Coyote Blog

Via Zero Hedge:

A pair of New York politicians has introduced legislation that would force consumer goods corporation Procter & Gamble to make their Tide Pod product less appetizing to human beings.

If passed, Senate bill S100A would require liquid detergent packets sold in the state of New York to be “designed in an opaque, uniform color that is not attractive to children and is not easily permeated by a child’s bite.”

The bill further states that each Tide Pod packet should be “enclosed in a separate, individual, non-permeable, child-resistant wrapper” and that the package they come in should have a warning label saying the product is “harmful if swallowed.”

These two legislators get their one news cycle of fame from this and 24 hours of virtue signalling how much they care, and the rest of humanity has to live with their stupidity for decades.

Even beyond the self-serving stupidity of even introducing such legislation, its specifics are even dumber, making sense only if the recent Tide pod consumption was somehow accidental, like an infant putting it in her mouth.  This regulation would have done pretty much zero to stop the recent insane social media challenge that drove a few people to eat these things.  Now when I put my little pod in the dishwasher, am I really going to have to struggle to get the thing out of some child-proof wrapper?  We can't just put every one in unopenable blister pack and be done with it?

I am mostly going to leave highways out of this post.  Most evidence I have seen is that the numbers do not actually show highway infrastructure to be getting worse.  To the extent highways are underfunded, in my mind it is because gasoline taxes paid by drivers and meant for highway repair and construction have been shifted to grand projects like light rail that get politicians excited but carry at least an order of magnitude fewer passengers per dollar spent than do highways.

But in worlds I am more familiar with - government transit agencies and parks agencies - there has been a real deterioration of infrastructure.   Systems like the Washington Metro clearly are falling apart and most public parks and recreation areas have huge deferred maintenance accounts that are growing every year.  California State Parks and the National Parks Service alone have deferred maintenance tallied well into the tens of billions of dollars.

Most of these agencies will argue the problem is -- wait for it -- that they are underfunded by their legislatures.  But this is not the case in my experience.  My company routinely takes over public parks that some government agency said were too expensive to remain open and profitably reopens them to the public -- not only keeping up with the maintenance but paying to catch up on all the maintenance the agency let slide when it was operating the park.

The problem is that most agencies, whatever their stated public purpose and mission, tend to be run for the benefit of their employees.  I understand some but not all the reasons for this, but it is simply an observable fact that this happens time and time again.  This means that the priority is to build up large staffs with good pay and large benefits and retirement packages.   Worse, the preference is usually to build up headquarters and administrative staff, rather than staff that actually does stuff like serve the public or fix things.  When cutbacks need to occur, the priority order always is: cut maintenance first; cut field staff actually doing useful things second; cut administrative staff only in case of the apocalypse; cut benefits packages never.

Deferred maintenance is the way that agency's can borrow without transparency and without any outside authorization to do things like maintain staff in the face of cutbacks.  In effect, the agency is borrowing against the infrastructure the public has built to help fund staffing levels and benefits.  What is deferred maintenance?  It is all kind of things.  It is having one out of three toilets in a bathroom break and just roping it off rather than fixing it.  It is allowing potholes to multiply in the road without repair.  It is constantly chasing more and more leaks in an underground water line and not just replacing it.  It is an acknowledgement that all manmade things have a fixed life.   Take picnic tables.  Let's say a type of picnic table in a campground, of which there might be hundreds, lasts about 10 years.  That means a responsible person should budget to replace 10% every year.  But what if we skip a year?  No one will probably notice if some old tables slide from 10 to 11 years old, and we save some money.  But really we are only borrowing that money, because we will need to do twice as many next year.  But then we do it again the next year, to borrow more, and the bill just increases for the future.  Before you know it, the NPS has $12 billion in deferred maintenance, a $12 billion debt for which there is little transparency and no legislative approval -- and the interest on which all of us in the public pay when we have to live with these deteriorating public facilities.

I have written about this many times, but here is what I wrote about Arizona State Parks several years ago:

At every turn, [Former Arizona State Parks Director Ken] Travous made decisions that increased the agency's costs.  For example, park rangers were all given law enforcement certifications, substantially increasing their pay and putting them all into the much more expensive law enforcement pension fund.  There is little evidence this was necessary -- Arizona parks generally are not hotbeds of crime -- but it did infuriate many customers as some rangers focused more on citation-writing than customer service.  There is a reason McDonald's doesn't write citations in their own parking lot.

What Mr. Travous fails to mention is that the parks were falling apart on his watch - even with these huge budgets - because he tended to spend money on just about anything other than maintaining current infrastructure.  Infrastructure maintenance is not sexy, and sexy projects like the Kartchner Caverns development (it is a gorgeous park) always seem to win out in government budgeting.  You can see why in this editorial -- Kartcher is his legacy, whereas bathroom maintenance is next to invisible.  I know deferred maintenance was accumulating during his tenure because Arizona State Parks itself used to say so.  Way back in 2009 I saw a book Arizona State Parks used with legislators.  It showed pictures of deteriorating parks, with notes that many of these locations had not been properly maintained for a decade.  The current management inherited this problem from previous leaders like Travous, it did not create it.

So where were those huge budgets going, if not to maintenance?  Well, for one, Travous oversaw a crazy expansion of the state parks headquarters staff.    When he left, there were about 150 people (possibly more, it is hard to count) on the parks headquarters staff.  This is almost the same number of full-time employees that were actually in the field maintaining parks.  As a comparison, our company runs public parks and campgrounds very similar to those in Arizona State Parks and we serve about the same number of visitors -- but we have only 1.5 people in headquarters, allowing us to put our resources on the ground in parks serving customers and performing maintenance.  None of the 100+ parks we operate have the same deferred maintenance problems that Arizona State Parks have, despite operating with less than a third of the budget that Travous had in his heyday.

Arizona State Parks has a new Director, but its the same old story.  They have complained about deferred maintenance in the parks for years, but when times are good (and I can tell you all of us in public recreation are having visitation records the last few years) they use the extra money to add headquarters staff and pay headquarters staff more.

State Parks, which receives no state general-fund money, saw a record 2.78 million visitors come to its parks for the fiscal year that ended June 30. The agency generated nearly $17.9 million largely from park fees, another record.

The result: Black has been generous with pay for people she has brought on staff. Some salaries are up to 32 percent higher than what her predecessor paid for the same positions. And she has approved raises of up to 25 percent for some carry-over staff as more money rolls into the agency's coffers....

Meanwhlile, records show [former director Bryan] Martyn's top two deputies were paid $110,250, while Black pays her top assistant $142,000 — 29 percent more. Black brought in a new development chief at nearly $105,000, a 32 percent bump over what the position paid under Martyn.

Black also boosted the pay of the natural-resources chief, who also worked for Martyn, by 25 percent, to $84,000 a year.

State Parks payroll records show Martyn, around the time he left, had 41 staffers making more than $50,000 [incredibly this is apparently personal staff, not the total headquarters staff]. Black had 58 staff members in March making more than $50,000. Black also brought in staff at higher salaries than what Martyn paid, giving some holdovers significant raises.

An agency spokeswoman said Parks is increasingpay to recruit and retain talent, and staffers are dealing with more visitors.

Black said she also has increased the pay of those in the field.

