Posts tagged ‘running’

Tesla: With the First Domino Tipped Over, It is Just Physics Now

You may not see much Tesla coverage here for a while, despite a lot of breaking news.  Here is why:

The dominoes are all lined up, and that was an interesting story (the dominoes include:  Tesla's poor management of a good product, its lack of adult supervision, its repeated failure to meet targets, its utter contempt for being held accountable to targets, its paranoid worldview, its past near-corrupt actions like the insider SolarCity purchase, Musk's irrational hatred of shorts, its running out of cash without any plan for a capital raise, the fanboys who would eat any dog food Musk served up, etc.)

The first domino has been tipped over (Musk's outright lie that he had funding secured for a $420 buyout when he had not even talked to bankers or his board yet, just to tweak the shorts for a few hours in one day).

Now, I am not sure that I find further falling dominoes that interesting -- after all, it is just inevitable physics at this point.

Note:  The crash is likely to be much slower than at Enron.  Once confidence failed in Enron, the crash came almost at once because Enron was like a large bank that was investing long and borrowing short.  Once the short-term borrowing window was closed for them, it was over.   Tesla can likely make it 6 months before they start scraping bottom and/or their debt covenants.

Update:  For the Tesla fanboys who seem super-excited about the loss of liquidity moving to a private company, here is what being a minor shareholder in a private company is like:

Three of Tinder's co-founders and several other current and former senior executives are suing the dating company's parent organizations, Match Group and IAC. According to a complaint published online, the lawsuit seeks billions of dollars in damages for allegedly manipulating financial information in order to reduce Tinder's valuation and illegally take away employees' stock options.

The complaint explains that Tinder was supposed to be valued in 2017, 2018, 2020 and 2021; On those days, employees should have been able to exercise their stock options. Instead, the lawsuit alleges that parent company IAC/Match Group inaccurately lowballed Tinder's valuation in July 2017 at $3 billion, the same as it did two years ago despite the dating app's substantial growth. Then, the parent company secretly merged Tinder into Match Group, which meant employees earned far less in stock options. Then, IAC threatened to terminate anyone who revealed how much the company was actually worth, the lawsuit claims.

My Guesses About $TSLA, and Why @TSLA Shareholder May Be Presented with a Bad Deal

@Elonmusk is facing real blowback for his management buyout by tweet the other day, in particular for two words:  "funding secured."  Many, including myself, doubt he really had tens of billions of dollars of funding secured at the time, particularly since all bankers and likely sources of funding as well as most large Tesla shareholders had never heard of any such transaction when contacted by the media.  The SEC is now looking into this and other Musk corporate communication practices.  If he lied in the tweet, perhaps to get revenge on the short-sellers he hates with an irrational passion, he could be in deep, deep legal poop, up to and including jail.

Let's play a game.  Let's assume he did NOT have funding secured at the time he tweeted this, and now is running scared.  What can he do?  One ace he has is that the board is in his pocket and (I hate to be so cynical about this) will likely lie their asses off to cover Musk.  We already saw the dubious letter the other day, from "members of the board" rather than officially from the board, attempting to provide cover for Musk's tweets.  This is not just a crony thing -- it is entirely rational for the company to defend Musk.  He is, in my opinion, a terrible executive but he is the avatar that drives the fan boys and the stock price.  The day that Musk leaves is the day that the company can really get its operational house in order but it is also the day the stock trades under $75.

So what can Musk do?  Well, the first defense might be to release a statement like "when I said funding secured, I was referring to recent conversations with ______ [fill in blank, maybe with Saudis or the Chinese, call them X] and they told me that if we ever were looking for funds they would have my back."  This is probably the best he could do, and Tesla would try to chalk it up to naivete of Mr. Musk to accept barroom conversation as a firm commitment.  Naivite, but not fraud.   I don't have any experience with the Feds on this kind of thing but my guess is that the SEC would expect that the CEO of a $50 billion public company should know the rules and legally wasn't allowed to be naive, but who knows, the defense worked for Hillary Clinton with her email servers.

But this defense is MUCH MUCH better if, in the next day or so, Tesla can announce a deal with X on paper with signatures.  Then Musk can use the same defense as above but it has much more weight because he can say, see, they promised funding and I believed them when they said they had my back and here they have delivered.

The problem with this is it would be really a deal being crafted for tens of billions of dollars on a very short timeframe and with limited negotiating leverage (X will know that Musk NEEDS this deal).  As a result, the deal is not likely to be a very good one.  X will demand all sorts of extraordinary provisions, perhaps, for example, a first lien on all Tesla IP and a high breakup fee.  I picture this more like the negotiation for bankruptcy financing, and in fact the IP lien was part of the financing deal Theranos made when it was going down the drain.  But put yourself in Musk's shoes -- jail or bad deal?

And likely his conscience would be clear because this deal would be killed quickly by shareholders.  That would be fine, because the purpose of the exercise would be to keep Musk out of jail, not to actually buy the company.  Tesla shareholders will still get hosed, probably having to pay some kind of break-up fee which any sane investor X would insert as the price for participating in this farce.  And we will go back to the starting point of all this, which is Tesla being public and focusing on operational improvement in what may be the most important operational quarter in its history.

Disclosure:  I have in the past been short Tesla but have no position in it now (I did short when trading reopened the other day after Musk's announcement but covered this afternoon).  I am not in any way, shape, or form giving any financial advice you should spend actual money backing.

What is the Only Major Network You Can't Livestream (Hint: It's the One Your Taxes Support)

I have been working on cord-cutting around the house and have been experimenting with different devices (e.g. Roku, Google, Amazon) and different streaming services (Youtube TV, DirecTV Now, and I may test Slingbox soon since it is the only one that seems to have the Redzone channel).

The boxes vary mostly in interface.  We have been a Roku family for a long time so we are comfortable with it, and it is pretty straight forward.  The one flaw is that there is no sharing across devices of passwords and such and so you tediously have to enter all your streaming service passwords in every device.  What is worse, the Roku tends to have these fits of forgetfulness making you re-enter many or all your passwords a second or third time.  I may have not understood the Google device but it seemed to require me to do everything with my cell phone nearby and actually streamed stuff from my phone.  This may be fine for millenials but was stupid for my home theater where I already have a Logitech remote that is programmed to handle everything.  I have not played much with the Amazon device -- if you are an Amazon family and like Alexa it may be the best solution.  I did not even consider the Apple device -- I am sure it is great if you all you use is Apple walled garden service and devices but I use many other services and in general find its interface a kluge.  Roku is really the one device with neutrality going for it.

I have tried several of the streaming services.  I like Youtube TV and its interface a lot.  DirecTV has a few more channels that I like but I like the interface less (by the way, there are several good channel coverage comparisons of the various streaming services you can google).  Both services have cloud recording functions, ability to watch content both live and in replay mode, and have good coverage of all the local networks.  I was hoping that Red Zone channel would come to DirecTV live as they have the satellite rights to it but apparently slingbox is the only service that is currently offering Red Zone, so I may have to try that.  I need to hurry as all my free trials are running out.

