In this issue:
Signaling Meets Path-Dependence
A Benchmark to Judge “Capitalism”
Encouraging Multinational Monopolies
Self-Fulfilling Black Swans
Individuality As A Double-Edged Sword
On Private Security
Climate Change As A Time-Sensitivity Problem
Signaling Meets Path-Dependence
So Byrne Hobart has a great piece on the inefficiencies of the IPO process. He makes the point that a "conventional path" has been well-established (A->B->C). And because so many financial decisions act as signals (of value) to potential buyers, they scrutinize the specifics -- the how/when/why -- of a given company's IPO process.
"Once a conventional path has been established, it's ODD to deviate" (E.g. D, Q, K pop into the process). EVEN IF THERE ARE GOOD REASONS FOR the deviation, potential buyers get suspicious and lower their WTP and/or p(P). That's an inefficiency. (Dollar bills get left on the sidewalk JUST because the bill-producer's path is "unconventional"). In this view, informal rules constrain variation -- many companies don't seek out alternative/unique/unconventional financing paths that would make more sense for their specific needs.
Now many investors may respond and be like "Hey, if a signal's correct 90% of the time, and I don't have that much time / there are other similar alternatives to bet on my version of the future...I'm going to trust the imperfect signal/approximation and not do further research." This makes sense; at a certain point, there are diminishing returns to gathering more information (see: The Irrational Voter Theorem) -- especially for those with alternatives / buying power.
These diminishing returns are compounded by the fact that many investors are not betting so much on underlying value ("fundamentals") as much as what OTHER INVESTORS THINK. For purely "I'm going to ride a SR wave up and then sell" bets, investors do not need to really understand unconventional or edge case fundamentals; they just need to understand how MOST investors evaluate businesses (what formulas they use, etc).
Both effects may shed light on WHICH TYPE of financial analysts we should trust most to understand underlying value and/or "the future" ("Skin in the Game" suggests we should trust financial analysts more than journalists because, unlike journalists, they lose money if their prediction is wrong -- maybe we should trust analysts with long-time horizons the most because LR/locked-in positions are most likely to reflect fundamentals (???). But aren't LR investors LESS motivated to research because they are (a) less sensitive to SR/MR fluctuations of any type (fundamental or speculative) and/or (b) more likely to be earning gains from diversification / general ability to hold through tough times(??). I'm envisioning LR investors as a bunch of rich, fat cats who are not ruthless about perfecting/fine-tuning their bets, but that could be completely based in prejudice, not reality (help me out, APMA major friends!).
Also APMA friends -- help me answer this bigger picture question -- will increasingly diverse methods of financing (SPACs, etc) align bets more with underlying value??? I'm envisioning an unconventionally-financed company having (a) less investors, but (b) the investors who are in are all-in (in the sense that they've really analyzed and agree with the underlying economics of the business). If this is true, then the bets reflect real-world value, so the more unconventional the bet --> the better the signal?
OR will these unconventional methods serve primarily as a vehicle for investors to make speculative bets (I.e. bets that primarily reflect what other investors will do in the short-term)??? Maybe this sort of speculation is a function of where financial journalists shift their attention (do they, indirectly, have market-making power)?? I'm pretty sure SPACs have been thoroughly covered though (don't the vast majority of non-retail investors real Matt Levine?), so maybe SPACS previously were a source of speculation, but now the buzz (and attention) has faded(??).
I'm speaking way of my field, but it seems like these answers are super important to flesh out the "Skin in the Game" theory in practice. Specifically, where is the best research being done -- which types of analyst are zooming in past rough signals/approximations (usually only valid in the SR) -- and evaluating underlying fundamentals most rigorously. Who has the RIGHT TYPE of skin in the game???? How is the answer to that question affected by shifting forms of financing (E.g. SPACs)?
For anyone looking for a side-project, I would love to pinpoint how "the best research" has shifted over the last 250 years of investment. Because we have actual data on the actual SR/MR/LR returns, we can identify what analysts were most accurate (and get more specific about the variables correlated with accuracy).
These answers also seem important to answer the broader question about where investment money is flowing globally and why!! I'm highly-educated by most cultural/historical standards, and I have no idea what the global breakdown of investment looks like -- I've never seen a SR/MR/LR pie graph, or a "motivated by fundamentals vs motivated by what other investors think" pie graph, or a "VC/PE/IB/Asset Management/Retail Investor" pie graph. How these pie graphs are changing over time seems important!!
