Coyote Blog

This summer I had the cover story in Regulation Magazine with my article "How Labor Regulation Harms Unskilled Workers:  As government expands regulation of employers, they will increasingly turn to fewer, higher-skilled workers and automation."  (pdf here).  The article was not an academic project, but based on my own experience as a business owner who employs hundreds of workers in unskilled positions.  The premise is that many labor regulations -- not just the minimum wage -- have the perverse effect of making it harder to employ unskilled labor while simultaneously providing incentives to shift hiring from unskilled labor to folks with college degrees, even for unskilled positions.

Because it was not an academic research project, I did not spend a lot of time researching labor statistics, but I can't resist posting this analysis which appeared on Seeking Alpha:

As the economy has grown, employment numbers for unskilled labor have flatlined, never recovering from the last recession.  As I observed:

Fifteen years ago I started my current service business. I love my company and my employees. But if I had it all to do over again, I would never start a business based on employing unskilled labor.  The government makes it too difficult, in far too many ways, to try to make a living employing unskilled workers. Given a new start, I would find a business with a few high-skill employees creating a lot of value.

And I don’t think I’m alone. In the 1950s, 1960s, and 1970s, there was a wave of successful large businesses built on unskilled labor (e.g., ServiceMaster, Walmart, McDonalds). Today, investment capital and innovation attention is all going to companies that create large revenues per employee with workers who have college educations and advanced skills. Only 4% of the employees at Apple, for example, have less than a college degree.
Even in large service-sector companies that employ unskilled labor, much of their investment today is in finding ways to reduce their reliance on that labor. I remember a number of years ago when the Chili’s restaurant chain started putting little electronic displays on their tables. At first the displays just showed advertising and I thought they were an annoying waste of space. But over time the chain began using the devices first to accept payment for one’s food and more recently to take food orders. They are progressively eliminating the need for most of their wait-staff. Every major restaurant chain is doing the same thing: investing in technology to eliminate unskilled workers. Why bother trying to figure out how to serve a rapidly evolving customer demand with workers who are limited by government in a hundred different ways in how and when they can labor? A website or iPad never sleeps, never sues, never needs a lunch break (let alone documentation of that break), never has to have overtime, and doesn’t have its labor taxed.

Just to save everyone from sending this to me, Elon Musk has been sued by the SEC.  The details are here, I will not go over all this old ground.  Of course this is just an accusation, and has no immediate effect (except to trash the stock price) until it is settled or proven in court.

I have such mixed feelings for Musk. On one level, it is awesome to see an entrepreneur trying to do build real stuff like rockets and cars. He has all the geeky charm of a 1970's edition of Popular Mechanics, breathlessly hyping captivating but sometimes impractical ideas.  I rode with an acquaintance in his $100,000 Tesla the other day and he loved it. Totally drank the Kool Aid.  Despite my extreme skepticism, he was sure that Elon was going to have same-day body shop repairs for Teslas and could make it work because they only had 3 models of cars with lots of shared parts.  It's the same sort of enthusiasm you see from people who still stand in line first day for the new iPhones. I envy being able to create that as a company.

On the other hand, Musk is just so unsuited to running a public company, is awful at operations, and will end up having cheated a lot of people.  He fails to meet commitments and makes public statements that are transparently absurd.  Just as one example, the other day in response to many delivery problems Tesla has (delivery problems that may actually be due more to efforts to shift 4Q sales into 3Q), Musk said there was a shortage of car delivery trucks and Tesla was starting to build them.  Seriously??? There is zero evidence of a delivery truck shortage and it is absurd to think Tesla had the time or the resources or the skills or knowledge to bang out large truck trailers (that require a variety of DOT inspections and approvals).  Honestly, I can't tell if Musk is the pointy-haired boss from Dilbert who promises absurd things because he is utterly clueless, or if Musk is totally corrupt -- it could be both.  I think his body shop insourcing idea was likely clueless but his SolarCity acquisition was corrupt.

New entries from Jaguar, Audi, and others demonstrate both that Tesla faces a lot of new competition but also that Tesla's original Model S and X still have a lead over competitors.  When the book on the electric car industry is written, I think it will be said that Tesla greatly accelerated the transition to electric cars.  But it is a fact of business history that the pioneer and innovator seldom is the ultimate victor (Lycos, Netscape, Altair, Yahoo, etc).  Tesla has not lost yet, but it still has a huge hill to climb.  Unfortunately, Musk's decisions to do so many things in-house -- own the dealer network, own the fueling network, own the manufacturing, own the body shops, etc. -- is going to require too much capital.

It is pretty clear that Musk is often using Apple as one of his models for what he wants to do with Tesla, and he has successfully created the same kind of almost cultish loyalty as has Apple.  But he ignored a lot of what Apple did.  Apple is a research, software, and design house.  It farms out manufacturing to a partner and sold most of its ipods and iphones initially through third party retailers.  If Tesla had done the same: taking advantage of rich third parties who already know how to sell cars as dealers; working with a consortium to create the fueling network; and going to someone like Kia to do private label manufacturing of the cars -- they might have lost something of the customer magic in the process but they also might be in a much better position to survive.

Update:  Apparently Musk was offered a very, very attractive settlement by the SEC which involved Musk stepping down as Chairman but NOT as CEO, adding a couple new directors, and paying a fine.  It is hard to read this as much more than a slap on the wrist, especially in the context of the SEC now seeking a full bar of Musk from any position at any publicly traded company (hell hath no fury like a government agency scorned).  Frankly, I find this nearly as impossible to understand as the fact that Tesla never raised any equity funding this year when its stock and story were so strong.  Tesla skeptics are arguing that both of these hard-to-explain events stem from the same cause -- that Tesla has some deep dark secret that Musk can't afford for either a new executive or a public offering document to disclose, the same secret (the story goes) that has driven away a number of senior accounting and finance officers in the last several months.  I agree that the existence of such a secret would explain the facts, but I can't imagine what could be much worse than the bad balance sheet and operational data that already is publicly known.

Via attorney Michael Avenatti, Julie Swetnick has accused Brent Kavanaugh of running a suburban high school rape ring -- over the course of at least 10 parties the punch was doctored and boys lined up outside of bedrooms to gang rape drunk and drugged girls.  According to the accuser, Kavanaugh and his friends raped their way through the Washington suburbs like the Russian Army did throughout the suburbs of Berlin.  All without one single person raising the hue and cry for over 35 years.

It is not even necessary to opine on the veracity of this accusation, because it almost does not matter.  Because the fact of its being made has, no matter what the outcome, proved America to be a far worse place than we woke up believing this morning.  If the accuser is being truthful, then gang rape is a fact of life in our high schools, and everyone is powerless or no one cares to lift a hand to prevent it or stop it -- made all the worse by the leadership of boys who would become future leaders of this country.  And if she is lying, then we see someone shamelessly lying to destroy a man in the name of politics, aided and abetted and enabled by many of the top politicians in this country and perhaps a third of its citizenry.  We are either living in a brutal post-apocalyptic misogynist free-for-all or in a political system corrupted to its very foundation.

Actually, from what I read on Twitter, we are actually living in a superposition of these two, a Schrodinger's nightmare where both are considered true simultaneously by half the population.

