Posts tagged ‘media’

Facebook Seeks To Leverage Its Own Failings to Get Congress to Cement Facebook's Monopoly Position

It is something you see all the time -- large companies asking to be regulated, at first glance against self-interest.  Those most interested in expansion of the government and the regulatory state will shout, "See!  Even large evil companies know they need to be subject to government oversight."

But in fact what is usually going on is that the large company knows that regulation will actually cement its position in the industry, making it harder for rivals and new entrants to compete.   Toy-maker Mattel turned a lead scandal of their own making into a coup by creating a regulatory framework that pounded its competitors.  Walmart and Costco often support minimum wage in retail legislation because they know that with their higher sales per employee, they can survive higher minimum wages than their smaller ma and pa competitors.

Mark Zuckerberg, who I am increasingly convinced is the most dangerous man in America, and his testimony to Congress begging for regulation, should be seen in this context.

So in Facebook’s case, they will advocate some institutionalized changes in the way social media should work. Every change will involve compliance costs. Facebook will make sure that it can comply...and that its competitors cannot without great expense. That will give them a distinct advantage in the marketplace, make it more difficult for startups to compete, and guarantee this platform a leading place by law.

This is why Mark readily agreed to be regulated. Regulations always work to the advantage of the largest market players....

Nor should this come as some sort of shock. This is the way government regulations have always worked, from the meatpackers in the early 20th century (who crafted and enforced meatpacking legislation), to all labor legislation (it’s labor-union lawyers who exercise the dominant influence) to Bitcoin regulations (the major exchanges are always involved) to digital technology today (no way are Google and Facebook going to be excluded from writing the regulations that govern their industries).

There is a civics-text myth that imagines government workers and politicians as all-knowing, crafting rules that benefit everyone as opposed to particular players. It imagines that major market players are suffering as government forces new rules that require their operations put greed on hold and serve the public. The on-the-ground reality is otherwise. There is not a single regulation on the books that does not have an author who is unattached in some way to the regulated industry in question.

Milton Friedman called this regulatory capture. The problem is the influence of industry is there from the beginning. It’s absolutely not the case that capitalists are champions of capitalist competition, as the career and policies of Donald Trump should make clear. Lots of people are good at using markets to make money; only very special people become defenders of open competitive processes.

Right now, Facebook faces massive competition from other platforms in social media, copycats, and alternative uses of people’s time. In some ways, it’s the best possible moment to call on government to institutionalize Facebook as a form of public utility. That might actually be the end game that Zuckerberg has in mind. Then the politicians can update their timeline status: today we passed regulations that brought this wayward company to heel.

Zuckerberg said from the very beginning that he was dismissive of individual privacy and he has created the Facebook honeytrap to kill it.  He now is setting his sights on free speech, begging the government to tear up the First Amendment.  He is a one-man individual rights wrecking crew.

Update:  I am actually going to include this from the Reason article about Mattel, because the situation is so similar -- a failing at a large company is used to create a regulatory framework that greatly aids the large company against rivals

Remember the sloppily written "for the children" toy testing law that went into effect last year? The Consumer Product Safety Improvement Act (CPSIA) requires third-party testing of nearly every object intended for a child's use, and was passed in response to several toy recalls in 2007 for lead and other chemicals. Six of those recalls were on toys made by Mattel, or its subsidiary Fisher Price.

Small toymakers were blindsided by the expensive requirement, which made no exception for small domestic companies working with materials that posed no threat. Makers of books, jewelry, and clothes for kids were also caught in the net. Enforcement of the law was delayed by a year—that grace period ended last week—and many particular exceptions have been carved out, but despite an outcry, there has been no wholesale re-evaluation of the law. Once might think that large toy manufacturers would have made common cause with the little guys begging for mercy. After all, Mattel also stood to gain if the law was repealed, right?

Turns out, when Mattel got lemons, it decided to make lead-tainted lemonade (leadonade?). As luck would have it, Mattel already operates several of its own toy testing labs, including those in Mexico, China, Malaysia, Indonesia and California.

So while most small toymakers had no idea this law was coming down the pike until it was too late, Mattel spent $1 million lobbying for a little provision to be included in the CPSIA permitting companies to test their own toys in "firewalled" labs that have won Consumer Product Safety Commission approval.

The million bucks was well spent, as Mattel gained approval late last week to test its own toys in the sites listed above—just as the window for delayed enforcement closed.

Instead of winding up hurting, Mattel now has a cost advantage on mandatory testing, and a handy new government-sponsored barrier to entry for its competitors.

A Quick Note: Trafficking and Prostitution are Not the Same Thing

Prostitution is a person selling sexual services of their own free will.  Trafficking is a form of kidnapping and slavery, when someone is forced to provide sexual services by someone with power over them.

All or even most prostitution is not trafficking, but many in the media and political sphere use these two a synonyms.  I have seen it all week surround the Robert Kraft bust for seeking a private happy ending even before his team played in the Superbowl.   I see this as a victory of traditionally anti-prostitution folks on the Right who have found a way to take advantage of a division on the Left, and specifically a division within feminism, to rebrand prostitution and bring some folks on the Left over to their side.

I am not an expert on feminist politics, but what I do know is the prostitution has created a divide among feminists.  You remember the old abortion chant that feminists wanted the government to keep its laws off their body?  That what a woman did with her body was an eminently private affair and should not be subject to government regulations?  Well, feminists who followed up on this thought in a consistent manner generally supported legalization of prostitution.  Bans on prostitution were seen by these folks as just another example of the male-dominated system limiting women's choices and ability to make money the way they choose.

On the other side more modern feminists see everything through the prism of male power over women.  This is the "all sex is rape" group and for them prostitution has nothing to do with women's free will and everything to do with yet another channel through which men objectify and dehumanize women.  From here it's only a small step to thinking that all prostitution is slavery.  And thus by attempting to rebrand prostitution as trafficking, the Right found new allies on the Left in their campaign against sex work.

Those who read me a lot know I come down on the side of women being able to exercise choice, and I think the only real dehumanizing going on is the denial by modern feminists of any agency among most women.

But real abusive trafficking certainly exists.  How much of prostitution fits this category is impossible to really know as a layman because the media and activists do so much to blur the line in their reporting.  But I will say this:  To the extent trafficking exists, it is not enabled by society somehow being soft on prostitution, in fact it is enabled by the opposite.  By making prostitution illegal, we give unscrupulous people leverage to abuse those in sex work.  Women being abused by men at, say, Wal-Mart have many legal outlets to air their grievances and seek change or compensation -- no one talks about trafficking in Wal-Mart greeters.  But abused sex workers cannot go to the legal system for redress of abuse because they themselves are treated as criminals in the system.  Contributing to this is our restrictionism on immigration.  This is why many real trafficking cases revolve around the abuse of immigrant women, because abusers know these victims have not one but two impediments to seeking legal help.

For a short time 5-10 years ago I thought we might be near a breakthrough in softening the penalties on women voluntarily seeking to make a living through sex work.  Now, my optimism has dimmed.  The success the Right has had in enlisting parts of the Left in rebranding all prostitution as slavery has polluted discourse on this issue and means a lot of women will still be left outside the law.

California Governor Finally Sees Reason on High-Speed Rail. And Then He Doesn't

Via USA Today:

California Gov. Gavin Newsom has announced that he’s abandoning a plan to build a high-speed rail line between Los Angeles and San Francisco.

The project's cost has ballooned to $77 billion.

“Let’s be real,” Newsom said in his first State of the State address on Tuesday. “The current project, as planned, would cost too much and respectfully take too long. There’s been too little oversight and not enough transparency.”

Hurray!  This is long overdue.  I was writing about how dumb an idea this was back in 2008.  I remember it because I was on Fox and Friends in the worst time slot ever to talk about it.  Not only was the interview at like 4AM Arizona time, but the segment immediately before I discussed economics and public policy *yawn* they had 8 cute maltese puppies frolicking on stage.

Everyone, including I would bet California officials but probably excepting elements of the fawning media, knew the cost estimates were a joke.  In 2010 when CA said $30-$40 billion I said it would take at least $75 billion and when CA belatedly adopted that number I doubled it to $150 billion and I think that is still low for what it would have cost.  This was all at a time when you could fly Burbank to Oakland on Southwest for $90.

But because it seems to be a rule that no CA politician can remain sane for more than 5 minutes straight, here are the next lines of the story:

Newsom, though, said he wants to finish construction already underway on a segment of the high-speed train through the Central Valley. The project would connect a 119-mile stretch from Merced to Bakersfield.

“I know that some critics are going to say, ‘Well, that’s a train to nowhere.’ But I think that’s wrong and I think that’s offensive,” Newsom said. “It’s about economic transformation. It’s about unlocking the enormous potential of the Valley.”

