Stone Cold Lead Pipe Lock Prediction: Equifax Will Be Changing Its Name Within 18 Months

Whether it be via bankruptcy, a merger, or just an internal rebranding, I am pretty sure the Equifax name will not exist in 18 months**. I had a class in business school that studied cases from a number of corporate PR emergencies -- J & J's aggressive handling of the Tylenol poisoning cases is frequently studied as the gold standard for how to handle such a crisis.  However, most of the cases involved companies repeatedly firing additional rounds into their foot.  Equifax seems to be working from this latter script: (via Zero Hedge)

“Today, Equifax ended up creating that exact situation on Twitter. In a tweet to a potential victim, the credit bureau linked to, instead of It was an easy mistake to make, but the result sent the user to a site with no connection to Equifax itself. Equifax deleted the tweet shortly after this article was published, but it remained live for nearly 24 hours.”

Further research revealed three more tweets that had sent potential victims to the same false address, dating back as far as September 9th. These tweets have also since been deleted.

“Luckily, the alternate URL Equifax sent the victim to isn’t malicious. Full-stack developer Nick Sweeting set up the misspelled phishing site in order to expose vulnerabilities that existed in Equifax's response page. “I made the site because Equifax made a huge mistake by using a domain that doesn't have any trust attached to it [as opposed to hosting it on],” Sweeting tells The Verge. “It makes it ridiculously easy for scammers to come in and build clones — they can buy up dozens of domains, and typo-squat to get people to type in their info.”

I recently froze my credit history at the four major credit monitoring companies.  I was super paranoid about making sure the domain I was entering my personal data into was a subdomain of company's domain. would probably be safe.  But would very likely be a phishing site.  As would be or  I know from training our employees on subdomains we use in our own company's web site that 99% of my employees do not understand the differences between these addresses.


** Because I can be a jerk but in generally harmless ways, for several years after the Valujet crashes in the Florida swamps I told my friends -- who were flying AirTran to save money -- that they should consider flying Valujet, which I claimed was even cheaper on those routes.  They said no way they would fly Valujet after Valujet had two crashes in a row that were ascribed to lax safety standards.  AirTran at the time was Valujet with the name changed.

Engadget Is My Go-To Source For Bad Economic Analysis. Today's Lesson: Apparently Items Are More Valuable If You Can't Resell Them

The following from Endadget may be clearer if you translate the British "touts" to the American "scalpers"

Touts are unnecessary middlemen, inflating ticket prices purely to create a cut for themselves. Gig-goers hate them, artists hate them, and the government isn't too keen either. The use of automated online bots to hoover up tickets (that are later listed on resale sites with a mark-up) is set to become a criminal offence thanks to the Digital Economy Act. The government has also implored venues and resale sites to address the ways they might be enabling touts. Sure, we might be lose the stub souvenir, but can we just make digital-only ticketing mandatory and kill all the birds with one stone already?

This view of scalpers as leeching middlemen with no economic value but rather as rent-seekers who merely mark up tickets and pocket the money is unfortunately common.  But they are in fact a perfectly normal functioning of markets.  They perform at least two economic functions

  1.  Events often are mispriced for a variety of reasons.  Sometimes they charge too much, as in the recent McGregor-Mayweather fight, and the arena is half-empty.  The market can't do much to fix this.  But sometimes events are under-priced, and the demand far exceeds the available supply of tickets.  When this happens, some method of rationing must occur.  Back in my day rationing was by who was lucky enough to dial in at the exact right moment or who was willing to camp out all night.  Resale markets, including scalpers, where tickets are resold well above face value are another approach.  Scalpers don't make money taking some sort of middleman fee, they make money buying tickets at face and then taking the risk that they can resell them later at a higher price.  They are not always successful.  I have sold a number of tickets I could no longer use under face to get rid of them, taking a loss.
  2. If you cannot resell a ticket to the person you want for the price you like, you lose some of your property rights in that ticket and it is less valuable to you.  Look at airline tickets, which are all electronic today and cannot be resold or transferred.  Are you better off as a consumer not having a secondary market for airline tickets?  Do you really like tickets that are use-them-or-lose-them propositions?  The contention in this article that consumers are better off if their concert tickets worked more like airline tickets is simply nonsense.  Scalpers increase our consumer sovereignty.

