Coyote Blog

A couple of weeks ago my wife and I were in Pasadena and we visited the Huntington.  I almost never see it on list of things to do in LA.  This list has 22 things including some odd choices but no mention of the Huntington.

The Huntington is the mansion and grounds of one of the heirs to railroad magnate Collis P Huntington.  Perhaps one of the reasons it is not well-known is that it is hard to exactly categorize what this place is.  First, it is an amazing garden (pictures below) that has a desert garden, a tropical garden, a temperate garden, a Japanese garden, the bonsai garden, a Chinese garden, a water garden, a rose garden and an herb garden.  I have been to a lot of gardens and arboretums around the world and this compares to the best.  More enjoyable, for example, than either major arboretum in Singapore which top tourist lists.  Then, there are the art museums, actually two.  We only made it to the European art museum, which was in the original mansion -- it contained a lot of large portraiture by Sargent and Gainsborough, among other works.  And then there is what is actually the centerpiece of the facility, the library.  Only a small part of the collection is on display, but what is there is amazing -- from fabulous illuminated manuscripts to a Gutenberg Bible to a number of signature historical documents.   As icing on the cake, there is the chance to walk through a couple of great mansions with a good part of the original furnishings intact.

The closest analog I can come up with is the Getty.  The Getty gets top billing in many LA must-do lists, and I can tell you that the Huntington blows the Getty away.  Sure, you should see the Getty, but I have never had a desire to go back.  I will be back to the Huntington as soon as I can.

I could fill this post with pictures, but I will simply provide a few teasers:

For years (as an engineer) when I made fun of college students not doing any work or not studying anything of actual utility, I often used art students as an example.  Today I offer my apology.

My daughter is an illustration major at a college called Art Center in Pasadena, CA.  I don't know if this is usual for art schools or if it is just this one college, but these kids do an insane amount of work.  My wife and I both attended Ivy League schools and my son went to Amherst, all of which are high on rankings of top academic stress schools, but none of us ever worked like the kids at Art Center.  My daughter coasted to A's in one year at Rice University, which she would describe as a cake walk compared to art school.   Her art school features five 5-hour classes a week plus each class can and does issue up to 9 hours of homework a week.  Typical weekly assignment for 1 course:  draw 300 hands.

In addition to all of this there are mid-terms and finals.  Below is one project my daughter did for one course's final exam, a set of children's books put together from scratch with her own art.  This strikes me as an insane amount of work.

I will add that I have become reconciled to art school in other ways.  To some extent my daughter's false start going to a major university in a liberal arts program was a result of our family's expectations about college.   Our bias was that a liberal arts degree from a highly-ranked university was the path to success.  Art school was for slackers who ended up sleeping on the street in a refrigerator box.  But you know what?  Art school teaches a real craft and teaches it rigorously.  Can Yale say that about its gender studies program?

One caveat to this is that my daughter can write.  She went to a high school where all the assignments and exams were essay-based.   She can toss off a polished 5-paragraph essay in her sleep.   If this were not the case, I would worry about this one aspect of art school.  I consider writing (and remember, this comes from a mechanical and aerospace engineer) to be the most important core skill and an education that does not teach writing or provide a lot of writing practice is suspect in my mind.

Regulations to limit "fake news" will inevitably be used to limit criticism of the government and individual politicians.  Here is the latest example, from the WSJ

A foreign visitor became the first person convicted and sentenced to jail under a new law to punish those deemed to have published “fake news”after he criticized the police response to the slaying of a Palestinian engineer in Kuala Lumpur.

Salah Salem Saleh Sulaiman, 46 years old, a Danish national of Yemeni origins, pleaded guilty Monday at a court hearing. He was sentenced to a week in jail but opted to serve a  month behind bars in lieu of paying a fine of about $2,600. He wasn’t represented by a lawyer.

The case marked unexpected circumstances for the first use of the law since Parliament passed it April 3 amid criticism by rights groups that it would be wielded to inhibit criticism of the government ahead of elections on May 9. The government has denied that that is its intent, and Mr. Salah is the only person to have been charged under it.....

Mr. Salah appeared in a video posted to YouTube—and since removed—from the scene of the assassination of Palestinian Fadi al-Batsh, an electrical engineer and university lecturer who had lived in Malaysia for a decade. He was gunned down by two men on a motorcycle as he walked to dawn prayers at a mosque. No one has been arrested.

Mr. Salah accused medical services and police of being slow to respond to the shooting. Authorities vehemently rejected the allegations and arrested him. On Monday, he apologized and said he had recently arrived in Malaysia to visit friends and didn’t know the law existed.

