Once the changeover happens, the new URL will be http://uncommon-sense-blog.com

Before addressing this claim, let's take a quick look at an economic principal known as "Sunk Cost". A sunk cost is any resource that has been spent in such a way as to no longer be recoverable. As an example, imagine buying software for $5M to pursue an opportunity that you believe you can make $10M from. After buying the software, you determine that customization and deployment costs will run an additional $12M. Should you roll the software out? The answer is "no". The additional cost of doing so does not justify the potential return. The fact that you've already spent $5M is irrelevant to the discussion - whether it was $5 or $5M, moving forward with the project will always be a money losing proposition. On the other hand, if deployment costs were to be $7M, the answer would be "yes", as the incremental costs (that is to say, specifically the future costs resulting from the decision being considered) will be less than the future profits, even though overall it's still a money-losing venture - the important point is that the decision currently being made (to deploy or not to deploy) has a favorable outcome for proceeding.

A more everyday example can be found in fast-food drive-throughs across the country. You order a sandwich and fries, and drive off. When you arrive, you notice that the fries are missing. From an economic standpoint, the fries are a "sunk cost" - even if they would give you a free order of fries if you drive back, doing so is not justified if the cost of gas (and the value of your time) to go back to the restaurant is higher than the value of the fries.

The general principal is this: when evaluating a proposed action, one must consider only incremental costs - basing decisions on money already spent amounts to basing future mistakes on past mistakes. Or, as a common expression says "throwing good money after bad". It is, of course, a natural emotional reaction to base a decision on such sunk costs - "I've already spent X on this whatsit, if I just spend however much more, I can....." or "that cost me X, if I dont do Y, that money will be lost". It is only upon accepting that such money is already lost that a rational decision can be made.

It is no different, although vastly more heart wrenching, when the cost is measured in human lives. But just as with a financial cost, it is imperative to step back and ask the question - ignoring what has already been paid, do we expect the benefit to remaining in Iraq
to justify the future cost that we will pay if we stay? This is, of course, a highly complex question, but it is the one that we must address without allowing ourselves to be distracted by what's already in the past.

Oh, I get it. The concerts weren't about actually about providing a solution to climate change, but were only to raise awareness. Given the environmental damage the concerts caused, it strikes me that's akin to a mass murderous rampage committed to raise awareness of violent crime. I have to hand it to the organizers, however. Why bother debating various points of climate science on their merits? After all, that's sooooo boring compared to lighting one up and listening to the likes of Snoop Dog.

While I did not attend, I'm sure the concerts were a great time - the artist list was absolutely full of top-notch acts. And that's exactly what I find intellectually objectionable about the entire event. For the concertgoers (and those who watched the broadcasts on TV or listened on the radio), the message is one of fun - enjoying a great concert. But if we follow the prescriptions of those urging drastic action to combat climate change, the result will be just the opposite - deprivation, a soft economy, high unemployment, and financial hardship - no fun whatsoever, both here and especially in the parts of the developing world counting on money from the already developed world to lift themselves out of poverty. But if people actually knew the consquences of the global warming crowd's policies, they'd hardly get behind them, would they? Might as well have a nice concert instead.

1. The federal government grants itself the ability to regulate state university prices through differential grant disbursements.

2. Loan recipients who do not make a certain minimum income would not need to repay their loans, or would need to repay only a portion of the full loan amount.

3. The government will forgive a portion of the loans of those who go into a field that the government has determined is "special"

While these all may seem at first glance to be reasonable measures, a closer look shows that in each case, they're at best pointless and at worst, economically damaging. Let's look at each in turn.

When it comes to university prices, what the government is attempting to regulate is not price per se, but rather price increases. A university that is already overcharging is granted free license to keep overcharging. Those that are undercharging, however, run the risk of losing out on the free money if they attempt to come up to a market price. What's worse is that, for education just as for anything else, there is no such thing as a single "market price", but rather, price is a function of quality. And that's where the problem lies. Those universities that are cheap due to being underperformers are now in a situation where they're strongly disincented from improving themselves if such improvement involves any amount of cost. Do we really want the government involved in suppressing quality of education?

