Quotulatiousness

March 6, 2011

The economics of urinal cakes

Filed under: Economics, Humour — Tags: , , — Nicholas @ 11:34

Tim Harford uses Bastiat’s “broken window fallacy” to explain the economics of urinal cakes:

Dear Massimo,
When I read the first sentence of your letter, I was wondering where you were going with this. Not to worry: your question is easily answered. The 19th century French economist and essayist Frédéric Bastiat anticipated it with his famous “broken window fallacy”. A broken window seems good for the economy because it creates work for the glazier. But Bastiat pointed out that the money that the window-owner pays to the glazier is money he can’t spent on something else. The glazier is richer, but the tailor or the restaurateur or the escort girl is poorer. The broken window hasn’t stimulated the economy at all.
In short, don’t think you’re doing anyone a favour by aiming squarely at the urinal cake in front of you. And don’t even think about aiming at the urinal cake in front of someone else.

March 4, 2011

A model of how government pension schemes work

Filed under: Economics, Government, USA — Tags: , , , — Nicholas @ 12:04

It’s all so immense that it’s hard to understand, so Karl Denninger reduces it to an easy-to-comprehend model:

Let’s start with the model but take it into the real world. We’ll use you and I.

You set up a business. I’m a “trustworthy guy.” You have employee who you wish to provide a pension.

So every week when you pay them, you take out $100 from their paycheck. You have 10 employees (including yourself) and you come to me with your $1,000 every week and give it to me. I take it.

But instead of sticking it in an account somewhere with your name on it (as a trustee would) I instead give you a piece of paper. It says I owe you $1,000. But it’s not a debt security. You cannot negotiate it like a check, nor can you sell it to anyone else — it’s only valid if you bring it back to me. It says so right on the face. I promise that if you bring it back I’ll give you the $1,000.

Here’s the problem — as soon as you leave I call up my 10 stripper friends and the local liquor store and throw a party. Guess what I use for the money? Your $1,000.

Now here’s the rub — I don’t have any other money. At all.

In fact, I’m in hock up to my neck. I earn $100,000 a year but I spend $170,000. And how do I do this? Well, among other things I have people like you giving me money to “save.” I also have a bunch of credit cards, and everyone thinks I’m a great guy — kind of like an uncle (just call me “Sam”) and so they keep raising my credit limit.

It’s a wonderful life, isn’t it?

Well, maybe for a while.

But there is a problem with this model. First, this isn’t a “Trust.” A Trust can hold funds for someone, and can even invest them in something, but the funds cannot be converted to the trustee’s use. They must be held segregated and not inure to the benefit of the trustee. Further, the trustee must act solely in the best interest of the beneficiaries of the trust, not their own interest. That’s black-letter law.

Then there’s the second problem — I didn’t invest the money. I blew it, and all of the rest of my money.

One day you come and ask me to redeem one of your $1,000 IOUs. I don’t have any money, but I have a cash advance available on the credit card — or at least I think I do. So I go to the local bank and pull a $1,000 cash advance, giving you ten crisp $100 bills.

Notice what just happened: As soon as you showed up, your IOU, which in fact had no legal status as debt, had to be turned into actual debt at that point in time. Now there really is $1,000 in debt out there — it’s on the credit card.

This is exactly what happened with Social Security and Medicare since Reagan’s “reform” of the systems in the 1980s. Every single Administration since has taken all the money and immediately blown it. There is no money.

Israel’s largest defence company moving toward privatization

Filed under: Economics, Middle East, Military — Tags: , , , , , — Nicholas @ 07:43

Israel Aerospace Industries (IAI) is a state-owned company with a great reputation for quality and innovation. The Economist looks at their moves toward going into private control:

When Mr Shamir, an important figure in Israel’s booming high-technology business, took on the job of sorting out his country’s biggest industrial company in 2005, state-owned IAI was in a wretched condition.

For one thing, it had never quite got over the blow to its self-confidence when the Lavi, an advanced dual-role combat aircraft, was cancelled by the government headed by Mr Shamir senior in 1987. Although the Lavi was on course to meet all its performance targets, the cost of the project and American concern that it was helping to finance a rival to its F-16 and F-18 fighters killed it. For IAI, it meant that it would never again try to make a fast jet on its own.

For another, despite recovering much of its technological élan, IAI was an organisational and financial mess. Executives say it had gone three years without a formal chairman and two years without a signed financial statement. Banks had seized some of its financial assets and its chief executive of 20 years, Moshe Keret, was facing bribery allegations (he denied these and the case was dropped for lack of evidence). The firm was also in the grip of the Histadrut union federation, which fought all attempts to slim a bloated workforce and introduce merit-based remuneration.

March 3, 2011

“Where have the good men gone?” and the women who chase after jerks

Filed under: Economics, Education, Health — Tags: , , , — Nicholas @ 07:53

As I predicted a few weeks back, this topic appears to be a growing concern (at least in certain key urban media markets): “why are men so juvenile and why won’t they settle down?”

First up is Mark Regnerus:

We keep hearing that young men are failing to adapt to contemporary life. Their financial prospects are impaired — earnings for 25- to 34-year-old men have fallen by 20 percent since 1971. Their college enrollment numbers trail women’s: Only 43 percent of American undergraduates today are men. Last year, women made up the majority of the work force for the first time. And yet there is one area in which men are very much in charge: premarital heterosexual relationships.

