No doubt there is a logic to this. What are the numbers for US Congress persons? If you include all their perks, pensions?
Monthly Archive for May, 2010
No comment required on this one by Lexington at The Economist:
Sex and the single black womanHow jail undermines the black familyTHIS week’s column looks at how locking up huge numbers of young black men makes it hard for black women to form stable relationships. Simply put, when there are more women than men in the dating pool, the men have all the power. An African-American man with a good job and no criminal record knows he is a hot commodity. He can get sex without offering commitment, so he is often reluctant to settle down, according to Audrey Chapman, a relationship counsellor and the author of books such as “Getting Good Loving“.
The single black women I spoke to for the column were not happy about this. They all complained about a shortage of eligible black men. Some thought it might be partly because some black men were on the “down-low”, ie they secretly have sex with men. But I doubt there is much difference between the proportion of black men and women who are gay, whereas we know there are huge differences in incarceration rates between the sexes.
A paper by Kerwin Charles and Ming Ching Luoh finds that the mass incarceration of males has a dreadful effect on women in the same “marriage market”. (They divided America into 306 marriage markets, to reflect the fact that most people marry someone who is of the same race, roughly the same age and who lives nearby.) Tim Harford’s book “The Logic of Life” has a more reader-friendly discussion of the subject.
This is a much more serious issue than most people realise, and yet another reason to reconsider America’s extraordinarily harsh punishments for non-violent crimes. If conservatives care about family values, they should be appalled at what jail is doing to the black family.
I first learned of this Hawaii venture from “Catching the Aquaculture Wave” by Michael De Alessi Reason Foundation 2004. This is a good survey piece on what the tragedy of the commons fisheries “management” practices have wrought, and how the demand for fin-fish might be sustainably satisfied.
I’m not ready to agree with the title of this Seattle PI article “‘Guilt-free’ fish farming arrives“, but these developments do look promising. Kona Blue Water Farms is a venture-backed Hawaii startup, raising kahala (also known as Hawaiian yellowtail and almaco jack), or Seriola rivoliana. This fish was very nearly fished out in Hawaii — before Kona Blue’s aquaculture there was no commercial marketing (Hawaii locals call this fish “moi”).
The offshore cages chosen by Kona Blue are the Sea Station system — developed by Ocean Spar Technologies, which is a venture of Bainbridge Island’s Net Systems. Who incidentally make the very best catamaran netting that we know of — a woven Spectra net chosen for PLAYSTATION. Here’s more:
(…) Unlike salmon farms, which tend to be in protected bays near the shore, Kona Blue’s ranch is a half-mile offshore. A half-mile might not seem far, but it puts the fish cages in waters that reach more than 200 feet deep. Kona Blue leases 90 acres of open ocean from the state of Hawaii, though it actively uses just nine acres.
The cages in which Kona Kampachi grow are called Sea Stations, which are made by Oceanspar, a division of a company on Bainbridge Island that specializes in commercial fishing gear called Net Systems.
A Sea Station is a UFO-shaped contraption made of a galvanized steel and nets. The structure consists of a 65-foot-tall center pole called a spar and a “Saturn” ring made of 12 segments, and stretches 80 feet in diameter. Triangular swaths of net woven of Dyneema, a fiber used in bulletproof vests, are attached to the steel frame.
“It’s two dodecahedral cones inverted so that their bases abut,” said Sims, president of Kona Blue. “It’s shaped like a Chinese lantern.”
Langley Gace, ocean engineer and aquaculture manager at Oceanspar, explained the construction: “It’s a bicycle wheel with an extruded axle … which is good for size and strength,” and for maintaining a fixed volume. The net walls are stiff and taut enough to withstand tough water conditions.
“Regardless of the currents, (the Sea Station) always has 3,000 cubic meters. For fish health, you don’t put them in a cage with moving walls.”
These unique cages are fully submersible and can be raised halfway out of the water for harvesting or cleaning. Kona Blue owns four Sea Stations, which house a total of about 140,000 fish. One more cage will be added this summer.
