Here’s What’s Wrong About Price Gouging

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Here are some situations. See what you think of them.

You’re getting ready to drive to work when you turn on the radio and discover that an accident has closed two lanes of the freeway you usually take. Unwilling to spend two extra hours inching through horrible traffic, or to forfeit half a day’s wages so you can go to work at a later time, you decide to sacrifice four dollars and take the toll road.

Your friend has a birthday tomorrow, and you want to give him his favorite thing, which is a certain kind of Brazilian coffee. When you get to the store, you find that the cost has gone up. Several would-be customers are shaking their heads and turning away: they’re not buying at that price. “Bad season in Brazil,” one of them says. “Half the crop wiped out.” Hence the price increase. But you want to please your friend, so you pay the extra money and buy him a pound of coffee.

The first snowfall of the winter turns out to be a bad one. When you see the stuff clogging your driveway, you regret that you didn’t contract with the neighborhood snowplow guy to clear the drive whenever it snowed. You call him on his cell, and over the sound of heavy equipment you hear him say something about wanting to “do the customers with contracts first.” In fact, he’s got all the contract customers he can handle — but he’d be willing to help you out today, for twenty dollars extra, fifty dollars for doing it right away. You happily agree.

Do you see anything wrong about any of these little episodes? I mean, do you see anything contrary to common morality? Anything contrary to common sense? Anything contrary to normal economic reasoning? No? You don’t? I don’t either.

You would have paid a hundred dollars, if the snowplow guy had asked for it. It would have been worth it to you. But no, he’s not allowed to ask for more.

Now suppose the government decreed that no motorist should have to pay more to drive, just because there was some dumb accident on the freeway. Suppose the government therefore closed the toll road, just to make things fair, meaning that you would be required either to spend extra hours on the freeway or to forfeit some of your pay for a much delayed arrival at work, or both.

Or suppose the government decided that no one should pay more for essential foodstuffs (e.g., coffee), just because some unpreventable meteorological event occurred. Suppose the government therefore decreed that no one should be allowed to pay more for coffee than the price that prevailed before that event, meaning that all available supplies of coffee would be long gone before you went to shop for it — purchased by casual customers who would never have bought any coffee at the price it is worth to you.

Or, to go at this one more time, suppose the government refused to allow the snowplow guy to charge you extra just because there was a big snowfall and you hadn’t been prepared for it. Obviously, you wouldn’t get your driveway plowed, despite the fact that some of the people who got theirs plowed, at the ordinary price, had nothing better to do with their cars than drive to the convenience store for a bag of chips, whereas you needed to show up at the office to sign an important contract. You would have paid a hundred dollars, if the snowplow guy had asked for it. It would have been worth it to you. But no, he’s not allowed to ask for more.

What do you think of the morality and economics of that second set of situations? Not much, I imagine. Yet that is the morality and economics that is official in our country. That is the morality and economics that the people, as a corporate body, loudly applaud.

Consider what happens when some meteorological accident befalls an East Coast state. As soon as a hurricane is foretold, state and local officials decree that no one will be allowed to charge more for gas, food, or lumber than they do on a normal day. To charge more would be “gouging,” and an awful thing. The result? The economy grinds to a halt. Long lines form at stores and gas stations. People in urgent, perhaps desperate, need wait in line up behind people who have nothing better to do that day, and no one has a compelling economic interest in rerouting supplies to the weather-threatened region from other places; it’s a hassle, and the price would be the same anyhow. Besides, if you made a mistake in pricing, you could be arrested. Fat little Chris Christie, or some similar buffoon, bustles from one gas station to another, threatening to arrest “profiteers” and occupying the 6 o’clock news. And the people cheer.

It appears to be an article of the national faith that prices are determined by the law of supply and demand. But another article of faith is that the government can and should violate that law.

The other day, federal officials made headlines by announcing an investigation of airline companies because they allegedly raised prices on flights in New England after a government train had an accident that disabled the main line from New York to Boston. The idea of these high-level feds is that it would have been scandalously immoral for the airlines to charge more money for their seats, thereby allowing travelers who were willing to pay more to go ahead and pay it, and travelers who didn’t set so high a priority on getting to Boston right away not to pay it. Except on John Stossel’s show, no murmur of disapproval greeted the well-publicized announcement of this sanctimonious investigation, or witch hunt.

So this is the mystery of contemporary politics. Actions that would, in certain contexts, make almost all Americans shake their heads in wonder are welcomed, in other contexts, with pious approval. Why is that? I don’t know.

It appears to be an article of the national faith that prices are determined by the law of supply and demand. This idea is even taught in high schools, where realistic ideas almost never appear. But another article of faith is that the government can and should violate that law (which it constantly does), and that no one will pay a price for the government’s action: no one will spend hours waiting to buy something he’d prefer to pay a bit more money for; no one will find that the items he wants to buy have disappeared when he finally gets to buy them; no one will lose his life or livelihood because of an arbitrarily imposed “fair price.”

Americans believe that there’s no such thing as a free lunch. They also believe that the government can cook one up for you, at any time, and no matter what happens. No problem! Just make a law.




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The Lady and the Tigers

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Tippi Hedren is the actress whose intelligence illuminated Alfred Hitchcock’s The Birds. Now, 52 years later, Hedren is still an illuminating person — as shown by her powerful performance at a hearing managed by the board of asses who are in charge of California’s “bullet train.”

