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Here are Maryland Public Television's Jeff Salkin and I talking about changes the state has made to the required "price to compare" published for electricity shoppers. Tuesday's column will be an update on Maryland household electricity shopping.
EDF Group, the junior partner of Constellation Energy in an effort to build one of the first new nuclear plants in years, at Calvert Cliffs in Maryland, reported sharply lower profits. One of the factors: lower prices generally in the U.S. power market. The company also mentioned a delay in getting Energy Departmet financing backing for the Calvert Cliffs plant. Says Bloomberg:
The utility took a provision of 1.1 billion euros (1.44 billion euros) related to its holding in Constellation Energy Group Inc. due to the “less favorable” outlook for power prices for existing power generators and a planned new nuclear reactor at Calvert Cliffs, the Paris-based company said in an e- mailed statement.
Translation: The failure of climate-change legislation in the Senate makes nuclear power less attractive in the future and less likely to make money. Also, prospects for lower natural gas prices in years to come also makes nuclear look less attractive. Add this to the delay in government loan guarantees for the Calvert Cliffs project, and the project looks less likely to be followed through on. This is the topic of my column that will be in Sunday's newspaper.
Martin O'Malley spokesman Rick Abbruzzese pushes back against a Sun editorial, "O'Malley's Reckless Slots Politics," that slams the governor for backing a referendum against a slot-machine parlor at Arundel Mills mall. "Mr. O'Malley has recently publicly supported the referendum and has indicated that he will seek to make an issue of Mr. Ehrlich's ties to the effort to bring slots to the mall," the Sun said, saying the move "smacks of political opportunism."
Abbruzzese says O'Malley has always preferred slots to be at the horse tracks, offering as evidence a piece in the Sun from October that said: "Gov. Martin O’Malley has said repeatedly that he would prefer to have slots at horse tracks, where patrons already are allowed to gamble. He has publicly urged the County Council to act - either for or against the mall project - saying that the slots program needs to move forward." Also, a Washington Post piece from the same time said: "Maryland Gov. Martin O'Malley (D) said Friday that he 'will not be angry' if a local zoning decision sinks the state's largest proposed slots casino at Arundel Mills mall."
Maybe not being being angry about a defeat for Arundel Mills slots is not the same thing as publicly sympathizing with the people trying to defeat Maryland's best, largest hope for significant slots revenue anytime soon. Here's O'Malley in the WP a few days ago:
"I can certainly understand why the people of northern Anne Arundel County would prefer not to have a slots emporium at a mall in a residential area," O'Malley said in an interview. "If I lived there, I'd rather see it at a racetrack."
Plaintiffs attorney Billy Murphy called yesterday and posted a comment last night to object to my post on the verdict and award in the personal injury trial involving 20 employees in the Pier 5 Ruth's Chris steakhouse. I'm always happy to to highlight responses from principals involved in blog topics.
His main point was that there was substantial medical evidence in the trial showing that the employees were permanently injured by the CO exposure. (Nobody disputes the fact of the exposure.) Murphy:
The evidence of this damage was clearly visible from state-of-the-art high resolution MRIs, functional MRIs and CT scans, which showed irreversible damage to key areas of the brain which caused severe and persistent headaches; severe loss of short-term memory and the ability to focus, concentrate, and multitask; severe personality changes (depression, anxiety, symptoms of post-traumatic stress, disorder, inappropriate anger and the persistent urge to withdraw from friends, loved ones and strangers), all of which persist to this day.All of this evidence and testimony was supported by the vast weight of current medical literature on this subject.
He also says I misunderstood a quote in the Daily Record, in which plaintiff lawyer Mary V. McNamara-Koch told the jury: “A lot of people [in their families] don’t understand" the plaintiffs' medical problems. Rather than indicating that the family members saw no symptoms, McNamara-Koch was saying that they were baffled by the employees' depression, memory loss and personality change caused by the carbon monoxide, Murphy said.
The fact that many of the employees are still working at Ruth's Chris doesn't necessarily mean they aren't severely disabled, Murphy added.
Bipartisan leadership of the House Energy Committee sent a letter to the Environmental Protection Agency yesterday asking what the agency will do to do ensure that richer ethanol blends aren't allowed at gas stations without adequate study. Good to see more pushback from responsible members of Congress after the pressure to approve E15 from the Midwestern delegations. An excerpt:
In particular, EPA is currently considering a petition from ethanol producers to allow the sale of gasoline that contains up to 15 percent ethanol (E15). As you consider this petition, we believe it is important that you protect the investments the American people have made in their cars, trucks, boats, lawn mowers, and other engines and equipment, and the investments that many small business owners have made in their gas stations. While E15 may work well in some types of vehicles, preliminary information raises significant questions about whether, in other types of vehicles or engines, E15 may cause durability or operability problems, or increased air pollution.
The whole letter is below the fold.
Congress of the United States
House of Representatives
Committee on Energy and Commerce
2125 Rayburn House Office Building
Washngton, DC 20515
July 29, 2010
The Honorable Lisa Jackson
Administrator
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, NW
Washington, DC 20460
Dear Administrator Jackson:
Some in Congress believe that renewable fuels can play a role in improving our energy security. However, these fuels can only play this role if they are introduced in a manner that adequately protects consumers. They must be integrated into the fuel system in a way that does not damage people's cars, trucks, lawn mowers, boats, or other non-road equipment.
We are writing to request information about what plans, if any, the Environmental Protection Agency (EPA) has developed to ensure that increasing the permissible level of ethanol in gasoline is accomplished in a way that does not present any potential harm to air quality, consumers' investments in cars, trucks, and other engines and equipment, or small business owners' investments in gas stations.
In particular, EPA is currently considering a petition from ethanol producers to allow the sale of gasoline that contains up to 15 percent ethanol (E15). As you consider this petition, we believe it is important that you protect the investments the American people have made in their cars, trucks, boats, lawn mowers, and other engines and equipment, and the investments that many small business owners have made in their gas stations. While E15 may work well in some types of vehicles, preliminary information raises significant questions about whether, in other types of vehicles or engines, E15 may cause durability or operability problems, or increased air pollution. (1) An organization that includes engine and vehicle manufacturers has warned that fueling certain "non-road and on-road equipment with fuels with ethanol content higher than 10% could cause serious, permanent damage to millions of legacy products, emission-related failures, and increased operating hazards for millions of consumers"(2) We believe that EPA should not approve the use of E15 until the agency has sufficient test results to allow you to assure consumers that use of E15 will not harm their vehicles or engines.
Congress' desire to balance increased use of renewable fuels with the protection of consumers' vehicles and engines was reflected in the Energy Independence and Security Act of 2007 (EISA). In recognition of the potential benefits of renewable fuels, section 202 of EISA increased the amount of renewable fuel that oil companies must sell, ultimately requiring 36 billion gallons a year in 2022. This was balanced with section 251 ofEISA, in which Congress amended section 211(f)(4) ofthe Clean Air Act such that it prevents the sale of E15 unless the agency makes an affirmative determination that increasing the permissible concentration of ethanol in gasoline would result in a fuel that is compatible with existing cars and trucks, and with non-road equipment (such as boats, lawn mowers, chain saws, etc.). Prior to 2007, under section 211(f)(4), a request to increase the permissible concentration level for ethanol would have been deelned granted unless EPA denied the request within 180 days ofits receipt.
Although section 2 11 (f)(4), as amended, requires EP A to make a decision within 270 days of receiving an application, the applicant has the burden of proving compatibility; EP A does not have an obligation in the 270-day period to conduct tests to support the applicant's request. Given the important potential benefits of renewable fuels and the need to protect existing vehicles and engines, we support the Department of Energy's efforts to conduct the necessary compatibility testing and your decision to await those test results.
EPA has said that if E15 is compatible with some vehicles and engines, but not others, EPA may grant a partial approval of E15 (allowing the use of E15 in certain vehicles and engines, but not in others). Assuming that EPA has authority to grant a partial waiver, EPA should have a well-thought-out and well-executed plan for avoiding misfueling. Without appropriate safeguards, a partial approval could pose major problems for consumers with vehicles or engines that are not compatible with E15. Based on the experience with the transition from leaded to unleaded gasoline, a significant amount of accidental or intentional misfueling would be likely (3) If such misfueling led to operability or durability problems, or increased repair costs, a significant number of consumers could be adversely affected. Public perception of problems with a new fuel formulation can cause a backlash against the fuel formulation and government regulation, as was demonstrated by the introduction of reformulated gasoline in several markets (4)
Allowing the sale of renewable fuel in a way that damages equipment, shortens its life, or requires costly repairs will likely cause a backlash against renewable fuels. It could also seriously undermine the agency's credibility in addressing fuel and engine issues in the future.
To assist the Committee in better understanding these issues, we ask that you answer the enclosed questions.
Please feel free to contact either of us regarding this letter, or have your staff contact Lorie Schmidt of the Committee on Energy and Commerce Majority Staff at 202-225-4407, or Amanda Mertens Campbell of the Committee on Energy and Commerce Minority Staff at 202- 225-3641. Thank you for your attention to this matter.
Sincerely,
Henry A. Waxman, Chairman
Joe Barton, Ranking Member
Edward J. Markey, Chairman, Subcommittee on Energy and Environment
Fred Upton, Ranking Member, Subcommittee on Energy and Environment
QUESTIONS REGARDING THE EFFECT OF E15 ON CONSUMERS' CARS, TRUCKS, AND OTHER ENGINES
• (1) For 2007 and later model year passenger vehicles designed to run on gasoline, can you currently assure consumers that EI5 will not adversely affect the vehicles' operability, durability, safety, and pollution control equipment?
o (a) If so, please list the studies or other information that form the basis for your assurance.
o (b) If not, please describe your current understanding of what effect the use of E15 would have on this group of vehicles.
o (c) Please describe the testing that the Department of Energy is conducting with respect to E15 usage in 2007 and later model year vehicles.
o (d) What percent of the existing gasoline-powered passenger vehicle fleet is comprised of 2007 and later model year vehicles?
