Thanks to Balsa Research, every weekday I now get to meet and talk to someone new, usually multiple new people, all of whom are interesting, know things I don’t know that they are eager to explain to me, and who share a passion for modeling the world with an eye towards making things better rather than worse. It’s super great, and leaves me with the very Happy Problem of there not being enough hours in the day, which is only going to get worse when the Mets start playing playoff games.
I would not have it any other way.
In the meantime, Covid-19 and the world go on. Even when there isn’t anything screaming for our attention, there is always a lot going on.
The biggest thing happening right now is likely the risk that Russia will use nuclear weapons or otherwise escalate in its war against Ukraine. I briefly discuss this here, in terms of the potential risk of overreaction (or underreaction) to nuclear risks. With time constraints I have chosen not to write up my thoughts on the probabilities involved beyond what I said in the latest Ukraine update. I continue to think the risk is lower than the prediction markets, although this brings little comfort.
I am considering the extent to which these posts should be split up, and have various topics addressed on their own. Curious to hear people’s thoughts on that, and how best to think about those questions.
Let’s run the numbers.
- Public health Twitter is not okay, they’re overreacting.
- Nuclear war risk levels are not okay, but beware overreacting.
- Magic: The Gathering is not okay, but they’re always ruining that, it’s fine.
- Covid numbers, on the other hand? Those seem okay.
Prediction from last week: 290k cases (-9%) and 2,750 deaths (-3%).
Result: 270k cases (-15%) and 2,785 deaths (-3%).
Prediction for next week (Holiday): 221k cases (-18%) and 2,300 deaths (-17%).
North Carolina reported several hundred extra deaths. I am not manually adjusting, but am noting it and adjusting next week’s prediction for it. I’m taking off 10% both predictions for Indigenous People’s Day.
Physical World Modeling
I am legitimately curious how one effectively gets the word out there days.
From February: Covid burden fell mainly upon lower-SES groups (paper) and the differences are not due to differences in prevention. Authors suggest it is due to need to be exposed for one’s job without providing evidence of this either way. Odd that education wouldn’t be associated with preventative measures, since it is associated with partisan ID and partisan ID is associated with such measures.
I don’t see any reason to take notice of the latest Covid variant other than its name which is, wait for it, B.1.1.5220.127.116.11.18.104.22.168.1.
Some Interventions Prevent Deaths and Others Don’t
There was an inevitable debate over whether this could be described as ‘dying to own the libs,’ which misses the key thing this study found.
There is some effect here in 2020. There isn’t much. The effects only take on substantial size right when the vaccine becomes available, and there are several reasons this seems to robustly reflect vaccinations and only vaccinations.
Elon Musk is not someone I usually talk about. He’s buying Twitter, he’s not buying Twitter. He wants to buy Twitter to kill the massive army of bots he imagines, he won’t buy Twitter because of the massive army of bots he imagines. Whatever.
Covid. Exposure. Risk. From a deposition. Uh huh.
I mean, it’s not news that Musk has been systematically operating in bad faith. If it is news to you, I direct you to America’s actual Finest News Source, which of course is Matt Levine’s Newsletter, for the details whenever he is forced to say ‘okay, fine, we’ll go over Elon’s nonsense today’ and then he painstakingly explains why Elon’s obvious nonsense is indeed obvious nonsense, except in a way that both highlights his utter exasperation and also that is funny. The whole case is hilarious. You might say that it would be if it didn’t involve such high stakes, and that is where you need to improve your sense of humor.
Does Musk do a lot of deeply stupid things? I mean, yes, it sure looks that way. Some of them are secretly brilliant. Many, I am pretty sure, aren’t. Is Musk stupid? No. He is one of the most capable, successful people alive at Doing the Thing. Sometimes the Thing he is Doing is trolling on Twitter and/or giving zero f***s. And yes, he has complete distain for ‘law’ or ‘not looking like an idiot’ or ‘this might cost me billions of dollars’ and that is a lot of how he got to be who he is today. You do not get to be Elon Musk by giving f***s about such things. He’s going to need those.
In any case, yes, this kind of situation is exactly what almost everyone is saying and doing when they say Covid risk. It means I wanted an excuse to not do that. Alternatively, there are a few people in public health, and public health Twitter, who want to extend this to Everyone Not Doing Anything, Ever, Forever. Like, Ever.
They do not seem to be okay.
So that’s where Public Health Twitter is in Fall 2022. Having dinner with colleagues gets you sufficiently bombarded that you feel forced to leave Twitter entirely.
Pandemics are Bad and We Should Prevent Them Or At Least Not Directly Cause Them What the Hell Is Wrong With You People
Kelsey Piper asks if we should go into the wild looking for potential viruses that could turn into the next pandemic, then take them into labs, put them into human cell lines and study them to see if one of them could create the next pandemic, because no viruses ever escape from the lab, no sir, that’s not a thing at all.
Except, of course, yes it is, that is totally a thing, there are many such cases.
She links to an article of hers from May that points out that, while not useful, such research has a non-trivial chance of causing a pandemic.
Here’s several other perspectives on this man, from Science.
