Coyote Blog

I had an argument in a comment thread of one of Kevin Drum's minimum wage or some such posts (sorry, I can't even find which one now to link it).  Anyway, my concluding remark was that the best thing that could ever happen to the unemployed, and particularly to low-skilled workers, would be if people were to discover ways to get rich from their labor.   Of course, I was met with total scorn, as if I had suggested sacrificing virgins to improve the climate.

The reason I mention this is that this disconnect seems to be at the heart of the problem of Progressivism.  I am convinced that they honestly want to help low-skilled workers and the poor do better economically, but they advocate for policies that are 180-degrees askew.  Most of what they wish for -- higher minimum wages, larger mandated benefits packages, more paid leave, more ability to sue employers over trivial slights -- absolutely, with near mathematical precision, raise the cost of hiring low-skill workers, making it increasingly unlikely anyone will do so.  Low-skill workers get hired for one and only one reason (which is the same reason any worker gets hired):  someone thinks they can profit from that labor.  It is the potential for profit that is the sole reason for hiring anyone, but it is exactly that profit potential that Progressives most fear and deride.

There are few things I enjoy more when I am on the road alone or even at home with my family gone for some reason than going to a nice restaurant, sitting at the bar, and having a few drinks and dinner.  All by myself (OK, maybe with my Kindle too).

My favorite right now is the bar at Eddie V's steakhouse.

As a weird aside which I cannot explain, I am a pretty severe introvert who finds it almost impossible to make conversation with strangers at cocktail parties or at nearly any other venue.  This week my wife and I were walking up Canyon Road in Santa Fe looking at art galleries and I just plain stopped going in because I didn't want to deal with the way every gallery salesperson tends to immediately overwhelm one with small talk.  I worked long and hard to find a hair cutter and a dental hygenist that didn't insist on trying to have a conversation while they did their work on me.   But despite all this, I can comfortably meet and interact with people while sitting at bars.  Not sure why.

In a comment on this article about declining startup activity and the growing average size of businesses, a commenter wrote:

The high foreign trade deficit is also a barrier to the formation of small new companies. The annual trade deficit of the US is greater than the rate of GDP growth, which explains a lot of things. Probably more companies are being destroyed than created in the US. Legislate and reverse the foreign trade deficit and there will be a massive surge in small companies.

I wrote in return

As for wolf-dogs comment on the trade deficit, I think this is totally wrong. Most of the trade imbalance is with stuff like cars and steel which are unlikely startup businesses. The easy availability of Asian manufacturing sources for nearly anything you want to make or can dream up facilitates startups and entrepreneurship. My gut feel, just seeing what entrepreneurs around me are doing but not from any hard data, is that globalization and easy international sourcing is a net positive for small business formation.

I have never seen any data on this though.  Thoughts?

Coyote, in Forbes, December 2010 (excerpts):

My contention is that what drives most progressives, at a very fundamental level, is a deep conservatism.  Of course, most “progressives” would freak if they were called conservative, but what I mean by conservative in this context is not donate-to-Jesse-Helms capital-C Conservative but fearful of change and uncomfortable with uncertainty conservative.

Because capitalism is based so completely on individual decision-making, because its operation is inherently chaotic, and because its rewards can’t possibly be divided equally and still be “rewards”, progressives are hugely uncomfortable with it.  Ironically, though progressives want to posture at being “dynamic”, it turns out that capitalism is in fact too dynamic for them.  Industries rise and fall, jobs are won and lost, recessions give way to booms.  Progressives want comfort and certainty.  They want to lock things down the way they are. They want to know that such and such job will be there tomorrow and next decade, and will always pay at least X amount.  Which is why, in the end, progressives are all statists, because only a government with totalitarian powers can bring the order and certainty and control of individual decision-making that they crave..

Progressive elements in this country have always tried to freeze commerce, to lock this country’s economy down in its then-current patterns.  Progressives in the late 19th century were terrified the American economy was shifting from agriculture to industry.  They wanted to stop this, to cement in place patterns where 80-90% of Americans worked on farms.  I, for one, am glad they failed, since for all of the soft glow we have in this country around our notion of the family farmer, farming was and can still be a brutal, dawn to dusk endeavor that never really rewards the work people put into it....

I am sure, if asked, most  progressives would profess to desire iPod’s and cures for cancer.  But they want these without the incentives that drive men to invent them, and the disruption to current markets and competitors and employees that their introduction entails.  They want to end poverty without wealth creation, they want jobs without employers, they want cars without unemployment for buggy whip makers.

