Coyote Blog

This post earlier on the customer service downsides of the new salaried overtime rules got me thinking more broadly about the impact of minimum wage type laws.  Progressives justify such laws by saying that there is a power imbalance between management and employees, and that the government needs to have minimum wage laws to make up for the fact that employees lack power.

But from my experience in the service world, it is wrong to look at the situation as a power struggle between managers and employees.  It is much more correct to look at this as a power struggle between employees and customers.  Let me explain.

Service and retail firms tend to live on razor-thin margins.  Retailers typically live on single-digit profit margins, and those of companies like Wal-Mart are as low as 2% of revenues.  Our company in the service business has a similar experience, averaging profit margins of 3-5% of revenues over the last 10 years.

This is not an accident.  Most service and retail businesses depend on simple service-delivery models using relatively low-skilled workers.  There are many low-skilled workers in the world.  If a company were to start making huge profits with a service model using such workers, it would be easy for others to copy it and hire the same types of workers and undercut them on price.  Margins tend to get competed down to the bare minimum.

No matter how much progressives would like it to be so, when California raises its minimum wage, it probably is not going to come out of company margins, at least in the near term.  Over the 10 years from about 2013 to 2022, California will have raised its minimum wage over 87% from $8 an hour to $15.  Wages and costs like workers comp premiums that are tied to wages are about half my costs.  This means an 87% labor cost increase will increase my total costs 44%.  How is that going to come out of a 4% margin?  It is not.

There are really only two things we can do, individually or in combination.  First, we can raise prices 44%, just to try to stay even.  Of course, some customers will balk and stop buying, and then we will lose business and perhaps have to close (we have already closed over half our businesses in California for just this reason).  Or second, we could cut staff in half to keep wages under control.  Of course, this means customers get served much more poorly, which also may drive customers away.  Other companies like fast food restaurants have a third option of automation, replacing people with machines -- I wish we could do this but right now we have run out of ideas for automating bathroom cleaning and landscape work.

Hopefully, you can see what is going on here.  The real tension here is between employees and customers.  When the state mandates a minimum wage in low margin service businesses (such laws are largely irrelevant to high-margin technology companies and such), compliance is paid for by the customer, either in the form of higher prices or worse service or both.

I and others have written a number of times about the many downsides to new Federal rules that will force most junior salaried managers to start punching a timeclock.

I run a service business and these rules affect us substantially.  Like many retail operations, we have hourly employees who work for a local manager who is salaried and generally earns less than the new $47,476 annual cutoff.   We are not entirely sure how we are going to comply, but in the near-term compliance will likely involve a combination of hard hour limits for managers, some devolution of manager tasks to minimum wage workers, and price increases to customers.  In the long-term, we may have to consolidate manager positions.

But there is one additional change that is almost certainly going to occur -- a reduction in customer service.  To understand why that is, you need to understand the retail and services world.

In the service world, sh*t happens.  The ice machine suddenly breaks.  An important worker just does not show up.  A customer complains that no one is cleaning the bathroom.  Because of razor thin margins, service work loads are carefully scheduled.  There simply is not a lot of slack.  So when something unusual happens, it is usually the local manager who takes up the slack.  They fix the problem, somehow, even if it means they have to clean the bathroom themselves.  Not one of my managers has bathroom cleaning as part of their duties, but every single one of them likely cleans bathrooms every month, because they are covering the performance gaps left by other employees.

When managers are subject to overtime, this changes.  We only get 40 hours a week of that person's time (at least at a reasonable rate) and so every hour must count.  Every hour must suddenly be carefully husbanded and spent only on value-added tasks, like balancing the register and merchandising the shelves.  We can't waste them on the manager covering for employee shortcomings.

So who will clean the bathroom when the employee assigned to do so fails?  Who will cover the second register when an employee just does not show up for work?  Who will expedite the ice machine replacement so customers don't have to go long without ice?  I don't know.  Maybe nobody.  Or at least nobody as long as prices charged to customers aren't raised substantially.

Postscript:  If you are not in retail or a service business, you may read this and say, "well, if you hired better workers, they would be more reliable and you wouldn't have to cover for them."  I have two responses.  First, only someone who never worked retail could say that.  People are individuals and have their own needs and lives, and those sometimes conflict with getting the job done, no matter how well we screen.

Second, let me tell a story from this last weekend when I was at the graduation ceremony for Amherst College.  Amherst could reasonably be considered among the 10 most selective schools in the nation.   It is consistently ranked as the #1 or #2 small liberal arts college in the nation.  This weekend they selected an outstanding student from this outstanding bunch to make a presentation at graduation.  In it, she told a story of never, ever being able to get to a certain class, that is held at 12:30 in the afternoon, on time.  She said she was late every single time.   This is supposedly one of the elite young people in the country who would never even consider accepting a "menial" service job with my company, but never-the-less can't get to a class on time.

This is Chapter 8 of an ongoing series.  Other parts of the series are here:

1. Introduction
2. Greenhouse Gas Theory
3. Feedbacks
4.  A)  Actual Temperature Data;  B) Problems with the Surface Temperature Record
5. Attribution of Past Warming:  A) Arguments for it being Man-Made; B) Natural Attribution
6. Climate Models vs. Actual Temperatures
7. Are We Already Seeing Climate Change
8. The Lukewarmer Middle Ground (this article)
9. A Low-Cost Insurance Policy

In this chapter we are going to try to sum up where we are and return to our very first chapter, when I said that we would find something odd once we returned to the supposed global warming "consensus".

First, let's return to our framework one last time and try to summarize what has been said:

I believe that this is a pretty fair representation of the median luke-warmer position.  Summarized, it would be:

• Manmade CO2 warms the Earth, though by much less than most climate models claim because these models are assuming unrealistic levels of positive feedback that over-state future warming.  One degree C of warming, rather than four or five, is a more realistic projection of man-made warming over the next century
• The world has certainly warmed over the last century, though by perhaps a bit less than the 0.8C in the surface temperature record due to uncorrected flaws in that record
• Perhaps half of this past warming is due to man, the rest due to natural variability
• There is little evidence that weather patterns are "already changing" in any measurable way from man-made warming

The statements I just wrote above, no matter how reasonable, are enough to get me and many others vilified as "deniers".  You might think that I am exaggerating -- that the denier tag is saved for folks who absolutely deny any warming effect of CO2.  But that is not the case, I can assure you from long personal experience.

