Three Things I Learned from My Favorite Bloggers

There are many, many thinkers I have followed. Among the many, an elite few have earned the status from me of devoted readership. I don't always agree with them, fortunately. But I almost always find them some combination of insightful, provocative, and worthy of my attention. The lists below are certainly not exhaustive. While in many cases I learn things from those I follow that change my mind, in many other cases but equally as important I learn more about things I thought I already knew.

Here are three things I've learned from my favorite bloggers* (in alphabetical order):

Scott Alexander (Astral Codex Ten & formerly Slate Star Codex):

• Thinking out loud (in writing) can be a very productive way to both discover truth and convey good ideas.
• Embrace your mistakes and learn/teach from them.
• The realm of psychiatric conditions is vast, nuanced, and very much misunderstood.

Don Boudreaux (Cafe Hayek):

• There is value in repetition. (He even recognizes this and is, rightly, proud of it.) 
• There is always an audience for hearing arguments on first principles: free trade, trust in free markets, freedom of movement across borders, anti-cronyism, ...
• Liberty not only deserves a passionate and wise defense; it requires it for its preservation and advancement. A role for which he is very suited. Before COVID I did not appreciate this nearly enough. His continual presence in the space of defending rational positions and freedom has taught me much about what is needed.

Jason Brennan (200-Proof Liberals):

• Strongly expressed and even provocative facetiousness can very succinctly convey an argument. But...
• You don’t have to mince your words. Just come out and state your point of view. 
• If you may do it for free, you may do it for money.

Bryan Caplan (EconLog (UPDATED: and now Bet On It)): 

• Friendly curiosity is the most constructive way to engage disagreement and is a valuable route to learning. Test your arguments' strength by assuming the premises of your opponent and see if your position still stands (or at least stays strong with a minor need to relax the opponents assumptions). Also, focus on achievable goals. To change minds, one needs to work on minds with which one shares connections and communication--you need to speak their language. Therefore, work on your in-group despite your desire to focus on the out-group.
• Education is mostly about signaling, most of the value of it is captured by the individual, and as a result we have an economically destructive arms race. 
• Open borders is an enormously important idea that stands up against all attackers. 

John Cochrane (The Grumpy Economist):

• Don't be too quick to dismiss that which the market is pervasively and perpetually providing. There just might be a rational reason you are overlooking that explains the perplexity. Give heed to Chesterton's Fence. For me this would be investment active management (active stock and bond picking), real estate agents, extended warranties, etc.
• The market can (and in the past did) take care of the preexisting conditions concern in health care insurance.
• When it comes to the important issues of economic policy, economic growth IS IT. And it could very well be meaningfully higher than it persistently is.

Tyler Cowen (Marginal Revolution): 

• Be succinct. It is undervalued and under practiced.
• Be curious and take risks. 
• Read and write. Everyday and more than before. 

Robin Hanson (Overcoming Bias):

• Do not let the conventional wisdom or the fear of shallow sensibilities hold you back from exploring ideas and asking good questions.
• Prediction markets are an excellent method for discovery that are very much underused. As Alex Tabarrok says, "Betting is a tax on bullshit".
• The stories we tell ourselves are often not the full story or truth--X isn't about X. Robin better understands the human world than any one I follow or know of, and that is a high bar.

For a primer on Hanson see this.

David Henderson (EconLog):

• You can blog with a smile on your face (in stark contrast to Paul Krugman, who often writes as if someone is fiercely pinching his inner thigh).
• Always look for opportunities in everyday life to apply basic economic lessons (the economic way of thinking). For example, focus on the incentives, ignore the sunk costs, think on the margin, etc.
• Be optimistic about changing minds and give those who disagree with you the benefit of the doubt. As a corollary when you’re going to disagree with someone, look for points they make that you agree with at the same time. For instance if you’re going to disagree with someone’s arguments in an article, find other points in the article where you do agree. (I’m glad he didn’t lose his optimism in that 2007 fire.)

Michael Huemer (Fake Nous):

• The thinking and arguments of elite intellectuals can be as hollow and problematic as that for simple elites in general. In short, don’t fall for the appeal to authority fallacy.
• Don't seek expecting to find philosophical nirvana in any philosopher's arguments.
• Common sense is a strong and underrated pillar of sound thinking.

Arnold Kling (askblog & In My Tribe):

• He exudes the quintessential “on the other foot” point of view. He sees things from another dimension entirely. 
• Find a way to succinctly communicate your ideas—in his words, "Klingisms". For example, easy to fix versus hard to break, …
• Follow and emulate those who deliberately and consistently speak with the other side rather than about or at the other side. This goes along with his idea of being charitable in argumentation and debate.

Steven Landsburg (The Big Questions):

• Think deeply continually asking "why would that be?" and "does this explanation survive through last contact with the enemy?".
• Build simplifying models that give definitive answers—especially interesting when the answers are counter intuitive.
• Of everyone I regularly read, he posts the most things that are the most challenging to my priors in a way that leaves my priors in smithereens—and that is a very good thing even though it is quite frustrating for my contentment! And that is despite the fact that our views on the world, intuitions about morality, and priors generally seem quite aligned. 

