28 Jun 2013

Anything but water

This is ONE photo, not four (click to enlarge)
  1. Google Reader will shut down on Monday. I don't use it, but over 1,000 people subscribe to this blog on Google Feedfetcher, which seems to be part of Reader. Here's a post on alternative readers. Feel free to leave suggestions or solutions in the comments to this post

  2. Tracy Mehan asks "why do we need a farm bill?" Good question -- I asked it five years ago

  3. Why charities should operate like businesses (e.g., bonuses, etc.)

  4. Want to save the planet? Buy an "earth share" for conservation. Not sure if this is a scam like moon shares. Thoughts?

  5. Don't harness energy from workout machines. Ride a bike to work! On that note, how the Dutch got their bike paths... in the 70s!

27 Jun 2013

American priorities?

Real happiness?
Americans are famous for their large portions and proportions, which may indicate that they've lost their sense of scale.

Start with the Keystone XL, which would run 1,900 km from Canada to Nebraska and carry 890,000 barrels of oil a day (bbl/d). The existing Keystone (not XL) pipeline already carries 590,000 bbl/d on the 3,400 km between Alberta to Illinois.

Next, consider that Americans consume 18.9 million bbl/d and the country is crossed by 244,000 km of oil pipelines -- and 548,000 km of natural gas pipelines. The Keystone XL would, therefore, add about 0.7 percent to the length of US pipelines. It would not change American oil consumption (demand); it would only change whose oil we'd consume (supply mix).

Now, reflect on the fact that the US government spends over $1 trillion per year on "defense" but we have not -- I'd argue -- had to defend ourselves against invasion since World War II. The budgets of similarly misnamed "Homeland Security" and "National Intelligence" agencies are $46 billion and $80 billion per year (perhaps more, since budgets are also a secret). These figures mean that Americans pay about $3,600 each for "services" that may not be effective. Even worse, we now know of massive, unconstitutional, and useless (as far as terrorism is concerned) spying on Americans by the NSA et al. We are, in other words, paying to be violated by nearly one million "top secret" people who watch us, criminalize us on secret lists, and occasionally torture or kill us (whoops!). Many spies work as contractors mercenaries for government bureaucracies that are overseen by secret courts and tribunals whose members, rules and decisions are secret-secret -- we can't even know what secrets they are discussing, but we do know that citizens are seen as part of the problem:

So how much weight do Americans put on these two issues?

Google returns 207,000 hits for "Keystone XL protest", i.e., Americans protesting against a pipeline that brings oil that Americans demand. The government has very little control over that demand (except perhaps through energy taxes or regulations). In April, 50,000 people marched on Washington DC.

Google returns 2,800 hits for "NSA protest", i.e., Americans protesting against the infringement of our rights, using our money, by agencies that are totally controlled by the US government. "Dozens" have protested the NSA in Washington DC.*

Bottom Line: I'm really wondering where Americans left their senses of perspective, proportion and violation? It seems that Americans think stopping ONE pipeline is going to reverse climate change? It seems that Americans think that spying, killing, invading, and terrorizing people here and abroad is making the world a better place. It seems that Americans think pushing a string will save the planet at the same time as they think that it's a great idea to pay for the noose that's tightening around their necks. Seriously. WTF?

* Some people are organizing "Restore the 4th [Amendment]" protests for July 4th. Good.

Addendum: Frank and Martin have a GREAT POST on exactly this topic -- priorities -- that puts on a positive spin (use the money for human development instead of destruction). Hear hear!

26 Jun 2013

Speed blogging

  1. 350+ pages of articles [pdf] on the law (80%) and economics (20%) of fracking in the Case Western Law Review

  2. Science! International groundwater resources, the World-wide Hydrogeological Mapping and Assessment Programme, and groundwater in Canada.

  3. Maria Kouyoumijian's thesis on "water futures" in the UK looks [pdf] at the price of water as a function of scarcity, efficiency and politics. On my fast reading, it seems that politics (=high dividends to shareholders) dominates.

  4. The "new normal" in California water means existing rights, models and infrastructure are increasingly irrelevant

  5. Check out Elinor Ostrom's 1965 Dissertation on "public entrepreneurship for managing groundwater" in Southern California [pdf]. She was not just one of the earliest institutional economists; she also had a hand in the foundation of "public choice" (i.e., bureaucrats serve themselves, for good or bad).
H/Ts to MC, TS and VV

25 Jun 2013

Wanna be an INTRApreneur?

I've met Joe Agoda -- he's a busy guy:
This two and half week online, interactive and self-paced TechChange mini-course provides participants with the skills needed to practice intrapreneurship or successfully partner with intrapreneurs in the work place... Intrapreneurship is defined as entrepreneurial behavior from within a large, established institution. Intrapreneurs are talented individuals valuable for international development organizations, non-profits and businesses because of their ability to raise money, maximize existing institutional resources, and take smart risks which increases social and financial return on investment.
It's $100-115 (I don't see any of that;)

I'm curious to know how bosses treat intrapreneurs.