The Climate Bait and Switch

Of course, the very act of attempting to shut people up who disagree with one's position on a scientific issue is, I would have thought, obviously anti-science.   The history of science is strewn with examples of the majority being totally wrong.   Even into the 1960's, for example, the 97% consensus in geology was that the continents don't move and that the few scientists who advocated for plate tectonics theory were crackpots.

But that is not how things work today.  Climate action advocates routinely look for ways to silence climate skeptics, up to and including seeking to prosecute these climate heretics and try to throw them in jail.

The reason that alarmists say they feel confident in vilifying and attempting to silence folks like myself is because they claim that the science is settled, that 97% of climate scientists believe in the consensus, and so everyone who is not on board with the consensus needs to shut up.  But what exactly is this consensus?

The 97% number first appeared in a "study" by several academics who sent out a survey to scientists with some climate change questions.  They recieved over 3146 responses, but they decided that only 77 of these respondents "counted" as climate scientists, and of these 75 of the 77 (97%) answered two questions about climate change in the affirmative.

We will get to the two questions in a second, but note already the odd study methodology.  If the other 10,000 plus people sent the survey were not the targets of the survey, why were they sent a survey in the first place?  It makes one suspicious that the study methodology was changed mid-stream to get the answer they wanted.

Anyway, what is even more fascinating is the two questions asked in the survey.  Here they are:

1. When compared with pre-1800s levels, do you think that mean global temperatures have generally risen, fallen, or remained relatively constant?
2. Do you think human activity is a significant contributing factor in changing mean global temperatures?

The 97% in this survey answered the questions "risen" and "yes".

Do you see the irony here?  If you have been following along with this series, you should be able to say how I would have answered the two questions.  I would certainly have said "risen" to 1.  The answer to question 2 is a bit hard because "significant" is not defined, but in a complex system with literally thousands of variables, I would have said one of those variables was a significant contributor at anything over about 10%.  Since I estimated man's effect on past warming around 40-50%, I would have answered "yes" to #2!  In fact, most every prominent science-based skeptic I can think of would likely have answered the same.

So you heard it right -- I and many prominent skeptics are part of the 97% consensus.  Effectively, I am being told to shut up and not continue to say what I think, in the name of a 97% consensus that represents exactly what I am saying.  This is so weird as to be almost Kafka-esque.

This is what I call the climate bait and switch.  Shaky assumptions about things like high positive feedback assumptions are defended with the near-certainty that surrounds unrelated proposition such as the operation of the greenhouse gas effect.

In fact, merely arguing about whether man-made warming exists or is "significant" falls well short of what we really need in the public policy arena.  What we really should be discussing is a proposition like this:

Is manmade CO2 causing catastrophic increases in warming and warming-driven weather effects whose costs exceed those of reducing CO2 production enough to avoid these effects?

It is about at this point when I usually have people bring up the precautionary principle.  So that I am not unfair to proponents of that principle, I will use the Wikipedia definition:

if an action or policy has a suspected risk of causing harm to the public, or to the environment, in the absence of scientific consensus (that the action or policy is not harmful), the burden of proof that it is not harmful falls on those taking an action that may or may not be a risk.

The principle is used by policy makers to justify discretionary decisions in situations where there is the possibility of harm from making a certain decision (e.g. taking a particular course of action) when extensive scientific knowledge on the matter is lacking. The principle implies that there is a social responsibility to protect the public from exposure to harm, when scientific investigation has found a plausible risk. These protections can be relaxed only if further scientific findings emerge that provide sound evidence that no harm will result.

I believe that, as stated, this is utter madness.  I will give you an example.   Consider a vaccine that saves thousands of lives a year.  Let's say, as is typical of almost every vaccine, that it also hurts a few people, such that it may kill 1 person for every thousand it saves.  By the precautionary principle as stated, we would never have approved any vaccine, because the precautionary principle does not put any weight on avoided costs of the action.

So take fossil fuel burning.   Proponents of taking drastic action to curb fossil fuel use in the name of global warming prevention will argue that until there is an absolute consensus that burning fossil fuels is not harmful to the climate, such burning should be banned.  But it ignores the substantial, staggering, unbelievably-positive effects we have gained from fossil fuels and the technology and economy they support.

Just remember back to that corn yield chart.

Bill McKibbon wants us to stop using fossil fuels because they may cause warmer temperatures that might reduce corn yields.  But there is a near absolute certainty that dismantling the fossil fuel economy will take us back to the horrendous yields in the yellow years on this chart.  Proponents of climate action point to the possibility of warming-based problems, but miss the near certainty of problems from elimination of fossil fuels.

Over the last 30 years, something unprecedented in the history of human civilization has occurred -- an astounding number of people have exited absolute poverty.

Folks like McKibbon act like there is no downside to drastically cutting back on fossil fuel use and switching to substantially more expensive and less convenient fuels, as if protecting Exxon's profits are the only reason anyone would possibly oppose such a measure.  But the billion or so people who have exited poverty of late have done so by burning every bit of fossil fuels than can obtain, and never would have been able to do so in such numbers had such an inexpensive fuel option not been available.  We in the West could likely afford having to pay $50 a month more for fuel, but what of the poor of the world?

Perhaps this will give one an idea of how central inexpensive fossil fuels are to well-being.  This is a chart from World Bank data plotting each country based on their per capital CO2 production and their lifespan.

As you can see, there is a real, meaningful relationship between CO2 production and life expectancy.  In fact, each 10x increase in CO2 production is correlated with 10 years of additional life expectancy.  Of course, this relationship is not direct -- CO2 itself does not have health benefits (if one is not a plant).  But burning more CO2 is a byproduct of a growing technological economy, which leads to greater wealth and life expectancy.

The problem, then, is not that we shouldn't consider the future potential costs and risks of climate change, but that we shouldn't consider them in a vaccuum without also considering the costs of placing severe artificial limits on inexpensive fossil fuels.

