Toyota CEO: Banning Internal Combustion Autos Would Be a Mistake

Peter Landers reports in the Wall Street Journal that at the Japan Automobile Manufacturers Association end-of-year press conference, the CEO of Toyota, Akio Toyoda, criticized plans to make sales of vehicles with internal combustion engines illegal:

TOKYO— Toyota TM -0.80% Motor Corp.’s leader criticized what he described as excessive hype over electric vehicles, saying advocates failed to consider the carbon emitted by generating electricity and the costs of an EV transition.

Toyota President Akio Toyoda said Japan would run out of electricity in the summer if all cars were running on electric power. The infrastructure needed to support a fleet consisting entirely of EVs would cost Japan between ¥14 trillion and ¥37 trillion, the equivalent of $135 billion to $358 billion, he said.

“When politicians are out there saying, ‘Let’s get rid of all cars using gasoline,’ do they understand this?” Mr. Toyoda said Thursday at a year-end news conference in his capacity as chairman of the Japan Automobile Manufacturers Association.

He said if Japan is too hasty in banning gasoline-powered cars, “the current business model of the car industry is going to collapse,” causing the loss of millions of jobs.

and we can’t deploy solar power or wind power fast enough to make up the difference. Nuclear power could fill the gap but building conventional nuclear power plants is too slow as well. The only real prospect for generating enough electrical power would be small scale nuclear power. At this point that’s proceeding very slowly as well, largely for regulatory reasons but also because few want to be the first to try out a new technology.

I doubt that any of that will stop American politicians from demonstrating how committed they are to opposing human-caused climate change by doing things that actually have the opposite of the effect that is presumably intended.

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Masks Are Not Enough

SciTechDaily reports on a study which found something that should have been obvious—wearing masks alone is not enough to prevent contracting COVID-19:

Simply wearing a mask may not be enough to prevent the spread of COVID-19 without social distancing.

In Physics of Fluids, by AIP Publishing, researchers tested how five different types of mask materials impacted the spread of droplets that carry the coronavirus when we cough or sneeze.

Every material tested dramatically reduced the number of droplets that were spread. But at distances of less than 6 feet, enough droplets to potentially cause illness still made it through several of the materials.

I don’t see this study as either discouraging or disproof of the efficacy of wearing facemasks so much as a confirmation of the Swiss Cheese Model I posted on earlier. It may add another wrinkle to that model: some mitigation measures are more effective than others.

I don’t believe that other than maintaining total isolation there’s any way to protect yourself perfectly from contracting any virus. I also speculate that the ways in which people change their behaviors when they wear facemasks could actually make them more vulnerable to contracting COVID-19 than if they weren’t wearing masks at all. As one commenter notably put it, they behave as if masks were forcefields. I limit the number of times I go to the grocery store (I do all the shopping for my wife and me) but when I do I always wear a fresh, snugly-fitting facemask and I do my best to maintain three meters from my fellow patrons to the best of my ability. Ten meters would be better but too impractical. It rankles me a bit that some people are simply unwilling to keep their distance.

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Cabinet Nominations

I agree in principle with Mitch Daniels’s Washington Post op-ed:

The pattern of permitting new presidents to form Cabinets of their own choosing, and enabling them to get started promptly, began to erode after the inauguration of the administration I served. President Barack Obama saw four of his 15 nominees delayed beyond his first weeks in office. Then President Trump was blocked on all but three. Now we read that an opposition Senate — if that is what results from the coming runoff elections in Georgia — may challenge a large number of President-elect Joe Biden’s nominees.

After a lengthy and gentlemanly defense of President-Elect Biden’s nomination of Neera Tanden he concludes:

My own previous encounters with Tanden were invariably adversarial. When I was governor of Indiana, her interest group attacked our state reforms of health care, infrastructure and education, always harshly (and, as the subsequent evidence showed, unjustifiably). I was once disinvited from a forum her organization was hosting for the sin of disagreeing about yet another issue. But, were I voting in the Senate, I would save my criticisms, and negative ballots, for the substantive arguments to come, regardless of who is at OMB.

Sadly, from public profanity to violence on TV to the collapse of objective journalism, we have seen that it is rare if not impossible to revive standards once they have decayed and ratcheted downward. The tradition of granting deference to a new president’s picks may not yet be beyond resuscitation, but one more cycle like the last one and it probably will be. Confirming Neera Tanden would be a small and cost-free step toward reviving the comity and civility we have lost.

I will disagree with him in detail, however. I don’t think the erosion of that particular standard goes back to Barack Obama but much, much farther. The last cabinet appointment to be outright rejected was John Tower, whom George H. W. Bush nominated to be his Secretary of Defense. By nearly all accounts Sen. Tower was a sonovagun and his former Senate colleagues expressed their displeasure by rejecting his nomination, the first such rejection in thirty years and the only rejection of a recent former senator in the 20th century. I don’t believe that his offenses were drunkenness and womanizing. I think it was revenge for the treatment of House Speaker Jim Wright.

