Latest / Words & Numbers / Episode 481: California Screamin’

Transcript

Episode 481: California Screamin’ · Words & Numbers

0:00
Coming up next on Words and Numbers, back to social media.
0:03
Robots and humans working together.
0:05
Tariffs and tweets. And have.
0:07
California politicians lost their minds.
0:11
All this and more. Coming up next on Words and
0:13
Numbers, a civil original production.
0:15
Check us out at civil.com. That's C ivl.com.
0:19
Hi, I'm James. And I'm Anthony.
0:21
And this is words and numbers and what's new and exciting in
0:29
your world this week. Well, we're going to have at
0:32
California in a minute here or so.
0:34
I'll start off by saying something nice.
0:37
There's a company in California, 1X that produces or will be
0:42
producing IN2026A humanoid robot by the name of Neo.
0:49
It's billed as a personal assistant that does everyday
0:53
tasks including things like loading the dishwasher, folding
0:58
your laundry, this sort of thing.
1:00
Price tag is estimated to be 20,000.
1:04
Hey, that means I'll be able to afford one in about.
1:07
Three years. What's got me thinking about
1:10
this? We're, we, we're all about, you
1:12
know, the robots and they're going to work in our houses,
1:16
which make us very happy. Then they're going to replace us
1:19
in our work, which makes us very sad.
1:22
And I wonder if we're looking at it the wrong way because this is
1:27
the same kind of thing that happened in the advent of the
1:29
computer. Everybody's saying, oh, well, on
1:31
the one hand, the computer will be in my house.
1:34
I'll do all my stuff and balance my checkbook.
1:36
That's the only thing people used to say back in the day of
1:38
Balance My checkbook, because it was the most complicated thing
1:40
they could imagine a computer might be doing.
1:44
Young people today have no idea what it means to balance.
1:47
Checkbook, right? Yes.
1:49
But put that aside. On the one hand, we're happy
1:52
about having the computers in our house.
1:53
The other hand, people are losing their minds saying, you
1:56
know, the computer's going to replace us in our jobs.
1:59
And what happened? The computers became tools.
2:03
Yeah, there were some jobs that were lost, but many more jobs
2:07
were produced, created that relied on the computer.
2:12
And now the computer's like a it's a tool.
2:14
Virtually everybody, unless you're, you've got a very hands
2:17
on job, everybody's using a computer.
2:21
Now take that how that actually played out and apply it to
2:27
products like Neo, this robot. And I'm wondering if the way
2:36
this plays out is less of here's a robot that is AI powered and
2:43
will do all this stuff in your house versus here's a robot that
2:48
is AI assisted and it's actually run by a human.
2:54
In fact, the Neo has that feature that you can run, you
2:57
can operate it remotely with the VR headset and all of that
3:01
stuff. So imagine there's somebody who
3:06
cleans houses. Now instead of going out and to
3:10
a house as you do now, when you clean the house for the person,
3:13
you get paid whatever you get paid.
3:14
Imagine instead that you've got five or six of these Neo robots
3:20
that you've invested in and they're all out there in
3:23
people's houses and you remote to one of the robots and get it
3:29
started on doing whatever task it's supposed to do.
3:32
The AI takes over so you can now remote to someone of the other
3:36
robots, get it doing whatever it's supposed to do.
3:39
In effect, you become a kind of like a hands on manager of these
3:44
six robots. I wonder if that's if that's a
3:49
more realistic way that this plays out.
3:51
And if I'm correct, our concerns about robots replacing all of
4:00
the physically oriented jobs are completely misplaced, that
4:05
actually they're going to empower.
4:07
Whereas before you could do one thing physically, now you can do
4:11
6 simultaneously. I think that's kind of a bit
4:16
Pollyannish. I mean, I, I can see where
4:18
you're going with it. And I mean, look, Uber's the
4:23
thing right? And pretty soon driverless.
4:27
Well, right now actually, you can get a a way MO if you want
4:30
things like that. But I think any task that
4:35
somebody could use a robot for, like cleaning a house, any
4:38
service task, right? The pool guy, the yard guy,
4:42
whatever. People who are wealthy enough
4:45
can already afford their own $20,000 robot themselves.
4:49
Oh I'm with you 100%. The wealthy people can afford
4:52
this. What I'm seeing here is the
4:54
ability for the middle class to afford it because you, yes, you
4:59
can't afford the robot, but you can rent it.
5:02
You don't, maybe you don't rent the robot.
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You bet. You rent the service.
5:05
So somebody comes, they drop the robot off and it's remotely
5:08
worked and it cleans your house. And then later somebody comes
5:11
and picks it up and takes it to the next place.
5:14
Maybe. And you know, working, working
5:18
in favor of that argument, right?
5:20
Most middle class people don't have housekeepers because
5:22
they're expensive. So this would have to could
5:25
drive the price down precipitously, right?
5:29
If, if it gets down to 10 or $12.00 an hour and the robot can
5:35
walk into your house at any time during the day when you happen
5:38
not to be there, if you say, oh, I'm going to be out for two
5:41
hours, let me order up a robot cleaning service to go over.
5:44
And, and it also takes away the worry of theft and things like
5:50
that. Right, So right, maybe, maybe
5:54
I'm I'm willing to take a wait and see attitude on it.
5:57
I think your, your, your criticism is interesting of, you
6:03
know, well, you, you can't afford the middle class person
6:07
can't afford it, housekeeper as it is.
6:10
But think back 20 years ago, middle class people couldn't
6:15
afford drivers. And yet with Uber, that's that's
6:19
what we have. And 30-40 years before that, we
6:22
couldn't afford dishwashers, right?
6:25
Yes. And you know, washing machines
6:27
and, and all the rest. Now I, but I'm, I'm sure that a
6:32
$20,000 robot, if it comes out next year, in 2026, by 2030 will
6:38
cost about $1500 given how things work and will be 85 times
6:44
better than the one that comes out next year.
6:47
And and the thing that has me and, and I can hear people
6:50
moaning already, but I I remember when I got my first
6:54
flat screen TV. Yes, right.
6:58
Right. And I lived in Pennsylvania at
7:00
the time and I always said the day they get down to about 700
7:04
bucks, I'm I'm good. And the Walmart ad came out
7:07
69999 for a 43 inch flat screen TV.
7:11
And we all gathered around it and wonder and said, oh, it's
7:14
gigantic. And I said at the time, I'm
7:19
going to have 100 inch TV one day.
7:21
And a couple of years ago, they finally started producing them
7:24
in in decent number and they were $10,000, $12,000, right?
7:30
They're really expensive. And I saw an ad for one last
7:34
week for 999 mm. Hmm.
7:39
Oh I've got to have AI. Had a similar.
7:41
I had had a similar experience with laptops.
7:44
I got my first laptop in 1992. It was $1500 and I have gone
7:53
through I don't I couldn't have no idea but it's probably on the
7:56
order of maybe 5 to 10 laptops over the years.
8:00
Every one of them was $1500 although at each time I bought
8:07
it $1500 because of inflation was actually less so it was
8:11
cheaper and the laptop did way better.