People often say to me that climate action is an insurance policy -- and they ask me, "you buy insurance, don't you?"   My answer invariably is, "yes, I buy insurance, but not when the cost of the policy is greater than the risk being insured against."

As it turns out, there is an approach we can take in this country to creating a low-cost insurance policy against the risks that temperature sensitivity to CO2 is higher than I have estimated in this series.  I will outline that plan in my final chapter.

Here is Chapter 9:  A Low-Cost Insurance Policy

Update:  Food lines in socialist Venezuela

Progressives are going to try to memory-hole their support for Chavez and Venezuela, but don't you forget that most prominent progressives were enthusiastic supporters of the imposition of socialism by Chavez in Venezuela.  It is only now, when its predictable failures are becoming too obvious even for the American media to ignore, that progressives have gone silent on Venezuela.  Give them a few years and they will likely develop a meme that this was some sort of failure of free markets.

Sears is opening an all-appliance store:

Sears, which has been struggling financially due to falling sales, is opening a store that will be dedicated solely to the sale of appliances.

The retailer says that the 10,000 square foot store opening in Ft. Collins, Colorado on May 19th will be its first solely featuring appliances, the product category that has been one of its core businesses.  .

“Appliances is one of our best categories,’’ said Leena Munjal. senior vice president, customer experience and integrated retail, for Sears Holdings.  “We’re trying to figure out how you take the physical store and complement it with the online capability to make it a really powerful experience for our customers.’’

I essentially predicted this here several years ago:

 I see the same thing now at Best Buy, with workout equipment and other oddball products.  I told my son on a visit a year ago to Best Buy to expect to see the a larger appliance selection next time we visit.  He asked why, and I said "because Wal-Mart does not generally sell them, and not a lot of people buy their large appliances at Amazon."  Sure enough, you see more appliances nowadays.

And here:

But it probably was no accident that the article was illustrated with this picture:

What don't you see there?  CD's, DVD's, speakers, DVD players, computer games and most of the other stuff that used to make up a lot of Best Buy's floor space.  Because they have already been demolished by online retailers in those categories.   The picture above is of appliances, one of the few high dollar categories that has not migrated to the web.   Go to Best Buy and you will see appliances, health equipment, and TV's, all categories where bricks and mortar stores have some advantages over online.

This makes perfect sense, but don't tell me Best Buy is ready to take on the online retailers.  They are bobbing and weaving, ducking this competition wherever they can.

I wrote specifically about the Sears appliance business here

Walter Olson paraphrasing Paul Horwitz

...mainstream law professors would develop a sudden, strange new respect for constitutional law concepts such as separation of powers and federalism, which tend to serve as checks on the power and ambition of the President and his backers.

Kevin Drum observes that the top 25 hedge fund managers earned $13 billion in total, including one hapless dude who made $250 million despite losing money and shutting down the fund.

I will say that I have always scratched my head over asset manager compensation.  The tradition is that they get paid as a percentage of assets managed, sometimes with a percentage of the profits as well but never taking a percentage of the losses.   Perhaps this made some sense with smaller pools of money, but today with huge pools of money, the same old percentages yield ludicrous compensation results.  I certainly understand why the managers would defend this compensation scheme, but why do customers accept it?

This reminds me of real estate broker compensation.  The tradition when I grew up is that the seller paid 6%, about half of which went to the seller's broker and half to the buyer's broker.  For years that 6% was etched in stone and no one broke ranks -- the agents were pretty good at maintaining the cartel, and the government helped by putting the force of law behind broker licensing that helped keep the agent supply down.  But as home prices kept increasing, people started noticing that while 6% of $100,000 may have made some sense as reasonable compensation, 6% of $2 million was absurd, especially since a $2 million home was not even close to 20x harder to sell.   So people, initially savvy high net worth folks, and later everyone, began negotiating the 6%.  I have negotiated this number on every home I have sold since the mid-1990s.

I am not really knowledgeable about the asset management business -- in some sense I have negotiated my commission by choosing to put all my money in low-fee Vanguard funds.  How does the asset management business hold the line on fees, particularly when they are in a business where it is so easy to measure their relative performance, and presumably pay them based on this performance?

Which got me to thinking about the customers of hedge funds.  Aren't many of these customers progressive or controlled by progressives?  Hedge funds have been very successful marketing to university endowments, non-profit foundations, and public pension funds -- aren't these institutions often controlled by progressives, or at least left-liberals?  Aren't a disproportionate share of the very high net worth Hollywood and billionaire types who invest in hedge funds also progressive or liberal?  Heck, Hillary Clinton's son-in-law ran a hedge fund until recently.  So why don't these folks get together and instead of worrying about whether their portfolios are invested in Israel or Exxon or some other progressive bette noir, why don't they agree to a set of principles as to how they are going to pay for their asset management services in the future, and stick to these?  I say that progressives should get together, because they are politically passionate about this, but I can't think of any good reason why good libertarians or conservatives wouldn't happily join in to reduce their fees.

I understand that to the extent that there are black swan hedge funds that beat the market year in and year out, these folks will be hard to challenge as they can probably write their own terms.  But for the other 99% of hedge funds, why not use the power progressives already have as customers before we start talking about various government hammers.

PS-  I will put my two cents in.  I think the new Mother Jones site design is awful.

Thanks to Don Boudreax for the quote, this is from Douglas Rushkoff’s new (apparently execrable) book, Throwing Rocks at the Google Bus.

The same goes for agriculture, textiles, and many other sectors where returning to local, human-scaled enterprise will lead to less worker exploitation and environmental damage while producing better, healthier products.  Nonindustrial practices may be more labor-intensive, but they’re also better for us all.  For those of us used to white-collar jobs, the idea of growing vegetables or making clothes may seem like a big step backward toward more menial labor.  But consider for a moment the sorts of activities the wealthiest Americans or most satisfied retirees engage in enthusiastically: brewing craft beers, knitting, and gardening.  If there’s really not enough work to go around and there are so many extra people to employ, we can always farm in shifts.

My response to anyone who told me this:  You first.  Ugh, this would be a one-way ticket to poverty and starvation.  Ghandi had this same idea for India, and if he had had his way the poverty would have been even more mind-blowing than what actually obtained.

