March 25, 2012

Houston's charitable feeding ordinance: Observations on reputation verses regulation

Last week, I went down to Houston city hall to speak out against the charitable feeding ordinance, which might have come up for a vote, were it not for the large number of people who have coalesced to voice opposition to the ordinance. The Houston Chronicle covered the story here, while I was mentioned in the Houston Press's coverage of the debate. I rather not discuss all of the numerous issues surrounding this 14 page, liberty restricting ordinance, including the fact that cities around America are cracking down on this, but rather I'd like to focus on one issue in particular - that of the City regulating the voluntary, charitable giving away of food.

I attended not only the debate in City Council, but also the rally that was held outside City Hall Tuesday afternoon before the public comment period started. One thing that resonated over and over again from people who have actually been engaged in feeding the homeless was how they expressed how they expressed what they did. They would describe how they performed their charity because of religious faith, or they would describe how they put their love and their hearts into giving away food to the needy.

I was not at the City Council meeting too long, as I left after I spoke, but I certainly have read the original proposed feeding ordinance, as well as a proposed revision to the ordinance. All versions of the feeding ordinance impose requirements that at least one person at the site must have passed a government sponsored training course, as well as requiring getting permission from the City to engage in feedings. Food served cannot be made from home, nor can food be stored at a home. That's just encapsulating a few of the items addressed in this ordinance.

There is another way to describe, in more economic terms, a difference in what's going on with the city's proposed ordinance. Part of the struggle involves the reputations of the parties who engage in feeding the homeless and destitute. The original Houston Chronicle editorial, written in part by the CEO of one of Houston's big charity players, stated that there were incidents of destitute people getting sick from food they had been served or had accepted. However, I've kept a fairly close watch on the news and current events for 30 years now, and I have no recollection whatsoever of reading or hearing of stories of homeless people getting sick or having to be hospitalized from food that had been served by charities. This needs to be particularly noted because the media tends to be pretty good at reporting cases of people getting sick from eating at restaurants, from bad food, and in reporting larger food scares like salmonella outbreaks.

The subject of reputation is important to note because reputation serves as a liberty and free market mechanism to keep issues in check. Many people do care about their reputations and will act to guard against them from being tarnished. It is notable that one of the people who has engaged in charity, Jay Hamburger, has been doing this for 21 years. Food Not Bombs has been serving food for 18 years, and the Catholic Church has been serving the poor literally for 2,000 years. One thing some of these activists have said is that the homeless and poor prefer to come to groups like Food Not Bombs because the experience is not institutional, and they like the food better.

Another way in which reputation comes into play has to do with the issue of clean up and trash removal after feedings. It's been stated that there is a need for this ordinance because those groups who engage in feedings leave trash behind. So, if they are, then name them! News gets out, and doing so will help shame groups who are leaving trash behind into picking up after themselves when their events are over.

In effect, Mayor Annise Parker, Councilman James Rodriguez, and the political backers of regulating feedings through the charitable feeding ordinance are telling the people of this city is that those who are engaged in such charity cannot be trusted. It is in the nature of government regulation on any issue that the politicians and state regulators now substitute their judgments in place of the regulated, and that quite frankly, is an insult to those who are being regulated, not to mention everyone else. Arguably, regulation also induces a false sense of security surrounding what's being regulated. Issues of trust and caveat emptor are always present, regardless of whether something gets regulated or not, which will act to reinforce an earned reputation. Instead, pushers of regulation basically say that people are too stupid to manage their own affairs, hence the alleged need for scientific experts to supervise and guide people's decisions.

Furthermore, there's always the issue that if the activity that is being regulated still has problems after regulations are imposed and the administrative machinery put in place to enforce regulations, then eventually the bureaucrats and agents involved start crying to officials for more money, greater reach, and more power, because the real reason why they failed in their jobs was of course because they didn't have enough money or power to do them properly. Other known issues involving regulation are the capture of regulators by the regulated, or the formation of iron triangles between politicians, regulators, and the regulated. Furthermore, one can always ask the question of whether the state's regulations actually do safeguard or add any value to what's being regulated?

Be this as it may, my reason for writing this post was to give an earthy, up close and personal window into the issue of regulation. Regulation, since it was successfully pushed through by "Progressives" 100+ years ago has become an abstract and distant matter for many people, something that's just been accepted as a part of everyday life, and one cannot doubt that this state of affairs would have very much pleased the original generation of "Progressives," who put their faith in science, trained experts, and succeeded in peddling the story that America had to adopt a new ideal of administrative government whose ideal would be free of politics. Moreover, more regulation can always be pushed by populist politicians shaking their fists on behalf of the little people by demonizing alleged market failures, and picking on politically unpopular groups like Wall Street fat cats and CEO's of Big Evil Corporations.

But that ideal of regulation has been rudely exposed in this case study, because this time the subject of regulation aren't insurance companies, or Big Evil Corporations who "put profits before people," but rather society's forgotten. The hard reality of the politics behind this push to impose regulations in charity feedings is that it doesn't have a whole lot to do with food safety. Rather, it has been politically demanded, in part, by people who have settled in areas in and around Houston's central business district which have long been known to be areas where homeless people have resided, and that now they've bought into the area and making their homes there, they want them gone. But one other casualty of these political desires that can never be recovered are the reputations of those who spent so much of their lives caring for the destitute and forgotten, and those who push for this ordinance really need to stand up and apologize to them for implying that what they do has been a danger to their fellow man.

Wizard

Posted by The Mighty Wizard at 08:48 PM
This entry was posted in the following categories: America , Culture , Houston and Texas matters , Living a life worth living

December 08, 2011

Pearl Harbor and its consequences: 70 years later

Yesterday was the 70th anniversary of what President Franklin Roosevelt declared "The Day that will live in infamy." There were many platitudes made about the sacrifices that Americans endured, not to mention that people will be arguing about whether Franklin Roosevelt somehow either provoked a Japanese attack or otherwise knew about a Japanese attack on Pearl Harbor in advance, but this blog post is about something other than that. It's about what happened after Pearl Harbor.

I did not serve in the military, something that troubled me when I was younger and I sometimes regret not doing as I get older, with a mind that somehow that serving in the armed forces is part of a full life. But I also remember becoming an adult and sometimes running into WWII veterans at various events. I vividly remember at one public event that a pair of WWII veterans were off in a corner, where one of the vets had a massive memorial book that he had put together of the war, complete with news clippings of the day. More about those two men later.


But the real long term effect of Pearl Harbor is what happened afterwards. After Congress declared war on the empire of Japan, Mr. Roosevelt sent a list of items to Congress of what would be needed to fight the war - millions of military uniforms and military clothing, untold thousands of tanks, scores of thousands of military trucks and jeeps, rifles, machine guns, bazookas, artillery pieces, aircraft of all kinds, ships and submarines, and billions of rounds of ammunition, shells, and bombs. Now Congress faced the task of trying to figure out how to pay for the war.

In order to come up with a plan, the Treasury (following consulting advice from a guy named Milton Friedman) settled on payroll withholding - withholding money out of the paychecks of Americans before they received their paycheck. Keeping in mind that this was introduced in the 1940's, at the very dawn of the computer age, accomplishing this from an administrative perspective was going to be quite a feat. After all, the income tax was not going to be something with which to wage class warfare on by beating up on a few hundred thousand or a few million rich folks. Instead, now the federal government was going to be confiscating the income of millions of average Americans. However, Social Security had been enacted just a few years before, and the administrative machinery for massive withholding of wages and salaries was in place by the time America had entered the war.

Withholding income is one of those insidious ways of taxation. Instead of whacking a worker with $20,000 of taxes in a year, withholding income means that the federal government withholds $800 in taxes every 2 weeks. $800 is a lot of money, but the point here is that withholding puts people on the drip. It's a narcotic way of confiscating wealth, not so easily noticed. It certainly is much less noticed than walloping a taxpayer with a single $20,000 bill at the end of the year.

And so it was that the federal government had now assumed control over vast swathes of the economy and many aspects of American life, all in the name of fighting the Nazis and the Japanese. The United States Supreme Court also gave its blessing in the realm of law, but signing off on ever greater federal controls over the economy through the Commerce Clause, culminating in the ruling of Wickard vs. Filburn in 1942, which involved a case where a Congress could command a farmer to destroy his crops even though the farmer had no intention of selling them.

Sticklers for arguing about the political economy will want to interject about the Federal Reserve in 1913, and lots of other issues, but World War II was undoubtedly the massive turning point where the political centralization and nationalization of American life was accomplished. Unlike every other war before, after WWII the federal government was not rolled back. After the Civil War for example, income taxes were repealed in 1872. That did not happen this time. Instead, there was a demobilization after the war and the size and scope of the federal government did start to shrink, but America entered the Korean War, the machinery of Washington was revved back up again and the federal government was confiscating 20 percent of the economy again, continuing to do so for the entire Cold War era. During the entire 1950's, the military industrial state was paramount, with military spending taking up over 50 percent of the federal budget, but during the 1960's that all changed. After 1960, the centralized welfare and entitlement state was enacted and started steadily consumed more and more of federal taxes. It was when the vaunted WWII generation was in its early 40's when a fellow 40-something President John Kennedy made his pitch to enact Medicare and Medicaid to them. Pay a few pennies in payroll taxes today, and your Baby Boomer and Generation X kids and grand kids will pay an arm and a leg to take care of you at taxpayer expense by the time the 1980's and 1990's roll around! What a deal! Kennedy couldn't get the vastly expanded federal social welfare state through, but Lyndon Johnson sure was able to, and now America is stuck with this.

To me, this is the long run legacy of Pearl Harbor. The war and the Depression inured Americans to government just as many probably hoped that it would, and now too many Americans belonging to too many interest groups now have a stake in voting for a living rather than working for a living. Moreover, the war nationalized American life and cemented the federal government as being paramount in the lives of Americans.

Which brings me back to those two elderly gentlemen I met at that event over 20 years ago. I walked up to them and started looking at the WWII memorial book. One of them turned to me and said, "Son, you owe us something." We've been dealing with the politics of that sentiment ever since.

Wizard

Posted by The Mighty Wizard at 12:08 PM
This entry was posted in the following categories: America , Because they can , Culture

December 04, 2011

Auditing the Richmond Tea Party - the harassment happens more often than you think

The rise of the Occupy movement over the past two months has draw reams of media attention. Quite a bit of that attention has not been very flattering, amongst other things that the Occupy crowd has cost the taxpayers over $20 million and counting. Kevin has noted that the local Occupy crowd has been getting free electricity for their encampment.

But the most recent twist in comparing how the Occupy crowd has been treated by government verses how the Tea Party movement has been treated has erupted in Richmond Virginia, where the local Tea Party has filed suit against the City of Richmond, on the grounds that the Richmond Tea Party had to pay for access to city property to hold their protests, whereas the local Occupy group has gotten preferential treatment. Many in the Tea Party were surprised and angered at the differential treatment given to them by the local government, which resulted in the City imposing an audit against the Richmond Tea Party. In a twist to the story, the local Occupy movement has come to the defense of the Tea Partiers.

One person who was not surprised that something like this would happen was none other than the Wizard. Why? Well gentle readers, the Wizard has not one, but two stories to tell you about how local governments treat dissenters and those who exercise speech.

1) Back around 2006, when Metro had announced that the agency was planning on running a rail line down Richmond Avenue, I met a businessman who had a business along Richmond Avenue who told me of a story where he attended a public event featuring several Houston City Council members in addition to a presentation from Metro. While at the event, he spoke up, describing how rail would affect his business and arguing that Richmond Avenue was not on the ballot.

So, what was the result of this man's exercising his Freedom of Speech rights found in the Texas and United States' Constitutions? Well, several days after attending that event, this man was visited at his business by City of Houston inspectors, demanded to see his business permits, something that had never happened to him despite the fact that he had been at his location for over 20 years.

2) A year or two later, when I was working with the Floodway Coalition in their property rights battle with Houston City Council, one of the members of the core group of activists waging the fight, who had owned his business for many years, expressed in a public meeting that as a result of the amending of the Floodway Ordinance, his land had lost almost all of its value, and that he had been the victim of a taking by the government through law.

So, what happened to this businessman? You guessed it! Within days after having gone public with his plight, City of Houston inspectors showed up at his business demanding to see his permits. Not only that, they decided to start poking around his property to see if they could find any violations of city ordinances. This was happening to a man who not only had been a pillar of the community, but had given away small freebies to the City, mostly for reasons of good publicity for his business, but none of that mattered when City Council decided to bite him.

When the excitement over what is happening with the Richmond Tea Party erupted, the Wizard briefly though of the idea of demanding my money back for paying for the use of the lawn at Discovery Green on April 15th, 2010. However, I suspected that had I done so, that Felicia would have been subjected to possible harassment by the City of Houston in the same way as the Richmond Tea Partiers were, ergo I backed off.

But the Wizard bids activist to remember these pearls of activism no matter where you live. Frequently, when it comes to free speech rights, it is free speech for me but not for thee, depending upon who happens to have won the last election and is now holding office.

Wizard

Posted by The Mighty Wizard at 07:01 PM
This entry was posted in the following categories: America , Because they can

November 20, 2011

Spying on Occupy Houston

It's been four months since I posted in this blog. Of course, quite a bit has happened, as the rush of time flows by, including the death of Mohammar Quaddafi and the threat of the failure of the Euro. But America has seen the rise of the Occupy Wall Street - uh, movement.

The Occupy Wall Street movement has quickly spread to numerous cities around America in the two months since it started in Zucotti Park in lower Manhattan. The press seems to have given these folks fawning coverage despite the fact that there have been numerous recorded acts of mayhem that have occurred in various cities. This has prompted a countering by law enforcement this past week to shutdown or clean up various encampments, sometimes resulting in the thuggery that astonishes. The Occupy crowd has made, at times, a chaotic list of political demands, but here is one site that lists nine of them.

But my interest was piqued. The local Occupy Houston group announced that they were holding a strategy session at the Houston Public Library yesterday, November 19th, 2011. I decided to put on my spy gear and check them out.

I arrived about five minutes after the meeting started. The event planners had announced that they had room for up to 200 people to attend the event, but about fifteen minutes after the meeting started, I did two head counts of attendees, and counted roughly 85 were in attendance. The crowd was perhaps 80 percent white, with a handful of hispanics, and a few blacks in attendance. I would have to say that perhaps 50 percent of the people in attendance were under the age of 30, but there were people across the age spectrum in attendance.

Even though I went in under the radar, I did see a handful of people in attendance whom I've met before, long time familiar figures in Houston's Progressive enslavement politics. Amongst them were: Ted Weisgal, who owns Leisure Learning, Ovide Duncantell of the Black Heritage Society, and I saw for the first time someone I've seen post on Facebook, a fellow named Egberto Willies. It was stated by one speaker that she recognized many of the attendees, as she knew them from various Progressive events.

The event started with a bunch of hand signals that were meant to help the meeting move along, since there was a lot of ground to cover. The stated goals of the meeting here:

1) Causes of the economic crisis

2) Finding concrete solutions

3) Occupy Houston – what comes next? – sustainability of the movement.

After the meeting got started, it turned out that the group intended to break out into no less than 17 different groups, all with varying topics to go over, including finance and outreach support, health care, women's issues, legal issues, "sustainability", education, prison and mental issues, economics, and dealing with the media. I had to laugh that a gathering of some 85 people were attempting to take on such a huge number of topics. A "Medicare for All" sign had been placed against the wall.

Be that is it may, the meeting then went on to people who had signed up to speak. Each person was given two minutes to address the audience. Here is a list of some of the things that were said by those who spoke:

1) One person said that President Obama thought that the Swedish economic model was good.

2) One older fellow, who wore a black shirt with a Che Guevara image on it, stated that "We are going to take control of the economic and political system!"

3) One person, addressing the legal issues facing the group, stated that the group was getting free legal representation from the National Lawyers Guild. As an aside, a dozen or so people from this group were arrested this past week. I've heard rumor, not confirmed, that there is an attorney in town who is under contract with the SEIU to represent those who were arrested.

4) The aforementioned Ted Weisgal told the audience that there was a meeting of the Harris County Green Party being held at his business offices on Monday. He pleaded with the audience to get Houston City Councilmember Jolanda Jones reelected.

Mr. Weisgal's words prompted several people to discuss the issue of whether the movement should work with already established leftist groups, but that was something many seemed to be wary about. I don't know why. They all have the same attitudes.

5) The aforementioned Egberto Willies said that the group had to be prepared for the eventuality that the camp in Tranquility Park, which David visited yesterday and posted about, was going to be shutdown. He asked the audience, "where do we go?" This prompted a lot of negative commentary, but people did seem to come around to Mr. Willies' point.

6) One young man said that, "We are fighting a war on selfishness! We are fighting a war on greed!" I had to stifle a laugh. Ayn Rand adherents would no doubt be laughing too.

7) Talk devolved on what Occupy Houston could do. One woman of Asian descent told the audience that there were many foreclosed homes in Houston. She asked how many could be turned into co-ops? How many homes could be taken over by people squatting in abandoned homes? She suggested to the audience that they should look into RICO prosecutions that have been used against drug dealers and crack houses, and that they should find those crack houses to squat in and take over.

That was just a smattering of what was said. There was considerable concern on outreach and perception of the movement, which was strange because at the same time people were making suggestions that they protest in front of the tall buildings of the oil and gas companies, march through River Oaks, and others were concerned that the 99% / 1% mantra wasn't mobilizing people. Talk arose of what was to come after capitalism, but there were so many things that people talked about that there wasn't anything coherent in terms of strategy that came out of the meeting. One person lamented that nothing had happened, and that there had been no change at all over the last two months since the Occupy movement had started.

There were printed materials available at the meeting. This group has printed 10,000 copies of a broadsheet style newspaper, of which I grabbed about two dozen copies. Another handout was from the Houston chapter of Moveon.org, highlighting a site called Rebuild the American Dream. One was a hard copy print out of the reflections on the Occupy movement by Bob Avakian, who is the Chairman of the Revolutionary Communist Party USA.

A fire alarm went off in the library at 3:40pm, causing the meeting to have to break up because the building had to be evacuated. A few people muttered that this was done on purpose, but I doubt that. I definitely caught the whiff of smoke coming from somewhere. The group decided to migrate their moveable feast to the front of City Hall. I decided not to follow them, as I had not had anything to eat all day and I went to grab some chow.

So what to make of all this? David says that this group is not a threat. I came away with the impression that all this is the same stale old stuff that the Left has been pushing for 100 years now - no more wars, neuter those evil corporations, while politically demanding an ever more vast centralized welfare and entitlement state that condemns everyone to a new form of slavery. What's amazing is that looking at this "Contract for the American Dream" printout in front of me is how much of this has already been enacted by the all powerful federal government, but that doesn't seem to faze the Move On folks, nor these Occupy folks. This movement decries police brutality used against them, without seeming to realize that this is exactly what they are wanting to impose on everyone else.

I don't know. One day, maybe, this crowd will wake up to the wisdom of Frederic Bastiat, who wrote that the State is the great fiction whereby everyone endeavors to live at the expense of everyone else. Maybe one of these days, this crowd will volunteer to work at a charity or perhaps write a check to help support them. But after watching this meeting today, I sorely doubt it. Plus ça change, plus c'est la męme.

Wizard


Posted by The Mighty Wizard at 05:20 PM
This entry was posted in the following categories: America , Because they can , Houston and Texas matters

June 16, 2011

There's no magic - It's just a rail line: The agony of Harrisburg and light rail

Yesterday, the winds brought news to the Wizard of a townhall meeting that was being conducted by the City of Houston and the Metropolitan Transit Authority at the Ripley House on Navigation Street. The subject matter had to do with Metro's construction of a light rail line down Harrisburg, and so it was that though the Wizard had had a long day of laboring away for a living, that I decided to head over to see what the commotion was about.

To wit: Metro incorporated a rail line on Harrisburg back for the 2003 rail referendum to appease the Hispanic voting bloc, who had threatened to vote against Metro's rail plans if the government agency did not build a rail line that went through Hispanic areas of town. And so it was that Metro incorporated a rail line down Harrisburg to appease the wolves and sharks.

But Metro decided not to submit the rail line down Harrisburg for consideration for a federal funding grant from the U.S. FTA. Why, because there were problems from the beginning with running a rail line down Harrisburg. One obvious one was that the East End of Houston is where the ship channel and Port of Houston are, as well as much industry. The area has many environmental problems, which would have been unearthed during an FTA public inquiry because all federal grants must get environmental clearance from the U.S. EPA in order to be eligible for a federal grant. Hence, Metro would have to build this rail line out of its own monies.

That however, wasn't the most visible problem with running a rail line down Harrisburg. Union Pacific Rail Road (UPRR) operates a rail line that runs through the East End, and runs several dozen freight trains that traverse Harrisburg every day. Any Metro rail line would have either go over the UPRR rail tracks or under them. That is what this public meeting was about. Would Metro build the rail line over or under the UPRR rail tracks?

The meeting was packed, standing room only, with maybe 200 or so people showing up and cramming into a small room at the Ripley House. City of Houston Mayor Annise Parker conducted the meeting, with Councilmembers James Rodriguez and Ed Gonzalez also in attendance. City of Houston Public Works director Dan Krueger was there, but did not speak, but the other noteworthy speaker was Metro's CEO, George "Good Government Guy" Greanias.

Parker and Greanias presented attendees with computer visuals of what an overpass and what an underpass of a rail line running under the UPRR rail tracks would look like. Members of the audience argued both for and against each proposal. I was amazed to hear that Metro and the City, which having gone so far as to put orange construction barrels for three miles down Texas Avenue and down to the 5500 block of Harrisburg, and having torn up and repaved parts of Harrisburg itself, have not yet figured out what they are going to do about the UPRR rail line.

Mayor Parker made it clear that she was agnostic about which option Metro chose, but Ma Parker can afford to be agnostic. She has the gun, and screwing a few voters in the East End isn't going to matter to her to much, not in comparison to losing political support from the construction mafia wolves who are a big part of Metro's self promoting, agency created mess. Time tables were given; if the overpass bridge option was chosen, it would cost $32 million, but if an underpass was chosen it would cost $43 million. Mayor Parker told the audience that the Councilmembers present had agreed to give up two projects out of the City CIP (capital improvement plan) to come up with $12 million in monies for building the bridge. Another idea floated would be to create (yet another) TIRZ (tax increment refinancing zone) along Harrisburg, with the hope that increased tax values would be captured and spent on the project. One proposal was to try to lobby the Harris County Commissioners into forming a TIRZ along Harrisburg.

Questions were fielded from the audience, with one woman who was holding a baby questioning in detail about the financial assumptions of the TIRZ, and another person saying that he hoped that the rail line would promote tourism in the East End! Mayor Parker remarked - memorably - that:

There's no magic - It's just a rail line. The market will have to decide whether to put money into the area.

The audience was told that if the overpass was built, that the rail line would likely be completed by 2014, while the overpass would be completed in 2016. Many complained about how long Metro had taken in instigating the construction of rail. Mayor Parker remarked on how uncooperative UPRR was - oh, the horror! - and George Greanias stated that legally that it was doubtful that UPRR had any legal right to operate their rail line along the street. Parker made it clear that she was playing hardball with UPRR, but UPRR wasn't backing down. UPRR is not some podunk, small time Ma and Pa business that would be easy for a big city Mayor to bully around, but rather a huge corporation that earns tens of billions of dollars in revenue hauling billions of tons of freight around every year. When I listened to Mayor Parker speak as she did, thoughts of Atlas Shrugged went through my mind, this time with a big city politician trying to whip up on a railroad that provides an incalculable service to Houston, all in the name of a government agency that has the power to call for elections whose intent is to aggrandize itself by spending billions of dollars of other people's money.

And for what? That, gentle readers, is the true question. One elderly gentleman asked why the federal government was not involved? That question wasn't answered at the meeting, but in addition to the environmental problems posed, it turns out that the ridership forecast for Harrisburg is only 7,750 boardings per day by 2015. 7,750 riders per day for a rail line that will cost about $500 million, which will take away 2 of Harrisburg's 4 lanes unless the City and Metro widen the street, and which will result in 28 of 40 intersections being blocked off unless plans have been or are changed. People getting onto Harrisburg or off from Harrisburg will only be allowed to make right hand turns only. Meanwhile, the #50 Harrisburg bus route has been attracting 4,400 - 5,500 boardings for years, and George Greanias stated at the meeting that Metro is trying to identify $20 million in annual operational cost savings, presumably to pay for the rail line. And where is that $20 million in cost savings going to come from? Most likely Metro is going to end up cutting bus service, as they have before.

After the meeting was over, I drove for several miles along Harrisburg and looked at the blocked off lanes, the orange construction barrels, and the businesses whose access to the street have all been blocked off. It struck me that the evening's public meeting was held on Navigation, a street nearly a mile away from Harrisburg, that everyone had gotten to the meeting by cars even with the price of gas at nearly $4 per gallon, and for which light rail would be useless to get to.

It's really sad to see Harrisburg, and indeed Houston itself, go through so much agony for so little return. But such are the joys of modern day American Progressivism, which being the heir of a movement that was launched 100 years ago and which has continually promoted the use of State power ostensibly for the public good, has long since done all the productive useful things that government could conceive of doing, but has created a pile of interest groups in the process and who now demand to continue to be fed at the table like wolves and sharks. To try to continue pacifying these groups, today's Progressives insist on resorting to grand projects with big price tags, like light rail, but which have little or no value, and try to use Democracy as a way to justify it all. That may be a reason why companies like Exxon Mobil are leaving the City of Houston for the distant suburbs, and why Houston only garnered 20 percent of the population gains of all of Harris County between 2000 and 2010.

What Houstonians see with Metro is a microcosm of what Americans see happening in Washington, and today's Progressivism will do nothing but impoverish everyone.

After all, there's no magic in it - It's just a rail line....

Wizard

Posted by The Mighty Wizard at 01:48 PM
This entry was posted in the following categories: America , Houston and Texas matters , Transportation

March 06, 2011

The 2011 Tea Party Patriots summit

Several weeks ago, the Wizard received an email from the Tea Party Patriots tea party group, stating that the organization was going to be holding a summit conference in Phoenix Arizona. The Wizard decided signed up to attend. Some of it was to find out what this group was up to, but I have to confess that some of it was simply that I wanted a few days off from work.

And so the Wizard went. I decided to drive to Phoenix, an 1,150 mile drive. More than a few people thought that I had lost my mind for deciding to drive rather than fly, but it turned out to be a great drive. The weather was perfect, both on the way out and the way back. I put the top down on my convertible outside of Kerrville Texas, and drove for 2-3 hours with the top down.

Note to self: Your car gets bad gas mileage in high winds and when you put the top down!

Anyway, I made it into Phoenix in the dead of night last Friday morning, having left Houston mid-Thursday morning. I felt better than I expected the next day, and I did get to the summit early, which was being held at the Phoenix Convention Center. The Phoenix center is much prettier than Houston's white elephant George R. Brown center. I hesitated to ask how much Phoenix's temple to the convention gods costs local taxpayers, but it was stylish.

But the Wizard digresses. The Wizard stayed at a hotel that was not far from the shiny new Phoenix light rail line. Warren Meyer at Coyote Blog has covered the usual crap that one can expect from Phoenix's version of the toy train, so I won't bother writing anything new here, other than to say that I never bothered to ride it.

While walking on the way to the convention center on Friday from my parking spot, I came across two women who were operating a hot dog stand on the sidewalks of downtown Phoenix. I asked them whether they had to put up with harassment from the local government health inspectors, to which they answered yes. They told me that the Phoenix city government had recently cut back on inspectors because they had budget problems, but they still get harassed, sometimes more than once per day from health inspection bureaucrats looking for permits and that they've followed the endless rules.

With that adventure over, I went to the convention center for the summit. I estimated that there were some 3,000 attendees, but Tea Party Patriots says there were 2,300 in attendance, from around the country. A few thousand more participated in the summit via the Internet (i.e. "virtually).

Items of interest:

The Agenda:

Arguably, this was the most interesting aspect of the summit. I pretty much was expecting that there would be discussion groups, with speakers, making contacts and what not. However, I was not prepared to find out that the Tea Party Patriots, as a group, seems to have a view that there is a wider need for other issues to address.

The Tea Party Patriots have rolled out what they say is a 40 year plan, because not only do the issues of American constitutionalism and politics matter, but they put forth the issues of individualism in the culture. They advanced the argument that what is shown in our movies, our screenplays, our books, and our art reflect what's going on, and that the arts need to show the story of the Founding, as well as the creed of America. As such, there was a reason why people saw folks in costumes, singing songs, artwork, and what not. One of the panels on Saturday night featured some book authors and a (former) Hollywood screenwriter.

The Wizard agrees that the culture matters. However, I agree with Larry and don't think that we have 40 years left to deal with what's happening.

Attendees made it clear that one big thing on their minds was immigration. The Wizard doesn't think that immigration is the biggest problem in America, but for better or for worse, that's not the attitude of many in the Tea Party movement. The Tea Party Patriots have taken an attitude that before anything else is to be done that securing the borders of America must be done before any talk about anything else is to be done.

The straw polls: There were two straw polls, one for people who attended the event, and another for those who were participating online.

The straw poll that was held by people who attended the event was won by Herman Cain with 22 percent of the vote, with Tim Pawlenty coming in second with 16 percent, and Ron Paul came in third getting 15 percent. Meanwhile, the online poll conducted showed Ron Paul getting 49 percent of the vote, with Herman Cain getting 12 percent and Sarah Palin getting 9 percent. The TPP website has links here.

Groups

The Ayn Rand crowd came out to the summit, featuring a booth and literature. The was there, along with many others.

Speakers and Speeches

ARC director Yaron Brook gave a stirring speech at a breakout session on Ayn Rand's Objectivist thought and individualism.

Ron Paul gave a well received talkat the Saturday general session, where he reiterated his stump issues, including persona liberty, repealing the Patriot Act, sound money and getting rid of the Federal Reserve, small government, and non-intervention in foreign affairs (and that included stopping foreign aid). Dick Morris, who happens to be a rather short fellow in person, gave a shrewd assessment on the current American scene, and offered encouragement.

St. Louis Tea Party organizer, and media personality, Dana Loesch, came out to speak on Sunday. She got onstage wearing blue jeans and casual wear, but with knee high black boots - yes, that stuff gets noticed. However, her speech was fiery. She reminded the Republican Party that it was all but dead after the 2008 elections, and that it was the Tea Party that bailed out the Republican Party. She declared that the name of our country was not the United Plantation of America, but rather the United States of America. Freedom Works has a list of links to videos from other speakers, including Governor Tim Pawlenty and Jeff Flake.

I also met author Matthew Spalding, who gave a tremendous talk about American Progressivism, particularly where its ideas originated from. He also spoke of the need to regain the moral high ground once again. He spoke that we have a narrow window of opportunity to regain freedom and that America was at a fulcrum point. The Wizard will be dedicating my next blog entry to enunciating the ideas of Mr. Spalding's talk.

And finally, I can't finish this without giving a mention to 16 year old Caleb Yee, who started the A Team Tea Party group at his high school and has gotten nothing but grief for it. It seems that some groups are more welcome than others in today's government schools.

An overall assessment

The Wizard received an invitation to attend the 2011 Tea Party Summit a mere six weeks before the event was held. Talking with other attendees from around the country made me think that the event was put together on somewhat short notice, but if it was it turned out fairly well. The event was put on right after C-PAC, and considering the short notice it did draw a decent crowd.

For better or for worse, the Tea Party Patriots have to be paid attention to. They have the ear of Dick Armey's Freedom Works, and have the ear of many in the media, and one of the reasons why the Wizard went was to find out who these people were and to see what this group is up to. Did I regret going? Of course not, but now I have to go back to the problems that are at home.

All my adult life I had a feeling that America was going to run into problems in the early part of the 21st Century, as the issues of the welfare state came to a head. Now that they are here, it still hit me like a bolt of lightning, much like the name of this blog implies.

I've been fated to live in some interesting times....

Posted by The Mighty Wizard at 04:58 PM
This entry was posted in the following categories: America , Living a life worth living

February 20, 2011

On labor unions, the political economy, and freedom

The past several days have witnessed the flare up in the State of Wisconsin over how the State is to deal with teachers, who are employed by the State, to teach children in government schools whose attendance is compulsory. America has witnessed the spectacle of Wisconsin Democratic Party elected officials fleeing the state in order to avoid a vote over a reduction in benefits that are paid to teachers, while some 30,000 - 60,000 teacher unions supporters have besieged the capitol in Madison. Meanwhile, Tea Party groups counter attacked yesterday, staging their own rallies to support Wisconsin Governor Scott Walker. This is a pivotal moment in American political life, that will reverberate on whether more resources will continue to be sucked into the political economy, or whether America will start back down the long road to freedom.

Why Labor Unions, and what they're after

A good question to start off this discussion is this: what are labor unions after? It's a simple question, but if we're going to have anything resembling a rational analysis of what's going on in Wisconsin (or about labor unions at all), we're going to have to go back to first things first. The answer is simple: labor unions organize, presumably to help their members achieve a better life, whether that can be achieved through better working conditions, better pay, better non-wage benefits, more vacation time, shorter working hours, or by some other means.
So, a big question for labor unions is, how do you go about achieving your goals? A second, but more subtle question I will ask, but not address here is this: Would competitive labor markets secure what unions would otherwise be after?

In an economy that is organized around markets, and to a large degree the United States economy is still organized around markets, people are for the most part paid at their marginal level of productivity. If you can make 10 widgets per hour and get paid $10 per hour, but then figure out a way to make 15 widgets per hour with all other things being held constant or with nothing changing, then you will eventually start getting paid for your higher level of productivity.

This idea or principle makes life difficult for would be labor unions. If your goal is to improve compensation for the workers in your labor union, then either you have to figure out a way to make them more productive, or else you're going to have to figure out ways to force would be employers to start compensating workers more.

Yes, labor unions do offer training and educational courses for apprentices in some of the construction trades, but for the most part labor unions choose to do the latter. In the parlance of economics, labor unions engage in what is known as rent seeking.

So what things do labor unions do to try to compel employers to reward them more than they would otherwise? There are a number of different things that labor unions do, and they do them for different reasons. First, one must recognize that competition in labor markets is an anathema to labor unions. Therefore, the logical thing for labor unions to do would be to act in such ways that stomp out the competition and yes, the Wizard knows - corporations and business do the same thing, but if you think about the matter carefully, sometimes the interests of business and labor unions meld together!

So, how would a labor union go about shutting out the competition via the political process?

1) Go to elected officials and get them to pass closed shop legislation, or alternately union shop legislation, which would outlaw non-union competition labor in the labor market. The Wikipedia entry notes that Closed Shops are outlawed in the United States after the Taft-Hartley Act of 1947 was passed, which in turn amended the Roosevelt Era National Labor Relations Act. More about this later.

2) Shut down anything resembling free trade with other countries, as trade invites competition, but it also frees up resources for people to pursue gains to be had via comparative advantages. That's why labor unions went berserk when their man, Bill Clinton, managed to push through the NAFTA free trade agreement back at the beginning of 1994.

3) Try to attempt to interfere with the free movement of capital, since business can invest their money in places where there is non-union labor competition or labor union unfriendly legislation in place, such as right to work states, or investing in other countries. Unions have largely not been able to prevent the movement of capital.

4) Employ the political process and the law to create barriers to entry into the job field in order to reduce the number of people who can legally enter and practice in the job field. Doctors and lawyers come to mind, and doctors voted to unionize in America back in 1999. Licensing of workers is widespread in union dominated job fields, including employing the use of teaching certificates to be employed as a teacher, and licensing in the construction trades.

5) Labor unions will often support such ideas as minimum wage laws. Why? Because gentle readers, minimum wage laws are a floor on the price of labor, ergo some people who might be willing to work in labor markets for lower than the minimum wage will be banned from doing so, which diminishes competitive pressures in labor markets.

But this isn't the end of economic analysis of labor unions. As we have seen, unions try to justify their existence by increasing compensation for their members, but in order to do that, it implies that unions will form in organizations and markets that will be around for a while. People who want to form labor unions will not bother to waste their time organizing for spot markets, say for example, fire works stands (which pop up for the Fourth of July and for New Years, but are dormant for the rest of the year). Instead, labor unions will target situations where they can sit down and dig their claws into. Examples include the automobile industry, which has been a huge economic force now for the past 100 years, the oil and gas industry (or more carefully, the oil refining industry), employment at shipping ports (which could be around for centuries), and yes - governments.

In other words, what labor unions want is a marketplace where there will be an inelastic demand curve for the labor that the labor union provides. That in turn means that unions can really only thrive in an environment where the factors of economic productivity are stuck in place, or stuck in country. Anything that promotes mobility of economic productivity is a death sentence to unions, whether those factors are people or investment capital. It's impossible to capture economic rents when productive factors are mobile and can run away from you.

Governments are particularly attractive for labor unions simply because they have a monopoly on force, and once formed they stay stuck in place and never go away - unless they are overthrown! Talk about setting up an inelastic demand curve for union labor! The London Tube system has been around for over 100 years, and yes, the labor union that Tube workers belong to has been very successful at extracting rents. The City of Houston was founded in 1836, and received its home rule charter in 1905, and doesn't look to be dissolved any time soon.

More pertinent to what's happening in Wisconsin (and in Ohio, and it may well come to Texas within the next month or two), attendance at government schools is compulsory and is enshrined in law for 12-13 years of a child's life in many places around the world. In Texas, Chapter 25,094 of the state education code makes failure to attend school a Class C misdemeanor offense, punishable by up to a $500 fine. The legal compulsory universal attendance of school literally sets up a politically created market, composed of a never ending river of kids that will go through the system, that literally will never end as long as kids are compelled to attend school by state fiat. It should be absolutely of no surprise to anyone that eventually school district employees around the country eventually unionized. They knew they were going to be there today, and that their jobs were guaranteed to be around tomorrow, so why not sit around and unionize and start extracting some economic rents via the political process?

More to the point, compulsory schooling and its drawing of education into the political economy, has turned schools into jobs programs. This past week, the Wizard attended a forum in the Texas Capitol, where I picked up a booklet about Texas government schools. The booklet stated that 665,000 Texans were employed by the Kindergarten - grade 12 school system, with 4.8 million kids enrolled, with a little over 50 percent of those employees being actual teachers. Maximum student to teacher ratios are in fact enshrined in section 25.111 of the Texas education code at 20-1, making for a rigid regime, and guaranteeing that vast taxpayer resources are to be dedicated towards schools (albeit, to be fair to Texas government school teachers, they are not members of unions). In fact K-12 government schools in Texas (and America) employ some 6-7 percent of all Americans in the labor force, and as we are witnessing in Wisconsin, when you have that many people employed by the state, they (and their spouses and families) become powerful voting blocs to be reckoned with.

And that leads the Wizard to his next topic, which is....

A short history of labor unions in America, the law, and assaults on freedom of contract

Labor unions were not around at the time of America's Founding, though there were earlier versions of what could be classified as labor groups. Many countries in the Middle Ages had trade guilds, which could be seen as a form of unionism (as well as cartelism).

But the modern version of what we've come to know as unionism really got its start a little over 100 years ago, and particular when the legal assaults on the freedom of contract were waged and prosecuted over a period of some 60 years. University of Chicago law Professor Richard Epstein artfully describes how this assault occurred in his book, How the Progressives Rewrote the Constitution. The opening skirmish in labor unionism and labor law was in the famous case of Lochner vs. State of New York, which invalidated state laws to regulate working hours.

But the Progressives didn't stop their attacks on freedom of contract, and they usually employed moralistic tones when pushing through their legislation that started placing curbs in freedom to contract, such as in the prized political achievement of outlawing child labor. Now, most Americans living today would be horrified at the prospect of children working, but it's quite easy for us to forget amidst our lavish wealth that children were (and in some areas of the world still are) sent to pick the fruit and work the fields since time immemorial.

Moreover, and this is extremely important, Professor Epstein notes in his book that child labor in America was already on the decline while the Progressive era was unfolding! In other words, the legislation prohibiting child labor was largely unneeded for the simple fact that parents of the era were starting to recognize that the jobs of the future were going to require that kids learn their readin', writin', and 'rithmatic, and that it would be a better thing if they started investing time and effort educating their children, rather than send them off to work a job.

But what was important is that America was stuck with the precedent of using legislation to assail the freedom of contract, and once you start traveling down that road, each legal step along with way is justified by the previous step, and each step enshrines state action.

But freedom to contract was not only assailed through child labor laws. Over time, labor unions were granted more rights enshrined in law, culminating in the 1935 National Labor Relations Act (aka the Wagner Act). It was this act that established that workers and unions could engage in collective bargaining with private employers, but even the New York Times notes that Franklin Roosevelt did not go so far as to allow within the law for unions to engage in collective bargaining with governments, calling the idea "unthinkable and intolerable." But it wasn't until 1959 that states first started allowing for government employees to engage in collective bargaining with elected officials, and ironically the first state to do so was.... the State of Wisconsin. But the practice soon spread, and now we have numerous states that are hemorrhaging in red ink from underfunded pension woes, a problem that lurked out there until it was - like so much - finally brought out into the open by this ongoing recession.

So why was there so much political and legal support for collective bargaining? One big insight can be gleaned from reading a passage in Professor Epstien's book, where Epstein quotes former Supreme Court justice Felix Frankfurter, who wrote in 1920 in the Yale Law Review:

"Collective Bargaining" is the starting point of the solution and not the solution itself. This principle must, of course, receive ungrudging acceptance. It is nothing but belated recognition of economic facts - that the era of romantic individualism is no more. These are not days of Hans Sachs, the village cobbler and artist, man and meistersinger. We are confronted with mass production and mass producers; the individual, in his industrial relations, but a cog in the great collectivity. The collectivity, must be represented and must be allowed to choose its representatives. And it is through the collectivity, through enlisting its will and its wisdom, that the necessary increase in production alone will come. Needless energy is wasted, precious time is lost, precious feelings are diverted and disturbed by the necessity of fighting for the acceptance of the principle of collective bargaining instead of working out the means and methods of its application.

In other words, according this world view expressed by Frankfurter mirrors the world view of the "Progressives" of 100 years ago. Much like how John Maynard Keynes created an economic theory that emphasized an economy that was composed of nothing but aggregates, America (and indeed the world) was, according to the Progressives, filled with nothing more than empires of massive corporate employers, employing faceless masses of people, all doing soulless and meaningless work. The only way forward in this new, 20th century, mass industrial world was to allow the troops to organize themselves into a mob empowered by Democracy, and, if it came down to it, hold the big evil employer at ransom if that's what it came down to it. Yes, unions are thuggish. After all, this was politics, and in this new world there was no room for the individual. Such ideas - and that included the freedom to contract - were held by Progressives to be antiquated and belonged to the horse and buggy world of 1776 and 1789. Congress in modern day America was now held to have the power to do anything needed to alleviate any alleged miseries and alleged social problems, all in the name of the public welfare, and government solutions to problems ultimately involve socializing costs and enacting some form of collectivism. That's what the Progressives dumped on America, and that's what they're still fighting for.

But what about now and what about the future?

The Tea Party movement erupted in late 2008 - early 2009, in part because big corporations like General Motors and Chrysler, along with their labor union employees, were being bailed out instead of being allowed to fail when the American economy went south, and for when there wasn't a desire to buy their products. The perception amongst millions of Americans (and that perception was in fact the reality) was that Congress, and President's Bush and Obama, were bailing out favored and privileged groups, while sticking the taxpayers with the bill. What we are seeing now in Wisconsin, and which will probably spread to other states, is round two of what happened two years ago: that another group of workers, this time employees of the government who are in the political economy, who are ostensibly paid to educate kids, are also fighting to hold onto privileges that they've been granted via the political process, and that they somehow believe that they should be immune to the economic forces that have wiped some 8 million jobs away from the American private sector economy.

One issue that freedom minded Americans, and that includes Tea Party members, are going to have to confront is the issue of government involvement in education. I've discovered over the past two years that there are plenty of people (including Republicans and Tea Party members) who believe in the status-quo, and that includes State government mandates that the state is to compel kids to attend school by force of law. At a deep and fundamental level, such an idea is incompatible with true liberty and freedom.

It may well be that for the meantime with regards to State governments, liberty fighters will have to content themselves with merely holding back against the powerful wave of constituencies, including Medicaid recipients and the medical profession, as well as fierce political demands to keep things as they are for the government school empire. I'm not sure how many Americans are ready to deal with home schooling their children, or putting them in private schools, which would be the ideal solution for dealing with the problem of government schools and government school labor unions. My suspicion is that many business leaders also politically support government schools, on the precept that they would be afraid of what kind of labor force they would get should the government school system be abandoned.

Having said that, America has in general managed to mute much of what labor unionism did in the private sector. Companies can move their investments away from labor union disruptions and reach, and the marketplace can always act to discipline participants. Union membership is at an all time low, and is not expected to come back. Most Americans seem to understand and accept the idea that they are not entitled to their jobs, and that's important. That idea now has to be enacted and extended to government.

Wizard

Posted by The Mighty Wizard at 05:55 PM
This entry was posted in the following categories: America , Because they can , Culture , Money and finance , The World at Large

January 28, 2011

1989 and now 2011: The Arab world, the fires of revolution, and what it means for America

Greetings everyone: The Wizard returns to blogging.

Much has happened since the Wizard laid down his poison pen keyboard. Just two nights ago, Mr. Obama made his State of the Union address to America, something that Becky reminds us that only our first two Presidents did before Presidents simply started writing reports to Congress. Then came Woodrow Wilson, who started making an annual appearance before Congress, and all Presidents did so. She then links to a book that says that America's Imperial Presidency started with Wilson.

But the Wizard digresses. Actually, Mr. Obama's State of the Union address isn't the most exciting thing going on in the world right now, nor will America's budget problems be the most exciting issue in the year 2011. So what is, pray tell? The answer, gentle readers, is that we are not even finished with the first month of 2011, and already 2011 is shaping up to be the year that people all across the Arab world may finally rise up and overthrow the despots that have kept them in chains. 2011 will be the most exciting year in world affairs since 1989, when the Communist bloc of Eastern European countries finally threw off the yoke of 45 years of rule from the Soviet Union, in addition to revolts that happened in Burma, the Philippines, and in China.

First, less than two weeks ago, citizens in Tunisia rose up and overthrew the government of Zine al-Abidine Ben Ali, because citizens were demanding jobs and an end to corruption. Mr. Ben Ali, who had won five consecutive terms in office, with between 90 - 99 percent of the vote, then subsequently fled to Saudi Arabia, whose rulers had suggested that he keep his nerves and talk to the rioters.

Word comes from Britain's Daily Telegraph that the rioting started when a young man set himself on fire after having his fruit and vegetable stand - his meager livelihood - taken from him because, you guessed it, he didn't have a license. And you know what that means, don't you? That means that this was done because of that hoary old excuse that all governments use, which was that the government has to protect the public. It goes without saying that the state needed to pinch a few dinars off the poor young man through granting the license, and grant him the privilege to operate his meager fruit stand.

In other words, it is critical that we understand where the spark came from with respect to why this unrest has exploded.

Now, the news has come that this Tunisia effect has spread to Jordan, Yemen, and most notably Egypt, where the long time government of Honsi Mubarak has ruled under emergency rule for 30 years.

The Wizard has been keeping up with the technology side of this, as Slashdot reported that Twitter services, then phone and Internet access have been shut down by Mubarak's government.

Based on early analysis, the causes of all this unrest have different sources, and their outcomes will probably vary as well. In Jordan, citizens are protesting high food prices and corruption, while in Yemen the fight is over "proposed constitutional amendments that would abolish presidential term limits and the timing of the upcoming parliamentary election in April", according to the Christian Science Monitor. The CSM story reports that the opposition will refuse to take part in elections this year if these proposed political changes take place. In Egypt, the issues are poverty and corruption, along with the fact that Mubarak has ruled for 30 years ever since he took control over the country after Sadat was assassinated.

All this unrest puts America into a conundrum. Some of the rationale that American neo-conservatives like William Kristol and Robert Kagan gave for getting America stuck in the swamp morass invasions of Iraq and Afghanistan was that America had to have a muscular foreign policy that included promotion of democracy, free markets, and liberty. The problem with this idea is that the regimes that we were recognizing, like Mubarak's, were and are effectively "soft dictatorships" (for a lack of a better term), which were most likely backed by America for fear that something worse would take their place, at least from the point of view from Washington. Statecraft is an ugly business, but no doubt that Egyptians are wondering whether the posture that America's political leaders would mean that their demands are seen as illegitimate from America's view.

But this still does not explore the entirely of the situation. We do not yet know what the outcomes of these protests and riots will be, nor do we know how far this unrest will spread. Just several days ago, Sheik Al Sabah of Kuwait made a sudden announcement of a 1,000 dinar ($3,559 in U.S. dollar) handout to all Kuwaiti citizens, stating that this was in celebration of several national milestones, including 50 years of independence, and the 20th anniversary of the U.S.-led invasion that drove out Iraqi troops out of Kuwait.

Hmmm....

A true libertarian would say, well all this is not America's problem. The problem with that supposition is that we never quite know if the political leaders of other countries might try to make all this unrest America's problem, or whether protesters may see America as part of the problem, such as is suggested in this Wikileaks story in Forbes. Other issues may arise, such as whether the unrest will spread to Saudi Arabia. But, at the same time, this unrest is so widespread that there may well be little that America can do, other than to simply let the chips fall where they may and then deal with matters after the dust settles. It should go without saying that the world is watching what Mr. Obama is going to do, because these events will show what kind of person he really is.

Then there is the very important matter of whether America should do anything about this. That in turn breaks down into whether you look at the rising unrest from the perspective that the people of the Arabian world are rising up to overthrow dictators, or whether you think America must continue to tend to the military and economic interests via Realpolitick.

One thing that all this unrest underscores is that America needs to get its own domestic financial house in order, lest our staggering $1.5 trillion per year federal deficits finally spiral out of control and leave our country vulnerable to the winds of the world. The bills of the welfare and entitlement state that was created in the 20th century, and which today's "Progressives" are still trying to push even further, are now coming due, and that in turn means that America needs - for our children's sake - to have a self examination of what our government is really all about.

Addendum: The Sydney Morning Herald has a very interesting take on the rapidly developing events in Egypt, noting that

[U.S. Secretary of State Hilary]Clinton uttered the ''stability'' line early in the week - before the seriousness of what is unfolding in the streets of Cairo and Alexandria came in to focus. Consider how it might be interpreted by ordinary Egyptians - the human rights of 80 million people have been trampled for 30 years but what the US Secretary of State is most concerned about is the stability of the state.

Posted by The Mighty Wizard at 10:45 AM
This entry was posted in the following categories: America , The World at Large

November 15, 2010

The 2011 Texas legislature - on the State budget and Medicaid

Last Friday at an event, a reader reminded me that I had not posted since October 4th, and it was high time the Wizard got off his rear and wrote something. So, the Wizard decided to turn his gaze 170 miles west towards the City of Austin, and started contemplating the madness, chaos, hell storms, and deep in the night swindles and trickery that will ensue once the 82nd session of the Texas Legislature is mustered and is called to order come January 2011.

By now, gentle readers will know issues the Texas Legislature will have on its agenda: How will Republicans govern with a huge majority of 99-51 in the Texas House? Redistricting the district boundary lines for both state and federal elected officials will consume much time. Ever since the State of Arizona passed its legislation on border issues, there has been much clamor on the political right to address the Texas-Mexico border. There will be a renewed push for photo identification for voters, but the perhaps the biggest issue that is really making everyone nervous is what the Texas Legislature will do about a possible $20+ billion shortfall in the state budget.

A brief digression. Texas, like nearly all other states but unlike the runaway federal government, has a state constitutional requirement that its budgets are balanced. States do not have printing presses at hand, unlike Congress which has the U.S. Treasury and Federal Reserve at its disposal. In one of the early American Republic's first economic crises, the panic of 1837, many American states went into default. The fallout from that economic recession was nearly all U.S. states adopted fairly strict budgetary rules against any kind of official long term borrowing. On paper, the books have to balance.

So how did the State of Texas find itself in such a fiscal mess that it is in now? Perhaps the best source for overall budget issues is to visit the Texas Budget Source website. There, one can find trends in State government, as well as what the State spends on general line item appropriations. The website also has links to the budgets of cities, counties, school districts, and other special purpose districts. What a website!

A general overview of the state budget quickly shows that the "mommy" issues of state funding of schools and health care predominate the state budget. The two year, 2010-2011 state budget was set during the 2009 Legislature at $182 billion. $75.5 billion of this was state funding of education, with $53 billion going to local government school districts and the other $22 billion going to universities and higher education. Another $60 billion went to "health and human services", meaning mostly government funded medical care. Of that figure, nearly $34 billion came from the federal government in the form of federal taxpayer monies that were redirected by Congress to the state. So, of the $182 billion state budget, government schools and HHS funding (primarily of health care) amounted to $135 billion or nearly 75 percent of the state budget. Moreover, 37 percent of the state budget, some $68 billion, came from Congress.

Other item of interest is that the Texas budget source website clearly shows that it is government funding of health care and schools that are the drivers of the budget. The HHS budget has grown from $30 billion in 2000-2001 to nearly $60 billion over the past 10 years, while state funding of education has grown from $45 billion to $75 billion over the same time period. The state population has grown from some 20.8 million in 2000 to some 25 million in 2010. An online inflation calculator shows that inflation from 2000-2010 was 28 percent. Putting a combination of population growth and inflation pressures reveals that overall state funding of schools has somewhat outstripped population growth and inflation, but state funding of health and human services has way outstripped population growth and inflation.

Combine all this spending growth, along with their massive political constituencies, and put it together with a slow economy, and presto! the state gets a big budget deficit.

A big story that made the headlines over the past week was that in order to close the $20 billion gap in state financing, some lawmakers were considering the idea of having the state drop out of the federal Medicaid program. The New York Times story noted that early indications were that dropping out of the program would have a tremendous financial ripple effect.

Consider this: Progressives manage to pass a U.S. constitutional amendment in 1913 imposing an income tax on Americans. Then over the next 100 years, a vast array of programs get enacted by Congress, whereby Washington distributes hundreds of billions of taxpayer dollars to the state governments, whose own residents were the ones who paid those dollars in the first place. So, the game is often set up whereby state governments roll over and do what Washington says, if only to capture those dollars for their stated purpose. In the process, the states effectively became nothing more than appendages of the federal government.

As a Tea Party person, one question to be asked is this: Is Medicaid constitutional? I hate to pester people with this, but no doubt the progressives would reply that, yes it is! Why? They'd probably hang their hats on the usual suspects - the ever expanding Commerce Clause and Congress's taxing powers. Not to mention that as long as the New York Times thinks that me being forced to pay for somebody else's nursing home care is a good idea, and because it's a good idea in their opinion, then gosh darnit, it's constitutional!

Medicaid, as the Wikipedia entry notes, was enacted in 1965, as part of the massive wave of Great Society programs. Whereas Medicare was envisioned as yet another social insurance Ponzi scheme add on to the Social Security Ponzi scheme, Medicaid was a straight shot welfare program for the poor. Medicaid is jointly funded by Washington and the states, and on paper the states administer the programs. Participation in Medicaid by the states is voluntary, but once again, if a state government decides not to participate in Medicaid, then effectively that state government is surrendering the income tax monies of their residents to Washington, and neither the citizens of the state nor the state government itself will recapture back those dollars when the state government refuses to participate in Medicaid. Those federal general revenue income tax dollars will almost certainly go to another state or they will be reallocated to another program. In other words, the effect of Medicaid is that a big federal government program leads to big state government, and setting this arrangement up the way the Progressives did was done on purpose. After all, when you've gamed the system this way, why would any state bother to not throw in the towel and start participating in Medicaid?

