Business

Update: California High-Speed Rail Nearly Dead

Virginia Postrel has a good article on Bloomberg discussing the latest snags in the HSR project, the boondoggle being kept on life-support to shield the careers of politicians who have kept it going long after the original promises to voters were broken. I ended the previous post on the project with this:

A high-speed rail line through dense urban areas and mountains was always going to be a difficult project. But pie-in-the-sky projects pay off when you can direct money to your political supporters preparing for it, get back some of that as campaign contributions, and retire from public life before the public realizes they got nothing for their tax dollars. As in all these Bootleggers and Baptists stories, the “bootleggers” — politicians, unions, and contractors — pushed the project through fully aware the proposal was a fantasy and sold the dream to idealistic voters. Having foolishly voted for the bonds, the voters will never be allowed another vote to stop the project.

I don’t remember my own vote on the bond initiative — I may well have said yes since like other voters, I believed the promises made in the initiative would be kept, or if not, that the funding would be blocked. But courts have allowed the project to proceed and bond money to be spent despite ample evidence that those promises have not and cannot be met.

When I mentioned this on Facebook, I got this response back from friend David Gerrold, who is a good representative of those dreamers (the Baptists) who want something good and ignore until the bitter end the evidence that it can’t happen. I sympathize with the idealism, but also see the damage done when fantasy is more politically important than reality. Here’s his reaction:

This is the dream we were sold. None of those promises can be kept, especially the climate change benefits — since the fate of the project is now certain, further expenditure of $billions will leave behind nothing but partly-constructed tracks for a route that won’t be used enough to save even the carbon emissions used in materials to build it, so it’s even going to be a big net loss on the global warming front.

Developments since my last post make this even clearer. The Obama administration gave the project a temporary exemption from the rule requiring the state put up its own matching funds before the Federal money would be released. This exemption is the only reason project work can continue, with the state essentially borrowing its own contribution from the Federal government until its own funds are available.

The funds the state expected to have from emissions control credit auctions have gone missing. The latest auction was a failure, providing only $2.5 million for the train project vs the $150 million expected. The original promise of private matching investment has not happened and no private company is interested. The emissions money amounts to a tax on California industry and citizens and is not structured to be a reliable stream of funding. The entire funding scheme teeters on the brink as legislators eye the lists of much more critical infrastructure projects that would have to be cut to fund the train. While Governor Jerry Brown continues to support it, others are edging toward the door, eying each other as the realization sinks in that the merde is about to hit the rotational airfoil. No one wants to be first on the governor’s team to declare the truth, and so the zombie project appears to live. Here’s the original proposed route:

California HSR Original Route – Wikipedia

The original promise of high-speed service from downtown SF to downtown LA (and San Diego) was scrapped years ago, with the current $65 billion project estimate for the originally-proposed first phase from SF to LA unfunded and likely to remain unfunded. The desperate goal of project proponents now is to build something to entrench the project. The LA Times story on the rationalizations for building the least-useful part first:

The shift to the Bay Area [building the segment from San Jose to Bakersfield first] will help the California High-Speed Rail Authority hold down costs and expedite construction of the system, which is already two years behind schedule, according to details of the new plan released Thursday.

The change would also avoid expensive tunneling and viaduct construction through the geologically complex Tehachapi and San Gabriel Mountains, where several potential routes have been proposed through the Angeles National Forest. Those options have generated political opposition in communities that border the forest.

The high-speed rail authority said shifting to the Bay Area will allow it to have the initial segment operating by 2025, earlier than planned, which will make the project attractive to private investors that would help fill holes in funding.

California HSR Downsized Route – LA Times photo

The HSR Authority has failed to get rights-of-way through the urban areas needed to reach the stations in SF and LA, and the state’s laws giving local NIMBYs power to stall or block any major project with lawsuits funded by wealthy residents of towns like Atherton along the way means those routes will never be available as initially envisioned. Having compromised away all the speed benefits, the high-speed rail project is now a medium-speed rail project, offering little time advantage as its trains will proceed slowly through urbanized areas and stop at every intermediate city. And the low density of California cities, especially LA, means it will be more practical for most people not living near downtown stations to drive directly to their diverse destinations — trips from one downtown to another downtown are only a small fraction of the total demand for instate travel. Improvements to bus services in all metropolitan areas, and smaller, cheaper projects serving the real needs of middle and lower-income workers and families, are being neglected so this shiny dream choo-choo can keep going.

It’s clear the original project proposal was designed to offer some service to most towns in California, whether that was feasible or not, and it was on that basis that it got enough support to get the bond issue through the legislature and the voters. Every single one of the promises — routing, trip times, costs, self-supporting operation, private investment matching — has been broken since, yet the inertia of the project keeps the consulting companies, lawyers, and union workers spending borrowed money to build the train to nowhere.

The Great Slackening is caused by the bureaucratization of everything and the lack of accountability for failure. California’s government is no longer capable of building major infrastructure projects in a timely or efficient manner, and the state will exhaust its funds trying before recognizing that the system must be reformed.

