Coyote Blog

Holly Fretwell of PERC discusses the huge leap in agricultural yields since WWII

Not only does this mean that we have have billions of people on Earth and not starve, but it also has freed up labor for more productive and value-enhancing activities.

As an aside, remember this chart when global warming alarmists argue the the warming trend of the last 50 years is reducing crop yields.  (If the linked article seems simply bizarre given the chart above, realize the NYT is saying that crop yields are down from what they might have been.  This is the same kind of faulty logic that was used by Obama to credit his stimulus with job gains when in fact the economy was losing jobs.  They posit some unproveable hypothetical, and then say reality diverged from that hypothetical because of whatever factor they are trying to push, whether it be CO2 or stimulus).

The problem with food prices is not production, its the fact that we take such a huge percentage of our food grains and, by government dictat, convert them to automotive fuel.

I'm not really going to comment on the Jerry Sandusky pedophile cases.  The evidence looks pretty damning at this point but I'll let it play out in the courts.

But guilty or innocent, how could his attorney possibly have let him do a TV interview with Bob Costas the other day?  The interview has spurred new victims to come forward.

But beyond that, given that he insisted on going on TV (I suppose clients can ignore good advice), how could his attorney have allowed him to be so unprepared?  I did not watch the interview (I am not big on these select legal cases we like to try in the press), but I heard excerpts on ESPN.  The guy was not prepared to answer the simple and obvious question "are you a pedophile."  He hemmed and hawed and babbled and kindof said yes and no.  It was the worst, dumbest interview by an alleged criminal I have ever seen, and if you ever wonder why folks facing criminal or civil charges never jump into the media fray to defend themselves, go watch this interview.

James Hansen, head of NASA's GISS and technical adviser on An Inconvenient Truth, wrote recently

Thus there is no need to equivocate about the summer heat waves in Texas in 2011 and Moscow in 2010, which exceeded 3σ – it is nearly certain that they would not have occurred in the absence of global warming. If global warming is not slowed from its current pace, by mid-century 3σ events will be the new norm and 5σ events will be common.

This statement alone should be enough for any thoughtful person who here-to-fore has bought in to global warming hysteria out of vague respect for "science" to question their beliefs.

First, he is basically arguing that a 3σ event proves (makes it "nearly certain") that some shift has occurred in the underlying process.  In particular, he is arguing that one single sample's value is due to a mean shift in the system.  I don't have a ton of experience in process control and quality, but my gut feel is that a 3σ event can be just that, a 3σ event.  One should expect a 3σ event to occur, on average, once in every 300 samples of a system with a normal distribution of outcomes.

Second, and a much bigger problem, is that Hansen is gaming the sampling process.  First, he is picking an isolated period.  Let's say, to be generous, that this 3σ event stretched over 3 months and was unprecedented in the last century.  But there are 400 3-month periods in the last hundred years.  So he is saying in these two locations there was a 3σ temperature excursion once out of 400 samples.  Uh, ok.  Pretty much what one would expect.

Or, if you don't like the historic approach, lets focus on just this year.  He treats Moscow and Texas like they are the only places being sampled, but in fact they are two of hundreds or even thousands of places on Earth.  Since he does not focus on any of the others, we can assume these are the only two that have so-called 3σ temperature events this summer.

It's hard to know how large to define "Texas"  (since the high temperatures did not cover the whole state) or "Moscow" (since clearly the high temperatures likely reached beyond the suburbs of just that city).

Let's say that the 3σ event occurred in a circular area 500km in diameter.  That is an area of 196,250 sq km each.  But the land surface area of the Earth (we will leave out the oceans for now since heat waves there don't tend to make the headlines) is about 150 million sq km.   This means that each of these areas represent about 1/764th of the land surface area of the Earth.  Or said another way, this summer there were 764 500km diameter land areas we could sample, and 2 had 3σ events.  Again, exactly as expected.

In other words, Hansen's that something unusual is going on in the system is that he found two 3σ events that happened once every 300 or 400 samples.  You feeling better about the science yet?

