There’s been a bit of discussion recently over the idea of mileage-based road taxes replacing the Federal gasoline and diesel taxes that currently pay for the Interstate system, among other things. Most articles seem to have been prompted by a report from the “National Surface Transportation Infrastructure Financing Commission” (which somewhat strangely has a photo of the DC Metro in an underground station on its homepage) suggesting that the gas tax be phased out by 2020 and replaced by a mileage-based tax.

The proposal by the NSTIFC called for a GPS-based system to track road usage and upload it on a monthly basis for taxation purposes. This is stupid. It’s overly complex, it would be ridiculously expensive, it has major privacy concerns, its operation would be opaque to users, and it would almost certainly be open to abuse due to its complexity. It’s a terrible idea and the people suggesting it should be forced to read the RFPs of every overly-complex public sector IT project that has fallen flat on its face for similar reasons, until they repent for coming up with such a terrible idea.

However, the stupidity of that particular implementation plan doesn’t mean that all mileage-based taxes are a bad idea. The underlying concept is a sound one, and if it’s done right it might cause people to think harder about the services they’re using and how much it costs to maintain them. That’s a Good Thing in my book.

The kind of mileage-based tax I’d support would be a low-tech one. Calculate taxable mileage using annual odometer readings, conducted while vehicles are undergoing normal safety or emissions inspections. (There are states which currently don’t do emissions or safety inspections that would have to start doing them, but this change is far less than what would be required for alternative schemes, e.g. the GPS-based one.) Certainly it’s possible to roll back an odometer or bribe an inspector, but those things are already illegal, as are other kinds of tax fraud. Increase the penalties proportional to the increased incentive to commit fraud, and we shouldn’t have much more trouble with odometer tampering than we currently do.

Basing the taxable mileage from the odometer reading doesn’t require invasive GPS tracking devices, which would doubtless be used for purposes well beyond tracking taxable mileage once installed. It doesn’t require any new technology, and in many places it makes use of the already-extant inspection infrastructure. It’s cheap — both from the user’s and the government’s perspective — and it would work.

Two of the most frequently-cited concerns regarding mileage-based taxes concern drivers who frequently travel outside the US, and drivers who spend most of their time on private roads (e.g. farm vehicles). The second issue — vehicles on private roads — is easy to address: if your vehicle doesn’t have a license plate and doesn’t normally operate on public roads (vehicles which today use untaxed off-road fuel), it doesn’t get taxed. If your vehicle does have a plate, it does. In the very worst case, this might force a very small number of edge-case users to get a second vehicle, if they currently have one that sometimes operates on-road using taxed fuel and sometimes off-road using untaxed gas, but this is such a small percentage of vehicles that I’m not sure it bears building policy around.

Addressing international driving is a more interesting question. The simplest, lowest-tech solution is probably to simply record mileage as part of the border-crossing process. If drivers who are crossing the border want a tax exemption on their non-US mileage, they could carry a logbook similar to a passport, specific to their vehicle, and have the mileage noted and certified by a Border Patrol agent as they crossed out of and back into the US. It would be up to drivers to determine whether, based on the amount of mileage they actually drive outside of the US, the paperwork was worth it.

What gets lost in the discussion of mileage based taxes, and which I think bears attention, is that in any reasonably fair scenario, the taxes on passenger cars and light trucks should be vanishingly low. The bulk of mileage taxes should be placed on commercial vehicles weighing more than 6000 lbs., because they actually cause wear and tear to the roads. Passenger cars essentially don’t. Whenever you see an Interstate being repaved, it’s generally either due to weather deterioration, or wear and tear by trucks. The weather-repair costs should be borne by all drivers essentially in proportion to the amount they drive, but the wear and tear expenses should be squarely on heavy vehicles. In fact, the easiest way to ensure vehicles pay for the damage they do is to base the tax on the milage driven multiplied by the maximum axial weight of the vehicle. (Road wear is essentially proportional to the load on each axle, although I suspect the relationship is strongly nonlinear and some research might be required to determine the actual rate tables.)