It should be noted that a digital ticket does not automatically mean loss of property rights in that ticket.  I bought Dallas Cowboys playoff tickets and Hamilton tickets on a secondary market and got them transferred to me electronically.  The Ticketmaster electronic app, at least currently, allows you to transfer the ticket to someone else and so digital ticketing platforms don't have to mean scalpers go away -- one could easily imagine two guys in a parking lot can still transact in tickets from their cell phones.  But the danger, of course, is that unlike with paper tickets this right of resale can be taken away any time by simply blocking the transfer function.  The article does not make this clear but I assume they are promoting a platform where once you buy the ticket you can only resell it back via the original seller (if at all), or else the entire article would be complete nonsense (always a possibility on engadget).

Artists and producers are complete hypocrites on this issue.  They are jealous because they would like to charge what the market could bear for their tickets but fear fan backlash if they do.  So they keep prices low so they can claim to be the fan's friend, but with a catch -- they hold back a ton of inventory in the hottest shows and do not offer that to the public at the published low price.  They sell this inventory at high prices to sponsors and other special groups or even sell it themselves at high market rates on the same 3rd party resale sites they publicly criticize.   What these folks really want is for there only to be secondary markets that they control. They don't want competition from third parties, and this lack of competition is only going to be worse for the consumer.  Think of it this way -- what if by law you could only resell your car to the dealer you bought it from.  Would you get as good of a price.  Hah!


In Comparing Trump to Hitler, We Are Comparing Him to the Wrong German

I just finished re-reading Barbara Tuchman's the Guns of August at almost the same moment I was also reading from Trump's UN speech.  I was struck how much Trump's nationalism flavored with a sense that his country is somehow not getting its due in world affairs seems so similar to Kaiser Wilhelm II, leader of Germany from the late 19th century through the First World War.  And I think the fear many of us have is that Trump's seemingly ham-handed, blustering, confrontational style will mirror Wilhelm's mis-steps that played a large role in the advent of WWI.

It wasn't necessarily that Wilhelm wanted war and conspired to get it -- in fact, his panicky foot-dragging in the crucial late days of late July and early August of 1914 were an interesting part of the story.  He seemed to me like a blowhard in a bar that always talked about throwing down with everyone around him but was surprised on the day he actually found himself being taken out to the parking lot for a real fight (and he was not the only driver of German actions -- the army for one had a beautiful plan and almost couldn't bear not to try it).  But Wilhelm by his bluster and unpredictability and untrustworthiness and at times outright nuttiness spent years making all the options that were not-war less feasible.

The Insanity of Base Load Wind Power

I have talked a lot about how wind power has almost no effect on fossil fuel use because the unpredictability of wind requires a lot of fossil-fueled plants to keep burning fuel on hot standby in case the wind dies.  Matt Ridley comes at wind from a different angle, discussing what it would take for wind to actually have any meaningful impact on world electricity production.

Even put together, wind and photovoltaic solar are supplying less than 1 per cent of global energy demand. From the International Energy Agency’s 2016 Key Renewables Trends, we can see that wind provided 0.46 per cent of global energy consumption in 2014, and solar and tide combined provided 0.35 per cent. Remember this is total energy, not just electricity, which is less than a fifth of all final energy, the rest being the solid, gaseous, and liquid fuels that do the heavy lifting for heat, transport and industry....

Meanwhile, world energy demand has been growing at about 2 per cent a year for nearly 40 years. Between 2013 and 2014, again using International Energy Agency data, it grew by just under 2,000 terawatt-hours.

If wind turbines were to supply all of that growth but no more, how many would need to be built each year? The answer is nearly 350,000, since a two-megawatt turbine can produce about 0.005 terawatt-hours per annum. That’s one-and-a-half times as many as have been built in the world since governments started pouring consumer funds into this so-called industry in the early 2000s.

At a density of, very roughly, 50 acres per megawatt, typical for wind farms, that many turbines would require a land area greater than the British Isles, including Ireland. Every year. If we kept this up for 50 years, we would have covered every square mile of a land area the size of Russia with wind farms. Remember, this would be just to fulfil the new demand for energy, not to displace the vast existing supply of energy from fossil fuels, which currently supply 80 per cent of global energy needs.

How do renewables advocates trumpet the high renewables numbers they often report?  By lumping in other things and hoping the reader is tricked into thinking the total is wind and solar.

Their trick is to hide behind the statement that close to 14 per cent of the world’s energy is renewable, with the implication that this is wind and solar. In fact the vast majority — three quarters — is biomass (mainly wood), and a very large part of that is ‘traditional biomass’; sticks and logs and dung burned by the poor in their homes to cook with. Those people need that energy, but they pay a big price in health problems caused by smoke inhalation.

