Streetwise Professor

The Trump administration announced two policies over the last week. It batted 500, and its slugging percentage is 2000. It had one strikeout and one home run.

The strikeout was the CDC moratorium on evictions, due to the covid panicdemic. The short term political benefits are manifest here, but the longer term consequences are malign–as is usually the case with emergency measures.

This is a classic case of the seen and unseen. The seen will be fewer evictions prior to the election–although it should be noted that to the extent that there are gains from trade between landlords and tenants in adjusting the terms of rental contracts due to exigent circumstances, the main impact of this is to change the balance of negotiating power between them, rather than to affect the number of evictions. In a frictionless Coasean world, the policy would not affect the number of evictions. In the real world, there are bargaining frictions, so the policy will reduce the number of evictions, but I am guessing that this (efficiency) impact will be small. Thus, the main impact of the policy will be distributive.

But perhaps that is not surprising, because the primary engine of politics is the distribution of wealth and income.

The longer run impacts are unseen. To the extent that this “emergency” policy is considered to be a precedent, and that such moratoria are more likely in the future, the effect will be to cause rents to rise, and the quality and quantity of rental units to decline. That’s what expropriation of property rights does. These higher costs will be borne by all renters.

Thus, in the long run, the policy is inefficient. The welfare losses will be borne not primarily by landlords (due to essentially free exit from the sector in the long run), but by the alleged beneficiaries–renters. But those people–and pretty much everybody–will not connect the higher rents and crappier apartments to the policies allegedly adopted for their benefit.

The four-bagger is the ban on requiring federal workers to take courses rooted in “critical race theory” or theories of “white privilege” or “systemic racism” and the like. These programs are beyond malign. They are oppressive and sow strife, rather than ameliorate it.

Moreover, they are based in lies.

Any “theory” that is self-labeled “critical” is pseudo-scientific rubbish. If you want to do a deep dive into the subject (warning: you are risking your mental health if you do!), I recommend the New Discourses website. I will just hit a few highlights–or, more accurately, lowlights.

As New Discourses points out, critical theories tend to be rooted in Marxism, post-modernism, or a Frankenstein amalgam of both. To dive into the distinctions between Marxist and post-modern flavors of these theories is to court migraine. But there are some broad similarities that can be expressed succinctly.

To greatly oversimplify, but at the same time to capture the essence, critical theories deny objective truth. Instead, everything is “narrative,” and the narratives are simply brainwashing/propaganda intended to rationalize, justify, and perpetuate the power of certain classes. In the case of critical race theory, the class is white people.

These theories are essentially gnostic. The theorists claim to have special insights into hidden structures of power relationships, based on their unique ability to “deconstruct” (i.e., decode) hidden meanings in ordinary speech, literary texts, and even scientific works.

Ironically, the theorists claim that nothing that anyone else says is objectively true–but you are expected to take their deconstructions as truth.

The mechanism by which this process works is also unspecified. At least classic conspiracy theories involve identifiable conspirators, and acts of coordination among them. Theories claiming vast Masonic plots, for example, can at least point to secretive meetings among powerful people at Masonic lodges. But just how, exactly, do all white people (or all men, or all cis-people, or all hetero people, depending on the particular brand of critical theory) agree on the narrative, and agree to oppress The Other?

It is notorious that collusive arrangements are hard–and frequently impossible–to maintain, especially among large numbers of far-flung individuals, even if it is putatively in their collective interest for the conspiracy to succeed. How do these massive conspiracies survive the forces that make collective action very difficult to maintain, even within small groups, let alone within massive groups of strangers separated by space and time?

Critical theories do not even pose the question, let alone answer it: they basically advance a deus ex machina theory of causation.

Moreover, these theories tend to have the feature of pseudoscience that Popper pointed out eons ago: they are not refutable. The theory of “white privilege” (yeah, tell that one to my hillbilly ancestors and relatives, e.g., the Hatfields) is a perfect example. The premise is that all white people are racist. If you admit you are racist, well, QED. But if you deny you are racist, well, QED! Everyone is a winner! Your denial merely reflects your internalization of the white power structure and your steadfast refusal to admit it exists. Proof of how powerful that structure is!

The theory is always right. It cannot be disproven. That is the essence of pseudoscience.

The related theory of “systemic racism” is also pseudoscientific. It takes evidence of differences in outcomes among races as irrefutable evidence of racism (again produced by some unspecified coordination mechanism across hundreds of millions of individuals). Yes, one implication of the theory is that in a systemically racist society, blacks will experience worse outcomes (income, health, mortality, etc.) than whites. But there are alternative explanations for the same patterns that do not involve systemic racism. (Cf., inter alia, Thomas Sowell’s numerous books.)

