Thursday, December 31, 2009

2009 Predictions Revisited

Prediction is very difficult, especially about the future.
-- Niels Bohr
It's that time of year again; time for me to give my predictions a reality check and to once again learn that I'm overconfident.

Jonathan scores me 2 out of 8; I think I deserve a score of 5.5 out of 10. Here's how I figure it:

I got 2 things 100% right:

6. General Motors will declare bankruptcy after getting billions more dollars of bailout money.

I wouldn't have predicted that we'd STILL be giving GM money AFTER they declared bankruptcy, but just today the news is that GMAC, the financing arm of GM, is getting $3.8billion more in bailout money.

9. Lance Armstrong will not win the Tour de France again.

Maybe he'll win the 2010 Tour.

Completely wrong about these 3:

1. Oil prices will continue to be wildly volatile; oil will cost more than $100 per barrel again on at least one day in 2009.

They were volatile, but didn't get much above $80 per barrel.

7. Now that Home Depot is open, Rocky's Ace Hardware in Hadley and Leader Home Center in Amherst will close in 2009.

Nope, both still open.

10. I'll only get 7 of these 10 predictions right.

By my count, if I'd got one more completely right, this one would've been correct, too. (I was really hoping to get exactly 7 of the other predictions right, in which case the tenth prediction would be neither right nor wrong, but would be a logical paradox).

Too soon to be sure, but I was probably wrong:

3. The economic recession will last through the entire year.

Unemployment is still high, and they keep revising the GDP numbers down, and the National Bureau of Economic Research hasn't yet said that the recession is over, but I predict that I'll be wrong on this one.

I'd give myself full credit for these three:

4. Conservatives will claim that the stimulus is causing the recession to last longer.
5. Progressives will claim that without the stimulus we'd be in the Second Great Depression.

Jonathan thinks those don't count as predictions, since that's what conservatives and progressives were saying BEFORE the stimulus passed.

8. Mark's Meadow school in Amherst will be closed.

I think I got this right; the school committee did vote to close the school, and it will, barring a miracle, be closed after the 2009-2010 school year ends.

Stuff I got half right:

2. Congress will pass, and Obama will sign, an economic stimulus package larger than $900 billion.

I think I should get half-credit for this one; the stimulus did pass, it was just 13% smaller than I expected ("only" 787 billion dollars).

What's going to happen in 2010? I dunno. My crystal ball isn't very reliable; I think I'll try reading tea leaves (organic, fair-trade, of course) this year.

Tuesday, December 22, 2009

The health insurance deal

So the deal is roughly -- the government will guarantee that I can buy catastrophic coverage for my family for 2% of income with a annual deductible of 8% of income? I don't think that is anything close to what Democrats intended, but maybe that's not so bad. How far would that be, really, from the libertarian preference for catastrophic insurance combined without out-of-pocket payments for normal medical expenses? -- Slocum in the comments at Marginal Revolution

The press has been focusing on the details of the health care bill, and the political deal-making and drama. The emotional, moral side of me is angry that Nebraska gets a special sweetheart deal because one of it's senators was a key vote. The rational part of me knows that in the long run that type of thing doesn't really matter, and also knows that the only way to prevent that type of thing from happening is to change the incentives, which means changing the system.

If the health care bill makes it through the House/Senate reconciliation process and becomes law, what incentives will change?

Here's a thought experiment: imagine you're a self-employed person making $60,000 per year. Under the new health plan, if you don't buy health insurance you're fined 2% of your income-- $1,200 per year.

Since you can't buy health insurance for $1,200 per year, you don't -- instead you just pay the fine and pay for any minor health expenses as the come up.

If you get something serious, you sign up for health insurance and let your insurance company pay. They have to take you because they're not allowed to exclude people with pre-existing conditions.

So: what does that do to the overall cost of health care? I think it will actually push costs down. Lots of young, healthy people will all be paying for everything but catastrophic health care costs out-of-pocket. They'll be cost-conscious.

What will that do to the health insurance companies? It will drive up their costs; we'll end up with a weird system where healthy people pay 2% of their income plus actual medical costs. And sick people pay 8% of their income in health insurance premiums, with the government subsidizes costs above that. There will be an incentive for sick people to make as little income as possible ("do I want to pay 8% of $50,000 or 8% of nothing?"). And there will be some unintended consequences; I predict you'll see a lot more sick people getting divorced (or not getting married), so their spouse's income isn't counted.

Will it be better than the system we have now? I don't know. I think it depends on what happens to the majority of people who get their health insurance through their employer. I'd like to see more details on what the employer mandate looks like; if employers have to pay up to 8% of income for a young, healthy employee, but that same young, healthy employee would only have to pay 2% of income if they were on their own, then that's an incentive for young, healthy people to work for themselves.

Maybe we'll accidentally create a whole generation of entrepreneurs...

Wednesday, December 02, 2009

Kookaburra Copyright

Kookaburra sits in the Old Gum Tree...
I'm playing with fire here; the Kookaburra song is still copyrighted. I'm pretty sure quoting the first line for non-commercial purposes would qualify as "Fair Use", but I woulda thunk that using it in a pop song was Fair Use, too.

Apparently, no. "Men At Work" are being sued, 28 years after putting half the Kookaburra song (just the tune, not the words) in the "Down Under" song. You know, the one with the line "She just smiled and gave me a vegemite sandwich."

Mmmmmm...... vegemite......

(Vegemite® is a registered trademark of the Kraft Foods Corporation. All Rights Reserved.)

Anyway, the idea behind copyright is to encourage people to create stuff by giving them a monopoly on the right to that stuff. Copyright used to last 14 years, plus another 14 years if the creator was still alive and bothered to register an extension.

I think we'd be better off with that old law. Men At Work wouldn't be sued for using the Kookaburra song (which was written in 1934, so the copyright would've been long expired). In fact, the Down Under song would be in the public domain and a whole new generation of pop stars would be free to rework it to create something new.

I suppose the danger is that if everything created before 1981 was in the public domain we'd buy less new stuff and get more old music (or movies or books...) for free. But I don't think that would happen. I think we would get more old stuff, but we'd also spend exactly as much money as we do now on new stuff. And pop stars would end up a little bit richer, because they wouldn't have to quite as much money defending themselves from ridiculous copyright lawsuits.

Saturday, November 28, 2009

What Happened to Tiger

Tiger Woods crashed his car, and hasn't told us why.

Here's my completely made up hypothesis for what happened:

After spending a couple of weeks in Australia and China, his sleep schedule is all screwed up. So he was headed out at 2AM to find some lunch.

And because he'd done some driving on the wrong side of the road in Australia, he drifted way too far to the side of the road and clipped a fire hydrant.

We're heading home to Amherst about a week from now. I'm going to try hard not to "pull a Tiger"; I'll resist going on any middle-of-the-night why-can't-I-sleep Dorito runs.

Sunday, November 22, 2009

Global warming is NOT killing turtles in Costa Rica

I was browsing around the web looking into some of the Climategate accusations and responses, and I ran into this chart on the Wikipedia sea level rise page:
This isn't a Global-Warming-Denier chart: "This image, created with sea surface height data from the Topex/Poseidon and Jason-1 satellites, shows exactly where sea level has changed from 1993 to 2008 and how quickly these changes have occurred."

Costa Rica is down near the Panama Canal, at the skinniest bit between North and South America. The turtles that the New York Times claims are being threatened due to rising sea levels are on the West coast of Costa Rica. And, at least in the last 15 years (the Topex/Poseidon satellite was launched at the end of 1992, so 1993 is the first full year of data), sea levels there have NOT been rising.

Friday, November 20, 2009

Pledging Allegiance

So I read in Catherine Sanderson's blog that it's illegal for Massachusetts schoolteachers not to lead their classes in the Pledge of Allegiance.

It's not WAY illegal-- the punishment is a fine "not more than $5." (makes me wonder: who sets the fine? Could Amherst decide to fine Pledge-negligent teachers a penny?)

Most of my elementary schools (I'd attended six by the time I was in sixth grade) started every morning with the Pledge, and I remember starting to be bothered by it when I was around 12 or 13 years old. I was born in Australia, was an Australian citizen living in America as a permanent resident.

So I stopped saying the words.

I wonder: do public schoolteachers in Massachusetts have to be US citizens?

I'm a US citizen now, but I'm still not gung-ho on the Pledge of Allegiance. Expecting kids to say words they're too young to understand year after year seems like a blatant attempt at brainwashing. The "Under God" part bothers me a little (it was added during the McCarthy era to help battle the Godless Communists). It kinda bothers me that it was written by a Socialist, and it amuses me that it used to be performed with a Heil-Hitler salute.

