Kathleen Parker, a conservative columnist at the Washington Post, is shrill:

The Tea Partyers who wanted to oust Barack Obama have greatly enhanced his chances for reelection by undermining their own leader and damaging the country in the process. The debt ceiling may have been raised and the crisis averted by the time this column appears, but that event should not erase the memory of what transpired. The Tea Party was a movement that changed the conversation in Washington, but it has steeped too long and has become toxic.

It’s time to toss it out.

Posted by Jay Hancock at 11:02 AM | Permalink | Comments (1)
        

I wasn't surprised early this month when the NYT's David Brooks expressed horror and amazement at the direction Republicans were heading. ("...the Republican party may no longer be a normal party.") He's often thoughtful and reasonable, although like many influential pundits he was terribly wrong on invading Iraq. This week's events seem to have summoned more conservatives to Brooks' side on the subject of the debt ceiling. Here's Jennifer Rubin, a conservative blogger for the Washington Post, last night:

A House aide just e-mailed me: “Buckets of crazy.” That’s as good an explanation as any as to why Speaker of the House John Boehner (R-Ohio) won’t be able to hold a vote tonight on his debt-ceiling bill. The burn-the-building-down set is weakening, but the speaker is still short on votes.

Outside of Congress, some of the most aggressive conservatives were urging Congress to make a deal. Even extreme rightwing bloggers will have a hard time casting conservative lightning rod Ann Coulter as a “squish.”(She told Fox News host Sean Hannity that it was time to get this done.)

Posted by Jay Hancock at 11:23 AM | Permalink | Comments (3)
Categories: The Great Recession
        

McMegan:

I'll start by saying, however, that I have no idea whether we'll get a deal or not. There is one thing I'm sure of: Obama is indeed bluffing with the veto threat, and badly. They could send him a repeal of Obamacare attached to a debt ceiling increase, and he'd sign it. He is not going to endanger our credit rating, or social security checks, in order to prove a point.

Posted by Jay Hancock at 9:28 AM | Permalink | Comments (1)
Categories: Slo-mo fiscal train crash
        

From the Department of Legislative Services' briefing on services that are not subject to the 6 percent Maryland sales tax. The Senate Budget & Taxation Committee said the briefing was part of a hearing that was "educational" and not a road map to future taxes. Hmm. How do you like totally hypothetical taxes on this totally for-informational-purposes-only list of services?

Business Services: Employment; payroll processing

Entertainment Services: Health and fitness centers; golf courses

Financial Services: Financial holding companies; corporate managing offices

Information Services: Cable television; satellite television

Personal Services: Barber and beauty shops; parking garages

Professional Services: Engineering; legal

Repair Services: Automobiles; commercial machinery

Transportation Services: Couriers; taxis and limousines

Posted by Jay Hancock at 9:04 AM | Permalink | Comments (22)
Categories: Taxes
        

Dan Drezner tries to explain to future, post-apocalyptic historians how the world's most powerful country made an entirely optional, catastrophic decision. He wrote this July 17. It seems even more apropos this evening. When he says "human beings," of course, he's talking about certain Republicans of the Tea Party persuasion.

Why, why did these human beings maintain these beliefs in the face of massive evidence to the contrary? Why did these people continue to insist that default wasn't that big a deal when Federal Reserve Chairman Benjamin Bernanke (a Republican first appointed by Republican president George W. Bush) insisted that there would be a "huge financial calamity" if the debt ceiling wasn't raised? Why did their belief persist when Moody's, Standard & Poor's, and Fitch Ratings all explicitly and repeatedly warned of serious and expensive debt downgrades if the ceiling wasn't raised?

Why did they stick to their guns despite news reports detailing the link between the rating of federal government debt and the debt of states and municipalities? Why did they stand firm despite the consensus of the Republican Governors Association and the Democrat Governors Association that a failure to raise the debt ceiling would be "catastrophic"? Why did they refuse to yield despite bipartisan analysis explaining the very, very bad consequences of no agreement, and nonpartisan analysis explaining the horrific foreign policy consequences of American default? Why did they not understand that even a technical default would cost hundreds of billions of dollars**, thereby making their stated goal of debt reduction even harder?

Most mysteriously, why did these people throw their steering wheel out the window despite witnessing the effect of the 2008 Lehman Brothers collapse, which revealed the complex interconectedness of financial markets?

Posted by Jay Hancock at 8:45 PM | Permalink | Comments (6)
Categories: Slo-mo fiscal train crash
        

The latest from BGE. Last week BGE invoked the PeakRewards program, turning off thousands of households' air conditioners, after a mandatory trigger on such "demand response" programs was ordered by grid manager PJM Interconnection.

BALTIMORE, July 28, 2011 – Baltimore Gas and Electric Company (BGE) today announced that it is preparing for a return of extremely high temperatures throughout its Central Maryland service area tomorrow. The utility expects to have sufficient electric supply to meet anticipated demand, but encourages customers, as it does with approaching storms, to take the time now to prepare and consider ways to conserve energy. The utility also announced that it does not anticipate a need to activate its energy demand response program, PeakRewards, despite the extremely high temperatures forecasted for Friday.

However, the utility cautioned that unforeseen operating conditions could warrant activation of the program. BGE will monitor its electrical grid with an eye toward minimizing impacts on its customers.

Posted by Jay Hancock at 3:03 PM | Permalink | Comments (3)
Categories: BGE/electricity
        

The Don Schaefer Foundation is only getting started, but it's already giving several lessons in how not to run a nonprofit organization, as Laura Vozzella chronicles in the newspaper.

1. Structure.You can't run a nonprofit of any size with only three board members. This is basically money that Schaefer has given to the public. Multiple board members are needed to watch over each other and to make sure the donor's wishes are fulfilled. Now two of the Schaefer Foundation's trustees are trying to kick out a third. From the Maryland Association of Nonprofit Organization's Standards for Excellence:

The board should have no fewer than five (5) unrelated directors. Seven (7) or more directors are preferable.

2. Conflicts of interest. Nonprofit governance experts frown on trustees steering business from the nonprofit to themselves. According to Vozzella, trustee Zelig Robinson is also the foundation's legal counsel. He's the client and the vendor simultaneously. He declined to tell Vozzella if he's working for free.

From MANO's Standards for Excellence:

A nonprofit should have policies in place, and should routinely and systematically implement those policies, to prevent actual, potential, or perceived conflicts of interest.

3. Openness. Nonprofits need to tell the public what they're doing. Their money doesn't belong to the trustees. The public has a special interest in this case because it's the legacy of a beloved public servant. Yet when Vozzella tries to find out what's going on, Robinson starts talking about attorney-client privilege.

From the MANO standards:

Nonprofits are private corporations that operate for public purposes with public support. As such, they should provide the public with information about their mission, program activities, and finances. A nonprofit should also be accessible and responsive to members of the public who express interest in the affairs of the organization.

Posted by Jay Hancock at 8:57 AM | Permalink | Comments (3)
Categories: Nonprofits
        

John McCain says:

“It’s time we listened to the markets,” he said. “It’s time we listened to our constituents. But most of all, it’s time we listened to the American people and sit down and seriously negotiate something.”

Posted by Jay Hancock at 6:17 PM | Permalink | Comments (2)
Categories: Slo-mo fiscal train crash
        

T. Rowe stock is down 5 percent today after reporting a great quarter that nevertheless failed to meet "expectations" by a penny per share.
Zack's is optimistic for the near term:

T. Rowe Price’s financial stability has the potential to take advantage of the improving economy and benefit from the growth opportunities in the domestic and global AUM.

With a debt-free position, higher return on earnings and improving investor sentiment witnessed in the current quarter, we believe fundamentals are expected to remain strong. Furthermore, relative mutual fund performance was also positive. However, higher operating expenses and stringent regulatory norms could be causes of concerns

UPDATE: T. Rowe spokesman Brian Lewbart points out that ALL financials are getting hammered today, which market seers attribute to uncertainty over the debt ceiling in Washington. T. Rowe announced earnings yesterday morning and was up on the day.

Posted by Jay Hancock at 1:55 PM | Permalink | Comments (0)
        

I liked this from commenter Veronica. Punctuation and everything!

I have a friend who lives out of town. He sends me mail the old-fashioned way. What a pleasure to receive his letters written in cursive, with capital letters, punctuation and vowels. Wow.

The Internet is probably the worst and best thing that's happened to us. Unfortunately, it's a big cause of the dumbing down of America. Mark my words, we'll all be speaking Mandarin some day.

Many, many people have internet businesses that depend on the post office. While you can order something over the Internet, a real person delivers it. Try taking a virtual pill or putting on virtual clothes. Not everybody has or even wants the Internet. I believe four days of delivery are plenty, but we still need the post office.

