Posts tagged ‘running’

Putting Neville Chamberlain in Historic Context

One of the hardest things to do in history is to read history in context, shutting out our foreknowledge of what is going to happen -- knowledge the players at the time did not have.

Apparently Neville Chamberlain is back in the public discourse, again raised from the dead as the boogeyman to scare us away from any insufficiently militaristic approach to international affairs.

There is no doubt that Neville Chamberlain sold out the Czechs at Munich, and the Munich agreement was shown to be a fraud on Hitler's part when he invaded the rest of Czechoslovakia just months later.  In retrospect, we can weep at the lost opportunity as we now know, but no one knew then, that Hitler's generals planned a coup against him that was undermined by the Munich agreement.

But all that being said, let's not forget the historic context.  World War I was a cataclysm for England and Europe.   It was probably the worst thing to happen to Europe since the black death.   And many learned folks at the time felt that this disaster had been avoidable (and many historians today might agree).  They felt that there had been too much rush to war, and too little diplomacy.  If someone like Britain had been more aggressive in dragging all the parties to the bargaining table in 1914, perhaps a European-wide war could have been avoided or at least contained to the Balkans.

There simply was no energy in 1938, no collective will to start another war.  Even in France, which arguably had the most to lose from a reinvigorated Germany, the country simply could not face another war.   As an illustration, one could argue that an even better and more logical time to "stop Hitler" occurred before Munich in March of 1936 when Hitler violated the Versailles Treaty and reoccupied the Rhineland with military forces.  France had every right to oppose this occupation, and Hitler's generals said later that their forces were so puny at the time that the French could have stopped them with a brigade and sent them running back across the Rhine.  And the French did nothing.

In addition, Britain and France had very little ability to do much about Hitler's ambitions in Eastern Europe anyway.  How were they going to get troops to the Sudetenland?  We saw later in Poland how little ability they had to do anything in Eastern Europe.

And finally, everyone was boxed in by having accepted Woodrow Wilson's formula of "self-determination of peoples."  Building the entire post-war realignment on this shoddy building block is what really led to disaster.  Emphasizing this essentially nationalist formulation as the fundamental moral principle of international relations -- rather than, say, the protection of individual rights of all peoples -- really empowered Hitler.  In the Saarland, in the Rhineland, in Austria, and in the Sudetenland, it lent him the moral high ground.  He was just fulfilling Wilson's formulation, wasn't he?  These were all majority-German lands coming home to Germany.

Postscript:  Years ago in my youth I used to excoriate FDR for caving into Stalin at Yalta, specifically in giving away most of Eastern Europe.  I still wish he hadn't given his moral authority and approval to the move, but even if we stood on the table and screamed at Stalin in opposition, what were we going to do?  Was there any appetite for extending the war?  Zero.  That is what folks who oppose the dropping of the atomic bombs on Japan get wrong in suggesting there were alternatives.  All those alternatives involved a longer war and more American deaths which no one wanted.

Government's Systematic Indifference to Capital Maintenance

There is one thing you can almost always assume with government managed land and infrastructure -- facilities will likely have a large deferred maintenance backlog.  Two examples:

These problems are ubiquitous.  You can point to any government parks agency, and most any transit agency, and you will find the same problems.

Why?  Well, I have not studied the problem in any academic sense, but I am face-to-face with the problem every day in parks.

Let's start with the reason that is not true -- that somehow budgets can't support capital maintenance.  I know for a fact that this is not true in parks.  We operate over 100 public parks and are totally up to date with all maintenance and have no deferred maintenance backlog.  This is despite the fact that we work with only the fees paid by visitors at the gate.  Government agencies typically supplement fees at the gate with an equal amount of tax money and still don't keep up with maintenance.  So the issue may be costs or priorities, but the money is there to keep parks fixed up.  (I am willing to believe the same is not true of large transit projects, but these projects are known in advance not to be able to cover their lifecycle costs with revenues, and simply hide that fact from taxpayers until it is too late.  Thus the sales tax increase that is being requested in Phoenix to keep our new light rail running).

I think the cause lies in a couple areas related to government incentives

  1. Legislatures never want to appropriate for capital maintenance.  If the legislature somehow has, say, $100 million money it can spend on infrastructure, their incentives are to use it to build new things rather than to keep the old things in repair (e.g. to extend a rail line rather than to keep the old one fixed).
  2. If you want to understand a government agency's behavior, the best rule of thumb is to assume that they are working to maximize the headcount and the payroll budget of their agency.  I know that sounds cynical, but if you do not understand an agency's position or priorities, try applying this test:  What would the agency be doing or supporting if it were trying to maximize its payroll.  You will find this explains a lot

To understand #2, you have to understand that the pay and benefits -- and perhaps most important of all -- the prestige of an agency's leaders is set by its headcount and budgets.  Also, there are many lobbying forces that are always trying to pressure an agency, but no group is more ever-present, more ubiquitous, and more vocal than its own staff.   Also, since cutting staff is politically always the hardest thing for legislators to do, shifting more of the agency's budget to staff costs helps protect the agency against legislative budget cuts.  Non-headcount expenses are raw meat for budget cutters, and the first thing to get swept.  By the way, this is not unique to public agencies -- the same occurs in corporations.   But corporations, unlike government agencies, face the discipline of markets that places a check on this tendency.

This means that agencies are loath to pay for the outside resources (contractors and materials) that are needed for capital maintenance projects out of their regular budgets.  When given the choice of repairing a bathroom at the cost of keeping a staff person, agencies will always want to choose in favor of keeping the staff.  They assume capital maintenance can always be done later via special appropriation, but of course we saw earlier that legislators are equally unlikely to prioritize capital maintenance vs. other alternatives.

The other related problem faced is that this focus on internal staff tends to drive up pay and benefits of the agency workers.  This drives up the cost of fundamental day to day tasks (like cleaning bathrooms and mowing) and again helps to starve out longer-horizon maintenance functions.

As proof, you only have to look at the mix of agency budgets.  Many parks agencies (e.g. New Jersey state parks, which I have studied in depth) have as much as 85% of their budget go to internal staff.  My company, which does essentially the same thing (run parks) has about 32% of our budget go to staff.  State parks agencies have 50% or more of their staff in headquarters or regional offices.  In my company, 99% of the staff is in the parks.

I don't think that these incentives problems can be overcome -- they are simply too fundamental to how government works.  Which is why I spend my working hours trying to convince states to privatize the operation of their recreation facilities.

Where's Coyote

Well, it is time for many of our seasonal operations to open over the next few weeks so I have been running in circles on business issues.  Also, I must confess that blogging is becoming a sort of Groundhog Day (the movie) experience, with the same arguments circling over and over.  How many more times can I write, say, a long article about how minimum wage increases are a terrible anti-poverty program only to get one line emails asking me why I hate poor people.  So blogging will be light as I do real world work and try to recharge.

