Is The Chevy Volt Worth It?

A short Boston Consulting Group Study has looked at the economic viability of plug in electric cars like the Chevy Volt, the car model that is supposed to save General Motors from oblivion, which is scheduled to hit showrooms for the 2011 model year. The 2011 model year starts in late 2010, about a year and a half from now.

Columnist Charles Lane argued in a column that hit newspapers across the country today that:

Unless and until gas prices shoot up, you'd be crazy to buy one of these much-ballyhooed vehicles, which will run 40 miles on a single charge if GM can overcome difficult battery-engineering issues.

Does the source he cites support his conclusion? Not really.

The study's text lacks basic details needed to evaluate its claims and assumptions. What we are told, that the pricing is based upon total cost of ownership over five years, rather than over the life of the car, discredits the study. Re-examining the facts from scratch makes a good case for the viability of the Chevy Volt.

Let's re-examine the fact from scratch. The issue should be: Does a Chevy Volt have a total cost of ownership over the life of the car comparable to that of a comparably sized conventional car?

The fuel use details for the Volt are as follows:

The Volt uses electricity to move the wheels at all times and speeds. For trips up to 40 miles, the Volt is powered only by electricity stored in its 16-kWh, lithium-ion battery. When the battery's energy is depleted, a gasoline/E85-powered engine generator seamlessly provides electricity to power the Volt's electric drive unit while simultaneously sustaining the charge of the battery.

The Chevrolet Volt can be plugged either into a standard household 120v outlet or use 240v for charging. The vehicle's intelligent charging technology enables the Volt's battery to be charged in less than three hours on a 240v outlet or about eight hours on a 120v outlet. Charge times are reduced, if the battery has not been fully depleted. Charging the Volt about once daily will consume less electric energy annually than the average home's refrigerator and freezer units.

More than 220 lithium-ion cells contained within the Volt's battery pack provide ample power. The Volt's electric drive unit delivers the equivalent of 150 horsepower, 273 lb-ft. (370 Nm) of instant torque, and a top speed of 100 miles per hour.

GM estimates that the Volt will cost about two cents per mile to drive while under battery power compared to 12 cents per mile using gasoline priced at $3.60 per gallon. For an average driver who drives 40 miles per day (or 15,000 miles per year), this amounts to a cost savings of $1,500 annually. Using peak electric rates, GM estimates that an electrically driven mile in a Chevy Volt will be about one-sixth of the cost of a conventional gasoline-powered vehicle. The cost savings are even greater when charging during off-peak hours, when electric rates are cheaper.

Thus, a driver who driver's the Volt in fully electric mode is expected to need about $2,000 of electricity during a 100,000 mile vehicle life.

The Chevy Volt's dimensions are as follows:

Length [in.]: 177.0
Width [in.]: 70.8
Height [in.]: 56.3
Wheelbase [in.]: 105.7
Seating Capacity: 4
Cargo Cap. [cu-ft]: 10.6

The most comparable Chevy in the lineup, which still seems to have a bit more passenger and cargo room is the Chevy Cobalt. It also seems comparable in size to the Honda Civic and Toyota Corolla.

A Chevy Cobalt gets 22 miles to the gallon by EPA measures in the city, where one would drive an electric car in electric mode. Over 100,000 miles it would use 4,545 gallons of gas (and realistically, given the inaccuracy of EPA estimates, closer to 5,000 gallons of gas).

The MSRP for a Chevy Cobalt Sedan LT 2LT (the most basic model with automatic transmission) is $18,860. The estimated price for a Chevy Volt is said to be about $30,000.

So, the acquisition and fuel cost over the life of the vehicle for a Chevy Volt would be about $32,000, while the acquisition cost for the Chevy Cobalt would be about $18,860 (I assume that the savings from MSRP on each of the vehicles is identical).

The question is then, at what price of gasoline does the fuel cost of gasoline for the Chevy Cobalt make the Chevy Volt a better deal?

The lifetime number needs to be $13,140, which is $2.89 per gallon at 22 mpg, and is $2.63 per gallon at 20 mpg. Gas is currently selling at close to $2 a gallon, but reached a high point of $4 per gallon not long ago, and is expected to rise in the long run at a rate much faster than the rate of increase in electricity prices due to peak oil concerns.

At a $2 a gallon and 20 mpg for the Cobalt, the Volt needs a subsidy of about $3,140 to be competitive with the Volt, about 10% of the purchase price. In Europe and Japan, where gasoline prices are closer to $4 a barrel, and the consumer market is more strongly tilted towards compact cars for a variety of reasons, like small roads, shorter trips and smaller parking spaces, the Chevy Volt is easily competitive, even without consumer purchase subsidies, saving buyers about $6,860 over the life of the vehicle compare to a Chevy Cobalt.

The environmental benefits of the Chevy Volt are greatest in places like California and France, which power their grids with fuels that produce relatively few greenhouse gases per kilowatt-hour, compared to much of middle America, where electricity is predominantly produced with greenhouse gas heavy coal.

The Chevy Volt's design also alleviates concerns that have kept competitors off the market -- limited range. It's 40 mile range on battery power is sufficient for a typical urban driver. But, the gasoline back up generator that kicks in when the Volt's battery is exhausted, takes away the concern that the car will die during an atypical long trip, or a night when the user forget to recharge the car as usual.

The Volt won't change the automobile market by itself. Compact cars are a fairly small part of the total market. Moreover, cars like the Toyota Prius Hybrid and Toyota Yaris, which offer small cars with high fuel efficiency in different ways without being plug in electrics, offer real competition to the Volt.

For example, a 40 mpg in the city conventional gasoline powered vehicle uses 2,500 gallons over its lifetime, and is competitive with the Chevy Volt even if it costs $22,000 to buy one at $4 per gallon. A 60 mpg in the city hybrid, lie the Prius uses 1,667 gallons over its lifetime, and is competitive with the Chevy Volt even if it costs $25,333 to buy one at $4 per gallon.

But, for the Volt to change the market, people must expect gas prices of a little less than three dollars a gallon on average over the life of the car, and it must be available and similarly economically competitive over a wide range of vehicle types, not just compact sedans.

Also, GM needs to be able to make a profit selling a Chevy Volt at $30,000 each, and the maintenance costs of a Chevy Volt need to be not appreciably greater than those of a comparable conventional vehicle. None of this is proven yet, but it is far less far fetched than Charles Lane suggests in his op-ed article today.

Big Ideas In Medicine

At a general level, in my view, the biggest advances in medical science in the past few decades have been those that have allowed us to reclassify diseases and medical conditions by medical causes that were previously unknown.

