Coyote Blog

All these observations are good, but I will give you the first three:

1. The U.S. leads the world in health care spending per person, but not in health care outcomes. Many people look at that and say that health care costs too much in the U.S., and we should be able to get the same our better outcomes by sending less. Maybe that is correct, maybe not. That is not the point here. But–

2. the U.S. leads the world in K-12 education spending per student, but not in student outcomes. Yet nobody, says that education costs too much and that we should spend less. Except–

3. me. I believe that we spend way too much on K-12 educatio

Taxes are incredibly powerful things.  Tax something and you will get less of it.  But you might also get more of something you did not expect.  Taxes are the king of generating unintended consequences.  A huge part of human ingenuity (unfortunately) seems to be constantly geared towards evading taxes.  This is one reason I favor completely eliminating the corporate income tax -- way too many otherwise productive resources are marshaled towards managing the consequences of these taxes.

Last weekend I was in Cabo visiting a few friends and practicing my Spanish.  Many of the buildings in town (at least away from the resort areas) look like this:

This is a small retail commercial building with going concerns on the first floor (actually finished pretty nicely) but rebar and stuff sticking up from what looks like an unfinished second floor.   This is just one of many, many buildings that look like this.  My friend, who has run a resort in Cabo for decades, asked me what I thought was going on.  I said I assumed it was some sort of third world thing, perhaps a lack of financing that meant the first floor has to operate to generate cash flow for the second floor.

He answered that yes, there was very little financing for small business and real estate development so that sort of thing did happen.  But what was really going on here is tax management.  Until construction is completed, this structure is taxed as raw land rather than as a valuable commercial building.  It was typical practice to get approved for a two story building in the original plans, then stop construction after completing the first floor (which was all that was wanted anyway) and act like the building is still under construction.  Wala Voila (ed: lol, oops) -- ugly building but hefty tax reduction.

For those of you who want to write this off as a third world phenomenon, I will offer a similar example from personal experience.  Some years ago, because I did not have enough value-destroying investments in my life, I bought some raw land in Hawaii.  It is actually in a gated community, about half-built-out, but if you drive past my land you will likely see a cow on it.  What is a cow doing in a gated community on residential land?  Well, that is the point.  Without the cow, the land gets taxed as residential land.  With the cow, the land gets taxed as ranch land at perhaps a tenth the rate.  The homeowners association helps those of us with raw land to split the cost of the cows.

Update:  Here are the Hawaiian cows, next to one of my neighbor's front gate.  While they are more attractive than the exposed rebar on the building in Cabo, they serve the same purpose.

Sorry Trump supporters, your guys are not being "scrappy", they are being stupid.  In the same way that Harry Reid failed to understand that his party might some day be out of power and thus felt free to set precedents that are now helping the Republicans, Republicans will be out of power again some day and the precedents being set now will be used against them.  In fact, both parties are currently setting precedents we will have to live with the rest of our lives.

Two things in particular come to mind.  First is the bullying of judges.   This is just stupid.  Most senior judges are precisely the sort of folks who don't roll over to bullying, and in fact probably have a tendency to bare their teeth and fight back.  It is just simply insane for the Trump administration to make the statements they are making about pending cases and their judges.

Second, the censure last night of Elizabeth Warren was ridiculous.  I actually think the criticisms of racism of Sessions are dated and overblown, but so what?  They are perfectly reasonable criticisms to bring up in a confirmation hearing.  Just because Sessions is a Senator should not make him immune to criticism in confirmation hearings.  The Senate should recognize in their rules that criticizing a Senator in a confirmation debate is way different than criticizing a Senator in the normal course of Senate business. Of course, these Senate rules are exactly why Presidents love to nominate Senators for the Cabinet, because they tend to get a pass from their old colleagues.  Well, no more.

Kevin Drum laments that people are "Americans Flee America For Overseas Health Care Just Like Canadians."  My response in his comments:

I am confused by your using the word "flee". If I buy a Toyota, no one says I am "fleeing" the US manufacturing system. It is a global economy, and I don't know why the globalization of health care services is anything but a good thing. We have put so many barriers in the way of expanding capacity (licensing, certificates of need, FDA approvals, etc) and legislated so many artificial monopolies in health care, it seems perfectly reasonable, even good news, that competition for medical services is emerging from other countries.

In 1973, when Ford was rolling out such losers as the Pinto and the Mustang II, would the cars have been any better if the Ford designers had, say, a budget twice as large?  Or would the same people have continued to roll out the same bad cars, just more expensively, until competition from Japan and Europe forced American car makers to get their act together?

If you have not been to a Sears store lately, and you have lots of company.  If you do not shop at Sears, think about why.  Now, imagine that Sears were to double the number of employees in their local store.  Would that change your mind and suddenly send you into the store to shop?  No?

There are times when everything about an organization is broken -- its management, its culture, its strategy.  These organizations may have perfectly good people in them -- I have no doubt that the folks at Ford in the 1970's were capable people, as are the employees at my local Sears store.   I call all these factors "organizational DNA".  This is from years ago about a corporate example, but the same is true of any organization:

All these management factors, from the managers themselves to process to history to culture could better be called the corporate DNA.  And DNA is very hard to change.  Walmart may be freaking brilliant at what they do, but demand that they change tomorrow to an upscale retailer marketing fashion products to teenage girls, and I don't think they would ever get there.  ...

Corporate DNA acts as a value multiplier.  The best corporate DNA has a multiplier greater than one, meaning that it increases the value of the people and physical assets in the corporation.  When I was at a company called Emerson Electric (an industrial conglomerate, not the consumer electronics guys) they were famous in the business world for having a corporate DNA that added value to certain types of industrial companies through cost reduction and intelligent investment.  Emerson's management, though, was always aware of the limits of their DNA, and paid careful attention to where their DNA would have a multiplier effect and where it would not.  Every company that has ever grown rapidly has had a DNA that provided a multiplier greater than one... for a while.

But things change.  Sometimes that change is slow, like a creeping climate change, or sometimes it is rapid, like the dinosaur-killing comet.  DNA that was robust no longer matches what the market needs, or some other entity with better DNA comes along and out-competes you.  When this happens, when a corporation becomes senescent, when its DNA is out of date, then its multiplier slips below one.  The corporation is killing the value of its assets.  Smart people are made stupid by a bad organization and systems and culture.  In the case of GM, hordes of brilliant engineers teamed with highly-skilled production workers and modern robotic manufacturing plants are turning out cars no one wants, at prices no one wants to pay.