The train — which does not exist and may never exist — is the biggest (putative) construction project in American history, and perhaps the biggest boondoggle, a reduction ad absurdum of “planning for the environment,” “planning for energy conservation,” and all the rest of it. Its cost estimates are 600% higher than the voters thought they were mandating, and this is one reason the majority of voters now wish they hadn’t listened to propaganda for the project. They agreed to build a railroad that would deliver passengers from Los Angeles to San Francisco in a time substantially less than three hours. It’s now clear that there’s no possibility this can happen, or anything close to it, no matter where the rail line is put. But no one knows where it will be put. The managers of the project, the California High Speed Rail Authority, insensately determined to carry on despite the many kinds of fools they are making of themselves, are still deciding which communities they’re going to unleash their bulldozers on.

Another assumption is that it’s efficient to destroy a series of towns in the pursuit of what is in fact slow-speed rail.

They have to hold public hearings about this. Unfortunately, they don’t have to listen to what they hear at them, and they don’t. The latest hearing involved outraged residents of several Southern California towns that may be devastated by the train. One of them is Acton, where Hedren operates an animal-rescue preserve that caters to big cats. So Hedren showed up at the hearing.

Dan Richard, chairman of the Authority, used the occasion to pontificate: “What we’re building here, by the way, in high-speed rail, is the most efficient way to deal with our transportation needs of the future." “By the way?” The rhetoric is almost as condescending as the statement itself, which assumes that its audience is stupid enough to believe it’s efficient to spend at least $100 billion to propel a few hundred people a day to a destination they could have reached more quickly and cheaply by air. Another assumption is that it’s efficient to destroy a series of towns in the pursuit of what is in fact slow-speed rail.

Hedren, 85, identified the problem with people who make statements like that: "You don't listen, you don't care. . . . You are going to take this beautiful little town of Acton . . . and you are going to destroy it with this train." Then she mentioned the lions and tigers she cares for (but has no illusions about). "I am more afraid of you," she told the planners.




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Pirates, Dead Ahead

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After the collapse of the Somali government in 1991, a reign of piracy ensued that terrorized the shipping lanes along the east coast of Africa for nearly two decades. Anyone who idealizes anarchy should take note: in the absence of leadership, leaders emerged — and these virtual warlords were at least as tyrannical as their predecessors, and certainly more volatile. (I didn't see any of my anarchist friends moving to Somalia during the 20 years between governments.)

Captain Phillips tells the harrowing story of Richard Phillips and the crew of the Maersk Alabama, an American cargo ship that was hijacked by a band of young Somalis in the spring of 2011. Incredibly, the Maersk Alabama was unescorted and her crew was armed with nothing but firehoses, despite ample knowledge that Somali pirates roamed the waters.

In the early days of American westward expansion, wagon trains and stagecoaches were similarly threatened by local bands as they transported people and commodities through unsafe territories. But their drivers and passengers carried rifles (leading later generations to call out "Shotgun!" when requesting the front passenger seat). They could also count on the protection of federal troops, who set up forts and patrolled the emigration areas. (I know — some might call this trespassing. And they might be right. But here we are.)

The Alabama had no such protection, and it carried no weapons. And it was alone in the water, away from the other cargo ships. Using radar to hunt their prey, the Somalis selected the Alabama in the way that a pride of lions might select a zebra. It was a single blip on the outskirts of the shipping lanes, away from the safety of the herd; it was the proverbial sitting duck.

These young pirates are no different from the street dealers in America, who take the risks of the Drug War and receive very little of the profits.

Despite its tense theme, the film begins slowly, almost boringly, with Captain Phillips (Tom Hanks) getting ready to go to work. He and his wife (Catherine Keener) make small talk about family and safety as she drives him to work. Then we watch Captain Phillips go through his usual routine on the ship. If this had been a film festival submission with unrecognized actors and no advance publicity, the screener probably would have popped it out of the DVD player ten minutes into the viewing and dropped it into the discard pile.

And that would have been a shame, because Captain Phillips is a nonstop suspense thriller, on a par with the original Die Hard movie. After that first tedious ten minutes, the tension doesn’t let up until the last frame of the film — despite a moment of unintended comic relief when the government agency that is called for help doesn’t pick up the phone. "Government shutdown!" someone called out in the audience.

Captain Phillips controls the rising panic he naturally feels and uses a calm, soothing voice as he tries to reason with the overwrought hijackers.The tension between what he feels and what he does is visible throughout the film. His men's lives are in his hands, but he is not a trained military man or intelligence agent. He couldn’t land a punch or aim a kick any better than you or I could; he's just a boat driver who probably wouldn't know what to do with an automatic rifle even if he managed to get one. Instead he uses his wits, planning diversions on the fly, weighing risks against potential outcomes, all the time trying to placate and calm his attackers. This heightens the emotional tension more than a physical fight would do, and it gives the film a strong tone of realism, more in the manner of United 93 (2006) than of the Bourne movies (2004, 2007), which were also directed by Paul Greengrass.

Captain Phillips gets additional depth from the backstory it provides for the hijackers. While never excusing them, it allows us to see the despair of poverty that leads young men like these to turn to piracy for their livelihood. At one point Phillips says to the ringleader, Muse (Barkhad Abdi), "You have $30,000. That's enough. Take it and go."Muse scoffs at the amount. "I got six million last year," he says of an earlier kidnapping. Phillips is incredulous, and so are we. Six million? He had six million American dollars, and he is still living in ragged, barefoot poverty? Muse shrugs in response. "You got bosses. I got bosses," he says.