Since Towers’s rejection, having two or three appointees withdraw their nominations has become a commonplace and Barack Obama’s appointees were no exception.

While I agree with Mr. Daniels that Joe Biden’s appointments should be confirmed promptly, let’s not imagine that extreme partisanship began twelve years ago. It goes back a lot farther than that.

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Twins

You might be interested in Helen Branswell’s side-by-side comparison of the Moderna and Pfizer vaccines at STAT. AFAICT the biggest distinction is a business one:

The ultracold storage requirement is not the only challenging aspect of the Pfizer vaccine. The minimum amount of vaccine a location can order is 975 doses. A large teaching hospital might need several of those. But there are plenty of places across the country that don’t need 975 doses to vaccinate the people currently eligible for vaccination — health workers and nursing home residents. This is the vaccine that needs to be kept at -94 F. The minimum order size will limit the locations in which this vaccine can be used.

The Moderna vaccine’s minimum order is 100 doses, a much more manageable number.

The Pfizer vaccine is shipped in five-dose vials; Moderna’s vaccine is shipped in 10-dose vials.

Here’s her description of the side effects:

The most common side effects are injection site pain, fatigue, headache, muscle pain, and joint pain. Some people in the clinical trials have reported fever. Side effects are more common after the second dose; younger adults, who have more robust immune systems, reported more side effects than older adults.

Other than the injection site part that’s how I feel normally.

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Keep Your Powder Dry

I’m reading a lot of saber-rattling about the Russian hacking of multiple federal departments and private companies. At DefenseOne Aaron Boyd warns that the problem is bigger than has been recognized:

The fallout from the SolarWinds breaches will be far more difficult and time-consuming to remediate than originally assumed, as the attackers likely found more ways to enter federal networks than just the SolarWinds Orion product and have been targeting IT and response personnel, according to the government’s lead cybersecurity agency.

while in an op-ed in the Wall Street Journal Mike Rogers demand an immediate and proportional response to the attacks:

The U.S. needs to respond in a smart, considered manner. Shutting off the lights in Moscow isn’t an appropriate or proportional response. Disrupting the networks of the SVR or GRU—Russian military intelligence—may well be. If the U.S. doesn’t define red lines today and demonstrate that there are consequences for crossing them, we will continue to be the victim of cyberattacks. The breaches will only get worse.

He finally arrives at what is almost certainly the wrong conclusion:

The incoming administration must appoint a national cyber director, a provision included in the recently passed National Defense Authorization Act, and an issue on which I testified this summer. We can’t afford to have dozens of offices and agencies running their own cybersecurity policies and budgets. The White House must assert itself.

Centralization is the problem not the solution. Centralization and monoculture render us more vulnerable not less.

The editors of the New York Daily News have their own proposals:

Step one is determining the extent of the damage done, while gathering forensic evidence to definitively nail the perpetrators. That’s no simple task, as the scale and duration of the invasion could allow a maddening web of crimes, including mass falsification of information.

Step two is making clear that an intrusion so sweeping will not go unpunished, lest America winds up inviting brazen attacks not only from Russia but from China, North Korea, Iran and others.

Step three is striking back with intensity — a job that, given Trump’s hesitancy, will likely fall to Joe Biden.

None of those would be my first step. I’d start enforcing the laws that are already on the books. If SolarWinds complied with its obligations under Sarbanes-Oxley, the problem could never have occurred. I would also point out that SolarWinds’s twenty some-odd patents impair competition. That, after all, is what patents are supposed to do.

A little back-of-the-envelope calculation suggests to me that the cost of investigating and remediating the attacks will be in the vicinity of $5 billion.

As I’ve already observed, prevention will be extremely difficult. Cyber-attack is asymmetric warfare. Hardening targets is possible but will require some pretty draconian measures that I can’t imagine actually taking place. Counter-attacking in kind not only legitimizes cyber-attacks but invites reprisals.

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Why Are the Forecasts So Wrong?

At Discourse Veronique de Rugy and Jack Salmon point out that many of the economic forecasts have been amazingly wrong:

Since many economists failed to remember the lessons of the past, they continually made bad predictions this year. One of the biggest culprits was Nobel Prize winner and New York Times columnist Paul Krugman, who in August claimed that the expiration of the $600 a week in extra unemployment compensation in late July would drive down consumer spending and result in a 4% to 5% contraction in gross domestic product. Since then, personal consumption has, in fact, continued rising, recovering 91% from its April lows, while the third-quarter GDP expanded 7.4% from the second quarter.