• (2) For 200 I tlu•ough 2006 model year passenger vehicles designed to run on gasoline, can you currently assure consumers that E15 will not adversely affect the vehicles' operability, durability, safety, and pollution control equipment?
o (a) If so, please provide the studies or other information that form the basis for your assurance.
o (b) If not, please describe your current understanding of what effect the use of E15 would have on this group of vehicles.
o (c) Please describe the testing that the Depat1ment of Energy is conducting with respect to F 15 usage ill 200 I through 2006 model year vehicles.
o (d) What percent of the existing gasoline-powered motor vehicle fleet is comprised of 2001 through 2006 model year vehicles?
• (3) For 2000 model year and earlier passenger vehicles designed to run on gasoline, can you currently assure consumers that E15 will not adversely affect the vehicles' operability, durability, safety, and pollution control equipment?
o (a) If so, please provide the studies or other information that form the basis for your assurance.
o (b) If not, please describe your current understanding of what effect the use of E15 would have on this group ofvehicles.
o (c) Please describe the testing that the Depat1ment of Energy is conducting with respect to EIS usage in 2000 and earlier model year vehicles.
o (d) What percent of the existing gasoline-powered passenger vehicle fleet is comprised of 2000 and earlier model year vehicles?
• (4) For non-road engines designed to run on gasoline (including boats, lawn mowers, chain saws, and line trimmers), can you currently assure consumers that EI5 will not adversely affect the engines' operability, durability, safety, and pollution control equipment?
o (a) If so, please provide the studies or other information that form the basis for your assurance.
o (b) If not, please describe your current understanding of what effect the use of EI5 would have on non-road engines.
o (c) Please describe any testing that is being conducted with respect to EIS usage in non- road engines.
• (5) Is the testing that the Depattment of Energy is conducting with respect to E 15 sufficient to fully identify the potential risks of increased ethanol blends in vehicles and engines?
• (6) Under what Clean Air Act authority does EPA propose to grant partial, as opposed to universal, approval of E15? In your answer, please explain how EPA interprets the word "any" in section 21 I(f)(4).
• (7) Before using any study as a basis for any final decision on E15, will you make the study results public and provide an opportunity for comment on them before finalizing your decision? If not, why not?
• (8) If EPA were to permit E15 for use in some vehicles and engines, but not in others, would the warranty be voided if consumers were to use E15 in existing cars, trucks, and non- road engines designed to run on gasoline? In answering this question, please explain whether warranty coverage issues depend on whether EPA has approved a waiver for E15.
• (9) What changes in mileage should a consumer expect for any particular vehicle operated on E15 instead of 100 percent gasoline? Instead of E10?
• (10) If EPA were to grant partial approval of El5, could a state or locality ban the sale of E15? If so, under what circumstances? In your answer, please address the impact of Rocky Mountain Farmers Union v. Goldstene , No. CV -F-09-2234 LJO DLB , slip op. (E.D.Cal. June 16, 2010).
• (11) Is EPA developing a plan to avoid (or minimize) misfueling of EI5 if EPA were to grant partial approval of E15?
o (a) If so, what is the plan?
o (b) Will EPA provide public notice and opportunity for comment before finalizing the plan?
o (c) Will EPA allow the sale of EI5 prior to the effective date of such a plan?
o (d) When Assistant Administrator McCarthy briefed our Committee on the status of the EI5 waiver request, she said that the Agency was considering a labeling rule and a public outreach effort to minimize misfueling with E15. Have other options been proposed to EPA? If so, please describe them and state whether they are under consideration.
o (e) How effective does EPA believe a labeling rule would be in avoiding (or minimizing) misfueling?
• (12) Please describe the extent to which EPA is working with private stakeholders (such as ethanol producers, oil companies, auto manufacturers, engine manufacturers, non-road equipment manufacturers, gas station owners, state and local governments, and environmentalists) to develop a plan to avoid misfueling of E15 in the event that EPA grants a partial waiver.
• (13) What kind and how many existing gas pumps and tanks can be used for E IS without increasing the risk ofleaks or other equipment failure?
o (a) How many installed tanks and pumps are certified for the use of E15?
o (b) What are the consequences for gas station owners if they use E15 in a tank or pump that is not certified for E15?
• (14) In section 209 of the EISA, Congress gave EPA 18 months to complete a study of the air quality effects of meeting the renewable fuel standard contained in that law. When will EPA complete that study?
• (15) Please describe the effect of E15 on vehicle and engine evaporative and tailpipe emissions of volatile organic compounds, nitrogen oxides, and air toxics for each of the following types of vehicles and engines:
o (a) 2007 and later model year cars and trucks designed to operate on gasoline.
o (b) 2001 through 2006 model year cars and trucks designed to operate on gasoline.
o (c) 2000 model year and earlier cars and trucks designed to operate on gasoline.
o (d) non-road engines and vehicles designed to operate on gasoline.
• (16) Has EPA conducted any modeling to determine whether an approval of E15 would affect states' abilities to attain and maintain the national ambient air quality standards?
o (a) If so, what does the modeling show?
o (b) If not, does EPA plan to conduct such modeling?
Footnotes
(1) California's Air Resources Board (CARB) staff warned that two studies with match blended gasoline showed increased NOx emissions from on-road engines with increasing ethanol content. CARB Letter Submitted via Email to the EPA Docket ID No. EPA-HG-OAR-2009- 0211 (July 16, 2009). The Alliance for Automobile Manufacturers, after noting that vehicles "commonly remain in use for over 20 years," stated that two studies raise concerns about durability impacts and that one of these studies showed catalyst deterioration after 50,000 miles. Letter to the Honorable Lisa Jackson, et aI., from the Alliance of Automobile Manufacturers (Mar. 31, 2009).
(2) Alliance for a Safe Alternative Fuels Environment (ALLSAFE) and The Outdoor Power Equipment Institute (OPEl), Comments before the Environmental Protection Agency on the Notice of Receipt ofa Clean Air Act Waiver Application To Increase the Allowable Ethanol Content of Gasoline to15 Percent, Docket ID No.: EPA-HQ-OAR-2009-0211 (July20, 2009) at p.4.
(3) In 1982, twelve years after the initial phase-down ofleaded gasoline, an EPA study found that 13.5% of the vehicles designed for unleaded fuel were being misfueled with leaded fuel even though vehicles designed for unleaded gasoline had small fuel inlets that did not accommodate the larger diameter pump nozzles used for leaded gasoline. EPA, Regulation of Fuels and Fuel Additives: Lead Phase Down, Proposed Rule, 49 Fed. Reg. 31032, 31034 (Aug. 2, 1984).
(4) Congressional Research Service, Implementation of the Reformulated Gasoline Program, CRS Report 95-850 (Aug. 1, 1995).
On its face the award of $34 million to 20 people for alleged exposure to carbon monoxide at the Pier 5 Ruth's Chris seems excessive. As Andrew Slutkin points out in Tricia Bishop's story in the Sun, nobody died and nobody was paralyzed. Plaintiffs' lawyers said firefighters who evacuated the restaurant that night two years ago detected CO levels of 700 parts per million, according to Brendan Kearney's story in today's Daily Record. 700 ppm is hazardous by all public health standards.
But potential exposure to hazardous gas is not the same as permanent injury. Even the plaintiffs' families found it hard to detect any lingering disability, plaintiffs' attorney Mary V. McNamara-Koch told the jury, according to the Daily Record.
McNamara-Koch said the plaintiffs’ injuries are not immediately apparent, even to their spouses or friends.“A lot of people don’t understand, but you all do,” McNamara-Koch said to the jury.
There seems to have been a potential health problem at the restaurant that night. But it's hard to believe that the jury was a better judge of the plaintiffs' disability than the families, or Dr. Margit Bleecker. According to the Daily Record, Bleecker was the only doctor who saw the plaintiffs right after the exposure and in ensuing months. Plaintiffs objected to her testimony, presumably because she doubted the claims of injury.
David Rosenberg of Gluskin Sheff (and formerly of Merrill Lynch) is one of the sharpest market strategists around. He has been bearish on stocks for a long time and has been right. He is still bearish. From Tech Ticker:
[Rosenberg] suspects jobless claims will soon be back above 500,000 per week and notes the latest manufacturing data from the regional Federal banks has been lackluster. “I think a lot of the earnings were front-loaded in April," he says. "They disguise, I believe, a slowing in May and June.”Rosenberg also believes analyst earnings estimates for the S&P 500 as a whole are too high. Based on his projections, the S&P 500 should be trading a at least 20% lower. “I will start to more excited about the stock market once we get the S&P 500 down closer to 900 than 1100,” he says.
The whole story and video interview with Rosenberg are here.
As a modern, multimedia news content generator I'm supposed to link to stuff I do on TV and radio. But I forget. Here is some recent yackage.
Why hospitals don't want to cut costs, on the Rodricks show on WYPR.
The earthquake and other stuff with Vanko.
IRS ignores big fish while going after small fry, on Maryland Public TV with Jeff Salkin:
Tuesday's column was about the stupidity of sales-tax holidays, which distort fiscal policy and consumer behavior and whose only fans are politicians. The column took shots at O'Malley and Ehrlich.
There's a lot of this going around. Eighteen states have approved sales-tax respites this year. If the Massachusetts Senate ratifies a tax holiday approved two weeks ago by the House, that'll make 19 — an all-time high, according to a study published Monday by the Tax Foundation.And — surprise! — two-thirds of those states hold gubernatorial elections this year.