Death by HR: How Affirmative Action Cripples Organizations

[From Death by HR: How Affirmative Action Cripples Organizations, available now in Kindle and trade paperback.]

The first review is in: by Elmer T. Jones, author of The Employment Game. Here’s the condensed version; view the entire review here.

Corporate HR Scrambles to Halt Publication of “Death by HR”

Nobody gets a job through HR. The purpose of HR is to protect their parent organization against lawsuits for running afoul of the government’s diversity extortion bureaus. HR kills companies by blanketing industry with onerous gender and race labor compliance rules and forcing companies to hire useless HR staff to process the associated paperwork… a tour de force… carefully explains to CEOs how HR poisons their companies and what steps they may take to marginalize this threat… It is time to turn the tide against this madness, and Death by HR is an important research tool… All CEOs should read this book. If you are a mere worker drone but care about your company, you should forward an anonymous copy to him.

More reading on other topics:

Regulation Strangling Innovation: Planes, Trains, and Hyperloop
Who Killed Prince? Restrictions on Buprenorphine
The Great Progressive Stagnation vs. Dynamism
Captain America and Progressive Infantilization
FDA Wants More Lung Cancer
Corrupt Feedback Loops: Public Employee Unions
Jane Jacobs’ Monstrous Hybrids: Guardians vs Commerce
Death by HR: How Affirmative Action is Crippling America
Death by HR: The End of Merit in Civil Service
Death by HR: History and Practice of Affirmative Action and the EEOC
Civil Service: Woodrow Wilson’s Progressive Dream
Bootleggers and Baptists
Corrupt Feedback Loops: Justice Dept. Extortion
Corrupt Feedback Loops, Goldman Sachs: More Justice Dept. Extortion
Death by HR: The Birth and Evolution of the HR Department
Death by HR: The Simple Model of Project Labor
Levellers and Redistributionists: The Feudal Underpinnings of Socialism
Sons of Liberty vs. National Front
Trump World: Looking Backward
Minimum Wage: The Parable of the Ladder
Selective Outrage
Culture Wars: Co-Existence Through Limited Government
Social Justice Warriors, Jihadists, and Neo-Nazis: Constructed Identities
Tuitions Inflated, Product Degraded, Student Debts Unsustainable
The Morality of Glamour

On Affirmative Action and Social Policy:

Affirmative Action: Chinese, Indian-Origin Citizens in Malaysia Oppressed
Affirmative Action: Caste Reservation in India
Diversity Hires: Pressure on High Tech<a
Title IX Totalitarianism is Gender-Neutral
Public Schools in Poor Districts: For Control Not Education
Real-Life “Hunger Games”: Soft Oppression Destroys the Poor
The Social Decay of Black Neighborhoods (And Yours!)
Child Welfare Ideas: Every Child Gets a Government Guardian!
“Income Inequality” Propaganda is Just Disguised Materialism

The greatest hits from SubstrateWars.com (Science Fiction topics):

Fear is the Mindkiller
Mirror Neurons and Irene Gallo
YA Dystopias vs Heinlein et al: Social Justice Warriors Strike Again
Selective Outrage
Sons of Liberty vs. National Front
“Tomorrowland”: Tragic Misfire
The Death of “Wired”: Hugo Awards Edition
Hugos, Sad Puppies 3, and Direct Knowledge
Selective Outrage and Angry Tribes
Men of Honor vs Victim Culture
SFF, Hugos, Curating the Best
“Why Aren’t There More Women Futurists?”
Science Fiction Fandom and SJW warfare

More reading on the military:

US Military: From No Standing Armies to Permanent Global Power
US Military: The Desegration Experience
The VA Scandals: Death by Bureaucracy

Free Trade, Specialization, and Economic Dynamism

Futuristic City – Coruscant

Why do large companies exist? Some industries like film production used to be vertically integrated — that is, most aspects of production were completed by direct employees of the studio, with even screenwriters and actors under long-term contract. This allowed the studio to put together productions rapidly and under direct control, shooting on their own lots and cranking out enough product to keep costs down and quality up. Vertical integration kept down the costs of negotiating with each supplier / worker and guaranteed availability of unique resources, like the services of major stars and expensive soundstages.

The Hollywood studio system has since been broken up, and many productions are completed by dozens of business entities handling separate parts of the project. Agents and producers package projects and a thriving ecosystem of specialized contractors do much of the work; at the end of every special-effects blockbuster film you’ll see dozens of firms credited.

Big companies stay vertically integrated when a new product or industry takes off and there is limited support from outside contractors, or when legal and regulatory burdens make it difficult to reliably contract out parts of the work. In countries where influence with the government is the only way to operate without harassment, large firms that have apparently unrelated businesses under one ownership — conglomerates — are the most successful form. In South Korea, these firms (called chaebol[2]) were seen as national champions and had the political pull necessary to survive in a corrupt, influence-peddling environment; improvements in transparency and the curbing of corrupt influence after the Asian debt crisis of 1997 resulted in reform of the chaebol system and broke up the ownership of large segments of the Korean economy, which has improved the country’s growth record and competitiveness.

