Streetwise Professor

August 27, 2020

Is-Ought on the Streets

Filed under: CoronaCrisis,Politics — cpirrong @ 10:19 am

The Cancel Klan is going after Tucker Carlson. Again.

His thought crime? This:

“We do know why it happened, though. Kenosha devolved into anarchy because the authorities abandoned the people,” Carlson said. “Those in charge, from the governor on down, refused to enforce the law. They’ve stood back and watched Kenosha burn. Are we really surprised that looting and arson accelerated to murder?”

For which he was accused with advocating vigilantism.

Rather than judging him on the basis of one part of a 7+ minute monologue, watch the entire thing:

The criticism of Carlson is a classic example of the is-ought fallacy. Carlson was, in essence, saying what is–explaining the reason for what is–by solving for the equilibrium. It’s not rocket science. It’s not game theory that requires elaborate equilibrium concepts or refinements.

It’s very basic: when authorities fail to keep peace and order, people will act in what they perceive to be self-defense. When the civil law breaks down, the law of the jungle–the state of nature, under some theories–takes over.

What’s amazing is that this sun-rises-in-the-east insight is considered an incitement. In fact, it is a lament. It is clear that Carlson is hardly happy at the prospect. Nor am I. He is not advocating it. Nor am I. He is saying, merely: you reap what you sow.

Is that so complicated?

And America’s cities are sowing a grim harvest of violence and despair as the result of two very bizarre and seemingly incompatible failures of the governing classes: the complete abdication of law and order in many major cities, combined with the draconian exercise of government power allegedly intended to achieve the (entirely futile) goal of eradicating covid-19.

That is, the governing classes in myriad states and cities have completely inverted the proper roles of government. They fail to exercise power and authority to perform their proper functions, but exercise the full power of the state to perform functions which are not just improper, but counterproductive. They kneel before the lawless, and crush the law-abiding under their heels.

The signs are everywhere. Look at Portland, which has been devastated by riots for nigh on to three months. Every night. (NB: protests happen during the day; riots happen at night.) The response of Oregon authorities–to shriek at the attempts of the Federal government to protect Federal property, and a complete unwillingness to get the riots under control. The mayor–with a sickly ironic choice of words–says that the riots will “burn out” eventually.

Yeah, Nero of the Columbia (ironic!): they will burn out figuratively because the city you allegedly govern will be burned out. Literally.

Or consider my hometown, Chicago, which has seen spasms of bacchanalia of violence over the past months. The looting has devastated the Magnificent Mile shopping district.

In a richly symbolic act, on several occasions the city raised the bridges over the Chicago River to prevent marauding looters from the South Side easy access to the ritzy north side of the river. Like a besieged medieval town raising the drawbridges over the moat in an attempt to stymie invading barbarians:

The devastation of riots and looting is tag teaming with the devastation wrought by the insane lockdown policies of local governments who compensate for their surrender of the streets by oppressing you, and the myriad restaurants, sellers of personal services (e.g., hair care), and small retailers that you patronize.

It was recently reported that 50 percent of the businesses in San Francisco have closed. Most will probably never reopen. If you live in the various Lockdown Lands–e.g., California, NY–you see boarded up store after boarded up store. 5th Avenue has become a shuttered ghost town. So have many other places.

Homelessness has exploded in many places–again, largely as a result of the abdication of civil authorities. San Francisco and Austin are two prominent examples.

It is so hard to build, so easy to destroy. I first went to NYC in the late-1970s, and traveled there a lot on business in the mid-1980s. It was a dangerous, dirty, dystopian place. In the late-1980s, the rejuvenation began. Notably, the first and crucial step of the process was restoration of public order, a process that hapless administration after hapless administration (crowned by the king of haplessness, David Dinkins) claimed was impossible. But the Giuliani administration started a virtuous cycle that made the city an attractive place to live (for people who like that kind of living) and a major destination for tourists.

And those three decades of progress have been erased, in a little over three months, due to a failure to keep order (e.g., the release of thousands of criminals back on the streets) and the imposition of a crushing order on the law abiding, especially law abiding small businesses. Crime has skyrocketed, and people–productive people–are leaving, almost certainly never to come back.

These are the wages of the most colossal government failure in American history. Failure from coast-to-coast; failure in the large cities on the coasts in particular.