I see from my Inbox that Comptroller Peter Franchot is also associating himself with the 1-week sales-tax break that Marylanders will get starting Aug. 8. The names of Washington County Commissioner John Barr and Sen. Don Munson also find themselves in the same press release with Aeropostale, Banana Republic, BCBG MAXAZRIA, J.Crew, Nike, Polo Ralph Lauren & Skechers. Just in case you throught there was anything except marketing going on here.
FOR IMMEDIATE RELEASECONTACT: Sue Helondovitch Angie Riford
Oxford Communications Prime Outlets-Hagerstown
609.397.4242, ext. 176 301.790.2031
shelondovitch@oxfordcommunications.com ariford@primeretail.com
PRIME OUTLETS – HAGERSTOWN CELEBRATES RETURN OF TAX-FREE SHOPPINGComptroller Franchot, Local Officials to Visit Shopping Destination for Official Announcement Thursday, Aug. 5
HAGERSTOWN, MD – July 28, 2010 – As tax-free shopping returns to Maryland following a four-year hiatus Sun., August 8 through Sat., August 14, the more than 100 merchants at Prime Outlets – Hagerstown, the outlet shopping destination located near the Washington, D.C. and Baltimore metro markets, are preparing for thousands of back-to-school, summer clearance and fall fashion shoppers looking to reap the benefits of additional savings opportunities from leading designer and name-brands.
“Given today’s economic climate where consumer are looking for ways to stretch their money farther, Prime Outlets – Hagerstown shoppers are thrilled tax-free week is back in Maryland,” said Prime Outlets Senior Vice President of Marketing Karen E. Fluharty. “From back-to-school shopping and end-of-summer sales to today’s hottest fall looks, we are expecting record traffic at our outlet center where shoppers will save even more beyond the up to 65 percent off regular retail prices we offer every day.” Maryland held its last tax-free shopping period in 2006. Since then, Prime Outlets – Hagerstown’s roster of merchants has expanded greatly where popular name-brands including New York & Company, Under Armour, Coldwater Creek and New Balance will hold their inaugural tax-free shopping week celebrations at the outlet center. “This legislation was passed in an effort to help consumers and give a boost to retailers,” said Comptroller Peter Franchot. “While the state will take a slight tax hit, Marylanders have been devastated by the national recession and deserve this break as they prepare to send their kids back to school.” Along with Comptroller Franchot, Prime Outlets – Hagerstown will welcome County Commissioner John Barr and Senator Don Munson Thursday, August 5 at 1:30 p.m. for a press conference to usher in Maryland’s tax-free shopping week. The press conference will be held in front of Banana Republic at the outlet center. During Maryland’s tax-free shopping week, clothing and footwear items priced at $100 or less will be exempt from Maryland’s six percent sales tax. Items include sweaters, shirts, slacks, jeans, dresses, robes, undergarments, belts, shoes, boots, and more. Prime Outlets –Hagerstown features a comprehensive collection of more than 1000 leading designer and top name-brand such as Aeropostale, Banana Republic, BCBG MAXAZRIA, J.Crew, Nike, Polo Ralph Lauren, Skechers, among many more.
I'll be on the Rodricks show today on WYPR (88.1 FM) with Robert Murray of the Health Services Cost Review Commission and Carmela Coyle of the Maryland Hospital Association. We'll be talking about this column, which said:
In the worst economy in decades, as companies and families downsize and economize, one Maryland industry wants to keep doing business like it's 2007. And it wants you to foot the bill.The Maryland Hospital Association disliked the raise it got this month from regulators...
Ladies and gents, see the Eighth Wonder of the World: An industry that wants immunity from cost-cutting.
Nice story by the WP's Monica Hesse today on how Pepco PR folks are monitoring and trying to deal with Web-spread complaints about the company's failure to quickly fix storm-caused outages.
Baltimore Gas & Electric was also getting its own Twitter hate -- and love -- although the traffic seems to have died down today.
Some of the former:
BlessdBritt Another day without electricity, P.G CO and BGE has GOT to do better! 8:29 AM Jul 27th via twidroidtuleesha Insane! Has power been restored? RT @MLC_1618: Thanks BGE 4 forcing me to take a day off. I needed the rest but would have preferred some AC 2:24 PM Jul 26th via ÜberTwitter
Some of the latter:
SodexoCareers We have power! Thank you @MyBGE your crews worked around the clock and at 3 AM they made it to our neighborhood! about 22 hours ago via TweetDeck
BGE is also tweeting, as @mybge. For example:
BGE has restored more than 98K customers with power since yesterday's storm - about 22K to go. We're working as safely & quickly as possible@SodexoCareers Thanks for the recognition. More than 120K customers were restored since Sunday's storm. A lot of coordination and patience!
One of these days I'm going to get around to writing a column on the thoughtful, realistic libertarians and conservatives who realize that, not only does spending have to be cut to keep the country on a somewhat stable fiscal course, but taxes have to rise. There are many of them. For now though we'll feature the whip-smart and subtle libertarian Tyler Cowen, who not only understands that taxes will probably have to rise but also realizes that climate change and global warming is a big, scary problem that demands action.
Cowen responds to Monday's strange Ross Douthat column and subsequent blogging, in which one of the NYT's token conservative columnists admits that global warming is real (yay) but then suggests we shouldn't do much about it.
Here's Cowen favoring a carbon tax:
Even if we cut government spending a lot, some taxes will have to go up. This seems like the least bad tax to raise or create, since it has some chance of producing a better outcome...Given that American policies are contributing to a (probabilistic) climate-based "attack" on Bangladesh and numerous other countries [through climate-driven flooding -- JH], there is a deonlogical case for trying to stop that attack. It is a libertarian rights violation issue, driven by all of us in our role as consumers....
I'll also stress -- again -- that a carbon tax needs to be combined with the strong deregulation of the energy sector, and the weakening of NIMBY, in particular for wind power.
p.s. I hear less often these days about the "global cooling trend."
A broad coaltion is pushing back against the ethanol industry's attempt to force through an increase in gasoline ethanol content from 10 percent to 15 percent. (See the latest anti-ethanol Hancock column here.)
After what looked like an initial lull, environmentalists, small-engine makers etc. are aggressively taking out ads and otherwise putting out the message that E15 blends haven't been tested nearly enough. It's everybody from the American Frozen Food Council to Friends of the Earth to the Engine Manufacturers Association to the National Council of Chain Restaurants to the Petroleum Marketers Association. (Gas stations worry about what E15 might do to their underground tanks and their liability for environmental damage.) Their Web site is here. 
When Mr. O’Malley proposed expanded gambling during a special legislative session in 2007, he made clear his hope for a relatively limited slots program at the racetracks. If Mr. O’Malley held such a strong conviction that slots didn’t belong at the mall, that might have been a good time to mention it... He might also have made his objection to slots at the mall known when the Cordish Cos. announced its Arundel Mills proposal, or when it became the sole qualified bidder for the Anne Arundel site after the Maryland Jockey Club, owned at the time by the bankrupt Magna Entertainment Corp., failed to put forward the required licensing fee with its application. Instead, he sat on the sidelines while the Anne Arundel County Council spent months debating slots zoning, while the jockey club funded the petition drive for the referendum and while both sides battled over the legality of the referendum in court.
For more on election pandering by O'Malley (and Bob Ehrlich) see today's Hancock column.
UPDATE: Andy Green wrote the post but Cross-Barnet posted it for him.
Under Armour beat Wall Street's estimates for its second quarter profits this morning and upgraded the outlook for the year. The stock is up $1.24 this morning. Previously Under Armour boss Kevin Plank had told Wall Street to expect between $965 million and $985 million in sales for all of 2010. Given the second-quarter results, the company raised its guidance for the year to between $990 million and $1.01 billion. Five years ago UA's sales were about a quarter of that.
A great story. Hey Dick Fuld of Lehman Brothers. Hey Jimmy Cayne of Bear Stearns. This is how you're supposed to get rich in a capitalist society. You create something of value that people want, work hard and sell it.
UA's athletic shoe sales declined by almost $2 million to $35.8 million. I still maintain that the jock cred the company gets from athletic footwear is worth the financial underperformance. Under Armour is doing really well with its Factory House outlets. Administrative overhead went up to open the stores, but they were key factor in the overall sales increase. And gross margins got better.
Yes, the state could save some $829 million from federal health reform over the next decade, as Andrea Walker reports today. That's largely because new batches of federal money are coming in to pay for Marylanders' care. But starting in 2020 the savings begin shrinking, says the Hilltop Institute, which wrote the report analyzing savings.
The problem is that, even as money gets shifted into Maryland from Washington, overall health costs will continue soaring and soaring. Some may use the Hilltop report to suggest that Maryland can relax in its efforts to control medical costs. Says Hilltop:
This favorable forecast, however, must not be permitted to weaken the state’s commitment to reduce the overall cost of health care. First, net savings begin to decline toward the end of the decade, as PPACA shifts a greater share of the financial responsibility for Medicaid Expansion to the states. Second, our health care system will soon be unsustainable, regardless of these savings, unless we succeed in improving quality while reining in the runaway growth in costs. Thus, in addition to realizing the projected savings, the state must reaffirm and strengthen its commitment to immediately begin serious and sustained efforts to bend the cost curve and align incentives toward quality, safety, and efficiency.
Ross Douthat publishes the fallback position of conservatives who oppose doing anything about climate change. This second-resort argument has been predictable since the 1980s, when Forbes magazine and Pat Michaels were trying to impugn science showing that global warming was a threat. OK, they were wrong, conservatives are saying. But it doesn't matter. Douthat:
But the evidence that carbon emissions are altering the planet’s ecology is too convincing to ignore. Conservatives who dismiss climate change as a hoax are making a spectacle of their ignorance.But this doesn’t mean that we should mourn the death of cap-and-trade. It’s possible that the best thing to do about a warming earth — for now, at least — is relatively little.