So, as we see some really good years in public recreation, Arizona State Parks is using the extra money to pay staff rather than address fundamental infrastructure issues.   Anyone want to guess what will happen when the next downturn comes?  Will administrative pay be cut?  Will headquarters staff be cut?  Or will maintenance be cancelled and parks closed?  Place your bets.

When companies or other entities get into debt holes they cannot climb out of, their debt is restructured and perhaps partially forgiven or even bailed out, but rules are put in place to ensure more responsible financial behavior in the future.  The same needs to be true of infrastructure spending.  These agencies got themselves into the deferred maintenance holes they are in.  They cannot get out without a bailout, but we should understand that it is a bailout of these agencies and there need to be conditions attached to the funding tied responsible maintenance spending by the agency itself.

This is really staggeringly good news.  Malaria has, through history, been one of the deadliest infectious diseases (though of late my understanding is that it has been surpassed by HIV).  One of the problems with malaria is that for every death, many more are rendered unable to work for long periods of time, a drag on productivity in economies that already have trouble producing sufficient food and other goods.

From the WSJ:

For weeks, high school debater Benjamin Waldman rehearsed his argument affirming the resolution that the criminal-justice system should abolish plea bargaining. Now that it was time to speak, he took a deep breath and let it rip.

“...thecriminaljusticesystemisareflectionofandapplicationofthelawandimpositionofpunishments.Pleabargainingwasamechanismforthesejudgestomaintaintheirvastpoweranddiscretion…”

After six minutes of speaking at this blinding pace, topping out at 300 words a minute, the 15-year-old sat down, ready for his foe’s cross-examination.

To impress judges, they had to pack into that brief time arguments of intellectual depth and complexity, complete with citations of legal scholars or philosophers. Any point left unrebutted could be deemed conceded. Every word had to be read aloud for the judges to score it. The result was speech at roughly the pace of a cattle auctioneer.

Rather than focus on logical arguments made cogently and elegantly, the approach in my day (and it appears today) was to carpet bomb the other side with as many arguments as possible and claim victory on any points that were not rebutted.  The standard for both argumentation and rebuttals was lame, with a quote from some source, likely both weak and quoted out of context during summer camps where evidence is compiled, usually good enough to check the box.  The skills taught are apropos of pretty much nothing.

The other problem that existed in my day, and which I am told still obtains in various forms, was that every argument had to save us from a nuclear war.  You couldn't win with intelligent but modest policy tweaks.  We actually had a big poster with an atomic mushroom cloud on which we would keep score of the number of nuclear wars saved or caused by our teammates.  I swear I heard debates about things like ocean fishing and mineral rights where most of the discussion was around avoiding a nuclear war.  It was simply nuts.

'nuff said

Y'all know I have a certain distaste for Elon Musk's rent-seeking, but as I have written before there is nothing much cooler than several billionaires competing at space travel.   The video below is of today's apparently succesful Falcon Heavy launch, but while the launch is as cool as always, what was really new and beautiful was the near simultaneous side by side landing of the two booster rockets.   Booster landing starts around the 36:30 minute mark.

I will say that Musk's promotional abilities do remind me sometimes of DD Harriman.

I am a flaming hypocrite on this topic, because my company does not accept Amex, but for travel, particularly if it is a shared family card you are giving your kids, don't use Visa or Mastercard.  Most banks have systems now that are simply hair-trigger in freezing an account if they see a charge they don't expect, which generally means a charge in a new city, ie when you are travelling.  It is merely irritating on my own card, as I have to call and get it turned back on (which can be a pain in certain foreign lands) but it creates a real problem for my kids.  Twice my son has been travelling and twice they have immediately shut down his card.  When he called, they would not talk to him so he had to find me somewhere and I had to call them to verify a charge.  But since I did not make the charge I have to call my son back and then call the credit card company back.  All the while my kids are without any way to charge because this likely is their only card.

There are things you can try to do to avoid this, such as remember to contact the card issuer to warn them when you will be out of town, but this only has mixed success and trying to have my kids remember to do this is a tough proposition.  In my experience, perhaps due to their background as a travel company, Amex is far, far less likely to have travel to new lands trigger these sort of pre-emptive account shutdowns.

Postscript:  I don't get a commission, but I have the Starwood Hotels Amex.  One Starwood point per dollar spend on the card is a great deal.  Starwood points are very valuable, as loyalty points go.  Now that they are merged with Marriott, they can be traded 1 starwood point for 3 amex points.  Also, they can be exchanged for most airline points for 1 starwood point to 1.25 airline points.

Reading dueling analyst reports on Tesla.  I can't think of another high-profile stock where there is so little consensus, where the range of opinions covers the whole spectrum.  With their quarterly earnings call tomorrow, it should be a most entertaining day.

Those who have read this blog for a while know that I have an up and down history with Twitter.  I think it is a perfectly valid platform for sharing breaking news, following celebrities, posting cute animal pictures, and notifying folks that blog posts or longer articles are available.  I have always used Twitter for the latter function, and for those who follow me there, I will still use it to automatically publicize my blog posts.

From time to time, though, I have dived deeper into Twitter and tried to use it to actually have conversations and discussions about certain topics.  The first time I tried this I had to get off after a month.  I reported here that Twitter was making me both unhappy and a worse person, the latter because I fell quickly into the Twitter trap of going for zingers and gotchas rather than treating people's arguments civilly and with nuance.  A few days ago I gave it one more try, perhaps unfortunately the day after Trump's state of the union.  In the process I came to a final conclusion that Twitter is an impossible platform for political discourse, at least for me.  I am open to considering that the failure is in part my own, that I am simply incapable of making the kind of arguments I want to make within the Twitter character limit.   Never-the-less, I have deleted my twitter app from my phone so I will not be tempted to dive back in when I am stuck in the doctor's waiting room.  I will still scan it to see what is going on, but if I want to respond to something, I will do it here.

Just for fun, I thought I would dig through the detritus of my last 48 hours on Twitter and see if I could pull up a few examples of just what drove me crazy.  I want to make it clear that I am not leaving because people *gasp* disagreed with me, but because that disagreement was embodied in really poor discourse, the poverty of which I think is necesarily related to the nature of the platform.  After considering several, here is a good example of why I left.

It started with my seeing this post in my feed from a guy named Nick Searcy.  I don't really know who that is, but he is not just some rando with 8 followers, he has almost two orders of magnitude more followers than I.  He wrote:

Democrats want an Open Border policy.

Why don't they want an Open House policy?

Why should you be able to lock your doors at night? That is so discriminatory! What if someone needs something?

— Nick Searcy, Stable Genius (@yesnicksearcy) January 31, 2018

While there are some solid arguments for why truly open borders might not work in today's USA, I have always considered this analogy of a country's borders to private property boundaries to be a really weak argument.  Not only weak, but one that dangerously undermines the meaning of private property and makes it harder to defend the property rights that Conservatives say they support.   I actually wrote hundreds of words on this argument here, so you can probably guess I struggled to respond to this in one tweet.  I tweeted:

Because only in a socialist does one entity own the entire country like it is their property. If I want to hire someone from Mexico in my business, and I want to rent that person a place to live on my property, why do you get to lock the door barring that person from my property?

