Out of Control

It looks like 2006 will close with no deal between San Francisco and the EarthLink-Google partnership selected to provide a citywide wireless system.

As I’ve covered on this blog throughout the year (here, here and here), the San Francisco battle has come down to a caustic political fight between city officials who see WiFi as a city service than can be provided in partnership by a commercial company and a coalition of left-wing activists who view WiFi as a vehicle for enlarging city government.

Hence the endless rounds of bickering over pricing tiers and the use of advertising on the free tier of service. Philip Matier and Andrew Ross of the San Francisco Chronicle write:

The key sticking point: what exactly will be free and what Google and EarthLink will be allowed to charge customers for upgraded service.

"I wouldn't say we are black and blue (from the talks), but this is a big, complicated deal,'' San Francisco telecommunications chief Chris Vein told us.

Complicated? Only in the City by the Bay. Other cities, including Anaheim, Portland, Ore., Philadelphia and Santa Clara, Calif., seemed to have worked these issues out with their partners. Heck, even New Orleans, governmental basket case that it is, got its public-private partnership (EarthLink again) up and running! Then again, for these cities, it was hardly “complicated” to choose between willing private investment and raiding the public coffers to provide Internet access for what amounts to a middle- and upper-class demographic.

The San Francisco project remains hostage to a band of anti-business groups such as Media Alliance, which are plainly dismayed that city has turned to private enterprise. For them, profit is a dirty word and the idea that in return for free service, users will have to view advertising, is an abomination. Hence, some of their more radical friends at City Hall feel obligated to keep pressure on EarthLink and Google to give away the store, while the two companies push back just as hard pointing to the economic realities of the broadband investment that in turn require certain pricing levels.

Taking a page from today’s policy attack manual, Provo, Utah, officials begin a rebuttal to the recent Reason report criticizing the progress and cost of its iProvo municipal broadband system by pointing out that at some time in my professional past I (“gasp”) did some work for Qwest.

Never mind Qwest neither funded nor participated in the report. Never mind that my past work with Qwest amounted to maybe 40 hours of work in 2003 with their Chicago-based PR agency on project to improve its “brand voice.” Never mind that I never even dealt with anyone at Qwest; the project involved editorial mark-up of internal newsletters, press releases and ad copy supplied by the agency. The iProvo authors somehow spin this into a massive conflict of interest by characterizing this one-off project as indicative of “strong-ties” to Qwest.

If only Provo’s three years of mounting losses could be wiped away by the none-to-surprising revelation that as an expert in the telecom field, at some point, some time, I gained a paycheck from it. Certainly once we dispense with the ad hominem attacks, the report does little to challenge the fact that iProvo is losing money, nor my conclusion that it will continue to do so.

In fact, read it closely and you’ll see it denies very little. It focuses on small points and benefits from having more up-to-date pricing information than I did. But beyond that, it is little more than a list of excuses and rationalizations about why iProvo is losing money, along with some clever spinning of its own, especially on the HomeNet debacle. Certainly the city isn’t confident enough to use the rebuttal to set a definitive date for profitability or positive cash flow.

My favorite section begins on page 17:

“Losses in 2004 and 2005 were larger than anticipated due to the following reasons” and goes on to list bulleted excuses: Processes took longer to set-up than anticipated, construction began later, transport fees were lower than expected, the retail partner failed, and the customer mix did not meet forecasts.”

Dear iProvo: This is the point! It’s not that your intentions were bad, but these are the invariable problems municipalities get into with broadband and why they should stay out. The plan that’s sold to the community usually is overly-optimistic and fails to account for all market factors. Bottom line, iProvo is failing to deliver on its promises. Nothing in their rebuttal suggests they will.

A citizens group in Anchorage has fought for several years to get a citywide vote on ending the taxi oligopoly. Naturally, the city government fought them tooth and nail. But in a nice Christmas present, the state Supreme Court ruled that the vote can proceed on April of 2007.

Anchorage has the kind of weather that can make waiting for a cab even less pleasant than otherwise. Allowing reasonable entry in the taxicab business will be a big victory for city residents.

A college newspaper oped-er gushes over Minneapolis’s light rail line:

arguably the most striking effect of the new train system has been the way that the city’s inhabitants have begun to view their own city, best stated by the headline of the St. Paul Pioneer Press on the light rail’s opening day that read, “Now it feels like a real city!”

It’s time for Madison to become a “real city.” It’s time for transportation on rails.

But if it’s “real” expensive, the “real” city dream might not last long.

Consider what's happening in Portland, Oregon the city that I think is almost entirely populated by out of town city council members oohing and ahhing over real-live light rail lines. They’re eager to bring “sustainable” transportation to their home towns, but how sustainable is Portland’s approach?