This is absolutely absurd.  If you started with a clean sheet and studied what the Central Valley really needed for "economic transformation," I am willing to bet a high-speed rail line from Merced to Bakersfield would not be in the top 100 items, maybe not the top 1000.  Probably first on the list for the Central Valley economy would be to stop applying minimum wage rates based on San Francisco to poorer rural areas of California.  If you wanted to limit yourself to infrastructure projects, the Central Valley would probably beg for water infrastructure projects, not a silly overpriced train.

Where's Coyote?

I know I have not been blogging serious topics much of late.  In part this is due to just being busy -- holidays, end of year accounting closeouts for the business, and some geeky projects (a few raspberry pi things I will share soon).  In part this is due to the fact that whenever I engage with social media too long I become a worse person and back away again.   In part this is because my daughter said I needed to lighten up on my blog for a while.  And in part this is to my not wanting my obsessive fascination with the trainwreck that is Tesla to dominate my blogging (though there are a couple of updates coming).

As I close in on my 15th(!) year on this blog, this sort of ebb and flow happens from time to time.  I will be back in force soon.

The Proposed Emergency Decree to Build The Wall is An Awful Precedent

Dear Republicans:

The last thing we need now is even more expansion of executive power.  I remember when, gosh it was like only two or three years ago, you Republicans were (rightly) bemoaning Obama's executive actions as unconstitutional expansions of Presidential power.  You argued, again rightly, that just because Congress did not pass the President's cherished agenda items, that did not give the President some sort of right to do an end-around Congress.

But now, I hear many Republicans making exactly the same arguments on the wall that Obama made during his Presidency, with the added distasteful element of a proposed declaration of emergency to allow the army to go build the wall.

I personally think the wall is stupid, will solve nothing, and will be a moral blight on this country -- its ugly to think of use having our very own Berlin Wall.  But forget all that, for now I am not arguing against the wall, but against the proposed process.

I can pretty much guarantee you that if Trump uses this emergency declaration dodge (and maybe even if he doesn't now that Republicans have helped to normalize the idea), the next Democratic President is going to use the same dodge.  I can just see President Warren declaring a state of emergency to have the army build windmills or worse.  In fact, if Trump declares a state of emergency on a hot-button Republican issue, Democratics partisans are going to DEMAND that their President do the same, if for no reason other than tribal tit for tat.

Postscript:  Now that I am handing out political advice to Republicans, what is the deal with your Ocasio-Cortez fixation?  I hear many folks on both sides of the aisle who attribute some of Trump's electoral success to the media fixation on him that kept him in the news constantly.  I am reminded of the old Pepsi challenge, where Pepsi showed people choosing their product over Coke.  But the thing was, while Pepsi's sales increased, so did Coke's because the commercials kept Coke's name prominent in people's minds and established it as the product to which everyone else compares themselves.  Do you really want to do the same thing with Ocasio-Cortez?

Silicon Valley Begged for Government Intervention in Their Industry, and They May Soon Get It Good and Hard

Readers of this blog know that I have always been skeptical of the value of net neutrality rules.   I see the Internet just like any other vertical value chain with multiple players, which we might oversimplify as content providers who hand off to bandwidth providers to get in front of the customer.  Nearly every industry has these vertical value chains with multiple players -- think Coke and Pepsi fighting for floor space and margins through Wal-Mart.  What is amazing to me is how the large content streamers, particularly Google, Netflix and Facebook, have somehow convinced the public that the whole future of the Internet depends on the government hamstringing the bandwidth providers in their relationship with the content producers.

When Youtube wants to stream at 4K rather than 1080p, the majority of the instractructure hit is on the bandwidth provides, and Google/Youtube wants that bandwidth to be there but does not want to have to pay for any of it.  That is why these companies are the main supporters of net neutrality, but they are smart enough not to say this, but to instead flog some mythology that bandwidth providers might block or discriminate against certain providers.  Even supporters of this meme are forced to agree that it is wholly hypothetical, that no one can really point to any good examples of it happening (I have always suspected that general public hatred for Comcast in particular has created more support for net neutrality than anything else).

This argument for net neutrality is even odder as clear discrimination and deplatforming is happening on the Internet apparently everywhere BUT with the bandwidth providers.  Or as I wrote on Twitter:


This is my usual long-winded lead in for a very good article I read a while back and forgot to link.  It's from Drew Clark at Cato and is titled "Seeking Intervention Backfired on Silicon Valley".  I recommend the whole thing but here is a small piece:

The companies that drove the engine of America’s information technology machine essentially argued as follows: We provide the good stuff that you — the American consumer — want. You go to Google to get your searches answered. You want Facebook to keep up on posts from friends, families, and trusted content providers. Access to the content in the Apple iTunes store or to Amazon Prime streaming video subscriptions doesn’t need to be regulated because we tech giants compete vigorously among ourselves. But Washington does need to step in and regulate the telecom market because of a lack of competition among ISPs. And the FCC agreed in 2015 with what was officially dubbed the Open Internet Order. ...

Major content companies like Google, Facebook, and Netflix feared that ISPs would seek to throttle their services as a way of extracting payment for prioritization. Particularly for data-intensive video- streaming services like Netflix and Google’s YouTube, this concern had a certain economic logic, even as it remained hypothetical. Having long courted Silicon Valley as a key constituency and facing a highly visible public demand with enthusiastic grassroots support on the left, Obama complied....

Silicon Valley’s regulations-for-thee-but-not-for-me attitude has come back to bite them. They want the strictest form of regulation for telecommunications providers but no scrutiny of themselves, and now the tables have been turned.

Pai has not hesitated to point out the hypocrisy as he has moved to undo the net neutrality rules. In a November 29 speech in the lead-up to his net neutrality rollback, he said that the tech giants are “part of the problem” of viewpoint discrimination. “Indeed, despite all the talk about the fear that broadband providers could decide what internet content consumers can see, recent experience shows that so-called edge providers are in fact deciding what content they see. These providers routinely block or discriminate against content they don’t like.”

Knowledge and Certainty "Laundering" Via Computer Models

Today I want to come back to a topic I have not covered for a while, which is what I call knowledge or certainty "laundering" via computer models.  I will explain this term more in a moment, but I use it to describe the use of computer models (by scientists and economists but with strong media/government/activist collusion) to magically convert an imperfect understanding of a complex process into apparently certain results and predictions to two-decimal place precision.

The initial impetus to revisit this topic was reading "Chameleons: The Misuse of Theoretical Models in Finance and Economics" by Paul Pfleiderer of Stanford University (which I found referenced in a paper by Anat R. Admati on dangers in the banking system).  I will except this paper in a moment, and though he is talking more generically about theoretical models (whether embodied in code or not), I think a lot of his paper is relevant to this topic.

Before we dig into it, let's look at the other impetus for this post, which was my seeing this chart in the "Southwest" section of the recent Fourth National Climate Assessment.

The labelling of the chart actually understates the heroic feat the authors achieved as their conclusion actually models wildfire with and without anthropogenic climate change.  This means that first they had to model the counterfactual of what the climate could have been like without the 30ppm (0.003% of the atmosphere) CO2 added in the period.  Then, they had to model the counterfactual of what the wildfire burn acreage would have been under the counter-factual climate vs. what actually occurred.   All while teasing out the effects of climate change from other variables like forest management and fuel reduction policy (which --oddly enough -- despite substantial changes in this period apparently goes entirely unmentioned in the underlying study and does not seem to be a variable in their model).  And they do all this for every year back to the mid-1980's.

Don't get me wrong -- this is a perfectly reasonable analysis to attempt, even if I believe they did it poorly and am skeptical you can get good results in any case (and even given the obvious fact that the conclusions are absolutely not testable in any way).  But any critique I might have is a normal part of the scientific process.  I critique, then if folks think it is valid they redo the analysis fixing the critique, and the findings might hold or be changed.  The problem comes further down the food chain:

  1. When the media, and in this case the US government, uses this analysis completely uncritically and without any error bars to pretend at certainty -- in this case that half of the recent wildfire damage is due to climate change -- that simply does not exist
  2. And when anything that supports the general theory that man-made climate change is catastrophic immediately becomes -- without challenge or further analysis -- part of the "consensus" and therefore immune from criticism.

I like to compare climate models to economic models, because economics is the one other major field of study where I think the underlying system is as nearly complex as the climate.  Readers know I accept that man is causing some warming via CO2 -- I am a lukewarmer who has proposed a carbon tax.  However, as an engineer whose undergraduate work focused on the dynamics of complex systems, I go nuts with anti-scientific statements like "Co2 is the control knob for the Earth's climate."  It is simply absurd to say that an entire complex system like climate is controlled by a single variable, particularly one that is 0.04% of the atmosphere.  If a sugar farmer looking for a higher tariff told you that sugar production was the single control knob for the US climate, you would call BS on them in a second (sugar being just 0.015% by dollars of a tremendously complex economy).

But in fact, economists play at these same sorts of counterfactuals.  I wrote about economic analysis of the effects of the stimulus way back in 2010.  It is very similar to the wildfire analysis above in that it posits a counter-factual and then asserts the difference between the modeled counterfactual and reality is due to one variable.

