Government – Page 120 – artdiamondblog.com

Needed to Save New Orleans: Less Local Government Corruption and More Local Capitalism

Source of graphic: online version of the WSJ editorial cited below.

New Orleans’ plight is not the result of federal underspending. Uncle Sam has spent some five times more on Katrina relief than any other natural disaster in the past 50 years. Both parties in Congress and the White House opted for the status quo by relying on federal bureaucracies to oversee the rebuilding effort. If Uncle Sam were deliberately trying to waste these funds, it is hard to imagine a better way than to funnel the money through the Department of Housing and Urban Development, the Small Business Administration and the Federal Emergency Management Agency. Both HUD and the SBA have been on the chopping block back to the early Reagan years.

The post-Katrina spend-fest in Louisiana will be remembered as one of the greatest taxpayer wastes in U.S. history. First came the FEMA $2,000 debit-cards fiasco intended to pay for necessities that were used for things like flat-panel TVs and tattoos. Then came the purchase of thousands of mobile homes that cost as much as $400,000 per family housed; the $200 million for renting the Carnival Cruise Ship millions more in payments that went for season football tickets, luxury vacation resorts, even divorce lawyers. Federal flood insurance policies surely will encourage many to rebuild in the same flood plains and at the same height as before.

. . .

After the hurricane, newspapers around the world showed photos of New Orleans under headlines that shouted: "America’s shame." In truth, New Orleans was America’s shame long before Katrina. In large part the residents of the Big Easy were victims of the predatory behavior of their own politicians. Louisiana already ranked among the bottom five of all the states in crime, poverty, health care and school performance; the murder rate in New Orleans today is 10 times the national average.

For all the finger-pointing this week, Congress hasn’t spent much more than a dime to clear away the debris of corruption, patronage, welfare dependency, high taxes and racial division of decimated neighborhoods. What is still lacking in the life of New Orleans is the vital architecture of local capitalism.

For the full editorial, see:

"The Tragedy of New Orleans." The Wall Street Journal (Tues., August 29, 2006): A14.

Unintended Consequences of Sending Food: More on Why Africa is Poor

Millet in bowl. Source of photo: online version of the NYT article cited below.

NIAMEY, Niger, Sept. 21 – The images coming out of this impoverished, West African nation have been unrelentingly grim: hungry children with stick-thin arms and swollen bellies, mothers carrying babies hundreds of miles to look for food after a poor harvest and high prices put local staples out of reach. A few months ago, those images prompted a torrent of food aid from Western donors.

But now, after a season of good rains, Niger’s farmers are producing a bumper crop of millet, the national staple. This should be a cause for rejoicing, yet in one of the twists that mark life in the world’s poorest countries, the aid that was intended to save lives could ruin the harvest for many of Niger’s farmers by driving down prices.

The newly harvested millet and the donated food will reach market stalls at the same time, and with prices depressed, poor farming families may be forced to sell crops normally set aside for their own use and use the money to pay off debts. The effect would be a new cycle of hunger and poverty.

For the full story, see:

Burley, Natasha C. "In Place Where the Hungry Are Fed, Farmers May Starve." The New York Times (Thurs., September 22, 2005): A3.

Source of map: online version of the NYT article cited above.

Chilean Socialist Praises American Melting Pot

Michelle Bachelet. Souce of photo: online version of the NYT article cited below.

SANTIAGO, Chile, June 7 — Michelle Bachelet has lived in the United States twice, first as a child and then as a single mother studying military affairs at the Inter-American Defense Board in Washington. On Thursday, she will return to the capital, but this time on her first official visit as president of Chile.

Elected with a comfortable majority in January, Ms. Bachelet, 54, is her country’s first female president, a pediatrician and, like her predecessor Ricardo Lagos, a Socialist. . . .

. . .

Ms. Bachelet also plans to visit the middle school she attended while living in Bethesda, Md., in 1962 and 1963, when her father was a military attaché at the Chilean Embassy in Washington. That was the first time she had been outside Chile, and the exposure to American society helped mold her intellectually, she said.

"It was a lovely experience, because I found a society with a democratic history, a rich diversity of thought, and which offered opportunities to its citizens," she said. "The idea of the melting pot was the biggest novelty to me, and I would say that all of that allowed me to acquire a political and cultural foundation that has been quite positive to my political performance."

LARRY ROHTER. "Visit to U.S. Not a First for Chile’s First Female President." The New York Times (Thurs., June 8, 2006): A3.

“If Ethanol Made Economic Sense, It Wouldn’t Need a Subsidy”

Source of graphics: online version of the World-Herald article cited below.

