Month: April 2011

Evan Osnos, on a whirlwind tour of China, glimpses the future:

Most countries begin to send large numbers of tourists overseas only when the average citizen has a disposable income of five thousand dollars. But China—where urban residents are at barely half that level—has made travel affordable by booking tickets in bulk and bargaining mercilessly for hotels in distant suburbs. Last year, more than fifty-seven million Chinese people went abroad, ranking China third worldwide in international tourism. The World Tourism Organization predicts that before the end of the decade China will double that.

The calls of the wild:

The video's caption:

I was studying abroad in NZ when my friends found out that I can do animal noises. So, they had me do them in front of a video camera.

There are two possible responses to the news that the House has put its votes on the line and endorsed the Ryan plan for the budget. It behooves me to note that I doubted they would ever get  this specific, given their refusal to raise any of these specifics in the election campaign. You can gloat that the GOP has committed political suicide by essentially ending Medicare and Medicaid as   we know them, but that is not a substantive response. They deserve political props for nailing this proposal to the door of the White House.

But the substantive criticism is still salient. It is that simply shifting Medicare to private insurance plans with subsidies that will mean progressively less and less healthcare for seniors does not really bring down healthcare costs – just shifts their responsibility away from the federal government. The likelihood that the insurance companies will actually want this new more vulnerable population without at some point, begging the government to provide more resources is … well, slim. But since the GOP proposal is simply indifferent to whether people have healthcare or not (they effectively withdraw coverage for all those covered by the ACA), this is a feature, not a bug.

The much bigger problem with the GOP plan is its view of taxes. Even though we have historically low income tax rates for high-earning individuals, even though revenues have collapsed in the recession, even though we have empirically discovered that big tax cuts have not generated more economic growth, the GOP still insists on reforming taxes not to raise revenue but to reduce it. This is where the whole thing gets surreal. The very Laffer untruth that sank America into debt in the early 1990s s one still being peddled against all the relevant evidence to guide us through the next few decades. In my view, if we maintain that ideological fantasy, the US will become a banana republic in short order.

Bruce Bartlett explains:

[R]evenues were 20.6 percent of GDP in 2000 and 18.5 percent of GDP in 2007, at the peak of the business cycle before the recession reduced them to 14.9 percent of GDP, where they have been for the last two years. (The postwar average is about 18.5 percent of GDP.) Without the Bush tax cuts – and those added by Obama – revenues would likely be more like 17.5 percent of GDP, which is where they were at the trough of the last three recessions.

If revenues had been 2 percent of GDP higher over the last 10 years, the federal debt would be about $2.5 trillion smaller. Instead of having a debt of about 60 percent of GDP last year, it would have been about 44 percent. And that doesn’t take into account all the interest that would have been saved that now adds about $60 billion to the deficit annually. Together, higher revenues and lower interest spending would have reduced last year’s deficit by one-third.

One third.

"Storm," written and performed by Tim Minchin:

A reader writes:

Your reader claimed, "Fuel taxes only pay for a part of the costs of the roads that the buses use – the amount is debatable but it's under 50%." That uneducated guess of 50% is wrong. Gasoline taxes subsidize other modes of travel. Here (PDF) is a 2004 Department of Transportation study that outlines how users of the highway system paid significantly greater to the Treasury than their cost during the 1994-2000 period studied. Of course, all other transit methods were the net beneficiaries. Also, highways are a real public good, as your bus story showed. Consider that:

Recently the DOT examined net federal subsidies from 1990 to 2002 and found that highways and transit are worlds apart. For every thousand passenger miles, transit got $118 in subsidy. What kind of subsidy did highways get? Negative $2. In other words, highway users paid in more than they got back. Look at total dollar amounts of subsidy and the story is the same. Urban transit drained Uncle Sam's coffers by an average of more than $5 billion per year. Meanwhile, our highway system actually replenished those coffers by more than $7 billion per year.

Update: Another writes:

The DOT report covers only federal spending. I don't have any figures, but using that data alone to dismiss the overall claim that roads are subsidized beyond the revenue of gas taxes is pretty weak.

Update: Another:

I'm glad that a reader pointed out that the 2004 DOT study only covered federal spending, and not state and local funding. Citing a 2003 Brookings Institution study, Transportation Alternatives magazine states that "the gas tax pays for only about a third of the cost of the road system. This has major implications for mass transit funding, which is so often criticized for 'not paying for itself.'"

