Coyote Blog

We often talk about the direct costs of regulation, but in the long run perhaps the most worrying problem is a cost that is impossible to measure -- its effect on innovation.  From a labor regulation paper I am writing:

Labor regulations are written in consideration of existing, well established business models, and are not written for business models that might someday exist.  Often my employees ask me why labor law will not allow practices that would make a lot of sense in our business, both for employer and employee.  I tell them to imagine a worker in a Pittsburg factory, punching a timeclock from 9 to 5 Monday through Friday, working within sight of their supervisor, taking their breaks in the employee lunch room.  This is the labor model regulators and legislators had in mind when writing the bulk of labor law.  Any other labor model – seasonal work, part-time work, working out of the home, telecommuting, working away from a corporate office or one’s supervisor, the gig economy – become square pegs to be jammed in the round hole of labor law.

When someone does try to stick an innovative square peg in the round hole of existing regulation, there tend to be concerted efforts by regulators to kill the new model.  Just look at Uber and the efforts to force it out of its labor model and into a more traditional one.  Most of us see innovation as good and value-creating.  Regulators - by training, by their incentives, by the culture - see innovation as threatening.  They see innovations as viruses trying to bypass the immune systems they have spent years constructing.

Here is an example from pharmaceuticals that really struck me.  Alex Tabarrok is writing on promising anti-aging and cancer reduction drugs:

The assembled scientists and academics focused on one obstacle above all: the Food and Drug Administration. The agency does not recognize aging as a medical condition, meaning a drug cannot be approved to treat it. And even if the FDA were to acknowledge that aging is a condition worthy of targeting, there would still be the question of how to demonstrate that aging had, in fact, been slowed—a particularly difficult question considering that there are no universally agreed-on markers.

 

I don't have a lot to say about the whole Confederate statue thing.  Most of what I would say could probably be cut and pasted from my post on the Confederate flag.

The one thing I want to comment on is the criticism that pulling down these statues is "Stalinist", referring to Stalin's proclivity for changing history books and even airbrushing men out of photos when he turned against them.  I find this comparison ironic for the following reason:  Think back to the fall of communism in Eastern Europe in 1989.  I have two images in my mind of that time.  One is of people on top of and pulling down the Berlin Wall.  But the other is of Soviet-era statues toppling in Eastern Europe.  Pulling down the statue of Lenin or Stalin or whoever became the key public declaration that people were making a break with the past.

Public statues on public land are basically government speech.  People call it "history" but in most cases it is closer to propaganda.  I think it is totally appropriate to question it.  Now, I might have gone about the whole thing differently.  If I were a city, I would name the statues that I wanted removed, and then give private individuals and groups 6 months to pay to take it away to a private site if they wanted to keep it.  If no one cared enough to do so, we'd just demolish it.  By the way, I think this gets at the heart of why many folks like myself still have a bit of fear about the current efforts -- the folks on the Left who are doing this don't tend to differentiate between public and private.  It is very likely their perfectly reasonable criticism of public speech in public spaces will soon turn into attempts to regulate private speech in private spaces.

The Lost Cause School:   I want to provide some help for those not from the South to understand the southern side of the statue thing.  In particular, how can good people who believe themselves not to be racist support these statues?  You have to recognize that most folks of my generation in the South were raised on the lost cause school of Civil War historiography.  I went to one of the great private high schools in the South and realized later I had been steeped in Lost Cause.  All the public schools taught it.  Here is the Wikipedia summary:

The Lost Cause of the Confederacy, or simply Lost Cause, is a set of revisionist beliefs that describes the Confederate cause as a heroic one against great odds despite its defeat. The beliefs endorse the virtues of the antebellum South, viewing the American Civil War as an honorable struggle for the Southern way of life,^[1] while minimizing or denying the central role of slavery. While it was not taught in the North, aspects of it did win acceptance there and helped the process of reunifying American whites.

The Lost Cause belief system synthesized numerous ideas into a coherent package. Lost Cause supporters argue that slavery was not the main cause of the Civil War, and claim that few scholars saw it as such before the 1950s.^[2] In order to reach this conclusion, they often deny or minimize the writings and speeches of Confederate leaders of the time in favor of later-written revisionist documents.^[3] Supporters often stressed the idea of secession as a defense against a Northern threat to their way of life and say that threat violated the states' rights guaranteed by the Union. They believed any state had the right to secede, a point strongly denied by the North. The Lost Cause portrayed the South as more profoundly Christian than the greedy North. It portrayed the slavery system as more benevolent than cruel, emphasizing that it taught Christianity and civilization. In explaining Confederate defeat, the Lost Cause said the main factor was not qualitative inferiority in leadership or fighting ability but the massive quantitative superiority of the Yankee industrial machine.

