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  • Beware of maps that are just population density maps

    Sorry for forgetting to post last week. I haven’t kept up with this blog as much as I should be.

    XKCD has a well-known comic showing how we too often overanalyze what are really just population density maps. It’s very easy to notice a pattern and extrapolate silly things from it. I recently saw another such example of this on social media I wanted to quickly bring up.

    The implications of this map seems obvious, there were way more battles in Europe than anywhere else on earth. People on social media had all sorts of explanations:

    Population density: battles mostly happen where people are, see the big stretch of emptiness in the Canadian Arctic, for instance. Europe has been densely populated for most of its history, so of course it had a lot of battles.

    Recency bias: Europe fought 2 World Wars within the last century or so. As the largest wars in human history these of course had the most battles in human history, so there’s a lot of data points from that.

    Warlike nature: maybe Europeans are just more warlike than the peaceful people in other parts of the world?

    But the most obvious explanation seemed to be missing: Wikipedia is edited by the global online community, which is dominated by the the Anglosphere and Europe. Anglospheric and European editors will naturally gravitate towards writing many many articles about Europe and it’s history rather than the history of the world outside of Europe. A battle of 3000 people in the middle ages will have been studied by students in whatever country it happened in, even if it wasn’t important globally. And if that student was European or from the Anglosphere it’s more likely that they’ll grow up to be a Wikipedia editor and so add this unimportant battle into the encyclopedia.

    So while there are some trends on this map that do come from the underlying data (ie there are way less battles in places where few people live), most of it is a function of bias. People write what they know. If there was an Indian version of Wikipedia instead, I’m certain the density of dots would be a lot higher there and a lot lower in Europe.

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  • “The Crime of ’73”

    Boy, these posts aren’t quite coming out weekly now are they?

    I might have posted on this topic before, but I wanted to write something down and this was on my mind. It’s interesting how the controversies of yesteryear always fade away, even though in their day they dominated the news and the mind-space of politically conscious voters.

    Take the Silver vs Gold movement. When America was founded, it had a bi-metallic standard, meaning that both silver and gold were legal tender. Congress set down in writing how much weight of silver made a dollar and how much gold made a dollar, and so both could be used to buy and sell. But of course, as commodities the price of silver and gold in the market would fluctuate, but congress didn’t understand or act quickly enough to fix things.

    For example, silver mines in Mexico continued to run and depressed the price of silver relative to gold. This created an arbitrage opportunity because the price of gold was higher than that of silver:

    • Take 10 silver dollars and exchange them for 10 gold dollars, as they are equivalent
    • Take the gold dollars to Mexico and melt them down.
    • Take that gold and exchange it for raw silver
    • Bring that silver back to the Mint in America and demand to have it struck into silver dollars. Because of the price difference between silver and gold, the silver you brought back will make more than 10 dollars worth, so you can pocket the extra as your profit.
    • Start back from the beginning, trading 10 silver dollars for 10 gold dollars

    This happened because congress set a fixed value for a commodity who’s value changed on the market, and as that value changed there was arbitrage created. Gold flowed out of the country and was replaced with silver. When the California gold rush happened, the price of gold suddenly decreased and the whole process reversed. Congress didn’t understand what was happening, and so simply decided to remove the bimetallic standard to stop this from happening.

    But now we get to “The Crime of 1873.” When congress removed the silver standard in 1873, silver miners could no longer have their pure silver struck into coins that could be used as tender. The mint was by far the largest purchaser of silver and so removing silver from the standard removed most of the demand and so killed the price. Congress therefore upended the livelihoods of thousands of miners and mining towns by changing the laws on coinage. And those people never forgave them.

    For years this “Crime” was the hottest topic in certain political sections. It was the litmus test for candidates and parties. And it was the entire foundation of the presidential candidacy of William Jennings Bryan. For years, certain voters would never vote for a candidate or party who had supported the “Crime,” and they may not have even kept polite company with voters who supported those candidates. In its time, the “Crime” was seen as the greatest betrayal possible, and plenty of people pointed to it as the reason for national or local economic problems. They blamed the “Crime” and hoped that overturning it would fix things.

    Of course, America never regained the silver standard. For a time, the Federal government compromised and declared it would still buy silver from the miners directly, but in time even this subsidy was removed. The people affected by the “Crime” probably never forgave the Republicans (who passed the bill) for what they did. Indeed the “Crime’s” authors had a hard time defending their actions in the face of angry voters. Some authors claimed that the bill didn’t do what critics claimed, and that the US had technically been non-silver since 1853. Others claimed that ending the silver standard was an unintended biproduct. But this had the perverse effect of amplifying conspiracy theorists who believed the bill was passed with malicious intend, and giving ammo to those who wanted to overturn it.