These young pirates do all the work and take all the risks for a pittance, while a boss somewhere is living fat, collecting the ransoms and booty and doling out a tiny commission to the workers. They are no different from the street dealers in America, who take the risks of the Drug War and receive very little of the profits. In his research for Freakonomics, Steven D. Levitt discovered that most drug dealers experience this same tyranny of the warlord. Street dealers earn little more than minimum wage, and they live in poverty. As with the Somali pirates, or the lioness who goes in for the kill, the "lion's share" goes to the ones sitting safely under a tree.

Despite his two Oscars and his stellar reputation, Tom Hanks' work has been a bit uneven of late, with such forgettable films as The Terminal (2004), The Ladykillers (2004), Elvis Has Left the Building (also 2004) and a slew of others leading up to Larry Crowne (2011). (Don't look for my reviews because I didn't even bother.) Captain Phillips is his best work in over a decade. The constant tension between the panic his character feels and the calm he must present to his captors is always present. And when that tension breaks — well, it's simply an unforgettable moment, which makes up for ten years of forgettable films.

But as good as Hanks is in this film, it isn't as good as the amazing work performed by the four Somalis (Barkhad Abdi, Barkhad Abdirahman, Faysal Ahmed, Mahat M. Ali) who will convince you that they were discovered on the deck of a pirate ship, not in a casting studio. They are beyond scary. They are seething with rage, as volatile as a sprung grenade, overwrought and underfed and starving for vengeance against anyone. Anyone. But of course, they aren't really pirates. All four are immigrants living in the growing Somali community of Minneapolis, and all four are remarkable in their debut roles. Director Greengrass has to be given tremendous credit, first for deciding to use untrained Somalis instead of Hollywood actors, and second for being able to elicit such realistic work from these first-time actors.

The only disappointment in terms of acting is Catherine Keener as Captain Phillips' wife. She disappears after those first dull ten minutes, and she never returns. What a waste of a fine, skilled actress. I suspect, however, that she had a larger role, possibly as her character waited at home worrying about her husband's fate, but that it ended up on the cutting room floor in the interest of time or emotional arc. This would have been a wise decision, I might add, since any interruption to the gripping, fast-paced suspense would have been a mistake. In fact, as much as I admire her work, I would have cut her part entirely and started the film after Phillips is onboard the ship. But this is a minor quibble about a superbly acted film.

September-October is usually considered the dumping ground between the summer blockbusters and the end-of-year Oscar contenders; we usually wallow through fall with movies that were considered good enough to pick up for distribution but not good enough to give them holiday box office slots. But we are three-for-three in this month with Prisoners, Gravity, and Captain Phillips. Go easy on the popcorn!


Editor's Note: Review of "Captain Phillips," directed by Paul Greengrass. Columbia Pictures, 2013; 134 white-knuckle minutes.



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Signs, Signs, Everywhere Signs

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I collect markers of what I call “roadkill” legislation — roadside signs that demean my intellect or destroy my privileges. My favorite, of course, is “Click it or Ticket”. Get it? How clever of my state’s Humorous Sign Department (staffed by a dozen failed ex-comedians who enjoy fat salaries and a pension plan promising double their salary). The seatbelt sign reminds me that the belt, my strapped in belly, and the car belong to me. So does the road (my taxes). And I recall with sadness decedents, strangled by seat belts, who left this vale of tears after being T-boned or plunged into rivers, while many an unbelted survivor has been tossed from his vehicle toward safety.

Not to mention kids crushed by safety bags. What federal bureaucrat foresaw that? Why does my son ban me from seating my precious grandson in the front seat? “You’ll kill him!” he hollers as we back out of the driveway. Gee, I thought they saved lives.

However, the epitome of the state’s arrogance is “Traffic Fines Double in Work Zone.” It attributes to me the lowest of morals. Let’s see; if I knock down a road worker and it only costs $75, I’ll consider bowling one over and getting to work on time. What’s the calculus? One mashed road worker and congratulations: “Ted, you’re on time this morning”? But doubly fined — $150? That’s apparently enough of a penalty to upset my moral equation. I’d risk a worker’s life for $75, but not for $150. That’s what my state thinks of me. Not very flattering.

Forget occupying Wall Street. What we need is a roadsign protest movement that occupies our nation’s streets, cruising unbelted to a convocation site. Composed mainly of Washington lawyers disguised as farmers in denims and straw hats, they sue the first cop who slaps a seatbelt violation on them. They take it all the way to the Supreme Court, where any properly briefed schoolboy can prove that the Constitution doesn’t even whisper of straps, belts, or suspenders while riding your horse, and it’s clearly an infringement on the comfort of your own body, especially after a large, inflationary meal.

I save the best for last. The newest reminder by the state is that our life expectancy would go up ten years if we discarded our nefarious vehicles in favor of plodding horses, mules, or better yet, large turtles imported from the Galapagos Islands. How safe we would be! I refer here to the “No Texting While Driving” billboard. It doesn’t mention eating corn on the cob, reading War and Peace, or undertaking acrobatic sexual activity. Just texting. What about telephoning? That’s not dangerous when your wife tells you that her sister — the one with two kids — is coming to live with you? In the face of such news you’re not going to make a U-over four lanes of traffic to get to the bar, or end up in the front seat of the car in front of you? Or maybe bail out, converting your car into an unguided missile . . .

In summing up the above on personal safety, I say it is a matter of personal choice unless it infringes the rights of others. Sadly, we live in an age when society has robbed us of any choice in these concerns, as well as others that are much more serious. We’re on a slippery slope.