That is, there are other hypotheses that are observationally equivalent to some implications of the systemic racism hypothesis. Rejection of the no-systemic-racism null does NOT imply acceptance of the systemic racism alternative hypothesis–a logical error that advocates of this theory repeat, usually at high volume and in high dudgeon. Other alternative hypotheses are also consistent with the rejection of the null. What is necessary is to find implications of systemic racism theory that differ from other theories that imply disparate outcomes, and to see which theory best explains the data.

But that’s where the Popperian element of pseudoscience kicks in: only racists deny that evidence of disparate outcome is not due to systemic racism.

The denial of objective truth in critical theories is a denial of all the premises of the Enlightenment, and all the methodologies of the Enlightenment–including the scientific method. Look around you, and witness all of the products of the Enlightenment that have freed you from the poverty, drudgery, and ignorance of the pre-Enlightenment. If you embrace critical theories, you are willingly throwing away all of those things.

Talk about Died of a Theory.

I would also note that there is a huge element of projection in critical theories, critical theorists, and those who embrace them. Recall that the core of critical theories is that they claim that social and cultural institutions, norms, and beliefs are merely instruments to advance and protect the power of one group (e.g., “white people” as if that is some kind of homogeneous group, cf., Ireland) over The Other. But it is abundantly clear that the advocates of critical theories have an overwhelming will to power. Deconstruction is merely a mechanism for them to dissolve existing institutions so that the gnostics can achieve the power to order things as they will. Thus, when those spouting critical theory say that everything is about power, they are revealing far more about themselves, than about the things and people that they critique.

And the fact that critical theories are merely a cloak to the will to power is exactly why the administration is absolutely correct in its efforts to banish the coercive propagation of such ideas to federal employees. Would that the administration find the legal means to banish it in other spheres as well, higher education included.

Two big covid-related stories have come out in the past few days. The first is that the CDC announced that only about 6 percent of those counted among the covid-19 death toll had no other cause of death listed. The vast majority of those counted as covid casualties had other co-morbidities, notably respiratory problems, diabetes, and obesity. Indeed, the average number of co-morbidities was 2.6 across the 150,000 or so deaths.

Some, like Trump, immediately seized upon this as evidence that only 9000 people had died from covid. We can’t have that, now can we? So immediately the usual suspects, notably Fauci and the media, pushed back, claiming that no, 150,000 is the true death toll. Media outlets in particular began “fact checking” the claim. (Quis custodiet ipsos custodes?)

Anyone who has done serious science, especially social science, knows that proving causation is difficult. Even defining what is meant by “to cause” is difficult to pin down. So arguments about how many deaths covid has caused are more likely to generate heat than light. In particular, in common parlance the idea of causation is zero/one, on/off: X caused Y, or it didn’t.

It’s better to think in terms of probability, e.g., what is the impact of covid the probability someone dies. A fair reading of the CDC report is that covid increases materially the probability that an aged, unhealthy, and especially aged unhealthy person dies prematurely, but it has a minor impact on the probability that an otherwise healthy person dies. (Even that conclusion is dicey, due to the lack of control groups, but leave that aside.)

Even though such a characterization could support an assertion that covid “caused” 150,000 deaths in the US, it is a devastating indictment of past, present, and likely future covid policy, in the US and elsewhere. Why? Because it means that one-size-fits-all-shut-everyone-in policies are grotesquely costly.

If covid is a very slight risk to healthy individuals, but a big risk to unhealthy ones (especially the elderly) then measures should be targeted at the at-risk population, leaving the rest of us to go about our daily lives pretty much normally. The indiscriminate, draconian measures involve huge pain for little gain, and arguably no gain relative to targeted policies.

As death rates–even based on the dubious policy of categorizing the death of anybody with covid as being from covid–have fallen, the bondage fetishists in government and the media have pivoted to another metric: covid cases, i.e., positive test results.

And that brings me to the next big story, one from the NYT no less: because of the nature of the standard testing method, polymerase chain reaction (PCR), it is possible to return a positive test when you are not presently sick, and/or not contagious–and never were!

According to the Times:

The PCR test amplifies genetic matter from the virus in cycles; the fewer cycles required, the greater the amount of virus, or viral load, in the sample. The greater the viral load, the more likely the patient is to be contagious.

This number of amplification cycles needed to find the virus, called the cycle threshold, is never included in the results sent to doctors and coronavirus patients, although it could tell them how infectious the patients are.

In three sets of testing data that include cycle thresholds, compiled by officials in Massachusetts, New York and Nevada, up to 90 percent of people testing positive carried barely any virus, a review by The Times found.

Think of it like distillation: the tests aren’t making wine, they’re making 199 proof stuff.

In other words, the case numbers are bullshit, if they are intended to measure how many sick, or more importantly, how many contagious people there are. A large fraction of the positives are in no danger, and pose no danger to others. (In previous posts, I outlined other reasons why case numbers are bullshit, e.g., the nature of the test regime, and changes therein over time.)

