Ordinarily, I'm inclined to discount rumors about intrigue and conspiracy theories. I'm more inclined to the philosophy that "most things can be explained by greed and/or stupidity." Historically, though, I do set aside time on alternate Tuesdays to believe in conspiracies. This isn't a Tuesday, but I have a conspiracy theory regarding the timing of Texas A&M's announcement that they are leaving the Big 12 conference. Bear with me; it does connect (tenuously) to public policy.
During the summer of 2010, several changes in college conference line-ups occurred. In the Big 12, Colorado left for the Pac 10 and Nebraska for the Big 10. In certain ways, those changes made sense. The Colorado football program has always recruited heavily on the West Coast. In some ways, Boulder in particular and Colorado in general has a cultural focus that looks West rather than East. And while a good deal of Nebraska's motivation appeared to be "anywhere that Texas isn't," the bulk of Nebraska's population is in the eastern portion of the state and the culture there is a better match with the Big 10 states than with Texas (or Oklahoma, for that matter).
At the same time, there were lots of rumors about schools in the Big 12 South. Four teams to the Pac 10; three or four teams to the SEC; Texas to the Big 10. None of which came to pass, of course. When the rumors were flying hot and heavy, some prominent members of the Texas state legislature weighed in. In particular, they took the position that at least Texas and Texas A&M were a bundle that wouldn't be separated, and if necessary, things could be added to statute during the upcoming legislative session to ensure that. The Texas legislature only meets -- absent special sessions -- every other year. Having completed the 2011 session, they won't be back together until 2013.
In light of this week's announcement, it appears that Texas A&M wasn't a whole lot happier about being in a football conference skewed in favor of the University of Texas than Nebraska was. Unlike conferences like the SEC and Big 10, television revenue in the Big 12 is not shared equally by the member schools. Unlike the Pac 10 and the Big 10, schools in the Big 12 are allowed to have their own sports "networks". Under the Big 12 rules, UT has historically captured a larger share of the conference's television revenue than some of the other schools. And the Longhorn Network, a venture of UT and ESPN, is scheduled to launch next week. The network is regarded by many as an enormous recruiting advantage for UT.
So where, you ask, is the intrigue? It's in the timing of the A&M announcement. By jumping ship now, A&M has done an end-around on the the Texas legislature. Assuming that A&M has lined up the nine votes needed to join the SEC (and essentially everyone seems to assume that's the case), they are in the position of being able to join that conference and play an entire football season there before the legislature meets again. It's one thing to pass a law joining UT and A&M at the hip for deals to be made in the future; it's quite another to pass a law that attempts to overturn existing contracts, particularly where interstate commerce is involved. And in Texas, only the governor can call a special session, and the special session can only consider matters listed by the government in that call. Rick Perry is rather busy just now running for President, and calling a special session to deal with college football isn't consistent with the kind of image I think he's trying to project.
So, kudos to A&M for getting away from UT, and for maneuvering things so that the biggest hurdle to accomplishing that -- the Texas legislature -- is taken out of the game. As for UT [disclosure: I have an MS from Austin, and got a good education for two years there], things seem to have backfired on them. It certainly looks like they are now stuck in a slowly dying conference (didn't they learn anything when the SWC fell apart in the 1990s?). But I think we can put that down to greed and stupidity, not intrigue.
Wednesday, August 31, 2011
Tuesday, August 30, 2011
Federal Donor and Recipient States
From time to time, various bloggers comment on the fact that liberal blue states are generally net donors of federal tax dollars, and conservative red states are net recipients. "Donor", in this case, means that the residents and businesses in the state pay more in federal taxes than the federal expenditures in that state. The primary source for the information for these claims comes from the Tax Foundation [pdf], whose most recent version of the information is based on federal fiscal year 2004. The report makes various adjustments, such as ignoring expenditures that can't be attributed to a particular state (interest on the national debt) and adding in deficit spending as part of the current tax burden (in proportion to the actual taxes collected).
People who spend too much time with me know that I have a peculiar fixation with the idea of separating the US into two parts. There are lots of proposals kicking around the blogosphere about red/blue splits. Mine is quite different, a simple east/west division based on several energy considerations and the ongoing depopulation of the Great Plains. My definition of "West" is the 11 contiguous states from the Rocky Mountains to the Pacific coast; among other common features, these are the states with very large federal land holdings; and Alaska and Hawaii are such peculiar cases that I choose to ignore them. One of the things that I hear regularly is that the West couldn't stand on its own, and one of the reasons is that those states are subsidized by the more heavily populated East.