The notion of loan forgiveness/partial payment based on future income is also somewhat pernicious. A person's salary, generally speaking, is based on the amount of value they provide to whoever is paying that salary (better said, in a market free from labor unions or other coercive influences, a person's salary is never higher than the value they provide). That is to say, salary corresponds to the economic output of the person earning the salary. And from the government's perspective, the taxes that person pays are also based on that salary. From an individual perspective as well as from a societal perspective, we should want to encourage students to pursue fields of study with high economic output. But this bill does just the opposite - it encourages, through loan forgiveness, students to pursue fields of study with low economic output. Why not study 17th century German literature? It's not like you're going to have to pay for the education the way you would had you studied, say, business management or computer science. Yes, there will always be people who make bad educational choices, and it is a tragedy to be saddled at the end of college with a stack of loans and scant disposable income to pay them back. But it's even more of a tragedy to be using the student loan system to be encouraging students to go into such fields in the first place.

Finally, the marketplace already has a mechanism for handling a dearth of workers compared to demand - the same mechanism it has for dealing with any shortage of supply - higher prices (salaries, in this case). Instead, however, congress wants your federal tax dollars to be used to prevent private companies and state or local governments from having to offer market rates. Unfortunately, this approach is sure to backfire. If salaries went up for these in-demand fields, more people would move to them in two ways. First, through the educational system (and with their higher salaries would have no issue repaying the loans they would need), and second, by incenting those with the existing skills who have left the field for higher pay elsewhere to come back. Loan forgiveness, however, offers little hope for success. Yes, there will very likely be a slightly increased number of students pursing the government-favored fields. Rationally so, as the loan forgiveness amounts to free money for the recipient (it's not a lot of money, however, so it's not likely to have a dramatic impact). The problem is that there is no incentive for people receiving this loan forgiveness to stay in their field. Once they've obtained the maximum benefit or simply have enough work experience to get a higher paying job elsewhere, what motivation do they have to stay?

In baseball, it's three strikes and you're out. In congress, however, appearances often count for more than results. Even when it comes to education.

Sadly, they seem to be in a situation where such tactics can't lose. The war is tremendously unpopular, and so long as they keep trotting the issue out in front of the media every few weeks, they never have to do anything about it - they get all the benefits of being against an unpopular war without taking any risk of having to actually take action to stop it.

One can only hope that the voters can see through such a sham and ask the one question that the Democrats are pointedly not answering (in fairness, a sympathetic media is hardly pressing them on it) - what are the consequences of what you are proposing? It's all well and good to be opposed to the war based on what's happened in the past - the cost, the casualties, and the meagre progress they've bought. But in 2007 we're not voting on whether we should go to war - that happened in 2002, with broad support from Republicans and Democrats alike. What we should be asking is, if we pull out now, are we going to be better or worse off for doing so? Bush's stance on the issue is clear. But where do the Democrats stand? Reid's position appears to be that the war is already lost, and therefore there's no point in staying. But that is backwards-looking. Regardless of whether we've "won" or "lost" according to some arbitrary measure, is our current presence there an aid or a hindrance to the establishment of a peaceful Iraq?

The Iraqi goverment clearly believes that a pullout would hurt their country, and Iraqi officials have attempted to convey this message to Congress. Their message appears to have fallen on deaf ears on the Democratic side of the aisle. And so, Iraq's Prime Minister recently attempted to take his case directly to the American people, an unusual move presumably made necessary by the Iraqi perception that the majority party in congress is looking to throw their country to the wolves for political gain.

Those who support continued involvement in Iraq, whether right or wrong, offer a vision of the future that is, at least potentially, achievable (and there is certainly room for debate on how best to succeed in the continued-involvement scenario). Namely by US forces, which presently are by far the largest force for stability in that country, "buying time" for the Iraqis to build up their own defense capabilities and at the same time, build up their democratic institutions. And those things are happening, albeit at a snail's pace. Those who support pullout, however, offer no competing vision. What happens when the stabilizing force pulls out? Civil war? Terrorist training camps and safe havens? Countless civilan murders in religous and ethnic cleansing operations? Probably all of the above - one need only look at the consequences of our Vietnam withdrawal to find a historical parallel - and the Vietnamese had no overarching religious imperative to massacre all those who disagreed with them. This is the question we need to be asking - "where are we going?", not just "where are we coming from?".

An article from Michelle Malkin looks at the plight of the legal immigrant – the long wait for processing, hoping for acceptance.

There are millions of people around the world who want to come here to build a better life for themselves, and at the same time would be helping build our economy. So many, that we have the luxury of selectivity. For whatever perverse reason, however, those in congress attempted to renounce that ability in favor of granting preferential treatment to a group of people over which we've had no oversight as to what the benefit (or detriment) to America might be.

