Out of Control

Another fire season has resulted in tragedy in Southern California and, once again, the federal, state, and local governments have shown that they still haven't learned how to deal with the threat. By now, you have probably heard about a lot of the bureaucratic bungling and red tape that impeded response efforts. As a San Diego resident, I had a front-row seat to the ineptitude. For example, despite the fact that the city is surrounded by three military bases, military assets went unutilized or underutilized. State rules require each federal helicopter to carry a licensed "fire spotter" from the California Department of Forestry and Fire Protection (Cal Fire). Unfortunately, Cal Fire didn't have spotters available, so nearly two dozen Marine, Navy, and California National Guard helicopters remained on the ground. In addition, two of the National Guard's C-130 cargo planes were unable to help because they still have not been fitted with tanks to carry thousands of gallons of water or fire retardant, despite promises to do so four years ago after the Cedar and Paradise fires ravaged the area. (For more details, see this Associated Press story.) Meanwhile, government officials from the president to the governor to the mayor to the County Board of Supervisors to spokesman from various government agencies constantly held press conferences where they stood around and congratulated each other on what a great job they were doing.

Some may say that the problems in responding to the fires in San Diego and elsewhere were just a matter of poor leadership. While this is true to some extent, I think there are problems with allowing government to handle such issues in the first place, problems that no change in leadership can fully address. The problem can be illustrated in the difference between public and private property and the different incentives of public land managers and private property owners. Government land management tends to be reactive, while private property management is proactive. Why is it that we never hear about the government clearing overgrown brush, creating fire breaks, or conducting controlled burns throughout the year, rather than responding only after there is a crisis and throwing money at the problem when it is too late?

Fire prevention is essentially about risk management and property protection, two of the things that free markets handle best! Author and columnist Lew Rockwell recently wrote an article on this issue. According to Rockwell,

Are we under the impression that private markets can't handle risk management? Private markets specialize in protection of property, particularly against natural risks. If the land were privately owned, it would be protected against burning through better management. If it had to be burned, the burning would be controlled. Unexpected events like droughts and winds would be calculated into management decisions.

What's more, there would be serious liability issues. Any owner of property who let fires rage would be directly responsible for imposing fires on others. This is the way markets work. If my bathtub overflows, floods my house, and then the waters flood my neighbor's house, I am responsible via my insurance policy. So, yes, there would be a price to pay for fires on your land that harm others' property.

What do we have today? We have fires that are no one's responsibility.

Perhaps it is time to rethink allowing government to manage our fire prevention efforts.

In the face of criticism from consumers, the industry and his own governor, Connecticut Attorney General Richard Blumenthal has reversed his position on AT&T’s multichannel IP video service, and said the company should be permitted to go forward with marketing the service pending a new decision from Department of Public Utilities Control (DPUC).

As reported, earlier last week, Blumenthal ordered AT&T to stop marketing and selling its U-verse video service and re-apply for cable TV franchises in each municipality -- a requirement that AT&T claimed was superseded by a franchise reform law that became effective Oct. 1. Blumenthal’s order came as a result of a DPUC decision that U-verse was a cable TV service. That ruling itself was a reversal of an earlier call that U-verse, because it is delivered over an Internet Protocol (IP) platform, was not cable TV in the technological sense.

In response, AT&T said it would end plans to invest some additional $336 million in new facilities, end plans to offer video service in the state and layoff some 300 employees.

Blumenthal’s original order drew fire from AT&T, from most of the media in the state, as Gov. Jodi Rell (R), as well as state Sen. John Fonfara and state Rep. Steve Fontana, the two Democratic legislators who co-sponsored the state’s franchise reform law.

Rell called on the DPUC to reverse the adverse ruling, although she does not have the authority to order it.

Blumenthal now says AT&T should be allowed to resume marketing the service and has filed a request with the DPUC to reopen the case.

Just when you thought telecom services were getting a break from taxation (The House approved the Senate's version of the moratorium taxing Internet services Tuesday, extending it seven years instead of four), along comes the Cook County, Ill., Commission with a proposal to stick a $4 tax on every phone line in the county, which takes in Chicago and its inner ring of suburbs.

It isn't often that AT&T and the Citizens Utility Board (CUB), Illinois' consumer watchdog group, agree. But both think the tax is egregious. The Illinois Chamber of Commerce and social activist groups such as the Ministerial Alliance Against the Digital Divide have also denounced the tax, which stands to add $20 a month in phone taxes to the average household, when landlines, cell phones, faxes and dial-up Internet are factored in. Plus the tax is indexed to inflation, so its only going to get higher each year.

