Archives: 11/2010

Lame-Duck Menace: The Paycheck Fairness Act

At Compensation Cafe, Stephanie Thomas explores some of the “nonsensical implications” of a misnamed bill that’s a high Obama administration priority in the lame duck session:

Let’s assume that John and Jane have identical characteristics (education, work experience, etc.) except for gender. ABC Company makes offers of employment to John and Jane on the same day, for the same position, for the same starting salary: $45,000. Jane accepts the offer, but John negotiates the salary, and ends up with $50,000. Under the current equal pay laws, there’s no problem; John is earning more because he negotiated and Jane did not. Makes sense, right? Under the Paycheck Fairness Act, ABC Company would be guilty of gender discrimination.

Here’s another example. Assume that Sam and Sally have the same education, work experience, etc., and are both hired by WidgetCo on the same day. WidgetCo sets Sam and Sally’s starting salary at $2,500 more than they were making at their previous job. Sam was earning $37,500 at his previous job, and Sally was earning $36,000; their starting salaries at WidgetCo are $40,000 and $38,500. Seems reasonable, doesn’t it? Under the Paycheck Fairness Act, WidgetCo would be guilty of gender discrimination.

One final example. Assume that Brad and Bridget both work for Alpha Inc., have the same job title, same level of responsibility, etc., and they are both earning $100,000 per year. Brad asks for a 5% raise, but Bridget doesn’t ask for a raise. Brad gets the raise and ends up earning more than Bridget. Again, no problems here, right? Wrong - under the Paycheck Fairness Act, Alpha Inc. would be guilty of gender discrimination.

“Making matters worse, under the new law, damage awards would be uncapped, and class-action procedures loosened. Bring on the trial lawyers,” notes a Chicago Tribune editorial. For more on this very bad bill, check out the papers and presentations from a panel last week put on by our friends at the Hudson Institute. Earlier here and, at Overlawyered, here, here, etc.

The Moral Equivalent of Monarchy

Matt Yglesias plumps for monarchy, based on – what else? – human nature:

[I]t seems inevitable in any country for some individual to end up serving the functional role of the king. Humans are hierarchical primates by nature and have a kind of fascination with power and dignity. This is somewhat inevitable, but it also cuts against the grain of a democracy. And under constitutional monarchy, you can mitigate the harm posed by displacing the mystique of power onto the powerless monarch. We follow the royal family with fascination, they participate in weird ceremonies, they have dignity, they symbolize the nation, we all talk about them respectfully, etc. Meanwhile, the Prime Minister gets to be just another politician. Admittedly the one who’s most important at this given moment in time. But that’s no reason not to jeer at him during Question Time. He’s not the symbol of the nation who’s owed deference. He’s a servant of the people and people who feel he’s serving them poorly should say so.

Dignity and power?

Dignity, sure. I admit, I am fascinated by dignity. I delight when formerly servile people regain it. I love, without apology, the dignity of being an American, under which our “weird ceremonies” happen chiefly of our own volition. I love the dignity of the immigrant shopkeeper – she might not have much, but what she has is hers, she’s worked for it, and she knows it. I love the dignity of a good book, a well-baked loaf of bread, or Dvořák’s Ninth. I love the dignity of suburbia, and of bohemia. I’ve known them both, and what they have in common is this – large stretches of time in which you are left to your own devices. That’s dignity.

But power? In a wide swath all around it, power destroys dignity. That’s not just an unfortunate side-effect. That’s the whole point of power. That’s what it does. It’s telling that Yglesias manages to praise power unstintingly – but only among a group of preposterous twits who’ve long ago stopped wielding any significant power themselves. Except, evidently, the power to fascinate the power-hungry.

Is it human nature to love power? Maybe for some. Indeed, I could hardly explain otherwise the continued presence of coercion in the world. Thinkers far greater than I have come to the same conclusion, so let’s just leave it at that.