Incredible stuff. The planet's ecology is being altered but we shouldn't do anything. By this logic we shouldn't have done anything about chlorofluorocarbons eating the ozone layer, either. The people who thought global warming is a hoax were wrong. So are the people who think we don't need to do something about it. Ross Douthat is young enough that I predict he will someday regret this column.
Sunday's column on Baltimore's living wage proposal for big retailers was an attempt to look at the question practically, not ideologically. How to vote if you're a council member with the city's best interests at heart rather than following some ideological playbook or currying favor with voters? The column concluded that what's most important is Baltimore's tax base, and that the risks posed by a living wage bill to the city's tax base far outweigh any benefits to be gained from higher pay for a few thousand people.
To judge from comments on the column, however, this was not a message that got through. There was a lot of, "Oohh, the Waltons who hold Walmart stock are really rich so they should pay workers more." Whether or not you believe this is true, it has nothing to do with whether a struggling, medium-size city should try to mandate a wage increase for big stores when none of the bordering counties is likely to do so.
A nice summary by investment advisor Jeremy Grantham, posted by Big Picture.
Everything You Need to Know About Global Warming in 5 Minutes1) The amount of carbon dioxide (CO2) in the atmosphere, after at least several hundred thousand years of remaining within a constant range, started to rise with the advent of the Industrial Revolution. It has increased by almost 40% and is rising each year. This is certain and straightforward.
2) One of the properties of CO2 is that it creates a greenhouse effect and, all other things being equal, an increase in its concentration in the atmosphere causes the Earth’s temperature to rise. This is just physics. (The amount of other greenhouse gases in the atmosphere, such as methane, has also risen steeply since industrialization, which has added to the impact of higher CO2 levels.)
3) Several other factors, like changes in solar output, have major influences on climate over millennia, but these effects have been observed and measured. They alone cannot explain the rise in the global temperature over the past 50 years.
4) The uncertainties arise when it comes to the interaction between greenhouse gases and other factors in the complicated climate system. It is impossible to be sure exactly how quickly or how much the temperature will rise. But, the past can be measured. The temperature has indeed steadily risen over the past century while greenhouse gas levels have increased. But the forecasts still range very widely for what will happen in the future, ranging from a small but still potentially harmful rise of 1 to 2 degrees Fahrenheit to a potentially disastrous level of +6 to +10 degrees Fahrenheit within this century. A warmer atmosphere melts glaciers and ice sheets, and causes global sea levels to rise. A warmer atmosphere also contains more energy and holds more water, changing the global occurrences of storms, fl oods, and other extreme weather events.
5) Skeptics argue that this wide range of uncertainty about future temperature changes lowers the need to act: “Why spend money when you’re not certain?” But since the penalties can rise at an accelerating rate at the tail, a wider range implies a greater risk (and a greater expected value of the costs.) This is logically and mathematically rigorous and yet is still argued.6) Pascal asks the question: What is the expected value of a very small chance of an infi nite loss? And, he answers, “Infinite.” In this example, what is the cost of lowering CO2 output and having the long-term effect of increasing CO2 turn out to be nominal? The cost appears to be equal to foregoing, once in your life, six months’ to one year’s global growth – 2% to 4% or less. The benefits, even with no warming, include: energy independence from the Middle East; more jobs, since wind and solar power and increased efficiency are more labor-intensive than another coal-fi red power plant; less pollution of streams and air; and an early leadership role for the U.S. in industries that will inevitably become important. Conversely, what are the costs of not acting on prevention when the results turn out to be serious: costs that may dwarf those for prevention; and probable political destabilization from droughts, famine, mass migrations, and even war. And, to Pascal’s real point, what might be the cost at the very extreme end of the distribution: Definitely life changing, possibly life threatening.
7) The biggest cost of all from global warming is likely to be the accumulated loss of biodiversity. This features nowhere in economic cost-benefit analysis because, not surprisingly, it is hard to put a price on that which is priceless.
8) A special word on the right-leaning think tanks: As libertarians, they abhor the need for government spending or even governmental leadership, which in their opinion is best left to private enterprise. In general, this may be an excellent idea. But global warming is a classic tragedy of the commons – seeking your own individual advantage, for once, does not lead to the common good, and the problem desperately needs government leadership and regulation. Sensing this, these think tanks have allowed their drive for desirable policy to trump science. Not a good idea.
9) Also, I should make a brief note to my own group – die hard contrarians. Dear fellow contrarians, I know the majority is usually wrong in the behavioral jungle of the stock market. And Heaven knows I have seen the soft scientists who lead finance theory attempt to bully their way to a uniform acceptance of the bankrupt theory of rational expectations and market efficiency. But climate warming involves hard science. The two most prestigious bastions of hard science are the National Academy in the U.S. and the Royal Society in the U.K., to which Isaac Newton and the rest of that huge 18th century cohort of brilliant scientists belonged. The presidents of both societies wrote a note recently, emphasizing the seriousness of the climate problem and that it was man-made. (See the attachment to last quarter’s Letter.) Both societies have also made full reports on behalf of their membership stating the same. Do we believe the whole elite of science is in a conspiracy? At some point in the development of a scientific truth, contrarians risk becoming flat earthers.
10) Conspiracy theorists claim to believe that global warming is a carefully constructed hoax driven by scientists desperate for … what? Being needled by nonscientific newspaper reports, by blogs, and by right-wing politicians and think tanks? Most hard scientists hate themselves or their colleagues for being in the news. Being a climate scientist spokesman has already become a hindrance to an academic career, including tenure. I have a much simpler but plausible “conspiracy theory”: that fossil energy companies, driven by the need to protect hundreds of billions of dollars of profi ts, encourage obfuscation of the inconvenient scientifi c results.
11) Why are we arguing the issue? Challenging vested interests as powerful as the oil and coal lobbies was never going to be easy. Scientists are not naturally aggressive defenders of arguments. In short, they are conservatives by training: never, ever risk overstating your ideas. The skeptics are far, far more determined and expert propagandists to boot. They are also well funded. That smoking caused cancer was obfuscated deliberately and effectively for 20 years at a cost of hundreds of thousands of extra deaths.
We know that for certain now, yet those who caused this fatal delay have never been held accountable. The profi ts of the oil and coal industry make tobacco’s resources look like a rounding error. In some notable cases, the obfuscators of global warming actually use the same “experts” as the tobacco industry did! The obfuscators’ simple and direct motivation – making money in the near term, which anyone can relate to – combined with their resources and, as it turns out, propaganda talents, have meant that we are arguing the science long after it has been nailed down. I, for one, admire them for their P.R. skills, while wondering, as always: “Have they no grandchildren?”
12) Almost no one wants to change. The long-established status quo is very comfortable, and we are used to its deficiencies. But for this problem we must change. This is never easy.
13) Almost everyone wants to hear good news. They want to believe that dangerous global warming is a hoax. They, therefore, desperately want to believe the skeptics. This is a problem for all of us.
Postscript
Global warming will be the most important investment issue for the foreseeable future. But how to make money around this issue in the next few years is not yet clear to me. In a fast-moving field rife with treacherous politics, there will be many failures. Marketing a “climate” fund would be much easier than outperforming with it.
As Julie Scharper reports, the bill that would require medium-size and large retailers in Baltimore to pay at least $10.59 an hour died in Council committee last night. Usually died in committee means dead, but in this case the bill has a decent chance of rising again. Warren Branch, who voted against the bill last night, could change his mind, as he did with the bottle tax.
Or a majority of the full, 15-member Council could agree to reconsider. Since 9 members, including Branch, are listed as sponsors of the bill, that could happen even if Branch doesn't come around.
I caught the first 90 minutes of testimony, which was of a high quality on both sides. So were the questions from council members. Bishop Douglas Miles was eloquent in favor of the living wage; Baltimore Development Corp. chief Jay Brodie was persuasive in opposition. So was Megan Moore, a 16-year-old woman who urged the committee to reject the bill. She has been searching unsuccessfully for her first job, at any wage, she said. Setting a higher minimum wage for city retailers, she suggested, would decrease the number of jobs and make her search even harder.
The New York Times advances pay czar Kenneth Feinberg's report on the enormous "bonuses" that Wall Street extracted from their companies even as they were being bailed out and kept afloat by taxpayers in late 2008. Of course Citi, which would be in bankruptcy today and its bonus recipients unemployed, barring the federal bailout, is at the top of the list.
Mr. Feinberg’s report points to companies that he says paid eye-popping amounts or used haphazard criteria for awarding bonuses, the people with knowledge of his findings said, and he has singled out Citigroup as the biggest offender.
Not much he can do about it, however, the Times says. Most of the banks have repaid the bailout funds.
Corporate combinations are often billed as mergers of equals. They rarely are. The Lance and Snyder's combo looks pretty close, but Lance is dominant. That might be bad news for Snyder's and Hanover, Pa., where it is based, but it's way too early to tell for sure. It is possible, however, that Hanover would have been better off if Synder's had merged with Utz last year.
In any corporate merger, one way to tell which organization may prove dominant is to see where the CEO of the combined operation comes from. In this case the CEO will be David V. Singer, the Lance CEO. And the corporate headquarters of course will be in Lance's hometown of Charlotte. Synder's CEO Carl E. Lee Jr. is sticking around as president and chief operating officer of the merged firms. But he'll be junior to Singer.
Also, the board of the combined company will have eight present Lance directors and seven present Snyder's directors, another mark of dominance for Lance. The promise of "additional headquarters" in Hanover, "where certain key leaders and functions will continue to be located," is propaganda for consumption in Hanover. That said, there are also positives in this for Snyder's folks, probably including cheaper/better distribution for their products. And Snyder's strength in pretzels is a good reason for the Lance people not to fix what's not broken.
