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Friday, May 31, 2013

Why Does TSA Makes Competition Incredibly Difficult? Self-Preservation

A menace to society

A major component to bureaucracies (and human nature) that makes them so hard to control is the fact that every person, manager, and department is acting; not for the people or customers; but in the interest of self-preservation.
Whether consciously or not, every employee wants their position to add "value" so it is deemed to be redundant and eliminated. This mentality works its way up the chain until every department is trying to validate its own existence.
While this is true for individuals employed in the private sector as well, their actions culminate in products that are desired in the marketplace. If an employee is genuinely not adding value (or adding less value than their wages reflect) the resulting product would be of inferior quality and would fail in the marketplace. To remedy this, that individual would likely be fired before having that profound of an effect on the end product.
This situation doesn't play out in government. Because most government products are not subject to market demands, citizens must take what is provided. Additionally, government is not paid according to the value of their products, they are paid what according to what politicians decide and with money its citizens are compelled to contribute.

Short of explaining the entire theory behind capitalism, this is all a long introduction to the TSA and this interesting piece from Bob Poole of the Reason Foundation.

TSA Putting New Hurdles on Road to Screening Opt-Out

Despite Congress more than a year ago directing the TSA to speedily process airport applications to use TSA-certified screening contractors under its Screening Partnership Program (SPP), the agency appears to be stone-walling. Industry sources tell me that even though applications have been approved for six airports, not a single new SPP contract has been awarded by TSA since the 2012 legislation (part of FAA reauthorization last February) was enacted.

In some cases, procurements that were under way have been pulled back, to be re-started at some unnamed future date. That's the case for a four-airport Montana solicitation begun last October, due to be completed by the end of February 2013. Not a word was heard during March, but finally, on April 17th, contenders received a letter from TSA cancelling the procurement and saying it would be re-started at a later date. Orlando-Sanford's approved application is still without a contract solicitation and Sarasota-Bradenton application awaits action.

What appears to be happening is that TSA while TSA has adhered to the letter of the law contained in last year's legislation directing actions on applications, it has come up with a new hurdle for airports and contractors to surmount: a "cost-efficiency" factor. At the April 12th bidder's conference for re-bidding the SPP contract for San Francisco (SFO), bidders were told that no contract will be awarded unless it meets TSA's cost-efficiency target. The same provision was added at the last minute to the requirements for re-bidding the Kansas City contract earlier this year.

What this means, exactly, is not yet clear. It appears that TSA has taken language from the SPP provisions of the 2012 FAA bill and used it to create a requirement that no SPP contract will be awarded if the cost to the government would be higher than what it currently costs TSA to provide screening at the airport in question. Taken at face value, that sounds uncontroversial. But as the GAO has pointed out in several reports, TSA still has not fully and accurately reported all its screening costs, and TSA still claims that its own screening costs less than contract screening under SPP.

In its 2008 study (GAO-09-27R), the agency faulted TSA's cost comparisons for omitting the cost of overlapping TSA administrative staff at SPP airports, and failing to include TSA costs for workers' comp, general liability insurance, and some retirement costs. Not mentioned in this report, but relevant to accurate cost comparisons, TSA also does not include the cost of using its screener flying squad (the National Deployment Force) to fill in at TSA-screened airports. In March 2011, GAO reported that TSA had "made progress in addressing the limitations related to costs" (GAO-11-375R), but still had work left to do. GAO's most recent report in December 2012 (GAO-13-208) focused on screener performance at TSA and SPP airports, and did not address whether TSA was finally including all costs in its comparisons of screening.
And as I noted at the time, GAO's 2012 report ignored a detailed study by the staff of the House Transportation & Infrastructure Committee: a case study of the cost of screening at two major hub airports, both in TSA's high-risk Category X—Los Angeles and San Francisco. The former has TSA screening and the latter is one of the original pilot program airports using a TSA-approved screening contractor. Even though federal law requires SPP contractors to pay screeners comparable wages and benefits as TSA, the study found that the cost per screener at SFO was 5.3% less than TSA's cost at LAX. While that may not sound like much, when combined with much higher productivity at SFO (16,113 passengers per screener at SFO vs. 9,765 at LAX, due mostly to a good mix of part-time and full-time screeners at SFO), the overall result would be 42.6% lower screening cost at LAX if the SFO contract model were applied there (see table).