A Benchmark to Judge "Capitalism"
Elon Musk has a good take -- most CEOs should focus more on product-improvement than product-commercialization (the distribution/organization/corporate restructuring/financial engineering that sucks the maximal amount of value out of existing products) than they are certain doing. Instead of treating the quality of product as relatively fixed, they should be endlessly iterating and building "new" things -- not "new" ways of extracting profits from the product. Team Musk for the win. Unfortunately, all the incentives point towards the (personal) ROI of the later beating the former (at least in the SR/MR). In the aggregate, most global investment money is flowing towards the later and not the former (???) (!!!). Not great, right? I'm really not sure.
Let's break down the common process. A scientist/inventor/engineer comes up with a product, and then a bunch of business people/MBAs/investor types jump on it -- to "turn the idea into a business," they set up an organization to sustainably manufacture, promote, and distribute the product. The organization is most commonly structured to let the majority of value being created being "captured" by the business people. I'm watching this happen right now at the startup I'm working at -- ovrhealth.com -- ever since investors got involved, leadership has been strictly focused on commercialization (we are pretty much assuming the product is solid -- sad).
In a sense, this business analysis IS necessary for the initial "innovation" to actually end up adding value to people's lives (at scale). Every purchase does add value to the consumer -- and the only way to add a tiny bit of value to a million users is to (a) have investors, which means (b) doing the business/product-market-fit work in Excel/Powerpoint. Arguably, without those business people, the idea stays in the garage and doesn't improve people's lives.
We should always think in counterfactuals, though -- and not just two. Imagine 5 different possible futures for a given product. 1) stays in garage, 2) small scale, some value captured by investors, 3) large scale, some value captured by investors, 4) small scale, most value captured by investors, 5) large scale, most value captured by investors.
At a society level, most people would choose 3. The only reason to prefer small scale is if the product is net-harmful to the consumer (E.g. potato chips, cigarettes, social media) (I'd argue most are -- but that's a hot-take -- a later post should explore what a purely labor-maximizing / not product-maximizing economy would look like). The only reason to prefer 5 is if you're pro-investor because you're convinced they re-invest most of their profits in more businesses (vs every-day people spending the $ on non-ROI food/drinks/rent -- you can think of it as net-negative-ROI if you incorporate the opportunity cost).
Let's say, for the same of argument, we want to build a society that encourages 3 (in most cases). Well fuck, actually, this has been true (for most of recent history) because product-production/distribution has been labor-intensive (Arguably, we want a labor-intensive society). This correlation is less and less true (at least for many "new" products). For tech at least, (which is affecting every industry, inevitably), product-production/distribution is decreasingly labor-intensive. See: The Rise of The Intangible Economy for a more nuanced analysis. The jobs-created-per-investment $ function is increasingly sus.
Is there a better alternative than 3, though? Arguably (my hottest take so far), 1 is preferable -- if you assume most products are net-negative-impact -- aka the "consumerism is destroying community-oriented society" take -- one I generally agree with. To strongly argue this, however, you have to believe (and act on!) the whole "people don't know what they want" thing. I come from a "discipling desire/consumption" religious background, so I'm all for it (personally). I do think that people look to others (primarily) to figure out their wants/needs. No one is born knowing all the things they want to buy / fill their life up with. And if we're going to look to others to figure out what will make us happy (fixed), I prefer the church's "products won't make you happy in the LR, prioritize people/reflection" take to the advertisers' "do whatever makes you happy in the SR! you deserve it! love yourself and others! by buying product x/y/z!" In general, we should be critical of self-serving arguments (and they're making up an increasing share of our information diet!! Sus!).
There's clearly some products that are net-positive, though. Let's choose 3 as our goal. Is it possible? Investors might argue no, it's not possible to achieve scale without heavy investor involvement. At the very least, heavy investor involvement raises the probability of scale. So for most of the distribution, 3 is not possible -- but for some, it is! And it's near-impossible to estimate which businesses will succeed, when everyone's at an early stage, without investors. Wait, also, 3 still fucks over consumers (E.g. Zuck controls 51% of the company, but captured the excess value for himself -- he didn't just hand over his producer surplus to consumers). The skeptic would say, whether controlled by the founding team or investors, the producer surplus function is what's being optimized (meaning the small sliver of consume surplus is all the consumer gets in any scenario). There is a distribution however -- not everything is 100% maximizing the producer surplus function -- so it's worth considering what variables correlate with different parts of the distribution:
E.g. Society A has investment flowing towards projects that tend to be closer to producer-surplus-optimized end of the distribution.
