Google’s Driverless Car

Everyone’s fired up again. This time, however, the debate is moving in a direction that I can relate to. Here’ Megan McArdle (who has obviously been catching up on my blog archive):

Now I’m gloomy again.

Why? Not because of the technology. And not because of the regulation.  But because of the liability.  Self-driving cars represent a massive one–one that I’m not sure companies will take on.

Now, luckily, as many others are observing, a crazy tort system is somewhat unique here in the US and driverless cars need not multiply in the land of their birth.

My guess would be that promising-but-scary technology is more likely to be pioneered in a poorer country, since as people get wealthier they tend to become more risk averse and prioritize safety. But if something proves really useful and basically safe in some subset of countries, the pressure to change the rules elsewhere should become intense.

Good luck to Singapore or wherever but tweak US tort law? It is hard to describe how immense a task that is.

Putting these things onto roads full of human drivers means you probably don’t gain any macro benefits of more orderly roads. Handsfree driving is nice and all but is a few more hours of daily facebook for commuters going to spur Congress to the most fundamental overhaul of the legal system in generations?

For me it’s still filed with tacocopter and segways under ‘cool, technically viable idea: never going mainstream’.

When Molehills Are Mountains

So Obama won. With 50% of the popular vote. Keep that in mind as you read this (from a super moderate Dem):

The issue, as it turns out, is that the polls weren’t skewed at all. They just had a lot of self-identified Democrats in their sample because a lot of people were self-identifying as Democrats. The underlying issue is that party ID is an “attidunal” variable (comparable to wanting to vote for Mitt Romney) rather than a demographic variable (comparable to being a white man). What seems to have happened is that the Republican Party brand has been in the toilet, so a lot of people who you’d demographically expect to vote Republican aren’t identifying as Republican.

I was watching CNN last night and happened to see the moment where the panel o’ pundits realized that Obama was going to win. The republican guy had a real pity party for a minute, stated that his party’s “brand was broken” and went on and on about it. No doubt the red-faced Mic-thumpers will all agree this morning.

Hey, 48% of the country voted for Mitt* and they do control the house of representatives. What conclusions is anyone supposed to draw. How much signal is there in this noise?

Wait, political analysis? WTF am I doing…

*Not that I’ve been paying too close attention, but can we call him a weak candidate, Debate#1 aside? I kinda thought so, but then I also thought that of “W”. And Kerry and Gore and McCain… I wasn’t impressed by Obama v2012 either.

Hm, maybe it’s just a hard job.

GOP For Deficits, Dems For War (etc)

Here’s Yglesias:

Yet insofar as I have to guess, I think short-term growth will be faster under Romney than Obama for three reasons. First, in the post-1980 era you get bigger budget deficits with Republicans in the White House than with Democrats, and that’s a good thing in the short-term. Second, the Federal Reserve seems to be biased and delivers looser monetary policy with Republicans in the White House. Third, Republicans are much more likely to promote short-term economic growth at the expense of environmental concerns.

A favorite observation of mine (my favorite, not my observation) is how presidents need to play against type to maintain credibility with the median voter.

In politics, actions speak softer than words.

My Sandy Timeline

Mid-April: I move to Hoboken, NJ with my 6-month pregnant wife and Bree and Max, my two 10-pound dogs.

Some time in May: a relatively minor storm floods our parking garage and the nearby street. WTF? Lesson: Hoboken is really bad for flooding and we live in one of the worst parts.

End of July: I sign up for an actuarial exam for the end of October AND my son is born.

October 20: “A strong ridge of high pressure parked itself over Greenland beginning on October 20, creating a “blocking ridge” that prevented the normal west-to-east flow of winds over Eastern North America. Think of the blocking ridge like a big truck parked over Greenland. Storms approaching from the west or from the south were blocked from heading to the northeast.”

Some additional background from the same link:

We expect hurricanes to move from east to west in the tropics, where the prevailing trade winds blow that direction. But the prevailing wind direction reverses at mid-latitudes, flowing predominately west-to-east, due to the spin of the Earth. Hurricanes that penetrate to about Florida’s latitude usually get caught up in these westerly winds, and are whisked northeastwards, out to sea.

Bottom line: normal no longer applies.

October 22th: Tropical Depression 18 forms.

October 24th: Now Hurricane Sandy, the storm hits Cuba hard. The possibility of a US landfall dawns on the NHC for the first time.

