The impact of federal spending on local business:

Our original goal was to investigate how politically connected firms benefit from increases in the power of their representatives. A benefit in focusing on changes in committee chairmanships is that their timing is largely exogenous from the perspective of the ascending chairman and his constituents...

We began by examining how the average firm in a chairman's state was impacted by his ascension. The idea was that this would provide a lower bound on the benefits from being politically connected. It was an enormous surprise, at least to us, to learn that the average firm in the chairman's state did not benefit at all from the increase in spending. Indeed, the firms significantly cut physical and R&D spending, reduce employment, and experience lower sales.

The results show up throughout the past 40 years, in large and small states, in large and small firms, and are most pronounced in geographically concentrated firms and within the industries that are the target of the spending.

Supply vs Demand in the Japanese Economy-- was their problem aggregate demand?

The impact of OSHA on workplace fatalities:

The Arabs and Iran:

In March, an Israeli member of parliament said that a “wall to wall coalition” of Muslim countries, including ones that don’t even have diplomatic relations with Israel, had sent them secret messages expressing their support for military action against Iran. If a scenario unfolds where Israel attacks Iran with the Arabs secretly assisting, expect those same Arab regimes to viciously condemn the attacks and express support for a UN condemnation. They’ll express their solidarity with Iran, and should Israeli forces cross into their territory, there might be obligatory gunfire upon them that will conveniently miss to show how their sovereignty was violated. The Arab governments will try to escape the wrath of Iran and their angry populations, but will smile behind closed doors.

An interesting backgrounder on Egyptian politics:

Mubarak’s Egypt is often compared to Iran in the last days of the Shah: a middle class squeezed by inflation; anger at the regime’s alliances with the US and Israel; a profound sense of humiliation that is increasingly expressed in Islamic fervour; near universal contempt for the country’s ruling class; a state whose legitimacy has almost entirely eroded.

The Oil Drum on Electric Cars:

Electric motors and batteries have improved substantially over the past one hundred years, but today's much hyped electric cars have a range that is - at best - comparable to that of their predecessors at the beginning of the 20th century. Weight, comfort, speed and performance have eaten up any real progress.

And from a linked review of the upcoming Mitsubishi i-MIEV:

Under ideal conditions the i-MIEV has a rated range of 160 kilometers, or 100 miles. Conditions were not ideal. It was dark, so headlights were on. And at 27 degrees F, it was cold, so I had the heater on. Mitsubishi advises that using the heater cuts the maximum range exactly in half.

Mother Nature doesn't like Organic food:

A three-year study by Newcastle University has found that wild birds are not swayed by the organic label, but instead prefer the more protein-rich, conventional food that will help them to survive the winter....

"Protein is an essential nutrient in the diet of all birds and mammals and getting enough of it -- especially in winter -- can be hard.

"We showed that when given free choice, wild birds opt for the conventional food over the organic, and the most likely explanation is its higher protein content.

"This study is only looking at one aspect of the organic food debate... But it does raise questions about the nutritional benefits of organic food and what consumers are being led to believe."

Dr Orssengo's simple model for global temperatures over the coming century:

Observed temperatures and IPCC projections:

Social Welfare Expenditures in the US and the Nordic Countries:

The common view that America spends much less on social welfare than the Nordic countries does not survive closer inspection when we consider the differences in the structures of social expenditures... Per capita net public social expenditures in the U.S. rank behind only Sweden. Add in the private spending, and per capita spending in the U.S. is higher than in all of the Nordic countries.

via Marginal Revolution. The comments at MR point us to the specific numbers from another paper by the same author:

In 1990 purchasing power dollars, net government expenditures by the U.S. in 2003 were $5,408 per capita, which is lower than Sweden’s per capita spending of $6,259 and Norway’s $5901, about the same as Denmark’s 5,472, and higher than Finland’s $4,232. Once private social welfare expenditures are included, the U.S. per capita net public and private social welfare spending rises to $7,850, which is substantially higher than Sweden’s $6,715, Norway’s $6,315, Denmark’s $5,818, and Finland’s $4,920."