— Coyoteblog (@Coyoteblog) January 31, 2018

(lol, the unmentioned problem I also have with Twitter is the inability to edit after the fact.  In a socialist ... what?  Dammit Coyote, learn to self-edit)

So I will confess the property rights argument is a subtle one for most people, and a difficult one to make in part because even strong defenders of property rights often don't have a very clear understanding of them.  The picture I think many property rights defenders have in their head is the old coot sitting on his front porch with a shotgun across his lap yelling "get off my land."  But for property rights to be meaningful, one needs to not only be able to protect the borders of that property but also hire whom they like to work on their property, sell to whom they like, rent to whom they like, entertain whom they like, etc.  Its not just about one's ability to exclude people, but also one's ability to associate with people of one's choice.

Now, I can imagine a number of reasonable rebuttals.  Someone might argue that this is all fine and good when 100 people want to come and seek a job from folks like me, but what if the number is a billion?   Anyway, we could have an interesting discussion along those lines.  But instead I got this:

Because of these little things called “laws.” Laws are important when you are trying to keep a country safe. Read them. @Coyoteblog

— Nick Searcy, Stable Genius (@yesnicksearcy) January 31, 2018

Uh, what?  This makes about zero sense in context.  He was criticizing a open border policy, which would represent a change in current law.  I offered a partial defense of open borders and why I thought his property rights analogy for border restrictions was a bad analogy.  And so he answers "because laws".  Honestly, this may be my failing, but I really did not understand how laws were the reason we could not change immigration laws (he may have an implicit assumption that immigrants are dangerous and laws are thus necessary to protect us from them, but if this is his core assumption driving this comment it goes entirely unstated).   So I assumed I had not explained myself well, and made the mistake of trying to clarify my point (instead of just walking away as I should have).  I will confess that the 40+ likes he got for a tweet which was true on its face but made zero sense in context influenced my decisions to try again.  Perhaps if I clarified, so would he, so I tweeted:

You made an analogy between border restrictions and locking your house. I was explaining why that is a bad analogy. When you advocate for immigration restrictions you are limiting my property and association rights, not protecting them

— Coyoteblog (@Coyoteblog) February 1, 2018

And here you go, the payoff for reading so far into this post, the true WTF moment of the thread

Your property rights don’t allow you to harbor criminals, dolt. Read a law book someday. @Coyoteblog

— Nick Searcy, Stable Genius (@yesnicksearcy) February 1, 2018

and here, because repetition using slightly different insults just reinforces the point

And it’s a ridiculous argument because your property rights do not allow you to harbor criminals who break the law.Sorry, loser @Coyoteblog

— Nick Searcy, Stable Genius (@yesnicksearcy) February 1, 2018

I am not even sure how to parse this.  More than even the statement itself, the 60 likes and 4 retweets just sort of floored me.  "Yeah, Nick, you showed that guy!"  Anyway, I assume what is going on here is that rather than understand my actual argument, he assigned to me the same package of both real and straw man arguments Conservatives assign to all immigration supporters and then started arguing some of those, rather than the actual issue we were arguing.   Anyway, just to make sure I had the full Twitter experience in this thread we had an appearance by the super Internet sleuth who has figured it all out:

Coyote = someone who helps people enter the country illegally...interesting

— Humanitarian (@BagofParts) February 1, 2018

lol, nice job.  The few folks who were reading my blog at the beginning -- which had its first post in 2004 a full 18 months before the first tweet on Twitter -- will know the blog is named after the Warner Brothers animation character, who in my mind should be one of the patron saints of small business owners -- he works his *ss off to achieve a goal and something unexpected screws his quest up every time.

Anyway, I guess I should make clear that my position on Twitter is roughly the same as it is on incentives.  In the case of incentives, bad organizations don't have bad people, they have ordinary average people with bad incentives.   As far as Twitter goes, I am more than willing to believe that, despite what he thinks of me, that Nick Searcy is not a dolt or a loser.  He is likely a reasonably smart guy on a platform that turns everyone on it into morons and *ssholes.

So I will use twitter to publish so people can find my articles in their feed there, and I will look at it from time to time if I need a blogging topic, but otherwise I am going to limit my discourse to places I can write in long form.

Postscript: OK, I figured out who this guy is.  I have not seen him in a lot of things but he played Deke Slayton in the HBO mini-series From the Earth to the Moon and that entire series, including his contribution, was excellent.  I give him kudos as an (apparently) vocal Conservative in the entertainment world, as I think the constant drumbeat of unthinking Leftism in that industry tends to cause most of the Conservatives to just go into turtle mode to protect their careers and sanity.   Still don't agree with him on immigration.

Here is Coyote's 37th (or so) rule for public discourse:  He who introduces the word "treason" into an argument automatically loses.  For two reasons:

1. In real life, it's never treason.  Trust me.  It may be disrespectful.  It may be counter-productive.  It may reveal things the government would rather not revealed.  It may be insufficiently committed to values many other Americans hold.  It may be inflammatory. It may be offensive.  It's not treason.  Whatever it is.
2. Accusing someone of treason means one has run out of good arguments.  Accusations of treason are a substitute for a good argument, not a good argument in and of themselves.

A few other words come close to having this rule applied -- "racist" comes to mind.  But though the racism accusation is way overused, and frequently is used as a substitute for making good arguments, unlike treason racism actually does exist and is sometimes an accurate description.

Is there some sort of metric for the complexity of a boundary like this one for PA Distric 7, among those invalidated in PA (in a decision the Supreme Court today refused to review)?

I keep wondering whether there is an objective standard we can set, rather just the sort of "I know it when I see it" one that everyone seems to use.

One way I can imagine testing is to do it Monte Carlo style by drawing a series of lines from one random point in the shape to another random point in the shape and calculating which percentage of the lines cross the boundary at least once.  That metric for a circle or a rectangle would be zero, but would be very high for this shape.

I thought this letter from Dan Hanson to Tyler Cowen was really thought provoking:

I wonder how many of the people making predictions about the future of truck drivers have ever ridden with one to see what they do?

One of the big failings of high-level analyses of future trends is that in general they either ignore or seriously underestimate the complexity of the job at a detailed level. Lots of jobs look simple or rote from a think tank or government office, but turn out to be quite complex when you dive into the details.

For example, truck drivers don’t just drive trucks. They also secure loads, including determining what to load first and last and how to tie it all down securely. They act as agents for the trunking company. They verify that what they are picking up is what is on the manifest. They are the early warning system for vehicle maintenance. They deal with the government and others at weighing stations. When sleeping in the cab, they act as security for the load. If the vehicle breaks down, they set up road flares and contact authorities. If the vehicle doesn’t handle correctly, the driver has to stop and analyze what’s wrong – blown tire, shifting load, whatever.

In addition, many truckers are sole proprietors who own their own trucks. This means they also do all the bookwork, preventative maintenance, taxes, etc. These people have local knowledge that is not easily transferable. They know the quirks of the routes, they have relationships with customers, they learn how best to navigate through certain areas, they understand how to optimize by splitting loads or arranging for return loads at their destination, etc. They also learn which customers pay promptly, which ones provide their loads in a way that’s easy to get on the truck, which ones generally have their paperwork in order, etc. Loading docks are not all equal. Some are very ad-hoc and require serious judgement to be able to manoever large trucks around them. Never underestimate the importance of local knowledge.