Put this together with the first story–that the risk of death from from covid among the healthy is small–and the one-size-fits-all policies that are currently justified based on the number of positive test results look even more insanely destructive. If you are healthy and get it, you are unlikely to die: if you have a positive test result, you are highly unlikely even to be sick or make anyone else sick. So why continue highly restrictive policies imposed on virtually everyone (particularly in places like California, let alone Australia and New Zealand which have descended into police states) based on something (a positive test result) that indicates negligible risk?

Thus it is particularly insane that very low risk populations (primary and secondary students, college students, professional athletes, college athletes) are subjected to severe limitations on their normal activities based on “spikes” in positive tests. The hysteria among college administrators is particularly idiotic: they are freaking out and cracking down over such spikes. University life has not returned to anywhere resembling normal even at universities, which, like mine, are formally “open” and offering some in person classes: on what are usually the busiest days of the year, the first couple of days of the semester, the UH campus is still a ghost town. (Not that I am surprised about the idiocy of administrators, mind you. Thirty years in academia means that I am anything but surprised.)

The bullshit nature of death coding–if someone tests positive for covid and dies, it is coded as a covid death–raises another serious question when combined with the hypersensitivity of the test results: the incremental impact of covid positivity on mortality may be smaller than the official numbers suggest, even among at-risk populations, because the “dose” of virus that generates a positive test may be far too small to have a meaningful health effect even on the sick.

Here’s where things get even more interesting. It is clear that there have been large numbers of excess deaths (i.e., deaths above historical averages) during the covid period. Indeed, the number of excess deaths exceeds the number of official covid deaths, leading some to conclude covid deaths have been undercounted.

But the ubiquity of testing in hospitals, plus the extreme sensitivity of tests, makes it highly likely that covid did not materially contribute to many of the deaths officially counted as covid casualties. Presumably a lot of the people who died after testing positive had too little viral load to suffer from the virus.

Which would mean that the difference between excess deaths and covid deaths is likely an underestimate of excess mortality attributable to the “non-pharmaceutical interventions” (e.g., lockdowns). Indeed, if deaths counted as covid are overstated because of the hypersensitive tests, excess deaths minus covid deaths undercounts the deaths attributable to lockdowns, including the deaths for which the economic collapse was a materially contributing factor.

In other words, if covid is listed for some as a cause of death, for others “government policy” should be. (And of course, for some, e.g., nursing home residents in NY, “both” would apply.)

In one of my early posts, where I was among the first to raise serious doubts about the prudence of lockdowns, I said that it was a matter of trade offs. Trade-offs not just between death and income/wealth, but between deaths from one cause and deaths from another. It is now becoming clear that tens of thousands, and perhaps over 100,000, of the excess deaths are not the result of covid infection, but from the policy responses to covid.

Yet throughout the country, and indeed throughout the world, with a few exceptions, these realities regarding the true risks and the meaninglessness of tests are not causing those in power to slacken their grip. States of emergency continue throughout the US, especially in places like California, Michigan, New York, Illinois, and Rhode Island. Travel quarantines exist worldwide. (Though why the Europeans are keeping out Americans but letting in Chinese is totally beyond my comprehension.)

Why? Well, for one thing, admitting this now would be to confess that the previous measures were unnecessary, cruel, and excessively destructive of life and economic welfare. This is not a good look for politicians:

Not to admit error is human. Especially for the subspecies of humanity (I’m being generous) called politicians and bureaucrats. But I think there is something more sinister going on here.

They like the power over our lives. They are intoxicated by the power over our lives. They revel in the power over our lives. And they are goddamned if they are going to give up that power over our lives.

Especially when so many people ovinely submit to them running roughshod over our lives and our liberties. If Joseph de Maistre was right, and we get the government we deserve, the governments we have now speaks very poorly of us indeed.

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.

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.

As summer marches inexorably towards fall, the latest battle in the Covid Wars is being fought over the reopening of primary and secondary schools. Democratic politicians, and teachers unions, are leading the charge to forestall face-to-face instruction. The battle cry among teachers appears to be “I don’t wanna die.”

Er, you’re not gonna die. Nor are the children.

One of the few pieces of almost uncontested evidence about Covid-19 is that children are at very low risk of contracting the illness, let alone dying from it. Nor do they pose major threats to passing the virus on to adults.

In the back-and-forth over “is Covid-19 worse than a bad flu,” when it comes to school-age children, the answer is that flu is worse than Covid-19, not the other way around. Yet schools have remained open, flu season after flu season.

Recognizing this, many nations have reopened schools, with no reports of resurgences tied to schools.

But in the US, the education establishment, and Democratic politicians, are largely united in opposing reopening. Some school districts (e.g., in Houston) have postponed resumption of normal instruction until November. (Right when the flu season kicks in. Smart!) Others are suggesting that school’s out, if not forever, for 2020-21.

Given the hectoring and lecturing about SCIENCE! from these very same people, the utter disregard for the evidence is striking.