Jon Van of the Chicago Tribune covers the story here. My favorite quote comes from Doug Whitley, president of the Illinois Chamber of Commerce and former head of Ameritech Illinois, who attests to the growth of government and how it tries to hide the consequences of spending in taxes likes these. "The philosophy is to hide the true cost of government by making the consumer think he's got a high phone bill," he said.

I have been interested in the recent push for TABOR (Taxpayer Bill of Rights) legislation in a couple of states. Maine recently fought (and lost) for one and of course there is the case of TABOR in Colorado that was recently repealed.

TABOR limits government tax revenue to a prescribed increase (such as inflation) over the prior year.

There is perhaps a case that TABOR is akin to the "starve the beast" solution to government spending. This belief is that tax cuts mandated before spending cuts will necessitate the later due to the enormous budget shortfalls. As this paper is arguing, tax cuts that come before spending cuts often leads to a longer term INCREASE in government spending because voters react to the budget deficits not with supporting further government spending cuts but with voting for pro-tax and higher spending politicians.

Again, this is just my opinion, TABOR proponents may have the causal effect of government budgets backwards, the problem is with spending and not taxation. A better solution is to have policies more thoughtfully and strategically plan spending reductions, such as through privatization or reducing wasteful expenditures.

The point I'm trying to make is that spending needs to be cut before tax cuts.

UPDATE: Ok, seems like I was a little off base earlier. I've looked through some other work on this and have seen that a. Colorado didn't have the sort of revenue fluctuations due to property taxes I had earlier believed, b. total state revenue is not as inconsistent as I had previously believed. Other points where I may have been wrong have been pointed out too, thanks to all those who have shown me that.

For what it's worth, my thoughts were influenced by this WSJ article that argues the housing bubble bust has caused major headaches for state governments. As wiser men have said, one study does not an argument make.

Just to be clear, my opinions do not reflect the position of the Reason Foundation. Can this be chalked up to the "I'm still new here" excuse?

Using twisted logic, the Connecticut Attorney General and the Department of Public Utilities say they are guaranteeing consumer choice in cable TV by doing everything they can to stop it.

In a ruling that can be summed up as “if everyone can’t get it, no one will,” Attorney General Richard Blumenthal and the DPUC told AT&T it cannot continue build-out of its U-verse video service without committing to providing service to all parts of the state—a demand the state does not force on cable companies that offer competitive phone service.

Even more confusing is the DPUC’s decision to block AT&T from applying for a statewide video franchise under Connecticut’s new law, which does not require universal build out. Instead, AT&T has been ordered to seek individual local franchises with scores of Connecticut communities—a cumbersome, time-consuming process the new law supersedes.

As a result, 150,000 Connecticut residents in line to be offered U-verse stand to lose the prospect of lower rates and innovative services that cable competition has brought to other states. In Connecticut, this somehow is defined as consumer protection.

On one hand, Arnie and his staff apparently saw the fire season coming and cut red tape to get a DC10 tanker approved that has turned out to be a big part of the firefighting effort. [Note in the article however, that the Feds have been unwilling to give the issue any priority]

But Arnie's grandstanding roots quickly came to the fore. During a visit to an evacuation center he got snippy when asked by a reporter about the state refusing to use military helicopters to help on the fire due to bureaucratic rules. “All you have to do is look around here and see how happy people are,” he said. “No one is screaming. No one is complaining. Anyone who is complaining about the planes just wants to complain.” Ahh, so in other words, focus on my visit to the refugees, and don't ask any impertinent questions about actually working on helping get the fires put out.

Hat tip to Richard Rider in San Diego for point out thes and other interesting things about the fires.

Once again, I've had the audacity to suggest that cars are not evil incarnate, especially considering what they replaced. My most recent blog post on Planetizen.com draws on an excellent article in the transportation journal Access, that suggests that horses were terrible for the environment and cars were, at least incrementally, better all the way around. The post and response from various professional planners (some of whom make sane and lucid comments) can be found here.

In closing, I'll quote from one of the responses:

I agree that there was a tremendous environmental benefit to motor vehicles replacing horses in cities - but there was not a great benefit to the tremendous increase in mobility that the automobile brought, as Mr. Staley seems to think.

Accordign to this Financial Times artilce high food prices have dramatically reduced the amount governments around the word are paying to farmers in subsidies.

Great! Saving the government money, glad to hear it. I am not holding my breath for a tax refund check. Wonder where they will spend it instead . . .

It is bad enough to be treated like a criminal every time I enter a US airport. It wold be some consolation if it were making us safer. But it is not. And the frosting on this bitter cake is we are not making us safer a great cost and inefficiency. Reason's Bob Poole has written extensively on how to redesign aviation security to acutally make us safer. Here is his comment on the latest news of TSA incompetence and the much overlooked fact that the one private security airport tested did MUCH better.

