Coyote Blog

Readers will know I have been sympathetic with the animating goals, though not necessarily with the tactics and policy prescriptions, of Black Live Matter.  I do believe there are problems with police accountability and violations of due process that disproportionately (though not exclusively) affect the black community.  While we have come an extremely long way (I grew up in East Texas and saw a lot of bad sh*t), brown skin can still incur a presumption of guilt that simply should not be there in our justice system.

On the flip side I have sympathy with the animating goals of the Me Too movement, and have been utterly offended by stories like the ones about Matt Lauer's automatic door lock to trap women in his office (the same Matt Lauer NBC may have fired Megyn Kelly in order to bring back some day).  And as in the case of BLM, while I am sympathetic to MeToo problems, I have not agreed with their tactics or policy prescriptions.

So despite having roughly the same reaction to both movements, why do I say that #blm and #metoo may be headed for a collision?  Let's start with #metoo.  This is basically a victim's rights movement -- lamenting that victims do not get a fair shake in the justice system.  In many ways the movement is a direct descendent of movies like Dirty Harry and Death Wish whose theme was that the justice system catered too much to criminals and gave criminals too many rights to the detriment of victims and society.  MeToo argues that "women should always be believed," which in practice is interpreted as meaning that the presumption of innocence and due process for the accused should be dialed back or eliminated.  These would be very familiar ideas to Harry Callahan and Paul Kersey.  So much so that I am almost surprised no director has done a female #metoo version of Death Wish.  Oh wait, Clint Eastwood already made that movie as part of the Dirty Harry series, it was called Sudden Impact.

In this context it is easy to see the potential train wreck that may be coming between MeToo and BLM.  The BLM movement at its core is about people of color being treated as guilty -- by police, by the system, by society -- based on the color of their skin.  BLM is about getting due process for the accused (or merely suspected) where it does not exist today.  Metoo, on the other hand, wants to reduce due process rights of the accused.  These two purposes almost have to come into conflict.

This should not come as a surprise, except perhaps to a generation who grew up in crappy public schools that no longer assign real books like, say, To Kill a Mockingbird.  This literary classic, which in my day was a progressive icon but now is being pushed into the background, was about the trial of a white woman falsely accusing a black man of rape, and how this black man was barely saved in a town where everyone automatically believed the white woman.

But we don't just have to look in fiction for examples, we are seeing it today in universities.  Universities are the one place in America that (due to the mandates of the Obama Department of Education) substantially reduced due process and presumption of innocence for men accused of a variety of sexual crimes by women.  The College Fix is one of the many sites in my feed reader, and it has featured numerous cases of college men suing universities over their being railroaded out of school in kangaroo courts over dubious assault charges.  And do you know what I have observed? A disproportionate number of these men who feel victimized by this system appear to me to be men of color and/or non-European foreigners (example from today).  It should not be a surprise to our SJW friends -- I venture that it is zero surprise to BLM -- that these folks with the least power are hurt the most by the loss of due process rights.

Postscript:  I have written before about where BLM and MeToo went wrong in what were originally good causes.  Here is where I think BLM went wrong.  I can't find where I have talked about MeToo going off the rails in one concise article, so here is a brief description of my view:  For years, and I presume still in some cases today, women have gone to their university or police or employer and reported sexual harassment or sex crime and have sometimes been met with lethargy -- they get patted on the head and told to go away or worse they get blamed for the incident.  But the net result is no serious investigation.  In this context, "believe the woman" makes sense.  A woman's accusations should be treated seriously and get a serious investigation without negative consequences for the woman who reported it.  But for a variety of reasons that desire to have real due diligence in response to accusations has morphed into a desire that the accusation be the same as a conviction.  So we went from a system with no investigation, though with a default to the accused to now a system with no investigation and a default to the accuser.  Neither system makes sense or is consistent with individual liberties and the rule of law and the entire history of our justice system.  "Treat every woman's accusations seriously" would have been a better motto (though maybe with an asterisk for women brought forward by Michael Avenatti).

As a disclosure, I once had a female ex-employee (who I never met face-to-face) accuse me of all kinds of crazy stuff.  The campgrounds I ran were training camps for the Taliban, I was a narcotics dealer, I was harboring fugitives, etc. She posted these accusations on facebook, tried to sue me, wrote letters to the government, tried to get on the news, and even put up yard signs.  She threatened me and my family with pictures of her holding her gun and we had to get a restraining order and a better security system.  It was a nerve-wracking time, and if we had believed all women, I would probably be in Guantanamo now.  By the way, I remember my wife really blasting me for this piece when I said how reluctant I am being alone with a young woman.  I responded to her, "what if I had been alone with [lady described above] for any amount of time?"  She thought for a second and said, "you would have been hosed - she would have accused you of rape for sure."

A while back I wrote:

Is it possible that inflation exists but it shows up mainly in financial assets (stocks, bonds, perhaps real estate) that don't really factor into standard inflation metrics?  Every step the Fed has taken, as well as other western central banks, appears to me to be crafted to pump money into securities markets rather than into main street.  Certainly we have seen a huge inflation in the value of financial assets and real estate over the past several years.

It was an honest question -- I am not an economist.  Business school gives one a pretty good working knowledge of micro but macro is usually outside my ken.  However, I see this is not a new idea and others make the same point.  Saw this chart on the Zero Hedge Twitter feed

I will add that progressives want to use this data to make some sort of fairness / income inequality point about wages vs. rich people's asset holdings, but this chart is not a natural result of unbridled capitalism.  It is the predictable result, even the desired result by its creators, of Fed policy in general and quantitative easing in particular.

Imagine that for some reason you desperately needed to be under a certain weight.  I am old enough to think of the relatively obscure movie Vision Quest where a high school wrestler is trying to drop two weight classes.  If you were in that situation, what is the first investment you would make?  Exercise equipment?  Nutrition guides?  A personal trainer?  No!  You would invest in a good, accurate scale.  Because without being able to measure the variable (in this case weight) you care about, everything else is worthless.

As trivial an observation as this may seem, the fact is that the world's governments have spent tens, perhaps hundreds of billions of dollars on global warming research and mitigation and have done almost zero to build out and improve a reliable temperature measurement system and historical temperature database.   We have absolutely failed over the last 30 years to substantially improve our actual measurement of the warming we are so concerned about.

There are at least two problems with our temperature data, the first of which I have written about many times before -- our surface temperature measurement infrastructure is full of bad installations whose design and location bear no resemblance to best-practice standards.  The most common problem is that temperature measurement stations are located in places that are subject to a lot of local biases, particularly urban development and heat islands.  I wrote about a classic example I discovered right here in Arizona.  And while the US has taken a few steps to eliminate the most egregious locations, many bad ones still exist.  And problems with the US infrastructure are nothing compared to issues with the infrastructure in other countries.  There still are only a handful of measurement locations in huge continents such as Africa and Antarctica, with quality problems equal to or greater than those in the US.

Parallel to the land surface data, we have a second temperature data set taken from satellites that has nearly as many issues.  Satellite data eliminates some of the problems of the surface data set:  it does not have large gaps in coverage and it is not subject to local biases, such as urban heat islands.  It does have the problem of not actually measuring the surface temperature, but rather the lower troposphere, but this is exactly where computer models predict the largest global warming signal to occur, so it is still useful.  But there have been many under-investment problems here, too.  The history of temperature versions of the UAH satellite temperature data base has many ups and downs that must be corrected -- this satellite fell out of the sky and then this one has sensor drift and then this other one went off course.  Despite the large and vocal role of the Goddard Institute for Space Studies (GISS) in climate research, the database they maintain is a surface temperature database and they seem to do little to support space measurement, leaving it to a few small groups to learn something from the satellites.   It's as big mess, made worse by the political factor of the space temperature database getting lower warming rates and being maintained by a skeptic while the surface temperature databases show more warming and are maintained by folks more pessimistic about warming rates.

To this picture we can add substantial problems with the historical temperature record.  The Hadley CRUT database is generally considered the gold standard in surface temperature records and is used by most researchers.  There are some problems with the database that are hard to fix -- for example, for 1850 there is apparently only 1 temperature station in the database for the entire southern hemisphere, which means half the world's temperature is being extrapolated from one site in Indonesia.  We can't get in a time machine and sprinkle the world in 1850 with more thermometers.  But we can try to take some sort of estimate of the potential error induced by such spotty measurement, something I have never seen done in the CRUT database.  The data in 1850 is always presented as just as solid as that in 1950 (see my last global temperature update).

Apparently, a PHD student in Australia recently audited the CRUT database as his thesis project. Before you get into his results, here is one thing to consider: Literally trillion-dollar decisions are being made based on this database and based on research which uses this database, and no one has bothered to do this previously until some random grad student in Australia gives it a shot?  By the way, it should be noted that once he completed what should have been warmly welcomed by the climate community with a "Dang, can't believe we didn't do that already," he has instead gotten nothing but grief and criticism.

The thesis is paywalled, (just $8, I have bought a copy and am slogging through it now) but Anthony Watt summarizes:

HadCRUT4 is the primary global temperature dataset used by the Intergovernmental Panel on Climate Change (IPCC) to make its dramatic claims about “man-made global warming”.  It’s also the dataset at the center of “ClimateGate” from 2009, managed by the Climate Research Unit (CRU) at East Anglia University.

The audit finds more than 70 areas of concern about data quality and accuracy.

But according to an analysis by Australian researcher John McLean it’s far too sloppy to be taken seriously even by climate scientists, let alone a body as influential as the IPCC or by the governments of the world.