Movement of the cages depends on pneumatics. A diver takes an air hose that’s connected to an air compressor on a boat and hooks it up to the spar, which functions like a submarine ballast that can be filled alternately with air or water to shift the cage above or below the surface. Depending on the compressor used, the process of raising the cage can take 10 to 40 minutes.
When the cages are fully submerged, the tip of the spar is 30 feet below the surface. At this depth, the Sea Stations and the fish contained within are protected from storms that would wreak havoc on standard surface cages — hence the need for salmon farms, which rely on surface cages, to be located in protected bays.
For a review of the range of offshore cage offerings, see “Offshore cage systems — a practical overview” [PDF].
OK, what about the input/output ratio? Salmon farming has demonstrated a very unfavorable 3 to 5 ratio (e.g., 5 kg. of fish meal to produce 1 kg. of market salmon). Kona Blue claims 1:1 input/output as follows:
Seriola rivoliana, whether it’s the wild kahala or the cultivated Kona Kampachi, is a carnivorous fish.
“The Kona project may be better than most fish farm operations, but as long as they are raising carnivores, there will be a protein loss, not gain,” said Bellingham-based Anne Mosness, who directs the Go Wild campaign for the Institute for Agriculture and Trade Policy. …”It isn’t sustainable. It creates a high-value fish for diners in wealthier nations and it causes prices and marketplace of wild fish to plummet.”
Wink, who considers himself a socially conscious entrepreneur, recognizes that the feed Kona Blue gives its fish is “the big attack point.”
“We are trying to do this in as sustainable a way as possible,” Wink said. “The fish meal comes from sustainably caught fisheries.”
Kona Blue uses a feed made by EWOS, a Norwegian-owned company based in Surrey, B.C.
(…) To minimize the feed used, the fish are fed once a day. This keeps them ravenous enough that at meal time the food released into the cages is devoured quickly, which helps prevent pellets from drifting into the ocean.
Kona Blue has found that once-a-day feeding creates an optimum food conversion ratio: It takes 1 pound of dried feed to produce 1 pound of fish. With farmed salmon, that ratio is 3 to 5 pounds of feed to 1 pound of fish.
Dr. Albert Tacon, of the University of Hawaii at Manoa, is a worldwide expert in aquatic nutrition and feed technology research. He believes that it is possible to raise carnivores sustainably, “provided that we can find sustainable feed ingredient sources and feeds that keep pace with the development of the sector.
“I think if anyone can conduct offshore aquaculture in an environmentally responsible way, it is Kona Blue. Their track record to date has been one of complete openness and transparency — this is so refreshing in an emerging industry which has had its share of ups and downs.”
Is this a profitable, scalable entreprise? Well it doesn’t look to good according to “The false promise of ocean aquaculture in Hawaii” . This critical article was produced by foodandwaterwatch.org who may have priorities inconsistent with objective reporting. Anyhow, therein I learned that Kona Blue has sold the farm and lease:
KBWF has demonstrated that its model of commercial aquaculture is not profitable.In January 2010, KBWF sold its ocean fish farm to Keahole Point Fish LLC.27,28 Despite $1.8 million in funding from NOAA, nearly $200,000 in federal stimulus grants and contracts, Hawai`i high-tech tax credits, nearly $10 million from investors and a product sold only in high-end restaurants and retailers, KBWF did not achieve a level of profitability to sustain its grow-out operations.29,30,31,32,33 On January 8, 2010, the Board of Land and Natural Resources unanimously approved the transfer of KBWF’s lease for 90 acres of Hawaiian waters to a company registered just two months prior as a foreign LLC in Delaware — Keahole Point Fish LLC. The board failed to question the applicants who were present at the meeting about their experience and how they proposed to turn the failing KBWF into a profitable enterprise.36 KBWF will continue to manage sales and marketing of Kona Kampachi as well as conduct research at their land-based hatchery at Natural Energy Laboratory of Hawai`i Authority.
One a more positive note, “OPEN OCEAN CAGE CULTURE“, summarizes some of the University of Hawaii Sea Grant work on this project. Principal investigator Charles Helsley. From this I learned that the these cages also perform as FADs, i.e., Fish Aggregating Devices. So outside the cages there should be enhanced productivity.
