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Friday, September 30, 2005

Evolutionary Ether

I am often told that, regarding the debate about some topic, the scientific community nearly universally supports one side of the debate. The implication is that the side of the debate endorsed by that amazing brain trust that is the scientific community is certainly correct and that the other side likely consists of unenlightened and misguided Neanderthals.

However, for this implication to be valid, it seems to me that it requires that when the scientific community nearly universally endorses a theory or some position in a debate, that they are always right. Conversely, if scientists have unanimously and passionately endorsed theories in the past that later turned out to be completely, absolutely wrong, it seems to me that subscribing to the scientific community's viewpoint without question, while automatically rejecting opposing viewpoints, especially when there is no absolute proof one way or the other, is not necessarily reasonable or fair.

For amusement, consider the following excerpt regarding the "luminiferous ether" from Quantum Reality: Beyond the New Physics, by Nick Herbert, pages 5-7:
In 1864 Scottish physicist James Clerk Maxwell discovered the basic equations that govern electricity and magnetism. To everyone's surprise these phenomena turned out to be two aspects of a single entity - the electromagnetic field. Today physicists are seeking for a way to unify all of nature's fields. Maxwell was the first physicist to show that the task of field unification is not futile.

A theorectical bonus which Maxwell reaped from his fusion of two fields into one was the discovery that waves in his electromagnetic field traveled at the same speed as the measured velocity of light. On the basis of this numerical coincidence, Maxwell conjectured that light, in reality, was an electromagnetic vibration at a particular frequency. The experimental production by Heinrich Hertz of low-frequency electromagnetic radiation (radio waves) which were identical in all respects save frequency to light confirmed Maxwell's bold conjecture.

All known waves vibrate in some medium (such as air or water). The medium in which light presumably travels was dubbed the "luminiferous ether." Late nineteenth-century physicists gave top priority to research into the ether's mechanical properties. Maxwell described the subject of this research in these words: "Whatever difficulties we may have in forming a consistent idea of the constitution of the ether, there can be no doubt that the interplanetary and interstellar spaces are not empty but are occupied by a material substance or body, which is certainly the largest, and probably the most uniform body of which we have any knowledge."

From light's well-known attributes one could infer many of this hypothetical ether's properties. For instance, since light travels so fast the elasticity of the ether must be enormous, millions of times more resilient than the hardest spring steel. Since light is a transverse wave - vibrating sidewise rather than back and forth - the ether must be a solid. Gases and liquids can support only back-and-forth vibrations (sound is an example), while solids transmit both kinds of vibration (earthquake waves, for example, vibrate in all directions). The fact that light vibrates only sidewise (no back-and-forth light has ever been observed) had to be explained by complex structures in the ether which suppressed altogether this otherwise natural back-and-forth vibration but which permitted sidewise vibrations to propagate with extreme rapidity.

Although the universe was filled with a transparent "glass" much harder than steel, this glass offered not the slightest resistance to the passage of material bodies. The Earth's motion was seemingly unaffected by the presence of the luminiferous ether. Some physicists proposed that the ether might act like a solid for rapid motions such as light, but like a fluid for slow motions, such as planets, in the manner of certain waxlike solids with deformation-rate dependent viscosities. In modern terms, such a hypothesis amounts to assuming that the universe is filled brim to brim with a kind of Silly Putty.

In 1887 two American physicists performed a simple experiment whose purpose was to determine the velocity of the Earth through this ever present vibrating solid. Albert Abraham Michelson and Edward Williams Motley set up a kind of optical racetrack that pitted a light beam moving north and south between parallel mirrors against an east/west beam. Depending on the direction of the "ether wind," one or the other of these beams had the track advantage and was sure to win. The result of the Michelson-Morley experiment was always a photo finish. Despite the enormous velocity of the Earth through space, a velocity that constantly changes its direction during the year, the two experimenters could detect no movement whatsoever of the luminiferous ether past the Earth.

Michelson and Morley's failure to detect the "ether wind" led physicists to propose that massive bodies such as the Earth trap the ether and carry it along with them. However, attempts to detect this "ether drag" near massive rotating bodies in the laboratory were unsuccessful. Ether drag should also distort the apparent positions of distant stars, an effect which was also noticeably absent.

To explain the failure of Michelson and Morley to detect an "ether wind," even more preposterous effects were invoked. Dutch physicist Hendrik Antoon Lorentz and Irish physicist George Francis FitzGerald independently proposed that motion through the ether resulted in a tiny contraction of all physical bodies in the direction of motion. The Lorentz-FitzGerald contraction - a kind of "ether squeeze" - could not be directly observed, because measuring rods also supposedly shrank when oriented in the ether wind's direction. The sole function of the Lorentz-FitzGerald contraction was to even the odds in the Michelson-Morley optical racetrack: the light beam that would have lost the race, by virtue of the L-F contraction would now travel a shorter path, and consequently both beams would reach the finish line at precisely the same time. This hypothetical "ether squeeze" was a desperate attempt to save appearances by loading the already peculiar ether with yet one more unusual attribute.

Although its properties grew more preposterous with each new investigation, the existence of the ether itself was never called into question. One of England's leading physicists, the eminent William Thomson, Lord Kelvin, expressed physicists' general attitude a few years after the Michelson-Morley experiment when he said, "One thing we are sure of, and that is the reality and substantiality of the luminiferous ether."

Despite physicists strong faith in the existence of the luminiferous ether, a few years after Lord Kelvin's profession of belief the ether was swept away into the junkyard of obsolete physical concepts in company with phlogiston, caloric, and the fabled philosopher's stone.
I had never heard of the luminiferous ether prior to stumbling upon the above passage and I wouldn't be surprised if you hadn't either. Scientists have no reason to go out of their way to publicize their embarrassing failures. Nonetheless, the acceptance of the luminiferous ether as fact survived for decades and was nearly universally endorsed by the scientists of that era.

The progression of knowledge demonstrated by this story is not uncommon. Theories are often constructed to explain existing data and have to be updated, modified, and/or extended as new information is discovered. For example, Darwin's theories of Natural Selection, Evolution, and Common Descent started out much simpler than they are today. Because Darwin's initial theories didn't match the fossil record, things like "punctuated equilibrium" had to be added to make the theories match the observations.