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The Bureaucrat and the Cellphone Ban

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About a month ago, the National Transportation Safety Board (NTSB) chairman, Deborah A.P. Hersman, called for a “first-ever nationwide ban” on “the non-emergency use of portable electronic devices,” including hands-free cellphones, while driving. In a prepared statement introducing the proposed ban, Hersman told the story of a fatal multi-vehicle accident that had recently occurred in rural Missouri, set in motion by a pickup truck driver who’d been using a cellphone while driving:

“And it was over just like that. It happened so quickly. And, that’s what happened at Gray Summit. Two lives lost in the blink of an eye. And, it’s what happened to more than 3,000 people last year. Lives lost. In the blink of an eye. In the typing of a text. In the push of a send button.”

Quickly, critics of the Obama administration raised questions about that “3,000 lives lost” statistic. While some of these criticisms had a peevish tone, their basic point was valid. The 3,000 number was an exaggeration, based on an imprecise use of more defensible fatality numbers.

A few days later, the Washington Post published an opinion column under Hersman’s name that justified the NTSB’s proposal. (The Post’s opinion pages serve as a sort of free press-release service for columns supposedly written by high-level bureaucrats.) The column used most of the same language from Hersman’s earlier statement — but avoided specific figures:

“Washington residents remember well the 2009 Metro crash on the Red Line in which nine people were killed. The number of fatalities from distractions on U.S. roadways is the equivalent of one Metro crash every day of the year. . . . At the NTSB, our charge is to investigate accidents, learn from them and recommend changes. In Gray Summit and on highways across the United States, thousands of people were killed last year in the blink of an eye. In the typing of a text. In the push of a send button.”

There was still plenty of mendacious rhetoric at work in the column. It went on to imply that fatal accidents caused by cellphone use are a growing risk. It stated that cellphones and personal digital assistants have become “ubiquitous”; and it cited a study suggesting that 21% of drivers in the Washington, D.C., area have admitted to texting while driving.

Taken together, these emotionally fraught passages clearly implied that some 3,000 people a year are killed in motor-vehicle accidents caused by sending or receiving cellphone text messages. But that’s not true. The “3,000 lives lost” number comes from an NTSB study of “distracted driving” in general. Based on data from that study, the NTSB estimated that fewer than a third of those deaths could be connected to cellphone use. To repeat for emphasis, even that number is an estimate. (Of course, bureaucratic fiefdoms like the NTSB often issue regulatory decrees based on slight justification and without regard to practicality, effectiveness or cost.)

So, Hersman exaggerated the risk of cellphone use while driving by a factor of at least three — and repeated the exaggeration with carefully calibrated verbiage. And, most important, she used the exaggerations and imprecise rhetoric to support an invasive regulatory action.

She may have figured the mendacity was needed because the general trend has been toward greater safety on American highways. In 1990, about 44,600 people died in car crashes in the U.S.; in 2010, that number had dropped to less than 32,900. This drop is even more striking when you consider that the total number of licensed drivers in the U.S. rose significantly over the same period. According to the National Highway Traffic Safety Administration (NHTSA), there were 1.71 deaths per 100 million vehicle-miles driven in 1994 but only 1.09 in 2010. That’s a major improvement — though you’d never know it from Nanny Hersman.

Hersman exaggerated the risk of cellphone use while driving by a factor of at least three, and used the exaggerations to support an invasive regulatory action.

In significant ways, Hersman resembles other current and former Obama administration apparatchiks. Like Julius Genachowski, she is a career Beltway insider whose slavish devotion to big government overwhelms any notion of private-sector economy; like Elizabeth Warren, her background speaks more to bureaucratic credentialing than education in the classical liberal sense.

Hersman’s December decree urged state governments to prohibit text-messaging and other electronic device use while driving. (It calls, specifically, for the 50 states and the District of Columbia to ban “the non-emergency use of portable electronic devices.”) But her urgency was unnecessary: 35 states already have such rules in place.

If “distracted driving” is a problem, why are cellphones a more urgent issue than other sources of distraction — watching kids in the back seat, eating fast food, studying a GPS map, applying makeup, etc.? A cynic might say that a cellphone ban gives state agencies a broad excuse to harass citizens…and a new source of cash flow for government coffers. But statist hacks like Hersman are too earnest for that.

A more likely answer is that a ban on cellphone use in the privacy of one’s own car is a preemptive regulation. And preemptive regulations have two distinctive traits: they are often misused — and, particularly, overused — by state agencies; and they are often based on shaky logical foundations that sound good on first impression but don’t stand up well to rigorous inspection.

That second trait explains why bureaucrats like Hersman use emotional manipulations to promote pre-emptive regulations.

An important point: The feds’ own research underscored the futility of Hersman’s gesture. An NHTSA report on accidents “involving” cellphones as the cause of fatalities stated that:

“Sixteen percent of fatal crashes in 2009 involved reports of distracted driving and ... of those people killed in distracted-driving-related crashes, 995 involved reports of a cellphone as a distraction (18% of fatalities in distraction-related crashes).”

So, Nanny Hersman proposed banning cellphones in cars to reduce a risk that causes — at most — 2.9% of traffic-related deaths.

There may have been other factors affecting her thinking. A few months before Hersman’s proposal, the U.S. Senate considered a Department of Transportation spending bill that set up a $10 million grant program aimed at helping states combat “distracted driving” — and especially texting behind the wheel. According to the bill (S. 1596):

“While there is no definitive data as to how many distracted driving deaths and injuries are caused by cellphone use and texting, 20% of the drivers involved in fatal accidents in 2009 were either using or in the presence of a cellphone at the time of the crash, and there is reason to be concerned about whether the recent rise in distracted driving fatalities is linked to the increasing use of electronic devices.”

