Nominee for Year’s Silliest Statistic: USGBC’s “square feet of LEED-certified space per capita”

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We’re not even one month into the year and we already have a nominee for the Year’s Silliest Statistic.

In a press release, the U.S. Green Building Council announced its 2011 list of top 10 states for LEED-certified commercial and institutional green buildings per capita.

The press release notes that the District of Columbia leads the nation, with more than 31 square feet of LEED-certified space per person in 2011. This caused one LEED-accredited architect on USGBC’s mailing list to remark:

Oh, and since I’m in a quibbling kind of mood, considering this organization is entirely based on the accuracy of its metrics, someone needs to remind them that DC is not a state. The disparity in its score alone should be an alarm that this is not an apples to apples comparison.

Per capita?

As far as useless statistics go, “square feet of LEED-certified space per capita” is right up there with “strip clubs per capita.”

No, I take that back.  ”Strip clubs per capita” is a useful statistic for some people.  It signals the opportunities a tourist might have to visit an adult entertainment establishment, if that’s his or her thing.

But “square feet of LEED-certified space per capita?” I am willing to bet you’ll never hear a tourist say, “A few friends and I are going to Washington, DC next weekend, and I hear that the nation’s capital has the most square feet of LEED-certified space per capita in the US. I can’t wait to check out some green buildings while I’m in town.”

Rick Fedrizzi, President, CEO & Founding Chair of the USGBC provides his explanation for one of the year’s silliest statistics: “Looking past the bricks and mortar, people are at the heart of what buildings are all about. Examining the per capita value of LEED square footage in these states allows us to focus on what matters most—the human element of green buildings.”

And, with that bit of bafflegab, we present the first nominee for the Year’s Silliest Statistic.

 

Sq. ft. of space to earn
LEED-certification in 2011		 Per capita
District of Columbia 18,954,022 31.50
Colorado 13,803,113 2.74
Illinois 34,567,585 2.69
Virginia 19,358,193 2.42
Washington 14,667,558 2.18
Maryland 11,970,869 2.07
Massachusetts 13,087,625 2.00
Texas 50,001,476 1.99
California 71,551,296 1.92
New York 36,538,981 1.89
Minnesota 9,591,445 1.81

In Portland, road maintenance takes a backseat to bikes and streetcars

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Following up on a previous post, the figure below shows that as Portland’s road paving backlog has grown, the city has expanded bikeways and streetcar lines.

Yes, yes, I know, correlation is not the same as causation.

Nevertheless, the figure demonstrates that the city appears to have sacrificed road maintenance in favor of alternative modes of transportation.

Misplaced priorities: Despite record revenues, Portland’s transportation bureau is broke

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The Oregonian reports that the Portland Bureau of Transportation proposes to stop repaving major roads for the next five years as part of its plan to cut $16 million from its upcoming budget. Such cuts would add to an already growing backlog of paving projects.

The figure above shows Portland’s paving backlog has grown by more than 500 miles since 1999.  By 2008, Portland had a backlog big enough to pave a two lane road from Pioneer Courthouse Square to San Francisco.

(I have tried to see how much the Portland’s paving backlog has grown under the current mayor. However, it seems that the city’s transportation bureau has either stopped counting or stopped reporting the backlog.)

A press release issued by the mayor’s office explains, in part, why the transportation bureau must cut its budget:

In the face of lower-than-projected gas tax receipts, the Bureau of Transportation must make permanent, significant cuts to match expenditures to revenues. Impending cuts come on the heels of a decade of transportation cuts for the city.

Notice that the problem is lower than projected gas tax revenues.  The problem is not less money. The problem is less money than expected. It’s a bit like someone booking a cruise because they are expecting a raise only to find the raise didn’t come through.

Despite the lower projections, last year Portland saw the highest gas tax revenues in more than a decade, due mainly to a six-cents-a-gallon gas tax hike that went into effect statewide in January 2011. Going forward, according to financial documents issued in November 2011, the city projects ever increasing gas tax revenues over the next five years.

It seems that Portland’s transportation bureau does not have a revenue problem, it has a spending problem. Even worse, some of the bureau’s biggest spending commitments have nothing to do with maintaining or improving streets:

  • Last year, the mayor set aside $8 million from new state gas tax revenue every year for 20 years (a total of $73.5 million), starting in 2013, to help fund the Sellwood Bridge rehab.
  • Over the next two years, the mayor chose to put $16 million of that new gas tax revenue into building new sidewalks.
  • The transportation bureau is also on the hook for $1.3 million a year for the Eastside Streetcar.
  • On top of that, the mayor has put the city in hock for $3.5 million a year (beginning in 2013) for debt service on the Portland-Milwaukie Light Rail line ($3.5 million a year, starting in 2013, for a total of $55 million).

Social networks, search, and competition: FTC says nothing is “off the table” in its investigation

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If you have a Google account and also use social media like Twitter, you may notice that your search results look a little different.  At the top of the search results you’ll see “personal results” from your social network.

If your experience is the same as mine, you’ll find that the personal results aren’t especially useful or interesting.  I did a search for the term “Twitter Google.” One of the top results was a two-year-old picture of a laundromat.