One big item that was only glossed over in the Times article was what recently transpired in American health care - the passage of Obama Care. The (misnamed) Patient Protection and Affordable Health Care Act of 2009 legislated many things, as any 2,700 page long piece of legislation would, and one big thing that Obama Care legislated was an expansion of 20 million Americans who would eligible for Medicaid, $1,300,000,000,000 per year federal budget deficits be damned and state governments be damned. In other words, one of the things that Congress did was dump a massive unfunded mandate on the states and told them that it was their problem to deal with it. Since Texas has eight percent of the country's population, it is quite likely that the state will be compelled under Obama Care to add another 1-2 million residents to Medicaid under Obama Care, and when you're facing a $20 billion budget deficit already, then hard choices have to be made.

When seen in this light, the floating of the idea by Texas legislators of dropping out of Medicaid entirely deserves a new look. It's not as though Medicaid (or Social Security or Medicare for that matter) is some great achievement. Reason magazine has further reading here, here, and especially this article where some studies show that getting your health care taken care of by Medicaid often results in worse outcomes!

So what would happen if the state of Texas were to drop out of Medicaid? Of course the federal government would then keep several tens of billions of dollars of Texas residents income tax dollars, but the state would be free of federal mandates. The state would then have liberated its citizens to look for private solutions (at the cost of ransoming up its citizens' federal income tax dollars), or the state could figure out some new solution to deal with the issues that Medicaid purports to address. The state would regain much greater control over its own fiscal destiny, not being driven by a major mandate from a overbearing Washington that refuses to get its own fiscal house in order before dumping more mandates on Americans in some fit of Cloward - Pivenism.

Wizard

Posted by The Mighty Wizard at 12:20 PM
This entry was posted in the following categories: America , Because they can , Houston and Texas matters , Money and finance

September 27, 2010

Has America finally jumped the shark?

This weekend, economist Tyler Cowen made a post at his Marginal Revolution website entitled The Shape of Things to Come and Not to Come, which in turn was inspired by a Matthew Yglesias post, that has garnered quite a few responses. The Wizard felt inspired to write, especially by a response to Cowen's post by a visitor who observed that

We've finally jumped the shark. The State is now fixated on continuity of government for its own sake. All we can pray for is some cosmic justice where liberals are taxed into oblivion and their favorite programs slashed. May conservatives be investigated as enemies of the state for their bad attitude. Maybe tax evasion can be re-defined as an act of terrorism.

Maybe "the great filter" is when people worth proliferating finally say "f*** it."

And this is not idle talk. Over the past few weeks, the Wizard has been out and about, and has heard prominent Houston area leaders say some very interesting things in public. For example, Houston business man Jim McIngvale - aka Mattress Mac - told the audience at an event in his original store that he had recently had a conversation with another wealthy businessman who wondered whether America's best days were behind it. McIngvale, ever the optimist, said no. At the recent quarterly meeting of the Harris County Republican Party, Harris County District Attorney Pat Lykos spoke, and she told the audience that she was not of a mood to give up on America. She invoked history, telling the audience that Democracy in ancient Greece had lasted several hundred years, while it had lasted a similar amount of time in Rome. She said America was now in her third century, and she told the audience not to give up on her.

The Wizard, quite frankly, is starting to wonder whether America has finally jumped the shark, meaning that is the Tea Party movement an expression of the idea that we are tired of being pack mules for someone else and being looked at as simply being there to pay the bills! If a liberal tries to talk up the idea that we have mounds of poverty in America, then great. So what are you trying to tell me? Are you saying that you can't solve poverty even after the federal government has started spending the equivalent of 25 percent of the entire economy of the country? Are you saying that Social Security has to go on forever just because the first two generations got away like bandits off of the scheme? At what point are Americans going to be allowed to get off the merry go round? Never! In fact we have to continually tighten down the screws because it's all being done for your own good.

In the Summer 2010 issue of the Independent Review, scholar Anthony de Jasay wrote an article entitled The Maximizing State, whereby he concludes that not only does the state use "taxation and redistribution to elicit obedience and maximize its discretionary power," but Jasay argues that

Eventually, however, that power is dissipated through political competition of the state’s own making... Like the firm in a perfectly competitive industry that makes no profit, the state ultimately achieves only its own survival, and no one is satisfied by this relatively pointless result."

In other words, Jasay points towards an idea more and more groups keep fighting over who's going to get what, crisis situations result, but eventually people wake up to the realization that the state is nothing more than a redistributive drudge, and that's when the energy runs out. It's hard to imagine that happening to America, whose Founders created a purposefully energetic government, if it was needed to be energetic, but it even can happen to us.

If America is not to jump the shark, then she'll need to be saved. Britain's Daily Telegraph ran a story yesterday asking whether the Tea Party is more powerful than President Obama? That may be so, but the real question is whether the Tea Party movement is more powerful than the AARP, Wall Street, the military industrial complex, the medical industrial complex that's resulted from Medicare, Medicaid, and Obama Care, along with the countless other social programs and interest groups that have arrayed in Washington? If the Tea Party movement can't beat this vast array of interest groups, then that will be the signal that America really has jumped the shark.

Wizard

Posted by The Mighty Wizard at 09:55 AM
This entry was posted in the following categories: America , Because they can , Living a life worth living

September 19, 2010

Bruce Mosier: A Democrat I will vote for & reflections on the insanity of Democracy

The Tea Party movement has been (with justification) been labeled as just another branch of the Republican Party. The Wizard thinks, however, that the real fidelity of a Tea Party person should be to the principles embodies in the United States Constitution.

Long time readers will know that the Wizard spent some nine months of his life back in 2007 - 2008, working with the Floodway Coalition of Houston, in their desperate property rights battle against Houston City Hall, to roll back revisions to Houston's Floodway ordinance, which if it were have been allowed to stand would have resulted in a $2 billion - $3.5 billion regulatory taking by the City of Houston of 10,000 properties along Houston's creeks and bayous. The ordinance was perpetrated by former Mayor Bill White (a Democrat, now running for Governor), and the Mayor was strongly backed by Republicans on City Council like former CM Toni Lawrence. The floodway regulatory taking represented a bi-partisan oppression of Houston's citizenry.

One of the Floodway Coalition's attorneys who conducted the legal battle against the City's uncompensated regulatory takings of the property of Houstonians was Bruce Mosier. Mr. Mosier, a long time property attorney and a Democrat, currently works for Harris County. The Wizard personally saw how Mosier defended the property rights of Houstonians (read one notable case here), many of whom were completely unaware of what had happened to them, and how important it was that a group of citizens and their legal counsel were working for them.

Yesterday, the Wizard attended the League of Women voters event at the George R. Brown convention center. I was wearing my Houston Tea Party society shirt, but I was also wearing a tag stating that I was supportive for Mr. Mosier. At one point I was stopped and harshly attacked by one woman, who I could tell was a Republican from some buttons she was wearing on her shirt. She said the Republican was well qualified, but the Wizard strongly stood his ground. There was no way that I was going to be budged from my support of Mosier.

The Tea Party movement needs above all to remember that you need to watch what individuals who are in office or on the bench actually do on issues while they hold office, no matter whether they have an (R) or a (D) behind their name. The Wizard will never support Toni Lawrence, for example, if she ever again tries to get elected. It is when it comes down to the issues where the party labels become murky and break down, and it is where politicians stand on issues that really matter. Just ask Delaware Senator Mike Castle, whose loss to Tea Party upstart Christine O'Donnell this past week rocked the national Republican establishment.

So, the Wizard is going to make his pitch to his Tea Party and Republican friends not to vote straight ticket, but to cross party lines and vote for Bruce Mosier for County Civil Court at Law No. 4 of Harris County, Texas in the November 2010 election.

******

The Wizard's crossing of party lines to support a political or judicial candidate should not leave open my motives, but rather it should open the question of the information that the citizenry has available to them when they are being asked to vote in elections. Someone recently told the Wizard that the upcoming November 2010 elections in Harris County are going to feature the longest ballot in the history of the American Republic. There are literally over 70 judicial races (civil, criminal, family court, and state district), as well as congressional races, state representative races, school board races, a bond issue out in Katy Texas, three propositions on the City of Houston ballot, as well as the race of Texas Governor. The Wizard himself didn't even know that there was the judicial position that Mr. Mosier was running for until a few months ago, and if someone as active as the Wizard didn't know, then what hope does that leave for the citizens who choose not to be active?

Some of this is self inflicted. The State of Texas has created this complicated, bifurcated system of justice, whereby judges are elected in the state. Civil cases are shunted off in one direction, while criminal cases go down another pipeline. Then the civil cases are subdivided into several different categories. Then top that off with all the political races, and it quickly becomes apparent that the political classes are dumping a horde of questions on the citizenry.

In the face of this, it's easy for citizens to simply throw up their hands and not participate, perhaps thinking that it doesn't matter (or make a difference) in many cases how they vote or what they do. For many who are not politically active by choice and do not have their noses pressed up against the glass, the short cut they take in the face of this overload of politics and information is to simply to roll into the voting booth, vote straight ticket along the party line, and then they're outta there. If someone like myself crosses party lines for a candidate, they are immediately thought of with suspicion by those who seek to rope me in on the party line, and find that we have to explain ourselves when in fact it should be the other way around. It is the politicians and parties who are the ones that need to be explaining themselves.

The Wizard has long resigned himself to the insanity of the decision making process of politics, having long ago encountered the public ignorance literature, as well as the public choice literature. The Wizard also started reading through the Anti-Federalist papers, where the Founding generation experimented with various forms of government before settling on the U.S. Constitution. Some of the questions the Founders had to confront had to do with justice, and whether it was better for judges to be elected or appointed? There is a tension in American political life, whereby it was declared that Americans have the right to Life, Liberty, and the Pursuit of Happiness, but on the other hand there is a concept that the power lies with the people and that government rules with the consent of the governed. An answer the Founders came up with was to divide power, keep many matters of liberty off limits (through the Bill of Rights) and to temper and refine decisions through several different means, such has having two legislative bodies and judicial review.

The Wizard suspects that a big problem for American political theory in today's America is that many are thinking that they were (or are) not consenting to what's been shoved down their throats over the past several years (the TARP, the ARRA, ever expanding federal power, liberal victories that last forever while conservative ones that come with an expiration date, etc), and that they are preferring Life, Liberty, and the Pursuit of Happiness. The tension between the two ideas has once again reared its ugly head, and what remains to be seen is whether all this can be resolved peacefully. The Wizard foresaw years ago that the tensions of our times might come to pass.

Wizard

Posted by The Mighty Wizard at 06:40 PM
This entry was posted in the following categories: America , Culture , Houston and Texas matters

September 13, 2010

The (mislabeled as usual) Livable Communities Act of 2009

The Wizard apologizes for not getting a blog entry out and published on Sunday night. Missed that self imposed deadline again.

News has slowly been percolating through the blogosphere and social networks about the mislabeled as usual Livable Communities Act of 2009. Briefly, the bill is being pushed by Senator Chris Dodd, through the Urban Affairs committee in the Senate. According to GovTrack, the bill is to

to establish the Office of Sustainable Housing and Communities, to establish the Interagency Council on Sustainable Communities, to establish a comprehensive planning grant program, to establish a sustainability challenge grant program, and for other purposes.

The bill is to burn through spend $3.75 billion in federal grants to cities across the country to enact the Smart Growth agenda. Some of my friends have made noises of this bill being the vehicle through which U.N. Agenda 21 is to be enacted in America, but there really isn't a reason to get conspiracy minded about shadowy international forces being behind the legislation. Actually, if you simply visit the GovTrack website, readers can see who is in favor of the legislation:

U.S. Green Building Council
National Leauge of Cities
Metropolitan Washington Council of Governments
American Institute of Architects
American Public Transportation Association
American Public Works Association
Children's Defense Fund
Habitat for Humanity
National Association of Area Agencies on Aging
National Association of Realtors
National Housing Trust
Policylink
Sierra Club
Trust for America's Health
U.S. Conference of Mayors

In other words, this bill is a handout and make work program to the central cities, one of the primary parts of the Democratic coalition for the past century, as well as to the "Smart Growth" crowd, to reshape American cities if they dance to Washington's tune.

It's really depressing to see the AARP as a backer of this legislation. Not content with making sure that $1,200,000,000,000 per year in wealth gets transferred to the old folks through Social Security and Medicare (not to mention having succeeded in getting Americans to pay for the pills for the old folks and coming out in favor of Obama Care), the AARP is now in the game for having my income tax dollars reshaping American cities.

From a Tea Party perspective, question number one about the legislation is that rather quaint one - namely, is this bill Constitutional? "What?!", cry the Progressives. "Of course it's constitutional! It's constitutional because it's - drum roll please - good public policy!" That's especially true if the New York Times editorial board believes it is, and this argument of it's constitutional because it's good public policy crap has been the mark of American jurisprudence for the past 100 years now.

No doubt that some are going to try to lay on the argument of, "well, the federal government enacted the Interstate Highway Act back in 1956, and that contributed to urban sprawl, so why can't we enact another bill to counter that." That argument smacks of the idea that one piece of state interventionism justifies the next one, and that's one of the reasons why government keeps expanding. Big Federal government leads to Big State government and Big Local government. And so it goes, unless the Tea Party can digest this, understand it, and put the heat on Washington to end it.

So what to do? Much of the problem with America is understanding who is responsible for what. Why not let private actors offer "livable communities?" Such an idea is more consistent with liberty. If interest groups are truly interested in reshaping cities this way, and demanding that the arm of the state act, then they should be taking this issue down to their local city councils and demanding that they raise property taxes on local taxpayers to reshape their city, rather than go plunder Washington like everybody else. Otherwise, take a few minutes out to bug your Senators and tell them to vote no, and tell them why.

Wizard

Addendum: Becky points out that statist resettlement of the populace, whether forcibly or by economic encouragement (the American way), is a staple of dictators, authoritarians, and the Left. Stalin, the Chinese Communists, Pol Pot, and other dictators resettled and herded people around.

Even worse, it rarely achieves anything worthwhile, but it often does get people very upset, as it did in Post WWII Britain, when the Labor Party built the New Towns to house the 3-4 million Britons who lost their homes in WWII.

Posted by The Mighty Wizard at 11:52 AM
This entry was posted in the following categories: America , Because they can , Transportation

September 05, 2010

A question for Labor Unions on Labor Day

Sigh. Another year, another Labor Day weekend - or is it?

Many Americans are no doubt going to celebrate Labor Day by doing what they usually do - have cookouts, perhaps enjoy a parade or some celebration with family and friends, or sit around the house like we used to as kids and watch the Jerry Lewis muscular dystrophy telethon. Meanwhile the labor movement and the media will run the same old stories about how the labor movement was responsible for winning the 40 hour work week, health insurance benefits, campaigning for safer workplaces, and other legislative achievements from days gone by, when the labor movement was in its glory, doing much to bottle up the energy of the economic marketplace. One wonders whether or not the marketplace might have brought this about on its own without the labor movement.

But this year's celebrations of the Labor Day weekend holiday seem to be fraught with the irony that on the day we are supposed to be celebrating the contributions of the labor movement to the pluralism of American life, that unemployment by any measure remains high by historical standards. And in the background, the November 2010 elections loom.

Though many will no doubt be touched by the irony of many being unemployed on Labor Day, those aren't the real issues that America faces today. One problem that many Americans have with the labor movement is that the movement has become synonymous with escalating government employee pay and pension liabilities. Labor unions have become practically irrelevant in many sectors of the American labor market.

More to the point, singing all those self congratulatory praises for victories won long ago aren't the issues that American workers face today. The biggest threat to American workers today is that Americans are increasingly faced with the prospect that they are only allowed to keep less and less of the pay that they work for, and the threat of an all encompassing federal leviathan that threatens to turn everyday Americans into tax mules working for someone else.

Even worse, the U.S. Departments of Labor and the Treasury are going to be holding hearings on September 14th - 15thon the subject of lifetime income options for retirement plans. In other words, in non-bureaucratic speak, this is going to be a hearing on the prospect of nationalizing the 401-k and IRA plans of American workers. Gentle readers should be reminded that the Patient Protection and Affordable Care Act (aka Obama Care) has a provision in it which - as a matter of interpretation - would allow the Feds to have real time access to your personal finances, ostensibly to check on financial responsibility at point of medical service and that Americans are carrying and keeping up with their required levels of health insurance. Of course Congress would never use the administrative apparatus from this to go after the retirement savings of Americans. Or would they?

So the Wizard is going to lay down the gauntlet to the labor movement of America. I don't want to hear about what unions did for me yesterday. The Wizard wants to know (as would many members of the Tea Party movement) is what the labor movement is going to do for me today, and what that means is answering the question of what are labor unions going to do that will allow me to keep my pay and keep the life savings I have worked for? America is coming to a point where answering those questions have become unavoidable.

Wizard


Posted by The Mighty Wizard at 08:05 PM
This entry was posted in the following categories: America , Culture , Living a life worth living , Money and finance

August 29, 2010

The Great Recession, energy, and the future

Over the past two years, the Wizard has attended countless events, luncheons, and public gatherings, not to mention read endless stories whereby various experts have pontificated on the causes of the current recession that America, and parts of the rest of the world finds itself in. Typically, the person giving the speech tells a long winded, complicated story about how a set of complex events set the stage for America's economic problems.

Paul Krugman recently wrote in his blog at the New York Times that

The 2007-9 recession was driven by the collapse of a huge housing bubble, and the resulting financial fallout. The Fed couldn’t cut rates sharply, because they weren’t all that high to begin with; there couldn’t be a housing boom, because housing was already overbuilt.

Krugman goes on to show a graph to illustrate his points, namely claiming that conservative economic policies didn't have anything to do with anything. Ezra Klein, a columnist at the Washington Post, whose column Mr. Krugman cites, goes on to talk about Kenneth Rogoff's articles, also cites that America suffered through a financial crisis, and that would also seem to have justified Congress's vast economic interference which it engaged in for the past two years. Mr. Rogoff himself said in November 2009 that the recession was turbocharged by a financial crisis.

The Wizard however, disagrees. A disclaimer before going any further - the Wizard has worked in the oil and gas industry for the past 22+ years. Having said that, the Wizard also knows quite a bit about economic and world history. The Wizard believes that the root of the current economic recession was a classic supply side shock caused by a rise in fossil fuel prices over the past decade, and that this shock effectively exposed and exacerbated any pernicious underlying economic problems which acts by the federal government had previously encouraged.

The Wizard musters economic history to illustrate my points. Over the past 40 years, every time in which there has been a major rise in the price of crude oil, for whatever reason, an economic recession has occurred soon thereafter.

1) A recession occurred in 1973 after the 1973 Arab Israeli war, when the Arabs famously embargoed crude oil to the West. The price of a barrel of oil went from $3 per barrel to $10-$11 overnight. America went through stagflation for most of the 1970's.

2) There was a second recession in 1980-1982 after the Iranian Islamic revolution, when crude oil went from $10 to $40 per barrel before coming back down.

3) There was a third recession in 1991-1992, which occurred after Saddam Hussein invaded Kuwait. World oil markets went into a flutter for a while before settling down again, and America went into a recession.

4) There was a run up in oil prices over the entire decade from 2000-2010, where the price of a barrel of crude oil went up from $20 per barrel to $75 per barrel, spiking up to $147 per barrel in 2008 before falling back down. America went into a recession in 2008 and still remains mired in a historically high levels of unemployment.

Once again gentle readers - economic recessions following rises in crude oil prices have not happened one time, they have happened every time over the past 40 years! That's what happens when you have an energy intensive society, but bear in mind that having an energy intensive society isn't a bad thing. There is a strong positive correlation between energy use, income levels, and economic development.

And the Wizard is not alone in his sentiments. City Journal magazine carries an article in its summer 2010 issue also stating out that there was a run up in energy prices, and argues that the problems with the defaults in housing markets, with Fannie Mae, Freddie Mac ( read these opposing justifications for Freddie Mac and Fannie Mae's existence), the derivatives, and so on all came after the run up in energy prices.

It's important to understand that, the breathless, up to the minute, face pressed up against the glass rantings over at the Oil Drum not withstanding, that world oil markets exhibit both inelastic supply curves and inelastic demand curves. So why can the Wizard confidently argue that the supply curves and demand curves are both inelastic? Well, when you have anywhere from 600 - 900 million vehicles now in use in the world, those vehicle owners are automatically going to use a lot of gas. And from the standpoint of producing crude oil, if you are going to fork out a lot of capital to produce a field of crude oil, you'd better have your ducks lined up when trying to make a decision as to how much capital to commit, and the oil and gas industry spends untold billions every year bringing oil and gas to markets, and refining its products. Once you've committed spending billions of dollars to find, develop, and produce from a field of crude, you'd better be confident that there will be a market for that product, and that creates an inelastic supply environment. Rising prices are also a signal that the marginal cost of lifting new crude oil supplies out of the ground has gone up.

So what to do? If the narrative that the root cause of America's recession was due to a rise in crude oil prices, then America is in for a long period of retrenchment in order to adjust to this new world, but does NOT mean that we should go into a flip out over "peak oil". One of the fears behind the peak oil hysteria is that there is no scalable substitute for crude oil in terms of its use as a transportation fuel, but this is nonsense. The Houston Chronicle has carried a number of articles that Honda makes a natural gas version of its GX, which retails at $18,000 for its gasoline version, but some $26,000 for its natural gas version which comes along with a home refueling station that costs $4,000. As the price of crude oil continues to rise, then if the relative price of natural gas as a fuel justifies a switch, the motorists may well switch to using natural gas as a fuel, and with the discovery of new shale gas extraction techniques, the world probably has generations of natural gas fuel available for the foreseeable future.

As the price of liquid transportation fuels rises, it will prove to be a natural curb to use of cars and trucks, while at the same time issuing a signal to producers of energy to come up with new ways of producing transportation fuels. The Wizard suspects that fuel from cellulose ethanol should become viable at somewhere between $7 - $10 per gallon of gasoline, and then it would be a matter of deciding how much arable land to devote to its production. In the meantime, we have shale oil, tar sands, and other forms of energy that could be produced.

But what about now? As the City Journal article notes, one of the problems that America committed both in the 1930's and the 1970's was that Washington committed a long series of well meaning, but misguided errors that got in the way of recovery. For America to get back on track, the country will have to incorporate higher costs for crude oil and transportation fuels in its future, and Americans will do that. Americans will react in different ways, based on their income levels and personal preferences, and we should note that the Obama Administration has already mandated higher fuel economy in motor vehicles that are produced in the future. Rising prices will mean that crude oil consumption will gravitate towards its highest and best uses, and away from more marginal ones such as driving for vacations or use of petroleum for plastics (we could revert to using glass containers for example). Some will swallow the costs and keep driving, others may decide to buy smaller homes and also keep driving. Some will pare back driving and move closer to work. Some may walk or ride a bike. One thing that few people will do, at least willingly, is take local public transportation.

At the same time, the narrative of higher fuel costs would also have helped explain the failure of the General Motors and Chrysler, as people cut back for the time being on buying cars. That would be seen as part of the creative destruction that occurs in a market economy, making it more efficient, but intervention and favoritism by Washington has interfered with that process.

But over the long run, higher energy costs aren't the most important issue we face. What is really at issue is that having so many interest groups making so many demands on the political system, sucking huge resources into the political system, and running massive federal deficits all do - especially when the country is not fighting for its survival - is that they send false signals on what there really is demand for. How many times, for example, will Nancy Pelosi call the House of Representatives back into session to bail out the local government schools to keep employees on the local government school system payrolls? Does America really need yet another stimulus? More to the point, it doesn't help that Americans will find themselves being hit with higher energy costs, while at the same time having an overactive federal government that is spending itself into oblivion because it is doing so much.

Americans also understand that interference from Washington, such as bailing out AIG, or nationalizing the automobile companies, creates a situation where the government is choosing favorites instead of being a neutral referee and letting things unfold and fall where they may. The real issue is that Washington needs to calm down and quit trying to commit to doing so many things, because running around trying to do so many things creates uncertainty as to government and its purpose. And creating uncertainty isn't good for America or its future.

Wizard

Addendum: A fellow named Philip Stadler writes

I used to wonder how bad things really would have been if AIG had been allowed to fail, to go into bankruptcy and have its carcass picked at by financial companies that were doing things the right way and were solvent enough to pick up those discounted assets. I used to wonder about the repercussions if General Motors would have simply filed for bankruptcy, instead of borrowing $60 billion and then filing for bankruptcy anyway. I don’t wonder about those things anymore. You see, the magic of a successful big government power grab is that now we will never know those answers. The government can never be proven wrong. It is quite possible that letting nature take its course would have cost us an additional three, seven, even ten years of recession... We will simply never know.

Posted by The Mighty Wizard at 11:55 PM
This entry was posted in the following categories: America , Money and finance , Transportation

August 08, 2010

On Food freedom and food safety

On Friday, August 6th 2010, the Houston Property Rights Association welcomed Judith McGeary, director of the Farm and Ranch Freedom Alliance (FARFA) as our guest speaker. Mrs. McCreary drove all the way in to Houston from the Austin hill country area, where she and her husband own and operate a small farm. You can read her biography here.

Mrs. McGeary's presentation was amazing. She did not have a laptop or other projection materials. Instead she simply gave a talk, and she unleashed a fire hose of information about a multifaceted subject.

McGeary started off by saying that U.S. federal regulations on food production tilt the playing field towards and favor industrial farming. She said that Congress has been aiming at enacting a national animal identification system, which was to be incorporated as part of U.S. Senate bill 510. This legislation was largely sold to the U.S.D.A via large industrial corporate interests.

The property rights aspect of this legislation (and of companion bills in the House of Representatives) is that anyone who owns livestock would be required to register their property - i.e. livestock - into a database. Farmers and ranchers would be required to tag their animals, via RFID, and all animal movements would have to be reported. So, if some of your livestock gets attacked and carried away by hawks, for example, that's tough. A farmer or rancher have to account for it somehow.

Mrs. McGeary then recounted the history of her activism on this issue. She started fighting new federal legislative initiatives around 2005-2006. She told HPRA a familiar litany, of attending public meetings that were tightly controlled by the sponsoring agency (in this case the U.S.D.A). People were only allowed to speak for 2-3 minutes; comments and arguments by those lobbying for more statism were accepted, but arguments advanced by defenders of liberty were either whitewashed or blown away with simple one line replies. However she did state that the U.S.D.A started losing control of some public meetings and eventually the agency stopped holding them. In February 2010, Mrs. McGeary said that the federal government had decided to drop the new registration requirements and instead adopted a pared back program where only animals that crossed state lines had to be registered. However, a new regulatory working group was formed, was charged with coming up with a new policy, and the new group proceeded to adopt the old regulatory and legislative plans.

So, what are the real reasons for pushing for a new legislative and regulatory framework involving food production and consumption? Mrs. McGeary told HPRA that a big reason is that the real money to be made in farming and ranching is in importing and exporting food across borders. Tyson and Cargill are the interests that want animal identification, and the underlying motive of large corporations would be to move towards one international standard for animal identification. Mrs. McGeary stated that this would mean inserting RFID in nearly 100,000,000 million head of cattle in America alone. She said that the databases for animal registry would be privately run, but what the corporate interests keep coming back to is the concept of registration of property, while the U.S.D.A keeps pushing for what its calls traceability. But what was interesting is that she told the audience that one federal official was caught stating that traceability was ultimately a premises about food safety.

Besides S.B. 510, the other primary bill that has been in Congress for years is H.R. 2749, the Food Safety Enhancement Act of 2009, which passed by a margin of 283-142 in a roll call vote.

Mrs. McGeary told HPRA that data does not support the supposition that America has the safest food in the world, indeed the New York Times noted that American food safety does not seem to be improving. She said that nearly all the recent problems with outbreaks are due to a consolidation of the food supply - citing the outbreaks of peanut butter (from Salmonella) in 2009, the tomato outbreak of June 2008 (again from Salmonella), the jalapeno outbreak (yet again from Salmonella!), and spinach outbreaks from 2006. Mrs. McCreary noted that three meat packers now control 80-90 percent of all meat packing in the United States - an assertion supported by the U.S.D.A., which has also noted the vertical integration of the industry.

The Wizard was somewhat concerned about those issues, but then McGeary stated that the F.D.A. was pushing to micromanage and regulate how farmers were growing and harvesting their crops. The F.D.A. would regulate water utilization, what you can pick, they were wanting farmers to implement 30 foot buffer zones, and require that farmer and ranchers trace frog and deer tracks - really!

Mrs. McGeary then addressed the issue that the F.D.A. has gone through with several dozen raids of food clubs and co-operatives around the country over the past year, breaking into people's homes with search warrants and guns drawn. She noted that federal judges have been handing out the warrants rather freely, without entirely realizing the scope and entirety of the issue. She stated that many of these food clubs, which are private, were often set up to get around government regulations, but the real issue at stake is whether Americans have the right to decide put what they want to into their mouths.

The Wizard remembers a man from his childhood, who lived in his suburban Houston neighborhood and was an amateur apiculturalist. He and his wife used to hand out samples of honey and bee gum, which were a lot of fun to eat and were highly addictive. The Wizard wonders whether or not his backyard hobby would end up being shutdown under today's legal and regulatory climate. A hint: This man's wife went on years later to serve on as a City Council member.

Mrs. McGeary told the audience that FARFA has been working at the federal level with Senator Jon Tester (a Democrat BTW), who is an organic farmer by trade. Senator Testa inserted an amendment to S.B. 510 to exempt farms that gross under $500,000 from the most burdensome of new federal regulations.

She told of stories where she gets into debates all the time with consumer groups who argue that, "we need to regulations because our food needs to be safe!" But she has to point out to them that food safety and regulation by the F.D.A or U.S.D.A is not the same. What this really is about is expansion of federal power over the food we eat.

McGeary then fielded questions from HPRA members. One asked about RFID's being inserted into cattle, and McCreary noted that animals that have RFID's inserted into them experience higher incidence rates of cancer tumors. Another HPRA member asked what was the push amongst the big food processors for RFID's and the new legal measures? Mrs. McGeary's response was that she believes that the new legal regime will cause big food processors to incur large infrastructure costs, that will run into the many hundreds of millions, perhaps billions of dollars. She thinks that the big corporate players want for the federal government to pay for all this.

One HPRA member asked, what if you are a land owner and lease your land to a farmer or rancher. Then who would be responsible for food problems or for paying for regulatory measures? Mrs. McGeary said that everyone was - the landowner and the lease holders.

One person asked about Mad Cow disease. Mrs. McGeary said that Mad Cow takes a decade to develop and that the federal government tests less than 1 in 1,000 head of cattle for Mad Cow. She also said that several years ago the U.S.D.A blocked the private testing of cattle by one meat packer, which would have tested ALL cattle for Mad Cow Disease. Now why would the U.S.D.A do that, the Wizard wonders?

More to the point, what about the idea of using the common law and torts to help protect America's food supply, rather than an ever growing pile of statist regulations whose effectiveness can be shown to be in doubt? Mrs. McGeary pointed out that word gets out about food problems and farms and ranchers who produce bad food go out of business. John Stossel pointed out several weeks ago at a talk he gave in Houston that scams and bad product issues rarely are national issues, mostly because of the same reason - word gets out.

When Mrs. McGeary speaks to President Obama supporters, she told HPRA that she runs into the mindset of, "well, all those problems happened under George W. Bush! The F.D.A. and U.S.D.A will all be better because Mr. Obama is wonderful!" Well maybe. That's the Paul Krugman mindset. The real battle here, such as the raw milk debate, the raids of food co-ops, genetically modified food crops, and state regulations, is whether Americans have the right to put what you want into your mouth and where you buy your food from, or is America going to continue its drift into the controlled, soft despotism of a nanny state where Americans can only get food, milk, and drink from organizations that are authorized by the state? The statists, as always, will claim that all their power grabs are being done in the name of protecting the public, but make no mistake about this: In the end it's just another power grab by the state and means of treating Americans like children. It also is another version of the countless ways in which the state tries to shut out private methods and means of dealing with social problems - in other words, it's another way of shutting out the competition.

So, what can be done? Mrs. McGeary says to bug your Senators, which in Texas means Senator Cornyn and Kay Bailey. The Senate S.B. 510 bill is very different from the House bill, and even if S.B. 510 were to somehow pass, then it is certain that there will be major problems consolidating differences in conference committee.

Addendum: The Wizard intends to start a regular publishing schedule, preferably on Sundays. It takes quite a while to compose many of my blog entries, as the Wizard tends to write in depth reports and not make thousands of trivial Off the Kuff remarks on everything under the Sun that aren't worth reading.

Also, the Wizard is in the process of migrating to an updated version of Movable Type, and hopes to be able to allow readers to start making comments. This blog was started six years ago, and is composed on an old version of MT. The Wizard initially allowed comments, but then found that the spam bots were leaving advertisements for Viagra and Cialis, so he turned them off. Hopefully updated software will take care of this problem.

Wizard

Second addendum: The Wizard received the following email from Mrs. McGeary.

One correction: The NAIS and the food safety bills (S.510 and HR 2749)
share a lot of the same problems & themes, but are separate. The food
safety bills only address foods under FDA's jurisdiction, namely produce
and processed foods, and do not include NAIS. (You probably merged them
because of the way we went back and forth between the two topics ... and
it's one of the perils of speaking without a powerpoint where I can put
up a clear outline :))

Posted by The Mighty Wizard at 09:44 PM
This entry was posted in the following categories: America , Because they can , Culture

July 25, 2010

On Pat Lykos and pennies for justice

On Friday, July 16th 2010, the Houston Property Rights Association welcomed Harris County District Attorney Pat Lykos as its speaker. The Wizard had set up a Facebook event for Attorney Lykos's event, ergo her speech managed to attract several dozen new faces that we had never seen before. It was a successful event.

Mrs. Lykos didn't really need an introduction to the audience, as she is a well known local and state politics. She has spent her working career in law enforcement and criminal justice, starting as a police officer, then working her way through law school. Later she became a criminal court judge before eventually winning election as Harris County District Attorney.

The Wizard didn't take detailed notes on Lykos's speech, but The Wizard found Lykos to be a refreshing speaker. After having spent many years attending public meetings and lunches, and hearing untold numbers of windbag speakers and audience members talk at such events, Lykos proved to be direct and to the point. When several audience members raised their hands and started going off tangent on issues that had little or nothing to do with the topics being discussed at hand, as many people are won't to do, Lykos would get straight to the point in dealing with such people. She would summarize their remarks, answer them, and move on to the next person. She is the type of person who doesn't like people wasting their time or her time and the Wizard doesn't doubt that this comes from Ms. Lykos having spent years as a judge sitting on the bench.

Several matters Lykos touched on were:

1) The Harris County District Attorney office employs some 300 attorneys and support staff that sift through scores of thousands of cases every year, whereas Lykos told the audience that Cook County (Chicago) has more than three times as many personnel with only twice the population of Harris County.

Without having a thorough knowledge of the situation, it's hard for the Wizard to judge whether hiring more prosecutors and support staff would result in better criminal justice, or would it result in what would effectively amount to zero marginal productivity from the extra prosecutors and staff.

2) The 2010 budget for the DA's office was reduced by the Harris County Commissioner's Court from $60 million to $54 million. It blows the Wizard's mind that the DA's budget is that small. The DA's office is only 4 percent of the Harris County commissioners budget.

3) Lykos briefly addressed the issues of drugs and rehabilitation. Lykos argues that we do not do enough for rehabilitation, and that is socially costly as falling back into that kind of life often causes one's life to go downhill. On drugs, Lykos is a conservative. She flatly stated that anyone who thinks that drug legalization is the answer to the drug issue had not seen anyone on methamphetamines. Nobody brought up the crack pipe policy, though in all fairness nobody probably had that issue on their minds beforehand.

4) Lykos cited a number of prominent cases, including various sex offender cases where her office had worked with a number of local, state, federal, and international law enforcement bodies to bring people to justice. One person made a criticism on whether this was good use of tax dollars, but Lykos stated that criminals needed to be shown that fleeing would not save them from justice.

5) A regional crime lab. Lykos campaigned on support for a regional crime lab. The Wizard has written some thoughts on whether a regional crime lab would be better than what we have now for crime labs or whether we would merely be transferring the problems we have today to a new regional lab. However, Lykos did say that the City of Houston and Harris County were in negotiations over a regional lab, but more importantly she stated that the cost of a new lab would only be a few million dollars.

Just days after Lykos spoke to HPRA, the Houston Chronicle carried a story reminding the public that the Houston Police Department still has a backlog of over 4,000 rape test kits dating back to 1996, on top of nearly 1,000 new criminal cases that await DNA testing. Then came the case of Allen Wayne Porter, which DNA evidence showed could not link him to a rape crime where an eyewitness identified him as being the perpetrator.

The Chronicle story on Lykos's call for a temporary DNA lab mentioned that the Houston Police Department applied for a $1.1 million federal grant to help clear up the backlog of DNA cases under HPD's jurisdiction. That's right folks - only $1.1 million, and somehow we can't find the money to clear up backlogs of cases for rape victims. The Houston City Council recently approved a $4.2 billion budget, Metro owes the City of Houston $160 million in back payments but is still too busy wanting to build trains, and America has a federal government that is now running annual deficits of over $1 trillion per year!

Lykos mentioned that if we were to rectify this injustice to criminal victims (and the accused) - and this clearly is an injustice - then Houstonians are going to have to start lobbying Houston City Council and the County Commissioners to get this backlog taken care of.

The Obama administration and the left have long claimed that they are for "social justice" and making America a "fair" society. Lost amongst those claims however, is that the first claims - made before any others - as to why men instituted government is to protect property rights, to make sure that people can sleep in their beds at night in peace, and to seek justice for those who have been wronged through criminal acts perpetrated by others. Yet somehow we can't seem to find a few comparative nickels and dimes to better do criminal justice, while untold billions are spent through federal entitlement programs like Social Security and Medicare, bailing out failed corporations and Wall Street, contracts, millions of government jobs, wars, and redistributed through the tax codes. And the Wizard thinks that something is really wrong when we've lost sight of that.

Wizard

Posted by The Mighty Wizard at 05:45 PM
This entry was posted in the following categories: America , Because they can , Houston and Texas matters

July 11, 2010

Letting public infrastructure go to pot

The Houston Chronicle carried the story On July 8th, 2010, that the Renew Houston charter amendment campaign had reportedly garnered 30,000 signatures which they turned into the City Secretary's office for verification and certification for going on the November 2010 ballot.

The Wizard has heard CM Stephen Costello speak twice on the Renew Houston initiative, and intends to blog about the matter, but before writing about the charter amendment campaign, the Wizard decided to quote Renew Houston itself as to why the promoters are pushing this agenda:

Houston is an aging city. Over 60 % of all drainage and streets are past their useful life; 80% will be past their useful life in the next 20 years. When a street is assigned for re-construction, it takes the city 12 years before the work will commence due to lack of funding. ...

Americans are seemingly bombarded left and right with stories of aging infrastructure that hasn't been worked on for decades, that of course needs billions of new tax dollars over and above what governments already spend to be successfully maintained. At the same time, America has witnessed spectacular infrastructure failures in recent years, including the failures of the levees in New Orleans after Hurricane Katrina and the collapse of the I-35 bridge in Minneapolis. President Obama's new head of the FTA, Peter Rogoff, made a speech in Boston in May 2010, where he stated that the six largest local government transit agencies in America had $50 billion in deferred maintenance of their rail lines, and now Houstonians are being told by an interest group campaign that 60 percent of Houston streets and drainage are past their useful life.

So, this begs the question: Why is it that governments, whether local, state, or federal, seemingly fail over and over and over again not to do needed maintenance on existing infrastructure? The easy answer to such a question would be, "What do you expect Wizard? Of course the gummit don't do things right! Why should this be any different? Why do you want to waste our time on this?" Well, if that's your answer, then maybe we should be privatizing public infrastructure. After all, this is an endemic problem!

But as though on queue, last month the Wizard received his most recent issue of The Independent Review. In the issue, economist Dr. John Bratland addresses the neglect of public infrastructure through comparing how a private entrepreneur handles capital (and capital goods), verses how politicians and bureaucrats spend their political and bureaucratic capital.

Dr. Bratland's article makes for great reading. Without going through the entire article, the Wizard will focus on the high points of what Bratland is saying.

Market signaling: Bratland notes that there is a distinction between capital and capital goods. Capital could be construed as everything that an entrepreneur has at their disposal in order to make judgments that help maintain, and hopefully increase, the income and profit stream of the enterprise. This includes labor, land, cash receivables, whatever. Capital goods are individual pieces of capital, including that land, labor, finance, machinery, etc. Bratland points out that the entrepreneur operates in a framework of contracts and private property rights that help guide the entrepreneur towards making the best decisions, and that the entrepreneur often faces competitive pressures and operates under some uncertainty about the future.

Bratland goes on to say that entrepreneurs will incorporate decisions on the purchase and maintenance of capital goods, based on whether they will maintain or increase the income stream. Entrepreneurs may decide, for example, to defer maintenance for a while on capital goods, if the entrepreneur judges that there will be little or no effect on the overall income stream. But, Bratland points out that successful entrepreneurs always incorporate maintenance costs into maintaining the capital goods in their purview. The entrepreneur will get market signals and feedback that help the entrepreneur make decisions on maintenance and replacement of capital goods.

Verses no market signals: Needless to say, none of this framework exists in the world of public infrastructure maintenance. Bratland points out that there is no market of exchange when it comes to public infrastructure and there are no private property rights. Most importantly, there is no market signal to indicate that a street, a freeway, a sewer line, drainage culverts, or any other element of public infrastructure needs to be maintained or for that matter be replaced! There is no income stream available to tell governments that maintaining existing infrastructure is the correct thing to do.

Politicians and bureaucrats will have, and pursue, conflicting agendas upon assuming office and during the course of their careers. Politicians may come under political or competitive pressures to keep taxes and expenditures low. Politicians may or may not be in a position to obtain substantial monies for infrastructure maintenance via the legislative process for their districts. Politicians will also spend monies on infrastructure if they can perceive that it will enhance their power, career goals, or affect roll call votes in other issues. Politicians may perceive for example, that they can gain more votes or power through voting to devote monies towards health care or education, rather than infrastructure maintenance. Politicians or bureaucrats may deny maintenance monies to other politicians, bureaucracies, or geographical areas, if it were to meet certain goals. Bureaucrats may have career goals that include obtaining jobs in academia or the lucrative private sector, which often have little or nothing to do with maintaining public infrastructure. Politicians and bureaucrats often correctly perceive that they often can gain more power, prestige, or favorable press, through building new infrastructure over maintaining existing infrastructure. Both politicians and bureaucrats may or may not be particularly publicly spirited in their actions.

But most of all, bureaucrats and politicians really are not in a position to be able to weigh whether building new infrastructure or maintaining older infrastructure is the best use of public dollars, since there is no market mechanism to guide their decisions. Making such decisions inevitably involves making some judgment about opportunity costs and social welfare, of which there are no real answers. Considering all these factors, as stunning as this sounds, neglecting existing infrastructure for years or decades and letting it go to pot could be - and often is - the best political outcome from the perspective of people who are involved in the political process.

Next, the Wizard will address the Renew Houston charter amendment.

Wizard

Posted by The Mighty Wizard at 05:55 PM
This entry was posted in the following categories: America , Because they can , Houston and Texas matters , Transportation

July 04, 2010

The Declaration

The Wizard has been rather tired of late, not convinced that the scribings on this blog were making much of a difference. It's hard to keep going at something when you don't think that you're making much of a difference. Life goes on.

Yet, the Wizard does have a three day weekend to celebrate the Fourth of July. The Wizard has worked (and funded) Tea Party rallies on April 15th for the past two years, and it's not hard for the Wizard to think that a better name for April 15th is Dependence Day for many Americans: 50 million Americans collecting Social Security and Medicare benefits, 20+ million Americans are now employed by local, state, or the federal governments of the United States; some 25 percent of Americans now work for private firms that have major contracts with the United States government.

And all of this brings for the question of what are the ends of government?

The Wizard got to sitting down this evening and actually reading through the entire Declaration of Independence. It's not a tough read - only 5 1/2 pages in my pocket version put out by the Heritage Foundation. But then the Wizard started to ponder about it, and that's when things get interesting.

Thomas Jefferson wrote the Declaration in three parts. The first is a world famous declaration of rights:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness...

What follows is a list of grievances that the document's signers have against the King and government of Great Britain. The Declaration then concludes with The Declaration that these United Colonies are, and of Right out to be Free and Independent States, that they are Absolved from all Allegiance to the British Crown, and that the Colonials intended to take their place amongst the powers of the Earth.

And so it was, and so they did. Yet, the war between America and Great Britain had been going on since April 1775 with the Battle of Lexington and Concord, but this document didn't get written until July 4th 1776. A period of fourteen and a half months had gone by in between. So what gives?

Well, the overarching problem, at least from the standpoint of the British, was that Britain had been involved with an ongoing rivalry with France and her other European competitors for 250 years for world dominance before the shots were fired on the battlefields of 1775. More proximately, the Seven Years War with France and others had ended with the British having driven the French out as a major power in North America. The problem with this was that the war had left Britain deeply in debt, as wars tend to do to the regimes that get involved in them. So, then it was that the British Parliament decided that the colonials, who enjoyed the protection of the Crown, were going to have to cough up.

The problem with that was that two fold - one was that the Colonials had more or less been taking care of their own affairs for the past 150 years, and secondly, they weren't being given a voice in the decision. History would have been a very interesting thing had Parliament decided to give the Colonials some seats in Parliament in exchange for being taxed.

But the British didn't do this. Among the significant things about The Declaration is something that few people consider - who actually signed it. Look at the list of names - John Adams, Samuel Adams, John Hancock, John Penn, Benjamin Franklin, Robert Morris, Thomas Jefferson, amongst them. These were famous men, men of substance, and part of the accepted establishment. Men who are part of the establishment are not men who are going to do some half cocked off the wall thing like sign a document whereby they were pledging to throw their lives away, without some hope that they are actually going to come through with what they hope to accomplish and their skins intact.

That in turn would explain the 14 1/2 months between the time which the shots were fired on the battlefields of Massachusetts and The Declaration. The signers of The Declaration did something very interesting. By declaring that the States were now sovereign powers, they could now effectively say to all other nation states in the world that this war was not an internal affair of Britain's - a subjugation of impertinent rebels. What this was in fact was a war between sovereign powers, between the nation of Great Britain and the new America. That in turn would have helped encourage other European powers to subtly intervene on behalf of the American colonials, and hence one explanation for the interval between the actual Declaration and the start of the war was that The Declaration had a political motive to it. These conservative men would have no doubt thought that before signing this document that there could be some assurances that they could in fact expect such help from the other European powers, and hence there would be some hope that they could in fact win such a war against the greatest military power on the planet.

But there are other aspects to The Declaration to think about. The list of grievances is pretty long for one. So why did it have to be so long? One thought is that it had to be long and specific enough to enable the signers to say that there were all these grievances that we had. That's to reinforce why they were making the bold step of throwing off the shackles of the Crown and going their own way. Another is that the list would be long enough to encompass all the complaints that would unite all the the Colonials against the Crown.

Then there was the part about The Declaration that Jefferson substituted - that of property. Jefferson wrote that we had inalienable rights to life, liberty, and the pursuit of happiness, but not that we had inalienable rights to property. Why did Jefferson not assert this, while earlier John Locke asserted that property was essential to liberty? Well, maybe Jefferson and the rest of the signers of The Declaration didn't want people to think that this was a rich man's war. On the other hand, Enlightenment thinkers were stumbling forward to a more expansive view of humanity, and were starting to think about what owning property really meant. Readers can ponder this matter more here.

But perhaps the most important aspect of The Declaration is that Jefferson also writes that the Colonials have petitioned the King George the Monarch for Redress of their grievances, an ancient thing that humble people all over the world have resorted to since time immemorial. Yet, what has happened? Was it not impossible not to notice that the Redcoated soldiers on American soil were the King's soldiers? By what right could the Colonial rebels decide to declare their independence?

The Wizard heard John Culberson give a talk some months back whereby one of the last of the Founding generation spoke at his deathbed and stated that the reason why the average Joes took up arms against Britain was not because they had read about Montesquieu, or other political theories. It was because they had gotten used to minding their own affairs. But even that is not enough for what is happening now. The real question that the Colonials faced was - what are the ends of government? Why were we seeing the King's soldiers in our streets? Edmund Burke discerned early on that if King George and Parliament went too far with the American colonials, then the Colonials would start to wonder what this was all about, and thoughts like that are the beginnings of rebellion.

The peoples of the British Isles had been thrashing through government for many many centuries before those pesky rebels across the Water decided to ump up and declare their independence. Barely 130 years before, the British themselves had fought their own Civil War, between the supporters of Parliament and the Crown. The overall premise of governing in the United Kingdom eventually evolved into something like, "We the Parliament are the Sovereign Power in this land. We will support the Monarchy, forever, and everything we do will be done in the name of His (or Her) Majesty." Indeed, Great Britain held a general election less than two months ago that looked for a while as though they would return a hung Parliament. One aspect of this was that Queen Elizabeth herself might have had to get involved to resolve the matter, something that would awe Americans. Jefferson wrote that government derived its power from the consent from the governed, an entirely different premise from what the Colonials were being governed under.

America is having to ask that same question today - what are the ends of government? It certainly isn't to support a Monarchy until the end of time! The Progressives have had their answers for the past 100 years, and little by little they have been - well - progressing towards their goals. Progressives say that they want an America that is "fair", but what is fairness? Progressives want an America that is "just", but what is just? Progressives say that America needs to take care of its less fortunate, but by what standard are people less fortunate? More importantly, how long do people need to be taken care of, and who exactly is supposed to be taking care of people? The government? Churches? Or is it families and friends? Or are Americans to start thinking harder about their own futures and taking care of themselves?

In a similar vein, some Conservatives say that America needs to promote Democracy in the world. It will promote the safety of America they say and promote our happiness, but what is it going to take to promote Democracy? Why are we in Afghanistan, and not North Korea or China? Do the ends justify the means, and are those ends a justification at all?

And what are to be the ends of government in America? Are we to have our guns taken away, regardless of how dangerous our neighborhoods are? Are we to be told we can't smoke in a restaurant regardless of what the restaurant owner thinks? Are we told we can only eat what foods the government approves of? Are we to be told we cannot smoke some marijuana? Are we to be told we have to pay taxes because we have accumulated too much wealth? Are we to be told we can only contribute so many dollars to a politician's campaign? Then do these edicts conflict with our unalienable Rights that our Founders declared for us to possess - among these are Life, Liberty, and the Pursuit of Happiness?

So why have many of my liberties been taken away? Are they really for my own good, and what is it all to you anyway? The Wizard thinks that some folks out there have some thinking to do.

Wizard

Posted by The Mighty Wizard at 02:11 AM
This entry was posted in the following categories: America

April 19, 2010

Sheila Jackson Lee and HISD

About two weeks ago, Houston Chronicle columnist Rick Casey carried the story of the resolution of a scandal over at HISD, concerning the work performance of Kashmere High School principal Mable Caleb. Chronicle reporter Ericka Mellon wrote on how the HISD probe had widened to reaching Key Middle School. Employees have been implicated in an investigation that found evidence of cheating on state tests, profiting off student fundraisers and nepotism.

The Wizard generally doesn't get interested in what goes on in government schools, mostly because even though I pay taxes to HISD, the fact of the matter is that HISD is a government school district that has 200,000 students, some 20,000 employees, and a mob of interest groups. There really isn't too much I can do to have any influence on what goes on there. Government schools are a mess that are now effectively beyond redemption, with no end of apologists to speak up for them. Spending on government schooling has skyrocketed over the decades, but SAT test scores have effectively been either flat or declining over the past 40 years.

But none of this is what really caught the Wizard's attention. What caught my eye was that Rick Casey reported that HISD Superintendent Terry Grier got a phone call two days before Christmas from Congresswoman Sheila Jackson Lee, as well as State Representative Harold Dutton, and HISD trustee Carol Mimns Galloway. As Mr. Casey's story made it clear, the phone call that Ms. Jackson Lee gave Mr. Grier was not exactly about wishing Mr. Grier a Merry Christmas and a Happy New Year.

The responses to Mr. Casey's story were telling. Reader "mimi3" wrote,

The arrogance and gall of SJL to think that she can interfere in HISD affairs and tell the superintendent how to do his job is just disgusting. Obviously, she has been doing this for quite a while. It will be interesting to watch the fur fly if Grier continues to stand up to her!

This reader has a very interesting point to bring up, namely what was Sheila Jackson Lee doing yelling at the head of a local school district, presumably telling him to call off the dogs on an internal investigation into possible malfeasance within a district school? After all, HISD does stand for the Houston Independent School District.

Well, that begs to start asking what influence does Congress have over our schools? On paper, not much. 90 percent of government school funding comes from local taxpayers, and state governments. It is state governments, through their education codes, that compel kids to attend school, and set out the overall government school agenda. However, this 10 percent level of federal funding is up from the 6 percent that it was back in 2000, before President Bush came along and decided he needed to show voters that he cared about their kids through compassionate conservativism.

Where Congress does have influence is through money. Thanks to lots of payroll and income taxes, along with all that borrowing power, Congress has passed a slew of mandates and enacted plenty of programs since the 1960's. The 2009 federal budget, which had $1.5 trillion in red ink, included a $96 billion infusion from the ARRA, a $53 billion injection of federal funds into local school systems in the form of the State Fiscal Stabilization Fund, which included $5 billion for Mr. Obama's new federal program Race to the Top. Other long standing federal directives include the Individuals with Disabilities Education Act (IDEA), which will dish out $12 billion in 2010, but has gotten criticism as yet another unfunded federal mandate amongst other issues.

So, the federal government's role in education has mostly been one of being a money dispenser, not as the primary rule maker. However, even that relatively small role is more than enough for a member of Congress to take an interest in a local school district if he or she chooses. After all, he who has the gold gets to make the rules, ergo Mrs. Jackson Lee might well have threatened Mr. Grier with cutting off federal dollars for HISD under the Stabilization Fund, from Elementary and Secondary Education Act funds, or from IDEA. But ultimately, who knows what was said, other than those who participated in the phone call? All we know is that Mrs. Jackson Lee did make the call. And why did she do it? Because she could, that's why.

The point being made here is that liberals, or others who justify federal intervention into schooling if for no other reasons than that it attracts votes, cannot expect the world to work as planned after they enact such programs. If you advocate federal intervention into government schooling, then don't be surprised when a member of Congress decides to take an interest in what otherwise is a local problem that has nothing to do with federal acts that purport to remedy some alleged social deficiency. This episode shows the dark underbelly of federal funding of local government schools, and it is something that few people care to behold. The only way we can truly rid of members of Congress not having any leverage over schools at all is to legalize freedom and pare back a massive federal government. Otherwise, it's only a matter of time before another member of Congress, or a federal judge for that matter, tries to browbeat hapless local officials or citizens into doing their bidding.

Wizard

Posted by The Mighty Wizard at 12:03 AM
This entry was posted in the following categories: America , Because they can , Houston and Texas matters , Money and finance

March 28, 2010

Obama Care and American Life

I should be used to the MSM reporting--but I still always get PO'd. I saw earlier today on FOX that there was a pretty decent turnout protesting. But on ABC nightly news the headline was that one protester spit and there were racial and homophobic slurs against congress men--t they put on a clip to show these slurs--which amusingly did not show anything.

It has been suggested that the MSM, Obama, and I guess Congress are so out of touch they don't realize how angry Americans are--and it is not the kind of anger that is just going to disappear.

But actually they do see it, and in their arrogance don't care. The little people will get over it. while the adults courageously take care of business.