Admitting they had “no definitive data” to support their actions, the Solons would bribe states to prohibit citizens from operating a vehicle while in the “presence of a cellphone.” Maybe Hersman wanted the NTSB to administer the grants to the states.

If “distracted driving” is a problem, why are cellphones a more urgent issue than other sources of distraction — watching kids in the back seat, eating fast food, studying a GPS map, applying makeup?

The Senate bill also required $5 million to be set aside “for the development, production, and use of broadcast and print media advertising to support enforcement of State laws to prevent distracted driving.” Maybe Hersman wanted the NTSB to produce those ads . . . and its chairman to star in them.

The Obama administration has never been shy about manipulating numbers and emotions to support its various statist schemes and bureaucratic boondoggles. Specifically:

  1. According to the Census Bureau, more than 30 million Americans — one in every seven — live in poverty. And that number is growing, in part, because the Obama administration has expanded the definition of the word “poverty.” The administration has worked to delink the concepts of poverty and deprivation…and redefined poverty instead as being “about inequality.” Traditional metrics of poverty have focused on absolute purchasing power — how much food or durable goods a person can buy; the Obama administration’s metrics focus instead on comparative purchasing power — how much food or durable goods a person can buy relative to other people. This is a statistical trick designed to assure that a fixed portion of the population will always be poor.
  2. In the spring of 2011, Obama administration officials publicized the possibility that “82% of U.S. schools” could be rated as failing, according to metrics established by the No Child Left Behind program. Department of Education Secretary Arne Duncan repeated this statistic in numerous speeches — even though education experts called the number “unverified,” “likely exaggerated” and “meaningless to the schools that are being rated.” Even after several education policy groups challenged Duncan’s emotional rhetoric, he and other administration officials showed no inclination to make more precise statements. Some observers suggested the administration’s goal was, rather than issuing reliable numbers, to scare Congress into approving its spending goals.
  3. In the fall of 2011, a heated exchange between Rep. Connie Mack (R-FL) and Labor Secretary Hilda Solis made clear that tension between the Obama administration and congressional Republicans over the president’s efforts to bolster the clean energy economy was getting worse. Mack scoffed at administration projections that counted drivers of hybrid buses as “green jobs.” (This dispute occurred during the height of public outrage over Department of Energy loan guarantees — funded through Obama’s $825 billion stimulus plan — to bankrupt solar energy company Solyndra.) Some lawmakers argued that the Obama administration exaggerated the impact that its “green energy” policies had on improving the economy and creating jobs.
  4. In late 2011, immigration policy groups noted that the Obama Administration had inflated statistics to suggest that it had deported a “record-high number of illegal immigrants with criminal records.” In fact, the real deportation figure was closer to an historic low. In October 2011, Obama’s Immigration and Customs Enforcement (ICE) director had announced that nearly 55% of the record 396,906 illegal immigrants deported in FY2011 were convicted of felonies or crimes. But the real figure was less than 15%, according to federal records obtained through the Freedom of Information Act (FOIA) by the Transactional Records Access Clearinghouse (TRAC). Specifically, the average rate across the four quarters for FY 2011 was 14.9%.
  5. In October 2011, the web site FactCheck.org caught the Obama administration exaggerating the impact of a proposed additional round of “stimulus” spending. (The administration had predicted that its previous stimulus plan would “save or create” millions of jobs. Those predictions turned out to be wrong — some 1.2 million American jobs had been lost during the two years following passage of the 2009 stimulus. In 2011, Obama claimed that “independent economists” agreed that a new stimulus package would “create nearly 2 million jobs next year.” But FactCheck.org countered that the “median estimate in a survey of 34 economists showed 288,000 jobs could be saved or created over two years under the president’s plan.”

Focusing on this or that political prevarication is easy and, on a reptilian level, fun (on this topic, I commend to you Vaclav Havel’s great New Year’s Day 1990 speech on statist lies). But there’s also a bigger point raised by the meddling of bureaucratic schemers like Deborah Hersman and Barack Obama. Specifically: what burden of proof should be borne by a party who proposes a law or regulation?

The feds’ own research underscored the futility of Hersman’s gesture.

The statists who support Obama argue that the answer to that question is “none.” They argue that bureaucrats are by definition well-meaning and laws or regulations they propose should be presumed virtuous and effective. According to this peculiar logic, the burden of proof falls on those who question the proposed laws or regulations. Here’s one commenter’s defense of Nanny Hersman’s decree:

“Ms. Hersman was appointed to the NTSB in 2004. I can’t for the life of me figure out what possible political (or other nefarious) agenda she could possibly have in recommending that states ban cellphone usage while driving. I don’t see why we can’t assume that she is a conscientious officer who has looked at the question and sincerely believes that the evidence supports her recommendation. . . . I challenge you to find any study that shows that texting or mobile phone use does not impair driving ability. You won’t find any.”

So, unless citizens can prove something isn’t bad, conscientious officers can ban that thing. This is sophistry. And, in the case of Hersman’s proposed cellphone ban, it’s threadbare sophistry.

A more coherent — and liberty-friendly — approach to government regulation would be that, if a state agency proposes restricting or banning some object or action, it must first prove that:

  1. the object or action accounts directly for some demonstrable economic loss, and
  2. restricting or banning the object or action will alleviate the loss.

If the agency can’t establish both points, then its proposal would be ignored.