The Federal government provides a $7500 tax incentive for the buyers of electric cars.  This is an attractive discount on a $100,000 Tesla Model S, but is a huge incentive for a $40,000-ish Tesla Model 3.  However, there is a sunset for this incentive.  It turns out it begins to phase out for a given company in the first quarter after that company sells its 200,000th eligible electric car (two quarters at $3750, two quarters at $1875, then zero).

By the end of the second quarter, Tesla will be approaching its 200,000th car.  The numbers will likely be close enough that Tesla could likely easily manage to move the date for this event either just before or just after the end of the quarter.  The obvious incentive for Tesla, if it is going to be this close, is to build inventory at the end of the quarter, but keep actual deliveries under 200,000, then go full speed ahead with deliveries in the third quarter to maximize the last of the full tax credit.  Randy Carlson has created a model that looks at the case of Tesla delivering its 200,000th car on June 30 vs, July 1 (ie 2nd quarter or just in the third quarter) and demonstrates that the additional tax incentives by pushing this even into July are as high as a half billion dollars!  His model is below.

From Engadget, on rental scooters in SF:

San Francisco is a city where companies frequently like to try out new ideas. Uber had its start here many years ago, as did success stories like Twitter and Airbnb. So it's no surprise that San Francisco happens to be one of many cities experiencing a new form of transportation: sharable electric scooters. They appeared in downtown SF seemingly out of nowhere, taking over sidewalks and pedestrian paths. But what was marketed as a low-cost, eco-friendly way to get around town soon became a public nuisance.

It all started in late March when three companies -- Bird, Spin and LimeBike -- unveiled their scooter-sharing solutions in San Francisco. All three work the same way: You unlock the scooter with an app, pay a nominal amount -- $1 to unlock and 15 cents a minute thereafter. When you're done, simply lock it with the app and it'll be ready for the next person to hop on.

Unlike docked bicycles, like the Ford GoBikes in San Francisco or New York City's Citi Bikes, you don't have to park them in designated spaces; they can be left anywhere. These scooters are then rounded up and collected every night for any necessary repairs or charging and then redistributed the next day.

In the meantime, though, they're often strewn aside carelessly, blocking the public right-of-way, thus making it especially difficult for wheelchairs and those with disabilities to move past them. Further, scooter riders are using them on the sidewalk, which is not only illegal but dangerous. I've personally had scooter riders zoom up past me, yelling "Watch out!" as they whizzed by. According to California state law, motorized scooters must be used in the bike lane or on the road. This means it's also against the law to ride them without a helmet and without a driver's license (therefore user must be 16 years or older).

So San Francisco is cracking down. Not only is the city working on legislating the scooters, but on April 16th, the city attorney sent cease-and-desist letters to all three companies to end operations until regulations are in place. The city also passed a law, demanding that all scooters have permits. Scooters found without permits will be subject to impoundment. San Francisco's Municipal Transportation Agency (SFMTA) hopes to open up the permitting process starting May 1st.

Via Don Boudreaux:

Greg Ip writes that “The U.S. runs a trade deficit because it consumes more than it produces while its trading partners, collectively, do the opposite” (“How the Tax Cut President Trump Loves Will Deepen Trade Deficits He Hates,” April 19).

Here is how I like to explain why this is wrong.  The trade deficit exists in large part because foreigners are more likely to consume the American-made goods and services they buy right here in the US, rather than take them back to their home country, while US consumers tend to bring foreign goods back to America to consume them.  Let me unpack this.

First, over any reasonable length of time, payments between countries are going to balance.  If this were not true, there would be some mattress in China that has trillions of dollar bills stuffed in it, and no reasonable person nowadays just lets money sit around lying fallow.  There are some payments between countries for each others' goods.   And there are some payments for each others' services.   And there are some payments for various investments.  All these ultimately balance, which makes fixating on just one part of this circular flow, the payments for physical goods, sort of insane.  If we have a trade "deficit" in physical goods, then we must have a trade surplus in services (which we do) and in investments (which we do) to balance things out.