Here's my November column on the failed Snyder's/Utz merger:
President Barack Obama's appointees have promised to crack down on monopolies and other instances where weak competition lets businesses abuse consumers.About time. The administration of President George W. Bush is widely perceived as the wimpiest antitrust regulator in decades, allowing anti-competitive mergers in mobile phone service, washing machines, cruise lines and more.Search engine gorilla Google is No. 1 on the Obama people's list. Ticketmaster and Live Nation, which want to merge and turn their chokehold on live entertainment into a triple-reverse full Nelson, are right behind.
But the Feds must have better things to worry about than whether two little Pennsylvania pretzel companies pose a danger to the American economy. This month Snyder's of Hanover and Utz Quality Foods, both in Hanover, just over the state line from Carroll County, halted a planned merger after regulators intervened.
In deciding to extend its review of the deal, the Federal Trade Commission sought documents that would have cost the companies millions of dollars and months of uncertainty."They were asking for a lot of data - obviously a very expensive process" says Utz President Tom Dempsey. "We looked at it and said, 'We've got to make a business decision here.' We just decided this isn't something we're prepared to go forward on."
Too bad. The merger, which the companies said would have been layoff-free, could have given them fighting weight to compete against monsters Frito-Lay and Kraft. It would have been good for Hanover, where they employ a couple of thousand people.
Not in anybody's imagination (except maybe an antitrust regulator's) could it have hurt consumers.
Between them Frito-Lay and Kraft control well over half of the U.S. snack market. Frito-Lay makes the eponymous chips and other junk food. Kraft makes Ritz and Triscuit crackers and Mister Salty pretzels.
Snyder's market share, by contrast, is about 2 percent. Utz's is even less. Combined, they would control a smaller portion of the snack business than Microsoft's share of Web-search activity. Believe me, that's small.
True, in pretzels Snyder's is the big cheese. Southeastern Pennsylvania is to pretzels what Silicon Valley is to semiconductors. Emerging from the dozens of pretzel makers founded by German immigrants in the late 1800s, Synder's has gone national and somehow fended off Frito-Lay and its Rold Gold brand.
Even so, Snyder's has only 39 percent of the pretzel business, according to Snack World magazine, the holy writ of salty munchables. Add Utz's 6 percent pretzel share and you're still nowhere near a hazardous pretzel monopoly.
The pretzel trade still looks like the beer business from 50 years ago - many small producers staying with their niches and preferred merchants. Numerous pretzel makers operate within a hundred miles of Hanover - Sturgis, Herr's, Anderson, Schultz, Bachman and so forth.
If a Snyder's/Utz pretzel trust managed to stick snackers with big price increases, competitors would undercut it in a snap. In any case, industry consolidation might help consumers by lowering costs.
Under Obama, competition regulators "are very interested in showing people they will be vigorous in challenging mergers," says Robert H. Lande, an antitrust specialist and professor at the University of Baltimore School of Law.
The FTC didn't challenge the pretzel merger, says agency spokesman Mitchell Katz. Asking for extra information "is a normal step in the process," he said.
Yeah, an expensive step - one that for Utz wasn't much different from a hostile court order.
It's true that the anti-monopoly cops need to be back on the beat. But why did they twist themselves into curlicues over a couple of little snack makers?
Amid some musings on evolutionary psychology and the vast differences in the polity of a hunter-gatherer tribal band compared with the polity of a modern nation-state, George Mason University associate professor of economics Robin Hanson says:
Libertarians are right that it would best if people came to see something much smaller than the nation, such as the family, firm, or club, as the natural analogue of the forager-band. But, alas, war propaganda has long worked to cement the notion of our nation as our tribe, and that will be hard to undo. Let us hope tolerance and decentralization will continue due to selection and imitation, together with citizen apathy and reluctance to kick up big national-debate stinks. It may be a good thing that voters seem too bored and distracted to bother with lots of heart-felt national conversations leading to closure on deeply-felt issues. Yeah apathy!
Sunday's column was on the complaints being made by hospitals because they're getting a guaranteed revenue increase at a time when many businesses are seeing revenue and price plunges.
The upshot was: They haven't done enough to cut costs and should stop complaining. Got lots of responses, including this good one from a registered nurse. Agree with many of her points, but there are many ways hospitals can cut costs without cutting back on nurses and quality of care: Close and consolidate hospitals; cut management padding; stop spending millions to subsidize doctors -- and that's just in overhead. Hospitals and doctors also prescribe and perform far too many unnecessary procedures.
Jay: I read your article in the Balt. Sun printed on 7/18 with some skepticism. The article drew my attention as I am a Registered Nurse who celebrated 29 years of nursing this last June. I was a nurse before Managed Care came on the scene. You need to interview the working people who are involved in acute care. Although most of my nursing experience has been in acute care, I left that environment in 2008 and vowed to never return. Any professional who has been in the acute care environment within the last 10 years will inform you that cutting costs is much easier said than done.
As someone who has admitted patients from the ER, I can tell you that people are not coming into the healthcare environment as soon as they need to. Many of our fellow Maryland residents either cannot afford or do not have access to a Primary Care Physician and therefore are not followed-up on a routine basis and use the ER for simple ear infections, a small laceration, something that many times could have been treated in an urgency center or in a Physician's office. That cost gets passed on to all of us. Patients who have chronic illnesses are coming in sicker, they are either never taught how to maintain their chronic illness or they wait too long to seek medical attention therefore, being more ill than is necessary and taking more intense medical care for a longer duration. Managed Care created a market for the insurance companies and helped to curtail Physician costs by preventing the Physicians from testing their patients from head to toe. Someone who came in for abdominal pain could have been checked for heart issues etc. Now, when a patient comes in through the ER and is admitted, they are given a diagnosis and categorized within that diagnosis to receive certain tests, treatments etc. What happens when a patient does not fit the box???? Many times an unrelated symptom may occur which extends the patient's stay and thus medical cost. The "box" helps hospitals obtain reimbursements, it also prevents additional, unrelated testing etc. Technology has indeed helped make medical treatments more streamline, but it comes at a price. A nurse is now tethered to a computer as well as caring for patients at the bedside. Yes, the bedside!!!! Nurses still see patients at the bedside, and if you have not seen your nurse for an hour or more it is because she or he has been seeing the other 8-10 patients they must take care of due to staffing cuts. The technology available today cannot tell if a dressing is saturated, if a patient is choking, if someone needs a urinal. It still takes a pair of human eyes and the skills to interpret symptoms and put it all together. Yes, I do believe the management positions are top-heavy, but eventually those of us at the bedside seek higher positions and if management keeps cutting staffing both managerial and clinical there will be no one available to care for the patients!!!! Taking care of people, is not like running any other business; people die. Everyone cares about the Maryland economy, we have to feed our families too!!! Cutting staffing and wanting cheaper, better healthcare does not work. Believe me, I have seen how healthcare has disintegrated since patients are no longer the focus and reimbursement rules. Hug a nurse today!!!
This morning's 2nd-quarter results from Caterpillar show that there is decent hope that business investment can contribute substantially to the recovery, even if consumers are still hesitant. CAT sales rose 31 percent and profits rose 91 percent, beating analysts' estimates.
The company sells heavy equipment to road builders, construction companies.miners and so forth. “Mining will continue to be the biggest driver of absolute earnings,” analyst Brian Rayle told Bloomberg. Mining companies are preparing to increase extraction in expectation that commodity prices will rise with the recovery. “We continue to be very positive about the longer-term prospects for many of the industries we serve—like mining, energy, infrastructure, electric power and rail," was the canned quote from CAT's CEO.
A lot of this is inventory building, for sure. But that means dealers are optimistic that the recovery will continue. And they seem to be optimistic worldwide. Last quarter CAT machinery sales were up 43 percent in North America, 116 percent in Latin America, 36 percent in Europe and 62 percent in Asia.
Many bogus claims are being made for the financial reform bill, but this is the biggest. Never is a long time.
"Because of this law, the American people will never again be asked to foot the bill for Wall Street's mistakes," Obama said at a signing ceremony for the legislation approved by Congress last week.
NYT's David Leonhardt notes a couple developments.:
According to NASA, 2010 is on course to be the planet’s hottest year since records started in 1880. The current top 10, in descending order, are: 2005, 2007, 2009, 1998, 2002, 2003, 2006, 2004, 2001 and 2008.
And:
Yet when United States senators and their aides file into work on Wednesday, on yet another 90-degree day, they may be on the verge of deciding to do approximately nothing about global warming. The needed 60 votes don’t seem to be there, at least not at the moment.
UPDATE: Sun weather blogger Frank Roylance says:
A 100-degree reading or higher on Saturday would be the sixth triple-digit day so far this summer. That's only happened three times since record-keeping began here in 1871. There were six 100-degree days in 1900, and seven in 1930 and 1988. Stay tuned.
UPDATE: The Intrade contract on whether 2010 will be among the top-five warmest years ever measured is trading around 95 (it pays off at 100), basically suggesting that bettors see it as a sure thing.
Sorry for radio silence. Been out of town for a few days. I'll be looking into this further today. But I'm wondering something about the Court of Appeals ruling on the referendum against David Cordish's proposal to put slots at Arundel Mills mall.
The courts have never allowed a full legal challenge to the validity of the petition signatures in favor of an anti-slots referendum. At the trial Judge Ronald Silkworth disallowed evidence offered from Cordish's people purporting to show that many signatures were bogus. Silkworth's apparent reasoning: This is an appropriation matter, and appropriations can't be decided in referendums, so whether or not the signatures are valid is irrelevant. Now the Court of Appeals seems to have blown Silkworth's logic apart, essentially ordering the referendum to be put on the ballot.
