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Un Poco Loco, But Effective? Almost 1 Year of President Milei

Zachary BartschLeave a comment

I don’t like to follow politics, much less politics in another country. Policy on the other hand? I’m always hooked.

Most of us have heard of President Javier Milei by now. He became Argentina’s president in December of 2023. Prior, he had been in charge of a private pension company, a university professor who taught macroeconomics, had hosted a radio show, and has written several books. See his Wikipedia entry for more.

What makes him worth talking about is that he appears a little… unique. He’s boisterous and rattles off economic stories and principles like he wants you to get up and do something about it. To anyone in the US, he looks and behaves like a weird 3rd-party candidate – sideburns and all. He’s different. Here he is bombastically identifying which government departments he would eliminate:

I’ve enjoyed the spectacle, but haven’t paid super close attention. I know that he is libertarian in political outlook, drops references to Austrian economists and their ideas by the handful, and doesn’t mince words. Here he is talking at the Davos World Forum (English & Dubbed).

So what?

Argentina has a long history of high inflation and debt defaults. Every president always says that they’ll fix it, and then they don’t. There have been periods of lower inflation, but they don’t persist. Among Milei’s stated goals was to end that cycle and bring down inflation. His plan was to substantially reign in deficit spending by eliminating entire areas of government. We’re now approaching a year since Milei took office, and I thought that I would check in. Below is the CPI for Argentina since 2018. As soon as Milei took office prices spiked, but have started coming down more recently. Similarly, the Argentine Peso has fallen in value by 50% since he’s taken office. Ouch!

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Bonkers BBC Weather App: 18,995 mile/hour Winds in U.K.

Scott BuchananLeave a comment

Last week as the U.S. National Weather Service was warning Florida residents of incoming 120 mile/hour winds, folks in the U.K were informed by the BBC weather app that the wind speed outside was – – wait for it – – 18,995 mph.  Hurricane force winds were displayed for many cities worldwide. Not to mention temperatures of around 400 F for Nottingham, New York, and Sydney.

The BBC of course issued retractions and apologies, blaming a third-party data supplier. Said supplier, meteorological forecasting company DTN has apologized for what it called a “technical error”.

I had my Brave browser do an AI search/summary on the topic, “What measures does the BBC take to prevent or mitigate the impact of third-party supplier issues on its weather forecasting app?”. Here is what it told me:

Based on the provided search results, the BBC takes the following measures to prevent or mitigate the impact of third-party supplier issues on its weather forecasting app:

  • Diversified data sources: The BBC uses multiple data suppliers, including MeteoGroup, to ensure that its forecasts are accurate and reliable. This diversification helps to reduce dependence on a single supplier and minimizes the impact of issues with a particular supplier.
  • Real-time updates: The BBC’s weather app provides real-time updates, which enable it to quickly respond to and correct any errors or inaccuracies caused by third-party supplier issues.
  • Error detection and correction: The BBC’s weather experts closely monitor forecasts and are able to detect and correct errors or inaccuracies caused by third-party supplier issues.
  • Technical redundancy: The BBC has implemented technical redundancy measures, such as backup systems and fail-safes, to minimize the impact of third-party supplier issues on its weather forecasting app.
  • Collaboration with other organizations: The BBC collaborates with other organizations, such as the Met Office and Scottish airline Loganair, to improve forecast accuracy and mitigate the impact of third-party supplier issues.
  • Investment in technology and AI: The BBC invests in advanced technology and artificial intelligence to improve the accuracy and reliability of its weather forecasts, reducing the reliance on third-party suppliers and minimizing the impact of issues.
  • Monitoring and maintenance: The BBC regularly monitors and maintains its weather forecasting app and underlying systems to identify and address potential issues before they become critical.

These measures demonstrate the BBC’s proactive approach to mitigating the impact of third-party supplier issues on its weather forecasting app, ensuring that users receive accurate and reliable forecasts.

That all sounds great in theory, but in practice something failed last week. I guess there is so far no fool-proof substitute for having a pair of human eyeballs look at material before it is flung out into cyberspace. But that might cost money.