But in the grand scheme of things I don't think it matters much. It's about as relevant as prayer in schools. Robin and Will have two more weeks of school here in Australia, which means two more all-school assemblies where everybody stands up and sings "Advance Australia Fair." They don't have a Pledge here, but there's still plenty of Australian Patriotism. They'll also have two more religion classes in school (everybody gets to choose to go to Catholic, Protestant, or None of The Above every Wednesday), but I haven't noticed any more church attendance here than in the States.

Saturday, November 14, 2009

Is Global Warming Killing Turtles?

"Turtles Are Casualties of Warming in Costa Rica" is the title of a recent New York Times article.

Reporters and environmentalists and climate-change-deniers all like to cherry-pick evidence to support their article or point of view. Hotter than average summer? Must be global warming! Cooler than average summer? Global warming must be bunk! Leatherback turtles dying? Global Warming! Atlantic turtles thriving? See! Not Global Warming!

They're all wrong, of course. Nature is usually complicated and messy.

Anyway, back to the turtles: as usual, the headline is more sensationalistic than the article. The article says:
...haphazard development, in tandem with warmer temperatures and rising seas that many scientists link to global warming, have vastly diminished the Pacific turtle population.
I agree that the headline "Turtles Are Casualties of Development and Maybe Warming" isn't as catchy. The article goes on to talk about how turtle nesting habitat is being destroyed by hotels and increasing population and how people used to freely dig up the nests and eat the eggs (and still do, illegally).

Maybe my contrarian-bias is shining through, but a little research into how global warming will affect leatherback turtle habitat made me more optimistic about the turtles' chances:
We used long-term satellite telemetry to define the habitat utilization of this species. We show that the northerly distribution limit of this species can essentially be encapsulated by the position of the 15°C isotherm and that the summer position of this isotherm has moved north by 330 km in the North Atlantic in the last 17 years. Consequently, conservation measures will need to operate over ever-widening areas to accommodate this range extension.
-- Thermal niche, large-scale movements and implications of climate change for a critically endangered marine vertebrate
It seems like the authors of this paper are taking a very positive piece of news (that global warming is expanding the range of an endangered sea turtle) and putting a negative spin on it (conservation efforts will have to be spread out over a larger area).

They probably didn't want the Wall Street Journal to run an article with the headline "Turtles Benefit from Global Warming."

Tuesday, November 10, 2009

Flu vaccine costs and benefits

I was surprised to find out that getting a seasonal flu shot isn't the slam-dunk, you're-dumb-if-you-don't-do-it decision that I assumed it was.

I think I was confounding what I know about childhood vaccines (which are a don't-be-an-idiot-and-just-get-them kinda thing) with the flu vaccine. There are good discussions on the Overcoming Bias and Science-Based Medicine blogs, prompted by an article in Atlantic Magazine.

I'm not really concerned with the big public-policy debate over whether or not the H1N1 and/or seasonal flu vaccines save lives (or whether they save enough lives to justify the cost of a public vaccination program). For me, this was the key sentence in the Atlantic article:
Studies show that young, healthy people mount a glorious immune response to seasonal flu vaccine, and their response reduces their chances of getting the flu and may lessen the severity of symptoms if they do get it.

I HATE having the flu; I'd much rather spend 2 hours waiting in line than 2 hours of having the flu. In fact, I'd give it about a 3-to-1 ratio; I'd spend 3 hours waiting to get the flu shot to avoid 1 hour of being sick and miserable.

Now the flu vaccine isn't 100% effective. And I'm not 100% guaranteed to get it. So the cost/benefit calculations get a tiny bit tricky; here's what I figure, before factoring in my preference for waiting in the doctor's office to lying feverish in bed:

Cost of getting H1N1 : ~5 days (120 hours) of misery
Cost of getting vaccinated : 2 hours of my time
Chance of catching H1N1 : 20%
Effectiveness of vaccine: 50%
Cost/benefit ratio is : 2*(1/.5)*(1/.2) / 120 = 1 / 15

So the H1N1 vaccine is a clear winner from a cost/benefit point of view. The numbers for the normal seasonal flu are different:

Cost of getting season flu: 120 hours of misery
Cost of getting vaccinated: 1 hour
Chance of getting the seasonal flu: 2%
Effectiveness of vaccine: 20%
Cost/benefit: 1*(1/.02)*(1/.2) / 120 = 250 / 120 or about 2 / 1

Most years it is quicker to get a flu shot, and most years only about 1% of the population gets the flu (I doubled my chances because the kids pick up pretty much anything going around). But most years they have to guess about which strain of flu will be going around, and they often guess wrong.

The 2/1 cost/benefit result surprises me. If I valued an hour spent sick in bed the same as an hour waiting in a doctor's office then the seasonal flu shot probably doesn't pass the cost/benefit test. I'm going to keep getting seasonal flu shots because I'm a big baby and really don't like being sick.

I haven't factored in the fact that even if the flu shot doesn't prevent me from getting the flu, it might help me recover faster. Then again, I haven't factored in the fact that I might catch a cold or another virus from somebody waiting in line with me to get a flu shot...

Saturday, November 07, 2009

Swap Houses and Profit!

Can anybody point me to a respected economist (meaning one who isn't employed by the National Association of Realtors/Homebuilders) who thinks that extending the first-time-homebuyer tax credit is a good idea?

It's a bad idea on so many levels. Its regressive (homeowners are richer than the average taxpayer), its environmentally-unfriendly (homes are less efficient than apartments), and it does nothing but create artificial demand for a product that people have said they don't really want.

And in the latest incarnation it seems way too easy to game the system.

We've owned our house for more than five years, so if we sell it and buy another we'd qualify for the $6,500 existing homeowner tax credit.

It's awfully tempting to find somebody else who owns a similar house, and then swap houses. I sell to them, they sell to me, and we each pocket $6,500 dollars. If we were 100% honest (or worried about the IRS doing bed-checks) we'd actually pick up and move.

Maybe transaction costs on selling a house are high enough that this won't actually happen, or maybe the law is written so doing this is illegal.

But given the amount of fraud that happened the first time around, I bet there will be a lot of house swapping going on in the next year.

Wednesday, November 04, 2009

Stupid google

The Happy Kamper points to a funny Slate article about Google's auto-suggest feature. Turns out if you talk pretty, you get fancy suggestions. And if you don't, you get suggestions about growing weed or Jon and Kate.

The phrase "stupid is as stupid does" immediately sprang to mind. Ask Mr. Google to suggest queries starting with "stupid is" and here's what you get:

I like the irony of people asking "stupid is as stupid does what does it mean" ...

Sunday, November 01, 2009

Education Reform: Lessons from the UK

The Center for American Progress (a lefty think tank) organized "an insightful conversation about the community schools strategy and how federal policy can encourage the growth of community schools across the country" a few days ago. You can watch the whole thing on their website (or you can get just the audio by subscribing to their events podcast, which is where I heard it).

If you have the time and you're interested in education policy I'd highly recommend watching or listening to the first 40 minutes or so where Tony Blair (former Prime Minister of the UK) describes how his administration successfully reformed the UK public school system. He says that we actually do know what needs to be done to make the education system better; it's just really hard to do. I agree.

I'm going to cherry-pick a few things that I didn't think I'd ever hear a leader of a center-left political party say; listen to his whole talk for the proper context:
  • The teacher's unions are a challenge; they must be a partner, but must not be given veto power over reforms.

  • Successful schools have an identity-- an "independent ethos" -- and everybody involved feels pride in the school. That requires strong leadership at the school. Academy schools (charter schools in the US) are one way to get that strong identity. Extended schools (community schools here) are another way; they become the hub for the whole community.

  • Bad teachers shouldn't be teaching. Fire them.

  • Bad schools shouldn't be tolerated. And "coasting" schools are a big problem, too. Track performance and act fast.

  • Structure matters; set up non-bureaucratic, decentralized structures and give them support, but throw the system open to new providers and new ideas.

Tony Blair may have been astoundingly wrong for supporting the US-led invasion of Iraq, but he is absolutely right about how to reform education.
Between 2001 and 2005 what Blair increasingly hankered after was a way of improving the education system that didn't need to be constantly driven by government. He wanted to develop self-sustaining, self-improving systems, and that led him to look into how to change not just the standards and the quality of teaching, but the structures and incentives. Essentially it's about creating different forms of a quasi-market in public services, exploiting the power of choice, competition, transparency and incentives, and that's really where the education debate is going now.
--Sir Michael Barber (this whole interview is interesting)
After Mr. Blair's talk he and Arne Duncan (current US Education Secretary) sat down and had a conversation about community schools. I'm cautiously optimistic that the Obama administration might actually implement some real, effective reforms, but real reform would require changes on the local, state and federal levels.