Mature industries with highly-developed contract labor markets tend to outsource many more functions, which lowers the carrying costs for the industry as a whole — an in-house special effects division, for example, will either be over- or under-utilized much of the time, and it’s a natural evolution from seeking outside business for slack periods to being spun off as an independent concern when there are large numbers of independent special effects firms with different areas of expertise. As a contracting market develops, it then becomes practical for even a small team to start their own firm, further atomizing the market.

The classic pamphlet “I, Pencil”[3] explains the story of the simple graphite-leaded wood pencil’s production as a mute symphony of coordination and cooperation by suppliers and producers who have organized spontaneously under the free market system to produce a product not one of them fully understands. All of its component materials and the machines needed to manufacture the pencil come from different suppliers who have developed the constituents independently, specializing in, say, the paint for the exterior, or the rubber eraser. Time and many instances of contracts fulfilled lead to trust between suppliers, and competitive markets hone each supplier’s quality and price to hold down the cost of the completed product.

What happens when trade barriers go up? Say the best producer of rubber pencil erasers is in Malaysia, and a protectionist Congress slaps a high tariff on products from Malaysia….

The price landscape the US-based pencil manufacturer sees changes when Malaysian erasers leap in price because of the new tariffs, and a US-based supplier now appears to offer a better deal on erasers, so the manufacturer orders from them instead. Unfortunately the unfamiliar supplier has a lower quality product at a higher price, and the pencil manufacturer and the new eraser supplier spend days negotiating payments and terms. The resulting pencils have to be priced higher and consumers notice the erasers don’t work very well, and begin to consider other brands of pencil instead….

Relatively free trade allows multinational networks of the best and most-efficient suppliers to capture the benefits of specialization globally. The world’s auto industry, for example, benefitted greatly in the end by combining innovations from Japan, Germany, and the US, and modern autos manufactured anywhere today source parts from multiple countries — which becomes most noticeable when, for example, the dangerous failure of airbag components made in Mexico by major supplier Takata of Japan spreads to include recalls of upwards of fifty million cars from at least twelve different car companies[4]. Atypical disasters aside, the availability of low-cost and reliable components from overseas has brought US-manufactured cars up to increasingly-high global standards and allowed US final assembly plants to remain competitive despite their higher labor costs.

When trade barriers are lowered, there is often short-term pain for less-competitive, formerly-protected industries, as there was for the US auto giants in making the transition to a global market. But high trade barriers and closed markets mean higher prices and a lack of competition to keep the domestic industry honest — and if the protected products are a large component of national consumption and a capital good necessary for other industries as well, like autos and trucks, the entire economy of the protectionist country will grow more slowly and become less competitive in international trade. A return to high trade barriers for the US, like the Smoot-Hawley Tariff Act of 1930,[5] would lower the quality and raise the prices of many US-made goods, making them less competitive in global trade even if no other countries retaliated by raising their tariffs. Just because there are still countries with high tariff and other barriers doesn’t mean the US, as one of the greatest beneficiaries of the global free trade system, should also shoot itself in the foot. In the 1930s countries stumbled into a worsening Depression by such short-sighted actions which harmed everyone, and contributed to the strains resulting in WWII.

Similarly, it is damaging when any government acts to limit or over-regulate trade between its citizens and its companies. The US Constitution addressed the issue of trade barriers between the various States by giving the power to regulate “interstate commerce” to the Federal government, intending to prevent the kind of tariffs and barriers that Britain had used to benefit their own industries at Colonial expense from springing up between the States.

Today France is in the throes of strikes and disorder as its Socialist government tries to reform its labor regulations to allow for a freer market in labor.[6] Current regulations there make it so difficult to fire or lay off employees that companies do everything they can to avoid hiring regular full-time employees, and most young people are forced into the undermarket of contract and temporary labor to gain employment. Youth unemployment rates over 20% in many parts of Europe are crippling their career development, in large part due to overregulation. Entire economies grow more slowly when special-interest regulation favors the few insiders who already have secure positions over the young outsiders.

Trade liberalization and the global spread of freer markets produced the greatest improvement in global living standards the world has ever seen, the Great Enrichment, with higher living standards than ever dreamed of for middle classes in the developed world, and billions of people lifted out of poverty outside it.[7] The increasing prosperity and health of these populations defused the population bomb that was supposed to have produced famine and war by the late 1970s.[8] Technological innovation and capitalist investment fed more people and found more resources and energy at lower prices. Growing wealth created a demand for clean air and water, and a supply of new emissions and cleanup technologies that have improved the local environment of every country that has completed the transition to both democratic governance and capitalism. The countries that tried to maintain their centrally-planned economies were outcompeted, and every one has either given up central planning or collapsed into poverty.