Phil Magness (AIER):

• Persistent and thorough scholarship is the antidote to resistance and rejection of unpopular positions especially when the opposition is driven by social-desirability bias and mood affiliation.
• The wealth and success of the early United States including the Southern U.S. was not the result of slavery. 
• No one actually paid the astronomically high marginal tax rates supposedly targeting the highest earners in the U.S. during the mid 1900s.

Michael Munger (AIER, Kids Prefer Cheese, & EconLog - there is not always a consistent home base for his writings):

• There is often a more intriguing and insightful other, other side. He is a three-handed economist. 
• True open-mindedness is a wonderful but rare quality. He has it and conveys it splendidly. 
• Re-examined knowledge yields improvement--even third and fourth derivatives. His latest insight is always either a new, deeper wrinkle on a previous insight or a way he had been wrong all along in how he previously understood something.

Matt Ridley (Rational Optimist):

• Innovation is unpredictable, depends on trial and error, but once started, is so inexorable it looks inevitable.
• Human culture and technology grows through the magic of exchange, whereby ideas have sex creating offspring that are combinatorial advancements.
• The more you look, the more obvious and undeniable the relentless betterment of the world is revealed.

Scott Sumner (EconLog & The Money Illusion):

• Never reason from a price change.
• The market should guide monetary policy and the Fed needs to be (and can be) structured to follow the market’s guide.
• The middle class in America is not on the list of important things to be worried about.

Alex Tabarrok (Marginal Revolution):

• There is a very straightforward explanation for why the prices of many things today (health care, education, et al.) are so d*mn high--the Baumol effect. While I quibble with how complete this explanation is (70-80%?), it is obvious once [he makes] you think about it.
• We need more police. And better policing to be sure, but more police is an obvious answer once you look at the evidence.
• Dominant Assurance Contracts can solve the public good problem and "open the provision of public goods to entrepreneurship, innovation, and the market discovery process".

*I make no distinction for columnist or other such titling as I believe that the term blogger is the best all-encompassing word for those who write of their own opinions and expertise. 

P.S. Richard Hanania and the Resident Contrarian, relative newcomers to those I dedicatedly follow, will make this list once I learn 3 distinct things--it won't be long. They are both excellent.

How To Succeed In Business Trying Really Hard

I just stumbled upon something I wrote about 15 years ago--at least that was when it was saved last. I thought I would share it here. Many of these were things I learned and many of them the hard way in my first job as a financial analyst at the Oklahoma Publishing Company (OPUBCO) where The Oklahoman newspaper was the flagship product.

Some of these have a touch of Grayson Moorhead Securities to them, but you don't have to be that cynical. I have witnessed many times people roll their eyes at advice like this only to then make the very mistakes these are addressing.