The one interesting exception to all this is that there is no way to get PBS live streamed on any device from any service right now.  Some local stations livestream to your browser and I think there is now a browser-based livestream of the News hour.  But you can't currently watch your local PBS station live -- you can only watch selected shows in replay mode after they have aired via a separate PBS app for devices like the Roku.  It is amazing to me that the progressive socialist haters of capitalism at PBS are the only network still committed to supporting the cable monopolies.  The PBS website helpfully tells you that you can buy an over-the-air antenna if you want to cut the cord and watch PBS.

The Days I Love My Job

I write on this blog a lot on those days in my job that get me down.  That only makes sense because I write about government regulatory policy vis a vis business and it is government interventions that often cause me the most heartache.

But there are good days too.  I have been putting together a new division and really need someone with b2b sales and marketing experience to run it and get it going.  I was just trying to figure out how I wanted to do a search when a resume came to me unsolicited from a current employee who has done a great job for us.  Basically they were applying for our manager training program (all our campground managers start in front-line service jobs).   Well, it turns out this guy who is currently cleaning bathrooms and doing landscaping for us in a campground is recently retired from over 10 years running a sales force for a $80 million industrial company and more recently running the whole division for that company for 2 years.  Talk about just finding a $100 bill lying on the sidewalk!

I'm Exhausted With Banks Treating Me Like A Criminal

For 15 years I have been a customer of El Dorado bank in a small town in California, just depositing our weekly revenues in the account and sweeping it out from time to time.  When Bank of America closed a few locations we use in other California small towns, it seemed easier to just add additional El Dorado accounts.  WRONG.  I was told today that because we might possibly maybe make three simultaneous deposits at the three banks that total to more than $10,000 in cash in one day, we suddenly are subject to all sorts of disclosure requirements.  I am used to having my privacy raped as a business owner to set up even a simple banking relationship, but now apparently any employee of mine who might make the weekly deposit is going to have to submit all sorts of personal information, including social security number, to the bank just for the ability to deposit money.  We have been doing the same business with El Dorado for nearly 20 years, and suddenly in the little town of Lone Pine, CA, population 2035, we are now treated as presumptive drug dealers and tax evaders.  It aggravates me that I have to put my employees in this position.

It used to be that it was easier to have fewer banking relationships to manage, but now I am thinking the costs may be running the other way, encouraging more smaller banking relationships that don't trigger whatever limits are set for treating customers as presumptive criminals.

One of the More Useful Articles I Have Read in a While

I often read articles that clarify my thinking on certain issues but this one helped clarify my thinking on why I come in conflict with people over a broad range of issues.  In-Groups, Out-Groups, and the IDW by Jacob Falkovich.  I will add that my one turn-off in this article is the focus on the so-called intellectual dark web or IDW.   I am suspicious of faddish-sounding things, particularly in the intellectual world.  At this point I am not even sure the IDW is even a real thing (many on whom this title has been slapped reject it).  What does seem to be real is that there is a budding resistance to post-modernism and intersectionality coming from folks it would be hard to label as traditional Conservatives (though Progressives and SJWs still try to label every one of their opponents as alt-right white nationalists).  I will accept IDW as a temporary and imperfect shorthand for this resistance.

Anyway, here is a sample from the article but I found the whole thing illuminating

In a thorough analysis of the Harris-Klein controversy, John Nerst suggests that what is actually at issue is whether the discussion of the racial IQ gap is a matter of science or of politics. Harris sees Murray as a scientist whose arguments and conclusions fall well within the academic consensus of genetic and cognitive science. Klein sees Murray as a ‘policy entrepreneur’ who advocates for reprehensible conservative policies. The notion that racial differences are genetic (and, in Klein’s understanding, therefore immutable), Klein argues, has historically been used to support destructive policies of bigotry and discrimination.

This isn’t merely a difference in emphasis. Underlying this debate is a divergence in modes of thought so wide that the two men were left practically at cross-purposes.

Harris is a scientist by training, and scientists depend on what rationality researcher Keith Stanovich1 calls “cognitive decoupling.” Decoupling separates an idea from context and personal experience and considers it in the abstract. It is the approach used in the scientific method, when performing thought experiments, and when generalizing principles from individual examples. In decoupling thought, arguments follow one another according to the formal rules of deductive logic.

The contrary mode of thinking sees every argument embedded in a particular context. The context of an idea includes its associations, implications, and the motivations and identities of those who advance it.

Note that this is NOT an article about IQ differences, it is merely used as a convenient example to illustrate differences in two different ways of approaching the problem.  But I did think the author did something fun towards the end of the piece -- the author seems to argue that the tribal positions on this genetics issue(and I presume on other things) is almost arbitrary by running a thought experiment of reversing the tribal positions: might re-imagine liberals embracing genetic differences and supporting their position in the following way:

IQ differences are purely genetic, a matter of luck for which neither the individual nor his community bears any responsibility. We should be generous with welfare and assistance towards those who lost out in the genetic lottery, just as we are towards the sick and disabled. Conservatives who argue that the IQ differences are ‘man-made’ are looking to shift the blame to the victims and excuse their own bigotry towards the least privileged.

And the conservative response:

IQ differences are purely environmental. According to evidence, the main environmental difference among blacks and whites is culture. We therefore need to replace the multicultural free-for-all that is hurting American children with traditional American family values, and limit immigration from countries with low-IQ cultures. We need to promote monogamy by cutting support for single mothers. We should probably outlaw hip-hop music too, just in case rap is what lowers black IQ.

This may look outlandish to you but it does not to me.  When I grew up in the 1970's, Republicans considered themselves a pro-business party (not to be confused with free market) and Democrats were much more dominated with labor and union concerns.  In those days, Republicans were much more pro-immigration, because it brought in cheap labor for its business supporters, and Democrats were much more anti-immigration, because it created low-wage competition for its union supporters.  I have seen the tribes reverse positions on a number of issues in my lifetime.

A Little Bit of Model Railroad Progress

It has been a while since I blogged on my model railroad but unfortunately real life intervened and cruelly prevented me from working on my hobby for a while.  I have been making progress recently and thought I would post what I have been working on.  Believe it or not, there are one or two readers who actually write me for updates.

One thing I can do even when I am busy is make progress hand building turnouts.  These are some small #5 turnouts built with code 40 rail (perfect for eyesight destruction).  No way I could to this without the fabulous Fast Tracks construction jigs.

I built the main line out of code 55 flex track and am hand-building all the sidings and branch lines with code 40.  This lets me get the main line up and running fast while still being able to hand build some track, often the track closest to the front of the layout.  Below is the code 55 flex track main line after some test painting.  The one thing I do not like about flex track is that it always looks so uniform.  Even on good mainline track the rail and ties vary a lot in color, so I spray paint a base coat and use brushes to hand paint individual tiles and rail sections different colors to get some variation.

The switch in the foreground below is the first code 40 hand built track I have put on the layout.  It is a bit of a pain to join code 55 to code 40, so I wanted to experiment some.  Eventually I inserted a code 55 rail joiner in the mainline track, and the crushed the other end flat and soldered the code 40 rail to the top.  With some trial and error, this got both the rail tops at the same height.  I really love the look of real wood ties and the color variation you get naturally, which I accentuate some.