Not everyone, though, is quite so keen on power. As Ravi Iyer, Jonathan Haidt, et al. have recently suggested, one self-identified group – libertarians – has a high degree of skepticism regarding authority, tradition, and conformity. Self-described libertarians place a high value on individualism, personal choice, and reason, even sometimes at the expense of other values, like emotion or community. In short, when we see a king, we don’t say “Wow!” We say – “Why?”

Even if you’re not a libertarian, it’s probably a good thing that someone is out there asking that question for you. That’s particularly so if Yglesias is right, and if most humans are hard-wired to idolize. Even a few false idols can be pretty costly. Having people around who encourage us to see them can do us a lot of good in the long run.

As I’m sure I don’t have to point out, the mistrust of kings, of those so-called gods on earth, runs deep in the American tradition. As Thomas Jefferson put it:

[T]he mass of mankind has not been born with saddles on their backs, nor a favored few booted and spurred, ready to ride them legitimately, by the grace of god.

Modern science is increasingly finding that humans aren’t equal in a positive, descriptive sense. You and I are emphatically and obviously quite different, from the genetic level on up. Modern political experiments have shown that we should not try to make ourselves materially equal by rearranging society, either. The results of all such projects have been atrocities.

But claims about human equality really do shine in one area. They say, as Jefferson did, that your notions of the superior man are probably delusions, and that we should be aware of our embarrassing tendency toward them. Personally, I’d no more bow to the queen of England than I would to the doorman at the Ritz-Carlton. They both have fancy clothes, and a retinue of servants attending them, and time-honored traditions that they uphold. Bully for them. But also for our power to place them, at least once in a while, on the same level.

Future Teachers Most Likely to Cheat in College?

The current issue of the Chronicle of Higher Education features a story by a professional ghost-writer of college student papers. One passage in particular caught my eye:

it’s hard to determine which course of study is most infested with cheating. But I’d say education is the worst. I’ve written papers for students in elementary-education programs, special-education majors, and ESL-training courses. I’ve written lesson plans for aspiring high-school teachers, and I’ve synthesized reports from notes that customers have taken during classroom observations. I’ve written essays for those studying to become school administrators, and I’ve completed theses for those on course to become principals….

This is of course the weakest of anecdotal evidence and no one should take it as gospel (particularly the seminary students who apparently also contract out papers to the same ghost writer). But let’s say, for the sake of argument, that it’s true—that ed school students are the most common consumers of fraudulent papers. How could we explain that?

There’s no reason to believe that future teachers are any more ethically deficient than their peers in other fields, so that’s an unlikely explanation. Could it be that ed school students are less well prepared for college? Certainly it’s an uncomfortable truth that the SAT scores of those applying to ed school (both undergraduate and graduate) consistently rank below those of applicants to most other college programs. But it is also widely acknowledged that the academic standards of ed schools are commensurately below those of other college disciplines, so future teachers shouldn’t have any more difficulty completing their assignments than students in other fields.

But there is one way in which education is fundamentally different from every other college discipline: it’s the only one whose students will go on to work in a government monopoly industry. Not only is the hiring process of public school systems less focused on identifying candidates’ academic excellence, there is evidence that it is actively hostile to excellence (e.g., that principals are less likely to hire top-scoring candidates from elite colleges than candidates from less rarefied institutions). What’s more, compensation for public school teachers is generally a function of time served (over which teachers have no control) and degrees conferred (over which they do). This has created demand on the part of teachers for graduate degrees—not necessarily for the acquisition of advanced skills, but for the diplomas themselves, which  amount to valuable cash prizes.

Again, we can’t know from a single ghost-writer’s experience if ed school students systematically cheat more in college than their peers in other fields, but we certainly shouldn’t be surprised if they do. We’ve organized education in this country in a way that decouples skill and performance from compensation, and instead couples compensation to the mere trappings of higher learning (e.g., masters degrees). We’ve created a powerful financial incentive for existing and future teachers to cheat. Maybe not such a good idea.

Hat tip: Bill Evers.

Getting TSA to Look in the Mirror

If you travel by plane, you either hate the Transportation Security Administration, or will soon do so.  The TSA has unveiled a new security pat down which is about as close to a strip-search as you can get while still wearing clothes.