Posted by Jay Hancock at 11:35 AM | Permalink | Comments (2)
        

From my inbox, a piece of spam promoting a spamming service. This one is about spamming lawyers. One presumes spammers targeting other industries use the same approach.

Hi Jay, here is some breaking LawProspector news that I thought you would be interested in seeing . . . please forward this message to your colleagues at THE BALTIMORE SUN or anyone else in the litigation support field that might benefit from this information. [See attached screen shots]

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• Visual Email Bounce Indicators - We test the emails and alert you if a contact has moved

WASHINGTON, DC — Since its introduction in 2008, LawProspector has continued to lead the market in features and data integration for litigation support sales teams seeking better sales leads. As the firm celebrates its 3rd anniversary, it releases its most important upgrade to date, LawProspector 2.0.

LawProspector 2.0 brings over 20 new features sought after by subscribers. Like the product as a whole, each new feature is designed to give those selling in the legal marketplace the best sales intelligence available in the shortest time possible.
Never before has there been such near-instantaneous access to critical data about the litigation marketplace. LawProspector subscribers are already using LawProspector to uncover sales leads in minutes that used to take hours, days and months of research. New features include:
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• A beta email prediction tool for LawProspector Online subscribers plus feedback tools for correcting bad email addresses;
• Visual email bounce indictors help sales people focus on verified prospects.
• Contact information for over 50,000 general counsel, 100,000 attorneys;
• Case data linked to and integrated with contact information for more than 50,000 federal cases with an ever faster refresh rate - literally SEE who needs your services NOW by seeing their case load and schedule.
"Everyone in the litigation support industry has noticed one thing over the last five years - GC's are making more

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LawProspector 2.0 starts at $499/month and existing subscribers are automatically able to take advantage of these features rolled out at no additional charge. We invite you to take a FREE product tour by calling 800.738.8018 x1 or by emailing sales@lawprospector.com now. Don't wait for the competition to get to your prospects before you!

Posted by Jay Hancock at 10:50 AM | Permalink | Comments (0)
        

Another thought on Peak Rewards, the Baltimore Gas & Electric program that shut off air conditioning for thousands of households on Friday. Whatever you say about BGE's marketing of the program and handling of Friday's cutoffs, it's hard to attribute the utility's behavior to the profit motive.

The partial or total shutdown of 350,000 air conditioners, via radio-controlled switches, deprived BGE of hundreds of thousands of dollars in direct revenue from customers. You don't pay for a kilowatt that you don't burn. True, BGE got paid handsomely by the grid for the shutdowns. When PJM Interconnection calls for mandatory delivery of "demand response" like Peak Rewards, utilities and other users get $1,000 for each megawatt hour of use they curtail. BGE households cut their use by 600 megawatts for six hours, which comes to $3.6 million for BGE. But all of that, says BGE (and I have heard nothing to contradict this), is rebated to customers in one way or another -- largely through the credits that Peak Rewards customers earn on their bills.

Whether or not having your AC cut off is worth the credits, on the other hand, is subject to some discussion.

Posted by Jay Hancock at 9:07 AM | Permalink | Comments (5)
Categories: BGE/electricity
        

Sun multimedia czar Steve Sullivan asks me questions and I answer. I gave BGE a grade of B-minus when he asked how they responded to Peak Rewards confusion. On further thought I think I'd switch it to a C or a C-minus. BGE did put out an announcement telling people what was likely to happen fairly early on Friday. However few people got it, and BGE's subsequent communications were confusing. Also the phone lines were jammed.

Posted by Jay Hancock at 1:54 PM | Permalink | Comments (1)
Categories: BGE/electricity
        

Here is the U.S. Postal Service list of Maryland post office on review for possible closure. The metro Baltimore ones that I could identify are in bold. Let me know if I missed any.

Maryland Office/ City/ Zip Code

BETTERTON BETTERTON 21610

BIVALVE BIVALVE 21814

CROCHERON CROCHERON 21627

EWELL EWELL 21824

HENDERSON HENDERSON 21640

HILLSBORO HILLSBORO 21641

MASSEY MASSEY 21650

SHERWOOD SHERWOOD 21665

TYASKIN TYASKIN 21865

TYLERTON TYLERTON 21866

UPPER FAIRMOUNT UPPER FAIRMOUNT 21867

CLIFTON EAST END BALTIMORE 21213

TOWSON TOWN CENTER TOWSON 21204

ANNAPOLIS DDU ANNAPOLIS 21401

SILVER SPRING FINANCE CTR SILVER SPRING 20910

SUITLAND SUITLAND 20746

ABELL ABELL 20606

DRAYDEN DRAYDEN 20630

FAULKNER FAULKNER 20632

HELEN HELEN 20635

IRONSIDES IRONSIDES 20643

LAUREL MALL LAUREL 20707

BIG POOL BIG POOL 21711

BITTINGER BITTINGER 21522

BLOOMINGTON BLOOMINGTON 21523

BROWNSVILLE BROWNSVILLE 21715

CRESAPTOWN CUMBERLAND 21505

LADIESBURG LADIESBURG 21759

LAVALE CUMBERLAND 21504

LITTLE ORLEANS LITTLE ORLEANS 21766

NEW MIDWAY NEW MIDWAY 21775

STATION A CUMBERLAND 21503

TUSCARORA TUSCARORA 21790

CARROLL BALTIMORE 21229

DRUID BALTIMORE 21217

FRANKLIN BALTIMORE 21223

HAMILTON BALTIMORE 21214

MARKET CENTER BALTIMORE 21201

WALBROOK BALTIMORE 21216

WAVERLY BALTIMORE 21218

CHEVY CHASE CHEVY CHASE 20815

LEISURE WORLD FINANCE SILVER SPRING 20906

Posted by Jay Hancock at 12:26 PM | Permalink | Comments (37)
        

The Maryland Public Service Commission, which regulates Baltimore Gas & Electric, said it received "less than one dozen calls" on Friday related to BGE's Peak Rewards program, which shut off 72,000 household's air conditioners for most of one of the hottest days in memory. "Additional complaints were received over the weekend that are being reviewed," the PSC said.

As readers of The Sun know, the shortage of complaints received by the PSC hardly means customers are thrilled with Peak Rewards. Perhaps one reason is the difficulty for people to communicate with the commission online. There seems to be no general PSC email address. There is place on the Web site to "file a complaint." But this seems to be a service for resolving bilateral disputes between utilities and customers, not a place to opine on general regulatory policy and BGE conduct.

Reader Ren has a good suggestion:

It has been noted that the commission has received only a "handful" of complaints. Does that mean that they won't count all those who wrote directly to you or The Sun?

Can you let us all know an email to use that will get more than that handful of thoughts to them?

Terry Romine is the Maryland Public Service Commission's executive secretary, the recipient of all official correspondence. Her email: tromine@psc.state.md.us. Or you can call the PSC: (410) 767-8000.

UPDATE: PSC spokeswoman Regina Davis suggests calling PSC external relations at 888-309-7325. And she says to go ahead and use the formal complaint system for comments on Peak Rewards.

Posted by Jay Hancock at 8:53 AM | Permalink | Comments (10)
Categories: BGE/electricity
        

As noted, many BGE customers were without air conditioning for hours on Friday because they had signed up for the 100 percent "Peak Rewards" option. That gave them bill credits in return for BGE's right to turn off their air conditioning compressor during periods of high demand. While customers who signed up for 100 percent knew that their AC would be off the entire hour for each hour of a cycling "event," few knew that an "event" could last six hours more more.

But I got far fewer complaints from BGE customers who had the 50 percent option, which ran their AC for half its normal use rather than not at all. This way it came on for 20 or 30 minutes each hour. We have the 50 percent deal at the Hancock house. The credits are lower, but at least the AC runs at least part time. My family said they barely noticed the difference. Here's commenter Kimberly:

Answer - lower it from 100% to 50%. I just lowered ours from 100% to 50% cycling. We will try that and see what happens. If Friday repeats we will opt out. At 100% cycling , our AC was off for 8-9 hours on Friday. I never thought they would cycle it that long. I thought they did 20 minute intervals. That's only if you are at 50% cycling. They really screwed up and should give money back (more than the peak rewards credit) to those they did this to. I don't think anyone who signed up for the program ever thought they cycle for so many hours straight completely off and get the houses up to 90 degrees. I just found out that at 50% it will come on then off for a while during the emergency cycling.

Posted by Jay Hancock at 10:23 AM | Permalink | Comments (60)
Categories: BGE/electricity
        

BGE put out a confusing statement Friday night about its air conditioning shutoff program "being phased down to a lower level of activation, effective immediately." Many took this to mean that the "100 percent" option in BGE's Peak Rewards program, which lets the utility shut off your AC for the entire duration of an emergency, high-demand "event," would be canceled or at least suspended for a while.