    In the 1880s and 1890s, the “Crime of 73” was as much a controversial topic as any political topic today. Friendships could be ended by it. But it too did pass. I think most of the controversies of our day shall also pass, these days even American History students will barely remember the “Crime.”

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  • Choosing your facts based on your beliefs; everyone believes they are the rational one

    It’s very common and very well-known that people will, to an extent, choose their facts to fit their beliefs. But for many the facts they choose aren’t necessarily even well-founded.

    If you are a conservative, you probably prefer generally lower taxes, and you can find well-heeled economists who generally prefer lower taxes and lower spending over higher taxes and higher spending. Likewise a liberal or leftist can find economists who support higher taxes and higher spending. The issue is not “settled” and as with anything in economics (besides rent control, which is universally known to be bad) there are voices on either side.

    But there are some things that are uncontroversially accepted as true by all the experts in their field, and for some reason there are people that argue against it for no reason whatsoever.

    When I was in school, I remember a debate about teaching evolution. To cut to the chase, many Christians (not all by a long shot) have thought that evolution undermines their religion, and no matter how much evidence there is for it, these Christians will choose facts to fit their beliefs. That includes denying evolution, but also denying the fossil record (which supports evolution) and the age of the Earth (which supports evolution). This sometimes means denying modern microbiology and cancer biology (which are evolution in action). It’s fairly well-known by anyone who isn’t a Christian that this is a Dumb Thing To Do, and that picking your facts based on your beliefs just leaves you looking stupid.

    But then I found that while the Christians do it, the anti-Christians do it too.

    Let’s be clear: some atheists are just people who don’t believe in God. That’s fine, everyone has their beliefs. But some atheists are better termed anti-theists, they are people who oppose religion and its existence entirely. And it is these atheists that have constructed their own theories of “Intelligent Design” to support their ideas. Often these theories try to prove that Christianity is not only false, but that is is a complete con from start to finish and that no one truly believes in it anyway.

    The Atheist version of Intelligent Design is the “Jesus Myth Theory.” This is the idea that not only was Jesus just a mortal man (not the son of God), but that there was never even a person called Jesus at all, and that this is proof that Christianity was an invented scam. To be blunt, this idea has no more credence than Intelligent Design, but so-called rational atheists who turn up their nose at the stupid Christians with their stupid Intelligent Design will still believe this idea because they have chosen their facts based on their beliefs. I may write a post later about the evidence for Jesus’ existence, but the point I’m trying to make is that even communities which are adamant in their own rationality can wind up being suckered into myths just because those myths agree with what they want to believe.

    Let’s get one thing straight: EVERYONE believes that they’re rational. Everyone believes that their opinions are backed by evidence, backed by science, fundamentally true, and that only the dumb and misled would ever believe something different. That’s what makes the self-professed “Rationalist” community so misguided: claiming you’re the only community focused on rational beliefs is just admitting that you’ve never spoken to a community different than your own.

    EVERY community believes they are the rational ones, believes they are driven by facts and not emotions, believes that the others are ignoring facts to suit their opinions. And the Rationalist community has it’s own Intelligent Design theories just as the Atheist and the Christian communities do. A good Rationalist, Atheist, or Christian should of course never believe something just because their compatriots believe it, or just because it would support some of their ideology, but a good Rationalist, Atheist, or Christian must also recognize that they probably have biases themselves and that their own community probably harbors an “Intelligent Design” theory all its own.

    In the hallowed halls of Twitter and social media it’s widely believed that only the Left of the political spectrum knows and respects science, all right-wing beliefs are obviously false and dis-proven by data. The the exact inverse is believed on the right. I know both communities are havens of their own misinformation. I have seen too many on the Left tell me that supply and demand don’t exist, that building more housing doesn’t lower rent and cost and that inflation is driven only by corporate greed and not supply or demand. I have likewise seen the misinformation on the right over gun deaths, drug crime, vaccines and the like. I’m sure some of my own beliefs are misinformation, but we are all the heroes in our own stories and so self-reflection is very hard.

    But I just wrote this post because even if I’m only screaming into the void I wanted to remind people that everyone thinks they are rational. Your political enemies who you consider irrational and emotional idiots are human just like you, and they arrived at their beliefs through the exact same human mechanisms you did. Are you sure anything and everything you believe is true? Are you sure there could never be any evidence that supports your opponents? Don’t dismiss people are idiots just because they believe something else, most humans are just as rational as you.

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  • Tariffs are taxes, I’m tired of pretending otherwise

    Every politician says they’re lowering taxes. Or if they raise taxes, it’s only on the rich, poor people definitely deserve lower taxes. So do middle class people (where “middle class” equals “everyone less than rich” and “rich” equals “everyone richer than my current audience and me”). Taxes are unpopular and taxes shouldn’t be raised.