Popular Science has a decent survey article on OOA (offshore ocean aquaculture). For the fishing industry perspective, try World Fishing Today.
If your library has access, there are volumes of peer-reviewed papers at Journal of the World Aquaculture Society. E.g., “The Value of a Net-Cage as a Fish Aggregating Device in Southern California’.
This is just ridiculous:
The German energy market is working at full tilt to develop solutions for intelligent power grids. The latest coup is an energy alliance with the potential to stir up the electricity market: Lichtblick, a green energy supplier in Hamburg, and automotive manufacturer Volkswagen signed a worldwide contract in September for the production and marketing of miniature power plants.
There are plans for these 100,000 mini power plants to be installed in the basements of German residential buildings, where they would generate high volumes of electricity that could be fed into public grids as needed. This would open up a new chapter in the story of decentralized energy supply.
Instead of a few centralized energy sources, hundreds of thousands of small power plants could be delivering electricity in the future, thereby providing consumers with independence from giants like E.ON and RWE. The principle: electricity is produced whenever there is need and then consumed whenever there is an especially high amount of energy available. While the mini power plants are generating electricity upon demand in domestic basements, the heat by-product can be stored in the process. This would make it possible to provide buildings with reliable energy for heating and hot water at all times. Thanks to intelligent controls and network connections, large quantities of electricity could be fed into the public grid, thereby offsetting fluctuating energy volumes from renewable energy sources such as wind and sun.
“Imagine home power plants like a school of fish”, explains Christian Friege, CEO of Lichtblick. “Many small units form a large, efficient community that generates ‘swarm power’. We’ll network 100,000 home power plants to become Germany’s largest gas power plant.” With a 2,000-megawatt capacity, he is convinced that this decentralised virtual gas power plant can match the capacity of two nuclear power plants.
Up to 100,000 plants could be switched on within one minute, says Lichtblick, to become a kind of giant virtual power plant feeding the amount of energy required into the public grid. This is done via radio contact between the communications units installed in every device and is something that traditional base-load power plants cannot do: a power plant fuelled with brown coal needs up to seven hours to start up, and a nuclear power plant takes more than a day.
The reliability of the German grid becomes increasingly worrisome as excessive amounts of unreliable power are added to the grid (wind, solar). So instead of building reliable, inexpensive nuclear base load power, Germany will compensate by building 100,000 expensive, inefficient carbon-polluting standby generators. Powered of course by “reliable” Russian natural gas. It is the old technology everybody knows, but to conceal the truth they are marketing it as “Swarm Power”, which seems to be an evil child of the “Smart Grid” hype machine.
I will get excited when VentureBeat hosts a “Greenbeat” conference on mass-manufactured nuclear power modules. Then they will start making a real-world difference.
Meanwhile, the usual suspects convened to echo “Smart Grid” to one another. Vinod Khosla was cast as the “skeptic”, colorfully slashing the Smart Grid hype in this QandA at the 2009 VentureBeat green conference. Khosla says
he sees a “lot of fluff, a lot of ambiguity, not a lot of reality… in today’s smart grid discussions.”
Khosla refused to consider Silver Spring Networks as a “smart grid” investment. They just make electric meters — while the company is being promoted under the “smart grid” label.
Khosla has been looking for “smart grid” startups but hasn’t found any. He has dreary criteria like a “viable economic benefit to the consumer”. I was pleased that Khosla highlighted the most glaring weakness of the smart grid hype — it is a closed, proprietary hodgepodge of networks. The opposite of the open standards internet which allows a startup to reach customers with an first-version product for $50k.
There is work underway on the network standards issues, but I don’t expect any real-world progress for years. That is because the benefits to the utilities (and investors) of standards-adoption are very long-range, and only after a lot more capital investment. That is the typical problem with adopting standards into a large complex environment — an environment that cannot be shut down for experimenting or conversion.
