Quotulatiousness

December 24, 2013

Indian gold bugs go home

Filed under: Bureaucracy, Business, India, Middle East — Tags: , , , , — Nicholas @ 09:19

The Indian government has been attempting to restrict the domestic gold market, but there’s a big loophole in the rules that many travellers are taking advantage of while they can:

Faced with curbs on gold imports and crash in international prices leaving it cheaper in other countries, gold houses and smugglers are turning to NRIs to bring in the yellow metal legally after paying duty. Any NRI, who has stayed abroad for more than six months, is allowed to bring in 1kg gold.

It was evident last week when almost every passenger on a flight from Dubai to Calicut was found carrying 1kg of gold, totalling up to 80kg (worth about Rs 24 crore). At Chennai airport, 13 passengers brought the legally permitted quantity of gold in the past one week.

“It’s not illegal. But the 80kg gold that landed in Calicut surprised us. We soon got information that two smugglers in Dubai and their links in Calicut were behind this operation, offering free tickets to several passengers,” said an official. The passengers were mostly Indian labourers in Dubai, used as carriers by people who were otherwise looking at illegal means, he said. “We have started tracing the origin and route of gold after intelligence pointed to the role of smugglers,” he said.

Reports from Kerala said passengers from Dubai have brought more than 1,000kg of gold in the last three weeks. People who pay a duty of Rs 2.7 lakh per kg in Dubai still stand to gain at least Rs 75,000 per kg, owing to the price difference in the two countries. Gold dealers in Kerala say most of this gold goes to jewellery makers in Tamil Nadu and Andhra Pradesh.

December 21, 2013

Overzealous regulators create nationwide Sriracha shortage

Filed under: Bureaucracy, Business, Food, Government, Health, USA — Tags: , — Nicholas @ 11:56

Baylen Linnekin on the latest attempt to be safer-than-safe in food regulation:

Sriracha rooster sauceLast week California health regulators ordered the makers of Sriracha hot sauce to suspend operations for 30 days. The 30-day hold comes despite the fact the product has been on the market for more than three decades and that “no recall has been ordered and no pathogenic bacteria have been found[.]”

So what’s the issue?

The problem, reports the Pasadena Star News, is that Sriracha is a raw food.

“Because Sriracha is not cooked, only mashed and blended, Huy Fong needs to make sure its bottles won’t harbor dangerous bacteria,” writes the Star News.

Aren’t three decades of sales sufficient proof of that fact?

“The regulations outlining this process have been in existence for years,” writes California health department official Anita Gore, in a statement she sent to L.A. Weekly, “but the modified production requirements were established for the firm this year.”

In other words, the state changed the rules of the game.

December 3, 2013

Some owls are more (politically) valuable than others

Filed under: Bureaucracy, Environment, Government, USA — Tags: , , — Nicholas @ 10:26

In his weekly NFL column, Gregg Easterbrook discusses the once-hot owl preservation efforts which have recently turned into owl execution efforts:

Those who can remember the dim mists of history — say, a couple decades ago — recall that preservation of the northern spotted owl was a major American political issue during the 1980s, then played a role in the 1992 presidential election campaign, then was among the high-profile matters of the Bill Clinton administration. Decisions during the 1990s by the Fish and Wildlife Service, coupled to judge’s orders, effectively ended much of the logging in the Pacific Northwest. This pleased affluent landowners, cost jobs for average people and shifted timber production to Malaysia, where there are almost no environmental regulations.

There are three other birds quite similar to the northern spotted, whose numbers continue to decline. The California spotted owl has a stable population. The Mexican spotted owl probably is in decline: about five years ago, a federal judge placed land-use restrictions on areas of Arizona, Colorado and New Mexico to protect the Mexican spotted. The barred owl, the third bird similar to northern spotted, doesn’t need special protection as it is population is expanding, based on natural competition.

So the plan is to start shooting barred owls. Excuse me, “culling” them. The Fish and Wildlife Service wants to kill at least 3,000 barred owls, which are so similar to spotted owls that a trained eye is needed to distinguish the types. Spotted owls are federally protected, by the Endangered Species Act. Barred owls are not protected. So let’s kill the disfavored owls in order to help the politically correct owls!

