Congress legislates against fixing a problem it created.

What is the government qualified to do?

Stored in such places as the vacant land near an airfield in Hope, Ark., an industrial park in Cumberland, Md., and a warehouse in Edison, N.J., are the results of one of the federal government’s costliest stumbles in the aftermath of Hurricane Katrina — tens of thousands of empty trailers.

The Federal Emergency Management Agency hurriedly bought 145,000 trailers and mobile homes just before and after Katrina hit, spending $2.7 billion largely through no-bid contracts. Now, it is selling off as many as 41,000 of the homes, netting, so far, about 40 cents on each dollar spent by taxpayers.

FEMA cannot sell unused mobile homes directly to the public because of legislation passed by Congress in October at the industry’s urging. Instead, the agency must now go through a time-consuming process of trying to donate them first to federal, state and local agencies and public service groups, according to the Manufactured Housing Institute’s Web site.

Remind me why I should be enthusiastic about government-managed health care or schools or . Every process becomes politicized and designed to protect he who lobbies hardest and with the most cash. This is not the fault of the money. Politicians are corrupt. They should not be allowed near any task that isn’t in the Constitution.

“While FEMA has 8,420 brand new, fully furnished, never-used mobile homes in a cow pasture in Hope, Arkansas, they refuse to provide the people from Desha, Back Gate and Dumas counties with help. This is crazy,” said Rep. Mike Ross (D-Ark.). “If this is the new and improved FEMA, I don’t want any part of it.”

Fair enough, but if it worked as Rep. Ross wants, I wouldn’t want any part of it. That’s the point of not having the government meddle in things it’s not capable of doing. Someone will be abused. Keep out, expect people to be responsible, and let the private market take care of those who can’t or won’t. It’s rough, but it can’t be worse than the mess we have now.

Introducing Economic Breezefalls

Here’s a bit of personal finance advice from the Washington Post:

Here’s another reader’s debt dilemma: “I got a huge tax refund that would . . . pay off a good chunk — about half — of my credit card debt. But I am embarrassed to say that I have no savings at all aside from my 401(k). I am wondering if I should divvy up my refund between establishing an emergency fund and paying down my credit cards. I need your common sense advice.”

The sensible thing would be to establish an emergency fund. The ideal is to have between three months and six months of household expenses in a rainy day fund. In this case just one month’s worth will do. Use the rest of the refund to reduce your credit card debt.

I disagree, partially. Keep enough cash aside to cover one month of expenses that can’t be paid with a credit card. Use the rest to pay down credit card debt. If trouble arises, run the card back up. Groceries can be purchased with a credit card, for example. Even if the break in interest is only one month, it could be significant.

Contrast that with this:

Another reader had a similar question. “I’m 25 and will receive an $8,000 tax refund this year as a new homeowner. My rainy day fund has two months’ worth of expenses, and I can’t decide between building it to a full three months first then putting the rest of the refund toward my biggest student loan, or paying the loan (9 percent interest) off entirely. I’d love to see that one loan (I have three more) disappear and not pay any more interest. But I worry that it would take another eight months to build up to a three-month reserve. What would you do?”

I would pay off the one student loan, entirely.

However, let’s get real. Most people won’t let the money just sit in a savings account. They end up spending it on a big-screen television, vacations, car repairs or whatever. Before they realize it, the windfall is gone, and yet the debt is still there.

I disagree completely. Even at 9 percent, the student loan is stable. If something happened and this person needed access to a rainy day fund, there’s nothing there. The student loan is paid off, but then the credit cards build. That’s not a reasonable trade.

I accept that both of those fit my personal preference more than anything, with a significant dose of experience in both included. Still, I find it odd to imply that a 25-year-old who can be responsible enough to buy a house and build two months of rainy day fund won’t let the larger rainy day fund remain in an account, opting instead for a big-screen television. That makes no sense, especially when looking at the previous advice to build a rainy day fund for someone who has revolving credit card debt. Without more information, who would you bet on to blow the money? That seems a no-brainer.