But seriously, by all that is right and honorable, we should be doing more than slurring and spitting at politicians. It is not an exaggeration at all to say that we are more oppressed and less free than were the colonists who took up arms against the British Empire.

If those revolutionaries could see what is going with us who know better(and that includes myself) they would be disgusted.

Even though we know better our efforts are pitiful and willingness to sacrifice comfort and safety nonexistent. We are really not worthy to carry on the flame of the Revolution--and are getting the type of government we deserve.

Becky Chandler, Facebook, March 21, 2010

and

"Let me remind you this [Americans allegedly dying because of lack of universal health care] has been going on for years. We are bringing it to a halt. The harsh fact of the matter is when you're going to pass legislation that will cover 300 [million] American people in different ways it takes a long time to do the necessary administrative steps that have to be taken to put the legislation together to control the people."

Congressman John Dingell, March 23rd, 2010 - discussing why Congress delayed the implementation of the individual health insurance purchase mandate embedded in H.R. 3590 until the year 2014.


But one has to wonder whether Congressman Dingell's legislation will in fact do what it was intended to do. Two weeks ago, the Wizard learned that there was going to be a last minute rally in Washington to oppose the health care bill. Upon learning about this, I volunteered to pay $1,200 for the flight of two of my friends (who subsequently made the news) to go to Washington to join the mob, and watch as Nancy Pelosi - all smiles - paraded her big gavel as she waltzed her way to the Capitol to continue - but not finish - the grand project of all Americans having to have health insurance. I stayed at home during the weekend, cut myself in several places when I fell while running a workout, and built some bookshelves for my study room to hold all the tomes I've accumulated over the years.

Yet, when I read what Ms. Chandler wrote, she struck the Wizard with words that are harder than steel. Charles Krauthammer went on television and said that Mr. Obama's health care bill will not be repealed. Why? One very good reason is that what the "Progressives" did during the sausage grinding was ugly (and possibly unconstitutional), but they were very smart. They made sure that the old folks would get all of their pills paid for right away, and that they would not be left with any donut holes, unlike that evil Mr. Bush did to them. If an attempt to repeal the bill is tried, the Democrats will tell the old folks that those evil freedom types are trying to take their Medicare from them. Progressives can get away with government rationing, but woe be to liberty and freedom types if we were to do the same. Yet, even some liberal bloggers are writing that H.R. 3590 is a bad piece of legislation, and list plenty of reasons why that's the case.

The politics of repeal are easy to understand. As long as Mr. Obama sits in the White House, the mathematics of getting a coalition together to repeal are well nigh impossible. That will have to wait until 2013. Meanwhile either lawsuits will have to commence, but more intriguing is the idea that the States should call a convention to offer and ratify amendments to the United States constitution to curb Congressional power. The state legislative races will be just as important as federal ones this November, but judging from Governor Perry's reaction to the health care bill, I doubt he will have the courage to call for a convention of the states. Governor Perry wants to sit in the White House.

And so it was that my puny efforts to defend liberty were, I suppose, not entirely for naught. I rarely watch television anymore and did not watch television on that Sunday night, but rather I took a walk to the grocery store to do my weekly shopping. It was sunny out, but cold and blustery. It was busy in the store, but there was no sign amongst the hundreds of people whom I saw that a momentous decision was being made by their federal government, something that would affect their entire lives. No shouting, no picketing in front of the store. Nothing. Just a traffic jam on Westheimer and lots of people going about their daily lives. It was as though it was just another day and that nothing had ever happened. One of the subtle ideas of the Founders was that government would be far away and out of sight. Only those who had interests, or had the interest and the fire, would care to travel and contest the issues of the day. It worked once again.

It occurred to me that if I really were to have the guts to defend liberty, I should have gone to Washington with a gun, as Becky stated. I did not. None of us did, despite baitings of our opponents and of politicians. We hold ourselves in and resolve to fight against this breathtaking assault on our liberties peacefully. We receive encouragement from sympathizers in Britain, stating that Americans must fight back, and we will. One thing that this issue has raised, is the reawakening of a titan, that of ordinary Americans starting to ask questions all over again about the meaning of the United States and its Constitution.

I have something to say about the issue of people raising objections to ordinary Americans shouting obscenities at their elected officials. An elderly black woman whom I met through the Metro Rail issue did just that to Congresswoman Sheila Jackson Lee back in late 2007. When she found out in that Metro had changed their rail plans to run a rail line down her street, she called up Mrs. Jackson Lee and let her have it - full bore, with guns a blazing - the only way that a Gospel filled, fiery old black woman could. The result was that Mrs. Jackson Lee dropped everything she was doing to race back to Houston, where she proceeded to call an emergency meeting with Metro brass and the community over the issue. That Saturday, I watched from the back row of an auditorium, the only white boy in an auditorium room filled with black people, as Mrs. Jackson Lee's constituents slugged it out full bore with her and Metro's brass for 4 hours over light rail. It was a night to remember.

If the passion is high enough, public officials should be sworn at. After all, public officials are in no position to be lecturing Americans about swearing.

Auto insurance verses health insurance

Many supporters of the health care bill, in speaking of its favor, have tried to raise the point that Americans are required by governments to purchase insurance for their automobile. They also have raised the issue that Congress has required that automobile makers require that Americans purchase cars with safety belts. So what's the difference between that and Americans being told they must buy health insurance? Aren't you pesky Tea Baggers a little late - like 75 years too late - to the show? We abuse the Constitution every day, so what else is new? This is the way things have been for a long time!

Well maybe, but just because Washington has been trashing the Constitution and doing business as usual since the New Deal doesn't make it right. People who make these arguments are missing some very important points. Arguing that people are compelled to buy car insurance by governments overlooks the simple observation that Americans are not compelled by law, as a matter of being a citizen of the United States, to buy cars. So if you happen to be like my downstairs neighbor, an old lady who does not work, does not have a car, and walks around to do her needed tasks, the mandate to purchase auto insurance does not apply to her.

The mandate to purchase auto insurance comes from State governments, following in the tradition that doing something like this was not an enumerated power given to Congress, and that State governments possess what are called police powers. Generally, police powers are understood where governments can act to protect the health, safety, and morals of the populace. In the case of owning and operating a car, it quickly became clear some 100 years ago that operating an automobile had many ramifications. A driver had marvelous new found mobility, freedoms, and power at his or her disposal, but they could also evade law enforcement or aid and abet illegal activities. Drivers also had it within their power to destroy the property of others with ease, and could take their own lives or the lives of others.

Clearly it was within the public interest to come to some kind of remedy to handle this matter. Therefore, State governments used their police powers to require that would be drivers pass a driving test, require them to submit to safety inspections, and they required that drivers carry insurance as a way to compensate others in the event that a driver were to cause harm to the life and property of oneself or others, but would otherwise not be able to pay. State governments also consider driving to be a privilege, and as such those privileges can be granted or taken away from you.

It has also been pointed out that the governments required auto companies to make cars come equipped with safety belts as a feature of a car. As the wikipedia entry notes, however, safety belt legislation, including requiring someone to wear a safety belt while driving, is a state matter, consistent with the idea of States wielding police powers, in this case that being of safety. But once again and more importantly, this is a separate idea from requiring someone to buy something.

Americans really need to consider very carefully the full ramifications of the claim that Congress has it within its power to compel Americans to buy something. Already, talk has been floated of requiring Americans to use their 401-k monies to buy U.S. Treasuries, and putting Americans on Social Security. Great. So all the money I've saved through my 401-k the past 15 years, and which I could give to my heirs, would be swiped from me and I would then be wholly dependent on government in my old age. If you are someone who still agrees with the idea that Congress can require Americans to buy health insurance, then what happens if you are told you must by a car or a house, all of course in the name of the common good? Even the Washington Post points out that the legislation raises non-trivial issues of federal authority over individuals, and the ideology that the common good somehow always trumps individual rights is not compatible with our deepest beliefs as expressed by our founders.

Misplaced priorities

David Brooks wrote a very interesting column after H.R. 3590 passed where he said

The Democratic Party, as it revealed of itself over the past year, does not seem to be up to that coming challenge [of cutting federal deficit spending] (neither is the Republican Party). This country is in the position of a free-spending family careening toward bankruptcy that at the last moment announced that it was giving a gigantic new gift to charity. You admire the act of generosity, but you wish they had sold a few of the Mercedes to pay for it.

Many people have questioned the Tea Party movement in one way or another. We've been labeled racists, astroturf (thanks Nancy, I'll take back my $1,200 then), amongst other things. Little do such people know that some of my friends have had to yell at social conservatives, upon hearing that gay people who wanted to be a part of the Tea Party movement were left feeling unwelcome. As Mr. Boggs stated,

We have to decide as a Party what concerns us more. The fact that the country is being driven into socialism, or who someone sleeps with.

And so it was with Obama Care. I find it breathtaking that Congress spent a year furiously battling over this issue when we have a yawning federal deficit that threatens to put us into taxation rates of 40-50 percent of all our incomes, hyperinflation, or debt repudiation. Nor have we dealt in any meaningful way with the Baby Boomer Social Security and Medicare tsunami, the first laps of water were felt this past year. Many people want job creation to be the first order of business, but job creation is very hard when you're so busy affecting change that people don't quite know what's going to happen next. But of course, if you really want to affect change, you follow the advice of Vladimir Lenin, who wrote

The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation.

Will Americans finally owe up to the mess we have created since the time of the New Deal, or will we have another civil war amongst ourselves with 100 different groups pitted against each other? I don't know. All I know is that this past week, I've been up every night, far into the night, wondering about the future. I've started to read the Federalist Papers and Hayek's Road to Serfdom. We have set for ourselves, in the name of alleviating suffering, policies that encourage us to live for today and not think about tomorrow because tomorrow is not my problem - we'll leave the problem of the future to our children and anyway in the long run we're all dead. The problem with that train of thought is that there's no such thing as a free lunch, and that tomorrow has now come upon us.

I foresaw that this would happen 20 years ago, but even though I knew it would happen, it still hit me like a ton of bricks when it did happen. All I can say is that I haven't felt this afraid for my country since I grew up with the nuclear nightmare, but this time the problem is a cancer that comes from within. Our country is being ripped apart by two parties that are daring each other by walking an incredible high wire act, all while playing with fire. America, it's time to grow up.

Posted by The Mighty Wizard at 09:13 PM
This entry was posted in the following categories: America , Because they can , Living a life worth living

March 08, 2010

Why Americans don't vote

Among the numerous advantages promised by a well constructed Union, none deserves to be more accurately developed than its tendency to break and control the violence of faction... The instability, injustice, and confusions introduced into the public councils have, in truth, been the mortal diseases under which popular governments have everywhere perished.

James Madison The Federalist Papers, #10

So, the Texas primary season is over, or at least it is for those whose races did not leave them in a position to face a runoff. But with the season being for the most part over, there comes the usual grumblings and wailings from my friends about low voter turnout whenever Americans hold elections. Several months ago, after the City of Houston elections, there was the same complaint - some 15 percent of registered voters in Houston bothered to vote in the City of Houston general election for Mayor and Council. So, Felicia Cravens asks, "why don’t people vote in primaries?"

The Wizard has a confession to make. Years ago, I used to get incredibly upset about the same issue. "Why don't people vote?", I'd go screaming to myself. Don't they understand! It matters so much! It's the end of the planet if they don't vote! A woman named Jackie Juntti complains on Facebook of suffering from the battered voter syndrome.

At the same time, the leftist "progressives" have been complaining recently that America is "ungovernable", which really means that they are going absolutely bananas because the Democrats hold three out of five seats in both the House and the Senate, as well as the Presidency. Yet incredibly, the Democratic Party has not been able (yet) to push through Obama Care, nor have they been able to push through Cap and Trade.

So what has led America to this sorry state of affairs? Better yet, one might want to ask whether this is a sorry state of affairs to begin with?

First of all, we need to go back and reread the words of the Founders. Madison had done his homework when he traveled to Philadelphia in 1787. Madison knew from reading history that establishing America as a pure democracy would create a serious danger whereby the fiery passions of the public would end up invoking whipsaws of policy, egged on by the mob. The turbulence that lurks in all of us would be erupting constantly. Peace and tranquility, which is a precursor to happiness and progress, would be a rarity.

Therefore, Madison and the rest of the Founders rendered a Republic. But more importantly, they also knew that even though many Americans would declare that they love liberty and freedom, their actions would often belie their words. So, being ten steps ahead of the rest of us, as they always were, the Founders created a political system that made it very difficult to get anything done. Two bodies of Legislators, along with an Executive, and all the affected interest groups, all have to come to some kind of agreement that this is the way in which things are going to be. Passing legislation on big issues that affect large swaths of the populace in America is like trying to herd around a bunch of cats. You have to corral them all in order to get something done.

"But wait, Wizard!", comes the objection. And yes, I know, somebody out there is going to come up with some point where some President or some lower level public official did something quite easily. But people who do that are missing the forest for the trees. How many times have Presidents in America tried to push through universal health insurance? Truman, Kennedy, Nixon, Clinton, and now Obama? Remember, compulsory universal health insurance was something that was enacted decades ago by just about every other wealthy country in the world - except the United States.

That in turn should lead us to examine the political regimes of other countries. Why is it that other countries found it relatively easy to enact such legislation, whereas in America, the progressives have tried over and over and over again to reach the summit?

In the United Kingdom, for example, we don't have such lofty notions such as judicial review of laws, but rather we find such concepts as Parliamentary Supremacy. In other words, Parliaments in Britain and some other countries can make laws on just about anything they damned well please, and they can't be questioned by courts. In contrast, in the United States we have a Bill of Rights and judicial review. Governments can't always do what they want and sometimes legislation is struck down. In other words, there are more barriers in the United States to doing things, but it also means that each branch of government has to pay at least a little bit of attention on whether other branches of government will stomach what each other is doing.

Moreover, we also inherited from Britain the idea of single member representative districts, whose officials are usually elected by a plurality, an electoral system otherwise known as winner take all or first past the post. SMP style electoral systems can produce some stunning results. In the 1997 UK general elections, the Labor Party led by Tony Blair, came to power off of an election where the Labor Party won 43 percent of the votes, yet got 63 percent of the seats in Parliament. Because the Labor Party got over 50 percent +1 seats in Parliament, they got to make all the rules, and since Britain is a unitary state and not a federal state like the United States is, nearly all the power is embodied in one political body - Parliament. Parliament also controls well over 90 percent of all taxation spending in the UK, with town councils being responsible for the petty remainder. To put things bluntly, if Britons decide to elect a Labor government, they are going to get more government than they would if the install a Conservative Party government. In other words, it matters who gets elected.

In contrast, because we have a federalized nation, the political power is far more spread out and atomized in the United States. There is a central government in Washington, but there are fifty states, and thousands of towns and cities. The federal government has taken in some two thirds of all taxes since WWII, but state and local governments are responsible for the other one third. States and local governments also set rules on policing, criminal justice, land and water use matters, transportation, amongst many other issues. The result is what Madison intended - a political system where an attempt to preserve liberty and freedom to put into place by limiting the power of any one political actor or body to do damage to others. Californians may run themselves into bankruptcy and enact all kinds of kooky rules, but the fact that California is doing so is not necessarily going to harm other states or localities. Furthermore, Californians can move if they get fed up with their state of affairs and go elsewhere. In other words, our Founders set up a system where they tried to make it where it didn't quite matter so much who is in charge. How many times have you heard the old phrase, you have a choice between twiddle dee dom and twiddle dee dee?

So, we have single member legislative districts, but does it have to be this way? Of course not, and in many countries it isn't. In Germany, voters cast two votes - one for a district representative and one for a political party. 50 percent of the seats in the German Bundestag are apportioned by single member districts, and the other 50 percent are apportioned by how many votes each party receives in the election in what is called a mixed member proportional electoral system. One result is that there are more political parties in Germany, but another result is that in order to obtain a ruling majority, parties often have to form coalitions with other parties, whereas in the United States that doesn't happen. One of the two parties wins a majority and wins power, but even then, the ruling majorities in Congress are often uneasy majorities, as can be witnessed in the liberal / blue dog coalitions of Democrats that Nancy Pelosi presides over in Congress. Pelosi has big problems holding her coalition together, which again makes it hard to get things done.

Then there's the United States Senate, where as everyone knows, a band of Senators can filibuster legislation. Yes, Scott Brown's victory in the Massachusetts Senate race, making him the 41st Republican senator, mattered and it mattered greatly. Some elections do matter more than others, and sometimes when the balance of power is very precarious, as it is right now in Congress, a Senator's power can rival that of a President in certain matters. Sometimes being a Senator can be a fine thing to be, but the Senate is also the repository of where the voice of the minority is to be heard in American government. And if that minority is determined enough, it can be enough to bring matters to a halt.

But to give an example of how things could be different in American government, take the election of John Culberson in November 2008 in the Texas 7th congressional district. Mr. Culberson beat Michael Skelley by a margin of 56 - 42 percent. So a Republican wins the district, but what about the Democrats who voted against him? How are their views represented, or ask yourself whether theirs was a wasted vote? If it was a wasted vote, then why bother to vote in legislative districts where parties have incentives to gerrymander to gain as many seats as possible, packing votes into the seats held by the minoritity and cracking the districts held by the majority, thereby marginalizing the votes of many.

In a proportional representation system, there would be other ways of capturing the sentiment in that vote and people would find voting more meaningful. If there would have been five members apportioned in each district instead of one, the outcome might have been that three Republicans and two Democrats would have been elected to represent the 7th district. One thing Americans might want to consider is adding more seats to our legislatures in an effort to better capture the public sentiments of a growing population. The U.S. Congress has been stuck at 435 members for quite a while now. America gets trade offs - we lose the far edge sentiments of the left and right, but America gains stability and coherence in its government.

This state of affairs also leads into the question of whether any particular election had any meaning or not? I'll be up front: Most people are not going to know the difference, nor are they going to care, who sits on the Harris County Probate Court #3, or some other random court. In general, the higher up the political ladder, the higher the turnout rates are going to be for an election because there is more at stake. More people are going to turn out for a U.S. Senatorial election than one for a local Justice of the Peace court, because a U.S. Senator has more power than a local JP does.

Ask yourself this: In any one particular election, ask yourself what's at stake? Does a particular election have any meaning, or is it basically meaningless? How much power does a particular office holder have? In the November 2009 City of Houston general elections, what was at stake was who was going to be sitting on the deliberative body of a major city. Under Houston's form of government, the mayor has the power, hence one should expect greater competitive pressures to obtain the job verses that of a city council member.

But, here is another point: What difference was there amongst the candidates? Did any of the four candidates - Annise Parker, Peter Brown, Gene Locke, or Roy Morales propose any radical changes in city governance? Did any of them propose to sell off Houston's two main airports? Did any of the mayoral candidates propose going to Austin and asking for legislation empowering Houston to collect 20 cents of gasoline taxes to solve Houston's transportation woes? No. Did any of them propose doing away with property taxes and implementing sales taxes? No. Did any candidate propose scrapping rail and rethinking Metro Rail? The closest thing to that was Roy Morales stating that Metro was a bully and that we should examine elevated rail for safety reasons. Peter Brown was specifically going to implement greater land use controls if elected, but otherwise there was not that great of difference between the candidates.

So, if there was not that great of difference between the candidates, what else was at stake for the public in competing for a job that one person once described at the Houston Chronicle website as being a glorified dog catcher? If you had to call the fire department because your home or your neighbor's residence had caught on fire, and they showed up, would it have mattered whether Annise Parker, Peter Brown, Bob Lanier, or Roy Morales were the ones sitting in the Mayor's chair when that happened? What about your City Council member? Probably not. So ask yourself - what difference does it make to you who sits in the Mayor's chair or on council, and hence why bother to vote?

In the 2009 Texas primaries, what was at stake? Both main parties (and there are two main parties, because we have single member districts, right?) chose their candidates for the Texas legislature and Governor, but not who was going to be the Governor! And what if you are an independent voter who does not subscribe to either party? Why should you have voted?

Another issue at stake is asking how much does you vote really matter? In the 2008 Presidential and congressional elections, 60 percent of eligible Americans, over 120 million in all, voted in the Presidential election. How much of a probability is your vote going to be the one that mattered? Ask yourself the same thing in any election - in the 2006 Texas primaries, there were over 600,000 voters who voted, a far smaller number. But you still needed to ask yourself what was the probability that your vote was the one that mattered? It was non-existent.

So, do you want people to vote? It is possible to force people to vote, indeed compulsory voting is the law in a number of countries. Such laws are usually enforced by small fines, or threat of disenfranchisement if someone habitually fails to vote. But one needs to ask whether such notions are compatible with liberty and freedom. Do you want to live in a country where it is compulsory to participate in politics? Better yet, how much knowledge do people really possess about political issues? Yet compulsory voting would be compelling them to participate in the political arena.

Admittedly, this entry is a mess, but America's political system was designed to make things bland and unexciting, thereby discouraging participation in politics. Yes change could come, but it would come slowly and in increments, not through sudden explosions or radical change. Elections and voting do matter in America, but they usually don't matter as much as people think, because of systemic barriers to more political parties, of fractured government power, and barriers put in the way of the expansion of the state. By doing this, our Founders wanted people to dedicate their energies into commercialism, to solving problems through private means or by charity, and not by force of the state, and for them that was the way in which liberty and freedom would be preserved. Did it work? Well, for 140 years it generally did, but WWII changed everything.

Barring a meltdown and a revolution, which is a distinct possibility, it will take another 70 years to roll things back and even then there are plenty of interest groups and people favoring bigger government that will stand in the way of liberty, freedom, and personal responsibility. And so it goes that the great American experiment roll onwards.

Wizard

Posted by The Mighty Wizard at 02:10 PM
This entry was posted in the following categories: America , Because they can , Houston and Texas matters

January 09, 2010

A road trip to Chicago

About two weeks days ago, the Wizard wrote about the death of an aunt of mine on my mother's side. This is the story of observations I made on the trip I made to Chicago and back.

The trip to Chicago

My father and I left Houston in his rather spacious automobile circa 1-2pm in the afternoon. We went over to my brother's residence where my father left him some instructions and house keys before we hit the open road. We ran into traffic congestion no fewer than five times within the first 35 miles before finally hitting some open road along I-45. We avoided the I-610 loop construction, but it was raining pretty hard that day and there were a number of accidents which were eliciting lots of rubber necking from drivers.

I had wanted to get out of Houston using U.S. 59, but I got into an argument with my father, who wanted to use I-10 to avoid the reconstruction work going on at the 610 Loop and get onto Interstate 45. We were leaving about 1pm and I told him that if we used I-45, we would run into evening rush hour traffic in Dallas. He would have none of it, so off we went, toughing it out up I-45.

The road way finally opened up somewhere around Conroe and off we went. True to form, we reached Dallas around 5pm and promptly ran into Dallas evening rush hour traffic around the point where I-45 ends and the road continues, turning into State highway 75. As with Houston, there are only either three or four lanes that go through downtown Dallas. It took a good one hour and twenty minutes to make it through Dallas and its northern suburbs before the traffic lightened up again. I was amazed how far the region had suburbanized. I spotted a new interchange that was being constructed in the outskirts of the Dallas Metro along highway 75. It will be needed.

As it was, I drove along highway 69 through Oklahoma, eventually hitting Interstate 44 east of Tulsa, which led to St. Louis. While driving along I-44, I saw a night train rolling in the opposite direction along the Interstate, reminding me that many of our roads followed where the trains ran.

We went through St. Louis around 4:00 am. I found the road network around St. Louis to be rather tricky. The interstates around St. Louis are full of turns, and the roads undulate with the terrain. If you aren't careful, then it's very easy to miss the turn offs that you're supposed to hit in order to stay on course.

I eventually made it to Lincoln Illinois by 7:30am. I let my father drive the rest of the way into Chicago. He is up there in age. I had let him drive for about 1 hour during the night, but he kept veering off onto the shoulder of the road, waking me up in the process from a brief nap. I then took back over driving until daylight, when it was safer for him to drive. We got into Chicago after 19 hours on the road.

Chicago

Many people have extolled about Chicago having an extensive mass transit system, and it does. Nonetheless, there was no doubt in my mind as my father and I entered Chicago on that snowy morning in late December that Chicago is in fact a city that is primarily built around the automobile.

We came into town and my father briefly drove around the convention center area. I saw quite a few hotels either directly connected to the convention center, or within a few blocks walking distance. The center also happened to be empty as we drove by. It reminded me that there are only so many conventions to go around and that Houston should not be wasting its energies on the convention business. We have far more pressing business to attend to than worrying about fighting over the scraps with a hundred other cities for convention business.

There was snow on the ground the entire time I was in Chicago. The temperatures hovered in the 20's during the day, and dipped into the teens at night. It was okay for a day or two, but after that I started to realize how thankful I was that I did not grow up, nor spend my adult life in Chicago.

I have a niece who is going to university in Chicago. She, like many students, has a car, but often walks with her friends to nearby restaurants and clubs. She also takes public transportation.

On the other hand, we stayed with my God parents while in the city. They never take public transportation, going everywhere by car - and yes, they have a pair of very nice cars! My sister had rented an SUV for the situation, so we mostly went back and forth between my aunt's residence and my God parents' using both vehicles. Only my mother flew into Chicago. We needed cars because it turned out that my aunt had quite a bit of stuff she had accumulated in her apartment. I ended up throwing away some 100 bags of trash in neighborhood bins before I returned to Houston and we took quite a few trips to the Salvation Army to donate items to charity.

Many of Chicago's older neighborhoods have alleyways in the back, where there are parking garages for residents. The alleyways are also where the trash bins, which are city owned, are located. Another item of interest was that in both my aunt's neighborhood and in my God parent's neighborhood, the streets were configured to be one way streets, with parallel on street parking. And yes, parking was often very hard to come by. On more than one occasion, I ended up parking over one block away from where my God parents lived. My father recalled that when the family still lived in Chicago in the 1960's, the streets in those neighborhoods were two way and there were not nearly as many vehicles parked in the street.

My God parents picked up the Chicago Tribune on the Sunday while we were there. While reading the weather pages, I was reminded of a piece of family lore. My father had a lifelong friend who shot a home movie of the blizzards of 1977-1979. For those of you who are not aware, Chicago endured three consecutive winters, 1976-77, 1977-78, and 1978-79, where the city was buried by an avalanche of snow. I recall seeing the home video, mercifully during a Houston summer, as a teenager, but had forgotten about it until I read that story. Another piece of trivia: The chief meterologist for WGN is a fellow named Thomas Skilling. He happens to be the brother of former Enron CEO Jeff Skilling.

But I digress. In 1957, the City of Chicago passed a zoning ordinance that mandated that developers provide one space for off street parking for each residential unit. It became clear to me that this mandate was not providing enough parking for Chicago residents.

We drove up and down Western Avenue many times, as that was the thoroughfare that stretched between my God parents and my aunt's residence. The street has three lanes in both directions, but the outermost lanes are taken up for parallel parking. I also noticed that there were row houses along the street in a few spots, indicating possible spot zoning since the street was obviously commercial. There were some businesses had Houston style parking, such as some CVS / Walgreen's type drug stores and some restaurants we went to. In other words, the zoning codes were clearly not uniform.

There were times where we would see clumps of pedestrians walking in the early evening hours. My father told me that it was likely that those were people who were just getting off work and heading to some neighborhood tavern or nightclub. At one point we passed under an "EL" (elevated rail line). My dad began to reminesce about his life in Chicago before we moved to Houston. He said he would often move to where there was a nearby rail station, as he did not own a car while living in Chicago until he was 36 years old. At one point I asked him how long it took for him to get to work when he lived in Chicago, and he told me about 45 minutes to an hour.

Another item of note was that gasoline prices are some 50-70 cents per gallon higher in Chicago than they are down south. This price discrepancy still held in central Illinois when we bought gas on the way home. I am not sure about why this was the case, but I would not be surprised if the matter has to do with the idea that oil and gas companies have to formulate different type of fuel due to Clean Air Act mandates. This balkanizes the gasoline markets around the country.

The trip home

My mother decided that my dad needed to go home, as he wasn't adapting well to the weather or to the problems of dealing with my aunt's death. Ergo the job fell to me to drive him back to Houston.

My dad directed me to take I-90 / I-94 towards downtown Chicago, then take I-55 south to get out of the city. I'll never forget the view of the skyline of downtown Chicago from a crowded and congested I-90 / I-94. It is not as spectacular as Manhattan's skyline, but it is very impressive. It is that broad downtown area that (at least on paper) justifies Chicago's public transportation network.

As we made it onto I-55, I encountered another amazing sight. It took driving some 30 miles south along I-55 before the traffic finally began to thin out, but that wasn't what startled me. It was that I must have seen 300-400 18 wheelers driving northbound along I-55. At some points, it looked to be that one out of every three or four vehicles was an 18 wheeler. There was a repair facility for 18 wheelers along the road, as well as several parking areas. I caught what I thought was a glimpse of a freight rail line along the way. It reminded me of how Chicago, like Los Angeles, is a vast hub for the movement of freight.

We followed I-55 through as it turned into I-40, down through to Memphis, then turned west through Arkansas on the way back. We made it to the outskirts of Memphis after 9pm, and as we did, I saw hordes of Federal Express freight trucks making their way west bound out of Memphis and into the night.

I reached Texarkana around 1:00am. TX-DOT is constructing a large interchange at the edge of town, and it took several minutes to snake our way through the construction before we hit U.S. 59 for the final drive home. I wanted to make it back into town before the morning rush hour hit with full force. That turned out to be a tough thing to do because U.S. 59, though it is five lanes in many areas, is not an Interstate road. Because of that, the road goes directly through the heart of many towns in East Texas, such as Lufkin, Marshall, and Jefferson. Every time you go through those towns, you have to slow down to urban speeds, whereas the Interstates often bypass or circumnavigate many smaller urban areas which often allows for faster travel.

We made it into Houston at 7:00am, running into rain and mildly heavy traffic along 59 as we reached 610 Loop. I turned at 610 to head towards I-10, and ran directly into the construction work that TX-DOT is doing along the route. I was glad when it was over, as it was another 19 hour drive home.

Final Thoughts

1) I did not run into much traffic congestion driving either to Chicago or back outside the major urban areas. Even St. Louis, which I drove through at rush hour, did not have too much traffic congestion. The big traffic congestion, surprise, surprise, was in Chicago, Dallas, and here in Houston. As such, I strongly believe that the Trans Texas Corridor was (and is) not necessary! The Governor and the political classes can make all the statements they want about traffic congestion, but I didn't see it along I-45, nor along anywhere else.

If Texas really needs new roadway, it would be much cheaper to simply add a lane in either direction along the right of way along I-35 or any of our other major roads. That would be much cheaper on the public coffers than cutting a quarter mile wide swath along the entire state of Texas and building a gigantic infrastructure project costing $150 billion. When doing infrastructure, it's better to make improvements to add to what's already there, if it's necessary, rather than start up gigantic new projects that often lead to disasters.

2) What is necessary is that if government is still going to be the main player in terms of infrastructure funding, then policies ideally need to be developed so that the bulk of the money goes to where the traffic congestion is at - which is the major urban areas. America already has a great road network for its towns and rural areas. What we need to do for them is simply maintain what they have.

In 2010, Congress will probably take up a new six year transportation appropriations bill. The House chair for transportation is Ken Oberstar, who has stated that he wants a massive six year appropriation bill of $500 billion, well over 50 percent higher than the cost of the previous Bush Administration era transportation bill.

Tea Party types should be thinking that considering our country's financial straits, this is utterly irresponsible. The Interstate freeway system, which was the main rationale for collecting the federal gas tax, is completed and there's no stomach in Congress to raise the gas tax. Congress has been funding transportation out of general revenues since the last bill ran out of authorization. Governor Perry might have been ambitious with the Trans Texas Corridor, but his criticism of federal transportation was cogent when he stated that the federal program had become unfocused, because so many gas tax dollars were not getting back to where they came from and they were being spent on items like bicycle trails and light rail systems.

I would argue that the federal government should reduce the gas tax to perhaps 5 cents per gallon. The federal program should go only towards the Interstate system, thereby putting the federal program into maintenance mode, and either let the state and local governments set up policies to fund their own transportation networks, or better yet let the private sector start dealing with the matter. Either way, it's more likely that America would end up with a more rational transportation network for the future and it would be part of a program to start rolling back the centralized power of Washington has drawn the ire of so many.

Wizard

Posted by The Mighty Wizard at 01:36 AM
This entry was posted in the following categories: America , Houston and Texas matters , Money and finance , Transportation

September 30, 2009

Republican welfare queens

Over on Facebook, Tracy posts about a Townhall article where Robert Reich says ObamaCare would wreck the economy. Yes, Lyndon Johnson did lowball the costs of Medicare, something I pointed out when I spoke at the Harris County Republican townhall meeting that was held out in Pasadena the other night. I told the audience how Medicare had an 1,000 percent cost overrun in its first 25 years of enactment. Nobody has any real clue how much ObamaCare will cost taxpayers.

The problem, politically, is that I've been to five or six townhall meetings with almost all Republicans in attendance. What I've heard maybe 10-15 times now from elderly people is that they all agree on how wonderful Medicare is! They just go berserk over the idea that there may be illegals who might be eligible for something too. I told that audience last Tuesday in Pasadena that when you go on Medicare at age 65, you become a ward of the state. In other words, YOU become a welfare queen, and that you are no different than those damned illegals.

There was silence in the audience when I got done saying that. You could have heard a pin drop.

I grew a little gentler at the end of my 2 minutes of allotted time with the mike. I let the audience off by asking the panel if anybody had any cost estimates on what ObamaCare would cost, to which one panel member piped up something to the effect of, "take the Congressional Budget Office estimates and multiply it by 5 and you're on track".

One member of the audience pointed out that the Republican party didn't do anything about rolling back the welfare state when they were in power. He was right. And why was that?

Maybe it's because we are NEVER going to be able to contain government if there are millions of Republicans (much less Democrats) who love Medicare, but merely object to ObamaCare. All those so called Republicans are then doing is admitting that Lyndon Johnson was right all along and we're merely arguing over how much socialism in medicine there is going to be. But more importantly, you've already given up on the argument of whether government should be involved in health care at all. Otherwise, I don't care if I'm Republican or not. Taxpayer funded health care is good for me but not for thee!

Addendum: David Jennings at Big Jolly writes this post on the Pasadena townhall meeting. Here is the Harris County Republican Party's idea platform presentation on health care reform.

Another addendum: See and hear the Wizard himself in action! I do admit that it is impossible to hear what I or the panel members are saying.

Enjoy!

Wizard

Posted by The Mighty Wizard at 08:13 AM
This entry was posted in the following categories: America , Because they can , Money and finance

September 17, 2009

Repaving Westheimer

Before I go any further, I wish my older brother a belated Happy 50th birthday. I should be thankful that he made it this far.

For the past 10 days or so, the Wizard, along with untold thousands of other Houstonians, has had to put up with the fact that the illustrious Texas Department of Transportation has scrapped up the top 4-6 inches of pavement off of FM 1093, also known as Westheimer Road. Since the Wizard lives right off of Westheimer, the matter has been of some importance to me, especially since I experienced a flat tire last Thursday while driving to work. I found a nail in my old tire, had to wait for AAA to pump up my baby tire so that I could drive the following morning to a Firestone to buy a new tire. The new tire set met back $90.

And so it was. As with many people, I was left wondering exactly why it was that the powers that be decided to repave what was for all practical purposes a perfectly fine road? The official answer was posted on Channel 2 news:

TxDOT says the roadway was hardly perfect before.

"As a driver, driving down a roadway, you don't see all the little things in the pavement," TxDOT spokeswoman Karen Othon said.

Othon says Westheimer Road had cracks that workers have sealed over the years to keep moisture from causing more damage.

The last time this section of Westheimer Road was resurfaced was 2002.

"The actual life of an asphalt pavement is 7 to 10 years, so it was time for it to be resurfaced," Othon said.

We discovered Westheimer Road wasn't actually scheduled to be repaved until April 2011, but when TxDOT received $2.6 billion in federal stimulus money, the state decided to put several projects on the fast track.

"There is a criteria established with the stimulus money, and if you don't use it and go by their guidelines, then we do lose it," Othon explained. "So this is something that we definitely wanted to take part of and use the money that is offered to us."

TX-DOT's website reports that this repaving project is currently estimated to cost $9.45 million.

And yet, that still begs to ask the question. Was this really necessary? I understand probably better than anybody that Westheimer, all eight lanes of it, probably carries some 100,000 (or more) vehicles everyday. Yet the road was in perfectly fine condition. This reminded me of when I lived off of Kirby Drive, where I saw the City of Houston lay asphalt on stretches of the street 2-3 times before deciding in 2001 to tear up the street - yet again - because the City decided to lay an underground storm sewer under the median connecting Buffalo Bayou and Braes, a project now in its second stage between San Felipe and Kirby south of Interstate 59.

It's actions like this, where people decide to do something about what is a non-issue, all because they are chasing after some handout money, that drive me nuts. That money could have been used to repave Richmond Avenue, for example, but God forbid we should repave parts of a badly bruised up Richmond Avenue because we all know that Metro so desperately wants to put a train down that street. So better to spend $1.5 billion to put a 10-11 mile light rail line down Richmond, rather than spend less than one percent of that amount to smooth out the wrong street. How is it that we can so often be so penny wise and pound foolish?

The repaving of Westheimer is not only a $10 million microcosm of the $787 billion stimulus plan, it is a microcosm of irrationality and absurdity of politics as a whole. People wonder why there are skeptics out there who question whether doing stuff like this is worth passing the bill on to our children's future. It isn't.

An item of note: Bob Lemer passes on that there will be a 90 minute workshop of City of Houston finances September 25th from 11:30am - 1:00pm. Cost is $35 for Houston CPA members and $50 for members of the public.

Wizard

Posted by The Mighty Wizard at 10:14 AM
This entry was posted in the following categories: America , Because they can , Houston and Texas matters , Money and finance , Transportation

September 11, 2009

When a Republican becomes a Jackass...

Last Wednesday evening, the Wizard spent the hours in the way he likes most - wiling the hours away with the Wednesday Knights, playing several rounds of 10-20 minute chess at a Houston area restaurant. The Wizard won one game and lost two, but due to a peculiar set of circumstances, I still took home the third place pidling trophy for my efforts.

Since the Wizard was doing something more important than watching TV or paying attention to politics Wednesday evening, the Wizard missed President Barak Obama's nationally televised address on whether the United States government should pass legislation on mandating that Americans must have universal health insurance coverage.

The reason why the Wizard didn't bother to watch the President's televised address was because he knew that he wouldn't miss much. That belief was validated when I picked up my old fashioned, fish wrapper version of the Houston Chronicle yesterday morning before I headed off to work. The front page story, carried from over the news wires, was of South Carolina Republican Joe Wilson, who cried out "You Lie!" when President Barak Obama stated that the new universal health insurance legislation would not cover or benefit illegal immigrants.

Much commentary has been inked and typed over Congressman Wilson's outburst, which he later offered an apology to the President that Mr. Obama accepted. Fairly typical of the commentary offered was by this guy, who complained about the halls of Congress no longer being a place of civility. The Chronicle editorial board spoke of the idea that there was no room for such rudeness in the debate over the future of health care and one-sixth of the American economy.

The Wizard takes a bit of a different view over Congressman Wilson's outburst. It wasn't that Mr. Wilson was rude to the President of the United States - he was. But plenty of people are rude to the President (or for that matter, just about any politician) every day in many sorts of ways. Often that rudeness towards others could be justified in some way. Sometimes we read about it in print, or we never hear about it as they may be words whispered between friends in private. To the Wizard however, it had a lot more to do with the idea that one man called another man a liar to his face in public.

Politicians do lots of stupid things, much like the rest of us. Age is no barrier to doing stupid things, thinking of stupid things to do, or for that matter not knowing how to run your own life. Back in 2001, the Wizard worked many hours on the City of Houston TABOR / Revenue Cap proposition drive. After City Secretary Anna Russell failed to verify, after 48 days, that we had 20,000 valid signatures to place the proposition drive on the November 2001 ballot, I suggested to our most prominent plaintiff in our lawsuit against the City of Houston that we get a mob of people out and drive our cars in circles around City Hall, honking our horns as we went. This gentleman, who happens to be older, much wealthier, and wiser than I was (and am) threw water on the idea. He said to me something that I never will forget. He told me that "Republicans just don't do that sort of thing."

I got the message, but it's a message worth repeating to myself. Even when something does not go your way, try to learn from it and move on. Don't try to act like a jackass.

So, fast forward eight years and what do I find Republicans doing? Well, I find that lots of people who call themselves Republicans acting just in the same way that I suggested they do eight years ago in front of City Hall. They are running around holding rallies, flash mobs, and acting like a bunch of jackasses. Those mobs and rallies are being attended by Republicans who tell me that they deserve their Social Security check because they've paid into it, or that they don't want politicians to touch Medicare because they like it. Every time they do that, they're acting like a jackass. Every time a Republican politician proposes some expensive new public welfare entitlement, they're acting like a jackass. In my view, that means that both Bush the elder and Bush the younger were a pair of jackasses. Arguably, the last politician who wasn't a jackass was Ronald Reagan.

And so it is. Hearing things like Congressman Wilson's outburst, or learning that California assemblyman Mike Duvall having to step down because he was caught on tape telling salacious stories of his romps with mistresses lobbyists, point to a political party that has been electing too many guys who turn into jackasses once they get into office, but has not been doing enough intellectual thinking, offering new ideas, alternatives, nor is it a party with members who have spine. Otherwise, the future of the Republican party will belong to the Mike Duvalls, and the Joe Wilsons of the world, and that's not a party worth paying attention to or voting for. Why? Because deep down, those guys (and they constituency they represent) are no different from the jackasses who happen to be sitting on the other side of the aisle.

Wizard

Addendum: In today's Houston Chronicle, the newspaper carries the AP wire story about President Obama now holding the bullhorn. The story states that

Keeping Americans safe, the president says, is "the first thing I think about when I wake up in the morning; it's the last thing that I think about when I got to sleep at night."

Bush used to say the same thing.

That's too bad, because both men didn't swear an oath upon ascending to office to keep Americans safe. They swore an oath to uphold and defend the Constitution of the United States of America.

Further addendum: A story just came across the wires from Politico. It wonders whether petty GOP cranks are dominating the public debate.

Posted by The Mighty Wizard at 10:55 AM
This entry was posted in the following categories: America , Culture , Living a life worth living

July 12, 2009

Guns in schools - 1961

This past Friday at the Houston Property Rights Association luncheon, a long time HPRA member, Ronnie Samms, brought in Raw Prints, his 1961 yearbook from Landrum Junior High School. The reason he brought his junior high school yearbook to the gathering was because he wanted to show us that there was a Rifle Club at the school! Guns were kept at the school, in fact they were locked up in the shop. According to Ronnie, the club had after school shooting practices.

Ronnie was not a member of the club, but he did know some people who were. At some point he told me that he would send me a photo copy of the photos that were taken of students who were members of the club. I did see the picture. There were some 20 students who were kneeling down, holding their rifles up above and out in front of them. If I do get the photo copies, I'll rewrite this entry to link to the image.

Needless to say, much has changed. As another HPRA member noted, how much legislation gets passed on the grounds of we have to do X because we need to be sure that X never happens again.In this case, guns were taken out of schools, probably on grounds that parents would sue the district in the event that any violence would take place on account of guns being on the school premises.

Enough for now.

Wizard

Posted by The Mighty Wizard at 08:26 PM
This entry was posted in the following categories: America , Because they can , Culture

May 13, 2009

Umm, We don't know where trillions of dollars went...

Today's entry, gentle readers, makes one want to shake one's head. The Wizard was forwarded a link in his email from one of his friends which led to a YouTube video of Federal Reserve Inspector General Elizabeth Coleman answering questions from Florida Democrat congressman Alan Grayson. I don't surf the Internet too much looking at sites like the Daily Kos, but their post was as good as any on the subject.

The inspector general tasked with overseeing and auditing the Federal Reserve knows pretty much nothing about what the Fed is doing. That's the conclusion that comes from watching the exchange Tuesday between Rep. Alan Grayson (D-Fla.) and inspector general Elizabeth A. Coleman.

Narrolibertas is similarly outraged. Bloomberg News reported back in February that the taxpayers are on the hook for bailing out the financial sector in this crisis for $9.7 trillion dollars!

The Houston Area Liberty Campaign has been calling for a thorough auditing of the Federal Reserve, perhaps by Congress. Narrolibertas suggests calling your Congressman.

The Wizard has long believed that, contrary to making responsible decisions, government - for the most part - aids and abets the abrogation of responsibility. And so it goes.

Wizard

Posted by The Mighty Wizard at 08:41 AM
This entry was posted in the following categories: America , Because they can , Money and finance

April 16, 2009

Working the Houston Tea Party - the day after...

Well, well, well. I'll be adding addendums to this blog entry as the day wears on, but as gentle readers know, the Wizard was working the Houston Tea Party events as a member of the welcoming committee. It was my job to act as a crier, encouraging tea party attendees to sign up so that we could get an accurate head count of the number of people attending.

One of the members of our committee took all of our sign in cards and sheets home. She told us that there were so many people waiting to get in at the start of the event that two women volunteered on the spot to join our committee. She stayed up until 3:00am this morning counting the number of signatures.

We collected 8,532 signatures for the event. We filled up 248 single pages of 20 signatures, 31 pages where signatures filled up both sides of the sheet (40 signatures), and 139 sign in cards. The discrepancy between the numbers of sheets filled up and the total attendees is accounted for because some people signed in for themselves and their spouses, boy or girl friends, children, or other family members. Since some people indicated to us that they did not want to sign anything but rather just attend the event, we believe that there were probably about 10,000 people who attended the Houston Tea Party.

Incredibly, we had 389 people check off the "I want to volunteer" column, indicating they want to work for future events. We may well put them to work, as we are contemplating holding an event for July 4th.

More later. It's time to go back to work.

Addendum: Here is a photograph of the Wizard at work at the April 15th gathering.

Wizard

Posted by The Mighty Wizard at 08:18 AM
This entry was posted in the following categories: America , Because they can , Culture , Houston and Texas matters , Money and finance

April 13, 2009

Working the Houston Tea Party

So, the Wizard is at it again...

The Wizard will be working the Houston Tea Party, to be held at Jones Plaza in downtown Houston. No, the Wizard will not tell gentle readers how it was that I got involved with the Houston Tea Party, as I did not even hear about the original Tea Party until some two weeks after it had occurred. How I got involved came about in a round about way anyway.

More to the point, I have gotten quite concerned about what has happened in Washington over the past 8 or so months, starting with the Fannie Mae and Freddie Mac excitement. There has been quite a bit of reporting about President Obama's $3.6 trillion federal budget for fiscal year 2010. What a lot of people don't seem to realize is that this will represent some 26 percent of the U.S. GDP for this upcoming year. Before World War Two, federal expenditures were under 10 percent of overall economic activity. This jumped enormously during the Second World War. After a brief whittling down period between WWII and the Korean War, federal expenditures vascillated between 18-22 percent of economic activity since the start of the Cold War. Even after the Cold War ended, the Clinton Administration pared down the military by one third, but domestic expenditures expanded to fill in the breach. Still, Clinton was - gasp! - the most fiscally responsible president America has had over the past 30 years, largely thanks to facing a hostile Republican led Congress for his last six years in office.

The bottom line is, federal expenditures have now reached 26 percent of GDP, and that represents an enormous jump in overall governmental involvement in the economy.

* Just yesterday, a story came across the wires that the federal deficit for February 2009 was $192 billion! It used to be that people were outraged when that was the federal deficit for an entire year.

* Brian Shelly notes that Social Security is going to go into the red eight years earlier than was previously projected.

* The Bush Administration told the American public just months after invading Iraq that the army would be coming home in a few months. Well, here we are 5 years, and over $500 billion later, and we're still there.

* The Obama Administration wants to push through universal health insurance, at some completely unknown cost.

* The Bush and Obama Administrations have given AIG $180 billion. I have no idea where it went, other than some vague notion that it went to cover AIG's screw ups over credit swaps.

* The Obama Administration is bailing out the car companies and has fired GM CEO Rick Wagoner. Now, a better term for the American auto manufacturers would be to call them Government Motors.

Some years ago here in Houston, we had a big company that completely failed called Enron. Politicians couldn't run away fast enough from that debacle, other than to send in the prosecutors to witch hunt Enron's executives.

One thing to thing about is this. Will Americans not be able to buy cars or insurance if either GM or AIG fail? Were Americans not able to obtain natural gas just because Enron failed?

* State and local governments don't look much better, mostly because of massive pension obligations to workers on the government payrolls.

* Because certain interest groups and the media have whipped up the public into a lather over global climate change, the Obama Administration is contemplating either a carbon tax, or a cap and trade regime for carbon emissions. Notably, there's been no talk of how this is going to affect my pocketbook. But according to Reason magazine, a cap and trade regime could turn out to be nothing more than yet another monster of a corporate welfare program. Some 2,300 lobbyists have besieged Capitol Hill on the matter, a huge sign how much is at stake. It is also a sign that an awful lot of rent seeking is going on.

* Taxes from every level of government now take up about 35 percent of my money. Taxation is now my largest personal expense, far exceeding my second largest expense, which is mortgage and fees for my housing.

The Wizard, as usual, will not get to make any speeches. Others always seem to grab the spotlight, even though I am often able to evoke ovations when I speak and have been told countless times how articulate I am at the microphone, even though I have only 2-3 minutes to get my points across. Instead events like this always need people to do the dirty work, including whipping out the wallet to put up money for the event, which nobody ever seems to want to do. Some people I know are quite good at wanting to pass out stuff and committing others to do the dirty work on their causes, while running away as fast as they can when it comes to actually carrying the load of getting the job done. Others will also be pushing their messages, while I don't know how many times I've had to put up with old fogies who don't get off their rear ends to do a damned thing to organize events, to defend property rights, or liberty, tell me how we are to handle the problems that we will face in putting on this event. Instead, I will likely have to help pick up the trash after this thing is over. That's the dreary reality of working in the trenches of grass roots politics.

And yet, I am going to work this event on Wednesday because I am seriously starting to wonder about the financial stability of my country and because of what I perceive to be an immense grab for power by the Obama Administration to reach ever further into American life. I'll do the mundane things that the Houston Tea Party event will require to be successful because I don't want to live in an America that allows me to only have a little bit of pocket money left over at the end of the week. I'd rather die on my feet than live on my knees.

So, the Wizard will be at the sign in tables, helping to distribute some of the 6,000 adhesive stickers for people's names that I've purchased for the event. I have a feeling that I'll be seeing some of you there.

Wizard

Addendum: To **** with you, Paul Krugman.

Posted by The Mighty Wizard at 11:36 PM
This entry was posted in the following categories: America , Because they can , Houston and Texas matters , Money and finance

April 11, 2009

On Houston's Metropolitan Job Sprawl

When Al Gore was Bill Clinton's vice president, the (non) - issue of urban sprawl could have been described as something of a second tier issue in American life. To be sure, urban sprawl had its usual detractors, but the matter was mostly something of a concern to certain interest groups.

This state of affairs has changed with the election of Barak Obama as President, where the New York Times noted that in February 2009 that the President said

"The days where we’re just building sprawl forever, those days are over,”, urging officials to employ “innovative thinking” when deciding how to spend their transportation money.

Moreover, considering where on the political outlook scales Mr. Obama sits, one can imagine that his administration would look to the Brookings Institution for ideas on many matters, including urbanization.

What a discouragement, therefore, it must be for many in the anti-suburbanization camp to read of a study that was just published by Brookings entitled Job Sprawl Revisited: The Changing Geography of Metropolitan Employment. The Brookings study, which compares the results of a spatial location analysis of private sector jobs across 98 metropolitan areas across the United States, denoting the differences in job locations between the years 1998 and 2006. Notably, private sector job decentralization occurred in 95 of the 98 metropolitan areas studied, and that does not bode well for central cities. Also, in 17 out of the 18 industries studied experienced job decentralization.

The Brookings study asserts a series of ailments that result from job sprawl, including higher water and sewer infrastructure costs, spatial mismatch where employees can have trouble reaching appropriate work, lower pace of innovation, and higher energy consumption.

Noting or complaining about all these issues is nice, but doing so begs one to ask a question that the Brookings study fails to ask, much less answer. If all of these ailments are (or were) occurring during this time frame, then why were private sector employers continuing to move away from central cities anyway?

One aspect of this issue is to look at the types of employment that are locating furthest away from the center. According to the study, it is the retail, construction, and manufacturing type jobs that are the ones that are most prone to moving outwards away from the central business districts (CBD's). The Wizard is willing to bet that these industries are the ones whose land use requirements are the largest. It would behoove them to locate where land is cheapest, which happens to be at the suburban fringe. Not doing so would put them at a competitive disadvantage vis-a-vis with their competitors in the marketplace. As far as retail goes, it also pays to move closer to their customers, and that happens to be in the suburbs.

One issue the Wizard decided to look into was the price of petroleum and of gasoline during this period. This chart shows that during the 1998 - 2006 time frame, the price of a barrel of petroleum rose from a post 1997 Asian economic crisis low of $12 per barrel to a high of $60 per barrel in 2006. The price of a gallon of gas went up from $1 per gallon in 1998 to $3 per gallon by the summer of 2006, yet the trend towards decentralizing of the spatial distribution of jobs continued to occur.

According to the study, Houston is one of the 53 metropolitan areas that is experiencing rapid decentralization of jobs, meaning that job shares were flat or declining in the CBD while growing in the outer rings. The report estimates that there were 1,750,155 jobs within 35 miles of downtown Houston in 1998 and 1,975,566 jobs within 35 miles of downtown Houston 2006. We can set up a table to see how many jobs were located where:

1998: number of jobs: 1,750,155
2006: number of jobs: 1,975,566

1998: percentage located within 3 miles of CBD: 14.2
2006: percentage located within 3 miles of CBD: 11.6

1998: number of jobs within 3 miles of CBD: 248,522
2006: number of jobs within 3 miles of CBD: 229,166

1998: percentage located 3-10 miles from CBD: 36.8
2006: percentage located 3-10 miles from CBD: 32.4

1998: number of jobs 3-10 miles from CBD: 644,057
2006: number of jobs 3-10 miles from CBD: 640,083

1998: percentage located 10-35 miles away from CBD: 49.1
2006: percentage located 10-35 miles away from CBD: 56.0

1998: number of jobs 10-35 miles from CBD: 857,576
2006: number of jobs 10-35 miles from CBD: 1,106,317

Now then, it should be noted that the City of Houston is approximately 640 square miles. A radius of 10 miles encompasses 314 square miles, ergo that is just under 50 percent of Houston's acreage, discounting the fact that there are some areas within this circle that are not under the City of Houston's jurisdiction, such as West University, the Memorial villages, and perhaps Bellaire and Pasedena. It should be noted that the number of jobs within 10 miles of downtown has, for all intensive purposes, stayed stable. Peter Brown told the ITE a while back that Houston was getting only 15 percent of new area population and 23 percent of new area jobs with the rest going outside city limits. If that were so, then that would infer that much of the new private sector employment that Houston is attracting is deciding to locate in the outermost areas of the City itself, with the rest of area job growth occurring outside City limits. Conceivably, the City Council may decide that the only way in which Houston can actually capture some of the tax monies associated with those jobs is to do so the politically unpopular, old fashioned way - via annexation.

This report also casts doubt upon the idea of using light rail as a method of capturing any job growth. Metro started operation of the light rail line in January 2004, a full 2-3 years before the termination of the study period. Yet according to the study, practically all of the job growth in the Houston metropolitan area occurred more than 10 miles away from the CBD.