Unfortunately, I don't think the Center for American Progress gets it. They are very excited about the "community schools" concept (extending the school day to better serve students and parents and making the schools the center of delivery of all sorts of social services), but don't talk at all about avoiding heavy-handed central bureaucracies or allowing new providers to inject fresh ideas and energy into our 19'th century, designed-for-the-agrarian-economy public school system.

Wednesday, October 21, 2009

Article 14

Should Amherst Town Meeting:
1) Urge Congress to repeal the ban on releasing cleared [Guantanamo] detainees into the United States and
2) Welcome such cleared detainees into our community as soon as the ban is lifted
I'd say No, and Yes.

"No" because I'm a big fan in individuals standing up for what they believe in. Not so much for a group of people to get together, vote, and then pretend that just because a majority of the people voted a certain way EVERYBODY agrees. Or, worse, that a whole town agrees.

Yeah, yeah, I know, it's a grand Town Meeting tradition going back hundreds of years to express collective opinions on all sorts of issues. There are lots of grand old traditions that I disagree with ("marriage is for a man and a woman," for example).

"Yes" because if they've done nothing illegal then they should be free. I might not invite them over to dinner, so "welcome" might not be exactly the right word, but there are lots of people who live in Amherst already that I wouldn't invite over to dinner-- religious zealots of all flavors, obnoxious frat boys and 9/11 truthers spring to mind.

Tuesday, October 20, 2009

I'll miss Zone-A-Palooza 2009

Fall Town Meeting starts up in a couple of weeks, and I'll be unable to attend. I couldn't resist looking through the warrant, though.

There's a lot of stuff in there; 23 pages of mostly zoning changes. Lots of reasonable changes to Amherst's crazy zoning laws (including things that seem obvious to me, like saying that the surface area of a sign doesn't include the sticks you use to hold up the sign or that an office shared by two doctors is NOT the same as a "medical center").

I'm kinda bothered that the crazy zoning laws will get a little bit crazier; half of the warrant (12 pages) describes a brand-new zoning district ("Business-Neighborhood"). Do we really need another zoning district? We've got 15 already, including five different business districts. Maybe it's not completely crazy; Northampton's got 15 zoning districts, too; if the B-N zone passes, Amherst will be one better!

If I were at the TM vote on this, I'd probably abstain. I don't have any evidence that adding yet another zoning district would do any harm; maybe giving planners (and Town Meeting) lots of zoning options so they can pick exactly the right set of regulations for any given piece of land makes the Town a better place.

But I doubt it. I think making the zoning laws more complicated will just make lawyers richer and will decrease the number of people who understand what is allowed where. And will make Town Meeting even more annoying, as we all wonder "what's the difference between the B-N and B-VC districts?" for the seventeenth time.

Saturday, October 17, 2009

Just because he's got a Nobel Prize...

I've been reading Paul Krugman's blog for a couple of years now, but the more I read it the more skeptical I become of Professor Krugman's objectivity.

For example, on the topic of climate change he says:
We’re not talking about the ethics of sumo wrestling here; we’re talking, quite possibly, about the fate of civilization. It’s not a place to play snarky, contrarian games.
The fate of civilization? Really?

That's exactly the type of exaggerated rhetoric that makes my skeptical hackles rise.

Yes, global warming will likely disrupt the lives of millions of people around the world, and will likely cause local extinctions and permanent migrations. But saying that the "fate of civilization" is at stake makes about as much sense as neo-cons saying that terrorism is an "existential threat" to America.

It all makes perfect sense; the Right exaggerates the terrorism threat so we'll spend more money on the military (mission accomplished on that one!), and the left exaggerates the global warming threat so we'll spend more money on their favorite stuff.

Maybe Krugman doesn't even realize he is biased; in all the time I've read his blog he's certainly never even hinted that his political views might cause him to ignore opposing points of view, cherry-pick evidence or use rationalization to justify his beliefs.

Sunday, October 11, 2009

Call 000! Wait, no, don't call 000!

The US health system is screwed up because the incentives are screwed up. Doctors want to make as much money as possible. Insurance companies want to pay as little as possible. And patients want as much health care as possible.

The Australian health system is screwed up in pretty much the same way-- just replace "insurance companies" with "the government".

I see the evidence every day on TV here. The Queensland government is running public service announcements encouraging people think twice before calling 000 (the emergency services number in Australia):
Why? Because if you give people something for free some of them will abuse it. In college we had free rolls of toilet paper in the communal bathrooms, and people came up with all sorts of creative uses for them (computer monitor stand, toothbrush holder and, of course, halloween decorations). Give them free paramedic service:
Common minor complaints where QAS paramedics are called to attend
• minor cuts and abrasions
• tooth ache
• ear ache
• boils
• ant bite
• can’t sleep
• hungry

Does asking people nicely keep them from calling the paramedics when they're hungry? The ad campaign started in September of 2008, but they've got a funny way of figuring out whether or not it is effective:
The success of the campaign will be measured by Computer Aided Telephone Interviews (CATI) surveys conducted both pre and post campaign by Roy Morgan Research. The evaluation aims to measure shifts in attitudes towards calling Triple Zero (000) for an ambulance for non-serious issues.
Gee, wouldn't it be cheaper and more effective to just see if people call less? They're already measuring the number of non-urgent incidents per 1,000 population. Their target for June 2008-June 2009 was 51-53, which they missed-- actual was 56.

I bet the number next year is higher.

Tuesday, October 06, 2009

Defining away recession

Back in December, I predicted that the recession would last all year.

I should have thought more deeply about what economists mean when they talk about "recession." The standard definition is "two down quarters of GDP."

I didn't think about the definition of GDP. According to wikipedia:
The most common approach to measuring and quantifying GDP is the expenditure method:
GDP = private consumption + gross investment + government spending + (exports − imports)
Raise government spending, you raise GDP (by definition, assuming you're not crowding out private investment), and voila-- the recession is over! It's simple!

The government has been spending lots and lots of money, and yet unemployment continues to rise. I think it's time to either redefine "recession" or come up with a more relevant measure of how the economy's doing; the current definition make it way too easy for governments to game the numbers and declare "Mission Accomplished, Economy Back On Track."

Saturday, September 26, 2009

Unions aren't for Entrepreneurs

My position at UMass is covered by a collective bargaining agreement, so I got to experience firsthand what it's like to work in a union.

The experience wasn't pleasant-- I quit at the end of August, mostly because I want to take bigger risks to get bigger potential rewards, but at least partly because of the rigid, one-size-fits-all, stuck-in-the-1950's nature of the union.

I'll admit I was vaguely cynical about unions before working under one. They seemed like "socialism lite" -- the idea being that if the Workers of the Company Unite, then they will get a More Fair Share of the wealth that their Hard Work creates for the Greedy Capitalists who own the company.

I'm not sure what the story would be for unions at UMass; maybe "Workers Unite So We Get A Bigger Share of Taxpayer's Money" ?

Anyway, I was cynical because I have faith that free-market competition keeps the Greedy Capitalists in check, and any increases in wages or benefits that the union wins are just passed along to consumers (who are, in a 100%-unionized society, those very same union members) in the form of higher prices.

But I was just vaguely cynical because I thought maybe there was some productivity benefit to being in a union; maybe having a union bargain on your behalf lets you concentrate on doing your job, so you don't have to worry about raises or benefits or any of that stuff.

I was naive. I am now thoroughly cynical about unions.

Maybe if I was the full-time primary-breadwinner and Michele was a traditional stay-at-home-mom I would appreciate the job security and health benefits of the unionized job.

But I wasn't. I was working 24 hours a week and was already covered under Michele's health insurance.

Unions are progressive, so I kind of expected that maybe the union would support somebody like me who chose to work less to spend more time with their kids.

Maybe they would pro-rate union dues so that part-time workers paid less than full-time workers. Or maybe they'd have progressive dues, so that higher-paid techies (like me) would pay more than lower-paid secretaries.

Well... no. Dues is dues, and everybody pays the same, regardless of how much they make or how many hours they work.

Or maybe they'd work out a deal with UMass so that people who have health care coverage through their spouses could forgo duplicate coverage and get a share of the savings.

Well... no.

Or maybe they'd bargain so that the people who were the most productive were paid the most, so I'd be rewarded for doing a good job.