But some scientists, even those dismayed by the attacks, say Daszak is in part a victim of his own making. They argue he failed to reveal important information that later surfaced through embarrassing Freedom of Information Act (FOIA) requests and leaks, and some accuse him of making false statements. “Daszak has been far from forthcoming about EcoHealth’s research, much of which is highly relevant to the pandemic origin discussion,” says Filippa Lentzos, a social scientist at King’s College London who specializes in biosecurity. “It is the pattern of continuing obfuscation and deceit that I find alarming.”
He decided to organize a statement of support for colleagues in China, which The Lancet published a few weeks later. “We stand together to strongly condemn conspiracy theories suggesting that COVID-19 does not have a natural origin,” 27 signatories from nine countries wrote.
It became the first of many lightning rods. By branding suggestions of a lab leak as “conspiracy theories,” the statement helped stifle what should have been an open discussion, former New York Times science writer Nicholas Wade wrote in a savage critique of scientists and the media published in May 2021. The letter also helped make Daszak himself a target.
While recent headlines about a fresh $600,000 grant are accurate, the reality is that Daszak’s organization was awarded about five times that, $3.3 million, by the NIH to hunt viruses in south-east Asia.
Did Daszak and the WIV cause the pandemic via a lab leak? Did someone else cause a lab leak somehow? In the case of Covid-19, we will probably never know.
We do know this particular scientist did his absolute best to squash the lab leak hypothesis in its tracks while knowing better and refusing to turn over information to ensure we never do a full investigation.
We also do know for certain that such leaks happen, and will happen again. We also know that those doing such research raced to call such questions ‘conspiracy theory’ and to censor them, and now they want to continue doing their work.
What seems clear is that such studies come with large risks, and that they failed to do any good when the exact thing they were looking for came to be. We didn’t even get earlier and louder warnings.
Meanwhile, we cannot get funding for prevention and monitoring efforts that have no downsides and would actually make a big difference.
I am not ready to go all the way to shutting down the NIH. But I understand.
In Other Covid News
It’s Over, Wizards Finally Breaks the Reserve List
They are selling in sets of four packs, for the low low price of $999. I would be very surprised if they do not sell all available packs.
I am sad.
They very explicitly said in the past that they would not do this. The Reserve List was a visible sign that companies can do the right thing over large stretches of time even with the opportunity to print money instead. Money is now being printed.
As a Hasbro shareholder I notice I am also sad in terms of my predictions for long term value, yet the market disagrees. I see on announcement day HAS is +5.5% versus +2.8% for SPY, whereas the revenue from this is likely something like 0.1% of HAS. I don’t know whether to hope that the market is right, since I want more Magic to be played and I own the stock, or whether I hope that the market is wrong, because I want to live in a world where going back on your word and milking whatever you have for as much as you can is not rewarded. I’m genuinely torn here.
Brian Kowal has thoughts, he is not a fan and sees this as making a mockery of anyone who ever stood against the use of proxies. That seems right to me. This greatly lowers my degree of preference that players in non-tournament games use ‘real cards’ as opposed to functional proxies. I still care, yet I notice I care less. Certainly I wouldn’t blink at a cube with proxies at this point.
Drew Levin has compatible thoughts offering more perspectives. It all seems reasonable. We are collectively sad about this and it isn’t world ending. Brian Kibler has thoughts and thinks this is all a good idea. Matt Sperling and Ben Seck have video thoughts.
I know that my long term willingness to hold Magic cards, especially Magic cards on the reserve list, substantially declined today, to extent that matters for anything.
Also in unrelated Magic: The Gathering news I strongly agree that there are too many formats, and that Alchemy in particular needs to die in a fire. Also releasing too many cards. What we are asking of players these days is completely unreasonable. They can’t keep up.
If Robin’s followers know they are not ready, it’s going to be rough out there. So, shut up and be a victim of authority, then?
The kids also are not ready, or at least we worry a lot about that. Boys especially.
I have a hard time believing that second survey. A majority of parents don’t worry about their kids becoming successful? If anything that’s way more scary than everyone worrying about it. You should worry more about your own kid’s success than the success of kids in general, and this going the other way is super weird. Worry where you care more and you can do something about it. Good general advice.
Kids are not ready for organic chemistry. A bunch of NYU students fail it, then use a petition to get their teacher fired.
In the field of organic chemistry, Maitland Jones Jr. has a storied reputation. He taught the subject for decades, first at Princeton and then at New York University, and wrote an influential textbook. He received awards for his teaching, as well as recognition as one of N.Y.U.’s coolest professors.
But last spring, as the campus emerged from pandemic restrictions, 82 of his 350 students signed a petition against him.
Students said the high-stakes course — notorious for ending many a dream of medical school — was too hard, blaming Dr. Jones for their poor test scores.
The professor defended his standards. But just before the start of the fall semester, university deans terminated Dr. Jones’s contract.
The officials also had tried to placate the students by offering to review their grades and allowing them to withdraw from the class retroactively.
Many students were having other problems. Kent Kirshenbaum, another chemistry professor at N.Y.U., said he discovered cheating during online tests.
When he pushed students’ grades down, noting the egregious misconduct, he said they protested that “they were not given grades that would allow them to get into medical school.”