The biggest recent progress was I painted the back drop.  Since this is Phoenix I wanted some low haze but no clouds, so I used the tried and true method of blue at the top of the background and white and the bottom and blending them in between.  Came out pretty well, though this picture does not really do it justice because the lighting is not quite right yet.  I need to try it with a better camera.   The biggest problem I had was a classic Phoenix problem where the paint was drying too fast.  One of the hardest problems is that the Phoenix sky on certain days is so deep, deep blue that it looks unrealistic, even in real life, so I did not use the actual color for the top of sky that I see from my front yard, I backed it down a bit.


Oh, you can also see that I have put in the lighting.  As an experiment I used led light strings.  This avoids the directional shadow problem but I am not totally convinced I am happy with it yet.  I also have fluorescent lights installed for night effects, though I still struggle with the OBA / fluorescent paper problem here.  Anyone who has a source for matte (not gloss) OBA-free photo paper that is not too think (I often have to bend and shape the paper for projects) can certainly email me.   Paper models like these are more popular in the UK than in the US, but I have come to really like them in certain applications.  They just don't look good in night scenes when brick walls glow under black light.

In the plan I have locations vaguely blocked out for industries but I had not yet tested the sites against actual buildings I have in inventory or would like to put in.  Below I have a half-built grain elevator I was testing locations for.

That's it for now.  I am starting my big building project which is a scale refinery.  We actually don't have a refinery in Phoenix (closest is Yuma I think) but I worked in one years ago and love the look of them, especially lighted at night, so dammit I am going to have one.

This Would Be Freaking Awesome

The Union Pacific Railroad is attempting to restore and run a 4-8-8-4 Big Boy locomotive next year.  Seeing live steam locomotives run is a rare but fabulous spectacle, but most of what is still running is WAY smaller than this locomotive they are restoring.  I am not sure most people have a sense of scale for these beasts.  I chose the picture below because it has people in them for scale.

Business Lesson From the Vietnam War

I just finished watching the PBS series on the Vietnam War and found the experience powerful and educational.  My only disappointment was that every soldier they interviewed and followed through the war ended up in the anti-war movement (or in the case of one POW, his wife did).  I agree with their perspective, and see the whole war as a giant waste, but unlike most people on campus nowadays, I like hearing from people with points of view that are different than mine.  I get nervous just having my expectations reinforced.  Surely there are veterans who thought the war was winnable and the US largely honorable -- I know some of these folks -- but we really do not get to hear their voices very often.   But with this proviso, the series was terrific.

One of the most important -- and hardest -- lessons of business is to think at the margin.  Perhaps the toughest corollary to this is: Sunk costs are sunk.  I don't care how much we have already spent on that factory -- that money is gone -- if it is going to take another $100 million to finish, are the benefits of the factory worth that $100 million? If not let's stop work on it no matter how much has already been spent.   I have worked to teach this to my wife.  I don't care how much the tickets for the show on Sunday night cost -- that money is gone -- isthe enjoyment we expect to get from the show worth the remaining costs we face (getting in the car, fighting for parking, etc)?

Transit projects thrive on the sunk cost fallacy.  Agencies explicitly try to get some money, spend it, and then claim the rest of the money has to be spent because we have already "invested so much".  Here is an example:

But what is really amazing is that Chicago embarked on building a $320 million downtown station for the project without even a plan for the rest of the line -- no design, no route, no land acquisition, no appropriation, no cost estimate, nothing.  There are currently tracks running near the station to the airport, but there are no passing sidings on these tracks, making it impossible for express and local trains to share the same track.  The express service idea would either require an extensive rebuilding of the entire current line using signaling and switching technologies that may not (according to Daley himself) even exist, or it requires an entirely new line cut through some of the densest urban environments in the country.  Even this critical decision on basic approach was not made before they started construction on the station, and in fact still has not been made.

Though the article does not mention it, this strikes me as a typical commuter rail strategy -- make some kind of toe-in-the-water investment on a less-than-critical-mass part of the system, and then use that as leverage with voters to approve funding so that the original investment will not be orphaned.

It amazes me that no politician in California has shut down the insane California high speed rail project, but I will bet you any amount of money that when they do the rail agency will be screaming that it can't be shut down because they have already spent billions of dollars and shutting them down would waste all that money.  Sorry, but that money has already been wasted, the point is to avoid all the additional money that will be wasted going forward.

The government decision-making around the Vietnam War seemed like nothing so much as a series of sunk cost fallacies.  We can't give up now, not after so many brave men have already died!  That last sentence could be the title of about half the episodes.   But sunk costs shouldn't matter in a go-forward decision -- but they do matter to ego and prestige.  Politicians talk about things like "the nation's honor" but what really matters at its heart is their own ego and perception.  Abandoning sunk costs, for the real humans making decisions (whether Presidents or CEOs) is about confessing past errors of judgment.  Its a hard thing to do, so hard a lot of extra people had to die in Vietnam before it could happen.  I can't find a transcript but Kissinger had some amazing quotes in Episode 9 that pretty baldly outline this problem.



When You Relax Accountability, Bad Things Happen

For years I have been critical of US Forest Service (USFS) fire suppression operations.  For those who are not familiar, because they own so much land in the very dry west, the US Forest Service is -- by far -- the largest firefighting agency in the country.  It spends billions of dollars a year on firefighting and employs tens of thousands for workers in doing so -- some specifically hired for fire, many others detailed from regular jobs to specific fires.  Basically, in the late summer, Forest Service offices are practically cleared out as everyone is off on fire detail, and those who are still around have no money to spend because it all has been swept into fire.

It is hard to publicly criticize firefighting operations for many of the same reasons that it is hard to criticize the police -- people will say that they are so brave and perform an indispensible service.   Granted.  But the USFS process for managing and funding firefighting is totally broken.  This is not solely the agency's fault -- Congress shares a lot of the blame.  But whatever the cause, firefighting has become (in my observation of the agency) a financial accountability-free zone.  There are no budgets for fire.  No competitive bidding for services and products.   All the rules are lifted, and the agency simply spends like crazy.  People have made small fortunes inventing things fire crews might need (e.g. portable shower buildings) and selling or renting them to the USFS for huge sums of money.  And USFS employees don't care because they understand it to be an environment where the normal rules do not apply.

And the USFS employees love it.  The structure and schedules and requirements of their day jobs are lifted, with little danger except for a very few in the front line crews.  I have always described what I have seen as a cross between a summer camp and a fraternity outing.

And perhaps I was more correct than I knew.  Apparently, once the tone is set for a low-accountability environment -- even if the relaxed rules were really only supposed to apply narrowly to financial issues -- it can spread to other behaviors.

Michaela Myers said she was first groped by her supervisor after a crew pizza party last summer, shortly after starting a new job as a firefighter with the U.S. Forest Service. She was 22 and excited about the job. She had worked out diligently to prepare for the season, running and hiking with a heavy pack. She is from the Pacific Northwest, and had always loved the outdoors and a challenge.

She remembers her supervisor, a Forest Service veteran, offering her beers at a crew member’s house after dinner. He told her he was glad she was on the crew because she was “sexy” and had “a nice ass,” she said. According to her account, he led her to a couch, rubbed her butt as she sat down, and slid his hand between her legs. Myers was shocked and upset, but didn’t stop him. She had heard from other crew members that this manager could fly off the handle, and didn’t want to make a scene.

