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Atlas Shrugged: Part I December 30, 2012

Posted by federalist in Special Interests.
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Finally got around to watching Atlas Shrugged: Part I. As a movie adaptation of a book it was very well done: It managed not only to distill the first 300 tedious pages of Ayn Rand’s book into an engaging 1.5 hours, but also to deftly shunt a 50-year-old plot centering on the railroad industry to a plausible near future.

Like the book the movie hits you over the head with its anti-socialist pro-capitalist message. But the story is more salient now than it would have been just a decade ago. What was once considered an allegorical warning about Communism now plays like a historical fiction of modern U.S. politics. In fact it wasn’t until the very end of the movie that one of the socialist bureaucrats finally did something so unbelievable that I actually said, “Well that’s just fundamentally unconstitutional.” (He declared a special federal tax on the “rich” state of Colorado.) Of course most of the movie is about unconstitutional machinations of the federal government and special interests. The sad thing is that today we don’t have to think hard to find comparable real-world examples.

Nuclear Recycling Update December 29, 2012

Posted by federalist in Energy.
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I have always been baffled by the U.S. policy to not recycle nuclear fuel. The used uranium nuclear fuel (UNF) rods that leave our nuclear power plants have only lost 3% of their total nuclear energy. I.e., what we call “nuclear waste” is actually 97% nuclear fuel that could be put back into the same reactors after being scrubbed of tiny amounts of accumulated fission byproducts.

We have spent generations accumulating concentrated UNF in storage pools and dry casks at nuclear facilities, waiting for a “permanent” nuclear waste dump to be established where the highly toxic fuel can be safely stored to naturally decay, undisturbed, for at least one million years!

The whole situation is farcical: U.S. nuclear energy was built on uranium (instead of more practical thorium) precisely because one of the products of uranium fission, plutonium, is most desirable for nuclear weapons. As planned, the U.S. accumulated a massive stockpile of plutonium for its strategic nuclear arsenal. Starting in 1976 the U.S. decided not only that it had enough plutonium, but also that refined plutonium was such a strategic risk that it would not condone further operations in which it could conceivably be produced: In particular, recycling of UNF. A few decades later it signed a START treaty that requires it to dispose of its stockpiles of weapons-grade plutonium and uranium. The agreed method of disposal is to dilute and burn the stockpiles in nuclear reactors. This will be done over the next few decades at the Mixed Oxide (MOX) Fuel Fabrication Facility (MFFF) using a process that is virtually identical to nuclear recycling, except that instead of a hypothetical risk of enriched plutonium being siphoned off during one of the steps, it is explicitly starting with enriched plutonium as an input.

Following its original convoluted policy, America’s growing stockpile of UNF will still not be recycled. Meanwhile, most of the rest of the world does recycle UNF, with nearly half of nuclear recycling being handled by the French company AREVA’s plant in La Hague.

Based on AREVA’s extended experience, a 2008 Boston Consulting Group study determined that lifetime costs for dealing with UNF by recycling were at least 10% less than permanent storage. The economic advantages of recycling have certainly increased since then as (1) projected costs of raw uranium have increased and (2) America’s hopes of establishing a permanent storage facility at Yucca Mountain grow increasingly expensive and uncertain.

Are Electric Vehicles environmentally friendly? December 28, 2012

Posted by federalist in Energy.
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Depends on where you charge them. Car and Driver put this useful chart in their July 2012 issue. An electric vehicle is only as environmentally friendly as the generators that charge its battery. (Never mind the distribution overhead and inefficiencies of current batteries.) So unless you’re plugging unto a geothermal or hydroelectric grid your electric vehicle would probably pollute less if it just ran one of the more efficient modern internal combustion engines.

The Holiday Orgy of Wealth Destruction December 21, 2012

Posted by federalist in Finance, Transportation.
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[S]omething like $13 billion a year, is what’s destroyed through gift giving in the U.S.

Joel Waldfogel wrote a whole book on this: Scroogenomics: Why You Shouldn’t Buy Presents for the Holidays. Add me to the list of those efficiency-lovers who disdain our suboptimal holiday customs.