“They weren’t coming to class, that’s for sure, because I can count the house,” Dr. Jones said in an interview. “They weren’t watching the videos, and they weren’t able to answer the questions.”
“We are very concerned about our scores, and find that they are not an accurate reflection of the time and effort put into this class,” the petition said.
The students criticized Dr. Jones’s decision to reduce the number of midterm exams from three to two, flattening their chances to compensate for low grades. They said that he had tried to conceal course averages, did not offer extra credit and removed Zoom access to his lectures, even though some students had Covid. And, they said, he had a “condescending and demanding” tone.
“We urge you to realize,” the petition said, “that a class with such a high percentage of withdrawals and low grades has failed to make students’ learning and well-being a priority and reflects poorly on the chemistry department as well as the institution as a whole.”
The entire point of Organic Chemistry is to prevent insufficiently smart students from becoming doctors. That is why this course exists and is the system Working as Designed. When students complain the grades won’t let them get into medical school, that is the idea. If we take away this gatekeeping effect, there will either (A) be some other way found to check for actual intelligence or (B) admissions will shift towards other factors being more important, which seems worse.
The opposite question would be to ask why we need to send doctors to college for a full four years, then do four years of medical school, then do residency, when most of the rest of the world does 5-6 years to get through combined college and medical school and that works fine.
Google shutters Stadia, with full refunds for everything. As Patrick McKenzie notes in the thread, Google now has a long tradition of shuttering non-core products while giving everyone approximately zero notice that they intend to do this, and one should never count on such a product continuing to exist. My model of Google is that it is sitting on various gold mines and prints money and all that, while also bleeding a huge amount of value in various other ways through mismanagement, only one of which is their inability to honor their commitments and existing products. One theory is that this is because maintaining an existing product can’t get you promoted, so no one wants to it. Amazon is different.
MP shows his pride that he defeated a dastardly scheme to… build solar panels. Yes, this is what the enemy looks like.
Good Advice for hotels, I’ll give up at least one, maybe two stars for this plus blackout curtains.
White House releases ‘AI Bill of Rights.’ Does not protect us against the destruction of all value. Does potentially make ordinary life a lot more annoying.
There was a truly bizarre hand of poker played on the Hustler stream, where an amateur in over her head called off a hundred thousand dollars. Professional Doug Polk breaks it down here in what he calls the craziest hand he has ever seen, then breaks down the later ‘new evidence.’ Her coach defends her here. Some women in poker weigh in. David Williams weighs in. Here is a breakdown of opinions, a true Rorschach test.
Was it cheating? Her play makes makes little sense either way. Her statements make little sense either way. Polk thinks it was cheating. Many others don’t. My guess is that it wasn’t, I’d be at maybe 30%, which is strongly related to Polk’s point below.
“But I do want to make one quick point. Most people are idiots.” – Doug Polk
Or, more famously, never attribute to malice what can be blamed on stupidity.
Chess also has its own cheating scandal, where things are clearer. This is someone who has cheated on multiple occasions. The arguments that we ‘must presume innocence’ in each individual instance equate not letting someone play in top level tournaments to criminal penalties, it’s absurd. FIDE’s ‘you need to be over 99.99% confident it is cheating before you do anything at all about it’ stance is even crazier. It amounts to a death wish for the entire game.
I never got this fear that someone innocent might get punished at all at some point. Yes, when you are sending someone to jail, you better be damn sure. When you are excluding someone from chess tournaments, or Magic tournaments, no you do not. If you told me that at this Magic Pro Tour there are 10 cheaters, and we were going to disqualify and suspend 10 of you but only 9 of them will be cheaters and 1 will be essentially a random false positive, I would be very happy to do that. If I get the whammy, well, stuff happens.
The Motte, a discussion form for ACX readers, moves off of Reddit due to censorship concerns. Seems like a missed opportunity to upgrade the software more, and is a bad sign for Reddit.
Rao still got it, especially this new Russel Conjugation. Whole thread is interesting even though mostly I disagree with it.
Conclusion of Criticized Criticism Contest
The prizes have been awarded for the EA Criticism and Red Teaming Contest.
My entry won an honorable mention. While this was disappointing, it matched prediction market expectations and is what my entry would have predicted for itself.
One must judge such a contest ultimately by its winners, and under what criteria those winners were chosen.
I leave that analysis to others. If this is relevant enough to your interests to justify your time, you should look at who won what prizes, what were listed as the good and bad things about the entries that won prizes, and update all your models accordingly.
What did they say about my entry?
- Criticism of EA Criticism Contest by Zvi
- We liked: that the submission criticizes a concrete thing (this competition) as a way to get at broader, often unspoken assumptions in the EA community. We particularly liked the list of 21 implicit assumptions as a jumping-off point for discussion.
- We didn’t like: that the post is long, a bit convoluted, and doesn’t make concrete recommendations that many in the EA community are likely to find actionable. And many on our panel disagreed with the object-level claims about criticism.