Der Spiegel has an article with an absolutely excellent wrap up of the current state of climate science.

Even though researchers have been refining their climate models for more than 30 years, there is one natural phenomenon that continues to elude them. "Clouds still pose the biggest problem for us," says Marotzke. "The uncertainties are still very big. This remains the most important issue for us."

It all seems simple enough in theory. When temperatures rise, more moisture evaporates. But does that mean that more clouds form as a result? And if so, do they curb or accelerate global warming?

On their upper surfaces, clouds act like mirrors. They reflect sunlight back into space, thereby cooling the atmosphere. But on their lower surfaces they prevent the heat reflected by the Earth from escaping, and temperatures rise.

Which of the two effects predominates depends on the height and type of clouds. "You just have to look up to see how many different types there are," says US cloud expert Björn Stevens, the new director of the MPI-M. "And each cloud type behaves differently."

Until now, no one knew exactly which clouds benefit from a greenhouse climate. But the answer to this question determines whether average global temperatures will end up being one degree higher or lower than predicted by today's models, a factor which creates significant uncertainty. "The jury is still out on which direction the pendulum will take," says Stevens.

Why is all of this important? Because cloud cover is simply one of many types of feedback mechanisms that influence overall climate. From the National Research Council (via):

If there were no climate feedbacks, the response of Earth's mean temperature to a forcing of 4 W/m² (the forcing for a doubled atmospheric CO₂) would be an increase of about 1.2 °C (about 2.2 °F). However, the total climate change is affected not only by the immediate direct forcing, but also by climate “feedbacks” that come into play in response to the forcing.

However, the true climate sensitivity remains uncertain, in part because it is difficult to model the effect of feedback. In particular, the magnitude and even the sign of the feedback can differ according to the composition, thickness, and altitude of the clouds, and some studies have suggested a lesser climate sensitivity.

When Al Gore claims that "the science is settled" on CO₂, he is making a typical politician's gambit. This is true in the narrowest sense, including only the direct effects of CO₂-- 1.2 degrees of warming, not the 4 or 6 that he frequently cites. But, following rather non-controversial claims about the impact of CO₂, he makes a cognitive leap, from the direct impact of CO₂, to the net impact of CO₂, two very different questions. (BUMPED)

The War on Science:

Not only is atrazine effective, it is safe. The chemical has been on the market for half a century, during which time its safety has been tested to death—some 6,000 studies, here and abroad, including reviews by the World Health Organization and other international bodies.

Following a dozen years of exhaustive examination of scientific evidence about claims of possible health problems stemming from the chemical, the EPA’s Office of Pesticide Programs reported to Congress on February 16, 2005: “After a very careful assessment, EPA’s current view is that the available studies do not adequately demonstrate such effects. A panel of independent, external experts, the SAP, supports EPA’s position.” Concluding that cumulative risks posed “no harm that would result to the general U.S. population, infant, children or other . . . consumers,” the EPA re-registered atrazine for use in 2006...

[T]he NRDC and its allies aim to make toxicology safety thresholds so stringent that no agrochemicals could past legal muster. That’s precisely why they’ve singled out atrazine. As the Wall Street Journal noted recently, “The environmental lobby also figures that if it can take down atrazine with its long record of clean health, it can get the EPA to prohibit anything.”

Neo-anarchist traffic design:

A fascinating example is a major–20,000 cars a day!–intersection in the Dutch city of Drachten that used to look a lot a typical American intersection, with lots of bright paint and traffic signals and enormous signs telling you what and what not to do. Traffic planners tore that stuff out and went naked, just putting down a roundabout in the center. The sidewalks even disappeared as distinct structures. Everyone figured it out though. Fatalities at the intersection dropped markedly, as did travel times.