In fact, the lower activation was in effect only for a few hours last night. It's back to business as usual at Peak Rewards. "Absent some unforeseen emergency event, we have no plans to activate Peak Rewards through next week," says BGE spokesman Rob Gould. But the next time a demand spike on a super hot day triggers an emergency, people who signed up for the "100 percent" Peak Rewards option could have another experience like the one on Friday, in which thousands of households went without AC for more than six hours on one of the hottest days in recorded history.

Bottom line: BGE has some explaining to do, and I'll be following up in Tuesday's column. "Customers did not expect to have a cycling event that went as long as it did," said Gould. "People have been getting a lot of money for this," he said, referring to the bill credits that Peak Rewards customers receive. "We just need to do a better job of keeping them informed."

Well, they're informed now. People who signed up for 100 percent just found out that on really really hot days they can basically lose their air conditioning all day long. (I'm a 50 percent Peak Rewards customer. The temperature at our house rose a few degrees Friday but it was barely noticeable.) I doubt that will help the program's popularity.

Turns out there were two BGE "cycling events" yesterday, which alert blog commenters had figured out from their Web readouts but which BGE didn't explain very well. The first one, which was mandated by the PJM grid, went from 11:30 to like 5:40. Then BGE immediately started another one that went well into the evening. For the first event, BGE says, Peak Rewards members got what they signed up for. 100 percenters had their AC turned off completely. 75 percenters had it turned off for 3/4 of the time it normally would have run. 50 percenters had their compressors running half the time. (There are 350,000 BGE customers with Peak Rewards cutoff switches on their AC. Of those, 72,000 signed up for 100 percent "cycling," which gives you the biggest credits on your bill.)

But for the second event, BGE cycled everybody at 50 percent. So according to BGE, even people who had signed up for 100 percent would have had their AC turned back on half-time after 6 pm or so. That wasn't what many blog commenters said they experienced. Some people said they were flat-out without air until 9 p.m.

For what it's worth, Gould says he's a 100 percent Peak Rewards customer. "I was off all day," he says. During the second "event" in the evening, he said, his compressor started running again at 50 percent. It got up to 91 degrees upstairs in his house, he said, and 85 degrees on the first floor.

Posted by Jay Hancock at 1:35 PM | Permalink | Comments (42)
Categories: BGE/electricity
        

UPDATE, 10:45 p.m. Commenter Guitarmom says:

After a sweltering day in which 72,000 BGE customers had their air conditioning turned off for multiple hours thanks to their participation in BGE's "Peak Rewards" program, BGE seems to have decided that the energy-saving program at its most intense was not a good idea. On a day when the temperature at BWI was 104 degrees, everybody who signed up for the "100 percent cycling" option in Peak Rewards had their AC shut off at 11:30 a.m. and didn't have it turned on again, BGE says, until "approximately 5:40 p.m." Well after that time many blog commenters were saying they still didn't have air conditioning.

When you sign up for Peak Rewards BGE puts a switch on your AC compressor. You get bill credits based on whether you sign up for 100 percent, 75 percent of 50 percent cycling. During the peak use "event" you agree that BGE can shut off the AC in those proportions to save energy. (Sign up for 50 percent and the AC supposedly runs half as much as normal.) But I doubt the people who signed up for 100 percent expected the "event" to last all day.

Now BGE has backed down, saying in a press release:

Baltimore Gas and Electric Company Transitioning Immediately to a Lower Level of PeakRewardsSM Program Activation During the transition period, all customers who voluntarily enrolled in the program are cycled at the reduced 50 percent level

The Public Service Commission has been getting complaints today about Peak Rewards. And I assume BGE got deluged with calls. My blog post on the shutoff has 140 comments and counting. Many Peak Rewards customers say they knew BGE could cut off their cool, but they didn't expect it to go on for five or six hours or more.

The uproar could give BGE political headaches in the attempt by parent Constellation Energy to complete its merger with Exelon. And it's probably going to make a lot of people more spooked by the computerized "smart" meters BGE is getting ready to install, whose purpose is also largely energy savings.

I don't see the statement on their Web site. So the whole BGE press release is below the fold.

BALTIMORE, July 22, 2011 – Baltimore Gas and Electric Company (BGE) today announced that the PeakRewardsSM emergency load management event is being phased down to a lower level of activation, effective immediately. This transition will help the utility keep the electric system balanced during the extreme heat, while beginning to moderate the impact to our customers who voluntarily enrolled into the program. BGE expects to return to normal operating conditions by approximately 8:00 p.m.

During the emergency period of the event, which began at approximately 11:30 a.m. and ended at approximately 5:40 p.m., all participating customers were cycled at the level they chose, 50, 75 or 100 percent. During this transition period, all participating customers – regardless of enrollment level – are cycled at the 50 percent level – the lowest level of activation. Customers participating in BGE’s Peak RewardsSM program receive bill credits of up to $200 in the first year of participation and up to $100 for every year thereafter, regardless of whether the program is activated.

“The 450,000 BGE customers voluntarily participating in today’s emergency activation of the PeakRewardsSM program helped BGE reduce peak demand by approximately 500 megawatts, equivalent to the amount of power generated by a medium size power plant,” said A. Christopher Burton, senior vice president of gas and electric operations and planning for BGE. “This action is extremely helpful as BGE continues working with the grid operator, PJM Interconnection, to ensure there is sufficient power to meet our customers’ needs. We thank our customers for their patience and understanding.”

Just as BGE proactively prepares for extreme weather, customers are reminded to take action to limit the impact of hot weather on their energy usage, which in turn, will help them better manage summer energy bills. Customers should consider the following:

• Closing curtains and blinds to keep the sun outside
• Setting thermostats at 78 degrees or higher if health allows
• Delaying use of major, heat generating household appliances such as ovens, stoves, dishwashers and dryers, until after 9 p.m. when the temperature begins to drop
• Turning off non-essential appliances, electronics and other devices
• Visiting the Summer Ready section of BGE’s website
• Enrolling in Budget Billing to avoid seasonal spikes in energy usage
• Enrolling in BGE’s PeakRewardsSM program and receive summertime bill credits of up to $200 in the first year of participation. Select the programmable thermostat option for even more energy management tools.

Energy bills are primarily a combination of the rate charged for the commodity and the amount of energy used by the customer. While electric rates are down significantly when compared to previous years, extreme weather generally causes electric usage to increase which can lead to higher-than-expected bills. During the summer months, cooling systems typically account for nearly half of a home’s energy usage. Additionally, old or inefficient cooling systems use more energy than newer, more efficient systems.

While BGE expects energy usage to be very high today, it does not expect to set a new all-time high for summer energy usage. The current all-time record for summer energy usage in BGE’s Central Maryland service area is 7,198 megawatts (MW), set on August 3, 2006. Peak usage for a typical summer day is 5,500 MW. One megawatt equals one million watts and is generally enough electricity to power 1,000 homes.BGE, www.bge.com, headquartered in Baltimore, is Maryland’s largest gas and electric utility, delivering power to more than 1.2 million electric customers and more than 650,000 natural gas customers in Central Maryland.

The company’s approximately 3,000 employees are committed to the safe and reliable delivery of gas and electricity, as well as enhanced energy management, conservation, environmental stewardship and community assistance. BGE is an indirect subsidiary of Constellation Energy, www.constellation.com, a FORTUNE 500 company also headquartered in Baltimore, with subsidiaries that generate, sell and provide other energy-related services to customers throughout North America.

Posted by Jay Hancock at 7:30 PM | Permalink | Comments (78)
Categories: BGE/electricity
        

UPDATE: 7:45 p.m. Here's commenter Tom:

UPDATE: 5 p.m. It is now "late afternoon." Let us know when your units come back on, you 100 percenters.

I'm all for BGE's Peak Rewards program in principle. It's a great way to incentivize people to cut their expensive energy use on days like today. I'm a Peak Rewards participant at the "50 percent" level. The program lets BGE turn off your air conditioner for a time on really hot days. About 450,000 BGE customers participate in Peak Rewards, BGE says.

But today's implementation of Peak Rewards may catch some participants off guard. BGE announced that folks who signed up for the "100 percent" Peak Rewards deal will have their AC turned off from 11:30 this morning "until at least late afternoon."

UPDATE: BGE spokeswoman Linda Foy says 350,000 of the 450,000 Peak Rewards members agreed to have their AC switched off. (The others have switches on their water heaters, not their air conditioners.) Of those, she says, 72,000 chose 100 percent cycling.

This if from BGE's announcement:

Those on the air conditioning program will have their units’ compressors cycled at the level in which they enrolled, 50, 75 or 100 percent . Those who selected 100 percent cycling for the maximum bill credits will have their compressors off for the entire extreme event. This event began at approximately 11:30 this morning and is expected to continue until at least late afternoon.