Here is note 11:
- Many members of the panel don’t agree with a number of the claims the post makes (though opinions were divided), including the list of 21 assumptions. For an alternative take on criticisms, see Criticism Of Criticism Of Criticism. While we recused panelists with a conflict of interest for other posts, we were unable to do that in this case (since all panelists had a conflict of interest, by definition) but at least one panelist did recuse themselves.
First of all, some points of agreement, two from each list and the procedural note.
- The post was too long, because I did not spend the time to make it shorter.
- The post was a bit convoluted. Sure, fair enough.
- List of implicit assumptions as highlight. That seems right.
- Concrete targets are good as jumping off points. Exactly, yes.
- I wouldn’t have wanted judges recusing themselves here. I want to see what the same judges everyone else gets have to say about this one.
Saying that it doesn’t make concrete recommendations that many in the EA community are likely to find actionable is an interesting framing. Still, I would agree that a version with more time spent would have offered more easily actionable recommendations.
Saying ‘many of us disagree with many points made’ without saying which points or why is frustrating. If we don’t know what was disagreed with or why, it is impossible to resolve the disagreement, find the cruxes, or otherwise take advantage of this disagreement. If we disagree about object-level claims, I want object-level details.
In general, it seems like when a large panel of judges considers a variety of work, it would be worth getting more detail from them in order to make the contest accomplish more.
I would be open to continuing to explore such issues in exchange for my happy price, there are a few potential different angles open. If I see good specific engagement on object-level details that makes useful response easy to do, I might see opportunity there without subsidy. Otherwise, my plate doth overflow with what seem like better opportunities, so I will consider the matter closed.
Good News, Everyone
America has talent. Not new, still funniest nine minutes I’ve watched this year. And Nigel Short asks the hard chess questions that you won’t, plus he answers them. And The Onion files an amicus brief in support of the parody stylings of Area Man (brief) after police do not take kindly to them and arrest him, which is great and you should read it if you haven’t yet.
As Tyler Cowen likes to ask, were you long the market?
Astronauts only make $65k-$101k per year. If you think this is them being underpaid then ask if you are worried not enough people will be thrilled to have the job.
What Marc Andreessen has been reading. I am envious of those who get to read this many books, let alone Tyler Cowen levels of reading books. No idea how to make the time for it.
New gamer classification dropped, light versus heavy gamers, where heavy gamers are playing in order to be fully intellectually engaged and light gamers aren’t.
New EA cause area dropped, bedframes for people too EA to spend money on bedframes. Fill out this form to get one. I predict this will turn out to be effective altruism. Local knowledge points to stupidly overlooked point of high leverage, allows for cheap and effective intervention. Friends don’t let friends sleep without bedframes. If you are sleeping without a bedframe, seriously, get a bedframe.
To what extent can you build a hospital in Prospera (in Honduras) that gets things right? How would The Powers That Be shut it down?
Metaculus market on probability of nuclear retaliation for the next nuclear strike, conditional on the strike happening by 2024, has the chance at 44% down from 61%. That still seems high to me. In most such cases the strike is by Russia. The West is not going to respond with its own nuclear weapons except in case of full-scale nuclear attack, since it can instead use conventional weapons which seems strictly better on all counts.
‘Direct Air Capture’ patents on the move, 218/402 issued in 2022. Great news yet also makes one worry we award patents too easily, that’s a lot of patents.
Recidivism rate seems low here, note the difference between ‘committed crimes’ and ‘were caught committing crimes’ but still:
That’s not a typo. Seventeen. That’s a 0.15 percent recidivism rate in a country where it’s normal for 30 to 65 percent of people coming home from prison to reoffend within three years of release.
This extremely low recidivism rate shows there are many, many people in prison we can safely release to the community. These 11,000 releases were not random. People in low- and minimum-security prisons or at high risk of complications from covid were prioritized for consideration for release.
US Government is firmly committed to the exactly correct level of government-protected monopoly and artificial price level given to the sugar industry. Allowing a merge between U.S. Sugar and Imperial Sugar would be taking things too far, so the government is stepping in to keep things in balance.
A claim that effective teams vastly outperform ineffective teams (paper), and one should focus on creating ‘star teams.’
I mean, yes, good teams outperform the sum of their parts and all that. Wenowdis. We all agree that it is important to assemble effective teams and to worry about weakest links and so forth. What are the claimed implications here?
Implications for Practice
Because of the heavy-tailed nature of the team performance distribution, there is an important distinction between the performance of star teams and that of others. This finding suggests a need to implement proper compensation practices that reflect the very large variability in performance across teams. Creating compensation packages focused on spurring equitable, team-based pay that helps distinguish teams can help managers reward top performing teams and motivate other teams to reach higher performance levels (Garbers and Konradt 2014).
Those certainly are some words. We want to reward star teams with appropriately larger compensation packages, while ensuring those packages are ‘equitable’ in some way, despite some members of star teams being highly replaceable and not high value add, and others being quite the opposite. They suggest tying individual compensation to team performance more. This acts as if a good team comes from motivation rather than composition, and also takes the composition as given, including not considering that if you have team-based compensation then everyone will work to get on the most highly compensated teams, and other stuff like that.
What about low performing teams?
Managers of teams should be cognizant of teams that fall at these extreme low levels and improve their performance by providing additional training (Salas et al. 2008) or improving team motivation (Park et al. 2013), which are ways to increase the performance of these lower-performing teams.