Indeed, to me, the evolution of the theories related to biological Evolution and Common Descent looks very similar to the evolution of theories concocted to explain observations related to the luminiferous ether. While I think that the theories of Evolution and Common Descent are probably more or less reflect deep reality, I have to admit that I probably would have been taken in by the luminiferous ether concept as well.

This realization has caused me to ask numerous questions. How do I know I'm right about Evolution and Common Descent when I would have been so ridiculously wrong about the luminiferous ether? How does anybody else really know? What's different this time? Why is it okay to dismiss out-of-hand those who think Common Descent is false as not even being worthy of debate? There are numerous other questions along these lines that could be asked as well.

Does anyone have any answers to these questions?

Thursday, September 29, 2005

Rocket Sled Earth

I've been accused, from time to time, about being wildly overly optimistic about the potential for technological progress to solve the problems of the world, especially problems related to the ecosphere and sustainability of the earth's populations. I think, however, that accusation is based on a misperception. It's not that I'm all that optimistic regarding the potential of technology. Rather, I'm wildly pessimistic about the future of the human race should technology not deliver the benefits I'm hoping for. In other words, I think that if technology won't save us, the human race is up the eco-creek without a bio-boat.

My favorite metaphor for the situation is that the ecosphere, including us, is a rocket sled heading at high speed toward a brick wall. The rocket's engines were ignited tens of thousands of years ago when trade was invented. I pick the invention of trade because that's the point where, along with the merchandise being traded, ideas and inventions were spread around the world within a few dozen generations, ensuring that humanity's aggregate knowledge would expand continuously, and that natural human inventiveness would inexorably lead to our current situation.

On this rocket sled, there's a brake and a throttle. We're going far too fast for the brake to stop us in time. We can slow down, for sure, and perhaps hit the wall a little later. However, if we're going to hit the wall in the not too distant future anyway, I personally don't care whether the rocket sled slams into the wall in 243 years or 347 years or whatever. Indeed, if the choice is 243 years of living it up versus 347 years of austerity, I'd certainly pick the former. In either case, the number of people who will have to deal with living through (or dying from) the resulting ecological catastrophe will probably be pretty similar and everybody before them will live better.

This rocket sled has an additional feature that I forgot to mention: little tiny wings. It might be, just maybe, if we're lucky and hit the throttle as hard as we can, these wings could lift the rocket off the ground, and we just might clear the brick wall and continue on, unscathed, with progress, technology, and wealth accelerating like never before. In my metaphor, the wings are technology, and the throttle is the growth (i.e., GDP growth) which pushes technology forward.


Wednesday, September 28, 2005

I'm Working on It

Our sole responsibility is to produce something smarter than we are; any problems beyond that are not ours to solve -- Eliezer S. Yudkowsky, from "Staring into the Singularity"
Helping create an entity that is more intelligent than we are is one of my (admittedly lesser) goals that I hope to achieve in my robotics work. I believe that it's achievable, if not in my lifetime, at least well before any truly unsolvable, catastrophic environmental problems arise. That's why I push far harder for policies that enhance economic growth (which in turn drives technology) than I do for things like environment friendly regulation.

I'm currently reading (scanning) Ray Kurzweil's The Singularity is Near, in which he reiterates a core belief of mine -- that technology is expanding at an exponential rate that is itself increasing exponentially. The resulting wealth and ability to mitigate problems that will result from this technological expansion will surpass our current capabilities by orders of magnitude in just a few decades.

So far, I recommend Kurzweil's book, though I'm only on chapter three. The quote above appears in the book.

Tuesday, September 27, 2005

Don't be sad, cause two out of three ain't bad

Price, performance and mileage as the three metrics for cars means that hybrids can now provide two out of three: the Prius has reasonable price(only slight premium) and good mileage but wimpy performance, other hybrids (ie Honda hybrids) have price and performance but uninspired mileage. If you want a car that will go like a bat out of hell, get great mileage, with price as no object then check out High-Performance Hybrids in NYTimes magazine section.

"Hold on to your hat!" Jim Burns shouted as he slammed the accelerator to the floor. With a high-pitched whine, the electric motor behind my seat burst into action, and "the Enigma" - an experimental red sports car in which I was riding shotgun - bolted forward, pressing me back into my leather seat. In about three seconds we were whipping through the San Diego State University campus at 50 miles an hour.

"We built her really low, so she totally hugs the ground," Burns said as we coasted to a stop at a large intersection near Highway 8. "Watch this." When the light turned green, he floored it again while yanking the steering wheel to the left so that in the middle of the intersection we performed two 360-degree doughnuts, complete with white smoke pouring off the shrieking back wheels. The nearby drivers stared. Giggling, Burns, a mechanical-engineering professor, straightened the wheel and roared out of the intersection; a stolen glance backward revealed that we had left a thick trail of burned rubber on the asphalt. We finally coasted to a halt near his campus laboratory, where a team of students was waiting with a video camera.

"Dude, that was awesome!" one of them blurted.

This, Burns argues, is the future of hybrids. Americans will never accept them if they remain small, meek vehicles like the Toyota Prius or the Honda Insight, which have low top speeds and lackluster pulling power. No, if hybrids are going to appeal to red-meat drivers across the country, they'll need power and performance. "We've got to produce a car that gets a 14-year-old boy excited," Burns said, flashing a bucktoothed grin as he sweated beneath the sun in a loud Hawaiian shirt. "We got to have the smoking! The squealing! The tires popping off!"

Burns is not alone in this belief. Indeed, in the last year the auto industry has decided to drastically bulk up its hybrids. Carmakers are ditching the bumper-car designs that have thus far defined the genre, and in the next two years, every new hybrid that hits the showroom will be a lumbering truck, a thundering S.U.V. or a high-powered luxury car. There is nary a podlike bubble among them. Normally these sorts of boats are infamous for their abysmal fuel economy. But when tricked out with hybrid drivetrains, they can squeeze up to 50 percent more out of a tank of gas. In essence, they are a compromise - nowhere near as good with fuel as a Prius but nowhere near as bad as a regular S.U.V. gas guzzler.

Eventually we can hope to see cars that are good on all three metrics, cars we can truly love!


I've been riding my bicycle to work more often recently, between once and twice a week. My main motivation is to do a little bit to help bring down gas prices, and though it may not seem like much, it represents a reduction of ten to twenty percent of the driving I do. If everybody did that, gas prices would fall significantly.