8:14
My first one was black and white.
8:16
They didn't. They didn't come in color.
8:20
Yeah, I, I remember the first one I ever I ever got was a hand
8:23
me down from somebody else who outgrew it.
8:26
And I thought, oh, that'd be pretty cool, I'll take it.
8:28
And it did nothing. I mean it just did, it did
8:32
nothing. And I have also come in right
8:35
about 14 to 1700 on laptops every single time.
8:41
And they get a world better every single time.
8:45
So I'm, you know, I, I don't doubt that robots are also going
8:49
to get better. But I want to also refer people
8:53
to something that I say all the time and you wince and then you
8:57
agree with me the minute I say it.
9:00
Pornography fuels every technological event.
9:05
It does really. I'm not happy about it, but
9:08
it's. True.
9:09
I I know what robots are going to look like in about 5-6 years.
9:14
Anyway, on to on to the next topic.
9:17
I wanted to get us back to the social media age of majority.
9:23
Remember we talked about that in Australia just recently and it,
9:27
it has gone into effect in Australia and the ripple effects
9:31
are being seen. And I'm wondering how long it
9:33
will take Australia to realize that now they have to ban VPNs,
9:37
right? Because right, of course, of
9:39
course they will. But came across an article today
9:42
and I just want to read you the list of places that have started
9:47
or are about to start banning social media for young people.
9:53
And the ages vary from 14 to 18. So I'm not going to bother with
9:58
that. And, and these are places that
10:01
run the gamut between legislation is coming to
10:05
strongly phrased parental warnings and everything in
10:09
between. But Denmark, Norway, Ireland,
10:13
Spain, France, the Netherlands, the EU, broadly the UK.
10:21
Hang on, I'm not done yet. I just have to scroll more.
10:25
And then in the United States, Florida, Virginia, Georgia,
10:30
Tennessee and Louisiana. Wow.
10:32
This is catching some, some momentum and I don't know how
10:37
many of those places are going to follow through with it,
10:40
right? You never, you can never tell,
10:42
that sort of thing. But that that many places are
10:46
thinking about following through on it tells you something.
10:50
And it turns out the Australians were just out in front of a much
10:54
larger wave. Yeah, One of the things it tells
10:57
me is that the people who are behind these laws have no idea
11:03
what they're talking about, because whatever law they come
11:07
up with, it's going to take young people all of about 10
11:10
minutes to figure out how to get around it.
11:12
I think that's right, but they're also, I think, on the
11:17
cusp of knowing that something is terribly wrong.
11:23
I, I don't think they know how to address it, and I'm not sure
11:26
I have any real idea how to address it either.
11:28
But social media has become a destructive force, and it's
11:32
especially destructive for young people.
11:35
Well, but is that a problem that fixes itself?
11:41
Well, because I've noticed that young people are leaving social
11:45
media, from what I can tell, in droves.
11:47
Maybe, maybe. But there are also young people
11:50
who get lured into horrible situations.
11:53
There are young people who end up killing themselves and then
11:57
there's whatever actual mental damage occurs before they dummy
12:02
up and realize it's time to be on my way.
12:04
And we don't expect children to be able to make those decisions
12:08
for themselves in any other instance.
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So why do we expect it here? I, like I said, I don't know
12:15
what the right answer is. I just know there's a big
12:17
problem. And I'm I'm always on the side
12:21
of freedom in these things. But children always present a
12:24
very difficult situation for people who are always in favor
12:28
of freedom. Right, right.
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Yeah, That kind of that that cuts legs out from under my
12:36
question. Next question, which was what
12:38
are the free speech implications?
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But that's kind of moot if you're talking about children,
12:43
because it's not entirely clear what rights they do or do not
12:45
have, or should or should not have.
12:48
And not only that, whatever rights they do have increase
12:53
over their childhood, but not in any clear or obvious way.
12:58
So, you know, here we are. I just find it fascinating that,
13:03
yeah, it's not just Australia, it's all these other places too.
13:08
And when it's that many places, either you've got a satanic
13:13
panic on your hands or there's a real problem.
13:16
And my inclination is that we have a real problem here.
13:20
I don't know how deep it runs. I don't know if this is the
13:23
correct answer, but I'm interested to see how it all
13:26
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Anyway, and that of course brings us to the foolishness of
14:27
the week. And once again, the week has
14:31
been so foolish that ioffer A2 Fer to the people.
14:37
One of the the backstage guys, David Mahone, is talking about
14:42
setting up a NCAA style tournament of the foolishnesses
14:47
of the week so we can all vote on the foolishness of the year.
14:52
And you know, the NCAA is 64 actually 66 teams or 65 once you
14:59
get to the the play in game, which is beyond ridiculous.
15:02
So let's just say 64. And yet they're only 52 weeks in
15:06
the year. But we got these two Fers that
15:07
throw everything we might get to 64 before you know it.
15:11
The first one and the second one, for those of you who are
15:15
waiting in suspense, is about our fearless leader and big tell
15:19
Donald Trump so, you know, get, get your fingers tapping.
15:24
Tell me I have Trump Derangement Syndrome again, because here we
15:27
go. But aunt, I have a math problem
15:29
for you. Our president has claimed that
15:33
the his beloved tariffs have brought in $18 trillion.
15:39
No, no, no, no they haven't. Yeah, no, they am I allowed to
15:45
swear? Can I?
15:48
No, you have to swear at the back end.
15:51
We have children listening. I swear at the back end.
15:55
They know it's heading to James. You just set them up for me.
15:58
I, I just wanted to say the B word, please.
16:02
B word, please, $18 trillion. Come on.
16:07
It's like, Oh yeah, your $18 trillion is is off by like a
16:11
factor of 10 or way more. No, 5, that's right.
16:16
It's off by A5, just a factor of 5.
16:18
And the interesting thing is, I mean, we're getting up to our
16:23
GDP level at this point, yeah. Well, I can.
16:27
That's like 2/3 of our GDPI. Believe I'm correct that tariff
16:31
revenue is around, I want to say 250 billion.
16:36
I I believe 300 billion was the last figure I saw. 300 billion
16:40
and he's a claim member. 18 trillion, but remember Ant the
16:44
300 billion that we collected was all from foreign governments
16:51
apparently. But now we have to get give it
16:55
back to our farmers who have seen a precipitous decline in
17:00
their sales and. They're not getting it all back.
17:03
They're only getting 12 billion. Right.
17:06
So, well, what about the other? I don't know, let's throw a 12
17:11
billion out as a rounding error. What about the other 18
17:14
trillion? Right.
17:16
Well, I, I don't know, but I just want to point out for our
17:18
listeners that the claim of $18 trillion is 60 times what tariff
17:25
revenues actually are, 66 zero. Wow, so we couldn't even do the
17:30
math? That's when I said, when I said
17:33
3, three to five times, I was thinking about total tax
17:35
revenue, like all tax revenue combined is five point something
17:39
trillion. Yeah.
17:41
So it's three times all of our taxes combined.