Update: One more for the uber-wonks:

I'm the reader who originally wrote, "Fuel taxes only pay for a part of the costs of the roads that the buses use – the amount is debatable but it's under 50%," which another reader objected to, but which two updates support. The most direct numbers I'm aware of actually come from the Texas DOT, generally a pro-roads organization. In the summer of 2008, they wrote in a blog post (which has since been taken down, but which was quoted by several transportation-reform organizations):

Until recently, when TxDOT built or expanded a road, no methodology existed to determine the extent to which this work would be paid off through revenues. The Asset Value Index was developed to compare the full 40-year life-cycle costs to the revenues attributable to a given road corridor or section. The shorthand version calculates how much gasoline is consumed on a roadway and how much gas tax revenue that generates.

The Asset Value Index is the ratio of the total expected revenues divided by the total expected costs. If the ratio is 0.60, the road will produce revenues to meet 60 percent of its costs; it would be “paid for” only if the ratio were 1.00, when the revenues met 100 percent of costs. Another way of describing this is to do a “tax gap” analysis, which shows how much the state fuel tax would have to be on that given corridor for the ratio for revenues to match costs.

Applying this methodology revealed that no road pays for itself in gas taxes and fees. For example, in Houston, the 15 miles of SH 99 from I-10 to US 290 will cost $1 billion to build and maintain over its lifetime, while only generating $162 million in gas taxes. That gives a tax gap ratio of .16, which means that the real gas tax rate people would need to pay on this segment of road to completely pay for it would be $2.22 per gallon.

This is just one example, but there is not one road in Texas that pays for itself based on the tax system of today. Some roads pay for about half their true cost, but most roads we have analyzed pay for considerably less.

Update: One more for the non-wonks:

Your reader claims that "highways are a real public good, as your bus story showed." This is a common claim, but totally false. Roads are not public goods. A public good is both non-rival and non-excludable. Non-rival means that one person's use does not come at the expense of another person's use. Anyone who's ever driven during rush hour can tell you that roads are definitely not non-rival goods. Non-excludable means that people can't be prevented from using it. This is clearly not true of roads, as the existence of toll roads and toll highways can attest.

It's more accurate to say that highways are publicly provided goods.

Wiki examples of public goods:

defense and law enforcement (including the system of property rights), public fireworks, lighthouses, clean air and other environmental goods, and information goods, such as software development, authorship, and invention.

I’m getting a little ahead of myself, clutching my newly minted green card, but hey. Why not? Although I tend to agree with Allahpundit. The pitch is a little over-wrought:

Watch the full episode. See more Need To Know.

Better-written online reviews sell more products. One company hired Amazon's Mechanical Turk to fix errors in online reviews and reported higher sales. Panos Ipeirotis defends the scheme:

Ethical? I would say yes. Notice that they are not fixing the polarity or the content of the reviews. They just change the language to be correct and error-free. I can see the counter-argument that the writing style allows us to judge if the review is serious or not. So, artificially improving the writing style may be considered as interference with the perceived objectivity of the user-generated reviews.

But is it ingenious? Yes! It is one of these solutions that is sitting in front of you but you just cannot see it. And this is what makes it ingenious.

Robert Root-Bernstein highlights some of the more beautiful examples:

[T]he computer chips that run virtually all our devices today are made using a combination of three classic artistic inventions: etching, silk screen printing, and photolithography. Data from NASA and NSA satellites is enhanced using artistic techniques such as chiaroscuro (a Renaissance invention) and false coloring (the Fauvists) to increase the contrast so it's easier to perceive the important information.

(Photo: Sunspot Loops in Ultraviolet via NASA and the TRACE Project)

Andrew Exum won't be signing up to rebuild Libya:

On the one hand, I do not feel the United States should be anywhere near the stabilization operations and reconstruction that must follow the end of the Gadhafi regime — this is a job better left for the states of Europe and the Arabic-speaking world, and most especially relatively disinterested international organizations like the World Bank and other U.N. bodies. On the other hand, though, the United States can very much help the rest of the international community begin to think through what "Phase IV" in Libya looks like. Specifically, the Obama Administration can begin by assembling an outside group of experts in both Libya and stabilization operations to sit down in a room together for a week and help the administration to think through issues related to state formation in post-Gadhafi Libya.