The same Tax Foundation figures that get used for red/blue comparisons would seem to be a reasonable place to start. The tax burden and expenditure figures from report #139 are reproduced in the following table. The tax burden figures do not include the adjustments the Foundation made to account for the federal deficit; the details of that adjustment are not included in the report, and are probably not important to the conclusions I'm going to draw. Let me begin with the last row of the table. For the US as a whole, the per-capita federal tax burden is $6,369, and the per-capita federal expenditures are $7,311. Taxes covered about 87% of the expenditures.
The main part of the table shows the same calculation for the 11 western states. The portion of state-specific expenses covered by state-specific taxes ranges from 114% in Nevada to 46% in New Mexico. Three states -- California, Colorado, and Nevada -- are net donors, the other are net recipients. [Note that when the Tax Foundation does its adjustment for the federal deficit, Oregon and Washington also become donor states.] The last two columns use the state populations (from Wikipedia, for July 2010) to convert the fractions of the expenditures covered to weighted figures, then sums those to get the fraction covered for the western states as a group: 97%. In short, federal taxes in western states cover a significantly larger portion of the federal expenditures in those states than are covered when the country is considered as a whole. The immediate corollaries are that the non-western states must be doing a worse job of covering their regional expenditures, and that if the "blue states subsidize red ones" argument is true, there is a corresponding "western states subsidize non-western states".
Granted, the skewed populations of the western states means that California is covering most of the western subsidies. That doesn't bother me; any "Western States of America" would clearly be dominated by California, or perhaps by two Californias since a political reorganization would give the north and south portions of the state the opportunity to separate, an idea that Californians seem to bring up regularly. More importantly, though, is that five of the eleven states do better than the national average, and those states illustrate a point that the red/blue state comparisons often miss: it's really an urban/rural thing. California is tied with New Jersey as the "least rural" states in the country, using the Census Bureau definition. All five of the western states that are better than average have economies that are dominated by their urban areas: Colorado's Front Range, Washington's Puget Sound, and so forth. The West would appear to do better than the rest of the country because, despite popular perceptions, it is on average less rural than the non-West.
There is one glaring exception to the "urban equals wealth" argument among these western states: Arizona. Arizona is in the top three western states by population, and is in the top ten nationally for non-rural: less rural than Illinois, Connecticut, New York, or Maryland. But for some reason, the population and its concentration in the Sun Corridor from north of Phoenix to Tucson, hasn't resulted in the same degree of wealth that has occurred elsewhere in the West. It would be useful to figure out what Arizona is doing wrong.
People who spend too much time with me know that I have a peculiar fixation with the idea of separating the US into two parts. There are lots of proposals kicking around the blogosphere about red/blue splits. Mine is quite different, a simple east/west division based on several energy considerations and the ongoing depopulation of the Great Plains. My definition of "West" is the 11 contiguous states from the Rocky Mountains to the Pacific coast; among other common features, these are the states with very large federal land holdings; and Alaska and Hawaii are such peculiar cases that I choose to ignore them. One of the things that I hear regularly is that the West couldn't stand on its own, and one of the reasons is that those states are subsidized by the more heavily populated East.
The same Tax Foundation figures that get used for red/blue comparisons would seem to be a reasonable place to start. The tax burden and expenditure figures from report #139 are reproduced in the following table. The tax burden figures do not include the adjustments the Foundation made to account for the federal deficit; the details of that adjustment are not included in the report, and are probably not important to the conclusions I'm going to draw. Let me begin with the last row of the table. For the US as a whole, the per-capita federal tax burden is $6,369, and the per-capita federal expenditures are $7,311. Taxes covered about 87% of the expenditures.