I know the unaddressed issue is that these people are getting large tax refunds. That makes my head explode. If you have debt that you want to pay off, and you’re getting a significant refund, you’re managing your money horribly. Stop lending it to the government for free for up to 16 months. Keep your money and use it to avoid building up (or not paying down) those debts that you then use the refund to fix. This is not hard.

Yes, I think the author should’ve pointed this out. If people will spend a huge “windfall”, why not suggest that they manage it as twelve tiny “windfalls” instead?

Contract every team except Boston and New York.

Major League Baseball finally announced its deal with DirecTV to air is Extra Innings package. It’s not an exclusive deal at this point, but it might as well be. The cable industry and Dish Network have until March 31st to match the terms agreed to by DirecTV. Cable would be hard-pressed to match that offer because DirecTV is insane. I can’t imagine a scenario in which Dish Network could agree, having only 50,000 Extra Innings subscribers last year. Still, this is over the top:

Dish Network assailed the new agreement. “When our customers are suddenly cut off from watching their favorite sports teams on TV,” the company said in a statement, “it is time to ask whether the market is working. This is both anti-competitive and anti-consumer.”

The deal is certainly anti-consumer, for all the reasons I’ve stated. But the market is not wrong. Two companies that reach a mutual agreement can’t be considered a broken market. Stupid, definitely maybe, but not broken.

As a perfect example of how stupid Bud Selig is in his patronizing claims that fans can still see lots of baseball, consider the 2007 schedule offered by Fox. Beginning April 7th, it will air a game every Saturday. In the first month we get these choices:

Saturday, April 14

  • Los Angeles Angels of Anaheim at Boston Red Sox

Saturday, April 21

  • New York Yankees at Boston Red Sox
  • St. Louis Cardinals at Chicago Cubs

Saturday, April 28

  • Boston Red Sox at New York Yankees
  • Chicago Cubs at St. Louis Cardinals

Saturday, May 5

  • Seattle Mariners at New York Yankees

My vision might be bad, but I see April 21st and 28th looking exactly the same, with only the stadium scenery changing. Whoopee. And the two bookend weekends present us with either the Red Sox or Yankees. That’s some amazing diversity. Well done, Bud. Thanks for looking out for fans.

Competition Over Central Planning

Over at Cafe Hayek, Russ Roberts has an excellent commentary on FCC Chairman Kevin Martin’s concerns about a Sirius-XM merger. I agree with Mr. Roberts entirely, and as a Sirius subscriber, I’ll pay more if I can get the same quality Sirius service I have now and Major League Baseball.

One bit of Mr. Roberts’ post struck an interesting thought:

Five years ago there was no satellite radio. When one company came along (I don’t know who was first, Sirius or XM), should the FCC have shut them down for daring to monopolize the market? So why is it now that there’s two going back to one we have a potential calamity that the government has to worry about?

That’s an excellent question. Sirius was formed first, but XM was the first to broadcast. For those who think the government has a legitimate function in regulating this way, the government should’ve mandated that the two companies begin broadcasting on the same day. That would’ve been the only fair way to have them compete on equal footing. It can artificially decide that two is the magic number of satellite radio providers. It should be able to dictate business conditions, too. No?

I want to see lawmakers scrutinize lawmakers.

I don’t know enough on this issue to comment in depth, although I’m probably less likely to believe the hysteria than most.

Workers are being overcharged tens of billions of dollars a year in unnecessary and often hidden fees imposed on popular, company-sponsored retirement savings plans known as 401(k)s, financial experts told a congressional committee yesterday.

Mutual funds and other professional investment firms often charge fees totaling 3 percent to 5 percent of the assets they manage, when 1.5 percent would be more appropriate, Matthew D. Hutcheson, an independent consultant on pension fees, told the House Education and Labor Committee.