    But tariffs are fine apparently. In a new wave of protectionism, Biden and Trump have jacked up tariffs on everything from solar panels to lumbar. And despite claims of “national security” and “containing China” these tariffs have most strongly hit America’s allies such as Canada and Germany. The national security claims are bunk, these tariffs hit allies far more than they hit enemies.

    But still Biden doesn’t get pushback for raising taxes because “tariffs” aren’t seen as taxes. Wrongly, most people don’t realize that slapping a tax on imported goods raises the price of all of those goods, even the locally made ones. Think of it like this: if Biden slapped a tax on Pepsi such that every Pepsi now costed 5$, would Coca-Cola sit back and keep their prices? Of course not, as a greedy company Coca-Cola knows that customers will flock to its lower-priced products, and this will give it the ammunition to raise prices to juuuuuuuust under what Pepsi has. So now 4$ Cokes will become the norm.

    So too does it happen with tariffs. When you raise the price of Canadian lumbar, American lumbar companies also raise their prices because they know the consumer has no choice but to take it. When you raise the price of German steel, American steel raises its prices. These taxes on foreign goods have raised the price on all goods. They then raise the price of what those goods are used for, for example lumbar tariffs are raising house prices. And what do you call it when the price of goods rises over time? Inflation.

    Biden’s tariffs are adding to inflation. Trump’s tariffs are adding to inflation. Tariffs are nothing more than a tax on goods, a tax that the poor and middle class pay most as they are the ones most damaged by inflation. I’m tired of house prices soaring in part because of these new taxes. I’m tired of solar panel prices soaring as well. It’s all very two-faced of the Biden admin to claim global warming is an existential threat and then do everything in their power to kill the solar industry with new tariffs. Taxing it into the ground only makes global warming worse.

    So I’m tired of these tariffs, they’re nothing more than a tax. And I’m not going to pretend otherwise.

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  • Have IPOs become more speculative?

    This post is very late because I didn’t feel good about my conclusions, but here it is.

    I’ve been wondering if IPOs have become more speculative of late. Rumors abound that OpenAI (makers of ChatGPT) may IPO soon and they’ve been quoted as having a billion dollars in revenue and a valuation of 80 billion. 80 times profit is already a pricey valuation, 80 times revenue is even moreso. And other even more speculative IPOs have happened in recent memory. Companies like CRISPR Therapeutics and Beam Therapeutics IPO’d when they have essentially no revenue, just patents.

    It was once said to me that IPOs are “supposed” to be for a company that is profitable. The company shows the world that it is profitable and can thus afford to pay a dividend. The investors of the world will then pay for stock in the company in order to grow their money. So the company gets a big pile of cash by selling shares, and the investors get shares which pay a dividend and may grow in value also.

    The above is a very 20th century view of investing, these days dividends aren’t all that popular to begin with. So too does it seem that many companies will IPO long before they can afford a dividend, and long before they are profitable at all, so why are investors investing and buying these stocks?

    It isn’t necessarily a bad move for investors to buy stock in OpenAI if it does IPO. The investors are speculating that while it’s not profitable now, it will be in 10 or 20 years. In essence, an IPO like this lets investors play the role that venture capitalist play. Venture capitalists invest in many startups long before they see revenue or profit, and they bank on the fact that while 10 startups may fail, the 1 that succeeds will let them see more than 10x gains. With companies IPOing early, normal investors can now also play this game. Beam Therepeutics, CRIPSR Therapeutics, and OpenAI may all fail, but if you invest in them and 10 other speculative companies, then maybe 1 will succeed which will give you gains that wipe away all your loses.

    So I can’t say that companies IPOing earlier and earlier is a bad thing. As long as they don’t lie on any of their forms, then investors know exactly what they’re getting into. Investors know that they’re buying into a very speculative, pre-profit, maybe even pre-revenue company. But if it works out, they can make big gains. And remember that “investors” here isn’t just faceless, deep pocketed billionaires. Investors is also every person with a 401k or IRA. They too can buy into these companies using their own money and play at being venture capitalists. And if its so profitable for venture capitalists to do this, then why shouldn’t the rest of us do the same?

    But while I cannot say this is a bad thing, I also cannot say if this trend is even happening. Remember I started this story by asking if IPOs are happening earlier and earlier. Is it true that in the 20th century, most IPOs were of profitable companies, and in the 21st century most IPOs are of unprofitable ones? Or is that simply recency bias at work? I tried and tried but couldn’t find hard numbers on this kind of thing, which is why it took me so long to write this post.

    Either way, if OpenAI does IPO I might toss a few dollars their way. Intellectually I know I probably can’t beat the market, but emotionally it’s fun to pretend I can. And where’s the harm in that?