But the temptation to control an organic free-market economy to benefit special interests is always waiting, and those special interests (whether private industries or public employee unions) are good at funding campaigns and lobbying legislators to have laws written in their favor. US courts have been all too willing — since the Supreme Court’s 1937 “Switch in time that saved nine,” which bowed to to FDR’s desires[9] — to allow Congress and state legislatures to regulate private contracts and trade by presuming that any regulation which had a ”rational basis” was constitutional. This great expansion of opportunities for graft resulted in the growth of an overbearing administrative state, a permanent shadow government of tenured bureaucrats and administrators who are so protected by Civil Service and public employee unions that there is no accountability and only limited desire to serve the public who pay all the bills. Meanwhile, the economy grows more and more slowly as some industries like banks are bailed out and protected while others are harassed by regulators. Small businesses and community banks are crippled by costly regulatory requirements and labor rules like the ACA, while costs rise in every sector heavily regulated by governments — those sectors (healthcare, education, banking…) lobby for special loans and subsidies. Young people are told they must go to college, taught that government and nonprofit services are the most moral career choices, then saddled with student loan debt and a slack labor market when they graduate — if they graduate.

Let’s imagine for a moment that a Freedom of Contract Amendment exists — a freedom implied by common law and precedent until 1937, but smothered by Progressives eager to mold the people toward a scientifically-managed, centrally-planned future — which as we have seen does not work. People would be free to sell their labor under any terms they wish. Other than Civil Rights Act protections against discrimination, employers would be free to seek out the best employees for their teams and organize them and pay them however they wish. The impossibly complex jumble of fringe benefits and 401Ks and stock plans and options created by complicated tax incentives goes away when the tax system is simplified. It’s a dream, right? Freedom to achieve without being “helped” by a politician with his or her hand out for a contribution, or sued by a lawyer wanting to retroactively apply antiquated 1930s labor regulations designed for factories to your white-collar employees…

The future doesn’t come with thousands of pages of laws and regulations dating back to the last century and designed to hold a tottering status quo in place. It comes out of individual striving and new technologies, and an American people free to mold themselves as they wish. The access to all of the world’s knowledge we now have via the internet means education can be flexible and nearly free for those who are motivated, and trapping our children in failed urban schools or mediocre and left-wing public universities wastes their time and our tax money.

[Note that the current mechanism for negotiating and implementing “free trade agreements” looks very much like the dysfunctional process now used to write new laws — opaque, lengthy, written by committees and tailored to special interests. That’s certainly not a good thing, and opens the process to corrupt bargaining. I’m defending the general principle of free trade here, and often these deals are mixed, a net positive for the US economy while containing many objectionable parts.]

—

[1] https://en.wikipedia.org/wiki/Vertical_integration
[2] “The Changing Role of Chaebol,” Charlotte Marguerite Powers, Stanford Journal of East Asian Affairs, Summer 2010, https://web.stanford.edu/group/sjeaa/journal102/10-2_09%20Korea-Powers.pdf
[3] “I, Pencil: My Family Tree as Told to Leonard E. Reed,” courtesy of the Ralph Smeed Private Foundation, 1958. https://fee.org/media/14940/read-i-pencil.pdf
[4] “U.S. Department of Transportation expands and accelerates Takata air bag inflator recall to protect American drivers and passengers,” US NHTSA 13-16, May 4, 2016, http://www.nhtsa.gov/About+NHTSA/Press+Releases/nhtsa-expands-accelerates-takata-inflator-recall-05042016
[5] https://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Act
[6] “France labour dispute: Wave of strike action nationwide,” BBC, 26 May 2016 http://www.bbc.com/news/world-europe-36385778
[7] “How the West (and the Rest) Got Rich — The Great Enrichment of the past two centuries has one primary source: the liberation of ordinary people to pursue their dreams of economic betterment,” Deirdre N. McCloskey, Wall Street Journal, May 20, 2016, http://www.wsj.com/articles/why-the-west-and-the-rest-got-rich-1463754427
[8] “The Unrealized Horrors of Population Explosion,” Clyde Habermann, New York Times, May 31, 2015, http://www.nytimes.com/2015/06/01/us/the-unrealized-horrors-of-population-explosion.html
[9] “‘The switch in time that saved nine’ is the name given to what was perceived as the sudden jurisprudential shift by Associate Justice Owen Roberts of the U.S. Supreme Court in the 1937 case West Coast Hotel Co. v. Parrish. Conventional historical accounts portrayed the Court’s majority opinion as a strategic political move to protect the Court’s integrity and independence from President Franklin Roosevelt’s court-reform bill (also known as the “court-packing plan”), which would have expanded the size of the bench up to 15 justices, though it has been argued that these accounts have misconstrued the historical record.” https://en.wikipedia.org/wiki/The_switch_in_time_that_saved_nine

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Death by HR: How Affirmative Action Cripples Organizations

[From Death by HR: How Affirmative Action Cripples Organizations, available now in Kindle and trade paperback.]