Last week the Council of Economic Advisors (CEA) released its congressionally commissioned study on the effects of the 2009 stimulus. The panel concluded that the stimulus had created as many as 3.6 million jobs, an odd result given the economy as a whole actually lost something like 1.5 million jobs in the same period. To reach its conclusions, the panel ran a series of complex macroeconomic models to estimate economic growth assuming the stimulus had not been passed. Their results showed employment falling by over 5 million jobs in this hypothetical scenario, an eyebrow-raising result that is impossible to verify with actual observations.

Most of us are familiar with using computer models to predict the future, but this use of complex models to write history is relatively new. Researchers have begun to use computer models for this sort of retrospective analysis because they struggle to isolate the effect of a single variable (like stimulus spending) in their observational data. Unless we are willing to, say, give stimulus to South Dakota but not North Dakota, controlled experiments are difficult in the macro-economic realm.

But the efficacy of conducting experiments within computer models, rather than with real-world observation, is open to debate. After all, anyone can mine data and tweak coefficients to create a model that accurately depicts history. One is reminded of algorithms based on skirt lengths that correlated with stock market performance, or on Washington Redskins victories that predicted past presidential election results.

But the real test of such models is to accurately predict future events, and the same complex economic models that are being used to demonstrate the supposed potency of the stimulus program perform miserably on this critical test. We only have to remember that the Obama administration originally used these same models barely a year ago to predict that unemployment would remain under 8% with the stimulus, when in reality it peaked over 10%. As it turns out, the experts' hugely imperfect understanding of our complex economy is not improved merely by coding it into a computer model. Garbage in, garbage out.

Thus we get to my concept I call knowledge laundering or certainty laundering.  I described what I mean by this back in the blogging dinosaur days (note this is from 2007 so my thoughts on climate have likely evolved since then).

Remember what I said earlier: The models produce the result that there will be a lot of anthropogenic global warming in the future because they are programmed to reach this result. In the media, the models are used as a sort of scientific money laundering scheme. In money laundering, cash from illegal origins (such as smuggling narcotics) is fed into a business that then repays the money back to the criminal as a salary or consulting fee or some other type of seemingly legitimate transaction. The money he gets
back is exactly the same money, but instead of just appearing out of nowhere, it now has a paper-trail and appears more legitimate. The money has been laundered.

In the same way, assumptions of dubious quality or certainty that presuppose AGW beyond the bounds of anything we have see historically are plugged into the models, and, shazam, the models say that there will be a lot of anthropogenic global warming. These dubious assumptions, which are pulled out of thin air, are laundered by being passed through these complex black boxes we call climate models and suddenly the results are somehow scientific proof of AGW. The quality hasn't changed, but the paper trail looks better, at least in the press. The assumptions begin as guesses of dubious quality and come out laundered at "settled science."

Back in 2011, I highlighted a climate study that virtually admitted to this laundering via model by saying:

These question cannot be answered using observations alone, as the available time series are too short and the data not accurate enough. We therefore used climate model output generated in the ESSENCE project, a collaboration of KNMI and Utrecht University that generated 17 simulations of the climate with the ECHAM5/MPI-OM model to sample the natural variability of the climate system. When compared to the available observations, the model describes the ocean temperature rise and variability well.”

I wrote in response:

[Note the first and last sentences of this paragraph]  First, that there is not sufficiently extensive and accurate observational data to test a hypothesis. BUT, then we will create a model, and this model is validated against this same observational data. Then the model is used to draw all kinds of conclusions about the problem being studied.

This is the clearest, simplest example of certainty laundering I have ever seen. If there is not sufficient data to draw conclusions about how a system operates, then how can there be enough data to validate a computer model which, in code, just embodies a series of hypotheses about how a system operates?

A model is no different than a hypothesis embodied in code. If I have a hypothesis that the average width of neckties in this year’s Armani collection drives stock market prices, creating a computer program that predicts stock market prices falling as ties get thinner does nothing to increase my certainty of this hypothesis (though it may be enough to get me media attention). The model is merely a software implementation of my original hypothesis. In fact, the model likely has to embody even more unproven assumptions than my hypothesis, because in addition to assuming a causal relationship, it also has to be programmed with specific values for this correlation.

This brings me to the paper by Paul Pfleiderer of Stanford University.  I don't want to overstate the congruence between his paper and my thoughts on this, but it is the first work I have seen to discuss this kind of certainty laundering (there may be a ton of literature on this but if so I am not familiar with it).  His abstract begins:

In this essay I discuss how theoretical models in finance and economics are used in ways that make them “chameleons” and how chameleons devalue the intellectual currency and muddy policy debates. A model becomes a chameleon when it is built on assumptions with dubious connections to the real world but nevertheless has conclusions that are uncritically (or not critically enough) applied to understanding our economy.

The paper is long and nuanced but let me try to summarize his thinking:

In this essay I discuss how theoretical models in finance and economics are used in ways that make them “chameleons” and how chameleons devalue the intellectual currency and muddy policy debates. A model becomes a chameleon when it is built on assumptions with dubious connections to the real world but nevertheless has conclusions that are uncritically (or not critically enough) applied to understanding our economy....

My reason for introducing the notion of theoretical cherry picking is to emphasize that since a given result can almost always be supported by a theoretical model, the existence of a theoretical model that leads to a given result in and of itself tells us nothing definitive about the real world. Though this is obvious when stated baldly like this, in practice various claims are often given credence — certainly more than they deserve — simply because there are theoretical models in the literature that “back up” these claims. In other words, the results of theoretical models are given an ontological status they do not deserve. In my view this occurs because models and specifically their assumptions are not always subjected to the critical evaluation necessary to see whether and how they apply to the real world...

As discussed above one can develop theoretical models supporting all kinds of results, but many of these models will be based on dubious assumptions. This means that when we take a bookshelf model off of the bookshelf and consider applying it to the real world, we need to pass it through a filter, asking straightforward questions about the reasonableness of the assumptions and whether the model ignores or fails to capture forces that we know or have good reason to believe are important.

I know we see a lot of this in climate:

A chameleon model asserts that it has implications for policy, but when challenged about the reasonableness of its assumptions and its connection with the real world, it changes its color and retreats to being a simply a theoretical (bookshelf) model that has diplomatic immunity when it comes to questioning its assumptions....

Chameleons arise and are often nurtured by the following dynamic. First a bookshelf model is constructed that involves terms and elements that seem to have some relation to the real world and assumptions that are not so unrealistic that they would be dismissed out of hand. The intention of the author, let’s call him or her “Q,” in developing the model may be to say something about the real world or the goal may simply be to explore the implications of making a certain set of assumptions. Once Q’s model and results become known, references are made to it, with statements such as “Q shows that X.” This should be taken as short-hand way of saying “Q shows that under a certain set of assumptions it follows (deductively) that X,” but some people start taking X as a plausible statement about the real world. If someone skeptical about X challenges the assumptions made by Q, some will say that a model shouldn’t be judged by the realism of its assumptions, since all models have assumptions that are unrealistic. Another rejoinder made by those supporting X as something plausibly applying to the real world might be that the truth or falsity of X is an empirical matter and until the appropriate empirical tests or analyses have been conducted and have rejected X, X must be taken seriously. In other words, X is innocent until proven guilty. Now these statements may not be made in quite the stark manner that I have made them here, but the underlying notion still prevails that because there is a model for X, because questioning the assumptions behind X is not appropriate, and because the testable implications of the model supporting X have not been empirically rejected, we must take X seriously. Q’s model (with X as a result) becomes a chameleon that avoids the real world filters.

Check it out if you are interested.  I seldom trust a computer model I did not build and I NEVER trust a model I did build (because I know the flaws and assumptions and plug variables all too well).

By the way, the mention of plug variables reminds me of one of the most interesting studies I have seen on climate modeling, by Kiel in 2007.  It was so damning that I haven't seen anyone do it since (at least get published doing it).  I wrote about it in 2011 at Forbes:

My skepticism was increased when several skeptics pointed out a problem that should have been obvious. The ten or twelve IPCC climate models all had very different climate sensitivities -- how, if they have different climate sensitivities, do they all nearly exactly model past temperatures? If each embodies a correct model of the climate, and each has a different climate sensitivity, only one (at most) should replicate observed data. But they all do. It is like someone saying she has ten clocks all showing a different time but asserting that all are correct (or worse, as the IPCC does, claiming that the average must be the right time).

The answer to this paradox came in a 2007 study by climate modeler Jeffrey Kiehl. To understand his findings, we need to understand a bit of background on aerosols. Aerosols are man-made pollutants, mainly combustion products, that are thought to have the effect of cooling the Earth's climate.

What Kiehl demonstrated was that these aerosols are likely the answer to my old question about how models with high sensitivities are able to accurately model historic temperatures. When simulating history, scientists add aerosols to their high-sensitivity models in sufficient quantities to cool them to match historic temperatures. Then, since such aerosols are much easier to eliminate as combustion products than is CO2, they assume these aerosols go away in the future, allowing their models to produce enormous amounts of future warming.

