Category: Current Affairs
Claims about fires?
In 2007 the Sierra Club successfully sued the Forest Service to prevent them from creating a Categorical Exclusion (CE) to NEPA for controlled burns (the technical term is “fuel reduction”). The CE would have allowed the forest service to conduct burns without having to perform a full EIS (the median time for which is 3.5 years). See: caselaw.findlaw.com/court/us-9th-c John Muir project helped to claw back the full scope of Categorial Exclusions from the 2018 Omnibus Bill as well (though some easement did make it through). In 2021 the outgoing Trump BLM was served with the following notice of intent to sue by the Center for Biological Diversity for their fuel reduction plan in the Great Basin: biologicaldiversity.org/programs/publi BLM backed away from the plan after the transition. These are specific cases, but the cumulative outcome is that CA state agencies don’t even try it because they know they’ll be sued.
Some of the latter part is exaggerated, here is o1 pro commentary.
In California it is apparently illegal to price fire insurance according to risk? o1 pro seems a bit off on this question, but I think you can read between the lines.
Which are the best analyses you are seeing?
One early report on congestion pricing in NYC
That is my latest Bloomberg column, here is one bit:
The core version of the plan stipulates a $9 toll for drivers entering Manhattan below and including 60th Street. Implementation is by E-Z Pass, and the tolls can vary in complex ways. But if you don’t cross the line, you don’t pay. So residents below 60th Street are exempt, provided they stay within the zone.
And:
The data do indicate some effective immediate adjustments. Most notably, morning commutes through the major bridges and tunnels into Manhattan have eased. Presumably the tolls have discouraged some drivers whose trips were less important to them, leading to quicker travel times for those drivers willing to pay. Economists typically consider such changes to be an improvement.
Such changes, however, aren’t of much help to native New Yorkers, in particular those living inside the zone. The earliest measurements indicate that traffic within the zone has not eased notably. So far, I would say the biggest beneficiaries of the policy are the wealthier residents of New Jersey and the New York state government, which is now set to take in more revenue.
Whatever you think of those consequences — YMMV, as they say — at least there is now actual data to sift through. You can track it here, and again it is important to stress that these preliminary assessments may change with time.
Many Manhattanites supported the charges on the grounds that they wanted a quieter, cleaner, less congested center city that was more friendly to bicycles and pedestrians. Think of Copenhagen or Amsterdam, if you have ever been. What they may end up getting is a central city more friendly to their cars — and less friendly to outsiders. It remains to be seen if central Manhattan has a path to becoming truly pleasant in the Nordic sense.
I will continue to follow this issue, as new results will be coming in. Of course stiff tolls on those living inside the zone were the correct thing to do. But that is not how politics works.
Should America privatize the postal service?
That is the topic of my latest Bloomberg column, here is one bit:
But Poles did not privatize everything. They generally left water companies and electricity providers in the public sector, for example. This is the second category of privatizations: those that are uncertain in their impact.
Water and electricity are two essential services where there is no easy way to get privatization exactly right. It is simply impractical to have many firms selling the product to a single group of households — not in the same way that, say, many cow farmers can produce and sell cheese. It costs too much to lay the basic piping or wires.
One option is to have a private entity with monopoly privileges but regulated prices. Another is to have a set of “common carrier” wires and allow multiple producers to use the network on regulated terms of access. A third is just to have the government own and run the company.
Involving the private sector may give better incentives for cost reduction as well as innovation, since profit maximization is a strong impetus for those kinds of improvements. The efficiency of the private company, however, is also a source of problems. A private company may be efficient at lobbying the government for cronyist privileges. That may lead to higher prices, overly generous reimbursement for cost increases, tougher barriers to entry, or entrenched technologies that favor the incumbent.
In other words: If embedded in an imperfect system, corporate efficiency is not always a pure virtue.
In the US, privately owned and publicly owned water utilities show, on average, roughly equal performance. Perhaps that is a disappointing result, but it is consistent with the “public choice” theories favored by many free-market economists.
