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February 4, 2013 8:52AM

Rearranging the Park Benches

Our cities are in trouble. Most have huge unfunded pension and health-care obligations. Their infrastructure is old and so poorly maintained that it can't power a football stadium for the full length of a game. Their schools have significantly lower high-school graduation rates than the suburbs, even after accounting for differences in incomes. Housing in many cities is unaffordable, roads are congested, and jobs are fleeing, even in supposedly urban industries such as high tech and finance.

Urban planner Richard Florida has a solution: President Obama should create a new federal Department of Cities. That's right up there with rearranging the benches at Battery Park before Superstorm Sandy hits.

Like many planners, Florida believes problems can be solved from the top down. He is famous for urging cities to adopt policies that make housing unaffordable, forcing poor and moderate-income people out, thus increasing average incomes and making it look like the cities have attracted high-income "creative" people.

Now, relying on pre-recession data, Florida argues that "cities and metros are the engines of our economy," and thus deserve their own cabinet-level department. By the same logic, maybe we should create a Department of Texas and North Dakota, as those two states seem to have been the engines of our economy since 2008. I am sure a federal DoT&ND could do much to muck up the growth of those states that is partly taking place because the state legislatures have so far kept their hands off.

"A new cabinet-level department would see to it that public policy is aligned to cities’ best interests, not stacked against them," argues Florida. And we know that's true because Obama's programs in the energy sector, such as battery and cellulosic ethanol production, have worked so well.

Florida admits we already "have the Department of Housing and Urban Development," but says it is out of date because it was "created to mitigate poverty"--and look how well it did that! Thanks to the department's hard work, the nation's poverty rate declined increased from 14.7 percent in 1966 to 15.1 percent in 2011 (see table A-1, pp. 41-42). Just think what a Department of Cities could do!

Seriously, instead of thinking like central planners, people who care about cities need to understand that change comes from the bottom, not the top. Still, there are some federal policies that could nudge the changes in the right direction.

First, Congress should stop giving cities incentives to build new infrastructure when they can't afford to maintain the infrastructure they have. I am thinking of rail transit, but I am sure other kinds of infrastructure suffer from the same problem: "free" federal money for capital improvements with no stipulations that grant recipients can afford to maintain and operate whatever the grants build. In the long run, the federal government should phase out funding of local infrastructure; during a transition period, federal funding should come in the form of formula grants rather than competitive (read: political) grants.

Second, Congress should encourage cities to get their fiscal houses in order. To prevent cities of the future from demanding federal bailouts, federal funding to cities today should be conditional on cities negotiating new public-employee contracts that are sustainable based on reasonable expectations of future local revenues and investment income. Pension and health-care funds that are either unfunded or depend on unrealistically high rates of investment returns should be renegotiated.

Third, Congress should make federal educational funding conditional upon performance standards. In the long run, the feds should get out of the business of funding local education, but in the meantime, school districts that can't achieve 80 percent high-school graduation rates should be required to create voucher systems that would allow families of all incomes to select alternative schools for their children, whether those alternatives are public schools in other districts (or other parts of the same district) or urban private schools.

Finally, Congress or the Supreme Court should remind state and regional governments that private property rights trump the rights of government planners to control aesthetic values such as historic architecture or scenic views. This would allow the opening of land outside cities in California, Hawaii, Massachusetts, Washington, and other unaffordable states to development so that median housing prices can return to their natural values (see p. 6) of about twice median family incomes, and the costs of commercial, retail, industrial, and other kinds of development will similarly drop.

Florida's idea that cities are so important that they deserve their own department is, on one hand, wishful thinking (note that his data about the importance of cities include "cities and metros," meaning suburbs). On the other hand, if cities truly have a comparative advantage over suburbs and rural areas, as so many urbanophiles claim, why should the federal government unfairly increase (or, more likely, decrease) that advantage by slanting its services to the cities?

Government should provide a level playing ground and let cities, suburbs, and exurbs be what they want to be. This will allow the economy to grow without being undermined by futile and self-defeating attempts to pick winners and losers.

February 1, 2013 4:17PM

California Irrigation Supplies Water to Phoenix

Global Science Report is a weekly feature from the Center for the Study of Science, where we highlight one or two important new items in the scientific literature or the popular media. For broader and more technical perspectives, consult our monthly “Current Wisdom.”

