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If you read Coyote’s site enough, you might wish you had one. Here are three insane items from today:

  1. Student loan forgiveness getting serious play … remember that when someone tells you that “universities are non-profits” they might as well be saying, “Qghlm venta hulliamoomoo!” 
  2. Websites are going to have to accommodate the disabled. I am not really permitted to address this, but needless to say I’ve already run into some related issues on this topic. My two additional cents? Maybe this is an end-run around for-profit online education?
  3. Folks want to unbundle cable in order for them to stop paying for what they don’t watch (that, by the way, is probably not correct). Coyote makes a great analogy. Many people who support cable unbundling don’t undersstand that mandated health insurance coverages resemble the same thing. Nice.

Have a nice weekend. It’s time to start drinking (before that’s banned again too). 

In other news, this is normal for a rule-of-law respecting democracy. Blame George Bush.

Here is one question to leave you with – and be sure to ask it at your favorite cocktail party this weekend, “Just, what, exactly, IS permitted?” And just what, exactly, do people imagine the world should look like? Have someone actually articulate it to you instead of answering, “less messed up.”

 

Without much comment, I suggest you read the interview Wonkblog does with the patient. The entire tone, the selection of the interview candidate, the questions not asked, etc. encapsulates almost everything that can possibly be wrong with (insert noun here). If I were a betting person, I might even bet that the interview was made embellished or primed.

Friday Farces

In this week’s episode of the Commons Chronicles, I bring to you … the office copy machine. I don’t make too heavy use of it, but I can assure you that when I do, I make lots of copies – mostly to print exams for my large classes. I typically need 600-1000 sheets of paper to print each exam. So, before I run copies, I fill the machine up as much as I can, and when done, I replace the paper, since that amount of copying runs the machine dry. But you can rest assured that if you did not first put paper in the copy machine and had to run any reasonably sized copy job, you’d run out.

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That was what our copier looked like before I ran off my Money and Banking exams the other day. Just five feet behind me is a giant stack of boxes containing printer paper. What is more fun than regularly knowing that “no one” fills the copy machine is something I am sure many of you have enjoyed. Walking into the same copy room to find the copier jammed and abandoned. I particularly like that. I’m no saint of course, but I don’t invade the copier commons. 

 

In other news, in case any of you think that public health is about public health, check out this recent piece from the New England Journal of Anti-capitalism .. oh, I mean Medicine:

But from the glass-half-full point of view, the ban is not about attacking individual choice but rather about limiting corporate damage. If we see supersized drinks not in terms of the individual’s freedom to be foolish but instead as a kind of industrial pollution that is super-concentrated in impoverished neighborhoods,2 limits on drink size become a far different kind of regulatory measure. The target is not the individual: it is the beverage industry, corporate America. To be sure, the ban does not take on every industrial enterprise that is bent on profiting from inundating Americans with cheap, empty calories. But it does set what may be taken as a new precedent — though it’s also a move with deep historical roots.

By the second decade of the 20th century, public health efforts began to turn away from social reform and industrial regulation.

This century-old struggle is playing out again in the case of the giant-soda ban. The New York Times reports that even lawyers for the Bloomberg administration have strained to articulate a compelling public rationale for the policy. Do we interpret the ban as a narrow, quixotic measure that would present public health authorities as little more than scolding nannies? Or do we frame it in the grand tradition of public health activism, as a challenge to corporate and industrial practices that place profit above public health?

The aim of a ban on oversized sodas is to reduce the level of sugar and calorie assault that any single beverage dose represents. The assumption, of course, is that people won’t simply buy more and that intake will be reduced. But the target is corporate behavior.