A third kind of privatization is when business adds a layer of activity to a preexisting government function. For instance, some states have “privatized” their Medicaid services by outsourcing Medicaid provision to private health insurers. The Medicaid program has not gone away or been turned over to the private sector — rather, companies have a role in administering the system.
This kind of “layered” privatization, like the second kind of privatization, can work out either for the better or for the worse. One recent study shows this privatization increased the costs of Medicaid significantly without providing offsetting benefits. The private companies have done a good job — for themselves — of extracting more revenue from the system. Yet Medicare Cost Advantage, which creates a private layer of service on top of Medicare, run by insurance companies, does offer significant benefits to those who opt for it.
The lesson here is that talk of “privatization” per se is meaningless without elucidating which kind of privatization is under consideration.
Worth a ponder. Overall I think postal service privatization cannot be too closely tied to crony capitalism if it is going to work.
China fact of the day
China is loosening its visa policy and allowing some travelers to stay in the country for up to 10 days without obtaining the document.
The United States is among the dozens of countries eligible for the more lenient measure, part of a movement to ease restrictions and welcome back foreigners. The National Immigration Administration announced the change earlier this week.
To qualify for a 240-hour visa-free stay, travelers must transit through any of 60 airports, train stations or seaports in 24 provinces or regions, including such major destinations as Beijing, Shanghai and Sichuan…
One stipulation is the same, however. The China stop is technically for a layover, so you will need a reservation for a third country. For example, you can’t fly from New York to Beijing round-trip, but you could fly from New York to Bangkok to Beijing before returning home. Or from New York to Beijing to Bangkok.
“You will need to show your flight itinerary to show which third country you’re going to and that you’re going to leave within 10 days,” Peat said. “But that’s all you have to do.”
Here is the full story.
Simple points on immigration
You may worry about cultural change or other things, but a single Jensen Huang or Elon Musk can carry a lot of dead weight. As of October, Nvidia’s market cap was around $3.5 trillion. By way of comparison, all US spending on federal welfare programs was $1.2 trillion in 2022. Nothing in Huang’s family background indicates that they would have been let into the country under a system that only sought proven geniuses, as some restrictionists say they favor. If one wants to take all the human and physical capital assets of some of the most successful companies in the US and toss them into the ocean, they need to have an incredibly compelling reason.
That is from Richard Hanania. I’ll say it again — cost-benefit analysis, cost-benefit, and cost-benefit analysis. Let’s have a little more of it, at the margin of course.
South Korea fact of the day
South Korea in 2024 saw 242,334 babies born, marking the first increase in the annual figure since 2015, as the country struggles to improve its plummeting birth rate that is among the worst in the world.
The official figure for childbirths rose by 7,295 from 235,039 in 2023, a 3.1 percent increase, according to the Ministry of the Interior and Safety.
And yet, it is not so easy to win this one:
The country also saw 360,757 deaths in the year, resulting in the overall population shrinking for a fifth straight year since 2020…
While the rebound in childbirths offers a glimpse of hope in terms of the population decline, the country continued to get older. The average age for Koreans in 2024 was 45.3 years old, up from average age of 44.8 the previous year.
Here is the full story.
Updates
In a justified resurgence of interest in the topic, The Telegraph covers the Rotherham scandals. Liz Truss has spoken up too. This is not a welcome issue for Starmer, to say the least. No matter what you think he did/did not do wrong in this matter, he cannot come out ahead. One implication is that ethnic enclaves sometimes are a big mistake, and that suburban sprawl is underrated. Note that Pakistanis in the United States have median income above the U.S. average, and comparable to other Asians.
Elsewhere, Thierry Breton remains an Ayn Rand villain.
That’s all.