California’s Central Valley is one of the true wonders of the agricultural world.  Prior to settlement, it was grassland in its northerly regions (around Sacramento) and desert at the southern end (Bakersfield).  As a result of irrigation from water stored both in the ground and in the many rivers that drain into it, this 1 percent of the nation’s cropland produces 8 percent of our national agricultural output (by value). That doesn’t count the equally productive but much smaller Salinas Valley, which is likely where your artichokes came from.

John Christy, a fellow-lukewarmer (and a Valley native) who is also state climatologist for Alabama, has published extensively that irrigation has changed the Valley’s climate, resulting in a warming produced not by carbon dioxide but by water vapor, which tends to skew heating into the night.

Everything else being equal, increasing the surface moisture in a hot-as-heck environment (like the Central Valley) will increase atmospheric instability, and, given proper conditions, should result in increased convective (thunderstorm) activity. Add in that prevailing mid-atmospheric winds in this region blow from west to east, and you wind up running the increased water vapor uphill into the Sierras, the Wasatch, and the Rockies. That’s pretty much guaranteed to increase thunderstorm activity.

A newly published study fleshes this out with a computer model, and finds that irrigation in the Central Valley of California not only adds water to the local environment but also alters the regional climate across the Colorado River Basin, increasing summer precipitation by 15 percent and Colorado River flow by nearly 30 percent. Those are big numbers and important ones, given the water needs of some 35 million people from Las Vegas to Phoenix to L.A.

Min-Hiu Lo and James Famiglietti, researchers at the University of California-Irvine, added the 350mm of water annually delivered by irrigation to the 52,000 km2 Central Valley to a climate model developed by the National Center for Atmospheric Research (NCAR). They then compared the climate model output when run with and without the Central Valley irrigation.

Figure 1 shows the difference between the irrigated run and the control run of the model, in terms of summer monthly total precipitation. The blue areas show precipitation increases that result from the Central Valley irrigation. Lo and Famiglietti report that the boost in summer precipitation is between 10% to 20% depending on the location. And better still, the increased precipitation leads to an increase in the summer flow rate of the Colorado River by 28%.

Southwest precipitation increases

 

Figure 1. The difference in monthly total precipitation (mm/month) as calculated by the NCAR climate model between the irrigated and the non-irrigated Central Valley runs (Source: Lo and Famiglietti, 2013).

The mechanism by which this happens is the one hypothesized above, with an additional adjuvitant: the increasing upward motion draws in more moist air that originates from the Gulf of Mexico and causes the summer monsoon. The amount of irrigation water added to the Central Valley turns out to be about equal to the amount of extra water delivered from the enhanced monsoon over the Southwestern U.S. That is double the bang for the buck. What’s not to like?

Probabilities argue that the pressers at Cal-Irvine know which way the political winds blow political $$$, so leave it to them to find the horror:

While the additional water supply can be a good thing, the transport pattern also accelerates the severity of monsoons and other potentially destructive seasonal weather events.

Note to the UCI press:  The water you drank this morning came courtesy of rain and snow in the Rocky Mountains.  More people want more water. It is a fact that summer rainfall will increase (according to these models) because of the water we use to grow food evaporates, moves east, condenses as thunderstorms, and then runs back downhill to your faucet or appears as your salad. Yes, it is a fact that water flowing downhill creates erosion—that’s why there’s the Grand Canyon of the Colorado—but the benefits of enhanced precipitation out West are patently obvious.

Prima facieevidence is the extensive hand-wringing by the U.S. Global Change Research Program (see here for their work and here for our response) over their projection of decreased precipitation over precisely the same region. Their models didn’t include the influence of California irrigation.

And you thought humans only negatively affected the climate!

Now before we go and get overly excited about this good climate news, we’ll point out that the result was found in computer models, rather than demonstrated in the real world. But, if computer climate models are good enough to scare us about climate change, then they ought to be good enough to give us some positive news as well.

Other recently published results suggest something similar. Research led by Yanhong Gao of the University of Washington found that when the resolution of climate models is improved so as to better capture the complex terrain in the southwestern United States, the models produce a lot less future drying and a lot less snow loss from higher elevations. Gao et al. (2011) wrote that apparently “runoff in the Colorado River Basin is less susceptible to a warming climate” when the higher resolution models are used.

Coupling better models with a more complete picture of anthropogenic influences yields a much less dire picture of the future hydroclimate of the Southwestern United States, including flows in the Colorado River.

Hopefully the EPA and the U.S. Global Climate Change Research Program are paying attention.

Alas, they most certainly are not. 

 

References:

Christy, J.R., et al. 2006. "Methodology and results of calculating Central Valley California surface temperature trends: Evidence of human-induced climate change?" Journal of Climate 19: 548-563.

