Spotting Canada\'s Expats in the Wild

By JONATHAN SCHULTZ

1964 Acadian Beaumont Sport Deluxe

In Sunday's Automobiles section, Ian Austen writes about cars built primarily after World War II by the Canadian divisions of Detroit-based automakers. The era spawned designs that, to an American eye, were at once familiar but distinct, sometimes relying on a grille flourish or trunklid emblem to distinguish them from their American counterparts.

Keen readers will spot the points of differentiation among these Canadian-branded collector cars and their American equivalents:

1968 Pontiac Beaumont convertible

1957 Monarch Turnpike Cruiser

1965 and 1966 Acadian Beaumont Sport Deluxe

The General Lee of \'The Dukes of Hazzard\' Will Keep Its Stars and Bars

By JOHN PEARLEY HUFFMAN

Contradicting rumors that circulated through fan forums, film Web sites and other corners of the Internet this week, the orange, incredibly air-worthy 1969 Dodge Charger from “The Dukes of Hazzard” television series, known as the General Lee, is not expected to lose the Confederate flag from its roof.

“We were not and are not planning to change design of the General Lee on merchandise,” Warner Brothers Consumer Products, the division of the entertainment conglomerate that oversees licensing of merchandise related to its theatrical titles, said in a statement. “All reports to the contrary have been inaccurate to this point.”

Though a second film based on “The Dukes of Hazzard,” a film adaptation released by the studio in 2005, is in development, Warner Brothers said in its statement that it was nowhere near ready to enter production. Consequently, no creative decisions have been rendered about the appearance of the General Lee, meaning replicas and toys made by Warner Brothers' various licensees would continue to be produced with the flag on the roof.

In 1978, when “The Dukes of Hazzard” entered television production, little sensitivity was paid by the show's producers to the meaning and history of the Confederate flag. When CBS aired the first episode on Jan. 26, 1979, there was little, if any, protest. And when CBS aired the series' 145th and final episode in 1985, there was still no organized objection to the stars and bars on the General Lee's roof.

Though the show's popularity has diminished, fan clubs are active, and large get-togethers featuring ceremonial jumps of Dodge Chargers have been held across the country. Beyond the show, fan groups have also organized around the General Lee itself. Building replicas of the car has become something of a cottage industry.

So when a commenter on the community forums for the Web site HobbyTalk.com s aid that a sales representative for Tomy, owner of the Ertl brand of die-cast toy cars, had told him that all licensed General Lee models must cease to be produced with the Confederate flag on its roof by Jan. 1, 2013, an Internet-fanned phenomenon was sparked.

HobbyTalk.com is a site for collectors of die-cast, radio-control and slot cars. The Times left a message for the commenter, who went by the handle Mark #10, on the site, but did not receive a reply. A representative for Tomy referred all inquiries about the General Lee and its design back to Warner Brothers.

Responding to the rumors, Ben Jones, the actor who portrayed Cooter in the television series, weighed in on Wednesday with a fiery press release. “Some unnamed genius at the company feels that the flag is ‘offensive to some' and therefore it has no business on a classic TV comedy about a bunch of good ol' boys and girls in the Southern mountains,” Mr. Jones, a former two-term Democratic congress man from Georgia, wrote. “This is a new level of ‘P.C.' idiocy. I don't know about you, but I am tired of being insulted by morons.”

By Wednesday night, online petitions were cropping up. On Thursday morning, “The Today Show” put up an online poll on its “The Clicker” blog asking if the flag should stay. At the time this report published, there were 1,614 votes cast for the flag to be removed and 16,951 for it to remain.

By Friday, the statement from Warner Brothers also was spreading across the General Lee fan community, prompting Mr. Jones to release another statement claiming victory. “This is not only a victory for those who love the show, but a victory for the voice of the people, and in my opinion, a victory for mutual respect among people of different ethnicities and backgrounds,” he wrote. “We should now be gracious and thank the folks at Warner Brothers for changing this misguided policy.”

In the same statement, Mr. Jones, who organizes theme events around the franchise and sells related merchandise online and through his store, Cooter's Place, in Nashville, also claimed that there were “reliable and verifiable reports from WB car licensees with whom we do business that as of Jan. 1, 2013, the Confederate banner on top of the General Lee would be removed because some people ‘found it offensive.'” Calls to Mr. Jones through his Nashville store to discuss his assertion went unanswered.

Reviewing the Toyota RAV4 EV

By THE NEW YORK TIMES

In Sunday's Automobiles section, Bradley Berman reviews the 2012 Toyota RAV4 EV, a purely electric version of the compact crossover with a drivetrain sourced from Tesla Motors.

The RAV4 has always been respectible, if not a standout in its crowded segment. A power-source transplant, however, works wonders for the Toyota's on-road personality, as Mr. Berman writes:

I punched the Sport button on the all-electric Toyota RAV4 EV that I had been driving for two days and slammed the accelerator to the floor. The burst of power - in a blink it kicked me past the 75 m.p.h. traffic in the fast lanes - was not what I expected from a small battery-powered crossover.

The electric surge was transformational. Still gaining speed at a good clip, I could easily have zoomed to the 100 m.p.h. top speed listed in Toyota's specifications.

Though only 2,600 units of the RAV4 EV will be produced, Mr . Berman expects the car's cult to grow well beyond the constraints of that modest number.

Read the entire review, check out the slide show and share your thoughts on the RAV4 EV in the comments.

Have a Restorative Labor Day

By THE NEW YORK TIMES

Wheels will be taking a short break in observance of Labor Day, but we'll return on Tuesday, Sept. 4, with our regular coverage. Whatever mode of transport conveys you to your destination, the editors and contributors at Wheels wish you safe and happy travels this holiday weekend.

Stirling Moss, Reuniting With Precious Metal at Lime Rock

By STEVEN COLE SMITH

Sir Stirling Moss acknowledges he and a great many other former Formula One drivers missed a remarkable investment opportunity during their motorsports careers. The cars in which they competed 50 or more years ago are worth millions, but it never occurred to Moss, 82, that the surviving examples would be among the most sought-after collector cars in the world.

“Oh, absolutely not,” Moss said in a recent telephone interview. “If I was racing a Ferrari or a Maserati or whatever, I knew another one was coming out the following year. So why hold onto the old one?”

Moss does own a 1961 Porsche RS 61 Spyder sports car, but it was not, in the parlance of the hobby, necessarily bought well. “I bought it in modern times, and it was tremendously expensive,” he said. “I could have bought it for a hundred times less when it was new.” Indeed, he paid $1.7 million for the car at a sale organized by Gooding & Comp any in 2010.

Moss will be reunited with some old flames this weekend at the 30th running of the Lime Rock Park Historic Festival in Lakeville, Conn. The festival, which begins on Friday and continues through Sept. 3, honors the racing career of Moss this year, with a dozen of the cars he campaigned that were, thankfully, saved and restored. Cars scheduled to be on view including a Vanwall, two Coopers, three Maseratis, three Jaguars and an Osca.

Moss, who began his racing career in 1948 at age 18 in a Cooper 500, is widely regarded as one of the greatest drivers in Formula One history. In only 66 starts, he accrued 16 wins, 16 poles and 24 podiums, though he never won a driver's championship. He also competed in many sports car and rally races. Of the 529 races he entered in his professional career, he won 212.

Moss retired from the professional circuit in 1962 after a near-fatal crash at Goodwood in Britain that left him in a coma for a month, but after he recovered he continued to participate in historic racing. Though he retired from the historics in 2011, he has continued to drive demonstration laps on occasion. His personal appearances were trimmed after an accident in March 2010, in which he fell down an elevator shaft, breaking both ankles, but he recovered from that incident as well.

Moss does not attend many Formula One races any more, but he says he catches them all. He is particularly keen on watching Fernando Alonso, the Ferrari driver and 2012 Formula One leader, and Sebastian Vettel of Red Bull.

This weekend, however, will be a throwback affair, during which he will visit with fans and glimpse his old racecars on the picturesque Lime Rock road course.

“I'm quite glad to see the cars - they are worth so much more money, and they are in so much better condition,” he said. “A Maserati, when it came out of the factory, was in nowhere near as good a condition as these restored Maseratis are now , for example. The one thing that concerns me a bit is that people have got to realize that those cars were dangerous at the time, and they're not going to be less dangerous now.

“I just hope to goodness that the people who are driving them realize that they are old. Perhaps not as old as I am, but old.”

A Critique of Fed Policy

By BINYAMIN APPELBAUM

Many economists regard asset purchases as the most powerful tool the Federal Reserve could use to stimulate the economy. But Michael Woodford, an economics professor at Columbia University, argued Friday that a second option would actually be much more effective â€" both because it would have significant economic benefits, and because the benefits of asset purchases are significantly overstated.

The option favored by Professor Woodford is a modified version of the Fed's statement that it intends to keep interest rates near zero until late 2014. In a paper presented at the annual monetary policy conference in Jackson Hole, he said that the Fed should instead declare its intention to hold down interest rates until the economy meets certain benchmarks, like a specified increase in economic output. In other words, to boost growth now, the Fed must promise to tolerate higher inflation later.

The Fed's chairman, Ben S. Bernanke, has repeatedly resisted similar ideas, but in a separate speech at the same conference earlier on Friday, he appeared to suggest a greater receptivity.

The core of Professor Woodford's argument is that changes in Fed policy can happen for two reasons: Because its economic outlook changes, or because the Fed decides to change the way that it responds to a given economic outlook â€" in other words, a change in strategy, or in circumstances.

The Fed has described its forecasts as reflecting a change in circumstances, not strategy. It has said that it is simply describing the way that it is most likely to act if the economy slogs along at the pace it presently predicts.

Professor Woodford writes that this is at best ineffective and potentially even damaging. It can be described as an effort to push down interest rates by convincing investors that the economy will remain weaker for longer than they had previously believed . But investors may not regard the Fed as having better information about the economic future. And if they do take it seriously, the implications are negative: The situation is worse than they thought, while the planned response is unchanged.

“Forward guidance of this kind would have a perverse effect, and be worse that not commenting on the outlook for future interest rates at all,” he said.

What can work, he writes, is promising to behave differently. In the current situation, where the Fed would push rates below zero if it could, he argues that the proper response is to promise that it will refrain from raising interest rates above zero as quickly as circumstances would otherwise warrant.