And even if the agency can establish both points, citizens would demand a cost-benefit analysis of the proposed regulation that establishes with some confidence that it will save more in economic losses than it will cost to enforce.

This approach would reduce the amount of statist noise generated by the present administration. And future ones, too.

Back to the point: statists claim that bureaucratic drivel like Hersman’s proposed cellphone ban should be presumed valid. And that those who question it must prove the validity of their questions.

The fruitless search for zero risk fits well into this warped thinking. Whether the particulars involve texting on cellphones, smoking cigarettes, wearing seatbelts, eating Big Macs, or anything else, statist busybodies justify their requirements, prohibitions and other petty tyrannies with good intent. And they imply that their opponents are in favor of the bad outcomes of risky behavior — or are “against safety.”

But a quick text message sent home or to work while driving on an empty country road or stopped in traffic might be as effective a safety measure as wearing a seat belt. Because text messages are time-stamped, people who care about you can know where you were at a given time; this is important, if you don’t show up as expected.

Whether the particulars involve texting on cellphones, smoking cigarettes, wearing seatbelts, eating Big Macs, or anything else, statist busybodies justify their requirements, prohibitions and other petty tyrannies with good intent.

This sort of effective communication may have something to do with the overall trend toward safer U.S. highways. (And most of the existing state laws that restrict or prohibit cellphone use while driving specifically exempt emergency use — such as calls to the highway patrol to report dangerous conditions, etc.)

As I’ve noted, Hersman’s decree was unnecessary. Most states already have laws in place restricting cellphone use by people driving cars; and all states have reckless driving laws that apply to situations in which cellphone use causes dangerous results. But, as one online commenter noted:

“Enforcing laws is so boring. Not only is it work, you get little political benefit from mundane enforcement stuff as it rarely makes the papers. And enforcement of laws may even upset people, causing political problems. But passing laws, now that’s sexy.”

Well, there’s no accounting for taste.

The most damning indictment of the proposed cellphone ban comes from a statistical study conducted by researchers at the Colorado School of Mines. They note:

“On July 1, 2008, California enacted a ban on hand-held cellphone use while driving. Using California Highway Patrol panel accident data for California freeways from January 1, 2008, to December 3, 2008, we examine whether this policy reduced the number of accidents on California highways. To control for unobserved time-varying effects that could be correlated with the ban, we use high-frequency data and a regression discontinuity design. We find no evidence that the ban on hand-held cellphone use led to a reduction in traffic accidents.”

This study is preliminary and based on limited data — but it doesn’t bode well for the cost-effectiveness of Hersman’s futile gesture.

Bureaucrats promulgate regulations. It’s their lifeblood, the air they breathe. A bureaucrat isn’t fulfilling her statist destiny unless she banning or prohibiting something.

But free citizens need to keep in mind that the United States is a country built on the philosophical premise that everything not banned is permitted instead of the tyrannical axiom that everything not permitted is banned.

It’s right there, in the Tenth Amendment to the Constitution. Nanny Hersman and her current boss should take a look.




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A Costly Epiphany

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A recent article struck my eye as worthy of some comment. It is a story completely ignored in the mainstream media, but fascinating nonetheless.

It reports that Rep. John Mica (R-FL), the very congressman who authored the bill that created the Transportation Security Agency (TSA) after the terrorist attacks of 9/11, is now having second thoughts about his creation. In fact, he now favors dismantling and even privatizing it.

Mica, who heads the House Transportation Committee, is candid in acknowledging that the TSA is now a poster child for the Law of Unintended Consequences. He notes that the agency has metastasized (as government agencies are wont to do). It went from a $2 billion to a $9 billion “enterprise.” And Mica avers with apparent astonishment, “The whole program has been hijacked by bureaucrats.”

This, of course, makes one want to ask Mica whether he can name any government program not hijacked by bureaucrats. But I digress.

Mica rates the performance of the TSA collectively as a “D-,” and calls the agency a “fiasco.” It is purely reactive, he notes. It required all of us who fly to take off our shoes after only one man (Richard Reid) tried putting bombs in his shoes. He also notes that the agents who pat us down (or in some cases feel us up) because of the underwear bomber have failed to detect any threats in ten years.

It cost $1 billion to train the TSA’s 62,000 workers. Mica says he thinks that the agency should have only about 5,000 workers, and do what he originally intended it to do: gather intelligence in order to uncover terrorist threats and inform the airlines and airports.

The article rehearses some of the more egregious incidents in the agency’s history. In 2002, when it hired 30,000 screeners, the $104 million it gave a company to train these workers ballooned to $740 million. One executive for the company was paid $5.4 million for nine months’ work. Some recruiting sessions were held at tony resorts in Colorado, Florida, and the Virgin Islands. Hundreds of thousands of bucks were splurged on valet parking, beverages, and cash withdrawals, including $2,000 for Starbucks coffee and $8,000 for elevator operators. (At least the luxury-class people conducting these sessions were big tippers.)

Add to this the fact that for years the agency failed to track lost passes and uniforms, and the fact that screeners have been arrested for stealing the jewelry, computers, cameras, cash, and credit cards of travelers, and the fact that in 2006, screeners at two of the biggest airports were unable to find 60% of the simulated bombs planted on fake travelers.

So, having learned firsthand about the Law of Unintended Consequences, Mica now believes the TSA should be privatized and focus on intelligence, not screening. It is gratifying to witness the economic education of a public servant. The pity is that his tuition cost so much of our treasure and our liberty.