The main part of the table shows the same calculation for the 11 western states. The portion of state-specific expenses covered by state-specific taxes ranges from 114% in Nevada to 46% in New Mexico. Three states -- California, Colorado, and Nevada -- are net donors, the other are net recipients. [Note that when the Tax Foundation does its adjustment for the federal deficit, Oregon and Washington also become donor states.] The last two columns use the state populations (from Wikipedia, for July 2010) to convert the fractions of the expenditures covered to weighted figures, then sums those to get the fraction covered for the western states as a group: 97%. In short, federal taxes in western states cover a significantly larger portion of the federal expenditures in those states than are covered when the country is considered as a whole. The immediate corollaries are that the non-western states must be doing a worse job of covering their regional expenditures, and that if the "blue states subsidize red ones" argument is true, there is a corresponding "western states subsidize non-western states".
Granted, the skewed populations of the western states means that California is covering most of the western subsidies. That doesn't bother me; any "Western States of America" would clearly be dominated by California, or perhaps by two Californias since a political reorganization would give the north and south portions of the state the opportunity to separate, an idea that Californians seem to bring up regularly. More importantly, though, is that five of the eleven states do better than the national average, and those states illustrate a point that the red/blue state comparisons often miss: it's really an urban/rural thing. California is tied with New Jersey as the "least rural" states in the country, using the Census Bureau definition. All five of the western states that are better than average have economies that are dominated by their urban areas: Colorado's Front Range, Washington's Puget Sound, and so forth. The West would appear to do better than the rest of the country because, despite popular perceptions, it is on average less rural than the non-West.
There is one glaring exception to the "urban equals wealth" argument among these western states: Arizona. Arizona is in the top three western states by population, and is in the top ten nationally for non-rural: less rural than Illinois, Connecticut, New York, or Maryland. But for some reason, the population and its concentration in the Sun Corridor from north of Phoenix to Tucson, hasn't resulted in the same degree of wealth that has occurred elsewhere in the West. It would be useful to figure out what Arizona is doing wrong.
Friday, August 26, 2011
Has Business Bailed on the Social Contract?
Kevin drum has a post this week enumerating what he sees as the list of reasons that have been put forward regarding the difficulties in getting the economy to recover from its current problems. I want to write about the combination of two of them:
Since the end of WWII, the US has had an informal social contract, a major feature of which is that in exchange for low regulation and tax rates (relative to the rest of the developed world), business would provide everyone who wanted a job with one that paid an at least marginally living wage (including benefits). Government actions that enforced this contract included pro-union regulations and enforcement, minimum wages, and so forth. Business wasn't particularly happy about the situation, but there wasn't much they could do about it either.
Beginning by the mid-1980s, it became increasingly possible for business to "do something about it." Two of the primary factors were automation made possible by ever-cheaper and ever-more-powerful computer hardware and software, and relaxed rules about capital mobility. Recessions, by idling some of the productive capacity, were the ideal time to relocate and automate. "Relocate" could be indirect -- if you make layoffs at plants in both Michigan and Alabama, but later bring only Alabama back up to full output, you've "relocated". With relaxed rules on capital flows, sites for new factories included Mexico and China. Some argue that illegal immigration was another way for business to get around the social contract, but I'm not convinced it is as important as the other two factors.
One of the results has increasingly been "jobless" recoveries following recessions. If you look at graphs of job losses and recoveries for recessions since WWII, there is a pronounced break in the shape of the curves for the three post 1981-2 recessions. Calculated Risk provides a nice version of just such a chart on a monthly basis. Particularly given the depth of the last (current?) recession, it is not surprising that the curve looks like it may take a decade for employment to reach the pre-recession level. Current proposals for "fixing" the jobs problem will likely fail because they don't address the lapse of the social contract.
The strong form of number (2) in Drum's list is that there are a significant number of people who want jobs but are worthless from the perspective of an employer. Item (1) has contributed to that situation -- we are not creating new places in the economy with a large demand for workers. In addition, the primary innovation of the second half of the 20th century -- cheap processing power and software -- has allowed for the automation of a large number of jobs. And it certainly appears that business is not being held to the social contract. The combination is, well, scary.
Substantial adjustments to the social contract have a tendency to be messy affairs. Consider the French Revolution of the 1790s, the Russian Revolution in 1917, or the transition of the US economy from one based large on agriculture to one heavily into manufacturing over the period of about 1890 to 1930.
- The Tyler Cowen "Great Stagnation" hypothesis. We've picked through all the low-hanging economic fruit over the past century, and like it or not, we're now entering an extended period of low productivity growth because we're not inventing lots of cool new stuff.