Unfortunately, I have two problems. First, I'm not all that fit right now (for me, anyway), so the twenty or so miles round trip with over 1,000 feet of elevation is a bit of a stretch for me. Second, there's no shower at work, so I need to avoid working up much of a sweat on the way in.

Thus, my strategy is to ride very slowly, exerting almost no effort, until someone passes me. Then I accelerate and get right on the passer's tail so that I can draft behind them, enabling me to go much faster, still without sweating. It works quite well, since I'm very good at drafting and have a lot of experience so it's not particularly unsafe.

The only problem is, my drafting seems to drive a few people who pass me crazy. I don't get it. It doesn't cost them anything, and if the don't want me to draft, they can always slow down to below my minimum speed, in which case I'll pass them and they can draft behind me (or not).

I have to believe that most bicyclists are also environmentalists. I wish I could convey to them that by being able to draft behind them, it makes it more likely that I take my bicycle more often, so that they are helping the environment. Not that it matters much - it's almost impossible to shake me off once I get behind them.

Monday, September 26, 2005

Lucky Day

Well, old Moses just used up several lifetimes worth of luck, all in one day:
A man who immigrated from Kenya to the United States found prosperity beyond his expectations on the day he became a U.S. citizen.

Shortly after Moses Bittok, of West Des Moines, took the oath of citizenship on Friday, he discovered he had a $1.89 million winning ticket from the Iowa Lottery's Hot Lotto game. "It's almost like you adopted a country and then they netted you $1.8 million," Bittok said Monday as he cashed in his ticket. "It doesn't happen anywhere — I guess only in America."

Bittok said he took the citizenship oath at the federal building in Des Moines Friday then went shopping with his family. They stopped at a gas station to check his lottery ticket from the Sept. 21 drawing.

I've seen it stated before, that a green card for a young person from a poor country is literally worth a million dollars in additional income over the course of the person's lifetime. The delta between green card and citizen is more subtle, but I know that I'd take the citizenship before the $1.8 million any day. But even better to get both at the same time!

It's better to be lucky than good, but best to be good 'n' lucky!

Saturday, September 24, 2005


Every week my older daughter's class at school has what is basically daddy show 'n' tell, where daddy (that'd be me) comes in and tries to be interesting to the kids in the class for twenty minutes or so. Being interesting to nine year olds is non-trivial. I brought in some robot components (McKibben pneumatic actuators, sometimes known as 'air muscles') and copies of my two rock 'n' roll CDs, one pair of CDs for each child.

The teacher listened to the CDs and decided they were inappropriate for the children and confiscated them (much to the dismay of my daughter). I probably should of thought of that ahead of time, but I've passed out these CDs to many of my daughter's classes and friends in the past and nobody had ever complained before. My CDs seem pretty tame to me, but I'll let those of you who have listened to them be the judge.

Thursday, September 22, 2005

Take a walk on the supply side

Take a walk on the supply side

She says, hey babe, take a walk on the supply side
Said, hey babe, take a walk on the supply side
And the entrepreneurs go

Op, op, op, op-portunity, ty, ty opportunity….

More than thirty years ago while still in high school I had a fascination with stock and futures markets. One thing which became clear to me was that the ideas and logic presented in the financial press had little to no correspondence with what actually happened. As I delved deeper into both economics and markets it seemed even worse than this - even after the fact explanations being offered were essentially garbage.

I was never a Leftist, but was too much of a liberal to ever vote for Ronald Reagan. However, by the end of his second term it was clear to me that Reagan had the better of it in the economic arguments with his critics. It was another few years until the breadth of my reading brought me to the works of authors propounding the supply-side ideas championed by Reagan.

Excerpts below are from this article by Bruce Bartlett.

An era ended on August 30 when Jude Wanniski, who did more than anyone else to popularize supply-side economics, died at age 69.

Jude’s real achievement was to recognize the importance of, and political potential for, the ideas that underlay supply-side economics. The originator of those ideas — at least in the modern sense — was economist Robert Mundell, later a winner of the Nobel Prize in economics, who first articulated them in 1971.

At the time, stagflation was the world’s biggest problem. Most economists said that the most important way to fix this scourge of inflation and slow growth was to reduce the budget deficit — by raising taxes if necessary. Mundell said this was nonsense. Inflation has nothing to do with budget deficits, he said; it is solely the result of an easy money policy by the Federal Reserve. And slow growth is primarily caused by excessive tax rates. So raising taxes to balance the budget is worse than doing nothing. It would make the problem worse.

Typically, Jude was not content simply to report a new idea. He proselytized for it. He was responsible for bringing supply-side economics to the attention of Bob Bartley, then editorial page editor of the Wall Street Journal; Irving Kristol, a New York University professor affiliated with AEI; and Kemp, who was then a congressman from Buffalo, New York.

Unfortunately, Jude put the same effort into advocating some bad ideas as he had for some good ones. In recent years, he became convinced that Saddam Hussein was innocent of the charges against him, and he looked ridiculous even to those who opposed the war in Iraq as strongly as he did. Jude also maintained a close relationship with Louis Farrakhan of the Nation of Islam, despite the latter’s frequent anti-Semitic ravings.

The excerpts below are from a terrific article by Bill Kucewicz. They contribute to a good example of some supply side angles on the 1990's. The graphs are a must see.

Frankly, Democrats haven't been able to fashion a credible economic policy since the Phillips Curve bit the dust. The Keynesian party now claims, for example, that balanced budgets (and not deficit spending) are the sine qua non of economic growth.

It's a ruse, of course. If the Democrats were serious about balanced budgets, they'd speak not only of tax hikes but also spending cuts. Instead, they are using the balanced-budget argument as a means of keeping money in Washington in the belief that the indefinite expansion of government, both in scope and size, is their surest way of securing and maintaining political power.

Fact is, most Democrats are willing to sacrifice jobs and business creation in order to keep the federal government's take of the national economy large. Their income-tax policies actually aim to swell the federal treasury at the economy's expense.

An economy depends on the availability of financial capital to fund new ventures, transform ideas into reality, and raise productivity. Pumping in investment capital thus creates new jobs, boosts real wages, and ups living standards.

But Washington's tax-and-spenders ignore financial capital's crucial role. They treat this money as if it can be taxed away from individuals (and corporations) with impunity.