Academics love to talk about ‘training’ or ‘education’ as solutions to production problems, and lots of people talk about ‘motivation’ and none of that is likely to be the problem or to fix it when you have a poor team. You almost certainly need to change who is on the team.
In some cases there are members dragging it down, and you can get rid of them, or missing roles and you can fill them, or people who don’t get along and you can separate them. Or the wrong person is in charge.
However, for many poor teams, what happened was that B-players hired C-players (who perhaps hired F-players), and the team has a culture of not caring about their supposed mission, and the whole thing is a lost cause. Sending such folks for ‘training’ and ‘motivation’ is not going to fix this. You have chosen poorly. It’s over. If you want an effective team, you may or may not be able to rescue some members rather than firing them or moving on. Either way, you need to get a new team.
They used a lot of sports teams. That is a special case in many ways. There are basically two known ways to turn around a sports team. You can fire the manager, or you can get better players. No one says ‘oh the New York Jets suck, they need more training and motivation.’ They say ‘the New York Jets suck we need better players.’
Judge and Ohtani are both having fantastic seasons. Who should be MVP? Ohtani. Ohtani is very obviously the MVP, this is not close, come on. If Judge wants to win MVP simply because he hit more home runs than anyone has without taking massive amounts of steroids, he can sign with the Mets.
It should be related, though. If you make a dating app called ‘The Right Stuff’ it does not take a genius to know that there will be more men than women, on top of the existing problem where women get mobbed on dating apps. Having the app be invite-only was an excellent opportunity to not let in all of the men to create better balance. Or one could charge them, since a proper right-wing dating app should have people who understand that the man pays.
Send to the Balsa Research Department
Albemarle’s global director of product advocacy, Raymond Dawson, said in blunt testimony before Washington state lawmakers in 2007 that the forum is “a group dedicated to generating science in support of brominated flame retardants.”
That is, of course, not how science works. If it is actually science you generate science to evaluate brominated flame retardants.
“When we’re eating organic, we’re avoiding very small amounts of pesticides,” said Arlene Blum, a California chemist who has fought to limit flame retardants in household products. “Then we sit on our couch that can contain a pound of chemicals that’s from the same family as banned pesticides like DDT.”
Why is this happening?
These chemicals are ubiquitous not because federal rules demand it. In fact, scientists at the U.S. Consumer Product Safety Commission have determined that the flame retardants in household furniture aren’t effective, and some pose unnecessary health risks.
The chemicals are widely used because of an obscure rule adopted by California regulators in 1975.
Nevertheless, in the decades since that rule went into effect, lawyers have regularly argued that their burn-victim clients would have been spared if only their sofas had been made with California foam. Faced with the specter of these lawsuits — and the logistical challenge of producing separate products just for California — many manufacturers began using flame retardant foam across their product lines.
I am not assuming the core story of the article, that these chemicals are net harmful but we use them anyway out of fear of lawsuits due to obscure regulatory choices protected by rent-seeking industry lobbyists, is correct. It sure as hell rhymes with a ton of other things I have seen, so my guess is it is true.
This is indeed a great idea until things change and it isn’t. That’s an unusually good regulation, as this one starts out positive and could remain positive for a long time. However, it greatly inhibits any future innovations in charging technology. It also lays the groundwork for more ramp-up of ‘industry insiders tell everyone what they can use’ which ends up being used to protect insiders. Still, in this particular case, I can get behind such a rule so long as it has an exception for sufficiently small devices where a USB-C wouldn’t easily fit.
Biden administration attempts to bully and blame oil companies for gas prices. From what I can see this is not changing anyone’s mind. Either someone comes with those companies ‘pre-blamed’ automatically, or they don’t.
Electric leaf blowers are massive improvements over older models, being far less noisy and spewing out meaningfully less carbon.
Claim that Manchin’s permitting reform bill wouldn’t work because it does nothing to stop endless local objections and further environmental review demands by courts, and without that the bill represents a missed opportunity even if it passes.
Meanwhile, the electrical infrastructure required to possibly get off fossil fuels remains unbuilt, and with 18+ year standard timelines I can’t imagine why.
Until then, here’s our oil production replacement plan.
Ford hikes price of Electric F-150 again ‘on rising supply costs,’ meaning it continues to be about as underpriced as it was previously. We continue to offer large subsidies for items that are sold out.
Then there is the optimistic Credit Suisse (new official motto: We’re fine and totally liquid today, how are you, fellow non-bankrupt entity?) report, that says that the IRA alone will have a huge impact, taking us ‘from risk mitigation to opportunity capture.’ I am skeptical that they are properly considering the complementary necessary steps. If those problems get addressed, I would agree with the rest of the underlying logic, which is that mainstream estimates will never stop underestimating cost reduction progress in renewables.
It’s not easy, building a clean energy project in California. Having to spend each day applying for approvals. When I think it could be nicer, actually building the thing, or something much more useful like that. Seems like there should be less processes. That’s less important, however, than making the key processes faster, easier and more reliable.