I will leave you with one note of optimism, from Mark Perry.  I went to college in the nadir (1980) of the American beer industry, where a small oligopoly of mediocre beer producers was protected by government legislation.  It was a classic example of how regulation drives monopoly, consolidation, and loss of choice.  With deregulation, the American beer industry has exploded.

beer1

 

As an aside, my current go-to beer is actually Brazilian, Xingu Black

 

Matt Walsh on Net Neutering

Matt Walsh has an epically good article on why we should fear having the same folks who freaked out over Janet Jackson's "wardrobe malfunction" running the Interntet

On Funding and Bias in Climate

I really, really did not want to have to write yet another post on this.  99+% of all climate funding goes to alarmists rather than skeptics.   Greenpeace laments donations of funds to skeptics by Exxon of a million dollars or so and wants to drive out all such funding when Greenpeace and Tides and the US Government are giving literally billions to alarmists.  Despite this staggering imbalance, the only stories you ever see are about the dangers and bias introduced by that measly 1% skeptics get.  I guess that 1% is spent pretty well because it sure seems to have people running in circles declaring the sky is falling.

One would think that at some point the world would wake up and realize that criticizing the funding sources behind an individual does not actually rebut that individual's arguments.

Potential bias introduced by funding sources (or some other influence) are a pointer -- they are an indication there might be a problem warranting deeper examination of the evidence introduced and the methodology of collecting that evidence.  Such potential biases are not themselves evidence, and do nothing to rebut an argument.  A reasonable way to use such biases in an argument would be something like:

I want to begin by noting that Joe may have had a predisposition to his stated conclusion even before he started because of [funding source, political view, whatever].  This means we need to very carefully look at how he got to his conclusion.  And I intend to show you that he made several important errors that should undermine our acceptance of his conclusions.  They are....

Unfortunately, nowadays people like the New York Times and our own Arizona Representative Raul Grijalva seem to feel like the job is done after the first sentence.  They have decided that the best way to refute recent scientific work by a number of climate scientists is to try to show that some of their funding comes from fossil fuel companies.

Beyond the strange implicit assumption that fossil fuel funding would automatically "disprove" a research paper, there is also an assumption that oil company funding is "unclean" while government or non-profit environmental group funding is "clean".  Remember the last time you saw a news story about a climate alarmist's funding?  Yeah, neither do I.

There is no justifiable reason for this asymmetry.  Funding does not potentially introduce bias because it is sourced from for-profit or non-profit entities.  In fact, the motivation of the funding source is virtually irrelevant.  The only relevant questions related to bias are:

  1. Did the funding source demand a certain conclusion at the outset of the study as the price of the funding -- or --
  2. Is there a reasonable expectation that the source would deny future funding if the conclusions of the study don't go their way

My sense is that #1 is rare and that the real issue is #2.

But #2 is ubiquitous.  Sure, if a group of skeptical scientists suddenly started writing papers about 8 degree warming predictions, Chevron is going to be less likely to fund their future research.  But on the flip side if Michael Mann suddenly started saying that future warming will only be a modest 1-2 degrees, do you think that he would continue to get funding from Greenpeace, the Tides Foundation, the WWF, or even from an Obama-run Federal agency?  No way.   There is absolutely no less bias introduced by Chevron funding than from Greenpeace funding, because in each case there can be a reasonable fear by the researcher that future funding would be denied by that source if the "right" answer was not reached.

Postscript & Disclosure of Biases:  I have never received any outside funding for this blog or my climate work.  However, if Chevron were to send me a check for a million dollars, I would probably cash it.  I do own individual shares of ExxonMobil stock as well as shares of the Vanguard S&P500 index fund, which includes equities of a number of energy companies.  I also am a frequent purchaser of gasoline and electricity, as well as a number of other products and services whose prices are tied to energy prices (e.g. air transportation).  As a consumer, I would rather not see the prices of these products rise.  I buy a lot of food, whose price might be improved by longer growing seasons.  My camping company tends to benefit from rising gasoline prices, because rising prices causes people to stay closer to home and camp at the type of places we operate.  It is hard to predict how regional climates will change if overall global temperatures rise, but since many of my campgrounds are summer escapes at high altitude, they would probably benefit somewhat from rising temperatures.  I own a home in Arizona whose value would probably be lessened if the world warmed 2-3 degrees, because it would make winters in the northeast and midwest more bearable and thus hurt Arizona as a location for a winter second home.  Global warming may reduce the life of my dog as we are less likely to walk her when it is over 100 degrees out which makes her less healthy.  I own land in Hawaii that might be more valuable if sea level rises puts it 6-8 inches close to the ocean.  I am planning a vacation to see the tulips bloom in Holland and changes in climate could shift the blooming date and thus cause me to miss the best colors.  Fifteen years from now my daughter would like a June wedding and changes to climate might cause it to rain that day.  My daughter also owns 5 shares of Walt Disney and their earnings might be helped by global warming as nostalgia for cooler weather could greatly increase DVD sales of "Frozen".

My Last Run

Well, that is kind of over-dramatic.  I will certainly continue to run sometimes.  I really enjoy running in cities where I travel as much as an exploration tool as for exercise.  But my knees are shot and I barely got through the half-marathon last weekend in 3 hours.  We had a great time though and Disney does a great job running these races.  And just about everyone wears costumes, which is fun.   It was worth the pain to do this event one last time with my daughter before she goes off to college.  Plus I now have another really awesome princess medal.

princess run-2

Where's Coyote?

I am off for Disney World to run in the Princess Half-Marathon this weekend.  My knees feel like I have four flat tires and have been driving on the rims for 20 miles, but I am running this last time with my daughter.

We started running this race together a number of years ago and the first time we ran was something of a breakthrough for my daughter -- the experience dedicating herself to a goal and the confidence she gained from achieving it led to many knock-on benefits, so much so that it became the core of her college essay.

That essay began with the story of she and I making our first tutu together.  At the time, I did not even know what tulle was, but we watched a YouTube video about how to make a tutu without sewing and we eventually got it done.   She ran the whole race, as she has ever since, with a tutu and a tiara on.  (By the way, I am always amazed at the niches in the Internet that I never knew existed.  This is the video we watched to make the tutu -- it has 2.4 million views!  We basically followed this process except we used a piece of underwear elastic for the waist band rather than ribbon).  My job is to cut the tulle into strips -- we make them twice as long as she wants the skirt, and then my daughter ties them to a piece of elastic in the middle, so two strands hang down.