Headline: Transit projects running on empty

Metro estimates that the state's 24 cent gas tax, last increased in 1993, would have to be raised $1.40 a gallon to pay for everything in the current [$10 billion long-range] plan. That's clearly a fantasy, [Metro Councilor Rex] Burkholder says, and he wants to bring a dose of reality to the process.

There’s also a “financially constrained” list of projects that costs $4.2 billion:

But Burkholder says even that 2004 "constrained" figure was based on a 1 cent annual gas tax increase. Not only has that not happened -- voters overwhelmingly rejected a nickel increase in 2000 -- the amount available for new projects is even less because it will be needed to pay the debt for the state $1.3 billion bridge repair program.

Apparently some revamping is in the works:

Burkholder says he expects the revamped project list to be smaller. Projects that survive will meet these criteria: clean air, safe and pleasant neighborhoods, reliable -- if not necessarily speedy -- commutes, and freight reliability.

BTW, something else is waning in Portland. John Charles of the Cascade Policy Institute points to a Portland Business Alliance survey (see last page of pdf) that shows that the percentage of downtown employees who use light rail to get to work has tumbled from 20 percent in 2001 to 14 percent in 2005. This is especially significant since downtown commuters are typically the easiest people for rail lines to serve.

Related: Other Cities Celebrate the Transcendent Power of Rail

Last year Reason joined several other groups led by the Center for Competitive Politics to file amicus briefs to the Supreme Court in the case of Wisconsin Right to Life v. Federal Election Commission. Basically the case affirmed the right of grassroots groups to speak about election issues near elecitons, despite government's efforts to ban them.

Our amicus brief here.

More on the DC. District Court decision here.

Eric S. Jaffe, the brief's author, writes, "It seems that it is now the regulation of speech, not its protection, that has its 'fullest and most urgent application' where speech has any attenuated relation to an election. Proximity to an election, however, is neither a sufficient reason to stifle grass-roots lobbying ninety days a year, nor reason to prevent grass-roots lobbying overcertain media...Constraining effective grass-roots lobbying also will shift power and influence to incumbents, who have far better alternatives to get out their message in the context of pushing legislative agendas and garnering free media attention. That shift gets things precisely backward, with incumbent representatives able to lobby the public through the mass media, but the public unable to organize and lobby the incumbents through the same means."

See the rest of this post if you want to read the press release from CCP.

While it lacks the power to create a national franchising process, the FCC did its bit Wednesday for competition and choice in cable and video services by voting to institute a 90-day “shot clock” for local approval of franchise applications and sharply curtailing local authorities’ ability to demand build-out requirements as well as other costly concessions from applicants that often do not pertain to service.

The ruling means that cable competitors, particularly phone companies which have begin rolling out fiber and IP-based video services in the past year, can gain approval to begin construction in more markets faster. The FCC ruling incorporates provisions found in most franchise reform bills that have been enacted or introduced around the country, taking the nation as a whole that much closer to greater cable and broadband competition.

In areas where there is competition for cable and cable-like video services, prices drop and service options improve. Comcast dropped prices, or held the line on rate increases, in markets in Florida and Virginia where Verizon launched its fiber-based FiOS service.

After AT&T introduced IPTV service in San Antonio, Time Warner Cable chose the Texas city as a test market for its new “Start Over” feature that allows viewers who tune in late to watch a desired show from the beginning.

As consumer advocates of all stripes point to lagging U.S. broadband deployment, the city of Milwaukee is going to court to stop AT&T from rolling out the very advanced broadband services consumers want and need.

As Adrian notes below, the Milwaukee Business Journal reports, the city wants to stop AT&T’s Project Lightspeed upgrade because it has no cable franchise agreement.

Adding to the thread, it appears the city grinches rationale for seeking to pick the pockets of Milwaukee’s prospective AT&T customers is that data containing video programming, as opposed to e-mails or phone calls, is being transmitted over the network.

AT&T’s U-verse service is not a multichannel cable television service the way franchise laws define it. It's not legal semantics--so far authorites in Connecticut and Oklahoma have agreed with this reading. Unlike cable, IP television programming is not received at a local satellite center and aggregated down a cable hundreds of channels at one time, but, like Internet content, is downloaded in a data stream from a distant server. This model allows for innovative pricing and packaging schemes, including “a la carte” programming that many consumers want, but is not cost effective under the conventional cable model. This is just one of the many service and price options Milwaukee is delaying through its ill-thought legal action.

In cities and states around the country where new providers have launched competitive video services, including AT&T’s U-verse and Verizon’s FiOS, prices drop and service improves. The city should drop its groundless lawsuit immediately and allow city residents the right to enjoy broadband services delivered from new platforms that are both innovative and cost-effective.