The story had just appeared in USA Today (Oct. 18th) when the first media call reached my desk. How could it possibly be, the editorial writer for another major paper asked, that checkpoint screeners missed 60% of hidden bomb materials at Chicago O’Hare and 75% at Los Angeles International—but only 20% at San Francisco International, where the screening is done by a TSA-certified private security firm?

We don’t know the details, I told her, but it’s probably not some inherent superiority of private enterprise over government agency. After all, checkpoint screening is a mind-numbingly boring job, and the screeners have to meet the same hiring, training, and testing criteria in either case. Instead, we have to ask whether the two different institutional arrangements lead to a difference in incentives and accountability that could account for such a large difference in outcomes.

And that, I suggest, is the lesson we should draw from this new information. As I told the editorial writer, the security company had to compete to get selected in the first place. And if they screw up, they can be fired—and they know it. The penalty for getting fired is not just the loss of that particular contract, but the damage to their reputation and thus to their prospects of getting more such contracts. If the TSA screws up, they just get admonished to try harder, and they stay in place. I don’t begin to know all the subtle ways in which that difference in incentives and accountability translates into different styles of supervision, different motivations, and other factors that may lead to three times better performance at detecting bomb parts in carry-on luggage. But the differences seem to be real.

There is also the slightly different matter of the tendency of any large organization to be defensive about its own poor performance. When Congress created the TSA, it gave the organization two conflicting roles. On one hand, it is the transportation security policy-maker/regulator. On the other hand, it is also the provider of one of the key security functions at over 400 airports: passenger and baggage screening. It’s only human nature for a regulatory agency to be harder on those it regulates at arm’s length than those who are part of its own family.

Since Congress created this conflict of interest in the 2001 legislation that created the TSA, only Congress can fix the problem. I’m not the only one who has been making this point for the past five years. But so far, no one in Congress has taken it seriously.

Paul Krugman churns out one of his past columns on the role of zoning in creating housing bubbles on his new blog. I know some of you may not like what he has to say on politics, but the fact of the matter is that he is a brilliant economist who will eventually win the Nobel Prize.

In Flatland, which occupies the middle of the country, it’s easy to build houses ... As a result, housing prices are basically determined by the cost of construction. In Flatland, a housing bubble can’t even get started.

But in the Zoned Zone, which lies along the coasts, a combination of high population density and land-use restrictions - hence “zoned” - makes it hard to build new houses. So when people become willing to spend more on houses, say because of a fall in mortgage rates, some houses get built, but the prices of existing houses also go up.

This is exactly right and fits the pattern of housing prices. House prices in San Francisco shot up like a rocket in the 1990s and in the last couple of years but plummeted around 2001. In contrast, mid-west towns with elastic land and few growth restrictions have seen much more steady and sustainable appreciation of house prices. A less restrictive zoning regime in cities like Los Angeles or San Francisco would make these cities both more affordable and less susceptible to the foreclosures that we are seeing as house prices drop.

Click HERE to read my recent op-ed on the Oath of Presidential Transparency as well as the merits of government transparency and accountability on FOXNews.com.

I heard the most illuminating – and the most depressing – assessment of Iraq yet last Wednesday at Michigan State University where Stephen Biddle, one of the most – if not the most -- respected military strategists in the United States, was speaking. (Full disclosure: Biddle was invited as part of a lecture series called the Symposium on Science, Reason and Modern Democracy that my husband co-directs at the MSU political science department.)

Biddle, a fellow at the Council on Foreign Relations and award-winning author of Military Power: Explaining Victory and Defeat in Modern Battle, and an early opponent of the war, explained why America’s pre-surge strategy in Iraq was a colossal failure. And even though the current U.S. strategy is on the right track, he put its odds of success – defined not as the creation of some fancy-shmantzy pluralistic democracy in Iraq, but just “sustainable stability” -- at no more than 10 to 15 percent. And that too if the U.S. maintains the current approximately 160,000 troops for at least 8 to 10 years till a new generation of Sunnis, Shiites, and Kurds has had a chance to grow up without each side feeling that it was about to be slaughtered by the other. This is an enormously difficult and expensive proposition with huge opportunity costs. But if the U.S. is not prepared for such a commitment, he believed, it should hit the exit doors now. This would certainly lead to an all-out civil war with epical bloodletting and nightmarish geo-political consequences for the whole region – but at least it wouldn’t cost anymore U.S. lives.