Some early waves of this process identified conditions caused by particular virus or bacterium or parasite, conditions caused by particular single nutrient dietary deficiencies, and conditions caused by simple chromosomal genetic issues (like Down's syndrome or Hemophilia A).

But, since then, a number of important classes of conditions have been identified and explored at much greater depth.

For example, we are getting a much better grip on the importance of mitochondrial DNA, in addition to the historically center stage player, nuclear DNA, which is implicated among other things in many metabolic conditions.

We are identifying conditions associated with symbiont bacteria, particularly in the gut and in the mouth. There are now cases where a "gut bacteria transplant" can change how someone metabolizes food, for example.

We are starting to understand several classes of auto-immune diseases.

We are starting to recognize prions as disease agents in diseases like Alzheimer's and Mad Cow disease, as alternatives to agents like viruses and bacteria.

We are getting a better handle on age related genetic mutations.

We are starting to better understand a variety of medical conditions associated with the environments we encounter in the womb.

We are learning that estrogen impacts two different kinds of receptors in the body, either of which can malfunction. We are also starting to understand how some of the less famous hormones affect us.

We are discovering that people have environmentally responsive epigenetic instructions in their bodies layered upon the core nuclear DNA that someone receives at birth.

We are starting to split out mental health conditions with very important and well understood environmental components that constitute immediate causes (e.g. PTSD and many cases of clinical depression), from those that emerge early in life and have less direct environmental causes (e.g. autism and psychopathy) from those that emerge relatively late in life and appear to have strong hereditary components (e.g. schizophrenia and bipolar disorder). We are also starting to understand some mental health (and non-mental health) conditions that have genetic components but only manifest in the presence of particular "triggers." For example, some people are hereditarily prone to being screwed up emotionally by child abuse and neglect, while other people, sometimes siblings, have more of a hereditary ability to resist the negative influences of these conditions.

We are starting to identify the chemical pathways and brain components associated with particular mental conditions -- distinguishing, for example, conditions that act on the dopamine or serotonin systems, and conditions associated with the amygdala. Understanding these brain systems also allows us to develop biologically based descriptions of dimensions of personality and mental difference between people.

The hope, of course, is that we can better diagnose conditions that present in a similar way but have different causes, and that by understanding causes better that we can better know how to deal with these conditions.

Unmarkets and Government Shutdowns

The market for grocery story labor in Colorado doesn't look much like the one described in your first year economics textbook.

In your textbook, individual job applicants compete for jobs from competing employers in the industry and that application and acceptance process sets a market wage for their labor. In non-union shops, that is more or less how it works. But, a large share of the grocery store labor market in Colorado is unionized, so the labor market operates very differently for a large share of the market.

In the real world, the biggest three grocery store employers in the market, who normally compete with each other, enter into formal agreements to coordinate their negotiations with the United Food and Commercial Workers Local 7, which represents workers at all three. Until recently the American automobile industry operated in a similar manner. As I understand the matter (and neither anti-trust nor union-management negotiations are my personal speciality, I rely on others when it counts for these parts of the total picture), this would probably be a violation of anti-trust laws were it not for the fact that the employees are represented by a common union.

It is apparently possible that a strike by workers at one grocery store chain could cause workers at two grocery store chains, who are not on strike, to be locked out and replaced with "temporary replacement workers" just the way striking workers can be under American laws regulation union-management relations, so that employers can show solidarity with each other and strengthen their hand in negotiations.

Contracts covering about 17,000 workers represented by UFCW Local 7 at King Soopers, Safeway and Albertsons expire May 9. The grocers coordinate on contract talks but negotiate separately.

Safeway workers are voting Friday and Saturday whether to authorize a strike if a contract isn't reached. Safeway meat warehouse workers have already authorized one.

King Soopers and Safeway have been accepting applications for temporary workers on the Front Range, in case of a strike. Western Slope negotiations begin later this month.

Contract talks have been contentious before. Federal mediators have been involved in talks between the union and at least one grocery chain in the last two major rounds of talks dating to 1999.

In 1996, King Soopers and Safeway workers agreed to a contract after a 44-day strike.

Last week, UFCW Local 7 filed a complaint with the National Labor Relations Board alleging the three chains are violating labor law by not disclosing certain terms of their agreement to team up in the bargaining. Union leaders are particularly interested in whether the chains have agreed to lock out all employees if union members at just one chain vote to strike. The chains have said they routinely coordinate on bargaining.

The union also claims King Soopers' offer of $10.25 an hour for potential temporary workers violates federal law because the wage exceeds the pay for many union workers.

King Soopers spokeswoman Diane Mulligan has said the proposed pay is less than the average wage for regular employees.

The union says grocery chains are pushing for concessions despite profits, as people eat out less and buy food to cook at home.

King Soopers contends it faces competitive pressure from non-union or low-cost chains like Wal-Mart, plus rising health care costs and the effect of the economy on the value of pension funds.

Target is another major non-union grocery store in the area.

I'm not terribly impressed with either the non-union or the union-management negotiation approaches to setting employment terms between workers and their employers in area grocery stores. Union shops generally secure a better deal for employees than their non-union counterparts. But, union-management negotiations, when they lead to long strikes and lockouts before a deal is reached, are horribly disruptive to everyone in the local economy in a classic lose-lose-lose situation, in which both parties and third parties are worse off. The temporary replacement workers (aka scabs) may be a bit better off for a matter of weeks, but a very likely to lose their jobs in an indeterminate period of time, and they earn all the wrath, legal and illegal, that the union can muster.

Unionized employers rightly worry that paying their employees more than their non-union competitors can put them at a disadvantage, potentially one that could cause their businesses to fail. I am not convinced that this was the central cause of the current bankruptcy of Chrysler, the impending bankruptcy of GM if it can't meet a June 1 deadline against all odds to avoid that fate, or the earlier bankruptcy of Delphi, a major automotive parts supplier spun off from GM. Loss of market share, even when selling comparable vehicles for comparable prices, was more important. But, it is clear the unions in all three cases won contracts from their employers that gave them more than their economically declining employers were able to pay. Unions are leading creditors of automobile companies for all of the Big Three automakers.

It seems to me (and has since before I went to college) that there must be a better way to get a good deal for workers without bringing an entire segment of the economy to the brink of collapse every few years, although I don't claim to have any easy fixes.