A cap on beverage size would leave us with a soda cup half empty, but it opens an avenue to changing corporate practice. The New York City ban is limited to businesses that the city itself can regulate without causing undue hardship; addressing inconsistencies such as limiting the size of some drinks in establishments that receive inspection grades from the city health department while leaving others free to brim over would require similar regulatory action on the part of New York State. But if Bloomberg is bent on appealing Tingling’s ruling, it is time to start making a case with some muscle, which will require strong, active support from the medical and public health communities. If we can challenge the industries and businesses that profit by promoting bloated serving sizes, perhaps we can take on other corporate enterprises that similarly contaminate our social environment.

That last sentence is classic. I’d start by dismantling schools of public health. Because they are “non-profits” does not make them non-profits. Those enterprises indeed are contaminating (nice word, huh) our social environment. If we want to be utterly value-laden about it, then please give me a reason why pushing for the closure of those programs is any less of a serious proposal than imposing their will on evil “corporations.”  What the heck does that even mean? Those schools are profiting handsomely by promoting bloated serving sizes of unhealthy nonsense. That must be stopped. And once we put an end to that, we can then take on other “corporate” enterprises like schools of education that similarly contaminate our social environment. By the way, the last time I was in McDonalds, they were trying to make a profit by selling me salad and yogurt.  By the way, non-profits ARE ALSO corporate enterprises. Just sayin.

 

 

Tyler Cowen links to this Matt Yglesias post from yesterday. The “money” shot is this one:

There are two obvious points the author is making here. First is that most “public investment” happens at the state and local level. While I do respect that this is an underappreciated and misunderstood fact, it is our own fault. The federal government would have you believe it IS doing everything, and nationalizing health insurance and educational standards, for example, doesn’t inspire much thought that anything is beyond the reach of the federal government. Furthermore, this tells us nothing about federal influence on investment expenditures. How much of this is dictated by federal tax policy, block grants, mandates and the like? So while the distance between the red and blue lines is large, and should be more widely understood, that in no way tells us a complete picture of what is going on.

The second point of course is that since the end of the Great Recession, state and local public “investment” has “collapsed.” And this seems to be an issue on both the moderate “right” and “left” with Cowen seemingly in agreement with whatever unspoken conclusion Yglesias intends to have us draw from that picture.

Of course, I think I disagree with that notion. First, it would be nice if the two authors who have so many readers would define exactly how FRED is measuring “investment” and to demonstrate what sort of catastrophic public withdrawal we are seeing. Second, why is “consumption” by states and local governments in there and what does this mean? If you search the FRED site for the series Yglesias presents, you find a link to the National Income and Product Accounts, from where this data come, and there is a short data description that comes with it. In there I found:

Government consumption expenditures and gross in­vestment (1–29), the measure of government sector fi­nal demand, consists of two major components: Current consumption expenditures by general govern­ment and gross investment by both general govern­ment and government enterprises. Consumption 19. Own-account production refers to an asset produced by a business or government for its own use. A Guide to the NIPAs 9
expenditures consists of the goods and services that are produced by general government, less sales to other sectors and own-account investment. As producers of nonmarket services, governments generally provide
services to the general public without charge, for ex­ample, law enforcement services, national defense ser­vices, and elementary and secondary education. The value of government production, that is, government’s gross output, is measured by the cost of inputs: Compensation of employees, CFC (a partial measure of the services of government capital), and in­ termediate goods and services purchased.20 Therefore, government consumption expenditures is measured as the sum of these costs of production less sales by gov­ernment of goods and services to other sectors (which are classified as PCE, if purchased by individuals, or as intermediate inputs, if purchased by businesses) and the value of software and construction that are pro­duced by government for its own use (that is, own-ac­count investment, which is classified as part of gross government investment). Gross investment consists of purchases of new structures and of equipment and software by both general government and government enterprises, net purchases of used structures and equipment, and own-account production of structures and of software. Government consumption expendi­tures and gross investment does not include current transactions of government enterprises, current trans­fer payments, interest payments, subsidies, or transac­tions in financial assets and in nonproduced assets such as land.