Corruption in developed and developing countries

Watch this video for some great answers (not just mine!) on the questions of corruption and development.

Learning from Katrina

I finished watching Spike Lee's "When the Levees Broke" -- a four hour documentary on the aftermath of hurricane Katrina [focussing on New Orleans but applicable to the whole area] that was particularly interesting in the context of recent floods in Calgary and the last few years that I've spent living among Dutch people who have "fear of flood" in their DNA. It's also relevant to the conference I am attending today, on Canadian groundwater resources [read the paper at that link], as you'll see in a few paragraphs.

The documentary starts with the arrival of the storm but it spends most of its time on people's responses, the government's failure to respond, and how people felt about that. They were afraid and angry because the devastation of the storm ("We'd never expected something like that") was followed by incompetence and indifference on a massive scale ("George Bush decided to spend billions on Iraq but couldn't find money for us here"). A few thoughts:

The Army Corps of Engineers really failed to deliver, but I'm not surprised. They have been stretched for ages between developers' and politicians' desire to build in risky places and a total lack of adequate funding to protect those places. (USACE culture may be part of the problem, but engineers can protect anything with enough resources.)

Community, city and state resources were overwhelmed. Communities can take care of themselves when the size of the disaster is small enough and locals care enough about each other. NOLA is a tight community, but you can't help your neighbor when you're already drowning.

Government corruption and disorganization made preparation, response and recovery much harder. The Dutch would have had a plan. Four Calgarians have died in their floods, but over 1,800 died in Katrina. (The 265 deaths in "Super storm" "New normal" Sandy were foreseen in the movie, when one scientist says "the Boston-DC corridor would get North Carolina-sized storms due to climate change".)

The appalling lack of response from the Bush government and FEMA is deeply troubling. I think it reflects not racism ("Bush doesn't like black people") but indifference. Bush was responsible for two disastrous wars, the destruction of governmental institutions, a fiscal black hole, and abuse of many people. I'm not sure why he has never been tried for treason, but perhaps Obama's continuation of Bush policies (with help from other branches of government) confirms that this is business as usual. WTF, America?

Katrina was a storm. Storms have happened for eons, but their damages are getting worse because more people are living in harm's way and climate change is increasing the size of storms and the areas they affect.

Which brings me back to Canada and groundwater. Aquifers and wetlands are both good at absorbing and then gradually releasing large quantities of water, but we've over-exploited both for a little too long. Overdraft an aquifer and you lose water that you may want in a drought (as well as killing streams that depend on aquifer discharges to maintain year-round base flows). Dry out or build on wetlands and you lose their ability to absorb storm surges and clean water (as well as killing ecosystems that provide food and biodiversity). Climate change is making aquifers and wetlands ever more valuable, but it's rare to see people leaving them in place, let alone restoring them. That's a mistake, as their values to humans and societies are MUCH GREATER than the value derived from drying them out for subsidized agri-stupid or yet-another faceless tract of beach condos.

Bottom Line: We will have more Katrinas -- bad storms and painful human suffering -- when we put short-term cash flows ahead of long-term community and ecological resilience.

* Miami is in denial about its impending doom (even the Dutch can't prevent water from flooding you from below), but the Cubans -- realistic in their poverty -- are trying to restore the coasts that may protect them.

24 Jun 2013

Monday funnies

This doesn't go where you expect it...

... but this does?

Anything but water

  1. Refining self-interest: Academics used experiments to show that people in authority hold onto "inefficient" quantities of power -- and that their underlings contribute inefficient work effort [pdf]. From the opposite direction, Francis More Lappe ("Diet for a small planet") implores us to think with our eco-mind instead of our scarcity mind. (I think we combine the two, but I want people in power to be more eco. How do I get them to read and apply her ideas?)

  2. The economics of recycling (landfill is underpriced, so people need to be "irrationally" in favor of recycling to reduce waste going to the landfill -- but read this defense of prices in lieu of morality) and an update on farmers' quest for yield, featuring compost!

  3. Arnold Kling says that people use three different languages for politics (perhaps depending on the context), and that's why it's hard for some people to understand each other and make any progress:
    Progressives organize the good and the bad in terms of oppression and the oppressed, and they think in terms of groups. So, certain groups of people are oppressed, and certain groups of people are oppressors... Conservatives use civilization and barbarism. The good is civilized values that have accumulated over time and have stood the test of time; and the bad is barbarians who try to strike out against those values and destroy civilization... Libertarians weigh freedom versus coercion, so that good is individuals making their own choices, contracting freely with each other; and the bad is coercion at gunpoint, particularly on the part of governments.
  4. Tired of discourse? Maybe there should be a revolution?But there will be no revolution. What else can be done?
  5. Tired of all this? Look at these pretty pictures of man working WITH nature
H/T to RM

21 Jun 2013

Friday party!