As recently as two generations ago, barred owls mainly were found east of the Mississippi, where they are commonly called hoot owls, for their whoot-woo-who territorial marking sound. The recovery of forests across the United States — total forested acres have been increasing for a quarter century — created a migratory pathway for barred owls to spread west. This development was unexpected; the literature of owl protection depicts such birds as so habitat-dependent they are vulnerable to any change. It turns out the barred owl is not fragile, able to adapt to many habitats. Barred owls are also more aggressive than spotted owls; the worry among defenders of the latter is that barred owls will out-compete spotted owls and take their territory in the Pacific Northwest.

[…]

Underneath this issue is a fallacy in human understanding of nature: the assumption that the environment and its creatures are brittle things whom the slightest disturbance will render extinct. The environment has survived ice ages, comet impacts and climate change far more dramatic than any that artificial greenhouse gas may cause. Inconveniently for Pacific Northwest environmental lobbyists, birds extremely similar to spotted owls are doing just fine on their own. So get rid of the evidence.

December 2, 2013

The FDA and 23andMe

Filed under: Bureaucracy, Business, Health, USA — Tags: , , — Nicholas @ 11:24

Kyle Smith on the FDA’s sudden interest in shutting down private DNA testing company 23andMe:

… the FDA has the power to regulate medical devices, which is the pretext it is using to stop 23andMe. Ordering it to stop selling its personal genome service, the FDA declared that the tube “is a device within the meaning of section 201(h) of the FD&C Act, 21 U.S.C. 321(h), because it is intended for use in the diagnosis of disease or other conditions or in the cure, mitigation, treatment or prevention of disease, or is intended to affect the structure or function of the body.’

It would seem that 23andMe could simply put the words, “not intended for us in the diagnosis, cure, mitigation, treatment or prevention of disease” on its website and satisfy the FDA, but we all know that the motto of today’s federales is “We make it up as we go along.” The FDA seems determined to conduct a lengthy war with 23andMe.

[…]

Using the same reasoning, the FDA might as well shut down WebMd.com because people might type their symptoms into the site, and the response might affect whether or not they choose to go to a doctor. Any computer or iPhone thereby becomes a “medical device” that people can use for the “diagnosis, cure, mitigation, treatment or prevention of disease.”

Come to think of it, that thermometer you use to check your temperature is pretty dangerous too — it might give you either a false positive or a false negative — but why stop there? You exercise to mitigate or prevent disease, don’t you? Maybe the FDA should take your running shoes and your yoga pants away.

November 29, 2013

We’re from the FDA, we’re here to help you

Filed under: Bureaucracy, Government, Health, Science — Tags: , , , — Nicholas @ 09:19

Nick Gillespie on the mindnumbingly awful exercise of FDA regulatory power in shutting down personal DNA testing company 23andMe:

Personal genetic tests are safe, innovative, and the future of medicine. So why is the most transparent administration ever shutting down a cheap and popular service? Because it can.

In its infinite wisdom, the Food and Drug Administration (FDA) has forbidden the personal genetic testing service 23andMe from soliciting new customers, claiming the company hasn’t proven the validity of its product.

The real reason? Because when it comes to learning about your own goddamn genes, the FDA doesn’t think you can handle the truth. That means the FDA is now officially worse than Oedipus’s parents, Dr. Zaius, and the god of Genesis combined, telling us that there are things that us mere mortals just shouldn’t be allowed to know.

23andMe allows you to get rudimentary information about your genetic makeup, including where your ancestors came from and DNA markers for over 240 different hereditary diseases and conditions (not all of them bad, by the way). Think of it as the H&M version of the haute couture genetic mark-up that Angelina Jolie had done prior to having the proactive mastectomy that she revealed this year.

[…]

Peter Huber of the Manhattan Institute, a conservative think tank, has an important new book out called The Cure in the Code: How 20th Century Law is Undermining 21st Century Medicine. Huber writes that whatever sense current drug-approval procedures once might have had, their day is done. Not only does the incredible amount of time and money — 12 years and $350 million at a minimum — slow down innovation, it’s based on the clearly wrong idea that all humans are the same and will respond the same way to the same drugs.