First, it’s not at all a bad thing that women are catching up and in some cases surpassing their male classmates. Along with the good, however, are some wrenching changes to the society in which this change is taking place — especially to sexual relationships:

When attractive women will still bed you, life for young men, even those who are floundering, just isn’t so bad. This isn’t to say that all men direct the course of their relationships. Plenty don’t. But what many young men wish for — access to sex without too many complications or commitments — carries the day. If women were more fully in charge of how their relationships transpired, we’d be seeing, on average, more impressive wooing efforts, longer relationships, fewer premarital sexual partners, shorter cohabitations, and more marrying going on. Instead, according to the National Longitudinal Study of Adolescent Health (which collects data well into adulthood), none of these things is occurring. Not one. The terms of contemporary sexual relationships favor men and what they want in relationships, not just despite the fact that what they have to offer has diminished, but in part because of it. And it’s all thanks to supply and demand.

It’s not just raw numbers: the sexual balance hasn’t been significantly changed just because of the shift in the proportion of men and women going on to higher education. What has been impacted is something that doesn’t yield readily to slogans or seminars: women have strong preferences for men of higher status than themselves. This isn’t a social preference that can be talked around: it has much more to do with biology.

Women prefer to “date up” or “marry up”, and the pool of males that fit that criteria is getting smaller (fewer men are going on to university). This forces women to compete for the limited number of alpha males: instead of being pursued by eager men, (some) men are now being pursued by many women. Resulting, at least for that group of men, in copious supplies of women willing to exchange sex for attention.

Kay S. Hymowitz sees the extended adolescence for men as a new stage of life, pre-adulthood:

So where did these pre-adults come from? You might assume that their appearance is a result of spoiled 24-year-olds trying to prolong the campus drinking and hook-up scene while exploiting the largesse of mom and dad. But the causes run deeper than that. Beginning in the 1980s, the economic advantage of higher education — the “college premium” — began to increase dramatically. Between 1960 and 2000, the percentage of younger adults enrolled in college or graduate school more than doubled. In the “knowledge economy,” good jobs go to those with degrees. And degrees take years.

[. . .]

In his disregard for domestic life, the playboy was prologue for today’s pre-adult male. Unlike the playboy with his jazz and art-filled pad, however, our boy rebel is a creature of the animal house. In the 1990s, Maxim, the rude, lewd and hugely popular “lad” magazine arrived from England. Its philosophy and tone were so juvenile, so entirely undomesticated, that it made Playboy look like Camus.

At the same time, young men were tuning in to cable channels like Comedy Central, the Cartoon Network and Spike, whose shows reflected the adolescent male preferences of its targeted male audiences. They watched movies with overgrown boy actors like Steve Carell, Luke and Owen Wilson, Jim Carrey, Adam Sandler, Will Farrell and Seth Rogen, cheering their awesome car crashes, fart jokes, breast and crotch shots, beer pong competitions and other frat-boy pranks. Americans had always struck foreigners as youthful, even childlike, in their energy and optimism. But this was too much.

Given all of that, is it any surprise that fewer men are willing to exchange their pre-adult lifestyle with all its juvenile attraction combined with the adult trappings (cars, booze, drugs, etc.) for the “real” adult lifestyle?

Single men have never been civilization’s most responsible actors; they continue to be more troubled and less successful than men who deliberately choose to become husbands and fathers. So we can be disgusted if some of them continue to live in rooms decorated with “Star Wars” posters and crushed beer cans and to treat women like disposable estrogen toys, but we shouldn’t be surprised.

Relatively affluent, free of family responsibilities, and entertained by an array of media devoted to his every pleasure, the single young man can live in pig heaven — and often does. Women put up with him for a while, but then in fear and disgust either give up on any idea of a husband and kids or just go to a sperm bank and get the DNA without the troublesome man. But these rational choices on the part of women only serve to legitimize men’s attachment to the sand box. Why should they grow up? No one needs them anyway. There’s nothing they have to do.

Over at Ace of Spades HQ, the Regnerus article got Ace thinking:

A related thought I’ve had concerns feminists’ religious doctrine that social restraints on sexual behavior is all caused by grubby, oppressive, vagina-shackling men. This doesn’t make sense at all, and never has made sense, and is an unchallenged meme in the Grrls Rule, Boys Drool leftist feminist culture not because it makes a lick of sense but only because it hangs all the evils of the world on the Designated Sexual Villains in the feminist morality play. Men, of course.

If one accepts the hard-to-dispute premise that, between the sexes, women prefer a higher-sexual-cost regime in which men are supposed to “work for it,” as it were, and men prefer a lower-sexual-cost regime in which their sexual needs can be gratified with almost no work whatsoever (compare and contrast female wish-fulfillment romcoms with male wish-fulfillment pornos, or even James Bond movies, actually), then of course it makes sense that women, rather than men, have a sound motive for increasing the sexual penalties for promiscuous sex whereas men have stronger motive for decreasing them.

[. . .]