“One wants people to understand,” Professor Woodford writes, “that the central bank's policy will be history-dependent in a particular way - it will behave differently than it usually would, under the conditions prevailing later, simply because of the binding constraint in the past.”

Charles Evans, president of the Federal Reserve Bank of Chicago, has embraced a version of this approach, arguing that the Fed should maintain interest rates near zero until the unemployment rate falls below 7 percent or the rate of inflation rises above 3 percent. Professor Woodford says this would be an “important improvement,” but he prefers a different approach, tying Fed policy instead to a minimum rate of growth in the nominal gross domestic product (N.G.D.P.), meaning economic growth plus inflation.

Christina D. Romer, former chair of President Obama's Council of Economic Advisers, has explained the virtues of N.G.D.P. targeting.

Mr. Bernanke has generally resisted proposals for the Fed to shift its policy framework â€" and he has specifically branded as “reckless” ideas that would raise the Fed's inflation target, like N.G.D.P. targeting.

But he has also said that in periods of high unemployment the Fed somet imes should move more slowly to restrain rising inflation, and in his speech Friday he appeared to underscore that the Fed, at least in part, is trying to tell markets it plans to move more slowly.

He began with his usual description of the Fed's policy forecast as consistent with its standard decision-making framework. But he added that “a number of considerations also argue for planning to keep rates low for a longer time than implied by policy rules developed during more normal periods.”

Mr. Bernanke then made the further claim that the Fed already is sending this signal to markets, and that it is being received.

He noted in particular that a regular survey of economic forecasters has documented a steady drop in their estimate of how low unemployment must fall before the Fed begins to withdraw its stimulus.

The evidence, he said, “appears to reflect a growing appreciation of how forceful the F.O.M.C. intends to be in supporting a sustainable recovery.”

Nissan Sentra Sheds Power and Weight for 2013

August 31, 2012, 12:01 pm

By JONATHAN SCHULTZ

On Friday, against the somewhat incongruous backdrop of Cowboys Stadium in Dallas, Nissan unveiled the 2013 Sentra compact sedan. The setting was chosen, Nissan said, to dovetail with the automaker's status as the presenting sponsor of the Heisman Trophy and Saturday's prime-time N.C.A.A. football match-up between the Michigan Wolverines and Alabama Crimson Tide.

All but unveiled in April at the Beijing motor show as the Asian-market Sylphy, the Sentra trades the notchy, stunted look of its predecessor for a more sinuous design. It bears a sharp character line just below the windows, stretching from headlight to taillight, much in keeping with its competitors from Korea. Call it the Elantra effect.

Though wheelbase has grown less than an inch, the 2013 car appears notably longer than its predecessor because overall length has increased by 2.3 inches. Interior volume is virtually unchanged, but Nissan says the cabin is optimized to provide rear passengers with more legroom.

The 2-liter engine of its predecessor has been swapped out for a 1.8-liter 4-cylinder unit, which is designed to deliver quicker, more efficient combustion, though it shed 10 horsepower in transition, settling at 130. The sacrificed power may not be missed, however, given the car also lost more than 150 pounds, according to Nissan.

When equipped with a continuously variable transmission, the Sentra returns 39 miles per gallon on the highway and 30 m.p.g. in the city, Nissan claims. Not unlike the Chevy Cruze and Ford Focus, Nissan offers an efficiency trim package, FE+, said to raise the highway figure to a highly marketable 40 m.p.g.

The automaker did not indicate when or whethe r an SE-R or SE-R Spec V, two sport-tuned, more powerful versions of the Sentra in the mold of the Honda Civic Si, would be available. Initially, the sporting quotient will be limited to appearances, with the SR package offering the typical buffet of revised front and rear fascias, side skirts, fog lamps and larger wheels.

The base Sentra S is equipped with a 6-speed manual transmission. All other trim levels receive the CVT as standard equipment.

Pricing for the 2013 Sentra will be announced closer to its sale date this fall.

From Physician Glut to Physician Shortage

By UWE E. REINHARDT

Uwe E. Reinhardt is an economics professor at Princeton. He has some financial interests in the health care field.

In my most recent post, I made light of the argument that the Affordable Care Act would lead to a major shortage of physicians in this country. I was unpersuaded in part because the newly insured are likely to present only a marginal added demand for physician services. More important, I am not sure what we mean by “physician shortage.”

Forecasters looking at the health work force have never reached a consensus on the ideal physician-population ratio for this country.

Indeed, widespread worries over a looming physician shortage are a relatively new phenomenon. They come at the time when experts are also lamenting an “epidemic of overtreatment” of patients, said to cost America $210 billion a year.

Throughout the 1980s, however, and until the late 19 90s, the dominant narrative among experts on the American health work force was that, with the exception of primary care physicians, the United States faced a large overall future physician surplus. There were only a few demurrals from that dominant narrative.

The problem is that forecasting the future supply of and demand for any type of health professional is a highly complex and nuanced enterprise with wide margins of error (see, for example, Figures 9-1 and 9-6 in my 1991 paper).

Crucial in such forecasts is the assumption one makes about the average annual physician productivity in future years. That variable depends chiefly on two factors: the number of hours per year that physicians typically devote to patient care, and the degree to which physicians delegate to others tasks for which an M.D. degree is not required â€" for example, administrative tasks to clerks or business managers and certain medical tasks to physician assistants or nurse practitioners trained to perform tasks now performed by physicians.

How crucial that assumption is can be inferred from a once highly influential paper written in 1994 by Jonathan Weiner, a Johns Hopkins University health services researcher. In that study, Professor Weiner sought to estimate the impact of the then-impending Clinton health reform on the country's future work force situation.

Professor Weiner noted that, in 1992, well-managed, clinically integrated, staff- or group-model health maintenance organizations that were compensated by prepaid capitation (an annual lump-sum fee per patient) required an average of only about 120 or so physicians per 100,000 enrollees, while the overall ratio of patient-care physician per 100,000 population in the United States was as high as 180 (about 220 in 2011; see Table 2 in this publication).

It appeared that the H.M.O. had pushed task delegation to nonphysician personnel further than had the rest of the health system. Furt hermore, H.M.O.'s freed clinicians substantially from many administrative chores that physicians elsewhere must perform. Such H.M.O.'s, incidentally, would be the ideal form of the accountable care organizations called for in the Affordable Care Act of 2010.

Assuming, when he made the forecast in 1994, that as a result of the Clinton health reform some 40 to 60 percent of the United States population would be enrolled in such H.M.O.'s by 2000, Professor Weiner projected that the demand for and supply of primary care physicians would be more or less in balance in 2000, but that the supply of specialists would exceed the demand for them by more than 60 percent (a projected surplus of 165,000 physicians).

This prospect â€" widely accepted at the time - subsequently led the prestigious Council of Graduate Medical Education to recommend in its report of 1996 that “that the number of physicians entering residency be reduced from 140 percent to 110 percent of the nu mber of graduates of allopathic and osteopathic medical schools in the United States in 1993.”

And why were health policy makers and work force specialists so worried at the time about an impending physician surplus? Did not standard economic theory predict that an imminent surplus would drastically drive down physician fees â€" particularly specialists' fees - and thus make health care more affordable and accessible?

The problem is that this theory has found little empirical support in the data, in part because third-party payment intervenes. Furthermore, there has always been a strong belief, especially among policy makers, that modern medical practice, when coupled with third-party payment, is subject to an analogue of Parkinson's Law. It is named after the British historian Cyril Northcote Parkinson (1909-93), who promulgated the law more or less in jest in 1955, then with regard to the British civil service.

According to Parkinson's Law, “work will expand to fill the time available for its completion.” In medicine, its manifestation is feared to be the overtreatment of patients â€" sometimes harmful â€" even though individual physicians may sincerely believe that more care implies superior quality of treatment.

As the late economist Eli Ginzberg, an early pioneer in work force studies, noted as early as 1966: “Physicians are in a position to create their own demand.” He added that the effective use of physician manpower “depends in the first instance on a taut supply of physicians.”

Academic economists since that time have tied themselves into analytic knots over whether or not Ginzberg was right, in exercises reminiscent of medieval scholasticism. At the theoretical level, their models are mathematically elegant but lack predictive power. The data available at the empirical level does not allow economists to distinguish between health care actively demanded by patients and health care passively accepted on the doctor's recommendation, nor between services prescribed by doctors in good conscience and those rendered mainly to shore up doctors' incomes.

As on so many other areas of the real world, the views of economists on this matter cancel one another out.

Policy makers in the real world, however, seem to have no doubt that Parkinson's Law applies to medical practice, as well. Consequently, they prefer paying physicians by annual capitation or bundled payments instead of “inflationary” fee-for-service, and they often seek to impose global budgets on physicians.

If Eli Ginzberg was right â€" and often he was â€" the suspected physician shortage now imputed by critics of the Affordable Care Act may actually drive our health system into more efficient medical practice. Step No. 1 in that direction, of course, would be to lighten the enormous administrative load now heaped by our health insurance system onto physicians devoted to rendering patien t care.

Wheels Calendar for Aug. 31 – Sept. 3

By THE NEW YORK TIMES

A bite-size sampling of concours, cruise nights, auctions and other upwellings of car culture happening across America this weekend.

Auburn Fall Auction: Aug. 31 â€" Sept. 2, Auburn, Ind.
Conducted by Auctions America by RM, this year's Auburn fall sale includes a remarkable 1935 Duesenberg Model J, a 1932 Auburn 12 Boattail Speedster and, a propos of the summer blockbuster season, a Batmobile from 1989, the year of the first of many reboots for the Caped Crusader. More info.

Lime Rock Park Historic Festival: Aug. 31 â€" Sept. 3, Lime Rock, Conn.
With three days of vintage racing and a concours d'élélgance, the Lime Rock Historics are the East Coast's de facto Pebble Beach event. Sir Stirling Moss, the former Formula One driver who, at 81, retired last year from active motorsport, is the honored guest in this, the event's 30th year. A number of cars in which Moss competed, including a 1950 Jaguar XK 12 0, a 1955 Jaguar D Type and a 1960 Maserati T 61 Birdcage, will be on view. More info.