- Various structural explanations that suggest the United States has an increasing number of workers who flatly don't have the skills to do anything useful in the modern economy — a problem that was temporarily masked by the housing bubble and was only fully exposed when the economy collapsed. This takes various forms, both weak (workers can be retrained but it will take a while) and strong (forget it, they're simply useless).
Since the end of WWII, the US has had an informal social contract, a major feature of which is that in exchange for low regulation and tax rates (relative to the rest of the developed world), business would provide everyone who wanted a job with one that paid an at least marginally living wage (including benefits). Government actions that enforced this contract included pro-union regulations and enforcement, minimum wages, and so forth. Business wasn't particularly happy about the situation, but there wasn't much they could do about it either.
Beginning by the mid-1980s, it became increasingly possible for business to "do something about it." Two of the primary factors were automation made possible by ever-cheaper and ever-more-powerful computer hardware and software, and relaxed rules about capital mobility. Recessions, by idling some of the productive capacity, were the ideal time to relocate and automate. "Relocate" could be indirect -- if you make layoffs at plants in both Michigan and Alabama, but later bring only Alabama back up to full output, you've "relocated". With relaxed rules on capital flows, sites for new factories included Mexico and China. Some argue that illegal immigration was another way for business to get around the social contract, but I'm not convinced it is as important as the other two factors.
One of the results has increasingly been "jobless" recoveries following recessions. If you look at graphs of job losses and recoveries for recessions since WWII, there is a pronounced break in the shape of the curves for the three post 1981-2 recessions. Calculated Risk provides a nice version of just such a chart on a monthly basis. Particularly given the depth of the last (current?) recession, it is not surprising that the curve looks like it may take a decade for employment to reach the pre-recession level. Current proposals for "fixing" the jobs problem will likely fail because they don't address the lapse of the social contract.
The strong form of number (2) in Drum's list is that there are a significant number of people who want jobs but are worthless from the perspective of an employer. Item (1) has contributed to that situation -- we are not creating new places in the economy with a large demand for workers. In addition, the primary innovation of the second half of the 20th century -- cheap processing power and software -- has allowed for the automation of a large number of jobs. And it certainly appears that business is not being held to the social contract. The combination is, well, scary.
Substantial adjustments to the social contract have a tendency to be messy affairs. Consider the French Revolution of the 1790s, the Russian Revolution in 1917, or the transition of the US economy from one based large on agriculture to one heavily into manufacturing over the period of about 1890 to 1930.
Tuesday, July 19, 2011
An Example of Future Grid Problems?
The New York Times ran a story this week about the possible consequences of shutting down the Indian Point nuclear power station. Last month, Gov. Cuomo said he would insist that the two Indian Point reactors be shut down in 2013 and 2015, when their original 40-year licenses expire. His decision to oppose license extensions may be reasonable; there have been a number of problems with aging reactors as they approach the end of their original license lifetimes, or after those licenses have been renewed. The Vermont Yankee facility and New Jersey's Salem station have, for example, been plagued by tritium leakage as they age.
The Governor asserts that some combination of new generators and new transmission facilities can be in place by the summer of 2016, the first peak power season after both reactors would be shut down. Various experts have weighed in, pointing out that the permitting, lawsuits, and construction for a new generator or transmission line invariably take more than five years in New York. An example is the New York Regional Interconnect (NYRI), a proposed transmission line that would have brought power from upstate New York to the New York City and Long Island region served by the Indian Point plant. After several years of planning, the NYRI was put on hold indefinitely in 2009 because of opposition by people in the areas through which it would have run.
Almost one-fifth of the entire US population lives in BosWash -- the strip from the Boston suburbs on the north to the Washington, DC suburbs on the south and within 100 miles or so of the Atlantic (see the map below). In the future, that strip is very likely to resemble New York City's current situation. About 25% of the electrical power is generated by aging nuclear plants. As pressure to shut those down grows, planners will be left to the same "combination of new generators and new transmission facilities" to replace the nuclear power (and under current plans, meet steadily increasing demand).
It seems unlikely that new coal plants will be built in that strip. If for no other reason, burning coal produces large amounts of ash that must be gotten rid of. Disposal of solid waste within the region is already a growing problem. New York City, much of whose solid waste ends up in Pennsylvania, Ohio, and Virginia, is the most extreme example of that particular difficulty. Gas-fired generation would require importing large volumes of natural gas. Perhaps shale gas will allow the East Coast to produce sufficient amounts of gas for that purpose; I'll believe it when I see it. The alternative sources of gas are far away, and will require either gasification facilities for liquefied natural gas, or large long pipelines. The last option is to produce the electricity outside the region and import it over large new transmission facilities.