…

Main points:

• The Hadley data is one of the most cited, most important databases for climate modeling, and thus for policies involving billions of dollars.
• McLean found freakishly improbable data, and systematic adjustment errors , large gaps where there is no data, location errors, Fahrenheit temperatures reported as Celsius, and spelling errors.
• Almost no quality control checks have been done: outliers that are obvious mistakes have not been corrected – one town in Columbia spent three months in 1978 at an average daily temperature of over 80 degrees C.  One town in Romania stepped out from summer in 1953 straight into a month of Spring at minus 46°C. These are supposedly “average” temperatures for a full month at a time. St Kitts, a Caribbean island, was recorded at 0°C for a whole month, and twice!
• Temperatures for the entire Southern Hemisphere in 1850 and for the next three years are calculated from just one site in Indonesia and some random ships.
• Sea surface temperatures represent 70% of the Earth’s surface, but some measurements come from ships which are logged at locations 100km inland. Others are in harbors which are hardly representative of the open ocean.
• When a thermometer is relocated to a new site, the adjustment assumes that the old site was always built up and “heated” by concrete and buildings. In reality, the artificial warming probably crept in slowly. By correcting for buildings that likely didn’t exist in 1880, old records are artificially cooled. Adjustments for a few site changes can create a whole century of artificial warming trends.

Details of the worst outliers

• For April, June and July of 1978 Apto Uto (Colombia, ID:800890)  had an average monthly temperature of  81.5°C, 83.4°C and 83.4°C respectively.
• The monthly mean temperature in September 1953 at Paltinis, Romania is reported as -46.4 °C (in other years the September average was about 11.5°C).
• At Golden Rock Airport, on the island of St Kitts in the Caribbean, mean monthly temperatures for December in 1981 and 1984 are reported as 0.0°C. But from 1971 to 1990 the average in all the other years was 26.0°C.

The last point about past thermometer adjustments is one I have run into before when I was looking at urban heat islands and their effect on temperature measurement (by the way this is a really great science fair project if you are looking for one).  Past urban heat adjustments seem to imply (by cooling the past more than the present) that urban heat biases on measured temperatures have gone down over time, which defies all logic and experience.

There is a lot more of interest at the link, but it strikes me as shear madness, bordering on fraud, that there seems to have been so little effort put into data integrity of perhaps the single most important non-economic dataset in the world.  I would presume that warmists, who constantly accuse skeptics of being "anti-science" would be the first to line up in favor of investing whatever is necessary in better, cleaner data.  So far, there has only been criticism of the effort.

Postscript:  The temperature adjustment issue is an important one.  In short, as seen below, the magnitude of the temperature adjustments in the US temperature database equal the magnitude of the warming.  In other words, the warming signal comes entirely from the adjustments.  This does not mean the signal is being read incorrectly, but it does mean that getting the adjustments (and their error bars, which no one ever includes) correct is perhaps the single most important issue to a good historical database.

For some reason, Yelp has invested in a massive spamming infrastructure and has become easily my most frequent and persistent source of spam calls and emails.  I went through my email trash (unfortunately it clears itself out every few months) but I still found a dozen different Yelp people contacting me.  Each of them tends to contact me with at least 2 calls and 2 emails before they go way, but if I respond (even to tell them to get lost) they take that as an invitation to contact me more.

Perhaps I have a unique problem -- I actually operate over 150 sites that could potentially be reviewed, and my gut feel is that each of these has been assigned to a different person and they all feel the need to call me without any cooperation between them.  For someone who is looking for more ways to consolidate an already complicated mass of reviews on the web, a review company that cannot coordinate its contacts with a single company is unnerving.  Further, I have to say that I have a distrust in what is essentially an online advertising platform that resorts to cold-calling to advertise their business.  If they don't trust their own platform to get the word out adequately, why should I?

There are other problems, but here is a sample of my communications with them when I made the mistake of actually responding:

Yelp:

Hi Warren,

I am sorry to hear this [I told them to stop spamming me], you actually have 3 amazing reviews on your page for Honeycomb Campground. I am sorry you have been contacted by many different Account Executives from Yelp.

The reason we keep reaching out is because we have consumers every day on Yelp in Grant looking for a campground and see this as a great opportunity for you to fill your spots. All I am asking for is the chance to show you how we can generate more traffic onto your page.

Again if you really would like to be removed from out call list I can do so, and I am sorry to hear that.

In part 1, we discussed different ways of measuring income mobility and income growth for the poor, and discovered that many traditional measurement approaches are overly pessimistic -- when one focuses on actual individuals, instead of income quintiles, income for the poor has improved substantially.

Unlike some libertarians, I don't have a problem with intelligently structured income transfer and safety net programs to help the very poor. In fact, I believe that such income transfer programs can be far less distortive and economically inefficient that many other anti-poverty programs.  One of the latter I will focus on in this article is the minimum wage.

Each year, Mark Perry puts together an awesome demographic snapshot of how various income quintiles differ from each other.  Here is his latest:

I want to first call your attention to the figures at the top for mean number of earners per household and household income per earner.  Much of anti-poverty policy seems to be based on the assumption that poor people, because they lack bargaining power, get hosed on wages and other work rules.  Public policy thus tends to focus on minimum wage and overtime rules and a myriad of other workplace interventions.

But in fact, if we compare the lowest quintile with the middle quintile in the chart above, we see something very different.  What we see is the main difference is hours worked, not the relative wage rates.  Let's consider two scenarios

1. We keep the amount of work done the same, but raise the wage rates of the poorest quintile to the middle quintile.  In this case, their average income would go up by about 50% from $12,319 to $18,654  (calculated as 0.41 mean earners times middle income per earner of $45,497).
2. We keep wage rates the same but raise the amount of work done in the poorest quintile household to that of the middle quintile. In this case, their average income more than triples from $12,319 to $41,163 (calculated as 1.37 middle income earners times poor income per earner of $30,046)

So in this example, increasing the poor's wage rates to middle class levels yields $6,335 a year while increasing the poor's amount of work done to middle class levels yields $28,844 a year.  Public policy that focuses on increasing work hours for the poor has 4.5 times the effect of public policy focused on wage rates.  A corollary to this is that any public intervention on wage rates for the poor that has negative employment effects is likely to have little net effect on poverty.  

But in fact this understates the relative benefits of approach #2. Look at the education levels in the poorest quintile vs. the middle.  The poorest quintile has 2.5 times as many people without even a high school degree as in the middle.   For these folks to progress, the only way they can develop skills is on a job and they can't do this without a job.  Or said another way, another advantage of approach #2 and getting them more hours of work is that they gain more skills to overcome their starting disadvantage in education.

I wrote about this in the summer issue of Regulation magazine, in a article entitled "How Labor Regulation Harms Unskilled Labor."  I argued that while likely intended to help the very poor, most labor regulation may be harming the poor, particularly those without skills or much experience, by making it harder and harder for them to find work.  This not only impoverishes them, but makes it harder for them to progress to better jobs and higher income levels.

In my business,which staffs and operates public campgrounds, I employ about 350 people in unskilled labor positions, most at wages close to the minimum wage. I had perhaps 40 job openings last year and over 25,000 applications for those jobs. I am flooded with people begging to work and I have many people asking for our services. But I have turned away customers and cut back on operations in certain states like California. Why? Because labor regulation is making it almost impossible to run a profitable, innovative business based on unskilled labor.

Why is this important? Why can’t everyone just go to college and be a programmer at Google? Higher education has indeed been one path by which people gain skills and opportunity, but until recently it has never been the most common. Most skilled workers started as unskilled workers and gained their skills through work. But this work-based learning and advancement path is broken without that initial unskilled job. For people unwilling, unable, or unsuited to college, the loss of unskilled work removes the only route to prosperity.

...the mass of government labor regulation is making it harder and harder to create profitable business models that employ unskilled labor. For those without the interest or ability to get a college degree, the avoidance of the unskilled by employers is undermining those workers’ bridge to future success, both in this generation and the next.

Public policy could best help the poor by lowering the regulatory barriers to hiring unskilled labor and promoting economic growth that will help keep us close to full employment.

Part 1 of this series was here.

Postscript:  This update on the Seattle minimum wage study is interesting.  Note that this study is occuring near peak employment, a time when one would expect the minimum employment impact from a minimum wage increase.  However, I do think the findings are roughly consistent with the discussion above:

In their latest paper, which has not been formally peer reviewed, Mr. Vigdor and his colleagues considered how the minimum-wage increases affected three broad groups: People in low-wage jobs who worked the most during the nine months leading up to and including the quarter in which the increase took effect (more than about 600 or 700 hours, depending on the year); people who worked less during that nine-month period (fewer than 600 or 700 hours); and people who didn’t work at all and hadn’t during several previous years, but might later work. The latter were potential “new entrants” to the ranks of the employed, in the authors’ words.

The workers who worked the most ahead of the minimum-wage increase appeared to do the best. They saw a significant increase in their wages and only a small percentage decrease in their hours, leading to a healthy bump in overall pay — an average of $84 a month for the nine months that followed the 2016 minimum-wage increase.

The workers who worked less in the months before the minimum-wage increase saw almost no improvement in overall pay — $4 a month on average over the same period, although the result was not statistically significant. While their hourly wage increased, their hours fell substantially. (That doesn’t mean they were no better off, however. Earning roughly the same wage while working fewer hours is a trade most workers would accept.)