So, the city of Milwaukee is suing AT&T because they DARE to offer television services in competition with the local cable monopoly! Never mind that AT&T is already regulated for access to rights of way, and that they are offering to pay equivalent fees. The city apears to just want control, pure and simple.

The benefits to consumers of having competition are obvious to anyone--heck even my 7 year old daughter gets it--and well documented, as two reports Reason will release in January will show. Anytime a we can reasonably shift from monopoly to real competition we are going to be better off. But too bad for the residents of Milwaukee, their elected officials will stand firmly atwart technological and economic progress and make damn sure they don't have to face any pesky choices in television service providers. The Grinch would be proud.

California has long lured folks from across the nation. Many still come to the Golden State, but now more are flowin’ out than are flowin’ in:

Between 2004 and 2005, the migration flow into California from the other 49 states started flowing the other way. Data from the state Department of Finance shows that, for the first time this decade, more people left California in 2005 for another state than the number who moved in. Mary Heim, a finance department demographer, says this particular kind of outflow will continue for the foreseeable future.

Unlike the tens of thousands who left Silicon Valley following the tech bust earlier this decade, the new migration is about the quest for something besides a job: a better quality of life at a lower cost of living.

Consider Wayne Brown. He took a $40,000 pay cut and moved from the Bay Area to Kansas:

It got to be too much last year for the college information-technology officer: the commute to downtown San Francisco that sometimes took two hours, the housing-price spiral and the high-wire borrowing that paid for it.

``I would find myself sitting in traffic,'' Brown recalled, ``screaming at people.''

When the Kansas job came up in early 2005, Brown and his wife, Teresa, sold two Bay Area homes and happily settled in a suburb of Kansas City. They have never looked back.
…
Brown, who lived in Dublin before he moved to Kansas, believes he did well in spite of his pay cut because the cost of living is so much lower in the Kansas City suburb of Overland Park. He and his wife were able to cash out the equity in real estate they owned and get a jump on saving for retirement.

Brown loved the Bay Area's weather, but much of the time he had to enjoy it stuck inside his car. On weekends, he and his wife were often too tired from work and commuting to take advantage of the Bay Area's cultural and recreational riches.

``During the week, it was no life,'' Brown said. ``And really there was no way to relieve stress from work; it just continued on in my life.''

Note that the MN article says that 2004-2005 was the California’s first out-migration year this decade. In 2003, I pointed to a Census report that revealed that the Golden State was out-flowin’ from 1995 to 2000.

(Somewhat) related: A 2005 LA Daily News piece by me

Ted wrote back on the 11th on the story about Congress moving quickly to prevent a small milk supplier from selling at a lower price in California than the prices fixed by the dairy industry. He made the good point that we worry about Big Oil screwing us at the pump, but don't seem to care the Big Milk does it at the checkout stand with the help of Congress.

My friend Richard Rider looked at how members of the House voted on the emergency "Milk Regulatory Equity Act" which guaranteed California milk drinkers could NOT be sold milk at lower prices. If you need more proof that the Republicans have no more fiscally conservative instincts, here it is.

Republicans voted 162 in favor and 57 against, passing the measure with 74.0% of those voting. On the other hand, the Democrats did a bit better by milk drinkers, voting 122 to 71 in favor, supporting the bill with "only" 63.2%.

President Bush's Saturday radio address was a knee slapper.

When you decide how to spend your paycheck, you have to set priorities and live within your means. Congress needs to do the same thing with the money you send to Washington. That was one of the clear messages American voters sent in the mid-term elections. And one of the best ways we can impose more discipline on federal spending is by addressing the problem of earmarks.

Sooooooo. In other words: Ignore the fact that Congress and I spent money like drunken Paris Hiltons for the past 6 years. I.e. ignore that little man behind the curtain, says the great Oz. Really, we are now going to get serious about not spending so much. Of course, we don't have so much control over spending now. . .

What really chaps my hide is that he decides to focus on earmarks!! Sure earmarks suck and lead to lots of stupid spending. But it is trivial compared to the ponderous, bloated major spending programs. Hey President, how about taking responsibility for your part in overspending and going back to your 2000 ideas about using actual performance to evaluate spending priorities?

Last month CA voters approved a stunning $40 billion in new debt. Reason pointed out the financial insanity of this. Now Steve Frank at CPNV is doing a great job keeping track of the consequences.

Government Can’t get Enough Money...More Big Bonds in 2008?

State Revenue Down by $657 Million In November

Special Interests Lobbying to Increase Size of California Deficit

The formula is really very simple. CA already spends more than comes in. We are borrowing billions that has to be paid back with interest. We are unwilling to take a hard look at our spending and prioritize and make cuts were necessary and sensible. All this only adds up to one thing--tax increases. At some point it will finally come home to roost, and the false choice will be presented to Californians--tax hikes or cuts in the most emotionally appealing government programs. No discussion of doing the hard work of managing an organization within a budget will occur. Then we'll see if the taxpayers can be fooled again. I hold out little hope since they have a track record of believing the false choice.