Hell no! During the state budget process I received a barrage of emails from the union encouraging me to contact my representatives and complain about proposals to increase merit pay at UMass.

But the thing that bothered me the most was the letter I received a while ago demanding that I either pay the union "agency fee" or be fired.

You see, I decided when I was hired not to join the union (yes, they put me on their lobbying mailing list nonetheless). Then, after working a year, I get a rather threatening letter, saying that I owed PSUMTA money because I'd decided not to join their organization.

"That can't be right," I thought to myself-- I've never heard of an "agency fee" and there was nothing in the employment contract with UMass about being required to pay the union. "Ignorance of the law is No Excuse!" -- so I did some digging in the Massachusetts General Laws, and learned that yes, indeed, if I wanted to keep my job at UMass I had to pay up.

According to the law, I wasn't supposed to get just a nasty-gram in the mail-- they were also supposed to send me information on exactly what the agency fee was for (they're not allowed to charge for any lobbying or political stuff that they do) and how to appeal it.

Unions are supposed to be looking after worker's rights, so it struck me as highly hypocritical of them not to follow the law as they threatened to have me fired.

Individually I found everybody I communicated with in the PSUMTA organization to be pleasant and helpful.

But collectively... it was like communicating with any other large bureaucracy. "I'm sorry, that can't be changed, it's just the way it is and it's been done that way for a long time."

Which, to my ears, translates as "We are the Borg. You will be assimilated."

Sunday, September 13, 2009

Florence Savings Bank Wins Again

I didn't realize how much I take money for granted until coming here to Australia. A lot of economic concepts like exchange rates affecting imports and exports are suddenly very real; while we're here, we're importing Australian stuff and experiences into ourselves, and paying for it with US dollars.

I performed a little experiment the other day to get a handle on another economic concept that's affecting me personally: transaction costs. Every time I move money from the US to Australia transaction fees are tacked on, and it's not easy to figure out who's charging what. Sure, your credit card company will tell you about any fixed fees, but how do you know you're getting a good exchange rate?

So I stood at an ATM machine and withdrew $150 Australian dollars from my Florence Savings Bank checking account and got another $150AUD using my SchwabOne visa card. Then I went home and calculated how much it would've cost me to move money from my US PayPal account to my Australian PayPal account (yeah, they have PayPal and Eby here down under), and checked my statements to see how much that $150AUD cost me in US dollars. Results:

$150AUD cost me $123.23USD via Florence Savings
$150AUD cost me $125.29USD via Schwab
$150AUD would cost $129.61USD via PayPal

So, my little local bank wins!

I got the Schwab visa card just to come to Australia, because it has no foreign currency cash advance fee (most credit cards do).

I was surprised PayPal was the most expensive option; their transaction fee is low ($1.50AUD), but their exchange rate isn't very good (or at least wasn't very good on the day I did the experiment).

Now, if only the exchange rate would start heading in the right direction...

Monday, July 27, 2009

Medicine down under

Australia has national health insurance (called "Medicare," but unlike US Medicare, it's for everybody, not just old folks).

Australia also has private healthcare and insurance; if you don't like the service you get from Medicare, and you've got the cash, then you can pay for treatment or private insurance. That's different from Canada, where doctors aren't allowed to accept payment from anybody besides the government.

How well does the Australian system work?

Well, if you believe the newspapers, not terribly well. I picked up a copy of "The Australian" newspaper today-- it's the equivalent of the New York Times down here. Headline on the front page: "After five visits to the hospital, family asks why did our little girl have to die?"

It's a heartbreaking story of a four-year-old girl who died in a tiny little town in North Australia. But maybe that was an unpreventable tragedy that even the most perfect health care system wouldn't have prevented.

Page 2 story: "Billions 'wasted' in health system"
If you've been listening to the debate over healthcare in America, then this will sound very familiar:
The commission... will warn that healthcare services, already under strain, will be swamped by the rising tide of chronic illness, an ageing population and costly new health technologies. ... The current system is "unlikely to be sustainable without reform"...

And on Page 4, on the same page as the continuation of the front-page, dead 4-year-old story: "Medicare system failing indigenous"
It the data-driven version of the "pulls at your heartstrings" front-page story: "In 2008-2009, less than $8 million out of a total Medicare budget of $14.3 billion went towards rebates specifically for indigenous people, who have shorter life spans and almost three times the infant mortality rate of other Australians."

Sigh. It's nice to think that if America just had "Medicare for All," it would correct longstanding social injustices, improve health outcomes for our minority populations, save us money, and prevent oodles of tragic deaths.

But politics, even honest, no-bribery-or-scandal politics, is a market. The rich, privileged majorities who elect the politicians have the most influence on policy, so guess who ends up getting the most from just about any political deal? If healthcare reform happens in America, the people most likely to benefit are people like you and me-- relatively well-off, well-educated people who don't really need any more government handouts (I still feel a little dirty over the 4.5% interest rate I got on my mortgage refinance a couple of months ago; thank you, I guess, Federal Reserve).

Which brings me to this Page 3 story: "Beautiful lure for tourists packages cosmetic surgery, IVF"
Cairns, the tourism hub of tropical north Queensland, is reinventing itself as the cosmetic surgery and IVF (in-vitro fertilization) mecca of Australia-- targeting US defence personell in Guam.
I can see the ads now: Cairns: not just Bikinis any more, now with affordable Babies and Boob Jobs!

Sunday, July 12, 2009

South Mission Beach

We're living in South Mission Beach, Australia for the next five months, and Michele and I and the kids will be writing about our experiences on our "Cassowary Tales" blog. I'll still be posting about non-Australia-related stuff here.

South Mission Beach is a little town on the tropical northeast coast of Australia, between Townsville and Cairns. And, marvel of marvels, they've got town-wide high-speed wireless internet. I believe the Australian government has been subsidizing the infrastructure, but the service isn't free-- $150 Australian dollars (AUD) for the USB modem doo-hickey, and then $100 AUD buys 6 gigabytes of data transfer. Even in South Mission Beach there are two wireless providers, competing against each other to keep prices low and service high. So far, at least, it seems to be working.

The US Stimulus contains billions of dollars for high-speed Internet. If we get a system like they have here in Australia, I won't complain.
Update 27 July: I'm not as happy with wireless internet as I was a week ago; it's kinda flaky. It would be more than fine if we were light Internet users; it's great for email and occasional web surfing, but it's not super reliable. So we're getting wired with DSL this week (which'll end up costing something like $3 per day).

Tuesday, June 30, 2009

Umass hotel taxes heading to Town Hall

The line-item veto documents are on the web, and it looks like the hotel tax changes all made it through unscathed. So next time your annoying relatives are in town, put them up at the Campus Center Hotel.

Monday, June 29, 2009

Keep your fingers crossed...

So I grabbed the latest state budget document, mostly to see how the wording for the local-option meals tax ended up. Towns will have the option of adding an extra three-quarters of one percent tax on meals, with the money coming directly back to them.

Then I stumbled across this odd little bit of legalese:
SECTION 50. The first paragraph of section 2 of chapter 64G of the General Laws, as so appearing, is hereby amended by striking out clause (b) and inserting in place thereof the following clause:- (b) lodging accommodations, including dormitories, at religious, charitable, educational and philanthropic institutions; provided, however, that this exemption shall not apply to accommodations provided by any such institution at a hotel or motel operated by the institution.
Section 64G is the Hotel Tax law. It looks like the UMass hotel loophole is getting closed.
I wrote the above ten days ago, and have been sitting on this post since then, afraid that calling attention to the UMass hotel loophole might possibly mean that it wouldn't actually get closed. It still might not happen; I haven't seen the list of line-item vetoes in the budget that Patrick signed this afternoon.

Wednesday, June 24, 2009

Budget basics, Part 3 : Baumol's Cost Disease

My friendly neighborhood economist (and fellow town meeting member) thinks my skepticism on "Level Services" budgets is unwarranted, and that using inflation-adjusted per-capita spending as a metric isn't fair.

Here's the rationale: Government suffers from "Baumol's Cost Disease" -- it has to pay ever-higher employee salaries to compete with private industry. Private industry pays higher salaries (relative to the overall cost of stuff) because innovations (especially in manufacturing) make their employees more productive.

The government, and other service industries (Baumol's original 1967 study was of orchestras), can't use technology to be more productive, so the costs of government rise faster than inflation over time.

I'm biased; I'm a high-tech software entrepreneur. It's hard for me to put aside my belief that competition and technology inevitably leads to higher productivity and lower costs.