Luboš Motl has a more sophisticated discussion of the same statement, and gets into other issues with Hansen's statement.

Postscript:  One other issue -- the mean shift in temperatures over the last 30 years has been, at most, about 0.5C  (a small number compared to the Moscow temperature excursion from the norm).  Applying that new mean and the historic standard deviation, my guess is that the Moscow event would have still been a 2.5σ event.  So its not clear how an event that would have been unlikely even with global warming but slightly more unlikely without global warming tells us much of anything about changes in the underlying system, or how Hansen could possible assign blame for the even with near certainty to anthropogenic CO2.

This is really sad to see in what is supposed to be a liberal democracy:

Now that the carbon tax has passed through [Australian] federal parliament, the government’s clean-up brigade is getting into the swing by trying to erase any dissent against the jobs-destroying legislation.

On cue comes the Australian Competition and Consumer Commission, which this week issued warnings to businesses that they will face whopping fines of up to $1.1m if they blame the carbon tax for price rises.

It says it has been “directed by the Australian government to undertake a compliance and enforcement role in relation to claims made about the impact of a carbon price.”

...

There will be 23 carbon cops roaming the streets doing snap audits of businesses that “choose to link your price increases to a carbon price”.

Instead, the ACCC suggests you tell customers you’ve raised prices because “the overall cost of running (your) business has increased”.

Update:  Obama loves the Aussie carbon tax

Addressing the press in Australia, where legislators passed a carbon tax earlier this month, Obama praised Prime Minister Julia Gillard for pursuing “a bold strategy” to trim industrial emissions that most scientists say are contributing to global warming.

Via Junk Science

In “Capitalism vs. the Climate“, [Naomi] Klein rants against “the deniers” but makes this admission:

The deniers did not decide that climate change is a left-wing conspiracy by uncovering some covert socialist plot. They arrived at this analysis by taking a hard look at what it would take to lower global emissions as drastically and as rapidly as climate science demands. They have concluded that this can be done only by radically reordering our economic and political systems in ways antithetical to their “free market” belief system. As British blogger and Heartland regular James Delingpole has pointed out, “Modern environmentalism successfully advances many of the causes dear to the left: redistribution of wealth, higher taxes, greater government intervention, regulation.” Heartland’s Bast puts it even more bluntly: For the left, “Climate change is the perfect thing…. It’s the reason why we should do everything [the left] wanted to do anyway.”

Here’s my inconvenient truth: they aren’t wrong. [Emphasis added]

A small victory against the relentless march of the state regulators and licensors

Eyebrow threading to remove facial hair, a practice which has ancient roots in Eastern countries such as India and Iran, is gaining popularity around the country.

And threaders can now operate freely in the state without a cosmetology license after an October court settlement determined that the Arizona Board of Cosmetology would no longer regulate the trade.

The consent judgment resulted from a lawsuit filed in Maricopa County Superior Court by five threaders, including Gutierrez.

The threaders argued that the Board of Cosmetology was merely trying to help more traditional hair removal outfits remove a source of low-cost competition.  The threaders were represented by the IJ, who do great work for economic liberty

via here, which has a lot of good data on California job losses.

If you have a service business, I can understand the desire to get access to the large and wealthy populations in these areas.  I even started a service operation in the LA area about 4 years ago, though I regret it intensely (other operations we have in rural CA are difficult but much easier than in LA).  But even so, why would anyone ever, ever start a manufacturing or any other business in these locations if it could be located anywhere else?

I was at a cocktail party the other night lamenting to a number of business owners (more successful folks than I) about problems I am having in CA.  Usually I get sympathy, but there was none to be had.  They looked at me like I was a moron, like I was the guy who went $30,000 in debt for a puppetry degree.  They said they had gotten out of CA years ago, would never go back, and (essentially) if I was stupid enough to be there, it was my own damn fault.

Unfortunately, a lot of the recreation is there, and for better or for worse, we have found that we are better and more efficient at dealing with a lot of the CA-induced mess than other companies.  But I often wonder if I am crazy to be there.