The first review is in: by Elmer T. Jones, author of The Employment Game. Here’s the condensed version; view the entire review here.

Corporate HR Scrambles to Halt Publication of “Death by HR”

Nobody gets a job through HR. The purpose of HR is to protect their parent organization against lawsuits for running afoul of the government’s diversity extortion bureaus. HR kills companies by blanketing industry with onerous gender and race labor compliance rules and forcing companies to hire useless HR staff to process the associated paperwork… a tour de force… carefully explains to CEOs how HR poisons their companies and what steps they may take to marginalize this threat… It is time to turn the tide against this madness, and Death by HR is an important research tool… All CEOs should read this book. If you are a mere worker drone but care about your company, you should forward an anonymous copy to him.

More reading on other topics:

Regulation Strangling Innovation: Planes, Trains, and Hyperloop
Captain America and Progressive Infantilization
FDA Wants More Lung Cancer
Jane Jacobs’ Monstrous Hybrids: Guardians vs Commerce
The Great Progressive Stagnation vs. Dynamism
Death by HR: How Affirmative Action is Crippling America
Death by HR: The End of Merit in Civil Service
Corrupt Feedback Loops: Public Employee Unions
Death by HR: History and Practice of Affirmative Action and the EEOC
Civil Service: Woodrow Wilson’s Progressive Dream
Bootleggers and Baptists
Corrupt Feedback Loops: Justice Dept. Extortion
Corrupt Feedback Loops, Goldman Sachs: More Justice Dept. Extortion
Death by HR: The Birth and Evolution of the HR Department
Death by HR: The Simple Model of Project Labor
Levellers and Redistributionists: The Feudal Underpinnings of Socialism
Sons of Liberty vs. National Front
Trump World: Looking Backward
Minimum Wage: The Parable of the Ladder
Selective Outrage
Culture Wars: Co-Existence Through Limited Government
Social Justice Warriors, Jihadists, and Neo-Nazis: Constructed Identities
Tuitions Inflated, Product Degraded, Student Debts Unsustainable
The Morality of Glamour

On Affirmative Action and Social Policy:

The greatest hits from SubstrateWars.com (Science Fiction topics):

More reading on the military:

US Military: From No Standing Armies to Permanent Global Power
US Military: The Desegration Experience
The VA Scandals: Death by Bureaucracy

This is Not My Beautiful House

When I went to work at BBN Labs (a DARPA research shop, like a B-grade Xerox PARC or Bell Labs) in 1984 as a freshly-minted MIT graduate, my office was small and barren, with a desk, a VT-100 terminal, and a classic Mac. But it was still the age of the private office, and I’m thankful I never had to deal with the cubicle, or worse, the bullpen of today — I would never have been able to program with the noise and distractions.

The engineer next door had a leather couch and an oriental rug, and art and geeky knick-knacks on shelves all around. Sometime during the first week, the headhunter / HR contractor who had recruited me stopped by. “Don’t get too comfortable. I mean, don’t spend a lot of time decorating.”

I didn’t know quite what he was getting at — interpreting it as philosophical advice, or perhaps practical because he had just seen the overdecorated office next door. Everything changes and ends, so best be prepared to move on as soon as you think you’ve arrived at your destination? Always have your bug-out bag packed and ready? But later I realized he meant he knew the Labs were splitting, with the part I was working for to be spun off to commercialize the BBN Butterfly multiprocessor. And in a few months we were in a new building next door, so decorating my office would have been a waste of time.

And so it is with houses. We find ourselves looking for a summer place to escape the heat of Palm Springs — it was 110 today, starting the season of excessive heat. My gym saves money by keeping the thermostats at 80, and I’m sick of fighting over fans and struggling to breathe. PS is great two thirds of the year, but that last third is deadly. We’ve been scanning the houses near the coast, from San Diego up to Irvine. But this has me thinking of what the headhunter told me — and why I’ve spent so much time moving and fixing up places, hoping this time it would be Just Right….

College Avenue House

By the time I started work at BBN I had been a landlord for five years, looking after a turn-of-the-century mansion that had been split up into four units during the Depression. It was my first venture into real estate investment — a grand three-story house on College Avenue between Tufts University and Davis Square, Somerville. I knew the Red Line subway extension would be coming to Davis Square, and at $70K the building was a good bet. I imagined doing all sorts of renovation, but while we lived in the ground floor apartment and I did do a lot of small upgrades for energy conservation and the like, I was too young and distracted to do anything major like finish the enormous attic into another glorious apartment as I had intended. And knowing what I know now, I realize I would have been stymied by the NIMBYs nearby anyway….

