of their “negative taxable income”—the amount by which their earnings fell short of that level. This direct cash grant would replace all other welfare programs for the poor, which, Friedman rightly observed, were generating a huge bureaucracy and extensive welfare dependency.

But wouldn’t the NIT—in effect, a government-guaranteed income—still be a disincentive to work, just as no-questions-asked welfare benefits were before being reformed in the 1990s? “Any state intervention, any income redistribution, creates disincentives and distortions,” admits Gary Becker, a University of Chicago economist and Friedman disciple. “But if society decides that a certain level of redistribution must take place, the NIT is the best, the most minimally distorting, solution ever devised.”

[...]The most frequent argument used to legitimize in-kind aid, rather than cash assistance, to the poor is that they would squander cash on nonessential things. But the cash recipients in the experiments tended to use their money responsibly to educate their children and to maintain their homes. Further, those who received an NIT of 100 percent were less likely to job-hunt than those with a smaller-percentage cash grant. This finding reinforced Friedman’s argument that any NIT should be progressive.
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Hospital Price Quotes


A colleague forwarded me a letter his friend received from their local hospital. The friend needs surgery. His health insurance has a very high deductible, so he figured he would do some comparison shopping. He asked the local hospital to quote him a price. Here's how the hospital responded:

[This] hospital typically charges between $2,360.45 and $22,290.74 for this procedure or service. This is an estimate only...

Our goal is to provide you with the most informed and accurate estimate of the cost of your treatment. If circumstances result in a final bill that exceeds this estimate by more than 20%, we will work together with you to resolve the balance.

For surgical services, the price quote does not include any physicians' charges. The surgeon and/or anesthesiologist will bill you separately for his or her time.
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Good Article on Parking Requirements Making Housing More Expensive


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Sunday, February 13, 2011

Less Strictive Trade Policies Linked to Higher Wealth

Cafe Hayek:

[A] graph (from a 2009 working paper by Batshur Gootiiz and Aaditya Mattoo) show[s] that countries with less-restrictive services-trade policies generally have higher per-capita incomes than do countries with more-restrictive services-trade policies.

No surprise there.

An earlier, ungated version Francois’s and Hoekman’s informative paper is here. See Fig. 4.1 on page 67.
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Saturday, February 12, 2011

Woo Hoo!

Ron Paul won the CPAC's straw poll (again)...

Yet even before the pollster could disclose the news, someone in the audience yelled "Ron Paul!” and the congressman’s supporters let out a loud cheer...

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Edward Glaeser on Cities


New York slowed its construction of skyscrapers after 1933, and its regulations became ever more complex. Between 1916 and 1960, the city’s original zoning code was amended more than 2,500 times. In 1961, the City Planning Commission passed a new zoning resolution that significantly increased the limits on building. The resulting 420-page code replaced a simple classification of space—business, residential, unrestricted—with a dizzying number of different districts, each of which permitted only a narrow range of activities. There were 13 types of residential district, 12 types of manufacturing district, and no fewer than 41 types of commercial district.

[...]In 1962, in response to the outcry over the razing of the original Pennsylvania Station, which was beautiful and much beloved, Mayor Robert Wagner established the Landmarks Preservation Commission. In 1965, despite vigorous opposition from the real-estate industry, the commission became permanent. Initially, this seemed like a small sop to preservationists. The number of buildings landmarked in the commission’s first year, 1,634, was modest, and the commission’s power was checked by the city council, which could veto its decisions.

Yet, like entropy, the reach of governmental agencies often expands over time, so that a mild, almost symbolic group can come to influence vast swaths of a city. By 2008, more than 15 percent of Manhattan’s non-park land south of 96th Street was in a historic district, where every external change must be approved by the commission. By the end of 2010, the commission had jurisdiction over 27,000 landmarked buildings and 101 historic districts.

[...]The cost of restricting development is that protected areas have become more expensive and more exclusive. In 2000, people who lived in historic districts in Manhattan were on average almost 74 percent wealthier than people who lived outside such areas. Almost three-quarters of the adults living in historic districts had college degrees, as opposed to 54 percent outside them. People living in historic districts were 20 percent more likely to be white.

[...]In the post-war boom years between 1955 and 1964, Manhattan issued permits for an average of more than 11,000 new housing units each year. Between 1980 and ’99, when the city’s prices were soaring, Manhattan approved an average of 3,100 new units per year. Fewer new homes meant higher prices; between 1970 and 2000, the median price of a Manhattan housing unit increased by 284 percent in constant dollars.