Society B has investment flowing towards projects that are not as producer-surplus-optimizable. The bigger picture insight here -- the producer-surplus-optimizability of a given product is largely driven by how much the a) quality, b) distribution/promotion, and c) price can be discriminated. Data/technology is generally increasing the producer-surplus-optimizability of new and existing businesses. I'm not saying this is terrible, but it does help explain the recent "global wealth concentration" thing.
In practice, the degree of producer-surplus optimization maps to different stages in the life cycle of a given business. At the beginning (without perfect price discrimination, for example), consumers capture a higher % of the value created. Towards the end of the life cycle, the company has been rolled up into private equity scheme that extracts all possible profits (to investors) before dumping the company to die.
In 2021, investors are watering plants with high producer-surplus-optimizability -- projects that especially utilize data or technology to price/quality discriminate. This is where the vast majority of global investment money flows (!!!) -- into private equity/commercialization projects or new apps/SaS projects. That can't be good (at least compared to the counterfactual!).
If I was a global president who could wave a wand and direct global investment to the projects that helped the most people per investment $, I'd be most focused on projects that sustainably give people around the world access to food/water/sanitary-safe- shelter/basic healthcare. 40% of the world does not have soap at home(!!!). Every case study tells us sustainable/LR change comes from investment dollars, not government/nonprofit work (said work competes with investment for SR impact, but not LR). If the global elite want to make the biggest positive (global!) change possible, we should (probably) be extremely critical about where we are investing our dollars. Arguably, we should should judge our current investment portfolio compared to this benchmark -- a portfolio of projects that help the most people (with the greatest needs -- food/water/sanitation/healthcare) per dollar of investment.
Encouraging Multinational Monopolies
So, following the Musk product-improvement argument, as a society we want to push more investment dollars towards projects that are higher % value-creating (new products!) vs % value-extracting (from existing products). Every project has a breakdown of both activities -- the question should be, for any investment dollar, how many cents are going towards product-creation (E.g. salaries for engineers) vs cents towards product-commercialization (E.g. salaries for salespeople, SEO optimizers, etc).
Dollars towards most "mature" companies (E.g. S&P 500) have a inferior ratio vs dollars put towards creating new products (at least for societal well-being ??). Maybe there's a gray area between extraction and creation --- distribution? There's definitely value, at the societal level, to copying and pasting great products in other markets (particularly, markets in developing countries). All infrastructure/shelter-building investment dollars would fall in this category. Arguably, (another hot take), all innovation/product-creation should stop, and all investment dollars should be put towards projects that distribute (existing!) technology, infrastructure, healthcare, food, water, sanitation, etc to the 40% of the world that doesn't have soap at home. That's probably what a global president would do to maximize global welfare -- given (a) the absurd 100x (what $20 means to Peter Deegan vs what $20 means to a struggling family in a developing country) effect and (b) the wealth/consumerism-depression/anxiety correlation (at the tipping point of wealth that decreases community-oriented-behavior investment).
But for the sake of argument (and realism), let's assume the options are extraction or creation (purely distribution is, in practice, de-prioritized unless it's coupled with an opportunity for more extraction per-unit). We want to push more money towards creative projects vs extractive projects. There's even a way to romanticize this for my most skeptical friends -- imagine, the old days, where a neighbor of yours would go around raising money for their business idea. That would be modern-day VC -- except VC have (rationally) restricted their projects to potential 7x+ ROIs. How do you get that type of return? TLDR; use technology instead of people to create leverage. See: Naval on leverage being so important that it (rationally) drowns out all other considerations. Fuck, now I'm thinking society should push more investment dollars to the S&P 500 than VC (???). The tradeoff is more-cents on the dollar going towards product-commercialization (~extraction) in exchange for, on average, more labor-intensive and more physical (vs virtual) projects. (The Muskian argument for prioritizing physical-product-improvement is that virtual (E.g. SaS) projects most commonly find ways to (a) price/quality discriminate using data from customers and/or (b) reduce transition/logistic cost (with economies of scale, think Amazon). Rarely do virtual projects improve physical products or physical end-user experiences.