I would argue that public schools in many parts of the country are in this situation.  Any organization can become senescent with value-killing DNA, but this process happens much more rapidly when there is no competition, as has been the case for public schools which have enjoyed a virtual monopoly enforced by the government (you can go to a competing school but you still have to pay for the government school you are not using).

If I am right, then the last thing you would expect to help is simply pouring more money into the same management, the same culture, the same organizational DNA.  But that is exactly what we have done.  That has been our lead strategy for 35 years, and still remains the preferred strategy of the Left.  Via Mark Perry:

Despite this history, President Obama's strategy was to throw even more money at the schools, and again it did not work:

One of the Obama administration’s signature efforts in education, which pumped billions of federal dollars into overhauling the nation’s worst schools, failed to produce meaningful results, according to a federal analysis.

Test scores, graduation rates and college enrollment were no different in schools that received money through the School Improvement Grants program — the largest federal investment ever targeted to failing schools — than in schools that did not.

The Education Department published the findings on the website of its research division on Wednesday, hours before President Obama’s political appointees walked out the door.

“We’re talking about millions of kids who are assigned to these failing schools, and we just spent several billion dollars promising them things were going to get better,” said Andy Smarick, a resident fellow at the American Enterprise Institute who has long been skeptical that the Obama administration’s strategy would work. “Think of what all that money could have been spent on instead.”

One will hear that criticism of public schools in unfair because they have all these great teachers in them.  Examples will be cited.   I say:  "Exactly!"  That is why change is needed.  Public schools are hiring good people and putting them in an organization and system where they deliver poor results.  Let's liberate this talent.

By the way, one of the misconceptions about school choice is that it necessarily means the end of public schools.  I find this an unlikely outcome, at least in most areas.  Competition from Japan meant that Ford lost some of its customers to Toyota, but it also meant that Ford became a lot better.

...Is that Julio Jones's catch may be forgotten.  Best reception I have ever seen in a lot of years of watching football.  Video here at NFL site

PS-  Run the ball three times after that catch, kick a field goal, and the Falcons would be your Superbowl champions.

A couple weeks ago I was having dinner with a couple of guys who fear and despise Trump.  I told them that all the marches in the streets were not going to affect Trump's behavior one bit, though it will affect the behavior of the Congress when (and if, given the new Imperial presidency, copyright Bush and Obama) they are called on to ratify some of Trump's actions.  I told them that the biggest check on Trump, at least in the near term on issues like immigration, was going to be American corporations.  As much as the Left may not like corporations, businesses need trade and immigration and free international travel to function in the global economy and they are not going to be happy about all of Trump's planned restrictions (you could see echoes of that last night in a number of the Superbowl commercials).

So of course the Left gears up a #DeleteUber campaign because Uber didn't participate in a taxi strike at JFK protesting Trump's immigration order.  Essentially, protesters who are mad at Trump for restricting travel are mad at Uber for, uh, not restricting travel.  In the end, all the #DeleteUber folks did was force the Uber CEO to quit Trump's advisory counsel.  Congratulations Left, you managed to remove a likely voice of reason from inside the White House.

I would happily join up with the Left in opposition to a lot of Trump's actions if I wasn't so absolutely horrified at their tactics.  There is no reason, no thoughtfulness at all.  Even the media participates in this dumbing down by simply refusing to making issues clear (e.g. continuing to call the 90-day visa timeout from 7 countries a "muslim ban").  And the first person from the Left who I hear criticize the anti-free-speech violence at Berkeley will be the first.

Update:  97 tech firms team up against Trump's immigration ban.  The problem with this approach is that I am not sure the "immigration ban", which is in fact a 90-day pause in issuing visas to folks from 7 countries, is actually illegal under current law and precedent.   Obama did something similar with Iraq at one point.   But I am happy to see them taking a shot at it -- in my mind a single person should not have this much power.  By the way, Amazon and Tesla did not sign, in part because their leaders still sit on Trump's advisory board.  The latter strikes me as a reasonable strategy, but I wonder how long the Left will allow them to remain inside the tent.

California is beautiful.  Many parts have great weather.  There are a lot of smart people there and some good schools.  Both my kids live there right now, though it is really expensive given the state and local governments' propensity to take many steps to limit the supply of housing.

But it is simply impossible to do business in.  Every single legislative session brings a series of new time-consuming and expensive regulatory requirements.  Despite California having some of the best recreation spots in the world, we have systematically reduced our business in California by 50%, and I have a moratorium in place on accepting new business (I won't even look at RFP's and proposals to avoid being tempted.)  I wrote about this process a number of times, including here.

This week, Hans Bader covers this ground and more in his article about businesses fleeing California to places like Texas.

It does not surprise me that service industries, particularly those that provide high-margin services to the wealthy, stay in California -- service businesses have to be close to their customers.  But it always blows me away when I see anyone manufacturing in California.  Why?  Move over the border into Nevada or Arizona or Mexico and costs go down a lot without any real increase in logistics costs.  California does not even want you there -- I am convinced they achieve most of their environmental goals merely by chasing folks over the border, exporting these issues rather than solving them.

For some reason, Wordoress has removed the underline button in the editor.  I can bold, and italicize, but not underline for some reason.  I have zero idea why there was such a burning need to eliminate this pretty basic feature of an editor.  I suppose I can go in an manually add in html codes, but why bother with an editor if I have to do that kind of cr*p.

Update:  There is a plugin to get it back.  The re-add and rearrange option it adds to the writing settings menu is the one I chose.  The underline button was always in a goofy spot and the re-arrange option puts it logically next to bold and italic.  Apparently, WordPress thought underlined text was confusing because users mistake it as a link, but I feel like my format I have adopted make the two pretty clearly different.  Also, I use wordpress as the engine for most of my business web sites, so we needed to be able to underline.

I just updated my climate presentation with data through December of 2016, so given "hottest year evah" claims, I thought I would give a brief update with the data that the media seldom ever provides.  This is only a small part of my presentation, which I will reproduce for Youtube soon (though you can see it here at Claremont-McKenna).  In this post I will address four questions:

• Is the world still warming?
• Is global warming accelerating?
• Is global warming "worse than expected"?
• Coyote, How Is Your Temperature Prediction Model Doing?