A funny spoof of audiences doing whatever they're told...

Is Calgary experiencing an oil-flood nexus?

Calgary (Alberta, Canada) is experiencing severe floods. A friend of a friend, in Calgary, wrote this on their Facebook:
I'm not sure that this guy is connecting the dots...
  • Climate change is increasing volatility in the hydraulogical cycle, e.g., more intense rain, and these floods are related to CC, i.e., they may be caused by it or are merely "consistent" with CC.
  • Alberta produces a lot of oil, and the burning of fossil fuels (everywhere) is putting more carbon in the atmosphere and thus driving climate change.
So, the "economic miracle" of Alberta does have something to do with CC, which has something to do with floods. It may be fair to say it's worth it (tax revenues "unite" Canada!)  but some people do not like that tradeoff.

Bottom Line: Don't claim credit for cash flows from oil production and then deny blame for floods that are connected to oil production.

Anything but water

  1. A judge rules that interns should be paid. This -- like laws on minimum wages -- is relevant where market power leads to "self exploitation."

  2. Digital textbooks may be so good at promoting self-guided learning that they -- along with online courses -- may turn teachers into tutors. I think that's probably fine, as my most interesting experiences when teaching or giving public talks are in the Q&A

  3. Societies avoid collapse by building robust institutions that allow adaptation and diversification from risk, like markets

  4. Corruption in the energy sector hobbles (and enrages) Pakistanis

  5. Sheep subsidies are shagging sustainability

20 Jun 2013

Flooding and climate change

That bus shelter in the foreground is on a street under 2m of water
I was in Budapest last week, where water levels were at "historic" highs. There was no Plan B or upstream means of reducing water levels if water had gone higher.

Time to move to the second floor?

(I'm also midway through Spike Lee's When the Levees Broke, a documentary about Katrina's impact on an under-prepared New Orleans. Probably a good idea to check out your local situation and your community's technical and social resources. I also saw The Island President, about the president of Maldives and his efforts to bring democracy to an island doomed by rising sea levels. Recommended for the gritty details of corruption and back room climate change negotiations. He's since been deposed in a coup -- bad news for his people.)

Sustainable farming or political pork?

[NB: I wrote this 6 months ago, but it is still relevant...]

I got pulled into a lively discussion about sustainable meat production between some professors and students at my university, and here's what I told them:
I'm glad that this debate is occurring at WUR, with its world-class reputation on agricultural research (I graduated at a "sister" school, UC Davis and spent two years at UC Berkeley before coming to WUR).

While it's true that we're on track for 9-10 billion people on the planet, and it's also true that people with more money demand more meat (a positive income elasticity), it's also NOT true that there is a 1:1:1 relationship between population, meat consumption and sustainability.

I am writing from Kapit in Malaysian Borneo, and many people were eating meat in the market last night. The important point is that they were eating small portions -- relative to the Dutch and CERTAINLY relative to the Americans. That's because people eat less meat when it's expensive.

So both sides of this debate have valid points, and they can be reconciled by paying attention to the price of meat, and the way that higher prices reduce the quantity of meat demanded (a negative price elasticity).

So here's where I come in, as an environmental economist who supports free markets and free decisions. (I was also a vegetarian for 16 years, but now I'm not.)

The price of meat should reflect the total cost of its sustainable production. That means that Dutch (and Danish) farmers should change their practices to reduce water pollution (a.o. pollutions). That means that the appropriate "scale" of production may fall, as it's quite expensive to operate CAFOs that do not pollute and cheaper to run medium-scale combined food/livestock farms. That ALSO means that Dutch, American and other farmers are going to "lose' exports to cheaper (perhaps less sustainable) competition, since their meat will cost more, and that people will eat less meat in general.

So what we need to decide is this: Are we going to promote policies in the EU and abroad (EU foreign and technical aid has SIGNIFICANT impacts on agricultural practices abroad), or are we going to promote sustainable agricultural and livestock practices that will raise prices in the short run, but ensure long run sustainability for farmers, consumers and citizens (in their businesses, eating and environment, respectively)?

I certainly hope for the latter, and I certainly hope that people at WUR promote those goals, instead of the unsustainable export of meat products that make short run profits for industrial farmers while leaving the costs of their waste and pollution on their neighbors and our children.
Speaking of industrial farmers, I've gathered a few links in support of my feeling that small-scale farming (less than 500ha) is more sustainable and economic:
The relevant issue with scale is the fact that management capacity cannot take on too many acres (or plants), so larger farmers grow monocrops that are easier to manage but riskier in terms of returns and harmful for the environment (mostly via use of pesticides and fertilizers). At the other extreme, you can see how a small-scale farmer cannot afford a tractor that gives large-scale farmers cost advantages. That problem is true, but most of those "capital" arguments can be reduced by clubbing together in cooperatives.