Gao, Y., J. Vano, C. Zhu, and D. P. Lettenmaier. 2011. "Evaluating climate change over the Colorado River basin using regional climate models." Journal of Geophysical Research 116, D13104, doi:10.1029/2010JD015278.

Gao, Y., et al. 2012. "Moisture flux convergence in regional and global climate models: Implications for drought in the southwestern United States under climate change." Geophysical Research Letters 39, L09711, doi:10.1029/2012GL051560.

Lo, M-H., and J.S. Famiglietti. 2013. "Irrigation in California’s Central Valley strengthens the southwestern U.S. water cycle." Geophysical Research Letters 40, doi:10.1002/GRL.50108.

February 1, 2013 3:59PM

$10.3 Billion in Unemployment Insurance Improper Payments

The Washington Times noted this week that the 2012 improper payment rate for unemployment insurance benefits was 11.4 percent ($10.3 billion out of $90.2 billion), according to U.S. Department of Labor data. The good news is that the figure is down from 12 percent in 2011. The bad news is that it’s still a pathetic waste of money. 

The waste, fraud, and high administrative costs associated with the program are just some of the reasons why it should be scrapped. A Cato essay on the failures of the unemployment insurance system explains: 

When policymakers dream of ways to provide subsidies and safety nets to groups in society, they rarely take into account the large bureaucratic costs that are inevitably involved. The UI system is a complex and costly system for governments and businesses to administer. 

State governments must raise taxes from almost 8 million businesses, with tax bills specifically calculated for each firm's experience rating. At the same time, the states dole out individually calculated benefits to millions of workers and monitor whether each person making a claim is currently eligible. Businesses and states need to adjudicate the many disputed claims for benefits, and states need to police UI tax evasion as businesses try to manipulate the system to get a lower tax rate. 

Federal and state UI administration cost taxpayers $5.9 billion in 2010. Despite this large cost, there is widespread concern among experts that the UI system is “in long-term decline" from an administrative perspective. UI computer systems are apparently far outdated in many states, and administrators say that they need more money to do their jobs competently. 

One problem is that state UI tax systems are very complex. There are four different experience-rating systems, and there are three different methods of determining which businesses to charge when a worker makes a claim. States have various exclusions to the UI tax base, and new businesses have special rules because they don't have an experience rating yet. Most states also impose a range of added charges to basic UI taxes, such as solvency taxes, taxes for socialized costs, reserve fund taxes, and various surtaxes. 

Employers face substantial costs to deal with all the paperwork and tax planning needed to comply with the UI system. For example, the National Federation of Independent Business notes that regardless of eligibility, “many departing employees automatically file for unemployment compensation. They have nothing to lose; filing a claim costs nothing and it puts the ball in the employer's court.” Businesses are then forced to spend time and money fighting unjustified claims. 

There is a substantial amount of waste, fraud, and abuse in the UI system. Many people try to grab benefits improperly, including people who are ineligible, people who are not actively looking for work, and people who have taken jobs and neglect to report it. Other problems include the misreporting of earnings, the provision of false ID to gain benefits, and falsifying reasons for employment termination… If you Google the phrase “unemployment benefits fraud,” you find a huge number of news stories. 

The bottom line is that government benefit programs such as UI are subject to large administrative costs and widespread abuses, which represent losses to taxpayers and the economy. The larger subsidy and benefit programs become, the larger the army of people doing paperwork and transferring wealth in society, rather than adding to wealth by producing real products.   

February 1, 2013 2:25PM

‘La, La, La — I Can’t Hear You’

Here is an interesting essay/blog post from James Annan, a scientist with the Global Change Projection Research Programme of the Japan Agency for Marine-Earth Science and Technology, and a leading researcher into constraints on estimates of climate sensitivity. Annan has long-held the opinion, borne from his own investigations, that the bounds of the United Nations’ Intergovernmental Panel on Climate Change (IPCC) estimates of the earth’s climate sensitivity are too wide, especially at the high end.

The IPCC’s “fat right-hand tail” of their distribution of possible climate sensitivity values means that the IPCC maintains that there is a non-negligible probability that the earth’s actual climate sensitivity—the global average temperature rise from a doubling of the atmospheric carbon dioxide concentration—is upwards of 6°C (11°F) and perhaps has high a 10°C (18°F).  If the climate sensitivity were indeed this high, we’d be in a bunch of trouble. And so long as the IPCC concedes that this possibility exists, it allows folks to gin up truly alarming scare stories for what lies in ahead if we don’t immediately and drastically curtail carbon dioxide emissions.