Obviously this was promoted by the white supremacists after the war, but in the 20th century many well-meaning people in the South who are not racist and by no means want to see a return of slavery or Jim Crow still retain elements of this story, particularly the vision of the Confederacy as a scrappy underdog.  But everything in these two paragraphs including the downplaying of slavery in the causes of the Civil War was being taught when I grew up.  It wasn't until a civil war course in college (from James McPherson no less, boy was I a lucky dog there) that I read source material from the time and was deprogrammed.

The comparisons of the current statue removal to Protestant reformation iconoclasm seem particularly apt to me.  You see, growing up in the South, Confederate generals were our saints.  And the word "generals" is important.  No one I knew growing up would think to revere, say, Jefferson Davis.  Only the hard-core white supremacists revered Jefferson Davis.  Real lost cause non-racist southerners revered Robert E. Lee.  He was our Jesus (see: Dukes of Hazard).  Every town in the south still has a Robert E Lee High School.  Had I not gone to private school, I would have gone to Houston's Lee High (I had a friend who went to college at Lehigh in New Jersey.  Whenever he told folks in the South he went there, they would inevitably answer "yes, but where did you go to college.")  So Lee was by far and away at the top of the pantheon.  Then you had folks like Stonewall Jackson and JEB Stuart who were probably our Peter and Paul.  Then all the rest of the generals trailing off through the equivalents of St. Bartholomew or whoever.  We even had a Judas, General James Longstreet, who for a variety of reasons was reviled by the Lost Cause school and was blamed for many of Lee's, and the South's, losses.

If you want to see the Southern generals the way much of the South sees them, watch the movie Gettysburg, which I like quite a bit (based on the book Killer Angels, I believe, also a good read).  The Southern Generals are good, talented men trying to make the best of a losing cause.  Slavery is, in this movie, irrelevant to them.   They are fighting for their beloved homes in the South, not for slavery.  The movie even has Longstreet saying something like "we should have freed the slaves and then fired on Fort Sumter."

Yes, I know you are excited, because it is time to document progress on my model railroad.  In the last episode I had build most of the benchwork and was starting to lay out the track.  Since then I have made a fair amount of progress.

So as we were saying last time, I printed the track plan full size, and then traced the lines onto the foam below using a pounce wheel, a sewing tool that looks like a spur.  You can see below that the traced lines were a bit wavy so I thin used an 8 foot long straight edge and a sharpie to draw the final centerlines for the track.  Then, I started putting down the sub roadbed, which are pre-milled pieces of homosote.

I wanted to hand lay some track, but I also wanted to get started and have some basic track up and running, so I have decided to use use code 55 flex track for the main lines and to hand lay code 40 track for the spurs, branches, and yards.  You can see below I am starting to lay the mainline flex track.  As mentioned in the last episode, I started from the crossings in the distance and started working outward from them in all four directions.

Below, more progress.  You can also see wires poking through as I start the tedious process of wiring power to all the track.  Also in the foreground you can see a code 40 turnout I built.  I am using it to figure out how to do the transitions from code 55 to code 40 track.

At the same time I am starting to build the turnout controllers.  I will be using the FastTracks bullfrog control, which is basically a manual control using flexible control rods.

At this point I realized I should have really mounted the backdrop before I started laying track so I paused and got the backdrop up.  I have used masonite before but it is really heavy.  This time I used 0.09" thick styrene sheet.  There are lots of vendors on the Internet (people use the large sheets for signs) and I was able to order sheets cut to 24" x 8 feet.  I then had to splice two together.   I used a 6" wide piece of styrene and plastic weld (bought a big can from Amazon).  It was sort of awkward, particularly to butt them exactly square.

Here it is starting to go up.  I screwed thin hardwood shims into the joists, and then glued the styrene to the wood with E6000 (I tested liquid nails but the joint was not very strong).  I put in screws to hold it at the very top and bottom.  The bottom ones will be hidden by the scenery and the top by the upper valence.

It turned out that near the corners, the shim spacing was not close enough.  I had to slip some extra shims in from above after it was installed to get the backdrop reasonably flat.  In retrospect, this was a LOT easier than masonite, though masonite is stiffer and would not have needed as much support to be flat.

