Coyote Blog

You are likely aware that the US, and many other countries, are spending billions and billions of dollars on climate research.  After drug development, it probably has become the single most lucrative academic sector.

Let me ask a question.  If you were concerned (as you should be) about lead in soil and drinking water and how it might or might not be getting into the bloodstream of children, what would you spend money on?  Sure, better treatments and new technologies for filtering and cleaning up lead.  But wouldn't the number one investment be in more and better measurement of environmental and human lead concentrations, and how they might be changing over time?

So I suppose if one were worried about the global rise in temperatures, one would look at better and more complete measurement of these temperatures.  Hah!  You would be wrong.

There are three main global temperature histories: the combined CRU-Hadley record (HADCRU), the NASA-GISS (GISTEMP) record, and the NOAA record. All three global averages depend on the same underlying land data archive, the Global Historical Climatology Network (GHCN). Because of this reliance on GHCN, its quality deficiencies will constrain the quality of all derived products.

The number of weather stations providing data to GHCN plunged in 1990 and again in 2005. The sample size has fallen by over 75% from its peak in the early 1970s, and is now smaller than at any time since 1919.

Well, perhaps they have focused on culling a large poor quality network into fewer, higher quality locations?  If they have been doing this, there is little or no record of that being the case.  To outsiders, it looks like stations just keep turning off.   And in fact, by certain metrics, the quality of the network is falling:

The collapse in sample size has increased the relative fraction of data coming from airports to about 50 percent (up from about 30 percent in the 1970s). It has also reduced the average latitude of source data and removed relatively more high-altitude monitoring sites.

Airports, located in the middle of urban centers by and large, are terrible temperature measurement points, subject to a variety of biases such as the urban heat island effect.  My son and I measured over 10 degrees Fahrenheit different between the Phoenix airport and the outlying countryside in an old school project.  Folks who compile the measurements claim that they have corrected for these biases, but many of us have reasons to doubt that (consider this example, where an obviously biased station was still showing in the corrected data as the #1 warming site in the country).  I understand why we have spent 30 years correcting screwed up biased stations because we need some stations with long histories and these are what we have (though many long lived stations have been allowed to expire), but why haven't we been building a new, better-sited network?

Ironically, there has been one major investment effort to improve temperature measurement, and that is through satellite measurements.  We now use satellites for official measures of cloud cover, sea ice extent, and sea level, but the global warming establishment has largely ignored satellite measurement of temperatures.  For example, James Hansen (Al Gore's mentor and often called the father of global warming) strongly defended 100+ year old surface temperature measurement technology over satellites.  Ironically, Hansen was head, for years, of NASA's Goddard Institute of Space Studies (GISS), so one wonders why he resisted space technology in this one particular area.  Cynics among us would argue that it is because satellites give the "wrong" answer, showing a slower warming rate than the heavily manually adjusted surface records.

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.

Since then Fiat-Chrysler has been accused of the same behavior, and now GM is accused as well, though only in  a civil suit.

A class-action lawsuit accuses General Motors of rigging emission-control systems on 2011–2016 Chevrolet Silverado HD and GMC Sierra HD pickups with GM’s Duramax turbo-diesel 6.6-liter V-8 engine. If the allegations are proved true, the environmental damage from these 705,000 trucks, which the lawsuit said emit two to five times the legal limit of nitrogen oxides (NOx) in typical driving conditions, could easily exceed that of Volkswagen’s emission-test-cheating TDI engines.

Of course, people can say any thing they want in a civil suit, so this needs to be proved, but I think it probably is true.

A while back a reader with some inside knowledge explained what was going on.

I have made this same point before -- immigration restrictions on who can and can't work in the US is effectively a Federal work permit requirement, one that could easily be expanded over time:

E-Verify, if implemented nationwide, would be a system of work permits. If you started a new job, you would need the federal government to verify that you are legally allowed to have that job. How long would it be before the government started making judgements about who should be allowed to work? Convicted sexual predators, even those who were, say 19, and sleeping with a consensual 16-year-old, have to register for life and are told that they can't live in certain parts of a city. Is it entirely inconceivable that some would ultimately be told that they can't work?

I can imagine far worse than that in today's society.   One must complete a certain number of hours of training and pass a series of tests to get a driver's licence.  How long before someone suggestions mandatory diversity testing and a woke-ness test before being allowed to work?

I hate to quibble about a paper that supports my preconceived notions, but I am bothered by this as linked by Tyler Cowen

We quantify the amount of spatial misallocation of labor across US cities and its aggregate costs. Misallocation arises because high productivity cities like New York and the San Francisco Bay Area have adopted stringent restrictions to new housing supply, effectively limiting the number of workers who have access to such high productivity. Using a spatial equilibrium model and data from 220 metropolitan areas we find that these constraints lowered aggregate US growth by more than 50% from 1964 to 2009.

Isn’t it possible that cause and effect are being reversed here? I accept that zoning in places like SF make it more expensive. I would have concluded that this higher cost of living allows only the most productive to live there — less productive folks can’t afford it. So the high average productivity of these cities might partially be a result of their higher costs, not because the zoning somehow increases productivity, but because the zoning creates a sorting process where only the most productive may enter, which brings up the averages.  So a reduction in zoning and living costs would cause the productivity numbers for the city to average down as lower-productivity earners can move in.