Africa facts of the day
This corridor of conflict stretches across approximately 4,000 miles and encompasses about 10% of the total land mass of sub-Saharan Africa, an area that has doubled in just three years and today is about 10 times the size of the U.K., according to an analysis by political risk consulting firm Verisk Maplecroft…
Africa is now experiencing more conflicts than at any point since at least 1946, according to data collected by Uppsala University in Sweden and analyzed by Norway’s Peace Research Institute Oslo. This year alone, experts at the two institutes have identified 28 state-based conflicts across 16 of the continent’s 54 countries, more than in any other region in the world and double the count just a decade and a half ago. That tally doesn’t include conflicts that don’t involve government forces, for instance between different communities, and whose number has also doubled since 2010…
The continent is now home to nearly half of the world’s internally displaced people, some 32.5 million at the end of 2023. That figure has tripled in just 15 years.
Here is more from Gabriele Steinhauser, Andrew Barnett, and Emma Brown at the WSJ. In my view, people are not taking these developments seriously enough.
The Cows in the Coal Mine
I remain stunned at how poorly we are responding to the threat from H5N1. Our poor response to COVID was regrettable but perhaps understandable given the US hadn’t faced a major pandemic in decades. Having been through COVID, however, you would think that we would be primed. But no. Instead of acting aggressively to stop the spread in cows we took a gamble that avian flu would fizzle out. It didn’t. California dairy herds are now so awash in flu that California has declared a state of emergency. Hundreds of herds across the United States have been infected.
I don’t think we are getting a good picture of what is happening to the cows because we don’t like to look too closely at our food supply. But I reported in September what farmers were saying:
The cows were lethargic and didn’t move. Water consumption dropped from 40 gallons to 5 gallons a day. He gave his cows aspirin twice a day, increased the amount of water they were getting and gave injections of vitamins for three days.
Five percent of the herd had to be culled.
“They didn’t want to get up, they didn’t want to drink, and they got very dehydrated,” Brearley said, adding that his crew worked around the clock to treat nearly 300 cows twice a day. “There is no time to think about testing when it hits. You have to treat it. You have sick cows, and that’s our job is to take care of them.”
Here’s another report from a vet:
…the scale of the farmers’ efforts to treat the sick cows stunned him. They showed videos of systems they built to hydrate hundreds of cattle at once. In 14-hour shifts, dairy workers pumped gallons of electrolyte-rich fluids into ailing cows through metal tubes inserted into the esophagus.
“It was like watching a field hospital on an active battlefront treating hundreds of wounded soldiers,” he said.
Here’s Reuters:
Cows in California are dying at much higher rates from bird flu than in other affected states, industry and veterinary experts said, and some carcasses have been left rotting in the sun as rendering plants struggle to process all the dead animals.
…Infected herds in California are seeing mortality rates as high as 15% or 20%, compared to 2% in other states, said Keith Poulsen, a veterinarian and director of the Wisconsin Veterinary Diagnostic Laboratory who has researched bird flu.
The California Department of Food and Agriculture did not respond to questions about the mortality rate from bird flu.
Does this remind you of anything? Must we wait until the human morgues are overrun?
The case fatality rate for cows appears to be low but significant, perhaps 2%. A small number of pigs have also been infected. On the other hand, over 100 million chickens, turkeys and ducks have been killed or culled.
There have now been 66 cases in humans in the US. Moreover, the CDC reports that in at least one case the virus appears to have evolved within its human host to become more infectious. We don’t know that for sure but it’s not good news. Recall that in theory a single mutation will make the virus much more capable of infecting humans.
When I wrote on December 1 that A Bird Flu Pandemic Would Be One of the Most Foreseeable Catastrophes in History Manifold Markets was predicting a 9% probability of greater than 1 million US human cases in 2025. Today the prediction is at 20%.
Once again, we may get lucky and that is still the way to bet but only the weak rely on luck. Strong civilizations don’t pray for luck. They crush the bugs. So far, we are not doing that.
Happy new year.
Joseph Walker on Australian migration (from my email)
I argued a few days ago that attacks on less skilled immigration might spill over and through contagion effects cause negative attitudes about immigration more generally. At which point I received the following from Joseph:
Australia, I think, shows the contagion effects are a big deal.