PS- as an example, it took us 4-1/2 years to get a permit for a 1000 gallon double wall gas tank at a marina in Ventura County.  We just got it approved last month, so at last we can stop hauling truckloads of 5-gallon fuel tanks from the gas station.  We are in the third year of trying to get permitting approval to replace (in kind, same size and features) a bathroom building in a campground.

Update:  All the job gains are in industries, like health care and construction, where the jobs have to be near the population served.  Compare that to manufacturing and tech.

This is pretty cool

NeverWet Fabrics from Ross Nanotechnology on Vimeo.

Note sure why the video just went private. Check out their web site here: http://www.neverwet.com/. See the second video on the video page, never wet on shoes.

I thought this was an interesting hypothesis, that the inability of coporations to use aptitude tests on potential hires (something that has been effectively killed by civil rights suits) has led to the increased reliance on college credentials as a screening mechanism.

I think there is an element of truth to this, but I suspect this would have happened anyway as the presure to cut costs caused companies to push their candidate evaluation and screening onto other institutions.  As I wrote a while back

There is some rationality in this approach [to hiring mainly from the Ivies] – it is not all mindless snobbism.   Take Princeton.  It screens something like 25,000 already exceptional applicants down to just 1500, and then further carefully monitors their performance through intensive contact over a four year period.  This is WAY more work and resources than a private firm could ever apply to the hiring process.  In effect, by limiting their hiring to just a few top schools, they are outsourcing a lot of their performance evaluation work to those schools.

I don't know if these percentages are entirely correct - I would argue the education / skills component of my mechanical engineering degree was higher than 10%, but that may be just my personal bias - but the basic approach seems sound

Peter Thiel describes higher education as a "giant selection mechanism" and estimates that only 10% of the value of a college degree comes from actual learning, and 50% of the value comes from selection (getting into a selective university) and 40% comes from signalling (graduating from a selective college becomes known to employers).  If employers could use intelligence tests instead of college degrees as measures of aptitude, it might be a lot more efficient and more cost-effective than the current practice of using very expensive four-year college degrees that add very little in terms of educational value (at least according to Thiel).

Lost in the discussion of Dan Carol's criticism of Steven Chu and his conduct in the Energy Department was an amazing implicit assumption about the DOE's mission:

“Secretary Chu is a wonderful and brilliant man, but he is not perfect for the other critical DOE mission: deploying existing technologies at scale and creating jobs,”

Seriously, is this really their mission?

This Newsweek article reviews the amazing coincidence that so many Obama DOE loans and subsidies benefited heavy-duty Obama campaign supporters.  The author seems surprised:

...these were highly competitive grant and loan programs—not usually a hallmark of cronyism. Often fewer than 10 percent of applicants were deemed worthy.

Nevertheless, a large proportion of the winners were companies with Obama-campaign connections. Indeed, at least 10 members of Obama’s finance committee and more than a dozen of his campaign bundlers were big winners in getting your money.

Kevin Drum writes that the lesson of OWS is that hard work no longer is enough to be succesful.  I wrote in the comments

I think you are leaving an important portion out of the value proposition kids are hearing.  Its not just "work hard and get an education and you will do well."  The actual proposition they think they are buying into is "work hard and get an education and work at whatever pleases you and you will do well."

I am reminded of Michelle Obama's plea to graduating college students to not go work in for-profit businesses, but to work for government or NGO's.  The problem is that workers, particularly young workers, don't get to define what is productive labor and what is not.  You can't go out in the world expecting to work really really hard at puppeteering or for the cause of Mayan feminism and necessarily expect to get paid a lot.  In any job, how much you make is determined by how valuable others see that work.

Particularly when you are 22, the work the world needs done and is valuable may very well not be what you want to do.  As you get older and more skilled, you often gain more possibilities of monetizing your true interests.  I was never really able to work at what I wanted until I was about 40.   That does not mean you can't do whatever the hell floats your boat when you are 22.  It just means don't expect the world to pay you whatever you want or need for doing it.

For something like 9 months in the Civil War, the Union and Confederate armies engaged in a stalemated trench warfare that was a preview of the western front in WWI (a preview that no one learned from).  Only Grant's ability to keep flanking the Confederate line and stretching it out until Lee faced thinning his troops too much eventually broke the stalemate.