That doesn't sound very safe. I know the idea is that people who signed up for 100 percent cycling would typically be those who leave their home empty during the day. But odds are that some of the houses with AC being shut off at 100 percent have people in them.

Here is how BGE describes the cycling on its Web site:

Cycling: Cycling refers to the amount of time each hour that your air conditioning (A/C) compressor is switched off and on during a PeakRewards℠ event. For example:

If your Compressor normally runs for 40 minutes (two 20-minute periods) each hour and you sign up for 50% Cycling, your Compressor would only run for 20 minutes (two 10-minute periods) during each hour of the event.

If your Compressor normally runs for 40 minutes (two 20-minute periods) each hour and you sign up for 75% Cycling, your Compressor would only run for 10 minutes (two 5-minute periods) during each hour of the event.

If your Compressor normally runs for 40 minutes (two 20-minute periods) each hour and you sign up for 100% Cycling, your Compressor would not run at all during the event.

I bet there are folks out there who did not expect an "event" to last five hours or more.

UPDATE: I asked Foy whether BGE believes some of its customers were prepared for a cycling event of multiple hours. Her response:

Peak Rewards is a voluntary program and is clearly explained to customers before and after enrollment. Also keep in mind, participating customers are receiving bill credits of up to $200 in the first year of participation and up to $100 dollars every year thereafter – regardless of whether the program is activated. Also remember, even when the program is activated, the a/c fan will still run and customers can use ceiling fans and other means to stay comfortable. Customers with concerns about the program can certainly call us.

Posted by Jay Hancock at 1:35 PM | Permalink | Comments (224)
Categories: BGE/electricity
        

George Mason University economist and superblogger Tyler Cowen suggests three rules for charity: Give cash. Give to needy people who don't expect charity. And don't tie strings; let recipients do whatever they want with the money.

The Cowen rules drastically reduce transaction costs because they don't require grant applications and a big staff to identify worthy projects and recipients. They eliminate the moral hazard and dependency that sometimes come with welfare and charity: People who know they're getting aid can put less effort into working for their own account. And the rules maximize utility and freedom for the recipients. THEY, not NGO managers, decide the best way to use the money.

Now GiveDirectly has set up a model of philanthropy based on the Cowen principles, says Tyler's co-blogger, Alex Tabbarok. Says Alex:

GiveDirectly takes donations over the web, locates poor households in Kenya using people on the ground, and then transfers money directly to the recipient’s cell phone (even very poor households typically have cell phones but GiveDirectly provides SIM cards for those who do not.) Transactions costs are low, just 10%.

He has one reservation:

... it also lets recipients purchase alcohol, cigarettes and prostitutes. Even in poor countries, a substantial amount of poverty is caused by poor choices. Still, there is no special reason to think that cash grants will increase the proportion of money spent on “bad goods.”

Posted by Jay Hancock at 8:57 AM | Permalink | Comments (1)
Categories: Nonprofits
        

The GAO audit of the Fed's bailouts is out.

From late 2007 through mid-2010, Reserve Banks provided more than a trillion dollars in emergency loans to the financialsector to address strains in credit markets and to avert failures of individual institutions believed to be a threat to the stability of the financialsystem. The scale and nature of this assistance amounted to anunprecedented expansion of the Federal Reserve System’s traditionalrole as lender-of-last-resort to depository institutions.

Even if you believe the Fed's extraordinary actions were necessary, as you should, it's hard to disagree with Vermont Sen. Bernie Sanders, who said, "This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.”

HT Big Picture.

Posted by Jay Hancock at 8:49 AM | Permalink | Comments (5)
        

The Maryland Office of People's Counsel, which represents consumers in utility matters, has protested before federal regulators against Exelon's proposed buyout of Constellation Energy. The deal would give the combined companies too much concentrated ownership on the PJM grid that serves much of the mid-Atlantic coast, including Maryland, according to an expert hired by OPC, potentially giving them the ability to raise prices and boost profits.

Exelon and Constellation already realize that an unmodified merger would give federal antitrust authorities reason to oppose it. So their deal includes divestiture of three Maryland generation plants formerly owned by BGE. (C.V. C.P. Crane, Brandon Shores, H.A. CraneWagner.) That's not good enough, says the study commissioned by OPC and the Pennsylvania Office of Consumer Advocate. Even with those divestitures, the combined Exelon-Constellation would have too much power over wholesale electricity markets. Here's the gist:

[The meger] could leave a dominant firm in the generation market (with market share on the order of 20 percent, post-mitigation) and would not address Applicants’ ability to profitably raise electricity market prices. Since all generating units selected for dispatch in PJM receive the market clearing price, the units that can set the price are important. If market prices can be manipulated—by strategic bidding, retirements, withholding, or other means—the Applicants would be in a position to affect prices and collect higher infra-marginal revenues.

Posted by Jay Hancock at 11:14 AM | Permalink | Comments (3)
Categories: BGE/electricity
        

From Time:

If you’re conflicted about whether to spend money on a material good (say, a computer) or personal experience (say, a vacation), the research says you’ll get much more satisfaction — and for longer — if you choose the experience. Most of us, it turns out, get more bang from the experiential buck. Indeed, when people are asked to recall their most significant material and experiential purchases over the previous five years, they report that the experience brought more joy, was a source of more enduring satisfaction and was more clearly “money well spent.”

Posted by Jay Hancock at 9:12 AM | Permalink | Comments (1)
        

Real estate agents and shelter mags are full of advice about how much particular improvements will increase the value of your house. (I forget -- is a new bathroom the best investment?) You rarely recoup 100 percent of a capital improvement; the idea is that you get more of it back for certain projects than for others.

Anyway, researchers at UCLA and UC San Diego have tried to figure out the formula for solar panels. How much does going solar increase the value or your house? Is it as much as you spent for the system? Among their findings:

We find that solar panels add 3.6% to the sales price of a home after controlling for observable characteristics and flexible neighborhood price trends (see Table 4). This corresponds to a predicted $22,554 increase in price for the average sale with solar panels installed.

If you live in a neighborhood full of tree huggers and Prius drivers, the propensity to pay extra for installed solar is slightly greater, as you might expect. People in neighborhoods with Ford F-series pickups in the driveway, on the other hand, are not so inclined.

We estimate the solar premium to be 1% higher if other homes in the same census block have previously installed panels, but the coefficient is not statistically different from zero. We observe a decreasing return to additional system size, a positive relationship between the capitalization rate and Prius penetration, Green party registration share, Democrat registration share, median income, and education, as well as a negative relationship between capitalization and truck ownership.

Posted by Jay Hancock at 6:02 AM | Permalink | Comments (2)
Categories: Environment
        

Herb Kohl states the obvious. Perhaps only the fact that he is not running again and would not need to seek telecom campaign contributions permits him to state the obvious. From the WP:

He said that acquisition of T-Mobile — a lower-cost competitor to the three biggest national carriers — would end up costing consumers.

“It will likely tend to substantially lessen competition, lead to consumers paying high prices with fewer choices, as well as lessen the innovation that has been the keystone of this industry in the last decade,” Kohl said in his letter to Attorney General Eric Holder and FCC Chairman Julius Genachowski.

Posted by Jay Hancock at 9:29 PM | Permalink | Comments (0)
        

The Gang of Six, a bipartisan group of senators, threw its deficit-reduction package into the arena Tuesday and it is variously described as increasing tax revenues by $1 trillion over 10 years and also decreasing them by $1.5 trillion over 10 years. Huh?

That's David Wessel of the WSJ. He explains how this is possible.

Posted by Jay Hancock at 8:58 AM | Permalink | Comments (0)
        

At least, so say Mark Hulbert (on gold) and Joel Naroff (in the WSJ in housing). This time it might even be true.

Hulbert:

For now, though, the important thing for short-term traders to know is that excitement has grown markedly over the last couple of sessions, and now stands at close to the fever pitch that prevailed in late April. Soon after that previous crescendo of bullish enthusiasm, of course, gold encountered a stunning air pocket and fell more than $100 per ounce.

Naroff:

“The leading light in this sector of the economy, apartment construction, should do well and with even a modest rise in the single-family segment, housing should start adding to growth during the second half of the year,” he says.

Posted by Jay Hancock at 8:46 AM | Permalink | Comments (0)
        

This is a blow to the $1 billion-plus, heavily subsidized project to develop State Center in midtown Baltimore. Comptroller Peter Franchot, who's expected to run for governor in 2014, tells state agencies: "...I must respectfully inform you that I cannot and will not support further efforts to complete this project as currently proposed."

UPDATE: More here on the Maryland Politics blog.

Franchot is one of three members on the Board of Public Works, along with Gov. Martin O'Malley and Treasurer Nancy Kopp. BPW approves large state contracts. He previously has cast "yes" votes in favor of the project, which the Maryland Public Policy Institute has calculated will cost more than $100 million in public subsidies. (Backers of the project say the public benefits will be far higher.)