Hillary Clinton in July, 2015:  via Instapundit

In her first major economic policy address of the 2016 campaign, Democratic presidential frontrunner Hillary Clinton raised questions about the effect that companies like Uber and Airbnb are having on American workers. . . .

Later in the speech, Clinton vowed to “crack down on bosses who exploit employees by misclassifying them as contractors” — a possible reference to something like the recent California Labor Commission decision that threatens to undermine Uber’s business model.

To be sure, Clinton does not want to destroy the sharing economy. She acknowledged that “these trends are real” and “none is going away.” But she may believe that, with the right application of political muscle, the new economy can be forced to conform with the antiquated blue social model — that is, the midcentury vision of steady, regulated, unionized employment with generous benefits.

As we have argued again and again, this notion is unrealistic. Like it or not, this 1950s model of economic organization is breaking down, and has been for several decades, thanks to globalization, demographic changes, technological innovation, and other trends that simply cannot be reversed. Measures like the California decision are futile and counterproductive. We should treat the emergence of a more entrepreneurial, dynamic landscape as an opportunity to be engaged with productively, not a danger to be henpecked by regulations better suited to the last century.

First, let's start with the Guardian headline:

Exxon knew of climate change in 1981, email says – but it funded deniers for 27 more years

So now let's look at the email, in full, which is the sole source for the Guardian headline.  I challenge you, no matter how much you squint, to find a basis for the Guardian's statement.  Basically the email says that Exxon knew of the concern about global warming in 1981, but did not necessarily agree with it.  Hardly the tobacco-lawyer cover-up the Guardian is trying to make it sound like.  I will reprint the email in full because I actually think it is a pretty sober view of how good corporations think about these issues, and it accurately reflects the Exxon I knew from 3 years as a mechanical / safety engineer in a refinery.

I will add that you can see the media denial that a lukewarmer position even exists (which I complained about most recently here) in full action in this Guardian article.  Exxon's position as described in the Guardian's source looks pretty close to the lukewarmer position to me -- that man made global warming exists but is being exaggerated.   But to the Guardian, and many others, there is only full-blown acceptance of the most absurd exaggerated climate change forecasts or you are a denier.  Anyway, here is the email in full:

Corporations are interested in environmental impacts only to the extent that they affect profits, either current or future. They may take what appears to be altruistic positions to improve their public image, but the assumption underlying those actions is that they will increase future profits. ExxonMobil is an interesting case in point.

Exxon first got interested in climate change in 1981 because it was seeking to develop the Natuna gas field off Indonesia. This is an immense reserve of natural gas, but it is 70% CO2. That CO2 would have to be separated to make the natural gas usable. Natural gas often contains CO2 and the technology for removing CO2 is well known. In 1981 (and now) the usual practice was to vent the CO2 to the atmosphere. When I first learned about the project in 1989, the projections were that if Natuna were developed and its CO2 vented to the atmosphere, it would be the largest point source of CO2 in the world and account for about 1% of projected global CO2 emissions. I’m sure that it would still be the largest point source of CO2, but since CO2 emissions have grown faster than projected in 1989, it would probably account for a smaller fraction of global CO2 emissions.

The alternative to venting CO2 to the atmosphere is to inject it into ground. This technology was also well known, since the oil industry had been injecting limited quantities of CO2 to enhance oil recovery. There were many questions about whether the CO2 would remain in the ground, some of which have been answered by Statoil’s now almost 20 years of experience injecting CO2 in the North Sea. Statoil did this because the Norwegian government placed a tax on vented CO2. It was cheaper for Statoil to inject CO2 than pay the tax. Of course, Statoil has touted how much CO2 it has prevented from being emitted.

In the 1980s, Exxon needed to understand the potential for concerns about climate change to lead to regulation that would affect Natuna and other potential projects. They were well ahead of the rest of industry in this awareness. Other companies, such as Mobil, only became aware of the issue in 1988, when it first became a political issue. Natural resource companies – oil, coal, minerals – have to make investments that have lifetimes of 50-100 years. Whatever their public stance, internally they make very careful assessments of the potential for regulation, including the scientific basis for those regulations. Exxon NEVER denied the potential for humans to impact the climate system. It did question – legitimately, in my opinion – the validity of some of the science.

Political battles need to personify the enemy. This is why liberals spend so much time vilifying the Koch brothers – who are hardly the only big money supporters of conservative ideas. In climate change, the first villain was a man named Donald Pearlman, who was a lobbyist for Saudi Arabia and Kuwait. (In another life, he was instrumental in getting the U.S. Holocaust Museum funded and built.) Pearlman’s usefulness as a villain ended when he died of lung cancer – he was a heavy smoker to the end.