It’s the final group of workers — the potential new entrants who were not employed at the time of the first minimum-wage increase — that Mr. Vigdor and his colleagues believe fared the worst. They note that, at the time of the first increase, the growth rate in new workers in Seattle making less than $15 an hour flattened out and was lagging behind the growth rate in new workers making less than $15 outside Seattle’s county. This suggests that the minimum wage had priced some workers out of the labor market, according to the authors.

“For folks trying to get a job with no prior experience, it might have been worth hiring and training them when the going rate for them was $10 an hour,” Mr. Vigdor speculated, but perhaps not at $13 an hour.

I would add as an aside that I think the NYT is being a bit arrogant an narrowly focused on money (vs. other benefits of employment) when they added the parenthetical phrase at the end of the third paragraph.

This is part 1 of a 2 part series.  Part 2 is here. 

The typical way of talking about income mobility and inequality is to look at the relative income and growth rates of different income quartiles.  Here is a chart used recently by Kevin Drum over at Mother Jones:

As you can see, since the three lines here have their steepest upwards slopes at different times, there are a myriad of possibilities for cherry-picking endpoints to make whatever point you want to make.  I would say this is a pretty healthy picture, with real income growth for everyone, though the general flatness of the middle income brackets since 2007 seems to get the most notice.

A healthy and growing economy should cause all of these quintiles to grow. But income growth and mobility for individuals is about more than just the quintiles.  As a small business owner over the last 20 years, I have had tax returns in all five quintiles -- I have had blowout years when I was "rich" and I have had years when my taxable income would qualify me for food stamps.  In other words, I move between the lines -- and so do a lot of other people.

Young people gaining experience and promotions move from lower to higher quintiles as they age.  New immigrants often come in at the bottom and progress over time.  When people retire, they may fall down a few quintiles.  Marriage might kick someone up to a higher quintile, and divorce may lead to them falling down a few.  There is a constant ebb and flow that is hidden by merely looking at quintiles.

Russ Roberts, who seems to be the token non-socialist at Medium, writes:

but the biggest problem with the pessimistic studies is that they rarely follow the same people to see how they do over time. Instead, they rely on a snapshot at two points in time. So for example, researchers look at the median income of the middle quintile in 1975 and compare that to the median income of the median quintile in 2014, say. When they find little or no change, they conclude that the average American is making no progress.

But the people in the snapshots are not the same people. These snapshots fail to correct for changes in the composition of workers and changes in household structure that distort the measurement of economic progress. There is immigration. There are large changes in the marriage rate over the period being examined. And there is economic mobility as people move up and down the economic ladder as their luck and opportunities fluctuate.

Roberts describes several studies that follow actual people, not quintiles, and finds that the American ideal of income mobility is still alive and well

This first study, from the Pew Charitable Trusts, conducted by Leonard Lopoo and Thomas DeLeire uses the Panel Study of Income Dynamics (PSID) and compares the family incomes of children to the income of their parents.⁴ Parents income is taken from a series of years in the 1960s. Children’s income is taken from a series of years in the early 2000s. As shown in Figure 1, 84% earned more than their parents, corrected for inflation. But 93% of the children in the poorest households, the bottom 20%, surpassed their parents. Only 70% of those raised in the top quintile exceeded their parent’s income.

... Julia Isaacs’s study for the Pew Charitable Trusts finds that children raised in the poorest families made the largest gains as adults relative to children born into richer families.

The children from the poorest families ended up twice as well-off as their parents when they became adults. The children from the poorest families had the largest absolute gains as well. Children raised in the top quintile did no better or worse than their parents once those children became adults.

He has a lot more at the link.

In part 2, I will discuss why public policy is missing the boat, and in some cases doing exactly the wrong thing, to promote income mobility particularly for the poor.

For years I have been mocking attempts to "prove" negative climate trends from a single data point. Too often a single event (e.g. strong hurricane landfall) is treated as "proof" of a trend, though how anyone who styles themself as "scientific" can claim a trend from a single data point is beyond me.  Every time someone claims a trend in, say, hurricane strength or drought or crop yields, I never can see any trend in the actual archived data for those phenomena.

So I am soliciting real medium and long-term trend data that points to some sort of negative climate trend.  To save folks time, I know of and have the data for several already:

• Increasing worldwide average temperatures, as measured both on the ground and in the lower troposphere by satellites
• Increasing number of record high nighttime low temperatures (yes, I know, this is always confusing)
• Arctic (but not Antarctic) sea ice extent, at least over the last 50 years
• US heavy rainfall events
• Sea level rise

Note that at this point I do not care if the trend is natural or manmade or if you can really specify a difference (which I would argue you likely cannot).  For example the sea level rise trend of 2-3mm a year goes all the way back to before 1850, and thus is hard to ascribe totally to man-made CO2 which has mostly been produced in the latter half of the 20th century.

Here are some rules:

• Must have a link to original data source or at least the original chart source (some groups are terrible about archiving the actual data), which can be a study or a group that actively measures the phenomenon.
• It can't just be for a limited geography.  North Carolina is too small.  The Antarctic Peninsula is too small.  The US is really too small but I will accept it because the US temperature data is some of the most complete in the world.  But don't send me a limited geography when the same data is available for a larger geography (ie only hurricanes in the Indian Ocean when we have hurricane data for the whole globe).
• It needs to be for as long of a time period as possible, and if you cut off early or late data there has to be a reason.  large changes in measurement approach can be a valid reason for leaving out data -- for example, small tornadoes before the advent of doppler radar and moder tornado tracking are likely undercounted.  Ditto hurricanes.
• It can't be based on a model.  It has to be actual readings, not model estimates.  Have a care on this -- many pieces of historical data that are presented as actual measurements are actually model results.
• It needs to be a weather or climate metric.  If you want, you can send me potentially derivative variables and I might present these in another section, but they tend to be suspect because the causality extends beyond climate.  An example of this is forest fire acreage burned, which can relate to climate but also can relate to forest management, forest health and insect threats, and firefighting philosophy as well.  Other similar metrics include crop yields, disease rates, refugees, wars, and a zillion other things that get attributed in some study to climate change.

Anything that passes these rules will get posted, though I reserve the right to comment.

Update:  Comments section is OK, but email is better.  Click the contact link up at the top.

From even before day 1 of the Trump Administration, the "resistance" has proclaimed that Trump is an illegitimate President and anyone who even has civil discourse with him will be othered and humiliated.

Readers know that I find Trump and his style to be distasteful, and believe he is dead wrong on immigration and trade, but the irony of the Resistance's position is:

1. I am not sure there ever has been a President more open to a deal (at least on issues outside of his hot buttons like immigration and trade).  If one approaches him to bargain, he will bargain.  If one instead challenges his manhood, he is going to dig in his heels and likely childishly harden his position against whatever you support.
2. There are very few things that Trump seems to have a hard-and-fast ideological position on, which tells me he is likely to act pragmatically (or in the case where he is resisted, vindictively).
3. There is zero evidence that he is anything but a liberal on social issues  (OK, yes, he has been crass and offensive with women, but many other prominent social liberals have done the same thing).  I have gay friends who were horrified at his election, but I still don't see any evidence Trump has a problem with gay people. Prominent gay rights groups should go to the White House and could make some real progress (and then maybe create a Kickstarter campaign to help beef up Trump's Secret Service protection because Pence could be a real problem on gay rights issues if President).

I have said all this for a while but am reminded of it from this story by Jacob Sullum entitled, "Kanye’s real success: Trump now backs criminal justice reform"

Kanye West’s literal embrace of President Trump was all over the news last week. The president’s rhetorical embrace of criminal justice reform got considerably less attention, but may prove more consequential.

In an interview with Fox News on the morning of his meeting with the rap impresario, Trump signaled that he was ready to go beyond “back-end” reform, which focuses on rehabilitation of inmates, and support “front-end” reform, which focuses on reducing sentences and sending fewer people to prison.

The key to understanding Trump’s remarks is Alice Marie Johnson, whose sentence the president commuted in June at the behest of West’s wife, Kim Kardashian.

In my extended article the other day about Tesla I wrote of Elon Musk

Elon Musk is not the smartest guy in the world.  He is clearly a genius at marketing and brand building.  He has a creative mind -- I have said before he would have been fabulous at coming up with each issue's cover story for Popular Mechanics.  A mile-long freight blimp!  Trains that run in underground vacuum tubes!  A colony on Mars!  But he suffers, I think, from the same lack of self-awareness many people develop when they are expert or successful in one thing -- they assume they will automatically be equally as brilliant and successful in other things.  Musk creates fanciful ideas that are exciting and might work technically, but will never ever pencil out as profitable business (e.g. Boring company, Hyperloop).

Seriously, go back and look at old popular mechanics covers.  Here is one in my domain:

The magazine specialized in really cool ideas that 14-year-old geeky boys like me ate up in the 1970s.  But most of them share in common with Elon Musk's ideas that they will never be practical.  So it is not surprising that Popular Mechanics put out an absolute puff issue on Elon Musk, apparently aimed at helping the man Popular Mechanics loves rehabilitate his reputation after getting some bad press for making false promises and breaking securities laws.   The piece was such a hopeless PR piece masquerading as journalism that the Atlantic felt the need to call them out for it.

Other readers, particularly journalists, were flabbergasted, including several Popular Mechanics staffers and contributors who declined to speak on the record because they feared jeopardizing their jobs. “It’s not the job of a magazine to do some PR recovery efforts for somebody exhibiting unstable behavior just because you like that he makes cool cars and rockets,” one Popular Mechanics writer said. (Disclosure: I worked at Popular Mechanics as a web intern for about a month in 2012.) For many journalists, the essay collection was a love letter bursting with unbridled, unfiltered admiration for Musk, a public figure the magazine covers, regularly and objectively. The material reads as if it came straight from the public-relations managers whose jobs are to make their boss look good.