I’m sure this happens, based on the company that manages my 401(k). I have no reason to believe they’re maliciously screwing me with outrageous fees, but they do waste my money. When they need to send me an amendment to my plan, they send the notification by FedEx, even when what I receive consists of two printed pages. I’d prefer they use the postal service, or even better, e-mail. I’m very close to pulling my retirement funds from them and moving them to another company.

As a business owner, I have that luxury. Employees are not so lucky. They’re generally stuck with what their employer offers. Is it possible that these “unnecessary” fees are the result a perverted federal tax structure that alters some of the normal incentive to keep costs low? Every government decision has consequences, so it’s reasonable to assess which negatives the government creates through its actions.

Would Americans be better off with a simpler, individual system not tied to employers? Would a better, fairer tax code help? I don’t know the answers, but I’d start there. When there’s a significant problem in the market, it generally results from some government action.

Economic laws can’t be broken.

We must be careful to avoid news like this:

Mortgage applications jumped last week as borrowers emerged in droves to refinance their existing home loans as interest rates fell to their lowest since early December, an industry trade group said Wednesday.

Consumers tend to be sensitive to shifts in interest rate moves when they are looking to refinance their current home loans.

Too many reports like this and some people might have to admit that incentives matter. We wouldn’t want that.

Motivation and method matter more.

Bill Gates is smarter than this:

[Gates] said government needs to invest more money in education and training, especially in high school math and science, as well as in job training programs.

“Our high schools are no longer a path to opportunity and success, but a barrier to both,” Gates told the Senate Health, Education, Labor and Pensions Committee, chaired by Massachusetts Democratic Sen. Edward Kennedy.

“While most students enter high school wanting to succeed, too many end up bored, unchallenged and disengaged from the high school curriculum — ‘digital natives’ caught up in an industrial-age learning model,” he said.

I fail to see how more money to support the same structure we now have will produce anything other than more boredom and lagging in the global market. He goes on to recommend more “No Child Left Behind” goodness, in the process. I know a teacher or two. More “No Child Left Behind” is the opposite of what we need. Reform the system by taking the government out of it. Let the private market figure out how best to educate children. Then we should discuss how to pay for it. Until then, money will solve nothing.

He makes the same mistake in requesting more federal money for basic scientific research. But I agree with his sentiments on allowing foreigners to achieve permanent resident status.

More Evidence for Scientific Caution

This is the last one for the day, I promise.

Earlier today I asked whether or not new findings on HIV prevention might generate an “Oops?” from circumcision advocates. I’ll ask again:

Men with HIV who get circumcised hoping they will be less likely to transmit the AIDS virus may have a greater-than-normal risk of infecting their partners if they resume sexual activity too soon after the operation.

That observation — drawn from preliminary analysis of a study in Uganda — threatens to complicate efforts to tout circumcision as a new weapon against HIV in Africa.

The men in question already had HIV when circumcised. There should be no surprise that they can infect their female partners. Perhaps it’s surprising that the risk is greater than normal, but the bottom line is that the eventuality of infection is a given. Circumcision will only delay the inevitable. This coincides with the truth that responsible, safe sex practices are the only prevention, whether the individuals involved are intact or circumcised, HIV-positive or HIV-negative.

Instead, we’re left with this sentiment¹:

Specifically, it suggests that public health campaigns promoting circumcision must also include messages, directed principally at women, warning of the extreme hazard of intercourse with HIV-positive men who have just had the procedure.

There were obvious reasons not to rush head-first, unthinking into promoting circumcision before these findings. Researchers, politicians, and parents didn’t want to hear this before. Will they now, even though these efforts should’ve been seen as complicated from the beginning, with adequate restraint applied?

¹ Full Disclosure: I exchanged e-mails with the reporter for this story, David Brown, after he wrote a story on circumcision and HIV prevention in August. We had a brief exchange, but my questions were inadequately addressed. Our disagreement partially focused on this statement about the educational approach needed. From that article:

It would also require drawing a clear distinction between that procedure and the misleadingly named “female circumcision,” a form of ritual mutilation with no medical benefit.