Nevertheless, the Internet has been all … well … atwitter about what the Guardian newspaper has called a “warping” of search results.

Soon after the changes to Google search started showing up, the Electronic Privacy Information Center (EPIC) wrote to the Federal Trade Commission, requesting the FTC investigate:

Google’s changes implicate concerns over whether the company prioritizes its own content when returning search results. Incorporating results from Google+ into ordinary search results allows Google to promote its own social network by leveraging its dominance in the search engine market.

On the other hand, some law scholars writing on the Forbes blog, have a hard time seeing any antitrust issues right now:

Amidst all the antitrust hand-wringing over SPYW [Google's "search plus your world"] and Google’s decision to “go it alone” for now, it’s worth noting that Facebook has remained silent. Even Twitter has said little more than a tweet’s worth about the issue. It’s simply not clear that Google’s rivals would even want to participate in SPYW. This could still be bad for consumers, but in that case, the source of the harm, if any, wouldn’t be Google. If this all sounds speculative, it is—and that’s precisely the point. No one really knows. So, again, what’s to argue about on Day 3 of the new social search paradigm?

The Washington Post reports that the FTC, has expanded its sprawling probe into alleged anticompetitive acts by Google to include the company’s newest search results. Regarding the investigation, a FTC staffer said, “Nothing would be off the table.”

Bernanke’s Magic Eight Ball broke in early 2006

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This quote from Fed Chairman Ben Bernanke might be right up there with, “This ship is unsinkable.”

On the other hand, in Oregon, the state economist laid out some optimistic and pessimistic scenarios.  Here’s the pessimistic scenario (which, to be fair to Bernanke, the Oregon state economist did not think would be the most likely outcome):

At the same time, the housing market experiences a more severe correction with prices falling more than 20 percent by early 2007 and larger drops in housing starts and related residential consumption (construction, building materials, home furnishings, etc.). With foreign demand weaker, exports are also softer. Businesses react by slowing investments and consumers pull back spending. Both profits and the stock market soften in 2005 and further in 2006. Oregon businesses follow suit and slow down hiring to reflect the slower economic activity. The scenario does not result in a recession.

Two out of three ain’t bad.

Forty years and seven dirty words: Supreme Court hears arguments about FCC regulation of vulgarity

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NPR reports that for a second time in three years, the Supreme Court is hearing arguments about a Federal Communications Commission regulation adopted during the Bush administration that allows the agency to punish broadcasters with stiff fines for the fleeting use of vulgar language.

According to NPR, in the 1970s, the Supreme Court ruled that broadcasters could be punished for airing sexual and excretory expletives during prime time when children are more likely to be watching. But that was then and this is now. Then, a handful of TV networks were the sole purveyors of TV fare, and now there are hundreds of TV channels.

The NPR report did not mention that the case involved George Carlin’s famous “Seven Words You Can Never Say on Television.” In that case, a father complained to the FCC  that he had heard the routine broadcast while driving with his young son.

Perhaps the most interesting part of the Supreme Court’s decision is the appendix to the decision, which includes a verbatim transcript of Carlin’s routine (scroll down to “Appendix”).  Here’s the beginning of the routine:

Aruba-du, ruba-tu, ruba-tu. I was thinking about the curse words and the swear words, the cuss words and the words that you can’t say, that you’re not supposed to say all the time, [']cause words or people into words want to hear your words.

Some guys like to record your words and sell them back to you if they can, (laughter) listen in on the telephone, write down what words you say. A guy who used to be in Washington knew that his phone was tapped, used to answer, Fuck Hoover, yes, go ahead. (laughter)

Okay, I was thinking one night about the words you couldn’t say on the public, ah, airwaves, um, the ones you definitely wouldn’t say, ever, [']cause I heard a lady say bitch one night on television, and it was cool like she was talking about, you know, ah, well, the bitch is the first one to notice that in the litter Johnie right (murmur) Right.

And, uh, bastard you can say, and hell and damn so I have to figure out which ones you couldn’t and ever and it came down to seven but the list is open to amendment, and in fact, has been changed, uh, by now, ha, a lot of people pointed things out to me, and I noticed some myself. …

Apparently the Court added the appendix to make the point that the routine was readily available, therefore banning it from the airways during primetime would not unduly limit accessibility:

The Commission’s holding does not prevent willing adults from purchasing Carlin’s record, from attending his performances, or, indeed, from reading the transcript reprinted as an appendix to the Court’s opinion. On its face, it does not prevent respondent Pacifica Foundation from broadcasting the monologue during late evening hours when fewer children are likely to be in the audience, nor from broadcasting discussions of the contemporary use of language at any time during the day. The Commission’s holding, and certainly the Court’s holding today, does not speak to cases involving the isolated use of a potentially offensive word in the course of a radio broadcast, as distinguished from the verbal shock treatment administered by respondent here. In short, I agree that on the facts of this case, the Commission’s order did not violate respondent’s First Amendment rights.

New York Fed: Flippers fed the housing boom and fostered the housing bust

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A recent New York Fed study suggests that real estate “investors” (a/k/a “flippers”) played a big role in the enormous increase and subsequent collapse in housing prices during the 2000s.