The challenge has increasingly become to use different colors than any past tutu.   The last one looked more like a skirt.  This one she wanted to be shorter and puffier, more like a ballet tutu.  It is hard to capture it well in a picture to get the detail but this is the result:

click to enlarge

 

Not to worry, your humble correspondent will be in costume too.  I have some great Darth Vader running gear I will be wearing.  I wore a rebel pilot outfit last time.  Disney really hit on something with these runs -- they have 8-10 different ones now.  The Princess half-marathon is still the most popular and sells out in about 45 minutes.  It was as hard to get a spot in it as it is to get Comicon tickets.  But given the popularity, there are whole web sites specializing in themed and costumed running gear.  I love capitalism.

PS -- I am still amazed she takes on all this extra weight and drag for fashion.  When I have to run this far, I am tempted to cut off the ends of my shoelaces to save weight.

PPS-- Here was the first one, at the finish line (a little worse for wear)

finish

The Un-discussed Foreign Policy Alternative

I was going to write a longer post on foreign policy vis a vis terrorism and ISIS, but I lack both the time as well as confidence in my foreign policy knowledge.

I will offer this, though:  There seem to be but two policy positions being discussed

  1. The largely Conservative position that there is a dangerous and violent authoritarian streak running through the world of Islam and that we need to saddle up the troops and go break some heads and impose order
  2. The Progressive position embodied by the Obama Administration that there is nothing abnormal going on in Islam and that what we see is random violence spurred by poverty and thus we should not intervene militarily (I consider the current AUMF proposed by Obama to be political posturing to satisfy polls rather than anything driven by true belief).

Why is there not a third alternative to be at least considered -- that there is something really broken in a lot of Islam as practiced today (just as there was a lot of sh*t broken with Christianity in, say, the 14th-16th centuries) and that Islam as practiced in many Middle Eastern countries is wildly illiberal (way more illiberal than any failings of Israel, though you wouldn't know that if you were living on a college campus).  But, that we don't need to saddle up the troops and try to change things by force.

Conservatives who can look at things like serial failures in Federal education policy and reach the conclusion that we should be skeptical about Federal initiatives on education seem unable to draw similar conclusions from serial failures in US interventions in the Islamic world.  And for its part, the Obama administration seems to be living in some weird alternate universe trying desperately to ignore the reality of the situation.

Yes, I know the first response to all folks like me who advocate for non-intervention is "Munich" and "Czechoslovakia".  So be it.  But if we sent in the military every time someone yelled "appeasement" our aircraft would be worn out from moving troops around.  And we seem to be totally able to ignore atrocities and awful rulers in Sub-Saharan Africa.

As a minimum, I would like to see a coalition of Arab states coming to us and publicly asking us for help -- not this usual Middle East BS we hear that Saudi Ariabi (or whoever) really in private wants us there but publicly they will still lambaste us.  Without this support we can win the war but we have no moral authority (as we did after WWII) in the peace.  Which is one reason so many of our interventions in the Middle East and North Africa fail.

Bill Maher, Living in an Echo Chamber

I refuse to assume (contrary to the modern practice) that someone who disagrees with me is either stupid or ill-intentioned or both [OK, I did call people idiots here -- sorry, I was ranting].  Intelligent people of goodwill can disagree with each other, and the world would be a better place if more people embraced that simple notion.

Anyway, I won't blame lack of intelligence or bad motivations for the following statement from Bill Maher.  He seems to be a smart guy who is honestly motivated by what he says motivates him.  But this statement is just so ignorant and provably false that it must be the result of living in a very powerful echo chamber where no voices other than ones that agree with him are allowed.

HBO’s Bill Maher complained that comparing climate change skepticism to vaccine skepticism was unfair to vaccine skeptics before attacking GMOs on Friday’s “Real Time.”

“The analogy that I see all the time is that if you ask any questions [about vaccines], you are the same thing as a global warming denier. I think this is a very bad analogy, because I don’t think all science is alike. I think climate science is rather straightforward because you’re dealing with the earth, it’s a rock…climate scientists, from the very beginning, have pretty much said the same thing, and their predictions have pretty much come true. It’s atmospherics, and it’s geology, and chemistry. That’s not true of the medical industry. I mean, they’ve had to retract a million things because the human body is infinitely more mysterious” he stated.

Climate science is astoundingly complex with thousands or millions of variables interacting chaotically.  Separating cause and effect is a nightmare, because controlled experiments are impossible.  It is stupendously laughable that he could think this task somehow straightforward, or easier than running a double-blind medical study  (By the way, this is one reason for the retractions in medicine vs. climate -- medical studies are straightforward enough they can be easily replicated... or not, and thus retracted.  Proving cause and effect in climate is so hard that studies may be of low quality, but they are also hard to absolutely disprove).

It is funny of course that he would also say that all of climate scientists predictions have come true.  Pretty much none have come true.  They expected  rapidly rising temperatures and they have in fact risen only modestly, if at all, over the last 20 years or so.  They expected more hurricanes and there have been fewer.  They called for more tornadoes and there have been fewer.  The only reason any have been right at all is that climate scientists have separately forecasts opposite occurrences (e.g. more snow / less snow) so someone has to be right, though this state of affairs hardly argues for the certainty of climate predictions.

By the way, the assumption that Bill Maher is an intelligent person of goodwill who simply disagrees with me on things like climate and vaccines and GMO's is apparently not one he is willing to make himself about his critics.  e.g.:

Weekly Standard Senior Writer John McCormack then pointed out that there are legitimate scientists, such as Dr. Richard Lindzen, who are skeptical of man-made climate change theories, but that there were no serious vaccine-skeptic professors, to which Maher rebutted “the ones who are skeptics [on climate change], usually are paid off by the oil industry.”

I will point out to you that the Left's positions on climate, vaccines, and GMO's have many things in common, as I wrote in a long article on evaluating risks here.

Let's Make Employment of Low-Skill Labor Profitable Again

Brink Lindsey of Cato is gathering academic essays on the topic "If you could wave a magic wand and make one or two policy or institutional changes to brighten the U.S. economy’s long-term growth prospects, what would you change and why?"  I am by no means in the distinguished academic company that were invited to contribute, but I thought it was an interesting topic.  Here is my (uninvited) contribution.

The question of skills and the American workforce is typically tackled in only one direction:  that we need more high-skilled workers to meet the challenge of emerging industries and business models that are increasingly driven by technology.  A recent report by the OECD, and as summarized in the New York Times, is a typical example of this concern.  As Eduardo Porter writes in the Times:

To believe an exhaustive new report by the Organization for Economic Cooperation and Development, the skill level of the American labor force is not merely slipping in comparison to that of its peers around the world, it has fallen dangerously behind.

The report is based on assessments of literacy, math skills and problem-solving using information technology that were performed on about 160,000 people age 16 to 65 in 22 advanced nations of the O.E.C.D., plus Russia and Cyprus. Five thousand Americans were assessed. The results are disheartening....

“Unless there is a significant change of direction,” the report notes, “the work force skills of other O.E.C.D. countries will overtake those of the U.S. just at the moment when all O.E.C.D. countries will be facing (and indeed are already facing) major and fast-increasing competitive challenges from emerging economies.”