October 27th (Saturday): I get a mass email from my building manager saying that the area flooded even during the over-hyped Irene last year and big floods trigger the fire alarm. I reply: as in the building-wide fire alarm? Yep, he fires back, and we can’t turn it off and it’s LOUD.

Well that sews this one up, but where do we go? Here’s our criteria:

  1. Town that has a hotel that wasn’t full
  2. Oh, yeah, and isn’t on a river
  3. That hotel needs to take dogs
  4. Is near a place where I can take my exam (still studying through all this!).

I pull up the intertubes and hit the phones. The answer? Three-hour away Albany.

October 28th (Sunday): no point studying, got to pack up an infant and dogs and supplies and whatnot and hit the road. That takes most of a day. The hotel is great and guest cancellations are rolling in. Papa John’s pizza and a practice exam for me.

October 29th (Monday): Holy Cow this is for real. Glued to CNN. Albany? A brisk wind is the worst we saw. Incredible luck.

October 30th (Tuesday): Hoboken is underwater. Everything is underwater. Uh, oh, when are we going to be able to get back?

October 31st (Wednesday): I write my exam in the morning. I’m the only one sitting it since the CAS let affected folks put it off. Not for me, let’s do this. That’s four hours.

Back at the hotel it’s becoming clear, as I scarf down yet more takeout, that we’re not going home. Looks like it’s back to Canada to my in-laws’. But first someone’s got to go back to Hoboken to get our travel documents. Saddle up!

Driving down the roads I see that about one in ten gas stations in Northern New Jersey is open and each has a gigantic queue of cars at it.

You know what that means: rationing by time instead of price. Far more importantly, however, it means that overall supply is lower. Here’s Yglesias who has been covering this very well:

Chris Christie, also put out a weekend press release warning that “price gouging during a state of emergency is illegal” and that complaints would be investigated by the attorney general. Specifically, Garden State merchants are barred from raising prices more than 10 percent over their normal level during emergency conditions (New York’s anti-gouging law sets a less precise definition, barring “unconscionably extreme” increases).

The bipartisan indignation is heartening, but there’s one problem. These laws are hideously misguided. Stopping price hikes during disasters may sound like a way to help people, but all it does is exacerbate shortages and complicate preparedness

And more:

But when it comes to things like gasoline and bottled water, neither the short-term nor the long-term supplies are genuinely fixed. Transportation routes into the area have been severely disrupted and many gas stations’ supplies are hard to access due to power outages, but it’s not impossible to transport this fuel from where it is into people’s cars and generators. It’s just much more annoying and difficult than usual. But the possibility of windfall profits is exactly the lure we need to get people to start making extraordinary efforts to get more fuel to the people who need it. There are things people will do to sell gasoline for $10 a gallon that they won’t do to sell gasoline for $3.40 a gallon (note that in Norway this is what gas costs all the time) and that’s what we need.

Power lines were down everywhere and electrical crews were working away. Roads were closed, though, and it took forever to get back to Hoboken. Eventually I had to park about a mile away and, now under the cover of darkness, run into town with my rubber boots, flashlight and backpack.

Very post-apocalyptic.

The phone networks were overloaded so there were definitely people around. You could see refugees sitting in cars charging their devices before going back up to, I dunno, play angry birds by candlelight, I suppose. The gold standard of disaster certifications is of course an on-location broadcast by Anderson Cooper, which happened while I was there! I didn’t see AC360 himself, though.

Anyway, got my stuff and booted it back to the car. Back to Albany by 11pm. Phew. what a day.

November 1st: quick check of the newswires. Still flooded. Ok, back in the car for 8 hours to Canada!

Post Scripts:

The insurance loss is getting picked at 10-20bn, which should put this after Katrina and Andrew as the third most costly hurricane in US history. That’s probably about right. There’s also a debate about whether hurricane deductibles (higher than normal storm deductibles) are going to apply to this “Post-Tropical Cyclone”. See here for example.

There is also a debate about the role of FEMA in these kinds of disasters. Here is an interesting point (via MR):

We’ve nationalized so many of the events over the last few decades that the federal government is involved in virtually every disaster that happens. And that’s not the way it’s supposed to be. It stresses FEMA unnecessarily. And it allows states to shift costs from themselves to other states, while defunding their own emergency management because Uncle Sam is going to pay. That’s not good for anyone.

When FEMA’s operational tempo is 100-plus disasters a year, it’s always having to do stuff. There’s not enough time to truly prepare for a catastrophic event. Time is a finite quantity. And when you’re spending time and money on 100-plus declarations, or over 200 last year, that taxes the system. It takes away time you could be spending getting ready for the big stuff.