Does Ben Rhodes victory lap bragging about how he pulled the wool over the eyes of a stupid and gullible America on Iran remind anyone else of Jonathon Gruber?  Remember these famous words from Gruber?

"You can't do it political, you just literally cannot do it. Transparent financing and also transparent spending. I mean, this bill was written in a tortured way to make sure CBO did not score the mandate as taxes. If CBO scored the mandate as taxes the bill dies. Okay? So it’s written to do that," Gruber said. "In terms of risk rated subsidies, if you had a law which said that healthy people are going to pay in, you made explicit healthy people pay in and sick people get money, it would not have passed. Lack of transparency is a huge political advantage. And basically, call it the stupidity of the American voter or whatever, but basically that was really really critical to get for the thing to pass. Look, I wish Mark was right that we could make it all transparent, but I’d rather have this law than not."

Even the justification is the same -- its OK to break the law and lie about it in order to break up gridlock.  (By the way, my mother-in-law -- who tends to be a reliable gauge of mainstream Democratic thinking -- argued the same thing with me, that extra-Constitutional Presidential actions were justified if Congress did not accomplish enough.   Asked about whether she was comfortable with the same power in a Trump administration, she was less sanguine about the idea).

While political lying is old as time, it strikes me that this bragging about it is a new phenomena.  It reminds me of the end of the movie "Wag the Dog", when the Dustin Hoffman character refused to accept that no one would ever know how he manipulated the public into believing there had been a war, and wanted to publicly take the credit.  In the movie, the Administration had Hoffman's character knocked off, because it was counter-productive to reveal the secret, but I wonder if in reality Obama is secretly pleased.

The decline in new business formation in this country shouldn't be a surprise -- in industry after industry, numerous bits of government permission are needed to proceed with a new idea into a new market.  If, like Uber, you plow ahead ignoring these roadblocks, you will likely spend the rest of your life in court (as does Uber).

I thought about all this when reading this article on awesome portable automated systems that can maintain a person's insulin level.  What an amazing advance in safety and life quality for people!  The part that struck me was this line from a woman when she first saw one:

Sarah Howard became interested after she met Ms. Lewis last year. “My first question was: Was it legal?” said the 49-year-old, who has Type 1 diabetes, as does one of her two sons. “I didn’t want to do anything illegal.”

It is pathetic that this is the first reaction of Americans when they see an awesome new innovation.  And it turns out that she is right to worry.  Because if one avails oneself of the normal division of labor, in other words if one lets someone more expert to build the device or program it, then it is illegal.  Only if one downloads all the specs from the Internet and builds and programs it oneself is this fabulous device legal.

The only restriction of the project is users have to put the system together on their own. Ms. Lewis and other users offer advice, but it is each one’s responsibility to know how to troubleshoot. A Bay Area cardiologist is teaching himself software programming to build one for his 1-year-old daughter who was diagnosed in March.

This is roughly the equivalent of having to go fell a tree and mine graphite in order to makes one's own pencils.  It is simply stupid.   All because the government will not let us make our own decisions about the risks we want to take with medical products.  So if you don't have the skills or the time to put one together, you can wait 5 or 10 years for the FDA to get around to approving a professionally-made version.

Hat tip to Tyler Cowen, who by the title of his post obviously also saw the I, Pencil analogy.

Update:  I give it 12 months before someone at the FDA demands that these home-made devices be regulated, and at least registered with the government.  I wonder if in 10 years the government will be demanding registration of 3D printers?  After all, they potentially incredibly empowering to individuals and can let folks work around various product bans like this.   Exactly the kind of empowerment that government hates.

I am not sure that many politicians are good on this score, but Hillary Clinton and Donald Trump are likely as bad as it gets on crony capitalism.  Forget their policy positions, which are steeped in government interventionism in the economy, but just look at their personal careers.  Each have a long history of taking advantage of political power to enrich themselves and their business associates.  I am not sure what Cruz meant when he said "New York values", but both Trump and Clinton are steeped in the New York political economy, where one builds a fortune through political connections rather than entrepreneurial vigor.   Want to build a new parking lot next to your casino or start up a new energy firm -- you don't bother with private investors or arms length transactions, you go to the government.

With that in mind, I particularly liked Don Buudreaux's quote of the day:

First, we labor under a ubiquitous threat of being shackled by crony capitalists.  [Adam] Smith wondered how internally stable a free market could be in the face of a tendency for its political infrastructure to decay into crony capitalism.  (The phrase “crony capitalism” is not Smith’s.  I use it to refer to various of Smith’s targets: mercantilists who lobby for tariffs and other trade barriers, monopolists who pay kings for a license to be free from competition altogether, and so on.)  Partnerships between big business and big government lead to big subsidies, monopolistic licensing practices, and tariffs.  These ways of compromising freedom have been and always will be touted as protecting the middle class, but their true purpose is (and almost always will be) to transfer wealth and power from ordinary citizens to well-connected elites

Republicans were rightly horrified that various government agencies, including a number of state attorneys general, were harassing private entities like Exxon-Mobil and CEI over their speech about climate change.  They pointed out that even if formal charges were never brought, the intrusive and public investigatory process by powerful government actors had an inherently chilling effect on free speech.

Kudos to Republicans!  They are defending the free speech of private actors from government harassment.

Oh, wait, no they are not.

The chairman of the Senate Commerce Committee demanded on Tuesday that Facebook explain how it handles news articles in its “trending” list, responding to a report that staff members hadintentionally suppressed articles from conservative sources.

In a letter, the chairman, Senator John Thune, Republican of South Dakota, asked Facebook to describe the steps it was taking to investigate the claims and to provide any records about articles that its news curators had excluded or added. Mr. Thune also asked directly whether the curators had “in fact manipulated the content,” something Facebook denied in a statement on Monday.

“If there’s any level of subjectivity associated with it, or if, as reports have suggested that there might have been, an attempt to suppress conservative stories or keep them from trending and get other stories out there, I think it’s important for people to know that,” Mr. Thune told reporters on Tuesday. “That’s just a matter of transparency and honesty, and there shouldn’t be any attempt to mislead the American public.”

Ugh.  What does Thune want, a revival of odious equal time rules, but now applied to the Internet?  This is just stupid.