From the terrorists-have-won department:  Apparently, the current in-cabin ban on laptops and tablets the applies to flights originating in certain Middle Eastern countries will soon be extended to flights from Europe.  I am pretty sure that if the US bans laptops on flights from Europe, the EU will ban them in the opposite direction, if nothing else as tit for tat retaliation.  This will make long distance flight a LOT worse, at least for me.  Unlike most folks, apparently, I have no interest in onboard entertainment systems and spend most of my time on these long flights getting work done on my PC or reading books on my iPad.  This will make me a lot less likely to schedule a vacation in Europe, and frankly I am relieved we decided at the last minute not to go there this summer.

George Will has a good article making the point that you are almost certainly richer today, in terms of the products and services you have access to, than a billionaire was in 1916.  Loyal Coyote Blog readers will have read roughly this same article over a decade ago.  In that nearly ancient post, I compared a middle class home-owner in my neighborhood to the owner of one of the largest mansions in America in the late 19th century:

One house has hot and cold running water, central air conditioning, electricity and flush toilets.  The other does not.  One owner has a a computer, a high speed connection to the Internet, a DVD player with a movie collection, and several television sets.  The other has none of these things.  One owner has a refrigerator, a vacuum cleaner, a toaster oven, an iPod, an alarm clock that plays music in the morning, a coffee maker, and a decent car.  The other has none of these.  One owner has ice cubes for his lemonade, while the other has to drink his warm in the summer time.  One owner can pick up the telephone and do business with anyone in the world, while the other had to travel by train and ship for days (or weeks) to conduct business in real time.

I think most of you have guessed by now that the homeowner with all the wonderful products of wealth, from cars to stereo systems, lives on the right (the former home of a friend of mine in the Seattle area).  The home on the left was owned by Mark Hopkins, railroad millionaire and one of the most powerful men of his age in California.  Hopkins had a mansion with zillions of rooms and servants to cook and clean for him, but he never saw a movie, never listened to music except when it was live, never crossed the country in less than a week.  And while he could afford numerous servants around the house, Hopkins (like his business associates) tended to work 6 and 7 day weeks of 70 hours or more, in part due to the total lack of business productivity tools (telephone, computer, air travel, etc.) we take for granted.  Hopkins likely never read after dark by any light other than a flame.

If Mark Hopkins or any of his family contracted cancer, TB, polio, heart disease, or even appendicitis, they would probably die.  All the rage today is to moan about people's access to health care, but Hopkins had less access to health care than the poorest resident of East St. Louis.  Hopkins died at 64, an old man in an era where the average life span was in the early forties.  He saw at least one of his children die young, as most others of his age did.  In fact, Stanford University owes its founding to the early death (at 15) of the son of Leland Stanford, Hopkin's business partner and neighbor.  The richest men of his age had more than a ten times greater chance of seeing at least one of their kids die young than the poorest person in the US does today.

Hopkin's mansion pictured above was eventually consumed in the fires of 1906, in large part because San Francisco's infrastructure and emergency services were more backwards than those of many third world nations today.

Here is a man, Mark Hopkins, who was one of the richest and most envied men of his day.  He owned a mansion that would dwarf many hotels I have stayed in.  He had servants at his beck and call.  And I would not even consider trading lives or houses with him.  What we sometimes forget is that we are all infinitely more wealthy than even the richest of the "robber barons" of the 19th century.  We have longer lives, more leisure time, and more stuff to do in that time.   Not only is the sum of wealth not static, but it is expanding so fast that we can't even measure it.  Charts like those here measure the explosion of income, but still fall short in measuring things like leisure, life expectancy, and the explosion of possibilities we are all able to comprehend and grasp.

I have a similar reaction every time I tour the mansions in Newport, RI.  They are magnificent in their way, but they are also cold, and to my modern eye, unlivable.  Think of it this way -- You are trapped alone on a desert island.  A plane airdrops you a crate of diamonds.  You are rich, right?

Back in the 1970's, there were serious proposals in Congress to nationalize US oil companies.  My dad, who was an executive at a major oil company, was being constantly dragged to DC to testify in front of Congress to try to explain what a bad idea that would be.  This was a time of incredible economic ignorance in Washington, perhaps even more than average, when a Republican President had recently instituted wage and price controls and Congress was looking for ways to "fix" problems with oil supply that they themselves had caused with price control rules and other restrictions on exploration.

Think about what we know about state-run oil companies in Venezuela, Mexico and even Saudi Arabia:

• They always under-invest capital in well maintenance, preferring to route cash flow to social spending that helps maintain shaky governments in power.  Many folks don't understand this, but production from a well starts falling off almost from the moment you drill it.  Well's must be expensively reworked and maintained and upgrade to keep flowing over their life.  This has gotten so bad in Venezuela that the country with the world's largest oil reserves is running out of gas.  I worked with Pemex for years and, at least in the 1990's, were about 1 step away from Pemex looking just like Venezuela's state oil company
• They have missed most of the recent revolutions in technology, and do no technology development of their own.  If not for technology developed by private western oil companies, they would barely be ahead of Edwin Drake.
• They deal with price downturns by forming cartels and attempting to fix prices and reduce output.