I’ve been working in automation for 20 years. When you see how hard it is to simply digitize a paper process inside a single plant (often a multi-year project), you start to roll your eyes at ivory tower claims of entire industries being totally transformed by automation in a few years. One thing I’ve learned is a fundamentally Hayekian insight: When it comes to large scale activities, nothing about change is easy, and top-down change generally fails. Just figuring out the requirements for computerizing a job is a laborious process full of potential errors. Many automation projects fail because the people at the high levels who plan them simply do not understand the needs of the people who have to live with the results.

Take factory automation. This is the simplest environment to automate, because factories are local, closed environments that can be modified to make things simpler. A lot of the activities that go on in a factory are extremely well defined and repetitive. Factory robots are readily available that can be trained to do just about anything physically a person can do. And yet, many factories have not automated simply because there are little details about how they work that are hard to define and automate, or because they aren’t organized enough in terms of information flow, paperwork, processes, etc. It can take a team of engineers many man years to just figure out exactly what a factory needs to do to make itself ready to be automated. Often that requires changes to the physical plant, digitization of manual processes, Statistical analysis of variance in output to determine where the process is not being defined correctly, etc.

A lot of pundits have a sense that automation is accelerating in replacing jobs. In fact, I predict it will slow down, because we have been picking the low hanging fruit first. That has given us an unrealistic idea of how hard it is to fully automate a job.

Based on this I can still think of some labor-saving, but not labor-eliminating, automation roles in trucking.

• Convoying, allowing one driver to lead multiple additional automated trucks
• Reduction in team driving.  Currently Federal rules (e.g. for rest breaks and maximum driving times) have created incentives for teams of two drivers to move priority freight that needs to be moving constantly and not parked while the driver sleeps.  Automation might allow one person plus the automated driver to keep trucks moving continuously and safely.

One thing not mentioned by Mr. Hanson is the role of regulation.  Safe automated trucks will likely exist LONG before Federal regulatory changes will occur to allow them much use.  This is not just because there is some delay with regulators getting comfortable with the safety aspects, but because affected groups with political pull who wish to keep the status quo will use safety concerns, real or imagined, to hold up the regulatory process.

If you think I am being too pessimistic, here is a story.  The typical steam engine of the 1930's needed a driver and a fireman -- the latter's job was to make sure the furnace was correctly fueled and operating well.  When diesel locomotives came along, one benefit among many was that the fireman was no longer needed.  Seeing this on the horizon, the fireman's union was ready to dig in their heals.  They actually, boldly, took the position NOT that a diesel locomotive needed a fireman, but that it should be required to have 2 firemen!  This was partially a subject for union negotiation, but in the dysfunctional world of railroad labor regulation, it also required some regulatory changes  (as the first industry with large workforces, the government took its first shot at labor regulation in a railroad-specific manner and the result was largely dysfunctional; fortunately for the rest of industry it did a better job with labor regulation later for everyone else).  It took years to totally eliminated fireman from diesel engines.  In fact, nearly every railroad labor saving technology like this (e.g. automatic brakes rather than men on roofs turning break wheels) led to regulatory foot-dagging that allowed the new technology but resisted the reduction in personnel.

Who would have thought we would be replaying the 11th and 12th century investiture controversies a thousand years later in China:

Pope Francis has decided to accept the legitimacy of seven Catholic bishops appointed by the Chinese government, a concession that the Holy See hopes will lead Beijing to recognize the pope’s authority as head of the Catholic Church in China, according to a person familiar with the plan.

For years, the Vatican didn’t recognize their ordinations, which were done in defiance of the pope and considered illicit, part of a long-running standoff between the Catholic Church and China’s officially atheist Communist Party.

The pope will lift the excommunications of the seven bishops and recognize them as the leaders of their dioceses, according to the person familiar with the situation.

I am constantly amazed how little people understand about economics and prosperity.  I have to give some background first.  Yesterday Mickey Kaus tweeted, "Isn't point of 'Americans are dreamers too' that there *are* zero-sum aspects: American lo-skill workers, who haven't done well for decades, have to compete for jobs/wages w/ DREAMers and (more important) new illegals a big DREAM amnesty will attract."

People talking about zero-sums in economics always get my hackles up, because they are frequently feared and seldom actually exist.  There is a lot of research that immigration does not reduced native-born unskilled employment, but it is impossible to discuss such things on Twitter without devolving into dueling appeals to authority.  Instead I wrote:

So what about a bipartisan compromise that increases immigration while simultaneously repealing labor regulations that make profitably employing low-skill workers difficult?

This was towards the end of my time on Twitter when I was mad that it was making me a worse person and I resolved to instead focus on trying to bridge differences.  But this proposal got a response I had not expected.

Someone doesn't quite grasp the notion that "profitably employing low skill wokers" is only good for employers, whereas immigration restriction is focused on workers. https://t.co/W4HytSKGKl

— EdReal (@Ed_Realist) January 31, 2018

I am willing to believe I don't understand his point or Twitter is limiting his ability to explain himself, but this just seems really ignorant of how markets work.  How are jobs for low-skill workers going to exist if it is NOT profitable to employ them?

Here is how the world works:  Profits attract investment.  Profits are the fresh blood in the water that attracts sharks.   If I am making a good profit employing low-skill workers, then I am likely to reinvest those profits to grow and get more of those profits next year.  But even if I don't, at the same time other people will start to notice my profits and want to copy what I am doing.  Through all of this, we will all be hiring more and more unskilled workers.  None of this growth, none of this investment, none of this job creation happens without the profits.

This is why I have said for years that the greatest thing that could ever happen to low-skill workers in America is for entrepreneurs to find ways to make a fortune employing them.  I always get folks who consider this statement grossly exploitative, but it is the literal truth.  There are tons of well-paying jobs for programmers because a bunch of companies like Google are very visibly making a ton of money employing them.  Unfortunately, it is harder and harder to make the economics of a business that hires low-skill workers a success, something I know well because I run such a business.  The local, state and Federal governments are layering on more and more labor regulations that make it increasingly difficult to viably employ lower-skill workers.   I have a lot to say on this, and hopefully a paper I have written on the topic will soon be published and we can talk about it more.

Postscript:  Margaret Peters argues that one reason the Republican Party is more nativist is that the business sectors of the party that traditionally lobbied in support of immigration have reduced their support, at least for unskilled immigration, because they just don't have as much demand for unskilled labor any more.

As part of my research, I checked to see whether businesses are indeed lobbying less often on immigration. To find this out, I examined which groups testified before Congress on immigration, using that as one measure of lobbying.
Here's what I found. In the 1950s, on average, more than eight businesses used to testify before Congress at each hearing on immigration. By 2010, that number had dropped to two, as you can see in the figure below. The decline has been even steeper for industries that have been exposed to increased imports from foreign countries -- from eight businesses that produce goods that can be traded per hearing in the 1950s to less than one today.

Some industry groups have increased their lobbying for more immigration -- but those are in the tech sector and others that use high-skill labor. We should expect, then, that Trump will continue to push in his State of the Union address Tuesday for a "merit-based system" in which immigrants with high skills get priority.

In contrast, lobbying by nativist groups has hardly increased.

Google beats the doors down in DC lobbying for more immigration spots for programmers.  If someone were making good money hiring unskilled labor, they would be doing the same for unskilled immigration.

