SeekerBlog

There are little pockets of innovation in government! Tyler Cowen examines an example of how few “pensioned public employees” are needed to operate a city. Do read the referenced NYT article. Not clear to me is that Sandy Springs has no pension liabilities on its books, but does have city-employed police and fire service. 

Cities have dabbled for years with privatization, but few have taken the idea as far as Sandy Springs. Since the day it incorporated, Dec. 1, 2005, it has handed off to private enterprise just about every service that can be evaluated through metrics and inked into a contract.

To grasp how unusual this is, consider what Sandy Springs does not have. It does not have a fleet of vehicles for road repair, or a yard where the fleet is parked. It does not have long-term debt. It has no pension obligations. It does not have a city hall, for that matter, if your idea of a city hall is a building owned by the city. Sandy Springs rents.

The town does have a conventional police force and fire department, in part because the insurance premiums for a private company providing those services were deemed prohibitively high. But its 911 dispatch center is operated by a private company, iXP, with headquarters in Cranbury, N.J.

And:

Applying for a business license? Speak to a woman with Severn Trent, a multinational company based in Coventry, England. Want to build a new deck on your house? Chat with an employee of Collaborative Consulting, based in Burlington, Mass. Need a word with people who oversee trash collection? That would be the URS Corporation, based in San Francisco.

Even the city’s court, which is in session on this May afternoon, next to the revenue division, is handled by a private company, the Jacobs Engineering Group of Pasadena, Calif. The company’s staff is in charge of all administrative work, though the judge, Lawrence Young, is essentially a legal temp, paid a flat rate of $100 an hour.

The full story is here.  The article has many interesting points, such as this:

Town leaders say race had nothing to do with it. Mayor Galambos said, ‘A 94 percent vote in favor of incorporation speaks to the broad community support for self-government and a desire to have local dollars remain local.’

And this:

To dissuade companies from raising prices or reducing the quality of service, the town awarded contracts to a couple of losing bidders for every winner it hired. The contracts do not come with any pay or any work — unless the winning bidder that prevailed fails to deliver. It’s a bit like the Miss America pageant anointing the runner-up as the one who will fulfill the winner’s duties if, for some reason, Miss America cannot.

In a stand-alone sense, the town seems to be working quite well.

Another brilliant Sumner essay:

I occasionally post on how intellectuals tend to misuse public opinion surveys, often to argue that the public agrees with their policy preferences. I do think there are a few questions the public is capable of responding to in a semi-coherent fashion, such as “should the death penalty be abolished.” But when you get into the area of complex economic policy, then public opinion is just gibberish—it completely depends on how you frame the question. This was triggered by a recent Ezra Klein post:

Policy hasn’t tracked public preferences very closely. In polls, Americans have clearly supported higher taxes on the rich and a much more punitive approach to banker compensation.

That’s one way of asking the question—should the filthy rich and evil bankers pay more? But what if you ask the public what they consider to be the appropriate top income tax rate?

Three-quarters of likely voters believe the nation’s top earners should pay lower, not higher, tax rates, according to a new poll for The Hill.

The big majority opted for a lower tax bill when asked to choose specific rates; precisely 75 percent said the right level for top earners was 30 percent or below.

The current rate for top earners is 35 percent. Only 4 percent thought it was appropriate to take 40 percent, which is approximately the level that President Obama is seeking from January 2013 onward.

In another article I discovered:

Here’s how the numbers shake out: — 21 percent of respondents recommend a rate below 20 percent; — 17 percent recommend a rate of 20 percent; — 23 percent recommend a 25 percent rate; — 14 percent recommend a 30 percent rate; — 13 percent recommend a 35 percent rate;
— 4 percent recommend a 40 percent rate;
— no one recommends a 45 percent rate.

No one!!! Obama’s new tax bill calls for a top federal income tax rate of 43.4% in 2013, meaning the rich will face 50% tax rates in NY and California. Krugman and Saez favor still higher rates. I guess they weren’t asked.

Just to be clear, I’m not claiming the public agrees with me. I think both my survey an Ezra’s survey are nonsense.

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Without a price on carbon, making batteries that can compete with oil is a huge, probably impossible challenge:

Three years later, A123’s situation looks very different. Its stock value has fallen dramatically, depressed by ever-increasing financial losses. This week it reached a low of 82 cents a share, down from $25.77 shortly after its IPO. The company loses money on every battery it sells, and it’s desperate for more capital to stay afloat. Its most recent earnings statement included a warning that the company might not survive.

This MIT Technology Review article summarizes a new PNAS paper that examines one of the CCS risks that our geologist friends have been hammering on. From the abstract:

We argue here that there is a high probability that earthquakes will be triggered by injection of large volumes of CO₂ into the brittle rocks commonly found in continental interiors. Because even small- to moderate-sized earthquakes threaten the seal integrity of CO₂ repositories, in this context, large-scale CCS is a risky, and likely unsuccessful, strategy for significantly reducing greenhouse gas emissions.

Seismic sites: The dots on this map represent seismicity activity during March 2011, according to the United States Geological Survey. Red dots stand for seismicity induced by the creation of water reservoirs. Zoback et al. / PNAS

The authors of a paper published today in the Proceedings of the National Academy of Sciences say that large-scale carbon capture and storage (CCS) is unlikely to work because it would trigger earthquakes that could free the trapped greenhouse gas from the ground.

The paper is a blow to hopes that sequestration could become a big part of future climate strategy. The lead author of the paper is Stanford researcher Mark Zoback, a well-respected expert on the seismic risks of oil and gas production. Steven Gorelick, a Stanford hydrologist, is coauthor with Zoback.

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The paper comes just a few days after a report on the earthquake risks posed by various energy technologies, including oil and gas extraction, wastewater disposal, geothermal power, and CCS, was published by the National Research Council. That report said that “CCS may have the potential for significant seismic risk” and added that “insufficient information exists to understand this potential.”

Zoback and Gorelick’s paper notes that if CCS is to significantly affect atmospheric greenhouse-gas accumulation, it must be able to contain about 3.5 billion tons of carbon dioxide per year worldwide—an amount similar in volume to the nearly 30 billion barrels of oil the world produces annually.

Hans Rosling, the Swedish statistician/global health researcher of TED fame, says there’s nothing boring about stats, and then goes on to prove it in this one hour documentary. The documentary is great fun, very educational, and hopefully very motivational.