For the full-sized version, go here.

But, perhaps because I wrote in too telegraphic a style, he misses the main point: This story is supposedly about net new jobs, not merely leaving people in other industries unemployed in order to hire the politically favored. The money has to come from somewhere, and if you're simply moving it around, some folks are going to lose their jobs.

To get this sort of projection to work, therefore, you have to assume a signficant disequlibrium in the economy that can be cured with a jumpstart of government spending. There have to be lots of unemployed resources--people out of work and capital wasted on producing things people aren't buying. That is not the situation we're in, and given the ongoing recovery it's most definitely not the situation we'll be in by the time any of this highway money starts to be spent. (I was not using Keynesian as a curse word, merely as a way of saying there's a disequilibrium story here.)

As a side note, construction workers are pretty fully employed, thanks to low interest rates. Spending hundreds of billions of dollars on unproductive transportation projects won't do much for unemployed manufacturing workers, even if some multiplier effects kick in.

Finally, suppose the equation were true and there were a simple, linear relationship between highway spending and jobs. Why not spend even more and get more jobs? Clearly, even if you believe that the first $1 billion produces 48,000 jobs, it's unlikely that the 300th $1 billion will have the same effect. The political discussion never acknowledges diminishing returns, either in job creation or productivity.

Unfortunately, we still do spend lots and lots of money on new construction. It goes to low-value roads with porkbarrel appeal. It also subsidizes neighborhood amenities like the Katy Trail and disamenities like the McKinney Avenue trolley, just to mention two in my own neighborhod. (I would dearly love to see this beautiful bridge by Santiago Calatrava rise over the Trinity River, but it's not clear why anyone outside Dallas should pay for it.)

New spending also ignores all the "micro allocative efficiencies" that transportation economists like Cliff Winston spend most of their time worrying about: Could pricing make roads more productive? Should we target spending and construction toward the most congested areas? Are the roads the right thickness? Should cars and trucks be segregated? Are construction costs artificially high because of Davis-Bacon and other political constraints? Are we building too many roads in rural areas? What is the right tradeoff between capital costs and maintenance? And so forth... These questions simply don't get asked, because highway spending is entirely political. It isn't about making the roads more efficient.

Amid all the praise for blogging, however, there were a few warning notes. Roger Simon joked that he hadn't written any novels or screenplays since he started blogging--in response to a question, he later said he had a couple in the works--and admitted that blogging is a great form of procrastination, much easier than real writing. The general consenus was that blogging takes four to six hours a day, which makes it good for workaholics and people who don't have other jobs. But even one of the latter, Mickey Kaus, said that after more than four years of blogging, he's starting to suffer from burnout. He also mentioned carpel tunnel syndrome.

All of which provides a great excuse for my approach to blogging: I may not do it every day, but at least I'm not going to burn out.

I'm off for a little working vacation in L.A., where I'll be checking out Cathy Seipp's bloggers forum Saturday night. I do expect to keep blogging while I'm gone.

I believe it was Stravinsky who said that "Lesser artists borrow, great ones steal."

As [Joel] Mokyr pointed out in The Lever of Riches, technologically successful economies were happy to borrow the best ideas regardless of their source.

To the extent that the US is the least obsessed with protecting ideas in culture, science, and industry, we will continue to produce the goods with the highest economic returns that are also among the most difficult to copy whether in research, movies, music, or software.

To the extent that we close up or another country succeeds in replicating the US intellectual melting pot, we will decline. Otherwise we will continue to lead.

I agree--plus I'm happy to take any opportunity to plug Joel Mokyr's work. His Gifts of Athena: The Historical Origins of the Knowledge Economy is also a great book. (Here's my NYT column on it.)

Virtually every day, David Jones of Lava Cap Winery gets telephone calls from out-of-staters who have visited his Placerville tasting room and want a few bottles of wine shipped to their homes.

Virtually every day, Jones has to turn down one or more customers from such states as New York and Florida, explaining that their 1930s-era liquor-control laws prohibit his wines from being delivered to their doorsteps.

In a year's time, the situation could be much better, or much worse, for wineries and consumers. The U.S. Supreme Court agreed Monday to weigh in on the legality of direct alcohol shipping, and laws in at least half-a-dozen states hang in the balance.

I wrote about state regulations, including anti-wine rules, that hinder Internet commerce here. The Institute for Justice, which brought one of the cases, has background here. (Steve and I are donors to IJ, which does great work.)

My name is Dr. Arthur Jacoby but most people call me Jake. I'm a Senior Staff Economist in the FHWA Office of Policy and lead a small research program called "Highways and the Economy". I was sent a url linking me to the article "KNOWLEDGE PRODUCTION, WASHINGTON-STYLE". In it you write, "To summarize, the whole study was bunk, engineered to arrive at a predetermined conclusion that would suggest the biggest number possible. (I suspect that's one reason that DOT doesn't make it available on their website -- they know it wouldn't withstand methodological scrunity)." [Actually, this is a quotation from David's note.--vp]

I think you and/or David K have it wrong. The JOBMOD income and employment estimation model is a much better product than you indicate. It follows a rather standard I/O [input-output] assessment methodology and has withstood considerable methodological and statistical scrutiny by CRS, OMB and others.