But what do we mean by an investment surplus?  It means that, for example, folks from China are spending more money in the US for things like real estate and buildings and equipment -- either directly or through purchases of American equity and debt securities -- than US citizens are buying in China.  But note that another name for investment is just stuff that foreigners buy in this country that stays in this country and they don't take back home.  If a Chinese citizen buys a house in Los Angeles (something that apparently happens quite a bit), that is just as much "consumption" as when I buy a TV made in China.  But unlike my TV purchase (which counts as an import), because of the arbitrary way trade statistics are calculated, selling a Chinese citizen a house in LA does not count as an export because they keep and use the house here.  Let's say one Chinese person sells 10,000 TV's to Americans, and then uses the proceeds to build a multi-million dollar house in Hawaii.  This would show up as a huge trade deficit, but there is no asymmetry of consumption or production -- Chinese and American citizens involved in this example are producing and consuming the same amounts.  The same is true when the Chinese build a manufacturing plant here.  Or when then invest capital in a company like Tesla and it builds a manufacturing plant here.

Our bizarre fixation on the trade deficit number would imply that, if trade deficits are inherently bad, then we would be better off if the Chinese person who bought the house in LA dismantled it and then shipped the material back to China.  Then it would show up as an export.  Same with the factory -- if we fixated on reducing the trade deficit then we should prefer that the Chinese buy the equipment for their factory here but have it all shipped home and built in China rather than built here.   Is this really what you want?

I am willing to concede one exception -- when Chinese use trade proceeds to buy US government debt securities.   This is where my lack of formal economics training may lead me astray, but I would say that the US government is the one major American institution that is able to consume more than it produces.  Specifically, by running enormous deficits it is able to -- year in and year out -- allow people to consume more than they produce.  Trade proceeds from foreigners that buy this debt in some sense help subsidize this.

However, I don't think one can blame trade for this situation.  Government deficits are enabled by feckless politicians who pander to the electorate in order to be re-elected, a dynamic that has little to do with trade.  I suppose one could argue that by increasing the demand for government securities, foreigners are reducing the cost of debt and thus perhaps enabling more spending, though I am not sure politicians are at all price sensitive to interest rates when they run up debt -- as a minimum their demand curve is really, really steep.   There is a relation between government borrowing and trade but the relationship is reversed -- Increased borrowing will tend, all things being equal, to increase the value of the dollar which will in turn make imports cheaper and exports more expensive, perhaps increasing the trade deficit.

I have written about this before, but critics of all things capitalism are usually particularly critical of branding, arguing that building brands has no value except to somehow beguile customers into overpaying for things or buying things they do not need.  Now, I can be sympathetic to this when I see folks who have paid a fortune for certain fashion items (*cough* Louis Vuitton bags *cough*), but in generally branding actually has real consumer value.  One important value of branding is predictability.  McDonald's was traditionally a classic example of this -- walk into any McDonald's in the world and you will be pretty sure what will be on the menu and what it will taste like.

I wrote about this before when travelling in Europe.  I know that I like some orange juice brands and don't like others.  I know for sure I like Tropicana and so I buy that because I am confident I will get something I will like.  In Europe, I had no idea what to buy -- I might pay for something I would enjoy, but I might also find myself having paid for something I really did not like.

I was reading a travel blog and thought that this quote really represented the epitome of why brands matter

I’ve been to Hyatts all around the world within every brand of the chain’s portfolio, and I don’t recall ever staying at a property which was miscategorized. There’s no mistaking a Park Hyatt for a Hyatt Regency, or a Grand Hyatt for an Unbound Collection. When I pick a property within the Hyatt portfolio, my expectations are met and the experience is standardized around the world. Hyatt Houses and Hyatt Places are almost identical properties regardless of where in the world they pop up.

I cannot say the same for the expansive Marriott portfolio. Just last month I stayed at the JW Marriott Copacabana in Rio, and nothing about that property represented the other JW’s I’ve visited. Certainly not all generic Marriott hotels are created equally, and I’ve found a very large variation in property conditions, common spaces, room sizes and other factors at Marriotts.

For example, let’s look at Courtyard properties. Within the last year I’ve stayed at the Courtyard in Durham, North Carolina, which resembled an updated Super 8. Then, not two months later, I visited the Courtyard in LaGrange, Georgia, which was more akin to a full Marriott hotel branded property. Compare those two with the Courtyard Seoul Times Square, which has an executive lounge with a rooftop patio, and I don’t know what to expect when booking a Marriott property, even within a single brand.

(source)

“Once, in the last century, in the Cambria Iron Works at Johnstown, Pennsylvania, after working for months to build an unorthodox new machine for steel production, the engineer in charge, John Fritz, said at last, ‘All right boys, let’s start it up and see why it doesn’t work.’

I am always amazed that folks, say those in government in places like San Francisco, consistently support restricting the supply of new housing while subsidizing home buyers and then are surprised when prices and rents keeps rising.  From the Market Urbanism Report via Walter Olson.