So the chart above isn’t a chart of “investment” unless we are now entering the post-modern definition of investment as, “anything the government does that I like.” This measure includes the things government delivers to us in the daily course of activities such as the imputed value of police protection, the court system, government schooling and so on. It ALSO includes a measure of what we think traditionally of as investment in infrastructure, buildings and the like. This chart says nothing about the breakout of these things, nor does it, of course, say anything about where the “cliff” is coming from and whether we ought to be worried. What if, for example, the entire decline in “investment” happened to be because we ended the stupid war on drugs and our prison and law enforcement staffing needs fell by billions? Would this be a crisis? Now, we KNOW that did not happen. But it is worth a mention, isn’t it? In a future post, we are going to show you some data from the National Association of State Budget Officers that tries to uncover what exactly has been going on.

As for collapse and a lost decade? Well, public “investment” peaked in the third quarter of 2009 at $1.574 trillion. It is now at a (local) trough of $1.453 trillion. This is an aggregate decline of 7.7 percent over 3.5 years. Large by historical standards? Yes indeed, and it is back to levels last seen in the recession of 2001. But remember we had a government “investment” blowout during the 90s, which appeared to be way above trend, and if we plot a fitted line through a long term series (longer than FRED reports for now, I can dig one up with harder work at a later time), public “investment” is 24% higher in real terms than it was in 1995 when the series from which Yglesias draws began. That’s a real increase of over 1% per year. Remember what we mean by “real.” Is it clear that in real terms public investment (in presumably “public” goods) should be increasing at all? 

A final point today that I think is worth making is whether “investment” has fallen off? Certainly during the recession we know it must have, it is really the major driver of business cycles. But if you look at measures of Real Gross Private investment, it seems that private investment since the Great Recession ended has more than compensated for the “loss” of public “investment:”

Private investment is up $600 billion since the trough it hit during the recession, over 4 times larger than the decline in public “investment” over this same time. Again, this says nothing about how well this has been invested, or whether it has been politically driven, or anything like that. And indeed, depending on which tribe you are in, you can cite this as evidence FOR or AGAINST the multiplier. But I digress.

There is a lot more to uncover here and we shall endeavor to do so by examining what, exactly, state budgets have looked like over time, and how their spending has changed, 

 

Several of my more classically liberal oriented friends work for government universities. And you can imagine what the response of their critics might be when they learn of this fact. “What a hypocrite!” is the closest response, meaning that someone who promotes the principle of limited government, the importance of private property rights and contract to solve problems, etc. ought not work on the taxpayer dole. The argument does, it seem, have merit. At least for me personally, I have never fancied a position at a government funded organization, in fact recently turning down an almost perfect job opportunity in part because of its government affiliation. 

But that’s sort of a hopeless endeavor. Even I at the “private” University of Rochester am heavily funded by government, it’s just not as transparent. Many of my students receive federal financial aid, some of our campus infrastructure is supported by government grants, some of our data that I use to teach, for example my Money and Banking class, is produced and collected by the government. It would be impossible to live a life that is not hypocritical. I don’t want to spend too much more time on that point, but just to point out an almost sophomoric response that I’d be inclined to make when I have had one too many adult beverages. 

And what is such a response? Well, for a while I’d just like to see a little self-reflection. Almost every one of the folks condemning my friends for making what appear to be “anti-government” stands from within government supported institutions come from people who condemn private, voluntary cooperation on many levels. And it is nothing short of hypocritical to cast aspersions on my friends while they themselves partake in the wonderful blessings that private cooperation has delivered to them. And to be honest, I don’t find it useful to argue along these lines. Is it reasonable for me to tell the “Progressives” out there to shun the market? They couldn’t even if they tried. And it’s a cheap way to try to score debating points. My wish here is for these sorts of things to stop.

The observation that it is impossible to avoid the reach of either the public or private sector implies one other thing. For all of the “you didn’t build that” mentality that permeates our popular discussions, the very same notion can and ought to therefore be used in response. If folks wish to argue that Wintercow would be a drooling idiot (more than I already am) without the safety of government military protection, the production of government sponsored research and so forth, then it is equally true that none of those things are possible without the Wintercows of the world plying their trades, creating wealth in the process. Again, it might be fun to score cheap debating points by engaging in either side of that argument, but it only serves to cloud us from a discussion of the real issues.