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  • I don’t normally play ironman games

    I’m not sure if everyone calls it this, but to me “ironman” games are those that don’t let you save and reload whenever you want. 30 years ago these games were the norm because most gaming was done either at arcades (which demanded quarters, so letting you save and reload anywhere hurt their business) or on rather weak computers (which didn’t have the memory for dedicated save slots). But for the most part, “ironman” seemed like a quaint 20th century style of gaming that was thrown own when computers got stronger and arcades died. Recently there’s been a resurgance of games that don’t let you save and reload, not for technical reasons, but for the personal reasons that the devs or power-gamers think it’s “cheating.” I normally don’t play ironman games, my time is worth more than that, but I received For the King as a gift and so decided to give it a go.

    I decided to try For The King single player.  It was going ok, until I tried to fight my first battle 1 level higher than me (level 5 vs my level 4). First turn, the boss enemy confused my whole party.  Confusion rarely “wears off” in this game, so from then on the battle was auto-piloted into a total party kill.   And a total party kill would have been game over, 3 lost lives.

    I don’t like ironman because it heavily discourages experimentation.  I decided to try this fight because my friend had told me that For the King doesn’t have the Divinity 2 problem of “battles at a higher level are impossible.”  And yet the way this battle went heavily teaches the player “never ever fight enemies higher level than you” because I barely scratched the enemies and the entire battle was decided on a single move from the first turn of the boss.

    Of course, I said to hell with that and End-Task’d the game instead of letting it end in defeat.  And since the autosave was right before I tried the battle… I just went and tried again.

    The battle went a hell of a lot better the second time.  The total-party-confuse still happened, but this time it didn’t occur until the enemy’s 3rd turn.  And also one of my characters switched to his gun, fired, and then snapped out of confusion (as I said, a rare occurrence).  I was actually able to reload and fire to kill the enemy myself.

    This single battle teaches the player 2 entirely different lessons based on a single dice roll.  If the confusion comes out first turn, the lesson is “gtfo, high level enemies will kill you.”  If confusion comes out later, the lesson is simply that some enemies are powerful and have party-wide attacks.  In a normal game, the player can reload when killed and try again.  They can  see how the game “really” works, ie “are higher level enemies impossible or was I just unlucky?”  In ironman games, the player cannot learn how the game works in game.  It heavily encourages meta-gaming (looking everything up online) and discourages experimentation.

    When you load up the game, it starts immediately with what feels like a developer having a hissy-fit over people complaining about randomness.  When I loaded the game for the first time, it forced me to accept what was essentially an in-game EULA saying “don’t think you’ll defeat the evil your first try, more powerful heroes than you have tried and failed.”  That same sentence loads up every time you start the game.  It REEKS of a dev being very angry at people complaining about the randomness and lost runs, and so trying to force the players to accept the “correct” way of thinking, ie that the game will happily waste your time with a bad roll. 

    I on the other hand will continue to think my time is far more important than any game.  This is the kind of game I will never buy for myself, I’m a busy man and don’t want to spend hours on a game only to get kicked back to the beginning by a single bad roll.

    But I can still see the appeal.  The systems are quite good, the focus is fun, and I’m loving my little cross-classing that I’ve been able to do.  I got a Goblin Bow in this game and handed it to both my Bard and Scholar at different points because it was stronger than their normal attacks and had pierce.  I handed the Bard a Magic Book weapon later because I hadn’t found good bard weapons and she had decent intelligence.  There’s a lot to like here, but the game would definitely be improved by having a non-ironman game mode.  It doesn’t hurt the ironman people’s fun and lets folks like me enjoy it too. 

  • Crying over Cryo-EM

    OK so the title is hyperbole, but I’ve definitely struggled recently with my cryo-electron microscopy. I guess here I’ll give an overview of what exactly electron microscopy is and why I’ve struggled.

    Professor Jensen of CalTech has a great series of videos on Cryo-EM. Why we use it, how we use it, and what it is. Anyone interested in the technology should watch it, but for my own purposes:

    • Cryo-electron microscopy consists of freezing a sample and then shooting electrons at it to see the 3d structure of it at the smallest atomic scales.
    • We’re using it to study a number of proteins that cause diseases. In particular we want to know how the 3d shape of a certain protein creates that protein’s function. And how that function can then go on to cause a disease.
    • So we purify a specific protein, make a cryo-grid from that purified protein, and then look at that cryo-grid under electron microscopy hoping to get a good 3d structure.

    But that’s where the problems start. First of all, purifying a protein to 99.9% purity is no small feat, especially when you’re taking proteins out of actual patient samples. I’ve dearly struggled to get the required purity that would be needed to make good grids for imaging.