The current economic downtown that started in late 2007 is not accounted for in this study. Unemployment across the United States has gone up from roughly 4.5% to 8.5%, while it is at roughly 6.5% in Houston. It might be surmised that there may be a gain in density once the economy recovers on the assumption that the cost of transportation fuels will once again go up. But even if there are gains in population density for reasons of continually rising fuel costs, it doesn't necessarily mean that gains in density will occur within the already heavily developed portions of the urbanized area, particularly if job sprawl continues to occur. Motor vehicles could adapt via a change in propulsion, where electricity becomes a preferred form of power. Households could also decide to trade within their indifference curves of their household budgets, giving up larger house sizes for holding on to the mobility offered by the automobile in the event that transportation becomes more expensive.

The Wizard awaits the next Brookings study on this subject. I suspect that the 2010 Census will tell much about these matters.

Wizard

Posted by The Mighty Wizard at 10:48 PM
This entry was posted in the following categories: America , Houston and Texas matters , Transportation

March 02, 2009

On Houston's traffic congestion

Inrix, a privately held provider of traffic data and traffic congestion solutions, recently published a national scorecard of traffic congestion, bottlenecks, and travel time indices of metropolitan areas across the United States. According to the Wall Street Journal, Inrix collects data on road congestion, in part, from a million vehicles equipped with GPS-enabled devices like cellphones and car navigation systems. The company stated in the accompanying press release that the data was:

revealing a 30 percent decline in traffic congestion in 2008 during the peak periods on major roads in urban America. Overall the report found that 99 of the top 100 most populated cities in the U.S. experienced decreases in traffic congestion levels in 2008 as compared to the prior year. The Scorecard contains the most accurate and current information in the country regarding overall congestion and bottlenecks on nearly 50,000 miles of America’s major roadways, and is compiled using tens of billions of data points from INRIX’s network of nearly one million GPS-enabled cars and trucks traveling across over 800,000 miles of roads.

The report cites turbulent fuel prices and a struggling economy as sources for a consistent decline in overall traffic volume. Detroit, where the jobless rate climbed past 21 percent in 2008, saw the second largest decrease in congestion nationwide. Additionally, Riverside, Calif., which ranked third-highest in the nation in foreclosure activity during 2008, saw the highest drop in congestion of the nation’s larger regions.

“On average, Americans spent 13 hours less stuck in traffic in 2008 versus 2007,” said Bryan Mistele, INRIX president and CEO. “While less traffic is generally good news, the causes of it aren’t necessarily something to celebrate. Traffic congestion is an excellent indicator of trends, telling us whether businesses are shipping products, whether people are going to work, and whether shoppers are going to the mall. The Scorecard provides an amazing lens through which we can see these and other major events unfolding across the country.”

Traffic congestion really is a lens through which you can view overall activity in the broader economy. Only Baton Rouge Louisiana had worst traffic congestion in 2008 than in 2007. Also, Inrix wrote that

National congestion levels were essentially the same when comparing the first and second halves of 2008, thus it seems that higher fuel prices in early 2008 and the slower economy later in the year netted the same drop in overall congestion.

So, what about Houston? Well, Houston's scorecard can be viewed here. What I find interesting are two things. First, Houston's overall congestion is measured at only 34 percent of that found in Los Angeles, the most congested metropolitan area in the United States. That is because LA has the fewest miles per capita of freeways of any major metropolitan area in America. Second, the data confirms what is probably intuitively obvious to many Houstonians. The overall worst traffic bottlenecks in the Houston area are to be found in the Galleria area. Six out of the top eleven worst bottlenecks are found along IH 610 Loop (southbound and northbound) and various entry or exits to the Galleria, including Westheimer, San Felipe, and Post Oak Boulevard. The exit at 610 Loop and Richmond Avenue comes in at number 22 on the bottleneck list.

The good news is that none of Houston's interchanges make the top 100 list of Inrix's worst segments or interchanges for traffic bottlenecks. The bad news, comparatively, is that every single one of Houston's 25 worst bottlenecks climbed up the overall rankings for bottleneck severity when comparing the 2008 data to the 2007 data, but that almost certainly reveals that the downturn in 2008 has affected Houston less than it has other areas of the country, an observation confirmed by the fact that Houston's travel time index declined only slightly in 2008 verses 2007.

Enough for now. There are other things I want to write about, so stay tuned.

Wizard

Posted by The Mighty Wizard at 11:40 AM
This entry was posted in the following categories: America , Houston and Texas matters , Transportation

February 16, 2009

Exxon's profits and its tax bills

I logged this morning to check my web mail. After doing so, I subsequently found a story that was carried by my ISP about how the price of crude oil is falling, but that the price of gasoline at the pump has been slowly going up.

So what's the deal? The article did a somewhat decent job of describing the overall situation of what's happening in the worldwide oil markets, or at least not a bad job for a journalistic article, but at the end of the article there were a pair of statements that were made by two people interviewed for the story.

"Drivers are being ripped off even more now than before," said Stuart Pollok, who was filling up recently at a Chevron station in downtown Los Angeles. He pointed out Exxon Mobil Corp. reeled in billions in profits last year when oil prices neared $150.

Others see the conspiracy reaching higher.

"It got really low during the elections and now it's going back up," said Christel Sayegh, a 23-year-old graphic designer in Los Angeles. "They do that every election, though, right?"

In response to both Mr. Pollok's wailing about Exxon's obscene profits and to the young graphic designer's conspiracy oriented view of the world, I present an article that was written in this past week's U.S. News and World Report by Robert Bryce about how Exxon paid $116 billion in taxes in 2008. That's right gentle readers. Exxon made an immoral and obscene $45 billion in profits in 2008, but the corporation's overall tax bill in 2008 was - oh well - only a petty $116 billion or 2.5 times as much.

Exxon of course is the largest privately held Big Evil Oil Company in the Big Evil Oil industry. However, as everyone knows there are plenty of other companies in the oil and gas industry that are also paying untold billions of dollars every year in taxes to governments of all stripes.

I posted this message to an Internet discussion group that I belong to and got a response back from a well known guy in the transit industry:

That headline – Exxon’s 2008 tax bill was $116 billion – reminded me of something I was just working on.

From Federal Highway Statistics, Table HF-10, “Funding for Highways and Disposition of Highway-user Revenues, All Units of Government, 2006,” the Grand Total Receipts, from all sources, was $161.061 billion.

That $161 billion includes:

Motor Fuel and Vehicle Taxes $85.540 billion

Tolls 8.108 billion

Property Taxes and Assessments 8.599 billion

General Fund Appropriations 25.979 billion

Other Taxes and Fees 9.878 billion

Investment Income 9.512 billion

Bond Issue Proceeds 17.828 billion

(It does NOT include road use fees not used for roads, including:

Nonhighway purposes $ 8.794 billion

Mass Transportation 10.520 billion

Collection Expenses 3.218 billion

Used for Territories .245 billion)


OK, not that I have done my accounting busy work for the day, what this means is that the amount of taxes paid by Exxon-Mobil for 2008 was about 72% of the entire spending on U.S. Roads in 2006.

Now, Exxon-Mobil is the largest oil company, but it sure isn’t the ONLY oil company that pays U.S. taxes, and while there are a lot of different uses for oil, transportation uses (ALL modes) is two-thirds of U.S. oil use, and I think it is not unreasonable to believe that road use of oil for transportation is the biggest share of that.

You folks have heard me whine before about FHWA not including most fuel sales taxes into the computation above.

So, when someone tells you that roads don’t pay their way, here is another thing to bring into the analysis.

Sigh...

Wizard

Posted by The Mighty Wizard at 11:46 AM
This entry was posted in the following categories: America , Because they can , Money and finance , Transportation

January 03, 2009

On Zoning in Chicago

One of the arguments that people who believe that Houston must have a zoning ordinance is that zoning will allow them to retain the character and flavor of their neighborhoods. Zoning will allow citizens to keep out McMansions and other inappropriate development, zoning will allow residents to control their own destiny, and zoning will enable the urban planners to use their supposed expertise to guide the destiny of a city.

Well, well, well, if gentle readers fervently believe all of this, then I have a story for you, courtesy of the Chicago Tribune. Better yet, this story is only one of a series of stories that the Tribune has written on the subject of zoning and land use in Chicago. I have yet to make my way through all of the stories, but based on my early readings, they will make for days of entertainment.

Some gentle readers will try to point that the real issue in these stories is that there was a housing bust that resulted from altering the zoning codes, but that is a red herring. The real story is that zoning does not do what zoning advocates say it does. Not only that, but since land use is far more greatly politicized via the enactment of a zoning ordinance, it creates an environment where politicians can extract economic rents, personal favors, and possibly personally get rich via changing ordinances for developers command large campaign contributions for getting elected and releected.

From the story above:

NEIGHBORHOODS FOR SALE: PART 8

House of cards emerges in zoning-change game

TRIBUNE ANALYSIS: Market collapse is aggravated by system where aldermen benefit from campaign donations from developers

Mayor Richard Daley has maintained the tradition of letting aldermen have the final say over what gets built in their wards. Almost half of the zoning changes approved by the council members are done despite opposition from City Hall's own planning staff.

In case after case, aldermen ignored neighbors' complaints as well as planners' warnings that proposed projects would be too dense or would not be consistent with the character of the neighborhoods.

On Harlem Avenue in the 36th Ward, a developer who has given the alderman $3,000 used a zoning change to put up a five-story condo complex despite objections from neighbors. Now the builder is trying to entice potential buyers by offering a year without condo association assessments.

A federal probe that dates to at least 2007 has expanded to include interest in a 2004 letter to Daley from U.S. Rep. Luis Gutierrez (D-Chicago). Gutierrez lobbied the mayor on behalf of a zoning change for a developer who lent him $200,000 for a separate real estate deal. The congressman said he did nothing improper.

So the Congressman didn't do anything improper? Really?

Continued...

The real zoning code in Chicago is unwritten, but developers know it well: Changes in zoning go hand in hand with contributions to aldermanic campaigns.

The investigation found that Chicago is a city where a building boom greased by millions of dollars in political donations to aldermen has remade the face of neighborhoods, changing the feel of the streets where people live and work.

It's a city where aldermen have become dependent on the political contributions they rake in from developers, while routinely ignoring city planners who oppose out-of-scale development.

It's a city where the council rubber stamps aldermen's wishes -- rejecting just 15 requested zoning changes in a decade -- and where almost half the zoning changes were concentrated in 10 of the city's 50 wards that are exploding with growth.

And it's a city where advisory groups that review zoning proposals are sometimes stacked with developers and real estate agents who will profit from the projects.

This practice of "aldermanic prerogative" creates a political spoils system where cash and clout trump the public planning process employed in many other major American cities. The result is a patchwork approach to development, where the fate of any zoning change is decided long before it is ever discussed publicly by the council's Zoning Committee.

The decisions made in ward offices and rubber stamped in City Hall are driving the transformation of Chicago, making neighborhoods unrecognizable to people who have tended their homes and yards there for decades.

Although she's no city planner, Alice Sopala poses the same question planners ask. "Why bother zoning an area if you will totally disregard it whenever the alderman says it's OK?" she said.

...

"Zoning in Chicago is driven by real estate developers," said Ryan, a former New York city planner. "There really isn't any plan in Chicago. You have very few neighborhoods that are safe from overdevelopment."

Of course, one may ask what is meant by the term overdevelopment. Read the rest and weep. One of the benefits of the non-zoned real estate market in Houston is that residents and developers do not have to face the threat of having rents extracted from them from City Council members. One secret that politicians know that the public does not is that there are economies of scale to be reaped from indulging in corruption. Just ask Illinois governor Rod Blagojevich.

Lastly, as noted in my previous blog posting, my parent's neighborhood in Spring Branch has been undergoing redevelopment over the past 4 years. Nobody there has been complaining about the neighborhood going upscale or complaining that the neighborhood is loosing its character. Meanwhile, the fact that the neighborhood is going upscale means that the City and County are raking in more in property taxes. That is a true marketplace in action.

And by the way, I really am a nice guy, ergo have a Happy New Year!

Wizard

Posted by The Mighty Wizard at 02:05 PM
This entry was posted in the following categories: America , Because they can , Houston and Texas matters

September 28, 2008

The subprime mortgage mess - explained

The Wizard admits that he is belatedly trying to wrap his mind around the staggering news that President Bush is trying to browbeat Congress into approving a whopping $700 billion to bail out Wall Street.

With that in mind, I present to the public a Microsoft power point presentation that should help explain to the viewer in easy terms how Wall Street and the financial community at large got itself into the sub prime mortgage mess in the first place. Note that the power point presentation is about 2.5mb in size, ergo it will take a minute or so to download, depending upon your Internet connection. Follow the usual power point instructions to go through the presentation; press the ESC button to get out and the up and down arrows to go forward and backwards in the presentation.

I get a laugh every time I go through it and laughs are few and far between these days.

Enjoy!

Wizard

Posted by The Mighty Wizard at 09:00 PM
This entry was posted in the following categories: America , Because they can , Money and finance

August 03, 2008

My neighbor's electric car

The Wizard's world has many secrets. Unfortunately, one of those secrets was blown this past week, once again by Wall Street Journal, which recently featured a friend of the Wizard who is in a beach front property rights battle down in Surfside. This time, my secret that was compromised is that one of my neighbors drives an electric car. He was featured in a Journal story entitled "You Know Gas Prices are high when Texans start driving golf carts", carried in the July 31, 2008 issue of the Journal and which can be read here.

My neighbor featured in the story, Andrew Kunev, actually lives in the part of our compound next to mine. He's been here for some time now and I pass by his three wheeler, white colored Zap Zebra Sedan, parked just inside our compound gate nearly everyday. The car always has a bit of an unbalanced look to it, which would cause me never to consider buying a Zap, but I've never seen any performance problems whenever I've seen him on the road. I saw him zooming eastbound along Westheimer last Friday evening as I was coming home from work. Mr. Kunev can be seen at 1 minutes 3 seconds, 1 minute 40 seconds, and 2 minutes 12 seconds in the Journal's online video, which accompanies the story.

Another encounter I have had recently is that I have seeing a teenager in the neighborhood north of where I live driving around on an electric scooter while I run workouts. He goes pretty fast down the street - probably 20 miles per hour - but the scooter makes a lot of noise. Nonetheless, he told me once while stopped at an intersection that he was coming back from the grocery store, something obvious from the fact that he was carrying two small bags in a backpack while on his scooter.

These stories have got me all pumped up about the idea of owning my own electric car, possibly as a project. Many years ago, I owned a green colored Volkswagen Rabbit convertible, much like this one. One idea I have is to go look online for an old VW convertible and convert it into an electric car. I love convertibles and am starting to hanker for another one. I spotted one website actually sells custom converter kits for doing it. Here are some photos of cars whose owners have done the job. Another idea would be to convert my current car into an electric car and buy another gas powered one.

The Wizard doesn't drive all that much, ergo I sorely doubt that on most days I would tax the capacities of an all electric car. My job and most amenities are within easy driving range of an all electric vehicle. I would probably keep a gasoline powered one for longer trips.

The Wizard believes that General Motors is making a mistake with the Chevrolet Volt, that being that at first GM was telling the public that the Volt would be in the $15-20,000 range. Then we heard that the Volt would run $30,000 - $35,000, but now we are hearing that the Volt might retail at $40,000. $40,000 is rather steep for most families.

The Wizard thinks that what Mr's Peters and Kunev are the ones on the right track. Their vehicles cost only $7,000 - $18,000. The main worries are how well the batteries will hold up over time (and when they will need to be changed), along with inclement weather and safety issues.

Still, this is low cost, non-gasoline dependent mobility, which can scale and which is within the price range of most developed economy families right now. I know from much travel and experience that motorcycles and scooters are a heavily used form of transportation in Malaysia and Thailand, where annual incomes are in the $200 - $5,000 range, much lower than those found in the West. Familiarity, along with preferences and tastes will count for much, but the Wizard thinks that solutions like this may be a realistic part of our mobility future.

Wizard.

Posted by The Mighty Wizard at 04:22 AM
This entry was posted in the following categories: America , The World at Large , Transportation

July 18, 2008

The Surfside beach front property rights battle

On June 17, 2008, National Public Radio picked up on a property rights battle, previously covered by the Wall Street Journal, involving a friend of the Wizard named Brooks Porter. Brooks, along with his wife Merry, own a beach front property in Surfside Texas, near Freeport, which they have held for 25 years.

As the NPR story relates, the Porters purchased the house as a rental and occasional weekend beach house. The problem is that over the past 25 years, the Gulf of Mexico has eroded the local beach heads dozens of feet, sweeping grasses and dunes with it. The Porters, along with some other locals, now have housing that sits just yards away from the shoreline. That in turn puts them on the beach which is in violation of the Texas Open Beaches Act, which states that the beach is effectively a park.

Brooks told me a while back that the problem is that the beach erosion is not entirely a natural phenomenon, due to acts from the Army Corps of Engineers and other entities. He and the wife intend to stay put.

As the NPR story correctly concludes, this is a big looming problem. To quote NPR:

How this case gets resolved could set a precedent far beyond Texas. What if rising seas threaten one day to swamp skyscrapers in Manhattan or entire towns in Florida? Whose responsibility will it be to move buildings out of the way? Who will take the hit for the lost property value?

Mr. and Mrs. Porter have fought this battle for 10 years now. Stay tuned.

Sigh...

Wizard.

Posted by The Mighty Wizard at 12:25 AM
This entry was posted in the following categories: America , Because they can , Houston and Texas matters

February 17, 2008

Where rail really works and what the Interstate system did for America.

On February 13, 2008, the Wall Street Journal published a fascinating story on a largely unnoticed revolution going on in American transportation. American railroads are, for the first time in a century, making massive new investments in their infrastructure. Better yet, not one dime of the $10 billion (with $12 billion more planned) is coming from public coffers. From the story:

For the first time in nearly a century, railroads are making large investments in their networks -- adding sets of tracks, straightening curves that force engines to slow and expanding tunnels for bigger trains. Their campaign is altering the corridors of American commerce, more so than any other development since interstate highways spread to the interior.

The story goes on to say that this burst of new private development of railroads has been driven by a massive burst of finished consumer goods coming in from Asia. These goods add to the usual cargo that freight rail carries, such as coal, grain, and chemicals. Compare all of this to the slovenly inefficiencies of Amtrack or light rail inner city transit. Moving goods is cheap. Moving people - at least in the economically affluent part of the world - is expensive.

This development, the story goes on to say, is generating development along the pathway of the railroads, but the development is primarily commercial in nature. Also, the railroads and freight trucks complement each other, where trucking companies find that sometimes they can ship goods long haul over rail rather than doing it over the Interstates.

And speaking of the Interstates, I was reading a story in this weeks' issue of The Economist of China's massive spending on transportation projects. The print edition carries a side story on the effects that America's Interstate Highway system had on productivity while it was being built. The Interstates were initially estimated to take 12 years to build at a cost of $25 billion. At the end, it took 37 years and cost (in 2006 dollars) $425 billion.

Question: Was it worth it? According to Ishaq Nadiri and Theo Manuneas, yes it was. America went through its greatest and most long lasting economic boom during its history after WWII and the Interstates had quite a bit to do with raising that productivity and making America a vastly wealthier country. Broadly speaking, Nadiri and Manuneas say that the greatest gains were reaped early on in the program and declined slowly as time went forward. The gains of the late 1950's were 31 percent of America's economic productivity growth, 25 percent by the late 1960's, and down to 7 percent by the late 1980's as more money was spent on road maintenance. One out of every five dollars was also being siphoned away from road building to build rail transit and bike paths. Freight costs in 32 of 35 industries dropped by an average of 24 cents for every dollar spent on the system.

Could something similar to the Interstates been done privately? The Interstates had incorporated into them some 14,000 miles of toll roads, mostly in the Northeast. Conceivably, a far seeing Governor and Legislature in some states could have launched state wide initiatives using toll roads, but it would have taken multi state cooperation to achieve a similar result to the Interstates. As it is, now that the Interstate system is complete, I wonder whether it would not be such a bad thing to turn most of it over to the states and either curb or shutdown collection of the federal gasoline tax the way that the Republican Congress of 1994 wanted to do? Entertaining ideas.

Wizard

Posted by The Mighty Wizard at 06:06 PM
This entry was posted in the following categories: America , Money and finance , Transportation

February 05, 2008

The benefits of Boston's $15 billion Big Dig

I received the following email today. I will share it in its entirety, the only comment being that the Los Angeles MTA has spent $11 billion (inflation adjusted) on rail transit since 1985, only to achieve the same number of boardings it achieved 22 years ago.

Wizard.

.................................................................................

Riding the Silver Line bus rapid transit from Boston Logan Airport into downtown Boston last weekend via a Big Dig tunnel -- a quick ride, on a bus with luggage racks -- got me looking at the transportation performance of the Big Dig project.

Answer, from recent professional presentations: enormous reductions in traffic congestion. Apparently, the traffic engineering in the new tunnels eliminates weaving and bottlenecks. T-Ops is working 24 X 7 with cameras and other sensors. b> The bottom line number is 62% improvement in traffic flow.

See recent illustrated document attached in pdf, an end-of-year edition of Peter Samuels' Toll Roads News - found here.

There is a Powerpoint presentation in PDF showing performance graphics by ITS engineer Dan Baxter from last October here.

Dan Baxter and Peter Samuels describe the financial mismanagement
as well.

For those who want more, there is lots of detail in this screen scrape of an article by the same Dan Baxter in Roads & Bridges magazine from June 2007.

Big believer

Despite setbacks, "Big Dig" potential benefits are stratospheric
- By Dan Baxter

This year marks the 25th anniversary of Boston's Central Artery/ Tunnel project, nicknamed the "Big Dig." Records of project planning activity date all the way back to 1982, and as of 2007 all sections of the project are now open to traffic.

More than $14.6 billion has been expended, and recent projections put completion closer to $15 billion. As with all highway projects, the Big Dig journey passed through planning to design, then on to construction and finally into operations and maintenance. The similarities with other highway projects stop there. The Big Dig has been unique in many ways, not all positive, including unparalleled cost escalations and highly publicized construction problems. Prior to completion, the only positive news has been a few construction achievements well known in the industry and the management of traffic during construction. New measurements and projections of project benefits are now available and an assessment of the true value of the project is possible. Even if the project does eventually achieve its original goals, will the highway construction industry ever see another mega project like the Big Dig? If there is another mega project with the scope and cost of the Big Dig, will it be managed differently based upon lessons learned? Looking back at the Big Dig, what really went wrong and what really went right?

True to traffic

With the final cosmetic touches now being put on the largest mega project in U.S. history, it is now possible for the first time to speculate how history will judge the project. As with every human endeavor, nothing is in reality a total success or a total failure. A Big Dig scorecard needs to consider costs, schedule, quality of construction and tangible benefits to the public. At a staggering $14.6 billion for 7.5 centerline miles of highway, the cost of the project is over $300,000 per inch. At that rate, achieving a positive benefit-to-cost ratio for the project will require unprecedented benefits. However, the facts emerging show the numbers may be closer than you might think.

The Big Dig has had more ups and downs than the numerous ramps that drop from the surface into the labyrinth of new subterranean highways. The most recent blow to the project came in August 2006 when a fatal accident resulting from a ceiling failure became the latest in a series of project problems to make national headlines.

Although it has been consistently maligned in its hometown newspaper, the news from the Big Dig is not all bad. Some monumental construction challenges have been met and mastered, including the soil freezing and tunnel jacking required to complete the I-90 extension to the new Ted Williams Tunnel. Now that the facilities are fully open to traffic, it is clear that the excessive daily traffic congestion and related air pollution that once gripped downtown Boston has been substantially reduced. A large portion of the vehicle delay disappeared with the giant concrete and steel elevated freeway that for two score years blackened the fourth-story windows of adjacent Boston buildings.

When it comes to traffic, the promise of the project planners to vastly improve traffic flow was kept, and even exceeded. A popular sound bite used by project critics during the design phase was "it will be obsolete the day it opens." Traffic data collected and compared with "before" conditions have proven the critics who voiced that position wrong. Dramatic reductions in travel time and increases in traffic flow have now been documented in a new study recently published by the Massachusetts Turnpike Authority (MTA). The study was conducted independently of the Big Dig construction management consultants. The study, titled Economic Impacts of the Massachusetts Turnpike Authority and the Central Artery/Third Harbor Tunnel Project, performed by the Boston-based international transportation and economics consulting group EDR, stated that "the original 1990 environmental projection was that the `Big Dig' would improve traffic flow by 40% by 2010. Today, the project exceeds that with a 62% improvement in traffic flow. This was accomplished while overall traffic volume grew by 23.5% since 1995."

Improved traffic flow is only one part of the picture. New public parks, reconnected neighborhoods, revitalized commercial activity and an aesthetic face-lift unparalleled in American municipal history have prepared Bostonians for a brighter socioeconomic future.The Rose Kennedy Greenway and the Zakim Bunker Hill Bridge will transform the path of the old Central Artery into an extraordinarily beautiful stretch of parkland crisscrossed by sidewalks and streets that reconnect the city to its waterfront. The bustling crowd of locals and tourists that can be seen every day walking about at the Faneuil Hall Marketplace will soon be able to stroll farther east through the R.K. Greenway to parks like Christopher Columbus Park that sit at the bay's edge. Dramatic increases in the value of downtown, South Boston and Seaport District real estate have been realized and are projected to soar with the completion of the greenway. As spectacular as the traffic improvements and urban area transformations may be, they are not sensational enough to capture national headlines. The Big Dig's unexposed benefits are every bit as real as the costs and problems so readily exposed by the broadcast media.

Sign from above

In spite of the realization of the key kept promises, the Big Dig is as beleaguered as ever, and new fears about structural integrity have eroded the public's perception of the project into a mired mess of mixed reviews.

After enduring more than a decade of political firestorms and media bashings, the past two years has seen a series of successful and meaningful ribbon cuttings. The opening of new tunnel sections and connector ramps, the world's widest cable-stayed bridge and numerous public parks only temporarily lifted the spirits of the remaining project partisans. Those spirits must certainly have fallen again with the concrete ceiling panel that killed a motorist last year. The tragedy started a new series of searing public commentary and politically charged lawsuits.

In the days following the disaster, Massachusetts Gov. Mitt Romney "knee-jerked," went on the offensive and publicly questioned the safety of the tunnels. As the top elected state official, his lack of confidence prematurely trumped lesser bureaucrats who were responsible for determining the actual cause of failure and dealing with the problems. The reaction was predictable if not understandable as the Big Dig has always been an easy target for criticism. Defending the Big Dig project in the light of this catastrophe might appear to be political suicide in the short term. However, joining the ranks of critics may erode long-term credibility when it is time to take credit for the benefits.

The accident that killed Milena Delvalle of Boston's Jamaica Plain was caused by the failure of an epoxy-based anchoring system that held a large concrete ceiling panel in place. Reports from the scene indicated that there was no evidence of epoxy on some of the anchors that were lying in the debris on the road. A cursory search of public project records reveals that ceiling panel installation methods have been the subject of claims and changes and formed the basis of a value-engineering effort managed by the management consultant, a joint venture of Bechtel and Parsons Brinckerhoff. The causes of the failure have been reported to be a deadly mix of poor workmanship, flawed inspection and questionable decisions by project management that ultimately reduced the factor of safety to save time and money.

The investigation found that the failed anchors were among the first to be installed using the epoxy method, with the implication not that the oldest anchors failed first, but that the first anchors were installed by crews inexperienced with the method. Although there is no way to prevent motorists from having accidents due to human error, there is no excuse for a purely structural failure due to nothing more than the weight of an element under normal stress conditions.

As each month goes by absent of more failures, the August 2006 tragedy looks more and more like an isolated problem. People in the construction industry know that history is peppered with tunnel collapses. Less than a month after the Boston accident, a highway tunnel linking the cities of Guangnan and Yanshan collapsed in southwestern China, trapping 25 workers. Unfortunately, like so many other "firsts," the Big Dig is the site of the only highway tunnel collapse in memory to occur shortly after the tunnel was opened to traffic.

Structural failures over the past two years provide a roadmap to the No. 1 thing that has gone wrong with the Big Dig. Since project inception, the highly privatized program management of the project has had amazingly minimal public-agency oversight, placing the true power of the purse strings and key day-to-day decision making in the hands of the management consultant.

Highway construction projects a fraction of the size of the Big Dig have had twice as many public-sector managers. Privatization itself is not the problem, because without privatization mega projects are not possible. The problem ensues when the privatized management is forced to operate outside their realm and role in order to fill a vacuum. When construction problems occurred, Boston political adversaries and the media have had the upper hand over the Big Dig management consultant, which is constrained both by its position as a private firm and its responsibility to deal in technical accuracy rather than shooting from the hip.

In the case of the tunnel leaks in 2004, the strong condemnation by the Boston Globe essentially went unanswered for six months. Six days is too long, much less six months. The Big Dig has needed both a political and a public-agency advocate empowered and motivated to respond quickly to quell the rush to judgment. Future mega projects need more than engineering and construction leadership. Advocacy in the ranks of the politically elected leaders and appointed agency heads must be cultivated and maintained to establish ongoing public confidence and accountability.

Money to move

The second thing that went wrong was the magnitude of the cost escalation. Some cost increases would be expected, but quadrupling costs point to either incompetence in estimating or intentional lowballing.

The reality of the Big Dig is that from the start, schedule compliance was favored over budget adherence. Management spent money to keep the project moving, knowing that failure to overcome obstacles in individual contracts would have a ripple effect throughout the project. In the mega project environment, the whole is split into many smaller parts that must fit together in both space and time. If one contractor's schedule slipped, several other contractors could claim a delay. Public-sector and political accountability also would have gone a long way to address the continuing issue of cost escalation. The decision to blame the management consultant for underestimating true project costs during project planning may have provided a convenient scapegoat to deflect political accountability. However, it also had the long-term detrimental effect of exposing the management consultant to media pressure to which it could not respond and eroding the public confidence in the privatized program management of the Big Dig.

When a technical problem occurs that rightly requires the management consultant's action, even their best efforts are met with skepticism. The lesson learned is that you can't have it both ways. If you use your program manager as a scapegoat in the media, you can't expect the public to accept your total reliance on him when problems arise.

Still glossy

The advocates of this project in the 1980s produced glossy brochures that focused primarily on elimination of the habitually congested elevated portion of I-93 in downtown Boston. One particularly powerful brochure was the "Now you see it, now you don't" piece that included a photo of the jammed Central Artery on the cover and an artist's rendering of a new park-like setting in the same location. The primary benefits described in detail were transportation related, and the secondary benefits described much more vaguely had to do with reconnecting neighborhoods" and creating new green space for Bostonians to enjoy. It is now possible to compare the promises of the project's visionaries with the realities of the as-built project.

A justification for the project was certainly that operation of the existing highway had become unacceptable by any standard. The 14-hour-long peak hour average speeds on the elevated Central Artery had dipped into single digits, reflecting one of the worst operational conditions in the world. Due to the extremely poor existing conditions, the contrast between the before and after conditions is truly dramatic and helps to justify the cost of the project.

The astounding results of the EDR study show dramatic improvements in average speeds and delays. As an example, the daily average travel speed for the old Central Artery northbound was 10 mph; the Big Dig quadrupled it to 43 mph. The average speed for all harbor tunnels (the new Ted Williams Tunnel plus the existing Sumner and Callahan tunnels) nearly tripled from 13 mph to 36 mph. These unprecedented improvements in traffic flow have the combined effect of reducing the daily hours of vehicle delay on these facilities a whopping 66% from 38,088 daily hours of vehicle delay in 1995 to 12,834 in 2005 after the Big Dig opened. The delay reductions for some individual minor movements were mind-boggling, such as the notorious bottleneck between Storrow Drive eastbound and I-93 northbound that improved by 81%. This was the site of an apartment building with a sign that read "IF YOU LIVED HERE YOU'D BE HOME BY NOW." The Big Dig decreased the average travel time through this segment from 16 minutes to less than four minutes. This perpetual traffic jam was as much a Boston landmark as the Old North Church, and now it is essentially gone. All of these numbers were achieved in spite of a growth in overall traffic demand reflected in vehicle miles traveled (VMT) of 13% in the same period.

Where did the traffic go? The traffic volume is still there. It has even increased. It is the delay that was eliminated, and this was the vision of the project. The true genius of this mega project has always been not just the replacement of decaying infrastructure, but the amazingly efficient transportation connections that the new viaducts, bridges and tunnels create that speed traffic flow throughout the metropolitan Boston region.

The Big Dig is essentially America's largest interchange. With these connections, the whole metropolitan highway system operated by the MTA finally functions as a system, and reductions of demand on formerly bottlenecked facilities abound. Traffic is better throughout Boston, not just in the project limits.

The EDR study projects that "these improvements are now providing approximately $167 million annually in time and cost savings for travelers. This includes $24 million of savings in vehicle operating cost plus a value of $143 million of time savings. Slightly over half of that time-savings value ($73 million) is for work-related trips and can be viewed as a reduction in the costs of doing business in Boston." The study points out that the promise of the original 1990 project documents used for the environmental assessment projected that the Big Dig would improve traffic flow by 40% by 2010.

In light of these improvements, is it possible to consider the Big Dig a failure? Unfortunately, if traffic were the only benefit, the astronomical project cost would make the Big Dig investment questionable in comparison with a more traditional reconstruction. The traffic analysis portion of the EDR report claimed that the completed project provides annual savings of $177 million (2005
dollars) in operating costs and delay reductions for roadway users. Although these numbers are impressive, based on traffic benefits alone it would take 80 years to break even (not considering the cost of a traditional alternative). In order to evaluate the true benefits of the Big Dig, the economic effects on real estate also must be considered.

Positive square feet

The historically volatile economy of the greater metro Boston region now sits at the near side of a new economic boom that will be fueled by nothing more than the subterranean superhighway brought by the Big Dig. In real estate, location is everything, and the Big Dig is transforming industrial wasteland choked by congestion into easily accessible high-end real estate.

The Big Dig will create an estimated 16 to 21 million sq ft of new commercial and residential development in the South Boston Seaport District alone. The EDR study stated that real estate projects already developed or in construction and planning total 10 million sq ft of office and retail space, including nearly 8,000 new housing units, reflecting $7 billion in private investment made possible by the Big Dig. The increase in property value is estimated to bring in as much as $120,000 million per year of much-needed property tax revenue. Combined with the prospect of future increases to toll revenue, this boost should help the commonwealth maintain its investment provided the dollars are properly appropriated to maintaining the roadways.

Given the history of Boston and the value of the adjacent Back Bay area, a man-made residential and commercial gold mine created from the swampy marsh south of the Charles River, there is no doubt that the market forces needed to capitalize on the Big Dig investment are converging and will drive the project's true value into the stratosphere within the next 20 years. With the concrete and steel canyon of the Central Artery being replaced by the Rose Kennedy Greenway, a remarkably beautiful property value engine that will provide a 180° swing in the aesthetics of downtown Boston, the project planner's commitment to keeping the air rights publicly owned will pay off 10-fold.

Another clear winner from the Big Dig is Boston's Logan International Airport. After years of steadily losing passengers to expanding airports in New Hampshire and Rhode Island due to the untenable travel time in the existing access highways and tunnels, Logan will solidify its position as king of the New England airports. The EDR study reported that access to Logan "is now easier for an added 800,000 Massachusetts residents who with the full opening of the I-90 connector to the Ted Williams Tunnel, now live within 40 minutes of the airport. Today, 2.5 million residents live within 40 minutes of Logan International Airport."

The Big Dig also delivered a massive shot in the arm for the New England economy. The cost of the cubic yards of excavation, new concrete and steel do not add up to $14.6 billion. The difference was corporate profits and job income. The Big Dig created nearly 50,000 jobs in Boston. Over 50 engineering teams and over 125 contractors received valuable contracts. Although some Boston
families paid dearly for the privilege to work on the Big Dig, the worker safety record was good. The Hegarty family in Dorchester lost their father, John, the first worker killed on the project after six years of construction without a fatality. Given the complexity and size of the project, the overall safety record of the project was far above average and provided unusually safe and high-paying jobs.

Touching the nerve

Recently, I sat in the $200 million Operations Control Center talking with Jim Murphy of the MTA, the man who is responsible for day-to-day operation of the world's most expensive labyrinth of tunnels, freeways, viaducts and tollways. Murphy spoke with sincerity in a serious tone about his job managing the facilities. He dodged no questions, admitting a few shortcomings of the project, but at the same time described the complexities and realities of this underground superhighway in a matter of fact way.

It may be hard for some to admit it, but the project worked. The Big Dig did what it was supposed to do, what it was promised to do. All the critics who lined up to say it would fail were wrong. The criticism of project cost escalations was justified, but the total value of the project to Boston will continue to exceed expectations. In an era when spending on a foreign war can be $2 billion per week, the cost of the Big Dig could be expended in eight weeks.

Baxter is North American ITS Director for Stantec.

Source: Roads & Bridges June 2007 Volume: 45 Number: 6
Copyright © 2008 Scranton Gillette Communications


Final notes:

Speaking as one who often experienced Central Artery congestion in the 1970s as a part-time Boston resident, it's an impressive, albeit expensive human achievement. There was a 2006 journalistic celebration of the achievement as a reversal of urban renewal destruction in the Washington Post at

http://www.washingtonpost.com/wp-dyn/content/article/2006/08/04/
AR2006080401755.html

http://www.masspike.com/traffic_cameras/trafficcams.html

provides streaming live video of traffic in central Boston.

Posted by The Mighty Wizard at 06:31 PM
This entry was posted in the following categories: America , Houston and Texas matters , Science and Engineering , Transportation

January 06, 2008

$100 per barrel oil and the U.S. Peso Dollar

The front page story on today's Houston Chronicle bespoke of the travails of $100 per barrel petroleum to modern day society. It was a good article, underlying the fact that the oil and gas industry does not waste one drop of a barrel of petroleum, but instead finds a way to use all of it. I write here because there was one aspect of the price rise of petroleum in recent years that was not covered by the story and that is the weakening of the United States dollar as a currency. This matters because petroleum is denominated in U.S. dollars when it is traded on world markets.

To give gentle readers a sample of how much the U.S. dollar has weakened in value over the past 5 years, I point you in the direction of the excellent Yahoo Finance and world currency website. What is really great about the Yahoo finance pages is that a reader can easily compare how the dollar has fared in world currency markets and what effect this can have on tradable goods.

Examples of how much the dollar has weakened include:

1) The dollar verses the euro. The dollar has gone from being worth 1.20 euros in 1999 to 0.96 euros in January 2003, all the way down to a petty 0.678 euros in January 2008. Put it another way, the euro was worth some 85 cents when it was created. Now a euro is worth about $1.50. The dollar has effectively lost some 44 percent of all of its value against the euro in the past 9 years.

2) The dollar verses the Brazilian real. I went to Brazil in 2003 on vacation. The real, (pronounced "hey ais"), was trading at 2.8 to 1 dollar when I went there. As one can see from the chart, the real has gone from 3.5 reals to 1 dollar in January 2003 to 1.76 reals to 1 dollar in January 2008. That's right folks. The Brazilians, who possessed currencies which suffered massive hyperinflation during long stretches of the 20th century, are now in possession of a currency which has doubled in value against the dollar in the past 5 years.

3) The Canadian dollar verses the U.S. dollar. The loonie has gained 1:1 parity on the dollar for the first time in some 30-40 years, having been worth only 64 cents in January 2003. So the loonie has also gained 55 percent in value against the dollar.

4) The U.K. pound verses the U.S. dollar. When I first went to the U.K. on holiday in May 2002, the Queen's money was worth $1.50. Now the pound, which hit $2 earlier this year, is just under, currently trading at $1.97. The dollar has lost 30 percent of its value against the pound in the past 5 1/2 years.

5) The Thai baht verses the dollar. The baht was trading at 43 to the dollar in January 2003, but now it only takes 30 baht to buy a George Washington note. The dollar has slid some 31 percent in value against the baht in the past 5 years.

6) The Russian rouble has gone from 32 to the dollar in January 2003 to 25 to the dollar in January 2008.

But then we compare these numbers against some of America's big trading partners, including Mexico, Japan, and China.

7) The Mexican peso has held steady against the dollar, losing only 8 percent of its value since January 2003.

8) The Japanese yen continues to bounce around the 110-120 yen to the dollar mark, a range it has done with some exception of the endaka period of the Clinton years.

9) Even the Chinese yuan, which traded at 5.2 to the dollar when I was in China, and which was revalued at 8.28 o the dollar in the 1990's, has been gaining strength and is now at 7.4 to the dollar.

As is well known, the Asian and Middle Eastern countries have routinely purchased untold amounts of U.S. Treasuries, both to help buoy their own currencies so as to continue to be able to sell something to America on terms helpful to themselves, and as a hedge in case markets lose faith in their own currencies. They also need a place in which to invest which is relatively safe and where their money will be put to productive use. They find all of these when they buy American treasury notes. In contrast, countries which have done little to interfere with currency markets have seen their currencies strengthen considerably against the dollar.

The Wizard thinks that what we are seeing is a long slow correction in the world's terms of trade with America. The United States has been running astronomically large current account deficits for 25 years now, and we have run up trillions of dollars of debts on our federal treasuries. Americans have essentially stopped saving money. Moreover, we will see in the next decade the retirement of the Baby Boomers en masse, which will per force require the United States to either raise taxes to meet the political demands of the Baby Boomer cohort retirements, cut their benefits, or continue to let things stay as they are and run up deficits and inflate them away through a punitive devaluation of the U.S. dollar.

The logical conclusion here is that world currency markets have spoken and have decided that the United States will not put its financial house in order, hence world markets will force America to put its house in order via the devaluation of the dollar. This of course revalues the terms of trade in all tradable foreign goods. As the Chronicle article notes, Americans will find foreign travel much more expensive, but we know that petroleum is also one of those traded goods. The Wizard postulates that had the dollar retained its strength, then we would be seeing oil prices at $60-$70 per barrel and not $100. That of course still means that the price of a barrel of oil has gone up 2-3 times since 2000, but that is different from a 5 fold increase in prices. What is interesting though is that a continuing slide in the value of the dollar would presumably improve terms of trade vis-a-vis the rest of the world, but it would also continue to push up the cost of petroleum imports which in turn would offset the improvements of the balance of America's terms of trade.

It is hard to tell how much of a correction would be required for America to come back to an equilibrium. The Wizard supposes that the Chinese, Japanese, and the Middle Eastern countries would need to be convinced that the dollar would continue to erode in value to the point where they would quit buying them. That in turn would send the dollar into a fully corrective tailspin. Maybe the dollar needs to lose another 50-75 percent of its value, on top of what it has lost already, before our current accounts finally balance out once again. On the bright side, manufacturing and other aspects of the economy which are not stuck in country would find it more preferrable to stay in America rather than to flee offshore. Jobs would be more likely to stay in country, indeed some of them might come back here.

As for what that would do to the price of a barrel of oil? Well, are you prepared for oil selling at $200 - $300 per barrel? Hold on to your seat folks. That would be a great reason for those jobs to come back here if we see prices like that. Prices like that also might finally make alternatives like cellulose ethanol a viable competitor to conventional petroleum. Hmmm. Now is that another reason why those Middle Eastern governments buy up our treasury bills? Think about it.

Wizard

Posted by The Mighty Wizard at 06:53 PM
This entry was posted in the following categories: America , Money and finance , The World at Large

December 29, 2007

Automobiles: Houston's Unnoticed Revolution

Yesterday afternoon found the Wizard rearranging portions of his vast personal library of books when I stumbled across a book which I have not read in some 10 years: Marguerite Johnston's Houston the Unknown City, 1836 - 1946. In the Wizard's view, Ms. Johnston's history book is really more of a collection of journalistic accounts of Houston's early history, but all authors have their individual writing styles so you take what you can and go with the flow.

Today's epistle is a brief encapsulation of chapter 28 of Ms. Johnston's tome, which she entitled Automobiles, an Unnoticed Revolution. Packed in those six and one half pages are early accounts of what the world was like when automobiles were entirely new.

Ms. Johnston repeats an observation which Robert Bruegmann wrote in Sprawl, namely that motorized automobiles and trucks did not replace rail. What automobiles replaced were horse drawn transport. To quote Ms. Johnston:

In 1900, horse-drawn carriages, mule-drawn wagons, and electric streetcars were all anyone could need for transportation. Automobiles came into Houston as a sport, and an athletic and adventurous one at that. Nobody predicted that within twenty years, automobiles and horses would have traded places - the car to be driven for daily transportation and the horse to be ridden on fine mornings as exercise for Houston ladies and gentlemen. Very few foresaw that these would swell in number to provide a new use for the oil gushing up out of the ground at Spindletop.

Ms. Johnston wrote that the automobile age began quietly, a vehicle acquired here and there. She writes that by December 21, 1901, the Houston Chronicle was able to write that :

Automobiles have come to Houston... For more than a months now these agile, swift-moving steam machines have been dashing back and forth over the downtown streets.

Our socialite author then goes on to tell her readers that horse livery stables and blacksmith shops all over Houston stood ready to rescue horse drawn vehicles with broken axles or horses who had lost their shoes, but that nothing of the sort existed for these new fangled vehicles. Indeed part of what made all of this so amazing was that in the beginning there was no supporting infrastructure for motorized transportation.

Ms. Johnston tells of how C.L.Bering made a cross country trip in a car in 1903 and was cheered in every town he passed through. April 1, 1903 (appropriately) saw the first record of a Houstonian getting ticketed and fined $10 for "fast driving down Main Street." By 1906, Houston had 80 automobiles. On June 21, 1909, the Houston Chronicle reported that:

The first local party of automobilists to successfully make a trip from Houston to Galveston and return in a single day made the run on Sunday, leaving here at 6 o'clock in the morning... returning ... about 9 o'clock in the evening."

She then goes on to describe how such country trips were no mean feat, due to the fact that the roads were usually dirt ones, with wheel ruts, no maps, and no signposts. The trip to Austin involved trips opening gates through private property! Ms. Johnston writes of Julian Huxley (yes, that Julian Huxley!), who at the time was teaching at the Rice Institute. Mr. Huxley bought a Model T for 100 pounds ($5,400 - $10,700 in 2006 dollars) when he was in Texas and later wrote of it:

It was a gallant little machine which I could drive across the prairies. In the winter vacation, I drove with a colleague in my new car to see Stark Young, professor of comparative literature at the State University at Austin...

This important route from Houston to Austin soon turned into a dirt road, so bad that at one swampy place I had to turn off into a field.

Ms. Johnston' goes on to write that Dr. Huxley got stuck in the mud on that hapless trip.

From 1906 to 1910, the number of licensed automobile owners in Houston increased 10 times. From 1910 to 1913, the number increased another 5 times on top of that. There were 4,143 autos in Houston by 1913. Ms. Johnston wrote that cars were starting to replace carriage horses in the stable at the back of the property. She wrote that saddle horses held out for another two decades.

Modes of death changed. Deaths incurred from runaway horses, animal bites, and diseases were replaced by automobile accidents. Amongst Houston's early fatalities was nine year old LaRue Sachs, who was killed by a motorist. La Rue Street, located off of West Dallas near Waugh Drive, is named after her.

Ms. Johnston goes on to describe what it was like to actually operate and ride in early automobiles, saying that glass windows and the hard top and not yet come. Dusters and goggles were part of the driver's uniform. The ladies wore scarves over their hats to counter the stiff breeze from traveling 30-40 miles per hour. Lap robes were common. Other perils awaiting those intrepid new car buyers included flat tires which were commonplace. Patching holes in inner tubes was a skill that many young men of the era learned fairly quickly.

The crankshafts were located in front under the radiators. Turning them often required an adult male's physical strength and it was harder to turn them over in winter time. Some covered the hoods of their cars with blankets or lap robes to keep the lubricants from congealing. On some really cold mornings, motorists would light up charcoal heaters under radiators.

Electric cars were out and about, competing with the gasoline powered ones. Some well known figures in Houston like Mrs. Albert Bath and Mrs. Will Clayton drove electric cars, where Ms. Johnston notes that these vehicles needed to be plugged in and recharged after daily runs.

Running boards were another frequent feature of cars of the era, noting that children and young people would sometimes hang on to them for short trips. Running boards were done away with as newer cars were designed with more streamlining.

Then one day, a fellow named George Hawkins decided to build a garage attached directly to his house. He persuaded developers to push 10 1/2 Street through to his driveway. More of that was to follow.

Ms. Johnston's chapter is a great read. She does not, however, discuss observations such as that motorized transportation use is strongly positively correlated with incomes, and that accordingly the adoption of automobiles had much to do with rising incomes and living standards. However her writings do give insight as to how much trouble people were willing to put up with in those early days towards operating an automobile. In fact one could make the observation that the hassles our ancestors faced in operating motorized transportation were merely a tradeoff and may have been less than the hassles they faced in the upkeep of horses and wagons. Her work also shows that the people of that era created an entire operating infrastructure for automobiles within a manner of a few decades, something that should put to sleep any worries about the future of having to arrange a new infrastructure to support ethanol fuels from cellulose (ethanol absorbs water), or having to produce electricity from hundreds or thousands of square miles of solar panels or wind turbines. When it makes economic sense to do so, then those innovations will come.

Wizard

Posted by The Mighty Wizard at 03:48 PM
This entry was posted in the following categories: America , Houston and Texas matters , Science and Engineering , Transportation

December 16, 2007

HPRA member makes the Wall Street Journal

This past Wednesday, December 12, 2007, HPRA member Brooks Porter was featured in the Wall Street Journal in a story entitled Whose Beach Is This Anyway? Now we humble property rights advocates here in Houston have to deal with the fact that one of our members is world famous!

Amusement aside, as can be read from the story, Mr. Brooks and his staunch hold out neighbors have been fighting a property rights battle for some years now. At stake is the fact that Mr. Brooks purchased a pair of beach houses 25 years ago, but over time the Gulf of Mexico has slowly eroded away the beach at a rate of several feet per year. Now their homes lie within the vegetation line, ergo they are on the beach which is open access as per the 1959 Texas Open Beaches Act. Some of the holdouts basically want the State of Texas to buy them out, while others absolutely refuse to move at all. They say that State action to move the Brazos River has altered water flows which have greatly hastened beach erosion. Meanwhile, the Open Beaches Act apparently makes little provision for issues like beach erosion.

But as one might expect about the political classes, the Great State of Texas isn't about to pay up for a fully valued condemnation, something I have often discovered is the case when governments face the prospect of having to actually pay for swiping things away from people. As can be denoted from the story, the State is willing to pay money for relocation costs only.

Needlessly making life annoying for the beach home owners is the fact that the Texas Surf Riders Association asked (and was allowed) to join the suit on the side of the State. It seems the Surf Riders group has done rather well for itself over the years suing various property groups. The accompanying film shows a member of the Surf Riders complaining about rebar and septic tanks left on the beaches, but rebar was put in place by villages and those septic tanks could be found from anywhere and put on the beach for dramatic purposes.

Moreover, I have an incredibly hard time understanding how it is that the Surf Riders would get wound up by this. Unless the homeowners would actually try to define away the entire beach as their own property (something not talked about in the story), then as an interested bystander, it seems to me that both groups could co-exist. The homeowners could get their homes, while the Surf Riders and beach goers get their beach access. What's the problem?

As an advocate of property rights, I have a hard time understanding how the State cannot cough up money for a full condemnation buyout of some of the hold outs who may accept a full buyout offer. If the Act also makes little provision for erosion (and I have to admit I have not read the Act while writing this), then the issue needs to be sorely revisited before more people get caught up in problems like this.

Then there's a philosophical issue that certain groups say that property rights are defined and granted by society to members of that society. If that is the case, then I ask such people a rhetorical question. That would be that if property rights are bestowed by some act of noblesse oblige by society, then it would seem that property rights can be swiped away by society by effectively defining them away, can they not? That indeed is what is going on here and in every place where zoning is in effect.

Wizard

Posted by The Mighty Wizard at 10:23 PM
This entry was posted in the following categories: America , Because they can , Houston and Texas matters

December 07, 2007

MetroRail: The $4.7 billion limousine?

Oh my goodness! Even the Wizard didn't foresee this bolt from out of the blue cast by Tory. $1.8 billion for a 14 mile light rail line? $130 million per mile for light rail? Richmond and Wheeler costing $1.3 billion?

Just this past week I wrote about Metro's $3 billion limousine. Now, 30 miles at $130 million per mile is $3.9 billion. Add in the $520 million Main Street train and the $300 million Intermodal temple and you have a $4.7 billion limousine. I tried to show an argument that Metro could afford to field 500 buses on the road for a $3 billion limousine. Now the opportunity costs of the rail build out would mean we could probably operate 800 - 1,000 new buses everyday out on the road instead of 500. Instead, we have 18 rail cars on Main and Frank Wilson wants to buy another 100.

Folks, this is nothing short of a disaster! For American cities that were built in the age of the automobile, we need to completely reorient our public transportation tax dollars towards building up massive investment trusts for operations purposes - which would be inviolate and could not be touched by elected officials - and get them completely away from flashy transit monuments. Leave the massive capital spending for New York's subways and maybe Chicago. As described in my previous post, at a $4.7 billion we could acquire and operate 5 or more times as many additional buses out on the road as rail cars - indeed we could completely bury all of Metro's five rail lines with two times as many additional buses as rail cars - and still have some 400 or more new buses left over for the entire rest of the City. This would cut down wait times everywhere, give us a vastly more nimble transit system that would serve the entire city, rather than have a few dozen miles of trains going nowhere near where I need to go and a shriveled, truncated bus system which serves no other purpose other than to feed a greedy and rigid set of trains.

Friday, December 7, 2007, will be a day which will live in Houston Transit Infamy. Yes gentle readers, there will be even more Fireballs, Lightning Bolts, and Hell Storms yet to come.

Addendum edit - December 8, 2007: The news came across last week about the FTA's decision to require Metro to resubmit documentation and allow public comments on the North and Southeast alignments. I don't care if you are all for railroading the city and for violating the property rights of the home and business owners along the corridors by stuffing them into 500 yard radial condemnation zones which will surround all of the train stations. As a taxpayer, you should be thankful for the FTA's decision to do this.

Wizard

Posted by The Mighty Wizard at 09:11 PM
This entry was posted in the following categories: America , Houston and Texas matters , Transportation

December 02, 2007

Chavez threatens America over oil

And so it has come across the news that South America's latest Caudillo, Hugo Chavez, is not pleased with the Venezuelan constitution which he himself wrote and is putting up for vote revisions. All this to push along his so called 21st century socialism, which of course is no different from the socialisms of the 19th and 20th centuries that succeeded - as the Wizard personally knows - in keeping billions of people throughout the world in dire poverty. Some people just never learn.

Today's epistle is about a specific aspect of the latest Chavez bombasts and threats - threatening to kneecap America by cutting off oil shipments in the event that America tries to intervene. In short order, such a threat will not work and the Wizard will tell his gentle readers exactly why.

As Daniel Yergin explains in his master work on the world oil and gas industry, The Prize, in the 1980's petroleum started being traded on world oil markets. Not all oil is created equal, as some petroleum from some places has lots of gunk in it like sulfur, metals, and other content in it which makes it more difficult to refine into useable products than other petroleum. The petroleum from Venezuela tends to be of the less desireable kind.

But the fact that Venezuelan crude is less desireable than petrol from other places doesn't mean it is not desireable at all. Indeed that's the whole point. Say for just a moment that Chavez make good with his promise to cut off oil exports to the United States. He needs to remember that in order to carry out his 19th and 20th century 21st century socialism, he needs oil revenues. As such, the country's fields need to continue to produce. There are supply schedules to follow and those schedules need buyers.