This is the, uh, whateverth installment in a series on using your common sense to fact check data, even when the data is tantalizingly useful for the point one is trying to make.

For the last decade or so, global warming activists have used major fires as further "proof" that there is a global warming trend.  Often these analyses are flawed, for a variety of reasons that will be familiar to readers, e.g.

• A single bad fire is just one data point and does not prove a trend, you need a series of data to prove a trend
• There is no upward trend in US acreage in fires over the last 10 years, but there is in the last 20 years, which gives lots of nice opportunities for cherry-picking on both sides
• Acres burned is a TERRIBLE measure of global warming, because it is trying to draw global trends from a tiny fraction of the world land mass (western US); and because it is dependent on many non-climate variables such as forest management policies and firefighting policy.
• The better more direct metric of possible warming harm is drought, such as the Palmer drought severity index, which shows no trend (click to enlarge below)

• An even better metric, of course, is that there IS an actual upward trend in temperatures.  There is not, however, much of an upward trend in bad weather like drought, hurricanes, or tornadoes.  In this context fire is a third order variable (temp--->drought---> fire) which makes it a bad proxy, particularly when the first order variable is telling the tale.

AAAAaaaand then, there is this chart, much loved by skeptics, for long-term US fire history:

I am pretty sure that I have avoided ever using this piece of skeptic catnip (though I could be wrong, I can have moments of weakness).  The reason is that nothing about this chart passes the smell test.  While it is true that the 1930's were super hot and dry, likely hotter in the US than it has been this decade, there is absolutely no reason to believe the entire period of 1926-1952 were so much higher than today.  Was there a different fire management policy (e.g. did they just let all fires burn themselves out)?  Was there a change in how the data was recorded?

Here is my rule of thumb -- when you see a discontinuity like this (e.g. before and after 1955) you better have a good explanation and understanding of the discontinuity.  This is not just to be a good person and be true to good scientific process (though we all should) but also from the practical and selfish desire to avoid having someone come along who DOES know why the discontinuity exists and embarrass you for your naivete.

I have never trusted this chart, because I have not really understood it.  This week, the Antiplanner (who before he focused on transit focused most of his writing on the Forest Service and forest policy) has an explanation.

The story begins in 1908, when Congress passed the Forest Fires Emergency Funds Act, authorizing the Forest Service to use whatever funds were available from any part of its budget to put out wildfires, with the promise that Congress would reimburse those funds. As far as I know, this is the only time any democratically elected government has given a blank check to any government agency; even in wartime, the Defense Department has to live within a budget set by Congress.

This law was tested just two years later with the Big Burn of 1910, which killed 87 people as it burned 3 million acres in the northern Rocky Mountains. Congress reimbursed the funds the Forest Service spent trying (with little success) to put out the fires, but — more important — a whole generation of Forest Service leaders learned from this fire that all forest fires were bad....

This led to a conflict over the science of fire that is well documented in a 1962 book titled Fire and Water: Scientific Heresy in the Forest Service. Owners of southern pine forests believed that they needed to burn the underbrush in their forests every few years or the brush would build up, creating the fuels for uncontrollable wildfires. But the mulish Forest Service insisted that all fires were bad, so it refused to fund fire protection districts in any state that allowed prescribed burning.

The Forest Service’s stubborn attitude may have come about because most national forests were in the West, where fuel build-up was slower and in many forests didn’t lead to serious wildfire problems. But it was also a public relations problem: after convincing Congress that fire was so threatening that it deserved a blank check, the Forest Service didn’t want to dilute the message by setting fires itself.

When a state refused to ban prescribed fire, the Forest Service responded by counting all fires in that state, prescribed or wild, as wildfires. Many southern landowners believed they needed to burn their forests every four or five years, so perhaps 20 percent of forests would be burned each year, compared with less than 1 percent of forests burned through actual wildfires. Thus, counting the prescribed fires greatly inflated the total number of acres burned.

The Forest Service reluctantly and with little publicity began to reverse its anti-prescribed-fire policy in the late 1930s. After the war, the agency publicly agreed to provide fire funding to states that allowed prescribed burning. As southern states joined the cooperative program one by one, the Forest Service stopped counting prescribed burns in those states as wildfires. This explains the steady decline in acres burned from about 1946 to 1956.

There were some big fires in the West in the 1930s that were not prescribed fires. I’m pretty sure that if someone made a chart like the one shown above for just the eleven contiguous western states, it would still show a lot more acres burned in real wildfires in the 1930s than any decade since — though not by as big a margin as when southern prescribed fires are counted. The above chart should not be used to show that fires were worse in the 1930s than today, however, because it is based on a lie derived from the Forest Service’s long refusal to accept the science behind prescribed burning.

There you go, the discontinuity seems to be from a change in the way the measurement is calculated.

By the way, I work closely with the Forest Service every day and mostly this partnership is rewarding.  But I can tell you that the blank check still exists for fire suppression costs and results in exactly the sort of inefficient spending that you would imagine.   Every summer, much Forest Service work comes to a halt as nearly every manager and professional gets temporarily assigned to fire -- something FS employees love because they get out of the grind of their day job and essentially get to go camping.

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

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

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

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

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

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

Internet, 2009

Internet 2018:

The news came out the other day that Porsche will stop making diesel-engine cars.  This is the beginning of the end of significant diesel car production in Europe, and is the ultimate proof that the diesel engine is a dead-end technology choice for Europeans concerned with the environment.

The story is a long one and I will leave you with some links in a moment, but the basic story flow is:

• European governments are concerned about CO2 production, want to "do something"
• European car-makers have a lead over the rest of the world in diesel technology, urge governments to choose diesel as the technology of the future, since at the time it was more efficient than gasoline engines.
• European governments, hot to "do something" and also keen to do it in a way that seems to advantage domestic producers in the high profile automobile trade, promote diesel in a number of ways (including lowering taxes on diesel fuel and diesel car purchases).
• As Europeans adopt diesel, problems emerge as air quality degrades -- diesels may be more efficient, but have a number of harmful emissions that are far worse than with gasoline engines.  There are tests and standards for these emissions but it is discovered that most manufacturers are cheating on emissions tests.
• Too late, it is realized that other technologies (electric hybrids, all electric) are pushing well past diesel in terms of efficiency.  Diesel is a dead-end in terms of CO2 reduction, and increases harmful emissions.
• Emissions tests are tightened, but it is clear manufacturers cheated because they do not have the technology to produce cars people will buy that meet the standards.  Companies like Porsche start to exit the business.

One of the best articles I have found about this history is actually at Vox, that bastion of free market economics and government non-interventionism.

The failure here is entirely predictable and is subsumed in the general criticism of "government picking winners."  As with many such failures, they boil down to information and incentives.  In terms of information, folks in government have no idea of the range of technology choices now and in the future, and how these technology choices might or might not make sense in a broad range of applications.  In terms of incentives, government officials usually have very different true incentives from their publicly stated ones (in this case CO2 reduction).  In the US, the Feds continue to support insanely stupid ethanol subsidies and mandates in part because the first Presidential primary is in corn state Iowa.  In Europe, it may well have been that officials were more ready to support diesel, which Europeans were good at, over hybrids, which Asian companies were good at, no matter what the relative merits were.

