The checkers speech was made in 1952.

I know you know that – – everyone knows that – – but think about the implications for a moment. This nationally televised speech is often credited with saving the career of Richard Nixon and making him one of the dominant forces in American politics for the next 20 years. It was unquestionably a turning point in the way that public figures used media, particularly in the face of scandal.

And it happened in 1952.

What's the big deal? Remember that television was still in its experimental phase until the postwar era. It wasn't until around 1947 that it became a national medium and even then, large swaths of the country had no TV stations. The fate of a presidential ticket was determined by something that was, at best, five years old.

When you hear the claim that technology today is changing our lives faster than ever before, remember Checkers.

All of this would look remarkably modern if not for the horse drawn carriages

What struck me about this 1903 cover from Scientific American was the way planners set aside dedicated spaces for different modes of travel, one  level for pedestrians, one for cyclists, one for automobiles and carriages, and two for trains, an allotment that would no doubt please many urbanists today.

This begs the question, did this approach to urban transportation fall out of fashion? Or was it one of those things that had a way of showing up in proposals but which seldom made it to the groundbreaking?

Seems like a good time to reopen this thread.

This post by Jonathan Chait about the renewed demographic threat faced by the GOP got me thinking about a thread I've been meaning to revisit.

For obvious reasons, the broadly liberal demographic trends in American politics have received much less attention since the 2016 election. Yet the fact remains that America is politically sorted by generations in a way it never has before. The oldest voters are the most conservative, white, and Republican, and the youngest voters the most liberal, racially diverse, and Democratic. There is absolutely no sign the dynamic is abating during the Trump years. If anything, it is accelerating.

The most recent Pew Research Survey has more detail about the generational divide. It shows that the old saw that young people would naturally grow more conservative as they age, or that their Democratic loyalties were an idiosyncratic response to Barack Obama’s unique personal appeal, has not held. Younger voters have distinctly more liberal views than older voters:

One could probably quibble with the overall definitions of which voters have liberal views and which have conservative views. What’s telling here is the comparison between generations. By Pew’s given definition, younger voters are wildly more liberal than older ones. The youngest voters have nearly five times as many voters with liberal views than with conservative views. The oldest voters have one and a half times more conservative than liberal voters.

Correspondingly, the Democratic lean of millennial voters is as strong as ever:

In the upcoming midterm elections, millennials are providing a huge share of the Democrats’ edge, with older generations splitting their vote relatively close:

In the first few months of the Trump administration, we did a series of posts on how the underlying dynamics of the Republican Party were changing and what some of the consequences might be. One of the fundamental ideas of the thread was that the country had entered a period where our normal ways of talking about subjective probability made no sense in terms of politics. You could still make directional and even ordinal statements, but we were so far outside of the range of data and precedent that you could no longer confidently assign upper and lower bounds to the probability of a number of events including the destruction of the Republican Party. Note, I never said that this was "likely" to happen, but rather you can't say that it can't happen now.

If I were writing this today, there are obviously things I would handle differently, but I'm reasonably comfortable standing by the main points.

Tuesday, August 22, 2017

The Republicans' 3 x 3 existential threat

I've argued previously that Donald Trump presents and existential threat to the Republican Party. I know this can sound overheated and perhaps even a bit crazy. There are few American institutions as long-standing and deeply entrenched as are the Democratic and Republican parties. Proposing that one of them might not be around 10 years from now beggars the imagination and if this story started and stopped with Donald Trump, it would be silly to suggest we were on the verge of  a political cataclysm.

But, just as Trump's rise did not occur in a vacuum, neither will his fall. We discussed earlier how Donald Trump has the power to drive a wedge between the Republican Party and a significant segment of its base [I wrote this before the departure of Steve Bannon. That may diminish Trump's ability to create this rift but I don't think it reduces the chances of the rift happening. – – M.P.]. This is the sort of thing that can profoundly damage a political party, possibly locking it into a minority status for a long time, but normally the wound would not be fatal. These, however, are not normal times.

The Republican Party of 2017 faces a unique combination of interrelated challenges, each of which is at a historic level and the combination of which would present an unprecedented threat to this or any US political party. The following list is not intended to be exhaustive, but it hits the main points.