Against my recent personal resolutions, I spent the last 24 hours active on Twitter.  My memory of the platform turned out to be largely correct -- it took only a little while on Twitter before I became a worse person, abandoning rational argumentation in favor of clever "gotcha" zings at people whose minds aren't going to be changed anyway. So I am going to respond to some of the things I saw here on the blog, rather than on Twitter.

Much of the traffic in my feed, the day after the President's State of the Union speech, centered around immigration.  As many of you know, I grew up an immigration restrictionist, but morphed over time into a largely open immigration supporter because I simply cannot come up with a moral justification for a free society restricting anyone's freedom of movement and association.  I became convinced (more on this in a second) that not only did immigration restrictions limit the rights of those trying to immigrate, but despite being native born, they limited my property and association rights.

Yes I have concerns and I think there are some valid arguments out there.  It is, for example, really hard to square open immigration with our current definitions of citizenship and various government benefit programs.  In addition, I am frequently concerned that we libertarians are being suckers on immigration, justifying immigration on the grounds of individual liberty and then having waves of immigrants who vote for things that limit personal liberty.  I see that already with "immigrants" moving from California to Arizona, who leave California because of the effects of the crazy regulation regime there and then come to Arizona and vote for all the same crazy stuff that ruined California.

But I actually saw neither of these arguments made all day.  Instead, I saw one form or another of these four arguments:

1.  There are individual examples of immigrants who did bad things. Trump's invocation of the MS-13 gang certainly set the tone for this, but I saw it all day.   This is a classic Conservative civilization-barbarism argument and tends to have immense appeal in that community.  But here is what is funny to me.  Conservatives (rightly in my opinion) oppose using tail-of-the-distribution individual weather events to "prove" climate change.  But those same Conservatives sure like to use rare individual acts of criminal behavior to "prove" immigration is dangerous.  Tied in with this is an observer bias -- the media only presents us with the extreme examples.  When the media only puts the weather on the news when it is extreme, it leads to a false impression that the weather is becoming more extreme.  When Fox News fills the news with crimes committed by immigrants, rather than say crimes committed by natives or acts of kindness committed by immigrants, it leads to a false impression that immigrants are all criminal barbarians making us less safe.  Which leads to #2:

2.  Immigrant crime is 100% preventable because we could just have kept them out.  This is a variation of the Skittles immigration meme that went around before the election, asking if one would voluntarily eat from a bowl of 1000 Skittles if one knew 2 or 3 were poisonous.  An example I saw of this yesterday was this:

Murder by illegal aliens is 100% preventable. Rape by illegal aliens is 100% preventable. Gangs comprised of illegal aliens are 100% preventable. Theft by illegal aliens is 100% preventable. Drunk driving deaths by illegal aliens is 100% preventable. Domestic abuse by illegal.... https://t.co/xWnF7mVUN5

— James Woods (@RealJamesWoods) January 30, 2018

I suppose this is correct on its face.  Because in any group of 10,000 randomly-selected human beings some will be criminals, such that banning any group from the country would also ban some criminals.  But the problem is that you could make this argument for any group.  Heck, you could use this equally well as an advertisement for abortion, because every 10,000 births you prevent will likely eliminate some criminals.  Because this argument is equally valid for any group one might ban from the country, it is not a valid argument against immigration.  You still have to say why you want to pick on immigrants vs. some other group.  The first thing Conservatives would say is, "Because they are illegal!" and I will deal with the rule of law argument below in #4.  But the other thing they might say is that immigrants commit crimes at a higher rate than natives, an impression formed by wall-to-wall Fox News coverage over every alleged immigrant crime (see #1 above).  But this impression is simply not the case.  Study after study shows that immigrants commit crimes at a lower rate than native born Americans.  If you really care about crime, immigrants are the last group you want to send away.  Here is one such study from Cato, but there are many.

3.  You lock the front door of your house, don't you?  An example of this argument is here:

Democrats want an Open Border policy.

Why don't they want an Open House policy?

Why should you be able to lock your doors at night? That is so discriminatory! What if someone needs something?

— Nick Searcy, Stable Genius (@yesnicksearcy) January 31, 2018

The first problem with this argument is that it is fundamentally socialist.  Only in a socialist country is the entire country one entire single block of property.

I really hate the house analogy but if you simply have to use it, then don't think of the country as a house, think of it as a giant apartment building with 100 million apartments.   Each apartment has its own door and then there is a door into the building itself.  When people talk about immigration restrictions, they are talking about limiting who I can and cannot buzz into the front door to come up and visit me.

Bad analogy?  Well, I wasn't the one who started the whole stupid building analogy. Anyway, the correct way to put it is that if I want to hire someone from Mexico in my business, and I want to rent that person a place to live on my property, why do you get to lock the door barring that person from doing these things with me?  That is why I said above that immigration restrictions don't just limit the rights of immigrants, they limit my association and property rights as a native-born American.  I can't hire anyone I want.  I can't have anyone I want come visit me.  I can't rent my property to anyone I like.  I can only do all those things with a person who has been licensed by the Federal government to be able to interact with me in this country.  And those licenses are very scarce and hard to get.

4.  They're illegal!

Because of these little things called “laws.” Laws are important when you are trying to keep a country safe. Read them. @Coyoteblog

— Nick Searcy, Stable Genius (@yesnicksearcy) January 31, 2018

I will admit the rule of law argument is seductive, but I have a couple of thoughts on it.

First, do you file and pay state use tax whenever you buy things over the Internet that have not had sales tax applied?  Do you pay all the proper employment taxes for your household help, or if they are contractors, file 1090's for what you paid them each year?  Do you always stay under the speed limit and come to a full and complete stop at every red light and stop sign?  Do you always have your dog on a leash in public areas that require it?  If the answer is "no", then stop lecturing me on the rule of law.

I know that the answer to the queries above is typically that those things are all trivial sh*t compared to breaking immigration laws.  Hmm, maybe or maybe not -- they are all basically victim-less, often paperwork crimes.  But here is another way to think of it.  You are breaking the law for some trivial reason, because you want to get to work 30 seconds faster or can't be bothered with an hour of paperwork.  Illegal immigrants are often breaking the law for life and death reasons.  Which of you is more admirable?  More than anything else about the immigration system, I hate that it takes people with qualities we generally admire -- they are trying to improve themselves, trying to make a better life for their kids, trying to find better jobs and schools -- and we turn them into criminals.  Trump is right about one thing -- many of these countries have been turned into sh*tholes by their governments.  I would like to think that if I were born in one, I would be doing everything I could to get out, laws or no laws.

Finally, I would observe that the statement "I am not against immigration, just illegal immigration" is just a cover for most people who say it.  If that were really true, we could fix it in a second -- just make it legal.  But few on the Conservative side are suggesting any such thing.

Since Progressives refuse to accept and opposes anything Trump supports, let's get Trump to start professing interest in all sorts of bad socialist ideas.  Perhaps we can steer Progressives away from some of their own worst proposals.

Trump's proposal to nationalize the future 5G data network is a good start along these lines.  This article in and of itself is proof my strategy works.  I can guarantee that if Barack Obama has proposed a nationalized data network using social justice and inter-sectional language, the economically illiterate socialist millennials at Engadget would have been writing articles about what a fabulous idea it was, and not about how it would be impossible.