Specifically, when he looked at the climate models used by the IPCC, Kiehl found they all used very different assumptions for aerosol cooling and, most significantly, he found that each of these varying assumptions were exactly what was required to combine with that model's unique sensitivity assumptions to reproduce historical temperatures. In my terminology, aerosol cooling was the plug variable.

When I was active doing computer models for markets and economics, we used the term "plug variable."  Now, I think "goal-seeking" is the hip word, but it is all the same phenomenon.

Postscript, An example with the partisans reversed:  It strikes me that in our tribalized political culture my having criticised models by a) climate alarmists and b) the Obama Administration might cause the point to be lost on the more defensive members of the Left side of the political spectrum.  So let's discuss a hypothetical with the parties reversed.  Let's say that a group of economists working for the Trump Administration came out and said that half of the 4% economic growth we were experiencing (or whatever the exact number was) was due to actions taken by the Trump Administration and the Republican Congress.  I can assure you they would have a sophisticated computer model that would spit out this result -- there would be a counterfactual model of "with Hillary" that had 2% growth compared to the actual 4% actual under Trump.

Would you believe this?  After all, its science.  There is a model.  Made by experts ("top men" as they say in Raiders of the Lost Ark).  Do would you buy it?  NO!  I sure would not.  No way.  For the same reasons that we shouldn't uncritically buy into any of the other model results discussed -- they are building counterfactuals of a complex process we do not fully understand and which cannot be tested or verified in any way.  Just because someone has embodied their imperfect understanding, or worse their pre-existing pet answer, into code does not make it science.  But I guarantee you have nodded your head or even quoted the results from models that likely were not a bit better than the imaginary Trump model above.

Coyote Makes Tentative Steps Onto Instagram

I have resisted Instagram for years because a) they only really allow photo uploads from your phone (not your pc) and b) none of my good photos are on my phone.  It is just really difficult to take a photography platform seriously that only really supports the crappiest end of the camera spectrum (i.e. phones).

However, a couple of things have changed.  One, Instagram is now a powerful social media platform and useful to my business given that I am trying to get young people to go to outdoors locations that are photogenic.  And two, I have gotten comfortable with a couple of hacks to be able to use instagram from my pc (more in a second).

So if you are into Instagram, you can follow me now.  My business instagram for our campgrounds and parks is @camprrm.   My personal instagram mainly to be filled with travel photography is @coyoteblog.   Actually the other reason I have come around on Instagram is that I wanted to follow my daughter Amelia who is a student artist, and instagram is THE way to advertise one's portfolio.  She is at @meliameyer (see what she did there, millenials are much more clever with integrating symbols into an extended alphabet).

The two hacks I use are:  1)  Convert the instagram account to a business account and then use the free version of hootsuite to post to it.  Even works with scheduled posts.  This works well for one account but is hard to make work for two.  2) Open and log into instagram via chrome.  Right click on the white space of the web page somewhere and choose inspect.  I think there is also a keyboard shortcut to do this, maybe cntl-shift-i.  Once the inspect window pops up, click on the little icon in the upper left that looks like a cell phone.  Poof, your browser is in cell phone sim mode and instagram should suddenly give you the + button (refresh page if it doesn't) that will allow you to post pictures right from your computer hard drive.

Incredible Evidence of P Hacking in Research Studies, Demonstrated with One Chart

Hat tip to Kevin Drum for finding this:

I will let him explain the chart, it is worth understanding:

The authors collected every significant clinical study of drugs and dietary supplements for the treatment or prevention of cardiovascular disease between 1974 and 2012. Then they displayed them on a scatterplot.

Prior to 2000, researchers could do just about anything they wanted. All they had to do was run the study, collect the data, and then look to see if they could pull something positive out of it. And they did! Out of 22 studies, 13 showed significant benefits. That’s 59 percent of all studies. Pretty good!

Then, in 2000, the rules changed. Researchers were required before the study started to say what they were looking for. They couldn’t just mine the data afterward looking for anything that happened to be positive. They had to report the results they said they were going to report.

And guess what? Out of 21 studies, only two showed significant benefits. That’s 10 percent of all studies. Ugh. And one of the studies even demonstrated harm, something that had never happened before 2000

Reports for all-cause mortality were similar. Before 2000, 5 out of 24 trials showed reductions in mortality. After 2000, not a single study showed a reduction in mortality.

Note that these sensible rules for conducting a study do NOT exist for pretty much any study in any field that you see in the media.  Peer review generally does not address it.  Links to the full study in Drum's article.

Should Republicans Thank Michael Avenatti For Kavenaugh's Confirmation?

Ten days ago, I told my wife that if Brett Kavanaugh is confirmed, he can probably thank Michael Avenatti and his client.  Julie Swetnick's accusations of mass gang rapes held week after week after week were so batsh*t crazy -- and completely unconfirmed by any witnesses when the behavior she described was so public and affected so many people that confirmation should have been easy -- that the Democrats' argument that women never lie and always should be believed was shown to be false to all reasonable observers.  It became too easy for Republicans to convince themselves that all of the women accusing Kavanaugh, not just Swetnick and the other last-minute copycats, were a put-up job by Democrats (a conclusion that was more easy to reach given DiFi's hamfisted attempt to be "tricky" and withhold the Ford accusations to the last minute).  In a well-reasoned world, the veracity of the Swetnick accusations should have had no bearing on the evaluation of Ford's believably, but in the real world of politics it had a huge effect.

I honestly believe that an earlier reveal of the Ford accusations early in the process, without all the nutty copycat allegations, could easily have resulted in Kavanaugh being withdrawn. First, it would have allowed Republicans and Kavanaugh himself to escape early in the process before so many chips were on the table.  Further, if we take Collins's speech at face value, her yes vote really resulted from the Swetnick accusations and I think she might easily have voted the other way with a different process.

A lot of people have come around to this point of view.  One is Robby Soave of Reason:

Democrats, the left, and various other anti-Kavanaugh persons can thank attorney Michael Avenatti for this outcome, at least in part.

The spotlight-stealing lawyer, who also represented Stormy Daniels, is responsible for drawing the media's attention to Julie Swetnick, an alleged victim of Kavanaugh who told an inconsistent and unpersuasive story. Swetnick's wild accusation provided cover for fence-sitting senators to overlook the more plausible allegation leveled by psychology professor Christine Blasey Ford, and to declare that Kavanaugh was being subjected to false smears.

Update:  Michael Avenatti has responded to such criticism on Twitter by saying, essentially, "what was I supposed to do, just ignore the needs of my client?"  No.  What he should have done is honestly thought about the needs of his client rather than just his need for self-promotion ahead of the Democratic primaries.  It is very much a part of a lawyer's job to confirm his client's story and evaluate whether he thinks they have a good case, and then to counsel them on whether or not it makes sense for them given the cost in dollars and public harassment to try to bring the case.  I have had a batsh*t crazy woman who was an ex-employee (who I have never met face to face) decide that I was doing all sorts of crazy things like running an Al Quaeda training camp, organizing a narcotics ring, and stalking her across every Indian casino in the state.  The poor woman has mental health issues and imagines all kinds of weird stuff, and I can be sympathetic now that she is no longer actively threatening me and I don't have to maintain protective orders against her.  At the time she took her crazed stories to any number of lawyers trying to mount a case against me on all kinds of odd bases, and you know what - no lawyer took the case, because pursuing this sort of madness in the legal system would not have done anyone, especially this woman, any good at all.

Never, Ever Trust A Science Story in Major Media like NBC

Most journalists become journalism majors because they had vowed after high school never, ever to take a math or science class again.  At Princeton we had distribution requirements and you should have seen the squealing from English and History majors at having to take one science course (I don't remember ever hearing the reverse from engineering majors).

It should not surprise you, then, that most media is awful at science journalism.  I held off making a comment on this for 3 days figuring it was a typo and they would quickly fix it, but apparently not.  This fits in well with my thesis that the art of sanity-checking numbers has been lost (I added the bold):

The space elevator is the Holy Grail of space exploration,” says Michio Kaku, a professor of physics at City College of New York and a noted futurist. “Imagine pushing the ‘up’ button of an elevator and taking a ride into the heavens. It could open up space to the average person.”

Kaku isn’t exaggerating. A space elevator would be the single largest engineering project ever undertaken and could cost close to $10 billion to build. But it could reduce the cost of putting things into orbit from roughly $3,500 per pound today to as little as $25 per pound, says Peter Swan, president of International Space Elevator Consortium (ISEC), based in Santa Ana, California.

LOL.  The planning for such a structure would cost more than $10 billion.  There is no way that a space elevator can be built for just 1/10 the price of a high speed rail line from LA to San Francisco.  Even at $10 trillion dollars, or 3 orders of magnitude more, I would nod my head and think that was a pretty inexpensive price.