Then the villain was the Global Climate Coalition (GCC), a trade organization of energy producers and large energy users. I was involved in GCC for a while, unsuccessfully trying to get them to recognize scientific reality. (That effort got me on to the front page of the New York Times, but that’s another story.) Environmental group pressure was successful in putting GCC out of business, but they also lost their villain. They needed one which wouldn’t die and wouldn’t go out of business. Exxon, and after its merger with Mobil ExxonMobil, fit the bill, especially under its former CEO, Lee Raymond, who was vocally opposed to climate change regulation. ExxonMobil’s current CEO, Rex Tillerson, has taken a much softer line, but ExxonMobil has not lost its position as the personification of corporate, and especially climate change, evil. It is the only company mentioned in Alyssa’s e-mail, even though, in my opinion, it is far more ethical that many other large corporations.

Having spent twenty years working for Exxon and ten working for Mobil, I know that much of that ethical behavior comes from a business calculation that it is cheaper in the long run to be ethical than unethical. Safety is the clearest example of this. ExxonMobil knows all too well the cost of poor safety practices. The Exxon Valdez is the most public, but far from the only, example of the high cost of unsafe operations. The value of good environmental practices are more subtle, but a facility that does a good job of controlling emission and waste is a well run facility, that is probably maximizing profit. All major companies will tell you that they are trying to minimize their internal CO2 emissions. Mostly, they are doing this by improving energy efficiency and reducing cost. The same is true for internal recycling, again a practice most companies follow. Its just good engineering.

I found this quote from an older Finem Respice article about Greek financial problems in the mid-20th-century to be pretty funny:

So hopeless was the state of Greek finances that, even as [the Nazis] routinely hung with piano wire prominent citizens and officials on the thinnest of provocations, and even given three years to do it, the Nazi's were somehow unable to compel what amounted to a totally subservient collaborator government to put its fiscal house in order.

The Axis administration soon realised it would be a waste of effort to get the Greek government to balance its accounts.

Later, in 1945, it was a British problem.  These problems from the late 1940's should sound really familiar:

Fortunately for Germany, by the time the matter came to a head the Germans had RSVP'd to Scobie and Greece was Britain's problem. It wasn't just partisans the British would end up having to fight....

What followed could only be described as a comic progression of populist pandering, the spread to the national economy of a series of parasitic labor unions and cabals, and a confidence on the part of the Allies in their own fiscal administration abilities that was as enduring as it was inflated.

At first [British Treasury Secretary] Waley sold gold to support the drachma, conditioning the sale on a series of fiscal and monetary reforms the Greeks adopted in principle and promised to implement– at some later date when it was somewhat more convenient. It was around this time Waley quipped:

...the Greek government are in effect paying doles to a large part of the population who spend all day parading in the streets in idleness with political demonstrations as their chief occupation.9

Liberation governments, fearing popular backlash were terrified of taxing the Greeks. Instead they continued to look for sources of wealth to redistribute, and were happy to resort to even the most gamey monetary policies to buy time. After raiding "punitively" the only entities with wealth of any kind (businesses) in 1945 in order to buy popular support with cheap food and wage increases, the Greeks were, again, running out of options.

The whole thing is interesting, and depressing.

I will say that this story honestly loses me.  

Just when you think we’ve reached Peak Sensitivity, the scolds of social justice sprinkle more sand into their underpants. The Museum of Fine Arts in Boston is currently showing a superb exhibition of the art of Hokusai. As per common practice at scholarly institutions, it is displaying related material, including an exhibition of contemporary Japanese photographers responding to the devastating earthquake that hit the northern part of the country in 2011. It also rehung La Japonaise, an 1876 canvas in its collection by Claude Monet, depicting his wife Camille in a vermillion kimono.

Among the educational programming at the MFA was “Kimono Wednesdays,” an opportunity for museumgoers to try on replica of that kimono in the presence of Monet’s canvas. It was slated for Wednesday evenings, when the museum’s entrance fee is by donation, starting June 24 and running throughout the month of July. But it didn’t make it that far.

Demonstrators showed up at the first two events bearing posters accusing the participants of grave wrongdoing. “Try on the kimono; learn what it’s like to be a racist imperialist today!” exclaimed one. “Let’s dress up Orientalism with more Orientalism,” read another. The protest had been arranged through a Facebook group named Stand Against Yellow-Face @ the MFA (the discussions have moved to a Tumblr), where the principals and their supporters expressed great umbrage. “A willingness to engage in thoughtful dialogue (or not) with museum employees and visitors on the bullshit of this white supremacist ‘costume’ event are welcome,” wrote one of the organizers.