(p. 1D) LINCOLN – David Pimentel, a Cornell University researcher, has been criticized repeatedly since he questioned the energy value of ethanol in 1980.

In a government-funded report, he suggested that ethanol provides less energy than is used to produce it. Even though that report has been disputed and rejected by other analysts, Pimentel has not backed down.

He said last week that rural developers, farmers and investors will rue the day they put their money, hopes and dreams into the corn-based alternative fuel.

"It is too bad," he said in an interview, "because it would be a tremendous asset to agriculture if this were a true winner."

Pimentel is among the public critics who raise red flags as momentum gathers for dramatic increases in production, especially in the nation’s top two ethanol-producing states: Iowa and Nebraska.

While Pimentel is perhaps the expert most often quoted – in part because he presented his analysis more than 25 years ago – others also raise questions about the energy value of ethanol and its economic benefits and environmental effects.

Ethanol backers defend the fuel as a viable way to help stabilize the nation’s fuel supply. But they haven’t convinced Jerry Taylor, an energy policy specialist for the Cato Institute, a conservative think tank in Washington, D.C.

"If ethanol made economic sense, it wouldn’t need a subsidy," Taylor said.

For the full story, see:

BILL HORD. "High-octane Clash." Omaha World-Herald (Sunday, August 6, 2006): 1D-2D.

Source of graphics: online version of the World-Herald article cited above.

Entrepreneur’s $100 Million Rocket Destroyed

Lesson one: entreprepreneurship is risky, and often fails. Lesson two: when an entreprepreneur’s rocket is destroyed, his $100 million goes up in smoke; when NASA’s rocket is destroyed, your $100 million goes up in smoke.

Government and industry efforts to develop innovative, less costly rockets suffered a high-profile setback Friday, when the initial flight of a satellite launcher bankrolled by outspoken entrepreneur Elon Musk ended in failure.

After Mr. Musk spent nearly four years and well over $100 million of his personal fortune to create a rocket company from scratch, his Falcon project became the best-known and most aggressive entrant in the fledgling small-rocket segment. But according to preliminary assessments, a fuel leak and resulting fire during last week’s inaugural launch shut down the main engines less than 30 seconds after blastoff from a Pacific atoll. The rocket and a research satellite built by Air Force Academy students were destroyed.

For the full story, see:

Pasztor, Andy. "Entrepreneur’s Rocket Suffers Setback During Maiden Launch." Wall Street Journal (Monday, March 27, 2006): A14.

Distorted Incentives in Medicine

Source of book image: http://www.harpercollins.com/books/9780061130298/The_End_of_Medicine/index.aspx

The problem right now, as Mr. Kessler sees it, is that we fight the "big three" — cancer, stroke and heart attack — with treatment rather than early detection. Cancer cells and blood-vessel plaque can be handled much more easily in the early stages, but we spend most of our money on the later ones. More than 80% of health-care dollars are paid by insurance companies and the government, and neither is especially interested in detecting disease when it first appears. Doctors, regulators, researchers and payers of all kinds are locked into what Mr. Kessler calls — a bit ungenerously — the "cholesterol and cancer conspiracies."

A complicated system of mutual dependency distorts the incentives. "The FDA is like the FCC and Big Pharma is like the regional Bells" is what Mr. Kessler hears from Don Listwin, a former Cisco executive who now heads the Canary Foundation, a Silicon Valley-based effort to promote preventive medicine. In other words, in medicine as in telecom, the big players end up exploiting regulations more than opposing them, if only to preserve their monopolies. The Food and Drug Administration — understandably but narrow-mindedly — wants "cures" for cancer and other diseases. Thus tens of thousands of chemicals are screened, only a handful make it even to Phase I trials, and by the time a new drug is approved a billion dollars has been spent. Even then the new drug may help only 10% of patients.

Yet if someone were to invent a device with a wide, preventive usefulness — say, a nanotech implant that would spot the proteins that indicate the first minute presence of cancer — it would have to go through the same process of billion-dollar testing. Since the government and insurance companies are reluctant to add anything to their repertoire of coverage — and since such a device would be targeted at the much broader pool of people who are not sick — research might well stall in its earliest phases for lack of reimbursement-funding.

For the full review, see:

WILLIAM TUCKER. "Bookshelf; The Art of Navigating Arteries." Wall Street Journal (Tues., July 18, 2006): D6.

A full reference to the book reviewed, is:

Kessler, Andy. The End of Medicine: How Silicon Valley (and Naked Mice) Will Reboot Your Doctor. HarperCollins, 2006.

Welfare Reform Increases Number Employed

Source of graphic: online version of the NYT article cited below.