Many people are guilty of these sorts of tactics, and similarly sophomoric ones. Our Commander in Speech, recently at THE Ohio State University famously decried folks like me as being not worth listening to. It probably made him and his supporters feel good, but if folks truly are serious about engaging in debate about the proper role and scope of government, ad hominem attacks at a major commencement address are probably not an effective way to do that. It would have been appropriate, and yes I AM telling the President what to do, had he instead recognize when and where these concerns are legitimate, and to try to demonstrate that he understands that “ALL” of his “opponents” are not of the same mindset. He could have demonstrated that he understood where and why some believe the reach of the state has gone too far, on the legitimacy of budgetary concerns, and the fact that the government, too, faces a budget constraint. He could have then laid out his argument for what the government can and ought to be doing and admitted that he is actually an adult that recognizes that it simply cannot be all things to all people and just like private markets, cannot possibly solve every problem of the world. But that’s not what we get. We get pure political crap. And don’t blame the President for this, not at all. Blame yourselves. They deliver what we want them to deliver, not the other way around. It’s far from what we think of as modern leadership.

 

I surely am happy to see the US turn itself into what Mark Perry calls, “Saudi America” through its continued development of its oil and gas resources. And while I am nonetheless (even if this had not happened) not worried about “Peak” Oil or Peak Anything for that matter. Nonetheless, I am NOT optimistic that the oil and gas boom will be long-lasting or have much spillover into the rest of the economy. Ought “we” permit its expansion? Sure. Ought “we” be happy about it? Sure. But I would recommend strongly against using this as some “turning point” for America. And I would warn even more that if the boom continues, it may even perhaps be a curse and not a blessing. If resource revenues come pouring in, then where is the urgency to get our entrepreneurial, legal, fiscal, etc. houses in order?

I spend a decent amount of time reading Ezra Klein’s site, and I recommend it to all of you. But I’d be pleased if we were all just a little bit more honest about what we are doing here. Here is today’s post by their Environmental writer about Colony Collapse Disorder:

It’s an interesting study in contrasts. The link between pesticides and bee die-offs is still subject to some dispute. So, in the face of uncertainty, the European Commission is erring on the side of the environment — voting to ban neonicotinoids for two years just in case they really are to blame for the bee collapse.

The United States, meanwhile, is erring on the side of certain economic interests — it’s still not clear that neonicotinoids are to blame, and pesticides are a billion-dollar industry, so regulators are moving slowly in setting restrictions.

So, banning a particular pesticide MUST be “on the side of the environment?” Really? What will bee keepers and orchard keepers turn to absent that? Will yields fall and land use increase, leading to more erosion and loss of habitat? That surely wouldn’t be on the side of the environment. So now writers for the WaPo just get to make stuff up too? You wonder where they learn such things? It’s all harmless opinion, right? And the next sentence is even better. The narrative HAS to be that the US market is some maniacal free-market place and subject to total lack of regulation. So by not banning a pesticide that it’s not clear produces damages, we are “siding” with a particular industry. Did it ever occur to the write that the Pecan farmers, fruit growers and other folks that depend on bees are also a multi-billion dollar business (it’s probably not as large as we all think however)?I wonder why we have this Dr. Evil-like snarl when we mention “certain economic interests” as if the interests of the pesticide folks and fruit folks and bee folks are all misaligned. And what if they banned the pesticide, wouldn’t this be “siding with certain economic interests” too? On what alternative planet are we living? 