The One Thing I am Sure About In the Whole Kavanaugh Brouhaha -- That My Policy of Not Meeting With Young Women Alone Is Absolutely Justified

18 months ago, I got a lot of cr*p for this post, including from my wife:

I never meet with young women one-on-one any more. If I am interviewing a young woman for college, we meet in the Starbucks rather than my office. I try to meet with sales people via the web rather than face-to-face, but if a young female sales person does show up at my door and I really must meet with them, we do it downstairs in the lobby and not in my office.

I do not know if Kavanaugh is guilty or innocent at this point of a range of alleged actions that range from boorish behavior to attempted sexual assault. Like most folks I await their testimony tomorrow, but perhaps unlike most folks I have a lot of experience trying to adjudicate he-said-she-said conflicts (in the workplace and with customers) and I am reconciled to the fact that we may never be certain of the truth.

What I do know is that having many prominent people in the media and in the highest levels of government claim that a woman's accusation, without any other due process, is enough to convict a man and destroy his career and reputation just proves to me that my policy is absolutely justified.  Because even if Kavanaugh's accusers are absolutely correct and honest, the next one's may not be, especially if we establish a rewards system for public accusations of this sort.

My wife tells me I am being incredibly unfair -- how can young women ever advance and get mentored if every male business executive (and males still dominate the c-suite) takes this attitude?  Well, let me give an analogy.  Let's assume that in reaction to years of abuse, young female actresses made a pact or formed a union. In doing so they agree to never meet with a male director or producer alone.  Many directors and producers could reasonably complain that they weren't threats, and this action unfairly punishes them by making their jobs harder.  The women would reasonably retort, "perhaps, but as long as the rules are such that if we get assaulted in that room then we have absolutely no recourse for justice -- under these rules we aren't going in to the room.  Sure, it may only be a small percentage are predators, but we can't know who is who until after the damage is done."

Would anyone think this was unfair?  Perhaps they might be accused of overreacting -- and I am willing to accept that maybe I am over-reacting as well.  But I worked 3 years in a refinery, wearing a hard hat and eye protection every minute of that time, and I don't remember anything ever hitting my head or my glasses.  But that does not make these things irrational precautions.

Extrapolating Trends from A Single Data Point: The Once In A Lifetime Event

Most of you know I agree there is man-made global warming but am skeptical the extent will be anywhere near most forecasts you see in the media.  For some reason, this earns me the title of "denier."  However, I find that the climate discussion has become boring in the extreme, and I have mostly moved on from it.  But I am still interested in analytical abuses in the media, and long-time readers will know that my favorite is the positing of a trend using but a single data point.  My example today happens to be from climate.

It starts with this tweet:

Obviously he is reacting to the recent hurricane in North Carolina, which turns out to be pretty run of the mill but the media has portrayed as some sort of armageddon.  I could have pulled roughly similar quotes from all kinds of sources.  Several networks did long pieces over the weekend claiming an upward trend in hurricanes without any trend data, but merely from the fact that one made landfall recently.  But anyone who claims be defending science should be held, I think, to a higher standard in making scientific claims.

As I asked the March for Science tweeter:  If, say, there is a trend towards more or stronger hurricanes, why does no one ever show a trend chart? They just declare the trend from one data point, like a single hurricane landfall. Every long-term hurricane & cyclonic energy trend chart I have seen is flat to down.  (This is not primarily a climate post but I will post some hurricane trend charts at the end).

There is certainly an upwards trend in the media labelling storms as "once in a lifetime" but it is doubtful that there is actually an underlying trend in storm severity. Even the slightly more meaningful term "100-year _____" is abused.

Consider a 100-year flood in North Carolina, almost certainly a once in a lifetime event for someone in that state unless they live really long.  Since North Carolina is .027% of the world's landmass, there will be, on average, 37 hundred-year floods over land areas the size of North Carolina every single year.   That's 37 once-in-a-lifetime North-Carolina-sized floods somewhere in the world every single year.  Heck, there should be 3-4 thousand-year floods of North Carolina size somewhere in the world every year -- that's three or four once in a millenium floods!  And this same math applies to 100-year heat waves, droughts, snow storms -- you name it.

We can learn a couple of things from this.  First, living through "once in a lifetime" storms every year, somewhere in the world, is not abnormal -- it is expected.  Second, one can see how choices in media coverage could drive an apparent trend.  If the media covered maybe 3 or 4 of these 37 floods when I was young, but covers every one today, it will appear that there is a trend since I hear so much more about them.  But in fact, nothing will have changed except the media.  I will remind you what I wrote on this topic waaaay back in 2012.

Let's take a step back to 2001 and the "Summer of the Shark." The media hysteria began in early July, when a young boy was bitten by a shark on a beach in Florida. Subsequent attacks received breathless media coverage, up to and including near-nightly footage from TV helicopters of swimming sharks. Until the 9/11 attacks, sharks were the third biggest story of the year as measured by the time dedicated to it on the three major broadcast networks' news shows.

Through this coverage, Americans were left with a strong impression that something unusual was happening -- that an unprecedented number of shark attacks were occurring in that year, and the media dedicated endless coverage to speculation by various "experts" as to the cause of this sharp increase in attacks.

Except there was one problem -- there was no sharp increase in attacks.  In the year 2001, five people died in 76 shark attacks.  However, just a year earlier, 12 people had died in 85 attacks.  The data showed that 2001 actually was  a down year for shark attacks.

Once you start looking for this type of thing, the extrapolation of a trend from at most one data point, you will see it everywhere.

For those still hanging around to the end, here are a couple of actual trend charts on hurricanes (the adjusted line attempts to correct for the fact that earlier eras with no satellites or radar tended to miss some hurricanes) (source at NOAA):

Below are two charts that look beyond just the Atlantic at global cyclones, both from this source.  The first is frequency:

The second looks at accumulated cyclonic energy, which is a sort of time integral of the energy in all active cyclonic storms around the world

Later in the tweetstorm, the same tweeter mentioned as a fact, again without data, "Climate change is increasing drought frequency, impacting everything from agriculture to health. Some studies suggest the consequences of droughts include increased violence and war."  There has been no upward trend in US droughts (negative is more drought-y.

Finally, in the spirit of full disclosure, of all the zillions of things (not directly related to temperature) in weather effects that are blamed on global warming, this is the only one I have found that shows an upward trend recently and could logically be attributed to warming.  Whether this is related to warming or independent or a data measurement issue is (if folks were honest) not well understood

I Agree With the NY Post: It’s shameful what US Open did to Naomi Osaka

Via the New York Post".  This is just disgusting:

Naomi Osaka, 20 years old, just became the first player from Japan to win a Grand Slam.

Yet rather than cheer Osaka, the crowd, the commentators and US Open officials all expressed shock and grief that Serena Williams lost.

Osaka spent what should have been her victory lap in tears. It had been her childhood dream to make it to the US Open and possibly play against Williams, her idol, in the final.

It’s hard to recall a more unsportsmanlike event.

Here was a young girl who pulled off one of the greatest upsets ever, who fought for every point she earned, ashamed.

At the awards ceremony, Osaka covered her face with her black visor and cried. The crowd booed her. Katrina Adams, chairman and president of the USTA, opened the awards ceremony by denigrating the winner and lionizing Williams — whose ego, if anything, needs piercing.

“Perhaps it’s not the finish we were looking for today,” Adams said, “but Serena, you are a champion of all champions.” Addressing the crowd, Adams added, “This mama is a role model and respected by all.”

Incredibly, much of the media and powerful celebrities have rallied around Ms. Williams to claim that she is actually the victim. She claims she was a victim of sexism in the match, but she was playing (and getting beat) by another woman.  She claims she was a victim of racism in the match because she is a woman of color, but she was not playing a white woman.  She claims to be a victim of the tennis establishment when in fact she is the most powerful person in women's tennis (maybe ever) and wields far more wealth and power than anyone on that court that day -- a power and privilege demonstrated by the fact that all the other powerful and privileged rallied to her side immediately after the match.

A New Series: Trans-partisan Policy Plans

For a while I have been thinking about a jumble of interrelated issues:  problems with civil discourse, particularly the tribalization of politics and social media;  a personal aspiration to be better at Caplan's ideological Turing test on a number of issues; and a skepticism that pleas for civility are really going to achieve more than just becoming another form of virtue signalling.

So what I have decided to start a new series with a number of policy proposals that are as broad in their appeal as I can make them.  And in saying this I am not just going to present libertarian plans and call them non-partisan --  I bring libertarian-ish leanings to these proposals, but I will also diverge from the hard core libertarian position on each.  I use trans-pipartisan" as a shortcut term to say they are meant to simultaneously play on all of Arnold Kling's three axes of politics.

As a warning, I am not a policy expert and a large reason I present these is to develop and clarify my own thinking.  Some will be well-developed -- the  climate plan is in its 3rd or 4th iteration -- and some like the education plan is just a jumble of thoughts in my brain right now.