But Annan has been arguing for years that the IPCC’s stance is scientifically unjustified.  And a host of recent scientific studies, including several of his own, seem to have made this point abundantly clear.

But apparently the IPCC is slow to let go of its alarmist notions.

In his recent post, Annan points out that the now-under-construction Fifth Assessment Report from the IPCC (which is due out later this year), continues to hang onto the fat right-hand tail of the distribution, even in the face of a large and growing body of research to the contrary.

But what I find most interesting in Annan’s post is his opinion and insight as to why the IPCC is behaving this way. Annan suggests that the IPCC is more tied to the results of “a small private opinion poll” than it is to the broader literature when it comes to the climate sensitivity estimates. 

What follows from Annan is damning:

The paper I refer to as a "small private opinion poll" is of course the Zickfeld et al PNAS paper. The list of pollees in the Zickfeld paper are largely the self-same people responsible for the largely bogus analyses that I've criticised over recent years, and which even if they were valid then, are certainly outdated now. Interestingly, one of them stated quite openly in a meeting I attended a few years ago that he deliberately lied in these sort of elicitation exercises (i.e. exaggerating the probability of high sensitivity) in order to help motivate political action. Of course, there may be others who lie in the other direction, which is why it seems bizarre that the IPCC appeared to rely so heavily on this paper to justify their choice, rather than relying on published quantitative analyses of observational data. Since the IPCC can no longer defend their old analyses in any meaningful manner, it seems they have to resort to an unsupported "this is what we think, because we asked our pals." … [H]aving firmly wedded themselves to their politically convenient long tail of high values, their response to new evidence is little more than sticking their fingers in their ears and singing "la la la I can't hear you". [emphasis added]

The IPCC assessment reports form the science foundation of reports from the U.S. Global Climate Change Research Program, which the Environmental Protection Agency relies on to justify regulating greenhouse gas emissions in the United States.

The significance of all of this should be abundantly clear.

February 1, 2013 11:52AM

The ‘New Normal’ of High Unemployment

I almost feel sorry for the Obama administration's spin doctors. Every month, they probably wait for the unemployment numbers from the Bureau of Labor Statistics with the same level of excitement that people on death row wait for their execution date.

This has been going on for a while, and today's new data provide another good example.

As the chart below indicates, the White House promised that the unemployment rate today would be almost 5 percent if we enacted the so-called stimulus back in 2009. Instead, the new numbers show that the jobless rate is 7.9 percent, almost 3.0 percentage points higher.

Obama Unemployment



I enjoy using this chart to indict Obamanomics, in part because it's a two-fer. I get to criticize the administration's economic record, and I simultaneously get to take a jab at Keynesian spending schemes.

What's not to love?

That being said, I don't think the above chart is completely persuasive. The White House argues, with some justification, that these data simply show that they underestimated the initial severity of the recession. There's some truth to that, and I'll be the first to admit that it wouldn't be fair to blame Obama for a bleak trendline that existed when he took office (but I will blame him for continuing George W. Bush's policies of excessive spending and costly intervention).

That's why I think the data from the Minneapolis Federal Reserve are more damning. They show all the recessions and recoveries in the post-World War II era, which presumably provides a more neutral benchmark with which to judge the Obama record.

As you can see from the chart, below, of job creation during all post-World War II recoveries, there's one period that stands out for having the worst performance. Take a wild guess which line includes the Obama years.

Feb 2013 Minn Fed Employment Recession Data



An Obama defender will argue that this chart is unfair because the recession began during the Bush years. Since there's no significant difference between Bush's policies and Obama's policies, I don't think that's a strong defense, but let's bend over backwards and instead look at job creation during the recovery periods, which is shown in the chart below.

Feb 2013 Minn Fed Employment Recovery Data



These numbers are a bit more favorable (or less damning) to Obama, but you can see that job creation for this recovery has been far below the average. Indeed, it only surpasses Bush's job numbers coming out of the 2001 recession.

I'm not surprised that the job numbers for both Bush and Obama are both dismal. As stated above, they both pursued a statist agenda (though a Bush defender doubtlessly will point out that unemployment didn't drop that much in 2001, so it would have been impossible to have a strong post-recession bounce).

The real lesson to be learned is that we live in an era of higher taxes on productive activity, a heavier burden of government spending, and more costly government regulation and intervention. And since we're now more like Europe, the "new normal" is to have weak European-style economic numbers.