Proposal to increase oil production by selling put options for the SPR rather than by buying futures. What oil companies need is price assurance. A put option allows them to both have price assurance while keeping the upside, which might be highly attractive to them. If we are thinking about how much the government spends in the right accounting terms, it might be cheaper and thus easier to pass or implement politically.
The problem with the put plan is that it does not refill the SPR when we most need it refilled. When the price goes up, the puts expire unused. That’s great versus doing noting. We made money and production increased somewhat. We still don’t have any oil in the reserve. One could argue that with a world market that this does not matter, we would be releasing that oil anyway. There’s something to that, but I do think the reserve is indeed somewhat strategic, and there’s big downside here too. We also made vastly less money this way than via buying futures, so we are far less hedged than we would like to be.
We also don’t make money. Selling puts here is going to lose us money in expectation. We are crossing spreads that are going to be reasonably wide. Whereas if we sell futures, the spreads are less wide, the liquidity is likely higher, and we are using the SPR’s capacity and America’s very low borrowing costs to effectively do an arbitrage so we collect the futures discount over time.
I would also question the multiplier calculations in the post, in a way that is a problem for both plans. It is not so easy to increase your production of oil in the medium term to take advantage of the puts without increasing your production over a longer period. That’s how physical oil production works. If you give me put options on some of the oil, that is great, but are you going to give me price certainty on the life of the well? If not, that’s what I am committing to and where the big risk is, when decarbonization and hostile governments might drive the oil price very low. Longer term commitments don’t seem credible here. If oil crashed to $20 a barrel, you are not getting your bailout. If anything, there will be calls to take back this ‘government giveaway’ of the puts.
Thus, I still favor buying futures over selling puts. I do think selling puts, provided we can get reasonable prices, is better than doing nothing.
Throughout the protracted dispute, opponents again and again made the same assertion: removing parking on Skillman to make way for street-safety features would hurt local merchants.
The more interesting claim is that business owners are generally terrible at knowing what is good or bad for their own business, or more politely that they are ‘unsophisticated market participants.’
In general I find the claim highly plausible. I totally believe that a chain store owner is going to meetings opposing traffic calming measures saying ‘most of my customers drive’ without having ever stopped to check the composition of his customer base and that he’s completely wrong about it (although this one in particular could still be right, we don’t know.)
To me this is yet another example of the generalized Leaders of Men phenomenon. Small business owners are the people who are willing to step up and run a small business, with all the risk and annoyances and hard work that entails. They are the ones who see that this is generally a superior path to having a job, and/or have the passion for the operation, with or without a side of massive tax fraud.
Even things that would potentially make a big difference, like knowing your customers, are far more optional if there are not big decisions relying on that knowledge. Advocating against a bike lane does not count here. That goes double for a franchise. Franchising is all about, as I understand it, getting to run a small business without having to understand the business and without the need to make strategic decisions beyond your location and franchise. You are leveraging your willingness to do the hard work and strike out on your own, and get to use a proven formula. Nice.
What about the landlord hypothesis here, that obviously more construction lowers the market equilibrium rent but landlords are perhaps not able to solve for the equilibrium and might respond by raising rents instead? I mean, sure, some of them will have the instinct to try doing that. Then reality will slap them in face in the form of no tenants until they realize their mistake. Knowing the economic impact of construction is not a core competency to being a landlord. Noticing that no one is renting and adjusting to that is a core competency.
The danger is if the landlords were all previously setting the rent below equilibrium. We have examples of this. We recently saw that in Santa Cruz every apartment application is completely mobbed by students who will take anything sight unseen at the listed price, and fly in to take a fake tour so they can try this, which would to me be a damn clear sign I should try, I don’t know, doubling my asking price and seeing what happens. I can always lower it again. If new construction serves as an ‘excuse’ in some sense to allow the fools to raise rents, then rents might go up in that spot, or go up faster. It’s possible.
Which is why existing homeowners in such areas are so eager for new construction, to allow them to charge higher rents on existing properties. Oh, wait.
(In this case, the way rents rise is that landlords expect rents to rise and thus raise rents, so it is a true case of not being able to have it both ways. If the landlords thought new construction would raise rents they would support new construction.)
According to the theory of Moral Mazes, any organization, including any government agency, will have increasing problems over time unless something disrupts that path.
It makes sense, as one way to mitigate this issue, to every so often shut down agencies and launch new ones to replace them. Doing so to split and clarify roles is one reason. Another is to group together similar roles. To a large degree the real (best) reason is to shake things up and allow the project to periodically begin anew.
Biden Administration, for the second time, responds to the threat of a lawsuit against student loan ‘forgiveness’ by editing out enough beneficiaries to deny standing to the lawsuit. That does not inspire confidence in the core legal theory being used. I do strongly disagree with the quote here’s observation that the failure to anticipate these objections is shocking, it seems highly predictable and these types of things keep happening. Also, if you’re in the right group, message the senator from East Virginia.
Lindt wins court case ordering the destruction of Lidl’s copycat chocolate bunnies. Bunnies, bunnies, it must be bunnies. As a bonus, they’re also midgets. My instincts are split on whether this is over the line, so it would be fair to say that this being decided differently by different courts is a sign of properly calibrated copyright law.