And not all economists agree that Baumol's Cost Disease is at the heart of increased government spending:
The bottom line is that governments have grown in recent decades, that they did not do so earlier, and that economists do not really know why. -- Gordon Tullock
Then there's this widely cited 2002 research paper:
We find that labor productivity in services industries has grown as fast recently as it has in the rest of the economy, and that the major contributor was an unprecedented acceleration in multifactor productivity. Baumol’s Disease has been cured. -- Jack E. Triplett and Barry P. Bosworth
That paper notes that our biggest local expense, "education", bucks the overall trend (productivity for the education sector declined from 1995-2000).

So I'm not sure what to think. Did the information technology revolution leave teachers behind because that's just the nature of teaching? Or did lack of competition in the education market make them less innovative than (for example) lawyers? Did college education productivity (where there are lots of private schools) fall as much as primary education productivity (where the government has a near monopoly)? Do countries with a more competitive education market (like Sweden or Chile) also suffer from declining productivity over time?

And does any of this really matter for Amherst? We're stuck with the system we've got, and we compete for teachers (and firefighters and building inspectors...) with the rest of the towns and cities in New England. Maybe in a perfect world government spending wouldn't rise any faster than inflation. But we don't live in a perfect world.

Thursday, June 18, 2009

The Spaghetti Didn't Stick

Town Meeting last night was really painful.

We talked about potholes for a while. Whaddya know-- turns out people don't like them, but there's not enough money to fix them properly.

And then we talked about Pools. And recreation for poor kids. And how the Town should give money to private charities because that's just WHO WE ARE.

We saw barely-controlled outrage that closing War Memorial pool is basically a done-deal-- even if Town Meeting voted to keep it open, it's too late to repair it, hire lifeguards, and get it open for the summer. Fair enough, except that the outrage was directed at the Finance Committee, who were asked to do the impossible this year-- they had to come up with a budget when we have, even now, only a vague idea of how much funding we'll get from the State.

And then we got five different proposals to increase the Community Services budget from the Finance Committee / Select board recommendation (+$8,000, +$10,000, +$24,000, +$80,000, and +$175,000) and one to cut it in half. Talk about throwing spaghetti against the wall and hoping some of it sticks!

I don't know if all of the motions to increase were some kind of coordinated strategy or not. If it was a coordinated strategy, it didn't work-- Town Meeting (and I) voted 'No' to all the proposed increases and passed the FC/SB recommendation.

Coordinated or not, the end result was a lot of tired and grumpy Town Meeting members.

Some friendly advice to the well-intentioned people who spoke so passionately last night: spend your political capital more carefully next time.

Monday, June 15, 2009

Budget basics, Part 2

Tonight is the start of Town Meeting Budget Bash, 2009 Edition. To prepare I've been looking at inflation-adjusted per-capita spending over the last five years (I haven't had time to go to the Jones library or Town Hall and dig out old financial statements).

Results are over there in the spreadsheet on the right. According to the audited year-end financial statements and the Census bureau's population estimates, between 2004 and 2008 the Town has increased real spending per resident about $200$130. Spending has gone up a little bit every year, even as the population in Amherst creeps down a little faster than the population is increasing (we'll find out next year how accurate the Census Bureau's estimates are; the population decline doesn't affect the bottom line very much).

High on my TODO list: get budget numbers going back before Prop 2 1/2 was passed, and figure out how this year's proposed budget fits in; are we looking at cutting services back to a 2004 level or a 1984 level? And where is that extra $130 per person per year going-- salaries? Health insurance? More services? Pensions?
UPDATED 16 June: A few months ago the UMass Donahue Institute convinced the census bureau that they were underestimating Amherst's population.

Friday, June 12, 2009

Budget Basics, Part 1

On Monday Town Meeting will start talking about the budget. It's going to be ugly; everybody's pet Town program will be getting less money than last year. I just hope we don't get buried in a flurry of amendments from people trying to give their favorite program a little extra. We'll have at least two-- the Library folks are asking for a little more, and there's a petition article asking that we restore $66,000 in funding to private charities.

If the past is any guide, I expect to see lots of "spaghetti-against-the-wall" logic in the next week or two-- people giving lots of plausible-sounding reasons on why THIS part of the budget deserves more money than proposed by the Finance Committee, and hoping that one of their arguments sticks. Does anybody listen to that type of logorrhea* and think "Hmmm, four of their six arguments sound like BS, but the other two are pretty plausible, so I'm convinced!"

There'll also be all sort of comparisons of proposed budgets to "level services" budgets. I'm skeptical of "level services" budgets; why does it always seem to cost more to provide "level services" than inflation? (most likely suspect: because health care spending here in Massachusetts is rising faster than in the rest of the country, even since passing health care reform)

Shouldn't our local government be getting more efficient at providing services over time, as better technology becomes available and they get more experience?

My favorite measure for looking at budgets is inflation-adjusted per-capita spending. Inflation-adjusted because dollars become cheaper over time; a dollar bought more stuff in 1970 than in 2009. Per-capita because if there are more people to serve then you obviously need more money.

There's a nice graph of inflation-adjusted per-capita Federal spending here. I'll see if I can dig up the numbers for Amherst over the last (say) 25 years and make a similar chart...

* We just watched the movie Akeelah and the Bee. GREAT family movie, highly recommended!

Thursday, May 21, 2009

Meals Tax questions...

The papers didn't have any details on the 2% Meals Tax approved by the MA Senate, so I waded through many amazingly ugly state government web pages and eventually found it. One part of it puzzles me, though:
The commissioner shall remit 50 per cent of the amount collected to the originating city or town, 7.5 per cent to the Municipal Regionalization Incentives Fund established in section 35FF of chapter 10 of the general laws and the balance to cities and towns that have accepted this section; provided, however, that no city or town shall receive more than the total it collected from such sales tax on meals within the corresponding calendar year.
So 50% goes right back to the town, 7.5% goes to the Regionalization Fund. And how does the other 42.5% get divvied up... according to population? Number of Towns? Something else?

Why not just have 92.5% go back to the towns? One of my pet peeves is the multitude of confusing state revenue sharing formulas we've got in this State; are we about to get another one?

I have no idea what the Regionalization Fund is. What if I don't WANT to be regionalized?

Anyway, if this version of the Meals Tax becomes law, and if my interpretation that 90-something-percent of the money will go to the Towns is correct... spiffy!

Climate Economics

I consider myself a global warming moderate; I believe that global warming is happening, but I don't think it will destroy the planet or throw us back into the Paleozoic.

I'm not sure the future benefits of doing stuff now to fight global warming are worth the present costs.

And I'm reasonably certain that it's all a moot point, anyway-- we won't be able to convince India and China and Africa (let alone Kentucky and Kansas) to sacrifice For the Good of the Planet and Future Generations.

Anyway, I've been impressed with the quality of information at the RealClimate blog, and so was pleased to run across "Real Climate Economics" (thanks Joseph).

And then I was disappointed.

The home page says: "The peer-reviewed literature demonstrates that there is rigorous economic support for immediate, large-scale policy responses to the climate crisis."

OK. "Rigorous economic support" -- is that the same as a general consensus among professional economists?

So I dig a little deeper, and read Frank Ackerman's "Climate Economics in Four Easy Pieces," which is a philosophical piece basically saying that we should assume that the worst is going to happen and we shouldn't try very hard to measure costs and benefits because our environment is priceless. And don't worry, because spending lots of money on global warming stuff will actually be GOOD for the economy.

Well. I'm not a big believer in assuming worst-case scenarios. That's a good way to do stupid stuff like spend money on an extended warranty for your IPod or invade Iraq. But reasonable people can disagree about the validity of the precautionary principle.

As for not trying to measure costs and benefits: What? How can we have a reasonable discussion without trying to get a handle on how big the problem, and how expensive the solutions, are? Yes, it's hard. Yes, reasonable people can disagree about what value to put on ecosystem destruction or species diversity. But what's the alternative? Just do what feels right? Spend as much as the public will bear? (That's what we'll actually end up doing, of course, but I was hoping for a more rational approach)

And if spending lots of money on global warming will create cool new technologies and create lots of jobs... well, wouldn't cost/benefit analysis show very low costs and very high benefits?

When I have more time, I'm going to give Real Climate Economics one more chance. Here's my "are they biased" test: Do they refer to at least one paper on their web site that computes the benefits of Global Warming on the climate in some places?
Or are they 100% gloom and doom?

Wednesday, May 13, 2009

CPA Woulda Coulda: six cents

On Monday I spent three long hours voting for Community Preservation Act projects. Well, except for $7000 to fix the roof of the North Congregational Church -- how did the CPA committee vote 7-0 to recommend that when Town Meeting overwhelmingly voted against it?