There is only one rational justification for this refusal to run such a slight risk (and again, a risk that is likely less than during normal winters): traditional instruction provides virtually no value! Revealed preference at work, boys and girls.

Are the education establishment and Democratic politicians willing to stipulate to that? If so, we can save a helluva lot of money paying for teachers and brick-and-mortar schools. For the distance learning model is essentially home schooling plus (and not plus very much). Given the histrionics over home schooling emanating from the education establishment, this haste to adopt the home schooling plus model to avoid an immaterial risk is rather amusing.

In fact, although home schooling does work for some (I know several examples, including a home school family that produced a Harvard physics PhD, a Princeton BA and MA, and another Princeton grad who was a world-known ornithologist at age 13), for most Americans it is impractical because parents are employed, and even for families with a stay-at-home parent, less effective than in-person instruction for myriad reasons.

Meaning that the education establishment is willing to sacrifice the educations and futures of millions of American kids, to avoid . . . pretty much nothing.

In other words there is a huge disconnect between the rhetoric regarding the importance of public education that we are usually bombarded with, and the unseemly eagerness of the public education establishment and its political handmaidens to dispense with the core functions of public education. The disconnect is all the more glaring because the justification offered by the supposed followers of the SCIENCE! is flatly contradicted by the actual science.

So what is to explain this disconnect? I have two hypotheses.

1. This is all about the 2020 election. The Democrats believe that preventing a return to a semblance of normalcy (and you can stick “the new normal” up a warm, moist, orifice) will boost the odds of defeating Trump. Relatedly, they also believe that keeping the panic alive by stoking fears enhances their electoral prospects.
2. Teachers really like getting paid their full salaries while getting to stay home, assigning some YouTube videos, and calling it teaching.

These hypotheses are of course not mutually exclusive.

Regardless of the explanation, a failure to reopen schools will damage the educations of millions of American children, stunt their social and emotional development, and in some cases inflict serious psychological harm. Moreover, it will inflict substantial stress, distress, and economic harm on adults trying to earn a living now forced to divert time and effort to monitoring their children, and trying to teach them.

It is utterly cynical, and frankly, quite vile. Objectively the case for reopening schools is solid. Certainly far more solid than the cases for various Covid-19 measures, including masks (FFS) or social distancing or lockdowns that have been imposed over the last 4 months. Yet those forcing these latter measures adamantly oppose opening schools.

Like I said. Cynical. And vile.

One of the first economics books I read, in high school, was Joseph A. Schumpeter’s Capitalism, Socialism, and Democracy. Truth be told, I only had a dim understanding of what Schumpeter was saying. I came in at the end of the conversation as it were. Not having any exposure to Marx, for example, rendered me rather incapable of comprehending Schumpeter’s critique of Marxism. This also made me fail to appreciate that what Schumpeter was advancing was an alternative dialectic that ended in the same place: the demise of capitalism.

As I accreted knowledge over the years, I have returned to Schumpter from time to time, and gained new insights from CS&D. Witnessing the current tumult in the United States, and the West more generally, makes me appreciate the book and its insights all the more. We are experiencing a Schumpeter moment. The factors that he identified as the sappers that would undermine capitalism (and liberal democracy, as distinct from social democracy) are in clearly in operation today: large scale corporate enterprise and intellectuals.

Schumpeter wrote CS&D in 1943, in the immediate aftermath of the Great Depression, and when the viability of capitalism after the World War was much in doubt. The Depression was considered a crisis of capitalism, and the most renowned predictor of such a crisis, Karl Marx, was all the rage. The starting point of CS&D is therefore Marx.

Schumpeter examined Marx and Marxism sympathetically and seriously, but ultimately rejected the Marxian theory of capitalist self-destruction. The causal mechanism in Marx was the “declining rate of profit”, an implication of the classical economics in which Marx was steeped. This declining rate of profit would lead to pressure to cut wages, resulting in the immiseration of the proletariat, which would eventually spark a communist revolution.

Schumpeter rejected this prediction on theoretical and empirical grounds. In essence, Schumpeter rejected the classical (and neoclassical) frameworks which did not recognize technological advance and innovation. Schumpeter argued that waves of technological innovation–“creative destruction”–would result in new enterprises and industries supplanting old ones. The temporary monopoly power of the innovators would generate profits. But profits would not disappear, as would happen due to entry in a technologically stagnant classical world. Instead, the incumbent monopolists would be supplanted–destroyed–by the creators of new ideas and technologies.

So Schumpeter concluded that capitalism would not die a Marxist death. But he did conclude that it would die nonetheless, although by a different dialectic.

Schumpeter identified two major dynamics. The first was the destruction of the entrepreneurial function and the entrepreneur, and the dominance of the bureaucratic corporation. The second was the rise of an intellectual class, a rise that could only occur due to the massive wealth created by capitalism.

Marx said that capitalism would fall due to its internal contradictions. Schumpeter said the same, but identified totally different internal contradictions.