If you think that is cynical, even the folks at Vox noticed:

At the time, there were lots of different paths Europe's automakers could have taken to green itself. They could've pursued direct injection technology for gasoline vehicles, making those engines more fuel-efficient. They could've ramped up development of hybrid-electric cars, as Toyota was doing in Japan. But European companies like Peugeot and Volkswagen and BMW had already been making big investments in diesel, and they wanted a climate policy that would help those bets to pay off.

Europe's policymakers obliged. The EU agreed to a voluntary CO2 target for vehicles that was largely in line with what diesel technology could meet. As researcher Sarah Keay-Bright later noted, these standards were crafted so as not to force Europe's automakers to develop hybrids, electric vehicles, or other advanced powertrains.

The result?

Although overall pollution in Europe has gone down over time, diesel vehicle emissions remain stubbornly high. Today, Paris sometimes has smoggy days comparable to those in Beijing. London is struggling with unhealthy levels of nitrogen dioxide. Germany, Austria, and Ireland have NOx pollution well above the legal limits, with vehicles accounting for roughly 40 percent of that output.

The health toll is likely considerable. One recent study estimated that diesel pollution from cars, buses, and trucks in Britain caused 9,400 premature deaths in 2010 alone. It's difficult to pinpoint what fraction of those deaths might have been avoided if emission rules on cars had been strictly enforced all along, but that gives a sense of the stakes.

Even Vox is willing to call for some technocratic humility:

Which brings us to the third takeaway. The future is hard to predict. Diesel cars seemed like a reasonable idea in the 1990s and a disaster today. That suggests that policymakers should have a lot more humility when crafting energy policy. Maybe battery-electric cars will win out, or maybe it'll be hydrogen, or maybe it'll be something else entirely. (Heck, perhaps diesel cars that are genuinely clean could play a role in reducing CO2 emissions.) No one knows for sure.

So one approach here might be to pursue technology-neutral policies focused on preferred outcomes — say, tightly enforced standards that require lower emissions — rather than favoring specific industries and technologies just because they happen to seem promising at that moment in time.

This conundrum is likely to come up again and again. For years, governments have been laying down big bets on emerging clean energy technologies. France did it with nuclear power in the 1970s and '80s. Germany did it with wind and solar power in the 2000s, through feed-in tariffs. The United States has done it with corn ethanol in the past decade.

Done right, this sort of government support can be valuable, helping useful new energy options break into the mainstream against entrenched competition. But there's also a huge risk that governments will end up gambling on badly flawed technologies that then becomethe entrenched competition — and prove impossible to get rid of. The US arguably made that mistake with ethanol, which has had unintended ripple effects on the food supply and deforestation that are proving politically difficult to untangle. The drive for diesel looks like it belongs in that category, too. It's not a story we'd like to keep repeating.

Thus we get to my plan, which eliminates all these political interventions in favor of a revenue-neutral carbon tax.

A couple of readers pointed out a major flaw in this article about solar and saved me a world of headaches.  Thanks!  I may still do the solar installation in our still near-zirp regime but if I do so I will be more informed.  If ever you think I am making a mistake or making a fool of myself, please let me know.

The reduction in world poverty.

The global population living in extreme poverty has fallen below 750 million for the first time since the World Bank began collecting global statistics in 1990, a decline of more than 1 billion people in the past 25 years.

In a report released Wednesday, the World Bank said the extreme poverty rate had dropped to 10% as of 2015, the latest comprehensive data, and they estimate that the decline has continued over the past three years....

The report highlights the extent to which global poverty has shifted geographically. In 1990, nearly 1 billion of those living in extreme poverty were in East Asia, but decades of rapid economic development in China and other East Asian economies has brought that figure down to 47 million, a decline to a 2% poverty rate from 62%.

South Asia, with most of its population in India, Pakistan and Bangladesh, has seen the number living in extreme poverty fall to 216 million from more than 500 million, to 12% from 47%.

Sub-Saharan Africa has made less progress. Its poverty rate has fallen to 41% from 54% since 1990, but population growth has been so rapid that the number of people in extreme poverty has climbed above 400 million, from 278 million in 1990.

A few months ago I wrote:

I was among those who has opposed forced institutionalization.  The practice used to be rife with abuse, and when it was really being challenged in the 1970's it was with recent knowledge of how institutionalization for supposed mental health issues had been used in the Soviet Union as a tool against dissent.  And in a world where political partisans still routinely assign negative mental health diagnoses to their political enemies and have even suggested using mental health diagnosis-from-a-distance to unseat the current President, there is still a lot of possibility for abuse.  But seeing that most of those who would have been in state mental hospitals are now in prison or living (and dying) on the streets, I am open to having made a mistake.   I am still not sure, though, who advocates for such people who are without friends and family and would help guard against their abuse.

I understand that the general media explanation of homelessness is to blame it on the cold heart of whoever was the last Republican President in office, but it is hard for me to correlate national policy with trends in homelessness.  I am maybe 70% convinced that the closing of mental health facilities in the 70's and 80's across most cities and states was the main cause, a hypothesis born out by the high rates of mental illness recorded in most homeless populations.  This is why I think so much government spending for the homeless is wasted -- it all focuses on creating homes, I guess just because of our word choice of "homeless".  If we called them the mentally ill, or perhaps "helpless" rather than "homeless" we might investigate other approaches.

I see a number of sources nowadays trying to pin these closures entirely on tight-fisted Republican governors, and I am sure this is partly true.  But this misses an important element -- that civil libertarians had real issues with both the conduct of these institutions (e.g. One Flew Over The Cuckoo's Nest) and the fairness of the forced-institutionalization process.  Also tied up in all this were Cold War stories of Soviet Russia using institutionalization in mental hospitals as a way to dispose of dissidents.  After all, it is a short step from the totalitarian view of ideology (ie that everyone must believe, not just comply) to declaring that any deviation from the official orthodoxy constitutes mental illness.

Which leads me to this story, which got me started thinking about this again:

Marine Le Pen, the leader of the French far right has been left shocked and furious after a court ordered her to be examined by a psychiatrist to determine if she "is capable of understanding remarks and answering questions".

Le Pen, who is head of the former National Front party - now National Rally (Rassemblement National) revealed on Twitter her shock and anger at being ordered to undertake a psychiatric assessment.

The unusual summoning is in relation to Le Pen having tweeted out gruesome propaganda images from terror group Isis that showed the bodies of people having been executed by the so-called Islamic State.

In March Le Pen was charged with circulating "violent messages that incite terrorism or pornography or seriously harm human dignity" and that can be viewed by a minor.

And as part of their investigation it appears magistrates in Nanterre near Paris have ordered Le Pen to visit a psychiatrist for an expert assessment.

"I thought I had been through it all: well, no! For denouncing the horrors of Daesh (Isis) by tweets the "justice system" has referred me for a psychiatric assessment. How far will they go?!" she said on Thursday.

Quillette had an interesting article about a scientific paper, that was mostly a presentation of math and statistical tools, that was essentially suppressed, apparently because it does not fit with current social justice talking points.

In the highly controversial area of human intelligence, the ‘Greater Male Variability Hypothesis’ (GMVH) asserts that there are more idiots and more geniuses among men than among women. Darwin’s research on evolution in the nineteenth century found that, although there are many exceptions for specific traits and species, there is generally more variability in males than in females of the same species throughout the animal kingdom.