Given what we already know about small but hugely important variations in individual body chemistry, the FDA’s whole mental map needs to be redrawn. “The search for one-dimensional, very simple correlations — one drug, one clinical effect in all patients — is horrendously obsolete,” Huber told me in a recent interview. And the FDA’s latest action needs to be understood in that context — it’s just one more way in which a government which now not only says we must buy insurance but plans whose contours are dictated by bureaucrats who arbitrarily decide what is best for all of us.

November 28, 2013

QotD: The gun-control debate

Filed under: Law, Liberty, Quotations, USA — Tags: , , , , — Nicholas @ 07:44

I begin rather skeptical of most gun-control proposals. The ones that are pitched in the aftermath of mass shootings are particularly cynical, as they often attempt to regulate circumstances unrelated to the shooting. I still grind my teeth at Mayors Against Illegal Guns running ads in my state citing the Virginia Tech shooting, and talking about the need to shut the “gun show loophole” — even though the shooter didn’t obtain his weapons at a gun show. These sorts of arguments strike me as one part craven opportunism, one part feel-good placebo. (I wanted to say “panacea,” but panacea actually means a genuine cure-all.)

If someone wants to propose a new restriction on gun ownership after a tragedy, and cites that tragedy as a reason to pass it, it’s necessary to show how that new restriction would have prevented, mitigated, or impacted that tragedy. For example, almost none of the gun laws proposed after Newtown would have changed much of anything in that awful shooting, as that disturbed young man stole his mother’s legally purchased guns.

I suppose there are two potential changes to the law that would have significantly altered events in Newtown. First, a total ban on private ownership of firearms, which our friends in the gun-control movement keep insisting isn’t their goal.

Second, a restriction on gun ownership by people who live under the same roof as a person who’s deemed mentally incompetent or a threat to himself or others. Of course, then you get into the questions of what constitutes, “mentally incompetent or a threat to himself or others,” what constitutes “under the same roof”, etc.

Then there are the proposals to limit how many rounds each gun can fire before reloading. Almost every spree shooter — we need a better term for this — has had more than one firearm when they’ve launched their attacks. Instituting 10-round limits would mean that future shooters would get off 20 shots before pausing to reload, presuming they only brought two guns. It’s reasonable to conclude future mass killers will just bring three or four guns when they begin their rampage. This strikes me as a quite modest mitigation in the danger of these shooters, too modest to seriously consider.

Jim Geraghty, “Why Post-Shooting Gun-Control Debates Are So Insufferable”, National Review Online, 2013-09-18

November 24, 2013

A life reconstructed

Filed under: Health, Science — Tags: , , , — Nicholas @ 12:28

In the New York Times, Mary Lou Jepson talks about the near-total loss and recovery of her life:

In my early 30s, for a few months, I altered my body chemistry and hormones so that I was closer to a man in his early 20s. I was blown away by how dramatically my thoughts changed. I was angry almost all the time, thought about sex constantly, and assumed I was the smartest person in the entire world. Over the years I had met guys rather like this.

I was not experimenting with hormone levels out of idle curiosity or in some kind of quirky science experiment. I was on hormone treatments because I’d had a tumor removed along with part of my pituitary gland, which makes key hormones the body needs to function.

[…]

In my experience it can be difficult to find a doctor to help a patient do this. I believe it is only partly because of the shortage of endocrinologists, doctors who specialize in the hormonal systems. Some doctors seemed not to believe that every hormone mattered. How many other patients like me have failed to find their ideal balance of medications?

There is evidence that careful tuning of these hormones can lead to dramatic personal and professional outcomes. Doctors and patients should consider replacement of every known hormone that is missing. New neurochemicals are identified by researchers every few years and should be studied as possible additions to the mix.

And access to these medications should not be hindered. As it stands today, some of the hormones I need daily to stay alive and to thrive can be, and frequently have been, blocked at the whim or neglect of a doctor’s office, insurance company or pharmacy. And still, 18 years after my surgery and despite great advances in endocrinal science, I need to fight to get them.