If the US must shift to renewable sources for its electricity, those transmission facilities will be large indeed. Hydro power from Montreal, wind power from the Great Plains, solar power from the desert Southwest. Huge facilities, carrying power long distances, running through areas where people seem likely to oppose the construction. In short, the same basic problem that New York City and Long Island face today, only on a much larger scale. The utilities that serve NYC and LI are warning that unless everything goes nearly perfectly, the city and the Island will be subjected to rolling summertime blackouts once the Indian Point reactors are shut down. Over a somewhat longer time scale, it would appear that the BosWash corridor would be much the same: unless everything goes nearly perfectly, about 60 million people would be subjected to rolling blackouts.
Keep your eye on New York; it's likely to be a predictor for the future of much of the East Coast.
The Governor asserts that some combination of new generators and new transmission facilities can be in place by the summer of 2016, the first peak power season after both reactors would be shut down. Various experts have weighed in, pointing out that the permitting, lawsuits, and construction for a new generator or transmission line invariably take more than five years in New York. An example is the New York Regional Interconnect (NYRI), a proposed transmission line that would have brought power from upstate New York to the New York City and Long Island region served by the Indian Point plant. After several years of planning, the NYRI was put on hold indefinitely in 2009 because of opposition by people in the areas through which it would have run.
Almost one-fifth of the entire US population lives in BosWash -- the strip from the Boston suburbs on the north to the Washington, DC suburbs on the south and within 100 miles or so of the Atlantic (see the map below). In the future, that strip is very likely to resemble New York City's current situation. About 25% of the electrical power is generated by aging nuclear plants. As pressure to shut those down grows, planners will be left to the same "combination of new generators and new transmission facilities" to replace the nuclear power (and under current plans, meet steadily increasing demand).
It seems unlikely that new coal plants will be built in that strip. If for no other reason, burning coal produces large amounts of ash that must be gotten rid of. Disposal of solid waste within the region is already a growing problem. New York City, much of whose solid waste ends up in Pennsylvania, Ohio, and Virginia, is the most extreme example of that particular difficulty. Gas-fired generation would require importing large volumes of natural gas. Perhaps shale gas will allow the East Coast to produce sufficient amounts of gas for that purpose; I'll believe it when I see it. The alternative sources of gas are far away, and will require either gasification facilities for liquefied natural gas, or large long pipelines. The last option is to produce the electricity outside the region and import it over large new transmission facilities.
If the US must shift to renewable sources for its electricity, those transmission facilities will be large indeed. Hydro power from Montreal, wind power from the Great Plains, solar power from the desert Southwest. Huge facilities, carrying power long distances, running through areas where people seem likely to oppose the construction. In short, the same basic problem that New York City and Long Island face today, only on a much larger scale. The utilities that serve NYC and LI are warning that unless everything goes nearly perfectly, the city and the Island will be subjected to rolling summertime blackouts once the Indian Point reactors are shut down. Over a somewhat longer time scale, it would appear that the BosWash corridor would be much the same: unless everything goes nearly perfectly, about 60 million people would be subjected to rolling blackouts.
Keep your eye on New York; it's likely to be a predictor for the future of much of the East Coast.
Friday, June 10, 2011
Sarah Palin's e-mail
Today is the day that the State of Alaska is releasing the e-mail messages from Sarah Palin's tenure as Governor. News organizations that have requested a copy have to send someone to Juneau to pick up the paper copy, some 24,000 pages in total. Geekdom in general is outraged. Paper? Travel to Juneau? Why can't anyone who wants to just download the file? Defenders of the action have pointed to limited bandwidth, the cost of server capacity, and so forth. I think the reason is completely non-technical.
I spent three years on the permanent legislative staff for the General Assembly of Colorado. Part of that job was interpreting what a variety of state laws actually meant in practice. So my initial response was to pull up a copy of Alaska's open records law to see what it said. Here's the first paragraph:
Is a file downloaded over the internet certified? Almost certainly not. Consider the site where I obtained the copy of the open records statute. Not only was it not certified, but there were multiple statements to the effect that, despite their best efforts, there was the possibility that the copy was inaccurate. The Alaskan state agency doesn't appear to have that choice -- they can only distribute copies whose accuracy they certify.