This is something I have long suspected.  A short unexpected braking from one care propagates into a small traffic jam.   Reminds me of waves propagating in a flowing fluid.  Does traffic have a Reynolds number?

via Twisted Sifter

Do you still feel that way?

Long-timer readers will know that one of my hobbies is building my own speakers.  I built three big ones to go behind my home theater projection screen, and various pairs for music around the house.  The first time I built speakers, I worked exactly from plans.  The second time I customized a design.   The third time I designed from scratch, but they were small simple bookshelf speakers.

This new project is something else.   I started almost completely from scratch, beginning only from this academic article on curved line arrays.  From space and wife-acceptance-factor reasons, I couldn't build a floor to ceiling traditional line array, so I thought I would try this approach.  The height of the speakers was capped by some geography issues in the room they are going in.

So here is what the boxes look like so far.  The rectangular openings are for PT2C-8 planar tweeters, and the round ones are for the ND90-8 mid/bass.  Despite the small size of the bass drivers, the ones chosen actually go pretty deep and the speaker box models (there are lots of free programs out there) with pretty good bass, though I will have it crossed over to a subwoofer as well.  The speaker actually curves upwards more than it looks like in the photo -- the angle of the photo distorts it some.  The curve is actually between 25 and 30 degrees.

It turns out that things I thought would be really hard were actually easy.  For example, getting the nice curve on the face was easy once I changed my plan to layering several 1/4 inch sheets rather than trying to bend a 1/2 inch or 3/4 inch sheet of mdf.  The rectangular holes are not that straight but the drivers have wide flanges that will cover that up.  The round holes were made WAY easier with this type of hole saw (which rather than teeth has three or four little carbide router bits that do the cutting).

What was hard was the paint.  It was all done with rattle cans, I don't have any professional spray equipment.   I have no idea when I decided to try to get a piano black gloss finish on this, but I will tell you now that life is too short to try to get this finish on mdf.  If you look really closely you can see a few spots where I should have sanded yet again and re-coated, but I finally called it done.  The worse problem was that I accidentally started with a Rustoleum lacquer.  It covers beautifully but dries really, really slowly.  Any other paint type will make a mess if sprayed over lacquer, so I was stuck with it unless I wanted to strip it off and start over (which in retrospect would have been a good decision).   Painting this has been going on for months, with frequent long breaks to let things fully dry.  I am still not sure the finish is really as hard as it should be and am paranoid about bumping it into anything.  It looks good, though, almost startling when people see it for the first time.

Anyway, the next step is installing the drivers.  Part of the academic paper discussed tapering the volume on the various drivers.  This requires some simple resistor networks (L-pads) to attenuate each driver by a certain amount.  Here are the drivers once all the resistors are soldered (on the back, so largely invisible here), shown while I am testing the network.  The laptop is setting the parameters in the digital crossover, which uses a kit I built from miniDSP.  The MiniDSP board also has parametric equalizers so when the speakers are finished, I can fine-tune the frequency response.

You can actually see the first driver installed on the lower right.

Here is where we get to the world-class screw-up on my part.  The #1 thing I learned in speaker design is to brace the hell out of them.  You don't want anything flexing.  Unfortunately, I was stupid enough to put the braces in early.  This is fine for the rectangular ribbon tweeters, they install from the front.  But the round mid-basses install from the back, and  this is what that looks like -- the unpainted panels with the holes in it are the braces, and then you can see the actual driver hole in the front of the speaker behind it:

I had this thing up on my bathroom counter so I could see the driver positioning in the mirror.  I then had to reach hands through these braces while using a screwdriver with a 12 inch extension.  A total contortion act, but I got the hardest one done so I am confident I can do the rest.

Over the last several weeks, you have seen a series of posts on climate, and completing them has dominated much of my blogging time.  There are two or three chapters left to post.

This does not mean that I am shifting my attention on this blog to doing mostly climate.  In fact, if anything, it means perhaps the opposite.   I find the climate debate increasingly boring.  I don't think the arguments going on today are really much different than those that were going on five years ago.  So I have decided to try to get my current thinking on the topic online in an organized way, and then I likely will move on from the topic for a while.   I will still give presentations on it, and certainly will blog on the current efforts by AG's to use the force of government to suppress one side of the debate, but I have other things I would like to dig into more.

A two-fer!  This is from Yglesias's very good article on passenger rail also quoted in the previous post.  In discussing why Amtrak is generally uninterested in making incremental improvements on the Northeast Corridor, he writes:

The way Amtrak is currently set up, there's no real incentive to undertake incremental improvements. The Northeast Corridor already generates an operating profit, which simply defrays losses elsewhere in the system. Making it run better doesn't generate any wins for the people who would have to do the work, and would plausibly just lead Congress to reduce subsidies. If the NEC were spun off as an independent entity — perhaps even a private company — then it could internalize the gains from improved service and seek private financing to make cost-effective investments.

Long-time readers will know that my company privatizes the operation (but not the ownership) of public parks.  I will make two-hour presentations to parks agencies about how we can improve operations quality while cutting costs by 30-50% or more, and the near-universal response is, "well, if you reduce costs, then the legislature will just reduce our appropriations."  More efficient park operations, and at the margin better visitor service, don't create any wins for agency employees given their incentives.  In fact, if the parks are improved and more people show up, their job is just harder.  I had the manager of Arizona's premier state park tell me, absolutely in all seriousness, that he had the best job in the world if it wasn't for all the visitors.  Can you imagine a McDonald's franchise manager saying that?   As I have always said, government is not populated with bad people, it is populated with perfectly normal people who have terrible incentives.

When agencies choose how to spend incremental funds, they will almost always try to route these to the agency staff, in the form of more headcount and/or more pay.  When money is actually spent to make investments in the parks themselves, projects are chosen not by return on investment or customer priorities, but based on which ones will create the most prestige for the agency and its leaders.  This latter is one reason the Washington Metro is the mess it is, as the agency and the politicians who make appropriations will always prioritize system expansions over capital maintenance and sensible incremental improvements.

Yglesias has a very good article on why passenger rail is not a bigger deal in the US.   In it, he says this (emphasis added):

Instead the issue is that the dismal failure of US passenger rail is in large part the flip side of the success of US freight rail. America's railroads ship a dramatically larger share of total goods than their European peers. And this is no coincidence. Outside of the Northeast Corridor, the railroad infrastructure is generally owned by freight companies — Amtrak is just piggybacking on the spare capacity.