If you want to give a person something of real value then give money. This gives the recipient maximum flexibility to meet their needs or wants. Purchasing a gift for them (including gift cards or items with gift receipts) simply takes something with maximal utility — money — and turns it into something with less utility.  The best you can hope for is to break even, and that occurs only if the recipient would have spent that money on that item at that time.

This guidance does not apply to gifts of time, expertise, or other devotion that aren’t fungible, and which may not even be available for purchase. Which may be where we lost our way: Money seems to be most stigmatized as a gift for occasions where consideration is more appropriate than value. In such cases cash is considered a cop-out — the refuge of scoundrels who don’t know or care enough about the recipient to find something meaningful. In past epochs when markets were less developed and efficient perhaps you could chance upon something at the bazaar that the recipient wouldn’t be able to readily acquire. But today if you could order the item online then you’re fooling yourself if you think that spending hours shopping to find it — on top of whatever time it took to earn the money to pay for it — is doing anyone a service.

Waldfogel has pointed out more systemic problems with holiday consumption patterns. For example: We have to carry excess capacity in our market infrastructure to sustain the holiday surge.  That capacity goes idle during the rest of the year.  The most efficient economy hums along at 100% utilization year-round.

This is not just a problem of gift-giving. Anyone who has tried to travel during holidays would have to agree that they are barbaric. Our goal as both individuals and as a society should be to smooth out surges, not to, for example, create “the busiest travel day of the year” by simultaneously crowding highways and airports, or overwhelming the same vacation destinations at the same time. These customs spawn deadweight surge capacity, though even that is invariably insufficient for peak demand.

Why do people voluntarily queue up for travel delays and long lines? It’s inefficient and unsafe. It’s insane.

School Massacres: When Will We Protect Our Children? December 15, 2012

Posted by federalist in Education, RKBA.
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Another utterly horrific and completely preventable tragedy unfolded today as a suicidal lunatic managed to kill 26 people, including 20 children, at Sandy Hook Elementary School in Newtown, Connecticut. Preventable why? Not because we can detect psychopaths before they act. Nor because we can stop them from acquiring lethal implements. Predictably, many people are obsessing over the particular weapons used in this case: handguns. Indeed, in the United States mass homicides are mostly carried out with firearms. But without access to guns homicidal maniacs turn to other weapons: knives, motor vehicles, or bombs. Indeed, across the world lone psychopaths have carried out massacres of this scale with all of these weapons and more.

What characterizes this and every other massacre in modern American history* (and indeed many more throughout the world) is not the fact that the killer used firearms. After all, many killers, including many bent on mass murder, wield firearms. No, the single most striking characteristic that distinguishes massacres from common murders is that the victims of the former are always defenseless. In the United States rules and laws serve as virtual government guarantees that targets in certain areas will be defenseless. All mass shootings have been in such “unarmed victim zones:” schools, private facilities that ban gun possession, and government installations.

Firearms may be effective tools of mass murder, but they are even more effective tools of defense. Lone gunmen do not succeed in massacring people where citizens are routinely permitted to carry firearms. This is not for lack of trying, either. Armed citizens have stopped so many attempted homicides that the unspoken outrage is that we continue to send our children to schools that are painstakingly stripped of defensive arms.

This is the outrage: Armed citizens are the only common defense against massacres. Whether it’s a maniac wielding guns or knives, or steering a vehicle or bomb past a barrier into a crowd, a bystander with a gun is the only practical and reliable means of putting the massacre to an end. Yet we round up our children every day and put them in the care of a few adults who are forbidden to carry guns.

We should be demanding exactly the opposite: Those who we trust to care for our children should be required to provide for their defense. We will never know when or how the next lunatic will embark on a homicidal rampage, but we do know that the only thing that will reliably stop his diabolic plans will be an armed target or bystander drawing a gun and shooting him until he stops.
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Holiday Tipping Etiquette December 14, 2012

Posted by federalist in Markets, Uncategorized.
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This has become the time of year when all sorts of service employees become very interested in you knowing their names and addresses (often post office boxes!). Notes and envelopes appear from garbagemen, mailmen, paperboys — people you may never see. And it’s no subtle mystery why: They want holiday tips.