Mandatory arbitration of employment contracts leaves open the option that one side or the other will get a deal that is truly unworkable for them, without regard to actual economic conditions, and can encourage negotiators to play chicken. Employee ownership has worked in some select situations, but those situations have some key elements (e.g. high levels of comparability between the contributions of each of the employee owners in a way that gives everyone very homogeneous interests) that many enterprises don't share. The German model gives employees a minority role in the company's board and often gives government an ownership stake (not unlike the model many bailed out American companies are approaching). The Japanese model, where employees are represented by relatively tame (illegal under U.S. law) company unions and shares risk with shareholders by receiving much of their annual compensation in profit sharing bonuses, in exchange for a stronger management commitment to limit management compensation and to provide lifetime employment to many employees if after all possible, is another approach which could work. The French model, with very powerful unions that frequently strike and often kidnap employers as a negotiating tactic, and where non-management workers are very hard to fire and have very generous vacations isn't obviously a good solution.

Most European countries simplify negotiations by providing many social welfare benefits through government rather than employers; Japanese and Chinese workers often have an even more comprehensive benefit package (often including employee housing and giving employers more of a role in employee's non-work lives, for example) than the neo-feudal American system where employees rely on employers for health care, many forms of insurance and pensions.

Notably, most governments operate the same way. Unless majorities in two legislative chambers agree, and often, until an executive branch officer decides not to veto appropriations bills, non-essential employees for the entire part of the government which lacks appropriations bills shuts down until there is a deal. Usually, as in union-management pacts, much of the deal making happens at the very last minute in some sort of omnibus deal as a shutdown looms. Every now and then, government shutdowns last for days or even months.

Indeed, it is something of a wonder that this doesn't happen more often. Nothing logically guarantees that there is a possible budget deal which can secure the necessary support from the right combination of elected officials, yet sooner or later, a deal is almost always reached. In contrast, with most other legislation, failure to act leaves a stable status quo legislative situation in place which can be determined unilaterally through the courts, so the survival of the government does not depend upon a deal being reached on any particular issue.

Part of the genius of federalism is that the vast majority of government employees in the United States work for local governments, with state government employees further divided by states and often by fiscally separate divisions of states (like public colleges and universities). The largest group of federal government civilian employees, postal workers, are also fiscally autonomous from the larger budget process. So, even when democratic government encounters that epic fail that is a government shutdown for some government, only a small portion of all government workers are furloughed and life goes on. This, of course, is also bad for government workers, despite the fact that it is almost never the fault of the government workers that elected officials can't agree on a budget.

The trick is how to decouple decisions so that they don't come down to potentially catastrophic must not fail individual negotiations, while at the same time, not getting a raw deal for workers and the public.

Stand Up Comedy and Intellectual Property

The intellectual property norms of stand up comedians are discussed here:

Does intellectual property law supply incentives to produce and distribute creative goods? In some salient contexts, the answer is "no" or, at least, "not so much." . . . stand-up comedians are creative and productive folks who live by a system of social norms, rather than by a system of intellectual property law.

Not only does this comic code encourage creativity, it also apparently has something to do with comedy itself. . . . Comedy once was a commons, but social norms privatized its contents.

The changes are attributed to changes in how comedy was delivered to the public (e.g. ablums), in the 1960s.

This discussion is part of the larger discussions of the divergences between living law and statutory law, and of the inadequecy of modern intellectual property law (and in particular copyright) to stike the right balance between protecting ideas and allowing ideas to be shared, through overproduction of intellectual property rights.

Elegant International Tax Reform

A good deal of the press coverage of the Obama administration's proposed international taxation reforms suggests that they are little more than a crude tax grab that tries to get revenue from transactions that other developed countries don't even bother to tax.

A May 6 posting by tax professor and tax blogger James Edward Maule (which I didn't have time to blog when I first read it), however, suggests that the international tax proposals involve more good tax policy and conceptual elegance than general press coverage of the proposals would suggest. Sometimes long winded Maule manages to sum up this major international taxation reform package in just a few words (references to non-international tax law proposals omitted):

The changes would require companies that defer taxation of foreign income to also defer deductions, would preclude the foreign tax credit . . . for foreign taxes paid on income not taxed by the U.S., would prohibit companies from treating certain foreign subsidiaries as disregarded entities for tax purposes . . . and . . . would require U.S taxpayers who transmit money to banks that do not cooperate with the U.S. Treasury to rebut the presumption that they were engaging in tax fraud. . . .

What is the sense of permitting taxpayers to defer taxation on foreign income while claiming current deductions for foreign expenses? Taxpayers who want to claim deductions in the current year should also report and pay tax on the income. Taxpayers who want to defer the income should defer the deductions. Not only does this make sense, it is fair.

What is the sense of permitting a foreign tax credit with respect to income on which U.S. income tax has not been paid? Is not the purpose of the foreign tax credit to reduce or eliminate double taxation of the same income by both the U.S. and a foreign nation? Where is the double taxation if there is no U.S. taxation of the income?

What is wrong with shifting the burden of proving the lack of tax fraud to individuals and companies that stash money in banks that advertise their willingness to thwart tax collectors? Should people who do business with enablers of tax fraud be blessed with a presumption of good intentions such that the IRS should have the burden of showing the fraudulent purpose? There are plenty of places to invest money that aren't trying to hide from the IRS. People who choose to do business with the tax evasion specialists ought not be complaining.

International tax is rocket science. Indeed, it is quite a bit more difficult. My fourth grader studies rocket science at school, while just starting to study how to calculate domestic sales taxes (let alone international tax law). But, these reforms are a model of simplicity for the field, and this gives them considerable political power, if this message can get through to political opinion makers.

Gravitational Waves Subtle

One of the most important unproven experimental predictions of mainstream modern physics is the existence of gravitational waves.

This matters quite a bit, because gravity is at the root of a lot of unsolved problems of modern physics.

The observed phenomena called dark matter and dark energy both flow from the differences between what we would expect to happen as a result of gravity with what we can see, and what we atually see through telescopes (and similar instruments).

The two undiscovered particles of the standard model of particle physics are the graviton (a hypothetical equivalent of the photon for gravity), and the Higgs particle, which governs mass and inertia. Particle physcists are hard at work on this problem.

Gravity waves are hard to detect because their effect is subtle:

To detect a general background of gravitational waves, astronomers would need to monitor 20 millisecond pulsars for five to 10 years, with the arrival time of the radio waves determined to an accuracy of 100 nanoseconds, Jenet estimates. Recording gravitational waves from a pair of merging supermassive black holes would require five pulsars with radio wave arrival times known to an even higher accuracy, 10 nanoseconds, he adds.

“We currently have about 20 millisecond pulsars, but only five of these can be timed to the needed precision[.]”