So the grounds barring the evidence casting doubt on the signatures have been wiped out. But will that evidence ever see the light of day? Even as it directed the referendum to go forward, the Court of Appeals remanded the case back to the Circuit Court. Does that mean Cordish can bring new challenges to the signatures in that venue? Or is the remand simply for the purposes of having the lower court issue the order for the referendum?
Northwestern's Lynne Kiesling weighs in on the Maryland PSC's decision to reject smart meters. I missed this when she posted a few weeks ago. Some highlights:
If the regulatory institutions and the regulatory culture constrain the electricity value proposition to the provision of generic service to the exclusion of other product/service/pricing bundles, and if they constrain the business model to one of cost recovery instead of value creation, then the regulators will reject the types of projects that are most likely to create value for consumers and entrepreneurial producers.
And:
You [the electricity regulator], therefore, believe that your power to control is a salutary intervention, even though the dynamism of economic and technological change are proving you wrong on a daily basis. So you make decisions that reinforce your power and control, believing them to be in the best interest of consumers while you deprive those same consumers of the opportunity to make their own autonomous choices.
And:
But in the time that I have been involved in regulation, and in debates over smart grid investments and policy, it is abundantly clear that Mancur Olson was correct, and that regulation actually represents the interests of easily identifiable, politically active interests, not the interests of consumers as a whole. On the consumer side, this means that decisions get made frequently based on the organized, coordinated political actions of so-called consumer advocates (who really represent low-income consumers, not all consumers) and groups like the AARP, who perceive their interests as being best served by the perpetuation of the traditional regulatory model — generic service provided at high reliability, controlling price through strict cost recovery.
The ethanol lobby is out with this:
America’s Number One Smartphone Locates America’s Number One Alternative Fuel(July 15, 2010) Washington - E85 fuel? There’s an app for that. The Renewable Fuels Association (RFA) is proud to announce the new iPhone application used to help flex-fuel vehicle (FFV) drivers access the latest, most accurately geo-coded E85 stations throughout the United States. Developed by Digital Laundry, a Customer Experience Consultancy, this application will also work on the iTouch and iPad. The RFA will sponsor a free download for the first 500 users.
Now somebody needs an app for E0 -- pure, unadulterated fossil energy. Everywhere in central Maryland sells E10 because of summertime pollution regulations. I hear there are a few, sought-after places on the Eastern Shore that sell zero-ethanol gas.
Big Picture by Barry Ritholtz is one of my favorite financial/economics blogs, along with Marginal Revolution. Ritholtz is smart, provocative, informed and responds to evidence and logic, not some ideological cookbook. Today he repeats an earlier theme: Gas-guzzling Americans are much to blame for the BP oil spill. Our insatiable demand for petrol helped push oil companies to the edge of technology and safety, and that led to the disaster. Ritholtz:
[BP was] trying to fulfill our own reckless and irresponsible demands for cheap and plentiful energy. Anyone who is an energy consumer cannot ignore their contribution to what happened.We can be a bit hypocritical in the US of A. We have $50k earners who bought $750k houses, then complained about Goldman Sachs; Walmart shoppers who buy 12 packs of tighty whiteys for $2.99 — then complains about job losses. Or the non voters (the majority of us) who complain about Congress. We energy consumers ought to realize that it is our demand that led to drilling in the GoM.
Its sure is much easier to blame BP, than to accept responsibility for our own role in the spill…
Today he refers to a Bloomberg poll in which a large majority opposed a ban on deepwater drilling. "Almost three-fourths, or 73 percent, say a ban is unnecessary, calling the worst oil spill in U.S. history a 'freak accident,' according to a Bloomberg National Poll," the Bloomberg story says. "Asked who was most to blame for the spill, 44 percent say BP, and 19 percent say lax federal regulations and oversight. One in five say no one is to blame." Responds Barry:
Think about that: 20% of those polled think this is nobody’s fault. So much for the era of personal responsibility . . .
Well, it was a rare accident, an anomaly. And lax federal oversight was certainly a factor. But America's perpetual and petulant demands for cheap oil are the fundamental cause. Would a $2-a-gallon tax on gas, a "Pigou tax" of the kind favored by Ritholtz (and Greg Mankiw, who was head of George W. Bush's Council of Economic Advisers) have prevented the BP catastrophe? That is impossible to say.
When you take federal deductions for paying college tuition, you have to add it back in on your Maryland return. I did not know this. The state just billed me for $369 in back tax and interest for failing to add $4,000 in federal tuition deduction back into my 2008 Maryland income. (See instruction 12, code O in Form 502 instructions.) Should have used TurboTax.
Fast-food places such as McDonald's are busted fairly frequently for making kids work overtime without adequate pay, too long on school days or to perform prohibited tasks. In today's paper Mary Gail Hare writes of a Phoenix McDonald's dinged for more than $30,000 in penalty and back wages. A Pittsburgh McDonald's franchisee had to pay $36,609 in back wages in January. You can browse and search the new releases on wage and hour violations here.
Franchisees are getting squeezed these days by the "dollar menus" promoted by the parent chains. In a poor economy dollar menus are really popular. Look at McDonald's stock. Chains love dollar menus because they get paid a royalty as a percentage of sales; they make money whether the franchisee does or not. But dollar items often cost the franchisees more than a dollar to make and sell. So the temptation to take advantage of teens by making them work off the clock is even greater.
What's puzzling is why the penalties imposed by the Labor Department are so low. When employers abuse employees they're seem to be risking only the money they would have owed anyway plus a small fine.
Speaking of child labor, check out the New York Times report on Philip Morris allegedly benefiting from child-labor abuse on tobacco farms in Kazakhstan.
UPDATAE: Altria spokesman Bill Phelps writes:
You mentioned "Philip Morris" after writing about a number of U.S. fast food companies. The company about which the New York Times wrote today is Philip Morris International, a company that manufactures and sells cigarettes outside of the U.S. I was hoping you'd consider updating your post to include the full name of the company to clarify this is not Philip Morris USA, which sells cigarettes in the United States. These are two entirely separate companies.
The latest "retirement readiness" study from the Employee Benefit Research Institute got a lot of coverage yesterday, The bad news justifiably got most of the press. Many, many Americans aren't saving enough for retirement. But there was some (relative) good news buried in the report. The portion of boomers and GenXers "at risk" of using up their retirement resources is generally lower than it was in 2003, when EBRI did a previous study.
The graph tells the tale. The red bars are the people who aren't saving enough in 2010; the blue bars are from 2003. Each group -- early boomers, late boomers and Xers, is sorted into income categories from low to high. 2003 is not a bad point of comparison because it was a similar stage in the economic and financial cycle. Ie., the stock market wasn't doing so great then, either. 
Bowie & Jensen has put out a news release that's less about the merits of the case and a lot more about the fact that they're suing a famous musician and want you to know it. Don't know who Ne-Yo is? No need to check his publicity files. Bowie & Jensen is happy to flack for him. Says the firm's press release:
Ne-Yo is a fast rising star and has received several nominations at the Grammy Awards during his career; among these are Best Contemporary R&B Album for In My Own Words, Because of You and Year of the Gentleman, Album of the Year for Year of the Gentleman, Best Male R&B Vocal Performance for "So Sick", "Because of You" and "Miss Independent", Best Male Pop Vocal Performance for "Closer", Best R&B Performance by a Duo or Group for "Hate That I Love You" and Best R&B Song for "Hate That I Love You" and "Miss Independent". The MTV Video Music Awards has nominated Ne-Yo once, in 2008 for Best Dancing in a Video for "Closer". Ne-Yo has also received one award from six nominations at the BET Awards. Overall, Ne-Yo has received 8 awards from 31 nominations. Recently, Ne-Yo was honored with four awards at the 2009 ASCAP "Rhythm & Soul Awards." Ne-Yo took home awards for "Closer," "Take a Bow," "Miss Independent." and "Bust it Baby II.
If you want to see the whole press release it's below the fold.
UPDATE: Karen McGagh, who wrote the press release for Bowie & Jensen, disavows any and all intention to draw cheap attention to the firm by seeming to go googy-eyed over a rap-star legal opponent.
“That really wasn’t the intention," she says. "These guys [the clients] have tried to settle with his handlers three or four times. This is really about, this shouldn't go to trial. I put some stuff in about Ne-Yo because I'm from the 70s and because the last band I remember is Journey." The firm, she says "are really good people, and if I misrepresented them I failed. I didn't know who [Ne-Yo] was. I know Steve Perry. I know Ringo Starr. I know Crosby Still Nash & Young."
FOR IMMEDIATE RELEASE: MEDIA CONTACT:
July 13, 2010 Karen McGagh, KMC
Karen@karenmcgagh.com
+443-632-4217
GRAMMY AWARD WINNING ARTIST NE-YO ORDERED TO STAND TRIAL
A No-Show at a Seattle New Year's Eve Party; this is Ne-Yo's Third Suit in as Many Years
Towson, MD - Grammy-winning R&B artist Ne-Yo and his booking agency have been ordered to stand trial after the singer allegedly backed out of a 2009 New Year's Eve performance in the Seattle area at the last minute, after tickets ranging from $125 to $1,275 for a platinum VIP package were sold, first class airline tickets were booked and swank hotel rooms were paid for. Partygoers and planners were left with a stack of bills, unhappy guests and damaged reputations in an industry where who can deliver the best performer is the difference between career success and failure.
Ne-Yo and his booking agency are facing a $500,000 lawsuit in Anne Arundel County, MD. Kenyohn Clark of Wet Entertainment LLC in Washington State is also seeking $1 million in damages from Ne-Yo's booking agent, Mike Esterman, for not ensuring Ne-Yo's appearance and refusing to refund Wet Entertainment's $95,000 deposit.