Some will try to argue that we're better off sealing our borders entirely – that the best immigration is no immigration. But that ignores our economic reality. On one hand, we are simply not producing enough scientists, engineers, and technology workers. And even worse, those that we do are no longer necessarily the best in the world. At the same time, we face impending bankrupcy in medicare and social security – the political climate does not permit benefit cuts, and the level of taxation required to continue to meet those benefits will be crippling to our economy in the not too distant future.

By aggressively pursuing a pro-immigration policy, however, we can address, or at least ameliorate, both of these issues. But to do so means taking an uncommonly sensible approach to immigration. Real immigration reform means doing three things. First, we need to strongly emphasize skills-based over family-based immigration. Second, we need to substantially increase the quotas for the number of immigrants we allow in each year. And third, we need to improve the system to handle applications expeditiously – long waits and the uncertainty they bring benefit no one.

All of these can be tackled completely independently of the illegal immigration issue. Which almost certainly means they won't be addressed, as neither party is likely to see the political gain in doing so.

Regardless of whether going to war was right or wrong, clearly a mistake was made on at least one basis for how it was justified. Be it a man or a nation, it is human to make mistakes. What do we learn from this one? Take the time to do the research. I do not deny that there are threats that require immediate action, but taking precipitous and costly immediate action to answer a potential long-term threat is simply the wrong approach.

At least, that's what a sensible person would learn from our WMD mistake. As a society, however, we seem to be drawing the opposite conclusion. Let's take a look at global warming. The evidence seems fairly strong that man is contributing, to some measure at least, to global warming. However, the science is by no means resolved - only George Tenet might consider it a slam dunk. Even if one were to accept human action as the cause of climate change, there is far from a consensus as to what the actual long-term climatic effect will be, and still less agreement as to what the human impact would be as a result of such warming, with some studies actually indicating a net benefit. And yet, the very same people who (correctly) urged patience and research on WMDs are urging us, without putting in the time and effort required to be certain of the underlying facts, to embark on an immediate course of action to combat global warming that will cost trillions - see for instance this net present value analysis.

Take the time. Be certain of the science before embarking on a course of action that will cost so much money and so many lives. And yes, make no mistake that it will cost lives - as the high cost of reducing CO2 emissions will be money unavailable for other activities such as medical research and food and medical assistance to underdeveloped countries around the world. The decline in economic output itself would hinder the natural spread of wealth around the world which has done far more to lift people out of poverty than any government program could. With that wealth has come higher life expectancies due to better nutrition, medical care, and electricity to billions in many formerly impoverished countries. Should we deny those things to those people around the world who have yet to benefit from the increasingly global economy in the name of taking rash action on global warming?

The cost of taking the time to do further research is low, while the cost of rash action could be extremely high. Have we learned nothing from our WMD mistake?

In 2003, however, Texas took action, passing an amendment known as "Proposition 12", medical malpractice tort reform. Malpractice suits can still be filed, and claimants (if they win) are entitled to full recovery of actual damages, but "non-economic damages" (pain and suffering and the like) are capped at $250K. Effectively, Proposition 12 made medical malpractice suits a redress for injury instead of a gold rush. That had some more immediate effects, and some that are still unfolding. First, the cost of insurance went down. That shouldn't have been too hard to predict. But by setting a cap on upper-limit risk, insurance companies started coming back to Texas. The increased competition helped to drive rates down further. TMLT rates, as of late 2006, had come down 26.5% off their peaks, with rates dropping as well at the other carriers. But there has been another consequence. With rates plunging instead of rising, doctors are coming back to Texas. In fact, the state now faces another "crisis" - so many doctors wanting to take up practice in Texas that the licensing board is overwhelmed with applications. Given the state of affairs just a few short years ago, that's a beautiful crisis to have.

Apparently at least one other state, Tennessee (as mentioned in this review of the topic from the San Antonio Express-News), is considering a similar approach. After all, it's hard to argue with success.

This blogger, however, takes a different view. Fundamentally, it appears that the seminar for which the original video (before the Programmers Guild edit) was created was motivated by a desire for businesses to reduce the cost of hiring technical employees. And the methods being advocated appear, at least to this non-lawyer, to be legal. The fuss, then, is not about any illegal activity, but rather a question both of ethics and economics – whether it is better that businesses have access to a lower-cost imported labor pool, or whether it is better that American workers earn a higher wage via labor-market protectionism.