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Electrical Fairy Tales

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The marketing hype behind new electric vehicles (EVs) such as the Chevy Volt and the Nissan Leaf makes me think of the title of the 1901 children's novel by L. Frank Baum, The Master Key. Promotions and testimonials designate the EV as the "master key" to environmental harmony, evoking the vision of a green economy in which zero-carbon-footprint EVs shuttle us to sustainable clean energy jobs as our dependence on foreign oil is whisked away in the contaminant-free breeze. But it's the novel's subtitle, "An Electrical Fairy Tale, Founded Upon the Mysteries of Electricity and the Optimism of Its Devotees,"that I chiefly have in mind. It exquisitely captures the substance of the unfolding EV hoax.

The optimism of EV devotees is manifested by the expectation that simpleton consumers will see the absence of tailpipe fumes as the absence of emissions and pollution; that EVs are worth their exorbitant cost, particularly if they eliminate our reliance on OPEC; and that, in EV-world, we will all live happily ever after.The support of simpleton politicians guarantees fairy tales.

The scientifically illiterate media (also devotees) never mention the pollution and carbon emissions created at electrical power plants when EV batteries are being charged. Odd that these distant plants are now electrical mysteries, when not that long ago shrill environmentalists frequently reminded us that they were mostly coal- and gas-fired monsters, belching forth devastating fumes as they generate 44.46% and 23.21%, respectively, of our electrical power. Apart from toxic particulates, they release a national average of 1.2 lbs of CO2 for each kWh generated.

The Chevy Volt, to cite one example, can travel 35 miles on its fully charged 16 kWhbattery. Thus, charging the battery by means of the average US power plant creates 19.2 pounds of CO2; in effect, 0.55 pounds of CO2 per mile. The EPA rates the Volt's gas-only fuel economy as 37 mpg. Since a gallon of gasoline produces about 19.6 pounds of CO2 , the Volt produces 0.53 pounds of CO2 per mile. Incredibly, the Volt's carbon footprint is 0.02 pounds per mile larger when powered by its battery — another electrical mystery.

An optimistic devotee might argue that carbon footprints can vary. But an average of 0.55 pounds of CO2 per mile is a long way from clean, and fraudulently far from zero. As to footprint variation: charge an EV in a state such as West Virginia, where coal generates 96% of the electrical energy. There, the Volt will emit 0.95 pounds of CO2 per mile. — almost twice the emission of a gasoline engine.

Wherever you live, if you use your EV for anything much more than occasional errands, battery charging will be a big part of your life. It makes one wonder why charging requirements are trivialized, if mentioned at all — unless it's because of the mysterious nature of electrons. Their activity while the battery charges throughout the night is invisible, as is the charging cost, at least until the utility bill arrives. If you drive an EV, say, 700 miles a month, it must be fully charged at least 21 times each month. In a recent thousand-mile Edmunds road test, the Volt averaged 33 miles on a fully charged battery. In the Northeast, where electricity is 16.09 cents per kilowatt hour, the monthly charging cost would be $54.61; in the Southeast (at 9.57 cents per kilowatt hour), it would be $30.24.

Born of political expediency and founded on bad economics and science, the electric vehicle is a colossal burden for taxpayers, an expensive fantasy for buyers, and a cruel joke on planet savers.

According to the Edmunds review, charging an EV battery by using a standard 120V socket "is like filling a swimming pool with a syringe." Optimistic devotees cite charging times of 12 hours. But charging from 0% to 100% (typical of electric mode only drivers) takes about 20 hours. Edmunds expects that most buyers will need the 240V Level II charging stations, which can complete the charge in less than half the time. They are available for $490, with an additional cost of about $1,500 for home installation — in addition to the $33,000 to $109,000 you paid for your electrified transportation pod. But what's another $2,000 or so when you're saving the planet?

Electrical utilities also anticipate Level II chargers, salivating over the revenues they will produce. But they worry because turning one on is equivalent to adding three homes, all with air conditioning, lights, and laundry running at the same time. Two or three of them running simultaneously in a grid sector is likely to burn out the transformer, blacking out service to the entire sector. Ironically, safety experts want EV manufacturers to add a simulated "vroom" sound alerting pedestrians to the presence of EVs on the street. The added cost of bumper-integrated speakers is a small price to pay for the warning. Presumably, there will be no extra charge for the sound of transformers mysteriously popping as they burn out, alerting sleepers to the presence of EV chargers in the neighborhood.

Our taxes pay for a $7,500 credit to entice less optimistic buyers, and huge subsidies to help EV manufacturers stay in business. Lithium battery companies must be salivating as much as electrical utilities. Last year, for example, a Michigan company was awarded $251 million in federal and state stimulus money. Its plant is expected to employ 400 workers, costing taxpayers $625,000 each. And it is owned by a Korean firm. But imagine the graft that American "entrepreneurs" are getting. Companies are also lining up at the trough for EV battery research and development subsidies. Despite over a century of technological advancement, battery performance is economically inadequate for EVs. Maybe battery designers will have better luck in the next 100 years.

President Obama is among the most optimistic of EV devotees. His test drive last July was ominous. Steering a Volt for about 10 feet at about 2 mph appeared to reaffirm his green economy concept and his campaign pledge to put one million EVs on the road by 2015. He is working diligently behind the curtain of political favoritism and crony capitalism to promote the EV as an integral part of his green economy.