With respect to the elimination of the middling, independent entrepreneur, Schumpeter summarized thus:

To sum up this part of our argument: if capitalist evolution—“progress”— either ceases or becomes completely automatic, the economic basis of the industrial bourgeoisie will be reduced eventually to wages such as are paid for current administrative work excepting remnants of quasi-rents and monopoloid gains that may be expected to linger on for some time. Since capitalist enterprise, by its very achievements, tends to automatize progress, we conclude that it tends to make itself superfluous—to break to pieces under the pressure of its own success. The perfectly bureaucratized giant industrial unit not only ousts the small or medium-sized firm and “expropriates” its owners, but in the end it also ousts the entrepreneur and expropriates the bourgeoisie as a class which in the process stands to lose not only its income but also what is infinitely more important, its function. The true pacemakers of socialism were not the intellectuals or agitators who preached it but the Vanderbilts, Carnegies and Rockefellers. This result may not in every respect be to the taste of Marxian socialists, still less to the taste of socialists of a more popular (Marx would have said, vulgar) description. But so far as prognosis goes, it does not differ from theirs.

Instead of “bureaucratized giant industrial unit,” today I would say the “bureaucratized giant tech firm.” And instead of Vanderbilts, Carnegies and Rockefellers, Bezoses, Gateses, Zuckerbergs, and Pages. And maybe Waltons and their ilk as well.

The rate of entrepreneurial dynamism has definitely declined in the US (as indicated by the decline in the rate of new business formation even prior to Covid-19). Via a variety of mechanisms political and economic (note the ordering), the most recent victors of creative destruction are destroying the entrepreneurial class that Schumpeter identified as the social and political bulwark of capitalism.

Schumpeter’s most piquant critiques focus on intellectuals. He has something of a difficulty in defining exactly what they are. In the end, he comes to something like Potter Stewart’s definition of pornography: you know them when you see them.

Schumpeter argues that intellectuals are hostile to capitalism because under it they do not receive the economic rewards–and crucially, the status–that they believe that their (allegedly) superior intellectual attainments deserve. But the massive wealth that capitalism creates permits the extension of higher education, and the support of a group of individuals (Schumpeter does not believe they truly represent a “class”) who are inveterately hostile to the system that allows them to exist in the first place. Schumpeter notes:

But in the case of capitalist society there is a further fact to be noted: unlike any other type of society, capitalism inevitably and by virtue of the very logic of its civilization creates, educates and subsidizes a vested interest in social unrest. . . .

Broadly speaking, conditions favorable to general hostility to a social system or specific attack upon it will in any case tend to call forth groups that will exploit them. But in the case of capitalist society there is a further fact to be noted: unlike any other type of society, capitalism inevitably and by virtue of the very logic of its civilization creates, educates and subsidizes a vested interest in social unrest.

Schumpeter trenchantly notes that a salient characteristic of intellectuals is the

absence of direct responsibility for practical affairs. This touch in general accounts for another—the absence of that first-hand knowledge of them which only actual experience can give. The critical attitude, arising no less from the intellectual’s situation as an onlooker—in most cases also as an outsider—than from the fact that his main chance of asserting himself lies in his actual or potential nuisance value

Which brings to mind Orwells aphorism: there are some ideas so stupid only an intellectual can believe them. Because they are not tested by empirical/practical experience.

Schumpeter also has a quasi-Leninist take on intellectuals. They can be a vanguard of revolution. The masses are incapable of acting independently and autonomously. Intellectuals provide the leadership and coherence to inchoate dissatisfaction.

Schumpeter points to another internal contradiction of capitalism. The insistence of the entrepreneurial capitalist class on freedom (which is what allowed it to escape from the thrall of feudal governments) makes it incapable of cracking down on its mortal enemies.

Looking at Schumpeter through the lens of 2020 America, I am astounded at his prescience. Of course, almost 80 years on the exact dynamics of today are different than Schumpeter prognosticated. But as Twain said, it rhymes.

For what do we see today? A (tech) corporate oligarchy that is hostile to the middle class, and to entrepreneurs, and which largely supports–often enthusiastically–the current attacks on middle America. An oligarchy that uses its economic power to exercise political and social power. A declining entrepreneurial class. And most notably, a seething host of discontented intellectuals–notably in academia–who are inveterately hostile to capitalism and liberal democracy, and who are at the vanguard of opposition to it. Yet further, a large group of Americans of traditional values who are largely paralyzed in the face of these attacks on their beliefs, institutions, and livelihoods, in large part because their bourgeois values prevent them from responding forcefully to the mortal threat that the oligarchs and intellectuals present.

Tragically, the insane lockdowns adopted in response to Covid-19 are accelerating this process. They have perversely benefited the Amazons and Facebooks and Walmarts (there are no coincidences, comrade!) and devastated the small businesses of America. They have created seething discontent due to unemployment and social isolation that is fertile ground for intellectuals to exploit. Throw in George Floyd, and you have a perfect storm.