Interestingly, Khosla identified storage as the #1 requirement to make the smart grid viable. Certainly affordable storage could reduce the very high cost of intermittent wind, solar — without storage you have to build an equal amount of polluting backup power, typically natural gas. Khosla just noted that storage makes “solar and wind better feeders for the grid”. Certainly storage does that, but at what cost? The only economic storage solution on the horizon is hydropower, which includes pumped water storage.
But Khosla is certainly correct if you can transform solar/wind into base load power by magical but economical storage then the grid will be much happier.
The key takeaway from Khosla’s short talk: Storage is the missing foundation that will make the Smart Grid a reality, and a more compelling opportunity for venture capitalists. He says he would be very interested in backing a storage solution that could make intermittent sources of energy like solar and wind better feeders for the grid — one that would also demonstrably lower costs for both consumers and utilities. As is, he says, the Smart Grid is sitting on a house of cards — it has no chance of encouraging conservation or cutting carbon emissions if it can’t properly store and use alternative energy in an economic way.
(…)
Before this can take place though, Smart Grid companies also need to accept that consumer behavior is incredibly difficult to change, Khosla said. While 5 percent of the population will take the time to check in on their energy use and make an effort to conserve, another 80 percent will ignore it entirely. “When you ask how many people will worry about interest rates on their credit cards, the answer is not many — they don’t know what they are paying,” he said. “The one thing that does change behavior is dramatic changes in pricing — going from $2 to $4 for a gallon of gas — that creates change.”
So tell me again, what does the consumer get from a “smart grid”? Will consumers buy Silver Spring meters if they are not subsidized by other taxpayers? That is not obvious to me. Look at the following marketing blurb:
Network infrastructure includes the Silver Spring Access Points (APs) and Relays that forward data from endpoints across the utility’s backhaul or WAN infrastructure into the back office.
The UtilityIQ application suite incorporates both utility applications such as advanced metering and outage detection as well as administrative programs for managing and upgrading the network.
The CustomerIQ web portal enables utilities to directly communicate usage, pricing, and recommendations to consumers. Silver Spring works with each utility to customize the information portrayed and to import utility-specific information such as rate schedules.
So Mrs. Consumer, why do you want to pay for that meter?
Ilmar Tessman is to a civil engineer what a homeopath is to a physician.
Steve Packard also detected that the photo isn’t of the actual Druid, but the idiocy appears to be the real thing.
Kirk Sorensen did a terrific LFTR presentation for Google Tech Talks last July. We just caught up last night to see the 82 minute video. The event was very well-attended, and the audience of Google managers and engineers was highly informed — so the audience questions were more like a grad-school seminar than the typical public forum on nuclear power.
Keep in mind that Kirk is a NASA chemical engineer and is doing all this educational outreach on his own dime. Do check out EnergyFromThorium.com — might as well start with Kirk’s plan “to Power the World with Thorium”.
I think Kirk is ready to do a full-on TED Talk. He shows a lot of polish at Google — but it will take a huge effort to crunch the story down to 18 minutes of totally compelling talk.
E.g., Gordon McDowell has compressed 197 minutes of Google Tech Talks on nuclear energy to 16 minutes of video and even more tightly in LFTR in 10 Minutes. But the video cuts have no production quality and don’t make sense unless you already know the subject.
Greg Mankiw posted September 2006 about Roubini’s outspoken analysis, linking this New York Magazine article. I think Roubini called the asset bubble in 2005 but I’ve not searched it up.
(…) You follow housing markets nationwide. What do you see happening?
When supply increases, prices fall: That’s been the trend for 110 years, since 1890. But since 1997, real home prices have increased by about 90 percent. There is no economic fundamental—real income, migration, interest rates, demographics—that can explain this. It means there was a speculative bubble. And now that bubble is bursting.
(…) Will there be a fire sale in the city?
I’d expect prices to be 5 to 10 percent lower a year from now, on average. On the national level, real home prices may fall 20 to 30 percent.
What would you advise buyers and sellers to do?
If you’re a buyer, wait, or at least don’t be buying based on an expectation of increasing values. If you’re a seller, rushing won’t make any difference, because it’s very hard to sell. If everybody rushes to sell, the glut is going to become worse.
So the ride is over?