Leftist feminists of the younger, sillier generation similarly attempt to claim that it is evil, controlling men who use the word whore to not merely brand actual prostitutes but to control the sexual expressions of everyday women. That is, they assert (and these extremely silly third-generation feminists seem to write about little else but this) feel that social disapproval of female promiscuity is almost entirely a male invention, because men, you see, want to keep women from having sex with other men, so we invent the usage of the word “whore” to describe a sexually-liberated woman and by infecting the culture with this disease of whore-branding, make sexually-promiscuous women feel badly about their sexual choices and force them to conform to a male, Christian-fundamentalist (of course) regime of female chastity.

To the extent that women participate in this oppressive regime of whore-deeming, it’s only because a false conscience has been imposed upon them by male-dominated media. Women call other women “whores” not because women wish to wound other women (their sexual competition) but because men have hypnotized them to think this way.

To control their scary vaginas.

It nicely illustrates the confusion brought on by the social and sexual mores in flux:

As has been noted many, many times (not that lefty feminists ever notice), we did in fact have a Sexual Revolution, and men won. And the strangest thing about this is that lefty feminists, while claiming (and falsely believing) themselves to be liberating women, have in fact been eagerly liberating men, liberating men from the need of offering any kind of satisfactory trade-in-kind to women for sexual favors.

In their strange inversion of reality, it’s men who have the means, motive, and opportunity to increase the costs of obtaining sex and it’s women, on the other hand, who have the strong interest in a promiscuity and commitment-free (or even dinner-date free) sex.

And men, who, in this role-reversed alternate reality feminists have concocted, desperately want women to keep their vaginas chaste, can only be “beaten” by giving it all away for free.

And of course keeping abortion not only legal but socially praiseworthy because, again in this comic-book “What If?” issue of reality feminists have concocted, men only want to have sex to produce children and women, of course, are far less game for procreation, viewing sex as primarily a vehicle for erotic gratification. But that’s a dementia for another day.

Also interested enough to comment on the article was Monty:

. . . this cultural trend has left many men unsure about their place in the new order of things. The traditional role as primary breadwinner and head of the household has been removed, but nothing has come along to replace it. The predominantly-liberal media and entertainment complexes have spent decades denigrating men as hapless buffoons or abusive troglodytes. Modern Hollywood heart-throbs are not square-jawed heroes in the Gary Cooper mode, but rather thin, indolent, androgynous, and (most importantly) non-threatening. And while some women often wonder out loud “Where are all the decent men?”, there’s plenty of evidence at hand that given a choice, they’re still more attracted to the moneyed jerks of the world.

Monty also points out that there’s not just a strong set of hedonistic reasons pushing young men to stay in that “pre-adult” stage of life:

The big problem with modern heterosexual relationships is that apart from the sex, there’s really not much in it for men any more. Men have few legal rights over their own progeny; family law for decades has whittled away a man’s parental rights to little more than a financial obligation. If the woman already has children from a previous marriage, the man incurs an enormous burden in return for very little gain: in most cases he has no parental rights over the children, he competes for his wife’s time with the ex (and the ex’s family), and he incurs huge financial burdens but gains very little actual power in the household. A man’s sexual life is viewed with suspicion and sometimes disgust by women, who seem to want to train a man’s sex drive in the same way they train a naughty dog. A man alone with a small child is a man always on the verge of being accused as a child molester or abuser — society has made single men afraid to even approach children who are not their own (and sometimes even when the children are their own).

In short, men have been systematically demoted from their traditional place in society. This is good because it has given many women far richer and more interesting lives; but very bad because it has given men nothing in recompense. Women retained many of their old power-centers (child-rearing, home-making, etc.) but gained a lot of new power as well. For men, most of the change has been on the negative side of the ledger. From the male viewpoint, the only positive aspect of the change is that it’s much easier to have uncommitted sex, and even here the long-term harm far outweighs any short-term gains.

Men play video games, and watch sports, and hang out with their friends, because they enjoy it. It’s no more an “adolescent” activity for men than, say, shopping with their girlfriends is for women. Men do have complicated inner lives. They have hopes and dreams of their own that are not necessarily connected to the women they may be seeing. Men desire comfort and happiness in their lives no less than women do, but they seek it in different ways. Marriage — even a long-term relationship — has to benefit both partners, and in recent decades many men have simply found it to be not worthwhile.

Jon, who brought the original link to my attention, had this to say about the phenomenon:

How pervasive is this issue? I think the feminization of males is mostly a “big urban” thing, rather than universal. The closer you are to a dense urban centre, the more hipsters and girly males you seem to get. There seems to be an inverse square law happing here — the further away you get from the dense urban core, the fewer pansies you seem to find. Media and academics would have us believe that the fem-men in rural areas are simply closeted and are hiding their softer sides out of fear, but of course they would say that: they cannot conceive of the possibility that anyone outside of their own social environment might actually be different.