It is interesting to note that in the prematurely triumphalist 1990s, in the aftermath of the fall of the USSR, Schumpeter’s arguments were dismissed as having been disproved by events. Most notably, the man who has my vote as The Most Wrong Person Ever, Francis Fukuyama sneeringly wrote:

Schumpeter’s work stands as one of the most brilliantly wrong-headed books of the century in its central prediction that socialism would ultimately replace capitalism because of the latter’s insuperable cultural contradictions. Writing in 1943, Schumpeter argued that there was no inherent reason why central planning should work less well than free markets in the production of technological innovation, a point not as glaringly off the mark then as now. The central problem with capitalism, however, was not economic but cultural: it would produce a privileged class of people who would reject the sources of their own wealth and seek a socialist order. In this he seemed quite right for many years as intellectuals and artists in the West struggled against the very system that made their discourse possible. Things began to look rather different after the Reagan and Thatcher revolutions in the 1980s and the subsequent collapse of communism. Schumpeter’s book contains what is probably the most realistic, albeit minimalist, definition of democracy as a competition among elites for the allegiance of the people.

“Brilliantly wrong-headed”? That’s what Freud called “projection,” Mr. Fukuyama. (Though with respect to him, the adjective “brilliantly” can safely be omitted.)

In light of current events, Schumpeter appears much more prescient than Fukuyama. The confluence of corporatism and a coddled, cosseted intellectual class–both the products of capitalism and liberal democracy–is on the verge of killing capitalism and liberal democracy. Which is exactly what Schumpeter foresaw in 1943.

The very informative RBN Energy blog notes “Look What You Made Me Do – Permian Crude Producers Waste No Time In Ramping Up Production“:

Crude oil supply news comes in from all angles these days, bombarding the market daily with fresh information on producers’ efforts to ramp their volumes back up now that the global economic recovery is cautiously under way. Crude demand is rising, storage hasn’t burst at the seams yet, and prices have come a long, long way in just a few weeks. Permian exploration and production companies, having avoided a fleeting, longshot chance that the state of Texas might regulate West Texas oil production, are responding to higher crude oil prices as free-market participants should. The taps are quickly being turned back on, unleashing pent-up crude and associated gas volumes that, you could say, were under a sort of quarantine of their own for a while. Today, we provide an update on the status of curtailments in the Permian Basin.

The story mentions “the taps.” US shale regions, Permian in particular, are as close to something that can be turned on and off like a tap as anything in the history of the oil business.

You will recall that Igor Sechin’s brain flash in responding to the Covid-caused demand crash was to spurn Saudi importuning to extend output cuts, which spurred the steamed Saudis to increase output, thereby turning a hard fall in prices into a bona fide crash. A crash that hurt Russian producers generally, and Rosneft specifically, extremely hard.

The reasoning for Sechin’s strategy was that US shale producers had been the main beneficiary of previous output cuts, and he wanted to drive them out of business. Predatory pricing, in other words.

But as the RBN post indicates, this strategy, like most predatory pricing strategies, doesn’t work if the target can rope-a-dope and recover when you attempt to raise prices. That’s exactly what’s happening.

Yes, some companies have gone bankrupt–but bankruptcy is different than destruction. (Igor might not know this. Seriously.) And yes, the industry is facing more stringent financing conditions–but if prices rise these will ease too, and drilling activity will resume.

In other words, Sechin failed to realize that not only is predatory pricing almost always a futile strategy, it is particularly futile when unconventional US oil production is concerned. The Saudis found this out in 2014-2015, but Igor either wasn’t paying attention, or didn’t learn the lesson.

Predation doesn’t pay. This is hardly a new insight, or one not demonstrated by repeated experiences–including experience involving Igor’s intended prey.

Sechin’s predatory endeavors work when they involve exploiting the Russian legal system. In the marketplace, not so much. But we all knew that Igor is basically a thug, and not all that bright.

The June 2020 WTI contract expired with a whimper rather than a bang yesterday, thereby not repeating the cluster of the May contract expiry. In contrast to the back-to-back 40 standard deviation moves in April, June prices exhibited little volatility Monday or Tuesday. Moreover, calendar spreads were in a modest contango–in contrast to the galactangos experienced in April, and prices never got within miles of negative territory.

Stronger fundamentals certainly played a role in this uneventful expiry. Glimmers of rebounding demand, and sharp supply reductions, both in the US and internationally, caused a substantial rally in flat prices and tightening of spreads in the first weeks of May. This alleviated fears about exhaustion of storage capacity. Indeed, the last EIA storage number for Cushing showed a draw, and today’s API number suggests an even bigger draw this week. (Though I must say I am skeptical about the forecast power of API numbers.). Also, the number of crude carriers chartered for storage has dropped. (H/T my daughter’s market commentary from yesterday). So the dire fundamental conditions that set the stage for that storm of negativity were not nearly so dire this week.