And that brings me around to my only real objection to a mileage-based tax, which is also my objection to virtually all taxes except those placed on real property: the public needs an assurance from the government that the mileage tax would only be used for maintenance and construction of the transportation infrastructure, and not for whatever purpose Congress decides is politically expedient this season. This is because, when you start taxing a particular activity, you start to change the underlying incentive structure that drives people’s choices and lives. It is important to make the ‘retail’ cost (that is, the out-of-pocket cost paid by the consumer) of goods reflect the true cost to society of that good, but it shouldn’t be made any higher.

Federal road taxes should be used for the maintenance of the Federal road and highway system only — not for regional light rail projects (better funded by property taxes on those areas that will benefit) or for environmental remediation of fossil fuels (better funded by taxes on the fossil fuels themselves). And certainly not for schools, hospitals, police stations, or anything else, except insofar as the need for those things can be directly attributed to the existence of the Federally-maintained road network.

Some have objected to the idea of a mileage-based tax because under most proposals, it would not immediately replace the gas tax — that is, the gas tax would not drop to zero cents per gallon on the day a mileage-based tax went into effect. If both the mileage-based road usage tax and the gas tax were set properly, this would not be a problem. The mileage based tax would go towards infrastructure maintenance, and the gas tax would go towards remediating the environmental consequences and other negative externalities of petroleum use. Since there are a lot of negatives associated with burning oil, it should have a fairly high tax regardless of what we decide to levy for road use. Furthermore, the remaining gas tax should apply across the board to all petroleum products intended for combustion, not just road fuels: this means oil used in power generation, on farms, or by railroads shouldn’t be exempt. If you burn it and vent the byproducts into the atmosphere, it should be taxed: it’s not a “road usage” tax anymore, it’s a “petroleum combustion” one. (Here’s where you build your CO2 or climate-change taxes, incidentally.)

Retaining — even increasing, if valid reasons exist — the tax on gasoline to cover its negative externalities also eliminates one other problem with a mileage-based tax: that it creates a perverse incentive to continue using petroleum vehicles and not switch to alternative fuels, which are cleaner and have fewer negative externalities associated with their use. Plus, as a bonus, if we institute a mileage-based tax with a weight component, we can stop punitively taxing diesel fuel as a backdoor way of taxing trucks for the damage they do to the roads. Diesels are more efficient and are favored in other parts of the world (where the tax regimes are less punitive) due to their inherent economy.

There are lots of reasons to hate the mileage-based taxation proposals that have been put forward, and would require GPS receivers and constant monitoring of every car on the road. However, there’s no reason to dismiss the idea of mileage-based taxes out of hand. Taxing based on services actually consumed is always a good idea in my book, and if it were done right, a mileage-based tax could help shape our actions in ways that avoid externalizing costs on others. However, I remain as cynical as ever about Washington’s ability to get this, or just about anything else, right.

Finem Respice is one of my newest favorite blogs, and I’m almost embarassed to not have found it sooner. Written by an insider in the private equity world, it’s an interesting take on finance and politics that’s different from the investor’s view one gets from outlets like Seeking Alpha or Calculated Risk, or even the economist’s perspective embodied in Tyler Cowens’s Marginal Revolution. Perhaps because it’s written by someone engaged in a profession — that of PE financier — that has lately been made a scapegoat by politicians looking to distract the angry mob from their own incompetence, it doesn’t pull punches where they are deserved.

With that by way of general introduction, the article that caught my eye on FR was “Human Sacrifice At The Altar Of The Cult Of Buoyancy,” which suggests that not only is the ‘bubble mentality’ that led to the overheated technology sector and real estate market not dead, it’s driving the current “recovery” plans by the Obama administration.

Everything in the present climate and the events of the last 30 years is suggestive of bubble worship, unshakable and dangerously, even dogmatically religious in its practice, and consequences. The only aspect of the Cult of Buoyancy in opposition to its title is the lack of fringe status. The Cult of Buoyancy is mainstream.

The ‘Cult of Buoyancy’ is, in short, the belief — bordering on religious faith — that the economy ought, perhaps must, return steady gains year after year, and that if anything interrupts this giant money-printing machine, something is gravely in need of ‘correction.’ Viewed through this lens, I can imagine a believer thinking that market corrections such as the popping of the tech bubble and the current RE slide are not only undesirable, they are unnatural, and must therefore be the fault of some shadow conspiracy. (Whether they actually believe that or not is immaterial; the important point is that there are clearly people in influential positions who act as though they believe it.)