[...]Zoning rules, air rights, height restrictions, and landmarks boards together form a web of regulation that has made building more and more difficult. The increasing wave of regulations was, until the Bloomberg administration, making New York shorter. In a sample of condominium buildings, I found that more than 80 percent of Manhattan’s residential buildings built in the 1970s had more than 20 stories. But less than 40 percent of the buildings put up in the 1990s were that tall.

[...]The growth in housing supply determines not only prices but the number of people in a city. The statistical relationship between new building and population growth within a given area is almost perfect, so that when an area increases its housing stock by 1 percent, its population rises by almost exactly that proportion.

[...]Congestion charges aren’t just for rich cities; they are appropriate anywhere traffic comes to a standstill. After all, Singapore was not wealthy in 1975, when it started charging drivers for using downtown streets.

[...]Mumbai’s traffic problems reflect not just poor transportation policy, but a deeper and more fundamental failure of urban planning. In 1991, Mumbai fixed a maximum floor-to-area ratio of 1.33 in most of the city, meaning that it restricted the height of the average building to 1.33 stories: if you have an acre of land, you can construct a two-story building on two-thirds of an acre, or a three-story building on four-ninths of an acre, provided you leave the rest of the property empty. In those years, India still had a lingering enthusiasm for regulation, and limiting building heights seemed to offer a way to limit urban growth.

But Mumbai’s height restrictions meant that, in one of the most densely populated places on Earth, buildings could have an average height of only one and a third stories.

[...]Singapore doesn’t prevent the construction of tall buildings, and its downtown functions well because it’s tall and connected. Businesspeople work close to one another and can easily trot to a meeting.

[...]The success of our cities, the world’s economic engines, increasingly depends on abstruse decisions made by zoning boards and preservation committees. It certainly makes sense to control construction in dense urban spaces, but I would replace the maze of regulations now limiting new construction with three simple rules.

First, cities should replace the lengthy and uncertain permitting processes now in place with a simple system of fees. If tall buildings create costs by blocking out light or views, then form a reasonable estimate of those costs and charge the builder appropriately. The money from those fees could then be given to the people who are suffering, such as the neighbors who lose light from a new construction project.

[...]Consider that carbon emissions are significantly lower in big cities than in outlying suburbs, and that, as of 2007, life expectancy in New York City was 1.5 years higher than in the nation as a whole.
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CIA: Kidnap the Wrong Man, Get a Promotion


In December 2003, security forces boarded a bus in Macedonia and snatched a German citizen named Khaled el-Masri. For the next five months, el-Masri was a ghost. Only a select group of CIA officers knew he had been whisked to a secret prison for interrogation in Afghanistan.

But he was the wrong guy.

A hard-charging CIA analyst had pushed the agency into one of the biggest diplomatic embarrassments of the U.S. war on terrorism. Yet despite recommendations by an internal review, the analyst was never punished. In fact, she has risen to one of the premier jobs in the CIA’s Counterterrorism Center, helping lead President Barack Obama’s efforts to disrupt al-Qaida.

In the years since the Sept. 11, 2001, terrorist attacks, officers who committed serious mistakes that left people wrongly imprisoned or even dead have received only minor admonishments or no punishment at all, an Associated Press investigation has revealed. The botched el-Masri case is but one example of a CIA accountability process that even some within the agency say is unpredictable and inconsistent.
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CBO Estimates Health Care Blah Blah Blah Will Cost 800,000 Jobs

Weekly Standard:

Testifying today before the House Budget Committee, Congressional Budget Office (CBO) Director Doug Elmendorf confirmed that Obamacare is expected to reduce the number of jobs in the labor market by an estimated 800,000. Here are excerpts from the exchange:

Chairman [Paul] Ryan: “[I]t’s been argued...that the new health care law will create jobs and increase labor force participation. But if I recall from your analysis, it was quite the opposite. Is that not the case?”

Director [Douglas] Elmendorf : “Yes.”...


Rep. [John] Campbell: Thank you, Mr. Chairman, we'll -- and Dr. Elmendorf -- and we'll continue this conversation right now. First on health care, before I get to -- before I get to broader issues, you just mentioned that you believe -- or that in your estimate, that the health care law would reduce the labor used in the economy by about 1/2 of 1 percent, given that, I believe you say, there's 160 million full-time people working in '20-'21. That means that, in your estimation, the health care law would reduce employment by 800,000 in '20-'21. Is that correct?

Director Elmendorf: Yes. The way I would put it is that we do estimate, as you said, that...employment will be about 160 million by the end of the decade. Half a percent of that is 800,000.
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How Much Does Obama Want to Allocate to "High Speed Rail?"



In the U.S. budget proposal for the next fiscal year unveiled this week, the Obama administration is seeking $53 billion to promote development of fast train lines like those in Europe and Japan.
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