Sunday, February 26, 2006

Bush, Kulongoski, and renewable fuels

President Bush says we are addicted to foreign oil, and he wants to reduce our dependence on it. Governor Kulongoski says he wants to increase 25% of Oregon's fuel consumption to be renewable energy.

Both are misguided; both misunderstand basic economics.

We hear a lot about the risk of depending on the middle east for oil. When we buy oil from Arab nations we fill the government coffers with dollars that in some cases are used by those governments to fund terrorism. If we cut our consumption by 10%, I've heard it said, we could get by without oil from the middle east, and bring them to their knees economically.

It wont work. If we reduce oil consumption, the global demand for oil will obviously go down, and the price will go down a bit as well. So would it have much effect on Arab oil nations? No.

Arab nations are the world's lowest cost producer of oil. A lower global oil price would only hurt the higher cost producers, who might find the new equilibrium price of oil above their production costs. Arab nations would sell the same amount of oil, but perhaps at a slightly lower price.

So, if the point of reducing our dependence is to reduce the cash flow of terror sponsoring Arab nations, it simply won't work. The middle east produces oil for about $5 a barrel. Reduce global demand all you want, the Arab nations will be the last man standing becuase they are the lowest cost producer.

If the point is to make sure our economy isn't vulnerable to political events in the middle east that might disupt oil supply, it also doesn't make much sense. So we are supposed to consume higher-priced domestic energy sources rather than Arab oil in case the Arabs stop selling their oil to us?

It doesn't make economic sense, because every form of alternative energy costs more than oil, so the only way they get produced is with government subsidies. Subsidies are bad policy.

Take ethanol, as an example. Ethanol production in the U.S. gets subsidized to the tune of 50 cents a gallon. Guess what the major input in the production of ethanol is? Yup, energy - oil. Lots of oil involved in the planting and harvest of the corn, transporting it and distilling it into ethanol. Studies have been conducted that add up all the oil involved in ethanol production and found that each gallon of ethanol uses more than a gallon of oil!

So subsidizing ethanol production actually INCREASES our demand for oil!

But, you say, if we subsidize the production now, then we will figure out new and better and more efficient ways to produce it, and we will be ready to convert if some event in the middle east cuts raises the price of oil.

That sounds right, but the subsidy is not necessary, unless you believe in the all-knowing ability of government to correctly anticipate future technological advancements. How do we know ethanol will be the best alternative energy source? How about wind, solar, geothermal, natural gas, or cold fusion? Nobody knows what technology will be developed on any of these things. For the government to choose now and subsidize one or more of them requires a much greater faith in the efficacy of political decision-making than I have (or than is warranted by its track record.)

The oil industry is extremely profitable. There is a tremendous incentive for private industry to pursue alternative energy technology. As a general rule, if there exists a huge incentive to engage in an activity, no subsidy is required.

So why do politicians like Bush and Kulongoski love to subsidize alternative fuels? Well, the agricultural industry has a very effective lobby. They get billions each year in farm subsidies of one sort or another.

This is just another.

Friday, February 17, 2006

Jack Ohman come home

I'm a fan of Jack Ohman, the Oregonian's nationally syndicated cartoonist. I think Jack is on the short list of political cartoonists who have not yet won the Pulitzer. I won't be surprised when he wins it.

Ohman approaches issues from a decidedly different perspective than me, but I have always enjoyed his wit and cleverness that came through so clearly in his cartoons. He's extraordinarily talented.

That said, I think Ohman has been on a long dry spell, in which his cartoons have become disappointingly predictable. It's not just that the message of his cartoons has failed to surprise of late, but the cleverness that distinguished him from his less talented peers has seemed to give way to a daily drumbeat of the same unimaginative, shopworn images, whether his subject is of local or national interest.

I can't quite put my finger on it, but it seems as if there used to be a certain underlying joy in the way he did his work. Even if he was characterizing his target in a severely negative light, there was a certain lightness of being in the way he did it, a humor, or a unique way of presenting his point that often made me marvel at his craft, even as I disagreed vehemently with it.