People who talk about sustainability often miss the single best metric we have of the net scarcity of resources that goes into any product:  price.  I am always amazed when people point at a much much higher price version of some product and claim that it is more sustainable.  How can this possibly be?  Assuming the profit margins are relatively similar, the higher priced product has to be using more and scarcer resources.  How is that more sustainable  (I will perhaps grant the exception that certain emissions are not properly priced into some products).

To this end, wind power is much more expensive than, say, power from modern natural gas generation plants, even if one factors in a $30 a ton or so cost of CO2 emissions.  This has to make us suspicious that maybe it is not really more "sustainable".

Wind turbines, apart from the fibreglass blades, are made mostly of steel, with concrete bases. They need about 200 times as much material per unit of capacity as a modern combined cycle gas turbine. Steel is made with coal, not just to provide the heat for smelting ore, but to supply the carbon in the alloy. Cement is also often made using coal. The machinery of ‘clean’ renewables is the output of the fossil fuel economy, and largely the coal economy.

Wealth Is The New Normal

Today, we spend a lot of time trying to understand the roots of poverty.  This was not so 200 years ago.  When Adam Smith wrote "The Wealth of Nations" his task was to explain why a very few nations at the time seemed to be getting wealthier.  Poverty at the time and through most of history was accepted as the norm.  Only the advent of free inquiry and (relatively) free markets has changed that norm.

Today, I Am Pissed At Black Lives Matter. They Aren't Doing The Hard Detailed Work Change Requires

Like many of the people who are protesting today in St. Louis the acquittal of  Jason Stockley (please, let's hope it stays peaceful) I am angry about the lack of accountability for this behavior:

Smith tried to flee from Stockley on Dec. 20, 2011, following an alleged drug deal, authorities said. During the pursuit, Stockley could be heard saying on an internal police car video he was going to kill Smith, prosecutors said.

Stockley, riding in the passenger seat of a patrol vehicle with his personal AK-47 in one hand and department-issued weapon in the other, shot at Smith’s car, according to St. Louis Circuit Attorney’s Office spokeswoman Susan Ryan and charging documents.

At Stockley’s direction, the driver of the police car slammed into Smith’s vehicle and they came to a stop, court documents said. Stockley then approached Smith’s car and shot him five times with his service weapon.

Stockley’s lawyers said he fired in self-defense because he believed Smith was reaching for a gun but prosecutors said the only gun recovered from the scene had only Stockley’s DNA on it.

Stockley was acquitted of all charges today.  Just read the above and remember that Smith was not some terrorist about to detonate a nuclear weapon, he was involved in a drug sale.  And here is this police officer chasing him in gunzerker dual-wield mode, crashing his car into him and shooting him after stating his intention to do so over the radio.

But I am also pissed off at BLM.  Why?  Well, I suppose if they encourage folks to violence today I will be mad at them for that.  But I am really mad at the total failure they have become as a change organization.  For years many lone voices have tried to point out issues with police violence and the lack of accountability for it.  BLM did a great job of substantially raising awareness of these issues through protests and disruptions.  But protest and disruption (and collecting donations) is all they seem to be able to do.  The time is long past that they need to be leading the hard work of renegotiating police union contracts and changing local laws.  BLM should have been ready for a day like today with a list of model legislation they can be waving in front of cameras saying this is the list of things we need to be doing in every city to prevent a repeat of this travesty.  Instead, all we will watch is more protests and violence.

Why do I single out BLM?  Why is it their responsibility?  Because they have sucked all the oxygen out of the room.   They wanted to be -- and are -- the de facto leaders on this issue.  They get all the funding.  They get all the celebrity support.  And they are not doing jack except perhaps alienating people they will need to work with to make progress.  They actually had a good plan in the beginning that they have since abandoned in favor of posturing and virtue signalling.   In contrast look at the ACLU, the IJ, and ALEC and how they spend their resources.   It reminds me of exactly how the Trump Administration operates, as so ably described by Megan McArdle today.  Lots of posturing, no ability to do the hard, detailed work to make change.

Trump Administration Wants More Private Operation of Public Parks. Here Is What That Would Require

A lot of people have been asking me about Secretary Zinke's statements about encouraging more private operation of parks.  First the good news, its a great idea.  Here is my standard 400-word essay on why:

Should National Park’s be privatized, in the sense that they are turned entirely over to private owners?  No.  Public lands are in public hands for a reason — the public wants the government, not, say, Ritz-Carlton, to decide the use and character and access to the land.  No one wants a McDonald’s in front of Old Faithful, a common fear I hear time and again when privatization is mentioned.

