Wednesday, July 29, 2009

Risks of tanning

A new study indicates that lying in a tanning bed carries the same cancer risk as smoking cigarettes or breathing asbestos.
The International Agency for Research on Cancer (IARC) had previously classified sunbeds as being a "probable" cause of cancer.

However, the agency is now recommending that tanning machines should be moved to "the highest cancer risk category" and be labeled as "carcinogenic to humans".

It followed a review of research which concluded that the risk of melanoma -- the most deadly form of skin cancer -- was increased by 75 per cent in people who started using sunbeds regularly before the age of 30.

The IARC also says there is evidence of a link between eye cancer and the use of sunbeds.
Given the current policy trend of taxing harmful activities to both promote better health and raise revenues, legislators should immediately consider a special tax on tanning beds.

Once that is done, they can also consider taxes on skimpy swim suits and on the sun.

Tuesday, July 28, 2009

Housing market stabilizing?

There's growing evidence that the housing slump may have finally bottomed out.

Yesterday, the Commerce Department reported that new home sales in June increased 11 percent over the previous month and were at their highest level since November.

The Case-Shiller 20-city housing price index edged up half a percent in May, the fourth consecutive monthly increase.

Despite the recent increases, sales levels and prices remain at very low levels. The new home sales levels are still 21 percent below where they were a year ago, and the price index is 17 percent below where it was a year ago. And, of course, last year's figures were depressed far below their highs from a few years earlier.

Don't look for a boom anytime soon; the weak economy and high unemployment are likely to continue to exert a drag on housing. Indeed, the Conference Board reported that its index of consumer confidence fell in June, mostly on concerns regarding unemployment.

The good news, though, is that housing itself doesn't appear to be pulling the economy down.

Thursday, July 23, 2009

Another "expression of regret" may be in order

Last month, the Greensboro City Council took the courageous step of formally expressing regret for the killings at the 1979 Death to the Klan march.

It now appears that another, bigger crime may haunt our collective history--an alleged genocide of Neanderthals by humans.
Squat, rugged, and well suited to cold, Neanderthals dominated Eurasia for the better part of 200,000 years, surviving an ice age, but the species mysteriously disappeared around the same time modern humans spread out from Africa into their habitat.
What about it city council? Do you have it in your hearts for one more expression of regret?

Tuesday, July 21, 2009

It's time for Rep. Murtha to go

It's time (past time actually) for Rep. Murtha to go.

Maybe the Murtha Twins' song can lure him out of Washington and into retirement.

Update: It turns out these are the Mothra Twins and not the Murtha Twins (note to time look things up when the eyes are a little fresher). Regardless, Murtha should still go.

Unsafe in any mode

More and more covered-up government science keeps emerging from earlier this decade--science that could have saved lives. This time it's research by the Department of Transportation on the dangers of driver distraction. The New York Times reports
In 2003, researchers at a federal agency proposed a long-term study of 10,000 drivers to assess the safety risk posed by cellphone use behind the wheel.

They sought the study based on evidence that such multitasking was a serious and growing threat on America’s roadways.

But such an ambitious study never happened. And the researchers’ agency, the National Highway Traffic Safety Administration, decided not to make public hundreds of pages of research and warnings about the use of phones by drivers — in part, officials say, because of concerns about angering Congress.
Data, we don't need no stinkin' data. BTW, that would be the then Republican-controlled Congress and especially the House Appropriations Committee headed by Rep. Bill Young.

Researchers at the time estimated that cell phone use was responsible for nearly 1,000 traffic deaths per year and almost a quarter of a million accidents.

Perhaps even more importantly, researchers were concluding that "hands-free" devices were about as unsafe as regular cell phones.

As cell phone use has grown and the number of distracting features has multiplied, the safety problems have likely increased. Moreover, research was squelched at a time when behavior might have been easier to change.