The Heritage Foundation ranks Greece #130 on its economic freedom list, which puts it in the "mostly unfree" category.   Of course, these rankings depend a lot on the categories and the weighting, but the story here is still telling.  The next worst European country I can find is Slovenia at #88 and the first EU country I see is Italy at #80, not great but a good fifty spots higher.

Which begs the question, asked by Megan McArdle today, of why Europe wants Greece anyway.  In terms of political-economy, it had little in common with the rest of the continent.  Everyone assumes the EU is trying to prevent a domino effect, with the other PIGS nations defecting from the Euro, but I think the Greek capitulation this weekend shows how unlikely this is -- it is clear Greece will do absolutely anything to stay in the Euro, and so it is reasonable to assume Portugal, Spain, and Italy face the same incentives and are thus not ready to leave the Euro on a whim just because Greece does.

Jay P. Greene's suggestions for potential petty little dictators in government:

• Think about how others have plans for their own lives just as you have a plan for yours.  Just because you don’t understand their plan doesn’t mean that theirs is not legitimate or that you should impose your vision on them.
• Recognize that just as others are subject to limited information and systematic deviations from rationality, so are you.  You shouldn’t imagine that you are the rational, well-informed one whose plan can fix the defects from which others suffer.
• Remember that you and your friends are not the government.  Once the government takes responsibility for an issue, no one can completely control what the government will do and those with the strongest vested interests (and often not the best intentions) are likely to have more influence than you.
• Be humble about the limits of your knowledge and expertise.  You may have gone to an elite school and have always been told how smart you are, but that doesn’t mean that you understand everything.  Understanding comes from real experience and/or rigorous examination of an issue.  Reading a bunch of articles or having spent a few years as the deputy assistant director of whatever does not count as experience or rigorous examination.

This is just a sample.  There is more at the link

I thought this was pretty clever, and probably took some guts as this person will likely get a lot of criticism on campus.  Princeton student Tal Fortgang writes "38 Ways College Students Enjoy ‘Left-Wing Privilege’ on Campus."  A small taste:

1. I can, if I wish, arrange to be in the company of people of my political persuasion most of the time.

2. I can spend my entire college career taking only classes with professors who think exactly as I do.

3. I can take classes and earn degrees in departments that are designed to line up exactly with my worldview.

4. I can be sure that an overwhelming majority of the material I am assigned to read for class will confirm what I already believe.

5. My professors will assume that I already think just like them, and use examples and anecdotes that testify to our philosophical uniformity.

6. I can almost always be sure that my professor will present or corroborate my side of a debate.

7. I will likely never have to make the choice between writing what I believe to be true and writing what I think will get a good grade.

In the same vein:

From the WSJ, an article on how politicians who tried to point out the unsustainability of Greek finances years ago where not only ignored, but villified and marginalized.  Sort of like in places like California and Illinois.

In the past quarter century, Greece has had a handful of reformist politicians who foresaw the problems that are now threatening the nation with bankruptcy.

Their reform proposals were fought by their colleagues in parliament and savaged by the media and labor unions. They invariably found themselves sidelined....

Tassos Giannitsis is no stranger to this kind of war: His tenure as labor minister was more short lived, and the battles against him even more visceral. Mr. Giannitsis in 2001, again in the Pasok government led by Mr. Simitis, put forward a comprehensive proposal to reform the pension system.

Trade unions, opposition parties and Pasok itself unleashed menace on Mr. Giannitsis.

“Giannitsis was annihilated after his pension-reform proposals. There are few precedents for this kind of universal attack on a politician,” said Loukas Tsoukalis, a prominent economics professor here.

Mr. Giannitsis’s proposals, which would have reduced the pension levels Greeks receive and made the system overall more sustainable given the country’s demographic and labor-force trends, were never taken to parliament.

“From the fridge to the bin!” said the front page of newspaper To Vima on April 28, 2001, as the frozen pension-reform plan was scrapped for good.

“When I told my colleagues in the cabinet about the reforms I was proposing—which mind you were not the toughest available—the attitude I got was that I was spoiling the party,” Mr. Giannitsis said in an interview.

“They were, like, ‘everything is going great right now, why are you bothering us with a problem that may implode in a decade?’”

There are many other examples.

The FTC is looking into the Apple music service:

the FTC has begun looking into Cupertino's "treatment of rival streaming music apps" to make sure it's not violating any antitrust law. See, iTunes also offers those competitor apps for download, and Apple gets a 30 percent cut per subscription paid through the program. That forces the companies to choose between charging extra on top of their $9.99 per month service (making the total $12.99) and accepting the loss to match Apple Music's pricing.