Several big budget efforts to observe gravitational waves have thus far failed to see them, despite the fact that the theory necessary to predict them and quantify their magnitude has been in place for 94 years, and has been confirmed in a wide variety of other contexts.

In contrast, the speed of light was known with precision from direct measurement prior to 1850. Phenomena that either produced the right number, but lacked a well established theory to tie it to the speed of light, was in place more than a century earlier. A theoretical basis for determining the speed of light from unrelated easier to observe constants, and many of light's other properties was in place by 1864 (Maxwell's Equations).

We understand the weak nuclear force, which was discovered much later than general relativity and electro-magnetism, much better than we do gravity, although the fourth fundamental force of nature, the strong nuclear force is, like gravitational waves difficult to observe directly.

Gravitational waves are less controversial than many of the unsolved problems of modern physics, however, because all serious scientific explanations of gravity predict that gravity will have waves at more or less the same order of magnitude. This is because any mathematical model that reproduces the conclusions of general relativity that have been confirmed by experiment must have this feature.

In addition to confirming existing accepted theories, the detection of gravitational waves and experimental confirmation of the speed at which they propogate would be an important data point to understand the properties of the cosmos and particle physics. Light propogates at different speeds in different media. Gravitational waves are believed to have the same speed of light speed in a vacuum, but the impact of different media on this propogation is not experimentally established. They could also serve as a medium similar to different frequencies of light waves, with which to observe the early universe telescopically.

Work Life Balance

The University of Michigan Law School, from which I have my law degree, ranks ninth on the academically oriented U.S. New and World Report rankings, and eight on rankings of the best party law schools. Michigan along with UC Berkley are the only top law school in the nation ranks so high, and have such similar ratings for both work and play. Michigan's work hard, play hard ethos, lives on.

All Over But The Vetoes

The Colorado General Assembly's work for the 2009 session is over. I haven't yet dug through the last minute results to see what did or didn't pass. The Governor may still, however, veto bills passed at the end of the session (including line item veto power over the budget). Also, if the economy deteriorates sufficiently to make the state budget unworkable in a way which could be assisted by legislation, a special session could be called to seek further legislative input on dealing with budget shortfall, before the legislature reconvenes in January 2010.

For the record, I oppose the practice of limiting the legislative session to 120 days. It reduces public input by all but the most organized members of the public into the process, and reduces the power of the legislative branch to deviate from the agenda set when bills are introduces in the first few days of the session.

Also, in this non-agricultural era, it is impossible for practical purposes to have a true citizen legislature even with four month legislative session. Few people can hold down ordinary jobs will taking off 120 days a year, even if legislative pay rivals four months of day job income. Almost all jobs are designed to require work all year. There is also a great deal that general assembly members do in the "off season." Constituent concerns, for example, must be addressed all year long, and bill drafting takes place mostly in the fall.

Neoliberalism

Washington Monthly, spurred into action by David Brooks (announcing its death) and Ezra Klein (noting how ineffectual the movement appeared to be), reexamines the notion of the neoliberal, a political counterpart to the idea of the neoconservative, which the magazine promoted starting around 1983 when it published The Neoliberal Manifesto.

The notion articulated, of someone with liberal values, but instincts that are pragmatic, unorthodox, empirically driven and averse to dividing the world into friends and foes captures rather closely my own take on politics. But, the standard bearers for this cause, and the dubious, wonky proposals offered up as examples of it, in the original manifesto are not impressive. Also, as Klein explains (only a little tongue in cheek), "the true Washington Monthly brand of neoliberalism got overtaken by Michael Kinsley and Andrew Sullivan and folks like that at the New Republic, and that became the association. The DLC too, to some degree, but that was incorrect." This helps explain why the term never really caught on.

The "true" Washington Monthly brand of neoliberalism may have a future, but the brand is irrevocably tarnished.

Forgiveness Education

Over at the Concurring Opinions blog, Solangel Maldonado makes a thought provoking two part argument for forgiveness encouraged by the government in post-divorce group therapy sessions (secular as well as religious). More parts are planned. Maldonado notes that forgiveness can reduce conflict that harms children and stress that harms those who don't forgive and states:

Participants in forgiveness interventions have reported fewer negative feelings toward the injurer than the control group. They have also reported a greater willingness to forgive. One forgiveness intervention, Forgiveness and Divorce: Can Group Interventions Facilitate Forgiveness of a Former Spouse?, assigned 149 divorced individuals to one of three groups (1) a secular forgiveness group, (2) a religiously integrated forgiveness group, or (3) a wait-list control group. The group sessions discussed feelings of betrayal, coping with anger towards the former spouse, forgiveness education, preventing relapse (holding on to forgiveness), and closure. Although there were no differences between the secular and religiously integrated forgiveness groups, participants in these two groups self-reported similarly higher levels of forgiveness and lower depression than the wait-list control group.

Many states require divorcing parents to participate in parenting education and mediation of custody disputes, in part, to reduce inter-parental anger and help parents understand how their anger negatively affects their children. Given the potential benefits of forgiveness, lawmakers should consider requiring, or at least recommending, that angry, divorced parents participate in forgiveness interventions.

The proposal stirs skepticism and distrust in me at a gut level for multiple reasons. Is forgiveness really a secular concept? Are personal feelings that go with forgiveness any of the government's business? Isn't this a matter of freedom of conscience? Do government "suggestions" work? Is lack of forgiveness a root source of conflict between divorced couples, rather than a symptom? Does this approach hurt the victim? Is it forgiveness that matters or is it really a focus on what is possible going forward? How do changes in post-divorce dynamics impact dynamics during marriages? Does allowing oneself to be depressed over the loss of a past marriage impact how seriously one will treat future relationships? How much of high conflict divorce is a product of poor social and parenting skills generally, and how much of high conflict divorce truly is a product of how ex-spouses voluntarily choose to respond to the end of a marriage? Does divorce law expect too much from the co-parenting skills of divorced couples?

I'm not saying that this proposal is wrong. Indeed, it sheds lots of new light on the questions presented. But, neither is it self-evident.

My Attorney Bernie

My Attorney Bernie
Words and Music by Dave Frishberg

I'm impressed, with my attorney Bernie
I'm impressed, with his influential friends
He's got very big connections
and I follow his directions
Bernie knows his way around
and so I always do what Bernie recommends.
I am blessed, with my attorney Bernie
I'm impressed, with the way he runs the store
He's got Dodger season boxes
and an office full of foxes
It's amazing all the different things
your average guy might need a lawyer for.