In response to criticism the Popular Mechanics editor said:

D’Agostino said he decided to do the project after reading a slew of negative press of Musk and his properties, and, as he put it in the final collection, “myopic and small-brained” criticism. He cited as examples news coverage of the misleading tweet about Tesla, the ensuing SEC debacle, Musk’s weed experience on Joe Rogan’s podcast, and the entrepreneur’s relationship with the singer Grimes....

Musk, he said, is a good representative for the Popular Mechanics ethos. “It’s always been a magazine about what’s possible and the people who sort of tinker with things and solve problems with the aim and goal of improving human life and existence, and using technology to make things better,” he said. “When you look at someone like Elon Musk, we kind of think of him as one of us. He’s doing something very Popular Mechanics—you don’t know if it’s going to work, but he tries these things and gives it his all.”

I am perfectly willing to acknowledge Musk's good points, as I did in my long essay linked above, but in my opinion Musk is leading a lot of very naive investors over a cliff.  Go read the Tesla fan boards and the $tsla tag at twitter and you will see a series of investors who have never bought a stock before talking about how they put all their savings into Tesla.  Ugh.  Magazines like Popular Mechanics have some responsibility not to shamelessly tout a high-risk stock to naive investors.

For those who don't want to read my whole essay, the biggest problem at Tesla is that Musk has promised a lot of things, all of which take capital which it is increasingly clear Tesla does not have.  The promised Semi, pickup truck, coupe, solar shingle, China expansion, EU sales of the model 3, expansion of the sales and service network, bringing body shops in house, implementation of full self-driving -- not to mention repaying a growing accounts payable backlog and over a billion dollars in debt coming due in the next 6 months -- all will require billions of capital and Tesla is hitting bottom.  Musk claims he will be able to fund this with organic cash production but this almost has to be an outright lie.  He needs to raise equity, but has not done so when his stock was at all-time highs.  Now that he is in trouble with the SEC, rumors swirl that he may not be able to raise new capital.  If he cannot, Tesla will be bankrupt in 6 months or less.  Tesla might survive if it can find a white knight (though many of the obvious candidates have turned him down) but this is a lot of risk for noob investors to take on and a lot of risk to simply IGNORE in a Popular Mechanics puff piece.

Postscript:

By the way, is the balance problem on Elon Musk coverage really a dirth of hagiography? This is the man the press explicitly calls the real life Tony Stark.  If anything, he needs that guy referred to in the final seconds of the movie Patton, the person who rides with the Roman general during his Triumph and whispers in his ear that all glory is fleeting.  I have no problem talking about the wonderful things Musk has helped push forward (and I do) but good God aren't you obligated to also include stuff like this, out of his own mouth?

1/ This is crazy. Either this is a total BS excuse (which his $tsla fanboys will likely swallow) or Musk is the worst CEO of a $50 billion company I have ever heard of. $tslaq @TeslaCharts https://t.co/oeTfN9UaNU

— Coyoteblog (@Coyoteblog) October 18, 2018

You can click on the tweet and see my whole response, but eschewing 3rd party dealers and having its own sales and service network has been a Musk strategic pillar for 8 years.  The production ramp for the Model 3 is years behind.  And the CEO just looked at the map and realized they did not have enough service locations even for their less-than-expected sales?  This may be a great idea man and visionary and man who can get great efforts started, but this is not the tweet of a great, or even a good, CEO.

The subject says it all.  I have wrapped this damn ironwood tree twice and both times the lighting has not lasted.  Since a lot of lighting is designed for holiday use of 3 weeks a year, even something designed for 5 years of life dies in 4 months of continuous use.  For those who do not know, an Arizona native ironwood is gorgeous, one of the most sculptural trees I know of, but it is covered over every single surface with the sharpest thorns imaginable.  I lose a pint of blood every time I wrap this sucker so I want this to be the last time.

Last week I was walking through one of our area's  large upscale resorts.  The resort was hosting what looked like a huge conference of a large franchising organization.  What struck me immediately in the lobby and everywhere on the grounds was how many people of color were there -- it might have been as many as half.  And the crowd was WAY more than half women.  I don't want to argue right now about buying a franchise as a path to entrepreneurship -- there are pros and cons.  But it really helped reinforce something I always suspected -- that entrepreneurship is a particularly important path of self-improvement for women and people of color.

These all sound like worth progressive goals, and in fact many progressive profess to support entrepreneurship.  Here is a screen shot from Beto O'Rourke's web site a loyal reader sent me:

Amazing.  We are going to promote entrepreneurship by showering the economy with regulations (1000 new bills a year in progressive CA) and making sure many of the returns from an entrepreneurs' money and effort go to other people.**  This is like saying we really want to promote the growth of the rabbit population and we are going to do it by putting out lots of rabbit traps and making sure all the carrots the rabbits are eating are given to others.

** By the way, perhaps the #1 great progressive misunderstanding is that without one single government intervention, the vast majority of the entrepreneur's efforts go to others.  Employees will earn far more in total than will the entrepreneur herself, and  consumers will be left with far more value from the products and services they buy than the entrepreneur ever got back in profit.  Steve Jobs created far more wealth and well-being for the rest of us than he did for himself.

This New York Times article here could have been a perfectly reasonable thought piece on the (perhaps unintended) effects of several provisions in the tax code.  But in an institutional desire to land a few more blows on Trump, they tried to morph it into a hit piece on Jared Kushner --"Jared Kushner Paid No Federal Income Tax for Years" screams the headline.

Look NYT:  I find Trump distasteful as well.  But you only embarrass yourself presenting as some kind of investigative bombshell that Jared Kushner used perfectly legal deductions to minimize his tax bill.

I recommend this ZeroHedge summary to you as a quick way to get to the meat of the Times article.  As they summarize it, the Kushner tax "maneuver" consists of:

tep 1: The Purchase

Kushner Companies buys a property. The majority of the money for the purchase comes in the form of mortgages and personal loans from banks.

Step 2: The Write-Off

Under the federal tax code, real estate investors can write off the purchase price of the building — excluding the cost of the land — over a period of decades. Although Kushner Companies has spent little or no cash of its own, the firm takes large annual deductions based on the theoretical depreciation of the building.

Step 3: The Loss

The property generates cash for the Kushners. But any earnings, which would be subject to the federal income tax, are swamped by the amount that the company is taking in write-offs for depreciation. The result is that Kushner Companies records a net loss for tax purposes.

Step 4: The Investors

The company passes on that loss to its owners, including Mr. Kushner and his father, Charles.

Step 5: The Offset

The loss can be used to offset the Kushners’ income in the year it is recorded, and it can be carried forward to cancel out future income or to get refunds for taxes they paid in previous years.

Step 6: The Deferral

When Kushner Companies sells a property, it can use the proceeds to finance a new acquisition. If done within the right time frame, the company can indefinitely defer any capital-gains taxes it might owe on the sale of the original property.

So here is my confession.  I did the exact same thing just last year on my taxes.  Take one example:  One of my businesses bought and installed $350,000 of equipment.  I financed 100% of this purchase.  The article says that Kushner depreciated his real estate purchases over decades but the tax code's accelerated depreciation provisions allowed me to depreciate this purchase 100% in the first year.  So I had an immediately $350,000 loss that I netted against other income, grealy reducing my taxes on that income.  In fact, I don't think I was able to use it all due to various tax rules and I carried over a part of it to cover 2018 taxes or beyond.

One could argue about whether the accelerated depreciation provision I took advantage of is too generous, but the tax code is always going to allow depreciation against some formula (or else every business would be substituting crazy rental schemes for capital investment).

Let's take each step from above

1. The Times wants to make a big deal that somehow the fact that he is using borrowed money to buy assets is a factor in this, but why?  They imply a couple of times that all the debt reduces his ownership, but that is not true.  He still owns 100% of the asset (with the proviso the bank has a lien that is only meaningful in case of default.  His equity is only a fraction of the purchase price, but that is a different thing and says nothing about his ownership
2. The depreciation provisions are pretty standards as described across all businesses, except to say that they are less generous than the ones I get buying equipment.  Again they seem to think that somehow the fact that he borrowed most of the money is relevant to this -"Mr. Kushner is getting tax-reducing losses for spending someone else’s money" -- but his financing strategy is not the least relevant.  He took on a costly and risky long-term obligation when he borrowed the money.  Is the NYT arguing for requiring cash accounting for taxes??  This is just embarrassingly ignorant.
3. This is entirely normal
4. This is entirely normal for s-corporations and LLC's.  These were promoted for small business, and they are fabulous tools for entrepreneurs, but you have to provide these legal tools to all people, even to rich people in families you don't like.
5. This is entirely normal.  Any other rule would be grossly unfair and a kick in the nuts for entrepreneurs.  I often spend money this year that generates revenues next year.  The tax code recognizes this and agrees that the losses I took this year can be netted against the revenues next year that they helped to facilitate.
6. This is the only thing that is mildly unique to real estate and his business.  I don't really get the same rights with any of my assets, though my assets mostly depreciate rather than increase in value.  I won't pass judgement on this one, but I suspect that it has a lot of support (homeowners get it, for example, as do owners of second homes).