A lot of head scratching goes on as to why, when the income premium is so high for gaining skills, there are not more people seeking to gain them.  School systems are often blamed, which is fair in part (if I were to be given a second magic wand to wave, it would be to break up the senescent government school monopoly with some kind of school choice system).   But a large portion of the population apparently does not take advantage of the educational opportunities that do exist.  Why is that?

When one says "job skills," people often think of things like programming machine tools or writing Java code.  But for new or unskilled workers -- the very workers we worry are trapped in poverty in our cities -- even basic things we take for granted like showing up on-time reliably and working as a team with others represent skills that have to be learned.  Amazon.com CEO Jeff Bezos, despite his Princeton education, still learned many of his first real-world job skills working at McDonald's.  In fact, back in the 1970's, a survey found that 10% of Fortune 500 CEO's had their first work experience at McDonald's.

Part of what we call "the cycle of poverty" is due not just to a lack of skills, but to a lack of understanding of or appreciation for such skills that can cross generations.   Children of parents with few skills or little education can go on to achieve great things -- that is the American dream after all.  But in most of these cases, kids who are successful have parents who were, if not educated, at least knowledgeable about the importance of education, reliability, and teamwork -- understanding they often gained via what we call unskilled work.   The experience gained from unskilled work is a bridge to future success, both in this generation and the next.

But this road to success breaks down without that initial unskilled job.   Without a first, relatively simple job it is almost impossible to gain more sophisticated and lucrative work.  And kids with parents who have little or no experience working are more likely to inherit their parent's cynicism about the lack of opportunity than they are to get any push to do well in school, to work hard, or to learn to cooperate with others.

Unfortunately, there seem to be fewer and fewer opportunities for unskilled workers to find a job.  As I mentioned earlier, economists scratch their heads and wonder why there are not more skilled workers despite high rewards for gaining such skills.  I am not an economist, I am a business school grad.   We don't worry about explaining structural imbalances so much as look for the profitable opportunities they might present.  So a question we business folks might ask instead is:  If there are so many under-employed unskilled workers rattling around in the economy, why aren't entrepreneurs crafting business models to exploit this fact?

A few months back, I was at my Harvard Business School 25th reunion.  Over the weekend, they had dozens of lectures and programs on what is being researched and taught nowadays at the school.  I can't remember a single new business model discussed that relied on unskilled workers.

Is this just the way it is now?  Have the Internet and computers and robotics and complex genomics made unskilled work obsolete?  I don't think so.  I have been running a business for over a decade that employs more than 300 people in unskilled positions.  I will confess that the other day I came home tired from work and told my wife, "Honey, in my next company, I have to find a business that doesn't require employees."  But that despair doesn't come from a lack of opportunities to deliver value to customers with relatively unskilled labor.  And it doesn't come from any inherent issues I might have running a large people-driven service company -- in fact, I will say there has been absolutely nothing in my business life that has been more rewarding than seeing a person who has never had anything but unskilled jobs discover that they can become managers and learn more complex tasks.

The reason for my despair comes from a single source:  the government is making it increasingly difficult and costly to hire unskilled workers, while simultaneously creating a culture among new workers that short-circuits their ability to make progress.

The costs that government taxes and rules add to labor have been discussed many times, but usually individually.  Their impact is clearer when we discuss them as a whole.  Let's take California, because that state is one I know well.  To begin, the minimum wage is $9 (going to $10 an hour in 2016).  To that we have to add taxes and workers compensation premiums, both of which are high because because California does little to police fraud in unemployment and injury claims.  For us, these add another $3.15 an hour.  We also now have to add in the Obamacare employer mandate, which at a minimum of $3000 per full-time employee (accepting the penalty is cheaper than paying for health care) adds another $1.50 an hour.  And the new California paid sick leave mandate adds another 45 cents an hour.  So, looking just at core requirements, we are already up to a minimum of $14.10 an hour, less than 2/3 of which actually shows up in the employee's paycheck.

But these direct costs don't even begin cover the additional fixed costs of hiring employees.  We pay a payroll company thousands of dollars a year to make sure that regulations on taxes and paychecks are followed.  We spend so much time making sure our written plans and documentation on safety meet the requirements of OSHA and its California state equivalent that we barely have the capacity to actually focus on safety.  In California we have to have complex systems in place to make sure our employees don't work through their lunch break, that they have the right sort of chair and that they sit in them frequently enough, that they follow all the right procedures when the temperature outside goes over 85 degrees, that they get paid for sick leave and get their job back after extended medical leave.... the list goes on and on.

In a smaller company, we don't have lawyers and a large human resource staff.  In fact, we tend to have little staff at all.  If some new compliance issue arises -- which happens about every day the California legislature is in session -- the owner (me) has to figure out a solution.  In one year I literally spent more personal time on compliance with a single regulatory issue -- implementing increasingly detailed and draconian procedures so I could prove to the State of California that my employees were not working over their 30 minute lunch breaks -- than I did thinking about expanding the business or getting new contracts.

Towards the end of last year I was making a speech to a group of business school students, and someone asked me what my biggest accomplishment had been over the prior year.  I told them it was probably getting the company down from hundreds of full-time workers to less than 50, converting everyone to part-time.  And it was a huge effort, involving new systems and a number of capital investments to accommodate more staff working fewer hours.  And it had a huge payout, saving us hundreds of thousands of dollars a year in Obamacare penalties and compliance costs.  But come on!  How depressing is it that my biggest business accomplishment was not growing the business or coming up with a new customer service but in cutting the working hours for good employees?  But that is the reality of trying to run a service business today.  The business couldn't be profitable until we'd adjusted our practices to these new regulations, so there was no point in even thinking about growth until we had done so.

Labor-based business models that work at a $7 or $8 total labor cost may well not work at $15, and they certainly are not going to grow very fast if the people responsible for seeking out growth opportunities are instead consumed in a morass of legal compliance issues.  But there is perhaps an even more damaging impact of government interventions, and that is to the culture of work.  I will confess in advance I don't have comprehensive data to prove my hypothesis, but let me tell a couple of stories.

Until 2010, we never had an employee sue us.  We had over 8 years hiring 350 seasonal workers a year, mostly older retired folks, without any sort of legal issues.  Since 2010, we have had eight employee suits threatened or filed, all of which we have won but at a legal cost of $20-$25 thousand each (truly Pyrrhic victories).  So what changed around 2010?  Well, our work force composition changed a lot.  Before that time, we typically hired older retired folks, because the seasonal nature of the job is simply not very appropriate for a younger person trying to support themselves without other means (like retirement or Social Security).   However, after 2009 when a lot of younger folks were losing their traditional jobs, they began applying to our company.  Our work force shifted younger, which actually excited me because I felt it would help us in attracting a younger demographic to the campgrounds we operate.    But all eight of these legal actions were by these new, younger employees.  I asked one person who was suing us over what was a trivial slight, really a misunderstanding, why they did not just call me (my personal number is in their employee handbook) to fix it.  They said that if I had fixed it, they would have lost the opportunity to sue.