March 2, 2011

Why “Buy American” or “Buy Canadian” campaigns are bad economics

Filed under: Economics, History, Liberty, USA — Tags: , , , , , — Nicholas @ 12:26

Daniel Ikenson takes ABC to task for their misleading propaganda against international trade:

Back in the “golden age” of 1960, when imports were oddities to marvel over in a disdainful way, the per-capita U.S. income was $2,914. In 2009, with imports ubiquitous, per-capita income was $46,411. (Economic Report of the President, 2010, Tables B-1 and B-34). In real, inflation-adjusted terms, even with a U.S. population increase from 181 million to 307 million, per-capita incomes in 2009 were almost triple what they were in 1960 ($42,277 vs. $15,669 in 2005 dollars — ERP, 2010, Tables B-2 and B-34). Oh, if only we could replicate the relative poverty, the limited consumer choices, the inefficient production processes, the massive trade barriers that compelled Americans to buy American, and the uneconomic work rules and wages commanded by once-powerful private sector labor unions. In 1960, before real economic liberalization spawned cultural and social liberalization, Diane Sawyer would never have dreamed of being a network news anchor, if she even dared to entertain the concept of working outside of the home. How can she pine for such an era?

It’s frustrating that so much research refuting the myth of manufacturing decline and supporting the conclusion that U.S. manufacturing is thriving — and is in fact leading the world in terms of value of output — is simply neglected by a media that is more committed to scaring than informing. Today Americans are less likely to find in their homes products manufactured in the United States because U.S. manufacturers have moved on to producing higher value products. American manufacturing isn’t focused on products that consumers find in retail stores, like furniture, hand tools, sporting goods, flatware, draperies, carpeting and clothes. American factories produce more value than any other country’s factories by focusing on producing the highest value products: pharmaceuticals, chemicals, airplanes, sophisticated componentry, technical textiles, and other items often sold directly to other businesses.

I and others have been making these points for several years, as U.S. manufacturing continues to thrive in every metric . . . except employment. Manufacturing employment peaked in 1979 and has been on a downward trajectory ever since. But that is the point that eludes ABC and everyone else who thinks U.S. manufacturing’s best days are in the past. Making more with less is the goal! That’s how an economy grows! The political imperative of “putting people back to work” regardless of the economic value of that work — remember the so-called stimulus? — spits in the face of economics. The fact that Americans are unemployed speaks to a mismatch of skills demanded and skills available, as well as to a business and regulatory environment that dissuades investment and hiring.

March 1, 2011

American high speed rail plans an expensive mirage

Filed under: Economics, Government, Technology, USA — Tags: , , , — Nicholas @ 12:35

Philip Klein looks at the faulty notions behind the Obama administration’s push for high speed railways:

To most Americans, the passing reference to California was likely an afterthought, lost amid all the dreamy rhetoric of rebuilding the nation. But upon closer inspection, the state’s proposed high-speed rail system serves as a perfect example of the gap between the promise of transformational liberalism and the reality of big government. Taxpayers everywhere should pay attention, because the project has already been granted $3.2 billion in federal funds, mostly through Obama’s economic stimulus package — and its backers hope to gobble up billions more over the next decade.

The $43 billion transportation project to link Los Angeles to San Francisco with a bullet train by 2020 would be considered grandiose during the plushest of times, yet it’s being pursued during an era when governments at all levels are mired in deep fiscal crises. The plan has been subject to a series of scathing reports by independent analysts, raising concerns about everything from its cost estimates to its business model. The University of California at Berkeley has questioned its lofty ridership projections. And even the Washington Post has editorialized against it.

It’s a huge wodge of cash from a government that’s already struggling with record deficits, handed to state governments who are in many cases even worse off financially, yet must match the federal funds or lose the subsidy.

Calling it a “system” is misleading, as none of the currently imagined lines would inter-connect. Nobody seems to be worried that there will not be enough passenger traffic to justify the enormous acquisition, construction, and operational costs for these train services.

“The cost projections are overly optimistic,” Wendell Cox, a public policy consultant and co-author of a critical report for the libertarian Reason Foundation, says. “The ridership projections are absolutely crazy. The thing will have no impact on highway traffic and will have little or no impact on the amount of planes in the air. This project really defines the term ‘boondoggle.'”

[. . .]

BRINGING HIGH-SPEED RAIL to America has been a decades-long dream for liberals, who have long envied Europe’s extensive rail system. Building a high-speed rail network, they hope, would move the nation away from automobiles and reduce pollution. It has the added bonus of being a massive, centrally planned public works project. The problem is just because rail has worked elsewhere, that doesn’t mean it makes sense here.

“We’re not like Spain or France, where the population densities are a lot higher, and the cities are not as spread out,” Ken Orski, a former transportation official in the Nixon and Ford administrations and publisher of the newsletter Innovation Briefs, says. “So you can connect cities like Barcelona and Madrid or Paris and Marseilles easily.”

The best place to build a high speed rail system for the US would be the Boston-New York-Washington corridor (aka “Bosnywash”, for the assumed urban agglomeration that would occur as the cities reach toward one another). It has the necessary population density to potentially turn an HSR system into a practical, possibly even profitable, part of the transportation solution. The problem is that without an enormous eminent domain land-grab to cheat every land-owner of the fair value of their property, it just can’t be done. Buying enough contiguous sections of land to connect these cities would be so expensive that scrapping and replacing the entire navy every year would be a bargain in comparison.