Why not just paint the walls, you might ask?  Well the styrene sheet is a lot smoother even than drywall, but the payoff is really in the corner.  Here is the corner with and without the sheet.  Sky does not have corners.

The next step was to start on the wiring.  I find the wiring to be extremely tedious, but it is easier for this layout than on my past efforts because the benchwork is relatively high so I can sit in a chair and work on the wiring underneath.

Thank god for suitcase connectors, it makes wiring leads to the bus wire way easier.  And here is the growing proliferation of switch machines.

And the payoff - the first train!

I was going to post my Friday Hawaiian shirt, but I have come to the conclusion that I look like a serial killer in selfies.  Perhaps I need to do the teenager thing and practice a selfie pose.  Anyway, instead, I will post my favorite shirt-maker, which is Tori Richard.  (I am wearing this one today, which has a puckered fabric I like).

One downside of a lot of Hawaiian shirts is that I don't love the fabric.  Even my Tommy Bahama shirts, which are expensive, give me problems (the raw silk gets really stiff if I wash it and hang it out to dry -- my wife says ironing it would soften it but forget that).  Tori Richard shirts feel great and though they are not on the wildest end of Hawaiian shirts, they look great.  I like the fit of the orange label, which are more tailored than the typical Hawaiian shirt.

Saw this at the D23 Convention (sort of a Disney-only Comicon) last month

Two our our employees, and tangentially our company's labor model, were featured in the San Diego paper the other day along with some video.

My managers often get frustrated with the government entities for whom we operate facilities.  They frequently try to escalate trivial issues.  I then attempt to explain to them that they only have a limited number of "points" they can spend in trying to get action in conflicts, and that spending these points on trivial problems is both a waste of time and counter-productive to solving larger problems that crop up later where we really do need to go to the mattresses.  I frequently ask them "Is this the hill you want to die on?"  I feel like this is a concept that no one ever taught Donald Trump.  He seems willing to die on any hill that happens to wander into his path.  Maybe that is why his core of supporters love him, I don't know.

...and as an adult, and a model maker, I still find it engaging but for different reasons.

I couldn't be separated for years from my Corgi model of Thunderbird 2.

Postscript:  Plus, I vaguely remember watching this show religiously but had entirely blocked it out of my mind for nearly 50 years until I saw it in the side panel of videos on YouTube next to the one above.

For years I have been struggling with a variety of commercial home wifi products.  I have been plagued by issues -- either they had poor range or they had to be reset every day or so or they did not play well with various extenders I needed to cover my house.  I have a one story house that sort of sprawls all over the place and is hard to cover, particularly since our internet connection to Cox Cable is all the way at one end of the house and some of the house has a cinderblock core just to make signal transmission even harder.

So my company had a contractor wiring up a customer location we manage and they were using a commercial product from Ubiquiti Networks.  I wondered why a commercial product would not work just as well in my home.  This Ars Technica article discussed how much better he thought the commercial products from Ubiquiti were than most consumer grade products.  I figured maybe the problem would be cost, but perusing the Unifi product line on Amazon, it seemed priced a bit higher than consumer products but not unreasonably so (also compare the Amazon star ratings for the Unifi products to consumer alternatives -- you will not see ratings this high).

I was a little intimidated that the setup would be hard but it was manageable if you know even a little bit about network addresses and how they work. And this video is absolutely fabulous -- I can tell you that if you follow along with this guy your system will work at the end of it.  Once it was running, the software is way easier to navigate than my old consumer products.

So several months ago I installed a Unifi system in my house with 6 access points (including on my patio and in my garage), a security gateway (the router, I think), a main switch, a couple of satellite switches, and the cloudkey which helps manage the whole thing.  I paid extra for the PoE switches (power over ethernet) so I could run the access points without having to plug them into an outlet and so in the future I could add PoE video.

What I like:

• Reasonable cost
• Setup not difficult if you follow the video
• Rock-solid reliability
• It reaches everywhere, with a single SSID so it acts as one seamless large wifi zone.
• Ability to access the system remotely to check on status
• Access points work via PoE so they mount on the wall or ceiling really cleanly and look great
• Really good information about my network, not only every device and its IP and status, but also its bandwidth use and exactly how it is connected in the network tree (ie via such and such switch).