WASHINGTON, Aug. 20 — Ten years after a Republican Congress collaborated with a Democratic president to overhaul the nation’s welfare system, the implications are still rippling through policy and politics.

The law, which reversed six decades of social welfare policy and ended the idea of free cash handouts for the poor, was widely seen as a victory for conservative ideas. When it was passed, some opponents offered dire predictions that the law would make things worse for the poor. But the number of people on welfare has plunged to 4.4 million, down 60 percent. Employment of single mothers is up. Child support collections have nearly doubled.

“We have been vindicated by the results,” said Representative E. Clay Shaw Jr., Republican of Florida and an architect of the 1996 law who was vilified at the time. “Welfare reform was one of the most successful policy changes in our nation’s history.”

For the full story, see:

ROBERT PEAR and ERIK ECKHOLM. "A Decade After Welfare Overhaul, a Shift in Policy and Perception." The New York Times (Mon., August 21, 2006): A12.

Money Buys Happiness, and Governments Tax It Away

We are . . . all constantly reminding each other that "money doesn’t buy happiness."

Economists aren’t so sure. They note that people with a lot of money tend to express a higher subjective happiness than people with very little. According data from surveys by the National Opinion Research Center, for example, people in the top fifth of income earners are about 50% more likely to say they are "very happy" than people in the bottom fifth, and only about half as likely to say they are "not too happy."

There is, however, generally very little change in the average level of happiness in populations getting richer over the years. For instance, the percentage of the U.S. population saying it was "very happy" in 1972 was exactly the same as it was in 2002: 30.3%. Social critics of "consumerism" explain this by claiming that what makes rich people happy is not money per se, but rather the fact that they have more of it than others — so if everybody gets richer, happiness remains unchanged. The critics go on to say that income differences lead to unwholesome feelings of superiority, so taxes can improve our moral fiber simply by bringing us closer to the same income level.

Perhaps you’re unconvinced. In fact there is another explanation for unchanging happiness levels over time which is rather less supportive of income redistribution. As incomes rise, so generally do levels of government revenues and spending, and there is evidence that these forces work against personal income on the overall level of happiness. For example, a $1,000 increase in per capita income is associated with a one-point decrease in the percentage of Americans saying they are "not too happy." At the same time, a $1,000 increase in government revenues per capita is associated with a two-point rise in the percentage of Americans saying they are not too happy. In other words, not only can money buy happiness, but it may be that the government can tax it away as well.

For the full commentary, see:

ARTHUR C. BROOKS. "Money Buys Happiness." The Wall Street Journal (Thurs., December 8, 2005): A16.

Power to the People

Cooling towers at the Vogtle nuclear power plant in Georgia. Source of photo: the online version of the NYT article quoted and cited below.

A long, and informative cover-story in the NYT, discusses the costs and benefits of nuclear power. My read is that, on balance, the considerations in the article favor nuclear energy. Here are a few passages from near the end of the article:

(p. 64) Gary Taylor, . . ., the C.E.O. of Entergy Nuclear, says he believes a doubling of the number of nuclear plants around the world is inevitable, both to satisfy energy demands and to counter global warming. As Taylor puts it: ”The reality is, what is scalable in the time frame that addresses the issues? If it isn’t this technology, I don’t know what it would be.” Diaz, the former head of the N.R.C., told me he sees a similarly bright future for nuclear. ”The world is going to go nuclear, because they do not have any other real alternatives,” he says. I met plenty of other engineers within the industry who went even further. Their feeling about nuclear power is close to evangelical, in that they seem to approach the technology with moral certitude while being loath to acknowledge any of its many negatives. Would that include the utility executives who will ultimately decide if — and what — to build? I’m not sure it would. To those I spoke with in the uppermost ranks, nuclear power isn’t a belief system. It’s a business. And to them, what might come out of, say, Vogtle Units 3 and 4 — the waste and the power and the profits — would be nearly identical to what comes out of Units 1 and 2.

At least that was my conclusion in Georgia, where Jeff Gasser, the Southern Company’s chief nuclear officer, took me through a long tour of the plant. He was smart, meticulous and intensely committed to the obscure safety protocols that go on at nuclear power facilities. Most of all he was forthright about the advantages and disadvantages of the nukes business. When we went to visit the spent-fuel pool in Vogtle, where the used fuel-rod assemblies are stored under 20 feet of protective water, Gasser let me know that we would die if we pulled one of the fuel assemblies out of the pool. ”We would receive, before we could get to the exit door a few feet away, a lethal radiation dose,” he said. I quickly had to check the radiation dosimeter I was wearing — another legal requirement of the N.R.C. — to see if I was already glowing. (It read zero.) ”The communications people hate it when I use words like ‘lethal’ and ‘irradiated,’ ” Gasser continued. ”But the fact is, there is no perfect way of generating electricity. There are byproducts for every type.” Like many others, he went through the positives and negatives of coal, gas, solar, wind and nuclear. In his opinion, he added, with Vogtle’s engineering, redundancy of safety systems and its trained operators, it was a safe, reliable and efficient way of making electricity. That was his sales pitch.