The administration is in the thrall not of the High Priests of Capitalism, but of the Cult of Buoyancy. In retrospect it is quite obvious. The administration wants banks for one purpose. To pump out more loans. Period. This perspective makes almost all of the administration’s actions perfectly logical.

This doesn’t strike me as a particularly controversial assertion. The Obama administration has come very close to saying it outright at various times; their goal is to pour enough cheap money into the banks to “restart” lending (as if it ever stopped; it just stopped being quite so dirt cheap), get the economy back on an upward trajectory via consumer spending and mortgage lending, and — although they generally don’t say this part out loud — leave the underlying problems for someone else to fix at a later date. They take the credit, maybe get a second term out of it, during which they administer another dose of painkiller and soothing words, and are long gone from DC when the patient realizes they’ve been getting morphine for the cancer that’s been steadily worsening all along.

Someone is going to have to stand up and point out to the investing public that there is no quick fix. Someone is going to have to work to start deprogramming the United States after three decades of indoctrination. So long as the Cult of Buoyancy holds such sway, we will never see rational measures to put the economy back on track. We will see the same, tired and now clearly very dangerous tools at work. Inflation. Centralized interest rate planning. Underwriting standards tinkering. Rampant consumerism. Class warfare.

Amen. Of course, I don’t have any real hope that such a ‘someone’ will ever come from Washington; our political system just isn’t designed to allow for it. The public will get milquetoast populists bearing empty platitudes until the flaws in our economy are too obvious to ignore; a point that we are probably at least another one, if not two, boom/bust cycles away from.

The ‘Cult of Buoyancy’ is but a small splinter sect of the big-tent Church of Growth, and that church includes as its adherents virtually everyone who matters in politics, and a fair share of both the Left and Right intellegensia. Even more dangerous than the belief in ‘buoyancy’ with regard to equities and commodities is the belief that the growth experienced by the United States in the 20th century can continue unabated into the next. Any policy founded on this belief, on an assumption of basically never-ending growth, is doomed to failure — possibly spectacular failure, if the policy involves critical social functions like healthcare or retirement.

The current administration’s embrace of cheap-money policies as “solutions” to what they perceive as an economic malfunction is interesting in itself, but the immediate effects of such a policy pale in comparison to its importance as a telltale of an underlying growth uber alles philosophy that makes its non-economic domestic agenda far more dangerous than it might otherwise be.

Edward Wright, a British Conservative, has an interesting piece about the future direction of the Republican party here in the U.S., full of suggestions that the party leadership would do well to take to heart. There are many parallels between the defeat of the Tories in 1997, and what happened yesterday; both lost the trust of the public after economic turmoil, and both had spent too long drinking their own Kool-Aid while neglecting their stated reason for existing.

It is when parties deviate from their fundamental intellectual core that they suffer the most. The most important example of this in the current administration is public spending. Whilst tax cuts helped to keep the American economy growing their pre-requisite — low public spending — was ignored. It’s harder to demonise big government liberals when you have spent eight years turning a healthy budget surplus into a massive deficit, a deficit which represents a massive tax burden on future generations in the form of interest payments to Chinese bankers.

In Britain the ideological departure had serious underpinnings and serious consequences. The pragmatic conservatism of the previous 150 years was eschewed in exchange for the dynamic monetarism, privatisation and market liberalisation of the Thatcher revolution. To succeed once more the GOP must rediscover its own ideological core, an ideology that is found not in the anti-intellectual city-dweller baiting of Sarah Palin but in integrity in government, individual freedom and not just low taxes but low spending.

It is difficult, as a small-government Libertarian conservative, to find much of a silver lining in yesterday’s election; not only does it bring us dangerously close to one-party rule — just two Senate votes, at the time of writing, and that only if Senatorial filibuster rules are not changed — but it seems destined to lead to yet more government interventionism. About the only positive aspect of it that I can find, is that it might represent the death knell of the far-right, authoritarian “conservatives” that have monopolized the GOP brand for too long.