We had friends gutting and renovating houses in (crime-ridden, cheap) San Francisco (which is no longer cheap.) One time we were staying at their house while they had stripped their own bathroom down to the studs — which meant using a fully-exposed toilet. “Pretend there’s still a wall there.” The things we did when we were young and hungry…

I was getting into microcomputers and compilers and AI, which is how I ended up at BBN doing multiprocessor LISP for the SCI (Strategic Computing Initiative), which was supposed to be a government-funded response to the Japanese AI scare. Neither country cracked the problem, then both pulled the funding plug when no practical results happened — lots of money and effort went down the drain. This drying up of interest and collapse in AI research starting around 1986 is now called The AI Winter… which also crashed my next employer, Symbolics, when the beancounters decided to direct all researchers to buy Sun machines with Lisp compilers instead.

So because I had an absorbing job, I lost interest in the house projects, and it seemed like a good idea to free myself to move around by selling it. We got $350K for it; since we had borrowed all but $14K downpayment, that meant a profit of over $250K on a $15K investment, by the wonders of leverage and good luck. And the rents had largely paid for our own house expenses along the way, as rent controls ended, interest rates dropped, the subway opened, and investment started to flow back into the neighborhood, which today is highly desirable — Zillow thinks the building is worth $1.4 million now, 20x what we paid in 1978. Those conditions are unlikely to ever be repeated.

I entered a PhD program in computer science at Northeastern studying things like denotational semantics with Mitch Wand. A year of that was enough, and I moved to Vancouver to get away from the various unpleasantnesses of that era — escaping to a tiny apartment in a highrise tower in the West End.

First Bowen house framing stage – 1992

I bought a big piece of land on Bowen Island and spent the next five years subdividing it, attacked by the Islands Trust and the antidevelopment faction on the island — which as it turned out, is retirement home to many Canadian bureaucrats. You really haven’t lived until people at a public meeting gang up to attack you as “an American developer.” The photo is of the first house being built in my subdivision, not by me — I never built my own house there, since I realized I wasn’t wanted.

Sunnyvale Eichler – 2007

I fought them to a draw and got out alive, though just barely. I ended up in California, where I picked up a new partner and bought an Eichler in Sunnyvale (photo above). That was my first real success at renovation — we updated the kitchen and baths, much of it “just enough” updating — for example, the 1969 bathrooms just needed new drop-in sinks and faucets to seem fresh, so I could do a lot of the work myself. We paid the dangerously-high sum of $600K for the house in 2000 and sold it for $1.2 million in 2007. Now Zillow claims it’s worth $1.7, showing how inflated values are in Silicon Valley….

View from Upper Market SF House

We eventually ended up in the city of San Francisco itself, renting the top floor unit of a new building on upper Market Street. The developer built the largest building he could legally, and what he thought would sell — two condos in a five-story building, with the garage and entries in the middle floor.

The builder/developer made a few mistakes. First mistake: badly judging the market, which collapsed as he was finishing the project in 2008. Second mistake: the steel-framed center of the building didn’t settle, but the back end did, leaving our living room with an inch-high bulge running across the floor. Third mistake: the slate-tiled roof deck, planned hot tub and the garden box, which he never finished installing (but did fill with dirt.) The roof deck leaked. And leaked. And leaked — he rebuilt parts of it several times, while areas inside the house were soaked and had to be replaced. While it would be grand to sit in one’s rooftop hot tub watching the city lights and sipping Chardonnay, the reality never quite justified the trouble.

Market St Kitchen – Green Marble Counters!

Meanwhile, the green marble countertops in the kitchen were probably chosen as a selling point — luxury! Green! Marble! But were horrible, since the slightest hint of acid — a lime, champagne, anything — etched the marble in ugly gray spots and rings. Despite our precautions, parts of it looked terrible in less than a year, and the owner had to bring in a refinisher to redo it and seal it again.

Nighttime View from Market St House

One last view from the Market Street place. The effect of the views eventually wore off, and we were left with the high rent, the leaks, the cold wind and fog that made the roof deck less than pleasant most of the time, and the steep walk up and down the hill to the gym.

Sevilla Great Hall – 2010

Finally, we bought a big place in far south canyon Palm Springs. It came decorated in a sort of post-modern Beetlejuice style, not quite our taste but well-done. At over 6,000 sq. ft. it was a lot more house than we needed, but we were thinking one of our parents (or both?) might end up living with us, and of course we wanted room for guests. Neither of those really happened, so half the house was generally closed off.

The place had three dishwashers, three refrigerators, four water heaters, and six AC units. I replaced most of the ceiling lights with LED units, and since the AC bills were in the hundreds (and could easily have been in the thousands!), I looked into two-stage evaporative cooling.

Craning in Evaporative Coolers

Here you see one of the evaporative coolers being craned to the roof, where it was installed near the existing HVAC unit to share ducting. The concept of evaporative cooling takes advantage of the cooling effect of evaporation; the desert air is usually very dry, and under the right conditions evaporation can drive a surface down to near freezing temperature (the dew point is the theoretical limit, and that is often very cold — as I write it is 94 degrees outside, but the dew point is 37 degrees F.)