Readers who are interested in the documents that were too dangerous to see can find them at the Times web-site. Those who want to cut to the chase can go to the last two pages where the DOT concludes
  • A significant body of experimental research indicates that both hand-held and handsfree cell phones increase the risk of a crash. Indeed, there is little if any difference between hand-held and hands-free phones in contributing to the risk to themselves
    and others.

  • Limiting use to hands-free phones while driving will not solve the problem. In either operational mode, we have found that the cognitive distraction is significant enough to degrade a drivers’ performance. We therefore recommend that drivers not use wireless communication devices, including text messaging systems, when driving, except in an emergency.

  • Moreover, legislation that only forbids the use of handheld cell phones while driving will not be effective since it will not address the problem. In fact, such legislation may erroneously imply that hands-fkee phones are safe.
  • Monday, July 20, 2009

    Pros and cons of a "local currency"

    A local group, the Greensboro Currency Project, is pushing a local currency. In an op-ed this weekend, Signe Waller Foxworth, a co-chair of the group touted the possible benefits of this idea.
    Imagine everyone in Greensboro, particularly those chronically short of money, being able to meet many more of their basic needs.

    Imagine a thriving community, with small and medium-sized local businesses supplying many goods and services to city residents and able to employ more workers. This attractive vision represents the real-life potential of a local currency in Greensboro.
    The obvious John Lennon allusions are nice. Nicer still would be a cogent explanation of how a local currency might be implemented or how it might achieve the listed benefits.

    Let's take a stab at those benefits. A local currency can take several forms, but a common feature is that it serves as a medium of exchange in a particular--usually geographically defined--market. Thus, it has some, but not all, of the features of regular currency.

    Because it is only accepted within a defined market, a local currency promotes trade within but not outside that market. You could view the currency as a form of trade barrier. It promotes local goods over goods in the next community over. Local goods effectively become less expensive, leading to greater purchases by local residents. At the same time other communities' goods become relatively more expensive, leading to less external trade. If local currencies are adopted by a few communities, those communities might enjoy positive effects, but they are adopted by all or many communities, they could actually reduce economic activity by hindering trade.

    A local currency may stimulate the economy in other ways. Opportunities for financial intermediation are likely to be limited or absent. Because of this, there would be few rewards for using the currency to save or invest. Instead, people would get their primary reward from spending the currency. This would give local currency purchases a bigger multiplier than regular currency purchases. This effect, however, would be offset to the extent that people substitute use of the local currency for local shopping and use of the national currency for other transactions.

    Another stimulative effect could come from simply boosting the amount of available currency--that is, increasing the money supply. Increasing the supply too fast, however, will end up devaluing the currency.

    Some additional positive effects of the currency are to promote awareness of local producers and merchants and to increase social cohesion.

    Unfortunately, as the foregoing discussion suggests there are a number of drawbacks. First, a local currency does not help--and may hinder--trade outside the region. Greensboro boasts a number of "exportable" industries, including logistics and financial services. Second, the goodwill that may be produced locally may be offset by ill will from surrounding communities. The currency sends a message to other communities that our businesses are important while theirs are not. Third, there are overhead costs because new institutions will have to be created to implement and manage the currency. Fourth, there will be inefficiencies from having to exchange currencies to trade externally (electric bills and merchants' payments to suppliers are examples) or make external payments (sales tax bills).

    Fifth, there is the whopping question of how the currency is put into circulation in the first place. A local group could "sell" the currency, but this would reduce the stimulative impact by taking regular currency out of circulation. Alternatively, if the currency is distributed it represents a windfall to whomever gets it or uses it first. How will that windfall be distributed?

    Finally, do we expect that the currency will circulate forever? If not, how do you address the problems faced by the last people stuck holding the currency? One solution to sell the currency and then maintain reserves of the regular currency to back it up. Again, however, taking regular currency out of circulation defeats some of the purposes of the local currency. Also, maintaining the necessary reserves is a tremendous responsibility.

    In their quest for something exotic, the backers of a local currency seem to have overlooked simple alternatives that are used in numerous cities--local merchants' cards and coupon books. The cards or books can be sold, with the proceeds going to local development or advertising/promotion campaigns, or they could be given away. The discounts (price reductions) would encourage shopping. The discounts could also be time limited, giving them a use-it-or-lost-it quality.