Not only is it over, it’s going to be a nasty fall.
Geoff Riley has produced a very useful summary of Nouriel Roubini’s May 18th 2010 lecture at the LSE. Audio and video of the event are both available here — where you will find a rich library of recordings of public lectures at the London School of Economics.
Roubini’s lecture is probably timed to promote his new general audience book Crisis Economics
BTW, Roubini argues that the G20 financial reforms are not enough. In particular, he believes that the banks that are “too big to fail” are now also “too big to bail out” as their governments are out of bullets. His remedy is to break up the financial supermarkets — hopefully by new rules which make their profitability so unattractive that the markets do the reorganizations.
What do you think are the odds that the politicians in US, UK, Germany have what it takes to put their fiscal houses in order? Or to enact even the G20 financial reforms, much less the stronger Roubini reforms?
Here is an excerpt from the Amazon dialog between Ian Bremmer and Roubini:
Bremmer: In the book you express concern that following the massive leveraging of the private sector there is now a massive re-leveraging of the public sector that will put the economic recovery at risk. Why such worries?
Roubini: The Great Recession of 2008-2009 was triggered by excessive debt accumulation and leverage on the part of households, financial institutions and even the corporate sector in many advanced economies. While there is much talk about de-leveraging as the crisis wanes, the reality is that private-sector debt ratios have stabilized at very high levels. By contrast, as a consequence of fiscal stimulus and socialization of part of the private sector’s losses, there is now a massive re-leveraging of the public sector. Deficits in excess of 10% of GDP can be found in many advanced economies, including America’s, and debt-to-GDP ratios are expected to rise sharply – in some cases doubling in the next few years.
Such balance-sheet crises have historically led to economic recoveries that are slow, anemic, and below-trend for many years. Sovereign-debt problems are another strong possibility, given the massive re-leveraging of the public sector. In countries that cannot issue debt in their own currency (traditionally emerging-market economies), or that issue debt in their own currency but cannot independently print money (as in the eurozone), unsustainable fiscal deficits often lead to a credit crisis, a sovereign default, or other coercive form of public-debt restructuring. In countries that borrow in their own currency and can monetize the public debt, a sovereign debt crisis is unlikely, but monetization of fiscal deficits can eventually lead to high inflation. And inflation is – like default – a capital levy on holders of public debt, as it reduces the real value of nominal liabilities at fixed interest rates.
Thus, the recent problems faced by Greece are only the tip of a sovereign-debt iceberg in many advanced economies (and a smaller number of emerging markets). Bond-market vigilantes already have taken aim at Greece, Spain, Portugal, the United Kingdom, Ireland, and Iceland, pushing government bond yields higher. Eventually they may take aim at other countries – even Japan and the United States – where fiscal policy is on an unsustainable path.
Bremmer: Should we then worry about the risk of a collapse of the European Monetary Union–the so-called “eurozone?”
Roubini: This is a serious and rising risk. The dilemma for Greece and the other fiscally challenge countries dubbed the PIIGS — that’s Portugal, Italy, Ireland, Greece, Spain — is that, whereas fiscal consolidation is necessary to prevent an unsustainable increase in the spread on sovereign bonds, the short-run effects of raising taxes and cutting government spending tend to cause economic contraction. This, too, complicates the public-debt dynamics and impedes the restoration of public-debt sustainability. Indeed, this was the trap faced by Argentina in 1998-2001, when needed fiscal contraction exacerbated recession and eventually led to default.
In countries like the eurozone members, a loss of external competitiveness, caused by tight monetary policy and a strong currency, erosion of long-term comparative advantage relative to emerging markets, and wage growth in excess of productivity growth, impose further constraints on the resumption of growth. If growth does not recover, the fiscal problems will worsen while making it more politically difficult to enact the painful reforms needed to restore competitiveness.
A vicious circle of public-finance deficits, current-account gaps, worsening external-debt dynamics, and stagnating growth can then set in. Eventually, this can lead to default on euro-zone members’ public and foreign debt, as well as exit from the monetary union by fragile economies unable to adjust and reform fast enough.