Bottom Line: We get sustainability when we correctly price resources and costs. Such pricing -- especially in a new reality of climate change risk to crops -- makes small-scale cooperative farming a better choice for economic, social and environmental outcomes. Now let's see if the EU/US politicians can consider that before handing out more subsidies to mega-farmers who harvest only cash.

H/Ts to WB and ER

19 Jun 2013

Incentives matter

Speed blogging

  1. Living within our Means: Water and Resource Efficiency in Europe is disappointing. It emphasizes irrelevant footprinting rather than discussing the role of constraints (i.e., natural availability less e-flows equals water for economic use) and allocation mechanisms that encourage efficiency. I guess the EU likes to measure and regulate more than establish basic incentives and allow people to make efficient decisions without bureaucratic second-guessing.

  2. Although you may not expect it, Albania's water regulator is really doing a great job at reporting on their efforts to improve service in a sector that (like many in Eastern Europe) needs a LOT of investment and operational improvements. Check out their 2011 performance report [pdf] to see what ALL regulators should be reporting to the public. (Dutch drinking water companies "regulate themselves" in an admirable way, via their association VEWIN.)

  3. Drowning via corruption: I learned that Bangladeshis (who are vulnerable to climate change) are unwilling to pay "their share" for projects to protect themselves against floods, etc., because local politicians steal all the money. What's ironic is that countries like Bangladesh (destination of about $94 million in CC-related funds), gets far less than countries like South Africa ($540 million, or 17x the per capita amount of Bangladesh), Mexico, Egypt, et al. Why is this? Perhaps because "popular" destinations make it easier to "invest"?*

  4. This paper [pdf] discusses how a Spanish river basin was "closed" to further diversions and how irrigators  changed their behavior as a result. Environmental flows played a role, but it's unclear that they get priority.

  5. Maybe those irrigators (and others!) could benefit from this Training Curriculum for Community Engagement in Small Scale Irrigation, River Diversion and Reservoir Systems [pdf]. It was used in Ghana and Nepal.

* For even more fun, check out the correlation between fossil fuel subsidies (that increase use and thus climate change) and countries receiving funds to offset the impacts of CC. (Perverse facts brought to us by my clever GF.)

18 Jun 2013

Academic production AND marketing

For some time, I've held that academics do not contribute to progress because many of them fail to translate their work into the vernacular and make it available. In a recent email-exchange, MV gave me a case-in-point:
Typical for scientists: they do something which might even be relevant, but no one knows about it. Have the same with people working on drought: they write a benchmark book, but tell me about it 3 years later
What's to be done?

Well, I put my talks on my site, so that people can download/listen to them. Here, in fact, are recent talks on
I also put time into promote my existing ideas and papers, rather than just switching to a new topic and hoping that people will find their way to my popular and academic papers on my website. This paper was just accepted for publication:
Schuerhoff, Marianne, David Zetland and Hans-Peter Weikard (2013). "The life and death of the Dutch groundwater tax" [corrected draft] Water Policy forthcoming.
Abstract: We examine the Dutch national groundwater tax (GWT) --- a "win-win-win green tax" that promised to simultaneously provide revenue to government, reduce the relative burden of other taxes on productive behaviour (e.g., income tax), and improve environmental outcomes. We find that the GWT generated revenue without having a noticeable impact on production incentives or environmental health. Although the GWT is often cited as an example of environmental economics in action, it was neither designed, implemented nor operated in accordance with environmental goals. In many ways, the GWT was just another source of revenue --- and one that bothered special interests. The Dutch government revoked the "inefficient" GWT on December 31 2011.

Buyer beware, part 46

I was unhappy to pay for a seat that I did not need to reserve and very unhappy to be put on a return flight that left before I arrived, but I'm most unhappy about Auto Europe's deceptive pricing on car rentals.

Here's what happened:
  1. I booked a rental on their website (pickup: Seville airport), after comparing sites...
    This is a sample. Ours was $103 (EUR 78)
  2. We arrived at 8pm and then found that our rental was 60 percent more expensive due to the 49 EUR "airport pickup charge."

  3. After our holiday, I called AutoEurope (in Oregon!).
    Q: Was there any way to avoid that charge?
    A: No.
    Q: Then why was it not included in the price?
    A: It's included in terms and conditions...
    Q: You mean the ones that nobody reads?
    A: Yes. It's in there somewhere...
    Q: How do other customer react to those charges?
    A: When they see that they had agreed to them, they pay.
Well, I didn't agree, and I eventually got half my money back.