With a metal knee replacement I invariably set off the TSA metal detectors.  I can avoid a pat down by using the fancy new imaging machine where it is available.  But this machine images everything on the body, and that means everything.  The explicit nature of the pictures is reflected in the nick-name which I’m told TSA employees have applied to the machine.  Let your mind wander, but imagine a crude term about measuring the male genitalia.

The other alternative is to accept the pat down.  Until recently TSA employees used a hand-held wand to check for metal and did a limited hand check.  The new system eschews the wand and replaces it with searching hands climbing up the inside of the thighs – all the way up.

The only saving grace for me is when veterans do the check.  When they realize that I have an implant and go through the check weekly and sometimes daily, most of them take a more relaxed approach.  But the newer, and often more determined to do everything by the book, employees really mean it when they announce that they are about to check my thigh.

Like never before, the new procedure has set off public protests.  And anger could increase at Thanksgiving, when so many more people will be flying.  No one wants airplanes to be hijacked, but few people believe that the current system does much to safeguard us.  At least, much of what is done today looks to be “Security Theater,” meant to reassure rather than actually do improve security.

One possible alternative would be for airports to take back control of the process.  Reports the Washington Examiner:

[Rep. John] Mica, one of the authors of the original TSA bill, has recently written to the heads of more than 150 airports nationwide suggesting they opt out of TSA screening. “When the TSA was established, it was never envisioned that it would become a huge, unwieldy bureaucracy which was soon to grow to 67,000 employees,” Mica writes. “As TSA has grown larger, more impersonal, and administratively top-heavy, I believe it is important that airports across the country consider utilizing the opt-out provision provided by law.”

Private security personnel obviously could mimic the TSA’s worst practices.  But if there were multiple actors providing security services competition would encourage airports to look for improved techniques which would cost less, waste less time, and create less embarrassment.

The vast majority of the TSA personnel with whom I deal are polite and friendly.  Most actually are working, though it’s not clear their activities always benefit the public.  But they all seem to lack a sense of irony.

I enjoy wearing my Cato t-shirt with the P.J. O’Rourke quote about giving to power to government being like giving car keys and whiskey to a teenage boy.  I receive a lot of admiring comments on it–including from TSA employees.  Today it happened again, at Washington Dulles.  As I was waiting for my regular TSA-provided fondling experience down below.

It’s no knock on the individual employees to point out that the TSA as an agency is a perfect example of what P.J. was warning against.  Give Barack Obama & Co. this power and we are likely to lose our money, freedom, and dignity.

I’d like to believe we’ve entered a new political era in Washington, but I’ve worked through too many “new eras” to believe that this one is really new.  But a popular uprising about TSA de facto strip searches would be a good start.

Earmark Donor States

I have an op-ed in Politico about “earmark donor states.” It’s a term I invented to highlight a rarely discussed side of earmarking: public choice economics.

As public choice theory would predict, the earmarking process operates under a system of concentrated benefits and diffuse costs.  Based on an analysis of 2009 data, 16 states receive a disproportionately large percentage of the earmark pie and can be labeled “earmark beneficiary” states. The other 34 states and the District of Columbia are “earmark donors,” as they receive fewer earmark dollars than they proportionally should.

To determine which states win and lose in the earmarking game, I looked at the share of taxes each state sends to Washington and compared it to the share of earmarks that each state receives. 

In the op-ed, I use Colorado, one of the biggest earmark donor states, as an example:

Colorado taxpayers contribute about 1.6 percent of total federal taxes, but they receive just over two-tenths of one percent of earmarked funds—proportionally speaking, less than a third of what it should be getting. This works out to more than $200 million dollars that Coloradans are spending to subsidize earmarks in other states – hardly chump change. So while Colorado’s representatives might pat themselves on the back for securing funding for an occasional municipal bus or bioenergy plant, their earmarking rivals in other states like West Virginia and Hawaii obtain funding for larger and more expensive projects and send the bill to the Centennial State.