    It's fun to imagine ways to play games with "monopoly money," it's more practical work to with things that work.

    Friday, July 17, 2009

    Congress trying to prop up car dealers

    The House of Representatives approved an amendment in an appropriations bill last night that would interfere with the restructuring of GM and Chrysler by requiring them to keep their dealerships open. Similar legislation is being considered in the Senate.

    Legislators are rightly concerned about potential job losses at dealerships and about the loss of many small business; more than 3,000 dealerships appear to be facing closure. However, the legislation are risks the ultimate viability of the automakers and delays cuts that are as inevitable as they are painful.

    By doing so, legislators are setting the stage for even greater job losses.

    Green shoots in the West Bank

    The New York Times describes some hopeful trends in the West Bank.
    For the first time since the second Palestinian uprising broke out in late 2000, leading to terrorist bombings and fierce Israeli countermeasures, a sense of personal security and economic potential is spreading across the West Bank as the Palestinian Authority’s security forces enter their second year of consolidating order.

    The International Monetary Fund is about to issue its first upbeat report in years for the West Bank, forecasting a 7 percent growth rate for 2009. Car sales in 2008 were double those of 2007. Construction on the first new Palestinian town in decades, for 40,000, will begin early next year north of Ramallah. In Jenin, a seven-story store called Herbawi Home Furnishings has opened, containing the latest espresso machines. Two weeks ago, the Israeli military shut its obtrusive nine-year-old checkpoint at the entrance to this city, part of a series of reductions in security measures.
    The budding growth and the increasing competence of the government headed by Mahmoud Abbas will help to decrease radicalism in the West Bank and improve the conditions for a secure and peaceful two-state solution.

    A few calm and mildly prosperous years will not solve the region's problems, but they are an important start.

    Thursday, July 16, 2009

    CBO chief disses Democrats' health plans

    At a hearing today, the head of the Congressional Budget Office (CBO) gave a blunt, negative assessment of the Democrats' health plan proposals. The Washington Post reports
    Instead of saving the federal government from fiscal catastrophe, the health reform measures being drafted by congressional Democrats would worsen an already bleak budget outlook, increasing deficit projections and driving the nation more deeply into debt, the director of the nonpartisan Congressional Budget Office said this morning.

    Under questioning by members of the Senate Budget Committee, CBO director Douglas Elmendorf said bills crafted by House leaders and the Senate health committee do not propose "the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount."
    The Democrats should take this assessment from the CBO to heart. At the very least, the CBO's recommendations to cap the tax subsidy on employer-provided health benefits (instead of the soak-the-rich surtax) and to change Medicare reimbursements should be included in the legislative mark-up process. Better yet, the Democrats should yank their just-introduced bill and rework it to come up with genuine cost savings.

    Sen. Franken rises to the challenge

    Earlier this week, Doug Clark from the local News & Record used the appointment of newly-seated Sen. Al Franken to the Judiciary Committee to ridicule the Supreme Court confirmation process. Clark wrote
    It's appropriate that Senate Democrats put Al Franken on the Judiciary Committee.

    The Supreme Court confirmation hearing that begins this morning will be pure show business, with a comic edge. Franken, the comedian-turned-senator from Minnesota, ought to fit right in.

    These proceedings have become a joke.
    He concluded by sarcastically suggesting that Democrats appointed him to the committee so that he could provide "a laugh or two."

    When Sen. Franken got his turn to ask questions, he did provide some comic relief. However, Sen. Franken also ended up asking one of the most insightful questions of the hearings regarding the judicial activism of the Roberts Court.

    By a 5-4 decision in Gross v. FBL Financial, the Roberts Court changed the evidentiary standard in age discrimination cases, making it much more difficult for older workers to prevail in lawsuits.