But the EV is a hoax. Born of political expediency and founded on bad economics and science, it is a colossal burden for taxpayers, an expensive fantasy for EV buyers (converted, coerced, or bribed), and a cruel joke on planet savers. Everyone will pay higher taxes, EV buyers will pay at least twice the cost of comparable gasoline powered cars, and their electricity bills will, as President Obama has famously said, "necessarily skyrocket." The fact that the EV actually violates the clean-energy justification for its purchase demonstrates the fraudulence of Obama's plan. EVs result in little or no net reduction in pollution or greenhouse gas emissions. This is equally true for a $109,000 Tesla and a $41,000 Volt. And it would be true if there were a $10,000 model.

It would also be true if a million US drivers bought such a car by 2015, or if enough millions more were thereafter coerced to bring us to the day when we could say goodbye to OPEC. The problem is that this would also be the day we would say hello to Chile, Argentina, and Bolivia, the Saudi Arabias of lithium. Will OLEC (the Organization of Lithium Exporters) treat us any better than OPEC has?

President Obama's plan for the EV is unfolding like an electrical fairy tale of unprecedented magnitude. It calls for millions of Americans to buy uncompetitive, exorbitantly priced, high-maintenance EVs that are not meaningfully cleaner than the vehicles they are supposed to replace — all the while paying higher taxes and electricity rates to finance a scheme that, even if wildly successful, would accomplish nothing beyond enriching electrical utilities and battery manufacturers instead of oil companies and refineries and making us dependent on lithium instead of oil.

This plan is a costly, inane indulgence in fantasy. If the curtain were pulled back, it would reveal a fatuous illusionist, feverishly operating the levers of subsidies, tax credits, and regulatory mandates to orchestrate the scam. Did I mention that Baum also wrote The Wizard of Oz? It is an excellent book to read by candlelight, during EV-induced blackouts.




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Sorry, I'll Take the Plane

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If a freight train leaves Brewster at 9:25 traveling east at 70 miles an hour, and another train leaves Stanton at 9:45 traveling west at 50 miles an hour on the same track, how long will it take before a 98-minute movie becomes suspenseful?

Unfortunately for the viewers, about an hour.

Unstoppable, a movie about a driverless runaway train barreling toward another train full of schoolchildren, ought to be fraught with tension. Add to the out-of-control train several freight cars full of toxic, combustible chemicals that could contaminate whole towns along the way, and the adrenaline should start gushing.

Oddly, however, the tension never mounts. This film has its moments, but that's part of the problem: they are only moments. If a train traveling 70 miles an hour in one direction passes a train slipping onto a side rail going the other way, just in the nick of time, how long does the moment last? A few seconds. In this movie, trains always manage to pull onto the side rails just in time, leaving the audience with all the excitement of playing a game of Snakes on a cell phone. And since the filmmakers give us almost no backstory about the people whose lives are in danger, we feel no cathartic worry or relief until the last half hour of the film, when we finally learn a few things about Frank (Denzel Washington), the 28-year veteran driving a rescue train, and Will (Chris Pine), the rookie on his first assignment as a conductor. Ultimately this is a film about a rookie becoming a man, and that's a pretty good theme. But it takes too long to get there.

The filmmakers want us to regard their work as a metaphor for the BP disaster, blaming the crisis on corporate greed, but it doesn't quite work. The film's initial crisis is caused by driver error, not cost-cutting: when a bloated, bumbling engineer (Ethan Suplee) jumps off a slowly moving train to switch the rails, it gathers speed and gets away from him.

The crisis seems to become more corporate-driven when the VP of Operations (Kevin Dunn) rejects the local yardmaster's suggestion to deliberately derail the train before it reaches more populated areas. "We aren't going to destroy an entire trainload of cars," he barks, obviously worried more about the bottom line than about avoiding human injuries.

Adding to the sense of corporate greed and insensitivity, the company's owner (Andy Umberger) is reached on the golf course, where he gives instructions and goes back to his game. Oh, these dirty, greedy capitalists! Selfish to the core! It's clearly a reference to BP President Tony Hayward's decision last summer to attend the annual sailing regatta around the Isle of Wight while millions of gallons of crude were gushing into the Gulf of Mexico.

But isn't it wise and prudent for a company to examine all its options before derailing an expensive asset and possibly releasing toxic elements into the environment, even if that environment is outside the city limits? Doesn't every company have to balance the costs of safety and employee benefits against consumer prices and profits? If costs outweigh profits, the company will simply cease to function. Moreover, one has to wonder why the seasoned VP of Operations would trust the judgment of a young, nubile, strangely glamorous yardmaster Connie (30-year-old Rosario Dawson), whose employee caused the problem in the first place.

The most interesting part of this film deals with the inner workings of train safety systems — the switching of the rails to change a train's course, the dead man's automatic braking system (unavailable in this case because the same bumbling engineer hasn't taken time to connect the air brakes), the use of external locomotives to slow a runaway train, and even frontage roads that allow access to moving trains. All of this makes the film interesting, if not fascinating.

Denzel Washington worked with director Tony Scott last year on a taut, suspenseful runaway train movie, The Taking of Pelham 1 2 3 (2009), so they should know how to build suspense: Make us care about the characters. That 2009 film is more about the cat-and-mouse interplay between Washington's character and John Travolta's crazed antagonist than it is about the train, and it works. By contrast, this film feels almost like a made-for-TV documentary reenactment, and it doesn't work.

Watch for Unstoppable in your local television listings. It will be there soon. But it isn't worth the price of a theater ticket when so many better fil

#39;s suggestion to deliberately derail the train before it reaches more populated areas. The most interesting part of this film deals with the inner workings of train safety systems


Editor's Note: Review of "Unstoppable," directed by Tony Scott. Twentieth Century Fox, 2010, 98 minutes.



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