Private oil companies at the same time:

• Reinvest massively in both new and existing fields, often with 20-30 year time horizons
• Continue to revolutionize technology - the shale boom is just one example
• Respond to market price downturns with innovation and efficiency improvements.

The link above is gated so here is an excerpt:

Now, with oil currently trading near $50 a barrel, these producers are trying to unleash fracking 2.0, the next step in the technological transformation of the sector that is aimed at extracting oil even faster and less expensively to eke out profits at that level.

The promise of this new phase is potentially as significant as the original revolution. If more producers can follow EOG’s lead and profitably ramp up output from shale drilling even at lower prices, the sector could become a lasting force that challenges OPEC’s ability to control market prices.

For a sector in which the previous era’s success was tied to the rapid expansion of output, the shift toward finding more cost-effective ways to get to that oil and gas is full of challenges. When oil prices dropped, critics wondered if the shale industry—rife with heavily indebted companies that had never turned a profit—would collapse.

EOG, with its longtime focus on low-cost production, is the producer many hope to emulate, thanks to the iSteer app and dozens of other homegrown innovations. Dubbed the “Apple of oil” by one analyst, EOG made its name as a pioneer in horizontal drilling and in finding ways to get oil out of shale—often dense layers of rock that hold oil and gas in tiny pores—a feat many once believed impossible.

Can you imagine people like Gina McCarthy running our state oil company?  Good god, we would have $10 gas and import 80% of our oil.

Back on Inauguration Day I wrote:

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.

Last week, Andrew Heaton made a similar proposal in the Federalist, but explained the logic better than I did:

We threw the baby out with the bathwater when we kicked the monarchy out of America, and we ought to bring it back. To be clear, I do not mean the sort of hereditary tyrants who rule North Korea, Saudi Arabia, or the New York Yankees. Rather, I’d like for us to get one of those cute, ornamental throne warmers the Europeans trot around to cut ribbons at events.

In America we’ve combined power and reverence in the office of the presidency, but legal authority and veneration compliment each other about as well as Scotch and back pain medication. It’s safer to ingest them separately....

In America our head of government and head of state both problematically reside in the president. We can see that unholy union in full force during the spasm of pageantry which is the State of the Union address. President Jefferson rightly viewed the whole affair as pompous and monarchical, and sent Congress a letter instead.

Unfortunately the nimbus of deference surrounding the presidency has swelled with time. In 1956 a political scientist named Clinton Rossiter published “The American Presidency,” a tome sopping wet with sycophantic notions about the Oval Office. He described the commander-in-chief as “a combination of scoutmaster, Delphic oracle, hero of the silver screen, and father of the multitudes.”

Gag me. The president is the top bureaucrat, and there’s nothing more American than despising bureaucrats. The government is basically a giant Human Resources Department with tanks, and the president is in charge of it.

My only response to this is to quote from just about every comment section on the internet:  "first!"

I am at an impasse.  Here is my dilemma:  I don't know if the media is purposely obfuscating the climate debate or whether they are just ignorant and scientifically illiterate.  For now, because I am a happy soul that does not like making dark assumptions about other people's motivations, so I am going to give the media the benefit of the doubt and just assume they are ignorant.  But it is getting harder to reach this conclusion, because for it to be ignorance, it has to be serial ignorance lasting many years and crossing thousands of people.

The other day, in response to an article at Skeptical Science, I wrote about the typical media myths in the climate debate that make actual conversation about the theory so difficult.  The first one I listed was this:

• "Climate deniers are anti-science morons and liars because they deny the obvious truth of warming from greenhouse gasses like CO2"

In fact, if you read the article, most of the prominent climate skeptics (plus me, as a non-prominent one) totally accept greenhouse gas theory and that CO2, acting alone, would warm the Earth by 1-1.2C.  What we are skeptical of is the very net high positive feedbacks (and believe me, for those of you not familiar with dynamic systems analysis, these numbers are very large for stable natural systems) assumed to multiply this initial warming many-fold.

This is just tremendously frustrating, in part because climate alarmists (at least in the media) don't seem to understand their own theory.  I constantly have to patiently explain that the theory of catastrophic man-made global warming (or climate change if you prefer) is a two part theory, and that warming forecasts are based on two independent chained theories:  First, CO2 acting as a green house gas incrementally warms the earth and second, large net positive feedbacks in the Earth's climate multiply this initial warming many times.  The majority of the warming actually comes from the second theory, not greenhouse gas theory, but every time I am in a debate or interview situation one of the early questions is "how can you deny greenhouse gas theory, it is settled science?"   This is what I call the climate bait and switch -- skeptics have issues with the second theory but the media and climate alarmists only want to argue about the first.

Robert Tracinski at the Federalist highlights a really good example of this:

In a CNBC interview, the host asked, “Do you believe that it’s been proven that CO2 is the primary control knob for climate?” Pruitt answered: “No, I think that measuring with precision human activity on the climate is something very challenging to do, and there’s tremendous disagreement about the degree of impact. So no, I would not agree that it’s a primary contributor to the global warming that we see. But we don’t know that yet. We need to continue the debate and continue the review and the analysis.”