The American railway system is built around freight: passenger traffic is a tiny sliver of the whole picture. Ordinary passenger trains cause traffic and scheduling difficulties because they travel at higher speeds, but require more frequent stops than freight trains, and their schedules have to be adjusted to passenger needs (passenger traffic peaks early to mid-morning and early to mid-evening). The frequency of passenger trains can “crowd out” the freight traffic the railway actually earns money on.

Most railway companies prefer to avoid having the complications of carrying passengers at all — that’s why Amtrak (and VIA Rail in Canada) was set up in the first place, to take the burden of money-losing passenger services off the shoulders of deeply indebted railways. Even after the new entity lopped off huge numbers of passenger trains from its schedule, it couldn’t turn a profit on the scaled-down services it was offering.

Ordinary passenger trains can, at a stretch, share rail with freight traffic, but high speed trains cannot. At higher speeds, the actual construction of the track has to change to deal with the physical problem of safely guiding the fast passenger trains along the rail. Signalling must also change to suit the far-higher speeds — and the matching far-longer safe braking distances. High speed rail lines cannot be interrupted with grade crossings, for the safety of passengers and bystanders, so additional bridges and tunnels must be built to avoid bringing road vehicles and pedestrians too close to the trains.

In other words, a high speed railway line is far from being just a faster version of what we already have: it would have to be built separately, to much higher standards of construction.

Getting back to the California HSR line; it goes from A to B on this map:

Okay, you think, at least Fresno will get some snazzy slick rail service . . . except this section will be built but not operated until further connecting sections are built . . . at a later date. Maybe. It will be the track, including elevated sections through Fresno, and the physical right-of-way, but no electrical system to power the trains; but that’s fine, because the budget doesn’t include any actual trains.

Of course, this is an old hobby horse of mine and I’ve posted about High Speed Railways a few times before.

The shifting tide of extreme wealth

Filed under: Economics, Europe, France, Politics — Tags: , , , — Nicholas @ 07:07

Ever wonder how the children of wealthy foreign potentates fit in with “ordinary” wealthy westerners? Anne Applebaum says the relationship has shifted from bare toleration all the way out to sycophancy, but its most noticeable change is the way they can buy influence and apologists:

Money, even foreign money (and particularly that Saudi money), has always been able to buy access to Western statesmen. But in the last decade or so, the proportions have subtly shifted. The democratic West has become relatively poorer, while a clutch of undemocratic “emerging” markets have become richer. To put it more bluntly, Western politicians, ex-politicians, and even aristocrats have become much, much poorer than the very, very rich businessmen emerging from the oil-and-gas states of Central Asia, Eastern Europe, and the Middle East. Twenty years ago, no retired British or German statesman would have looked outside his country for employment. Nowadays, Blair advises the governments of Kuwait and the United Arab Emirates, among others; Gerhard Schröder, the former German chancellor, collects a paycheck from Gazprom, the Russian energy behemoth.

True, there is a legitimate argument for maintaining contacts with dictators: Blair helped persuade Col. Qaddafi to give up his nuclear weapons program in 2003, and in the last 10 days he has twice called the dictator and asked him to stop shooting his people. It hasn’t helped, of course, but it can’t hurt to try.

But there is no justification for taking dictators’ money or befriending their offspring, especially not while simultaneously playing politics with their parents. This is not just a British problem, either. Frank Wisner, the U.S. envoy sent by President Barack Obama to negotiate with Hosni Mubarak in the early days of the Egyptian revolution, also works for Patton Boggs, a law firm that has worked for the Egyptian government. The administration was reportedly angry when he unexpectedly opined that Mubarak “must stay” just a few days before Mubarak fled Cairo. But should anyone have been surprised? Meanwhile, Michelle Alliot-Marie, the French foreign minister, has just lost her job because she went on holiday in Tunisia during the revolution, hitched a few rides on a private plane belonging to a friend of the Tunisian president, and helped her father do a business deal there. When she got back, she tactfully suggested that the French help their friends in the Tunisian police put down the riots.

February 28, 2011

London’s “congestion charge” didn’t keep pace with traffic after all

Filed under: Britain, Bureaucracy, Economics, Technology — Tags: , — Nicholas @ 08:51

Remember the great fanfare (usually from “urban advocates” and local government bureaucrats) over the stunning success of London’s road pricing scheme? It immediately reduced traffic volumes in the downtown core of London, which also reduced the travel times for those drivers who were willing to pay the usage charges. It looked like a solid win for pay-for-use roads (which do, incidentally, make a great deal of economic sense . . . if they’re not being used as a cash cow to fund other transportation options instead).

Fast forward to today, and we discover that all the gains from introducing the congestion charge have been wasted:

According to Yass’ analysis, based on figures obtained from the Department of Transport and local bodies such as councils and Transport for London, the increase in traffic lights — and perhaps even more so, the increasing trend to prioritise pedestrian movement through junctions by changing lights’ programming — is seriously increasing congestion for wheeled road traffic (buses excepted in some cases, as they too are favoured by the lights).

The report indicates that a large fall in congestion was seen in London following introduction of the capital’s congestion charging scheme introduced by the previous mayor Ken Livingstone. A noticeable proportion of motorists ceased to drive in the charging zone, and vehicle numbers in the zone remain well down on previous levels. Nonetheless, congestion is now back up to its old state:

Monitoring reports of the congestion charging zone show that, after an initial improvement, congestion has been increasing again and is back to pre-charge levels, even though the number of vehicles entering the zone has not increased.