The ‘Evangelical Right’ should have always been the party’s fringe, not its core; by making it the latter, Republican leaders virtually guaranteed yesterday’s outcome sooner or later. The far-right just isn’t socially mainstream enough to form the core of a majority political party. That the strategy worked for as long as it did is remarkable, but — perhaps thankfully — it has found its limit.

The much-ballyhooed ‘silent majority’ was willing to nod along with social authoritarians — men and women who seemed more interested in what was going on in their neighbors’ bedrooms than in Wall Street boardrooms — so long as the economy was humming along and we were winning wars abroad. But once that ended, so too did the public’s tolerance for politicians who had built their careers obsessing over irrelevancies. And let’s be clear: to all but a hard core of religious conservatives, when Wall Street is melting down, concerns over fetuses and buggery are worse than irrelevant.

The question now is whether the Republican party will pull itself together in time to save the country from sliding disastrously far to the left. They have two years in which they must formulate a new message, or at least rediscover an old message that they seem to have forgotten, and take that message to the public, before mid-term elections. I sincerely hope that they can do it, because as bad as the two-party system is, a one-party system — which is what we’re looking at if the Republican party doesn’t adopt a ‘big tent’ platform very quickly — would be far worse.

Although I suspect that I’m probably among the last to read it, I ran across Richard W. Fisher’s excellent speech to the Commonwealth Club of California, earlier today. Called “Storms on the Horizon”, it was delivered May 28 in San Francisco.

I think it’s worth a read by anyone; despite being a few months old at this point, it’s still quite topical. His main focus is on fiscal (as opposed to monetary) policy, which hasn’t been getting very much attention lately. In particular, he concentrates on the issue of unfunded Social Security and Medicare liabilities, and the effect they will have on the overall government budget deficit.

His general premise — that both Social Security and Medicare, but especially the latter, cost tremendous amounts of money — is not very controversial. Where he splits from the current administration’s party line is over whether we’ll have the ability to pay for them in the not-too-distant future without going into the red.

In keeping with the tradition of rosy scenarios, official budget projections suggest [the current] deficit will be relatively short-lived. They almost always do. […] If you do the math, however, you might be forgiven for sensing that these felicitous projections look a tad dodgy. To reach the projected 2012 surplus, outlays are assumed to rise at a 2.4 percent nominal annual rate over the next four years — almost double the rate of the past seven years. Using spending and revenue growth rates that have actually prevailed in recent years, the 2012 surplus quickly evaporates and becomes a deficit, potentially of several hundred billion dollars.

That deficit is driven in large part by the costs of Social Security and Medicare, which — especially when viewed long-term — are staggering to behold. Fisher gives the net present value of only the unfunded portion of both programs as $99.2 trillion USD; if paid yearly (‘pay-as-you-go’) instead of up front, as they would in a balanced budget, they represent 68% of current income tax revenue.

If that doesn’t give you immediate pause, it should. Particularly as we seem to be headed for an economic downturn, that 68% will only increase if income tax receipts decline. The bottom line is brutal:

No combination of tax hikes and spending cuts, though, will change the total burden borne by current and future generations. For the existing unfunded liabilities to be covered in the end, someone must pay $99.2 trillion more or receive $99.2 trillion less than they have been currently promised. This is a cold, hard fact. The decision we must make is whether to shoulder a substantial portion of that burden today or compel future generations to bear its full weight.

Or, of course, the third path, the one no politician wants to mention: cut back drastically on benefits. In reality I think it’s inevitable that this will be a major part of any solution. Nothing else will work, particularly if there’s a serious recession or depression. Fat chance selling the American public on that, though, especially those who have spent decades paying into a system that was supposedly for their retirement, but was actually being looted by Congress for other purposes.

Fisher warns against the temptation presented by the Mint:

We know from centuries of evidence in countless economies, from ancient Rome to today’s Zimbabwe, that running the printing press to pay off today’s bills leads to much worse problems later on. The inflation that results from the flood of money into the economy turns out to be far worse than the fiscal pain those countries hoped to avoid. […] Even the perception that the Fed is pursuing a cheap-money strategy to accommodate fiscal burdens, should it take root, is a paramount risk to the long-term welfare of the U.S. economy. The Federal Reserve will never let this happen. It is not an option. Ever. Period.