This is a pretty reasonable answer.  It is simply absurd to argue that CO2 (at a current atmospheric concentration of 0.04%) is the "primary control knob for climate".  CO2 is obviously part of a large and complex equation with many, many variables, but calling it the primary control knob is like saying that the sugar industry is the primary control knob for the US economy.

But back to the issue of the climate bait and switch.  Here is NPR responding to Pruitt's comments.  Can you guess what they say?

Those statements are at odds with an overwhelming body of scientific evidence showing that humans are causing the climate to warm by releasing CO_² into the atmosphere. The view that CO_² is a major heat-trapping gas is supported by reams of data, included data collected by government agencies such as NASA and the National Oceanic and Atmospheric Administration.

Greenhouse gas theory is settled science!  But Pruitt has never, in anything I have read, disagreed with greenhouse gas theory.  He just thinks the effects have been exaggerated.  But here is the media, yet again, ignoring the actual arguments of skeptics and trying to recast their position as denying greenhouse gas theory.  The media sets up this false dichotomy that either you accept that CO2 is "the primary control knob of climate" or you deny CO2 is a greenhouse gas at all.  They allow no intermediate position, despite the fact that both of these choices are scientifically absurd.

Mr. Tracinski goes on to make the same point I often make, so I will let him do it in his own words since I don't seem to have any success explaining it:

The question is not whether carbon dioxide is a greenhouse gas. The question is whether it is the “primary control knob for the climate.” The question is whether it is the greenhouse gas, the one factor that dominates all other factors.

There is good reason for skepticism. For one thing, just on the “basic science,” Pruitt is absolutely correct. Carbon dioxide is a greenhouse gas, but it is not the most powerful greenhouse gas, by a long shot. Water vapor is far more effective at trapping heat and releasing it back to the atmosphere, primarily because it absorbs a lot more radiation in the infrared spectrum, which is released as heat.

That’s why all of the climate theories that project runaway global warming use water vapor to juice up the relatively small impact of carbon dioxide itself. They posit a “feedback loop” in which carbon dioxide increases temperatures, which increases the amount of water vapor in the atmosphere, which increases temperatures even more. These models need a more powerful greenhouse gas to magnify the effect of carbon dioxide.

But does it really work that way? By how much does water vapor magnify the impact of carbon dioxide? And is that effect dampened by other factors? Consider cloud formation: more water in the atmosphere means more clouds, which reflect sunlight back into space and have a cooling effect that counteracts the warming effect. But by how much?

The answer is that nobody really knows. There are varying estimates for “climate sensitivity,” that is, how sensitive global temperatures are to increases in carbon dioxide. They range from a relatively trivial impact—less than one degree Celsius warming from a doubling of atmospheric carbon dioxide—to more than five degrees.

About a year and a half ago when I was in Asia, I saw a lot of folks has laundry racks that were essentially lifts, where one could put the laundry out to dry and then lift it up out of the way.  I thought this would be awesome for our laundry room, which unusually for a laundry room has a 12 foot ceiling.   Since we live in Arizona, I hand a lot of things like my cotton shirts to dry, it reduces the wrinkles and in our 4% humidity it tends to be bone dry after just a few hours.

But it was impossible to find one in the US.  I even had a contest on this web site to try to find one, with no real luck.  So after nearly a year of searching, multiple false starts, language issues, shipping issues, disappearing orders, and a general contractor who had absolutely no idea how to install the thing, we finally meet with success:

It is awesome for us -- lowers to about 5 feet above the ground to make it easy to hang things on it, and then raises high enough that the laundry clears me head.  Down & Up:

I'd buy the US distribution rights for this thing if I thought anyone else had similar applications for it over here.

Yesterday at an event called One Day University, I saw a talk by William Burke-White of Penn and formerly of the Obama state department (I think he was one of many consultants, but I can never figure out seniority from people's biographies - his is here).

Mr. Burke-White was discussing the liberal world order created by the US after WWII and recent decline / threats to this world order and American power.  He discussed five trends or forces driving changes, and you probably can predicts many of them.  He discussed the rise of new world powers (e.g. China), the rise of powerful NGO's (e.g. ISIS) and the expansion of the Internet (which can destabilize traditional powers).  All fine, I have no particular comment on that stuff.  He also discussed climate change, with a picture of Manhattan underwater, and though I am tempted, I won't even respond to that.

What caught my attention was his fifth point -- about income inequality.  He showed a slide with the meme that 8 people (Warren Buffet et al) had more wealth than something like half the world's population put together.   His conclusion was that the liberal world order had failed because so much wealth had been concentrated in a few hands.

Well, if American power and influence is declining in the world and Mr. Burke-White is an example of the thinking of the Obama administration over the last 8 years, I now have a better understanding of why.   Sure there are really rich people.   There were probably 8 really rich guys in 1400 (though they would have all been Kings and Emperors rather than private business people).  The really different, world-changing event over the last 50 years has been the emergence from poverty of over a billion people, as facilitated by market capitalism.  Never before in all of the history of the planet have so many people been pulled out of poverty in such a short time.  Never before has such a large percentage of the globe moved beyond pure subsistence farming.  If the leaders of this country find it impossible to communicate this simple good news, then of course the post-WWII liberal world order is going to struggle.