Is the world still warming:  Yes

We will use two data sets.  The first is the land surface data set from the Hadley Center in England, the primary data set used by the IPCC.  Rather than average world absolute temperature, all these charts show the variation or "anomaly" of that absolute temperature from some historical average (the zero point of which is arbitrary).  The theory is that it is easier and more accurate to aggregate anomalies across the globe than it is to average the absolute temperature.  In all my temperature charts, unless otherwise noted, the dark blue is the monthly data and the orange is a centered 5-year moving average.

You can see the El Nino / PDO-driven spike last year.  Ocean cycles like El Nino are complicated, but in short, oceans hold an order of magnitude or two more heat than the atmosphere.  There are decadal cycles where oceans will liberate heat from their depths into the atmosphere, creating surface warming, and cycles where oceans bury more heat, cooling the surface.

The other major method for aggregating global temperatures is using satellites.  I use the data from University of Alabama, Huntsville.

On this scale, the el nino peaks in 1999 and 2017 are quite obvious.  Which method, surface or satellites, gets a better result is a matter of debate.  Satellites are able to measure a larger area, but are not actually measuring the surface, they are measuring temperatures in the lower tropospehere (the troposphere's depth varies but ranges from the surface to 5-12 miles above the surface).  However, since most climate models and the IPCC show man-made warming being greatest in the lower troposphere, it seems a good place to measure.  Surface temperature records, on the other hand, are measuring exactly where we live, but can be widely spaced and are subject to a variety of biases, such as the urban heat island effect.  The station below in Tucson, located in a parking lot and surrounded by buildings, was an official part of the global warming record until my picture became widely circulated and embarrassed them in to closing it.

This argument about dueling data sets goes on constantly, and I have not even mentioned the issues of manual adjustments in the surface data set that are nearly the size of the entire global warming signal.  But we will leave these all aside with the observation that all data sources show a global warming trend.

Is Global Warming Accelerating?  No

Go into google and search "global warming accelerating".  Or just click that link.  There are a half-million results about global warming accelerating.  Heck, Google even has one of those "fact" boxes at the top that say it is:

It is interesting by the way that Google is using political advocacy groups for its "facts" nowadays.

Anyway, if global warming is so obviously accelerating that Google can list it as a fact at the top of its search page, it should be obvious from the data, right?  Well let's look.  First, here is the satellite data since I honestly believe it to be of higher quality than the surface records:

This is what I call the cherry-picking chart.  Everyone can find a peak for one end of their time scale and a valley for the other and create whatever story they want.  In economic analysis, to deal with the noise and cyclicality, one will sometimes see economic growth measured peak-to-peak, meaning from cyclical peak to the next cyclical peak, as a simple way to filter out some of the cyclicality.  I have done the same here, taking my time period as about 18 years from the peak of the 1999 El Nino to 2017 and the peak of the recent El Nino.  The exact data used for the trend is show in darker blue.  You can decide if I have been fair.

The result for this time period is a Nino to Nino warming trend of 0.11C.  Now let's look at the years before this

So the trend for 36 years is 1.2C per century but the trend for the last half of this is just 0.11C.  That does not look like acceleration to me.  One might argue that it may again accelerate in the future, but I cannot see how so many people blithely treat it as a fact that global warming has been accelerating when it clearly has not.  But maybe its just because I picked those darn satellites.  Maybe the surface temperatures show acceleration?

Nope.  Though the slow down is less dramatic, the surface temperature data never-the-less shows the same total lack of acceleration.

Is Global Warming "Worse Than Expected"?  No

The other meme one hears a lot is that global warming is "worse than expected".  Again, try the google search I linked.  Even more results, over a million this time.

To tackle this one, we have to figure out what was "expected".  Al Gore had his crazy forecasts in his movie.  One sees all kinds of apocalyptic forecasts in the media.  The IPCC has forecasts, but it tends to change them every five years and seldom goes back and revisits them, so those are hard to use.  But we have one from James Hansen, often called the father of global warming and Al Gore's mentor, from way back in 1988.  His seminal testimony in that year in front of Congress really put man-made global warming on the political map.  Here is the forecast he presented:

Unfortunately, in his scenarios, he was moving two different variables (CO2 levels and volcanoes) so it is hard to tell which one applies best to the actual history since then, but we are almost certainly between his A and B forecasts.  A lot of folks have spent time trying to compare actual temperatures to these lines, but it is very hard.  The historical temperature record Hansen was using has been manually adjusted several times since, so the historical data does not match, and it is hard to get the right zero point.  But we can eliminate the centering issues altogether if we just look at slopes -- that is all we really care about anyway.  So I have reproduced Hanson's data in the chart on the left and calculated the warming slopes in his forecast:

As it turns out, it really does not matter whether we choose the A or B scenario from Hansen, because both have about the same slope -- between 2.8C and 3.1C per century of warming from 1986 (which appears to be the actual zero date of Hansen's forecast) and today.  Compare this to 1.8C of actual warming in the surface temperature record for this same period, and 1.2C in the satellite record.  While we have seen warming, it is well under the rates predicted by Hansen.

This is a consistent result to what the IPCC found in their last assessment when they evaluated past forecasts.  The colored areas are the IPCC forecast ranges from past forecasts, the grey area was the error bar (the IPCC is a bit inconsistent when it shows error bars, including error bands seemingly only when it helps their case).  The IPCC came to the same result as I did above:   that warming had continued but was well under the pace that was "expected" form past forecasts.

By the way, the reason that many people may think that global warming is accelerating is because media mentions of global warming and severe weather events has been accelerating, leaving the impression that things are changing faster than they truly are.  I wrote an article about this effect here at Forbes.  In that I began:

The media has two bad habits that make it virtually impossible for consumers of, say, television news to get a good understanding of trends

1. They highlight events in the tail ends of the normal distribution and authoritatively declare that these data points represent some sort of trend or shift in the mean
2. They mistake increases in their own coverage of certain phenomenon for an increase in the frequency of the phenomenon itself.

Coyote, How Is Your Temperature Prediction Model Doing?  Great, thanks for asking

Ten years ago, purely for fun, I attempted to model past temperatures using only three inputs:  A decadal cyclical sin wave, a long-term natural warming trend out of the little ice age (of 0.36 C per century), and a man-made warming trend really kicking in around 1950 (of 0.5C per century).  I used this regression as an attribution model, to see how much of past warming might be due to man (I concluded about half of 20th century warming may be due to manmade effects).  But I keep running it to test its accuracy, again just for fun, as a predictive tool.  Here is where we are as of December of 2016 (in this case the orange line is my forecast line):

Still hanging in there:  Despite the "hottest year evah" news, temperatures in December were exactly on my prediction line.  Here is the same forecast with the 5-year centered moving average added in light blue:

Via Don Boudreaux

Tired of politics?  Want to escape for a while?  Maybe talk sports, take in a movie, play a computer game, or go to a show.  Well good luck.