Below is a table with additional data indicating which states are earmark donors and recipients.  The key column is the “earmark ratio.” The lower the figure, the smaller a state’s share of earmarks is relative to the amount of taxes its residents and businesses pay.  A state with an earmark ratio below 100% is a donor state.  As you can see, Utah is the first state on the table that receives slightly more than its proportional share of earmark funds. Mississippi, the last state on the list, remarkably receives 11 times more than its proportional share. 

 Also note that the most populous states in the country are earmark donors – almost 90 percent of Americans live in earmark donor states.

State TOTAL FEDERAL TAXES % of Total Taxes Proportional Share of Earmarks (millions of $) Earmarks Received (millions of $) % of Total Earmarks Earmark Ratio % of Delegation on Approps
New York 193,446,916 8.2% 1642.75 418.71 2.1% 25.5% 12.9%
Illinois 116,130,852 5.0% 986.18 252.19 1.3% 25.6% 14.3%
Nebraska 16,200,400 0.7% 137.57 41.53 0.2% 30.2% 20.0%
Colorado 38,484,608 1.6% 326.81 106.15 0.5% 32.5% 11.1%
Connecticut 44,684,141 1.9% 379.46 124.83 0.6% 32.9% 14.3%
New Jersey 103,548,696 4.4% 879.34 319.06 1.6% 36.3% 13.3%
Arizona 32,372,226 1.4% 274.91 102.00 0.5% 37.1% 10.0%
Ohio 103,638,344 4.4% 880.10 345.98 1.7% 39.3% 25.0%
Georgia 59,486,251 2.5% 505.16 203.94 1.0% 40.4% 13.3%
Minnesota 67,646,589 2.9% 574.46 233.10 1.2% 40.6% 10.0%
Texas 200,521,512 8.5% 1702.83 695.59 3.5% 40.8% 17.6%
California 264,868,391 11.3% 2249.27 971.05 4.9% 43.2% 14.5%
Indiana 42,108,854 1.8% 357.59 156.44 0.8% 43.7% 9.1%
Massachusetts 70,108,079 3.0% 595.36 265.75 1.3% 44.6% 8.3%
Wisconsin 38,642,363 1.6% 328.15 171.34 0.9% 52.2% 20.0%
North
Carolina
63,348,252 2.7% 537.95 288.11 1.4% 53.6% 6.7%
Pennsylvania 106,613,979 4.5% 905.37 488.57 2.5% 54.0% 14.3%
Tennessee 44,047,939 1.9% 374.06 208.02 1.0% 55.6% 27.3%
Michigan 56,050,689 2.4% 475.98 279.99 1.4% 58.8% 5.9%
Florida 110,156,809 4.7% 935.45 556.55 2.8% 59.5% 14.8%
Delaware 13,683,353 0.6% 116.20 69.38 0.3% 59.7% 0.0%
Oklahoma 24,297,410 1.0% 206.33 123.91 0.6% 60.1% 14.3%
Oregon 21,736,643 0.9% 184.59 111.85 0.6% 60.6% 0.0%
Virginia 58,598,281 2.5% 497.62 312.80 1.6% 62.9% 15.4%
Wyoming 3,833,691 0.2% 32.56 21.33 0.1% 65.5% 0.0%
District of
Columbia
19,487,689 0.8% 165.49 111.59 0.6% 67.4% 0.0%
Missouri 44,310,000 1.9% 376.28 256.45 1.3% 68.2% 18.2%
Washington 48,587,720 2.1% 412.61 287.22 1.4% 69.6% 18.2%
Maryland 44,484,984 1.9% 377.77 304.09 1.5% 80.5% 10.0%
Kansas 20,374,354 0.9% 173.02 141.68 0.7% 81.9% 33.3%
New Hampshire 8,739,838 0.4% 74.22 62.40 0.3% 84.1% 25.0%
Louisiana 34,882,848 1.5% 296.23 272.57 1.4% 92.0% 22.2%
Arkansas 25,727,268 1.1% 218.48 202.37 1.0% 92.6% 33.3%
Rhode Island 10,909,205 0.5% 92.64 87.58 0.4% 94.5% 50.0%
South Carolina 17,806,603 0.8% 151.21 145.36 0.7% 96.1% 0.0%
Utah 14,270,839 0.6% 121.19 131.18 0.7% 108.2% 20.0%
Idaho 6,859,632 0.3% 58.25 63.27 0.3% 108.6% 25.0%
Nevada 13,770,576 0.6% 116.94 129.88 0.7% 111.1% 0.0%
Kentucky 23,313,696 1.0% 197.98 248.74 1.2% 125.6% 37.5%
Maine 6,105,799 0.3% 51.85 73.04 0.4% 140.9% 25.0%
Iowa 17,614,407 0.8% 149.58 336.88 1.7% 225.2% 28.6%
Alabama 20,093,422 0.9% 170.63 424.18 2.1% 248.6% 33.3%
Vermont 3,366,627 0.1% 28.59 81.97 0.4% 286.7% 33.3%
Montana 4,136,011 0.2% 35.12 101.02 0.5% 287.6% 66.7%
South Dakota 4,888,826 0.2% 41.52 135.48 0.7% 326.3% 33.3%
New Mexico 8,188,815 0.3% 69.54 235.09 1.2% 338.1% 0.0%
North Dakota 4,115,943 0.2% 34.95 136.79 0.7% 391.3% 33.3%
Hawaii 6,747,592 0.3% 57.30 270.74 1.4% 472.5% 25.0%
Alaska 4,670,157 0.2% 39.66 227.81 1.1% 574.4% 33.3%
West Virginia 6,332,264 0.3% 53.77 336.92 1.7% 626.6% 20.0%
Mississippi 9,603,121 0.4% 81.55 900.57 4.5% 1104.3% 16.7%