Nowhere is there even a suggestion of how the tax code might be altered to fix those things the NYT does not like about it.  I would suggest that any step that would alter any of the 6 steps above would be opposed even in a Democratic Congress.  This all reminds me of a piece a few years ago arguing that oil companies got a lot more subsidies than renewables like wind and solar.  Checking it out, the vast, vast majority of the subsidies were ... LIFO inventory accounting and depreciation, both tax rules that are 1) merely about timing of taxes and not total paid and 2) apply to all manufacturing businesses in all industries.

From a fascinating article on Amazon and its automation vision:

After a customer places an order, a robot carrying the desired item scoots over to a worker, who reads on a screen what item to pick and what cubby it’s located in, scans a bar code and places the item in a bright-yellow bin that travels by conveyor belt to a packing station. AI suggests an appropriate box size; a worker places the item in the box, which a robot tapes shut and, after applying a shipping label, sends on its way. Humans are needed mostly for grasping and placing, tasks that robots haven’t mastered yet.

Amazon’s robots signal a sea change in how the things we buy will be aggregated, stored and delivered. The company requires one minute of human labor to get a package onto a truck, but that number is headed to zero. Autonomous warehouses will merge with autonomous manufacturing and delivery to form a fully automated supply chain.

I got some cr*p on twitter a while back about writing this, but I think it is pretty much vindicated by the "one minute" factoid above:

Amazon likely is being pressured by the tightening labor market to raise wages anyway.  But its call for a general $15 minimum wage is strategically brilliant.  The largest employers of labor below $15 are Amazon's retail competitors.  If Amazon is successful in getting a $15 minimum wage passed, all retailers will see their costs rise but Amazon's competition will be hit much harder.

If you have a chance, walk the Brooklyn Bridge.  I like taking the subway to the stop right under the bridge on the Brooklyn side (High Street on an A or C train) and walking back, seeing Manhattan and New York harbor stretched out in front of you.  You walk on a level above the cars.

If you have a good telephoto lens (which I did not, just a handheld superzoom, so the picture below is grainy) you can get a nice angle on the Statue of Liberty from the Bridge

Other terrific walks that get you out of the concrete canyons for a while are about anywhere in Central Park, but particularly around the Ramble.  And on the High Line Park.

"Brown signed more than 1,000 bills this year. The governor Tweeted that he decided on nearly 20,000 bills in his 16 years." (source)

This is 100% the reason we have been exiting most of our business in CA and will not accept any new business there. All of our training time with managers there goes to compliance with a myriad of new interventions from the legislature.  There is no time left to improve the business, serve customers better, or get more efficient.  California has hit, at least for us, the regulation singularity where new regulations are written faster than we can manage compliance to them.

Now all these veterans of California regulation madness are fanning out into national government.  Beware.

I have a particular fondness for tracking shots (long sequences on film with a moving camera that are created in one shot without cuts).  The opening scene in Orson Welle's Touch of Evil is perhaps the most famous, but there are many other examples such as in Goodfellas and in the opening credit roll of Serenity (though what looks like one long shot is actually two in that case).

This making of video for a different sort of tracking shot is really amazing, as it juxtaposes what we see on the film with an overhead view that shows how it is being made.  Total crazyness:

update:  Here is the Touch of Evil shot:

From the recently released study, "The Unintended Consequences of 'Ban the Box': Statistical Discrimination and Employment Outcomes When Criminal Histories Are Hidden"

Jurisdictions across the United States have adopted “ban the box” (BTB) policies preventing employers from asking about job applicants’ criminal records until late in the hiring process. Their goal is to improve employment outcomes for those with criminal records, with a secondary goal of reducing racial disparities in employment. However, removing criminal history information could increase statistical discrimination against demographic groups that include more ex-offenders. We use variation in the timing of BTB policies to test BTB’s effects on employment. We find that BTB policies decrease the probability of employment by 3.4 percentage points (5.1%) for young, low-skilled black men.

This is a pretty predictable outcome, and one that was discussed in my recent paper "How Labor Regulation Harms Unskilled Workers."  The effects of these regulations are synergistic.  Taken alone, one might expect this outcome from ban-the-box.  But combine it with minimum wage laws, rules that increase the monetary risk to employers for hiring unsuitable employees, and the increased regulatory difficulty in terminating employees (particularly minorities) and the effect is likely greater.  I explain this all in depth in the paper but here is a taste:

It used to be that the worst human resource risk a company faced was hiring employees who simply did not justify their salary. However, given the current body of regulation, any poorly selected employee is a potential ticking bomb who, through bad behavior with customers or other employees, could tie up the company for years in expensive litigation or regulatory actions. But as a firm’s liability for the negative activity of a poorly chosen
employee rises, regulations are making it harder to get good information to make better hiring choices,while simultaneously making it harder to terminate employees who were poorly chosen and present threats to the workplace or customers. When employers begin to look at their employees not as valuable assets but as potential liabilities, fewer people are going to be hired.

One potential way employers can manage this risk is to shift their hiring from unskilled employees to college graduates. Consider the risk of an employee making a racist or sexist statement to a customer or coworker (and in the process creating a large potential liability for the company). Almost any college graduate will have been steeped in racial and gender sensitivity messages for four years, while an employer might have an hour or two of training on these topics for unskilled workers. Similarly, because good information on prospective employees—credit checks, background checks,reference checks, discussions of past employment and salary—all have new legal limitations, employers who hire college graduates benefit from the substantial due diligence universities perform in their admissions process.

I made a vow a while back to try to get better at appealing to progressives using their assumptions, not mine.  So here is my shot at it here.  Prejudice exists among some employers that hold a stereotype of African-Americans as disproportionately criminal.  The best way to fight prejudice is through information and education.  But ban-the-box laws and other restrictions on background checks do just the opposite -- they restrict information.  Employers who see full criminal record information, say for African-American applicants, will be struck by how few have criminal records.  "Hey, these guys are OK," I can imagine someone saying.  Without this information, all that the employer has to work with are his pre-existing prejudices and misinformation, and in that context he might avoid African-Americans thinking "they are probably all criminals."

Want to know who the largest financial supporters of "net neutrality" regulations are?  Find them here: (source)

Think about the billions of dollars your ISP has spent to upgrade the bandwidth and speed of their network.  15% of that investment went to supporting Netflix's business, often without any compensation.  Net neutrality supporters always pitch their fears as concern that little guys might get shut out or have to pay to play.  But Comcast et. al. don't give a flip about the little guys.  They are concerned about the amount of their network infrastructure used by, sometimes choked by, Netflix, Google/Youtube and Amazon.  I have run projects to put internet access into large communities (in this case campgrounds with long-term campers).  There is just an astronomical difference between the cost of a system that serves the majority of internet traffic but no video streaming and one that allows video streaming.

Let's use an analogy.  Let's say that the highways in our state are getting torn up and we want to charge users for their use so we can repair and upgrade the roads.  We propose to charge much more per semi-trailer than per car because semi-trailers with their up to 80,000 pound weight really tear up highways more than does your Prius.  But the trucking companies object!  They want road neutrality, and propose that the roads should not treat any traffic differently and all vehicles should be charged the same amount regardless of size.  In fact, they go further -- all entities should be charged the same amount so that UPS with its 1000's of trucks on the road should pay the same flat fee (or no fee) as you pay with your one Prius.  Fair?

This sort of supply chain / value chain negotiation goes on in every industry.  It is also not unusual for participants in this negotiation to run to the government to try to get rules that tilt the playing field in their direction.  This is the context in which I see the net neutrality discussion, an attempt by large content providers to hamstring bandwidth providers in this negotiation.

I know I have blogged too much about Tesla of late, and you can be forgiven for just skipping on.  However, I find the situation fascinating -- I have seen splits between bulls and bears on stocks before, but never a situation where there is such a cultural divide between the two groups. What really caused me to write this article is that I have read a number of naive and idealistic people who have written online that they have invested all their money into Tesla.  They love the car, they love Elon Musk, and they are going to trust him with all their money.  EEEEEKKK!  I am going to give my warnings about not being an investment professional in a minute, but I feel more than comfortable even as a regular guy telling you absolutely DO NOT put all your money into a single investment, particularly one you do not control.

So, disclosures:  I am not an investment professional.  I have studied the science of dissecting corporations at Harvard Business School, but I have a less than perfect history of actually trying to make money from this knowledge.   I am short $tsla via put options (a very small percentage of my portfolio), but shorting a stock like this where there is so much passion on the bull side is dangerous.  I and others recognized many of the issues I will discuss in this post over a year ago, but had we been trying to roll puts or sit on a short position all this time it would have gotten very expensive. Making this investment even more risky -- either way, long or short -- is the fact that at this point you are effectively betting on one question: Will Tesla be able to raise new capital in the next 6 months.  This is a question even the experts can't handle and as a result it is probably only safe to dabble in Tesla as a bar bet for most.

BTW, since there is a culture war over Tesla that mirrors the larger culture war in this country, criticisms of Tesla are often interpreted as being based on bad motives and evil intentions.   So I will say that despite having once worked for Exxon, I am not in the pay of the Kochs or other fossil fuel interests, and don't have an axe to grind over electric cars.  I am putting solar on my roof and I have a deposit put down on a Lucid Air.  I have a number of renewables investments in my portfolio, e.g. PEGI.

But I believe the reckoning may be coming soon for Tesla.  If you understand the risks and it is <5% of your portfolio, fine -- take a flyer.  But for any of you that have a lot of money in Tesla and maybe don't have a lot of experience investing or analyzing companies, my advice is get out ASAP.  You have a unique opportunity here that despite a lot of red flags and smoking guns, the stock still trades at a level that will get most folks out of their position cleanly.