What bothered me -- and what's bothered regulators who now require that some airlines include ALL charges in the prices they quote -- is that there was no way to avoid this charge. It should have been included in the price, so that I would have been able to compare AutoEurope to other sites on an apples-to-apples basis.

What REALLY bothers me is that I discovered that AutoEurope's site gives different prices and terms to you, depending on where you set your "home country" when viewing their site.

These deceptive business practices may be profitable for AutoEurope, but they rip off customers because there's no clear way of understanding how your charges may vary.

Bottom Line: Boycott and complain when merchants rip you off. Use other businesses that are honest.

17 Jun 2013

Monday funnies

These spammers have some great lines...
Internal Audit, Monitoring,Consulting and Investigations Division

From: Ms.Carman L.Lapointe

Dear Unpaid Beneficiary

This is to inform you that I came to Nigeria yesterday from USA,after series of complains from the FBI and other Security agencies from Asia, Europe,Oceania, Antarctica,South America and the United States of America respectively,against the Federal Government of Nigeria and the British Government for the rate of scam activities going on in these two nations.I have met with President GoodLuck of Nigeria who claimed that he has been trying his best to make sure you receive your fund into your account through their reserve account in USA.

Right now,as directed by our secretary general Mr. Ban Ki-Moon,We are working in collaborations with the Nigerian Economic and Financial Crime Commission (EFCC) and have decided to waive away all your clearance fees/Charges and authorize the Government of Nigeria to effect the payment of your compensation of an amount of $10.5M approved by both the British/United States government and the UN into your account without any delay.The only fee you are required to pay in other to confirm your fund in your account is COURT NOTARIZATION FEE to the UN.

Sincerely,you are a lucky person because I have just discovered that some top Nigerian's/African's and British Government Officials are interested in your fund and they are working in collaboration with One Mr.Ben S.Bernanke,FAKE FBI and others from USA to frustrate you and thereafter divert your fund into their personal account.

I have a very limited time to stay in Nigeria here so I would like you to urgently respond to this message with your full name, full address,direct phone number so that I can advise you on how best to confirm your fund in your account within the next 72 hours.Contact me immediately on this Cell Phone: +234 [Nigeria] or email me on this [Vietnam]

Sincerely yours,

Ms.Carman L.Lapointe
United Nations Under-Secretary-General for Internal Oversight.

Water managers work for you

...but sometimes they do not remember that fact.

The Rijkswaterstaat (the Dutch ministry in charge of water infrastructure and water management) emphasizes that fact at the same time as it acknowledges staff discretion* with the following:
  • Be responsible
  • Be independent
  • Be reliable
  • Be careful
The Rijkswaterstaat also holds an annual "Integrity Day" to keep the message fresh by going over examples of where staff made decisions in compliance with these guidelines (and perhaps in conflict with personal or outside pressures to do otherwise).

* In my papers, I have explored how water managers are selfish like us [pdf], how they destroyed sustainability in Southern California, and how bureaucrats (in general) with discretion will serve the public good when they want to.

14 Jun 2013

Friday party!

Let's just pretend she's a cat :)

Anything but water

  1. "Money will continue to be wasted on research into social and psychological interventions unless the methods used by the researchers are fully reported in academic journals"

  2. The cocaine value chain (99 percent markup from Andean farmer to London user) explains the violence around drug trafficking and failure of the war on drugs.

  3. Issues that couples need to address if they are to be happy.

  4. The US government is putting a higher (shadow) price on carbon emissions for the purposes of writing regulations. It would be far more efficient (cheaper, faster, clearer) if the government would price carbon directly.*

  5. Institutional insights: "The Transition to Market Economies in Central and Eastern Europe"

* CAFE standards have improved fuel economy at a VERY high cost (i.e., making SUVs more profitable for some manufacturers, relying on technology where techniques are more efficient, etc.)

13 Jun 2013

Speed blogging

  1. This project (==>) to clean up plastic in the ocean needs engineers!

  2. Water Alternatives has a fascinating issue on the culture ("the hidden dynamics") of water managers.

  3. More government screw ups: the ethanol glut and irrigation efficiency subsidies that increase water use -- as noted here and here on this blog years ago. (Here's the solution.)

  4. Subsurface desalination intakes are environmentally and economically better [PDF]

  5. Interested in water management in Asia or Africa? The International Water Management Institute (IWMI)  has hundreds of studies and projects on all dimensions of water. I'd bet that full adaptation of IWMI findings and techniques would end water shortage on both continents.
H/Ts to TG, DL and BS

12 Jun 2013

Time for REAL water markets in California?