What, most emphatically, wouldn’t work was the middle-ground that every Democratic presidential candidate, with the exception of Joe Biden, was proposing: Cutting troop levels in half and changing their mission from combat to peace-keeping. This would make U.S. troops sitting ducks for both Sunni and Shiite militias without preventing their mutual slaughter. “This is a situation where the extreme options – total withdrawal now or a big troop commitment for about 10 years -- are clearly better than the middle one.”

Meanwhile, Joe Biden’s plan for carving up the country into a loose federation of Sunni, Shiite and Kurdish enclaves was wishful thinking too, Biddle felt. To convince Sunnis, who have little oil in their areas, to go along with such an arrangement, Biden proposes that an oil-sharing formula be written into the Iraqi constitution. But who’ll enforce the constitution? Given that Sunnis constitute only 20 percent of the population and have only minimal political representation, it would have to be the Shiite-dominated government. So we would basically be asking the Sunnis to lay down their arms for the sake of a piece of paper that would be enforced by their mortal enemies.

But the most interesting part of the lecture was Biddle’s explanation for why America was not able to control the insurgency till General Petraus took over. Till then, Biddle noted, the U.S. was not fighting Iraq – it was refighting Vietnam. Essentially, there are two types of insurgencies: A classic ideological insurgency and a sectarian-communal civil war. Vietnam was the first type of conflict where different groups were struggling with each other to impose their idea of good government on the rest of the country. Iraq, however, is the second kind of conflict where each is trying to protect itself and its identity. “The Sunnis, Shiites and Kurds are fighting a zero-sum game with existential stakes.”

Indeed, U.S. efforts to apply the lessons of Vietnam to Iraq, namely political reconciliation through elections, economic reconstruction and rebuilding an indigenous military, actually “poured gasoline on the flames of the Iraqi insurgency.” For instance, consider the creation of an indigenous force: In an ideological conflict, this would make perfect sense. Afterall, unlike foreign troops, locals have a direct stake in the well-being of their country. Moreover, since they speak the local language, they can more easily separate innocents from guerillas and avoid targeting the wrong people – something that is essential to gain the confidence of the larger population. But in Iraq’s case, none of this applied. In a country riven by ethnic hatreds, there was no reason to believe that an indigenous army would protect all Iraqi lives equally – or that it would be possible to convince anyone that it would. Thus, as far as the Sunnis were concerned, Biddle noted, the force that we put together was nothing short of a “Shiite militia on steroids.” Their response under the cirumstances was completely rational: escalate their insurgency and prevent this force from ever taking root. Even the much vaunted elections in Iraq fuelled the sectarian fires because, in a war of identity, electoral politics creates a further incentive to demonize the other groups. They gave Shiites an opportunity to say to fellow Shittes, “Vote for me and I’ll protect you from the Sunni Devils” – and vice versa. “Elections, did not mitigate underlying conflict, they intensified the centrifugal forces that were breaking-up Iraqi society.”

If things have calmed down a bit since General Petraeus took over in February, it is not necessarily because going in he had a more accurate understanding of the nature of the conflict – but sheer dumb luck. Even though we were screwing up badly in Iraq, as it turns out, al Qaida was screwing up even more. In Anbar Province, a predominantly Sunni area, al Qaida was systematically terrorizing the local population, leaving Sunni leaders with no option but to approach our units as the lesser of the two evils.

The success in routing out al Qaida in Anbar with local cooperation gave birth to what, Biddle calls, Petraus’ new bottom-up approach in Iraq in addition to the top-down model that U.S. had hitherto followed. The top-down apporach aimed exclusively at controlling the security situation in Baghdad in order to create the politcal space for a power-sharing compromise. “Petraus has decided to do this (stabalize the country) retail, as opposed to imposing a wholesale formula from the top.”

The new approach involves cutting bilateral deals with every local faction – and Biddle counted 20 main ones – under which the U.S. gives them the following option: Either stop shooting at us and, in return, we will not only let you keep your arms but also place U.S. troops in your neighborhood to protect you from your enemies. Or, if you decline, we will raid your homes, take away anything that you can possibly use to defend yourself. “And, once we are finished, guess what your enemies across the street will do to you.”

“We have to counter existential stakes with existential stakes,” Biddle notes. “We can’t convince them to lay down their arms for three hours more of electricity a day.”

If the U.S. had the troop strength and the resources to fully implement both the top-down and bottom-up approach simultaneously, then U.S. prospects of succeeding would be better than the one- in-10 odds that Biddle gives them. But that would require nothing short of reinstituting the draft – a political impossibility. So sooner or later General Petraus will have to decide to give up one or the other.

In the end, Biddle noted that the administration’s strategy of maintaining current troop levels was rational – and CATO Institute’s strategy of getting out now was rational. Everything else was irresponsible or wishful thinking.