Anyway, the State says they'll match only 29 cents for every local dollar of CPA money collected this year. Amherst rejected an increase in the CPA tax last year; if we had voted for the increase, we would be eligible for "round 2" funding, which made me wonder: what is the 2009 match going to be for the round-2-eligible towns?

Simple question, right? Ummm, no:
...all CPA communities received a first round match of 67.62% for the October 2008 distribution. In addition, the 71 communities that adopted CPA with the full 3% surcharge received additional funding in the second round distribution. The percentage match for those communities ranged from 68% to 100%.
So some of those communities received almost no extra matching funds, and some received a bunch. Based on a really... interesting... formula that depends on population and property values.

Amherst does OK in the formula ("decile 4 -- 110% of base match"; same as Deerfield and Dunstable). Playing with the Department of Revenue spreadsheets, I can see what would've happened if Amherst was eligible last year for the round 2 funding. We woulda got $470,000 in round 1 funding, and $110,000 in round 2 funding from the State -- an 80% match.

For 2009, it looks like the State match numbers will be roughly half-- less revenue plus more communities participating means less money from the State. So if we'd voted to raise our CPA taxes to 3% we'd tax ourselves about $700,000, get about $200,000 in round 1 funding and about $50,000 in round 2 funding-- a 35% state match instead of the 29% we're gonna get.

I think Amherst voters did the right thing.

Friday, May 08, 2009

Wherefore Art Thou, Stimulus?

The unemployment rate is at 8.9%.

The graph over there on the right is what the Obama folks predicted would happen if we did or didn't pass the stimulus.

Well, it sure looks like they screwed up. Maybe they underestimated how big the recession was going to be. Maybe they underestimated how long it would take $800,000,000,000 to work its way into the economy. Maybe they're spending the money on the wrong things. Maybe printing lots of money and spending it isn't actually a good way to create a healthy economy.

I'm a stimulus skeptic-- I don't think that even the smartest, wisest, best-est politicians and economists in the world can micro-manage the economy to keep inflation low, growth high, ensure that everybody stays employed in a well-paying secure job, and keep America's vital industries (steel, automaking, corn-growing, defense-contracting...) robust forever. You can't micro-manage complex systems; instead, you have to create feedback loops so that the system is self-regulating and so that it evolves in a positive direction.

Maybe our tribal origins make us want to believe that a Wise Leader can help us take a Great Leap Forward, even though that hasn't worked out very well in the past:
The official toll of excess deaths recorded in China for the years of the Great Leap Forward is 14 million, but scholars have estimated the number of famine victims to be between 20 and 43 million.
The stimulus and bailouts and spending won't kill millions of people, at least not as directly as China's experiment with central control of the economy. But those policies are, I think, making millions of Americans a little poorer.

Tuesday, May 05, 2009

My CongressCritter Supports Quackery

Health care costs are rising. A Medicare funding crisis is just around the corner. So I was dismayed to find out that John Olver is a co-sponser of the Federal Acupuncture Coverage Act of 2009:
Amends part B (Supplementary Medical Insurance) of title XVIII (Medicare) of the Social Security Act and federal civil service law relating to the Federal Employees Health Benefits Program to cover qualified acupuncturist services.

(from the excellent OpenCongress web site)
It looked for a while like acupuncture actually worked, and, unlike homeopathy (which is a 100%-pure placebo), it seems plausible that sticking needles into your body could work.

But then some researchers started testing "sham acupuncture" -- they just pretended to stick needles into people. And in study after study, they found that sham acupuncture is just as effective as real acupuncture. Acupuncture is a placebo; it makes you feel better because you think it should.

Don't get me wrong, I'm not specifically anti-acupuncture: researchers who have tested surgery for certain types of back and knee pain against "sham surgery" got the same results; you can't tell who got the "real" surgery and who got the fake surgery. "Mainstream" medicine can be just as screwy as "alternative" medicine, and we should hold both to the same standards.

All of which leads me back to the Federal Acupuncture Act. We've got a system where the Government pays for about half of all medical care (mostly through Medicare and Medicaid). I think our medical system would work a lot better if patients were given the money and allowed to spend it on whatever treatment they thought worked best, whether that was acupuncture or aspirin.

Instead, we get Congress-Critters deciding what gets covered and what doesn't. So greedy drug companies, arthroscopic surgeons, and acupuncturists all spend lots of time and money lobbying Congress to get their share of the Medicare pie. Consumers don't care what the various treatment options cost, they just care whether or not a treatment is covered or not, and they trust that the Government wouldn't cover dangerous or bogus treatments. So health care costs rise (because the incentive is more lobbying for more expensive treatments), and dubious practices survive.

Maybe acupuncture is the most effective-for-the-money treatment for (say) lower back pain for people who really, truly believe that thousands of years of traditional Chinese medicine can't possibly be wrong. I think they should be free to spend money on whatever treatment works best (or whatever treatment they think works best) for them, but we need a health care system that exposes them to the costs of their decisions; when faced with a decision between paying $100 for a visit to an acupuncturist or spending $10 for a bottle of pain pills, they might decide that the needles aren't such a good idea after all.

Monday, May 04, 2009

Town Meeting Tonight

Amherst's Annual Town Meeting begins tonight. Assuming we take the warrant articles in order, I predict we'll zoom through the first six and then spend over an hour debating and dividing Article 7, the proposal to extend the Municipal Parking District. We'll spend lots of time arguing over whether or not a couple of residential properties should be included or not.

Personally, I'd like to extend the Municipal Parking District (MPD) to all of Amherst, because I don't think it's a good idea to MANDATE parking (and the MPD frees developers from the "you must provide at least XYZ parking spaces" zoning requirements).

I suppose people are worried that a developer will create a big-old apartment complex next door and expect their tenants to park on the street (in front of THEIR house!) instead of putting in adequate parking. That Amherst will end up like Hoboken New Jersey, with cars circling the streets for hours looking for parking spots...

I suppose there's a very small chance that could happen (I don't see Amherst ever getting as dense as Hoboken), but even if it did wouldn't that be a good thing? All of the Master Plans I've read, going all the way back to the late '60s, say that one of the goals for Amherst is to encourage walking, bicycling and public transit and discourage car ownership.

Either people like to talk about alternative transportation but don't actually want to take concrete actions to promote it.

Or maybe a majority like alternative transportation (so it gets into the planning documents) but a large enough minority secretly like their cars enough to block any zoning amendments that might inconvenience them (it only takes 33% of Town Meeting to defeat a zoning change).

I bet it's a combination of both.

Thursday, April 30, 2009

Young people throwing things at each other!

This weekend, Amherst will be invaded by young people from all over the Northeast, who are going to run around and get sweaty (maybe muddy if it rains) and throw things at each other!

It's the Amherst Regional High School 2009 Ultimate Invitational, happening at Hampshire College on Saturday, and at the Middle and High schools on Saturday and Sunday. So on Saturday go to the Amherst Farmer's Market (opening day, and free cake!), then stop by the League of Women Voter's book sale on the common (9AM-7PM), then go cheer on kids playing withFrisbees® (err, I mean "flying discs"), and finish up by stopping at the Artists & Atisans Mayfaire at the Amherst Women's Club on Triangle and Main Street (9-5).

Happy Spring!
UPDATE: I missed one: stop at the RideBuzz free music festival at Kendrick Park (noon-6) as you walk from the book sale to the high school.

Monday, April 27, 2009

The Amherst Train Station...

This morning's Daily Hampshire Gazette has a story on how some folks are trying to get Amtrack rerouted through Northampton. Right now, the trains travel from Springfield, take a detour to Palmer, then come through Amherst on their trip North. A while back I spent over an hour stuck on a siding in Palmer with two tired and cranky kids, waiting for a freight train to clear the tracks so we could proceed to Amherst, so I definitely see the benefit of taking a more direct route. Northampton isn't THAT far away, and I'm sure the students who take the train would adjust to riding a bus to the Northampton station.

So... one of the few Federal Stimulus projects for Amherst involves the train station:
FEDERAL ECONOMIC RECOVERY SPENDING. PRJ Number PRJ29116011 Title NEW ENGLAND DIVISION - STATION UPGRADES Description Upgrade platforms to conform with Amtrak standards and ADA regulations at stations in: Amherst MA, Hartford CT, Mystic CT, and Providence RI. Project detail MA Amherst MA Stations to receive a new ADA compliant, 550', 8" ATR concrete platform. $500,000
Half a million dollars for a train platform sounds like a lot, but we're talking about a lot of train platform. Mr. Google tells me that the blue line I drew on the map over there on the right is 550-feet long.