It is a short article, so it does not go into more depth than this, but I have actually gone further than this and argued that the US freight-dominated rail system is actually far greener and more sensible than the European passenger system.  As I wrote years ago at Forbes:

The US rail system, unlike nearly every other system in the world, was built (mostly) by private individuals with private capital.  It is operated privately, and runs without taxpayer subsidies.    And, it is by far the greatest rail system in the world.  It has by far the cheapest rates in the world (1/2 of China’s, 1/8 of Germany’s).  But here is the real key:  it is almost all freight.

As a percentage, far more freight moves in the US by rail (vs. truck) than almost any other country in the world.  Europe and Japan are not even close.  Specifically, about 40% of US freight moves by rail, vs. just 10% or so in Europe and less than 5% in Japan.   As a result, far more of European and Japanese freight jams up the highways in trucks than in the United States.  For example, the percentage of freight that hits the roads in Japan is nearly double that of the US.

You see, passenger rail is sexy and pretty and visible.  You can build grand stations and entertain visiting dignitaries on your high-speed trains.  This is why statist governments have invested so much in passenger rail — not to be more efficient, but to awe their citizens and foreign observers.

But there is little efficiency improvement in moving passengers by rail vs. other modes.   Most of the energy consumed goes into hauling not the passengers themselves, but the weight of increasingly plush rail cars.  Trains have to be really, really full all the time to make for a net energy savings for high-speed rail vs. cars or even planes, and they seldom are full.  I had a lovely trip on the high speed rail last summer between London and Paris and back through the Chunnel — especially nice because my son and I had the rail car entirely to ourselves both ways.

The real rail efficiency comes from moving freight.  As compared to passenger rail, more of the total energy budget is used moving the actual freight rather than the cars themselves.  Freight is far more efficient to move by rail than by road, but only the US moves a substantial amount of its freight by rail.    One reason for this is that freight and high-speed passenger traffic have a variety of problems sharing the same rails, so systems that are optimized for one tend to struggle serving the other.

Freight is boring and un-sexy.  Its not a government function in the US.  So intellectuals tend to ignore it, even though it is the far more important, from and energy and environmental standpoint, portion of transport to put on the rails. ....

I would argue that the US has the world’s largest commitment to rail where it really matters.  But that is what private actors do, make investments that actually make sense rather than just gain one prestige (anyone know the most recent company Warren Buffet has bought?)  The greens should be demanding that the world emulate us, rather than the other way around.  But the lure of shiny bullet trains and grand passenger concourses will always cause some intellectuals to swoon.

Which would you rather pounding down the highway, more people on vacation or more big trucks moving freight?  Without having made an explicit top-down choice at all, the US has taken the better approach.

This is Chapter 6 of an ongoing series.  Other parts of the series are here:

1. Introduction
2. Greenhouse Gas Theory
3. Feedbacks
4.  A)  Actual Temperature Data;  B) Problems with the Surface Temperature Record
5. Attribution of Past Warming:  A) Arguments for it being Man-Made; B) Natural Attribution
6. Climate Models vs. Actual Temperatures (this article)
7. Are We Already Seeing Climate Change
8. The Lukewarmer Middle Ground
9. A Low-Cost Insurance Policy

In some sense, this is perhaps the most important chapter, the climax of all the discussion to this point.  It is where we return to climate forecasts and attempt to conclude whether forecasts of catastrophic levels of man-made warming are reasonable.  So let's take a step back and see where we are.

Here is the framework we have been working with -- we have walked through in earlier chapters both the "theory" and "observation" sections, ending most recently in chapter 5 with a discussion of how much past warming can be attributed to man.

It is important to remember why we embarked on the observation section.  We ended the theory section with a range of future temperature forecasts, from the modest to the catastrophic, based on differing sensitivities of temperature to CO2 which were in turn largely based on varying assumptions about positive feedback effects in the climate.

We concluded at the time that there was not much more we could go with pure theory in differentiating between these forecasts, that we had to consult actual observations to validate or invalidate these forecasts.

We've already done one such analysis when we made two comparisons back in Chapter 4.  We showed that temperatures had risen over the last 30 years by only a third to a half the rate projected by James Hanson to Congress...

And that even the IPCC admitted in its last report that temperatures were running below or at best at the very low end of past forecast bands

But in the grand scheme of things, even 30 years is a pretty short time frame to discuss climate changes.  Remember that in my own attribution attempt in Chapter 5, I posited an important 66 year decadal cycle, and past temperature reconstructions imply other cycles that are centuries and millennia long.

But there is a way we can seek confirmation of climate forecasts using over 100 years of past temperature data.  Let's take our forecast chart we showed above and give ourselves a bit more space on the graph by expanding the timescale:

Here is the key insight that is going to help us evaluate the forecasts:  each forecast represents an actual, physical relationship between changes in CO2 concentrations and changes in temperature.  If such a relationship is to hold in the future, it also has to be valid in the past.  So we can take each of these different forecasts for the relation between temperature and CO2 and run them backwards to pre-industrial times in the 19th century, when atmospheric CO2 concentrations were thought to be around 270 ppm.

The temperature value of each line at 270ppm point represents the amount of warming we should already have seen from man-made CO2

What we see is that most of the mainstream IPCC and alarmist forecasts greatly over-predict past warming.  For example, this simple analysis shows that for the IPCC mean forecast to be correct, we should have seen 1.6C of manmade warming over the last century and a half.  But we know that we have not seen more than about 0.8C total in warming.  Even if all of that is attributed to man (which we showed in the last chapter is unlikely), warming has still been well-short of what this forecast would predict.  If we define a range for historic man-made warming from 0.33C (the number I came up with in the last chapter) to 0.8C (basically all of past warming due to man), we get numbers that are consistent with the non-catastrophic, zero-feedback cases

Of course we are leaving out the time dimension -- many of the hypothesized feedbacks take time to operate, so the initial transient response of the world's temperatures is not the same as the longer-term equilibrium response.  But transient response likely is at least 2/3 of the full equilibrium value, meaning that my hypothesized value for man-made past warming of 0.33C would still be less than the no feedback case on an equilibrium basis.