Media Extrapolating a Trend From A Single Data Point: 2018 Heat Wave Edition

This article in something called Inside Climate News seems to be typical of many I have seen this year:  Because we have had much attention in the media on heat waves this year, there must be an upward trend in heat waves and that is a warning signal that man-made global warming is destroying the planet.  Typical of these articles are a couple of features

  1. Declaration of a trend without any actual trend data, but just a single data point of events this year
  2. Unstated implication that there must be a trend because the author can't remember another year when heat wave stories were so prevalent in the media
  3. Unproven link to man-made global warming, because I guess both involve warmth.

I have no idea if well-publicized heat waves this year are a harbinger of an accelerating global warming trend.  But since we are discussing "trends" it struck me as useful to actually liven up the discussion with some actual trend data, ie data for more than one summer.  There is a real danger to extrapolating trends from volume of media coverage, as I discussed here.  If you don't want to click through, I have a funny story in the postscript.

First, our most reliable temperature trend data does not really show a spike in temperatures this summer.  Remember, a heat wave that covered the entire US would only affect 6% of the world's landmass and <2% of the world's total area (source).  You can easily see the trend upwards several tenths of a degree over the last 40 years, but it is impossible to see much unique about the last 3 months of summer.

Second, there really is no substantial upward trend in US heat wave index (from right off the EPA's web site, as are all of the following charts.  Look at the source for yourself to make sure I am not playing games).  Note that all of the following charts are through 2016 and do NOT include the recent summer but are pretty meaningful none-the-less.

Third, in most of the country, there is actually a downward trend rather than upward trend in extreme heat days.

Pretty much everyone agrees, skeptics included, that the world and the US has warmed.  So why are extreme heat days down in many locations, and certain down from the 1930's?  This defies our intuition.  The explanation is in part due to a feature of global warming that is seldom explained well by the media, that much of the warming we see and as predicted in climate models is in the night.  We are seeing some increase in hot daytime highs, but really not at an unprecedented level over the last century.  BUT, we see MUCH more of a trend in hot daily lows, which basically means warming evenings.

I spoke at Amherst College a while back and here was their temperature trends, broken up between daily highs and nighttime lows.  All of Amherst's temperature trend since 1950 has not been in increased daytime highs but higher nighttime lows.  This is a pattern you see repeated over and over at nearly every temperature station.

This is why I consider media reports of heat waves, at least of the scope we have seen to date, absolutely irrelevant to "proving" the world is warming.

Postscript:  Here is the story everyone should keep in mind when extrapolating from media coverage volume to underlying trends:

let's take a step back to 2001 and the "Summer of the Shark." The media hysteria began in early July, when a young boy was bitten by a shark on a beach in Florida. Subsequent attacks received breathless media coverage, up to and including near-nightly footage from TV helicopters of swimming sharks. Until the 9/11 attacks, sharks were the third biggest story of the year as measured by the time dedicated to it on the three major broadcast networks' news shows.

Through this coverage, Americans were left with a strong impression that something unusual was happening -- that an unprecedented number of shark attacks were occurring in that year, and the media dedicated endless coverage to speculation by various "experts" as to the cause of this sharp increase in attacks.

Except there was one problem -- there was no sharp increase in attacks. In the year 2001, five people died in 76 shark attacks. However, just a year earlier, 12 people had died in 85 attacks. The data showed that 2001 actually was a down year for shark attacks.

Update:  I am not really an active participant in the climate scene any more, particularly when positions hardened and it was impossible to really have an interesting discussion any more.  The implicit plea in this post goes beyond climate -- if you are claiming a trend, show me the trend data.  I can be convinced.  There is clear trend data that temperatures are increasing so I believe there is an upward trend in temperatures.  Show me the same for droughts or heat waves or hurricanes and I will believe the trend about those as well, but so often the actual data never matches the arm-waving in these media sources.

Fixing Tesla

I promised I would not post any more Tesla for a while, and to some extent I am keeping that promise -- no updates here on the SEC investigation or the 420 tweet.  But since I have been critical of Tesla in the past, I thought I would acknowledge that there are good things in Tesla that could and should be saved.  The problem is that Tesla is saddled with a bunch of problems that are NOT going to be solved by going private.  In fact, going private could only make things worse -- given that Tesla already has too much debt and its debt is rated barely above junk bonds, piling on more debt just to save Elon Musk from short sellers is not a good plan.  Here is what I would suggest:

  1. Find the right role for Elon Musk.  Musk HAS to be part of the company, without him its stock would go to about zero tomorrow.  But right now he is CEO, effective head of media relations, factory manager, and chief engineer.  Get him out of day to day management (and off Twitter) and hire real operating people who know what they are doing
  2. Get rid of the dealerships.  Tesla tried to do something different, which is own all the dealerships rather than franchise them out.  This is fine if one has some sort of vision for doing sales and service differently, but Tesla really doesn't.  It does the same things as other car dealerships but just slower since it has not been able to build out capacity fast enough.  And this decision has cost them a tons of growth capital they desperately need, because they have had to build out dealerships most car companies get for "free" because the capital for the dealerships is provided by third-party entrepreneurs.  Also, the third-party entrepreneurs bring other things to the table, for example many of them tend to have experience in the car sales business and a high profile in their local markets with government and media.
  3. If possible, find a partner for the charging network.  All traditional car companies get their fueling networks for free because the network is already built out by the oil companies.  Tesla is building its own, and again this is sucking up a lot of capital.  It is also dangerous, because Tesla has chosen to pursue a charging standard that may not become the industry standard (this is already happening in Europe) and Tesla risks being stuck with the betamax network.  Tesla should see if it can shift this to a third party, perhaps even in joint venture with other EV companies.
  4. Do an equity raise.  To my mind, it is absolute madness Tesla did not do this earlier in the year.   Their stock was trading at $350 and at a $50+ billion valuation at the same time they were burning cash cash at a rate of $3 billion or so a year.  Musk says he can skate through without more capital but he has said this before and it was not true.  Given the enthusiasm for his stock, there is just no reason to run cash poor when there are millions of Tesla fanboys just waiting to throw money at the company.  Even a $5 billion raise would have been only 10% dilution.  Musk says he wants to burn the shorts but ask any Tesla short out there what they would most fear, and I think they would all say an equity capital raise.  $3-5 billion would get Tesla at least through 2019 no matter how bad the cash burn remained and give the company space to solve its operational problems.
  5. Get someone who knows how to build cars building the cars.  I have written about this before -- it is always hard when you are trying to be a disruptor of an industry to decide what to disrupt and what industry knowledge to incorporate.  In retrospect, Musk's plan to ignore how cars are built and do it a different way is not working.  Not only are the cost issues and throughput issues, but there are growing reports of real quality issues in model 3's.  This has to be fixed ASAP.
  6. Bring some sanity to the long-term product roadmap.  This may be a bit cynical, but Tesla seems to introduce a new product every time Musk needs to divert the public's attention, his equivalent of yelling "Squirrel!"  There is the semi, a pickup truck, a roadster and probably something else I have forgotten about.  Even the model 3 lineup is confusing, with no one really knowing what Tesla is going to focus on, and whether the promised $35,000 model 3 will ever actually be built.  This confusion doesn't work well with investors at all, but Tesla has been able to make it work with customers, increasing the buzz around the company because no one ever seems to know what it will do next.  But once real competitors start coming out from GM, Volvo, Jaguar, BMW and others, this is not going to work.  Customers that are currently captive to Tesla will have other options.    Let's start with the semi.  The demo was a beautiful product, but frankly there is no way Tesla is going to have the time or the money to actually produce this thing.   Someone like Volvo is going to beat them to the punch.   They need to find a JV partner who can actually build it.

Update:  If I had a #7, it would be: Invent a time machine and go back and undo the corrupt SolarCity buyout, in which Tesla bailed out Musk's friends and family and promptly proceeded to essentially shut down the company.  Tesla shareholders got nothing from the purchase except a lot of debt.

 

Here is a Fun Challenge: Be Skeptical of Statistics Even When They Support Your Point of View

I sometimes wonder if the media and the punditocracy have any ability any more to reality-check statistics.  Two examples:

One

Trump supporters were running around in circles patting themselves on the back with this story:

African American business owners are on the rise. According to the Minority 2018 Small Business Trends survey, the number of black-owned small businesses in the U.S. increased by a staggering 400% in a year-over-year time period from 2017 to 2018.

I call bullsh*t on this.  There is no WAY that the number of black-owned businesses increase by a factor of 5** in just one year.  There are millions of black-owned small businesses in this country and there is no way this quintupled** in a year.   It does not pass any kind of smell test.   It is clearly some sort of measurement error, either a small sample size for a survey or a change in data source and definitions from one year to another.  I could go investigate the study and try to figure out the cause but I do not even need to bother because economic and demographic data simply do not change at this pace in one year.

Two

The other example I have is this absurd figure:

A recent survey conducted by OVW and the Bureau of Justice Statistics found that an average of one in four undergraduate females experience sexual assault by the time they finish college.