However, once the agency determines the character of and facilities on the land, should their operation (as opposed to their ownership) be privatized?  Sure.   The NPS faces hundreds of millions of dollars in capital needs and deferred maintenance.  It is crazy to use its limited budget to have Federal civil service employees cleaning bathrooms and manning the gatehouse, when private companies have proven they can do a quality job so much less expensively.  The US Forest Service, for example, has had private operators in over a thousand of its largest parks for nearly thirty years, and unlike state parks agencies or even the NPS, it is not considering park closures or accumulating deferred maintenance, despite having its recreation budget axed.  Why? Because its partnership program with private operators is a fundamentally sounder, lower-cost approach to park operations.

In fact, such public-private partnerships are nothing new for the NPS.  The NPS was an early innovator in this field, and currently private companies operate many of the visitor services in parks, such as lodges and gift shops.  The US Forest Service innovation, which has been copied by many agencies including most recently California State Parks, has been to turn over operations of the whole park, not just the lodge, to a private company.  These are highly structured contracts, wherein the private company cannot modify the facilities or change fees without agency approval, and must meet a range of detailed performance goals.

Most critiques of private park operations center around quality and fees.  While there certainly have been some isolated failures, in general the results have been quite good.  In Arizona, a recent poll by ranked the top 10 public campgrounds in Arizona.  Of these, three of the top five were US Forest Service campgrounds run by a private operator, as was the top Arizona campground in Sunset Magazine’s “Best of the West”  (OK, I have to brag, these are all run by my company). As for fee concerns, state-run parks in California charge $30 for a no-hookup camp site.  Privately operated public campgrounds in California forests seldom charge more than $18.

My company operates over 150 state, county, and federal parks.  I encourage you to take the “Pepsi Challenge” and see some of them for yourself.  They are well-run, generally with more staff than a typical state park, and have no significant deferred maintenance backlog.  Oh, and not a single one has a McDonald’s, a billboard, or a neon sign in front of a national monument.

Now for the bad news:  I am skeptical any progress will be made, for several reasons.

  1. The rank and file of these organizations are generally against private operation of any of their functions.  For a couple of reasons.  First, people who work in government tend, through a self-selection process, to be people who are more confident in government solutions and more skeptical of private solutions.  Second, agency leaders are seldom judged on things like efficiency or customer service.  I read and act on every single negative review that comes in for our operations.  It is impossible to imagine the head of Arizona State Parks (which is about the same size as our company in terms of revenue and visitors) doing such a thing.  Agency leaders get their pay and prestige based on the size of their budget and headcount, and private outsourcing even of non-core functions works against this.
  2. Overcoming this skepticism takes a lot of hard work, organizational work the Trump Administration has shown itself either unable or unwilling to undertake so far.   As a minimum, change requires messaging that engages the rank and file, not just the Republican base.   In most lands agency, it would also require that they scrap their insanely useless (but time-consuming) planning processes in favor of a real portfolio planning process that assigns recreation lands to different customer segments (e.g. wilderness experience vs. high development) and then explicitly addresses where private capital and operating efficiency could help.

The good news is that I think there is a path to success.  The privatization message should offer real benefits agency personnel care about (and I am pretty sure tax reduction is not one of these).  Privatizing things like bathroom cleaning would allow the agency to stop overpaying for routine non-core tasks and allow it to free up resources for things its employees (and the public) are passionate about, like addressing the enormous deferred maintenance account in most lands agencies and reversing crumbling infrastructure in parks.  Most agency employees joined with recreation or environmental science degrees and don't want to clean bathrooms or deal with angry customers anyway.

For the public, recreators who like a lot of infrastructure and facilities are natural supporters of private operation and bringing in private capital to public lands, but the most passionate advocates for public lands are disproportionately folks who want wilderness experiences and distrust development.  That is why having a portfolio management process for public lands is so important.  The Forest Service, for example, makes every campground they own in the west look the same.  I can close my eyes and tell you what your Forest Service campground looks like even if I have never been there.  This is crazy.   Create something like a "Wild Camping" label and attach it to a subset of the portfolio and don't allow any development.  Even remove development.  Then have other sites for more developed camping.   Maybe sites that focus on first-timers or kids.  Maybe lower-cost value sites.  (People always assume that as a private operator, I want to develop everything, but I don't.  Sure I have places where we have cabins and showers and electricity at every site.  But I also operate pure primitive sites with no power, water, or even cell service.  Hell, in some ways I like operating the latter better -- less to go wrong.)