The GOP currently has to deal with extraordinary political scandals, a stunningly unpopular agenda and daunting demographic trends. To keep things symmetric and easy to remember, let's break each one of these down to three components (keeping in mind that the list may change).


With the scandals:

1. Money – – Even with the most generous reading imaginable, there is no question that Trump has a decades long record of screwing people over, skirting the law, and dealing with disreputable and sometimes criminal elements. At least some of these dealings have been with the Russian mafia, oligarchs, and figures tied in with the Kremlin which leads us to…

2. The hacking of the election – – This one is also beyond dispute. It happened and it may have put Donald Trump into the White House. At this point, we have plenty of quid and plenty of quo; if Mueller can nail down pro, we will have a complete set.

3. And the cover-up – – As Josh Marshall and many others have pointed out, the phrase "it's not the crime; it's the cover-up" is almost never true. That said, coverups can provide tipping points and handholds for investigators, not to mention expanding the list of culprits.


With the agenda:

1. Health care – – By some standards the most unpopular major policy proposal in living memory that a party in power has invested so deeply in. Furthermore, the pushback against the initiative has essentially driven congressional Republicans into hiding from their own constituents for the past half year. As mentioned before, this has the potential to greatly undermine the relationship between GOP senators and representatives and the voters.

2. Tax cuts for the wealthy – – As said many times, Donald Trump has a gift for making the subtle plain, the plain obvious, and the obvious undeniable. In the past, Republicans were able to get a great deal of upward redistribution of the wealth past the voters through obfuscation and clever branding, but we have reached the point where simply calling something "tax reform" is no longer enough to sell tax proposals so regressive that even the majority of Republicans oppose them.

3. Immigration (subject to change) – – the race for third place in this list is fairly competitive (education seems to be coming up on the outside), but the administration's immigration policies (which are the direct result of decades of xenophobic propaganda from conservative media) have already done tremendous damage, caused great backlash, and are whitening the gap between the GOP and the Hispanic community, which leads us to…



Demographics:

As Lindsey Graham has observed, they simply are not making enough new old white men to keep the GOP's strategy going much longer, but the Trump era rebranding of the Republican Party only exacerbates the problems with women, young people, and pretty much anyone who isn't white.

Maybe I am missing a historical precedent here, but I can't think of another time that either the Democrats or the Republicans were this vulnerable on all three of these fronts. This does not mean that the party is doomed or even that, with the right breaks, it can't maintain a hold on some part of the government. What it does mean is that the institution is especially fragile at the moment. A mortal blow may not come, but we can no longer call it unthinkable.

I guess I'll force myself to have a chocolate malt

I'd like to see a list of all of the foods that were originally sold on the basis of health but which now survive as unhealthy indulgences.  In addition to malted milk, many early soft drinks fall into this category and I have the feeling I'm missing some other obvious examples.

From Scientific American 1908-12-05

Hyperloop watch -- We are now reaching that part of the movie where the wife goes to the bank and realizes that her husband has given their life savings to the con man.

I know I've been harping on this for years now and I'd imagine regular readers are growing a bit tired of the ranting, but the standard tech narrative, the one that is still more or less the default for even sober news organizations like the BBC and NPR, is deeply flawed and genuinely dangerous.

The hype and bullshit and magical heuristics that dominate our discussion of technology and innovation aren't just annoying; they have a real cost. They distort markets, spread misinformation, lead to bad public policy, and starve worthwhile initiatives of both funding and attention.

No figure brings out the worst of these tendencies in journalists more than does Elon Musk. Musk, it should be noted, does have some major accomplishments under his belt as an administrator, promoter, and finance guy. With SpaceX and, to a lesser degree, Tesla, he deserves considerable credit for significant innovations, but even with his most serious projects, there is always a bit of the Flimflam Man present.

The Hyperloop has always been Elon Musk at his most substance-free. A 70s era B- senior engineering project dressed up with 3-D graphics and a cool name. Despite being thoroughly demolished by virtually every independent expert in the field, the "proposal" has generated endless and endlessly credulous press coverage. Hundreds of millions of dollars in financing have been lined up by Hyperloop companies with dubious business plans. And now you can add millions in tax dollars to that.



From an excellent Slate article by Henry Grabar.