17:45
Yeah, the 18. No, no.
17:47
This. I mean, when he said it, I
17:48
thought, oh, that that doesn't even pass the smell test.
17:52
Come on. I mean, come on.
17:53
And then his legion of followers on Twitter started announcing it
17:58
left and right as if it were true.
18:00
Well, if it were true, two years of that and he could pay off the
18:04
debt. Pay off the debt.
18:06
That's right, which I fully advise him to do.
18:09
If, if, if he's got a secret bank account with $18 trillion
18:14
in it, please apply it to the debt.
18:17
Let's let's see that. This sort of thing is is amusing
18:21
to discuss, but seriously for a minute, do you think 'cause he's
18:26
not a stupid man? Do you think that he's
18:30
deliberately lying? Or alternatively, he doesn't
18:33
know the number but really doesn't care.
18:36
I think all three of the things you just mentioned are possible
18:40
because I do think he might be stupid.
18:43
I we've gotten to that point. I think he no, I think he might
18:46
be. Well, to be off by that much is,
18:50
well, look, he's a business guy, right?
18:52
I mean, it's he, he has plenty of experience in business.
18:55
He understands numbers. He understands revenues.
18:58
Does he? My hypothesis, for what it's
19:01
worth, is he says this stuff hoping and largely being
19:07
correct, that his followers will pick it up and start repeating
19:10
it, knowing darn well that it's not true and not really caring
19:14
because it doesn't matter. The goal is to get his followers
19:18
in a frenzy. Right.
19:20
And and that it does. And yet, as the economy
19:24
continues to decline, he has fewer followers with each
19:28
passing month. The and and you know, this is a
19:32
reality for the Republican Party right now because there are
19:36
higher ups in the party who are saying things like we have to
19:41
get out of this hole before the midterms.
19:44
Yeah, they they do. Now I, I have to, I have to give
19:48
him some some credit here. I maybe I'm being too strong
19:53
saying give him some credit. The economy actually is doing
19:55
surprisingly well. It's not doing great.
19:59
But when I say surprisingly, well, I mean surprising given
20:03
all the stuff that's gone on the past five years, not just from
20:06
the Trump administration, but from Biden administration prior
20:08
to that and from COVID prior to that.
20:12
Given all of that, the economy is doing remarkably well.
20:15
Unemployment is has been rising since 2023 or thereabouts, but
20:21
none the less it's still markedly less than it was prior
20:24
to COVID. Things aren't things aren't
20:28
great, but they aren't horrible by any means.
20:30
And they're, they're getting better.
20:32
It's not a catastrophe, but the people who it's hurting the most
20:38
right now are people that are people who voted for him for the
20:43
first time ever. These were non Republican voters
20:48
who said let's go with Trump and he has already lost all of those
20:54
people and the midterms could be a disaster for the Republicans.
21:00
And we'll wait and see. There's a lot of political time
21:03
between now and the next election.
21:05
So we'll we'll, we'll wait and see.
21:07
But I did promise A2 Fer and aunt, as you know, Rob Reiner
21:12
and his wife were murdered by their son in their California
21:17
home yesterday. As we record this 2 days ago.
21:20
I suspect his people will hear it.
21:23
And Rob Reiner was a brilliant film maker.
21:27
I mean, he he gave, if all he ever gave us was This Is Spinal
21:31
Tap, it would have been an A remarkable career.
21:35
But he also gave us The Princess Bride right when Harry Met Sally
21:39
there, there were big things on his resume.
21:43
And I want to read to you what the President of the United
21:47
States had to say this morning upon hearing of the the terrible
21:54
thing that happened. A very sad thing happened last
21:57
night in Hollywood. Rob Reiner, A tortured and
22:00
struggling but once very talented movie director and
22:03
comedy star, has passed away together with his wife Michelle,
22:06
reportedly due to the anger he caused others.
22:09
There is massive, unyielding and incurable affliction with a mind
22:13
crippling disease known as Trump Derangement Syndrome, sometimes
22:17
referred to as TDs. He was known to have driven
22:21
people crazy by his raging obsession of President Donald J
22:24
Trump, with his obvious paranoia reaching new heights as the
22:28
Trump administration surpassed all goals and expectations of
22:32
greatness. And with the Golden Age of
22:34
America upon us, perhaps like never before, May Robin Michelle
22:38
rest in peace. Wow, what?
22:42
What in God's name is wrong with this man?
22:45
And for those of you who were busy typing away your hate mail
22:49
about Trump Derangement Syndrome, if you're going to hit
22:53
send on that, I want you to explain to me in that e-mail why
22:59
what the president sent out is in any way appropriate.
23:04
Yeah. It's this is not a question of
23:07
factual, although we could take that up as well.
23:10
It's a question of appropriate. And Aunt I'm, I'm starting to
23:14
come to the very strange realization that there is
23:19
somebody in this country with Trump Derangement Syndrome, and
23:21
it's Trump. He's the one who says crazy shit
23:26
about him. The rest of us just react to it
23:31
over and over and over again. And I don't understand how the
23:37
president of the United States could put something so terrible
23:42
like that out into the public space.
23:45
I really don't. I'm going to paint a little more
23:49
broadly here. I, I, I agree with what you
23:52
said, but I'm astounded that there's not an uproar.
23:58
And I don't mean from I don't mean from the left, I mean from
24:02
civilized people saying this is not the way anyone should
24:07
behave, let alone the person we've elected to represent us.
24:11
And look, I know it's not going to be JD Vance, right?
24:15
I, I know it's not going to be Marco Rubio.
24:17
It's not going to be administration types.
24:19
They're all running for cover. But where are the Republican
24:23
congressmen and senators right now?
24:26
Where's where's the media? How how is it that we'll?
24:30
See as a people is tonight. Well, possibly so, yeah.
24:35
But have we become as a society? Have we just become crass?
24:40
Of course is the word. I would use course and and look,
24:44
I've said it before, we have become coarse largely because of
24:48
our interactions on social media, right?
24:52
You don't have to look somebody in the eye to say these horrible
24:55
things anymore. People used to know to be
24:59
ashamed and they also used to know that a slap in the mouth
25:03
was incoming if you cross the line.
25:06
But now everybody knows that you don't have to worry about it.
25:11
Anyway, it's a sad day losing Rob Reiner.
25:16
He was a monumental talent all the way back to his days as
25:20
Michael Stivic on All in the Family, but as a director, he
25:23
was really something. What you're doing here, I, I
25:27
think people should take a deep breath and, and reflect on you
25:32
can simultaneously, and I'm with you, say on the one hand,
25:37
fabulous talented director, artist, all of that, no
25:41
question. And on the other hand, when it
25:44
comes to his politics, a raving lunatic.
25:47
But I have not. But but that has nothing that
25:49
has the. The latter has nothing to do
25:51
with the former. Today, I have nothing to say
25:55
about his politics. They're irrelevant today.
25:58
One should have nothing to say about it.
26:01
In the future, maybe we'll talk about it.
26:03
We have talked about it in the past.
