Nov

9

 It's now been 12 days without electricity. And unlike Bo (who lives in
boxcars), I'm still paying the highest real estate taxes in the nation.
So, turning lemons into lemonade, here is a list of things I've learned:

1. A recession is when your neighbor loses his job. A depression is when
you lose your job.  A storm is when your neighbor loses his electricity
for 12 days. A catastrophe is when you lose your electricity for 12
days.

2. ConEdison has a real time outage map. It is updated every 12 minutes. But you cannot view the map unless
you have electricity. Ironic. It provides the date and time of
restoration to the nearest minute. Their precision is eerily reminiscent
of companies that guide earnings to the nearest penny.

3. Beware of the weakest link. Where we live has no town gas. We have a
well. So without a generator, we can't flush toilets.  But the generator
runs on propane. And that's the weakest link.  Getting a propane
delivery is almost impossible.

4. Bad incentives create bad behavior. Our propane company told us that
they are only making deliveries to customers who have run out of fuel.
But we were running our generator only a few hours per day to CONSERVE
fuel so we would not run out. Hence our responsible behavior was not
rewarded. And profligacy was rewarded. Only after I pointed this out to
the propane company manager and threatened that I would make it a
personal mission to go door-to-door afterwards and convert all of my
neighbors to a competitor did we receive an 80 gallon delivery. (The
generator burns between 2 and 4 gallons/hour.)

5. People don't change. Our neighbor who built a 12,000 square foot
McMansion (that blocked our view) was running his generator 24/7 and
running his landscape lighting 24/7. I was looking forward to a good
night's sleep without his lights coming into the bedroom window. No such
luck.

6. Send more food gifts to our troops.  They were distributing beef stew
MRE's and water bottles at the local firehouse. After things return to
normal, I'm going to send more food baskets/etc to our troops. Those
MRE's are rude.

7. Traffic lights are optional. On the first few days, there were
horrible traffic jams since all of the lights are out. However, by day
5, a self-enforced ritual developed at 4 way intersections where people
yielded to the person on their right … and things actually
worked…not perfectly, but surprisingly good.

8. Francis Galton lives. Next week is the deadline for the Intel Science
Talent Search (formerly known as the Westinghouse Science Competition.)
My daughter is submitting the results of a 3 year research project in
an arcane and slightly bizarre topic. As we sat by candlelight reviewing
her hardcopy for typos, I discovered that she had made a reference to
Sir Francis Galton's work in her paper and she cited him. There is some
irony that in 2012, a promising young scientist is editing a paper by
candlelight that cites Galton. I pointed out the irony to her. She
didn't smile. She just said that all of her friends have electricity.

9. Some people like to complain. Some people lost a few trees. Some
people had trees crash through their roofs. Some people literally lost
their houses. Some people have no generators. Some people were annoyed
that school was closed for a week. A few people lost friends and family
to the storm. Listening to people, there was little self-awareness of
relative fortune and mis-fortune. Lots of people asked how we were
doing. My answer was: it sucks. But a lot of folks are much worse off.
And this too shall pass….
Que Sera Sera

10. Out of state line crews are nice guys. I've now had the pleasure to
chat with crews from Wisconsin, Maine, Atlanta and Alabama. All of these
guys are part of the mutual aid system. Sure they are getting paid time
and a half plus a per diem. But these guys are clearly aware of the
importance of their mission. And they are proud of it.  And they don't
bitch and moan. They get the job done. And that's what makes America
great.

Are there any market lessons here? We report. You decide.

Scott Brooks adds:

Speaking of traffic lights and/or stop signs…….

At my university, there was an intersection in one of the parking lots that was a bit of a bottle neck (actually, it was a big bottle neck). Vehicles
approached the intersection from directions. It had no stop sign, or light,
or anything. But the students developed their own system wherein each car
would take their turn pulling out into the intersection. Your turn came in
a clockwise fashion. It actually worked very well. It was all on the honor system and there were no posted rules.

Conclusion: people will figure things out on their own over time, and not a single law was passed by a bureaucrat and not a single regulator was needed
to make it work.


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3 Comments so far

  1. Dan Costin on November 9, 2012 3:26 pm

    The bureaucrats of Old Europe have been experiment with no traffic lights for a few years, and are finding it largely works. Our more market-oriented approach to change (i.e. “who’s gonna pay for THAT?”) is much less able to experiment, and so we are true conservatives, keeping old technologies around until they break down.

    http://www.reuters.com/article/2007/09/11/us-germany-traffic-odd-idUSGOR14512420070911

  2. Ardent1 on November 9, 2012 8:15 pm

    One of my favorite Warren Buffett quote (here it is being paraphrased): You don’t want to be in a situation where you need to depend on the kindness of strangers.

    Then there is Nassim Taleb preaching the Black Swan (aka tail risk) dovetailed by Charlie Munger who believed in a having a checklist and have a huge, massive margin of safety (Munger quotes in his book how under Roman Law builders are required to stand underneath their work — say a bridge — to “personally” attest for the bridge’s strength). However, my favorite lesson from Munger was how if you don’t want a certain outcome to occur (i.e. being out of electricity for 12 days or more), you do the things to prevent that from happening (such as, but not limited to, having solar power as a backup energy source).

    That reminds me of a story. I had a colleague that told me he would like to buy my car if I had plan to sell it. I asked him why and he tells me that I am one of people who keeps the car in great mechanical shape such as routinue maintenance, buy new tires before the old tires goes bald, replace my brakes frequently — i.e. I don’t take chances with my car since my life depends on it. I told him that was because in my younger days, I had to do a reverse commute from Manhattan to Plainview on Long Island and I was lucky to have taken my mom’s old car to the shop to for maintenance, have new brakes, etc. before starting the job. It wasn’t two weeks that my new brakes saved my life since people are such bad drivers on the Long Island Expressway. That was dumb luck on my part.

    I want to conclude on a happy note — Americans tend to be charitiable and it’s amazing how much kindness is exhibited during such unfortunate events. And then there is wisdom gained — next time, the people negatively affected by the storm will be better prepared.

  3. Tim Richmond on November 14, 2012 6:46 pm

    Re : “Conclusion: people will figure things out on their own over time, and not a single law was passed by a bureaucrat and not a single regulator was needed to make it work.”

    This is the most righteous statement made on this site in the past 12 months.

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