    But once I have some “pure” protein, I need to add it to a grid to image it. A cryo-grid is a 1 millimeter by 1 millimeter circle about 1 micrometer thick. On that grid are cut out many 1 micrometer by 1 micrometer squares. And in each square are a mesh of 100 nanometer by 100 nanometer holes. When I add a tiny drop of my protein sample (which is in water) onto the grid, the hope is that the proteins will settle down into the holes. I will then “blot” the sample by pressing some paper onto both sides of the sample, which wicks away all the water not in the holes. I then instantly plunge the sample into liquid ethane, freezing all the liquid in the holes in an instant.

    What you get is supposed to be a grid covered in a tiny thin layer of ice, and in each hole the ice contains your proteins of interest. Since they were flash frozen in ethane, the ice here is “vitreous,” which means glass-like. It’s see-through just like glass. And so a beam of electrons can pass into the ice to create an image of the proteins inside the ice.

    But there’s problems. Let’s get back to making the grid: most proteins are hydrophilic which means water-loving. The opposite of hydrophilic is hydrophobic which mean water hating, like oil. Oil and water don’t mix, and neither do hydrophobic and hydrophilic things. Our grids are made of copper covered in a layer of carbon, and that stuff is naturally hydrophobic, meaning it doesn’t interact well with the hydrophilic proteins (and the water they are in).

    So before adding proteins we have to glow discharge our grids. This means putting them in a machine that shoots broken-up water molecules at them. Those broken-up water molecules have oxygen in them, and some of them will bind to the grid creating oxygen-containing compounds. Those compounds are very hydrophilic, so the whole grid becomes hydrophilic enough for the proteins to interact with it.

    At some point we got a new glow discharger, and I swear that it started destroying my grids. Like I said the grids are tiny and fragile, 1 millimeter across, 1 micrometer thick! This glow discharger shoots water at them, and the new one shot the water so hard that it was punching through my grids and destroying them completely at the microscopic level. I couldn’t see the damage because it’s microscopic, but after adding the protein to my grids and flash-freezing them, I’d look at them under a microscope and see nothing but a completely destroyed grid. I finally just stopped trusting it completely and moved on to using a new glow discharger that’s a bit weaker.

    So OK I solved the glow discharge problem, but now here comes the ice problem. Like I said above, you want the proteins to be encased in glass-like vitreous ice. If you have no ice, well you have no proteins. And if the ice is too thick, it’s no longer glass-like and you can’t see through it. I kept being on both sides of those extremes, first I had ice so thick I couldn’t see anything, then I had no ice at all. You are supposed to manage this problem by configuring your blotting time, which is how long you wick away the water before plunging the grid into the liquid ethane. Shorter blot time, thicker ice, longer blot time, thinner ice or no ice at all. Try long and short times to get the ice just right.

    And yet I was using ultra-short blot times and still getting thick and thin ice sometimes at random. On the balance I got more grids with no ice at all, so I kept thinking I needed to drop the blot time more and more. My adviser said that there is a minimum blot time of about 2 seconds and you never want to go lower than that, but I tried 2 seconds and the ice was still way to thin or non-existence. That seems to say that my blot time is still too long, yet 2 seconds is as short as I can go.

    I finally asked an expert in the chemistry department who suggested I used their facilities instead. He also suggested that 1 second of blot time is perfectly fine, and so that was what I did. I FINALLY seemed to start getting good grids, so let’s hope it hold out.

    So I’ve struggled with glow discharging, and then blot times, as well as protein purity. I’ve finally got some good grids, and I hope I can collect a lot of data on them. If I do that, I may be able to get 3d structural information using AI and a whole bunch of analysis. We’ll see though, we’ll see.

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  • Shadow boxing the NIMBYs again: luxury vs low income apartments

    Warning, this post is longer than usual.

    NIMBYs will give any excuse to block housing. There’s two examples of this I’d like to discuss, one is the “luxury vs low income” false dichotomy. The other is when NIMBYs try to change the subject and ban corporations or foreigners from owning housing.

    Let’s get one thing clear: affordable market-rate housing is just housing that has been on the market for a while. Houses built in the 80s are affordable now, even if they weren’t affordable when they were built in the 80s. Houses built this year generally aren’t affordable, but will be in 40 years. In economics you’d generally assume that products will be built for every level of customer. For rich customers, expensive products with expensive material are built. And for poor customers, cheap products with cheap material. Housing doesn’t follow this because of a few reasons.

    The first reason is that for the past 50 years, much of the cost of building a house comes simply from getting permission to do so. There is a huge barrier to making housing whether you’re trying to make cheap or expensive housing. Cheap products can usually make up the different by being mass produced, but these barriers to housing (aka zoning etc) excise most of the benefits of mass production. That means there’s no point trying to mass produce houses anymore and make up in quantity, you can only produce quality houses and make up the difference using high prices.