Nothing could be farther from the truth. The propensity to invest rises with income. Indeed, there appears to be a threshold level, perhaps around $70,000 a year, at which households seriously begin to invest significant amounts of earnings. Those making less money typically spend most, if not all, of their income on consumption.

But economic growth isn't driven by consumption; it's driven by production. And production requires two types of capital — i.e., labor capital and financial capital. When Washington siphons off significant amounts of financial capital through taxation, the economy is less able to employ the other form of capital, namely labor. Which helps explain why the U.S. slips into recession whenever the tax burden becomes too great.

The lesson of the '90s then is that the forces of technological and demographic change were so strong as to overcome the negative consequences of the 1993 tax increases. The economy boomed despite the tax hikes, not because of them.

The increasing tax burden couldn't be shouldered forever, and the economy hit a wall after federal tax receipts as a percentage of nominal GDP reached a record 21.1 percent in the first quarter of 2000. (Since the end of World War II, the average has been 18.1 percent.) Year-on-year GDP growth fell from 4.9 percent in the second quarter to 3.5 percent in the third and 2.2 percent in the fourth quarter of 2000 — and continued sliding into the 2001 recession.

Higher tax rates don't grow an economy; high levels of investment do. And one is antithetical to the other.

Some of the better supply-siders said that the 1993 tax hike would cause problems later as the burden rose, but that since the tax on capital gains was not raised at the time things would be ok.

I have studied many strains of economic thought including Keynesian, Austrian and an updated version of Classical economics dubbed Supply-side. It's been a valuable source of good ideas!


In these uncertain times (when are things not uncertain?) with costly natural disasters, a war and growing entitlements to pay for, some people are calling for sacrifice. I’m not one to make the usual gratuitous calls for sacrifice or to advocate austerity (root-canal economics). Under these circumstances it would be more helpful than ever to “go-for-growth”. In this light, I’m calling for a truly serious sacrifice. The following can best capture the nature of this sacrifice:
Let Us Now Try Liberty

God has given to men all that is necessary for them to accomplish their destinies. He has provided a social form as well as a human form. And these social organs of persons are so constituted that they will develop themselves harmoniously in the clean air of liberty. Away, then, with quacks and organizers! Away with their rings, chains, hooks, and pincers! Away with their artificial systems! Away with the whims of governmental administrators, their socialized projects, their centralization, their tariffs, their government schools, their state religions, their free credit, their bank monopolies, their regulations, their restrictions, their equalization by taxation, and their pious moralizations!

And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works.

In case you do not recognize the above quote, it is the concluding section of a work titled The Law authored by Frederic Bastiat in the 1840s. I hope to highlight in a future post why the expressed sentiments were so salient given the intellectual and political environment in which Bastiat lived.

Here is the sacrifice I am calling for: to whomever it applies, give up the socialist fantasy, let us pursue that which actually works.

Wednesday, September 21, 2005

Intelligent Design Economics

I wrote recently about why I think that it's unlikely that the federal government will ever be able to do a good job leading natural disaster relief efforts. Just today, I've noticed that Arnold Kling is in the middle of a series of essays at Tech Central Station about the same subject. The first essay, titled A Challenge for Brad DeLong, (Brad DeLong is an economist at UC Berkeley) points out that economists like DeLong seem to believe that:
An Intelligent Designer can create policies, programs, and organizations through legislative fiat and top-down administration that operate effectively in a centralized manner. Government agencies and bureaucracies are like highly-tuned cars, needing only good navigators and drivers to race them to their goals.
Kling believes the opposite as shown by his following statements:
Large organizations, in the private sector and the public sector alike, are inherently dehumanizing to employees, clumsy, inflexible, and unable to handle sudden new challenges. In addition, public sector organizations are hampered by political constraints and the stultification that comes from the absence of competition.
Kling also echoes my sentiments that the people screaming most loudly that government failed in the wake of Katrina are the same people screaming for more government:
For the most part, however, believers in Intelligent Design are impervious to empirical data. The more government fails, the harder they want to try. If public education performs poorly, then spend more money or impose more centralization in the name of "No Child Left Behind." If Medicaid fails in its mission to ensure good health care for people on low incomes, then expand it. If pork-barrel public works projects contributed to the catastrophe in New Orleans, then appropriate billions for pork-barrel public works projects as "relief."
Kling's latest TCS column is the first part of a two part essay about the inherent conflict between planning and improvisation within in an organization. Large organizations must excel at planning (since they are unable to improvise well), while smaller ones must excel at improvisation. Regarding natural disasters, there needs to be some of each.

This essay sets the stage by beginning to explain why huge private enterprise organizations such as Walmart seem to be so far superior to small decentralized competition even though, according to Kling, large organizations are clumsy and inflexible:
Large organizations exist, in spite of their awkwardness, because they create or exploit economies of scale. Wal-Mart built an efficient, globe-spanning logistics system, which can bring the right products from the right suppliers to the right stores at the right time. It turns out that in comparison to smaller retailers that lack such a logistics system, Wal-Mart is able to operate with much lower costs. This scale economy offsets what would otherwise be the organizational disadvantage inherent in Wal-Mart's sheer size.
The next essay promises to discuss "how military operations, disaster planning, and many other government functions are necessarily caught between the two extremes" of planning and improvisation.

I'm looking forward to it!

Universal Warming

Not only is beautiful mother earth suffering from global warming, but so is Mars:
[F]or three Mars summers in a row, deposits of frozen carbon dioxide near Mars' south pole have shrunk from the previous year's size, suggesting a climate change in progress.
It's amazing how a little extra CO2 on earth can change the climate throughout the solar system.

In other news, the planets in the Alpha Centuri system are experiencing an unusually hot summer...

Monday, September 19, 2005

Quote of the Day

Well, I don't really do a lot of "quotes of the day", but here's a quote I ran into a while back that I liked:
Writers on the Left also have a pechant for trying to make their philosophical arguments both complex and remote at the same time, as if writing something that tortures both the English language and the reader's ability to diagram the logic makes the argument an intelligent one all by itself. (John Lee, in a comment at Brothers Judd).
Admittedly, it's not only writers on the Left that have this problem, but rather most writers who cannot support a point by straightforward and simple logic.