How could this have happened?

According to Yass, the gains achieved by the congestion charge have been wiped out by Mayor Ken’s parallel policy drive to cut down the time it takes to cross the road in London, and in particular to make the streets safer for the disabled. A large number of London’s new traffic lights would seem to have been put in at new pedestrian crossings — “most junctions were already controlled by lights”, writes Yass — and those at junctions now usually have “full pedestrian stages” where all traffic is held stopped in both directions.

February 27, 2011

Reason.TV: State budget battle showdowns

Filed under: Economics, Government, USA — Tags: , , — Nicholas @ 11:10

Sunday book post

Filed under: Books, Economics, History, Media, Military, Wine — Tags: , , , , , — Nicholas @ 10:09

No, not my books: I’ve written lots, but they’re all technical manuals for software products the vast majority of you will never have heard of, and wouldn’t want to read about even if you had. I mean books I’ve read recently that I consider to be very good. I’ll categorize for convenience (both yours and mine):

Science Fiction and Fantasy

  • Darwin’s Watch: The Science of Discworld III, Terry Pratchett, Ian Stewart and Jack Cohen. An entertaining romp through (real) science placed within a fictional context. I read the first Science of Discworld book and quite enjoyed it, and this one is possibly even better. The Discworld, riding happily balanced on the backs of the four great elephants, who are in turn supported by the shell of the great turtle, has very different scientific principles than our own “exotic” roundworld. The most amusing part of the book is the wizards of the Unseen University attempting to ensure that Charles Darwin writes the “correct” book on roundworld. You’ll learn more science than you expect . . .
  • I Shall Wear Midnight, Terry Pratchett. The fourth of the Tiffany Aching sequence in the Discworld series. Although written for a younger audience, Pratchett’s sense of humour and brilliant presentation make this book eminently readable for all ages.
  • Cryoburn, Lois McMaster Bujold. The latest adventure of Miles Vorkosigan deals with the political and social implications of cryogenic preservation. No soaring battles in space, no stunner shootouts, no alien invasions. Sounds deadly dull, I realize, but I don’t think Lois could write a boring shopping list. It perhaps doesn’t stand alone quite as well as it might, but even if you haven’t read any of the other books in the series, I think you’ll find this worth reading.

History

  • The Canadian Army and the Normandy Campaign, John A. English. A book that undermines several widely held beliefs about the efficiency and capability of the Canadian First Army in 1944-45. Between incompetent, scheming generals and political interference, the Canadian Army was less than the sum of its parts, and the importance of training methods and doctrine are highlighted (that is, the faulty training methods in use probably added to the casualty lists in combat). Field Marshal Montgomery didn’t like or trust General Harry Crerar, but was forced to keep him in command due to Canadian government sensitivities. Montgomery’s view of Crerar almost certainly was reflected in the roles assigned to First Canadian Army after the Normandy landings.
  • The Grand Strategy of the Byzantine Empire, Edward N. Luttwak. A fascinating book about the differences between the Byzantine empire’s military and political goals and practices and those of the Roman empire from which it descended. Unlike Rome, the Byzantines were never the “superpower” of their part of the world, and their survival often depended on carefully constructed alliances, allies-of-convenience, and outright bribery of “enemies of their enemies”. Although not well remembered in the west, the survival of Byzantium almost certainly saved central Europe from conquest by the armies of the Caliph during the initial expansion of the Muslim empire. Byzantine armies rarely had much technological or doctrinal advantage over their opponents, so war had to be conducted with the key concept of retention of force: ambush, raid, counter-attack, feint, and misdirection became specialties because they offered (relative) effectiveness at lower risk of outright defeat.
  • In the Name of Rome: The Men Who Won the Roman Empire, Adrian Goldsworthy. A selection of mini-biographies of some of the greatest generals of the Roman empire. What is amazing, in reading about some of their careers, is how little actual military instruction Roman officers received, yet how effective the army could be in spite of that. Being an army officer was viewed as just part of the normal public service — in fact, it would have been problematic for a Roman patrician to remain with the army for an extended period of time, as it would slow down his progress through the civil government ranks.
  • The Defence of the Realm: The Authorized History of MI5, Christopher Andrew. If you wanted a thrilling account of the exciting and dangerous life of counter-espionage, you need to stick to works of fiction. The actual life of an MI5 officer is apparently much less James Bond and much more careful investigation, observation, and data correlation. Not that it isn’t an interesting career, but perhaps the “double oh” agents will get their own book (just kidding).

Economics

  • The Ascent of Money, Niall Ferguson. I enjoyed reading this one far more than I expected to: the author has a knack for carrying you through the less interesting bits without boring or lecturing you. The evolution of the modern monetary system, and the heroic roles played by unlikely characters in the process.
  • The Rational Optimist: How Prosperity Evolves, Matt Ridley. It’s easy to find depressing statistics and dreary anecdotes. Ridley’s view is that progress is a good thing, and that we’re enjoying a golden age even if we don’t realize it right now.