Given the almost eerie popularity of CSI in all its incarnations the stuff Roger Koppl is doing with his Institute for Forensic Science Administration is fascinating.

Forensic science isn't quite the magic portrayed on CBS, surprise, surprise. In fact, error is still a significant problem in the real world of forensic science. The Institute is about research on best practices and means of improving the administration of crime scene investigation and the rest. Some good survey work and research papers etc. Reason will be publishing a study by Roger in the coming months.

As of the middle of this year, at least 17 states were considering legislation to limit the use of radio frequency identification (RFID) technology, up from 12 in 2005, according to an article “Rage Against RFID” in Washington Technology.

“People have this Hollywood view of RFID as being a chip implanted in a person, like in the movie ‘Mission Impossible III,’ and that person can be tracked by a helicopter five miles away,” Patrick Sweeney, CEO of Odin Technologies Inc. of Wilton, Conn., told reporter Ethan Butterfield. “That tends to scare people, and it gives them the wrong image.”

RFID chips are tiny microprocessors that, when activated by a nearby scanner, transmit previously embedded information. Despite all fears, no one has yet succeeded in forcibly implanting RFID chips in people, not even prison inmates or convicted child predators, two groups most often mentioned as candidates. At the same time, RFID technology is very much with us, especially in the product supply chain, and the sky has not fallen on privacy.

A firm with a federal contract to help build fences between the US and Mexico under investigation for using illegal immigrant workers. Whooda thunk it.

Metropolitan types who think expensive oil will drive people into cities face a rude awakening. Burbs will be the big winners.

So argues Joel Kotkin in Newsweek, "Hail to The Suburban Oasis."

For evidence, look at the experience of the 1970s. In that decade, Americans, Europeans and Japanese faced an even steeper price rise than the one we face today. Worse, we were hopelessly unprepared for it, and far more jobs, particularly high-paying ones, were located in the urban core.

So what happened? People adapted, eschewing the long commutes into the central city for generally shorter ones to new office and industrial parks on the periphery. Worldwide, almost every country continued to suburbanize, from Orange County, California, to Grand-Couronne around Paris. In the United States, the ’70s proved to be the only decade in the 20th century in which overall urban population dropped in actual numbers.

. . .

There were other significant changes as well. American drivers abandoned gas guzzlers for fuel-efficient cars long favored by commuters in other countries, where the price of petrol runs two to three times higher. The 1970s also saw builders begin to adapt energy-saving methods, including a greater emphasis on better insulation, thicker windows and more-efficient appliances.

. . .

“The biggest jolt the Industrial Revolution administered to the Western family,” suggests historian Peter Stearns, “was the progressive removal of work from the home.” The Internet revolution now gives us the opportunity to reverse this historic trend, allowing the postindustrial community of the future to function something like its preindustrial counterpart.

Joel makes some good points. The modern history of reacting to oil price changes is chock full of things people didn't predict. I expect this to be true in the coming decades as well. Congress is gearing up to crank up the cost of energy with alternative energy mandates and greenhouse gas limits and they are not expecting the kind of things Joel is pointing out to result.

Over at TCS Daily David Henderson is writing a three-part series on Alan Reynolds’ new book, Income and Wealth, which apparently takes a sledge hammer of empirical evidence to the widespread belief that middle and low income folks are getting screwed. Henderson says the book “will prove to be the most important book on the U.S. economy in 2006 and possibly one of the five most important in the decade.”

Here’s a bit from the first installment:

Reynolds continues by telling of a 2004 story in the Washington Post titled, "The VanishingMiddle-Class Job." The Post article pointed out that in 1967, nearly a quarter (22.3 percent) of households made between $35,000 and $49,999 in inflation-adjusted terms, but that that share was down to 15 percent by 2003. Reynolds notes that the same article showed that the percentage of U.S. households with a real income higher than $50,000 rose from 24.9 percent in 1967 to 44.1 percent in 2003. Moreover, the percentage with income lower than $35,000 fell from 52.8 percent to 40.9 percent. In other words, the "middle class" was shrinking because people were moving out of the Post's statically defined middle class into a higher income class. Comments Reynolds: "The article could have been more aptly titled, 'The Vanishing Lower-Class Job.'" But because Reynolds shows elsewhere that higher-income households tend to have more than one worker, one can't simply equate households and jobs. Therefore, the article would have been even more aptly titled, "America's Families are Getting Wealthier." But that's not exactly the message or the tone the Post was shooting for.

More here.

Related: If things are so great, why do I feel so lousy? Parts I and II

Related: The Middle Class is Shrinking—Hooray!