How to Succeed in Business Trying Really Hard

1. Be a solution provider. While it is important to have the intellect and experience to identify problems, the ability to create and the courage to suggest solutions is a higher skill.
2. Make conscious efforts to avoid digressions into the minutia. Keep communications only at the greatest level of detail necessary for meaningful ideas.
3. On the other hand, don’t hesitate to consider the depth of an issue. Neglecting the full implications of the subject can easily lead to poor decisions.
4. Balance work and rest in the following manner. If you find yourself looking for excuses to take breaks often or find yourself taking long breaks and feel that you can’t focus on the work at hand, make strides to commit yourself to the work. In this case you are resisting the desire to avoid the work. However, if you find yourself unable to break away from the endeavor despite having toiled for a considerable period, force yourself to step away. In this case you are resisting the desire to trade quality for completion. The result could be an eventual disappointment and may require more work to correct. A well-placed retreat can pay dividends in the form of a new perspective and fresh ideas.
5. Don’t burn undeveloped bridges. It is easy to see existent relationships you would like to preserve. It is much harder yet still vital to long-term success that you develop and nurture relationships that you cannot yet foresee.
6. Don’t build a house in which no one will live. Don’t expend resources toward a goal with high theoretical promise but little practical use.
7. Don’t confuse clichés with sound arguments.
8. Don’t be a Monday-morning quarterback on Sunday afternoon. The time for second guessing is after the fact not during the game. Corollary: Save your nostalgia for Sunday morning brunch. Make today the good old days.
9. Take on the mentality of a librarian rather than a firefighter. Where a fireman does a heroic task in a place he has probably never been before doing the work of saving what he can only to leave once the need is extinguished, a librarian begins work everyday doing the same thing as the day before. A fireman eliminates the need for his services. The librarian creates and enables those needs. Business success is built with librarians not firefighters.
10. Idolize the objective not the process.
11. Continually work to find the right price. Consider the two major risks a salesperson runs. Both involve leaving money on the table. The first is the risk of selling too few for too much—a price point that is excessively high results in unnecessarily low sales volume and hence revenue. The second is the risk of selling too many for too little—a price point that is unnecessarily low results as well and obviously in unnecessarily low sales revenue. This all seems and is (or should be) obvious. Yet time and again businesses opportunities fail on the basic matter of getting price right including adjusting to new realities.
12. Don’t try to live in fantasy land. Good business decisions are bounded by practicality. However, don’t let this go so far as to stop trying things that will fail. Just put practical limits on the extent of the possible failures. Success is built on a thousand small failures. Complete failure comes from one or two unbearable risks that go bad.
13. Understand the Law of Categorical Gravity: Firms within the same industry or complementary industries tend to locate near one another in time and space. And as they get closer and closer they are attracted to one another with greater and greater force. In this way they act as immediate substitutes but long-term complements.
14. Don’t continue to bear burdens after they have been lifted: the analogue here is carry-over heat. When you cook a large rib roast, you might want to hit a target internal temperature of 140 degrees. If you wait for a probing thermometer to register 140 degrees before removing the rib roast from the heat, you will end up way past your target temperature. The reason is carry-over heat. After you remove the roast from the oven, radiation from heat stored in the outer layers of mass as well as from the cooking vessel will continue to cook the roast and can drive the core temperature up another 10-15 degrees. Similarly, we can let stress build in our systems even after the stress-causing burden has been removed or corrected. This is as much about internal morale as it is marketing.
15. Don’t bear burdens by proxy. Is this issue your burden, or is it a colleague’s?
16. You can’t live at the end of a one-way street: you must be consistent in your principles and actions. It is the only way to earn and keep the respect of your peers, followers, leaders, and rivals.
17. Learn to ask hard questions and to accept hard answers.
18. In business writing conclusions and recommendations should be reasonably obvious. A good test is: if removed entirely, could a reasonable reader surmise and write themselves in essence the same conclusion section that you yourself have written albeit hopefully more fluently.
19. Set aside time to meditate on the big picture. For any major project or decision, take some time to contemplate how the possible alternatives and the potential outcomes fit together with your overall goals. Consider the situation from a strategic viewpoint as many good tactical decisions have poor strategic results.
20. At the time when an issue arises, speak up sooner rather than later, and if not then, then later rather than never at all. Corollary: Speak in a measured manner and to the correct audience.
21. In an important respect problems and strengths have quite opposite characteristics. While it is easy to create problems, properly identifying them is a much finer skill. Conversely, the ability to create and foster strengths is always dear, but the knack for recognizing them is a common trait. The highest talent is the combined skill of determining the true problem and calling upon the proper strength as a solution.
22. A poor reaction to a mistake makes for a worse mistake.
23. The necessity of scrutinizing one’s own work is directly proportional to the work’s exposure and purpose.
24. Update! Don’t hesitate to reevaluate your position by modifying or even reversing if new information truly warrants that new appraisal.
25. Manage your image. No one else will manage it for you. In fact, others will create a caricature of your image—sometimes intentionally, sometimes unintentionally.
26. Try to distinguish yourself through your work (not your self-promotion) so as to be seen as an irreplaceable talent rather than a commodity.
27. Know how to argue, when to argue, and when to agree. Effective, successful teams argue thoroughly, critically, intelligently, passionately, and professionally, but they also know when and how to present a unified front.
28. Do not solve problems before they are problems. You cannot be a hypothetical firefighter.
29. You get what you measure. Corollary: Your value to the firm is how you are measured.
30. Don’t get married to inconsequential ideas. Don’t fight for worthless victories. You only get so much combat equity.
31. Consider if a fantastic goal deemed too impractical if not “impossible” is because you cannot imagine living there or cannot yet see getting there. Fortunes are made solving the latter problem while fortunes are lost chasing the former.
32. Completion is possible. Perfection is not.
33. Employers can mitigate ineptitude much easier than carelessness.
34. In business you are either surfing or drowning.
35. Know the source of your competitive threat. In the races we run sometimes we are overtaken from behind; other times the path we have chosen simply runs out with us left exasperated staring at a dead end.
36. The two fundamental questions in business are: What does the customer demand? How can my firm be the supplier? (i.e., What do you want? How can I deliver it?)
37. Don’t be afraid to be skeptical of a business practice, but don’t be surprised if there is a rational explanation for it.
38. It isn’t about where you have been; it’s about where you are going.
39. If you don’t know the cost of the marginal unit, you’re better off not “knowing” anything about cost at all. Knowing other bits of data like total cost, average cost, an example of cost, will lead to very poor decision making quite often. Those figures will deceive as much as enlighten—they anchor us to irrelevant comparisons.
40. Strategy is not the sum of tactics; strategy must be a whole unto itself; you cannot back your way into a good vision.
41. The four essentials of negotiation are: know what you want, understand what you can give, determine what you can take, be willing to walk away.
42. Just because you need more doesn’t mean you can get more: a revenue shortfall of goal or forecast/budget does not create a selling opportunity. Remember: Update!
43. Beware following “Best Practices”. Sometimes you are following a leader; sometimes you are following the proverbial lemming who happens to be in front of you.
44. A business decision’s probability of success is only partly dependent upon the ability of the decision maker. The best business leader in the world couldn’t have saved the buggy whip industry from the approaching avalanche that was the automobile.