One might argue that it's OK to build a train platform for a train station that may soon be closed; that the economic activity will stimulate the economy and make us better off. That's the Broken Window Fallacy (follow the link for a good description); spending money on useless projects is a bad idea.

UPDATE: basic arithmetic failed me again; I realized eating lunch that in the first version of this post I'd managed to divide 500,000 by 550 and somehow end up with about 10,000. Too many fives, I guess...

Saturday, April 25, 2009

Drugs! On the Common!

So I was driving to the Mall to buy Will new soccer stuff, and had completely forgotten that ExtRavaGanja is happening downtown today until I drove past the Common and saw all the, uh, interesting-looking people walking around.

I've never actually been to the Amherst ganja festival; I don't like crowds or loud music, and I decided halfway through college that I don't need or want any mind-altering substances. My mind is just fine the way it is; altering it made it different, but not better. Well, except for caffeine. It makes me perky. Oh, and beer and hard cider. They're tasty.

Anyway, I'll enjoy Extravaganja from a distance again this year. I've loaded up the soundtrack to Weeds (Soundtrack: highly recommended. Series: season 1 was great, then it went downhill) on my iPod so I can groove to Ganja Babe as I take down our storm windows.

Monday, April 20, 2009

Drugs! In our Water!

I ran across this AP News story, about millions of pounds of drugs being released into our water, yesterday on Digg. And then again this morning, on the front page of the Daily Hampshire Gazette.

I think it's an excellent example of out-of-context fear-mongering. We're living longer, healthier lives and we're safer than we've ever been before, and yet we're constantly bombarded by new things we're supposed to worry about. Last years it was agricultural Armageddon because of Colony Collapse Disorder.

This morning, it's "at least" 271 million pounds of drugs released into our water supplies. Wow, 271 million pounds. That sounds like a lot!

Is it?

If I'm reading the article correctly, that's 271 million pounds over a period of 20 years. We're an awfully big country; 300 million people here, so that's less than a pound per person over 20 years. Or less than an ounce per person per year.

Given the amount of water an average person uses in a year (about 1,400 gallons per person per day), that's the proverbial drop in the bucket.

The article also mentions that:
Two common industrial chemicals that are also pharmaceuticals — the antiseptics phenol and hydrogen peroxide — account for 92 percent of the 271 million pounds identified as coming from drugmakers and other manufacturers. Both can be toxic and both are considered to be ubiquitous in the environment.
Both can be toxic? WATER can be toxic if you drink too much of it!

Sheesh, what next, a hard-hitting AP report on the dangers of DiHydrogen Monoxide?

Thursday, April 16, 2009

GREAT source of inexpensive homeopathic medicine!

For some odd reason,'s recommendation system thought I'd be interested in Boiron Camilia homeopathic teething medicine. Only $11 for 40 doses (on sale).

Ooh, but I see in the related products list Humphreys Teething Tablets, which are even cheaper-- $4.34 for 135 pills.

Hmm, but you're supposed to take three of the Humphreys at a time. Still, the Humphreys is cheaper per dose (10 cents versus 27 cents).

But maybe it's not as good. They both get five-star reviews, but what about the active ingredients? The Camilia's main active ingredient is a 5C dilution of pokeweed plant-- that 1 part pokeweed to 10,000,000,000 (ten billion) parts water. Pokeweed is poisonous, but that's good because the whole idea behind homeopathic remedies is that a little bit of poison is good for you.

Humphreys is a 3X dilution of pokeweed (1 part pokeweed to a thousand parts water). In the homeopathic world, less active ingredient is better, so that's not good (a 5C dilution-- diluted 1-to-100 five times-- is better than a 3X dilution-- diluted 1-to-10 three times). But, you also get a 3X dilution of Belladonna (aka Deadly Nightshade) for your money.

How's a concerned parent supposed to decide? Should you give your baby the more expensive remedy that only has one poison in it, or the cheaper one that has two?

Personally, I'd opt for the least expensive option. I found these fantastic homeopathic pills online, and they cost less than 2 cents per dose! They contain a 60C dilution of BOTH pokeweed AND belladonna, and they even come in three kid-friendly flavors!

I'm pretty sure I saw the same product being sold at Big Y; I'll have to pick some up next time I'm buying groceries.

Monday, April 13, 2009

Should we grow more food in Amherst?

Image by SCWebster via flickr.

April 14, 2009
First Floor Meeting Room, Town Hall

The Agricultural Commission will host an open discussion from 7:00 – 8:00 PM on “How can we grow more food in Amherst?” Farmers, gardeners, educators, food providers, consumers, and anyone else who is concerned about increasing our food self-sufficiency in Amherst is invited.
I recently finished reading "The Myth of the Rational Voter," in which Bryan Caplan argues that there are certain subjects where people are "rationally irrational" -- we vote based on our own preferences (which is rational), but the result of each of us voting selfishly results in a Tragedy of the Commons, with the world ending up worse overall.

I know this will be a very unpopular idea, but I think the whole Buy Local / Food Self-Sufficiency movement is rationally irrational.

Don't get me wrong-- I like farms. I like silos and barns. I like racing tractors on my bicycle in the summertime. We absolutely, positively lose something every time a farmer goes out of business.

And that's exactly why I'm suspicious of efforts to get more food grown in Amherst. It's easy to see what we lose when a farmer goes out of business, but there are good reasons most of our food is grown in Iowa or California or Mexico or Argentina. I lived in California, and it's a lot easier to grow things there. Especially in February.

There are bad reasons, too-- farm subsidies, highway subsidies, water subsidies, import quotas and duties, minimum wage laws, etc. We should get rid of those bad reasons.

Maybe we should buy only food grown within 100 miles of where we live, because transporting food across the country generates lots of CO2 and increases global warming.

Maybe. Then again, maybe growing corn in Iowa uses less CO2 than growing corn in Massachusetts because the farms are bigger and more efficient. I have no idea if that's true or not, but assume for the sake of argument that it is true.

Even if it was much better for the environment to grow food far away, I think there would still be a strong "Grow Local" movement. I don't think Grow Local is really about saving the environment; if we really wanted to save the environment, then encouraging everybody to move into apartments built near workplaces someplace where it doesn't get so cold in the winter would probably be the way to go.

I don't think it's really about saving the local economy, either. If I pay $1 less for a head of lettuce grown in Mexico than I do for one grown in Hadley then that's $1 I can spend on some local business-- maybe I'll buy a little extra Hadley maple syrup. Producing maple syrup here makes sense; we've got the right climate for it.

It would be dumb for folks in Florida to decide that they're not Maple Syrup Self Sufficient-- that they need to figure out how to make maple syrup from oranges so they don't waste money importing it from Vermont and Massachusetts.

Just as it would be dumb for folks in Massachusetts to try to become Orange Juice Self Sufficient. Trade is a good thing!

Deep down, I think the Grow Local movement is really about aesthetics. Farms are pretty, and seeing cows and tractors as we drive to the mall gives us the warm fuzzies. Maybe it all works out-- maybe the economic and environmental rationalizations for local farms balances out all the bad policies that support Big Farming.

But I think the world would be a better place if we were more rational about the benefits and costs of what we eat, where we live, and how we behave.

Tuesday, April 07, 2009

Kitchen Remodeling is Fun! (right?)

After we remodeled the kitchen in our tiny, 900-square-foot bowling-alley-of-a-house in Palo Alto ten years ago we swore we would never do it again.

Hah! Just three houses later we're doing it again. Michele has been documenting the process in photos on Facebook. It's actually a great time to remodel; interest rates are low, scheduling subcontractors is pretty easy, and we've had no trouble at all getting permits and inspections out of Town Hall (our contractor was very pleasantly surprised that our permit arrived in two days).

And we can feel patriotic that we're doing our part to stimulate the economy as we try to get the drywall dust off the ficus...

Wednesday, April 01, 2009

Best Homepage Ever!

The folks at Google always announce their most interesting projects the first day of April, and this year's no exception.

Check out the home page for Cadie, their latest.

All I can say is: OMG!!!

Monday, March 16, 2009

Earth Hour: Candle In the Wind

Earth Hour is coming this Saturday:
The town is officially endorsing this event and will be turning off non-essential lights (street lights will be on for safety), the Chamber of Commerce is urging its members to participate, and at 8:30 p.m. we will have a Bring-Your-Own-Candle-Lit celebration on the town common.

I kinda hate to even mention this (I feel like an old curmudgeon)... but most candles aren't very environmentally friendly. Even beeswax or soy candles aren't completely green; manufacturing and distributing them generates greenhouse gases.