I got some attention with a post the other day about an example of something I see constantly -- government employees unwilling to admit even the smallest error.

One reason is that even as someone who runs a company that partners with government agencies frequently, I am still an outsider and a member of the general public.  And government agencies train everyone in their organizations never to give any information to the public that is not fully vetted and controlled.  Government agencies have had their training budgets slashed, but the one training everyone still gets (along with diversity training) is training on how to reveal (or really, not reveal) information to the public.

But I think there is a more important reason for this behavior, and it is one I want to spend a bit of time on in part because it is one of my favorite business topics: incentives.   There is nothing in an organization that is harder to get right than incentives.  And this is doubly true of government agencies because most government agencies don't have, or don't choose to measure, any output variables.

What do I mean by output variables?  Organizations tend to measure both what I call input and output variables.   Let's consider a sales person.  An output variable is a business result, e.g. number of units sold, number of new customers added, revenue of products or services sold, gross margin of products sold, satisfaction rating from customers.  An input variable is a measure of how well process steps leading to that sale were completed, e.g. percent conformance to pricing guidelines, number of sales calls made, number of quotes produced.  If well selected, input variables tend to lead to the output variables but they don't in themselves pay the rent.

Because I am most familiar with them, I am going to use government recreation agencies like a state parks organization as an example.  I have yet to find a government recreation agency that measures its employees primarily on output variables, e.g. customer satisfaction of park visitors, fee revenue collected at park, net income of the park, change in deferred maintenance accounts, etc.  Instead their metrics are -- at best -- based on conformance to process, e.g. was the budget completed on time, was the planning process done right, was all necessary reporting done on time, etc.  I say "at best" because most government agencies have no formal performance metrics at all.  And this is where I get to my favorite incentives / metrics topic of all -- informal performance metrics.

An organization never has no performance metrics at all. They may have no formal, written standards, but every organization has to evaluate and promote talent.  If there are no formal standards, there have to be some informal or unwritten standards that are applied.  And I would argue from my experience that even when formal standards do exist, there may still be informal standards that are more important.

One informal incentive that exists naturally in almost every organization is "don't get caught in a mistake."  On its face this is one of those incentives that seem good -- sure, I would love to have an organization where no one makes mistakes.   But many companies have found that in competitive markets, allowing this informal incentive to become powerful can spell a company's doom.  It has at least two negative effects:  it limits honest communications, because people start hiding their mistakes which in turn keeps information from the rest of the organization that may need it; and it limits risk-taking, which is necessary for most companies to survive in competitive markets, because almost everything a company does to improve contains risks.  Powerful formal performance systems are one way to limit counterproductive informal incentives like this.  But many companies also put a lot of work into their communications and culture to help employees be more open to taking risks and making mistakes.   A vast portion of my communication with my own managers and employees are on this topic.  We try to make very clear the subset of mistakes that are career fatal and where we DO want risk aversion (e.g. racism, harassment, abuse, etc) and treat everything else as a learning exercise.  My response to one of my manager's mistakes is very likely to be, "sorry, that was my fault, I did a bad job of training you (or preparing you, or whatever) for that issue."

Recognize though that all of these corporate steps to head off problems with the informal incentive "don't get caught making a mistake" have largely been lessons of the marketplace.  Time warp back to the 1950's when American companies were fat and happy and not yet really faced with scrappy global competition, and you might well have found highly risk-adverse cultures where people were afraid of being caught in a mistake.  I do not have experience at companies like GM, but I would not be surprised at all to learn that risk aversion dominated the culture and that faced with market extinction, it has spent much of the time since the 1970's trying to purge this risk aversion from its culture.

But in large part, a government organization doesn't face these market corrective forces.  If an agency becomes weak and senescent, it does not get competed into oblivion, it simply goes on and on.  Maybe it gets more tax money to make up for its inefficiency, or maybe it cuts somewhere (such as deferred maintenance in public parks) to make ends meet.   Which means that in most government agencies I have worked with, informal incentives -- particularly "don't get caught in a mistake" -- are extremely powerful.

Most people are familiar with the fact that the default government answer to anything new is "No".  But did you ever wonder why?  I have heard a lot of folks say that it is because government employees are jerks or lazy under-performers or have evil intentions.  But that is really not the case.  With just a couple of small exceptions**, people who enter government are no different than people who enter private organizations.  If they do things that seem bad, it is not because they are bad people but because their information and incentives cause them to do things we perceive as bad.  Take the case of saying "No".  Without any output metrics, most government employees have no incentive to say "yes".  There is no incentive to, say, generate 20% more visitor revenue in parks so there is no incentive to approve new visitor facilities or services that might generate that revenue.  And there is every reason so say "no".  "No" is almost always safe, particularly if one does not actually say "No" but instead say something like, "well, that is an interesting idea but we need to do X, Y, and Z intensive 20-year studies first."  There is virtually no way for any government employee to get caught in a mistake saying that.  So that is the answer most of us get from the government.

Coming back to the original question, I hope this helps explain why agency employees who don't admit error act the way they do -- they are not bad people, they are normal people reacting to a bad incentive.   Imagine in my business if I, say, reversed two numbers on one of the 25 state and local sales tax returns we file each month.  When pointed out to me, I have no problem admitting the mistake because I know it is easily correctable and that it has little to do with my true performance.  But in the government world, things are completely different.  They don't have output variables.  Executives can have full successful careers running parks where the infrastructure is allowed to fall apart, the headquarters become bloated, and visitation stagnates.  But they can be fired for getting something wrong in the process.  Not very often, but just enough pour encourager les autres, particularly in an environment where there are really no other formal metrics to override this fear.

**postscript:  I have found two ways that people who enter government are different from people who enter private business  (people are more different at the end of their careers after they have been shaped by the incentives and culture for a long period of time, but I am talking about upon entry into work).  First, people who enter government tend to prioritize security (e.g. good benefits, difficult to fire) over other aspects of employment.  Note that this just tends to reinforce the risk aversion to making or admitting a mistake even more.  Second, people who enter government tend to be more confident of government solutions to problems and more skeptical of private solutions than people who enter private business.  This latter is another reason why my company, that offers private solutions for traditional government functions, hears "no" a lot.

I'm thinking about writing a novel about people who claim to stand for higher principles, but end up betraying all those principles, in fact defending horrific behavior, in the name of party loyalty. I'll title it "Darkness at Nunes"

— Paul Krugman (@paulkrugman) January 31, 2018

Maybe one character could be an economist who entered the world of political punditry and subsequently walked away from many of his earlier economic beliefs when they conflicted with his party loyalty.

e.g. here, here

Postscript:  By the way, my first Venn diagram, which Mark Perry has credited as the inspiration for what he has since turned into an art form, involved Mr. Krugman:

For some reason, over the last 30 days auto-posting my blog to Twitter has not been working, so for those of you who follow the blog via Twitter, you may not have seen much going on. Hopefully that is fixed.

Most of us who took Econ 101 would expect that an increase in the minimum wage would increase unemployment, at least among low-skilled and younger workers most affected by the minimum wage.  After all, demand curves slope downwards so that an increase in price of labor should result in a decrease in demand for that labor.