    The other reason that housing doesn’t follow the pattern is because it’s a good that lasts so long. Food is gone very quickly, whether it’s expensive or cheap. But an expensive or cheap house can last a hell of a long time with regular repair. Of course it slowly degrades, but that just means an expensive house slowly becomes a cheap house as its value on the market declines (or this is what you’d expect to happen, but if housing supply is constricted, price remains elevated). So again, a developer isn’t incentivized to mass produce cheap housing because anything built more than a decade ago has already become cheap housing, a developer of cheap housing is thus competing with the entire city’s housing stock.

    For those two reasons, developers like to build “luxury” housing, including condos and apartments. Whenever these things are built, certain NIMBYs come out of the woodwork to protest the housing using vaguely left-of-center vocabulary. They’ll say things like “these expensive apartments are only for rich people! That won’t help the housing crisis for poor people!” Then they try to stop development with their economic illiteracy.

    Those NIMBY arguments are just plain wrong. ANY increase in housing supply will lower the cost of housing in the market, even if it’s luxury housing being built. If this luxury housing isn’t built, then the rich people are forced to compete with the middle class people for the middle-income housing. The rich can afford to spend more, and so they drive up the cost of middle-income housing. If instead the luxury housing gets built, then the rich are spending their money on that, so there’s less demand for middle-income housing. Now more middle class people can afford middle-income housing, so they don’t have to compete with poor people for cheap housing. All this means lower prices for the middle class and the poor as less people are competing for the same amount of housing, and it happened because the rich were able to move in to those new luxury units.

    So stop protesting luxury apartments, they lower the cost of housing just as much as cheap affordable apartments. And in 40 years those luxury apartments will have worn down a bit and will now become affordable so anyone can move into them.

    The other thing I’d like to hit out against is people trying to ban foreigners and corporations from owning homes. Canada recently enacted a ban on foreign home buyers, and I have two problems with this. One: it will not do anything for affordability, foreigners make up a tiny percentage of Canadian home buyers. Number 2 ties into the ban on corporations, so let me discuss that.

    There’s a knee jerk reaction by some that corporations and investors are at fault for driving up the price of houses. But corporations don’t live in houses, people do. A corporation only buys a house because they think they can make back their money by selling or renting it to another person. This implicitly requires that corporations think the value of houses will continue to go up, and monumentally so, otherwise they’d lose money on this transaction. So are you angry at corporations buying houses? Then the solution is to build more houses so the market is flooded and the corporations lose out on their investment.

    The second part of this knee-jerk is an economically illiterate idea that corporations are just vampires sucking value out of the economy. If only we banned corporations, then all the prices would go down due to less competition and there’d be no downsides whatsoever. But if you think about it economically you’d realize that corporations are providing a form of service by being in the housing market: they are providing liquidity to the housing market.

    Liquidity is most well-studied in places like the stock market. A lack of liquidity can lead to wild swings in prices, both up and down, and is generally regarded as a bad thing for the market as it hurts both buyers and sellers. When you want to buy shares of stock, you don’t need to match yourself to a single individual who wants to sell the same number of shares you want to buy, at the same price you want to buy them at. Instead, market makers create the liquidity by buying and selling lots of stocks. The market makers don’t want to hold any stocks for long, they just want to buy and sell them.

    When I buy a stock, the market maker is immediately able to get it for me, as much as I want, and at the market price. When I sell a stock, the market maker immediately takes it, and again they take as much as I give them, at the market price. I don’t have to find an individual buyer and seller, everything can happen through a single market maker who is interacting with not only me but every other buyer and seller in the market. This is actually much more efficient than if every buyer and seller had to go out and find someone to trade with, we all just go to a single person, the market maker, and get the market price from them.

    The market makers are in turn taking on a lot of risk, and using a lot of stats and technology to mitigate that risk. When I sell them some Apple stock, they are willing to buy it immediately on the assumption that somewhere out there someone will buy it from them for more. They take a small cut, usually a cent or so per share, which helps hedge against falling prices in the few milliseconds it takes them to find a new buyer. But there’s a risk that if Apple stock falls fast, they’d be left holding my stock which is now worth less than I sold it to them for. But market makers are large and invest in a lot of technology and statistics to be able to take on that risk.