Evidence for this hypothesis is fairly robust and has been reported in species ranging from adders and sockeye salmon to wasps and orangutans, as well as humans. Multiple studies have found that boys and men are over-represented at both the high and low ends of the distributions in categories ranging from birth weight and brain structures and 60-meter dash times to reading and mathematics test scores. There are significantly more men than women, for example, among Nobel laureates, music composers, and chess champions—and also among homeless people, suicide victims, and federal prison inmates.

I am not an expert on this and don't really take a position on whether this is truly genetics or nurture, but it does tend to explain a lot of phenomena, like the distribution of boys vs. girls math SAT scores.

But some feminists and SJW's are deeply, deeply invested in the hypothesis that differences in representation of men vs. women in the top tiers of anything are entirely due to misogyny and patriarchy and other bad cultural and societal things (not sure how they explain disproportionate numbers of men in the bottom of distributions).  So a partial genetic explanation is not going to make them happy.  So:

But, that same day, the Mathematical Intelligencer’s editor-in-chief Marjorie Senechal notified us that, with “deep regret,” she was rescinding her previous acceptance of our paper. “Several colleagues,” she wrote, had warned her that publication would provoke “extremely strong reactions” and there existed a “very real possibility that the right-wing media may pick this up and hype it internationally.” For the second time in a single day I was left flabbergasted. Working mathematicians are usually thrilled if even five people in the world read our latest article. Now some progressive faction was worried that a fairly straightforward logical argument about male variability might encourage the conservative press to actually read and cite a science paper?

In my 40 years of publishing research papers I had never heard of the rejection of an already-accepted paper. And so I emailed Professor Senechal. She replied that she had received no criticisms on scientific grounds and that her decision to rescind was entirely about the reaction she feared our paper would elicit. By way of further explanation, Senechal even compared our paper to the Confederate statues that had recently been removed from the courthouse lawn in Lexington, Kentucky.

The interesting part to me is that I have heard a parallel theory of greater genetic variability applied to Africans, though from a different cause.  Rather than being a selectivity phenomenon, it is argued that because Africa is likely the original birthplace of humanity, every other group of people was started by essentially an African splinter group, made up of just a portion of the range of African genetics.  Thus on a global basis Africans should be disproportionately in the extremes -- tallest and shortest, smartest and dimmest, fastest and slowest, etc.

Interestingly (and I admit I am not active in this field so I may be missing something here) the general reaction to this seems to be almost celebratory -- look at all this genetic diversity, to go along with the cultural diversity, in Africa!

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

It starts with this tweet:

As extreme weather events become more common, we're living through "once in lifetime storms" every year. Our most immediate understanding of their severity is loss of life and damages.

— March for Science (@ScienceMarchDC) September 18, 2018

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

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

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

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

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

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

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

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

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

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

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

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

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

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

When the first words of an incoming phone call are "Do not hang up..."

As of this moment, Canadian tulip bulb marijuana company Tilray is trading at $146 a share for a total market capitalization of $11.2 Billion.  This is a company that had $10 million in revenues last quarter.   It is trading at a 420x multiple of last year's revenues.  It is up 20% today alone.  The race to own Canadian marijuana stocks in advance of the January 1, 2019 legalization in Canada is simply insane.  I would have attributed this to millenial dumb money leaving Tesla and looking for a new home, but a couple of weeks ago, American alcoholic beverage company Constellation Brands paid $4 billion for just a piece of another Canadian weed company.

Investments at this sort of valuation before the market even is opened are speculative in the extreme.  People will use the argument that "wouldn't you have wanted to be in on the ground floor of Coke or Pepsi or Phillip Morris or Anheuser Bush?"  A few responses:

1. Buying in at an $11 billion valuation is not really the "ground floor".  $11.2 billion is a higher market cap than Whirlpool or Hyatt or Alcoa.
2. The beer and cigarette and soft drink industries all started with hundreds, even thousands of competitors.  When RJ Reynolds started his tobacco company, there were 15 other tobacco companies in Winston-Salem alone.  Without your current hindsight, you would have been hard-pressed in the early stages of those industries to pick the winner.
3. This goes without saying, but we have no idea of the future size of the marijuana market, and even without the risk of trying to predict consumer behavior it is really hard to predict regulatory behavior
4. Usually only one part of the value chain of a new industry really makes the profits.  We have no idea where that will be in the marijuana business.  In beer and tobacco, the big profits are not with the growers of tobacco and hops, for example.
5. Early pioneers in an industry are often not the survivors.  Your computer today, is it a Tandy?  Kaypro?  Commodore?  IBM and Compaq don't even make PC's any more.  Apple does but only because it reinvented itself as a phone maker.  And how about those cell phone pioneers?  Is your phone a Nokia?  Motorolla?  Blackberry?

December $145 put options on Tilray are trading around $72 dollars, which essentially means that there are folks betting that the company will lose half its value in the next 90 days.  I can't remember ever seeing anything that extreme.

Update:  Well, a day later it is at over $200 and a $20 billion valuation.  Incredible.

UPDATE:  This article has been heavily edited.  It turns out that solar installations without extensive battery systems do NOT act as a backup to grid outages.  By utility rules, the solar system has to shut itself down when the grid shuts down.  I should have done better research, but frankly I could not believe that the system shuts down EXACTLY when you most need it.  For me this revelation (which came from several readers, thanks!!) was a bit like finding out that your flashlight has software to shut down when it is dark outside. 

Our house has always been a good candidate for solar.  It has a large flat roof, good sightlines to the south, and we live in just about the best solar location in the country (Phoenix).  The problem has been two-fold:

• Even with large tax rebates and other subsidies (e.g. ability to sell power into the grid at retail rather than wholesale rates), the payback periods are long.
• Given that we are working in 10+ year paybacks, it has never been clear to me that most panels have the life needed.  All solar panels degrade with time and sometimes fail and I am not sure most economics include those factors.

What finally changed our minds was a question my wife asked me a few months back.  She would really be distressed at losing the A/C during a Phoenix summer, and asked if we should get a backup generator.  I told her such generators were large and expensive, but that if we really wanted some grid backup in Phoenix, solar seems to make sense.  Sure, it only backs up in the day, but that is when we really need it here.  The backup aspect was the cherry on top of the economics that put us over the top.

We knew we did not want some sort of leasing or pay-for-power arrangement that would encumber our home if we ever had to sell it so that meant we could shop for about any sort of panel we wanted.  In shopping for things nowadays, there is seldom consensus on the best, but right now there seems to be a near consensus in solar panels.  The SunPower panels have the best efficiency, the lowest efficiency reduction from high temperatures, the least efficiency drop off with time, and the longest warranty.  You pay for all that of course and they are pricey, but I decided to go with the pricier panels where I could be more sure of the economics in the out years.  We have made other investments in our home that have essentially represented a decision to stay for the long-term, so we invested for the long-term here.  I will say that it is possible we could have gotten better economics with another panel that was cheaper, even considering a shorter life, but I did not do the math for every panel.***  The panels we are buying are a huge step ahead of the old ones, as they have built -in inverters in each panel and so they produce AC directly.  This greatly reduces the wiring and installation costs.