But a look at the numbers shows that, on the contrary, housing construction (or lack thereof) seems to be the driving factor behind whether or not large U.S. metros remain affordable.

This would be the conclusion from 7 years of data from the Census Bureau, which publishes annual lists on the number of new privately-owned housing units authorized in each metro area. Between 2010 and 2016, when overall national housing permits ticked up each year following the recession, most major metros have issued housing permit numbers in the high 4- or low 5-figures annually. But three metros have stood far above the rest.

The Dallas-Fort Worth-Arlington MSA issued 273,853 housing permits over this 7-year period; New York-Newark-Jersey City issued 283,814; and Houston-The Woodlands-Sugar Land topped every metro with 316,639 permits. Combined, the 3 metros accounted for 13.5% of the nation’s approved housing units.

Other metros weren’t even close to these three....

These statistics are glaring, and show that the urban housing affordability crisis, and its solution, is far simpler than many pundits suspect. In their ongoing quest to satisfy their anti-growth biases, they’ve settled on demand-side responses (read: government subsidies) that ignore or worsen the fundamental problem of under-supply; while they continue to blame various third party boogeymen, including developers, landlords, Airbnb hosts, techies, hipsters, Asian families buying second homes, and migrants in general.

But, again, the Census data sheds light on the actual nature of the issue: some metros in America are building a LOT of housing. Other metros may think they are, but actually are not. And housing prices within given metros are either stabilizing or skyrocketing based on this decision.

When special prosecutor Ken Starr finally presented charges to Congress against Bill Clinton, it was for lying under oath about his sexual escapades with Monica Lewinsky.  Did someone really originally authorize Starr to look into this?  No, his original mission was to look into any criminal wrongdoing associated with the Clintons and the Whitewater Development Corporation from Clinton's days in Arkansas.  But he got nowhere with that, so like a typical prosecutor he looked for something else illegal so he could still score a "kill".

The other day, special prosecutor Mueller staged a very high-profile raid on President Trump's long-time attorney.  His original brief was to look into whether the Trump campaign conspired with Russians to win the election.  Readers will know I have always been skeptical of this.  I believe while the Russians were spinning propaganda about the election, its effects were incidental and likely not coordinated with Trump, though he may have benefited.  I think one could craft at least as strong a story about Clinton connections with the Russians as you can about Trump connections.

Anyway, the raid the other day made it clear that Mueller is getting no farther with Russia than Starr got with Whitewater.  He raided Trump's attorney's office (a pretty aggressive move) to get evidence of ... lying about details related to Trump's Stormy Daniels affair and perhaps for details about the famous Trump Access Hollywood tape.  While I am skeptical that there is much in the Russia story, I am more than willing to believe that there may be lying and fraud related to Trump's business and sex lives.

If history does not repeat itself, it certainly echoes.

Postscript:  When Republicans see the far Left slate of candidates the Dem's are likely to field for President in 2020, they are going to long for Bill Clinton.  Heck, I could list a lot of states that would happily run Clinton as their Republican candidate for Congress in 2018.

Nobody really liked Jeff Skilling of Enron and he sits in jail for 20 years.  We think Elizabeth Holmes is attractive and cool so that despite the fact that she committed serial fraud in lying about her company's technology and financials (far more baldly and egregiously than Skilling) and actually put people at risk through faulty medical testing, she got only a slap on the wrist.

And then there is Elon Musk.

The Economist used to be boring, but smart with a wicked dry wit. Now it’s just boring (sigh). Tesla will be profitable & cash flow+ in Q3 & Q4, so obv no need to raise money.

— Elon Musk (@elonmusk) April 13, 2018

I am not sure how I got in the role of fact-checking Elon Musk, but given the company's stated results to date and announced operating plans and strategies, there is simply no way for the Tesla to be profitable and cash flow positive in Q3, barring some deus ex machina like a massive energy credit or California subsidy windfall.  It's possible I could go in there and shut down R&D and model 3 production and milk the Model S and X for cash and might make this be true, but that is certainly not their announced business plan.  On their current path Tesla has to continue to burn cash through the rest of this year.  I am not even sure that if you stated their gross margin the same way that other automakers state their numbers that even it would be positive right now -- there is an argument to be made they are still losing money at the margin on every car they produce**.  I would add that in this point of their ramp, if you want to see Tesla the huge success that is baked into its current stock valuation, you don't want Tesla to be cash flow positive in the third quarter, you want it continuing to invest.   Amazon rules the world because it deferred profitability for years in favor of growth.