The only problem I have had so far is a moderately arcane one that took me a while to diagnose.  I use this system with my Sonos music system and I have a number of Sonos boxes around the house.  Most of these are wired, and so do not use the Sonos wired peer-to-peer mesh.  However, the Sonos boxes were trying to create wireless network amongst themselves that essentially created loops in my network where storms of traffic ran in circles.

This is where I had a learning opportunity.  Apparently network equipment has something called Spanning Tree Protocol (STP).  Basically through a priority and cost system, it allows you to specify preferred pathways and prevent data from looping.  But Sonos uses a really old version of this that does not play well with Unifi.  I will say that this is not just a Unifi problem as I had this exact same problem at another location with Sonos and the Google mesh wifi system.  At least with Unifi, there were STP settings I could play with (Google mesh wifi is a nice little plug and play product but forget it if you want to tweak anything at all).   As is usual nowadays for any known problem, the Internet has a bunch of articles on Unifi and Sonos compatibility issues.  Eventually by tweaking the STP priorities of the Unifi switches and simply turning off the wifi in Sonos units where I did not need the mesh wifi capability (a nearly undocumented feature that is revealed here) I got it all playing nice together.   I will add that though Sonos is a product I love (because my wife can actually reliably use it), their tech support never identified this problem -- they said they saw evidence of loops but would not admit that the Sonos peer-to-peer networking was helping to cause them.

I have written about this mix effect many times, eg here.  Imagine a corporate division that sells tables and chairs.  The CEO is reviewing this division's performance, and sees that their revenues are increasing but their profit margin is falling.  He asks his analyst to look into it - is it the tables or the chairs or both that are showing falling margins.  Our poor harassed analyst comes back and says, uh, neither.  The profit margins for both tables and chairs went up last year.  Well, the CEO asks, if revenues are up and all their component margins are going up, how is their total margin falling?  It turns out that tables make a much higher margin than chairs, and over the last year the company has seen a much higher growth in chair sales than table sales.  The mix is shifting towards a lower margin product and is bringing the averages down.  By the way, I can say with authority that this conversation is much harder when the analyst is yours truly and the CEO is famed tough (but talented) boss Chuck Knight of Emerson Electric.

Whether the media mentions this effect or not, it is happening all the time.  Here is an example from the WSJ:

One mystery of this economic expansion is that wage growth has remained slow even as the labor market has finally tightened. One widely cited culprit is historically low productivity growth. But a new analysis from the Federal Reserve Bank of San Francisco adds a more optimistic, albeit paradoxical, explanation.

The Bureau of Labor Statistics recently reported that median weekly earnings had risen in July by a healthy 4.2% on an annual basis, the fastest growth in a decade. As labor markets tighten, employers typically increase wages. Until this past year, however, median weekly earnings growth had hovered near 2%, which is significantly less than the 3.25% average from 1983 to 2015.

So why haven’t wages risen faster amid an increase in hiring and unfilled jobs? One answer is that wages have actually been growing at a faster clip—around 4% to 5%—at least for full-time workers with steady jobs. But new full-time workers who are generally paid less than the retirees they replace are dragging down the average wage increase.

Researchers at the San Francisco Fed this week updated their 2016 paper that disaggregated the wages of full-time workers with steady employment from recent entrants—that is, new workers or those returning to full-time work. Their earlier analysis showed that average wage growth had slowed less than expected during the recession while staying relatively flat during the recovery.

That’s because workers who lost jobs during the recession were generally lower skilled and lower paid, so average weekly wages didn’t fall significantly. However, many of those workers have since been rehired at below-average wages, which has depressed the aggregate.

In prior expansions, wage growth has been driven mostly by continuously full-time employed workers, and the researchers find that’s still the case. Wage growth for these workers is now close to the pre-recession 2007 peak. But there are now many more workers who have been on the labor-force sidelines who are moving to full-time employment, thus creating a drag on wages.

This is frequently how mix shifts play out in the news.  Notice that there are actually two pieces of good news here:  1.  Wages for full-time workers who have been employed for a while are growing well and 2.  lower-skilled and less experienced workers who left the labor force are now getting jobs and returning to work.  However, when these are combined, the net is portrayed as bad news, ie wage growth in the US is sluggish.  Because the mix was ignored.