One interesting parallel with WWI-- the Union in the Civil War had miners dig tunnels under the Confederate lines and packed them with explosives.  When they blew, it created a great gap in the line and an opportunity for the Union, an opportunity that was lost when Union soldiers went racing into the crater rather than around it.  Trapped in the crater, they were slaughtered by the Confederates.  The mistake was apparently the result of a last minute change of plans.  A group of black soldiers was supposed to lead the attack and had been trained to not go into the hole, but they were replaced at the last minute with white soldiers who had not been similarly briefed.

Anyway, it is odd how history repeats itself.   In WWI, the British tried the same trick, blowing a huge hole in German lines and eventually making a little headway against the German army, though the advantage was, as so many such things were on the Western front, short-lived.

via

Its amazing how many people can shake their heads in despair at the European debt crisis and then continue urging the US to do exactly the same things that got the Europeans into this mess.

I have tried to write this post several times but we are having some kind of Internet problem and I keep losing the post just before I get it finished.  Anyway, let's try again.

Yesterday my daughter was reading after school.  Like many freshman English classes, they are doing Greek mythology.  I was asking her questions about her day when she yelled at me, "dad, I have one more paragraph left in Sisyphus, just let me finish.  Every time you interrupt me I have to start over".  So of course I had to wait about ten seconds, just when I estimated she was about done, and I interrupted her again.  I kept doing this for a while, thinking it was simply hilariously apt.  Unfortunately, I don't think she

Touched: The Jerry Sandusky Story (I kid you not).

Some of the reviews are classic, though I am disappointed many of them are "please remove this book."  Why should we let this jerk hide?  The book up with its amazing irony and spate of scathing review comments is much better than being disappeared.

Turn it up to 11

Though it's a high bar given what has been going on recently, this is the most aggravating thing I have read this week, via Glen Reynolds:

Robert and Patricia Haynes live in Michigan with their two adult children, who have cerebral palsy. The state government provides the family with insurance through Medicaid, but also treats them as caregivers. For the SEIU, this makes them public employees and thus members of the union, which receives $30 out of the family's monthly Medicaid subsidy. The Michigan Quality Community Care Council (MQC3) deducts union dues on behalf of SEIU.

Michigan Department of Community Health Director Olga Dazzo explained the process in to her members of her staff.  "MQC3 basically runs the program for SEIU and passes the union dues from the state to the union," she wrote in an emailobtained by the Mackinac Center. Initiated in 2006 under then-Gov. Jennifer Granholm, D-Mich., the plan reportedly provides the SEIU with $6 million annually in union dues deducted from those Medicaid subsidies.

“We're not even home health care workers. We're just parents taking care of our kids,” Robert Haynes, a retired Detroit police officer, told the Mackinac Center for Public Policy. “Our daughter is 34 and our son is 30. They have cerebral palsy. They are basically like 6-month-olds in adult bodies. They need to be fed and they wear diapers. We could sure use that $30 a month that's being sent to the union.”

This is a microcosm of the typical liberal fail -- a group or agency does initial good work (private unions in the early 2oth century, civil rights groups in the 60's and 70's, the EPA in the early 70's) but refuse to go away and declare victory, instead morphing into self-sustaining parasites whose only concern is their own survival.

This has been around a while but it is worth a repost as we approach Oscar film season.

I hinted at it in my last post, but have addressed it in more depth in my column this week at Forbes.  A brief excerpt:

The theme from all these failures is distorted signals and corrupted communication.  People, no matter how savvy, cannot possibly research every nook and cranny of the economy before making an investment.  They make decisions, therefore, based on signals – prices, interest rates, perceived risks, and the profit history of other similar investments.  If these signals are artificially altered or corrupted, bad decisions that destroy wealth and growth will result.

Which brings me back to education.    I will tell you something almost every business owner knows:  We business owners may whine from time to time that banks won’t lend us money, but what really is in short support are great people.  Nothing has more long-term impact on an economy than amount and types of skills that are sought by future workers.  That is why everyone accepts as a truism that education is critical to economic health.