How about a write-once CD? A better chance there. At least it's a physical medium and can have a physical sticker (or whatever) on it. There's still a potential problem in that the CD contains thousands of individual documents (e-mail messages). Can a single certification cover all of them? Someone in Alaska has probably decided that question. I don't know the answer, but I would guess that each "document" has to be certified, at least in a "page n of m" sense. Internal to the agency, I would worry about control of the process, though. The CD is a copy of one (or thousands) of computer files. How secure was the process that accumulated the files so that a master CD could be created?
Which pretty much leaves paper. The sheer unwieldiness of the medium makes it easier to lock down the process by which the certified copy is created. Multiple people involved in changes. Locked doors. If need be, numbers added in blue ink by hand. Far from the ideal solution -- and I expect that there are a number of people inside the Governor's Office that are saying "This is so stupid!" -- but known to keep you within the requirements of the statute.
Napoleon is reputed to have said "Never ascribe to malice that which is adequately explained by incompetence." IT progresses so rapidly that it is impossible for the law to keep up. Never ascribe to malice or incompetence that which is adequately explained by statute.
I spent three years on the permanent legislative staff for the General Assembly of Colorado. Part of that job was interpreting what a variety of state laws actually meant in practice. So my initial response was to pull up a copy of Alaska's open records law to see what it said. Here's the first paragraph:
Unless specifically provided otherwise, the public records of all public agencies are open to inspection by the public under reasonable rules during regular office hours. The public officer having the custody of public records shall give on request and payment of the fee established under this section or AS 40.25.115 a certified copy of the public record."Open to inspection" usually means that you can look at a paper copy. In most states, agencies are not required -- or even allowed -- to give the public access to their file cabinets, microfiche readers, or computers. "During regular office hours" usually means that the requester has to come to the agency in order to perform that inspection. But the real kicker is that phrase "shall give... a certified copy". As a general rule, the word "shall" means that it's a requirement: any copy that leaves the agency premises must be certified. And certified, while less demanding than notarized, generally means some identifiable mark added to the copy that indicates someone at the agency says the copy is accurate.
Is a file downloaded over the internet certified? Almost certainly not. Consider the site where I obtained the copy of the open records statute. Not only was it not certified, but there were multiple statements to the effect that, despite their best efforts, there was the possibility that the copy was inaccurate. The Alaskan state agency doesn't appear to have that choice -- they can only distribute copies whose accuracy they certify.
How about a write-once CD? A better chance there. At least it's a physical medium and can have a physical sticker (or whatever) on it. There's still a potential problem in that the CD contains thousands of individual documents (e-mail messages). Can a single certification cover all of them? Someone in Alaska has probably decided that question. I don't know the answer, but I would guess that each "document" has to be certified, at least in a "page n of m" sense. Internal to the agency, I would worry about control of the process, though. The CD is a copy of one (or thousands) of computer files. How secure was the process that accumulated the files so that a master CD could be created?
Which pretty much leaves paper. The sheer unwieldiness of the medium makes it easier to lock down the process by which the certified copy is created. Multiple people involved in changes. Locked doors. If need be, numbers added in blue ink by hand. Far from the ideal solution -- and I expect that there are a number of people inside the Governor's Office that are saying "This is so stupid!" -- but known to keep you within the requirements of the statute.
Napoleon is reputed to have said "Never ascribe to malice that which is adequately explained by incompetence." IT progresses so rapidly that it is impossible for the law to keep up. Never ascribe to malice or incompetence that which is adequately explained by statute.
Tuesday, June 7, 2011
Can dishonest manufacturing ruin a sport?
There have been numerous reports of Chinese export products that are flawed in ways that are dangerous. Many involve low-end inexpensive goods -- cadmium in cheap children's jewelry, contaminated materials in dry wall boards, etc. This post is about a small but relatively expensive product line that, at least potentially, affects me more directly. It relates to public policy in the sense that international sporting bodies make international policy.