Court rules that under copyright law, a game must compensate tattoo artist for realistic depiction of someone’s body in a game, which could imply fees on public appearances and such if principle became enshrined. Luckily they awarded miniscule damages this time. Another good reason not to get tattoos.
Authors push back against the weaponization of copyright against libraries. I’ve seen a bunch of similar things recently, like someone telling kids how to access Neil Gaiman books for free via the Brooklyn library system and apologizing to Neil for it, only to have Neil Gaimen reply to never apologize for helping kids access books. Which is great, and also if you don’t have that attitude you don’t have the ability to write like Neil Gaimen. 1
Hair Council in UK calls for mandatory registration of hairdressers. One wouldn’t want unknown people running around cutting hair. Too much competition.
For those who think we make reasonable decisions on what to sell or not sell over the counter versus require prescriptions, a reminder of what we do for contraceptives.
A reasonable person would conclude there is something systemically wrong with the countries in red on this map.
New bill in NYC pays $43.75 for any resident reporting a photograph of a car blocking a bike lane, via 25% of the resulting fine.
Few disagree that civilian enforcement would end up generating more tickets. New York City’s citizen reporting program for idling vehicles has been in effect since 2018. There were 12,267 reports in 2021, up 35% from 2019. Roughly 92% of those reports resulted in tickets, netting the city $2.3 million and $724,293 for the civilians who reported violations, according to the Department of Environmental Protection.
There are equity concerns, because these days it’s all about equity not efficiency.
Sarah Kaufman, interim executive director of the New York University Rudin Center for Transportation, notes that citizen complaint programs have raised equity concerns. “Wealthier residents tend to call in more and report issues,” Kaufman said. “In every city that has a 311 system it tends to be whiter, wealthier residents who are calling.”
What is odd is that this should be exactly backwards. If I see a car blocking a bike lane, am I going to stop to take a photo to collect $43.75? I might, if the system is easy as ‘carry an app on your phone, take the photo, and the rest is automatic’ since it takes one minute for plausibly $40 in equity. If I’m not in a hurry, that’s a great deal, and I have no ethical problem ticketing people who illegally park.
It makes sense that when the 311 system doesn’t give out a financial reward that the wealthier residents call in more reports, because they are more concerned with norm enforcement and with general policing (in the broad sense) of goings-on in the neighborhood. When the motivation shifts to ‘get the bounty’ this should reverse itself. If you told me it didn’t, I would assume this was a ‘snitches get stiches’ situation of some kind where there were strong norms against reporting things to authorities, strong enough to stop anonymous parking complaints, which would be impressive.
Matt Yglesias proposes reducing mass incarceration by more reliably catching criminals and preventing crime. I am not concerned with whether the measures here are punitive. I am concerned about the privacy and surveillance implications that seem under-considered.
We Should Build Houses In Places People Want to Live
Scott Sumner offers thoughts on California’s recent YIMBY wins. His model here is that a tipping point was reached in which the winners from deregulation were so massive compared to the losers that the YIMBY coalition was able to win. That certainly seems like part of the story. Unions actively went against the central ultra-greedy Building Trades union because they got sufficiently desperate for both the work that comes with construction and the actual need for the housing that they went against the ‘only union labor can ever be used even though there literally isn’t enough union labor available to hire’ political blackmail price. I would also place large weights on a cultural shift and better advocacy and argumentation on the subject, and for realizing that the fight needed to shift to the state level. I don’t think California being by far the largest state is a coincidence. The other path is to reduce to the street level so streets can play off against each other to capture the additional land values.
Commenters note several ‘next man up’ issues here. First, ‘affordable housing’ requirements, also known as ‘sell some of what you’ve created for much less than it costs to build’ are not capped, so in theory one could require 100% ‘affordable housing’ and kill all projects. Second, that property taxes in California are really messed up in ways that disincentivize building. That’s an interesting one I don’t fully understand. It could work the other way, if lots of properties can’t be taxed then there should be that much less fear of lowering their value, whereas new property can be taxed (such as via ‘affordable housing’ requirements, also straight taxes) more easily. We know it is going to change hands for Prop 13.
California also seeing a surge in rent control. How much of this is a response to a complete lack of new construction causing despair, and how much of this is intentionally being done to prevent new construction in response to state-level pressure?
San Francisco is going to have a Proposition D and a Proposition E. They had a debate. Proposition E, it seems, is a ‘show them we mean business’ proposal that seems like it will clearly make things worse. Proposition D’s case for why one should ever vote for a proposition is that the city charter has provisions that can’t be removed any other way, and it seems clearly less terrible. So likely worth supporting that.
Gated: Matt Yglesias on why we should allow windowless bedrooms. Which in turn allows commercial spaces to be translated into apartments. Which in turn will save a bunch of downtowns, where a lot of commercial real estate sits idle but would be worth quite a lot as apartments, which would also stabilize rents for everyone and generally be a huge win for America.
Also, why do bedrooms need windows? Serious question.
Kelsey explicitly points out that the communities in question did a great job identifying Covid-19 risk early and then invested too much in prevention, so much so that doing nothing at all would have been better. This seems strongly correct on both counts. Which makes it funny to see Jefferey then use it as a precursor.