We have one of the most skill-biased immigration programs in the world and also one of the most successful approaches to cultural integration in the world.
A significant chunk of our net migration comes in the form of overseas students, who can be put on a pathway to permanent residence and citizenship after completing their degrees. (This program was introduced in 2001, largely to slow our population ageing.)
The international students cross-subsidise the domestic ones, and education is now Australia’s third biggest export after coal and iron ore.
Like the rest of the Anglosphere, our housing market is broken, but this can’t mostly be blamed on international students, since they don’t add to demand for the kinds of housing people are concerned about.
And yet the discourse has soured completely on migrants, especially international students.
A lot of Australian influencers copy and paste US anti-immigration talking points, even though they don’t really map over.*
(As it happens, I’ll be interviewing one of the key architects of Australia’s modern migration system in a live salon in January: https://events.humanitix.com/joe-walker-podcast-abul-rizvi.)
*To be sure, there are valid criticisms of Australian migration policy. Most notably, net migration was mismanaged and unsustainably high over the past two years, driven by a post-pandemic surge in students. In 2022-23, it exceeded 500,000 people (for context: this number is unprecedented and about double pre-pandemic levels). There has also been exuberance and an erosion of academic standards in the university sector. But these mistakes are being addressed, and the broader negativity I’m observing seems unlikely to be appeased by fixing them.
What are some remaining obstacles for Milei? (from the comments)
Argentina facts of the day
Argentina’s bonds have already rallied dramatically. One gauge of the nation’s hard-currency debt, the ICE BofA US Dollar Argentina Sovereign Index, has generated a total return of about 90% this year.
Meanwhile, the S&P Merval Index has risen more than 160% this year through Monday, far outpacing stock benchmarks in developed, emerging and frontier markets alike. Adjusting for currency differences, the index is still up more than 100% in U.S. dollar terms. For comparison, the S&P 500 is up 25% over the same period.
Here is more from the WSJ. The chance of Milei succeeding is now above fifty percent.
When should DOGE scream in public and push for maximum transparency?
Here is a tweet from Elon, I won’t reproduce it directly on MR. Suffice to say it is strongly worded on the visas issue. Here is a summary of that debate. Much of it is about who should rise or fall in status (duh).
I have some simple, to the point free advice for the DOGERs — the public is not always with you. Making your fight more public, and putting it more on social media, is no guarantee of victory, and indeed it often boosts the chance you will lose or be stymied.
Right now there is an anti-immigration mood, for better or worse, in many countries. But how many voters (former immigrants aside) know what these different types of visas mean, or how many o1s are given out in a year? Yet a lot of influential tech people, and tech donors, know this information pretty well.
So in a non-public fight, you have a big advantage. Trump could maintain or up the number of o1 visas, or make other changes to please the tech people, and few MAGA voters would be very aware of this. But when you scream about this issue, and make it A BATTLE, suddenly it becomes “your pro-immigration sentiment vs. the anti-immigration sentiment of the voters.”
And that is a fight which is very easy to lose. It becomes “The Current Thing,” and everyone is paying attention to the new status game.
So please develop a better sense of when to keep your mouths shut and work behind the scenes.
Is there an intermediate position on immigration?
It is a common view, especially on the political right, that we should be quite open to highly skilled immigrants, and much less open to less skilled immigrants. Increasingly I am wondering whether this is a stable ideological equilibrium.
To an economist, it is easy to see the difference between skilled and less skilled migrants. Their wages are different, resulting tax revenues are different, and social outcomes are different, among other factors. Economists can take this position and hold it in their minds consistently and rather easily (to be clear, I have greater sympathies for letting in more less skilled immigrants than this argument might suggest, but for the time being that is not the point).