I was thinking about these two stories in the context of net neutrality (the theory if not the practice)

• GoFundMe shuts down campaigns for Charlottesville suspect
• GoDaddy dumps white supremacist site 'Daily Stormer'

The folks who are cheering this on seem to be the same folks who support net neutrality (Venn Diagram, Professor Perry?)  Look, if I had an Internet business, I would not want to serve or subsidize these folks.  But then again, I have always opposed net neutrality rules.  I suppose that one could argue net neutrality is narrowly about ISP's, so this stuff is not relevant, but what if Cox Communications decided the same thing?  Do they not have the same rights of association that GoDaddy and GoFundMe have?  And if every registrar and web hosting company refuse to serve a certain person or viewpoint, does net neutrality at the ISP level even matter?  This is part of the hypocrisy of companies like Google, which demand Cox act as a common carrier for its YouTube traffic (because Google does not want to foot the full cost of the amount of bandwidth they use) but act as anything but a common carrier in its core search business.

And while we are on rights of association, am I legally required to bake a cake for James Fields?

Postscript:  I wonder if people on the Left, which dominate most of the calls for net neutrality, would be demanding net neutrality if they thought most ISP's were controlled by folks on the Left?  Google and Facebook are known to be controlled by the Left, and thus no one on the Left demands neutrality of them  -- in fact the Left likely would oppose calls for neutrality at Google and Facebook as their hope is that opposing voices to theirs will be disproportionately screened out by these companies.

In my mailbox today is a press release some firm in town called Spectrum Experience.  This press release begins:

 The Tempe-based communications firm, Spectrum Experience, released an email statement yesterday informing clients the firm will no longer work with companies, candidates or causes that are unwilling to publicly state: Black lives matter. Spectrum works with dozens of political candidates and legislators in Arizona, as well as nonprofits and corporations throughout the US; the firm said it does not wish to provide communications support to these clients if they shield White supremacy.

Hmm.  I am pretty sure that the specific phrase "Black lives matter" has become loaded with a lot of political baggage such that failing to entirely endorse it is not the same as shielding white supremacy.  Sort of like refusing to say "I'm with Her" is not really the same as shielding misogyny.  But I will say that this is beautifully representative of the flavor of politics today.  One wonders how a company that claims on its website to "craft innovative strategies for companies, causes, and campaigns dedicated to changing the world" does so while refusing to engage with anyone who disagrees with them.

My take on BLM is here, which is critical of it as I share many of their goals but think their tactics have devolved into unproductive virtue-signaling at the expense of actual progress (sort of exactly like this email).

Trump considering pardon of Joe Arpaio

I have written several times about the convention hotel the City of Phoenix built downtown.  At the time of that last article, it looked like the city would lose about $150 million total between the operating losses and the loss on the sale.   But incredibly, it is worse:

Last week, City Manager Ed Zuercher released an economic-impact report that revealed more details of the deal. Along with that, he also released a memo that contends the tax break wouldn't add to the city's losses.

According to Applied Economics, an outside consultant hired to do the report, the tax incentive would spare the buyer from paying an estimated $97 million in property taxes to the city, county, school districts and other taxing jurisdictions over 20 years.

Alex Epstein:

Stories about “100-per-cent renewable” locations like Georgetown, Tex. are not just anecdotal evidence, they are lies. The Texas grid from which Georgetown draws its electricity is comprised of 43.7 per cent natural gas, 28.8 per cent coal, 12 per cent nuclear, and only 15.6 per cent renewable. Using a virtue-signalling gimmick pioneered by Apple, Facebook, and Google, Georgetown pays its state utility to label its grid electricity “renewable” —  even though it draws its power from that fossil-fuel heavy Texas grid — while tarring others on the grid as “non-renewable.”

Apple's renewable claims have always irritated me so I am glad to see someone pointing this out.

If you want to convince me of the need for restrictions on any substances, such as narcotics, you have to convince me of three things:

1. That incarcerating users is somehow better for them than their addiction
2. That ethically abusers of the substance are more worthy of our attention and intervention than legitimate users who benefit from the substance and whose access will likely be restricted
3. That the negative social costs of the substance's use are higher than the inevitable social costs of the criminal black market (including the freedom-reducing policing laws implemented in response) that will emerge when its use or purchase is banned

Not only have I not been convinced on any of these dimensions on any of the substances we currently call illegal drugs, I have yet to see anyone seriously even attempt to address these trade-offs or acknowledge they exist.