For American lawmakers, funding public transit often feels like small ball. Politicians prefer to dream bigger. Earlier this month, transportation agencies in the Cleveland region and in Illinois announced they would co-sponsor a $1.2 million study of a “hyperloop” connecting Cleveland to Chicago, cutting a 350-mile journey to just half an hour. It’s the fourth public study of the nonexistent transportation mode to be undertaken in the past three months.

“Ohio is defined by its history of innovation and adventure,” said Ohio Gov. John Kasich, who once canceled a $400 million Obama-era grant for high-speed rail in the state. “A hyperloop in Ohio would build upon that heritage.” In January, a bipartisan group of Rust Belt representatives wrote to President Trump to ask for $20 million in federal funding for a Hyperloop Transportation Initiative, a Department of Transportation division that would regulate and fund a travel mode with no proof of concept.

It’s hard to keep up: Last week, the Mid-Ohio Regional Planning Commission announced feasibility and environmental-impact studies for a different hyperloop route, connecting Pittsburgh and Chicago through Columbus, Ohio, to be run by a different company, Virgin Hyperloop One. The company—which fired a pod through a tube at 240 mph in December—is also studying routes in Missouri and Colorado.* Meanwhile, Elon Musk—who has obtained (contested) tunneling permission from Maryland Gov. Larry Hogan—pulled a permit from the District of Columbia for a future hyperloop station.

But let’s first look at the hyperloop [from our old friends, the incredibly flaky, Hyperloop Transportation Technologies -- MP] that Grace Gallucci, the head of the Cleveland regional planning association the Northeast Ohio Areawide Coordinating Agency (NOACA), told local radio could be running to Chicago in three to five years, and to the study of which the NOACA contributed $600,000.

Explaining the principal-agent problem

I thought I posted this years ago.

The Butler and the Maid from The Carol Burnett Show

Urban suburbs

My first corporate job also led to my first big move. I'd bounced around before that, between teaching and going off to grad school, but the moves had, at most, entailed crossing only one state line. The corporate position took me from just west of the Mississippi to the East Coast, with no social contacts or experience of the area to draw on.

I did what seemed like the sensible thing and got an apartment a few minutes from work. The company's campus was on the outskirts of town deep in the suburbs. Before that, I had lived in the country, small towns, and a couple of urban areas. Each of those three options had some strong pluses and, under the right conditions, could be quite appealing. By comparison, suburban living, at least without kids, had nothing to recommend it as far as I was concerned. I realized quickly but still too late that I should have picked an interesting neighborhood closer to the center of town, even though that would've meant an extra 20 or 30 minutes of commuting per day.

I did not repeat that mistake for my next job. Before moving, I scouted the area and ask around before deciding on a very cool neighborhood featuring lots of restaurants, bars, and the city's best art-house movie theater within easy walking distance. My daily commute was 45 minutes to an hour, but the traffic wasn't bad and much of it skirted around (and at one point across) the Chesapeake Bay making for a relaxing and scenic beginning and in to each workday.

That neighborhood was, for me, functioning as a de facto suburb. I was trading a longer commute for more desirable living conditions. The fact that these more desirable conditions were found in an area of higher density, rather than lower, does not affect the underlying dynamic.

One of the primary tenets of faith among utopian urbanists is that making it dense areas more dense will have a range of tremendously beneficial effects starting with great reductions in commuting and suburban sprawl. The existence of urban suburbs raises serious questions about that argument.

How big a deal is this? A good urban researcher could probably provide us with fairly reliable numbers, but we can say with some confidence that it's having a sizable effect in at least isolated cases. San Francisco has clearly become an urban suburb for Silicon Valley and, to a degree, Santa Monica and the rapidly gentrifying Venice Beach often fill the same role for much of Los Angeles.

It is worth noting that San Francisco followed by Santa Monica are probably the two cities that density proponents are most passionate about. This raises a disturbing question (and one which, I suspect, researchers will find more difficult to answer): if you greatly increase the density of cities that are already largely functioning as urban suburbs, will you in effect simply be producing more suburban sprawl?

"A space engine that could make flying into orbit commonplace"

Obviously, you can't compare a piece of technology in development to one that's up and working. The Falcon Heavy isn't a proposal or a prototype; it's a viable vehicle currently in use. The engineers at SpaceX deserve a great deal of credit for solving daunting technical challenges, but it's important to note that it took them much longer than they anticipated and, more to the point, there's nothing revolutionary about the technology. For that, you'd have to look someplace like this.