The fact that economists’ intuitions can sustain that distinction does not mean that public discourse can sustain that distinction. For instance, perhaps “how much sympathy do you have for foreigners?” is the main carrier of the immigration sympathies of the public. If they have more sympathies for foreigners, they will be relatively pro-immigrant for both the skilled and unskilled groups. If they have fewer sympathies for foreigners, they will be less sympathetic to immigration of all kinds. Do not forget the logic of negative contagion.
You also can run a version of this argument with “legal vs. illegal immigration” being the distinction at hand.
Increasingly, I have the fear that “general sympathies toward foreigners” is doing much of the load of the work here. This is one reason, but not the only one, why I am uncomfortable with a lot of the rhetoric against less skilled immigrants. It may also be the path toward a tougher immigration policy more generally.
I hope I am wrong about this. Right now the stakes are very high.
In the meantime, speak and write about other people nicely! Even if you think they are damaging your country in some significant respects. You want your principles here to remain quite circumscribed, and not to turn into anti-foreigner sentiment more generally.
Steve Davis, Elon Musk’s Go-To Cost-Cutter Is Working for DOGE
A Bloomberg profile of the excellent Steve Davis:
Elon Musk’s deputy Steve Davis has spent more than 20 years helping the billionaire cut costs at businesses like SpaceX, the Boring Company and Twitter ….[now] Davis is helping recruit staff at DOGE, Musk’s effort to reduce government waste, in addition to his day job as president of Musk’s tunneling startup, the Boring Company.
At Boring, Davis has a reputation for frugality, signing off on costs as low as a few hundred dollars, according to people familiar with the conversations — unusual for a company that has raised about $800 million in capital. He also drives hard bargains with suppliers of products like raw steel, sensors, or even items as small as hose fittings, said the people, who asked not to be identified discussing private information.
His favorite directive for staff doing the negotiations: “Go back and ask again.”
…Davis started working for Musk in 2003, when he joined SpaceX, at the time a new company. He had just earned a master’s degree in aerospace engineering from Stanford University, and distinguished himself at the startup by solving hard engineering problems. At one point, Musk tasked the engineer with finding a cheaper alternative to a part that cost $120,000. Davis spent weeks on the challenge and figured out how to do it for $3,900, according to a biography of Musk. (Musk emailed back one word: “Thanks.”)
…Multitasking has proved a Davis signature, dating back to his student days. While he was working on his doctorate in economics at George Mason University in Fairfax, Virginia, Davis was working full time at SpaceX and owned a frozen-yogurt shop called Mr. Yogato in Washington’s Dupont Circle. Alex Tabarrok, one of Davis’ professors, remembers him juggling the multiple roles.
“I told him, ‘Look, you’re getting a Ph.D., you can’t be having a job and running a business at the same time,” Tabarrok recalls. “Focus on getting your Ph.D.”
But Davis declined to give up any of his pursuits, at one time incorporating business trends at Mr. Yogato into an academic paper and bringing some yogurt into class for sampling. Tabarrok can’t recall Davis’ grades, but says he stood out anyway. He “had so much energy, and was so entrepreneurial,” Tabarrok says. “It’s been kind of exciting to see him become one of Elon’s most trusted right-hand men.”
Davis’s GMU training in political economy will serve him very well in Washington.
See also my previous post, an MR classic, Why We Can’t Have Nice Things–Elon Musk and the Subways.
Addendum: 2013 profile of Steve and another of his businesses, Thomas Foolery a bar in DC where you paid for drinks according to plinko. Hat tip: Kevin Lewis.
That is from EB-CH, a cranky guy but sometimes he has good points. There are (at least) two additional problems<:
1. First, a global recession could scuttle the whole thing on the revenue side.
2. Second, Argentina (not blaming Milei here, I think he understands this) has a tendency to give up on its adjustment programs too early. A temporarily balanced budget does not reflect how a tanking of commodity prices (combined perhaps with other problems) could lead to a future financial crisis once again. The fiscal configuration has to be not only “good enough for now” but truly stress tested. Is the political system down there strong enough to see that through? I suppose we will find out.