The FGM issue is more complex than the simple view that women are mutilated to damage their sexuality while men are mutilated to provide them with medical benefits. That begs addressing the specific issue of male circumcision with a skeptical eye. Instead, he seemed to approach the complex ethical and scientific aspects of male circumcision with the same faulty assumptions accepted by society in general, even when the facts we discussed contradicted his statements. This is not surprising, but it’s also not advisable for a reporter, in my opinion.

Worship on your own dime.

Consider:

An unknown number of new George Washington dollar coins were mistakenly struck with edge inscriptions, including “In God We Trust,” and made it past inspectors and into circulation, the U.S. Mint said Wednesday.

That should be a news story, right? It is, except I changed one word and removed another. Here’s the original text:

An unknown number of new George Washington dollar coins were mistakenly struck without their edge inscriptions, including “In God We Trust,” and made it past inspectors and into circulation, the U.S. Mint said Wednesday.

There is no justifiable reason for coins printed by the United States government to include the phrase “In God We Trust”. Leaving it out would show respect for the Constitution. America would not cease to believe in God, nor would we perish. We’d also lose a bright symbol of legislative activism.

Via Fark.

The justifications explode themselves.

Unlike the scientists, politicians, and parents who couldn’t wait to proclaim victory when a few studies showed a correlation between the male foreskin and HIV infection, I will not make bold pronouncements about these findings.

Researchers have discovered that cells in the mucosal lining of human genitalia produce a protein that “eats up” invading HIV — possibly keeping the spread of the AIDS more contained than it might otherwise be.

Even more important, enhancing the activity of this protein, called Langerin, could be a potent new way to curtail the transmission of the virus that causes AIDS, the Dutch scientists added.

Langerin is produced by Langerhans cells, which form a web-like network in skin and mucosa. This network is one of the first structures HIV confronts as it attempts to infect its host.

However, “we observed that Langerin is able to scavenge viruses from the surrounding environment, thereby preventing infection,” said lead researcher Teunis Geijtenbeek, an immunologist researcher at Vrije University Medical Center in Amsterdam.

You’ll recall, of course, that the primary “benefit” of male circumcision as a defense against HIV is that it removes many Langerhans cells. Read through most of the articles in the last year or so on this topic and you’ll see “scientists believe”. Not “scientists know,” but “scientists believe”. Oops?

The question mark on the end of my last sentence is intentional. I have no idea how substantial this research is, or whether it can be replicated. I’m willing to read this last qualification in the story and understand that life is often more complicated than controlled findings.

[Dr. Jeffrey Laurence, director of the Laboratory for AIDS Virus Research at the Weill Cornell Medical College] did offer one note of caution, however.

“In the test tube, this is a very important finding,” he said. “But there are many things in the test tube that don’t occur when you get into an animal or a human. Having said that, though, this is a very intriguing finding.”

Instead of the glee that my viewpoint is now supported, I’ll approach this with caution, the same way circumcision supporters should approach the recent findings on HIV. I suspect the difference is that I know I don’t need science to validate my stance. I’m correct before we get to the science. Circumcision advocates rush to every justification. Why?

But looking at the science, we’re finding information in the short-term. It’s reassuring to project that information long-term, but we must remain open to the possibility that we’re wrong. That is true of any new discovery, but it should be required when the decision is to alter a human body. We should add another, higher standard because that body does not belong to us.

If researchers verify these new findings through real-world tests, will anyone apologize for rushing to circumcise as many males as possible? The answer is an obvious “no”. Those now advocating circumcision will still fall back on the tried-and-true defenses. We’ll okay some version of “alright, it’s not important, but still…“. I can accept that if someone makes decisions about his own body and life. I can’t accept that when someone makes it about someone else’s body and life. But still… isn’t enough.