“You don’t feel like you can say ‘no’ loudly to your supervisor,” she said. “I keep looking back on it and wishing I could have just punched him or something.”

According to Myers, the harassment and groping continued for the rest of the summer. When she confided in a fellow crew member, he told her this was an unfortunate reality for a female firefighter. She had a choice, she recalls him saying: report it and face retaliation, or do nothing and stay in fire.

Updated:  The PBS report was changed after I first posted it, and I have edited the quote to match the current text.  PBS wrote below their article this update: "This story has been updated. The name of the Forest Service supervisor in Oregon has been removed. We stand by our reporting and thank the multiple women who went public for this story."

OK, So Why Won't Government Employees Admit Even the Smallest Error?

I got some attention with a post the other day about an example of something I see constantly -- government employees unwilling to admit even the smallest error.

One reason is that even as someone who runs a company that partners with government agencies frequently, I am still an outsider and a member of the general public.  And government agencies train everyone in their organizations never to give any information to the public that is not fully vetted and controlled.  Government agencies have had their training budgets slashed, but the one training everyone still gets (along with diversity training) is training on how to reveal (or really, not reveal) information to the public.

But I think there is a more important reason for this behavior, and it is one I want to spend a bit of time on in part because it is one of my favorite business topics: incentives.   There is nothing in an organization that is harder to get right than incentives.  And this is doubly true of government agencies because most government agencies don't have, or don't choose to measure, any output variables.

What do I mean by output variables?  Organizations tend to measure both what I call input and output variables.   Let's consider a sales person.  An output variable is a business result, e.g. number of units sold, number of new customers added, revenue of products or services sold, gross margin of products sold, satisfaction rating from customers.  An input variable is a measure of how well process steps leading to that sale were completed, e.g. percent conformance to pricing guidelines, number of sales calls made, number of quotes produced.  If well selected, input variables tend to lead to the output variables but they don't in themselves pay the rent.

Because I am most familiar with them, I am going to use government recreation agencies like a state parks organization as an example.  I have yet to find a government recreation agency that measures its employees primarily on output variables, e.g. customer satisfaction of park visitors, fee revenue collected at park, net income of the park, change in deferred maintenance accounts, etc.  Instead their metrics are -- at best -- based on conformance to process, e.g. was the budget completed on time, was the planning process done right, was all necessary reporting done on time, etc.  I say "at best" because most government agencies have no formal performance metrics at all.  And this is where I get to my favorite incentives / metrics topic of all -- informal performance metrics.

An organization never has no performance metrics at all. They may have no formal, written standards, but every organization has to evaluate and promote talent.  If there are no formal standards, there have to be some informal or unwritten standards that are applied.  And I would argue from my experience that even when formal standards do exist, there may still be informal standards that are more important.

One informal incentive that exists naturally in almost every organization is "don't get caught in a mistake."  On its face this is one of those incentives that seem good -- sure, I would love to have an organization where no one makes mistakes.   But many companies have found that in competitive markets, allowing this informal incentive to become powerful can spell a company's doom.  It has at least two negative effects:  it limits honest communications, because people start hiding their mistakes which in turn keeps information from the rest of the organization that may need it; and it limits risk-taking, which is necessary for most companies to survive in competitive markets, because almost everything a company does to improve contains risks.  Powerful formal performance systems are one way to limit counterproductive informal incentives like this.  But many companies also put a lot of work into their communications and culture to help employees be more open to taking risks and making mistakes.   A vast portion of my communication with my own managers and employees are on this topic.  We try to make very clear the subset of mistakes that are career fatal and where we DO want risk aversion (e.g. racism, harassment, abuse, etc) and treat everything else as a learning exercise.  My response to one of my manager's mistakes is very likely to be, "sorry, that was my fault, I did a bad job of training you (or preparing you, or whatever) for that issue."

Recognize though that all of these corporate steps to head off problems with the informal incentive "don't get caught making a mistake" have largely been lessons of the marketplace.  Time warp back to the 1950's when American companies were fat and happy and not yet really faced with scrappy global competition, and you might well have found highly risk-adverse cultures where people were afraid of being caught in a mistake.  I do not have experience at companies like GM, but I would not be surprised at all to learn that risk aversion dominated the culture and that faced with market extinction, it has spent much of the time since the 1970's trying to purge this risk aversion from its culture.

But in large part, a government organization doesn't face these market corrective forces.  If an agency becomes weak and senescent, it does not get competed into oblivion, it simply goes on and on.  Maybe it gets more tax money to make up for its inefficiency, or maybe it cuts somewhere (such as deferred maintenance in public parks) to make ends meet.   Which means that in most government agencies I have worked with, informal incentives -- particularly "don't get caught in a mistake" -- are extremely powerful.

Most people are familiar with the fact that the default government answer to anything new is "No".  But did you ever wonder why?  I have heard a lot of folks say that it is because government employees are jerks or lazy under-performers or have evil intentions.  But that is really not the case.  With just a couple of small exceptions**, people who enter government are no different than people who enter private organizations.  If they do things that seem bad, it is not because they are bad people but because their information and incentives cause them to do things we perceive as bad.  Take the case of saying "No".  Without any output metrics, most government employees have no incentive to say "yes".  There is no incentive to, say, generate 20% more visitor revenue in parks so there is no incentive to approve new visitor facilities or services that might generate that revenue.  And there is every reason so say "no".  "No" is almost always safe, particularly if one does not actually say "No" but instead say something like, "well, that is an interesting idea but we need to do X, Y, and Z intensive 20-year studies first."  There is virtually no way for any government employee to get caught in a mistake saying that.  So that is the answer most of us get from the government.

Coming back to the original question, I hope this helps explain why agency employees who don't admit error act the way they do -- they are not bad people, they are normal people reacting to a bad incentive.   Imagine in my business if I, say, reversed two numbers on one of the 25 state and local sales tax returns we file each month.  When pointed out to me, I have no problem admitting the mistake because I know it is easily correctable and that it has little to do with my true performance.  But in the government world, things are completely different.  They don't have output variables.  Executives can have full successful careers running parks where the infrastructure is allowed to fall apart, the headquarters become bloated, and visitation stagnates.  But they can be fired for getting something wrong in the process.  Not very often, but just enough pour encourager les autres, particularly in an environment where there are really no other formal metrics to override this fear.


**postscript:  I have found two ways that people who enter government are different from people who enter private business  (people are more different at the end of their careers after they have been shaped by the incentives and culture for a long period of time, but I am talking about upon entry into work).  First, people who enter government tend to prioritize security (e.g. good benefits, difficult to fire) over other aspects of employment.  Note that this just tends to reinforce the risk aversion to making or admitting a mistake even more.  Second, people who enter government tend to be more confident of government solutions to problems and more skeptical of private solutions than people who enter private business.  This latter is another reason why my company, that offers private solutions for traditional government functions, hears "no" a lot.


On the Short-Sightedness of Politicians

The Republicans are running around counting coup, crowing that the Democrats totally caved on the continuing resolution and talking about how much bigger their political cojones are than the Democrats', or something.