But isn't it funny that such a question only seems to be asked when it's skilled workers whose jobs are in doubt? For unskilled workers, instead of members of congress writing letters challenging legal but ethically questioning behaviors, they're writing bills justifying illegal behaviors, specifically amnesty provisions for illegal immigrants. The underlying issue here is exactly the same – business's desire for low cost labor vs. workers desire for a higher wage. Apparently, when it comes to immigration law, those well-off can expect a different level of treatment than those at the bottom of socioeconomic ladder.

There's another lesson to be learned from this episode, driven home by the tactics of this law firm. Namely, that there is no such thing as a job an American won't do. There are, however, plenty of jobs that Americans won't do for a given price. And that's every bit as true for highly skilled workers as it is for low skilled workers. Something to think about the next time you hear rhetoric about illegal immigrants doing jobs that “Americans won't do”.

In retrospect it seems clear that there was never really any desire on the part of the democratic party to end the war. All they really wanted was a campaign issue to be able to keep trotting out in front of the voters, evidently believing those voters to be so gullible as to be swayed by rhetoric instead of results. To quote a "senior Democratic senator" as reported in various sources, "We want them (Republicans) to vote and vote and vote again. . . . They are going to have to vote on Iraq until they are sick of it." That's the heart of the Democratic plan. No intention to actually take meaningful action, simply to trot out votes from time to time to keep the rhetoric alive.

And really, why should they take action? That would require not just espousing an actual position, but actively defending it before the American people. Instead, the Democrats are betting that the American people are gullible enough that they're willing to buy empty rhetoric in 2008. Why not? It worked in 2006.

Take that together with a disgraceful handling of the immigration bill, sham votes of no-confidence on Alberto Gonzales, and sleazy ethics on earmarks, is it any wonder, then, that the congressional approval rating recently dropped to an all-time low?

So how does CAFE work? As the name (Corporate Average Fuel Efficiency) implies, it is based on an average of sold vehicles. If a manufacturer does come in under the standard, it will have to pay a fine, $5.50 per tenth of an MPG under per vehicle. That's not necessarily a lot of money, but it's enough for a manufacturer to take notice. For instance, GM, based on an annual sales of approximately 4M units per this article, would have to pay over $200M in fines if they were a full MPG under the standard.

For those not familiar with the history of CAFE standards, they first came into being in 1975, in reaction to the oil embargo of 1973. Average gas mileages at the time of the new law were, per this reference, under 13MPG. A decade later, they had doubled. But a funny thing happened along the way. Manufacturers realized that trucks were not covered by CAFE at all. And so the SUV gold rush was born. For instance, CFIF and Wiki both explain the demise of the station wagon and the corresponding rise of the SUV as a consequence of CAFE - manufacturers chose to phase out the mildly inefficient station wagons in favor of the horribly inefficient SUVs so as to avoid paying CAFE fines . It was only a few years ago that SUVs were subject to CAFE at all, and even then, at a much lower level than cars. A great example of hidden consequences. By making cars less appealing, consumers bought SUVs instead, negating any benefit that CAFE might otherwise have had.

This time around, the senate appears to have learned from its mistakes. SUVs and light trucks are included. So there won't be the same push for people to drive less efficient vehicles. But that doesn't mean there won't be hidden consequences. And one of those will not sit will with many Americans. Specifically, as a result of the last CAFE debacle, light trucks and SUVs have become much more prevalent. Especially so with American automakers - both Ford and GM derive close to 2/3 of their sales from SUVs, the major Japanese nameplates tend to be well under 50%, see e.g. http://www.usatoday.com/money/economy/2007-06-01-604157041_x.htm. That is, this change will disproportionately hurt the domestic auto industry, and the "Big Two" will face a horrific choice - either pay the fines (and also suffer the bad publicity that will go along with those fines), or cease manufacture of their profitable vehicles. The fines might be exorbitant - with the current SUV mix getting close to 35 is impossible, 30 might even be optimistic. And at 30 average MPG, GM is looking at $1B in fines at current sales rates. The alternative is no better. Ford and GM have labor costs so high they actually sell their cars at a loss per e.g. <a href="http://money.cnn.com/2007/01/26/news/companies/pluggedin_taylor_ford.fortune/index.htm">CNN</a>. Given those numbers, it's hard to see how they can survive without the SUVs

But that's not the worst. To meet the mandate, cars will have to get smaller and lighter. Quite possibly this will have an impact on highway safety, although to what degree is impossible to say at this point. Also, in all likelihood, it will make cars more expensive, as Popular Mechanics concludes. More hidden consequences. And note that none of them are good.