Provision of liquidity by an international lender of last resort – the European Central Bank, the IMF, or even a new European Monetary Fund – could prevent an illiquidity problem from turning into an insolvency problem. But if a country is effectively insolvent rather than just illiquid, such “bailouts” cannot prevent eventual default and devaluation (or exit from a monetary union) because the international lender of last resort eventually will stop financing an unsustainable debt dynamic, as occurred Argentina (and in Russia in 1998). Thus, the weakest links of the EMU – countries such as Greece may be eventually be forced to default and to exit the monetary union to regain their competitiveness and growth through a depreciation of their new national currency.
Bremmer: So how can we properly deal with the fallout of financial crises? How to properly reduce private and public debts?
Roubini: Cleaning up high private-sector debt and lowering public-debt ratios by growth alone is particularly hard if a balance-sheet crisis leads to an anemic recovery. And reducing debt ratios by saving more leads to the paradox of thrift: too fast an increase in savings deepens the recession and makes debt ratios even worse.
At the end of the day, resolving private-sector leverage problems by fully socializing private losses and re-leveraging the public sector is risky. At best, taxes will eventually be raised and spending cut, with a negative effect on growth; at worst, the outcome may be direct capital levies (default) or indirect ones (the inflation tax if large budget deficits are sharply monetized).
Unsustainable private-debt problems must be resolved by defaults, debt reductions, and conversion of debt into equity. If, instead, private debts are excessively socialized, the advanced economies will face a grim future: serious sustainability problems with their public, private, and foreign debt, together with crippled prospects for economic growth.
Bremmer: In the book you propose radical reforms of the system of regulation and supervision of banks and other financial institutions and criticize the more cosmetic reforms now considered by the US Congress and in other countries. Why the need for radical reform?Roubini: If reforms will be cosmetic we will not prevent future asset and credit bubbles and we will experience new and more virulent crises. The currently proposed reforms of “too-big-to-fail” financial institutions are not sufficient: imposing higher capital levies on these firms and have a resolution regime for an orderly shutdown of large systemically important insolvent firms will not work. If a financial firm is too-big-to-fail it is just too big: it should be broken up to make it less systemically important. And in the heat of the next crisis using a resolution regime to close down too-big-to-fail firms will be very hard; thus, the temptation to bail them out again will be dominant.
Also, the modest Volcker Rule – that may not even be passed by Congress because of the banking lobbies power – does not go far enough. It correctly points out that banking institutions that have access to insured deposits and to the lender of last resort support of the Fed should not be allowed to engage into risky activities such as prop trading, hedge funds and private investments. But more needs to be done: we need to go back to the more radical separation between commercial and investment banking that the Glass Steagall Act had imposed. Repealing this Act was a mistake that led to excessive risk taking and leverage by both banks and non-bank financial institutions.
Finally, the government should regulate much more tightly toxic and dangerous over-the-counter derivative instruments; and compensation of bankers and traders should be subject to radical “clawbacks”: bonuses should not be paid outright but go into a fund and clawed back if the initial investments/trades turned out to be risky and money losing over time.
Bremmer: Have we learned the lessons from the last financial crisis or are we planting the seeds of the next one?
Roubini: I fear that we have not learned those lessons and that part of the policy response is now creating a new global asset bubble that will cause a bigger financial crisis in the next few years. For one thing, there is a lot of talk about better regulation an supervision of the financial system but the financial industry is back to business as usual – rebuilding leverage, engaging in prop trading and other risk behavior, compensating bankers and traders with indecent bonuses – and is lobbying against better regulation and supervision. Governments are talking about reforms but almost no one has implemented them.
In the meanwhile interest rates remain close to zero in most advanced economies and they are also very low in many overheating emerging markets. Also dollar funded carry trades are feeding asset bubbles globally. Thus, part of the sharp rise in risky asset prices since March 2009 is driven by a wall of liquidity chasing assets that are becoming overpriced: US and global equities, credit, oil and commodity prices, emerging markets asset prices. And if this bubble eventually gets out of hand the eventual bust could lead to another and bigger global financial crisis in the next two or three years.
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