26:06
Today, a man has died and we're all a little worse off for it.
26:11
Speaking of being a little worse off, let's turn our gaze to
26:15
California more broadly, shall we?
26:18
Because an interesting, a really interesting thing I say all the
26:23
time on this very podcast, I don't know why people even do
26:28
business in California. It can't be worth it.
26:33
And and you've heard to say this isn't and.
26:36
And and come to find out, we're going to start this by talking
26:41
about the oil company or gas company Valero, who is taking a
26:48
$1.1 trillion hit to abandon its its gas refining in the state of
26:57
California. Now this is not to say that
26:59
Valero will not do business in California.
27:02
It is to say that they will no longer be refining gasoline in
27:06
California. They're out of the California
27:09
gasoline refining business and there is a California gas
27:14
refining business because California has much, much higher
27:18
environmental standards for gasoline than any other state in
27:23
the in the in the country. And we've talked about before
27:27
how California has different automobile requirements and thus
27:31
every state in the country gets California automobiles.
27:36
But with the gas, it didn't work that way.
27:38
Gas is specific to California and that that's kind of
27:41
interesting, right? So.
27:43
Not not entirely specific, not entirely specific.
27:47
You in Arizona maybe feel maybe close enough that you feel a bit
27:53
of the effects. There is a bleed over into some
27:57
neighboring states. Yeah.
27:58
I I don't, I don't know if that's going to turn out to be
28:00
the case or not. We'll, we'll all find out
28:02
together. I see no good reason for that to
28:04
be the case. We don't have the same standards
28:07
that California does. Therefore, we get cheaper gas
28:10
from everywhere. California only gets gas from
28:14
California refineries. And then I'm going to get this
28:18
wrong. I know it's South Korea and oh
28:22
man, maybe Singapore, it'll come back to me maybe or maybe not,
28:26
but it's just a very small handful of foreign countries
28:30
that have a 30 to 40 day pipeline to ship the gas here.
28:35
So it takes a long time and the added cost of shipping it from
28:41
Korea to California is significant, right.
28:45
And and above and beyond that, we should at least for a moment
28:51
and answer the question of taxes and fees.
28:54
And California pays the highest taxes and fees in the country at
28:59
$0.90 per gallon. So.
29:01
Oh. Wow.
29:02
Right and and federal more than Pennsylvania.
29:05
The federal gas tax is $0.18. The other $0.72 is made-up of
29:11
state excise tax at $0.60 a gallon, state sales tax at $0.10
29:16
a gallon and an underground storage tank fee at two cents a
29:20
gallon. And let let me just point out
29:23
here for people who are on about the evil profit seeking oil
29:28
companies, their profit last time I checked was round about
29:32
two or three cents per gallons. So you're, you're looking at
29:37
this between the state of California and the federal
29:40
government, they get $0.90, right?
29:45
And an Exxon to pick one out of the hat gets 3 who's Who's the
29:51
greedy bastard here? Again, I'll leave it to the
29:54
people to decide for themselves, but the Valero issue is that
30:01
they can't make enough money on the gas that they refine in
30:06
California. They can't.
30:08
Because of the regulatory stuff. Because of not only the taxes
30:12
and what have you, but the regulatory angle.
30:16
And the regulatory angle here plays bigger than most people
30:20
think. Because in what was it last
30:25
year, the year before, in a period stretching all the way
30:29
back to, I believe, 2003, the California government found them
30:34
guilty of some sort of environmental malfeasance and
30:38
fined them $83 billion. Wow.
30:42
And Valero said probably best if we get away from this now and
30:49
they're willing to take a $1.1 trillion hit to their balance
30:53
sheet to get out of refining gas in California.
30:57
You're you're mentioning think it's going to cost them?
30:59
You're mentioning Valero and from what I read there, Valero
31:03
is planned on closing in April of 2026, but but in December
31:10
this very month. That's right.
31:13
Phillips 66 is doing the same thing.
31:16
Same thing, and one would have to assume, unless one were a
31:20
crazy person, that they're doing it for the exact same reason.
31:25
Yeah. So all of a sudden you've got
31:30
the the Benicia facility of which is Valero, they were
31:35
processing 145,000 barrels of crude oil into gasoline daily.
31:42
For perspective, have those those two facilities, Valeros
31:46
and Phillips 66, that's 17% of California's petroleum, which
31:52
almost 1/5 which will now have to be replaced by foreign
31:58
petroleum. Yep.
32:01
It'll have to be processed somewhere that's set up to
32:05
process this and look as as good economic thinkers.
32:10
We have to tell people that that will only happen if there's a
32:14
sizeable enough profit in the process.
32:19
Nobody's going to say, oh, we'll do it, don't worry about it,
32:21
right? People, other places, people in
32:25
other places will say we'll do it, what will you pay?
32:28
There's been estimates. The lower end of the estimates
32:32
I've seen is that this whole business is going to boost the
32:35
price of gas in California by 25%.
32:39
And that's immediately. Buck 40 a gallon roughly.
32:42
And that's immediately. But there's more than just that
32:45
immediate effect. And another thing that's going
32:48
to be lost is all the money that these two companies were plowing
32:52
back into the local economy. And that goes, that goes well
32:56
beyond just the people they hired and the contractors they
33:00
paid. These were the the companies
33:02
that were sponsoring the Little League, right?
33:05
And, and every little damn thing like that.
33:09
And all of a sudden all of this is gone just like that, just
33:14
like that. And what we've got here in
33:18
California is a political class. And California is a one party
33:22
state, right? What the Democratic Party in
33:24
California wants, it gets because there's not nearly
33:28
enough by way of Republican opposition to thwart it.
33:33
And they kept saying, we want more, we want more, we want
33:37
more, In this case, more environmentally friendly
33:41
regulation, not knowing that there would be associated costs.
33:47
And they said, well, if people have to pay a couple of cents
33:49
more at the pump, so be it. OK, People did that.
33:55
They did it for decades. They were angry about it.
33:58
And let's, let's actually stipulate that the air quality
34:02
in California, especially Southern California, was so
34:04
atrocious that they needed to do something.
34:08
They just didn't choose all that wisely because they kept they,
34:11
they decided we were going to make business pay and the people
34:15
will pay a little more at the pump.
34:17
Well, people now in California pay almost twice what I pay here
34:21
in Arizona. It's like a 40%, it's like a
34:24
4050 percent, 6070% depending on the season.
34:29
And now it's. Going to be even more I'm you're
34:31
in Arizona, I'm outside of DC and they're paying double what I
34:35
pay. That's crazy, right?
34:37
Crazy. But they're Politicians in
34:41
California have long disputed the existence of trade-offs,
34:50
right? They just think you can wave a
34:51
magic wand and you get what you want because a legislature
34:55
declared it to be so. Well cost the these everything
34:59
you want costs. Somebody, something and I think
35:03
in a sense, in a sense they don't pay attention to
35:06
trade-offs. In another sense, they, they
35:08
kind of half heartedly do because the one of the things
35:11
that they will say here is look, Valero Phillips 66, we're
35:17
emitting carbon as they go about refining petroleum and now their
35:23
carbon output goes to 0. And I looked up the number those
35:28
two companies together were pumping into the air, 3,000,000
35:32
tons of CO2 every year, which sounds very scary.