Biography

  • Robert A. Heinlein: In dialogue with his century Volume 1, William H. Patterson, Jr. I’ve been a huge fan of Heinlein’s works since I read Starship Troopers at about age 11. This biography more than met my expectations: I’d always regretted never having met Robert Heinlein, but between this book and Heinlein’s own autobiographical writings (Tramp Royale and Grumbles from the grave) I feel I’ve gotten as close to knowing him as possible — until the publication of Volume 2, anyway.
  • Thomas Paine’s Rights of Man, Christopher Hitchens. A lively appreciation of Thomas Paine’s most influential work, and much detail on his life. Paine was far from being the disreputable bomb-throwing anarchist his enemies painted him to be, but he also wasn’t the plaster saint his fans might imagine.

Wine

  • Billy’s Best Bottles: Wines for 2011, Billy Munnelly. Still the best annual wine guide for the everyday wine drinker in Ontario. If you like an occasional bottle of wine, but don’t want to study dozens of books in order to make a decision on what to buy, this is the book for you. He likes more “rustic” wines than I do, so I don’t find his recommendations in that category to be as useful, but he does a great job of sorting through the plethora of $10-20 wines available at the LCBO and tells you which ones are worth buying (and when to serve them).

February 26, 2011

The increasing length of freight trains in Canada

Filed under: Cancon, Economics, Government, Railways, Technology — Tags: , , — Nicholas @ 13:22

Some eye-opening statistics on the length of freight trains being run by Canadian National (CN) and Canadian Pacific (CP) these days:

Transport Canada launched a six-part study into the long-train strategies at the country’s largest railways this month with an eye on developing policies for how these longer, heavier trains are assembled and run. The goal of the two-year study is to develop science-based regulations that will hopefully reduce the number of derailments in the country.

Despite the concern from regulators, these longer, heavier trains in recent years have been a godsend for North American railways, which swear by their safety. Not only do they improve the efficiency of the rails by reducing the number of trains required to transport goods, but they in turn reduce the crews needed and the fuel used to move their shipments.

If properly built, they can also reduce wear and tear on the trains and the tracks themselves by cutting down on in-train forces, lowering maintenance costs substantially over time.

The cynic in my asks why, if CN (for example) actually managed to reduce the number of rail accidents to an all-time low last year, the regulators are now launching the investigation. Fewer accidents now equals a point of serious concern on the part of the regulators? Why?

Up until the 1990s, the average freight train in Canada was about 5,000 feet (1.54 kilometres) long and weighed 7,000 tons. But it is now not uncommon to see these trains stretch to 12,000 feet, sometimes as much as 14,000 feet (more than four kilometres), weighing up to 18,000 tons.

While CN is comfortable sticking with the size of its longest trains now, about 12,000 feet, CP continues to push the boundaries of how long it can build its trains by developing some of the industry’s most cutting-edge technology in recent years to help it do so.

The benefits are clear. CP estimates, for example, that the labour costs alone on a typical transcontinental train are now 30% lower than they would be if it was using smaller trains.

So, the trains are longer, carry far more freight, cost less to run, and customers are happy. The government must act!

February 25, 2011

“epistemicfail” calls on liberals to stop the evil Koch brothers

Filed under: Economics, Humour, Politics, USA — Tags: , , , , — Nicholas @ 09:21

“epistemicfail” is trying to rally liberal and progressive forces to recognize and combat the evil that is embodied in the Koch brothers:

The KOCH brothers must be stopped. They gave $40K to Scott Walker, the MAX allowed by state law. That’s small potatoes compared to the $100+ million they give to other organizations. These organizations will terrify you. If the anti-union thing weren’t enough, here are bigger and better reasons to stop the evil Kochs. They are trying to:

   1. decriminalize drugs,

   2. legalize gay marriage,

   3. repeal the Patriot Act,

   4. end the police state,

   5. cut defense spending.

Who hates the police? Only the criminals using drugs, amirite? We need the Patriot Act to allow government to go through our emails and tap our phones to catch people who smoke marijuana and put them in prison. Oh, it’s also good for terrorists.

Wikipedia shows Koch Family Foundations supporting causes like:

   1. CATO Institute

   2. Reason Foundation

   3. cancer research ($150 million to M.I.T. – STOP THEM! KEEP CANCER ALIVE!)

   4. ballet (because seriously: FUCK. THAT. SHIT.)

http://en.wikipedia.org/wiki/Koch_Family_Foundations

The Kochs basically give a TON of money (millions of dollars) to the CATO Institute. Scott Walker, $40K? HAH! These CATO people are the REAL problem. They want to end the War on Drugs. Insane, right? We know that the War on Drugs keeps us SAFE from Mexicans and keeps all that violence on their side of the fence. More than 30,000 Mexicans killed as of December! Thank God Mexican lives don’t count as human lives. Our government is doing a good, no, a great job protecting us and seriously, who cares about brown people or should I say non-people? HAHAHA! Public unions are good, government is good, and government protects us from drugs and brown people. The Kochs want to end all that. Look, as far back as 1989 CATO has been trying to decriminalize drugs. Don’t worry, nobody listens to them because they are INSANE.

Let’s hope they heed his call.