But these choices themselves testify that Iraq is a tar baby the U.S. never should have grabbed. Thank you President Bush!

The AP reports today that Comcast is blocking large volumes of traffic headed for peer-to-peer networking sites such as BitTorrent, eDonkey and Gnutella. Expect the net neutrality crowd to make this story a touchstone in their call for Internet regulation.

I hope they read the whole thing through first. For starters, Comcast’s right to control traffic on facilities it owns are recognized by even those critical of the blocking, tacitly conceding that any regulatory countermeasure would indeed infringe on Comcast property rights.

Neither is it zero sum. While the tone of the article suggests blocking is not in spirit with Internet custom, the author, Peter Svensson, recognizes that while aggressive, the traffic Comcast is “managing its network to keep file-sharing traffic from swallowing too much bandwidth and affecting the Internet speeds of other subscribers.”

This is a critical point, because it sets out the downside of any proposed regulation—that attempting to preserve the “right” of a tiny minority to use as much bandwidth as they want without technical check could result in congestion problems for everyone else. While some say the common good is served by network neutrality, there’s still valid evidence to suggest the opposite. Let’s not get carried away.

“Internet service providers have long complained about the vast amounts of traffic generated by a small number of subscribers who are avid users of file-sharing programs. Peer-to-peer applications account for between 50 percent and 90 percent of overall Internet traffic, according to a survey this year by ipoque GmbH, a German vendor of traffic-management equipment,” writes Svensson.

Also, the context here is all technical. Much of the network neutrality opposition has gone into high dudgeon about freedom of speech. Comcast is not censoring political or social views, it’s taking steps to protect its network. That’s why we still need to be careful about how regulations are crafted to serve this end.

Comcast’s communications have been better in this regard. But there is no abuse of consumers here.

Earlier this week, France's transit workers went on strike. Guess what? Not much happened in terms of traffic and congestion. The Washington Post speculates that it's because most people took the day off.

While the strike virtually immobilized public transportation -- only 10 percent of the Paris Metro system was running, and only 46 of France's 700 high-speed trains were in operation -- the country escaped the mass chaos that many had predicted. Some city residents speculated that Parisians, warned of the possibility of huge commuting delays and virtually no public transportation, simply decided to take the day off.

Perhaps another reason is that most Parisian's don't use transit! They drive.

Wendell Cox has put together a nice summary of the demographics, economics, and transport of the Paris region, and its available at http://www.demographia.com as part of his rental car tours.

Wendell points out that transit is crucial to transport in the city center, where population densities rival Manhattan's at 53,000 people per square mile. The Ville de Paris (our equivalent of a central city) houses about 20% of the region's population.

But, outside the Ville de Paris, development is lower density and suburban in character. Inner ring suburbs average about 17,500 people per sqare mile, enough to support good bus service by not high quality rail service. In the outer ring suburbs (the most recently developed), densities average 4,500 people were square mile. These densities are comparable to America's newer suburbs in the West and Southwest, and the automobile rules.

Indeed, Wendell notes, Parisians may have access to the most well developed system of roads and freeways in Europe. Overall, about three-quarters of travel in the Paris region is by car.

Courtesy, the South Asian Journalists Association (SAJA), here is an interesting story about intellectual property enforcement gone amuck:
It seems that Penguin books and Harry Potter author JK Rowling won't be collecting $50,000 from a Durga Puja (Durga is a Hindu goddess and Puja means prayer) committee in Calcutta. A court threw out their claim of copyright infringement over a (huge) unauthorized replica of the Hogwarts school for wizards, constructed for the Hindu festival. The images (that can be viewed on Reuters) show the mockup (pandal) on the left and the actual, film version of Hogwarts on the right.

From a Daily Mail (UK) article on the decision:
Organisers of the festival in Calcutta said they were 'overjoyed' after claiming a court ruling allowed the hybrid Hindu-Potter festival to take place without any compensation payment. The community's lawyer, Ghose Chaudhuri, said: "The court has given us permission to use the Pandal (the structure) and whatever has been made till the 26th of October, no compensation has been directed to be paid."

From a BBC article, prior to the decision:
Members say that they make a different model every year - in the past they have built the Titanic. This year they chose Hogwarts School - as well as life-size models of Harry Potter and his friends. Organisers said a mock steam engine train is also being constructed next to it, to resemble Hogwarts Express. Correspondents say the construction is nearing completion and is expected to cost around 1.2 million Indian rupees ($30,000). But it is argued that the organisers did not seek permission, and so are being sued for breach of copyright.
I've been in Kolkata during Puja (when it was still Calcutta) and saw some of the more outlandish modern themes used for pandals - I vaguely remember a huge Rambo towering over us. These are scattered all over the city, along with more traditional takes on the festival.