The Tesla Passion

Tesla has an incredibly passionate customer base that overlaps a lot with its incredibly passionate investor base.  This passion is based, in part, on:

• The model S which, when it first came out, was years and years ahead of its time.  Every other electric car at the time was a joke -- the model S was a real legitimate luxury sedan one might want even if one did not care about EV's.  The later Model X SUV was also pretty good (though in my opinion not as good).  The current Model 3 is a mixed bag which we will discuss further. But suffice it to say that Tesla earned the right to be called a leader and an innovator in the field
• Elon Musk.  He seems to be passionate about the same things (the environment, hating on oil companies, etc) that his fans are passionate about.  He is involved in amazing, super cool stuff like SpaceX.  He is constantly coming up with new product and service concepts and promising them to his user base.  He responds directly to customer complaints and suggestions and generally promises everyone that they can have their fix or feature really soon.  He has created a mythology that he is Tony Stark incarnate, and many of his fans honestly believe him to be the smartest man on Earth.
• Comparisons to Apple.  Elon Musk and his fans frequently argue that they are reinventing the auto industry as Apple. with the implicit assumption that they will shift historically low auto gross margins to be like Apple's crazy-high gross margins.  How this will happen is left a little vague, but among other things there is a vision of the car as a software platform, where consumers pay recurring fees for a stream of over-the-air features and updates.
• Self-Driving.  Tesla fans are convinced that they are just days away from having full automated self-driving features in their Tesla.  Many paid thousands of dollars on faith for this feature and continue to wait patiently for it to be delivered (which it has not been), even years after paying for it.  It is an article of faith among Tesla fans that Tesla is years ahead of every other self-driving competitor because the smartest guy in the world is running the program.
• The sales process.  The sales process (which is mostly online) seems much friendlier and less intimidating than going in to a dealer, and non-commissioned Tesla employees in their small showrooms seem much more likeable to the average Tesla buyer than the average car salesman.
• Every quarter, promised new products.   Elon Musk is an absolute fountain of new product ideas.  Reading his Twitter feed is like looking through Popular Mechanics covers in the 1970s.  Solar roof tiles! Sending a man to the Moon! Martian colony! Electric Semi!  Electric pickup!  Electric coup!  Self-driving on-demand vehicle service!  A tunnel to Dodger Stadium!  A flamethrower!  The hyperloop!  A $35,000 Model 3!

But beyond all this is the cultural divide between skeptics and passionate Tesla supporters.  Tesla supporters online tend to have little or no financial knowledge or ability to analyze a company's balance sheets and operations, whereas the skeptics tend to be digging through details of balance sheets and pro formas.  One might think this would be a red flag for Tesla supporters, but in fact it just hardens their position.  All of us talking things like cash flow and quick ratios are just dinosaurs, captives of traditional narrow capitalist thinking -- exactly the sort of thing that the brilliant Elon is sweeping away.  We are the ones who are naive at best, or at worst paid short-selling agents of the internal combustion engine lobby.  I have never seen an investing situation like it, and the nearest analog I can come up with is the conflicts between Scientology supporters and skeptics.

So what exactly is the problem with Tesla?  I will name a few of the major ones here, but want to note that much of the credit for the hard investigation and analysis on many of these points go to many folks in the $TSLAQ community, a group often huddled around @teslacharts on Twitter.

Problem #1:  Tesla Has Tried to Disrupt Too Much

I have written about this before, when I said,

One of the hard parts about reinventing an industry is being correct as to what parts to throw out and what parts to keep.  Musk, I think, didn't want to be captive to a lot of traditional auto industry thinking, something anyone who has spent any time at GM would sympathize with.  But it turns out that in addition to all the obsolete assumptions and not-invented-here syndrome and resistance to change and static culture in the industry, there is also a lot of valuable accumulated knowledge about how to build a reliable car efficiently.  In Tesla's attempt to disrupt the industry by throwing out all the former, it may have ignored too much of the latter, and now it is having a really hard time ramping up reliable, quality production.

Ditching the ICE, throwing out assumptions that PEV's had to be silly little econoboxes, and thinking about cars as a software platform are all awesome disruptions and fundamental to the Tesla competitive advantage.  But at the same time Tesla was doing this, it also attempted to throw out 100 years of auto industry learning on manufacturing and selling cars.  On the manufacturing end, Musk promised an "alien dreadnought" with machines that moved so fast humans wouldn't even be allowed in the building.  Tesla has not been able to make this work, and as a result has had to try to relearn old rules of car manufacturing on the fly.  This has hurt both their capacity ramp as well as their product quality.

On the sales end, Tesla wanted to do away with traditional dealers, and the Tesla owners I know loved not having to buy from a car salesman.  But they did not come up with anything to replace the dealer system -- cars still need to be delivered, inventoried for sale, and repaired.  All of these have been huge problems for Tesla in what Musk has called "delivery hell."  Tesla has factory workers moonlighting delivering cars, it has inventory tucked away in all kinds of weird ad hoc lots, and Tesla owners often have to wait months for car repairs, usually because Tesla doesn't build enough spare parts.

Note that Tesla has also saddled itself with building out the entire world fueling network for the car.  ICE car makers can depend on already existing gas station infrastructure.  One could imagine that Tesla might have partnered with someone else to do this -- perhaps a large electric utility or a consortium of other car makers -- but instead has gone it alone building proprietary Supercharger stations across the country.  Time will tell if this makes sense -- it could create a competitive moat protecting it from new competition but it also costs a LOT of capital and leaves them vulnerable to being the odd-man-out of some sort of shared network.

I will end this section by recalling the comparison of Tesla to Apple that so many of its supporters make.  But as far as the iPhone is concerned, Apple is a design and software house.  It does not build the phones, it has a partner do it for them.  It does not write most of the applications, third parties do that.  And (at least in the early days) it did not see through its own stores, it sold through 3rd parties.  An Apple-like Tesla would NOT be trying to build its own manufacturing, service, and fueling capacity -- it would leverage its designs as its unique value-add and seek others to do these other lower-margin, capital-inensive tasks.

Problem #2:  Tesla is Out of Capital (to Operate or Grow) And Seems Unable to Raise More

Tesla has never been profitable and continues to burn through a lot of cash.  It burned through a couple of billion dollars in 2017 and more this year, and right now probably has less than $2 billion on hand with a lot of funding needs, including over a billion dollars of debt that is maturing over the next 6 months.  Tesla may not have the cash even to cover its operating needs over the next 12 months, as Tesla has not been able to prove it can produce the model 3, or any of its vehicles, at a gross margin that will sustain the company's fixed costs.

But forget about operating losses for a moment -- you can go to twitter and argue these to death, and I will address it again below.  But what of Tesla's growth?  Tesla's current factory space is maxed out, so much so that they are building some Model 3's in a big tent.  The Tesla growth story depends on the promised pickup truck and semi truck and coupe, but there is absolutely no place to build them right now -- a place to build them has not even been started and Tesla does not have the capital to create these assembly lines, or likely even to finish the product design.  And even ignoring these, what about the next generation Model  S and X?  In the auto industry, car designs are typically refreshed as a minimum every 4-5 years.  The Model S will be 5-years-old in December of this year.  Where is the new second generation model?  Tesla has enjoyed a 5-year head start on anything like comparable competitive vehicles.  Now, a slew of challengers have been announced and will start appearing in dealerships in 2019 -- Tesla has perhaps 1 more year to buff up its product line before it has real competition.

Besides the car development and production issues, remember we also discussed that Tesla has chosen to build out its own fueling, new car distribution, and car servicing network.  The current distribution issues and servicing complaints make clear that a LOT more capital is going to be needed in these areas.  Capital is needed to inventory parts, to create dedicated storage and delivery centers, and to add more servicing capacity.  Add to this Elon Musk's recent promise to bring body work on Teslas in house and thus create a whole body shop network, and that is a LOT of capital that Tesla does not have.  It is clear to me (though maybe not to Tesla fans) that this capital is not going to come organically through large positive cash flows from operations.

Tesla really needed to raise $5 billion in early 2018.  Its stock was riding high over $350 and its shareholders did not seem to care one bit about dilution.  Why Tesla did not do a capital raise when the money was there and the cost of capital was so low is a total mystery to pretty much everyone.  If nothing else, Elon Musk is absolutely obsessed with "burning the shorts" and the shorts all agree that the one thing that might hurt them in the short term and drag out their returns for years is a large capital raise.  So why not?

One prominent theory among short-sellers and Tesla skeptics is that there is some sort of grand secret inside Tesla -- an investigation or a bad set of numbers or even some kind of accounting fraud -- that prevents Tesla from making the disclosures necessary to go to the capital markets.   I am not sure this makes sense -- what secret could be so bad and still stay secret for so long?   The fact that Tesla seems to hemorrhage senior accounting officers, finance VPs, and controllers just adds to the mystery.  Whatever this mystery barrier to capital raises has been, it has only gotten worse with Tesla's recent SEC investigations and on-again-off-again settlements.  No matter what, the result is that Tesla is starved of capital and apparently cannot easily get more.

If you buy or sell Tesla, this is essentially the question you are betting on -- Can Tesla raise capital?  If they can't in the next 6 months, they are likely headed for bankruptcy or restructuring (but either way wiping out most of the equity holders).  On the other hand, if they were to announce a multi-billion dollar capital raise tomorrow, the stock would rocket back in to the high 300's and all the shorts would be at least temporarily burned (though Tesla would still have long-term structural challenges).  This is why it is inappropriate to have much more than a small piece of your portfolio either long or short Tesla -- you are effectively betting on whether this capital raise will happen and even the experts can't fathom it.  I think it won't happen for the simple fact that if it could have happened, it should have already occurred, but I could be wrong.