His cartoons rarely seemed mean-spirited, and the statement his images were almost always sophisticated - the equivalent of a serious intellectual argument rather than a sound-bite.

I've always considered political cartoons to be one of the most powerful of all mediums. I've wished I had the talent to do them well. Because of the unique forum a political cartoonist has -- with the ability to combine an image with text to drive home a point, a cartoonist is able to take a political argument directly from premise to conclusion without the need for the intermediate step that regular columnists must forge - logical argument.

So cartooning is extraordinarily powerful. In a matter of a few brief reader's seconds a cartoonist can drive home a point that would take 700 words for a political columnist - and the cartoonist doesn't have to have anywhere near the intellectual consistency required of the columnist.

In my view, this is a huge responsibility for the cartoonist. Since the medium almost begs cartoonist to make stereotype part of their stock and trade, I think they have to be very careful to avoid descending into putting forth images that trade off the most convenient examples.

And that is where I think Ohman has gotten intellectually lazy. It seens his cartoons have for the last few years so regularly just made the most obvious sterotypical points: "Bush is dumb," or "Republicans are racist," or "Schools don't have enough money."

It has gotten tiresome, and it is too bad, because I remember many times truly enjoying Ohman cartoons that I completely disagreed with but which I thought were brilliantly done. On more than one occasion I wrote him to tell him just that.

I'm hoping that he can get back to his former self. The world is a much more interesting place with Jack Ohman on the top of his game. He's a truly talented guy.

Honestly, we are lucky to have a cartoonist as talented as Jack Ohman working out of our local paper. I hope he can snap out of whatever mid-career slump he's found himself in, and recapture his rapier-like wit (even if it is mostly aimed at people on my side of the political arena.)

Wednesday, February 15, 2006

Visioning Project: giveaways to the usual suspects

Did you know that Mayor Potter is giving out $200,000 in "Community Grants" to non profit organizations so they can ask their constituents a list of questions about their vision for Portland?

They received 142 applications for the grants, which range from $1,000 to $15,000. I spoke to someone today who went to the application meeting. I'm told that all the usual suspects were there - almost all of the organizations represented were of one or another liberal stripe.

So that's the plan... get all the liberal groups to ask their "communities" what they want Portland to be in 30 years. Guess whose vision dominates the discussions?

It will be interesting when they release the list of who got the grants. That will go a long way toward explaining what "vision" the project tells us Portlanders want for the city.

I'm going to go out on a limb here and predict that the vision that comes out of this process is that 1) we need more light rail; 2) we need more bike lanes; 3) etc.

Westlund's Candidacy: Who does it hurt?

So Ben Westlund is no longer a Republican, and will run for governor as an independent. So the question is: will he draw more votes from the Democrat or the Republican nominee?

It's a close call, but I think an argument can be made that Westlund would draw more votes from Kulongoski (assuming he's the nominee.) Here's the reasoning:

Westlund is neither a fiscal or a social conservative. He's been out front trying to raise taxes, he supports a sales tax, and he was a co-sponsor of SB1000, the same sex marriage bill.

Why would a bunch of Republicans flock to him? I could see some moderate R's vote for an independent who was fiscally conservative and socially liberal, but Westlund is liberal on both.

Democrats, on the other hand, are very disenchanted with Kulongoski, and are looking for some alternative. I think they would find Westlund's positions very attractive.

It could be that Westlund's defection will be good for the Republican nominee.


Who says you can't pave your way out of congestion?

I don't know how many times I've heard it said by all the planning ninnies around here, but I'm sure you've heard it too: "We will never pave our way out of congestion." It comes with lots of corrollary statements, such as "If we build more roads, that will just bring more cars."

Of course nobody in their right mind would apply this ridiculous principle to any other facet of their life. Would they ever say "If we install the big pipe, people will just poop more." Or "If I make more money, I'll just spend it."

OF COURSE increasing road capacity will decrease congestion. And in today's Oregonian, we have a great example of it. It concerns the Bridgeport Village retail center. Planners can't stand Bridgeport Village, because the entire thing is built with cars in mind. There aren't bike racks everywhere, not rail lines coming in. Although there is a bus mall nearby, I've never seen anybody get off the bus and walk over to Bridgeport.