I'm a sport fencer. Epee, if it matters, as I don't care for the right-of-way and limited-target rules that foil and sabre have, but that's a subject for a different day. Fencers have to put a lot of trust into their safety equipment. Most of the standards for equipment were significantly upgraded after the "Smirnov incident": Vladimir Smirnov, a Russian fencer, died from an injury he received during the 1982 World Championships. The standards are set by the Fédération Internationale d'Escrime (FIE). They're not rich enough to test on a continuous basis, so an honor system is used. A manufacturer submits samples for testing, along with a check to cover the testing costs. If the samples pass, then the vendor can mark the equipment as conforming so long as they do not change their process or materials. If such changes occur, the vendor will have to submit new samples (and another check).
Many elite fencers use protective masks that have a plastic visor in place of a portion of the traditional wire mesh. The visor allows for better visibility than the wire mesh. In addition, the International Olympic Committee (IOC) at one point threatened to drop fencing events (fencing has been in every modern Olympics from the beginning) because the wire-mesh masks rendered the competitors anonymous to the crowds. There are a number of material and manufacturing standards to which a visor mask must conform. In November 2009, at the Junior World Championship, a visor failed catastrophically. In February 2010, the FIE took the extraordinary step of banning visor masks in FIE-sanctioned foil and epee competitions. Most national fencing bodies followed suit. A picture of the mask with the broken visor is shown here.
The mask was branded by Uhlmann, a prestigious German firm. Some years back, Uhlmann outsourced much of their manufacturing to China. A forensic engineering analysis of the failed mask uncovered a number of disturbing things:
You have to believe that Uhlmann was as surprised by this as anyone. As I said, their brand name is prestigious, and they charge high prices. I suspect that the CEO of the Chinese manufacturing company would be surprised: suitably high quality products built at lower cost is how he/she grows the business. But what do you do if you're the FIE? Give up on trying to provide qualified equipment entirely? Or ban equipment manufactured in certain countries? Neither one is likely to be palatable to the IOC, who asserts that they foster international cooperation and athlete safety. Can dishonest equipment manufacturing threaten to cost a sport it's Olympic status?
I'm a sport fencer. Epee, if it matters, as I don't care for the right-of-way and limited-target rules that foil and sabre have, but that's a subject for a different day. Fencers have to put a lot of trust into their safety equipment. Most of the standards for equipment were significantly upgraded after the "Smirnov incident": Vladimir Smirnov, a Russian fencer, died from an injury he received during the 1982 World Championships. The standards are set by the Fédération Internationale d'Escrime (FIE). They're not rich enough to test on a continuous basis, so an honor system is used. A manufacturer submits samples for testing, along with a check to cover the testing costs. If the samples pass, then the vendor can mark the equipment as conforming so long as they do not change their process or materials. If such changes occur, the vendor will have to submit new samples (and another check).
Many elite fencers use protective masks that have a plastic visor in place of a portion of the traditional wire mesh. The visor allows for better visibility than the wire mesh. In addition, the International Olympic Committee (IOC) at one point threatened to drop fencing events (fencing has been in every modern Olympics from the beginning) because the wire-mesh masks rendered the competitors anonymous to the crowds. There are a number of material and manufacturing standards to which a visor mask must conform. In November 2009, at the Junior World Championship, a visor failed catastrophically. In February 2010, the FIE took the extraordinary step of banning visor masks in FIE-sanctioned foil and epee competitions. Most national fencing bodies followed suit. A picture of the mask with the broken visor is shown here.
The mask was branded by Uhlmann, a prestigious German firm. Some years back, Uhlmann outsourced much of their manufacturing to China. A forensic engineering analysis of the failed mask uncovered a number of disturbing things:
- The FIE requires a particular brand of polycarbonate (Lexan) with known properties for the visor. The failed visor was made of an unknown non-Lexan material, with improper brand coding -- that is, forged markings.
- Visors are required to be shaped using draping, a process which minimizes stress build-up. The failed visor had been injection molded, which is a lot cheaper, but creates areas of high stress which are subject to breaking.
- There are standards for the accuracy of the fit between the visor and the metal mounting, in order to avoid placing unnecessary stress on the polycarbonate; the mask with the failed visor did not come close to meeting these standards.