Disputes between organizations on whether prescriptions, test results or proper forms were transmitted or not. Communication breakdowns. A Kafka-esque nightmare of constantly needing another approval. It can take weeks to be notified of a rejection.

H/T to Tim O’Reilly for the link:

November 21, 2013

QotD: Michael Bloomberg wants you to pick a fight this Thanksgiving

Filed under: Humour, Politics, Quotations, USA — Tags: , , , — Nicholas @ 13:54

I don’t know what holiday dinners are like at Michael Bloomberg’s house, but I suspect there’s an awful lot of picking at food while the windbag at the head of the table lectures the assembled guests about why he’s right and they’re all idiots. That’s the message I get from his pet Mayors Against Illegal Guns organization, which wants its loyal minions, if there are any, to sit down to their Thanksgiving feasts and immediately start fights with relatives they haven’t seen in a year about gun control. All you need is a handy list of tendentious talking points — and a shitload of patience from Cousin Bob, who rebuilds old pistols for fun and just wrapped himself around half a bottle of Jack Daniels.

J.D. Tuccille, “Bloomberg Group Wants You To Start Fights About Gun Control at Thanksgiving”, Hit and Run, 2013-11-21

“The food police have a gargantuan appetite for ordering other people around”

Filed under: Bureaucracy, Business, Food, Health, USA — Tags: , — Nicholas @ 10:32

In Reason, A. Barton Hinkle explains why the Food and Drug Administration’s latest regulatory move may cost more than a billion dollars, require millions of hours of work … and provide no measurable benefits whatsoever:

In comments shortly after the menu labeling rules were proposed, the Center for Science in the Public Interest — they are the folks forever hectoring the public about the dangers of Chinese food, Italian food, movie theater popcorn, etc. — insisted that “if a restaurant has both an inside and drive-thru menu board, both must list calories.” And: “The calories should be at least as large and prominent as the name or price of the item.” And: “Calories should be posted for each size beverage available.” And: “The color, font size, font type, contrasting background, and other characteristics should all be comparable to the name and price of the item.”

What’s more: “Deli items or prepared foods that are dished up into standard containers should have signs posted next to each item with calorie counts for each container size available. For example, potato salad that is typically dished up into half-pint, pint and quart containers should list calories for one half-pint of potato salad, one pint of potato salad and a quart of potato salad.”

Rules such as these, the CSPI says, should apply not just to restaurants and supermarket delis but also to “salad bars, buffet lines, cafeteria lines, and self-serve, fountain soft drinks.” Moreover, “Calories must be posted for each pizza topping, sandwich component, omelet selection, sundae topping, or salad ingredient or dressing.”

The object of such Byzantine busybody-ness is plain enough: to “nudge” (former Obama regulatory czar Cass Sunstein’s favorite word) people to ingest fewer calories.

Just one small problem: It doesn’t work.

“Restaurant menu labels don’t work, study shows,” reported Today back in July: “No matter how much calorie information is on the menu list, people still choose the food they like, not what’s supposed to be healthier, researchers from Carnegie Mellon reported Thursday. … ‘Putting calorie labels on menus really has little or no effect on people’s ordering behavior at all,’ says Julie Downs, lead author of the new study published Thursday in the American Journal of Public Health.”

November 15, 2013

Corporations and social responsibility

Filed under: Business, Government, Law — Tags: , , , , , — Nicholas @ 14:17

In this week’s Goldberg File email, Jonah Goldberg talks about the notion that corporations should operate with an eye to “social responsibility”:

Milton Friedman was famously opposed to the whole idea of “corporate social responsibility.” His argument was that corporations have a single obligation: to maximize profits for shareholders. When CEOs spend money on gitchy-goo feel-good projects, they are exceeding their authority and wandering outside the lines of their job description. I’ve always been very sympathetic to this view. If you asked me to invest $10,000 dollars in your startup company and then I found out you spent $5,000 of it to sponsor a program to teach prison-gang members to settle their disagreements by acting out scenes from Little Women, I’d be pretty pissed. That’s not why I gave you the money. And it’s pretty shabby of you to buy fame and praise for your generosity while spending someone else’s money. Indeed, it’s not much less selfish than blowing it on a three-day bender with the mayor of Toronto.