In addition, the FTC's reportedly looking into the App Store's numerous restrictions, as well. These include prohibiting companies from mentioning that their apps are also available on other platforms and from pointing customers to their websites to purchase goods and services. That's the reason why Spotify recently decided to send an email blast to subscribers with instructions on how to sign up directly on its website instead of paying $3 more through iTunes.

Good lord.  What is next -- does Whole Foods have to post a notice next to the tomatoes that you can buy them cheaper at Kroger?  Clearly Spotify has found a workaround without any help from Big Brother at all.

“Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded—here and there, now and then—are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.

“This is known as ‘bad luck’.”

– Robert A. Heinlein

I cannot recommend Matt Ridley's new article strongly enough.  It covers a lot of ground be here are a few highlights.

Ridley argues that science generally works (in a manner entirely parallel to how well-functioning commercial markets work) because there are generally incentives to challenge hypotheses.  I would add that if anything, the incentives tend to be balanced more towards challenging conventional wisdom.  If someone puts a stake in the ground and says that A is true, then there is a lot more money and prestige awarded to someone who can prove A is not true than for the thirteenth person to confirm that A is indeed true.

This process breaks, however when political pressures undermine this natural market of ideas and switch the incentives for challenging hypotheses into punishment.

Lysenkoism, a pseudo-biological theory that plants (and people) could be trained to change their heritable natures, helped starve millions and yet persisted for decades in the Soviet Union, reaching its zenith under Nikita Khrushchev. The theory that dietary fat causes obesity and heart disease, based on a couple of terrible studies in the 1950s, became unchallenged orthodoxy and is only now fading slowly.

What these two ideas have in common is that they had political support, which enabled them to monopolise debate. Scientists are just as prone as anybody else to “confirmation bias”, the tendency we all have to seek evidence that supports our favoured hypothesis and dismiss evidence that contradicts it—as if we were counsel for the defence. It’s tosh that scientists always try to disprove their own theories, as they sometimes claim, and nor should they. But they do try to disprove each other’s. Science has always been decentralised, so Professor Smith challenges Professor Jones’s claims, and that’s what keeps science honest.

What went wrong with Lysenko and dietary fat was that in each case a monopoly was established. Lysenko’s opponents were imprisoned or killed. Nina Teicholz’s book  The Big Fat Surprise shows in devastating detail how opponents of Ancel Keys’s dietary fat hypothesis were starved of grants and frozen out of the debate by an intolerant consensus backed by vested interests, echoed and amplified by a docile press....

This is precisely what has happened with the climate debate and it is at risk of damaging the whole reputation of science.

This is one example of the consequences

Look what happened to a butterfly ecologist named Camille Parmesan when she published a paper on “ Climate and Species Range” that blamed climate change for threatening the Edith checkerspot butterfly with extinction in California by driving its range northward. The paper was cited more than 500 times, she was invited to speak at the White House and she was asked to contribute to the IPCC’s third assessment report.

Unfortunately, a distinguished ecologist called Jim Steele found fault with her conclusion: there had been more local extinctions in the southern part of the butterfly’s range due to urban development than in the north, so only the statistical averages moved north, not the butterflies. There was no correlated local change in temperature anyway, and the butterflies have since recovered throughout their range.  When Steele asked Parmesan for her data, she refused. Parmesan’s paper continues to be cited as evidence of climate change. Steele meanwhile is derided as a “denier”. No wonder a highly sceptical ecologist I know is very reluctant to break cover.

He also goes on to lament something that is very familiar to me -- there is a strong argument for the lukewarmer position, but the media will not even achnowledge it exists.  Either you are a full-on believer or you are a denier.

The IPCC actually admits the possibility of lukewarming within its consensus, because it gives a range of possible future temperatures: it thinks the world will be between about 1.5 and four degrees warmer on average by the end of the century. That’s a huge range, from marginally beneficial to terrifyingly harmful, so it is hardly a consensus of danger, and if you look at the “probability density functions” of climate sensitivity, they always cluster towards the lower end.

What is more, in the small print describing the assumptions of the “representative concentration pathways”, it admits that the top of the range will only be reached if sensitivity to carbon dioxide is high (which is doubtful); if world population growth re-accelerates (which is unlikely); if carbon dioxide absorption by the oceans slows down (which is improbable); and if the world economy goes in a very odd direction, giving up gas but increasing coal use tenfold (which is implausible).

But the commentators ignore all these caveats and babble on about warming of “up to” four degrees (or even more), then castigate as a “denier” anybody who says, as I do, the lower end of the scale looks much more likely given the actual data. This is a deliberate tactic. Following what the psychologist Philip Tetlock called the “psychology of taboo”, there has been a systematic and thorough campaign to rule out the middle ground as heretical: not just wrong, but mistaken, immoral and beyond the pale. That’s what the word denier with its deliberate connotations of Holocaust denial is intended to do. For reasons I do not fully understand, journalists have been shamefully happy to go along with this fundamentally religious project.