Now then, Chavez could try to command that the country's oil be sold to China or India, presuming that there would be enough buyers to use it. However, what would buyers do once their hands are on it? That is the problem is Chavez's threat. Petroleum is fungible and there is nothing preventing others from turning around and simply selling it to the United States at prices which are set by world oil markets. Indeed that is what happened to a large degree in the aftermath of the 1973 Arab oil embargo. Petroleum exports still eventually reached the U.S. through other countries, once the world's oil and gas industry figured out how to reconfigure the supply lines and shipping routes.

The real problem for America in 1973 was self created - namely that the Nixom Administration imposed price ceilings (price controls), which as every first year economics student learns, results in shortages in supply. Because prices were not allowed to rise, rationing had to occur somehow and that rationing came in the form of waiting in line for gasoline, with the entire country wasting time, money, and gasoline trying to get more gas.

And so gentle readers, Chavez's threat is little or nothing to worry about. If Chavez does not want to sell us oil, then some other corrupt government in some other heavily politicized (hence making it a disordered and disastrously run country) will.

Wizard

Posted by The Mighty Wizard at 05:47 PM
This entry was posted in the following categories: America , The World at Large , Transportation

November 25, 2007

MetroRail: The $3 billion limousine

So the other day, I found myself watching the local municipal channel and saw the hearings on the Metro board decision to railroad Richmond and Wheeler Avenues. This is part of the proposed 30.1 mile expansion of the current Main Street rail line, which itself cost $520 million and not the advertised $324 million (and of which Frank Wilson immediately asked for another $104 million to upgrade). The advertised price of the expansion is $2.2 billion, but other documentation I have in my possession (and of which I will write about below) states that another cost estimate will be $2.6 billion (including the estimated 300 million for the Northside Intermodal temple). Either way, for further purposes, I will go with the $3 billion for the 37.5 miles of rail since nearly all transportation infrastructure projects have cost overruns.

So what to make of all of this? The point of this article is to make some rough back of a napkin comparisons of what the opportunity costs of spending $3 billion on 37 miles of rail verses what could be done with that amount of money with alternative forms of public transportation. It is also to air my thoughts on this whole mess.

Addendum edit - December 8, 2007: Please read my updated entry on Metro's $3 billion $4.7 billion limousine.

On August 8, 2007, the Examiner News, one of the Houston Community Newspapers, carried a story about a transportation solution that was implemented for the needy (one day access can be purchased to access the story) which are served by the Spring Branch Family Development Center of Houston and interviewed its director, a man by the name of Richardo Barnes. As it is, the SBFDC services immigrants studying English to improve themselves, single mothers and those who are otherwise struggling financially.

Mr. Barnes tells of how he has been on a crusade to get Harris County Metro to implement a series of bus routes to better serve the Spring Branch area. He correctly notes that the agency - scandalously in my view - does not run a regular bus route along Hillcroft, which turns into Voss road as it goes through Memorial, and into Spring Branch. Hence the agency does not even have a way to connect would be patrons from the heart of the Galleria to Spring Branch. It also does not have a direct route running along Chimney Rock, which turns into Wirt Road as it reaches Spring Branch. More to the point, Mr. Barnes believes that the Spring Branch area would better be served by a circulator route. I grew up in Spring Branch and cannot agree with him more. Instead, the agency makes sure that the routes in the area make it to the nearby transit center.

So what has Mr. Barnes done instead? Well, the Examiner article goes on to say that his Center received an anonymous donation of $60,000 to purchase a bus from Texas Bus Sales. Said Barnes,

The bus goes where people need to go and the schedule is made up based on their needs. "Sometimes they have to compromise a bit," he said. "If several people need to go grocery shopping, we ask that they go at the same time."

Barnes illustrates what some of his clients are up against by pointing out that a woman who lives in an apartment near Interstate 10 and Gessner must take three Metro buses in order to bring her baby to the WIC clinic.

"The trip takes about three hours," he said. "Our bus can pick them up and have them here in 20 minutes."

Barnes went on to say that there are more than 250 people who have signed up for the bus service and that they pay $10 per month. Their monthly fee barely pays for gas, however one might ask how much does it cost per month to maintain the bus?

The question of what to do here could use some reasonable framing. In Metro's National Transit Database profile for both 2004 and 2005, the agency states that the 7.5 mile MetroRail line costs $14 million per year to operate. This is more or less in line with the annual operating costs of other rail lines, which often take about 2-5 percent per annum of original capital costs to operate. Or, I should say that they do in their early years, until it comes time to do major maintenance of switchgear, signaling, wear out on rail cars, and so on. Still, a reasonable estimate will be that in its early years of operation, the 37.5 miles of trains will cost some $60-70 million - give or take some millions - per year to operate. Bear in mind that the agency has been stating that the ticket revenues for the train have been less than $2 million per year. This matters because that implies the agency has not been even coming close to collecting the annual operating expenses needed to operate the Main Street train, much less having those same passengers pay for the capital costs of building the train. This in turn leaves open the long run specter of the agency having to break its 2003 Metro Solutions bond election promise that it would not have to raise taxes in order to implement its plans. However, what rail fans are counting on is that once the rail tracks are in place, there will be - how shall I say - facts on the ground, which will force matters in the future and for which people will say that we have sunk those costs, we can't just tear them up now!

Moving onwards. The same NTD profiles state that for Metro to operate its 1,000 buses (the agency has over 1,400 buses in its fleet, 20% plus of which are spares), cost $263 million in 2005. This implies that the annual cost per year to operate a bus is some $250,000. This might seem outrageous, but maybe not. If you pay a bus driver $50,000 - $60,000 total compensation (wages, benefits, health care, 401k) per annum, that it would take 2 bus drivers to operate a bus for 18 hours per day, then thrown in fuel costs and maintenance, then that figure may well be accurate. I do have it on good word that "typical" buses operated by mass transit agencies get about 3.5 miles per gallon, bearing in mind that buses are the ultimate stop and go vehicles when operating in urban areas. Throw in the fuel costs have gone up about $1 per gallon since 2004-2005 and you are probably looking at another $20,000 per year (for $270,000), assuming that the bus runs 180 miles (10 mph for 18 hours) per day at 3.5 mpg.

Now then, believe it or not one of my biggest complaints against Metro as it has been run all these years has nothing to do with rail. It has to do with how it spends money on buses. The latest transit industry hybrid fuel buses cost $450,000 - $550,000. They do get some 20-30 percent better fuel economy, but that is absolutely absurd to think that this is a bargain when you can look at the Texas Bus Sales website and find used buses for as little as $4,500!

And where would you deploy such buses? This is another part of my complaint. Going back to the 2004 and 2005 NTD profiles for Metro, one will notice another metric. This one is the unlinked passenger trips per vehicle revenue mile metric. For the year 2005, one notices that Metro has 81.546 million unlinked trips for buses, while traveling 41.555 million miles. This equates to Metro buses carrying an average of 1.96 passengers per vehicle revenue mile traveled. That is statistical language for saying that Metro's buses run empty most of the time, something that should be obvious to anyone who spends time watching those buses go by. What makes the issue even more scandalous is to then view double attached buses run empty.

Moreover, even the 1.96 passengers per vehicle revenue mile is statistically skewed, probably with a very interesting kurtosis, by the fact that the agency does have a number of very productive bus routes, such as the #82 and #53, both of which operate on Westheimer and which I often see with nearly full buses everyday since I live right off of Westheimer. The #2 Bellaire is another route which gets good boardings. This anecdotal evidence should leave little room for doubt that a handful of very productive routes achieve much higher passenger per vehicle revenue mile metrics.

I also should bring up the Main Street rail line here, while on the passengers per vehicle revenue mile metric. One might notice that the Main Street train achieves much higher (about 14) passengers per vehicle revenue miles than does the bus fleet. Bearing in mind what was said about the bus fleet above, one also has to remember that the Main Street train was placed on the corridor which had the heaviest concentration of buses and boardings patronage. As far as I can tell, there were some 25,000 - 30,000 boardings along the Main Street corridor (some argue much differently) before the train was implemented. It would therefore make sense that the train would get high levels of passengers per vehicle revenue mile because the agency already knew that the Main Street corridor represented its highest and best corridor for ridership. In other words, the agency picked off its lowest hanging fruit. Now, in wanting to build out trains to other corridors, it will be spending vast sums of capital on successively lower performing routes, including the #50 Harrisburg whose entire route achieves a mere 4,500 boardings per day and which has few other routes around it which can be truncated towards it. I should state here that some people I know who live or work along the corridors have tried spending entire days counting the number of people on bus routes and have told me that these numbers are full of - well, you know what.

What would make vastly more sense for agency bus operations would be for Metro to actually match bus vehicles to the demand curve for its services. Small cheap buses could be deployed on vast majority of routes which have fewer than 5,000 boardings per day. According to my spreadsheet, only 17 of Metro's 133 bus routes (including shuttles and local routes) achieved an average of more than 5,000 boardings per day in FY 2006, the year of Metro's highest ever ridership. Such vehicles would most certainly get much better fuel economy than the massive buses that the agency operates today, indeed my research into the matter indicates that many of these vehicles can get 12 or so miles per gallon. The agency should continue to operate the current bus fleet on its routes of heaviest patronage and in fact could consider the idea of operating double decker buses on its heaviest routes such as Westheimer. However, as we shall see, even that idea might not even be needed if I were in charge.

So let us circle back to the question of what the opportunity costs are of spending $3 billion on rail, along with an estimated $60-$70 million per year on basic maintenance. An alternate idea of what we are looking at looks something like this. The agency could otherwise (but cannot as we will see below) purchase 500 buses and add them to the existing bus fleet. Of these, 70 (or 14 percent) could be used to augment the existing buses that are on Metro's bus routes of more than 5,000 riders, giving them four more buses running on them. The other 430 could be used on all other routes. The 70 buses on Metro's heaviest routes could be similar to those running already, costing the above mentioned $450,000 apiece. The other 430 could be from a company like Texas Bus Sales or other fleet vendor and could purchased at a cost of $60,000 each. This would result in a capital outlay of a paltry $60 million.

So what to do with the other $2.94 billion? One idea would be to take that sum of money and have Metro invest in 30 year U.S.Treasury bonds, which are currently yielding 4.6%. Investing $2.94 billion at 4.6 percent would yield $135.2 million per year, which could be employed for bus operations. The agency collects a mere $50 million from bus fares. If improved bus services were to yield a mere $15 million in additional bus fares, that would bring us up to $150 million for bus operations. Since we have estimated that bus operations are some $250,000 per bus per year (and which we could bump up to $300,000 per year), then we should be able to sustain the estimated extra 500 vehicles on the road.

So what could we do with those extra 500 vehicles? One of my favorite pet peeves is what happened to the #18 Kirby route. The #18 Kirby is one of the casualties of the hugely expensive rail centric transit system. The #18 used to get some 1,500 boardings per day in the late 1990's, but that figure dropped to the current 1,000 boardings per day after the frequency of bus service was sliced in half when Shirley Delibero burned through Metro's cash horde to build the Main Street rail line. All routes could get more frequent service, cutting down some of those horrific wait times that people have to suffer through. Many routes now have bus service that runs every 45-60 minutes during off peak hours. Entirely new routes could be devised, including ones which run from the Galleria along Voss and Chimney Rock to Spring Branch. Mr. Barnes would get his circulator routes with very little fuss, but he won't get a thing anytime soon by dumping all that money to run rail down streets like Wheeler, a street which Metro, in its entire history, has never had a bus route run down. Having never, in its entire history, run a crosstown bus which connects the University of Houston and TSU directly to Westheimer, West Alabama, or to Richmond, the agency and rail fans now politically demand that a $800 million train be laid down which does this. The agency loudly proclaims that college students are a big market of users for public transportation. If that is the case, then why has the agency never bothered to run a bus route directly across town before?

Are you worried that the world is about to run out of oil soon? Great! With $3 billion on hand, why doesn't the agency go out on a limb and ask the Tesla Roadster folks to manufacture 24 seats buses which run on lithium ion electric batteries? Surely they could do such a thing for less than $500,000 per vehicle? We may have cellulose ethanol available to us soon anyway, but if you are someone who believes that civilization is about to come crashing down because we are exhausting economical oil supplies (and for which you believe that there are absolutely no substitutes), then you might want to ask yourself why are we spending billions of dollars to run light rail to airports of all places?

Other benefits of a bus based public transportation scheme would include not having to tear up streets and roads along the corridors, which have deeply upset those who live along them. Residents who happen to live within a 1,500 feet radial of a proposed train stop would not find the deeds to their homes under the shadow of future condemnation because of their proximity to a Metro train stop. Metro may or may not condemn their property, but one needs to remember that Metro is not the only player in this game. Metro has formed a public private partnership with Washington Group International and I have some very good intelligence that WGI has made some - how shall I say - very interesting proposals to Metro regarding what might go on around the Intermodal Transit temple and around train stations. Without going into too much detail, there is a very strong argument to be made that this entire project has absolutely nothing to do with transportation, but does in fact have quite a bit to do with the politicizing of land use via real estate redevelopment. The building of rail lines represents, from the view of the economist in me, a massive concentration of capital along narrow strips of territory. The only way in which one can justify doing something like that would be because there already is a massive concentration of other capital directly in the area.

But I digress. What would ridership have been like with all these extra vehicles on the road? That is a good question. Metro achieved 68 million boardings in 1982. The agency achieved 82 million boardings in 1990 and 101 million in the year 2000. This steady increase of ridership over time was snapped after the light rail line was built. The latest 2007 figures show Metro with 97-98 million boardings even after 500,000 residents have been added to the county population.

It is quite likely, in contrast, that given population increases that the agency would have continued to slowly but steadily improve boardings. As things are, the agency is projecting to have some 120 million boardings after rail is built, but spending a whopping $3 billion to get a mere extra 60,000 net boardings per day (about 3 freeway lanes of passengers in SOV vehicles) is quite a feat. Indeed it is conceivable, based on past trends, that the agency could have achieved 115-120 million boardings by now without ever having spent a dime on rail.

The reason for the relatively paltry 20 percent gain in overall boardings for having spent this kind of money is because of what I wrote about above concerning the fact that Metro is not even collecting operating costs of the rail line, much less capital costs. Since the operational costs of the new rail lines will not be covered, that will force another truncation of bus routes towards the trains, cutting bus service to the wider area. My back of the napkin calculations are that Metro will have to cut back bus service by some $50 million in operational monies per year, which makes me think that about 20 percent of current bus service will be slashed after the trains are built. One also might think that Metro promised in the 2003 Metro Solutions ballot that it would improve bus service by 50 percent, but Metro stated a while back that there was no demand for an increase in bus service. That in turn makes one wonder why it was that the agency made such a promise and how is it exactly that the agency "knows" that the demand curve for extra bus service has been saturated? Read further down for what I say about politlcal markets and real world markets.

I have a story to tell about Metro telling the public that there is no demand for more bus service. Metro used to run a bus route, the #54 Aldine - Hollyvale Circulator. As one can notice from reading my boardings spreadsheet, the Aldine-Hollyvale route used to take in nearly 1,000 passengers at its peak in 2000. However, the Aldine-Hollyvale was one of the victims of Metro's cuts in bus service. Boardings went down in the early part of this decade, reaching a low of 510-690 patrons per day in its last months of operation in 2004 - 2005. In December 2004 (as part of its service improvements), Metro announced that the route would need to achieve an average of 855 boardings per day in order to justify continuing running the bus route - and I still have the publicly issued pamphlet in my possession to prove it. What the agency did not tell the public was that the route once upon a time actually was getting that kind of patronage! So in effect, the agency, having doomed the route to "fail" to begin with by cutting frequency of bus service, self justified its decision to shut the route down because of its supposed lack of success in drawing patrons and because of high operational costs.

Unfortunately, since we are going to a rail centric network, Mr. Barnes still won't get his routes even after we have spent $3 billion on rail transit, and we should investigate why that is so. The big problem with having the federal government diversion of the 2.8 cents per gallon gasoline tax diverted to transit is that because the way that the rules are written, the New Starts grant money can only be used for capital expenditures. Federal money is not to be used to operations expenses. Moreover, only public transit agencies are eligible for the start up grants. This in turn creates the following, warped incentives:

1) Local governments all over America had huge incentives to buy out any privately operated transit companies which still might have been around in the 1960's and 1970's. In their place, government transit agencies would be created and chartered, if for no other reason than to be eligible to get in line for federal handouts for transit. Who cares whether anyone bothered to take public transportation? What really mattered (and still matters) is that local interest groups get the grant money.

2) Since Congress has geared FTA programs towards capital expenditures, essentially the rules say that "we will give you big capital grants, but its up to you to come up with operating funds." This state of affairs completely warps the incentives facing local political elites,transit agencies, and transit supporters. The game is tilted towards spending huge sums of money on expensive rail lines which may cost dozens of times more money to build, but don't cost quite as much to operate. That in turn creates a ripple effect because very few transit agencies cover their operating expenses. That means that bus service usually is cut and reconfigured towards rail lines since doing anything else makes absolutely no sense at all.

I should say, in the light of what was said regarding Stephen Kleinberg's most recent transit survey, that there is a very big difference between political markets and real world markets. Someone participating in a real world market must come up with ideas that will pay their way on their own merits, otherwise, they are forced to exit the field. That, gentle readers, is a good thing. On the other hand, in political markets, ideas only have to win 50% plus one voter and the idea wins, regardless of what the conseqences are and regardless of whether the idea actually succeeds in doing what people think it will actually do.

If the current Main Street rail line were built in a real world market by a private operator, a good idea of what the train would take to be built would look something like this. Since the train cost $520 million and is costing $14 million per year to operate, the estimated annual carrying costs of capital (at 5% interest) would be $26 million. Add $14 million in operating expenses and you get $40 million per year. A private operator would probably have to pay off a loan at 2-3% per year, so the private train operator would need to collect some $50 million per year (if not more) for the idea to be viable in real world markets. Since the train had 11 million riders in 2007, that would equate to a private operator needing to charge about $5 per person per boarding (Metro would need to charge about $6 per boarding to fully pay its own way in the world instead of $1). Very few would be willing to pay that price to ride the train, ergo that is why you do not see rail being built by the private sector. But what you do see is the Houston Chronicle and rail fans in the political markets cheering on rail building while saying that "there is no demand for the increase in bus service".

One issue hanging out over the horizon concerns the 25 percent general mobility monies that Metro pays out to its constituent municipalities for road building and other transportation projects. This arrangement is set to expire in 2014. In theory, the agency could devote all of the money to improving bus service as promised which could fulfill the 50 percent bus service improvement aspect of the 2003 bond election vote, but that is contingent on the idea that the member cities and Harris County are going to actually come to an agreement that the current arrangement will end. That, ladies and gentlemen, is not a done deal. That issue also cropped up in Metro's Westpark rail line DEIS, as well as the FEIS's for the North and Southeast Corridors. In those documents, Metro claimed to the FTA and to the public that it would have $8 billion in cash on hand in the year 2030. Now let me tell you gentle readers something about myself and that is that I have read an awful lot about politics. If there is one thing I know, that is that no politician or group of politicians are going to let $8 billion in cash pile up without spending it. I do not know what will happen, but that money will be spent somewhere. So why did the agency make such a claim? Let just say that we already have covered that. It's because there are all of those all important federal grants to chase after and who gives a damn about what the consequences of that really are.

So we could have (or could have had) one of two things. We could have $3 billion in rail lines, with about 20-25 percent of the entire year 2000 bus system service cut and truncated. That would have offset any (if there were or are any) benefits which might have been gained from rail. Or were could have added 500 bus vehicles to the year 2000 fleet which was already in existence, which could be deployed anywhere - including some for Spring Branch which would help Mr. Barnes and those disadvantaged souls at the Spring Branch Family Development Center.

More Fireballs, Lightning Bolts, and Hell Storms to follow.

Wizard

Posted by The Mighty Wizard at 08:36 PM
This entry was posted in the following categories: America , Because they can , Houston and Texas matters , Transportation

October 20, 2007

Of AMCTV's The Mad Men

Over the past several months I've been steadily become addicted to watching The Mad Men, a television series about the going's on at a fictitious small to mid sized advertising agency called Sterling Cooper located in - where else - New York City.

Before going any further, I should say something. I am not someone who follows television shows. My preferences when it comes to watching television include (of course), the History Channel, watching football, basketball, and track and field events. I also enjoy watching the Discovery Channel, and a few others. I used to watch current events programs long ago, such as C Span and the Sunday morning talk shows, but long ago gave up doing that since I came to realize that my life was not going in that direction and there was little I could do to influence things. I'd rather read academic journals and magazines for political information, but my time in this world dwindles by the day and there are other things worth doing other than becoming a walking encyclopedia of knowledge which I can't make money off of being.

Getting back to shows I do watch, I did follow Dallas when I was a young teen but quit doing so when I entered high school. I also watched Twin Peaks at the beginning of the 1990's. For comedy, I enjoyed watching Dream On and Reel Wild Cinema.

So what is it about the Mad Men that I find so alluring? Well, I will be the first to admit that the program will not appeal to everyone. One could visit the blog page of the show and read bucket loads of comments from the show's watchers. Clearly this show might have a fairly small audience, but that audience has a wild passion for this program. Clearly AMCTV has listened and has picked up the program for a second season. YES!

My own favorite character (and I should say that I like all of them) is the primary character, the handsome, wildly complicated, but 1950's Organization Man looking Don Draper, played by Jon Hamm. My own favorite scenes involving Draper include his telling off the hippie boy friend of Midge, how he punched Roger into remembering his wife's name after he suffered a heart attack, and most memorably, when he displays his awesome creative genius (which pays the salaries for the entire boat of everyone working at Sterling Cooper) when, in a mind blowing late night piece of inspiration while talking to Rich, he dreams up the name and sales campaign for the Carousel which is presented to Kodak executives. Draper's presentation is so inspiring, it causes Rich to depart the sales pitch meeting in tears because he is having trouble with his own girl friend. It causes the entire rest of the company, including the fiercely ambitious Pete Campbell to tip their hats off to him.

The women have their own dramas, constrained by the roles that were allowed to them by the America of 1960. Don's wife, an independent former model named Betty, slowly wakes up to the realization that her world has shrunk to that of being a housewife. Meanwhile she also (correctly) intuits that she might not be enough of a woman for her husband. That is because Don has also fallen for the strongly independent Midge and Rachel. Meanwhile back in the office, his secretary Peggy has displayed her creative talents, but fell pregnant with a baby she didn't want (remember this was before 1973). She however, admires Don for giving her the chance to be the first woman to get out of the steno pool since before World War II and has allied herself with her unwittingly visionary mentor against the younger hound dogs who size her up and think she should be put in her place.

It's rather amazing. Don finds himself at the end of the first season struggling to keep the hound dog younger 20 something men at bay, while trying to keep his wife and family in their place in suburbia despite his own indiscretions. At the same time he is attracted to women who are not constrained by the conventions of the era. Meanwhile, he has run away from a boyhood which he hated (he is revealed to be the son of a prostitute) and which he seems to have been treated a bit poorly. But at the same time he has a younger step brother (whom he disowned and who subsequently hanged himself) who adored him. My goodness, that has to weigh on anyone's conscience.

There were complaints early on that the show almost tried too hard to display everyone smoking and that nothing really happened. I dismissed these criticisms right away. I realized quickly that this was a show that could incubate a horde of problems and issues. Mad Men was a program that had an immense potential to mine a bunch of rich issues, such as the fact that a pair of lowly staff cleaning people, who were black, were fired for the discretions of a late night office party.
It's almost as though this program is a modern version of All in the Family, but made 35 years later and recast as a serious drama instead of a comedy. Whereas Archie Bunker was a bigoted working class man stuck in his ways, Don Draper is an any man American who has managed, both by the whirls of fortune and dint of genius, to reinvent himself and work his way into a star struck position in American society. Still, Draper finds himself surfing the waves of a swirling and rapidly changing world, though he and everyone around him don't realize how it is changing right below their very feet.

So, the Wizard heartily recommends watching this absolute gem of a program. You can download episodes, but I can't wait for the second season of the Mad Men.

Wizard

Posted by The Mighty Wizard at 11:45 PM
This entry was posted in the following categories: America , Culture

September 30, 2007

Of plummeting air travel costs, airport delays, and the TTI congestion report

There is a lot in the news and the motor is firing up again. This epistle is about the delays in airline traffic and I have a brief comment on the Texas Transportation Institute 2007 mobility report.

There has been much talk in transportation circles about the TTI report, and in the interest of brevity, I will not say much here. Tim Lomax and company do say that, yes, building more roads does help with traffic congestion and we need to keep at it. Tom Bazan has written recently that 150,000 more vehicles were registered in Harris County last year than in 2005, so it is no surprise that traffic congestion has gotten worse. This mirrors part of what my public comment was to the 2035 plan. Additionally, heavy congestion is a sign of economic and social vitality in an urban area, so congestion isn't always a bad thing.

So, are you one of those who says that building more roads only induces ever more demand by current road users? Then try reading this article by Robert Cervero. Finally, I will state that traffic congestion is still not nearly as bad in Houston as it is in transit heavy Europe. Commute times in Europe vary by country with a mean of 38+ minutes. Note that the article I cited was 4 years old.

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We've been bombarded recently by a spate of stories about how bad air traffic has become and what remedies are there for alleviating the problem. Gary Becker and Richard Posner write about their ideas here.

When I flew to China in 1991, air traffic congestion wasn't too bad. When I went on holiday in 2000, the situation was much worse. I flew into O'Hare and had to go into a holding pattern which nearly made me late for my flight to Tokyo, and flights to Tokyo don't happen every hour. I and another passenger were then spirited through Narita onto our connecting flight to Bangkok.

Casual or long time readers of my blog will probably know by now that any time The Wizard reads about matters like these, I find it always helps to view the matter through the lens of history. This morning I awoke to watch a program on the History Channel entitled Our Generation: Fly with Me.

The Fly with Me program was a great one to watch and here are some of my hand written notes I took while watching the program:

1) The first really large scale passenger aircraft was the DC-3. It was mentioned on the program that in 1955, a cross country flight from New York to Los Angeles taken on a DC-3 lasted all day and had to include three stops to refuel. The Wiki entry for the DC-3 confirms this, as it mentions that the range of the aircraft is 1,025 miles.

2) The cost in 1955 to fly across America on a DC-3 was $1,000. Translated into 2007 dollars, that same flight would cost $7,500. So not only was travel by air a bit slow by today's standards, it was also expensive. Now where has that matter been discussed before?

3) As it was, flying was something for the rich and was considered to be a romantic thing to do. Going to the airport and getting on a plane was a special occasion.

4) The subsequent roll out of the Boeing 707, the first aircraft of the jet age, changed everything. Not only could passengers get to their destinations in one third of the time, but jet aircraft introduced economies of scale in the number of passengers it carried. Whereas the DC-3 carried 21-32 passengers in a noisy propeller driven aircraft that could not fly above the weather, the 707 could (somewhat quietly) carry 110-200 passengers 35,000 feet up.

5) The 707 was not the end of reaping the economies of scale from jet aircraft. 15 years later, my favorite plane, the Boeing 747 took to the skies. The 747 can not only fly twice as far as the 707 could, it can also carry 2-4 times as many passengers.

6) In 1978, Congress passed the Airline Deregulation Act, causing further drops in the costs of flying. Meanwhile, the standard of living in America has (more or less) doubled since 1950, allowing for more money to be spent on transportation and travel.

So what has all this meant for flying? I have flown with United Airlines since I worked in China because they offered me membership in their frequent flier program when I went over there. Just for kicks, I punched in a round trip ticket itinerary from JFK airport to LAX (New York to Los Angeles) for a 5-6 hour non-stop flight leaving on November 15, 2007 and returning on November 30. The response I got was that I could get a round trip ticket in economy class for $328, $302 if I used a nearby airport like La Guardia. Even first class flights could be had for $1,308. I am sure that if one looked hard enough, one could find cheaper flights.

As it is, these figures mean that flying by jet aircraft has dropped the cost of flying by roughly 80-95 percent since the DC-3 ruled the skies. Needless to say, flying by jet aircraft has democratized flying, just as the improvement of roads (and later rail transport) in Europe democratized travel. The number of passengers traveling by air in America has grown by 300% in the past 30 years. 80% of Americans have now traveled by aircraft and 50% have flown in the past 12 months. Then there is the issue of airport security and what it means for passenger inconvenience and delays.

And what about the supply side of airports in the United States? Well, America has built one large new airport in the past 30+ years!

Some of the supply has come online via private jets operating at smaller airports, especially for business executives or rich people who don't want the hassle of dealing with checking in at the big airports. The show mentioned that a typical private jet now runs some $40 million, but a company called Net Jets allows one to rent (or buy) into a private jet. Prices start at $412,000 and the program mentioned that a typical Gulf Jet ownership program will run you $2 million for 50 hours per year of flight time. Don't laugh. Net Jets operates 370,000 flights in 150 countries.

So what's the solution? Rail fans no doubt would dream of high speed train service, but realistically high speed rail can only compete with planes on a time basis over a distance of up to perhaps 600 miles once one considers the time differential of navigating the airports. Then there is the issue that capital costs of constructing high speed rail would probably average $30 million per mile and go up. Then, how do you navigate around in your destination city?

So should rail fans put their hopes in having the federal government fund a Los Angeles - San Francisco - Fresno high speed rail line, or perhaps one connecting Dallas - Fort Worth, Austin - San Antonio, and Houston? Well, let me put it to you this way: Each of those routes all connect destinations in only one state and if you are looking for the federal government to fund any big programs, you'd better make sure that the program in question benefits the entire country and not just one state! Get the message?

I had the opportunity, if I so desired, to take the Chunnel between London and Paris in January of this year. I opted for flying between Heathrow and Charles de Gaulle. When considering the time differential, it was only a one hour flight, but the train rides, navigating through customs, etc, made it a 4 hour trip. The chunnel trip would have probably come close in time terms, but the trip by air (and getting around in both cities) cost $90 less than by rail.

Any time I think of long distance travel by train, I think of Amtrak. One person I know who traveled by Amtrak wrote me a message a while back saying that Amtrak lost their luggage and did nothing to help them locate it!

My thought is that, considering the NIMBY'ism surrounding the building of new airports, we are going to have to continue with airport expansions for the near term future, along with better use of non - major airports. It's either that, or resort to using larger aircraft which can carry more passengers. Another idea might be implementing congestion pricing of flights at busy times at major airports. Bullying the airlines via legislation for their success in getting people to fly, but not increasing the supply of airport runways and terminals, is only going to drive up the price of flying because mandating the compensation of angry passengers who are forced to wait is going to force the airlines to raise their prices to come up with the money to do that.

Air travel will become more expensive in the future as petroleum prices rise, which may help alleviate the problem. It is difficult to fly aircraft using any other kind of fuel besides petroleum, although the Brazilians have made aircraft fly (albeit with major problems) with ethanol. However it remains to be seen whether or when alternatives to today's petroleum will become viable on an industrial scale. Some people are doing some really amazing and ambitious stuff finding a replacement for traditional petroleum as a liquid fuel.

I am going to stop now as this has been a long write. I may post more on this later.

Wizard.


Posted by The Mighty Wizard at 11:14 AM
This entry was posted in the following categories: America , Transportation

August 18, 2007

The Universal Health Insurance Blues

To illustrate how many ideas simply refuse to die in politics until they get shoved through, we have once again witnessed the rise of universal health insurance in Amerika (yes, the our hallowed country's name was misspelled on purpose). We have seen Mike (I live in Manhattan) Moore unveil his movie Sicko, the story of Kathleen Aldrich going bankrupt to stay alive, pushing for expanded kiddy care in Texas, and now the Houston Chronicle chimes in saying that we should have universal health insurance. However Houston's own GHP Pravda bravely refuses to describe in that editorial how it is that Amerika is supposed to reach universal health insurance nirvana. All of this on top of Harry Truman's failed 1949 plan, Richard Nixon's universal employer based mandate, and Billary's 1993 failed plan.

I am going to make an assumption that many who bother to read this blog entry are reasonably aware of the many arguments for and against universal health insurance, the various ways in which a society can attain such a nirvana, as well as the strengths and weaknesses of America's vast patchwork of providing for health care (such as its heavy component of cross subsidization involved). If you want to read of some interesting stories regarding health care and its provision, here is a practicing M.D. who keeps a blog. You might be interested in reading the NHS Blog doctor. Try reading this and try watching the film The Barbarian Invasions on the joys of health care in Canada.

Several years ago, I was out of the country on vacation when I met an Englishman who climbed all over me because the United States did not have universal health insurance. He told me that people had a right to their health. I said okay, and... He replied that since people had a right to their health, then they had a right to health care when things went bad. That is when I told him to hold the horses. I told him that nobody has a right to health care anymore than they had a right to a house, an apartment, food, or anything else. You do have a right to seek help if things are wrong, but the providers may well turn you down in one way or another. You may well not get what you want. Indeed this happens quite often in the 41 countries which have some form of universal health insurance.

One thing I will say about the policy debates is this. A frequently advanced argument for socialized medicine is that everyone will get equal access to health care. Nothing could be further from the truth. When I was in the UK earlier this year, I read in one of the newspapers of a study which noted that wait times in the UK were shorter and hospitals were better funded if you happened to live in an area that was represented by a member of the Labour Party than if you happened to live in a constituency represented by the Conservative Party or by a Liberal Democrat. Do remember that Labour has been in power since 1997. When the study came out, the Tony Blair directed spin machine predictably went into action, declaring that people in their districts needed the greater spending for various reasons, but this rationalizing when you've been caught plundering more than your share of the public purse is to be expected with any government program.

Now that is not an attack against the Labour Party per se, as I would automatically assume that the Conservatives would do exactly the same thing were they to seize power in the next UK general elections. The Economist noted some years ago that when the Republicans were in control of the Congress, it seemed that the main difference between the time when the Republicans were in control and when the Democrats were in control was where the taxpayer monies went to. Taxpayer largesse does flow more in the direction of the party which controls the houses of the legislature, irrespective of what the government funded program happens to be.

As an aside, I work for a Big Evil Company. My UK counterparts have access to a private health insurance plan, which they take advantage of in droves. Recently, one of my colleagues suffered a heart attack while doing desktop work in Libya. Fortunately he survived. The BEOC sent him to London when he was strong enough to travel and they put him into a rather nice private hospital. Note that the BEOC did not put him at the whims of the NHS.

More to the point, I have this to say about universal health insurance. If there is to be a substantial government component to such a regime, then I want the Paul Krugman's, the Houston Chronicle Editorial Board, the Michael Moore's and all the rest of you to tell me something. It is pretty clear to me that under any such regime that I am going to have to wait to get health care when I need it. Like most men, I am the type that will not bother to see a doctor until I absolutely have to. Compare this to a (female) high school science teacher I had. This lady had a five year old girl who was just oh so dear to her. This lady must have taken 15 days off during the school year to run off to take care of her daughter (she was a single mother at the time, but I think may have remarried). If I remember correctly, most of these sick days taken off for her daughter turned out to be for minor ailments and eventually the school district docked her of pay, which really threw her into a funk. She then naturally complained to the teacher's union but those were the rules which had been worked out between the district and the union.

My point here is this. I do not under any circumstances want to wait when I need treatment - End of story!!! I know myself better. As I have gotten older, I have become the type of person that can often be very patient, but if something is important enough, then when I really want something now then I want it right now and that goes for health care. If anyone is going to shove some universal health insurance plan down my throat, then they really had better come up with a component that will allow someone such as myself to pay for convenience, get treatment on my time, and not have to wait in line the way that the hoi polloi does down at the county hospitals.

But you know, I've decided that is not enough. I have a hard time imagining that any new proposals will not end up raising my taxes in some way. Moreover, any new health care regime is pretty much going to take away more of my freedom. What I want to hear from the Michael Moore's, Paul Krguman's, Houston Chronicle Editorial Board, and all the rest of you who advocate some universal health insurance regime, is this: What else are you going to do for me? Don't answer that we are guaranteeing health insurance because I already have that. In fact I might end up with something inferior afterwards where I am going to have to wait for treatment. Moreover, I am worried about choking off the revolution that pharmaceutical drugs is bringing us. What I never hear from the advocates of universal health insurance is what are you going to do for me in return? How much of my freedom are you going to give me back?

Well in case you universal health insurance advocates are clueless, I have an idea. I am probably going to get hammered by Social Security to the tune of north of $500,000 irrespective of what happens. Ergo, what I propose is this. Either shut down the Social Security plan, or as a lesser option I will renounce any and all claims to Social Security benefits if or when I become eligible for them in return for being allowed to opt out of the program right now and to quit paying taxes. I figure I can cut my losses now and save several hundred thousand dollars in the process by doing this. In return, I just might consider supporting a universal health insurance regime which allows me to pay for convenience and to buy my way out of waiting for treatment. Now how's that for a deal?

Now I can just hear the chorus: We just can't shut down Social Security and we aren't going to allow you to get out of the program anyway! Don't you know millions depend on those checks and we just can't allow people like you to opt out because we are all in this together and if one rat jumps ship then all the rats will too!

Well if that's your Road to Serfdom type answer, then all I can say is that you can go kiss my ******* ass.

Wizard

Posted by The Mighty Wizard at 07:11 PM
This entry was posted in the following categories: America

August 11, 2007

Wanna live longer? Move to Houston!

Well not quite, but I thought that such a title to a blog entry would be catchy. Ergo I have deliberately mislabeled the subject matter of this blog entry. As it it, my central air conditioning went out the other day and I am sitting here writing this entry in a hot residence, next to a constantly blowing fan. The repair person shows up on Monday.

More seriously, the true subject matter of this entry comes from The Marginal Revolution. In that entry, entitled "Move South to live longer", Tyler Cowen points to a potentially important new paper recently published by the National Bureau of Economic Research which discusses the effects of extreme weather events on human mortality (a non-gated version can be found here) and as an accompanying topic discusses the effects of migration towards warmer climes.

This is the abstract of the paper:

We estimate the effect of extreme weather on life expectancy in the US. Using high frequency mortality data, we find that both extreme heat and extreme cold result in immediate increases in mortality. However, the increase in mortality following extreme heat appears entirely driven by temporal displacement, while the increase in mortality following extreme cold is long lasting. The aggregate effect of cold on mortality is quantitatively large. We estimate that the number of annual deaths attributable to cold temperature is 27,940 or 1.3% of total deaths in the US. This effect is even larger in low income areas. Because the U.S. population has been moving from cold Northeastern states to the warmer Southwestern states, our findings have implications for understanding the causes of long-term increases in life expectancy. We calculate that every year, 5,400 deaths are delayed by changes in exposure to cold temperature induced by mobility. These longevity gains associated with long term trends in geographical mobility account for 8%-15% of the total gains in life expectancy experienced by the US population over the past 30 years. Thus mobility is an important but previously overlooked determinant of increased longevity in the United States. We also find that the probability of moving to a state that has fewer days of extreme cold is higher for the age groups that are predicted to benefit more in terms of lower mortality compared to the age groups that are predicted to benefit less.

So there you have it. Speaking a bit frivolously, if you've ever wondered why those elderly snow birds show up down south every winter, there is some real academic evidence that what they are doing is good for them. Sadly, (and arguably as usual) the effects of extreme cold hit the poor the hardest.

More accurately, the authors state in the paper that both extremely hot and cold weather events cause mortality. However, the data which they collected from the 1972-1988 period indicate that there is a substantial difference between mortality which is caused by extremely hot weather events and cold weather events. In heat spells, there is a marked jump in deaths and as expected many of these deaths are of elderly people. However in the weeks afterwards, there is a substantial drop off of mortality rates. In contrast, with cold spells there are spikes in mortality, but there is no offsetting drop off in mortality rates in the weeks or months that follow (emphasis added)! The authors note that the the incidence of deaths from cold spells is greater than those leukemia, liver disease, or homicides, and that there are sizable differences in deaths from cold blasts, with the cities of Minneapolis, Detroit, Cleveland, and Chicago experiencing the highest rates.

Finally:

We calculate that each year 5,400 deaths are delayed by the changing exposure to cold temperature due to mobility. The average number of years of life gained per delayed death is 9.1 years, a sizable increase in life expectancy. As a consequence, the average individual experiences an increase in longevity of 0.02-0.03 years per calendar year as a result of the lower exposure to cold weather. We compare this figure to the annualized increase in longevity experienced in the United States over the past thirty years, which has been 0.25 years per calendar year. Thus, our estimates indicate that 8%-15% of the gains in longevity experienced by the US population over the past three decades are due to the secular movement toward warmer states in the West and the South, away from the colder states in the North. This evidence on mobility-induced changes to cold weather exposure identifies an important but previously overlooked explanation for increased longevity in the United States.

So there you have it. If you live in Chicago, then pack that U-Haul and head on down to Houston! Your life may depend on it.

Wizard

Posted by The Mighty Wizard at 02:34 PM
This entry was posted in the following categories: America

June 14, 2007

Mixed use real estate development proves popular - but where are the light rail lines?

I followed some leads to this story printed in the June 10, 2007 edition of U.S.A Today. Here are some excerpts:

Victoria Gardens in Rancho Cucamonga, Calif., is typical of dozens of developments sprouting along the nation's light-rail lines and near subway stations: stores, theaters, restaurants, offices and housing connected by sidewalks to mimic a walkable urban neighborhood.

Just one thing is missing: transit.

There is no light rail or subway in Rancho Cucamonga, about 50 miles east of Los Angeles. Victoria Gardens is typical of most Southern California developments: It's on one freeway and next to another.

Transit-oriented developments are so popular with residents who crave the opportunity to live in a walkable community that at least a dozen cities and suburbs across the USA are embracing the concept — even if they don't have rail.

"The market is changing much more quickly than our policymakers are responding," says Shelley Poticha, CEO of Reconnecting America, a national non-profit group that works to spur development around transit stops. "There is a real pent-up demand for transit all over the country, but these communities are getting built by the private sector."

Wizard: Actually, there is practically no pent up market demand for mass transit according to the latest American Community Survey. There is a pent up demand in political markets for mass transit. Always pay attention to what people actually do, not what they say.

Resuming:

Building housing near shops and restaurants is "very successful in and of itself," says Randall Lewis, executive vice president of Lewis Retail, an Upland, Calif., company that was one of Victoria Gardens' developers. "It's not transit that makes them successful. If you had transit, it would be the cherry on top of the whipped cream."

The funny thing about all of this is that much of this is happening in the suburbs. Also, do keep in mind that many such developments are built with tax breaks, TIRZ involvement, handouts and so forth.

Wizard

Posted by The Mighty Wizard at 11:37 PM
This entry was posted in the following categories: America , Transportation

May 24, 2007

Shutting out the competition - Ron Paul and his quest for the Presidency

I don't write too much about Presidential politics, but two events prodded me to do so. First was that British PM Tony Blair announced he was stepping down from power on June 27, 2007, an issue I will not write about now. The second was the bizarre reaction of some in the Republican Party to Congressman Ron Paul's suggestion that U.S. foreign policy as was conducted in the Middle East in the years leading up to September 11, 2001 was a factor in the decision by Al Queda to strike U.S. homeland targets.

This write up on Reason Magazine has a stark rundown on the overall situation. Briefly, Mr. Paul had a confrontation with former New York Mayor Rudi Giuliani in a public debate over the matter. Giuliani said that he had never heard of that before. Hmmm...

I will leave this epistle with a copy of the Reason commentary comparing the statements of Cato Institute scholars verses statements made by leading figures in the Bush Administration.

Cato personnel:

Gene Healy: "After our quick victory, and after the "Arab street" fails to rise, you're going to hear a lot of self-congratulation from the hawks. But the fallout from this war is likely to be long-term, in the form of a protracted and messy occupation, and an enhanced terrorist recruitment base."

Ted Galen Carpenter:"The inevitable U.S. military victory would not be the end of America's troubles in Iraq. Indeed, it would mark the start of a new round of headaches. Ousting Saddam would make Washington responsible for Iraq's political future and entangle the United States in an endless nation-building mission beset by intractable problems."

Bush Administration officials:

Assistant Secretary of Defense Paul Wolfowitz: "We're dealing with a country that can really finance its own reconstruction, and relatively soon."

• Vice President Dick Cheney: "I don't think it would be that tough a fight."

• White House economic advisor Glenn Hubbard: "Costs of any [Iraq] intervention would be very small."

• OMB Director Mitch Daniels: "The United States is committed to helping Iraq recover from the conflict, but Iraq will not require sustained aid."

Mr. Paul came in third in a text message poll conducted after the debate. Sadly he lags in the polls. Mercifully though Mr. Paul is not being subject to the time honored practice of using government as a means of shutting out of the competition, in this case via banning him from participating in future debates or by drumming him out of the Party. Still, Mr. Paul may well be prescient with his notion that the Republican Party will not win the Presidency in 2008 by pursuing the same old foreign policy which the Bushies have been following.

History shows that once Presidents get America stuck in wars, it is usually up to their successors to get America out. This happened with Johnson in Vietnam, where Nixon ended up getting America out. It also happened in Korea where Truman got us in there, but Eisenhower got us out. Based on this, I have felt Mr. Bush will make sure that America stays in his military adventure until he leaves office and leave the job of devising an exit strategy to his successor.

There are other reasons I have felt that Bush would stick out Iraq until he leaves office. One is that the war bleeds away money from other government programs. It also is a matter of point that it is nearly impossible to ever get a politician to say that they did the wrong thing. A while back Senator Robert Byrd said that he had been wrong about America's changing attitudes towards Civil Rights in the 1960's. Otherwise, he had made the right decision on every one of his 10,000+ votes he had made as a Senator. Wow! All I can say is that is not a bad track record. And I thought I was wise and powerful...

Wizard

Posted by The Mighty Wizard at 12:19 AM
This entry was posted in the following categories: America , Because they can

March 16, 2007

Halliburton - Schmalliburton

I suppose I am a little late in writing about the news that Halliburton's CEO, Dave Lesar, will be moving the company headquarters to Dubai in the United Arab Emirates.

Here are a few items to think about:

1) KBR, Halliburton's arm which has been serving America'a armed forces for overseas ventures, makes only 3 percent profit on its contracts. Meanwhile, dozens of KBR contractors and employees have lost their lives in Iraq.

2) The Democrats in Washington want to make hay about Lesar's move and of the "attachment" of the evil oil and gas industry to the Bushies. I would like to remind everyone that KBR stands for Kellogg, Brown and Root. Brown and Root founders George and (particularly older brother) Hermann Brown, were deeply in bed with Lyndon Johnson, to the point where B&R was Johnson's kept company and Johnson was the Brown Brother's kept politician. This was all made clear by Robert Caro in his book Means of Ascent.

3) Corporations owe no more to broader society other than to obey its laws! Those laws might stipulate that evil corporations have to curb their dumping of pollution into the environment, that they have to provide safe working environments, pay minimum wages or follow other work rules, create safe products, don't deceive their customers, pay their taxes, follow political campaign finance limits, not do business with nation states or regimes which their host country deems to be enemies, and so on. As to whatever "morality" that people find in laws which are laid down, well that is up to the broader public.

Some Ralph Nader types might well complain that corporations have far too much influence in the political life of modern day developed nations and that their influence must be curbed. However it seems to me that the very fact that we have piled on all these rules on corporations strongly suggests otherwise. If Mr. Lesar really has something to hide, then the U.S. Congressional Democrats have the power to subpoena Mr. Lesar and squeeze him via rent extraction for campaign contributions crucify him before the television cameras before throwing him in jail for alleged misdeeds.

As always, I really am a nice guy, so have a nice day!

Wizard

Posted by The Mighty Wizard at 11:47 PM
This entry was posted in the following categories: America

February 21, 2007

If at first you don't succeed... the story of Kansas City and Light Rail

I get emails and gossip from my politically active friends from time to time. Some months ago, someone I know spoke about the saga of Kansas City and light rail. I hadn't followed through with the story for a while, so I decided to pay the matter a visit.

So what did I find? I found that the people of Kansas City indeed voted for a rail transit plan in the November 2006 elections, thanks primarily to the efforts of one Clay Chastain. You see, Mr. Chastain brought the rail issue up for a vote 7 times before his pet project, which he said publicly would help make Kansas City world class, finally passed by a 53-47 percent margain 4 months ago. In the run up to his year 2000 attempt at getting the issue passed, Mr. Chastain actually bought a house down South, but didn't move. This story mentions that Mr. Chastain is currently living in Bedford Virginia and was so at the time of the 2006 elections when his light rail initiative passed. One wonders why it is that someone would want to foist some scheme on people when the person who is demanding the compulsory action doesn't even live in the area.

From the November 8, 2006 story above:

The measure was opposed by Kansas City’s entire political establishment, along with the Area Transportation Authority and the Regional Transit Alliance, which said Chastain had grossly underestimated the costs of his plan and overestimated the chances for federal matching money. Opponents also said that diverting the sales tax to light rail would cripple the local bus system, which currently receives that tax money.

Moreover, having won his gains through political force, Mr. Chastain's wife is now prepared to go to court to make sure that the Kansas City Council sticks to the ballot plan. In a scene this seems to be a eerie reversal of what is happening in Houston, the pro rail crowd is demanding that the powers that be stick to the ballot language and not deviate from it! Westpark really does mean Richmond! Meanwhile the main objections to the plan are that the plan, as called for, will run into legal problems because land and parks would need to be condemned which are owned by other state entities.

There are an immense number of lessons to be learned here. One is that politics, by its very nature, draws an awful lot of visionaries and dreamers. Too bad it doesn't draw many people who prefer to leave people alone. Two, is that Mr. Chastain's light rail plan is counting on a 50 percent federal match for capital startup, as is Houston's, not to mention dozens of other cities to boot. It is for reasons like this that I have strongly come to believe that the federal government has to get out of the transportation business altogether. That includes funding roads, airports, rail lines, everything. Federal involvement warps incentives which only creates more government, which distorts even more incentives, and so on down a vicious spiral.

This is a markedly different point of view from the so called Smart Growthers, if I am reading my Duany and Co. correctly. They want the feds to stop the funding of roads but keep funding for mass transit on the grounds. You see, according to the current generation of Smart Growth planners, the previous generations of planners lost their minds from the 1940's to the 1980's because we constructed the Interstate Highway system. Ergo, the only way to counteract this is to keep the federal empire in place, but to make the federal government "work smarter". Get it?

A brief aside, as one question comes to mind. If the previous generation or two of planners "really did get all things wrong" and caused "undesired" sprawl, then who are we to hold liable?

A large number of transportation issues are local issues. Getting the feds out of the transportation business altogether would immediately cause local authorities to come to their senses when it comes to funding transportation and quite frankly, I have no reason to be funding Mr. Chastain's dreams, nor should he be funding mine. Besides, we wouldn't be making anymore $15 billion decisions like this if we did.

Enough for now. Several days ago when passing through downtown to head north, I encountered 5 Metro buses in a span of 11 minutes between 7:11pm and 7:22pm. A future transportation entry will include an analysis of the proposed Northside BRT system.

Wizard

Posted by The Mighty Wizard at 10:57 PM
This entry was posted in the following categories: America , Houston and Texas matters , Transportation

February 18, 2007

So why didn't the zoning ordainance stop it? LA's toxic plants and neighborhood development

One of the justifications that people use in for arguing for zoning ordainances (and in particular single use zoning ordainances) in towns and cities is that if we didn't have them, then gosh golly, who knows what kind of development will go up next to my lovely home in my lovely neighborhood? If we don't have a zoning ordainance, I just might find myself living next to a cemetary, a nuclear waste plant, a car dealership, or some noisy nightclubs and we just can't have that. We just want to govern what kind of development goes on so that we can protect our property values, our children, and our cherished way of life. Indeed it galls some people to no end that Houston does not have a zoning ordainance and arguably some groups are basically trying to get around the zoning issue by other means. In otherwords, they are trying to get Houston zoned without the zoning.

Readers might be interested in seeing this website.

And so the argument goes. However on February 15, 2007, the Houston Chronicle carried a story about how an L.A. area watchdog group calling itself Communities for a Better Environment are leading people through tours of the L.A. area to show how environmental degradation hits poor people the hardest.

What caught my eye when I read this article was that there was a photograph included in the story. That photo shows a Conoco-Phillips refinery located in the Wilmington area, emitting some vapors during daylight hours. But here's the kicker. In the front of the photograph, one sees 2 homes right up against the boundaries of the plant! 5 cars are parked along the street. More evidence of cars and houses are at the edge of the picture. Why is this?
Is Wilmington not governed by a zoning ordainance? If one punches in the terms "Los Angeles", "zoning", and "land use" into Google, you get 973,000 returns.

My question is this: If one of the prime reasons for zoning is that zoning is supposed to segregate land uses and presumably mitigate harm to citizens in the process, then why were those houses allowed to develop right up against the boundaries of the Conoco Phillips refinery? In all seriousness, if one can't satisfactorily answer that question, then one has to question why it is that we have zoning ordainances to begin with.

Posted by The Mighty Wizard at 04:27 PM
This entry was posted in the following categories: America , Houston and Texas matters

February 11, 2007

Anna Nicole Smith (1967-2007) - RIP

And so came the news on February 8, 2007 that Vickie Lynn Marshall - aka Anna Nicole Smith - died from as of yet unknown causes. No doubt that some will wonder where you were when you heard the news. Well gentle readers, I didn't hear the news on the 8th. As old fashioned as this sounds, I read about it in the newspaper the next morning.

I first heard (and saw) Anna circa 1993 or so during her campaign as a Guess jeans spokesperson. There were a lot of guys who thought Anna was the bomb but blondes are not my thing, not even blonde bombshells. Still, it wasn't hard to see why lots of guys became happy when they saw her photos. I later found out that Anna had been a dancer at Gigi's. Gigi's is a girlie bar located at 290 and Hollister in northwest Houston which has been in business for over 20 years now. I once saw Christy Canyon perform there in 1995 when she came through Houston during a week long dancing stint at the bar.

My personal distaste for Anna increased when I started hearing her speak in interviews and watching her on TV. Anna really was a dumb blonde, but I have some casual friends who strongly argue otherwise. One acquaintance I know has been a girlie bar photographer for many years. He says he knew Anna from her years as a dancer and strongly maintains that her whole bombshell thing was an act. Anna had more brains than she let onto.

Well we do know that Anna had enough smarts to spot her opportunities and if you are going to dig for gold, then you might as well dig until your fingernails break. And so she did, marrying one of the grand old men of the oil and gas industry. It all went downhill from there. Watch as we see Anna kiss a man 63 years her senior, we watched as Anna yelled out "screw you Rusty!" to famed Houston attorney Rusty Hardin who was representing the Marshall estate in their legal battle with Anna over the dead man's billions. Watch as Anna puts on 80+ pounds and then gets a TV show in all defiance of our modern day culture which demands that our TV stars be trim and beautiful.

But then Anna did something that I thought was quite genuine. Several weeks ago I did catch something on TV and the Internet where Anna was crying over the death of her son. Whatever else you might have thought about Anna, clearly her boy was someone that she cared about. There is no doubt in my own mind that her son's death was what caused Anna to pound the nails into her own coffin.

And now it's over, at least until the next round of legal fireworks begin. There is a part of me that is bitter and angry at Anna for tarnishing Houston. For better or worse, we Americans don't allow for much in that gray area between money and sex. If money is what you are after, you get tarnished as a woman and Anna was duly crucified for exposing America's hypocracies about money and sex. We Americans have never allowed for women to breathe and flourish socially in such categories as courtesans and mistresses. I personally think that we are poorer and less interesting as a society because of it.