Tesla pretty much never ever lives up to Musk's promises, at least for the dates he promises them.  That is probably OK with things like deliveries of new products -- people understand he is pushing technology and new products can be delayed and they forgive entrepreneurs for being -- shall we say -- overly enthusiastic about such things.   But on financial stuff like this his statements are bordering on fraud.  But he'll never get called on it, because we like him in a way we didn't like Skilling.

I will add that if Musk wants to get snippy about the media's guesses about his company's prospects, and thinks we are all getting it wrong, he could sure be a lot more transparent about Tesla's financials and plans.  Go watch an Exxon-Mobil analyst presentation and compare it to Musk's quarterly arm-waving.  Also, one final memo to Musk:  responding to your critics on Twitter emulating Trump's style is not recommended.  Though it might be interesting to compare the irrational populist wave behind Trump with the populist wave behind Tesla.  Though the two Venn diagrams of supporters probably do not overlap much, the whole relationship feels similar to me.

Disclosure:  I have been short TSLA in the past but right now have no position.  To be honest, I am going to let Musk urge his fanboys to pump the stock a bit further before I short again.  The fanboy effect makes TSLA a dangerous short, as TSLA stock holders will defy reality for far longer than will holders of say GE or XOM.

** gross margin at TSLA is interesting because TSLA has no dealer network, something I like them for.  GM discounts its cars to their dealers (10% or so?) but in turn they offload a bunch of selling and support costs to the dealers.  In their gross margin, TSLA banks in their gross margin the extra 10% from not having to discount their cars but in turn does not charge gross margin for a lot of the extra sales and support costs they have to take on -- instead they drop these costs into SG&A overhead. The situation with gross margin is even more complicated because Tesla not only has to build out and operate its own warranty service, sales, and delivery network to replace traditional dealers, it is also building out its own fueling service to replace gas stations.  Here is one guy who thinks Tesla gross margin is really negative.  I have zero idea who he is but for the last year his predictions about Tesla have been a lot more reliable than Musk's statements.

Can you imagine the insult to Maryland businesses that $5 billion of their hard-earned money as they struggle to make their businesses work is going to be just handed over to another business because that business creates better press releases for politicians?

In one of the most aggressive attempts to cajole Amazon into selecting their state as the location for the e-commerce giant's second headquarters, the Maryland General Assembly just passed a bill offering the company a $5 billion incentive package should Amazon choose to settle in Maryland's Montgomery County.

Montgomery County is competing with Washington DC, Northern Virginia and 17 other areas that made Amazon's HQ2 "short list", which was released earlier this year. Specifically, Amazon is eyeing the site of the former White Flint Mall.

The "Promoting ext-Raordinary Innovation in Maryland’s Economy," or PRIME (yes that misplaced capitalization was intentional) would require Amazon to create at least 40,000 qualified jobs (with an average comp of at least $100,000). The company would also need to spend $4.5 billion on "eligible costs" like capital projects, the Baltimore Business Journal reported.

I almost titled this article "go full fascist" but the f-word is so used and abused in public discourse that I now try to avoid it.  Presented largely without comment because I would have assumed five years ago that any thinking person in this country would understand why this was a bad idea.  State law proposed by California Senator Richard Pen, SB 1424

Existing law prohibits a person, among others, from making or disseminating in any advertising device, or in any manner or means whatever, including over the Internet, any statement concerning real or personal property or services that is untrue or misleading, as specified.

This bill would require any person who operates a social media, as defined, Internet Web site with a physical presence in California to develop a strategic plan to verify news stories shared on its Web site. The bill would require the plan to include, among other things, a plan to mitigate the spread of false information through news stories, the utilization of fact-checkers to verify news stories, providing outreach to social media users, and placing a warning on a news story containing false information.

Because having the government decide what is and is not true, and what can and cannot be criticized, always works out so well.

Update:  This seems relevant, from China (bold added).  This is what happens when the state "fact-checks" social media:

When does a corporate apology become a political self-confession, or jiantao (检讨), an act of submission not to social mores and concerns, but to those in power? The line can certainly blur in China. But the public apology today from Zhang Yiming (张一鸣), the founder and CEO of one of China’s leading tech-based news and information platforms, crosses deep into the territory of political abjection.

Zhang’s apology, posted to WeChat at around 4 AM Beijing time, addressed recent criticism aired through the state-run China Central Television and other official media of Jinri Toutiao, or “Toutiao” — a platform for content creation and aggregation that makes use of algorithms to customize user experience. Critical official coverage of alleged content violations on the platform was followed by a notice on April 4 from the State Administration of Press, Publication, Radio, Film, and Television (SAPPRFT), in which the agency said Toutiao and another service providing live-streaming, Kuaishou, would be subject to “rectification measures.”