Related: What a great time to be poor

Quick: al Qaeda is what, Sunni or Shia?

If you don’t know, it doesn’t matter all that much if you’re a doctor, a bartender, or a software programmer. It’s a different story if you’re the incoming chairman of the House Intelligence Committee.

CQ’s Jeff Stein gives Silvestre Reyes (D-TX) a pop quiz:

Al Qaeda is what, I asked, Sunni or Shia?

“Al Qaeda, they have both,” Reyes said. “You’re talking about predominately?”

“Sure,” I said, not knowing what else to say.

“Predominantly — probably Shiite,” he ventured.

He couldn’t have been more wrong.

Al Qaeda is profoundly Sunni. If a Shiite showed up at an al Qaeda club house, they’d slice off his head and use it for a soccer ball.

Reyes also didn’t know which camp Hezbollah belongs to. And it’s not a Democrat thing--Rs who have flunked Stein’s quizzing include Rep. Jo Ann Davis, R-Va., and Terry Everett, R-Ala. Several top counterterrorism officials at the FBI also flunked.

Article here.

Michigan Monday became the 10th state to allow new cable TV entrants to apply for a statewide franchise to offer service anywhere in the state, and the 12th overall to initiate some level of video franchise reform. The bill now goes to Gov. Jennifer Granholm, who has said she intends to sign it.

The new law creates a universal statewide franchise fee so that cable and video service providers no longer have to enter into time-consuming negotiations for separate franchising contracts with every local unit of government. That means a choice in cable companies for more Michigan residents that much sooner.

In states where franchise reform has passed, including Texas, Indiana, Virginia and California, consumers already are enjoying lower prices, more choices, and the benefits of new technology, including fiber-optic lines to the home and integrated cable and Internet services. Fears of red-lining and “cherry-picking” have also proved unfounded. Telephone companies are deploying services throughout all demographic brackets. In some cities, such as Ft. Wayne, Ind., lower-income neighborhoods are being wired for competitive cable service before the wealthier sections – mainly because there is greater demand for economical cable and Internet services that the former regulated cable monopoly regime failed to deliver.

Michigan legislators should also be congratulated for passing the bill without the so-called “network neutrality” provisions demanded by Google and other major content providers. They correctly recognized network neutrality is a disastrous Internet regulatory plan that would shift the costs of managing bandwidth-hogging services from the big applications providers that profit from them, and instead roll those costs into every consumer’s Internet bill.

For more on the issue in Michigan, check out Mackinac Center analyst Diane Katz's October op-ed here.

For service and repair drivers who work south of 60th St. in Manhattan, wicked traffic congestion means they lose one trip per day. May not sound like much, but according to this study I mentioned a while back, it costs each one $7,000 in annual income.

A cabbie loses 5.3 trips a day and $8,000 in annual income.

Many people assume that less driving means less congestion, but those familiar with Manhattan know better. In fact rush “hour” in Manhattan now spans 12-14 hours.

The “get ‘em in, get ‘em” out mentality is giving way to the "let them linger" approach. Virginia Postrel notes the Starbucksization of the shopping mall:

Over the last decade and a half, the once-monolithic mall has become more diversified, more aesthetically appealing and more porous. Outdoor "lifestyle centers," often without department stores, are reinventing the city street, while traditional malls revamp to provide more entertainment, more restaurants, more appealing public spaces and more reasons to linger. After five decades of experiment and evolution, the American shopping center is finally beginning to fulfill its inventor's dream: to re-create the human-scale European city "filled, morning and evening, day and night, weekdays and Sundays, with urban dynamism."

That dreamer's name was Victor Gruen, an architect in exile. In the mid-20th century, he lived in Beverly Hills but longed for Vienna, the city he'd been driven from by the Nazis.

More here.

Related: My take on other aspects of the Suburban Style Evolution:

Ease into the red Eames chair next to the fireplace, log onto a high-speed wireless connection and dine on your fruit and walnut salad. Where are you? You just might be at one of the new-look McDonald's that the company recently unveiled in certain markets. The kind of evolution Mickey D's has been going through has also reshaped many other suburban fixtures and the transformation may render many of the criticisms lobbed at suburbia outdated—that is, if they were ever accurate in the first place.

More on McDonald’s, subdivisions, SUVs and Wal-Mart here.

When gas prices rise, we get wails from the public and endless investigations into whether “Big Oil” might be screwing consumers.

But what happens when Big Milk flexes its political muscle to keep prices artificially high?

America’s suburbs are growing in economic influence, while cities are declining. But these days when it comes to politics, big-city mayors often get promotions. That’s especially interesting because back when cities enjoyed more influence mayors often found that their upward political mobility stalled:

Here’s Joel Kotkin:

But today, mayors across America are riding an unprecedented wave of upward mobility. Here in California, for example, the men most widely touted to become governor once the Terminator terminates are not any of the myriad of statewide Democratic officeholders, but two high-profile mayors, San Francisco's Gavin Newsom and Los Angeles' Antonio Villaraigosa.