However, you are correct that the JOBMOD income and employment estimation model is not posted on our web site. Because of the size of the model I have been distributing it on CD. I would be happy to provide a copy to you upon request. Also, the Highway and the Economy research web page is currently undergoing reconstruction. I assure you JOBMOD documentation will appear there eventually, along with related macro-econometric studies I have initiated including works by M. Ishaq Nadiri, Barbara Fraumeni, and Clifford Winston.

I am attaching two files to introduce you to the employment research. The first is a widely distributed summary of JOBMOD results for a $1 billion federal-aid spending scenario. It was the basis for initial statements about employment impacts of Federal-aid construction spending by Secretary Mineta and Administrator Peters last summer, and is the likely source of many Congressional statements as well. The second file is the User's Manual for the model. You will notice the manual contains several caveats concerning appropriate uses of the IO methodology. Please let me know if you would like to receive the model on CD.

So neither DOT nor anyone in Congress simply made up the claim that $1 billion of spending produces 48,000 new jobs. Taxpayers paid experts to come up with the calculation.

But it still doesn't pass the smell test. Federal construction jobs pay more than $20,000 each, and this isn't the Great Depression; most people hired would be doing something else if they weren't building government roads. Keep in mind that these job projections are not based on the assumption that highway spending is investment that increases productivity. Rather, they assume that the spending is jacking up employment directly through the hiring of construction workers and indirectly through their spending. That Keynesian story only works if you assume lots of slack in the system.

And now a word from our sponsor: Please remember that this site receives a percentage of any Amazon purchases you make from a link on this blog. Start your shopping here, or at another blog you like.

Up until a few months ago, I worked for a U.S. Senator who was fond of quoting that $1 billion in highway spending = 48,000 jobs figure. Like you, I thought it sounded suspect, so I started looking for sourcing on it. I started with a Google search on the keywords. All the hits came up as coming from either members of Congress or other politicians and highway/transportation lobbies and associations -- which made me even more suspicious.

I pored through these and found one who credited it to a Dept. of Transportation study. With that lead, I checked the DOT website and some others, but still couldn't find the specific study (or even a title or a researcher's name). Frustrated, I called in the big guns -- the Congressional Research Service. One of the experts over there explained to me that the figure was basically a garbage number that was cooked up for a DOT study in the mid-90s. To arrive at the figure, the economist included as many "ripple effects" as possible (e.g., if we spend xx amount of dollars on highway funding, it will not only create jobs for highway construction and suppliers, but also for the guy who serves lunch to the highway workers, the bartender where they stop after work, etc etc etc). While I suppose there is sound economic principle behind looking at these ripple effects, in this case that principle was probably abused in order to generate the largest possible number. Also, as it was explained to me, the study effectively assumed that we would be starting from a baseline of ZERO highway construction jobs -- that no one would be currently employed in highway construction or supply -- again, to inflate the number as much as possible. And there was no consideration of how that money might be spent in other ways that might create jobs more effectively and efficiently. To summarize, the whole study was bunk, engineered to arrive at a predetermined conclusion that would suggest the biggest number possible. (I suspect that's one reason that DOT doesn't make it available on their website -- they know it wouldn't withstand methodological scrunity).

The punchline: After telling me all this, the expert source said that we might as well go ahead and use the number, since everyone else does.

It's a case study in how 'knowledge' is created and propagated in our nation's capital!

Dr. Marcy Zwelling-Aamot is sick of being told how to care for her patients. So the Los Alamitos physician--and president of the Los Angeles County Medical Society--says that as of July 1, she will no longer be working with health insurance companies.

"I am divesting myself of every insurance contract," said Zwelling-Aamot, an internist. "I can offer better care less expensively to my patients. I have a list, a waiting list, and I haven't even started advertising yet."

Zwelling-Aamot hopes she is on the leading edge of a wave of the future, which would really be a return to the past. She envisions an era when doctors and patients once again deal directly with one another, without the reams of paperwork, authorizations, second-guessing and billing nightmares that come with the current system.

Most consumers would pay for routine doctor visits, and even for treatment of minor maladies, out of tax-free savings accounts, visiting any doctor of their choice without having to check first with an insurance company. They would carry a relatively simple form of insurance coverage only for major, unexpected medical problems whose costs would pose a threat to their financial independence.

But Zwelling-Aamot's dream of bureaucracy-free medical care is clouded by one thing: SB 2, the proposal heading for the November ballot that would require California companies with more than 50 employees to provide health insurance to their workers.

The idea sounds good at first. So good that it was enthusiastically supported by the California Medical Association, the state's largest professional physician group and the parent of Zwelling-Aamot's county medical society.But Zwelling-Aamot and a number of prominent CMA members fear that the measure, if approved by voters this fall, will bring the downfall of quality health care in California by putting still more distance between doctors and their patients.