35:38
And you say, well, OK, so I'm going to pay $1.40 more a
35:41
gallon, but that's three million tons of CO2 per year that's no
35:47
longer being emitted. And that's as far as their trade
35:51
off thinking goes. Let's let's go to the next step,
35:55
which is that Californians, as you point out, are still going
35:59
to be buying petroleum. They're just going to be buying
36:01
from somebody else. And those people are emitting
36:05
CO2. So it's not that this CO2 is
36:08
somehow no longer being emitted, it's just being emitted
36:11
somewhere else. And when you're done with all of
36:15
that, while 3,000,000 tons of CO2 sounds like a lot, what
36:20
percentage of global CO2 output might you think that is?
36:26
I love guessing these things. I suspect my guess is going to
36:31
horrify people at how small it is, and it's still going to be
36:35
way too big. 110th of 1%. Oh, good guess, but you're off
36:41
by a factor of 10. It's one 100th of 1% of global
36:48
and that's, so that's the trade off for California.
36:51
Oh, and by the way, that's in a best case scenario.
36:54
The best case scenario is that this regulation reduces global
36:59
CO2 output by one 100th of 1% in exchange for Californians paying
37:06
$1.40 more per gallon for of gas.
37:09
To begin with, to begin with, I have to keep saying to begin
37:13
with because to begin with there's 1/2.
37:17
I'm not allowed to say that word.
37:19
There is a a detestable idea on the table and it has been for a
37:25
little bit. Is it time to get into that or
37:27
do you have more to say on the the simple?
37:29
I'll, I'll just point out one other thing that be aware as you
37:33
think about this buck, 40 per gallon of gas, it's not just
37:38
$1.40 per gallon of gas, it's all your groceries are going to
37:43
cost more because why? They had to be transported by
37:46
truck and the trucks take fuel. Virtually everything you pay for
37:51
is going to be more expensive because it requires fuel.
37:55
And I think people always underestimate that, right?
38:00
Everything that you want has to be delivered to you in some way,
38:05
and it's almost always at least at the end.
38:09
Coming in with something that burns gas or diesel Well.
38:13
Good luck. James and I are delighted to be
38:16
working with Civil. For years we have been pushing
38:18
people to think about how we can make the world a better place.
38:21
Civil's mission of upgrading society fits exactly with what
38:25
James and I have been talking about for years.
38:28
Civil helps us by allowing us to do what we do best, which is
38:31
researching topics that are important and communicating
38:34
these to our listeners in ways that we hope they find enjoyable
38:38
to see. Civil's extended list of
38:40
content, including our podcast Words and Numbers and our new
38:43
lecture series, Words and Numbers Live.
38:46
Visit civilcomthatscivl.com. But Ant I want to call our
38:52
attention to the thing that is up on the screen right now, the
38:56
transportation fuels assessment by the nice people in the great
39:01
state of California. This would be the California
39:05
Energy Commission most specifically.
39:08
And as you will see by the thing that's now on the screen,
39:13
there's an idea here in Table 19 and it it begins with the title
39:20
overview of state owned refineries.
39:24
And mind you, this came out in what, 2024?
39:29
So this was a hatchable plan before 2 of the biggest refiners
39:35
decided they were going to up and leave.
39:37
So if this was a hatchable plan, then it's going to be pursued as
39:42
a necessary plan. Now, the state of California,
39:46
you heard it here first, is going to get into the refinery
39:49
business. And this is, this is not James
39:52
Harrigan speaking, this is the California Energy Commission.
39:56
That's right. This is not me speaking.
39:58
I'm just, I am a conduit through which this ridiculous
40:02
information flows. The state of California, this
40:05
document says, would purchase and own refineries in the state
40:09
to manage the supply and price of gasoline.
40:13
What could possibly go wrong? Oh, actually we know what could
40:17
go wrong. Go take one quick look at
40:18
Venezuelan and then come back. Right, because that's how it all
40:25
started. There.
40:26
I've got a great idea. Let's take control of the
40:29
petroleum industry and it'll work out great, because then
40:34
we'll cut out all those evil corporations and they won't get
40:37
profits anymore, which means everything will be better.
40:41
Except now in Venezuela, there's not food because of that
40:46
decision. That's literally that's worth
40:48
the case, right? That's worth tracing Venezuela's
40:53
government in following the the statement you made that you know
40:58
their point to these oil companies that are taking profit
41:02
and the state and the state of or the country of Venezuela
41:05
says, OK, well if we take it over all that profit would come
41:08
to us. So they nationalize all of the
41:11
the oil industry and now belongs to the state.
41:14
And here's something that's interesting.
41:16
And as much as as people might get annoyed about capitalists
41:21
and the profit seekers, one of the things that profit seeking
41:25
does is it gives you a hard incentive to reinvest in your
41:31
capital. So if if you are a private
41:34
investor and you are part owner of an oil company and you make a
41:38
bunch of profit, you're not going to go buy a boat.
41:42
Or maybe you'd like to go buy a boat.
41:43
But the first thing you're going to do is take a slice of that
41:46
profit and reinvest it. Because why?
41:49
Your buildings, your machinery, your trains, your trucks are all
41:53
deteriorating over time as machine, machinery and buildings
41:57
do. You're going to take a chunk of
41:59
your profit. Invest it in maintaining that.
42:02
Because otherwise, 10 years from now, it'll all be rundown.
42:05
You won't have a company anymore.
42:07
Which is exactly what happens. That incentive, yeah, the
42:12
politics. Government, government, that's
42:14
right, government thinks that you can wave a magic wand and
42:18
then things happen just because you said so.
42:21
But every single thing that gets oil from inside the ground to
42:25
into your car requires maintenance.
42:28
This is why you know when when people complain about landlords
42:33
and how their vampires and there should be no rent.
42:37
Who, who do you think repairs the electric when it goes bad in
42:40
a building? Who do you think repairs the
42:42
plumbing right? Who do you think paints the damn
42:45
thing? Who makes sure that the doors
42:47
all lock? Well.
42:50
Some look, some landlords don't do that nearly well enough, but
42:56
then people don't rent from them.
42:58
And, you know, someone might say as a counter argument, OK, but
43:03
all we need here is some law in place that says that the
43:07
politicians have to take a portion of profits and reinvest
43:12
it. And you know, I there are all
43:14
kinds of problems that come with that.
43:15
I don't know how how successful such a thing will be, but I can
43:19
point out that if the politicians don't do that, and
43:25
as a consequence all the infrastructure in this petroleum
43:28
business that you have confiscated starts to decline
43:32
and is no longer making a profit, none of that comes out
43:36
of the politician's pocket. But if it's privately owned, it
43:40
absolutely comes out of the stockholder's pocket.
43:44
And that gives the stockholder an incentive that the politician
43:47
will never have. Never.