Esterman told MTV News that the lawsuit is without merit but Judge Paul Garvey Goetze, an Associate Judge for the Circuit Court of Anne Arundel County disagreed and denied Ne-Yo's motion to dismiss the suit. Ne-Yo and his team will go to trial in Annapolis at the end of July in Anne Arundel County.
"Ne-Yo failed to appear at a New Year's Eve concert and no defense exists that would excuse his failure to appear," the lawsuit states, adding Clark's and Wet Entertainment's "reputations in the music industry and entertainment community have been damaged."
Esterman is chief executive officer of Esterman Entertainment Inc. outside of Annapolis, Maryland. The parties previously agreed any legal action stemming from the contract would be heard in Anne Arundel County, Maryland where Esterman is based. Ne-Yo is named in the lawsuit under his given name, Shaffer Smith.
Jason C. Brino of Bowie & Jensen LLC, the Maryland law firm representing Wet Entertainment, says Ne-Yo is a great young performer whose handlers just aren't giving him good advice.
"This matter could have and should have been resolved a long time ago, " said Brino. "Our client just wants to be made whole for the monies paid and preparations made for NeYo's appearance. The damage to our client's reputation is probably irreparable."
The contract began when Clark and Esterman Entertainment reached an agreement in early December 2009 for Ne-Yo to headline a New Year's Eve party in Bellevue, Wash., on Dec. 31 at a cost of $140,000. Approximately 1,500 tickets were sold for the event, the lawsuit states; an online event flier said ticket prices ranged from $125 for general admission to $1,275 for a platinum VIP package.
In addition to arranging the performance, Wet Entertainment reserved hotel rooms and space for an after-party following the show and bought first-class airline tickets for Esterman, Ne-Yo and several others.
This is not Ne-Yo's first law suit. Ne-Yo settled a $700,000 lawsuit filed in January 2008 against tour promoter Rowe Entertainment after he was dropped from an R. Kelly tour in late 2007. The young singer claimed that he was dropped from the tour after just two shows because he was upstaging R. Kelly; a rep for Kelly denied that claim and maintained that the matter was a contractual issue between Ne-Yo and the promoter. Kelly was not named in the lawsuit.
In March 2010 another promoter filed a $700,000 suit after the singer kept fans waiting and was a no-show at a concert, not once but twice. This suit was filed in Atlanta's Fulton Superior Court.
Ne-Yo is a fast rising star and has received several nominations at the Grammy Awards during his career; among these are Best Contemporary R&B Album for In My Own Words, Because of You and Year of the Gentleman, Album of the Year for Year of the Gentleman, Best Male R&B Vocal Performance for "So Sick", "Because of You" and "Miss Independent", Best Male Pop Vocal Performance for "Closer", Best R&B Performance by a Duo or Group for "Hate That I Love You" and Best R&B Song for "Hate That I Love You" and "Miss Independent". The MTV Video Music Awards has nominated Ne-Yo once, in 2008 for Best Dancing in a Video for "Closer". Ne-Yo has also received one award from six nominations at the BET Awards. Overall, Ne-Yo has received 8 awards from 31 nominations.
Recently, Ne-Yo was honored with four awards at the 2009 ASCAP "Rhythm & Soul Awards." Ne-Yo took home awards for "Closer," "Take a Bow," "Miss Independent." and "Bust it Baby II.
Bowie & Jensen is a Maryland-based law firm with attorneys representing clients around the world. Bowie & Jensen focuses on Business Litigation, Business Transactions, Intellectual Property, Employment Law, Estates & Trusts, Tax and Construction Law. For more information on Bowie & Jensen, please visit www.bowie-jensen.com.
About Bowie & Jensen
Bowie & Jensen is a Maryland-based law firm with attorneys representing clients around the world. Bowie & Jensen focuses on Business Litigation, Business Transactions, Entertainment Law, Intellectual Property, Employment Law, Estates & Trusts, Tax and Construction Law. For more information on Bowie & Jensen, please visit www.bowie-jensen.com.
I am not privy to the reasons that led President David McCreight to resign from Under Armour.
But his exit is certainly not "a natural part of building the platform for a large, scalable business," as spokeswoman Diane Pelkey told my colleague Andrea Walker. You don't hire a No. 2 executive and expect to keep him for only two years. If you're McCreight you certainly don't take a job if you think you'll be on the streets 24 months later. He had another year to go on his contract, and he doesn't seem to have a new job lined up.
"I look forward to working with the entire team to help sustain the growth the brand expects to achieve well into the future," was McCreight's canned quote when he was hired at Under Armour.
Nor do I necessarily buy the explanation from analysts, that UA has brand presidents who made McCreight's job redundant. It would not be unusual for the old story -- hard-charging, up-and-coming exec feels stymied by corporate founder who's not going anywhere -- to have been repeated here.
Lots of reaction to Sunday's column on Dr. Donald Berwick, the self-described "radicalized" doctor appointed by Obama to take over Medicare and Medicaid. I'll respond to some of the objections.
This will lead to socialized medicine.
Medicine is already socialized. Get used to it. Private insurance is the socialization of risk with a corporate fig leaf. Nobody pays for health care the way they pay for cars and coffee.
But I paid my fair share into Medicare. I deserve whatever care my doctor wants to give me even if the cost far outweighs the benefits.
Sorry, but one serious illness usually wipes out what anybody paid into Medicare over their career. Medicare is spending hugely more than it takes in. That's the problem.
If only we could stop giving money to people on welfare with seven kids and no jobs, we could keep paying for Medicare for responsible people like me.
A safety net for the poor is an integral part of a rich, modern society, but leave that aside. There's not enough money there to pay for Medicare. Medicare is so huge and threatening that it overwhelms and renders irrelevant other social programs except Social Security, which isn't in nearly as much trouble. You could pay for Medicare growth by sharply cutting defense spending, but I hear that argument much more rarely.
We can fix health care by privatizing it. Just end all the government programs and give people tax credits to buy health insurance.
Besides the moral problems -- extreme privatization would leave millions uninsured in the richest country in the world -- privatization will wouldn't stop extreme medical inflation. Economist Kenneth Arrow showed years ago that health care isn't like any other product and defies attempts to treat it like coffee and cars. There's a knowledge problem. Patients can't intelligently buy health services that they don't have the training to understand. There's an agency problem. The decisions on what to buy are made by one third party -- the doctor -- and paid for by another third party -- the insurance company. And demand for health care is extremely inelastic. We want more more more, especially when somebody else is paying.
Free markets are wonderful. They have brought millions of humans out of poverty. But there are large problems when applying markets to 21st century health care.
It's turning into another hugely profitable but jobless recovery for corporations. From the NYT:
“It has been one of the strongest profits recoveries ever,” said David S. Bianco, chief United States equity strategist for Bank of America Merrill Lynch. “You have got to go back to the Depression to find a profits recovery that outpaces this one.”
Tyler Cowen is baffled.
Ten-year-old Bay National Bank was closed by federal regulators this afternoon and will reopen its branches on Monday as Bay Bank, the FDIC said. It'll cost the Deposit Insurance Fund $17 million. This is the first Maryland bank closure in a few months but the fourth in two years. Says the agency:
Depositors of Bay National Bank will automatically become depositors of Bay Bank, FSB. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage. Customers of Bay National Bank should continue to use their existing branch until they receive notice from Bay Bank, FSB that it has completed systems changes to allow other Bay Bank, FSB branches to process their accounts as well.
Here is the entire statement from the FDIC:
Bay Bank, FSB, Lutherville, Maryland, Assumes all of the Deposits of Bay National Bank, Baltimore, MarylandFOR IMMEDIATE RELEASE
July 9, 2010 Media Contact:
LaJuan Williams-Young
(202) 898-3876
Email: Lwilliams-young@fdic.gov
Bay National Bank, Baltimore, Maryland, was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Bay Bank, FSB, Lutherville, Maryland, to assume all of the deposits of Bay National Bank.
The two branches of Bay National Bank will reopen on Monday as branches of Bay Bank, FSB. Depositors of Bay National Bank will automatically become depositors of Bay Bank, FSB. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage. Customers of Bay National Bank should continue to use their existing branch until they receive notice from Bay Bank, FSB that it has completed systems changes to allow other Bay Bank, FSB branches to process their accounts as well.This evening and over the weekend, depositors of Bay National Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of March 31, 2010, Bay National Bank had approximately $282.2 million in total assets and $276.1 million in total deposits. Bay Bank, FSB did not pay the FDIC a premium for the deposits of Bay National Bank. In addition to assuming all of the deposits of the failed bank, Bay Bank, FSB agreed to purchase essentially all of the assets of the failed bank.
Customers who have questions about today's transaction can call the FDIC toll-free at 1-800-323-6111. The phone number will be operational this evening until 9:00 p.m., Eastern Daylight Time (EDT); on Saturday from 9:00 a.m. to 6:00 p.m., EDT; on Sunday from noon to 6:00 p.m., EDT; and thereafter from 8:00 a.m. to 8:00 p.m., EDT. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/baynatlmd.html.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $17.4 million. Compared to other alternatives, Bay Bank, FSB's acquisition was the "least costly" resolution for the FDIC's DIF. Bay National Bank is the 87th FDIC-insured institution to fail in the nation this year, and the second in Maryland. The last FDIC-insured institution closed in the state was Waterfield Bank, Germantown, on March 5, 2010.
Lindsay Lohan, sentenced to 90 days, tweets a reference to a Cato Institute article on mandatory sentences. The Institute is falling over itself.
I have received letters from prisoners around the country who have read a Cato publication, or seen a Cato event on C-SPAN, but this is our first celebrity tweet. The Institute is now abuzz!