The whole thing reads like a lukewarmer manifesto.  Honestly, Ridley writes about 1000% better than I do, so rather than my trying to summarize it, go read it.

A reader sent me a link to this Vox article on streetcars.  What I thought was interesting is just how weak the case for streetcars is, even when made by folks are are presumably sympathetic to them.  This page is entitled "Why do cities want streeetcars."  The arguments are:

• Tourists like them, because you can't get lost like you can on buses.  My response is, "so what."  Unless you are one of a very few unique cities, tourists are a trivial percentage of transit riders anyway.  Why build a huge system just to serve out-of-town visitors?  I would add that many of these same cities (e.g. Las Vegas) considering streetcars are the same ones banning Uber, which tourists REALLY love.
• Developers like them.  Ahh, now we are getting somewhere.  So they are corporate welfare?  But not so fast, they are not even very good corporate welfare.  Because most of the studies they cite are total BS, of the same quality as studies that say sports stadium construction spurs all sorts of business.  In fact, most cities have linked huge tax abatement and subsidy programs to their streetcars, such that the development you get with the subsidy and the streetcar is about what you would expect from the subsidies alone.  Reminds me of the old joke that mimicked cereal commercials: "As part of a breakfast with juice, toast, and milk, Trix cereal has all the nutrition of juice, toast, and milk."
• Good for the environment.  But even Vox asks, "as compared to what."  Since they are generally an alternative buses, as compared to buses that have little environmental advantage and often are worse (they have a lot more weight to drag around when empty).
• The Obama Administration likes them.  LOL, that's a recommendation?  When you read the text, what they actually say is that mayors like the fact that the Obama Administration likes them, for it means the Feds will throw lots of Federal money at these projects to help mayors look good using other peoples' money
• Jobs.  This is hilarious Keynesianism, trying to make the fact that streetcars are 10-100x more expensive than buses some sort of positive.  Because they are more inefficient, they employ more people!  One could make the exact same argument for banning mechanical harvesters and going back to scythes.   Left unquestioned, as Bastiat would tell us, is how many people that money would have employed if it had not been seized by the government for streetcar use.
• Je ne sais quoi.  I kid you not, that is their final argument, that streetcars add that special something to a neighborhood.  In my mind, this is Vox's way of saying the same thing I did the other day -- that the streetcar's appeal is primarily based on class, in that middle and upper class folks don't want to ride on a bus with the masses.   The streetcar feels more upscale than buses.   The poor of course, for whom public transit is most vital, don't want to pay 10 times more for sexiness.  Oh, and watch this video of Washington streetcars blocking traffic and crunching parked cars and tell me what it is adding to the neighborhood.

Every argument I have ever been in on streetcars always boils down to something like "well, all the cool kids like them."  Once, after defending the US approach to rail (vs. Europe and Japan) as (correctly) focusing on productivity vs. sexiness, having gone into a lot of detail on the economics of freight vs. passengers, I got a one sentence answer from Joel Epstein of the HuffPo:  “You should get out of the country more often.”  That was it -- the cool cosmopolitan kids who vacation in Gstaad but never would be caught dead driving across Nebraska were all against me.

One of my critiques of global warming alarmists is that they are trying to use a type of observation bias to leave folks with the impression that weather is becoming more severe.  By hyping on every tail-of-the-distribution weather event in the media, they leave the impression that such events are becoming more frequent, when in fact they are just being reported more loudly and more frequently.  I dealt with this phenomenon in depth in an older Fortune article, where I made an analogy to the famous "summer of the shark"

...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.

Yesterday I was stuck on a stationary bike in my health club with some Fox News show on the TV.  Not sure I know whose show it was (O'Reilly?  Hannity?) but the gist of the segment seemed to be that a recent murder by an illegal immigrant in San Francisco should be taken as proof positive of the Trump contention that such immigrants are all murderers and rapists.  The show then proceeded to show a couple of other nominally parallel cases.

Yawn.   It would be intriguing to flood an hour-long episode with stories of legal American citizens committing heinous crimes.  One wonders if folks would walk away wondering if there was something wrong with those Americans.

One could pick any group of human beings and do a thirty-minute segment showing all the bad things members of that group had done.  What this does not prove in the least is whether that group has any particular predilection towards doing bad things, or specifically in the case of Mexican immigrants, whether they commit crimes at a higher rate than any other group in this country.  In fact, everything I read says that they do not, which likely explains why immigration opponents use this technique, just as climate alarmists try to flood the airwaves with bad weather stories because the actual trend data for temperatures does not tell the story they want to tell.