2012 MidSouth Econoline Meet: Sept. 2, Morrilton, Ark.
Far from being a somber wake for the E-Series, the descendent of the Econoline that was discontinued late last year, this show-and-shine event figures to be an ebullient, pastel-heavy celebration of Ford's contribution to the cause of touring rock bands and Microbus-averse flower children. More info.

Lead East: Aug 31 â€" Sept. 2, Parsippany, N.J.
Another event in the Northeast commemorating its 30th year is Lead East, a '50s-flavored affair for those who remember when Peggy Sue got married. Scores of customs and exacting originals converge in the parking lot of the Parsipanny Hilton. Period-specific music and an appearance by the ghoulish John Zacherle, he of “Shock Theatre” television fame, are scheduled. More info.

At Baltimore Grand Prix, the Eyes Have It

By ROY FURCHGOTT

BALTIMORE - For any motorsports fan who wonders how that pulse-quickening cockpit footage is captured, the answer involves 6 miles of fiber optic cable, 11 receiver stations, 24 radio cameras, an unused military radio frequency, a truckload of electrical generators and three trailers of studios.

And still, that is just a fraction of the order sheet for Broadcast Sports Incorporated, the company responsible for in-car video capture for Nascar, the Grand American Road Racing Series, the American Le Mans Series, National Hot Rod Association drag races and IndyCar. With headquarters in Hanover, Md., the company views the IndyCar Baltimore Grand Prix, scheduled to be run on Sept. 2 around the city's Inner Harbor, as a bit of a hometown showcase. The proximity does not make company's task easier, though.

“This is probably one of the toughest events we do all year,” Doug Parr, a lead engineer for B.S.I., said in a telepho ne interview. That is saying something, considering the company shipped 6,000 pounds of equipment to Brazil for the IndyCar Sao Paulo 300 street race in April.

What made the Baltimore GP so difficult, he said, was “the downtown environment we have to operate in. The large buildings interfere with the signals.” There is the additional challenge of unraveling those six miles of fiber optic cables during the brief street closings afforded to race organizers. “There is a lot of logistics in this one,” he said.

The company was selected to provide in-car video for the grand prix because few other firms were equipped to do so. “There are people who can do part of what B.S.I. does, but not all of it,” said Robert Greene, an executive of I.M.S. Productions, which oversees broadcast of all IndyCar races. Capturing and wirelessly relaying broadcast-quality video from cars moving at 200 miles an hour is not a skill learned at a weekend film academy. “There is n o better vendor capability-wise to do that, period,” Mr. Greene said.

The presence of these cameras on cars has moved from afterthought to a consideration at the cars' development phase, Mr. Parr said. “They used to show up with a chassis and say, ‘O.K., where are you going to put your camera on it?'” he said. At the behest of IndyCar, Broadcast Sports worked with Dallara, the chief chassis designers for the cars introduced at the beginning of the 2012 season, to increase the in-car camera count from one to four.

By working with Dallara in the chassis-development phase, Broadcast Sports was able to integrate the four camera views desired by IndyCar: one capturing the driver from the right-hand mirror; one positioned in the lower-right intake at the forward strut; one on the rear wing; and the crown jewel, the so-called roll hoop camera, capable of rotating 360 degrees to cover the action in any direction. The cameras are designed and assembled by Broadcas t Sports.

Footage captured by the roll hoop camera begins at 1:20.

To prevent the camera gear from overheating, as the old rigs were prone to do, an intake scoop and fan keep the processors and transmitters cool even during pit stops. Minute details were considered, like creating cable plugs that would easily pass through a mirror stem for emergency camera replacement if a mirror were damaged in a race.

To ensure a level playing field, even cars that do not carry the cameras are required to wear a dummy set for ballast. Mr. Parr recalled how, when he approached teams with a camera, a question about its weight invariably followed. “I'd say, ‘A pound,' They'd complain, ‘A pound is too much,'” he said. Despite the protests, the company has come a long way since 1981, when its first in-car camera, a 55-pound monster, was used in the Daytona 500 of that year. The IndyCar rig, consisting of four cameras , transmitters and processors, weighs 7.5 pounds.

Weight and distribution are such sensitive points that penalties are levied against teams that fail to observe the rules. At the 2011 Indianapolis 500, Tony Kanaan was found to be missing the 1.5 pound dummy camera in his car's mirror. The driver was required to repeat his qualifying laps and ultimately lost track position.

Whereas B.S.I.'s subsequent rigs transmitted video data to a helicopter that, like a low-flying satellite, bounced the signals to the studio, the company now relies on a series of antennas on the ground, wired directly to the studio by fiber optic cable, to conduct business. One helicopter is still used for overhead shots, and three remote cameras roam the pits with roving reporters.

Each car carrying a rig feeds the signal to a mobile studio powered by generators. “That way you never get power surges,” Mr. Parr said. Inside, one crew manages the live feeds, with two people handling t he joysticks that control the rotation of the roll hoop cameras, which will be positioned on six cars. Another operator sits in a separate cubicle and controls the replay of video data stored on a giant disk. “About a $250,000 TiVo is what it amounts to,” Mr. Parr said.

The captured footage then feeds into a pair of network-operated mobile studios. NBC Sports Network, which will broadcast the Baltimore race, will have 21 of its own wired cameras on the course. Inside the mobile studios, network producers will choose images and audio, add graphics and mix together the product that ultimately makes it on air.

Jobs Outlook Remains Tepid

By ECONOMIX EDITORS

This week's economic data has come in broadly as expected, leaving the forecasters at Moody's Analytics to continue to forecast that job growth will be slower in August - but still faster than it was in the spring. The latest post on Moody's Dismal Scientist blog explains:

Labor market data over the past week confirm that August has been a sluggish month for job creation. We still look for a 145,000 increase in nonfarm payrolls, not far from July's 163,000 gain and above the second quarter average of 73,000. The unemployment rate likely edged down to 8.2% this month from July's 8.3%. While improving slowly, the U.S. job market is generating little wage income growth, which will be felt as rising gasoline and food prices test consumers' resilience.

The Moody's assessment, however, goes on to cite “reasons for concern that the August numbers could undershoot our forecast,” including a rise in the four-week moving average of continuing claims for unemployment benefits, a weakening index of consumer confidence and a region-by-region Fed report (known as the beige book) that was “not upbeat about the health of the job market.” It adds:

Each employment report is important, but this month's will be especially so, as it comes as the Fed considers new round of quantitative easing. If the numbers are notably weaker than expected, the odds of near-term Fed action will rise.

Moody's projections continue to indicate that the presidential election will remain close. As we've written previously, history suggests that average job gains between 100,000 and 175,000 in the six months before an election tend to lead to a close race.

Wheelies: The Fly-in-the-Ointment Edition

August 30, 2012, 12:45 pm

By THE NEW YORK TIMES

In which we bring you motoring news from around the Web:

- Sergio Marchionne, the chief executive of Chrysler and Fiat, told The Detroit Free Press that the Corporate Average Fuel Economy standards announced by the Obama administration on Tuesday would make big V-8 engines as “rare as white flies.” Chrysler's supercharged Hemi V-8 power plants are found in the 300, Dodge Charger, Challenger and Durango, Jeep Grand Cherokee and Ram pickups. The standards mandate corporate fleet fuel-economy averages of 54.5 miles per gallon by 2025. (The Detroit Free Press)

- Having sustained multiple injuries during a qualifying-run crash before the Indianapolis MotoGP, a race in which he ultimately finishe d in fourth place, Casey Stoner underwent surgery on Thursday to repair a broken ankle. Stoner, who announced in May that he would retire at the end of the season, said he was optimistic that he would rejoin the tour in October. He is ranked third over all in 2012, behind Dani Pedrosa and Jorge Lorenzo, respectively. (BBC)

- The 2013 Volvo V40 hatchback earned the highest overall safety score ever issued by Euro NCAP, the foremost vehicle safety testing organization in Europe. The hatchback, which is not sold in the United States, also set a record high score for adult protection, one of four categories in which passenger vehicles are issued test scores. (Volvo, via Car magazine)

- On Wednesday night, in his speech accepting the Republican nomination for vice president at the Republican National Convention, Representative Paul D. Ryan suggested that President Obama had a role in the shuttering of a plant operated by General Motors in Mr. Ryan's hometown of Janesv ille, Wis. As our colleagues at The Caucus noted, however, the plant built its last vehicle in December 2008, before Mr. Obama's inauguration. (The Caucus)

Red Bull Racing: 190 M.P.H. in the Lincoln Tunnel, Among Other Amusements

August 30, 2012, 11:24 am

By JONATHAN SCHULTZ

With its president having stepped down and Bernie Ecclestone, the president of Formula One, having expressed doubts that the race would go forward on schedule, the Grand Prix of America has experienced no shortage of tumult this summer.

The Formula One weekend, tentatively scheduled for June 2013 on the streets of West New York and Weehawken, N.J., can use as much positive publicity as it can get. On Thursday, Red Bull Racing responded in kind.

In a video posted to the team's YouTube page, David Coulthard drives the Red Bull Formula One demonstration racecar on sections of the planned grand prix route and, according to the team, up to 190 miles per hour in the Lincoln Tunnel. And though the produ ction might not be as ambitious as Ken Block's latest gymkhana video, it has its indelible moments, including a series of open-wheel donut spins with a Lower Manhattan backdrop.

Why Are the Big Banks Suddenly Afraid?

By SIMON JOHNSON

Simon Johnson is the Ronald A. Kurtz Professor of Entrepreneurship at the M.I.T. Sloan School of Management and co-author of “White House Burning: The Founding Fathers, Our National Debt, and Why It Matters to You.”

Top executives from global megabanks are usually very careful about how they defend both the continued existence, at current scale, of their organizations and the implicit subsidies they receive. They are willing to appear on television shows â€" and did so earlier this summer, pushing back against Sanford I. Weill, the former chief executive of Citigroup, after he said big banks should be broken up.

Typically, however, since the financial crisis of 2008 the heavyweights of the banking industry have stayed relatively silent on the key issue of whether there should be a hard cap on bank size.

This pattern has shifted in recent weeks, with moves on at least three fronts.