    But now imagine there were no market makers, the stock market would have a lot less liquidity. Any time I wanted to sell Apple stock, I’d need to find an individual who was a willing buyer. But if the price of Apple is falling fast, investors will get skittish, they’ll be worried about getting caught out, and most of them won’t have statistics and technology that the current market makers have. Thus they may not be willing to buy from me, thus I’ll have to lower my price even more to find a buyer, but that makes the price of the stock fall even faster, meaning that investors get even more skittish and even less willing to buy…

    This is what’s called a liquidity crisis, it can happen to stocks moving both up and down. Lack of liquidity leads to wild swings in prices which hurt both buyers and sellers and generally mean people lose more money from the market than if it were liquid. But these days liquidity is generally smoothed out by the market makers. For all that conspiracy theorists hate them, the market makers are why buying and selling stock is so seamless, easy, and reliable these days. Large price movements are smoothed out by liquidity, and any buyer can find a seller and vice versa so people can enter and exist the market whenever they wish.

    Now let’s say for a moment that corporations are prevented from buying any housing. Let’s even take the more radical proposal I’ve seen that says no one should be allowed to own more than 1 house. And let’s see the results this would have on the housing market. Spoiler alert: a lack of liquidity in the housing market would hurt both buyers and sellers.

    So when you want to sell a house, you have to find a buyer. In our theoretical “no corporations, 1 house per person” market, you’d need to find someone who actually wanted to live there. Someone who wants to live exactly in your area and in your house. If your house is a fixer-upper, you need to find someone who is willing to buy and fix a house. The need to find someone willing to immediately live in your house, right now severely limits your potential pool of buyers. Maybe people just don’t want to fix a house these days, so even thought the repairs aren’t that bad, you’d now have to either do them yourself or lower your price by a lot in order to find a buyer.

    Now when corporations are allowed to buy homes you can find a buyer immediately. The corporations then takes on the risk of finding people to buy the house, they take the cost of showing buyers around, of fixing up the house if need be, of advertising it, etc. Corporations are providing liquidity to the housing market, which prevents giant movements in price. Someone who needs to sell their house in a hurry might otherwise be forced to cut the price 20%, 30%, 50% if they just can’t find a buyer within a month or two. But a corporation can buy the house at its full price and can then afford to sit on it for a few months waiting for a new buyers to come along. So people selling their house get the best price possible because corporations are providing liquidity.

    If you want to buy a house, you also have to find a seller. Most houses aren’t for sale at any one time. But it would be a nightmare without corporations because then you would actually have to find someone who is actively moving out of their current house. Very few houses are being built (thanks again, NIMBYs), so any house you want to buy will be pre-owned. And remember we’ve banned corporations and multiple home owners, so that house isn’t being kept empty, it’s lived in. That then means that you have to move in at precisely the time they want to move out, otherwise either you’ll be caught homeless for a time or they’ll run afoul of the law because they’ll own more than 1 house at a time. It would be difficult, maddening even to line up your schedules.

    This maddening scenario is exactly what’s going on in Britain right now. The British housing market is extremely illiquid not because there are corporations but just because there is an extreme shortage of houses period. The UK has the largest housing shortage of any member of the G7 or G20, meaning that there’s basically no houses anywhere sitting empty. In America, about 9% of homes aren’t currently lived in. Some are dilapidated, but some are just being held while buyers and sellers find a price. In the UK, that number is around 3%, and again many of those are dilapidated and unlivable.

    The lack of empty homes in the UK means that anyone looking to move in must first wait for the owners to move out. Of course no one wants to be left homeless, and no one wants to own two homes at once and be forced to pay taxes on both, so Britain has an insane system found no where else in the world called “chains.” In a chain, every property sale has to execute at exactly the same time so that multiple people can all move into/out of houses at the same time. These chains can have over a dozen links, and so of course you can imaging getting a dozen families to all agree on a move date is a nightmare. This system is basically completely unique to Britain, I haven’t heard of it anywhere else, and it is all due to a lack of liquidity in the market, although here brought on by comical undersupply and not the banning of liquidity-assisting corporations.

    The chain system is an absolute mess, you can search social media for the horror stories of people losing jobs because move-ins were delayed, or losing money because they had to expedite a move-out. Nothing works the way it is supposed to because the market is so illiquid, and everyone in the British housing market is tangibly worse of because of it. And that’s exactly what we’d get if no one were allowed to own a home they didn’t actively live in.

    Corporations and home investors, foreign or native supply liquidity to the housing market, they do not make house prices go up. House prices go up because there is a lack of housing supply. If you’re tired of corporations owning homes and want to force them to lose money, then you should demand your city allow anyone and everyone to build a house on any plot of land that they own. Yes even your neighbor. If your neighbor wants to subdivide his house to build a duplex, let them. If they want to sell to a builder who will demolish the house and build an apartment block, let them. If some developer wants to buy the vacant lot across the street to build condos, let them. If a big developer wants to buy the convenience store down the street and build a 5-over-1, let them. Only by having more housing in everyone’s back yard will the cost of housing go down.

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  • Why is it every time I sit down to write, I suddenly can’t write?