However Franchot voted against a proposal last year to sell bonds to finance a parking garage associated with the project. Among Franchot's objections now, as stated in his letter to the agencies:

It is difficult, for example, to justify the willingness of State agencies to rent space at above-market rates at a time when Maryland’s structural budget deficit continues to exceed one billion dollars. I believe that taxpayers who have been forced to make sacrifices to survive the economic downturn – and are now hearing speculation from Annapolis about further rounds of tax increases in the coming months – will justifiably question our decision to pay premium rates in a bargain-rich market where high vacancy levels will, unfortunately, be the norm for the foreseeable future.

July 15, 2011

The Honorable Alvin C. Collins Secretary Maryland Department of General Services 301 West Preston Street, Room 1401 Baltimore, MD 21201

 The Honorable Beverley K. Swaim-Staley Secretary Maryland Department of Transportation 7201 Corporate Center Drive P.O. Box 548 Hanover, MD 21076

Dear Secretaries Collins and Swaim-Staley:

For the past four years, your agencies have worked in tandem on an ambitious effort to redevelop the State Center complex in Baltimore City. I have watched the progression of the State Center project since June 2007, when the initial Memorandum of Understanding between the State of Maryland and the original development team was presented to the Board of Public Works for approval. Since then, the amount of time and effort that your agencies have invested in the success of the State Center project has been truly impressive – a reflection of the uniqueness of the proposed arrangement, its order of magnitude, and the extraordinary amount of taxpayer dollars that would be committed to this venture.

I would like to sincerely commend each of you for the spirit of responsiveness and collaboration displayed by your respective agencies over the course of this endeavor. That said, I must respectfully inform you that I cannot and will not support further efforts to complete this project as currently proposed. I have developed a unique perspective on State Center over the past four years, during which my Board colleagues and I have been asked to vote on more than a dozen agenda items pertaining to this project.

As you know, I have voted at times to allow the project to progress to its next phase, as when I supported the initial MOU in 2007, as well as the State’s Master Development Agreement with the revised project team in 2009. There have also been times when I have cast the sole dissenting vote on the Board of Public Works, as when I opposed the recommendation last December to incur $33 million in taxpayer debt to construct a parking garage on the State Center site.

Over the life of this project, though, I have voiced concern about the pragmatism of undertaking a commercial real estate venture of this magnitude in the midst of the worst economic climate since the Great Depression. I have questioned the efficacy of a project that has been billed as a model public-private partnership, but which could not survive in the absence of Maryland’s state government as the largest occupant, by far, of leased office space.

Finally, I have expressed my reluctance to place the taxpayers of Maryland in greater debt to construct facilities that the private sector routinely builds and manages at a considerable profit. In short, I have shared your desire, and that of Governor O’Malley, to bring good-paying and family-supporting jobs to Baltimore City.

I wholeheartedly embrace the effort to reinvest in neighborhoods that have been overlooked for too long, and I applaud your obvious commitment to the principles of smart growth through transit-oriented development. However, having examined both the acknowledged and potential future costs of this proposal, and having done so within the context of the severe fiscal challenges that continue to confront our state, I believe that the State Center project simply represents the wrong approach to those goals.

Moreover, I believe that proceeding with this project would pose undue risks to the State of Maryland and its taxpayers at a highly inopportune time. It is difficult, for example, to justify the willingness of State agencies to rent space at above-market rates at a time when Maryland’s structural budget deficit continues to exceed one billion dollars. I believe that taxpayers who have been forced to make sacrifices to survive the economic downturn – and are now hearing speculation from Annapolis about further rounds of tax increases in the coming months – will justifiably question our decision to pay premium rates in a bargain-rich market where high vacancy levels will, unfortunately, be the norm for the foreseeable future.

This decision is incompatible with the State’s assurances that it has, indeed, done everything possible to contain spending and operate more efficiently before considering new sources of revenue. In fact, one could argue that current and anticipated future conditions in the commercial real estate market justify a reexamination of the State’s decision to enter into a long-term lease to start with.

In the midst of perhaps the greatest buyer’s market in recent memory, the State Center plan requires the State to enter into a 20-year lease, after which, as Treasurer Kopp pointed out in a 2010 letter to legislative leaders, “the State will have essentially paid for about 89 percent of the developer’s cost of the State’s share of the building. But the State will have no equity in the buildings, nor any apparent reduction in rents beginning in year 21.” In other words, the State of Maryland would be a long-term renter at a time when all of the economic indicators point in favor of buying property at deep discounts.

Of arguably greater concern is the effect that this project could have on Maryland’s debt load and, ultimately, our standing in the financial markets and our hard-earned reputation for sound fiscal stewardship. As you know, the State is fast approaching our self-imposed debt ceiling, as defined by the ratio of tax-supported debt service to revenues, and is scheduled to actually hit that ceiling in 2017 if not sooner. Given that backdrop, I must reiterate that it is imprudent to add the cost of a new parking garage to our list of debt obligations.

Furthermore, it has been suggested that the long-term leases themselves have the characteristics of a capital obligation, and in fact there is reason to believe that the Governmental Accounting Standards Board (GASB) will move in the near future to formally define such arrangements as capital leases. If that occurs, and the State is required to count the lease as a capital debt obligation, that would drive our future debt load well beyond our existing standards of affordability.

At a time when households throughout Maryland have learned the consequences of excessive borrowing and our entire nation is becoming painfully aware of the long-term costs of excessive and mounting government debt, I simply do not believe that we can risk the possibility of “maxing out the State’s credit card.” Rather than continue to flirt with that possibility, I believe that we must harness our collective energy and work innovatively to reduce our State’s debt load, thereby ensuring that we will have the means to invest sensibly in superior schools, better roads, quality health care and other truly essential priorities.

In conclusion, I believe that in the best of times, the proposed redevelopment of State Center would be a calculated risk with a possibility for longer-term, speculative benefits. A sagging economy, severe budget challenges and mounting state debt serve as reminders that these are not the best of times. As both of you know so well, those of us who serve as fiscal stewards of the state cannot establish priorities solely on the basis of what we want, or what we hope to achieve, but rather on what we can afford. For the aforementioned reasons, I do not believe that we can afford the risks associated with State Center, nor can we justify passing down the consequent costs to our taxpayers.

Thank you for considering my perspective, and once again, for your exceptional service to the State of Maryland.

Sincerely, Peter Franchot Comptroller

Posted by Jay Hancock at 1:23 PM | Permalink | Comments (18)
Categories: Government & Business
        

From the Krugman blog:

If you seriously believe in markets, you should believe that given the right incentives — namely, putting a price on emissions, through either a tax or a tradable permit scheme — the economy will find lots of ways to emit less. You should definitely not believe, as anti-environmentalists claim, that the result would be economic disaster.

And what should be the grounds for optimism? Well, if you look at the history of fossil fuel use, you see that it’s one of continuous innovation and improvement. Early steam engines were extremely inefficient; but over the years, less through scientific breakthroughs than through experience and practical innovation, they became vastly better. The same is true of airplanes and much more.

The point is that renewable energy like wind and solar has not gone through a comparable process of improvement — yet — because the incentives haven’t been there.

Posted by Jay Hancock at 12:09 PM | Permalink | Comments (0)
        

The Daily Record reports (login required) that the developers of shortmail.com landed a venture financing round:

A Baltimore Internet communications company has secured about $750,000 in its first round of external funding, top executives said, adding that the investment highlights the city’s growing taste for technological development. 410 Labs — which this month released to the public an email service called Shortmail.com — has garnered coast-to-coast support

Billing itself as "email, simplified," shortmail is limited to 500 characters (Twitter is 140) and is available on multiple platforms. It's taking the Twitter short-message format and switching it from the broadcast model (you tweet your legions of followers) to the old-fashioned bilateral model (you write a letter to another person). (There is also a "public conversation" function.) The idea, I suppose, is that pre-commitment to short messages will make both senders and recipients prefer shortmail over conventional email.

When you open your shortmail inbox you know you'll get a high quotient of valuable information for time invested. No endless screeds from friends and colleagues. No stupid attachments. And when you send a shortmail, you know you won't be tempted to ramble on -- another time saver. I could see workplaces adopting shortmail as a way to make employees refine ideas and improve communication. And you can use shortmail with existing email accounts.

How will shortmail make money? An ad-revenue model would make shortmail not so simple and elegant anymore.