This at least is reassuring — or, rather, it should be. But as many have noted, the Fed has essentially been playing the cheap-money game for a while, and continues to play it today, by stoking the bubble economy with bargain-basement interest rates. While this admittedly isn’t Zimbabwe or Weimar Republic-style money printing, it certainly undermines the Fed’s credibility when it claims to have long-term health rather than short-term painlessness in mind.

Towards the end of the speech, Fisher points the finger at the place where the buck really stops: voters.

When you berate your representatives or senators or presidents for the mess we are in, you are really berating yourself. You elect them. You are the ones who let them get away with burdening your children and grandchildren rather than yourselves with the bill for your entitlement programs.

However, I take a little issue with his conclusion:

Yet no one, Democrat or Republican, enjoys placing our children and grandchildren and their children and grandchildren in harm’s way. […] You have it in your power as the electors of our fiscal authorities to prevent this destruction.

While I appreciate the sentiment (and his need to end on something other than a doom-and-gloom note), I see no evidence to support his assertion that either Democrats, Republicans, or the American public at large have any problem burdening their children and grandchildren in order to get a check cut today. Over and over again, we have seen just that happen. Voters are only too happy to pay Tuesday for their hamburgers today.

The voters have it in their power to prevent a disastrous fiscal policy crisis from taking shape, but they haven’t done so thus far, and I see little reason why that will change at the 11th hour.

Having finished Gang Leader for a Day (someday soon I’ll get around to writing up some of my final thoughts), I’ve moved onto Jared Diamond’s Collapse for my sitting-in-airports reading. Although I’ve barely made it through the introduction, so far I’m impressed. Despite his tendency to be longwinded — the major criticism of Guns, Germs, and Steel that I agree with — he seems to have a good grasp of the complex issues underlying modern environmental issues.

There’s a choice quote in the first chapter that I wanted to highlight. Diamond quotes environmentalist David Stiller, writing about the nature of the corporation as an entity.

“ASARCO [American Smelting and Refining Company {…}] can hardly be blamed [for not cleaning up an especially toxic mine that it owned]. American businesses exist to make money for their owners; it is the modus operandi of American capitalism. {…} Successful businesses differentiate between those expenses necessary to stay in business and and those more pensively characterized as ‘moral obligations.’ Difficulties or reluctance to understand and accept this distinction underscores much of the tension between advocates of broadly mandated environmental programs and the business community.

(Text in square brackets is Diamond’s, in curly braces is mine.)

This is a good point and bears much repeating. Corporations aren’t immoral, they’re amoral. Asking corporations to act ‘morally’ is like asking water to flow uphill. We’d do better to make the behaviors that we want — protecting the environment, treating workers fairly, whatever they may be — profitable, either by creating genuine incentives, or by punishing noncompliance, than to ask nicely and cluck our tongues when our toothless requests are ignored.

On the other side of the coin, Diamond seems to also appreciate that as simple as corporations are, actual human beings are not.

Whenever I have actually been able with Montanans, I have found their actions to be consistent with their values, even if those values clash with my own or those of other Montanans. That is, for the most part Montana’s {environmental} difficulties cannot be simplistically attributed to selfish evil people knowingly and reprehensibly profiting at the expense of neighbors. Instead, they involve clashes between people whose own particular backgrounds and values cause them to favor policies differing from those favored by people with different backgrounds and values.

Together, I think these two statements could be applied truthfully and insightfully to a wide range of current issues. The motives of other people, including and perhaps especially those with whom we disagree strongly, are seldom as simplistic as they appear. The motives of abstract, non-human actors like corporations, however, despite being made up of people, are often relatively simple.

It’s a mistake to reify corporations, and it’s equally a mistake to treat other real people like automatons. Both mistakes may produce what seem to be good predictions at first, but will fail in the long run; corporations don’t have a moral center, and will frequently do things that nobody in them as an individual would ever consider doing themselves, and virtually no one gets up in the morning intent on doing what they percieve to be evil.