Canadian Authoritarianism: Prosecuting People With the Wrong Opinions

This comes to us from that bastion of freedom called Canada, where half of Americans wanted to run when Trump got elected.

It’s like something out of George Orwell’s 1984**.

Canada’s Competition Bureau, an arm’s length agency funded by Prime Minister Justin Trudeau’s government to the tune of almost $50 million annually, investigated three organizations accused of denying mainstream climate science for over a year, following a complaint from an environmental group.

The bureau discontinued its 14-month probe in June, citing “available evidence, the assessment of the facts in this case, and to ensure the effective allocation of limited resources”, according to Josephine A.L. Palumbo, Deputy Commissioner of Competition, Deceptive Marketing Practices Directorate.

But it will re-open its investigation should it receive relevant new information from the public.

The complaint was filed by Ecojustice on behalf of six “prominent” Canadians, including former Ontario NDP leader and UN ambassador Stephen Lewis.

It accused three groups, Friends of Science, the International Climate Science Coalition, and the Heartland Institute of making false and misleading claims about climate change, including that the sun is the main driver of climate change, not carbon dioxide, and that carbon dioxide is not a pollutant.

When it launched its complaint in December, 2015, Ecojustice told the National Observer it would press the Commissioner of Competition to refer the matter to the Attorney-General of Canada for “criminal charges against the denier groups”.

**I presume the author is referring to the general understanding of what 1984 was about, rather than Hillary Clinton's revisionist opinion that 1984 was a cautionary tale about the danger of not having enough respect for government authority figures.

Phoenix Transit Ridership Continues to Fall as Light Rail Investment Goes Up

Well, the numbers are in for the 2017 fiscal year (which ends June 30) and after another huge investment in light rail, Phoenix has lost more transit ridership.   From the Valley Metro web site:

First, credit where it is due.  After years of bizarre chartsmanship where bars on their graphs bore only a passing relationship to the numbers being graphed, Valley Metro seems to have adopted a new (or their first) graphing program.

As you can see, while light rail trips were up by about a million, bus trips were again down by over 2 million, for a net loss in transit ridership of over a million, the fourth year in a row this has been the case.  I had expected rail ridership to rise, since in 2016 the rail system was expanded by 31% in length and 36% in cumulative investment.  This extension resulting in a 15.6% increase in rail ridership between 2015 and 2017.  Early on, I got in a debate with supporters of the line arguing that since they had cherry-picked the densest corridor in town to start, incremental extensions would actually reduce ridership per mile because they would be serving less promising routes.  Supporters argued that I was ignoring network effects and that ridership would rise faster than line length.  I guess we are sorting out that argument now.

In the ten years leading up to the opening of the light rail line, transit ridership grew by an average of 6.7% a year in Phoenix.  In the 8 years since the rail line's opening, total transit ridership has fallen 1% per year.  This is a well known effect (at least well known to all but rail die-hards) that Randal O'Toole, among others, has been pointing out for years.  Since light rail is an order of magnitude more expensive to operate per passenger-mile, and since transit budgets are never infinite, growing light rail tends to strangle bus traffic, because bus routes and service have to be cut to feed money into the light rail money pit.  Since every dollar spent on rail moves fewer passengers than a dollar spent on buses, transferring money from buses to trail reduces total ridership.  It is worth noting that had the line not been built and bus transit had been allowed to grow as it had before the line, there might have been over 40 million more trips last year assuming pre-2009 growth rates.

The Teaching Company (Also Known as Great Courses)

A while back I was writing about something -- the Civil War I think -- and I mentioned that I had been lucky enough to have James McPherson as a professor.  I remember a comment on the post that said something like "yes, yes we know, you went to Princeton."  I certainly was lucky, and that school contributed a lot to what I am.  But as far as attributing sh*t I know to a source, Princeton is in at least second place.   By far the greatest source of what I know about history, art, music and even about the sciences comes from the Teaching Company.  And that is available to all of you, no SAT required.

I just checked my account and I have taken 71 courses from them, including 54 history courses**.  I think I have taken, for example, pretty much all the courses on this list in a Tyler Cowen post.  I began my journey taking courses on things that had always interested me but I knew a fair amount about already, such as the history of Ancient Rome or the Civil War or WWII.  But the most fun I have had has been taking courses on periods I knew little about -- such as Daileader's great histories of the Middle Ages or the History of China.  And I have had the most fun taking courses on things I knew NOTHING about, such as the history of India, of pre-Columbian American civilization, and of nomadic civilizations of Asia.