As for what her fate will be in the annals of stardom? We know that Anna didn't leave much behind in terms of work, other than her Playboy and Guess jeans layouts. She just didn't have much to offer in terms of talent. Looking into my crystal ball, I see that the court battles over hers and her ex-husband's estates will go on for perhaps another 5 years. In 20 years Anna will be a distant faded memory, remembered wistfully by the current generation. That is unless her remaining infant daughter manages to make a name for herself.

Anna Nicole Smith - RIP

Posted by The Mighty Wizard at 08:45 PM
This entry was posted in the following categories: America

January 24, 2007

The State of Illinois to put its state lottery on the block?

This from the New York Times (registration required). Read what this law professor has to say about the issue. I like this statement:

"Yet more evidence that a hedge fund is no match for a politician when it comes to short-term thinking."

Just a few years ago, most states gave away their 25 year $300 billion or so Tobacco Resolution money in return for immediate up front payments from the money markets. Now it seems they just might give up their lotteries to boot. Wow!

Posted by The Mighty Wizard at 05:51 PM
This entry was posted in the following categories: America

November 30, 2006

Of 401k's, pensions, retirement and what not

Several weeks ago my cable went out. I've called the local cable monopoly and a tech is scheduled to come in... well sometime. In the meanwhile, I've actually started watching some television which I otherwise would not have taken in, such as this program on retirement put on by PBS. I didn't watch the entire program when it showed on television, but I did catch the program in progress when it talked about the sorry saga of United Airlines ditching its employee pension program when it was in its three years of Chapter 11 bankruptcy. The PBS Frontline program went on to talk about 401k programs where employees ended up with widely different outcomes, showing an engineer who worked for 12 years and ended up with $450,000 and another employee who ended up with only $26,000 after cashing in his 401k.

If you want to blow a lot of time, go ahead and read through the public discussion of the PBS Frontline program - all 8 or so pages of it. The accumulated commentary posted by site visitors covers the entire gamut of public opinion on this subject. Viewers really should read everything people have to say about this matter.

This topic has garnered my attention because VLICA is currently being considered as a takeover target on Wall Street. As such, I have to start thinking about what the near term future might hold. In fact the recent takeover rumors helped yours truly out quite a bit. You see, I took a big position in company stock this past summer, only to see the company stock take a nose dive in the early autumn. I was still about 10 - 12 percent down until this week's events brought VLICA's stock price within range for me to sell at only a small loss. It turned out that the company stock price went up again ever so slightly today, but the deed is done and I am not going to sweat the small stuff. For now, I have my money socked away in some fairly safe investments.

The idea of retirement is a modern phenomenon. First of all, the average life expectancy in the United States in 1900 was 47 years. It should also be mentioned that the U.S. was one of the wealthiest countries in the world on a per capita basis then, just as it is now. The idea that someone would live until age 85 and retire from work for the last 20 - 30+ years of their lives would have been nearly unthinkable just 50+ years ago. So questions naturally begin to arise, such as whether we actually "deserve" to retire from work? If so, then who pays for it? These aren't idle questions. For most of human history, most people worked until the day they simply couldn't work anymore. Indeed this is still the case today for many people in many parts of the world.

I would love to believe that simply asking these questions would result in people coming to the correct answers. Namely that there is nothing in this world that entitles you to retire from working. You have to earn that for yourself if you can. It should naturally follow that since you are going to have to earn your retirement that other people should not be forced into paying for your retirement!

Well, as everyone knows, we Americans (and indeed most other wealthy industrialized societies) have elected via the political process to do just that - foist off retirement, caring for the elderly, etc, on the public as a whole through taxation to pay for programs such as Social Security and Medicare. Disclaimer - I have two parents, aged 74, who have been collecting Social Security for 12+ years now and have probably come out at least a good $40,000 - $50,000 plus on the deal. The bad news is that they will be amongst the last of the people that come out ahead on the program. If you were born after 1945, then the numbers are that you are going to be a loser on American federal entitlements.

The main problem with using taxation to provide for retirement entitlements is that they can be used to bribe voters to give the current electorate lots of handouts at the expense of future voters who have little or no say in the matter today. That and that the tax monies can be diverted for other purposes. Ergo, such programs will end up in the red sooner or later. That will be forthcoming in the following decade across the Western world.

A second method of taking care of older people is through the idea of pensions. Pensions have been around for over 300+ years. The thing about pensions, or at the the defined benefit versions of pensions, is that you often have to work at least 20+ years at an organization before the level of money which you would start to collect upon retirement becomes significant enough to where it would really start to come in handy in making a dent towards providing for a comfortable retirement. Well of course, everyone knows that Mr. Mighty Wizard, so what exactly are you getting at? What I am getting at is that many organizations do not last more than 10 years, much less 20!It is a known fact that probably 50 percent of new business ventures do not make it past 5 years. Indeed the failure rate for businesses climbs into the 70 percent range by the 10th year after the founding of a business.

So where does that leave us in terms as to which organizations would be the ones which would offer pensions? One obvious answer are governments. After all, once governments are founded, they never go away. That goes for government bureaucracies, agencies, and for that matter your local public school district. In the private sphere, your most likely candidates for offering pensions are large bureaucratic titans. Why? Because if you are going to offer your current and future employees a pension, then you'd better damned well be confident that your organization is going to be around 20, 30, or 40 years down the road when it comes time for your employees to retire and collect on what you have promised them. And that can be a problem in the private sector or sphere because in a reasonably free market economy, there are no such guarantees that any company will even survive that long. Indeed as one can see in the United Airlines case, the competitive situation facing an entire industry will change over time. New competitors can enter the game and threaten the very existence of a private firm which has promised its employees a pension scheme to the point where that firm may be faced with having to ditch the pension scheme or fail. The real shame of the UAL case was that management and the lawyers still came out winners in the whole deal, as the legal bill for the UAL bankruptcy ran well into the hundreds of millions of dollars. Meanwhile management at UAL continued to earn bonuses.

What the Frontline program really did bring forth is the idea that we as a society have decided over the past 25+ years to place an enormous amount of the burden for retirement on employees themselves via the offering and expansion of 401k programs. The problem here is, as the Frontline program points out, is that people will effectively differ in their skills, temperments, and desire to put in the necessary time, money, and effort to make such savings programs work well for them.

I myself spent several hours this morning digging out old 401k statements which I have kept over the years. I then wrote down what my 401k plan totals were and started doing the math on how well I have done in managing my investments over time. I will not indulge the public on the exact numbers, but let's just say that you should not be taking financial advice from yours truly. I have statements that go back to 1999 and I believe that I started investing circa the beginning of 1996. I will have made about 6.5% on my investments this year. I made 12.3 percent in 2005, probably my best year. In 5 other years, I managed to get a between 0 - 8% gains, while one year I actually lost 2.3%. That was in 2001 when the general market condidtions were poor in the aftermath of the stock market bubble popping in 2000 - 2002 and September 11, 2001.

Now then, VLICA has recently changed its 401k custodian. For all this time it was Fidelity Investments. I have to admit that I am extremely happy that VLICA has done this. Quite frankly, our investment options with Fidelity sucked. I tried to pay attention to what the markets were doing, diversify, and all the rest of that. But no matter what I tried, it seemed that I just couldn't get anything to come my way. Our new system offers many more options and I feel much more confident that I can do better with what is on offer.

Now none of this is to deflect blame from myself as why my investments haven't done well. Through sheer effort over a long period of time, I have managed to accumulate a fair sum of money, even though most of my investments were made after the go-go 15-20% per year gains of the 1990's. One could even factor in that the markets as a whole were not the greatest places to be in over the past 5-6 years. Still, provided nothing goes wrong (knock on wood), I have a good shot at being one of those people who actually get to have a decent retirement. But it really didn't help having Fidelity as my 401k company. Indeed I have an old IRA from a 401k rollover with a previous employer which has consistently outperformed my Fidelity investments even though I did practically nothing with it. And in order for me make it through to retirement Nirvana, I will still have to keep socking a lot of money away for a long time to come and anything can happen along the way which could derail those plans. I can say that I am also one of those lucky souls who still is covered under a pension, but VLICA could be bought out, fail, or underfund their defined pension scheme. I am not counting on VLICA to be there, nor am I counting on collecting anything from Social Security. I consider Social Security to be an immoral thing anyway.

Enough for now. Happy reading!

TMW

Posted by The Mighty Wizard at 11:38 PM
This entry was posted in the following categories: America

July 04, 2006

An almost relaxed 4th of July and of watching the World Cup

I spent America's Independence Day trying to recover from 3 power outages to the data center which I work in which have occurred over the past 10 days. We are reaching the limits of the power feed which was set up for VLICA's data center 12 years ago. Major reengineering will be required for the future.

In the meantime, I have been indulging myself over the past month by doing a rather unAmerican thing. I have not been watching baseball (I hate the sport - it's a sport for cows and pastures), nor have I watched a professional NBA game in months. Rather, every 4 years I get swept up in watching the World Cup in soccer.I had three bets going, of which I won one and lost the other two. I expected Germany to make it to the finals, but watched the showdown between Italy and Germany today, where the Italians wrestled down the hosts 2-0 in overtime. At the same time, I am depressed that the French are still in it. Not again! Damned Frogs!

Otherwise, the news has been dominated by the usual BS on the political fronts. Former House Republican Tom Delay's lasting legacy, a redrawing of congressional districts in 2003 - 2004, rather than right after the beginning of the decade 10 year Constitutional census, was upheld. This brings up the specter of state legislatures redrawing congressional districts multiple times per decade. Sigh... another tradition broken.

Locally, the news is that NASA is attempting another space shuttle launch. The talk was that if this fails, then the program will be shelved. The problem with this idea is that the space shuttle is a government program and once a government program is set in motion, it becomes immensely difficult to disbandon. I do hope there is another problem so that the space shuttle can finally be sent to its well deserved grave.

Posted by The Mighty Wizard at 11:35 PM
This entry was posted in the following categories: America

April 30, 2006

We want cheaper gas- NOW!!! And tax the Oil companies - NOW!!!

Well well well. $3 per gallon gasoline has reappeared and the American public is going ballistic. The conspiracy theorists are having a field day with the idea that the oil and gas companies have gotten together to line up billions in profits on the backs of the hapless and helpless American drivers. The air is thick with calls to enact so - called "windfall profits' taxes on the oil and gas companies. Nevermind that the oil and gas industry is making only 6 - 10 percent profit on their gross revenues while Yahoo, Apple, Google, and Microsoft routinely have been notching up 20% profit margins. Never mind that those billions in profits result from tens or hundreds of billions in gross revenues. Nevermind that the oil and gas industry has to pull of some incredible feats of engineering to get oil and gas out of fields that are located 150 miles offshore in the Gulf of Mexico. Nevermind that India and China, with combined populaions of 2.4 billion people, are growing at 7-10 percent per year and that milions of new drivers are emerging into new auto markets. All that Joe Average needs to know is that the oil and gas companies are making billions in profits while they are paying $3 per gallon of gas. It's obvious that we are ripping off Mr. and Mrs. Joe Average.

And what to do about this matter? Can Congress allow drilling in the Artic Wildlife Reserve (ANWAR)? No! How about off the coasts of Florida and California? No! Do people want more refineries to be built? Not in my own back yard they won't be built! Meanwhile, Congress toys around with ideas like $100 rebates and windfall profits taxes which will do nothing more than discourage oil and gas companies from looking for more oil and gas. After all, why are you in business Mr. and Mrs. Joe Average? To make a profit. And what would you do if the government came along and confiscated your profits? Probably quit working. That's what happend in Communist countries - and I know since I once lived in one.

Oil and gas markets have supply and demand curves which are both inelastic in the short run. What that means in plain English is that neither supply nor demand for oil and gas will change very quickly in the immediate future, though the industry will try to start producing more oil and the public will make adjustments to prices over a longer period of time. You simply cannot build a refinery overnight and you cannot start production of an oil and gas field off the shores of West Africa overnight either. Projects often take several years of planning, acquiring land rights, shooting seismic data to appraise the fields for their producing potential, then building and moving the production rigs and platforms into place to start production. As for the buying public, you might start by cutting out marginal trips which you have a choice to make. I have already read about 5-6 accounts in the media of people who used to drive out to the country every weekend to smell the roses or to see their grandkids who live 90 miles away have quit taking those kinds of trips in their cars or reduced the frequency in which they indulge in such things. Some groups such as older people on fixed incomes or younger people might gravitate to public transportation or motorcycles to save gas. As time goes on, many people will start to pay more attention to how much gas mileage their next vehicle will get. Once again, the buying public can make some decisions right away, but other decisions will take more time.

Well how about this suggestion: Since a typical American car driver drives about 13,000 miles per year, how about if we enact a permanent $1,000 tax cut and slim down on our federal government whose budget is expected to be $2.7 trillion dollars! If the "typcal" auto driver gets 20 miles per gallon in their automobile, then that would mean that they consume about 650 gallons of gas per year. Since prices for gas have gone up about $1.50 gallon over the past 3 years, then $1.50 per gallon x 650 gallons equals $975. A $1,000 tax cut given to every American household would amount to about $100 billion, or a mere 4 percent of federal revenues.

I can hear the hysteria coming up now over such a suggestion. Don't you know wer are fighting a "war on terror"? Don't you know that old people are entitled to prescription drugs, Medicare, Social Security, and Medicaid? Don't you know we have to pay for the Transportation Security Agency (TSA) to keep us safe from the terrorists? WE JUST CAN'T CUT TAXES! AHHHHH!!!!!!

Now I work for VLICA and American oil and gas company. Nobody remembers back in 1998 when the price of a barrel of oil went down to $12 in the aftermath of the Asian economic crisis. Nobody cared when I saw lots of good people loose their jobs in this business. But now all I hear is that it's all our fault, that we don't deserve those profits, and that we have to care - DAMN IT! All I have to say is that you better get used to it, buddy. Welcome to the world of the oil and gas business.

Pointers: Follow the commentary at Jane Galt's website. Be sure to read economist Arnold Kling's remarks on this situation.

Posted by The Mighty Wizard at 07:47 PM
This entry was posted in the following categories: America

April 13, 2006

A day with the Cato Institute

Several weeks ago, I received a letter from the Cato Instituteadvertising that they were putting on a day seminar here in Houston. On the agenda, entitled "Policy Perspectives 2006" were education analyst Andrew Coulson, Energy spokesperson Jerry Taylor speaking on the case against "energy independence", and featured speaker Bruce Bartlett who has recently written a book entitled "Impostor - How George W. Bush Bankrupted America and betrayed the Reagan legacy". I had the week off and since it was a chance to network, I decided to pony up the $50 and go.

Coulson was the first speaker. Coulson started his speech by stating that he was aware of the never ending saga known as the Texas public education finance game. He did state that he had not had enough time to intimately familiarize himself with all of the grisly details of public education in Texas, but he already knew enough to state that few or none of the interest groups (or actors) had the interests of children at heart (amen brother!). Coulson went on to say that within the school choice movement, there is no consensus on how to achieve universal access to education. Details however, do matter and matter big time with regards to education and outcomes.

Coulson said that amongst his studies of education, he picks several criteria for achieving education excellence (I might have missed one or two here):

1) Freedom and competition

2) The profit motive in general ( though this is not a universal. Religious schools might not care about profit).

3) Parental choice and direct responsibility for full or partial payment by parents for education.

4) Teacher choice on how to teach and what to teach.

Coulson cited studies of other educational systems in India and Indonesia where having parents pay a certain percentage of school fees - say 20 - 30 percent - add up to a big difference in outcomes. However this trend of increased parental direct financial involvement getting better outcomes does not fully extend all the way through having parents pay up to 100 percent of the financial tab. The improvements in outcomes become quite marginal once the parents are paying 80 percent or more of the bill.

Coulson spoke of an issue which I have come to discern about public schools, namely that certain conflicts are irreconciliable within a public school system. Such topics include whether to have school prayer or references to God in public schools (some people want them while others don't), whether or not to teach sex education in schools (again some say yes, while others say no), whether to teach classes in English or have classes in the kaleidescope of other languages (namely Spanish) because parents of those kids are immigrants (yet eligible to vote), and whether to teach creationism or evolutionary biology. Losing the battle in the political arena and subsequently running to a judge in order to get a ruling in your favor does nothing to solve the problem. As with everything else in politics, someone is going to win and someone is going to lose. I have little doubt that this is a reason that religious schools and home schooling have been gaining popularity over the past 20 years.

So what about universal access and the financing problem? As we know, there are many poor people who simply cannot afford to pay the tuition to send their kids to school. Coulson thinks that the way towards solving this problem involves implementing a two part tax credit. Part 1 involves parents with kids simply getting a dollar for dollar tax write off for paying for tuition. Part 2 involves setting up a tax credit using "scholarship funds" for means tested low income families. Tax write offs could be used by wealthier people to donate to these pools of money. Coulson says that no State has both, but some have either one or the other. The evidence so far with regards to part 2 is that money does seem to flow from richer people to poorer ones, but the jury is still out. As far as legal issues go, some courts like the Arizona Supreme Court, have held that since no tax dollars are paid directly to the state, then tax credits pass muster with regards to to the issue of worrying about whether public monies are going towards religious education.

The next speaker at the symposium was Jerry Taylor. Taylor, a boisterous and confident figure, set out to demolish the argument that America needs to be "energy independent", an idea that seems to have Washington enthralled at the moment. He started off by saying that broadly speaking, the case for using foreign suppliers for energy is the same one as the case for free trade. The topics which Taylor dealt with included 1) Do we really need protection against so called supply disruptions? 2) The "oil weapon" issue. 3) Keep the money at home argument. 4) The "Thomas Friedman" argument which says that Al Queda has been growing rich and fat off of $67 per barrel oil, ergo we can kneecap Al Queda financially by reducing dependence on Middle East oil. and 5) The ethanol / oil shale / subsidies arguments.

Taylor stated that in 1978 - 1980, the United Kingdom was self sufficient in oil and gas reserves. In fact, the North Sea fields were allowing Great Britian to export crude. So did this state of affairs allow the U.K. to be completely buffered from the world oil shocks that gripped the market during that time? The answer is no. Prices did go up the U.K. just as they did everywhere else. Now one could argue that a self sufficient regime can "protect" their citizens from oil shocks by pricing oil at below market prices, but that just leads to overconsumption, and social losses from not reaping the true cost of producing oil.

"Defang the oil weapon": The 1973 oil embargo largely resulted in oil companies and petroleum consuming countries having to buy their oil not directly from OPEC, but from countries which OPEC would sell to. Ergo, the 1973 embargo, though it caused a great deal of market convolutions and brief price shocks, ultimately was a wash.

"It keeps our money at home" argument: Money is fungible. Who knows where it ends up at.

"The Thomas Friedman argument": We need to become energy self sufficient because lots of money is going to Arab countries which are sympathetic to Al Queda and we have an opportunity to kneecap Al Queda through cutting off their flow of money which obviously comes from the river of petrodollars now flowing through the hands of the Oil Shieks.

Taylor pointed out that Al Queda did its greatest expansion during the 1990's, a period of low oil prices. Taylor also mentioned that the 9/11/2001terrorist operation was done for $400,000. In otherwords, terrorism can be done on the cheap. There seems to be little merit in Friedman's arguments.

We can be self sufficient through oil shale, tar sands, and ethanol: Taylor pointed out that gas prices in Europe are anywhere from $4.80 - $8.00 per gallon and yet Europe has little or no ethanol. The U.S. has an estimated 750 billion barrels of oil shale (I don't know if this is true), but oil shale becomes economical at something like $95 per barrel (2005 dollars).

Taylor had other things to say, such as about the Brazilian ethanol program and the heavy subsidization of nuclear energy, but I won't write about them here.

The featured speaker at the seminar was Bruce Bartlett. Bartlett started his speech by describing, George Bush the elder, who famously called Ronald Reagan's economic program "Voodoo Economics". Bartlett pointed out that many critics of Reagan missed a central point of Reagan's philosophy on taxes, namely that even though Reagan did acquiesce to raising some taxes, he did not raise tax rates on items such as income. Bush the elder in the 1990 budget deal did raise tax rates, even as he said that he sat next to Reagan for 8 years and supposedly learned from the master.

Bartlett then moved on to the subject of George Bush the younger. Bush's idea was "compassionate conservativism", meaning (he thinks) a hand up, not a hand out. Bartlett had his doubts when he learned that Bush was going to be running for the White House, but he realized that Bush needed ideas to get elected. But one of the first things Bush did when he got in was to call up Ted Kennedy and say "let's do an education bill". This was "touchy feely" stuff, with tons of money for bureaucracies. Some testing was thrown in, but Bartlett says that the states get to do the testing, by which they arrange these tests so that they can capture back the most federal money back that they can.

Other issues that Bartlett crucified Bush the younger on were steel tariffs, the so called "Campaign Finance" bill, which would have had the Founders rolling in their graves, and most of all the Medicare Drug bill, which will probably add an unfunded liability of something like $18 trillion dollars (I know, but who is counting). By doing this, Bush broke a fundamental axiom of Conservativism, namely that you NEVER put on more entitlements on the backs of taxpayers. One other note about the Medicare drug benefit which I was not aware of, and that is that some large corporations (IBM, GE, GM, Ford, etc) have long had a policy of paying for drugs for retirees. These companies will now get a check from Uncle Sam for doing what they used to do by themselves. Yet another classic example of what used to be a private activity sponsored by a private party which was an effort to attract employees to work for them now being taken over by the government (nee taxpayer) in an effort to get some program or legislation passed.

As a side note, Bartlett mentioned that he was fired last year from the National Center for Policy Analysis, a Dallas based think tank. The reason for this was that the NCPA didn't care very much one way or another about President Bush, but a lot of their contributors did, ergo since they didn't like what Bartlett was saying - out the door Bartlett went.

The fundamental point that Bartlett was trying to drive home was that he believes that Bush the younger didn't have to do any of these things to help himself politically. Did Bush think that by doing a bill with Ted Kennedy that the NEA was going to suddenly start supporting Bush and the Republicans? No. By caving in for steel tariffs, were labor unions going to vote more for Bush? No. By spending billions and trillions on the Medicare drug program, did Bush think that the old people were going to think that Republicans were better able to deal with the entitlements problems than Democrats? The answer according to Bartlett was no. So, in Bartlett's view, Bush would have been reelected in 2004 anyway and he has fundamentally hurt the Republican party in the midterm and long run for illusionary, alleged, short run electoral gains.

Enough for now. It was an interesting, though somewhat predictable day. I did give a small sum of money to Cato while there, breaking a previous promise to myself not to give any money to anything associated with Washington D.C. (what good will it do anyway?). Cato, even with its recent scholarship flaps, is still the most innovative think tank around. It's a shame that the Republicans in the White House and in Congress don't act on their ideas.

Posted by The Mighty Wizard at 10:13 PM
This entry was posted in the following categories: America

February 11, 2006

On upcoming changes in government accounting rules

Recently when scouring the Internet for material on the issue of American cities and budget issues, I came across some very interesting stuff concerning the accounting of promised benefits that are accrued to state and local government retirees. My first inkling that something in the air came from reading a New York Times article on pension and medical benefits that was written in the aftermath of the N.Y.Transit Authority strikes which were held over the Christmas holidays in December 2005. Here is a reprint of the article:

------------------

Huge Rise Looms for Health Care in City's Budget

By MARY WILLIAMS WALSH
and MILT FREUDENHEIM
Published: December 26, 2005

When the Metropolitan Transportation Authority proposed making new workers chip in more to its pension fund than current workers do, it was enough to send the union out on strike and bring the nation's largest mass-transit system to a halt for three days.

But the cost of pensions may look paltry next to that of another benefit soon to hit New York and most other states and cities: the health care promised to retired teachers, judges, firefighters, bus drivers and other former employees, which must be figured under a new accounting formula.

The city currently provides free health insurance to its retirees, their spouses and dependent children. The state is almost as generous, promising to pay, depending on the date of hire, 90 to 100 percent of the cost for individual retirees, and 82 to 86 percent for retiree families.

Those bills - $911 million this year for city retirees and $859 million for state retirees out of a total city and state budget of $156.6 billion - may seem affordable now. But the New York governments, like most other public agencies across the country, have been calculating the costs in a way that sharply understates their price tag over time.

Although governments will not have to come up with the cash immediately, failure to find a way to finance the yearly total will eventually hurt their ability to borrow money affordably.

When the numbers are added up under new accounting rules scheduled to go into effect at the end of 2006, New York City's annual expense for retiree health care is expected to at least quintuple, experts say, approaching and maybe surpassing $5 billion, for exactly the same benefits the retirees get today. The number will grow because the city must start including the value of all the benefits earned in a given year, even those that will not be paid until future years.

Some actuaries say the new yearly amount could be as high as $10 billion. The increases for the state could be equally startling. Most other states and cities also offer health benefits to retirees, and will also be affected by the accounting change.

"It's not likely that New York City has a way to fund current costs, its pension obligation and fund retiree health care without raising taxes or cutting services," said Jan Lazar, an independent consultant specializing in city retirement finances. "These are huge numbers, not a one-time cost."

The pay-as-you-go accounting method that New York now uses greatly understates the full obligation taxpayers have incurred because it does not include any benefits to be paid in the future. Most other state and local governments that offer significant health benefits to retirees use the same method and will also have to bring newer, larger numbers onto their books in the next two or three years.

The increases will vary from place to place, but New York is expected to be at the high end because it offers richer benefits than many other cities and has many police officers, firefighters and sanitation workers who can retire with full pension at age 50.

At the transit talks, pensions were pulled off the table in the end, and the final settlement is likely to reflect an increased health care payment by current workers, not retirees. But even though New York was pushed to a standstill over proposed changes in transit workers' pensions, virtually no one in government, outside of a tiny group of experts, is talking publicly about the far more daunting bill for citywide retiree health insurance.

The total value of the pensions promised is probably bigger, but money has already been set aside to pay the pensions, to a significant degree. For retiree health care, nothing stands behind those promises except the expectation that taxes will be raised enough in the future to cover them.

At last count, the city's biggest pension fund - the one for about 300,000 workers not covered by police, firefighter, teacher or school workers plans - said it had $42 billion set aside in trust for the $42.2 billion it owed. No money at all has been set aside for that same group of city employees' post-retirement health care.

Determining the correct amount will be "a tremendous undertaking," a city official said, adding that rapid changes in the overall health care environment, including the Medicare and Medicaid programs, make it extremely difficult to see what future costs will be.

No one really knows what the total health care obligation is for the 836,000 people already retired or now working for the city and state, much less who will pay for it. Neither side in the transit dispute, for example, has publicly mentioned retiree health care.

A small group of city officials has been quietly working for months, gathering data on the dozens of city retiree health plans, large and small, but the process is not expected to be complete for months.

Meanwhile, a handful of other states and cities have already done the same calculations. If their results are any guide, New York City and the state could ultimately find that they have each promised their retirees health care worth tens of billions of dollars. The transportation authority, a state entity whose retiree health care costs are partially borne by New York City, could find that it has already promised more than $5 billion worth of benefits to its current and future retirees.

At the moment, the transportation authority is spending about $380 million a year on health care for its unionized workers. That covers both active workers and retirees; while a precise breakdown does not exist, citywide demographics suggest that about $165 million of that may be for retirees.

Once the new accounting rule is in force, the transportation authority may find itself scrounging for 5 to 10 times that amount every year, $825 million to $1.6 billion, if an accounting rule of thumb devised by one of the chief credit rating firms, Fitch Ratings, holds up. By the time anybody knows for sure, the authority will probably be halfway through the union contract it is still struggling to complete.

To find the money, the authority will have to turn to "higher fares, less service, or more pressure on the city government to fork over subsidies," said Robert A. Kurtter, an analyst with Moody's Investors Service who monitors New York's finances. The city's retirement system, meanwhile, will be struggling with the same problem on a much larger scale.

The city has been offering free health care to its retirees for decades. In the private sector, companies that once offered health insurance for retirees began to stop doing so in the 1990's, for a number of reasons, including accounting rule changes like those now coming into effect for states and cities. Today, only 38 percent of companies with more than 200 workers offer retiree health insurance, according to the Citizens Budget Commission, a group that analyzes city and state finances.

An even smaller number of companies, 9 percent, pay any part of the premiums that can be used to buy optional supplements to Medicare for retirees over 65. New York City and the state both pay the full cost of Medicare supplements for their retirees.

"They've stuck with that, although the rest of the world has changed," said Charles M. Brecher, research director of the Citizens Budget Commission and a professor of public and health administration at New York University's Wagner School of Public Service.

While the private sector was curtailing retiree benefits, New York City and the state have been preserving and even expanding benefits in bargaining with their unions. Both sides focused mainly on the current cost of the benefits. No one was paying much attention to the deferred cost of the benefits that would come due once current workers retired. Meanwhile, health costs resumed rising at double-digit rates, and a large share of the public work force began to reach retirement age. Currently, the city administers a big health plan for its workers and retirees and contributes to dozens of smaller retiree health plans that are run by individual unions and supplement the city's coverage.

The calculations are now being done, privately, because of the accounting rule change. In 2004 the Governmental Accounting Standards Board, a nonprofit body that writes accounting rules for governments, issued a new standard for retiree medical plans. It roughly follows a similar standard issued in 1994 for public pension plans.

But rather than requiring local governments to finance their retiree medical plans, the rule simply requires them to lay out a theoretical financing framework, then report how they are dealing with it. Localities that create trust funds will get certain financial rewards. Localities that do not put money behind their promises risk being punished by falling credit ratings. When a city's credit rating falls, it becomes harder and more expensive to issue bonds or otherwise borrow money.

Municipal bond analysts at Moody's and Standard & Poor's said they were taking a wait-and-see stance. "How the city addresses the burden is another question - by reducing the benefit or funding the cost, or allowing this liability to mount," said Mr. Kurtter, of Moody's. If the amount grows, "at some point it will create a credit issue," he said.

Mr. Kurtter said city officials have acknowledged privately that the amounts will be large, "in the billions, they say."

Labor officials say that even though the change is just a new way of accounting, not a price increase in the conventional sense, they fear that putting a number on the city's promises for future retiree health care will lead to sticker shock and renewed calls to cut benefits.

"There's a lot of fear that this kind of disclosure will reignite the whole battle of who assumes retiree health costs," said Randi Weingarten, the president of the United Federation of Teachers and the chairwoman of the Municipal Labor Committee. "Even though it should be a data point, it will be used as a hammer."

--------------------

The blather about new accounting rules coming into effect put me into search mode as to what those accounting rules are. Here are some links which I found concerning those rules:

This article from HR Policy.

From the HR Policy article, I followed
this link
to the Government Accounting Standards Board (GASB).

The Employee Benefits Research Institute is a good site on these topics.

It was reported upon Houston Mayor Bill White's ascention to office that the municipal pensions of the CoH were $1.9 billion or more in debt. I wonder if that figure is even higher than that.

Posted by The Mighty Wizard at 11:52 AM
This entry was posted in the following categories: America

February 07, 2006

So businessmen are greedy?

In today's USA today, there was an article written about the trial of former Enron CEO's Ken Lay and Jeffrey Skilling. Apparently there is a juror who managed to make it on the bench who seems to be somewhat anti-business.The juror, whom the defendant lawyers motioned to have removed from the jury but whose motion was denied by U.S. District Judge Sim Lake, said that many businessmen who happen to build companies were driven by greed. No kidding? What planet did you happen to grow up on pal?

As a counter to such ideas, I recommend reading this link, this link, and this link.

Enjoy.

Posted by The Mighty Wizard at 10:21 PM
This entry was posted in the following categories: America

February 04, 2006

On United Airlines emerging from bankruptcy

Ever since I went to China for a previous VLICA (very large industrial corporation of America) 15 years ago, I have been a frequent flier with United Airlines.Over the years, I've watched with some interest as my airline boomed and busted with the world's economic winds of change. It didn't surprise me one bit that UAL declared bankruptcy in the wake of the September 11, 2001 terrorist attacks. It would have been the latest in the long list of corporate airline casualties which has happened since airline deregulation occurred in the late 1970's.

One thing that has puzzled me was this: how was it that UAL continued to operate under bankruptcy protection? UAL was in bankuptcy for a good 38 or so months. Wow! I do know that the airline industry as a whole received a good $15 billion or so handout from the U.S. government in the wake of the 9/11 attacks for having the skies shutdown, but predictably the recipients of those handouts burned through them without doing anything and then went back to ask for seconds. The second time, however, Uncle Sam refused and left the industry players to their own fates. So how was it that UAL continued to limp along when it should have gone under?

I found an answer to this when I received my weekly issue of the Economist a number of weeks back. In one recent issue, they covered the UAL bankruptcy proceedings and went on to say that there were some very powerful and very interested private parties which were not interested in seeing UAL go under. Two of these actors were J.P.Morgan Chase bank and the finance arm of the General Electric Corporation.The reason J.P.Morgan Chase didn't want to see UAL fail was because of people like me, who hold credit cards which are tied to UAL's frequent flier mileage program. As for GE, they build and sell vast numbers of jet engines to the airlines. It is likely that GE crunched the numbers and decided that they would be better off in keeping UAL up in the air.

As can be inferred by this article which was posted in the Morningstar business paper on January 9, 2006:

--------------------------------


United Airlines secures $3 bln bankruptcy-exit loans

01-09-06 03:34 PM EST

NEW YORK (MarketWatch) -- United Airlines' operating company said Monday it secured more than $2.7 billion in loans to ease its exit from bankruptcy, which is scheduled for Feb. 1.

All together, UAL Corp. (UALAQ) nailed down a six-year, $3 billion agreement, including $300 million in a revolving credit facility, with financing by J.P. Morgan (JPM) and Citigroup (C) . The loan is secured by substantially all of United's assets, including aircraft, spare parts, rights to international routes and real estate.

United's scheduled to present its reorganization plan at a Jan. 18 hearing, with an official Chapter 11 exit coming two weeks after that.

A majority of all United's creditor classes have approved the exit plan, with the results of the balloting forwarded to the U.S. Bankruptcy Court for the Northern District of Illinois, which is overseeing the case, the company said.

Elk Grove Village, Ill.-based UAL sought bankruptcy protection from creditors in December 2002, overwhelmed by operating costs as well as health-care and pension obligations to its 55,000 employees, not to mention fierce competition from low-cost carriers like Southwest Airlines Co. (LUV) in the wake of the Sept. 11, 2001, terrorist attacks.

UAL has turned over its pension obligations to the federal Pension Benefit Guarantee Corp. Until that move, it had left underfunded its defined-benefit retirement plan by about $9.8 billion.

General Electric Co. (GE) will run the syndication for the loan, which Standard and Poor's asigned a 'B+' rating to on Monday. The debt ratings company said it expects to assign a 'B' corporate credit rating, with a stable outlook, to UAL when it emerges from bankruptcy.

Moody's assigned the loan package a "B1" rating and UAL a corporate "B2" rating.

-------------------------------

It pretty much looks as though this loan syndicate will end up owning UAL if UAL doesn't pay off its loans. The good news is that UAL is leaner and tougher than it was 4 years ago, at the expense of trashing its employee pension plans, 20 percent of its aircraft, and sacking 30 percent of its workforce. There were other items on the slimming down agenda, but it should suffice to say that my airline is safe for now.

Ciao for now - TMW

Posted by The Mighty Wizard at 02:14 PM
This entry was posted in the following categories: America

January 22, 2006

Eminent Domain this! - New Hampshire residents threaten Eminent Domain seizure of Justice David Souter's farmhouse

Story links can be read:

Here

the Houston Chronicle

and at CNN

One New Hampshire lawmaker had this to say:

State Rep. Neal Kurk, a Weare resident who is sponsoring two pieces of eminent domain legislation in New Hampshire, said he expects the group's proposal to be defeated overwhelmingly.

"Most people here see this as an act of revenge and an improper attack on the judicial system," Kurk said. "You don't go after a judge personally because you disagree with his judgments."

But I beg to differ. I have come to the conclusion that the only way that political classes everywhere, and that includes judges, lobbyists, and pressure groups everywhere, are ever going to fear the public is to simply shove their versions of public service which they attempt to inflict on us right back down their throats. In other words, what is good for the goose really is good for the gander. If the majority of the SCOTUS Justices forgot to read the Constituion (the document reads that land will be taken for "public use," not for a "public purpose"), then we the people MUST make sure that the Justices personally face the logic of their own decisions.

And by the way. When are President Bush's daughters (and the children of members of Congress) going to be conscripted into military service so that they can be sent off to Iraq?

Also see this link.

TMW

Posted by The Mighty Wizard at 01:30 PM
This entry was posted in the following categories: America

January 02, 2006

Of Doug Bandow and Jack Abramoff (or whatever his name is)

One of the boiler plate topics in both Washington and Houston surrounds the high jinks of our own Sugar Land area Congressman Tom Delay. Congressman Delay has been indicted for something or another (it is hard for me to believe that I once breathlessly followed such things) and there is some high powered lobbyist Jack Abramoff (I do not know if this is his correct name and I could really care less) who is supposedly guilty of breaking some lobbying rules - yawn.

What is of a bit more interest to this political commentator who is slowly losing interest in political commentary is that there were think tank "fellows" who took payoffs from Abramoff, most notably The Cato Institute's Doug Bandow. Since I link to Cato on my website and still on occasion read their pages, it was of some interest to me as to the fact that Bandow took payoffs to write favorably about Abramoff's Indian casinos (or whatever it was that Abramoff wanted Bandow to write about). Since I plead guilty to not having read Cato's website in a while, I apparently missed that Cato came out against drug reimportation, ergo selling out their free trade dogmas.

With all of this in mind, I will link to Lew Rockwell's column on the entire affair.I particularly liked his links to Cato's 10 biggest donors.This should be another website I should link to. I also like this paragraph on so called "Progressive" journalism and "good government". I think the Houston Chronicle's journalists should take note:

"Something of the same Progressive-style naďveté exists with the longing for pure, unadulterated journalism, journalism that is not influenced by lobbyists or peddlers but is directed solely toward the good of all. That is a ridiculous notion. I prefer the old 19th-century style journalism in which party hacks made their attachments explicit. But of course the political parties would much prefer it if the same case for their looting could be made without the motives being disclosed."

Every time I read the Chronicle breathlessly write about the misfortunes of Tom Delay and his cronies, I think of the writing above. There is no "Progressivism", only Progressive Enslavement. Instead of looting for Delay, his suburbanites, and for freeways, the Chron wants to loot for the Greater Houston Partnership and Metro. But the least I can say for Delay is that most people want to live in the suburbs and drive their cars around to get to places. Ergo, I throw my lot in with Delay and his looting crowd.

Note to self: I will never write a check out to Cato - or for any other Washington area think tank, political party, or interest group. They all have enough money for whatever it is that they want to do. I need to remember to stay local, as some of my friends don't have a dime to their name.

Posted by The Mighty Wizard at 09:11 PM
This entry was posted in the following categories: America

September 06, 2005

Hurricane Katrina - a Survivor's tale

Today, while toiling away at the VLICA (Very Large Industrial Corporation of America), I received an email from a senior coworker of mine who, unbeknownst to me, had a daughter who was living in New Orleans. What follows is the email I received. The last names of people in the email are changed to protect their identity:

--------------

Subject: FW: Out of New Orleans

As many of you know, my daughter, Christina, lives in New Orleans. She was evacuated Thursday afternoon and I was able to pick her up in Baton Rouge about midnight. Her story is below.

Thank you all for your concern.

Sherry

---------------

From: Christina (name omitted here) [mailto:christina (email omitted) .com]
Sent: Tuesday, September 06, 2005 10:07 AM
To: Sherry
Subject: Out of New Orleans

Hello family, long-lost friends, & neighbors:

Thank you so much for your concern and offers of support. I really appreciate your kind words and wish that I hadn’t caused you to worry. Jordan, Cha Cha the cat, and I are safe and very comfortable at my Mom's house in Houston.

Although being trapped in New Orleans was difficult, I was very fortunate -- virtually untouched by the horrific conditions so many are still struggling to survive. Although it is impossible to know, there is a chance that my 2nd floor apartment is intact and dry. For the next few weeks/months, I will stay with my Mom, volunteer with refugee relief, try to rescue friend's trapped pets, and if possible, work with the local Planned Parenthood.

If you were affected by the disaster, please let me know if there is anything I can do to help. If you are taking refuge in Houston, I would love to get together.

Some of you have asked for information about my experience in the past week. Below you will find an attempt to relay some of what happened and an awesome article by Jordan. Please share this with anyone I may have missed.

Love,

Christina

__________________________________________________________________

Diary from New Orleans by Christina & Jordan, August 27 - September 2, 2005

Saturday, August 27: We learn on Saturday that Hurricane Katrina has unexpectedly changed course and could be heading directly for New Orleans. Governor Blanco is on the news repeatedly asking residents to “pray down” the hurricane to lessen its strength. After checking with friends and reading news reports, we decide to keep a close watch and make a decision in the morning. We are reluctant to leave because of a harrowing experience trying to flee Hurricane Ivan with carsick Cha Cha. The evacuation traffic jam moved only 2 miles per hour, leaving many people stalled on the road without gas or hope of escaping the storm. It didn’t help that the last two hurricanes were false alarms. After going to several stores and waiting in long lines, we purchase water, batteries and food. There is a great sense of camaraderie in the lines as everyone prepares to weather the storm.

Sunday, August 28: As it becomes clear that this is the big one, everyone is calling everyone “Are you staying or going? Where are you staying? Are you bringing your pets? What should I do?” After deciding we missed our opportunity to get out safely and could be trapped on the road during the hurricane, we decide to relocate to a more sturdy location, an apartment complex built out of an old can factory in the Midcity neighborhood. The building is five stories high, built of concrete and brick, with several hundred fairly plush apartments. There are rumors (false, we find out later) that Mayor Nagin is staying in the building, and that the complex has a power generator for when the power cuts off. There are seven of us in the apartment, with four cats. Upstairs are three more acquaintances, with four dogs and three cats. The night of the hurricane passes fairly smoothly, with poker and pictionary.

Monday, August 29: The next morning, we survey the streets outside. There has been some flooding and window & roof damage that we can see through binoculars. A few people explore the neighborhood in boats, and report extensive damage, but overall we feel as if New Orleans has once again escaped fate. Later in the day, we hear reports of much greater flooding in destruction in the ninth ward and lower ninth ward neighborhoods, New Orleans’ most exploited communities. Tomorrow, we decide, the water will lower and we’ll walk home.

Tuesday, August 30: We wake up to discover that the water level has risen several feet. Panic begins to set in among some. We inventory our food and water and find that, if we ration it tightly, we have enough for five days. As we discuss it, we repeatedly say, “Not that we’ll be here that long, but if we had to...” Others continue to explore the area by boat, helping people when possible. The atmosphere outside is like the film Dawn of the Dead but with water instead of zombies - a sort of post-apocalyptic, slightly threatening world, where the streets are empty and the future seems uncertain. The flood water is a repellent mix of sewage, gas, oil, trash and worse. We meet some of our neighbors. Of approximately 250+ apartments, there are maybe 150 people in the building. Many of them, like us, are crowded 7 or 10 to an apartment, and few of them live there. Most of the building is empty. About 60% of the people in the building are black. Many in the building have no food and water. Some residents break open the building candy machine and distribute the contents. We talk about breaking into the cafe attached to the building and distributing the food. During the course of the day the water continues to rise over the tops of cars and into the first floor of the building, leaving us no common area other than the roof. We fill all containers with water (no longer potable) so that we can flush the toilet & wash the sewage water off our legs and feet. We try to conserve our batteries in the flash lights because it is pitch black in the halls and staircases even during the day. We turn on a battery-powered tv and radio, and then turn it off in disgust. No solid information, just rumor and conjecture and fear. All news is directed at people who have evacuated with announcers advising, “do not attempt to return to the city”. No tactical information is given for people who still need to get out, like evacuation routes and dry areas. Tomorrow, the news announces, the water level will continue to rise, perhaps 9-15 feet. Governor Blanco advises us to have a day of prayer. With all of the lights in the city out, the night sky is beautiful. We lie on our backs on the roof and try to take solace in the shooting stars.

Wednesday, August 31: White people in the building start whispering about their fears of “them.” There is talk of people in the building “from the projects and hoarding food.” There is talk of gangs in the streets, shooting, robbing, and lawless anarchy. However, we witness many folks traveling around in boats, bringing food or giving lifts. But the overwhelming atmosphere is one of fear. People fear they won’t be able to leave, they fear disease, hunger, and crime. There is talk of a soldier shot in the head by looters, of huge masses emptying WalMart and the electronic stores on Canal street. We hear the police are joining in the looting. There are fires visible in the distance. A particularly large fire seems to be nearby - we think its at the projects at Orleans and Claiborne. Helicopters drop army MREs (Meal Ready to Eat) and water, and people rush forward to grab as many as they can. After the third air drop, people start organizing a more even distribution. Across the street is a small narrow strip of land called “the island”, and helicopters begin landing there and picking people up. Two of our friends from the apartment convince a person with a boat to give them a ride to the island. Hundreds of people from the nearby hospital also make their way there, many wearing only flimsy gowns, waiting in the sun. As more helicopters come, people start arriving from every direction, straggling in, swimming or coming by boat. Late in the day, a helicopter hovers over our roof, and a soldier comes down and announces that tomorrow everyone in the building will be evacuated – no pets allowed. There are many tense conversations about what to do with our pets, “Is there enough food and water to leave them until we can return? Can we smuggle them out?” By nightfall all of the helicopters stop running and about 150 people are stranded on the island. Late in the evening, our two friends swim back to the building to spend the night after a day of unsuccessfully trying to get on a helicopter. All night you can hear the people trapped on the island.

Thursday, September 1: People in the building want out. They are lining up on the roof to be picked up by helicopters - three helicopters come early in the morning and take a total of nine people. Maybe 75 people spend the next several hours waiting on the roof for helicopters, but no more come. Down in the parking garage, flooded with sewage, a steady stream of boats takes people to various locations, mostly to the island. Our group fractures, people leaving at various times. With Cha Cha hidden in a bag we take a boat to a helicopter to a refugee camp on the interstate. A thousand people are crowded on the side of the road behind barricades, forced to sit in mud and trash. There are a few port-a-potties, but no trash cans. It is total chaos when a bus arrives because there is no organization. Families get separated. The individual soldiers and police are friendly and polite - at least to us - but nobody seems to know what's going on. The atmosphere among the refugees is friendly. Many people sit on the side, not even trying to get on a bus. Children, people in wheelchairs, and everyone else sit in the sun by the side of the highway. Everyone has a story to tell, of a home destroyed, of swimming across town, of bodies and fights and gunshots and looting and fear. The worst stories come from the Superdome. We speak to one man who describes having to escape and swim up to Midcity. Many trucks and helicopter arrive bringing more and more refugees, yet only two buses come in four hours we are there. Three of us walk out of the camp, considering trying to hitchhike a ride from relief workers or press. We get a ride from an Australian tv team who are good-natured and polite. They drive us to Baton Rouge where we sit on the street until Christina's mom arrives from Houston. While we sit on the street, everyone we meet is a refugee from somewhere - Bay St Louis, Gulfport, Slidell, Covington. Its after midnight, but the roads are crowded. Everyone is going somewhere.

-------

Wow... TMW

Posted by The Mighty Wizard at 09:51 PM
This entry was posted in the following categories: America

September 04, 2005

Hurricane Katrina, U.S. Federalism, public finance, and a reply to Paul Krugman, Rep. Carolyn Kilpatrick, and Rep. Charlie Melancon

So Mother Nature decided to pay us a real visit in the form of Hurricane Katrina. Katrina roared through Florida, then stalled in the Gulf of Mexico before turning on Mississippi, Alabama, and most notoriously the below sea level city of New Orleans. For the past week, the city of New Orleans was turned into a war zone when just 12 or so hours after Katrina hit, 2 levees which held back the waters of Lake Ponchatrain broke and waves of floods hit the city. Since that time, thousands of stories of looting, rapes, gunfire at people trying to make rescue attempts, and a general abandonment of the city by law enforcement were enough to make shake one's head.

Stories have been told of thousands of evacuees who gathered along the New Orleans Convention boulevard, watching and begging for help as police and guardsmen rolled on by. The head of New Orleans' Office of Emergency Prepardness was quoted as saying that food and supplies could not be located. Well, looters did a good job of locating them. It was horrible to hear stories of storm evacuees, sadly mostly blacks, who were again bullied about while they waited near the Superdome for help. New Orleans resident and Superdome evacuee Earle Young, aged 31, said they were treated like rats. The New Orleans municipal government located itself to Baton Rouge, while the levees broke and local law enforcement officers joined in on the looting of businesses and stores. Today, we hear claims by New Orleans deputy commander W.S. Riley that National Guard troops played cards while the disaster went on. Paul Krugman writes that:

"there were reports of Guard troops in The Sun Herald in Biloxi, Miss., "reporters listening to horrific stories of death and survival at the Biloxi Junior High School shelter looked north across Irish Hill Road and saw Air Force personnel playing basketball and performing calisthenics. Playing basketball and performing calisthenics!"

Today, we get the news that Louisiana Congressman Charlie Melancon saying that, "Americans must start asking tough questions" about their safety", and that "We must also be about the job of asking tough questions, my fellow Americans — questions about the health of our infrastructure and emergency response capabilities."

Meanwhile, scores and even hundreds of thousands of people have scattered across the country, leaving the disaster scene. Here in Houston, we are hosting tens of thousands at hotels and convention centers. Today, I wrote a check out for $300 to the Red Cross and gave 96 bottles of water to a nearby church which was hosting a charity drive. My company will match dollar for dollar what I have given in monetary donations and company volunteers await an assignment to be given to us by the United Way.

So what lessons do I derive out of all of this? Despite the yells that who do you look for to hold society together, who do you look to in order to curb crime and violence, and who do you look to for help (all of those answers being government), my conclusions are entirely different:

Go buy a gun because you can't rely on government to defend you when you are attacked, or when riots or natural disasters strike. You cannot rely on a government agency to get you to a safe place, or to treat you humanely even if they do tell you to get to a safe place. You cannot rely on government to give you good instructions on what to do in the event of a disaster. You would be better off to rely on yourself, your friends, family, and your neighbors for help. Riots and natural disasters like Katrina, the Watts and Rodney King Riots of 1965 and 1993 respectively show that the State - with all of its threats and coercive force - will walk away when under stress and only come back many days later to pick up the pieces after all the chaos, chest thumping, press conferences, finger pointing, and rising ethnic / racial animosity. If private actors or charity have braved the chaos to help others, they will be muscled out of the way. After all, they aren't needed anymore because the State is here!

I would have loved to have given away thousands more in charity, but sadly the United States Federal government will be taking about $6,000 - 7,000 away in taxes this year, meanwhile I will end up paying another $6,600 in Social Security taxes ($3,300 of which comes out of my pocket via my employer, and $3,300 withheld directly out of my check), my local property tax bill will be close to $3,000 this year, while I would guess that I will end up paying something like $2,000 in other various fees, sales taxes, gasoline taxes, and so forth. All told, my tax bills this year will come out to be somewhere around $17,000. I do get a bit of a break as I put a solid 15% of my paycheck away in a 401k plan, but that's the Feds' way of making me behave.

Meanwhile, Representative Carolyn Kilpatrick of Michigan went on record saying that, "I'm ashamed of America. I'm ashamed of our government. I'm outraged by the lack of response by our federal government." I'm sorry Ms. Kilpatrick, if I have ashamed you. But after all, you have direct control of 25% or more of my paycheck. What more do you want out of me? And that goes for Paul Krugman too, while I am at it. Krugman wrote in his September 2, 2005 New York Times column that "they (America's current leaders) never ask for shared sacrifice."

I'm tired of people bitching about not having sacrificed. What about that $17,000 per year? At the turn of the 20th century, all three levels of government were taking about 10 percent of national wealth. Even in 1940 it was still around that level, but now I pay at least one third. Krugman is saying that I'm not being asked to share sacrifices? I'm tired of hearing this God Damned bullshit! Meanwhile all of this does remind me to sign up as a volunteer the before the next disaster hits.

One of the big problems we have with a big centralized government is that it creates big moral hazards. I am a big believer that cities hold their own destinies in their own hands. But what we have had since the start of the 20th century is a situation where the American public, local, and state leaders have gotten into the habit of looking for the federal government to bail them out of all their problems. It bothers me a bit that I pay taxes to a Harris County Flood Control district which may or may not benefit me, but it bothers me enormously that the leadership and people of New Orleans look to ME, THE AMERICAN TAXPAYER, to pay for their levees and drainage control to keep New Orleans habitable! For those of you who believe in powerful central government, don't you forget, The United States Army Corps of Engineers is solely responsible for the levees of New Orleans as well as well as the entire Mississippi river. These acts show a stunning level of interference by the United States Government in local affairs. And this article reads that the Army Corps of Engineers has spent at least $430 million on the levees, while only $50 million was spent by locals before money dried up because of "Homeland Security", terrorism, and Afghanistan / Iraq. Do you really want to be at the mercy of who sits in the White House when it comes to local matters like pollution, fire, or flood control? And how many other cities and states are looking to ME to fund their various schemes? I have a strong feeling that this has a lot to do with why my federal income tax bills are so high. And what benefit exactly am I getting out of all this?

In general, a principle should hold that if a City or State needs to finance some critical project, then all possible forms of finance both public and private should be exhausted before local and state governments turn to the United States Government for finanace. Why do I get the feeling that this is not the way the world works anymore?

The word has it from the Editor and Publisher article above that the levee construction projects which were going to be needed to continue improvements and maintenance of the New Orleans levees was going to come out to $250 million. If the federal government - headed by Mr. Bush - was cutting back funding, which lead to the disaster, then why did the State of Louisiana and City of New Orleans not tell the Feds and Army Corps of Engineers that they were going to take matters into their own hands and float local bonds and taxes to make up the shortfall? A one time tax of $500 for each and every resident of New Orleans would have paid for the $250 million bill. After all, wouldn't the landowners, homeowners, and residents of the great City of New Orleans be the primary beneficiaries of such a project? And if the current President wouldn't have compensated them out of current federal coffers, then why not wait down the road for a (presumably) Democratic President who might have? But instead they chose to bitch and whine about their federal budget cuts, and now the left is making hay and patting itself on the back for saying that the soundings of ominous warnings were made, but an indifferent President didn't listen to them.

I sorely doubt that most residents of New Orleans voted for Mr. Bush or for Republicans in the last election. So why should they give the people of New Orleans federal money? One of my strongest beliefs about what has happened in Congress since the Republicans have taken control is that the federal government has not shrunk. Rather, monies that used to go to Democrat districts when Democrats controlled Congress from 1954 - 1994 now go to Republican districts instead. Oops, sorry belivers in Washington...

By the way, here is a webpage which details the United States Code which empowers the Corps of Engineers with control of the Mississippi River. Here is the Army Corps webpage itself on the matter. Hmmm...It says that the Mississippi River Commission which empowers the Feds with control over the river was created in 1879. This is starting to sound like a post Civil War / War between the States thing. Either:

1) the Feds didn't want those evil slave owning Southern Bastards getting another chokehold on the Mississippi in the event of another war with Washington, or...

2) the interested States simply didn't have any money to channel and maintain the river after the War between the States. That was because Sherman, Grant, and Co. had wiped out the South during the process of marching the Confederates back into the Union at gunpoint. Probably a combination of both.