But what does she think about the contribution of fractional-reserve banking to boom-cycle malinvestment?
David Streitfeld's story in today's NYT reports high proportions of million-dollar mortgages going into default and concludes:
the CoreLogic data suggest that many of the well-to-do are purposely dumping their financially draining properties, just as they would any sour investment.
This may be true, but Streitfeld doesn't demonstrate it very well in the story. The "lavish" neighborhoods he cites to back up his lede are mainly in the San Francisco bay area -- Silicon Valley and Orinda (near Berkeley) -- where a starter house basically costs $1 million. If you've ever been there you know that these houses tend to be basic ranchers on small patches of land. Few if any probably have "wine cellars," as the article implies. It ain't Beverley Hills, and these folks probably aren't "rich" in the sense that most people use the word.
As Calculated Risk suggests, they're probably just ordinary folks who bought more than they could afford to live in a fairly ordinary neighborhood whose prices are tremendously inflated by overall local prosperity. As we have seen, in the mortgage bubble just about anybody could borrow $1 million.
Nevertheless Streitfeld incites class warfare. He quotes CoreLogic's economist as saying, “The rich are different: they are more ruthless," and says that "The CoreLogic data suggest that the rich do not seem to have concerns about the civic good uppermost in their mind."
Judging by the story's comments section, he succeeds.
It's hard to argue with this reaction from Scott Paul, executive director of the Alliance for American Manufacturing, to Treasury's announcement that it won't cite China for currency manipulation:
"Claiming China doesn't manipulate its currency makes about as much sense as saying LeBron James doesn't play basketball. "It's clear that China's announcement before the G-20 last month was nothing more than a charade, but the Administration seems to have fallen for this rather unbelievable promise. "Congress must pass strong legislation to address China's currency manipulation so that America's workers and businesses can compete on a level playing field."We will never double exports unless we stop China's cheating.
"This is a step backward."
Dow 10,000!! I remember the first time the Dow made 10,000, in 1999. We were sitting in the Sun's old newsroom on the 5th floor, watching the Dow fever line on the Bloomberg tube head into five digits. Now nobody can remember how many times the Dow has hit 10,000. Market strategist Ed Yardeni, in his daily email blast, says it's Groundhog Day. Yardeni:
Dow 10000! The DJIA rallied 274.66, or 2.82%, to close at 10018.28 yesterday. It reminds me of “Groundhog Day,” the 1993 comedy film, starring Bill Murray and Andie MacDowell. Murray plays Phil Connors, an egocentric Pittsburgh TV weatherman who, during a hated assignment covering the annual Groundhog Day event in Punxsutawney, finds himself repeating the same day over and over again. After indulging in hedonism and numerous suicide attempts, he begins to reexamine his life and priorities.Like the weatherman played by Bill Murray, investors must be reassessing the meaning of life, or at least how much they are willing to pay for earnings. Valuation multiples tend to be highest when investors expect that stock prices will generate significant capital gains. This was the experience during the 1990s. Those days are long gone, and so are the capital gains. So valuation multiples have been falling.
The reaction of the Letter Carriers union to proposed Post Office cuts, including eliminating Saturday delivery, demonstrates that you probably can't have it all. The Letter Carriers want the Post Office to address its budget problems in part by reducing the amount of cash that goes every year into retirement benefits, including into retiree health-care coverage. Say the Letter Carriers:
The Postal Service is mandated by law to meet an aggressive pre-funding payment schedule of future health benefits for retirees. No other American entity in the public or private sector is required to pre-fund retiree health benefits. The Postal Service has already set aside more than $35 billion, enough to cover retiree health benefits for 15-20 years.
But it is a failure to fund retirement benefits that is the complaint of many other unions. Unions representing Maryland and Baltimore government workers are furious that those entities have shorted pension funding by hundreds of millions of dollars. Baltimore was threatening to lay off fire and police professionals in order to meet this year's pension-funding obligation. As a practical matter, government is not going to finance both unsustainable pension benefits and pre-recession job levels.
When the Deptment of Defense thinks that you have too much administrative overhead, you really must have too much administrative overhead. Even so, these cuts are mainly symbolic. The Daily Record reports:
Lockheed Martin Corp. is moving to trim its executive ranks as the Pentagon, its biggest customer, pressures defense contractors to cut overhead costs on huge weapons programs.Bethesda-based Lockheed said Tuesday it is offering directors and vice presidents financial incentives to leave voluntarily by Feb. 1. The nation’s largest defense contractor did not say how many employees qualify for the buyout or are expected to leave the company under the program. Lockheed spokesman Jeff Adams said the company does not have a specific target number for the buyout.
Your critics temporarily hold the upper hand — the “little people,’’ the media sermonizers, the pusillanimous politicians who were hectoring you for handouts just a few months ago. This, too, shall pass. Like Americans everywhere, they need their overpowered cars, their grandiose, climate-controlled McMansions, and their scalding hot showers every day.
A year from now, they’ll be begging you to drill more, deeper, farther from shore. Windmills? How charming. Good for grinding flour, less useful for powering the most wasteful economy in the history of mankind.
Bloomberg reports that the Post Office wants to raise stamp prices by 2 cents to 46 cents to help close a projected $7 billion deficit. What happened to all those unneeded branches the Post Office was going to close?
The price increases would raise $2.3 billion in the first nine months of 2011, the service said in a statement today in Washington. Increases, which must be reviewed by Postal Regulatory Commission, would take effect Jan. 2.“We’re doing this because the Postal Service really faces a serious risk of financial insolvency,” said Stephen Kearney, a senior vice president with the Postal Service.
In Sunday's anti-ethanol column, I noted that 15-percent ethanol blends could be especially harmful to small engines such as those in lawnmowers. Publishing in newspaper on the edge of the Chesapeake Bay, I should have mentioned marine engines, which are said to have the same vulnerability. Reader Pete emails:
Thanks for your excellent article on ethanol. E10 has ruined many marine engines and fuel systems, and E15 would be a disaster. The marine industry is a huge asset to Maryland, so you might want to check out the feelings of this sector too.
Matthew Simmons is very unlikely to win his $10,000 bet with NYT columnist John Tierney that the average price of oil in 2010 would be more than $200 a barrel. Of course that was true before 2010 even started, but it's quadruply true now that 2010 is half-over and oil is $73. Simmons needs oil to go well over $300 for the rest of the year.
At the end of 2008 Simmons was still confident, expecting a sharp, "V-shaped" economic recovery that would shatter the record prices set for oil that year. “We’re going to create a ’V’ that’s very dangerous," he told me. “We could pierce through the old price high like a hot knife through butter in a very short period of time.”
Haven't talked to him lately, but it's hard to imagine him being that confident now.
Ross Douthat has a good pep talk in today's NYT, arguing that the country is overdoing the gloom just as it overdid the exuberance during the mortgage bubble:
Maybe this time is different. The recession is deeper. Our debts are piled higher. The gloom is more pervasive.But even now, there isn’t a major power in the world that wouldn’t happily change places with the United States. Our weaknesses are real, but so is our potential for resilience. While our rivals (in Asia as well as the West) face a slow demographic decline, our population is steadily increasing. The European Union’s recent follies make our creaking 200-year-old institutions look flexible by comparison. And China can throw up all the high-speed rails and solar panels it wants, but it won’t change the fact that most of the country is still sunk in rural poverty.
As if to prove his point, his optimistic piece is not one of the most-read NYT stories online. It's not in the top 10 hits for views, emails or blogging. Instead, people are reading a three-day-old NYT piece on the delusional Robert Prechter, who says the Dow Jones Industrial Average will go down to 1,000 in a few years.
UPDATE: Wait, I take it back sort of. Douthat has made it into the top 10 articles viewed. (No. 10.) Maybe there's hope.
Steve Hanke, professor of applied economics at the Johns Hopkins University, writing in the Wall Street Journal Europe, has some advice for Greece that he admits Greece will probably not take:
But it also should have implemented a supply-side fiscal consolidation. That means cutting government expenditures, but also changing the tax regime.Right now, Greece has very onerous payroll taxes that are paid by employers and, ultimately, labor. As part of a Big Bang, Greece should eliminate the employer contribution to payroll taxes, which is currently 28% of wages (employees pay a further 16% rate directly).
At the same time, Greece should make its VAT rates uniform. Right now, there are three VAT rates in Greece. This is typical in Europe. You have the regular VAT, a VAT that is reduced by 50% for other categories, and, finally, a super-reduced VAT. I would eliminate the reduced and super-reduced rates, and just have one, uniform rate for the VAT—one set below the current top VAT rate of 23%.
If Greece did those two things, it would end up generating more revenue than it is generating right now. Even when based on a static, simple-minded analysis, that would put Greece ahead of the revenue game.
This is scary:
If you were going to live to be 100, would you want to know it?When it becomes affordable to have one’s genome sequenced, perhaps in the next few years, a longevity test, though not a foolproof one, may be feasible, if a new claim holds up. Scientists studying the genomes of centenarians in New England say they have identified a set of genetic variants that predicts extreme longevity with 77 percent accuracy.
If we can identify the genes determining that we'll live to 100, soon we'll identify the genes that determine we die at 55. That's more knowledge than perhaps we need. It's certainly more knowledge than our insurance companies ought to have.
Yesterday the U.S. attorney's office unsealed an indictment charging Maple Leaf Title owner Anthony Weis with stealing $3.4 million, at least part of it from escrow or settlement funds handled by Maple Leaf, according to today's story by Peter Hermann.
I wrote about the boom in settlement fraud the other week. The column mentioned Weis and George Sybert Sr., the son of late Maryland Attorney General C. Ferdinand Sybert. George Sybert was sentenced to 8 years in prison last month for stealing mortgage-settlement funds.
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