    Sen. Franken pointed out that when the Supreme Court decided to hear the case, it indicated that it would be considering a matter regarding whether plaintiffs in age discrimination suits needed to provide direct or indirect evidence of discrimination. In its hearing, the Court received briefs on these issues.

    However, the majority's decision addressed an issue on which it had not been briefed--namely, how to weight mixed motives by employers in such cases. As Justice Stephens wrote in his dissent
    ...the Court is unconcerned that the question it chooses to answer has not been briefed by the parties or interested amici curiae. Its failure to consider the views of the United States, which represents the agency charged with administering the ADEA, is especially irresponsible. Unfortunately, the majority’s inattention to prudential Court practices is matched by its utter disregard of our precedent and Congress’ intent.
    After describing the case, Sen. Franken asked Judge Sotomayor, "as an Appellate Court judge, how often have you decided a case on an argument or a question that the parties have not briefed?"

    She answered that that was not the practice of her Court.

    Sen. Franken's question shows the Roberts Court making important and wide-ranging decisions without giving the parties an opportunity to present facts and arguments. As with so many its other recent decisions, the Court showed a lot of empathy for business interests. You'd think that Sen. Sessions and other Republicans would be outraged by such activism, but you'd be wrong.

    Kudos to Sen. Franken for making this point. The Democrats made the right call by seating him on the Committee, though not for the reasons that Doug Clark gave.

    Wednesday, July 15, 2009

    Car insurance

    I haven't switched to GEICO, but it looks like I am going to save some money on car insurance.

    From the local News and Record

    A settlement today between the state and the North Carolina Rate Bureau decrease private passenger auto insurance rates to just under 2006 levels.

    The changes begin Nov. 1 and are retroactive to Jan. 1.
    With a newly added teenage driver in the household, this is good news.

    Should CIT Stay Or Should It Go?

    The New York Times updates the story on teetering CIT, describing ongoing negotiations between the firm and government regulators. The question at the heart of the talks is whether the government will guarantee CIT's debt and possibly add to the $2.3 billion bail-out that has been provided to the firm or whether it will let CIT fail.

    Compounding CIT's problems, the Times reports

    Corporate customers started to draw down on their credit lines Monday and Tuesday, according to a report Wednesday in The Wall Street Journal, which cited unidentified people familiar with the situation. Those people told the newspaper the drawdowns amounted to several hundred million dollars, with one number mentioned as high as $775 million.
    Last week, Bloomberg had a more detailed story on the firm's condition and problems.

    Tuesday, July 14, 2009

    Continuing financial problems

    Bloomberg and Fortune are reporting storm clouds circling CIT Group, Inc., a financial firm the mostly lends to firms. Bloomberg reports that "investors [are] flee[ing] the 101-year-old company’s bonds and shares on concern it may become the year’s biggest financial industry failure."

    From the Bloomberg story, the downstream impact could be severe.
    CIT said its collapse would put 760 manufacturing clients at risk of failure and “precipitate a crisis” for as many as 300,000 retailers, according to internal documents obtained by Bloomberg News.
    The specific problem facing CIT is a cash crunch of its own.

    Regulators in Washington now must decide whether to back CIT's debt, let the company fail, or find some middle ground.

    The CEA gazes into the employment future

    The Council of Economic Advisors has released a report on future job growth and training needs titled, "Preparing the Workers of Today for the Jobs of Tomorrow."

    The report begins with projections of job growth in different industries. Those projections indicate that health care, education, and construction occupations are likely to add millions of jobs between now and 2016. Other occupations, such as aerospace and pharmaceuticals, are also expected to grow, though with a smaller impact on employment.

    The report then backs out the changes in worker skills that will be necessitated by these occupational shifts. Not surprisingly, many of the new occupations will require greater critical thinking and problem-solving skills. More post-secondary schooling, both in the form of college education and vocational training, will be needed.