Interestingly, the efficiency did not buy us much (at least today) because our total installation was limited by our service panel limits, which total to 400 amps.  This means that the efficiency really only saved us roof space which we had more than enough of.  However, while I chose not to do a battery system this time around (too expensive and too many safety questions), I may do one in the future so I wanted space for more panels to charge a future battery system.

The total payback comes to just about 10 years for our system.  At historic cost of capital numbers this probably does not pencil out but today with ZIRP it makes sense, especially with the extra benefit of some immunity from outages.  Even to get to these numbers you folks had to chip in to help my economics, in the form of the 30% tax rebate you are giving me and the above-wholesale price you are paying me for power I put into the grid.  This payback is mainly from getting rid of a LOT of our on-peak power usage, which costs us way more per KwH than off-peak.  A second project to add more solar charging batteries for evening use will have more challenging economics and will likely have to be justified purely on grid independence.  On the other hand, your economics in another location may be better, since our off-peak power costs of around 10-12 cents is pretty cheap.  On the gripping hand, you may not have as good of a solar insolation factor where you live.  My summary is that if you live in certain parts of SoCal with high electricity rates, this is a no brainer; if you live where I do it is marginal but works if you value some grid independence; and most everywhere else it is a real stretch and maybe closer to a rich man's toy than a sensible investment**.  However, those of you who have had good economics doing this elsewhere are welcome to comment below.

I will give more reports in the future as we go through this.

**  I would argue that experience from some place like SolarCity does not necessarily count as they never have and (as part of Tesla) likely never will make money, so there is an added subsidy in the equation there from well-meaning but naive stockholders.

*** It is hard also to do the full installation math on every panel as most installers have a limited range they work with and we only had the energy and time to engage a few installers for quotes.

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

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

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

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

It’s hard to recall a more unsportsmanlike event.

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

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

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

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

This is a very good, very readable article about why many psychology studies don't replicate, though most of it is applicable to most any other field of research.   The author has four rules to keep in mind, and they are all good.  He looks at a number of studies that do not replicate to demonstrate how the rules work.  A sample:

This study is basically a p-hacking manual. They’re not even trying to hide it, instead describing in detail how, when a hypothesis failed to yield a p-value below 0.05, they tried more and more things until something publishable popped out by chance.

Why use the language of Power and Privilege at all?

One of my favorite political books is Arnold Kling's Three Languages of Politics (free download here).  It is a great reference for understanding why so much of politics devolves into talking past one another, and is a great guide for those who want to be persuasive outside of one's own tribe.

As background, I am a life-in-the-real-world (LIRW) libertarian who is most comfortable arguing on the freedom-coercion axis and based on economic efficiency.  LIRW libertarian means that I don't answer every policy question with a knee-jerk anarcho-capitalist get-the-government-out-of-the-way policy prescription.  I accept that government coercion is not going away and I can accept some state coercion in support of certain policy goals.   However, in doing so I assign something I call the Cost of Coercion to policy proposals in balancing out the costs and benefits and the coercion cost I assign will be high.  As such, then, I tend to discuss policy in terms of meeting goals with maximum economic efficiency and minimum levels of coercion.

In this article I want to talk about my (and other libertarians') attempts to engage (or failures to engage) Progressives on their preferred Oppressor-Oppressed axis.  While I think everyone benefits from learning to engage with folks who speak different political languages, doing so is particularly important for libertarians in the United States because we are the odd man out in the current two-party system.  Half our issues (e.g. free markets, limited government) require common cause with Conservatives while the other half (e.g., open immigration, drug legalization, gay marriage) require making common cause with Progressives.  In this article I want to talk about my (and other libertarians') attempts to engage Progressives on the Oppressor-Oppressed axis.

To start, I feel like I am pretty good at understanding the Progressive point of view on many issues (e.g. my intellectual Turing test here on Progressive arguments for the minimum wage).

However, on the airplane yesterday I was looking back at my proposed trans-partisan plan on climate action and found I did little in it to excite Progressives.  I still think that this is a very fair plan that could appeal to both Progressives and Conservatives, but I realize in retrospect that it does almost nothing to sell the plan to Progressives.  The article is mostly economic efficiency arguments that can sway Conservatives (at times) but seldom have a lot of power with Progressives.  Sure, the plan gives Progressives what they are asking for (a carbon tax) but I acknowledge in the article that there is evidence from the Washington State carbon tax vote that Progressives don't actually understand the benefits of a carbon tax very well.  Here, for example, is how I discussed the shift from a myriad of scattershot government interventions to the carbon tax:

Point 1: Impose a Federal carbon tax on fuel....So what is the best way to reduce CO2 -- by substituting gas for coal?   By more conservation?  By solar, or wind?  With biofuels?  With a carbon tax, we don't have to figure it out or have politicians picking winners.  This is why a Pigovian tax on carbon in fuels is going to be the most efficient possible way to reduce CO2 production.   Different approaches will be tested in the marketplace....

Point 3:  Eliminate all the stupid stuff...[in turn] I propose that we eliminate all the current Federal subsidies, mandates, and prohibitions that have been justified by climate change. Ethanol rules and mandates, solar subsidies, wind subsidies, EV subsidies, targeted technology investments, coal plant bans, pipeline bans, drilling bans -- it all should go.  The carbon tax does the work.

Picture the social justice warriors at some college today -- are they going to be excited by this?  I doubt it.  But what if I said this instead:

We should shift climate efforts from all the disparate, scattershot efforts today to a neutral carbon tax that is impossible for the powerful and privileged to game to their advantage. Current climate programs are all more likely to benefit Wall Street bankers and crony political interests than they are to help the climate.  For example, the Koch brothers have publicly admitted that their company is one of the largest beneficiaries of the current ethanol program, which was meant to benefit the climate but instead just pumps profits into a few well-connected multi-billion dollar corporations, while taking food from the poor and feeding it into people's gas tanks.

This second version, while it needs some polish, is clearly more compelling to a Progressive, and all of it is something I believe -- It's just not the first way I naturally defend the plan.  I need to get better on this.

Power and Privilege are a Useful Framework (among others) for Analyzing History and Public Policy

I have studied a lot of history in my life, mostly as a hobby.  When I first started studying history in secondary school in the 1980's, it was almost all presented as "great man" history -- i.e. history can be described as driven primarily by the actions of prominent individuals.  Julius Caesar did this and Henry the VIII did this other thing, etc.   Really, this approach to history was being overtaken even 100 years earlier than this, but I didn't really get exposed to other approaches until college.  There, I began to learn that Marxist historians in the 20th century brought a different view, that most of history was driven by big social and economic and demographic changes rather than individuals -- think Hari Seldon if you know that reference.

But the Marxists had a familiar problem (other than the obvious one where they explain every event in history as a class struggle and proto-Marxist revolution): They brought a great new tool to the analysis of history but then declared that it was the ONLY correct tool.  But there are plenty of historical turns where individuals mattered.  The revolution in Rome from the Republic to the Empire was probably inevitable from the large forces at work, but was the end of the civil wars in favor of decades of peace inevitable without the acumen of Augustus?

Other groups have contributed yet more lenses for looking at history.  I remember when it became de rigueur that history courses include lectures on life of the common person, the experience of women, and on other groups that don't have a big presence in the traditional historic record.  I initially rolled my eyes thinking that this all was a politically correct placeholder, but I eventually found it fascinating -- to the extent that I have since taken whole courses solely on the experience of common people in the Middle Ages and the Roman Empire.