Check out the 2 comments that follow the Daily Mail article - both from English readers:
I think this has taken Rowling down a few pegs in my estimation. The sheer greed, of someone who has millions, in trying to claim £25,000 from a simple religious non-profit making festival, is beyond belief. - Jennifer Thomson, Manchester England

Of course it is vital to both Rowling and Warners to get the money in from this type of thing to keep the franchise going. A few hundred million is never enough. What's next? Charging the kids for walking around as Harry Potter on Halloween? - Freddie, Dorset, England

More on Durga Puja at Wikipedia:
During the week of Durga Puja, in the entire state of West Bengal as well as in large enclaves of Bengalis everywhere, life comes to a complete standstill. In playgrounds, traffic circles, ponds -- wherever space may be available -- elaborate structures called pandals 'are set up, many with nearly a year's worth of planning behind them. The word pandal means a temporary structure, made of bamboo and cloth, which is used as a temporary temple for the purpose of the puja. While some of the pandals are simple structures, others are often elaborate works of art with themes that rely heavily on history, current affairs and sometimes pure imagination. Somewhere inside these complex edifices is a stage on which Durga reigns, standing on her lion mount, wielding ten weapons in her ten hands. This is the religious center of the festivities, and the crowds gather to offer flower worship or pushpanjali on the mornings, of the sixth to ninth days of the waxing moon fortnight known as Devi Pakshya

Just in case you were worried the private housing market might have a chance at coming back, LA's mayor has proposed an inclusionary zoning ordinance that would target "affordable housing" for lower income and middle income households. Apparently, housing costs have skyrocketed to the point only the rich can buy a home, so the goverment is coming to the rescue.

Villaraigosa said the proposal was necessary to address a housing crisis that has made it difficult for even middle-income families to afford a home, chipping away at the very workforce that stabilizes the local economy.

Of course, no one's asking the real question--if the demand for affordable housing is so great, why isn't the private sector responding? One obvious barrier is regulation. Now, to provide incentives to the private sector, Mayor Villaraigosa is willing to selectively deregulate the housing market for privileged developers:

Acknowledging that his plan could scare off some developers, Villaraigosa said he would try to help projects stay cost-effective by offering incentives, such as giving builders the right to construct more units or to set aside less space for parking. Villaraigosa's aides said they were still debating whether the plan would apply citywide or just along mass transit corridors.

What is striking about this approach is how closely it resembles fascism. Not the genocidal kind of Hitler, but the Moussolini kind that strived to get the "trains to run on time". Essentially, the housing market remains technically in private hands but is regulated to achieve collective goals and values. Apparently, this is okay with some LA developers:

"It's time," said Greg Vilkin, president of MacFarlane Partners, a prominent development firm that helped organize the summit. "We have to put the public's good in front of everyone's gain. It's time for everybody to take a little pain."

It just goes to show you that Atlas Shrugged is as relevant today as it was in the Cold War.

USA Today is reporting that covert tesitng at Chicago O'Hare, LAX, and San Franisco airports found 60% of fake bombs got through the TSA screeners. But, it's worse than that. More than three quarters of the fake bombs and bomb parts got through screeners at LAX. Just 20% got through at San Francisco. Guess what? The SF screeners are private contractors!

"The failure rates at Los Angeles and Chicago stunned security experts," USA Today reported.

Twenty percent is still a lot, but its a lot better than the government screeners. Perhaps it has something to do with accountaibility? The private contractors lose their jobs. Government screeners are sent to retraining workshops.

Also, the 20% rate for the private contractor is lower than the rate when TSA took over security screening. So, performance has fallen since the government takeover.

USA Today reports:

A report on covert tests in 2002 found screeners failed to find fake bombs, dynamite and guns 24% of the time. The TSA ran those tests shortly after it took over checkpoint screening from security companies.

Tests earlier in 2002 showed screeners missing 60% of fake bombs. In the late 1990s, tests showed that screeners missed about 40% of fake bombs, according to a separate report by the Government Accountability Office, the investigative arm of Congress.

The recent TSA report says San Francisco screeners face constant covert tests and are "more suspicious."

Suprise, surprise.

Interesting article in the WSJ on the competition between waste truckers and railroad companies for business from local governments. As Reason has pointed out before, there are lots of contract controls that ensure private delivery is safe. However, this shows that there is a cost to this.