Should Tipping Be My Only Charity?

I'm considering going a year where my only form of charity will be excess tipping--an amount well over and above what I would otherwise give. Before you dismiss this out of hand, consider the problem of charity  My ability to connect with truly effective altruism is very limited even if I religiously adhere to the formal EA movement or even if I completely reject the EA network. What I can do is reward good work and people working in general through gratuity. 

In truth I really probably can't make it my only form of charity from a practical standpoint. There are just too many obligations I have to traditional charity (e.g., my church donations, the United Way contributions I make through work, et al.). One could certainly argue the merits of these including how much is charity on my part versus quid pro quo where the quo is social desirability bias, virtue signaling, tax benefits (really just a subsidy for giving), and non-pecuniary benefits (e.g., two days of extra vacation for a continued minimum United Way donation). Nevertheless, I could substantially reduce all traditional and otherwise forms of charitable giving including donations of my time with excess tipping as the substitute. 

Let's consider some rough math on what this might mean. Hypothetically assume my desired annual charitable giving through this experiment to be $10,000. A point of consideration would be if the tipping would be limited to very traditional tipping situations, namely dining, valet, room service, doorman, etc., or if I would extend this to areas like occasional household services, namely plumbers, electricians, furniture movers, etc. One might argue that everyone should be tipped. However, to keep the math easy, I'll limit it to waitstaff in dining. 

Let's further suppose I dine out an average of 7 times a week at a moderate expense, 2 times a week at high expense, and 1 time per four weeks at a very high expense. The kids are with me for the moderate and high expense meals while it is just the wife and I for the very high expense meal, which are the following on average (with just the standard tip of 15%): $50, $100, $300. Per week that becomes $250 ($50x5) + $100 ($100x1) + $75 ($300x1/4) = $425/week or $22,100/year. Of this about $2,883 would be standard 15% tipping ($22,100 - $22,100/1.15)). To "donate" an extra $10,000 through excess tipping through the year, I would be making an implied 52% excess tip ($10,000/$19,217 [the amount spent before standard tip]). Stated another way, the increase is about 45% above the old levels ($10,000/22,100-1).*

Breaking this down by meal type we have a $50 meal becoming about $73, a $100 becoming about $145, and a $300 becoming about $436. Weekly expenses here have gone up $192 ($425 becoming $617). And the annual checks out where $22,100 is now $32,100. 

These would just be averages. I would hold out the ability to vary the amount to zero excess tip to a lot more excess tip based on maybe quality of service or perceived need. Also, I would do this for at least all traditional for-tip service providers. The fact that this would demand a continually updated Excel spreadsheet lending itself to trend and projection analysis along with graphs is indeed a very nice quid pro quo for me.

Some of the pros to this approach are:

1. I have a lot of relevant information close at hand since I witnessed directly the service provided.
2. I know pretty well exactly who it is going to even if there is tip sharing.
3. Related to the two points above, I can weight the charitable gift commensurate with the perceived level of deservedness provided I measure that directly proportional to the service performed. If I want to base it on need, this becomes a con (see below).
4. I am rewarding those who are doing something to improve their own situation as well as my life and others.

The cons are:

1. I am not able to see much into the level of need so as to increase my giving as a result.
2. Related to the first con, I would not be benefiting those who cannot work--very likely a group in much more acute need. However, this is a con of almost all charity as figuring this out is very difficult. My method here at least minimizes the problem of enablement--whereby charitable giving subsidizes and insulates people from the cost of bad decisions and rewards poor work ethic. Moreover, it is actually likely many of the people I would be excess tipping would be closer to people in need so as to aid them. No guarantee they will, but there is no guarantee some other method would be much better.
3. I would most likely be subject to bias in my excess tipping whether it be a subconscious prejudice (e.g., tipping attractive waitstaff or those who somehow connect to me in a way that is probably frivolous like having an interesting accent) or outright mistaken heuristics (e.g., thinking that someone working at an expensive restaurant is less deserving that someone working at a cheap diner).
4. If I am not meticulous about tracking the excess tip, I easily could fall so far behind so as to not meet the donation goal--I would be hesitant to tip someone $2,000 at an end-of-year meal. 
5. I might reduce my exposure to tipping even if inadvertently as the pain of seeing the substantially increased cost could weigh on my decision making. 
6. It might greatly disrupt my social group or the dynamic between me and the places I frequent. This is a big break with norms subject to misunderstanding and bad/unintended signaling. 
7. I may be underappreciating how it will affect me given that this attempt at more direct action on my part will not likely have noticeable results. I might become jaded for bad reasons.
8. I could have a net negative effect on the recipients subsidizing less optimal outcomes for them or hampering their natural progression to bigger and better things. The out of work actor working as a waiter might be cliché, but there is something to it. What if I unintentionally convince a young person to turn down an internship for mistaken hope that there are enough tippers like me out there making waiting tables their highest and best outcome? Did I say enough about how charity is hard?