You have to believe that Uhlmann was as surprised by this as anyone. As I said, their brand name is prestigious, and they charge high prices. I suspect that the CEO of the Chinese manufacturing company would be surprised: suitably high quality products built at lower cost is how he/she grows the business. But what do you do if you're the FIE? Give up on trying to provide qualified equipment entirely? Or ban equipment manufactured in certain countries? Neither one is likely to be palatable to the IOC, who asserts that they foster international cooperation and athlete safety. Can dishonest equipment manufacturing threaten to cost a sport it's Olympic status?
Tuesday, May 31, 2011
Stealth entitlement reform
Rep. Ryan's budget proposal called for changes in the fundamental nature of both Medicare and Medicaid. Since that time, the Republicans have been getting an earful from a lot of writers in the media, and from voters, about the proposed Medicare changes. Must less has been written about Medicaid, even though it appears that we are approaching a "perfect storm" situation that may make conversion of Medicaid from an entitlement to a block grant program a much easier fight.
Medicaid is a slow-motion budget disaster for the states. Almost all states have reached the political limits on their tax rates, and Medicaid expenses are growing faster than their economies and revenues. As a result, Medicaid spending has begun to crowd out spending on state programs with a longer history: depending on the state, all of roads, K-12 education, and higher education have taken larger percentage hits than Medicaid. The recession accelerated the problem, but did not cause it; the train wreck has been relatively clear in the numbers since at least the mid-1990s.
Two recent developments are in the process of locking the states into this disaster mode. First, the federal Affordable Care Act blocked states from tightening their eligibility standards. From the perspective of the Democrats at a national level, this is a feature and not a bug: much of the expansion of insurance coverage provided by the ACA is due to increased Medicaid eligibility, some of which is threatened if states tighten things up. Second, the Medicaid statute puts a floor under the coverage (that is, which things must be covered), and includes language that puts an implicit floor under provider reimbursements. Beneficiaries and providers are currently attempting to sue over state violations of that reimbursement floor; the NYTimes published a piece last Saturday that summarizes the current status.
The floor on spending, the rate of growth of that floor, and the practical limits on states' ability to raise revenue puts the states in a very difficult position. Extended into the not-to-distant future, the numbers suggest states could be in a position where they are literally having to choose whether to continue with Medicaid or to completely drop their support of, for example, higher education. It seems possible that at least some will choose to withdraw from Medicaid instead of dropping those other programs, despite the consequences.
It appears that it may be possible to put together a coalition of interests that could pass a Medicaid reform package. Converting the program to a block grant program would, in particular, allow a number of parties to claim victory. In particular:
Medicaid is a slow-motion budget disaster for the states. Almost all states have reached the political limits on their tax rates, and Medicaid expenses are growing faster than their economies and revenues. As a result, Medicaid spending has begun to crowd out spending on state programs with a longer history: depending on the state, all of roads, K-12 education, and higher education have taken larger percentage hits than Medicaid. The recession accelerated the problem, but did not cause it; the train wreck has been relatively clear in the numbers since at least the mid-1990s.
Two recent developments are in the process of locking the states into this disaster mode. First, the federal Affordable Care Act blocked states from tightening their eligibility standards. From the perspective of the Democrats at a national level, this is a feature and not a bug: much of the expansion of insurance coverage provided by the ACA is due to increased Medicaid eligibility, some of which is threatened if states tighten things up. Second, the Medicaid statute puts a floor under the coverage (that is, which things must be covered), and includes language that puts an implicit floor under provider reimbursements. Beneficiaries and providers are currently attempting to sue over state violations of that reimbursement floor; the NYTimes published a piece last Saturday that summarizes the current status.
The floor on spending, the rate of growth of that floor, and the practical limits on states' ability to raise revenue puts the states in a very difficult position. Extended into the not-to-distant future, the numbers suggest states could be in a position where they are literally having to choose whether to continue with Medicaid or to completely drop their support of, for example, higher education. It seems possible that at least some will choose to withdraw from Medicaid instead of dropping those other programs, despite the consequences.
It appears that it may be possible to put together a coalition of interests that could pass a Medicaid reform package. Converting the program to a block grant program would, in particular, allow a number of parties to claim victory. In particular:
- Congressional Republicans could claim a victory on entitlement reform
- Senate Democrats from conservative states could claim -- assuming that required state maintenance of effort spending is less than current spending, which seems likely -- to have relieved some of the pressure on state budgets
- States would be freer to explore alternative approaches for delivering health care to the poor
- The Obama administration could claim delivery of "bipartisan" legislation
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