Mr. Celli's facility in Garfield, N.J., compiles and transfers garbage bags of household waste, tree limbs and other debris to long-haul trucks headed to Pennsylvania landfills. His company, a subsidiary of Highstar Waste Holding Corp., a closely held company based in Sloatsburg, N.Y., must comply with requirements set by state and local authorities. Those rules cover such matters as odor control, water runoff and background checks for connections to organized crime. Mr. Celli says complying with those and other rules costs him money that his rival doesn't have to spend.

...

Mr. Celli's frustration stems from a dust-up in the waste industry that's pitting established companies against a new breed of competitor. In recent years, small railroads known as short lines have begun setting up facilities for collecting, sorting and packing mainly construction debris into gaping 100-ton rail cars.

Under longstanding federal law, railroads big and small are exempt from zoning ordinances and other state and local regulations that could hinder interstate commerce. But as landfills have consolidated over the last 20 years, densely populated Northeastern states increasingly are exporting their waste to the Midwest and Southeast. Railroads have become a conduit for moving the stuff long distances; the number of rail cars hauling waste has grown almost 40% since 2000, according to the Association of American Railroads.

While the competition for local garbage contracts is surely a good thing, if this only occurs because of government exemptions that apply to specific industries at the cost of safety controls in contracts I'm not sure if the ends justify the means.

The Nobel went this year to the guys that build the mechanism design house. Deserved, I think, because their work has advanced economic analysis in many ways. But like a lot of modern economic theory, it is a two edged sword. Mechanism design can improve policies, as with a lot of European privatization of state-owned enterprises, or it can lead to hubris, where designers forget that the models are still abstracted from reality, as in the disastrous structure of electricity restructuring in California in the 90's.

Mechanism design is a tool, you have to use it right for it to work, and you have to recognize its limitations.

That said, Pete Boettke from George Mason has a nice column in the WSJ on the Hayekian roots of mechanism design and the Nobel winners.

Last week, Reason's Sam Staley debated sustainable transportation policy with Todd Litman of the Victoria Transportation Institute at Colby College's Goldfarb Center for Public Affairs and Civic Engagement. Todd started out his presentation by asking the teenage and twenty-something audience to envision paradise, and whether they aspire to live in a suburb. Sam responded by saying he lives in the real world where trade offs have to be made, and a suburb is where he ended up. Transportation policy needs to apply to the real world, not abstract ideas that don't reflect the way people live.

The debate was podcast, and you can listen to it by clicking here.

In the first video of the Drew Carey Project at Reason.tv, Drew takes a look at the sorry state of congestion in America's urban areas. And at the ways to get rid of congestion if we just had the political will. It is serious and entertaining, as he gives the guy with the worst commute in Los Angeles a ride to work in a helicopter-----once.

Watch the video here.

In what has become an all-too familiar national trend, Oregon lawmakers are angling to expand children's health coverage with a tobacco tax increase. A new Reason Foundation policy brief raises serious questions about the tax proposal, Measure 50, which would break precedent by asking voters to approve the tax as a constitutional amendment on the November 6 special election ballot--thereby avoiding the three-fifths majority vote that supporters failed to raise in the legislature earlier this year. As always, the uncomfortable paradox of taxing nicotine addicts to fund children's programs should be evident: how many of today's children will need to smoke to make sure that tomorrow's children have health coverage?

In a recent editorial in The Regal Courier, Cascade Policy Institute senior analyst Steve Buckstein predicts:

Measure supporters will find themselves torn between two conflicting goals. Fewer smokers will make supporters happy, while less money for kids’ health insurance will make them sad, or will it? The unspoken truth here is that once the Healthy Kids Plan is in place, it may make no difference to supporters whether there is enough tobacco tax money to fund it or not. Any shortfalls simply will lead to cries for other funding sources to feed a program that by then will be firmly embedded in our state’s bureaucratic infrastructure.

For those wishing the car would just go away, India has a surprise: Tata motors is going to be selling the "People's Car" for just $2,500.

Next fall, the Indian automaker Tata Motors is scheduled to introduce its long-awaited People’s Car, with a sticker price of about $2,500. Hot on its tail may be as many as half a dozen new ultra-affordable vehicles — some from the world’s leading carmakers, including Toyota and Renault-Nissan.

India is expected to overcome China next year as the world's fastest growing car market, according to the New York Times.

To tap that emerging market, automakers are starting to respond to Indians’ desire for small and cheap cars. As a result, car companies are coming up with new ways to develop and build automobiles worldwide.

Unfortunately, planners in India and China are more focused on providing transit than planning for the emergence of the auotmobile. Can you say "congestion"? They ain't seen nothin' yet.