Countering this longer list of cons, there are added benefits potentially. One is that this might become habit forming long term--when I return to charitable giving, I might continue excess tipping to some degree. Another is that it could be contagious as it would be as public as any giving I typically would engage in. One virtue of it is that it is a more generous act all things equal since I would not be getting a tax benefit. So rather than having other taxpayers subsidize my charitable choices, I would fully internalize them by going it alone.

If I end up doing this, I'll report back on how it worked in the wild.

*Notice I am ignoring the fact that this tipping is calculated on top of the sales tax--I gave up the ghost on that argument long ago for practicality sake. I don't like it, but the norm seems to be and the easier calculation certainly is to tip on the total after tax.

Mistakes versus Traps - Dimension Analysis

Many of us have at one time or another drank too much in a given evening. This was certainly a mistake at least as judged by how the body and brain spent many hours the next morning screaming about it. Over drinking is an easy mistake to make especially when you are having a great time in unusual circumstances. One too many sneaks up on you. 

This type of mistake can have very serious including deadly consequences of course. It is all the worse since it compounds on itself through the natural impairment to judgement and accentuation of confidence. Fortunately in most cases this will only result in a painful hangover. 

Contrast this one-night stand of bad decision-making with alcoholism. A serial drinking problem is not so much a mistake as it is a trap. From what I understand there are about six percent of adults who suffer with what is labeled an alcohol problem. Some of these are people who are making a series of mistakes, which is in itself a form of trap. For others, perhaps a majority, the trap is the effect alcohol itself has in capturing them. 

I don't want to get into the weeds on how much agency those with an alcohol problem have or what the expectations of them should be. It seems in either case, low or high agency/responsibility, there is a trap condition being met. They are in a whirlpool from which escape is proving difficult. This is the nature of a trap as I am conceiving it. 

A mistake is just like it sounds. We are confronted daily with chances to make mistakes of many kinds with many varying potential magnitudes. In almost all cases the chances are extremely low to low--otherwise the world would be chaos. And correspondingly the implications are small. Yet life has fat tails and the realm of mistakes is no exception. 

One way to make mistakes worse is by following them up with mistakes--especially in the commission of a mistake cover-up. All the more reason to remember not to talk to the police. In this way a mistake upon a mistake can create a trap. Of the many great fiction depictions of this phenomenon, The Wire is perhaps the best showing time and again a wide variety of characters falling into traps because of mistakes made.

It can be hard but is important to distinguish mistakes leading to trap conditions and trap conditions alone ensnarling people in their grasp. Again, The Wire has examples of both. A kid in an inner-city public government school is a kid deep within a trap-rich environment. That same kid can be on a good course set for likely escape but for the kid-being-a-kid moment with the wrong teacher landing him in his first-time detention, getting connected to kids already within the trap, finding himself labeled by the bureaucracy, pushed and pulled into the trap. 

For traps we need paths to escape. Yet we must keep in mind two important truths: (1) We cannot change those who would not change themselves and (2) We should balance the tradeoff between help and enablement. 

In the first truth we fight against the cynics but also must come to grips with how in vain our efforts will be without willingness on the part of the would-be beneficiary. "You can't help them; don't bother," is too easy and too callous an excuse we use to not care and not try. However, resources are scarce. We can cannot afford to give effort to lost causes.

In the second truth we fight against the trap of simply treating symptoms* and insulating the trapped from the cost of their decisions when we are trying to render actually helpful aid and a true way out. To take one example, UBI's biggest shortcoming isn't its ridiculous math. It is the risk that becomes a lifestyle enabler rather than an enabler of life improvement. The adage "don't cry over spilt milk" needs a corollary: "quit doing whatever you're doing that is spilling the milk". 

For mistakes the framework needs to be quite different. Here we need a high tolerance for mistakes (the U.S. bankruptcy code is a great example) as well as robustness against their magnitude. Arnold Kling's conceptual tradeoff of hard-to-break versus easy-to-fix seems quite important here. We should seek more of both as they are not always mutually exclusive. When they are in opposition, we need to realize and prevent increasing one if it comes at too high a cost decreasing the other. 

Don't avoid mistakes--they are the lifeblood of success and progress. Forgive others and yourself for mistakes while working to not needlessly repeat them. 

Don't be blind to traps--they are everywhere attempting to seduce us. When you're in one, admit it. Work hard to get out knowing that the solution is probably somewhat counterintuitive. 

*look for a future Bandages versus Inoculation DA

Crony Capitalism (Vacation Rental Edition)

My wife and daughter just returned from a delightful long weekend in Santa Fe, NM. The entire family will return soon to Saint Francis's fine city where, as Hermann Banks reminds us, strangers are kind and beauty is overflowing and the local government is captured by crony capitalists. In fairness to Banks he never has said as much about local government, but I would imagine he wouldn't dispute it. 