Nobody is saying, but it would not surprise me if the BBC adds yet another layer of auto-checking to its robo-forecasts, to at least flag physically unrealistic numbers.

Apropos of everything

mdmakowsky3 Comments

Robert Nozick and John Rawls were intellectual rivals, friendly colleagues, and even members of the same reading group. Their conversations, at least the ones we were privy to through their iterations of published work, were dedicated to reconciling the role of the state in manifesting the best possible world. Nozick, it can be said in a gratuituous oversimplification, favored a minimal government while Rawls, similarly oversimplified, favored a larger, wider reaching set of government institutions. Both were well aware of the risks and rewards of concentrating power within government institutions, they simply arrived at different conclusions based on risks each wanted to minimize versus those they were willing to incur.

My mental model of the evolution of government (influenced heavily by Nozick and refined towards the end by Rawls) goes something like this:

  1. 100,000 years ago roving bands of humans grow to thrive in their environment by solving collective action problems, largely through familial relations. Larger groups have more success hunting, foraging, and protecting themselves from predators.
  2. Eventually some groups get so good at collective action that they begin to prey on other smaller groups. These “bandits” gain more through resources taken by force than they would strictly producing resources through hunting and foraging.
  3. This creates an arms race in group size, with bigger groups having the advantage while facing the diminishing marginal returns imposed by difficultings in maintaining the integrity of collective action in the face of individual incentives to free ride i.e. its hard to get people to pull their weight when their parents aren’t watching.
  4. Some groups mitigate these difficulties, growing larger still. At some threshold of group size, the rewards to mobilitity are overtaken by the rewards to maintaining institutions and resources (freshwater, shelter, opportunities for agriculture), leading to stationary groups.
  5. These stationary groups begin to act as “stationary bandits”, extracting resources from both outsiders for the benefit of their group and from their members for the benefit of their highest status members.
  6. Differing institutions evolve across groups, varying the actions prescribed and proscribed for leaders, members (citizens), and non-members. Some groups are highly restrictive, others less so. Some groups are more extractive, funneling resources to a select minority. Some groups redistribute more , others less.
  7. Democracy evolves specifically as an institution to replace hereditary lines, a deviation from the familial lines that sat the origin of the state all the way back at step 1. Its correlation with other institutions is less certain, though it does seem to move hand-in-hand with personal property rights and market-based economies. Democracies begin to differentiate themselves based on the internal, subsidiary institutions they favor and instantiate.

A lot of my political leanings can be found not in favoring Nozick or Rawls, but in the risk immediately preceding their point of divergence. When I look at well-functioning modern democracies, I see an exception to the historical rule. I see thousands of years of stationary bandits voraciously extracting resources while high status members taking desperate action to maintain power in a world where property rights are weak and collective action is tenuous. Rawls saw a growing state as a opportunity to create justice through fairer, more equitable outcomes. Nozick saw a growing state as a further concentration of power that, no matter how potentially benevolent today, would eventually attract the most selfish and venial, leading to corruption and return to the purest stationary bandit, only now with the newfound scale.

Both strike as me as perfectly reasonable concerns about very real risks. Which do I believe the greater risk? Depends on the news and what I had for breakfast that day. In the current political context, both in the US and several other democracies, I am of the growing opinion they would be in broad agreement that the biggest risk is not the perversion of democracy from suboptimal policies and subsidiary institutions (step 7), but rather a disastrous reversion to the pre-democratic institutions (step 6).

The most underrated aspect of democracy may very well be its fragility. While historical rarity may not be undeniable evidence of inherent fragility, but it would certainly suggest that once achieved it is worth the overwhelming dedication of resources, including the sacrifice of welfare optimality, to ensure its perserverance.

It cost a lot to get here. A lot. Sacrifices that are hard to even conceive of, let alone empathize with, while living within the profound luxury of modern life. I have no doubt that many of us will find ourselves underwhelmed with the policy platforms of the full menu of viable candidates made available to voters at every level of national and local office in a few weeks. So take this little scribbling for exactly what it is: an argument to vote against candidates that reduce the probability of our constitutional republic remaining intact. By comparison, all the other differences add up to a historical rounding error.