There is a great body of work on employment effects of minimum wage, and surveying this corpus is beyond the scope of this paper, but a good starting point might be the recent detailed and careful study by Jardim et. al. of the University of Washington, which analyzed the employment effects of the increase in minimum wages in Seattle from $11 to $13.  They found that while average hourly wages for lower-paid workers went up by 3%, the total hours worked went down by 9%, resulting in a net reduction in total wages for lower-paid, lower-skill workers at the same time that other sectors of the Seattle economy were booming.

Monopsony Power & The Labor Market

Supporters of the minimum wage, however, argue that these employment effects are exaggerated, because employers have something called monopsony power when hiring low-skill workers.  What a monopoly is to customers – it limits choices – a monopsony does to suppliers, in this case the suppliers of labor.  The argument is that due to a bargaining power imbalance, employers can hire workers for less than they would be willing to pay in a truly competitive market, gaining the company added savings that increase its profits.  Under this theory, minimum wage laws help to offset this power imbalance and force companies to disgorge some of their excess profits in favor of higher wages.  If this assumption is true, then demand for labor would not be reduced due to a minimum wage increase because, prior to the wage increase, companies were paying less than they were willing to pay and thus are still willing to continue to pay the wages at the new higher rates.

While economists argue about this monopsony theory, my intuition as an employer makes me skeptical.  However, rather than argue about whether my little company that scrambles to staff itself every year somehow wields excess power in the labor markets, I am going to argue that the existence of monopsony power is irrelevant to the employment effects of a minimum wage increase: Even if companies are able to pay workers less than they might via such bargaining power imbalances, whatever gains they reap from workers will end up in consumer hands.  As a result, minimum wage increases still must result either in employment reductions or consumer price increases or more likely both.

Why? Well, we need to back up and do a bit of business theory.  Just as macroeconomics (all the way back to Adam Smith) spends a lot of time thinking about why some countries are rich and some are poor, business theory spends a lot of time trying to figure out why some firms are profitable and some are not.  One of the seminal works in this area was Michael Porter's Five Forces model, where he outlines five characteristics of markets and firms that tend to drive profitability.  We won't go into them all, but the most important of the forces for us (and likely for Porter) is the threat of new entrants -- how easy or hard is it for new firms to enter the marketplace and begin competing against an incumbent firm?  If new companies can enter into competition easily, a profitable firm will simply attract new competitors, and keep attracting them until the returns in that market are competed down to some minimum level.

Let’s consider a company paying minimum wage to most of its employees.  At least at current minimum wage levels, minimum wage employees will likely be in low-skill positions, ones that require little beyond a high school education.  Almost by definition, firms that depend on low-skill workers to deliver their product or service have difficulty establishing barriers to competition. One can’t be doing anything particularly tricky or hard to copy relying on workers with limited skills. As soon as one firm demonstrates there is money to be made using low-skill workers in a certain way, it is far too easy to copy that model.    As a result, most businesses that hire low-skill workers will have had their margins competed down to the lowest tolerable level.  Firms that rely mainly on low-skill workers almost all have single digit profit margins probably averaging around 5% of revenues (for comparison, last year Microsoft had a pre-tax net income margin of over 23%).

If there were some margin windfall to be obtained from labor market power that allowed a company to hire people for far less than their labor was worth to it, and thus earn well above this lowest tolerable margin,  new companies would try to enter the market, probably by lowering prices to consumers using some of that labor premium.  Eventually, even if the monopsony premium exists, it is given away to consumers in the form of lower prices.  If the wholesale price of gasoline suddenly falls sharply, gasoline retailers don't get to earn a much higher margin, at least not for very long.  Competition quickly causes the retailer's lowered costs to be passed on to consumers in the form of lower retail prices.  The same goes for any lowering of labor costs due to monopsony power  -- if such a windfall exists, it is quickly passed on to consumers.

As a result, the least likely response to increasing labor costs due to regulation is that such costs will be offset out of profits, because for most of these firms, profits have already been competed down to the minimum necessary to cover capital investment and the minimum returns to keep owners interested in the business. The much more likely responses will be:

• Raising prices to cover the increased costs. While competitors that are subject to the same laws will likely have similar increases, the increase may not be acceptable to consumers and almost certainly will result in some loss in unit sales.
• Reducing employment. There are a variety of ways in which a minimum wage increase could result in employment losses.  A company might raise its prices to compensate for higher costs, only to find its unit volumes falling, necessitating a layoff in staff.  Or the staff reductions may also be due to targeted technology investments, as increases in labor costs also increase the returns to investments in capital equipment that substitutes for labor
• Exiting one or more businesses and laying everyone off. This may take the form of exiting a few selected low-margin lines of business, or liquidation of the entire company if the business is no longer viable with the higher labor costs.

A Real-World Minimum Wage Increase Example

A concrete example should help. Imagine a service business that relies mainly on minimum wage employees in which wages and other labor related costs (payroll taxes, workers compensation, etc.) constitute about 50% of the company’s revenues. Imagine another 45% of company revenues going towards covering fixed costs, leaving 5% of revenues as profit.  This is a very typical cost breakdown, and in fact is close to that of my own business.  The 5% profit margin is likely the minimum required to support capital spending and to keep the owners of the company interested in retaining their investment in this business.

Now, imagine that the required minimum wage rises from $10 to $15 (exactly the increase we are in the middle of in places like Seattle and California).  This will, all things equal, increase our example company's total wage bill by 50%. With the higher minimum wage, the company will be paying not 50% but 75% of its revenues to wages. Fixed costs will still be 45% of revenues, so now profits have shifted from 5% of revenues to a loss of 20% of revenues. This is why I tell folks the math of supposedly absorbing the wage increase in profits is often not even close.  Even if the company were to choose to become a non-profit charity outfit and work for no profit, barely a fifth of this minimum wage increase in this case could be absorbed.  Something else has to give -- it is simply math.

The absolute best case scenario for the business is that it can raise its prices 25% without any loss in volume. With this price increase, it will return to the same, minimum acceptable profit it was making before the regulation changed (profit in this case in absolute dollars -- the actual profit margin will be lowered to 4%). But note that this is a huge price increase.   It is likely that some customers will stop buying, or buy less, at the new higher prices. If we assume the company loses 1% of unit volume for every 2% price increase, we find that the company now will have to raise prices 36% to stay even given both the minimum wage increase and the lost volume. Under this scenario, the company would lose 18% of its unit sales and is assumed to reduce employee hours by the same amount.

In the short term, just for the company to survive, this minimum wage increase leads to a substantial price increase and a layoff of nearly 20% of the workers.   Of course, in real life there are other choices.  For example, rather than raise prices this much, companies may execute stealth price increases by laying off workers and reducing service levels for the same price (e.g. cleaning the bathroom less frequently in a restaurant).  In the long-term, a 50% increase in wage rates will suddenly make a lot of labor-saving capital investments more viable, and companies will likely substitute capital for labor, reducing employment even further but keeping prices more stable for consumers.

As you can see, in our example we don’t need to know anything about bargaining power and the fairness of wages. Simple math tells us that the typical low-margin service business that employs low-skill workers is going to have to respond with a combination of price increases and job reductions.