It is from this analysis that I first convinced myself that man-made warming was unlikely to be catastrophic.

I want to add two notes here.

First, we mentioned back in the attribution section that some scientists argue that man has caused not all of but more than the total observed historical warming.  This chapter's analysis explains why.  The fact that climate models tend to overpredict history is not a secret among climate modelers (though it is something they seldom discuss publicly).  To justify their high feedback and sensitivity assumptions in their forecasts, they need more warming in the past.   One way to do this is to argue that the world would have cooled without man-made CO2, so that man-made CO2 contributed 0.8C of warming in addition to whatever the cooling would have been.  It allows attribution of more than 100% of past warming to man.

There are various ways this is attempted, but the most popular centers around man-made sulfate aerosols.  These aerosols are byproducts of burning sulfur-heavy fossil fuels, particularly coal, and they tend to have a cooling effect on the atmosphere (this is one reason why, in the 1970's, the consensus climate prediction was that man was causing the world to cool, not warm).  Some scientists argue that these aerosols have tended to cool the Earth over the past decades, but as we clean up our fuels their effect will go away and we will get catch-up warming.

There are a couple of problems with this line of thought.  The first is that we understand even less about the magnitude of aerosol cooling than we do of CO2 warming.  Any value we choose is almost a blind guess (though as we shall see in a moment, this can be a boon to modelers on a mission).  The second issue is that these aerosols tend to be very short-lived and local.  They don't remain in the atmosphere long enough to thoroughly mix and have a global effect.  Given their localization and observed concentrations, it is almost impossible to imagine them having more than a tenth or two effect on world temperatures.  And I will add that if we need to take into account cooling from sulfate aerosols, we also need to take into account the warming and ice melting effect of black carbon soot from dirty Asian coal combustion.  But we will return to that later in our section on Arctic ice.

My second, related note is that scientists will frequently claim that their computer models models do claim correctly match historic temperatures when run backwards.  As a long-time modeler of complex systems, my advice is this:  don't believe it until you have inspected the model in detail.  At least 9 times out of 10, one will find that this sort of tight fit with history is the result of manual tweaking, usually from the affect of a few "plug" variables.

Here is one example -- there was a study a while back that tried to understand how a number of different climate models could all arrive at very different temperature sensitivities to CO2, but all still claim to model the same history accurately.  What was found was that there was a second variable -- past cooling from man-made aerosols, discussed above -- that also varied greatly between models.  And it turned out that the value chosen in the models for this second variable was exactly the value necessary to make that model's output match history -- that is why I said that our very lack of knowledge of the actual cooling from such aerosols could be a boon to modelers on a mission.  In essence, there is a strong suspicion that this variable's value was not based on any observational evidence, but was simply chosen as a plug figure to make the model match history.

Having gone about as far as we can with the forecasts without diving into a whole new order of detail, let's move on to the final alarmist contention, that man-made CO2 is already changing the climate for the worse.  We will discuss this in Chapter 7.

Chapter 7 on whether we are already seeing man-made climate change is here.

thanks Microsoft

This is part B of Chapter 5 of an ongoing series.  Other parts of the series are here:

1. Introduction
2. Greenhouse Gas Theory
3. Feedbacks
4.  A)  Actual Temperature Data;  B) Problems with the Surface Temperature Record
5. Attribution of Past Warming:  A) Arguments for it being Man-Made;  B) Natural Attribution (this article)
6. Climate Models vs. Actual Temperatures
7. Are We Already Seeing Climate Change
8. The Lukewarmer Middle Ground
9. A Low-Cost Insurance Policy

In part A, we discussed the main line of argument for attributing past warming to man-made CO2.  In essence, scientists have built computer models to simulate the climate (and global temperatures).  When these models were unable to simulate the amount of warming that occurred in the two decades between 1978 and 1998 using only what they thought were the major natural climate drivers, scientists concluded that this warming could not have been natural and could only have happened if the climate has a high sensitivity to man-made CO2.

This argument only works, of course, if the climate models are actually a correct representation of the climate.  And that can only be proven over time, by comparing climate model output to actual weather.  Back in chapter 4A, we briefly discussed how actual temperatures are in fact not tracking very well with climate model predictions, which should throw a substantial amount of doubt on the current quality of climate models (though the media still tends to treat model predictions as authoritative).

In this section, we will focus on some of the natural factors that are missing from most climate models.   Obviously, if important natural drivers have been left out of the models, then one cannot conclude from the inability of the models to match historical warming that the historical warming couldn't have been natural.  After discussing some of these factors, I will take my owns swing at the attribution problem.

Long-term Climate Shifts

We will begin with long-term climate variations.  These are most certainly left out of the models, because no one really understands why they occur (though theories abound, of course).  Mann's hockey stick not-withstanding, the consensus picture of past climate continues to include a strong warming period in the Middle Ages and a cool period, called the Little Ice Age, in the 16th and 17th centuries.

Imagine you were a climate modeler in 1600.  Your model would probably have under-predicted temperatures over the next 200 years, because you were trying to model starting at the bottom of a long-term cyclical trend.  So clearly leaving this trend out in 1600 would get the wrong answer.  Wouldn't leaving it out in the year 2000 also get the wrong answer?  All too often scientists tend to assume (though not always explicitly) that this long-term natural recovery of temperatures ended around 1950, at the same time they believe man-made warming started.  A metaphorical hand-off occurred from natural to man-made factors.  But there is no evidence for this whatsoever.  We don't know what caused the Little Ice Age, so we don't know how long it can last or when it ends.

Changes in the Sun

Since we have mentioned it, let's discuss the sun.  The sun is the dynamo that, along with a few smaller effects like the rotation of the Earth, drives the climate.  We have known for some time that the Sun experiences cycles of variation, and one of the ways one can observe this variation is by looking at sunspots.  We have more sophisticated ways of measuring the sun today, but we still count the spots.