Normal evaporative coolers just run outside air over wet materials to cool and add moisture before sending it into the house. A two-stage cooler uses that effect to cool water, then expels the first stage air outside. The cold water is then sent to the next stage to chill outside air which is further cooled by running it over moist materials, but since the air is already cooled it gets a bit cooler and does not pick up so much moisture. The result is cool, clean, slightly moist air, perfect for a home in the desert. Running both units, we were able to cool the parts of the house we used most down to comfortable levels using less than 20% of the power used for AC, since all that was needed was a few showers a day worth of water and two big fans.

Control Board

Unfortunately this super-advanced cooler was made by a pioneering company, and I soon had arrows in my back. No one knew how to install it, so I had to design the ducts myself. The computer control program would occasionally glitch, requiring a system reboot — cut the power and restart. When it was running, the air was much nicer than what you get from AC, but you had to understand how to open doors and windows just so to balance the system — air was being blown in cool and had to escape, so choice of open windows to distribute the coolth was an art.

It was no great strain for me to run it, but when our plans changed again and I was left alone in the house, it made no sense to keep the house for several more years. We put it up for sale. No one understood the coolers, since unlike solar panels virtually no one has ever seen one — the cheaper one-stage coolers, known as “swamp coolers” locally, have a reputation for being high-maintenance and the choice of people too poor to afford real AC. So that was no help at all in marketing the house, and I doubt the new owner ever used the instructions I left for him.

The Morrison, Phase 2 Construction – 2012

While waiting for that to sell, I put a deposit down on a unit to be built at The Morrison, a trendy modern development of detached houses on tiny lots, each with a small pool. One of the few developments that kept selling through the recession, and now a model for many copycat developments in Palm Springs. Above is a view of the construction site from our partly-furnished new house.

Finished Pool – 2013

So again we had to move and set up a new place — change all the lighting to LED, buy new furniture, decorate. It always seems to be me that has the time and opportunity, so I do it. And years pass, and other things I could be focusing on don’t get done….

“Don’t get too comfortable. Don’t spend a lot of effort decorating,” as my HR guy told me long ago. Unless that’s what you want to do — specialization allows most of us to concentrate on what we’re best at, while farming out other tasks to people who specialize in those. When taxes are very high, there’s a big cost to hiring someone else to do something — you paid taxes on your income, and the people you hire pay taxes on what you pay them, and so on — which is why most of us try to do a lot of the work ourselves to save money. If I pay someone $1,000 to paint, I have to earn $1500-2000 more to make up for that expense. So I do the painting. And I get distracted, and do a worse job, and nothing gets written.

You can waste a lot of your life buying and selling houses, decorating and moving. I admire people who can stay in one spot for fifty years, happy with what they have — that’s not really me. But in my old age I now understand that a big house is a white elephant that owns you as much as you own it, that good enough is best, that getting your surroundings Just So is not worth the time and effort. Less stuff in less space means more money and free time.

Follow the Money, Not Bathroom Laws or Nazi Captain America

Captain America: Hail Hydra! – Marvel Comics

We’ve had seven years of the Obama administration’s orchestrated distractions. The President gained the office promising a new era, supported by “Baptists” (in this case, idealistic Progressives and voters hopeful he would bridge party and racial gaps — see Bootleggers and Baptists) and “bootleggers” (crony capitalists and the finance industry, which placed their sympathizers in Treasury and Justice to make sure no true reprisals or reform would occur and that TARP and subsidy money would finance their ventures.) The complicit media help promote whatever story the administration is selling each week — independent reporting is expensive while rewritten PR releases from government press offices and video of staged news events fills TV news time and newspaper column inches cheaply.

The United States has a wide variety of special interests whose contention prevents a single coalition from taking over and doing too much damage. The effect over time, though, has been to expand government and its regulation of private businesses to increase the rewards of buying political favors. The Obama administration’s record of boondoggles and project failures is clear, but by dominating news coverage with their talking points, they have distracted citizens who haven’t directly suffered job loss, lost their home, or had their daughter murdered by a criminal immigrant released in a “sanctuary city.”

Gender Free Bathroom

The latest non-problem designed to distract is the “bathroom wars.” For decades, transgendered people have used the bathroom they were “dressed for” in relative safety and obscurity, since civilized people don’t expose their genitalia or accost others for looking unusual while relieving themselves. Good manners suggest intentionally not noticing superficial factors of others when forced into the intimacy of the bathroom or locker room, and most people have the good manners and good sense not to react to such things. Similarly, while not completely unheard of, it’s very rare (and illegal) for men to accost women in restrooms or locker rooms.

So there’s no information other than anecdotal suggesting trans people are being harassed in large numbers, or that women or girls are being harassed. And there’s certainly no legal authority under Title IX for Federal-level regulation of bathroom use. There’s really no reason for any regulation of bathroom use, given that such rules are not enforceable or even reasonable when there are many common situations where labels are ignored, as when women duck into the men’s room because the line at “their” bathroom is too long. This is a fine example of customary usage that ain’t broke, so don’t fix it — all fixes are more trouble than leaving it up to custom and common sense.