...even if you work alone in a one-person office

About once a year we have to go beyond getting the dog trimmed and let her be shaved in order to get rid of a bunch of matted fur  (we are not very good at brushing her but to be fair she does not do it either).  She is a lot cooler in summer this way but I worry about sunburn.  Before and after:

It is interesting, for a couple of days after she is shaved she acts super-vulnerable, like a person walking around naked or who has body image issues.  Don't worry, it grows back fast.

Some time ago I was sued by a large corporation over a negative review I posted on this site.  The case was eventually settled, and I am not allowed to talk about the terms or mention the company's name any more.  But I will say the review is still up and unchanged and sits on the first page of results on Google for that company's name, so draw what conclusions you may.

But the case generated over $50,000 in legal expenses for me.  I probably would have paid that out of pocket just because I am curmudgeonly and was not going to back down, but in fact the legal costs were 100% covered by my personal liability and umbrella insurance.  Basically an umbrella means that if anything goes over the coverage limits of your policies, or slips through the cracks of your policies' various coverages, the umbrella kicks in.  The cost for the umbrella is close to a rounding error on my other insurance costs.   I am not even sure I asked for it initially, my helpful insurance guy just threw it in there for a few extra bucks.

A lot of people have to knuckle under to bullsh*t legal threats from corporations and the wealthy (think about all of Donald Trump's silly libel suites) because they can't afford to fight.  Arm yourself with the financial tools to fight such things.  Now, there may be (as with most insurance) good versions of this policy and bad ones.  I am sure we have some insurance folks in our readership who can say more in the comments.

First, two disclosures

1. I am short TSLA
2. I love the Model S.  I would love to own one.

At some level, the quality of the product is irrelevant.  They key questions are:  Does TSLA really justify a $60 billion valuation and does TSLA really deserve billions of dollars in taxpayer subsidies.

As to the first question, I will leave it up to you to research.  This is a good case for the short position.   I still think the SolarCity purchase was an absurd business decision and borderline corrupt.  The problem with shorts, especially in emotionally driven near-religion stocks like TSLA, is how long you have to hold on before the crash comes.

As for the second question, a guy who goes by the moniker of Montana Skeptic over at Seeking Alpha has been looking in to some of the larger Tesla subsidies, and the picture is not pretty.  Here is his analysis of the subsidy of the SolarCity plant in New York (SolarCity, another Musk company, was bailed out of near-bankruptcy and bought by Musk's Tesla, a smelly deal that put me on the road to shorting the company).  He tells a long, interesting story but the tl:dr is:

• In the fall of 2014, New York State awarded SolarCity a sumptuous subsidy package: free use of the enormous Riverbend factory and $750 million of taxpayer money to refurbish and equip the factory.

• The "Essential Purposes" of the subsidy deal were to enable manufacture and sale of Silevo's Triex technology, and then develop "next generation technology improving on the Triex product."

• Governor Andrew Cuomo praised the deal as a visionary accomplishment "of critical importance to the United States economic competitiveness and energy independence."

• In return for the subsidies, SolarCity promised to spend $5 billion in New York State over a 10-year period and to create 4,900 New York State jobs.

• After the deal was signed, SolarCity's promises were noiselessly scaled back.

• A promise that 1,460 of the jobs be "high-tech" disappeared. A promise to hire at least 900 people within two years of the factory opening shrank to 500.

• And, SolarCity's promise to hire 2,000 solar panel installers throughout the state quietly disappeared in December 2015. It appears SolarCity knew then - two months before Elon Musk and Lyndon Rive say they had their first merger discussions - that its solar panel business was failing.

• While SolarCity's obligations were shrinking, the factory opening was delayed. And delayed. And delayed some more. The opening is now almost two and one-half years late, with no date yet announced.

• Meanwhile, SolarCity has abandoned the Silevo technology and taken a huge write-off on its Silevo investment.

This is the sort of reporting you almost never see in the press.  All these subsidies for business development made on promises of jobs addition.  My experience is that the resulting promises are never kept.  Why does no one ever follow these things up?

Postscript:  I have a quibble with the article on cases for shorting TSLA.  This is one part:

Until recently, TSLA has been the recipient of substantial subsidies, fawning praise and a “fanboy” following. In other words, it has received large financial benefits from various governments which were not available to its automotive peers. It’s been judged by a non-critical press, and any problems with product quality and/or delays in timelines have been readily accepted by its hardcore supporters. All of this has combined to build the quixotic narrative which justifies the sky-high valuations outlined above.