Saturday, September 17, 2005

Another Central Planning Disaster

The gist of Hurricane Katrina related comments I've heard from many people goes something like this:
Government really messed up the relief effort for Katrina, but let's keep putting our faith in government to lead the relief efforts for future natural disasters.
To be sure, it's never put quite that way. There's always some caveat that dilutes the blatant absurdity of the argument. For example, a common version of the statement is that the government led by Bush failed, but a government led by a Democrat would, of course, have performed flawlessly. And of course, Republicans, by and large, take the other side - if it weren't for those corrupt Democrats in office in New Orleans and Louisiana, there wouldn't have been any problems with the relief effort.

Our elected leaders aren't the ones who perform the actual work of the relief effort. And the work for the relief effort isn't directly performed by those people that our elected leaders appoint either. The people who actually provide the relief services are bureaucrats and civil servants, and these folks remain the same no matter who is elected (and they're usually not the smartest or most motivated people you've ever encountered). Thus, the relief effort we saw for Katrina (at least at the federal level) is likely to be about what we'll see for other comparable disasters in the future. Indeed, looking back, the speed of the federal response to Katrina was very similar to that for previous storms.

Over the last few decades, most people have come to realize that the concept of central planning is disastrous for an economic system because central authorities simply don't have access to and/or the capability to process the overwhelmingly huge amount of localized information distributed throughout the economic system. Put more simply, the central authorities don't and can't have a clue about what's going on almost everywhere and, as a result, can't make very good decisions regarding economic policy.

This same informational deficit applies to centrally planned disaster relief. Some random bureaucrat in D.C. has no idea what the bridges in N.O. look like, their status, or even how to get to them. They could use MapQuest like you or me, but I can't count how many times MapQuest's directions have led me to a dead end. And there were a lot of dead ends in New Orleans after Katrina struck that weren't previously on the map. Disaster relief efforts must be led locals because outsiders are at a huge informational disadvantage. A well timed, well executed federal led response is never going to happen. The local citizenry and secondarily, local officials, must lead the way.

There's an immediate, but superficial, rebuttal to this argument that disaster relief should be led by locals: in the case of Katrina they didn't do such a great job either. Both the planning and actions preceding the storm and the actions after Katrina struck were far from perfect.

Let's first consider the situation prior to the storm. For sure, lots of things could have been done differently. Lots more money could have been spent, for example, on the levee system. The citizens themselves could have been better prepared (by stocking food and water).

But let's put things in perspective. Katrina was nearly a worst case storm - certainly the worst, all things considered, in decades. Yet, less than 1,000 people died. On average, each year, some number of tens of people die due to hurricanes. Compare that impact from hurricanes to that wonderfully dangerous activity nearly all of us do more or less every day - driving. On average, each year, some number of tens of thousands of people die in automobile accidents. Nearly one thousand times as many people die in car accidents as hurricanes. Thinking that the planning and actions for hurricanes and the associated relief effort should be a top priority relative to everything else exhibits a deep innumeracy.

In other words, it might have actually been pretty darn rational not to have spent billions and billions of dollars ahead of time. Not that many people died, everyone else will recover, many, many, many people are actually better off now (making new and better lives elsewhere), and we can always rebuild New Orleans - or not, the choice is ours.

As another example, consider this. It is possible for a category 5 tornado to strike anywhere. Granted, it's exceedingly unlikely outside of the great plains, but still possible. A huge (greater than 9.0) earthquake can also strike anywhere. It is theoretically possible to build every new building and structure and retrofit every old one to withstand these natural disasters. But, this isn't done and there are no plans to do so. That's because it's prohibitively expensive to do so. It simply makes more sense to roll the dice, take our chances, and recover as best we can from those disasters that do strike.

What I'm saying is that, except for those few hundred people who rolled the dice and lost their lives because of Katrina, the planning and actions before the storm (or lack thereof) were perfectly rational. It simply made more sense to spend the money and effort elsewhere.

Friday, September 16, 2005

Deficits and the economy

Federal budget deficits must be a bad thing, right? The word deficit sounds so negative, but that impression can be very misleading. A country willing to follow pro-growth economic policies has considerable flexibility in managing deficits and accumulated indebtedness. Countries with stagnant economies have less flexibility. If the deficit is part of a set of policies which include expenditures to protect wealth and support additional wealth creation, especially if they include tax relief targeted towards saving and investing, then it can properly be thought of as an investment in future growth.

This website by Steve Conover has some very good material along this line of reasoning.  (updated link here)

As a thought experiment: if we ran budget deficits every year which averaged the same as the long-term growth rate of the economy then the outstanding indebtedness (accumulated debt) would remain constant relative to annual economic activity. Yes, deficits every year but no increasing burden in relative terms. As a practical matter, it's probably best to run smaller deficits (relative to the size of the economy - no hysteria about the absolute numbers please) during a boom and then tolerate somewhat larger deficits in a recession. Unlike individuals, who usually wish to payoff outstanding debts before they die, our government should operate as an "ongoing entity" and manage the debt to good advantage. Also, unlike individuals, the tax base is diversified across all activity, not just a single job.

Realize that obsession over deficits without considering the policy mix which brings them about is an extremely "government-centric" view of the economy. It is very important to consider the impact of incentives upon individuals and businesses in the much larger private sector (for-profit and not-for-profit).

This is a link to an earlier post, Let's get fiscal, on the more recent history of deficits and the economy.

Below are some excerpts(emphasis mine) from a renowned book by George Gilder titled Wealth and Poverty which are relevant to this subject. Here is a review of the book from when it was written in 1981.  (updated link here)

Deficits - Wealth & Poverty

Starting on p.239 of Wealth & Poverty

…The purpose of the (tax) cuts, it must be stressed, is to expand the tax base – to make the rich pay more taxes by inducing them to consume less and to work and invest more. If deficits arise as an initial result, no one should panic. In an economy with an overweening public sector, deficit spending, even in substantial amounts, is decidedly preferable to tax increases.

...To imagine that issuing a bond is better than levying a tax is to suffer from "bond illusion"- the idea that we can get something for nothing by manipulating financial instruments. There is no such thing, we are told, as a free lunch; all lunches must come out of the real production of the economy. This is a hard-earned and valuable truth. But it is a half-truth, for it implies that "the economy" and other such concepts, like "the money supply" or "industrial capacity" or "the supply of labor" or "the reserves of natural resources" are definite and measurable things, subject to mathematical laws.