It won’t be liberals that kill the Cybertruck

mdmakowsky1 Comment

The rise of large pickup trucks and SUVs in the US is generally tied to the implicit subsidy borne of their exemption from Corporate Average Fuel Economy (CAFE) standards. The seemingly ever-growing scale of these vehicles has produced a perfect example of negative externalities in the form of increased risk to other drivers, cyclists, and pedestrians (yes, a pedestrian is in danger from any vehicle, but the decreased maneuverability from greater carriage remains relevant).

This particular negative externality is not wholly uninternalized by large truck drivers, however. They pay higher premiums to the insurance companies that must cover the payouts to negligent and catastrophic loss of life when their customers are found at fault in collisions. Without the internalizing of these externalities through civil cases, trucks would likely be even larger and more dangerous.

Which brings me to the Cybertruck. I don’t care for it as a vehicle for a variety of reasons, but I similarly don’t care for Lamborghinis. My tastes are irrelevant. What is relevant is that it is made out of 30-times cold-rolled steel, a design choice I believe reflects its ambition to appeal as a sort of post-apocalyptic survivor’s vehicle that can literally physically dominate other vehicles.

This is likely to be a very, very expensive choice.

It will probably take a while for the insurance market to internalize the externality, but as the number of Cybertrucks on the street increase, so will the number of collisions and, in turn, fatalities. Fatal accidents are high variance, high cost events that loom large in the vision of insurers. The actuaries will crunch the numbers and premiums will increase. And not just because of short term increases in fatalities. Insurance companies are in the forecasting business as well. If they anticipate that courts may respond to a vehicle whose makeup makes it a disproportionate threat to others on the road by tilting the scales of fault towards their drivers, then its entirely possible that there remains no feasible premium that remains profitable. There’s a reason Jackie Chan can’t get life insurance.

What happens when a $90k, 6,800 pound steel battering ram requires that it’s drivers be self-insured? What happens in states that don’t allow drivers to self-insure? Even if there remains a small number of companies that offer “exotic” vehicle insurance, the premiums will turn push prospective ownership further up the demand curve, turning the Cybertruck into the kind of road oddity you see every few years. I have seen a Lotus Exos exactly once.

It won’t be liberals that kill the Cybertruck. Hell, if they manage to repeal the CAFE exemption it’ll be the single biggest boost a giant EV truck could hope for. No, it’s going to be the market that kills the Cybertruck.

Florida Ballot Initiatives 2024

Zachary BartschLeave a comment

The November election in Florida will include 6 proposed amendments to the Florida State Constitution. They only pass if at least 60% of voters vote YES. Here are some brief takes from an economic perspective.

Amendment 1: Partisan Election of Members of District School Boards

Currently, school district boards are locally elected and they do not have a party affiliation listed on the ballot. If passed, the amendment would permit party affiliation to be on the ballot. Partisan primaries would also be introduced, reducing the number of candidates in the general elections. The argument in favor is that party affiliation itself communicates information to voters. Removing that information forces voters to abstain, vote randomly, or to vote based on other information.

An argument against is that, in Florida, only registered party members may vote in primaries. If passed, parties will endorse particular candidates according to the primary results, winnowing the field. I happen to live in a county with an overwhelming republican majority, so the party-endorsed candidate will probably win. The outcome will be that the median republican primary-voter will choose the winning candidate in the primary rather than the median voter during the election. Voting “YES” aggregates information from a smaller set of voters.

I’ll vote NO.