But remember that fundamentals only set the stage. As I pointed out in my posts in the immediate aftermath of the April chaos, technical factors related to the liquidation of the May contract, arguably manipulative in nature, the ultimate cause of the huge price drop on the penultimate trading day, and the almost equally large rebound on the expiry day.

The CFTC read the riot act in a letter to exchanges, clearinghouses, and FCMs last week. No doubt the CME, despite it’s Frank Drebin-like “move on, nothing to see here” response to the May expiry monitored the June expiration closely, and put a lot of pressure on those with open short positions to bid the market aggressively (e.g., bid at reasonable differentials to Brent futures and cash market prices). A combination of that pressure, plus the self-protective measures of market participants who didn’t want to get caught in another catastrophe, clearly led to earlier liquidations: open interest going into the last couple of days was well below the level at a comparable date in the May.

So fundamentals, plus everyone being on their best behavior, prevented a recurrence of the May fiasco.

It should be noted that as bad as April 20 was (and April 21, too), the carnage was not contained to those days, and the May contract alone. The negative price shock, and its potentially disastrous consequences for “fully collateralized” long-only funds, like the USO, led to a substantial early rolls of long positions in the June during the last days of April. Given the already thin liquidity in the market, these rolls caused big movements in calendar spreads–movements that have been completely reversed. On 27 April, the MN0 spread was -$14.45: it went off the board at a 54 cent backwardation. Yes, fundamentals were a major driver of that tightening, but the early roll in the US (and some other funds) triggered by the May expiration clearly exacerbated the contango. Collateral damage, as it were.

What is the takeaway from all this? Well, I think the major takeaway is not to overgeneralize from what happened on 20-21 April. The underlying fundamentals were truly exceptional (unprecedented, really)–and hopefully the likelihood of a repeat of those is vanishingly small. Moreover, the CME should be on alert for any future liquidation-related game playing, and market players will no doubt be more cautious in their approach to expiration. It would definitely be overlearning from the episode to draw expansive conclusions about the overall viability of the WTI contract, or its basic delivery mechanism.

That mechanism is supported by abundant physical supplies and connections to diverse production and consumption regions. Indeed, this was a situation where the problem was extremely abundant supply–which is an extreme rarity in physical commodity futures markets. Other contracts (Brent in particular) have chronic problems with inadequate and declining supply. As for WTI being “landlocked,” er, there are pipelines connecting Cushing to the Gulf, and WTI from Cushing has been exported around the world in recent years. With the marginal barrel going for export, seaborne crude prices drive WTI. With a better-monitored and managed liquidation process, especially in extraordinary circumstances, the WTI delivery mechanism is pretty good. And I say that as someone who has studied delivery mechanisms for around 30 years, and has designed or consulted on the design of these contracts.

The past few weeks have brought pleasant surprises from people whom I usually disagree with and/or dislike.

For one, Michael Moore, the executive producer of Planet of the Humans. Moore does not appear on camera: that falls to Jeff Gibbs and (producer) Ozzie Zehner. The main virtue of the film is its evisceration of “green energy,” including wind and solar. It notes repeatedly that the unreliability of these sources of power makes them dependent on fossil fuel generation, and in some cases results in the consumption of more fossil fuels than would be the case if the renewables did not exist at all. Further, it points out-vividly-the dirty processes involved with creating wind and solar, most notably mining. The issues of disposing of derelict wind and solar facilities are touched on too, though that could have been beefed up some.

If you know about wind and solar, these things are hardly news to you. But for environmentalists to acknowledge that reality, and criticize green icons for perpetrating frauds in promoting these wildly inefficient forms of energy, is news.

The most important part of the film is its brutal look at biomass. It makes two points. First, that although green power advocates usually talk about wind and solar, much of the actual “renewable” energy is produced by biomass, e.g., burning woodchips. In other words, it exposes the bait-and-switch huckersterism behind a lot of green energy promotion. You thought you were getting windmills? Sucker: you’re getting plants that burn down forests. You fucked up! You trusted us!

Second, that biomass is hardly renewable (hence the quote marks above), and results in huge environmental damage. Yes, trees can regrow, but not as fast as biomass plants burn them. Moreover, the destruction of forests is truly devastating to wildlife and to irreplaceable habitats, and to the ostensible purpose of renewables–reduction of CO2.

The film also points out the massive corporate involvement in green energy, and this represents its weakest point. Corporations, like bank robbers, go where the money is. But that begs the question: Why is there money in horribly inefficient renewables? Answer: Because of government subsidies.

Alas, the movie only touches briefly on this reality. Perhaps that is a bridge too far for socialists like Moore. But he (and Gibbs and Zehner) really want to stop what they rightly view as the environmental and economic folly of renewables, they have to turn off the money tap. That requires attacking the government-corporate-environmentalist iron triangle on all three sides, not just two.