...There is no such thing as a free lunch. But there is no such thing as a measurable "economy" or an absolute "supply" of money, labor, or resources.

Labor and resources, for example, are enormously elastic. ... In an overtaxed system, the statistics of limits and capacity are mostly mush.

Any resource depends largely on ideas and technologies, which change rapidly. ...

When the government chooses to spend a billion dollars more, what chiefly matters is not the extraction of resources or use of capacity that the spending entails, but the impact on the incentives and the creativity of businesses and workers. ...

Deficit spending can be a way of protecting the private sector and its most catalytic investments from the effects of direct taxes. ... Taxes, though, are an immediate and direct burden, with effects that are magnified by the high return on investment of rapidly growing firms.

It is always best to cut government spending wherever its yield or benefit is less than private spending. But in the absence of this best policy, governments should not, as nowadays they so often do, resort to the worst policy: increasing marginal tax rates or rejecting their retrenchment in order to achieve a "balanced budget" and fight inflation. It will not work.

Where does this leave the canons of fiscal integrity that have so long been preached by most responsible economists? It turns fiscal integrity from a numerical exercise into the vital art of preserving and expanding the real and seminal wealth of the nation. This means not merely balancing income and outgo but balancing the prospective yields of government and private activity and financing profitable long-term projects in either sector by appropriate issues of debt. Under current circumstances reversion to the conventional kind of fiscal integrity of accounting balances will always result in an irresponsible and destructive resistance to tax cuts. As long as capacity is considered to be an inelastic number - as long as the economy is treated as a sum of measurable quantities - increases in government spending will inevitably require rises in tax rates and the closing of the horizons of growth.

But within that calculus of pay-as-you-go lunches there is no room for creativity and inspiration, no room for the incalculable and unprovable supply-side responses that are the mustard seeds of the capitalist miracles of growth. …it is only the physical part of our wealth that is finite. Its metaphysical sources (imagination and creativity) are infinite. There are free lunches under capitalism because there are free minds and free men – because of the limitless returns on metaphysical capital… But these benefits always elude the computations of aggregate economics.

Debt that is wantonly monetized or accompanied by chaos, as during the French revolutionary era, or debt that is prodigally incurred in order to destroy the unit of account of other debt, as in Weimar Germany, can bring ruin…. But debt that is incurred for capital projects of benefit to citizens and their productivity, or debt that is incurred to avoid inflicting destructive taxes on growing firms – such liabilities can become vital assets of growth and progress. The worst economic disaster is to blight the future by suppressing the catalytic ventures on the economic frontier.
In an expanding economy money available now for investment is many times more valuable than money paid later in interest… Only in a static, uncreative economy does it pay to pay as you go.

Budgeting in a growing capitalist economy is not zero-sum, and time is not linear. Money to be paid beyond a certain future point dissolves almost entirely; even in accounting, an annual payment of a hundred dollars forever has nearly the same value as a payment of a hundred dollars for twenty years. Time is capital in a growing system and dwarfs all debt.

The United States must overcome the materialist fallacy: the illusion that resources and capital are essentially things, which can run out, rather than products of human will and imagination, which in freedom are inexhaustible. This fallacy is one of the oldest of economic delusions, from the period of empire when men believed that wealth was land, to the period of mercantilism when they fantasized that it was gold, to the contemporary period when they suppose it is oil… Throughout history, from Venice to Hong Kong, the fastest growing countries have been the lands best endowed not with things but with free minds and private right to property.

Thursday, September 15, 2005

Shell Oil Shale Oil

According to an article by Linda Seebach of Rocky Mountain News, researchers at Shell Oil "have been spending their own money trying to figure out how to get usable energy out of oil shale." And they think they've got it:
Shell's method, which it calls "in situ conversion," is simplicity itself in concept but exquisitely ingenious in execution. Terry O'Connor, a vice president for external and regulatory affairs at Shell Exploration and Production, explained how it's done (and they have done it, in several test projects):

Drill shafts into the oil-bearing rock. Drop heaters down the shaft. Cook the rock until the hydrocarbons boil off, the lightest and most desirable first. Collect them. [...]

They don't need subsidies; the process should be commercially feasible with world oil prices at $30 a barrel. The energy balance is favorable; under a conservative life-cycle analysis, it should yield 3.5 units of energy for every 1 unit used in production. The process recovers about 10 times as much oil as mining the rock and crushing and cooking it at the surface, and it's a more desirable grade. Reclamation is easier because the only thing that comes to the surface is the oil you want.
If this process actually works, it allows profitable access to a trillion barrels of oil in Colorado's Green River Basin. Most analysts believe that the price of oil will remain above $30 per barrel forever. Even if they're wrong (and I suspect they might be), these shale oil wells are relatively small and not particularly capital intensive so Shell can turn them off until they're profitable again without incurring much of a loss.

If this process actually works, the United States' oil production peak might not have already passed. We may see decades of plentiful oil and stable oil prices with greatly reduced dependence on foreign producers.

Go Shell!!!

Monday, September 12, 2005

Poverty Poorly Understood

The official poverty rate has been creeping up since Bush took office after dropping a bit during the Clinton years. This fact has, of course, provided yet more ammunition to bash those eeeeevil republicans. I've started looking into what it means to be in poverty in the United States and this post describes some of what I've found so far.

The first thing that's interesting, is that the poverty rate has remained in a fairly narrow band since 1969 (before that yearly figures are unavailable). According to the Census Bureau, the poverty rate for people in the United States was 12.1% in 1969 and in 2004 it was 12.7%. The low of (11.1%) occurred in 1973 under Nixon (I never realized he was such a champion for the poor) and the high (15.2%) occurred in 1983 under Reagan, culminating an upward trend that began under Carter. Thirty five years of technological advancement, the GDP per capita almost doubling, periods of both republican and democratic majorities, and yet the poverty rate stays more or less the same. Pretty amazing, isn't it?

Let's examine how it's determined that a person is in poverty. The Census Bureau "uses a set of money income thresholds that vary by family size and composition to determine who is in poverty. If a family's total income is less than the family's threshold, then that family and every individual in it is considered in poverty. The official poverty thresholds do not vary geographically, but they are updated for inflation using Consumer Price Index (CPI-U)."