The key thing to remember is:  never pay rack rate.  Everything goes on sale from time to time.  Today until midnight, for example, they are having a 70% off sale on a subset of their stuff.  You can still get cd's and dvd's if you want but I used to get the digital download for my iPod and increasingly just stream the audio from an android app and stream the video from their Roku app.


** My family thinks I am weird because I listen to these courses as I run and work out (instead of music).  But it turns out this was not nearly as weird as when I have done Pimmsleur language courses while I am running.  If you want to really take your mind off your running, try to diagram a sentence in your head to figure out which of freaking German article you should be using.  Also, it creates a nice reputation around the neighborhood for eccentricity if you babble in foreign languages as you run.

A Note on the "1000-year" Flood And Our Intuition About Outlier Events

Many media outlets were calling the post-Harvey flooding in East Texas a "1000-year" flood.  Forget for a moment on the craziness of saying this is a 1000-year flood when we have at most about 150 years of weather records for the Houston area.  Consider something else -- that our intuition about outlier events tends to suck.

Let's say the flood affected a quarter of Texas.  This is probably an exaggeration, but it will help the following analysis be conservative.   Based on numbers from Wikipedia, Texas has 268,597 square miles of land area and the whole globe has 57.5 million square miles of land area.  This means that a quarter of Texas is about 1/1000 of the land area of the globe.  Even if this were truly a 1000-year storm, we should see such a storm over a similar area of land every single year on average somewhere in the world.  And if you add in other weather events that I have seen described as "thousand year", including snowfalls, heat waves, cold waves, droughts, etc. then we should be seeing a thousand-year weather event of some sort over a similar area as that affected by Harvey every few months.

One Onerous New Regulation Down, Zillions More to Go

A while back I wrote about the Obama Administration's near exponential expansion of EEO reporting

 It takes the current EEO-1 (the annual exercise where we strive for a post-racial society by racially categorizing all of our employees) and makes it something like 15-20 times longer.  In addition, rather than simply "count" an employee as being on staff in a certain race-gender category, we now have to report their income and hours worked.  Either I will have to hire staff just to do this stupid report, or I will again (like with Obamacare) have to pay a third party thousands of dollars a year to satisfy yet another government reporting requirement.  This is utter madness.

Get this -- the report has 3600 individual cells that must be filled in.  And this is in addition to the current EEO-1 form, which also still has to be filled out.  The draft rule assumes 6-7 hours per company per year for this reporting.  They must be joking.

Fortunately, the Trump Administration has at least temporarily suspended this requirement:

On Tuesday, the White House suspended a burdensome reporting requirement for employers that would have cost them $400 million while yielding information of questionable value. It did so in rejecting changes to the EEO-1 form made at the end of the Obama administration.

The White House Office of Management and Budget stated that the pay collection and reporting requirements “lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues.” It explained its reasoning in a letter to the Chair of the Equal Employment Opportunity Commission, Victoria Lipnic.

The Obama administration had claimed that rewriting the form to include 3,660 boxes for companies to check or fill out would help identify wage discrimination. But very little of the information it sought would have shed any light on potential wage discrimination.

Intrusive Law Enforcement Agencies Celebrate iPhone X

First, I want to congratulate @apple for introducing a $1000 phone with features like wireless charging and an edge-to-edge screen that my last two or three android phones have already had.  Perhaps the most, or only, interesting new feature is the facial recognition.  Apple is abandoning fingerprint scanning in favor of facial recognition to unlock the phone.

I mention the law enforcement angle in the title because it has been a bone of contention how far law enforcement can go to make someone unlock their phone.  Clearly, when unlocking was PIN only, one only had to declare they forgot and no one could really disprove that.  With fingerprint scanning, it has been a point that is still in the courts (I believe) as to whether LE can force someone to unlock the phone with their finger.  Now, however, all they will have to do is hold the phone up to the suspect's face.  This less invasive unlocking technique is probably an everyday hassle reduction, but will make the phone incrementally less secure from snooping.

Morbid postscript:  I wonder if this works on a corpse?  Is there a heat sensor of some sort, or are the kids going to be saying "let's get the eyes on dad's body open so we can get his phone unlocked".

VRBO / HomeAway Have Abandoned Faith With Travelers By Corrupting Their Review System

One of the best innovations on the web has been customer review scores.  I use the reviews of products at, Tripadvisor, Yelp, and Opentable all the time to aid in my buying.  Sure they can be frustrating -- some reviewers will petulantly give 1 star reviews for absurd issues or failings.  And I know that as much as reviews on Tripadvisor, Google Places, and Facebook can drive me crazy, they help me improve my business.