[Chorus:]
Bernie tells me what to do
Bernie always lays it on the line
Bernie says we sue, we sue
Bernie says we sign... we sign.

I'm in touch, with my attorney Bernie
In a clutch, he can speed right to the scene
and if I'm locked up in the jail
with just one phone call for my bail
he said to call his club collect
or deal directly with his answering machine

When I dine, with my attorney Bernie
He buys wine, from the rare imported rack
That's cause Bernie is a purist
not your polyester tourist
Bernie waves the glass around awhile
then takes a sip and always sends it back

[Chorus:]
Bernie tells me what to do
Bernie always lays it on the line
Bernie says we sue, we sue
Bernie says we sign... we sign.

I admire, my attorney Bernie
I admire, any guy who knows his stuff
Sure we blew a couple ventures
with a counterfeit debenture
But you win a few, you lose a few
and like Bernie says you keep on hanging tough

Thanks to you, my attorney Bernie
Thanks to you, I'm considered well-to-do
Sure I made out like a bandit
Just exactly like you planned it
But like Murray my accountant
told me yesterday, I owe it all to you.

[Chorus]
On the dotted line.

While the lyric is satirical and less than kind to Bernie and by association attorneys, I still like it because it speaks to what is going on in the relationship between the attorney and the client, which is where attorneys spend most of their time, rather than the communications between attorneys and adversaries or in court, where most people form their impressions of them.

Obama Good For Stock Market

Index ------Jan 20, 2009--May 4, 2009--% Change

NASDAQ ------1,440.86----1,763.56--- +22%
S&P 500 -----805.22--------907.24--- +13%
Dow Jones ---7,949.09----8,426.74--- +6%

From here.

When President Bush took office on January 20, 2001, the NASDAQ was at 2,770.38, the S&P 500 was at 1342.90, and the Dow Jones was at 10,587.60.

Cognitive Capture

Why has Treasury Secretary Tim Geitner taken a top firm bailout approach he has to the financial crisis, despite the fact that it creates an appearance that the federal government is catering to executives who get rich bonuses?

One blogger has pointed to Tim Geitner's close personal ties to powerful people on Wall Street play an important role and then gone on to note a commentator who states that "the cognitive capture theory (as opposed to the corruption theory)," best explains his actions. (Hat Tip to Steam Powered Opinions.)

The observation is an important one with practical implications.

Most efforts to regulate political influence, sponsored by organizations like Common Cause, implicitly or explicitly rely on a corruption theory of political influence. Politicians, the theory goes, act contrary to constituent best interests because they have been bribed to do so with campaign contributions or personal gifts. Remove this financial bias from the system with viable threats of criminal or quasi-criminal punishments, they argue, and politicians will serve the public good.

But, nobody informed about the fact argues that Geitner is corrupt in the conventional sense. He is a political appointee who probably spent less money getting his job than the average Colorado General Assembly candidate courting a vacancy committee and was entirely self-funded in that effort. He turned down opportunities to make multi-million dollar bonuses himself as a big bank CEO. No one is suggesting that he has received inappropriate personal gifts. There is not even any evidence that he has carried out his duties in anything other than earnest good faith. Yet, he has also not acted as progressive proponents of good government through reduced corruption would expect him to act in the absence of corporate influence.

If cognitive capture is a more important factor in explaining political decision making, than corrupt influence, then the sensible solutions for advocates are much different. It explains, for example, as courtiers and lobbyists have known since before the feudal era, why face time and access are more important in the influence game than financial resources. The task is not to prevent financial influence of decision makers, but to expose decision makers to alternative, independent ideas in an effective way. It is to make appointments to positions of power in a way the selects people who can empathize with ordinary members of the public whom the appointee stands in for vis-a-vis a particular industry. It is to recognize that that the team players with a shared view of how the world work that are so effective when working together on a board of directors for a company, may fall prey to group think and complacency in a regulatory role.

There is more to decision making than the behavior of the economic rational actor. Anthropology matters as much as econometrics. If one wants to have influence politically, one needs to get one's memes into the world of political thought, and get those who give those memes some credibility into positions of power. Moreover, in the big political picture, one has to stop criminalizing politics and demonizing your potential allies, with a discourse of corruption, and instead figure out how to engage in a discourse that makes powerful people more wary of the risks of cognitive capture.

Business in Popular Culture

You are a young rising star in the manga publishing/anime producing business, recently promoted to chief operating officer by a CEO and owner with other things on his mind. You were a business school legend. You are feared and loved by your employees for your hard work, exacting standards and public willingness to exact consequences for failure, muted by private acts of mercy.

Your idea for a prime advertising contract is stolen by a competitor. You bounce back and secure the contract with an idea you secure over a beer from a promising young story teller who has inspired your newly hired, critically acclaimed graphic artist. The idea, which you recognized as valuable, wins you the contract. You pay the story writer after the fact for what his contribution was worth to your company, at a time when he direly needs money, and hire him on.

All looks good for your company as the story teller and graphic artist collaborate perfectly to develop an idea for a major new multi-media product. A group of investors put tens of millions of dollars into this new project to give it a splash opening, but with tight strings as you are an unproven company in this field.

Then disaster strikes. A reckless accident caused by your story teller costs your bankable graphic artist star the ability to draw, and makes your story teller despondent and unable to work. Your company's two most valuable creative assets are out of commission. You lie to your investors telling them that all is well for the first couple of weeks. You break the news carefully to your loyal and hardworking staff, explaining that their jobs and the company are on the line. Without telling you, your loyal staff finds new investors who save the deal. They reveal this to you only as you walk, head held high, into a meeting with investors whom you expect to economically ruin you and the company, now that they have learned that they were deceived early on and have missed contract deadlines.

You move heaven and earth to find a way to use your graphic designer's star talents again, despite a permanent injury and despite having become emotionally frozen. You prevail, the company is saved and a new big dollar production beckons.

This storyline is more Harvard MBA case study than TV miniseries, but this key subplot of the 2006 Korean Drama Someday isn't all that atypical in Korean and Japanese popular culture, where the travails of business people and office workers at work are explored in much greater depth than in comparable U.S. popular culture genre. With the notable exception of the movie "Jerry McGuire," and a few biopics about business people, the dramas the happen within the office are usually deemed by Hollywood and New York to be unworthy of popular culture treatments. In the U.S., we like to keep our work and our play separate, or at least, at odds with each other.

While American popular culture is as rich as any other when it comes to role models for growing up, falling in love, solving crimes, and responding to disasters, it has barely started to have a conversation about business ethics and business success, outside the non-fiction self-help genre. These kinds of plots don't fit easily into the American ecology of popular culture genres. They don't have a home that seeks out and nurtures and demands these stories.