Posted by Jay Hancock at 9:42 AM | Permalink | Comments (0)
        

From an article by Ali Alichi of the International Monetary Fund. The title: Geriatric Deadbeats:

Studies have shown that a country's willingness to repay is as important as whether it has the resources to repay. This willingness deteriorates as voters age because they have a shorter period to benefit from their country's access to international capital markets and become more likely to opt for default on current debt. Moreover, older voters generally benefit more from public resources—such as pension and health care benefits—which could shrink if debt is repaid. If the old are a majority, they might force default, even if it is not optimal for the country as a whole.

The idea is that, consciously or not, senior citizens realize they have less to lose and more to gain from an unsustainable increase in their country's debt. Seniors typically enjoy more government benefits than younger folks, so they favor continued borrowing to keep this up. And they're not going to live as long as their children, so they're less worried about the long-term consequences of overborrowing and eventual default.

HT Big Picture.

Posted by Jay Hancock at 9:11 AM | Permalink | Comments (1)
Categories: Slo-mo fiscal train crash
        

Lacy Hunt at Hoisington Investment has been worried about soaring debt and disinflation (declining inflation) and deflation (sustained falling prices) since the 1990s. He still is. From his latest quarterly economic analysis, written with Van Hoisington:

While the massive budget deficits and the buildup of federal debt, if not addressed, may someday result in a substantial increase in interest rates, that day is not at hand. The U.S. economy is too fragile to sustain higher interest rates except for interim, transitory periods that have been recurring in recent years. As it stands, deflation is our largest concern, therefore we remain fully committed to the long end of the Treasury bond market.

These guys have made very smart bets for years now by owning 30-year Treasuries and zero-coupon Treasuries. Many investors have avoided long Treasuries because they're worried about inflation, settling instead for miserably low short-term coupons. But the Hoisington bet against inflation has been exactly right, and their shareholders have done very well. Hunt and Hoisington don't seem especially worried that the debt-ceiling argument (possible near-term defaults, downgrades of Treasuries) will hurt their investments, either.

Posted by Jay Hancock at 8:50 AM | Permalink | Comments (1)
Categories: Inflation/Deflation
        

A discouraging paper from Chris Herbst, assistant professor at Arizona State. He replicates earlier research showing a sharp decline in women's happiness in recent decades. But he argues that men, too, have seen a happiness reduction. He blames the usual suspects: financial insecurity, breakdown of societal ties etc.

The data are from before the current economic downturn. One could presume they would show continued or worse unhappiness since 2005.

In contrast to Stevenson and Wolfers, I find that men and women between 1985 and 2005 experienced similar decreases in life satisfaction. Furthermore, both sexes witnessed comparable slippages in self-confidence, growing regrets about the past, and declines in virtually every measure of self-reported physical and mental health. The data also show that men’s well-being in recent years has begun to fall more rapidly than that for women. In the final section of the paper, I present some initial evidence that the steady erosion in social and civic engagement, interpersonal trust, and financial security could be partially responsible for the widespread decline in subjective well-being over the past few decades.

And:

Results in this table consistently show declines in life satisfaction for men and women, irrespective of the sub-group examined. The only exception to this is black men, who experienced a statistically significant increase in well-being between 1985 and 2005.

And:

The first two indicators evaluate respondents’ regrets about the past. Both measures point in a consistent direction: men and women over the last two decades increasingly feel that they would live life differently if given another chance. The rising regrets about the past, moreover, have been experienced in a similar manner by both sexes,

Posted by Jay Hancock at 9:13 AM | Permalink | Comments (0)
        

Stanley Black & Decker Executive Chairman Nolan Archibald is earning more of his "synergy bonus" for cutting costs at the combined Black & Decker and Stanley Works.

From the Reading, Pa., Eagle:

Baldwin Hardware, the internationally renowned maker of high-end brass fixtures that has been based in Reading for more than a half-century, no longer will make those products locally and 159 employees will lose their jobs by the end of next year.

The company's owner said Thursday that it plans to close and vacate the plant at 841 E. Wyomissing Blvd. by the fourth quarter of 2012 and transfer most manufacturing to Mexico.

New Britain, Conn.-based Stanley Black & Decker Corp., which bought Baldwin in 2003, said Baldwin's customer- and consumer-services team, numbering about 35, would remain in the Reading area at a location not yet identified.

Read the whole story here.

Posted by Jay Hancock at 11:07 AM | Permalink | Comments (3)
        

Wands, crystal phials, robes, pointy hats. Centives has the answer. It's expensive, but even so it's a much better deal than the Ivies. Even Harvard grads can't do magic, although many believe they can. Presumably Harry Potter got financial aid and a merit scholarship due to financial need, exceptional ability his status as a legacy applicant etc.

HT Marginal Revolution.

UPDATE: The Sun's Hogwarts bureau reports that Harry had a huge trust fund, so scratch the comment about need-based financial aid.

Posted by Jay Hancock at 8:45 AM | Permalink | Comments (1)
        

The Center for Responsive Politics can help you find out. In its piece on political contributions by the wedding-industrial complex this week, it suggests you look up your gift registry vendor, your caterer your hotelier or your florist on its database site, OpenSecrets.org, to see if they share your views on the debt ceiling.

Brides who want to use their money to support vendors that share their party preference can use OpenSecrets.org to find out which parties have benefited from any PACs associated with their flower provider or reception hotel.

Macy's PAC, as one example, directed 55 percent of their 2010 donations to Republican candidates. The PAC of Hilton Worldwide, on the other hand, directed 51 percent of their donations in the same cycle to Democrats.

And:

THE WEDDING-INDUSTRIAL COMPLEX: Wedding season is in full swing. As many soon-to-be-married people spend hundreds of dollars preparing for their weddings, major wedding vendors also spend a healthy amount of money attempting to influence government policy.

One in every four brides reportedly purchases her wedding dress at David's Bridal, a subsidiary of Leonard Green & Partners. During the first quarter of 2011, David's Bridal spent $10,000 on lobbying. Also during the first three months of 2011, Tiffany & Co., another company in the business of weddings, has spent $80,000 on lobbying -- focusing on mining laws.

Macy's, another popular wedding vendor, doesn't spend much money on lobbying, but it does have an affiliated political action committee. Macy's company PAC donated $38,000 to federal candidates during the 2010 cycle.

Posted by Jay Hancock at 6:06 AM | Permalink | Comments (0)
        

A couple Canadian economists showed yet again that only the best and brightest researchers can prove the obvious. Nevertheless, it's always good to test what we think we know. And the details are interesting. The researchers found little "I hate Monday" effect. People were less likely to laugh, be happy etc. on Mondays than on Saturdays or Sundays. But Mondays didn't stand out as significantly different from any other weekday.

If you hate your job, there is more of a "weekend effect" mood bounce. Likewise if your boss is a jerk. (The euphemism here is "boss-like supervisor" vs. "partner-like supervisor.") And the folks who seem to be digging weekends the most as compared with the rest of the week are the middle-aged.

From the abstract:

Weekend effects are twice as large for full-time paid workers as for the rest of the population, and are much smaller for those whose work supervisor is considered a partner rather than a boss and who report trustable and open work environments. A large portion of the weekend effects is explained by differences in the amount of time spent with friends or family between weekends and weekdays (7.1 vs. 5.4 hours). The extra daily social time of 1.7 hours in weekends raises average happiness by about 2%.

Posted by Jay Hancock at 6:00 AM | Permalink | Comments (2)
        

Martin Wolf, chief economics commentator for the Financial Times, is hardly a wild-eyed socialist. He was once influenced by influenced by Hayek's Road to Serfdom, which has become a bible for some Tea Partiers, although he seems to have moved back to the middle. From his point of view the U.S. budget situation (paywall) is not that complicated, nor is the solution.

The astonishing feature of the federal fiscal position is that revenues are forecast to be a mere 14.4 per cent of GDP in 2011, far below their postwar average of close to 18 per cent. Individual income tax is forecast to be a mere 6.3 per cent of GDP in 2011. This non-American cannot understand what the fuss is about: in 1988, at the end of Ronald Reagan’s term, receipts were 18.2 per cent of GDP. Tax revenue has to rise substantially if the deficit is to close.

Posted by Jay Hancock at 4:56 PM | Permalink | Comments (2)
Categories: Slo-mo fiscal train crash
        

Paging Nicholas Carr. Here's a bit from a seminar John Mayer gave to his alma mater, the Berklee College of Music.

And possibly more alarming, Mayer realized that pouring creativity into smaller, less important, promotional outlets like twitter not only distracted him from focusing on more critical endeavors like his career, it also narrowed his mental capacity for music and writing intelligent songs.

“The tweets are getting shorter, but the songs are still 4 minutes long. You’re coming up with 140-character zingers, and the song is still 4 minutes long…I realized about a year ago that I couldn’t have a complete thought anymore. And I was a tweetaholic. I had four million twitter followers, and I was always writing on it. And I stopped using twitter as an outlet and I started using twitter as the instrument to riff on, and it started to make my mind smaller and smaller and smaller. And I couldn’t write a song.”