Problem #3:  Tesla is an Operational Mess and Not Good at Fulfilling Promises

Elon Musk makes a lot of promises, promises that get a lot of folks excited, but very few of these promises are ever met.  In the long list of promises I listed right up at the top, very few if any have been fulfilled.  For example, Tesla still is not anywhere near the production rates for the Model 3 that Musk promised it would reach over a year ago, a promise so clearly broken that Tesla is being sued over it.  Musk claimed as many as a half-million pre-orders for the Model 3 mainly on Musk's promise to sell it for net $27,500  ($35,000 less the $7,500 federal tax subsidy).  Now the $35,000 version is not even on the manufacturing plan (Tesla still can't figure out how to make money on it) and it certainly will never be produced before Tesla starts losing the $7500 subsidy after December.

For years Musk has pulled new product rabbits out of his hat every quarter, just when he needed them to complete financing or an acquisition.  After the the stock pops up in response, little is ever heard of the suggested product again.  The battery swap technology that got California to give Musk bigger subsidies has completely disappeared from the radar screen.  Musk demonstrated what he said was a completed solar roof tile technology just in time to sell Tesla shareholders on the idea of bailing out SolarCity, but again the technology has never materialized and SolarCity has essentially been shutting down, with fewer new installations each quarter.   The same was true of the Semi truck, released to great fanfare but totally MIA today.  And beyond these promises are crazy, clearly inaccurate promises from Musk that they are taking all body shop work in house immediately or that they are producing their own auto carriers to alleviate a supposed auto carrier shortage.  And even this does not include the small promises he has made almost every day to users to add this or that new feature.  It is almost as if Musk has a psychological need never to admit that there is a problem for which he has not already implemented a solution.

Worse, the products Tesla is making are not fulfilling Tesla's early promise.  Specifically, Tesla fan boards have been full of stories about delivery defects in new Model 3's, including parts that fall off and body panels painted the wrong color.  Leaks from inside the factory have hinted at first-pass yields on the model 3 that are close to the worst in the entire auto industry.  To try to keep investors happy, Tesla has promised that they would produce 5000, and later 6000 model 3's a week, but rather than achieve sustainable production at these levels the factory has engineered a couple of crazy push weeks where production is juiced to these levels, and then falls back to lower rates.  This is probably one reason for the quality problems, and certainly is not a recipe for reducing production costs.

Problem #4: Q32018 May be Tesla's High Water Mark

Which brings us to the 3rd quarter results, which should be announced in just a few weeks.  Musk has been vociferously promising for months that Q3 and Q4 would be GAAP profitable and cash flow positive.  He went so far as calling out the Economist Magazine for having the temerity to suggest that this did not sound realistic.

Perhaps as a result of this very public commitment, Tesla has very clearly pulled out all the stops to really juice the third quarter.  For example:

• It carried over a lot of inventory from Q2 to be sold in Q3
• It has mined its order book to find all the folks who have ordered the most profitable cars.  It abandoned the promised first-come-first-served manufacture-to-demand approach to focus on batch producing cars for those who ordered the highest margin versions.
• It has mined two years of orders and sold them all in one quarter
• It has reportedly done a sale and leaseback of all its demonstration and loaner fleet
• It has reportedly taken full payment from multiple people for the same car, delivering it to one person and holding the money from the other for a 4Q delivery.
• It has stretched out the time it takes to repay deposits for cancelled orders to 45 days
• It has stretched its payment to vendors, resulting in a number of vendor complaints.  As a result its net working capital has gotten more and more negative.
• It has had special end-of-quarter sales of inventory
• It has used expensive promotions (e.g. free Supercharging for life) that it promised earlier not to use again in order to move inventory at the end of quarter
• It has switched to batch production from produce to order in the factory, presumably to cut costs and increase throughput but having the effect of creating inventory for which there is no current buyer.
• Once it was too late for manufactured cars to get sold in the quarter, it cut way back on production in the last days to conserve cash.
• Tesla has some undisclosed number of government ZEV credits it can sell, which would lead to a one-time increase in profits and cash flow.  Tesla takes advantage of a loophole in GAAP accounting to leave these off their balance sheet, presumably so they can act as Musk's personal burn-the-shorts slush fund.

It is not clear if this will result in a small profit or positive cash flow.  The problem is that whatever Q3 results are, they will be almost impossible to duplicate in Q4.  Tesla will likely talk about what a growth trajectory Q3 represents over previous quarters, and they will be right, but what will be missing from the story is how nothing will be left in the tank for Q4.

The following is essentially speculation, because Tesla refuses to answer any questions about their order backlog.  In fact, Musk famously blew off an analyst in a previous conference call who tried to inquire about the order backlog.  But there are good reasons to think that the backlog of profitable customer advance orders and deposits is tapped out, that Tesla in Q3 has serviced everyone in the backlog who wanted a car that could be produced at a reasonable gross margin and everyone else in the backlog are folks who ordered cars, particularly the $35,000 Model 3, that Tesla has no intention of building any time soon because they would lose their *ss doing so.  In this context, Q3 is not an organic quarter in the midst of a growth trend but a manufactured quarter where over 2 years of pre-orders were tapped in one three month period, leaving nothing in the tank for the future.

The evidence for flattening demand for Tesla is pretty compelling.  Model S and X sales volume has basically been flat for over a year.  And as for Model 3, the unsold inventory tucked away in random locations combined with the desperation fire sales at the end of Q3 point to a saturation of demand.

Note that a flattening of demand has a double whammy for Tesla.  First, it means that their stock valuation will likely crash.   Tesla's valuation at huge multiples of revenue (there is no profit) only makes sense for a rapid growth company.  If the rapid growth tails off, the valuation will come to Earth.

And this is not even the biggest problem.  Let's take a step back.  In the old days, say in the 1980's, growth was a consumer of cash.  This is because manufacturing and inventory cycles were long.  Growth meant investing in more parts and production now, only to get higher revenues later -- working capital skyrocketed with growth and could nearly bankrupt otherwise healthy growing companies.

Today, however, supply and manufacturing chains are much shorter.  Products can be produced and sent to customers before the vendors are even paid.  Dell computer was an innovator on this, getting paid by customers for a PC before Dell itself had paid for any of the parts.  Combine this with Tesla's innovation of having customers put down deposits on their cars months or years before the sale, and this means that growth actually creates cash for Tesla as working capital becomes more negative.

I have the same thing happen in my seasonal business.  Through the spring, as I hire people and visitation to our campgrounds increases into the summer, we get big increases in revenue immediately while we don't have to pay new hire salaries for a couple of weeks or expenses like trash for months.  Growth generates cash because we get the revenue before we pay the expenses.  But the whole thing reverses itself at the end of season, as revenues fall and all the bills come due.  This negative cash flow effect as revenue growth reverses at the end of the operating season almost bankrupted me the first couple of years until I learned to plan for it.

In the same way Tesla has been getting positive cash flow (via negative working capital) from growth, but this will reverse the moment that growth slows.  When their growth inevitably slows in the fourth quarter, no matter how well they claim to have performed in the third quarter, Tesla is going to see a huge cash crunch.   I am not sure they will have the cash to cover it, and smarter people than I are betting on a Tesla bankruptcy or restructuring in the next 2-3 months.  Any such event will largely wipe out equity holders.   Which is why I am advising you to keep away.  Elon Musk and Tesla may have some double-secret plan to avoid this cash crunch, but are you willing to bet your savings on it?

Problem #5:  Elon Musk is NOT the Smartest Man on Earth

The ultimate answer to all these concerns about Tesla by Tesla fanboys is that they have confidence in Elon.  I see people write on boards, dead seriously, that Elon is the smartest person in the world.  One wrote two days ago that they thought he was the smartest guy in history.  They have confidence that Elon will make things work out, and that Elon will always be able to attract new capital because everyone in the world feels the same love for Elon that they do.

Here is the problem:  Elon Musk is not the smartest guy in the world.  He is clearly a genius at marketing and brand building.  He has a creative mind -- I have said before he would have been fabulous at coming up with each issue's cover story for Popular Mechanics.  A mile-long freight blimp!  Trains that run in underground vacuum tubes!  A colony on Mars!  But he suffers, I think, from the same lack of self-awareness many people develop when they are expert or successful in one thing -- they assume they will automatically be equally as brilliant and successful in other things.  Musk creates fanciful ideas that are exciting and might work technically, but will never ever pencil out as profitable business (e.g. Boring company, Hyperloop). Musk is not good at managing operations or manufacturing.  He does not seem like a very good planner, which should be a must in a business with long lead times and billions in capex.  He has brought too much of the "fake it before you make it" culture from the web world, where the stakes attached to unsuccessfully faking it are so much lower than they are in, say, the car business.  This natural tendency to overestimate one's abilities is just made worse by all the fan attention that constantly tells him he is the real Tony Stark and the Smartest Man on Earth.

SpaceX works pretty well because someone who is not-Musk and actually knows that business runs the operations and designs the product.  Even in Tesla, the Model S was designed by someone else, as much as Musk would like to claim credit.  I have said for over a year that Tesla needs to find the right role for Musk and it is NOT CEO and COO and CTO and chief Tweeting Officer all in one.   Tesla needs Musk at this point as their face to the public.  He would be a good chairman and could help lead the company's product road map.  He is great at communicating exciting things to the public -- within limits.