Here is the deal with this stat:  no one actually really believes it.  Why do I say this with confidence?  Because parents still send their daughters to college -- in fact they fight and scrap and invest huge amounts of time and money to send their daughter to college.  If they really believed their little darling had a 1 in 4 chance of being sexually assaulted, they would never do so.

Here is a point of comparison:  The Japanese brutal occupation of Nanjing, China is commonly known as the "Rape of Nanjing."  It is called this in part because so many local women were raped.  The numbers are fought over by historians, but the best estimate is that 20,000 of the approximately 100,000 women who were in Nanjing at the time were raped by Japanese soldiers, or about one in five.  This means that if the one in four number is correct, then colleges are more dangerous for women than being in Nanjing during the Japanese occupation.  Now, I would venture to guess that if I tried to stuff you daughter into a time machine and send her back to Nanjing on December 13, 1937 you would probably fight me to the death to prevent it.  But parents don't act anything like this vis a vis going to college, ergo no one believes this figure.  So why does everyone keep using it like it is accurate?

** I had put quadrupled but my son just called and reminded me that a 400% increase means quintupled.  Thanks, Nic.  Though I will say there is a good chance the source incorrectly used 400% to mean quadrupled, so I can't rule that out either.

CNN, Buzzfeed, NYT, WaPo, AP, NBC, And Politico Attempting to Doxx Manafort Jurors

Just one day after their coordinated virtue signaling about their important role in maintaining a civil society**, a coalition of media companies have filed a motion (pdf) seeking the names and addresses of the jurors in the Manafort trial.  I am a huge supporter of sunlight and disclosure in  government, and perhaps there is a precedent for this, but it seems like a terrible idea.  I have served on two criminal juries in my lifetime and I can guarantee you I would have resisted participation had I known that my name and home address would be released to the public in association with the trial verdict.

CNN in particular has some history in misusing doxxing.  A year or so ago they threatened a Reddit user with doxxing if he didn't stop posting a meme critical of CNN.  Given that probably 95% of the employees of this media coalition probably want to see Manafort convicted, there is real reason for concern how this information might be used.

In FOIA rules, the decisions to release a particular piece of information to one petitioner is a decision to release it to everyone,  I am not sure if similar rules would apply here.  Kind of hoping that Ken White at Popehat chimes in on this.

 

** A conclusion I am sympathetic to, though I think the media undercuts their argument a bit by acting as thin-skinned and as childish at times as President Trump does.

Update:  Judge denies motion.  Good.

My Guesses About $TSLA, and Why @TSLA Shareholder May Be Presented with a Bad Deal

@Elonmusk is facing real blowback for his management buyout by tweet the other day, in particular for two words:  "funding secured."  Many, including myself, doubt he really had tens of billions of dollars of funding secured at the time, particularly since all bankers and likely sources of funding as well as most large Tesla shareholders had never heard of any such transaction when contacted by the media.  The SEC is now looking into this and other Musk corporate communication practices.  If he lied in the tweet, perhaps to get revenge on the short-sellers he hates with an irrational passion, he could be in deep, deep legal poop, up to and including jail.

Let's play a game.  Let's assume he did NOT have funding secured at the time he tweeted this, and now is running scared.  What can he do?  One ace he has is that the board is in his pocket and (I hate to be so cynical about this) will likely lie their asses off to cover Musk.  We already saw the dubious letter the other day, from "members of the board" rather than officially from the board, attempting to provide cover for Musk's tweets.  This is not just a crony thing -- it is entirely rational for the company to defend Musk.  He is, in my opinion, a terrible executive but he is the avatar that drives the fan boys and the stock price.  The day that Musk leaves is the day that the company can really get its operational house in order but it is also the day the stock trades under $75.

So what can Musk do?  Well, the first defense might be to release a statement like "when I said funding secured, I was referring to recent conversations with ______ [fill in blank, maybe with Saudis or the Chinese, call them X] and they told me that if we ever were looking for funds they would have my back."  This is probably the best he could do, and Tesla would try to chalk it up to naivete of Mr. Musk to accept barroom conversation as a firm commitment.  Naivite, but not fraud.   I don't have any experience with the Feds on this kind of thing but my guess is that the SEC would expect that the CEO of a $50 billion public company should know the rules and legally wasn't allowed to be naive, but who knows, the defense worked for Hillary Clinton with her email servers.

But this defense is MUCH MUCH better if, in the next day or so, Tesla can announce a deal with X on paper with signatures.  Then Musk can use the same defense as above but it has much more weight because he can say, see, they promised funding and I believed them when they said they had my back and here they have delivered.

The problem with this is it would be really a deal being crafted for tens of billions of dollars on a very short timeframe and with limited negotiating leverage (X will know that Musk NEEDS this deal).  As a result, the deal is not likely to be a very good one.  X will demand all sorts of extraordinary provisions, perhaps, for example, a first lien on all Tesla IP and a high breakup fee.  I picture this more like the negotiation for bankruptcy financing, and in fact the IP lien was part of the financing deal Theranos made when it was going down the drain.  But put yourself in Musk's shoes -- jail or bad deal?

And likely his conscience would be clear because this deal would be killed quickly by shareholders.  That would be fine, because the purpose of the exercise would be to keep Musk out of jail, not to actually buy the company.  Tesla shareholders will still get hosed, probably having to pay some kind of break-up fee which any sane investor X would insert as the price for participating in this farce.  And we will go back to the starting point of all this, which is Tesla being public and focusing on operational improvement in what may be the most important operational quarter in its history.

Disclosure:  I have in the past been short Tesla but have no position in it now (I did short when trading reopened the other day after Musk's announcement but covered this afternoon).  I am not in any way, shape, or form giving any financial advice you should spend actual money backing.

The Ideological Turing Test: How to Be Less Wrong

If you plotted my "certainty" curve over time, it probably hit a low point in high school, climbed to peaks during college and just afterwards, slid over time as my face got pressed up against the glass of the real world, and dropped even lower when I discovered RSS readers and put a wide variety of feeds into it.  That is not to say I am not confident -- at least as long as we are talking about intellectual and not social skills -- but I am more open to being wrong than I have been since I was about 18.  I am fairly sure I still greatly overestimate my own correctness.

I was thinking a while back about why I perceived myself to have had this period in high school when I was less certain of my infallibility.  One reason had to be my finally coming to terms with nagging questions about the religion I grew up with.  Another was probably due to high school debate, where after vociferously defending a policy position for an hour one immediately had to walk into another room and defend the opposite side.  Even then high school debate was becoming broken, but being forced to argue both sides of every issue was a great experience.

All this is an introduction to a nice work by Charles Chu called "The Ideological Turing Test: How to Be Less Wrong."  It is hard to excerpt, because it covers a lot of ground, but I wish in retrospect my high school had printed something like this on my locker door.  If I had a billion dollars and wanted to found a new university**, I would make the ideological Turing test the core of the educational philosophy.  Think of what goes on in colleges nowadays and being a professor and saying "OK, class half over.  Nice discussion.  Now everyone switch sides."***

 

** Name a major private university with a national reputation or that your friends' kids have considered attending that was founded after 1900.  I can come up with only a couple: Rice University in Houston and several of the Claremont Colleges (e.g. Claremont-McKenna) in California.  Only one school in the Ivy League is less than 250 years old. Most folks can perhaps name one in their local city (ie Grand Canyon University here in Phoenix) that is newer but does not have a national reputation.  I guess that it could take a while to develop a national reputation, but 100 years?  Really?  In the art school world (which aren't generally considered universities) I can name at least 4 schools with a national reputation (at least in the art world) that were founded much more recently, several in my lifetime (SCAD, Ringling, Art Center, Cal Arts).

*** I did very well at Harvard Business School, better than I have done at anything else in my life (they did not have class ranks but I was pretty damn close to #1 out of 900, after being literally the last person they let in off the waiting list).  It helped that I love the format and loved the subject matter.  Also, to be honest it helped that I could do math (which held back half the class but led to my marrying someone I was tutoring) and that English was my first language (I had great respect for foreign students who even attempted to survive the case method in a second language).  But the real trick to success was to shine in the discussions, which were 70% or so of the grade.  And I did so with a simple trick.  I watched the discussion, and jumped in on whatever side was losing or had the fewest supporters, irregardless of what I might believe.  Not only was this a ton of fun, but it was appreciated by the professors -- they did not want to intervene in a discussion but felt like they had to if the argument got too unbalanced.  I took all kinds of positions against my true beliefs.  I argued that the only mistake "neutron" Jack Welch made at GE was not firing more people.  I slammed Steinway for ignoring new technology and fetishizing hand craftsmanship.  And I convinced everyone I must hate Canada when I opened a rant on the nation with "Canada is like a whole other state," riffing off the then-current Texas travel ad that said "Texas: It's Like A Whole Other Country."  I am not sure how one would do such a thing today when comments in class are seen more as virtue-signalling to your crowd than they are thought-out policy positions, and when taking the "wrong" side, even as an intellectual exercise, can lead to nationwide social media shaming.  By the way, my keys to succeeding at HBS are embedded in my novel BMOC, currently free on Kindle.