Look, I understand that baby boomers (a group of which I am barely a member) have a hard time figuring out how to cope with this country's many past missteps.  Yes, we have been ham-handed (and that is generous) in exercising our power and we have often failed to live up to our stated values.  But helping to unleash a wave of market capitalism on the world is among our true successes.   And this is the US's one true source of power, this wave of prosperity we have helped to birth.  Other supposed sources of our power -- a big military and atomic bombs -- are horrifying.  Market capitalism is our one source of strength that is genuinely positive.  If we are staffing the state department with people who don't get this, then no wonder we are losing influence in the world.

Ten years ago, we published an editorial from our Chinese sister publication Panda Blog.  Though some of the details of their government's financial actions have changed since then, the gist of it is still correct -- the Chinese government still engages in actions that they call "export promotion" and President Trump calls "currency manipulation".  So I think this editorial from the perspective of the Chinese consumer is still relevant:

Our Chinese government continues to pursue a policy of export promotion, patting itself on the back for its trade surplus in manufactured goods with the United States.  The Chinese government does so through a number of avenues, including:

• Limiting yuan convertibility, and keeping the yuan's value artificially low
• Imposing strict capital controls that limit dollar reinvestment to low-yield securities like US government T-bills
• Selling exports below cost and well below domestic prices (what the Americans call "dumping") and subsidizing products for export

It is important to note that each and every one of these government interventions subsidizes US citizens and consumers at the expense of Chinese citizens and consumers.  A low yuan makes Chinese products cheap for Americans but makes imports relatively dear for Chinese.  So-called "dumping" represents an even clearer direct subsidy of American consumers over their Chinese counterparts.  And limiting foreign exchange re-investments to low-yield government bonds has acted as a direct subsidy of American taxpayers and the American government, saddling China with extraordinarily low yields on our nearly $1 trillion in foreign exchange.   Every single step China takes to promote exports is in effect a subsidy of American consumers by Chinese citizens.

This policy of raping the domestic market in pursuit of exports and trade surpluses was one that Japan followed in the seventies and eighties.  It sacrificed its own consumers, protecting local producers in the domestic market while subsidizing exports.  Japanese consumers had to live with some of the highest prices in the world, so that Americans could get some of the lowest prices on those same goods.  Japanese customers endured limited product choices and a horrendously outdated retail sector that were all protected by government regulation, all in the name of creating trade surpluses.  And surpluses they did create.  Japan achieved massive trade surpluses with the US, and built the largest accumulation of foreign exchange (mostly dollars) in the world.  And what did this get them?  Fifteen years of recession, from which the country is only now emerging, while the US economy happily continued to grow and create wealth in astonishing proportions, seemingly unaware that is was supposed to have been "defeated" by Japan.

We at Panda Blog believe it is insane for our Chinese government to continue to chase the chimera of ever-growing foreign exchange and trade surpluses.  These achieved nothing lasting for Japan and they will achieve nothing for China.  In fact, the only thing that amazes us more than China's subsidize-Americans strategy is that the Americans seem to complain about it so much.  They complain about their trade deficits, which are nothing more than a reflection of their incredible wealth.  They complain about the yuan exchange rate, which is set today to give discounts to Americans and price premiums to Chinese.  They complain about China buying their government bonds, which does nothing more than reduce the costs of their Congress's insane deficit spending.  They even complain about dumping, which is nothing more than a direct subsidy by China of lower prices for American consumers.

And, incredibly, the Americans complain that it is they that run a security risk with their current trade deficit with China!  This claim is so crazy, we at Panda Blog have come to the conclusion that it must be the result of a misdirection campaign by CIA-controlled American media.  After all, the fact that China exports more to the US than the US does to China means that by definition, more of China's economic production is dependent on the well-being of the American economy than vice-versa.  And, with nearly a trillion dollars in foreign exchange invested heavily in US government bonds, it is China that has the most riding on the continued stability of the American government, rather than the reverse.  American commentators invent scenarios where the Chinese could hurt the American economy, which we could, but only at the cost of hurting ourselves worse.  Mutual Assured Destruction is alive and well, but today it is not just a feature of nuclear strategy but a fact of the global economy.

Arnold Kling thinks about human nature:

I believe that humans in large societies have two natural desires that frustrate libertarians.

1. A desire for religion, defined as a set of rituals, norms, and affirmations that are shared by a group and which the group believes it is wrong not to share. Thus, rooting for your local sports team is not a religion, because you realize that it is not wrong for someone else not to root for your local sports team. But if you are against GMO foods, then you believe that those who disagree with you are wrong.

2. A desire for war. I think that it is in human nature to fantasize about battles against tribal enemies. War arises when those fantasies are strong enough to drive behavior.