William B. Harrison Jr ., the former chairman of JPMorgan Chase, was the first to stick out his neck, with an Op-Ed published in The New York Times. The Financial Services Roundtable has circulated two related e-mails “Myth: Some U.S. banks are too big” and “Myth: Breaking up banks is the only way to deal with ‘Too Big To Fail'” (these links are to versions on the Web site of Partnership for a Secure Financial Future, a group that also includes the Consumer Bankers Association, the Mortgage Bankers Association and the Financial Services Institute).

Now Wayne Abernathy, executive vice president of the American Bankers Association, is weighing in â€" with a commentary on the American Banker Web site.

These views notwithstanding, mainstream Republican opinion is starting to shift against the megabanks, as former Treasury secretary Nicholas Brady makes clear in a strong opinion piece published in The Financial Times.

Mr. Brady was Treasury secretary under Presidents Ronald Reagan and George H.W. Bush, and to the best of my knowledge, no one has ever accused him of being any kind of leftist.

Yet Mr. Brady's thinking in his Financial Times commentary is strikingly similar to the reasoning that motivated the Brown-Kaufman amendment (supported by 30 Democrats and three Republicans) in 2010, which would have put a hard cap on the size and leverage of our largest banks, i.e., how much an individual institution could borrow relative to the size of the economy. (See this analysis by Jeff Connaughton, who was chief of staff to Senator Ted Kaufman; Senator Sherrod Brown, Democrat of Ohio, is still pushing hard on this same approach.)

Mr. Brady also stresses that we should make our regulations simpler, not more complex. Senator Kaufman made the same point repeatedly â€" and capping leverage per bank (Mr. Brady's preferred approach) would be one way to do this.

Mr. Brady is not alone on the Republican s ide of the political spectrum. A growing number of serious-minded politicians are starting to support the point made by Jon Huntsman, the former governor of Utah and a Republican presidential candidate in the recent primaries: global megabanks have become government-sponsored enterprises; their scale does not result from any kind of market process, but is rather the result of a vast state subsidy scheme.

As Paul Singer, a hedge fund manager and influential Republican donor, says of the big banks, “Private reward and public risk is not what conservatives should want.”

A second problem for the bankers is that their arguments defending big banks are very weak.

As I made clear in a point-by-point rebuttal of Mr. Harrison's Op-Ed commentary, his defense of the big banks is not based on any evidence. He primarily makes assertions about economies of scale in banking, but no one can find such efficiency enhancements for banks with more than $100 billion in tota l assets â€" and our largest banks have balance sheets, properly measured, that approach $4 trillion.

Similarly, the Financial Services Roundtable e-mail on “Some U.S. banks are too big” is based on a non sequitur. It points out that United States trade has grown significantly since 1992, and it infers that, as a result, the size of our largest banks should also grow.

But the dynamism of the American economy and its international trade after World War II was not accompanied by striking increases in the size of individual banks, and our largest banks did not then increase relative to the size of the economy, in sharp contrast to what happened since the early 1990s.

In 1995, the largest six banks in the United States had combined assets of around 15 percent of gross domestic product; they are now over 60 percent of G.D.P., bigger than they were before the crisis of 2008.

The Financial Services Roundtable is right to point out that banks in some othe r Group of 7 countries are larger relative to those economies. But which of these countries would you really like to emulate today: France, Italy or Britain?

The Financial Services Roundtable also asserts, in its other e-mail, that the Dodd-Frank financial reform legislation and the Basel III new capital requirements have made the banking system safer. That may be true, although the evidence it presents is just about cyclical adjustment; after any big financial crisis, banks are careful about funding themselves with more equity (a synonym for capital in this context) and holding more liquid assets.

The structure of incentives in the industry hardly seems to have changed, as witnessed, for example, by the excessive risk-taking and consequent large trading losses at JPMorgan Chase recently.

We need a system with multiple fail-safes, and making the largest banks smaller and less leveraged would achieve precisely that goal.

Mr. Abernathy's article takes a much more extreme position. He contends that banks are already unduly constrained â€" by Dodd-Frank and Basel III â€" and this is holding back economic growth.

Mr. Abernathy goes so far as to say that if the banks were to raise $60 billion in additional equity capital, this “holds back $600 billion of economic activity.” In other words, strengthening the equity funding of banking would cause an economic contraction on the order of 4 percent of G.D.P.

Such assertions are far-fetched, not based on any facts and have been completely discredited (see the work of Anat Admati and her colleagues on exactly this point). Mr. Abernathy was assistant secretary for financial institutions under George W. Bush. If he has any evidence to support his positions â€" a study, a working paper, a book? â€" he should put it on the table now.

To make such assertions without substantiation is irresponsible. (A document from a lobbying organization would not count for much, in my view, but let's see if he has even that.)

The big banks and their friends should be afraid. Serious people on the right and on the left are reassessing if we really need our largest banks to be so large and so highly leveraged (i.e., with so much debt relative to their equity). The arguments in favor of keeping the global megabanks and allowing them to grow are very weak or nonexistent. The arguments in favor of further strengthening the equity funding for banks grow stronger â€" see the recent letter by Senators Sherrod Brown and David Vitter, which I wrote about recently.

The views of sensible people like Secretary Brady, Senator Kaufman, Governor Huntsman and Senator Brown are spreading across the political spectrum.

Wheelies: The Land of Lincoln Edition

By THE NEW YORK TIMES

In which we bring you motoring news from around the Web:

- Rumored for nearly a year, Ford on Tuesday confirmed it would bring its Lincoln luxury brand to China. Though the automaker said the first vehicles would reach market in the second half of 2014, and noted that a plant under construction in Chongqing would double Ford's production capacity in China, it did not specify which models would be sold initially or whether they would be built locally or imported. (Ford)

- As a condition of its bankruptcy restructuring, General Motors has ceased production at its plant in Shreveport, La. The plant, which produced more than 4.5 million vehicles over three decades of operation, was last used to produce the GMC Canyon and Chevrolet Colorado midsize pickup trucks. Production of the next-generation Colorado is to be performed at G.M.'s plant in Wentzville, Mo., but the automaker has not announced a timetable for producti on, saying only that there would be a gap between the closing of the Shreveport plant and the ramping up of production at Wentzville. (The Detroit News)

- Robert Kubica, the Formula One and World Rally Championship driver who sustained extensive injuries to his right arm and hand in a rallying crash in February 2011, reportedly participated in test drives of the 2013 Fiesta RS W.R.C. car for the Ford factory team. The drive occurred near Reims, France, according to an unidentified source who spoke with Autosport. Ford team principal Malcolm Wilson refused to corroborate the source's claim, Autosport said. (Autosport)

- The F.I.A., the motorsport sanctioning body, announced on Monday that Rio de Janeiro became the first city to commit to hosting the Formula E Championship in 2014, its inaugural season. The series is limited to Formula cars powered purely by electricity. Formula E will go forward as a demonstration program in 2013, according to the sanctioning body , and will ideally consist of 10 teams and 20 drivers by 2014. (F.I.A.)

Mazda Enters the Midsize Fray With Sleeker Mazda 6 Sedan

By PAUL STENQUIST

Mazda introduced its 2014 Mazda 6 at the Moscow motor show on Tuesday. The redesigned midsize sedan will mix it up with recently updated entries from Ford, Chevrolet, Nissan, Honda and Toyota. Judging by the details released by Mazda at the show, the 6 seems well equipped for the fight.

Unlike the recently introduced Mazda CX-5 crossover, which bore just a passing resemblance to the Minagi design exercise that preceded it, the new 6 appears to be quite faithful to the Takeri sedan concept first shown at the Tokyo motor show in 2011. In keeping with the automaker's practice of ascribing mythical language to its engineering and design principles, both cars bear the influence of Kodo, or soul of motion, the philosophy that displaced Nagare, Mazda's previous design language.

Like the Takeri concept, the 6 bears pronounced front fender arches, sharply creased character lines that sweep upward from the bottom of the front w heel wells, a smoothly arcing roofline over a crescent of side window glass and a gaping front grille that departs a bit from the much-maligned “Mazda smile.” The car has a slippery, low-slung look that is borne out by a 0.26 coefficient of drag.

The wheelbase of the sedan has increased from the 109.8 inches of its predecessor to 111 inches. This aligns it more with larger midsize offerings like the 2013 Ford Fusion at 112.2 inches, while eclipsing that of the 2013 Nissan Altima, at 109.3 inches. Mazda said the longer wheelbase allowed for a roomier interior and more ample storage space.

Like other recently introduced Mazda vehicles, the sedan incorporates the automaker's Skyactiv suite of efficiency-enhancing technologies. The centerpiece of Skyactiv is power-plant engineering that relies on extremely high compression ratios, up to 14:1 in some iterations; specially tuned exhaust plumbing that reduces combustion temperature; variable valve timing; and direct fuel injection to deliver fuel economy and performance to rival hybrid powertrains and turbocharged direct-injection engines. The Russian specification of the sedan receives two Skyactiv engines: a 134-horsepower 2-liter 4-cylinder unit and a 189-horsepower 2.5-liter 4-cylinder.

Aside from high-compression engines, the Skyactiv technology package includes lightweight body and chassis units, as well as automatic transmissions that combine a multiplate clutch and a torque converter.

The Takeri concept vehicle that made the auto-show rounds over the last year was equipped with a diesel engine. The automaker has not indicated if a diesel would be offered in the new sedan.

The Russian-specification 6 is also equipped with i-Eloop, a capacitor-based regenerative braking system that Mazda said would improve fuel economy by reducing the vehicle's dependence on traditional battery-charging technology. The car also has engine-shutdown technology.

Mazda said sp ecifications, pricing and availability information for the North American market would be announced at a later date.

In California, Stickers for H.O.V. Lane Privileges Go Begging

August 29, 2012, 11:51 am

By JIM MOTAVALLI

The gridlocked freeways of California are the stuff of infamy, so when the state's Air Resources Board began administering a sticker program granting drivers of plug-in hybrids a free pass into high-occupancy-vehicle lanes, a flood of applications was expected. The flood, however, has instead been a trickle.

Since the program started in January, the California Department of Motor Vehicles has issued 4,092 of the green-colored stickers to drivers who own or lease the Chevrolet Volt or Toyota Prius Plug-in Hybrid, the only eligible vehicles. For a state with more than 30 million registered vehicles, that is not a big number. California set a cap of 40,000 on the sticker program.