In short, Bridgeport Village is hugely successful, precisely because it has rejected every single element of the planner's dogma.

Especially with regards to road capacity.

When it was in the planning stages, all the naysayers said that adding 800,000 square feet of retail space in that area would create a crisis in an already troubled intersection. So they upgraded the intersections and roads around the center. The improvements were very well thought out.

In fact, the developer said that there is even room to grow, because the road improvements were made to handle "a larger office and retail complex than was built."

So there you have it. Turns out if you build more road capacity, you can handle more cars and congestion goes down! And if you add on to your restaurant, you can seat more people. And it if you add 100 amps of electric service to your home, you can run more appliances. And if you ....

Oh you get the idea.

Refusing to be held accountable

Go check out my exchange with this PERS-retiree teacher over on his blog.

Thanks to Gus for notifying me that this guy was writing about me. The conversation is pretty revealing as to how union teachers think they should not be held accountable.

Sunday, February 12, 2006

Jim Hill

Jim Hill was in studio for an hour on my show today. Nice enough guy, but I was less than impressed.

His calculation seems to be very simple: I get union money instead of Ted, and it makes me competitive. He may be right. The way he was talking, the unions might well throw their considerable funds behind him.

To say he is a status quo guy is to understate the fact by quite a distance. He thinks PERS has been solved, and he couldn't name any government function that he would do away with.

He's a government guy, plain and simple. He said right out front that the government doesn't have enough money. The only difference between his and some other more purely socialist mindset is that Hill realizes that only a strong economy can generate more dollars for government programs, so he wants to grow the economy.

He doesn't however, have any real understanding of how to do so. He spoke of international trade being key, but said nothing about tax structure, land use regs, transportation, or anything else that might release private sector energy in the form of capital formation.

His answers were ponderously unfocused, filled with tangential pathways, and almost entirely lacking specificity.

He got angry with me right off the bat when I challenged him on PERS. It was really quite funny. He said "The problem has been solved." I wrote the statement down right then, and challenged him, saying "You're sitting there telling me the problem is solved when schools are paying 23% of payroll into PERS?"

He then said "Don't insult me. I didn't say the problem was solved." I asked "You did just that. And how does it insult you to read your words back to you?"

It was interesting how unprepared he seemed for this kind of pushback. This guy has won statewide campaigns, and ran for governor before, yet he seemed really astounded that I would take him on directly by challenging his answers. And he didn't handle it well - he got mad. Not good on the radio - especially when you're arguing with a guy like me who actually likes that kind of conflict.

None of this matters, however. He is going to shill for the unions, and if he gets their $$ he'll have the resources to mount a credible campaign. With the widespread disenchantment with Kulongoski, he could get the nomination.

I'm supporting Saxton. I can only hope like hell that Hill beats Kulongoski in the primary, because Saxton would walk all over Hill in the general.

All in all, Hill is a government guy. His world view is "government is good." He may not have noticed, but that view is a little out of tune with the times.

Saturday, February 11, 2006

It's just a question of image

The Portland School District abandoned their tax dreams because the poll they commissioned showed that either an income tax or a new local option property tax was about as popular as Bill Sizemore at an OEA convention.

In the Oregonian today: "School leaders say they must remake the district's image before they ask for more money."


They still don't get it, do they? They honestly believe that it is simply a matter of marketing and messaging. That they can hire Gard and Gerber to conduct a PR campaign and all of a sudden people will realize that PPS has been doing a great job all along, and will support all sorts of new revenue.

Here's a good way to start remaking the district's image:

1) Cap health care premiums at $650/month per teacher.
2) Cut every administrator's salary by 25%.
3) Launch a ten year effort like Chicago Public Schools is doing to contract out low performing schools to be operated by outside school management companies.
4) Cut all curriculum specialist positions and Director of Student Achievement (DOSA) positions.
5) Get rid of the faddish "new new math" curriculum and replace it with proven programs such as Connecting Math Concepts from the University of Oregon.
6) Implement a direct, intensive, systematic, explicit and comprehensive phonics curriculum.
7) Let Self-Enhancement Inc., which now operates a charter middle school in NE Portland, take over Jefferson Cluster schools.
8) Take a leadership role in ending the PERS system and replacing it with a defined contribution program.