But much of the media attention not spent following Trump’s latest comments is going to bathroom laws and public posturing related to the issue, like the latest stars to boycott North Carolina while still planning concerts in countries where gays are beaten and jailed. The President and his minions get to appear to be protectors of the weak while their outraged opponents waste effort on an issue that distracts from removing them and their kind from power.

Meanwhile, much social network and news chatter in recent weeks centers around Captain America and the recent decision by the current Marvel comic book writers to rewrite him as an agent of Hydra all these years — a hero originated to stand for American values in opposition to the then-current Third Reich has been revealed to be a Nazi himself, or close enough. The outrage mills are keeping this one going, giving free publicity to the comic book writers and taking up residence in people’s heads.

In both cases, behind-the-scenes interests are jockeying for influence to continue to steal your money and divert it to their ends — their own power and wealth. By keeping the issues of subsidies and crony capitalism too complex for mass understanding and sending up clouds of disinformational chaff like these symbolic, emotional issues, much of the voting population has been bamboozled into fighting each other over symbolic issues while the bootleggers loot the Treasury.

And in that confusion, men like Donald Trump or Bernie Sanders who offer simple, authoritarian solutions to the problems of the status quo corporatist government appear to offer a way out. Neither had the support of the big money interests, but if either won the presidency you can be sure they will attract the same corrupt interests to support and control them.

So spend less time getting outraged about relatively unimportant issues, and more time following the money. Notice how anti-Trump protestors are organized and funded by unions like the SEIU and racist organizations like La Raza, while those same organizations are core Democratic supporters and have been funded illegally by diverting Justice Department settlement funds from the victims of mortgage companies to Democrat-supporting agencies.

Notice that the Clinton Foundation targets its grants to gain good PR or influence while collecting tax-free “donations” from shady and even criminal overseas governments and companies. It’s part of the Clintons’ global influence-peddling machine, built up over decades to allow legal bribery of the former President Bill and Secretary of State and now President-in-Waiting Hillary.

The book Clinton Cash by Peter Schweizer documents these indirect bribery schemes:

In 2000, Bill and Hillary Clinton owed millions of dollars in legal debt. Since then, they’ve earned over $130 million. Where did the money come from? Most people assume that the Clintons amassed their wealth through lucrative book deals and high-six-figure fees for speaking gigs. Now, Peter Schweizer shows who is really behind those enormous payments.

In his New York Times bestselling books Extortion and Throw Them All Out, Schweizer detailed patterns of official corruption in Washington that led to congressional resignations and new ethics laws. In Clinton Cash, he follows the Clinton money trail, revealing the connection between their personal fortune, their “close personal friends,” the Clinton Foundation, foreign nations, and some of the highest ranks of government.

Schweizer reveals the Clinton’s troubling dealings in Kazakhstan, Colombia, Haiti, and other places at the “wild west” fringe of the global economy. In this blockbuster exposé, Schweizer merely presents the troubling facts he’s uncovered. Meticulously researched and scrupulously sourced, filled with headline-making revelations, Clinton Cash raises serious questions of judgment, of possible indebtedness to an array of foreign interests, and ultimately, of fitness for high public office.

Some of their schemes — like the Haitian telecomm contracts they wangled for supporter’s companies that skimmed fees from every telephone call between Haitians and their US relatives — are infuriating in that they stole from people least able to afford padded bills. Haitians have correctly figured out that the Clintons only pretend to care about them.

Jonathan Katz, author of The Big Truck That Went By: How the World Came to Save Haiti and Left Behind a Disaster about Haitian relief efforts of the past two decades, had this to say about Clinton’s influence in Haiti:

There’s nowhere Clinton had more influence or respect when she became Secretary of State than in Haiti, and it was clear that she planned to use that to make Haiti the proving ground for her vision of American power. By now I’d imagine she was expecting to constantly be pointing to Haiti on the campaign trail as one of the great successes of her diplomatic career. Instead it’s one of her biggest disappointments by nearly any measure, with the wreckage of the Martelly administration she played a larger role than anyone in installing being the biggest and latest example.

Death by HR: How Affirmative Action Cripples Organizations

[From Death by HR: How Affirmative Action Cripples Organizations, available now in Kindle and trade paperback.]

The first review is in: by Elmer T. Jones, author of The Employment Game. Here’s the condensed version; view the entire review here.

Corporate HR Scrambles to Halt Publication of “Death by HR”

Nobody gets a job through HR. The purpose of HR is to protect their parent organization against lawsuits for running afoul of the government’s diversity extortion bureaus. HR kills companies by blanketing industry with onerous gender and race labor compliance rules and forcing companies to hire useless HR staff to process the associated paperwork… a tour de force… carefully explains to CEOs how HR poisons their companies and what steps they may take to marginalize this threat… It is time to turn the tide against this madness, and Death by HR is an important research tool… All CEOs should read this book. If you are a mere worker drone but care about your company, you should forward an anonymous copy to him.

Jeb Kinnison

Writing About Life and Love

Business

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