My question is -- given that this entire negotiation has to happen again in 3 weeks -- how does this make even a small bit of sense?  All they are doing is firing up the Democrats to fight harder the next time this happens which is ... in 3 freaking weeks.  This is like the Cleveland Browns publicly calling out Tom Brady for being overrated just before their next game.  Are politicians so desperate to win one 12-hour news cycle that they are willing to bollix up the playing field for the next battle?

My First and Last Marathon: After-Action Report

I achieved my goal and completed my first (and last) marathon on Sunday, roughly in the time I expected.  I wasn't going to actually discuss the time (to people who ask my time I usually answer "daytime"), but upon reflection I think it would be good to do so to encourage others who might be slow but considering running a marathon.

I ran the race from first to last almost dead-on 13 minutes a mile.  That is pretty damn slow, even for an amateur, but for me given I was suffering from osteo-arthritis in both knees and pretty bad plantar fasciitis in my right foot, it was about what I expected.  I was more proud that I kept on pace for the whole 26.2 miles -- my second 13 miles was 1 minute faster than my first 13, and my last mile was faster than the first.  This was a big change from half-marathons I have run in the past when I pretty much died in the last 20% of the race.

The real difference was Galloway's run-walk-run method.  I used 3-minute cycles where I would run at about 10-1/2 to 11 minute mile pace for 2 minutes and then walk for 1 minute.  I stuck with the program for the whole race, and as a result I was passing a lot of people in the last few miles who passed me in the first few.  At one low point around mile ten a 13-year-old girl in a wonder woman outfit zoomed past me, but I ran her down around mile 24 and beat her to the finish line.  A very satisfying triumph.

In terms of managing my body problems, there were surprising positives and negatives.  The cortisone shots I had two weeks before the race on my knees worked fabulously and my knees were never an issue.  My plantar fasciitis was mostly kept in check by the arch support I was wearing, though it hurt like bloody hell the next morning when I woke up.  I never did find the perfect solution to my underlapping toe and I had to stop twice to take my shoe off and re-tape my toes.  I did not have the hunger pangs I experienced on earlier long runs -- the carbo loading for several days in advance really helped and I ate two of these on the way and they were a surprisingly good food for the purpose.  The real problem I had in the last 4-5 miles was that my back started to really hurt.  Oh, and I also had to resist temptation as I ran past several frozen margarita stands in the last 2 miles (though at the finish I saw a fair number of folks had stopped and bought a cocktail for the last mile).

That last point brings me to some encouragement for those thinking about doing this but who are intimidated by being too slow.  It took me over 5-1/2 hours to finish and I finished in the top half of all finishers and the top half of all men.  I was something like finisher 9,500 out of 20,000.  People were still crossing the finish line 2 hours after I finished.  Oddly, the only subgroup I did not finish in the top half of  were men 55-60, as there seems to be an odd dynamic in these distance races such that there are not very many older folks, but the ones that are there are very serious and on something like their 50th marathon.

Some of this prevalence of slow runners is due to the fact it is a Disney marathon and you get a certain crowd for RunDisney events, but I wouldn't be surprised if the same kind of numbers did not obtain in races like the PF Changs.  In fact, I can't recommend the Disney races enough.  They are well-organized, low-key, and full of interesting distractions along the way such as characters and bands and of course running through theme parks.  And the medals are way better at Disney than other amateur races, and you get the fun of many runners in costume.  In this race there is even a tradition of having a roller coaster in operation (Expedition Everest) at the halfway point for runners who can jump on the coaster for a ride and then jump back off to finish the race.

Postscript:  The one problem with the Disney races is that they start at 5:30 AM, though my corral seldom gets to the start line until about 6:00.  In this race, the temperature at the start was about 40F, which is super cold for this Arizona boy, and was about 65F at the finish, which means I donated about 4 pieces of clothing along the way as I had to strip as I ran.

First, and Last, Marathon

About 18 months ago I was diagnosed with osteo-arthritis in both my knees, though of course I had been experiencing some pain before that.  The condition has become increasingly irritating not just because of the knee pain, but because the pain leads to a second condition called a Bakers Cyst (also known as water on the knee) that adds new pains in the back of both my upper and lower legs.

For years my exercise of choice has been running.  I have run in many of the world's cities (except for Bangkok -- only a crazy person would run the streets there) and find the experience synergistic -- the new sights keeps me from being bored in my runs and the running helps me see details of a city I might have missed.  I am not really competitive, but I have run four or five half-marathons and a number of shorter races.

It has become clear I have to give this all up.  So I decided to go out with a bang, and run my first and last marathon, which will be January 7 at Disneyworld (I love the Disney marathons because the vibe is pretty chill, there are lots of fun things to look at as you run through the parks and past characters and bands, and the medals are really nice).  I usually run in costume for the Disney races but I think not for this race -- I will be shedding every pound;  I am considering cutting off the ends of my shoelaces to save weight 😉

The big event comes in the next few weeks when my doctor is going to shoot me up with cortisone in each knee and drain my Bakers cysts.  From past experience, this will help a ton.  Even without the cortisone I have done a couple of 16-18 mile runs in addition to my daily running of 6-ish miles so I am fairly sure I will make it.

The first question I always get is what time am I shooting for.  Timing for my distance race performances is generally by google calendar.   I did my last half in around 2:30 so extrapolating that I will likely be far behind Oprah's time of 4:29, but I think my ego can survive.

Once the race is over, I have already found my new preferred form of excercise.  The eliptical machine feels good with my knees but I hate excercising indoors.  Biking can be fun but my *ss always falls asleep.  So I bought one of these bad boys and am already having a lot of fun with it.  Super expensive, but hopefully prices will come down if they get popular.

Politics, Peer Virtue-Signalling, And the Agency Problem

The other day Megan McArdle wrote an article entitled "The CFPB Fight Is Completely Pointless...Why is either side spending political capital for brief control over this agency?"  In short, the the folks on the Left who mostly populate the Elizabeth Warren / Barrack Obama created agency argue that deputy director Leandra English should become acting director after the current director stepped down.  President Trump argues he should be able to appoint the acting director (as the President would for any other agency) and appointed CFPB critic Mick Mulvaney.

My heart thrills as readily as anyone’s to the sight of a doomed soldier playing Horatius at the Bridge. But at least Horatius Cocles had a purpose: He secured an orderly retreat, allowing the army to live to fight another day. What, exactly, do [Leandra] English and her supporters hope to achieve, other than a spectacle for wonky Washingtonians?

The most they can get is a brief period of business as usual, during which it will be hard to enact binding decisions because the legitimacy of her leadership will be in doubt. At worst, they get a humiliating smackdown from the courts, cementing their place in history as elitists who thought they were above petty restraints like elections or the Constitution.

And in the broader political picture, if you think Mulvaney is a bad, dangerous man who will privilege the interests of rich bankers over those of ordinary Americans, you’d probably rather have him running the CFPB than in his current job -- overseeing the entire federal budget. Even if English wins and sends him back to OMB, this seems like a Pyrrhic victory for the left.

While most everyone else on the Internet seems to be able to automatically intuit everyone else's internal motivations, I don't claim to have that ability.  So I will offer one possible motive why Leandra English might see personal benefit from this otherwise pointless struggle.