You can cancel Carlson for pointing out the obvious, but you can’t cancel the obvious: when the duly constituted institutions of collective action fail to protect the lives, liberty, and property of large numbers of people, large numbers of people will take individual action, or emergent, unsanctioned, spontaneous collective action, to do what governments have failed to do.

In short, governments ought to protect lives, liberty, and property. When they do not, people will do so themselves. And that’s just the way it is.

August 18, 2020

California: Boom, Boom, Out Go the Lights

Filed under: Climate Change,Economics,Energy,Houston,Politics,Regulation — cpirrong @ 6:44 pm

Twenty years ago, California experienced its Electricity Crisis. Or, given current events (which will be the subject of what follows), may be known as the First Electricity Crisis. The problem in 2000-2001 was, in the main, a problem of insufficient generation, caused by a variety of factors. The ramifications of the supply shortage and resulting high prices for California utilities, ratepayers, and state finances were greatly exacerbated by a dysfunctional market design implemented only a few years before, in the mid-1990s. (When I gave talks about the subject, I used to quip: “California wanted to deregulate its power markets in the worst way. And it succeeded!”)

The lore of the crisis is that it was caused by Enron and other Houston bandits and their manipulative schemes. These schemes were not the cause of the crisis: they were the effect, and the effect of the dysfunctional market design, which created massive arbitrage opportunities which will always be exploited.

California is experiencing another crisis. It cannot yet rival the first, which went on week after week, whereas the current one has lasted about a week. But for the first time since Crisis I, the state is experiencing rolling blackouts due to a shortage in generating capacity.

The proximate cause of the problem is a massive heatwave which is causing high demand. A contributing proximate cause is low hydroelectric supply driven by a lower than average snowpack. But the underlying cause–and the cause that should get the attention of most Americans, including those who experience schadenfreude at the Insufferable State’s misery–is the Green Mania that has taken root in California which has made it impossible for the state to respond to demand spikes in the way power systems have done around the world for nigh onto a century.

In particular, California has adopted policies intended to increase substantially the share of power generated by renewables. This has indeed resulted in massive investments in renewables, especially solar power, which alone now accounts for around 12,338 MW.

But this capacity number is deceiving, because unlike a nuclear or coal or combined cycle natural gas plant, this is not available 24/7. It’s available, wouldn’t you know, when the sun shines. Thus, during the mid-morning to late afternoon hours, this capacity is heavily utilized, but during the evening, night, and early morning contributes nothing to generation. At those times, California draws upon the old reliables.

But that creates two problems, a short term one (which California is experiencing now) and a long term one (which contributed to the current situation and will make recurrences a near certainty).

The short term problem is that during hot weather, demand does not set with the sun. Indeed, as this chart from the California Independent System Operator shows, today (as on prior days) demand has continued to grow while solar generation ebbs. This figure illustrates “net demand” which is total demand net of renewables generation. Notice the large and steady increase in net demand during the late afternoon hours. This reflects a rise in consumption and not matched by a rise in solar generation before 1400, and a fall thereafter.

Go figure, right? Who knew that the hottest time of day wasn’t when the sun is at its height, or that people tend to come home (and crank up the AC) when the sun is going down?

Here’s the plot of renewables generation:

Note the plateau from around 1000-1400, and the decline from 1400 onwards–during which time load increased by about 10,000 MW.

So gas, nuclear, and (heaven forfend!) coal have to fill the growing gap between load and non-dispatchable renewable generation. They have to supply the net demand. Which brings us to the longer term problem.

The growth in solar generation means that conventional and nuclear plants aren’t generating much power, and prices are low, during the hours when solar generation is large. Thus, these plants earn relatively little revenue (and may even operate at negative margins) during these hours. This deterioration in the economics of operating conventional plants, combined with regulatory and political disdain for nuclear and coal has led to the exit of substantial capacity in California. A large nuke plant shut down in 2015, all 10 coal plants in the state have shut down (though three have converted to the environmental disaster that is biomass), as have many gas plants. In 2018 alone, there was a net loss of around 1500 MW of gas capacity, and from 2013 the net loss is about 5000 MW–over 10 percent of the 2013 level. (NB: the shortfall in capacity the last few days has been around 5000MW. Just sayin’.)