And do you think in a post about, “hey the bees are dying,” a writer would bother to ask what people are doing in response to it? Almost immediately after I clicked on that WaPo piece, I ran into my reading material from PERC. And what do you know, they are featuring a piece today on just what has happened to beekeeping and farming/orchards as the bee populations have suffered. You’d think our author would bother to ask, “just what has happened to the price of pollination services” since the collapse began? And maybe he would ask, “I wonder why pecan prices haven’t quadrupled in the previous 10 years?” No such questions are asked. Here is what the PERC folks have to say about it, which surprised even me

By the way, the book Fruitless Fallby Rowan Jacobsen was well written and thoughtfully presented. It was published in Fall 2008. I strongly recommend it. He has a final chapter talking about how both bee-keepers and orchard keepers are adapting. And I am sure Rowan would describe himself as a very concerned environmentalist, and I applaud his work, especially because he doesn’t just make sh*t up. 

 

And I think the final doozy is this one. Take a look at the writing of “E”nvironmentalist writers over time, especially when it comes time to discuss fracking regulations or the development of renewables. Despite the safety record of fracking and its record of producing cleaner burning and more carbon free fuel than coal, “more research is needed.” And the “precaution” there is to wait until we know for sure about the science before allowing it to go forward. But when we say “more research is needed” before it makes sense to ban a chemical, we are somehow doing something underhanded here? 

I just don’t get it. And the next time I see the word “non-partisan” I think I am going to vomit. Everyone is partisan, if they don’t tell you so, they are just making sh*t up. I at least tell you where my biases are, and I hope I am mature enough to drop them if someone bothered to show me evidence. 

Jonathan Chait:

We know that Medicaid makes people happier and less poor. We have trouble proving its impact on their physical well-being because proof of the benefits of medicine remain elusive. Unless we want to stop thinking of basic medical care as a life necessity, and we don’t, the case for Medicaid remains unimpeachable.

So does vacation.

The United States has very high levels of income inequality, a very stingy welfare state, and is the only advanced economy that does not guarantee access to medical care. The Oregon study does not raise particular questions about the efficacy of Medicaid; it raises questions about the efficacy of medical care in general.

Of course, leave it to Chait to simply ignore that fact, again, that the U.S. at all levels spends almost $6.5 trillion on government, This is more than the entire GDP of China. If the welfare state is “stingy” (an awkward use of words, no?) it ain’t because the money ain’t there. I’m sure it’s all recalcitrant Republicans’ fault. So let’s review. We spend more than the entire country of China generates. Yet our roads are falling apart. Our public schools in the cities are failing. Our welfare state is stingy. Our military veterans cannot get needed services. The National Parks budget is stretched to the max. And so on. Does anyone else see the problem here?

Let’s take a look at pages 2-15 and 2-16 in the most recent edition of the, “Transportation Energy Data Book.”

Energy Efficiency 2

Energy Efficiency 1

 

Let me ask, do you expect cars to be more or less fuel and energy efficient in the future? Take a look at what has happened to the fuel efficiency of buses and trains over the last 40 years. While there have been some improvements in very recent years, you might be surprised, as I was, to find that “mass transit” is not improving efficiency at all. And I’d remind you that this is focusing on fuel use alone, we are not saying anything about the money costs of such things, or even the carbon costs (for example, light-rail is actually WORSE for global warming because it requires far more carbon to build the lines than can possibly be eliminated by passengers riding it instead of taking cars).

Have a nice day.

 

UPDATE: Coyote does a little research into Phoenix light rail and shows us that the city (and probably you and I too) paid $1.4 billion to take people off of buses and onto light-rail. See tomorrow’s post for why this is interesting. 

Oh, Just Great

So now my university is so awesome, that we celebrate the fact that we are a “spotlighted” institution that supports and advances the Department of Energy’s scientific research programs. Yes, indeed. Using taxpayer funds to promote politically favored research projects. Wasn’t the synfuels program DoE? And Solyndra? And Fisker? And who knows what other projects lurk.  That’s exactly the spirit of entrepreneurial discovery, of the pursuit of knowledge for knowledge’s sake, that is the essence of the University. 

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