That would be a start, if you were truly interested in creating a system of schools that could compete.

Or, you could just hire the PR firm. That would be a lot easier.

Friday, February 10, 2006

Jim Hill on my radio show Sunday

In his first radio interview since he announced he is running for Governor, Jim Hill will be on Kremer & Abrams this Sunday from 10-11:00.

Ideas for questions to ask Mr. Hill? I don't know a ton about the guy, but I will be interested in his take on the big picture issues.

Thursday, February 09, 2006

Two great examples of the problem in a single issue!

Today's Oregonian gave us two great examples of the problem with having a monopoly newspaper.

Imagine if Portland was a two newspaper town. Major political issues of the day would be debated in the editorial pages, and the strengths and weaknesses of the arguments on both sides would come out. Neither of the papers would be able to define the issue by using the news pages to offer up only stories that support the editorial position the paper has taken. Neither paper could dismiss the arguments of the other side as not worthy of consideration.

The Oregonian today gives us two examples of what I'm talking about:

Example #1: We all know the Oregonian wants a property tax hike to once again save Portland School District from itself. So, just like they did when the ITAX was being debated, we can expect an onslaught of "news" stories based on the theme: "schools don't have enough money."

Today we saw the first one - a completely invented news story about high Oregon class sizes. It wasn't a story about release of a national study or anything - it was entirely self generated. The Oregonian apparently asked the Department of Education for class size information, and then they wrote a story about it. Big news.

But it supports their theme of "schools need money," so they do it.

The article itself is basically just a series of whining school officials. They are careful to mention that class sizes would be worse still were it not for the ITAX, and so they will go up unless some replacement revenue is found.

It's a very good example of the way the Oregonian operates - how their "news" pages work in a coordinated fashion with the editorial side.

You'd think any honest discussion of class size might ask the question "why are Oregon's class sizes higher than other states that spend less money than us?" But you won't find it anywhere in this story. You won't find a whisper of the dirty little secret that Oregon has been trading high teacher pay and benefits for class size for years, and that we now have the highest level of teacher benefits in the nation.

That's how you know the story was simply invented to support their push for a new tax. Expect more of them. Mark my words, in the coming months you will see story after story, equally invented (by invented I mean a story not triggered by any news event) that covers some aspect of the theme "schools don't have enough money."

Example #2: The Oregonian's editorial today on light rail.

You probably saw that the Bush administration funded two big transportation projects for the Portland metro area: the commuter rail project that is going to run from Wilsonville to Beaverton, and the I-205 light rail that will go from Clackamas Town Center to the eastside Max.

There is a rapidly growing and very compelling body of research, analysis and opinion that shows light rail and commuter rail projects such as these are monumental wastes of money that fail to deliver on any of the promises that they make. Take a look at this website.

Rail is hugely expensive, inflexible, slow, and it makes traffic congestion and pollution worse, not better. Analyze the cost vs. the ridership numbers and it is pretty clear - rail is a horrible investment if your purpose is to move bodies and goods efficiently.

But I have never seen any analysis of the numbers in the pages of the Oregonian. Not once. Maybe there is somehting I am not recalling, but I don't think so. So, consider the contrast: the Oregonian WANTS a new tax, so they ask the ODE for class size numbers and concoct a "news" story analyzing those numbers to show that we have high class sizes.

Think the Oregonian would ever do a similar analysis of light rail numbers? No interest.

But it is worse than just having an agenda. The real damage of the monopoly newspaper is that it is able to dismiss the other side of the debate. The Oregonian NEVER covers any of the growing body of research that critiques light rail. There's never a news article about the latest study that shows light rail fails to deliver.

In fact, the Oregonian dismisses light rail critics with a derisive snort. This from today's editorial:

"...expect to hear the usual loud chorus of negativity from opponents of rail transit. It's a favorite punching bag for those who think Oregon can simply pave its way out of transportation gridlock."