Read through Zhang’s apology and it is quickly apparent that this is a mea culpa made under extreme political pressure, in which Zhang, an engineer by background, ticks the necessary ideological boxes to signal his intention to fall into line.

At one point, Zhang confesses that the “deep-level causes” of the problems at Toutiao included “a weak [understanding and implementation of] the “four consciousnesses”. This is a unique Xi Jinping buzzword, introduced in January 2016, that refers to 1) “political consciousness” (政治意识), namely primary consideration of political priorities when addressing issues, 2) consciousness of the overall situation (大局意识), or of the overarching priorities of the Party and government, 3) “core consciousness” (核心意识), meaning to follow and protect Xi Jinping as the leadership “core,” and 4) “integrity consciousness” (看齐意识), referring to the need to fall in line with the Party. Next, Zhang mentions the service’s failure to respect “socialist core values,” and its “deviation from public opinion guidance” — this latter term being a Party buzzword (dating back to the 1989 crackdown on the Tiananmen Square protests) synonymous with information and press controls as a means of maintaining Party dominance.

Zhang also explicitly references Xi Jinping’s notion of the “New Era,” and writes: “All along, we have placed excessive emphasis on the role of technology, and we have not acknowledged that technology must be led by the socialist core value system, broadcasting positive energy, suiting the demands of the era, and respecting common convention.”

In the list of the company’s remedies, there is even a mention of the need to promote more content from “authoritative media,” a codeword for Party-controlled media, which suggests once again that the leadership has been unhappy with the idea of algorithms that wall users off from official messaging if they show no interest in such content.

 

 

I have a small bit of experience with Congressional hearings (I have been a witness at two) so I wanted to answer a question asked at Engadget after the Facebook hearings:

Throughout the hearings, Congressional leaders repeated questions that had already been asked. We heard them ask again and again whether the company would work with Congress on legislation that would impose regulations on social networks like Facebook and others. We also heard many leaders ask when exactly Facebook learned that Cambridge Analytica had improperly obtained user data. This repetition continued with questions about changes to policy, Facebook's dense terms of service and whether users have been notified if their data were purchased by Cambridge Analytica. If time was so precious to these individuals -- and it should be, four minutes flies by and this is an important topic -- wouldn't they try to avoid repeating the same questions ad nauseam?

I have two answers for this

1. Congresspersons don't really care what the answer is to these questions.  OK, they may care a little, but probably only a little because they seldom leave any time for answers after they are done with their public posturing.  What they really care about is that their constituents back home see that they CARE and are DOING SOMETHING about a timely issue of concern to ordinary people.  Representative Loony is playing to his local media in East Random, WV.  The Representative from East Random doesn't care if four other Representatives have asked the same hard-hitting question.  Those other repetitions are not going to show up on the local news in East Random.  What is going to show up is Representative Loony asking the question.  He will look like he CARES and like he is DOING SOMETHING.  He is likely not really concerned that he is mocked in the Washington Post for wasting his questioning time, because no one who is going to vote for him in East Random reads the Washington Post anyway.
2. Many (but not all) Congresspersons are not that bright.  I remember sitting in the committee hearing listening to the questions they were asking me and the other folks testifying and thinking, "how did these folks get here?"  I decided the only common denominator had to be pure will.  Because they were not all smart, not all charismatic -- not even as a group particularly impressive**.   Anyway, whether bright or not, most do not really understand technology and related issues.  And so their staffers write their questions for them.  And if someone else asks the questions first?  Some have the ability to improvise but I can tell you for a fact that for some, all they can do is just proceed and read the questions their staffers gave them.

** Postscript:  Ayn Rand used to write that everyone assumes that people in power got that way by beating out everyone else, such that they must be excellent at something.  Rand always said this was false, that people in power were the zero where conflicting forces cancelled out.  Their being in power (vs. someone else being there) was a happenstance due to external factors and having little to do with that particular individual.  I never really understood this the first few times I read it but in modern times I am starting to understand it better.  Donald Trump strikes me as following Wesley Mouch's career arc.

I just finished watching the PBS series on the Vietnam War and found the experience powerful and educational.  My only disappointment was that every soldier they interviewed and followed through the war ended up in the anti-war movement (or in the case of one POW, his wife did).  I agree with their perspective, and see the whole war as a giant waste, but unlike most people on campus nowadays, I like hearing from people with points of view that are different than mine.  I get nervous just having my expectations reinforced.  Surely there are veterans who thought the war was winnable and the US largely honorable -- I know some of these folks -- but we really do not get to hear their voices very often.   But with this proviso, the series was terrific.