Will you bring me water if I put a sign in the desert?
This headline -- "The Tulare Irrigation District will receive zero surface water this year" -- is kinda ironic if you know that Tulare country was mostly underwater a century ago, before prior appropriation, subsidized infrastructure and total corruption turned the area into an income stream and environmental wasteland.

What can Tulare farmers do? I know they will ask for bailouts and extra subsidized surface water (even as they overdraft their groundwater), but they would be a LOT smarter to push for water markets. Why pay for water when you can get it for free? Because water markets are a LOT more reliable than politicians or courts.*

Bottom Line: Nature makes a drought; man makes a shortage.

H/T to RM
* ...and markets (or their potential) would force buyers and sellers to clarify surface and groundwater rights that are now abused, overextended and badly tracked. (Why? Because you need to know your rights before you can sell them!)

11 Jun 2013

Speaking of police states

There's an exhibition of World Press Photos in Amsterdam that's accompanied by an exhibit of "Russpress" photos from the past 50 years.

What's interesting is that those photos display the "heroic" and "beautiful" sides of Russian and Soviets, but not the destructive sides that are on display on the other side of the hall (e.g., war in Syria and Iraq, poverty in the US, etc.)

Why are there photos of Brezhnev the humanist, instead of Brezhnev the killer of Czechoslovaks? Why are there photos of valiant Russians in Chechnya, instead of the many extrajudicial killings those soldiers committed? Why do they show the firemen at Beslan instead of the 300+ people killed by a botched security operation? Where, indeed, are the investigative photos behind the apartment building bombings that lifted Putin to power "by accident"?

Well, one reason may be the sponsorship of Russpress by Gazprom, which is basically an arm of the Russian government Putin.

Bottom Line: I love the Russian people, but I'm quite surprised to see real-life agit/prop in these "modern" times.

Why you should care about the NSA spying on you

From this interview:

Not sure of what you can do about all this? I gave $100 to the Electronic Frontier Foundation. You can too.
More thoughts worth reading from Lynne Kiesling (Knowledge Problem), Jim Harper (CATO) Tyler Cowen (Marginal Revolution), The Economist (read the top comments!) and The Daily Show.

Living in a police state*

Attack innocent students? You get unemployment. Darn.
While there's some argument over the depth of NSA (and other governmental) surveillance of US citizens (and people all over the world), I don't think anyone disagrees that the Deep State has grown more powerful -- and more abusive -- since 9/11. They have used fear, uncertainty and dread (aka, FUD) to push further into our lives, on a paranoid and voyeuristic quest to see all and know all.

Have they brought us security? Not only do I doubt it (e.g., Boston bombings could occur 10x a day if people were angry) but I also think that the overt efforts have weakened security (e.g.., the pathetic incompetence and waste of the TSA, the horrors of a useless war in Afghanistan, and the total disaster of the gratuitous "liberation" of Iraq).

But, wait... isn't this a price worth paying -- a price for security -- for those of us with nothing to hide?

I'd say no; Orwell would say no; Stalin would know no, but here's the reality in a police state:
(1) The purpose of this surveillance from the governmen'ts point of view is to control enemies of the state. Not terrorists. People who are coalescing around ideas that would destabilize the status quo. These could be religious ideas. These could be groups like anon who are too good with tech for the governments liking. It makes it very easy to know who these people are. It also makes it very simple to control these people.

Lets say you are a college student and you get in with some people who want to stop farming practices that hurt animals. So you make a plan and go to protest these practices. You get there, and wow, the protest is huge. You never expected this, you were just goofing off. Well now everyone who was there is suspect. Even though you technically had the right to protest, you're now considered a dangerous person.

With this tech in place, the government doesn't have to put you in jail. They can do something more sinister. They can just email you a sexy picture you took with a girlfriend. Or they can email you a note saying that they can prove your dad is cheating on his taxes. Or they can threaten to get your dad fired. All you have to do, the email says, is help them catch your friends in the group. You have to report back every week, or you dad might lose his job. So you do. You turn in your friends and even though they try to keep meetings off grid, you're reporting on them to protect your dad.

(2) Let's say (1) goes on. The country is a weird place now. Really weird. Pretty soon, a movement springs up like occupy, except its bigger this time. People are really serious, and they are saying they want a government without this power. I guess people are realizing that it is a serious deal. You see on the news that tear gas was fired. Your friend calls you, frantic. They're shooting people. Oh my god. you never signed up for this. You say, fuck it. My dad might lose his job but I won't be responsible for anyone dying. That's going too far. You refuse to report anymore. You just stop going to meetings. You stay at home, and try not to watch the news. Three days later, police come to your door and arrest you.

Keep reading...
I think it's high time that the US "defense" and "security" (oxymorons) complexes be downsized as useless destructive. Will citizens stay bent over or will they side with Ben ("those who would sacrifice freedom for security deserve neither") Franklin?