I mentioned earlier that we had struggled to comply with California meal break law.   The problem was that my workers needed extra money, and so begged me to be able to work through lunch so they could earn a half-hour more pay each day.  They said they would sign a paper saying they had agreed to this.  Little did I know that this was a strategy devised by a local attorney who understood meal break litigation better than I.  What he knew, but I didn't, was that based on new case law, a company had to get the employee's signature every day, not just once, to avoid the meal break penalties.  The attorney advised them they could get the money for working lunch AND they could sue later for more money (which he would get a cut of).  Which is exactly what they did, waiting until November to sue so they could get some extra money to pay for Christmas bills.  This is why -- believe it or not -- it is now a firing offense at our company to work through lunch in California.

Hopefully you see my concern.   I fear that we have trained a whole generation that the way one gets ahead is not to work hard and gain new skills but to seek out and exploit opportunities to file lawsuits.  That the way to work in an organization is not to learn to manage the inevitable frictions that result from different sorts of people working together but to sue at the first hint that you have been dissed.  As an aside, I think this sort of litigiousness, both of employees and customers, is yet another reason employers are reluctant to hire low-skilled employees.  If as a business owner one is absolutely liable for any knuckle-headed thing your most junior employee might utter, no matter how clear you are in your policies and actions that such behavior is not tolerated, then how likely are you to hire a high-school dropout with no work experience?

Is it any surprise that most entrepreneurs are pursuing business models where they leverage revenues via technology and a relatively small, high-skill workforce?  Uber and Lyft at first seem to buck this trend, with their thousands of drivers.  But in fact they prove the rule.  Uber and Lyft are very very careful to define themselves and their service in a way that all those drivers don't work for them.  I would go so far to say that if Uber were forced to actually put all of those drivers on their payroll, and deal with they myriad of labor compliance issues, their model would fall apart

We cannot address the skill gap unless people have entry level, low-skill-tolerant jobs to take the first steps up the ladder of success.  If the government continues on its current course, it will become impossible to run a business that employs unskilled workers.  The value of the work performed will simply not justify the cost.  We may be concerned about income inequality today, but if we kill off the profitability of employing unskilled workers, then we are going to be left with a true two-class society -- those with high-skill jobs and those on government assistance --and few options for moving from one to the other.

My Contributions to Social Science

It occurred to me that I have reached important insights into human behavior that it would be negligent of me to withhold from the world, so here they are:

The Cheerleader Effect:  The cheerleader effect describes a human perception issue where pictures of any woman in a group are often considered more attractive than a picture of that woman alone (this may apply to men as well, but I have always heard it referred to women).  Apparently women exploit this effect by posting pictures on dating sites that show them in groups of their friends rather than alone.  Anyway, I have developed two corollaries:

  • Polo Shirt Effect:  Polo shirts in a store appear more desirable when grouped with other similar shirts in an array of colors than when presented alone.  This effect is strong enough to trump the paradox of choice, where offering consumers more choices can tend to flummox them and cause them to buy less.  I believe arrays of multi-hued polo shirts presented together increase purchases of these shirts.
  • Christmas Tree Effect:  We almost never buy ornaments for our tree.  95% are individually ugly, but meaningful, constructions by our kids over the years.  The rest are what remain after breakage of some commercial ornaments we bought 20 years ago on deep discount in the after-Christmas sales.  But a tree constructed of these ornaments is beautiful.  So ornaments look far better when massed on a tree than they look individually.

Towards A Theory of Pedestrian Behavior:  One of the things I enjoy is urban running -- ie running through the streets of cities.  When we travel, this is one of my favorite ways to see cities, and it also helps me run further because I do not get bored.  But trying to run through sometimes crowded pedestrian areas can be frustrating, since one is trying to move faster than the crowd and the crowd typically does not expect a runner coming up behind them on the sidewalk.  As a result of many such runs, I have developed two laws of pedestrian behavior:

  1. Groups of pedestrians will expand to fill the width of the space allotted.  If the width changes, groups of pedestrians will respond very quickly and expand their group spacing to fill that width.  While this behavior is almost certainly natural, it is almost impossible to distinguish a group walking naturally from one purposefully trying to block passage by a faster pedestrian.  Corollary:  Groups too small to fill the width of a passage or sidewalk will weave.
  2. Groups of pedestrians, everything else being equal, will choose to pause and congregate at the bottleneck in any sidewalk, thus constricting an already narrow passage.  DisneyWorld is a great location for spotting this behavior.  Corollary:  A disproportionate number of people will choose to stop right at the exit door from an jetway when exiting an aircraft.

 

I Just Don't Understand the Appeal of Short Street Car Lines in Low-Density Towns

More street car craziness.  I love the phrase "modern street car".  Like an up-to-date stagecoach.

Despite mounting construction costs and uncertainty over federal funds, Tempe is still seeking to be the Valley's first city with a modern streetcar system traveling through its downtown.

...

Valley Metro executives Steve Banta and Wulf Grote reviewed the project with the Tempe City Council this month.

The new alignment has lengthened the route from 2.6 miles to 3 miles and increased costs. The cost range is now $175 million to $200 million depending on the type of vehicle technology used.

First, there is no way it comes in for these numbers, but even accepting the mid-point of their estimates this is $62.5 million a mile or $11,837 per foot.  Of course there is also the operating cost, which will certainly lose money since there is no way people are going to pay much for a maximum 3 mile ride.  My prediction is that they will sell the project promising that there will be a fare that helps cover costs but they will drop the fare quickly once implemented  (because no one will ride this thing unless it is free).  And and don't forget the cost of the loss of an entire lane of roadway each way to the trains.

Just consider how much less 4 buses running in a 3-mile circle would cost, and they would only consume a tiny fraction of the existing road capacity, rather than taking up an entire lane just for themselves.  This is just a huge upper-middle class subsidy, a special favor to rich people who think buses are too low class to ride but are OK being seen on a train.  Madness.

My best guess is that these kinds of projects have become prestige projects for government officials.  This is the way they show off to each other and act as a portfolio for them to seek larger jobs in bigger cities.

Thoughts on the Japanese Economy

I would characterize long-term Japanese economic policy this way:

  • Technocratically planned economy where the government chose winners and losers and directed capital to industries favored for development (e.g. MITI with steel, autos, electronics).
  • Strong government favoritism for exports and exporters over the domestic economy -- export industries are heavily protected at the cost of raising costs for internal consumers and limiting competition in domestic markets.
  • Enormous, near Herculean commitment to deficit spending as stimulus.  With deficits consistently running in the 8% of GP range and total government debt a stratospheric levels, Japan is the poster child for Krugman's anti-austerity

To these three I would add something that is seldom mentioned, that Japan has a near Scandinavian GINI index, with income inequality well under that of the US.  Oh yes, and they were an enthusiastic adopter of CO2 limits.