To this same end, power and privilege is yet another useful framework for analyzing history.  The problem in my mind comes in the fact that so many students go through college, even graduate from college in history, looking at the world ONLY through this one lens.  To me this is madness.  It is like trying to play golf with just a 2-iron or to do math with just cosines.

Libertarians and the Power & Privilege Language

As demonstrated in my climate example earlier, there is no reason libertarians cannot engage progressives on the power and privilege or oppressor/oppressed axis.  Libertarians care a lot about the ability of the individual to be able to make decisions and live their life without coercion.  Many of the same things that upset progressives -- racism, sexism, various sorts of sexual prohibition, narcotics prohibition, fraud, migration restrictions, military interventionism -- also upset libertarians.  Libertarians and progressives both talk a lot about power and abuse of power, though granted they fear different sorts of power: libertarians tend to have more fear of government power, while progressives tend to fear any sort of economic power.  But even getting that far is at least a basis for meaningful discussion.  If you want to have an interesting discussion with a progressive, do what I did with one of my progressive in-laws and watch Michael Moore's Capitalism: A Love Story together.  The progressive will gladly watch it with you because they will think you are about to get schooled.  But watch as the movie unfolds -- failure after failure that Moore wants to describe to capitalism are in fact mostly due to crony government interventions to which libertarians are strongly opposed.  There is a surprising amount of common libertarian-progressive ground in the movie if you look past Moore's interpretation of these failures and pay attention to their actual causes.

This is what I had in mind when I wrote my recent article in Regulation Magazine, "How Labor Regulation Harms Unskilled Workers", to try to write something about labor regulation that was pitched more to progressives than to libertarians and conservatives.  Too often articles on the minimum wage focus solely on economic efficiency, or worse, on how labor market interventions negatively impact businesses.  When progressives see that something negatively impacts businesses, their first reaction is "awesome, let's do more of it!"  Not a great sales approach.   In my article, I was never going to convince progressives to give up on regulation of the terms and conditions of labor altogether -- it is simply too deeply ingrained in their philosophy that workers are powerless in the face of employers and need external protection.  But it might be possible to show progressives why something like the minimum wage can be a bad anti-poverty program that it actually tends to hurt the poorest and most vulnerable and least skilled.

The absolute best example I can think of how libertarian attempts to engage progressives have been terrible is the book by Nancy MacLean called Democracy in Chains.   The book makes the weird and not very well substantiated claim that James Buchanan, who won a Nobel Prize for his work in public choice theory, was heavily influenced by southern slavery supporters like John Calhoun, and thus, uh, public choice is racist or evil or something.  The book tends to get lauded by people who mostly like its thesis but did not read it and torn apart by academics who are hugely skeptical about its logic and factual basis.  The most amazing thing about the book is just how incurious Ms. MacLean is about public choice theory itself -- the head of the national organization of public choice economists is a professor on her own campus, with an office just a short walk away, yet she never consulted anyone in the field.

Here is why I highlight it, and not to beat up on a progressive who in turn beat up on a libertarian icon.  Public choice theory -- as I and most people who have studied it understand it -- should be tremendously interesting to progressives, so much so I think it could be a core text they study.  Not because I want to make them not-progressives (I will send them to Hayek for that) but because public choice theory says so much about how power and privilege are created and sustained.  Want to understand why Wall Street makes so much money and is so seemingly immune to accountability, check out public choice theory.  Want to know why you and I spend billions to subsidize profitable corporations like Boeing or Koch Industries, check out public choice theory.  Want to understand why public interventions often fail so you can make better interventions in the future, check out public choice theory.

The reason progressives don't look at public choice theory this way is in large part because libertarians have adopted public choice theory as their own and use it most often to push back on nearly every government intervention.  In particular, the Koch Brothers and Cato love public choice theory and use it to argue for small government, so in the tribal politics of the day, this means that progressives have to hate it.  I would argue that the best description of Nancy MacLean's approach to James Buchanan and public choice theory in her book (and her  more-than-apparent lack of desire to learn anything about it) is the fact that public choice theory is associated with the Koch Brothers and thus she wanted to bring it down to help bring down the Koch siblings who have become a progressive bete noire (despite their actually supporting a lot of progressive causes like gay marriage).  Ironically, from my limited reading, James Buchanan appears to have treated public choice more as a guide to good government than a trump card to be played against any government intervention.

This is why the book I would most like to write, if I had the academic chops and time to write it, would be "Public Choice for Progressives:  What James Buchanan can teach good government and equalizing power and privilege."  There are a lot of things libertarians and progressives are never going to agree on, but there are enough that we can agree on to make it worthwhile to learn their language.

"F.D.A. Cracks Down on Juul and E-Cigarette Retailers" today, via the NYT.

As of this moment, cigarette-maker Phillip Morris stock is up nearly 4.5% on the news.  This happens so many times in sloppy policy making that I can't even count them.  Do-gooders assume that when they ban things, like e-cigarettes, that individuals will turn to the regulators' preferred alternative, in this case abstinence from any type of vaping or smoking.  But in fact, many are much more likely to switch to tobacco smoking, which is orders of magnitude more dangerous than vaping.  Adults who think these things through, like investors on Wall Street, understand this so that is why Phillip Morris has gained over $5 billion in value today.  The FDA is working to create a whole new generation of tobacco smokers.

When I hear that "that teenage use of electronic cigarettes has reached 'an epidemic proportion,'" unlike the regulators I do not immediately assume this is unalloyed bad news.  Another way of putting this is an "epidemic of teenagers who are turning to safer alternatives to really damaging tobacco products."

And when it turns out the regulators just make things worse so they can win this news cycle of virtue signalling, there is no way they will take responsibility for it,

And if you want to be really, really cynical about this, you might remember that with the huge government tobacco settlement, the government essentially made itself business partners with the large tobacco companies.  Any competitors threatening the top companies in the settlement seriously threaten tax income to many state governments.

While I am not deeply worried about man-made climate change, I am appalled at all the absolutely stupid, counter-productive things the government has implemented in the name of climate change, all of which have costly distorting effects on the economy while doing extremely little to affect man-made greenhouse gas production.  For example:

• Corn ethanol mandates and subsidies, which study after study have shown to have zero net effect on CO2 emissions, and which likely still exist only because the first Presidential primary is in Iowa.  Even Koch Industries, who is one of the largest beneficiaries of this corporate welfare, has called for their abolition
• Electric car subsidies, 90% of which go to the wealthy to help subsidize their virtue signalling, and which require more fossil fuels to power than an unsubsidized Prius or even than a SUV.
• Wind subsidies, which are promoting the stupidist form for power ever, whose unpredictabilty means fossil fuel plants still have to be kept running on hot backup and whose blades are the single largest threat to endangered bird species.
• Bad government technology bets like the massive public subsidies of failed Solyndra

Even when government programs do likely have an impact of CO2, they are seldom managed intelligently.  For example, the government subsidizes solar panel installations, presumably to reduce their cost to consumers, but then imposes duties on imported panels to raise their price (indicating that the program has become more of a crony subsidy for US solar panel makers, which is typical of these types of government interventions).  Obama's coal power plan, also known as his war on coal, will certainly reduce some CO2 from electricity generation but at a very high cost to consumers and industries.  Steps like this are taken without any idea of whether this is the lowest cost approach to reducing CO2 production -- likely it is not given the arbitrary aspects of the program.