Bottom Line: Now I have another reason to choose Canada over the US. Pathetic.
* NB: I wrote this before Snowden came out as the whistleblower

10 Jun 2013

Monday funnies

Caveat emptor!


(These are used to "mine" bitcoins, which are worth $100+ each.)

Ehrlich right, Simon wrong, part 3

In a famous bet, Paul Ehrlich had claimed that we would "run out of commodities" while Julian Simon claimed that we would not, because people ("The Ultimate Resource" in his words) would innovate. Ehrlich lost when the price of five commodities (he chose) fell over 10 years. Simon and his supporters claimed not just just some cash, but a permanent moral high ground over the whether we'd have to worry about resources.

Well, I and many others saw the problem with that claim. A few years ago, I wrote that Julian Simon missed the importance of the environment. Humans would damage the environment, I wrote, because it would be affected by our removal and use of resources.

Consider, for example, how we've been clever at discovering more gas and oil and not-so-clever at preventing climate change.

This week's Economist adds more details to this story by summarizing the results in a paper by David Jacks (who went to grad school with me :) in which Jacks finds that:
  • The prices of resources "in the ground" have been rising over the past 160 years (see this post)
  • The prices of resources "that we make" have been falling over that period.*
  • Human ingenuity has lowered the price of in-the-ground resources every so-often, but that fall in prices has increased demand, to the point that prices end up at even higher levels at the end of each 40-year "super cycle" of demand responding to supply responding to demand.
Very cool.

Bottom Line: The basic economics of goods -- private, common pool and public -- are robust, so we'd better manage common pool goods that can be over-exploited, protect rights to private goods that can be used efficiently, and put political effort and public money into preserving public goods we all share. Examples of these are, respectively, water in multi-user aquifers, irrigation water rights, and water in rivers.
* These include crops such as cotton. I wonder what the price trend would look like if we included a value for the intensity of inputs (e.g., fertilizer, capital, etc.) within the cost of production. This is relevant because many inputs are non-renewable and/or subsidized.

7 Jun 2013

Friday party!

This is a campfire croissant, and here are another 40 camping hacks.

Get to work adventures! (I'm going to the Yukon in August :)

Anything but water

  1. Some big name academics have an accessible article [pdf] on the impact of politics on economics (i.e., ignore at your peril). They give several examples of where concentration of economic power leads to abuse of political power. On a semi-related note, consider the connections between Keynesian economics and sexual liberation (the essay is flawed, but there's something to it).

  2. Biased beliefs fall away when people have to put their money where their mouth is.

  3. Speaking of institutions, consider their importance to the bad side of town and rail gauge (no, it wasn't the Romans, it was the horse's ass :) Getting serious, Cecil tells the tinhat crowd to forget about the Illuminati and worry about the failure of real institutions, e.g., Lessig's critique of the political process.

  4. A billionaire talks about how he's indirectly tacking climate change by improving information flows, why the Chinese may play a useful role in CC, and the unrealistic US debate over CC.

  5. The end of NGOs? Direct cash transfers are the best aid, which may be why billionaire tech entrepreneurs are giving that way. (I agree, and I'm abandoning my zombie 501(c)3; I'll be looking into crowdsourcing for whistlesafe, tapwaterprices, and other projects...) Oh, and the Economist has a nice briefing on "the end of poverty" ...mostly through liberalization.

6 Jun 2013

Speed blogging

She stole my line!
  1. Fracking is coming to California in a big way. It's likely that frackers will be heavily regulated on water quality; it's ironic that farmers are worried that frackers may be polluting, what? More than them? Ironic, isn't it?

  2. Climate change: "Warmer water will kill off most of California's native fish species"

  3. Bad news: "Groundwater depletion in the US"

  4. Maybe Americans are not paying attention to the impacts of climate change because the government is paying for 3/4s of the damages!
H/Ts to DL and RM

5 Jun 2013

Italia, fracas e agua

I gave a talk at the FAO on all-in-auctions recently (slides PDF and 27 min talk MP3), but the whole trip served as a microcosm of how Italy's sloppy culture of failure makes everyday life hard.

When I got to my hotel, there was nobody at reception, the iron was on the 4th floor ("you can go there to iron your clothes"), the wifi did not work, and the shower was a relic of the glamourous 50s. Luckily for me, I didn't have to use the metro to get to my talk, but the strike led me to take a taxi instead of the metro/train to the airport. That was 30 EUR more expensive and not necessary -- the strike didn't happen.

Why were there only seven people at my talk, in a room for 60? The secretary's email did not go out because the attachment was too large (and there was not warning of its rejection).