Source:
IRS: http://www.irs.gov/taxstats/article/0„id=206488,00.html
Taxpayers for Common Sense
Author’s calculations

Suspecting that the disparity between states is a product of political clout, I calculated the percentage of each state’s congressional delegation serving on the House and Senate Appropriations Committees.  The graph below shows the correlation between this metric and the earmark ratio of each state. The closely tracking trend lines suggest there is a connection between a state’s representation on the Appropriations Committees and earmarks. The correlation between these figures is 0.264, which is especially strong when you consider that earmarking proponents often argue that the process is entirely merit-driven and apolitical.  To be sure, this is a very rough indicator – earmark recipient states like Alaska and West Virginia were long represented by earmark champions Ted Stevens and Robert Byrd, neither of whom is included in the figure.  Also, it should be noted that Hawaii and Mississippi are represented by Daniel Inouye and Thad Cochran who, respectively, are the chairman and ranking Republican on the Senate Appropriations Committee.  As such, they carry significantly more clout than the average appropriator. Additionally, Nevada’s status as an earmark beneficiary state despite its lack of appropriators might be explained by Senator Harry Reid’s influence as Senate Majority Leader.

I also evaluated the correlation between earmark ratios and median income. Based on the arguments of earmark proponents, one would expect a very strong negative correlation here as earmarking is intended to direct federal funds to needy, underserved parts of the country.  The strength of that correlation is -0.255, which is slightly weaker than the political-based correlation.  This suggests that in the earmarking process, political power is more important than financial need.

The connection between political power and earmarking prowess is hardly surprising. More startling is the disparity between the shortchanged earmark donor states and the earmark beneficiary states. Perhaps politicians from donor states are unaware of the extent to which their constituents subsidize out-of-state projects. More likely, most congressmen are successfully pulling off a political sleight of hand – trumpeting their occasional earmark project and hoping it distracts their constituents from the disproportionately large number of earmarks in other states.

After all, the vast majority of Americans would be far better off if Congress stopped earmarking and removed itself from spending decisions that should be made by local governments and private entities.  