And the result of all this has been... 25 years of stagnation.

I remember when every one of these three planks was enthusiastically lauded by the US elite.  I was at Harvard Business School in the late 1980's and much of the discussion was about the US needing to adopt MITI-like government industrial planning and management.  If pressed at the time, people might kind of sort of acknowledge that life wasn't so good for Japanese consumers, but we were in a Michael Porter big picture competitiveness-of-nations phase, and no one seemed to care that their definition of national success did not turn out so well for the people actually living there.

To me, Japan is a giant case study in Austrian economics.  It's like they set out to run a quarter-century test: "let's see if mispricing of credit and forced misallocation of capital is really the cause of recessions."  So it is amazing that no one seems to want to acknowledge the results of this experiment.  Paul Krugman appears weekly in the New York Times to frequently advocate for exactly this same economic plan.

An Unexpected Roadblock to Some of Our HR Automation

We are trying to use some of the available tools out there to better automate our application and onboarding process for employees.  Though we are not a huge employer (about 350 part-time people) we hire and fire them all every year, so there is a lot of burden for our size on the HR system.

We are running into a frustrating issue.  Most of our employees are older and often have limited computer skills, but we are getting past that.  But we tend to hire couples, and it turns out in the over-50 set that couples often share the same email address.  I can't even imagine having the same email address as my wife and having to filter through all of her business, but there it is.  Unfortunately, in the world of web accounts, must vendors use the email address as the one reliable unique identifier for a person and thus use it for the user name or expect it to be unique.

This is throwing us for a loop.  It is less of a problem in the application system because most of our couples just want to submit a single joint application anyway.  But for onboarding, they  each need their own W-4, I-9, etc.  So they need separate user accounts.

The question then comes down to this for us:  I can require them to get a second email address, but that is likely going to flummox some folks and require my manual intervention to help them.  Do I thus cause more tech support issues for myself than I save from the automation itself?

No point here, just venting on a problem I have not figured out how to fix.  And no fair saying stuff like "gmail is free and easy to sign up for, just make them get another gmail account."  I have managers who do a fabulous job for me that it took me days to teach how to log into and use Gmail.  A better and fairer comment would be "you have 20,000 applicants, make the application process require separate emails and even make it a little technically challenging so you limit your hiring pool to people who are better suited to using modern computer tools."  And yes, that may in fact be our solution.

This is Why Running a Service Business is Hard

This Starbucks story illustrates the hardest part about running a service business

"Pregnant woman denied Starbucks bathroom useage"

Of course, Starbucks did not deny this woman access to the bathroom.  Had the board of directors, CEO, and most of the management been at the store, they would have happily helped the woman use the Starbucks bathroom.  This woman was actually denied access to the bathroom by some knucklehead employee of Starbucks, one of the tens of thousands they hire, who likely thought they were doing the right thing.

I am sure Starbucks has a policy that the bathrooms are for customers only, and honestly in a lot of urban areas that is an essential policy or else one finds themselves spending a lot of money cleaning the bathroom and providing the public facilities that the city or shopping center developer chose not to fund.

However, in a service business, one of the keys to providing good customer service and maintaining a good reputation is, ironically, having your employees know when the rules need to be bent.  This is the number 1 thing in every training session we have in our company -- when the rules have to be enforced (safety, fires, quiet time at night) and when to back off and not act like the campground nazi ruining everyone's visit.

I have thought about why this should be for quite a while.  If rules exist, shouldn't they be enforced for everyone?  And if not, shouldn't they just be eliminated?

First, there simply are exceptions.  This is the same reason that mandatory sentencing guidelines in criminal law and no tolerance rules in schools always run to grief.

Second, even if there are not exceptions, there are people who really, really, really, strongly, aggressively believe that they are indeed an exception.  Call this modern entitlement, but we get this all the time.  Dog owners are a great example.  Every single one of them understands perfectly why everyone else's dogs have to be on leash but no one believes their little darling is a problem.  Dogs are in fact the hardest issue we often have to manage.  Ask someone to put a dog on leash and we get vitriolic complaints sent to our government partners, newspapers, etc.  Let them run around and we get vitriolic complaints sent other visitors who are bothered by dogs sent to our government partners, newspapers, etc.

Finally, the marginal cost of serving one or two exceptions is really low, practically measurable, while the cost of allowing everyone to break the rule is high.  Take the case of bathrooms.  Letting one non-customer use the bathroom costs zero.  But once word gets out that you allow public use of your bathrooms, everyone in a half-mile radius is lined up at the door every day.

 

Sorry for the Downtime

Had some sort of attack running all weekend against one of my more minor web sites.  Hostgator found the attack and changed our security rules, and for now we should be fine.  Sort of violating the security through obscurity rule of thumb since this was a very obscure site they were attacking.

Where's Coyote?

Well it has been a busy 10 days for travel.  Last weekend my wife and I were at Harvard for our 25th anniversary of graduating from the business school there.   The way the b-school taught at the time, they basically locked 90 people together (a "section") in the same room for a year and threw teachers and course material at them.  I may have spent more time in a room with those 90 people than I spent in the same room with my dad growing up.  So you get to know them pretty well.  It was fun seeing everybody, though intimidating given all the folks my age running Fortune 50 companies or cashing out billion dollar startups.

After that, I went to Bozeman early this week and discussed free-market options for reforming the National Park Service at an event hosted by PERC, the Property and Environment Research Center.  On Tuesday we went into Yellowstone and met with the Superintendent there, who had also run the whole agency for about a year.  A lot of the discussion was about sustainability - financially.  The NPS raises less than 10% of its revenue from visitors, and so must constantly fight with Congress for cash.   One problem is that Yellowstone (perhaps their premier park) charges just $25 per vehicle for a one week admission.  This is insane.  We have tiny state parks in Arizona with one millionth of the appeal that fill the park despite a $20 a day entrance fee.  And the NPS (or really Congress) takes every opportunity to discount this already absurdly low rate even further.  You can get into all the parks for the rest of your life for a single $10 payment with the Senior pass.  This essentially gives free entry to their largest visitor demographic.

Today I am in Houston for a sort of climate skeptics' conference.  If you are in the area and the agenda looks interesting, they are still selling admissions (I think) for $75 for the two day event at the Hyatt downtown.   Rick Perry is speaking tonight, and that is supposed to be a draw I guess but I am actually skipping that and focusing on the scientists they have through the day.  Hopefully it is interesting, but I am also a conference skeptic so we will see.