So, there's a decent argument for pushing more global investment to the physical-product-improvement that happens in F500 companies. A global president would probably select a subset of projects within a subset of the F500 (flagging dollars for specific use cases -- E.g. Big Soap developing low-cost, shittier soap bars for people in developing countries #qualitydiscrimination). If we can find ways to make this intentional/flagged investment scalable, that'd be great. The closest thing I can think of is more people funneling their life savings to Gate Ventures, a technology investment firm that exclusively invests in projects delivering basic healthcare/food/water/sanitation to people in developing countries. Infrastructure investors (Jim Kim, PE) also come to mind -- though I'm sure they have a target goal (for each round) -- i.e. there's probably an upper bound (??). Actually, economists regularly agree that global infrastructure spending is suboptimal (??). Maybe this is because governments are the main buyers -- in rich countries, new roads do not inspire votes (vs 5 issues more important to voters; blame media incentives that have shifted the spotlight to national - vs local - government) -- in poor countries, governments are too poor to build roads because (a) brain drain keeps the tax base poor and (b) their economies/currencies are increasingly out of government control (see: currency speculation, dollarization, and hedge funds), which means governments increasingly cannot credibly commit to paying foreign infrastructure builders back on time.
Here's two big things that frustrate that story.
(1) Even if we manage to build drastically more infrastructure in poor countries, we'll look back in 200 years and realize it would have been wayyyy more efficient to just let people move to places with good infrastructure (physical or institutional) already set up. By insisting on borders and aid (see: us throwing money over our walls, to people who are knocking on the door, not asking for money), we are actively swimming against the current. Future economists -- someone model the scale of this inefficiency!!
(2) Those awesome healthcare/food/water/sanitation startups Gates Ventures is funding? Most of them will lose to Big Soap in the LR. E.g. my former social venture, Eco-Soap Bank, had a brilliant plan to redistribute unused hotel soap (~5M bars thrown away every day!) to people who needed it. Solid, in theory, in the SR. But they're already! getting outcompeted by Big Soap, who has developed an ever cheaper cost-per-unit version of shitty, recycled soap. Multinational companies have the logistic muscles (from economies of scale) to #qualitydiscriminate efficiently, at scale. Quality discrimination is the LR solution to many food/water/sanitation problem sets.
Let's summarize with a global president policy agenda (just for fun!).
(1) A management theory ideological shift towards quality discrimination (at a global level). The prerequisite here is more malleable/adjustable supply chains and factories that can produce not 5 versions of a soap bar, but 15.
(2) Another prerequisite = sufficiently low-cost distribution (per unit) so Big Soap can still extract similar margins (and profits) vs its other soap lines. Distribution is a function of warehouses (when will Amazon go global??), infrastructure (our best bet, China?), and executives who are not scared/frazzled by having to translate documents to different languages/currencies.
(3) A rich-consumer-driven movement to support quality discrimination. If there's a significant enough PR boost, Big Soap can stomach lower margins (and profits) because U.S. consumers will spend so much more on the high-quality soap. This is probably the most realistic/likely shift, but investors may (rationally) think it's temporary and not restructure whole supply chains and factories to achieve a SR PR goal. They also might invest in cheaper PR moves uncorrelated with the number of soap bars actually sold on the ground (think BLM branding without actual investment in black-communities). Not great. Also, domestic attempts at altruism have historically swamped global attempts at altruism (an input into the function is national media incentives), so U.S. corporate PR efforts will probably be prioritized above global PR efforts. Not great pt. 2.
(4) Tax incentives for U.S. companies to expand into foreign markets. Multinational corporations should be encouraged, not punished by the tax code (insofar as the quality discriminate in emerging markets).
Self-Fulfilling Black Swans
There's an iceberg (visibility) bias with everything. For every measurable/observable subset of a phenomenon, there's a less visible subset (commonly, because data paths are well-trodden/easily navigable #pathdependence, and new paths are generally trodden by following profits -- which drastically skews what data is collected, at what frequency). A good rule of thumb is data will be professionally collected/cleaned to the extent that is is monetizable.
Black swan risks are no exception to this iceberg bias (I would say effect, but the visibility, or lack therefore of, PREDICTABLY leans in certain directions). Which are most visible and why? What part of the distribution is visible? Hobart:
Finance provides a bigger sample size for black swan risks than other domains, because so many of them are self-fulfilling: a crash that causes cascading margin calls can quickly move outside the bounds of a normal distribution. But the general phenomenon of extreme downside risk is everywhere.