Sunspots are cyclical in nature, and follow an eleven or so year cycle (you can see this in the spikes in the monthly light blue data above).  But when one take this cycle out of the picture, as was done with the 10.8 year moving average above, there also appears to be longer cyclical trends.  Since it is generally thought that more sunspots correlate with higher solar activity and output, one might expect that there could be some correlation between this solar trend and temperatures.  As we can see above, by the sunspot metric the sun was more active in the second half of the last century than in the first half.

Today, we don't have to relay on just the spots, we can look at the actual energy output of the sun.  And it turns out that the types of variations we have seen over recent decades in sunspots do not translate to very large changes in solar output on a percentage basis.  Yes, there is more solar output but the extra amount is small, too small to explain much temperature variation.   There is, though, an emerging new theory that a complex interaction of the sun with cosmic rays may affect cloud formation, acting as a multiplier effect on changes in solar output.  A lot of skeptics, eager to support the natural causation argument, jumped on this theory.  However, though the theory is intriguing and could turn out to be correct, I think folks are getting well ahead of the evidence in giving it too much credence at this point.

Ocean Cycles

At the end of the day, while solar variation may explain very long-cycle climate variations, it does not do much to explain our 1978-1998 warming period, so we will move on to another natural factor that does appear to have some explanatory power and which is also not in most climate models -- ocean cycles.

This is a complicated topic and I am far from an expert.  In short:  As mentioned in an earlier chapter, the oceans have far more heat carrying capacity than the atmosphere.  It turns out that oceans have cycles, that are decades long, where they can exchange more or less heat with the atmosphere.   In their "warm" periods, these cycles tend to leave more heat in the atmosphere, and in their "cold" periods they bury more heat in their depths.   Once such cycle is called the Pacific Decadal Oscillation (PDO), which will be familiar to most Americans because "El Nino"and "La Nina" climate patterns are part of this PDO cycle.  If one plots global temperatures against the PDO cycles, there is a good deal of correlation:

When the PDO has been in its warm phases (the red periods in the chart above), global temperatures rise.  When it is in its cool phases (the blue zones), temperatures are flat to down.   As you can see, the PDO was in a warm phase in our 1978-1998 period.  Surely some of that steep rise in temperature may have come from the effect of this ocean cycle, yet this cycle was not included in the climate models that supposedly ruled out the possibility of natural causes for warming in this period.

A number of scientific studies have tried to remove these (and other) cyclical and event-based drivers from the historical temperature record.   Here is one such attempt (ENSO and AMO are ocean cycles, large volcanoes tend to have a global cooling effect for a few years after their eruption)

With these natural effects removed, much of the cyclical variation from the Hadley CRUT4 data are gone, and we are left with a pretty constant linear trend.   Aha!  There is the warming signal, right?  Well, yes, but there is a problem here for the effort to attribute most or all of this warming to man -- specifically, this is not at all the trend one would expect if the long-term trend were primarily from man-made CO2.  Note the very linear trend starts around 1900, long before we began burning fossil fuels in earnest, and the trend is really quite flat, while man-made CO2 production has been growing exponentially.   Supporters of man-made attribution are left in the uncomfortable position of arguing that there must have been natural warming until about 1950 which stopped just in time for man-made warming to take over.

My Attribution Solution

A number of years ago I decided to take a shot at the attribution problem, largely just for fun, but it turned out so well I still keep it up to date.   I decided to assume just three factors:  1.  A long term linear trend starting even before the 20th century, presumably natural; 2.  A new added linear trend, presumably from man-made effects; and 3. A decadal cyclical factor, from things like ocean cycles.  I let the optimization program control everything -- the slope of the linear trends, the amplitude and period of the cyclical factor, the start date of the second modern trend, etc, to get the best fit with historic temperatures.  As before, I used monthly Hadley CRUT4 data.

This is what we ended up with.  A 66-year sine wave:

Plus a long-term linear trend of 0.36C per century and a new linear trend beginning around 1950 that adds another 0.5C per century (for a total linear trend after 1950 of 0.86C per century).

The result was a pretty good fit 8 years ago and more importantly, still continues to be a good fit up to today (unlike much more complicated climate models)

Though the optimization was based on monthly data, you can see the fit even better if we add on a 5-year moving average to the chart:

That is, then, my solution to the attribution problem.   Take the 0.5C per century since 1950 that this model has as  a modern linear trend, and we will for argument sake attribute it all to man.  From 1950-2016 (66 years, coincidentally my sin wave period) that is 0.33C  of historic warming due to man-made CO2.

In the next chapter, we return to the climate forecasts we discussed in chapters 2 and 3 and ask ourselves whether these make sense in the context of past warming.

Chapter 6 on climate forecasts vs. actual temperatures is here.

I look back on my original support for the war in Iraq and wonder how I made such a mistake.  Part of it, I think, was getting sucked into a general nationalist enthusiasm that strikes me as similar in retrospect to the August madness at the start of WWI.  But I also think I was scared away from the non-intervention position by the pathetic arguments and tactics adopted by some of the more prominent folks on the "peace" side of that debate.  Ironically in college I experienced the flip side of this problem, often lamenting that the worst thing that could happen in any argument was to have someone incompetent try to jump in on my side.

I recall all of this because I was reading this post from Ken White where he is responding and giving advice to a student who was the subject of an earlier column.   I really liked this bit:

We're in the middle of a modest conservative backlash and a resurgence of bigotry, both actual and arrested-adolescent-poseur. I believe a large part of this backlash results from the low quality of advocacy for progressive ideas. Much of that advocacy has become characterized by petulant whining and empty dogmatism. The message conveyed by too many of your generation is not that people should adopt progressive ideas because they are right or just, but that they should adopt them because that is what they are supposed to adopt because that is what right-thinking people adopt. That is irritating and ineffectual. Faced with an idea, I don't expect your generation to confront it. I don't expect you to explain how it's wrong, and win hearts and minds that your ideas are better. Rather, I expect you to assert that you should be protected from being exposed to the idea in the first place. That's disappointing and doesn't bode well for the success of progressive ideas (many of which I admire) in society. In short: if this is how you're going to fight for what you think is right, you're going to lose. Do better.

I find this election particularly depressing -- not just because the candidates are so disappointing (that has happened many times before) -- but because it has highlighted how large the anti-rational voter pool is, with both Sanders and Trump acting as attractors for them.

from Mark Perry