One of the most important -- and hardest -- lessons of business is to think at the margin.  Perhaps the toughest corollary to this is: Sunk costs are sunk.  I don't care how much we have already spent on that factory -- that money is gone -- if it is going to take another $100 million to finish, are the benefits of the factory worth that $100 million? If not let's stop work on it no matter how much has already been spent.   I have worked to teach this to my wife.  I don't care how much the tickets for the show on Sunday night cost -- that money is gone -- isthe enjoyment we expect to get from the show worth the remaining costs we face (getting in the car, fighting for parking, etc)?

Transit projects thrive on the sunk cost fallacy.  Agencies explicitly try to get some money, spend it, and then claim the rest of the money has to be spent because we have already "invested so much".  Here is an example:

But what is really amazing is that Chicago embarked on building a $320 million downtown station for the project without even a plan for the rest of the line -- no design, no route, no land acquisition, no appropriation, no cost estimate, nothing.  There are currently tracks running near the station to the airport, but there are no passing sidings on these tracks, making it impossible for express and local trains to share the same track.  The express service idea would either require an extensive rebuilding of the entire current line using signaling and switching technologies that may not (according to Daley himself) even exist, or it requires an entirely new line cut through some of the densest urban environments in the country.  Even this critical decision on basic approach was not made before they started construction on the station, and in fact still has not been made.

Though the article does not mention it, this strikes me as a typical commuter rail strategy -- make some kind of toe-in-the-water investment on a less-than-critical-mass part of the system, and then use that as leverage with voters to approve funding so that the original investment will not be orphaned.

It amazes me that no politician in California has shut down the insane California high speed rail project, but I will bet you any amount of money that when they do the rail agency will be screaming that it can't be shut down because they have already spent billions of dollars and shutting them down would waste all that money.  Sorry, but that money has already been wasted, the point is to avoid all the additional money that will be wasted going forward.

The government decision-making around the Vietnam War seemed like nothing so much as a series of sunk cost fallacies.  We can't give up now, not after so many brave men have already died!  That last sentence could be the title of about half the episodes.   But sunk costs shouldn't matter in a go-forward decision -- but they do matter to ego and prestige.  Politicians talk about things like "the nation's honor" but what really matters at its heart is their own ego and perception.  Abandoning sunk costs, for the real humans making decisions (whether Presidents or CEOs) is about confessing past errors of judgment.  Its a hard thing to do, so hard a lot of extra people had to die in Vietnam before it could happen.  I can't find a transcript but Kissinger had some amazing quotes in Episode 9 that pretty baldly outline this problem.

One of my odd niche interests is that I am fascinated by the Panama Canal and its construction.  I probably have read 10 books on the topic.  My kids know never to ask anything remotely about it because they will get a 1-hour lecture.

So here is your fun fact that all but other canal aficionados will find surprising:  The Atlantic entrance to the Panama Canal is west of the Pacific entrance.  The canal actually runs largely north-south rather than east-west as we imagine.

The other thing most people have wrong in their minds when they think about the canal is that they picture ships traveling through a narrow excavation.  Pictures of boats are almost always at the locks or at the Culebra Cut.  But for most of the route the sort of median view is of a ship sailing across a peaceful lake in the middle of a rain forest.  The canal was made by damming two rivers and creating two lakes (one of them enormous) that spread out to cover most of the isthmus.  The digging was then to connect the two lakes through the spine of the country (the Culebra cut) and to build flights of locks at each end up and down from the lakes.  Thinking of the canal as a bridge over the land rather than a cut is a more accurate picture.  This design solved the twin problems of too much digging (we'd still probably be digging in the Culebra Cut if people had insisted on make the canal at sea level, a vision that was surprisingly hard to get past) and the Chagres River which could become an incredible torrent in the rainy season and flood out everything in its path.

Much of Phoenix is generally pretty flat but at the same time we have peaks rising from right in the middle of the city to as high as 1400 feet above the mean ground level of the surrounding city (we are also ringed my mountains around at least three sides of the city, which is why we call ourselves the valley of the sun).  Anyway, here is a view from Camelback Mountain taken just the other day, probably the last day under 75 degrees we will have for 6 months.  This is a 360 degree panorama (you can see the same dude with bright yellow shirt on both ends).  You can click on it to get the full effect.