Though he mentioned tribalism, I think tribalism needs to be pulled up to the top as one of the main two tendencies.  I commented:

I would have recast your second bullet point into a predilection for tribalism rather than a fondness for war. I think it is more all-encompassing. It is tribalism that leads to war, but it also leads to any number of other dysfunctional practices, like protectionism, immigration restrictions, etc.

In addition, tribalism is making it more and more difficult for basic politics to work, particularly for libertarians. As a libertarian, I used to make common cause with the Left on things like gay marriage and the Right on things like regulatory reform. This is increasingly hard to do -- if one does not hold all the group's other beliefs, they don't want to work with you on a narrow issue. Several years ago I was uninvited from co-chairing an effort on gay marriage because others in the group did not like my stances on unrelated issues like education choice.

A few weeks ago there was a bizarre spectacle of a woman who supports the imposition of Sharia law in the US helping to lead the women's march. What the hell? Countries with Sharia law often look like apartheid but for women rather than blacks. Why is is a leading women's advocate supporting such a thing?

This seeming contradiction makes sense, though, in the context of tribalism. The "other" tribe (the Right) opposes sharia law and is skeptical of fundamental Islam so our side must fully embrace it. There is no longer the possibility of any subtlety, like "I don't traffic in gross generalizations about Muslims and welcome them to this country but Sharia law (at least as practiced in some countries, I don't have the religious history chops to know if it is being interpreted correctly) has many things in it that are an abomination to individual rights and Muslims coming to this country are going to have to leave parts of that behind."

This is one of my emerging rules of politics:  if one political group holds a position that does not seem consistent or logical in the context of their other positions, assume they are holding this position because their rival political group has already staked out the opposite side.

Update:  In retrospect, most of what I am calling tribalism he is calling religion, so I think we are saying the same thing with different words.

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.

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.

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

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?

The history of this blog has been, except for the last three months, one of me never ever making political prognostications.  This is a policy I will return to, as I was completely wrong about this election.  Just to rub my own nose in it, this is what I wrote:

I think that "shackled to a suicide bomber" is more apt. Trump is not only going to lose big in this election to an incredibly weak Democratic candidate, but he is also going to kill the Republicans in the House and Senate and any number of down-ballot elections.

Oops.  At this point the election is not decided but Trump is clearly competitive and the Republicans look likely to hold on to both houses of Congress.

In business school, there is a famous project we do in marketing that teaches an important lesson.  In that project, a bunch of Ivy Leaguers are asked to estimate the percentage of people in the US who snow ski.  We all look around the table and say, "I ski and you ski and she skis, so it must be about 80%", when in fact the percentage is in the single digits.  The lesson is to not make predictions for whole markets (and countries) based on one's own personal outlook and experience.  I and many other clearly did not understand large swathes of the electorate, something I want to think about for a bit.   The one thing I am sure about is that my (and many others') attempt to apply a policy framework to this is simply not going to work.  Trump is a sort of anti-wonk, a governmental Loki. Policy choices likely don't explain this election.

When some sort of "bad" phenomenon is experiencing a random peak, stories about this peak flood the media.  When the same "bad" phenomenon has an extraordinarily quiet year, there are no stories in the media.  This (mostly) innocuous media habit (based on their incentives) creates the impression among average folks that the "bad" phenomenon is on the rise, even when there is no such trend.

Case in point: tornadoes.  How many stories have you seen this year about what may well be a record low year for US tornadoes?

Extreme lack of extreme with tornadoes. Will need "second season" to stop it from being quietest year on record! pic.twitter.com/PuBvgjJBvn

— Joe Bastardi (@BigJoeBastardi) November 8, 2016

Postscript: By the way, some may see the "inflation-adjusted" term in the heading of the chart and think that is a joke, but there is a real adjustment required. Today we have doppler radar and storm chasers and all sorts of other tornado detection tools that did not exist in, say, 1950. So tornado counts in 1950 are known to understate actual counts we would get today and thus can't be compared directly. Since we did not miss many of the larger tornadoes in 1950, we can adjust the smaller numbers based on the larger numbers. This is a well-known effect and an absolutely necessary adjustment, though Al Gore managed to completely fail to do so when he discussed tornadoes in An Inconvenient Truth. Which is why the movie got the Peace prize, not a science prize, from the crazy folks in Oslo.

A few months ago I helped my son shop for an apartment in San Diego, where he is working for Ballast Point Beer.  Currently I am helping my daughter look for apartments in Pasadena, where she may be attending art school.  In both cases we found that small studio apartments often have higher rents than one- and sometimes even two-bedroom apartments in the same complex (and with the same fit and finish, amenities, etc.)

What the hell?  I understand that there may be more demand for studio apartments in these neighborhoods among young singles than for larger apartments, but once one sees the studio for $2200 and the one-bedroom for $1800, why would one still choose the studio, which might be half the size?   Ease of cleaning?  Is there some artificial demand from some government or financial aid program that will only pay for studio apartments?  Do Chinese students come to the US and suddenly get agoraphobia from an apartment that is too large?

For years I have argued that immigration controls in this country are effectively a form of occupational licensing.  While US immigration controls are a terrible policy IMO, Germany's approach seems even worse.  They welcome people into their country but don't let them work, and then wonder why newly immigrated refugees can't find jobs.