If you're a bicycle-riding beekeeper who makes your own candles, more power to you! But if you're a typical Subaru-driving professional who buys paraffin Yankee Candles (buy local!), driving to the Earth Hour celebration and lighting a candle or two will probably do more harm than good.

Sunday, March 15, 2009

A Free Market take on the Crisis

If you're interested in the financial crisis and have time to listen to an hour-long talk, I highly recommend Peter Schiff's talk about the dot-com and real estate bubbles, the financial mess, and how we're going to screw the Chinese (and other foreign Treasury debt-holders). Get the MP3 file here.

He's a compelling speaker-- funny and direct and good at cutting through the bullshit and laying out the radically free-market, "stop bailing out Big Business, just let them fail" position. I don't agree with everything he says, but I agree with most of it, and his opinion about what's going to happen to the US economy over the next few years is making me rethink my own personal investment strategies.

Saturday, March 07, 2009

I'm a stimulus skeptic

Unemployment is at 8%, and some people are already saying "See? The stimulus is too small!"

I guess they were counting on some kind of magical Stimulus Anticipation Effect to occur before any actual money was spent?

I'm biased; I am deeply skeptical of our government's ability to do just about anything effectively. I'm trying really hard to be optimistic and believe the "government bravely steps into the breach and puts idle resources to productive use" stimulus story. But how will I know whether or not that story is true? I'm biased, so I'll be looking for evidence that the government screwed up, and will tend to ignore evidence that it made things better.

I think I see a way out. On January 10'th the Obama economic team released "The Job Impact of the American Recovery and Reinvestment Plan." It contains projections for their best estimates of what the unemployment rate would be with and without the stimulus, from 2009 through 2014.

If the actual unemployment numbers look like their "with stimulus" numbers, I'll revise my opinion.

If the numbers look like their "without stimulus" numbers, then I'll conclude that the stimulus didn't do diddly-squat.

And if the numbers are worse than "without stimulus," then I'll conclude that the stimulus did more harm than good.

Now: if their predictions turn out to be incorrect, the Obama economic team will undoubtedly find all sorts of reasons why they didn't get it right-- they didn't realize the banking crisis was as severe as it is, or they'll blame it on Treasury or Federal Reserve policy, or they didn't realize it would be so darn hard to spend eight hundred billion dollars. All of which might be true, but all of which would reinforce my core belief in the ineffectiveness of Big Government.

Thursday, February 26, 2009

Dinner with Kids

We have some hard and fast rules about dinner in our house:
  • We all eat dinner together
  • Once you leave the table, you're done. No grazing.
  • If you don't like what's for dinner after you've tried a taste, you can have bread and butter instead.
We don't have any rules about finishing everything on your plate, never use food as a reward or punishment, and, in general, try not to care about what the kids are or are not eating. I'm generally more successful at not caring than Michele. I was please to run across this today from Bryan Caplan:
Parents habitually try to influence what their kids eat. "Eat up." "Clean your plate." "No dessert until you finish your vegetables." "Soda? No, you get milk." At least in the modern U.S., parents' main goals seem to be to (a) Increase the total amount of food kids eat, and (b) Increase the healthiness of the food they do eat.

Does all this nagging actually work? You can't answer this question just by correlating parents' nagging with childrens' eating. As usual, we have to consider the possibility that the cause of the correlation is partially or entirely genetic. Maybe health-conscious parents sire health-conscious kids, and the nagging is just a lot of hot air.

What do the data say? The best paper I tracked down was John Hewitt's "The Genetics of Obesity" (1997, Behavior Genetics 27). It's got very strong results: Nature can account for all of the family resemblance in the Body Mass Index; nurture doesn't matter at all...
Or, in other words, nag your kids to eat their broccoli if it makes you feel better... but it won't make them any skinnier, and probably won't make them any healthier, either. I save my nagging for the really important stuff, like cleaning up Legos after they're done playing ("if I step on ONE MORE of those little bricks I'm THROWING THEM ALL AWAY!")

Sunday, February 22, 2009

Yes, Nationalize the Banks

It's ironic that, at the very heart of our "capitalist, free-market" economic system, sits a government-controlled monopoly. Money and banking are strictly regulated; we have neither a free market in money nor a free market in banks.

It doesn't surprise me that bankers and "money people" managed to influence or work around the regulations so that they became fantastically wealthy at our expense. They are rewarded with concentrated benefits and the rest of us will now suffer diffuse costs.

An editorial in this morning's New York Times says:
Americans have a visceral horror of the word nationalization. So call it restructuring or majority ownership. Or call it the taxpayers’ due after pouring in hundreds of billions of dollars in capital and guarantees and standing ready to pour in hundreds of billions more.
The idea of nationalizing most industries is horrible; can you imagine what nationalized, government-controlled supermarkets would be like?

But banks are different; we trust them with our money, trust the government to watch them and make sure they don't lose our money, and let them profit for providing that service. It's an interesting thought experiment to consider what the world would be like under a "free banking" system, but that's not the system we've got. Some of the bankers have violated our trust; it is now the government's job to deal with their failure. Dealing with them quickly and decisively is the key to pulling us out of the recession.

Friday, February 20, 2009

Biking in Solvang

The Tour of California bike race is happening as I write this, and today's stage is a 15-mile time trial in Solvang.

That brings back lots of memories; in high school I lived at 1980 Alamo Pintado Road. Today Lance Armstrong will be racing up that street!

They'll be following the route of what was my favorite ride-- from my house up into Los Olivos, then up a short hill and down Ballard Canyon road, through Solvang, and back up Alamo Pintado road to home. There's a really fun, fast, almost-hairpin turn on Ballard Canyon road that was covered in gravel one day... I still have some faint scars on my knee from the crash ("merely a flesh wound"). Google Street View took a nice picture of it:

View Larger Map

It's a beautiful ride; on cold days near the end of winter like today I do miss California weather.

Friday, February 13, 2009

More $timulus Math: $2.4million for Amherst Schools?

One of the lessons I've learned as I try to hone my skeptical thinking skills is to mistrust second- or third-hand information. In that spirit, I've been reading bits and pieces of the economic stimulus bill that's being passed through Congress, trying to figure out how it will impact Amherst's school budget.

The stimulus bill is actually fairly easy to read; the only hard bits are all the references to other laws, and putting all the numbers into context. For example, they're gonna spend five billion dollars on grants that meet the requirements of "Section 1125, Title I of the Elementary and Secondary Education Act of 1965." And another five billion on stuff from section 1125A, and three billion from section 1003g.

So I wanna know: how much of that money will go to Amherst's public schools? Can the State hog it all and not pass any money to Amherst? Will it be enough to fill in this year's budget gap? Next year's?

So: how much? There are a few really big (more than $1billion) pots of money in the Stimulus bill related to K-12 education:

$13 billion more for ESEA (aka "no child left behind") Title I
$12 billion more for IDEA (special education)
$53 billion for State Fiscal Stabilization

(... there's also several hundreds of millions of dollars for other various programs that I'm going to ignore to be conservative and because I'm too lazy to try to figure out if any of that money will go to Amherst, and I'm rounding all the numbers down to the nearest billion).

I figure something like $800,000 of the ESEA and IDEA money will eventually end up in Amherst public schools. I got that number by multiplying the amount of money Amherst public schools got from those pots of money last year by the percentage increases represented by the stimulus.

And I figure at least $1,500,000 of the Stabilization money will eventually end up in Amherst public schools.

So, how much: It looks 2.4 million dollars, over the next 2 years or so (Google spreadsheet here if you wanna see my math).

Can the State hog it all? Nope-- the law is written so the money has to flow through to local schools.

Is that enough to fill in the budget gaps this year and next? According to the ARPS website, they need $3million/year more just to provide the same services; the stimulus should fill in less than half of that.

What'll happen in two years when the stimulus money is all gone? I have no idea. I think we're not supposed to be worrying about that-- the whole idea of the stimulus is to SPEND NOW. If the stimulus works, then the economy will be going gangbusters and we'll have no worries. I really wanna believe that this is what's going to happen... but I just don't.

If the stimulus doesn't work, then the economy will be in terrible shape, the Democrats will lose control of Congress, the Republicans will cut Federal education spending to the bone, and we'll have an even bigger budget crunch. Sigh.

UPDATE: My original estimates were off by a million dollars or so-- a bunch of the State Stabilization money will go to post-secondary schools (i.e. UMass).
7 April UPDATE: The State says Amherst is going to get $0 from the state stabilization fund...