Over the last year, I have turned off ESPN Radio, which I used to listen to all the time, because I got bored with all the discussion of politics and social justice.  It wasn't even that I necessarily disagreed with the content, it is just that I was tuning in to listen to discussion about the merits of various NFL defenses and not some ex-jock's views on politics.  If I want politics and social justice, I have other sources for those (I actually think there are some fascinating race and gender issues in sports, I just don't need to hear about them in every damn show).  The same thing is happening in almost all entertainment fields.  Over the last month at least a third of Engadget.com's blog posts have been purely about politics with no technology hook at all.  If you go to a Broadway show, there is a chance you will get lectured on social justice by the actors.  And God forbid one tunes into a music or movie awards show and expects to, naively, see non-political content about music and movies.  You can't pay me enough to watch the Oscars any more.

I often observe that American politics have become tribal.  It is an unfortunate human tendency to divide up into groups and then decide that some other group over there is really, really awful and an existential threat to your own group.  This is where I see politics today.  Sure, there are still real policy disagreements, but these can shift so much one has to wonder if people are taking a position based on real, rational evaluation or simply because the rival tribe has taken the opposite position.  Just look at shifting red/blue attitudes on Russia.  The Left hated drone strikes under GWB but have gone silent on them with Obama, despite Obama actually ordering more of them.   Republicans denounce Obama's executive orders on immigration as unconstitutional but welcome them from Trump.  Policy issues are no longer things to be solved, but are merely props to generate outrage and over which to score points in the left-right tribal warfare.

This post from Warden at Ace of Spades, which is  being greeted with cheers on the Right, is the best example I have seen in a while of political tribal warfare:

This same indifference that helped Trump carry the election has continued into the early days of his administration. With it comes a refreshingly freeing state of mind. Personally, I don't feel in any way responsible for Trump, nor do I feel compelled to defend him against attack.

Why? Because I voted for retribution.

"He's think-skinned and petty!" shrieks the left. "He takes everything personally!"

Good, I say. I want him to take attacks personally and deal out payback. I know I won't be the target, you will be.

"He's unpresidential! He'll destroy the integrity of the office!"

No, that's already happened. Remember, you elected a shit-talking jackass who takes selfies at state funerals when he's not giving stealth middle fingers to his opponents during debates. There is no dignity of the office, not after Clinton and Obama.

"He's a narcissist! He's got totalitarian impulses!"

Yes, he's basically a mirror version of Obama. Except now, he'll be working for what I want. The end justifies the means. You taught me that

....

I literally don't care what Donald Trump does because nothing he can do is worse than what they've already done.

Donald Trump isn't the bully; he only insults and abuses people in power who have attacked him. They're the fucking bullies. The left, with their smears, their witch hunts, their slanders, their insults, their riots, their violence, and their weaponizing of the federal bureaucracy.

There aren't any rules anymore because the left only applies them one way. And in doing so, they've left what once was a civil compact between the two parties in smoldering ruins.

I have no personal investment in Donald Trump. He is a tool to punish the left and roll back their ill-gotten gains, no more and no less. If he succeeds even partially in those two things, then I'll consider his election a win.

Further, I no longer have any investment in any particular political values, save one: The rules created by the left will be applied to the left as equally and punitively as they have applied them to the right. And when they beg for mercy, I'll begin to reconsider. Or maybe not. Because fuck these people.

Here is an example of the approving reception for this on the Right

We personally hope, as we’re sure that Warden does, that President Trump goes on to accomplish much greater things. All of our futures depend on it, after all. But even if all he does is to make the Prozis feel the pain that normal Americans have had shoved in their faces for 8 damnable years, if all he does is finally wake the limp wrists on our side up to the simple fact that it’s not wrong if you’re just turning the tables on the swine, using their own methods against them until they come crawling on their bellies, begging for peace, then we’ll take it as a solid win.

It’s wrong to kick somebody in the nuts, we’ve taught our Heirs that ever since they got old enough to potentially get in a fight, but it’s NOT wrong to do so if the dishonorable piece of shit facing you tries to do it to you first. And if he tries and succeeds, then you need to work on your technique and reflexes.

It’s never, ever wrong to use the enemy’s rule book against himself. He wrote it, not you, he made the choice when he deemed it acceptable to use his methods against you, when he showed up to a debate armed with a rifle, he made it OK to shoot him in the face with your own, and if you insist on resorting to limp notes of disapproval, then you’re the idiot, not him.

The other element I see in both statements is a strong flavor of the playground justification "the other guy started it!"  This is self-serving crap.   There is no good justification for violating the norms of rational civil discourse, or worse, for violating the rule of law.  None.  Every tyrant in all of history has justified their actions based on "the other guy started it".  Up to and including Hitler, who justified brownshirt tactics on the violence of communist groups who "started it".

I read blogs from the Left and Right in equal measure.  I have friends from both the far Left and far Right.  Hell, I have family from the far Left and far Right.  And I can tell you something -- every member of the Left and Right absolutely believe, without possibility of contradiction, that:

• Their side loses too often because the other side use bare knuckle tactics and their side is too polite.
• Their side does bad things only because the other side started it.

President Trump is a strong economic nationalist.  He believes that this country should source everything domestically - its products and its labor - and any labor or resources that are coming from other countries should either be stopped by a wall or heavily taxed.

Economists and I will spend a lot of time over the next four years trying to explain to our economically-ignorant administration why global trade and the global division of labor increase domestic incomes and production rather than decreasing them.  But I do not want to lose sight of another important benefit of open trade in the global economy - peace.

We often miss the fact because our news is dominated by stories of violence and terror, but we live in times of unprecedented peace around the world.  It is no coincidence that this is occurring at the same time that global trade is at a historic peak.  People and governments can obtain just about anything they want, inexpensively, through voluntary trade.  This has seldom been the case through history -- and when people could not get what they wanted through free trade, they tried to take it by force.

Think about the corollary of Trump's economic nationalism, particularly if everyone followed this same approach.  If one skews all the rules and taxes and prohibitions so everything must be sourced domestically, then if a country does not have some particular resource or skill domestically, it is out of luck.  No domestic rare earth metals?  Sorry.