In 2015, Germany waited the longest of any country in Europe to restrict the flow of asylum seekers from the Middle East. Yet once they arrived, the asylees who immediately sought work in Europe’s largest economy were greeted by bureaucracy. The law initially forbade asylees from seeking work for 9 months after their arrival, but was reduced to 3 months in November 2014. Then, inexplicably, at the height of the inflows, the German governmentbanned working if the asylee was forced to stay a reception center, which could be up to 6 months.

After the initial waiting period, asylees did not receive unrestricted employment authorization. Instead, they would have to find a “concrete” job offer—i.e. a firm must promise to hire them if the permit is granted—then apply for authorization. Even then, companies can only hire them during the first 15 months if the jobs are offered first to EU residents, and the federal labor department agrees that no one was willing to take. They also set asylee wages, which can price out low-skilled workers.

The hoops don’t end there. Asylees still have to get the approval of the immigration office at the municipal level. Under the law, it would take four years before they could compete equally with EU citizens.

On top of all these refugee-specific regulations, skilled workers are then tasked with proving that they can work in certain occupations. In order to obtain an occupational license, documentary proof of training—proof that’s often buried under bombed-out homes in Syria—is required. Some states in Germany allow asylees to demonstrate their skills in order to receive licensing, but others do not. “I am a dentist and could work, but what am I supposed to do? I am not allowed to work here!” one asylee told DW News.

Low-skilled immigrants haven’t avoided being targeted either. Germany introduced its first ever minimum wage in 2015—which disproportionately hits lower skilled migrants—and a study by the German government in August 2016 found that it had already cost 60,000 jobs.

Hillary Clinton, along with many politicians and most of the media, is arguing that the recent large price increase in Epipens is some sort of market failure requiring government intervention to solve.

Democratic presidential nominee Hillary Clinton jumped into the fray over rapid price increases for the EpiPen, a life-saving injection for people who are having severe allergic reactions.

Mrs. Clinton called the recent price hikes of the EpiPen “outrageous, and just the latest example of a company taking advantage of its consumers.”

In a written statement calling for Mylan to scale back EpiPen prices, Clinton added, “It’s wrong when drug companies put profits ahead of patients, raising prices without justifying the value behind them.”

Why aren't similar government interventions required to curb greed in the pricing of paint, or tacos, or toilet paper?  Because the markets are allowed to operate and competitors know that if they raise prices too high, their existing competitors will take sales from them, and new competitors may enter the market.  The reason this is not happening with Epipens is that the Federal government blocks other companies from competing with Mylan for the Epipen business with a tortuous and expensive and pointless regulatory process (perhaps given even more teeth because Mylan's CEO has a lot of political pull).  The MSNBC article fails to even mention why Mylan has no competition, and in fact essentially assumes that Epipens are a natural monopoly and should be treated as such, despite the fact that there are 3 or 4 different companies that have tried (and failed) to clear the regulatory process over the last several years with competing products.  Perhaps these other companies would have been smarter to appoint a Senator's daughter to a senior management position.

Hillary Clinton is proposing a dumb government intervention to try to fix some of the symptoms of a previous dumb government intervention.  It would be far better to work the root cause instead.

Postscript:  Credit Vox with the stupid argument of the day:  

Other countries do this for drugs and medical care – but not other products, like phones or cars – because of something fundamentally unique about medication: If consumers can’t afford the product, they could have worse odds of living. In some cases, they face quite certain odds of dying. So most governments have decided that keeping these products affordable is a good reason to introduce more government regulation.

Hmm, let me pick a slightly different example -- food.  I will substitute that into the Vox comment.   I think it would be perfectly correct to say that there is not price regulation of food in the US, and that "If consumers can’t afford [food], they could have worse odds of living. In some cases, they face quite certain odds of dying."  In fact, the best place today to face high odds of dying due to lack of food is Venezuela, where the government heavily regulates food prices in the way Vox wished to regulate drugs prices.

Kevin Drum, in commenting on a Binyamin Appelbaum article in the NY Times, writes that the Presidential candidates should be talking more about poverty in part because the US is way behind Europe.  Specifically, Appelbaum quotes a Harvard Sociology (!) Professor as the source for the poverty claim:

“We don’t have a full-voiced condemnation of the level or extent of poverty in America today,” said Matthew Desmond, a Harvard professor of sociology. “We aren’t having in our presidential debate right now a
serious conversation about the fact that we are the richest democracy in the world, with the most poverty. It should be at the very top of the agenda.”

Drum argues that Desmond is right, because of this chart from the OECD:

One of the dirty secrets about poverty measurement is that the actual measurement seldom has anything to do with absolute well-being.  And this is the case with the OECD numbers.  The OECD's poverty measurement is based on the country's median income, and is the percentage of people who are below a certain percentage (generally 50%) of the country's own median income.  As such, this is more rightly thought of as a graph of income inequality rather than absolute poverty.