We had already passed through the containment buildings, where the reactors heat the pressurized water. So Gasser took me through the turbine building, an enormous room the size of a soccer field, where the steam turns the fan blades. Eventually, we went out a back door into the sunlight. The deafening sounds of turbines and machinery subsided to a dull thrum. We removed our earplugs and walked over to a small forest of electrical transformers, our backs to the plant. The electricity from the turbines inside comes out here, Gasser explained, its voltage is transformed, and it is then put into the grid.

Gasser made a pushing motion toward the green hills before us.

”Once the power is sent out of here, it can go everywhere,” he explained. And I could see that it did go everywhere. The high-tension wires stretched away from where we stood, in several directions, through deep cuts in the pinelands, as far as I could see.

For the full article, see:

JON GERTNER. "Atomic Balm? ‘ The New York Times Magazine, Section 6 (Sunday, July 16, 2006), 36-47, 56, 62 & 64.

Cuban Bureaucrats Fooled by Castro Impersonator

Castro impersonator Eddy Calderón. Source of photo: online version of WSJ article cited below.

(p. A1) Mr. Calderón says the work can be risky. Once, he recalls, a woman whose relative had been executed by the revolution hurled a dinner plate at his head. At a recent gig, a tiny, white-haired lady shouted at him: "Why did you ruin the country?" Mr. Calderón, as Fidel, answered that she should thank him because if it hadn’t been for him, she’d be stuck in Cuba instead of living well in Miami, "where you can buy hair dye and dentures."

After the Aug. 13 performance, a ballroom attendant, Armando Montes de Oca, approached Mr. Calderón while he was still in his Castro beard and told him: "If I didn’t know you were Calderón behind that beard, you would never leave (p. A9) this room alive."

"Thank you," Mr. Calderón replied.

Mr. Calderón has been doing his imitation of Fidel for about a dozen years. He became a local superstar two years ago when a cable-TV channel started weekly broadcasts of a skit called "La Mesa Retonta," or "The Idiots’ Table," a takeoff on a weekly "Meet the Press"-style show Mr. Castro has done in Cuba, called "La Mesa Redonda," or "The Roundtable."

Mr. Calderón’s Fidel voice is so good that on about 50 occasions, he has telephoned Cuban bureaucrats in Havana or Cuban diplomats abroad and fooled them into thinking they were on the line with the man himself. Mr. Calderón taped the calls, which he still often plays on a Miami radio show.

Two years ago, Mr. Calderón held a 12-minute conversation with Cuba’s deputy construction minister, ordering him to build a giant retractable roof over Havana’s Latin American stadium, as a way to improve conditions for Cuban baseball players and dissuade them from defecting.

"We need a revolutionary roof to uphold the pride of the Cuban Revolution," said Mr. Calderón during the taped telephone call, in a dead-on imitation of Mr. Castro’s edgy, high-pitched, nasal voice.

"I am your unconditional soldier," replied the hapless minister, who promised to get the job done.

That same year, Mr. Calderón telephoned a luxury hotel at Cuba’s Varadero beach resort and ordered the hotel manager to provide a week-long all-expense-paid vacation for one of Cuba’s leading dissidents, whose movements are shadowed by the secret police, to show the government’s good will. Before hanging up, the hotel manager, Mr. Calderón says, promised to make the reservation.

A year earlier, Mr. Calderón as Fidel told transport official Gumersindo Gómez to round up 200 scarce buses for an outing of some 700 priests of the Afro-Cuban religion Santería, and to find room for their sacrificial goats and chickens. Make sure the buses don’t have any graffiti saying "down with You-Know-Who," he added.

"Fatherland or death," Mr. Calderón said.

"Onwards to victory," replied Mr. Gómez, according to the tape of the phone call.

For the full story, see:

JOSÉ DE CÓRDOBA. "Fidel Castro’s Illness Has Impersonators Scrambling to Adapt In Miami; Mr. Calderón Does El Jefe’s Voice Perfectly; New Role for Brother Raúl." Wall Street Journal (Fri., August 18, 2006): A1 & A9.