Sabre: the ‘Holy Grail’ in space technology

Researchers have spent decades trying to crack the problem of how to fly from earth to space and back again, writes Peggy Hollinger.

But it took a combination of rocket and nuclear science to make the breakthrough that is now drawing interest from around the world in Reaction Engines’ Sabre technology.

“It was pretty clear that the rocket needed a bit of a leg up and the only place to get that was from the Earth’s atmosphere,” says Alan Bond, one of Reaction Engines’ three founders.

“But the [speed] you get out of conventional jet engines isn’t enough. Somewhere in 1982 . . . I realised that a bit of theory I had used on nuclear engines 10 years before could actually help. So the hybrid air-breathing rocket engine came into existence.”

The engine combines jet and rocket technologies thanks to its unique pre-cooler, which extracts heat from air flowing in at high speeds of up to Mach 5 — several times the speed of sound.

This enables it to be used by the engine, which then uses the heat energy to power a turbocompressor. When at the edge of the atmosphere, the engine switches into rocket mode, using liquid oxygen to break through into orbit.

Unlike partially re-usable launchers being developed by the likes of SpaceX of the US, Sabre does not need to carry large quantities of liquid oxygen, and will not have to discard stages of the craft during flight.

It could be what the industry describes as the “Holy Grail” — a single stage to orbit system.

   

Another one from the turn-of-the-century Scientific American – – I can't decide between the Far Side or the Planet of the Apes joke here

This is an interesting piece from a 1907 issue of Scientific American, but what really caught my eye and the reason I'm sharing it with you is that I was under the impression that speculation about animals' problem-solving and tool-building ability was something that scientists first started seriously discussing in the mid-20th century. This account from the generally sober journal shows that the notion was at least considered suitable for serious discussion.

Small improvements

This is Joseph

I hope that this argument is a straw man:

Someone will say that mass shooting are rare. Moreover, if a future schoolyard shooter can’t get an AI rifle, he will use an only marginally less lethal weapon. Thus, preventing civilians from legally owning AI rifles would save only a few lives and only trivially reduce the total of gun deaths. So, really, aren’t you just virtue-signalling?

Because, if it is serious, it misunderstands technological advances, public health, and legal systems all at once.

1) Technology is incremental.  No one tweak is likely to have a 100% success rate.  The modern cell phone is the product of a thousand small tweaks over decades improving efficiency.  We did not go from huge analog radios to cell phones in one step. 

2) Medical and public health advances are never 100% effective.  Vaccines reduce infectious disease but they rarely eliminate it (smallpox being a nice exception).  Tactics like hand washing do not drop the rate of disease transmission to zero.  Seat belts do not eliminate auto fatalities, even if they reduce them.  Josh Marshall is good on this point. 

3) Laws reduce risks they do not eliminate them.  We have a lot of laws that reduce risks but don;t drop them to zero.  We have screeners for airplanes; nobody thinks that they are 100% effective but they are thought to reduce risk.  We require people to be licensed to drive not because it drops the rate of accidents to zero but because it reduces the rate.

I mean one could argue that particular guns are important for some reason or another, or that a specific law is bad.  But it is the balance between cost and effectiveness -- the effectiveness of a specific intervention may be low but so might the cost.  It isn't "virtue signaling" to note that a small improvement in a battery is better, even if it took hundreds of them to make a big difference.

And if we want to make these types of arguments (total benefit is small) then I have an idea for making airports more efficient.

I just realized that we haven't made fun of Gwyneth Paltrow for a long time.

Fortunately, Stephen Colbert's staff has been keeping up with goop for us.

Non-sarcastic praise for Elon Musk (no, really)

This is a big deal. Not as big as some of the hype would lead you to believe and not big in the way most people think, but it is a big deal.

The thing to focus on here is cost. I have seen various estimates and, while evaluating them is well beyond my expertise, if you're looking for a nice round number, 50% seems quite reasonable. We will have to see how reliable the system proves (when your payloads are valued in the billions of dollars, reliability is a major consideration) and will have to see how reusable the reusable boosters are, but at this point it certainly looks like Elon Musk has greatly reduced the cost of getting things into orbit.