Michael Munger: The "State" As A Unicorn

Michael Munger has one of the most useful articles I have read in a very long time.  As illustrated by the Venn diagram I posted a while back showing the heavy overlap between the Tea Party and Occupy Wall Street, we have much more concurrence in the diagnosis of problems than in the prescriptions for solutions.   Munger gets at the heart of why many people go wrong in these prescriptions

When I am discussing the state with my colleagues at Duke, it's not long before I realize that, for them, almost without exception, the State is a unicorn. I come from the Public Choice tradition, which tends to emphasize consequentialist arguments more than natural rights, and so the distinction is particularly important for me. My friends generally dislike politicians, find democracy messy and distasteful, and object to the brutality and coercive excesses of foreign wars, the war on drugs, and the spying of the NSA. 

But their solution is, without exception, to expand the power of "the State." That seems literally insane to me—a non sequitur of such monstrous proportions that I had trouble taking it seriously.

Then I realized that they want a kind of unicorn, a State that has the properties, motivations, knowledge, and abilities that they can imagine for it. When I finally realized that we were talking past each other, I felt kind of dumb. Because essentially this very realization—that people who favor expansion of government imagine a State different from the one possible in the physical world—has been a core part of the argument made by classical liberals for at least three hundred years....

He follows with this useful test

But they may not immediately see why "the State" that they can imagine is a unicorn. So, to help them, I propose what I (immodestly) call "the Munger test."  

  1. Go ahead, make your argument for what you want the State to do, and what you want the State to be in charge of.
  2. Then, go back and look at your statement. Everywhere you said "the State" delete that phrase and replace it with "politicians I actually know, running in electoral systems with voters and interest groups that actually exist."
  3. If you still believe your statement, then we have something to talk about.

This leads to loads of fun, believe me. When someone says, "The State should be in charge of hundreds of thousands of heavily armed troops, with the authority to use that coercive power," ask them to take out the unicorn ("The State") and replace it with George W. Bush. How do you like it now?

If someone says, "The State should be able to choose subsidies and taxes to change the incentives people face in deciding what energy sources to use," ask them to remove "The State" and replace it with "senators from states that rely on coal, oil, or corn ethanol for income." Still sound like a good idea?

How about, "The State should make rules for regulating sales of high performance electric cars." Now, the switch: "Representatives from Michigan and other states that produce parts for internal combustion engines should be in charge of regulating Tesla Motors."  Gosh, maybe not …

Hat tip:  Don Boudreaux

I spent most of the Bush years asking Conservatives a similar question -- you may be fine when "your guy" has this power, but would you be happy if Al Gore or Nancy Pelosi had it.  And of course I have spent most of the Obama years asking Liberals whether they would be comfortable if George Bush or Rick Perry had similar powers to what Obama has claimed for himself.  Because they will.

I said something similar here, though less elegantly.  I concluded in part:

Technocratic idealists ALWAYS lose control of the game.  It may feel good at first when the trains start running on time, but the technocrats are soon swept away by the thugs, and the patina of idealism is swept away, and only fascism is left.  Interestingly, the technocrats always cry "our only mistake was letting those other guys take control".  No, the mistake was accepting the right to use force on another man.  Everything after that was inevitable.

Bubble Prices are not Wealth

Conservative sites are running with this story:

OBAMANOMICS IN ACTION: Typical US Household Worth One-Third Less Than Under Bush

Seriously?  The bursting of the housing bubble, which actually began under Bush, is Obama's fault?  Because that is what likely drove middle class household worth down (while the Fed-sponsored asset boom in financial instruments drove up wealth of the top 1%).  I suppose one could say that the Republicans sponsored a bubble that helped the middle class while Obama is sponsoring a bubble that helps the wealthy.

I won't say this stuff is meaningless to the economy, because clearly they affect people's perception of wealth and thus spending and optimism.  But sound long-term economic growth has got to come from stable and rational monetary policy that allows interest rates and financial assets to find their correct level.  Getting political mileage out of bubble pricing of assets only creates incentives for politicians such that they will never stop fiddling with interest rates and credit.

The Lego Movie and Transformers Movies Have Something In Common -- And It's Not Toy Tie-ins

I watched the Lego Movie last night, and I found it had something very much in common with the recent Transformers franchise movies -- and its not the fact that they both began as marketing platforms for toys.

I don't think it is too much of a spoiler to say that the Lego movie has all kinds of frankly absurd, sometimes nonsensical, plot lines and dialog (though it is surprisingly entertaining at times none-the-less).  What you find out when the camera pulls back midway through the movie is that the first part of the movie is actually pouring from a little boy's imagination as he plays with his Lego blocks.  We are watching a kid playing alone in the basement, making up stories with his toys.

The Lego Movie is the perfect way to understand the most recent Transformers movies.  The Transformers movies don't make a lot of sense in terms of plot and dialog.   But they make perfect sense if you think of them as Michael Bay playing with his digital toys.  The Transformers movies are a little boy running around his room with a couple of action figures yelling "pew pew" and "kaboom", perhaps in front of the Megan Fox poster on the wall, with Michael Bay as the little boy.  The $150 million in digital effects and some irrelevant live actors barely change this fact at all.  (By the way, I have great respect for Bay being able to have fun with his toys and make a billion dollars in the process).

Beware of Scam Calls From (816) 420-4632 or (866) 680-8628

I post this not because the odds are high any of you readers have had this issue but I want these numbers to be found on an internet search.

Both numbers were leaving a message saying they were from "Citi" or "Citicard" calling about my account (and that it was not a sales call).  Since I have no Citicorp credit cards or accounts of any type, and since they were calling a Google Voice number that I would never have put on an account (in fact don't even really use), I was totally suspicious.  When I called them they asked for my account number.  I said I did not have one but was calling to see what kind of scam they were running.  They said they were from Citicard and don't do scams, but could I give them my phone number.  I said I had to look it up, because they were calling a Google voice number I never use.  The moment I said that, they hung up on me, the universal indicator of a scamster giving up.

Update:  There is a legitimate Citi group with the same name.  It sounds to me that these folks at the numbers above are recording the legitimate Citi greeting replaying it on their lines.  But then their physical operator answers the phone completely differently than does the legitimate Citi operator.  The Citi group being spoofed is this one.

The Corporate State Is Winning

Successful businesses often seek to cement their position and block new competition by running to government for legislation that blocks new entrants and/or makes it harder to compete for smaller upstarts.  One only need to look at the taxi cartel trying to kill Uber and Lyft to see exactly how this operates.  It is working:

small-biz5-14

 

This is a strategy that works with both Republican and Democrat politicians, which may explain why both Occupy Wall Street and the Tea Party shared opposition to cronyism among their complaints.

Of course there are other factors than just powerful incumbents blocking new competitors.  In California, regulations that make it just debilitating to try to run a business are also driven by the tort bar, which has created a thriving business in extracting settlements from companies over miniscule rules violations.  And the California government obliges by shifting the rules constantly, so companies are both constantly vulnerable and have to pay other attorneys to strengthen their immune systems against these assaults.