In many cases this has become a soft extortion racket: Pay up and you’ll get your paper on your doorstep. Come up short and look forward to picking through bushes for your paper.

Too cynical? Maybe some of these servicemen assume that of course you’re thinking of them during the holidays, and they just want to save you the trouble of waiting outside early in the morning to hand them a bonus check and wish them a Happy New Year.

But isn’t this a recent phenomenon? I don’t remember getting these sorts of holiday notices ten or twenty years ago. I do remember when I ran a paper route as a boy being surprised at the extra cash appearing in my collection envelopes during December.

I guess it was inevitable that spontaneous generosity would evolve into a custom and finally an entitlement. I have been surprised in recent years to read etiquette experts enumerating all sorts of people you should tip — as if money trees sprout in December and every gainfully employed person deserves a windfall.

There may still be some who feel moved by the holiday spirit to share their good fortune with others, but it should be neither expected nor solicited. We are plagued by an entitlement culture, and to cure that I like a suggestion Alex Tabarrok made several years ago: If you would like to express some seasonal generosity remit your tip anonymously. That will foil those who are using the holidays as an excuse for extortion, since they won’t know for sure who “paid up” and who didn’t.

Meanwhile, we need to re-normalize expectations. Here’s my tip: If you have a job now be grateful if you get to keep it in the New Year.

Politics in the Workplace December 12, 2012

Posted by federalist in Social Politics, Uncategorized.
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Years ago, ending one of my first summer internships at a somewhat Liberal company, I was told that it was not a good idea to advertise my Conservative leanings in the workplace. As politics became more polarized an awkward dynamic evolved in the professional world: Liberals became self-righteously and overtly intolerant of Conservatives. Espousing Conservative ideas in the wrong company could actually end your career. In contrast, Conservatives remained disinclined to hold someone’s politics against them if it did not bear on their job performance. So Conservatives learned to hide in the closet unless sure they were among like-minded or tolerant coworkers. Liberals, on the other hand, wore their leanings as a badge of pride. Some apparently forgot that Conservatives even exist: One finance company aggressively recruiting me proudly mentioned that the partners were all big Democrat activists, as if that was another selling point. (Yes, they were based in NYC.)

Now that politics have really started to hit businesses I’ve seen many Conservatives come out of the closet. Right after the reelection of Obama one small business owner said, “This is going to hurt business. I won’t be able to hire as many people as I had planned. Therefore, I think it’s only fair that I give preference to those who didn’t support these policies.” I.e., when it comes to layoffs, let Democrats go first into the arms of the welfare state they asked for.

We Need a Government of Laws, Not Regulations December 10, 2012

Posted by federalist in Government Regulation.
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Larry Arnn does a good job of summarizing the root problem behind many of the posts in this category:

[L]aws are different [from] regulations. Laws are passed by elected (and thus accountable) representatives, they cover everybody equally, and we can all participate in their enforcement because they are easy to understand. Not one of those three things is true of the regulations imposed by independent boards such as those established under Obamacare and Dodd-Frank.

Unfortunately, our government has devolved into a bureaucratic state:

This form of government proceeds by rules, and rules upon rules, and compliance with those rules becomes a key activity of the entire nation. That results in bureaucracy, and in the inefficiencies of bureaucracy. Constitutional government, on the other hand, proceeds by clearly stated laws.

Why Does the Federal Government Subsidize Retirement? December 6, 2012

Posted by federalist in Retirement.
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Since the federal government is, however briefly, about to address its massive liabilities it’s worth re-reading past posts on the entitlement systems that drive a majority of those liabilities and our inability to meet them.

John Goodman surveys the question in a recent essay, concluding, “any reform of the system should give people better incentives to work and pay taxes rather than encouraging them not to work.”