That was just one data point in the larger national trend. While the US traffic fatalities have fallen by 15 percent, Holland’s have fallen by 75 percent. And, thus, the headline assertion: If America had matched Dutch fatality rates, we would have had only 15,000 deaths on our roads last year instead of 37,000.

Apropos my previous post on bundling and business models for content creation, James Fallows follows up with how to save the news.

Next in the Google assessment is the emphasis on “unbundling” as an insurmountable business problem for journalism. “Bundling” was the idea that all parts of the paper came literally in one wrapper—news, sports, comics, grocery-store coupons—and that people who bought the paper for one part implicitly subsidized all the rest. This was important not just because it boosted overall revenue but because it kept publishers from having to figure out whether enough people were reading stories from the statehouse or Mexico City to pay the costs of reporters there.

“Newspapers never made money on ‘news,’” Hal Varian said. “Serious reporting, say from Afghanistan, has simply never paid its way. What paid for newspapers were the automotive sections, real-estate, home-and-garden, travel, or technology, where advertisers could target their ads.” The Internet has been one giant system for stripping away such cross-subsidies.

So, unbundling is the future, right?

With this approach, Google has in a curious way re-created the “bundled” approach that it has helped destroy for newspapers. Virtually all of Google’s (enormous) revenue comes from a tiny handful of its activities: mainly the searches people conduct when they’re looking for something to buy. That money subsidizes all the other services the company offers—

I also found this fascinating:

The old-tech wastefulness of the process is obvious, but Varian added a less familiar point. Burdened as they are with these “legacy” print costs, newspapers typically spend about 15 percent of their revenue on what, to the Internet world, are their only valuable assets: the people who report, analyze, and edit the news. Varian cited a study by the industry analyst Harold Vogel showing that the figure might reach 35 percent if you included all administrative, promotional, and other “brand”-related expenses. But most of the money a typical newspaper spends is for the old-tech physical work of hauling paper around. Buying raw newsprint and using it costs more than the typical newspaper’s entire editorial staff.

“Nothing that I see suggests the ‘death of newspapers,’” Eric Schmidt told me. The problem was the high cost and plummeting popularity of their print versions... "Newspapers don’t have a demand problem; they have a business-model problem."

This is a very interesting point. The success of "new media" companies like Politico is that they aren't carrying these legacy costs, or the legacy mindset that it is a paper.

Pot Calls the Kettle Black: the Billionaire funded astroturf organization Center for American Progress attacks the MBA student project No Net Brutality as a secret Telecom conspiracy. Hilarity ensues.

How affiliate fees pay for content. This is actually very important to understand, because I think this is heavily tied up with much of the net neutrality regulations that are coming down the pike.

Hollywood is struggling to find a model to produce and pay for content, and right now it relies quite heavily on bundling and affiliate fees. The successful headliner shows subsidize the remainder of the programming on a channel or from an affiliate, and help provide seed money for new content. Moving to a true internet style, direct to consumer, a'la carte style content delivery makes cash flows more volatile, becoming more difficult to leverage successful shows, and significantly increases search costs for consumers.

That is not to say that this is the ideal business model for the entertainment industry. Bundling has its downsides, as successful shows are not rewarded fully, but instead used to subsidize failures, and as the article above points out, bundling encourages the production of large amounts of cheap, low quality shows to round out lineups. But Net Neutrality regulation is explicitly designed to allow the government to short circuit the natural process by which the market sorts through these options.

From Tyler Cowen:

China alone loses between 100 million and 200 million tons of coal each year to mine fires, as much as 20 percent of their annual production, according to the International Institute for Geo-Information Science and Earth Observation, based in Enschede, Netherlands. The Institute estimates that carbon dioxide emissions from these fires are as high as 1.1 billion metric tons, more than the total carbon dioxide emissions from automobiles in the United States. Second to China is India, where 10 million tons of coal burns annually in mine fires, contributing a further 51 million metric tons of carbon dioxide to the atmosphere.