In what has the makings of an annual event, yesterday Gov. Schwarzenegger vetoed legislation which would have allowed some farmers and researchers in California to grow industrial hemp. The Governor's veto message for AB 684, the California Industrial Hemp Farming Act of 2007, contained no statements that he had not made verbatim in his veto of last year's Act, AB 1147. He still cited not wanting to give farmers a "false sense of security" as his top reason for vetoing the bill, which was sponsored this year by Assembly Members Leno, DeVore, Adams, Beall, Berg, Huffman, and Saldana, and Senator McClintock, and supported by such groups as the California Certified Organic Farmers, Community Alliance with Family Farmers, Imperial County Farm Bureau, Merced County Farm Bureau, and the Yolo County Board of Supervisors. Unfortunately, a "false sense of security" isn't the only sense the Governor seems intent on eliminating.

One notable difference was that this year's veto message did not include a statement that the Governor made last year:

In the future, I would encourage the Legislature to work with state and federal law enforcement agencies to craft a measure that would reduce the burden on law enforcement agencies and would comply with federal law in order to avoid the unnecessary prosecution of unwitting individuals in this state.

That statement may have been what gave lawmakers the idea that their revised bill, which was scaled down to a tightly regulated five-year pilot program in just four counties, might win the Governor's support. Yesterday's veto directly contradicts the Department of Justice analysis of AB 684, which concluded that the fiscal effect of the bill would be "minor and absorbable" and would not create a "hemp defense" for marijuana growers. According to the California Narcotic Officers' Association, which led opposition to the bill, their officers would still have trouble telling the difference between hemp and marijuana--it's disappointing that the Governor didn't offer to help clarify the practical distinctions.

A judge at Britain High Court is poised to rule that Al Gore’s magus hokum on celluloid – The Inconvenient Truth – is “political propaganda” and “brain-washing.” Hence, British schools can only assign it with accompanying warnings alerting children that it is “one-sided” and “biased.”

The judge, who will formally announce his decision next week, reportedly has identified 11 counts of flat-out lies and exaggerations in the movie. Among the lies: The snows of Mount Kilmanjaro are melting because of global warming. Among the exaggerations: Al Gore claims that sea-level rise of up to 20 feet would be caused by melting of either West Antarctica or Greenland “in the near future”. The judge found that, at best, this would happen after, and over, millenia.

Let’s just hope that the opinion is not too late to derail Al Gore’s prospects of winning the Noble Peace Prize to be announced tomorrow.

Read the full story here: http://www.timesonline.co.uk/tol/news/uk/science/article2632660.ece

Reason has launched reason.tv, where we plan to bring you the latest, most compelling stories about policy issues and freedom from all corners of the Internet, and we'll be experimenting with new interactive content and features.

It's already very cool, and we have only just started.

A new report released by the Federal Transit Administration examines the performance of 21 transit projects ranging from guided busways to rail projects. While we're still culling through the 211 page document, two things seem to stand out:

1. Transit projects have become better at forecasting costs, although they still tend to be over budget;
2. Most projects fall well short of ridership projections.

Even those projects that meet ridership projections tend to meet their targets by setting low expectations to begin with. Salt Lake City, for example, projected just 23,000 average weekday boardings, far below the 35,000 or more typical of projects proposed in the 1970s and 1980s.

We'll be reporting more on this as we get through the report.

Interesting article in the NYT linked by Matthew Kahn of UCLA. The article really reinforces how much investment is needed in water infrastructure.

Merely maintaining our water systems will cost $274 billion over the next 20 years, according to the E.P.A. Upgrading our water supply to eliminate all public health risks from chemicals and microbes in our drinking water would be far more expensive.

The largest single consumer of water in most cities is not a consumer at all. Water pipes, often more than 100 years old, leak millions of gallons per day in every major city in the United States.

Bill Leonard, on CA's Board of Equalization writes:

The Governor is proposing to sell off two California government departments because they are really businesses. That is, they make money on their own, and whatever services they perform the public can choose whether to use them. Both the Ed-Fund, which is a bank making loans to college students, and the State Lottery, which is a government run casino, are the kind of entities government should not be running

I propose another that meets these same standards and should thus be privatized: the University of California. UC is also a business that competes with the private sector (USC, Stanford) and it makes tons of money with its high tuition charges and patents on its inventions, as well as Federal contracts (like Halliburton and Blackwater). Certainly with a mandate to only admit the top 12% of the high school class it does not serve even a majority of Californians. Given the recent headlines of corruption, mismanagement, lack of oversight and violations of academic freedom, UC really should be reconstituted away from state government. As a charitable educational institution it would then be subject to Franchise Tax Board audits just like the private college and universities are now.

We could save millions of taxpayer dollars by this privatization and if someone really wanted to buy the headache, we the people might be able to break even.