…I think another issue is some people see the failed response to Hurricane Andrew as the reason George H.W. Bush lost Florida to Clinton. So now, you have presidents who are very concerned about the potential impact, from an election standpoint, of disasters. That created an incentive to nationalize things.

Finally, here’s a statistical wrap-up (great image at the link):

Death toll: 160 (88 in the U.S., 54 in Haiti, 11 in Cuba)

Damage estimates: $10 – $55 billion

Power outages: 8.5 million U.S. customers, 2nd most for a natural disaster behind the 1993 blizzard (10 million)

Maximum U.S. sustained winds: 69 mph at Westerly, RI

Peak U.S. wind gusts: 90 mph at Islip, NY and Tompkinsville, NJ

Maximum U.S. storm surge: 9.45′, Bergen Point, NJ 9:24 pm EDT October 29, 2012

Maximum U.S. Storm Tide: 14.60′, Bergen Point, NJ, 9:24 pm EDT October 29, 2012

Maximum wave height: 33.1′ at the buoy east of Cape Hatteras, NC (2nd highest: 32.5′ at the Entrance to New York Harbor)

Maximum U.S. rainfall: 12.55″, Easton, MD

Maximum snowfall: 36″, Richwood, WV

Minimum pressure: 945.5 mb, Atlantic City, NJ at 7:24 pm EST, October 29, 2012. This is the lowest pressure measured in the U.S., at any location north of Cape Hatteras, NC (previous record: 946 mb in the 1938 hurricane on Long Island, NY)

Destructive potential of storm surge: 5.8 on a scale of 0 to 6, highest of any hurricane observed since 1969. Previous record: 5.6 on a scale of 0 to 6, set during Hurricane Isabel of 2003.

Diameter of tropical storm-force winds at landfall: 945 miles

Diameter of ocean with 12′ seas at landfall: 1500 miles

Self-Driving Cars Approach? Doubt It.

Geekdom is a-flutter over Google’s self-driving car project.

Google announced a new phase of its self-driving car project Tuesday. The test vehicles, of which there are “about a dozen on the road at any given time,” have so far logged 300,000 miles of road testing without a single accident under computer control. In the next phase of testing, team members will start commuting to work solo, with the robot at the wheel.

Google also showed off a new vehicle type added to the program, the Lexus RX450h SUV. Now that the self-driving car software is comfortable in a variety of traffic conditions, the next phase will test snowy roads, temporary construction signals and other unusual terrain.

More here. Via MR under a very optimistic headline. An optimism I don’t share, unfortunately, but not because of the technology.

What I’m worried about is whether our society is genuinely capable of putting the most lethal weapon on earth in the hands of AI.

Remember that the auto liability insurance market is the largest in the world by an order of magnitude. This is so because everyone who can drive has the power to maim and destroy a lot of property and life around him/her. Auto insurance works because agents have control over their actions and are responsible for those consequences. Each person pays premium.

Who pays when Google’s driver hits a schoolbus full of children and sends it rolling down a cliff? What if Google’s driving algorithm isn’t at fault but a court pins the blame anyway? Remember Google’s car need never cause an accident for people to scream “Skynet!” and pull the plug.

Like with Kickstarter, Google’s car will only truly be tested when someone gets effed over. You tell me how long Kicktarter will last when someone commits genuine fraud and everyone’s confdience evaporates. Caveat Emptor? Yeah right.

It is our liability system (which mostly reflects an underlying extreme risk aversion) that will probably kill these technologies.

Violence in America

I saw this interesting chart suggesting violence in the US is on the decline (original image here):

This is via Krugman who doesn’t hesitate to grind his political ax a bit:

And that’s one reason I find all these laments about declining values among non-elite Americans hard to take seriously. If things like single parenthood were as bad as they say, how can social pathologies have declined so much?

Ugh, I say, politics and sociology. What a mess!

So I thought I’d like to tickle a bias of mine with the graph, too. Notice that the trend is the same in all OECD countries? They’re dwarfed by the scale of the US data. Oh, the statistical tricks we can play!

For a quick and dirty analysis, let’s just see what the demographics of the era have looked like (source):

You’ll see that society is aging pretty remarkably since the 70s. Common to almost all OECD countries.

Angry youngsters killing each other!