I had a good talk anyway: our experimental test of the all-in-auction [PDF] revealed that FAO water experts would pay $39 for water that would give them a profit of $6. Whoops. I hope that farmers are better at accounting.

As a final pleasure, I got my per diem in cash USD (after waiting 30 min) because EUR would take more time and cost me a 3 percent exchange fee. Recall that Italy is still in the eurozone.

Is my experience typical? Yes. I've talked a few people in the last weeks about Italy. All of them say "Italy is in trouble because the country defines chaos [fracas is an Italian word]. Great for for parties, though!"

Bottom Line: Italy is a nice place to visit, but I wouldn't want to live there.

4 Jun 2013

Buchanan and Tullock on regulation and taxes

This paper [pdf] explains why policy-makers choose regulation over taxes as a means of reducing negative externalities. (Read my post on Pigouvian taxes.)

Their main points are that taxes make it easy to shrink output (or the number of firms) to the correct level. Regulations do not and lead to too many firms competing inefficiently for a share of the regulated pie (e.g., for a share of permits in a cap and trade market for carbon).

Firms that prefer lobbying for a share of quotas to price competition, politicians who like to be lobbied and regulators who enjoy job security all prefer regulations. That "iron triangle" of interests explains why it's difficult to replace a complex system with a simpler one, and why the public gets screwed by regulatory failures.

But it gets worse: taxes are sometimes added to regulations, to either raise revenues or change relative prices. Those taxes may be a move in the right direction, but they usually just confuse things (e.g., taxing gasoline while regulating fuel efficiency). It would be better to have only taxes, but industry prefers regulations because -- as Buchanan and Tullock often discuss -- it can influence them.*

How could we overcome the iron triangle? We'd have to have politicians who cared more about the silent majority than special interests. That may happen in Northern Europe, but it's hard to see it happening in the US.

Bottom Line: Regulations may be the second- or third-best policy for society; we get them because they are the first best policy for special interests.
* This may explain why insurance companies lobbied so hard for Obamacare. Now we see that more people will be forced to pay more for coverage. FAIL.

Addendum: Tyler discusses the price of Obamacare in California.

Anything but water

  1. National Geographic on risk: "dopamine helps control motor skills but also helps drive us to seek out and learn new things as well as process emotions such as anxiety and fear. People whose brains don’t produce enough dopamine, such as those who are afflicted with Parkinson’s disease, often struggle with apathy and a lack of motivation... robust dopamine production holds one of the keys to understanding risk taking... the dopamine system is what compels humans to move forward."

  2. Based on the words we use "society has become more individualistic... it has also become less morally aware, because social and moral fabrics are inextricably linked. The atomization and demoralization of society have led to certain forms of social breakdown, which government has tried to address, sometimes successfully and often impotently."

  3. Bias beware: Economists funded by two sides of the dispute over damage from the Exxon Valdez came up with values for damages that differed by 1000x. Maybe economists are NOT so objective...

  4. ...which brings us to James Buchanan, a genius economist and founder of public choice theory (i.e., that "public servants" serve themselves); he died a few months ago. Anyone interested in governance and regulation should read his work, my papers on international aid workers and water managers [pdf], this post on how eminent domain "for the public good" may just harm private property, and the post I put up later today (deserves its own space).

  5. Speaking of government failure, Jon Stewart derides the Obama's Administration's persecution of "hackers and journalists" and disinterest in punishing the bankers that lost or stole $trillions. Don't listen to what he says; watch what he does. I'm disgusted.

3 Jun 2013

Monday funnies

This is more fail than funny. I hope that the ad managers didn't get paid for the brilliance of "harvesting icebergs with software." Wow.

Addendum: But wait, there are people who harvest icebergs (H/T to DL)

Asynchronous communication and relationships

A lot of us really prefer the way that email allows us to ask and respond to questions when we want, taking the time we want -- in contrast to the "strain" of meeting face-to-face or via teleconference on a one-size-fits-all schedule.

But it's not always a good idea to communicate asynchronously. I noticed, for example, that Cornelia and I have a hard time stopping work (or whatever) to spend time together.

It goes like this:
D: Wanna hang out?
C: Sure. Give me 5 minutes.
D: Ok, I'll just write this email.
C: [5 min later] Ready?
D: Oh, shoot. I'm doing something... 2 minutes.
C: Ok, I'll just do this...
D: Ok, ready?
C: Wait a sec...
[until one of us gets upset...]

So here's my solution: don't talk in minutes; talk in tasks, for example, "let me do 2 emails."

Then the person who asked in the first place can do whatever for the 2-20 minutes it takes the other to do the task(s), for as long as they take.

This (to me) is actually more relaxing for both sides, one who can get the discrete tasks done in the "right" amount of time, the other who doesn't feel ignored by passing some time (as if s/he's less important) because the time passed is always right (Don't do 3 emails!)