But governments and powerful people seldom calmly accept that something they critically need is not available.  They will be tempted to go and take it.  The worst, most violent empire building of the last 100-150 years has occurred when countries have pursued economic nationalism.  Think of the colonialism of the late 19th century.  Today we happily trade with South Africa and other countries for valuable resources, but in that time of economic nationalism, if a country wanted access to these resources, it felt it had to control the land and the people.  Hitler in the 1930's wanted to make Germany self-sufficient in agricultural goods and certain other resources, and the only way to do that was to go and grab other people's land and resources.

The best example of all of this phenomenon is, I think, Japan in the 1930's.  Japan felt that it was resource poor and under Trump's theory of economic nationalism, it felt it had to control oil and other resources it did not have domestically.  So it plotted to go take it.  When the US instituted a trade embargo in these very goods to punish Japan's aggressiveness in China, it just accelerated Japan's thinking in this area, convincing it for good it had to control these resources, and it was soon invading the oil-rich islands of what is now Indonesia.  This example is all the more telling because Japan actually found true prosperity after the war when it traded peacefully for these resources.  Unfortunately, it adopted economic nationalism, via MITI, of another form and helped manage themselves into a 20-year recession, but that is another trade-related story for another day.

Postscript:  I have more to say on this when I get my thoughts better organized.  Right now I am hurrying to a plane, for Regina, Canada, where I am speaking on global warming tomorrow.  There is a related issue of what happens when strong protectionism on our part pushes China over into the crash they have been putting off for years -- suddenly a crash largely of their making becomes the fault of the US, with implications for a formation of a new cold war, but that again is another topic for another day.

Yesterday, I suggested we needed a new, real consumer advocacy organization to replace the economically ignorant Nader-led PIRG organizations.  The reason is that it is time that consumers banded together and resisted Trump's protectionism, since such protection generally protects a few politically favored unions and corporations while raising prices and reducing choice for all consumers.

A couple of hours after I posted that, the absolutely indispensable Mark Perry brings us a great post on academic research about how protectionist actions nearly always cost consumers more than they help producers.

The empirical evidence above helps us to understand a very important economic lesson about international trade, call it “protectionist math” — and that mathematical reality is that the costs of protectionism imposed on American consumers in the form of higher prices and a reduction in trade will always be greater than the benefits generated for the protected industries and the workers in those industries. And here’s another part of that “protectionist math” that helps us answer the question: Sure, we can save US jobs with protectionist trade policies, but how much does it cost consumers for every job saved with protectionist trade policy, and is that cost worth it? Economic analysis and the empirical evidence presented above suggest that it’s very, very expensive to save US jobs with protectionism — more than half-a-million dollars on average per year per job in 2016 dollars (see chart above). If Trump enacts protectionist policies that save $50,000 per year US factory jobs but at a cost to consumer of $500,000 annually for each job saved, that’s a surefire formula to “Make America Expensive and Poor Again,” not “great again.”

I won't reprint his chart, but he has detailed results form a number of academic studies in different industries that back this statement up.

My point about needing a new consumer advocacy group was a little tongue in cheek, but here is Perry quoting from a study at the Federal Reserve Bank of St Louis a number of years ago (back during the last wave of protectionism, which was based on Japan rather than China bashing).

The primary reason for these costly protectionist policies relies on a public choice argument. The desire to influence trade policy arises from the fact that trade policy changes benefit some groups, while harming others. Consumers are harmed by protectionist legislation; however, ignorance, small individual costs, and the high costs of organizing consumers prevent the consumers from being an effective force. On the other hand, workers and other resource owners in an industry are more likely to be effective politically because of their relative ease of organizing and their individually large and easy-to-identify benefits. Politicians interested in re-election will most likely respond to the demands for protectionist legislation of such an interest group.

As an example, from the WSJ today:

Auto executives typically spend the end of the year prepping for product debuts and thinking up ways to spark sales.

This time around, Detroit’s chiefs devoted considerable time to trying to figure out how to deal with the nation’s new commander in chief. Union bosses are being called in to consult on how to reshuffle factory work, board members are trying to figure out who has friends in President Donald Trump ’s new administration, and task forces have been created to monitor his Twitter account.

At a dinner party during the Detroit auto show earlier this month, Ford Motor Co. Chief Executive Mark Fields said he reread Mr. Trump’s “The Art of the Deal” over the holidays. He first read it in the 1980s, but wants to better understand the new occupant of the Oval Office.

American companies, several of which have been scolded by Mr. Trump, often via Twitter, are suddenly grappling with a new, unpredictable force in their operations. Barbs have included the price the Pentagon pays for Lockheed Martin Corp. jets and whether Carrier Corp. assembles furnaces in Indiana. AT&T Inc. Chief Executive Randall Stephenson recently met with Mr. Trump, who had expressed concerns about the telecom giant’s proposed purchase of Time Warner Inc.

In other words, rather than worrying about pleasing consumers, auto companies are spending all their time figuring out how to please the occupant of the White House.  This sounds more like corporate life in Venezuela than the US.  It is absurd that Trump claims to be about reducing regulation, and then personally intervenes to micro-manage corporate division-of-labor and sourcing decision.

We need new consumer activist organizations.  The classic ones, like Nader's PIRG, are captured by progressives and economic illiterates.  Economic nationalism and tariffs and reduced immigration and border taxes and elimination of free trade treaties are all direct assaults on the American consumer.  Do all the Midwestern folks who voted for Trump ostensibly because they are struggling economically really want 20% higher prices in their Wal-Mart?

Postscript:  By the way, for a moment let's accept this awful situation.  Consider women's groups (as discussed here) and their response to Trump and Ford's response.  Which is more likely to succeed?  If abortion were my #1 issue (as it is for my wife), I would be seriously concerned that women's groups were using all the wrong tactics.  Trump is petulant.  He does not back down based on protests, he moves you up the target list.   This is a terrible, awful character flaw, but it is reality.  If women's groups had calmly sat down with Trump in a back room and worked out a deal (with a man who is a lifelong social liberal) they would probably be further ahead.

I have been watching the Crown as well as the new PBS Victoria series, and it got me to thinking.  Wow, it sure does seem useful to have a single figurehead into which the public can pour all the sorts of adulation and voyeurism that they seem to crave.  That way, the people get folks who can look great at parties and make heart-felt speeches and be charismatic and set fashion trends and sound empathetic and even scold us on minor things.  All without giving up an ounce of liberty.  The problem in the US is we use the Presidency today to fulfill this societal need, but in the process can't help but imbue the office with more and more arbitrary power.  Let's split the two roles.