This is an extraordinary advance, but it is more an accomplishment of determination then innovation. It is important to note just how mainstream the Falcon Heavy approach is. Most of the basic technology goes back to the Apollo program. This is not, in any way, meant to diminish the exceptional work done by the engineers of SpaceX. Getting this system to work on this scale is incredibly challenging, but it's the kind of challenge that probably could've been done by any number of other major players had they expanded the resources and maintained the focus. Musk does not seem to have shown any interest in radical approaches with even greater potential cost savings such as spaceplanes or railguns and that's not necessarily a bad thing. Both here and with Tesla, Musk has a history of making daring business bets but playing it relatively conservative with the technology. It's an approach with a lot to recommend it (though Tesla investors may not feel that way a year from now – – more on that later).

With so many people out to deify Elon Musk (in the case of the notorious Rolling Stone profile, almost literally), there is an enormous temptation to default to the iconoclastic, but it's important to remember that while Musk may not be the person (and certainly not the engineer) he and his accolades would like you to think he is, the man still has extraordinary gifts for promotion, organization, and motivation, and those gifts sometimes produce some worthwhile, even important benefits.

And, yes, watching those boosters land under their own power is really cool.

The stocks “couldn't be valued according to traditional methods because they represented a whole new era of the economy that was nothing like the past.” – Déjà vu all over again

I just finished a recent post on how companies try to get some investor love by associating themselves with sexy, overhyped sectors of the economy. This Forbes piece by Marius Meland nicely illustrates the point.

It's also of interest for a few other reasons. It fits in with our ongoing thread about the technological innovations spikes around the late 19th/early 20th centuries and in the postwar era. The subject of the interview, Burton  Malkiel, is possibly the best person you could talk to about market efficiency versus investor irrationality and the timing (a 1999 comparison of the internet boom to previous stock bubbles) makes the observations look particularly prescient in retrospect.

"Tronics boom" of 1959-1962

With the dawn of the space age, every electronics stock suddenly took off like a rocket on Wall Street, reaching valuation levels not unlike Internet stocks today. And just like a "dot com" can help an obscure offering surge into the stratosphere today, the key to a stocks success could often be found in its name in the 1960s as well.

"I call it the tronics boom because these soaring stocks usually had some form of tron or tronics in their name," says Malkiel, citing such "trons" as Astron, Dutron, Vulcatron and Transitron and "onics" like Circuitronics, Supronics and Videotronics, as well as one company that, for good measure, put together the winning combination Powertron Ultrasonics.

Then, like now, the demand was huge but the IPOs were relatively thin, so that stock prices would soar at the launch.

Investors argued that "tronics" stocks couldn't be valued according to traditional methods because they represented a whole new era of the economy that was nothing like the past. Promoters entered the stage to talk the stocks up further. As a result, stocks soared to multiples of 50, 100 or even 200 times earnings.

But in late 1962, "tronics" stocks and other growth issues came crashing down in a massive sell-off.

More memorable ads from the turn of the century Scientific American

More on the medicinal powers of Coke. 1907

Electricity meant push button control which, if you think about it, was a pretty big deal. 1903

The more things change...     1908

I keep thinking of jokes I shouldn't make. 1903

And from JUNE 10, 1905

From that same issue.

Not all that different from the pitch phone companies make to businesses today. 1908

Profit laundering

[I need to come back to this in more detail later, but just so it doesn't sit in the queue forever, here's a quick rundown of the concept.]

It's not always rational, but investors care a great deal about where the money comes from. Two companies with exactly the same cost and revenue numbers will often be valued very differently. Sometimes, the preferences are based on perceived possibilities for growth or fears about the future of a particular business or market. Other times, it comes down to the sexiness of the industry and/or the buzz and halo effect surrounding the company.

Obviously, management will do everything it can to put their businesses in the hot category. When a company has multiple sources of revenue of varying attractiveness, it will do its best to maximize the perceived portion of the money coming from the cool streams and minimize the perceived amount coming from the uncool.

We saw some really blatant examples of this in the 90s Internet boom – – companies using brick-and-mortar profits to create the impression of online success – – but it certainly preceded that and it's never gone away since.

The lesson that many investors and most business/financial journalists need to take away from this is that, whenever you have a company with multiple revenue streams, one or more of which is particularly sexy, you should always assume you are being to some degree misled about which stream is actually bringing in the profits.