Apple has benefited from this effect for years with no sign that its cult following is diminishing.  Just wait for Apple fanboys who lose there head over whatever Apple announces for its anniversary iPhone later this year.  Prediction:  Apple will add a number of new features already found on Android phones and the press will fawn over its inventiveness and leadership.

Most folks even slightly acquainted with the climate debate have seen Dr. Mann's hockey stick.  It is a historical temperature reconstruction using proxies such as the width of tree rings.

There were a zillion problems with this analysis, which I and many covered years ago and, frankly, I am past my tolerance in reiterating once again.  Just to name three:

• The inflection of the hockey stick occurs right where two completely different data sets - proxies and actual thermometer readings -- have been grafted together, leading one to wonder if the inflection is a real natural phenomenon or instead related to differences in how the data was gathered
• The blue line, of the proxy data, ends in 1950.  The reason for that is that the proxy data actually shows temperatures falling since 1950.  This does not mean that temperatures actually fell - we are sure they have risen -- it means that the proxies are not very good proxies.  If they are not following temperatures well in the last 50 years, why do we think they mirrored temperatures well in the 1000 years before that?
• As Steve McIntyre showed, while Mann used many proxies, his statistical method basically over-weighted a single data set from bristlecone pines in California and used techniques that were shown later to generate hockey sticks even from random noise.

Anyway, you can search Google and spend most of the day reading critiques and defenses of Mann.

But I think a lot of laymen missed the point of the analysis.  Folks want to say that the hockey stick proves we have a big current spike in temperatures -- ie they focus on the blade of the hockey stick.  But we already knew from surface temperature records that world temperatures have risen perhaps 0.8C over the last century.  And besides, as mentioned above, Mann's proxy data does not even confirm or support the current working.

No, the "insight" of the hockey stick analysis was the handle -- the fact that until 1900, Mann was essentially claiming that temperatures had been 1) dead flat with limited variation and 2) consistently well below current temperatures.  Prior to Mann's analysis, most scientists had a picture of past climate that had a warm period from 1000-1300 that was perhaps as warm as it is today followed by a cold period  (called the medieval warm period and the little ice age).  Most of this was based on historical analysis.  Go to your local university and find a medieval historian.  Going forward, universities will probably not teach any European history any more, but you probably can find a few old folks still hanging on via tenure.  I took an audio course from Philip Daileader of William and Mary and he started his course on the high middle ages (1000-1300) by saying the most important fact of that period was the demographic expansion allowed in part by a warm and favorable climate.  The warm climate allowed more food production as new areas, particularly in the north, could be brought into production.  In turn, after 1300, Europe was met with a cooler and wetter climate that created a horrible famine in the 1320's, which in turn likely weakened the population and made the black death a few decades later all the worse.  Later on, we have records of canals and rivers freezing across Europe that almost never freeze today.  This colder period lasted until the early 19th century (I use 1812 as a break as I think of the freezing Russian winter of that year that sent Napoleon home without most of his army).  Temperatures and sea levels began rising after that, long before man was burning fossil fuels in earnest.

This historical picture, shared by pretty much everyone until 20 years ago, was overturned by Mann.  Look at his chart - no warm period in the middle ages, and no substantially colder period just afterwards.  How did he refute the historical evidence, which is robust?  He waved this evidence off as limited to Western Europe.  Which was sort of funny, because most of his proxy data came from an even smaller area, the mountains east of Bishop, CA**.

So all this is a leadup to a new study out of China looking at temperature proxies for China.  And it turns out China, which is on the other side of the world from the west (I know that because when Bugs Bunny digs straight down he always comes out in China), has pretty much the same temperature history everyone before Michael Mann thought we had in Europe.

**postscript:  If you have a sports car, and want to drive a curving mountain road that does not have a lot of big cliffs and has pretty much zero other cars to get in the way, you might try Highway 168 from near Bishop up towards the ancient bristlecone pine forest.

A while back I wrote about this frustrating practice lawyers were training California employees to follow:

Years ago, in Ventura County California (where I am thankfully no longer doing business), a loyal employee approached our manager and told her of a meeting that had been held the night before for our employees at a local attorney's office.  The attorney was holding the meeting mainly because he was trying to drum up business, brainstorming with my employees how they might sue the company for a variety of fanciful wage and hour violations.  Fortunately, we tend to be squeaky clean on labor compliance, and the only vulnerable spot they found was on California break law, where shifting court decisions gave them an opening to extract a bit of money from the company over how we were managing lunch breaks.