Maybe that explains "Your Body is a Wonderland." HT Big Picture.

Posted by Jay Hancock at 8:34 AM | Permalink | Comments (1)
        

Last week the Maryland Public Policy Institute published a study of the huge State Center project for midtown Baltimore, much of which would be financed with taxpayer dollars. The purpose of the study was to add up the public subsidy. MPPI came up with a figure of $127 million, including above-market rents, tax breaks etc.

Transportation Department officials pushed back, demanding that MPPI withdraw the study because it didn't ennumerate State Center's public benefits and allegedly overstated the cost. Now MPPI has its retort, basically saying that the point of the study was not to measure benefits and that the researchers didn't double-count one of the subsidies, as the state officials claimed.

In a cover letter with the reply, Christopher B. Summers, MPPI's president, denies suggestions that the report was secretly financed by Orioles owner, superlawyer and downtown landlord Peter Angelos. Summers notes that report coauthor Jeff Hooke, who vigorously opposed Angelos' claim to $1 billion in state tobacco litigation fees in the early 2000s, would hardly be Angelos' first choice as a ghostwriter. The letter was sent to Michael Gaines Sr., assistant secretary in the Department of General Services, and State Center project director Christopher Patusky:

Neither organization [MPPI and affiliate Maryland Tax Education Foundation] is affiliated with groups in favor of or opposed to the project. The report was not funded by any such groups or individuals. Indeed, given Jeff Hooke and the Maryland Tax Education Foundation's history with Mr. Angelos, it is puzzling why anyone would think Jeff would now try to help Mr. Angelos receive financial benefits from the State Center project. These false claims raise ethical questions about your agencies and are a disservice to the citizens of Maryland.

Posted by Jay Hancock at 6:08 AM | Permalink | Comments (4)
        

Howard County executive Ken Ulman is right. Smoking is "a dirty, filthy habit." But it also happens to be legal. Ulman is joining New York and other localities in banning smoking in county parks. "The vast majority of Howard County does not smoke," Dr. Peter Beilenson told The Sun. "Public property is meant to be enjoyed by the majority."

James Madison warned about the tyranny of the majority. Another smoking restriction is not tyranny, but it looks like discrimination. Indoor smoking is a health hazard. I'm glad newsrooms aren't filled with cancer fumes anymore. But there is little evidence that secondhand outdoor smoke harms anybody. Even the scientists who research this stuff are a little amazed at what's going on. Here's what Boston University public health professor Michael Siegel wrote in the NYT:

Inevitably, smoking-ban opponents ask me, “What’s next, banning smoking outdoors?” My answer has always been no: not only can people move around and thus avoid intense exposure, but smoke quickly disperses in the open air.

Now, to be philosophically consistent, Howard County has to outlaw public park campfires and barbecues, too.

UPDATE: From a New England Journal of Medicine editorial last month:

But air-monitoring studies have shown that health risks to people exposed to secondhand smoke outdoors drop off dramatically when the source of the smoke is more than 2 m away. The editor of the journal Tobacco Control dismissed as “flimsy” the evidence that secondhand smoke poses a threat to the health of nonsmokers in most outdoor settings. Nevertheless, smoking opponents continue to press their case using a variety of claims, including public health rationales as well as “public nuisance” arguments such as litter abatement.

Posted by Jay Hancock at 9:18 AM | Permalink | Comments (49)
        

State officials pushed back Friday against a critical study of the $1 billion-plus State Center project for midtown Baltimore, demanding that the Maryland Public Policy Institute "withdraw your recently issued report." Read the whole thing here.

One of their main arguments is that MPPI failed to add up the project's benefits in their study. This is a common response when somebody questions a public project. The development will generate $81 million in taxes, ground rents and parking fees! It'll be a "world class transit-oriented development." It'll create "thousands of jobs."

As if somehow that trumps all questions about the project's cost to taxpayers. The rents the state has agreed to pay seem substantially above the going rate. The developers want the city to approve an expensive tax-increment financing deal. The Department of Legislative Services, the General Assembly's nonpartisan research wing, found that the project "is not in the best interests of the state" and that the projected property-tax assessments appear "unrealistically high."

Perhaps the most troubling aspect is that the project did not result from a competitive bidding process. How does the state know it's the best deal when there was no request for bidding proposals? What matters isn't that the project has benefits. What matters is what taxpayers are paying for them.

Posted by Jay Hancock at 6:00 AM | Permalink | Comments (14)
Categories: Corporate welfare
        

I haven't been able to load a page for three days.

UPDATE: They're working again.

UPDATE: Mike Busch spokeswoman Alex Hughes says: "The servers, email and phone system were down from Friday at 5pm until last night for upgrades and repairs. There was a notice up on the MGA website at the end of last week, prior to the servers being taken down."

Posted by Jay Hancock at 3:14 PM | Permalink | Comments (4)
        

The June employment report is a shock. Private payroll surveys earlier this week suggested that the economy added as many as 150,000 jobs, on net, last month. But today's report from the Bureau of Labor Statistics shows a gain of only 18,000 jobs, and the May gain got downgraded from 54,000 to 25,000. (Here is the Reuters report.) It'll add to pressure on Obama to do "something" and will increase accusations from Republicans that political uncertainty is keeping business from hiring. (Which may be true, although the biggest uncertainty -- over the debt ceiling -- is made in Republicanland.)

Here is some perspective. The government started measuring unemployment after World War II. Until recently the longest stretch since then of joblessness over 8 percent was two years and two months in the early 1980s. Now we've breached that. June's unemployment rate of 9.2 percent makes it two years and four months that joblessness has been over 8 percent. And there are no signs of the streak ending anytime soon. In fact the unemployment trends -- it was as low as 8.8 percent in March -- are heading the wrong way.

UPDATE: WBAL's Bill Vanko and I talk about the jobs report.

Posted by Jay Hancock at 9:04 AM | Permalink | Comments (41)
        

There were already plenty of reasons to question the redevelopment of State Center as currently envisioned. The process of awarding the project was irregular. The composition of the development team changed afterward. The project could create an Baltimore office supply glut, suck tenants from downtown and add to a vacancy problem on the harborfront. And it's very expensive for taxpayers. How expensive?

The Maryland Public Policy Institute has published an excellent analysis by Jeff Hooke and Gabriel Michael. It's one of the best things they've put out, and anybody interested in the project should read the whole thing. It's less than five pages. Aside from the financial analysis the report is a good scorecard of players and events so far. The headline is that State Center as now structured would cost taxpayers $127 million when you count all the giveaways -- tax credits, free land, free parking garage, inflated rent etc.

Some other highlights:

To promote the first phase, the state has, among other items, (1) agreed to pay an above-market rental rate— about $10 per square foot extra—on its new office space, (2) construct a parking

garage financed by $33 million in sState bonds, and (3) rent the land to the developer for a nominal amount. Additionally, Baltimore City will contribute infrastructure, (4) including about $15 million worth of construction supported by tax increment financing (TIF) bonds.

Because the private developers are so
thinly capitalized, the state must pay rent even if Phase I’s
completion is delayed. Otherwise, commercial debt financing
is unavailable according to project-related documents.
This analysis assumes no cost overruns, although cost overruns
are not unusual in a project of this size.

We anticipate the private developers will invest little
of their own money. Apart from the estimated subsidies,
most of Phase 1 will be financed through commercial loans
backed by the state’s long-term office space lease.

Posted by Jay Hancock at 8:03 AM | Permalink | Comments (9)
Categories: Corporate welfare
        

Holy cow. I hadn't heard of anybody who expected this. Rupert Murdoch is closing the News of the World in the wake of the phone hacking scandal. At most people figured he would throw a few editors to the wolves.

But Murdoch son James Murdoch is closing the paper founded in the mid-1800s, leaving the Sunday Sun to soldier on. It's true that advertisers had pulled out in response to the phone hacking revelations. But they would have returned in time if NOTW had been a solid franchise. There also was probably intense political pressure from Prime Minister David Cameron for the Murdochs to do "something." But closing the paper? Murdoch's pulling of the plug suggests that the NOTW was struggling financially. Struggling as much as Murdoch's "quality" paper, the Times? Hmmm.

But for many it may seem an appropriate end to a newspaper that seems to have run amok, with the latest revelations on hacking a dead girl's voice messages as the last straw.

UPDATE: See more complete BBC story here.

UPDATE: Elizabeth Knight of the Sydney Morning Herald identifies the real pressure point: Murdoch's desire to take full control of BSkyB:

The bigger concern would be the possibility that the British government may now try to find some way to block Murdoch from taking full control of BSkyB.

At this point the government, which has already approved the acquisition, is showing no sign of changing its mind - despite vocal calls from some inside the Conservative Party to put an end to Murdoch's power.