Update:  Don Boudreaux writes:

A Trump presidency comes along with awful risks for Americans.  Yet one very real silver-lining is that Trump’s over-the-top buffoonery and manic barking like a dog at every little thing that goes bump in his sight, along with his chronic inability even to appear to be thoughtful and philosophical and reflective and aware that he is not the center of the universe, might – just might – scrub off some of the ridiculous luster that has built up on on the U.S. Presidency over the course of the past 90 or so years.  Let us hope.

He also links a good article from Kevin Williamson on the cult of the Presidency

Inauguration day is probably one of my 2 or 3 least favorite days in every decade.  My feelings on the whole exercise are probably best encompassed by a conversation I had the other day at a social function.

A couple of my many liberal friends were complaining vociferously about the upcoming Trump Presidency.  After a while, one observed that I seemed to be insufficiently upset about Trump.  Was I a secret supporter?

I said to them something roughly as follows:  You know that bad feeling you have now?  That feeling of anger and fear and exasperation that some total yahoo who you absolutely disagree with has been selected to exercise power over you, power that offends you but you have to accept?  Yeah, well I feel that after every Presidential election.  Every.  Single.  One.   At some point we need to stop treating these politicians as royalty and instead treat them as dangerous threats whose power needs to be circumscribed in every way we can find.

Anyway, 8 years ago I felt absolutely the same way (proof here) but at that time I was out-of-step with most of those around me, and my liberal friends thought I was being some sort of racist pig.  Now I act exactly the same way and they accuse me of being some sort of collaborator with the enemy.  Lolz.

The other day, in writing about how I think Black Lives Matter has lost its way, I said that I supported their goal of increasing accountability of police forces but that goal was going to take a lot of hard, nuts-and-bolts legislative and policy steps that BLM seems uninterested in pursuing.  This article from Reuters (via link from Overlawyered) gives one an idea of some of the issues that exist:

The episode is a telling snapshot of the power police unions flex across the United States, using political might to cement contracts that often provide a shield of protection to officers accused of misdeeds and erect barriers to residents complaining of abuse.

From city to city, union contracts have become just as crucial in governing departments as police manuals and city charters. Yet those contracts are coming under scrutiny amid civil rights protests over alleged police abuses, including shootings of unarmed black subjects.

Reuters, examining the fine print of 82 police union contracts in large cities across the country, found a pattern of protections afforded the men and women in blue:

• A majority of the contracts call for departments to erase disciplinary records, some after just six months, making it difficult to fire officers with a history of abuses. In 18 cities, suspensions are erased in three years or less. In Anchorage, Alaska, suspensions, demotions and disciplinary transfers are removed after two years.

• Nearly half of the contracts allow officers accused of misconduct to access the entire investigative file – including witness statements, GPS readouts, photos, videos and notes from the internal investigation – before being interrogated.

• Twenty cities, including San Antonio, allow officers accused of misconduct to forfeit sick leave or holiday and vacation time rather than serve suspensions.

• Eighteen cities require an officer’s written consent before the department publicly releases documents involving prior discipline or internal investigations.

• Contracts in 17 cities set time limits for citizens to file complaints about police officers – some as short as 30 days. Nine cities restrict anonymous complaints from being investigated.

Police and their supporters will say that Police have a particularly dangerous job and need such extra process protections.  In fact, while there are dangers, it is certainly not among the most dangerous jobs (trash collectors are twice as likely to die on the job than police).  I would argue that we give the police unique powers -- to use violence and to take away a persons liberty -- not possessed by any other citizens and thus we should expect more rather than fewer accountability provisions to go with these special powers.

I will say that I am not particularly optimistic about progress in this area.  The Right tends to fetishize police and are tend to oppose any restrictions on police.  The Left is the natural home for police reform, but most on the Left are loath to take on public employee unions, probably their strongest base of political power, and most of these changes (as seen above) require challenging the police unions.  Black Lives Matter brought a lot of focus to these issues, but they simply can't seem to get past disruption and into policy changes and legislation, and besides the group appears to have been hijacked by the Left to be a vehicle for generic protests of Progressive causes like climate change legislation.

Well, I got dis-invited yet again from giving my climate presentation.  I guess I should be used to it by now, but in this case I had agreed to actually do the presentation at my own personal expense (e.g. no honorarium and I paid my own travel expenses).  Since I was uninvited 2 days prior to the event, I ended up eating, personally, all my travel expenses.  There are perhaps folks out there in the climate debate living high off the hog from Exxon or Koch money, but if so that is definitely not me, so it came out of my own pocket.   I have waited a few days after this happened to cool off to make a point about the state of public discourse without being too emotional about it.

I don't want to get into the details of my presentation (you can see it here at Claremont-McKenna College) but it is called "Understanding the Climate Debate:  The Lost Middle Ground" (given the story that follows, this is deeply ironic).  The point of the presentation is that there is a pretty mainstream skeptic/lukewarmer position that manmade warming via greenhouse gasses is real but greatly exaggerated.  It even suggests a compromise legislative approach implementing a carbon tax offset by reductions in some other regressive tax (like payroll taxes) and accompanied by a reduction in government micro-meddling in green investments (e.g. ethanol subsidies, solyndra, EV subsidies, etc).

I am not going to name the specific group, because the gentleman running the groups' conference was probably just as pissed off as I at the forces that arrayed themselves to have me banned from speaking.  Suffice it to say that this is a sort of trade group that consists of people from both private companies and public agencies in Southern California.

Attentive readers will probably immediately look at the last sentence and guess whence the problem started.  Several public agencies, including the City of Los Angeles, voiced EXTREME displeasure with my being asked to speak.  The opposition, particularly from the LA city representative, called my presentation "the climate denier workshop" [ed note:  I don't deny there is a climate] and the organizer who invited me was sent flat Earth cartoons.

Now, it seems kind of amazing that a presentation that calls for a carbon tax and acknowledges 1-1.5 degrees C of man-made warming per century could be called an extremist denier presentation.  But here is the key to understand -- no one who opposed my presentation had ever bothered to see it.  This despite the fact that I sent them both a copy of the CMC video linked above as well as this very short 4-page summary from Forbes.  But everyone involved was more willing to spend hours and hours arguing that I was a child of Satan than they were willing to spend 5-minutes acquainting themselves with what I actually say.