Anyway, in the course of the meeting, the attorney apparently advised our employees that if they ever thought they were about to get fired, they should quickly accuse someone in the company of harassment or discrimination or some other form of law-breaking.  By doing so, they made themselves suddenly much more difficult to fire, and left the company open to charges of retaliation if the company did indeed fire them.   In later years, we saw at least two employees at this location file discrimination or harassment claims literally hours before they were to be terminated for cause.   Since then, I have seen this behavior enough, all over the country, to believe that this is a strategy that is frequently taught to employees.

So now we have the James Damore / Google memo brouhaha, of which I generally choose not to comment except to say that it is worth skimming the memo and comparing its contents to how it is portrayed in the press just to see how unreliable the media is.  However, I wanted to note this bit (gated WSJ):

But before his firing, Mr. Damore had complained to the National Labor Relations Board about superiors “misrepresenting and shaming me.” Now he is arguing that his dismissal constitutes retaliation. This is a stretch, since the labor board’s purview doesn’t extend to individual workplace disputes. But Mr. Damore could still try to take Google to court.

It is going to get super-tedious if every employee starts lobbing in an 11th hour government complaint when they are anticipating termination just to set up grounds for a retaliation claim.  Except in the case of grievous fire-on-the-spot misdeeds, it is generally good practice to give employees warnings of poor performance and potential termination so they have a chance to correct such behavior.  Terminations can certainly stressful and disappointing and aggravating, but they shouldn't be a surprise.  But perhaps in the future this may change and ambush firings will become the norm to avoid this kind of thing.

Next month I go to Hawaii, apparently (if I believe CNN) the imminent target of a North Korean nuclear attack.  While I am certainly not willing to bet my life on Donald Trump's ability to de-escalate an international conflict, I will bet it against North Korea's ability to hit a target the size of Hawaii with their current missiles  (A better strategy for them would be to detonate one somewhere generally to the west of Hawaii and let the fallout sew panic in the media).

After that, I head to Yellowstone, to sit on top of the Super Volcano that (if I believe CNN) is ready to blow.  Well, I am willing to take those odds.  Actually, the tilting and partial draining of Yellowstone Lake some years ago was probably more scary than the current spate of small earthquakes.  Besides, if it is really going to blow and pretty much destroy agriculture in this country, I would rather go quickly than slowly starve to death in some kind of road warrior style post-apocalyptic America.

I thought this was an interesting observation by University of New Mexico evolutionary psychology professor Geoffrey Miller, as quoted by Mark Perry:

Here, I just want to take a step back from the [Google] memo controversy, to highlight a paradox at the heart of the ‘equality and diversity’ dogma that dominates American corporate life. The memo didn’t address this paradox directly, but I think it’s implicit in the author’s critique of Google’s diversity programs. This dogma relies on two core assumptions:

• The human sexes and races have exactly the same minds, with precisely identical distributions of traits, aptitudes, interests, and motivations; therefore, any inequalities of outcome in hiring and promotion must be due to systemic sexism and racism;
• The human sexes and races have such radically different minds, backgrounds, perspectives, and insights, that companies must increase their demographic diversity in order to be competitive; any lack of demographic diversity must be due to short-sighted management that favors groupthink.

The obvious problem is that these two core assumptions are diametrically opposed. Let me explain. If different groups have minds that are precisely equivalent in every respect, then those minds are functionally interchangeable, and diversity would be irrelevant to corporate competitiveness. On the other hand, if demographic diversity gives a company any competitive advantages, it must be because there are important sex differences and race differences in how human minds work and interact.

Bottom Line: So, psychological interchangeability makes diversity meaningless. But psychological differences make equal outcomes impossible. Equality or diversity. You can’t have both. Weirdly, the same people who advocate for equality of outcome in every aspect of corporate life, also tend to advocate for diversity in every aspect of corporate life. They don’t even see the fundamentally irreconcilable assumptions behind this ‘equality and diversity’ dogma. American businesses also have to face the fact that the demographic differences that make diversity useful will not lead to equality of outcome in every hire or promotion. Equality or diversity: choose one.

Perry illustrates this with one of his ubiquitous Venn diagrams, which I am always happy to see because it just increases my royalties.

Trump seems to have adopted the Dow Jones Industrial Average as his primary metric of success.   Talk about buying at the top.  Not sure I would tie my performance appraisal to a market where the Shiller PE is over 30.