43:49
Now, I suspect that given the culture of California and how
43:53
things generally work there and, and you know, all kidding aside,
43:57
it it's a functional enough place.
43:59
It's not my cup of tea, but I get it.
44:02
My guess is that they actually will do the necessary
44:06
maintenance and there will be rules to follow, just like
44:10
always. But my guess is also that they
44:13
will be wildly inefficient because government is always
44:16
wildly inefficient, right? If you want efficiency, like you
44:20
said, you've got to put a man's name on the bottom line.
44:24
Then it will be efficient because he will hire.
44:26
When the inefficiency comes out of your pocket, all of a sudden
44:30
you're very efficient. Right.
44:32
But, and, and I'll just ask this, is there anybody out there
44:35
crazy enough to believe that the government of California is an
44:39
efficient enterprise? Oh, oh, please, just please.
44:44
And it will be worse when they do this because government can't
44:49
be run like a business because not designed to be that.
44:52
But government can also not run a business because it's not
44:56
incentivized to do it. And you're going to have nothing
45:00
but problems at the end of this ugly day.
45:03
And all of this could have been avoided had the government not
45:07
in the first instance said you must do X, right?
45:12
If if it had said something more reasonable, like look, we we
45:16
want fuel that's at least as good as anybody else in the
45:21
world gets, this problem would never have emerged.
45:24
Now, on the other side of that trade off, they might not have
45:28
cleaned up their environment as well as they did because it's
45:31
trade off. And this is what politicians
45:34
hate. They hate to think that I have
45:36
to give up something valuable to get something valuable.
45:40
So now you've got to decide which of these things is more
45:43
valuable to you. And the answer, the right answer
45:46
is almost always a compromise blend, but that we're going to
45:50
pay a little more, but we're going to be reasonable about it.
45:53
But if you can only get gasoline for California from three places
45:57
in the entire world, one of which is already California,
46:01
you, you should be able to see that you've already made a
46:03
mistake. Then when two of your biggest
46:06
refiners say, I, we got to get out of here no matter what it
46:10
costs us, we have to get out of this situation.
46:14
That's on you. That's just let's.
46:16
Go back for for a minute. You said a while ago that couple
46:22
decades back Los Angeles was polluted.
46:26
It was a horrible place. And they clean their act up.
46:30
And there's, there's something to bear in mind here that when
46:37
when you have a problem that's particularly large.
46:40
So picture Los Angeles with the smog and all of that.
46:43
I recall you telling a story of you didn't know there was a
46:47
mountain in your backyard until the smog blew away one day.
46:51
Couldn't have been more than a mile.
46:52
Away, right. And so when you've got a a
46:55
significant problem like that, it's less expensive to cut it in
47:01
half than it is if you have a small problem.
47:05
The smaller the problem gets, the more expensive it becomes to
47:08
cut it further. And California may be in a
47:11
situation right now where it has, and kudos to them, improve
47:17
their environment so much that it's that while before it was
47:21
cost effective, they've now reached the point where it's no
47:24
longer cost effective. Yeah, perhaps you can say a word
47:27
or two on Pareto optimalism. Yeah, I mean, there's a there,
47:31
there's an optimum here. And think about it from your own
47:35
perspective. Every decision we make is the
47:40
same way. You know, you go to buy a car
47:42
and if you got a family, you want a car that's safe.
47:44
It's got airbags and it's got the proper seatbelts and all of
47:49
that thing. And of course that makes it a
47:50
little more expensive. Course all, I guess because of
47:52
California. All that stuff's required now.
47:55
But you can think about the other cars with the radar on
47:57
them and the automatic braking and all this stuff.
48:00
It becomes more expensive. At some point.
48:02
It's not because you don't love your family, but at some point
48:05
you say, OK, this car that I picked out is safe enough to
48:12
make it any safer would be so expensive that I'm now cutting
48:16
into things like I can't give my kid piano lessons because of the
48:20
extra safety on the car that I really don't need.
48:23
I'd much rather have a piano lessons.
48:25
That's the trade off A. Person makes and if you wanted
48:29
to make the car 99.99 safe, assuming that you can't get
48:33
everywhere, then you probably can't afford a house right A
48:37
piano lessons right The last 10% of a problem costs way more than
48:44
you've already spent solving the 1st 90 Yep Yep and you know.
48:49
People who have lived a little while know.
48:51
That to be true. And when you're you're pounding
48:56
money into something and and you look around and you realize, do
49:00
I need to spend another dime on this?
49:03
Because if the answer is no, I'm not going to.
49:06
See, in this kind of discussion is exactly the kind of
49:10
discussion politician should be having in the in the public
49:14
sphere. We have it, people have it all
49:16
the time when they make their own decisions.
49:18
And we can't have those sorts of discussions because the minute
49:21
somebody like you or me says what we just said, look, there's
49:28
a trade off here. Somebody else says, oh, you're
49:31
heartless. You're just reducing lives to
49:33
dollars. Why do you hate children?
49:36
Right. Why do you in in now?
49:38
There is no conversation possible.
49:41
That's right. That doesn't mean the trade off
49:42
has gone away. It just means you're ignoring
49:44
it. Every business knows that there
49:47
is this thing called the point of diminishing returns, right?
49:52
Where you just you spend more and you make less.
49:55
Every business knows this, No government knows this.
50:01
And there you go, right? I mean, it's just that simple.
50:05
Do you keep making things harder and more expensive in pursuit of
50:10
a goal that any rational person would say you achieved years
50:14
ago? Or do you say, all right, we can
50:18
loosen up a little bit, let's maybe back off, deregulate now
50:23
that the problem has largely been solved?
50:27
Well, they didn't do that because governments don't do
50:29
that. And now they're out two of their
50:32
biggest refineries. Yeah, Well, sorry.
50:36
Now you don't get those jobs back.
50:38
Now you don't get gasoline unless you just do it by taxing
50:45
everybody more, which California, and then you're not
50:48
going to have a whole lot of trouble doing.
50:50
And then, well, and, well, you won't have taxpayers.
50:53
You'll have lots of people because California already has a
50:56
lot of people who who don't really participate in the tax
51:01
economy. But well, that's not exactly
51:04
right, is it? They gobble up lots of tax
51:06
dollars, but they don't pay a lot in.
51:09
It's a problem we have nationwide, but it's a problem
51:11
they have more in California. And look, if if you knew aunt,
51:17
that you were going to be homeless, right, That you
51:20
weren't going to be able to get a job and you're going to have
51:22
to live on the streets, you going to go to Wisconsin or you
51:24
going to go to California, right?
51:26
Yeah, right. I'm going to California every
51:29
single time because I won't freeze to death there, Right.
51:33
Right. And you know that they've got
51:36
some policies that make it easier on me, etcetera,
51:39
etcetera. And you see how all of these
51:41
things become quite interlaced when when you look at them.
51:46
But you know, everybody wants to look at things in isolation.
51:49
They want to think about what they want and not what the cost
51:53
will be. They don't ever want to talk
51:55
about trade-offs. There's no such thing as
51:57
diminishing returns because you're if in, if you're in the
52:00
government returns are irrelevant.