Unfortunately, there is good evidence that our education policies have already done long-term harm.   The signals we send to kids making their higher education plans have disconnected them from reality in a number of fundamental ways, causing them to make bad decisions for themselves and the broader economy.

Examples follow.  Read it all.

via Alex Tabarrok

I got a call this morning from Homeland Security about their e-verify immigration tracking system (which we are required by law to use in Arizona).  The caller said that Homeland Security was interested in the satisfaction of their customers.  I told her that I am not her customer.  I am a subject of the state who is forced by law against my will to use their system.  A customer is someone who is in a voluntary relationship.

The call ended soon after that.  I supposed I have just asked for some sort of audit, but at this point I don't care.

Yes, its stupid, but perhaps for a different reason than has been mentioned.  The tax is on producers, and is meant to fund a promotion and marketing campaign.  Really.  Because Christian families in the US might forget to buy a tree this year if the government did not remind them.  Seriously, do any of these folks have kids.  "Dad, can we get the tree today, can we, can we, please?"

By the way, this kind of taxation authority that bypasses Congress is actually fairly often used by the Department of Agriculture.   If you see random TV ads for avocados or almonds, you probably are seeing one of these government marketing forced-cooperatives.

I propose two lessons learned from the last five years:

• There is no such thing as a risk-free return
• There is no such thing as a perfect hedge

I found this fascinating, if unsurprising, via Zero Hedge:

Ran Duchin and Denis Sosyura of the University of Michigan looked at the U.S.’ Capital Purchase Program. You may recall that this became the centerpiece of TARP once Hank Paulson decided that the money would be better spent directly buying into the banks as opposed to overpaying them for dodgy asset-backed bonds. (Mind you, other parts of TARP were spent overpaying for dodgy asset-backed bonds.)

The CPP lasted a little more than a year and invested $205 billion of taxpayer funds into various qualifying institutions. Not every bank that filled out the 2-page application was successful in gaining access. Others were approved but ultimately decided not to take the funds (probably because of the attached restrictions on pay and on paying out dividends.) In the end, 707 financial institutions received the funds.

Duchin and Sosyua looked at a sample of 529 public firms that were eligible for CPP and slotted them into categories based on whether they applied, whether they were approved and whether they ultimately took the money. They controlled for non-random selection (via measures of the banks’ financial condition, performance, size and crisis exposure); for changes in national and regional economic conditions; and finally for potential distinctions in credit demand.

They then viewed the banks’ CPP participation status in comparison with their subsequent risk appetite as demonstrated by (1) their consumer mortgage credit approvals or denials (viewed on a risk-profile controlled, application-by-application basis); (2) their participation in syndicated corporate loans for riskier credits and; (3) the risk profile of their investment asset portfolios. What did they find?

They found more risk, across the board.  There is a lot of detail, so I will leave it to you to go to the source for more, but Zero Hedge concludes:

The bail-out itself increased our chances of having the bail the banks out all over again. Moral hazard is no longer in the realm of the abstract

A few months ago I went through an unbelievable hassle refinancing my loan.  Based on current appraisals, my loan to value was less than 50%, but I still ended up coming to the table with more equity to reduce the new loan size.  I was staggered at how hard it was to close what should have been a dead-safe loan, given the LTV and my income and credit history.  The study actually has a finding related to that:

For mortgages the bailed-out banks increased their risk–

“after CPP capital infusions, program participants tilted their credit origination toward higher-risk loans by tightening credit standards for the relatively safer borrowers and slightly loosening them for riskier borrowers.”

–while at the same time ensuring that they didn’t trip off any alarms

“This pattern would be consistent with a strategy aimed at originating high-yield assets, while improving bank capitalization ratios, since the key capitalization ratios do not distinguish between prime and subprime mortgages.”

This is a fascinating sort of metric manipulation.  Having my loan go from 45% to 40% LTV does nothing, really, for the overall safety of the bank, but it improves their averages and makes them look safer, while all the way they are actually engaging in more risky behavior.