We took the Echo Canyon trail which is pretty challenging (there are several long stretches where one is basically climbing from rock to rock rather than just marching up a trail).  It is worth it though - it's pretty unusual to have this sort of climb and end up dead in the middle of a major city.  The one block of undeveloped space at the right end of the picture is actually prime real estate and would be all city-fied were it not for the fact that it is Native American tribal land, one of the fortunate tribes (unlike the Navajo) who were shoved onto cr*p land but land which eventually ended up near a major city and so became valuable.

Ironically, while most cities don't have any feature like this, we have at least two:  Not even 5 miles away is Piestewa Peak that is just a few feet shorter, has an easier trail, and oddly has a totally different geology (you can see it just to the left of center in this photo).  Piestewa Peak used to be known as, and is still referred to by locals, as Squaw Peak -- a name that has been officially deprecated for moderately obvious reasons of wokeness.  The city struggled for years with changing its name, not knowing what to change the name to, when opportunity emerged out of tragedy when a young, local Native American woman serving in the US Army was killed in the Middle East.  Piestewa Peak is surrounded by a large tract of open space that is hilly and largely pristine desert landscape (around the center of the photo).  It is so large that one hike in it and, despite it being right in the center of the city, one can completely lose sight of the city in all directions and really get a desert hiking experience without actually going out of town.

Nearly 8 years ago (can it be so long?) I wrote a series of articles about what I called the electric vehicle mileage fraud at the EPA.  Rather than adopt sensible rules for giving electric vehicles an equivalent mpg rating, they used a horrible unscientific methodology that inflated the metric by a factor of three (in part by ignoring the second law of thermodynamics).  All the details are still online here.  I am not omniscient so I don't know people's true motivations but one is suspicious that the Obama administration wanted to promote electric vehicles and put their thumb on the scale of this metric (especially since the EPA in the Clinton Administration has already crafted a much better methodology).  To be fair, smart people screw this up all the time -- even Eric Schmidt screwed it up.

Take for example the Tesla model 3, which has been awarded an eye-popping eMPG of between 120 and 131.   Multiplying these figures by .365 (as described in my linked article) gets us the true comparative figure of 44 to 48.  This means that in terms of total energy consumption in the system, the Tesla is likely better than most gasoline-powered vehicles sold but less energy efficient than top hybrids (the Prius is listed as 53-58 mpg).  At the end of the day, electric cars feel cheaper to fuel in part because they are efficient, but perhaps more because there is no little dial with rotating dollar numbers on the electric cables one attaches to charge them  (also, there are still places where one can skim electricity for charging without paying).

Basically, I have been a voice in the wilderness on this, but I just saw this note on the Tesla Model 3 and its operating costs from Anton Wahlman writing at Seeking Alpha

there are attractive and spacious hatchbacks yielding at least 55 MPG for under $25,000, without taxpayer funding needed. Just to be conservative and give the opposite side of the argument the benefit of the doubt, I’ll refer to these as 50 MPG cars, even though they perform a little better. Rounding down is sufficient for this exercise, as you will see below....

To find out [the price to charge a Tesla], you can go to Tesla’s Supercharger price list, which is available online: Supercharging.

As you can see in the table above, the average is close to the $0.24 per kWh mark. So how far does that $0.24 take you?

The Tesla Model 3 is rated at 26 kWh per 100 miles according to the U.S. Department of Energy: 2018 Tesla Model 3 Long Range.

In other words, almost four miles per kWh. It’s close enough that we can round it up to four miles, just to give Tesla some margin in its favor. That squares with the general rule of thumb in the EV world: A smaller energy-efficient EV will yield around 4 miles per kWh, whereas a larger EV will yield around 3 miles per kWh.

That means that at $0.24 per kWh, the Tesla Model 3 costs $0.06 per mile to drive.

How does that compare to the gasoline cars? At 50 MPG and today’s nationwide average gasoline price of $2.65, that’s $0.05 per mile. In other words, it’s cheaper to drive the gasoline car than the Tesla Model 3.

This result that the Tesla is slightly more expensive to fuel than the top hybrids is exactly what we would expect IF the EPA used the correct methodology for its eMPG.  However, if you depended on the EPA's current eMPG ratings, this would come as an enormous shock to you.

Electric vehicles have other issues, the main one being limited range combined with long refueling times.  But there are some reasons to make the switch even if they are not more efficient.

1. They are really fun to drive.  Quiet and incredibly zippy.
2. From a macro perspective, they are the easiest approach to shifting fuel.  It may be easier to deploy natural gas to cars via electricity, and certainly EV's are the only way to deploy wind or solar to transportation.