Back in July, economists from Jared Bernstein, tapped by President-elect Biden to serve on the Council of Economic Advisers, to Ernie Tedeschi, a former senior adviser at the U.S. Treasury, forecast that by the end of the year the economy will have contracted by 2% and the unemployment rate would probably be greater than 11%. Similarly, economists at the Economic Policy Institute proclaimed that the end of the extra jobless benefits would lead to the loss of more than 5 million jobs, while Mark Zandi of Moody’s Investors Service warned of large job losses and double-digit unemployment rates “well after the pandemic is over.”

In reality, the economy has continued to expand, employers have added more than 6 million people to their payrolls since July, and the unemployment rate fell to 6.7% last month.

All of this is extremely easy to explain. First, try as they might, economists have not been able to transform economics into a predictive science like physics or chemistry. Flipping it around, if chemistry were like economics, every chemical plant in the world would be exploding unpredictably and frequently and if physics were like economics sending a payload into orbit would be just as likely to hit Tokyo. As John Kenneth Galbraith wisecracked years ago, the purpose of economic forecasting is to make astrology look respectable.

The second reason, as I continuously harp, is that economists are human beings with preferences, beliefs, agendas, and prejudices and all too frequently those overwhelm their professional judgment.

Neither of these deficiencies should be construed as proving that economics is useless. Economics has one fundamental observation: incentives matter. Nearly everything else derives from that observation. The reason that economics remains largely descriptive rather than predictive is that while incentives matter they don’t matter deterministically but vary in degree and vary from individual to individual.

My solution is not to limit my reading to Paul Krugman, Jared Bernstein, or Mark Zandi but also to read the observations of Republican economists like Greg Mankiw or John B. Taylor and libertarians like Tyler Cowen or Scott Sumner, even MMTers like Warren Mosler or Stephanie Kelton.

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The Scope of the Problem

In his column at Bloomberg Hal Brands outlines his plan for responding to the massive security breach of U. S. government departments and private companies by Russian hackers:

First, don’t fall asleep on Russia, even as the Chinese threat attracts the majority of America’s geopolitical attention. Putin’s Russia may be a declining, economically moribund power. But his high tolerance for risk, combined with Moscow’s talent for identifying and exploiting Western vulnerabilities, means that Washington downplays the Russian challenge at its peril.

Second, effective cyberstrategy must blend unilateral and multilateral measures. It seems likely that many other countries were victimized by the SolarWinds hack. The U.S. must therefore work more closely with other advanced democracies to strengthen shared warning networks, coordinate damage assessments, and impose sharp costs on malign actors. As Microsoft president Brad Smith argues, “In a world where authoritarian countries are launching cyberattacks against the world’s democracies, it is more important than ever for democratic governments to work together.”

Third, those responses cannot be solely defensive. SolarWinds highlights the basic offense-defense asymmetry in cyberspace: A clever attack will require remediation efforts costing orders of magnitude more than the attack itself. Moreover, the relatively open nature of the democratic internet, and the fact that responsibility for cybersecurity is diffused among so many public and private actors, creates vectors of vulnerability that will always tempt authoritarian regimes.

all of which convince me that he doesn’t understand the scope of the problem.

The federal government and U. S. governments in general have major structural problems which render them peculiarly incapable of maintaining cybersecurity. Among these structural issues are:

  • Security talent tends to be homegrown, i.e. provided by individuals, frequently self-taught, already working in their departments.
  • Worse still, they may be outsourced. The incident involving Edward Snowden revealed the risks of doing that.
  • Governments are unable to discipline public employees. They can move them but terminating civil service employees is incredibly cumbersome.
  • Procurement rules make it practically impossible to respond in an agile manner.
  • Governments don’t just tend to use software monocultures but they frequently use extremely outdated software monocultures.

Those leave just two strategies for making governments more secure. The first would be to detach their networks from the Internet entirely and not allow any devices which can be connected to the Internet to connect to their networks. That’s actually done in certain very highly secure facilities in the government. As should be needless to say, that would be extremely impractical to do across all levels of government, basically setting them back 30 years. That’s at least ten years more than they’re already behind the times.

The alternative would be to reorganize personnel, staffing, budgeting, procurement, and the very structure of the government from top to bottom. Governments should be much more distributed and resilient than they are. Need I belabor the point? Those things aren’t going to be done, either.

In the absence of one of those two strategies none of the measures Mr. Brands suggests will be particularly effective.

One more point. SolarWinds is publicly traded (it took an enormous hit following the revelations—practically a near-death experience). It should be sued under the provisions of Sarbanes-Oxley. It is pretty obviously in violation. That might be true of Microsoft as well.

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Stating the Obvious

I agree with Robert Robb’s observation in the Arizona Republic:

If big tech is to be reformed, it should be through legislation and regulation. Not through antitrust lawsuits, such as those filed recently against Facebook and Google, both of which Arizona Attorney General Mark Brnovich has joined.