Underdogs Are The Elite. And They’re Mean About It

Everybody thinks they are countercultural rebels, insurgents against the true establishment, which is always somewhere else. This attitude prevails in the Ivy League, in the corporate boardrooms and even at television studios where hosts from Harvard, Stanford and Brown rail against the establishment.

As a result, today’s elite lacks the self-conscious leadership ethos that the racist, sexist and anti-Semitic old boys’ network did possess…

The best of the WASP elites had a stewardship mentality, that they were temporary caretakers of institutions that would span generations. They cruelly ostracized people who did not live up to their codes of gentlemanly conduct and scrupulosity.

…If you read the e-mails from the Libor scandal you get the same sensation you get from reading the e-mails in so many recent scandals: these people are brats; they have no sense that they are guardians for an institution the world depends on; they have no consciousness of their larger social role.

That’s David Brooks.

I’m intrigued by the idea that we live in a world where people who adopt the underdog mentality run the show. It sure helps to feel that way when you’re competing hard, so maybe this is necessary. Maybe without the buzz of existential threat, nobody would ever work hard enough to fuel economic growth?

Ugh. I struggle with this kind of moralistic commentary. I get the narrative objective here but I’m rarely convinced by any of it, particularly when someone is foolish enough to justify policy with these arguments. If Brooks is right, what the hell are we supposed to do about it? Interesting observations, sure, but that’s all they can be.

Is it plausible that there were there middle aged white guys in 1915 writing about how “the kids these days don’t have any respect for the things that matter! It was all better in the old days when people cared about their work!”? Sure is. And that really takes the heat out of this argument for me.

We all want to feel like dad is out there doing the right thing for us. But human society ceased behaving like a collection of families thousands of years ago.

Bernanke Failed In The 90s. That’s Why He Fails Today

I find Ben Bernanke endlessly fascinating. This is a guy that built his entire academic career around studying the exact situation we now find ourselves in.

Seriously, and by all accounts this was a first rate career, too.

Yet now he finds himself in a position where he is dismissing the most important conclusions of his most important research. I think it is hard to overstate how mind boggling this is.

Here is Scott Sumner:

Bernanke keeps insisting that the Fed is never really out of ammo.  I know that some people think he’s lying, but he also passionately believed that as an academic.

…The Fed’s newly transparent forecasts make it quite clear that we will fall short of almost anyone’s definition of a desirable level of demand growth over the next few years.  And yet the Fed holds back from doing more.  Reporters are beginning to probe this inconsistency at press conferences.  He answers the queries the only way he can—mysterious “costs and risks” of aggressive unconventional stimulus.  That basically means that if they bought up a large chunk of the national debt, they might later have to sell it at a loss.

Does Bernanke actually believe these costs and risks are more important than millions of unemployed?  Based on his work on Japan as an academic, almost certainly not.  But other people at the Fed certainly do worry about this, and he must speak for the entire Fed at the press conferences.  What else could he say?

I figure that Bernanke’s research may have convinced him (and some others) but it has not convinced enough of the rest of society (median economist, median politician, median voter, whatever) for it to make a difference in policy. The idea of the fed as an independent institution is complete BS. Bernanke is forced to give voice to a consensus he believes is totally wrong.

So Bernanke was a failure as an academic. Which means he will fail as a central banker.

NFL Cities Buy Status

Of the 20 stadiums built since the Georgia Dome opened, four have been privately financed. Of the rest, the average public share is 73% of the total cost.

That’s the Economist on football stadiums. The impetus is the recent plan for the new home of the Falcons: $1bn split more or less evenly between taxpayers and the team. Why do taxpayers want to spend this kind of money on white elephants?

Well, mainly because there are only 32 football teams and economic capacity for a lot more than that. Forgetting ridiculous Green Bay and Canada-sapping Buffalo, the two low-end economic outliers, you get an effective minimum GDP for a mero area of about 60bn. Here’s my data and here’s my source.

Even ignoring LA (and San Bernardino and San Jose) there are no fewer than 15 metro areas with over 60bn GDP and no gridiron. Think any of these cities would chastely hold back if LA starts screwing up its next shot at an NFL team?

Remember, this ain’t the slums of Bangalore: the #1 job of a politician in the USA is to make his/her constituents feel like they’re high status. NFL owners, scarce asset firmly in their grips, are happy to play bidders off each other.