I knew a guy from when I was in my late teens and early 20's whose family was from Metarie, a suburb in the western edge of New Orleans. I went to the N.O. Mardi Gras in 1993 and 1994. One morning, we went down to the banks of the Mississippi River and I beheld the river in the morning. The river was at least a good 300 yards (270 meters) wide at where we were at. That day, My friend Chris told me at that time that the city was basically under sea level. I will never forget hearing those words, as this very disquieting feeling overcame me. Another of my friends had talked about moving to N.O., but after hearing those words, I knew I would never consider moving to such a place. I have lived in Houston most of my life, outside of my time in China and when I worked at the nuclear power plant. Hurricanes and storms are a part of life for Americans who live in Florida, Georgia, Mississippi, Alabama, Louisiana, and Texas. I had an awful feeling that N.O would get hit either by the river or by a hurricane, and when it did I would not want to be there. I had made a rational calculation that I would not want to live in such a place, but thanks to government 500,000 people enjoyed a sleepy but uneasy existence in The Big Easy. Their calculations, warped by government spending and interference, just came up wrong.

More on this tomorrow.

Ciao for now.

Posted by The Mighty Wizard at 01:02 AM
This entry was posted in the following categories: America

September 02, 2005

Hurricane Katrina Madness

As a Houstonian, I am justifiably proud of my city for accepting those 20,000+ people from New Orleans which were forced to evacuate after the horrors visited upon The Big Easy by Hurricane Katrina. It is acts of kindness like this that make cities and their people "World Class", not building light rail lines and refurbishing downtowns with $3 billion+ of public monies.

With that in mind, I will very sadly link to this page. I will never trust a police officer ever again.

Posted by The Mighty Wizard at 12:52 AM
This entry was posted in the following categories: America

August 18, 2005

Kelo vs. City of New London - The Horror Story continues...

I am linking to the story here.Just when you thought things were really going down the tubes for property rights in Amerika, it now seems that not only can a City take your land and home away from you and hand it off to another private party, THE LOCAL GOVERNMENT WILL THEN TRY TO CHARGE YOU BACK RENT FOR FIGHTING THEM IN COURT!!!

Sometimes I come to think that it's time to go out and buy a gun - lock and load...

Posted by The Mighty Wizard at 11:30 PM
This entry was posted in the following categories: America

July 06, 2005

Comparing the public commentary about Supreme Court Justices: Liberals vs. Conservatives / Libertarians

One of the oldest saws in politics is the image of that conservatives and liberals have both of each other and in the public eye. The usual image of liberals is one of the pointy headed, Ivy League educated super thinker who looks endlessly for problems everywhere in society. Once said problems are spotted, a government program or some legislation is proposed which will solve all problems and will make the matter go away for good. Meanwhile, his conservative counterpart is depicted as a cave dwelling moron who opposes everything the liberal does, not on principle, but because they are just plain stupid. You see, if you just thought the matter through, then you would be a liberal!

Those thoughts were going through my mind yesterday as I started reading some of the crap out there surrounding the issue of United States Supreme Court Justice Sandra Day O'Connor and her resignation from the SCOTUS. What caught my eye was that reading the commentary about the SCOTUS from some of the liberal leaning sites like The Nation, The New Republic, Move On, and the ACLU resulted in articles which ran on about the usual blather about how the Court was going to turn rightward, about how our rights (except for Property Rights!) were going to stripped away from us, about how abortion was going to be rolled back, etc. Outside of a few comments about the Court's preceived need for legitimacy, there was, in other words, nothing of interest worth reading.

Meanwhile on the libertarian / conservative (i.e. "the dumb ass") side of the fence, there were a pair of very interesting articles on the SCOTUS that were quite illuminating. This article from Reason magazine's online site carries a talk with historian David J. Garrow about how former members of the SCOTUS had drug addictions, about the afflictions of age, about sleeping Justices, and how Justices have been taking fewer and fewer cases while seeming to rely more and more on the 4 clerks which each Justice is allowed to employ. Then this article ran in today's Houston Chronicle, where American Enterprise Institute scholar Normal Ornstein dwelled on the issue that the SCOTUS used to have more politicians rather than judges. Ornstein wonders whether we would be better off with more pols than judges sitting on the Court. None of these erudite observations to perk up the imaginations of the discerning public from the magazines on the left. Maybe if the left leaning magazines started serving up material that has more of a wide ranging feel to them in matters such as these, rather than simple (I hate to use this word) "knee jerk" analysis, then maybe I would bother to read them more often.

Posted by The Mighty Wizard at 10:49 PM
This entry was posted in the following categories: America

June 12, 2005

Of Danica Patrick

I have little or no interest in automobiles or auto racing. Cars are for getting me from point A to point B, which they do much better than Light Rail. I can change the oil, tires, perhaps fix brake pads in a pinch, but I have a great Thai auto mechanic who will gladly fix these things for me. The idea of watching cars go round and round in circles for 2 - 3 hours is about as interesting to me as it is for some people to watch a round of golf. Pass the laxatives, please.

But suddenly we have the prospect of 23 year old Danica Patrick, who has by all accounts breathed a desperately needed dose of fresh air into the sport. It's always nice to see women be interested in something that is usually seen as the perogative of men.

Ms. Patrick, who seems to be handling all of the media fanfare with much aplomb, is not without her detractors. This in spite of the fact that she finished 4th in the 2005 Indianopolis 500, while leading with only a few laps to go. The main detractors are fellow drivers like Robby Gordon, who are saying that it just ain't fair - you see! - that Ms. Patrick get to race against them. It seems that Ms. Patrick, tipping the scales at 100 lbs (45kg), will have an advantage of roughly 1 mph over the likes of the 200+ lb (90kg) Mr. Gordon.The article noted above mentions that Indy rules state that an automobile has to weigh a minimum of 1525 lbs before gasoline and driver are added.

I am sorry Mr. Gordon and company, but I have participated in a sport - running - in which the weight of the human body is paramount in how well you perform. In fact for each pound over your "healthy racing weight", you can pretty much count on adding about 2 seconds per mile to your racing time, or very close to 1 minute per mile in a race such as the marathon. In other words, a healthy weight for someone like myself is around 155 - 160 lbs. I once thought that I could run faster if I shed a few more pounds. Indeed I once got down to the 147 - 149 lb. range, but this didn't result in improved racing times. I can say that at my current weight of about 180 lbs, I do run about 45 or so seconds slower than I do when I am in good running shape. Horse racing jockeys are another group of athletes who are not found to be putting a lot of pressure on the ol' bathroom scales.

There is a real discovery here. I have probably been under the illusion that such items as weight didn't matter so much in the world of high powered auto racing, but lo and behold, it does seem to matter just enough to give the likes of Ms. Patrick a one lap advantage over the distance of the Indy 500. All I can say to Mr. Gordon and company is that y'all better get your butts in gear and start working out. Even if after you get yourselves in good shape and you find yourselves still getting consistently beaten by the likes of Ms. Patrick, then perhaps you can console yourselves with the idea that you too might be able to talk a skin magazine to shooting a spread that features you in an upcoming issue.

Posted by The Mighty Wizard at 02:28 PM
This entry was posted in the following categories: America

May 17, 2005

Of working and pension plans

This past week, United Airlines, which has been struggling with bankrupcy for the past 3 years or so, won court approval to be relieved of its pension obligations to its employees. This saves the company billions of dollars and subsequently dumps it on the Pension Benefit Guaranty Corporation. It is claimed that the taxpayer does not fund the PBGC. The PBGC's website declares that monies for the PBGC come from insurance premiums that are paid by companies who take part in the PBGC. The formula for premium rates are that pension plans pay PBGC yearly insurance premium of $2.60 per worker or retiree in multiemployer plans; $19 per worker or retiree plus $9 for each $1,000 of unfunded vested benefits in single employer plans. Premium rates increase only if Congress approves.

This topic is of some interest to me as I work for the Very Large Industrial Corporation of America. My employer "VLICA" offers a pension plan that is typical of most - slowly rising benefits based on years of service. I do not know if we participate in the PBGC, though I would not doubt it if we did. We do have a 401-k plan which I participate in. At least I won't get caught out like the 31 year General Motors employee I heard about on TV the other day. This man is complaining that he has no savings and that he was told years ago that the company would take care of him. Now it is looking as though GM will cut benefits since GM's bonds were sent to the junk pile last week by the bond rating agencies.

There has been much talk about the PBGC being a so-called "moral hazard" which it almost certainly is. I am almost certain that Congress will have to raise premiums on participant benefit plans in order to stave off bankrupcy of the PBGC or else taxpayers will in fact end up footing the bill. The $2.60 per month premium seems awfully low, especially given the light that employees who get paid from the PBGC instead of their former employers end up receiving something like 50 percent (if that) of what they were once offered. The figures that the LA Times is offering on the deal (the numbers are in billions of dollars) are:

Employees Number of
Pilots 14,100 $2.8 $5.7
Ground employees 36,100 $1.3 $4.0
Flight attendants 28,600 $1.4 $3.3

Management, administrative workers
42,700 $1.5 $3.8

Source: Pension Benefit Guaranty Corp.

It is sad that our bankrupcy laws are written such that employees of a busted organization are at the back of the line when it comes to collecting any of the scraps left over from the failed enterprise. Employers tailor their pay and benefits in an attempt to attract employees. I believe (I could be corrected on this) that pensions are essentially looked upon as bounties that employees can collect from employers. It would seem that perhaps we should rewrite our bankrupcy laws such that former employees would be first in line to collect from bankrupt employers in the event of financial distress. That would make employers think twice before offering such plans in the first place.

Posted by The Mighty Wizard at 11:16 PM
This entry was posted in the following categories: America

March 21, 2005

Following Lew Rockwell

I have not posted in one week, so even though there is a lot going on in the world, I will post links from the Lew Rockwell website that I enjoyed reading:

1) Doomed by Special Rights, which looks at one of the most shocking and unforeseen consequences that has resulted from the passage of the Americans with Disabilities Act. Namely, the article goes into the issue that handicapped people have lower levels of employment than they did before 1989, when the ADA was passed.

On a side note, you gotta know something is really rotten in Denmark when a piece of legislation has its own website!

2) Paul Hein, a frequent contributor to Lew Rockwell, goes into the idea that bribes that are paid by private parties are illegal, but when bribes are paid for with public monies or by those seeking to influence government, then they are called something else.

Some examples? "Democracy in action" when money is paid to influence government actors, or when political figures redistribute money to various constituent groups. Bribes are called "a part of foreign policy" when they are paid to other governments. Well, you get the picture.

3) Finally, the price of patriotism in America seems to have gone up, thanks to the "War on Terror" and the war in Iraq. According to this article in Lew Rockwell and
this one from the Financial Times
, it appears that the price for patriotism has reached something like $450,000 per year.

Posted by The Mighty Wizard at 10:21 PM
This entry was posted in the following categories: America

March 14, 2005

Keeping up with the Joneses on the government payroll

Every year, Parade magazine runs an issue where they do a report on how much money Americans make at their jobs every year. I have kept every issue of these annual reports for the past three years. This year, I decided to concentrate on those individuals who work in government (or appear to) to see how well they live off of my dime.

Here are some results from this year (2005):

James Baker, aged 61, Mayor, Wilmington, Del: $91,500 (with probably a bright future ahead of him in lobbying, higher office, or money already in the bank from previous lines of work.

Zachary Rasmussen, aged 36, Sargeant First Class U.S. Army, pulls down a cool $65,500. Probably halfway to a solid pension.

Joe Givens, aged 45, transit operator, pulled in $53, 000.

Condoleezza Rice, U.S. Secretary of State, will knock down a cool $180,000 this year. Doubtless, book deals are in store for Ms. Rice's future, if not a pot of gold from elective office, fellowships, or perhaps a stint at Kissinger and Associates. Sorry, but Kissinger and his Associates do not maintain a website...

Wayne Burton, aged 64, NASA scientist, hit it big with a job that pays $79,600.

Dawn Heltzman, aged 34, state trooper, get this - collects $100,000 per year! WOW!!!

Brian Hilpp, aged 33, mail handler got $47, 200.

And sadly, we have Jennifer Lacopo, aged 24, being employed as a teacher. Her pay: $24,300.

Should The Mighty Wizard take some time out to look for another job?

Ciao for now.

Posted by The Mighty Wizard at 11:22 PM
This entry was posted in the following categories: America

March 06, 2005

Is a backlash occuring over "Smart Growth"?

The following links come from the March 5 - 6, 2005 weekend edition of Dennis Dutton's Arts and Letters Daily:

Joel Kotkin says that the suburbs have won the "surburban sprawl war" and that we should concentrate on making suburbs more attractive via dealing with the complaints that the suburb haters have of suburbia - in suburbia - rather than trying to engage in social engineering to get hipsters to move downtown (which few want to do anyway).

Government loving media titan the Washington Post writes that in Oregon there has been passage of "Measure 37", which may well break the strong anti - sprawl measures that have been put into place (which happen to be making Oregon a ridiculously expensive place to move to or live anyway).

Posted by The Mighty Wizard at 02:58 PM
This entry was posted in the following categories: America

February 28, 2005

Will the U.S. Supreme Court destroy private Property Rights in Amerika?

Yes gentle readers, I did misspell America in the title to this Op-Ed.

On February 22, 2005, a celebrated and enormously important case reached the United States Supreme Court. The case, Kelo vs. City of New London revolves around a group of seven homeowners who happen to live in an area of New London Conneticut where the City has decided to redevelop into a bio - technology park. The City of New London persuaded pharmeceutical giant Pfizer to build a $300 million facility in the town, with the incentive of tax breaks.

Moreover, it wasn't the City that is charged with redevelopment of the area. That is the responsibility of a private New London Development Corporation (NLDC). However, it so happened that some residents still happened to have their homes in the area and it wasn't a case of "trying to clear up blight". Indeed Ms. Kelo, a nurse, had spent quite a bit of money sprucing up her home. What this case is really about is whether the courts will do anything to stop the use of eminent domain by cities, public school districts, state governments, port authorities, or any other local government body that wants to compel people at gunpoint to get out of the way of planned land use.

Since the early 1950's the Supreme Court (and lower courts) generally have smiled and given their blessing to such abuses, having bought arguments by local governments that "they are clearing up blilght" and that "we can put such land to better use" by "redeveloping the land into properties that yield a higher tax base." Indeed not many people know this but the celebrated World Trade Centers in New York (destroyed in September 11, 2001) were constructed over the former area that was occupied by a bunch of electronic retail stores. These small shops in lower Manhattan were forcefully shut down to make way for the WTC's! The judge in the case bought the argument of the local New York governments that "building the WTC's was all in the name of the public good".

If local governments want to redevelop "blighted areas" (and New London doesn't even appear to have been designated as such), then they should offer a high enough amout of money to local residents to get them to move voluntarily, or redraw their plans. Don't point the gun at the poor or at small homeowners.

As you can see, if the Supreme's rule on behalf of the City of New London, then your home will never be safe again from the threat of your local government. By doing this, the Supreme Court will have effectively eviscerated another part of our liberties and the United States Constitution.

Posted by The Mighty Wizard at 07:00 AM
This entry was posted in the following categories: America

February 09, 2005

Medicare Drug Benefit cost to go up - again.


Today, the news came over the wires that the Medicare prescription drug benefit legislation that was passed in late 2003, which was initially estimated to cost $400 billion, later raised to $530 billion, is now going to cost $724 billion in its first 10 years.

Ah, the joys of low balling the cost of your favorite government program to get it passed!

Posted by The Mighty Wizard at 09:30 PM
This entry was posted in the following categories: America

January 16, 2005

Some notions about Public Schooling vs. Education

As readers of my weblog may know, this past year I purchased a condo. Just the other day, I just received my first direct bill for property taxes. Taxes were to be paid both to Harris County and to the Houston Independent School District. I use some of the County services such as their toll roads, but since I have no children I have no real idea why it is that HISD should have any coercive power to sucker punch me for tax money. The notion that I may benefit from working with HISD educated people, ergo I must pay seems laughable considering how many people are upset at the level of education HISD provides. Also, it just isn't my problem. If one proclaims that education is a public good, then let the entitles that will benefit from such an political proposition, such as businesses, pay for such compulsion.

Moreover, the more I read history, the more I have become convinced that there is a difference between education and compulsory public schooling. The other day, I stumbled across an article in City Journal magazine online,whose subject was about the matter of classical literature and culture which was enjoyed by the working classes of Great Britain during the 19th and 20th centuries. The article starts off by making a mockery of a statement by Barbara Herstein Smith, one time president of the Modern Language Association, in which she stated that classical culture was irrelevant to those poor souls who were underprivileged to have not received a classical education. In other words, the works of Shakespeare, Dante, and all of the rest of the Dead White Males of the ages gone by don't factor much in the lives of those dreary factory workers. Ergo, it is time to give the Western Civ claptrap stuff the 'ol heave ho and give them the Communist Manifesto. That'll speak to them!

Well Well Well. It appears that in the U.K. there is a private organization called the Workers Educational Association whose purpose was (and is) to achieve exactly what Ms. Smith so derided - adult education for the masses. It also seems that the poor slobs who ended up working in jobs which were not so prestigeous were quite the consumers of the works of those Dead White Males. It seems that the works of those DWM's were quite capable of liberating the minds of the ordinary everyday Joe's, thank you very much.

Moreover the WEA offered no degrees, no certificates, no grades, nor any vocational paths. This was all done just out of a love of learning something new.
The article goes on to say that some of the WEA's funding was from workers themselves. Somehow these ideas want to lead me towards dovetailing towards homeschooling, but that would take quite a bit of writing and that is something I am not in the mood to do at the moment.

Ciao for now.

TMW

Posted by The Mighty Wizard at 07:47 PM
This entry was posted in the following categories: America

November 25, 2004

Airport Security - 2004

It has been widely reported in the media that Americans are travelling in large numbers again for the Thanksgiving holidays. Various estimates are in the 40 million range or so. Included in this estimate are millions that are travelling via air and that the airports again are as crowded as they were in 2000 - 2001 before the September 11, 2001 attacks.

With that in mind, I would like to write about my own recent experiences with airport security in the light of my recent trip outside of the United States. The security was much "looser" than it was in 2002 - 2003, especially last year. I was pulled aside last year and taken to a small room for a thorough search. Not anything special, but I was just the random goat.

Fast forward to this year and things were somewhat different. Yes I had to put my bags through the usual detectors and was metal detected, but all the way through my trip to Asia I was struck on how much things had hardly changed from last last trip to Asia in 2000. It was as if 9/11 had hardly happened.

Ciao for now.

Posted by The Mighty Wizard at 12:19 AM
This entry was posted in the following categories: America

August 30, 2004

The Feds are on a roll!

Oh my Goodness! Amidst the wonders of the two weeks of Olympic pagentry, two pieces of incredible news came of Washington that nearly struck The Mighty Wizard himself down. First, the news came that the Bush administration wants to realign American military forces abroad so that troops are pulled away from Germany and South Korea, to be redeployed elsewhere. Second, news came that the members of the Senate Intelligence Committee are pushing reform of the intelligence agencies so that there is one centralized agency in the federal government.

As powerful as I am, I have to admit that I never saw this! Once in a blue moon, our oppressive masters in Washington DO in fact get things right! It speaks volumes that America has not one, not two, not four, but SIXTEEN agencies that collect intelligence! Some of their blunders have been absolutely monumental:

They missed the 1990 invasion of Kuwait by Saddam's forces (which I vividly remember reading about in a Time Magazine article in March 1990, which predicted that Saddam might do just such a thing).

I can still remember reading ominously written warnings in the early 1980's that the Soviet Union had the world's second largest economy.

I could go on, but this should suffice to make you gentle readers pause about where your tax dollars are going to.

In a similar vein, our 37,000 or so soliders who have been in South Korea for 50+ years are guarding a country that is fully capable of defending itself. In the event of another war, our sons and daughters just might conceivably get nuked by an angry North Korean regime.

What is more laughable is wondering what 100,000 American troops are doing in Germany and the rest of Western Europe. It must be that they are manning the frontiers just in case the big bad Soviet Bear lurking around out out there in the Eastern woods decides to wake up and storm the barricades. OOPS! I forgot that I am in 2004, not 1954.

It took a long time, but things do sometimes change just ever so slightly for the better in this world. But I do hope against hope that just a few more decent ideas keep coming and get enacted.

Posted by The Mighty Wizard at 11:08 PM
This entry was posted in the following categories: America

July 26, 2004

Church and State: The Law is The Law, or is it?

I haven't posted in a few days because I have a lot of things work related on my mind. I just don't have time right now to post to the website. It isn't due to a lack of excitement out there in the world, because there is quite a bit going on right now that I would like to write about. Either I just don't have time or inclination.

That being said, I decided to post an email sent to me by someone about politics and holidays. This is something to think about, since in Western countries ( especially America) judges have been in the process for some time of driving religion out of public life. Since that is the case, it could be interpreted as saying that government employees should not get to enjoy Christmas, Easter, etc as public holidays since the U.S judiciary system has been driving Christianity out of the public square.

You can certainly quibble about majority tyranny and judicial decisions in a democracy, but this email clearly had one really great point - namely that since public servants are not supposed to not recognize one religion over another, then maybe public servants should not be granted days off from work for any public holiday that is religious in nature. The only way by which they would get the day off is if they actually took the day off as part of their paid holiday schedule, and not be granted the day off automatically as a public holiday. That would clarify matters quite a bit in the religion / state debate.

---------------------------------

Here is the (unedited) email I received:

The Law is the Law

So, if the US government determines that it is against the law for the
words "Under God" to be on our money, then, so be it.

And if that same Government decides that the "Ten Commandments" are not
to be used in or on a Government installation, then, so be it.

And since they already have prohibited any prayer in the schools, on
which they deem their authority, then so be it.

I say, "So be it," because I am a law abiding US citizen.

I say, "so be it," because I would like to think that smarter people
than I are in positions to make good decisions.

I would like to think that those people have the American People's best
interests at heart.

BUT, YOU KNOW WHAT ELSE I'D LIKE? Since we can't pray to God, can't
Trust in God and cannot Post His Commandments in Government buildings, I don't believe the Government and it's employees should participate in the
Easter and Christmas celebrations which honor the God that our Government is
eliminating from so many facets of American life.

I'd like my mail delivered on Christmas, Good Friday & Easter. After
all, it's just another day.

I'd like the US Supreme Court to be in session on Christmas, Good
Friday & Easter as well as Sundays. After all, it's just another day.

I'd like the Senate and the House of Representatives not have to worry
about getting home for the "Christmas Break." After all it's just another
day.

I'm thinking that a lot of my taxpayer dollars could be saved if all
government offices & services would work on Christmas, Good Friday &
Easter.

It shouldn't cost any overtime since those would be just like any other
day of the week to a government that is trying to be "politically correct."

In fact.... I think that our government should work on Sundays
(initially set aside for worshiping God...) because, after all, our
government says that it should be just another day.

What do you all think? If this idea gets to enough people, maybe our
elected officials will stop giving in to the minority opinions and begin once
again, to represent the majority of ALL of the American people.

Posted by The Mighty Wizard at 09:19 PM
This entry was posted in the following categories: America

July 19, 2004

Bobby Fischer - In Check and likely to be checkmated

On Sunday morning, I awoke to find that the Houston Chronicle (which I get delivered) was reporting on its front page that Bobby Fischer, the insane former World Champion (1972-1975) in chess, had been detained at Narita airport outside of Toyko. He was booked on a flight to the Philippines and was held on not having a valid passport.

The Fischer story has been overshadowed by a somewhat similar case involving AWOL American solider Charles Jenkins. However, the Fischer story is not yet over, so look for more stories to emerge from the unfolding Fischer saga.

As has been widely noted both in the Chess and in the world press, Fischer has been living since 1992 as an expat exile thanks to the fact that in 1992, he played his former rival Boris Spassky in the former Yugoslavia for a $5 million rematch and proceeded to run roughshod over American sanctions that were passed by Congress banning commercial links with the former Yugoslavia. At the beginning of the match, Fischer famously spat on a U.S. Treasury notice telling him that he was in violation of U.S. law and that he would be subject to fines and up to 10 years in jail for his actions. Alas, after 12 years, it seems that time may be up for Fischer.

As many people know, Bobby Fischer is among the most difficult and bizarre people in the world to deal with. I've listened to some of his recent (1999) public appearances over Internet radio and he is also happens to be one of the most foul mouthed and angriest people I've ever heard speak. Over the past 15 - 20 years, Fischer has also developed a well known streak of severe anti - Semitism, which he never passes up to shout about whenever he is given a chance to voice whenever he happens to be near a microphone.

But there's another side of Fischer's personality that many people in the general public don't seem to be aware of. That side is (in addition to all the things written about above) is that Fischer seems to be someone who thinks that the rules by which all of the rest of us have to abide by don't apply to him. It is this streak of his personality that led him to spit in public on the U.S. Treasury summary in 1992.

Well, now Fischer is in Japanese costody and Japan has an extradition treaty with the United States. Fischer undoubtly will fight his extradition, but I for one will think he will lose. After that, it's likely to be jail time for the former King of Chess. I don't know if any time spent in jail will change Fischer any, not at age 61, but there will be a lot of people in this world who no will not doubt think that Fischer will have ended up getting what he deserved.


Posted by The Mighty Wizard at 09:51 PM
This entry was posted in the following categories: America

July 17, 2004

Drugs in Track and Field

One of the interests of this site is supposed to be running, but it seems I don't write enough about the sport I love. Well this is my chance to speak out on the sport.

This past week, the United States Olympic Trials in track and field were held in Sacramento California. The big story this week was not whether any records were broken, or whether or not some of the big names in the sport made it to the team in their respective events. No Virgina, the big news was the spotlight on drug use - specifically steriods and to a much lesser degree blood doping.

When I was a teenager 20+ years ago, I didn't think that performance enhancing drugs were that big of an issue in the sport. World records would be set, but the athlete in question rarely broke the record by much. Often the athlete in question would follow up over time with similar performances, which in my book would vindicate the athlete in question.

That said, my first real suspicion that an athlete was taking some enhancement drugs was Canadian sprinter Ben Johnson. For those of you who are too young to remember, Ben Johnson beat Carl Lewis in the 100 meters in 1987 at the World Championships and at the 1988 Olympics after considerably bulking up. Eventually Johnson was busted for steriod use and lost his medals / world records.

However, there was also the case of Florence Griffith Joyner. "Flo Jo" won the 1988 Seoul Olympic 100 meters in an eye popping world record time of 10.49 seconds, and the 200 meters in 21.34 seconds. As an aside, she also did this in style, often wearing some rather revealing outfits that weren't complete without some dazzlingly painted fingernails. Neither world record time has ever been approached by anyone, even Marion Jones. To boot, Ms. Joyner passed away on September 21, 1998 (aged 38) from some rather mysterious circumstances.

One athlete I've been watching in recent years whom I've been concerned about was American 1,500 meter star Regina Jacobs. Last year, I watched a track meet on television where Jacobs outran her longtime rival Suzy Hamilton in a 1,500 meter race in a time very close to 4 minutes.

"Well, so what!", you might say. Well gentle readers, I have to say that the first time I saw Ms. Jacobs run was at the NCAA women's championships that were held here in Houston... in June 1982!!! I couldn't help but think that last year, Ms. Jacobs was at least 41 years old when she beat Ms. Hamilton. Tellingly, Ms. Jacobs tested positive for drugs and officially retired from the sport this past week before her trial finals.

This is all awful because since there are few compelling athletes in the sport right now, that means that track and field only gets any real attention once every 4 years when the Olympics roll around. The only thing that can be done is that the athletes get tested and be held to the highest standards. In my own view, ANY athlete that tests positive for banned substances should be banned for life - not any of this two year bullshit. Ultimately, that is the only way that drugs can be driven from the sport.

Posted by The Mighty Wizard at 09:47 AM
This entry was posted in the following categories: America

July 12, 2004

The Joys of Big City Life

One of the frequent criticisms of the so - called "Smart Growth" crowd is that people in modern day big cities live lives of social anomie. Such hapless denizens of our automobile dominated culture do not get to experience the joys of getting to know your neighbors and have good friends the way that people did before the age of the car and the single family house on a decent sized lot. Back before the car, people lived close together, within walking distance of everything. Ergo, people formed tight knit communities where everyone knew everyone else. This all has been lost due to the horrors of the "infernal combusion engine."

In so many words this is all bunk. The Internet absolutely tears this idea to shreds.

I just got back from what is called a "meetup". If you go to The Meetup Website, you will find that you can form group meetups on just about every topic in the world. In my case, I belong to a J.R.R. Tolkien meetup group as well as a Chinese language meetup group. Both groups usually have a core group of about 5 - 15 people who usually manage to make most of the meetings. I have never failed to have a wonderful time at these gatherings and have met a number of wonderful people. These groups draw out your passions and it's entirely possible to form entire new social networks via the Internet.

In his book The Vanishing Automobile, author Randall O'Toole points out at one point that even if the "Smart Growth" crowd were to get their wish and you would get to know your neighbors a bit better, you probably would find that you wouldn't have a lot in common with them. Ergo, why would you bother to socialize with them? And wouldn't that defeat the point of enacting their policies?

Posted by The Mighty Wizard at 10:07 PM
This entry was posted in the following categories: America

June 21, 2004

Catching up - Supreme Court rules about school prayer

On June 15, 2004, the United States Supreme Court ruled 8 - 0 that athiest Doctor / Lawyer Michael Newdow did not have standing to bring a suit "on behalf of his daughter" to strip the words "under God" out of the Pledge of Allegiance. Essentially, they sidestepped the matter.

This brings for an interesting issue about the Supreme Court. J.S. McClelland made a wry observation in his incredible opus, A History of Western Political Thought, that the three branches of American government ultimately have to have a pretty shrewd idea of what the other branches of government will stomach. They also have to have a good idea of what the American public will stomach too. In this case, the matter made its way to the Supreme Court because lower Federal Circuit courts had ruled in Newdow's favor. These rulings had launched a firestorm of anger and rage across the land and I'm sure the Supreme Court noted this. One should also bear in mind that it was Congress that inserted the phrase "under God" into the Pledge in the anti - Communist / Red Scare fervor of the early 1950's.

Very interesting place that America...

Posted by The Mighty Wizard at 08:16 PM
This entry was posted in the following categories: America

June 08, 2004

Ronald Reagan: 1911 - 2004

It seems that my postings are getting more and more rare. I apologize. What's been happening lately is that I have been assigned at my job to come up with a technical solution to a security / audit problem that, if I am successful, could save my company thousands of dollars. Unfortunately, despite some feverish searching on my part, the solution still eludes me. I have only two more weeks before we are to start investigating commerical solutions to this problem, but I am afraid that I am pessimistic that I will succeed in my task.

Well, Ronald Reagan finally passed on after a 10 year long battle with Alzheimers disease. I can still remember when I first saw Reagan. I was 10 years old and it was the 1976 Republican convention, where he was narrowly defeated by then President Ford. Many people thought that Reagan's 1976 failure to capture the Republican nomination was the last that we would hear from Reagan. But the Conventional Wisdom, as it so often is, was wrong on this occasion.

BTW - This should serve as a very serious warning to anyone who thinks that Al Gore is finished as a politician. NEVER count a man out in politics!

I was in high school when Reagan started his reign as President. Since it was a part of my life when I was coming of age, it seemed that politics, which once was so near to me, was now so far away. I do remember having this slowly growing alarm as a teenager about budget deficits whenever I read the newspapers. It was something which hit hard enough when I started working and saw what was happening with Social Security. That is why I was a Lead or Leave activist in the late 1980's.

After a massive military buildup and seeing plenty of political cartoons of the Bears and Uncle Sam's pointing piles of missiles at each other, it seemed that the Soviet Union started to - if you will - fade from the news circa 1985 - 1986. The Cold War, which seemed to be an ever present threat that we felt as children, was now sort of fading away. Little did anyone know that the Soviet Union was failing, even though Reagan had, in 1981, confidently predicted that the Soviet Union would be swept into the dust bin of history.

Nobody believed Reagan. My own high school government book stated that the Soviet Union had the world's second largest economy in 1984. Now we know that to be completely false. Reason online recently carried a story where a bunch of academic and think tank experts spoke in ominous tones in 1982 that the Soviet Union would be around for decades to come. Some of these guys, like Strobe Talbott, became high powered big wigs in the Clinton White House foreign policy team. It's pretty clear that Reagan was right about Communism and the experts were wrong.

Reagan was easily the most ideological man to sit in the White House in the 20th century. If Reagan had had a Republican House and Senate, America would have had a federal government with 10 - 15 percent of GDP, instead of the 22 percent we have today. I remember when he fired the air traffic controllers in 1981, effectively putting striking workers on notice that they would not be allowed to cripple the economy, like they do in France and Greece. We might well have gone on the gold standard, at least for his term. Social Security might have been trimmed, if not partially replaced with compulsory individual retirement accounts.

But Reagan was also a practical man. He knew he faced a Democrat controlled House, and a Democrat controlled Senate for some of his term. His big tax cuts early had to be partially rolled back. His deficits effectively transferred money from recipients to bond holders. The Savings and Loan disaster cost the country about $150 billion to bail out. Although the S&L disaster was an initiative that was started by the Carter Administration, the Reaganites kept the gamble up, hoping that things would come through. Alas they didn't.

And don't forget to mention about AIDS. I should say that it is far to simplistic to blame the Reagan Administration for doing nothing about AIDS. There are many, many people to be blamed for the AIDS plague, not to mention the first groups of homosexuals who suffered from the disease. Many of these men (and it was nearly all men) had copulated with literally several thousand partners. Mother Nature promptly made damned sure that these men paid for their behavior. Now we are all sadder for it.

Strangely, we haven't heard too much about supply side economics lately in academic or policy circles. Few people seem to remember how fierce the economic arguments were over supply side economics or what the effects of budget or trade deficits were going to be. In the 1970's and 1980's, you could not pick up a newspaper or political journal without reading about this battle. It seems so long ago.

And so it was and so it is now. I can say that Reagan was, on balance, the right man for the job and that he was there at the right time. Ronald Reagan - RIP.

Posted by The Mighty Wizard at 10:25 PM
This entry was posted in the following categories: America

June 01, 2004

Commentary on Media Bias

Today, guest blogger Fabio Rojas on The Marginal Revolution wrote a piece on media bias. For the most part I agreed with his tenants, but there were a few points which I disagreed with him about. It is not too often when I decide to write a reply to someone else on what they have written on their site, but I did so this time.

This is what I wrote to Professor Rojas:

-------------------------------------------------------------

Professor (?) Rojas:

In reading your post on media bias, I have a few observations and pearls of wisdom I can offer you on some points:

1) It is thought by many that Richard Nixon was the most liberal Republican president of modern times. Since he did serve from 1969 - 1974, Nixon oversaw the enacting of the following policies: The wage and price controls of 1971, he unilaterally ordered the creation of the EPA (no need for Congress here!), he took America off the gold standard for good, oversaw lowering the voting age to 18 via constitutuional amendment (young people tend to vote liberal), greatly boosted the spending on Social Security, Medicare, public housing, et.al.

When I read about the Nixon record, I find myself wondering why the Democrats wanted to get him over Watergate!

2) If memory serves correctly, Bob Dole was generally liked by the "liberal media" for a number of reasons. One was that Dole has a genuinely grouchy temper when he got (and gets?) irritated. He once exasperatingly griped about how in 1988 that "He (referring to George Bush the elder) has got to stop lying about my (voting) record!" In a short word, if he got mad enough about something, Dole would snap. The media liked that because being around Dole could sometimes make for good copy!

Another reason why the media, I think, liked Dole was that Dole was a genuine war hero. Since many prominent figures in the media were (and are) Vietnam draft avoiders, I think they may feel some "shame" when they encounter geniune war heroes like Dole and John McCain. Ergo they tend to give war heroes some slack, no matter what their policies or views are.

Outside of these observations, I tend to agree with much of your writing. There are markets for views in media and it just so happened that there is a substantial market for conservative news.

Regards.

Posted by The Mighty Wizard at 10:01 PM
This entry was posted in the following categories: America

May 24, 2004

The pains of buying property

I've been in the market over the past 2 - 3 months for acquiring a house or condo. My current living situation is that I live in an apartment which I pay $475 per month. Not only that, I live inside the Houston 610 loop and drive only 5 miles to work. That drive takes me 12 minutes. Moreover, I live in a very nice area of town and am within walking distance of two bookstores, which for me is nothing less than a dream. Many people in today's bloated real estate market would ABSOLUTELY KILL for an apartment like mine.

So why am I looking for property? The main reason is that my apartment, while cheap, is only about 590 square feet. There's no pool, but I normally don't swim (I run for exercise) so that's no big deal. And I could really care less about such things like community rooms, exercise gyms, and so on that some rental places have. The biggest problem that this presents is that I literally have run out of room for my stuff. I started dabbling in painting earlier this year and had to move my only "dining table" to make room for an easel. I have books stacked up everywhere. The computer I am writing this page on is surrounded by stuff on the table it sits on. I sleep on a futon because my bed is piled up with stuff.

Some of my neighbors have said that it's high time I go through a thorough house cleaning, but while I could use throwing away some of my stuff, there are plenty of my books I want to hang on to. For instance, I have a bunch of computer books that are quite valuable to me professionally.

Another problem is that several months ago, a man moved in across from my apartment unit who decides to stay up once or twice per week until about 3:00 - 4:00am, partying his rear end off with various guy and girl friends. This was annoying enough when it started, but now that I am being asked by my employer to come in at 6:00am, this has now turned into a real nightmare. One time I got up at about 2:00am and knocked on his door to ask him to quiet it down. Other people in the complex have done the same. INEVITABLY, THIS GUY OPENS HIS DOOR AND YELLS AT US ASKING WHAT THE HELL IS OUR PROBLEM! When I told him that HE was our problem, he asked if I wanted to settle this problem right now!

What a joy. I have the neighbor from hell living across from me...

Which brings me to the matter of buying property. So many people sing about the joys of owning your own home. Well gentle readers, for this white boy who sits just slightly above the median on the income distribution curves, that dream has practically turned into a nightmare.

I've spent the last 2+ months looking at property. I've been with a real estate company and have looked through at least 40 properties. I have seen about 4-5 houses that really caught my eye, but those houses are asking in the $110,000+ range. I can buy houses cheaper, but they tend to have something wrong with them.

Also, practically every house that I've been attracted to is out in the sticks. Now for those of you who don't know very much about Houston, I should tell you that I don't use a phrase like "out in the sticks" very lightly. Houston is a VERY LARGE CITY you see, as in 620 square miles and a 1250 sqauare mile urban area. The city spans 50 or so miles across. It is not unusual for people to have 30 mile commutes here. I've looked fairly hard, but for the most part I would have been faced with a long commute, living near the petrochemical plants, or possibly living in a rundown area. None of those were that appealing.

Which led me to consider buying a condo. I've made an offer for an 1100 square foot condo in the Galleria area here in Houston, about 20 - 25 minutes away (10 miles) from work. The price is $84,000. The people living there seem to mostly be 30+, with many older people who have lived there for years. One kicker is that the monthly maintenance fee is $285 per month.

When I've told this to several friends and acquaintenances, I've heard nothing but bitching and criticism. "You could have had a house for less!" "You want to live in a condo? - What's wrong with you, you Shumuck?"

Moreover, the woman who owns the place has been very tight fisted in negociations and it appears I'll probably end up eating the closing costs if I end up buying. It didn't help that my realtor, who works for Keller Williams, nearly ran over a woman and child when we were out looking for property one day. She also told me initially in words that the seller would pay for closing costs, to which she tearfully told me today that this was not the case. The KW people also told me when I first was thinking about this property that somebody else was considering making an offer, to which I obviously am in no position to verify whether this is true. Did anybody say something about ethics in real estate?

"But wait!" some people cry! "It's a nice area and housing ALWAYS GOES UP IN VALUE!"

Well gentle readers, I hate to burst your housing bubble, but I've lived in Houston for most of my life and I've seen an actual real life housing market crash. In the mid - 1980's, the price of a barrel of oil went from $25 to $10 from 1984 to 1986. By the beginning of 1987, 250,000 people in Houston lost their jobs. This city DIED! There was NOTHING out there.

This was reflected in the housing market as it was at that time. The median housing price in 1984 was about $78,000. By late 1986, it was about $60,000, a 20 - 25 percent drop in value. Housing values didn't recover to the 1984 level until about 1996 - 1997.

Speaking of 1997, that's not the thing I'm upset about in this situation. The person I'm most angry about is not my noisy neighbors, nor my tight fisted female seller, nor even my rather upsetting realtors, it's... ALAN "EASY MONEY" GREENSPAN! Yes, the former disciple of Ayn Rand, in my view has been pumping out easy money since circa 1995. As everyone knows, the Dow Jones averages, which were in the 4,000 or so range in the early 1990's went to 11,500 before crashing down to 7,400, but then rebounding to 10,000. The P/E ratios of the market as a whole are in the 30+ range, about double their historical levels.

Starting in 1997, the housing markets all across the western world started booming. In Houston, they've gone up about 60 - 80 percent over the past 6 - 7 years. In my view, it is nearly impossible to say that the "twin bubbles" of housing and the stock markets are not correlated. A decade ago, I would have been in a position to buy a very nice 2,000 square foot house with the money I have. Now I am scrambling to afford a 1100 foot condo.

I thought about 3 years ago, when the economy started heading south, that the real estate markets would cool off. As noted above, the stock markets took a beating, but the real estate markets barely dipped. In the meantime, I've paid a good $20,000 in rent since that time and I can't help but think that while there may yet be a real estate bubble pop over the next few years, I still will have to pay for rent until it comes. If it takes 4 more years before the market plumets, then that's 4 more years of paying rent and I'm getting up there a bit in age.

Yes I can hear it now. "What are you bitching about in Houston? Don't you know that I live in San Francisco and it costs $600,000 to buy a house here." "Don't you know that here in New York, we pay $2,500 per month to rent a place out?" Yes, I know all of that, but you guys in New York and California need to get rid of your land controls, rent controls, your zoning ordinances, and start running roughshod over the neighborhood nazis who constantly stop new construction via lawsuits because they don't want new neighbors moving in nearby. One of the benefits of living in Houston is that we are supposed to have lots of land here in the Great State of Texas - that is unless the "Smart Growth" crowd succeeds in turning Houston into another California.

Houston may be a "Hell Hole" as was written by a New York Times writer in 1994 during the Rockets - Knicks NBA championships. It may be "the armpit of Texas," but we welcome everyone here. Just pull yourself up a chair and settle down pardner.

Sigh... It seems that even being a Mighty Wizard hasn't helped much here. I can't seem to win for losing :(

Posted by The Mighty Wizard at 11:19 PM
This entry was posted in the following categories: America

May 02, 2004

So why will Bush win in November 2004 - part III

With two columns devoted to the ups and downs of Mr. Bush, my attention now turns to his main opponent, Senator John Kerry.

I should start off this epistle by asking the question, "Why should John Kerry WIN the Presidency this November?" Broadly speaking, Kerry has two main things going for him. One, there are 50 million Democrats who voted in 2000 who are probably still burning with rage that the Supreme Court gave Mr. Bush the Presidency in 2000. To hell with Federalism! What ever happened to Democracy? Isn't the guy who gets the most votes the winner?

Oh contraire, replies the Republican. It was Mr. Bush who got the most votes in Florida and that's what matters in our Constitutional regime.

As an aside, there is something that tells me that in the far distant future, the Democrats will try to make the Presidency an office whose occupant would be determined by winning the popular vote. After all, it was the "Progressives" who passed the 17th Amendment in 1913, ushering in the popular election of Senators and doing away with the selection of Senators via state legislatures. What happened in 2000 will be long remembered in the hearts and minds of the Democrats.

The second reason why Kerry could topple Bush this November is that Bush currently looks a bit wobbly right now (May 2004). The economic picture, while not the disaster many think it is, has not been all that bright either. But Mr. Kerry does not seem to have articulated any economic ideas (or at least any ideas that could be scripted into a 30 second television ad!) that would convince large numbers of people that they should vote for him instead of Bush. Polls seem to indicate that Kerry would raise taxes. But to Kerry's credit, he seems to be dead set to try to balance government books once again. However, Kerry doesn't seem to have the Clinton touch of believing in free trade and wanting to make reforms in Social Security.

Moreover, there has been the whole Iraq / Middle East hot potato (potatoe?). Things surely are getting rather dicey in the M.E. at the moment. The problem here for Kerry is that Kerry doesn't seem to have very different ideas about how the world should be like. It's the classic dilemma of American politics: Should I vote for Tweedledee Dee, or should I vote for Tweedledee Dum? Our Founders might have been proud...

Another reason why Kerry might take Bush in November is that, yes, there has been a bad spat of news lately. However, the news has had a bit of a "rally around the flag" effect for Bush. Kerry, who had a lead over Bush 2 months ago, has now fallen behind Bush by something like 5 points. And yet, there is still time. The "rally around the flag" effect that has helped Mr. Bush may backfire over the next few months, as the "planned" withdraw in Iraq supposedly takes place. If things turn out ugly, then it could help Kerry.

Kerry has gained a lot of mileage over the fact that he served in Vietnam. That fact helped him immensely against his opponents in the primaries. Now that the primaries are over, the issue has dropped off of the radar. It is not clear that it will help him much in the general election. Voters like candidates who have served in the military, but they tend not to like being reminded of it.

In short, the picture that emerges of this Presidential campaign is of two candidates, each of whom have many problems. Arguably, neither man is a very strong candidate. Neither man can articulate ideas or speak well in public, especially when matched up against Reagan or Clinton.

So we now come to the part of this epistle that explores Kerry's downsides. To start, there is a reason why I mentioned that Mr. Kerry is a U.S. Senator. In 2002, political science professor, Barry Burden, submitted a scholarly analysis in the The Political Science Quarterly regarding the fortunes of Senators who seek the Presidency. If one sits down and thinks about the matter for a moment, one realizes that Senators have not been all that successful at attaining the nation's highest office directly from the Senate. Yes, there was Jack Kennedy and yes, there have been men who WERE Senators at one time before attaining the White House (Richard Nixon anyone?). However, such men had gaps in between the time they were Senators and the time at which they attained the Presidency. Of the 43 men who have been President, only Warren Harding (1920) joins Kennedy as being a man who went directly from the Senate to the White House.

So why is that? Burden starts off his article by writing about Bob Dole's decision to quit his Senate seat in 1996 in his bid to oust Clinton. Burden points out that the Conventional Wisdom is that being a Senator is a strong platform for launching a successful Presidential bid. So why do Governors, Vice Presidents, and Generals have a better track record of reaching the White House than Senators?

Burden thinks that Senators are dragged down by several factors. One, since Senators are legislators and not executives, they often are not able to articulate, set, or push agendas the way that executive political actors are. Legislative actors often have pressure exerted on them from a wide variety of sources and often are in a position where they have to RESPOND to political events rather than try to shape them. This may weigh on voters attitudes when they look at Senators.

Another possible view regarding the dim success rates of Senators who are directly trying to gain the White House from the Senate has to do with the fact that Senators, with their six year tenures, often develop long track records which can hinder efforts to define themselves to the public. For example, a Senator can try to say, "I'm going to be tough on foreign policy and taxes!" But, with six year tenures (and often having been reelected more than once), opposition research can quickly dig up legislative vote records showing where Senators have voted AGAINST what they say they are for. In fact, this week's Economist carries an article that alludes to this phenomenon in passing.

One way of reworking these ideas is to take the observation that John Kerry is a man who takes time to articulate a position. Many people seem to think that Kerry is aloof and long winded. Other words to describe him are "as a man who has seen too much of the world." The general reasoning here is that, over time, many people have noticed that Senators, with their lengthy tenures, become creatures of their legislative body. The wisdom of American government is that the Senate is supposed to be a genteel place where great figures of the Republic take the long view of things. These great, stately figures are supposed to debate AT LENGTH (sometimes filibustering to death!) the great issues of our day, while not having to deal with the rabid rowdiness of the House of Representatives. Burden writes that Bob Dole said as much when in 1996, he complained after his first national debate with Clinton that, "I wish this were more like the Senate. If you could go back and edit the remarks, I would have changed the wording."

The observation here is that being in this atmosphere after a while begins to rub off on its inhabitants. In 1980, Teddy Boy Kennedy famously responded to a question on national television, where a journalist asked him, "So why do you want to be President?" Kennedy gave a long winded answer, where he started off saying words to the effect that "The United States is a country with vast resources..." Now compare that with his opponent, Ronald Reagan, who was running on an agenda that he really believed in and had strong convictions about.

But Kennedy is not the only Senator who has had problems defining an agenda. Bob Dole had problems with this in 1996, as alluded to above. It is also becoming clear to many, including the New York Times and the Economist, that Kerry is falling into this same trap. Again, the idea is that Senators, being long tenured legislators, fall into a mindset of having trouble defining agendas which would give people reason to vote for them.

Another idea that encapsulates this was written a while back in Reason magazine. There was an article written there which articulated the idea that Americans often tend to like their Presidents "fresh." What is meant by this is that Presidents are frequently (but not always) political figures who have been in politics for 15 years or less. They are not often figures who have been in office for 20 years or more. They are often men who rocket to high office fairly quickly and run straight for the White House. In short, Presidential figures are thoroughbreds. By strength of conviction (Reagan comes to mind) fate (Lyndon Johnson), or fortune / good planning (Clinton), they often don't dither too terribly much along the way.

By contrast, Kerry has been around too long. He is a great but weary man. Kerry invokes a vision within me where I could see him as some great Senator of the classical Roman republic of old.

In summary, this election will be close, but muddy and muddled. Not only has the country been divided right down the middle, with neither the left or right being able to prevail over the other in the realm of ideas, but both candidates cannot seem to gain a decisive edge over the other. All other things being equal, I see Kerry as not being a strong enough challenger as to dethrone Bush. America will go with Bush, narrowly, in November.

Posted by The Mighty Wizard at 11:42 PM
This entry was posted in the following categories: America

April 30, 2004

So why will Bush win in November 2004? - part II

With the economic situation dealt with - at least how I see it - I now come to other issues that face the two main parties will probably end up fighting over during this election seasion. These issues include terrorism, Iraq, and the "social safety net" / income redistribution.

It is clear that the Bush team will try to make their case that they should stay in the White House based on asking the question, "Who would you trust to deal with keeping you safe?" It is true that there have been no terrorist attacks against the U.S since September 2001, but the smoke of blown up Spanish rail tracks still lingers in the air, and the Bushies have to make sure that no such surprises occur in the days and weeks before November. Otherwise, they may well lose the election.

If the Bushies can keep the terrorism question under a lid, then they should do okay. As the hoary old political wisdom says, "If you are sitting in the White House, you don't want any surprises to creep up on you during your reelection year." That is, unless they happen to be good surprises, such as capturing Bin Laden in October 2004.

Speaking of surprises, this leads us to the question of Iraq. I knew from moment one that Hussein would not last too long if we were to invade Iraq. Still, there was a great neo - conservative vision thing about turning Iraq into a shining example of democracy in the Arab world. I should add that the dirty work was to be done by other people's 18 - 30 year old children.

The real test of this morass was not whether America would win the war against Hussein, it was whether America would win the peace thereafterwards. After some disheartening early news, it looked as though things were looking up after Saddam himself was captured. Now insurgents are making a mess of things and Paul Bremmer, Bush's local Caesar in Iraq, has decreed that Iraq will only have a democracy that America approves of. Now comes the story of American female (and male) soldiers humiliating Iraqis. Oh brother.

Logically speaking, if a "true democracy" would arise in Iraq (cross your fingers and finger those prayer beads), what would naturally happen is that the majority Shiites would come along and supress the Sunnis and Kurds. Effectively, this is what Saddam Hussein was worried about in the aftermath of the Islamic Revolution in Iran in 1979. Ergo, the best we could hope for is that Iraq would probably turn into a mutated form of Iran. Sounds like fun, doesn't it?

All of this fighting suggests that the world should perhaps let the locals slug it out amongst themselves after America withdraws (if we withdraw!) and let the Arabs draw their own maps. They could conceivably do this after their alleged elections that are supposed to be held next year (again, finger those prayer beads!). Better to do this rather than continue to follow the maps that Churchill drew in the 1920's. A new political reality would eventually emerge, albeit a hard realipolitik one at that. But of course, America is on the global cop beat and the America just can't allow that to happen now, can we?

Even though things look rather bad for Bush right now, there is one thing that the Bushies can take comfort in, and that is that apparently Kerry says that he would have done little differently from what Bush did. Ergo, outside of using the time worn, "policing" version of combatting terrorism (which works when terrorists are all inside your borders, but falters when they are international in scope), there seems to be relatively little to distinguish Kerry from Bush. And that's the way the Founders would have wanted things to be...

The remaining issues regard the old issues of income redistribution. Though Republican he claims to be, Bush did let the largesse grow during his term. The old folks are now getting their pills paid for, though the Democrats clearly would have been more generous. Of course, the Democrats need to remember that now the program is in place, there's always next time. So if the Dems are patient , they will surely get their chance to expand the prescription drug plan. All the while, they will be paving the way for nationalization of health care by making resistance to the idea of universal government run health care collapse.

In general, I can't help but think that Bush is really more like Nixon than like Reagan. Nixon too, won the 1968 election by a fingernail and proved himself to be someone who was a Republican in name only (RINO). Of course, Nixon can be partially excused because of the fact that the country was more liberal than it is today. Nixon faced a strongly Democratic Congress and had to buy his way through his entire Presidency. Bush doesn't have those excuses.

But as a whole, Me thinks Bush has done enough income redistribution and pandering to make most of the masses happy. He's bloated up the federal education bureaucracy with "No Child Left Behind." Issues such as trade and protectionism (remember those steel tariffs?), Kyoto, Israel and Palestine, and outsourcing are only going to matter to small agitated groups.

As a whole, Bush's record is a muddled one and a record of a man who has no problem with throwing state power at anything that comes his way. I am reminded of the old jibe that The Economist magazine used to hurl at Margaret Thatcher during her last years in office. They used to say that the problem with Mrs. Thatcher was that she wasn't a Thatcherite. If Bush is not to become even more infatuated with government, it will have to be up to the still true blood conservatives in the Republican party to make Bush come to heel.

But that matter is for the second term, isn't it?


Posted by The Mighty Wizard at 11:55 PM
This entry was posted in the following categories: America

April 28, 2004

So why will Bush Win in November 2004? - Part I

Since my revealation that George W. Bush will win the 2004 Presidential election, I've already received a number of emails from fans, would be rivals (I suffer no rivals!), sycophants & toadies, friends and enemies, all around. The reaction to my Oracle has been surprisingly muted. I have received a number of emails where people have offered other visions as to what the future holds, politically, for the American Presidency in 2004. However, I have not received one single email from any partisans saying words to the effect that, "You are a liar! Kerry will trounce Bush!" or "Well of course you dumb a&$!@. President Bush is going to win the election! What planet do you live on?"

With that said, I will go into a multi - part analysis over how the Palantir revealed this Oracle to me. Tonight, I will start with making the case for a George Bush victory.

The case for a George W. Bush victory: 1) One of the greatest weapons that a sitting politican holding any office has is that they control the current spoils. De facto, that fact makes any challenger's job that much more difficult, but it's not impossible.

Historically, sitting Presidents running for a second term are tough to overthrow. Going back to the days of Woodrow Wilson, incumbent Presidents have an (I believe - I'm trying to recall this off the top of my head) 10 - 3 win / loss record when it comes to actively seeking reelection. The losers were Bush the elder, Jimmy Carter, and Herbert Hoover. All of these men presided over an America that was experiencing economic difficulties of varying degrees. Which leads me to topic number 2...

2) "It's the economy, Stupid!" What about Bush and the economy? Even though an American President has far less control over the course of the American economy than many people think, the fact of the matter is that it is largely a given in the political science literature that the higher up the political ladder you are, the more the state of the economy matters in what is to become of your political fortunes, whether you have any control over the economy or not.

This sad (and somewhat unjust - but who's talking about justice here?) state of affairs is especially true in American presidential politics. In fact, a former political science professor of mine at the University of Houston, Christopher Wlezien, made his academic name in developing models that try to predict the outcome of U.S. Presidential elections strictly on the basis of economic outcomes and how those outcomes influence how people vote.