Too often, American business writing falls into the trap of implying that business is all about numbers and charts, without capturing the human dimension of this activity which is critical to our society's survival, which consumes a large share of a large number of people's daily lives. This lack also hurts our public life, leaving the general public without a living language of references to talk about and think about how our economy works in any detail at the level of individual workplaces and business decisions. We have documentaries that disclose corporate malfeasance, but few positive role models, and few discussions of the ambiguity the pervades real life business decisions that managers must lead us all through.

Perhaps the real life divide between the business managerial class and the rest of the workforce in the United States has left us in a state where the decisions of the bourgeois have been rendered irrelevant and uninteresting to everyone else. Writers in the U.S. are taught to write what they know, but apparently not many writers and publishers know about this part of American life. Perhaps the discussions that happen in the U.S. are different in our more mature and perhaps more stagnant economy, than in more recently transforming economies in Asia. Or, perhaps there is room for a new popular culture of business to emerge in the United States that is still untapped. I find the translated business stories we receive from across the Pacific engaging, thought provoking, and relevant to my work life in business law. Perhaps, others would too.

Study Reveals Africa's Genetic History

A new study has confirmed and better quantified the long standing assertion that Africa has more human genetic diversity than any other place on Earth, and shed light on the ancestral roots of African-Americans.

Africans are more genetically diverse than the inhabitants of the rest of the world combined, according to a sweeping study that carried researchers into remote regions to sample the bloodlines of more than 100 distinct populations.

The report, published yesterday in the journal Science Express, suggests that, because of historical migrations and genetic mixing across the continent, it will be hard for African Americans to trace their ancestry in fine detail. . . .

The first anatomically modern humans originated in Africa about 200,000 years ago, and all humans today are their direct descendants. The study points to an area along the Namibia-South Africa border, the homeland of the San people, as the starting point for a southwest-to-northeast migratory route that carried people through Africa and across the Red Sea into Eurasia.

Tishkoff said the new findings will help medical researchers tailor drug treatments for different groups of Africans rather than treating them as homogenous.

"This is an absolute landmark. It's incredible," said Alison Brooks, a professor of anthropology and international affairs at George Washington University. "It's the most comprehensive document ever published describing the very complex issue of African genetic variation." . . . Although the study's main focus was on Africa, Tishkoff and her colleagues studied DNA markers from around the planet, identifying 14 "ancestral clusters" for all of humanity. Nine of those clusters are in Africa. "You're seeing more diversity in one continent than across the globe," Tishkoff said.

Her team looked at 98 African Americans from North Carolina, Baltimore, Chicago and Pittsburgh. The researchers determined that, on average, 71 percent of their genes could be traced to the far-flung African linguistic group Niger-Kordofanian, 8 percent to other African groups and 13 percent to Europe, with a smattering of genetic markers pointing to other places on the globe.

But the percentages vary widely from individual to individual. In a conference call with reporters, Tishkoff said the 13 percent figure for European genetic markers may be a slight underestimate; other studies have found numbers closer to 20 percent.

The study may be close to the best evidence that humanity will ever get of its genetic roots. As time passes, human migration in a modernizing African will make connecting individuals to their ancestral homes more difficult and hence muddy the data that benefits for centuries of geographically stable and isolated populations.

Wanted: One Supreme Court Justice

Justice Souter has tendered his resignation from the U.S. Supreme Court, effective this summer, so the race is on to fill the first U.S. Supreme Court vacancy of the Obama Presidency. Souter is one of the four judges who make up the liberal wing of the U.S. Supreme Court, despite the fact that Souter was appointed by George H.W. Bush, so the balance of power on the court will not be upset by an Obama appointment.

Moreover, given that there will be sixty Democrats in the U.S. Senate when the appointment is voted upon by the Senate, Obama has a free hand to make an appointment without worrying about a Republican led filibuster of an appointee.

The Souter resignation also increases the likely total number of appointments that President Obama will get to make during his term of office. Justice Souter is relatively young and in good health, unlike a number of is peers on the nation's highest court.

Chrysler Files For Bankruptcy

Debt holders, believing that they could get a more fair deal in bankruptcy court, refused to sign on to a non-bankruptcy reorganization of Chrysler, forcing the automaking into a Chapter 11 bankruptcy today, a deadline for obtaining new government financing conditioned on a viable non-bankruptcy deal. The big players in the bankruptcy, and a sketch of the expected reorganization plan which is described below.

[A] holdout group wouldn't budge on proposals to reduce Chrysler's $6.9 billion in secured debt. . . .

Chrysler will file for Chapter 11 bankruptcy protection in New York, giving Chrysler time to galvanize a partnership with the Italian car maker Fiat Group SpA. The government, which has already poured $4 billion in loans into Chrysler, would provide up to $8 billion more to carry the company through bankruptcy . . . . The government will also help appoint a new board of directors. . . .

[T]here would be no job losses or plant closing due to the Chapter 11. But it will be up to Fiat and Chrysler to decide whether to restructure the steadily shrinking company. . . .

Chrysler Financial, the arm of the company that makes loans to buyers and to dealers to finance their inventories, will be merged into GMAC Financial Services, once General Motors Corp.'s finance arm. The new GMAC will get government support. . . .

[T]he United Auto Workers ratified a cost-cutting pact Wednesday night.

Treasury reached a deal earlier this week with four banks that hold the majority of Chrysler's debt in return for $2 billion in cash. But the administration said about 40 hedge funds that hold roughly 30 percent of that debt also needed to sign on for the deal to go through. . . . the Treasury Department and the four banks tried to persuade the hedge funds to take a sweetened deal of $2.25 billion in cash. But in the end, this person said most thought they could recover more if Chrysler went into bankruptcy and some of its assets were sold to satisfy creditors. . . .

Fiat will obtain a 20 percent stake in Chrysler in return for giving the company access to its fuel-efficient technology, a move toward cleaner cars that the Obama administration thinks is critical to Chrysler's future survival. The company has committed to building Fiat cars in Chrysler factories, to be sold as Chryslers. . . . The administration expects [the bankruptcy] to last only up to 60 days.

Obama's auto task force in March rejected Chrysler's restructuring plan and gave it 30 days to make another effort, including a tie-up with Fiat. The company has borrowed $4 billion from the federal government and needs billions more to keep operating.

The UAW agreement, which would take effect May 4, meets Treasury requirements for continued loans to Chrysler Corp., and includes commitments from Fiat to manufacture a new small car in one of Chrysler's U.S. facilities and to share key technology with Chrysler.