There are lots of different takes on this argument and, because this is my “news”letter, I choose not to deal with most of them. My problem with the profit-maximizing-über-alles creed for Big Business is that it offers no principled or moral reason for Big Business to stay out of Uncle Sam’s bed. If the federal government can make it rain Benjamins for any business willing to twerk for its amusement, why should GE or Big Pharma or the insurance companies demur?

Of course, some businessmen understand the risks of getting in bed with the government. But, since there’s lots of money to be made, there will always be other businessmen perfectly happy to put on the French-maid uniform and bark like a dog.

Even Adam Smith said, “people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” That’s true. What’s even more true is that when government officials and business leaders sit down to talk, the inevitable result is a new “public-private partnership” that uses government force to limit competition from non-whorish corporations. Railroad magnates lobbied for the Interstate Commerce Commission. AT&T asked the government to make them a monopoly in the name of “efficiency” so they could clear the field of competition. Andrew Carnegie wanted government control of the steel industry so he could rely on Uncle Sam to guarantee his profit margins. GE loves Obama’s green-energy stuff, because without the inherent subsidies and regulations, it couldn’t make money off of its green tech.

I have no problem with contractors doing work for the government. It’s better that the guys building roads and bridges work for the private sector. But when big businesses agree to make the country less free, the market less competitive, Americans less prosperous, and the state more powerful just to make a few more bucks for their shareholders, it makes me think that Milton Friedman was wrong. We need a free-market version of corporate social responsibility. We need to equip businessmen with an ethical code that tells them there’s a principled reason not to get in bed with the government. They’d still be free to violate that principle, of course, but if they did, I hope they’d have the good sense not to come running to us to complain that the government has asked them to eat a bowl of dogsh**t.

Misunderstanding the purpose of health insurance

Filed under: Business, Economics, Health — Tags: , , , , — Nicholas @ 00:01

One of the big problems facing everyone in the US is the cost of healthcare: it’s expensive and getting more so. Obamacare is supposed to be an attempt to lower the overall cost of healthcare, but by approaching it from the “insurance” angle, it’s likely to make the situation worse rather than better. The Anti-Gnostic reposted an extended comment from Steve Sailer’s blog explaining why misunderstanding the purpose of insurance is a big problem:

1) Most people lose money on insurance, because most of the time insurance doesn’t pay out more than it takes in.

2) Thus, a “good” policy is a catastrophic-coverage-only, high-deductible policy, where most payments are out of pocket. This is a policy that protects you against the downside risk, but where you lose a lot less on average.

3) This is because the purpose of insurance is to protect yourself from *catastrophe*, not to make routine purchases.

4) For example, if you went to Best Buy and whipped out your home insurance card to get a new flat screen TV, everyone would look at you as a crazy man. “Don’t you know that home insurance is only for fires and floods, and not for routine purchases?”

5) And so it should be with health insurance, because you’ll actually — *provably* — pay less with a high deductible plan for all but catastrophic conditions.

6) Indeed, the most innovative and technologically advanced areas of medicine are ambulatory areas in which people feel that markets are “ok”. These are paradoxically the most trivial areas: lasik, plastic surgery, dermatology, dentistry, even veterinary medicine.

7) Why are these areas so advanced? Because people pay cash money, because they choose based on quality, and because they are *able* to choose — i.e. they aren’t being wheeled up to the hospital in a gurney in a no choice scenario.

8) Moreover, with every technology ever, from cars to cell phones to air travel to computers, things that start out expensive become cheaper when enough people demand them. With medicine it seems to bite more that money means differences in care. But at the end of the day doctors, patients, nurses, drugs, ambulances…all that stuff means real resources, and a refusal to do explicit computations just results in massive waste as costs are shunted to a place where no one looks at them.