Here's the thing -- non-finance black swan risks are often NOT self-fulfilling. As an individual, if I become aware of black swan risks to my personal life (E.g. this or that personal disaster happening; generally we're talking about extremely low-probability, but high magnitude events), I can take preventative steps to mitigate the magnitude in the case that the event happens. Black swans are not self-fulling, they are self-awareness-->fading.
There's a spectrum from the individual to finance. The key variable on the x axis is # of people involved (n). As more and more people become involved in a group situation, more and more opportunities for exploiting relative price differences arise. (Black swan risks increasingly have the potential to be self-fulfilling). As you increase n, there are more and more opportunities to bet (and exploit informational asymmetries) with other people in the group. Add in drastically different payouts for different members of the group (some people will actually gain) and you decrease the probability the group takes preventative steps. Especially when group members are constantly distracted by higher-probability, lower-cost events.
Globally/culturally/societally, we are moving along the spectrum (towards the finance end). N is increasing for more and more actions. Groups are solving more and more problems. Individuals are (rationally) outsourcing tasks to groups (especially when they pay a disproportionately low share of the total cost; see: governments).
This complexity is increasing the range of possible outcomes (for everything!) (see: The Game Is Getting More Complex). Coordination/economies of scale generally drive costs down (see: wealth, generally wild/exponential growth in benefits, even for us consumers -- not just investors! wild --> think about the rate their gains must be growing). But possible Black Swans also increase!! I.e. Massive increases in coordination means massive increases in possible coordination failures. See: Texas.
That coordination failure was not possible when everyone lived in self-sufficient, small-town, farming communities. There was no state-wide power grid, consistent heating, or running water, etc. In 2021, because everyone's equipped with these modern amenities, they expected a drastic change in standard of living (altitude) overnight. This change in altitude was not possible in less-coordinated times. People had less to lose.
The underrated downside to (institutional <-> physical) infrastructure/coordination is massive anxiety about losing the modern conveniences you now have. The incentives of mass media actively discourage accurate risk assessment of risk. This creates huge distortions in attention, so we're almost ALWAYS surprised when black swans hit. I'm not sure what the antidote is, but consuming more rationalist (E.g. LessWrong) blogs and less CNN/NYT would probably help.
In addition to the anxiety, there's the actual movement from one altitude to another. That's real, and increasing. Picture the isolated/self-sufficient small-town farming community -- there's only so much altitude shift your life will realistically take. Outliers are less common AND less magnitude. Fast forward to 2021 -- coordination/institutions (E.g. cities) have created so many potential drastically good (and drastically bad) things that could happen in life. The altitude changes are still rare, but huge -- E.g. losing your job. That was just not something that really happened when everyone was farming. You farmed, and you farmed some more. And if you didn't farm, you didn't eat. There was no opportunity for debate about who should work / how long people should work (democracy <-> variation/specialization of labor), because if people stopped working, people died from no food. Cue: low-cost social norms that kept everyone in line, not questioning things (religion, patriarchy, etc).
In 2021, we are constantly questioning things (which has pros and cons, one major con being increasing anxiety). And we're moving more (up/down altitude) in perception and reality. Both effects contribute to increasing anxiety about life.
Individuality As A Double-Edged Sword
In philosophy class, we were discussing the definition of "idle." Apparently the word has religious roots; it means "totally open to the world." I.e. Killing the ego and totally grasping the world as it is (#mindfulness). HOWEVER, the religious Iowan in me is like "wait, TOTALLY open? Shouldn't we restrict SOME desires?"
There's a tradeoff (we can't have it all, contrary to the most recent rhetoric, brought to you by advertisers!).
I can be 100% mindful and grasp the world as it is (never exploring more than the physical dimension of the world, for example) (the minute I start trying to "accept the social dimension of the world as it is," I have to start adopting some group's theory/model -- that group will limit the extent to which I can be "totally open" to the world (as the social dimension is full of contradictions/ambiguities). But I can still be pretty mindful, so long as I'm complacent/content with the current world (with all of is suffering and joy).
Or, I can anxiously move through life with my GOALS for CHANGING THINGS (which require imagination of different possible worlds #unmindful). The more time I spend in hypothetical/phantasmagorical versions of the world, the less time I spend in the real world "as it is." As my professor says,
The minute you have a purpose...it's YOU making the world.
You start with a category. Solving problems requires narrowing in on a subset of the world "as it is." The best analogy I have for this is LISTENING. There's a meditative style of listening where you just listen to everything completely, without focusing in on a specific sound or object. That's evolutionarily fucked -- the more you're "totally open to the world," the less you're focused in on potential threats.