I must acknowledge several of my colleagues who helped with this analysis – many thanks to Kurt Couchman and Andrew Mast.

‘Strip-or-Grope’ vs. Risk Management

In a humbly-toned USA Today opinion piece yesterday, Secretary of Homeland Security Janet Napolitano asked for the public’s cooperation with airline security measures the Transportation Security Administration has recently implemented. The TSA has come up with an invasive pairing: ”Advanced Imaging Technology,” also known as “strip-search machines” and, for those refusing, “enhanced” pat-downs which explore areas of the body typically reserved for one’s spouse or doctor.

Anecdotal reports suggest that the machines are being used to ogle women, and we are seeing disturbing images and videos of children being handled by strangers online. The public is increasingly agitated by the TSA’s latest amendment to the air travel ordeal, and a “National Opt-Out Day” is slated for next Wednesday, the biggest travel day of the year.

Twice, Secretary Napolitano notes that these measures are “risk-based” or “driven by … risk.” But has the Department of Homeland Security conducted the necessary risk management studies to validate these programs? A March 2010 Government Accountability Office report says:

[I]t remains unclear whether the AIT would have detected the weapon used in the December 2009 incident based on the preliminary information GAO has received… . In October 2009, GAO also recommended that TSA complete cost-benefit analyses for new passenger screening technologies. While TSA conducted a life-cycle cost estimate and an alternatives analysis for the AIT, it reported that it has not conducted a cost-benefit analysis of the original deployment strategy or the revised AIT deployment strategy, which proposes a more than twofold increase in the number of machines to be procured.

I’ve seen no documentation that the strip-search machines, the invasive pat-downs, or their combination have been subjected to any thorough risk analysis. The DHS has mouthed risk terminology for years now, but evidence is scant that it has ever subjected itself to such rigor.

Risk Management

A formal risk management effort will generally begin with an examination of the thing or process being protected. This is often called “asset characterization.” In airline security, the goal is fairly simple: ensuring that air passengers arrive safely at their destinations. Specifically, ensuring that nobody successfully brings down a plane.

The next step in risk management is to identify and assess risks, often called “risk characterization” or “risk assessment.” The vocabulary of risk assessment is not settled, but there are a few key concepts that go into it:

  • Vulnerability is weakness or exposure that could prevent an objective from being reached. Vulnerabilities are common, and having a vulnerability does not damn an enterprise. The importance of vulnerabilities depend on other factors.
  • Threat is some kind of actor or entity that might prevent an objective from being reached. When the threat is a conscious actor, we say that it “exploits” a vulnerability. When the threat is some environmental or physical force, it is often called a “hazard.” As with vulnerability, the existence of a threat is not significant in and of itself. A threat’s importance and contribution to risk turns on a number of factors.
  • Likelihood is the chance that a vulnerability left open to a threat will materialize as an unwanted event or development that frustrates the safety, soundness, or security objective. Knowing the likelihood that a threat will materialize is part of what allows risk managers to apportion their responses.
  • Consequence is the significance of loss or impediment to objectives should the threat materialize. Consequences can range from very low to very high. As with likelihood, gauging consequence allows risk managers to focus on the most significant risks.

Analyzing vulnerabilities and threats permits risk managers to make rough calculations about likelihood and consequence. This process will float the most significant risks to the surface. Though these factors are often difficult to measure, a simple formula guides risk assessment:

Likelihood x Consequence = Risk

Events with a high likelihood and consequence should be addressed first, and with the most assets. Those are the highest risks.

The most common error I see in risk management is the propensity to attack vulnerabilities rather than risks. A bomber’s attempt to take down a plane by concealing explosives in his undergarments last year exposed a vulnerability. It is possible to sneak a small quantity of explosive through conventional security systems, though not necessarily the needed detonator and not necessarily enough explosive material to take down a plane.

But this says nothing about the likelihood of this happening again—or of being successful. In hundreds of millions of enplanements each year, this attack has manifested itself once. And it failed. The TSA effort is going after a vulnerability—of that there is no doubt—but it is arguable whether or not it is addressing a significant risk.