Meanwhile, the Fiat partnership means Chrysler CEO Robert Nardelli could be out of a job. In an April e-mail to employees, he said that if the deal is completed, Chrysler would be run by a new board appointed by the government and Fiat. The new board, Nardelli wrote, would pick a CEO "with Fiat's concurrence."

Secured debt holders are entitled to payment equal to the fair market value of their collateral in a Chapter 11 bankruptcy reorganization plan, and generally speaking have a claim to those assets that has priority over all other claims, unless they receive a substitute payout of reasonably equivalent value.

In a Chapter 11 bankruptcy, the firm continues to operate, assets can be sold in a manner definitively free of any legacy obligations, union-management contracts may be breached, and debts can be compromised. Company management has the exclusive right to propose a plan of organization, which creditors must accept if a majority of claims by value in each class of creditors agree to the plan, or if a class of creditors receives no less than what would have been received if the company was liquidated. Companies making loans for funds received after a bankruptcy have priority as an administrative expense over all debt not secured by collateral.

Part of what makes the Chrysler bankruptcy atypical is that most of Chrysler's debt is secured by collateral. Publicly held companies generally favor bonds not supported by any specific collateral for financing, rather than the secured financing that Chrysler has, which is more typical of a privately held firm like Chrysler. At GM bondholders have essentially the same entitlements in a Chapter 11 bankruptcy as employee health care trust obligations, for example, while at Chrysler, financing debt has priority over the company's other obligations to the extent of the collateral.

The gamble that the hedge funds are taking is that a New York City bankruptcy judge will agree with them on what their collateral is worth. Given the downturn in the automobile industry, the limited usefulness of automobile industry assets to anyone else in or outside the industry at this point in time, that is a serious gamble.

Meanwhile, bondholders at General Motors are also balking over the deal that they have been offered in the GM non-bankruptcy reorganization plan, so it may be necessary for it too to file for Chapter 11 bankruptcy in a matter of days or weeks.

While car warranty liabilities are, in theory, subject to discharge in a Chapter 11 bankruptcy, it is highly likely that the plan of reorganization will fully reaffirm these debts in order to sustain consumer confidence in the post-bankruptcy company, and to prevent every warranty holder with a car from the company from becoming a claimant in the bankruptcy.

The third of the Big Three American automobile makers, Ford, has not received government funds to bail it out and is not believed to be planning an imminent bankruptcy.

Northeast GOP Withered

Kos has done what I had been about to do, a detailed factual analysis of how many electoral votes and elected offices Republicans hold in the Northeast in the wake of Arlen Specter's party switch to the Democrats.

Presidential: 5 of 119 electoral votes

West Virginia was the only state to give its electoral votes to John McCain. The closest any of the other states came was New Hampshire, where Obama won by an easy nine points.

Senate: 3 of 24 seats

Two in Maine, one in New Hampshire. That NH seat will flip (D) in 2010. The two Maine senators, now alone in a hostile GOP, are candidates for future party switches. Especially Sen. Olympia Snowe.

House: 18 of 95 seats

Seven of those are in grossly gerrymandered Pennsylvania, and five in grossly gerrymandered New Jersey.

Governors: 3 of 12 states

Voters in liberal Connecticut, Rhode Island, and Vermont have elected Republican governors in large part as a check on the hugely Democratic state legislatures.

State Legislatures: 1 of 24 chambers, 815 out of 2,347 total seats

CT:
House 114D-37R
Senate 24D-12R
DE:
House 114D-37R
Senate 25D-16R
ME:
House 96D-54R-1I
Senate 20D-15R
MD:
House 104D-36R-1I
Senate 33D-14R
MA:
House 143D-16R
Senate 35D-5R
NY:
Assembly 107D-41R-2I
Senate 32D-30R
NH:
House 224D-174R
Senate 14D-10R
NJ:
Assembly 48D-32R
Senate 23D-17R
PA:
House 104D-98R
Senate 30R-20D
RI:
House 69D-6R
Senate 33D-4R-1I
VT:
House 95D-48R-7I
Senate 23D-7R
WV:
House 71D-29R
Senate 28D-8R

So of 24 chambers in the region, Republicans only hold the grossly gerrymandered Pennsylvania Senate. In fact, count all the seats in the region, and Democrats hold 1,532 total seats compared to just 815 for the GOP.

Republican Party:

In the latest edition of the Daily Kos/Research 2000 weekly poll, Republicans fared as follows in the Northeast:

Republican Party
Favorable 8
Unfavorable 85

Congressional Republicans
Favorable 8
Unfavorable 80

Kos understates, I think, the extent to which upstate New York and Western Pennsylvania (particular in Pennsylvania's piece of Appalachia) are genuinely conservative, rather than merely gerrymandered, and the extent to which Appalachian West Virginia is much more conservative than its slate of Democratic Party elected officials suggest on an important subset of political issues. The long primary fight between Hillary Clinton and Barack Obama, more than anything else reflected this divide even within the Democratic Party. The 2012 election, after redistricting in the wake of the U.S. Census, will reveal how much the outcomes in those states were impacted by gerrymandering.

But, he also understates that extent to which a good share even of those Northeastern Republicans who remain in the U.S. House and as Governors are moderates in their party, far to the left of the Republican mainstream. On key votes and issues, these moderates can often be persuaded to vote with Democrats, although they generally vote with their party on procedural issues and issues of less importance.

On the other hand, as my Bostonian brother explained to me, in Massachusetts and other states where the Democratic Party is the dominant party, many fairly conservative candidates choose to affiliate with the Democratic Party because it is the politically opportune thing to do. Outside of New York State, where candidates run under multiple party banners at the same time, these ideological distinctions escape cursory review of party affiliations.

If the Republican Party were not so far out of the ideological mainstream of the Northeast, it would be politically viable in much of the Northeast. But, instead, as noted by a diarist at Colorado Pols, the prominent members of the public face of the Republican political movement are urging the ouster of the few moderates or apparent moderates that remain in the GOP -- even 2008 GOP Presidential nominee John McCain -- in the name of ideological purity. As previous noted at this blog, about half of Texas Republicans aren't even interested in remaining in the United States.

In sum, the GOP and particularly the conservative wing of the GOP, is in real trouble in the Northeast, despite the fact that the Northeast was a core of Lincoln's Republican Party, which continued to remain vibrant and competitive on a partisan basis at least until Goldwater ran for President (in the late 1960s). This trend shows no sign of reversing itself, and is spreading to most of the country outside the South, including Colorado. The state of the Republican party is bad nationally too: "The number of Americans identifying themselves as Republicans has slipped to a quarter-century low of 21 percent."