    Finally, the report makes recommendations regarding how to train workers more effectively.
    Elements of a more effective system include: a solid early childhood, elementary, and secondary system that ensures students have strong basic skills; institutions and programs that have goals that are aligned and curricula that are cumulative; close collaboration between training providers and employers to ensure that curricula are aligned with workforce needs; flexible scheduling, appropriate curricula, and financial aid designed to meet the needs of students; incentives for institutions and programs to continually improve and innovate; and accountability for results.
    Colleges and universities should note that increased accountability, which was recommended by the previous administration and which is now common-place in elementary and secondary schools, is likely to remain an emphasis in the current administration.

    On the whole, there is little substantively to disagree with in the report. An increasingly skills-based economy needs skilled workers. Schools, training programs, community colleges, and universities will be crucial in producing those skills.

    What's surprising though is the relatively long-term focus of the report. Yes, we absolutely need to prepare workers for the jobs that will eventually be available. And yes, the anticipated output recovery will eventually create jobs that will need to be filled.

    However, the report is mostly silent about steps that can be taken to dampen the immediate unemployment recession. The American Recovery and Reinvestment Act was one step in this direction (and is touted in the report), but additional near-term steps are needed. Re-employment bonuses for unemployed workers, better job search tools, incentives for caseworkers, and tax breaks for firms that add jobs should all be on the table.

    Monday, July 13, 2009


    The Justice Dept. has dropped charges of voter intimidation against members of the New Black Panther Party, who stood outside a Philadelphia polling station last November dressed in paramilitary uniforms and brandishing night sticks.

    Part of the incident was caught in the tape shown above.

    The DoJ claims that the decision was made by a career official who "determined that the facts and the law did not support pursuing the claims against three of the defendants."

    Imagine the uproar if members of the Minutemen were standing outside a polling place dressed in fatigues and waving nightsticks or if members of a neo-Conderate group were doing the same. There's little doubt that intimidation charges would be pursued vigorously in those cases.

    Republican lawmakers are demanding a more complete explanation of the DoJ's decision. They should get one.

    Saturday, July 11, 2009

    Next economic problem ... joblessness

    Unemployment tends to be a lagging indicator in the economy (come to think of it, that hardly makes it an indicator at all, but I digress). As the output of the economy begins to stabilize and then, with any luck, improve later this year, the employment situation is likely to continue deteriorating for some time.

    Bloomberg had an excellent analysis yesterday of the labor market challenges facing the U.S. and the Obama administration. Besides rising unemployment, the article also points to the higher incidence of long-term unemployment.
    The article also mentions how joblessness will depress wages and contribute to further housing woes and bankruptcies.

    The U.S. traditionally hasn’t had to deal with long-term joblessness. During the last 30 years, Americans who were thrown out of work took an average 15.8 weeks to find new positions. In June, the average duration of unemployment was 24.5 weeks, the longest since records began in 1948. The number of people collecting unemployment benefits reached a record 6.88 million in the week ended June 27.
    Policies that may help in the short-run include providing tax breaks to companies that add jobs and modifying unemployment insurance to provide re-employment bonuses. Longer term policies include training assistance. Of course, the most helpful thing of all will be an improving economy.

    Friday, July 10, 2009

    United Breaks Guitars

    The family and I have just returned from a weeklong trip to Texas. The flights home were on United and passed through Chicago's O'Hare Airport. While we weren't hauling guitars, we were treated to the sight of some incredibly rough luggage handling.

    The leg of the journey from Chicago to Greensboro was on a small regional jet. Because of the limited storage room in the cabin, larger carry-ons had to be "gate-checked." Once we were on the plane, we watched as the bags were thrown (no exaggeration) from the jet bridge onto a chute. Each bag then tumbled, end over end down the chute. At the bottom of the chute, the bags were retrieved and thrown onto a cart.

    We also had two checked bags, for which we had to pay extra. We weren't able to see how they were handled, but the fact that the fully-packed contents were completely scrambled when we finally opened the bags suggests that they got similar rough treatment.

    Fortunately, no breakables were in our bags.

    United claims that it is improving its baggage handling. However, you'd never know it from our experience.

    UPDATE (7/11/09): United offered Dave Carroll compensation for his guitar.