In fact, I would be willing to bet that the folks who were most vociferous in their opposition to this talk have never actually read anything from a skeptic.  It is a hallmark of modern public discourse that people frequently don't know the other side's argument from the other side itself, but rather from its own side (Bryan Caplan, call your office).   This is roughly equivalent to knowing about Hillary Clinton's policy positions solely from listening to Rush Limbaugh.  It is a terrible way to be an informed adult participating in public discourse, but unfortunately it is a practice being encouraged by most universities.  Nearly every professor is Progressive or at least left of center.  Every speaker who is not left of center is banned or heckled into oblivion.  When a speaker who disagrees with the Progressive consensus on campus is let through the door, the university sponsors rubber rooms with coloring books and stuffed unicorns for delicate students.  There are actually prominent academics who argue against free speech and free exchange of diverse ideas on the theory that some ideas (ie all the ones they disagree with) are too dangerous be allowed a voice in public.   Universities have become cocoons for protecting young people from challenging and uncomfortable ideas.

I will take this all as a spur to do a next generation video or video series for YouTube  -- though YouTube has started banning videos not liked by the Left, there is still room there to have a public voice.  I just bought a nice new microphone so I guess it is time to get to work.  I am presenting in Regina next week (high 22F, yay!) but after that I will start working on a video.

Postscript:  You know what this reminds me of?  Back when I was a kid, forty years ago growing up in Texas, from time to time there would be a book-banning fight in the state.  Perhaps there still are such fights.  Generally some religious group will oppose a certain classic work of literature because it taught some bad moral lesson, or had bad words in it, or something.  But you know what often became totally clear in such events?  That the vast vast majority of the offended people had not actually read the book, or if they had, they could not remember any of it.  They were participating because someone else on their side told them they should be against the book, probably also someone else who had never even read the thing.  But I don't think that was the point.  The objective was one of virtue-signalling, to reinforce ties in their own tribe and make it clear that they did not like some other tribe.  At some point the content of the book became irrelevant to how the book was perceived by both tribes -- which is why I call this "post-modern" in my title.

I am embarrassed to admit that I initially supported the war in Iraq (though at least I admit that rather than try to rewrite history as do many public figures).   I got swept up in the post 9/11 nationalism and wasn't very sophisticated in my thinking about such interventions.  But I also think part of the  reason for my support was because the opposition was often so irrational and, well, loony.   At least subconsciously, I must have been thinking, "I can't be on the same side with these idiots."

This was a useful experience, though, because in the years since I have frequently found myself allied with the Left on certain issues where I have been appalled by their opposition tactics.  Black Lives Matter is a great case in point.  I absolutely agree with the premise that police forces need more accountability and that the costs of the current lack of accountability fall disproportionately on African Americans.  I thought this initial BLM 10-point plan was really very good.  But ugh, their tactics.  Blocking highways and threatening drivers, where does that get us?   Or the whole tactic of forcing someone to choose between "Black Lives Matter" and "All Lives Matter" -- I mean seriously, WTF?  How is this kind of social justice rhetorical trap at all useful?  And now the movement has so much cred that it has been hijacked by the Left to support climate change legislation and all sorts of unrelated matters, so it likely will never make any actual progress on police accountability.  It would be easy to recoil from all this and shy away from my passion for increasing police accountability because my allies are so off-putting in their tactics, but my Iraq War experience has taught me that this would be a mistake.

And now, we have the opposition to Trump, and all the same loony Left tactics are emerging.  We get lectured by celebrities, and discover that the deepest threat of Trump may be the marginalization of actresses who make $20 million a picture.  We get roads blocked and public violence.    I wonder if all this is driving folks who originally found Trump distasteful into his arms?

I fear that all the oxygen is getting sucked out of the room with protests of crazy hypothetical scenarios while ignoring the real problems that are occurring already.  So everyone is focusing on women marching on Washington, despite the fact that Trump is almost certainly no worse in his personal behavior towards women than Bill Clinton and is likely, on women's issues, the furthest to the Left of all of the 16 original GOP presidential candidates.    We focus on some hypothetical future slight to women while ignoring his economic nationalism, economic interventionism, corporatism, and cronyism that is already on display with Carrier and the auto makers.

As I wrote here, the ability to criticize public figures has limited bandwidth.  Sure, an infinite number of things can be discussed on the Internet, but only a few reach a general consciousness across society.  One way to look at it is to compare it to an NFL game.  In an NFL game, coaches only have two challenge flags they can throw to challenge a bad call by the referees -- after their challenge flags are used, they are out of luck.  The Left is using up all our challenge flags on their own social justice bogeymen, and causing everyone to miss the opportunity to challenge Trump on more relevant faults (of which there are many).

The other problem with the Left's tactics is that they are not well-matched to Trump and likely will be counter-productive.  All this crazy protest is more likely to cause Trump to petulantly lash back.  This one of his worst qualities as a leader, but it is a fact all the same.  Take abortion, for example.  My gut feel is that Trump has never had any problem with abortion, and likely has supported it in the past.  Hell, he's probably secretly paid for a few.  If women's groups had gone and sat down with him quietly and said, "hey, we are worried about creeping restrictions on abortion in many states", Trump probably would have been sympathetic.  This is the Trump, after all, who mythologizes himself as a deal-maker.  But groups on the Left can't seem to do this, in part because of tribal virtue-signalling on the Left.  The Left has decided that their tactic will be to treat Trump as illegitimate, so any group that goes to talk to him is marginalized and excoriated by the rest of the Left.  So rather than sit down and work with a likely-sympathetic Trump, they head out into the streets to denounce him in the craziest possible terms, tactics that may well drive him into exactly the actions that women fear.  If abortion was a big issue for me, I would be pissed at women's groups for their bone-headed tactics.

One of my favorite correspondents, also the proprietor of the Finem Respice blog, sent me a note today about my article the other day about cheating on diesel emissions regulations.   The note covers a lot of ground but is well worth reading to understand the crony-regulatory state.  They begin by quoting me (yes, as I repeat so often, I understand that "they" is not grammatically correct here but we don't have a gender-neutral third person pronoun and so I use "they" and "their" as substitutes, until the SJW's start making me use ze or whatever.)

"My thinking was that the Cat, Cummins, and VW cheating incidents all demonstrated that automakers had hit a wall on diesel emissions compliance -- the regulations had gone beyond what automakers could comply with and still provide consumers with an acceptable level of performance."

Exactly. More importantly, the regulators KNEW it. I was researching energy shorts and had a ton of discussions with former regulatory types in the U.S. I was stunned to discover that there was widespread acknowledgement on the regulatory side that many regulations were impossible to comply with and so "compliance trump cards" were built into the system.