Problem Endemic To Public Parks Management

Glenn Reynolds is writing about colleges, but he could just as easily be writing about public parks:

Full-time administrators now outnumber full-time faculty. And when times get tough, schools have a disturbing tendency to shrink faculty numbers while keeping administrators on the payroll. Teaching gets done by low-paid, nontenured adjuncts, but nobody ever heard of an "adjunct administrator."

Replace "faculty" with "people actually working in a park" and administrators with "headquarters staff" and he has described the management of public parks exactly.  Most parks agencies are suffering from administrative bloat, with more people in headquarters than out in the field actually running parks.  When they have layoffs, it is always of field staff and not headquarters administrators.   In the parks world they will even ignore major maintenance needs in favor of making sure they have the funds to keep paying headquarters staff.

It is just absurd.  Of course, in my case, we make a business out of this.  We run public parks, and have 300 field employees actually in the parks and 2 in headquarters.  It allows us to cut costs while simultaneously doing a better job.

A Slightly Different Take on High Frequency Trading (HFT)

My guess is that HFT will soon become one of those bogeyman words that people automatically associate with "bad stuff" without ever actually understanding what it means.  But it is worth understanding the underlying problem, and that problem is not high speed or frequency per se.

As I understand it, when an order to buy, say, 10,000 shares of Exxon gets placed, the purchase will get pieced together by searching across multiple servers where offers are listed and putting together the 10,000 shares in bits and pieces from these various servers.  What HFT's are doing (and I am sure this is grossly oversimplified) is that once it sees this order pinging  a server, it runs ahead at high speed to other servers and buys up blocks of Exxon at price A and then offers it up to the pokey buying search when it finally arrives at those servers at A+a bit more.  That "a bit more" may be less than a penny, but the pennies add up and if done right, there is almost no trading risk.

This is bad, though generally not for us small investors but for our mutual fund companies.  For my little trade of 100 shares that might be cleared on the first server, HFT's have no opportunity to play.  Moreover, I may not even notice a penny or two difference in the price I get.  This is a much bigger deal for mutual fund companies and large investors clearing larger trades, where a few pennies can add up to a lot of money.

An exchange always has to be really careful to maintain its image of fairness, and systematically allowing such behavior, called front-running, is not good for the health of the market.   Which is why you are hearing a lot about this.

Here is what you are not hearing, and I will admit that it is all a hypothesis of mine.  But it may well be possible that HFT's actually reduce the total cost of front-running to investors.  It may be that HFT's real crime is that what they are doing is more transparent and visible than what market makers were doing in the past -- ie they are not increasing the volume of front-running, they are just making it more obvious.   I would not be at all surprised if such front-running always existed in market-making (certainly Goldman Sachs has been accused of it) and that HFT's are actually the Wal-Mart or Amazon of front-running -- not doing anything new but doing it cheaper on tighter margins.   Kind of ironically, I suppose this is what efficient markets theory would predict for the market in front-running.

If this is the case, while we would rather see front-running eliminated entirely, HFT's may actually be reducing the cost of front-running and making things more rather than less efficient.

Ideological Turing Tests, Climate, and Minimum Wage

Yesterday I was interviewed for a student radio show, I believe from the USC Annenberg school.  I have no quarrel with the staff I worked with, they were all friendly and intelligent.

What depressed me though, as I went through my usual bullet points describing the "lukewarmer" position that is increasingly common among skeptics, was that most of what I said seemed to be new to the interviewer.   It was amazing to see that someone presumably well-exposed to the climate debate would actually not have any real idea what one of the two positions really entailed (see here and here for what I outlined).  This gets me back to the notion I wrote about a while ago about people relying on their allies to tell them everything they need to know about their opponent's position, without ever actually listening to the opponents.

This topic comes up in the blogosphere from time to time, often framed as being able to pass an ideological Touring test.  Can, say, a Republican write a defense of the minimum wage that a reader of the Daily Kos would accept, or will it just come out sounding like a straw man?  I feel like I could do it pretty well, despite being a libertarian opposed to the minimum wage.  For example:

There is a substantial power imbalance between minimum wage workers and employers, such that employers are able to pay such workers far less than their labor is worth, and far less than they would be willing to pay if they had to.  The minimum wage corrects this power imbalance and prevents employers from unfairly exploiting this power imbalance.  It forces employers to pay employees something closer to a living wage, though at $7.25 an hour the minimum wage is still too low to be humane and needs to be raised.  When companies pay below a living wage, they not only exploit workers but taxpayers as well, since they are accepting a form of corporate welfare when taxpayers (through food stamps and Medicare and the like) help sustain their underpaid workers.

Opponents of the minimum wage will sometimes argue that higher minimum wages reduce employment.  However, since in most cases employers of low-skilled workers are paying workers less than they are willing and able to pay, raising the minimum wage has little effect on employment.  Studies of the fast food industry by Card and Walker demonstrated that raising the minimum wage had little effect on employment levels.  And any loss of employment from higher minimum wages would be more than offset by the Keynesian stimulative effect to the economy as a whole of increasing wages among lower income workers, who tend to consume nearly 100% of incremental income.

Despite the fact that I disagree with this position, I feel I understand it pretty well -- far better, I would say, than most global warming alarmists or even media members bother to try to understand the skeptic position.  (I must say that looking back over my argument, it strikes me as more cogent and persuasive than most of the stuff on Daily Kos, so to pass a true Turing test I might have to make it a bit more incoherent).

Back in my consulting days at McKinsey & Company, we had this tradition (in hindsight I would call it almost an affectation) of giving interviewees business cases** to discuss and solve in our job interviews.  If I were running a news outlet, I would require interviewees to take an ideological Touring test - take an issue and give me the argument for each side in the way that each side would present it.

This, by the way, is probably why Paul Krugman is my least favorite person in journalism.  He knows very well that his opponents have a fairly thoughtful and (to them) well intention-ed argument but pretends to his readers that no such position exists.  Which is ironic because in some sense Krugman started the dialog on ideological Turing tests, arguing that liberals can do it easily for conservative positions but conservatives fail at it for liberal positions.

 

** Want an example?  Many of these cases were just strategic choices in some of our consulting work.  But some were more generic, meant to test how one might break down and attack a problem.  One I used from time to time was, "what is the size of the window glass market in Mexico?"  Most applicants were ready for this kind of BS, but I do treasure the look on a few faces of students who had not been warned about such questions.  The point of course was to think it through out loud, ie "well there are different sectors, like buildings and autos.  Each would have both a new and replacement market. Within buildings there is residential and commercial.  Taking one of these, the new residential market would be driven by new home construction times some factor representing windows per house.  One might need to understand if Mexican houses used pre-manufactured windows or constructed them from components on the building site."  etc. etc.