And this is not just another weird California phenomenon. Earlier this month, Ed Rendell, former mayor of Philadelphia, was easily re-elected governor of Pennsylvania. Another mayor, Martin O'Malley, became governor of Maryland despite a less-than-stellar record in governing crime-ravaged Baltimore.

There are others on the way. Houston's highly effective Mayor Bill White and Denver's popular "hip and cool" John Hickenlooper are already seen as serious contenders to being elected governor.

And for the first time in more than four decades, a former mayor, New York's Rudy Giuliani, stands as a serious candidate for president.

Sure many mayors haven’t done much to actually improve their cities. Take San Francisco’s Newsom:

He's already lost the Olympics and maybe the 49ers as well. He has failed to reverse San Francisco's business-repelling political culture or its reputation for left-wing lunacy. The city's looming long-term fiscal crisis, largely the product of bloated public employee pensions, also has not been dealt with.

But never mind these boring details. Like O'Malley, Newsom is young. He's handsome. He exudes a hip-and-cool image that commands attention from local media, members of the opposite sex and political elites. If he starts campaigning in Hollywood, meager content and appealing looks can be counted on as a winning combination.

More here.

Speaking of economic biases held by the general public, there also seems to be a bias in favor of tangible things. If a nation builds cars and refrigerators that’s “good,” but if it shifts to providing services that’s “bad.”

In his takedown of Sen. Byron Dorgan, Daniel Griswold also takes on those who long to return to an economy based on making tangible stuff:

As a nation grows wealthier, the share of the workforce in agriculture invariably falls and the share in the service sector rises. The share in manufacturing typically rises and then falls. According to the World Bank, countries with the lowest share of the work force in the service sector include Uganda, Vietnam, Romania, Sri Lanka, Indonesia, and Mongolia. Countries with the highest share in the service sector include, along with the United States, Sweden, Switzerland, Canada, Hong Kong, Japan, and Luxembourg. The first group is among the poorest nations, the second among the richest. Apparently one goal of Dorganomics would be to shift America from the rich group to the poor group.

Griswold piece here.

And, of course, it’s just not true that we don’t make anything anymore.

Nick Gillespie takes on the race to regulate everything in the Chicago Tribune. Some gems. . .

Although "give me partially hydrogenated vegetable oil or give me death!" is not likely to become a rallying cry anytime soon, it's worth pausing a minute to consider the country's headlong rush to prohibit just about anything that bureaucrats--or simple majorities of voters--find offensive.

. . .

As Ald. Ed Burke (14th), who sponsored a similar measure earlier this year, told The New York Times, "I'm disappointed we're losing bragging rights to be the first city in the nation to do this." With attitudes such as that,
expect to see the equivalent of an arms race among jurisdictions bidding up restrictions on all sorts of activities deemed unacceptable.

. . .

Most important, these bans reduce all of us to the status of children, incapable of making informed choices. Is it quaint to suggest that there's something wrong with that in a country founded on the idea of the individual's rights to life, liberty and the pursuit of happiness?

Bob Poole recently wrote this for his newsletter on aviation secturity. . .

Last year when I testified on airport screening before a subcommittee of the House Homeland Security Committee, one of my key points was that TSA has a built-in conflict of interest. In the legislation that created the agency, Congress made it both the transportation security regulator and the provider of a major airport security service, passenger and bag screening. I’ve made this point also in policy papers, conference presentations, and in this newsletter. Alas, it seems to have fallen on deaf ears, perhaps in part because while people could appreciate that a conflict exists in theory, it did not look as if there was much of a problem, in practice.

But three recent events illustrate that the conflict is very real. One was the widely reported Red Team testing of screening at Newark, in which the team beat the screeners 20 out of 22 times. A second, reported last week by Annie Jacobsen at National Review Online (Nov. 28th), concerned a four-foot sword (!) that a passenger managed to carry on board an American plane at Dallas-Fort Worth. And the third, also reported by Jacobsen, was an incident at Kona, Hawaii, in which a baggage screener accidentally dropped a binder of information designated SSI (Sensitive Security Information) into a passenger’s luggage while it was being screened. The passenger, Navy veteran Joe Langer, only discovered the binder when he unpacked the bag the next day.

What is most interesting about all three incidents is the TSA’s response. TSA spokesman Nico Melendez had “no comment” for Jacobsen regarding the sword, and called the SSI binder incident a “fumble.” My assessment is that they hoped both would get as little attention as possible, to avoid further embarrassment of the agency. As for Newark, TSA dispatched an investigation team to try to figure out . . . not why the screening performance was so miserable but who leaked the report to the media.