For instance, in Illinois you get favorable treatment as a potential government contractor if you "comply" with all sorts of insane progressive policy strictures. "Woman or minority owned business" or "small business owner", as an example. Even a small advantage in the contracting process for (for example) the State of Illinois puts you over the edge. Competitors without (for instance) the Woman or Minority Owned Business certification would have to underbid a certified applicant by 10-15% (it's all a complex points system) to just break even. It got so bad so quickly that the regs were revised to permit a de minimis ownership (1%). Of course, several regulatory lawyers quickly made a business out of offering minority or women equity "owners" who would take 1% for a fee (just absorb how backwards it is to be paying a fee to have a 1% equity partner) with very restrictive shareholder agreements. Then it became obvious that you'd get points for the "women" and "minority" categories BOTH if you had a black woman as a proxy 1% "owner." There was one woman who was a 1% owner of 320 firms.

Some of my favorites include environmental building requirements tied to government contract approval. The LEED certification is such a joke. There are a ton of "real" categories, like motion detecting lights, solar / thermal filtering windows, CO2 neutral engineering. But if you can't get enough of that, you can also squeeze in with points for "environmental education". For instance, a display in the lobby discussing the three solar panels on the roof, or with a pretty diagram of the building's heat pump system. You can end up getting a platinum LEED certification and still have the highest energy consumption density in the city of Chicago, as it turns out.

U.S. automakers have been just as bad. There's been a fuel computer "test mode" for emissions testing in every GM car since... whenever. Also, often the makers have gotten away with "fleet standards" where the MPG / emissions criteria are spread across the "fleet." Guess how powerful / "efficient" the cars that get sent to Hertz or Avis are.

Like so many other things in the crony capitalist / crudely protectionist United States, (e.g. banking prosecutions) foreign firms will get crucified for industry-wide practices.

Gee, I wonder if state-ownership of GM has been a factor in sudden acceleration / emissions prosecutions?

BTW, I wrote about the silliness of LEED certification here, among other places, after my local Bank of America branch got LEED certified, scoring many of their points by putting EV-only spaces (without a charger) in the fron of the building.  In a different post, I made this comparison:

I am not religious but am fascinated by the comparisons at times between religion and environmentalism.  Here is the LEED process applied to religion:

• 1 point:  Buy indulgence for $25
• 1 point:  Say 10 Our Fathers
• 1 point:  Light candle in church
• 3 points:  Behave well all the time, act charitably, never lie, etc.

It takes 3 points to get to heaven.  Which path do you chose?

Scott Alexander has a great article on the problems with Trump's approach to economics.  I want to begin, though, with an analogy he uses at the end because it is the best single framework I have seen about understanding Trump's appeal:

Suppose you’re a hypercompetent billionaire in a decaying city, and you want to do something about the crime problem. What’s your best option? Maybe you could to donate money to law-enforcement, or after-school programs for at-risk teens, or urban renewal. Or you could urge your company full of engineering geniuses to invent new police tactics and better security systems. Or you could use your influence as a beloved celebrity to petition the government to pass laws which improve efficiency of the justice system.

Bruce Wayne decided to dress up in a bat costume and personally punch criminals. And we love him for it.

I worry that Trump’s plan for his administration is to dress up in a President costume and personally punch people we don’t like, while leaving policy to rot. And I worry it’s going to work.

Basically, Trump is acting like a small state governor, focusing his economic efforts on getting the Apple factory to come to town

So based on these two strategies, we are in for four years of sham Trump victories which look really convincing on a first glance. Every couple of weeks, until it gets boring, another company is going to say Trump convinced them to keep jobs in the United States. The total number of jobs saved this way will never be more than a tiny fraction of the jobs that could be saved by (eg) good economic policy, but nobody knows anything about economic policy and Trump will make sure everybody hears about Ford keeping jobs in the US. Every one of these victories will actively make the world worse, in the sense that these big companies will get taxpayer subsidies or favors they can call in later to distort government priorities, but nobody’s going to notice these either.

It seems appropriate to end this with a bit of Bastiat:

In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.

There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.

Yet this difference is tremendous; for it almost always happens that when the immediate consequence is favorable, the later consequences are disastrous, and vice versa. Whence it follows that the bad economist pursues a small present good that will be followed by a great evil to come, while the good economist pursues a great good to come, at the risk of a small present evil.

Back in November of 2015 I wrote:

I would be stunned if the Volkswagen emissions cheating is limited to Volkswagen.  Volkswagen is not unique -- Cat and I think Cummins were busted a while back for the same thing.  US automakers don't have a lot of exposure to diesels (except for pickup trucks) but my guess is that something similar was ubiquitous.

My thinking was that the Cat, Cummins, and VW cheating incidents all demonstrated that automakers had hit a wall on diesel emissions compliance -- the regulations had gone beyond what automakers could comply with and still provide consumers with an acceptable level of performance.

So we have this:

U.S. environmental regulators accused Fiat Chrysler Automobiles NV of using software that allowed illegal emissions in diesel-powered vehicles, the latest broadside in an unprecedented government crackdown on auto makers for alleged pollution transgressions.

The Environmental Protection Agency, days before the end of the Obama administration, delivered a violation notice to Fiat Chrysler accusing the auto maker of using illegal software that allowed 104,000 recent diesel-powered Jeep Grand Cherokee sport utilities and Ram pickup trucks to spew toxic emissions beyond legal limits. The affected vehicles have model years ranging between 2014 and 2016.

Regulatory compliance can be a royal pain in the *ss, but I comply with everything I know about and can figure out in my own business.  There just is no percentage in cheating.  Where regulation has made my business untenable, such as in certain parts of California, I have closed the affected parts of the business.

So if I see no good reason to cheat in my own business when the rents for doing so would flow directly into my own pocket, how in the hell do middle managers on a salary with little or no share in the marginal profitability gains of the company convince themselves to take these risks?

You want to raise a government ethics violation?  Here is one for you with which I absolutely agree:

I am not sure that this is a suitable subject for a blog post, probably more a project for an aspiring PhD student, but with all the discussion of conflicts of interest in the Trump cabinet, it strikes me that the most glaring conflict in the public sector is ignored: The CoI between state and local politicians elected with the support of public sector unions who then participate in compensation negotiations for the members of those unions.  Here the temptation of the politicians to buy the support of the unions with public money is overwhelming.  The impact of this is potentially trillions when public pension liabilities are included.

This is such an obvious conflict that I have looked to see if there are laws preventing this, but my initial research shows nothing.