The Federal Reserve Bank of NY has a study on the effect of increasing student loan availability on tuition.  The key sentence is in bold:

When students fund their education through loans, changes in student borrowing and tuition are interlinked. Higher tuition costs raise loan demand, but loan supply also affects equilibrium tuition costs—for example, by relaxing students’ funding constraints. To resolve this simultaneity problem, we exploit detailed student-level financial data and changes in federal student aid programs to identify the impact of increased student loan funding on tuition. We find that institutions more exposed to changes in the subsidized federal loan program increased their tuition disproportionately around these policy changes, with a sizable pass-through effect on tuition of about 65 percent. We also find that Pell Grant aid and the unsubsidized federal loan program have pass-through effects on tuition, although these are economically and statistically not as strong. The subsidized loan effect on tuition is most pronounced for expensive, private institutions that are somewhat, but not among the most, selective.

If I understand this correctly, they are saying that policy change that result in $3 of additional subsidized borrowing capability by students leads to $2 in tuition increases.   Talk about running in place!

Hat tip to Neal McCluskey of Cato, who has links to many more studies with similar results.

People keep talking about reducing Greek debt to a sustainable level, but part of the problem is that there is not such level.  Even at zero.  The problem is that Greece is running a government deficit even before any debt service, so if creditors were to waive all of its debt, it would still need to be borrowing new money tomorrow.  Debt forgiveness is not enough -- what the Greeks need is for Europe to write off all its debt, and then (having lost all their money on the old debt) start lending new money immediately.  Note also that any bailout agreement reached this month will just put everyone back in the exact same place a few months from now.

This situation cannot be expected to change any time soon, for a variety of reasons from demographics (Greece has the oldest population in Europe, and a relatively rich pension system) to ideology (the current pseudo-Marxist government will never implement the reforms needed to turn the economy around, even if they promise to do so under duress).

With structural solutions unlikely, Greece has only the options of charity and inflation. Greece still seems to be hoping for charity, which they make harder by spewing derision at the same folks whom they are begging for alms.  Europe, certainly Germany, is in no mood to be charitable any longer, but may still do so depending on their calculation about which action -- bailout or exit -- has the worse long-term consequences for keeping Portugal, Spain, and Italy both in the Euro and continuing to pay their debts.

Lacking charity, the only thing left is inflation.  Some folks think I am advocating that option.  I am not.  The best possible hope for Greece is to slash its economic regulation, privatize business, and cut back on the public sector -- but that is not going to happen with the current government.  Or maybe any government.

I say inflation is the only option because that is what balances the budget and "solves" debt problems when politicians are unable or unwilling to make any hard choices.  It is sort of the default.  If they can't balance the budget or figure out how to pay off debt, then inflation does it for them by reducing the value of pensions and outstanding debts**.  This is what will happen with a Grexit -- a massive bout of devaluation and inflation what will greatly reduce the value of any IOU, whether it be a pension or a bank deposit.

Eventually, the one good thing that comes from inflation and devaluation is that the country becomes really cheap to outsiders.  Tourists will flock in and olive oil will sell well internationally as the new drachma loses its value, creating value for people holding stronger currencies and potentially forming the basis for some sort of economic revival.  My wife and I decided a few months back to postpone the Greek vacation we wanted this year -- too much turmoil is still possible -- and wait for it to be a bargain in 2016 or 2017.

**Postscript:  This is exactly why the Euro is both immensely seductive and a dangerous trap for countries like Greece.  Seductive, because it could pursue any sort of destructive banana republic fiscal policy it wished and still have a strong currency.  A trap because it can no longer print money and inflate away its debt problems.

This Georgetown Law Journal critique of the criminal justice system, and in particular proprietorial abuse, is terrific (though I am only about half way through).  If you don't have time to read it all (and it is much shorter than it looks because half or more of each page is footnotes) then you might check out these highlights by Alex Tabarrok.  I expect Ken White of Popehat to have something to say here, and look forward to his reactions.

As background, I live in a town called Paradise Valley, Arizona.  This town is perhaps most famous recently for installing surveillance cameras all over town hidden in fake cacti.  Here is the one on my block.  There are at least two others within walking distance of my house.
    

These cameras apparently have license plate reading ability and perhaps the ability to do facial recognition, and likely are funded by Homeland Security for the purposes of feeding data into a national tracking database.  I say "likely" because the town of Paradise Valley under Mayor Michael Collins somehow appropriated these things secretly without any public discussion or debate.