And note–demand has been rising over this period.

Notionally, the loss in nuclear and conventional capacity has been roughly matched by the increase in solar capacity. But again–that solar capacity is not available under conditions like the state has experienced over recent days, with hot weather contributing to high and rising demand in the late afternoon when solar output is declining. That is, these forms of capacity are very imperfect substitutes. They are most imperfect in the afternoons on very hot days. Like the last week.

In a nutshell, at the same time it massively incentivized investment in renewables, California has not incentivized the necessary investment in (or retention of capacity in) conventional generation. That mismatch in incentives, and the behavior that results from those incentives, means that from time to time California will have inadequate generation. That is, California has not incentivized the proper mix of generation.

So how do you incentivize the retention of/investment in conventional capacity that will remain idle or highly underutilized most of the time, in order to accommodate the desire to increase renewables generation? There are basically two ways.

The first way is to have really, really high prices during times like this. Generators will make little money (or lose money) most of the time, and pay for themselves by making YUGE amounts of money during a few days or hours. This is the theory behind “energy only” markets (like ERCOT).

The problem is that it is not credible for regulators to commit to allowing stratospheric prices occur. There will be screams of price gouging, monopoly, etc., and massive political pressures to claw back the high revenues. This happened after Crisis I, as more than a decade of litigation, and the payment of billions by generators, shows. Once burned, twice shy: generators will be leery indeed about relying on government promises. (A David Allan Coe song comes to mind, but I’ll leave that to your imagination, memory, or Googling skills.)

Relatedly, who pays the high prices? Having retail customers see the actual price creates some operational problems, but the main problem is again political. So the high prices have to be recovered through regulated retail pricing mechanisms that give rise to the credible commitment problem: how can generators be sure that regulators will actually permit them to reap the high prices during tight times that are necessary to make it worthwhile to maintain the capacity?

That is, for a variety of reasons energy only pricing faces a time consistency problem, and as a result there will be underinvestment in generation, especially when renewables are heavily supported/subsidized, thereby reducing the number of hours that generators can pay for themselves.

The other way is the Klassic Kludge: Kapacity markets. Regulators attempt to forecast into the future how much capacity will be needed, and mandate investment in that amount of capacity. Those with load serving obligations must pay to buy the capacity, usually through an auction mechanism. The idea being that the market clearing price in this market will incentivize investment in the capacity level mandated by the regulators.

A Kalifornia Kapacity Kludge was proposed a few years back, but the Federal Energy Regulatory Commission shot it down.

All meaning that California leapt headlong into the Brave New Green World without the market mechanisms (either relatively pure, like an energy only market with unfettered prices, or a kludge like a capacity market) necessary to bridge the gap between demand and renewables supply.

So what happens? This happens:

California’s political dysfunction makes it a near certainty that it will not implement reasonable market solutions that will provide the right incentives, even conditional on its support for renewables. Indeed, it is almost certain that it will do something that will make things worse.

Milton Friedman once said that inflation is always and everywhere a monetary phenomenon. Given that the major power crises in recent years–in California, in Australia, and a near miss in Texas last year–have involved renewables in one way or another, I have an analog to Friedman’s statement: in the future, always and everywhere power crises will be a renewables phenomenon.

And this is why Americans should pay heed. Whatever ventriloquist has his hand up the back of Biden’s shirt has him promising a massive transition towards renewable electricity generation, beyond the already swollen levels (swollen by years and billions of subsidies). A vision, which realized, would result in California’ s problems being all of our problem.

So look at California like Scrooge did the Ghost of Christmas Future. And be afraid. Be very afraid.

August 12, 2020

The Real Meaning of the Gettysburg Battlefield

Filed under: Uncategorized — cpirrong @ 4:11 pm

After Trump’s suggestion that he would give his nomination acceptance speech at the White House triggered potential legal objections, his campaign mooted the possibility of giving the speech at the Gettysburg battlefield. This triggered paroxysms of insanity that are remarkable even against the background of repeated paroxysms of insanity that have been playing on a loop for almost 4 years now.

Leading the Stupid Parade was CNN’s Jerry Diamond: “This is a President who has consistently positions himself as a defender of Confederate symbols and monuments to Confederate generals.” He was soon joined by assorted leftists, notably Meathead himself, Rob Reiner, who repeated the theme that going to Gettysburg was a dog whistle to racists and Neo-Confederates.