At the Independent Institute blog, John Graham points out that — in the few places that government allows free markets to operate — prices tend to drop over time even while services or features improve:

It has taken a long time, but the price of hearing aids is in the process of falling dramatically. How has this happened? Technological innovation, of course, but there is more. There’s no shortage of technological innovation in U.S. health care. However, because third-party payers, that is, health insurers and governments, determine prices, there is no mechanism for customers to signal value to providers.

This is not the case for hearing aids: Although some states have mandated insurance coverage for hearing aids, this is usually limited to disabled children. The big market for hearing aids is seniors, and Medicare does not cover hearing aids.

This is another case of a phenomenon observed elsewhere by Devon Herrick of the National Center for Policy Analysis [PDF]: Where patients pay directly for medical care, prices fall like they do in every other market.

Seniors who want highly personalized service from an audiologist in his own practice can get it, and they will pay for it. Those who want to order online can save money by doing that. Those who want to get their old hearing aids repaired can make that choice. And the most adventurous seniors, who don’t mind running an earpiece into an iPhone, can get a functional hearing aid almost for free.

We are on the verge of enjoying universal access to hearing aids — but only because the government restrained itself from interfering, and let the market operate.

November 13, 2013

The NFL “closed shop”

Filed under: Business, Football, Law, Liberty — Tags: , , , , — Nicholas @ 10:35

In Reason, S.M. Oliva discusses how the NFL’s exemption from normal labour regulations makes it difficult to assess the rights and wrongs in the Miami Dolphins “bullying” situation:

Many libertarians see nothing wrong with the NFL’s labor system. Even in a pure free market, employers and unions could enter into “closed shop” agreements like the NFL’s CBA. But as we all know, professional sports hardly exist in a free market. The NFLPA itself holds a government-sanctioned monopoly over all current and future NFL players. Indeed, Martin was not even a union member when the NFLPA signed the current CBA in 2011.

More importantly, in a free market any closed shop would face competition from new entrants seeking to exploit the incumbent’s labor restrictions. There’s little risk of that with the NFL given that most of its infrastructure is subsidized by government. This includes not just stadiums built with billions in taxpayer financing, but also player development, as most NFL players are the product of college football programs subsidized by state-run universities.

There’s also the perverse incentives created by federal antitrust law. The collective bargaining process creates an exemption from antitrust law. Without that exemption, most NFL labor policies, such as the draft, would be deemed illegal. Now, that’s hardly a libertarian outcome. But consider the NFL’s position. The more rules and restrictions they can stuff into the CBA, the lower the risk of future antitrust lawsuits. Thus, the exemption encourages the NFL (and the NFLPA) to centralize as much of its labor policy as possible.

That means there’s little motive to experiment with more flexible labor policies. Individual teams can’t offer employee incentives or enforce discipline in any way that conflicts with the CBA. When there are workplace disputes like the Dolphins situation, the bureaucracy acts not to “protect” employees, but to ensure nothing disturbs the government-granted authority of the league and its monopoly labor union.

November 1, 2013

The Obamacare moment of clarity

Filed under: Government, Health, USA — Tags: , , , — Nicholas @ 07:49

In the Washington Post, Charles Krauthammer on the moment of understanding:

Every disaster has its moment of clarity. Physicist Richard Feynman dunks an O-ring into ice water and everyone understands instantly why the shuttle Challenger exploded. This week, the Obamacare O-ring froze for all the world to see: Hundreds of thousands of cancellation letters went out to people who had been assured a dozen times by the president that “If you like your health-care plan, you’ll be able to keep your health-care plan. Period.”

The cancellations lay bare three pillars of Obamacare: (a) mendacity, (b) paternalism and (c) subterfuge.

(a) Those letters are irrefutable evidence that President Obama’s repeated you-keep-your-coverage claim was false. Why were they sent out? Because Obamacare renders illegal (with exceedingly narrow “grandfathered” exceptions) the continuation of any insurance plan deemed by Washington regulators not to meet their arbitrary standards for adequacy. Example: No maternity care? You are terminated.