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The Power is still out

mdmakowsky3 Comments

We’re on day 4 without electricity, so this will be a brief post. Things I’ve learned or had reinforced:

  1. Prepping for the apocalypse is silly but prepping for a disaster is not. This time has been inefficient and uncomfortable, but not especially problematic. Compared to Asheville, we got off quite easy, a fact made all the clearer by our fortune to maintain a fairly normal life thanks to the most modest of preparations: a couple charged phone banks, LED lamps, batteries, a propane tank and grill, and coolers pre-filled with ice.
  2. Price controls during a disaster, formal and informal, remain problematic. More than few people saw their esteem of Clemson drop as fans descended on the region for the football game and grab up every bag of ice they laid eyes on to facilitate their tailgating, a problem that probably could have been averted by simply letting the price of ice quadruple.
  3. Public goods matter and government remains a superior way of providing and coordinating large swaths of them. Not to get all Nozick and Rawls on you, but think of it this way: disaster response and coordination requires scale. Any institution that emerges that is superior in providing such responses will have the scale of government, will be a de facto government, regardless of whether you call it a government or not.
  4. Power lines. Bury the damn power lines. God how I miss living where the bulk of power lines were underground. I never knew how good I had it.
  5. Hank was right. Propane and propane accessories are where it is at.

Stay safe everyone.

Did Sherlock Holmes Really Wear a Deerstalker Hat?

Scott BuchananLeave a comment

Quick, who is the guy on the right in the illustration below?

Image: YouTube

Here he is again:

We’d know him anywhere, thanks to that deerstalker cap. This was a practical hat used by hunters and other outdoorsmen in England at the time. It was popular with women as well as men. The front and back brims warded off rain and sun. The ear flaps tied under the chin for cold weather or wind. The flaps were tied at the top when they were not down. Holmes’s hat was apparently in a hounds-tooth tweed pattern of water-shedding wool.

How often did Arthur Conan Doyle feature his detective character wearing this headgear? Actually, he didn’t at all. The stories never once mention Holmes in a deerstalker cap (or an Inverness cape, another Sherlock Holmes trope), although such a hat is not implausible.

When the first sets of Sherlock Holmes stories appeared serialized in the Strand magazine in the early 1890’s, they were illustrated by artist Sidney Paget. Paget is responsible for the deerstalker cap image. Here is the detective and his sidekick on the way to investigate the Boscombe Valley mystery:

Image: Wikipedia The Boscombe Valley  Mystery   

It would seem that Sherlock Holmes lived and died by his deerstalker, as evidenced by Paget’s illustration on the detective’s struggle to the death with the arch-villain Professor Moriarity above Reichenbach Falls, in The Final Problem:

Image: Wikipedia

( Doyle wrote The Final Problem to kill off his detective character, so the author could move on to more dignified pursuits than writing Sherlock Holmes stories. He did not anticipate the public outcry at the demise of the popular character. Men in London wore black armbands, and subscriptions to the Strand magazine were cancelled in protest. Eventually Doyle brought Holmes back in a further series of stories, with the literary device that Holmes had faked his own death in order to hide out from a criminal syndicate. )

Even Paget did not keep Holmes in this hat all the time. When the great detective was not sleuthing in the outdoors, he was properly dressed for English society. It was unthinkable for a gentleman to appear in public without some kind of hat. For instance, here are two illustrations from The Adventure of Silver Blaze. Holmes is depicted below in his deerstalker when confronting a bad guy at the gate of a neighboring farm, after tracking a horse across the moor:

In the same story, however, Holmes is drawn by Paget at a horse race event wearing a formal top hat like the other gentlemen:

Image:  Wikipedia    Holmes with Silver Blaze (forehead dyed), 1892 illustration by Sidney Paget

If all this leaves you itching for your own deerstalker cap, there are several versions available on Amazon, e.g. here and here. 

Bonus: if you yearn to identify with a more contemporary hero, see here for info on Indiana Jones fedoras.

Bad service is a sign of a better world

mdmakowsky12 Comments

I’ve been hearing more grumbling about bad service in restaurants than usual, bundled with a growing nostalgia for when service was “better”. This could, of course, be simply a sign that my cohort and I continue to rise in age, but let’s put aside healthy skepticism for a moment and accept this observation at face value. What if service in restaurants, hospitality, etc is, in fact, lower in quality than it was one or two decades ago? I would like to suggest that this is a good sign of improving times.