It is no news to say that the US has arrayed itself into multiple tribes that hate each other.  The election of President Trump has only accelerated this.  Trump is so disliked by those on the Left that folks on the Left can score major points with their tribe by publicly opposing him, even when their effort is doomed and ultimately pointless.   Wendy Davis is a good example of a politician who greatly increased her status in the Left-tribe with an ultimately doomed filibuster of an abortion bill in Texas (so much so that a hagiographic movie is being made about her).  I have wondered whether several of the judges who have temporarily halted controversial but probably legal executive actions by Trump were not motivated as much by playing to the audience in their tribe as they were by making a thoughtful legal decision.

Which brings me to the agency problem, which Wikipedia defines thus:

The principal–agent problem, in political science and economics, (also known as agency dilemma or the agency problem) occurs when one person or entity (the "agent") is able to make decisions on behalf of, or that impact, another person or entity: the "principal".[1] This dilemma exists in circumstances where agents are motivated to act in their own best interests, which are contrary to those of their principals, and is an example of moral hazard.

Common examples of this relationship include corporate management (agent) and shareholders (principal), politicians (agent) and voters (principal), or brokers (agent) and markets (buyers and sellers, principals).[2] Consider a legal client (the principal) wondering whether their lawyer (the agent) is recommending protracted legal proceedings because it is truly necessary for the client's well being, or because it will generate income for the lawyer. In fact the problem can arise in almost any context where one party is being paid by another to do something where the agent has a small or nonexistent share in the outcome, whether in formal employment or a negotiated deal such as paying for household jobs or car repairs

I think too often people define the agency problem only about economic incentives, e.g. my broker only recommends the stocks that pay him the highest commission.  But most of us are motivated by many things in addition to money.

Consider the example of a media conglomerate with multiple cable channels.  The managers of this media conglomerate are mostly of the Left.  One of their channels is called the shooting channel and focuses on gun reviews and the shooting sports.  The channel needs a new president, and it hires Hannah Progressive, either internally or from another successful media company.  Hannah is a talented media person with a proven track record of building cable channels and a perfect fit in every way except that she is disdainful of the shooting sports and groups like the NRA.  But let's say that Hannah is a true professional and can put that aside.  But what may be harder to put aside is the reaction of her peers.  She is going to get teased, maybe even bullied, by folks in her social circles.  Her peers are going to look down on her, even if she is successful (maybe especially if she is successful).  There is going to be tremendous pressure on her, both from her social circle as well as well as when she thinks about future job prospects an the industry dominated by the Left, to virtue-signal to others on the Left.  She could be tempted to shift content, alliances, advertisers,etc. in ways that signal virtue to her tribe but might alienate her current viewers and actually hurt the financial results of her company.

I frequently think about this in the context of how university presidents respond to protests, or how the NFL does so, or when seeing ESPN programming changes.  I have even seen it with programmers, working harder to impress their peers with the elegance of their code than to try to actually write things that serve the company and the customer.

Elon Musk Made the Kessel Run in Less Than Twelve Parsecs

I had to laugh at the stories the other day on the battery backup system Elon Musk and Tesla made for the Australian Power grid:

Tesla has completed its 100 megawatt Powerpack battery backup system in South Australia within 100 days (easily), as Elon Musk had promised. That means the company essentially won the "bet," and won't be on the hook for the entire cost of the project, estimated at $50 million. More importantly, it means that some 30,000 homes in South Australia will have a power backup in case there's no breeze at the Hornsdale Wind Farm located about two hours from Adelaide.

A megawatt is a measure of energy production or transmission rate.  As such, it is a perfectly appropriate way to size the capacity of a power plant that is assumed to have a continuous supply of fuel.  However, it is an extremely odd way to size a battery.  A battery has a fixed energy storage capacity, which is generally measured in watt-hours (or some conversion thereof). For example a 10 Wh battery would provide 10 watts for an hour before running out, or 5 watts for 2 hours, etc.  It is not clear if this is just a typo, that they really mean 100MWh, or if 100 megawatts is the peak discharge rate and they are being silent on exactly how long this lasts (ie how long can those 30,000 homes be powered?)  I checked the first 10 sources in a Google search and not a single media outlet that routinely chastises climate skeptics for being anti-science seems to have questioned the oddball and nearly meaningless 100MW figure.

I was going to compare the number on energy storage here and show that you could actually generate electricity from gas, not just store it, for well less than this.  But it is sort of hard to make the calculation when they don't get the units right.

By the way, if this is required to make wind power work, will we start seeing wind advocates building in $50 million batteries when they present their economics?  Any bets?

Terrible Symbolism

I know that many of my readers have more skepticism than I about open immigration.  We will leave that for another day.  But I am not sure how any American who prides themselves on American exceptionalism and our leading role in the world promoting freedom wouldn't cringe at seeing these pictures.  What a terrible image they will make running for thousands of unbroken miles.

I am not sure why we are going through all this engineering effort when we could just be borrowing from the experts:

Postscript:  Congrats to our local entrants from the Phoenix area firm that submitted by far t

he ugliest design.

Update:  Just to confirm, based on the comments:  Yes, I do not see an ethical difference between stopping people from coming in and stopping them from going out.    Others of you do see a difference, and we will have to disagree.  I don't think the Berlin Wall would have shifted from evil to OK had it been built by the West Germans instead to keep communists bottled up on their side.  I know folks love to use the home analogy, that it is OK to fence folks out of your home but a federal crime to fence them in.  But I have always thought equating a whole country to private property is a bad analogy.  Basically, such an assumption rests on socialist community property ownership assumptions.   A Mexican man wants to drive a car he owns, using gas he buys along the highway, along a road paid for with the gas taxes he just paid, to take a job at my company I freely offer him and rent an apartment I freely lease to him.  Voting, government benefits, holding office -- we don't necessarily have an obligation to offer any of those things, at least initially.  But I don't think it is ethical to erect this wall in his path to exercising free exchange.

Why Is It So Hard To Get Even Smart People To Think Clearly on Electric Vehicle Efficiency?

A lot of people on Twitter get freaked out when they see football players kneeling for the national anthem, or detect obscure micro-agressions in some online statement.  When I venture onto Twitter, which I am still not sure is good for my mental health, I get freaked out by this:

My initial response on Twitter was "Of course they are if you leave out the efficiency of converting fuel to electricity".  I will explain this response more in this post.

It would be impossible to say that Eric Schmidt is not a smart guy or lacks technical training.  I'd like to think that he would quickly understand his error and say that he would have said it better when he has 280 characters.  But soooo many people make this mistake, including the folks who write the electric vehicle MPGe standards for the government, that it is worth explaining why Mr. Schmidt's statement, as written, is silly.

Let's first look at what the terms here mean.

  • When we say that electric motors are 97% efficient, we mean that the actual physical work produced per unit of time is 97% of the electrical power used by the motor, which equals the current flowing to the motor times its voltage.
  • When we say that the internal combustion engine is 45% efficient, we mean that the physical work we get out of the engine is 45% of the heat liberated from burning its fuel.

By the way, both these efficiency numbers are the top end of current technology running at an ideal speed and percentage load.  In real life, efficiencies of both are going to be much lower.  Of the two numbers, the efficiency number for internal combustion is probably the most generous -- for non-diesel engines in most cars I would be surprised if the actual efficiency was much higher than half this figure.  Even average electric motors will still be in the 80's.