And later in the same editorial:

" loved to chirp about the sometimes-empty train cars they saw. "

The subtext here is: "There is no reasonable argument against light rail, and any person who argues against it is not worthy of being taken seriously."

And THAT is the damage caused by a monopoly newspaper. They pretty much have free reign to define the political spectrum as, one the one hand, reasonable progressives who support all the right policies, and on the other, "boo-birds in the chorus of negativity."

Over the long term, this has done trememdous damage to the political culture in Oregon. I hope the advent of new media can bring it back.

PS: Here is something I would like to hear from my governor candidate:

"I don't want the Oregonian's endorsement. I think the Oregonian is part of the problem. They have supported all the things over the years that I stand against - things that have done great harm to this state that I love. Why would I ask the Oregonian to endorse me, when I oppose so much of what they support?"

Wednesday, February 08, 2006

How bureaucrats harrass business - a case study

The Willamette Week reported today that Geoff Thompson might be "breaking the rules" in trying to re-open the View Point Inn after fighting for a decade with various governmental bureaucrats.

The story is a case study in how faceless bureaucrats, probably grinding a personal vendetta, can basically bankrupt small business owners. Here's the story:

Thompson owns this historic bed and breakfast, but Columbia Gorge regulations prohibited him from using it for the purpose it was built. The regs wouldn't allow commercial activities of that sort on his property, which has a great view of the Gorge.

He fought for a decade to finally get the permission to open it up. All he wants to do is employ people, pay taxes, run a business and offer tourists an historic setting for a meal or an overnight stay. After the Gorge Commission finally said OK, now Multnomah County just needs to get the paperwork done to recognize the zoning change.

The usual process: public notification, comment period, etc. Should take a couple months at most, if the County was at all interested in helping business, and not interested in sticking it to a guy who had ruffled some feathers trying to get the permission to make a living.

By rule, the County has nine months to get it done. But Thompson would sure like to be open for high tourist season this summer. Being open this summer literally means hundreds of thousands of dollars of revenue, and after spending a decade fighting, he could use the cash flow.

Is the County going to lift a finger to help him? Expedite the process a little bit so he can open in spring rather than having to wait til the middle of summer when the nine months is up? They claim they are "doing everything they can" but their actions say precisely the opposite.

His target open date is July 1st. The County could help him and move it up if they want, but instead they are just harrassing him further.

What would you do if you wanted to hit the ground running with a July 1 opening for a restaurant/lodge? You might want to make sure you were filled to the brim right away, so you don't lose any more revenue from having your businesses only asset sitting idle. Which means you'd advertise a little and take some advance reservations.

Believe it or not, the County has told him to STOP taking advance reservations! They say doing so is a commercial activity, and his property does not yet have a permit for such commercial activity! I AM NOT MAKING THIS UP!

This is the same Multnomah County that is chronically short of funds, can't even open up a brand new jail, fix bridges or prosecute property crimes. Wouldn't you think they might want to HELP a small business get going, so maybe it would start paying some taxes?

Now he has to go argue it out in front of a land use judge. The County is threatening to fine him $100 a day if he doesn't stop taking reservations!

This is just so ridiculous I don't know where to start. It actually strikes close to home for me. I try to open at least one Arthur Academy Charter School each year. We almost always need to get conditional use permits for our school facilities. We regularly adverstise and take enrollment applications for the schools long before they have all their land use approvals. It's the only way we can do it - it is not easy to convince parents to send their child to your school, and the vast majority of these decisions are made in the spring before the next school year.

If the County's interpretation is correct, that means we'd have to wait until we had all the use permits before marketing the school and enrolling kids, which would severely limit first year enrollment in most cases, and probably cause us to delay opening a year in some cases, which costs a lot of money.

The real question is: why is the County taking this position, and who can we get fired?

It is time to get angry, and make these petty bureaucrats afraid.

Tuesday, February 07, 2006

Saxton makes it official

Last night Ron Saxton made it official.

He launched his campaign with a crowd of several hundred supporters at the Oregon Historical Society. It was quite a festive scene: bright lights, TV cameras, balloons, and a lot of enthusiastic people.