There are clear benefits to narrowing one's focus, in SOME aspects of life. But it's best to (a) realize when you're doing it and (b) have defined start/end points. This is the motivating ethos behind Digital Minimalism and Overcoming Bias. Both do not require any specific prescription; rather, they focus on being intentional with your process/information diet, etc (because if you're NOT, profit-driven algorithms will decide FOR you).
There are also clear benefits to outsourcing information-gathering to (a) algorithms or (b) groups, in SOME aspects of life. Again, the point is to be intentional when and why we decide to use these tools to further our understanding of the world. If not, the best advertisers win.
The important thing is to focus exclusively and intentionally on information-gathering. You want groups (like algorithms) to be a tool, rather than a self-esteem-definer. Why the drastic take? Naval:
Groups are also increasingly malleable (see: the winds of profit-driven messages, which make up a growing share of most information diets). I.e. The "group loyalty pledge" (every group has one!) could flip drastically depending on what's politically-acceptable (to a powerful-enough subset of the group). You do not want to anchor your self-esteem to a group that require you to believe this or that thing. Diversification is key.
On Private Security
Everyone hates people with authority abusing that authority for personal gain. From the mall-cop asserting his dominance to trouble-making teens to police officers sexually harassing women. It's 1000% fucked up (just did the math) and society should be way more focused on de-incentivizing bad behavior.
In the prisoners' dilemma, we want private actors to NATURALLY extend the time horizon (the more actors realize it's a LR relationship, they less they defect and the more they can
When there are no gains from cooperation, long time horizons protect bad actors (E.g. police unions protecting the police officer who just harassed your cousin -- hopefully a hypothetical).
If your cousin's harassed by a PUBLIC police officer, you could call the police to report a crime. The odds of (a) the police arresting their peer, (b) the prosecutor charging the police officer with a crime, and (c) the court awarding you damages is incredibly low. You TECHNICALLY have recourse, but in the majority of cases, nothing will happen. Calling that a "just" system doesn't seem right.
If your cousin's harassed by a PRIVATE security guard, you could sue the private security company. In this case, because the court is more of an "independent 3rd party," the probability of recovering damages is still low (without expensive lawyers), but significantly higher than the first scenario. The secondary (root cause) effect is more significant -- the private security COMPANY has every incentive to minimize instances of harassment (in a way that the government doesn't).
The private security company is (a) more incentivized to cut off the problem at its origin and (b) more able to arbitrarily re-design its formal and informal rules to minimize instances of harm, than the government. Note: This is strictly theoretical -- I don't know how the empirics match up (there's a lot of assumptions that need to be true).
Does it follow that more events should be covered by higher-quality / more-expensive / lower-harassment-frequency private security companies (vs the government)? Not necessarily. There will obviously be a distribution of quality, and it will correlate with price-of-service -- leaving poorer events/people with shittier quality service. One could argue this will happen either way, and right now the public police is the shittiest part of the distribution. I'm not sure what the solution is -- and it's an incredibly important question to get right. The shakiest assumption is that powerful private companies will be scared by the average person's ability to scrap together a lawsuit. Especially in low-resourced populations (E.g. prisons), I'm skeptical.
My professor says there will be a predictable amount of abuse in either scenario:
There is no world without the opportunity for abuse. The question is which one has (a) more opportunity and (b) better incentives for detection/reporting/punishment.
By this framework, someone needs to re-scramble the incentives as much as possible. Instances of police abuse are 14x higher in developing countries. America is among the safest places in the world to be handled by public police -- I get that. Across the board, countries need to look at incentives to arrive at better solutions. Because the current equilibrium is fucked up. Note to self: emotionally-charged.
Climate Change Is A Time-Sensitivity Problem
Hobart has a great piece on the Texas power grid and why it failed. TLDR; The state has been trying to transition to renewables (wind/solar), but wind/solar energy levels are not response -- in real-time -- to shifts in a household's energy needs. Natural gas is significantly more storable / ample to accommodate the massive fluctuations in most American households' energy consumption (over the course of a day, or hour).
So even if renewables ARE cheaper, without more conscious energy use from households (E.g. monitoring of energy levels, etc), we're fucked. Energy suppliers will not make the transition because end-users will not tolerate energy limitations over the course of their day.
So moving forward, we can (a) solve this engineering challenge, (b) change household behavior (@Facebook help us out with the brainwashing), and/or (c) convince the public that nuclear is safe. I'm not optimistic.