So in this context, it was hilarious to see none other than Mayor Michael Collins piously intoning about the importance of privacy in the town of Paradise Valley:

Paradise Valley is considering an ordinance that would make it illegal to fly drones in town without a permit. Backyard hobbyists and law-enforcement agencies that may need to use drones during emergencies would be excluded from the proposed ban.

"Our residents move to Paradise Valley because they like the privacy," said Mayor Michael Collins, who presides over a community that counts celebrities, sports stars and Discount Tire founder Bruce Halle, the richest person in Arizona, among its residents.

What Mr. Collins apparently means is that he wants the government to maintain a monopoly on surveillance technologies.  Libertarians like myself cringe at the notion that a monopoly on privacy-invasion should be granted to the government, the only institution in the country that can legally jail you, take your money, and even shoot you. Conservatives, who dominate this community, tend to be blind to this danger, saying that "if you aren't doing anything illegal, you have nothing to fear from surveillance."  I will say, though, that some Conservatives have woken up a bit over the last several years on this with the IRS non-profit harassment and the Wisconsin John Doe investigations.

By the way, extra credit to the Arizona Republic for gratuitously publishing where a wealthy citizen lives in a sentence about privacy.

From Shawn Regan at PERC, via Arnold Kling

Last year, riding the buzz over dying bees, the Obama administration announced the creation of a pollinator-health task force to develop a “federal strategy” to promote honeybees and other pollinators. Last month the task force unveiled its long-awaited plan, the National Strategy to Promote the Health of Honey Bees and Other Pollinators. The plan aims to reduce honeybee-colony losses to “sustainable” levels and create 7 million acres of pollinator-friendly habitat. It also calls for more than $82 million in federal funding to address pollinator health.

But here’s something you probably haven’t heard: There are more honeybee colonies in the United States today than there were when colony collapse disorder began in 2006. In fact, according to data released in March by the Department of Agriculture, U.S. honeybee-colony numbers are now at a 20-year high. And those colonies are producing plenty of honey. U.S. honey production is also at a 10-year high.

The White House downplays these extensive markets for pollination services. The task force makes no mention of the remarkable resilience of beekeepers. Instead, we’re told the government will address the crisis with an “all hands on deck” approach, by planting pollinator-friendly landscaping, expanding public education and outreach, and supporting more research on bee disease and potential environmental stressors.

I am sure the government, once they have had some bureaucrats running around filing reports and plans for a few years will soon claim credit for the improvement.  My prediction:  This agency will still be here 50 years from now.  You can never kill these things once created.  This is only slightly less irritating than politicians who claim that they "created X million jobs" when in office, but only slightly.

Update:  Another very similar example:  transfats.

The Food and Drug Administration recently moved to eliminate trans fats from the American diet, and food activists and the public-health lobby are claiming a historic victory. Yet this is a rare case of the Obama Administration regulating from behind. Markets had as much to do with the fall of trans fats as government did with their rise.

The FDA’s first restrictions on the use of partially hydrogenated oils as a major source of trans fats in processed foods—think Crisco shortening—give food makers three years to phase out the substance. Evidence began to accumulate in the early 2000s that trans fats were connected to bad cholesterol and cardiovascular diseases. Shoppers and diners concerned about health risks soon started to revolt against the fried and baked goods and the fast-food fare where they were prevalent.

Lo and behold, the food industry responded by changing their recipes and eliminating the oils from some 86% of their products. Trans fat consumption plunged by 78% over a decade, according to the FDA’s estimates, and is now well below the two grams per day that the American Heart Association says is the safe upper limit. The rare survivors of this purge are niche foods like microwave popcorn, frozen pizza and chocolate sprinkles, where trans fats are useful for improving taste and texture.

China's island bases for expanding its borders.

I am increasingly convinced that the appeal of streetcars and light rail has everything to do with class.  From any rational perspective, these systems make no sense -- they are 10-100x more expensive than buses and lack the flexibility that buses have to adjust to shifting demand patterns over time.  A single extra lane of highway adds more capacity than any light rail line.

Streetcar's single, solitary advantage is that middle and upper class whites who would not be caught dead on a bus seem to be willing to ride streetcars.   I don't know if this is because of some feature of the streetcars (they are shiny and painted pretty) or if it is some sort of self-segregation (the upper classes want to ride on something that is not filled with "riffraff").

Anyway, Reason has a really good video on streetcars, which covers a lot of topics from cronyism to the class issues I mention.  And the film of the incredibly poor design of the DC streetcar has to be seen to be believed.  (via Maggies Farm and their great daily links page)