"The politicians say that people are uninsured and we need to cover them," Zwelling-Aamot says. "But coverage doesn't mean care."

For teenagers who think California government doesn't care about the color of their skin, the Assembly proved otherwise Thursday.

Legislators fear that too many youngsters are getting too much tan.They approved AB 2193, by a vote of 42-26, to prohibit minors from using indoor tanning booths without a doctor's prescription.

If signed into law, the measure would affect countless thousands of youngsters who crave a golden glow before a party, prom or just for fun.

Assemblyman Joe Nation, a San Rafael Democrat who proposed the bill, said the evidence is clear that indoor tanning - like outdoor tanning - can cause skin cancer.

"I think it is the proper role of government to minimize the exposure of kids to known carcinogens," Nation said.

Yes, tanning booths are bad for you. So are a lot of things--including going to the beach without sunscreen. Is that next on the list of California regulations? I wouldn't be surprised.

Stay tuned for more in this never-ending story...

Thanks to modern methods of production, the expanding umbrella of free trade, and low-cost shipping, most anyone can produce most anything, in most any country.

Let me repeat that, because it's a vital economic fact: Most anyone can produce most anything in most any country. The profit margins--hence wealth--in manufacturing are nothing great, and will get smaller. Oh, whatever is the latest and greatest in high tech will still earn big fat margins, but nothing else. Cars, home electronics, power tools, you name it--anyone can make them, everyone will make them, and nobody will be making big bucks doing so. If, that is, they make the plain vanilla versions.

So are we doomed to be poor, what, with our ever-shrinking and out-sourced manufacturing base? Hardly. When everything people need to live is cheap, then there will still be lots and lots of money to be made selling things people want.

And what people--wealthy people, like even lower-middle-class Americans--want, is something cool. Something hip, something pretty, something special. And look and feel--or "hip & cool"--is what Americans excel at designing and marketing.

In the comments, some people took issue with Stephen's national pride, pointing out that Japan, for instance, is even better--or at least more obsessed with--figuring out cool. That's right. There are certainly other countries, notably Japan and Italy, that are well positioned to do well as the frontier of competition moves toward aesthetics.

What Americans actually do well is to produce economic value, without a whole lot of sentimentality about whether what the market values is what it should value or whether the good old days were better. This economic pragmatism, combined with the creativity required to identify and produce new sources of value, is more distinctive than its manifestation at the moment, whether that's in delivering "cool" or manufacturing and distributing mass quantities of laundry detergent.

THE BAD NEWS for newlywed Massachusetts gays and lesbians is that, under the 1996 Defense of Marriage Act, the federal government won't recognize their marriages.

The good news is that by staying "single" in the eyes of the Internal Revenue Service, they could save a lot on taxes. Despite some reforms in 2001, many two-earner couples still pay a "marriage penalty," particularly if one spouse earns enough to hit the top tax bracket on his or her income alone.

Massachusetts, I learned during my reporting, has a fairly "marriage neutral" tax code--one that I wish the federal tax code would emulate. Read the rest here. For background on the broader issues, and the history of the "marriage tax," see my 2003 Globe piece here.

[Joseph] Darby quoted [Charles] Graner, a former Pennsylvania prison guard, as saying: "The Christian in me says it's wrong, but the corrections officer in me says, 'I love to make a grown man piss himself."'

Of course, U.S. prison guards have the good sense not to take photos, and, judging from popular culture, the general public couldn't care less about abuse, including widespread rape, in U.S. prisons.

Congress and the White House are wrangling over how much the federal government should spend on highways.The White House proposed a $256 billion budget for roads, bridges and transit over the next six years. (The previous six-year measure, which expired last year, cost $218 billion.) The House passed a $284 billion version, while the Senate further upped the ante to $318 billion. The White House threatens to veto those amounts as too lavish.

To political analysts, the highway bill is a popular program that has fallen prey to partisan, and intraparty, bickering. Lost in the dispute is the economic question: What are we getting for our money?

Find out here.

Architecture firms reported even further improvements in business conditions in April. Overall, 29 percent of firms indicated that their billings had significantly increased, while 17 percent reported a comparable decline. Overall billings have increased every month this year, and in some cases the increase has been very dramatic.

As encouraging as the magnitude of the improvement has been its breadth. Firms in all regions of the country note a significant upturn in business conditions. Likewise, business conditions have improved for all types of firms, regardless of their area of specialization. Of particular note is that firms with an institutional focus reported the strongest improvement in billings in April. Many of these firms had reported softer conditions in recent months.

This solid upturn in business activity at architecture firms shows no signs of abating. Inquiries for new project work were also very strong in April and, again, very broadly based. Firms in all areas of specialization indicated very healthy increases in new inquiries, with residential firms reporting the sharpest gains.

The report includes graphs--and some interesting news on outsourcing.

Last week, the DMN editorial page published an edited still of a terrorist holding up Berg's head and an editorial about why it published the photo. Since the published photo was actually of a blurry masked person with a slightly raised arm and a big black rectangle, I'm not sure it had the effect the editors were at pains to justify.