Apparently some hot new auto company called Nikola Motors (in the class of companies to my mind like Tesla and Fiskar that have a sexy idea and a lot of cash burn) is relocating to the Phoenix area.  Ugh.  You know what that probably means:

Arizona Governor Doug Ducey and Nikola Motor Company today announced the company has selected Buckeye, Arizona for its Nikola Motor Company hydrogen-electric semi-truck manufacturing headquarters facility. The new 500 acre, one million square foot facility will be located on the west side of Phoenix and will bring more than $1 billion in capital investment to the region by 2024.

"After 12 months, nine states and 30 site locations, Arizona, Governor Ducey, Sandra Watson and Chris Camacho were the clear front runners. Arizona has the workforce to support our growth and a governor that was an entrepreneur himself. They understood what 2,000 jobs would mean to their cities and state," said Trevor Milton, CEO and founder, Nikola Motor Company. "We will begin transferring our R&D and headquarters to Arizona immediately and hope to have the transition completed by October 2018. We have already begun planning the construction for our new zero emission manufacturing facility in Buckeye, which we expect to have underway by the end of 2019."

Nikola Motor Company designs and manufactures hydrogen-electric vehicles, electric vehicle drivetrains, vehicle components, energy storage systems and hydrogen stations. The company is bringing the nation's most advanced semi-trucks to market with over 8,000 trucks on preorder.

Nikola Motor Company selected Buckeye, Arizona due to numerous factors including the state's pro-business environment, engineering schools, educated workforce and geographic location that provides direct access to major markets.

How much do you want to bet that the number 1 reason for moving to Phoenix was left off the list: taxpayer subsidies.  Yep, I have not seen the deal, but my guess is that yet another company is going to get a piece of my profits transferred over to them because they make a better photo op and press release for politicians.  I am pretty sure that the statement "[arizona] understood what 2,000 jobs would mean to their cities and state" is code for "they offered us a pile of cash".

Postscript: By the way, I do like their idea of a hydrogen truck better than Musk's all-electric truck -- that is, if they can figure out how to scale up a hydrogen distribution system.

I am not particularly in opposition to or enthusiastic about the current transgender movement.  On one hand, I have no problem with people managing their lives however they wish.  I met Dr. Renee Richards in 1982, for example (she was coaching a Princeton tennis player I knew) and liked her.  Deirdre Mccloskey is freaking brilliant, I wish I had met her.   On the other hand, as with most social movements on the Left nowadays, mere tolerance and live-and-let-live acceptance is not enough -- the movement demands complete conformity, and mercilessly shames anyone even the least bit slow to discard 5000 years of social norms around gender.  And the movement tends to descend into self-parody from time to time, such as demanding that tampons be provided to people who cannot possibly have a menstrual cycle.

Anyway, most of that is beside the point and is just background to an issue I was reminded of this weekend when I was visiting San Diego.  As many of you know, my company operates public parks and campgrounds for the government.  As such, we were largely subject to Obama-era orders that in Federally-owned bathrooms, people had to be allowed to use the bathroom that matched whichever gender they self-identified as (not necessarily the one matching their birth sex).  Unlike in past rules, there was no requirement that the person had taken any surgical or hormonal steps to transition -- only a self-declaration was required.

I will have to admit that the most entertaining part of this new requirement was explaining modern gender theory to my employees and managers, who tend on average to be over 65-years-old and without a college degree.  There were a lot of wide eyes and "wtf' expressions in the room.  Their main concern seemed to be potentially allowing male sexual predators into the women's room.  I explain to my employees that the extra risk here is trivial for a variety of reasons, but mainly because in practice this comes up vanishingly few times.  There just are not that many transgender people in the world, and campground bathrooms have never been targets for a lot of sexual predation.  Every single time I can remember our employees even being asked about our policy it turned out to be an activist testing us, probably to see if they could create grounds for a lawsuit.

From my experience, then, most public fears about transgender bathroom rules have turned out to be overblown. But, it turns out there is one issue that no one is talking about that could be a real, though not particularly serious, downside for women.  Let me explain.

The one major change in the public bathroom world as a result of the transgender movement is the accelerating shift from having multi-stall female and male bathrooms to having single-stall, gender-neutral bathrooms.  If bathrooms are all single-stall, then all the culture wars over gender and bathrooms are completely sidestepped.   Every public bathroom I have seen a government agency build over the last 5 years has been of this new design, and our company's policy is only to build this sort of facility rather than the old two-sided male/female bathrooms.  Here is an example from new construction at the children's pool in La Jolla:

OK, I am going to have to criticize one gender here but since I am going to criticize males, I will be OK.  Men's bathroom habits are terrible -- we tend to pee all over the place.  Even if the median guy is careful, the marginal guy is not and makes a total mess.  We had this problem when my kids were young -- my wife would ask me to take our toddler daughter to the men's room with me and I would tell her that was impossible, that the men's toilets were likely awful.   I can say from experience from cleaning over 1000 public bathrooms a day that men's rooms take way more cleaning than women's rooms.

So if one has these single stall bathrooms, they have to be cleaned a lot.  On busy days, our staff cleans ours 4,5,6 or even more times a day.  But there are many public agencies that apparently do not have the focus or resources to clean on this kind of frequency.  The City of San Diego, or whoever cleans these bathrooms in La Jolla, clearly does not clean enough, because these bathrooms were disgusting.  I did not really want to go in there and I could stand and do my business.  My wife would never have gone in there.

So there you have it women -- something else to look forward to.   That irritating long women's room line may become a thing of the past, but it could be replaced with much dirtier bathrooms.

I have gotten three calls in three days with an automated voice message telling me that, in essence, the IRS is seriously pissed at me and I need to call a certain number in 24 hours to resolve it.

The message in some ways is reminiscent of the old Nigerian email scams in that the English sounds like a really bad translation of another language.  I wish I had a recording.  Some of it uses stilted English, as if it is trying to emulate bureaucratese.  But some of the message hilariously uses slang in ways that the IRS would never do in its official communication, most memorable of which was the admonishment that if I did not respond immediately, the IRS would "send the local cops to arrest me."  The IRS would never use the word "cops".  I can't remember an agency every using the word "police" even.  Government officials almost always use the term "law enforcement".

Suffice it to say, the IRS does not generally make calls like this.  If you think it might be legit, ignore whatever number that was left in the message and call the IRS customer support line on their web site.  This latter is always good advice for almost any collection or customer support call.  I get a number of calls and emails, for example, from credit card companies that say they suspect fraud and want to review some transactions.  I always ignore whatever number they leave me, or if they reach me with a live person tell them I will call back, and then I call the number printed on the back on the credit card.

Our two largest Arizona public colleges are spending over $18 million in public funds just to get rid of their football coaches.

I use the words "public funds" knowing exactly what I am saying.  The schools dispute this, saying:

...no tuition dollars nor public money will fund the buyouts. Both universities have self-sustaining athletic departments

But this is total cr*p.  Money is fungible.  They can pretend that this money comes from athletic program revenues, just as certain electricity customers pay extra to say that their undifferentiated kilowatts from the grid came from a particular solar plan or windmill, but its not true in either case.  Marginal spending is paid for in the end by the marginal source of funds, and the marginal source of funds for universities is tax money.  That is $18 million that could have been spent for about anything in these public education institutions but was prioritized towards trying to upgrade the football coach.

via here.