Case in point:

A friend of mine has a vacation home there that he purchased a few years ago for both personal use and as an investment. Part of the investment is renting it out as a short-term vacation rental.

About six months ago I booked his place for my family's trip this coming April. In October I received an urgent text message from the rental property service directing me to check my email. Doing so I saw a short message stating that my reservation was no longer available, they were searching for a substitute property, and would be back in touch soon. I somewhat shrugged it off as being a mistake since I knew the actual owner well. But before I had a chance to contact my friend I received another email regretfully informing me that my reservation was cancelled with no substitute.

I reached out to my friend still thinking this was just a clerical error in their system. While a clerical error had occurred, it had a deeper problem behind it. My friend was somewhat upset but a lot calmer about it than I would have been. In fact I was livid for him and ready to go to the barricades. Not because of my vacation plans being disrupted but because of why this was happening and the implications it had for him.

The short version is this: The property management company had failed to make sure that my friend was current in his short-term rental permit with the city of Santa Fe (and yes, this is enough to get me to the barricades--the fact that a city government makes property owners get permission to use their property . . . but wait, there's more). The failure here was pretty significant in that it had expired the prior December 31st. Shame on the management company for sure. 

Should be no problem, though. Just refile as this should be a formality at this point. My friend does so starting a few days before my cancellation email by calling the proper city office. Keep in mind that my friend lives in Tulsa, OK; so all of this is out of direct control for what it's worth. I'm not sure if being able to go down to city hall would have made things better for him. They probably wouldn't have been better for me if I were in his shoes due to the whole ready-to-storm-the-castle attitude I have in these matters. Nevertheless . . . the city official looks it up and says, "Uh-oh, I don't think we'll be able to do this." 

[I swear this is the short version] It seems there exists another, current, valid in-the-eyes-of-the-Duke-of-Santa-Fe short-term rental permit for a property located within 50 feet of my friend's. You see kids, in America Big Hotel has decided that short-term rentals are a threat to their business. They've convinced well-meaning homeowners that people renting out their property could be scary. Soooo, rather than compete they've helped create rules to stop the madness. 

But this no-longer-short story doesn't end with just a Bootleggers and Baptists tale of the hotel lobby working hard to stifle competition along with the help of residents who think they should be able to dictate what happens on other people’s property. We get some government failure and unintended consequences to boot. 

My friend was taken aback at the news he couldn't get a permit because one nearby already existed (a new rule) but was immediately relieved relaying to the official, "Who has a rental? I know all my neighbors, and none of them rent." Upon further inspection, the city official realized that there are two roads with the same name in Santa Fe. The other permit is for a property miles away from my friend's. He could get it after all. Just need to have the local inspector swing by the next day to validate it all. Phew, that was close . . . but wait, there's more . . . as you probably suspect knowing what came next for me. 

The inspector comes out to my friend's house. Presumably begins checking boxes. Sees that there is another property located within 50 feet holding a short-term rental permit by looking it up just like the prior city official did. So he promptly denies the permit and goes about his day. 

This triggers a very fast and unforgiving process in the several rental property agencies my friend uses for his listing. Because I'm sure so as to not fall afoul of city governments everywhere and their crony capitalist controllers, they act swiftly to cancel all of my friend's future rentals. Remember this is October right before a busy Thanksgiving and Christmas season and he depends on repeat business as well as referrals. Along with all of these would-be customers, it is now that I receive a cancellation via email. 

At this point my friend was already on top of getting this reversed--I would not say satisfactorily resolved. He cleared it up with the city and over a LONG weekend was square to lease his property. Then came damage control. Many apologetic messages later with many discounts offered and still a large number of permanent cancellations foregone, he had done all he could to salvage some of his 9+ months of bookings.

It is hard seeing the system work the way it is actually, ultimately intended. It is harder still being a victim of it.

Summer Rental

Ranking College Football Programs - Discounted Win Percentage

[tl;dr - It is Ohio State, Alabama, and Oklahoma in the top 3 just about any way you cut it]

As the spring semester starts so too does the off season for college football. Inevitably this brings lots of prognostication for what is to come in the fall but also for a look back to assess the past--recent and long ago. With this are a million arguments about what are the greatest college football programs and who among the elite can claim Blue Blood status.

The website College Football News (CFN) says the best of them all is the Oklahoma Sooners. As much as I love that idea, I can see reasonable minds disagreeing. Undoubtedly any such lists will imply some hair-splitting considerations. What I really like about their approach is that it has a definitive methodology to it. It is not just some "experts" giving us their feel for the answers as if they could divine the truth free from bias. 

Of course all approaches will have bias. This would come in two varieties: assumption based and disposition based. One can create a formal algorithm (that is what I have done below) or one can derive a list from an informal algorithm weighing factors mysteriously within one's mind. While any method can be logically sound, generally speaking the less formal the process is, the more subject to bad reasoning or bad facts it will be. Assumption-based bias would be something like assigning too much weight to a certain factor. Disposition-based bias would be something like favoring a team for a reason not meaningful to the ranking itself.