This is “cover your ass” writ large—and it’s exactly the kind of thing that happens when one and the same agency writes the rules and then operates under them. Imagine instead what would have happened if these screening failures had been the responsibility of airport employees or a private screening contractor. TSA would have no institutional self-interest to protect; its focus would clearly be on figuring out what caused these performance failures and disciplining the responsible parties (and I don’t mean the whistleblowers!).

Rep. William Pascrell (D., NJ), a member of the Homeland Security Committee, defended the unknown Newark whistleblower. But if he wants to fix the underlying problem, he should look into legislation that would devolve the screening function to the airports, resolving the conflict of interest problem once and for all.

Reuters reports that a study that tracked 400,000 heavy cell phone users in Denmark, some beginning as far back as 1992, found no increase in cancer.

“A team of researchers used data on the entire population of Denmark to determine that neither short- nor long-term use of cellular phones, also called mobile phones, was linked to a greater risk of tumors of the brain and nervous system, salivary gland or eyes, leukemia or cancer overall,” Reuters reported.

The report was funded by the Danish Cancer Society and the Danish Strategic Research Council, on which a Google search finds nothing.

The report supports conclusions of other cell phone cancer studies through the last several years.

Full story here.

It’s darn near a cliché: one of the big justifications municipalities make for finding their own broadband systems is for telemedicine applications.

But much more can be accomplished for much less. Discussing the Arizona Telemedicine Program at the American Legislative Exchange Council (ALEC) States and Nation Policy Summit in Phoenix, Dr. Ronald Weinstein, program director said uses a high-speed leased network backbone to connect 171 hospitals, medical centers and other health care organizations throughout the state. Applications include 24/7 teleradiology, patient consultation and observation and telepsychiatry. The network reaches rural hospitals, prisons and Indian reservations and just marked its tenth anniversary (it’s not has if telemedicine is that new).

A program of the University of Arizona Health Science Center, the project received finding from the Arizona state legislature, but largely subsists on grants from diverse federal funds, which totaled $20 million in 2005.

Although municipal projects make much of the need for high-speed local networking, the Arizona network, while making use of a high-speed backbone, uses managed bandwidth allocation to balance loads. Much of the manpower and investment goes for equipment and the hospital end, and even then the accent is on economy.

The network even supports IP telecommunications. Weinstein told me that one of the Navajo tribes funded and extension of the network throughout the reservation.

I’ll concede that government funding is involved here, but the program’s grants come through a competitive process. Needless to say, no one felt that a municipality had to ask its taxpayers to take up the cost burden. Arizona certainly didn't go out and build the infrastructure itself. The project also recognized that a sound business plan, training and standardization were more critical elements.

All of these alternatives are important to remember, especially as Reason releases its report on the difficulties in Provo, Utah, a municipal system that started with high hopes and ends up in mounting debt.

Via Don Boudreaux, here’s Daniel H. Pink in Wired:

Almost three years ago, Scott Kirwin was Wired's pissed off programmer ("The New Face of the Silicon Age," issue 12.02). Tossed from his job and raging against globalization, he had launched the Information Technology Professionals Association of America to lobby against offshored work and imported workers. These days, Kirwin still works with computers. He's just less pissed: In June, he shuttered the ITPAA. "I don't view outsourcing as the big threat it was," he says. What changed? Well, Kirwin found better work as an analyst and software architect. And he noticed that the talents that make him valuable – open-mindedness, a willingness to take risks, flashes of ingenuity – couldn't be reduced to a spec sheet and emailed to Hyderabad. If more Americans develop such abilities, Kirwin believes, the use of Indian programmers could even improve our economic outlook. Outsourcing isn't going away, he says. "But in the end, America may be stronger for it."

Related: More happy endings

Related: Even more happy endings in this study by Adrian Moore and me (see p. 18)

Related: When outsourcing was going to destroy America

In a breakthrough study, the Partnership for New York City has identified more than $13 billion a year in losses to the New York Metropolitan Region’s economy that are a direct result of traffic congestion. The report issued by the Partnership today concludes that existing transportation and road systems are inadequate to accommodate the region's growing population and continued economic expansion, resulting in the loss of as many as 52,000 new jobs every year.

Some bits:

• Delays endured by commuters, workers and other travelers annually cost some $5 billion to $6.5 billion in lost time and productivity and up to $2 billion in wasted fuel and other vehicle operating costs.

• Traffic delays add to logistical, inventory and personnel costs that annually amount to an estimated $1.9 billion in additional costs of doing business and $4.6 billion in unrealized business revenue each year.

• There is a net loss in regional economic output of at least $3.2 to $4 billion annually due to loss of productivity, with the greatest losses concentrated in Manhattan, New Jersey and Long Island.

Press release here; study here.