With respect to social media, I am a privacy radical. I believe each of us should have the equivalent of a property right to our internet data. No one should be able to put anything on our computing devices without our explicit consent.

No one should be able to collect data on our internet activities, including our browsing history, without our explicit consent. No one should be able to use data collected from our internet activities for any purpose without our explicit consent. That includes using it to target ads at us or sell the data to others.

And no one should be able to require a waiver of these rights as a condition for using a social media platform or visiting a website.

That fix wouldn’t be limited to Facebook. It would include Google, Instagram, and any other company that used the same business model. It’s the business model that’s the problem not just the individual companies. And it could be done tomorrow, Congress willing.

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End of the Big City Boom?

At The Hill Kristin Tate makes an interesting observation:

What developed this year is a cascade of residents leaving large cities in blue states. Among the biggest losers this year, in terms of total population loss, were New York, San Francisco, Los Angeles, Chicago and the District of Columbia. New York lost at least 300,000 residents this year. San Francisco saw 90,000 postal changes of address out of the city, while its median apartment rent took a nosedive of 20 percent in 2020. Los Angeles recorded more than 25,000 moves out of the city, while Chicago logged over 20,000. Even the District of Columbia lost 15,000 residents. Other cities that had sustained growth in the last decade also face severe drops in interest.

Residents who fled large cities in blue states overwhelmingly relocated to red-state cities, mostly in the Sun Belt or the West outside of California. Phoenix, already booming before the coronavirus, retained its spot as the fastest growing city in the country; its metro population now displaces Boston. The other overall winners in the demographic game this year are Nashville, where home prices continue to surge while real estate inventory is down 40 percent; Las Vegas, which tempted Bay Area techies to follow the Raiders to Sin City; Charlotte, which now has a larger population than San Francisco; and the greater Charleston area, which is likely the home of Boeing’s next expansion and has benefitted from manufacturing jobs moving south.

Chicago has been declining in population for years. This year will merely put an exclamation point behind the city’s decline. As I have been say for years, I think that people will be appalled at the results of the 2020 decennial census. For the first time California will lose seats in the reapportionment, New York will probably lose two seats, and Illinois will probably lose another seat while Texas and Florida will gain seats. Following the Supreme Court’s recent decision, those are now done deals.

I’m not sure she isn’t getting ahead of herself. I’ll be convinced it’s the end of the boom in big cities if Dallas, Houston, Jacksonville, Miami, and Seattle lose population. Otherwise it’s a just continuation of the population moving to where the jobs are.

Update

A Chicago Tribune editorial underscores that last point:

We’ve been chronicling the Illinois Exodus for years as residents and employers depart for other states with stronger economies, lower tax burdens and better-managed governments. It’s gotten very easy for people to say goodbye to Illinois, its tax-and-spend politicians and fiscal dysfunction. Illinois needs to retain and attract those workers to generate enough tax revenue to begin to slow its drain-circling. To do that, Gov. J.B. Pritzker and the General Assembly need to make Illinois more hospitable to businesses. More like Texas.

Texas added more than five times as many jobs as Illinois last year. The Lone Star State’s welcoming approach to economic growth works. Illinois’ slow growth/big government approach doesn’t.

States that make it easier for employers to grow and hire will reap the benefits. States that pound employers with heavy tax and regulatory burdens will scare them off. It’s not rocket science.

I’m convinced that Illinois politicians know what needs to be done. They just don’t know how they’ll hold onto their jobs and their own shady fortunes if they do what needs to be done.

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And Now the Deluge

I am a bit perplexed at the Washington Post editors’ reaction to the bipartisan antitrust suit against Google. Yes, initially it was filed just by Republican state AGs but now nearly all fifty state AGs, Republicans and Democrats alike, have piled on. Here’s their complaint:

Why so many cases causing so much confusion? The primary culprit is something that shouldn’t have a role in antitrust at all: partisan politics.

Just to recap, the Department of Justice, all but two states, and the European Union all have antitrust suits against Google. Google is now an octopus, with tentacles as large as anything that Frank Norris ever wrote about. That means multiple potential lines of attack. That doesn’t sound primarily like a partisan issue to me.

The editors themselves put their fingers on the issue:

The Texas suit raises questions about vertical integration in the digital advertising stack that merit probing. For instance, does Google’s triple role as buyer, seller and middleman point to a need for regulations in these markets that mirror those in the financial sector?

Is it possible that they’re concerned about something that remains unmentioned in the editorial? Let’s see. Hmmm. FAANG. The “F” stands for Facebook against which an antitrust suit was filed last week. The “G” stands for Google. The DoJ filed its suit back in October, the EU its suit in November, ten Republican AGs filed theirs this week followed by 38 other AGs. What does one of the “A”s stand for? Oh, yes, another vertically integrated monopoly.

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