These policy mess is also an opportunity -- it affords us the ability to substantially reduce CO2 production at almost no cost.

The Plan

Point 1: Impose a Federal carbon tax on fuel.

I am open to a range of actual tax amounts, as long as point #2 below is also part of the plan.  Something that prices CO2 between $25 and $45 a ton seems to match the mainstream estimates of the social costs of CO2.  I think methane's greenhouse effects are exaggerated, but one could make an adjustment to the natural gas tax numbers to take into account methane leakage in the production chain.   I am even open to making the tax=0 on biofuels given these fuels are recycling carbon from the atmosphere.

So what is the best way to reduce CO2 -- by substituting gas for coal?   By more conservation?  By solar, or wind?  With biofuels?  With a carbon tax, we don't have to figure it out or have politicians picking winners.  This is why a Pigovian tax on carbon in fuels is going to be the most efficient possible way to reduce CO2 production.   Different approaches will be tested in the marketplace.  Cap and trade could theoretically do the same thing, but while this worked well in some niche markets (like SO2 emissions), it has not worked at all in European markets for CO2.   There has just been too many opportunities for cronyism, too much weird accounting for things like offsets that is hard to do well, and too much temptation to pick winners and losers.

When I first crafted early drafts of this plan several years ago, I had assumed that Progressives championed a carbon tax for the reasons I listed above, ie that it is the most efficient means to allow markets to reduce emissions.  However, the referendum a couple of years ago in Washington State demonstrated that many Progressives may not understand this at all.  You can read a lot more about this debate here.  I fail the ideological Turing test on this one, because I don't know if the Progressives who were strongly for CO2 reduction but opposed the Washington State carbon tax did so because they did not understand economics or because they cared less about global warming than funding other Progressive causes.

Point 2:  Offset 100% of carbon tax proceeds against the payroll tax

Yes, there are likely many politicians, given their incentives, that would love a big new pool of money they could use to send largess, from more health care spending to more aircraft carriers, to their favored constituent groups.  But we simply are not going to get Conservatives (and libertarians) on board for a net tax increase, particularly one to address an issue folks on the Right may not agree is an issue at all.  So our plan will use carbon tax revenues to reduce other Federal taxes.

I think the best choice would be to reduce the payroll tax.  Why?  Because, the carbon tax will necessarily be regressive (as are most consumption taxes) and the most regressive other major Federal tax we have are payroll taxes.  Offsetting income taxes would likely be a non-starter on the Left, as no matter how one structures the tax reduction the rich would get most of it since they pay most of the income taxes.

There is another benefit of reducing the payroll tax -- it would mean that we are replacing a consumption tax on labor with a consumption tax on fuel. It is always dangerous to make gut-feel assessments of complex systems like the economy, but my sense is that this swap might even have net benefits for the economy -- so much so that we might want to do it even if there was no such thing as greenhouse gas warming.  In theory, labor and fuel are economically equivalent in that they are both production raw materials. But in practice, they are treated entirely differently by the public.   Few people care about the full productive employment of our underground fuel reserves, but nearly everybody cares about the full productive employment of our labor force.   After all, for most people, the primary single metric of economic health is the unemployment rate.  So replacing a disincentive to hire with a disincentive to use fuel could well be popular.

Point 3:  Eliminate all the stupid stuff

Oddly enough, this might be the hardest part politically because every subsidy, no matter how idiotic, has a hard core of beneficiaries who will defend it to the death -- this the the concentrated benefits, dispersed cost phenomena that makes it hard to change many government programs.  But never-the-less I propose that we eliminate all the current Federal subsidies, mandates, and prohibitions that have been justified by climate change. Ethanol rules and mandates, solar subsidies, wind subsidies, EV subsidies, targeted technology investments, coal plant bans, pipeline bans, drilling bans -- it all should go.  The carbon tax does the work.

States can continue to do whatever they want -- we don't need the Feds to step on states any more than they do already, and I continue to like the 50 state laboratory concept.  If California wants to continue to subsidize wind generators, let them do it.  That is between the state and its taxpayers (and for those who think the California legislature is crazy or that the Texas legislature is in thrall to oil companies, that is what U-Haul is for).

Point 4:  Revamp our nuclear regulatory regime

As much as alternative energy enthusiasts would like to deny it, the world needs reliable, 24-hour baseload power -- and wind and solar are not going to do it (without a change in storage technology of at least 2 orders of magnitude in cost).  The only carbon-free baseload power technology that is currently viable is nuclear.

I will observe that nuclear power suffers under some of the same problems as commercial space flight -- the government helped force the technology faster than it might have grown organically on its own, which paradoxically has slowed its long-term development.  Early nuclear power probably was not ready for prime time, and the hangover from problems and perceptions of this era have made it hard to proceed even when better technologies now exist.   We are at least 2 generations of technology past what is in most US nuclear plants.  Small air-cooled thorium reactors and other technologies exist that could provide reliable safe power for over 100 years.  I am not an expert on nuclear regulation, but it strikes me that a regime similar to aircraft safety, where a few designs are approved and used over and over makes sense.  France, which has the strongest nuclear base in the world, followed this strategy.  Using thorium could also have the advantage of making the technology more exportable, since its utility in weapons production would be limited.

Point 5: Help clean up Chinese, and Asian, coal production

One of the hard parts about fighting CO2 emissions, vs. all the other emissions we have tackled in the past (NOx, SOx, soot/particulates, unburned hydrocarbons, etc), is that we simply don't know how to combust fossil fuels without creating CO2 -- CO2 is inherent to the base chemical reaction of the combustion.  But we do know how to burn coal without tons of particulates and smog and acid rain -- and we know how to do it economically enough to support a growing, prosperous modern economy.

In my mind it is utterly pointless to ask China to limit their CO2 growth.  China has seen the miracle over the last 30 years of having almost a billion people exit poverty.  This is an event unprecedented in human history, and they have achieved it in part by burning every molecule of fossil fuels they can get their hands on, and they are unlikely to accept limitations on fossil fuel consumption that will derail this economic progress.  But I think it is reasonable to help China stop making their air unbreathable, a goal that is entirely compatible with continued economic growth.  In 20 years, when we have figured out and started to build some modern nuclear designs, I am sure the Chinese will be happy to copy these and start working on their CO2 output, but for now their Maslov hierarchy of needs should point more towards breathable air.

As a bonus, this would pay one immediate climate change benefit that likely would dwarf the near-term effect of CO2 reduction.  Right now, much of this soot from Asian coal plants lands on the ice in the Arctic and Greenland.  This black carbon changes the albedo of the ice, causing it to reflect less sunlight and absorb more heat.  The net effect is more melting ice and higher Arctic temperatures.  A lot of folks, including myself, think that the recent melting of Arctic sea ice and rising Arctic temperatures is more attributable to Asian black carbon pollution than to CO2 and greenhouse gas warming (particularly since similar warming and sea ice melting is not seen in the Antarctic, where there is not a problem with soot pollution).