The "within limits" proviso in the last line is based on what is surely Musk's worst flaw -- he can be a petulant, impulsive, unreliable child on Twitter.  I won't go into all the stories, most of them made the national news, but  he tried to insert himself into the Thai cave rescue story and when his contribution was not useful, called out one of the rescuers as a pedophile.  He frequently is obsessed with short-sellers and taunts them with promises to burn them.  He reacts poorly to criticism and bans a lot of critics on Twitter.  And, most disastrously, he tweeted that he had funding secured for a $420 buyout of Tesla that caused the stock to shoot up, only to fall back to Earth when it was revealed that no such offer existed.  This latter event was a clear violation of SEC rules, and after an SEC investigation Musk and Tesla settled with the SEC.  But even that was not the end, as Musk then repudiated the settlement, and then two days later signed a new more onerous settlement, and then a few days after that mocked the SEC over twitter in a clear violation of the terms of the settlement he just signed.  Which is where we sit today, waiting to see how the SEC responds to this latest outburst and with rumors swirling that other SEC and justice department investigations may be in progress at Tesla.

Which leads to the question -- is Musk just immature on Twitter, or is he actually corrupt ala Elizabeth Holmes at Theranos or the smartest guys in the room at Enron?  People might respond that Musk is a brilliant, visionary guy -- he can't be corrupt!  But my wife who has to have her blood tested a lot loved Elizabeth Holmes and her vision.  I personally worked with Jeff Skilling briefly at McKinsey before he went to Enron and he was both visionary and a real genius.  The way he introduces new products right when he needs an external boost, and then drops them, looks a lot like a stock-pumping operation.  And I personally think the Tesla bailout of SolarCity was completely corrupt -- it benefitted Musk and his friends and family at SolarCity and did less than zero for Tesla shareholders.

*     *     *

That is the situation as I understand it.  If you still want to make a big bet on Tesla, one way or other, hopefully you are a bit better informed of the risks.  Trade carefully, as the saying goes.  Or do as I do, and just watch the show because it is enthralling.

I try to read an equal number of blogs from the Left and Right.  Now, I am not a masochist so I try to choose the more intelligent folks on both sides (if true dedication to avoiding an echo chamber were to rely on reading both Sheriff Joe Arpaio and Maxine Waters each day, then I just can't do it).

So let me tell all you partisans out there from both the Coke and the Pepsi team something I see every day:  Both your sides believe and say the exact same things about the other side.  Seriously, almost word for word, I could write a book where we just show side by side quotes.   In particular, every partisan fervently believes that their party is too nice and milquetoast and well-behaved to win all the battles it should against the other party, which is devious and bare-knuckles and unconstrained by any ethics.

In the past, the majority of each party seemed willing to accept this lamentable state of affairs and claim the high ground, even when that might amount to a Pyrrhic victory (e.g. Michelle Obama:  "The go low, we go high" or many of the Republican never-Trumpers).

The problem is that when this desire for the high ground breaks down, then all that is left is an ugly realpolitik arms race to the bottom.  It has taken me a long time to really digest the surprising (at least for me) Trump victory.  I have friends that are hard-core partisans for both parties (yes, I know this dates me as failing to pre-screen my friends for political orthodoxy seems a sin nowadays).  I see the same attitude in my Republican friends -- yes we find Trump distasteful in a number of ways, but he is the first national Republican we have seen who will fight down and dirty with Democrats and win political victories.  You see this same attitude on Twitter with Republicans metaphorically carrying Lindsey Graham (!!) around on their shoulders in celebration this week.

Politics are like the NFL -- people emulate what seems to be winning.  Bill Walsh won with the West Coast Offense, and soon there were 30 teams running the West Coast Offense.  The Democrats are going to be looking for the Trumps as well.  I don't know how it doesn't get ugly.

The Democrats' issue du jour seems to be that the Senate is undemocratic and needs to be abolished.  The argument is that it is not fair that states get two seats each in the Senate regardless of their population, so that the tiny population of Wyoming has the same number of Senate votes as the huge population of California.  These concerns are related to Democrats' frustration with the electoral college, whose votes do not strictly match population because each state gets delegates equal to their number of representatives plus their number of Senators. These are small state protections that evolved as part of a compromise between the 13 states in the original Republic.  A few thoughts on this:

1. This is an oddly-new concern from Democrats.  They controlled as many as 60 Senate seats as recently as a decade ago.
2. The non-democratic nature of the Senate is in its very DNA.  Until the late 19th century Senators were not even elected by popular vote, but by a selection process in the state legislature.
3. For those who treat politics as the be-all-end-all of their lives, this provides an outstanding arbitrage opportunity -- move from California to Wyoming and immediately greatly increase the power of your vote.  I lived in Wyoming for a bit on a ranch south of Glenrock (30 minutes by dirt road from a town of 2000).  Hipsters are warned that they might find it difficult to locate a starbucks or good sushi there.
4. I am not sure one would design a Senate today the way it was designed 200+ years ago.  But, it has mostly worked.  I am not a Burkean Conservative, but I do think that there needs to be a little more reason than a lost Presidential election and one loss on a Supreme Court confirmation to modify a system that has worked for a long time.
5. It would be an interesting discussion as to whether the structure of the Senate were positive or negative in the runup to the Civil War.  The obvious answer is that it was bad, in that it forced odious compromises with slavery since the South controlled half the Senate despite its much lower population.  On the flip side, though, one might argue that things could have even been worse had the North not been forced to engage the South for so long to make any legislative progress.  What if the South had left the union 20 years earlier, would the North have had the strength or will to defeat them in 1840?

But here is the real reason that the allocation method of Senators (and Electoral College delegates) is absolutely NOT going to change so that this whole discussion is pointless:  Changing these rules in any way requires a Constitutional amendment.  Such an amendment, to become law, must be ratified by 3/4 of the state legislatures or 38 as things stand now.  But at least half (and probably a bit more since a few states are so damn big) of states will see their power decrease under such rule changes.  Is Wyoming going to vote yes?  Montana?  I am pretty sure there are at least 13 no votes on this.

So stop whining and deal with it Democrats -- you had a filibuster-proof majority in the Senate just over 10 years ago, win some elections and get it back.

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

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

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

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

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

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

Long-time readers know that solar roads are like catnip for me -- I can hardly think of a better example of a technology that makes absolutely no sense but gets so much passionate support and funding.  If you are not sure why, here is a primer on why they are predictably awful.

So it turns out that the solar roads I was sure would not work have actually now been built and... they don't work.

One of the first solar roads to be installed is in Tourouvre-au-Perche, France. This has a maximum power output of 420 kW, covers 2,800 metres squared and cost €5 million to install. This implies a cost of €11,905 per installed kW.

While the road is supposed to generate 800 kilowatt hours per day (kWh/day), some recently released data indicates a yield closer to 409 kWh/day, or 150,000 kWh/yr. For an idea of how much this is, the average UK home uses around 10 kWh/day.

The road's capacity factor – which measures the efficiency of the technology by dividing its average power output by its potential maximum power output – is just 4 percent.

In contrast, the Cestas solar plant near Bordeaux, which features rows of solar panels carefully angled towards the sun, has a maximum power output of 300,000 kW and a capacity factor of 14 percent. And at a cost of €360 million, or €1,200 per installed kW, one-tenth the cost of our solar roadway, it generates three times more power.

There is much more.  I am embarrassed to say that when I slammed solar roads all those years, I actually was missing an important problem with them:

Unable to benefit from air circulation, its inevitable these panels will heat up more than a rooftop solar panel too.

For every 1 degree Celsius over optimum temperature you lose 0.5 percent of energy efficiency.

As a result a significant drop in performance for a solar road, compared to rooftop solar panels, has to be expected. The question is by how much and what is the economic cost?

I will add this to the list, thanks.

When I write stuff like this, I get the same kind of mindless feedback that I get when I point out operational issues at Tesla, ie "you are in the pay of the Koch brothers" or "you have no vision."  Well, I am actually putting solar on my roof and will get (hopefully) 45,000 KwH per year, which is about a third of the energy they get from this road but installed for a bit over 1% of the cost of the road.  And the panels are all ideally angled and placed, they are up in the air with absolutely no shade on them at any time of the day, and they don't have any trucks driving over them.

This came across my desk from one of my campground managers via our internal incident reporting system.  I swear we in this country are having a collective mental health breakdown.  Names obscured to protect privacy:

LadyA was walking by a campsite that was occupied by an unrelated group that was having a discussion and President Trump was mentioned in the conversation. At that point LadyA inserted herself into the conversation and began to curse at them. LadyA then proceeded to her campsite and passed by another camper and began to curse her and her dog. At this point I was driving by when a camper stopped me and informed me of the situation. I proceeded to LadyA's campsite where I found her sitting in a chair and screaming and cursing loudly. I tried to calm her and she was upset to the point where I could not calm her down. She was also on the phone with her friend who had called and was trying to calm her down also. She then began to curse me and when I asked her to stop or I would have to call the County Sheriff's Office, she became combative and I removed myself from the situation and contacted the sheriff's office.  When the Officer arrived we found she had been consuming numerous beers and she was combative to him and he was forced to arrest her and remove her from the campground.  At this point I refunded the last three nights of her reservation. LadyA's friend came in later and removed her belongings.

I will add that I get political emails from both major parties and from their increasingly shrill and over-the-top tone, I wonder if this isn't exactly the kind of citizen both parties are trying to create (as long as they vote the right way).