The study notes that these investors used financial leverage in the form of mortgage credit to purchase multiple residential properties. As down payments on the properties are reduced, the upside benefits accrue to the investor/flipper, but the downside risks increase for the lender.

The study concludes that real estate investors likely helped push prices up during 2004-06. Then, when prices turned down in early 2006, investors defaulted in large numbers and thereby contributed importantly to the intensity of the housing cycle’s downward leg.

The study is Haughwout, A., Lee, D., Tracy, J., and van der Klaauw, W. Real estate investors, the leverage cycle, and the housing market crisis. Staff Report No. 514, Federal Reserve Bank of New York.

A summary/press release of the study is available from the New York Fed.

Crossing the line on cartels: Can agricultural co-ops lose their antitrust immunity?

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Agricultural co-operatives have a limited exemption from U.S. antitrust laws.  It seems that the exemption turns, in part, on whether members of the cooperative are exempt “producers” or non-exempt “processors.”  Thus, a question arises when the line is not so clear: When does a “producer” mutate into a non-exempt “processor”? Don Hibner, an attorney at SheppardMullin, explains:

The law also has been relatively straightforward that agricultural immunity is forfeited where the cooperative, or its members, engages in “predatory” acts directed at third-parties. …

An issue of significance in In re Fresh and Process Potatoes, however, is whether Capper-Volstead immunity extends beyond the setting of sales prices through “collectively processing, preparing for market, handling, and marketing” to efforts to augment the sales price of the commodity through agreements to restrict output. Surprisingly, in the 90 years of the Act’s existence, this issue has remained unresolved.

Mr. Hibner continues:

Nevertheless, the legality of output restriction agreements among agricultural cooperatives and their members seems to be an issue who’s time has finally come. In In re Fresh and Process Potatoes, the court concluded, in denying the cooperatives’ motion to dismiss, that it could not determine whether the Capper-Volstead exemption applied without a fact-intensive inquiry into two issues. The first was whether vertically-integrated members of the cooperatives included “non-producers”, such that Capper-Volstead immunity would be forfeited. Second, was whether the Capper-Volstead Act included, within the concept of “marketing”, agreements to collectively implement production controls, in order to raise prices.

Some economics of agricultural cartels, from a pioneering article published in the Journal of Law and Economics.

The Capper-Volsted Act of 1922 awarded both tax-exempt status and antitrust immunity to agricultural cooperatives. Likewise, since its passage in 1937, the Agricultural Marketing Agreement Act (the AMA Act) has enabled growers of fruits, nuts, and vegetables to decide how much and what quality of their produce to sell on the fresh market. Whenever a two-thirds majority of growers within a region, by number or by volume, can agree to a set of marketing restrictions, the AMA Act authorizes the secretary of agriculture to declare these restrictions legally binding on all distributors of the crop within the region. As formal agreements designed to reduce competition, marketing orders operate as government-enforced cartels.

An agricultural cartel operates like a dominant firm facing a competitive fringe: the cartel can adjust the amount it ships to the fresh market to influence price, while growers outside the region covered by the marketing order are price takers.

The article finds that growers can restrict quantity by restricting quality.  For example, output can be reduced if the growers agree that only fruit or vegetables of a certain size are to be sold fresh.

It is not clear In re Fresh and Process Potatoes is affected by quality restricts.  Nevertheless, it will be case worth following.

Oregon Employment Department’s forecast of employment through 2020

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The Oregon Employment Department’s 2010 to 2020 industry employment forecast predicts:

  • Total payroll employment will grow by 18 percent over the decade, adding 298,000 jobs to Oregon’s economy.
  • Oregon’s private sector will grow by 20 percent between 2010 to 2020. Oregon’s private-sector employers are expected to increase their payrolls by 275,600 jobs over the next 10 years, accounting for 92 percent of all new jobs in the state.
  • Government payrolls will expand by only 7 percent over the decade.

Daubert challenges to economics experts in antitrust matters

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James Langenfeld and Christopher Alexander examined cases in which challenges were made to antitrust economist expert testimony since 2000 to see how Daubert and related rulings may have affected testifying economists. Here’s a brief summary of their findings:

  1. Economists appear to be challenged more frequently in antitrust cases than in many other types of cases.
  2. Daubert challenges of economic experts have a fair chance of succeeding, and some data suggest that economists testifying in antitrust matters are more likely to have testimony excluded than in other types of cases.
  3. Plaintiffs’ experts are much more likely to be challenged than are defendants’ experts, suggesting that Daubert challenges by defendants have become a routine litigation tool.
  4. Fourth, there are indications that there is a greater chance of excluding plaintiffs’ economic experts from providing testimony in antitrust cases compared to defendants’ experts.

The complete article is Langenfeld, J. and Alexander, C. (2011). Daubert and other gatekeeping challenges of antitrust experts. ABA: Antitrust Source, 25(3). (subscription required)

A technical appendix is available at Langenfeld, J. and Alexander, C. (2011). Daubert and other gatekeeping challenges of antitrust experts: Appendix. ABA: Antitrust Source, 25(3).