Cost Saving if LAX Had Contract Screening
TSA ModelContract ModelSavings
Cost per FTE Screener
Salary$38,480$38,480$ 0
National Deployment Force$ 289$ 0$ 289
Recruiting & Training$ 2,439$ 541$1,898
Total Cost per Screener$41,208$39,021$2,187
Number of FTE Screeners2,2001,333867
Total Screener Cost$90.66M$52.02M$38.64M
Source: http://archives/republicans/transportation.house.gov/Media/file/112th/Aviation/2011-06-03-TSA_SPP_Report.pdf)

I expect TSA will ignore this report when it promulgates its "cost-efficiency" standard for SPP—but members of Congress with both aviation security and taxpayers in mind should not let them get away with this. House Homeland Security Committee Chair Rep. Mike McCaul (R, TX) has asked GAO to do a new study on SPP airports, to see if using contractors is "more effective and efficient." I hope his request to GAO requires them to assess the House T&I study, in addition to GAO's own previous efforts. On the other side of the aisle, the Committee's Ranking Member, Rep. Bennie Thompson (D, MS) has introduced legislation to "reform" SPP, including restoring TSA's discretion to veto applications from airports—a power TSA assumed despite language in the 2001 Aviation & Transportation Security Act granting all airports the right to opt out of TSA screening.

As stated before, it is human nature to want to preserve your existence (in this case, your means of earning a living and lifestyle).
The TSA is acting in defense. If more and more airports are allowed to privatize their security, it reduces the size, scope, and influence of the TSA. Therefore, it is doing all it can to prevent this from happening.
We cannot expect the TSA to organize itself out of this never-ending "application" cycle. Its existence is due to, and thus must be controlled by, the politicians in Congress and the White House.

Not really related, but thought it was amusing that they have a chart detailing acceptable baseball bats.
Also interesting, but makes little sense: golf clubs, ski poles, pool cues, lacrosse and hockey sticks are allowed. (TSA)

Obviously, the easiest, and best, direction would be to privatize the airport security system completely. However, as this is not likely in the near future, at the very least, the monopoly of a government-controlled (instigated by the government) must be broken.
Alas, we must turn to and expect the politicians (trying to validate their own existence and worth) who instituted the TSA to reign it in.

*Update* For more, somewhat amusing, evidence on how hard TSA tries to defend its existence, see the TSA and TSA Blog Twitter accounts.

Monday, May 27, 2013

Google Buzz

Google is taking the final steps to shutting down the last remnants of Buzz.
Much like Reader, I was one of the many (but obviously not enough) avid fans of Buzz.

They sent out this email to Buzz users detailing the final shutdown:


Buzz user,
In October 2011 we announced Google Buzz was shutting down. On or after July 17th, 2013, Google will take the last step in the shutdown and will save a copy of your Buzz posts to your Google Drive, a service for storing files online. Google will store two (2) types of files to your Google Drive, and the newly-created files will not count against your storage limits.
  1. The first type of file will be private, only accessible to you, containing a snapshot of the Google Buzz public and private posts you authored.
  2. The second type of file will contain a copy of only your Google Buzz public posts. By default it will be viewable by anyone with the link, and may appear in search results and on your Google Profile (if you’ve linked to your Buzz posts). Note, any existing links to your Google Buzz content will redirect users to this file.
  3. Any comments you made on other users’ posts will only be saved to those users’ files and not to yours. Once the change described in this email is final, only that user will be able to change the sharing settings of those files. This means that if you have commented on another author’s private post, that author could choose to make that post and its comments public. If you would like to avoid that possibility, delete all your Buzz content now.
  4. The new Google Drive files will only contain comments from users that previously enabled Google Buzz, and the files will not contain comments that were deleted prior to moving the data to your Google Drive.
Once the files are created, they will be treated the same as any other Drive file. They are yours to do with as you please. This includes downloading them, updating who can access them, or deleting them.
Before these files are created, you can view the Google Buzz posts you have authored here. If you do not want any of your Buzz posts or comments saved to Google Drive files, you can immediately delete your Google Buzz account and data. 
Thank you for using Google Buzz.
© 2013 Google Inc. 1600 Amphitheatre Parkway, Mountain View, CA 94043
You have received this mandatory email service announcement to update you about important changes to your Google Buzz account.