There are several poss ible explanations for the low claim rate. One presumes that new cars like the Volt and Prius Plug-in Hybrid represent too great a twist on hybrid-vehicle technology to attract throngs of buyers. Another, as noted by the Web site PlugInCars, presumes there is simply too little variety in the marketplace, which could be partly remedied when the Ford C-Max Energi and Ford Fusion Energi plug-in hybrids begin sales.

“They've only begun to sell them, don't forget,” Stanley Young, a spokesman for the Air Resources Board, said of the two qualifying plug-in hybrids in a telephone interview on Tuesday.

Together, General Motors and Toyota have sold about 15,000 of the models nationwide through July. The Volt, the lynchpin of a revamped General Motors, did not qualify for a green sticker until the 2012 model year, when G.M. met prerequisites set by the board, which entailed the revision of emissions equipment and the offering of a 10-year, 150,000-mile battery warranty.< /p>

The board estimates that 40 percent of all plug-in passenger vehicles in the United States are registered in California. “The program has a pretty good percentage of the eligible plug-in hybrids on the road,” John Swanton, another spokesman for the board, said in a telephone interview.

Purely electric vehicles and cars that run on natural gas are also eligible for H.O.V. lane privileges, as a result of a program that started in 1999. The California D.M.V. said there have been nearly 20,000 takers, though Mr. Swanton noted not all the cars that bore the program's white stickers were still on the road. An earlier and very successful yellow-sticker program for hybrid vehicles expired in 2011, after attracting the limit of 85,000 consumers.

Despite owning a purely electric Nissan Leaf and being deeply immersed in the program, Mr. Swanton has not applied for his rightful white sticker. “It doesn't factor into my commute in the Los Angeles area,” he said. “The 405 freeway is so slammed during rush hour that the carpool lane just moves a few miles an hour faster. It's more of a hassle getting to the H.O.V. lane than the speed increase warrants. And my other primary commute doesn't even have a carpool lane. Maybe I'll get a sticker. My wife is bugging me about it.”

Mr. Swanton said his purchase was motivated by the fuel savings and a love of new technology, not the prospect of H.O.V. lane privileges.”I don't have survey data to prove it, but some plug-in hybrid owners may feel that they don't gain much from the green stickers,” he said.

Changing Views of Globalization\'s Impact

August 29, 2012, 10:00 am

By EDWARD ALDEN

After a recent Economix post (as part of the election-year project called The Agenda) explaining that many economists see globalization as a major cause of the income slowdown in this country, Edward Alden of the Council on Foreign Relations noted on Twitter that this view was a new one. For years, economists argued that increased global trade did not have a large effect on wages or employment in the United States. The editors invited Mr. Alden - the director of the Renewing America initiative at the council, who previously helped run a council task force on trade and investment policy â€" to send along a more detailed version of his point.
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For decades, economists resisted the conclusion that trade â€" for all of its many benefits - has also played a significant role in job loss and the stagnation of middle-class incomes in the United States. As recently as 2008, for instance, Robert Lawrence of Harvard, one of the country's most respected trade experts, concluded that trade explained only a small share of growing income inequality and labor market displacement in the United States.

 

Rather than focusing on trade, economists argued that other factors â€" especially “skill-biased technical change,” technological innovation that puts an added premium on skilled workers â€" played the biggest role in holding down middle-class wages. But now economists are beginning to change their minds. Responding to The Times's recent survey about the causes of income stagnation, many top economists have cited globalization as a leading cause.

While the evidence is still no t conclusive, it is pretty strong. Trade's effect on jobs and income, which was probably modest through the 1990's, now seems to be growing much larger. Among the recent studies:

- In “The Evolving Structure of the American Economy and the Employment Challenge,” the Nobel-winning economist Michael Spence looked at job growth from 1990 to 2008 in sectors of the United States economy. He found almost no net job growth in sectors, like manufacturing, in which global trade played a large role. Nearly all of the net gains occurred in sectors in which trade plays a minor role. Government and health care, in which trade plays almost no role, accounted for more than 40 percent of all new jobs.

- David Autor, David Dorn and Gordon Hanson looked at regions in the United States where companies are competing most directly with China. From 1990 to 2007, they found that regions that faced growing exposure to Chinese competition ha d higher unemployment, lower labor-force participation and lower wages than might otherwise be expected. And the effects grew over that period. In 1991, just 2.9 percent of United States manufacturing imports came from low-wage countries; by 2007, that had risen to nearly 12 percent, mostly from China.

- In the Council on Foreign Relations Task Force on U.S. Trade and Investment Policy, my colleague Matthew Slaughter looked at employment at multinational companies with headquarters in the United States, companies that account for roughly 60 percent of American exports and imports. From 1989 to 1999, those companies created 4.4 million jobs in the United States and 2.7 million jobs at their foreign affiliates overseas. From 1999 to 2009, however, those same companies eliminated a net of nearly 3 million jobs in the United States while adding another 2.4 million jobs abroad.

The usual rebuttal to these findings is to argue that they stem mostly from ma nufacturing. And manufacturing, the argument goes, is facing a long-run, secular decline in employment that is largely technology-driven, not unlike the story of agriculture in the 20th century. The job losses in manufacturing may seem as if they have been caused by trade, according to this view, but they have actually been caused by technological change.

Through the 1990s, that story was largely plausible. But over the last decade it is not. Manufacturing output in the United States is no longer growing as rapidly as it once was (and as you would expect if technology had simply been replacing workers in factories). Real manufacturing output grew just 15 percent in the 2000s, compared with more than 35 percent in each of the 1970s and 1980s and more than 50 percent in the 1990s. And one sector where the statistics are of dubious meaning - computers and electronics â€" accounts for almost all of the recent gains. In 13 of 19 manufacturing sectors, real output declined o ver the last decade, in some industries quite sharply. There is no question that over the last decade United States manufacturing has declined, taking away jobs and driving down wages for those who are still employed. Robert Atkinson and colleagues have a useful paper on this topic, showing that the loss of more than five million jobs in manufacturing in a decade was not primarily a technology and productivity story.

The real-world evidence makes it surprising that it has taken economists so long to catch on. The recent strike in Joliet, Ill., at Caterpillar â€" a true global company - ended with union workers being forced to accept an agreement that includes a six-year wage freeze, even as the company is earning record profits. Elsewhere, two-tier agreements, in which new hires earn wages and benefits roughly half as large as those in the old union contracts, have become standard in many of the manufacturing industries that remain in the United States.

One reaso n that economists may be uncomfortable talking about trade's impact on jobs and wages may be concern that it could set off protectionist responses. And economists are right that expanded trade has certainly been good for the United States. It has brought us better and cheaper consumer goods, opened new export markets, lifted up many poor countries and strengthened American alliances around the world.

But I think the fear of protectionism is overblown. One unexpected feature of the great recession was how little protectionism it led to, especially in the advanced economies. The lesson of the Great Depression â€" that protectionism is counterproductive â€" seems to have been learned.

Instead, the evidence should produce some soul-searching about the causes of this country's declining competitiveness. The list is discouragingly long: crumbling infrastructure, inadequate educational performance, stifling regulation and a cumbersome tax system. But it might not take t hat much to tip the scales in favor of the United States. The Boston Consulting Group, which has looked at the slight uptick in the nation's manufacturing employment over the last two years, argues that rising wages in China, high transportation costs and falling United States energy costs should bring more manufacturing back home.

With the rapid growth of middle classes abroad, trade should be an opportunity for the United States to sell into growing markets, increasing opportunities and wages for many Americans here at home. But over the last decade, that has not been the story.

Is the Fiscal Cliff a Big Deal?

By CASEY B. MULLIGAN

Casey B. Mulligan is an economics professor at the University of Chicago.

With their Keynesian analysis, the Congressional Budget Office and others have exaggerated the effects of the “fiscal cliff” on the labor market and the economy.

Come January, current law provides for significant cuts in federal spending and for tax increases â€" and thereby significant federal budget-deficit reduction. These provisions have been collectively described as the “fiscal cliff,” which emerged when Democratic and Republican leaders could not agree on plans on spending and taxes.

The Congressional Budget Office has warned that the fiscal cliff will cause a double-dip recession, but its analysis for 2013 is based on the Keynesian proposition that anything that shrinks the federal budget deficit shrinks the economy, and the more the deficit is reduced the more the economy is reduced.

In many circumstances, the Key nesian proposition reaches the wrong conclusions about economic activity, because deficits do not necessarily expand the economy or prevent it from shrinking. For example, reducing the deficit by cutting unemployment insurance â€" it's one of the programs that would be cut in January â€" would shrink the economy in the C.B.O.'s view.

But in reality, cutting unemployment insurance would increase employment, as it would end payments for people who fail to find work and would reduce the cushion provided after layoffs.

Helping people who are out of work may be intrinsically valuable because it's the right thing to do, but the Congressional Budget Office is incorrect to conclude that it also grows the economy or prevents it from shrinking. Paying people for not working is no way to put them to work.

The Keynesian proposition about budget deficits ignores incentives of all kinds, so its incorrect conclusions about the fiscal cl iff are not limited to unemployment insurance. Another example: the fiscal cliff would put millions of Americans on the alternative minimum tax, which Keynesian analysis said would shrink the economy solely because it collected more revenue.

Yet economists who have studied the alternative minimum tax have found that its effects on incentives to work and produce are essentially neutral, compared with the ordinary federal personal income tax.

(The Congressional Budget Office does not use pure Keynesian analysis for its long-term projections, which include labor-supply incentive effects of tax rates, but apparently has decided that incentives' effects can be safely neglected in the short term.)

None of this implies that the fiscal cliff will expand the economy, because some of its provisions will increase the penalties for working and producing.

The fiscal cliff would cut Medicare payments to doctors by 2 percent, which reduces doctors' reward for treati ng Medicare patients. This may cause doctors to work less (or to work more for non-Medicare patients). The fiscal cliff would end the “Bush tax cuts” provisions, some of which have been enhancing the incentive to work (but beware â€" not all laws labeled “tax cuts” enhance incentives).