I've been to a lot of these things (and done one of my own), but Ron's was unusual. Typically, it is like pulling teeth to get bodies to a campaign kickoff. The candidate of course wants lots of people, so if the media does show up it looks substantial and credible. But it's not all that easy to get people to show.

Ron had no such problem. There were not only lots of people, but lots of energy in the room. And Ron gave his speech, which left little doubt that he is running to DO something rather than to BE something.

His speech was full of specifics. It wasn't your run of the mill thematic stump speech, full of platitudes and feel-good bromides. He went down the list of state agencies and programs and talked about how he would change them. Privatize anything the private sector can do more cheaply and efficiently than government employees. Specifics: DEQ emmissions testing. He gave others.

Fix PERS. He said it is unconscionable that government agencies such as schools are paying as much as 25% of payroll into the retirement system. Wrap your mind around that! What is YOUR 501k employer contribution? Five percent is about average.

Bring competition to the public schools. I've spoken with Ron at length on this issue, as you might imagine. Ron has a deeper understanding of the school problem and how competition can help fix it than any person I know. He saw the face of the problem during his time on the Portland school board.

Lots of people who have criticised me for endorsing Ron like to attack him for his tenure on the school board. Guess what? Ron pushed for every single charter school that came in front of the board, and at times was the lone "yes" vote.

Did he singlehandedly reform the district? No, a school board member has no power to do that, especially in Portland where his colleagues are hand picked by the teachers union and are the usual stripe of Portland latte leftists.

The Saxton campaign had a great week. Lars endorsed him yesterday, completing the KXL "hat trick," since Jeff Kropf and I had already endorsed him. Lars had previously supported Atkinson, but when Jason took the curious position in support of Bush's guest worker program (which is just amnesty by another name) Lars could no longer support him.

So he threw his considerable weight behind Ron.

The event had a funny, if pathetic sideshow. On the sidewalk in front of the Historical Society lobby were about five protesters, each holding picket signs. They weren't causing a ruckus or anything, just stood there glumfaced holding their signs, which were hand-lettered with magic markers and looked as if they spent all of 30 seconds putting them together.

One sign read: Ron Saxton: Neil Goldschmidt's personal lawyer.

Very nice! That is totally false - Ron was never Goldschmidt's lawyer for anything. It was pretty disappointing - not that protesters would show up with false assertions on their picket signs - that just means that the Saxton campaign matters. Nobody bothers to picket someone who is irrelevant.

No, what was disappointing is how feckless, amateurish and clumsy the protest was. Assuming that the protest was in some plausibly deniable way originated by the Mannix campaign, is that really the best they can do? Hand-lettered smears on picket signs hoping to somehow cast a pall over the festive atmosphere?

All they succeeded in doing is making themselves (and the Mannix campaign, even if it wasn't at all involved, since everyone would naturally assume that it was) look pathetic.

Is that how this campaign is going to play out? Energy and enthusiasm on one side, desperate smears on the other?

If so, I like Ron's chances!

Friday, February 03, 2006

Dave Lister files for city council

The Eastside Guy, Dave Lister, is running against Eric Sten for city council.

He's known as the Eastside Guy because he writes a column for BrainstormNW Magaizine by that name, in which he comments on Portland issues. I've known Dave for several years. He's a business owner - he and a partner run a small software development company that specializes in billing systems for businesses.

Ironically, one of Eric Sten's biggest failures was the mismanagement of converting Portland's water billing system to another software provider. Lister's company develops precisely this kind of software. He wrote a feature length article for Brainstorm about how badly Sten bungled the conversion.)

Which cost the city about $40 million.

Dave Lister is exactly what the city of Portland needs on the council: common sense. A small business perspective. Someone who has signed the front of a paycheck. Someone who understands that incentives drive behavior, and high taxes discourage capital and job formation.

Give the guy a look. I think what you'll find is a plain speaking, refreshing, informed and intelligent person who is motivated not by ambition for a political career, but by changing the political culture of the city that he has spent entire life loving.

Let's give Eric Sten the chance to get the private sector experience he so desparately needs.