The clownery here is just too much. Anyone making these statements has no clue about Gettysburg, the history of the battlefield, or the monuments there. No. Clue. Whatsoever.

To start with, Gettysburg was the turning point in the war against slavery. Recognizing this, in November 1863 President Lincoln gave a speech at the dedication of the National Cemetery on the battlefield. This speech just happens to be the most famous oration in American political history, and arguably in the entire English language. For those who have forgotten, or never knew (which, alarmingly, is a very real possibility):

Fourscore and seven years ago our fathers brought forth, on this continent, a new nation, conceived in liberty, and dedicated to the proposition that all men are created equal. Now we are engaged in a great civil war, testing whether that nation, or any nation so conceived, and so dedicated, can long endure. We are met on a great battle-field of that war. We have come to dedicate a portion of that field, as a final resting-place for those who here gave their lives, that that nation might live. It is altogether fitting and proper that we should do this. But, in a larger sense, we cannot dedicate, we cannot consecrate—we cannot hallow—this ground. The brave men, living and dead, who struggled here, have consecrated it far above our poor power to add or detract. The world will little note, nor long remember what we say here, but it can never forget what they did here. It is for us the living, rather, to be dedicated here to the unfinished work which they who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us—that from these honored dead we take increased devotion to that cause for which they here gave the last full measure of devotion—that we here highly resolve that these dead shall not have died in vain—that this nation, under God, shall have a new birth of freedom, and that government of the people, by the people, for the people, shall not perish from the earth.

“Dedicated to the proposition that all men are created equal.” A paean to Slavocracy if I ever heard one! “A new birth of freedom, and that government of the people, by the people, for the people, shall not perish from the earth.” The authoritarian’s creed, right?

That is what Gettysburg means. That is what those who speak there pay homage to. That is what politicians who speak there want to be associated with.

Like FDR, in 1938, at the dedication of the Peace Memorial, on the occasion of the 75th anniversary of the Third Day of the battle.

Speaking of the National Cemetery, it is the resting place of over 3,500 Union dead. Sure, there are seven Confederates buried there. By accident–they were mistakenly identified as Federals. Except for the remains of Confederate dead undiscovered in the years after the war–whose bones still rest in those lost graves–the bodies of the Johnnies were removed to the South, to places like Hollywood Cemetery in Richmond.

So honoring the dead there means honoring the Union dead.

As for monuments, according to the National Park Service, there are 1,328 monuments at Gettysburg. Over 1,100 are to Union units.

Anyone who is remotely familiar with the history of the battlefield (which certainly excludes Meathead and other meatheads who bloviate on the subject), the moving political force behind the creation of the park (and other parks at Chickamauga, Shiloh, and Antietam) were Union veterans. Gettysburg in a particular was intended to be a shrine to the Union cause. The most important single figure in this movement was the notorious Dan Sickels, wounded on July 2, 1863.

Many Union veterans were deeply hostile to any recognition of Confederates on the battlefield. This was a monument to their achievement, in the name of Union, and for some the end of slavery.

Virtually every Union regiment and battery that fought at Gettysburg is memorialized there in granite and bronze. The veterans, and sometimes the states their regiments were recruited in, paid to create these sentinels in stone.

Monuments to any Confederates, or any Confederate figures, were placed in the park much later. The 11 states that contributed soldiers to the Army of Northern Virginia have placed monuments there. Some–like Virginia’s and North Carolina’s–are large and impressive. Some–like Texas’–are more modest.

The larger memorials (notably Virginia’s) do have Lost Cause resonance. But for the most part they recognize the bloody toll that the citizens of these states paid on three days in July, 1863.

Interestingly, one of the most recent additions to the monuments at Gettysburg is a statue of James Longstreet. After the war, Longstreet became a Republican. He defended the Reconstruction government in Louisiana, and attempted to defend blacks against the depredations of white supremacists opposed to said government, and to the civil rights of blacks.

For which he was vilified in the South.

I have been to Gettysburg over two dozen times, the first time when I was 9 years old. I have walked every foot of that field from Benner’s Hill to Big Round Top, and probably seen well over one thousand of these monuments, and read the text on most of them. Based on that, I can state definitively that anyone who believes it is Stone Mountain in Pennsylvania is beyond delusional.