Well, it's no secret that the economy has not done brilliantly in the past 40 months since the Supreme Court handed Bush the White House - I mean since Bush was elected in November 2000. America is a Republic, right? Tell me it is - PLEASE! My hands are shaking here! Pass me a drink!

Much has been made by the intellectual classes, such as Paul Krugman, of the rising tide of deficits and what they will mean for America's economic future. I am of the firm belief that deficits will be a non - issue in this election. My view of the 1981 - 1995 Reagan, Bush the elder, and early Clinton deficits was that they were ignored by the political classes, except by a group of Republican senators, until Ross Perot MADE them matter politically in 1992 by winning 20 million votes (19 percent of the turnout). Deficits will not matter again until an economic crisis is caused by massive borrowing. This crisis would probably take the form of massively higher interest rates, unwillingness of foreigners to continue to underwrite American debt, or the fact that imports (including one import called Petroleum) become so prohibitively expensive (when they are paid for in U.S dollars that is) that people begin to take political action. Until then, nothing will be done about them. Mr. Perot, you might be an eccentric - do remember that Mr. Perot is rich - but we need you again.

Much has been made of poor (or non - existent) job growth during Bush's tenure. However, it's one thing to say that "the economy is a complete disaster," but it is another thing to see what the economic situation is really like. Currently, the official unemployment rate has been hovering at around 5.6 - 6 percent range for the last year or so. Moreover, the job reports of late seem to be holding steady or picking up.

Of course purists are going to scream and wail about how the official unemployment rate doesn't count discouraged workers, the part timers, and so on. But what is important is that the unemployment rate has not gotten entirely out of control - politically speaking. Yes, the unemployment rate was at 4 percent during the latter half of the 1990's, but it is not as though the unemployment rate has slid to - say - the 8 to 11 percent range. That would a clear signal to many that the country is in a serious economic slump and one which would provoke people into thinking about making a change in political leadership.

In a similar vein, the stock markets (and broader financial markets) have not cratered, although the bubble which they were in has partially popped. The broader picture that emerges is that, no, most Americans are not any better off than they were 4 years ago, but they aren't any worse off either.

So, what does the economic situation say for the fortunes of Mr. Bush? My reading of these matters is that the people who voted for Bush in 2000 are going to vote for Bush again and that the people who voted against Bush in 2000 are going to vote against him again. Broadly speaking, barring a significant movement either way over the next few months (which could very well happen), economic issues will probably end up being a neutral factor in the 2004 elections, with enough positives for enough voters canceling out the negatives suffered by other voters.

Tomorrow, more on the fortunes of Bush. This will be followed by my analysis of Kerry and perhaps Ralph Nader.

Posted by The Mighty Wizard at 11:25 PM
This entry was posted in the following categories: America

April 26, 2004

Oracle for March / April 2004

One question many visitors and acquaintances have been asking me is this: "Mighty Wizard, there is one thing we REALLY want to know! What we want to know is who is going to win the United States Presidential election in November 2004? Will it be George W. Bush or John Kerry?"

Well gentle readers, it has taken considerable mental effort and will power for me to see an answer to this. The Palantir has been VERY CLOUDY when I gaze into it and ask this most important of questions. However, glimpses of the future have started coming through.

And so what does The Mighty Wizard say about who will win the U.S. Presidential election in November 2004? The answer is that George W. Bush will be re - elected as President of the United States.

Over the next few days, analysis on my prediction will be forthcoming. Stay tuned.

Posted by The Mighty Wizard at 11:54 PM
This entry was posted in the following categories: America , Oracles and Visions

April 24, 2004

Pat Tillman - may you RIP (but I don't owe you anything)

I read on Reason Magazine's website yesterday about the death of former NFL player Pat Tillman. Tillman, aged 27, was a defensive back who played for the Arizona Cardinals. He gave up his $3.6 million contract with the Cardinals and turned down a five year, $9 million offer from the St. Louis Rams to join the U.S. Army in the aftermath of the September 11, 2001 terrorist attacks. He perished in southern Afghanistan while with a group of Rangers who were hunting Al Qaida forces.

I have mixed emotions when I hear such news. Most people of course would bend over backwards to praise such a man for living his convictions. This is especially the case of a man such as Tillman, who did not seek acclaim for his actions. One thinks of Tillman verses say John Kerry, who went out of his way to gain attention for his opposition to Vietnam after he came back.

Like most people, I do have to admire Tillman for living his convictions. I am at least glad that he died in Afghanistan, instead of say, Iraq. At least in the case of the Afghan war, there was much more political support for overthrowing the Taliban and trying to nab Bin Laden, verses the "sideshow" of overthrowing Saddam Hussein. One also wonders if Tillman might have decided to enter politics should he have come back from service.

I also have to admire Tillman verses most of the supporters and architects of the current Middle East policy. Paul Wolfowitz pursued a Ph.D in political science at the University of Chicago during the late 1960's, rather than serve in Vietnam. Dick Cheney didn't serve either, nor did Condi Rice or Richard Perle. For that matter, only about about 30 percent of Congressmen and Senators have served in the military. Only six Representatives and one Senator have children who are currently serving in the military. Read one of my. first posts into this weblog for my thoughts about politics and irresponsibility.

To put it another way, one of my fellow employees at my company, who served 14 years in the Army, said to me once that there weren't too many patriots in this country. It was mostly lower - middle income people, people looking for direction, and those who had a family history of serving who were the ones who ended up enlisting in military service.

There is a part of me that says that Tillman should have simply taken his money, fame, and fortune, and said to hell with it. I can't help but think that he threw it all away. There may yet be a time where the Taliban forces may come back to power in Afghanistan. That is still sobering.

Moreover anything that glorifies politics glorifies political "solutions" to everything else. Ergo, I can't help but think that stories like this make it easier for people to swallow more government programs, more taxes, more regulations, more government employees, etc. After all, if someone like Tillman was willing to sacrifice his life, who am I to complain when my water bills and property taxes go up because of malfeseance? To put it another way, as my own father once said to me when we got into an argument 15 years ago about Social Security, "Damn it! Why don't you just shut up and pay up!"

The answer is: NO! I WILL NOT SHUT UP AND I ONLY PAY UP BECAUSE I HAVE A GOD DAMNED GUN POINTED AT ME! THERE ARE TOO MANY SCHMUCKS OUT THERE WHO DON'T PAY ENOUGH ATTENTION AND BECAUSE OF THIS, OUR LIBERTIES AND MONEY GET TAKEN FROM US!

Pat Tillman - may you rest in peace. Now, I've got work to do.

Posted by The Mighty Wizard at 11:16 PM
This entry was posted in the following categories: America

March 23, 2004

Of The Agony of Public Education in America

Before I launch into tonight's epistle, I would like to say that I attended a public meeting of the Houston - Galveston Area Council (HGAC) forum on transportation matters. In these shindings, HGAC, as do all such government agencies, always present their "20 year" or "25 year" plans for the future. I said my two cents worth about mass transit, which was duly put into the public record, then left.

The main part of tonight's opus involves some articles that were printed in recent editions of the Houston Chronicle about public education. One of the endless slogans that you hear from anyone that is remotely involved in public education in America goes something like this: "Gosh dang it! We just absolutely have to ensure accountability of our public schools! After all, we all know that kids are mindlessly promoted, who cain't do their readin', their writin', or their 'rithmitic! And they cost too much!" Indeed, in today's (March 23, 2004) edition, the Chron writes about Texas Governor Rick Perry's plans to meet with legislative leaders to discuss school financing - yet again.

Well gentle readers, I wish I could stop this complaining about public schools here, but obviously the litany of sorrows that have been expressed about public education in America go far beyond that. In Sunday's edition of the Chron, the hotly argued debate over whether children in public schools should be compelled to say the words, "under God" in the Pledge of Allegiance was highlighted. The issue, being brought up by California Doctor / Attorney Michael Newdow, will be heard by the United State Supreme Court tomorrow.

So where am I going with this? Well, the point readers should ponder is this: Despite all of the griping that various interest groups make about the "lack of accountability" in public education, I will argue otherwise. I say that the facts point in the other direction - namely that there is too much accountability in public education in America.

So how can I say that? Well, consider this. Under the political theory of Republicanism / Democracy, the government is, of course, supposed to be accountable to "the people." This holds true for the idea of public schools, since they are funded by taxation.

What I am getting at is that because of the nature of education, and because of the fact that children are for the most part compelled to attend school until they are 17 - 18 years old, there are an astronomical number of groups which have interests in the outcomes of public education. As such, all of those interest groups are all literally waging an endless and ongoing political war of cosmic proportions that is being fought over every conceivable issue that can possibly be found in the world of education.

Do you want examples? Well, how about this for a list of starters: We fight over funding issues of course, but we not only fight over funding, we fight over how funding should be accomplished and how much. We have famously fought judicial battles over segregation / desegregation, forced busing of students, political battles over eminent domain powers to be exercised by local boards, teacher salaries, student punishment, what is written in textbooks (evolution or Biblical ideas of creation anyone?), we fight over dress codes, over where school bus routes will run, over whether failing student athletes can play sports, over attendance issues, over the closing of schools with low levels of enrollment (sometimes local boards are sued by parents to prevent their school from closing), and over whether classes should be taught in English, Spanish, or as was famous done in California for a while, in about 50 different languages. This was done all in an attempt to appease literally dozens of - you guessed it! - ethnic / interest groups fighting for a share of the pot to be tailored specifically for them.

We even wage political agendas and battles over what food is served in the cafeteria. After all, don't we have a bunch of fat kids floating around out there these days? They certainly don't make for good military recruits, don't they? And all those fat kids can't be light on the pocket book for all of you who plan on America nationalizing the ol' health care system, don't you think?

Something that adds fuel to the flames of agony experienced over public schools is that while few people have a real clue as to what is going on in politics most of the time, nearly everyone has spent at least some time in the public school system. Moreover, most of those kids grow up to be parents themselves and send their kids off to public schools. As such, they might not know too much about - say - the recent elections in Taiwan, but they all have some strong ideas as to what should be going on in the public school system.

As I noted above, these matters all combine to create the "perfect storm" around the idea of public education. Consider that:

1. Teachers unions, who should be working with parents, instead become their adversaries in the war over your pocketbook.

2. Legislators in Washington D.C. and in state capitals, many of whom have never spent a day in a classroom since they've left school, try to do brain surgery from afar by passing mandate after mandate on teachers and public education.

3. Classic books of American literature like Mark Twain's "Huckleberry Finn" can't be read anymore because it's deemed racist.

4. Students can't be punished anymore. Why? Because if you try, then the parent of that child, who happens to be a taxpayer and who also happens to be compelled to follow the law and send their child to that public school, may damned well decide to hire an attorney and sue the school district! Indeed, by some estimates, about 30 percent of public school principals, teachers, officials, and administrators have been visited by a lawsuit of some kind or another.

I will argue and hold forth that the famed court case, Brown vs. (The Topeka) Board of Education, which is so revered by the Left and by American Jurisprudence for "striking a blow" for civil rights and "doing the right thing" in America, was a landmark case in one more area that what the case is generally given credit for. I say that Brown vs. Board is THE legal case that led to the tidal wave of lawsuits that have blanketed American public education over the past 50 years. After all, if you can't get what you want via the political process, then the courts are always available for you to try and shape the future to your own desires.

And what court cases came up regarding public education before Brown vs. Board? The only one I can think of is the Scopes trial of 1925, which revolved around teaching Creationism vs. science.

If you have ever wondered why some of our public schools look like jails, then maybe you have your answer. Have you ever thought of the idea that part of the purpose of public schools was not to necessarily educate you - it was to make sure that you stayed occupied and off the streets until you turned 18 years old. After all, your parents have got work to do.

So what is the answer? Support private education! Home school your kids, if you can manage to do so. These ideas revolve around the idea of choice. Words like "compulsory" and "mandatory" don't appear in the realm of private education as they do in public education. And the results are often better too! If you've ever watched C - SPAN's coverage of Congress, then you get an idea of what public education has turned out to be like.

And while you're at it, don't forget that Washington D.C. is quietly being turned into a Fortress City, much like some public schools out there. Maybe it has something to do with what goes on there, don't you think?

Posted by The Mighty Wizard at 10:54 PM
This entry was posted in the following categories: America

March 21, 2004

The Oil and Petroleum Question - 2004

I work in for an Oil and Gas company and I've been employed in the industry for the past 16 years. There have been a number of stories circulating in the mass media lately about the fact that petrol is trading in the $38 per barrel range and what, if any, effect this is having on the economy. Ergo, what effect will these facts have on the U.S elections in November 2004.

It's been noted that prices for gasoline are hovering in the $1.70 per gallon range. However, the fact that oil is at $38 per barrel and that gasoline is at $1.70 per gallon has to be taken into persepctive. A good place to start in looking for knowledge about the economics of oil and gas is the website of the Energy Information Agency. There, you can find inflation index data on what prices have been like in the past verses what they are now.

One of my earliest memories I can recall as a boy was stopping off on the interstate on a family vacation trip in 1972. We stopped at a Mobil station, where I can still remember that the price of a gallon of gasoline was about 35 - 40 cents. I was astonished to find that this is roughly equal to $1.70 in today's prices, which means that over the past 32 years, the price of gasoline has not changed.

The thought beckons - does that mean that current dollars will also only be worth 20 cents by the time I turn 70 years old? If so, I have some work to do in order to make sure I have enough for retirement! Of course, this includes the high inflation years of the 1970's, but considering what is happening with today's Fed, I would not put the idea behind that inflation might break loose again in the future.

As for the here and now, there already have been words and deeds being done over energy. The Senate voted to stop filling up the wasteful "Strategic Petroleum Reserve," but it looks as though that matter will be going nowhere. Strangely enough, much of the original stock for the SPR was purchased and filled in the late 1970's, when oil was $15 - $30. In today's dollars that meant that that oil was purchased for over $50 a barrel. So, the American taxpayers have been hosed in the name of "energy security."

In general, since the SPR is a government asset, it means that it can be used to help buy an election. Think I'm wrong? Well gentle readers, former President Bill Clinton did just that in September 2000, when he ordered the sale of crude out of the SPR just weeks before the election. Democrats I knew were screaming at the top of their lungs that this was all done in the name of sparing the poor average Joe of high oil prices. President Clinton was just acting in the public interest.

And I'm sure that I've got a bridge to sell you in New York.

In the 1931, a Columbia University economist named Harold Hotelling wrote one of the most useful papers ever published regarding natural resources. His idea, naturally, is called The Hotelling Theorem, but is also known by its other name, the Theory of Exhaustible Resources. Hotellling's original paper can be found in the Journal of Political Economy, volume 39, pages 137-175, 1931.

In his paper, Hotelling noted that even though resources can potentially be exhausted, they can - AND SHOULD - still be looked at as any other form of asset. As such, they should be treated, economically, as any other form of asset. If a resource is declining in abundance, the price will then need to rise at a level of at least the rate of interest in order to draw more resources in order to discover more of it. Otherwise, it makes no sense to invest in more resources because you can make better money leaving your money in the bank.

If petroleum really becomes scarce in this world, the price will indeed begin to rise in real terms. But all that will do is signal to all of us that we should use less of it. It also will make alternatives to petroleum more attractive to use.

My own feeling is that over the long run, the marketplace is guiding us to a world of using petroleum from tar sands and oil shale. In the meantime, sometime in the 21st century, the efficiency of solar cells may rise to a level where solar energy may finally become economically as cheap as fossil fuels. In any case, we are headed towards a future of astonishing energy abundance. And that is a positive thought.

Take that all of you endlessly pessimistic (and endlessly wrong!) doom sayers and environmentalists!

Posted by The Mighty Wizard at 08:25 PM
This entry was posted in the following categories: America

March 18, 2004

By Foul Craft - An Election that wasn't

Today, your Mighty Wizard heard fell voices in the air from afar. They bade him to visit the website, Field of Schemes. On today's (March 18, 2004) headlines, FoS carries a story about how in Bloomington Illinois, the town's voters rejected a non - binding referendum to build a $35.2 million minor league hockey arena.

Despite this, Mayor Judy Markowitz said the project will go forward anyway. Why? Because while 66% of voters cast "no" votes, only 10% of residents voted, meaning the vote didn't really represent a majority.

Ah, the joys of Democracy. Can someone explain to me what is the point of holding a non - binding referendum or election? That aside, the editors at FoS pointedly ask whether a majority of voters turned out for the election that put Ms. Markowitz into office.

For that matter, if we are to use this type of logic and apply it further, why don't we broaden the question and ask ANY office holder in the United States - including the President - about the legitimacy of their power, since turnout for elections in the United States usually result in a participation rate of anywhere from 2 - 60 percent. The more powerful the office, the higher the turnout rate, with State Rep offices getting - say - 25 perent turnout, while big city Mayor races come in at the 30 - 35 percent range. Congressional races are in the 20 - 40 percent range, while Governor races tend to get about 30 - 45 percent turnout. Presidential races in the 20th century pulled in 40 - 60 percent, with 50 percent turnout being roughly the norm. Of course, with the Presidency, we have the electoral college, which helps preserve (what little is left of) the spheres of the states in America's federal system.

Well, I regret to inform you, voters of Bloomington Illinois, that I can't help you. I'm afraid that in this matter, all I can say is that I really am a very Great Man, but I also happen to be a Very Bad Wizard.

Posted by The Mighty Wizard at 09:49 PM
This entry was posted in the following categories: America

March 14, 2004

Words of caution from History about America's future

As a Libertarian, I opposed the war in Iraq, no matter how much do gooderism might have been involved. The main reason I opposed the attack was that, as always, wars are expensive and often lead to ever more bloated government. Once the bloat is created, it is hard to roll back and rarely goes away. In this case, after September 11, 2001, the new bloating in government involved 1) a hiring spree by the American intelligence agencies which already had a $30 BILLION BUDGET at their disposal and 2) The creation of the Department of Homeland Security in the wake that the old INS, which famously delivered a visa to one of the 9/11 attackers months after the attacks occured. It took months to form the new expansive agency. In both cases, the federal government went on a hiring spree and many of the new jobs paid well.

My own view about the war is that Bush the Younger seems to be the type of guy who doesn't like anyone who tarnishes the family honor. Former Texas Governor Ann Richards, who famously said that Bush the elder "was born with a silver spoon in his mouth," was deposed by G.W in the 1994 Texas Gubernatorial election. A similar fate visited Al Gore in 2000.

As such, Bush the Younger probably would have found a reason sooner or later to go after Saddam during his time in office. I have a feeling that the Bushies now view the failure to get rid of Saddam in 1991 was a mistake. The September 11, 2001 attacks led to the perfect opportunity for doing so. Tons of interest groups tried to push through their agendas after the initial excitement after September 11, all of which were pushed in the name of "security," but when the inital ardor cooled, the Bush Administration was left with the only cards worth holding. The political pressure to prosecute a war against the Afghans would have been unbelievably hard for any President to resist, even for a Democrat. However, the war in Iraq was a war of choice if there ever was one.

One thing that was a good outcome was that there was a feeling in America in the immedate aftermath of September 11, 2001 of wanting to "do something." Ordinary everyday Americans by the millions wanted to "do something" - anything - to help with the "war on terror" - except join the military! New York Times columnist, Thomas Friedman, a Card Carrying Internationalist and Globalist extrordinaire if there was one, noted this in a television interview about 18 months after September 11. He chided the Bush Administration for "squandering" an opportunity for "mobilizing an American public" that was in a public minded mood. Anything could have been pushed through on the American public, and we may well have accepted it. That's all I would have wanted - to have my time and money taken from me in the interest of "the public good!" The Bush Administration essentially told the public to get back to work and that government would "handle the problem." And so it happened. Phew!

Being rather historically minded, I quietly worry that there is always the threat, no matter how minute, that the United States government might fall to a military coup. America has an active standing army numbering 1,400,000 with another million + reservists. The vast majority of Americans would not imagine in their darkest dreams that something like this might happen and would probably dismiss someone like me as a nut, but this is exactly what happened to Rome when it went from being a Republic to becoming an Empire.

All it would take is for a sitting President to surround the now slightly militarized and fortified Washington D.C. with troops, taking Congress, the Judiciary, and the Federal Reserve as "hostages." All that President would have to do is say that from now on, the rules of the game have changed - Constitution be damned. After all, nobody takes the Constitution seriously anymore don't they? If something like this happens, all of you who think the Second Amendment should have been eviscerated long ago might have something to think about.

There were other factors besides large standing armies that led to Caesar crossing the Rubicon. Namely, those standing armies in the late Roman Republic were led by Generals who were often out in the field from years at a time. It used to be that Generals would be rewarded by the Senate with a seat or governorship once they stepped down from their commands. However, having Generals who were out there for such long periods led to situations where Generals had their own bases of power. Soliders became more loyal to their Generals than to the Roman state, because their Generals had the power to reward them.

Another reason for the collapse of the Roman Republic had to do with land reform. It used to be that during the Republic, former soliders would be rewarded with land for their service. This was no small thing in a world of grinding poverty and few forms of generating wealth. However, this system collapsed because it turned out that Senators had long been poaching land in Italy and elsewhere via corruption and under the table means. In fact, this still goes on today in places such as Brazil. As for the idea that soliders would get rewarded with land, the idea still survives even in today's America, where the military will partially reward you with both shelter while on duty and will underwrite a home mortgage when you leave for civilian life.

In the last century before Christ, this poaching of land led to a political crisis. Many people in the Roman Republic knew that land reform was needed before the supply of good land ran out, but attempts to push land reform in the Senate failed because too many Senators had an interest in keeping the status quo. Reformers were assassinated, poisoned, or were successfully shunt aside. Ergo, land reform was constantly pushed off the table, until the Senate itself was humbled by the coming of Caesar - a General who had served in Gaul and who decided that he was not satisfied with the rewards of being a Senator or Governor - he wanted the whole enchilada.

I don't think that a military coup is in the cards for America as long as there is enough wealth and pluralism out there for the Executive branch and the military to take outright for themselves, to retire to, and to aspire to when they leave office.

As for the continued growth of a bloated federal government in America under Bush, I read that the Bush Administration is starting to consider a $2.63 trillion budget for 2005. The military budget is only about 15- 20 percent of this. The rest is in transfers of some kind or another. This is about a 20 percent growth over the $2.2 trillion budget from as little as 2 years ago and we aren't paying the taxes to keep up with spending! A whole host of economic problems threaten America from renewed runaway deficits - including a debauched currency. Even John Maynard Keynes, the economist conservatives love to hate, said that the fastest way to destroy a country was to debauch its currency. I guess its time to buy Euros!

It's on nights like this that I wake up in a sweat...

Posted by The Mighty Wizard at 11:41 PM
This entry was posted in the following categories: America

March 06, 2004

Martha Stewart - Government designated Scapegoat

Well well well. Yesterday the news came that 62 year old Martha Stewart, domestic style / living maven and media mogul extraordinaire, was convicted of four counts of:

1) lying about having prearranged to sell stockholding investments in a medical drug company called ImClone, if the stock fell below $60 per share. Ms. Stewart sold $228,000 worth of ImClone stock one day before the company failed to get U.S. Food and Drug Aministration approval to review a cancer treatment drug.

2) She lied about not being able to recall being told that the family of ImClone founder Sam Waksal was selling stock as the company was running into problems.

3) Conspiracy with her stockbroker in working to obstruct justice and make false statements. and...

4) Ms. Stewart tried to hamper an Securities and Exchange Commission investigation.

Well, well, well. It appears that the federal prosecutors could not get some kind of conviction of "criminal activity" regarding "insider trading" on Ms. Stewart, so they decided to try to hang her on charges of lying. Maybe state and federal prosecutors should start expending more of their creative energies on convicting elected officials and bureaucrats on charges of lying.

I have to admit that I don't like Martha Stewart. It has nothing to do with her wealth or what she has managed to achieve in life. For those traits, I have nothing but admiration for her. She literally has managed to create something of value out of something that should be rather commonplace. She has achieved much more in life than the government prosecutors who convicted her on petty charges of lying.

What I don't like about Martha Stewart is what others don't like. It's the way she comes across to you. She has this steely, faintly patrician, New England aura and persona about her. Ms. Stewart is the Norman Rockwell world of distant country suburbia, SUV's, nice clothes, and - distantly - of liberalism. If it comes to style, cooking, and so on, I would far rather go for watching sensual, brunette haired, British diva Nigella Lawson (who happens to be the daughter of a former Tory Chancellor of the Exchequer). Watching Ms. Lawson strut her stuff can really put some steam into one's imagination. Cooking that is...

As far as "insider trading" goes, I have some rather strong opinions on the subject. About 8 years ago, I purchased and read a book called "The Secrets of the Street." The book was authored by Gene G. Marcial, who wrote an investment column for Business Week magazine for many years. In his book, one of the items that I distinctly remembered that Marcial hammered on revolved around the issue of information. The subject of information was an issue that I further learned the importance of when I went back to school and studied Economics and Game Theory.

Marcial wrote that various players in financial markets (as in all other forms and games of human endeavor) have access to different kinds and levels of information. There is a big difference between having poor information, having good information about something, possessing great information, and having PERFECT information. If you have PERFECT information, you can beat everyone else everytime. Essentially, the righteous types who complain about market corruption and "insider trading" are complaining that there are people out there who have access to better information than everyone else. Ergo, they can act on that information before the public does and gosh darn it that's just not fair!

However, there are already laws on the books that say that if you are a high level official in a publicly traded company, you have to file forms and statements as to when you are going to buy or sell stock. That information is then released to the public and other players in markets can act on that information.

"But wait!" you cry. Ms. Stewart did have access to privileged information regarding ImClone. Well, maybe she did. But where's the crime involved? She had a well connected broker and he did his job. So What?

One of the things that really irritates me about the issue of stocks and "insider trading" is that over the long run, if you are going to go playing individual stocks in the stock market rather than playing it safe and simply investing in - say - mutual funds, then most people probably are not going to do any better than if you went the safer route. In order to do really well at stocks and investing, you have to invest an ENORMOUS amout of your own time towards digesting vast swathes of information on what's going on in financial markets. Ergo, why should people get wired up over this?

It is telling that in the extreme Internet / dot.com bubble markets of the 1990's, there was a thriving crowd of "day traders" who quit their jobs and simply tried to spend their time speculating on the stock markets. Let me ask you this - when was the last time you heard a news story covering "day traders?" Why don't you hear stories about people day trading? Because, most of them were burned alive when the ENTIRE stock market tanked in 2001 - 2002, damn it! They either didn't see it coming or refused to believe that the ENTIRE MARKET would EVER crater. If they did see the crash coming, then either they didn't get out in time or they just didn't act on what they saw coming.

I have to say that I have done reasonably well in my own investing. I basically rode the wave of the 1990's, but I pulled all of my money out of the market in late 2000 and put my money into bonds. I had a strong feeling that the overall market, which was trading at about 35 times earnings as a whole, was vastly overvalued. Ergo, I avoided the market crash, but I subsequently missed much of the market rebound last year. This was because I am still suspicous that the markets are overvalued and I don't want to get burned.

Nonetheless, I work for a company whose fortunes have changed somewhat recently, ergo my company matching part of my 401k plan has done well lately. If you have done well, it's far better to concentrate on preserving your capital than trying to expend it on speculating on the next great thing. That's how the old money rich stay rich.

Enough! It's Saturday evening and it's time for some Jack Daniels!

Regards.

Posted by The Mighty Wizard at 11:10 PM
This entry was posted in the following categories: America

February 26, 2004

Wow! - What timing!

Wow, what timing! Just 3 days ago on February 23, I wrote about the oncoming Social Security (and Medicare) nightmare. Little did I know that two days later, American Federal Reserve chairman, Alan Greenspan, would utter words saying, "I am just basically saying that we are overcommitted at this stage. We have been making commitments without focusing on our capability of meeting them."

Greenspan of course was referring to run away spending by President Bush and the Congress. He went on to say that the methodology using to calculate inflationary pressures via the current "price of living index" should be changed. Comments like this predictably drew a firestorm of criticism in the Capitol.

Representative Clay Shaw (R) of Florida, the chairman of the Congressional subcommittee in charge of Social Security said, "My message to seniors and those nearing retirement: You will receive nothing less than 100 percent of what you've been promised. Your benefits are safe and secure." Nice caveat to those who are NOT NEAR RETIREMENT!

Wow, What timing! On February 11, 2004, I wrote a film review of the Brazilian film, City of God. One of the issues I wrote about concerned the excellent depiction of police corruption caused by high profits to be found in the drug trade. I also wrote about how Americans seem to think that this only happens in Third World countries where police are obviously corrupt.


Posted by The Mighty Wizard at 10:38 PM
This entry was posted in the following categories: America

February 24, 2004

The New IT Outsourcing dilemma

I've worked in IT for the last 15 years, working mostly in low level jobs. This is partly out of lack of ambition in the field, but also because my employers have seemed to think that I've never deserved to be promoted. My "so - called career" has also been vexing because I've seen probably 10 or so instances of people who have come into the IT field with no academic / training background related to IT and no descernible skills whatsoever, only to get promoted past me on the pecking order. The next thing I know, these people are getting exposed to all kinds of neat things, given administrator authority over important systems, and given challenging projects that allow them to exercise skills that they get to learn on the fly, while I still stay at my dreary job. More than a few people have told me over the years that I need to learn the fine art of brown nosing. Yes, life really is unfair...sigh.

Recently, there has been some talk about the so called IT outsourcing situation. For those of you who are not in the know, there have been a lot of talk in the news about outsourcing IT jobs to India and other such places, where well educated English language speakers who will work for $10,000 a year are a dime a dozen. Ergo, all of the IT jobs in the Western world will experience a giant sucking sound, leaving people such as myself working as grounds keepers in amusement theme parks. "Will code for food," went the sign of one now unemployed software coder who protested at a corporate meeting in Manhattan.

To boot, in today's Houston Chronicle, an American Enterprise Institute scholar named Norman Ornstein ripped into President Bush's economic advisor Gregory Mankiw for his words which he spoke earlier this month. Professor Mankiw said words to the effect which explained the often misunderstood idea of comparative advantage, using the example of Indian doctors reading X - rays over the Internet. For this, Professor Mankiw had a storm of verbal attacks thrown at him. Professor Ornstein went on to write that President Bush had decided to outsource the Council of Economic Advisors to India. Also, the Congressional liason operation would be outsourced, along with the State Department's Middle Eastern desk, to Guangzhou China. My advice to Professor Mankiw - stick to academia and stay out of politics!

Boy did I enjoy a guffaw out of this! America just might get better "government services" (whatever that means), but the political classes would take the payroll savings and spend it on Medicare!

Predictably, The Economist weighed in on the matter in this week's (February 21 - 27, 2004) issue. Sensibly, The Economist pointed out that America's population between 1980 and 2002 has gone from 228 million to 290 million, a 27 percent increase. Meanwhile, the number of jobs has gone up from 99 million to 138 million, a 37 percent increase. Of course, there has been considerable argument over the income distribution produced by changing economic circumstances, but that's a story for another time.

I believe that for the most part, there are certain IT jobs that are much more suseptible to being sent abroad, like application program coding jobs and Windows help support. Many jobs are stuck here in the West. Every business needs help desk support type jobs, simply because every business has people tapping away on computers everyday and some of those machines break down. Also, if your company's operating systems or Internet site is being hacked from somewhere (anywhere!), corporate executives don't want to hear that someone in India is doing "remote brain surgery" and attempting to recover that all important mission critical platform. You want your systems admin who can be yelled at tomorrow morning in the office at 9:00am. Likewise, I work for an Oil and Gas company, and many of the necessary IT skills that are requried in the petroleum industry are peculiar to this industry. Ergo, I don't see too many such jobs going away because they are stuck here. If anything, companies such as mine look for people from other countries to immigrate here.

This matter also overlooks the fact that the biggest customers of IT services are (and always have been / will be) governments themselves. Governments have the power to legislate that no IT jobs under their purview will be outsourced anywhere. In fact, The Economist article I mentioned above said that President Bush recently signed a bill forbidding the outsourcing of federal contracts overseas.

As an aside, President Bush has not vetoed ANY bill yet of any kind, so the fact that he signed such IT legislation doesn't surprise me. The President doesn't seem to have any real convictions or overall political vision other than just being willing to throw state power at anything that comes his way, and enacting whatever he needs to enact in order to get reelected. That has shown up in the spending spree that the federal government has gone on under his watch.

I should say though that despite my cautious optimism, everything has not been a bed of roses. I work in a group that used to have 12 people in it. Now we have one boss, 3 full time employees, and 4 part time college students. Moreover, this being IT, our entire work environment has been turned upside down over the past decade or so. It often get tired of having to learn how to use an endless number of new tools and having to explain to others how the latest greatest gizmo works.

More on this some other time. I've got other things I want to do.

Posted by The Mighty Wizard at 11:15 PM
This entry was posted in the following categories: America

February 23, 2004

The Oncoming Social Security Freight Train Nightmare

I promised in yesterday's post that I would write a few posts about health care in America. Well, I'm going to break that promise because of a piece of mail I received today. And what was that piece of mail that compels me to write about today's topic? Well, if you read today's title, then you guessed it already.

As I've written before, I was a sometime member of a late 1980's - early 1990's twenty something political pressure group called Lead or Leave. Lead or Leave's issue had to do with federal government finances, particularly the so called "social safety net" issues of Social Security and Medicare. Demands were made to produce balanced budgets, make long run changes to policies to head of intergenerational warfare, etc. I was a member for about 18 months, occasionally going to local meetings, making a few public speaking engagements, handing out flyers at 1 or 2 public events, and giving the national group a few hundred dollars. I quit the group before I went to China in 1991 and didn't get back in touch with anyone when I came back to America. The group disbandoned in the mid - 1990's.

For our efforts, we were frequently labeled Granny Bashers. And that was some of the polite things people called us.

Well, here we are 15 years later, and not a God damned thing has changed. The year 2012, when the oldest of the Baby Boomer tidalwave starts to retire, is now only 8 years away. President Bush, who is a CINO (conservative in name only - hasn't vetoed a bill yet), recently padded the bill by giving the old folks publicly paid for pills. Meanwhile in a few quarters, some people are screaming that "we can't allow this to become an intergenerational war!" Well folks, sorry. Politics, by it's very nature, sets off one group against another. The Political Beast thrives on warfare. The Beast really is a war of everyone against everyone else.

AARP has been running TV commercials recently featuring themes on how "if it were only so simple." They show average people calling The President and asking them to "fix the Medicare problem" and having The President reply "no problem." They also taunt people with statements saying "just try getting health insurance if you're over 60" and so on. It's this mentality that makes Americans desire to hit up other Americans for a handout, rather than relying on themselves. God damned bastards. AARP should stick handing out travel discounts to their members and keep their hands out of my pocket.

The problem of 20th century state run retirement systems created by all rich Western democracies is universal. Some countries are going to get hit by the tsunami worse than others. The Japanese will get hit the worst, while the British (who made reforms under Thatcher / Major and already have a slightly older than normal population) will get off easier. In my view, the problem of what to do about aging societies will be the single largest matter that all Western countries will face in the 21st century.

An investigation of my Social Security statement reveals that "Social Security is a compact between generations... But now, the Social Security system is facing serious future financial problems."

John Attarian, a Michigan based economist and anti - Social Security warrior, wrote in a 1994 article of the National Review (which I still have) about the issues surrounding Social Security. He listed the many political myths and stories that have been doled out over the decades by Social Security's supporters. One of these is the old "Social Security is a compact between generations" story. Attarian wrote that "no such compact between generations exists." It was Attarian who, in that classic article, revealed to the educated, politically minded public the astounding matter that people DO NOT HAVE A PROPERTY RIGHT TO SOCIAL SECURITY BENEFITS!!!!! This goes back to the 1960 Supreme Court decision (based on an earlier 1938 decision) of Flemming vs. Nestor, which can be found here:

http://www.ssa.gov/history/nestor.html

As an aside, I took a public finance economics course as an undergraduate student. I gave this article to my professor, Steven Craig, who was blown down by my revelation. I hope he is passing this on to his students today.

So how bad am I going to get fucked over? Well, the government says I've paid $60,000 in Social Security taxes and $15,000 in Medicare taxes. Factoring in a 3 percent inflationary present value to those numbers means that I've paid probably about $90,000 in S.S taxes. There's the old fib that "your employer pays 50 percent of the tax", but what really happens is that the tax is just passed on to you by your employer. You can only avoid paying the tax by quitting your job and taking another one where your next employer will do the same thing to you!. Under current law, I have to wait until I am 67 (people born after 1960 have to wait until they are over 65 to go on the dole) until I am eligible to collect money, another 30 years.

My statement says I'm eligible at age 62 for $1,000 per month, $1,400 a month at 67, or $1,750 at 70. If I live to be 80, then I collect $216,000 if I retire at 62, $218,400 if I wait until 67. If I wait until I'm 70, then I collect $210,000. Since my estimated inflationary value of my Social Security taxes is probably about $90,000 so far, at continued 3 percent inflation, that number will reach $212,000 at age 67. That means that if I live to be 80 years old, then from now on, I will loose every last dollar that I pay in Social Security taxes.

How much is that? I would estimate that based on my current earnings, I will end up losing about $300,000.

The old World War II bastards who yelled at us 15 years ago about how they won the war and that we should quit whining are now dead. But that didn't give them the right to stick me with a bill to pay for THEIR retirement.

Paul Craig Roberts wrote not long ago that if there was one thing that he had learned in his 25 years of public life, it was that was that nothing will be done about anything until the matter becomes a crisis. George Will has written that there are two types of problems in politics - problems that strike from out of nowhere, and far off problems that don't change but come relentlessly at you. And now the Social Security Freight Train cometh, but not a God Damned thing has changed.


Posted by The Mighty Wizard at 11:01 PM
This entry was posted in the following categories: America

February 22, 2004

Dems can take issue on health care - part I

This is the first of several columns of the subject of health care.

Today's entry takes its title from a February 20, 2004 column by famed economist and New York Times columnist, Paul Krugman. Krugman, an obviously partisan Democrat, wrote that a recent Gallup poll showed that 82 percent of Americans rank health care as among one of their top issues. Other polls show that plenty of Americans think that health care in America should be nationalized.

Oh shit...

The facts about health care in America are this:

1. About 84 percent of Americans (11 out of 13) have access to health insurance, either through their employers or through Medicare / Medicaid. These percentages have remained steady for the past 20+ years.

2. About 56 percent of health care costs are paid out of private sources, with the other 44 percent coming from governments and taxation. These numbers have remained steady since at least 1990. I would have to do some research to pinpoint exact dates on facts one and two above, but I stand behind my words based on immediate knowledge of the statistics.

3. Health care spending in America is now 15 percent of GDP, up from the 13 - 14 percent at which it had been since 1990 or so. Again, I would have to do some research on dates, but the "fact" I stand behind. Yes, health care in America is expensive. It is also the best in the world.

4. Most people who lose health insurance lose it for only a short time.

5. America produces many of the world's health care innovations, which are ripped off by the nationalized health care systems of other countries. The American pharmeceutical drug industry, the only one in the world that is semi - free market (though that may change in the not too far distant future if the Democrats gain control of the White House), is the source of many of the world's new drugs. Again, new drugs are not produced in great quantities by nations that have nationalized their health care systems.

6. There is no doubt that Americans are choosing to take non - wage benefits as more of their job compensation bundle. Non - wage benefits are often not taxed, verses income which IS taxed. This includes health insurance, which employers get tax breaks for offering to employees. In 1962, Americans took 17 percent (on average) of their compensation in the form of non - wage benefits. By 2000, this had reached 41 percent.

That's all for this evening. I'll write more on this complicated and complex topic over the next few days. In the process, I'll proceed to explain why I wrote "Oh Shit" at the beginning of this column!

Posted by The Mighty Wizard at 10:16 PM
This entry was posted in the following categories: America

February 14, 2004

Federal Transportation Bill passes the Senate

Today, the news wires reported that the Republican controlled United States Senate approved a $318 billion transportation bill by a margin of 76 - 21. This vote margin is large enough to override a veto of the bill from President Bush (overriding Presidential vetoes requires a two - thirds majority of both Houses of Congress). News stories are saying that current law had appropriated $218 billion over the past six years for transportation purposes, also reporting that the Bush Administration had recommended $256 billion for the current bill. This is notable since the United States federal government has been spilling plenty of fresh new red deficit ink since Mr. Bush (with Republican majorities in both Houses of Congress) took office.

Congress has been handling most of its transportation pork barrel legislation in six year intervals since the 1980's. I'm not sure why this was worked out, but it makes dealing with such matters more efficient than trying to deal with them every year. Every Senator gets a chance to put their hands on the till once per term. Also, most House members survive long enough to get a chance to bring home some jobs and bacon to their districts from at least one transportation bill. Notably, transportation bills always get passed early in election years.

This year's transportation bill played a role recently in Houston's rail war. In 1998 - 1999, as the 7.5 mile sexy, shiny new twain twack was being built, the Metro board promised that there would be no new rail planned until the current rail line was completed and "shown to work." Of course it is crucial that nobody who supports rail ever has a working definition of what exactly it means when they say that "rail works."

Things being the way they are in politics, that promise was quickly discarded by Metro because of the alignment of the stars regarding federal transportation funding. We anti - rail types tried to stop the construction of the current rail line via petition, but Mayor Brown suddenly placed his own petition on the 2001 ballot. In the confusion, Mayor Brown's petition was approved and construction on the rail line went forward.

To continue with the current rail morass in Houston, last year a big referendum was pushed by Metro (in the guise of a taxpayer funded "education campaign" complete with plenty of photos of traffic jammed freeways), and pro rail proponents. However, the current rail line was not completed and officially opened until the beginning of this year.

As an aside, on April 13, 2000, State District Court Judge David Berchelmann ruled that public transit agencies could not run taxpayer funded "education campaigns" for rail, unless they educated the public on both sides of the issue.

So, a question begs to be asked - namely, why was it that the pro rail people renegged on their promise not to expand rail until the first line was completed and "shown to work?" The reason is the above mentioned federal transportation bill. Metro and the pro rail crowd knew that the current legislation was up for consideration late last year and early this year. Thus they needed some type of public stamp of confidence that they had support for rail.

Metro's behavior says a lot about American government, namely its centralizing tendencies. By giving primacy to the Federal government, the Founders made sure that over the long run that American political life would end up revolving around Washington D.C. State and local governments frequently end up being mere appendages in a lot of matters to Washington, since 20 percent of the nation's GDP flows through the Federal District. Ergo, you will often see states and local government entities trying to do anything they can to get money back, including throwing it away if they have to. The only way that all of this can be reversed is if the Republican Party actually shows the will to roll back Federal power, which so far they haven't been inclined to do.

The reality about rail is that rail types know where their bread is buttered. Shirley Delibero, Metro's current President (and who happens to be booking town come April - see my January 28, 2004 entry about irresponsibility in politics for more commentary), was photographed by the Houston Chronicle sitting in a session of Congress as the new transportation bill was being "debated."

It was the Johnson Administration that started the federal involvement in building public rail in the 1960's. Private passenger rail lines had collapsed by the 1950's, though freight rail (which the pro rail types never seem to think about unless it's carrying environmentally dangerous material) continues to thrive in the free markets. If it were up to local transit agencies and governments to fund rail construction (which in my opinion is where transportation decisions should be made), finishing a few dozen miles of rail lines would take decades due to the cost. Metro's referendum from last year envisions completing 78 miles of rail by 2025, with a second referendum to be held in 2009 over whether rail building should continue. Why will another referendum be held in 2009 - 2010? Well gentle readers, if you've read my words written above and do some political calculus, you will know.

It is also notable that the Houston Chronicle has fired off a constant barrage of vitriol against Congressmen Tom Delay and John Culberson for their opposition to rail construction over the past few years. Of course, if the Houston Chronicle really believed that rail was such a viable option, then they would have paid for the building of a rail line themselves, and not demanded the public to pay for rail.

Visit this page for more reading about the Chronicle and its actions during last year's rail campaign: http://www.houstonreview.com/1102/secretmemo.htm

I've lived in Houston for most of my life and one of the most astonishing things I've ever witnessed regarding the reporting of the Houston Chronicle was their about face regarding the issue of rail. For many years, the Chron was what I would call agnostic regarding the building of rail. They would report the latest political debates regarding rail in Houston, but they rarely came down in supporting one side of the debate or the other.

This all changed circa 1998 or so. Around that time, the Chronicle suddenly became rabidly pro - rail and started running all kinds of editorials and stories on how it was absolutely necessary that Houston build light rail. In fact, a longtime respected Chronicle columnist named Jim Barlow, who remained anti - rail until the last, was given his walking papers a year or two ago.

I've never been able to figure out why the Chron suddenly went pro - rail, but my suspicions lean towards either new management, wanting to get closer in bed with former Mayor Brown, or needing to build rail in order to appease out of country IOC officials to bless Houston to be the site of the 2012 Olympic Games (remember the 2012 Olympic Games?!). It is also a known fact that a Chronicle editorial board member lives near where the new rail line was to be built, ergo he had an interest in the matter. Also, this board member's wife was of counsel to Metro in matters of property condemnation.

It is for reasons like these that I decided to start a weblog...

Posted by The Mighty Wizard at 12:24 AM
This entry was posted in the following categories: America

February 01, 2004

Can I Pick 'em or what?

On January 27, 2004, I said in my January Oracle that the New England Patriots would win this years' Super Bowl over the Carolina Panthers.

The game has just ended. The score...

New England 32 - Carolina 29.

Sometimes, it's just great to be me!

Posted by The Mighty Wizard at 09:33 PM
This entry was posted in the following categories: America

Houston - We have a problem

One of the monikers that Houston is known by is that it is called "The Space City." At times, I am caught by the attention that NASA still commands. When I was in high school, singer David Bowie came to Houston on his commercially successful "Let's Dance" tour and asked to be given a tour of NASA. A long time Houston DJ named Dayna Steele was astonished that Bowie would ask to see NASA. I can still remember to this day when 20 years ago, she said on the air words to the effect that, "it seems that every major music star wants to go see NASA. I don't know why. What's so special about NASA?"

I once met an Australian man who produced science themed television programs. When I told him I was from Houston, he told me that he had visited Houston several times before because NASA was here.

And don't forget that today is Super Bowl #38. The Chronicle mentioned the other day that NFL Commissioner Paul Tagliabue had ridden in a NASA flight simulator. Visit the bottom of this entry for more comment about this.

It seems to me that there may be a theme to all of this. 30+ years going, it seems that NASA is mostly something enjoyed by the older set. They can still remember seeing Neil Armstrong land on the moon 35 years ago. Since that time, NASA has mainly gone around in circles, sending people into space doing experiements that have possibly dubious scientific value.

NASA is nothing more that a creature of the great 20th century military industrial complex born during World War Two and which continued to exist in greater or lesser degrees ever since. When the Soviets put Sputnik into space in 1957, the nationalism gauntlet had been thrown down. The federal government, still commandeering 20 percent of the economy as it had during WWII, decided to fund the newly created agency generously. These days, NASA now gets somewhere around $10 - $15 billion per year, while during the heady early days of the 1960's, NASA was getting what would now be somewhere around $40 - $50 billion.

As a side note, when I went back to school during the late 1990's, the Chronicle ran a survey about NASA. The survey's responses were that the average American thinks that we spend 15 percent of the federal budget on NASA. The real figure is a bit less than 1 percent. If you visit NASA, they remind you of this.

With this kind of money and national pride on the line, it's rather obvious that some serious political wars erupted as to WHERE the new agency was going to stage its operations. It bears pointing out that NASA's main operations are located in California, Orlando Florida, and Houston Texas. Count up those electoral votes folks! There is also a reason why NASA's Houston station is named the Lyndon B. Johnson Space Center.

If you haven't noticed by now, I'm a rather fierce critic of government everywhere. In the case of NASA, what good could I say, if anything, of NASA? Hands down, the best thing NASA has done since the moon landings has to be sending up the $1 billion Hubble Space Telescope (whose mirrors were initially not ground and polished correctly, leaving the telescope near sighted). If the whole purpose of astronomy and exploring space is to increase our knowledge of the universe, without a doubt the Hubble has accomplished a lot. I would also say that various planetary probes to explore the solar system and beyond (Voyager's I and II) run a distant second.

The whole Space Shuttle program, sold to Richard Nixon as a kind of space aircraft that would make space travel as common as air travel today, eventually turned into a maintenance eating, explosion prone disaster. Two shuttles have been destroyed in fright, I mean flight. Big government at its finest.

But the question begs to be asked - what about the idea of private efforts to explore space? Why is it that my tax dollars have to be commandeered to fund all of this? The original rationale for NASA, born out of the space race with the now defunct Soviet Union, is now gone. This is a particularly pertinent question now that George W. Bush wants to send people to Mars and that NASA has some rover rolling over, like, well a dog named Rover. What's the point?

Man has looked at the heavens since our beginnings, long before there were massive governments. The Wright Brothers flew into the sky with private money. So what's the deal against using private efforts to commercialize space? It says quite a bit about the agency that NASA does not carry commercial satellites into space. Launching commerical satellites is a HUGE industry! Think about how many electronic gadets are dependent on these satellites. It also says quite a bit that the industry has developed without NASA.

Now there is news that a private company called Transorbital (www.transorbital.net) is launching a satellite to the moon. Read their website for more news, but suffice it to say that they will be offering, among many other items, streaming videos of the whole flight. Strangely, their website says that they had to be authorized by the State Department and the NOAA for this activity. Why the State Department and the NOAA?

Another sore point about NASA is how they dealt with space tourists Mark Shuttleworth (an appropriate name if there ever was one!) and Dennis Tito. NASA was willing to sent public school teachers into space, but not paying customers. Typical agency behavior - "Look At Us!" All agencies have to resort to stunts like this for publicity in order to justify their existence.

To reiterate, man will always look at the heavens. Looking into my crystal ball, I see that the most exciting and relevant things that will happen in space in the future will come from private efforts to explore it. The technology to bring space exploration within reach of private efforts is becoming cheaper and better all the time and people are responding appropriately.

NASA on the other hand, has turned into just another 20th century state funded dinosaur whose priorities have to do with things like pointless space stations that will be open only to NASA personnel and those deemed to be useful to NASA. The gut feeling I have is that as the future unfolds, NASA won't have a whole lot to do with it.


Posted by The Mighty Wizard at 02:12 PM
This entry was posted in the following categories: America

January 28, 2004

Of John Kerry / Irresponsibility in Politics

Yesterday morning, I issued my January Oracles. It appears that my oracle concerning John Kerry becoming the Democratic nominee for the U.S. Presidency may well come true after his victory in New Hampshire last night.

I am a Libertarian and won't vote Democrat, so why should I be thinking about the Democrats? The reason is that I have to admit that I like John Kerry personally. My own opinion from reading news articles about him are that he is consumed by political ambition, but I see nothing wrong with that. The big reason that I like him is that, unlike most other political figures in high office, Kerry did his two cents worth to serve King and Country in Vietnam.

If I had it my way, every politician with ambitions to run for a seat in Congress (or the Presidency) would be required to have fought in war. Moreover, if a candidate were to win a seat (or the Presidency), then all of the candidates' children that are between the ages of 17 - 35 would be immediately required to stop what they are doing and start serving in military FRONT LINE COMBAT roles upon the candidate assuming office.

But wait, you say! That would mean that most people would be scared to run for political office! Well maybe, just maybe, that's the point. Politicians would have some real personal incentive to think over getting this country into all of these wars, police actions, nation building exercises, etc, that have been proliferating since the end of the Cold War.

More broadly, having been an activist in the late 1980's (when I was in my early 20's) over the looming storm about entitlements and more recently as a local activist, I've discovered that perhaps the thing that angers me most about politics is that the entire process reeks of irresponsibility. Everyone - and that includes voters, politicians, appointed figures, bureaucrats and agency workers all have few incentives towards any real accountability.

How can I say this? Well, consider this:

Voters: In America, there is a secret ballot. In many states, there are registrations for parties, but that doesn't mean that you are required to reveal who you vote for in general elections. If you win and succeed in getting some of the spoils shoved your way, then unless there is a paper trail of some kind such as when you contribute money, how will the losers know how to get back at you? Politics is a process that creates winners and losers, and when you are a loser there is not too much that you can do about it.

Moreover, the vast majority of voters have little or no incentive to become highly educated about political issues. Put another way, what is the point of spending 3 - 4 hours per day reading a vast swath of information about politics when for most people, there is practically no hope of any real payoff? The only people who have any financial incentive to become educated about political issues are: Politicians, lobbyists, lawyers, some journalists, university social science professors (economists, political scientists, sociologists, etc), CEO's and powerful financiers, high level bureaucrats (including military officers), idealistic activists, and some professionals. This cabal probably comprises less than 3 percent of the adult population in any modern democracy.

So it goes that not only do the winners win and the losers lose, it often so goes that some really big swindles can get pulled on a largely ignornant public and little or nothing will be done about them. Think Social Security for example. If you are born after 1945, then you are automatically a loser on Social Security. The younger you are, the bigger of a loser you are.

Politicians and their appointees: Many defenders of politics would say that pols are indeed accountable because they may be thrown out of office. But is that REALLY accountability?! Outside of having their egos deflated over the fact that they lost an election, what is the real personal loss to the politician personally? They will probably make better money working for one of their supporters, through contacts, at a lobbying job, writing books, or working in the apparatus of one of the political parties. Politicans who lose elections don't lose much. Someone will make sure that they are taken care of.

And run that by me again how it is that accountability is supposed to creep in by the fact that every 2 - 6 years, we are allowed to choose who will be the next guy who lords over us?

Bureaucrats and agency workers: This goes without saying. If you are famous (or rich), then you can deal with such people by going over their heads. The average Joe is helpless against these people. After all, if they fuck you over, then just remember that they're just doing their job.

But here's the kicker when it comes to agencies. Say for just a moment that you screw up on the job - say if you're NASA and a space shuttle blows up, or if you are the CIA and can't predict when the next terrorist attack hits. So what happens? You can go to the powers that be and get more money! After all, everyone knows that if we couldn't get the job done with the billions that we have, that means we need more in order to do things properly!

In the wake of the Enron collapse, Congress passed legislation compelling corporate CEO's to "tell the truth" regarding financial statements or potentially face fines and jail time. But does that legislative idea extend to politics? I'm afraid not.

One idea would be that winners in the political process would be required to indemnify losers when legislation is passed in their favor. Another idea that would be nice is to require that everyone who really believes in "the great idea" would be required to use it, or to show that they have a VISIBLY PERSONAL STAKE in their agendas outside of merely advancing their political careers. After all that's what happens, voluntarily, in the private sector.

For example, if you have a Mayor who think that rail is the way out of your city's congestion problems, then maybe it should be mandatory that such a Mayor and all of his / her political allies and supporters use the rail line everyday of their lives to get around town. If you are a big believer in public schools, then it should be mandatory that you send your kids to an average public school. In the last example, it is telling that a large minority of public school teachers and wealthy Democrats send their kids to private schools.

Now these are some ideas would cool the passions of many from going into politics to visit "public service" on the rest of us, or from looking to government for "answers."

Posted by The Mighty Wizard at 06:54 PM
This entry was posted in the following categories: America

January 27, 2004

Oracles for January 2004

I have made my January visit to The Palantir to receive enlightenment about future events. This month I will issue two Oracles:

1. The New England Patriots will win the 2004 Super Bowl.

2. John Kerry will be the Democratic Nominee for the Presidency of the United States in 2004.

Issued January 27, 2004.

Posted by The Mighty Wizard at 07:28 AM
This entry was posted in the following categories: America