52:02
You just raise the tax rate. Well, sooner or later that
52:06
doesn't work and we're getting to later in California.
52:12
I feel bad for them but they brought this on themselves.
52:15
I'm concerned about the rest of the country.
52:17
I I looked up average gas prices in the US, countrywide US going
52:25
back to the 1990s, and then looked up average gas prices in
52:30
California, also going back to the 1990s.
52:34
And what's remarkable, although the California prices are
52:37
higher. They move in lockstep, yeah, but
52:40
that's not surprising. Now there's there, there's all
52:43
kinds of. Causality issues there, but it
52:47
at least it makes me stop and wonder how much of A spillover
52:51
effect is there going to be If the price of gas goes up 25% in
52:55
California, how much is it going to go up in in the Midwest?
52:59
I doubt it will go up anything because of the unique reasons
53:02
it's going up in California. I don't know but the.
53:06
Pipeline to the Midwest is going to be the same tomorrow as it
53:10
was yesterday. That's not true of California.
53:13
Yeah, I suppose it depends on where is California going to be
53:16
getting its oil from. Well, it's gas, not oil, right?
53:19
And there's only a couple of places in the world they can get
53:22
it, right? There are two other countries
53:24
that they can buy it from, or they can refine it in
53:27
California. Of course it's gas.
53:29
It's the refineries that are shutting down.
53:31
Yeah, Oh my God, they're not. It's not just a matter of
53:35
importing petroleum. They're going to import the
53:38
finished. Product, that's right.
53:41
Good God. Yeah, it gets worse.
53:44
The more you think about it, the worse it gets.
53:46
Yeah, it it's kind of fantastic when you think about it.
53:51
I mean, it's just how on earth could you let it get that bad?
53:56
How? How could?
53:58
How could a? Company take a $1.1 billion hit
54:02
to leave a market. Wow.
54:06
Well, I think California in this applies to governments in
54:11
general. You get to this point because
54:15
you keep asking the same question over and over here to
54:20
to problems that arise. Here's a problem.
54:22
What can government do? Never do you ask what can
54:27
government stop doing? And so long as you ask what can
54:30
government do, you're going to end up with a sequence of here's
54:34
a problem. The government tries to fix it,
54:36
and it has create some unintended consequence.
54:38
You say, oh, let's go fix that unintended consequence with
54:41
government, and government comes and does something.
54:43
You get another unintended consequence and before you know
54:45
it, you've just got government everywhere.
54:47
Yep. And you're playing whack A mole.
54:50
But Yep, it's not just one mole that comes up all the time now
54:54
it's all the moles, right? And look, this is going to end
54:57
very badly. I I already know that I feel bad
55:02
for my friends in California who are going to have to pay a very
55:05
steep price for this decades long foolishness.
55:09
Well, here we are. This is this is December.
55:12
In two more months, our podcast I believe will be 8 years old.
55:17
Oh, wow. If I'm counting correctly, it's
55:20
not 9, but we're somewhere in that range.
55:24
And over those eight years, you have repeatedly ask the question
55:29
rhetorically. I don't know why anyone does
55:32
business in California. And here people are finally
55:36
we're looking at 2 very large businesses that are saying, you
55:39
know what, James? Good.
55:41
Question, you got a point, you got a point.
55:44
People are catching on and I think, you know, with the the
55:47
mandated increase in fast food worker jobs, you're going to see
55:53
Burger King, look, Burger King circle in the drain already.
55:57
Can they possibly be making a dime in California when they're
56:00
paying their near duel employees?
56:03
Like like kind of small, small town mayor's?
56:07
You know, probably not probably not.
56:09
So you know, things are going to start to close more and more and
56:12
you know what it looks like when businesses start to exit,
56:16
there's a death spiral that comes along with that.
56:19
This is how small towns die, right?
56:22
One business leaves, then another, then another.
56:25
Before you know it, people can't make a living there.
56:28
Before you know it, now they can't sell their home, so they
56:30
abandoned them. When they abandoned them, they
56:32
fall to the earth and everything turns into a mess.
56:37
Well, there's no force in nature that keeps that at the small
56:41
town level, right? That that can happen statewide
56:46
as well. So California is a beautiful
56:52
place. It has every benefit of
56:54
geography that you could imagine, you know, minus the the
56:57
gigantic drawback of of the the fault lines that run through the
57:02
place that leads in the earthquakes.
57:03
But it it really is blessed by geography and then and that's
57:08
not going to be enough to save them.
57:10
I guess we. We have to say about this.
57:13
I hate that. A shame.
57:15
Good luck and God bless. Robin Zander from Cheap Trick
57:19
all those years ago. It is a shame and I'll look.
57:23
I lived there for four years. How I don't like to see them
57:27
suffer. But they brought it on
57:29
themselves and now they'll have to live with it.
57:33
Well, I wonder. Well, I, I before you go, I
57:37
can't help but wonder, I, I gave a lecture in California to
57:41
chiefs of staff of the California State Legislature
57:44
some years ago and I floated the question to them, is it possible
57:52
that California's just too large?
57:54
And kind of quietly, because nobody was looking, a number of
58:00
them said, yeah, we've discussed that.
58:04
That was down to the point of if California broke apart, it would
58:07
likely break apart in these three areas, Three areas that's
58:10
that was in the water when I lived there.
58:12
People would discuss it quite openly and they were always
58:16
trying to figure out how they could break it up in such a way
58:20
that made sense geographically. And if you've been from Southern
58:24
California to Northern California, those are two
58:27
completely different places. They share almost nothing,
58:31
right, That everything about them is different.
58:33
It it would be like going from Arizona to South Dakota and
58:37
saying, see America not so fast. So you want to have some sort of
58:44
respect to geography, but then you also have to have a plan
58:49
that doesn't aid one party over the other in the in the breakup,
58:55
right? Because it it'll never get
58:57
through Congress if one side or the other is going to do better.
59:02
And yeah, you typically think about this in terms of Senate
59:05
seats. All right, fair enough.
59:09
If you're broken into three, it would be Northern California,
59:12
Southern California and Orange County, right, Which would be
59:16
completely different yet again. And the political forces there
59:19
are very complicated. And to have it come out
59:22
politically neutral rather than, you know, somehow benefiting
59:26
Democrats pretty significantly, very hard to see.
59:29
And as long as that's the case, the Republicans are unlikely to
59:34
ever allow it to happen. And politically, you couldn't
59:38
blame them even if it were the right thing to do.
59:41
You, you really can't blame them, right?
59:42
Because they pursue their own interest such that it is so I I.
59:48
So I, I have to, I can't let this go because I have to ask
59:51
this question because the topic isn't going to come up again.
59:54
I'm sure for years. What for what you're saying it,
59:58
it sounds like the the Congress would have to approve the
1:00:03
breakup. Why?