Perhaps the incentive-reducing provisions of the fiscal cliff outweigh its incentive-enhancing provisions, in which case the Congressional Budget Office has arrived at approximately the right answer for the wrong reasons.

But even in that lucky case, the C.B.O.'s quantitative estimates of the fiscal cliff's economic effects are not reliable until they fully incorporate economic incentives.

Color Guard Readies Its Wares for the U.S. Grand Prix

By RONALD AHRENS

The exigencies of building a racetrack from scratch have made the United States Grand Prix a fluttery matter in motorsports circles. But the race at the Circuit of the Americas in Austin, Tex., is scheduled for Nov. 18, providing a platform for the Texas capital, American fans of Formula One and a tiny flag maker in the town of Nipomo, just inland from the central coast of California.

Dynamic DeZigns began negotiating with a representative of the circuit in February about supplying flags for the race, according to Tony Otto, the company president. In a telephone interview and subsequent e-mails, Mr. Otto said his company received the largest order in its 14-year history in May from Texas: 386 flags for corner marshals; two starter's sets, each with nine flags; and additional banners to regulate traffic on the pit road.

The F.I.A., the governing body of Formula One, sends top-ranking supervisors to every race on its ca lendar, but relies on national affiliates - in the case of the United States Grand Prix, the Sports Car Club of America - to provide race marshals to perform the flagging on raceday. An official at the S.C.C.A. acted as the intermediary between the circuit and Dynamic DeZigns, Mr. Otto said.

Aside from the familiar green to go, yellow to slow and checkered to finish, the uniform set of F.I.A. flags includes the international electric-blue to indicate drivers should move over, as well as the black-and-white opposing triangles to indicate unsportsmanlike conduct.

Dynamic DeZigns already provides flags to the IndyCar series as well as to managers of various road courses and short oval tracks around the country. Mr. Otto was hopeful that the Austin race would bring opportunities to supply other F.I.A.-sanctioned races, like the World Touring Car Championship at Sonoma, Calif., on Sep. 23. “This is another large feather in our cap,” said Mr. Otto, who has waved fl ags in drivers' faces as an avocation since he was 16.

The company consists of Mr. Otto and his mother, Gay Otto, and a seamstress Martha King, who works from Victorville, Calif., in the state's high desert north of San Bernardino. Mr. Otto, a facial-recognition software designer by day, declined to put a price tag on the order from the Circuit of the Americas, but said his avocation “barely” paid for itself.

The deal was locked when an example of every flag was produced for the approval of F.I.A. officials, who visited Austin in June, after the Canadian Grand Prix in Montreal. Shipping began last week.

The order posed a set of peculiar challenges to Dynamic DeZigns. Ms. King, the seamstress, was required to measure the ripstop nylon flag fabric in centimeters rather than inches. By F.I.A. standards, checkered and red flags must be cut to 80 centimeters by 100 centimeters, larger than other flags in a set. Additionally, the orange circle on the black fl ag, which indicates mechanical issues, must grow to 40 centimeters, about one-third larger than those used in national road racing. The fabric is treated with a fire-retardant coating that also prevents fraying.

Mr. Otto used the word “building” to describe the process of creating flags. After ordering 100-yard rolls of fabric, Ms. King performs piecing, stitching and hemming. The flags are then sent from Victorville to Nipomo for completion.

There, Ms. Otto trims away loose threads and fortifies the stitched corners with glue. Mr Otto performs finishing work on the 5/8″ wooden dowels used for handles. Velcro is added, and the dowels are sealed inside the flags' headers, which are made of strong Cordura material.

The result: sets of flags stout enough to start hundreds of races, warn and disqualify stragglers and rule breakers, and hail all remaining finishers.

A Dismal Outlook for Growth

By ANNIE LOWREY

They don't call it the dismal science for nothing.

In a new paper, the Northwestern economist Robert J. Gordon argues that the United States should get ready for an extended period of slowing growth, with economic expansion getting ever more sluggish and the bottom 99 percent getting the short end of the (ever-slower-growing) stick.

“A provocative ‘exercise in subtraction' suggests that future growth in consumption per capita for the bottom 99 percent of the income distribution could fall below 0.5 percent per year for an extended period of decades,” he writes.

To put that in context, American households' real consumption expanded by about 3 percent a year before the recession hit and has been growing about 2 percent a year during the recovery, according to statistics from the Organization for Economic Cooperation and Development.

Mr. Gordon's paper joins a growing economic literature that seeks and fa ils to find new sources of bang-up growth. (See Tyler Cowen's wonderful “The Great Stagnation” for more on that.)

In the past, the United States economy grew quickly and its citizens got richer, in no small part because of advances made in three consecutive industrial revolutions: steam engines and railroads first; electricity, indoor plumbing and the combustion engine second; and the computing revolution third.

But the productivity and income gains begot by that third revolution have not been as impressive as the productivity and income gains from the first and second, he writes. Moreover, the United States is facing a number of headwinds. We've gotten most of the gains from the “demographic dividend.” Inequality is rising. Higher education is getting more costly, and student performance waning. We have high levels of government and household debt. And we have taxes and regulations stifling innovation and businesses.

That leads Mr. Gordon to question the notion that growth is a “continuous process that will persist forever.” We might not stop growing. But he argues we will stall out.

“Doubling the standard of living took five centuries between 1300 and 1800. Doubling accelerated to one century between 1800 and 1900. Doubling peaked at a mere 28 years between 1929 and 1957 and 31 years between 1957 and 1988,” he writes. “But then doubling is predicted to slow back to a century again between 2007 and 2100.”

Of course, there could be revolutionary new sources of growth: from the singularity, maybe, or a new renewable energy source. An article about “The Next Great Growth Cycle” also has some good pushback on the doom-and-gloom economic narrative.

Wheelies: The Resurrection Edition

August 28, 2012, 11:21 am

By THE NEW YORK TIMES

In which we bring you motoring news from around the Web:

- Spyker, the Netherlands-based supercar manufacturer, announced on Monday that it signed a framework agreement to form two distinct joint partnerships with Youngman, one of the Chinese automakers involved in the failed financial takeover of Saab Automobile, a former holding of Spyker. One venture would resurrect the platform of the Saab PhoeniX concept, to which Youngman bought nonexclusive licensing rights in 2011, according to Spyker. The resulting “full range of premium car models based on the Phoenix platform” would be built in Europe and China. Spyker did not provide a timetable for the partnerships' ratification or production of the new vehicles. (Spyker)

- A contractor fired by Toyota's manufacturing arm downloaded sensitive plans relating to parts for future vehicles and sabotaged the division's software programs, the automaker recently claimed in a complaint filed in a United States District Court in Lexington, Ky. Toyota said it was too soon to verify that the plans did not get distributed, but it said it “did not believe” that the proprietary information was shared outside the division. (Automotive News)

- Porsche has announced pricing and specifications for its 911 Carrera 4 and 4S. The all-wheel-drive coupes and convertibles are scheduled to be introduced at the Paris motor show in September. With 350 horsepower, the Carrera 4 coupe is priced from $91,980 and the convertible from $103,880. The Carrera 4S coupe, with 400 horsepower, is priced from $106,580 and the convertible from $118,480. Porsche claims the Carrera 4 is up to 143 pounds lighter than the previous model. (Porsche)< /p>

- Dany Bahar, the former chief executive of Group Lotus who was fired in June, has filed a lawsuit for unlawful dismissal against DRB-Hicom, the company's corporate parent. According to a report by Bloomberg, Mr. Bahar is seeking £6.7 million, or $10.6 million. In a statement, DRB-Hicom said it and Group Lotus would file counter-claims against Mr. Bahar, who was dismissed after an investigation into his conduct. The findings of that investigation were never disclosed publicly by DRB-Hicom. (Bloomberg)

- The final Mazda 6 sedan to be produced at the AutoAlliance plant in Flat Rock, Mich., was completed on Aug. 24. The plant, which was run by Mazda and Ford, is scheduled to receive a $550 million upgrade and pass wholly into ownership to Ford. Mazda began construction of a new plant in the central Mexican state of Guanajuato in October 2011, where it expected to build the 2 and 3 compact vehicles for the Central and South American markets, and potentially for North America. Production of the next generation of the 6 is scheduled for Japan. (The Detroit News)

Why Hayek Isn\'t Paul Ryan\'s Guru

By BRUCE BARTLETT

Bruce Bartlett held senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of Representatives Jack Kemp and Ron Paul. He is the author of “The Benefit and the Burden: Tax Reform â€" Why We Need It and What It Will Take.”

Because the Republican presidential nominee, Mitt Romney, remains an enigma to almost everyone, those seeking insight into his core philosophy have focused on his choice of Representative Paul D. Ryan, who has been much more forthcoming about his intellectual influences, as his running mate.

Mr. Ryan has credited a variety of people, from the Representative Jack Kemp to the libertarian novelist Ayn Rand, for his thinking. An article in this week's New York Times Magazine credits another: the economist Friedrich von Hayek. Mr. Ryan mentions Hayek among his influences in the introduction to his Roadmap for America's Future, which embodies his plan to slash th e size of government.

Hayek has long been popular among conservatives mainly because of one book, “The Road to Serfdom,” published by the University of Chicago Press in 1944. Although written for a British audience â€" the Austrian-born Hayek was teaching at the London School of Economics when he wrote it â€" the book found its greatest success in the United States.

The New York Times had a great deal to do with the success of “The Road to Serfdom.” Its introduction was written by John Chamberlain, who had been The Times's principal book reviewer in the 1930s. The Times's book review was written by one of its editorial writers, Henry Hazlitt, who was effusive in his praise not only for the book's substance but for its elegant style as well. It was featured on Page 1 of The Book Review on Sept. 24, 1944.

According to Hayek's biographer, Alan Ebenstein, The Times's review was the major reason that “The Road to Serf dom” became a best seller. Indeed, its influence continues, aided by recommendations from Representative Ron Paul, Republican of Texas, and the radio host Glenn Beck to members of the Tea Party movement.

Hayek's basic thesis is that socialism inevitably transforms into totalitarianism. A key reason is that socialism cannot work economically, he believed. During the 1930s, Hayek was in the forefront of the socialist calculation debate, in which he, Ludwig von Mises and other economists proved that pure socialism had to fail because it lacked a true price system to guide efficient production and distribution.