Here is an example.   Image country A with a median income of $50,000 and an income of the 20th percentile at $20,000.  Now imagine country B where the median income is $30,000 and the 20th percentile income is $15,000.  In this example, the poorest 20th percentile in country A are better off on an absolute basis, but the OECD (and most other poverty numbers) will show country B doing better because the poor are closer to the (much lower) median income.  In an extreme example, if everyone in a country were equally impoverished, the OECD would show that country as doing the best on poverty -- Yes, you read that right.  By this metric, the OECD would show a country where every person made just $10,000 a year as having 0% poverty.

Obviously, what one would really like to do is compare across nations the absolute well-being of the lowest 10th or 20th percentile.  On a purchasing power parity basis, which country's poor has, after transfers and taxes, more money?  Unfortunately, you likely have never ever seen this.  Yes, the data comparison is hard, but it is possible, so one has to wonder if there is some ulterior political motive for never showing this quite obvious analysis.

I tried to do this analysis myself for years (I describe some false starts here) but was unsuccessful until I actually identified a data source that would work, ironically from two folks on the Left (Kevin Drum and John Cassidy) who were using data from the LIS Cross-National Data Center to make comparisons of income inequality.  It turned out the data they were using could do what I wanted.

So now we get to the chart I call the poverty Rorschach test.  It is a comparison of the absolute income, by income percentile and including transfers and taxes, of the US vs. Denmark (the country by Drum's chart that should be the "best" on poverty)

(The date is old, alas, because this kind of cross-country data is only gathered every so often)

This chart shows, on a purchasing power parity basis, that for every single income percentile, all the way to the bottom, an equivalent person in the US has more income than that a similarly situated person in Denmark.  In short, the poor in the US are wealthier than the poor in Denmark.  The only reason Denmark does better than the US in the way the OECD and others measure poverty is that the middle class in the US are a LOT wealthier than the middle class in Denmark.

I call it the Rorschach test because one either sees the US doing a good job, because everyone is better off, or the Danish doing a better job, because everyone is more even.  Proponents of the latter view tend to believe that the size of the economic pie is an exogenous variable, unrelated to the method one chooses to slice it.

I picked the Danish because they were the obvious comparison from Drum's chart, but here is the US vs. all the European countries for which there was data in the survey.  The US is better than all but 3 at the 10th percentile and better than all but one country at the 20th percentile.  And better -- by a huge margin-- for the middle class than any of the countries in Europe.

Update:  One more note on Drum's chart.  As I said above, the exact definition of the OECD numbers is percentage of people with income less than 50% of the country's own median income.  The US has a median household income, per the OECD, 41% higher than Denmark's.   So the US has 9% more people under a number that is 41% higher.   That is hardly a fair or meaningful comparison.

For reasons that are beyond my understanding, I am banned at Mother Jones so I cannot post the comments directly to his article.  If someone wanted to cut and paste this under his or her own name, I wouldn't complain.

I am simply exhausted with the notion that seems to have taken over both political parties that trade with China is somehow the source of US economic woes.

Remember that voluntary trade can't happen unless both parties are benefiting from each trade.  Remember the masses of academic evidence that the (largely hard to see) benefits of trade in terms of lower costs and more choice tend to be greater than the (easier to see) job losses in a few trade-affected industries.  But even if none of that is compelling to you, consider that our trade deficit with China is just 2% of GDP.  It's almost a rounding error.

If politicians want to know why lower-skilled laborers struggle to find employment, they need to look past imports from China and Mexican immigration and look at their own policies that are making it more and more expensive for businesses to hire people in this country.   I have written about this many times before, but some of the most prominent include:

• minimum wage laws, rising to $15 an hour in many parts of the country, and increasingly draconian overtime rules, both of which substantially raise the cost of hiring someone.
• minimum benefit laws, including expensive health care requirements in Obamacare and a myriad of other state-level requirements such as mandatory paid sick leave or family leave
• payroll taxes that act as sales taxes on labor  -- we understand that cigarette taxes are supposed to reduce cigarette purchases but don't understand that payroll taxes reduce purchases of labor?
• employment regulations, such as chair laws and break laws in California, that make employing people more expensive and risky
• employer liability laws, that make employers financially responsible for any knuckleheaded thing their employees do, even when these actions violate company policy (e.g. making racist or sexist statements)**
• laws that make hiring far more risk, including those that limit the ability to do due diligence on potential employees (e.g. ban the box) and those that limit the ability of employers to fire poor performing employees.

And this is just employment law -- we could go on all day with regulations that make life difficult for lower income workers, such as the numerous laws that restrict the housing stock and drive up housing prices and rents for these same folks who are struggling to find a job.

Let's say you live in California.  Who has killed more jobs in your state -- China or the California legislature?  The answer is no contest.   The California legislature wins the job destruction race in a landslide.   While California's high-tech community enjoys a symbiotic relationship with China that has created immense wealth, the California legislature works overtime to make sure low-skilled workers in the state don't benefit.

**Postscript:  Of all the factors here, I won't say that this is the largest but I think it is the most underrated and least discussed.  But think about it.  If you are going to be personally financially libel for ignorant, insensitive, or uncouth remarks made by your employees, even when you have explicitly banned such behavior in company rules and don't personally tolerate it, how likely are you going to be to hire a high school dropout without a good work history to interact with customers?