High drama at the FCC, as last week the FCC sharply reverses course on supposed neutrality rules:

In a move that will stoke a battle over the future of the Internet, the federal government plans to propose regulating broadband lines under decades-old rules designed for traditional phone networks...

At stake is how far the FCC can go to dictate the way Internet providers manage traffic on their multibillion-dollar networks. For the past decade or so, the FCC has maintained a mostly hands-off approach to Internet regulation.

Internet giants like Google Inc., Amazon.com Inc. and eBay Inc., which want to offer more Web video and other high-bandwidth services, have called for stronger action by the FCC to assure free access to websites.

But, a significant part of the problem is not what the regulations are, but how the FCC will regulate:

"[FCC Comissioner Genochowski] will propose that the FCC evaluate alleged violations of the non-discrimination principle as they arise, on a case-by-case basis." In theory, this gives the FCC more flexibility, allowing the agency to be smarter and more generous when weeding out violators. But in practice, it's likely to expand the bureaucracy's reach as it refuses to define the boundaries of its authority.

Clearly defined regulations are probably unnecessary, but at least they would provide innovators a sense of stability. But Genachowski's case-specific approach to judging violations—essentially we'll know it when we see it—doesn't even give them that. Now, whenever a telecom company wants to implement a new service or product that works by manipulating traffic flow on the Web, it will have to worry about whether or not its innovation might set off Genochowski's sense of... well, whatever it is that he and the rest of the regulators at the FCC don't like.

The evils of futures markets:

In the 1950s, onion growers were often shocked at the low prices they were getting. Casting around for a villain to blame, they alighted on derivatives traders, and they persuaded Congress to ban any futures trading in onions.

Today onions are the only commodity for which futures trading is banned. Not coincidentally, onion prices remain extremely volatile: they doubled in 2008, and then fell by 25 percent in 2009.

Ron Bailey over at Reason links up a pair of studies that shows that Green Jobs initiatives in Europe are incredibly expensive:

The study calculates that since 2000 Spain spent €571,138 to create each “green job”, including subsidies of more than €1 million per wind industry job...

Each “green” megawatt installed destroys 5.28 jobs on average elsewhere in the economy: 8.99 by photovoltaics, 4.27 by wind energy, 5.05 by mini-hydro.

These costs do not appear to be unique to Spain’s approach but instead are largely inherent in schemes to promote renewable energy sources.

and

In the end, Germany’s [photovoltaic] promotion has become a subsidization regime that, on a per-worker basis, has reached a level that far exceeds average wages, with per worker subsidies as high as 175,000 € (US $ 240,000).

Sure, you ask, but they're saving the environment, right?

Advocates say feed-in tariffs cut greenhouse gas emissions. But they’re an absurdly expensive way to do this. According to RWI, the German feed-in tariffs for solar energy reduce carbon dioxide emissions at a cost of more than $1,000 per ton. (The wind power subsidy was better, coming to only $80 per ton.) In late 2009, an emissions permit for a ton of carbon could be had for less than $20 on the European climate exchange. “Hence, the cost from emission reductions as determined by the market is about 53 times cheaper than employing [photovoltaics] and 4 times cheaper than using wind power,” the report notes.

To be honest, that may overestimate it a bit. Measuring cost of carbon reductions by quoting the European cliamte exchange is a little suspect considering the high rate of fraud:

The European Union (EU) Emission Trading System (ETS) has been the victim of fraudulent traders in the past 18 months. This resulted in losses of approximately 5 billion euros for several national tax revenues. It is estimated that in some countries, up to 90% of the whole market volume was caused by fraudulent activities.

China may crash in the next year:

China is “on a treadmill to hell” because it’s hooked on property development for driving growth, Chanos said in an interview last month. As much as 60 percent of the country’s gross domestic product relies on construction, he said. Rogoff said in February a debt-fueled bubble in China may trigger a regional recession within a decade.