Many attempts at this barstool debate are prone to bad math such as overcounting a metric since there will naturally be high correlation between commonly used measures (e.g., national championships and winning percentage). To prevent this, simpler is better if a simple approach can yield the desired effect. 

Back to CFN's approach, they use a very common and logical method, the inverse of the final AP Top 25 Poll each year to score teams. A first-place team would receive 25 points all the way through #25 receiving 1 point. Summing all the points by team creates the list in order. I do not disagree with their top 3 teams (OU, Alabama, and Ohio State), but the list can be criticized for its obvious shortcomings. For example, leaving out teams' scores when they finish just outside of the top 25 creates artificial distortion making it look like there is more separation within the list than actually exists. Of course there is no easy way to fix this. Additionally the AP poll is not itself without bias as some teams, especially those not typically perceived as being elite, may be systematically underrated. All of this makes this list, like so many others, subject to folly as one works down the list. Technically speaking our confidence in the outcome diminishes by an increasing degree from the top working down.

The CFN ranking is the "greatest programs of all time". As interesting as that is, it isn't necessarily what we commonly are thinking about when we seek to rank programs. Specifically, when we talk about the so-called "Blue Bloods", we are thinking of the best programs with emphasis to one degree or another on where they stand today. This opens up one additional criticism that this list and basically all lists like it suffer from: reverse-recency bias. Maybe we would term it "old-timer bias". This is the fact that these lists give equal weight to success in the distant past as they give to recent outcomes. And this is true whether they are derived from algorithms (assumption based) or expert opinion (disposition based). Of course many expert opinions can have the traditional recency bias problem (favoring the recent over the past), but often it is the traditional teams that get more love than they might deserve--I'm looking right at you Texas A&M and Michigan.

To get around this problem, I have created the model below. Borrowing from the foundational concepts of asset valuation where future cash flows are discounted back to present day (a dollar of earnings in ten years is worth less than a dollar today), I have created a model that gives more weight to recent performance than the same performance achieved in the past. 

Model

I believe the most straight-forward way to evaluate teams is the win-loss record. The only enhancement to this might be to include margin of victory*--a technique I have used and will update soon in an additional post. 

My model looks at each team's winning percentage by year and then discounts it by a factor for each year back it falls. So a win% in a given year would be worth less and less in the past the longer and longer ago it happened. Notice that I am using winning percentage so that basically there is no impact from the fact that teams play and have played a different number of games within a year and throughout the years--typically more games recently. 

I also have included a starting-year cutoff to stop counting results that are past a certain date, which is a changeable variable in the model (see below for the link). Even though a discount factor makes the past less and less valuable in assessing a total score, it might be that football changed so fundamentally we don't want any results before a certain date and the discount factor necessary to otherwise achieve this would be too big--it would make results fade away from importance too quickly.

For me the discount factor I settled on was 4% with a cutoff date of 1946. My reasoning was at a 4% discount rate a 100% win percentage season 18 years ago would be worth only about 50% today--the factor cuts it in half. 18 years is the typical age of an incoming college freshman football player--so there is some relevance, maybe, to the people playing the game.

My starting-year cutoff is 1946, which has historically been marked as a beginning point of college football. However, as I've said before, I am not sure how valid that is. One-platoon football was the rule in most of the 1950s and into the 1960s. Furthermore, racial integration into college football did not meaningfully arrive until the 1970s. 

These choices of discount factor and starting-year cutoff are both very arbitrary, but you see there is some logic to them. Importantly, the results do not seem to be sensitive to reasonable changes in either the discount rate or the starting-year cutoff date--the top three remain the same no matter what reasonable parameters are used.

One additional limitation this model has is that I did not look at all college football teams in creating it. Yet this is not the problem it may seem to be at least at the top end of the list (yes, this is of the same type of criticism I made of the CFN list above). Because I had to calculate from raw data the annual winning percentages of each team in the database, I limited it to the top 30 teams in winning percentage over the past 50 years (1972-2021). So, to be sure there are teams that with certain discount factors used (high ones) would find themselves otherwise in the list but are excluded. But this is quite limited to the very bottom of the list. Sorry Oklahoma State, your recent success would not get you very high in this ranking even if you had been good enough to make the list (OkState is 31st in win% over the 1972-2021 timespan for teams that were in D I-A (now FBS) football the entire time). Which brings up another team excluded, Boise State. They have had phenomenal winning teams since joining top-level college football in 1996. I made the decision to disallow them because of this limited time in the sample (the strength of their historic schedule might be another reason). 