Elon Musk Combines the Social Media Maturity of Donald Trump With the Business Ethics of Elizabeth Holmes

Frequent readers will know that I have expressed both admiration and skepticism for Elon Musk's various business ventures.   SpaceX is cool.  I am extremely skeptical of the hyperloop, which looks like the technological equivalent of the emperor's new clothes.  I thought Tesla's acquisition of nearly-bankrupt SolarCity was corrupt insider self-dealing.  I think the initial Tesla cars were terrific products but that Musk's management is likely to kill the company.

Lately, I have tried to avoid discussing Tesla and Musk much because I don't want to turn this into a dedicated blog on those two subjects.  Also, with all the press (positive and negative) that it gets, another article on Tesla is about as necessary as another article on Stormy Daniels.  I even resisted the urge to comment on Musk's childish need to insert himself into the Thai cave rescue story and his subsequent rant on Twitter petulantly calling one member of the rescue team a pedophile because he did not use Musk's submarine.  Lol, a submarine for a rescue where one passage was so narrow a diver wearing tanks could not even squeeze through.

My will to avoid Musk and Tesla on this blog collapsed the other day when Musk personally called the employer of one of Tesla's harshest (and I would add most intelligent) critics pseudonymed Montana Skeptic, and threatened to sue the critic and get him fired unless he shut down his criticism.  He succeeded, as Montana Skeptic was forced to shut down and issue this statement:

Yesterday, July 23, I decided to cease writing about Tesla (TSLA) here at Seeking Alpha web site. I also deactivated my Twitter account, where I was @MontanaSkeptic1. Here is what prompted those decisions.

Yesterday afternoon, the principal of the family office in which I am employed received a communication from someone purporting to be Elon Musk. Doubtful that Elon Musk could actually be attempting to contact him, my employer asked one of my colleagues to investigate and respond.

My colleague then spoke by phone with Elon Musk (it was indeed him). Mr. Musk complained to my colleague about my writing at Seeking Alpha and on Twitter. Mr. Musk said if I continued to write, he would engage counsel and sue me.

My colleague then spoke with me about the phone call. We both agreed that Mr. Musk’s phone call and threatened lawsuit were actions that would tend to involve our employer in matters in which he has had no part. To avoid such a consequence, I offered to immediately cease writing at Seeking Alpha and to deactivate my Twitter account.

How did Mr. Musk learn my identity, and that of my employer? It appears to me his information came thanks to the doxing efforts of some of his followers on Twitter.

Neither Mr. Musk nor Tesla has ever attempted, at any time, to contact me. Instead, Mr. Musk determined to go directly to my employer.

I do not know what Mr. Musk’s precise complaints are about me. I do not believe he has any valid legal claim, and I would have no trepidation in defending myself vigorously were he to bring such a claim. My response to his threats were simply to protect my employer and preserve my employment.

And so, you might say, Elon Musk has won this round. He has silenced a critic. But he has many, many critics, and he cannot silence them all, and the truth will out.

Folks who have read the book "Bad Blood" about Theranos will recognize this behavior immediately.  Musk took advantage of the work of some of his fanboys who bravely doxxed Montana Skeptic and allowed Musk to determine his true identity.   Musk is certainly a child (emphasis on "child") of his age, preferring to force critics to shut up rather than respond to them in a reasoned manner.  And by the way, where the hell is his board of directors?  Just like at Uber, it is time for the grown-ups to come in and take over the visionary but flawed company started by their founder.

If you have a chance, you really should look at at least some of Montana Skeptic's work.  He was fact-based and analytical -- this is not some wild crazy social media guy going off on biased rants.  I would take Musk's action as a ringing endorsement of Montana Skeptic's analysis, most of which you can find here but require a Seeking Alpha membership.  However, if you have time to listen, the Quoth the Raven podcast has two good episodes with Montana Skeptic on Telsa (#23 and #28).

By the way, Elon.  If you wish, you may contact my employer here.

Why Western Efforts To Ban Plastic Drinking Straws Are GREAT for Global Prosperity

Yes, most plastic waste in the ocean comes from monsoon flooding of Asian rivers / cities that washes trash out into the ocean.  Yes, plastic drinking straws are a trivial percentage of the waste stream.  So yes, plastic drinking straw bans will have little effect on cleanliness of the environment.

BUT, this effort does seem to be occupying environmentalists and satisfying millennial needs for social media virtue signalling, all people who have many MUCH worse ideas for "improving" the world.  In other words, every day spent by these folks pushing for and preening over this lame plastic straw effort is one less day they can spend pushing for things that would be much more destructive.  It's like getting the termites around your yard to focus on easting the dead log in the back rather than eating the rafters in your house.

A Thought Experiment Wherein Coyote Makes In Intersectional Argument, Sort of

The following is a thought experiment:

Modern SJW's argue that it is impossible for one gender or ethnicity or sexual preference to understand another.  Taking that as a launching point, there appears to be a crisis in psychology that can only be fixed by government intervention. 

Begin with a basic fact:  Between 3 and 4 times more men in western nations, including the United States, commit suicide than women.  This is clearly a public health crisis of the highest magnitude(1).  

Unfortunately, it is getting harder and harder for these men to get the help they need.  Most psychologists today, and based on current graduation rates, almost all the psychologists of the future are women.  In fact, in 2016 22.4% -- less than one quarter! -- of all psychology graduates were men.  Men with existential crises in their lives are not going to be helped by someone woman-splaining the world to them.  How can any man be helped by psychologists who can't understand their most fundamental problems(2)?

Take this web page at the top of the google search on mental health and gender.   90% of the page covers only women's issues!  There is not even a single mention of suicide or the disproportionate male suicide crisis.  This is just further proof that the strong imbalance of the psychology profession to female providers inhibits any focus on or recognition of male issues.  You can see from this site that men are not even seeking help --"Women are more likely to have been treated for a mental health problem than men (29% compared to 17%)" -- almost certainly because men cannot find sympathetic male psychological help(3).

As a first step, the government needs to step in and find ways to eliminate the barriers that young men are facing in entering the psychology profession.(4)

OK, I have no idea if this is a credible effort but other than the fact that it is pointing out a unique male issue, I feel like this is at least as viable as any other SJW article I have read.  You will note the four tricks I used in the article that are common in many other more serious articles of the same sort

(1)  I assert this a public health crisis, but compared to what?  Are the deaths a lot or a little compared to other preventable causes.  Are the numbers rising or falling?  And how preventable are suicides?

(2) This is the underlying assumption in the article, that a psychologist of one gender cannot well serve a patient of another gender.  Is that really true?  Is there any science on this?  I have had physicians of both genders and have not really noticed a difference.  Of the psychological interventions I am aware of in friends and family, the most successful was a female helping a male.

(3) This is twisting a fact around the opposite of how most people would interpret it.  Most folks would interpret this as women have more mental health issues over their life that they need help with, a finding that seems to be pretty consistent in the scientific literature as well.  The clever conspiracy builder, though, can use almost any fact in their favor.

(4) Why do we assume that a gender imbalance is the result of barriers and discrimination, rather than just preferences? Typically, the media treats such imbalances asymmetrically.  Professions that skew female such as health care or psychology or education are treated as skewed due to preferences.  Professions that skew male such as software programing are treated as skewed due to discrimination.

IHOP And Modern Marketing

The International House of Pancakes announced the other day that they are changing their name to International House of Burgers, or IHOb.   I am 99% certain that this is just a marketing gimmick, a way to get social media buzz, after which they will "as a result of public pressure" go back to the old name.  A sort of intentional version of what Coke did years ago by accident with New Coke.

So far, I would judge it to be successful.  They were talked about on several national radio shows that I listen to (on sports talk radio, no less) and got a day's worth of media coverage (and presumably another day's worth when they change back).  This is a LOT of free advertising for a brand I have heard absolutely nothing about for years (except from my 21-year-old daughter who still makes me take her there from time to time for funny face pancakes.)

Brand strategy has really evolved a lot from when I was in B-school.  In the 1990's my wife was a brand manager at Frito-Lay and brand management at the time seemed incredibly conservative.  There were very defined, tightly-spaced rails that circumscribed what you could do with a brand.  But that is so boring it gets nowhere on social media.  "Fritos! They are... uh... everything they always have been."  This IHOP gimmick (and Budweiser's temporarily changing its name to America) demonstrate a lot less risk-aversion with core brands in a social media era where one has to be outrageous to get attention.

Postscript:  I was in Santa Monica the other day and saw something where they had a really lame, forgettable tag line for the city.  I wanted to help them with some catchier phrases.  Like, "Santa Monica:  World's Nicest Homeless Shelter" or "Santa Monica:  Watch Out For That Scooter!" or "Santa Monica:  You Want HOW MUCH for Rent??"