It is also worth noting that Democratic Party strength in the Northeast involve majority or near majority support among non-Hispanic whites, many of whom are quite affluent. The Northeast has a disproportionately high white Catholic population, and these days abortion is the only issue keeping even many "independent" Catholic voters on the fence between the Democratic and Republican parties.

In contrast, in many Republican strongholds in the South, the Democratic party receives less than 10% of the non-Hispanic white vote, while the Republican Party receives almost no support from Hispanics and from non-whites. Likewise, in the places where the GOP is strongest, conservative Christianity is at the heart of the reasons that supporters stick with the Republican Party. Where Republicans remain strong, it is because they are engaged in tribal politics, rather than debating over ideas within particular ethnic and religious groups.

I wonder what would happen if the Republican elected officials of the Northeast were to band together to form a new political party, the Lincoln Republicans, or some such.

While the simple member district plurality voting system overwhelmingly used in partisan races in the U.S. inherently favors a two party system in any given geographical area, the examples of Canada and the United Kingdom illustrate that those two parties do not have to be the same in any particular geographic area. A system in which the South had one leading conservative political party, while other regions had a different leading conservative political party, would be stable in our electoral system.

It would certainly be more interesting if our nation evolved into a three or four party system, with just two dominant political parties in any one state, rather than the current two party system.

What Does It Take To Stop Global Warming?

If you want to limit the risk of exceeding 2 degrees C global warming to one in four, or 25 percent, then total CO2 emissions over the first half of the 21st century have be kept below 1,000 billion tons,” said Malte Meinshausen, a climatologist at the Potsdam Institute for Climate Impact Research in Germany . . . . Between 2000 and 2006, human activities emitted about 236 billion tons of carbon dioxide, the researchers estimate. “Only a fast switch away from fossil fuels will give us a reasonable chance to avoid considerable warming,” Meinshausen says. . . . The researchers also estimate that limiting cumulative carbon dioxide emissions between now and 2050 to no more than 1 trillion tons would actually leave three-fourths of the world’s known reserves of oil, gas and coal in the ground unburned — unless techniques for capturing and sequestering carbon dioxide underground rather than dumping it into the atmosphere become commonplace in the future.

From here.

We have 764 billion tons left to emit over the next 41 years, which implies a rate of a 18.6 billion tons per year. We have been emitting at a rate of about 34 billion tons per year. So, we need to reduce emissions by more than 50% to ward off catastrophic global warming by 2050 with a reasonable probability. If the developing world and third world are to make any development progress over the next four decades, moreover, that means that the fossil fuel use per unit of economic productivity, must decline by much more than 50%.

A switch away from fossil fuels means producing electric power with a far larger share of nuclear power and renewables, and means a wholesale shift from gasoline and diesel fueled cars and trucks, through a combination of reduced travel, more fuel efficient vehicles, public transportation, rail rather than road travel, and alternative fuel vehicles.

DNA Loses Rocky Subscribers

The Denver Newspaper Agency, which handled business operations for the Denver Post and Rocky Mountain News under their joint operating agreement, automatically transferred Rocky subscribers to the Post when the Rocky folded. But, many have not stayed.

[O]verall paid weekday newspaper circulation for 395 national newspapers in the past six months was down by 7 percent compared with the same period a year ago, as increasing numbers of advertisers “grow disenchanted with newspapers and seek other ways to get their message across to potential customers.”

Yet following the closure of the Rocky Mountain News in February, The Denver Post seems to be holding on. It’s now the 11th largest newspaper in the nation in terms of weekday circulation, according to the Denver Business Journal, selling an average of 371,728 copies a day since grabbing Rocky customers under a joint-closure deal.

Still, that’s 17 percent less circulation than when both newspapers were available . . . as Westword’s Michael Roberts points out, “the circulation would have to pretty much stabilize where it is to keep hope alive–and no industry observer I know expects that to happen.”

Assuming that the circulation losses have come primarily from former Rocky subscribers, that means that almost one in three Rocky subscribers have not replaced that subscription with a Post subscription. Some of those losses come from people who used to get both papers, an inevitable loss with the closure of one. But, one doubts that anywhere near one in three Rocky subscribers had previously taken both papers.

One particularly interesting business model, somewhat similar to that of the Denver Daily News is that the plan of the Colorado Springs Gazettte to publish a free minipaper called Ink that can be read in ten minutes.

One of the op-ed writers at the Post recently speculated that the decline in newspaper reading was due to people not taking the time to eat a reasonably length breakfast at which they could read one, and that the earlier decline of the afternoon paper was likewise due to the decline in time after work and before dinner to read one. People with less leisure time have less time to read a full paper.

I don't agree with David Milstead, former Rocky Mountain News business columnist, who predicted the demise of the Post less than two years after the demise of the Rocky.

Until the financial crisis hit advertising, particularly for the automobile and real estate industries that make up a large share of print advertising in newspapers, Denver was uncomfortably but on a break even basis, supporting $28 million a year of newsroom costs for two newspapers, and was confident enough in the stability of that income stream to build a fancy new building for the Post, the Rocky and the DNA, and to invest in new printing facilities.

Those industries may come back with a whimper that does not fully restore the lost revenue. It will take time for a recovering metropolitian Denver economy to use up the overhang of extra building capacity that developed at the peak of the construction boom. And, many car dealers will be shuttered as GM and Chrysler are forced to trim their operations to survive (one or both may even cease operations), and othere automobile companies follow suit to avoid having excessive dealer level costs.

Still, the Denver papers will not be hit as hard as those in rural areas, where populations are declining, a disproportionate share of the less profitable car dealerships are located, and there is little room to downscale already tiny newsrooms without going out of business.

It is possible to run a newsroom that can cover, at least, metropolitan Denver for $10 million, albeit with deep cuts in quality and depth from the $14 million per paper that used to be spent, and the demand for newspapers isn't going away overnight. Newspaper subscriptions and ad revenues are falling, but I don't think that funds available for the newsroom go down by two-thirds in a post-recession economy anytime soon. Also, a single primary newspaper has more leverage as a near monopoly to increase subscription rates and advertising charges, and also has more clout to adjust laws and regulations to its benefit -- for example, to require that legal notices be placed in newspapers of wider circulation and regain that source of revenue, now lost to many niche papers that few people read, like the Colorado Statesman.

The result may be a smaller circulation, more highbrow newspaper, but I don't think that Denver will be without a newspaper of record any time soon.