Some Results

Using a discount factor of 4% and a starting year of 1946:

Using a discount factor of 4% and a starting year of 1972 (last 50 years):

Using a discount factor of 4% and no starting-year cutoff (all years included):

Using a discount factor of 0% and no starting-year cutoff (all years included):

Check out the model for yourself including changing the parameters as you see fit. Here are some of the results given a few parameter choices.

https://drive.google.com/file/d/1M-3q6zWtTAyCFDHEuU5z3eA6jIwRplxq/view?usp=sharing 

*MoV isn't completely stable over time, a potential criticism of that model, but since it has tended to increase in the past 50 years, I believe there is some natural recency premium built into that model. Regardless, it would be interesting to add into it a discounting factor, which I will do before publishing the updated results.

Biden - One Year In

About a year ago I posted on the Biden administration looking at what I saw as the reasons to be optimistic and pessimistic. Let's check in on those predictions and see otherwise how Trump's second term is proceeding.

I considered four areas for potential optimism: Trade, Immigration, Drug Policy, and Presidential Prestige. For these I felt like there was both a relative and absolute way to evaluate them--relative to Trump and absolute as in a general case.

Trade - I was quite hopeful on this front from a relative position believing that Biden would embrace a change from Trump. Well . . . no. Peruse the Cato Institute trade team's 2022 wish list to see how many times they identify a problem that is a continuation of Trump's policies. Trade suffered by being a non-meaningful issue beyond anti-Trump symbolism.

Prediction grade = FAIL

Immigration - I was quite hopeful that here Biden would be absolutely good. Instead he has literally continued Trump-era policies that he and his base strongly criticized during Trump's term while during this first year largely ignoring the issue otherwise. His modest improvements are vastly overshadowed by failures which shows cowardly indifference to people in dire need.

Prediction grade = FAIL

Drug Policy - I had slight optimism of an absolute variety. Alas, we elected an architect of the drug war with an uncaring bad cop as VP and expected change. Shame on us.

Prediction grade = FAIL

Presidential Prestige - This prediction was all relative, which made it a quite low bar. But hurdles aren't Uncle Joe's strong suit. As elucidated by Jonah Goldberg, Biden has very much not taken the high road. And his lying is about as common and as obvious as was Trump's. Gene Healy's recent presentation on Partisanship, Polarization, and Political Hatred was a good summary of how Biden's presidency started (was promised) and how it's going.

Prediction grade = FAIL 

Zero for four so far; let's turn to pessimism.

Here I was only considering each area on an absolute scale, and it was here I had the most confidence.

Judicial Appointments - My hope was for impartial, well-reasoning judges who apply the law and not politics. Without any high-profile appointments or me having enough inside baseball knowledge of federal court appointees, it is too soon to tell here.

Prediction grade = INCONCLUSIVE

Regulation - I expected Biden to reverse the gains made in the regulatory administrative state under Trump. In many small ways this has been true just as it was many small advances Trump accomplished, but it is in pandemic policy where my prediction really shines. Biden committed what I believe is a clear impeachable (and removable) act by extending the CDC's eviction moratorium despite knowing and admitting that the Supreme Court found it/would find it unconstitutional. He then in hateful fashion (see presidential prestige above) instituted a vaccine mandate for all private employers under OSHA's supposed authority.

Prediction grade = PASS

Taxes - Despite repeated attempts at worsening our tax code like a huge giveaway to the wealthy, the Democrat's inability to control their own crazies lead all of Biden's policy goals to failure. Even though the administration did not get its desired tax policy accomplished, I still believe my pessimism was confirmed regarding what tax policy would look like if they had their druthers.

Prediction grade = PASS

War - This one will get messy as war always does. I am still astonished and happy that Biden followed through on Trump's initial actions to end our involvement in Afghanistan. It wasn't pretty and Biden deserves criticism for those details. But it was a very good and difficult decision he made. Much remains to be seen regarding Russia/Ukraine and China/Taiwan among other areas. The latest looks a lot like his pullout in Afghanistan--the right move executed very sloppily.

Prediction grade = FAIL (thankfully)

Woke Politics and Policies - From "othering" those who disagree with the narrative to sic'ing the FBI on parents who dare to exercise free speech in regards to their children's education, my fears were realized.

Prediction grade = PASS

Spending - As I put it to a friend recently who said that I criticized Trump for being a big spender, Biden clearly had a "hold-my-beer" moment in his first year. We are now officially playing chicken with the gods of inflation. Let's see how this goes for President Ford take two.

Prediction grade = PASS

Presidential Power & Authority - When the NYTimes is telling a Democratic president to ease up on the executive orders, you know it is out of control. The ratchet turns another big notch yet again.

Prediction grade = PASS

Overall my predictions were 5-5-1. In the sense of what I would wish had happened I was a dreadful 1-10-1.

P.S. In that prior post I also stated some predictions about COVID-19 that have proven wrong. Some were wrong in my hope for saner policy responses. Others were wrong in terms of missing the negative magnitude of a potential variant (the Delta variant as it turns out) as well as my implicit hope that vaccine uptake would be greater than it was. The latter part contributing to why the former part was a bad prediction. Unfortunately I was dead-on correct about government failure regarding the FDA, et al.