But these systems only work when they are run with integrity. I once had to get a Tripadvisor review deleted because it was fraudulent (made up claims from a disgruntled employee rather than a customer).  It was a long, uphill battle to get that one review deleted, as it should be.

Unfortunately, VRBO and HomeAway (I think they are the same company now) have abandoned this integrity.  For those that do not know, these sites feature rental of vacation homes and apartments.  We love this travel option - often we can get a nice 2 bedroom condo with kitchen and living room for the same price as a hotel room.  On this site there are often hundreds or thousands of options for rentals, and so customer reviews can be an important source of information in choosing.  Does it really look like its pictures?  Was everything there that was promised?  Are there any location or noise issues?  Essentially, reviews make sure the landlord cannot try to hide issues from travelers.

It used to be you could just log in and review the location, just like one does with a product on Amazon.  I think there was some testing to make sure you had actually rented it, but this is easy and Amazon has the same thing where it tags reviews with something like "confirmed buyer" or whatever.  But VRBO has now gone to a system where the landlord can essentially opt out of the review process.  If they don't send you a review link, you can't review.  In other words, you can't review without the owners permission.  And, as you may guess, owners with properties that have flaws that would readily be pointed out by reviewers do not allow one to review.

To compound the problem, VRBO hides all this.  For example, we rented this flawed beach home in San Diego.  It was wonderful in every way except for one -- the properties below and around it seem to be preferred destinations for loud groups of frat boys partying.  We pretty much got no sleep.   I wanted to warn future customers of this potential issue, but that is impossible because the landlord will not send me a VRBO review link, and that is the only way I can review it.  VRBO hides this because the listing says "This property doesn't have any reviews yet!"  That sounds far more innocent than the more accurate statement, which would be "This property does not choose to participate in the review process."

Yep, I Was Right. Opioid Proposals Going Forward With No Discussion Of Their Effect on Legitimate Users

A few weeks ago I wrote:

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

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

Think in particular about point #2 when reading this:

Arizona would limit all initial opioid prescriptions to five days for new patients under sweeping guidelines recommended Wednesday by Gov. Doug Ducey's administration.

The plan also would limit maximum doses for pain medication, implement steps to taper down pain medications and require pain prescriptions to be filed electronically, rather than on paper, to limit diversion of drugs.

Consider that many legitimate users will need more than the legal maximum dosage to control their pain, and thus the issue becomes whether we want to essentially torture innocent sick people by forcing them to remain in excruciating pain in exchange for (possibly) reducing the number of accidental deaths from abusers of these drugs (I say possibly because over the last 40 years the government war on drugs has had such a super stellar track record in reducing narcotic usage).

To me the answer to this tradeoff is obvious but I am willing to admit it is a tradeoff subject to debate.  But the article linked has no debate.  There is not a single mention of any downsides to the rules, or any potential harm to legitimate users.

Cutting the Resources Without Cutting the Work

When I was at consultant McKinsey & Co, one of their philosophies in doing cost reduction studies was that you don't cut staffing without first cutting back the work.  Identify the activities that don't need to be done or can be streamlined, change the processes to match, and then cut staffing.

This, of course, is not the way it usually happens, even in good companies.  Most companies just whack staff counts by some percentage, perhaps across the board and perhaps weighted by intuitions as to where the company is fat.  In a good company with good managers and good incentives, the organization can generally be trusted to cut back on the least useful activities in response to the staff cuts.  But in bad organizations with poor incentives, one has no idea if high value or low value activities are being cut.  And in the government, you can almost be assured that when staff and budgets are cut, low-value activities are preserved while high-value core mission activities are cut.  In my world of public parks, staff cuts almost always lead to preservation of bloated headquarters staff while maintenance budgets and staff actually service visitors in parks is slashed.

And then there is this on new rules being imposed by the Trump Administration on NEPA.   If you want to know why infrastructure projects almost never get started and public lands are seldom improved, NEPA is a big part of the reason.  It is something that is desperately in need of reform.  But the Trump Administration appears to be making the same mistake I discussed above, cutting resources without cutting the work required:

Yesterday Greenwire ran a story about how one of the new political appointees at the Department of the Interior issued a memo requiring that National Environmental Policy Act (NEPA) studies (those Environmental Impact Statements you hear so much about) be completed in one year, and be no more than 150 pages long.