The inevitable failure of socialism, Hayek thought, would eventually require authoritarian methods to try to make it work, as was the case in the Soviet Union and Nazi Germany. At the time he wrote his book, Britain, France and other European countries were adopting explicitly socialist policies, like state ownership of major businesses and industries.

Although there has never been much support for European-style socialism in America, World War II and the New Deal led to a great expansion of government. In 1944, it looked as if the United States were traveling rapidly in the same direction as Europe, and Hayek's thesis was not implausible, given recent history.

The big problem for that those who continue to cite “The Road to Serfdom” as a guide is that they must essentially ignore everything that happened after 1944. Communism's high-water mark occurred a few years later, and before long it became obvious that communism was not a path to prosperity. Nor has anything remotely like Nazism ever resurfaced.

By the 1970s, few reputable economists really thought that socialism was a good idea. Ironically, one of them was Gunnar Myrdal, with whom Hayek shared the 1974 Nobel in economic science.

In 1979, the conservative Margaret Thatcher, whom Hayek greatly admired, became prime minister of Britain and quic kly began selling the state enterprises that had been acquired after the war. “Privatization” became a worldwide phenomenon, and the number of state-owned enterprises fell. Communism collapsed in 1989, and the Soviet Union dissolved in 1991.

Thus postwar history is exactly the opposite of what Hayek predicted. Liberalism did not beget socialism, which did not beget totalitarianism.

Another problem for conservatives like Mr. Ryan is that Hayek would have been likely to oppose many of their pet ideas, like abolishing Medicare. In “The Road to Serfdom,” Hayek explicitly endorsed social insurance:

Nor is there any reason why the state should not assist the individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision. Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance â€" where, in short, we deal with genuinely insurable risks â€" the case for the state's helping to organize a comprehensive system of social insurance is very strong.

In “The Road to Serfdom,” Hayek also endorsed state aid to victims of floods and earthquakes, government policies to regulate working hours and to control poisonous substances. In other writings and interviews, he endorsed antitrust laws, a minimum wage and even the Tennessee Valley Authority, long a right-wing bête noire. In a 1982 interview with The New York Times, Hayek was even skeptical of Ronald Reagan's economic plan, calling it “a very risky thing to do.”

Moreover, Hayek was not doctrinaire about the importance of political freedom. In a 1979 interview with The Times, he defended the Chilean regime of Augusto Pinochet, which combined political repression with free-market economics, calling the results “absolutely fan tastic.” Asked whether this view was inconsistent with his philosophy, Hayek replied, “You can have economic freedom without political freedom, but you cannot have political freedom without economic freedom.”

For such transgressions, some on the right have long viewed Hayek as a dubious ally. For example, the libertarian economist Walter Block wrote a detailed attack on Hayek in 1996 for being at best a lukewarm defender of the free market.

I suspect that in his heart, Representative Ryan is more attracted to the dogmatism of Rand than the complex, nuanced philosophy of Hayek, who told the Cornell political scientist Theodore Lowi that Rand angrily called him “a compromiser” on the only occasion they met.

Driving the Winnebago Via

By EZRA DYER

WILMINGTON, N.C. - After five minutes of wrestling with the electronic parking-meter station, I had my receipts to place beneath the windshield wiper. A roving meter maid would see that I had paid for my spot. And the spot next to it. And the one next to that, thus answering the question, “Where do you park a 25-foot Winnebago Via motor coach?” I'll take spaces 113 through 115, thanks.

This year, the 2013 Via served as transportation for the annual family trip to the beach. We rented a house, but I figured the Winnebago in the driveway would serve as my oasis of solitude, a respite from the perpetual activity in the house. It also would serve as a sort of mega-sport utility vehicle, toting much of the luggage and assorted detritus to fill the six-bedroom rental.

At first blush, the Via seems unfathomably huge and ponderous; it may have only four seat belts, but its rear luggage compartment is bigger than some hotel roo ms I've stayed in. Within a couple of hours on the road, however, I was throwing it into corners like the overgrown Mercedes-Benz Sprinter van it was.

The steepest part of the learning curve concerned the lack of a rear window and, consequently, a rear view. Like any good truck driver, I conditioned myself to rely on the huge outside mirrors, which provided ample sight lines down the Via's flanks. They were abetted by side cameras that commandeered the navigation screen whenever the turn signal was activated. Had I inadvertently crushed the Hyundai hanging by my bumper, I would have had no excuse.

Though my comfort level grew as I drove, there was no forgetting that this was a massive conveyance. By subtracting the passenger and cargo capacity from the Via's 11,030-pound gross vehicle weight rating, I deduced that the Via's curb weight was around 9,600 pounds. And with the humble output of its turbodiesel three-liter Mercedes V-6 engine - its 188 horsepower and 3 25 pound-feet of torque are less than half that of a new diesel-powered Ford pickup truck - I figured testing the Winnebago's 5,000-pound tow rating might be a bridge too far. But I needed to get a 4,000-pound boat to the coast, so I hooked up the trailer and stepped back to ponder my 50-foot-long, 14,000-pound vacation behemoth. Go big or go home? I say go big and drive your home to a different home.

Burdened by seven tons of boat, passengers and cargo, the little V-6 huffed its turbocharger and resolutely propelled the Via down the highway at the speed limit of 70 miles per hour. Granted, I wasn't crossing the Continental Divide, but I had to conclude that the Sprinter was an absolute beast. Over 130 miles of boat towing, the Via averaged 11.5 miles per gallon, which struck me as pretty decent, all things considered. Winnebago claims the Via can creep toward 20 m.p.g. when unburdened by a trailer. On-the-road dynamics would seem a low priority for a vehicle that coun ts “decorative backsplash” on its list of standard equipment, but the Via was actually quite pleasant to drive.

As for making the Via my seaside man cave, I lost the desire. The rooftop-mounted air-conditioner took a while on a 93-degree summer day to cool the interior. Still, I could appreciate that the Via would be quite the launchpad for a couple eager to explore the country. There are twin beds in back, which can convert to a king; a power-slideout living room; as well as cabinetry and appliances befitting a vehicle with a Mercedes badge on its crossbar grille. The refrigerator could run on propane or electricity, so I used it for overflow beer storage without firing up the onboard generator, a nice convenience.

Which brings me to my major beef with the Via. Its 3,600-watt Cummins Onan MicroQuiet generator could stand to be better isolated from the chassis, perhaps by sound-deadening material or vibration-absorbing mounts. The generator is not terribly lo ud from the outside, but when one is relaxing in the rear living area, the vibrations course up through the floor, making it sound as if junior were mowing the lawn right outside the window.

Many Via drivers will avail themselves of power ports at recreational vehicle parks, thereby eliminating the need to run the generator. Though I'm not a rugged individualist in the Thoreau mold, I'd want to head off the grid in the Via to a place I'd have all to myself. And in those environments, I'd be reliant on a generator that might spook the mule deer.

But if its generator is loud, the Via's exterior graphics are louder. Granted, slews of R.V.'s embrace tasteless graphics. This vehicle had full-body paint, a $5,166 option, which consisted of a taffy swirl of color that looked like it could have been the logo for one of Vince McMahon's old XFL teams. I understand that a canvas this large could come across as bleak and brooding in monotone, but what's wrong with a little o ld-fashioned two-tone or some discreet stripes? Why does every R.V. graphics package look like it was created by Pauly D's tattoo artist?

At $136,539, the price of my tester R.V. reflected a base sticker of $125,045 along with $11,494 worth of options. People are invariably shocked at the price of R.V.'s, but $136,000 doesn't strike me as out of line for a well-wrought, 25-foot-long mobile abode riding on a Mercedes chassis. On the latter subject, I went to the Mercedes Sprinter Web site and priced out the bare chassis, which came to more than $41,000 all by itself. Add that power-slideout living room, air-conditioning, heating and plumbing systems, a kitchen and bathroom, multiple TVs, a 16-foot power awning and a king-size bed, among other bits of kit, and low six figures begins to look quite reasonable.

Some might delegate the imperative of forward movement to a high-torque Ram, Ford or GMC pickup and the mobile domicile to a trailer, generally a far less expe nsive proposition than an R.V. Trailers, however, don't have the cachet of coaches, a point driven home on my final day of vacation.

All week, the Via was parked nose-out in the driveway, the rationale being to dodge any neighborhood ordinance designed to prevent the Cousin Eddies of the world from torpedoing local property values with a permanently stationed 1977 Chalet Festiva Supremo. But even if there's an anti-R.V. law in place, who is going to complain about a Mercedes in the driveway? The Via, consequently, spent the week with its three-pointed star pointed brazenly toward the house across the street, daring a call to the relevant authorities.

Sure enough, as I packed up to leave, I felt that very challenge approach. The residents across the street pulled in, disembarked from a diesel BMW X5 and began glancing at the Via while talking in low tones. I steeled myself for a conversation that very likely would begin and end with, “You know you can't park tha t here.”

A moment later one of them called out, “Excuse me. Hey, is that thing as awesome on the inside as it looks from the outside?” I affirmed that it was, unlocked the doors and let them have a look around. It was a good thing they spoke up, because in a few hours the Via would be out of there, on its way to the next stop of a perpetual vacation.

Wealth, Taxes and Public Opinion

By CATHERINE RAMPELL

Last week I wrote about a new Pew Research Center report on the ailing middle class. Today, Pew has come out with a comparable report about the wealthy and how Americans feel about this upper-income class.

When respondents were asked how much a family of four would need to earn to be considered wealthy “in your area,” the median response was $150,000. The responses varied by geographic region, though, with people in the Northeast (where the cost of living is higher) giving a median response of $200,000.

The survey also included a pointed question about whether upper-income people pay their “fair share” in taxes. About 26 percent of respondents said they did, with another 8 percent saying the rich paid too much in taxes and 58 percent saying the rich paid too little.

If that sounds like a lot of people complaining that the wealthy don't contribute enough to Uncle Sam, note that Americans' attitudes to ward the tax obligation of the rich have become much less demanding over the last two decades.

When this question was first asked by Gallup, in March 1992, 77 percent of respondents said upper-income Americans paid too little in taxes. Yet the average income tax burden of the wealthy was actually higher then.