    I am unfortunately not writing a real post today, rather a post about what I wish I were writing about. Every time I sit down to write anything these days I get bad writer’s block and so I end up not writing or banging out something really mediocre. But I want to write down some of the topics I’d like to write and hope to write about soon as a way to remember them and push me to write about them.

    So I’d like to write some posts about the following:

    My work using HuggingFace and some other tools to try to fine-tune a large-language model (LLM). I hope one day to get an LLM that can read earnings statements for me and parse out anything interesting. I would go through step by step what I did, and maybe also have a separate post for all the things that really annoyed me (no one would tell me how to make a dataset!)

    “Shadow Boxing NIMBYs again” where I talk about why NIMBYism and zoning are bad. This post would in part take in the idea of “people should be allowed to build things on their property,” which is surprisingly controversial. Also tearing about common NIMBY arguments about how corporations and foreigners owning homes are the “real” problem rather than the simple fact that there aren’t enough homes. Also would talk about the insanity of the British “chains” system.

    My recent successes and failures in cryo-EM, including the glow discharger destroying my grids and how my ice has been misbehaving. Also the fact that 2 similar samples are acting in completely opposite ways.

  • Building on the green belt

    Kier Starmer wants to build houses on the green belt. For those of you who don’t know, the “green belt” is an area around some English cities where house-building is heavily restricted. It’s name conjures images of pristine creeks and primeval forests, land that has been protected since the dawn of time and must remain so. But nothing could be further from the trust, most of the green belt is monoculture farms and car parks. The only thing “green” about it is the branding. Which is exactly why the Green Party and other self-proclaimed “environmental” groups are so heavily opposed to Kier Starmer’s plan.

    In far too many cases, I’ve seen that “Green” and “Environmental” groups are really just NIMBYs. High rise development is far more efficient than spread out housing, but green groups in my city are opposed to it. The German Greens are famously anti-nuclear, but pro-coal; or rather national Greens are fine with coal away from them but local Greens hate coal in their backyard. And in California, CEQA and other environmental regulation has destroyed the state’s ability to build nearly anything. The state has decided to little by little allow special carve-outs to CEQA for projects of dire need (or good kickbacks) but has still refused to just scrap CEQA for good.

    But to bring it back to housing, I think the utter lack of housing in most of the Western world is a damn crime, and the entrenched groups opposed to housing must be fought at every turn.

    Just take the Green Belt, a quick search of social media shows that many self-proclaimed leftists are up in arms about it. But what is so wrong with a car park being replaced by houses? And the Tories are against it as well, but why should a supposed party of free market economics forbid people from building what they want on their property? If I want to turn my house into an apartment block, why should Big Government forbid me?

    The reason is of course NIMBYs, and there’s an entire Maginot Line of mottes and baileys that the NIMBYs have constructed to defend their arguments and their property values. The most baffling is their claim that more supply doesn’t lower prices. In fact some go so far as to claim that a new apartment will raise housing prices in the area through some mechanism heretofore unknown to economics. But think for even half a second: when there was a shortage of eggs just this year, what happened? The price of eggs rose, yes? And when the egg shortage was alleviated by more production, then what happened? The price fell, just as supply and demand says it will. When there is more of stuff, prices go down.

    If a brand new high-priced apartment gets built, then a rich lawyer and family can move out of his luxury apartment from the 90s which is sort of grotty after 30 years of use. Now a young couple can move into that apartment from the 90s, moving out of their tiny apartment in the suburbs. And now someone who was homeless or living with family can move into the tiny apartment vacated by the couple. New housing, even ultra-expensive luxury housing, lowers the price of all housing as people move into it and move out of where they currently are.

    Another NIMBY motte is the demand that instead of building new houses, we should implement a policy that is utterly useless. Usually they demand that we should have rent control, or forbid foreigners from owning houses, or forbid corporations from owning them. Absolutely none of these things help in the slightest, in fact rent control is actively harmful. Yet NIMBYs will claim we should never ever build a single new home until these useless policies are implemented.

    I saw a truly mask-off moment on social media when talking about Boulder Colorado. I wasn’t aware, but Boulder is one of the most unaffordable cities in America. And on a news story talking about such, the response from Boulder residents was clear: “you don’t have a right to live in Boulder, if it’s too expensive then get richer or leave. We don’t want more houses or apartments because it would change the character of Boulder.” You could very easily see George Wallace saying the same thing.

    At the end of the day, NIMBYs think that they, personally, should be immune to market or government forces. Their neighbor should not be allowed to build a bigger house on his land because it would affect them personally. And the government should not be allowed to build houses either because again it would affect them personally. NIMBYism is a blight upon capitalism and a war against the poor. I think anyone on the Left, Right, or Center should oppose it.

    So god-speed Starmer, and please build 10 million houses on the green belt you beautiful centrist bastard you.

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