In expectation I believe Kelsey is right, especially if you consider the hours debating how much prevention to be doing and what would that prevention be. That does not mean there wouldn’t be a level at which one should flee some areas, and I am not confident I know what that trigger should be. I do know that a test would be insufficient.
Also, for the win, although rationalists would have worked better:
Visions of the Future (0th Draft Thoughts at best but hey)
This is contrasted with Theil’s claim that the only three futures Europeans can see are Sharia law, China-style tehno-totalitarianism and hyper-environmentalism. I am happy to see Noah’s optimism that in particular Europeans will turn away from degrowth now that profit, growth, abundant energy and decarbonization are all aligned. I fear this is a misunderstanding of the core motivations involved. In the middle of an energy crisis and a climate crisis, they are shutting down nuclear plants.
The key question is what is standing in the way of the abundance agenda having a ‘concrete vision’ of the futures where we don’t get transformative AGI. What is confusing to me is why this seems like it is so hard.
While this could be fleshed out more of course, the concrete vision of this positive future is that it is the present plus some technological upgrades, except that the economics of life work even better than they did for the right people in our golden age of economics working, and people do not feel under constant threat of failure. The vision is that people live lives, and do the things they want to be doing, while we stop holding them up for various signaling games and rent payments unless someone wants to opt into those systems.
Energy is dirt cheap. Housing is affordable and most areas are walkable with some combination of mass transit and cheap self-driving taxis. Health insurance is available for cheap that won’t break the bank, as we’ve sorted out which medicine is useful and which is Hanson-style signaling-that-we-care. We’ve gotten over our safety obsession largely because everything is so vastly safer. One can relax while raising kids and gets support doing it. All the electronic entertainments of history are at our fingertips almost for free, we learn how to have responsible social media. There are regular third spaces where people go to be among others or do or learn various things since life is better that way.
The only tricky part is the whole ‘jobs’ problem. Where will all the jobs come from?
Of course, all the other visions have the some version of the same issue. The ‘degrowth’ vision has both a lot more work needed per person that’s a lot less fun to do, and also a lot less jobs, and solves the problem by having most of the people not exist. The totalitarian vision is presumably that people work enforcing totalitarianism, which is a very good example of why jobs are centrally a cost rather than a benefit. The religious vision involves removing half the people from the labor force and also using the degrowth ‘everything is harder to do so there’s more work’ tactic.
That still doesn’t provide an answer. One answer is that ‘jobs’ are a benefit in the sense that, while unemployment that amounts to idle uselessness is actually worse than ‘doing useless things all day,’ that ‘doing useless things all day’ option still seems pretty terrible compared to living life and that it’s our society that turns the no-job situation into this personal death spiral. Certainly if the physical need for work was down by half and the economics of the cost of living reduced that by half, one can work half time, or work when one feels like it, or work inefficiently in the way you enjoy or that helps you grow or what not, and that seems fine. So does a universal basic income, if automation gets far enough along to create a real issue of ‘oh look we have everything we want without working too much.’
Another answer is that there are plenty of mostly unpaid jobs out there that can support unlimited numbers of people, so if we don’t need more work done and we still have enough for everyone, then working one of those solves the ‘unemployment’ concern. What are some of these mostly unpaid jobs?
Rock star. Athlete. Actor. Activist. Writer. Comedian. Podcaster. Influencer. Networker. Social climber. Party thrower. Game player, competitor, expert, speed runner, organizer, store owner, streamer or designer. Open source software developer. Editor of Wikipedia. Volunteer, say at the shelter or the old folks home. Parent. Cook. Gardener. Craft brewer. Philosopher. Professor. Tour guide. Super fan. Friend.
And so on. Attach ‘would be’ to any or all of those.
The core idea is that many people intrinsically want to do this. A much smaller number can ‘earn a living’ doing it at one time, and when they do, they have infinite competition so the living mostly isn’t great. Which is fine, if you don’t really need to earn a living with at least a lot of your time.
Then there are the entrepreneurs. Noah thinks there’s a lack of vision there. That seems wrong. The vision of entrepreneurship is ‘let my people trade,’ pure and simple. Remove the barriers to small business, and those who want to go that route do fine. There is so much surplus value in Doing Business, it’s crazy.
Thus, if the Vision of the Past is everyone gets to live The American Dream, the Vision of the Future is everyone gets to live The Dream, their own dream, where they get to marry and raise a family (or not, if they prefer) and have a social life and pursue their own particular dream stuff and their own choice of status hierarchy, and yeah they mostly never get the full dream but they do make friends along the way.
My basic modus operandi for a while has been kind of like ‘do and make things from a pool of infinite potential work’ and then sometimes people choose to give me money and often they don’t and that’s fine too. Would others have a lower hit rate on that and climbed on average less far?
Sure, absolutely, and also so what? Doesn’t matter. That’s fine. We’ll figure it out.
Noah says there needs to be a ‘place for conservatives’ in the liberal version of this. I don’t see why that’s a problem. If you need to introduce a patch to make there be a place for people with a different point of view, your mistake has already been made.