1:00:06
Why? I think, look, I haven't looked
1:00:09
into this in decades so don't hold me to this, but I I think
1:00:14
it would have to flow from the same rules of admitting a new
1:00:17
state. I I think all the same rules
1:00:21
would have to apply. That's very interesting is it
1:00:24
raises a interesting loophole. Would it be possible then for
1:00:30
California, under California's own law, to break apart?
1:00:35
And the pieces, the additional pieces, if you want to call them
1:00:39
that, are no longer states because they haven't been
1:00:41
admitted. But they aren't part of
1:00:42
California either because under California law, they're now
1:00:45
independent. Yeah.
1:00:46
I don't think you can redraw a state boundary without
1:00:49
congressional oversight. That's interesting.
1:00:52
That gives a power to Congress, a supremacy to Congress over the
1:00:56
states I wasn't aware of. Yeah, I, I don't think you can
1:00:59
do anything like this without congressional oversight.
1:01:03
It's it's, it's in the mix here in Arizona quite a bit, because
1:01:07
we're very proud of the fact here that we were the 48th state
1:01:11
admitted the last of the continental United States to to
1:01:15
join. So people talk about that sort
1:01:18
of thing more here than anywhere I've ever been, because
1:01:22
everywhere else I've ever been, there's no, there's nothing even
1:01:26
close to living memory of when it wasn't a state.
1:01:30
I mean, it's not really that close here either, right?
1:01:33
It's pretty late in the day. But yeah, I, I as a political
1:01:39
scientist, this is far afield from the things I actually care
1:01:43
about. So I never really spent a lot of
1:01:45
time digging into the niceties of how these things might occur.
1:01:52
I'm just convinced I'm, I would be shocked if there were any way
1:01:57
to do this without a congressional imprimatur on it.
1:02:01
And you'll never get it as long as it's not perfectly neutral
1:02:05
and it will never be perfectly neutral.
1:02:08
I I just don't see any way in hell that could ever have.
1:02:11
And I think when things like this happened in California,
1:02:14
Republicans sit back and giggle a little bit and say, well, you
1:02:18
made your crazy state. Now you live with it, right,
1:02:22
Right. And I, I'm kind of with them on
1:02:25
this and, and I know you are too, because you often talk
1:02:29
about how great it is that different states can try
1:02:31
different things to see if they work.
1:02:34
Yeah, it's. Unfortunate of trying things
1:02:37
that don't work. It's unfortunate that they
1:02:40
weren't able to read the obvious tea leaves here, right?
1:02:44
How do you miss this? How out of touch must you be?
1:02:48
Did nobody at a multi billion dollar company ever say, you
1:02:53
know what guys, we're not going to stick around if you keep
1:02:57
pulling this shit, right? They find them 80 plus billion
1:03:01
dollars. Who's going to stick around for
1:03:04
more of that? I I couldn't wait to relocate to
1:03:10
Texas or Louisiana, right? Somewhere on the Gulf of Mexico
1:03:15
with access to the sea that just doesn't have these crackpot laws
1:03:20
because I, I don't want to pay billions in fines for imagined
1:03:24
defenses, even real offenses that go back to 2003 that nobody
1:03:29
realized until just yesterday. Come on.
1:03:33
And they're willing to leave over a trillion dollars on the
1:03:36
table to get out. Unbelievable.
1:03:40
I mean. These songs, you've said that
1:03:41
number a couple times trillion dollars.
1:03:44
Yeah, it's that can't be one point.
1:03:46
Yeah, apparently 1.1 trillion is.
1:03:49
What of? What?
1:03:50
I keep assets, Yeah, that's what it's ultimately going to cost
1:03:55
them. No, no, 1.1 billion Not true.
1:03:58
Billion. OK, Billion.
1:04:00
So it's an 83. It was an $82 billion fine.
1:04:06
And they just said probably it's better to cut, cut, cut bait and
1:04:09
run, right? What if you could find another
1:04:11
80 billion next year, right? Yes.
1:04:14
And the year after and the year after and the year after.
1:04:16
Because government regulators have this habit of behaving
1:04:20
exactly that way. This came up just recently.
1:04:24
What the hell town was it? It was a pretty sizable town.
1:04:29
For those of you who don't watch, you should check out this
1:04:32
podcast, a video on YouTube, a channel called Lato's Law.
1:04:36
Just fantastic. A lawyer by the name of Steve
1:04:39
Lato from Michigan. He's one of us.
1:04:43
And I, I, I keep thinking we should ask him to come on
1:04:46
because he's always talking about the good things that the
1:04:48
Institute for Justice is doing. And, you know, this sort of
1:04:51
thing. There was a town that he covered
1:04:53
recently that a cop was videoed putting a chalk mark on a car's
1:05:00
tire the way that parking cops do, and then turning around 1
1:05:04
minute later, writing a ticket on the car and leaving.
1:05:08
And the people in the car had video evidence that he had done
1:05:13
this. And they said, we have you on
1:05:16
video. And he said, well, baby, I don't
1:05:20
know. And it turns out that the town
1:05:23
is way behind in its in its collections.
1:05:26
And it seems like they might be telling their parking
1:05:30
enforcement officers to write more tickets instead of telling
1:05:34
parking officers to enforce the parking code.
1:05:38
These are two very different things, right?
1:05:40
And if you need lots of money, maybe just break your own law to
1:05:43
go get it. Well, do you trust California
1:05:47
not to do that with refineries? I don't They think of these
1:05:51
things as ATMs. Just go get the money you need.
1:05:55
And look, they, I'm, I'm not saying I know they did this.
1:05:57
I don't, I have no idea whether they did or not.
1:06:00
But I wouldn't put it past them at all.
1:06:03
And if I were setting up a refinery, I would not put it in
1:06:07
California, right? Also, for the record, wouldn't
1:06:10
put it in Massachusetts and New York right there.
1:06:14
There are regulatory regimes that are so excessive that they
1:06:18
they militate against doing business in those places.
1:06:22
And that's where we are in California now.
1:06:25
Even the businesses are saying we're out of here.
1:06:28
Well, what's next? I think maybe Burger King, we'll
1:06:31
see, maybe Wendy's. Anyway, I guess that's it for
1:06:37
this week. We're coming up on Christmas.
1:06:39
I don't want to be happy and jolly yet though.
1:06:42
Well, I think you've got another couple weeks before you have to
1:06:45
be happy and jolly, right? Ten.
1:06:47
Oh no, you only have, we've got yeah, maybe 3 episodes before
1:06:52
you have to be happy and jolly. 1.5 weeks, that's it.
1:06:57
So I better get an attitude adjustment somewhere around
1:06:59
here, otherwise things are going to go poorly for the Christmas
1:07:02
podcast. Anyway, I'll catch you next
1:07:05
time, man. I hope everything goes well in
1:07:06
your world and I hope you, I hope you're nice to everybody
1:07:09
and I hope everybody can be nicer to everybody else.
1:07:13
I know it's hard. We can do this, we're in it
1:07:15
together. Let's do it.
1:07:17
See you next time, man. See you next time, James.
1:07:20
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1:07:22
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1:07:25
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1:07:28
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