After risk assessment, the next step in risk management is choosing responses.

Though the concepts and terminology are not settled in this area either, there are four general ways to respond to risk:

  • Acceptance – Acceptance of a threat is a rational alternative that is often chosen when the threat has low probability, low consequence, or both.
  • Prevention – Prevention is the alteration of the target or its circumstances to diminish the risk of the bad thing happening.
  • Interdiction – Interdiction is any confrontation with, or influence exerted on, a threat to eliminate or limit its movement toward causing harm.
  • Mitigation – Mitigation is preparation so that, in the event of the bad thing happening, its consequences are reduced.

In its operation, the strip-search/grope combo is an interdiction against any who may try to carry dangerous articles on planes. As to the air transportation system, it might also be conceived of as a preventive measure.

The next analytical lens to look through is benefit-cost analysis, or trade-offs. The goal is to allay risk in a cost-effective way, spending the least amount of money, and incurring the least costs overall, per unit of benefit.

Security Benefits

Security systems involve difficult and complex balancing among many different interests and values. The easiest, by far, is comparing the dollar costs of security measures against the dollar benefits. This is analysis that GAO says the TSA has not done.

But if it were done, on the benefit side of the equation, you have that it reveals most articles a person might try to sneak onto a plane. There are at least two important limitations on the benefit. First, there is an open question as to whether the strip-search machine would successfully detect lower-density material like the explosive PETN. If it doesn’t, it’s utility against underpants bombing relies on potential attackers’ ignorance of that to deter their attempts. Second, the benefit of the strip-search/grope is not what it achieves from a basline of zero, but the marginal security improvement in provides over alternatives like the status quo magnetometer and random pat-downs.

How do you reduce security benefit to something measurable? It’s difficult, but I’ve been mulling a methodology for valuing security against rare attacks in which you assume a motivated attacker that would eventually succeed. By approximating the amount of damage the attack might do and how long it would take to defeat the security measure, one can roughly estimate its value.

Say, for example, that a particular attack might cause one million dollars in damage. Delaying it for a year is worth $50,000 at a 5% interest rate. Delaying for a month an attack that would cause $10 billion in damage is worth about $42 million. It is best to assume that any major attack will happen only once, as it will produce responses that prevent it happening twice. (The 9/11 “commandeering” attack on air travel is an instructive example. By late morning on September 11, 2001, passengers and crew recognized that cooperation with hijackers contributed to the deadliness of attacks rather than saving their lives. They spontaneously changed the security practice to meet the new threat, and the 9/11 attacks permanently changed the posture of air passengers toward hijackers, along with hardened cockpit doors bringing the chance of another commandeering attack on air travel very close to nil.)

Of course, one must consider “risk transfer.” That’s the shifting of risks from one target to another—say, from planes to buildings. (An organization like the Department of Homeland Security would regard this as lowering the benefit of a security measure, while an airline would be indifferent to it—unless it owned the building…) There is also the creation of new risks, such as the possible health effects of the strip-search machines. Which brings us to the cost side of the ledger….

Costs

On the cost side of the ledger, the easy stuff to measure includes the hundreds of millions or billions of dollars that must be spent on strip-search machines themselves. As much or more money will be spent on an ongoing basis to operate the machines. My observation is that it takes three people to operate one strip-search machine: a guide, an analyst to review the image, and a person to do the secondary pat-down which occurs regularly (though it would occur less over time). On a nationwide scale, this is hundreds of millions of dollars per year spent on TSA employees.

The value of travelers’ time is also important. This hasn’t received much discussion, but as more and more strip-search machines come into use, there will be more discussion of how much time they consume compared to magnetometers.

Reviewing tape of TSA checkpoints reveals that passing through the machines takes at least seven seconds per passenger. Variations in the time it takes to traverse the security checkpoint require all travelers to increase the amount of time they spend at the airport as a cushion against the risk of missing flights, which can cost many hours per incident. If each of 350 million trips in a year results in an additional minute at the airport to accommodate the vagaries of the strip/grope, five to six million person hours at the airport will be wasted, a cost of $145 million per year if we value travelers’ time at  $25 per hour.