That last sentence contains an interesting point. The poverty thresholds are updated by the Consumer Price Index. Many economists think that the CPI is significantly overstated (and I strongly agree). For example, an International Monetary Fund report states that:
In a recent study, the US Advisory Commission to Study the Consumer Price Index (more commonly known as the Boskin Commission, whose chairman was Michael Boskin, former chief of the US Council of Economic Advisers) estimated that the US CPI overstated inflation by 1.1 percentage point in 1996 and by slightly more in each of the previous 20 years. Thus, although the official rate of inflation for 1996 was 2.9 percent, the true rate may have been in the neighborhood of 1.8 percent. This upward bias arises because the CPI methodology does not adequately capture shifts in consumer purchases when relative prices move, the effects of changes in the quality of goods and services, the introduction of new products, or the growing number of discount stores. While some experts have disputed that the upward bias is as large as has been suggested by the Commission, there is a growing consensus that there may indeed be significant bias.
If the CPI should've been set 1.1% lower per year (which I believe is a reasonable estimate), then the poverty levels relative to 1969 are nearly 50% too high (which means that the poverty levels should be about 67% of what they are). Since the number of people in 2004 below 50% of the poverty level is 5.4% of the total population, we can conclude that if the CPI had not had the upward bias described above, the poverty level would be somewhere between 12.7% and 5.4%. A linear interpolation between the two percentages yields 7.9%.

Under this scenario using the lower, possibly more realistic CPI, the poverty rate would have declined gradually from 12.1% to 7.9% during the last 35 years. And it turns out that there is other evidence to support the concept that the poverty rate is overstated relative to the past. Consider the following excerpt from an article in the New York Times:
In 1972-73, for example, just 42 percent of the bottom fifth of American households owned a car; in 2003, almost three-quarters of "poverty households" had one. By 2001, only 6 percent of "poverty households" lived in "crowded" homes (more than one person per room) - down from 26 percent in 1970. By 2003, the fraction of poverty households with central air-conditioning (45 percent) was much higher than the 1980 level for the non-poor (29 percent).

Besides these living trends, there are what we might call the "dying trends": that is to say, America's health and mortality patterns. All strata of America - including the disadvantaged - are markedly healthier today than three decades ago. Though the officially calculated poverty rate for children was higher in 2004 than 1974 (17.8 percent versus 15.4 percent), the infant mortality rate - that most telling measure of wellbeing - fell by almost three-fifths over those same years, to 6.7 per 1,000 births from 16.7 per 1,000.

In other words, in very measurable ways, those in poverty are, on average, significantly better off than they were 30 years ago. Again, I believe this to be an artifact of overstating the CPI.

Since poverty levels are based on income, it's important to consider what counts as income. The Census Bureau's definition includes "earnings, unemployment compensation, workers' compensation, Social Security, Supplemental Security Income, public assistance, veterans' payments, survivor benefits, pension or retirement income, interest, dividends, rents, royalties, income from estates, trusts, educational assistance, alimony, child support, assistance from outside the household, and other miscellaneous sources" before taxes.

The definition specifically excludes "[n]oncash benefits (such as food stamps and housing subsidies)" and, more importantly, "capital gains or losses". This means that if I have $100 million in assets, and all of those assets are stocks that don't pay dividends, and I choose not to work, and I just sell some of my stock each year to live, I would be considered to be living in poverty. While this example is meant to be a non-realistic exaggeration to catch your attention, there is no doubt that many people who have significant assets (to the tune of hundreds of thousands of dollars), who have been unemployed long enough for their unemployment benefits to run out, but haven't yet found their next job are being classified as poor. Yet it's difficult for me to really think of someone with substantial assets as being poor.

Instead of considering how much someone makes, another way to think about economic well being is to consider how much someone can spend. Switching to the "outflows" point of view would help to distinguish between those that are really poor and those that are identified by a flawed measure of poverty. Continuing with the New York Times article identified above, we see that the ratio of outflows to income has increased substantially over the past few decades:
In the Labor Department's latest Consumer Expenditure Survey (2003), the average reported income for the bottom fifth of households was $8,201, while reported outlays came to $18,492 - well over twice that amount. Over the past generation, that discrepancy widened significantly: back in the early 1970's, the poorfifthsth's reported spending exceeded income by 40 percent.
This is evidence that many of those in poverty today have access to adequate resources (some combination of assets or credit or other resources) to significantly reduce the burden of their time in poverty.

Basically, no matter how I look poverty in the United States, it looks like the classification of the poor is based on highly inaccurate measures and that the poor are actually slowly becoming better off in an absolute sense.

Thursday, September 08, 2005

Katrina Dreamin'

I've just discovered the essay that most reflects my general attitude toward all the bloviating regarding the blowin' down 'round Nawlins last week. It's by Newton Emerson and was published in the Irish Times. It's titled "Ill wind may not blow to the Whitehouse":

As the full horror of Hurricane Katrina sinks in, thousands of desperate columnists are asking if this is the end of George Bush's presidency. The answer is almost certainly yes, provided that every copy of the US Constitution was destroyed in the storm. Otherwise President Bush will remain in office until noon on January 20th, 2009, as required by the 20th Amendment, after which he is barred from seeking a third term anyway under the 22nd Amendment.

As the full horror of this sinks in, thousands of desperate columnists are asking if the entire political agenda of George Bush's second term will not still be damaged in some terribly satisfying way.

The answer is almost certainly yes, provided that the entire political agenda of George Bush's second term consists of repealing the 22nd Amendment. Otherwise, with a clear Republican majority in both Houses of Congress, he can carry on doing pretty much whatever he likes.

As the full horror of this sinks in, thousands of desperate columnists are asking if the Republican Party itself will now suffer a setback at the congressional mid-term elections next November.

The answer is almost certainly yes, provided that people outside the disaster zone punish their local representatives for events elsewhere a year previously, both beyond their control and outside their remit, while people inside the disaster zone reward their local representatives for an ongoing calamity they were supposed to prevent. Otherwise, the Democratic Party will suffer a setback at the next congressional election.

As the full horror of this sinks in, thousands of desperate columnists are asking if an official inquiry will shift the blame for poor planning and inadequate flood defences on to the White House. The answer is almost certainly yes, provided nobody admits that emergency planning is largely the responsibility of city and state agencies, and nobody notices that the main levee which broke was the only levee recently modernised with federal funds. Otherwise, an official inquiry will pin most of the blame on the notoriously corrupt and incompetent local governments of New Orleans and Louisiana.