But the senate chooses willful blindness to these consequences in favor of touting the visible benfits. Er, wait a minute. What exactly are the visible benefits? With all the claims of this bill being historic, or how it's been a long time in coming, statements of what the problem is that they are trying to solve are conspicuously absent. If the purpose it to reduce dependence on foreign oil and/or greenhouse gas emissions, miles per gallon is a poor measure. What matters in those cases is total number of gallons consumed. Making cars more efficient reduces the cost of driving each mile, which is to say, provides a price encouragement to drive more miles than one otherwise might have. Worse, any benefit that we might see, either in pollution or on imports is going to be minimal in the short term, as only a small fraction of cars on the road are retired every year in favor of new vehicles. A better solution would be to raise gas taxes. Such a measure would have an immediate impact on consumption without the side effect of encouraging driving further. Naturally, if the goal is to lower prices, taxes would be counterproductive. But even in this case, CAFE is no particular help either, unless we're talking about price savings a decade out or more.

While appealing on the surface, it seems like this is just like most government "solutions". Minimal obvious benefits, serious hidden consequences. But what it does have going for it (from the polticians' perspectives anyway) is that most of those behind it will be out of office by the time the true impacts are felt.

And while it's not quite the same as feeling pain, fish, like people, can itch, and scratch themselves when they do (not with their fins, of course, but by rubbing their bodies against objects).

What should also be mentioned is that captive fish are, in a number of ways, better off than their wild relatives. Namely, when well taken care of, captive fish live longer, grow larger, and produce more offspring than those in the wild. If they could talk, would they say those benefits outweigh the limitations of captivity? Something to ponder.

What's particularly interesting about this MSNBC report isn't the Democrat/Republican disparity - that should have surprised no one. Rather, it's the odd reaction of many media outlets. With the powerful logic of using a band-aid for a sore throat, the "solution" at many major papers and broadcasters is simply to prohibit donations, at least under the names of the employees (with the obvious dodge that such can still be arranged through spouses). Brilliant. Instead of pursuing a policy of objective news, or at least leaving the media bias being out in the light of day where it can be seen and debated, the solution is to hide it. Out of sight, out of mind, apparently. And they're surprised that circulation and viewership continue to plummet?

It's not hard to see why the unions would be behind such a measure. Membership has been declining steadily for a long time - the current fraction of the workforce, 12%, is just over half of what it was in 1983 when the government first started keeping such statistic. And that 12% reflects strong membership in the government sector. In the private sector, per the BLS link, it's just over 7%.

However, this is not the right way to go about increasing membership. The way to look at employees from a union perspective is as "customers". And whether you're an individual (in which case the "customer" of your service is your current or prospective employer), or a company selling a product or service, there's exactly one way to reliably find and keep customers - provide good value for the price. Those who are capable of doing that will find customers coming to them. Those who don't will have to resort to uncompetitive behaviors to try and deceive or coerce "customers" that they could otherwise not win. Looked at another way, the union effort to modify the voting law says exactly this to prospective members: "We can't demonstrate to you that it's in your best interests to organize, but we're going to do everything we can to make you a member anyway".

So what's wrong with a public vote? Take a look around you. When you vote for government representatives, is that vote public or private? And why? If you're voting in the US, it's private. This allows you, the voter, to be able to vote your conscience without fear of reprisal or interference. That's not the case everywhere in the world, however. Sham democracies prefer the public vote, as it allows the govenment to pursue brutal reprisals against those who don't vote "correctly". It's by this manner that Saddam Hussein was able to obtain a virtual 100% vote. The former Soviet Union operated in the same manner.

By making the union vote public, the unions are betting that their intimidation is going to outweigh that of the employers. It's a horrible situation to be in as an employee. On one hand, there's the legitimate fear of being preferentially targeted in a layoff after signing the card. On the other, given the history of mafia ties and violence against people and property, my suspicion is that the threat the unions possess is the stronger. It's apparently also big labor's belief, or they wouldn't be pushing such a measure.