Final Thoughts

At its core, this is a very low cost, even negative cost, climate insurance policy.  I am convinced this policy, taken as a whole, would still make sense even if CO2 turns out to be as harmless as nitrogen.  The carbon tax combined with a market economy does the work of identifying the most efficient ways to reduce CO2 production.   The economy benefits from the removal of a myriad of distortions and crony give-aways, while also potentially benefiting from the replacement of a consumption tax on labor with a consumption tax on fuel.  The near-term effect on CO2 is small (since the US is only a small part of the global emissions picture), but actually larger than the near-term effect of all the haphazard current programs, and almost certainly cheaper to obtain.  As an added benefit, if you can help China with its soot problem, we could see immediate improvements in probably the most visible front of man-made climate change:  in the Arctic.

Postscript

Perhaps the hardest thing to overcome in reaching a compromise here is the tribalism of modern politics.  I believe this is  a perfectly sensible plan that even those folks who believe man-made global warming is  a total myth ( a group to which I do not belong) could sign up for.  The barrier, though, is tribal.  I consider myself to be pretty free of team politics but my first reaction when thinking about this kind of plan was, "What? We can't let those guys win.  They are totally full of sh*t.  In the past they have even threatened to throw me in jail for my opinions."  Since I first published this plan I have had very prominent skeptics contact me to criticize me for "giving in to the warmists."

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

I have made this point in the past, but very few folks on the warming-panic side of the climate debate actually are familiar with even the most basic outlines of what skeptics argue.  The climate debate is one of the worst examples I can think of where partisans gain their only knowledge of what the other side is saying from slanted and ill-informed descriptions of the opponents by their own side.  This is roughly like my informing myself of Hillary Clinton's political positions solely from listening to Rush Limbaugh.

YouTube has adopted a policy of putting information / warning labels on videos by climate skeptics.  Here is a screen shot, the YouTube addition is in the beige box:

This is the only example I know of YouTube doing this -- for example, you can't find information labels on, say, 9/11 Truther videos reading "steel doesn't have to melt to fail" or on Bernie Sanders socialist videos saying "adopting Marxism led to the deaths of tens of millions of people in the 20th century."  So I guess we climate skeptics are considered by Google to be the worst of the worst on the truth scale.

But the truly hilarious part is that I don't disagree with this statement one bit**.  Neither does any other prominent skeptic I know of.  In fact, I have queued up the video to the 19:30 mark and you can watch me say exactly this.

Clearly, Google does not actually know what climate skeptics say.  In fact, much of the video (which despite being 2 years old is still my current position on the topic and a good introduction to the climate debate) is about this very topic -- how what skeptics actually say and what warmists say what we way are so different, and how that SNAFU's the climate debate.  One of my most popular articles in Forbes was on the same topic.

Postscript:  I am not a conspiracy theorist, and try not to assign arcane outcomes in chaotic systems to subterfuge.  But I do find it odd that when I Google myself, in the fourth position is random critique of one of my climate articles.  There have been much more intelligent critiques of me historically than this one, and this particular critique garnered far fewer reads and inbound links than the original article, which shows up nowhere in the search.  I am not persuaded that Google is putting its thumb on the scale in favor of critiques of skeptics, but I could be.

**Though I might quibble with equating climate change and global warming.  They are obviously related but certainly not equivalents.

I post things like this NOT because I have any fashion or shopping sense but because I happen once in a while to stumble on something I really like.  I personally hate shopping and just want someone to tell me "buy this one, it is the best", sort of like going to Toms Hardware and finding which graphics card is currently the best value. 

When I am working out, I wear Drifit type wicking fabrics, but for other casual times around the house I want a soft t-shirt for lounging around.  Until recently my choice was a Kit and Ace T-shirt that I think had some cashmere in it (maybe this one?).   I can't be sure because there is absolutely no size or sku information in the shirt.  By the way, a note to clothing companies:  I buy clothing in physical stores, but I often want to re-buy the same sku onlie either as replacements or for additional colors and that is impossible if you don' somehow print size and sku information in the item.  Also, and I am told by the women in my family that this is a typically male rant, I am constantly exhausted to find that the item I loved and want to buy again over and over does not exist and has morphed into some other style or sku.  I am happy to keep re-buying the same shorts and shirts and running shoes forever if someone will sell them to me.

Anyway, my new favorite T-shirt and the current leader in my closet for softness is the Cloudknit tee from Outdoor Voices.  Outdoor Voices is a small company in startup mode and can be a little spotty on its inventory availability.  I found it on a vacation weekend in Aspen where they had a pop-up store we happened to walk into.  I love this shirt and bought a pile of them to sleep in (I don't really prefer to sleep in a lot of clothing but my wife is at that special age when she needs to keep the bedroom somewhere around freezing).  The Cloudknit hoodie is also amazing for lounging about the house.  Their "Doing Things" fabric is more for workouts and it is fine but not as spectacularly soft as their cloudknit fabric.

As a reminder, my one other shirt recommendation was for Hawaiian shirts from Tori Richard.  Great concept -- Hawaiian shirt patterns printed on fabrics that actually feel like quality fabrics.  I also like the orange label products because it is a more attractive fit -- most Hawaiian shirts are not very tailored.   If you want to try something different, try their crinkle fabric which I really like but is not loved by everyone.  I just throw them in the washing machine and hang them slightly damp until they dry and they are great.  I used to do the same thing for my Tommy Bahama shirts but if you hang them to dry they become really stiff for some reason.  Tommy Bahama shirts can be quite nice, especially as they age, but you have to tumble them dry to keep them soft, not sure why.  Fortunately neither shirt needs to be ironed (any shirt that requires ironing in my closet -- except for a few dress shirts and my beloved Robert Graham shirts -- immediately goes to Goodwill).

From the Chronicle of Higher Education:

Upset and ashamed, my fellow graduate students and I speak with one another cautiously. We heal, or don’t, alone. People I know are afraid to make any public comment, even on Facebook, where they are friends with older, richer scholars who might one day control their fates. Even I, who have by extraordinary luck options outside of academia, fear what being vocal will bring.

A culture of critics in name only, where genuine criticism is undertaken at the risk of ostracism, marginalization, retribution — this is where abuses like Avital’s grow like moss, or mold. Graduate students know this intuitively; it is written on their bones. They’ve watched as their professors play favorites, as their colleagues get punished for citing an adviser’s rival, as funding, jobs, and prestige are doled out to the most obedient and obsequious. The American university knows only the language of extortion. “Tell,” it purrs, curling its fingers around your IV drip, “and we’ll eat you alive.”

Avital conducts herself as if someone somewhere is always persecuting her. She learned this, I imagine, in graduate school. No woman escapes the relentless misogyny of the academy. The humanities are sadistic for most people, especially when you aren’t a white man. This is understood to be normal. When students in my department asked for more advising, we were told we were being needy. “Graduate school should destroy you,” one professor laughed.

The irony is that those who survive this destruction often do so at the cost of inflicting the same trauma on their own students. Avital, now a grande dame of literary studies, who Reitman alleges bragged to him of a “mafia”-like ability to make or break the careers of others, still feels persecuted. She makes it the job of those around her to protect her from that persecution: to fawn, appease, coddle. The lawsuit against her reads as a portrait, not of a macho predator type, but of a desperately lonely person with the power to coerce others, on pain of professional and psychic obliteration, into being her friends, or worse.