If we want to produce realistic, workable solutions to pressing problems, one of our first steps has to be eliminating fallacious assumptions, no matter how satisfying (for example, perceiving those we disagree with as evil morons) they may be.

While poking around on Wikipedia I came across this interesting graphic. It’s a map of the Regional Bell Operating Companies (RBOCs), the regional telecom monopolies — I’m sorry, I meant incumbent carriers — showing their coverage of the U.S. both today and back at deregulation in 1988. It’s worth taking a look at.

The color-coding represents their territory coverage today, while the shaded lines mark boundaries between RBOCs at deregulation.

Ironically, there are fewer of them today than there were in 1988. That’s right; for all the effort that went into deregulating Ma Bell, she’s putting herself back together again, Terminator-style.

Consider the southeast and midwest, which has been subject to the greatest amount of reconsolidation. Originally, there were three RBOCs: BellSouth, Southwestern Bell, and Ameritech. BellSouth had the southeast from Kentucky to Florida; Southwestern Bell had the southern part of the midwest from Missouri to Texas; and Ameritech had the Great Lakes region, from Wisconsin east to Ohio.

Today, you’ll find scant evidence of those companies — they’re all parts of the AT&T empire once more, along with the former California and Nevada RBOC, Pacific Telesis. The rest of the nation is basically split between Quest in the West and Verizon in the East.

It’s looking more and more like 1988 will be remembered as the high-water mark for telco competition in the U.S., with a total of eight regional operating companies. Now, we’re down to three.

It’s as though the U.S., with a few years to dull the bad memories of high rates and rented phones, has forgotten what life under a monopoly carrier was like. If we’re not careful — especially with the evisceration of many pro-competition policies in the fallout from USTA v. FCC (2004)¹ — we’re going to end up back in some places we’d probably rather not return to.

Footnote 1: One of the best summaries of the issues at play in USTA v. FCC was written in early 2004, before the USSC declined to take up the case. It’s “USTA v. FCC: A Decision Ripe for the Supremes” by Fred R. Goldstein and Jonathan S. Marashlian. Here’s the money shot:

Of course, we know that’s exactly what the Supreme Court did, or rather declined to do; the decision wasn’t taken up for review, the DC Circuit’s pro-RBOC decision stood, and years of progress in bringing competition to telecommunications at the local level disappeared virtually overnight.

Alex Steffen has a nice essay on the WorldChanging site where he sums up the problem I’ve always had with some self-described ‘survivalists’ and many ‘apocalyptic environmentalists’:

But real apocalypses are sordid, banal, insane. If things do come unraveled, they present not a golden opportunity for lone wolves and well-armed geeks, but a reality of babies with diarrhea, of bugs and weird weather and dust everywhere, of never enough to eat, of famine and starving, hollow-eyed people, of drunken soldiers full of boredom and self-hate, of random murder and rape and wars which accomplish nothing, of many fine things lost for no reason and nothing of any value gained. And survivalists, if they actually manage to avoid becoming the prey of larger groups, sitting bitter and cold and hungry and paranoid, watching their supplies run low and wishing they had a clean bed and some friends. Of all the lies we tell ourselves, this is the biggest: that there is any world worth living in that involves the breakdown of society.

It’s not the main thrust of the essay (although it’s worth reading anyway), but when I read it, I felt like he’d been reading my mind. It’s easy to look at the range of problems facing the world and fall into despair, or worse, self-hate. And it’s a short step from worrying about catastrophe to actively wishing for it.

Which is not to say that we shouldn’t consider or plan for terrible scenarios, we just need to evaluate them rationally and not fall into the trap of being seduced by doomer porn, and believe that such catastrophes won’t affect us negatively.

We have some major challenges facing us as a civilization in the next generation or two; Sir David Omand, former head of the British National Security Agency, put them into three major groups. There are political threats, including wars, terrorism, and governmental de-stabilization by other groups; there are environmental threats, including the end of petroleum fuels, global warming, and pollution; and finally there are economic threats, including a “meltdown” of the global economy.

Unfortunately it’s rare for more than one of these problems to capture the public’s attention at once. We tend to fixate on one issue — sometimes to the point of obsession, as in the case of the ultra-survivalists and ‘doomers’ — while letting the other ones slide, then get bitten in the proverbial ass and fix our attention somewhere else. It’s important that we keep a steady eye on all the issues, but not get so caught up in any of them that we despair completely.