So a law designed to cover the uninsured is now throwing far more people off their insurance than it can possibly be signing up on the nonfunctioning insurance exchanges. Indeed, most of the 19 million people with individual insurance will have to find new and likely more expensive coverage. And that doesn’t even include the additional millions who are sure to lose their employer-provided coverage. That’s a lot of people. That’s a pretty big lie.

October 31, 2013

A garage of historical significance

Filed under: History, Technology, USA — Tags: , , — Nicholas @ 08:28

In The Register, a remarkably blasé report on the designation of the house where Jobs and Wozniak created the first Apple computers:

The house where Steve Jobs built his first computers has been added to a list of historic buildings in Los Altos.

The Los Altos Historical Commission voted unanimously to add the home at 2066 Crist Drive as a historic resources, since its hallowed garage was where Jobs made his first computers and co-founded Apple, the San Jose Mercury News reported.

The commission’s report said that it had been reviewing the property for potential designation for the past two years due to its “association with an event and an individual of historic significance”.

From other discussion on the topic, this will require the current owner of the property (Patricia Jobs, the sister of the late Steve Jobs) to get the commission’s advance permission to do any kind of work on the house … including ordinary maintenance. No funds from the municipality go along with this designation: once your house has been so designated, you no longer exercise full rights of ownership, but you still are required to pay for any work the commission deems necessary or desirable. Ms Jobs apparently still has a right to appeal, but I don’t know what her chances of success might be.

October 29, 2013

Even selling the USS Forrestal for $1 was a win for the US Navy

Filed under: Economics, Environment, Military, USA — Tags: , , , , — Nicholas @ 07:21

Several people have commented about the headlines proclaiming that the very first supercarrier had been sold for a princely sum of $1, but Strategy Page explains why even that token dollar was better than all the other options:

The U.S. Navy recently sold a decommissioned (in 1993) aircraft carrier (USS Forrestal) for scrap. The ship yard that will take the Forrestal apart (All Star Metals of Texas) paid the navy one cent ($.01) for the ship. That’s because this was the best deal the navy could get. That’s because it will cost many millions to take the ship apart in a legal fashion (being careful to avoid releasing any real or imagined harmful substances into the environment). The other alternative was to sink the Forrestal at sea. But this requires partial disassembly (to remove anything that could or might pollute the ocean), that would be even more expensive.

[…]

Since the 1990s, sending warships to the scrap yard has not been considered a viable alternative. It’s all about pollution, bad press, and cost. That was because of the experience with the largest warship to be scrapped to date, the 45,000 ton carrier USS Coral Sea. This ship took until 2000 (seven years) to be broken up. Thus, the new ecologically correct process was not only expensive but it took a long time. Then the navy discovered that the cost of scrapping a nuclear powered carrier like the USS Enterprise would be close to a billion dollars. This was largely the result of a lot more environmental and safety regulations. With so many navy ships (especially nuclear subs) being broken up in the 1990s, and all these new regulations arriving, the cost of disposing of these ships skyrocketed. This was especially true with carriers.

So for over a decade the navy just tied up retired ships and waited for some better solution to appear. That never happened. In fact, the situation has gotten worse. The navy only has one ship scrapping facility (Brownsville, Texas), so only one carrier at a time can be dismantled. Using official estimates of the time required to dismantle each of the biggest ships, it’ll take seven decades to get rid of the surviving conventionally powered carriers. Note also that the conventional carrier in the absolute worst shape, the USS John F Kennedy, is the one being officially retained in category B reserve (but only until Congress forgets all about her, of course). Name recognition really does count.

It gets worse. With the really vast number of single hull tankers being scrapped and large numbers of old, smaller-capacity container ships laid up and likely to be offered for scrap fairly soon, the market for difficult-to-scrap naval ships is going to shrivel and the price for scrap steel will drop. Efforts to get the navy to include the costs of disposal in the budget for lifetime costs has never caught on and now it’s obvious why not. The real nightmare begins with the first nuclear powered carrier (the 93,000 ton USS Enterprise), which began the decommissioning process in late 2012 (with the lengthy removal of all classified or reusable equipment). The cost of dismantling this ship (and disposing of radioactive components) may be close to $2 billion.

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