Posted by Jay Hancock at 11:56 AM | Permalink | Comments (2)
Categories: Media
        

Costco had a monster same-store sales gain for the month of June: 14 percent, according to Reuters. Dick Bergeron suggests that Costco is the paradigm for the new economy: Cash on the barrel. No plastic please! (Except for Costco's private label American Express.)

UPDATE: A reliable source says that Costco takes all American Express cards. Also, a reader suggests that much of the gain came from gasoline, which makes sense.  

Which brings us to Costco. I like its business model. It’s not the place to go if you want to keep a tab running like the Feds do. At the checkout, you are expected to put cash on the barrelhead (debit card’s the same thing), or you may use Costco’s own American Express vanity card. That’s it. And that’s the way it should be. No VISA, no MasterCard – please! None of those other cards either. Would you just pay up front? Thank you. Please come back again.

I like that. Reminds me of a more substantial time. As when, for example, if a person wanted to buy a house, he or she actually had to have a salary, and the banker actually had to make sure that a person could afford that home. Because Mr. Banker (they were mostly guys then) could not get off the hook by selling off a bad loan to a financial aggregator who would magically turn that loan into paper and sell it off to a sucker down the line.

Posted by Jay Hancock at 8:31 AM | Permalink | Comments (11)
Categories: The Great Recession
        

Versace's Facebook page is back to showing only pictures of Anne Hathaway and Lady Gaga after the company's PR department scrubbed comments on a controversial technique for making jeans look worn, Mashable reports.

Versace has shut down posting to its Facebook Page after activists covered its Wall with messages protesting the Italian fashion house’s use of sandblasting, a technique for giving denim a worn look.

Dozens of messages linking to the campaign appeared on the brand’s Wall last month after a petition to stop Versace’s “killer jeans” appeared on protest platform Change.org.

It's the usual hamhanded response from corporate publicity minders when things start to go against them. "Dozens" of protest messages about sandblasting is hardly a deluge. Heck, there are 1,000 "likes" and 58 comments just on Lady Gaga. By deleting the comments Versace just put the the sandblasting protest into a huge megaphone and broadcast it all over the world. The move also suggests that Versace views its Facebook page as just another glossy magazine ad instead of a way to interact with customers and the public.

Posted by Jay Hancock at 6:10 PM | Permalink | Comments (1)
Categories: Marketing
        

I'm sure the company's investors and executives disagree, but PetFlow.com, which announced a venture financing round today, sounds kinda like the notorious Pets.com, one of the many online retail flops of the 1990s. The schtick here seems to be the regular, automatic delivery of pet food, saving folks from having to lug huge bags of kibbles from the Safeway. Will that be enough to make online pet-related sales work this time?

PetFlow.com was founded for a very simple reason – to ensure that you never run out of pet food again. PetFlow.com’s “auto-replenishment” system allows its customers to save time and money through the convenience of automatic delivery, where they can receive orders for their favorite brand of pet food and supplies every two to 16 weeks, or at the frequency of their choosing. PetFlow.com also offers a premium selection of health-conscious, high-quality pet food brands that have previously been available only in regional or local specialty stores. The company’s breadth of products help set it apart from large-scale retailers such as PetCo and Petsmart.

Posted by Jay Hancock at 3:36 PM | Permalink | Comments (4)
        

A new report in the Journal of the American Medical Association furnishes new evidence of unnecessary stent procedures.

UPDATE: Here is the story in today's Sun:

From CNN:

Researchers from several major heart centers analyzed more than half a million PCIs performed in the years 2009 and 2010, at more than a thousand hospitals. Of those done in acute situations, nearly all – more than 98% – were deemed “appropriate,” according to the study. However, many PCIs in non-emergency situations were not recommended under guidelines developed by a leading group of heart experts. Among non-acute cases, 50% were deemed “appropriate,” 38% “uncertain” and 12% “inappropriate,” according to the study. Most of the inappropriate procedures were done on patients with low-risk heart conditions.

"Acute situations" are when a patient is in the middle of a heart attack. Stent abuse takes place when patients are stable and often don't need one. So 12 percent of the nonacute cases were inappropriate -- that's 20,000 cases. What's more:

Researchers also found that some hospitals are far more likely than others to do unneeded PCIs. Jneid calls this “troubling” and says it suggests that some patients are being pushed into procedures for the financial benefit of doctors or hospitals. “You hate to say that, but it’s a possibility.”

The inspector general at the Centers for Medicare and Medicare Services needs to investigate the hospitals installing unneeded stents at taxpayer expense and patient risk. So far the CMS IG office has shown little sign it is moving aggressively against the kind of stent abuse that was allegedly done on a massive scale by Dr. Mark Midei and St. Joseph Medical Center.

UPDATE: Here is another case of alleged "overstenting" in Tennessee. As in other cases, the irregularities seem to have been brought to light by a whistleblower, not government investigators.

Posted by Jay Hancock at 1:16 PM | Permalink | Comments (2)
Categories: Health Care
        

As someone who enjoys abusing AARP, the seniors lobby, I have to give them credit for being willing to consider benefits cuts in Social Security. From the NYT on Friday:

“Our goal is to limit any changes in benefits,” John Rother, AARP’s policy chief, said in a telephone interview, “but we also want to see the system made solvent.”

Mr. Rother said the group’s stance on possible cuts, which was first reported in The Wall Street Journal in Friday’s editions, should be seen less as a major change in position than as a reflection of the political and financial realities facing the Social Security system and the country as a whole.

“You have to look at all the tradeoffs,” Mr. Rother said, “and what we’re trying to do is engage the American public in that debate.”

Modest changes to Social Security -- raising the retirement age or whatever -- are part of getting the country back on a sane fiscal path. Kudos to AARP for saying so.

Posted by Jay Hancock at 8:31 AM | Permalink | Comments (8)
        

Pfizer is cutting R&D by a fourth and laying off thousands of researchers. Of course its stock went up on the announcement, which will boost profits in the short term but probably depress them in the long term. But nobody cares about the long term anymore. Certainly not many CEOs, whose personal business model is to goose profits in the short term and siphon as much money as possible into their personal accounts as possible. And not many shareholders, either, who have become less and less long-term investors.

Pfizer's former head of research, John Mattina, told Reuters he was surprised by the move:

Trimmed down to $6.5 billion to $7 billion, Pfizer's research budget will represent around 10 to 11 percent of the company's estimated revenue in 2012.

"That's a pretty low percentage for the largest pharmaceutical company in the world," said LaMattina, now senior partner at healthcare venture capital firm PureTech Ventures.

"This industry historically has spent anywhere from 15 to 20 percent of top-line sales in R&D," LaMattina said. "It's their lifeblood. If you don't have new products you don't have a business anymore."

Posted by Jay Hancock at 8:18 AM | Permalink | Comments (3)
Categories: Health Care
        

This is a year old, but it still holds up as a sobering, scary economic and political analysis of the debt showdown in Washington. From Martin Wolf, the Financial Times' chief economics commentator:

Moreover, since the Republicans have no interest in doing anything sensible, the Democrats will gain nothing from trying to do much either. That is the lesson Democrats have to draw from the Clinton era’s successful frugality, which merely gave George W. Bush the opportunity to make massive (irresponsible and unsustainable) tax cuts. In practice, then, nothing will be done.

Indeed, nothing may be done even if a genuine fiscal crisis were to emerge. According to my friend, Bruce Bartlett, a highly informed, if jaundiced, observer, some “conservatives” (in truth, extreme radicals) think a federal default would be an effective way to bring public spending they detest under control. It should be noted, in passing, that a federal default would surely create the biggest financial crisis in world economic history.

Posted by Jay Hancock at 6:41 PM | Permalink | Comments (0)
Categories: Slo-mo fiscal train crash
        

Virginia Gov. McDonnell put out a suggestion box for state employees on how to save the state money. The winner:

Karen Barger of Blue Ridge, Virginia is the winner of the $2,500 grand prize in Governor McDonnell’s “30 Day Sprint” competition with this submission:

“I would like to suggest that the Commonwealth do away with advertising for jobs in the newspaper. In this day of Tweets, and internet use in general, why are we still using the newspaper to advertise for vacancies? Almost all job listings require that you fill out an application online. So why do so many agencies still pay big bucks to advertise in the newspaper? This would save thousands of dollars. Thank you for reading my suggestion.”

Karen was onto something. In fact, according to early research done by the Secretary of the Administration’s office, in the last five years over $17 million was spent by agencies of the Commonwealth on advertising positions in print media. However, data shows that 92% of Virginians now learn about state employment opportunities through other means, including online ads and listings. Karen’s idea will be studied and evaluated in the weeks ahead.

Posted by Jay Hancock at 11:31 AM | Permalink | Comments (1)
Categories: Media