Yes, there are monuments there that might warm the cockles of a Lost Causer’s heart, but overwhelmingly it is a massive memorial to the Union cause and Union sacrifice. Indeed, Gettysburg was arguably the singlemost important milestone in making the Cause a Lost one.

Most importantly, it is the site of the Gettysburg Address, which is the seminal speech that framed the cause for which the Union fought, and set the course for the post-war order. A course (according to the Emancipation Proclamation issued six months before the battle and then months before the speech) that included the end of slavery.

But the left (particularly in the media) is totally obsessed with playing Six Degrees From Slavery. In their twisted, fevered brains, if Trump does anything that is at all associated with the Confederacy, he is doing it because it is associated with the Confederacy. But a sensible person, and one who knows the battlefield, the history of the battle, and the history of the battlefield-as I do, and have since I was a boy-knows that the greatest associations are with the fight for freedom and democracy, and the fight against slavery.

August 5, 2020

Counting the Cost of Covid Hysteria

Filed under: CoronaCrisis,Economics,Politics — cpirrong @ 1:30 pm

The covid hysteria continues. There’s really no other word for it. Responses to it have slipped the bonds of reason, and reasoned debate.

There are many manifestations of the hysteria. I will focus on two–hydroxychloroquine and lockdowns.

Hydroxychloroquine has been a hot button issue ever since Trump gave an equivocal endorsement of it months ago. The most recent demonstration of how radioactive it has become was a rally of sorts by practicing physicians in DC whose endorsement of a therapy regimen including hydroxychloroquine, antibiotics, and zinc unleashed a frenzy of criticism, retribution, and censorship.

The most ebullient endorsement of the therapy regimen came from a Houston physician, Stella Immanuel. Now normally Dr. Immanuel would check important boxes in Progland–she’s an African American (literally, born in Ghana) female. But her praise for hydroxychloroquine unleashed a fury of abuse on her. In addition to being a physician, Dr. Immanuel is a devout Christian who believes in demons, and who focuses on spiritual as well as physical health. These views became the focus of criticism, in the style of ad hominem attacks that have become the staple of what now passes for public discourse. The substance of what she said, and her empirical claims–that her treatment using hydroxychloroquine had impressive clinical results–were ignored altogether.

Well, that’s not quite right. Her views were not ignored, exactly. They were actively censored by the only authorities that currently matter–Facebook, Google/YouTube, and Twitter–who consigned the video of her impassioned presentation (which had received around 14 million views) to the Memory Hole. This blatant censorship was accompanied with the by now familiar paternalistic tut-tutting from our tech overlords that Dr. Immanuel’s views were not consonant with the pronouncements of government authorities (e.g., the CDC) and the WHO. (Bodies, it must be emphasized, which have covered themselves in ignominy in the past months, but why should that matter, right?)

If Facebook, Google/YouTube, Twitter have arrogated for themselves the role as enforcement agents for government ukasis, shouldn’t they be subject to the First Amendment, namely its prohibition of infringement on free speech?

I further note that if conservatives had unleashed such a stream of invective against a leftist African American woman the screams of racism and sexism from the very leftists currently imprecating Dr. Immanuel would shake the heavens. But if the left didn’t have double standards, it would have no standards at all.

But Dr. Immanuel should consider herself lucky. She’s still employed One of her fellow physicians on the Supreme Court steps, Dr. Simone Gold, was fired for her temerity in speaking out by her employer of 25 years.

This further illustrates the double standards issue. For months “front line” medical personnel, doctors and nurses, have been lionized, and cloaked with moral and intellectual authority because of their experience, and the risks they ran. It has not been as maudlin in the US as in the UK, with its clap for the NHS nonsense, but the near beatification of health care professionals has been a thing here. But now we have “front line” medical professionals with experience–by now far more experience than those lionized in March or April–speaking against the Party Line, and they are no longer sanctified–they are demonized. (Maybe Dr. Immanuel was onto something.) Block anti-lockdown protests in your scrubs–Hero! Express views on a treatment that contradicts the authorities while dressed in your white coat–charlatan who must be silenced!