Here is the problem with what he tweeted

The problem with Schmidt's statement on its face is that he is comparing apples and oranges -- he has left out the efficiency in actually producing the electricity.  And for the vast, vast majority of the country, the marginal fuel -- the fuel providing the electricity for the next increment of load -- is going to be natural gas or coal.  His numbers leave out that conversion step, so let's add it in.

Actual power plants, depending on their age and use, have a wide range of efficiency numbers.  For example, a big combined cycle plan is more efficient that a gas turbine, but a gas turbine is useful because it can be started and stopped really quickly to react to changes in load.  Schmidt used leading-edge efficiency numbers so I will do the same.  For a coal plant the best numbers are in the high forties.  For a gas plant, this can reach into the 50's (this site says 60% but that is the highest I have ever seen).  We will take 50% as a reasonable number for a very very efficient power plant.  Power plants, by the way, since they tend to run constantly at ideal speeds and loads can get much closer to their ideal efficiency in real life than can, say, internal combustion engines.

After the electricity is produced, we have to take into account line and transformer losses (and in the case of electric cars the battery charging losses).  This obviously varies a lot but I have always used a figure of 10% losses so a 90% efficiency number.

Taking these numbers, let's convert the 97% efficiency number for electric motors to an efficiency number all the way back to the fuel so it is apples to apples with internal combustion.  We take 97% times 90% transmission efficiency times 50% electricity production efficiency equals 43.6%.  This is actually less than his 45% figure.  By his own numbers, the electric motor is worse, though I think in reality with realistic efficiency numbers rather than best-possible numbers the electric motor would look better.   The hard step where one is really fighting the laws of thermodynamics is the conversion of heat to work or electricity.  So it is amazing that a tiny power plant in your car can even be in the ballpark of giant optimized multi-stage power plants.

Here is why electric motor efficiency is almost irrelevant to getting rid of fossil fuels

Very efficient electric motors are necessary to moving to a non-fossil fuel economy, but not because of small increments in efficiency.  The reason is that large parts of our energy-using technology, mostly vehicles, run on a liquid fuel directly and this distribution for the fuel is already in place.  To replace this liquid fuel distribution system with something else is really expensive.  But there does exist one other energy distribution system that has already been built out -- for electricity.  So having efficient electric motors allows use of non-gasoline energy sources if those sources can be turned into electricity.  For example, there are real advantages to running vehicles on CNG, but there is no distribution system for that and so its use has been limited to large fleets (like city busses) where they can build their own fueling station.  But electric cars can use electricity from natural gas, as well as solar and wind of course that have no other distribution method other than by electricity.

The problem with all this is that most of the barriers to using electricity in more applications are not related to motor efficiency.  For vehicles, the problem is in energy storage density.  Many different approaches to powering automobiles were tried in the early days, including electric and steam powered cars.  The main reason, I think, that gasoline won out was due to energy storage density.  15 gallons of gasoline weighs 90 pounds and takes up 2 cubic feet.  This will carry a 40 mpg car 600 miles.   The Tesla Model S  85kwh battery pack weighs 1200 pounds and will carry the car 265 miles (from this article the cells themselves occupy about 4 cubic feet if packed perfectly but in this video the whole pack looks much larger).  We can see that even with what Musk claims is twice the energy density of other batteries, the Tesla gets  0.22 miles per pound of fuel/battery while the regular car can get 6.7.  More than an order of magnitude, that is simply an enormous difference, and explains the continued existence of internal combustion engines much better than electric motor inefficiencies.

And here is why electric vehicle equivalent MPG standards are still screwed up

I don't really have the energy to write about this again, but because these issues are so closely related I will quote myself from the past.  Suffice it to say that after years of development, the EPA made nearly the exact same mistake as did Mr. Schmidt's tweet.  This Despite the fact that the agency had already developed an accurate methodology and then abandoned it for a flawed methodology that produced inflated numbers for electric vehicles.  There is more than one way for the government to subsidize electric vehicles!

The Fisker Karma electric car, developed mainly with your tax money so that a bunch of rich VC's wouldn't have to risk any real money, has rolled out with an nominal EPA MPGe of 52 in all electric mode (we will ignore the gasoline engine for this analysis).

Not bad?  Unfortunately, it's a sham.  This figure is calculated using the grossly flawed EPA process that substantially underestimates the amount of fossil fuels required to power the electric car, as I showed in great depth in an earlier article.  In short, the EPA methodology leaves out, among other things, the conversion efficiency in generating the electricity from fossil fuels in the first place [by assuming perfect conversion of the potential energy in the fuel to electricity, the EPA is actually breaking the 2nd law of thermodynamics].

In the Clinton administration, the Department of Energy (DOE) created a far superior well to wheels MPGe metric that honestly compares the typical fossil fuel use of an electric vs. gasoline car, using real-world power plant efficiencies and fuel mixes to figure out how much fuel is used to produce the electricity that goes into the electric car.

As I calculated in my earlier Forbes article, one needs to multiply the EPA MPGe by .365 to get a number that truly compares fossil fuel use of an electric car with a traditional gasoline engine car on an apples to apples basis.  In the case of the Fisker Karma, we get a true MPGe of 19.  This makes it worse than even the city rating of a Ford Explorer SUV.

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.

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!


Towards Better, More Reliable Home Wifi -- Ditch the Products Meant for the Home

For years I have been struggling with a variety of commercial home wifi products.  I have been plagued by issues -- either they had poor range or they had to be reset every day or so or they did not play well with various extenders I needed to cover my house.  I have a one story house that sort of sprawls all over the place and is hard to cover, particularly since our internet connection to Cox Cable is all the way at one end of the house and some of the house has a cinderblock core just to make signal transmission even harder.

So my company had a contractor wiring up a customer location we manage and they were using a commercial product from Ubiquiti Networks.  I wondered why a commercial product would not work just as well in my home.  This Ars Technica article discussed how much better he thought the commercial products from Ubiquiti were than most consumer grade products.  I figured maybe the problem would be cost, but perusing the Unifi product line on Amazon, it seemed priced a bit higher than consumer products but not unreasonably so (also compare the Amazon star ratings for the Unifi products to consumer alternatives -- you will not see ratings this high).

I was a little intimidated that the setup would be hard but it was manageable if you know even a little bit about network addresses and how they work. And this video is absolutely fabulous -- I can tell you that if you follow along with this guy your system will work at the end of it.  Once it was running, the software is way easier to navigate than my old consumer products.

So several months ago I installed a Unifi system in my house with 6 access points (including on my patio and in my garage), a security gateway (the router, I think), a main switch, a couple of satellite switches, and the cloudkey which helps manage the whole thing.  I paid extra for the PoE switches (power over ethernet) so I could run the access points without having to plug them into an outlet and so in the future I could add PoE video.

What I like:

  • Reasonable cost
  • Setup not difficult if you follow the video
  • Rock-solid reliability
  • It reaches everywhere, with a single SSID so it acts as one seamless large wifi zone.
  • Ability to access the system remotely to check on status
  • Access points work via PoE so they mount on the wall or ceiling really cleanly and look great
  • Really good information about my network, not only every device and its IP and status, but also its bandwidth use and exactly how it is connected in the network tree (ie via such and such switch).