In 1992, when more than three-quarters of Americans said that rich people should be paying more, a family of four earning twice the median household income paid an average federal income tax rate of 14.79 percent, according to the Tax Policy Center.

As of 2011, the average tax burden for a family of four earning twice the median income (which came to $151,296) was 12.93 percent.

Over the same period, Americans have become much more demanding about how much the poor pay, however.

In 1992, 8 percent of Americans said lower-income people paid “too little” in taxes. Today that share has risen to 20 percen t.

As with that of the wealthy, the tax burden of the poor has also fallen considerably in the last two decades; in 1992, a family earning half the median income paid an average tax rate of 4.55 percent, whereas last year a family in that position had a negative tax burden of 6.84 percent (that is, the family received money from the federal government equaling 6.84 percent of their income, thanks to refundable tax credits).

For whatever reason, Americans have become much less tolerant of lower tax rates for the poor than they have for the rich.

Addendum on methodology: Pew's survey was done through telephone interviews conducted July 16-26, 2012, with a nationally representative sample of 2,508 adults ages 18 and older. The margin of sampling error is plus or minus 3 percentage points.

Monday Motorsports: Denny Hamlin Wins, as Sprint Cup Chase Takes Shape

By JONATHAN SCHULTZ

After passing forgettable summers, early front-runners of this 2012 Nascar Sprint Cup season are reestablishing their dominance. And with just two races before the chase, the series' de facto postseason, begins, the late surge is well timed.

Denny Hamlin won his first Sprint Cup race since April and the first of his Sprint Cup career at Bristol Motor Speedway, strengthening his chances for a berth in the chase. His performance on Saturday night in Tennessee followed a victory by Greg Biffle at Michigan on Aug. 19, in which the Ford driver won his first race since April to claim the overall series lead from Jimmie Johnson. Though he finished far off the podium, in 19th place, Biffle secured his place in the chase, as did Johnson, who finished second to Hamlin.

Though he executed a daring late pass on Carl Edwards to claim the lead, which he preserved for his third victory of 2012, Hamlin has not been as consistent a finisher as Biffle or Brad Keselowski, another three-victory holder, who qualified for the chase despite finishing in 30th place after being spun toward the inner wall on lap No. 270. (ESPN)

Here are other motorsports results from the weekend:

- Stealing some momentum from his teammate at Penske, Ryan Briscoe defeated Will Power at Sonoma, Calif., on Sunday. Though he finished second on the road course, Power retained the overall lead in the IndyCar series. He was followed across the finish line by Dario Franchitti. Rubens Barrichello, who left Formula One to race in IndyCar this year, finished fourth, a career best. (IndyCar)

- Dani Pedrosa continued to chip away at the point advantage of Jorge Lorenzo, winning his second consecutive MotoGP race on Sunday in the Czech Republic. Pedrosa moved within 13 points of Lorenzo, the series leader, who in July appeared to have the second MotoGP title of his career all but claimed. The Briton Cal Crutchlow placed thi rd, earning his first podium finish of his career in MotoGP. (BBC)

- Sebastien Loeb resumed his virtually uncontested march to his ninth World Rally Championship, winning the Rally Germany on Sunday, his ninth win of 2012. He did so with a two-minute margin over Jari-Matti Latvala of Ford. Mikko Hirvonen, Loeb's teammate at Citroën, finished in third place. (Autosport)

In the Bay Area, Renting Electric BMWs by the Half Hour

By JOSIE GARTHWAITE

PALO ALTO, Calif. - A BMW 1 Series costs more than $30,000. But for the price of a few gallons of gas, Bay Area residents can zip around in a purely electric version of the compact coupe using DriveNow, a electric-car-sharing service from the German automaker.

BMW had previously made its ActiveE, based on the 1 Series, available to only 700 drivers nationwide under a two-year lease. But for the automaker's new DriveNow service, 70 ActiveE vehicles have been scattered among eight stations in San Francisco and Palo Alto for a pay-as-you-go rental program. And unlike many car-share services, which typically require round trips, DriveNow allows members to drop a car off at any DriveNow station.

BMW has been operating a similar program in Germany since June 2011 with the 1 Series and models from its Mini subsidiary. “We've found that the A-to-B model works, and works well,” Thomas Cole, a BMW of North America executi ve, said in an interview last week at an event organized by the Silicon Valley Leadership Group in Palo Alto.

The cars, which have a manufacturer-claimed 100-mile range, can be rented by the minute or day. In addition to a $39 one-time membership fee, drivers pay $12 for the first 30 minutes and 32 cents for each additional minute of drive time, or 13 cents a minute if the car is parked. Fees are capped at $90 a day and 55 cents for each mile over 180 miles.

That's certainly no bargain compared with the rates set by other car-sharing services, which typically charge $5 to $15 an hour, often with monthly or annual fees. But because DriveNow allows one-way trips, the purely electric journey could represent a superior value in certain situations - for example, if a resident of San Francisco were to drive to Palo Alto and spend several hours in meetings.

That said, the DriveNow initiative is positioned as a premium service, and would not necessarily compete wit h ZipCar and other established services.

“We see car ownership and people's relationship with cars changing,” Stacy Morris, a BMW spokeswoman, said in a telephone interview. Car sharing is a way for the company to “stay relevant,” she said, among “people who want to use a car and maybe use a premium car, but don't necessarily want to own a car.”

Younger drivers crave spontaneous access to mobility rather than the expense and responsibility of car ownership, according to Tom Turrentine, director of the Plug-in Hybrid and Electric Vehicle Research Center at the University of California, Davis, who also attended the meeting of the Silicon Valley Leadership Group.

That provides much of the impetus for start-ups that are developing platforms for car sharing and ride matching, and it's also prompting some automakers to reach beyond the business of building automobiles. General Motors has invested in RelayRides, a peer-to-peer car sharing start-up, and Daimler operates a service, Car2go, in more than a dozen cities in Canada, Germany, the Netherlands, California, Texas and Florida.

BMW also said that DriveNow should provide the automaker with information about how its E.V. technology performs in the real world. Ultimately, the automaker plans to add conventional gas vehicles to the DriveNow fleet and expand the service to other American cities, Mr. Cole said.

DriveNow does not have a specific list of cities next in line, but Mr. Cole said New York, Boston, Seattle and Vancouver, British Columbia,  were possible candidates, a point echoed by Ms. Morris. “We're looking at dense urban environments, the megacities that have congestion issues,” she said.

Mr. Cole has more immediate concerns - in particular, carving a path for DriveNow to expand its footprint in San Francisco. The company is negotiating with the city for additional parking at metered spots and public lots.

Starting next month, BMW p lans to offer another service, ParkNow, which allowing users to reserve and pay for parking spots through their smartphones. The company expects to have more than 100 locations running in the system within the next several weeks.

DriveNow and ParkNow are outgrowths of BMW i Ventures, the automaker's venture arm, which inaugurated an incubator in New York this year.

What Do Democrats and Republicans Agree On?

By ANNIE LOWREY

In the next two weeks, during the Republican and Democratic conventions, we'll hear a lot about the differences between the parties. How great we are. How terrible the other guy is. How we're better on Medicare, on Social Security, on foreign policy, on defense, on education, on taxes. How they're awful in policy realms you never even thought of.

That left me thinking: Where are the two parties closest together? What goals do they have in common that will likely go unmentioned in Tampa and Charlotte?

At least in the realm of economic policy, the best answer is: Not much. The parties have a foundational disagreement on the size and scope of government. They have bitter fights over when to start winnowing the deficit, whether to raise taxes, how much to cut government spending and where to cut it. They have stark differences on most major programs, including Social Security and housing subsidies.

Moreover â€" and mo re importantly â€" the parties have little interest in supporting the other side's policy proposals, no matter how much they might agree with them in private.

Even still, I thought of a few areas where the parties have common objectives. Here's a rundown, and if I have forgotten anything, throw it in the comments.

Tax simplification. Both parties agree on the absolute necessity of reforming the addled, inefficient American tax code. That means eliminating much of the underbrush of credits, loopholes and expenditures and then reducing marginal tax rates.Of course, the devil is in the details. Just about every tax expenditure has a powerful interest group behind it. That is part of the reason why neither party has gotten specific about what they would put on the chopping block, and both anticipate a drawn-out fight during the tax reform process.

Regulatory simplification. Democrats and Republicans both support simplifying the re gulatory code as well: Looking through the books, making rules simpler and clearer for businesses to follow and getting rid of outdated or duplicative regulations. To that end, the Obama administration has initiated a “look back” effort, requiring different governmental departments and agencies to scrub their regulatory codes. It has won applause from many thinkers on the right.

Fannie and Freddie. Both parties want them gone and a smaller government role in the mortgage market in the future. How to do it? Expect the parties to solidify their disagreements on that in the coming years.

Avoiding the fiscal cliff. On Jan. 1, according to current law, a host of tax breaks expire and huge, across-the-board budget cuts go into effect. In Washington, it's called the “fiscal cliff,” or, colloquially, “taxmageddon.” According to the Congressional Budget Office, it would throw the economy right back into recession. Neither party wants that, so expect an agreeme nt on some combination of short-term spending increases and short-term tax cuts after the election â€" though expect bitter fights on the means, if not the end. Many in Washington think that Congress will merely kick the can six months or a year down the road to leave time for negotiations.

Son of Debt Ceiling. Shortly after “taxmageddon,” perhaps sometime in February, the American government will exhaust its borrowing authority â€" meaning some unprecedented form of government default. It almost happened in the summer of 2011 and resulted in a credit downgrade. Neither party wants to go back there. Expect some agreement to lift the debt ceiling to come along with the deal to delay or otherwise soften the blow of the fiscal cliff.

Drill, baby, drill. The White House has approved new drilling in the Gulf and the Arctic. That's something Republicans broadly support and would go even further on.

Start-ups. Propose a bill to help start-ups, see your legisla tion win bipartisan support and the president's signature. Small businesses, and young businesses: Everybody loves them.

Iran sanctions. The White House has imposed stringent new economic and financial sanctions on Iran, with the aim of ending the country's nuclear ambitions. They have won broad bipartisan support, and the American and European sanctions added in the last year have slashed the regime's oil revenue.