The fact is that the evidence on hydroxychloroquine is on balance favorable, and at worst equivocal. Especially if given in the early stages of symptomatic covid, and crucially if given in conjunction with other medications, notably zinc, it does appear to reduce the risk of death. Further, as a drug that has been dispensed billions of times over decades for a variety of conditions its risks are known, and relatively benign.

So what’s the downside of employing the therapy? It offers some prospect of beneficial clinical results. There is not a readily available alternative that has proven superior. The downsides are modest.

One could get the idea that some people don’t want a treatment.

One of the critics of the studies of hydroxychloroquine is the insufferable, and insufferably arrogant, Dr. Anthony “Where’s the Camera?” Fauci. He caviled a study (described at the above link) at the Henry Ford Hospitals, claiming that it was flawed because it was not a controlled random experiment, but an observational study. Well, a controlled random experiment would be preferable, but observational studies can provide valuable information if done properly, as it appears the Henry Ford study was. Further, most of the anti-hydroxychloroquine studies, including the notorious, fraudulent Lancet study, were observational. Further further, Dr. Fauci’s main claim to fame was a study done in the 1980s that happened to be . . . an observational study.

The Insufferable Fauci provides a segue into the next subject of hysteria–lockdowns. Fauci claimed that the US record in combatting covid is inferior to that of Europe because this country did not lockdown as thoroughly.

Bullshit.

This man who claims to be all about the data and evidence can make such statements only by ignoring the data and evidence. There have been numerous studies of how cross-jurisdiction variations in various metrics (deaths, cases, etc.) of the severity of covid outbreaks vary with the timing and severity of lockdowns. (One example is here, but there are many more.) The basic answer is: likely not at all, but at most, hardly at all.

At best the evidence supports the view expressed early in the outbreak (but curiously discarded) that restrictions on social interactions could affect the timing of the progression of the disease, but not its ultimate toll. That is these policies can affect the shape of the curve, but not the integral under the curve.

Why? Because virus gonna virus. A point that I made early on, and many bona fide experts did as well.

But we are seeing continued calls for a resumption of–indeed, and intensification of–lockdowns. One example is the state of Victoria in Australia (where Melbourne is located). The state has gone into a severe lockdown–with little effect on the spread of the virus. In the United States, Fauci insinuates that more intense lockdowns should be considered, and other figures go beyond insinuation. Minneapolis Fed president Neil Kashkari (like Fauci, a long-time apparatchik who has risen to a position of prominence and power despite little demonstrable record of actual achievement) has called for a “really hard” six-week lockdown. You know, to “save the economy.”

We’ve already seen the economic cost of less than really hard lockdowns. In the US, economic output contracted by 9.5 percent, and unemployment skyrocketed. And we’re the lucky ones. In Europe, the contraction was ~12.5 percent. Please spare us any more rescues.

And again, despite variations in the timing, design, and severity of the lockdowns that wreaked this economic devastation, the progress of the illness was remarkably similar. Sweden did worse than Denmark, but better than France and other European countries–and it suffered only an 8.5 percent hit to GDP.

I could go on and recount other manifestations of hysteria. Masks, for instance. But this post is already long enough.

The ultimate question is why the hysteria? This is a subject deserving of books (plural) not blog posts. In the US, the answer is largely political. As Thomas Sowell noted in Conflict of Visions, views on a wide variety of issues are highly correlated, and this is demonstrated in spades by covid. The left is virulently (pun intended) anti-hydroxychloroquine and pro-lockdown (and mask). The right the reverse. This divide is only aggravated by the pro- and anti-Trump divide.

Related to this is the interest of the governing class. The Faucis and Kashkaris and Democratic governors and mayors and county executives of the US (and their foreign equivalents) quite like the vast powers that they have arrogated in the name of public health. They have achieved unchecked authorities that they could only have dreamed of in January. Why should they want to stop now? And why should they want to tamp down hysteria, when it has worked out oh-so-well for them? Of course they don’t–hell, they have every incentive to stoke it, and by all evidence they are doing so with a hearty assist from the hopeless media.

The cost of this hysteria has been high, economically, and in terms of the collateral damage (including health and mortality) of economic collapse. The benefit is imperceptible. And that is almost certainly why our tech overlords are hell-bent on suppressing those who dissent.

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