I am not a believer in the underlying premise of the movie, viz., that there are too many people consuming too much stuff, and if we don’t reduce people and how much they consume, the planet will collapse. That’s a dubious neo-Malthusian mindset. But put that aside. It’s a great thing that even hard core environmentalists call bull on the monstrosity that is green/renewable energy, and point out the hypocrisy and fundamental dishonesty of those who hype it.

My second candidate is long-time target Elon Musk. He has come out as a vocal opponent to lockdowns, and a vocal advocate for liberty.

Now I know that Elon is talking his book. Especially with competitors starting up their plants in the Midwest, the lockdown in California that has idled Musk’s Fremont manufacturing facility is costing Tesla money. But whatever. The point is that he is forcefully pointing out the huge economic costs of lockdowns, and their immense detrimental impact on personal liberty earns him some newfound respect, strange or otherwise.

Lastly, Angela Merkel. She has taken a much more balanced approach to Covid-19 than most other national leaders. Perhaps most importantly, she has clearly been trying to navigate the tradeoff between health, economic well-being, and liberty. Rather than moving the goalposts when previous criteria for evaluating lockdowns had been met, when it became clear that the epidemic was not as severe in Germany as had been feared, and that the economic consequences were huge, and that children were neither potential sufferers or spreaders, she pivoted to reopening quickly and pretty rationally.

The same cannot be said in other major countries, including the UK and France as notable examples. She comes off well in comparison to Trump, although the comparison is not completely fair. Trump only has the bully pulpit to work with, for one thing: actual power is wielded by governors. But Trump’s use of the bully pulpit has been poor. Moreover, he has deferred far too much to execrable “experts,” most notably the slippery Dr. Fauci, who has been on the opposite sides of every policy decision (Masks? Yes! Masks? No! Crisis? Yes! Crisis? No!), is utterly incapable of and in fact disdainful of balancing health vs. economics and liberty, and who brings to the table a record of failure that Neil Ferguson could envy, for its duration if nothing else. The Peter Principle personified: he is clearly at the level of his incompetence, and due to the perversity of government, has remained at that level for decades.

Merkel’s performance is particulary outstanding when compared to those who wield the real power in the current crisis, American governors, especially those like Whittmer, Pritzker, Evers, Walz, Brown, Wolf, Cuomo, Murphy, Northam, and Newsom. These people are goalpost movers par excellence, and quite clearly find the unfettered exercise of power to be orgasmic.

It is embarrassing in the extreme to see the Germans–the Germans–be far more solicitous of freedom and choice than elected American officials, who seem to treat freedom–including the freedom to earn a livelihood–as an outrageous intrusion on their power and amour-propre.

Will this represent the new normal? Will SWP props for Moore, Merkel, and Musk become routine in the post- (hopefully) Covid era? I doubt it, but for today, I’m happy to give credit where credit is due.

In the film Pulp Fiction, moronic hoodlums Jules (Samuel L. Jackson) and Vincent (John Travolta) pick up a guy who had stolen a briefcase from the back of their boss Marcellus Wallace’s car. While driving him away, Vincent accidentally shoots him, leaving the back of the car splattered with blood and brains. In a panic, they drive to friend Jimmy Dimmick’s (Quentin Tarantino’s) house. Dimmick tells them his wife will be home in an hour and they can’t stay. In a panic they call Wallace, who calls in Winston Wolf. Wolf says: “It’s an hour away. I’ll be there in 10 minutes.” In 9 minutes and 37 seconds, Wolf’s car squeals to a halt in front of Jimmy’s house. Wolf rings the doorbell, and when Jimmy answers, Wolf says: “I’m Winston Wolf. I solve problems.” Within 40 minutes, Wolf solves Jules’ and Vincent’s problem. The car is cleaned up with the body is in the trunk, ready to be driven to the wrecking yard to be crushed.

The Imperial team that relied on Microsoft/Github to fix its code should have called Winston Wolf instead, because MS/Github left behind some rather messy evidence. “Sue Denim,” who wrote the code analysis I linked to yesterday, has a follow up describing what Not Winston Wolf left behind:

My favorite one is “a fix for a critical error in the random number generator.” In 2020? WTF? I remember reading in 1987 in the book Numerical Recipes by  William H. Press, Saul A. Teukolsky, William T. Vetterling and Brian P. Flannery a statement to the effect that libraries could be filled with papers based on faulty random number generation. (I’d give you the exact quote, but the first edition that I used is in my office which I cannot access right now. Why is that, I wonder?). And they were using a defective RNG 33 years later? Really?

“Algorithmic errors” is another eye popper. The algorithms weren’t doing what they were supposed to?

Read the rest. And maybe you’ll conclude that this was a mess that even Winston Wolf could have cleaned up in 40 days, let alone 40 minutes.

https://www.youtube.com/watch?v=oPoh2OpbyGs