In 1930, 1 in 20 households had servants in their home. “If the poorest households are excluded from the statistics, the percentage of homes with servants increases dramatically, as indicated by 1930–1931 studies of urban, college-educated homemakers, or middle-class families, from 20 to 25 percent of which had a servant” (Palmer 2010). By 1950 these numbers were cut in half and they’ve plummeted since. Imagine a elderly couple who had raised children with full-time, possibly live-in, servants have since grown to watch their children marry and have children of their own. They go out to enjoy a family meal in 1975, doting over their grandchildren while oh-so-subtly critiquing the parenting technique of their sons- and daughter-in-laws. When you see them in your mind’s eye, are they happy with the restaurant’s service? Is there anything a server or manager can do that can possibily compete with the level of service they enjoyed in their parenting and prime earning years?

I suspect that you are envisioning something similar to myself: a Karen, indefatiguable in her complaining, a gray-haired husband encouraged to leave an outrageously low tip. They enjoyed service at the level of employer and boarder, in a social construct that we would today frame as a remnant of an outdated class system. You may be annoyed that no one has refilled your water glass in 10 minutes, that the menu is a QR code, that you are expected to exceed 20% in your tip. Your disappointment, however, is positively quaint when compared to the dropoff relative to what a significant portion of the population was wholly accustomed to even 2 generations ago.

These entitled complainers that you absolutely cannot empathize with? The mechanism behind their comtemptible behavior is the same that leads you to tip 18% before leaving the Cheesecake Factory in a huff. The world has moved on, gotten better, and brought Baumol’s inescapable cost disease with it. The time and attention of humans is more expensive than ever. The pandemic brought with it a shock to the hospitality labor market that is still rippling today. A lot of people learned about the market value of their labor and those that got out first have reported that life is often better on the other side, that the pay was better than expected and their work involved immeasurably fewer misogynistic sad dads and spiraling white wine Karens. Wages have of course adjusted, but so has employment. I don’t have the data in front me, but anecdotally I’m seeing fewer hosts and table bussers, more tops per server, more lunch shifts stretched across an assistant manager and server duo. That means less service on average with a higher variance in quality.

Which is fantastic. The world is getter better and people’s time and energy are more valuable for it. Should restaurants find that the balance of profit margins increases faster with quality of food rather than service, all the better. Temporary parasocial relationships are right up there with big houses and fast cars for me: overrated traps that siphon away household resources from the things that actually matter. The ribeye served with a smile over clean linen is fine, but it’s got nothing on tacos uncermoniously dropped on a plastic table you can afford to share with someone you love.

You’re doing it now

mdmakowskyLeave a comment

This speech is still the best advice for anyone in the academic or artistic line of work.

https://thecomicscomic.com/2015/07/23/dana-goulds-just-for-laughs-keynote-address-of-2015-youre-doing-it-now/

If audio doesn’t work for you at the moment, here’s a transcript:

Please enjoy my Keynote address fromthis year’s Just For…

This post might seem lazy. Because it is. But it’s also a measure of my accumulated wisdom. Not so much that I’ve perfectly internalized the wisdom of this piece in my bodhisattva-like personification of enlightenment. Rather, it is a demonstration of my wisdom because I have written and posted it in lieu of an anger-filled rant about the horrors of politicians pandering to their base in which I imply vast swaths of humanity are less-than-perfect people. Nope. Don’t need it. This is better. Listen to what Dana has to say and think about how it applies to your career.

Happy Labor Day, here’s a prediction

mdmakowskyLeave a comment

Rather than engage in meaningful labor on this hallowed day, I will instead make a prediction: if a significant tax on unrealized capital gains is introduced, the following markets will enjoy increased prices:

  1. Art
  2. Accountants

Now, what will define the art in question is beyond me, but I imagine unrealized gains from art will be easier to quantify if the art in question exists as anything more than one of a kind, so I expect definitively “one-of-a-kind” pieces i.e. classics will experience the lion share of increased demand.

As for accountants, the demand for training in how to properly ledger assets to remain outside the bounds of quantifiable equity assets will prove a boon to anyone with an accounting degree. Accounting talent for establishing loan collateral two degrees removed from equity will similarly grow in value.

I have additional predictions, but putting them forth under my name and defending them in a public forum would require a meaningful amount of labor, which I am not willing to provide today.