The only problem I have had so far is a moderately arcane one that took me a while to diagnose.  I use this system with my Sonos music system and I have a number of Sonos boxes around the house.  Most of these are wired, and so do not use the Sonos wired peer-to-peer mesh.  However, the Sonos boxes were trying to create wireless network amongst themselves that essentially created loops in my network where storms of traffic ran in circles.

This is where I had a learning opportunity.  Apparently network equipment has something called Spanning Tree Protocol (STP).  Basically through a priority and cost system, it allows you to specify preferred pathways and prevent data from looping.  But Sonos uses a really old version of this that does not play well with Unifi.  I will say that this is not just a Unifi problem as I had this exact same problem at another location with Sonos and the Google mesh wifi system.  At least with Unifi, there were STP settings I could play with (Google mesh wifi is a nice little plug and play product but forget it if you want to tweak anything at all).   As is usual nowadays for any known problem, the Internet has a bunch of articles on Unifi and Sonos compatibility issues.  Eventually by tweaking the STP priorities of the Unifi switches and simply turning off the wifi in Sonos units where I did not need the mesh wifi capability (a nearly undocumented feature that is revealed here) I got it all playing nice together.   I will add that though Sonos is a product I love (because my wife can actually reliably use it), their tech support never identified this problem -- they said they saw evidence of loops but would not admit that the Sonos peer-to-peer networking was helping to cause them.

[Fill in Name of Government Program] Would Have Worked Had the Right Person Been Running It

I have disputed the meme in the post's title on many occasions.  For example:

  • No person running any government agency has access to the same information that millions of individuals might have in making decisions for themselves
  • No person running any government agency can create an optimal solution, because millions of citizens all have different values and make different tradeoffs, so an optimum for one is not going to be an optimum for many others
  • No person running any government agency has the right incentives to make good decisions.  They will always optimize for increasing the size and scope of their organization and signaling virtue over actually being virtuous.

But researchers have found yet another reason:  power causes brain damage

A spate of recent articles corroborate what I already suspected, that holding elected office is the neurological equivalent of getting kicked in the head by a donkey.

"Subjects under the influence of power," Dacher Keltner, a professor atUniversity of California, Berkeleyfound, "acted as if they had suffered a traumatic brain injury—becoming more impulsive, less risk-aware, and, crucially, less adept at seeing things from other people's point of view."

In other words, power turns people into sociopaths.

This isn't a huge surprise to the vast majority of us who rant about power on election day and every day afterward. Republicans and Democrats want power and scramble for it, like a football. Classical liberals see power more like Frodo's ring—a corrupting influence better chucked into a volcano. In light of recent studies we ought to consider it a bit more like a concussion.

Keltner, brought into the public spotlight through a recent piece in The Atlantic, likens the accruing of power to actual brain trauma: "My own research has found that people with power tend to behave like patients who have damaged their brain's orbitofrontal lobes (the region of the frontal lobes right behind the eye sockets), a condition that seems to cause overly impulsive and insensitive behavior. Thus the experience of power might be thought of as having someone open up your skull and take out that part of your brain so critical to empathy and socially-appropriate behavior."

Business Ethics Discussion Topic -- Public Accommodation and the Sex Offender Registry

My company operates campgrounds on public lands under contract with various public agencies.  Over the past several years, there has been a lot of discussion about public accommodation (e.g. can a private photographer choose not to serve a gay wedding).  This has never really been a big issue for me in my business, both due to my personal tolerance of just about anyone and the fact that we operate on public lands, which gives us an extra responsibility for broad accommodation.

Yesterday a sheriff's deputy in Arizona comes by one of the campgrounds we operate and gave a flyer to our manager.  It says that so-and-so, we will call him Mr. Smith, is in the area and is registered as a level 3 high-risk sex offender ("level 3 is the highest level and considered the highest risk to reoffense").  The deputy lets my folks know that it would be better not to do business with this guy.

Now personally, I have a lot of skepticism for the sex offender registry.  These lists sweep up a lot of people whose crimes are trivial (e.g. teenagers who had sex together or texted pictures with their girlfriends).  They assume high risk of recidivism without evidence.  Their existence dates back to a variety of molestation panics that were grossly exaggerated, and play on what I think are irrational public fears.  They can act as a substantial extra punishment beyond what they might have been charged with in court.  And they can be harsh, making it nearly impossible for someone to try to live a normal life in any community.

So the dilemma arises because this gentleman was staying in our campground at the time we received the notice.  My female manager wanted him out, as did most of my employees.  My guess is that if I polled the guests, most of them would want this guy out.  Because many people in a campground are in tents without any door or lock, they can feel particularly vulnerable.  I had never really thought about this much until we added cabins with locking doors to a campground and the early customers were disproportionately single women and women on their own with their kids.  They liked the lock.

My most telling problem is one of liability.  The state of Arizona has officially notified me that in the state's opinion this person is high-risk (whatever I might suspect his true risk may be).  If some incident were to happen, this notification would be exhibit one in the trial suing me into bankruptcy, arguing that I callously and knowingly allowed this risk to remain when I had it in my power to remove it.  I suppose one could argue that I probably always have people on the sex offender list in one of our campgrounds almost every day since there is no reasonable way to check on such things.  But in this case I have been notified in writing by an agent of the state that this person is considered high risk -- this knowledge gives me added responsibility.

I made my decision already, because part of the joy of running a 24/7/365 service business with 2.5 million customers a year is that I have many decisions like this and I have to make a choice and move on.  But I am curious what your decision would be.  Discuss.

Update:  wow, the discussion here is just tremendously useful.   The commenter who observed that I could probably be sued either way successfully captured the flavor of my frustrations trying to run a business in the modern legal environment.

It struck me later that I might not even have a decision to make.   The Forest Service which owns the land may not even allow such folks to be excluded from public lands.  If this is the case, I can get that in writing and do what I prefer (ie not participate in the further punishment of this gentleman) but have some coverage against legal liability in the future.

Me In My Actual Day Job

Given that this blog is a net financial loss to me, I do other things to put food on the table.  My actual day job, as some of you know, is running a company that privately operates public recreation areas.  I presented at a conference on new ideas for public recreation a couple weeks back in Washington.  This was my presentation:

All the presentations are grouped here.

Elon Musk, America's #1 Crony Capitalist

This is from a couple of years ago, so the numbers will only be larger:

Los Angeles entrepreneur Elon Musk has built a multibillion-dollar fortune running companies that make electric cars, sell solar panels and launch rockets into space.

And he's built those companies with the help of billions in government subsidies.

Tesla Motors Inc., SolarCity Corp. and Space Exploration Technologies Corp., known as SpaceX, together have benefited from an estimated $4.9 billion in government support, according to data compiled by The Times. The figure underscores a common theme running through his emerging empire: a public-private financing model underpinning long-shot start-ups.

"He definitely goes where there is government money," said Dan Dolev, an analyst at Jefferies Equity Research. "That's a great strategy, but the government will cut you off one day."

The figure compiled by The Times comprises a variety of government incentives, including grants, tax breaks, factory construction, discounted loans and environmental credits that Tesla can sell. It also includes tax credits and rebates to buyers of solar panels and electric cars.