If there were ever any doubts that the Trump Administration minions have absolutely no idea what they’re doing, this should put them to rest. Ostensibly intended to “streamline the regulatory process”, blah, blah, blah, its effect will be precisely the opposite; this one memo will delay and stop more projects than anything the environmental community has ever come up with. The activists may be livid, but I promise you that their lawyers are going, “Yee-ha!” I certainly would be if I were still doing NEPA cases.

The NEPA and the hundreds of court decisions interpreting it are painfully clear on how detailed an EIS has to be. Putting artificial and arbitrary limits on an EIS will make it so much easier to show how the EIS does not “take a hard look at the environmental consequences,” contain “a detailed statement of any adverse environmental effects” of a proposed project, etc.

I Am Still Here

I have been out of town and absolutely consumed by a couple of very weird business issues, so I have not blogged much.  I will try to do a little today, but I will leave you with a quote I liked from Scott Sumner:

Or perhaps (as I've argued elsewhere) there is no such thing as "public opinion". People are like electrons; you can't measure them without changing their positions. ....Most people don't have views that are internally consistent, so their "views" on public policy issues are strongly shaped by the wording of the polls.

Price Gouging Laws: Allocating Goods in An Emergency To People Who Have Nothing Much Valuable to Do

During an emergency like a hurricane, many different categories of goods and services experience supply-demand shocks.  The shock may be because of a fall in supply (e.g. oil companies can't get gasoline into the area) or a spike in demand (e.g. for generators or plywood) or a combination of both.  In a free market, prices will rise to help match supply and demand.  Higher prices cause people with less valuable or more frivolous uses of the scarce goods to defer purchase, and can cause suppliers to expend extra effort to get product into the area, even diverting supplies from other areas.

When the government institutes price gouging laws in an emergency, the supply-demand mismatch that leads to the rising prices isn't magically eliminated.   First, without higher price incentives, all the incentives to get more supply into the area are lost.  Supply and demand under these regulations can only be matched by rationing demand, and typically this is through queuing and increasing search costs (e.g. driving around all over the place looking for a station that is open and has gas).  People who gain the limited supplies in this regime are thus those with a lot of time on their hands, where the marginal cost of queuing and driving around does not impose a lot of cost.  Think about a roofer scrambling to repair roofs after the a storm -- do they have time to have their trucks and crews sitting dormant in gas lines?  Thus, price gouging laws tend to ensure that scarce goods in an emergency flow to those with the least use for them.

I Think I Figured Out My Wireless Issues -- I Am Living in a Damn Faraday Cage

I have always had a couple of frustrations in my house.   First, we get awful, almost non-existent cell service from both Verizon and AT&T, despite living right in the middle of the city.  I always chalked this up to be on the outskirts of an area of town that until recently did not allow the construction of cell towers.

The other problem I have is trying to get a wireless signal through my house.  While the house sort of sprawls, it is U shaped with distances such that it should not be impossible to send signals from one side of the U to the other.   But it always has been hard, thus my investment in a commercial grade wifi system.

The other day I was watching a contractor cut a hole in the outer wall of my house, which is covered in stucco.  I hadn't really thought much about the home's construction -- it has some cinder block but mostly is just wood frame.  But watching the construction I had an epiphany.  The stucco was put on in the old way, over chicken wire.   I hadn't thought of this because none of the new stucco I have ever seen going on is done this way any more.   It turns out my whole house is covered in a big net of chicken wire.  Worse, I saw they had removed the stucco around one of the hose bibs and the chicken wire was wrapped around the metal piping, the same piping our house uses as a ground.  My whole house turns out to be covered in grounded chicken wire -- I'm living in a Faraday cage!

Obviously since the wire does not cover every surface (windows, roof, etc) and was not carefully constructed to be a Faraday cage, the effect is not perfect.  But I took some measurements.  Wifi signal strengths in the 2.4Ghz range dropped by about 7-10 db when passing through an interior wall but dropped between 20 and 30 db through my exterior walls.

So at least I have some idea, finally, of what might be going on.

Regulation and Innovation

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

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

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

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

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


Confederate Statues, The Lost Cause School, and Stalinism

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

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

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

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

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

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

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

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

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

Model Railroad Update #2

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

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

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

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

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

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

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


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

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


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

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


And the payoff - the first train!


My Favorite Hawaiian Shirt Maker

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

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

Just Because It Is Friday -- Balloon Animal AT-AT

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

News Feature on Camp Hosting

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