February 24, 2011

The core of the Irish financial crisis

Filed under: Economics, Europe, Government — Tags: , , , , — Nicholas @ 07:13

Theodore Dalrymple explains the underlying reason for Ireland’s financial woes:

If you want to study the economic crisis of the last few years, go to Ireland, where you will find it in its purest form. Ireland is a small country, with a population of just 4.4 million, and the connection between clientelistic politics, bankers’ cupidity, and the mass psychology of bubble markets is easiest to comprehend there.

Dotted around the country, outside of almost every town and sometimes in the middle of nowhere, are housing estates — completed, half-completed, and never-to-be-completed — which are unsaleable, will almost certainly never be inhabited, and are destined to fall into graceless ruins. Some 300,000 new dwellings now stand empty in the Irish Republic, a number whose equivalent in the United States would be approximately 21 million.

[. . .]

A house in Shrewsbury Road, Dublin, sold for $80 million in 2005 but, now standing empty, is on the way to dereliction, and no house on the road — a millionaires’ row — has sold for the last two years, despite a fall in prices of at least 66 percent. During the boom, taxi drivers and shop assistants would tell you about the third or fourth house they had bought — on borrowed money, of course — and of their apartments in Europe, from Malaga to Budapest to the Black Sea Coast of Bulgaria. It was not so much a boom as a gold rush, or a modern reenactment of the Tulipomania.

February 17, 2011

Victor Shih interview on China’s economy

Filed under: China, Economics, Military, Politics — Tags: , , , , — Nicholas @ 07:35

The Browser interviews Victor Shih:

What do people get most wrong when they think of the Chinese economy?

The biggest misperception about China is that it’s a dynamic market economy — it isn’t. It’s a fast-growing, state-dominated economy with some dynamic, private-market aspects. If you look at investment, a main driver of growth, much of it is going to state-owned enterprises (SOEs) or shareholding companies dominated by state entities. Or it’s going directly to government investments carried out at a central or local level. The misperception has abated recently following Richard McGregor’s book on the Chinese Communist Party. People are realising that the party is still behind much of what happens in China.

[. . .]

Your first choice is Yasheng Huang’s Capitalism with Chinese Characteristics. I believe this book successfully demolishes the idea that China is developing a new economic model called ‘market authoritarianism’.

I think Yasheng goes a little too far with some of his claims. But the broad outline is correct. There was a period of healthy organic growth in the 80s, driven by the de facto private sector. Many township and village enterprises were collectives or owned by the local government. But in reality they were private enterprises. This changed in the mid-90s, especially with the adoption of the ‘grasping the large and letting the small go’ policy that circumvented the special interests in the state sector. When Deng Xiaoping was alive, his executive vice premier, Zhu Rongji, wanted to bankrupt or merge many of the smaller state-owned enterprises into larger ones. It was a political tactic to further reform. And it worked.

The problem was that it created these giant, state-owned enterprises. Recent statistics reveal the state sector made a profit of 2 trillion renminbi last year, of which the 122 largest SOEs made 1.35 trillion. They have combined assets of over 10 trillion dollars and have become an enormously resourceful and powerful interest group. Their CEOs have numerous ties with top political leaders and sit on the party’s central committee. Most bank loans, issued bonds and stock-listing proceeds in the system go to these conglomerates. There’s still a private sector but it has been squeezed tremendously, especially in the last two years.

[. . .]

Most investment bankers like to talk things up, but that’s not something we can accuse Carl of doing.

By the late 90s, China’s banks were technically insolvent because the non-performing loans ratio was 40 to 50 per cent. Carl’s still a big fan of Zhu Rongji, the former prime minister. One of Zhu’s greatest achievements was to ‘solve’ the problems in the banking sector by setting up asset-management companies and recapitalising the banks. Today, of course, the banks are still lending very recklessly despite a lot of reform — the formation of credit and risk-management committees, for example. The banks continue to require bailouts and recapitalisation from the Chinese government, which props them up so that they can sell these bank shares to the public in Hong Kong or Shanghai. Carl sees this process as a kind of Ponzi scheme.

February 16, 2011

Damned good reasons for Canadians to fly from US airports instead of Canadian airports

Filed under: Cancon, Economics — Tags: — Nicholas @ 17:16

An article at the National Post talks about the rising number of Canadians who drive to US airports. After a recent experiment, I can understand why.

Last weekend, I had a notion to go to Boston for the coming long weekend. I checked the Porter Airlines website. Multiple flights from Toronto Island airport to Boston, great! So I started the booking process. Two people, flying from YTZ to BOS, return trip . . . how freaking much????

Because I wasn’t booking more than two weeks in advance, the flights were going to cost $800+. That’d be bad enough, but that’s per person. One way. But the return flight was cheaper: a doddle at “only” about $690. So about $3,000 not counting taxes, fees, and surcharges.

American Airlines, if I booked right now could get us to Boston from Buffalo for $246 each. Return flight at the same price, or cheaper ($181 each) if we used JetBlue.

So, for the added hassle of driving to Buffalo (and the border crossing, of course), I’d save nearly $2,000 on this little jaunt. If that’s at all representative, then it’s amazing that Canadian airlines are able to hang on to as much of the business as they currently do.

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