Related: Congested Business—Silicon Valley Edition

Related: Congested Business--Austin Edition

Related: Congested Business—UK Edition

According to a new nationwide AAA survey, motorists have changed their mind about transportation funding—they think there should be more of it:

“In previous surveys and focus groups, we’ve seen real reluctance to increasing funding for transportation,” said Martha Mitchell Meade, spokesperson for AAA Mid-Atlantic. “Common responses used to be ‘I already pay enough,’ or ‘existing funds aren’t invested efficiently,’ or ‘I don’t trust my state DOT to do the right thing.’ I think the strong support for more funding we find in this survey bodes well for the challenges ahead of us. But we must remember, when motorists are asked to pay more, they must receive direct and recognizable improvements to their travel experience.”

Motorists have also softened to tolling, preferring that option more than other revenue-raising approaches:

When respondents were asked to choose from a number of funding options, the public did not favor using general purpose revenues. In fact, the most frequent choice - 52% - was some form of toll option to help raise money to fund our transportation system. The most popular options are those that add tolls to only new roads and highways (39%).

Despite majority of opinion that more funds are needed to address increasing congestion, there appears to be little support for increasing non-fuel taxes such as sales, income, and property taxes, with just 15 percent favoring this method. Only 21 percent of respondents favored increasing the gas tax, and only 19 percent of respondents favor a new financing method of imposing a vehicle miles traveled tax based on the number of miles a person drives...

AAA press release here.

Related: Folks in Atlanta, California, Denver, DC, and Virginia prefer tolls to taxes

In the Boston Globe:

Justice Stephen G. Breyer says the Supreme Court must promote the political rights of minorities and look beyond the Constitution's text when necessary to ensure that "no one gets too powerful."

One day he’s Mr. Wall Street, the next Lou Dobbs has morphed into Pat Buchanan (who himself went through a similar change).

Here’s Luke Mullins on CNN’s rollin’-up-the-sleeves populist.

Related: DobbsBot-3000

Amid all the hubbub about immigration there are many calls for Mexico to right itself so that fewer folks will want to flee the nation. But when talk turns to what Mexico should actually do, the discussion often gets bogged down in vague references to “fighting corruption.”

How nice it is to when someone points to specifics. Jorge G. Castañeda, a former Mexican official, points to various obstacles that stand in the way of Mexico’s success.

Take monopolies:

The oil (Pemex) and electric power (Federal Electricity Commission) firms owned by the state are untainted by competition; the private virtual monopolies in telecommunications (Telmex), television networks (Televisa), cement (Cemex), bread and tortilla manufacturing (Bimbo and Maseca, respectively) and banking (Banamex/Citigroup and Bancomer/Banco de Bilbao) face only tepid competition at home, thanks to their cozy relationship with the state. Prices, supply, service and quality suffer as a consequence, and today these monopolies are stronger than ever.

Another obstacle:

the unions that have controlled the Mexican labor movement since the 1930s. They were granted immense leverage in workplaces, tremendous resources and political power. The power of such organizations as the teachers union (the largest in Latin America), the oil workers union (the richest in Latin America) and the Social Security employees union (that has thwarted any attempt at pension or health reform for years) remains largely unchecked to this day. These unions obtained all their perks in exchange for 70 years of support for the PRI. They retain those perks, though they no longer owe any support to the government.

I’d also put land reform near the top of the to-do list.

More here.

Related: How Mexico scores on Heritage’s Index of Economic Freedom

As historian David Beito points out, America used to have all sorts of mutual aid societies. But with our turn to the welfare state many of those organizations have been crowded out.

Perhaps government action (or the expectation of it) crowds out other kinds of voluntarism:

In Who Really Cares: The Surprising Truth About Compassionate Conservatism (Basic Books), Arthur C. Brooks finds that religious conservatives are far more charitable than secular liberals, and that those who support the idea that government should redistribute income are among the least likely to dig into their own wallets to help others.

More here.

Robert Whaples surveyed members of the American Economic Association. He covered lots of ground and found quite a lot of agreement, nearly all in the less-government direction.

Survey write-up here.

Greg Mankiw summarizes some findings here, including:

• 87.5 percent agree that "the U.S. should eliminate remaining tariffs and other barriers to trade."
• 85.2 percent agree that "the U.S. should eliminate agricultural subsidies."
• 67.1 percent agree that "parents should be given educational vouchers which can be used at government-run or privately-run schools."
• 65.0 percent agree that "the U.S. should increase energy taxes."
• 90.1 percent disagree with the position that "the U.S. should restrict employers from outsourcing work to foreign countries."

From the U.K. site Telecom Redux, comes a true story of precocious children in our wireless age.

Click to read what London telecom journalist and blogger Jim Chalmers “Overheard on a Bus.”.