Addendum: here are the cities (note I added San Jose and San Francisco together in the San Fran row):

City 2010* Teams GDP/Team
New York-Northern New Jersey-Long Island, NY-NJ-PA 1,280,517 2 $640,259
Los Angeles-Long Beach-Santa Ana, CA 735,743 0
Chicago-Joliet-Naperville, IL-IN-WI 532,331 1 $532,331
Washington-Arlington-Alexandria, DC-VA-MD-WV 425,167 1 $425,167
Houston-Sugar Land-Baytown, TX 384,603 1 $384,603
Dallas-Fort Worth-Arlington, TX 374,081 1 $374,081
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 346,932 1 $346,932
San Francisco-Oakland-Fremont, CA 494,444 2 $247,222
Boston-Cambridge-Quincy, MA-NH 313,690 1 $313,690
Atlanta-Sandy Springs-Marietta, GA 272,362 1 $272,362
Miami-Fort Lauderdale-Pompano Beach, FL 257,560 1 $257,560
Seattle-Tacoma-Bellevue, WA 231,221 1 $231,221
Minneapolis-St. Paul-Bloomington, MN-WI 199,596 1 $199,596
Detroit-Warren-Livonia, MI 197,773 1 $197,773
Phoenix-Mesa-Glendale, AZ 190,601 1 $190,601
San Diego-Carlsbad-San Marcos, CA 171,568 1 $171,568
San Jose-Sunnyvale-Santa Clara, CA 168,517 0
Denver-Aurora-Broomfield, CO 157,567 1 $157,567
Baltimore-Towson, MD 144,789 1 $144,789
St. Louis, MO-IL 129,734 1 $129,734
Portland-Vancouver-Hillsboro, OR-WA 124,683 0
Pittsburgh, PA 115,752 1 $115,752
Tampa-St. Petersburg-Clearwater, FL 113,702 1 $113,702
Charlotte-Gastonia-Rock Hill, NC-SC 113,568 1 $113,568
Riverside-San Bernardino-Ontario, CA 109,818 0
Kansas City, MO-KS 105,968 1 $105,968
Cleveland-Elyria-Mentor, OH 105,625 1 $105,625
Indianapolis-Carmel, IN 105,163 1 $105,163
Orlando-Kissimmee-Sanford, FL 104,107 0
Cincinnati-Middletown, OH-KY-IN 100,594 1 $100,594
Columbus, OH 93,353 0
Sacramento-Arden-Arcade-Roseville, CA 92,873 0
Las Vegas-Paradise, NV 89,799 0
Hartford-West Hartford-East Hartford, CT 87,963 0
Austin-Round Rock-San Marcos, TX 86,029 0
Bridgeport-Stamford-Norwalk, CT 84,882 0
Milwaukee-Waukesha-West Allis, WI 84,574 0
San Antonio-New Braunfels, TX 82,036 0
Nashville-Davidson-Murfreesboro-Franklin, TN 80,898 0
Virginia Beach-Norfolk-Newport News, VA-NC 80,518 0
New Orleans-Metairie-Kenner, LA 71,476 1 $71,476
Salt Lake City, UT 66,456 0
Providence-New Bedford-Fall River, RI-MA 66,334 0
Memphis, TN-MS-AR 65,025 1 $65,025
Richmond, VA 64,321 0
Jacksonville, FL 60,303 1 $60,303
Louisville-Jefferson County, KY-IN 58,572 0
Oklahoma City, OK 58,339 0
Raleigh-Cary, NC 57,278 0
Birmingham-Hoover, AL 53,834 0
Honolulu, HI 51,327 0
Omaha-Council Bluffs, NE-IA 47,556 0
Rochester, NY 45,742 0
Buffalo-Niagara Falls, NY 45,150 1 $45,150
.
.
.
Green Bay, WI 15,270  1  15,270

Michael Bloomberg, Javascript Jockey

Here’s Jeff Atwood with some, perhaps needed, pushback on the whole “everyone should learn to code” thing. The final straw for him was Mayor Bloomberg’s recent tweet:

Jeff asks: if everyone needs to code, how would coding make the Mayor better at his job?

Most jobs don’t need coding today, that’s a fact. But here are some other arguments:

  • Substantially all productivity improvements in most industries are coming from coding.
  • There are people out there who would be excellent programmers today if they were exposed to programming at a young enough age.
  • The world needs more programmers solving programming problems.

My love affair with coding as a macro phenomenon isn’t about supporting today’s patters of production, it’s about supporting the rate of change of those patterns.

Michael Bloomberg, who owns a software company fercrissakes, should support this movement.