Just in case anyone thought that mind-boggling ignorance and gross stupidity was restricted to members of the U.S. government and civil service, this story out of Russia, reported by Ars Technica will disabuse you of the notion. Apparently they want to impose a mandatory registration and licensing regime on all consumer Wifi gear, under penalty of confiscation:

[T]he government agency responsible for regulating mass media, communications, and cultural protection has stated that users will have to register every WiFi-enabled device with the government […] registration could take as long as ten days for standard devices like PDAs and laptops and […] it intends to confiscate devices that are used without registration.

The Ars story references a Russian source, Fontanka, but it’s (unsurprisingly) in Russian.

Although it’s easy to go for the censorship-conspiracy angle, I’m not sure that there’s as much evidence for that interpretation as there is for plain old public-sector incompetence:

The Fontanka.ru article quotes an industry specialist who points out that the government agency behind the policy is run by a former metallurgic engineer who likely has no clue about many of the technical issues overseen by his organization.

It’s almost heartwarming, how much we have in common.

The Financial Times has a very interesting article on the relationship — or in this case, lack thereof — between population growth and prosperity. It astounds me a little that any of their findings would be surprising to a first-worlder in 2008, but I’ve heard enough people lament the population decline in Japan and Western Europe that this obviously isn’t the case.

There are two important lessons here. One is that we should always look at per capita, rather than overall, production when measuring the success or failure of various economic policies. Any policy that produces a higher GDP at the expense of a lower per-capita figure is stupid, since it’s the per-capita figure that’s linked most intimately with standards of living. Lesson two is that policies that are based on continuous population growth just aren’t sustainable, and we need to get rid of them (or at least rethink them) before we hit the inflection point and they become untenable. What we need not to do is view the population decline itself as a problem, because it’s not. It’s taking population growth as a given that’s the mistake.

Countries with declining populations, or with populations that may begin to decline soon, have a unique opportunity to consolidate standards-of-living gains and create new social structures that aren’t predicated on pumping out offspring (and consuming non-renewable resources) by the bushel-basket. This is nothing but good for people living in those areas, provided the transition is managed thoughtfully.

Conservative political strategist and blogger Patrick Ruffini has an interesting insider’s take on the fatal flaw of the Romney strategy. It was written on February 2nd, and seems even more relevant now — with Super Tuesday in the rear-view mirror — than it did then.

Huckabee and McCain represent two very distinct sides of both the Republican party and the ‘conservative’ movement in general. Huckabee is traditional and appeals to the base; McCain appeals to moderates and fence-sitters. That they are fundamentally different candidates is well-understood; this has basically been the nature of the Republican party since 1980 or so, and candidates’ overall success has basically been measured by how well they reconcile these two groups.

Enter Mitt Romney: onetime moderate, blue-state governor, Yankee Republican, entrepreneur. Realizing perhaps that it would be impossible for him to ‘out-liberal’ McCain without opening himself to accusations of being the Republican answer to Joe Lieberman, he made the strategic choice to place himself to the right of McCain and compete instead for the social conservative vote.

I thought and continue to think that this is a move requiring a whole lot of cojones. I’m not sure it was a good move, but you have to at least appreciate the inherent audacity. In theory, it’s pretty brilliant, but as good old Carl von Clausewitz once said, “Theory becomes infinitely more difficult as soon as it touches the realm of moral values.”

McCain is the Coca-Cola of GOP candidates, always performing at a consistent 30-40% … McCain does well in swing counties and liberal-leaning metro areas, but surprisingly, he doesn’t tank in rural, Evangelical areas. But Romney does.

My suspicion right now is that history will remember Romney’s bid as an interesting, but ultimately unsuccessful, gamble. What he probably could have been best at — wooing moderate voters and staking out a reasonable plank on both social and fiscal issues, backed with lots of past performance — was crushed as McCain and Obama both moved towards the center from opposite directions.

EDITED TO ADD: Romney dropped out earlier this afternoon, but has currently not pledged his delegates to any other candidate.