It is more difficult is to balance interests like privacy and dignity against security benefits. A CBS News poll released yesterday says that four out of five Americans support the use of “ ‘full-body’ digital x-ray machines to electronically screen passengers.”

It’s an antiseptic description that strangely emphasizes computing. (X-rays are neither digital nor electronic, though the data the x-ray machines collect is digital and its processing is done with electronics.) The question doesn’t capture people’s feelings about images of their own denuded bodies being observed by a government official as a condition of travel. And, of course, it doesn’t capture feelings about the intimate pat-down alternative.

The amount of public reporting and discussion suggests that public opinion is not solidly on the side of the strip/grope. A hearing in the Senate tomorrow is also evidence that the security procedures do not comport with the American people’s rough judgment that the costs of these security measures are justified by their benefits.

My own view is that the strip/grope is security excess. If I had my way, I would choose the airlines and airports that do not go to this extreme. I do not get to have my way, and neither do you if you prefer a different security/privacy mix, because we all must use the same security system. That’s why I wrote five years ago that the TSA should be abolished and responsibility for security restored to airlines and airports. Their experimentation could blend security with privacy, convenience, and comfort, improving the travel experience overall while restoring liberty to American travelers.

Ban Spending Earmarks, But Not Tariff Cuts

Republican leaders in Congress announced Monday that they are all on board to ban spending “earmarks” when the newly elected Congress convenes in January. That is all to the good. While not a large share of the federal budget, the designation of tax dollars to fund specific pet projects in member districts has come to symbolize out-of-control spending in Washington.

Those same leaders should clarify that the earmark ban applies only to spending projects—not to the kind of tariff suspensions including in a recent miscellaneous tariff bill.

The U.S. Manufacturing Enhancement Act approved by Congress in July suspended tariffs on hundreds of imported items of special interest to U.S. manufacturers. House Republican leaders made the mistake earlier this year of including such tariff suspensions in an earmark ban they announced in March.

The overly broad definition of an earmark boxed the leadership into opposing a perfectly sensible trade bill. Despite the half-hearted opposition of the GOP leadership, the U.S. Manufacturing Enhancement Act passed overwhelmingly in the House on July 21, by a margin of 378-43, with Republicans supporting it by a 3-1 margin.

Most members of Congress already understood what the Cato Institute pointed out in a September 2010 study recommending reform of future miscellaneous tariff bills—that tariff cuts are not the same as spending earmarks. Here is what I wrote in the study about the difference between tariff cuts and the kind of spending earmarks that has angered voters:

Spending-bill earmarks distribute tax dollars not for any public purpose authorized under the U.S. Constitution, but rather to benefit a certain special interest or a specific city or district. They grant favors to a small group of beneficiaries at the public’s expense. In contrast, a tariff suspension repeals a narrow tax that falls disproportionately and unfairly on a small group of producers. Instead of granting a favor at the public’s expense, a tariff suspension relieves individual producers of a burden that falls on them and nobody else. Unlike a spending earmark, a tariff suspension creates no new claim on public resources. It does not expand the scope or size of government.

Including tariff suspensions in the moratorium is not a matter of curbing the power of lobbyists. There is a world of difference between lobbying for a $500,000 government grant for a project with narrow benefits, and lobbying to remove a $500,000 tax bill that only a handful of enterprises are required to pay. The former seeks an expansion of the government’s power and influence, the latter a reduction. Republicans who rightly complain about the growth of the federal government should be the first to embrace the suspension and repeal of hundreds of nuisance taxes distorting the economy and burdening American producers.

The new Congress may soon consider another miscellaneous tariff bill to further reduce discriminatory tariffs that impose real costs on U.S. companies trying to compete in global markets. Republican leaders should join with their Democratic counterparts in the new Congress to clarify that suspending or repealing unfair tariffs should not be banned but should be vigorously pursued.