As the full horror of this sinks in, thousands of desperate columnists are asking if George Bush contributed to the death toll by sending so many national guard units to Iraq.

The answer is almost certainly yes, provided nobody recalls that those same columnists have spent the past two years blaming George Bush for another death toll by not sending enough national guard units to Iraq. Otherwise, people might wonder why they have never previously read a single article advocating large-scale military redeployment during the Caribbean hurricane season.

As the full horror of this sinks in, thousands of desperate columnist are asking how a civilised city can descend into anarchy.

The answer is that only a civilised city can descend into anarchy.

As the full horror of this sinks in, thousands of desperate columnists are asking if George Bush should be held responsible for the terrible poverty in the southern states revealed by the flooding.

The answer is almost certainly yes, provided nobody holds Bill Clinton responsible for making Mississippi the poorest state in the union throughout his entire term as president, or for making Arkansas the second-poorest state in the union throughout his entire term as governor. Otherwise, people might suspect that it is a bit more complicated than that.

As the full horror of this sinks in, thousands of desperate columnists are asking if George Bush should not be concerned by accusations of racism against the federal government.

The answer is almost certainly yes, provided nobody remembers that Jesse Jackson once called New York "Hymietown" and everybody thinks Condoleezza Rice went shopping for shoes when the hurricane struck because she cannot stand black people.

Otherwise sensible Americans of all races will be more concerned by trite, cynical and dangerous political opportunism.

As the full horror of that sinks in, this columnist is simply glad that everybody cares.

Yup, I care too, but I like to keep things in perspective.

Saturday, September 03, 2005

Hurricane Force Bush Bashin'

Like most other bloggers who have written about hurricane Katrina and her aftermath (I'm so relieved they named this hurricane with a girl's name), I know almost nothing about disaster planning (actually, I'm very good at planning disasters - it's the recovery part that's always alluded me). Also like most other bloggers who have posted on this subject, I'm not going to let a little thing like ignorance get in my way of spewing forth passionately about the topic. Well, I might not quite achieve "passionately", but I'll do my best.

To the casual (and ignorant) observer (that'd be me), the evacuation and relief efforts look like amazingly gross incompetence of local government being slowly and not particularly competently bailed out by the federal government. Well, that's government for you!

My first (chronological) observation is that the responsibility for planning for a predictable disaster is local, not federal. The amazing thing about the New Orleans (NO) hurricane evacuation and relief plan was that they had a dry run (well, not so dry) last year with hurricane Ivan.
A year ago, New Orleans reviewed its hurricane disaster plans after Hurricane Ivan gave the city a major scare forcing the evacuation of nearly 1 million people from the area.

What happened last September bears striking similarities to the problems encountered before Hurricane Katrina struck. The only difference was Ivan missed the city.

There were hours-long traffic jams. Those who had money fled, while the poor stayed. The warnings were the same: Forecasters predicted that a direct hit on the city would send torrents of water over the city's levees, creating a 20-foot-deep cesspool of human and industrial waste. [...]

Gov. Kathleen Blanco and Nagin both acknowledged after the Ivan near miss they needed a better evacuation plan.
But, of course, they didn't bother actually doing anything about it. The interesting thing to me is the lack of creativity involved. There are aerial photos of half submerged parking lots with hundreds of buses in them - oil slicks emanating from their engine blocks into the water - now totally ruined. On the other hand, there were tens of thousands of people who would've liked to evacuate prior to the storm but had no transportation. Does it really take a genius to figure out that they could've put the people in the buses and driven out of the city which would have saved a great deal of suffering (not to mention hundreds of buses)? Especially after last years' dry run?

These last two questions were readily answered in the negative by a Mr. Jabbor Gibson, who commandeered an abandoned school bus and filled it with elderly, teens, a toddler, and an infant, and drove it out of New Orleans to Houston:

Eighteen-year-old Jabbor Gibson jumped aboard the bus as it sat abandoned on a street in New Orleans and took control.

"I just took the bus and drove all the way hours straight,' Gibson admitted. "I hadn't ever drove a bus."

The teen packed it full of complete strangers and drove to Houston. He beat thousands of evacuees slated to arrive there. [...]

One 8-day-old infant spent the first days of his life surrounded by chaos. He's one of the many who are homeless and hungry.

Authorities eventually allowed the renegade passengers inside the dome. But the 18-year-old who ensured their safety could find himself in a world of trouble for stealing the school bus.

"I dont care if I get blamed for it ," Gibson said, "as long as I saved my people."

Why couldn't the mayor of NO figure out this concept? Beats me. Doesn't seem hard.

So now, zooming from NO to D.C., it does seem that the federal government was too slow in getting into the act. I understand that when the basic infrastructure is as badly damaged as it is in NO, it's hard to get started. No electricity, no pumps, no clean water, no phones, no roads. Yup, pretty grim. But still, couldn't the process have started a little faster? Even Bush has admitted that the FEMA has taken too long and Bush is ultimately responsible.

So Bush certainly set himself up for the very predictable and loud yowlings of incompetence coming from the Left. Though I have to wonder why the Left is wasting its energy. This is Bush's 2nd and last term - he'll be out of office at the end of it no matter what. What's the point?

Friday, September 02, 2005


I'm looking forward to reading Ray Kurzweil's The Singularity Is Near : When Humans Transcend Biology. I've been threatening for years now to write an essay (long and complex) on why we should run federal (and state) budget deficits, and the contents of this book (I believe) hold part of the key to that equation. Here's an excerpt defining what a "Singularity" is in this context from an interview of Kurzweil by InstaPundit:
The term “Singularity” in my book and by the Singularity aware community is comparable to the use of this term by the physics community. Just as we find it hard to see beyond the event horizon of a black hole, we also find it difficult to see beyond the event horizon of the historical Singularity. How can we, with our limited biological brains, imagine what our future civilization, with its intelligence multiplied billions and ultimately trillions of trillions fold, be capable of thinking and doing? Nevertheless, just as we can draw conclusions about the nature of black holes through our conceptual thinking, despite never having actually been inside one, our thinking today is powerful enough to have meaningful insights into the implications of the Singularity. That’s what I’ve tried to do in this book.
I consider myself part of the "Singularity aware community", though we'll see if I still feel that way after the book comes out this month.