Interesting (and great) that they're keeping all the data, but I'm unlikely to ever go back to look at it. I thought it had a great niche in the information-sharing space before Google launched Plus.
Not getting into another rant on the loss of a beloved Google product, but thought I'd note the occasion and share the email.

Friday, May 3, 2013

Song of the Moment: Jamie N Commons - Rumble and Sway

Gruff bluesy goodness.

World's Most Misleading Economic Term? "Unemployment"

I've already aired my frustration with the usage of the economic indicator called "unemployment", but a story just came out that further proves my point (and annoyed the hell out of me), so I decided to get into it in a little more detail.

Back in Business: Jobs Picture Brightens in April
"Job creation accelerated in April, with the U.S. economy adding 165,000 new positions and the unemployment rate edging lower, quelling worries of a spring slowdown.

New figures from the Bureau of Labor Statistics indicated that a light March payrolls report may have been an aberration, as higher taxes and reduced spending due to the fiscal stalemate in Washington failed to deter growth.

The unemployment rate edged lower to 7.5 percent, due partly to the jobs gains and to a labor-force participation rate that remains at a 35-year low. An alternative rate that also counts those who have quit looking or are underemployed rose to 13.9 percent." (CNBC)
FYI- Even if you've stopped looking for work, you're still unemployed...

Apathy is not a profession.

In case you were wondering how Participation Rate (those working or actively looking for a job as a percentage of the total working age population) actually affects employment numbers, check out this chart:

As you can see, Participation Rate is still continuing to decline.
Since the Employment-Population Ratio (percentage of the population employed) is holding fairly steady, the loss in participation rate can be attributed primarily to people dropping out of the workforce because they are no longer looking for jobs.
However, to the Bureau of Labor Statistics, these "drop outs" positively affect Unemployment Rate (that is: unemployment goes down, giving the illusion of an improving job market)

To further illustrate the closer correlation between Unemployment and Participation Rate (rather than working individuals), take a look at this chart (yay graphs!):

(Financial Sense 1/4/2013)

Notice again that the Employment-Population Ratio has remained fairly steady.
Unemployment rate has dropped though. Comparing this to the first graph, which plot does this look like?
Participation Rate, maybe?
Funny how they coincide...

Why don't we use an Employment Rate indicator?

I'm reiterating my suggestion to use a simple Employment Rate (percentage of employed persons out of the total able-bodied workforce). Forget those not looking for jobs, underemployed, or otherwise.

Again, here are all the variables numbers the government uses to define the various levels of Unemployment:
The Bureau of Labor Statistics also calculates six alternate measures of unemployment, U1 through U6, that measure different aspects of unemployment: 
U1: Percentage of labor force unemployed 15 weeks or longer.
U2: Percentage of labor force who lost jobs or completed temporary work.
U3: Official unemployment rate per the ILO definition occurs when people are without jobs and they have actively looked for work within the past four weeks.
U4: U3 + "discouraged workers", or those who have stopped looking for work because current economic conditions make them believe that no work is available for them.
U5: U4 + other "marginally attached workers", or "loosely attached workers", or those who "would like" and are able to work, but have not looked for work recently.
U6: U5 + Part-time workers who want to work full-time, but cannot due to economic reasons (underemployment). (Wikipedia)
Anyway, I suspect the economy may be improving slightly, but I don't think it's going as well as some numbers may indicate..
Many people are "unemployed" and many more truly have no job.

Thoughts? Opinions?